Alroy Tavern Pty Limited v Blacktown City Council [2016] NSWSC 644

Supreme Court New South Wales

Medium Neutral Citation: Alroy Tavern Pty Limited v Blacktown City Council [2016] NSWSC 644 Hearing dates: 30 March 2016 Date of orders: 19 May 2016 Decision date: 19 May 2016 Jurisdiction: Equity Before: Darke J Decision: Amended Statement of Claim is dismissed with costs Catchwords: LANDLORD AND TENANT – rent – provisions as to rent in agreement for lease or lease – rent review provisions – where valuer nominated to undertake determination of current market rental value of 'Demised Premises' – whether valuer erred as to what constitutes 'Demised Premises' – whether valuation otherwise failed to comply with terms of lease Cases Cited: Eureka Funds Management Limited v Freehills Services Pty Limited [2008] VSCA 156; (2008) 19 VR 676 Kanivah Holdings Pty Ltd Pty Limited v Holdsworth Properties Pty Limited [2002] NSWCA 180; (2002) 11 BPR 20,201 Legal and General Life of Australia v A Hudson Pty Limited (1985) 1 NSWLR 314 Category: Principal judgment Parties: Alroy Tavern Pty Limited (Plaintiff) Blacktown City Council (Defendant) Representation: Counsel: Mr R Scruby (Plaintiff) Mr M Wright (Defendant)

Solicitors: JDK Legal (Plaintiff) Matthews Folbigg (Defendant) File Number(s): 2015/103757 Publication restriction: None

Judgment

Introduction 1. These proceedings concern an expert determination by a valuer pursuant to a rent review clause in a lease. The plaintiff, Alroy Tavern Pty Limited ('Alroy'), is the Lessee of certain land at Plumpton pursuant to a registered lease entered into with the defendant, Blacktown City Council ('the Council'), as Lessor. The lease is for a term of 10 years from 1 May 2006 to 30 April 2016. The lease contains options for three further terms of 10 years each. 2. Alroy and the Council had earlier entered into an Agreement for Lease dated 22 December 2000. The Agreement for Lease provided for Alroy to complete certain works on the land. In short, the works involved conservation work on a Victorian era residence situated on the property known as "Alroy", and the construction of additional structures including a gaming room, and other improvements such as a courtyard, landscaping and a car parking area. It was contemplated that upon completion of the works a lease would be entered into which provided for the Lessee to use the Demised Premises as a licensed family style tavern that may include gaming machines. 3. The lease subsequently entered into contains rent review provisions in clause 3.1. At the conclusion of the first seven years of the term, Mr Paul Hall, a valuer from Ray White Advisory, was nominated to undertake a determination of the current market rental value of the Demised Premises. On 16 July 2014 Mr Hall produced a report by which he determined that the current market rent of the Demised Premises as at 1 May 2013 was $145,000 per annum plus GST. 4. A dispute has arisen as to whether Mr Hall's determination is binding upon the parties. Alroy claims that the determination was not made in accordance with the provisions of the lease and is thus not binding. The Council takes the opposite view.