Enidran Pty Ltd v Mirvac Funds Ltd & Anor [2000] QSC 476

State Reporting Bureau Queensland Government Department of justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WILSON J No 10227 of 2000 ENIDRAN PTY LTD (ACN 010 653 148) and MIRVAC FUNDS LIMITED (ACN 002 561 640) and PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) BRISBANE .. DATE 01/12/2000 JUDGMENT ith Floor, The Law Courts, George Street, Brisbane, Q. 4000 1 REVISED COPIES ISSUED State Reporting Bureau Date &" I I// o_,o Applicant First respondent Second respondent Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 9 -- 01122000. T15/AT17 M/T 8783/2000 (Williams J) HER HONOUR: This is an application for an interlocutory injunction. The applicant is the assignee of the lease of a coffee shop within Kawana Shoppingworld, a shopping complex at Buddina on the Sunshine Coast. The first respondent is entitled to be registered as the proprietor of the land on which the complex stands. The second respondent is still registered as the proprietor of that land. It has not been served with the application. The lease of the applicant's premises (shop 310) is for 10 years from 15 September 1994. The applicant took an assignment of the unexpired portion of the term from 15 January 1996. The first respondent wishes to redevelop that part of the complex in which the applicant's premises are located. By notice dated 30 August 2000 it advised the applicant: 11 1. the landlord requires the Premises for the purposes of demolition and/or reconstruction and/or substantial alteration and/or refurbishment; and 2. in accordance with Section 18.1 of the Registered Lease Memorandum (number L850878D) which applies to the tenancy, the Landlord hereby gives notice to the Tenant that as from 30 November 2000 ( 11 the Surrender Date 11 ), the Lease under which the Tenant occupies the Premises is terminated; and 3. the Landlord will re-enter the Premises on the Surrender Date, and requires the Tenant to vacate the Premises by that date; and 2 JUDGMENT 1 10 20 30 40 50 60 -- 2 of 9 -- 01122000. T15/AT17 M/T 8783/2000 (Williams J) 4. the landlord proposes to offer you a lease of the alternative premises identified on the attached plan. 11 The first respondent wishes work on the redevelopment to commence on 1 February 2001. It will cost approximately $20 million. The alternative premises which the first respondent has offered the applicant are larger in area than shop 310. Shop 310 has an area of 119 square metres while the alternative premises have an area of 190 square metres. The rent for the alternative premises would be greater than that being paid for shop 310, as would the overheads. Both premises face the food court, although shop 310 has a greater frontage. The applicant would lose the benefit of the fit-out of shop 310 and have to fit-out the new premises. The first respondent has offered a contribution of approximately $25,000 towards the fit-out although the applicant estimates that it would cost between $150,000 and $200,000. There would be a period when the applicant was not trading while the alternative premises were being fitted out. The applicant would have to obtain a new liquor licence for the alternative premises. The applicant seeks to restrain the first respondent until trial or earlier order from: 1. terminating the lease, 3 JUDGMENT 1 10 20 30 40 so 60 -- 3 of 9 -- 01122000- Tl5/AT17 M/T 8783/2000 (Williams J) 2. acting upon the notice it delivered to the applicant on or about 30 August 2000, 3. entering into possession of the demised premises, 4. executing on the applicant a new lease pursuant to clause 18 of the lease, 5. executing a surrender of the lease on the applicant's behalf. Clause 18 of the lease provides: "SECTION 18 - RELOCATION 18.1 18 .1.1 18 .1. 2 18 .1. 3 ·. RELOCATION The lessor if it requires the Demised Premises for demolition or reconstruction or substantial alteration or refurbishment or variation of the tenancy mix may:- by not less than three (3) months notice in writing to the lessee terminate this Lease and re-enter the Demised Premises (although the term of this Lease has not expired) on the date (the Surrender Date) set out in the notice being not less than three (3) months after the date of service of the notice on the Lessee. After the giving of the notice in Clause 18.1.1 and prior to the relocation date the Lessor shall submit a Lease to the Lessee in respect of alternative premises within the Centre. Upon receiving the Lease in Clause 18.1.2 above the Lessee will execute the same and return to the Lessor within fourteen (14) days or alternatively vacate the premises on the Surrender Date. Unless the Lessee gives notice of its desire to vacate within the fourteen (14) day period it shall be deemed to have agreed to take a lease of the alternative premises. 4 JUDGMENT 1 10 20 30 40 50 60 -- 4 of 9 -- 01122000- Tl5/AT17 M/T 8783/2000 (Williams J) 18 .1. 4 18 .1. 5 18 .1. 6 At any time after the Lessor delivers a notice under Clause 18.1.1 it may prepare and submit to the Lessee a Surrender of this Lease of the Demised Premises. The~Lessee shall execute such a Surrender and return it to the Lessor within fourteen days from the receipt of same. This Surrender shall be effective from the Surrender Date. If the Lease or Surrender is not signed as required by Clauses 18.1.3 and 18.1.4 then the Lessee hereby irrevocably nominates or constitutes the Lessor and its secretary and each of its directors for the time being jointly and each of them severally to be the true and lawful attorneys and attorney on behalf of and in the name of and as the act and deed of the Lessee to execute the said Lease and to do all such things and sign all such documents as may be necessary to obtain registration of the Lease or Surrender as the case may be. Upon issuing a notice to the Lessee under Clause 18.1.1 the Lessor agrees to pay to the Lessee upon the Lessee delivering up of vacant possession of the Demised Premises to the Lessor an amount by way of credit against the rental payable· in respect of the alternative premises, being one (1) month's base rental in respect of each full year of the unexpired term of the previous Lease (or such pro rata amount for a part of the year). In the event that the Lessee does not take a Lease of alternative premises then the amount of compensation payable by the Lessor to the Lessee shall be the sum of ONE DOLLAR ($1.00). The compensation payable under the provisions of this clause shall be the full amount of compensation which the parties have agreed to and is reasonable for the purposes of Section 15(3) of the Retail Shop Leases Act." The rights and liabilities of parties to leases in shopping centres have been regulated by legislation since the enactment of the Retail Shop Leases Act 1984. That legislation was repealed and replaced by the Retail Shop Leases Act 1994. 5 JUDGMENT 1 10 20 30 40 50 60 -- 5 of 9 -- 01122000' T15/AT17 M/T 8783/2000 (Williams J) For the purposes of the present application the first respondent conceded that there is a serious issue to be tried as to which Act is applicable. The applicant submitted that sections 43 and 44 of the new Act apply. Under those sections the applicant is entitled to reasonable compensation and any agreement between the parties is void to the extent it purports to limit the amount of compensation payable. The first respondent submitted that section 15 of the old Act applies, under which it was open to the parties to agree in the lease as to the amount of compensation payable, and that there is such an agreement in clause 18.1.6 of the lease. In my view, there is also a serious question to be tried as to whether, "alternative premises within the centre" in clause 18 of the lease should be interpreted as meaning, "reasonably comparable alternative premises". Arguably, such an implication is necessary to give business efficacy to the clause. It is not necessary to consider the other issues raised by the applicant as being serious issues to be tried. In the circumstances, the outcome of the application for an interlocutory injunction turns on the determination of where the balance of convenience lies. 6 JUDGMENT 1 10 20 30 40 50 60 -- 6 of 9 -- 01122000- Tl5/AT17 M/T 8783/2000 (Williams J) The first respondent's redevelopment is scheduled to commence on 1 February 2001. It cannot proceed unless the applicant is relocated, with financial implications for the first respondent and for other tenants of the complex. On the other hand, unless an injunction were granted, the applicant would be required to relocate immediately without any offer of compensation. It would be out of pocket and there would be a period when it was not trading while the alternative premises were fitted out. Both sides could be ready for a trial of the issues other than compensation by early January. The first respondent contended that compensation ought to be dealt with at the same time as the other issues and said that it could be ready for a trial of that issue also in early January. However, I think this is an appropriate case to order the other issues to proceed to trial immediately. I have been informed by counsel that their instructing solicitors have ascertained from the registry that three days are available, 10, 11 and 12 January 2001. The applicant proffered the usual undertaking as to damages. The first respondent queried the worth of the undertaking. In the circumstances, the undertaking would relate to a fairly short period of time. I am satisfied from the affidavit of Thys Jager, sworn 30 November 2000 and the material exhibited to it that the undertaking should not be 7 JUDGMENT 1 10 20 30 40 50 60 -- 7 of 9 -- 01122000. Tl5/ATl7 M/T 8783/2000 (Williams J) regarded as worthless. Further, Mr Jager has offered his personal undertaking to the same effect. In all the circumstances, I consider that the balance of convenience lies in favour of granting the injunction sought until the determination of the issues other than compensation. Accordingly, upon the undertaking the applicant in the usual terms and upon the further undertaking of Thys Jager in similar terms, 1. I grant an injunction in terms of paragraph 10 of the originating application filed on 23 November 2000 until the determination of the applicant's entitlement to the relief sought in paragraphs 1 to 5 and 9 of the application or further earlier order. 2. I order that the proceeding be continued as if commenced by claim filed by the applicant as plaintiff against the first respondent as first defendant and the second respondent as second defendant. 3. I order the applicant to file and serve a statement of claim by 4 p.m. on 6 December 2000. 4. I order the first respondent to file and serve its defence by 4 p.m. on 11 December 2000. 5. I order the applicant to file and serve its reply, if any, by 4 p.m. on 13 December 2000. 8 JUDGMENT 1 10 20 30 40 50 60 -- 8 of 9 -- 01122000 T15/AT17 M/T 8783/2000 (Williams J) 6. I order that disclosure be completed by 15 December 2000. 7. I order that upon the filing of a request for trial date the proceeding be listed for hearing on 10, 11 and 12 January 2001 of the issues relating to the applicant's entitlement to the relief sought in paragraphs 1 to 5 and 9 of the originating application. 8. I grant liberty to apply. 9 . I reserve the costs of and incidental to the application for an interlocutory injunction. And I make no orders with respect to the second respondent. 9 JUDGMENT 1 10 20 30 40 50 60 -- 9 of 9 --