Edwards v Pangatta Enterprises Pty Ltd [1994] QSC 149

i' .. - '"' ~ -?. _.. sc q4/ 141 Llfg State Reporting Bureau I ,) ~~) ~) 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 Bu:-eau.) ' -~C.. c...c_ ._j lffR~E~V~/S;;E;D;'";C~O::::P::IE::-:S:.-1-"'-S----7 1 State Re'Jor.· 0 UED /3/ ~/ / '-r l.Eate /r; '(,~'g;~re.au I - SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MACKENZIE J WRIT No 581 of 1994 BRENDAN CORNELIUS EDWARDS Plaintiff and PANGATTA ENTERPRISES PTY LTD Defendant BRISBANE .. DATE 09/05/94 JUDGMENT 1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 227 4360. Facsimile: (07) 227 5532 .. -- 1 of 6 -- / 090594 TKB (Howell DCJ) HIS HONOUR: The notice of motion seeks an injunction restraining the defendant from interfering with the applicant's peaceful possession of premises at Southport. The premises contain or consist of a health club so far as the applicant's interest in the matter is concerned. The writ 10 itself seeks a declaration that there is a valid and subsisting agreement for a five year lease and five year option over 300 square metres in the defendant's building which is a commercial building in Short Street, Southport. It also seeks an order for specific performance and damages in 2 ~ lieu of a specific performance. The applicant's case is that in late 1992 he negotiated the c lease with an agent of the defendant, Mr Morris, so that he might establish the health club. Initially, he was only 30 interested in 100 square metres, but eventually .agreed to take 300 square metres. It appears that in October 1993 the area was increased to 419 square metres. Rental was agreed at $160 per square metre per annum and $40 per square metre per annum for outgoings and that the lease was to commence on 1 February 40 1993. ('.._ It was pleaded that the lease was made in or about November 1992 orally and evidence of it in writing was to be found in letters of 1 and 2 December 1992. The first letter from the so applicant to the defendant's agent, Morris, is difficult to construe as evidence of a concluded agreement. The letter of 2 December from Morris to the applicant, if it is evidence of some terms of the lease, suggests that rental was $160 per 60 JUDGMENT 2 -- 2 of 6 -- ) ) _/ ) 090594 TKB (Howell DCJ) square metre per annum with outgoings of $40 per square metre per annum. However, the correspondence suggests that to assist the applicant the amount to be actually invoiced in any month would be an affordable amount. There is nothing to suggest any intention on the part of the respondent to forgo accumulating unpaid rent and outgoings. The example given in the letter supports this view. If there is an agreement for a lease to be specifically performed, the lease involved payment of a total of $200 per square metre per annum by way of rental and outgoings. The evidence in favour of a five year term and five year option comes from the applicant which he supports with a document referring to the availability of such a term which he says was given to him by a representative of Morris named Vickers. There is no affidavit from Morris or Vi~kers but Dr Bitomsky deposes on information and belief that Morris not offer a five year lease. He deposes that only the possibility of a lease being negotiated in future was discussed. The letter of 2 December commences: "As discussed we do not require a formal lease until your business proves successful." In my view, this should be regarded as equivocal. did On the original material expenditure of $60,000 on fitting out 10 20 30 40 by the landlord was unexplained, however, during the course of so the proceedings Mr Bitomsky's affidavit was read and it indicated that the fixtures installed in the fit out were not specific to the kind of occupation by the applicant. In other words, they could be used and adapted in the event that JUDGMENT 3 60 -- 3 of 6 -- 090594 TKB (Howell DCJ) another tenant eventually took over that part of the premises. So, that aspect of.the matter also, it seems to me, becomes equivocal. At the time of these proceedings a government tenant prepared to pay market rent had been found and at least part of the area occupied by the applicant is apparently required for that tenant. One month's notice purporting to require the applicant to vacate the premises by 6 May was given on the basis that the applicant had only a monthly tenancy that reflects the respondent's submission to me as to the nature of the tenancy. There are disputed questions of fact underlying the differences between·the parties as to the nature of the applicant's tenancy. The applicant bases his claim on an alleged offer of. a five year lease or a Walton estoppel on his version of the negotiations which is partly disputed in the 10 20( c 30 defendant's affidavits. That being the case, the proper ( course is to assume that there is a serious question to be tried on that aspect of the matter. However, the respondent submits that, bowever that may be, specific performance and estoppel are both equitable remedies. He submits that neither can be obtained unless the applicant is able to do equity or, to put it another way, unless the applicant is ready, willing and able to perform his obligations under the lease. At present over $100,000 is in arrears and only $5,000 or thereabouts has been paid since the applicant went into occupation. ~here is no evidence of capacity on the part of JUDGMENT 4 40 c 50 60 -- 4 of 6 -- 090594 TKB (Howell DCJ) the applicant to pay monthly rental as it comes due let alone the arrears. The applicant deposes for the financial year to 30 June 1993 the business did not make a profit. It was unlikely to make a profit for the present financial year, although, it is deposed that income is sufficient to meet day-to-day living requirements of the applicant. He has no other source of income and only a small credit in his cheque account. His net assets consist of about $10,000 on the applicant's estimate. Most of the assets are not realisable in this connection because the great majority attributed to ) his assets is equipment relating to the health centre. This equipment ~as purchased with personal loan of $60,000 from Mr Edwards, the terms of which are not disclosed. If that sum ) is not taken into account, the applicant's net assets are estimated at $70,000 at which $50,000 represents equipment related to the business. Looking realistic~lly at the matter, there is no reason to ) suppose that the applicant would be able to perform the terms of the lease if ordered to be specifically performed. In Segacious Pty Ltd v. Fabrellas {1991} 1 QdR 471 Byrne J said _) at 479: "Ordinarily, of course, a party seeking specific performance must show ability and intent to perform his part of the bargain and in general that before proceedings began he performed his contractual obligations or at least was ready and willing to do so." On the material as it stands, there is no evidence that the applicant can comply with this requirement. Even assuming there is a serious question to be tried on the issue of what terms and conditions of the tenancy were,there is no basis for finding that the applicant can put himself in a position to JUDGMENT 5 10 20 30 40 50 60 -- 5 of 6 -- ---~------------·------ --- 090594 TKB (Howell DCJ) obtain specific performance at the trial. Accordingly, I do not think that the relief sought on the notice of motion should be granted. In view of this finding it is not necessary to consider the further ground relied on by the respondent that the undertaking as to damages offered by the applicant is illusory. I should simply say that while there is authority cited that relates to companies, I am not, as presently advised, convinced that it necessarily applies in the case of individuals but, as I have said, it is not necessary to come to finality on that. The order will be, therefore, that the notice of motion is dismissed with costs to be taxed. I order that the matter be tried speedily. JUDGMENT 6 .,. 10 c 30 c 40 c 50 60 -- 6 of 6 --