Demtear P/L v Abelian P/L & Anor [2004] QSC 103

SUPREME COURT OF QUEENSLAND CITATION: Demtear P/L v Abelian P/L & Anor [2004] QSC 103 PARTIES: DEMTEAR PTY LTD (ACN 087 268 782) (plaintiff) v ABELIAN PTY LTD (ACN 088 938 229) and PIER PROPERTIES PTY LTD (ACN 102 983 111) (defendants) FILE NO/S: S1806 of 2004 DIVISION: Trial Division PROCEEDING: Trial ORIGINATING COURT: Supreme Court DELIVERED ON: 30 April 2004 DELIVERED AT: Brisbane HEARING DATE: 23 April 2004 JUDGE: Muir J ORDER: The plaintiff pay the defendants’ costs of and incidental to the trial of the separate issues of the construction and validity of clause 12.7 of the sub-lease and the validity of the notice dated 13 January 2004 given by the defendants to the plaintiff. Such costs including reserved costs, if any, to be assessed on the standard basis. CATCHWORDS: LANDLORD AND TENANT – FORM AND CONTENTS OF SUB-LEASE – CONSTRUCTION OF CONTRACTS – ENFORCEABILITY– UNCERTAINTY – where the defendants sought to enforce the relocation clause in the sub- lease – whether the relocation clause is void for uncertainty – whether the relocation clause is capable of any definite or precise meaning – whether the promise of the defendants in the relocation clause is illusory – principles to be applied in construing the sub-lease and in determining uncertainty – whether any part of the relocation clause is capable of severance if void. Retail Shop Leases Act 1994, s 43 Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 Attorney-General v Barker Bros Ltd (1976) 2 NZLR 495 Australian Broadcasting Commissioner v Australasian Performing Right Association Ltd (1972-73) 129 CLR 99 Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502 -- 1 of 11 -- 2 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 Godecke v Kirwan (1973) 129 CLR 629 Harvey v Pratt [1965] 2 All ER 786 Hide and Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Hillas & Co Ltd v Arcos Ltd (1932) LT 503 Kabwand Pty Ltd v National Australia Bank Ltd (1989) ATPR 40-950 Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 McFarlane v Daniel (1938) 38 SR NSW 337 Meehan v Jones (1982) 149 CLR 571 Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 Reardon Smith Line Ltd v Yng Van Hansen-Tangen [1976] 1 WLR 989 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 Lombard Tricity Finance Ltd v Paton (1989) 1 All ER 918 The Queensland Electricity Generating Board v New Hope Collieries Pty Ltd (1989) 1 Ll Rep 205 Thorby v Goldberg (1964) 112 CLR 597 Upper Hunter County District Council v Australia Chilling and Freezing Co Ltd (1967-1968) 118 CLR 429 Whitlock v Brew(1968) 118 CLR 445 York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth (1949) 80 CLR 11 Wickman Machine Tool Sales Ltd v L Schuler AG [1974] AC 235 COUNSEL: PA Keane QC, S-G with him M P Amerena for the plaintiff F L Harrison QC with him A M Musgrave for the defendant SOLICITORS: MacDonnells for the plaintiff Holding Redlich for the defendant Introduction [1] The plaintiff is the sub-lessee from the defendants of premises in the Pier Marketplace shopping complex in Cairns. For convenience, I will refer to the sub- lease as “the lease”. [2] On or about 14 January 2004, the defendants gave the plaintiff a notice dated 13 January 2004 pursuant to clause 12.7(a) of the lease in which the defendants required the plaintiff to relocate its business from the demised premises to specified new premises 90 days from the date of service of the notice. The plan attached to the notice showed the location of the New Premises. [3] The plaintiff commenced these proceedings claiming, inter alia, declarations that clause 12.7 of the lease and the relocation notice are void. [4] In their defence and counterclaim, the defendants – -- 2 of 11 -- 3 (a) Denied that clause 12.7 and the relocation notice were invalid or ineffective; (b) Alleged that the plaintiff had breached the lease in various respects and had failed to remedy the breaches; and (c) Claimed delivery up of the demised premises, mesne profits, and damages. [5] The plaintiff owns and operates a seafood restaurant in the demised premises which is on the south-eastern extremity of the complex opening onto a boardwalk overlooking the estuary. [6] The defendants are contractually committed to make extensive alterations to the complex and, in particular, to construct 23 additional hotel rooms. They allege that they will be unable to perform these works unless they have possession of the demised premises. [7] On 24 March 2004 I made orders to facilitate the separate trial of the questions of construction, validity and severance of clause 12.7 of the lease. That hearing took place on 23 April 2004. Clause 12.7 of the lease [8] The clause provides – “12.7 RELOCATION After obtaining the Authority’s approval, the Lessor shall have the right to relocate the Lessee’s business to another location within the Complex on the following conditions: (a) The Lessor must give the Lessee not less than 90 days written notice of the intention to relocate the business. The Lease shall terminate at the expiration of the notice; (b) The area of the premises at the proposed new location (the ‘New Premises’) must not be greater or smaller by 10% than the area of the Premises; (c) The New Premises shall be as nearly as possible comparable to the Premises; (d) the Lessor must pay the Lessee’s out-of-pocket expenses (if any), together with any direct overhead costs incurred as a direct consequence of the removal; (e) No rental will be charged in respect of either the Premises or the New Premises in respect of any period during which, solely as the direct consequence of the removal of the stock fixtures and fittings, the Lessee is unable to carry on business from either the Premises or the New Premises; (f) The Lessor must pay the costs of the surrender of the Lease, the Lessee must pay any stamp duty assessed -- 3 of 11 -- 4 on the Lease of the New Premises, but the Lessee shall be entitled to any refund of stamp duty consequence upon the surrender of the Lease.” [9] The plaintiff contends that clause 12.7 is uncertain in a number of respects and is void in consequence. The uncertainty arguments are now addressed. Insufficient identification of area and location of the New Premises [10] Where a notice under 12.7(a) is given, the lease terminates at the expiration of the notice. Clause 12.7 contemplates that a new lease will be entered into but says nothing expressly about its terms. For a new lease or agreement for lease to be enforceable there must be certainty, at least as to parties, term, the demised premises and the rent.1 [11] The defendants rely on the operation of clauses 12.7(b) and (c) to provide certainty as to the demised premises. The meaning of (c) is by no means clear. One possible construction is that the New Premises must be very similar to the existing premises having regard to criteria relevant to the assessment of desirability of premises for use as a restaurant. Such criteria would include, for example, proximity and exposure to public thoroughfares, visibility, views, useable space, ventilation and the like. Alternatively, the concept of “as nearby as possible” may need to be determined having regard to the availability of replacement premises in the complex. If that is so, in determining “possibility”, must regard be had to the power of the lessor to bring about the relocation of other tenants? [12] The plaintiff argues that given their inherent flexibility, sub-clause 12.7(b) and (c) cannot be used as a formula to clarify “the vital matters of the area and location of the New Premises”. It is further contended that the requirement of “comparability” in sub-clause 12.7(c) is too open-ended to be applied as an objective criterion by the courts and is “conceptually uncertain”. Finally, it is said that even if, which is denied, identification of area and location are vested in the lessor, there can be no binding agreement as the contract is illusory. [13] Difficulties in ascertaining the meaning of contractual provisions of this kind do not result, necessarily, in a finding of uncertainty. The principles to be applied are those set out in the following passage from the reasons of Barwick CJ in Upper Hunter County District Council v Australia Chilling and Freezing Co Ltd – 2 “But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction : and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd. (1932) 147 LT 503, at p 512 ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G.) & Nephew Ltd. v. Ouston (1941) AC 251 is not ‘so 1 Harvey v Pratt [1965] 2 All ER 786. 2 (1967-1968) 118 CLR 429 at 436-7. See also Meehan v Jones (1982) 149 CLR 571. -- 4 of 11 -- 5 obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention’, the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.” [14] Another, and consistent, expression of principle is to be found in the reasons of Williams J in York Air Conditioning and Refrigeration (A/sia) Pty Ltd v The Commonwealth3 - “If the court comes to the conclusion that parties intended to make a contract, it will if possible give effect to their intention no matter what difficulties of construction arise. In Scammell and Nephew Ltd. v. Ouston (1941) AC, at pp 268, 269 Lord Wright said ‘the object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at substance and not mere form. It will not be deterred by mere difficulties of interpretation . . . it is a necessary requirement that an agreement in order to be binding must be sufficiently definite to enable the court to give it a practical meaning. Its terms must be so definite, or capable of being made definite without further agreement of the parties, that the promises and performances to be rendered by each party are reasonably certain.’” [15] On appeal, Rich J expressed agreement with Williams J’s reasons and said that he could not usefully add to them. [16] Relevant also to the problem under consideration is the principle that courts should be astute to uphold commercial bargains.4 For example, in Banque Brussels Lambert SA v Australian National Industries Ltd,5 Rogers CJ Comm D remarked – “The whole thrust of the law today is to attempt to give proper effect to commercial transactions. It is for this reason that uncertainty, a concept so much loved by lawyers, has fallen into disfavour as a tool for striking down commercial bargains. If the statements are appropriately promissory in character, courts should enforce them when they are uttered in the course of business and there is no clear indication that they are not intended to be legally enforceable.” [17] A few years earlier, Sir Robin Cooke, in delivering the judgment of the Board in The Queensland Electricity Generating Board v New Hope Collieries Pty Ltd,6 said – “Arguments invoking alleged uncertainty, or alleged inadequacy in the machinery available to the courts for making contractual rights effective, exert minimal attraction. Sudbrook is now the leading English case in the field. The same tendency has been apparent elsewhere in the Commonwealth, as illustrated by Calvan Consolidated Oil and Gas Co Ltd v Manning, [1959] SCR 253; 3 (1949) 80 CLR 11 at 26. 4 Hillas & Co Ltd v Arcos Ltd (1932) LT 503 at 513. 5 (1989) 21 NSWLR 502 at 523. 6 [1989] 1 LL Rep 205. -- 5 of 11 -- 6 Attorney-General v Baker Bros Ltd [1976] 2 NZLR 495; and Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd, [1982] 56 ALJR 825.” [18] It does not appear to me that sub-clause (c) is “so obscure and so incapable of any definite or precise meaning” that the court is unable to determine a construction or “attribute to the parties any particular contractual intention”. Evidence, particularly expert valuation evidence, can readily enough identify those matters to which regard should be had in making relevant comparisons and a court can determine the meaning which should be given to the expression “as nearly as possible”. Once a meaning is attributed to the clause, there is no particular difficulty in determining, by reference to evidence adduced by the parties, whether the premises the subject of the notice meets the requirements of the sub-clause. [19] It is argued that although sub-clauses (b) and (c) of clause 12.7 provide some criteria in relation to the determination of the New Premises, they neither determine it or confer on a party or a third party the power of determination. There is certainly no express right conferred on the lessor to determine the New Premises but in my view such a right is necessarily implicit in the clause. The lessor can give notice of intention to relocate only after obtaining the approval of the Authority. Presumably, such approval must be in respect of an identified location. The introductory words of the clause confer on the lessor “the right to relocate the lessee’s business to another location within the complex”. Sub-clause (a) requires the giving of 90 days’ notice “of the intention to relocate” and sub-clause (b) refers to “the proposed new location”. It is implicit in these provisions that the New Premises be identified in the relocation notice and the only realistic repository of the power to identify the New Premises is the lessor exercising its right to require relocation. [20] Subject to the illusory contract argument to be addressed next, failure to agree on an essential term will not give rise to uncertainty if there exists some mechanism for determining it,7 or if in the absence of such a mechanism, the Court is able to make a determination by reference to some objective criteria or standards.8 The mechanism provided here is the lessor’s determination. [21] The illusory contract argument is based on dicta of Gibbs J in Godecke v Kirwan,9 where, after noting that parties to a contract may leave essential terms for determination by a third person, including the solicitors for one of the parties, his Honour said –10 “I should perhaps make it clear that it does not necessarily follow from what I have said that an agreement which left further terms to be settled by one of the parties, rather than by his solicitors, would be treated as a concluded contract. In May and Butcher Ltd v The King ((1934) 2 KB, at p 21), Viscount Dunedin suggested that a sale of land which left the price to be settled by the buyer himself would be good. With great respect, it seems to me that there would be no binding contract in such a case, which would fall within the principle that ‘where words which by themselves constitute a promise are accompanied by words which show that the promisor is to have a 7 Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at 605 and 610-617; Attorney-General v Barker Bros Ltd (1976) 2 NZLR 495 and The Queensland Electricity Generating Board v New Hope Collieries Pty Ltd (1989) 1 Ll Rep 205, 210. 8 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444. 9 Godecke v Kirwan (1973) 129 CLR 629. 10 At 646-647. -- 6 of 11 -- 7 discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought’ [Reference to authorities omitted.] It might be suggested that the same principle would not apply if the determination of the price were left to the seller, for then it would be the promisee, not the promisor, who was left with the discretion as to performance. However, in Beattie v Fine ((1925) VLR 363), Cussen J drew no such distinction and held that an option for renewal ‘at a rental to be agreed upon by the lessor’ did not give rise to any contractual obligation.” [22] The plaintiff placed reliance on Kabwand Pty Ltd v National Australia Bank Ltd, 11 in which the court, after referring to uncertainty arising through the parties’ failure to agree on a fundamental term and as a result of a party being left to choose whether he will perform it, said – “A third but related principle is that there can be no concluded bargain if a vital matter has been left to the determination of one of the parties” Godecke v Kirwan (1973) 129 CLR per Gibbs J at p 647 …” Reference to the above passage from Gibbs J’s reasons in Godecke v Kirwan reveals that his Honour did not state the principle in such unqualified terms. [23] Kitto J, in Placer Development Ltd v The Commonwealth, 12 identified the principle in these terms – “It is that wherever words which by themselves constitute a promise are accompanied by words showing that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought at all. The succinct statement of the principle in Leake on Contracts, 3rd ed., p. 3 : “Promissory expressions reserving an option as to the performance do not create a contract” was approved by the Lord Justice, as it was later by Lord Wright in Hillas and Co. Ltd. v. Arcos Ltd. (1932) 147 LT 503, at p 517.” [24] It is impossible to fit within these principles a clause which permits a lessor to relocate a tenant to another premises in the same complex, not more than 10 percent smaller or larger and “as nearly as possible comparable” to the old premises. [25] Williams J observed in York Air Conditioning,13– “But there is no reason why the parties to a contract should not agree that the determination of some of the incidents of the contract should be left to the decision of a third party or to one of themselves.” [26] The identification of the demised premises is no doubt an essential part of the bargain but when clause 12.7 is invoked there is an existing demised premises. The demised premises to be substituted must be in the same complex and meet the specified criteria discussed above. The lessor has no “option as to performance”, the discretion vested in it must be exercised within the specified parameters.14 The 11 (1989) ATPR 40-950. 12 (1969) 121 CLR 353 at 356. 13 (supra) at 29. See also Lombard Tricity Finance Ltd v Paton (1989) 1 All ER 918. 14 Cf Thorby v Goldberg (1964) 112 CLR 597 per Kitto J at 605. -- 7 of 11 -- 8 authorities referred to earlier show that, as a general proposition, consideration will not be regarded as illusory if a promisor having a discretion as to performance must exercise it within specified parameters.15Apart from these considerations, the plaintiff’s illusory contract argument is incompatible with the approach discussed earlier, that courts will, wherever possible, strive to uphold contractual bargains provided that to do so does not require the court itself to make the parties’ bargain for them. Failure to agree on a commencing date and duration. [27] The plaintiff argues that it is by no means necessarily implicit in clause 12.7 that the duration of the new lease was intended by the parties to be for the balance of the term of the old lease. The argument was developed as follows – “Such an implication does not go without saying. It makes no allowance for difficulties and delays which the sub-lessee might have in re-establishing its business in terms of goodwill given the new location in the shopping complex. Nor does it make any allowance for the very large impost on the tenant for the fitting out of the New Premises. A tenant’s profitability is directly affected by having to amortize the cost of not one but two fitouts in the course of a single term. Clause 12.7(d) limits payments which the sub-lessors must make to the sub-lessee to out of pocket expenses and direct overhead costs incurred as a direct consequence of the removal as opposed to a direct consequence of the relocation, thus excluding payment for the cost of the new fitout of New Premises; see generally Prestcold (Central) Ltd v. Minister for Labour (1969) 1 WLR 89 per Lord Diplock at 97.” [28] The defendants argue that the commencing date does not need to be specified; it is sufficient that it is able to be inferred by reference to other contractual provisions. Reliance was placed on Whitlock v Brew,16 in which there was a covenant by the purchaser in a contract for the sale of land on which a service station business was conducted that the purchaser will “immediately upon taking possession hereunder grant a lease of that portion of the land sold as is now used for the sale of the abovementioned products to the Shell Co. of Australia Limited …”. Addressing the question of whether the clause was uncertain as a result of not prescribing the term of the lease or the rent, Kitto J said – 17 “As regards the term of the lease, it sufficiently appears, I think, that the commencing date is to be the date when the purchaser obtains possession.” [29] McTeirnan J also concluded that lack of specification in the agreement could be cured if the unspecified matters were able to be inferred by reference to other provisions of the agreement . He said –18 “In my opinion it is not necessary for its validity that the clause should specify in so many words the time of commencement of the proposed lease, its duration or the rent payable if these matters can be inferred from the words of the clause taking into consideration the 15 See also Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 150, 151 per McHugh JA. 16 (1968) 118 CLR 445. 17 At 456. 18 At 453. -- 8 of 11 -- 9 circumstances which explain the purpose for which the clause was introduced into the contract.” [30] The clause contains no express mechanism for the fixing of a term for the new lease by reference to commencing date or duration but it is hardly to be supposed that the parties at the time of entering into the lease intended that these matters be the subject of negotiation. Such a conclusion would be inconsistent with the purpose of the clause which confers on the lessor “the right to relocate the Lessee’s business to another location within the Complex”. The lease is a commercial document of considerable length, seemingly prepared by lawyers. In those circumstances, one would not readily conclude that critical provisions were omitted inadvertently. [31] Clause 12.7 contemplates a continuum in which the possession of the New Premises will replace possession of the existing premises upon the expiration of the relocation notice. One sees from sub-clause (e) that relocation may take place, in part, during the term of the existing lease or during the term of the new lease. No rental is to be charged in respect of the period identified in sub-clause (e). The giving and taking of possession of the new premises are contemplated as is the payment of rent by the lessee. Sub-clause 12(f) assumes that a new lease will be entered into, but the flavour of the clause is that, with stated exceptions, the contractual relationship, for all practical purposes, continue as before. [32] As the clause does not mention the commencement and duration of the new lease, it is implicit that it commences at the expiration of the existing lease and is for the balance of its term. That construction in my view best gives effect to the intention of the parties insofar as it can be ascertained from the terms of the sub-lease.19 It also achieves the requirement of construing a commercial document so as to make commercial sense of it20 and, observes the dictate that “courts should be astute to adopt a construction which will preserve the validity of the contract.21 Consistently with principle, it upholds the parties’ commercial bargain. No rent is agreed or capable of being ascertained. [33] It is argued that there is neither formula nor machinery which enables the rent to be ascertained and that the operation of the clause depends on the future agreement of the parties. [34] The defendants’ argument is that – “There is nothing in clause 12.7 to justify the suggestion that there is to be a change in the rent. The proper conclusion is that the rent is to stay the same”. The defendants rely on an inference to be drawn from the terms of clause 12. [35] Essentially for the reasons I have already given in relation to commencing date and duration, I accept the defendants’ contentions. The clause assumes payment of a rental but provides no expressed mechanism for fixing it. Nor does it provide, expressly, for a commencing date or a term. Again, one would not readily conclude 19 Cf Australian Broadcasting Commissioner v Australasian Performing Right Association Ltd (1972- 73) 129 CLR 99 at 109. 20 see eg. Hide and Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 313- 314; Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201; Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 771; Wickman Machine Tool Sales Ltd v L Schuler AG [1974] AC 235 at 251. 21 Meehan v Jones [1981-1982] 149 CLR 571 at 589. -- 9 of 11 -- 10 from the clause’s failure to specify these matters that they had been overlooked or that the parties intended they be resolved by future negotiation. [36] The plaintiff’s response to this approach is to point to the possibility that the New Premises may not only be smaller in size but less favourably located and/or presented than the premises. Why, it is asked, would the parties have intended that, in these circumstances, the lessee continue to pay the old rent? Moreover, it is pointed out that no allowance is made for the cost of the new fitout on profitability. [37] I do not consider there to be substance in the fitout point. Clause 12.7(d) requires the lessor to pay the lessee’s “out-of-pocket expenses” and one would think that fitout comes within that description. As for the rental discrepancy point and a possible delay in commencement of trading on changeover, the defendants point to the provisions of the Retail Shop Leases Act 1994 (“the Act”). It is common ground that the Act applies to the subject premises. Clause 43 of the Act obliges a lessor to pay “reasonable compensation for loss or damage suffered by the lessee” as a result of relocation of the lessee’s business to other premises during the term of a lease. That legislation was in existence at the time the provisions of the lease were negotiated. [38] It is true, as is pointed out on behalf of the plaintiff, that the Act affords protection only in accordance with minimum standards and that the protection cannot be obtained without expense and delay. Nevertheless, the right to compensation under the Act is relevant background information which a reasonable contracting party in the position of the parties would have, or ought reasonably to have, known. It is thus relevant to the construction of the clause.22 [39] The fact that the lessor’s rights under the clause may be availed of by the lessor in a way which might cause material prejudice or loss to the lessee may also be a relevant consideration. As Lord Reid said in Wickman Machine Tool Sales Ltd v Schuler Ag23 – “The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.” [40] But although the operation of clause 12.7 may, in some circumstances, place a lessee in a worse position than it would have been in had there been no relocation, it does not appear to me that the potential results of upholding validity are such as to suggest that the parties were unlikely to have intended that there be no change in rent until the first rent review date under the new lease. To my mind the competing considerations discussed earlier overwhelm this indicia of construction relied on by the plaintiff. Severance [41] The defendants argued that if some of the sub-clauses of clause 12.7 were uncertain, they could be severed pursuant to clause 17.14 which permits the severance of “any term, covenant or condition” which is invalid or unenforceable. In view of the above findings, it is unnecessary to determine the severance question. If I had to decide it I 22 Reardon Smith Line Ltd v Yng Van Hansen-Tangen [1976] 1 WLR 989 at 995-6, per Lord Wilberforce. 23 [1974] AC 235 at 251. -- 10 of 11 -- 11 would find that the sub-clauses of clause 12.7 are so interdependent that severance is impossible. Severance would greatly alter the nature and extent of the parties’ bargain.24 Conclusion [42] For the above reasons, I find clause 12.7 valid and enforceable. Having regard to the above conclusions, it is also unnecessary for me to consider the parties’ arguments based on the implication of terms. Nor is it necessary to make any express findings about the validity of the re-location notice. The challenge to its validity was based on the alleged invalidity of clause 12.7 and no separate argument was advanced in relation to it. [43] I think that it is unnecessary to make any orders other than an order for costs but will entertain any submissions the parties may care to make in that regard. 24 See McFarlane v Daniel (1938) 38 SR NSW 337 per Jordan CJ at 345 cited with approval in Brown (Thomas) and Sons Ltd v Deen (1962) 108 CLR 391 at 411. -- 11 of 11 --