Azkanaad v Galanos

[2008] NSWSC 398

CITATION:	Azkanaad v Galanos [2008] NSWSC 398
HEARING DATE(S):	28 April 2008
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	28 April 2008
DECISION:	Injunction granted restraining defendant from taking possession of the site until further order.
CATCHWORDS:	PROCEDURE - Injunctions - Negotiation for a lease - Plaintiff alleges agreement reached - Plaintiff goes into possession - Five years later defendant negotiates the lease site to third party and gives notice to quit - Defendant alleges rent due including annual adjustments back to date of alleged agreement and interests - Plaintiff alleges variation by conduct as no rent increases sought over the five year period - Third party requires vacant possession on 1 May 2008 - Plaintiff not keeping premises in repair and operating a service station on the site intermittently - Whether balance of convenience favours grant of injunction
PARTIES:	Azkannad Pty Ltd (Plaintiff) Galanos Bros Pty Ltd (Defendant)
FILE NUMBER(S):	SC 2454/08
COUNSEL:	Mr M Sahade (Plaintiff) Mr N Cotman (Defendant)
SOLICITORS:	Philip Goldman & Co (Plaintiff) V A Lawyers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

MONDAY 28 APRIL 2008

2454/08 AZKANAAD PTY LTD v GALANOS BROS PTY LTD

EX TEMPORE JUDGMENT

1 There is before the Court a notice of motion seeking an interlocutory injunction restraining the defendant from taking possession of a site in Sydney.

2 In 2002 negotiations took place between the parties with respect to an agreement for a lease by the defendant to the plaintiff of the site.

3 On 24 September 2002 the defendant's solicitors enclosed a document signed by the defendant, that document being the last proposal in the chain of negotiations by the plaintiff up to that point. The plaintiff says that this constituted an agreement for lease.

4 On 28 October 2002 an annexure was forwarded to the defendant's solicitors by the plaintiff's solicitors setting out, in detail, the terms of the alleged agreement for lease.

5 In March 2003 the plaintiff went into possession and has remained in possession ever since. The site is used by the plaintiff as a petrol station.

6 Apparently, the defendant has been in negotiations with Woolworths Ltd for it to acquire a lease of the site from 1 May 2008 to operate it as a service station.

7 On 19 March 2008 a notice to quit was served by the defendant's solicitors on the plaintiff's solicitors which required the delivery up and possession of the site on the expiration of one month after the service of the notice. The defendant apparently regarded the occupation of the plaintiff as on a month to month tenancy.

8 There had been arrears of rent. The defendant has calculated those arrears at $135,190.18. The plaintiff has tendered payment of $67,378.55.

9 The terms for the lease provided for annual adjustments based upon changes in the CPI or a similar index. No such adjustments were sought by the defendant and the plaintiff asserts that the practice of the parties was to ignore the rent increases. In other words there was, in the plaintiff's submission, a variation by conduct of the parties of the terms for the lease.

10 The larger amount alleged to be due by the defendant includes annual adjustments and interest for late payment of rent. The lesser amount calculated by the plaintiff does not include annual adjustments and does not include interest.

11 The defendant asserts that the premises are ill kept by the plaintiff, that no attention is paid to the curtilage and no repairs and maintenance of the premises are carried out. The service station lacks fuel and is opened for business intermittently.

12 The defendant asserts that the balance of convenience should be decided in its favour on the basis that it is an organisation that has the capacity to pay any award of damages if damages were granted, but there is no guarantee that an undertaking as to damages given by the plaintiff could be honoured.

13 The plaintiff is a trustee and there is no indication of the nature of the assets of the trust nor whether amounts have been distributed to beneficiaries.

14 The defendant asserts that damages are a suitable remedy and I should, on the balance of convenience, favour the defendant's case.

15 Notwithstanding the strength of those arguments, I am moved by the circumstance that the plaintiff has been in occupation of the premises since March 2003 and it was only on 19 March 2008 that a notice to quit issued. Arguments in relation to arrears of rent prior to that date do not seem to have gravitated the defendant to the extent of seeking to enforce the arrears.

16 That being so, it seems to me that I should not prejudge the issue as to whether there was a concluded agreement for a lease which is what I would effectively be doing if I refused the motion. That is a serious question to be tried. I should maintain the status quo under which the parties have conducted themselves for some five years.

17 I note the plaintiff by its counsel giving the usual undertaking as to Damages. I make the order in paragraph 2 of the notice of motion. In my view, the usual order that costs follow the event should be adopted in this case. I order the defendant to pay the plaintiff's costs. The expedition list will not be called until 2 May 2008. Since Woolworths seeks the site on 1 May 2008, I give leave to the defendant to approach the Registrar with a view to obtaining an urgent hearing of the matter.

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