Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297

Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297

Clause 17.7 was included in the renewed lease and required the lessor to pay the lessee $45,000 on exercise of the option to renew; that construction was not absurd. Even assuming the lessee was not entitled to deduct that amount from rent, any claim by the lessor for unpaid rent was statute barred after more than six years. Clause 15 made the bank guarantee security only for the lessor's legal entitlements under the lease. Because the lessor had no enforceable legal entitlement when it sought to call on the guarantee, the lessee was entitled to an order permanently restraining the first respondent from making a demand on the bank guarantee and requiring return of the original guarantee.

Jurisdiction
Australia
Judgment Date
19 September 2011
Procedural Posture
Application for Leave to Appeal and Appeal From Equity Division Proceedings Seeking to Restrain a Call on a Bank Guarantee / Court of Appeal; Leave Granted and Appeal Allowed
Outcome
Leave to appeal granted; appeal allowed; orders of Windeyer AJ set aside; permanent restraint and delivery-up orders made against the first respondent; first respondent ordered to pay costs.
Legal Topics
['construction of Lease' 'option to Renew' 'fitout Contribution' 'recoupment, Set Off, Abatement or Reduction From Rent' 'bank Guarantee' 'negative Stipulation Restraining Demand on Guarantee' 'limitation Period for Arrears of Rent' 'meaning of "without Deduction"']
['landlord and Tenant' 'equity' 'contract Law' 'limitation of Actions'] ['construction of Lease' 'option to Renew' 'fitout Contribution' 'recoupment, Set Off, Abatement or Reduction From Rent' 'bank Guarantee' 'negative Stipulation Restraining Demand on Guarantee' 'limitation Period for Arrears of Rent' 'meaning of "without Deduction"']

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Procedural Posture

Application for Leave to Appeal and Appeal From Equity Division Proceedings Seeking to Restrain a Call on a Bank Guarantee / Court of Appeal; Leave Granted and Appeal Allowed

Legal Issues

  1. 1 ['Whether the lease required the lessor to make a payment of $45,000 on exercise of the option to renew.' 'If so, whether the lessee was entitled to recoup the amount by deduction from the rent.' 'Whether the lessor was entitled to call upon the bank guarantee after expiration of the limitation period with respect to debts due by way of unpaid rent.']

Ratio Decidendi

Clause 17.7 was included in the renewed lease and required the lessor to pay the lessee $45,000 on exercise of the option to renew; that construction was not absurd. Even assuming the lessee was not entitled to deduct that amount from rent, any claim by the lessor for unpaid rent was statute barred after more than six years. Clause 15 made the bank guarantee security only for the lessor's legal entitlements under the lease. Because the lessor had no enforceable legal entitlement when it sought to call on the guarantee, the lessee was entitled to an order permanently restraining the first respondent from making a demand on the bank guarantee and requiring return of the original guarantee.

Court Disposition

Leave to appeal granted; appeal allowed; orders of Windeyer AJ set aside; permanent restraint and delivery-up orders made against the first respondent; first respondent ordered to pay costs.

Orders

  • ['Grant leave to appeal and direct that, within 7 days, the applicant file a notice of appeal in the terms of the draft notice contained in the white folder.' 'Allow the appeal and set aside orders made by Windeyer AJ on 21 October 2010.' 'Order that the first respondent be permanently restrained from making any...