Keys v Salway [2015] NSWSC 613

Keys v Salway [2015] NSWSC 613

Clause 20.3 of the lease contained a drafting mistake and did not give effect to the parties' common intention that if, at expiration of the lease, the lessee's herd remained infected or failed to reach non-assessed or higher ranking status, the lessee would be required, if requested, to de-stock the land of breeding cattle for one year and pay rent for that period calculated as the rent for the final year of the lease increased by method 2. Rectification of the clause was necessary to prevent a commercially absurd result and effectuate the agreed risk allocation. Plaintiffs established breaches of various obligations under the lease, and damages were assessed accordingly.

Jurisdiction
Australia
Judgment Date
22 May 2015
Procedural Posture
Principal Judgment / Final Decision and Orders After Contested Hearing
Outcome
Judgment for the plaintiffs
Legal Topics
['leasehold Title' 'breach of Lease' 'rectification of Lease' 'damages' 'business Records' 'evidence Admissibility' 'property Damage' 'stock Diseases' 'contract Construction']
['real Property' 'evidence' 'contracts'] ['leasehold Title' 'breach of Lease' 'rectification of Lease' 'damages' 'business Records' 'evidence Admissibility' 'property Damage' 'stock Diseases' 'contract Construction']

Case Brief

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Procedural Posture

Principal Judgment / Final Decision and Orders After Contested Hearing

Legal Issues

  1. 1 ['Proper construction and rectification of clause 20.3 of the lease' "Whether the lessees' cattle achieved non-assessed or higher ranking status during lease" 'Obligations and breaches regarding property maintenance, repairs, and soil/fertility management' 'Admissibility of soil tests as business records' 'Quantum of damages for breached obligations']

Ratio Decidendi

Clause 20.3 of the lease contained a drafting mistake and did not give effect to the parties' common intention that if, at expiration of the lease, the lessee's herd remained infected or failed to reach non-assessed or higher ranking status, the lessee would be required, if requested, to de-stock the land of breeding cattle for one year and pay rent for that period calculated as the rent for the final year of the lease increased by method 2. Rectification of the clause was necessary to prevent a commercially absurd result and effectuate the agreed risk allocation. Plaintiffs established breaches of various obligations under the lease, and damages were assessed accordingly.

Court Disposition

Judgment for the plaintiffs

Orders

  • ["Clause 20.3 of the lease is rectified to provide: In the event that the Lessees' cattle have not reached non-assessed or higher ranking status at the expiration of the lease then, if requested by the Lessors, the Lessee agrees to de-stock the land of all breeding cattle for a period of one (1) year and continue to...