McINTOSH v DYLCOTE PTY LTD [1999] NSWSC 230

McINTOSH v DYLCOTE PTY LTD [1999] NSWSC 230

The Notice of Termination did not entitle the lessor to re-enter because clause 3.11 required reasonable notice, no reasonable notice was given, and the plaintiffs disputed the termination so that the arbitration mechanism had to be acted on before any termination could take effect. The lease therefore continued and the plaintiffs remained entitled to possession unless and until termination was obtained on arbitration.

Jurisdiction
Australia
Judgment Date
25 March 1999
Procedural Posture
Equity Proceedings Concerning Termination of a Hotel Lease, Possession, Injunction, Declarations and Damages for Trespass / Final Judgment After Hearing
Outcome
Notice of Termination declared of no force or effect; defendants permanently restrained from acting on it; damages for trespass referred for inquiry; defendants ordered to pay costs.
Legal Topics
['termination of Lease by Notice' 'damage or Destruction of Leased Premises' 'implied Obligation of Reasonableness' 'reasonable Notice of Termination' 'arbitration Clause' 'quiet Possession' 'trespass' 'estoppel']
['landlord and Tenant' 'property Law' 'contract Law' 'equity' 'arbitration'] ['termination of Lease by Notice' 'damage or Destruction of Leased Premises' 'implied Obligation of Reasonableness' 'reasonable Notice of Termination' 'arbitration Clause' 'quiet Possession' 'trespass' 'estoppel']

Case Brief

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Procedural Posture

Equity Proceedings Concerning Termination of a Hotel Lease, Possession, Injunction, Declarations and Damages for Trespass / Final Judgment After Hearing

Legal Issues

  1. 1 ['Whether clause 3.11 of the lease permitted the lessor to terminate the lease and re-enter after storm, rain and flood damage to the hotel building.' "Whether the lessor's opinion that reconstruction was undesirable was contractually effective without being subject to reasonableness and arbitration." 'Whether a notice of termination under clause 3.11 required a reasonable period of notice.' 'Whether a dispute about termination under clause 3.11 deprived the notice of effect pending arbitration.' 'Whether the lessor was estopped from relying on its power of termination.']

Ratio Decidendi

The Notice of Termination did not entitle the lessor to re-enter because clause 3.11 required reasonable notice, no reasonable notice was given, and the plaintiffs disputed the termination so that the arbitration mechanism had to be acted on before any termination could take effect. The lease therefore continued and the plaintiffs remained entitled to possession unless and until termination was obtained on arbitration.

Court Disposition

Notice of Termination declared of no force or effect; defendants permanently restrained from acting on it; damages for trespass referred for inquiry; defendants ordered to pay costs.

Orders

  • ["Order that the defendants by themselves, their employees and agents be permanently restrained from acting on the purported Notice of Termination of Lease from the first defendant to the plaintiffs dated 30 November 1998 and from interfering on the basis of that Notice with the plaintiffs' quiet possession of the...