Elike Pty Limited v Tony Elias & Ors [2008] NSWDC 329

Elike Pty Limited v Tony Elias & Ors [2008] NSWDC 329

Clause 26 went to the heart of the lease because the parties intended the exclusive use by-law to confer valuable rights over the common property adjacent to Lot 13 for the plaintiff's benefit. The defendants failed to procure the by-law and the temporary licence was personal to the defendants and not assignable. The plaintiff validly terminated the lease by closing the business and removing its equipment in January 2004, and had not affirmed the lease. The plaintiff failed to prove expectation losses, but proved recoverable reliance damages for wasted set up expenses and wasted running expenses/loss of profit, subject to specific deductions.

Jurisdiction
Australia
Judgment Date
01 December 2008
Procedural Posture
Civil Proceedings for Damages Arising Out of a Lease / Judgment After Hearing
Outcome
Judgment for the plaintiff on liability and reliance damages; expectation losses rejected.
Legal Topics
['agreement for Lease' 'exclusive Use by Law' 'termination of Lease' 'conditions and Warranties' 'reliance Damages' 'expectation Losses' 'interest and Costs']
['contract Law' 'property Law' 'strata Law' 'civil Procedure'] ['agreement for Lease' 'exclusive Use by Law' 'termination of Lease' 'conditions and Warranties' 'reliance Damages' 'expectation Losses' 'interest and Costs']

Case Brief

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Procedural Posture

Civil Proceedings for Damages Arising Out of a Lease / Judgment After Hearing

Legal Issues

  1. 1 ['Whether clause 26 of the lease requiring an exclusive use by-law for 36 square metres of common property was an essential term or merely a warranty.' "Whether the defendants breached the lease by failing to procure the exclusive use by-law or effective temporary licence for the plaintiff's benefit." 'Whether the plaintiff validly terminated the lease or had affirmed it.' 'Whether the plaintiff was entitled to expectation losses and/or reliance damages.']

Ratio Decidendi

Clause 26 went to the heart of the lease because the parties intended the exclusive use by-law to confer valuable rights over the common property adjacent to Lot 13 for the plaintiff's benefit. The defendants failed to procure the by-law and the temporary licence was personal to the defendants and not assignable. The plaintiff validly terminated the lease by closing the business and removing its equipment in January 2004, and had not affirmed the lease. The plaintiff failed to prove expectation losses, but proved recoverable reliance damages for wasted set up expenses and wasted running expenses/loss of profit, subject to specific deductions.

Court Disposition

Judgment for the plaintiff on liability and reliance damages; expectation losses rejected.

Orders

  • ['The plaintiff is entitled to recover total reliance damages in the amount of $111,045.' 'The plaintiff is entitled to interest on the damages awarded in accordance with the Civil Procedure Act 2005, with the matter stood down for calculation.' 'Costs should follow the event on the ordinary basis, subject to any...