Starkey v Mitchforce Pty Ltd [2000] NSWIRComm 216

Starkey v Mitchforce Pty Ltd [2000] NSWIRComm 216

The lease (and deed of assignment incorporating the lease) is a contract whereby work is performed in the hotel industry and thus within s 106. The contract, particularly as to rental level and adjustment, became unfair, harsh, and unconscionable in operation, due to changed circumstances, refusal to grant relief, and oppressive effect on the applicants, who were denied the benefit of a renewal option contrary to a binding rent deferral arrangement. The contract should be varied to substitute new, lower rental figures and terms reflecting market value, and the respondent must pay the applicants the difference arising therefrom.

Jurisdiction
Australia
Judgment Date
03 November 2000
Procedural Posture
Application Under S 106 Industrial Relations Act 1996 (nsw) for Unfair Contract Orders / Judgment After Hearing, Determination of Application and Jurisdictional Challenge
Outcome
Orders in favour of applicants: contract found unfair under s 106; contract varied; monetary order against respondent; declarations made; costs to applicants. Respondent’s jurisdiction challenge dismissed.
Legal Topics
['unfair Contract Under Industrial Relations Act 1996' 'lease of Commercial Premises' 'jurisdiction Under S 106 Industrial Relations Act' 'waiver and Variation of Contract' 'remedies for Unfair or Harsh Contracts']
['industrial Law' 'contract Law' 'property Law'] ['unfair Contract Under Industrial Relations Act 1996' 'lease of Commercial Premises' 'jurisdiction Under S 106 Industrial Relations Act' 'waiver and Variation of Contract' 'remedies for Unfair or Harsh Contracts']

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Procedural Posture

Application Under S 106 Industrial Relations Act 1996 (nsw) for Unfair Contract Orders / Judgment After Hearing, Determination of Application and Jurisdictional Challenge

Legal Issues

  1. 1 ['Whether a lease and associated arrangements constituted a contract whereby a person performs work in an industry for the purposes of s 106 of the Industrial Relations Act 1996 (NSW)' 'Whether the contract (lease) and the rent deferral arrangement were unfair, harsh, or unconscionable, or contrary to public interest within s 106' 'Whether the respondent was entitled to refuse the grant of an option for a further lease term based on non-payment of deferred rent' 'What remedies, including variation of contract or payment of money, are appropriate if unfairness is established']

Ratio Decidendi

The lease (and deed of assignment incorporating the lease) is a contract whereby work is performed in the hotel industry and thus within s 106. The contract, particularly as to rental level and adjustment, became unfair, harsh, and unconscionable in operation, due to changed circumstances, refusal to grant relief, and oppressive effect on the applicants, who were denied the benefit of a renewal option contrary to a binding rent deferral arrangement. The contract should be varied to substitute new, lower rental figures and terms reflecting market value, and the respondent must pay the applicants the difference arising therefrom.

Court Disposition

Orders in favour of applicants: contract found unfair under s 106; contract varied; monetary order against respondent; declarations made; costs to applicants. Respondent’s jurisdiction challenge dismissed.

Orders

  • ['Deed of consent to assignment of lease (incorporating original lease) varied as to rental level and annual adjustments from July 1992 onward as set out in judgment.' 'Rental for first 10-year term from 10 July 1992 to 9 July 1999 fixed at annual rents specified in the judgment (starting from $124,230 and increased...