Scarcella v Linknarf Management Services Pty Ltd (In Liq) [2004] NSWSC 360

Scarcella v Linknarf Management Services Pty Ltd (In Liq) [2004] NSWSC 360

The provisions in the lease relating to consent to assignment amounted to a proviso and not a covenant by the landlord; accordingly, the unreasonable withholding of consent by the landlords (if it occurred) was not a breach of covenant and did not amount to repudiatory conduct capable of acceptance by the tenant to terminate the lease; similarly, no duty of care in negligence was owed by the landlords to the tenant or its holding company in refusing consent.

Parties
Plaintiff and Cross Defendant: Francesco Scarcella; Plaintiff and Cross Defendant: Helen Scarcella; Plaintiff and Cross Defendant: Rocky Scarcella; Defendant and Cross Claimant: Linknarf Management Services Pty Ltd (In Liq); Defendant: Ronald George Davies; Cross Claimant: Linknarf Limited (In Liq)
Jurisdiction
Australia
Judgment Date
30 April 2004
Procedural Posture
Equity Proceedings / Judgment After Trial of Principal Issues; Some Issues to Be Determined Separately
Outcome
Termination of lease by acceptance of repudiation by landlords not established. Cross claim for negligence by tenant and its holding company not made out.
Legal Topics
Assignment of Lease, Withholding of Consent, Repudiation, Negligence, Duty of Care
Landlord and Tenant Torts Equity Assignment of Lease Withholding of Consent Repudiation Negligence Duty of Care

Case Brief

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Parties

Francesco Scarcella

Plaintiff and Cross Defendant

Helen Scarcella

Plaintiff and Cross Defendant

Rocky Scarcella

Plaintiff and Cross Defendant

Linknarf Management Services Pty Ltd (In Liq)

Defendant and Cross Claimant

Ronald George Davies

Defendant

Linknarf Limited (In Liq)

Cross Claimant

Procedural Posture

Equity Proceedings / Judgment After Trial of Principal Issues; Some Issues to Be Determined Separately

Legal Issues

  1. 1 Whether withholding consent to assignment of lease was unreasonable
  2. 2 Whether unreasonable withholding amounted to a repudiation of the lease
  3. 3 Whether landlords owed a duty of care to tenant or its holding company in refusing consent

Ratio Decidendi

The provisions in the lease relating to consent to assignment amounted to a proviso and not a covenant by the landlord; accordingly, the unreasonable withholding of consent by the landlords (if it occurred) was not a breach of covenant and did not amount to repudiatory conduct capable of acceptance by the tenant to terminate the lease; similarly, no duty of care in negligence was owed by the landlords to the tenant or its holding company in refusing consent.

Court Disposition

Termination of lease by acceptance of repudiation by landlords not established. Cross claim for negligence by tenant and its holding company not made out.

Orders

  • Judgment for the plaintiffs for arrears of rent (final quantum not determined in published reasons);
  • Judgment for the cross defendants on the cross claim for negligence;