Ryals Hotel Pty Ltd v Zhaos Pty Ltd [2020] NSWSC 719

Ryals Hotel Pty Ltd v Zhaos Pty Ltd [2020] NSWSC 719

The first defendant's breaches adversely affected the plaintiff's hotel business, but the plaintiff did not prove the larger loss asserted by its valuer. A targeted comparison with comparable hotels provided a rational basis for assessment, but only a smaller adjustment than the first defendant's valuer allowed was appropriate for ramp up and other non-lift factors. The plaintiff's loss from the failure to provide a functioning lift by 7 June 2018 was assessed at about $190,000. No separate basement damages were awarded because the basement was not shown to be a profit-generating venue during the relevant period and loss could not be equated with the rent component attributed to it. The...

Jurisdiction
Australia
Judgment Date
11 June 2020
Procedural Posture
Commercial Lease Dispute by Plaintiff Lessee Seeking Declaratory Relief and Damages Against First Defendant Lessor / Principal Judgment After Hearing on Assessment of Damages, Abatement of Rent and Set Off Issues Following Consent Declarations and Orders Narrowing the Claims
Outcome
Plaintiff entitled to damages of $190,000 plus pre-judgment interest for the first defendant's breaches of the lease; rent abatement claim not made out.
Legal Topics
['commercial Lease' 'breach of Lease' 'damages Assessment' 'quiet Enjoyment' 'lift Installation Works' 'rent Abatement' 'set Off' 'pre Judgment Interest']
['contract Law' 'property Law' 'equity' 'civil Procedure'] ['commercial Lease' 'breach of Lease' 'damages Assessment' 'quiet Enjoyment' 'lift Installation Works' 'rent Abatement' 'set Off' 'pre Judgment Interest']

Case Brief

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Procedural Posture

Commercial Lease Dispute by Plaintiff Lessee Seeking Declaratory Relief and Damages Against First Defendant Lessor / Principal Judgment After Hearing on Assessment of Damages, Abatement of Rent and Set Off Issues Following Consent Declarations and Orders Narrowing the Claims

Legal Issues

  1. 1 ["What damages should be assessed for the first defendant's breaches of clauses 6.1, 25.6 and 25.9 of the lease by failing to install a new lift by 7 June 2018 and by the associated lift works and lack of a functioning lift until 7 December 2018." "Whether the damages assessment should include a separate amount for the plaintiff's inability to use the basement during the lift installation period." 'Whether the plaintiff was entitled to an abatement of rent under clause 10.1 of the lease.' 'Whether it was necessary to determine any set-off against rent due under the lease.']

Ratio Decidendi

The first defendant's breaches adversely affected the plaintiff's hotel business, but the plaintiff did not prove the larger loss asserted by its valuer. A targeted comparison with comparable hotels provided a rational basis for assessment, but only a smaller adjustment than the first defendant's valuer allowed was appropriate for ramp up and other non-lift factors. The plaintiff's loss from the failure to provide a functioning lift by 7 June 2018 was assessed at about $190,000. No separate basement damages were awarded because the basement was not shown to be a profit-generating venue during the relevant period and loss could not be equated with the rent component attributed to it. The...

Court Disposition

Plaintiff entitled to damages of $190,000 plus pre-judgment interest for the first defendant's breaches of the lease; rent abatement claim not made out.

Orders

  • ['The first defendant pay damages to the plaintiff assessed at $190,000 together with pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).' 'The parties are directed to confer and seek to agree upon the amount of interest to be included in the judgment and the appropriate order as to...