The case of Darzi Group Pty Ltd v Nolde Pty Ltd involved a dispute in relation to the terms of a lease. Under section 8(1) of the Retail Leases Act 1994 (NSW) (“RLA”), a retail shop lease is considered to have been entered into when a person enters into possession of a retail shop as lessee or when they begin to pay rent as a lessee under the lease.  In this case, Darzi sought a declaration that the parties had entered into an agreement for the lease of a Premises, with the terms contained in a lease executed by Darzi on the 15 June 2016. The primary judge dismissed the claim on the basis that, whilst there was no binding agreement for a lease on the terms as claimed by Darzi, a retail shop lease as defined in the RLA had come into existence when Darzi entered into occupation of the premises.

Darzi appealed to the NSW Court of Appeal, and the Court allowed the appeal. It held that a binding and enforceable agreement for lease of the premises had come into effect on 31 May 2016, the terms of which were contained in the 15 June 2016 document – even though the lessor did not execute that document. The Act was engaged regardless of the fact that it was somewhat incomplete, because the RLA will apply whenever a person grants a right of occupation to a retail shop for a monetary value. Additionally, the correspondence between the parties evinced an objective intention to be bound by the lease.

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