The recent Supreme Court case of Shimden Pty Ltd v Park Pty Ltd [2022] NSWSC 267 concerned a dispute between a landlord and a tenant in respect of a six-year lease of a service station and convenience store. The lease in question had expired the landlord had sold the premises. However, the landlord was seeking to recover amounts of rent and outgoings payable pursuant to the terms of the lease.

The issue was whether an estoppel would preclude the landlord from claiming the rent owed under the lease, considering they had sent erroneous invoices, which failed to include the annual CPI adjustments. The tenant argued that this claim was precluded by an estoppel against the landlord as the tenant was at all time acting on the assumption that the landlord would not increase the rent in accordance with CPI adjustments.

The Court found that the landlord had not made any representation suggesting that rent would not be increased by CPI. Hence, the applicant was entitled to claim the GST component and CPI increase in rent, but the way outgoings were dealt with by the parties gave rise to an estoppel by convention that precluded the landlord from recovering outgoings. The Court held that to allow the landlord to claim outgoings in an entirely different fashion ‘would be to engage in impermissible re-writing of the terms of the lease’ and ‘would involve imposition of liability in a manner not contemplated by the terms of the lease.’

The applicant failed in the claim for outgoings but was able to recover the unpaid GST and rent increase amounts.

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