Written by In the recent case of DTS Retail Pty Ltd v Bingara Wilton Holdings Pty Ltd [2022] NSWSC 1523, the plaintiff sought interlocutory relief to prevent a lessor from issuing a notice of termination of a lease under a demolition clause.
The issue was whether the balance of convenience supported the grant of injunction.
The plaintiff had a lease of a shop premises owned by the defendant, which commenced in 2018 and was due to terminate in 2026. The lease contained an option to renew for four periods of five years each. However, it also contained an ‘Additional Condition 33- Demolition’, which provided the lessor with a right to terminate the lease if the lessor proposed to demolish the Building, on the condition of giving the lessee at least six month’s written notice.
The plaintiff commenced proceedings three days prior to the Vacancy date nominated in the notice of termination, alleging that the director of DTS Retail Pty Ltd (the lessee) had not received actual notice of termination until shortly before DTS made its application to the court.
The lessor responded by preparing affidavit evidence establishing that all their dealings with DTS had been with a Mr Shastri, as agent of DTS, as well as evidence of numerous communications with him bringing the proposed demolition to his attention.
The Court concluded that DTS could have had an arguable case, however that possibility ‘came to naught’ because of DTS’ delay in commencing the proceedings, which carried the ‘overwhelming consequence’ that the balance of convenience required the dismissal of DTS’ claim for interlocutory relief because ‘the delay alone was sufficient to preclude that relief.’ This case demonstrates the importance of exercising legal rights promptly in all lease and contract disputes.