Written by In a judgment rich with practical lessons for landlords and tenants alike, the Supreme Court of New South Wales addressed a multifaceted lease dispute concerning a beachfront café in Maroubra. The case, Maroubra Pool Café Pty Ltd v Fedele [2017] NSWSC 1722, involved disagreements over the leased premises’ boundaries, commencement date, building obligations, consent to planning modifications, and the validity of lease termination.
Justice Darke held that the café was entitled to exclusive possession not only of the internal shop and garage, but also of a rear courtyard area depicted in architectural plans and used historically as part of the café’s operations. His Honour found that excluding this area from the demise would undermine commercial common sense, given its role in facilitating access between the café and garage. On the issue of commencement, the Court rejected the plaintiff’s argument that the lease started in May 2015. Despite construction delays, the lease was found to have commenced on 12 December 2014, the day after the landlord delivered an Occupation Certificate as required under the lease terms. The defendants’ attempt to terminate the lease, based on an alleged change in effective control of the tenant company, was also unsuccessful. Although ASIC records erroneously reflected a share transfer, the Court accepted unchallenged evidence that no actual transfer had occurred, rendering the termination invalid.
Further, the Court held that the landlord was under an implied duty to cooperate with the tenant’s application to extend trading hours. This duty arose from the lease’s commercial purpose, which required reasonable support for the café’s operation within the permitted use. Finally, while the café sought damages for conversion of equipment stored in the garage prior to the lease, the Court found it lacked the necessary title to sue. The decision reinforces the importance of clear drafting and a pragmatic approach to interpreting commercial leases.