PL Town Hall Pty Ltd v The Trust Company Ltd

LEEMING JA: The applicant, PL Town Hall Pty Ltd, trading as Priceline, operated a pharmacy business from premises owned by the respondent. It failed to pay monthly rent for some months in 2020. It received a notice of termination of the lease on 17 February 2021. It commenced proceedings seeking relief against forfeiture. Those proceedings were resolved by a consent regime made on 3 March 2021 which required the payment of a sum of money within seven days in exchange for possession continuing.

The orders constituting that regime were as follows:

One of the payments referred to in order 3 was made but the bank guarantee was not provided within the seven days contemplated. On 11 March 2021, Priceline was locked out of the premises. Priceline applied to the Duty Judge on 12 March 2021 but the application was refused. There is no application for leave to appeal from either the orders made on 3 March or those made on 12 March 2021.

On 29 March 2021, Priceline commenced further proceedings. Those proceedings remain undetermined. By way of further interlocutory relief, the primary judge sitting as Duty Judge heard an application on 15 April 2021 and delivered substantial reasons of 82 paragraphs on 19 April 2021: PL Town Hall Pty Ltd v The Trust Company Ltd [2021] NSWSC 391. Notwithstanding those reasons, there was a further dispute as to orders which his Honour resolved on 21 April 2021, giving supplementary reasons.

Essentially, his Honour granted Priceline access to the premises over a period extending until either 30 April or 7 May 2021 for the purposes of recovering stock and other business assets, on terms that Priceline pay amounts of money representing one month’s rent (rather than the two months outstanding) together with an amount to pay for security guards to be present while the pharmaceutical products were being moved.

Priceline is dissatisfied with that regime and seeks leave to appeal. However, some four months have now elapsed. Priceline has not sought any interlocutory relief in this Court in support of its appeal.

It is significant to bear in mind the practical consequences that if there were a grant of leave, there would likely be a hearing of the appeal in the latter months of this year with the possibility of a judgment before the end of this year, but equally with the possibility of no judgment until early next year, some 12 months after the notice of termination of the lease had been received. It is also important steadily to bear in mind that this application for leave to appeal concerns the interlocutory regime by which the former tenant seeks equitable relief in relation to its chattels left in the demised premises pending the determination on a final basis of its claim.

The materials accompanying the application for leave are decidedly thin. They disclose nothing about what has occurred in the main proceedings over the last four months. However, it seems that on 10 May 2021 Priceline advised it would serve an amended statement of claim, and that that has occurred. The Court has been told that the relief is identical to that sought before Slattery J by way of interlocutory relief, namely relief for detinue and conversion, together with damages. The Court has also been told that, most recently, the respondent has filed an application for security for costs, which remains undetermined, but is expected to be determined in the next few weeks or, possibly, months.

The parties debated before us, as they did before the primary judge, whether reasonable notice had been given by the respondent prior to its taking possession. The applicant maintained that it had not and that it had a strong right at common law to obtain recovery of its property, and that equity would intervene in support of that right. The respondent submitted that the notice of termination of the lease was given on 17 February 2021, and that was followed by the seven day regime in March 2021, so that it had a strong case for reasonable notice already having been given.

The primary judge offered, and the offer is recorded in paragraph 55 of his reasons, to provide the parties with an early final hearing which, I would infer, would extend to that issue. His Honour recorded that both parties declined to accept that course, and it has not been put today that any aspect of his Honour's reasons in that respect were inaccurate.

It is inappropriate for the purposes of resolving this application for leave to express a view one way or the other on the strength or weakness of those arguments.

Rather, considerations of the balance of convenience are at the forefront of this application. It seems that, to a significant extent, the chattels on the premises which are the subject of this application were pharmaceutical products which, at the time possession was surrendered, had some considerable value, perhaps (although there is no evidence about this before this Court), some small number of hundreds of thousands of dollars. The value of that stock at the end of this year, or at the beginning of next year, may very well be considerably less than that amount. There is no evidence as to the extent to which various pharmaceutical products will reach the end of their sellable lifetime by late 2021 or early 2022.

What is clear, though, is that without seeking further interlocutory relief in this Court in support of its application for leave to appeal, Priceline has been able to get by without that stock and other business equipment for some five months, as well as having enjoyed some opportunities to retrieve the stock and equipment in the period after the issue of the notice of termination of lease on 17 February 2021.

In determining whether there should be a grant of leave, it is to be borne in mind that the orders which found Priceline's complaint:

Further, Priceline seeks damages in the alternative, and so far as may be seen on the materials before this Court, there is nothing to suggest that damages will not be an adequate remedy in the event that it succeeds in establishing its entitlement to its rights at law.

For those reasons, this is a most inauspicious vehicle for the grant of leave. I propose that leave to appeal be refused.

MCCALLUM JA: I agree with the presiding judge.

LEEMING JA: The order of the Court, therefore, will be application for leave to appeal is refused.

The order of the Court, therefore, will be summons seeking leave to appeal filed 10 May 2021 dismissed, with costs.