Avwin Pty Ltd v PT Limited and Ors

On 2 May 2024, in the Duty List, I made the following orders:

These are my reasons for making those orders.

These proceedings concern a dispute over the possession of the premises known as Shop 600, in the Westfield Shopping Centre, from which the plaintiff has conducted a restaurant (the Premises).

The relevant procedural history up to 19 April 2024 is set out in the judgment of Hammerschlag CJ in Eq in Avwin Pty Ltd v PT Limited [2024] NSWSC 436 (the 19 April Judgment). These reasons assume a familiarity with the 19 April Judgment.

The effect of the 19 April Judgment is recorded in order 1 made by the Chief Judge on that day, namely the injunction granted on 10 April 2024 and varied on 16 April 2024 is discharged.

That injunction had restrained the first defendant (Westfield) from interfering with the plaintiff’s possession of the Premises until further order.

Prior to 19 April 2024 the plaintiff had contended that it had an equitable lease entitling it to remain in possession until 31 December 2025. This is in circumstances where Westfield had entered into a new lease with a new tenant, the second defendant (Zilver) commencing on 1 May 2024, and registered the lease in September 2023. The plaintiff accepted on 19 April 2024 that it has no entitlement to remain in the Premises after 15 May 2024 and that any relief which might flow from a breach by Westfield of the equitable lease is restricted to damages (see [5] of the 19 April Judgment).

At [11] – [17] of the 19 April Judgment, Hammerschlag CJ in Eq recorded (my emphasis):

After his Honour made the orders, Hammerschlag CJ in Eq stated, in the context of a discussion with counsel in relation to when the plaintiff would vacate the Premises, that:

Westfield then, through its solicitors, wrote to the solicitors for the plaintiff by letter dated 24 April 2024, notifying the plaintiff that Westfield intended to re-enter and re-take possession of the Premises at 5.00 pm on Tuesday 30 April 2024. By letter dated 29 April 2024, Westfield notified that it would re-enter and repossess the Premises thereby terminating the lease immediately after 11.59 pm on Tuesday 30 April 2024.

As foreshadowed in the 29 April 2024 letter, shortly after midnight on 1 May 2024, representatives of Westfield and a contractor attended at the Premises and erected a hoarding around the Premises so as to prevent entry. Representatives of the plaintiff then removed the hoarding and the plaintiff continued to trade from the Premises on 1 May 2024. Thereafter ensued correspondence between the solicitors for the plaintiff and Westfield. By letter dated 1 May 2024, the solicitors for Westfield contended that, without prejudice to Westfield’s position, the lease had already been terminated and “notice [was] hereby given terminating the lease forthwith”.

The plaintiff refused to vacate the Premises and on 2 May 2024, both Westfield and Zilver relisted the matter in the Duty List seeking orders, in effect, requiring the plaintiff to vacate the Premises and not to hinder the defendants from re-entering the Premises.

A brief hearing was held where the plaintiff was represented by Mr D Smith of counsel, Mr A Fernon SC appeared for Westfield and Mr P Russell appeared for Zilver. At the conclusion of that hearing, I made the orders set out at the beginning of this judgment.

My reasons for making those orders are quite simple – nothing has relevantly changed since 19 April 2024. The plaintiff did not contend that anything had changed. The plaintiff has no entitlement to remain in the Premises after 15 May 2024. Westfield has sought to exercise its rights to retake possession and determine the lease. The plaintiff has a claim for damages for a maximum of about two weeks and damages is an adequate remedy.

Zilver has a registered lease commencing 1 May 2024 and is entitled to occupy the Premises under that lease. As recorded at [16] of the 19 April 2024 Judgment, if the plaintiff remains in the Premises beyond 1 May 2024 concomitant delay will be caused and it cannot be gainsaid that delay will be prejudicial to Zilver.

Counsel for the plaintiff was unable to identify any basis on which the plaintiff was entitled to remain in possession over the entitlement of Zilver pursuant to its registered lease. Counsel sought an adjournment of the hearing on 2 May 2024 to 3 May 2024 on the basis that the plaintiff had only been given notice of the relisting on the morning of 2 May 2024 and advice from senior counsel was being sought. I did not grant this adjournment. The plaintiff was clearly on notice since 24 April 2024 of the intentions of Westfield and was clearly warned on 1 May 2024 by letter from the solicitors of Westfield, that if the plaintiff did not vacate the Premises, then Westfield would approach the Court for relief.

Westfield sought relief on a final basis, in substance declaring that it had validly terminated the lease. This was, in effect, seeking an urgent final hearing which Hammerschlag CJ in Eq indicated on 19 April 2024 he was not minded to give to the parties.

In circumstances where it was clear that the balance of convenience still strongly favoured Westfield not being restrained from retaking possession, I determined to grant interlocutory relief of a mandatory nature requiring the plaintiff to vacate the Premises on the undertaking as to damages given by Westfield and Zilver, such undertaking only to relate to the period which the plaintiff accepts it now only has a right to occupy – namely up to 15 May 2024.

In the unlikely event that it is ultimately determined on a final basis that the plaintiff was entitled, over the objection of Westfield and Zilver, to remain in the Premises until 15 May 2024, the plaintiff will be at liberty to maintain any claim for damages for being required to vacate the Premises prior to 15 May 2024.