Competitive Funerals Pty Limited v Gurmit Singh Rai trading as Blacktown City Funerals &

Competitive Funerals Pty Limited v Gurmit Singh Rai trading as Blacktown City Funerals & - [2005] NSWSC 1171 - NSWSC 2005 case summary — Zoe

[6]

Abigroup Contractors Pty Ltd v ABB Service Pty Ltd (Formerly ABB Engineering Construction Pty Ltd) [2004] NSWCA 181 Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Allen v Carbone (1974) 132 CLR 528 Arjay Investments Pty Ltd v Morrison's Outdoor Catering Pty Ltd, NSW SC Unreported, 1 May 1995 Axelsen v O'Brien (1949) 80 CLR 219 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 Caton v Caton (1866) LR 1 Ch App 137 Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607 Dellwest Pty Ltd v Cafabe Pty Ltd, NSWSC Unreported, 26 November 1997 Di Biase & Ors v Rezek [1971] 1 NSWLR 735 (CA). Fitzgerald v Masters (1956) 95 CLR 420 Francis v Francis [1952] VLR 321 Gamvrogiannis & Anor v Blackshaw & Anor (2000) NSW ConvR 55-940 Godecke v Kirwan (1973) 129 CLR 629 GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 Hollander v Atkinson (1885) 6 L.R (NSW) Eq 69 (FC) Kassabian v Lagonicos & Anor (1993) NSW ConvR par 55-690 p 59-941 Kaufman v Michael (1892) 18 V.L.R 373 Khouri v Khoury [2004] NSWSC 770 Jenkin R Lewis & Son Ltd v Kerman (1971) Ch 477 Lancaster v de Trafford (1862) 31 LJ Ch 554 CASES CITED : Lapin v Abigail (1930) 44 CLR 166 Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 Maddison v Alderson (1883) 8 App Cas 467 Masters v Cameron (1954) 91 CLR 353 Millett v Regent (1975) 1 NSWLR 63 Multiplex Constructions Pty Ltd v Suscindy Management Pty Ltd [2000] NSWSC 484 Notter v Girault [2004] NSWSC 863 O'Rouke v Hoeven [1974] 1 NSWLR 622 (CA) Penny v Craber (1967) NWR 683 Regent v Millet (1976) 133 CLR 679 Rice v Rice (1854) 2 Drew 73 (Court of Chancery). Riley v Osborne & Anor [1986] VR 193 Sale v Lambert (1874) L.R. 18 Eq 1 Sinclair, Scott & Co v Naughton (1929) 43 CLR 310 Stockell v Niven (1889) 61 L.T. 18(CA) Thorby v Goldberg (1964) 112 CLR 597 Tornatora v Palatinus [1966] W.A.R 14 Upper Hunter County District Council v Australian Chilling & Freezing Co (1968) 118 CLR 429 Walsh v Lonsdale (1882) 21 Ch D 9 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Warmington & Anor v Miller [1973] 2 All E.R 372 Watson v Delaney (1991) 22 NSWLR 358 Whitlock v Brew (1968) 80 WN (NSW) 1520

[16]

a. On 21 July 2005, he met Con at the premises at 3pm with Ken Kirkham. b. On Friday 22 July 2005, he went to the premises with Mark Kirkham to meet Con and the director of the owner, Mr Ladha. On his arrival, Mr Ladha was there alone and introduced himself to him. Con arrived shortly after. During the meeting, the following discussion occurred: i. Mr Ladha clarified that the rent was $1650 per month for the parlour and one unit upstairs, though as the unit would be put on a separate lease, the parlour would be $1000 plus GST per month on a 3 by 3 year lease. ii. Mr Taylor accepted the lease price and asked Mr Ladha if they would be able to re-carpet the premises and Mr Ladha agreed. iii. Con and Mr Ladha discussed what to do with the Mr Singh's property. Mr Ladha said that he should be called and told to pick it up and if he fails to do so, it should be auctioned. iv. Con said the lease could commence on Monday and asked Mr Ladha if it was okay to provide the key then, and Mr Ladha did not object. Con gave him the key and he gave the key to Mr Ken Kirkham later that afternoon. c. On 25 July 2005, he went to the premises and met Mr Ken Kirkham to discuss a new fit out. Following this he phoned Con who confirmed that the fit out would be fine. d. On Wednesday 28 July 2005, he called Con after he was informed that the previous tenant, George, was in the premises and Con said he would check it out (I note, however, that the 28 July is in fact a Thursday). Mr Taylor went to the parlour and after seeing a vase was broken in the chapel, he again called Con who told him that he had seen George at the parlour and had informed him that he had been evicted, the lease was now held by Competitive Funerals and George could only come back to collect his goods at a later time. e. On Thursday 4 August 2005 at about 1pm, he went to LJ Hooker's office with Ken Kirkham to meet Con; George arrived shortly after them. Con said that there was no way that Mr Ladha was giving the premises back to George and that a cheque for the bond and first month's rent was unnecessary as the premises were Competitive Funerals' and the lease would be backdated. f. On Friday 5 August 2005, he phoned Con who informed him that George was offering to pay the back rent though would not be getting the premises back. Later that day, he and Mr Ken Kirkham were informed by Mr Kekatos that Mr Ladha had given the premises to George. He called Mr Blades, the managing agent for the mortuary, who indicated that they would also give the lease of the mortuary to George. He went to the parlour and found the locks had been changed.

[19]

10 In cross examination, Mr Taylor said that although he is a Director of Competitive Funerals he was not personally involved in conducting funerals and was only concerned with the business side of the operation (including the approximate costing of funeral services). He indicated that Competitive Funerals has an administrative office in Parramatta and also another funeral parlour at Stout Road, Mount Druitt. He also told the Court that Mr Jim Kekatos, the solicitor for Competitive Funerals, has an office next door to the Parramatta office and Mr Kekatos' father is a shareholder of Competitive Funerals. 11 Mr Taylor became aware that Blacktown City Funerals was behind in paying rent from Ms Michelle Sneddon, an employee of that company. 12 Mr Taylor conceded that he may have been mistaken about the date of the meeting at the premises and it could have been 29 July rather than 22 July, which would mean that all other dates referred to in his first affidavit would have to be changed. He stated that Mr Mark Kirkham was present for the entire meeting, except when he left to get bolt cutters, including when the parties went upstairs to the units. In relation to the meeting, Mr Taylor denied that Mr Ladha mentioned the need for references and a proper lease to be drafted, although at the end of the meeting it was said that a lease would be provided. He stated that at the meeting he knew the previous tenant was George (Mr Gurmit Singh Rai) but was unsure whether George had been evicted or was going to be evicted. 13 Mr Taylor admitted that when he first arrived at the meeting he thought the lease included both premises, the parlour and the mortuary. During the meeting, however, Mr Ladha clarified that the lease would only be for the parlour and also did not show him the mortuary. He conceded that although the agreement to lease was made with Mr Ladha, he was not sure whether Mr Ladha was there when he realised that the lease was only for the parlour and not the mortuary. 14 Mr Taylor stated that on Wednesday 28 July 2005 he met Mr David Blades, the managing agent of the mortuary, and despite deposing to a conversation that occurred could not remember the conversation (I note again, however, that the 28 July is in fact a Thursday). He told the Court that the sentence in par [16] of this affidavit reading "I thought we had leased the mortuary as we have leased next door" was incorrect. He stated that it should read: "Originally, I thought we had leased the mortuary as we have leased next door". He also noted that there was no internal access between the parlour and mortuary as the mortuary can only be accessed from the rear. 15 Mr Taylor also told the Court that when he met Mr Blades he told him that he thought George was overseas. He claimed that he could not recall whether at this time he had been told that George had been in the premises earlier that day in contradiction of par [15] of his first affidavit. 16 Also, in contradiction of par [11] of his first affidavit, Mr Taylor told the Court that at the meeting Con gave him the key prior to the discussion regarding re-carpeting the parlour. He denied that the key was only provided to enable him to take measurements for re-carpeting, to show Mr Ken Kirkham (the other director of Competitive Funerals) and on condition it was returned as soon as possible. He admitted that the fixtures and fittings of George had not been removed and there has been no new fit-out as discussed in his meeting with Ken Kirkham at the parlour on 25 July 2005. Mr Taylor also told the Court that Competitive Funerals conducted one funeral at the parlour on 23 July 2003, and had two more funerals booked but had to abandon them due to the complications with the lease. 17 In relation to the terms of the lease agreed to at the meeting, Mr Taylor confirmed that there was no discussion of insurance, consequences for non-payment of rent, holding-over provisions or what the rent might be for any extended period beyond the first three years. He told the Court that he expected that Mr Ladha's solicitors would finalise the lease but that he had not thought that any additional terms imposed by them would be unacceptable.

[20]

18 Although he initially conceded that he did not know or understand what a statement of claim was, Mr Taylor later claimed that he had read the statement of claim before his verification of it on 7 September 2005. He stated, however, that par [7] of the statement of claim was incorrect and should read that the lease was offered on 22 July rather than 25 July, and accordingly, the lease was entered into on 25 July rather than 27 July. He also acknowledged again, however, that the lease may have been offered on 29 July in which case, it was entered into on 1 August 2005. 19 Also in relation to par [7] of the statement of claim, he conceded that Mr Ladha only mentioned a "3 by 3 year lease" and not a "three-year lease with 2 options to extend for another 3 years", and also said his solicitor would prepare a lease, not specifically a "Standard Law Society Lease". He admitted that he did not understand the meaning of a "3 by 3 year lease" though presumed it would be a three year lease. Similarly, he did not understand the meaning of the terms "option for renewal", "three-year lease with 2 options to extend for another 3 years" or "Standard Law Society Lease", when he verified the statement of claim. 20 Mr Taylor conceded that prior to meeting Mr Ladha on 22 July 2005, he had not previously met him and did not provide Mr Ladha with any financial details at that meeting or complete a written lease application. 21 Further, he claimed that on 4 August 2005, whilst meeting Con at LJ Hooker's office, he offered to pay the bond assuming that it would be one month rent as with residential leases and did not think that it was strange that Con refused his payment of bond and rent. 22 Mr Taylor admitted that he and Ken Kirkham had entered into and guaranteed a commercial lease for the funeral parlour at Stout Road, Mount Druitt 12 months ago and had provided a security deposit. He was unable to recall whether the lease contained an option to renew for two years and whether that option had been exercised. He stated that he did not believe that there was any licensing requirement to carry on a funeral business, though later conceded that Competitive Funerals were awaiting certification from the Health Department to allow the use of the Mount Druitt premises as a mortuary and funeral parlour. 23 Mr Taylor denied that the proceedings were essentially an attempt by Competitive Funerals to push Blacktown City Funerals out of the funeral market in the Seven Hills area and that he or Mr Ken Kirkham offered to buy Blacktown City Funerals from George or wanted an assignment of that company's lease. Mr Taylor told the Court that on 28 July 2005, he, Mr Ken Kirkham, Mr Kirkham's girlfriend, Delina, and George met at Patrick Tavern in Seven Hills, though he denied that Mr Kirkham offered to buy Blacktown City Funerals from George. He also stated that approximately three weeks after 22 July 2005, he had a friendly discussion with George where he suggested that instead of going to court they should do business together. 24 Mr Taylor stated that he did not look at the affidavits of Mr Ken Kirkham or Mr Mark Kirkham when deposing his first affidavit. He conceded he was present when they swore their affidavits though he was sitting outside in a different office. Mr Taylor conceded that in addition to the errors in the statement of claim and in par [16] of his first affidavit requiring the insertion of "originally", there were three further errors in his first affidavit: (i) in par [10], "Ken" should replace "Mark", (ii) consistently with (i), in par [11] "again" should be deleted from the first sentence; (iii) in par [11], the sentence "We then all walked back to the units" is incorrect as the discussion regarding the disposal of George's property took place at the back gate.

[24]

In response to this coincidence, Mr Kirkham stated that, " stranger things have happened. It is there, what can I say? I can't do a back flip ." 29 Mr Kirkham also admitted that par [5] of his affidavit was incorrect as there was only one funeral conducted at the premises, which was Ms Sinha's funeral held on 23 July 2005, although later he stated it was held on 30 July 2005. 30 Mr Kirkham told the Court that he had previously been an employee of Blacktown City Funerals and that George had asked him to look after the funeral business of Blacktown City Funerals while he (George) was away in Fiji, including the funeral and embalming of Ms Sinha. 31 Mr Kirkham initially told the Court that Delina, his current girlfriend, had arranged Ms Sinha's funeral whilst she had been employed by George, and Ms Sinha's family contacted her when they could not get in touch with George and were concerned about some missing clothes. Delina effectively referred the funeral to Competitive Funerals due to George's absence. However, Mr Kirkham then admitted that this series of events actually related to a funeral conducted for a Mr McKay and not Ms Sinha. 32 In relation to Ms Sinha's funeral, Mr Kirkham told the Court that he had the body delivered to the premises by Michelle Sneddon and Phillip Eslick on 22 July 2005 and he came to see the body. Initially, Mr Kirkham told the Court that the funeral only involved the use of the parlour, including a fridge in the back of a parlour. The mortuary was not used, as Competitive Funerals did not have access to the mortuary until 30 July 2005 when he and Mr Taylor first met Mr Blades and went with him to get bolt cutters to cut the chains and change the locks. 33 Later, however, Mr Kirkham admitted that he had arranged for Ms Sneddon and Mr Eslick to put the body in the mortuary. He denied being at the parlour while this was occurring and also denied walking out into an alleyway behind the parlour and calling Mr Eslick and Ms Sneddon to tell them to take the body out of the cool room and put it back in the van. He admitted that the body was then taken to the parlour at Stout St, Mount Druitt and that was where he conducted all the work for the funeral. 34 Mr Kirkham also stated that he did not know Mr Ladha and was unaware of Mr Taylor's evidence of his meeting with Mr Ladha, Con and Mark Kirkham at the parlour on 22 July 2005. He denied that it was him and not Mr Mark Kirkham who attended that meeting. 35 Mr Kirkham admitted that he was mistaken when he deposed in his affidavit to this series of events, and par [5] should have followed par [2]. He denied that he was not given the key until 29 July 2005, though conceded that if that were the case, the invoice of Ms Sinha's funeral could not possibly relate to a funeral conducted by Competitive Funerals. 36 Mr Kirkham denied that there was hostility on his part toward George.

[26]

a. On 22 July 2005, after working with Richard Taylor, he gave Mr Taylor a lift to the parlour and met Mr Ladha. Whilst showing them a leak close to the electricity box, Mr Ladha noted that Con would have to fix the leak. At that time Con arrived and introduced everyone. b. Mr Taylor, Con and Mr Ladha walked upstairs and discussed whether the lease for the premises included the units and Mr Ladha indicated that it only came with one unit though he intended to put the unit on a different lease. Mr Kirkham remained at the bottom of the stairs. c. He and Mr Taylor were shown the front of the premises, then the viewing room and then outside including the back area and toilets. Mr Taylor, Con and Mr Ladha were talking but he was not paying particular attention to their conversation as he was looking at the premises. d. Whilst they all looked at the broken latch on the gate, Con asked Mr Ladha what they should do with George's stuff, and Mr Ladha responded that he didn't care, George was out and he should be called to collect it or it would be auctioned. Con asked whether everyone was fine with the discussions of the meeting and Mr Ladha replied "yes", then Con confirmed the lease would start on Monday and upon authorisation of Mr Ladha handed Mr Taylor the key. e. Mr Ladha left and he went to the second hand shop next door to borrow some bolt cutters to cut the lock on the gate, however the cutters were too small so he returned them. 39 In cross-examination, Mr Mark Kirkham said that although he could not remember the events of the 15 or 29 July 2005, he was definitely at the meeting at the parlour on 22 July 2005 and remembered that particular date because it interrupted his personal routine. He stated that, as he was required to drive Mr Taylor to the meeting in the mid-afternoon (because Mr Taylor did not have a licence), he was not able to go to sleep at his normal time of 11.30am. 40 Mr Mark Kirkham denied looking at the first affidavit of Mr Taylor or discussing his evidence with Mr Taylor before deposing his affidavit. He claimed that it was "pure luck" that par [4] of his affidavit and par [11] of Mr Taylor's affidavit were so similar and contained the following: Mr Taylor said: Do the units come with [the premises/it]? The owner said: No, it came with 1 unit but I am [going to put that on a different lease/only going to lease the parlour]. 41 He confirmed that he was definitely at the bottom of the stairs when the conversation took place despite Mr Taylor's evidence to the contrary and was able to hear the conversation due to the echo down the stairway.

[28]

a. He has known Con for over five years. b. On 15 July 2005, he telephoned Con on behalf of Competitive Funerals and discussed its interest in leasing the premises leased to Blacktown City Funerals. Con informed him that Blacktown City Funerals was behind on rent and he was going to contact them and would get back to him. c. On about 17 July 2005, Con told him that George had been given a notice to vacate as the landlord wants him out and that Competitive Funerals could have the premises. d. On 25 July 2005, Con confirmed that Blacktown City Switchboards had given the premises to Competitive Funerals and had agreed on the terms of the lease. Con indicated that Len Robinson was the solicitor for Blacktown City Switchboards and that he should contact him to get a copy of the standard commercial lease straight away as the lease commenced on that day. e. On 26 or 27 July 2005, he telephoned Mr Robinson who told him that he did not have any instructions and would call him back. Mr Robinson did not call back and Mr Kekatos believed that the lease would be issued in due course as Competitive Funerals had been given possession and from his conversations with Con. f. On 5 August 2005, Con told him that George had begged Blacktown City Switchboards to give him possession again and they had changed their mind. He informed Con that Competitive Funerals would go to court to enforce its lease. 45 In cross-examination, Mr Kekatos initially denied any personal financial interest in Competitive Funerals, though later he conceded that he was a party to a joint venture agreement dated 19 November 2004 with Mr Taylor in relation to the affairs of Competitive Funerals. He agreed that under the agreement he and Mr Taylor together had advanced a sum of $30,000 and were 49 per cent shareholders of Competitive Funerals. 46 Mr Kekatos denied that due to his financial contribution it was in his interest that the proceedings before the Court should succeed. He claimed that the proceedings before the Court are irrelevant as the Competitive Funerals was conducting business from the Mr Druitt premises and was able hire the requisite mortuary facilities for the storage of bodies. Following this evidence, he conceded that par [3] of his affidavit in support of the notice of motion to expedite these proceedings, noted in par [43] above, stating that the "plaintiff has currently no place to trade", was technically incorrect and he realised the seriousness of telling a falsehood.

[48]

a. In about May or June 2005, Con called him and told him that Mr Singh had not paid about $6000 rent. He told Con that he knew what he could do to collect the rent and, if not, to find another tenant. b. In about the end of June or early July, Con telephoned him again and told him that he was having difficult finding Singh and had not found another tenant though had advertised. c. About a week later, Con called and told him that he had contacted Mr Singh's wife, who was unaware that rent had not been paid, and arranged a meeting to find out what's happening and to collect the rent. d. A couple of days later in about the middle of July, Con telephoned and told him that Mr Singh wanted to continue leasing the parlour and would pay the outstanding rent of approximately $9,000. e. A couple of days later, Mr Singh called and told him that he would pay the outstanding rent and asked for another chance. Mr Ladha told Mr Singh that he would talk to LJ Hooker and get back to him. On the same day, Mr Singh called about three further times with the same message. f. A couple of days later, Con telephoned again and told him that Mr Singh had the money and wanted to pay but wanted to confirm that he would continue the lease. He told Con that he had not decided and would get back to him. g. On about 20 July 2005, Con called and confirmed that Singh had promised to pay the outstanding rent but had not yet paid. Con told him that he had found a prospective tenant and he agreed to meet the prospective tenant and come to the property to assess what furniture could be salvaged to offset the unpaid rent if Singh did not pay it. h. On about 29 July 2005, he went to the parlour, arrived before Con and introduced himself to a man called Richard who told him he was interested in renting the parlour and already conducted funeral parlours at properties he owned in Girraween and Parramatta. Con arrived and introduced Richard as the prospective tenant and Mr Ladha said "that's fine, as long as the references are satisfactory and a proper lease is drawn up" and the existing lease to Mr Singh is sorted out. Richard told him that he knew about Mr Singh's lease. Inside the parlour, he said that if Mr Singh does not come back then they could either sell or dump his furniture. They walked around the back and he asked Con to arrange to fix the internal gate. Then walked out of the parlour to go upstairs and Con and Richard walked some distance away from him. Con told him that Richard wanted the key to show the premises to his partner and take some measurements and Mr Ladha agreed as long as the key was brought back. As they walked toward the gate leading to the upstairs units he told Con to repair a water drip that was close to the electrical switchboard. He remembered walking upstairs with Con, though could not recall if Richard went. They met the tenant of Unit 2 and observe empty bottles which he told Con to clean up. i. A couple of days after about 29 July 2005, Ara Akopian called and told him to give Mr Singh a chance as he is employed and would take charge of the finances and if they did not he would probably not pay the outstanding rent and they would have to go through the legal processes to get it. He agreed and asked Mr Akopian to inform the other people. j. Mr Singh is in occupation of the parlour. k. He denies Blacktown City Switchboards offered to grant a lease of either No. 4 or No.8 Artillery Road, Seven Hills to Competitive Funerals. Blacktown City Switchboards does not and has never owned No.8 Artillery Road, Seven Hills. l. He was not aware that Ken Kirkham had conducted funerals from any part of the parlour until he read Mr Kirkham's affidavit. m. He did not authorise Con to tell Mr Richard Taylor that Competitive Funerals definitely had the lease or that Blacktown City Switchboards was not giving it back to Mr Singh (as set out in par [6] of Mr Ken Kirkham's affidavit and par [22 (page 6)] of Mr Richard Taylor's affidavit). n. Neither he, nor to the best of his knowledge any other person on behalf of Blacktown City Switchboards, authorised Con to tell Mr Taylor that he would make arrangements in relation to Mr Singh's goods, that a fit out would be fine, or that Mr Singh had been in contact with Ara Akopian and was offering to pay back the rent but would not be getting the premises back as the lease was definitely Competitive Funerals' (set out in pars [11], [14], [22 (page 6)] or [20] of Richard Taylor's first affidavit respectively). o. He denies the assertions made by Mr Richard Taylor in par [11] of his first affidavit and states at the meeting between them: i. There was no discussion as to whether the parlour, the upstairs unit, or both would be leased. ii. Mr Taylor was not "shown" the toilet and the discussion about the light switch did not relate to the switch in the toilet. iii. There was no discussion of rent, GST, the term of the lease or any option or leasing the unit by separate lease by him or within his hearing. He told Mr Taylor that he should discuss the commercial side of any deal with Con. iv. Mr Taylor did not ask about re-tiling the carpet and only said they may want to do something about the floor, to which he said that was fine. v. The disposal of Mr Singh's furniture was discussed at the beginning went they entered the parlour (as set out above in par [80(h)]) and not at the end of the meeting. vi. Con did not tell Mr Taylor that the lease would commence on Monday. 79 In examination in chief, Mr Ladha confirmed that the meeting at the parlour with Con and Mr Taylor took place on 29 July 2005 as he recorded it in his diary (Exhibit 5) and also in an office exercise book maintained by the secretary and senior staff members of Blacktown City Switchboards to identify absences from the office (Exhibit 6). There were no such records for 22 July 2005. Mr Ladha told the Court that Mr Mark Kirkham was not at the meeting though Mr Ken Kirkham did attend. He further stated that prior to the meeting he had never previously met or had any business dealings with Mr Taylor or Ken Kirkham, and until 14 September 2005 when the Court documents were served on him, he had not heard of the name "Competitive Funerals". In addition, Mr Ladha said that as a normal practice in issuing leases to prospective tenants with whom he has not previously had business dealings, he requires three credit references to ascertain their financial position or payment system and assess their previous tenancy performance as well as personal guarantees from directors or shareholders and that he would not agree to enter into any lease without such material. 80 Mr Ladha stated that he did not know about the funeral arrangements for Ms Sinha. Further he also stated that he gave the key to Mr Taylor temporarily so that he could show his partner and take some measurements. 81 Mr Ladha also told the Court that although he received a letter dated 5 August 2005 signed by Mr Singh and Ms Prasad indicating an intention to terminate the current lease and assign the lease to Ms Prasad, he did not act on the letter, the lease was never assigned, rent has continued to be paid and he is happy to have Mr Singh (or Blacktown City Funerals) as lessee. 82 In cross-examination, Mr Ladha did admit, however, that on 5 August 2005 the existing lease was amended to so that it only related to the parlour and not Unit 2 and accordingly the rent was changed from $1668.260 to $1100 per month. 83 Also in cross-examination, Mr Ladha said that he was familiar with the written lease between Blacktown City Switchboards and Blacktown City Funerals although leasing property was not the usual course of business for Blacktown City Switchboards. He acknowledged that it he had not signed the lease and therefore Blacktown City Switchboards had not executed it. He told the Court that he knew that cl 4 of the lease contained an option to renew for a further three years, or a "three by three" year lease. He conceded that despite cl 9 of the lease requiring Blacktown City Switchboards to give Mr Singh two days written notice before an inspection, he did not give Mr Singh such notice of the inspection held on 29 July 2005 as he assumed that Con would have, although was not sure whether he actually did and they had tried every means to contact him. Mr Ladha denied that he did not give notice to Ms Singh because he considered the lease to be terminated and did not know that failing to give such notice would be a breach of the lease by Blacktown City Switchboards. 84 Mr Ladha admitted that he authorised Con to give the key to Mr Taylor, although did not see it being handed over, despite the fact that under the existing lease he knew Mr Singh had exclusive right to possession. He confirmed that he only authorised Con to give the key to Mr Taylor for the purpose of showing the parlour to his partner and doing some measurements. He stated that he never asked for the keys back or put a time limit on when they must be returned because Con controlled the keys and he thought they would be returned immediately after Mr Taylor had shown his partner and done the measurements as he requested. He stated that he did not allow Mr Taylor to be given the keys because he considered the lease to Mr Singh to be terminated. He told the Court that he did not know whether Con went with Mr Taylor when he accessed the premises and further stated that he did not know that allowing Mr Taylor such access would be contrary to Mr Singh's right to exclusive possession. 85 Mr Ladha stated that the purpose of the meeting at the premises on 29 July 2005 was not to discuss the terms of leasing the property - only to show Mr Taylor the property. He further stated that he was not involved in negotiating the amount of rent as he did not know the market and left that to Con. Mr Ladha reiterated that at the meeting the only name he knew in relation to the prospective tenant was "Richard", he did not know who Mr Taylor's partner or the other man at the meeting were, or the name "Competitive Funerals". 86 Mr Ladha again confirmed that the meeting at the premises was on 29 July 2005 based on his diary record, which he stated was where he puts all his important meetings, and also based on his memory. He told the Court that the meeting at the premise was organised on about 20 July 2005 when Con called him on his mobile. He denied not recording leaving the office on 22 July 2005 to go to the meeting at the premises in the office exercise book as he was already out on personal business, going the gym and physiotherapist. Costa Koulendianos

[50]

a. LJ Hooker Seven hills is the managing agent for the property 4-6 Artillery Crescent, Seven Hills consisting a funeral parlour and two residential units owned by Blacktown City Switchboards. b. In March 2005, Blacktown City Funerals was leasing the parlour and Unit 2, though was in rental arrears. c. He conducted all his negotiations about the lease with Mr Mohamad Ladha, the Director of Blacktown City Switchboards. d. In about May 2005, he told Mr Ladha that the rental arrears had reached almost $9,000.00 and Mr Ladha told him to do what he could to get Blacktown City Funerals to pay the arrears even if that meant evicting him. e. In about June 2005, he told Mr Ladha that he was having difficulties contacting Blacktown City Funerals and Mr Ladha told him to do what had to be done to get the money back. f. In about early July 2005, Mr Richard Taylor telephoned him told him that he had heard that the parlour was coming up for lease. Con told Mr Taylor that the parlour was not up for lease, took his number and would let him know if anything changes he would contact him. Con was surprised as he thought that Blacktown City Funerals was still the tenant. He called Mr Singh, the owner of Blacktown City Funerals and left a message requesting Mr Singh to call him. g. About a day later, Mr Singh's wife called and offered to pay all the money owing to continue the lease and he indicated he would talk to Mr Ladha and get instructions. Mr Ladha told him that if he could get all the outstanding rent then Blacktown City Funerals could continue with the lease. h. Until mid-July he received multiple calls from prospective tenants and told them all that if the lease came up, he would contact them. i. In mid-July Mr Ladha called and asked to inspect the premises. j. A few days later, Mr Taylor called and asked if he could come and have a look at the parlour. He told Mr Taylor that the parlour was not on the market for lease but he could come and see it on Friday 22 July 2005. He then called Mr Ladha and told him that a prospective tenant would be coming with them on the inspection on Friday. k. On 22 July 2005, he arrived at the premises at 12.05pm and Mr Taylor, Mr Ladha and Ken Kirkham were waiting outside as he had the key. They went inside the parlour briefly and discussed its condition and then walked around the back where Mr Ladha told him the lock on the gate need to be fixed. Mr Taylor asked whether the mortuary at No. 8 was included in the lease and, he responded "no". They closed the parlour and walked to the stairwell up to the units where Mr Ladha ask him to fix a water leak near the metre box. Then he, Mr Ladha and Mr Taylor walked upstairs and Mr Kirkham remained downstairs. Mr Taylor asked whether the lease included the two units and he said it only included one. After walking downstairs, Mr Taylor asked if the rent was $1,600.00 per month and he indicated it was including one unit. They walked out on to the street and Mr Taylor asked how long the lease was and he told him that the current tenant had three-year lease. Mr Taylor then asked to borrow the key so that he could do some measurements and he then asked Mr Ladha who replied, "as long as we get it back quickly". He gave the key to Mr Taylor and left the premises. l. In early August, he changed the locks to the parlour on the instructions of Mr Ladha. m. As to the following assertions of Mr Taylor in his first affidavit: i. In the conversation in which Mr Taylor introduced himself, he did not indicate that the lease for the parlour may be available and he would contact the owner and get back to him (as set out in par [7] of Mr Taylor's affidavit): the conversation was as set out above in par [87(f)]. ii. In relation to the meeting on 22 July 2005: he did not show Mr Taylor the toilets; Mr Ladha did not discuss whether the lease included the parlour and the units, the rental price, the term of the lease, or whether Mr Taylor could re-tile with carpet; he and Mr Ladha did not confirm that the lease would commence on Monday or the provision of the key (as set out in par [11] of Mr Taylor's affidavit). iii. On Monday 25 July 2005, he did not talk to Mr Taylor and approve a new fit out of the parlour (as set out in par [14] of Mr Taylor's first affidavit). iv. On Thursday 28 July 2005, he did not tell Mr Taylor that Mr Singh should not have been in the parlour: he wanted to get instructions from Ladha, accordingly, he did not tell Mr Taylor that Mr Singh had been evicted, except to collect to his goods, and that Competitive Funerals had the lease (as set out in both pars 15 of Mr Taylor's first affidavit). v. On Friday 5 August 2005, he told Mr Taylor that Mr Singh had been speaking to his partner and Mr Ladha and had paid the outstanding debt, and had not said that Mr Singh would not get the premises back as Competitive Funerals had the lease. vi. He denied Mr Taylor's assertions to the extent of any inconsistency between his version of events and that of Mr Taylor. n. He denies telling Mr Taylor on Thursday 4 August 2005, that Competitive Funerals definitely had the lease and Blacktown City Switchboards was not giving it back to Mr Singh (as set out in par [6] of Mr Ken Kirkham's affidavit and par [22 (page 6)] of Mr Richard Taylor's affidavit). He states that Mr Taylor asked what was happening with the parlour and he told him that he did not know and was waiting for Mr Ladha to give him instructions, although if it were up to him he probably would not let Mr Singh back in, but it is up to Mr Ladha. Mr Taylor offered to pay a cheque for the first month's rent and he said he did not want to receive any money until he received instructions from Mr Ladha.

[51]

88 In examination in chief, Con stated that Mr Ladha, Mr Taylor and Ken Kirkham, not Mark Kirkham, attended the meeting at the premises. He also confirmed that the conversation alleged by Mr Jim Kekatos in par [5] of his second affidavit occurred after the meeting at the premises. He denied, however, that he told Mr Kekatos that Mr Ladha had given the premises to Competitive, or that he could ring Mr Len Robinson to get a copy of the lease, being a standard commercial lease, as the lease commenced on that day. Con admitted that the conversation alleged by Mr Kekatos in par [8] of his second affidavit was very similar to what was said, but longer, and he denied Mr Kekatos told him that he (Con) had given Competitive Funerals a lease. 89 In cross-examination, Con conceded that he did not issue any notices upon Mr Singh prior to the meeting, although did send him numerous letters, stating that if he did not pay his rental arrears proceedings would be taken. He denied sending Mr Singh an eviction notice in or before July 2005 or at all. 90 Con stated that prior to the meeting at the premises, pursuant to a letter sent on 7 July 2005 based on instructions from Mr Ladha, proceedings were taken against Mr Singh for his outstanding rent. These 'proceedings' were the changing of the locks on the premises. He told the Court that the lease of the parlour was the first commercial lease in which he had been involved so he was only vaguely familiar with the basic contents of such leases. He conceded that prior to 7 July 2005 he knew that: s under cl 12.1.2 of the lease that the lease ends when the lessor lawfully enters or takes possession of any part of the property; and s under cl 12.2 the tenant has repudiated the lease where rent or any other money due under the lease is 14 days overdue for payment. Con admitted that on the instruction of Mr Ladha he changed the locks to keep Mr Singh out, but denied that this was done to terminate the lease. He confirmed that the locks were changed only to get Mr Singh to pay the outstanding rent. 91 Con stated that prior to the meeting at the premises he had not advertised the parlour or discussed with Mr Ladha either the terms of the lease, terminating Mr Singh's lease or getting a new tenant. He said that, although several people had called in relation to leasing the parlour, he did not know what was behind it and when Mr Taylor called he started getting "a little bit edgy as to what was going on". He stated that he and Mr Ladha had discussed separating the unit and the funeral parlour and making two separate leases but could not remember when this occurred. 92 Con told the Court that he had an uncertain recollection of the meeting at the premises. He states that he was unsure of date of the meeting, telling the Court it occurred sometime late in July. He admitted that it was possible that he wrote 22 July 2005 in his affidavit because that is what he read in Mr Taylor's affidavit. He denied that the arrangements for the meeting were made the day before the meeting. Con told the Court that although Mr Ladha and Mr Taylor spoke directly during the meeting and he did not impose his position as agent, they did not discuss rent, GST, the term of the lease or any option or leasing the parlour separately from the unit. He also stated that he did not discuss any of these issues with Mr Taylor before or after the meeting. Con admitted that although he remembered having a conversation about the disposal of Mr Singh's belongings, he was only made aware of the right to auction those belongings after the meeting. 93 Con told the Court that the purpose of the meeting at the premises was to have a prospective tenant available if Mr Singh did not pay his outstanding rent. He stated that although he knew that Mr Kekatos was acting for Mr Taylor and was familiar with Mr Kekatos in a professional capacity, references were still required from prospective tenants and he was aware that there were three partners involved.

[55]

99 Mr Allen submits that the objective intention of the parties was to be immediately bound by an agreement to lease or an agreement to enter an agreement to lease. He claims that this is indicated by the following objective factors: a. Although Mr Ladha and Mr Koulendianos deny there was an discussion about the terms of the lease at the meeting at the premises, it is inconceivable that the terms were not discussed. Further, Mr Taylor's evidence in relation to the content of the meeting should be accepted as he has accurate knowledge of the current terms of the lease. For example, he gave evidence that the rental price was $1,000 per month and the lease was a three by three year lease. Also, Mr Taylor's recollection of the meeting is better than Mr Ladha and Con as he also recalls the conversation about auctioning Mr Singh's belongings. b. The parties to the lease are certain. It is irrelevant that Mr Ladha only knew the prospective tenant as "Richard", as Con, his agent knew and was authorised to act and negotiate on his behalf. Con was acting as agent for Mr Ladha and he knew of Competitive Funerals, as a business entity, through his conversation with Mr Kekatos and he knew that there were three partners and either Mr Taylor or Mr Kekatos could be contacted as representatives of Competitive Funerals. Also, Mr Taylor could validly contract on behalf of Competitive Funerals without revealing who his principal is to the other party. c. The subject matter of the lease was clear as Con's evidence clearly states that Mr Taylor was told by Con at the meeting that the lease did not include the mortuary. d. The lease to Blacktown City Funerals had been terminated and Blacktown City Switchboards were looking for a new tenant. e. The key was provided to Mr Taylor in order to provide possession of the parlour. The key was not given for a limited purpose as Con stated that it would not be normal practice to allow a prospective tenant to access a property without supervision from a real estate agent. There was also no discussion between Mr Taylor and Con as to the how long Mr Taylor was able to keep the key and Con never asked for the key to be returned. f. It was clear that Mr Mark Kirkham was present at the meeting and not Mr Ken Kirkham as Ken Kirkham was already familiar with the premises as he had worked there many times and Mark Kirkham works with Mr Taylor and regularly drives him to and from work as Mr Taylor does not have a driver's licence. 100 Mr Allen submits further that the lack of writing does not make the agreement to lease void as: a. Section 23B of the Conveyancing Act 1919 (NSW) does not apply; and b. Sections 23C and 54A of the Conveyancing Act are defeated as equity will decree specific performance when there has been part performance of an oral agreement to give an interest in land. Mr Allen relies upon the decision of Barrett J in Khouri v Khoury [2004] NSWSC 770 at [52], where consideration is given to what constitutes part performance, and including reference to Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 432: "In order that acts may be relied on as part performance of an unwritten contract, they must be done under the terms and by the force of that contract and they must be unequivocally and in their nature referable to some contract of the general nature of that alleged." Mr Allen also relies on par [56] of the judgment and the reference of Brennan J to the judgment of Smith J in Francis v Francis [1952] VLR 321 (at 340): "… it is necessary to exclude from consideration the evidence of the alleged parol agreement between the parties and to look at the act relied upon in the light of the surrounding circumstances as revealed by the rest of the evidence: see McBride v Sandland (1918), 25 CLR 69, at pp 77-8; Cooney v Burns (1922), 30 CLR 216, at pp 222, 224; Maddison v Alderson (above), at pp 479, 483-4; Dale v Hamilton (1846), 5 Hare 369, at p 381; Broughton v Snook [1938] Ch 505, at pp 514-5. The act cannot amount to sufficient part performance unless, when so considered, it points plainly, and not merely in an equivocal fashion, to the existence of an agreement between the parties falling within the general class to which the agreement alleged belongs."

[59]

Findings 104 Competitive Funerals seeks specific performance of the alleged equitable agreement for lease of the parlour made with Blacktown City Switchboards. To determine whether Competitive Funerals is entitled to specific performance, the Court must first determine whether there is a binding agreement to lease (or an agreement to enter into a later formal agreement for a lease) between Competitive Funerals and Blacktown City Switchboards. 105 An agreement to lease may be specifically enforced where the agreement is sufficiently certain, that is, it is complete and enforceable on the usual contractual principles, and there is no bar to the award of specific performance: Walsh v Lonsdale (1882) 21 Ch D 9; Warmington & Anor v Miller [1973] 2 All E.R 372 at 377. In addition, the agreement to lease must be in writing or supported by sufficient acts of part performance: s 23B(1), 23C(1)(a), 23E(d) and 54A(1) and (2) of the Conveyancing Act. See also Watson v Delaney (1991) 22 NSWLR 358 at 366. 106 In order for the agreement to lease to be complete and enforceable, it must be established that it was the objective intention of the parties to be immediately bound by the agreement: Masters v Cameron (1954) 91 CLR 353; Allen v Carbone (1974) 132 CLR 528 at 523. In the well known case of Masters v Cameron, the High Court established the following (at 360): "Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract."

[62]

108 The objective intention of the parties to be bound may be confirmed where the parties have completely agreed all the essential terms of their agreement and have expressed the terms with reasonable certainty. 109 Moreover, in general, for the agreement to lease to be complete and enforceable, there must be certainty as to the essential terms of the agreement: Upper Hunter County District Council v Australian Chilling & Freezing Co (1968) 118 CLR 429 at 436-437 per Barwick CJ; G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 at 255 (Viscount Maugham); Axelsen v O'Brien (1949) 80 CLR 219 at 226 per Dixon J; Thorby v Goldberg (1964) 112 CLR 597 at 603 per Kitto J; and Godecke v Kirwan (1973) 129 CLR 629 at 646-647 per Gibbs J. 110 In Thorby v Goldberg Menzies J (at 607) held that, in particular, the parties to the agreement, the leased premises, the commencement and duration (and the duration of any options for renewal), and the rent to be paid (and variations in rent) and all other terms considered by the parties to be material or essential terms must be certain. His Honour also fundamentally recognised that there is no concluded agreement where an essential term is expressly left to be settled by future agreement of the parties or where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention. See also Lang's Commercial Leasing in Australia, (CCH Australia, 2005). 111 Finally, as the alleged agreement for lease is a commercial lease, it must be noted that in general the normal commercial practice is that a binding commercial lease relationship is made after the exchange of formal documents (Arjay Investments Pty Ltd v Morrison's Outdoor Catering Pty Ltd, NSWSC, unreported, 1 May 1995, p 4) at the point of execution and delivery of the lease (Dellwest Pty Ltd v Cafabe Pty Ltd, NSWSC, unreported, 26 November 1997, p 7). Moreover, it is accepted that "there must be more than arrival by the parties at a consensus. The parties must intend that the consensus at which they have arrived should there and then constitute a binding contract": Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 326 per Mahoney JA; Kassabian v Lagonicos & Anor (1993) NSW ConvR par [55-690], p 59-941 at [59-943] per McLelland CJ in Eq; Dellwest, at pp 14 and 15. Thus, "the mere agreement [of the parties] on the basics does not mean that there is an operative agreement": Arjay Investments at p 5.

[69]

a. The evidence furnished by Con cannot be accepted, as it is inconsistent and uncertain. In cross-examination, Con stated that on 28 July 2005 he and his partner went to the parlour and met George and told him to leave the premises and then waited for the locksmith to arrive and change the locks, which means that on 29 July 2005 he would have had a key to the parlour despite the evidence that Mr Singh changed the locks on 28 July. Also, Con conceded that he was unsure of the date of the meeting, telling the Court that it occurred sometime late in July. In general he had an uncertain recollection of the meeting at the premises and events in relation to the parlour. Mr Allen actually also conceded that Con's evidence provided little assistance and his evidence should not be accepted. b. In cross-examination, Mr Taylor conceded that he may have been mistaken about the date of the meeting at the premises and it could have been 29 July rather than 22 July 2005. c. Mr Taylor's evidence cannot be accepted, as it is unreliable. In particular, Mr Taylor, gave the following inconsistent evidence: s He admitted that there were several errors in his first affidavit, which he had verified as true and correct. For example, he admitted that par [16] of his first affidavit was incorrect: he had only thought that Competitive Funerals had leased both the mortuary and the parlour originally, and not when he met Mr Blades at the meeting on 28 July 2005. Similarly, he also conceded that in par [10], that the reference should be to Mark Kirkham rather than Ken Kirkham, and in par [11] the sentence "We then all walked back to the units" is incorrect as the discussion regarding the disposal of George's property took place at the back gate. s In contradiction of par [15] of his first affidavit, he claimed that he could not recall whether at the time he met Mr Blades he had been told that George had been in the premises earlier that day. s In contradiction of par [11] of his first affidavit, he told the Court that at the meeting Con gave him the key prior to the discussion regarding re-carpeting the parlour. s He initially conceded that he did not know or understand what a statement of claim was though later claimed that he had read the statement of claim before swearing his verification on 7 September 2005. He admitted that there were several errors in the statement of claim: in relation to par [7] of the statement of claim, the date the lease was offered was 22 July rather than 25 July, and accordingly, the lease was entered on 25 July rather than 27 July; Mr Ladha only mentioned a "3 by 3 year lease" and not a "three-year lease with 2 options to extend for another 3 years", and also said his solicitor would prepare a lease not specifically a "Standard Law Society Lease". He also admitted that he did not understand the meaning of the terms "3 by 3 year lease", "option for renewal", "three-year lease with 2 options to extend for another 3 years" or "Standard Law Society Lease", when he verified the statement of claim. He stated that he did not understand these terms despite having entered into and guaranteed a commercial lease for the funeral parlour at Stout Road, Mount Druitt with Mr Ken Kirkham 12 months previously.

[70]

s He originally stated that he thought Mr Singh had been evicted though later admitted that he was unsure whether George had been evicted or was being evicted. s He initially stated that he did not believe that there was any licensing requirement to carry on a funeral business, though later conceded that Competitive Funerals were awaiting certification from the Health Department to allow the use of the Mount Druitt premises as a mortuary and funeral parlour. s He gave evidence that Mr Mark Kirkham was present at the meeting and not Mr Ken Kirkham as Ken Kirkham was already familiar with the premises, as he had worked there many times and Mark Kirkham works with Mr Taylor and regularly drives him to and from work, as he does not have a licence. However both Mr Ladha and Con gave unchallenged evidence that they did not know Mr Mark Kirkham and he did not attend the meeting, that Mr Ken Kirkham did attend, and Mr Prasad also told the Court that Mr Mark Kirkham did not attend the parlour on 22 July 2005. All of these inconsistencies throw doubt as to veracity of the evidence provided by Mr Taylor orally, contained in his affidavits and alleged in the statement of claim. d. Mr Ladha's evidence is probative as it is corroborated by records contained in his diary (Exhibit 5) and also in an office exercise book maintained by the secretary and senior staff members of Blacktown City Switchboards to record their absences from the office (Exhibit 6). Also, Mr Ladha has no reason to prefer the position of Blacktown City Funerals over Competitive Funerals. In addition, Ms Prasad and Mr Nand both gave evidence that they were at the parlour on 22 July from around 10-10.30am until 4-4.30pm and did not see Mr Taylor, Con, Mr Ladha or Mr Mark Kirkham on that day. 119 I accept Mr Ladha's evidence. Accordingly, I find that the meeting occurred on 29 July 2005, and due to Mr Taylor's uncertainty as to the date of the meeting, the parties did not agree on the date of commencement of the lease (if any) with certainty. I note that as a consequence of finding that the meeting occurred on 29 July 2005 the entirety of the evidence furnished on behalf of Competitive Funerals is tainted. I also note the following evidence: a. The almost impossible similarity in the evidence of Mr Taylor, Mr Mark Kirkham and Mr Ken Kirkham indicates that their affidavit evidence was highly likely to have been concocted by Mr Kekatos. b. Mr Kekatos provided inaccurate and inconsistent evidence in relation to his financial involvement with Competitive Funerals and the business operation of Competitive Funerals, which specifically indicated that he gave dishonest evidence in support of the notice of motion for expedition. c. Mr Ken Kirkham clearly stated that he "wasn't paying much attention" when he deposed his affidavit. In addition, he also gave inconsistent evidence in relation to the funeral arrangements for Ms Sinha, which revealed that whilst "looking after the business of Blacktown City Funerals", he had in fact wrongfully diverted the funeral from Blacktown City Funerals to Competitive Funerals.

[72]

120 It is essential that the parties to the alleged agreement to lease are properly and certainly identified: Stockell v Niven (1889) 61 L.T. 18(CA); Sale v Lambert (1874) L.R. 18 Eq 1; Di Biase & Ors v Rezek [1971] 1 NSWLR 735 (CA). 121 Mr Allen submits that the agreement to lease the parlour was made between Mr Taylor, on behalf of Competitive Funerals, and Mr Ladha, on behalf of Blacktown City Switchboards. Mr Ladha, however, gave evidence that he was uncertain about the identity of the prospective lessee. He said that prior to the meeting he had never previously met or had any business dealings with Mr Taylor or Ken Kirkham and at the meeting he only knew of the prospective lessee as "Richard" and did not know who Mr Taylor's partner or the other man at the meeting were. He further said that until 14 September 2005 when the Court documents were served on him, he had not heard of the name "Competitive Funerals". 122 It is apparent that Mr Kekatos, acting in his capacity as solicitor for Competitive Funerals, was also uncertain as to the identity of the alleged lessee. In par [3] of his first affidavit, Mr Kekatos states that, "the plaintiff owns and operates a funeral business trading as "Competitive Funeral Services"". Further, he prepared the second affidavit of Mr Taylor in which the financial details of Mr Taylor, not those of Competitive Funerals, were provided to indicate Competitive Funerals' capacity to comply with the lease and run the funeral business at a profit. However, in all the Court documents it is recognised that the plaintiff and alleged lessee is Competitive Funerals and not Mr Taylor. 123 I reject Mr Allen's submission that it is irrelevant that Mr Ladha only knew the prospective tenant as "Richard", as Con, his authorised agent, was acting on his behalf and Con knew of Competitive Funerals, as a business entity and knew that Mr Kekatos was acting for Competitive Funerals and was familiar with Mr Kekatos in a professional capacity. 124 It is clear from the evidence that although Con was Mr Ladha's agent and was authorised to act and negotiate on his behalf, at the meeting he was not acting in his capacity as agent and Mr Ladha, who was himself at the meeting, was acting independently as principal. Con gave evidence that Mr Ladha and Mr Taylor spoke directly during the meeting and he did not interpose himself as agent. Also, there is no direct evidence as to what Con's authority was in relation to the leasing of the premises. It is clear, however, that even as Mr Ladha's agent, Con did not have authority to enter the alleged agreement to lease at the meeting, as he requested authority from Mr Ladha to provide Mr Taylor the key and therefore must also have been required to obtain authority to enter any agreement to lease. Finally, although as noted in par [118(c)] Mr Taylor's evidence cannot be accepted, even he alleges that it was Mr Ladha with whom he discussed the rent, GST, the term of the lease or any option and leasing the unit by separate lease at the meeting and he also stated that he offered to pay the bond and one months rent from funds in his personal cheque account.

[76]

131 The duration of the lease is an essential term for any agreement to lease that must be agreed between the parties with certainty: Whitlock v Brew (1968) 80 WN (NSW) 1520. 132 Mr Allen submits that it is certain that the duration of the lease was for 3 years with 2 options to renew for a further 3 years. He submits that the evidence of Mr Taylor should be relied on in relation to this contention, as well as generally in relation to the content of the meeting, as he has accurate knowledge of the current terms of the lease and he also recalls the conversation about auctioning Mr Singh's belongings. 133 I do not accept this submission, as it is not accurate. Although Mr Taylor verified that the lease was for such a term in the statement of claim, in cross-examination he gave evidence the duration of the lease was "three by three year" and conceded that the statement of claim was incorrect. Moreover, he admitted that he did not understand the meaning of a "3 by 3 year lease" though presumed it would be a three year lease, and similarly, he did not understand the meaning of the terms "option for renewal" or "three-year lease with 2 options to extend for another 3 years" when he verified the statement of claim. It is clear that Mr Taylor's evidence is highly unreliable. Mr Ladha denies any discussion of rent, GST, the term of the lease or any option, leasing the parlour and mortuary or leasing the unit by separate lease. In addition, although Con gave evidence that he answered Mr Taylor's questions in relation to these matters during the meeting, he confirmed that Mr Ladha did not discuss rent, GST, the term of the lease or any option or leasing the parlour separately from the unit. He also stated that he did not discuss any of these issues with Mr Taylor before or after the meeting. 134 Mr Taylor's recollection of the conversation about auctioning Mr Singh's belongings is also unreliable. The only evidence in support of that contention was that of Mr Mark Kirkham whose evidence of the conversation was inexplicably in almost identical terms. Moreover, Con admitted that although he remembered having a conversation about the disposal of Mr Singh's belongings, he was only made aware of the right to auction those belongings after the meeting. 135 I, therefore, reject this submission. I find that the duration of the alleged agreement to lease is not certain.

[83]

(See also Multiplex Constructions Pty Ltd v Suscindy Management Pty Ltd [2000] NSWSC 484). 143 There is no evidence that Blacktown City Funerals ostensibly abandoned its lease of the parlour. In addition, the evidence of Mr Ladha, Con and Mr Singh clearly indicates that the lease to Blacktown City Funerals has not been abandoned. 144 Mr Ladha's evidence clearly indicates that Blacktown City Switchboards sought enforcement of the lease and called on Blacktown City Funerals to perform the lease through the payment of rent. Moreover, it indicates that although Blacktown City Switchboards had considered forfeiting the lease, it did not and never intended or attempted to exclude Blacktown City Funerals from the parlour: Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607 at 619. Mr Ladha stated that the changing of the locks were merely an attempt to get Blacktown City Funerals to pay the rent and once rent was paid all rights to forfeit the lease for failure to pay rent were waived. 145 In addition, Mr Ladha denied that he, in giving Mr Taylor the key and in not giving notice of the inspection (meeting at the parlour) pursuant to cl 9 of the lease to Blacktown City Funerals, he considered that lease to be terminated. He further stated that he assumed that Con would have provided such notice though was not sure whether he actually did but they had tried every means to contact Mr Singh and he did not know that failing to give such notice would be a breach of the lease by Blacktown City Switchboards. 146 I also accept the submission of Mr A Fernon, appearing for Blacktown City Funerals, that neither Blacktown City Funeral's failure to pay rent nor Mr Singh's closure of the business whilst overseas for one week, amount to abandonment. Also, the evidence of Mr Ladha, Mr Singh, Con and Mr Akopian clearly indicates that Blacktown City Funerals wanted to continue and made promises to pay the rent. 147 Additionally, I accept that amendments to the lease on 5 August 2005 (so that it only related to the parlour and not Unit 2 and accordingly the rent was changed from $1668.260 payable in arrears to $1100 per month payable in advance) did not constitute termination of the lease, but rather only varied the lease (as demonstrated by the evidence of Mr Ladha, Mr Singh and Con): Penny v Craber (1967) NWR 683; Jenkin R Lewis & Son Ltd v Kerman (1971) Ch 477. See also New South Wales Conveyancing Law and Practice, (CCH Australia Ltd, 2002), [27-770]. 148 I find therefore that the lease to Blacktown City Funerals was not abandoned and thus not terminated. Accordingly, if the alleged agreement to lease had been concluded between Blacktown City Switchboards and Competitive Funerals, it would have been second in time to the existing lease to Blacktown City Funerals. 149 Thus, to determine whether the alleged agreement to lease was enforceable the Court would have needed to determine the better equity between the former equitable interest of Blacktown City Funerals and the later equitable interest of Competitive Funerals. If the equities were equal, priority of time gives the better equity (maxim qui prior est tempore potior est jure), and therefore, the lease of Blacktown City Funerals would take priority: Rice v Rice (1854) 2 Drew 73 (Court of Chancery). However, if they were not equal, then the better equity would need to be determined by reference to the conduct of the parties and all the circumstances of the particular case: Rice v Rice; Lapin v Abigail (1930) 44 CLR 166 at 204 per Dixon J; Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) per Kitto J at 276; Heid v Reliance Finance Corp Pty Ltd (1983) 154 CLR 326 at 339 and 341 per Mason and Deane JJ. 150 Mr Allen submits that the conduct of Blacktown City Funerals, being the failure to pay rent and the abandonment of the parlour, led to the creation of the alleged agreement of lease to Competitive Funerals, such that in determining the better equity the interest of Competitive Funerals should be prioritised. As established above in pars [143]-[148], however, it is clear that Blacktown City Funerals did not abandon its lease of the parlour and the lease was not terminated. Accordingly, I also find that the conduct of Blacktown City Funerals was not such as to lead to the creation of the alleged agreement to lease to Competitive Funerals if in fact it had been concluded. Moreover, it is clear upon the evidence of Mr Taylor that at the meeting he was aware of the lease to Blacktown City Funerals and was unsure of whether Blacktown City Funerals had been evicted or was going to be evicted. Thus, it is clear that he was not mislead by the conduct of Blacktown City Funerals to acquire the alleged agreement to lease in the belief that the lease to Blacktown City Funerals did not exist: Heid v Reliance Finance Corp Pty Ltd at 339 per Mason and Deane JJ. 151 Thus, even if the alleged agreement for lease to Competitive Funerals had been concluded it would not be specifically enforceable, as the prior equitable lease to Blacktown City Funerals would take priority.

[85]

152 Finally, if the alleged agreement to lease had been concluded between Competitive Funerals and Blacktown City Switchboards and there was no such bar to specific performance, in order to be specifically enforceable the agreement to lease must be in writing or supported by sufficient acts of part performance: s 23B(1), 23C(1)(a), 23E(d) and 54A(1) and (2) of the Conveyancing Act. See also Watson v Delaney (1991) 22 NSWLR 358 at 365-366. In this case, as there is no written agreement for lease, Competitive Funeral's claim for specific performance would need to be sufficiently supported by part performance. 153 It is well established that the doctrine of part performance can only be relied upon where the acts of part performance are "unequivocally and of their own nature referable to some such agreement that is alleged": Maddison v Alderson (1883) 8 App Cas 467 at 479 per Lord Selbourne LC. See Millett v Regent (1975) 1 NSWLR 63 at 71 per Glass JA; Regent v Millett (1974) 133 CLR 679 at 683 per Gibbs J; Waltons Stores (Interstate) Ltd v Maher at 432 per Brennan J. Moreover, the doctrine only applies if it is to relieve against some inequity or harm which a claimant may suffer by acting to its detriment or prejudice upon an oral agreement: Millett v Regent at 65-66 per Hutley J referring to Scholl J in Francis v Francis at 344 and 68; Riley v Osborne & Anor [1986] VR 193 at 199 per Kaye J. 154 Mr Allen submits that the agreement to lease was partly performed by the giving and taking of exclusive possession of the premises through the provision of a key for an unlimited purpose from Blacktown City Switchboards (Con) to Competitive Funerals (Mr Taylor). He argues that the key was not given for a limited purpose based on the evidence of Mr Taylor and Con. In particular he relies on the evidence of Con, that it would not be normal practice to allow a prospective tenant to access a property without supervision from a real estate agent, that he had no discussion with Mr Taylor as to the how long Mr Taylor would keep the key and that he never asked for the key to be returned. 155 I reject this submission. Firstly, as noted above in pars [118 (a)] and [118 (c)] the evidence given by both Mr Taylor and Con is inconsistent and unreliable, and thus cannot assist the Court. In particular, Mr Taylor gave inconsistent evidence as to when Con provided the key to him. Also, during submissions, Mr Allen conceded that Con's evidence provided little assistance as to what exactly was said at the meeting and therefore argued that Con's evidence regarding the limited purpose for which the key was given should not be accepted. 156 Fundamentally, however, it is clear on the evidence of Mr Ladha that the key to the parlour was only temporarily provided to allow Mr Taylor to show his partner the premises and take some measurements. Mr Ladha stated that he did not ask for the keys back or put a time limit on when they must be returned because Con controlled the keys and he thought they would be returned immediately after Mr Taylor had shown his partner and done the measurements as he requested. Mr Ladha also confirmed that he did not know that allowing Mr Taylor such access would be contrary to Mr Singh's right to exclusive possession and denied providing the key was in performance of the alleged agreement. 157 Thus, the provision of the key by Con to Mr Taylor was not on an unlimited basis and did not constitute the giving and taking of exclusive possession of the parlour. It only provided Competitive Funerals a limited non-exclusive right to enter the parlour and at its most may seen as merely a preparatory act to the possible conclusion of a future agreement for lease: Hollander v Atkinson (1885) 6 L.R (NSW) Eq 69 (FC); O'Rouke v Hoeven [1974] 1 NSWLR 622 (CA). 158 Thus, the temporary provision of the key does not amount to the giving and taking of possession sufficient to constitute part performance, as it does not point unequivocally to an agreement of the nature alleged by Competitive Funerals: Regent v Millett at 683 per Gibbs J; Watson v Delaney at 362-363. Moreover, the provision of the key cannot satisfy the Court of the existence of the agreement to lease (per Mahoney JA at 74) and was capable of an explanation other than the agreement alleged by Competitive Funerals (Glass JA at 72): Millett v Regent. 159 I note also that the evidence clearly shows that Competitive Funerals did not make any payments of rent or rental bond (Tornatora v Palatinus [1966] W.A.R 14) or make any alterations to the parlour pursuant to the alleged agreement to lease (Kaufman v Michael (1892) 18 V.L.R 373; Millett v Regent) sufficient to constitute part performance. 160 Finally, there is no evidence of detriment or prejudice suffered by Competitive Funerals due to reliance on the alleged oral agreement for lease which ought to be relieved by part performance: Millett v Regent at 65-66 per Hutley J referring to Scholl J in Francis v Francis at 344 and 68; Riley v Osborne & Anor at 199 per Kaye J. For example, Competitive Funerals did not pay for the removal of Blacktown City Funeral's belongings, or fit out the parlour: Riley v Osborne & Anor at 199 per Kaye J; Caton v Caton (1866) LR 1 Ch App 137 at 148 per Lord Cranworth LC. 161 Accordingly, I find that even if the alleged agreement had been concluded and specific performance was not otherwise barred, there would be not be sufficient part performance to support Competitive Funeral's claim for specific performance. 162 Finally, I note that as the alleged agreement to lease has not been concluded between Blacktown Switchboards and Competitive Funerals, and in any event even if it had been concluded, Competitive Funerals would not have been entitled to an order for specific performance, it is clear that Competitive Funerals would also not be entitled to equitable compensation or damages against Blacktown City Switchboards.

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Judgment (88 paragraphs)

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Legislation Cited (3)

Cases Cited (27)

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