Helicopters Pty Ltd v Bankstown Airport Limited [2009] NSWSC 889 | Case summary

3278/07 Helicopters Pty Ltd v Bankstown Airport Limited JUDGMENT 1 HIS HONOUR: The plaintiff is a sublessee of a property known as site 564 at Bankstown airport. The defendant is the sublessor. On 2 July 2008 the defendant took a long-term lease over the Bankstown airport from the Commonwealth of Australia. The plaintiff's sublease was signed on 9 February 2000 and is for a term of 25 years commencing on 1 December 1999. 2 The main dispute concerns the review of rent from 1 April 2006. As appears in more detail below, the sublease provides that the sublessor may review the rent on 1 April in every second year of the lease. The rental review is triggered by the sublessor's serving a Rent Review Notice notifying the sublessee of its assessment of the rent to apply from the Market Review Date (being 1 April). If the sublessee has paid all rent and other moneys payable under the lease it can give notice that it disputes the rent assessed by the sublessor and appoint a valuer to determine the rent. If the sublessee does not give its Dispute Notice and appoint a valuer to determine the rent within 28 days of service of the Rent Review Notice, the amount stated in the sublessor's Rent Review Notice becomes the rent payable from the Market Review Date. 3 Clause 4.2 of the sublease deals with conditions for the appointment of a valuer and sets out matters which the valuer can and cannot take into account in the valuation. The clause requires that the valuer provide a "speaking valuation" giving detailed reasons for the determination. 4 Clause 4.3 provides that if the sublessee does not appoint a valuer, or if the sublessee or its valuer does not give to the sublessor a copy of the valuer's decision within 28 days after giving the Dispute Notice, then the rent is the amount stated in the sublessor's Rent Review Notice. Clause 4.4 provides that if the sublessee's valuer's decision is given to the sublessor within 28 days after the sublessee gave its Dispute Notice, then the rent is to be that determined by the sublessee's valuer, unless the sublessor within 14 days appoints a valuer to determine the rent and notifies the sublessee that it has done so. The sublessor's valuer's decision must be given in 28 days or the rent is as determined by the sublessee's valuer. If both valuers' decision is the same, then that is to be the reviewed rent. If there is a difference of only five percent the average of the two amounts is taken as the reviewed rent. If the difference is more than five percent then either party may cause a third valuer to be appointed to determine the rent. The third valuer's decision is final. 5 In 2004, the plaintiff had appointed a Mr Michael Mannix, a registered valuer, as its valuer to assess the current market rent as at 1 April 2004. He assessed the rent at $34,000 per annum including GST. 6 On 10 March 2006, the defendant served a Rent Review Notice stating that it had assessed the rent payable from 1 April 2006 to be $68,370 per annum exclusive of GST. It advised that if the plaintiff wished to dispute that rent, the defendant needed to receive notice within the timeframe set out in the lease, together with confirmation that it had appointed a valuer. 7 On 17 March 2006 the plaintiff gave a Dispute Notice and appointed Mr Mannix to act as its valuer in the matter. On 22 March 2006 the defendant advised that it accepted the plaintiff's letter of 17 March 2006 as its formal dispute notice and acknowledged that the plaintiff had appointed Mr Mannix as its valuer. The defendant said it was looking forward to receiving Mr Mannix's decision within the specified timeframe. On 12 April 2006 Mr Mannix sent a letter to the defendant stating his opinion that the current market rental of the property was $40,000 per annum inclusive of GST. 8 On 20 April 2006 the defendant's managing agent, CB Richard Ellis, wrote to Mr Mannix and to the plaintiff stating that the plaintiff had not complied with cl 4.1(e) of the sublease when giving its Dispute Notice. This clause provides that the sublessee does not have the right to give a Dispute Notice if it has not paid all rent and other moneys payable under the lease. CB Richard Ellis also disputed that Mr Mannix's letter of 12 April 2006 complied with clause 4.2 of the lease. The defendant did not appoint its own valuer under clause 4.4. The Issues 9 The defendant contends that the plaintiff was not entitled to give its Dispute Notice because it had not paid outgoings, being its contribution to payments known as ex gratia land tax payable by the defendant to the Commonwealth of Australia pursuant to cl 26(2) of its head lease. The plaintiff's liability for these outgoings had been in dispute since 2003. The amount claimed by the defendant has not been paid by the plaintiff. The plaintiff contends that the defendant has not properly calculated the basis on which these outgoings are payable and contends that it does not owe the amount claimed. 10 The plaintiff also contends that if it did owe such moneys prior to giving its Dispute Notice the defendant waived its right to rely upon clause 4.1(e) of the lease to deny its entitlement to serve the Dispute Notice. This is because in its correspondence of 10 March 2006 the plaintiff invited the defendant to appoint a valuer pursuant to clause 4 of the sublease and in its letter of 22 March 2006 it acknowledged that the valuer had been appointed and stated that it was looking forward to receiving his decision within the specified timeframe. The plaintiff also asserted that the defendant was not entitled to rely on clause 4.1(e) by reason of principles of conventional estoppel or promissory estoppel. The plaintiff's submissions on waiver or estoppel were not developed. The defendant contends that the plaintiff is not entitled to rely on waiver or estoppel because of the way the issues for trial were formulated. The defendant also says that there is no waiver or estoppel which precludes it from disputing the plaintiff's entitlement to serve a dispute notice. 11 The defendant also contends that the conditions for the appointment of the sub-lessee's valuer under clause 4.2(a) of the sublease were not satisfied because Mr Mannix did not agree to accept and comply with the provisions of clause 4 of the sublease. It also contends that the letter from Mr Mannix of 12 April 2006 did not comply with clause 4.3 of the sublease for the same reason. That is, it says that Mr Mannix, although otherwise qualified to be appointed, had not agreed to accept and comply with the provisions of clause 4 of the sublease which was a precondition to his being validly appointed. Secondly, the defendant contends that a speaking valuation giving the valuer's detailed reasons for his rental determination was required to be provided within 28 days. The defendant contends that the letter of 12 April 2006 was not such a speaking valuation. The defendant also contends that a later report prepared by Mr Mannix was also not a speaking valuation within the meaning of clause 4.2(b). Accordingly, the defendant contends that if the plaintiff were entitled to give a Dispute Notice, nonetheless, the document supplied to it did not conform with the requirements of clauses 4.2 and 4.3 of the sublease as a result of which the rent from 1 April 2006 until the next review is the amount specified in its notice of 12 March 2006. 12 By its cross-summons the defendant claims outstanding rent, being the difference between the amount specified in its Rent Review Notice and the amount stated in Mr Mannix's letter of 12 April 2006. It also seeks a declaration that the defendant is required to increase its bank guarantee. Under the sublease the plaintiff is required to provide a bank guarantee equal to three months' rent. 13 The defendant also seeks a declaration as to the basis on which the plaintiff is required to contribute to payments of ex gratia land tax payable by it to the Commonwealth under its head lease. Rent Review Clause in Sub-Lease 14 Clause 4 of the sub-lease provides: " 4. RENT REVIEW 4.1(a) The Landlord may review the Rent on the date in Item 4 of the Schedule ('Market Review Date'). (b) At any time not earlier than four months before each Market Review Date the Landlord may notify the Tenant of the Landlord's assessment of the Rent to apply from the market Review Date ('Rent Review Notice'). (c) If the Tenant does not within 28 days of service of the Rent Review Notice: give notice to the Landlord that the tenant disputes the Rent assessed by the Landlord ('Dispute Notice') and appoint a Valuer to determine the Rent, the amount stated in the Landlord's rent Review Notice is to become the Rent payable from the Market Review Date; (d) the Landlord does not lose the right to have the Rent reviewed on a Market Review Date if the Landlord does not give a Rent Review Notice before a market Review Date. (e) The Tenant does not have the right to give a Dispute Notice if the Tenant has not paid all Rent and other moneys payable under this lease. 4.2(a) Valuer can only be appointed under this Clause 4 if the Valuer: (i) is a member of not less than five years' standing of the Australian Property Institute Inc (NSW Division); (ii) is licensed to practise as a valuer; (iii) has over the previous three years been valuing the rent of the kind of premises leased by this lease; (iv) agrees to give written notice to the Landlord and Tenant of the Valuer's determination of the Rent within 28 days of being instructed to proceed with the determination; and (v) agrees to accept and comply with the provisions of this Clause 4. (b) The Valuer must: (i) act as an expert and not as an arbitrator; (ii) provide a 'speaking valuation' (that is, the valuer must give detailed reasons for the determination and specify the matters to which the valuer had regard for the purposes of making the determination); (iii) have regard to the terms of this lease excluding the Rent then applicable (but including this clause 4); (iv) assume that the Tenant and the Landlord have complied with all the terms in this lease; (v) assume that the Landlord is a willing but not anxious landlord and the Tenant is a willing but not anxious tenant and that the Tenant is being offered vacant possession; (vi) have regard to the rental value of similar premises leased at their highest and best use not necessarily within the Airport; and (vii) have regard to the value of the local goodwill attaching to the premises (as distinct from the personal goodwill attached to the tenant's business conducted at or from the premises) attributable to the location, facilities, management and promotion of the Airport; and (viii) take no account of: (A) the value of any personal goodwill attributable to the tenant's business and the value of the tenant's fixtures in or on the Premises; (B) any deterioration of the premises if that condition results from a breach of this lease by the Tenant; (C) concessions required to secure a tenant; (D) periods of rent abatement or rent holiday; (E) any restriction on the use of the premises under this lease. (ix) have regard to all relevant valuation principles to the extent that they are not inconsistent with this clause 4. 4.3 If the Tenant does not appoint a Valuer or if the Tenant appoints a Valuer and the Tenant or the Tenant's Valuer does not give to the Landlord a copy of the Tenant's Valuer's decision within 28 days after giving the Dispute Notice then the Rent is the amount stated in the relevant Rent Review Notice. 4.4 If the Tenant appoints a Valuer and the Tenant or the Tenant's Valuer gives to the Landlord a copy of the Tenant's Valuer's decision within 28 days after giving the Dispute Notice then the Rent is to be the rent determined by the Tenant's Valuer unless the Landlord within 14 days; (a) appoints a Valuer to determine the Rent; and (b) notifies the Tenant that it has appointed a Valuer. 4.5 If the Landlord appoints a Valuer and the Landlord or the Landlord's Valuer does not give to the Tenant a copy of the Landlord's Valuer's decision within 28 days after giving notice to the Tenant that it has appointed a Valuer then the Rent is to be the rent determined by the Tenant's Valuer. 4.6 If the Landlord appoints a Valuer and the Landlord or the Landlord's Valuer gives to the Tenant a copy of the Landlord's Valuer's decision within 28 days after giving notice to the Tenant that it has appointed a Valuer then: (a) if the amounts decided on are the same, that amount is the Rent; (b) if the amounts determined by the two Valuers vary but the difference between those amounts is less than 5% of the total of those amounts then the average of those amounts is the Rent; (c) if the amounts determined by the two Valuers vary and the difference between those amounts is greater than 5% of the total of those amounts then the Landlord or the Tenant may ask the president of the Australian Property Institute (NSW Division) to appoint a Third Valuer to determine the Rent. The Third Valuer must have regard to any submissions by the Landlord and Tenant (but only if the submissions are made in time for the Third Valuer to comply with clause 4.2(a)(iv). 4.7 The Rent as determined under this clause 4 (including a determination as to payment of the valuation costs) is final and binding on the Landlord and the Tenant. 4.8 Any variation in the Rent takes effect from the Market Review Date. 4.9 Until the Rent has been determined the Tenant must continue to pay the Rent and any other amounts which were payable immediately before the Market Review Date. 4.10 An appropriate adjustment and payment or repayment must be made between the Landlord and the Tenant within 28 days of the date when the Rent is determined. 4.11 If: the Rent determined under this clause is less than the Rent payable immediately before that market Review Date; and this lease is not a Retail Lease regulated by the Retail Leases Act 1994; then the Rent from the Market Review Date is to remain unchanged. " 15 Item 4 of the Schedule provides that a Market Review Date is 1 April 2000 and thereafter on 1 April in every second year. Contributions to the Defendant's Payments of Ex Gratia Land Tax 16 Bankstown airport is situated on Commonwealth land and no land tax is payable in respect of it pursuant to the Land Tax Act 1956 (NSW) or the Land Tax Management Act 1956 (NSW). However the defendant is required to make payments to the Commonwealth in lieu of land tax. The stated reason for this is that after "privatisation" of airports, competitive neutrality was to be maintained between commercial activities carried out on an airport and similar activities carried out off an airport so that on-airport businesses would be subject to the same rates and taxes as businesses "off-airport". Clause 26 of the head lease between the defendant and the Commonwealth provides: " 26. RATES AND LAND TAX AND TAXES 26.1 Payment of Rates and Land Tax and Taxes The Lessee must pay, on or before the due date, all Rates, Land Tax and Taxes without contribution from the Lessor. 26.2 Ex Gratia payment in lieu of Rates and Land Tax (a) Where Rates are not payable under sub-clause 26.1 because the Airport Site is owned by the Commonwealth, the Lessee must promptly pay to the relevant Governmental Authority such amount as may be notified to the Lessee by such Governmental Authority as being equivalent to the amount which would be payable for rates as if such rates were leviable or payable in respect of those parts of the Airport Site: (i) which are sub-leased to tenants; or (ii) on which trading or financial operations are undertaken including but not limited to retail outlets and concessions, car parks and valet car parks, golf courses and turf farms, but excluding runways, taxiways, aprons, roads, vacant land, buffer zones and grass verges, and land identified in the airport Master Plan for these purposes, unless these areas are occupied by the Commonwealth or an authority constituted under Commonwealth policy or law. The Lessee must use all reasonable endeavours to enter into an agreement with the relevant Governmental Authority, body or person to make such payments. (b) Where Land Tax is not payable under sub-clause 26.1 because the Airport Site is owned by the Commonwealth, payments in lieu of Land Tax must be made by the Lessee in respect of those parts of the Airport Site: (i) which are sub-leased to tenants; or (ii) on which trading or financial operations are undertaken including but not limited to retail outlets and concessions, car parks and valet car parks, golf courses and turf farms, but excluding runways, taxiways, aprons, roads, vacant land, buffer zones and grass verges, and land identified in the airport Master Plan for these purposes, unless these areas are occupied by the Commonwealth or an authority constituted under Commonwealth law which is excluded from making payments by Commonwealth policy or law. Unless otherwise directed by the Lessor, the Lessee will make payments promptly in lieu of land tax at the relevant State rate to the Commonwealth addressed as provided for in sub-clause 24.1. These payments in lieu of Land Tax will be levied on a financial year basis. The Lessee must submit an assessment of the payment in lieu of land tax to the Commonwealth on 31 August of the current financial year with this payment due 30 days later. Land value assessment for the purposes of making payments in lieu of land tax are required at least every three years. (c) Where Taxes such as stamp duty, payroll tax, financial institutions duty and debits tax imposed by a Governmental Authority are not payable by the Lessee because they are Taxes on transactions, instruments or activities on or related to the Airport Site owned by the Commonwealth, the Lessee must pay to the relevant Governmental Authority such amount as is equivalent to the amount which would be payable for such Taxes if such Taxes were leviable or payable. " 17 Clause 5 of the sublease relevantly provides " 5. OTHER PAYMENTS 5.1 The Tenant must pay outgoings which are: reasonably related to the Premises or reasonably apportioned to the Tenant over the assessable or rateable land on the Airport, paid or payable by the Landlord or directly assessed or rated on the Tenant whether under the Head Lease or otherwise: 5.2 "Outgoings" means (a) rates (including water rates, sewerage rates and water usage charges), Land Tax and levies imposed by a Public Authority on land or on owners or occupiers of land in relation to their ownership or occupation of that land; (b) the ex gratia payments in lieu of rates and land tax payable under Clause 26 of the Head Lease; (c) insurance premiums and other charges in connection with insurance cover against the insurable risks which the Landlord reasonably thinks are appropriate in connection with the Airport, its contents, its tenants, persons in it for any reason and this lease; and (d) the cost of managing the Airport whether the management is performed at the Airport or elsewhere and whether performed by the landlord or others. 5.3 The amounts payable under this clause must be paid to the Landlord if they are not assessed directly on the premises. " 18 The charges in question are those purportedly made by the defendant to the plaintiff for contribution to ex gratia land tax payments for the financial years 2000-2001 and 2001-2002. The principal point in dispute, although not the only point in dispute, concerns the threshold which would be applicable under the State legislation if land tax were separately charged with respect to the sublet premises. For those financial years the Commonwealth required the defendant to make payments for ex gratia land tax under clause 26.2(b) of the head lease in respect of all of the land described in clause 26.2(b) by calculating the notional amount of land tax that would be payable under the Land Tax Act on the taxable value of that land using the single tax threshold provided for by ss 62TA and 62TB of the Land Tax Management Act. The land value of the Bankstown airport on which the ex gratia land tax payments were calculated was $51,086,532 for the 2000-2001 financial year and $51,085,032 for the 2001-2002 financial year. These figures were calculated by aggregating the land values of numerous sites apparently all the subject of subleases. The value of site 564 was taken to be $305,000. The defendant made ex gratia payments of land tax of $868,571.04 and $868,545.54 for the 2000-2001 and 2001-2002 financial years. It sought to recoup 0.597 percent of those payments from the plaintiff pursuant to clause 5 of the sublease. That percentage was the proportion which the assessed land value of site 564 bore to the assessed land values on which ex gratia land tax payments were calculated. The effect of such a calculation is to deny the plaintiff the benefit of a separate threshold if land tax were assessed on the value of site 564 alone. 19 From the 2002-2003 financial year the Commonwealth changed its policy. From that financial year each site was separately assessed for the amount of the ex gratia land tax payments so that separate threshold exemptions were applicable for each site. The plaintiff contends this is how its required contributions to the ex gratia land tax payments should have been calculated for the 2000-2001 and 2001-2002 financial years. 20 In the head lease the expression "Land Tax" is defined as "any tax levied or imposed by Governmental Authority on land". A "Governmental Authority" is defined to mean "the Commonwealth government or any government of any State or Territory of Australia, administrative body, governmental body, department or agency of any such government or local government body." The first question is whether for the 2000-2001 and 2001-2002 financial years the defendant was liable to pay amounts of ex gratia land tax under cl 26.2 of the head lease calculated on the value of all of the airport land described in subclause 26.2(b) and applying only a single threshold. In my view, the defendant was so liable. 21 Under clause 26.2(b) the defendant was liable to make "payments in lieu of Land Tax ... in respect of [certain] parts of the Airport Site." Unless otherwise directed by the Commonwealth, the defendant was required to "make payments promptly in lieu of Land Tax at the relevant State rate ...". The reason the defendant was not liable to pay land tax under the Land Tax Act and the Land Tax Management Act was that the Airport Site is Commonwealth land. This triggered a liability to pay an amount "in lieu of" the land tax that would have been payable by the defendant had the land not been Commonwealth Land. Land tax is imposed in respect of the taxable value of land owned by a person at the end of a calendar year (Land Tax Act, s 3). The defendant is not the owner of the Airport Site but a lessee of it. Section 21C(2) of the Land Tax Management Act provides that a lessee (other than a sub-lessee) of land owned by the Crown is for land tax purposes deemed to be the owner of a parcel of land consisting of the land or part leased. Hence, if the Bankstown airport were not Commonwealth land the defendant would be liable as the notional owner of the land. It would be liable to pay land tax in an amount of $100 plus 1.7 cents for each $1 of the taxable value of the land in excess of the tax threshold (Land Tax Act, s 3AH and Schedule 9). There would not be separate assessments in respect of each lot that was leased to the defendant and sub-let by it. Only one threshold would be applicable. As the payment under clause 26.2 is expressed to be a payment in lieu of land tax, prima facie the payment under that clause would be assessed in the same way. 22 Subclause 26.2(b) refers to the defendant's making payments (in the plural) in respect of those parts of the Airport Site which are subleased to tenants or on which trading or financial operations are undertaken. The clause refers to the defendant making payments at the relevant State rate and says that the payments in lieu of land tax are to be levied on a financial year basis. The use of the plural when describing the payments in lieu of land tax which the defendant is required to make arguably indicates that separate payments are to be made in respect of each part of the Airport Site which is sublet or on which trading or financial operations are undertaken. However, that is not the better construction of the clause. The use of the plural is explicable by the fact that payments in lieu of land tax are required to be made annually. Given that in the absence of a contrary direction by the Commonwealth the payments in lieu of land tax are required to be made at the relevant State rate, and given that the relevant rate at which the defendant would be liable to pay land tax if the land in question were Crown land and not Commonwealth land, would be assessed on the taxable value of the whole of the land in question with a single threshold, the better view is that the defendant's liability to the Commonwealth under clause 26.2(b) is to be calculated in accordance with that rate (in the absence of a contrary direction). 23 Even if this be incorrect, so that in the absence of a contrary direction by the Commonwealth, ex gratia payments of land tax were to be calculated by reference to each part of the Airport Site which was sub-let to tenants or on which trading or financial operations were undertaken, with a separate threshold to apply to each part, nonetheless, contrary directions were given by the Commonwealth as to the rate at which ex gratia payments in lieu of land tax were to be calculated. Mr Raphael of counsel who appeared for the plaintiff did not submit that the direction which might be given by the Commonwealth under clause 26.2(b) was limited to a direction as to the address at which payments of land tax were to be made. That is to say, he did not dispute that under clause 26.2(b) the Commonwealth could give directions in respect of the rates at which payments in lieu of land tax were to be calculated. No doubt any such directions would have to be given in good faith and reasonably (Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234). 24 Mr Raphael properly accepted that the Commonwealth gave such directions up to and including the 2002 financial year which required the defendant to make ex gratia payments in lieu of land tax calculated on the basis of the value of the airport land with only one threshold. 25 In 1998 and 1999 the defendant made submissions to the Commonwealth to the effect that in calculating payments in lieu of land tax the threshold should be applied on a site-by-site basis rather than being applied only once in respect of the entire relevant area of the airport. That submission was not accepted at the time. On 2 June 1999 the Commonwealth Department of Transport and Regional Services advised the defendant that: " We consider the better interpretation in meeting the requirements of clause 26.2(b) of the Airport Lease for Bankstown Airport is to draw an analogy in the following way in the application of section 21C of the NSW Land Tax Management Act 1956. Assume BAL was leasing the Airport from the NSW Government. In that circumstance BAL, as the lessee of the land owned by the Crown, would be deemed to be the owner of the sites for land tax purposes (and not the sublessees). Accordingly, the tax-free threshold can only be applied once to the quantum of the amalgamated values of the separate sites, as defined under clause 26.2(b). " 26 The payments made by the defendant under clause 26.2(b) reflected this direction. In submissions Mr Raphael accepted that not only was such a direction given but that the defendant was bound by it until there was a change (T88-89). 27 There is no dispute that the defendant made payments under clause 26.2(b) of the head lease for the 2000-2001 and 2001-2002 financial years on this basis. It paid land tax of $868,571.04 for the 2000-2001 financial year based upon land value of $51,086,532. It made payments in lieu of land tax of $868,545.54 in the 2001-2002 financial year based on land value of $51,085,032. 28 The figures for land value were arrived at by aggregating valuations by the Valuer-General of the land value of numerous sites on the airport which were sub-let. The valuations were made as at 19 October 1998. The value of site 564 sub-let by the plaintiff was assessed by the Valuer-General to be $305,000. This was 0.597 percent of the total land value. The defendant invoiced the plaintiff for 0.597 percent of the payments in lieu of land tax it made under clause 26.2 of the head lease. 29 The ex gratia payments in lieu of land tax are expressly included within the definition of "Outgoings" which the plaintiff was required to pay under clause 5.1 of the sublease. The plaintiff was required to pay outgoings which were "reasonably related to the Premises" or "reasonably apportioned to the Tenant over the assessable or rateable land on the Airport". 30 The amount invoiced by the defendant, being $5,185.60 for each of the 2000-2001 and 2001-2002 financial years (TB 495, 496) was disputed by the plaintiff because the plaintiff did not obtain the benefit of the land tax threshold for the individual site. However, there is no provision in the sublease for it to do so. Rather, under the sublease, the plaintiff must pay outgoings which are "reasonably related" to the subleased property. There is a clear reasonable relationship between the demised premises and the payment claimed by the defendant. The payment claimed by the defendant is based on the land value of the demised premises as a proportion of the aggregated land values on the basis of which the defendant made payments in lieu of land tax under clause 26 of the head lease. Likewise, the amounts charged to the plaintiff were a reasonable apportionment to it of the notionally assessable land on the airport. Because the land on the airport is Commonwealth land, the reference in clause 5.1 of the sublease to the "assessable or rateable land on the Airport" must be a reference to notionally assessable or rateable land. That that is so is clear from the reference in clause 5.2(b) to ex gratia payments in lieu of rates and land tax. 31 For these reasons the plaintiff's principal challenge to the defendant's claim for unpaid outgoings fails. 32 The plaintiff advanced other belated challenges in its submissions in reply. Mr Raphael submitted that the land value of site 564 had been mis-stated because the land was subject to an easement which rendered part of it unusable and that this ought to have been reflected in the valuation used. The short answer to that submission is that there is no evidence that the effect of that easement was not taken into account in assessing the 1998 land value of $305,000 on the basis of which the 2000-2001 and 2001-2002 payments were based. A fresh valuation was made by the Valuer-General as at 1 July 2001 of $427,000. The plaintiff objected to that valuation on the basis of the easement. That objection was considered by the Valuer-General who amended the valuation to $360,000. It was this value which was used in the subsequent calculations of the plaintiff's contribution to ex gratia payments in lieu of land tax. 33 The plaintiff also complained that the defendant had not used annual valuations of its land and the land of all of the other sites at the airport. There is nothing in the lease or the sublease which required the defendant to do so. Clause 26.2 of the head lease provided for land value assessments to be made at least every three years. In any event, the plaintiff has not shown that any different result would have been obtained if more frequent valuations had been used. 34 Mr Raphael submitted that: " ... the percentage of the overall land attributed to [the plaintiff] is 0.597 percent of the whole of the airport land and takes no account of the fact that some parts of the airport are not used for business purposes and discloses no attempt to isolate the plaintiff from that part of the land used for business purposes. There is simply the bland statement that the area taken up by the tenant's property constitutes 0.597 percent of the overall land. " 35 He submitted that in calculating the value of the airport the defendant had not excluded the areas in respect of which there was to be no obligation to pay land tax, namely the excluded areas such as runways and the like (T129-130). 36 I do not accept this submission. First, it is not correct to say, as was submitted, that the percentage of 0.597 percent is the percentage of the area of the land sub-let to the plaintiff as a proportion of the total airport land. The percentage used was a proportion of values, not a proportion of areas. Next, it is clear from the correspondence between the defendant and the Commonwealth attaching a list of tenancies for the Bankstown airport showing the valuations for the tenanted sites that the land value of $51,086,532 for 2000-2001 and $51,085,032 for 2001-2002 was based on the aggregated values of sub-let premises. 37 The plaintiff might have a cause of complaint if there were other land falling within clause 26.2(b)(ii) which was not sub-let in respect of which the defendant was liable to make ex gratia payments in lieu of land tax. However, there is no evidence that there is any such land. If there were, presumably the defendant would be liable to make a higher payment under clause 26.2(b) and the lower percentage which the plaintiff would have to bear would be applied to the higher land tax figure. 38 As I understand the submission, it was that the airport land valued at approximately $51 million included areas which ought to have been excluded in calculating the defendant's liability to contribute to the ex gratia payments. That would increase the percentage of the ex gratia payments for which the defendant was liable. But there was no evidence to support the submission in any event. There is no evidence that the percentage contribution to ex gratia payments in lieu of land tax which the plaintiff is required to bear has not been properly calculated. 39 The defendant included a charge for Goods and Services Tax ("GST") on its claim for recovery of outgoings under clauses 5.1 and 5.2. The defendant contends that as at 17 March 2006 it was owed $7,756.48 for the plaintiff's unpaid contribution to ex gratia payments in lieu of land tax. That figure included GST. The plaintiff submitted that the defendant was not entitled to claim GST because the defendant is entitled to claim an input tax credit in respect of the GST oncharged to it by the Commonwealth. Clause 3.2(a) and (b) of the sublease provides: " 3.2 (a) The rent has been negotiated without allowance for a Goods and Services Tax (GST). If a GST applies to this lease because it is a taxable supply or for any other reason the Tenant must pay to the Landlord an additional amount on account of GST calculated by multiplying the consideration payable under this lease by the prevailing GST rate. (b) Any outgoings payable under Clause 5.2(a), (b) and (c) exclude GST forming part of those outgoings to the extent to which the Landlord is entitled to claim an input tax credit for those outgoings. " 40 The plaintiff relies on clause 3.2(b). It contends that the defendant cannot include GST as part of the outgoings recoverable under clause 5.2. So far as it goes, that contention is correct. However, the defendant can recover GST pursuant to the second sentence of clause 3.2(a). Clause 3.2(a) does not deal only with the plaintiff's obligation to pay an additional amount on account of GST for rent. Rather, the consideration for the defendant's supply under the sublease is the plaintiff's promise to pay rent and outgoings. The defendant would be liable to pay GST in respect of that consideration and is entitled to recover the GST from the plaintiff pursuant to clause 3.2(a). Clause 3.2(b) ensures that there is no double-dipping on the GST charged to the defendant by the Commonwealth in respect of payments under clause 26 and amounts recovered from the plaintiff by the defendant. Thus, if the defendant were liable to pay $110 to the Commonwealth inclusive of GST in respect of the plaintiff's premises, it would incur an outgoing of $110 and receive an input tax credit of $10. If it then charged the plaintiff as an outgoing under clause 5.2 the full payment of $110 plus GST under clause 3.2(a), it would receive $121 and be required to pay to the Commissioner of Taxation $11 as GST. It would offset its input tax credit of $10 and remit $1 to the Commissioner and derive a profit of $10 on the transaction. The effect of clause 3.2(b) is to exclude that profit, but that does not exclude the operation of clause 3.2(a). There is no error in the defendant's adding GST to the recovery of outgoings. 41 There is a running account between the plaintiff and the defendant with many disputed items. It is difficult, if not impossible to match all the receipts against invoices. The evidence of Mr Wilson, the senior property manager for the defendant, is that as at 17 March 2006 the sum of $7756.48 inclusive of GST was outstanding in respect of unpaid outgoings for ex gratia land tax. I accept that evidence. It is apparent from Mr Wilson's table that that balance was struck as at 6 October 2004 after various debits and credits from February 2003. The defendant is entitled to judgment in that sum. Whilst the disputed amounts go back to at least 17 February 2003 when the defendant claimed the unpaid ex gratia land tax for the years 2000-2001 and 2002-2003 it is not appropriate that interest run from that date because of the unallocated payments made by the plaintiff. As at 31 October 2003 the amount outstanding was $4,258.01 as set out in the letter from CB Richard Ellis to the plaintiff of 31 October 2003. Further invoices for the 2003-2004 and the 2004-2005 financial years in respect of contributions to ex gratia payments in lieu of land tax were issued in March, May and October 2004. Justice is served by allowing the defendant interest on the debt of $7,756.48 pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 6 October 2004. 42 It follows from these reasons that as at 17 March 2006 the plaintiff was in default in paying moneys due under clauses 5.1 and 5.2 of the sublease. It follows that unless the defendant is precluded from relying on clause 4.1(e) of the sublease, the plaintiff was not entitled to give a Dispute Notice in response to the defendant's Rent Review Notice. Waiver/Estoppel 43 The proceedings were commenced by summons. The defendant filed a cross-summons. There were no pleadings. Orders were made for the exchange of outlines of submissions. The outline of submission of counsel for the plaintiff delivered on 25 March 2009 included the following: " 2. Notwithstanding the defendant's assertion regarding clause 4.1(e), the defendant wrote to the plaintiff on 22 March 2006 accepting the plaintiff's Dispute Notice and acknowledged the appointment of the plaintiff's valuer. As a result, the plaintiff's valuer continued to determine the Rent of Premises on behalf of the plaintiff and it was only after the valuer provided the Valuer's Determination to the defendant on 20 April 2006 that the defendant disputed the plaintiff's entitlement to issue a Dispute Notice. The plaintiff will in those circumstances argue, inter alia, that conventional estoppel operated to rebut the reliance by the defendant upon the alleged breach. 3. At the very least, it is submitted that the defendant has waived its rights to object. Indeed on this basis the defendant should be estopped from maintaining this dispute given their conduct and discussions with officers of CBRE at the time the Dispute Notice was issued. In reliance upon the defendant's conduct, the plaintiff incurred the cost of the valuer determining the Rent of the Premises. " 44 The matter was listed before me for directions on 26 March 2009 as the parties sought an extension of time for complying with an earlier timetable. I said that counsel for both parties should confer with a view to attempting to agree on the issues for hearing. At the commencement of the hearing I was provided with a list of what I was told were the agreed issues. These did not include any issue of estoppel or waiver. At that time I raised with Mr Muddle SC, who appeared with Mr Stanley for the defendant, why the defendant on 10 March 2006 had written to the plaintiff saying that if it wished to dispute the Market Rent Review the defendant needed to receive the notice within the timeframe set out in the lease together with the plaintiff's confirmation that it had appointed a valuer when the position it later took was that the plaintiff was not entitled to give a Dispute Notice because it had not complied with clause 4.1(e). I asked whether there was still a question whether what was done amounted to waiver or estoppel. The response of Mr Muddle SC was that a case of estoppel ought to have been pleaded. He submitted that there was not an issue about this and that in the lengthy pre-trial preparation, no allegation had been made of waiver or estoppel and that if any such allegation had been made the defendant would have required the case to be identified with precision. Mr Raphael for the plaintiff did not demur. 45 However, in closing submissions, Mr Raphael submitted that by its letter of 10 March 2006 referred to at para [6] above, the defendant invited the plaintiff to go to the expense of obtaining a valuation and thereby waived its right to contend that the plaintiff was not entitled to serve a dispute notice. Mr Raphael also submitted that the defendant was precluded from disputing the plaintiff's entitlement to serve a dispute notice on grounds of promissory estoppel. He also referred to the judgment of Gummow, Hayne and Keifel JJ in Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 251 ALR 322 at [56]-[67] on principles concerning election between inconsistent rights, and later referred to paras [46]-[55] and [99]-[100] of that judgment dealing with questions of waiver. He also referred to Pacific Brands Sport & Leisure Pty Ltd & Ors v Underworks Pty Ltd (2006) 230 ALR 56 at [113]-[114] dealing with waiver. 46 Given that no issue of waiver or estoppel was raised when issues for trial were formulated between counsel, and given that no such issue was raised in the course of the plaintiff's opening, even after the question was ventilated with counsel for the defendant, I do not consider that the plaintiff is entitled to rely on the issue. 47 The plaintiff's director, Mr Hodgson, gave no evidence that he made any assumption following receipt of the defendant's letters of 10 March or 22 March 2006. He gave no evidence that he took any step or omitted to take any step because of anything communicated or not communicated by the defendant. He was not cross-examined. 48 At the end of his closing submissions Mr Raphael sought leave to re-open the plaintiff's evidence. He advised that the evidence would be to the effect that Mr Hodgson relied upon the letter of 10 March 2006 which "actively encouraged [him] to proceed". The precise nature of the evidence to be given was not identified. There was no explanation as to why the evidence was not led earlier. I accepted the submission for the defendant that if the application were granted, the defendant would be entitled to an adjournment to consider whether to pursue further interlocutory steps by way of discovery or subpoena to test what evidence might be given in relation to reliance on the representation in the letter. Counsel had submitted that if evidence of reliance on the representation were permitted to be given, the defendant would wish to make inquiries as to how the plaintiff had acted in 2004 and perhaps earlier or later years. I refused the application for leave to re-open. 49 If it were open to the plaintiff to maintain an argument based on estoppel or waiver, notwithstanding that it had not been identified in the issues identified for trial, nor in the opening, I would nonetheless reject such a claim. There was no evidence that the plaintiff either took action or omitted to take action because of the terms of the defendant's letters of 10 March or 22 March 2006. There was no evidence that the letters of 10 or 22 March 2006 caused the plaintiff to assume that the defendant would not dispute the plaintiff's entitlement to serve a Dispute Notice because of the unpaid outgoings. It cannot be assumed that the plaintiff would have paid the disputed outgoings to ensure it could dispute the rent review. The plaintiff vigorously denied the defendant's entitlement. It can be inferred from the correspondence between the parties and their solicitors that Mr Hodgson genuinely believed that the plaintiff was not liable to pay the outgoings. Mr Hodgson pushed the plaintiff's position with vigour and I would not assume that he would concede the defendant's point so as to be secure in his right to serve a Dispute Notice. Nor can it be assumed that the plaintiff would have attempted to make a payment under protest. Mr Hodgson knew of the terms of the sublease. He had received legal advice as to the effect of a clause apparently equivalent to clause 4.1(e) in connection with an earlier rent review of a similar lease. There is no reason to assume that he was not aware that if the plaintiff owed the moneys, the effect of clause 4.1(e) would be that the plaintiff did not have the right to give a dispute notice. There is no evidence that the plaintiff changed its position by reason of the terms of the letters of 10 or 22 March 2006 from the defendant and the omission from those letters of any statement concerning the need to pay all moneys payable under the sub-lease if a dispute notice were to be given. 50 Apart from estoppel, it is not clear in what sense it was contended for the plaintiff that the defendant had waived its right to rely on clause 4.1(e). There was no waiver in the sense of election between inconsistent rights or remedies. It is still unresolved whether there is a doctrine of waiver in the area of contract, which is independent of principles of estoppel and election. In Pacific Brands Sport & Leisure Pty Ltd & Ors v Underworks Pty Ltd [2006] FCAFC 40; (2006) 149 FCR 395, Finn and Sundberg JJ said (at [113]) that: " To the extent that waiver has an independent province - and this is a matter of some contest in Australian law: see the varying views expressed in Commonwealth v Verwayen (1990) 170 CLR 394 at 406-407 424-428 451 471-472 and 491 ff - the best that probably can be said is that it applies to those circumstances in which the law recognises a voluntary or intentional relinquishment or renunciation of a known right, claim or privilege. " 51 If there is such an independent doctrine, waiver requires an intentional act done with knowledge whereby a person abandons a right by acting in a manner inconsistent with the right (Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 at 406). Assuming that there is such an independent doctrine, it may be taken that the intention of the party alleged to have waived the contractual right is to be ascertained objectively. If that were not so, the defendant would be prejudiced by the plaintiff's raising the argument as it did not have the opportunity to put on evidence as to the subjective intentions of its officers in sending the letters of 10 and 22 March 2006. It cannot be said from the terms of those letters that the defendant intended to abandon or relinquish its right to insist that the plaintiff pay all moneys owing under the lease before it could give a dispute notice. The fact that the defendant referred to some of the terms of the lease with which the plaintiff would need to comply if it were to dispute the revised rent, namely the requirements of clause 4.1(c), does not imply that it was intending to relinquish the benefit of clause 4.1(e). 52 In Agricultural & Rural Finance Pty Ltd v Gardiner, Kirby J said (at [144]-[145]): " [144] ... I am inclined to accept that a party may unilaterally release or abandon a right and be held to such a 'waiver' beyond instances of contractual variation, estoppel and election. In my view, 'waiver' certainly extends beyond the very particular circumstance of an indication of non-reliance on a statute of limitations.

It must not contradict any express term of the contract. " 58 No such question was identified in the agreed issues for hearing. In any event, such a term is not necessary to give business efficacy to the contract. Nor is it so obvious that it goes without saying. Indeed, the fact that s 129 of the Conveyancing Act 1919 (NSW) to which counsel referred in this connection requires service of a notice requiring breaches of a lease (other than for non-payment of rent) to be specified and, if capable of remedy, to be remedied, before re-entry or forfeiture of a lease, and the fact that s 133E precludes a lessor from disputing the lessee's entitlement to exercise an option for renewal on the ground that the lessee is in breach of the lease unless a prescribed notice is served, are contrary to there being any such implication. Where it has been thought desirable to protect a lessee from certain consequences of breaches of a lease the legislature has intervened. Prior to the enactment of s 133E, it was well settled that conditions for the exercise of an option for renewal, including a condition that the lessee not be in breach of any term of the lease, had to be complied with strictly. There was no implication that before a landlord could rely on a lessee's being in breach of the lease as a ground for disputing the validity of the exercise of an option for renewal, the landlord was required to give a notice requiring the breach to be remedied. That is why Parliament intervened. Likewise, there is no basis for implying such a term so as to qualify clause 4.1(e). Conclusion on Clause 4.1(3) 59 In serving a Rent Review Notice the defendant was doubtless required to act in good faith and arguably was required to act reasonably. The plaintiff did not challenge the validity of the service of the Rent Review Notice. It follows from my conclusion that the defendant is entitled to rely on clause 4.1(e) and my conclusion that the plaintiff had not paid all moneys payable under the sublease, that the plaintiff was not entitled to give a Dispute Notice. Therefore the reviewed rent is that stated in the defendant's Rent Review Notice. Valuation Procedure 60 The questions whether the valuer was properly appointed in accordance with clause 4.2(a) and complied with clause 4.2(b), and the further questions of the consequences of non-compliance with clause 4.2(a) and (b) and the meaning of "decision" in clause 4.3 do not arise. I will express my views on those questions only insofar as it is appropriate to do so in case it be held on an appeal that my other conclusions are wrong. The principal issues are pure questions of construction. Any view I expressed on those matters would be obiter. No issue estoppel would be created. It would be inappropriate for me to express views on questions of construction of clause 4 which are unnecessary when it is possible that the same issues might arise between the parties in later rent reviews. 61 As noted at para [11], the defendant contended that Mr Mannix was not properly appointed as the plaintiff's valuer because he had not agreed to accept and comply with the provisions of clause 4 (see clause 4.2(a)(iv)). In cross-examination Mr Mannix accepted that he had not agreed to provide a speaking valuation within 28 days. However, on 17 March 2006 the plaintiff sent Mr Mannix a copy of clause 4 of the sublease and sought his confirmation that he accepted appointment as the Tenant's Valuer. On the same day Mr Mannix provided written confirmation to the plaintiff of his appointment "to act as your firms [sic] valuer in this matter". Mr Mannix did not consider he was required to provide a speaking valuation within 28 days after the giving of the Dispute Notice. He might or might not have been wrong about that. That is not a question which I will decide. But whatever Mr Mannix understood about the scope of his obligations, his confirmation that he would act as the plaintiff's valuer for the purposes of the rent review necessarily implied that he agreed to accept and comply with the provisions of clause 4 of the sublease. I do not accept the defendant's contention that Mr Mannix was not properly appointed. 62 On 12 April 2006 Mr Mannix sent by fax to the plaintiff and the defendant a letter addressed to Mr Hodgson of the plaintiff which stated: " Dear Brett, Site 564 - Bankstown Airport Please be advised that in order to compile the valuation report as instructed we have conducted an extensive market research exercise and revision of the ground rentals and lease agreements at the subject property in relation to your rental review which is due 1 April 2006. We are of the opinion that the current market rental value of the subject site is $40,000.00 per annum net including GST. This is based on an overall (inclusive of GST) rate of $17.50 psm for the entire 2,279 sqmt site or $15.00 psm for the 718 sqmt Birch Street frontage and $25.00 psm for the 1,180 sqmt 'airside' portion of the site. " 63 Mr Mannix later prepared a report described as a market rental valuation report. Although this was dated 1 April 2006 it was not completed until May 2006. It was not provided to the defendant until it was handed to Mr Wilson of the defendant at a meeting on 23 August 2006. Mr Wilson refused to receive the document. 64 It is clear that Mr Mannix's letter of 12 April 2006 was not a speaking valuation providing detailed reasons for Mr Mannix's determination and specifying the matters to which he had regard in making his valuation. It gave no reasons for his determination. Nor did the valuation report prepared in May 2006 comply with clause 4.2(b)(ii). The report restated Mr Mannix's opinion that the effective fair market rental for the sublease was $40,000 per annum net including GST. Under the heading "Valuation Rationale" Mr Mannix stated: " In assessing the market rental value of the subject property, we have had regard to its location, site quality and available market evidence. The length of lease remaining, the terms and conditions of the lease and the impact of the drainage easement in the middle of the site will also be analysed. Whilst the property is located in a well known industrial precinct the restricted uses allowed under the aerodrome zoning and the inefficient nature of the site will affect theoretical freehold and therefore leasehold rental values of the land. Analysis of the local industrial market and our research of the local airport operators suggests that land values and therefore rental levels within the Bankstown Airport are currently quite stagnant. The location only allows for restricted street parking but provides good immediate access to retail amenities and public transport. We note that the market review which was due in July 2004 is yet to be finalised and fully documented. We are of the view that the freehold land value of the site as at the date of valuation is in the range of $300 to $400 psm. A rate of $350 psm equals $797,650 and after applying a 50% discount for the impact of the ground lease and easement affectation arrives at a value of approximately $400,000.00. Assuming a 9% yield applies the effective net rental value is $36,000.00 plus GST or $39,600 pa inclusive of GST (say, $40,000 pa). Another method of valuation is to apply different rental rates per square metre to each section of the site. The 'airside' portion of 1,180 sqmt @ $25 psm pa net including GST = $29,500.00 per annum. The 381 sqmt section which is affected by the drainage easement has no value whilst the Birch Street frontage of 718 sqmt is assessed at $15.00 psm pa net including GST or $10,770.00 per annum. The total rental equals $40,270.00 pa or $17.67 psm. A number of factors affect the assessment of fair market value in this matter. These include the uncertain future of the airport under the new ownership structure, other comparable leasing activity, the inefficient site layout, the impact of the drainage easement and the highly restricted nature of potential alternative uses for the site. In addition the profitability of any potential lessee, site flooding and the impact of Clause 4.2 which stipulates that a number of onerous assumptions must be ignored including the restricted uses. We have also analysed industrial ground rentals and the generally soft industrial leasing market for older style premises in the south western suburbs of Sydney. Accordingly, we are of the opinion that a market rental range of $15 - $20 psm pa including GST applies in this matter. 2,279 sqmt @ $17.50 psm = $39,882.50 pa net including GST (say, $40,000 pa). " 65 In cross-examination Mr Mannix accepted that he had not set out or exposed his analysis of the local industrial market. He did not set out or expose his research of local airport operators. He did not provide any reasons for arriving at the range of $300 - $400 per square metre as the freehold land value of the site. He did not set out any comparable sales. He did not explain his rationale for adopting a 50 percent discount for the impact of the ground lease and easement affectation. He did not set out any comparables or any basis for selecting a 9 percent yield as distinct from some other percentage yield. He did not set out any basis or describe any comparables for choosing the figures of $25 per square metre, $0 per square metre, and $15 per square metre for different areas of the site. In cross-examination Mr Mannix accepted that the report did not give detailed reasons for his determination, nor specify the matters to which he had regard for the purposes of making the determination. His later report also did not comply with clause 4.2(b)(ii). 66 Clause 4.2(b) requires a valuer appointed under clause 4 to provide a speaking valuation. But it does not necessarily follow that the "Tenant's Valuers decision" to be given within 28 days after the giving of the Dispute Notice must be a speaking valuation which provides detailed reasons for the valuer's determination. The arguments on that question are finely balanced. Moreover, whilst clause 4.7 provides that "the Rent as determined under this clause 4 ... is final and binding ...", and clause 4.2(b) specifies the matters to which a valuer is and those to which a valuer is not to have regard and requires the provision of a speaking valuation, it is arguable that non-compliance with clause 4.2(b) does not invalidate a valuer's "decision", at least where the decision is that of the tenant's valuer or the landlord's valuer and there is a mechanism for further determination by a third valuer. It is arguable that the consequences of non-compliance with clause 4.2(b) would be different in the case of the third valuer appointed under clause 4.6 than in the case of non-compliance by the tenant's valuer or the landlord's valuer. As any views I expressed on these questions would not be binding on the parties and could potentially embarrass the determination of a future dispute arising under the same clauses, I think it better not to express any views on those questions. Conclusions 67 The plaintiff's summons sought declarations that the plaintiff had not breached the sublease in the manner alleged by the defendant in two notices of breach of sublease dated 23 May 2007. Many of the issues raised in those notices were not the subject of contest before me. I understand that they have otherwise been resolved. The plaintiff also sought a declaration that the rent payable under the sublease from 1 April 2006 was $40,000 per annum. In view of my conclusion that the plaintiff was not entitled to serve a Dispute Notice, it is not entitled to that relief. The rent from 1 April 2006 was the amount specified in the defendant's Rent Review Notice of $68,370 per annum exclusive of GST. 68 The plaintiff's summons will be dismissed. 69 The defendant sought a declaration that the plaintiff breached the sublease in the manner alleged by it in paras 1 and 4 of its notice of breach of sublease dated 23 May 2007. Paragraph 1 asserted a breach of clause 3.1 in failing to pay rent in the amount of $28,593.96 as disclosed in annexure "A" to the notice. Paragraph 4 specified a breach in failing to provide a bank guarantee equivalent to $17,092.50 (inclusive of GST), being equivalent to three months of the rent payable from time to time as set out in the defendant's facsimile to the plaintiff dated 2 March 2007. By that letter, the defendant required a replacement bank guarantee equivalent to three months of current rent being $17,092.50. 70 No submission was made that the rental schedule which is annexure A to the notice was inaccurate in any respect other than its charging of the increased amount of rent of $5,697.50 per month ($68,370 per annum). 71 Clause 7.2 of the sublease provides that if the Rent increases and the landlord notifies the Tenant that the bank guarantee is to be increased to an amount equal to three months' rent as payable from time to time, then the tenant must provide a guarantee within 28 days of being notified. The defendant is entitled to the declaration sought in para 1 of the cross-summons. It is also entitled to the declaration sought in para 2 of the cross-summons that the rent payable for the period from 1 April 2006 to 31 March 2008 was $68,370 plus GST per annum. 72 In para 3 of the cross-summons the defendant seeks the following declaration: " A declaration that the correct method of calculating the amount of annual ex-gratia payments in lieu of land tax (' EGLT ') payable by the cross-defendant to the cross-claimant pursuant to clause 5.2(b) of the Sub-Lease is: (a) In respect of the period up to and including 30 June 2002: (i) firstly, by identifying the land tax rateable area on Bankstown Airport (' the Airport '), that is, all parcels of land: A. which are sub-leased to tenants; or B. on which trading or financial operations are undertaken including but not limited to retail outlets and concessions, car parks and valet car parks, golf courses and turf farms; C. excluding runways, taxiways, aprons, roads, vacant land, buffer zones and grass verges, and land identified in the Bankstown Airport Master Plan for such purposes; and D. excluding land which is occupied by the Commonwealth or an authority constituted under Commonwealth law which is excluded from paying rates by Commonwealth policy or law. (' the Whole Airport Land Tax Rateable Area "). (ii) secondly, by determining the aggregate of the unimproved land values of the Whole Airport Land Tax Rateable Area (as determined by the Valuer General) for the relevant year, and then deducting from such aggregate the land tax threshold for the relevant year (' the Land Tax Rateable Land Value '). (iii) thirdly, by multiplying the Land Tax Rateable Land Value by the New South Wales land tax rate for the relevant year (' the Whole Airport Land Tax Amount '); and (iv) finally, by apportioning the Whole Airport Land Tax Amount to Site 564 by reference to Site 564's area as a proportion of the Whole Airport Land Tax Rateable Area. (b) In respect of the period as and from 1 July 2002: (i) firstly, by deducting the New South Wales land tax threshold from the unimproved land value of Site 564 9as determined by the Valuer-General ) for the relevant year (' the Site 564 Land Tax Rateable Land Value '); and (ii) secondly, by applying the New South Wales land tax rate for the relevant year to the Site 564 Land Tax Rateable Land Value. " 73 I see no utility in making the declaration sought in para 3. There will be judgment for the defendant against the plaintiff in respect of the amounts of annual ex gratia payments in lieu of land tax to which the plaintiff is liable to contribute. There is no utility in making the declaration as to the correct method of calculating that amount. My reasons for finding the plaintiff liable to pay the amount claimed are fully set out above. There is no reason to think that there should be any further dispute in relation to the plaintiff's liability to make ex gratia payments in lieu of land tax for the years up to and including 30 June 2002. 74 There are good reasons not to make a declaration in respect of the period after 1 July 2002. The defendant's obligations to make payments in lieu of land tax under clause 26.2(b) of the head lease are subject to directions that might be made by the Commonwealth. I could make no declaration as to the meaning of clause 26.2(b) of the head lease which would bind the Commonwealth and any declaration as to the plaintiff's obligations to pay outgoings under the sublease in respect of the defendant's obligations to make ex gratia payments in lieu of land tax under the head lease would necessarily include as an element of the declaration a declaration in relation to the defendant's liability under the head lease to the Commonwealth. As the defendant's liability might be subject to change by reason of directions given by the Commonwealth under the head lease, and as no declaration in respect of the defendant's obligations under the head lease would bind the Commonwealth, I see no reason to make the declaration sought in para 3(b). Indeed, there was little argument in relation to the parties' obligations in respect of ex gratia payments in lieu of land tax for the period after 1 July 2002. The argument focused on the outstanding debt in respect of the two prior financial years. I decline to make the declaration sought in para 3 of the cross-summons. 75 The defendant sought judgment for rental arrears up to 31 March 2008 in the sum of $61,486.94 inclusive of GST. Counsel for the defendant said that the debt relates to short payment of rent from 1 April 2006 to 31 March 2008. The plaintiff raised no dispute about the calculation of this sum if the defendant's Rent Review Notice was effective. The debt was said to be in the amount of $28,593.96 up to 23 May 2007 and $32,892.98 from 24 May 2007 to 31 March 2008. No claim was paid for rent after 31 March 2008. I was told the parties had reached a without prejudice agreement in relation to the period after 31 March 2008. There is a schedule showing how the sum of $28,593.96 is made up; but the multiple credits, debits and reversals make it well-nigh impossible to calculate interest accurately. My attention was not drawn to any similar schedule, and I have not found any similar schedule, showing how the sum of $32,892.98 was made up. This makes it impossible to calculate interest accurately. As the defendant has not provided a calculation of interest, or a means of calculating interest, I have decided that interest should run at the prescribed rates on the sum of $28,593.96 from 24 May 2007 and on the sum of $32,892.98 from 1 April 2008. 76 The defendant also sought judgment in the sum of $7,756.48 for unpaid outgoings in respect of ex gratia land tax. For the reasons I have given it is entitled to judgment in that sum together with interest at the prescribed rates from 6 October 2004. 77 The defendant also seeks an order that the plaintiff forthwith deliver to it a bank guarantee in the sum of $8,001.60. This reflects the difference between the amount of the bank guarantee which has already been provided and that which the plaintiff is required to provide pursuant to cl 7 of the sublease. However, whether the plaintiff provides an additional bank guarantee or provides a replacement bank guarantee for the increased amount as stipulated by the defendant in its letter of 2 March 2007 is a matter for the plaintiff. Its obligation under clause 7.2 is to provide a guarantee for the increased amount. No doubt, as sought in the cross-summons, that could be done by providing two guarantees, but I do not think the plaintiff can be required to provide a bank guarantee in the sum of $8,001.60, as distinct from a replacement bank guarantee in the sum of $17,092.50. In my view the defendant's position is adequately protected by the declaration that the plaintiff breached the sublease in the manner set out in para 4 of the notice of breach of sublease of 23 May 2007. 78 I will therefore make orders substantially as sought in paras 4 and 6 of the cross-summons save for the references to s 101(1) of the Civil Procedure Act. Orders 79 For these reasons I make the following declarations and orders:

Helicopters Pty Ltd v Bankstown Airport Limited

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (13)

Cited By (2)