…
11 Provision is then made for determination of the rental by a licensed valuer nominated by the President of the Australian Property Institute Inc, NSW Division. Schedule 2 provides for an interest rate of 2% above the interest rate prescribed, as at the time of the default, by Schedule J of the Supreme Court Rules from time to time on judgments.
12 There is a substantial dispute between the parties as to whether, when Mineaplenty executed the lease, it included the reference that now appears on the face of the registered lease to the filed memorandum. Mineaplenty's sole director and secretary, Mr Taylor, says that it contained no such reference when he signed it. The solicitor who acted for him at the time, and who acts for him in these proceedings, Mr Hand, confirms that to be so, and annexes to his affidavit a copy of a version of the lease, bearing Mr Taylor's signature and Mr Hand's attestation, which contains no such reference. However, although - as Mr Loewenstein, for Trek 31, points out - Mr Hand's affidavit, on a fair reading of it, suggested that the document so annexed was a copy of what had been sent for stamping and registration, it became apparent (not least from dissimilarities in the manner of appearance and location of the signatures on them) that Mr Taylor had signed and Mr Hand had witnessed two forms of the lease. Mr Hand explained that he had Mr Taylor sign a draft that had been submitted for comment, as well as the execution copy, so that he had a record on his file, pending receipt back of the registration copy following registration. Mr Hand and Mr Taylor both and independently say that when Mr Hand received the registration copy, in about mid 2001, Mr Hand immediately noticed that the reference to the filed memorandum had been added, discussed it with Mr Taylor, but decided not to raise it with Trek 31 at that time, so as to avoid creating a dispute.
13 Mr Prendergast says that the lease contained a reference to the filed memorandum when he signed it, but it is unlikely that he would have noticed its presence or absence. Mineaplenty's case is that the reference to the filed memorandum was inserted after the execution copy had been stamped and returned to Trek 31's solicitors, but before Trek 31 executed it.
14 The versions of Mr Hand and Mr Taylor and not without difficulties. In making these observations, I do not doubt that both Mr Hand and Mr Taylor genuinely believe that the lease contained no reference to the filed memorandum at the time of execution, and that Mr Hand first noticed the reference when the registration copy was forwarded to him in mid-2001 - probably upon comparing it at that point to the version he had retained in his file. However, the course of correspondence between Mr Hand and Morton & Harris, who were acting for Trek 31 on the lease, in the few days preceding 22 December 2000 when the terms of the lease were negotiated, does not suggest that there was a separate and prior submission of a draft for comment, as Mr Hand recalls; to the contrary, the correspondence suggests that the execution copy had already been received when Mr Hand commented on its terms, and in response was invited to make a handwritten amendment to the execution copy. Secondly, in fact he made handwritten amendments to the copy he retained on his file, but not to the execution copy; in accordance with the agreement between the solicitors, he altered "less" to "more" in the clause pertaining to the security deposit, and he also changed the date for payment of rent from the 18th to the 22nd of the month.
15 On the other hand, Mr Taylor and Mr Hand corroborate each other as to the absence from the execution copy of any reference to the filed memorandum. An affidavit of Mr Hand sworn on 23 June 2006 and filed on 5 July 2006 deals explicitly and exclusively with this issue. Mr Taylor's principal affidavit had also addressed the issue, albeit it in passing. A letter from Mr Taylor to Trek 31's then solicitors, dated 29 July 2003 raised the issue, when nothing in particular appeared to turn on it; the assertion was not traversed in any subsequent correspondence. In that light, it is striking that no evidence has been called as to how the reference to the filed memorandum came to be inserted in the lease - in particular from the solicitors who drafted the lease, Morton & Harris.
16 Moreover, there are multiple inconsistencies between the filed memorandum and Annexure A to the lease, which make the filed memorandum quite inapt for the lease, and which would likely have been detected by a solicitor acting on the lease. For example, the filed memorandum contains provisions incorporating Conveyancing Act, s 85, when Annexure A to the lease excludes that section; and the filed memorandum contains numerous references to a schedule, which the lease does not contain. Other provisions of the filed memorandum cover substantially the same ground as the annexure, in a manner not materially different way the annexure, so as to add nothing. The one material difference is that the filed memorandum contains a redevelopment clause that entitles the lessor to retake possession at its discretion for the purpose of redevelopment. There is no suggestion in Mr Prendergast's evidence that he gave instructions for any such provision, or relied on its inclusion in any way.
17 It is clear that the negotiations for the lease took place in haste and against a background of urgency. That there were some errors, oversight or omissions is apparent from the circumstance that amendments were made to the file copy but not to the execution copy submitted for stamping and ultimately registration. However, the belated addition of a reference to the filed memorandum quite irregular course, and is not lightly to be inferred. However, the evidence of Mr Hand and Mr Taylor is uncontradicted, and as things stand, the evidence is, in effect, all one way, that there was no reference incorporating the filed memorandum in the form of lease executed by Mr Taylor on behalf of Mineaplenty. I therefore conclude that the lease, when executed on behalf of Mineaplenty, contained no reference to the filed memorandum, and that such reference was added without Mineaplenty's knowledge or consent after the stamped lease had been returned to Morton & Harris for execution by the lessor and registration.
18 After the lease was duly stamped, and registered, it was not long before contention arose.
19 On 26 August 2003, Trek 31 gave Mineaplenty notice of default in respect of an alleged failure to pay the security deposit referred to in clause 5(h). On 23 December 2003, Trek 31 served another notice of default, in respect of an alleged failure to pay water rates and to pay the security deposit. There ensued a dispute as to the liability of Mineaplenty for Trek 31's associated legal costs, which has never been resolved. On 18 January 2004, however, Mineaplenty paid into Trek 31's account the security deposit of $36,603. On 15 November 2004, Trek 31 served a further notice of default, purporting to require certain breaches to be remedied in seven days, to which Mineaplenty responded on 17 November 2004.
20 The caravan park obtained a rating of 4½ stars for 2000, and the same for 2001. Between 2002 and 2005, AAA Tourism replaced the NRMA as the rating authority for caravan parks. The park's ratings thereafter declined, below four stars. Although an inspection by AAA on 4 May 2005 resulted in a recommendation for a 4-star rating, that recommendation has never been implemented.
21 On 25 May 2005, WJ Kell Lawyers, acting for Trek 31, demanded payment of further costs said to have been incurred in connection with breaches of or matters otherwise arising under the lease, and raised various other complaints concerning Mineaplenty's performance. Mr Taylor replied on 15 June 2005, complaining that Trek 31 had incorrectly calculated the annual CPI rent increases, and had invoiced and been paid more rent than its proper entitlement:
I calculate that an amount of $3,372.00 has been overpaid to your client over the previous years of the lease and an amount of $1,885.00 has been overpaid to it up to May of this current year. This must be rectified.
In the circumstances I must request your client is more vigilant in performing its obligations under the lease. I request that the proper calculation of the current rent be made and confirmed by your client and all future tax invoices for rent represent the rent at the proper amount. This is a matter of great urgency and request your client deal with this accordingly.
22 Trek 31 responded by letters to Mr Taylor dated 21 and 28 July 2005, observing that the lease provided for 5% increases when the CPI was less than 5%, and asserting that as a result rent had been underpaid by $39,306 as at 26 July 2005.
23 On 31 July 2005, on the letterhead of "Trek 31 Tourist & Holiday Park", Mr Taylor sent a letter to Mr Prendergast, relevantly as follows:
Ronald Prendergast
38 Algona Street
Lavington NSW 2641