The exceptions are not important for the present dispute.
4 Clause 7 of the sub-lease contained a number of provisions of various kinds regulating the relationship including subcl.7(k) in these terms:
(k) Any notice or request hereunder may be served in manner mentioned in Section 170 of the Conveyancing Act 1991-1954 as amended and may be signed on the behalf of the lessor (if a company) by a Director, Manager, Assistant Manager or Secretary of the lessor and any notice so signed shall be conclusive evidence as to its execution and of the authority of the person whose name appears therein to sign the same.
5 Section 170 of the Conveyancing Act 1919 was in these terms in 1996 (and still is):
170 Regulations respecting notices
(1) Any notice required or authorised by this Act to be served shall be in writing, and shall be sufficiently served:
(a) if delivered personally
(b) if left at or sent by post to the last known residential or business address in or out of New South Wales of the person to be served.
(b1) in the case of a mortgagor in possession or a lessee, if left at or sent by post to any occupied house or building comprised in the mortgage or lease.
(b2) in the case of a mining lease, if left at or sent by post to the office of the mine,
(c) if delivered to the facilities of a document exchange of which the person on whom it is to be served is a member, or
(d) in such manner as the Court may direct.
(1A) In the case of service by delivery to the facilities of a document exchange, the notice is, unless the contrary is proved, to be taken to have been served on the second business day following the day of delivery of the notice to those facilities.
(2) Any notice required or authorised by this Act to be served on a lessee or mortgagor shall, if served otherwise than by post, be sufficient although addressed to the lessee or mortgagor by that designation only, without the name of the lessee or mortgagor, or generally to the persons interested, without any name, and notwithstanding that any person to be affected by the notice is absent, under disability, unborn, or unascertained.
(2A) The provisions of this section extend to notices required to be served by any instrument affecting property (including any dealing under the Real Property Act 1900 ) executed, made or coming into operation after the commencement of the Conveyancing (Amendment) Act 1930 , unless a contrary intention appears in the instrument or dealing or in the Real Property Act 1900.
(3) This section does not apply to notices served in proceedings in any court.
(4) This section applies only if and so far as a contrary intention is not expressed in any instrument, and shall have effect subject to the provisions of such instrument.
(5) In this section, business day means any day except Saturday or Sunday or a day that is a public or bank holiday throughout the State.
6 In essence, the lessee's case is that it exercised the option to renew by a letter to the lessor which was posted at Cronulla Post Office about 3 pm on Friday 25 May 2001. The lessor's position is that it did not receive any Notice of Exercise of the Option by 31 May 2001, or at any other time which could be effective. To establish this position the lessor set out to establish that in fact the lessee did not post Notice of Exercise of Option to the lessor. The lessor also contended that actual written notice of exercise, received by the lessee within the contractual period, is essential for due exercise, and that if the letter had been posted posting the notice would have been insufficient without actual delivery on or by 31 May.
7 The lessor as plaintiff bears the onus of proof of all facts necessary to ground entitlement to the declaratory order claimed; the lessee has not made any cross-claim or other claim, and does not bear any onus of proof. As each party embarked fully on proving what it claimed were the facts and adducing evidence in support of it, the onus of proof is of little significance.
8 The Notice of Exercise of Option on which the lessee relied is a letter on a printed letterhead used by the lessee which gives its name and place of business, and a description of its business. The typed portion of the letter is in these terms:
25th May 2001
Mr Bob Grounds
Wallville Pty Ltd
16-18 Parraweena Road
Taren Point NSW 2228
Re Option
Dear Mr Grounds,
Please find below execution to our rights to exercise its option under the current lease.
Liristis Holdings Pty Ltd would like to exercise its option for another five years.
Please send any necessary paperwork to Marsdens Attention Dean Alcorn.
Thanking you in advance.
Kind Regards
(signature) Tony Liristis Managing Director
(signature) Maria Liristis Secretary
Witness (signature) Phyllis Munoz
9 If notice was given in those terms at the right time it complied with the requirements of cl.15; the meaning is unmistakable. This was not disputed. In his affidavit Mr Tony Liristis referred to earlier litigation between the same parties in proceedings 3318 of 2000. He said that during the hearing of the earlier proceedings he had many occasions to read documents including the sub-lease, he was told on 24 May 2001 that Barrett J would deliver his judgment on 25 May, he was present when the judgment was delivered, read a copy of the judgment and the orders and understood that the defendant "… was a tenant and as such the option needed to be exercised in accordance with the sub-lease." Earlier, on or about 23 May, he caused to be prepared in draft an exercise of option which he intended to send to the lessor subject to the decision of Justice Barrett. Following the decision he signed the exercise of option and saw Maria Liristis (who is his wife) sign the option and Phyllis Munoz witness the signatures. Ms Munoz is Maria Liristis' sister and she worked and works as a Secretary in the lessee's office. Mr Liristis instructed Ms Munoz to go to Cronulla Post Office and send the exercise of option. He anticipated that he would receive documents from the lessor before 30 September 2001.
10 In August 2001 much of the attention of Mr and Mrs Liristis was taken by the fact that their son who had Leukaemia fell into a relapse and was hospitalised in about the first week of August, and Mr Liristis did not attend work for about three weeks. The next action Mr Liristis took which was relevant arose from receipt of a letter from the lessor's solicitors dated 8 August 2001 which required vacant possession on the expiry of the lease on 30 September and asserted "Liristis has not exercised the option to renew the sub-lease. No written notice, nor indeed any notice, of exercise of the option has been given to Wallville". Mr Liristis instructed his solicitors Marsdens to reply, and they replied on 9 August and stated "Notwithstanding what you say in paragraph 3 of your letter, I am instructed that my client exercised the option on 25th May, 2001. I have asked my client to provide me with a copy of the Notice of Option given by him and will provide a copy to you as soon as it is to hand." It was through this that, according to Mr Grounds, the lessor first knew that the lessee claimed to have exercised the option. The lessee sent its solicitors a copy of the document dated 25 May 2001 by a fax message from Ms Munoz to the solicitors on 31 August 2001; Ms Munoz said in that message "I am Sorry it took so long to get this copy to you because I have had all Mr Liristis files and was putting them all in folders, and I have been off work for a while, please accept my apologies. I had Mr and Mrs Liristis sign the option and then had it witnessed. I had sent this document to Mr Bob Ground at 3.00 pm on Friday the 25th of May 2001, after Mr Liristis instructed me to do so." Messrs Marsdens sent a copy of the notice to the lessor's solicitors on 3 September 2001; it is the lessor's case that this was its first knowledge of the contents of the notice. In the meantime the lessor had commenced these proceedings on 27 August.
11 The business of the lessor all relates to the Special Lease and the mooring licences and to sub-leases of parts of the premises to Liristis Holdings Pty Ltd and other tenants. This is its sole activity. It has a registered office at the office of an accounting firm in North Sydney but in substance its activities are conducted by Mr Grounds, who is its directing mind and the principal figure in its affairs. The location at which the business of Wallville Pty Ltd is managed is the office premises in a business unit at 16-18 Parraweena Road Taren Point. The affairs of Wallville Pty Ltd are only a small part of the business conducted there, where several other businesses associated with Mr Grounds are carried on. Five persons were usually in attendance on business days in May. Affairs of Wallville Pty Ltd were and are attended to by Mr Grounds and by Mr McKenna, who is employed as an accountant in the various enterprises conducted there and also functions as Office Manager.
12 Mr Grounds maintains a Post Office Box 233 at Caringbah Post Office. The practice in May 2001 was that Mr Grounds and Mr McKenna each had a key to the Post Office Box, but no one else did. Mr Grounds gave evidence of his daily routine which includes clearing the Post Office Box when he goes by car to a sandwich shop nearby, then returning to the office and parking his car virtually alongside the letter box and checking the letter box; then having his lunch. The practice of Australia Post and its delivery staff for many years has been that letters addressed to Mr Grounds or to his enterprises at 16-18 Parraweena Road Taren Point were not taken to the premises in Parraweena Road by postal delivery staff, but were placed in the Post Office Box. Mr Grounds has never given Australia Post a direction to put all the letters in PO Box 233. The great majority of letters directed to Mr Grounds or his enterprises at Parraweena Road were actually placed in the Post Office Box, whether or not the address on the envelope mentioned the Post Office Box. In a small number of cases however delivery staff brought letters to the premises at Parraweena Road and placed them in the readily accessible letter box at the front of the premises, illustrated in the photograph Exhibit B. It is rare for mail delivered by Australia Post to be placed in the letter box.
13 Mr Grounds spends some of his time in Queensland where he has a house, but he was in Sydney and attended the business premises at Parraweena Road Taren Point on Friday 25 May 2001 and on each business day after that until and including Thursday 31 May. His evidence shows that he followed his routine on those days, and attended at least once every business day at the Caringbah Post Office and collected all mail in Post Office Box 233. His evidence also showed that he inspected the letter box at the premises on each of those days and collected any mail which he found there. Mr McKenna who also had a key followed a similar routine in which he collected any letters from Post Office Box 233, every day, and cleared the letter box at the premises whenever he saw some material in it, normally twice a day and at least every day. It was rare to find postal articles in the letter box and the usual material in it was advertising flyers.
14 The evidence of Mr Grounds and also of Mr McKenna was, in each case, that he did not receive the lessee's letter of 25 May 2001. Mr Grounds has made inquiries of everyone else who works in the office about whether the letter was received there, with negative results. Their evidence was tested in cross-examination, both as to whether the routines which they described were followed, and as to the sufficiency of office practices to bring to Mr Grounds' notice any letter which was received. I have confidence in Mr Grounds' evidence and in my finding it is clear that Mr Grounds did not have notice of an intention of the lessee to exercise the option of renewal on or before 31 May 2001, that he did not receive the letter of 25 May 2001 either by 31 May or at any other time, and that he did not know of the lessee's claim to exercise the option until it came to his knowledge through solicitors' correspondence in August, soon after which he commenced these proceedings. I regard Mr McKenna's evidence as reliable and I accept that he did not receive the letter of 25 May at any time. It has been established to a high degree of probability that the letter did not ever reach the premises at 16-18 Parraweena Road Taren Point.
15 The evidence of Mr Liristis, Mrs Maria Liristis and Ms Munoz all supported the lessee's position that the letter was signed on 25 May by all three of them. Mr Liristis' evidence was that he prepared the notice and that his solicitors did not tell him what the notice should contain except that he was to exercise the option and to write to Mr Grounds and say that the lessee wanted to exercise its option; the solicitor said there was no formal paper work. The solicitor told him that the document had to be witnessed. Mr Liristis did not report to his solicitors that he had given the Notice of Exercise or send them a copy before August.
16 Ms Munoz' evidence shows that she put the letter in a stamped envelope, took it to Cronulla Post Office and posted it at Cronulla Post Office that day. Her evidence was that she did this after Mr Liristis had told her in terms "Post it to Wallville, it must go today." A curiosity of the evidence, in particular of Ms Munoz' evidence, is that it does not directly deal with what address was written on the envelope. In her affidavit she says "On 25 May 2001 at about 3.00 pm I put the exercise of option in a stamped envelope and sent to the address of Wallville, where we normally send our rent cheques and I then went to the Cronulla Post Office and posted the exercise of option. I told Tony that I had done that when I returned to the Marina that day." She did not say to what address they normally sent their rent cheques. It may have been intended that I should understand that the address on the envelope was the same as the address on the letter namely:
"Mr Bob Grounds
Wallville Pty Ltd
16 - 18 Parraweena Road
Taren Point NSW 2228"
No evidence showed whether there was a return address on the back of the envelope. There was no suggestion in the lessee's case that the envelope had been returned undelivered, and of course the envelope itself was not produced in evidence nor was a copy.
17 Ms Munoz refers to the address of Wallville "where we normally send our rent cheques" but does not say what address that was. Although rent cheques were sometimes posted, it was not normal to send them through the post. They were often handed to Mr Grounds. Sometimes they were hand-delivered to the premises at Parraweena Road by Mr Liristis or by Mrs Liristis. Mr Grounds' evidence was that, apart from rent cheques, the lessee and Mr Liristis have never, during their dealings with Mr Grounds since January 1998, posted a letter or business communication either addressed to the premises or addressed to the Post Office Box; communications had been by telephone, by fax messages and by personal visits or by solicitors' correspondence.
18 In July there was some difficulty about delivery of a rent cheque. The lessee produced (Exhibit 2) an envelope in which a rent cheque had been forwarded; but the cheque was not received by the lessor, and was later replaced with another cheque. That envelope had a return address on the back. On its face it was addressed to "Wallville Pty Ltd, 16-18 Parraweena Road, Taren Point 2228" in Ms Munoz' handwriting. It was not delivered by Australia Post but returned to sender marked "Refused" in a post office note dated 5 July.
19 Circumstances relating to Exhibit 2 received some attention in the hearing, as I understand it in support of a suggestion that the lessor's evidence that the letter of 25 May was not received was unsatisfactory and that that letter, or letters generally, may have been refused in the mail. There is no support for this possibility in the evidence. Events affecting Exhibit 2 are no more than an illustration of the obvious possibility that postal articles may not be duly delivered. One matter that consideration of Exhibit 2 did raise is that, as appears by an extract from a map book (Exhibit C) Parraweena Road runs for several kilometres, the eastern part where the premises 16-18 Parraweena Road are situated is in Taren Point and served by Caringbah Post Office with Post Code 2229, but the western part is served by Miranda Post Office with Post Code 2228. This points, but not in any definite way, to the possibility that mail addressed to an address in Parraweena Road with Post Code 2228 might not be delivered in the ordinary course of post for a postal article with a correct post code, and might go astray in some way. However this raises no more than consideration of possibilities and does not point to any definite conclusion. The fact that the address was not correct, or was not completely correct, has a bearing on the application of s.170 of the Conveyancing Act 1919. When s.170 is addressed in a literal way it has not been complied with. Assuming that the address in the letter was the address written on the envelope, it should of course be found that 16-18 Parraweena Road Taren Point was the last known business address of the lessor, but in the postal context the business address included the post code and the post code was wrongly stated.
20 There are some anomalies in the lessee's evidence relating to the notice and in the probabilities bearing on whether it was prepared and posted as alleged. One relates to the time of preparation. The proceedings before Barrett J were heard on 4, 5 and 6 April when judgment was reserved and judgment was delivered on 25 May. Mr Liristis said that he was told on 24 May that judgment would be delivered on 25 May, and also says that he caused the exercise of option to be prepared on or about 23 May and that he intended to send the exercise of option to Wallville subject to any decision in the other litigation. It was appropriate to turn his attention to exercise of the option as the end of May approached, but it is not possible to see why he explained his attention in terms of delivery of judgment when his attention went to drafting the notice the day before he learnt that judgment was to be delivered. It is difficult to understand why he did not entrust exercising the option, or entrust it fully, to the solicitors who were then acting for him in the other litigation. He gave different accounts at different points about the part taken by the solicitors in advising him on what the option should say. It seems remarkable that in such an important matter he did not get solicitors to prepare it. In retrospect it is particularly unfortunate that there was no significant involvement of solicitors in its preparation as that would have provided material corroborating his claim that the document in fact was prepared, and perhaps that it was delivered. Another anomaly is that although he says he had gone through the sub-lease and documents, and he knew of the importance of time in the exercise of the option, he directed the document to be posted late in May, at a time when it would have been relatively simple to give it to Mr Grounds personally, or to take it to the business premises and deliver it. For a matter as important as the renewal of a lease for five years the time for which was expiring, few people would trust the post when means to make the delivery of notice completely clear were readily available. By way of example, it would have required only a small diversion on his ordinary homeward journey for Mr Liristis to deliver a notice to the premises himself. The history of earlier conflict and litigation should have prompted vigilance.
21 There are strange anomalies in the circumstances of swearing the defendant's affidavit evidence. Mr Liristis' affidavit bears the typed date 14 September 2001 as the date of swearing. The Registrar's note on the affidavit shows that it was filed on 21 September. There are four sheets annexed to the affidavit, two bear annexure notes dated 30 September and two bear annexure notes dated 20 September. It is very unlikely that Mr Liristis' affidavit was actually sworn on 14 September. These anomalies suggest that the affidavit may not have been read carefully or otherwise may not have had appropriately close attention when it was sworn. The affidavit of Maria Liristis bears the type-written date of swearing as the 12 September 2001 but refers to Mr Tony Liristis' affidavit and to an annexure to it, although his affidavit could not have been sworn then. The affidavit of Ms Munoz bears the date of swearing 14 September 2001 and also refers to Mr Liristis' affidavit. Ms Munoz' affidavit refers to an Annexure A to her affidavit although there is no such annexure. These relatively slight indications that the affidavits may not have received appropriately close attention acquire some significance when the affidavits are involved in a credit issue in which the lessor wholeheartedly challenges the basic facts and propositions that the notice bearing date 25 May 2001 was actually signed and posted on that day. The cumulative affect of small inexactitudes is adverse to confidence in the whole body of evidence.
22 Ms Munoz made entries in the lessee's business diary for 25 May 2001; her entries record a number of attendances including phone calls, courier attendances and other small business and these records appear to relate to posting articles.
Sent letter to Bob Grounds
Sent proposal to J. Smith