LAW100 Business Law | Gumland Property Holdings Pty Limited

⭳   30 Download     📄   9 Pages / 2064 Words

Questions:

Part A

In this part, your task is to research the Australian case. Gumland Property Holdings Pty itd. V Duffy Bros Fruit Market ( Campbelltown) Pty Ltd (2008) 234 CLR 237 and report to your supervising partner (your boss!) on the significance of the case to business clients and the Australian law of contract. Initially Chapter of the text can assist. 

Apply the relevant law to the facts. Explain how the court applied the relevant law.

Conclusion and remedies- after the above stages how did the court reach a conclusion on the facts of the problem. Be sure to consider the remedy or remedies for the successful party. 

Part B

Answers:

Part A

Gumland Property Holdings Pty Limited v Duffy Bros Fruit Market (Campbelltown) Pty limited [2008] HCA 10; 234 CLR 237

Issue

Rule

• Base rent, without outgoings;
• Base rent, without outgoings;
• Base rent, with a sales percentage
• Rent along with fixed percentage, market review based on CPI measure[2].

Sub-let or sub-lease is not allowed on a tenant’s or lessee’s part unless it is permitted by the lessor under contract. Sub-lease enables a lessee to cut-down its operation when facing financial downfall and it also gets financial help by sub-letting the premises. However, sub-lease does not facilitate the lessee to evade its obligation pertaining to such sub-lease. It is to remembered that a sub-let or sub-lease is mainly allowed for the benefit of the tenant or lessee, therefore such tenant or lessee always holds certain liability for such sub-let or sub-lease.  therefore, on non-compliance of such lease or sub-lease, the lessor has the power to terminate such agreement and sue the lessee[4].

An assignment of a lease or sub-lease is the agreement between the lessee and a third party, which confers the obligation of the lessee pertaining to the sub-lease or it forms a fresh agreement involving the lessee and the third party[5]. This assignment may or may not be on the same terms as the lease between the lessor and the lessee. Therefore, the lessee cannot abandon or evade the terms of a lease on the basis of expiration of a sub-lease[6].

Application

• the lessor would secure the sub-tenant for the part of the premises;
• lessee would be responsible for the payment of the sub-tenant’s rent;
• Duff was would be paying lesser amount of rent;
• The terms of the previous lease would be changed.

Part B

East v Maurer [1991] 2 All ER 733

Issue

Rule

The elements of Fraudulent Misrepresentation are as follows[9]:

• Representation was formed;
• Such representation was false;
• The defendant party entered into such fraudulent representation without knowing it to be false or recklessly without knowing;
• The defendant relied on such fraudulent representation; and
• The defendant suffered loss due to such fraudulent representation.

The remedies of fraudulent misrepresentation depends from case to case. It may attract rescission of the fraudulent contract or it may also attract damages to the defendant, or sometimes both. Fraudulent representation of a contract is necessarily not void rather it is voidable in nature, which gives the aggrieved party to decide whether to continue with such faulty contract.

• Contracts cannot be unfair and unjust in terms of consumers and small businesses;
• Consumers should be protected while they buy goods and services;
• Penalties, enforcement and consumer redressal should be focused on[10].

Application

From the Australian Consumer Law’s point of view, East is also a consumers as he has bought the existing business of hair salon from Maurer. Therefore, East would also be protected under Consumer Law.  

Conclusion

It can be concluded by saying that the lessee can be held responsible for the arrears or default of rent made by the sub-tenant as sub-tenancy is a clause that is brought into the picture for the sole benefit of the tenant or lessee. Thus, a lessee is supposed to pay the arrears or defaults made by the sub-tenant. It would not be unjust on the part of the lessor if he sues the lessee on such non-compliance of payment of rent.

Bibliography

Collins, Toni Leah. "The doctrine of frustration, commercial leases and the Canterbury earthquakes." (2016)

Duncan, William D., and Sharon A. Christensen. Commercial leases in Australia. Thosmson Reuter, 2017

Articles/Books/Reports

Corones, Stephen G. Competition law in Australia. Thomson Reuters Australia, Limited, 2014

Royscot Trust Ltd v Rogerson [1991] EWCA Civ 12

Legislations

[1] Collins, Toni Leah. "The doctrine of frustration, commercial leases and the Canterbury earthquakes." (2016).

[2] Duncan, William D., and Sharon A. Christensen. Commercial leases in Australia. Thosmson Reuter, 2017.

[7] Commercial Tenancy (Retail Shops) Agreements Act 1985.

[8] Stone, Richard, and James Devenney. The modern law of contract. Routledge, 2017.

[13] Royscot Trust Ltd v Rogerson [1991] EWCA Civ 12