ACT Aerial Services Pty Ltd v Canberra International Airport Pty Ltd [2000] ACTSC 6 (3 February 2000)

Last Updated: 29 February 2000

ACT AERIAL SERVICES PTY LTD v CANBERRA INTERNATIONAL AIRPORT PTY LTD [2000] ACTSC 6 (3 February 2000)

CATCHWORDS

Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 398

Trade Practices Commission v Santos [1992] FCA 523; (1992) 110 ALR 517

Bullock v Federated Furnishing Trades Society of Australasia (1985) 60 ALR 235

Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1136

Stephenson v Minister for Immigration, Local Government and Ethnic Affairs (1989) 18 ALD 249

Khim v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 10; (1993) 39 FCR 535

Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing NSW Ltd (1987) 76 ALR 633

No. SC 55 of 2000

Judge: Gallop J

Supreme Court of the ACT

Date: 3 February 2000

IN THE SUPREME COURT OF THE )

) No. SC 55 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ACT AERIAL SERVICES PTY LTD ACN 008 593 299

Plaintiff

AND: CANBERRA INTERNATIONAL AIRPORT PTY LTD

ACN 080 361 548

Defendant

ORDER

Judge: Gallop J

Date: 3 February 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The application for an interim injunction be refused.

2. Costs be reserved.

1. By application dated 28 January 2000, the plaintiff sought a "Declaration re lease and injunction".

2. On an interim application before me on 31 January 2000, the plaintiff sought the following interim orders:

"(a) A declaration that upon a true construction of the lease dated 7 March 1985 the Plaintiff is entitled to an extension of the lease of the premises at Boomerang Street, Canberra International Airport for a period of 5 years from 1 February 2000.

(b) Pending final hearing of the this action or until further Order the Defendant by its servants or agents be restrained from re-entering the said premises and from preventing the Plaintiff from having quiet enjoyment of the said premises.

(c) That the Defendant pay the costs of this application.

(d) Such further or other Orders as to the Court may seem meet."

On 31 January 2000 I refused the application, reserved the question of costs and indicated that I would give reasons later. These are those reasons.

3. The plaintiff has operated an aircraft charter and aerial work business from leased premises at the western end of Boomerang Street, Canberra International Airport since 1 February 1985.

4. The premises were originally occupied pursuant to a lease dated 7 March 1986 between the plaintiff and the Commonwealth of Australia, the owner of the premises at the commencement of the lease.

5. The original term of the lease was for 15 years. Under the terms of the lease (clause 4(1)(a)), it was agreed,

"That the Commonwealth may grant to the Tenant extensions beyond the fifteen (15) year term certain herein created for up to five (5) year periods at a time up to a maximum extension of five (5) years subject to the availability of the demised premises consistent with airport planning constraints."

6. Clause 4(1)(b) of the lease required that,

"Unless otherwise agreed between the Commonwealth and the Tenant two (2) years notice will be given by the Commonwealth of intention not to extend the term of the lease."

Therefore, the Commonwealth was required to notify the plaintiff that it did not intend to extend the term of the lease by no later than 31 January 1998. Counsel for both parties agreed in oral submissions that the Commonwealth did not give such notice.

7. The whole of premises was sold to the defendant in 1998. Counsel for both parties agreed that the transfer of the property to the defendant was registered on 29 May 1998. As a result, the rights and obligations of the lessor pursuant to the lease were assigned to the defendant as from that date.

8. The actual terms of the assignment from the Commonwealth to the defendant were not put in evidence. It seems to me that the terms of the assignment could be important but I have had to decide the application on the evidence put by the parties.

9. On 21 April 1999, the defendant wrote to the plaintiff advising that it would not be granting an extension of the lease over the site which the plaintiff was occupying, but indicated that it (the defendant) would be willing to negotiate a lease over a different site within the airport boundaries. From the material before the Court, it appears that the plaintiff did not respond in writing to this correspondence, if at all.

10. By letter dated 27 October 1999 (and apparently sent to the plaintiff by facsimile transmission on 28 October 1999), the defendant again wrote to the plaintiff confirming its position as stated in its letter of 21 April 1999. This correspondence also referred the plaintiff to clause 4(3)(c) of the lease, which required the removal of any improvements made on the demised premises, by the plaintiff.

11. It was not until 28 January 2000, some three days before the expiry date of the lease, that the plaintiff filed an originating application and supporting material in this Court.

12. The continued operation of the business of the plaintiff is dependent upon the occupation of the subject premises by the plaintiff pursuant to an Air Operators Certificate which enables commercial aviation business to be conducted. The application for an interim injunction was opposed by the defendant. It does not wish to renew the lease to the plaintiff as the current use of the premises is inconsistent with the airport development plans. Under the new plans, a maintenance facility for a regional airline will be located on the site.

13. The principles applicable to the grant of an interlocutory injunction are now relatively well settled: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 398; Trade Practices Commission v Santos [1992] FCA 523; (1992) 110 ALR 517. In order to grant an interlocutory injunction the court must generally be satisfied that there is a serious question to be tried and that the balance of convenience favours the grant of an injunction. In Bullock v Federated Furnishing Trades Society of Australasia (1985) 60 ALR 235 at 241 it as pointed out that,

"... the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises `a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it."

14. It follows from this that it may be appropriate on an interlocutory application, even one which raises a serious question to be tried, to make some assessment of the apparent strength of the applicant's claim as this may have some bearing on whether interlocutory relief should be granted: Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1136.

15. There are cases where some relief may be granted upon less than a full satisfaction of the normal tests if it is shown to be impossible to place the facts adequately before the court in the time available: Stephenson v Minister for Immigration, Local Government and Ethnic Affairs (1989) 18 ALD 249; see Khim v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 10; (1993) 39 FCR 535 at 538. Delay by an applicant in instituting proceedings or in seeking an interlocutory injunction is an important discretionary consideration as is the likely practical adequacy of any undertaking as to damages which the applicant may give: Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing NSW Ltd (1987) 76 ALR 633 at 638-9.

16. It was submitted on behalf of the plaintiff that when the defendant took an assignment of the Commonwealth's rights and liabilities under the subject lease, it took the rights of a lessor which had not given notice of an intention not to extend the term of the lease two years before the expiration of the lease. As I indicated in argument I rejected that submission. It seems to me to be clear that the assignee defendant could not take over an obligation to give two years notice of an intention not to extend the term of the lease when the assignment was made to the defendant after the period of two years had commenced to run. Accordingly, I held that there was no obligation on the part of the defendant to give the notice required to be given by the Commonwealth when it was the lessor under the terms of clause 4(1)(b) of the lease.

17. I also rejected the application for the exercise of my discretion because of the substantial delay by the plaintiff in seeking an interlocutory injunction, see Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing NSW Ltd (supra).

18. Counsel for the defendant also relied upon the terms of clause 4(7) of the lease,

"In the event of the Tenant continuing in occupation after the expiration of the term hereby created and after the expiration of any extension of the term granted by the Commonwealth pursuant to paragraph (1) of Clause 4 without any demand in writing for possession thereof having been made by the Commonwealth the demised premises shall be held by the Tenant under a tenancy determinable at any time by one (1) month's notice in writing given by either party to the other and upon the conditions as are herein contained."

19. It was submitted on behalf of the defendant that if the plaintiff is to continue in occupation after 31 January 2000, no extension of the term having been granted by the Commonwealth pursuant to clause 4(1) and no demand in writing for possession having been made by the Commonwealth, the most the plaintiff could acquire under the lease is a monthly tenancy determinable at any time by one month's notice in writing. In my opinion, this submission is a further reason for refusing the plaintiff's application for an interlocutory injunction.

20. I shall hear counsel on the question of costs.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gallop.

Associate:

Date: 3 February 2000

Counsel for the plaintiff: Mr B Meagher

Solicitor for the plaintiff: Barker & Barker

Counsel for the defendant: Mr J Purnell, SC

Solicitor for the defendant: Mallesons Stephen Jaques

Date of hearing: 31 January 2000

Date of judgment: 31 January 2000