Tian Chen Limited v The Tower Limited (No 2) (2003) N2319

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi J
• Judgment Date: 20 January 2003
• Court: National Court
• Citation: (2003) N2319
• Year: 2003
• Judgement Number: N2319

Full Title: Tian Chen Limited v The Tower Limited (No 2) (2003) N2319

National Court: Kandakasi J

Judgment Delivered: 20 January 2003

1 CONTRACTS—Lease agreement—Construction of—It is the duty of the Court to uphold the agreement of the parties regardless of whatever difficulties there might be in the construction of their contract.—In the exercise of that duty, the Courts must endeavour to uphold the agreement of the parties, particularly in commercial arrangements because the Courts are not there to destroy the agreement of parties—Courts can readily do that, where the parties have proceeded to implement their agreement resulting expenses being incurred by either or both of the parties—In the exercise of that duty, the Courts can also ignore meaningless words or clause in contracts and supply reasonable terms to uphold agreement of parties—Date of possession left blank—Nothing in contract to indicate parties agreement on date of possession—Extrinsic evidence called by parties to establish agreement of parties—Evidence establish parties agreed to insert date of possession upon ascertaining date of grant of required approvals of tenant fit outs—Notorious fact for public authorities taking much longer than required to grant approvals—Reasonable to allow for blank provisions for date of possession to be inserted once date of approval of tenants fit out ascertained—Reference to year "2001" found meaningless in view of the parties agreement.

2 JUDGEMENT AND ORDERS—Effects of findings of fact in interim judgment—Binding on the parties unless credible evidence rebutting previous findings is produced—Interim judgment found against defendant on the principle of usual and apparent agent—Real estate agent of landlord in lease agreement giving tenant no choice but to engage a architect of the agents choice—Landlord failed to disclose at the earliest opportunity to the tenant of any lack of authority in its real estate agent to engage architects as the landlords agent—Architect found agent of the landlord.

3 EQUITY—Real estate agent with apparent authority to bind the landlord caused tenant to engage an architect to do architectural drawings for its fit out—Delay in drawings and fit out—Tenant not in arrears—No invoice or demand for rents due served on tenant—No evidence of any serious default in payment of rents—Duty to pay rents made conditional on architectural drawings and fit out—Landlord's apparent architectural agent cause of delay in drawings and fit out—Contract part performed—Landlord suing under contract—Tenant incurred substantial expenses in importing of equipment and material required for the intended purpose of its lease—Equity and fairness dictate a finding in favour of a contract between the parties.

4 LANDLORD AND TENANT—Real estate agent having apparent authority to bind the landlord caused tenant to engage architect to do architectural drawings for its fit out—Delay in drawings and fit out—Tenant not in arrears—No invoice or demand for rents due served on tenant—No evidence of any serious default in payment of rents—Duty to pay rents made conditional on architectural drawings and fit out—Landlord's apparent architectural agent cause of delay in drawings and fit out—Tenant incurred substantial expenses in importing of equipment and material required for the intended purpose of its lease—Equity and fairness dictate against termination of lease.

5 Notwithstanding lack of an physical possession, whether tenant in legal possession—Without agreement on date of possession tenant cannot be in possession—Failing to hand over keys and or allow the tenant to have unlimited and free access subject to security requirements to the leased premises amounts to possession not being given to tenant—Lack of any invoice for rents and or serving of notice of default under the lease support a finding that no possession was given to tenant—Found tenant not in possession either in fact or in law.

6 Hillas (WN) and Co Ltd v Arcos Ltd (1932) 38 Com Cas 23, York Air Conditioning and Refrigeration (A/asia) Pty Ltd v Commonwealth (1949) 80 CLR 11, Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429, Sykes v Fine Fare (1967) 1 Lloyd's LR 53, Nicolene v Simmonds [1953] 1 QB 543, British Guiana Credit Corporation v Da Silva [1965] 1 WLR 248, Walsh v Alexander (1913) 16 CLR 293 and Boyer v Warbey [1953] 1 QB 234 referred to

___________________________

N2319

PAPUA NEW GUINEA

[In the National Court Justice]

OS. 629 OF 2002

BETWEEN:

TIAN CHEN LIMITED

Plaintiff

AND:

THE TOWER LIMITED (No. 2)

Defendant

WAIGANI: KANDAKASI, J.

2002: 5th & 6th December

2003: 20th January

CONTRACTS – Lease agreement – Construction of – It is the duty of the Court to uphold the agreement of the parties regardless of whatever difficulties there might be in the construction of their contract. - In the exercise of that duty, the Courts must endeavour to uphold the agreement of the parties, particularly in commercial arrangements because the Courts are not there to destroy the agreement of parties – Courts can readily do that, where the parties have proceeded to implement their agreement resulting expenses being incurred by either or both of the parties - In the exercise of that duty, the Courts can also ignore meaningless words or clause in contracts and supply reasonable terms to uphold agreement of parties - Date of possession left blank – Nothing in contract to indicate parties agreement on date of possession – Extrinsic evidence called by parties to establish agreement of parties – Evidence establish parties agreed to insert date of possession upon ascertaining date of grant of required approvals of tenant fit outs – Notorious fact for public authorities taking much longer than required to grant approvals – Reasonable to allow for blank provisions for date of possession to be inserted once date of approval of tenants fit out ascertained - Reference to year “2001” found meaningless in view of the parties agreement.

JUDGEMENT & ORDERS – Effects of findings of fact in interim judgement – Binding on the parties unless credible evidence rebutting previous findings is produced – Interim judgement found against defendant on the principle of usual and apparent agent – Real estate agent of landlord in lease agreement giving tenant no choice but to engage a architect of the agents choice – Landlord failed to disclose at the earliest opportunity to the tenant of any lack of authority in its real estate agent to engage architects as the landlords agent – Architect found agent of the landlord.

EQUITY – Real estate agent with apparent authority to bind the landlord caused tenant to engage an architect to do architectural drawings for its fit out – Delay in drawings and fit out – Tenant not in arrears – No invoice or demand for rents due served on tenant – No evidence of any serious default in payment of rents – Duty to pay rents made conditional on architectural drawings and fit out – Landlord’s apparent architectural agent cause of delay in drawings and fit out – Contract part performed – Landlord suing under contract - Tenant incurred substantial expenses in importing of equipment and material required for the intended purpose of its lease – Equity and fairness dictate a finding in favour of a contract between the parties.

LANDLORDS & TENANTS – Real estate agent having apparent authority to bind the landlord caused tenant to engage architect to do architectural drawings for its fit out – Delay in drawings and fit out – Tenant not in arrears – No invoice or demand for rents due served on tenant – No evidence of any serious default in payment of rents – Duty to pay rents made conditional on architectural drawings and fit out – Landlord’s apparent architectural agent cause of delay in drawings and fit out – Tenant incurred substantial expenses in importing of equipment and material required for the intended purpose of its lease – Equity and fairness dictate against termination of lease.

Notwithstanding lack of an physical possession, whether tenant in legal possession – Without agreement on date of possession tenant cannot be in possession – Failing to hand over keys and or allow the tenant to have unlimited and...