A win for a commercial common sense construction of Notices

Leanne Rich, led by Ian Jackman SC and instructed by Jonathan Light of Allens, has successfully obtained orders on behalf of Mirvac that cleared the path for a $620m sale of 11 Travelodge Hotels to complete. In an expedited hearing, Mirvac successfully obtained declarations that notices of termination issued by it on 30 March 2022 pursuant to leases relating to the hotels to Toga and Value Lodging (the current manager of the hotels) were valid and effective.

Toga and Value Lodging disputed the validity of the termination notices on the basis that the date specified in the notices was 1 day too early.  Mirvac successfully argued, in reliance on the principles set out in the decision of the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd  [1997] AC 749, that the notices were valid regardless of the date specified and the defendants were required to deliver vacant possession on the correct date under the leases.  

In another win for the application of commercial common sense to the construction of notices, Darke J agreed, holding that the test in determining the validity of a notice is to consider how the notice would be understood by a reasonable recipient and, in this case, it would have been clear to a reasonable recipient that Mirvac was seeking to terminate the lease and obtain possession of the premises in accordance with the lease terms.   

The decision, Mirvac Funds Management Ltd v Value Lodging Pty Ltd [2022] NSWSC 787, delivered on 16 June 2022, can be found here: https://jade.io/article/934232?at.hl=2022+nswsc+787

Click here to view the profile of Leanne Rich.

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