(MORRIS) LEVENTHAL Vs. DAVID JONES LTD

JUDGEMENT

(1.) This appeal from a judgment of the Supreme Court of New South Wales raises questions as to the construction of a series of documents exchanged between lessors and lessees of business premises in George Street, Sydney, with the intention of ascertaining precisely their respective liabilities for the taxes payable in respect of the premises. The dispute between the parties has given rise to conflicting judicial opinions, expressed in a suit in equity instituted by the lessees and an ejectment action brought by the lessors, in each of which the lessors obtained judgment, and in an appeal of the lessees to the Supreme Court of New South Wales where the lessees were successful. The lessors are appellants against the judgment of the Supreme Court.

(2.) The lease of the premises, dated 30 November 1909, but sealed by the respondents pursuant to a resolution of the Board passed on 1 March 1910, demises the premises for 33 years from 1 August 1909. Among the lessees' covenants in the following : "And also will bear, pay and discharge all rates, taxes, charges and assessments and all outgoings whatsoever whether Parliamentary, municipal, local or otherwise which now or hereafter shall be imposed, charged or assessed upon or in respect of the said premises hereby demised or any part thereof or the rent thereof or payable by the owner or occupier in respect thereof, landlord's property tax or land tax only excepted."

(3.) The lease contains the usual proviso empowering the lessors to re-enter in cases of breach of covenant. At the time of execution of the lease by the lessors a memorandum was signed by them and to this as well as to the lease the seal of the defendant company was affixed pursuant to the resolution of 1 March 1910. This memorandum, so far as is material here, is in the words following: "Memorandum . . . intended to be read as if endorsed on ... lease of even date herewith. . . whereby in order to make quite clear the covenants in such lease as to the incidence of the liability for payment of rates it is mutually agreed : "The lessors will pay and satisfy the landlord's property tax or land tax or any municipal tax on the unimproved capital value of the land by any competent authority rated, imposed or levied. Provided that if the present rates now assessed by the City Municipal Council of Sydney on the annual rental value and which under the said lease are to be borne and paid by the said lessees should hereafter be assessed by the council in any other form or by any other name whatsoever then the same now are then the same shall still be borne and paid by the said lessees."