HONK LAND LIMITED V FETHERSTON HC AK AP-2005-404-7019 [2007] NZHC 398 (30 April 2007)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                                     AP-2005-404-7019



                BETWEEN                      HONK LAND LIMITED
                                             Appellant

      
         AND                          DENIS JOHN FETHERSTON
                                             Respondent


Hearing:  
     13 March 2007 and by subsequent memoranda

Appearances: Mr J B Samuel for Appellant
             Mr D J Fetherson in person

Judgment:       30 April 2007 at 3 pm


                             JUDGMENT OF LANG J
               [on application for leave
to appeal to Court of Appeal]



        This judgment was delivered by me on 30 April 2007 at 3 pm, pursuant to Rule
        540(4)
of the High Court Rules.



                                Registrar/Deputy Registrar

                                      Date...............




Solicitors:
J C Connell P O Box 29172 Auckland
D J Fetherston (Respondent) 26 Marama Street Castor Bay Auckland




HONK LAND
LIMITED V FETHERSTON HC AK AP-2005-404-7019 30 April 2007

[1]      The appellant, Honk Land Limited, is the present owner of the
Telecom
Tower in Takapuna. At the time that it acquired the building a company called Risk
Management Services Limited occupied the
third floor under an agreement to lease
that it had entered into with the previous owner of the building.


[2]      The respondent,
Mr Fetherston, is a director and shareholder of that
company.


[3]      The arrangement between the owner of the building and the
tenant was
recorded in a standard form Auckland District Law Society ("ADLS") Agreement to
Lease.    The term of the lease was for
six months commencing on 8 October 2001
and terminating on 7 April 2002.     Rights of renewal were recorded as "Nil".     Mr
Fetherson
signed the agreement as guarantor.


[4]      After the lease expired Risk Management Services Limited remained in
occupation of
the premises until 27 November 2002, when the appellant re-entered
the premises as a result of the tenant's failure to pay rent and
outgoings.      Risk
Management Services Limited subsequently went into liquidation, and the appellant
did not pursue it further.
Instead, it sued Mr Fetherson in the District Court for the
outstanding rental and outgoings.


[5]      In a judgment delivered
on 15 November 2005 His Honour Judge McElrea
entered summary judgment in favour of Mr Fetherston in respect of virtually the
who
le of the appellant's claim. The only part of the appellant's claim that survived
Mr Fetherston's application for summary judgment
was a claim for $944, which
related to monies that became payable during the term of the lease. The balance of
the claim, which related
to rental and outgoings payable after 7 April 2002, was
dismissed.


[6]      The appellant appealed to this Court against Judge
McElrea's decision, but in
a decision delivered on 20 December 2006 Frater J dismissed the appeal.           The

appellant now
seeks leave to appeal to the Court of Appeal against the decision of
Frater J.


Relevant principles


[7]     There is no dispute
regarding the principles to be applied in considering an
applicat ion for leave to appeal to the Court of Appeal.


[8]     The application
is governed by s 67 of the Judicature Act 1908, which
provides as follows:

        67    No appeal on appeals from inferior Courts
without leave

        The determination of the [High Court] on appeals from inferior Courts shall
        be final unless leave
to appeal from the same to the Court of Appeal is given
        [by the High Court or, where such leave is refused by that Court,
then by the
        Court of Appeal].

[9]     In applying s 67 the Court is bound to take into account a series of well-
established
principles.     These were considered in detail by the Court of Appeal in
Waller v Hider  [1998] 1 NZLR 412 and Snee v Snee  (1999) 13 PRNZ 609.


[10]    In Waller v Hider the Court confirmed (at 412) that the proposed appeal must
raise a question of law or fact that is capable
of bona fide and serious argument and
that the case must involve some interest, public or private, of sufficient importance
to outweigh
the cost and delay of a further appeal. Blanchard J, who delivered the
decisio n of the Court in Waller v Hider, also made reference
(at 413) to the earlier
decisio n of the Court in Cuff v Broadlands Finance Ltd  [1987] 2 NZLR 343, where
the Court had remarked (at 346-347) that, in the end, the guiding principle must be
the requirements of justice.


[11]  
 Blanchard J described the function of the Court of Appeal in determining a
second appeal as follows (at 413):

        Upon a second
appeal this Court is not engaged in the general correction of
        error. Its primary function is then to clarify the law and
to determine
        whether it has been properly construed and applied by the Court below. It is
        not every alleged error
of law that is of such importance, either generally or
        to the parties, as to justify further pursuit of litigation which
has already been
        twice considered and ruled upon by a Court.

[12]   These principles were also repeated by the Court in
Snee (at 612-613).


[13]   The restrictive nature of the test is referred to repeatedly in other cases. By
way of example, in Arnold
v Livestock Traders International Pty Limited (CA
105/98, 10 December 1998) Neazor J had granted leave to appeal pursuant to s 67.
In doing so he had noted that the parties had obtained one view of the effect of the
central documents in the case from a very experienced
District Court Judge and, on
appeal to him, he had expressed the view that such a construction was not open to
the Judge in the Court
below.    Neazor J regarded it as unsatisfactory that the case
should be left in that state when final resolution could be achieved
by a "short
appeal" which both parties could afford.


[14]   Delivering the judgment of the Court of Appeal, Thomas J observed that
neit her of these reasons were legitimate reasons for leave to appeal to have been
granted.    He reiterated (at 8) that a Judge's
discretion to grant leave must be
exercised in accordance with the principles that have been firmly established.     He
also observed
that Neazor J's departure from those principles had required the Court
of Appeal "to hear and determine an appeal which should not
have been brought and
the parties have suffered the expense and delay of an unnecessary appeal".


[15]   The Court's remarks in
Arnold, echoed by those in Snee (at [21]) make it
clear that one of the factors underlying the principles is the institutional cost,
in
terms of both time and money, that a further appeal inevitably creates.


[16]   In order to obtain leave to appeal, the appellant
must therefore persuade me
that the proposed appeal raises a question of law or fact capable of bona fide serious
argument. It must
also establish that the case involves a matter of private or public
interest of sufficient importance to outweigh the cost and the
delay involved in a
further appeal.


[17]   Before considering the issue that the present proceeding raises it is
appropriate to
set out in further detail the contractual arrangement that forms the
backdrop to this proceeding.

The contractual arrangement


[18]   Under the operative part of the agreement to lease the landlord agreed to
grant, and the tenant agreed to take, a lease of
the premises described in the first
schedule to the agreement. That lease was for the term set out in the first schedule,
which was
a period of six months commencing on 8 October 2001 and expiring on
7 April 2002. The first schedule also expressly stated that there
would be no right
of renewal.


[19]   Mr Fetherston signed the agreement to lease as guarantor.              The standard
form agreement
did not contain a space for a guarantor to sign it. As a result, it was
necessary for the word "Guarantor" to be typed into the agreement
immediately
adjacent to the place where Mr Fetherston signed.             Neither did the agreement
specify what the obligations
of any guarantor were. The only reference in the body
of the agreement to a guarantor was in Clause 6 of the second schedule, which
provided:

       Wher e the tenant is a company and if the landlord so requires, he [sic] shall
       arrange for its shareholders
to guarantee the obligations of the tenant.

[20]   Importantly for present purposes, Clause 4 of the second schedule to the
agreement to lease provided:

     
 The Tenant shall enter into a formal Lease with the Landlord to be prepared
       by the Landlord's solicitor at the cost of the
Tenant, the lease covenants to
       be no more onerous than those contained in the Auckland District Law
       Society Commercial
Lease Form Third Edition 1993 ("ADLS Lease Form").
       Any dispute as to the lease covenants shall be determined by the nominee
of
       the President of the District Law Society of the district in which the premises
       are situated, acting as an expert
and not as an arbitrator.

[21]   Notwithstanding the fact that it required the parties to subsequently execute a
formal lease document,
the agreement to lease contained a provision stating that the
agreement was a binding contract.


[22]   It is common ground in the
present case that the landlord never submitted a
formal lease document to Mr Fetherston and his company for execution.

[23]   As
a result, it is plain that the agreement amounted to a binding contract for
the lease of the premises for a period of six months.
Notwithstanding the failure of
the parties to execute a formal lease, I have no doubt that the agreement could have
been enforced
against both Mr Fetherston and his company in respect of obligations
arising under the lease during that six-month period.


The
critical issue


[24]   There is, in fact, no dispute that both Mr Fetherston and his company were
liable to perform the obligations
imposed upon the tenant by the agreement to lease
during the original six-month term of the lease. The dispute arises as a result
of the
fact that the appellant's claim relates to rental and outgoings payable in respect of the
period after the original lease
expired.


[25]   Given that the agreement did not contain a right of renewal, the fact that Mr
Fetherston's company continued to
occupy the premises after the expiry of the lease
meant that it did so on one of two legal bases.         If the contractual arrangements
between the parties provided for the situation that occurred, those arrangements
would govern their ongoing relationship notwithstanding
the fact that the original
term of the lease had expired.      If, however, the contractual arrangement did not
govern what was to
occur after the expiry of the lease, Mr Fetherston's company
would occupy the premises after that point on the basis of a statutory
monthly
tenancy pursuant to s 105 of the Property Law Act 1952.            In that event it was
commo n ground that Mr Fetherston's
guarantee did not enure beyond the expiry of
the original term of the lease.


[26]   It was therefore critical for the appellant
to establish that Mr Fetherston
remained contractually liable under his guarantee during any period of holding over
by his company.
The appellant accepted that the agreement to lease did not contain
any such provision. It argued, however, that the agreement to
lease incorporated the
terms of the Auckland District Law Society ("ADLS") standard form commercial
lease (3rd edition).   This document
contains extensive provisions relating to the
obligat ions of a guarantor. The ADLS lease also contains the following provision:

       Holding Over

         38.     IF the Landlord permits the Tenant to remain in occupation of the
         premises after
the expiration or sooner determination of the term, such
         occupation shall be a monthly tenancy only terminable by one month's
         written notice at the rent then payable and otherwise on the same covenants
         and agreements (so far as applicable
to a monthly tenancy) as herein
         expr essed or implied.

[27]     It is clear that a guarantor under the ADLS lease will
be liable not only for
the performance of the tenant's obligations during the term of the lease but also
during any period of holding
over at the expiry of that term.


[28]     The primary issue to be determined in both the District Court and on appeal
was therefore whether the agreement to lease incorporated
the terms of the ADLS
lease.    If it did, Mr Fetherston's guarantee would extend to any period of holding
over by virtue of Clause
38. If it did not, the guarantee would not survive the expiry
of the original term prescribed by the agreement to lease.


The decision
in the District Court


[29]     The respective positions of the parties in the District Court were summarised
succinct ly by Judge
McElrea at [14] and [15] as follows:

         [14]    It was Mr Samuel's argument for the plaintiff that clause 4 [of the
     
   agreement to lease] incorporated by reference the terms of the ADLS Lease
         Form into the agreement for sale and purchase.
This form provides that the
         guarantor covenants with the landlord as set out in the guarantee in the third
         schedule
to the deed of lease, and the third schedule in turn stipulates that in
         consideration of the landlord entering into the
lease at the guarantor's
         request the guarantor guarantees payment of the rent and the performance by
         the tenant
of the covenants in the lease, and indemnifies the landlord against
         any loss (etc). The terms of the third schedule guarantee
further stipulate
         that the guarantor may for all purposes be treated as the tenant ­ ie the
         guarantor is liable
as a principal

         [15]    In response to this argument Mr Thompson's submission was that
         the agreement to lease did
not stipulate the precise terms of a deed of lease
         but simply stated the most onerous form that could be required by the
         landlord. It will still be up to the landlord to produce a deed of lease for
         perusal by the tenant, and there could
then be negotiation if required as to
         whether its terms were more or less onerous than those set out in the ADLS
      
  Lease form, with any disagreement being settled by the independent expert.

[30]     Judge McElrea accepted the submissions made
on behalf of Mr Fetherston
and said at [16]:

       ... It is not open to the landlord (or its assignee) to come along later and
say
       that it would have required all of the covenants contained in the ADLS Lease
       Form ­ not that the landlord has actually
said this. The landlord was
       requir ed to make an election as to which covenants were to become part of
       the formal Deed
of Lease, and unless and until that election was made (by
       submitting a draft Deed of Lease for perusal) there is no certainty
as to what
       the terms of the lease (and therefore the guarantee) would have been.

[31]   I take this to be the nub of the
Judge's decision, because all of his subsequent
findings depend upon it. Once the Judge found that the terms of the ADLS standard
form lease were not incorporated into the agreement to lease, none of the arguments
advanced by the appellant in support of its claim
could succeed.           In particular, the
appellant could not rely upon Clause 38 of the ADLS standard form of lease which
was
critical to its claim against Mr Fetherston in relation to monies payable during
the period after the expiry of the term of the lease.


[32]   As a result, the Judge found that any guarantee by Mr Fetherston came to an
end once the lease expired. It did so notwithstanding
the fact that Mr Fetherston's
company may have remained in occupation of the premises beyond that date.


[33]   Judge McElrea stated
his conclusion in the following terms:

       [30]     For these various reasons my clear view is that the plaintiff has no
   
   basis for claim in respect of any rent or other liability arising after the
       ter mination of the agreement to lease at the
expiry of its original six-month
       ter m. The law in different ways makes it clear that the parties must provide
       clearly
for that situation if any liability is to arise at that time. To the
       contrary, in this case the landlord failed to state the actual terms of lease it
 
     requir ed by way of Deed of Lease; it failed to follow the route indicated by
       the agreement to lease (which envisaged
a guarantee provided by both
       shareholders); and it clearly stated in the agreement to lease that there would
       be no
right of renewal. In my view the guarantor was entitled to assume in
       such circumstances that his liability would be limited
to the original term.

[34]   The Judge also gave the following guidance to those who may contemplate
using the ADLS standard form
agreement to lease in the future:

        [34] For the future, those wishing to avoid the problem of uncertainty
       inherent
in clause 4 of the second schedule of this form of agreement to lease
       might consider deleting the words "no more onerous than".
This would not
       prevent less onerous terms being subsequently agreed, but avoids the
       problem that the plaintiff faced
in this case.

The judgment on appeal


[35]   The primary argument advanced before Frater J on appeal was that Judge
McElrea had
erred in fact and in law in declining to hold that the terms of the ADLS
standard form lease were incorporated into the agreement
to lease.                   Frater J
summarised this argument as follows:

       [30]    [Counsel for the appellant] submitted,
from the bar, that the
       commercial practice was to provide an agreement to lease and stipulate the
       for m of the ADLS
lease (or other lease) which was to be the contractual
       document. In some cases the draft of the relevant lease was attached
to the
       agreement to lease. He submitted that in this case the negotiations envisaged
       by the judge had already taken
place at the agreement to lease stage. For
       exa mple, the fact that Mr Fetherston had signed as guarantor indicated that
 
     he had already been asked and had agreed to guarantee the tenant's
       obligations. In addition, the inclusion of a further
term as cl 19 in the second
       schedule to the agreement to lease, namely that:

             The Landlord may on giving two
months written notice to the
             Tenant require the Tenant to relocate to another area of the
             Landlord's building
should the premises be required for a long
             ter m tenant. The cost of such relocation to be the Tenant's
           
 responsibility in all respects, including the making good and
             redecoration of the premises to the extent necessary
to return
             the premises to the same overall standard and condition as
             they were at the commencement of this
Lease, fair wear and
             tear excepted;

       signified that negotiations had been completed and that the parties were
ad
       idem. Accordingly, Mr Stanley [sic] submitted, the agreement to lease was
       part performed. He acknowledged that the
landlord had not sent a copy of
       the lease to the tenant but countered this by saying that neither was there any
       suggestion
that the tenant had sought an actual lease. In fact, he said, the
       general practice was often to rely solely on the agreement
to lease and not
       necessarily to formalise the lease. In his submission Judge McElrea's
       suggestions to the contrary
were unrealistic and cut across the economy of
       dealing with standard documentation in the first place.

[36]   The appellant
contended before Frater J that "there could be no doubt" as to
the terms and conditions of the lease.      On a worst case scenario,
the agreement to
lease incorporated all the terms and conditions contained in the ADLS lease.
Counsel submitted that, in practice,
the agreement to lease was accepted as being the
actual lease, subject to specific additional terms that might be added to the standard
form agreement.

[37]   Mr Samuel also argued that Judge McElrea had erred in law in failing to have
regard to the doctrine set out in cases such as Walsh v Lonsdale  (1882) 21 CHD 9
and the principle that "equity looks on that as done which ought to have been done".
That doctrine is to the effect that, where the
circumstances are such that the Court
would order specific performance of an agreement to lease, the parties to that
agreement ought
for most purposes to be treated as between themselves as if a
formal lease had been executed and, if necessary, registered: Hinde
McMorland Sim
Land Law in New Zealand para 11.043.


[38]   Mr Fetherston, who represented himself on the appeal, responded by
advancing
submissions relating to the facts rather than law. He accepted that he had
guaranteed the performance of his company's obligations
for the initial term of the
lease, but was adamant that he did not intend to guarantee anything after that.


[39]   Frater J considered
at [45] that the critical difference between the present
case and those involving the application of the doctrine in Walsh v Lonsdale
was that
in the other cases there was a degree of certainty about the terms of the lease or other
obligat ion to which the guarantee
attached.        In the present case, however, the only
certaint y related to the most onerous terms that any formal lease document
might
contain. The Judge's decision is summarised in the following paragraphs:

       [47]    In this case, in contrast, the only
certainty was about the most
       onerous terms on which the parties might have continued the lease after the
       expiry of
the fixed term. If put under pressure, Risk Management might well
       have executed an agreement in the terms specified. Equally,
there may have
       been changes.

       [48]     It is all very well to say, as Mr Stanley did, that it is not necessary to

      take a technical approach as Mr Fetherston agreed to guarantee "the tenant's
       obligations". But those obligations had
to be clearly defined and, in this
       case, they were not.

       [49]   Until the lease was settled in final form, there could
be no certainty.
       If Mr Fetherston is to be believed, the premises changed, as did the rental
       arrangements. We know
the worst case scenario, but not the best.

       [50]    In the absence of certainty as to the contractual obligations to be
 
     enforced, specific performance could not have been ordered. Nor given the
       ambiguity and doubt about the terms of the
guarantee, could the appellant
       possibly succeed in its claim against Mr Fetherston for any debt incurred by
       Risk Management
after 7 April 2002.

The proposed question on appeal


[40]   The appellant poses the following question to be determined on appeal
to the
Court of Appeal:


       Was the Court correct as a matter of law in determining that from and after
       the 7th April
2002 the respondent's guarantee had expired?


The appellant's argument


[41]   The appellant accepted that the outcome of the case
depends upon whether
the agreement to lease incorporated the terms of the ADLS standard form
commercial lease. If it did, the provisions
of Clause 38 of that document meant that
Mr Fetherston's guarantee would enure beyond the expiry of the original term of the
lease.
The appellant accepted that the guarantee would not continue in force after 7
April 2002 in the event that Mr Fetherston's company
occupied the premises after
that date under a statutory implied tenancy.


[42]   Counsel for the appellant summarised his submissions
as follows:

       (a)     The agreement to lease constituted the complete negotiation between
               the parties ­ there
was no further discussion in relation to terms of
               lease.

       (b)     The landlord was not attempting to impose
terms more onerous than
               those contained in the Auckland District Law Society commercial
               lease form
3rd Edition 1993.

       (c)     The terms of the intended lease could have been varied by consent in
               the agreement
to lease and indeed this happened here (clause 19)
               otherwise the tenants liability was to be in the absence of agreement
               the form of the
3rd Edition 1993 lease and in practice that is the form
               that will have been submitted for signature ie these were
the lease
               ter ms subject to the agreement to lease.

Does the proposed appeal raise an arguable question of law?


[43]   In considering the issue of whether the terms of the ADLS standard form
commercial lease were incorporated into the agreement
to lease the starting point
must be the wording of the agreement to lease.

[44]     It would have been a simple matter for the
agreement to be worded so as to
provide that the terms of any formal lease were to be those contained in the ADLS
commercial lease.
     As Judge McElrea noted, that could have been achieved by
delet ing the words "no more onerous than" from Clause 4 of the second
schedule to
the agreement.     Alternatively, the agreement could have been amended to provide
that the formal lease would be "in
the form attached", and the ADLS lease could
have been attached to it. Had either of those options been taken, it would have been
clear that the parties intended that the terms of the formal lease were to be those in
the ADLS standard form lease ­ either with
or without amendments.


[45]     In my view, however, the wording of clause 4 is plain and unambiguous. It
provides that the tenant
shall enter a formal lease with the landlord and that the
covenants in the lease are to be no more onerous than those contained in
the ADLS
standard form of lease. The agreement does not purport to provide that the terms of
the lease will be those in the ADLS
lease.       It says only that the covenants of the
formal lease will be "no more onerous" than those contained in the ADLS standard
form lease. It follows that the covenants of the formal lease could differ from those
in the ADLS lease in that they could be less
onerous than those in that document. A
lease that omitted clause 38 would obviously fall into this category.


[46]     In my view
the wording of clause 4 meant that it was necessary in the present
case for the parties to reach agreement regarding the precise
terms of the formal
lease.   That is the only reasonable explanation for the use of the words "no more
onerous than" in clause 4
of the agreement.          They could not reach agreement
regarding this issue until such time as the landlord presented a draft
lease to Mr
Fetherston and his company for their consideration.        That never occurred in the
present case, so it remains a matter
of conjecture as to whether Mr Fetherston would
have been prepared to sign a document that extended his liability as guarantor
beyo
nd the term of the original lease.      Whether or not he would have done so is
therefore irrelevant for present purposes.


[47]
    The parties to the lease arrangement in the present case therefore never
agreed upon the terms of the formal lease.       They
did no more than agree that the
terms of any such lease could not be more onerous than those contained in the ADLS

standard form.
A lease document that excluded liability on the part of the guarantor
after the expiry of the term of the lease remained, in theory
at least, a possible
outcome.     For this reason I agree with both Judge McElrea and Frater J that the
terms of the formal lease
remained uncertain and the appellant could not establish
that the terms of the ADLS 3rd Edition commercial lease were incorporated
within
the agreement to lease.


[48]    The circumstances of the present case are also, in my view, markedly
different from those
in the cases cited by the appellant.              In Inglis v Clarence
Holdings Ltd  [1997] 1 NZLR 268 the parties entered into an agreement to lease
which contained a clause requiring them to execute a lease in the form attached,
being
the ADLS 3rd edition lease.         Subsequently, however, they never executed a
formal lease document. The Court of Appeal rejected
an argument that, because the
formal lease was never executed, no guarantee was operative.              The Court said (at
272):

        In the present case the contractual obligation to sign the guarantee in the
        lease is in the same agreement as contains
the obligations on Clarence
        Holdings Ltd and the tenant to execute the lease. We heard no argument that
        specific
performance of those obligations would not be ordered. It would be
        untenable to suggest that Clarence Holdings Ltd would
be ordered to execute
        the lease as lessor without the guarantee of the tenant's obligations also being
        executed.
The situation is quite different from that in the Chan case. Here the
        steps that ought to have been taken by the respective
parties and which they
        are to be treated as having taken relate to the same lease and give rise to
        interdependent
equitable obligations. In Chan the legal guarantee in the lease
        was in respect of the tenant's obligations in that lease
not in the equitable
        lease treated as existing under the Walsh v Lonsdale principle.

[49]    I consider that the circumstances
of the present case can be readily
dist inguished from those in Inglis.      The fact that the agreement to lease in Inglis
required
the parties to execute a lease "in the form attached", and that that form was
the ADLS 3rd edition lease, meant that the parties
had agreed upon the form and
terms of the formal lease. That is to be contrasted with the situation in the present
case, where the
parties had not yet settled upon the terms of the formal lease that
they were to execute.


[50]    In Moredo v Sintau Ltd  (2002) 4 NZ ConvC 193,625 the parties entered into
a written agreement to lease commercial premises.            The agreement set out all the

essential
terms and also provided that the shareholder of the lessee would provide a
personal guarantee in respect of the performance of the
terms of the lease by the
           The agreement obliged the parties to sign a lease in the ADLS 3rd edition
lessee.
form, but
otherwise was not specific as to the terms of that lease. No formal deed of
lease was ever signed.


[51]      Wild J held that the
facts of the case were on all fours with those in Inglis,
which he considered to be directly applicable and binding authority.  
          Again,
however, the fact that the parties in Moredo were required to sign a lease in the
ADLS 3rd edition form is sufficient
to distinguish the circumstances in that case from
those in the present.


[52]      The doctrine in Walsh v Lonsdale does not apply
in the circumstances of the
present case because, in the absence of agreement regarding the precise terms of the
formal lease, the
Court could not order Mr Fetherston and his company to execute
the formal lease.


[53]      For these reasons I do not consider
that the appellant has established that
there is an arguable question of law which should be considered by the Court of
Appeal. In
case I am wrong regarding that issue, however, I propose to consider the
second issue, which is whether the proposed appeal raises
a question of private or
public interest of sufficient importance to outweigh the inevitable cost and delay
invo lved in a further
appeal.


Does the proposed appeal involve a question of private or public interest of
sufficient importance to outweigh the cost
and delay involved in a further
appeal?


[54]      The appellant's claim against Mr Fetherston is for the sum of approximately
$17,000.
Although a dispute regarding this sum may be of some importance to Mr
Fetherston and no doubt the appellant, it cannot be said to
be a matter of private
interest of sufficient importance to justify a second appeal. To be fair to Mr Samuel,
he did not pursue the
application on that basis.         Rather, he submitted that the

proposed appeal raises issues of public interest that are of sufficient
importance to
just ify the granting of leave.


[55]    This submission is based on the appellant's assertion that the decisions
that
have been given in this proceeding will have widespread ramifications for those who
have used the ADLS standard form agreement
to lease that is the subject of those
decisio ns.    Mr Samuel argued that many such agreements may currently be
operative, and the
certainty of a judgment of the Court of Appeal is required.


[56]    The appellant has not, however, adduced any evidence regarding
the extent to
which the agreement to lease that is the subject of this proceeding may still be in use.
I was advised from the bar
that this particular standard form agreement has now been
superseded by a new document, and that the ADLS standard form commercial
lease
has also been updated.      Counsel were unable to advise me, however, whether the
wording of Clause 4 of the second schedule
has been altered in the updated
agreement to lease.      It is therefore not possible to say whether the issue that is
central to
this proceeding will be of general or even significant practical importance
to commercial lawyers in the future.


[57]    Regardless
of this difficulty, I do not consider that the proposed appeal is
likely to be of any practical benefit.   Those who advise the owners
of commercial
property should now be aware of the difficulties that may arise if Clause 4 of the old
agreement to lease is left unaltered.
   If they are considering using a standard form
agreement containing a clause in that form, they should therefore take Judge
McElrea's
advice and give consideration to deleting the words "no more onerous
than" from the clause. Alternatively, they could annex a draft
lease document to the
agreement to lease.


[58]    It will also be a simple matter for a landlord who has already entered into an
agreement to lease containing
Clause 4 in its old form to avoid future difficulties.
Any landlord in that position can protect itself by immediately requiring
the tenant to
sign a formal lease containing terms that are no more onerous than those contained in
the ADLS standard form of agreement.

[59]     For these reasons I am not satisfied that the proposed appeal raises a question
of private or public interest that is
of sufficient importance to justify leave to appeal
being granted.


Result


[60]     The application for leave to appeal to the
Court of Appeal is dismissed.


Costs


[61]     Given the fact that Mr Fetherston represented himself there will be no order
for
costs.




Lang J