We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
In brief - Landlord liable to carry out structural works and
compensate tenant
In a dispute related to structural works required on a hotel by
the council, the landlord was held liable to carry out the works
and to reimburse the tenant for the works that it had paid for and
also to compensate the tenant for loss of profit whilst the
accommodation section of the hotel was closed.
Holus Bolus v The Wicko
In Holus Bolus Pty Limited v The Wicko Pty Limited, the
matter in dispute between the parties was a notice with regard to
carrying out works related to fire safety issues in a hotel in
Quirindi.
The dispute arose between the lessor and the lessee as to who
was responsible for this and council ordered that the residential
portion of the premises be closed until the works were
undertaken.
Lease states that landlord to carry out all works "of a
structural nature"
The lease contained what could be classified as fairly normal
provisions dealing with obligations to repair and comply with
statutory requirements on the part of the tenant.
The lease also contained a covenant that the landlord was
required to carry out "all amendments, alterations,
reparations and additions of a structural nature".
The court held that the reference to works "of a structural
nature" was descriptive of works carried in and upon the hotel
building. The structure comprised many parts and this description
was not limited to works which affected those parts of the building
which are load bearing (such as a main wall), as contended by the
lessor.
Structure of hotel building to be considered as a whole
The court held that the words "of a structural nature"
relates to the structure considered as a whole.
The court further found that, having regard to the very large
list of works set out by the council, the case had to be determined
having regard to the totality of the works required to be done,
rather than the individual parts.
Building work required to meet fire safety standards
The required works were related to the fire safety and fire
resistant condition of the hotel building. The works, taken as a
whole, involved the installation of a total system for the
compartmentalising and containment of fire within the hotel
building.
The totality of these works would change the building to a
standard which was regarded as essential for the use and enjoyment
of the accommodation amenities of the hotel. Without completion of
the works, the structure could not be lawfully used for the purpose
for which it was designed and let to the tenant.
Totality of works deemed to be "structural", even if
individual items are not
In short, the undertaking of the works changed the condition of
the property from a building which was deemed unsafe to a building
which was safe, and therefore the works were deemed to be
structural works, even though individual items of work may not, in
isolation, have been considered to be structural in nature.
Leases require careful drafting
Firstly, it must be clear in leases as to what works each party
is to undertake and in particular where the tenant is to be
responsible for any structural works.
Secondly, the drafting of the lease needs to be clear as to
whether the works are looked at on a totality basis or on an
individual works item basis.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
