B doubles

Trucking mad!

16 March 2016

Rigby Cooke recently acted for a client that had entered into a sub-lease with a global transport and logistics provider. The site was to be used as a depot for our client’s business, which relies heavily on the use of B-Doubles.

The site was located next to a major highway connected via an access road. All of the properties on this road were industrial in nature.

Shortly after signing the lease, our client discovered that the access road was not an approved route for B-Doubles despite the highway being so approved.  Without the ability to access the site with B-Doubles, the site was now useless to our client’s business.

What went wrong?

Before entering into a lease, there is usually a period of time involved in negotiating the terms and other aspects of the lease. Often with large commercial premises used in the transport and logistics industry, there are many factors that need to be considered, depending on the needs of the tenant.

In order to understand what went wrong, we need to understand the events that occurred.

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The advertisement of the premises contained wording to the effect that the site was accessible to B-Doubles. This was one of the main factors that led our client to express an interest in the site. This was one of the misrepresentations that was made to induce our client to believe that the site would be suitable for its business and that moreover, the access road could accommodate B-Doubles.

Pre-Lease negotiations

During pre-lease negotiations both parties will usually investigate various factors pertaining to the site including suitability for use and permitted use. Our client inspected the site numerous times and witnessed many B-Doubles accessing the site and the adjoining properties. The head-lessee made numerous representations to our client that the site was accessible to B-Doubles. Our client asked on several times whether the access road to the property was B-Double approved and was told that the road can be used by B-Doubles. This was despite the fact that it was known to the head-lessee that the premises were not strictly accessible by B-Doubles, as there had been numerous applications made to the Council to have this road approved but no approval had been granted. There were numerous occasions on which the head-lessee had clear opportunity to advise our client that the use of B-Doubles on the access road to the property was absolutely prohibited, but it chose not to advise our client of this.

Misleading and deceptive conduct

This conduct amounts to misleading and deceptive conduct or conduct that is likely to mislead or deceive, which is a breach of section 18(1) of the Australian Consumer Law. Not only was our client misled and deceived through the express statements, but our client was likely to be misled and deceived through the silence of the other party as to the failed approval process.

Outcome

Rigby Cooke was able to negotiate a successful outcome for our client in a very short period of time which allowed our client to terminate the lease and receive compensation for losses that it incurred, and relocate to alternative premises with minimal disruption to its business.

Whilst the desire to commence legal proceedings may have seemed almost overwhelming to our client, the commercial imperative was to find a quick resolution to the problem which afforded our client certainty and commercial practicality. This is precisely what was done.

This article originally appeared in the autumn 2016 edition of InTransit. Other articles in this newsletter included:

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