National law firm Macpherson Kelley is facing a $2.5m lawsuit alleging it was negligent in advising on a commercial lease in Melbourne and is dragging Shell Australia into the dispute.
Melbourne business NTZ Pty ltd, owned by George Ntzounas, hired Macpherson Kelley in April 2014 to give legal advice on negotiating a lease for a service station on Oakleigh to Shell Company of Australia, now called Viva Energy.
According to court documents, Macpherson Kelley did not “exercise reasonable care and skill” in advising on the lease and accidentally allowed Shell to use an extra 320 square metres than Ntzounas had agreed to rent.
Ntzounas has also accused Shell of “misleading or deceptive conduct” because it allegedly knew the lease covered a larger area than the owner was prepared to rent to the energy company.
Ntzounas said Shell had seen the plan attached to the lease was for 997 square metres while the lease only said the size of the property was 678 square metres.
Ntzounas argued he was losing $124,735 per year because of Macpherson’s Kelley alleged mistake and Shell’s “misleading” conduct, which amounted to a total loss of $2.49m for the 10-year lease with two 5-year options, signed in July 2014.
In its defence, Macpherson Kelley pointed fingers at Shell, saying the firm and the energy company made a “common mistake” concerning the dimensions of the property to be leased.
“Shell was aware or ought reasonably to have been aware that [NTZ Pty Ltd] and Macpherson Kelley were operating under the mistaken belief and did not draw attention [to it].”
Macpherson Kelley argued Shell should have to bear part of any damages the judge chose to order for the alleged negligence.
Macpherson Kelley also claimed in its defence the lease with Shell was not a “binding agreement” and could be changed to cover a smaller part of Ntzounas’ property.
Shell, which claimed it has paid over $2m in rent to Ntzounas, denied it misled Ntzounas and claimed it did nothing to cause the landlord to agree to the lease drawn up by Macpherson Kelley.
The energy company also argued Macpherson Kelley was a firm with “trained and skilled” lawyers whose role was to ensure their clients’ contracts were accurate.
Shell allegedly refused to change the lease on Ntzounas’ request, saying the landlord had accepted rent and could not argue the agreement was “unenforceable, void for uncertainty or needs to be rectified”.
The trial starts on February 15 and will run for up to six days.
Shell and Macpherson Kelley did not respond to The Australian’s requests for comment.
Extracted in full from: Shell, Macpherson Kelley face trial over $2.5m lease dispute (theaustralian.com.au)