Reference no: EM13473534

A restaurant premises in the central business district of Southport, Queensland. the local council approved a light rail project. This involved the construction of rail lines which ran past Ryan's restaurant. Construction commenced in the same year on 1 July with completion of the project to occur by early . The construction works in and around Ryan's restaurant and associated traffic made it difficult for customers to access the restaurant, so much so that sales revenue dropped 60%.

Ryan wanted to quit the lease and if sued for breach of the lease, intended to file for bankruptcy as he had very few assets other than the restaurant. David, the owner of the premises and Ryan's landlord, did not wish to lose Ryan as a tenant because it was unlikely that David would find another suitable tenant given the market conditions. With this in mind, David approached Ryan on and entered into an oral agreement with Ryan to reduce the rent from $15,000 per month to $5,000 per month.

The agreement did not state the period for which the reduced rent was to be paid. Due to good weather, the construction of the rail line in Southport was completed early. In fact, business has been very good for Ryan since, with revenue up 20% compared to the time just before construction commenced. In response to the improvement in Ryan's business, David has demanded rent in arrears from Ryan claiming that he has to meet his existing contractual obligation to pay $15,000 per month and that Ryan provided no new consideration under the verbal agreement to reduce the rent.

Advise David as to whether he can claim from Ryan under common law and/or equity.