Reference no: EM133282553
Scenario:
In October 2022, Tina moved to a new area and wanted to open a small coffee shop in the local shopping centre. She visited the centre and discovered that there were no coffee shops operating at that time.
Tina spoke to Joe from CentreMark the shopping centre management agent.
Joe said that Tina could lease a shop from November. The shop had been empty for some time and CentreMark was keen to fill the space. Tina could do her fit out in November and then commence in December.
Tina was interested but a bit trepidatious and Joe, sensing this, assured her that she would be making a good decision. He told her that:
• there were no coffee shops in the centre;
• the centre was very busy with around 10,000 customers per day; and
• Centremark intended to put on some Christmas entertainment in December and so December would be a fantastic time to commence as it would be very busy.
Joe showed Tina a map of the centre and there were two stores listed as empty. One was near the food hall and the other was on the opposite side of the centre, near the entrance, between an optician and a beautician. Tina assumed that the shop near the food hall would be the one she was leasing. Tina said that she would be happy to sign a 3-year lease with a 2-year option.
Joe did not tell Tina that the recent CentreMark annual report, available to the public on their website had lamented that the centre had been very quiet lately, that the foot traffic had dropped from around 10,000 to 5,000 customers per day and that the centre generally was struggling financially. However, it did announce some new stores, including a Dome coffee shop that would be opening in the empty shop near the food hall in January 2023.
Tina, unaware of the annual report, signed the lease in front of Joe. The lease stated that the term was 5 years. Tina did not notice this.
Tina then set about purchasing a coffee machine for her shop.
At a recent coffee convention she had picked up a brochure from Acme Coffee Machines. The brochure included details of a De Gusto Coffee Machine that:
• Would make up to 100 cups of coffee per hour; and
• Came with 1000 disposable coffee cups and stirrers.
Tina was eager to get a De Gusto brand coffee machine because this was her favourite brand. She ordered a machine online and paid $5,000 for it. A few days later, Acme delivered a Nesquicko machine with a note that said, 'We apologise but the De Gusto machines were out of stock. We have supplied a similar but slightly more expensive Nesquicko machine instead at no extra cost to you'.
Tina set up the machine at her house to test it. She immediately noticed some issues with the coffee maker. It only made around 90 cups of coffee per hour. Furthermore, only 995 disposable coffee cups and stirrers were provided.
When Tina arrived at the centre on 1 November to commence the fit-out work, she was shocked to see that she had been given the shop near the entrance. She raced to the shop near the food hall and saw a sign recently placed in the window announcing that Dome would be opening soon! Tina also checked her lease and discovered that she had signed for 5 years.
Tina immediately called Joe who said that he was literally telling the truth when he had said at the time that there were no other coffee shops in the centre. He told Tina that all the information about the centre and Dome was in the publicly available annual report and that, by the way, there would be no Christmas entertainment but this was only an intention and not a promise anyway. When questioned about the 5-year term, Joe simply stated that Tina had signed and that was that.
That very afternoon, the WA government announced that there would be an immediate lockdown for 6 months due to a sudden outbreak of a ferocious strain of Covid-19.
Tina comes to see you. She believes that there was a misunderstanding about which shop she would get and the term of the lease. She believes that Joe lied to her to entice her to sign the lease and that she had only intended to sign a 3-year lease. Tina also wants to know if the lease is no longer binding because of the Covid lockdown. Finally, she wants to know if she can return the Nesquicko coffee machine and get a refund.
Question: what reference to law and precedent case only about misrepresentation, advise whether Tina can rescind the lease.
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