What regard (if any) will Courts have to deleted words in a contract?
In the recent decision of Gee Dee Nominees Pty Ltd v Ecosse Property Holdings Pty Ltd  VSCA 23 (4 March 2016), the Victorian Court of Appeal considered what regard Courts should have to words that parties have deleted when negotiating the terms of a contract.
In Gee Dee a standard form lease was amended by the parties as follows:
“pay all rates taxes assessments and outgoings whatsoever
excepting land tax which during the said term shall be payable by the Landlord or tenant in respect of the said premises (but a proportionate part to be adjusted between Landlord and Tenant if the case so requires).”
It was common ground that the clause was ambiguous as, without the deleted words, it could be read as requiring the tenant to pay all rates, taxes, assessments and outgoings, however, it could also be read as requiring the tenant to only pay the rates, taxes, assessments and outgoings payable by the tenant. Given its ambiguity, regard could be had to the surrounding circumstances known to the contracting parties at the time the lease was executed, including the deletions from the lease.
The Court of Appeal considered the following matters, that:
The Court of Appeal held that the striking out of the words “Landlord or” was a strong indication that the parties considered, and rejected, the possibility that the tenant should pay rates, taxes, assessments and outgoings payable by the landlord.
for more information or discussion, please contact HopgoodGanim Lawyers' Dispute resolution team.