For a Hungry Jack’s restaurant in Taree, the rent differential as between a lease of vacant land and one that included the restaurant improvements was about $83,000 a year.
Hungry Jack’s Pty Ltd built the single-storey drive-through restaurant at the corner of Manning and Wynter Streets in 2004. It occupied the 1,511-square-metre site under a registered lease. Thanh Tram Hoang bought the site in 2015.
The lease had market-rent reviews. In 2019, an expert assessment set the base rent at $119,873 a year. When the next review arrived in 2024, Ms Hoang’s valuer assessed the rent at $195,000 a year, while Hungry Jack’s valuer put it at $112,000.
The gap came down to one question: what were the “Premises” being valued? Hungry Jack’s said this was a ground lease, so the review should ignore the restaurant building and other improvements it had constructed. Ms Hoang said the lease required rent to be assessed for the land, the building and the improvements.
The lease definition of “Premises” referred to “the Building and all other structures” at the Taree address. A later variation also described the premises as the whole of the land, but said they were otherwise more accurately defined in the lease.
The earlier ‘agreement for lease’ provided for Hungry Jack’s to construct the restaurant and dealt with ownership of construction works. But the registered lease, and later variation, had their own terms. They did not incorporate the earlier agreement except for a limited signage provision, and contained entire-agreement clauses.
The long running dispute came before Justice Ian Pike in the NSW Supreme Court. He accepted Ms Hoang’s construction and rejected Hungry Jack’s competing arguments.
The Court held that a reasonable person in the parties’ position would understand the premises to include the building and other structures or improvements. They were not merely the site stripped of what stood on it.
That was not the end of Hungry Jack’s case. It argued that the building was not part of the land because it had not been intended as a permanent fixture. Alternatively, it said the building was a tenant’s fixture, whose value the rent-review clause required the valuer to disregard.
The judge rejected both those arguments. The restaurant was built to remain for at least the term of the lease, he reasoned; perhaps indefinitely.
At the end of the lease, the lessor could require it to be removed or left in place. Hungry Jack’s did not hold the corresponding right to decide that question; its express end-of-lease right was to de-image the premises.
That also defeated the “tenant’s fixture” argument. The Court found Hungry Jack’s could not sever and remove the building, and that the lease distinguished the building from the lessee’s other fixtures and fittings. The building was therefore not a lessee’s fixture to be ignored by the valuer.
Hungry Jack’s also alleged that requiring it to pay rent for a restaurant it had built was unconscionable conduct under section 21 of the Australian Consumer Law. It argued that it would effectively pay twice.
The court was not persuaded.
Ms Hoang did not know the terms of the earlier agreement for lease when she purchased the site, and the commercial documents had been prepared between commercial parties with legal assistance. The evidence did not show that the original bargain was for building costs to be reflected in rent across every available option period, potentially to 2039. Enforcing the lease as properly construed was not conduct outside accepted commercial standards.
The 2019 valuation did not survive either. Although it had been described as final and binding, the Court held the valuer had not performed the contractual task because the assessment ignored the building and improvements. Ms Hoang had not elected to accept that approach: she was not shown to know it was the basis of the valuation.
Hoang v Hungry Jack’s Pty Ltd [2026] NSWSC 775, Pike J, 3 July 2026.
