Recent Decisions: Retail Leases

Termination of a Lease for Ongoing Late Rent Payments

In Parallel Lines International Pty Ltd v Video Drama Pty Ltd (2007) NSW ADT 160, the landlord had terminated the lease with the tenant and denied access to the premises. The landlord’s argument was that continuing late rent payments constituted a repudiation of the lease and therefore the landlord was entitled to terminate. The question before the Tribunal was “do late rent payments constitute a basis for terminating a lease?” The Tribunal said no and held in favour of the tenant on the basis that the termination notice was incorrectly worded and that late rent payments were not, alone, sufficient to establish repudiation.

Pursuing a Claim Against the Landlord

In International Enterprises Company Pty Limited v Kingmede Pty Limited & Anor (2007) NSWADT 15, the Tribunal set out factors that could, if proved, amount to unconscionable conduct on behalf of the landlord. Actions could be unconscionable if there was evidence to show:

the landlord’s “desire to inflict harm” upon the tenant or have “reckless disregard” of the tenant’s best interests; and
the landlord ignoring or paying no significant attention to an offer made by a person preferred by the tenant to take over the lease after the tenant’s departure.
Even though the tenant was not successful in this case, the Tribunal found that the above, if proven, would most probably be unconscionable and could entitle a tenant to some form of relief.

In another case of De Luca & Anor & Scuccimarra & Anor (2007) NSWADT 63, the Tribunal held that the landlord’s failure to register an extended lease was a breach of the provisions of the Retail Leases Act. This failure to register an extended lease had cost the tenant an opportunity to sell its business to a prospective purchaser and accordingly, the tenant was able to claim damages from the landlord.

The above is not an exhaustive list, but rather some recent cases that both tenants and landlords should be aware of when dealing with retail leases. If you require any assistance or further advice in relation to retail leases, please do not hesitate to contact Tal Williams on (02) 9458 7241 or Andrew Seaton on (02) 9458 7632.

Recent Decisions Retail Leases - To learn more about this author, visit Meredith Dorham's Website.

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