Clone Pty Ltd v Players Pty Ltd & Ors (N0 2) - [2006] SASC 290

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD & ORS (N0 2)
[2006] SASC 290
Judgment of The Honourable Justice Vanstone
22 September 2006
LANDLORD AND TENANT - LEASES AND TENANCY AGREEMENTS - CONSTRUCTION AND INTERPRETATION
LANDLORD AND TENANT - TERMINATION OF THE TENANCY - FORFEITURE - NOTICE AND DEMAND BEFORE RE-ENTRY
LANDLORD AND TENANT - COVENANTS - AS TO REPAIR
Plea for relief against forfeiture - no relief given.

CLONE PTY LTD v PLAYERS PTY LTD & ORS (N0 2)
[2006] SASC 290
Civil

VANSTONE J: On 4 July 2006 the Full Court made orders consequent upon its judgment in Players Pty Ltd & Ors v Clone Pty Ltd [2006] SASC 118. That was an appeal against a judgment of mine delivered on 22 July 2005: [2005] SASC 281.
Among the orders made by the Full Court was an order remitting to me for determination the claim of the first defendant (by way of counter-claim) for relief against forfeiture on account of breaches of lease.
The claim for relief against forfeiture related to two Notices to the Tenant to Remedy a Breach, each served in June 2004. (There were two further such Notices which are not relevant for my purposes.) These purported to comply with s 10 Landlord and Tenant Act 1936. They were referred to as the second and third Notices. In addressing these issues I rely on the more detailed factual background set out in my original judgment and I shall use the abbreviations employed there.
I earlier found that it was unnecessary to definitively consider the claim for relief against forfeiture because I concluded that breach of the Lease as alleged by the first Notice was made out and because, in any event, Clone succeeded on the main issues in the action. However, because the Full court found that no breach as alleged in the first Notice was made out, the claim for relief becomes more relevant.
The second Notice principally alleged breaches of clause 2.6 of the Lease, which imposed the obligation to maintain the premises in good repair. In that Notice were alleged numerous instances of breach of that obligation which I found proved. I found these were not such as to be covered by the wear and tear exception in the Lease and that they were not remedied by Players. The main breach related to the state of the roof, but there were extensive failures identified by the plaintiff’s witness, Mr Jankovic, quite apart from the roof.
The third Notice relied on certain failures to meet the provisions of the Building Code (“BCA”) and failure to maintain the air conditioning plant. I set out at [145] of my reasons the five matters ultimately relied on, as supported by the evidence of Mr Dodd. At [146] I referred to the fact that reliance was placed on the BCA as it stood in 2005, whereas there was no evidence of what the BCA required in 1995 when…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] SASC 290
Decision Date: 22 September 2006

CaseChat Overview and Summary

Clone Pty Ltd sought relief from forfeiture against Players Pty Ltd, the current tenants of a property, and the receivers of the property, on the basis that the tenants had breached the lease by failing to maintain the property in good repair. The dispute came before the court, which had to determine whether the tenants' breaches were sufficiently serious to warrant forfeiture of the lease and whether the landlords had properly served a notice of forfeiture before entering the premises to remediate the breaches. The tenants argued that the landlords' entry was unlawful because they had not provided the requisite notice before entering the premises.

The court examined the lease agreement and relevant case law to determine the requirements for a valid notice of forfeiture and whether the breaches were sufficiently serious to warrant forfeiture. The court held that the landlords had properly served a notice of forfeiture and that the tenants' breaches, which included failing to maintain the property in good repair, were sufficiently serious to warrant forfeiture. The court also found that the landlords had the right to enter the premises to remediate the breaches, even if this resulted in some damage to the property.

As a result of the court's decision, the tenants were not granted relief from forfeiture and the landlords were entitled to retain possession of the property. The court emphasised the importance of landlords ensuring that their notices of forfeiture are properly served and that tenants are aware of their obligations under the lease agreement. The court also highlighted the seriousness of breaches relating to maintenance and repair, which can justify termination of the lease and forfeiture of the tenancy.

The court ordered that the tenants vacate the property and that the landlords were entitled to retain possession. The court also ordered that the tenants pay the landlords' costs of the proceedings.

Orders