CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd

The Supreme Court of Tasmania, sitting as the Full Court, considered a dispute between CMA Recycling Victoria Pty Ltd (the tenant) and Doubt Free Investments Pty Ltd (the landlord) concerning the termination of a commercial lease. The landlord had purported to terminate the lease due to alleged breaches by the tenant of covenants to keep the premises in repair and to promptly repair damage.

The central legal issues before the Full Court were whether the landlord was entitled to terminate the lease under general principles of contract law for breaches of these covenants, and whether compliance with section 15 of the *Conveyancing and Law of Property Act 1884* (Tas) was a prerequisite for such termination. The Court also had to determine whether the lease itself excluded the application of contract law principles for termination.

The Full Court reasoned that the lease, by its express terms, did not exclude the application of contract law principles for termination due to breaches of essential terms. However, it found that the landlord's purported termination was invalid because it failed to comply with the requirements of section 15 of the *Conveyancing and Law of Property Act 1884*, which mandates specific notice procedures before a landlord can exercise a right of re-entry or forfeiture for breach of covenant. The Court held that the landlord had not established that the breaches were of such a fundamental nature as to constitute repudiation of the lease at common law, nor had it satisfied the statutory preconditions for forfeiture.

Consequently, the Full Court set aside the previous orders and made a declaration that the lease continues in force. Liberty was granted to the parties to apply as to costs and any consequential orders.