Emhill Pty Ltd v Bonsoc Pty Ltd (No 2)

The case of Emhill Pty Ltd v Bonsoc Pty Ltd (No 2) involved a dispute between Emhill and Bonsoc, focusing on issues arising from a lease agreement. The case was heard in the Supreme Court of Victoria. The primary issue was whether a purported conferral of rights over land, which the lessor did not actually possess, was fraudulent. The court also had to consider whether rescission for innocent misrepresentation was available, and if the lessee could accept the lessor's repudiation of the lease when the lessee was in breach of an essential term.

In addressing the fraudulent nature of the conferral, the court distinguished the case from Krakowski v Eurolynx, holding that the purported conferral was not fraudulent as it did not meet the threshold of fraud. The court considered the principles in Redgrave v Hurd but determined that rescission was not available because the conditions for such a remedy were not met. Regarding the repudiation of the lease, the court found that the lessee, being in breach of an essential term, was unable to accept the lessor's repudiation. The court also examined the applicability of the Retail Tenancies Act 1986 (Vic), section 14 (now repealed), and concluded that a surrender of the lease by operation of law was not excluded in the given circumstances, drawing on the reasoning in Seacrest Pty Ltd v Apriaden Pty Ltd.

The Supreme Court of Victoria ruled in favour of Bonsoc on all points, finding no fraud in the conferral of rights, no availability of rescission for innocent misrepresentation, and that the lessee could not accept the repudiation due to their breach of an essential term. The court also confirmed that the surrender of the lease by operation of law was valid under the circumstances. The final orders reflected these findings, affirming Bonsoc's position in the dispute.