Finishing Services Pty Ltd v Lactos Fresh Pty Ltd

Finishing Services Pty Ltd sought to enforce a rent review clause against Lactos Fresh Pty Ltd, who contested the validity and effectiveness of the notice. The dispute came before the court, which had to determine whether the notice was valid, whether Lactos Fresh was liable for the rent, and whether Lactos Fresh had a claim for damages related to the rent assessment. The court also had to decide if a term implying good faith was necessary for the effective operation of the rent review clause.

The court held that the notice under clause 3.2.2 was valid and effective, and Lactos Fresh was liable to pay the rent as assessed by Finishing Services from 1 March 2003. It was determined that Lactos Fresh's claim for damages related to the assessment was not maintainable. The court found that the clause did not require any particular standard of conduct by the lessor and that a requirement of good faith was not necessary for the clause to operate effectively. The court concluded that the notice was valid and dismissed Lactos Fresh's claims.

The appeal was allowed, and the cross-appeal was dismissed. The declaration and orders made by the lower court were set aside, and it was ordered that the application be dismissed as against Finishing Services, with costs. Lactos Fresh was ordered to pay Finishing Services’ costs of the appeal and the costs of both Finishing Services and Collier Victoria on the cross-appeal. This decision confirmed the validity of the rent review clause and the enforceability of the rent assessment against Lactos Fresh.