Hurren v Keencrest Pty Ltd

The applicants, Hurren, sought a declaration that certain clauses in their lease with Keencrest Pty Ltd were void. The lease provided for a yearly review of rent by reference to the Consumer Price Index (CPI). Additionally, the lease included a proviso preventing the rent from decreasing following the review. The applicants also sought a declaration that another clause, which provided for a review of rent following the renewal of the lease by reference to market valuation, was void. Keencrest sought to counterclaim for any additional amounts paid pursuant to the operation of the voided clauses. The court was required to determine whether the rent review clauses in the lease were void. Specifically, the court had to consider whether the clauses providing for a yearly review of rent by reference to the CPI and a review of rent following the renewal of the lease by reference to market valuation were void. The court also had to determine whether the proviso preventing the rent from decreasing following the review was valid.

The court found that the clauses in the lease providing for a yearly review of rent by reference to the CPI and a review of rent following the renewal of the lease by reference to market valuation were void. The court held that the clauses were void to the extent that they provided for rent to change in accordance with whichever of the CPI or the rent previously payable resulted in the higher amount and whichever of a review to market and the rent previously payable resulted in the higher amount. The court found that the proviso preventing the rent from decreasing following the review was valid. The court held that the proviso did not render the clauses void as it was not a prohibited term under the Retail and Commercial Tenancies Legislation. The court granted leave to Keencrest to file a counterclaim for any additional amounts paid pursuant to the operation of the voided clauses. The court also ordered that the parties be heard further as to the appropriate form of orders, the directions necessary for the conduct of any proceedings as against the second respondent, and as to costs.