Landream Melbourne Pty Ltd v Aust and NZ International Investment Group Pty Ltd

Landream Melbourne Pty Ltd sought to terminate its agreement with Aust and NZ International Investment Group Pty Ltd, which concerned the rezoning and redevelopment of a property owned by the Defendant. The dispute centred around a clause requiring the Plaintiff to notify the Defendant of any change in control, including a change in the majority shareholding, without the Defendant's approval not to be unreasonably withheld. The Plaintiff contended that the Defendant was not entitled to terminate the agreement as it was not required to notify the Defendant of the change in shareholding, which occurred in September 2020. The Court was required to decide whether the Defendant was entitled to terminate the agreement based on the breach of the change in control clause, whether the clause constituted a penalty, and whether the Plaintiff was entitled to relief against forfeiture if the Defendant was found to have been entitled to terminate the contract.

The Court considered the three alternative constructions of the change in control clause advanced by the Plaintiff. The Court held that the requirements of the clause were met and that the change in the majority shareholders without approval entitled the Defendant to terminate the agreement. The Court also considered whether the change in control clause constituted a penalty. The Court held that the clause was not a penalty as it was not intended to punish the Plaintiff for breach but to compel performance. The Court held that the predominant purpose of the clause was to protect the Defendant's interests in the event of a change in control. Finally, the Plaintiff contended that, if the Defendant was found to have been entitled to terminate the contract, it should be granted relief against forfeiture. The Court held that the remedy was not available in respect of a contractual breach which did not involve a proprietary interest.

The Court held that no relief against forfeiture should be granted as the Defendant's conduct was not unconscientious or unconscionable. The Court held that the Defendant was entitled to terminate the agreement and that the change in control clause was not a penalty. The Plaintiff was not entitled to relief against forfeiture.