Progressive Mailing House Pty Ltd v Tabali Pty Ltd

HIGH COURT OF AUSTRALIA

Mason, Wilson, Brennan, Deane and Dawson JJ.

PROGRESSIVE MAILING HOUSE PTY. LTD v. TABALI PTY. LTD

(1985) 157 CLR 17

12 March 1985

Landlord and Tenant

Landlord and Tenant—Torrens system land—Unregistered lease—Effect—Covenant to pay rent—Breach—Re-entry—Right of landlord to damages for loss of benefit of covenant—Fundamental breach—Repudiation.

Decisions

MASON J. This is an appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales dismissing an appeal from a decision of Lusher J. in proceedings by the respondent, as owner, for possession of certain factory premises situated in the Sydney suburb of Artarmon. Lusher J. granted the respondent leave to issue a writ of possession and ordered, inter alia, that the appellant pay to the respondent the sum of $85,000 by way of damages in respect of the loss to the respondent, as a consequence of re-entry, of the benefit of covenants contained in a memorandum of lease entered into between the respondent as lessor and the appellant as lessee. The sole question before this Court, as before the Court of Appeal, is whether his Honour was correct in awarding damages.

2. The factory premises comprised land registered under the Real Property Act 1900 (N.S.W.). The memorandum of lease, which was in registrable form but which was not registered, was dated 4 December 1978 and purported to create a term of five years commencing on that date. Clause 3.1 required the lessee during the whole of the term to pay to the lessor the rent specified in the first schedule. During the relevant period this amounted to $7,750 per month payable monthly. Part 4 of the memorandum of lease dealt with the use of the premises and with subletting and assignment of the lease. By cl.4.2 the lessee covenanted, inter alia, not to do or permit to be done anything which might render any increased premium payable for the insurance of the premises. By cl.4.7 the lessee was prohibited from assigning or subletting the premises without the consent of the lessor. Part 5 imposed on the lessee a number of requirements with regard to the maintenance and repair of the premises and alterations, the principal obligations with regard to alterations being imposed by cl.5.1 and with regard to maintenance and repair being imposed by cl.5.2. Clause 5.3 dealt specifically with the lessee's obligation to repair and replace broken glass as well as heating, lighting and electrical equipment.

3. Part 10 of the memorandum of lease was headed "DEFAULT, TERMINATION ETC." Clause 10.1, so far as it may be relevant, provided:

"10.1 In the event that:

(a) any rent or any other moneys payable under this lease shall remain unpaid for fourteen (14) days next after the date appointed for payment thereof (although no formal or legal demand shall have been made therefor) or;

(b) the Lessee being a company, an order is made or a resolution is effectively passed for the winding up of the Lessee (other than for the purposes…