Synergy Scaffolding Holdings Pty Ltd v Goodman Funds Management Australia Limited as trustee for GAI1 RPF Subtrust of the Hayesbery

Synergy Scaffolding Holdings Pty Ltd, as sublessees, brought proceedings against Goodman Funds Management Australia Limited, as trustee for the Hayesbery, seeking relief against forfeiture of their sublease. The dispute arose from the termination of a head lease, with the sublessees arguing for a new lease to be granted on terms that they proposed. The case was heard in the Supreme Court of New South Wales. The plaintiffs sought to stay the forfeiture of their sublease on conditions that a new lease be granted to them, despite the head lessee's repudiation of the head lease. The defendants argued that the sublessees were not entitled to relief because the head lessee had repudiated the head lease, and the sublessees were not in a position to exercise the rights of the head lessee.

The court was required to determine whether the sublessees were entitled to relief against forfeiture under s 130 of the Conveyancing Act 1919 (NSW), given that the head lessee had repudiated the head lease and the sublessees could not rely on the head lessee's rights. Additionally, the court had to consider whether the head lessee had repudiated the lease by entering voluntary administration and issuing a s 443B notice, and if so, whether this amounted to repudiation. The court also had to determine the appropriate terms under which a new lease should be granted to the sublessees, including whether they should be required to pay the head lessee's rental arrears, rectify a stormwater basin, provide a bank guarantee, and whether the lease should be on a "triple net" or "net" basis.

The court found that the head lessee had indeed repudiated the lease, which precluded the sublessees from relying on s 130 of the Conveyancing Act. The court determined that the sublessees were not entitled to relief against forfeiture as they could not exercise the head lessee's rights. The court further held that the sublessees should not be required to pay the head lessee's rental arrears, rectify a stormwater basin, or provide a bank guarantee. The court exercised its discretion to grant a new lease on "net" terms, without imposing additional financial burdens on the sublessees.

The court ordered that the sublessees be granted a new lease on "net" terms, without the requirement to pay the head lessee's rental arrears, rectify a stormwater basin, or provide a bank guarantee. The lease would be on a "net" basis, and no bank guarantee would be required. The court's decision provided clarity on the rights and obligations of sublessees in the event of a repudiation of a head lease and the terms under which a new lease might be granted.