Taboref Pty Ltd as trustee for the Penn Family Trust v Acquest Property Pty Ltd (in Liquidation) as trustee for the Rpit Development Trust NO. 2 - [2024] WASC 313

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   TABOREF PTY LTD AS TRUSTEE FOR THE PENN FAMILY TRUST -v- ACQUEST PROPERTY PTY LTD (IN LIQUIDATION) AS TRUSTEE FOR THE RPIT DEVELOPMENT TRUST NO. 2 [2024] WASC 313
CORAM:   HILL J
HEARD:   27 JUNE 2023
DELIVERED          :   30 AUGUST 2024
PUBLISHED           :   30 AUGUST 2024
FILE NO/S:   CIV 3132 of 2019
BETWEEN:   TABOREF PTY LTD AS TRUSTEE FOR THE PENN FAMILY TRUST
Plaintiff
AND
ACQUEST PROPERTY PTY LTD (IN LIQUIDATION) AS TRUSTEE FOR THE RPIT DEVELOPMENT TRUST NO. 2
First Defendant
BERYL VIVETTE TAYLOR
RAYMOND JOHN TAYLOR
Second Defendants
RAYMOND JOHN TAYLOR
Plaintiff by counterclaim
BERYL VIVETTE TAYLOR
Second Plaintiff by counterclaim
TABOREF PTY LTD AS TRUSTEE FOR THE PENN FAMILY TRUST
Defendant by counterclaim
ACQUEST PROPERTY PTY LTD (IN LIQUIDATION) AS TRUSTEE FOR THE RPIT DEVELOPMENT TRUST NO. 2
Second Defendant by counterclaim

Catchwords:

Contract - Sterling New Life Lease scheme - Residential tenancy agreement - Proper construction of term of residential tenancy agreement - Whether mortgagee took interest subject to residential tenancy agreement - Whether mortgagee has superior title to residential tenants - Whether residential tenancy agreement terminated under s 60(1)(d) of Residential Tenancies Act 1987 (WA)
Real property - Default under mortgage - Whether mortgagee has taken possession of premises under mortgage - Whether residential tenancy agreement terminated under s 60(1)(e) of Residential Tenancies Act 1987 (WA) - Whether breach of residential tenancy agreement required
Real property - Possession of land - Whether mortgagor entitled to vacant possession of property
Real property - Whether order for tenancy ought be made under s 81(3) of Residential Tenancies Act 1987 (WA) - Whether special circumstances exist

Legislation:

Landlord and Tenant (Amendment) Act 1948 (NSW), s 62
Real Property Act 1900 (NSW), s 42
Residential Tenancies Act 1987 (WA), s 27A, s 27B, s 60, s 81, s 81A, s 81B, s 82, s 85
Residential Tenancies Regulations 1989 (WA), sch 4
Transfer of Land Act 1893 (WA), s 68(1A)

Result:

Declaration that residential tenancy terminated and orders made for vacant possession
Counterclaim dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	A J Aristei
First Defendant	:	No appearance
Second Defendants	:	D Chandler
Plaintiff by counterclaim	:	D Chandler
Second Plaintiff by counterclaim	:	D Chandler
Defendant by counterclaim	:	A J Aristei
Second Defendant by counterclaim	:	No appearance

Solicitors:

Plaintiff	:	Solomon Hollett Lawyers
First Defendant	:	Tottle Partners
Second Defendants	:	Sparke Helmore Lawyers
Plaintiff by counterclaim	:	Sparke Helmore Lawyers
Second Plaintiff by counterclaim	:	Sparke Helmore Lawyers
Defendant by counterclaim	:	Solomon Hollett Lawyers
Second Defendant by counterclaim	:	Tottle Partners

Cases referred to in decision(s):

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Australia and New Zealand Banking Group Ltd v Kavia Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2013] NSWSC 1532
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Gerraty v McGavin [1914] HCA 23; (1914) 18 CLR 152
Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407
Mercantile Credits Ltd v Shell Co of Australia Ltd [1976] HCA 9; (1976) 136 CLR 326
Mohammadi v Bethune [2018] WASCA 98
O'Neill v Commonwealth Bank of Australia [2013] NSWSC 836
Osborne Park Co-Op v Wilden Pty Ltd (1989) 2 WAR 77
Pearson v Connor [2024] WASCA 49
Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16
Phillips Fox (A Firm) v Westgold Resources NL [2000] WASCA 85
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Soussa v Thomas [2021] WASC 172
SZTAL v Minister for Immigration & Border Protection [2017] HCA 34; (2017) 262 CLR 362
United Starr-Bowkett Co-operative Building Society v Clyne [1968] 1 NSWR 134

HILL J:

The property that is the subject of these proceedings formed part of the failed Sterling New Life Lease scheme. These proceedings essentially concern who is entitled to possession of 4B Wayside Court, Ravenswood (Unit 4B) out of the plaintiff (Taboref) and second defendants (Mr and Mrs Taylor).
The first defendant, who is the registered proprietor of Unit 4B, took no active part in the proceedings. Taboref, as mortgagee, says that it is entitled to vacant possession of Unit 4B, following the default of the first defendant of its obligations under a loan agreement and mortgage. In contrast, Mr and Mrs Taylor say that they have a valid residential tenancy agreement over Unit 4B and Taboref is not entitled to vacant possession of this property.
For the reasons that follow, it is my view that:
(a)on a proper construction of Mr and Mrs Taylor's residential tenancy agreement and the options for renewal, the residential tenancy was for a period of 40 years;
(b)Taboref did not take its interest in 4 Wayside Court, Ravenswood subject to the interests of Mr and Mrs Taylor;
(c)Mr and Mrs Taylor's residential tenancy agreement over Unit 4B has been validly terminated by Taboref;
(d)Taboref is entitled to vacant possession of Unit 4B; and
(e)there are no 'special circumstances', which would justify granting a tenancy under s 81(3) of the Residential Tenancies Act 1987 (WA) (Act).

Factual background

Most of the factual allegations are not in dispute and can be summarised as follows.
The first defendant is the registered proprietor of 4 Wayside Court, Ravenswood, being Lot 2149 on Deposited Plan 68572, Volume 2272 Folio 174 (Property). After the acquisition of the Property, one building was constructed on the Property which was designed for lease as two separate residences: 4A and 4B Wayside Court, Ravenswood.
Mr and Mrs Taylor have been married for more than 50 years. At the time of the trial, Mr Taylor was 77 years old and Mrs Taylor was 69 years old.
Mrs Taylor first became aware of the Sterling New Life Lease scheme in about January or February 2016. At the time, this scheme was advertised as an alternative to a retirement village and would provide somewhere Mr and Mrs Taylor could live for the rest of their lives.[1]
[1] ts 39.
On 15 February 2017, Mr and Mrs Taylor attended the offices of Rental Management Australia (RMA), met with Ryan Jones, and signed a residential tenancy agreement with the first defendant to lease Unit 4B (Lease),[2] as well as a bundle of other documents.[3] The Lease had a typewritten date of 17 February. The number '17' has been crossed out and replaced with a handwritten number '15' to reflect the date it was actually signed.[4]
[2] Exhibit 1, Tab 9.
[3] ts 28 - 29.
[4] ts 29.
On 14 February 2017, prior to signing the Lease, Mr and Mrs Taylor attended their bank to arrange the transfer of funds to three different bank accounts that had been nominated by Mr Jones.[5] The transfers of these funds occurred on 16 February 2017.[6]
[5] ts 29.
[6] Exhibit 1, Tabs 6 - 8.
It was an express term of the Lease that:
(a)the first defendant agreed to lease Unit 4B and an area outside that portion of the Premises (Common Area) to Mr and Mrs Taylor for a fixed term from 17 February 2017 until 16 February 2022;[7]
(b)the first defendant granted Mr and Mrs Taylor seven separate options to lease Unit 4B for five-year fixed term leases from 17 February 2022 until 16 February 2057. The first option was required to be exercised on or before 4.00 pm on 16 February 2022;[8]
(c)rent of $291.92 was payable weekly in advance. In the clause specifying the method by which rent must be paid, the Lease stated 'refer to the Payment Direction Deed'. Rent was required to be paid on the 21st of each month;[9]
(d)the Lease would end on the earliest of the death of the last survivor of Mr and Mrs Taylor or the date on which the Lease was validly terminated, either pursuant to the Lease or the Act; and
(e)Mr and Mrs Taylor had a non-exclusive right to use the Common Area in common with the lessee of 4A Wayside Court, Ravenswood.[10]
[7] Exhibit 1, Tab 9, Part D, cl 5.1.
[8] Exhibit 1, Tab 4.
[9] Exhibit 1, Tab 9, page 95.
[10] Exhibit 1, Tab 9, Part D, cl 5.2.
On 15 February 2017, the first defendant, Mr and Mrs Taylor, and Sterling Corporate Services Pty Ltd (SCS) entered into a payment direction deed (Payment Direction Deed).[11] The deed was conditional on Mr and Mrs Taylor:[12]
(a)paying an Application Fee (8.8% of the Investment Amount of $159,390[13]) to the SCS Nominated Bank Account;
(b)paying the Investment Amount less the Application Fee to the Product Disclosure Statement Nominated Bank Account; and
(c)making an application to invest the Investment Amount less the Application Fee in Units within 10 business days.
[11] Exhibit 1, Tab 2.
[12] Exhibit 1, Tab 2, cl 2.1(a).
[13] See Exhibit 1, Tab 2, Reference Schedule.
Any distributions from the Units were to be used to pay any rent that was due and not paid, and then any rent for the next two weeks and each subsequent two week period in advance.[14]
[14] Exhibit 1, Tab 2, cl 2.5(b).
It was an express term of the Payment Direction Deed that despite any provision to the contrary in the Payment Direction Deed or the Lease, Mr and Mrs Taylor's liability to pay rent under the Lease was limited to payments made under the distribution from or redemption of the Units. Mr and Mrs Taylor were not liable for any shortfall.[15]
[15] Exhibit 1, Tab 2, cl 2.7.
On 15 February 2017, Mr and Mrs Taylor applied for Units in the Sterling Income Trust (Trust).[16] On or about 16 February 2017, Units were issued to them. On the same date, Mr and Mrs Taylor transferred $110,000, which was their life savings,[17] to SCS.[18]
[16] Exhibit 1, Tab 3.
[17] ts 38.
[18] Exhibit 1, Tabs 6 - 8.
On 15 February 2017, Mr and Mrs Taylor signed seven separate options to lease Unit 4B for fixed five-year terms commencing 17 February 2022 through to 17 February 2057 (Options). Some of the Options were originally dated 17 February 2017 but were amended in handwriting to reflect the date they were signed, namely, 15 February 2017.[19]
[19] Exhibit 1, Tab 4, pages 1, 3; ts 33 - 34.
At the time Mr and Mrs Taylor signed the Options, they did not receive any explanation as to what these documents were but were simply told to sign them.[20] Prior to attending the meeting, Mrs Taylor understood, from what they had been told by Mr Jones, that they were obtaining a 40‑year lease over Unit 4B.[21]
[20] ts 41.
[21] ts 45.
On 17 February 2017, Mr and Mrs Taylor moved into Unit 4B. They were provided with a Form 1AC (as required by s 27B of the Act), as well as a copy of their Lease.[22] Since that date, they have remained in possession of Unit 4B. Over this time, they have paid all utilities and undertaken a number of improvements to Unit 4B.[23]
[22] Exhibit 1, Tab 9.
[23] ts 27 (Mrs Taylor); ts 50 (Mr Taylor).
On 31 August 2017, Taboref and first defendant entered into a loan agreement (Loan Agreement).[24] Mr Penn, a director of Taboref, explained that he had learnt of the loans with the Sterling New Life Lease scheme through a friend. In his view, it was an attractive arrangement because interest was paid at 12% per annum in advance and Taboref would have a first registered mortgage over the Property.[25] At the time Taboref entered into the Loan Agreement, Mr Penn was aware the Property was already owned by the first defendant and that the loan was not being used to purchase the Property.[26] Mr Penn instructed solicitors to act for him in relation to the transaction. His solicitors undertook a search of the title prior to entry into the Loan Agreement and mortgage.[27] Mr Penn's solicitors did not inform him of any interests or caveats that would impact his ability to enforce the mortgage if required.[28] It is not in dispute that neither the Lease nor the Options were, at that time, registered or otherwise noted on the title of the Property.
[24] Exhibit 1, Tab 11.
[25] ts 11.
[26] ts 13.
[27] Exhibit 1, Tab 10.
[28] ts 15.
Under the express terms of the Loan Agreement:
(a)Taboref agreed to advance $300,000 (Principal Sum) to the first defendant within five business days of entry into the Loan Agreement (cl 2.1);
(b)the first defendant agreed to pay interest at the rate of 18% per annum but, where the first defendant was not otherwise in default, Taboref would accept interest at the rate of 12% per annum if paid in advance by instalments of $18,000 on the date of advance, and $18,000 six months after the date of advance (cl 3);
(c)the first defendant agreed to repay the Principal Sum within 12 months (cl 4);
(d)the first defendant would secure its obligations under the Loan Agreement by granting a first registered mortgage over the Property to Taboref (cl 5.1); and
(e)if an Event of Default occurred, all amounts payable under the Loan Agreement became immediately due and payable on demand, including all costs and expenses (cl 8.2).
On 31 August 2017, the first defendant granted Taboref a first registered mortgage over the Property (Mortgage).[29] It was an express term of the Mortgage that:
(a)an Event of Default would occur if the first defendant did not pay all amounts owed to Taboref under the Loan Agreement when due (cl 8.1(a)), there was an event of default under any document related to the Mortgage or Loan Agreement (cl 8.1(d)), or there was a material change in the first defendant's financial condition (cl 8.1(e)); and
(b)if an Event of Default occurred, all amounts owed by the first defendant to Taboref would become due and payable on demand, Taboref would be entitled to exercise all of its powers under the Mortgage or at law, and the first defendant's rights to deal with the Property would cease (cl 8.2). These powers included taking possession of and selling the Property (cls 9.5, 9.8(a), 11.1).
[29] Exhibit 1, Tab 12.
On 5 September 2017, Taboref advanced $300,000 to the first defendant under the Loan Agreement and the first defendant paid $18,000 to Taboref, being the payment of interest in advance.[30] On 6 September 2017, the mortgage was registered with Landgate.[31]
[30] Exhibit 2, Tab 73.
[31] Exhibit 1, Tab 13.
The loan was required to be repaid in full by 5 September 2018. This did not occur. On 18 September 2018, Taboref and the first defendant entered into a deed to vary the Loan Agreement (Deed of Variation).[32] Under the Deed of Variation, the parties agreed to extend the date of repayment until 5 March 2019 (cl 2).
[32] Exhibit 1, Tab 14.
Between August and November 2018, Mr and Mrs Taylor received correspondence from Sterling First Projects Pty Ltd advising that the Trust would not continue and would be closed. The letters advised that work was being done on a proposal to allow Mr and Mrs Taylor to continue residing in Unit 4B, subject to the terms of the Lease, and ensure rent would continue to be paid for Unit 4B.[33]
[33] Exhibit 3.
On 5 March 2019, the first defendant failed to repay the Principal Sum in full to Taboref.
On 14 March 2019, Taboref issued a notice of demand to the first defendant requiring payment of the Principal Sum and all other amounts within 14 days.[34]
[34] Exhibit 1, Tab 17.
On 30 April 2019, Taboref and first defendant entered into a Deed of Forbearance (Forbearance Deed).[35] It was an express term of the Forbearance Deed that:
(a)the first defendant acknowledged it was indebted to Taboref in the sum of $314,501.35 as at 30 April 2019 and was in default under the Loan Agreement and the Mortgage (Recital A, cl 2);
(b)the first defendant consented to judgment being entered against it in any proceedings commenced by Taboref in connection with this debt (cl 2(e));
(c)the first defendant agreed to pay to Taboref $11,739.99 on or before 30 April 2019, interest of $3,000 per calendar month in advance with the first payment on 1 May 2019, and the Principal Sum on or before 30 September 2019 (cl 4.1);
(d)an Event of Default would occur if the first defendant failed to comply with the terms of the Forbearance Deed (cl 6.1); and
(e)if an Event of Default occurred, Taboref would be entitled to exercise any of its rights under the Loan Agreement and the Mortgage without further notice (cl 6.2).
[35] Exhibit 1, Tab 18.
On or about 1 May 2019, the first defendant failed to make any payment to Taboref. As a result, on this date, there was an Event of Default under the Forbearance Deed.
On 6 September 2019, Martin Jones and Wayne Rushton were appointed as liquidators of the first defendant. Taboref received notice of their appointment on or about 10 September 2019.[36]
[36] Exhibit 1, Tab 20.
On 9 October 2019, the solicitors for Taboref gave notice to the first defendant of its intention to take possession of and sell the Property as mortgagee in possession.[37]
[37] Exhibit 1, Tab 21.
On 4 November 2019:
(a)Taboref gave Mr and Mrs Taylor a written notice to vacate Unit 4B (relying on s 60(e) of the Act and pursuant to s 81A of the Act) and deliver up vacant possession on 11 December 2019;[38] and
(b)Taboref gave Mr and Mrs Taylor a written notice, pursuant to s 81B(2)(b) of the Act, that Unit 4B would be the subject of proceedings not less than 30 days prior to the commencement of the proceedings.[39]
[38] Exhibit 1, Tab 22.
[39] Exhibit 1, Tab 23.
Mr and Mrs Taylor accepted they received both written notices but have not vacated Unit 4B. They also accepted that they have not paid any amount or rent to Taboref.[40]
[40] ts 36 ‑ 37 (Mrs Taylor); ts 56 (Mr Taylor).
On 16 December 2019, Taboref commenced these proceedings.

The pleadings

Shortly prior to the commencement of the trial, the parties amended their pleadings to significantly narrow the issues in dispute. The final pleadings relied upon at trial were the second further re-amended statement of claim (statement of claim), the second defendants' fourth further amended defence and counterclaim (defence and counterclaim), and the plaintiff's third amended reply and defence to counterclaim (reply and defence to counterclaim).

Statement of claim

Taboref says that, on the express terms of the Mortgage, on the first defendant's default under the Forbearance Deed, it became entitled to take possession of the Property and sell it.[41]
[41] Statement of claim [17].
Taboref says that the Lease was terminated on one of four dates, being:[42]
(a)the date on which it became entitled to possession of Unit 4B, pursuant to s 60(1)(d) of the Act, namely, 6 September 2019;
(b)the date on which it notified the first defendant of its intention to take possession of Unit 4B, pursuant to s 60(1)(e) of the Act, namely, 9 October 2019;
(c)the date on which Mr and Mrs Taylor were required to deliver up vacant possession, namely, 11 December 2019; or
(d)the date on which Taboref notified the parties it was seeking an order for recovery of possession of Unit 4B, namely, the date of service of the writ of summons.
[42] Statement of claim [20].
Taboref sought a declaration that the Lease has been validly terminated and an order for vacant possession of Unit 4B.

Defence and counterclaim

At trial, some of the matters in the defence (such as the question of whether there were implied terms of the Lease) were not pressed. For this reason, I have not summarised nor addressed these issues in these reasons.
Mr and Mrs Taylor say that the Lease of Unit 4B comprised both the residential tenancy agreement as well as the Payment Direction Deed.[43] They plead that by reason of the Payment Direction Deed, on Mr and Mrs Taylor applying for and being issued Units in the Trust and paying the Investment Amount to SCS, they were not liable to pay rent under the Lease.[44] On this basis, Mr and Mrs Taylor deny they were obliged to pay rent under the Lease or that their failure to pay rent is a breach of the Lease.
[43] Defence and counterclaim [19(b)].
[44] Defence and counterclaim [31].

Mr and Mrs Taylor say they are entitled to possession of Unit 4B in priority to any rights Taboref has under the terms of the Mortgage.
By way of counterclaim, Mr and Mrs Taylor seek a series of declarations. The declarations concern whether Taboref's interest in the Property is subject to their interests in the Lease (and the Options), and whether any obligation to pay rent was discharged by reason of the Payment Direction Deed. Mr and Mrs Taylor seek an order for the first defendant to deliver up executed leases in registrable form for each of the Options.
In the alternative, Mr and Mrs Taylor seek an order under s 81 of the Act for the vesting of a tenancy in favour of the second defendants over Unit 4B. They rely on their possession of the Premises under the Lease or as tenants holding over after termination of the Lease. Mr and Mrs Taylor contend that their respective ages, income and lack of eligibility for rental housing support constitute special circumstances, as required by s 81(3) of the Act.

Reply and defence to counterclaim

In reply, Taboref pleads that:
(a)the Lease is not valid or enforceable;[45]
(b)the Payment Direction Deed does not exclude, modify or restrict the requirement to pay rent under the Lease and is contrary to s 27A and s 82 of the Act;[46]
(c)the Options are not valid as they were created prior to execution of the Lease, alternatively, were not capable of being exercised;[47]
(d)Mr and Mrs Taylor's failure to pay rent was a breach, alternatively, a repudiation of the Lease, which has been accepted and that Taboref has validly terminated the Lease;[48]
(e)the first defendant's proprietorship of the Property was held subject to the Mortgage when it was registered on 6 September 2017;[49] and
(f)the Leases are invalid or unenforceable and do not constitute unregistered leases or agreements for lease under s 68(1A) of the Transfer of Land Act 1893 (WA) (TLA), alternatively, the Options are invalid against the Mortgage as a subsequent registered interest.[50]
[45] Reply and defence to counterclaim [4(b)].
[46] Reply and defence to counterclaim [4(a)(iii)].
[47] Reply and defence to counterclaim [4(a)(i)].
[48] Reply and defence to counterclaim [7(c)] - [7(d)].
[49] Reply and defence to counterclaim [14(c)].
[50] Reply and defence to counterclaim [14(d)] - [14(e)].
Taboref denies Mr and Mrs Taylor are entitled to an order under s 81 of the Act for three reasons. First, Taboref denies Mr and Mrs Taylor were tenants under a residential tenancy agreement or are holding over after termination of the Lease. Second, Taboref says that Mr and Mrs Taylor did not apply for an order within a reasonable time after being given notice of the proceedings. Third, Taboref says the matters relied upon by Mr and Mrs Taylor do not constitute special circumstances under s 81(3) of the Act.[51]
[51] Reply and defence to counterclaim [26], [28].

Has the Lease been validly terminated?

Taboref relies on two alternative grounds to support its contention that the Lease has been validly terminated under s 60 of the Act. First, it says that it is a mortgagee who has taken possession pursuant to the terms of the Mortgage (s 60(1)(e), Act). Second, it says that it is a person with superior title to that of Mr and Mrs Taylor and has become entitled to possession (s 60(1)(d), Act).
Mr and Mrs Taylor deny the Lease has been terminated. They submit that Taboref's interest in the Property is subject to their interests under the Lease and say that in order for Taboref to be entitled to vacant possession of Unit 4B, they must be in breach of the Lease. They deny that they have breached the Lease. In support of this contention, Mr and Mrs Taylor rely on s 68(1A) of the TLA, which provides a statutory exception to indefeasibility of title for, among other interests, 'any prior unregistered lease or agreement for lease or for letting for a term not exceeding five years to a tenant in actual possession'. This section contains a proviso that any option to renew any such unregistered lease or agreement is not valid against the party who has the benefit of a subsequent registered dealing.
The purpose of the proviso in s 68(1A) of the TLA is to ensure that the title of a person with a subsequent registered dealing is indefeasible against an option of renewal in a prior lease of not more than five years' duration, unless the lease is registered or protected by caveat.[52] As a result, a person who has an interest in land under a subsequent registered dealing may only be impacted by any unregistered lease for a maximum term of less than 5 years.[53]
[52] Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407, 418 (Mason CJ, Dawson and McHugh JJ).
[53] Mercantile Credits Ltd v Shell Co of Australia Ltd [1976] HCA 9; (1976) 136 CLR 326, 339 (Barwick CJ) (referring to the equivalent South Australian legislation).
In considering what is now the proviso in s 68(1A) of the Act, Franklyn J in Osborne Park Co-Op v Wilden Pty Ltd held that:[54]
What is invalid under the section as against the subsequent registered proprietor is the option of renewal. Whether such an option be viewed as an irrevocable offer by the lessor capable of acceptance by the lessee up until the time specified in the lease, or as a conditional contract, that is a contract that the lessor will grant a new lease subject to a condition subsequent to be performed by the lessee, it creates a proprietary right enforceable against the lessor. It is that right which is invalidated by s 68 in the circumstances there provided for and, as a consequence in such a case in my opinion no such proprietary right exist as from the date of acquisition of title by the subsequent registered proprietor.
[54] Osborne Park Co-Op v Wilden Pty Ltd (1989) 2 WAR 77, 83 - 84.
Where a lease contains an option for renewal, until the option is exercised, no interest in the land is created. This is because something further is required to be done by the lessee in order to create the interest and it is not possible to determine whether or not a new lease will come into existence until the option is exercised.[55]
[55] Gerraty v McGavin [1914] HCA 23; (1914) 18 CLR 152, 163 - 164.
The exercise of an option to renew is not an extension of the existing lease but the creation of a new lease of the same property on similar or identical terms. This is because an option is an irrevocable offer which does not create a contract unless and until the offer is accepted by the exercise of the option.[56]
[56] Gerraty v McGavin 163 - 164 (Isaacs J).
In this case, the Lease was entered into prior to the Mortgage. At the time the Mortgage was registered, the Lease was not registered or protected by caveat.
If, on its proper construction, the Lease is for a term not exceeding five years, by reason of s 68(1A) of the TLA, Taboref's subsequent registered interest in the Property will be subject to Mr and Mrs Taylor's prior unregistered Lease. In that case, Taboref would not be bound by any option for renewal of the Lease. However, if, on its proper construction, the Lease is for a term exceeding five years, s 68(1A) of the TLA has no application and Taboref's interest in the Property will not be subject to the Lease.
The question as to what the term of the Lease is turns on the proper construction of both the Lease and the Options.

Proper construction of the Lease

Section 27A of the Act requires a residential tenancy agreement to be in the prescribed form. The prescribed form is sch 4 Form 1AA of the Residential Tenancies Regulations 1989 (WA) (Regulations).
Form 1AA of the Regulations requires an agreement for a residential tenancy to contain three parts.[57] Part A requires certain details to be completed, including the names of the lessor(s) and tenant(s); the name of the lessor's property manager (if any); the term of the agreement; how notices are to be given; the address of the residential premises; the maximum number of occupants; details of the rent payable, including the amount and method by which rent must be paid; details of the security bond; how rent increases are to be calculated; the party responsible for the payment of water and other utilities; whether any strata by-laws apply; whether pets may be kept at the premises; the rights of tenants to assign or sub-let the premises; the rights of tenants in relation to fixtures; and details of ingoing and final property condition reports.
[57] As at 29 July 2024, Form 1AA has been removed from the Regulations. This discussion applies to the law as it was at the date of entry into the Lease.
Part B contains standard terms that apply to all residential tenancy agreements. These standard terms include the obligation to pay rent.
Part C allows for additional terms to be included in the residential tenancy agreement. Additional terms may only be included if they do not conflict with the provisions of the Act, Regulations, any other law, and the standard terms of the agreement (those set out in Part B). Where additional terms are included, these terms are binding on the parties unless found to be unlawful.
In this case, the Lease complied with Form 1AA of the Regulations and, accordingly, s 27A of the Act.
In Part A, the Lease provided that:
(a) the Lease was a fixed-term lease which commenced on 17 February 2017 and ended on 16 February 2022;
(b) rent of $291.92 was payable weekly in advance starting on 17 February 2017; and
(c) the method by which the rent was required to be paid was stated to be:[58]
Refer to the Payment Direction Deed
For the first month of the tenancy, from the commencement date to the last day of that month, payable on the twenty first of that month. For the second and subsequent months of the tenancy, from the first of that month to the last day of that month, payable on the twenty first of that month.
For the last month of the tenancy, from the first of that month to the termination date of the lease, payable on the twenty first of that month.
[58] Exhibit 1, Tab 9, page 95.
The standard terms of the Lease set out in Part B relevantly included the following:
(a)the tenant must pay rent on time or the lessor may issue a notice of termination, and if the rent is still not paid in full, the lessor may take action through the court to evict the tenant (cl 3);
(b)where the agreement allows for a reduced rent or a rebate, refund or other benefit if the tenant does not breach the agreement, the tenant is entitled to this (cl 7);
(c)it is an offence to contract out of any provision of the Act (cl 36); and
(d)the Lease can only be terminated in certain circumstances (cl 37).
The standard terms also specifically refer to the Act as providing other grounds on which the Lease can be terminated (cl 42).
The Additional Terms in Part C of the Lease included:
(a)an agreement by the tenant to pay the rent punctually pursuant to the provisions of Part A, on the dates for payment, without any deductions or legal or equitable set-offs (cl 2.1);[59] and
(b) if the lease was a fixed-term tenancy agreement, rent would be increased annually by 2% (cl 2.4).[60]
[59] Exhibit 1, Tab 9, page 102.
[60] Exhibit 1, Tab 9, pages 102 - 103.
Part C of the Lease lists eight Annexures as forming part of the Lease. These include, relevantly, 'Part D - Special Conditions of the Lease' and Annexure 3, the 'Option to Renew Lease'. Part C of the Lease does not include or refer to the Payment Direction Deed.
The material terms in 'Part D ‑ Special Conditions of the Lease' are as follows:[61]
(a)the special conditions in Part D of the Lease are incorporated in and form part of the Lease (cl 2(a));
(b)in the event of any inconsistency between a standard term (being a provision of Part A, Part B or Part C of the Lease) and a special condition in Part D, the special condition prevails to the extent of the inconsistency (cl 2(b)); and
(c)despite any provision to the contrary in the Lease, the term of the Lease will end on the earliest of:
(i)where the tenant is more than one person, the date of death of the last survivor; and
(ii)the date on which the term ends upon a lawful termination of the Lease, either pursuant to the Lease or the Act (cl 3).
[61] Exhibit 1, Tab 9, pages 110 - 113.
The special conditions in Part D of the Lease include an acknowledgement by Mr and Mrs Taylor that they have been given the opportunity to seek independent legal and financial advice.[62]
[62] Exhibit 1, Tab 9, page 113.
The copy of the Lease which was tendered at trial did not include Annexure 3 or Forms 2 - 5, which are stated to form part of the Lease. However, it was not in issue at trial that the reference in Annexure 3, the 'Option to Renew Lease', was to the seven Options signed by Mr and Mrs Taylor on 15 February 2017. As a result, I accept and find that these Options formed part of the Lease.
Each of the Options is titled 'Annexure (3) Option to Renew (Special Condition) Part C Residential Property Lease'. The Options are not forms that are prescribed by the Act or Regulations. On their face, the Options appear to be standard forms approved by the Real Estate Institute of Western Australia (REIWA).
The terms of each of the Options are identical (except the date on which each must be executed and the period of the additional term). The first of the Options provides that:[63]
(a)If the tenant has (a) not committed a breach of this Lease that has resulted in the Lessor or Agent serving a breach Notice on the Tenant, and (b) gives the agent a written notice of exercise of option to the agent by '4PM on 16 February 2022 (Option Expiry Time)' then the Lessor grants the Tenant an additional term of five years being 17 February 2022 to 16 February 2027 (which is defined as the Additional Term), which commences immediately on the expiration of the term set out in Part A of the Lease (which is defined as Term).
(b)During the Additional Term, the rent will be 'refer to existing lease agreement per week but otherwise the conditions of the Lease will apply except for this Option'. The amount of the rent is set out in cl 2.1 of the Lease.[64]
(c)If the Option is not exercised by the Tenant by written notice before the Option Expiry Time, the Option to Renew will not apply. The clause provides that time is of the essence.
[63] Exhibit 1, Tab 4, page 60.
[64] Exhibit 1, Tab 9, Part A, page 95; Exhibit 1, Tab 9, Part C, cl 2.1.
Forms which are titled 'Notices of Exercise of the Option to Renew' were also tendered at trial (Notices). Each Notice is identical except for the period of their respective additional term. Again, the Notices are not forms prescribed by the Act or Regulations but appear to be standard forms approved by REIWA. Each Notice gives notice to RMA, the first defendant's property manager, of the exercise of the option to renew. Each Notice was signed by Mr and Mrs Taylor on 15 February 2017.[65]
[65] Exhibit 1, Tab 4, pages 62, 66, 70, 74, 78, 82, 86.
Where a tenant wishes to exercise an option to renew a lease, they must do so in strict compliance with its terms.[66]
[66] Soussa v Thomas [2021] WASC 172 [92] (Smith J), citing Phillips Fox (A Firm) v Westgold Resources NL [2000] WASCA 85 [60] - [63].
Taboref submitted that none of the Notices validly exercised the Options because the first condition could not have been satisfied on 15 February 2017. Taboref submitted this condition required Mr and Mrs Taylor to not be in breach of the Lease during its term and contended that they were only entitled to exercise the Options if they duly observed and performed all their obligations during the original term of the Lease (and any subsequent leases).
I do not accept this submission. On its face, each Option is not pre-conditioned by a requirement that Mr and Mrs Taylor perform their obligations under the Lease during its term. The first pre-condition is simply that Mr and Mrs Taylor must not have committed a breach of the Lease that resulted in the service of a breach notice by their lessor or agent. On the afternoon of 15 February 2017, at the time Mr and Mrs Taylor exercised each Option:
(a)they had executed the Lease and the Lease commenced. This was the case even though they had not yet entered into possession of Unit 4B;[67]
(b)they were not then in breach of the terms of the Lease and had not been served with any breach notice by the first defendant; and
(c)each of the Notices was given well before the time specified in each Option.
[67] Property Law Act 1969 (WA), s 74(2).
Counsel for Mr and Mrs Taylor submitted that on a proper construction of the Lease and Options, they should be considered to be a singular residential tenancy agreement.[68] I accept this submission.
[68] ts 85.
In my view, on the exercise of each Option, the offer by the first defendant to lease Unit 4B to Mr and Mrs Taylor for each subsequent term was accepted. Nothing else was required to be done to create a valid and enforceable agreement between these parties. That is, as from 15 February 2017, Mr and Mrs Taylor entered into the Lease and seven separate agreements to lease Unit 4B (which were enforceable against the first defendant) for a period totalling 40 years. In these circumstances, it is my view that, on the proper construction of the Lease and the Options, Mr and Mrs Taylor had an agreement for lease of Unit 4B for a total of 40 years.
The consequence of this conclusion is that the exception to indefeasibility of title in s 68(1A) of the TLA does not apply. In order for the Lease and the Options to have priority over the subsequent registered interest of Taboref in the Property, it was necessary for the Lease (and the Options and Notices) to be registered as an encumbrance on the title of the Property, prior to the registration of the Mortgage (or otherwise protected by caveat). This did not occur.
As a result, I accept and find that Taboref, as the registered mortgagee, has superior title to that of Mr and Mrs Taylor in the Property and Unit 4B.

Termination of the Lease

Pursuant to s 60 of the Act, a residential tenancy agreement shall not be terminated unless it falls within one of the exceptions in that section. These exceptions, relevantly, include:
(a)where a person having superior title to that of the lessor becomes entitled to possession of the premises (s 60(1)(d), Act); and
(b)where a mortgagee in respect of the premises takes possession pursuant to the terms of the mortgage (s 60(1)(e), the Act).
On the evidence before me, I accept and find that:
(a)the failure by the first defendant to pay the sums required under the Forbearance Deed on 1 May 2019 to Taboref was an Event of Default under the Forbearance Deed;
(b)the Forbearance Deed is a related document under the terms of the Mortgage. As such, the Event of Default under the Forbearance Deed was an Event of Default under the Mortgage; and
(c)from 1 May 2019, Taboref was entitled to exercise its powers under the Mortgage.
I also accept and find that the appointment of liquidators to the first defendant on 6 September 2019 was a material adverse change in its financial condition and also an Event of Default under the Mortgage. On this date, Taboref was entitled to exercise its powers under the Mortgage. These powers included the right to take possession of the Property, including Unit 4B.
On this basis, I accept that from at least 6 September 2019, Taboref, being a person with superior title to that of Mr and Mrs Taylor, became entitled to possession of the Property (and Unit 4B). I find that on 6 September 2019, the Lease was terminated pursuant to s 60(1)(d) of the Act.
In the event that I am wrong in this conclusion, I also turn to consider the alternative basis relied upon by Taboref; namely, s 60(1)(e) of the Act.

It is not in dispute that on 9 October 2019, Taboref gave notice to the first defendant of its intention to take possession of and sell the Property as a mortgagee in possession. The question is whether this notice was effective to terminate the Lease pursuant to s 60(1)(e) of the Act.
Counsel for Mr and Mrs Taylor denied this notice was effective to terminate the Lease. This was because at that time, they were legal tenants entitled to possession of Unit 4B as at the date of entry into the Mortgage, as well as the date of the Event of Default. In their submission, Taboref did not, at that date, have any greater interest in the Property than that of the first defendant. On this basis, they contended Taboref was not entitled to vacant possession of Unit 4B unless there had been a breach of the Lease by Mr and Mrs Taylor, which they denied was the case.
In support of this submission, counsel for Mr and Mrs Taylor placed significant reliance on the decision of the New South Wales Court of Appeal in United Starr-Bowkett Co-operative Building Society (No 11) Ltd v Clyne.[69] However, in my view, this decision is of limited assistance for three reasons. First, the relevant legislation in New South Wales (s 62 of the Landlord and Tenant (Amendment) Act 1948 (NSW)) did not specifically address the position of a mortgagee in possession. As was noted by Sugerman JA, the rights of a registered mortgagee to recover possession of land are statutory.[70] Second, in that case, the tenants had leases of terms not exceeding three years and were entitled to the protection of the New South Wales equivalent of s 68(1A) of the TLA (s 42 of the Real Property Act 1900 (NSW)). Third, the mortgagee had not given any notice to the tenants terminating their leases, which was required before possession of the property could be recovered.[71]
[69] United Starr-Bowkett Co-operative Building Society v Clyne [1968] 1 NSWR 134.
[70] United Starr-Bowkett Co-operative Building Society v Clyne 142 - 143.
[71] United Starr-Bowkett Co-operative Building Society v Clyne 144.
In this case, the Act specifically addresses the position of a mortgagee in possession and provides that any existing tenancy agreement in relation to a premises is terminated once the mortgagee has taken possession of the premises pursuant to the mortgage. There is no requirement in the Act that there also be a breach of the Lease. Given my finding that the Lease was for a period of 40 years, Taboref did not take its interest in the Property subject to the Lease. It is and was entitled to exercise its rights under the Mortgage, which it did on 9 October 2019. On taking possession of the Property pursuant to the Mortgage on that date, the Lease was terminated pursuant to s 60(1)(e) of the Act (if it had not already been terminated by 6 September 2019).
In summary, I find that the Lease was terminated on 6 September 2019, alternatively, on 9 October 2019.
In case I am wrong in my conclusions as to the date of the termination of the Lease, I address briefly the other dates relied upon by Taboref. In my view, neither of the events relied upon by Taboref, namely, the date on which vacant possession was required to be given (11 December 2019) nor the date of service of the writ of summons in these proceedings, are events which give rise to a statutory right of termination of the Lease. Both of these events rely on the prior notices given by Taboref being valid. If the prior notices are not valid, termination on the basis of these subsequent events occurring is not valid either.
An issue was raised on both Mr and Mrs Taylor's counterclaim and the reply as to whether the Lease was invalid or unenforceable and whether Mr and Mrs Taylor were in breach of the obligation to pay rent under the Lease. Given my conclusion that the Lease has been terminated by Taboref pursuant to either s 60(1)(d) or s 60(1)(e) of the Act, it is not necessary for me to address these issues and, for the following reasons, I decline to do so. First, Taboref has not relied on any breach of the obligation to pay rent nor served any notice on Mr and Mrs Taylor on which reliance is placed on this failure as a basis to terminate the Lease. Second, no claim is made in these proceedings for any payment of rent. In this regard, the claim in these proceedings can be distinguished from that in Soussa v Thomas.

Is Taboref entitled to vacant possession of Unit 4B?

Where a residential tenancy has been terminated under s 60(1)(d) of the Act, the person with superior title to the premises is not entitled to take possession unless notice has been given to the person in possession of the premises of the intention to commence proceedings. This notice must be in a form approved by the Minister and must be given not less than 30 days prior to the commencement of proceedings (s 81B(2)(b) of the Act).
On 4 November 2019, Taboref gave a notice to Mr and Mrs Taylor.[72] The notice:
(a)is in the form approved by the Minister, namely, Form 17; and
(b)informed them of Taboref's intention to commence proceedings in the Supreme Court in 30 days or more.
[72] Exhibit 1, Tab 23.
These proceedings were commenced in the Supreme Court on 16 December 2019, which was more than 30 days after the notice was given.
In this case, I am satisfied that Taboref is a party with superior title to the Property as compared to Mr and Mrs Taylor, that they have given notice in the approved form to Mr and Mrs Taylor of their intention to commence proceedings, and that these proceedings were commenced more than 30 days after this notice was provided.
On this basis, I accept and find that Taboref is entitled to vacant possession of Unit 4B as a person with superior title to Mr and Mrs Taylor.
In case I am wrong in this conclusion, I turn to consider the alternative grounds of termination; namely, s 60(1)(e) of the Act.
Where a residential tenancy has been terminated under s 60(1)(e) of the Act, the mortgagee is not entitled to take possession unless the mortgagee 'after becoming entitled to take possession, gives the tenant a notice to vacate the premises' (s 81A(2) of the Act). The notice is required to be in a form approved by the Minister and must include a specific date, not less than 30 days after the date on which notice is given (s 81A(3) of the Act).
Section 85 of the Act sets out the specific requirements for service of any notices given pursuant to the Act. Specifically, requires that service be given personally, by post addressed to the person at any place specified by the person as a place where their mail be directed, or with the consent of the person, by prescribed electronic means.
On 4 November 2019, Taboref gave a notice to vacate to Mr and Mrs Taylor.[73] The notice:
(a)is in the form approved by the Minister, namely Form 14;
(b)specified a date of 11 December 2019 on which vacant possession is required to be given, which was a date not less than 30 days after the date on which notice was given to Mr and Mrs Taylor; and
(c)provided a reason for the taking of vacant possession, namely that the mortgagee is taking possession of the Property.
[73] Exhibit 1, Tab 22.
In this case, I am satisfied that there has been a default event under the Mortgage, the secured amount under the Mortgage has become due and payable, Taboref has given notice to the first defendant of its intention to take possession of and sell the Property, and has given the necessary notice to Mr and Mrs Taylor as required by the Act.
For these reasons, Taboref is entitled to vacant possession of Unit 4B as mortgagee in possession.

Are there special circumstances which justify the order of a tenancy to Mr and Mrs Taylor?

Section 81 of the Act gives the court power to make an order for a tenancy against a party with superior title to the property. Specifically, this section provides that:
(1)This section applies to a person who is or was in possession of residential premises as —
(a)a tenant under a residential tenancy agreement; or
(b)a tenant holding over after termination of a residential tenancy agreement,
at a time when proceedings for the recovery of possession of the premises had been commenced before a court by a person (the plaintiff) who is not the lessor under the agreement.
(2)A person to whom this section applies may apply for an order under this section and such an application may be made to —
(a)the court before which the proceedings are pending; or
(b)if the proceedings have been completed or possession has been recovered — a competent court,
within a reasonable time after the applicant was given notice of the proceedings or, if no notice was given, within a reasonable time after the recovery of possession of the residential premises.
(3)The court may, on such an application, and if it thinks it appropriate to do so in the special circumstances of the case, make an order vesting a tenancy over the residential premises in the applicant.
(4)The tenancy is to be held of the plaintiff, and on such terms and conditions as the court thinks fit, having regard to the circumstances of the case.
(5)Such an application or order may be made, even though —
(a)notice was not given to the applicant of the proceedings brought by the plaintiff; or
(b)the proceedings brought by the plaintiff have been completed or possession of the residential premises has been recovered by the plaintiff.
In this case, I am satisfied that:
(a)Taboref was not the lessor under the Lease and, accordingly, these proceedings are proceedings to which s 80(1) of the Act may apply; and
(b)It is at least arguable that at the time these proceedings were commenced, the Lease had been terminated but Mr and Mrs Taylor were in possession of Unit 4B as tenants holding over after the termination of the Lease. Ultimately, it is unnecessary for me to resolve this question.
The special circumstances relied upon by Mr and Mrs Taylor in support of an order for a tenancy to be made against Taboref in their favour were their inability to obtain public rental housing assistance or a private rental, despite their attempts, as well as their age and limited income. Mrs Taylor said they had 'gone to every avenue' to get somewhere (other than Unit 4B) to live. This included applying for assistance from Homeswest, which was denied, and considering private rentals.[74] However, there were very limited private rentals in their area and, where available, they were too expensive and more than they could afford.[75] Mrs Taylor explained that all they were asking for was a 'roof over our head' and to be 'safe and secure'.[76]
[74] ts 35.
[75] ts 35 (Mrs Taylor); ts 56 (Mr Taylor).
[76] ts 35.
Taboref denied that Mr and Mrs Taylor's counterclaim was brought within a 'reasonable time' after being given notice of the proceedings and denied that the matters relied upon by them were 'special circumstances' as required by s 81 of the Act.
At present there has been no judicial consideration as to what constitutes 'special circumstances' as required by s 81(3) of the Act.
The question as to what is required by s 81(3) of the Act is a matter of statutory construction. This involves the 'attribution of objective meaning to the statutory text having regard to considerations of text, context and purpose'.[77] The context of the Act includes both its legislative history and the current state of the law, as well as the mischief which the legislation was intended to address or remedy.[78]
[77] Pearson v Connor [2024] WASCA 49 [50] (Mitchell and Hall JJA, Seaward J), citing Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [47]; SZTAL v Minister for Immigration & Border Protection [2017] HCA 34; (2017) 262 CLR 362 [14]; Mohammadi v Bethune [2018] WASCA 98 [31] ‑ [36].
[78] SZTAL v Minister for Immigration & Border Protection [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408.
The ordinary and natural meaning of 'special' is 'distinguished or different from what is ordinary or usual' or 'extraordinary; exceptional; exceptional in amount or degree'.[79]
[79] Macquarie Online Dictionary.
This is consistent with the views expressed by various judges of the New South Wales Supreme Court who have considered the equivalent legislative provisions in the NSW legislation. Notably, in Perpetual Finance Corporation Ltd v Blain, Giles J expressed the view that '[t]he word “special” invites comparison so that it may be asked special in relation to what' and that it requires more than the fact that the tenants will otherwise have to give up possession.[80]
[80] Perpetual Finance Corporation Ltd v Blain (1996) 9 BPR 16, 243, cited with approval by Stevenson J in Australia and New Zealand Banking Group Ltd v Kavia Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2013] NSWSC 1532 [40].
In my view, the requirement that the court consider 'special circumstances' on an application to vest a tenancy does not necessitate the court precisely or exhaustively considering or defining all the circumstances in which an application might succeed. It simply indicates that unusual, uncommon or exceptional circumstances are required for a court to make such an order.[81]
[81] Australia and New Zealand Banking Group Ltd v Kavia Holdings Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [41] (Stevenson J).
The purpose of s 81 of the Act is to provide 'a fair and workable statutory regime between mortgagees and residential tenants to ameliorate the potentially harsh effects of the general law'.[82] I also accept that it is a beneficial provision that must be construed in that context.
[82] O’Neill v Commonwealth Bank of Australia [2013] NSWSC 836 [28].
For the following reasons, I do not consider that the matters relied upon by Mr and Mrs Taylor are special circumstances which would justify the making of an order under s 81(3) of the Act.
First, I accept their evidence that they have been rejected for state housing assistance and have had significant challenges in finding a private rental, these facts do not, of themselves, constitute special circumstances under the Act. In the present housing market, these challenges are, regrettably, all too common.
Second, the section requires the court to balance the interests of Taboref, as mortgagee, and Mr and Mrs Taylor, as residential tenants. Mr and Mrs Taylor have had possession of Unit 4B for almost five years after being served with the relevant notices by Taboref. During this period, no rent has been received by Taboref. This is significantly in excess of the minimum period of 30 days provided by s 81B(2)(b) and s 81A(3) of the Act. In my view, the matters relied upon by Mr and Mrs Taylor do not outweigh Taboref's interests.
Given this conclusion, it is not necessary to consider whether the application was made within a reasonable time after being given notice of the proceedings and I decline to do so.

Conclusion

As counsel for Taboref noted in opening, this is a case where both Taboref and Mr and Mrs Taylor have incurred significant losses as a result of the collapse of the Sterling New Life Lease scheme. There are no winners but only losers from this scheme and from what has occurred.
For the reasons set out above, I consider that Taboref is entitled to a declaration that the Lease has been validly terminated as well as an order for vacant possession of Unit 4B. The counterclaim by Mr and Mrs Taylor should be dismissed.
Before making formal orders, I will hear from the parties as to the terms of any orders and as to the costs of the proceedings.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
30 AUGUST 2024