The Heat Group Pty Ltd v Paragon Care Limited

The Heat Group Pty Ltd applied for an urgent injunction to prevent Paragon Care Limited from entering the premises it sub-leased from The Heat Group. The Heat Group claimed that Paragon had not paid the rent due under the sub-lease, and they had issued a section 146 notice demanding payment. Paragon did not pay the amount demanded within the time specified, and The Heat Group sought to forfeit the sub-lease and regain possession of the premises. Paragon argued that The Heat Group should not be allowed to forfeit the lease, and they sought relief under the common law and equitable principles. The matter was heard in the Supreme Court of New South Wales.

The court had to decide whether The Heat Group was entitled to forfeit the sub-lease and re-enter the premises, and if Paragon was entitled to relief from forfeiture. The court considered the principles of relief from forfeiture, including the future capacity to pay rent, and whether there were any exceptional circumstances that warranted relief. The court also had to determine the appropriate costs of the application.

The court found that The Heat Group was entitled to forfeit the sub-lease and re-enter the premises, as Paragon had failed to pay the rent due and had not complied with the section 146 notice. The court held that there were no exceptional circumstances that warranted relief from forfeiture, as Paragon had not demonstrated a future capacity to pay the rent. The court also found that The Heat Group was entitled to call upon the bank guarantee without notice, and that an injunction to prevent this should not be persisted with. The court ordered that The Heat Group was to pay Paragon's costs of the application.

The court dismissed Paragon's application for an injunction and ordered that The Heat Group was to pay Paragon's costs of the application. The court held that The Heat Group was entitled to forfeit the sub-lease and re-enter the premises, and that there were no exceptional circumstances that warranted relief from forfeiture. The court also found that The Heat Group was entitled to call upon the bank guarantee without notice, and that an injunction to prevent this should not be persisted with. The case provides useful guidance on the principles of relief from forfeiture and the appropriate costs of an urgent application.