Thistle Investment Pty Ltd v MXL Investment Pty Ltd

The case of Thistle Investment Pty Ltd v MXL Investment Pty Ltd involved a dispute over the validity of a lease termination notice served by the plaintiff, Thistle Investment Pty Ltd, on the defendant, MXL Investment Pty Ltd. The dispute arose from the condition of a hotel leased by MXL from Thistle, which was in poor condition prior to the assignment of the lease. During the lease, Thistle complained about the poor condition of the hotel and subsequently sought to terminate the lease. Thistle served a notice to remedy breach under section 124 of the Property Law Act 1974 (Qld), which contained defects, including an annexure detailing all remedial work to be done at termination rather than to remedy a breach. The notice required MXL to undertake all remedial works, including those identified in the report. The central legal issues were whether the notice served by Thistle was valid and if there was sufficient evidence to establish that MXL breached the lease.

The court considered the notice served by Thistle and found it to be defective. The notice required MXL to undertake remedial work that was not necessary to remedy a breach, but rather to address the general condition of the hotel at termination. The court noted that the notice expressly required MXL to carry out work specified in both Annexure A and in a PEP report, even though the PEP report included 'make good' work not required by the lease and could not be achieved within the time permitted in the notice. The court held that the content of the PEP report in so far as it sought to demonstrate MXL’s obligation to 'make good' had no relevance to Thistle’s claim that MXL was in breach of its repair or other obligations under the lease as at the date the notice was served. The court further held that the PEP report included tasks that were substantial and would take much longer than the 28 days specified in the notice, which rendered the notice invalid. The court concluded that the Form 7 did not validly terminate the lease.

The application filed by Thistle on 20 March 2024 was refused. The court will hear the parties on costs.