V.G DNEPR Pty Ltd v MVI Industries Pty Ltd

V.G DNEPR Pty Ltd initiated legal proceedings against MVI Industries Pty Ltd, alleging breaches of the terms of a lease agreement. Specifically, V.G DNEPR claimed that MVI had failed to restore the premises to a satisfactory condition in accordance with the lease terms. The dispute came before the court, which was tasked with determining whether MVI had indeed breached the lease by not making good the premises and, if so, the extent of the damages owed. The court also had to interpret the relevant clauses in the lease agreement and the application of section 133A of the Conveyancing Act in this context.

The legal issues before the court included the proper construction of the "make good" clause in the lease, the burden of proof regarding any diminution in the property's condition, and the applicability of section 133A of the Conveyancing Act to the make good obligations. The court needed to decide if the "make good" clause required MVI to restore the premises beyond fair wear and tear and whether the onus of proving any diminution in property lay with MVI. Additionally, the court had to determine if section 133A of the Conveyancing Act applied to the make good obligations, despite the fact that the lease did not itself create an interest in land.

The court found that MVI had indeed breached the lease by failing to make good the premises. It held that the "make good" clause required MVI to restore the premises to a condition that did not include fair wear and tear. The court determined that the onus of proving any diminution in property rested with MVI, and they had failed to meet this burden. Furthermore, the court concluded that section 133A of the Conveyancing Act applied to the make good obligations, even though the lease did not create an interest in land. Consequently, V.G DNEPR was awarded damages of $32,671.53, inclusive of interest at the court rates from 16 June 2023 until the date of entry of judgment. The court dismissed the cross-claim and reserved further orders regarding interest and costs.