Wilkinson v S & S Gikas Pty Ltd
Year of Decision: 2006
Jurisdiction:
Key Words:
relief against forfeiture
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appropriate preconditions for grant of relief against forfeiture
Facts
Decision
The granting of relief against forfeiture is discretionary
In relation to a lease, the principle that is generally applied is that the power to re-enter or forfeit for non-payment of rent is regarded as being in substance security for the rent. Provided the lessor and other persons concerned can be put in the same position as before the forfeiture or re-entry, the Court will usually grant relief against forfeiture upon payment of rent, costs, interest and other expenses: Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of New South Wales Ltd (1970) 2 BPR 9562. If those terms are offered, it is only in a rare case that the Court would refuse relief against forfeiture. The principle on which that is done is that, once the landlord has got all that the right of re-entry was, in equity’s eyes, security for, it would be unconscionable for the landlord to insist on its legal right to re-enter.
Unable to pay future rent
However, such a rare case can occur if the tenant is unable to pay future rent, or may reasonably be expected to become so: Direct Food Supplies Victoria Pty Ltd v DLV Pty Ltd [1975] VR 358; Tannous v Cipolla Bros Holdings Pty Ltd [2001] NSWSC 236 at [38]. If there is a sufficiently serious risk that the tenant will not be able to perform its obligations in the future, it may be that the consequence is that it is not unconscionable for the landlord to insist on its strict legal right.
Precondition for the granting of relief against forfeiture
In those circumstances, I would not regard it as appropriate to require an order for the payment of the costs of these proceedings to be a precondition for the granting of relief against forfeiture. One of the causes, and a significant cause, of the litigation has been the defendant’s insistence on the full measure of security guard fees.
It is a separate question who should pay the costs of the proceedings, on a basis other than being a precondition of relief against forfeiture.
Legislation Type:
Legislation No:NSWSC 1314
Intrepretation: