Thursday, 22 March 2012

Tenants need the protection of s.146 of the Property Law Act

Please note for members of the public or practitioners in the legal profession where English is your second language a translation key in all languages of the world is available on this blog to assist you. The plain English blog without translation facilities is located at http://roberthaypropertybarrister.wordpress.com


I have had a number of queries about a recent post concerning N.C.Reid & Co v Pencarl Pty Ltd [2011] VCAT 2241. In Reid Judge O'Neill held that before re-entering leased premises the landlord did not have to serve a notice that complied with s.146 of the Property Law Act 1958. 

The lease permitted the landlord to re-enter if the guarantor became bankrupt.  Section 146 requires service of a notice where a right of re-entry or forfeiture under any proviso or stipulation in a lease or otherwise arising by operation of law for "a breach of any covenant or condition in the lease, including a breach amounting to a repudiation". 

Judge O'Neill held that there was no "breach" and therefore a notice under s.146 was not required. If the case of  Reid stands it has major implications for tenants who will lose the protection afforded by s.146. 

Judge O'Neill does not appear to have been referred to authorities that might have persuaded him to adopt a different interpretation of s.146. For example, the application of the reasoning applied by McLelland J in Della Imports Pty Ltd v Birkenhead Investments Pty Ltd (1987) NSW Conv R 55-538 might have resulted in a different outcome.  

McLelland J had to consider a lease that permitted the lessor to enter premises and determine the lease without notice if the lessee entered into liquidation or was wound up. His Honour held that the right of re-entry under the lease was a "right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any....condition in the lease", within the meaning of s.129 of the Conveyancing Act 1919 (being the NSW equivalent of s.146) and which could not be enforced unless and until the lessor gave notice  under s.129 and in respect of which the tenant could apply for relief against forfeiture. 

His Honour held that a provision in a lease that provided for re-entry on the happening of an event, regardless of whether or not there was any obligation on the lessee to prevent that even happening, was a "condition" within the meaning of s.129 and that the word  "breach" in s.129 was equivalent to non-fulfilment".  His Honour held that this interpretation was supported "by the evident policy of the provision [ie s.129 in NSW or s.146 in Victoria] which would otherwise be manifestly inadequate for the protection of lessees which it obviously is intended to confer". 

 If Reid is the law in Victoria s.146 will need to be amended.



My clerk can be contacted via this link http://www.greenslist.com.au/ if you wish to retain my services for any legal matter which is within the gamut of my legal experience.


Author: Robert Hays Barrister subject to copyright under DMCA.

9 comments:

  1. [...] For those who were interested in my previous post on this topic here, Robert Hay has just added another post to his blog that expands on the topic here. [...]

    ReplyDelete
  2. Howdy! This is my first visit to your blog! We are a group of volunteers and starting a new initiative in a
    community in the same niche. Your blog provided us useful information
    to work on. You have done a marvellous job!

    ReplyDelete
  3. Hello there! I know this is kind of off topic but I was wondering if you knew where I could locate
    a captcha plugin for my comment form? I'm using the same blog platform as yours and I'm having problems finding
    one? Thanks a lot!

    ReplyDelete
  4. naturally like your website but you have to test the spelling on quite a
    few of your posts. A number of them are rife with spelling problems and I find it very bothersome to tell the reality however I will surely come again again.

    ReplyDelete
  5. Hey there! I am about to begin my own blog and was wondering if you know where the best place to acquire a website url is?
    I'm not even sure if that's what its called? (I'm new to this) I'm referring to "http://roberthaypropertybarrister.wordpress.com/2012/03/22/tenants-need-the-protection-of-s-146-of-the-property-law-act/".
    Exactly how do I go about obtaining one of these for the website I'm making? Thank you

    ReplyDelete
  6. Isaac Szmerling15 April 2013 at 11:33

    Robert,

    What do you say the position is at Law if the S146 Notice claims an amouint owing for rent that is higher that what is actually owing - would that render the Notice invalid ?

    ReplyDelete
  7. I don't even understand how I finished up here, but I assumed this submit was once good. I don't recognize who you might be but certainly you're going to a famous blogger in case you are not already. Cheers!

    ReplyDelete
  8. Write more, thats all I have to say. Literally, it seems as though you
    relied on the video to make your point. You definitely know what youre talking about, why throw away your
    intelligence on just posting videos to your blog when you could be giving
    us something enlightening to read?

    ReplyDelete
  9. Having read this I believed it was very enlightening.
    I appreciate you taking the time and effort to put this article together.
    I once again find myself spending a lot of time both reading and leaving comments.
    But so what, it was still worthwhile!

    ReplyDelete