Posts Tagged lease void
Section 243 of Australian Consumer Law gives tenants a powerful weapon
Posted by ROBERT HAY QC COMMERCIAL LAW BARRISTER in Aust Consumer Law, Commercial Leases, Disputes, Landords, Leasing, Property Law, Tenants, Trade Practice Act on March 13, 2014
There is a translation key (widget) on the mirrored blog for ease of reading for non-English speaking members of the public or professionals. The mirrored blog can be found at http://roberthaybarrister.blogspot.com.au/
Landlords need to be very careful about what they say when negotiating leases because s.243 of the Australian Consumer Law provides a wronged tenant with a powerful weapon.
That section permits the court to make an order declaring the whole or any part of a contract void or to vary a contract.
The most famous case concerning the sections’s predecessor (s.87 of the Trade Practices Act 1974) was Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 where the High Court varied a lease.
The Supreme Court of Queensland recently used s.243 of the ACL to set aside a lease and a guarantee. In that case the tenant and guarantors of the tenant’s obligations alleged that they were induced to enter into a 30 year lease by representations that if the tenant paid rent at a rate of $180,000 per annum for three years and had not purchased the freehold after three years the landlord would cancel the lease and enter into a new lease at a rental of about $120,000 per annum.
The court found that the representation had been made and relied upon and that the tenant and the guarantor had suffered detriment as a result of the conduct of the defendants. The Court declared the lease and the guarantee void ab initio under s 243. The case is Morgo’s Leisure Pty Ltd and others v Morgan v Toula Holdings Pty Ltd and others  QSC 325.
Postcript: the decision referred to above was reversed by the Court of Appeal in Toula Holdings Pty Ltd v Morgo’s v Dante (NQ) Pty Ltd  QCA 201. Thanks to George Tsogas for alerting me to the result of the appeal.
My clerk can be contacted via this link for bookings http://www.greenslist.com.au/