The tenant of a Bribie Island car wash site who alleged it did not receive a notice to remedy breach of lease has been ordered to payits landlord $118k in lost rent following termination of the lease.

leasePaul and Yvonne Royal took a 10 year lease – through their company Wash Investments Pty Ltd – of the Ningi site from June 2011.

Soon after, they began struggling financially.

The landlord’s first notice of default was served in August 2012.

But it was the notice given in June 2013 that led to landlord SCK Properties Pty Ltd re-entering into possession and the subsequent lawsuit that occupied Brisbane’s District Court with eight days of contested testimony.

The Royals denied having received the June 2013 breach notice or the subsequent notice of termination, an argument that gained some traction because of the specification in the lease that notices were required to be given by “certified mail”.

Failure to send the notices by that means was the basis of their lawsuit against the landlord for substantial damages for what they alleged was a wrongful termination of their lease.

Notwithstanding the landlord’s admission that the notices had only been sent by ordinary post, the breach notice had – according to Judge Julie Ryrie – been “validly given” because, despite the denials of Mrs Royal, in her view it had been received shortly after posting.

And even if a notice to remedy had not been given, the court agreed the landlord had a common law right to terminate in the event of a tenant’s repudiation.

“It is trite to say that lease is simply a contract and subject to its terms, may be terminated on the same basis any other contract,” noted Her Honour.

That repudiation was comprised by the rent delinquency of $30k for three weeks and their communication to the landlord they had no prospect of meeting their commitments unless a rent reduction was allowed, given their dire financial position.

By such conduct they had expressed the intention, according to the Judge, they “no longer intended to be bound by the terms of the lease”.

Thus the landlord was entitled to terminate on the basis of such repudiation as well as for the tenant’s failure to remedy as demanded in the notice.

SCK’s actions were upheld and tenant’s claim for damages was comprehensively dismissed.

The rental loss was assessed on evidence from Vincent’s Chartered Accountants at $118k for which Mr and Mrs Royal were held to be liable pursuant to their personal guarantees.

Wash Investments Pty Ltd & Ors v SCK Properties Pty Ltd & Ors [2016] QDC 077 Ryrie DCJ 08/04/2016


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