Hogben Pty Ltd v Anthony Tadros �e" Relief Against Forfeiture and Costs [2022] NSWSC 1653 (5 December 2022)

Australia and New Zealand Banking Group Limited v Ngo [2022] VSC 713 (22 November 2022)

Intro: In this case, the primary judge refused an application by the Landlord to vary the amount of the verdict. Consequently, the tenants filed for an application for relief against forfeiture of the Lease.

Facts:

The Landlord terminated the Lease by notice dated 10 September 2021, relying expressly on the failure by the tenants to pay the Base Rent under the Lease.

The covering letter of the notice referred to other breaches by the tenants including, but not limited to, failure to pay outgoings and provide a bank guarantee/bond security. Arguments on this application centred on the tenants’ failure to pay rent.

The tenants argue that their breach was caused by the Landlord’s breach. They wish to be restored to their tenancy. They offer to pay the rent and discharge their other obligations even though they do not have an Occupation Certificate or Service Approval. They have taken some further steps toward obtaining an Occupation Certificate.

Their breach in not paying rent was caused by the Landlord’s breach.

The tenants are conscious of the fact that the Lease which they are to have, contains a provision (clause 20.2) that requires rent to be paid free of exchange, without any deductions or abatements, and without any deduction or set-off whatsoever other than as provided in the Lease.

The Landlord put that time limits should be imposed on the tenants to obtain an Occupation Certificate and Service Approval.

Issue:

1) Whether or not the application for relief against forfeiture of the Lease should be granted.

Ruling:

Yes.

The application for relief against forfeiture is an integral part of the single wider contest.

The tenants have succeeded. The true event is the substantial verdict they have obtained after a protracted and sapping dispute, in which the Landlord made no real concessions and argued that the tenants would have traded at a large loss.

There is no reason why either the primary rule that costs follow the event should not be adhered to or the usual rule that costs relating to particular issues in proceedings should not be excised or dealt with separately should be departed from.

Orders:

The Court makes the following declaration and orders:

(1) Declaration that the Second and Third Cross-Claimants are entitled to relief against forfeiture of the equitable lease that was created by the Deed of Agreement for Lease entered into on or about 11 April 2014 (Agreement for Lease).

(2) Within 7 days of this order, the Third Cross-Defendant and the Second and Third Cross-Claimants are to enter into a lease of the property known as Levels 1 and 2, 7-11 Hogben Street, Kogarah NSW 2217 and comprised in Lots 2 and 3 in DP 102363 and part Lot 29 Section C, DP 1560 (which includes 18 car spaces on the upper lower ground level), that lease to be in the same terms as the unexpired term of the lease that was to be entered into under the Agreement for Lease.

(3) The Third Cross-Defendant is to pay such of the Cross-Claimants’ costs of the proceedings which are not the subject of any previous orders for costs in their favour.

(4) These orders be entered forthwith.

On 19 September 2022, the Court delivered a judgment awarding damages of $730,000 to the tenants: 711 Hogben Pty Ltd v Anthony Tadros [2022] NSWSC 1259 (the quantum judgment).

Judgment was entered today for the amount of the verdict plus interest which is a total of $860,128.