Progressive Mailing House Pty Ltd v Tabali Pty Ltd
57 ALR 609(Judgment by: Wilson J)
Between: Progressive Mailing House Pty Ltd
And: Tabali Pty Ltd
Judges:
Mason J
Wilson JBrennan J
Deane J
Dawson J
Subject References:
LANDLORD AND TENANT
LEASE
Memorandum of
Breach of covenant to pay rent
Whether repudiation
Re-entry
Other rights of termination
Lessor's loss of benefit of covenants
Damages for loss
Applicability of ordinary principles of contract law
REAL PROPERTY
Torrens system
Unregistered memorandum of lease
Rights of parties thereunder
DAMAGES
Lessor's re-entry on repudiation
Loss of benefit of covenants
Whether damages recoverable
CONTRACTS
Breach
Fundamental
Leases
Applicability to
Case References:
Shevill v Builders Licensing Board - (1982) 149 CLR 620; 42 CLR 305
National Carriers Ltd v Panalpina (Northern) Ltd - [1981] AC 675
Judgment date: 12 March 1985
Canberra
Judgment by:
Wilson J
I have had the advantage of reading the reasons for judgment prepared by Mason J. I agree substantially with those reasons and with the conclusion to which they lead. I wish merely to add some brief observations on one aspect of the matter.
The nub of the case for the appellant is that its conduct in withholding the payment of rent from May 1979 until October 1979 should not be taken as a repudiation or fundamental breach of its obligations under the contract as it believed bona fide that until such time as the respondent carried out in a satisfactory manner the works specified in the Second Schedule there was no obligation to pay any rent. In support of that case it is submitted that the completion of those works was a condition precedent to such an obligation arising. But the submission cannot be accepted. Clause 11.6 obliges the respondent to carry out the work specified in the schedule. It also makes the opinion of the lessor's architect that the work has been completed a condition precedent to the appellant coming under an obligation to enter into occupation of the premises. If entry is effected pursuant to that clause then cl 11.7 secures to the appellant a rent-free holiday for two months. However, the critical fact is that the appellant did not take possession of the premises pursuant to cl 11.6. It was already in possession before that time was reached. That being so, there was no obstacle to the operation of the covenant undertaken by the appellant in cl 3 to pay rent. Had the appellant chosen not to enter into possession prior to the completion of the works, it would have been on firm ground in insisting on meticulous compliance by the respondent with the requirements of cl 11.6 before it came under any obligation to do so. On the other hand, once it was in possession under the agreement, it was obliged to observe the covenant contained in cl 3 to pay the rent. It then had to seek the enforcement of the respondent's obligations by other means. It was not entitled to take the law into its own hands by withholding the rent. As it happened, of course, the learned trial judge rejected the appellant's allegations against the respondent.
The appellant's action in withholding the rent was persisted in over a period of several months and continued even after its receipt of the letter of 9 August 1979 from the respondent's solicitors which bluntly warned it of the consequences of continuing in the course it had adopted. This history of the matter, coupled with the circumstances relating to other breaches of covenant as found by the trial judge, leads irresistibly to the conclusion that the appellant was in fundamental breach of its obligations under the contract and is therefore liable in damages.
I would dismiss the appeal.