Victorian Consolidated Legislation

Property Law Act 1958 - SECT 146

Restrictions and relief against forfeiture of leases and under-leases

146. Restrictions and relief against forfeiture of leases and under-leases



(1) 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 repudiation, shall not
be enforceable, by action or otherwise, unless and until the lessor serves on
the lessee a notice-

   (a)  specifying the particular breach complained of; and

   (b)  if the breach is capable of remedy, requiring the lessee to remedy the
        breach; and

   (c)  in any case, requiring the lessee to make compensation in money for
        the breach-

and the lessee fails, within a reasonable time thereafter, or the time not
being less than fourteen days fixed by the lease to remedy the breach, if it
is capable of remedy, and to make reasonable compensation in money, to the
satisfaction of the lessor, for the breach. This subsection shall not extend
to a breach of any covenant or condition whereby or by means whereof either
alone or with other circumstances any licence or permit under the
Liquor Control Reform Act 1998 is or may be endangered or is or may be liable
to expire or be forfeited, surrendered, taken away or refused.

(1A) A notice served under subsection (1) in respect of a breach amounting to
repudiation-

   (a)  does not constitute, and must not be taken to constitute, an
        affirmation of the lease by the lessor; and

   (b)  does not affect any right that the lessor may have by reason of the
        repudiation.

(2) Where a lessor is proceeding, by action or otherwise, to enforce or has
enforced without the aid of the Court or the County Court such a right of
re-entry or forfeiture, the lessee may apply to the Court for relief; and the
Court may grant or refuse relief, as the Court, having regard to the
proceedings and conduct of the parties under the foregoing provisions of this
section, and to all the other circumstances thinks fit; and in case of relief
may grant it on such terms (if any) as to costs, expenses, damages,
compensation, penalty or otherwise, including the granting of an injunction to
restrain any like breach in the future, as the Court, in the circumstances of
each case, thinks fit.

(3) A lessor shall be entitled to recover as a debt due to him from a lessee,
or from the assignee or transferee of a lessee (where the assignment or
transfer has been with the express consent of the lessor and the breach of
covenant or condition, including any breach amounting to repudiation, has
occurred since the assignment or transfer) or partly from the lessee and
partly from the assignee or transferee and in addition to damages (if any),
all reasonable costs and expenses properly incurred by the lessor in the
employment of a legal practitioner and surveyor or valuer, or otherwise, in
reference to any breach giving rise to a right of re-entry or forfeiture
which, at the request of the lessee, is waived by the lessor, or from which
the lessee is relieved, under the provisions of this Part either by the Court
or by the operation of subsection (1) of this section. And the lessor shall be
so entitled to recover whether the lessee has or has not rendered forfeiture
unenforceable against him under that subs ection.

(4) Where a lessor is proceeding by action or otherwise to enforce or has
enforced a right of re-entry or forfeiture under any covenant, proviso or
stipulation in a lease, or otherwise arising by operation of law, or for
non-payment of rent, or for any breach amounting to repudiation which the
lessor has accepted as such, the Court may, on application by any person
claiming as under-lessee any estate or interest in the property comprised in
the lease or any part thereof, make an order vesting, for the whole term of
the lease or any less term, the property comprised in the lease or any part
thereof in any person entitled as under-lessee to any estate or interest in
such property upon such conditions as to execution of any deed or other
document, payment of rent, costs, expenses, damages, compensation, giving
security, or otherwise, as the Court in the circumstances of each case may
think fit, but in no case shall any such under-lessee be entitled to require a
lease to be granted to him for any longer term t han he had under his original
sub-lease.

(5) For the purposes of this section except so far as is otherwise provided-

   (a)  lease includes an original or derivative under-lease; also an
        agreement for a lease where the lessee has become entitled to have his
        lease granted; also a grant securing a rent by condition;

   (b)  lessee includes an original or derivative under-lessee, and the
        persons deriving title under a lessee; also a grantee under any such
        grant as aforesaid and the persons deriving title under him;

   (c)  lessor includes an original or derivative under-lessor, and the
        persons deriving title under a lessor; also a person making such grant
        as aforesaid and the persons deriving title under him;

   (d)  under-lease includes an agreement for an under-lease where the
        under-lessee has become entitled to have his under-lease granted;

   (e)  under-lessee includes any person deriving title under an under-lessee.





(6) This section shall apply although the proviso or stipulation under which
the right of re-entry or forfeiture accrues or in respect of which any breach
amounting to repudiation occurs is inserted in the lease in pursuance of the
directions of any Act of Parliament but shall not apply to leases by the
Crown.

(7) For the purposes of this section a lease limited to continue as long only
as the lessee abstains from committing a breach of covenant, including a
breach amounting to repudiation, shall be and take effect as a lease to
continue for any longer term for which it could subsist, but determinable by a
proviso for re-entry on such a breach.

(8) This section shall not extend-

   (a)  to a covenant or condition against assigning, underletting parting
        with the possession or disposing of the land leased where the breach
        occurred before the commencement of the Property Law Act 1928; or

   (b)  in the case of a mining lease, to a covenant or condition for allowing
        the lessor to have access to or inspect books, accounts, records,
        weighing machines or other things, or to enter or inspect the mine or
        the workings thereof.

(9) This section shall not apply to a condition for forfeiture on the
bankruptcy of the lessee or on taking in execution of the lessee's interest if
contained in a lease of-

   (a)  agricultural or pastoral land;

   (b)  mines or minerals;

   (c)  a house used or intended to be used as licensed premises under the
        Liquor Control Reform Act 1998;





   (d)  a house let as a dwelling-house, with the use of any furniture, books,
        works of art or other chattels not being in the nature of fixtures;

   (e)  any property with respect to which the personal qualifications of the
        tenant are of importance for the preservation of the value or
        character of the property, or on the ground of neighbourhood to the
        lessor, or to any person holding under him.

(10) Where a condition of forfeiture on the bankruptcy of the lessee or on
taking in execution of the lessee's interest is contained in any lease, other
than a lease of any of the classes mentioned in the last subsection, then-

   (a)  if the lessee's interest is sold within one year from the bankruptcy
        or taking in execution, this section shall apply to the forfeiture
        condition aforesaid;

   (b)  if the lessee's interest is not sold before the expiration of that
        year, this section shall apply only to the forfeiture condition
        aforesaid during the first year from the date of the bankruptcy or
        taking in execution.

(11) When a lessee has assigned or transferred the lease with the consent of
the lessor the bankruptcy of the lessee after such assignment or transfer
shall not work a forfeiture or determine the lease unless the condition for
forfeiture on bankruptcy contained in the lease is therein expressly extended
to the bankruptcy of the lessee after the date of such assignment or transfer.

(12) This section shall not, save as otherwise mentioned, affect the law
relating to re-entry or forfeiture or relief in case of nonpayment of rent
whether or not such a breach amounts to repudiation.

(13) This section shall have effect notwithstanding any stipulation to the
contrary but subsections (3) and (4) are to be read subject to the provisions
of Part 10 of the Retail Leases Act 2003.