Relief refused due to defect in Notice to Remedy Breach of Covenant - 20 June 2017
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![GOLD COAST REAL ESTATE TEAM CONTACTS
Bryce Melville Rebecca Sheppard Yvette Mason Marieanne Golubinsky Meaghan Brodie
PARTNER SENIOR ASSOCIATE ASSOCIATE GRADUATE PARALEGAL
T: +61 7 5553 9424 T: +61 7 5553 9490 T: +61 7 5553 9530 T: +61 7 5553 9539 T: +61 7 5553 9411
Bryce.melville@minterellison.com Rebecca.sheppard@minterellison.com Yvette.mason@minterellison.com Marieanne.golubinsky@minterellison.com Meaghan.brodie@minterellison.com
09.05.17:325777_114.docx
Property Developments
Relief refused due to defect in Notice to Remedy Breach of Covenant
The Supreme Court of Queensland has recently
considered whether a notice to remedy breach
is valid if it is not in the approved form.
Tyrell & Anor v Jesbro Enterprise Pty Ltd [2017]
QSC 55 (Tyrell Case) reinforces that a notice to
remedy breach must be in the approved form.
Importantly, a failure to include the first ‘note’
at the foot of the approved form (relating to
the landlord’s right to re-enter and forfeit the
lease if the tenant fails to comply with the
notice within a reasonable time) will be fatal to
the validity of the notice.
Facts
The tenant failed to pay rent and council rates. In
response, the landlord served a notice to remedy
breach that claimed to comply with approved form
(Notice) and then terminated the lease.
The Notice served by the landlord did not contain the
following prescribed 'note' that appears in the
approved form:
‘[NOTE: The lessor will be entitled to re-enter or
forfeit the lease in the event of the lessee failing to
comply with this notice within a reasonable time – see
section 124 of the Property Law Act 1974.]’
However, the Notice did contain the following words:
‘Should you fail to remedy the breach you may be
liable to forfeiture and termination of the lease and an
action for damages as a consequence thereof.’
The Landlord’s Arguments
The landlord argued that despite previous decisions to
the contrary, the Notice was valid because:
of a change to the Acts Interpretation Act
1954 (Qld) that permits substantial
compliance with an approved form; and
the Notice contained the essential
information of the prescribed note and was
therefore substantially compliant.
Decision
Justice McMeekin held that the Notice was invalid
because it did not provide the same substantial
information as the approved form.
The decision reinforces that landlords need to be
extremely careful when preparing notices to remedy
breach, and should adopt an approach of strict and exact
compliance.
Further information
If you would like advice on the Tyrell Case or assistance
with your retail leasing, please contact us.
*Disclaimer
The information contained in this update is intended as a guide only.
Professional advice should be sought before applying any of the information
to particular circumstances. While every reasonable care has been taken in
the preparation of this update, MinterEllison does not accept liability for any
errors it may contain.
20 June 2017](https://image.slidesharecdn.com/reliefrefusedduetodefectinnoticetoremedybreachofcovenant20-170621015045/85/Relief-refused-due-to-defect-in-Notice-to-Remedy-Breach-of-Covenant-20-June-2017-1-320.jpg)
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Relief refused due to defect in Notice to Remedy Breach of Covenant - 20 June 2017
- 1. GOLD COAST REAL ESTATE TEAM CONTACTS Bryce Melville Rebecca Sheppard Yvette Mason Marieanne Golubinsky Meaghan Brodie PARTNER SENIOR ASSOCIATE ASSOCIATE GRADUATE PARALEGAL T: +61 7 5553 9424 T: +61 7 5553 9490 T: +61 7 5553 9530 T: +61 7 5553 9539 T: +61 7 5553 9411 Bryce.melville@minterellison.com Rebecca.sheppard@minterellison.com Yvette.mason@minterellison.com Marieanne.golubinsky@minterellison.com Meaghan.brodie@minterellison.com 09.05.17:325777_114.docx Property Developments Relief refused due to defect in Notice to Remedy Breach of Covenant The Supreme Court of Queensland has recently considered whether a notice to remedy breach is valid if it is not in the approved form. Tyrell & Anor v Jesbro Enterprise Pty Ltd [2017] QSC 55 (Tyrell Case) reinforces that a notice to remedy breach must be in the approved form. Importantly, a failure to include the first ‘note’ at the foot of the approved form (relating to the landlord’s right to re-enter and forfeit the lease if the tenant fails to comply with the notice within a reasonable time) will be fatal to the validity of the notice. Facts The tenant failed to pay rent and council rates. In response, the landlord served a notice to remedy breach that claimed to comply with approved form (Notice) and then terminated the lease. The Notice served by the landlord did not contain the following prescribed 'note' that appears in the approved form: ‘[NOTE: The lessor will be entitled to re-enter or forfeit the lease in the event of the lessee failing to comply with this notice within a reasonable time – see section 124 of the Property Law Act 1974.]’ However, the Notice did contain the following words: ‘Should you fail to remedy the breach you may be liable to forfeiture and termination of the lease and an action for damages as a consequence thereof.’ The Landlord’s Arguments The landlord argued that despite previous decisions to the contrary, the Notice was valid because: of a change to the Acts Interpretation Act 1954 (Qld) that permits substantial compliance with an approved form; and the Notice contained the essential information of the prescribed note and was therefore substantially compliant. Decision Justice McMeekin held that the Notice was invalid because it did not provide the same substantial information as the approved form. The decision reinforces that landlords need to be extremely careful when preparing notices to remedy breach, and should adopt an approach of strict and exact compliance. Further information If you would like advice on the Tyrell Case or assistance with your retail leasing, please contact us. *Disclaimer The information contained in this update is intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, MinterEllison does not accept liability for any errors it may contain. 20 June 2017
- 2. GOLD COAST REAL ESTATE TEAM CONTACTS Bryce Melville Rebecca Sheppard Yvette Mason Marieanne Golubinsky Meaghan Brodie PARTNER SENIOR ASSOCIATE ASSOCIATE GRADUATE PARALEGAL T: +61 7 5553 9424 T: +61 7 5553 9490 T: +61 7 5553 9530 T: +61 7 5553 9539 T: +61 7 5553 9411 Bryce.melville@minterellison.com Rebecca.sheppard@minterellison.com Yvette.mason@minterellison.com Marieanne.golubinsky@minterellison.com Meaghan.brodie@minterellison.com 09.05.17:325777_114.docx