APF Properties Pty Ltd v Robinson Investment Capital Pty Ltd  TASSC 59
Supreme Court of Tasmania
Tenants who are late in exercising their option to renew are usually unable to seek remedy in continuing the lease. However, in an unusual case a tenant was able to use the Australian Consumer Law to succeed in the renewal of the lease, despite exercising their option to renew late.
A vendor sold a large property with a family home situated on the land. The intention was to sell the property as a whole and within the contract was a directive to sub-divide and sell the family home back to the vendor at a set price. After the sale, the parties were unable to sub-divide the land as the planning authority did not allow so. The purchaser agreed to allow the vendor to lease the land under a 9 year lease with 10 options to renew (each for a period of 9 years) with an up-front payment of the price stated in the contract and a rent of $1 per year.
The vendor, now a tenant, did not exercise their option to renew at the specified time. The landlord consequently sought action to evict the tenant.
Section 21 of the Australian Consumer Law provides for relief against ‘unconscionable’ conduct in trade or commerce. The court was adamant that, in this instance, for the landlord to use their right to evict the tenant was conduct that was viewed as immoral. The court noted that the conduct was unfair and unreasonable given the tenant had paid full price for the property under an arrangement that sought the right to occupy the property for 99 years, of which the tenant was being denied.
If you would like to discuss this case further, you should contact our property team at Matthews Folbigg on 9635 7966.
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