IN BRIEF - TENANT HELD TO HAVE NO CONTRACTUAL RIGHT TO
The Queensland Civil and Administrative Tribunal (QCAT) held in
Broben & Anor v Hatfield  QCAT 341 that a retail
tenant, who abandoned the premises due to ongoing water leakage
problems, had repudiated the lease. This case shows that tenants
would be wise to consider the landlord's maintenance
obligations when negotiating the terms of the lease.
TENANT VACATES PREMISES BEFORE LEASE EXPIRES FOLLOWING ONGOING
LEAKAGE ISSUES AND THEN SIGNIFICANT RAIN DAMAGE TO STOCK
The tenant conducted a business of selling aquarium fish and
aquarium products from retail premises at Mermaid Beach. The
premises had a history of water leakage issues following heavy or
ongoing rain. The tenant reported the problems to the
landlord's agent on several occasions, but was not satisfied
with the responses received, nor was the issue substantially
rectified by the landlord.
A significant rain event occurred approximately six months
before the lease was due to expire, causing damage to the
tenant's stock. The tenant vacated the premises and commenced
TENANT HELD TO HAVE WRONGFULLY REPUDIATED LEASE
Notwithstanding that the landlord appeared to have accepted
responsibility for the water leakage problems, QCAT held that the
tenant had wrongfully repudiated the lease by abandoning the
premises prior to expiry of the lease. The tenant's security
bond was forfeited to the landlord, and the tenant was ordered to
pay rent for the remaining portion of the lease, make good costs,
and other expenses.
WHAT IS REPUDIATION?
Repudiation is conduct which clearly shows:
an unwillingness or inability to be bound by the terms of the
contract, or to render substantial performance of the contract,
an intention to fulfil one's obligations under the contract
in a way which is substantially inconsistent with the contract
In this case, QCAT held that as the tenant had no contractual
right to terminate the lease, the tenant's abandonment of the
premises prior to expiry of the lease constituted a wrongful
RETAIL LEASES THAT ARE WELL-DRAFTED MAY HELP TENANTS IN
REPUDIATION OF CONTRACT SITUATIONS
A repudiation situation following damage or maintenance problems
relating to the premises can prove costly for both parties.
A tenant who has wrongfully repudiated a lease is exposed to a
claim for balance rent under the lease and other damages, such as
make good costs and loss of bargain. The landlord can find itself
out of pocket, particularly where its loss goes beyond the amount
of security held from the tenant, with the prospect of legal costs
and delays to pursue a claim against the tenant.
A well-drafted retail lease which clearly sets out the
parties' contractual rights with respect to maintenance and
repair obligations may have assisted the tenant in the case. When a
tenant is negotiating a lease, it is recommended to consider what
positive obligations are required to ensure that the landlord keeps
the premises in good structural and watertight condition during the
A lessee will need to demonstrate that the genuine interests of the lessor will be protected if relief is granted.
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