Grepo & Anor v Jam-Cal Bundaberg Pty Ltd

[2015] QCA 131

Queensland Court of Appeal

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Interrogate

Catchwords

1. Landlord and Tenant
2. › Renewals and Options
3. › Exercise of Option
4. › Conditions precedent to exercise
5. › Compliance with lease covenants up to expiration of term
6. › Whether breaches of covenant disentitled lessee from exercising option to renew
1. Landlord and Tenant
2. › Renewals and Options
3. › Exercise of Option
4. › Relief against loss of option for renewal
5. › Whether protective effect of s 128(4) Property Law Act 1974 (Qld) extends to breaches after giving of notice of exercise
6. › Whether 'purported exercise of the option' refers to giving of notice or expiry of lease term
7. › Property Law Act 1974 (Qld), s 128(4)
1. Landlord and Tenant
2. › Renewals and Options
3. › Nature of Option
4. › Whether option to renew is irrevocable offer or conditional contract
5. › Whether giving of notice creates agreement for lease
6. › Whether lessee entitled to relief from forfeiture
7. › Property Law Act 1974 (Qld), ss 123, 124
1. Landlord and Tenant
2. › Covenants
3. › Rent review clauses
4. › CPI adjustment
5. › Whether CPI-adjusted rent required determination before becoming payable
6. › Whether cl 3.4 applied to CPI adjustments under cl 3.2.1

Quick Take

Section 128(4) of the Property Law Act 1974 (Qld) protects a lessee only against breaches occurring before the giving of notice of exercise of an option to renew; it does not extend to breaches between the notice and the expiry of the lease term. Where an option to renew requires compliance with lease covenants up to the expiry of the term, breaches occurring after the notice of exercise but before expiry will disentitle the lessee from exercising the option, and no agreement for lease arises so as to enliven relief from forfeiture under s 124. The NSW decisions of Young J in Beca and Hodgson J in Nessmine are not followed in Queensland.