The Court held that the appointment by a court of interim receivers over specific property assets of a company, combined with the additional statutory powers conferred by s 420 of the Corporations Act 2001 (Cth), displaces the directors' authority to deal with those assets, such that a lease executed by the sole director during the subsistence of the interim receivership was not binding on the company. Even assuming the lease was valid, the Court found no solid foundation for relief against forfeiture under s 146(2) of the Property Law Act 1958 (Vic) where the triggering event was the guarantor's bankruptcy, given the absence of evidence of disproportionate benefit to the landlord, improvements by the tenant, or special characteristics of the premises, combined with significant delay in seeking to assert rights. The Court left open, without deciding, whether relief against forfeiture is in principle available where a lease termination right is triggered by the bankruptcy of a guarantor rather than a breach of covenant, assuming in the plaintiff's favour that it was.
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