Robert Hay KC Blog

I have had a number of queries about my last post in which I referred to N.C.Reid & Co v Pencarl Pty Ltd [2011] VCAT 2241 in which Judge O’Neill held that before re-entering leased premises the landlord did not have to serve a notice that complied with s.146 of the Property Law Act 1958. The lease permitted the landlord to re-enter if the guarantor became bankrupt.  Readers asked why s.146 did not apply? Section 146 requires service of a notice where a right of re-entry or forfeiture under any proviso or stipulation in a lease or otherwise arising by operation of law for “a breach of any covenant or condition in the lease, including a breach amounting to a repudiation”.  For s.146 to apply there must be a breach. The tenant argued that there had been  a repudiation. His Honour rejected the tenant’s argument and held that the re-entry took place by reason of a contractual right; there had not been a breach and therefore no notice was required.