Is the breach capable of remedy? Primary RE Ltd v Great Southern Property Holdings Ltd & Ors [2011] VSC 242

The s 146 notices served on the former RE cited a failure to tend and maintain the plantations on the leased land in breach of the leases.

The receivers of the land owning company argued that a failure to maintain is not a breach capable of remedy.

Primary RE argued the contrary position, stating that the breaches could be remedied by either tending the plantations or re-planting as required.

The Court held that a failure to tend the plantations is a breach capable of remedy by, in this case, recommencing remediation works or re-planting.

However, the Court found that the real issue in this case was that the landlords were not required to wait until expiry of the time required to complete the remediation works when it was plain that the tenant could not and would not do so because of its insolvency.

I think there is an analogy at this stage of the judgment to decisions about repair and maintenance in an ordinary lease.  Tenants served with a s 146 notice alleging a failure to maintain should consider commencing repairs as soon as they receive the notice and inform the landlord of the work being done and when it can be completed.  Even if the tenant does not accept liability for the repairs, it may be useful to at least take preliminary steps in this direction to support a relief from forfeiture claim in the alternative.

Landlords serving a s 146 notice alleging a failure to repair should be aware that a tenant may be able to either remedy the breach during the term of the notice or seek relief from forfeiture on an undertaking to complete the required work within a specified period.

The relevant discussion is at paragraph [137] to [139] of the judgment.