Does the replacement RE take its claim subject to equities against the old RE? Primary RE Ltd v Great Southern Property Holdings Ltd & Ors [2011] VSC 242

In the Primary RE case, the new RE sought relief from forfeiture of leases terminated following breaches of the lease by the former RE.

The landlord argued that the former RE would have been estopped from seeking relief from forfeiture because it had failed to make an application for relief from forfeiture following service of s 146 notices coupled with the public announcement by the receivers of the land owning companies of their intention to sell the properties.

The Court held that the former RE would have been estopped from seeking relief from forfeiture.

Importantly, the Court also found that any right that may have transferred to Primary RE would also have been subject to the same estoppel.

The result seems to be that any claim that can be brought by the new RE under s 601FS is also subject to defences to those claims (or, at least, to equitable defences).

The relevant comments are made at [180],  [188] and [189] of the judgment.