The High Court today found that Liquidators of a landlord company can use the disclaimer power in the Corporations Act to extinguish leases granted by that company.
A summary of the decision is available here.
The decision upholds a decision of the Victorian Court of Appeal that has created significant consternation among those acting for tenants. The implications are likely to be far-reaching.
Those acting for tenants should be advising their clients:
- of the risk that a liquidator appointed to their landlord may use the disclaimer power to extinguish their leases; and
- that if this occurs, the tenant may apply to set aside that disclaimer under ss 568B and 568E of the Corporations Act. This may present a high hurdle for tenants.
The majority left open the question of whether leave to disclaim must be sought by the Liquidator prior to disclaiming a lease.
I will post more on this issue and about setting aside disclaimer after I have had a chance to digest the Court’s reasons.
Sam Hopper Barrister 
December 4, 2013 at 2:51 pm
I am appalled! I look forward to reading the judgments but cannot see the legal, social, economical, logical or moral justification for such an outcome. I would hope the Legislature will deal with this to restore justice and reason.