Michael May and James Penrose appeared for the respondent, instructed by Cooper Grace Ward.
The applicant leased premises for the operation of a mini golf venue and received a fitout contribution under an incentive deed. Following delays in the fitout, the applicant refused to recommence the works unless the respondent, as assignee of the original landlord, agreed to further concessions. The respondent accepted the applicant’s repudiation, terminated the lease and demanded repayment of a proportion of the fitout contribution.
Crowley J held that the applicant’s conduct evinced an unwillingness to be bound by the lease and therefore amounted to repudiation. Following GWC Property Group Pty Ltd v Higginson, his Honour further held that the repayment clauses were penalties, as they were incentive clawback provisions triggered by termination of the lease for the tenant’s default. His Honour declared the repayment clauses unenforceable and otherwise dismissed the application.
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