or non observance hereunder) after service upon the Lessee of a notice in writing requiring remedy of the breach or non observance then that failure to pay rent or remedy such breach or non observance shall be deemed to be a breach of an essential Term of this lease amounting to a repudiation hereof by the Lessee and the Lessor may without notice accept that repudiation and terminate this lease but without prejudice to any other remedy right or power which the Lessor may have pursuant hereto." (underlining mine). Some aspects of Clause C.1. may be noted. It is a forfeiture provision in that it signifies the extinction or defeasance of an estate in land upon failure to pay rent or upon breach of a covenant, the lessor then having an option whether or not to do so. It is not the usual forfeiture provision which takes the form of providing that the lessor may re-enter, as the method of terminating the lease; it appears to be a more modern provision for termination, perhaps stemming from the decision in Shevill v Builders Licensing Board [1982] HCA 47; (1981-82) 149 CLR 620. 6. The evidence upon which the lessor founds its case is contained in 3 affidavits; Michael Pastrikos' affidavits of 28 February 1986 and 18 March and Jacob Mu's affidavit of 28 February. The lessee has put on an affidavit in reply sworn by one of its directors, Mr Ku, on 19 March. The proceedings were conducted before me on the affidavits. The lessor's case was that even if all the matters raised by the lessee in its affidavit were ultimately found in favour of the lessee, after evidence had been heard, it had nevertheless failed to show cause why it should not give up possession to the lessor. 7. I deal first with the case under s.192(III). There is no provision in the lease, and there is nothing in common law or statute, which vests in the lessor a "power to re-enter", in terms of s.192(III), where the rent is in arrears. As noted earlier, Clause C.1., the forfeiture provision, does not provide for the lessor to have this power. Accordingly, the lessor has no entitlement to sue under s.192(III). 8. I turn to the case under s.192(IV), and first to the application of Clause C.1. as a forfeiture provision. Paragraph 10(ii) of the affidavit of Michael Pastrikos, a director of the lessor, sworn on 28 February 1986 discloses that the total rent due and payable under the lease from 23 February 1985 to 23 January 1986 was $92,000, while the lessee in fact paid only $41,344.52 for that period as rent. Consequently, the arrears of rent as at 23 January 1986 amounted to $50,655.48. That sum remains unpaid. Mr Pastrikos said that a further monthly rental payment of $8,960 was due on 23 February 1986 and also had not been paid. In the result, he contends, as at 25 February 1986 when the lessor purported to terminate the lease, more than 7 months' rent was due and unpaid. 9. The lessee concedes that as at 23 January 1986 the arrears of rent amounted to $50,655.48 and that the instalment of $8,960 due on 23 February 1986 has not been paid; see para.4 of Mr Ku's affidavit, on p 11 of this judgment. 10. It is of course obvious that the rent instalment of $8,960 due on 23 February 1986 was not, in terms of Clause C.1. "in arrears for seven (7) days after the same shall have fallen due", when the lessor, by its solicitors' letter sent only 2 days after that instalment was due, claimed that the lessee had repudiated the lease and terminated it. The letter is dated 25 February 1986, and is Annexure D to Mr Pastrikos' affidavit of 28 February. Accordingly, I consider that the lessor cannot rely upon the non-payment of the $8,960 due on 23 February 1986, in making out a case that the lease was validly terminated on 25 February 1986 for non-payment of rent. What is clear is that, at the time of the purported termination on 25 February, the rent was more than 6 months in arrears and none of these arrears have since been paid or tendered, while in fact the lessee has slipped further into arrears. 11. The lessor contends that the lessee's failure to pay the rent triggered Clause C.1. of the lease. That is, that the lessee's default means that it is thereby deemed by Clause C.1. to be in breach of an essential term of the lease (its covenant A.1. to pay the rent); and to have repudiated the lease in the sense that it has indicated by its conduct in not paying the rent its intention not to observe its obligations under that essential term and thus to deprive the lessor of substantially its whole benefit under the lease. The lessor contends that it accepted that repudiation and, treating itself as thereby discharged from further performance of its obligations, terminated the lease on 25 February, when its solicitors wrote to the lessee as follows:- "... as part of the rent is in arrears for seven days after becoming due, your company is deemed to be in breach of an essential term of the lease amounting to a repudiation thereof pursuant to clause C.1 of the lease. Our client accepts your company's repudiation and hereby terminates the lease." (underlining mine). 12. I reject the lessee's submission that the words "part of the rent" underlined above should be read as referring only to the instalment of $8,960 due on 23 February. Clearly, those words acknowledged that some of the rent since the lease commenced had been paid. The phrase must be read in the light of the earlier part of the letter where the "arrears" of $50.655.48 and the $8,960 rent "not yet paid" are specifically and separately referred to; clearly it is the former which it is referred to. I consider that the letter clearly sets out the breach of the covenant to pay rent upon which the lessor relies, and the right it is purporting to exercise; and that, as Mann J. put it in Singman v Lyons [1922] VicLawRp 72; (1922) VLR 719 at p 724:- "... (the lessor) has done all that he is required by law in this regard." 13. At common law a lessor may take action to forfeit a lease if it contains an express provision that the breach of a covenant by the lessee may result in forfeiture: Doe d. Willson v Phillips [1824] EngR 517; (1824) 2 Bing 13; 130 ER 208. That is to say, upon a breach of covenant by the lessee such a lease becomes voidable and the lessor can terminate it. Clause C.1. is an express provision for forfeiture for failure to pay rent, and for other breaches of covenant. As to the covenant A.1. to pay rent I respectfully adopt the views of Gibbs C.J. in Shevill v Builders Licensing Board(1981-82) [1982] HCA 47; 149 CLR 620 at p 627 that - "... a covenant to pay rent in advance at specified times would not, without more, be a fundamental ... term having the effect that any failure, however slight, to make payment at the specified times would entitle the lessor to terminate the lease. However, the parties to a contract may stipulate that a term will be treated as having a fundamental character ... and effect must be given to any such agreement." (underlining mine). 14. In the present case Clause C.1. is something "more", being an agreement to treat arrears of rent as a breach of a term of a fundamental character; as Gibbs C.J. said, effect must be given to it. 15. I note in passing that in all other Australian jurisdictions statutes have spelled out the circumstances in which relief against forfeiture for breach of covenants in a lease can be granted; see e.g. s.146 of Law of Property Act (Vic.). These reforms followed statutory reform in England stemming from 1852 regulating the jurisdiction in equity to relieve against forfeiture for non-payment of rent; see Gill v Lewis (1956) 2 QB1. The Courts in those jurisdictions are given a broad discretion to grant relief; the principles which govern the exercise of the discretion are discussed in Hyman v Rose (1911) 2 KB 234 (CA); (1912) AC 623 (H.L.). There is no such detailed provision in the statute law of the Northern Territory. It is conceded that the common law of landlord and tenant applies; the approach is laissez-faire, the rights and duties of lessor and lessee being governed by the express provisions of the lease. It appeared to be conceded in Baier v Heinemann (1962) Qd R 192 at p 204 that apart from statutory provision the Court has no power to relieve against forfeiture; but see the differing view expressed in Pioneer Gravels (Q'ld) Pty Ltd v T. and T. Mining Corporation Pty Ltd (1975) Qd R 151. The better view appears to be that there is a long-established jurisdiction in equity to restrain the exercise of the legal right to forfeit for breach of covenant, at any rate as far as concerns forfeiture for breach of a covenant to pay rent. The reason for that jurisdiction is stated by Lord Greene M.R. in Chandless-Chandless v Nicholson (1942) 2 KB 321 at p 323:- "... the old principles ... of equity always regarded the condition of re-entry as being merely security for

payment of the rent and gave relief if the landlord could get his rent." 16. There is in any event power under s.195 of the Act, on hearing this summons, to "make such order ... and impose such terms as (the Judge) may think fit". 17. The law leans against forfeiture of an estate in the sense that the lessor is put to strict proof of his case. The ordinary rules of construction apply to forfeiture clauses such as Clause C.1. though they are to be strictly construed. It is to be given a fair construction and the intention of the parties is to be ascertained from the language used, any doubts being construed against the lessor in whose favour the clause exists. The lessor must clearly show that there has been a breach of the covenant to pay rent; for example it must be shown that the full period of 7 days' grace in Clause C.1. has elapsed. 18. It is clear that the lessee here was more than 6 months in arrears in payment of the rent due when the lessor purported to terminate the lease on 25 February 1986.. In paras 4 and 5 of his affidavit of 19 March 1986 in reply to Mr Pastrikos' affidavit, Mr Ku explains the failure to pay the rent as follows:- "4. ... I do not deny that rental payments have not been made as described by the lease conditions but say that shortly after moving into occupation of the premises, it became quite apparent to me that I had been deceived and that false and misleading representations had been made to me by representatives of the plaintiff in relation to the business of the motel and it became quickly apparent that it simply was not economically possible to maintain the rental payments in view of the income derived from the motel. 5. The reason for me entering into the Lease Agreement with the plaintiff was so that I could carry on a business and hopefully trade profitably, and I was given assurances that this was more than possible." (underlining mine). In paras 6-20 of his affidavit Mr Ku explained that he had received from the lessor on 1 February 1985 details of the rental income from the motel, the cash flow in the off season for 5 months, and the peak season rates for 7 months. He contended that his actual receipts over the period of the lease to date amounted to about 1/5 (one fifth) of what the lessor "had represented to me I would receive" from these figures. Further, he said, representations made to him in February 1985 by the lessor as to outgoings "had been grossly understated". He contended in general that representations had been made to him by the lessor which were "grossly exaggerated and clearly misleading". He said that he had found it necessary to expend "large amounts of money" to upgrade the motel. On 16 October 1985 he had written to Mr Steven Pastrikos, a director of the lessor, outlining several proposals; the letter is annexure D to his affidavit. In that letter he referred to his outlays on renovations to the motel, to the fact that the business was running at a loss of $8,000-$9,000 per month, and to his difficulty in accepting that financial projections which he had been given by the lessor at the commencement of the lease had "any real basis in fact". He stated that it was necessary to spend $100,000 to bring the motel up to a proper standard. One of his proposals was that he pay for these improvements provided that the lease was re-negotiated to provide "a more realistic rental figure". 19. Mr Ku summarizes his case at para.16 of his affidavit:- "16. In the circumstances, I say that false and grossly misleading representations were made to me by the plaintiff at the time that I entered into this Lease Agreement and that I was lead (sic) by those representations to sign the Lease Agreement. It was necessary for me to expend large amounts of money in an attempt to rectify the situation and in an attempt to get the motel trading profitably to some sort of standard as had been represented to me was possible by the plaintiff, and I have suffered substantial economic loss as a result of the false and misleading representations made to me by the plaintiff." (underlining mine). 20. At paras 39 and 40 of his affidavit Mr Ku indicates the attitude which the lessee (defendant) presently takes:- "39. I deny that the defendant has repudiated the lease and deny that the lease is forfeit. 40. ... I say that the defendant has failed and refused to give up possession of the demised premises to the plaintiff and will continue to refuse and fail until losses incurred by the defendant due to the grossly misleading representations that were made to me at the time that the defendant entered into this lease are paid to me and a fair and equitable situation has been arrived at in relation to the plaintiff's position and that of the defendant.". 21. It is convenient to note at this point that the lease contains in Clause C.20. a comprehensive exemption provision, viz:- "C.20. The Lessee acknowledges and declares that no promise representation warranty or undertaking has been given by the Lessor or any agent or other person on its behalf in respect to the suitability of the said premises or any business to be carried on therein or to the fittings finish facilities or amenities of the said premises or as to any other business to be carried on in the said premises and the lessor and the Lessee mutually agree and delcare (sic) that the covenants agreements conditions and restrictions contained or implied herein cover and comprise the whole of the agreement between the parties and no further or other covenants agreements conditions restrictions or provisions shall be deemed to be implied herein or to arise between the parties by way of collateral or other agreement by reason of any alleged promise representation warranty or undertaking given or made by either party to the other on or prior to the execution hereof and the existence of any such implication or collateral or other agreement is hereby negatived.". 22. There is also Clause D, viz:- "D. The covenants and provisions contained in this lease and in any statutory provisions relating hereto are expressly agreed by the parties to cover and comprise the whole of the agreement between them and the existence of any implied collateral or other agreement warranty or representation relating hereto is hereby negatived AND IT IS FURTHER AGREED that no variation of this agreement shall be made otherwise than in writing and signed by both parties.". 23. I consider that Clauses C.20. and D. are a sufficient answer to the lessee's contentions set out in Mr Ku's affidavit. In the light of what the lessee agreed to in those provisions any misrepresentations in fact made by the lessor would not justify the lessee's non-payment of rent. The lessee is not entitled to take the law into its own hands by refusing to pay the rent while at the same time denying that it has repudiated the lease. If a lessee wishes to enforce against a lessor rights arising from misrepresentations by the lessor, it must do so by other means; e.g., by instituting an action for damages. Cases such as Heilbut, Symons and Co. v Buckleton [1912] UKHL 2; (1913) AC 30., indicate that in the common law of contract rescission is the only remedy for an innocent misrepresentation of fact and no action for damages lies, though the application of this principle to an executed lease is not clear. See also Whittington v Seale-Hayne (1900) 82 LT 49. What is put as misrepresentation may, despite provisions such as Clause D, be treated in practice as a contract collateral to the lease, breach of which attracts damages; see e.g. Webster v Higgin (1948) 2 All ER 127 and Esso Petroleum v Mardon [1976] EWCA Civ 4; (1976) QB 801. What is clear from Clauses C.20. and D. is that the misrepresentations alleged by Mr Ku form no part of the contract embodied in the lease. 24. In any event, for present purposes, none of the alleged misrepresentations made by the lessor would warrant non-payment of the rent. The lessee may be able to institute other proceedings in this Court; or perhaps in the Federal court, if it considers it has a claim under the Trade Practices Act. 25. As noted earlier, it is clear that the rent was in arrears for more than 6 months when the lessor took action to terminate the lease on 25 February 1986. The lessee has neither paid nor tendered the arrears then due. The lessor has neither expressly or impliedly waived the breach of covenant involved. The wording of Clause C.1. obviates the requirement of the common law (see Hill v Kempshall [1849] EngR 662; (1849) 7 CB 975; 137 ER 386) that there be a formal demand for rent prior to forfeiture. I consider that the lessee's failure to pay the rent for over 6 months amounts to a repudiation by the lessee of the lease within the terms of Clause C.1., a repudiation which the lessor accepted on 25 February 1986. I consider that the lessor validly terminated the lease on that date; in terms of s.192(IV), the lease became forfeited. On and from that date, the lessee was a trespasser. The lessee has failed to show cause why the lessor should not obtain an order for possession. That being so, and no case for relief against forfeiture having been shown, I consider that the proper exercise of the discretionary power under s.195 of the Real Property Act, requires that the termination of the lease should now be enforced by making an order that the lessor recover immediate possession. 26. This conclusion is sufficient to dispose of the application before me. In deference, however, to the careful and lengthy argument advanced by senior counsel for the lessor on other matters I briefly deal with them. 27. First, the obvious may be noted: the relationship of lessor-lessee arises out of their contract, but for centuries it has been recognized that a lease is not simply a contract but creates rights in rem, that is to say, an estate is created in the land leased. That is to say, a lease involves both a contract and the creation of an estate in land; there is privity of contract and privity of estate. It appears in past years to have been generally considered that a lease could not be terminated by acceptance by the lessor of a repudiation of the lease by the lessee, a method by which ordinary contracts may be discharged. The subject is usefully discussed in Brooking and Chernov "Tenancy Law and Practice (Victoria)" 2nd edit. (1980), pp 191-197. The better view, however, as the authorities stood in 1980, appears to have been that the contractual doctrine applies i.e. a lease may be terminated by the lessor accepting a repudiation by the lessee. The only authority to the contrary appears to have been Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd (1972) 1 QB319. 28. The lessor contended as an alternative to relying on Clause C.1., that it was entitled to treat some 10 alleged breaches by the lessee of its obligations under the lease, detailed in the lessor's solicitors' letter of 25 February 1986, as establishing that the lessee had repudiated the lease; and that the lessor was entitled to accept that repudiation and thus terminate the lease. As it was put in the letter of 25 February 1986, after detailing the alleged breaches:- "Our client considers that these and other acts and omissions of your company constitute a repudiation of your company's lease and our client hereby gives notice that it accepts your company's repudiation of its lease. ... We are instructed to demand immediate possession of the demised premises.". It can be seen that this approach does not rely on Clause C.1., which requires 14 days' notice to be given requiring remedy of a breach or non-observance of any of the 8 covenants specified therein, followed by failure to remedy, before a repudiation by the lessee was deemed to arise which could lead to a termination of the lease. No such notice to remedy any of the 10 alleged breaches of the lessee's obligations referred to in the letter of 25 February, was ever given. The 8 covenants in Clause C.1. appear to include (apart from rent) 4 of the 10 "acts and omissions" referred to in the letter of 25 February. 29. When, as here, the application of any express forfeiture clause such as Clause C.1. is set aside, the common law applies. Its application is clear: a breach of covenant by a lessee (apart, perhaps, from a covenant to pay rent) gives a lessor only the right to recover damages, or to obtain an injunction. See Bashir v Commissioner of Lands (1960) AC 44 at p 51. 30. However, the lessor relied on Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 59 ALJR 373 to support its case on this ground. Progressive Mailing House established that the presence of an express provision for termination for non-payment of rent does not exclude the lessor's right to terminate the lease for fundamental breach of the terms of the lease (or repudiation by the lessee), nor its right to recover damages for loss of bargain based upon such a breach. In other words, the ordinary principles of contract law apply to leases. In Progressive Mailing House the lessee was in breach of its covenants relating to repair, sub-letting and the observance of local authority requirements. Also, it had not paid the rent for 4 months. The High Court held that those breaches showed that the lessee intended no longer to be bound by the lease and constituted a repudiation of the contract embodied in the lease; and that this repudiation permitted the lessor to terminate the lease and sue for damages for the loss of the benefit of the covenant to pay rent. 31. At p 378 Mason J. noted that the balance of authority supported the proposition that the ordinary principles of contract law, including that of termination for repudiation or fundamental breach apply to leases. His Honour then discussed the question whether the presence of an express proviso for re-entry in a lease excluded any other right of termination of the lease by the lessor. He was clearly of opinion that it did not, but added:- "It is, of course open to the parties by their contract to regulate the exercise of common law right to determine for repudiation or fundamental breach. But in this case the parties have not attempted to do so." (underlining mine). 32. Herein lies the distinction between the present case and Progressive Mailing House. In this case the parties by Clause C.1. have expressly regulated the exercise of the common law right to terminate the lease for repudiation. I have already referred to the provision therein that 14 days' notice be given requiring remedy of breach, and a failure thereafter to remedy before there is a deemed repudiation. In Progressive Mailing House the forfeiture provision provided for termination by re-entry, i.e. it did not proceed on the same basis as Clause C.1. 33. That being so, and since no such notice to remedy breaches was given, I consider that the lessor cannot rely on any of the alleged breaches set out in its solicitors' letter of 25 February 1986 as amount to breaches of any of the 8 covenants listed in Clause C.1., so as to constitute a repudiation of the lease by the lessee. So far as those covenants are concerned, the provisions of Clause C.1. must be followed, because that is how the parties have regulated the question of repudiation for breach. In so far as any of the alleged breaches set out in the letter of 25 February 1986 do not amount to breaches of the covenants in Clause C.1., and are not in contention. I do not consider in any event (assuming that Clause C.1. does not cover the field as regards repudiation) that on the facts they establish a repudiation of the lease by the lessee. 34. In the result I uphold the lessor's contention (a) at p 3 hereof and reject its contention (b) on that page. As I indicated on p 16 I consider that the termination of the lease should now be enforced by an order that the lessor recover immediate possession. 35. These are the reasons for the order for possession made on 20 March 1986.