1. For the avoidance of doubt, I find and declare that the premises located and known as the Sweet Crown Patisserie and Café, located at 945A Station Street, Box Hill North, 3129 ('the Premises') are retail premises, within the meaning of that term as defined under s 4 of the Retail Leases Act 2003 (Vic).
2. Subject to Order 3 of these orders and UPON THE UNDERTAKING BY THE SECOND RESPONDENT to abide by any order the Tribunal may make as the damages in case the Tribunal shall hereafter be of the opinion that the first applicant shall have sustained any damages by reason of this order for which the second respondent ought to pay the first applicant, the Tribunal orders that until further order or agreement between the parties, the first applicant by itself, its servants and agents is restrained from entering into possession of the Premises.
3. Order 2 of these orders is conditional upon the second respondent accepting, prima facie, and until the substantive proceeding is heard and determined or further order, that its tenure of the Premises is subject to it assuming the role of the first respondent, including but not limited to the obligation to pay all rent and outgoings to the first applicant from 30 June 2025 and following and complying with the terms and conditions of the lease as between the first applicant and the first respondent ('the Lease'), as if it was a party to the Lease.
4. Order 2 of these orders does not restrain the first applicant from otherwise exercising its rights under the Lease as against the second respondent as if the second respondent were a party to the Lease, other than for matters which are the subject of the breach notice dated 11 July 2025.
5. The first applicant's application for an order for possession is refused liberty to reapply.
6. Costs reserved.

1. The first applicant is the registered proprietor of premises located in Station Street, Box Hill North ('the Premises'). Under a lease dated 20 November 2023, the first applicant, as landlord ('the Landlord'), leased the Premises to the second applicant, as tenant ('the Lease'). On or about 20 November 2023 (the same date that the Lease was executed), the second respondent, as subtenant ('the Subtenant'), subleased the whole or a portion of the Premises from the second applicant ('the Sublease').
2. On 2 February 2025, the second applicant transferred its leasehold interest to the first respondent ('the Head Tenant'), who thereupon became the sub landlord to the Sublease with the Subtenant.
3. On or about 24 April 2025, the Head Tenant and the Subtenant received a Notice of Termination from solicitors acting on behalf of the Landlord ('the Notice of Termination'). The Notice of Termination stated that the Head Tenant and Subtenant had failed to:

(a) pay rent and outgoings for February, March and April 2025;

(b) permit the Landlord access to the Premises for required repairs; and

(c) maintain public risk insurance cover.

1. On 2 June 2025, the Landlord filed an application seeking an order requiring the Subtenant to vacate and deliver up possession of the Premises to the Landlord. On 14 August 2025, the Subtenant filed an application seeking a declaration that:

(a) the Retail Leases Act 2003 (Vic) ('the RLA') applied to the Sublease; and

(b) an order restraining the Head Tenant from surrendering the Lease.

1. Notwithstanding the filing of the Subtenant's application, on or about 30 June 2025, the Head Tenant purported to surrender the Lease between it and the Landlord. This appears to have been accepted by the Landlord because on 11 July 2025, it served the Subtenant with a default notice pursuant to s 146 of the Property Law Act 1958 (Vic) ('the PLA') ('the Breach Notice'). In that respect, I find it reasonable to infer, for the purpose of this interlocutory injunction application, that the Landlord had accepted that the Subtenant now assumed the leasehold interest previously held by the Head Tenant under the Lease.
2. Having regard to the surrender of the Lease and the Breach Notice served on the Subtenant, the nature of the two applications has changed. Both Mr Baranyai of counsel, who appeared on behalf of the Landlord and Ms Riordan of counsel, who appeared on behalf of the Subtenant conceded that the lease between the Head Tenant and the Landlord was surrendered and that the Subtenant has assumed the role of Head Tenant. Therefore, it is not contested, for the purpose of this interlocutory injunction application, that a leasehold relationship exists as between the Landlord and the Subtenant.
3. Indeed, that scenario is entirely consistent with s 139 of the PLA which preserves a subtenant's leasehold interest where the head tenant has surrendered its leasehold interest. In Evans v Barboutis,[1] Hudson J explained that principle as follows:

Under the common law, as modified or supplemented by s 139 of the Property Law Act 1928 (s 122 of the Conveyancing Act 1919-1943 of New South Wales) it is clear that the surrender of his term to his lessor does not destroy the interest of a sublessee, and, for the purpose of preserving his interest, a sublessee in effect becomes tenant of the lessor as though the latter where the assignee of the reversion expectant upon the sublessee's term. This is so even in the case of periodic tenancies, and even though the sublease has been made without the consent of the lessor in breach of a covenant against subletting contained in the lease.[2]

1. Therefore, what is currently before the Tribunal is an application by the Landlord for an order for possession and an application by the Subtenant for an order, in the nature of an interlocutory injunction, restraining the Landlord from re-entering and forfeiting the Lease, in reliance upon the Breach Notice.

1. The legal principles relevant to the granting of an interlocutory injunction are well established and not in dispute. It is unnecessary to extensively repeat those principles in these short reasons, suffice to say that the Tenant must establish that there is a serious question or questions for trial and that the balance of convenience favours the granting of an injunction.[3] In Sudjalim Pty Ltd v Homle Pty Ltd,[4] Almond J summarised those principles as follows:

It is common ground that on an application for an interlocutory injunction, the Court will need to determine whether there is a serious question to be tried as to the plaintiff's entitlement to relief; whether the balance of convenience favours the granting of an injunction, including whether the plaintiffs are likely to suffer an injury for which damages will not be an adequate remedy; and whether there are any discretionary considerations which weigh for, or against, the grant of relief. These questions must be examined together.[5]

1. I shall apply those principles in determining this application for injunctive relief.

1. In the Breach Notice, the Landlord repeats the allegations of breach described in the Notice of Termination. It contends that the Subtenant:

(a) failed to pay rent and outgoings when due;

(b) used the Premises for a use that was not permitted under the Lease;

(c) failed to insure the Premises; and

(d) failed to give access to the Landlord for the purpose of effecting repairs or other work.

Does the Landlord have standing to seek a possession order?

1. Initially, Ms Riordan submitted that the Landlord has no standing to seek a possession order, or indeed, any order as against the Subtenant because there is no contract between those parties. However, since it has been conceded, for the purpose of this interlocutory injunction application, that the Head Tenant surrendered its leasehold interest and the Subtenant has assumed the role of the Head Tenant, the question of standing is no longer pressed. Nevertheless, the question is not irrelevant because at the time when the Landlord served the Notice of Termination dated 24 April 2025, the Head Tenant was still the primary tenant under the Lease. At that time, there was no contractual relationship between the Landlord and the Subtenant.
2. In other words, the breaches of the Lease alleged in the Notice of Termination could only be directed at the Head Tenant, notwithstanding that the Subtenant was also named in that notice. The fact that the Subtenant was also named is of no material consequence because the obligation to make good could only fall upon the Head Tenant, unless a similar or corresponding notice was served by the Head Tenant on the Subtenant.
3. Therefore, to the extent that the Notice of Termination claimed that the Head Tenant had failed to pay rent for February, March and April 2025, or permitted the Landlord access for repairs or had failed to maintain public risk insurance cover, were matters as between the Landlord and the Head Tenant; and not between the Landlord and the Subtenant.
4. In my view, those issues raise a serious question for trial whether the Landlord can rely upon the Notice of Termination and the allegations of breach set out therein, as a basis to terminate the Subtenant's leasehold interest or as a basis to gain possession of the Premises.
5. However, the Landlord subsequently served the Breach Notice on 11 July 2025, after the Head Tenant had surrendered its leasehold interest. In my view, it was, at that time, open for the Landlord to serve the Subtenant with such a notice, given that the Subtenant had assumed the role of Head Tenant after 30 June 2025.
6. Having said that, I am of the view that the Landlord's right to serve the Breach Notice upon the Subtenant can only relate to the Subtenant's obligations to the Landlord, which only crystallised after 30 June 2025. Prior to that date, the Landlord's rights to recover rent or enforce provisions of the Lease were against the Head Tenant. There was no direct contractual relationship between the Landlord and the Subtenant which would allow the Landlord to enforce those rights directly against the Subtenant.
7. In forming that view, I note that the terms and conditions of the Lease are almost identical to the Sublease. However, it was not argued before me that the second applicant (or the Subtenant), had, effectively, assigned its leasehold interest to the Subtenant. Therefore, I do not approach this interlocutory injunction on the basis that the Lease was assigned to the Subtenant. Rather, consistent with each party's submissions, I approach this interlocutory injunction on the basis that there existed a Lease and a Sublease.

Did the subtenant fail to pay rent and outgoings?

Failure to pay rent, GST and outgoings were not paid for the past three (3) months, As monthly rent is $4800 plus GST and outgoing which remains unpaid for each month of February, March and April 2025.

1. As indicated above, I find that there is a serious question for trial as to whether the Subtenant is obligated to pay rent and outgoings to the Landlord prior to 30 June 2025. Although there is some evidence before me of an informal agreement as between the Head Tenant and the Subtenant (or a direction by the Head Tenant) that the Subtenant pay all rent and outgoings under the Sublease directly to the Landlord, presumably in satisfaction of the Head tenant's obligation to do so. In that regard, I note that the amount of rent and outgoings payable under the Sublease are the same or substantially the same as the rent and outgoings payable under the Lease.
2. However, for the purpose of this interlocutory injunction application, I am not persuaded that an agreement between the Head Tenant and the Subtenant - that the Subtenant pay rent and outgoings due under the Sublease directly to the Landlord in satisfaction of the Head Tenant's obligations under the Lease and the Subtenant's obligations under the Sublease - materially alters the fact that there are two separate and distinct contractual relationships. Despite such an agreement, if it existed, there remains privity of contract as between the Head Tenant and the Landlord. In other words, even if the Subtenant did pay rent and outgoings to the Landlord, then, prima facie, the Landlord's rights to enforce the Lease remain against the Head Tenant; not the Subtenant.
3. In my view, the Subtenant's obligation to pay rent for February, March and April 2025 to the Landlord raises a serious question for trial.

1. The Breach Notice states:
   1. Obstruction of the Landlord's access to the Premises, preventing compliance with a local council repair notice (firewall);
   2. A breach of Clause 3.2.8 of the lease agreement, which expressly prohibits the Tenant from impeding the Landlord's lawful access or ability to carry out required make compliance works (firewall).
2. There is little or no evidence that the Subtenant refused access to the Landlord after 30 June 2025, being the period where the Subtenant assumed the role of Head Tenant. However, there is evidence of the Subtenant refusing to give the second applicant unconditional access for the purposes of Council-mandated inspections, in accordance with [its] obligations under the Sub- Lease.[6]
3. Mr Darafsheh, the director of the Subtenant, stated in his affidavit dated 16 July 2025 that the Subtenant had previously refused trade works being carried out without there being a formal written notice detailing the nature, timing, duration in specific areas affected by such works. He stated:

... In such circumstances, I expect the sub-landlord to compensate for any resulting business interruption losses. Alternatively, if the works are scheduled outside trading hours, I require a licensed food safety supervisor to monitor potential contamination risks and its security officer to safeguard the premises and equipment. I am willing to assist with arranging the professionals and will forward the associated invoices to the sub-landlord for reimbursement.

1. Leaving aside the question whether the Landlord had served a notice to the Subtenant after 30 June 2025 requesting access to the Premises to undertake council mandated works, it is difficult to determine whether the Subtenant refused access for that purpose or alternatively, whether the parties simply could not reach agreement as to how council mandated works were to be implemented. The differing statements of Mr Sihawi,[7] on behalf of the Landlord, and Mr Darafsheh on behalf of the Subtenant,[8] cannot be reconciled within the context of this interlocutory injunction application.
2. In my view, these differing versions of what has transpired give rise to a serious question for trial.

1. The Landlord contends that the Subtenant has materially changed the use of the Premises by:

(a) converting the kitchen into a shisha (hookah) smoking lounge with indoor seating;

(b) installing couches, hookah pipes, and other fire-hazard equipment; and

(c) operating after business hours in a manner inconsistent with the council's zoning and safety conditions

1. The Subtenant denies the allegations of changed or unauthorised use of the Premises. Mr Darafsheh deposed to the following:
   1. I categorically deny the allegations of misuse of the Premises as set out in Mr Sihawi's affidavit dated 2 June 2025. The lower ground floor, previously used as a kitchen, was repurposed as a seating area in response to increased customer traffic upstairs. This adjustment was openly discussed with Ms Alina Weisman, a Health Officer from Whitehorse Counsel, during her inspection on 14 March 2025. At her request, I confirmed the details of the change via email....
   2. In that correspondence, I advised that the downstairs area was no longer used for food preparation or storage, that the total customer capacity would remain unchanged, and that no structural alterations had been made. Ms Wiseman indicated that she would refer the matter to the Council's Planning and Building Department. To date, I have received no objection or further correspondence from the Council. This aligns with Ms Weisman's statement at the time, suggesting that there has been no breach of Council regulations.
   3. The maximum customer sitting across the Premises is limited 21 Chairs. Access to the downstairs seating area is permitted only between 10 AM and 6 PM and only when the upstairs area is at full capacity. From 6 PM onwards, the downstairs area is closed to the public and has occasionally been used privately by me or close friends outside business hours.
   4. I confirm that my business, Sweet Crown Patisserie and Café, does not offer or permit the use of shisha or hookah pipes during business hours or at any time to the public. Further, no food is prepared, served, or stored in the downstairs area after 6 PM by Sweet Crown Patisserie and Café which operate solely from the upstairs premises.
2. The Lease and the Sublease both state that the permitted use is a café and bakery. I accept that if it is found that the Premises were being used as a shisha or hookah smoking lounge, that would constitute a breach of the Lease and/or Sublease. However, I am not satisfied based on the evidence before me that the Premises are used for that purpose. Indeed, the allegation is contradicted by Mr Darafsheh in his affidavit cited above.
3. In those circumstances, I find that there is a serious question to trial whether this conduct amounts to a breach of the Sublease and by extension the Lease.

1. The Breach Notice claims that the Subtenant failed to provide public risk insurance cover. This allegation is expressly denied by the Subtenant.
2. There is little or no evidence from the Landlord substantiating this allegation. Indeed, the recent affidavit of Jafar Sihawi does not raise this issue. In contrast, Mr Darafsheh states in his affidavit dated 18 August 2025 that:
   1. In response to the allegation set out in the Notice of Termination [the Breach Notice], I maintain that:

1. I maintain public liability insurance over the premises.

1. I am not satisfied based on the material before me that the Subtenant has failed to maintain public liability insurance or other insurance required under the Sublease and by extension, the Lease. Therefore, I find that this allegation raises a serious question for trial.

1. As is often the case where a tenant seeks to restrain a landlord from re-entering retail premises, that the balance of convenience will favour granting interlocutory relief. This is because the business operations of the retail tenant are often so interconnected with the leased premises. Consequently, depriving the retail tenant of occupation makes it difficult if not impossible to compensate that party by an award of damages alone.
2. This case is no different. Moreover, there is no evidence before me highlighting what prejudice the Landlord might suffer if an interlocutory injunction was granted. Therefore, when weighing the interests of both parties, I am of the view that less injustice would be suffered by granting the injunction, subject to certain conditions.
3. In that regard, I consider that in circumstances where there remain questions as to the relationship between the Landlord and Subtenant, the injunction should be conditional upon the Subtenant accepting, prima facie, and until the substantive proceeding is heard and determined, that its tenure of the Premises is subject to it assuming the role of the Head Tenant. Therefore, it is obligated to pay all rent and outgoings to the Landlord from 30 June 2025 and following. In addition, the Subtenant must comply with its obligations as set out under the Lease, commensurate with the obligations that were previously imposed upon the Head Tenant.

1. Having regard to my findings, I will make an order restraining the Landlord from re-entering the Premises in reliance upon the Breach Notice, subject to the conditions outlined above. It therefore follows that the Landlord's application for an order for possession will be refused.
2. I will reserve the costs of this aspect of the proceeding, noting that under s 92 of the RLA, costs are not awarded in retail tenancy disputes unless special circumstances exist, as set out in that provision.

[1] [1957] VicRp 3; [1957] VR 35.

[3] Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57; Bradto Pty Ltd v State of Victoria [2006] VSCA 89; (2006) 15 VR 65.

[4] [2020] VSC 838.

[6] Affidavit of Emad Darafsheh dated 16 July 2025, [45].

[7] Affidavit of Mohammed Jafar Sihawi dated 2 June 2025, [2].

[8] Affidavit of Emad Darafsheh dated 16 July 2025, [45] - [46].