Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd

Introduction

1. These proceedings concern a lease of a service station and motel premises located on the Great Western Highway at Yetholme, between Lithgow and Bathurst. The premises consist of the land contained in folio identifier 100/1150054.
2. The plaintiff is the registered proprietor of the land. There is a registered lease in respect of the land (AF572475) for a 10 year term ending on 17 January 2020, with three options for renewed terms of 5 years each. The original lessees under the lease transferred the lease to the defendant by deed made in about 2010, although the Transfer was not registered until about March 2012. I note that the name of the defendant is incorrectly spelt in the folio of the register but nothing turns upon this in the present case.
3. The parties are in dispute about whether the defendant validly exercised the option to renew in 2019 so as to become entitled to a further term of 5 years from 18 January 2020. However, even if the option was validly exercised, the plaintiff claims that on 26 October 2020 it validly terminated the lease for breaches by the defendant. The validity of the asserted termination is challenged by the defendant, including on the basis that the termination was precluded by the provisions of Schedule 5 to the Conveyancing (General) Regulation 2018 (NSW) ("the Conveyancing Regulation"). Schedule 5 to the Conveyancing Regulation applies to certain commercial leases. The Schedule, which was inserted into the Conveyancing Regulation on 24 April 2020 (and subsequently amended), contained what are described as COVID-19 pandemic special provisions. An important issue in the case is whether the provisions of the Schedule applied to the lease and operated so as to prevent the purported termination, and otherwise affect the positions of the parties under the lease, including in relation to the amount of rent payable.
4. Against the possibility that the plaintiff validly terminated the lease, the defendant seeks relief against forfeiture. In relation to that matter, and also the plaintiff's claim to recover amounts due under the lease, issues arose concerning the quantification of the amounts of rent and operating expenses that have fallen due. These issues were narrowed to an extent by an agreement reached between the parties on 5 November 2021, following a mediation that took place on 21 October 2021. The agreement concerned amounts of rent to be waived or deferred in respect of rent payable in the period May 2020 to September 2021, and a waiver of part of the interest amount claimed by the plaintiff under the terms of the lease.