1. The legal principles concerning 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.[1]
2. In Sudjalim Pty Ltd v Homle Pty Ltd,[2] Almond J succinctly set out those legal principles as follows:

It is common ground that on an application for an 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. An apparently strong claim may lead a court to more readily grant an injunction where the balance of convenience is fairly even. A more doubtful claim, which nevertheless raises a serious question to be tried, may still attract interlocutory relief if there is a marked balance of convenience in favour of it.[3]

1. I approach this application with those legal principles in mind.

Was rent and outgoings payable prior to 26 July 2024?

1. Ms Arulrajah of counsel, who appeared on behalf of the Tenant and the second applicant ('the Guarantor'), submitted that it was a matter of logic to conclude that the commencement date of the Lease was pushed back until 26 July 2024, as the Tenant was unable to reasonably occupy and use the Premises until that time. Ms Arulrajah was unable to point to any legal authority in support of that proposition, although she drew my attention to the written statement of evidence of the Guarantor (and adopted as his evidence in the proceeding) together with the annexures to that statement as supporting that proposition. In written submissions dated 18 August 2025, Ms Arulrajah clarified that the legal basis for concluding that the commencement date was pushed back until 26 July 2024 is by virtue of agreement between the parties, or the application of the specific terms of Clause 8.1 of the Lease.[4]
2. In my view, the proposition that the commencement date of the Lease was pushed back until 26 July 2024 does not follow from what might be described as 'a matter of logic'. There needs to be some legal basis for that conclusion. I accept the most likely legal basis to be some agreement between the parties, which either expressly or by implication, varied the terms of the Lease so that the commencement date became 26 July 2024.
3. There is nothing in the statement made by the Guarantor which expressly evidences an agreement to vary the terms of the Lease or waive rent and outgoings. The closest statement to that proposition is the following:
   1. I could have terminated the Lease by right given the state of the Premises at the outset, however, due to the rare size of the Premises in that particular location it would have been and continues to be difficult to find an alternative premises. Additionally, relocation of my business was and is a costly venture, adding further loss to a business which has been under severe stress in the last couple of years as a result of the damage to the Premises.
   2. It is my understanding that the Landlord could also have opted to terminate the Lease at the outset or at a later date time due to the delay of its insurer in proceeding with rectification work. Both parties opted to continue the business relationship, with an understanding that the Tenant will take possession on completion of the rectification works.
4. In response to the matters raised by the Guarantor, the first respondent, Cam Hoa Ho, deposed to the following in his affidavit dated 11 August 2025:

1. I refer to paragraphs 13 and 14 of Manual's Affidavit in which he says that it was agreed between the parties that the Tenant would act as the Landlords' agent in facilitating repair works at the Premises (Repair Agreement) and say that:

(a) the Repair Agreement was pursuant to the scope of works set out in a letter to the Landlords from John Lynn Group dated 27 July 2022 (Scope of Works Letter). A copy of the Scope of Works Letter is at pages 101 to 107 of the Bundle; > > (b) the tenant would facilitate all of the works referred to in the Scope of Works Letter (Repair Works) except for the electrical works which was to be completed by the insurer; > > (c) the Landlords did not agree to suspend or amend the Commencement Date; > > (d) I disagree that the Landlords allowed the Tenant to attend to the make good the playground in the sense that the Lease had already commenced on the Commencement Date, and that the Tenant would need to remove the playground in order to use the Premises as a furniture showroom and storage facility; > > (e) I disagree that 'the Landlords permitted [Manuel] to keep the keys as [our] agent' because we had already handed over the keys before the break-in was known about, and the Lease had commenced on the Commencement Date.

5. In my view, the Guarantor's statement that the Tenant will take possession on completion of the rectification works does not go far enough to evidence, prima facie, that there was an agreement to push back the commencement date of the Lease. Clearly, the Tenant had taken possession, notwithstanding that it was undertaking remedial work. However, it was, at the same time, also de-fitting the children's playground and other installations of the previous tenant, which work was contemplated under the Lease.
6. Moreover, the contention that the commencement date of the Lease was pushed back is expressly contradicted by Mr Ho in his affidavit dated 11 August 2025. In my view, the evidence indicates, prima facie, that the Landlords suspended or waived the Tenant's obligation to pay rent and outgoings during the period that remedial work was carried out. However, the evidence does not go so far to indicate, prima facie, that the parties agreed to also amend the commencement date of the Lease.
7. An agreement to suspend or waive the Tenant's obligation to pay rent and outgoings while remedial work was carried out appears to be consistent with the Landlords having first demanded rent and outgoings in June 2024. Specifically, the material produced by the parties indicates that the first invoice sent to the Tenant was dated 30 June 2024, which comprised rent of $30,147.24 and outgoings of $3,430.33. The claim for rent was for the period 1 July to 31 July 2024. There is no evidence of any earlier invoice being raised by the Landlords. In my view, that fact is consistent with the Tenant's submission that no rent or outgoings was payable until July 2024. The second invoice raised by the Landlords is dated 27 August 2024. It claims the full amount of rent for the last 5 days of May, and the whole of June, July and August 2024. It is not clear why there is a discrepancy between the first and second invoice. However, even accounting for that discrepancy, there does not appear to be any rent or outgoings claimed for the first two years since the commencement date of the Lease, notwithstanding that the Tenant was in possession of the Premises during that period.
8. In my view, that raises a serious question for trial whether rent and outgoings where suspended or abated, either by agreement between the parties or by operation of clause 8.1 of the Lease, being a clause that has similar effect to s 57 of the Retail Leases Act 2003 (Vic) ('the RLA'). Clause 8.1 of the Lease states:

8.1 If the premises or the building is damaged so that the premises are unfit for use for the permitted use or inaccessible -

8.1.1 a fair proportion of the rent and building outgoings is to be suspended until the premises are again wholly fit for the permitted use, and accessible, and

8.1.2 a suspended portion of the rent and building outgoings must be proportionate to the nature and extent of the unfitness for use or inaccessibility.

1. I note that Mr Berger, counsel for the Landlords, submitted that there was evidence that the Tenant had partially used the Premises prior to 26 July 2025. He referred to several photographs exhibited to the affidavit of Mr Ho dated 11 August 2025. He submitted that those photographs were taken in September 2022 and depicted that the Premises or a portion of the Premises had been cleared of the children's playground equipment and in lieu thereof, pallet racks had been installed and stacked with boxed stock of the Tenant.
2. In response to that submission, Ms Arulrajah referred to the Guarantor's evidence, who stated that some stock or furniture was stored at the Premises and that this was done to give the appearance that the Premises were not abandoned, and thereby reduce the risk of a further break-in.
3. It is not clear from that photographic evidence how much of the Premises had been cleared and whether the damage to the Premises had been repaired. I note that the quotation prepared by John Lyng Group dated 27 July 2022, the loss adjuster engaged by the Landlords' insurer to assess the damage caused by the break-in, was in the amount of $385,598.48. In my view, this indicates, prima facie, that the damage was significant. That being the case, it is more likely than not that the damage could not be completely repaired between May and September 2022, especially, when one has regard to any delay in approving repair works, obtaining a quotation from the loss adjuster, engaging tradespersons to carry out the work and other delays before repair work could realistically commence.
4. Therefore, I find that there is a serious question for trial as to whether the payment of rent and outgoings was suspended or abated up to 26 July 2024.

Is rent and outgoings payable after 26 July 2024?

1. A secondary question arises whether the Tenant was liable to pay the full amount of rent and outgoings from 26 July 2024. The answer to this question is critical because the Second Default Notice claims rent and outgoings in arrears for the period before and after 26 July 2024. It is well-established that a notice of default will not be rendered invalid merely because one of the breaches alleged therein is not made out, in circumstances where other breaches are proven.[5] In other words, it is possible that the Landlords may lawfully rely upon the Second Default Notice if they can establish that some rent and outgoings was undeniably in arrears.

Reduction in Tenant's liability to pay rent and outgoings

1. As indicated above, the Tenant submitted that it could only partially use the Premises from 26 July 2024 until 28 March 2025 because the Premises did not have water supply. Ms Arulrajah submitted that the aggregate amount of rent payable after July 2024 until water supply was restored is $80,000 inclusive of GST. She submitted that this reduction in use was commensurate with the area of the Premises that could not be used for a Furniture Showroom. Therefore, the use of the Premises was limited to a Storage Warehouse. In that regard, reference was again made to clause 8.1 of the Lease and, by extension, s 57 of the RLA.
2. Mr Berger submitted that there is little or no evidence to substantiate that there was no water supply from 26 March 2025; but even if that could be proven, there was no evidence as to how that fact reduced the area of the Premises that could reasonably be used by the Tenant.
3. In contrast, Ms Arulrajah submitted that there was evidence to show how the reduced use impacted on what rent was reasonably payable over that period. In her written submission, she stated:
   1. We refer to Paragraph 23 of the affidavit of Mr Daher and the document marked Annexure "K" therein [Refer to Pages 3, 105/106 of the Dahar PDF] which is a quote for commercial storage leasing which is stated to be $100.00 per sqm per annum for 1200 sqm of space. The Guarantor made payment of $100,000 by reference to storage usage, which is the equivalent to 10 months' worth of storage fees at the premises. We submit that the Tenant has paid $20,000 in excess which we submit should be carried forward to cover the cost of the payment for April 2025...
4. The reference to a payment of $100,000 refers to a payment made by the Tenant on 1 May 2025, after being served with the First Breach Notice. Under the terms of the Lease, the amount of rent that would have been payable from 1 May 2024 until 1 May 2025, when factoring in fixed annual reviews of three percent, would be $328,879 plus GST or $361,766.90 inclusive of GST. Therefore, over the eight-month period from the end of July 2024 to the end of March 2025, the rent that would have been payable under the Lease is $241,177.93 inclusive of GST. However, Ms Arulrajah submitted that when taking either clause 8.1 of the Lease or s 57 of the RLA into account, only $80,000 inclusive of GST was payable for rent over that 8-month period. Ms Arulrajah submitted that the Tenant has, therefore, effectively overpaid $20,000.
5. As I have indicated, the total amount of rent payable over that eight-month period is $241,177.93 inclusive of GST. The payment of $80,000 (inclusive of GST) represents approximately 33 percent of the rent that would otherwise be due and payable. In addition, outgoings or a proportion of outgoings would have also been payable over that same period.
6. I accept that the threshold for establishing a serious question for trial is lower than having to prove a fact at trial. However, even adopting that proposition, I do not accept that the failure to supply water resulted in approximately two thirds of the Premises being unable to be used for the permitted use. There is no evidence before me to indicate what proportion of the Premises was to be used as a showroom and what proportion was to be used as a warehouse. Similarly, there is no evidence before me to indicate that a showroom or an area forming part of the Premises was set aside or allocated for the purpose of a showroom; and, by reason of the failure to supply water, resulted in that area siting idle - unable to accommodate viewing by the public or sales by staff.
7. Further, I find that the 'formula' adopted to calculate the reduction in use is problematic. It assumes that the reduction in use can be calculated by reference to the rent that would be payable if the Premises were only permitted to be used as a Storage Warehouse, rather than as a combined Furniture Showroom and Storage Warehouse. To that end, a comparison is made with another warehouse on the assumption that the rent payable for leasing the comparator would be the rent payable for the Premises if the Premises were only permitted to be used as a Storage Warehouse. However, there are many factors which influence how much rent is payable for one warehouse compared to another, which include where they are located, ease of access, floor area and other factors which make it difficult to draw a direct comparison between one and the other.
8. Moreover, even if I adopted the submission made by the Tenant that $80,000 inclusive of GST represented the amount of rent payable, having regard to the reduced use of the Premises, that amount is inconsistent with the submissions of the Tenant. Specifically, in its Submissions in Reply, the Tenant contended that it was typical for half of similar premises to be used for storage purposes and, presumably, the remaining half as a showroom.[6] However, the amount of rent said to be payable assumes that approximately two thirds of the Premises could not be used as a showroom.[7] Again, this highlights the difficulty in arbitrarily adopting a figure based on comparative premises which may be very different to the Premises.
9. I accept that in calculating any reduction in use, different formulas can be adopted. These formulas may include a reference to a reduction in floor area, a reduction in sales or other factors such as having to change the permitted use to something which would attract less rent. However, in this case, the evidence or submissions do not establish, even for the purpose of raising a serious question for trial, that the failure to have water supply for a limited period, reduced the use of the Premises by two thirds.
10. Therefore, even if I accept, for the purpose of this interlocutory injunction application, that no rent or outgoings were payable until after 26 July 2024, a considerable amount of rent and outgoings remain in arrears, as particularised in the Second Default Notice. Specifically, the Second Default Notice claims, in part, that rent and outgoings were not paid after 26 July 2024 until June 2025. Ignoring rent and outgoings that predate 26 July 2024, that means that at least $301,472.42 should have been paid as rent between 1 August 2024 to 30 June 2025 (ignoring a fixed rate increase on 1 May 2025), together with outgoings which accrued during that period.
11. According to the affidavit of Mr Ho dated 11 August 2025, the building outgoings for just insurance premiums and municipal rates from 26 July 2024 are:

(a) $22,976.99 for insurance over the period from 5 May 2024 to 5 May 2025 (pro rata from 5 August 2024 to 5 May 2025: $19,147.50);

(b) $19,272.28 for council rates over the period 1 July 2024 to 30 June 2025 (pro rata from 1 August 2024 to 30 June 2025: $17,666.26);

(c) $13,530.90 for insurance for the period 5 May 2025 to 5 May 2026.

1. Mr Ho also deposes to other outgoings, although it is unclear whether those charges relate to outgoings that predate 26 July 2024. Nevertheless, if those other outgoings are ignored and if the above outgoings are calculated pro rata from approximately 26 July 2024 onwards, the amount of outgoings in arrears is $50,344.66, presumably inclusive of GST.
2. Therefore, the amount of rent and outgoings for the period 1 August 2024 until 30 May 2025 is likely to be at least $351,817.07.
3. Against that amount, it is conceded that the Tenant paid:

(a) $56,833.33 on 19 August 2022 in advance of rent and pursuant to clause 22.7.1.3 of the Lease;

(b) $14,208.33 on 12 August 2024, following a private mediation;

(c) $100,000 on 1 May 2025 following service of the First Notice of Default.

1. In addition, rent for the month of June onwards has been paid. Nevertheless, and taking the June rent payment in account, that still leaves $180,775.42 outstanding under the Second Notice of Default (ignoring those outgoings which may relate to expenses which predate 26 July 2024).

Should payments by the insurer be taken into account?

1. The Tenant submitted that the Landlords received payment under a loss of rent insurance policy and that those payments should be considered. However, Berger submitted that those amounts cannot be considered because the Landlords are obliged to reimburse the insurer once payment was made by the Tenant.
2. Moreover, the ledger attached to the Second Default Notice, shows that the rental loss payments were made well before July 2024. In my view, those payments compensate the Landlords for non-payment of rent during the period leading up to the end of July 2024. I do not accept that those payments are to be considered in assessing any arrears of rental after July 2024.

1. Ms Arulrajah further submitted that the Tenant had a claim for loss and damage by reason of it not being able to occupy the premises prior to July 2024 or because it expended money in carrying out repairs for which it has not been reimbursed. Ms Arulrajah submitted that the Tenant was entitled to set-off that claim as against any remaining arrears of rent or outgoings, sufficient to extinguish the Landlords' claim for rent and outgoings in arrears. In contrast, Mr Berger submitted that the Lease contained a 'no deductions' clause, prohibiting the Tenant from raising an equitable set-off against rent and outgoings.
2. I accept that in retail tenancy disputes governed by the RLA, it may be arguable that a tenant can raise an equitable set-off to impeach a landlord's claim for rent and outgoings, even if the subject lease contains a 'no deductions' clause. Ms Arulrajah referred me to an earlier decision of this Tribunal in C & A Delaveris Pty Ltd v Bretair Pty Ltd,[8] where Deputy President Macnamara stated:
   1. It seems to me arguable first, that withholding or at least delay the payment of rent was justified and secondly, that there were no threats of legal action which could be regarded as economic duress in the circumstances. It will be recalled that the covenant to pay rent under this lease with the covenant to pay 'without deductions'. The authorities are not at one as to whether the inclusion of these words is sufficient to prevent an equitable set-off being relied upon to impeach the demand for rent. For reasons which I gave in Wytell Pty Ltd v Glowinski [2006] VCAT 454 the balance of authority in Victoria favours the view that the words 'without deduction' exclude a tenant from relying upon equitable set-offs to impeach the demand for rent. Here, however, the covenant which the tenant alleged was being breached was one which in accordance with Section 25 of the 1998 Act as amended, the lease was 'taken to provide', that is, it was a statutory implied covenant. Section 47 of the 1998 Act provides that a provision in a retail lease is void to the extent that it claims to 'exclude the application of any provision of this Act'. In my view, the inclusion of the words 'without deduction' in the covenant to pay rent is avoided by Section 47 to the extent that it limits the effect of the statutory implied covenant to repair would otherwise have, hence a breach of the repair covenant would be available as a set off in the present case.
3. For the reasons which follow, I do not find that the claim foreshadowed by the Tenant raises a serious question for trial that the Tenant has a right to set off its claim for damages against rent and outgoings in arrears. Critically, there is very little material produced to evidence that such a claim exists and what material has been produced is somewhat vague. For example, it is unclear whether the amounts said to be expended to carry out repairs relate to expenditure incurred by the Guarantor,[9] as opposed to the Tenant and even if it was expenditure of the Tenant, whether those expenses relate to the Landlords' obligation to repair or rather, comprised part of the work relating the Tenant's obligation to de-fit the children's playground and install its fixtures and fittings.
4. Although the Guarantor has given evidence of amounts which he has paid to tradespersons, it is unclear how much of that relates to making good repairs which the Landlords were required to undertake and how much relates to de-fitting the children's playground and installing the Tenant's fixtures and fittings. Given that uncertainty, I do not accept the contention that there exists a serious question for trial as to whether the Tenant can set-off a foreshadowed claim against rent and outgoings in arrears.
5. Moreover, the amount which is said to be out of pocket expenses is $27,227.48, which is significantly less than the amount of rent and outgoings in arrears detailed in the Second Default Notice. Therefore, even if that amount was able to be set off, it would be insufficient to extinguish the amount claimed.

1. Ms Arulrajah further submitted that even if it was not accepted that the Tenant had a prima facie right to set off its loss and damage as against rent and outgoings in arrears, rent should not be calculated from 26 July 2024, given that the Lease provided for a five-month rent free period. For the reasons which follow, I do not accept that proposition. First, as I have already indicated, I do not accept that there is a serious question for trial that the commencement date of the Lease was pushed back to the end of July 2024, notwithstanding that I have found that there is a serious question to trial as to whether rent and outgoings were abated up to that date.
2. Second, I accept the submission made by Mr Berger that over the period in which the Tenant had possession and prior to 26 July 2024, significant work had been undertaken to remove the children's playground and install the Tenant's fixtures and fittings. That work would have been undertaken under that five-month rent free period, but for the damage caused to the Premises. There is no evidence to suggest that the removal of the children's playground and installation of the Tenant's fixtures and fittings occurred after 26 July 2024. Therefore, I consider that the five month rent free period has been absorbed within the time that the Tenant first occupied the Premises until 26 July 2024.

1. Having regard to my findings set out above, I do not find that there is a serious question for trial as to the Landlords' right to rely upon the Second Default Notice to re-enter and forfeit the Lease. In my view, at least $180,775.42 remains outstanding under the Second Notice of Default, even if it is ultimately found that no rent or outgoings were payable until after 26 July 2024.
2. Given that finding. it is unnecessary for me to consider questions concerning where the balance of convenience lies.
3. Having said that, I accept that this proceeding has raised complex issues, which were not easily resolved without the Tribunal's intervention. Therefore, I consider it fair in the circumstances to stay the operation of my orders for a period of 21 days to allow the parties time to resolve their dispute or alternatively, allow the Tenant an opportunity to make an application for relief against forfeiture, should it so choose.
4. Although no application was made for relief against forfeiture, I consider that any such application should have regard to my findings set out above and particularly, to my prima facie finding as to the outstanding amount under the Second Notice of Default.

[1] 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.

[2] [2020] VSC 838.

[4] Submissions filed by the applicants dated 18 August 2025, [4].

[5] Re Automotive and General Industries Ltd v Bryson Industries (Vic) Pty Ltd (2012) V ConvR 54-801, (SC(Vic), Adam J, 1 May 1970, unreported).

[6] Submissions in Reply, 25 August 2025, [29].

[7] The amount of rent said to be payable from 26 July 2024 until 28 March 2025 was $80,000 inclusive of GST which represented approximately 33 percent of the rent that would otherwise be payable (excluding any payment of outgoings). In other words, one third of the rent, which is commensurate with one third of the use of the Premises.

[8] [2009] VCAT 1663.

[9] In the Reply Submissions of the Tenant dated 25 August 2025, the Tenant concedes that the Landlords permitted the Guarantor to undertake the de-fit of the playground.