A lease agreement was entered into between Andrew and Kathy. Under the terms of the agreement, Kathy leased her premise located in Rownville Flats in New South Wales to Andrew for a period of five years. The purpose for which Andrew took possession of the property was for practicing physiotherapy and for conducting exercise classes. The period of lease commenced from 1 April 2015. The lease was a registered lease and Kathy was the owner of such property.
In August 2015, some construction and repairing works were being carried on in the arcade for three weeks which caused difficulty to Andrew in carrying out his physiotherapy practices. Subsequently, he complained about such repairing activates to Kathy. In a reply Kathy confirmed him that the repairing work would not be carried on for long. Andrew also made some complaints regarding some stuffs in the premises which needed replacement. But Kathy did not pay any attention to him.
Andrew was aware of the fact that he had to incur a lot of expenses for doing those replacements and therefore he took a decision of giving up his business. He decided to sublet the lease to Courtney who agreed to continue with the conducting of exercise classes. Kathy did not permit for the assignment of the lease.
Legal issues involved in the case
The rent of properties in New South Wales is governed by Residential Tenancies Act 1987 and the Landlord and Tenant (Rental Bonds) Act 1977(Stratton, 2013). Under the provisions laid down under the legislations, a tenant can only sublet the tenanted premise with the consent of the landlord (Hepburn& Jaynes, 2013).
In the instant case, under the terms of the present agreement (Clause 5) between the landlord (Kathy) and tenant(Andrews), the tenant was not allowed to assign the rented premise or sublet it to any other person without the written consent of the landlord.
Therefore, legally the tenant has no right to sublet the premise to any other person without taking the consent of the landlord (Pagura, 2015).But in the present case, it would be highly unfair to Andrew if he is not allowed to sublet the premise to Courtney. It is an established principle that the Court may sometimes deviate from the actual language of a legislation to do justice to the parties (Douglas et al., 2015). The Courts have the responsibility to dispense justice to the parties appearing before it. It may not be always possible to render complete justice by adhering to the actual provision laid down under the legislations. Sometimes, it becomes inevitable to deviate from the actual provisions of the legislations so that complete justice may be done to the parties.
Under the facts of the instant case, Andrew could not be expected to run a sound business given the number of obstructions he was facing. Andrew was having a lot of difficulty to conduct physiotherapy activities in the rented premise. Firstly there were things which needed immediate replacement but the landlord paid no heed towards addressing such issues. Secondly, the repairing activities which were going on in Kathy’s arcade caused much hindrance to Andrew. Under these circumstances, Andrew could not be reasonably supposed to fulfil the purpose for which he had taken the premise on lease. Therefore, Andrew had rightly decided to give up his business as he was not being able to make any profit out of the physiotherapy activities. Things became worse when Kathy declined to cooperate with him. Given that Andrew was facing difficulty in running the business, Kathy could have extended her helping hand by replacing the needful things in the premise. Thus, the landlord has acted in an unfair manner by two ways: firstly, by carrying out repairing works which caused a lot of inconvenience to Andrew for a period of continuous three weeks and secondly by not cooperating with her tenant in replacing the carpet or repairing the tap.
Kathy should have allowed Andrew to sublet the lease because logically if we see Kathy had no objection in letting someone to conduct physiotherapy activities in her premise. The person to whom Andrew wanted to sublet the premise agreed to carry on the similar activities which Andrew was doing in the premise. Hence, when a landlord can rent her premise to a tenant for carrying on a particular activity, there is no reason why she cannot allow the same premise to be used by another person for carrying on similar activities in the premise (Wosskow, 2014).
She could have possibly disallowed the selling of health products and exercise equipment from the premise but she could have easily allowed Courtney to conduct physiotherapy activities in her premise. The act of landlord in this case is quite unreasonable and unjustified.
Moreover, Andrew was not in a position to incur so much expenses in replacing the relevant things in the premise which needed immediate replacement. His decision to give up the business is quite reasonable under the circumstances. Kathy’s refusal to let Andrew sublet the premise to Courtney is absolutely unreasonable. In fact so much discretion should not be given to the landlord; otherwise it would be highly unfair to the tenant. A landlord is supposed to take care of all the necessities required in a premise. If she did not want her premise to be sublet by the tenant, should have at least agreed to replace the things which the tenant demanded for. Nevertheless, she had refused to do the necessary replacements. Hence, the landlord has not been fair to the tenant and she has taken undue advantage of the fact she was the owner of the premise. The tenant in the present circumstances has not been able to carry on his business properly in the rented premise and the adverse conditions have not let his business prosper. Thus, it has been unfair to the tenant and therefore, in the light of the present circumstances, he should be allowed to sublet his premise to Courtney.
Though, the clause under the lease agreement does not allow the tenant to sublet the rented premise without a written permission of the landlord, but circumstances of the instant case are special and they need special attention as well. Had the landlord been cooperative and had she given all support to her tenant, we could have drawn a different conclusion. But, in the instant case, the landlord has simply made abuse of her discretionary power and therefore she should be restrained from disallowing Andrew to sublet the premise. This would be a prudent decision in the light of equity and good conscience.
Douglas, J., Atkins, E., & Clift, H. (2015). Judicial Rulings with Prospective Effect in Australia. In Comparing the Prospective Effect of Judicial Rulings Across Jurisdictions (pp. 349-358). Springer International Publishing.
Hepburn, S. J., & Jaynes, S. (2013). The nature and scope of rights of removal. Property Law Review, 2(3), 123-138.
Pagura, I. (2015). Law report: Leases,'what you need to know'. Journal of the Australian Traditional-Medicine Society, 21(2), 119.
Stratton, J. (2013). Case study 2: The right to housing. Hot Topics: Legal Issues in Plain Language, (85), 28.
Wosskow, D. (2014). Unlocking the sharing economy: An independent review.