Robert Hay’s post – Breach of s 52 can amount to repudiatory conduct

For example, assuming that the breach constitutes a repudiation of the lease (not all breaches are a repudiation – but that is a topic for another post), it might be possible for a tenant to accept the landlord’s repudiation, terminate the lease and use the threat of litigation to renegotiate the terms of its lease on more favourable terms.

However, this would be a bold strategy because:

1. the landlord may be able to find another tenant, causing loss of goodwill, investment in fitout and all the usual problems that come with the loss of a retail premises lease; and
2. the tenant would then need to sue for damages. This may be a hollow remedy given that:

(a) the tenant is only entitled to its loss. Many smaller retail tenants have significantly reduced profits after payment of directors’ salaries; and

(b) the litigation would take place in a no-cost jurisdiction. Litigation over the loss of a tenancy requires either a forensic accountant or a valuer in addition to the usual legal costs, which may consume a significant portion of the damages award.