When going through the negotiation process associated with
signing a new lease term, it is of crucial importance that parties
to the lease take adequate steps to effectively safeguard their
position. The recent case of NB2 Pty Ltd v P/T/ Ltd
[2018] presents a prime example of a party to a lease (in this
case, the lessee) not only losing business, but rapidly going into
debt as a result of failing to protect their position within the
new lease.
Facts of the case
In this case, the lease in dispute was between the lessor, a
shopping centre, and the lessee, Panetta Mercato (also known as
Panetta Fruits) who apart from one other shop, essentially held a
monopoly as the only fresh fruit and vegetable shop located within
the centre's 'Fresh Food Precinct'. When the existing
lease expired in 2009, the lessors sought a significantly higher
rent as part of the new lease. This higher rent was agreed to on
the basis that the lessee would continue to enjoy the monopoly
