The Supreme Court of Victoria has recently clarified how the Victorian Civil and Administrative Tribunal (VCAT) can deal with conditions attached to relief from forfeiture. In Paramount Investments Group Pty Ltd v Club Fogolar Furlan Melbourne [2025] VSC 90, Justice Croft confirmed that although VCAT usually cannot change its final orders, it can vary the conditions placed on relief from forfeiture in some cases. This decision is significant for both landlords and tenants navigating lease disputes in Victoria.
What is relief from forfeiture?
Relief from forfeiture is a remedy available when a landlord terminates a lease because of a tenant’s breach, most commonly for unpaid rent. Without relief, the tenant loses possession of the premises and the lease comes to an end. Relief gives the tenant a second chance – it allows them to regain possession, provided they meet conditions such as paying rent arrears, interest, or costs. Because it is an equitable remedy, the court (or VCAT) has some flexibility in how it is applied.
In this case, Justice Croft emphasised that the purpose of forfeiture was mainly to act as security for rent. This meant that VCAT had the power to adjust the conditions to make sure the outcome was fair.
What does this mean for landlords and tenants?
This decision is important for both sides:
- Landlords should know that VCAT can change the conditions on relief from forfeiture, even after a tenant has defaulted.
- Tenants must act carefully and cannot assume they will always get a second chance. Relief is not automatic and depends on the circumstances.
Why compliance with conditions matters
The Court was clear that tenants cannot treat the conditions of relief as optional. If a tenant defaults on those conditions and seeks further relief, they must show good reasons for their non-compliance. Relief is not automatic – it will only be granted where equity demands it.
For example:
- A tenant who misses a payment because of genuine financial hardship caused by unforeseen circumstances may still be able to seek further relief.
- A tenant who simply ignores their obligations or delays payment without justification is unlikely to succeed.
Practical implications for landlords and tenants
This ruling has practical consequences for both parties:
- Landlords should be aware that even if a tenant defaults on agreed conditions, VCAT may still allow them to remain in possession if the circumstances justify it. This can create some uncertainty, but it also ensures fairness in cases where forfeiture would be too harsh.
- Tenants should not assume that relief will always be available. They must act quickly, comply with conditions, and be ready to explain any failure to meet their obligations.
If you are a landlord or tenant involved in a lease dispute, it’s essential to seek legal advice early. Issues around forfeiture and relief can become complex and have serious financial consequences.
VCAT’s powers in retail vs non-retail leases
A further point of interest in this case is VCAT’s jurisdiction. Under section 89 of the Retail Leases Act 2003 (Vic), VCAT clearly has the power to grant relief from forfeiture for retail leases. For non-retail commercial leases, the position is less clear. Justice Croft suggested that VCAT may not have the same power under the Australian Consumer Law and Fair Trading Act 2012 (Vic). This distinction matters because it could affect whether a party needs to go to VCAT or the Supreme Court to resolve a dispute. It remains an area of legal debate and one to watch in future cases.
Key takeaways
- VCAT cannot generally vary its final orders, but it can change the conditions of relief from forfeiture where it is fair to do so.
- Tenants must take compliance with conditions seriously — further relief will only be granted where there is good reason.
- Landlords should be prepared for the possibility that conditions may be varied, even after default.
- The scope of VCAT’s powers in non-retail leases is still uncertain, highlighting the importance of tailored legal advice.
📖 You can read the full judgment here: Paramount Investments Group Pty Ltd v Club Fogolar Furlan Melbourne [2025] VSC 90 (AustLII).
How we can help
At MST Lawyers, we act for both landlords and tenants in lease disputes and can provide clear advice about your rights and options if forfeiture becomes an issue. Our Property & Leasing and Litigation and Dispute Resolution teams work closely together to resolve matters quickly and cost-effectively, whether through negotiation, VCAT, or the courts.
If you need advice on relief from forfeiture or any other leasing issue, please contact us on (03) 8540 0200 or visit our Property & Leasing or Litigation and Dispute Resolution pages to learn more.
