In certain instances, a commercial landlord may prefer to pursue a tenant for unpaid rent and outgoings rather than taking the necessary steps to terminate their lease.
What then happens if the landlord commences proceedings against the tenant to recover unpaid rent and outgoings, but then additional amounts of rent and outgoings go unpaid? Can the landlord amend their claim, or will they need to commence separate proceedings to recover the additional unpaid rent and outgoings?
In Western Australia (unlike other jurisdictions in which there has been legislative reform), courts are still bound by the Eshelby principle,[1] which prevents a landlord who commences proceedings against a tenant from seeking to recover additional amounts of rent and outgoings which fall due after litigation has been commenced in those proceedings.[2]
It follows that, for the time being at least, it would be necessary for a landlord in such circumstances to commence separate proceedings, and then seek orders for the two proceedings to be consolidated to allow “the unpaid rent [and outgoings] claimed up to trial as between the same parties under the same lease to be dealt with as a matter of procedural convenience at the one trial”.[3]
In light of the costs implications and potential for delay, consideration should be given to whether this is the best way forward on a case-by-case basis.
How we can help
For assistance with commercial property disputes, including recovery of unpaid rent and outgoings, please contact our Michael Stork.
[1] Eshelby v Federated European Bank Ltd [1932] 1 KB 423.
[2] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 16] [2017] WASC 340, [121] – [124].
[3] Mineralogy Pty Ltd v Sino Iron Pty Ltd [No 17] [2018] WASC 8, [6].