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Ropemaker Properties v Noonhaven [1989]

Facts

  • A lease provided that premises could only be used as a high class restaurant or night club, with a covenant prohibiting immoral use
  • The premises were used for an immoral purpose (prostitution)
  • The lessor commenced forfeiture proceedings

Issue

  • Could relief from forfeiture be granted?

Decision

  • Yes, exceptionally

Reasoning

  • Usually, a breach of covenant against immoral use will not allow relief from forfeiture to be granted
  • Exceptionally, such a relief can be granted (even though the lease had been forfeited)
  • Exceptional circumstances here included
    • the substantial loss which forfeiture would cause to the lessee (and windfall to the lessor)
    • the fact that the immoral use had ended
    • the fact that there would be no lasting stigma
    • the fact that relief would not cause the lessor to be left with unacceptable tenants
    • the fact that the lessee intended to dispose of the lease
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