It is standard practice that many commercial leasing provisions requiring the landlord’s consent be qualified on the basis that the landlord must not “unreasonably withhold” its consent.
However, what constitutes the landlord unreasonably withholding its consent?
The concept of unreasonably withholding consent is not an abstract concept. In the case of Omar Property Pty Ltd and Ors v Amcor Flexibles (Port Melbourne) Pty Ltd (No 4) [2020] VSC 216, the Court added to the body of law setting out what it means for a landlord to unreasonably withhold its consent. The Court will generally determine that the landlord has unreasonably withheld its consent if the landlord refuses its consent for extraneous commercial reasons, reasons that have nothing to do with the landlord’s property interests or to obtain some collateral advantage. If the landlord’s motivations fall within these categories, a Court will generally find that the landlord’s refusal to grant its consent will be unreasonable.
