Can I Pay a Fine Instead of Losing My Lease?

Division 2 of Part XV of the Land Act 1996 gives the Minister a middle course between doing nothing and taking the land back. It is the provision a lessee facing a show-cause notice should be asking for.

Section 124(1) — the alternative

Note the structure. This is an alternative to forfeiture under section 122, not an addition to it. And it has its own show-cause step: the lessee is entitled to be heard before a fee is imposed, just as before a forfeiture.

What it covers — and what it does not

Section 124 applies where a term, covenant or condition of a State lease is not complied with. That maps onto section 122(1)(d)(i) — the breach-of-condition ground — which is the ground most forfeitures rest on, including unmet improvement conditions and breach of the section 82(3)(d) purpose condition.

It is not expressed to cover the other section 122 grounds — six months’ unpaid rent, unpaid fees, unpaid improvement money, or a lease obtained by knowingly false statements. For rent arrears the parallel relief is remission or postponement under section 83(5).

Section 124(2) — the amount

Two features:

• The cap is per month, not per breach — K100 for each month of non-compliance. A breach running three years attracts a fee capped at K3,600.
• It runs forward as well as back — “has continued or continues”. The fee is not a one-off penalty; it accrues while the breach persists.

Section 124(3) — the sting

That is an accelerated forfeiture. The protections in section 122(2) and (3) — a further notice to show cause, the requirement that you have failed to comply or failed to show good cause — are expressly bypassed. You have already had your show-cause opportunity at the fee stage.

So the practical position is: accepting a non-compliance fee buys you the lease, but only if you pay the fee on time and remedy the breach. An unpaid fee is a faster route to forfeiture than the original breach was.

Asking for a fee instead of forfeiture

Section 124 is exercised “in his discretion” by the Minister. It is not an entitlement, and it will not be considered unless raised. A lessee responding to a section 122 show-cause notice should ask for it expressly and in the alternative.

A persuasive request usually shows:

1. Substantial compliance — most of the improvement conditions met, significant sums spent, the land genuinely in use;
2. That the breach is being cured, on a definite timetable with contracts and dates;
3. That the breach is technical or partial rather than a wholesale failure to develop;
4. Third-party consequences of forfeiture — a registered mortgagee, sublessees, employees, tenants;
5. Cause outside your control — access disputes, disaster, State approvals outstanding; and
6. That forfeiture would be disproportionate, engaging section 41 of the Constitution.

Combine it with the relief applications

Section 124 addresses the consequence of the breach. It does not fix the condition you cannot meet. Pair it with:

• Section 118(2) — relaxation or modification of the covenants and conditions where special hardship would otherwise be caused, after a Land Board report; and
• Section 118(1) — variation of the purpose, where the use has genuinely changed.

The strongest position is: a non-compliance fee accepted and paid, the condition relaxed to a timetable you can meet, and the work then done.

Challenging a fee or the forfeiture that follows

Both the imposition of a fee and a section 124(3) forfeiture are exercises of statutory power reviewable in the National Court under section 155(3) and (4) of the Constitution — including where no show-cause notice was served under section 124(1), where good cause was shown and not considered, where the fee exceeds the statutory cap, or where the principles of natural justice in section 59 were not observed.