Commercial tenancy law [Fourth edition.] 9780409343373, 0409343374

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Commercial Tenancy Law Fourth Edition

Commercial Tenancy Law Fourth Edition

The Hon Clyde Croft BEc, LLM (Mon), PhD (Cantab), FAAL, LFACICA LFIAMA, JFAMINZ, FCIArb A Judge of the Supreme Court of Victoria Formerly one of the Senior Counsel for the State of Victoria

Robert S Hay BA, LLB (Hons) (Tas), LLM (Mon) One of Her Majesty’s Counsel Castan Chambers, Melbourne

Luke Virgona LLB (Mon), MCom (Swinburne) Barrister-at-Law Dawson Chambers, Melbourne

LexisNexis Butterworths

Australia 2018

AUSTRALIA

ARGENTINA AUSTRIA BRAZIL CANADA CHILE CHINA CZECH REPUBLIC FRANCE GERMANY HONG KONG HUNGARY INDIA ITALY JAPAN KOREA MALAYSIA NEW ZEALAND POLAND SINGAPORE SOUTH AFRICA SWITZERLAND TAIWAN UNITED KINGDOM USA

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ISBN:

9780409343366 (hbk). 9780409343373 (ebk).

© 2018 Reed International Books Australia Pty Limited trading as LexisNexis. First edition, 1990. Second edition, 1997. Third edition, 2009. This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Bembo Std and Optima LT Std. Printed in Australia. Visit LexisNexis Butterworths at www.lexisnexis.com.au

Preface This book is designed to be a comprehensive analysis of the law throughout Australia relating to all aspects of commercial leases. Unlike residential leases, which in most jurisdictions are now codified by residential tenancies legislation, commercial leases are still primarily governed by the common law. This is the case even where these leases are subject to retail or shop leases legislation in the various jurisdictions as that legislation tends to supplement and rely upon the common law rather than provide anything in the nature of a comprehensive legislative code. Consequently, the majority of this book consists of an analysis of common law principles. The substance and application of common law principles has, in a number of instances, been modified by legislation other than the retail or shop leases legislation. The book also examines this legislation, with particular attention being given to the Australian Consumer Law. The retail or shop leases legislation is considered in separate chapters, jurisdiction by jurisdiction. This legislation has, in many instances, been the subject of major revision since the second and third editions of this book and has also been the subject of significant developments in the case law. Consequently, this edition has been substantially revised in its treatment of this legislation and its developed and developing case law. There have also been significant developments in the common law since the third edition in 2009, and these are dealt with comprehensively. In particular the treatment of the construction of leases and agreements for lease, equitable estoppel, set-off, leases and mortgages, rent and rent review and the contractualisation of leases, with particular reference to repudiation and its acceptance, has been revised and expanded. This was also the case with the second and third editions as these are areas of active development in the law of landlord and tenant. This fourth edition of Commercial Tenancy Law, like the three previous editions of this work, has grown out of its predecessor edition. The first

edition, in turn, grew out of and revised and expanded the second edition of Brooking and Chernov, Tenancy Law and Practice — Victoria, which had, in its two editions (Butterworths, 1st ed, 1972; 2nd ed, 1980), itself grown out of earlier works by Anderson and Brooking and its predecessor Tenison-Woods and Anderson; all of which were influential and much used by, mainly, Victorian practitioners. As a result of this process, Commercial Tenancy Law has a long pedigree and one which dates back — now around 70 years — to the publication of Landlord and Tenant Legislation of Victoria (Butterworths, 1948) by Ms Mary Tenison-Woods and Mr Kevin Anderson (later a Judge of the Victorian Supreme Court). Again this work was built upon and expanded in Landlord and Tenant (Butterworths, 2nd ed, 1958; 3rd ed, 1959) by Anderson and Brooking. As indicated, this work, again expanded, became Brooking and Chernov. This book, like its previous editions, continues to owe an enormous debt to the work, scholarship and practical experience of The Hon Mr Justice Brooking and The Hon Justice Chernov AC (both of whom were formerly Justices of Appeal of the Victorian Supreme Court and in the case of Justice Chernov formerly the Governor of Victoria), and their predecessors, whose writings continue to form a significant part of this work. However, this book, unlike Brooking and Chernov, but like its previous editions, is written as an Australian book and deals with legislation in all states, applicable Commonwealth and national scheme legislation (such as the Australian Consumer Law and the Corporations Act) and also the common law. For reasons of space, we have been unable to cite the full text of the relevant legislation on each point in all states. Where there is common legislation throughout the states, our approach has been to cite the text of the New South Wales or Victorian provision and to give the citation to the equivalent provisions in the other states (and in some instances, the territories). Also, unlike Brooking and Chernov, as in the previous editions, this work omits all reference to residential tenancies legislation and cases relating to the lease of dwelling houses except where they are relevant to general principles also applicable to commercial leases. This book contains a detailed analysis of the present law. As with the previous editions, it will be of particular interest and assistance to counsel,

solicitors and corporate lawyers throughout Australia. It will also be of considerable interest and assistance to everybody affected by or involved with commercial leases; in particular estate agents, land agents, academic lawyers and undergraduate and postgraduate law students. It is hoped that this edition will continue to provide a useful source of reference for law students enrolled in property law and be an essential text for students enrolled in specialist landlord and tenant courses at the LLB, LLM and JD level currently offered in various Australian law schools. We have made every effort to ensure that this book is up-to-date at the time of writing. The law is stated as available to us on 31 August 2017, except where a later date is specified in the text. Updates on recent developments in commercial tenancy law may be obtained regularly at www.roberthaypropertybarrister.wordpress.com. We all wish to thank Professor Adrian Bradbrook for his enormously significant work and contribution as author and editor of the preceding three editions of Commercial Tenancy Law: all of which contributes to the content and depth of this work. We also wish to thank Ms Amy Hando, Ms Tracie Stewart and Mr Thomas Egan for their assistance with research, checking and the preparation of tables for this edition. Finally, we all wish to thank the staff at LexisNexis, particularly Ms Georgina Gordon, Commissioning Editor — Texts, for their work in steering this fourth edition though all the developmental and final stages of publishing. Serviceton 17 October 2017

C E Croft R S Hay L A Virgona

Landlord and Tenant Act Comparative Table Topic

Landlord and Tenant Act 1958

Leases

Pt I

Provisions as to Execution and Seizure by Third Party

Pt II

Emblements: Fixtures

Pt III

Distress for rent abolished

Tenant may remove buildings and fixtures they have installed Summary Proceedings to Recover Possession Removal and Disposal of Goods Left on Vacated

Date of Amendment

Current Position*

1 August 2010

Repealed and not replaced, the legislature being of the opinion that the legislation was redundant.

1 August 2010

Not replaced, but as noted by Garde J in Asian Pacific Building Corporation Pty Ltd v Sharon-Lee Holdings Pty Ltd [2013] VSC 11 at [24], distress for rent remains abolished in accordance with s 14(2)(a)–(d) of the Interpretation of Legislation Act 1984.

s 28(2)

1 August 2010

Replaced by s 154A of the Property Law Act 1958, which now gives the tenant the option to pay the costs of repair, rather than the tenant having a specific obligation to repair.

Pt IV

1 September 2012

s 12

Pt IVA

1 September 2012

Repealed and not replaced (but see, generally, various Court Rules). Repealed and replaced by Pt 4.2 of the Australian Consumer Law and Fair Trading Act 2012 (ACLFT Act), except for leases prior to the ACLFT Act which are still governed by Pt IVA of the LL&T Act (ss 9,

Premises

56(5) ACLTF Act).

(Continued) Definitions of ‘goods’ and ‘tenant’

s 42A

1 September 2012

Not replaced in the ACLFT Act, but see ss 54 and 56(1) of that Act.

Landlord may remove and store goods

s 42B(1)

1 September 2012

Not replaced in the ACLFT Act.

s 42B(2)

1 September 2012

Replaced by s 59 of the ACLFT Act, which requires an owner of goods left behind who was not an occupier to pay the charge before recovering the goods (and see s 69).

1 September 2012

The method of disposal or sale of goods that the landlord must follow now depends on whether there is a dispute regarding the charge (s 58 of the ACLFT Act), whether the value of the goods is low, medium or high (ss 60, 61 and 62 respectively; see definitions, s 3(1)), and whether the goods are perishable (s 65). Sections 66 and 67 dictate the content and means of notice that must be given to the owner of the goods.

1 September 2012

Replaced by ss 55 and 73 of the ACLFT Act; s 73(3) provides that where any proceeds of sale are less than the storage and disposal costs, the shortfall is recoverable as a debt. Section 69 empowers the court to determine the quantum of the charge.

1 September 2012

Replaced by s 75(1) of the ACLFT Act, which removes the express requirement that the buyer purchases in good faith and removes all reference to burden of proof. Section 75(2) deems that a landlord who disposes of goods in accordance with the ACLFT Act acquires good title.

1 September 2012

This section is replaced by s 59 of the ACLFT Act, which does not grant a non-tenant owner of goods specific rights in the proceeds of the sale of the goods.

Recovery of goods by tenant

Sale of goods by landlord

Landlord may deduct certain costs from proceeds of sale

Buyer of goods sold pursuant to this Part acquire a good title

Rights of actual owner of goods

s 42C

s 42D

s 42E

s 42F

Division 3 of Pt 4.2 of the ACLFT Act now

Court supervision of disposal of goods

Recordkeeping by landlord

Control of Rents and Recovery of Possession

* Save

None

1 September 2012

None

1 September 2012

Section 74 of the ACLFT Act requires the landlord to prepare and make available certain records relating to the goods and their disposal/sale.

1 September 2012

Repealed and not re-enacted in other legislation, but premises which were prescribed premises within the meaning of Pt V of the LL&T Act continue to be excluded from the application of the Residential Tenancies Act 1997 (see s 14(3) of that Act).

Pt V

provides an optional procedure for the disposal of goods left behind under the supervision of the court.

for where express provision is made in the ACLFT Act (which is noted in the above table), provisions of the Landlord and Tenant Act will continue to have effect on leases entered into prior to that Act’s repeal to the extent that those provisions confer rights and impose liabilities. As was said in Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541 at 552 ‘the distinction between what is and what is not a “right” must often be one of great fineness’; a statement which is also true of liabilities. For more detail on this fraught distinction: see Interpretation of Legislation Act 1984 (Vic) ss 14–16; D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis, 8th ed, 2014) [6.9]–[6.12], [6.14].

Table of Cases References are to paragraphs A E Terry’s Motors Ltd v Rinder [1948] SASR 167 …. [10.7], [16.19] A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1986) …. [11.20] A Roberts and Co Ltd v Leicestershire County Council (1961) Ch 555 …. [6.8] AAMR Hospitality Group Pty Ltd v Goodpar Pty Ltd [2009] VCAT 2782 …. [23.33] Aarons v Lewis (1877) 3 VLR (E) 234 …. [11.1] Abau Holdings Pty Ltd v J & C Reid Pty Ltd (No 2) (SC(NSW), Young J, 20 March 1987, unreported) …. [10.5] Abbey National Building Society v Cann [1990] 1 All ER 1085 …. [5.16] — v — [1991] 1 AC 56 …. [1.15] — v Maybeech Ltd [1985] …. [19.1], [19.3], [19.4], [19.6] — v Maybeech Ltd [1985] Ch 190 …. [19.1], [19.3], [19.4], [19.6] Abbeyfield (Harpenden) Society Ltd v Woods [1968] 1 All ER 352; [1968] 1 WLR 374 …. [1.4] ABC Coupler & Engineering Co Ltd (No 3), Re [1970] 1 All ER 650 …. [5.9], [11.22] Abdy v Stevens (1832) …. [17.2] Abernethie v A M & J Kleiman Ltd [1970] …. [24.2], [25.5], [26.2], [27.2] Abidogun v Frolan Health Care Ltd [2001] EWCA Civ 1821 …. [19.2] Abigroup Contractors Pty Ltd v ABB Service (Formerly ABB Engineering Construction Pty Ltd) (2005) 21 BCL 12; [2004] NSWCA 181 …. [4.1] Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 …. [1.6], [4.3],

[4.4], [14.9] Abrahams v Cussen (1848) 3 a’Beckett’s RJ 55 …. [16.19] — v MacFisheries Ltd [1925] …. [7.12] Accuba Ltd v Allied Shoe Repairs Ltd [1975] …. [11.6] Ace Property Holdings Pty Ltd v Australian Postal Corp [2011] 1 Qd R 504; [2010] QCA 55 …. [15.3], [19.2] Ackland v Lutley (1839) 9 Ad & El 879; 112 ER 1446 …. [23.64] ACN 079 830 596 Pty Ltd v Wallis Lake Fisherman’s Cooperative Ltd [2007] NSWADT 297 …. [24.6] ACT Aerial Services Pty Ltd v Canberra International Airport Ltd [2000] ACTSC 63 …. [14.1] Actionco Pty Ltd v Pioneer Plasterboard Pty Ltd (2002) …. [23.18] Adami v Lincoln Grange Management Ltd [1998] 1 EGLR 58 …. [10.1] Adams v Anthony Bryant & Co Pty Ltd (1987) ATPR ¶40-784 …. [12.13] — v Cairns (1901) 85 LT 10; 17 TLR 662 …. [2.14] Adamson v Busch [1955] VLR 450 …. [3.8], [16.3] — v Hayes (1973) 130 CLR 276 …. [1.6] ADC Buildings Pty Ltd v Barana Properties (No 1) Pty Ltd (2005) …. [11.4], [11.8] — v Kilstream Pty Ltd (1979) 25 ALR 549 …. [12.9] Addis v Burrows [1948] 1 All ER 177; [1948] 1 KB 444 …. [6.5], [20.7], [20.20] Addiscombe Garden Estates Ltd v Crabbe [1958] …. [3.3], [3.6] Adler v Blackman [1952] 2 All ER 41; [1953] 1 QB 146 …. [2.10], [2.11] — v Upper Grosvenor Street Investment Ltd [1957] 1 WLR 227 …. [15.10], [15.13] Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 …. [6.6] Advance Fitness Corporation Pty Ltd v Bondi Diggers Memorial & Sporting Club Ltd [1999] NSWSC 264 …. [10.8]

Aegean Food Import Export Pty Ltd v R & C Mazzei Nominees Pty Ltd [2004] VCAT 1450 …. [23.35] — v — [2007] VCAT 68 …. [23.35] AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd [2007] VSC 73 …. [8.4] AG Securities v Vaughan [1990] 1 AC 417 …. [1.4], [1.12], [3.4] Agar v Macklew (1825) 2 Sim & St 418; 57 ER 405 …. [14.7] Age Old Builders Pty Ltd v Swintons Pty Ltd [2002] …. [11.20] — v — [2003] …. [11.20] Aglionby v Cohen [1955] 1 QB 558; [1955] 1 All ER 785 …. [21.2] Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 …. [6.6] Ah Lop v Donald (1906) 26 NZLR 218 …. [13.15] Ahearn v L A Wilkinson Ltd [1929] St R Qd 66 …. [16.21] Aidan Nominees Pty Ltd v Cockburn (1994) 10 SR (WA) 256 …. [26.8] Air Force Assoc (Vic Division) v White Manufacturing Co (Aust) Pty Ltd [1951] VLR 85 …. [15.8] Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 …. [4.1], [6.6] Ajzner v Cartonlux Pty Ltd [1972] VR 919 …. [14.7] AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 1336 …. [23.40] — v — [2004] VCAT 744 …. [10.13], [13.15], [23.40], [23.54] Akici v LR Butlin Ltd [2006] 1 WLR 201 …. [15.3] Akora (Bondi Junction) Pty Ltd v Buttrose [2008] NSWADT 275 …. [24.2] Al Saloom v Shirley James Travel Service Ltd (1981) …. [11.6] Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd (2007) NSW ConvR ¶56-167; [2006] NSWCA 224 …. [10.8], [10.10], [10.11], [10.13] Alan Estates Ltd v W G Stores Ltd [1982] Ch 511 …. [1.5] Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 …. [6.7], [10.5],

[10.7], [10.8], [10.10], [11.8] Alcides Fernandes v Timothy Yat Wah Lam [1998] WASCA 347 …. [26.9] Alcock, Ex Parte; Re McConnell (1955) …. [11.3] Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 …. [1.6] Aldahr v Motor Vehicle Commission [2007] NSWSC 1102 …. [12.9] Aldin v Latimer, Clark, Muirhead & Co [1894] 2 Ch 437 …. [8.5] Alford v Vickey (1842) Car & M 280; 174 ER 507 …. [20.27] Alghussein Establishment v Eton College [1988] 1 WLR 587; [1991] 1 All ER 267 …. [6.9] Alker v Collingwood Housing Association [2007] 1 WLR 2230 …. [10.1] Allam & Co Ltd v Europa Poster Services Ltd [1968] 1 WLR 638 …. [20.12], [20.20] Allan v Liverpool Overseers (1874) LR 9 QB 180 …. [1.3] Allcocks v Moorhouse (1882) 9 QBD 366 …. [1.14] Allen v Belmore Property Co Pty Ltd (1966) …. [11.2] — v Carbone (1975) 132 CLR 528 …. [4.1] Alliance Accounting & Business Consultants Pty Ltd v Australian Property Investment & Development Pty Ltd (SC(NSW), White J, 19 June, 2007 unreported) …. [10.1], [10.10] Allison v Scargall [1920] 3 KB 443; [1920] All ER Rep 172 …. [20.2] Alliswell Pty Ltd v Macdav Pty Ltd (2002) V ConvR ¶54-660 …. [17.18] Allsvelte Pty Ltd v Cassegrain Wines Pty Ltd (2015) 18 BPR 35,637 …. [14.6] Almond v Camrol Pty Ltd (1984) 3 BPR 9461 …. [4.1] Alonso v Leichhardt Municipal Council (1975) …. [3.8] Alton House Holdings Ltd v Calflane (Management) Ltd (1987) 20 HLR 129; [1987] 2 EGLR 52 …. [10.1] Alucraft Pty Ltd v Grocon [1996] 2 VR 386 …. [10.13] Amad v Grant (1947) 84 CLR 327; [1947] ALR 191 …. [2.7], [2.13], [2.19], [20.2], [20.3], [20.5], [20.18], [20.21]

Amber Properties Pty Ltd v Sufigoe Pty Ltd (1994) 6 BPR 13,822 …. [14.1] — v — (1995) NSW ConvR ¶55-735 …. [14.1] American Leaf Blending Co v Director-General of Inland Revenue [1979] AC 676 …. [24.2], [25.5], [26.2], [27.2] Amherst v James Walker Goldsmith & Silversmith Ltd [1983] …. [11.6] AMJE Pty Ltd v Mobil Oil Australia Pty Ltd [2016] VSC 777 …. [23.63] AMP Life Ltd v Lillium Pty Ltd (2001) V ConvR ¶58-551; [2000] VCAT 34 …. [7.8], [23.18] AMP Society v National Mutual Life Association of Australasia Ltd [1995] …. [11.5] Amricama Pty Ltd v Red Carpet Real Estate Pty Ltd [2014] QSC 267 …. [25.8] Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025 …. [10.1], [10.8], [10.13] — v — (1997) 47 EG 127 …. [10.13] Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27 …. [4.1], [4.2] Anderson v Bowles (1951) 84 CLR 310 …. [6.9], [2.20], [11.28], [17.17] — v Daniel [1924] 84 CLR 310; [1951] ALR 913 …. [24.19] — v James (1908) 28 NZLR 34 …. [10.3] Anderson, Hodgson & Lithgow v Vecht [1946] VLR 458 …. [20.8] Anderson Ltd v Daniel [1924] 1 KB 138 …. [25.15], [27.17] Andrew v Bridgman [1908] 1 KB 596 …. [15.15] Andrews v Colonial Mutual Life Assurance Society Ltd [1982] 2 NZLR 556 …. [1.15], [14.3] — v Hogan (1952) 86 CLR 223; [1952] ALR 601 …. [16.3], [16.11], [16.18], [16.20] Angell v Randall (1867) …. [11.28] Anglia Building Society v Sheffield City Council [1983] 1 EGLR 57 …. [7.8] Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162

CLR 549 …. [14.1], [16.33] Annen v Rattee [1985] …. [3.8], [5.15] Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 …. [5.6] Anstruther-Gough-Calthorpe v McOscar [1923] All ER Rep 198; [1924] 1 KB 716 …. [10.8] Antaios Cia Naviera SA v Salen Rederierna AB [1985] AC 191 …. [14.3] Anthony v Stanton [1943] VLR 179 …. [1.5], [2.2] Antonino Giuseppina Ensabella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 …. [23.11], [23.12], [23.13], [23.14], [23.22], [23.35], [23.37], [23.46] ANZ Bank Ltd v Strelitz [1964] NSWR 401 …. [1.14] ANZ Banking Group Ltd v Widin (1990) 26 FCR 21 …. [4.5] Appah v Parncliffe Investments Ltd [1964] …. [3.4] Appeal of Hayman, Re (1964) 80 WN (NSW) 783 …. [20.5] Apperly v Federal Commissioner of Land Tax (1914) 17 CLR 535 …. [11.1] Appleby v Pursell [1973] 2 NSWLR 879 …. [6.6] Apps & Sons Pty Ltd and Hurley, Re [1949] VLR 7 …. [14.3] Apriaden Pty Ltd v Seacrest Pty Ltd (2005) 12 VR 319; V ConvR ¶54-704; [2005] VSCA 139 …. [16.28], [18.2], [23.63] Aqua Jet Car Wash Pty Ltd v Buraan Pty Ltd [2004] NSWSC 1087 …. [7.16] Arball Pty Ltd v Chow (1992) V ConvR 54-429 …. [15.11] Archos, Re [1994] 1 Qd R 223 …. [15.14], [26.8] Arcric Investments Pty Ltd v Ductline Pty Ltd (1992) ATPR 41-180 …. [12.9] Arden v Puller (1842) 10 M & W 321; 152 ER 492 …. [10.1] Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377 …. [20.30], [20.32], [21.3] Aris-Bainbridge v Turner Manufacturing Co Ltd [1950] 2 All ER 1178; [1951] 1 KB 563 …. [23.41], [24.11], [26.11], [27.9], [28.10]

Arjay Investments Pty Ltd v Morrison’s Outdoor Catering Pty Ltd (SC(NSW), 1 May 1995, unreported) …. [4.1], [7.16] Arkwright’s Settlement, Re [1945] Ch 195; 1 All ER 404 …. [16.19] Arlesford Trading Co Ltd v Servansingh [1971] 1 WLR 1080 …. [15.18], [15.20] Armstrong Jones Management Pty Ltd v Sales-Bond & Associates Pty Ltd [2007] NSWADTAP 47 …. [24.6] Armstrong v Armstrong [1970] …. [3.4] — v Fisher (1950) 68 WN (NSW) 93 …. [16.20] Armytage & Jones Pty Ltd v Jones (1952) 69 WN (NSW) 299 …. [16.21] Arndale (Kilkenny) Pty Ltd v Gaetjens (1970) 44 ALJR 434 …. [1.4], [8.4], [13.11], [23.48] Arnold v Mann (1957) 99 CLR 462; [1957] ALR 1207 …. [2.12], [16.2], [20.31], [20.32], [20.33] — v National Westminster Bank plc [1990] …. [11.8] — v Wood [1948] VLR 261 …. [20.19] Arnsby v Woodward (1827) 6 B & C 519; 108 ER 542 …. [17.18] Aronberg v FCT (1943) 132 F 2d 165 …. [12.9] Aroney v Heily [1968] …. [11.2] Ashburn Anstalt v Arnold [1989] Ch 1 …. [1.5], [1.12] Ashbury Railway Carriage & Iron Co v Riche (1875) LR 7 HL 653; [1874– 80] All ER Rep Ext 2219 …. [5.8] Ashe v Hogan [1920] IR 159 …. [15.20] Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd R 1 …. [15.20], [20.8] Ashton v Hunt [1999] 1 Qd R 571 …. [1.6] — v Sobelman [1987] 1 WLR 177 …. [17.10] Ashutosh Industries Pty Ltd v Giriftin (RLD) [2005] NSWADTAP 34 …. [24.3] Ashworth Fraser Ltd v Gloucester City Council [2001] 1 WLR 2180 …. [7.8], [15.12], [15.13], [15.14]

Asian Pacific Building Corporation Pty Ltd v Sharon-Lee Holdings Pty Ltd [2013] VSC 11 …. [16.36] Aspromonte Pty Ltd v Zagari [1999] NSWSC 831 …. [24.3] Aspro’s Pty Ltd v Hayter [2005] ANZ ConvR 425 …. [6.8] Assaf v Kostrevski (1999) NSW ConvR ¶55-883 …. [10.1] — v Kostrevski & Ors (unreported, New South Wales Court of Appeal, 30 September 1998) …. [10.1] Associated British Ports v C H Bailey plc [1990] 2 AC 703 …. [19.4] Associated Dairies Ltd v Pierce [1983] 1 EGLR 45 …. [13.14] Associated Mineral Pty Ltd v NSW Rutile Mining Co Pty Ltd (1961) 35 ALJR 29 …. [14.9] Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 …. [16.35] Astley v Miller (1827) 1 Sim 298; 57 ER 588 …. [16.8] Athabasca Realty Co Ltd v Graves (1979) Athabasca Realty Co …. [19.1] Atkin v Rose [1923] 1 Ch 522 …. [17.18], [19.6] Atkins (Charles) & Co Ltd v Backhouse [1928] SASR 179 …. [15.13] Atkinson v Findon Shopping Centre Pty Ltd [1987] ACLD 403 …. [4.2] Attorney-General v Balliol College, Oxford (1744) 9 Mod 407 …. [1.15] — v Barker Bros Ltd (1976) 2 NZLR 495 …. [4.8] — v Owen (1805) 10 Ves Jun 555; 32 ER 960 …. [5.17] Attorney-General for Hong Kong v Fairfax Ltd [1997] …. [7.7] Attorney-General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557 …. [24.6] Attorney-General of Hong Kong v Humphreys Estate (Queens Garden) Ltd [1987] 1 AC 114 …. [1.15] Auriol v Mills (1790) …. [11.3] Aus-game Pty Ltd v D’Orsogna Bros Pty Ltd [1996] ANZ ConvR 248 …. [10.5] Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1; [1997] Q ConvR ¶54-485 …. [8.4], [8.5], [13.15], [23.54]

Austen v Boys (1858) 2 De G & J 626; 44 ER 1133 …. [24.5], [25.5], [27.5] Austerberry v Corporation of Oldham (1885) 29 ChD 750 …. [15.18], [15.19] Austin v Bonney [1999] 1 Qd R 114 …. [10.6] — v Newham [1906] 2 KB 167 …. [14.3] Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 …. [1.15] Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 …. [1.15] Australia and New Zealand Bank Ltd v Sinclair [1968] 2 NSWR 26 …. [5.16] Australia and New Zealand Banking Group Ltd v Letore Pty Ltd (SC(Vic), 22 December 1994, unreported) …. [6.8] Australian Aggregates (NSW) Pty Ltd v Maxmin Pty Ltd [1988] ACLD 576 …. [14.6] — v — (SC(NSW), Hodgson J, 16 May 1988, unreported) …. [1.4], [3.8], [14.6] Australian Asset Consultants Pty Ltd v Staples Super Pty Ltd [2016] VCAT 1726 …. [23.45] Australian Blue Metal v Hughes (1962) 79 WN (NSW) 498 …. [16.36] — v — [1963] AC 74; [1962] 3 All ER 335 …. [3.8] Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 …. [4.2], [6.4], [6.5], [6.7], [11.8] Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 …. [4.1], [6.2] Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 …. [6.9] — v C G Berbatis Holdings Pty Ltd [2000] …. [12.13] — v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 …. [12.14] — v Dukemaster Pty Ltd [2009] FCA 682 …. [12.9], [12.10] — v Harbin Pty Ltd [2008] FCA 1792 …. [12.10] — Prouds Jewellers Pty Ltd [2008] FCAFC 199 …. [12.109]

— v Target Australia Pty Ltd (2002) ASAL(Digest) 55-072; (2001) ATPR 41840; [2001] FCA 1326 …. [12.10] — v Universal Sports Challenge Ltd [2002] FCA 1276 …. [12.9] Australian Consolidated Investments Ltd v Southern Equities Corporation Ltd (unreported, 1 November 1995 …. [6.8] Australian Estates Ltd v Palmer (Court of Appeal, 22 December 1989, unreported) …. [6.6] Australian Maritime Safety Authority v Quirk (1998) NSW ConvR ¶55-858 …. [2.2], [11.1], [11.8] Australian Mutual Provident Society v 400 St Kilda Road Pty Ltd [1990] VR 646 …. [19.1], [19.4], [19.5] — v — [1991] 2 VR 417 …. [6.7], [15.6], [19.1], [19.4], [19.5] — v Geo Myers & Co Ltd (1931) 47 CLR 65 …. [5.16] — v Overseas Telecommunication Commission (Australia) [1972] 2 NSWLR 806 …. [4.2], [14.7] Australian Pacific Airports (Melbourne) Pty Ltd v Nuance Group (Aust) Pty Ltd (2005) …. [11.8], [11.20] Australian Posters Pty Ltd v Wyuna Holdings Pty Ltd (1993) 15 QLD Lawyer Reps 22 …. [1.4], [1.6] Australian Property Buyers Pty Ltd v Kowalski [2006] VCAT 24 …. [23.11], [23.38] Australian Provincial Assurance Assoc Ltd v Coroneo (1938) 38 SR (NSW) 700 …. [10.5] — v Roddy (1956) …. [11.2] — v Rogers (1943) …. [11.28] Australian Retail Enterprises Pty Ltd v N D Cowan Nominees Pty Ltd [2000] VSC 538 …. [19.2], [19.5] Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268 …. [7.8], [15.3], [16.18], [16.28], [17.21] Australian Securities & Investment Comm v Australian Investors Forum Pty Ltd (2003) 44 ACSR 503; [2003] NSWSC 130 …. [5.10]

Automotive & General Industries Ltd’s Lease, Re (SC(Vic), Adam J, 1 May 1970unreported) …. [1.8], [5.6], [6.5], [7.7], [15.2], [17.18], [18.6], [18.7], [18.9], [19.5] Automotive & General Industries Ltd’s Lease (No 2), Re (SC(Vic), Adam J, 6 November 1970, unreported) …. [19.5] Avis v Newman (1889) 41 Ch D 532 …. [10.3] Awad v Connell [2009] VCAT 1806 …. [23.15] Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623 …. [5.6] Azkanaad Pty Ltd v Galanos Bros Pty Ltd (No 2) [2008] NSWCA 185 …. [4.2] B and B Viennese Fashions v Losane [1952] 1 All ER 909 …. [6.9] B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 594 …. [14.1], [14.6], [14.9], [23.16], [26.2] B Seppelt and Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147 …. [4.1] Baber v Kenwood Manufacturing Co Ltd (1978) …. [11.20] Bacchus Marsh Brick and Pottery Co Ltd (in liq) v Federal Building Society (in liq) (1895) 22 VLR 181 …. [10.5] Bacchus Marsh Concentrated Milk Co Ltd (In Liquidation) v Joseph Nathan and Co Ltd (1919) 26 CLR 410 …. [6.8] Bachelor Girl Clothing Pty Ltd v Martino Properties Pty Ltd (VCAT, Deputy President Macnamara, 1 April 2005) …. [23.64] Badeley v Vigurs (1854) 4 El & Bl 71; 119 ER 28 …. [16.15] Bagust v Rose (1963) 80 WN (NSW) 604 …. [11.1] Baikie v Fullerton-Smith [1961] NZLR 901 …. [2.17], [3.1], [3.8] Bailey v De Crespigny (1869) LR 4 QB 180 …. [15.1] — v John Paynter (Mayfield) Pty Ltd [1966] 1 NSWR 596 …. [10.8] — v Raymond Sullivan McGlashan [1997] ANZ ConvR 619 …. [7.3] Baillieu Knight Frank (Gold Coast) Pty Ltd v Susan Pender Jewellery Pty Ltd (1997) ATPR ¶41-542 (1996) BC9605413 …. [12.9]

Bain v Bartlett [1922] NZLR 790 …. [14.9] — v Brand (1876) 1 AC 762 …. [10.5] — v Fothergill (1874) LR 7 HL 158; [1874–80] All ER Rep 83 …. [13.4] Bairstow v Christopher Moran Holdings Ltd [1992] 2 WLR 396; [2000] ANZ ConvR 173 …. [16.25] Baker v Merckel [1960] 1 QB 657; [1960] 1 All ER 668 …. [16.19], [28.15] Balcairn Guest House Ltd v Weir [1963] NZLR 301 …. [8.6] Balfour v Balfour [1919] 2 KB 571; [1918–19] All ER Rep 860 …. [6.2] Ball & Huntley v Laffin (1876) 10 SALR 6 …. [2.11] Ballas v Theophilos (No 2) (1957) 98 CLR 193 …. [14.8] — v — [1958] VR 576 …. [14.1], [14.8] Balls-Headley v Ambler (1880) 6 VLR (L) 360 …. [17.18] Ballymaloe Pty Ltd v Retail Shop Leases Tribunal [2003] QSC 369 …. [25.8] Baltic Shipping Co v Dillon (1993) 176 CLR 344 …. [13.15] Bambury v Chapman (1960) 77 WN (NSW) 191 …. [15.13] Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452 …. [16.30] Bandy v Cartwright (1853) 8 Ex 913; 155 ER 1624 …. [8.4] Bank Line Ltd v Arthur Capel Co [1919] AC 435 …. [6.10] Bank of New Zealand v Simpson [1900] AC 182 …. [6.5] Bank of South Australia v SA Health Commission (1996) …. [11.8], [11.20] Bank of Victoria v M’Hutchison (1881) 7 VLR (L) 452 …. [2.8], [2.10], [2.11] — v Synott (1885) 11 VLR 598 …. [10.7], [10.13] Banks v Kokkinos [1998] …. [11.6] — v Transport Regulation Board [1968] …. [3.1] Bankstown Trotting Recreational Club Pty Ltd v Chisholm (2016) 18 BPR 36,219 …. [8.5] Barba v Gas & Fuel Corporation (Vic) (1976) 136 CLR 120 …. [14.1] Barbcraft Pty Ltd v Goebel Pty Ltd [2003] VCAT 1700 …. [23.39], [23.40]

Barbour v Pinn (1870) …. [11.28] Barclays Bank plc v Daejan Investments (Grove Hall) Ltd [1995] 1 EGLR 68 …. [7.8] Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWR 450 …. [15.8] Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480 …. [7.8], [15.8], [15.9], [15.13], [15.14], [15.15], [26.8] Barker v Williams [1933] VLR 101 …. [3.9] Barnes v Barratt [1970] 2 QB 657; [1970] 2 All ER 483 …. [3.3] — v City of London Real Property Co [1918] 2 Ch 18 …. [15.20] Barnhart v Greenshields (1853) 9 Moo PC C 32, 14 ER 204 …. [6.8], [7.4] Barraclough v Konnecke [1962] NSWR 1262; 79 WN (NSW) 821 …. [2.17] Barrett v Lounova (1982) Ltd [1990] 1 QB 348; [1989] 1 All ER 351 …. [10.1], [10.6], [10.10] — v Morgan [2002] 2 AC 264 …. [16.3], [17.16] Barrow v Isaacs & Son [1891] 1 QB 417 …. [15.8], [15.13], [17.19], [19.1] Barry & Roberts Properties Ltd v Collins [1950] St R Qd 242 …. [20.15] Barry v Heider (1914) 19 CLR 197 …. [7.4], [15.20] Bartlett v Salmon (1855) 6 De GM&G 33; 43 ER 1142 …. [1.12], [11.1] Barton v Lantsbery (2004) V ConvR ¶58-577 …. [7.8], [8.4], [13.15], [23.18], [23.48], [23.54] — v Reilly (1878) …. [10.8] Bashir v Commissioner of Lands [1960] AC 44; [1960] 1 All ER 117 …. [17.5], [17.6], [19.1] Basingstoke [1988] …. [11.8] Basingstoke and Deane Borough Council v Host Group Ltd [1988] …. [11.4], [11.8] Baskerville, Re [1910] 2 Ch 329 …. [5.17] Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493 …. [14.6], [14.8], [19.5]

Batchelor v Murphy (1926) AC 63 …. [14.1] Bateman v Slayer (1987) 71 ALR 553; 8 IPR 33; ASC 55-559; ATPR 40762 …. [12.9] Bateman Television Ltd v Coleridge Finance Co Ltd [1969] NZLR 794 …. [24.2], [25.2] — v Tsaoucis [1960] NSWR 471; (1960) 77 WN (NSW) 435 …. [16.13] Bates v Donaldson [1896] 2 QB 241; [1895–9] All ER Rep 170 …. [7.11], [15.13], [15.14] Bathavon Rural District Council v Carlile [1958] 1 All ER 801; [1958] 1 QB 461 …. [2.8], [20.5] Bathurst (Earl) v Fine [1974] 1 WLR 905 …. [18.3] Batiste v Lenin (2002) 11 BPR 20,403 …. [16.28], [18.2], [19.1], [19.2] Batson v De Carvalho (1948) 48 SR (NSW) 417 …. [13.15], [18.7] Batstone v Nicholls [1939] VLR 325 …. [15.14] Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) NSW ConvR ¶55-299 …. [4.1] Bava Holdings Pty Ltd v Pando Holdings Pty Ltd (1998) 9 BPR 16,295; NSW Conv R ¶55-862 …. [14.8] Baxton v Kara [1982] 1 NSWLR 604 …. [4.8], [16.2], [17.18], [19.1] Bay Marine Pty Ltd v Clayton Properties Pty Ltd (1984) …. [14.6] Baycloud v Dowling Investments Pty Ltd [2005] …. [11.5] Bayless v Le Gros (1858) 4 CBNS 537; 140 ER 1201 …. [17.10] Bayne v Love (1909) 7 CLR 74 …. [20.25] Baynes & Co v Lloyd & Sons [1895] 1 QB 820 …. [8.2], [8.4] Baynes & Co v Lloyd & Sons [1895] 2 QB 610 …. [8.4] Baynton v Morgan (1888) 22 QBD 74 …. [15.18], [16.19] Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 …. [1.6], [4.3], [4.5], [4.6], [4.8], [11.8], [11.17], [16.18], [16.21], [16.22], [16.28], [16.30], [16.31], [16.32], [16.34] BBC Hardware Ltd v Payce Properties Pty Ltd (2000) …. [11.8]

Beacon Carpets Ltd v Kirby [1985] QB 755 …. [10.1] Beacon Life and Fire Assurance Co v Gibb (1862) 1 Moo (NS) 73 …. [10.10] Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236 …. [19.1], [19.4] Beardman v Wilson (1868) LR 4 CP 57 …. [15.2] Beasley v D’Arcy (1800) 2 Sch & Lef 403 …. [7.4] Beattie v Fine [1925] 47 ALT 19; [1925] VLR 363 …. [1.5], [2.8], [2.10], [2.11], [4.2], [4.8], [14.3] — v Lyttleton Borough [1966] NZLR 65 …. [2.14] Beba Enterprises Pty Ltd v Elle Pty Ltd [2013] WASAT 120 …. [26.10] Bebington’s Tenancy, Re [1921] 1 Ch 559 …. [20.9], [20.16] Beca Developments v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55459 …. [14.1], [14.5], [14.6] Becker v Cariste [2001] NSWSC 663 …. [13.11] Bed for Backs v Palace Pty Ltd [2006] VCAT 2677 …. [23.30] Beech v Potter (1904) …. [11.28] Beer v Bowden [1981] …. [11.8] Bees v Williams (1835) 2 Cr M & R 581; 150 ER 248 …. [16.21] Beesly v Hallwood Estates Ltd [1960] 1 WLR 549 …. [14.1] — v — [1961] Ch 105 …. [14.1] Belgravia Insurance Co Ltd v Meah [1964] 1 QB 436 …. [19.2], [19.6] Bellas v Ryan [1954] QWN 59 …. [20.26] Bellgrove v Eldridge (1954) 90 CLR 613 …. [10.13], [13.17] Bells Dry Cleaners Pty Ltd v Aapc Properties Pty Ltd [2005] ACTSC 47 …. [28.9] Belperio v Linehaul Holdings Pty Ltd (2004) 89 SASR 185 …. [16.28] Benarca Pty Ltd v Milgate [2005] VCAT 1390 …. [23.63] Benbow v Synod of the Church of England in the Diocese of Adelaide [1954] SASR 320 …. [14.2] Beneficial Finance Corporation v Multiplex Constructions Pty Ltd (1995) 36

NSWLR 510 …. [14.4] Bennett v Excelsior Land Investment & Building Co Ltd (1893) 14 LR (NSW) Eq 179 …. [9.1], [9.2] — v Suburban Centres Pty Ltd (1981) 2 BPR 9659 …. [7.2], [7.8] — v Womack (1828) 3 C & P 96; 172 ER 339 …. [9.2], [9.3], [11.15] Bergl (Australia) Ltd v Moxon Lighterage Co Ltd (1920) 28 CLR 194 …. [6.4] Berkeley v Hardy (1826) 5 B & C 355; 108 ER 132 …. [5.13] Berkley v Poulett [1977] 1 EGLR 87 …. [10.5] Bernays v Prosser [1963] 2 All ER 321; [1963] 2 QB 592 …. [2.7] Bernstein v Gardiner (1926) 26 SR (NSW) 109 …. [13.17] Berry (Frederick) Ltd v Royal Bank of Scotland [1949] 1 KB 619 …. [15.8], [15.11], [15.13] Best v Edwards (1895) 60 JP 9 …. [6.11] Best & Less (Leasing) Pty Ltd v Darin Nominees Pty Ltd (1994) 6 BPR 13,783 …. [14.6] Beswick v Beswick [1968] AC 58 …. [15.2] Bevan v Dobson (1906) 26 NZLR 69 …. [16.9] Bevillesta Pty Ltd v Sovereign Motor Inns Pty Ltd (2002) 11 BPR 20,289; [2003] ANZ ConvR 35 …. [10.10], [10.13] Bezden Pty Ltd v Castellano Nominees Pty Ltd [2003] ANZ ConvR 443; (2003) V ConvR ¶54-679 …. [14.8] BHP v QV [2004] VSC 447 …. [6.4] BICC plc v Burndy Corp [1985] Ch 232 …. [7.4] Bickel v Duke of Westminster [1977] QB 517 …. [15.12], [15.13], [15.14] Bickerton’s Aerodromes Ltd v Young (1958) …. [18.7] Big Country Developments Pty Limited v Peter Griffiths (No 3) [2015] NSWSC 1182 …. [16.18] Big Toys Pty Ltd v Bartlett [2001] …. [11.3] Bigdale Pty Ltd v Royal Motor Yacht Club of NSW Port Hacking Branch

[2010] NSWSC 1196 …. [24.2] Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171 …. [24.3], [25.13], [26.3], [27.3], [28.3] Billing v Pill [1954] 1 QB 70 …. [10.5] Billson v Residential Apartments Ltd [1992] 1 AC 494 …. [16.2], [17.9], [17.12], [19.1], [19.4], [19.6] Binions v Evans [1972] Ch 359 …. [1.5], [2.2], [2.19] Birch v Clifford (1891) 8 TLR 103 …. [10.13] — v Prouse [1922] NZLR 913 …. [14.6] Bird v Hildage [1948] 1 KB 91; [1947] 2 All ER 7 …. [17.18] Birkdale District Electric Supply Co v Southport Corp [1926] AC 355 …. [5.6] Birmingham Dudley & District Banking Co v Ross (1888) 38 Ch D 295 …. [8.2], [8.5], [13.15] Birt & Co Pty Ltd v Leichhardt Municipal Council (1951) 18 LGR 78 …. [3.3] Bishop of Bath (1605) 6 Co Rep 34b; 77 ER 303 …. [1.5], [2.2] Bishop v Consolidated London Properties Ltd [1933] All ER Rep 963 …. [10.6] — v Taylor (1968) 118 CLR 518 …. [4.2] Biss, Re [1903] 2 Ch 40 …. [14.8] Black Swan Holdings Pty Ltd v Hurst (1993) 9 SR (WA) 285 …. [26.14] Blackburn Developments No 19 Pty Ltd v Downs Surgical (Australia) Pty Ltd (1974) 2 BPR 9141 …. [4.1] Blackler v Felpure Pty Ltd [1999] 9 BPR 17,259; [1999] NSWSC 958 …. [24.14], [28.12] Blacklocks v JB Developments (Godalming) Ltd [1981] 3 WLR 554 …. [7.4] Blackwell v Smyly (1866) 3 WW & A’B (Eq) 1 …. [14.5], [14.11] Blaiberg v Kleeves [1906] …. [11.27] Blake v Lane (1876) 2 VLR (L) 54 …. [5.13], [9.2], [16.19]

Blakesley v Whieldon (1841) 1 Hare 176; 66 ER 996 …. [9.3] Blatherwick (Services) Ltd v King [1991] Ch 218 …. [11.1] Blazey v Polletti (unreported, Supreme Court, WA, Commissioner Murray, 23 May 1989) …. [1.6] Blee v Kearney [1962] NSWR 198 …. [7.14] Blewett v Blewett [1936] 2 All ER 188 …. [18.6], [18.10] Blomidon Mercury Sales Ltd v John Pierceys Auto Body Shop Ltd (1982) 129 DLR (3d) 63 …. [14.9] Blomley v Ryan (1956) 99 CLR 362 …. [5.4], [12.14] Bloomfield v Bloomfield (1893) 9 NSW WN 188 …. [2.8] Bluehive Pty Ltd v Dukemaster Pty Ltd [2000] FCA 1307 …. [12.9] Blumberg v Wood [1966] Qd R 457 …. [20.7], [20.17], [20.20] Blumenthal v Church Commissioners for England [2005] EGLR 78 …. [7.8] Bob Jane Corporation Pty Ltd v Commercial Road Developments Pty Ltd [2007] VCAT 2120 …. [23.14], [23.15] Bob Jane T-Marts Pty Ltd v The Baptist Union of Victoria [1999] VSC 346 …. [14.4] Bocardo SA v S & M Hotels Ltd [1980] 1 WLR 17 …. [15.7], [15.10] Body Bronze International Pty Ltd v Fehcorp Pty Ltd (2011) 34 VR 536 …. 12.14 Boldmark v Cohen [1986] 1 EGLR 47 …. [11.1] Bolton’s (House Furnishers) Ltd v Oppenheim [1959] 2 All ER 473; [1959] 1 WLR 685 …. [20.17] — v — [1959] 3 All ER 90; [1959] 1 WLR 913 …. [20.17] Bonafair Holdings Pty Ltd v Hungry Jack’s Pty Ltd [2016] NSWCA 276 …. [10.11] Bonds Brewing (NSW) Ltd v Reffell Party Ice Supplies Pty Ltd (SC(NSW), Waddell CJ (in Eq), 17 August 1987, 9 September 1987, unreported) …. [20.1] Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR

600; 43 ALR 68 …. [4.8], [11.1], [11.7], [11.20], [14.1], [14.3], [14.7], [23.42] Bookman (Thomas) Ltd v Nathan [1955] 1 WLR 815 …. [15.13] Boone v Martin (1920) 47 OLR 205; 53 DLR 25 …. [11.1] Bootes v Staples & Co [1916] GLR 530 …. [2.13] Booth v Macfarlane (1831) 1 B & Ad 404; 109 ER 1022 …. [17.17] Booton v Clayton (1948) 65 WN (NSW) 164 …. [15.5], [24.18], [26.8], [27.16] Borambil Pty Ltd v O’Carroll [1972] 2 NSWLR 302 …. [1.1], [1.5] — v — [1974] 1 NSWLR 1 …. [1.1] — v — (1974) 3 ALR 391 …. [2.2] Boreland v Docker (2007) NSW ConvR ¶56-182 …. [4.1], [6.4] Borthwick-Norton v Romney Warwick Estates Ltd [1950] …. [18.7] Borzak v Ahmed [1965] 2 QB 320; 1 All ER 808 …. [17.12], [17.13] Boss v Hamilton Island Enterprises Ltd [2008] QSC 274 …. [15.13] — v — [2010] 2 Qd R 115 …. [15.13] Bostock v Bryant [1990] 2 EGLR 101 …. [1.12] Boswell v Crucible Steel Co [1924] All ER Rep 298; [1925] 1 KB 119 …. [10.5] — v — (1877) …. [14.7] Bottomley v Ambler (1877) 26 WR 566; (1878) 38 LT 545 …. [14.7] — v Bannister [1932] 1 KB 458 …. [6.7] — v — (1878) …. [11.20] Bourne & Tant v Salmon & Gluckstein Ltd [1907] 1 Ch 616 …. [7.16] Bowden v Lo (1998) 9 BPR 16,317 …. [16.36] — v Rallison [1948] 1 All ER 841 …. [2.12] Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2007] ANZ ConvR 297; [2007] FCA 708 …. [10.3], [12.14] — v — [2008] FCAFC 38 …. [10.8], [10.13]

Bowes, Re (1887) 37 Ch D 131; [1886–90] All ER Rep 693 …. [5.18] Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8 …. [14.1], [14.9] Bowser v Colby (1841) 1 Hare 109; 66 ER 969 …. [19.2] Box v Attfield (1886) 12 VLR 574; 8 ALT 45 …. [2.2], [2.8], [2.10], [2.11] — v Lock (1948) 65 WN (NSW) 291 …. [1.5], [2.2], [20.21] Boxsel v Bennett (1981) ANZ ConvR 153 …. [16.21] Boyer v Warbey [1953] 1 QB 234; [1953] 1 All ER 269 …. [15.19] BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; 52 ALJR 20 …. [6.7], [15.6] Bracknell Development Corporation v Greenless Lennard Ltd (1981) …. [11.20] Bradbun Pty Ltd v Bobo Nominees Pty Ltd (1994) V ConvR ¶54-501 …. [23.13] Bradford House Pty Ltd v Leroy Fashion Group Ltd (1983) 46 ALR 305 …. [8.1], [12.12] Bradken Consolidated Ltd v The Broken Hill Proprietary Co Ltd (1979) 145 CLR 107 …. [24.2], [25.2] Bradshaw v Pawley [1980] 1 WLR 10 …. [1.5], [1.10] Brady’s case, Re (1867) …. [4.6] Bragg v Alam [1981] 1 NSWLR 668 …. [14.10], [18.10], [20.27] — v — (1982) NSW ConvR ¶55-082 …. [20.27] Braham v Walker (1961) 104 CLR 366 …. [14.1] Braidwood v Dunn [1917] NZLR 269 …. [10.5] Brain, Re [1874] LR 18 Eq 389 …. [17.6] Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 …. [4.1], [6.6] Brambles Security Services v Bi-Lo Ltd (1992) Aust Tort Rep 81-161 …. [16.36] Branchett v Beaney (1992) 24 HLR 348; [1992] 28 EG 107 …. [13.15] Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1; [1948] 1 All

ER 758 …. [15.20] Brechin and Drapery Importing Co Ltd, Re [1928] NZLR 241 …. [14.3] Brennan v Kinjella (1993) 6 BPR 97,442 …. [6.5], [14.3], [14.6], [14.8] — v — [1993] NSW ConvR 59,858 …. [6.5] — v Thomas [1953] VLR 111 …. [3.8] Bressan v Squires [1974] 2 NSWLR 460 …. [14.8], [14.10] Bretair Pty Ltd v Cave [2012] VCAT 1039 …. [23.19] — v Lenro Properties Pty Ltd [2004] VCAT 1141 …. [23.40] Bretherton v Paton [1986] 1 EGLR 172 …. [1.4] Brew Bros Ltd v Snax (Ross) Ltd [1970] 1 QB 612; [1970] 1 All ER 587 …. [10.8], [10.10] Brewer v Eaton (1783) 3 Doug 230; 99 ER 627 …. [19.3] Brian Stevens Pty Ltd v Clarke (1965) 83 WN (Pt 1) (NSW) 32 …. [10.3] Brickworks Markets Pty Ltd, Re (1997) 74 FCR 165 …. [5.9], [6.10] Bridge v Quick (1892) 61 LJQB 375 …. [19.5] Briggs v Pinchbeck [1937] SASR 30 …. [17.18] Brightwell v Foley (1946) 63 WN (NSW) 204 …. [15.13] Brikom Investments Ltd v Carr [1979] …. [10.8] — v Seaford [1981] 1 WLR 863 …. [1.10], [4.1], [4.2] Brilliant v Michaels [1945] 1 All ER 121 …. [1.5], [2.2] Brimbank City Council v Westvale Community Centre Inc [2006] VSC 100 …. [23.18] Briridge Pty Ltd v Charter Hall Real Estate Management Services Pty Ltd [2014] QCAT 469 …. [25.14] Brisbane City Council v Chu Cho Far; Ex parte Chu Cho Far [1967] Qd R 568 …. [20.9] — v Group Projects Pty Ltd (1979) 145 CLR 143 …. [6.10] Brisbane Water County Council v Commissioner of Stamp Duties [1979] 1 NSWLR 310 …. [26.10] British Airways PLC v Heathrow Airport Ltd [1992] …. [11.8]

British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137 …. [7.4], [11.3] British Electrical Traction Co v Inland Revenue Commissioners [1902] 1 KB 441 …. [11.1] British Gas Corp v Universities Superannuation Scheme Ltd [1986] …. [11.4], [11.8] British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69 …. [10.6], [10.7], [10.8] Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 …. [15.13], [15.14] Brooker’s Colours Ltd v Sproules (1910) 10 SR (NSW) 839 …. [17.20], [19.2] Brookes v Drysdale (1877) 3 CPD 52 …. [9.2] Brooks v Wyatt (1992) 112 FLR 12 …. [14.7] Brooks-Thornley v McMurtrie (1904) 21 WN (NSW) 127 …. [1.4], [1.5] Brough v Nettleton [1921] 2 Ch 25 …. [4.6] Brown & Root Technology Ltd v Sun Alliance and London Assurance Co Ltd [2001] Ch 733 …. [1.15], [15.17] Brown Brothers Land Holdings No 1 Pty Ltd v Cmr of State Revenue [2006] VCAT 2192 …. [23.40] Brown v Gould [1972] Ch 53; [1971] 2 All ER 1505 …. [4.2], [14.3] — v Hardy (1868) 5 WW & A’B (L) 245 …. [13.3] — v Heffer (1967) 116 CLR 344 …. [4.8], [14.7] — v The Jam Factory Pty Ltd (1981) 35 ALR 79; 53 FLR 340; ATPR 40213; [1981] ANZ ConvR 156 …. [12.9], [12.11], [12.12] — v Trumper (1858) 26 Beav 11; 53 ER 800 …. [2.3], [2.4] — v Wilson (1949) 93 Sol Jo 640 …. [16.3] Browne v Flower [1911] 1 Ch 219 …. [8.2], [8.4] Brunsden v Humphrey (1884) 14 QBD 141 …. [23.61] Brunswick Development Pty Ltd v Shock Records Pty Ltd (1996) V ConvR

¶54-604 …. [4.1], [6.2], [13.4], [16.28], [16.30] — v — (1999) …. [4.8] Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 …. [1.2], [1.3], [1.4], [3.2] Bryen v Reus [1961] SR (NSW) 396 …. [7.12], [15.16] BS Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589 …. [14.1], [16.8], [23.16] BSC Footwear Ltd v Ridgway (Inspector of Taxes) [1972] AC 544 …. [26.10] Buchanan v Byrnes (1906) 3 CLR 704 …. [13.4], [16.11], [16.18], [16.22], [16.28], [16.30], [16.31], [16.32] Buckby v Speed [1959] Qd R 30 …. [1.9], [20.8] Buckeridge v Tucker (1899) 17 NZLR 513 …. [14.6] Buckland v Papillon [1866] LR 2 Ch 67 …. [14.9] Budd-Scott v Daniell [1902] 2 KB 351 …. [8.4] Budget Rent-a-Car System Pty Ltd v B S Stillwell & Co Pty Ltd (1989) V ConvR ¶54-336 …. [16.8] Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486 …. [1.5], [1.15], [4.1], [4.5], [4.6], [4.7] Bunyip Buildings Pty Ltd v Gestetner Pty Ltd [1969] SASR 87 …. [10.11] Burbridge v Vosedo Pty Ltd [2005] NSWADT 8 …. [24.3] Burke v Gillett (1994) V ConvR ¶54-507 …. [1.6], [15.15], [23.36], [24.5], [25.5], [26.4] Burne v Cambridge (1836) 1 M & Rob 539; 174 ER 185 …. [5.15] Burnett v Guice [1946] VLR 257 …. [3.4] Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 …. [1.2], [2.14], [2.19], [2.20], [17.12] Burns Philp Hardware Ltd v Howard Chia Pty Ltd (1979) 144 CLR 696 …. [6.6] — v — (1987) …. [11.8]

Burns v Dennis (1948) 48 SR (NSW) 266; 65 WN (NSW) 55 …. [1.12], [4.8] — v Shire of Woorayl [1944] VLR 166 …. [3.3] Burrell v Cameron (SCNSW, Windeyer J, 4 April 1997, unreported) …. [14.8] — v Duncan [1957] St R Qd 52 …. [15.2] Burton v Barclay [1824–34] All ER Rep 437; (1831) 7 Bing 745; 131 ER 288 …. [16.8] — v Camden LBC [2000] 2 AC 399 …. [5.15] Bury v Thompson [1895] 1 QB 6 …. [20.25] Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 …. [6.8] Butcher v Bowen (1963) 80 WN (NSW) 1520 …. [26.4] — v — [1964] NSWR 36; (1963) 80 WN (NSW) 1520 …. [2.13], [3.3], [20.24] — v Lachlan Elder Realty (2004) 218 CLR 592 …. [12.9] — v Poole Corporation [1943] 2 All ER 572; [1943] KB 48 …. [17.10], [21.1] Butlin v Cox (1955) 73 WN (NSW) 44 …. [3.8] Butlin’s Settlement Trusts, Re [1976] Ch 251 …. [6.8] Butt v McDonald (1896) 7 QLJ 68 …. [10.5] Buttons’s Lease, Re [1964] Ch 263 …. [14.1] Butts v O’Dwyer (1952) 87 CLR 267; [1953] ALR 117 …. [4.1], [14.7] Byrnes v Kendle (2011) 243 CLR 253 …. [6.4] C & A Pensions Trustees Ltd v British Vita Investments Ltd [1984] …. [7.8] C Czarnikow Ltd v Koufos [1969] 1 AC 350 …. [13.4], [16.30] C H Bailey Ltd v Memorial Enterprises Ltd [1974] 1 All ER 1003; [1974] 1 WLR 728 …. [11.1], [11.3], [11.6] C H Magill v National Australia Bank [2001] NSWCA 221; (2001) Aust Contract R ¶90-131 …. [6.6]

Cable v Bryant [1908] 1 Ch 259 …. [8.5] CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754 …. [7.3] Cadogan v Dimovic [1984] 2 All ER 168; [1984] 1 WLR 609 …. [19.4], [19.6] Caerphilly Concrete Products Ltd v Owen [1972] 1 WLR 372 …. [14.2] Cairns Motor Services Ltd v Texaco Ltd [1994] 1 WLR 1249 …. [15.20] Cairns Shelfco No 16 Pty Ltd v Armanel Pty Ltd [2004] QSC 122 …. [12.9] Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451 …. [17.11], [17.12] — v Stitcher (1983) 3 AER 759 …. [13.15] — v — [1984] 1 WLR 287 …. [10.13], [13.15] Callaghan v Merivale CBD Pty Ltd [2006] …. [11.3], [11.6], [11.8], [11.9] Callan, Ex parte; Re Smith [1968] 1 NSWR 433; 87 WN (Pt 1) (NSW) 595 …. [20.17] Caltex Oil (Australia) Pty Ltd v Baltis (1981) …. [11.20] Caltex Properties Ltd (in liq) v Love (1997) 95 LGERA 132 …. [1.3], [1.4], [2.19], [3.3] Calthorpe v McOscar [1924] …. [10.8] Calvert v Turner (1865) 2 WW & a’B (L) 174 …. [20.3] Cam & Sons Pty Ltd v Commissioner of Land Tax (1965) 112 CLR 139; [1965] ALR 852 …. [1.14] Camberwell & South London Building Society v Holloway (1879) 13 Ch D 754 …. [1.1] Cambridge Co-Ordinates Pty Ltd v Vikings Press Pty Ltd (2001) V ConvR ¶58-553 …. [23.18], [23.19] Campbell v Astil [2004] 1 WLR 403 …. [24.6] — v — [2004] NSWADT 277 …. [24.6] — v Edwards (1976) …. [11.20], [14.7] — v Morris (1952) 69 WN (NSW) 40 …. [6.9]

— v Payne (1953) 53 SR (NSW) 537 …. [16.28], [17.1], [17.22], [20.1] Campbell v Payne (1953) 53 SR (NSW) 537 …. [20.1] Campden Hill Towers Ltd v Gardner [1977] QB 823 …. [10.10] Canadian National Fire Insurance Co v Colonsay Hotel Co [1923] SCR 688 …. 13.17 — v — [1923] 95 DLR (3d) 242 …. [13.17] Canadian National Railways and Canadian Pacific Ltd, Re (1978) …. [6.6] Canas Property Co Ltd v K L Television Services Ltd [1970] 2 QB 433; [1970] 2 All ER 795 …. [16.30], [17.12], [17.17] Cancer Care Institute of Australia Pty Ltd (admin apptd), Re (2013) 16 BPR 31,529 …. [10.5] Canning v Temby (1905) 3 CLR 419 …. [16.33] Cannock v Jones (1849) 3 Ex 233 …. [7.1] Cannon Brewery Co Ltd v Signal Press Ltd (1928) 139 LT 384; [1928] All ER Rep 108 …. [18.10] Cannon Enterprises Ltd v Ranchhold [1975] 2 NZLR 57 …. [19.6] Canon Australia Pty Ltd v Patton (2007) 244 ALR 759 …. 12.14 Capel Services Ltd v Legal and General Assurance Society Ltd (1984 unreported) …. [11.8], [11.20] Capital and Counties Bank v Rhodes [1903] 1 Ch 631 …. [16.8] Capital and Equity Group Pty Ltd v Hilton Central Ltd [2010] SASC 197 …. [27.7] Capital Finance Co Ltd v Bray [1964] 1 WLR 323 …. [10.5] Capital Market Brokers Pty Ltd v Hamelyn UPC Ltd (SC(NSW), Young J, 2 May, 1989 unreported) …. [1.15] Carberry v Gardiner (1936) 36 SR (NSW) 559 …. [1.9], [2.8] Carbone v Zecevich [1954] SASR 296 …. [19.6] Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 584; [2002] VSC 272 …. [10.1], [10.8], [10.10] Card v Bilderbeck [1951] NZLR 296 …. [10.8]

Carlton Cricket etc Club v Joseph [1970] VR 487 …. [5.12] Carmody v Delehunt (1984) …. [11.3] Carpet Fashion Pty Ltd v Forma Holdings Pty Ltd [2004] NSWCA 150 …. [8.5] Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 …. [16.33], [16.34] Carradine Properties Ltd v Aslam [1976] 1 WLR 442 …. [14.8], [20.17], [20.20] Carrathool Hotel Pty Ltd v Scutti [2005] ANZ ConvR 471; (2006) NSWw ConvR ¶56-132; [2005] NSWSC 401 …. [10.1], [10.6], [10.10] — v — (2006) NSW ConvR ¶56-132 …. [6.8], [11.16] Carson v Wood (1884) 10 VLR (L) 223 …. [17.18] Carstairs v Taylor (1871) LR 6 Ex 217 …. [10.1] Carswell v Collard (1893) 20 R (HL) 47 …. [16.33] Carter v Aldous [1921] VLR 234 …. [20.3] — v Hyde (1923) 33 CLR 115 …. [14.1], [14.8] — v Schmitt [2003] NSWSC 1166 …. [14.8] — v Smith (1952) 52 SR (NSW) 290; 69 WN (NSW) 326 …. [4.10] Castellain v Preston (1883) 11 QBD 380 …. [13.17] Castor v Brisbane City Council [1955] St R Qd 348 …. [3.3] Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 …. [15.9], [15.12], [15.13] Cavallari v Premier Refrigeration Co Pty Ltd (1952) 85 CLR 20 …. [14.8] CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23 …. [23.8], [23.18] Celsteel Ltd v Alton House Holdings Ltd (No 2) [1986] 1 WLR 666 …. [8.4], [13.15] Centaploy Ltd v Matlodge Ltd [1974] Ch 1; [1973] 2 All ER 720; [1973] 2 WLR 832 …. [20.2] Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 3 All ER 610; [1972] 1 WLR 1048 …. [17.18], [18.7], [19.4], [19.5], [20.31]

Central Estates Ltd v Secretary of State for the Environment (1995) …. [11.6] Central London Property Trust v Hightrees House Ltd [1947] …. [11.21] Centrepoint Custodians Pty Ltd v Lidgerwood Investments Pty Ltd [1990] VR 411 …. [6.5], [7.16] Centrovincial Estates plc v Bulk Storage Ltd (1983) 46 P & CR 393; [1983] 2 EGLR 45 …. [11.9], [15.18] Chai Saw Yin v Liew Kwee Sam [1962] AC 304 …. [24.19], [25.15], [27.17] Chaka Holdings Pty Ltd v Sunsim Pty Ltd (1987) NSW ConvR ¶55-367 …. [1.4], [3.8] Chambers v Kingham (1878) 10 Ch D 743 …. [5.18], [16.8] Chan v Cresdon Pty Ltd (1989) 168 CLR 242; 89 ALR 552 …. [1.6], [2.7], [2.8], [4.1], [4.8], [13.1], [14.1], [15.16], [19.1], [23.11] — v Zacharia (1984) 53 ALR 417 …. [5.12], [14.8] Chandless-Chandless v Nicholson [1942] 2 KB 321; 2 All ER 315 …. [19.2], [19.5] Chang v Registrar of Titles (1976) 137 CLR 177 …. [4.8] Chaplin & Staffordshire Potteries Waterworks Co, Re [1922] 2 Ch 824 …. [5.18] Chaplin v Smith [1926] 1 KB 198 …. [15.3], [26.8] Chapman & Hobbs: Re (1885) …. [11.27] — v Chapman [1954] AC 429 …. [7.4] — v Towner (1840) 6 M&W 100; 151 ER 338 …. [1.6] Chappell & Co Ltd v Nestle Co Ltd [1959] 2 All ER 701; [1960] AC 87 …. [23.18] Chappell v Gregory (1864) 34 Beav 250; 55 ER 631 …. [10.1] Charalambous v Ktori [1972] 1 WLR 951 …. [9.2] Charles Clay & Sons Ltd v British Railways Board [1971] Ch 725; [1971] 1 All ER 1007 …. [1.5], [4.2] Charmar Electrical Pty Ltd v Minda Inc (1990) 55 SASR 112 …. [1.6], [4.8], [11.8], [15.20], [16.28], [16.30], [16.34]

Chatfield v Elmstone Resthouse Ltd [1975] 2 NZLR 269 …. [7.4], [10.6], [10.8], [11.3] Chatham Empire Theatre (1955) Ltd v Ultrans [1961] 1 WLR 817 …. [19.6] Chatsworth Properties Ltd v Effiom [1971] 1 All ER 604 …. [5.16] Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 …. [6.9] Chelfield Pty Ltd v Goldsea Pty Ltd; WC Pty Ltd, Re [2003] 2 Qd R 243 …. [17.15], [18.3], [18.6], [18.10] Chelsea Cloisters Ltd (in liq), Re (1980) 41 P & CR 98 …. [13.14] Chelsea Estates Investment Trust Co Ltd v Marche [1955] 115 CLR 1; [1955] Ch 328; [1966] ALR 929 …. [19.4], [19.6] Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1; 10 AITR 52 …. [1.1], [1.2], [1.4], [1.7], [16.11], [16.14] Cheshire Lines Committee v Lewis & Co (1880) 50 LJQB 121 …. [1.5] Chester v Buckingham Travel Ltd [1981] 1 WLR 96 …. [7.16], [8.10], [9.1], [9.2], [9.3] Chesterfield v Janssen (1750–1) 2 Ves Sen 125; Ves Sen Supp 297; 28 ER 82,531 …. [19.1] Chesworth v Farrer [1967] 1 QB 407 …. [16.36] Chetcuti v Scarf [2000] NSWSC 637 …. [24.9] Cheyne v Moses [1919] St R Qd 74 …. [15.20], [17.18] Chipper v Octra Nominees Pty Ltd [2006] FCA 1633 …. [14.4] Choi v Trust Co of Australia Ltd (2001) V ConvR ¶58-549; [2000] VCAT 1867 …. [23.42], [23.57] Chrisdell v Johnson [1987] 2 EGLR 123 …. [17.18] Christiansen v Klepac [2001] NSWSC 385 …. [16.30] Christopher v Wright [1949] VLR 145 …. [2.4], [2.12] Chronopoulos v Caltex Oil (Australia) Pty Ltd (1982) 70 FLR 8; 45 ALR 481 …. [15.17], [16.14] Church v Brown (1808) 15 Ves 258; 33 ER 752; [1803–13] All ER Rep 440 …. [9.1]

Churcher v Danis Hotels Pty Ltd (SC(NSW), Holland J, 12 February 1980, unreported) …. [14.8], [14.9] Churchill v Williams [1877] Knox 52 …. [13.15] Cicinave Pty Ltd v Jasco Pty Ltd (1989) 5 BPR 97,329 …. [18.3], [18.6], [19.4] Cihan v Oncu [2004] 11 BPR 21,653 …. [16.3] Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168 …. [7.4], [15.20] City & Westminster Properties (1934) Ltd v Mudd [1959] Ch 129; [1958] 2 All ER 733 …. [6.5], [6.8], [19.4] City and Metropolitan Properties Ltd v Greycroft Ltd [1987] 1 WLR 1085 …. [15.20] City Mutual Life Assurance Society Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1 …. [1.14], [2.19], [15.20] City of Aberdeen Council v Clark (1999) …. [11.4], [11.7] City of Ballarat v Waller [1924] VLR 115 …. [8.3], [8.7] City of Camberwell v Reed [1954] VLR 65 …. [20.27] City of London v Nash (1747) 26 ER 1095 …. [1.11] City of London Corporation v Fell [1993] 4 All ER 968 …. [15.1] — v — [1993] QB 589 …. [1.2], [15.1] — v — [1994] 1 AC 458 …. [15.20] City of Melbourne Gold Mining Co v R (1867) 4 WW & a’B (Eq) 148 …. [4.8] City of Melbourne v Holdenson and Nielson Fresh Foods Pty Ltd [1959] VR 626 …. [5.7], [5.8] City of Rockingham v PMR Quarries Pty Ltd (2001) 118 LGERA 93; [2001] WASCA 317 …. [1.2], [1.3], [24.2], [25.2], [26.2], [27.2], [28.2] City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 …. [5.6], [5.7], [5.8], [6.7], [6.10] City Parking Pty Ltd v Ausvest Holdings Pty Ltd (1999) V ConvR ¶54-597 …. [7.16]

City West Centre Pty Ltd v Galaxy Media Pty Ltd (1998) 9 BPR 16,313 …. [10.5], [16.36] Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347; [1923] All ER Rep 595 …. [17.18], [18.4], [18.7], [18.9] Clarey v Principal and Council of the Women’s College (1953) 90 CLR 170 …. [7.14] Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) …. [12.9] Clarke v Austin (1856) …. [11.28] — v Japan Business Machines (Australia) Pty Ltd [1984] 1 Qd R 404 …. [18.6] — v Tresider (1867) 4 WW & A’B (L) 164 …. [10.5], [16.36] — v Tyler (1949) 78 CLR 646 …. [1.4], [20.8] — v Watson [1943] VLR 81 …. [16.3] Classic International Pty Ltd v Lagos (2002) 60 NSWLR 241 …. [6.8] Claude Neon Ltd v Melbourne and Metropolitan Board of Works (1969) 43 ALJR 69 …. [1.4], [3.6] Clegg v Hands (1890) 44 Ch D 503 …. [15.19] Clement v Morris [1922] VLR 189 …. [6.11] Cleverdon v Townsend (1894) 16 ALT 69 …. [17.10] Clifton Securities Ltd v Huntley [1948] 2 All ER 283 …. [17.17] Clifton v Palumbo [1944] …. [4.1] Close v Wilberforce (1838) 1 Beav 112; 48 ER 881 …. [15.21] Clover Pines Pty Ltd v Avin Operations Pty Ltd [2003] VSC 242 …. [17.17] Clowes v Bentley Pty Ltd [1970] WAR 24 …. [10.8] — v Hughes (1870) LR 5 Exch 160 …. [1.5], [2.2] Clyne v Lowe (1968) 69 SR (NSW) 433 …. [14.5] CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2012] TASFC 7 …. [16.35], [18.2] — v — [2012] TASSC 7 …. [18.2] Coal Commission v Earl Fitzwilliam’s Royalties Co [1942] Ch 365 …. [11.1]

Coastal Estates Case [1965] VR …. [16.30] Coatsworth v Johnson (1885) 55 LJQB 220 …. [6.8] — v — (1886) 55 LJ QB (NS) 220 …. [4.1] Cobb v Stokes (1807) 8 East 358; 103 ER 380 …. [2.3], [16.5], [17.17], [23.63] Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd [2000] VSC 353 …. [14.2] Cockburn v Cockburn [1921] NZLR 652 …. [10.5] — v Smith [1924] …. [10.1] Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; 41 ALR 367; [1982] HCA 21 …. [1.4], [6.4], [6.5], [6.6], [6.10], [8.1] Cody v Martyr (1954) 71 WN (NSW) 109 …. [3.6] Coen v Costelloe (1952) 69 WN (NSW) 230 …. [16.18] Cohen v Centrepoint Freeholds Pty Ltd (1982) 66 FLR 57 …. [12.9] — v Donegal Tweed Co Ltd (1935) 79 Sol Jo 592 …. [17.11] — v Milner [1960] VR 499 …. [2.13], [2.14], [3.9], [20.2], [20.3] — v Popular Restaurants Ltd [1917] 1 KB 480; [1916–17] All ER Rep 1113 …. [13.16], [15.19] Colchester Borough Council v Smith [1991] Ch 448 …. [1.4], [2.19] Cole v Kelly [1920] All ER Rep 537; [1920] 2 KB 106 …. [1.9], [7.13], [15.20] Colebeck v Girdlers Co [1896] 1 QB 234 …. [10.1] Coleman v Dean (1870) 1 VR (Eq) 142 …. [9.3], [17.8] Coleman, Ex parte; Re Smith (1934) 7 ABC 1 …. [7.4] Coles Supermarkets Australia Pty Ld v Australian Retail Freeholds Pty Ltd (1996) 16 WAR 282 …. [13.11] Colin Marg Pty Ltd v Mackay Medical Investment Ltd [2006] …. [11.8], [11.20] Collector of Customs v Chemark Services Pty Ltd (1993) 42 FCR 585; 114

ALR 531 …. [23.18], [24.2], [25.2] Collier Constructions Pty Ltd v Foskett Pty Ltd (1990) 97 ALR 460 …. [12.9] Collier v Howard (23 April 1996) NSW Comm Trib) …. [16.36] — v Mason (1825) …. [11.20] Collins v Claughton [1959] 1 WLR 145 …. [16.18] — v Feltham Urban District Council [1937] 4 All ER 189 …. [26.10] — v Hopkins [1923] 2 KB 617; [1923] All ER Rep 225 …. [8.6] — v Winter [1924] NZLR 449 …. [10.1], [10.11] — v Wragge (1926) 26 SR (NSW) 53; 43 WN (NSW) 35 …. [14.3] Collins Hill Group Pty Ltd v Trollope Silverwood and Beck Pty Ltd [2002] VSCA 205 …. [6.6] Collison v Lettsom (1815) 6 Taunt 224; 128 ER 1020 …. [15.20] Colman v Golder [1957] VR 196 …. [4.5], [4.6], [15.17], [16.13] Colonial Bank v Roache (1870) 1 VR (L) 165 …. [5.16] Colonial Investment & Agency Co Ltd v Cobain (1888) 14 VLR 740 …. [13.4] Colvin v Bowen (1958) 75 WN (NSW) 262 …. [15.12], [15.13] — v Bradley Brothers Pty Ltd (1943) …. [12.16] Colyton Investments Pty Ltd v McSorley (1963) 107 CLR 177; [1963] ALR 487 …. [5.18] Combara Nominees Pty Ltd v McIlwraith-Davey Pty Ltd (1991) 6 WAR 408 …. [6.7], [8.7], [10.3], [10.8] Combe v Combe [1951] …. [11.21] Comber v Fleet Electrics Ltd [1955] 1 WLR 566 …. [7.8], [15.15] Cominos v Rekes [1979] 2 BPR 9619 …. [15.8], [15.9] Commercial Bank of Australia v Amadio (1983) 151 CLR 447 …. [12.14] Commercial General Administration Ltd v Thomsett [1979] 1 EGLR 62 …. [7.14] Commission for New Towns v Cooper (Great Britain) [1995] Ch 259 ….

[6.8] Commissioner of Inland Revenue v Watson [1960] NZLR 259 …. [25.5] Commissioner of Stamp Duties (NSW) v Brasch (1937) 57 CLR 69; [1937] ALR 246 …. [5.9], [5.18], [11.1], [11.22], [16.25] v Carlenka Pty Ltd (1995) 41 NSWLR 329 …. [6.8] — v J V (Crows Nest) Pty Ltd (1987) 7 NSWLR 529; (1987) 86 ATC 4740 …. [11.1] Commissioner of Stamps (WA) v Whiteman Ltd (1940) 64 CLR 407 …. [10.5] Commissioner of State Revenue (Vic) v Price Brent Services Pty Ltd [1995] 2 VR 582; (1994) 94 ATC 4672 …. [11.1] — v — [1995] …. [23.20] Commissioner of State Revenue v Uniqema (2004) 9 VR 523 …. [10.5] Commissioner of Taxation v DB Rreef Funds Management Ltd (2006) 152 FCR 437; [2006] FCAFC 89 …. [23.41] Commissioner of Taxes (Qld) v Camphin (1937) 57 CLR 127 …. [14.1] Commissioners of Crown Lands v Page [1960] 2 QB 274; [1960] 2 All ER 726 …. [8.4] Commissioners of State Savings Bank of Victoria v Millane [1931] VLR 18 …. [17.14] Commissioners of Works v Hull [1922] 1 KB 205; [1921] All ER Rep 508 …. [17.11], [17.12] Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589 …. [5.16] — v Figgins Holdings Pty Ltd [1994] 2 VR 505 …. [7.4], [14.6], [15.20], [16.18], [16.19], [23.18], [23.30] — v Friedrich (1991) 5 ACSR 115; 9 ACLC 946 …. [23.36] Commonwealth Development Bank of Australia v Eagle Hotels Pty Ltd (1990) NSW ConvR ¶55-506 …. [16.34] Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47 …. [1.3], [1.12], [2.7], [2.13], [2.19], [4.8], [15.5], [24.18], [26.8], [27.16]

— v — (1945) 62 WN (NSW) 240 …. [15.5] Commonwealth Life Assurance Co v Anderson [1946] 46 SR (NSW) 47 …. [1.12] Commonwealth of Australia v Anderson (1961) 105 CLR 303; [1961] ALR 354 …. [22.3] — v Antonio Giorgio Pty Ltd (1986) 12 FCR 51; 67 ALR 244 …. [14.1], [14.6], [14.9] — v Clarke [1994] 2 VR 333 …. [1.15] — v Silverton Ltd (1997) 130 ACTR 1 …. [13.17] — v Verwayen (1990) 170 CLR 394 …. [14.6] — v Wawbe Pty Ltd (1999) V ConvR ¶54-599; [1998] VSC 82 …. [11.20], [23.40] Commonwealth Oil Refineries Ltd v Hollins [1956] VLR 169 …. [4.6], [13.6], [13.9] Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 …. [10.13], [13.4], [13.15], [16.30] — v Anderson (1961) 105 CLR 303; [1961] ALR 354 …. [5.6], [22.3] — v Bogle (1953) 89 CLR 229 …. [24.2], [25.2], [26.2] — v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372 …. [24.2], [25.2] — v GIO Compulsory Third Party Insurance Ltd (1997 unreported) …. [11.5] — v K N Harris Pty Ltd [1965] NSWR 63 …. [1.3], [20.5], [20.9] — v Newcrest Mining (WA) Ltd (1995) 130 ALR 193 …. [14.8] — v Orr (1981) 58 FLR 219 …. [5.16] — v Rhind (1966) 119 CLR 584; [1967] ALR 483 …. [5.6] — v Verwayen (1990) 170 CLR 394; 95 ALR 321 …. [1.15] — v Wawbe Pty Ltd (1999) …. [11.20] Commonwealth Bank of Australia v Barker (2014) 88 ALJR 814; 312 ALR 356; [2014] HCA 32 …. [6.9] — v Figgins Holdings Pty Ltd [1994] 2 VR 505; (1994) V ConvR ¶54-492

…. [15.20], [16.18], [16.19] Commonwealth-Reid v Public Trustee [1944] …. [11.11] Congleton Corporation v Pattison (1808) 10 East 130; 103 ER 725 …. [15.19], [15.20] Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501 …. [7.4] Connolly v Ryan (1922) 30 CLR 498 …. [4.8] Connor v McManus (1925) 27 WALR 104 …. [16.18] Conodate Investments v Bentley Quarry Engineering Co (1970) 216 EG 1047 …. [13.15] Conoid Pty Ltd v International Theme Park Ltd [2000] NSWCA 189 …. [24.9] Conquest v Ebbetts [1896] AC 490; [1895–9] All ER Rep 622 …. [10.13] Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607 …. [14.1], [17.10] Consolidated Entertainments Ltd v Taylor [1937] 4 All ER 432 …. [5.10] Con-Stan Industries v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226 …. [1.15] Construction, Forestry, Mining and Energy Union v Hadkiss (2007) 160 FCR 151 …. [12.9], [12.10] Cook v Evans (1948) 49 SR (NSW) 83 …. [1.9] — v Rowe [1954] VLR 309 …. [5.12], [5.15], [7.12], [15.16] Cooney v Burns (1922) 30 CLR 216; 28 ALR 181 …. [4.5] — v Millar [1921] VLR 254 …. [10.5] Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1991) …. [11.8] Cooper v Dick (1862) …. [11.28] — v Federal Commissioner of Taxation (1958) 100 CLR 131; 7 AITR 333 …. [16.9] Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 …. [7.8], [10.13], [13.11]

Coopers & Lybrand Ltd v William Schwartz Construction Co Ltd (1980) 116 DLR (3d) 450 …. [15.14] Copley v Newmark [1950] VLR 17 …. [15.2], [15.3] Copper, Ex parte (1865) 34 LJ Ch 373 …. [5.19] Copperart Pty Ltd, Re (1995) 16 ACSR 351 …. [14.1], [14.6], [14.9] — v Bayside Developments Pty Ltd (1996) 16 WAR 396 …. [4.2], [4.8], [16.18], [16.21], [16.21], [16.28], [16.30], [16.31], [16.32], [16.34] Corbett v Plowden (1884) 26 Ch D 678 …. [5.16] Cornillie v Saha and Bradford & Bingley Building Society (1996) 72 P & CR 147 …. [17.18] Cornish v Searell (1828) 8 B & C 471; 108 ER 1118 …. [1.14] — v Stubbs (1870) LR 5 CP 334 …. [3.7] Coronation Street Industrial Properties Ltd v Ingall Industries plc [1989] 1 WLR 304 …. [15.20] Corpco No 23 Pty Ltd v JS Hemingway Investments Pty Ltd [2003] …. [11.20] Corpers (No 664) Pty Ltd v NZI Securities Australia Ltd (1989) NSW ConvR ¶55-475 …. [1.15] Cosh’s Contract, Re [1897] 1 Ch 9 …. [15.15] Costain Property Developments Ltd v Finlay & Co Ltd (1988) 57 P & CR 345 …. [13.4] Cotesworth v Spokes (1861) 10 CBNS 103; 142 ER 389 …. [19.3] Cotrell Pty Ltd v D and M Pelle Holdings Pty Ltd [2006] ACTCA 4 …. [13.11] Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 …. [10.13], [15.2] Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 …. [6.8] Cousin v Grant (1991) 103 FLR 236 …. [7.1] Cousins v Phillips (1865) 2 H & C 892; 159 ER 786 …. [16.3] Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605; [1937] ALR 273

…. [3.1], [3.8], [3.9] Cox v Harper [1910] 1 Ch 480 …. [11.1] Crabb v Arun District Council [1976] Ch 179 …. [19.1] Craddock Bros Ltd v Hunt, [1923] 2 Ch 136; [1923] All ER Rep 394 …. [6.8] Crago v Julian [1992] 1 WLR 372 …. [1.6], [15.17] Cram v Bellambi Coal Co Ltd (1964) 82 WN (NSW) (Pt 1) 18 …. [10.10] Crane v Morris [1965] 1 WLR 1104 …. [1.4] Crate v Miller [1947] KB 946; 2 All ER 45 …. [20.4], [20.5], [20.21] Craven v Geal [1932] VLR 172 …. [10.5] Crawley BC v Ure [1996] QB 13 …. [20.8] Crédit Suisse v Beegas Nominees Pty Ltd [1994] 4 All ER 803 …. [8.1], [10.1], [10.8] Creer v P & O Lines of Australia Pty Ltd (1971) 125 CLR 84; 45 ALJR 697 …. [15.7], [15.10] Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751 …. [7.8], [19.6] Creska Ltd v London Borough of Hammersmith and Fulham [1998] 3 EGLR 35 …. [10.8] Crick v Murray (1882) 3 LR (NSW) (L) 20 …. [5.3] Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd [1945] AC 221; [1945] 1 All ER 252 …. [1.2], [6.10], [16.28], [16.30] Cripps v Irwin (1931) 31 SR (NSW) 383 …. [15.19] Cripps, Re [1946] …. [5.10] Croft v Kennaugh [1945] VLR 40 …. [17.12] — v Lumley (1858) 6 HL Cas 672; [1843–60] All ER Rep 162; 10 ER 1459 …. [16.30], [17.18] Cromwel v Andrews (1583) …. [11.3] Crook v Whitbread (1919) LJKB 959 …. [17.17]

Crosse v Gardner [1688] Carth 90 …. [6.11] Crossley Bros Ltd v Lee [1908] 1 KB 86 …. [10.5] Crouch v Tregonning (1872) LR 7 Exch 88 …. [15.21] Crowley v Vitty (1852) 21 LJ Ex 135; 131 ER 365 …. [16.19], [16.21] Crown Estate Commissioners v Signet Group plc [1996] 2 EGLR 200 …. [7.8] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2013] VSC 614 …. 4.2 — v — (2016) 333 ALR 384; 90 ALJR 770 …. [1.5], [1.15], [14.3] Cruse v Mount [1933] 1 Ch 278; [1932] All ER Rep 781 …. [8.1], [8.6] Crusoe d Blencowe v Bugby (1771) 2 WmB1 766 …. [15.3] Cuff v J & F Stone Property Co Ltd [1979] AC 87 …. [11.1], [11.8] Cugg Pty Ltd v Gibo Pty Ltd (2001) 10 BPR 18,641 …. [10.8], [10.11] Cummings v Matheson [1955] VLR 389 …. [16.18] Cunningham-Reid v Public Trustee [1944] KB 602; 2 All ER 6 …. [5.15] Curtain v Aparo [1988] ANZ ConvR 508; (1988) V ConvR ¶54-316 …. [23.39] Curtin v Meadlow Holdings Pty Ltd (2001) Q ConvR ¶54-552 …. [10.5], [16.36] Curtis v Spitty (1835) 1 Bing NC 756; 131 ER 1309 …. [15.19] — v Stutley [1950] ALR 888 …. [7.14] Cusack-Smith v Gold [1958] 1 WLR 611 …. [18.10] Cutler v Wandsworth Stadium Ltd [1949] AC 398 …. [6.9] Cutting Edge Victoria Pty Ltd v Industry Superannuation Property Trust Pty Ltd (2001) V ConvR ¶58-550; [2000] VCAT 2011 …. [23.39], [23.57] Cutting v Derby (1776) 2 Wm Bl 1077; 96 ER 634; [1775–1802] All ER Rep 520 …. [17.17] — v —; Cobb v Stokes (1807) 8 East 358; 103 ER 380 …. [17.17] Cuttle v Brandt (1947) 64 WN (NSW) 96 …. [1.12] Cutts v Buckley (1933) 49 CLR 189 …. [6.11]

D’Arcy v Burrelli Investments Pty Limited (1987) 8 NSWLR 317 …. [10.5] D’Silva v Lister House Development Ltd [1971] 1 Ch 17; [1970] 1 All ER 858 …. [2.14], [4.2], [5.8] Daco Enterprises Pty Ltd v The Golden Sultana Pty Ltd [2006] VCAT 2547 …. [23.14], [23.15] Dad & Dave Pty Ltd v W & J Nicholls Pty Ltd [2005] NSWSC 415 …. [14.6] Dagger v Shepherd [1946] 1 KB 215; 1 All ER 133 …. [20.21] Daiches v Bluelake Investments Ltd [1985] 2 EGLR 6 …. [10.7] Daily, The v White (1946) 63 WN (NSW) 262 …. [5.18] Dainford Ltd v Lam (1985) 3 NSWLR 255 …. [24.14], [28.12] Dakin v Cope (1827) 2 Russ 170; 38 ER 299 …. [17.4] Dale v Hamilton (1846) 5 Hare 369; 67 ER 955 …. 4.5 Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546 …. [15.20], [20.8] Dalla Costa v Beydoun (1990) 5 BPR 11,379 …. [19.2] Dally-Watkins, Ex parte; Wilson, Re (1955) 72 WN (NSW) 454 …. [14.10], [18.6], [18.10] Dalton v City Freehold Investment Co Ltd (1888) 9 LR (NSW) Eq 129 …. [14.1], [15.20] — v O’Gorman [1921] VLR 599 …. [4.8], [14.5] — v Pickard [1926] 2 KB 545; [1926] All ER Rep 371 …. [16.22] Danel Investments Pty Ltd v Nexstar Investments Pty Ltd (No 2) [2011] ACTSC 120 …. [28.6] Dang v T M Smith Street Pty Ltd (VCAT, Deputy President Macnamara, 10 February 2005) …. [23.64] Daniell v Federal Commissioner of Taxation (1928) 42 CLR 296 …. [24.5], [25.5], [27.5] Daniher v Fitzgerald (1919) 12 SR (NSW) 260 …. [5.16] Danita Investments Pty Ltd v Rockstrom [1963] NSWR 1275; (1963) 80 WN (NSW) 1287 …. [1.3], [3.3]

Darbishire v Warran [1963] 1 WLR 1067 …. [26.10] Darcy v Ryan (1882) 8 VLR (Eq) 36 …. [4.6] Darley Main Colleries Limited v Mitchell (1886) 11 App Cas 127 …. [23.62] Davenport v R (1877) 3 App Cas 115; [1874–80] All ER Rep 157 …. [17.18] — v Smith [1921] 2 Ch 270 …. [17.18], [18.6] Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406 …. [15.8], [15.10], [15.11], [15.13], [26.8], [27.16] Daverich Pty Ltd v Daverich Pty Ltd [2005] NSWADT 54 …. [24.14] David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487 …. [15.16], [17.12], [17.18] David Jones Ltd v Leventhal (1927) 27 SR (NSW) 350 …. [19.4] David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; 109 ALR 57 …. [11.3], [23.40] Davidson v McCarten [1953] VLR 697 …. [20.27] Davies v Beynon-Harris (1931) 47 TLR 424 …. [5.3] — v Davies (1888) 38 Ch D 499 …. [10.3] — v Hall [1954] 1 WLR 855 …. [5.19] Davis v Eyton (1830) 7 Bing 154 …. [10.4] — v McConochie (1915) 15 SR (NSW) 510 …. [11.1] — v McKinnon (1871) UCQB 564 …. [11.1] — v Town Properties Investment Corporation Ltd [1903] 1 Ch 797 …. [15.20] Dawdy, Re (1886) 53 LT 800 …. [11.20], [14.7] Dawson v Dyer (1833) 5 B & Ad 584 …. [13.15] — v Stevenson [1920] VLR 564 …. [10.5] De Garis and Rowe’s Lease, Re [1924] VLR 38 …. [13.17] De Landgrafft v Brown (1993) …. [11.16] De Lassalle v Guildford [1901] 2 KB 215; [1900–03] All ER Rep 495 …. [6.11] De Medina v Norman (1842) 9 M and W 820; 152 ER 347 …. [4.1]

De Simone Nominees Pty Ltd v Szabo [2005] VCAT 1595 …. [23.11] — v — [2005] VCAT 2919 …. [23.11] De Soysa v De Pless Pol (1912) AC 194 …. [16.33] Deanplan Ltd v Mahmoud [1993] Ch 151 …. [15.21] Debenhams Retail plc v Sun Alliance and London Assurance Co Ltd [2005] EWCA Civ 868 …. [6.4] Debonair Nominees Pty Ltd v J & K Berry Nominees Pty Ltd (2000) 77 SASR 261; [2000] SASC 244 …. [26.8], [27.7], [27.16], [28.15] Deeble v McMullen (1857) 8 Ir C L Rep 355 …. [16.36] Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (2010) 15 BPR 29,021 …. [18.2] — v — (2012) 16 BPR 31,089 …. [14.6] Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2012] NSWSC 251 …. [24.2] Degan v Lee (1939) 39 SR (NSW) 234 …. [5.17] Della Imports Pty Ltd v Birkenhead Investments Pty Ltd (1987) NSW Conv R 55–358 …. [14.8] Dellneed Ltd v Chin [1987] 1 EGLR 75 …. [15.2] Dellwest Pty Ltd v Cafabe Pty Ltd (26 November 1997, unreported) …. [4.1] Demagogue Pty v Ramensky (1992) 39 FCR 31 …. [12.9] Demtear Pty Ltd v Abelian Pty Ltd [2004] QSC 103 …. [4.2], [4.8] Dendy v Evans [1908–10] All ER Rep 589 …. [17.12], [17.13], [19.4], [19.5] — v — [1909] 2 KB 894 …. [17.12] — v — [1910] 1 KB 263 …. [16.30], [17.13], [19.4], [19.5] Deneys v Delafotis (1992) V ConvR ¶54-433 …. [1.4], [6.7] Denham Bros Ltd v W Freestone Leasing Pty Ltd [2002] QSC 307 …. [12.3] — v — [2004] 1 Qd R 500 …. [15.20] Dennis v McDonald [1982] Fam 63 …. [5.15] Dennis & Copley v Eddie [1952] VLR 92 …. [1.6], [2.11], [2.12], [4.3], [17.9], [17.12], [19.2], [20.1]

Denny Mott & Dickson v James B Fraser [1944] AC 265 …. [6.10] Denny’s Restaurants Pty Ltd, Re [1977] Qd R 92 …. [14.6] Deputy Cmr of Taxation v Barroleg Pty Ltd (1997) …. [11.3] Deventer Pty Ltd v BP Australia Ltd {1983-4] ANZ ConvR 311 …. [10.5] Dewar v Goodman [1909] AC 72; [1908–10] All ER Rep 188 …. [15.20] DHK Retailers Pty Ltd v Leda Commercial Properties Pty Ltd [1993] ANZ ConvR 635 …. [16.34] — v — (FC, Full Court, 21 April 1993, unreported) …. [16.28] Di Biase v Rezek [1971] 1 NSWLR 735 …. [4.5] Di Torio v Zollo [1977] VR 547 …. [2.4], [7.13] Diakogiannis v Johnson (1989) NSW Con R55 472 …. [14.8] Dibble v Bowater (1853) …. [11.3] Dickinson v Burrell (1866) LR 1 Eq 337; 35 LJ Ch 371 …. [6.8] Digby v Atkinson (1815) 4 Camp 275; 171 ER 88 …. [7.13] Dikstein v Kanevsky [1947] VLR 216 …. [7.14], [8.1], [8.4], [20.3], [24.8], [25.7], [26.7], [27.6] Dileum Pty Ltd v J K Corporation Pty Ltd (1989) 1 WAR 244 …. [26.12] Dillon v Nash [1950] VLR 293 …. [4.9], [10.1] Dillwyn v Llewelyn (1862) 4 De G F & J 517 …. [1.15] Dimond v Moore (1931) 45 CLR 159; [1931] ALR 177 …. [4.1], [16.27] Dinyarrak Investments Pty Ltd v Amoco Australia Ltd (1982) 45 ALR 214 …. [12.9] Direct Food Supplies (Vic) Pty Ltd v DLV Pty Ltd [1975] VR 358 …. [19.1], [19.2] Direct Spanish Telegraph Co Ltd v Shepherd (1884) 13 QBD 202 …. [7.16] DKB Investments Pty Ltd v Belcote Pty Ltd [No 2] (1993) 113 FLR 290 …. [7.4] Dockrill v Cavanagh (1944) 45 SR (NSW) 78 …. [1.6], [2.7], [2.8], [2.19] Dockside Holdings Pty Ltd v Rakio Pty Ltd (2001) …. [11.8]

Dodd Properties (Kent) Ltd v Canterbury City Council [1980] 1 All ER 928; [1980] 1 WLR 433 …. [10.13] Dodd v Acklom (1843) 134 ER 1063 …. [16.21] Dodson Bull Carpet Co Ltd v City of London [1975] 1 WLR 781 …. [20.15] Doe d Abdy v Stevens (1832) 3 B & Ad 299; 110 ER 112 …. [6.5], [7.2], [17.2] Doe d Armstrong v Wilkinson (1840) 12 Ad & El 743; 113 ER 995 …. [20.17], [20.22] Doe d Aslin v Summersett (1830) 1 B & Ad 135; 109 ER 738 …. [5.15] Doe d Bradford v Watkins (1806) East 551; 103 ER 213 …. [20.27] Doe d Buross v Lucas (1804) 5 Esp 153; 170 ER 769 …. [20.27] Doe d Calvert v Frowd (1828) 130 ER 883 …. [17.21] Doe d Carlisle v Woodman (1807) 8 East 227; 103 ER 329 …. [20.12], [20.27] Doe d Cox v Roe (1802) 4 Esp 185; 170 ER 68 …. [20.22] Doe d Darke v Bowditch (1846) 8 QB 973 …. [17.8], [19.3] Doe d David v Williams (1835) 7 C & P 322; 173 ER 143 …. [17.21] Doe d Dixon v Roe (1849) 7 CB 134; 137 ER 55 …. [16.30], [19.3] Doe d Ellis v Sandham (1787) 1 TR 705; 99 ER 1332 …. [9.2] Doe d Galehouse v Rees (1838) 4 Bing NC 384; 132 ER 835 …. [17.18] Doe d Graves & Downe v Wells (1839) 10 Ad & E 427; 113 ER 162; [1835– 42] All ER Rep 204 …. [17.21] Doe d Gray v Stanion (1836) 1 M & W 695; 150 ER 614; [1835–42] All ER Rep 290 …. [16.19], [17.21] Doe d Gretton v Roe (1847) 4 CB 576; 136 ER 633 …. [19.3] Doe d Griffith v Pritchard (1833) 110 ER 973; (1833) 5 B & Ad 765 …. [17.18] Doe d Henniker v Watt (1828) 8 B & C 308; 108 ER 1057 …. [17.5] Doe d Jefferies v Whittick [1820] Gow 195; 171 ER 883 …. [17.21] Doe d Kindersley v Hughes (1840) 7 M & W 139 …. [5.15]

Doe d Lloyd v Powell (1826) 5 B & C 308; 108 ER 115 …. [7.12], [17.2] Doe d Lockwood v Clarke (1807) 8 East 183; 103 ER 313 …. [16.6] Doe d Lord Macartney v Crick (1805) …. [5.15] Doe d Lord v Wilson (1854) 1 VLT 115 …. [22.4] Doe d Macartney v Crick (1805) 5 Esp 196; 170 ER 784 …. [20.13] Doe d Mann v Walters (1830) 10 B & C 626; 109 ER 583 …. [20.9] Doe d Mann v Walters; Re Bebington’s Tenancy [1921] …. [20.9] Doe d Marquis of Bute v Guest (1846) 15 M & W 160; 150 ER 804 …. [7.8] Doe d Matthews v Jackson (1779) 1 Doug KB 175; 99 ER 115 …. [17.17] Doe d Matthewson v Wrightman (1801) 4 Esp 5; 170 ER 62 …. [20.24] Doe d Murrell v Milward (1838) 3 M & W 328; 150 ER 1170 …. [16.15] Doe d Nash v Birch (1836) 1 M & W 402; 150 ER 490 …. [17.18] Doe d Nicholl v McKaeg (1830) 10 B & C 721; 109 ER 618 …. [2.19] Doe d Parsley v Day (1842) 2 QB 147 …. [1.16] Doe d Phillips v Rollings (1847) 136 ER 476 …. [17.21] Doe d Pitt v Hogg (1824) 4 Dow & Ry 224; 171 ER 1144 …. [26.8] Doe d Poole v Errington (1834) 1 Ad & El 750; 110 ER 1394 …. [5.15] Doe d Rhodes v Robinson (1837) 3 Bing NC 677 …. [20.9] Doe d Simpson v Hall (1843) 5 Man & G 795; 134 ER 781 …. [20.27] Doe d Solomon v Purves (1846) 1 RJ 38 …. [15.20] — v — (1847) 2 RJ 1 …. [16.19] Doe d Staughton v Jennings (1856) 1 VLT 182 …. [17.2], [17.8], [17.9], [22.4] Doe d Thomson v Amey (1840) 12 Ad & E 476 …. [2.8] Doe d Warner v Browne (1807) 8 East 165; 103 ER 305 …. [1.5] Doe d Worcester Trustees v Rowlands (1841) 9 C & P 734; 173 ER 1030 …. [10.9] Doe d Wright v Smith (1838) 112 ER 835 …. [1.14] Doe v McKaeg (1830) 10 B and C 721; 109 ER 61 …. [16.36]

— v Miller (1826) 1 M & W 402 …. [17.18] — v Spiller (1806) 6 Esp 70; 170 ER 833 …. [20.24] — v Walker (1826) 5 B & C 111 …. [1.16] Dog Depot Pty Ltd v Ovidio Carrideo Nominees Pty Ltd (VCAT, Member Aird, 17 December 2003, unreported) …. [23.40] Dogan v Morton (1935) 35 SR (NSW) 142 …. [18.6], [18.9] Doherty v Traveland Pty Ltd (1982) …. [12.13] Doig (decd), In the Will of [1916] VLR 698 …. 5.2 Dominion Taylor Wood Auctioneers Pty Ltd v Mandat (1997) …. [11.8] Domino’s Pizza Enterprises Ltd v Seldex Pty Ltd [2009] QSC 137 …. [14.6] Donald v Ah Lo (1907) 9 GLR 455 …. [13.15] Donellan v Read (1832) 3 B & Ad 899; 110 ER 330; [1824–34] All ER Rep 639 …. [16.19] Douglas v Smith [1907] 2 KB 568; [1904-7] All ER Rep Ext 1166 …. [3.4] Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225 …. [17.12], [17.21] Douglas-Scott v Scorgie [1984] 1 WLR 716 …. [10.10] Dovastand Pty Ltd v Mardasa Nominees Pty Ltd [1991] 2 VR 285 …. [6.9] Dover v Prosser [1904] 1 KB 84 …. [3.9] Dowell v Dew [1842] 1 Y & C Ch Cas 345; [1843–60] All ER Rep 1084 …. [4.6] Downer Enterprises Ltd, Re [1974] 1 WLR 1460 …. [5.9] Downie v Lockwood [1965] VR 257 …. [4.8], [6.5], [6.8], [7.2], [7.4] — v Taylor [1954] VLR 603 …. [3.4], [7.14] — v Turner [1951] 2 KB 112; 1 All ER 416 …. [17.18] Downward Bricklaying Pty Ltd v Goulburn-Murray Rural Water Authority (2003) 8 VR 61 …. [14.3] Dowse v Wynyard Holdings Ltd [1962] NSWR 252 …. [8.4], [10.1], [13.15] Drane v Evangelou [1978] 2 All ER 437; [1978] 1 WLR 455 …. [8.4], [13.15]

Dresden Estates Ltd v Collinson [1987] 1 EGLR 45 …. [3.2] Driscoll v Church Commissioners for England [1957] 1 QB 330; [1956] 3 All ER 802 …. [17.13] DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 …. [16.34], [16.35] Dubowski & Sons v Goldstein [1896] 1 QB 478 …. [6.4] Dudgeon v Chie (1953) 55 SR (NSW) 450 …. [3.1] — v — (1955) 92 CLR 342 …. [3.6] Dudley & District Benefit Building Society v Emerson [1949] 1 All ER 691; [1949] 1 Ch 707 …. [5.16] Duff v Blinco [2006] QCA 497 …. [4.3] Duggan, Re (1883) NZLR 2 144 …. [15.5], [17.20] Duggan v Little [1951] QWN 13 …. 20.26 — v Barnes [1923] VLR 27 …. [4.2] — v Little [1951] …. [20.26] Duke of Westminster v Guild [1985] QB 688; [1984] 3 All ER 144 …. [10.1], [10.6] — v Store Properties Ltd [1944] Ch 129 …. [11.1] — v Swinton [1948] 1 All ER 208; [1948] 1 KB 524 …. [10.13], [13.17], [19.5], [19.6] Dukeminster (Ebbgate House One) Ltd v Somerfield Property Co Ltd [1997] …. [11.8] Dumpor’s case (1603) 4 Co Rep 119 …. [17.18] Duncan Properties Pty Ltd v Hunter [1991] 1 Qd R 101 …. [14.1], [14.5], [14.9] Duncan’s Catering Pty Ltd v Bankstown City Council [2006] NSWADTAP 9 …. [24.2] Dunedin City Corporation v Searl [1916] NZLR 145 …. [18.9] Dunlop v Troy [1915] VLR 639 …. [10.7] Dunn Pty Ltd v Ericsson Pty Ltd [1979–80] ANZ ConvR 301 …. [10.5]

Dunn v Large (1783) 3 Doug 335; 99 ER 683 …. [17.17] Dunraven Securities Ltd v Holloway [1982] …. [18.7] Durant v Greiner (1990) 21 NSWLR 119 …. [24.2], [26.2], [27.2] Durkin v Commonwealth Savings Bank of Australia (unreported, Full Court of the Supreme Court of South Australia, 30 November 1990) …. [10.8] Duyvelshaff v Cathcart & Ritchie Ltd (1973) 47 ALJR 410 …. [10.1] DW & JA Edwards Pty Ltd v SHIH (1995) 7 BPR 14,405 …. [10.5] Dyet Investments v Moore (1972) 223 EG 945 …. [14.8] Dyke, Ex parte (1882) 22 Ch D 410 …. [17.9], [17.12] Dykes v Gerke [1963] NSWR 721; 79 WN (NSW) 432 …. [16.20] Dyson v Forster [1909] AC 98, [1908–10] All ER Rep 212 …. [15.20] ‘E’ v Australian Red Cross Society (1991) …. [12.13] E & W Hackett Ltd v Oliver [1953] SASR 19 …. [3.5] E S Schwab & Co Ltd v McCarthy (1975) 31 P & CR 196 …. [16.11] Eads v Williams (1854) 43 ER 671; [1843–60] All ER Rep 917 …. [11.20], [14.7] Eagle Star Nominees Ltd v Merril (1983) V ConvR ¶54-002; [1982] VR 557 …. [7.4] Earl Bathurst v Fine [1974] 2 All ER 1160; [1974] 1 WLR 905 …. [19.4] Earl Cadogan v Guiness [1936] Ch 515; [1936] 2 All ER 29 …. [1.10], [4.1] Earl of Pembroke and Montgomery v Warren [1896] 1 IR 76 …. [7.14] Earl of St Germains v Willan (1823) 2 B & C 216; 107 ER 363 …. [1.1] East v Clarke (1915) 33 OLR 624; 23 DLR 74 …. [11.1] East Coast Commissioner v Kells [1924] NZLR 76 …. [14.2] Eastaugh v Macpherson [1954] 1 WLR 1307 …. [20.21] Easterby v Sampson (1830) 6 Bing 644; 130 ER 1429 …. [15.20] Eastern Garden Pty Ltd v Sangster [2004] SASC 45 …. [12.9] Eastern Health v MIA Victoria Pty Ltd (2009) 22 VR 502 …. [14.1]

Eastern Telegraph Co v Dent [1899] 1 QB 835 …. [15.8] Eastgate v Equity Trustees Executors and Agency Co Ltd (1964) 110 CLR 275; [1964] ALR 1063 …. [5.15] Easts Van Villages Pty Ltd v Minister Administering the National Parks and Wildlife Act (2001) Aust Contract R ¶90-132; [2001] NSWSC 559 …. [1.15], [2.12] Easy Buy International Pty Ltd v Macquarie Goodman Property Services Pty Ltd [2006] NSWSC 148 …. [7.8] Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 …. [6.8] Eaton v Lyon (1798) 3 Ves 690; 30 ER 1223 …. [14.11] Eccles v Bryant [1948] Ch 93 …. [4.1] Ecclesiastical Commissioners for England v Treemer [1893] 1 Ch 166 …. [1.16] Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 91 ALJR 486 …. [6.4], [6.5] Eddadock Pty Ltd v Denning Properties Pty Ltd [2002] NSWSC 208 …. [15.13] Eddie Azzi Australia Pty Ltd v Citadin Pty Ltd [2001] …. [28.12] Edex International Holdings Pty Ltd v Marmalade Films Pty Ltd (2003) …. [11.3] Edge v Boileau (1885) 16 QBD 117 …. [7.4], [13.15] — v Strafford (1831) 1 C & J 391; 148 ER 1474 …. [4.3] Edler v Auerbach [1950] 1 KB 359 …. [6.7] Edmund Barton Chambers (Level 44) Cooperative Ltd v Mutual Life & Citizen’s Assurance Co Ltd (1985) 6 NSWLR 312 …. [14.3], [26.10] Edwards Aberayron Mutual Ship Insurance Society [1876] 1 QBD 563 …. [17.5] Edwards v Horrigan; Ex parte Horrigan [1923] St R Qd 8 …. [2.11] Egerton v Esplanade Hotels (London) Ltd [1947] 2 All ER 88 …. [18.7], [19.5] — v Jones [1939] 2 KB 702 …. [19.6]

Egmont v Smith (1877) 6 Ch D 469 …. [5.17] Elder v Gray (1891) 10 NZLR 107 …. [16.28], [20.3] Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193; ATPR (Digest) 46-030 …. [12.9] Elder’s Trustee Case (1941) 65 CLR 603 …. [16.30] Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25; [2014] HCA 7 …. [6.4], [6.5] Electricity Supply Nominees Ltd v IAF Group plc [1993] 1 WLR 1059 …. [7.4] Electricity Trust of South Australia v Krone (Australia) Technique Pty Ltd (1994) 123 ALR 202 …. [24.2], [25.2] — v Linterns Ltd [1950] SASR 133 …. [5.8] Elesanar Constructions Pty Ltd v Queensland [2007] ANZ ConvR 369 …. [14.2] Elford v FAI General Insurance Co Ltd [1994] 1 Qd R 258 …. [13.15] Elitestone Ltd v Morris [1998] ANZ ConvR 478; [1997] 2 All ER 513; [1997] 1 WLR 687 …. [10.5] Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995) 63 SASR 235 …. [14.10] Eller v Grovecrest Investments Ltd [1995] 1 WLR 1059 …. [7.4] Elliott v Boynton [1924] 1 Ch 236; [1923] All ER Rep 174 …. [17.10], [17.12], [17.17] Ellis v Rowbotham [1900] 1 QB 740; [1900–3] All ER Rep 299 …. [11.3], [16.22] Ellul v Oakes (1972) 3 SASR 377 …. [4.9] Elmcroft Developments v Tankersley-Sawyer [1984] 1 EGLR 47 …. [10.8] Elmdene Estates Pty Ltd v White [1960] AC 528 …. [24.5], [25.5], [26.4] Elmer v Minute Wit Enterprises Pty Ltd [2002] VCAT 1101 …. [23.40] Elmslie v Commissioner of Taxation (1993) 46 FCR 576 …. [4.1] Elrington v Judd [1964–65] NSWR 493; 81 WN (Pt 2) (NSW) 257 …. [7.13]

Elwes v Maw (1802) 3 East 38; [1775–1802] All ER Rep 320 …. [10.5] Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16 …. [11.1], [11.8], [11.20] Emery v Commonwealth of Australia [1963] VR 586 …. [20.33] Empire Theatres Ltd, Ex parte (1934) …. [16.17], [16.18] Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 …. [4.1] EMS Quarries Pty Ltd v Beaumont (2001) 10 BPR 18 …. [7.8] Encino Plaza Pty Ltd v Wilson International Pty Ltd (1988) V ConvR [¶54308] …. [4.1] English Scottish & Australian Bank Ltd v City National Bank [1933] St R Qd 81 …. [5.16] — v Phillips (1937) 57 CLR 302 …. [6.8], [16.9] Enhill Pty Ltd v Bonsoc Pty Ltd (No 2) [2007] VSCA 108 …. [16.17], [16.30] — v Bonsoc Pty Ltd [2003] VSC 333 …. [16.30] Enkelmann v Glissan (1982) NSW ConvR ¶55-084 …. [1.6] Ensabella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626; [2000] VSCA 73 …. [23.11], [23.40] Epic Feast v Mawson KLM Holdings (1998) 71 SASR 161 …. [14.1] Equitable Life Assurance Co of the United States, The v Bogie (1905) 3 CLR 878 …. [15.20] Equity & Law Life Assurance Society plc v Bodfield Ltd (1987) …. Equity Trustees Executors & Agency Co Ltd, Re [1932] VLR 137 …. [6.10] Equity Trustees Executors & Agency Co Ltd v Riddell [1954] …. [10.8] Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; 211 ALR 101; [2004] HCA 55 …. [6.6] Ergopax Pty Ltd v Meerkin and Appel (SC(Vic), Hedigan J, 12 December 1995, unreported) …. [1.4], [7.3], [8.4] Ergopex Pty Ltd v Meerkin & Apel (1996) V ConvR ¶54-550 …. [7.3] Erlington v Judd (1964) SR (NSW) 150 …. [27.7]

Errington v Errington and Woods [1952] 1 All ER 149; [1952] 1 KB 290 …. [1.4], [2.17] Escalus Properties Ltd v Robinson [1996] QB 231 …. [11.1], [18.3], [19.3], [19.4], [19.6] Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1 …. [26.2] Esso Australia Ltd v Air Ride Transportation Pty Ltd (unreported, Supreme Court of Victoria, 28 September 1988) …. [14.4] — v Australian Petroleum Agents’ and Distributors’ Association (unreported 5 October 1993) …. [6.5] Esso Petroleum Co Ltd v Anthony Gibbs Financial Services Ltd [1983] …. [11.6] — v Harper’s Garage (Stourport) Ltd [1968] AC 269 …. [7.8], [12.2] Essoldo (Bingo) Ltd’s Underlease, Re; Essoldo v Elcresta Ltd (1971) 23 P & CR 1 …. [11.1] Estates Gazette Ltd v Benjamin Restaurants Ltd [1994] 1 WLR 1528 …. [15.19] Esther Investments v Cherrywood Park (1986) WAR 279 …. [14.1] ET Petroleum Holdings Pty Ltd v Clarenden Pty Ltd (No 2) [2005] NSWSC 562 …. [23.58], [23.61] Ettelson v Caldwell [1946] VLR 262 …. [7.13] Eudunda Farmers’ Co-operative Society Ltd v Mattiske [1920] SALR 309 …. [14.3] Eureka Operations Pty Ltd v Viva Energy Australia Ltd [2015] …. [1.9] — v — [2016] …. [1.9] Evanel Pty Ltd v Stellar Mining NL [1982] 1 NSWLR 380 …. [14.6] Evans v Athedim (Vic) Pty Ltd (2000) V ConvR 54-613 …. [4.3], [4.6], [10.13] — v Barboutis [1957] VR 35 …. [16.3] — v Davis (1878) 10 Ch 747 …. [17.18] — v Robins (1863) 33 LJ Ex 68 …. [11.1] — v Wyatt (1880) 43 LT 176; 44 JP 767 …. [16.2], [17.18]

Ewart v Fryer (1902) 86 LT 676 …. [19.6] EWP Ltd v Moore [1992] QB 460 …. [1.5], [2.13] Exford Pines Pty Ltd v Vlado’s Pty Ltd (1996) V Conv R ¶54-453; [1992] 2 VR 449 …. [16.30], [23.46], [23.48] Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340 …. [17.18], [18.6], [18.7] Export Credits Guarantee Department v Universal Oil Products Co [1983] 1 WLR 399 …. [10.13] Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd [2006] NSWSC 804 …. [10.5] Eyre v Rea [1945] …. [10.13] — v — [1947] KB 567; 1 All ER 415 …. [10.13], [13.17] Ezekiel v Orakpo [1977] QB 260 …. [16.30], [17.11] F P Shine (Vic) v Gothic Lodge Pty Ltd [1993] V ConvR ¶54-472 …. [25.2] F Tritton Pty Ltd v Hunnicutt Pty Ltd SC(Qld), Dunn J, 23 December 1982, unreported …. [14.6] F&G Nominees Pty Ltd v Verdell Pty Ltd [2003] WASCA 290 …. [26.4] Fabian Amber Pty Ltd v Ben Liano (t/as St Elbright Motors) (VCAT (Deputy President Macnamara), 22 December 2003, unreported) …. [23.40] Factors (Sundries) Ltd v Miller [1952] 2 All ER 630 …. [19.6] FAI General Insurance Company Ltd v Parras (2002) 55 NSWLR 498; 11 BPR 20,475 …. [14.10] FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 …. [6.6], [7.16], [15.2] Fairweather v St Marylebone Property Co Ltd [1963] AC 510; [1962] 2 All ER 288 …. [16.3], [16.11], [16.14] Fallon Street Properties Pty Ltd v Steel & Stuff Pty Ltd [2006] ANZ ConvR 21; [2006] NSWCA 296 …. [10.1], [11.21] Family Housing Association v Jones [1990] 1 WLR 779 …. [1.4] Famous Makers Confectionery Pty Ltd v Sengos (1993) 6 BPR 13,222 ….

[10.5] Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] 230 CLR 89 …. [6.10] Fares v Bleakley [2005] NSWADT 230 …. [24.3] Farley Bay Pty Ltd v Thomas (1996) V ConvR ¶58-523 …. [23.18] Farmers & Merchants National Bank of Bridgeton v Boyman (1977) 382 A 2d 437; 99 ALR 3d 1093 …. [11.1] Farnell’s Settled Estates, Re (1886) 33 Ch D 599 …. [5.17] Farooqi v Mazzocchetti [1998] SASC 6619 …. [27.3] Farrance v Elkington (1811) 2 Camp 591; 170 ER 1262 …. [17.17] Farrington v Smith (1894) 20 VLR 90 …. [18.5] Fazzolari v Couchouron (2003) ConvR ¶58-572; [2003] VCAT 503 …. [23.41] Featherby v Read [2002] WASC 251 …. [5.9] Featherstone v Staples [1986] 1 WLR 861 …. [5.15] Federal Bank of Australia Ltd, Re (1895) 6 BC (NSW) 3 …. [5.9] Federal Commerce & Navigation Co Ltd v Molena Alpha Inc [1979] AC 757; [1978] 3 All ER 1066 …. [7.4], [16.35] Federal Commissioner of Taxation v G J Coles & Co Ltd (1974) 4 ALR 163 …. [15.1], [15.2] — v Williamson (1943) 67 CLR 561 …. [15.14], [23.36], [24.5], [25.5], [27.5] Federated etc Service Association v NSW Railway Traffic Employers Association (1906) 4 CLR 488 …. [24.2], [25.2] Fels v Knowles (1906) 27 NZLR 604 …. [5.17] Fenn d Matthews & Lewis v Smart (1810) 12 East 444 …. [17.9] Ferguson v Anon [1798] 2 Esp 590 …. [8.7] — v Hullock [1955] VLR 202 …. [15.17], [16.12], [16.13], [16.18] Fernandes v Lam [1999] ANZ ConvR 445 …. [23.55] Fernhill Railway Co v Mayor of Dunedin [1884] NZLR (SC) 86 …. [1.10] Field v Barkworth [1986] 1 WLR 137 …. [15.8]

Figgins Holdings Pty Ltd v SEAA Enterprises Pty Ltd (1999) …. [11.3] Finch v Gilvey (1889) 16 OAR 484 …. [11.1] — v Sayers [1976] 2 NSWLR 540 …. [6.10] — v Underwood [1876] 2 Ch D 310 …. [14.6] Finco v Masterton Licensing Trust [1956] NZLR 896 …. [10.10] Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] …. [11.9] Fink v McIntosh [1946] VLR 290 …. [1.8], [2.13], [2.19], [15.5], [20.3], [24.18], [26.8] Finley v Russell-Jones (1948) 49 SR (NSW) 96; 66 WN 32 …. [16.2], [17.18] Finney Isles and Co Ltd v Estate of Pelling [1950] St R Qd 128 …. [17.10], [18.4] Fire and All Risks Insurance Co Ltd v Concorde Personnel Management Services Pty Ltd (1987) NSW ConvR ¶55-330 …. [4.2] Firmway Pty Ltd v Bretain Pty Ltd [2007] VCAT 576 …. [23.61] First Property Growth Partnership v Royal & Sun Alliance Property Services Ltd [2003] …. [11.6], [11.8] Firth v Halloran (1926) 3 8 CLR 261 …. [1.2], [6.10], [16.27] Fisher v Oborn [1968] 3 NSWR 447 …. [7.16] Fisherman’s Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd [2006] QSC 104 …. [25.18] Fitzgerald v Button (1890) 16 VLR 561 …. [2.11] — v — (1891) 17 VLR 52 …. [2.11], [2.14], [20.3] — v Kellion Estates (1977) 2 BPR 9181 …. [10.5], [16.36] — v Masters (1956) 95 CLR 420 …. [6.4], [6.8], [11.8] Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd [2013] VSC 344 …. [23.8], [23.18] Flagstaff Investments Pty Ltd v Cross Street Investments Pty Ltd (1999) 9 BPR 17,067 …. [14.6] Fleeton v Fitzgerald [1998] 9 BPR 16,715 …. [16.3]

Fleetwood v Hull (1889) 23 QBD 35 …. [15.19] Fleming v Blythe (1906) 26 NZLR 500 …. [15.19] — v Hislop (1886) 11 App Cas 686 …. [7.14] Fletcher v Davies (1980) 257 EG 1149 …. [4.2] — v Nokes [1897] 1 Ch 271 …. [18.6] Flexman v Corbett [1930] 1 Ch 672; [1930] All ER Rep 420 …. [7.16], [9.2], [9.3] Flight v Bentley (1835) 7 Lim 149; 58 ER 793 …. [15.20] — v Glossopp (1835) 2 Bing NC 125; 132 ER 50 …. [15.19] Flora Investments Ltd v Samson Corporation Ltd [1999] ANZ ConvR 392 …. [10.9] Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001] All ER (D) 36; [2001] 2 EGLR 103 …. [10.7] Flureau v Thornhill (1776) 2 Wm Bl 1078; 96 ER 635; [1775-1802] All ER Rep 91 …. [1.13], [13.4] Foenander v Dabscheck [1954] VLR 38 …. [2.13], [20.32] Fong v Cilli (1968) 11 FLR 495 …. [7.4] Foran v Wight (1989) 168 CLR 385; 88 ALR 413 …. [1.15] Ford v Centenary Investments Pty Ltd [1957] VR 288 …. [7.4], [11.2], [11.3], [11.14], [18.4] — v Newton [1949] St R Qd 119 …. [6.9] — v Young (1882) …. [4.10] Forrest Chase Medical Services Pty Ltd v Toliver Pty Ltd [1998] ANZ ConvR 31 …. [14.9] Forrester v AIMS Corporation [2004] VSC 506 …. [23.64] Forslind v Bechely-Crundall (1922) SC (HL) 173 …. [16.33] Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972-73] ALR 1303 …. [1.5], [2.2], [14.9] Forte-Senes Hotels Pty Ltd v Austcorp No 473 Pty Ltd [2004] ANZ ConvR 243 …. [16.17]

Foster v Robinson [1951] 1 KB 149; [1950] 2 All ER 342 …. [16.17], [16.19] — v Wheeler (1888) 38 Ch D 130; [1886–90] All ER Rep Ext 1567 …. [4.2] Fowler v Begg (1953) 53 SR (NSW) 451 …. [3.8], [16.36] — v Fowler (1859) 4 De G & J 250; 45 ER 97 …. [6.8] Fox v Jolly [1916] 1 AC 1; [1914–15] All ER Rep Ext 1316 …. [18.4], [18.6] Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust (2004) 11 BPR 21,629 …. [6.8] Foxtel Management Pty Ltd (2005) 214 ALR 554 …. [12.10] FP Shine (Vic) Pty Ltd v Gothic Lodge Pty Ltd [1994] V ConvR ¶54-472; [1994] 1 VR 194 …. [23.18] Francis Longmore & Co Ltd v Stedman [1948] VLR 322; [1948] 1 ALR 126 …. [1.3], [1.12], [2.21], [3.5], [4.8], [11.1], [16.20] Francis v Cowlcliffe Ltd (1976) 33 P & CR 368; 239 EG 977 …. [10.13] — v Francis [1952] VLR 321 …. [4.5], [13.8] Frankland v Capstick 1959] 1 All ER 209; [1959] 1 WLR 204 …. [20.17], [20.23] Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 …. [6.5], [6.6] Fraser v Dummett (1948) 67 WN (NSW) 129 …. [7.14] — v Evans [1946] VLR 382 …. [13.4] — v Victorian Railways Commissioner (1908) 8 CLR 54 …. [10.1] Fraser & Pipestock Ltd v Gloucester City Council (1995) …. [11.7] Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [[1953] 2 QB 450 …. [6.8] Frederick Platts Co Ltd v Grigor [1950] 1 All ER 941 …. [7.14] Freeman v Hambrook [1947] VLR 70 …. [20.8], [20.9], [20.10] — v McManus [1958] VR 15 …. [5.12], [5.13] — v Wells [1909] VLR 361 …. [3.4] Freeth v Burr (1874) LR 9 CP 208 …. [16.35] Fremantle etc Association of Workers v Victor Motor Co Pty Ltd [1963]

WAR 201 …. [17.10], [19.2] French v Elliott [1960] 1 WLR 40 …. [17.17] Friary Holroyd and Healey’s Breweries Ltd v Singleton [1899] 1 Ch 86 …. [14.8] Friend v Brooker (2009) 239 CLR 129 …. [15.3] Friends Provident Life Office v British Railway Board [1996] 1 ALL ER 336 …. [15.18] Frieze v Unger [1960] VR 230 …. [3.4], [3.8], [5.15], [6.10] Fry v Metzelaar [1945] VLR 65 …. [2.6], [2.20] Fuller, Ex parte; Re Taylor (1945) 62 WN (NSW) 158 …. [20.9] Fuller’s Theatre & Vaudeville Co v Rofe [1923] AC 435 …. [1.10], [15.2], [15.8] Furness v Sharples (1950) 68 WN (NSW) 18 …. [16.20] Fush v McKendrick & Co Pty Ltd (2004) V ConvR ¶54-686 …. [1.15], [4.1] FW Woolworth plc v Charlwood Alliance Properties Ltd [1987] 1 EGLR 53 …. [7.8] G & A Lanteri Nominees Pty Ltd v Fishers Stores Consolidated Pty Ltd [2005] VSCA 4; [2005] 1 EGLR 53 …. [7.8], [13.4], [13.13], [16.30] G & K Ladenbau (UK) Ltd v Crawley & de Reya [1978] 1 WLR 266 …. [7.3] G & L Panels Pty Ltd v Gargano [2009] VCAT 1704 …. [23.14] G and E Avakoumides Pty Ltd v Commonwealth Funds Management [2004] NSWSC 711 …. [4.1], [4.4] G H Renton & Co Ltd v Palmyra Trading Corporation of Panama [1956] 1 QB 462 …. [6.5] G J Coles Co Ltd v Federal Commissioner of Taxation (1975) …. [15.2], [15.19] G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) …. [11.6] Gaetjens v Arndale (Kilkenny) Pty Ltd [1969] SASR 470; (1969) 20 LGRA

21 …. [13.11], [23.47] Gair v Smith [1964] VR 814 …. [17.17], [18.6] Galambos v McIntyre (1974) 5 ACTR 10 …. [7.4] Galaxy Catering Pty Ltd v Trust Company of Australia Ltd [2006] NSWADT 182 …. [24.20] Galaxy Motors Pty Ltd v Carroll [1964–5] NSWR 463; 82 WN (Pt 1) (NSW) 40 …. [15.16], [16.18] Gallic Pty Ltd v Cynayne Pty Ltd (1986) 83 FLR 31 …. [17.6], [19.1] Gamvrogiannis v Blackshaw (2000) NSW ConvR ¶55-940 …. [4.1] — v — [2002] NSWCA 6 …. [4.1] Gange v Lockwood (1860) 2 F & F 115; 175 ER 984 …. [10.8] Garbutt v Naughton (1866) …. [14.5] — v — (1874) 5 AJR 70 …. [14.5] Gardner & Co Ltd v Cone [1928] Ch 955; [1928] All ER Rep 458 …. [7.8], [15.15] Gardner v Blaxill [1960] 1 WLR 752 …. [14.8] — v Coutts & Co [1968] WLR 173 …. [14.4] Garson v Scottish Widows’ Fund and Life Assurance Society [1998] 3 ALL ER 596 …. [20.20] Gaslight & Coke Co v Towse (1887) 35 Ch D 519; [1886–90] All ER Rep Ext 1771 …. [5.19], [13.4] Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 …. [13.15] — v Jacobs Ltd [1920] 1 Ch 567 …. [18.4] Gaw v Coras Iompair Eireann [1953] IR 232 …. [15.20] Gaze v London Drapery Stores (1900) 44 Sol Jo 722 …. [19.5] GDH Pty Ltd v Wayne [2001] …. [11.6], [11.9] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 …. [16.30] Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd

(1995) Aust Contract Reports ¶90-059 …. [4.1] Geita Sebea v Territory of Papua (1941) 67 CLR 549 …. [10.5] Gemmell v Coldsworth [1942] SASR 55 …. [10.10] General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 …. [12.9] Gentle v Faulkner [1900] 2 QB 267 …. [7.12], [15.16] George Fischer v Multi Design (1998) 61 Con LR 85 …. [10.8] George MacGregor Auto Service Pty Ltd v Caltex Oil (Australia) Pty Ltd (1980) 51 FLR 458 …. [12.9] George v Cluning (1979) …. [11.3] — v Hille [1946] VLR 427 …. [20.30] — v Roach (1942) 67 CLR 253 …. [14.7] Gerard Estates Pty Ltd v McGregor [1967] 2 NSWR 292; (1967) 86 WN (Pt 1) (NSW) 156 …. [1.14] Germax Securities Ltd v Spiegal (1979) 123 Sol Jo 164; (1978) 37 P & CR 204; (1978) 250 EG 449 …. [14.8] Gerraty v McGavin (1914) 18 CLR 152; [1914] HCA 23 …. [1.6], [10.10], [13.13], [14.1], [14.5], [18.6] Gibb Australia Pty Ltd v Cremor Pty Ltd (1992) 108 FLR 129 …. [7.4], [11.3] Gibbons v Wright (1954) 91 CLR 423; [1954] ALR 383 …. [5.3], [5.4] Gibbs & Houlder Bros & Co Ltd’s Lease, Re [1925] Ch 198 …. [15.13] Gibson v Hammersmith and City Pty Co (1863) 2 Drew & Sm 603; 62 ER 748 …. [10.5] — v Norfolk County Council [1941] 1 KB 191 …. [26.10] Gigi Entertainment Pty Ltd v Schmidt [2012] NSWSC 1423 …. [15.19] Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) SR (NSW) 122; (1957) 76 WN (NSW) 72 …. [14.1], [14.5], [14.6], [14.8], [14.9] — v — (1959) 59 SR (NSW) 122 …. [14.1], [14.5], [14.6], [14.9] — v — [1978] …. [14.1]

Gilbert v Beattie [1921] GLR 58 …. [15.2] — v Shanahan [1998] NZLR 528 …. [7.3] Gilbey v Cossey (1912) 106 LT 607; [1911–13] All ER Rep 644 …. [4.6] Giles and McConachy’s Lease, Re [1953] VLR 273 …. [15.6], [15.9], [15.10] Giles v Hooper (1690) Carth 135; 90 ER 683 …. [7.1] Gill v Lewis [1956] 2 QB 1 …. [17.19], [19.1], [19.2] Gillard v Lifoon Pty Ltd [2005] NSWSC 687 …. [14.8] Gillett v Burke [1997] 1 VR 81 …. [23.36] Gillion v Casserly (2005) Q ConvR 54-626 …. [15.5] Gilshenan v Hancox; Ex parte Hancox [1958] Qd R 111 …. [20.7], [20.8] Gimtak Pty Ltd v Cathie [2001] VSC 88 …. [10.13] Giuffre v City of Geelong (1992) V ConvR ¶54-438 …. [19.2], [19.4] Giumelli v Giumelli (1999) 196 CLR 101 …. [1.15] Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 …. [12.10] — v Pryor (1980) …. [12.12] Glass v Kencakes Ltd [1966] 1 QB 611; [1964] 3 All ER 807 …. [18.7], [18.8] — v —; Bickerton’s Aerodromes Ltd v Young (1958) 108 L Jo 218 …. [18.7] — v —; Borthwick-Norton v Romney Warwick Estates Ltd [1950] 1 All ER 798 …. [18.7] — v —; Egerton v Esplanade Hotels London Ltd [1947] 2 All ER 88 …. [18.7] GJ Coles & Co Ltd v Federal Commissioner of Taxation (1975) 132 CLR 242; 6 ALR 83 …. [15.1], [15.2], [15.19] Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456 …. [8.4], [8.5], [13.15] Glebe Administration Board v Perpetual Trustee Co Ltd [1962] NSWR 19; 79 WN (NSW) 335 …. [20.15] — v Tasker [1964] NSWR 1307 …. [18.4], [18.9] Glebe Island Terminals v Continental Seagram Pty Ltd (1993) 40 NSWLR 206 …. [16.36]

Gleeson v Richey [1959] VR 258 …. [2.7], [17.1], [17.14], [20.1], [20.2], [20.3], [20.18] Glenelg Backpackers Resort Pty Ltd v 1–3 Alexander Terrace Pty Ltd [2003] SASC 196 …. [27.18] Glentham Pty Ltd v Luxer Holdings Pty Ltd [2006] WASC 132 …. [16.26], [16.30] Glenwood Lumber Co v Phillips [1904] AC 405; [1904-7] All ER Rep 203 …. [1.3], [3.3] Global Halal Meat Exports Pty Ltd v Macri Investments Pty Ltd (SC(WA), 11 April 1996, unreported) …. [4.1] Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82;55 ALR 25; ASC 55-334; ATPR 40-463 …. [12.9], [24.3], [25.13], [26.3], [27.3], [28.3] Glossop v Ashley [1922] 1 KB 1 …. [26.10] GM & MY Campbell & Co Pty Ltd v Cotton [1992] ANZ Conv R 610 …. [16.36] Gnych v Polish Club Ltd (2015) 255 CLR 414 …. [6.9] Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 97,488 …. [1.5], [1.6], [1.15] Goddard v Precians (1948) 66 WN (NSW) 166 …. [20.8] Godecke v Kirwan (1973) 129 CLR 629; 1 ALR 457 …. [14.3] Goldana Investments Pty Ltd v Amberdown Pty Ltd (2000) 10 BPR 18,001 …. [7.8] Goldberg v Kolt [1932] VLR 342 …. [20.8] Golden Harvest (Aust) Pty Ltd) v Paing Pty Ltd [2004] NSWCA 85 …. [24.3] Goldhar v Universal Sections & Mouldings Ltd (1963) 36 DLR (2d) 450 …. [11.17], [16.21] Goldman v Hargrave (1966) 115 CLR 458 …. [10.1] Goldmile Properties Ltd v Lechouritis [2003] 2 P & CR 1 …. [8.4] Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674 …. [14.1] Goldstein v Sanders [1915] 1 Ch 549 …. [12.3], [15.19] Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128

CLR 199; 3 ATR 546 …. [1.4], [1.5], [3.6], [24.2], [25.2], [26.2], [27.2], [28.2] Goldsworthy v Calvert [1953] QWN 11 …. [16.18] Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493 …. [8.1], [24.8], [25.7], [26.7], [27.6] — v — (1983) 153 CLR 455 …. [11.6], [11.20], [17.18] Gooderham and Worts Ltd v Canadian Broadcasting Corporation [1947] AC 66 …. [10.13] Goodwin, Ex parte [1971] 1 NSWLR 461 …. [17.18] Goodwin, Ex parte; Re Read [1971] …. [11.14] Gordon v Lidcombe Developments Pty Ltd [1966] 2 NSWR 9 …. [8.1], [8.4] — v Selico Co Ltd (1986) 18 HLR 219; [1986] 1 EGLR 71 …. [10.1] — v Trustees of the Roman Catholic Church of the Diocese of Lismore [2010] NSWADT 230 …. [24.5] Gorman v Pye (1951) 68 WN (NSW) 180 …. [16.18] Gorton v Gregory (1862) 3 B & S 90; 122 ER 35 …. [15.20] Gott v Gandy (1853) 2 E & B 845; 118 ER 984 …. [10.1] Gotze v Ylitalo [2005] ANZ ConvR 159; (2005) Q ConvR ¶54-646 …. [10.1], [10.8], [10.13] Gould v Vaggelas (1985) 157 CLR 215 …. [12.9] Gourlay v Somerset (1815) 19 Ves 429; 34 ER 576 …. [9.1] Gower Chapman v Morris (SC(NSW), Kearney J, 15 April 1987, unreported) …. [14.8] Gower v Postmaster-General (1877) 57 LT 527; 4 TLR 5 …. [15.19] GP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 …. [8.1] GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 …. [24.1], [24.20] GR Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) …. [11.4], [11.6]

GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1987) NSW ConvR ¶55-324 …. [4.1] Grace Rymer Investments Ltd v Waite [1958] Ch 314 …. [11.2] Graham v Markets Hotel Pty Ltd (1942) 43 SR(NSW) 98 …. [10.8] — v — (1943) 67 CLR 567 …. [10.8], [10.13] — v Moree Local Aboriginal Land Council [2004] NSWSC 1178 …. [1.5], [4.1] Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93 …. [3.8] Granada Theatres Ltd v Freehold Investments (Leytonstone) Ltd [1956] …. [15.19] — v — [1958] …. [10.7] — v — [1959] Ch 592; [1958] 2 All ER 551; [1958] 1 WLR 845 …. [10.6], [10.7], [10.8], [10.13], [15.19] Grangeside Properties Ltd v Collingwoods Securities Ltd [1964] 1 All ER 143; [1964] 1 WLR 139 …. [18.10], [19.6] Grant v Edmondson [1931] 1 Ch 1; [1930] All ER Rep 48 …. [15.20] — v Grant (1870) 5 CP 727 …. [6.6] Gration v C Gillan Investments Pty Ltd [2005] 2 Qd R 267 …. [10.6] Graves v Weld (1833) 5 B & Ad 105; 110 ER 731 …. [10.4] — v Graves [2007] EWCA Civ 660 …. [6.10] Gray v Bonsall [1904] 1 KB 601 …. [19.4], [19.6] — v Ellis [1925] St R Qd 209 …. [4.10] — v Owen [1910] 1 KB 622 …. [11.1] — v Taylor [1998] 1 WLR 1093b …. [1.3] Graystone Property Investments Ltd v Margulies [1984] 1 EGLR 27 …. [6.5] Great Western Railway Co v Smith (1876) 2 Ch D 235 …. [16.3], [17.16], [19.6] Greater London Council v Connolly [1970] 2 QB 100 …. [11.1] Greater Union Organisation Pty Ltd v Pappas (1968) 116 CLR 457; [1968]

ALR 137 …. [20.15] Greater Wollongong City Council v Barker [1964] NSWR 897; 81 WN (Pt 1) (NSW) 105 …. [17.12] Greco v Swinburne Ltd [1991] 1 VR 304 …. [1.1], [1.3], [1.5], [1.6], [2.1], [2.2], [2.19] Greek Macedonian Club Ltd v Pan Macedonian Greek Brotherhood NSW Ltd [2007] NSWSC 92 …. [19.4] Green v Bowes-Lyon [1960] 1 All ER 301; [1960] 1 WLR 176 …. [1.10], [4.1] — v Eales (1841) 2 QB 225 …. [10.13] — v Patten (1894) 15 ALT 254 …. [17.7], [17.14] — v Summers (1908) 14 ALR 218 …. [20.30] Greene v Church Commissioners [1974] Ch 467 …. [15.10] — v West Cheshire Railway Co (1871) LR 13 Eq 44 …. [10.13] Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49 …. [4.1], [4.8], [19.1] Green’s case (1582) Cro Eliz 3; 78 ER 269 …. [17.18] Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 33 NSWLR 33 …. [7.8], [10.6], [10.7], [10.8], [10.13], [13.1] Gregg v Goodall (1896) 17 ALT 231 …. [17.10] Gregory v Mighell (1811) 18 Ves 328; 34 ER 341 …. [4.2] Grepo v Jam-Cal Bundaberg Pty Ltd [2015] QCA 131; [2015] Q ConvR 54829 …. [14.1], [14.6] Grescot v Green [1700] 1 Salk 199; 90 ER 996 …. [15.19] Gresham House Estate Co v Rossa Grande Mining Co [1870] WN 119 …. [20.28] Greville v Parker [1910] AC 335 …. [14.6], [19.2] Grey v Ellison (1856) 1 Giff 438; 65 ER 900 …. [1.2], [5.14] — v Friar (1854) 4 HL Cas 565; 10 ER 583 …. [14.6] Griffin v Dunn (1878) 4 VLR (L) 419 …. [2.19]

Griffiths v McDougall and Carroll (1894) 16 ALT 29 …. [17.7] — v Pelton [1958] Ch 205 …. [14.1] — v Reid (1951) 51 SR (NSW) 377 …. [18.4] Grimley v Permanent Trustee Co of NSW Ltd (1935) 35 SR (NSW) 384 …. [7.2] Grimwood v Moss (1872) LR 7 CP 360 …. [16.2], [17.9], [17.10], [17.18] Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190 …. [6.5] Grossop v Ashley [1922] 1 KB 1 …. [16.19] Grove v Portal [1902] 1 Ch 727 …. [7.12] Growthpoint Properties Australia Ltd v Australia Pacific Airports (Melbourne) Pty Ltd [2014] VSC 556 …. [6.4] Gruer, Ex parte (1891) 8 WN (NSW) 44 …. [3.9] Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 …. [1.15], [14.6] Grymes v Boweren (1830) 6 Bing 437 …. [10.5] GS Fashions Ltd v B & Q plc [1995] 1 WLR 1088 …. [17.12], [17.18] Gu v Gold Valley Investments Pty Ltd [2005] NSWADT 169 …. [24.14], [28.12] Guest v Watson (1891) 17 VLR 497 …. [4.5] Guilfoyle Pty Ltd v National Mutual Life Association of Australasia (2000) V ConvR ¶54-622 …. [4.1], [4.7], [6.2] Guillemard v Silverthorne (1908) 99 LT 584 …. [18.6] Gunn v National Coal Board 1982 SLT 526 …. [8.6] Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547 …. [18.3], [18.5], [18.7], [19.4] Guss v Ajax Technology Centre Pty Ltd (2000) V ConvR ¶54-612 …. [2.4] Gwyn v Neath Canal Navigation Co (1868) LR 3 Ex 209 …. [6.4] H L Bolton (Engineering) Co Ltd v T J Braham & Sons Ltd [1957] 1 QB 159;

[1956] 3 All ER 624 …. [5.8] HA Warner Pty Ltd v Williams (1974) 73 CLR 421 …. [3.5] Hace Corporation Pty Ltd v F Hannan (Properties) Pty Ltd (1995) BPR 14,326 …. [18.6], [19.2], [19.4] Haddin v Le Feuvre [1969] 2 NSWR 32 …. [24.19], [25.15], [27.17] Haddrick v Lloyd [1945] SASR 40 …. [16.18] Hadjiloucas v Crean [1988] 1 WLR 1006 …. [3.4] Hagee Ltd v A B Erikson & Larson (A Firm) [1976] QB 209 …. [2.16] Haidar v Blendale Pty Ltd [1993] 2 VR 524 …. [1.2], [15.1] Haines v Welch (1868) LR 4 CP 91 …. [10.4] Hall v Busst (1961) 104 CLR 206; [1961] ALR 508 …. [4.2] — v City of London Brewery Co Ltd (1862) 2 B & S 737; 121 ER 1245 …. [8.4] — v Eve (1876) 4 Ch D 341 …. [13.8] — v Joyworth [1993] V ConvR ¶54-461 …. [25.2] — v Lund (1863) 1 H & C 676 …. [6.5] — v National Mutual Life Nominees Ltd [1999] ANZ ConvR 301 …. [7.16] Hallett v Martin (1883) 24 Ch D 624 …. [5.19] Hallisey v Petmore Developments Ltd [2000]] All ER (D) 1632; [2000] EGCS 124 …. [10.8] Halloran v Firth (1926) 26 SR (NSW) 183 …. [1.2] Halsey v Lowenfield [1916] 2 KB 707 …. [5.2] — v Milton Keynes General NHS Trust [2004] 4 All ER 920 …. [23.58], [23.61] Hamerton v Stead (1824) 3 Barn & Cress 478; 107 ER 811 …. [16.21] Hamey v Nelson [1878] …. [14.3] Hamfray Carpets Australia Pty Ltd v Hycraft Carpets Pty Ltd (1996) ACLC 555 …. [6.6] Hamilton Island Enterprises Ltd v Croycom Pty Ltd [1998] ANZ ConvR 615; (1998) Q ConvR ¶54-509 …. [1.4], [3.3]

Hamilton v Chapman [1902] QWN 86 …. [3.9] — v Clanricarde (1762) 1 Brown 341; 1 ER 608 …. [5.13] — v Dawson (1899) 5 ALR 266 …. [17.10] — v Martell Securities Ltd [1984] Ch 266 …. [10.13] — v Porta [1958] VR 247 …. [2.4], [2.9], [2.12], [15.9] — v Warne (1907) 4 CLR 1293 …. [17.2] Hamilton-Smith v CFS Managed Property Ltd [2005] SASC 461 …. [12.9], [27.3] Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478; [1992] 1 All ER 1 …. [2.1], [5.15], [5.18], [14.8], [20.8] — v Top Shop Centres Ltd [1990] Ch 237 …. [1.15], [19.4], [19.6] Hammerton v Stead (1824) 3 B & C 478; 107 ER 811 …. [2.16] Hammond v Bishop (1933) …. [11.28] — v Farrow [1904] 2 KB 332 …. [1.6] Hampshire v Wickens (1878) 7 Ch D 555 …. [7.16], [9.2], [9.3], [17.8] Hampson v Clyne (1967) 86 WN (NSW) 321 …. [10.8] Hanak v Green (1958) …. [7.4] Hanau v Ehrlich [1912] AC 39 …. [1.6] Hand v Hall (1877) 2 Ex D 355 …. [1.6], [14.1] Haniotis v Dimitriou [1983] 1 VR 498 …. [16.36], [21.2] Hankey v Clavering [1942] 2 KB 326; 2 All ER 311 …. [20.17], [20.20] Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd [2008] FCA 1591 …. [12.9] Hanson v Newman [1934] Ch 298 …. [10.13] Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR ¶58-546 …. [23.12], [23.13], [23.57] Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375 …. [24.6], [24.18] Hardwick v Johnson [1978] 1 WLR 683 …. [3.6] Hare v Burges (1857) 4 K & J 45; 70 ER 19; [1843–60] All ER Rep 650 ….

[14.2] Harlon Pty Ltd (in liq), Re [1950] VLR 499 …. [14.3] Harlow v Mitchell [1970] QWN 68 …. [13.8] Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200 …. [8.5] Harmond Properties Ltd v Gajdzis [1968] 3 All ER 263; [1968] 1 WLR 1858 …. [20.9], [20.17], [20.23], [20.24] Harper v Fairbrother [1951] ALR 951 …. [3.4] Harries v Bryant (1827) 4 Russ 89; 38 ER 738 …. [14.11] Harris v Carnegie’s Pty Ltd [1917] VLR 95 …. [16.34] — v Jones (1832) 1 M & Rob 173; 174 ER 59 …. [10.8] — v Thallon (1926) 26 SR (NSW) 456 …. [18.6], [18.9] Harrison v Inala Plaza Pty Ltd (2003) Q ConvR ¶54-580 …. [7.8] — v Petkovic [1975] …. [7.4], [11.3] Harrod v Palvaris Construction Pty Ltd (1973) 8 SASR 54 …. [6.5] Harrow LBC v Johnstone [1997] 1 WLR 459 …. [5.15] Hart v Emelkirk Ltd [1983] 1 WLR 1289 …. [10.13] — v Hart (1881) 18 Ch D 670 …. [6.5] — v Huna [1999] VCAT 626 …. [23.61] — v Rogers [1916] 1 KB 646 …. [7.4] — v Windsor [1843] 12 M & W 68; [1843-60] All ER Rep 681 …. [6.7], [8.4], [10.1] — v Windsor (1844) 12 M & W 68; 152 ER 1114 …. [8.4], [10.1] Hartley v Larkin (1950) 66 TLR 896 …. [18.7] Hartshorne v Watson (1838) 132 ER 756 …. [17.16] Harty v Kolman [1977] 1 NSWLR 674 …. [20.5], [20.7], [23.15] Harvey v Pratt [1965] 1 WLR 1025 …. [4.2], [4.8] — v — [1965] 2 All ER 786 …. [4.8] — v Walker (1945) 46 SR (NSW) 180 …. [15.8] Haselhurst v Elliot [1945] VLR 153 …. [1.6], [4.3]

Haskell v Marlow [1928] 2 KB 45 …. [10.8], [10.11] Havane Pty Ltd v LFOT Pty Ltd [1998] 1051 FCA 31 …. [12.9] Havelberg v Brown [1905] SALR 1 …. [10.1] Hawke v McGrath (1900) 10 QLJ 83 …. [14.6] Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185 …. [8.4], [13.15] Hawkett v Tailgate Taxi Trucks Pty Ltd (1990) V ConvR ¶54-400 …. [16.28], [16.34] Hawtrey v Beaufront Ltd [1946] KB 280; 1 All ER 296 …. [20.12] Hay v Swedish & Norwegian Railway Co Ltd (1892) 8 TLR 775 …. [5.10] Hayes v Gumbola (1986) 4 BPR 9247 …. [19.2], [19.4] — v — (1986) 4 BPR 97263 …. [19.2] — v — (1988) NSW ConvR ¶55-375 …. [19.4] — v Seymour-Johns (1981) 2 BPR 9366 …. [1.3], [1.4], [1.12] Haynes v Doman [1899] 2 Ch 13 …. [6.4] Hazelmere Estates Ltd v British Olivetti Ltd (nreported, High Court of Justice, UK, Deputy Judge David McNeil QC, No 1976/H1232, 1 June 1977) …. [15.18] Head v Zimmerman Investments Pty Ltd [2010] WASAT 75 …. [26.10] Healing Research Trustee Co Ltd, Re [1992] 2 All ER 481 …. [15.18], [15.21] Health Partners Incorporated v Gonos (1996) 67 SASR 338 …. [14.6] Healy v Southern Milk Transport Pty Ltd [1954] VLR 448 …. [4.4], [4.8], [13.2], [14.5], [14.6] Heaps v Addison Wesley Longman Australia Pty Ltd [1999] …. [11.20] Heath v McGrath [1951] VLR 496 …. [20.10] Hedin v McIntyre [2005] VCAT 227 …. [23.65] Heidke v Sydney City Council (1952) 52 SR (NSW) 143 …. [3.8] Heilbut Symons & Co v Buckleton [1913] AC 30; [1911–13] All ER Rep 83 …. [6.11]

Heimann v Commonwealth (1938) 38 SR (NSW) 691 …. [8.1] Helman v Horsham & Worthing Assessment Committee [1949] 2 KB 335 …. [3.4] Hely v Sterling [1982] VR 246 …. [11.5], [14.3] Hemmings v Stoke Poges Golf Club [1918–19] All ER Rep 1170; [1920] 1 KB 720 …. [21.2], [21.3] Hemmingway Realty Ltd v Master Wardens and Commonalty of Freemen of the Art or Mystery of Clothworkers of the City of London [2005] …. [11.5] Hempel v Robinson [1924] SASR 288 …. [14.3] Henare Tomonana v Ormond (1878) 3 NZ Jur (NS) SC 86 …. [5.15] Henderson v Harrison [1916] QWN 6; [1916] 10 QJPR 25 …. [10.8], [10.11] — v Squire (1869) LR 4 QB 170 …. [8.9] — v Thorn [1893] 2 QB 164 …. [10.13] — v Thorne (1895) 16 ALT 193 …. [13.8] Heng v Levison [2006] WASCA 67 …. [26.5] Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1989) 89 ALR 539 …. [12.9] Henning v Ramsay [1964] NSWLR 1165 …. [4.1] Henningsen v Nolan (2004) 88 SASR 214; [2004] SASC 105 …. [27.7], [27.16] Henry v Humphris [1956] VLR 371 …. [20.10] Herman v Gill (1921) 24 WALR 10 …. [16.8] Herriott v Crofton Holdings Ltd [1974] 2 NZLR 383 …. [6.6] Heslop v Burns [1974] 1 WLR 1241 …. [2.15], [3.5], [6.2] Hewitt v Rowlands (1924) 131 LT 757; [1924] All ER Rep 344 …. [10.7] Heyman v Darwins Ltd [1942] AC 356; [1942] 1 All ER 337 …. [16.26] Heysham Properties Pty Ltd v Action Motor Group [1997] ANZ ConvR 440 …. [4.1]

Heywood v Miles [1944] VLR 155 …. [20.9] HG v R (1999) 197 CLR 414 …. [10.13] Hick v Raymond and Reid [1893] AC 22 …. [18.7] Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) NSWLR 310 …. [6.6] Hi-Fi Sydney Pty Ltd (Admin Apptd), Re [2015] NSWSC 1312 …. [18.4], [19.2] Higgs v Scott (1849) 7 CB 63; 137 ER 26 …. [15.20] Highpoint Homemaker Centre (Vic) Pty Ltd v Sanstar Pty Ltd [1997] V ConvR ¶54-564 …. [6.4], [6.5], [11.5], [11.6], [11.9] Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710 …. [6.10], [11.17], [16.21], [16.28], [16.29] Hildebrand v Lewis [1941] 2 KB 135; [1941] 2 All ER 584 …. [11.3], [16.22] Hi-Lift Elevator Services v Temple (1994) 28 HLR 1; 70 P & CR 620 …. [10.7] Hill v Barclay (1810) 16 Ves Jun 402; 33 ER 1037 …. [10.13] — v — (1811) 18 Ves Jun 56; 34 ER 238 …. [19.1], [19.3] — v Fearis [1905] 1 Ch 466 …. [24.5], [25.5], [27.5] — v Harris [1965] 2 QB 601 …. [6.7], [7.8] — v Hill (1947) Ch 23 …. [14.1] — v Short (1910) SALR 141 …. [7.12], [15.16], [17.18], [18.6], [19.2] Hillas and Co Ltd v Arcos Ltd (1932) 147 LT 503 …. [4.2], [4.8] Hillier v Goodfellow (1988) V ConvR 54-310 …. [14.8] Hindcastle Ltd v Barbara Attenborough Associates Ltd [1996] 2 WLR 262 …. [28.15] — v — [1997] AC 70 …. [15.1], [15.18], [16.25] Hinds v Randell (1961) 177 EG 733; [1961] LMD 2536 …. [14.8] Hinton v Fawcett [1957] SASR 213 …. [16.2], [17.18] Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 …. [14.8]

Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497 …. [6.10] Hirlmont Pty Ltd v Dybka (1999) ANZ ConvR 405; (1998) Q ConvR ¶54517 …. [10.10], [11.3] Hirst v Horn (1840) 6 M & W 393; 151 ER 464 …. [17.17] Hitech Pathology Pty Ltd v Bankberg Pty Ltd (1999) V ConvR ¶58-536 …. [23.18] Hobson v Gorringe [1897] 1 Ch 182 …. [10.5], [16.36] Hodges v Lawrance (1854) 18 JP 347 …. [16.19] Hodgkinson v Crowe (1875) LR 10 Ch 622 …. [9.3], [11.15], [17.8] Hoffman v Fineberg [1949] Ch 245; [1948] 1 All ER 592 …. [18.7] Hogg v Brooks (1885) 15 QBD 256 …. [20.27], [20.29] Holden v Blaiklock [1974] 2 NSWLR 262; (1975) 49 ALJ 289 …. [17.1], [17.5], [18.1], [18.4] — v Nuttall [1945] VLR 171 …. [3.3] Holding and Management Ltd v Property Holding and Investment Trust plc [1989] 1 WLR 1313 …. [10.8] Holidaywise Koala Pty Ltd v Queenslodge Pty Ltd [1977] VR 164 …. [6.9], [11.18] Holland v Hodgson (1872) LR 7 CP 328 …. [10.5] — v Wiltshire (1954) 90 CLR 409 …. [16.31], [16.33] Holliday, Re [1922] 2 Ch 698 …. [15.4] Hollier v Australian Maritime safety Authority (1998) V ConvR ¶54-581 …. [1.15] Holme v Brunskill (1878) 3 QBD 495 …. [16.19] Holmes v North (1872) 2 VLR (L) 84 …. [3.9] Holt v Cox (1997) …. [11.20] Holwell Securities Ltd v Hughes [1973] 1 WLR 757 …. [14.10] — v — [1974] 1 WLR 155 …. [14.10] Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715; [2003] UKHL 12 …. [6.4]

Home Yardage (NSW) Pty Ltd v Telado Pty Ltd (FCA, Beaumont J, 8 April 1998, unreported) …. [10.10] Homfray Carpets Australia Pty Ltd & Hycraft Carpets Pty Ltd, Re (1996) 14 ACLC 555 …. [6.6] Honey Pool of Western Australia, Re (1988) 6 ACLC 208 …. [5.8] Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 …. [16.26] Honner v Ashton (1979) 1 BPR 9478 …. [16.30], [16.35] Hoogerdyk v Condon (1990) 2 NSWLR 171; 66 ALJ 49 …. [15.14], [23.36], [24.5], [25.5], [27.5] Hooker Industrial Developments Pty Ltd v Trustees of the Christian Brothers [1977] 2 NSWLR 109 …. [1.5] Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194; 10 BCL 199 …. [23.54] Hope v Bathurst City Council (1980) 54 ALJR 345 …. [25.5] — v Hope (1854) 4 De G M & G 328; 43 ER 534 …. [20.27] Horn v Beard [1912] 3 KB 181 …. [1.9] Horne v Horne; Re Stephenson’s Settled Estates (1906) 26 NZLR 1208; 6 SR (NSW) 420 …. [5.17] Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 …. [12.9] Horowitz Holdings Pty Ltd v Plastic Reclaimers (Australia) Pty Ltd (1982) 2 BPR 9492 …. [7.2], [13.17] Horsefall v Mather (1815) Holt NP 7 …. [8.7] Horsey Estate Limited v Steiger [1899] 2 QB 79; [1895–9] All ER Rep 515 …. [18.2], [18.6], [18.9] Horwich v Symond (1914) 110 LT 1016 …. [10.5] — v — (1915) 84 LJKB 1083 …. [10.5] Hoskins v Dillon (1950) 67 WN (NSW) 115 …. [15.19], [16.21] Hotel Terrigal Pty Ltd (in liq) v Latec Investments Ltd (No 2) [1969] 1 NSWR 676 …. [15.3]

Houlder Bros & Co Ltd v Gibbs [1925] Ch 575 …. [15.13] Hounslow (London Borough Council) v Twickenham Garden Developments Ltd [1970] 3 All ER 326; [1970] 1 Ch 233 …. [3.8] — v Pilling [1993] 1 WLR 1242 …. [5.15] — v — [1994] [1994] 1 All ER 432 …. [20.8] Housing Commission of NSW v Allen [1967] 1 NSWR 776; 86 WN (Pt 2) (NSW) 204 …. [17.12], [21.2] Howard v Fanshawe [1895] 2 Ch 581; [1895–9] All ER Rep 855 …. [16.29], [16.30], [17.19], [19.1], [19.2] Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 …. [4.1] Howey v Dolan [1915] VLR 297 …. [14.3] Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 …. [6.11] Hua Chiao Commercial Bank Ltd v Chiaphua Industries Ltd [1987] AC 99 …. [15.19], [15.20] Hudson Crushed Metals Pty Ltd v Henry [1985] 1 Qd R 202 …. [16.34] Hudson v Williams (1897) 39 LT 632 …. [10.9] Huggett v Miers [1908] 2 KB 278; [1908–10] All ER Rep 184 …. [8.1] Hughes v NLS Pty Ltd [1966] WAR 100 …. [11.17], [13.4], [16.11], [16.22], [16.30] — v Waite [1957] 1 WLR 713 …. [11.1], [15.15] Hughes, Ex parte; Re Dumbell (1802) 31 ER 1223 …. [5.17] Hulse, Re [1905] 1 Ch 406 …. [10.5] Humberstone v Dubois (1842) 10 M & W 765; 152 ER 681 …. [17.17] Humphreys v Green (1882) 10 QBD 148 …. [4.6] Hunt v Luck [1902] 1 Ch 428; [1900–03] All ER Rep 295 …. [4.8], [7.4], [14.5] Hunte v E Bottomley & Sons Ltd [2007] EWCA Civ 1168 …. [8.4] Hunter v Earl of Hopetoun (1865) 13 LT 130; 29 JP 727 …. [14.8], [14.11] Hunter’s Lease, Re [1942] Ch 124; 1 All ER 27 …. [15.20] Hunts Refuse Disposals Ltd v Norfolk Environmental Waste Services Ltd

[1997] 1 EGLR 16 …. [1.4] Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 …. [12.9] Hurd v Whaley [1918] 1 KB 448; [1918–19] All ER Rep 812 …. [18.6], [19.6] Hurley v McDonalds Australia Ltd [1999] …. [12.14] Hussain v Lancaster City Council [1999] 4 All ER 125 …. [7.14] Hussey v Domville [1903] 1 IR 265 …. [14.11] — v Horne-Payne (1879) 4 App Cas 311 …. [4.1] Hutchison v Ripeka te Peehi [1919] NZLR 373 …. [11.1] Hyams Wholesalers Pty Ltd v Western Australian Planning Commission [2010] WASC 48 …. [26.12] Hydarnes Steamship Co v Indemnity Mutual Marine Assurance Co [1895] 1 QB 500 …. [6.4] Hyde v Warden (1877) 3 Ex D 72 …. [20.16] Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313 …. [13.17] Hydra Pty Ltd v Holmes & Holmes [2002] SASC 14 …. [1.4] Hyman v Rose [1912] AC 623; [1911–13] All ER Rep 238 …. [19.4], [19.5] Hyundai Heavy Industries Co Ltd v Papadopoulos [1980] 1 WLR 1129 …. [16.32] I M Fairclough & Sons Ltd v Berliner [1930] 1 Ch 60 …. [19.2], [19.5] IBM Australia Ltd v MEPC Australia Ltd [1991] …. [11.8] Ibrahim v Dovecorn Reversions Ltd [2001] 2 EGLR 46; [2001] 30 EG 116 …. [10.8] ICI Alkali (Aust) Pty Ltd (in vol liq) v Federal Commissioner of Taxation [1977] VR 393; (1976) 6 ATR 271 …. [1.4], [3.3], [3.6] — v — (1978) 9 ATR 373 …. [3.3], [3.6] Ideal Film Renting Co Ltd v Nielsen [1921] 1 Ch 575 …. [15.8], [15.9]

Iggulden v May (1804) 9 Ves 325; 32 ER 628 …. [14.2] — v — (1806) 7 East 237 …. [7.2] IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178 …. [23.18] Impact Funds Management Pty Ltd v Roy Morgan Research Ltd [2016] VSC 221 …. [16.34], [19.2] Imperial Loan Co v Stone [1892] 1 QB 599; [1891–94] All ER Rep 412 …. [5.4] Imray v Oakshette [1897] 2 QB 218 …. [19.6] — v — [1910] …. [19.6] India Pty Ltd v Florlim Pty Ltd [2003] SASC 161 …. [16.35], [18.2] Indian Taj Pty Ltd (in liq) v Gilany [2005] ANZ ConvR 310 …. [16.12] Indian Taj v Gilany [2004] NSWSC 1249 …. [24.18] Indrisie v General Credits Ltd [1985] VR 251 …. [7.4] Industrial Services Pty Ltd v 52–64 Latrobe Street Pty Ltd [2007] VCAT 918 …. [23.40] Inglis v Buttery (1878) 3 App Cas 552 …. [6.5] Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 …. [1.2], [1.3], [4.1], [4.8], [5.14], [7.15] Inman v Stamp (1815) 1 Stark 12; 171 ER 386 …. [4.3] Insearch Ltd v Kin Hing Pty Ltd [2004] ANZ ConvR 111 …. [4.8] Integrated Computer Service Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 …. [4.1] Intercon Group Pty Ltd v Nakajima [2005] VCAT 918 …. [23.62] International Air Transport Association v Ansett Australia Holdings (IATA) (2008) 234 CLR 151 …. [6.4] International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 …. [10.8], [15.6], [15.11], [15.13], [15.14] Investanley Holdings Pty Ltd v South Eastern Qld Water Corporation [2004] QSC 201 …. [17.5]

Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; [1998] 1 All ER 98 …. [6.4], [11.8], [14.3] Inwards v Baker [1965] 2 QB 29 …. [1.15] IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470 …. [12.9] Iqbal v Thakrar [2004] 3 EGLR 21 …. [10.8] IRC v Muller & Co’s Margarine Ltd [1901] AC 217 …. [24.5], [25.5], [27.5] Irvine v Moran [1991] 1 EGLR 261 …. [10.8] — v Penwarden (1912) 32 NZLR 43 …. [9.1], [9.2] Irving Trust Co v Burke (1933) 65 F (2d) 730 …. [11.1] Isaac v Hotel de Paris Ltd [1960] 1 WLR 239 …. [1.4] Isaacs v Lord [1920] VLR 274 …. [10.5] Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & S 263 …. [7.8] Islam v South Sydney City Council (1998) 9 BPR 16,865 …. [19.2], [19.4] Ive’s (1597) 6 Co Rep 11a …. [16.21] Ivermee (Third Party) [1969] 1 NSWLR 193 …. [4.3] J & C Reid Pty Ltd v Abau Holdings Pty Ltd (1988) NSW ConvR ¶55-416 …. [16.26], [16.28], [16.31], [16.35] J & S Chan Pty Ltd v McKenzie (1994) ANZ ConvR 610 …. [16.30] J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd [1992] 2 Qd R 121 …. [15.6], [15.11], [15.13], [15.14] J C Berndt Pty Ltd v Walsh [1969] SASR 34 …. [13.15] J C Williamson Ltd v Lukey (1931) 45 CLR 282 …. [4.5], [4.9], [7.8], [10.13], [13.11] J F Hillam Pty Ltd v Mooney (1988) 48 SASR 381 …. [10.8] J J Savage & Sons Pty Ltd v Blakney (1971) 119 CLR 435; [1971] ALR 92 …. [6.11] — v Stewart’s Cash and Carry Stores (1942) 66 CLR 116 …. [16.30] J W Cafes Ltd v Brownlow Trust Ltd [1950] 1 All ER 894 …. [13.4]

Jackson v Simons [1923] 1 Ch 373; [1922] All ER Rep 583 …. [15.3] Jackson, Ex parte; Re Australasian Catholic Assurance Co Ltd (1941) 41 SR (NSW) 285 …. [1.14] Jacob v Down [1900] 2 Ch 156 …. [18.6] Jacob & Youngs Inc v Kent 230 NY 239; 129 NE 889 (1921) …. [10.13] Jacobs v Chaudhuri [1968] 2 QB 470; [1968] 2 All ER 124 …. [19.2], [19.5] — v Platt Nominees Pty Ltd [1990] VR 146 …. [14.1] Jacques Nominees Pty Ltd v Jam Factory No 1 Pty Ltd [2003] VCAT 176 …. [19.3] Jaeger v Mansions Consolidated Ltd (1903) 87 LT 690 …. [8.4] Jam Factory Pty Ltd v Sunny Paradise Pty Ltd [1989] VR 584 …. [19.2], [19.5] James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 …. [6.6] James v Hutton [1950] 1 KB 9 …. [10.13] — v Nesbitt (1954) 28 ALJ 482 …. [16.17] Janos v Chama Motors Pty Ltd [2011] NSWCA 238 …. [19.5] Jarre Pty Ltd v Vumbaca (No2) (1999) …. [11.21] Jarrott v Ackerley (1916) 85 LJ Ch 135 …. [5.13] Jasam (AMC) Pty Ltd v The Australis Marketing Corporation (Int) Pty Ltd (SC(Vic), Hayne J, 23 February 1995, unreported) …. [6.5] Javad v Aqil [1991] 1 WLR 1007 …. [1.15], [2.7], [2.8], [2.12], [2.16], [2.19] JB (Northbridge) Pty Ltd v St George Bank Ltd (2010) 15 BPR 28,933 …. [14.6] JDM Investments Pty Ltd v Todbern [2000] NSWSC 349 …. [15.13], [24.18] Jefferies v RC Dimock Ltd [1987] …. [11.8] Jelley v Buckman [1974] QB 488 …. [20.16] Jenkin R Lewis & Son Ltd v Kerman [1970] 1 All ER 833; [1970] 2 WLR 378 …. [16.19] — v — [1971] Ch 477; [1970] 3 All ER 414 …. [16.19]

Jenkins v Harbour View Courts Ltd [1966] NZLR 1 …. [5.8] — v Levinson (1929) 29 SR (NSW) 151 …. [8.1] — v Morris (1880) 14 Ch D 674 …. [5.4] — v Price [1907] 1 Ch 229; [1908] 1 Ch 10 …. [7.8], [15.15] Jenkinson v Young [2004] SADC 30 …. [27.3] Jennings Industries Ltd v Commonwealth of Australia (1983) 69 FLR 189 …. [18.6], [19.2] Jervis v Harris [1996] Ch 195 …. [10.13] Jeune v Queens Cross Properties Ltd [1974] Ch 97; [1973] 3 All ER 97 …. [10.13] Jigrose v Drummond (1994) ANZ Conv R 212 …. [16.36] JLW (NSW) Pty Ltd v Seabridge Australia Pty Ltd (1992) 107 ALR 291 …. [24.2] Joad Pty Ltd v Ospies Hotel Pty Ltd [1994] V ConvR ¶54-505 …. [25.2], [26.2] — v — [1995] 1 VR 198 …. [23.18] Joel v International Circus and Christmas Fair (1920) …. [1.12] — v Swaddle [1957] 1 WLR 1094 …. [10.8] John Betts & Sons Ltd v Price (1924) 40 TLR 589 …. [15.18], [15.20] Johnsey Estates Ltd v Lewis & Manley (Engineering) Ltd [1987] 2 EGLR 69 …. [15.21] Johnson v Agnew [1980] AC 367 …. [16.32] — v Billyard (1890) 11 NSWLR (L) 319 …. [11.1] — v Bones [1970] 1 NSWLR 28 …. [14.1], [14.8] — v Edgware Railway Co (1866) 55 ER 982 …. [6.5] — v Senes (1961) 78 WN (NSW) 861 …. [18.2], [18.4], [18.6], [18.7], [18.10] — v — [1961] NSWR 566 …. [18.4], [18.6], [18.7], [18.10] Johnston Fear & Kingham & Offset Printing Co Pty Ltd v Commonwealth (1943) 67 CLR 314 …. [13.8]

Johnston v Simeon [1884] NZLR 2 SC 216 …. [16.19], [16.21] Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463 …. [6.8] — v Hudlestone (1825) 4 B & C 922; 107 ER 1302 …. [17.17] — v Milling (1886) 16 QBD 460 …. [16.26], [16.30] Joint Coal Board v Noone Pty Ltd (1984) …. [11.5] Joint London Holdings Ltd v Mount Cook Land Ltd [2005] EWCA Civ 1171 …. [7.8] Jones d Griffiths v March (1791) 4 Term Rep 464; 100 ER 1121 …. [20.27] Jones v Bartlett (2000) 205 CLR 156 …. [10.6] — v Bridgman (1878) 39 LT 500; 43 JP 112 …. [16.19] — v Carter (1846) 15 M & W 718; 115 ER 1040 …. [11.3], [16.2], [16.30], [17.9], [17.10], [17.12], [17.18] — v Curling (1884) 13 QBD 262 …. [22.4] — v Daniel [1894] 2 Ch 332 …. [14.8] — v Edwards (1994) 3 Tas R 350 …. [16.18], [16.30], [16.34] — v Foley [1891] 1 QB 730 …. [20.30] — v Jones (1971) …. [11.20] — v Lavington [1903] 1 KB 235 …. [8.4], [26.12], [26.13] — v Mega Bargains Pty Ltd (VCAT, Deputy President Macnamara, 19 February 2007, unreported) …. [23.44], [23.45], [23.46] — v Sherwood Computer Services 121c (1992) …. [11.20] Jonns v Kim Seong Tan [1999] NSW SC 64 …. [14.4] Jopling v Jopling (1908) 8 CLR 33 …. [4.2] Joscelyne v Nissen [1970] 2 QB 86 …. [6.8] Joseph v Joseph [1967] Ch 78; [1966] 3 All ER 486 …. [5.14], [16.19] Josland v Mullaly Properties Pty Ltd (1993) …. [11.3] Jourdain v Wilson (1821) 4 B & A 266; 106 ER 935 …. [15.20] Jovanovski v Santana (2001) V ConvR ¶58-564 …. [23.40] Joyce v Realm Marine Insurance Co (1872) LR 7 QB 580 …. [6.5]

Joyner v Weeks [1891] 2 QB 31; [1891–4] All ER Rep Ext 1938 …. [1.10], [1.16], [10.13] JT Sydenham & Co Ltd v Enichem Elastomers Ltd [1989] 1 EGLR 257 …. [7.8] Julian v McMurray (1924) 24 SR (NSW) 402 …. [10.11] Juneau Pty Ltd v Kayford Pty Ltd (1991) ATPR ¶41-117 …. [12.9] Junghenn v Wood (1958) SR (NSW) 327 …. [11.1], [11.2] Justbake Pty Ltd v Otranto Nominees Pty Ltd (VCAT, Senior Member Davis, 22 October 2003, unreported) …. [23.41] — v — [2004] VCAT 1350 …. [23.41] Kabwand Pty Ltd v National Australia Bank Ltd (1989) ATPR ¶40-950 …. [4.8] Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 …. 12.14 Kalnenas v Kovacevich [1961] WAR 188 …. [4.5], [4.6] Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 873 …. [16.30] Kanda v Church Commissioners for England [1958] 1 QB 332; [1957] 2 All ER 815 …. [18.10] Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd (2002) …. [11.20] Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18, 235; [2000] NSWCA 313; [2001] ANZ ConvR 513; [2001] ANZ ConvR 577 …. [1.6], [4.8], [16.30] Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 …. [8.1], [8.2], [8.4], [24.8], [25.7], [26.7], [27.6] Karenlee Nominees Pty Ltd v Gollin and Co Ltd (1983) …. [11.20] Kassabian v Lagonicos (1993) NSW ConvR 55-690 …. [4.1] Kater v Kater (1960) 77 WN (NSW) 873 …. [2.17] — v — (1960) 104 CLR 497; [1961] ALR 418 …. [2.17] Kaufman v Michael (1892) 18 VLR 375 …. [4.7], [4.9] Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716 ….

[14.8] Kavir Pty Ltd v Dwyer [1973] Qd R 192 …. [6.8] Kay’s Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 …. [10.5] Kays Holdings Pty Ltd v Nassar [1967] 1 NSWR 335; 87 WN (Pt 2) (NSW) 189 …. [20.15], [20.17] Kazas & Associates Pty Ltd v Multiplex (Mountain Street) Pty Ltd (2002) 11 BPR 20,353 …. [6.7] Keech v Sandford (1726) Cas temp King 61; 25 ER 223; [1558–1774] All ER Rep 230 …. [5.17], [14.8] Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 …. [12.9], [23.39], [24.3], [25.13], [26.3], [27.3], [28.3] Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR (Digest) ¶46-048 …. [12.9] Keith Henry & Co Pty Ltd v Stewart Walker & Co Pty Ltd (1958) 100 CLR 342 …. [14.8] Keith v Twentieth Century Club (1904) 52 WR 554 …. [1.7] Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 …. [1.15], [2.15], [2.16] Kelmea Pty Ltd v State Rail Authority of NSW (1986 unreported) …. [11.6] Kemnal and Stills Contract, Re [1923] 1 Ch 293 …. [5.18] Kemp v Lumeah Investments Pty Ltd (1983) NSW ConvR ¶55-162 …. [18.4] — v Palmer (1899) 20 LR (NSW) Eq 129 …. [20.14] Kenilworth Industrial Sites Ltd v E C Little & Co Ltd [1975] …. [11.6] Kennedy v Miller (1867) 4 WW & a’B (L) 255 …. [20.30] — v Vercoe (1960) 105 CLR 521 …. [4.1] Kennewell v Dye [1949] Ch 517 …. [14.1] Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814 …. [8.4], [13.15], [26.12] Kent v Fittall [1906] 1 KB 60; [1904-7] All ER Rep Ext 1308 …. [3.4]

Keogh, Ex parte (1893) 9 WN (NSW) 207 …. [16.18] Kerr v Byde [1923] AC 16 …. [16.19] Kersey v Thomson [1947] NZLR 392 …. [10.6], [10.8] Ketsey’s case (1613) Cro Jac 320; 79 ER 274 …. 5.3 Kewley v Ball [1913] VLR 412 …. [1.6], [4.3], [4.10] Khatijabai Jiwa Hasham v Zenab D/O Chandu Nansi Widow and Executrix of Haji Gulam Hussein Harji [1960] AC 316; [1958] 3 All ER 719 …. [13.3] Khayat Investments Pty Ltd v Winston Holdings Pty Ltd (No 2) [2011] WASCA 196 …. [26.10] Khodr v Foo Quan Eng Holdings Pty Ltd (No 1) (2001) V ConvR ¶58-557 …. [23.12], [23.31], [23.36], [23.45], [23.57] — v Foo Quan Eng Holdings Pty Ltd (No 2) (2001) V ConvR ¶58-558 …. [23.12], [23.35] Khuu & Lee Pty Ltd v Corporation of the City of Adelaide (2011) 110 SASR 235 …. [27.7] Kiama Development Co Pty Ltd v Wilcox [1999] NSWSC 277 …. [18.2] Kickham v R (1882) 8 VLR (Eq) 1 …. [5.6] Kildrummy (Jersey) Ltd v Inland Revenue Commissioners [1990] STC 657 …. [1.2], [5.14] Kilkerrin investments Pty Ltd v Yiu Ying Mei Pty Ltd (2001) Q ConvR ¶54551 …. [6.5] Killick v Second Covent Garden Property Co [1973] 1 WLR 658 …. [15.14], [26.8] Kindful (Australia) Pty Ltd v Country Villa Holdings Pty Ltd [2006] NSWADT 224 …. [24.14] King v Bird [1909] 1 KB 837 …. [5.19] — v Earl Cadogan [1915] 3 KB 485 …. [24.5], [25.5], [26.4] — v Grimwood (1891) 17 VLR 253 …. [4.5] — v McIvor (1883) 4 LR (NSW) 43; 4 ALT 153 …. [1.10], [4.2]

King, Re [1907] 1 Ch 72 …. [5.18] King, Re [1963] 1 Ch 459; [1962] 2 All ER 66 …. [15.20] King (dec), Re [1963] Ch 459; [1963] 1 All ER 781 …. [10.1] King’s Motors (Oxford) Ltd v Lax [1970] 1 WLR 426 …. [11.8], [14.3] Kingsbury v Collins (1827) 130 ER 746 …. [10.4] Kingsley’s Chicken Pty Ltd v Queensland Investment Corp [2006] ACTCA 9 …. [4.1] — v — [2007] ACTSC 77 …. [28.9] Kinleyside v Irwin [1961] WAR 169 …. [2.17] Kinlyside v Thornton (1776) 2 Wm Bl 1111; 96 ER 657 …. [8.7] Kirby v Caruso [1976] Qd R 164 …. [10.4] Kirkwood Bros Ltd v O’Reilly [1947] NZLR 860 …. [10.10] Kirmani v Captain Cook Cruises Pty Ltd (1985) 59 ALJR 265 …. [10.1] — v — (No 2) (1985) 59 ALJR 480 …. [10.1] Kirsch v Auhl [1949] VLR 324 …. [1.9] Kirsner v Haan [1947] VLR 119 …. [20.10] Kisch v Hawes Bros Ltd [1935] Ch 102; [1934] All ER Rep 730 …. [5.19], [17.21] Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 …. [23.39], [23.40] KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 …. [1.3], [1.4], [3.3] KL Distributors Pty Ltd v Jacob [1949] Tas LR 123 …. [3.6] Kleinwort Benson Ltd v Lincoln City Council [1999] …. [11.3] Knight and Hubbard’s Underlease, Re [1923] 1 Ch 130 …. [15.2] Knight v Williams [1901] 1 Ch 256 …. [16.21] Knight’s Case (1588) 5 Co Rep 54b …. [1.12] Knockholt Pty Ltd v Graff [1975] Qd R 88 …. [7.4] Knowles’ Will Trusts, Re [1948] 1 All ER 866 …. [5.17] Kogarah Private Hospital Pty Ltd v Hoteliers (NSW) Pty Ltd (SC(NSW),

Brownie J, 28 October 1987, unreported) …. [11.1] Kohua Pty Ltd v Tai Ping Trading Pty Ltd (1985) 3 BPR 9705 …. [8.4] Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd (1992) 26 NSWLR 687 …. [16.17], [16.18], [16.21], [16.28] Koompahtoo Local Aboriginal Community v Sanpine (2007) 233 CLR 115 …. [18.2] Koumoudouros and Marathon Realty Co Ltd, Re (1978) 89 DLR (3d) 551 …. [7.14] KPMG LLP v Network Rail Infrastructure Limited [2007] EWCA Civ 363 …. [6.8] Kratzmann (Toowong) Pty Ltd v Marjorie’s Investments Pty Ltd (1986) 67 ANZ ConvR 803 …. [14.8] Kreitmayer v Kennedy (1878) 4 VLR (L) 215 …. [10.6] Krell v Henry [1903] 2 KB 740 …. [3.1], [6.10] Kudeweh v T & J Kelleher Builders Pty Ltd [1990] VR 701 …. [23.57] Kumar v Dunning [1987] 2 All ER 801, [1987] 3 WLR 1167 …. [15.20] — v — [1989] 1 QB 193 …. [15.19], [15.20] Kumaragamage v Rallis [2001] NSWSC 466 …. [19.4] Kurc v Eyecare Pty Ltd [2004] VCAT 1139 …. [23.41] Kurrle v Heide (1898) 20 ALT 171 …. [20.3] Kushner v Law Society [1952] 1 KB 264 …. [1.6] Kwik ‘N’ Kleen Pty Ltd v Sears Wainwright Superannuation Pty Ltd [2009] WASAT 148 …. [26.2] Kyriacou v Manakis [2006] NSWSC 804 …. [10.5], [19.5] L E Stewart Investments Pty Ltd v F C & M Legge Building Contractors & Developers (2003) 11 BPR 21,053 …. [4.1], [6.8] L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 …. [6.6] Lace v Chantler [1944] 1 All ER 305; [1944] KB 368 …. [1.5], [1.12], [2.2], [23.64]

Ladbroke Hotels Ltd v Sandhu & Singh [1995] 2 EGLR 92; (1995) 2 EGLR 92; 72 P & CR 498 …. [10.8] Ladies Sanctuary Pty Ltd v Parramatta Property Investment Ltd (1997) 7 BPR 15,156 …. [15.16], [19.2], [19.4] Ladies’ Hosiery & Underwear Ltd v Parker [1930] 1 Ch 304; [1929] All ER Rep 667 …. [2.11] Ladup Ltd v Williams & Glynn’s Bank plc [1985] 1 WLR 851 …. [19.1] Laffer v Gillen (1927) 40 CLR 86; [1927] AC 886 …. [17.20], [19.2] Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 97,476 …. [16.28], [16.34], [16.35] Laidlaw v Rehill (1943) …. [11.3] Lakin v Mylecharane (1957) 57 SR (NSW) 33 …. [4.2] Lam Kee Ying Sdn Bhd v Lam Shes Tong [1975] AC 247; [1974] 3 All ER 137 …. [19.4] Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 …. [12.9] Lamb Kee Ying Sdn Bhd v Lamb Shes Tong [1975] …. [15.3] Lambert v Cole [1950] QWN 47 …. [14.8] — v Norris (1837) 2 M & W 333; 150 ER 784 …. [15.19] Lamont v Heron (1971) 126 CLR 239 …. [14.8] Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd (1906) 4 CLR 672 …. [13.4], [16.30] Land at Liss, Re [1971] Ch 986 …. [2.2] Land Reclamation Co Ltd v Basildon District Council [1979] 1 WLR 767 …. [1.4] Land Securities plc v Westminster City Council [1993] …. [11.8] Land Settlement Association v Carr [1944] 2 All ER 126; [1944] 1 KB 657 …. [2.2], [2.13], [20.2] Land v Clyne (1968) 92 WN (NSW) 134 …. [1.9] Landale v Menzies (1909) 9 CLR 89; 16 ALR 217 …. [1.3], [1.12], [2.8], [2.9], [2.19], [4.8]

Landsmiths Pty Ltd v Hall (1999) 9 BPR 17,057 …. [4.1] Lane v Capellari (1950) 68 WN (NSW) 1 …. [15.2] — v Dixon (1847) 3 CB 776; 136 ER 311 …. [16.30] — v Newdigate (1804) 10 Ves Jun 192; 32 ER 818 …. [10.13] Lang v Asemo Pty Ltd [1989] VR 773 …. [7.16], [15.20] Langley v Foster (1909) 10 SR (NSW) 54 …. [19.2], [19.4], [19.5] Langmore v Vines [1917] VLR 595 …. [11.1] Lanteri Nominees v Fishers Stores [2005] VSC 336; (2005) V ConvR ¶54708 …. [13.4], [13.13] Lapham v Orange City Council (No 2) [1968] 2 NSWR 668 …. [1.4] Lapin v Abigail (1930) 44 CLR 166 …. [6.8] Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221; [1940] HCA 37 …. [13.12], [15.19], [17.18] Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] …. [1.6], [4.3], [4.5] Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 …. [1.15], [6.8] Latella v L J Hooker Ltd (1985) …. [12.12] Lathouras, Re Vendaros, Ex parte [1964–5] …. [11.2] Latif Al-Hakim v Monash University [1999] VSC 511 …. [23.61] Laundry Coin-Wash Leasing Nominees Pty Ltd v Karenlee Nominees Pty Ltd (2000) V ConvR ¶58-545 …. [23.43], [23.44], [23.47] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 …. [1.6], [16.28], [16.30], [16.33], [16.34] Lav Pty Ltd v Routledge [1998] ANZ ConvR 34 …. [10.8] Lavender v Betts [1942] 2 All ER 72 …. [8.4], [13.15] Lavery v Pursell (1888) 39 Ch D 508 …. [4.9] Law Life Assurance Society plc v Bodfield Ltd [1987] …. [11.8] Lawson v Hartley-Brown (1995) 71 P & CR 242 …. [8.5], [13.15] Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 …. [14.1], [14.8]

Laythoarp v Bryant (1836) 2 Bing (NC) 735; 132 ER 283 …. [4.4] Lazar v Williamson (1886) 7 LR (NSW) 98 …. [10.7], [10.8] Lazarus Estates Ltd v Beasley [1956] 1 QB 702; 1 All ER 341 …. [20.20], [20.24] Lear v Blizzard [1983] 3 All ER 662 …. [11.8], [14.7] Leask v Farlmist Pty Ltd [1999] ANZ ConvR 566 …. [1.6], [2.15], [2.16], [2.19] — v Molina [1999]] NSWCA 14 …. [15.5], [15.16], [15.17], [15.18] Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 …. [1.15], [16.11], [16.18], [16.28], [16.30], [16.34], [17.7], [18.6], [19.2] Lee v Blakeney (1887) 8 LK (NSW) 141 …. [17.17] — v Close (1870) 10 SCR (NSW) 86 …. [15.20] — v Ferno Holdings Pty Ltd (1993) 33 NSWLR 404 …. [14.5], [14.6], [14.8] — v K Carter Ltd [1949] 1 KB 85 …. [26.8] Leek & Moorlands Building Society v Clark [1952] 2 QB 188; [1952] 2 All ER 492 …. [5.15], [16.16] Lee-Parker v Izzet [1971] 1 WLR 1688 …. [7.4] Lee v Lee’s Air Farming Ltd [1961] AC 12 …. [15.3] Leeward Securities Ltd v Lilyheath Properties Ltd (1984) 271 EG 279 …. [15.13] Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P&CR 10 …. [8.1], [24.8], [25.7], [26.7], [27.6] Legal & General Life of Aust Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; NSW ConvR ¶55-237 …. [11.20], [23.40] Legal and General Assurance (Pension Management) Ltd v Cheshire County Council [1984] …. [11.6] LEGFIN Pty Ltd v Anthony [2015] VCAT 986 …. [23.30] Leggott v Barrett (1880) 15 ChD 306 …. [4.1] Legione v Hateley (1983) 152 CLR 406 …. [3.8], [4.8], [16.34], [19.1]

Lehrer v Gandali [1970] 1 NSWR 9; 91 WN (NSW) 891 …. [19.5] Leichhardt Municipal Council v Daniel Callaghan Pty Ltd (1983) 46 LGRA 29 …. [25.2] Leigh v Dickeson (1884) 15 QBD 60; [1881–85] All ER Rep 1099 …. [5.15] Leighton’s Investment Trust Ltd v Cricklewood Property and Investment Trust Ltd [1943] KB 493; [1943] 2 All ER 580 …. [1.2], [6.10], [16.28] Leitz Leeholme Stud Pty Ltd v Robinson (1977) 2 NSWLR 544 …. [2.14], [4.1] Lemmerbell Ltd v Britannia LAS Direct [1998] 3 ELGR 67 …. [20.9] Lemon v Lardeur [1946] KB 613; [1946] 2 All ER 329 …. [2.13], [20.5], [20.9] Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 …. [8.2], [8.3], [8.5], [13.15] Lend Lease Financial Planning Ltd v Southcap Pty Ltd (CA(Qld), 2 June 1998, unreported) …. [4.1], [4.2], [7.16] Lep Air Services v Rolloswin Ltd [1973] AC 331 …. [16.30] Lepla v Rogers [1893] 1 QB 31 …. [13.16] Leppard v Excess Insurance Co Ltd [1979] 1 WLR 512 …. [13.17] Leprina Appointments Pty Ltd v State Authorities Superannuation Board (1990) 5 BPR 97,332 …. [6.5] Leschallas v Woy [1908] 1 Ch 641 …. [10.5] Lester v Ridd [1990] 2 QB 430 …. [15.19] Leung v Hungry Jack’s Pty Ltd (2000) V Conv R ¶54-614 …. [23.21] Lever v Koffler [1901] 1 Ch 543 …. [4.8] Levitt v Illawarra Seafood Pty Ltd (No 2) [1983] 3 BPR 97165 …. [14.10] Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 …. [12.9] Lewis Construction (Engineering) Pty Ltd v Southern Electric Authority of Queensland (1976) 50 ALJR 769; 11 ALR 305 …. [6.4] Lewis v American and Colonial Distributors Ltd [1945] 1 Ch 225; 1 All ER 592 …. [12.3], [15.19]

— v Bell (1985) 1 NSWLR 731 …. [1.3], [1.4], [3.3], [3.4], [3.8], [16.2] — v Bentley [1977] 1 NSWLR 743 …. [14.6] — v Keene (1936) 36 SR (NSW) 493; 53 WN (NSW) 17 …. [16.9] — v Stephenson (1898) 78 LT 165; 67 LJQB 296 …. [14.3], [14.5] Lewy v Moss Nominees Pty Ltd [1997] …. [11.3] Lex Services PLC v Oriel House BV [1991] …. [11.9] Lezam Pty Ltd v Seabridge Australia Pty Ltd …. [24.2] LG Thorne & Co Pty Ltd v Thomas Borthwick & Sons (Australasia) Ltd (1956) 73 WN (NSW) 9; [1956] SR (NSW) 81 …. [6.4] Liangis Investments Pty Ltd v Dalypyn Pty Ltd (1994) 117 FLR 28; [1994] ANZ ConvR 637 …. [7.4], [11.3] — v Ipex Itg Pty Ltd [2004] ACTSC 8 …. [28.2] — v — [2005] ACTCA 2 …. [13.17] Liberty Investments Pty Ltd v Sakatik Pty Ltd (CA(NSW), 30 August 1996, unreported) …. [6.10] Liddle v Cunningham (1874) 5 AJR 120 …. [13.15] Liddy v Kennedy (1871) LR 5 HL 134 …. [17.7] Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84 …. [17.12], [17.18] Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 …. [6.6] Lin Creations Pty Ltd v Springvale Property Holdings Pty Ltd (2000) V ConvR ¶54-627; [2000] VSC 24 …. [23.36] Lin v State Rail Authority of NSW [2006] FCAFC 42 …. [24.2] Linfield Linen Pty Ltd v Nejain (1951) 68 WN (NSW) 163 …. [13.5] Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] …. [6.4] Liquidation Estates Purchase Co v Willoughby [1896] 1 Ch 726 …. [16.8] Lismore City Council v Green Gro Pty Ltd (2003) 56 NSWLR 204 …. [10.8] Lister v Lane and Nesham [1893] 2 QB 212; [1891–4] All ER Rep 388 …. [10.8] Liverpool Borough Bank v Turner (1860) 2 De GF and J 502 …. [6.9]

Liverpool City Council v Irwin [1976] QB 319 …. [8.1], [10.1] — v — [1977] AC 239; [1976] 2 All ER 39 …. [8.1], [10.1], [24.8], [25.7], [26.7], [27.6] Lloyd v Rosbee (1810) 2 Camp 453; 170 ER 1216 …. [17.17] Lo Giudice v Biviano (No 1) [1962] VR 412 …. [14.9], [14.10], [17.7], [17.14] — v Biviano (No 2) [1962] VR 420 …. [14.9], [14.10], [17.12], [17.18], [19.2], [19.4] Lobb v Vasey Housing Auxiliary (War Widows Guild) [1963] VR 239 …. [1.2], [6.10], [16.27] Lobendhan v West Perth Investments Pty Ltd [1998] FCA 1257 …. [12.12] Lock v Pearce [1893] 2 Ch 271 …. [18.7], [19.4] Lockhart v Yorkshire Guarantee and Securities Corp (1908) 9 WLR 182 …. [14.8] Loder v Tokoly (1952) SR (NSW) 283 …. [11.1], [11.2] Lofft v Dennis (1859) 1 E & E 474; 120 ER 987 …. [10.1] Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal [2006] QSC 172 …. [25.13] Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16; [1999] ANZ ConvR 360; (1998) NSW ConvR ¶55-861 …. [12.14], [13.6], [13.15], [14.8], [14.10] Lombard Tricity Finance Ltd v Paton (1989) 1 All ER 918 …. [4.8] London and Associated Investment Trust plc v Calow [1986] 2 EGLR 80 …. [3.2] London & County (A & D) Ltd v Greenwoods (Hosiers & Outfitters) Ltd [1969] 1 WLR 1215 …. [17.9], [17.10] — v Wilfred Sportsman Ltd [1971] Ch 764 …. [1.9], [1.10], [15.20], [16.11], [17.10], [17.17], [17.18] London & Manchester Assurance Co Ltd v G A Dunn & Co (1982) …. [11.6] London and North Western Railway Co v McMichael (1850) 5 Ex 114; 155 ER 374 …. [5.3]

London and Northern Estates Co v Schlesinger [1916] 1 KB 20, [1914–15] All ER Rep 593 …. [1.2], [3.2], [5.2], [6.10] London and Overseas Freighters Ltd v Timber Shipping Co SA [1972] AC 1 …. [6.5] London Bridge Buildings Co v Thomson (1903) 89 LT 50 …. [19.6] London Corporation v Mitford (1807) 14 Ves 41; 33 ER 43 …. [14.11] London County Council v Agricultural Food Products Ltd [1955] 2 QB 218; 2 All ER 229 …. [20.9] Lonergan v M’Arthur (1874) 5 AJR 172 …. [14.8] Long Leys Co Pty Ltd v Silkdale Pty Ltd (1991) 5 BPR 11,512 …. [14.8] Long v Fairbank (1947) 64 WN (NSW) 205 …. [20.30] — v Piper (2002) NSW ConvR ¶56-000 …. [4.1] — v Tower Hamlets London Borough Council [1998] Ch 197 …. [1.6], [4.3] Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42 …. [2.9], [16.2] Lonsdale & Thompson Ltd v Black Arrow Group plc [1993] Ch 361 …. [10.1] Lord Inchiquin v Lyons (1887) 20 LR Ir 474 …. [20.33] Lord v Procter [1923] ALR 350 …. [15.15] — v Still [1962] NSWR 363; 79 WN (NSW) 579 …. [16.18], [16.19] Loria v Hammer [1989] 2 EGLR 249 …. [10.6] Louinder v Leis (1982) 149 CLR 509; 41 ALR 187; NSW ConvR ¶55-065 …. [11.6], [16.33], [23.54] Louis Dreyfus & Cie v Parnaso Cie Naviera SA [1959] 1 QB 498 …. [6.5] Love v Bloomfield [1906] VLR 723 …. [10.5] — v Chryssoulis (1977) 16 ACTR 1 …. [11.3], [20.5], [20.9], [20.14] — v Gemma Nominees Pty Ltd (1983) ANZ ConvR 68 …. [19.5] — v Pears (1810) 104 ER 297 …. [7.2] Lovelock v Margo [1963] 2 QB 786; 2 All ER 13 …. [19.2] Lovett, Re [1966] VR 65 …. [5.17]

Low v Adams (1901) 2 Ch 598 …. [2.8] — v Bouverie [1891] 3 Ch 82 …. [2.16] Lowe v Ellbogen [1959] NZLR 1103 …. [10.13] — v Ross (1850) …. [11.28] Lowe & Sze Tu Holdings Pty Ltd v Cudal Nominees Pty Ltd (1991) ATPR (Digest) ¶46–074 …. [12.9] Lowenthal v Vanhoute [1947] KB 342 …. [20.30] Lower v Sorrell [1963] 1 QB 959; [1962] 3 All ER 1074 …. [20.30], [20.33] Luchio Nominees Pty Ltd v Epping Fresh Food Market Pty Ltd [2016] VCAT 937 …. [23.59] Lurcott v Wakely and Wheeler [1911–13] All ER Rep 41; [1911] 1 KB 905 …. [10.8] Luxmore v Robson (1818) 1 B & Ald 584 …. [10.8] Lymarn Holdings Pty Ltd v M and W Holdings Pty Ltd (SC(WA), Anderson J, 9 May 1996, unreported) …. [7.4], [10.1] Lyndon v Coventry Motors Retailers Pty Ltd (1975) 11 SASR 308 …. [12.9] Lyon v Reed (1844) 13 M & W 285; 153 ER 118; [1843–60] All ER Rep 178 …. [16.17] Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) …. [12.9] — v Lyons [1967] VR 169 …. [5.15] M’Bean v Brown (1887) 13 VLR 726 …. [4.6], [4.9] M’Donnell v Pope (1852) 9 Hare 705; 68 ER 697 …. [16.19] Macaura v Northern Assurance Co Ltd [1925] AC 619 …. [15.3] MacDonald v Robins (1954) 90 CLR 515; [1954] ALR 153 …. [7.12], [14.6], [14.8], [15.16] Macindoe v Wehrle (1913) 13 SR (NSW) 500 …. [7.12], [15.16] MacIntosh v Bebarfalds Ltd (1922) 22 SR (NSW) 37 …. [13.11], [17.4] Mackay v Blackston (1906) 6 SR (NSW) 248 …. [13.17] — v Wilson (1947) 47 SR (NSW) 315 …. [14.4]

Mackett v Shields (1894) 16 ALT 38 …. [3.9] Mackusick v Carmichael [1917] 2 KB 581 …. [15.2] Mackay v Dick (1881) 6 App Cas 251 …. [6.9] Macky v Cafe Monico [1906] 25 NZLR 689 …. [5.12], [16.28] Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28,563; [2010] NSWCA 268 …. [16.35], [18.2], [18.6] Macrocom Pty Ltd v City West Centre Pty Ltd (2001) 10 BPR 18,631 …. [10.5] Maddison v Alderson (1883) 8 App Cas 467; [1881–85] All ER Rep 742 …. [4.5] Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 201 CLR 181 …. [6.4] Mahmoud and Ispahani, Re [1921] 2 KB 716 …. [24.19], [25.15], [27.17] Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR 113 …. [6.5] Majala Pty Ltd v Ellas [1949] VLR 104 …. [17.12], [17.18] Majestic Homes Pty Ltd v Wise [1978] Qd R 225 …. [6.8] Major v Joseph [1949] ALR (CN) No 9 1056 …. [15.9] Majorie Burnett Ltd v Barclay (1980) 258 EG 642 …. [14.2] Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 …. [10.13] Malagara Pty Ltd v Mabrouk Pty Ltd (SC(NSW), Hulme J, 24 June 1998, unreported) …. [13.15] Maley v Fearn [1947] LJR 276; 176 LT 203; [1946] 2 All ER 583 …. [17.1], [17.5], [17.6] Mallen, Re [1929] SASR 154 …. [5.17] Malmsbury Confluence Gold Mining Co Ltd v Tucker (1877) 3 VLR (L) 213 …. [15.19] Malpas v Ackland (1827) 3 Russ 273; 38 ER 578 …. [5.17] Malzy v Eichholz [1916] 2 KB 308 …. [8.4] Mancetter Developments Ltd v Garmanson Ltd and Another [1986] QB 1212 …. [10.3], [10.5]

Manchester Bonded Warehouse Co Ltd v Carr (1880) …. [8.6] Manchester Brewery Co v Coombs [1901] 2 Ch D 608 …. [1.6], [4.8], [15.19] Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37 …. [14.4] Manchester, Sheffield & Lincolnshire Railway Co v Anderson [1898] …. [8.4] Manfield & Sons Ltd v Botchin [1970] 2 QB 612; 3 All ER 143 …. [2.15] Mangles v Dixon (1852) 3 HL Cas 702 …. [7.4] Maniero Pty Ltd v El Barador Holdings Pty Ltd (1982) …. [12.9] Manly Council v Malouf [2004] NSWCA 299 …. [24.2] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd (1995) 1 WLR 1508 …. [20.20] — v — [1997] AC 749; [1997] 2 WLR 945 …. [11.8], [11.9], [14.8], [16.7], [20.17] Manorlike Ltd v Le Vitas Travel Agency and Consultancy Services Ltd [1986] 1 EGLR 79 …. [20.21] Mansfield v Relf [1908] 1 KB 71 …. [7.16] Manufacturers’ Mutual Insurance Ltd v Withers (1988) …. [6.4] Maori Trustee v Bolton [1971] NZLR 226 …. [10.13], [17.12] — v Prentice [1992] 3 NZLR 344 …. [6.10] — v Rogross Farm Ltd [1994] 3 NZLR 410 …. [10.13] Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336 …. [6.8] Marana Holdings Pty Ltd v Commissioner of Taxation (2004) 141 FCR 299; [2004] FCAFC 307 …. [23.23] Marcellos, Re (1940) 41 SR (NSW) 154 …. [5.15] Maridakis v Kouvaris (1975) 5 ALR 197 …. [11.17], [16.21] Maritime Services Board of NSW v Australian Shipping Commission (1991) …. [11.6] Mark Mayne Pty Ltd v Suburban Centres Pty Ltd [1976] 2 NSWLR 67 …. [14.3]

Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211 …. [8.7], [10.1], [10.8], [10.12] Market Ring Write Services Pty Ltd v Dudson [2013] VCAT 546 …. [23.45] Markets Ltd v Green [1947] 2 All ER 140 …. [2.11] Markham v Paget [1908] 1 Ch 697 …. [8.4], [26.12], [26.13] Marlborough Park Services v Rowe [2006] 23 EG 166 …. [10.8] Marles v Philip Trant and Sons Ltd [1954] 1 QB 29 …. [6.9] Marlow Rolls Theatres Ltd, Re; Empire Theatres Ltd, Ex parte (1934) 51 WN (NSW) 193 …. [16.17], [16.18] Marquette v Doherty [2002] NSWSC 580 …. [2.4] Marsden v Edward Heyes Ltd [1927] 2 KB 1; [1926] All ER Rep 329 …. [8.7], [10.3] Marsh v Gilbert [1980] 2 EGLR 44 …. [7.12] Marsha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd [2006] VSC 15 …. [4.2] Marshall v Burman (No 2) [1961] VR 161 …. [2.11], [20.9], [20.14], [20.22] — v Commonwealth Hostels Ltd [1953] VR 503 …. [3.6], [3.8] — v Council of The Shire of Snowy River (1994) 7 BPR 14,447 …. [16.35], [18.2] — v Coupon Furnishing Co (1916) SR (Q) 120 …. [2.8] — v Mackintosh (1898) 78 LT 750 …. [13.4], [16.32] — v Rubypoint Ltd [1997] 1 EGLR 69 …. [10.13] — v Snowy River Council (1994) 6 BPR 97,483 …. [4.8], [14.6], [16.28] Martin v Coultas (1911) SALR l …. [7.12], [15.16] — v Elsasser (1878) 4 VLR (L) 481 …. [2.19], [15.4], [15.5] — v Individual Homes Pty Ltd (FCA, Full Court, 18 May 2000, unreported) …. [2.19] — v King (1996) 7 BPR 14,681 …. [16.36] — v Smith (1874) LR 9 Ex 50; [1874] 80 All ER Rep Ext 1903 …. [1.6] Martinali v Ramuz [1953] 1 WLR 1196 …. [2.19]

Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 …. [8.4], [10.1], [13.15] Martyn v Clue (1852) 18 QB 661 …. [15.19] Mascherpa v Direck Ltd [1960] 1 WLR 447 …. [19.4] Masha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd [2006] Aust Contract R ¶90-237; [2006] VSC 15 …. [10.13] Mason v Stevens (1943) 60 WN (NSW) 70 …. [4.10] Massart v Blight (1951) 82 CLR 423; [1951] ALR 401 …. [15.5], [15.16], [17.4], [24.18], [26.8] Masters v Cameron (1954) 91 CLR 353 …. [1.15], [4.1], [4.8] — v — (1998) …. [1.15] Matthews v Smallwood [1910]; [1908–10] All ER Rep 536 …. [16.30], [19.6] Matthey v Curling [1922] 2 AC 180 …. [1.2], [6.10] Matthias v Scott [2000] …. [11.3] Maud v Sandars [1943] 2 All ER 783 …. [10.13] Maxwell v Ward (1822) 11 Price 3; 147 ER 382; (1824) 13 Price 674; 148 ER 192 …. [14.11] May and Butcher Ltd v The King (1934) 2 KB 17 …. [4.8] May Bros Ltd, Re [1929] SASR 508 …. [10.5] Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 …. [6.11] Mayer v Southey (1892) 8 TLR 395 …. [13.4] Mayfield Holdings Ltd v Moana Reef Ltd [1973] 1 NZLR 309 …. [3.8] Mayho v Buckhurst (1617) Cro Jac 438; 79 ER 374 …. [15.19] Mayne Nickless Ltd v Solomon [1980] …. [11.20] Mayor of Bendigo v Burke [1917] VLR 531 …. [5.7] MCA International BV v Northern Star Holdings Ltd (1991) 4 ACSR 719 …. [6.5] McArthur v Stern (1986) 5 NSWLR 538 …. [3.8] McAuley v Bristol City Council [1992] QB 134 …. [8.1], [10.1] McBride v Sandland (1918) 25 CLR 69; 25 ALR 54 …. [4.5], [6.2]

McCafferty, Re [1994] …. [11.8] McCallum v McVean (1872) NSWR 739; 78 WN (NSW) 603 …. [17.7], [17.10] McCalman v Higgins [1960] …. [5.13] McCann v Annett [1948] NZLR 116 …. [3.5], [3.8] — v Switzerland Insurance Australia Pty Ltd (2000) 203 CLR 579 …. [6.4] McCarrick v Liverpool Corporation [1927] AC 219 …. [10.6] McCombe v Smith (1950) 52 WALR 12 …. [3.3] McDonald Multiple Pty Ltd v Presto Smallgoods (NSW) Pty Ltd [1978] 1 NSWLR 337 …. [21.2] McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 …. [16.32] — v Jane [1960] VR 184 …. [16.15], [16.18], [16.34] McDrury v Luporini [2000] ANZ ConvR 568 …. [17.18] McEacharn v Colton [1902] AC 104 …. [12.3], [15.5], [15.16], [15.19] McFadden v Snow (1951) 69 WN (NSW) 8 …. [16.18] McFadyen v Measures (1910) 10 SR (NSW) 190 …. [18.4] McGarrity v Condy (1927) 27 SR (NSW) 217 …. [9.1] McGirr v Warman [1968] …. [11.2] McGowan v Smith (1886) 12 VLR 244 …. [17.18] McGrath, Ex parte; Re Coyle (1943) 60 WN (NSW) 145 …. [20.13] McGreal v Wake (1984) 13 HLR 107; [1984] 1 EGLR 42 …. [10.13] McGregor Motors Ltd v Barton [1956] NZLR 297 …. [14.6] McGregor v Henry [2006] NSWSC 368 …. [19.5] McIntosh v Dylcote Pty Ltd (1999) 9 BPR 16,805 …. [16.7] McKendrick & Co Pty Ltd v Fush [2001] VSC 95 …. [12.9] McKenzie v McAllum [1951] …. [15.13] — v — [1956] VLR 208 …. [15.12], [15.13] McKinnon v Kirdy [2003] QSC 302 …. [10.6] — v Portelli (1960) 77 WN (NSW) 49; SR (NSW) 343 …. [17.9], [17.10],

[17.12], [18.4], [22.3] McLean v Grace [1953] NZLR 566 …. [16.34] McMahon v Ambrose [1987] VR 817 …. [3.8], [4.8], [15.17], [15.21], [16.13], [17.16] — v Docker (1945) 62 WN (NSW) 155 …. [15.8] — v Swan [1924] VLR 397 …. [14.5] McMahon’s (Transport) Pty Ltd v Ebbage [1999] 1 Qd R 185 …. [10.5] McMillan v Lowry (SC(Vic), December 1954 unreported) …. [5.15] McPhail v Persons, Names Unknown [1973] Ch 447 …. [3.9], [21.3] McPherson v Lawless [1960] VR 363 …. [20.2] McVicar v Jackson (1958) 75 WN (NSW) 146 …. [17.12] McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) 33 ALR 394 …. [12.9] Meadfield Properties Ltd v Secretary of State for the Environment [1995] 1 EGLR 39 …. [20.2] Meadows v Clerical, Medical and General Life Assurance Society [1981] Ch 70 …. [19.5] Measures v McFadyen (1910) 11 CLR 723 …. [6.8], [15.19] Mecca Leisure Ltd v Renown investments (Holdings) Ltd (1984) …. [11.6] Medina v Stoughton [1699] Salk 210; 1 Ld Raym 593 …. [6.11] Meehan v Jones (1982) …. [4.2] Meek v Bennie [1940] NZLR 1 …. [5.17] Mega Byte Baby Pty Ltd v WJH Pty Ltd [2005] VCAT 1391 …. [23.61], [23.63] Megaloconomos v MGM Ltd (1953) 54 SR (NSW) 275 …. [3.8] Mehevi Pty Ltd v Stromboli Pty Ltd [2005] NSWADT 29 …. [24.2] MEK Nominees Pty Ltd v Billboard Entertainments Pty Ltd (1993) V ConvR ¶54-468 …. [7.4] Melbourne Pathology Pty Ltd v Health Insurance Commission Pty Ltd (1997) 72 FCR 513 …. [1.3]

Melksham v Archerfield Airport Corporaion [2004] ANZ ConvR 363 …. [19.1], [19.5] Melles & Co v Holme [1918–19] All ER Rep 271; [1918] 2 KB 100 …. [10.6] Mellows v Low [1923] 1 KB 522; [1923] All ER Rep 537 …. [2.21] Mellows v May (1601) Cro Eliz 874; 78 ER 1099 …. [16.21] Melluish v B.M.I. (No 3) Ltd [1996] AC 54 …. [10.5] Melville v Grapelodge Developments Ltd [1980] 1 EGLR 42 …. [7.4] Melzak v Lilienfeld [1926] Ch 480; [1926] All ER Rep 404 …. [9.1] MEP Australia Ltd v Commonwealth [1973] 2 NSWLR 848 …. [14.7] Mercantile Investments Ltd v Australian Optical Co Ltd [1945] SASR 129 …. [7.14] Merdigate Nominees Pty Ltd v Fetterplace (1998 unreported) …. [11.16] Mersey Steel and Iron Co v Naylor, Benzon and Co (1884) 9 App Cas 434 …. [16.29] — v — (1884) J Bridg 16; 123 ER 1167 …. [16.29] MESATA Pty Ltd v Rastogi [2007] VCAT 1242 …. [23.54] Meskin v Hickford (1624) J Bridg 16; 123 ER 1167 …. [1.5] Messenger, Re (1960) 77 WN (NSW) 114 …. [15.2] Mestros v Blackwell (1974) 8 SASR 323 …. [14.3] Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507 …. [16.30] Metford Industries Ltd; Ex parte, Re Hall, Commissioner for Railways (NSW) [1962] NSWR 1228 …. [14.8] Metha v Royal Bank of Scotland plc (1999) Times 53 (25 January 1999) …. [1.3] Metrolands Investments Ltd v J H Dewhurst Ltd [1986] …. [11.6] Metropolitan Fire Brigades Board v Tait [1949] VLR 231 …. [3.5] Metropolitan Gas Co v Federated Gas Employees’ Industrial Union, The (1925) 35 CLR 449 …. [6.4] Metropolitan Permanent Building & Investment Society, Re (1881) 7 VLR

(Eq) 87 …. [5.8] Metropolitan Properties Co Ltd v Cordery [1979] 2 EGLR 78 …. [15.16] Metropolitan Trade Finance Co Pty Ltd v Coumbis (1973) 2 ALR 258 …. [16.3], [20.8] Meux v Jacobs (1875) LR 7 HL 481 …. [10.5] MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER 974 …. [14.3] MI Design Pty Ltd v Dunecar Pty Ltd [2000] 1 KB 16 …. [19.4] Miwa Pty Ltd v Siantan Properties Pty Ltd (2011) 15 BPR 29,545 …. [6.8] Michael v Phillips [1924] …. [16.19] Middlegate Properties Ltd v Gidlow-Jackson (1977) 34 P & CR 4 …. [10.13] Midland Railway Co’s Agreement, Re [1970] 1 Ch 568 …. [2.13], [20.2] Midland Railway Co’s Agreement, Re; Charles Clay & Sons Ltd v British Railways Board [1971] Ch 725; [1971] 2 WLR 625 …. [2.13], [20.2] Mikaelian v Commonwealth Scientific & Industrial Research Organisation (1999) 163 ALR 172; [1999] FCA 610 …. [12.9], [14.4] Milchas Investments Pty Ltd v Larkin (1989) 96 FLR 464 …. [1.15] — v — (1989) ATPR 50,431 …. [1.15] Miller v Emcer Product Ltd [1956] Ch 304; [1956] 1 All ER 237 …. [8.3], [10.1], [23.55], [26.9] — v Sharp [1899] 1 Ch 622 …. [14.8] Mills v Cannon Brewery Co Ltd [1920] 2 Ch 38 …. [15.11], [15.13] — v Dunham [1891] …. [6.4] — v Griffiths (1876) 45 LJQB 771 …. [7.7], [17.18] — v Heuston (1909) 9 SR (NSW) 469 …. [13.17] Milmo v Carreras [1946] KB 306 …. [15.1], [15.2], [15.18] Milne v Lahz (1951) 52 SR (NSW) 30 …. [15.2], [15.17], [16.13], [16.14] Milnes v Gery (1807) 14 Ves 400; 33 ER 574 …. [14.7] Milos Nominees Pty Ltd v F J and M J Parker Pty Ltd (1981) 2 BPR 9248 …. [14.6]

Mineaplenty Pty Ltd v Trek31 Pty Ltd [2006] NSWSC 1203 …. [19.4] Mining Co Ltd v Federal Commissioner of Taxation (1981) 35 ALR 335 …. [1.4] Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687 …. [19.1], [19.4] Minister for the Army v Dalziel (1944) 68 CLR 261 …. [6.10] Minister for Transport v Edgar Enterprises Pty Ltd [2006] WASC 27 …. [26.6] Minister of Health v Bellotti [1944] 1 All ER 238; [1944] KB 298 …. [3.8], [16.36] Minister of State for the Army v Dalziel (1944) 68 CLR 261; [1944] ALR 89 …. [1.4], [1.13], [2.19], [3.1], [3.2], [6.10], [15.18], [26.8] Minister of State for the Interior v RT Co Pty Ltd (1963) 107 CLR 1; [1963] ALR 57 …. [17.12], [17.17] Minister v Mathieson (1903) …. [11.28] Minja Properties Ltd v Cussins Property Group plc [1998] 2 EGLR 52 …. [10.7], [10.8] Mint v Good [1950] 2 All ER 1159; [1951] 1 KB 517 …. [10.1] Mira v Aylmer Square Investments (1989) 21 HLR 284 …. [13.15] — v — [1990] 1 EGLR 45 …. [13.15] Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231 …. [1.6], [5.8], [5.16], [14.1], [15.9] Misner v Australian Capital Territory (2000) ACTR 1 …. [6.8] Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 …. [12.9] Mitas v Hyams (1951) …. [11.21] Mitchell v Catlin [1948] VLR 367 …. [15.2] — v Cummings [1947] VLR 315 …. [16.2], [20.31], [20.32] — v Ealing London Borough Council [1979] QB 1 …. [16.36] — v Hore (1927) 27 SR (NSW) 433 …. [10.10]

— v Wieriks (1975) 49 ALJR 8 …. [20.3] Mitchison v Thomson (1883) 1 Cab & E 72 …. [19.4] Mittagong Shire Council v Mittagong Anthracite Coal Co Ltd (1957) 3 LGRA 290 …. [3.6] MK & JA Roche Pty Ltd v Metro Edgley Pty Ltd [2005] NSWCA 39 …. [1.15] Moat v Martin [1950] 1 KB 175; [1949] 2 All ER 646 …. [15.8] Mobil Oil Australia Ltd v Kosta [1970] ALR 253; 14 FLR 343 …. [6.5], [14.10] — v Wellcome International Pty Ltd (1998) 81 FCR 475 …. [1.15] Mockbell v Hughes (1909) 9 SR (NSW) 304 …. [8.4] Molina v Leask [1998] ANZ ConvR 361 …. [15.5], [15.16], [15.17], [15.18] Monaco Willows Pty Ltd v Greenbox Pty Ltd (1996) ATPR 41-527 …. [12.9] Monk v Noyes (1824) 1 C & P 265; 171 ER 1189 …. [10.10] Montague v Browning [1954] 1 WLR 1039 …. [11.1], [11.2] Monters Pty Ltd, Ex parte; Re Webster [1960] NSWR 521; [1961] SR (NSW) 354 …. [2.2], [2.4] Montross Associated Investments SA v Moussaieff [1992] 1 EGLR 55 …. [7.8], [23.18] Moore & Hulm’s Contract, Re [1912] 2 Ch 105 …. [1.9] Moore & Scroope v State of Western Australia (1907) 5 CLR 326 …. [8.1], [8.4] Moore v Callus [1971] QWN 26 …. [17.18], [20.30], [20.32] — v Dimond (1929) 43 CLR 105; [1930] ALR 341 …. [1.6], [1.12], [2.1], [2.7], [2.8], [2.11], [2.15], [4.8] — v — [1930] …. [2.11] — v Ullcoats Mining Co Ltd [1908] 1 Ch 575 …. [17.9], [17.10], [17.11], [17.12] Moorgate Mercantile Co Ltd v Twitching’s [1976] QB 225 …. [1.15]

Moratic Pty Ltd v Gordon (2007) NSW ConvR ¶56-172; [2007] NSWSC 5 …. [4.1], [6.7] Morcom v Campbell-Johnson [1956] 1 QB 106; [1955] 3 All ER 264 …. [10.8] Moreton Club, The v Commonwealth (1948) …. [11.8] Morgan v Liverpool Corporation [1927] 2 KB 131 …. [10.6], [23.54] — v Milman (1853) 3 De GM & G 24; 43 ER 10 …. [14.7] — v Savage (1872) 3 ALJR 53 …. [14.1] Moriarty, Ex parte (1924) 24 SR (NSW) 298 …. [20.9] Morison v Edmiston (1907) VLR 191; 26 ALT 148 …. [1.5], [2.2], [2.8] — v Hall [1923] VLR 93 …. [11.28], [15.5], [15.16], [24.18], [26.8] Mornane v All Red Carrying Co Pty Ltd [1935] VLR 341 …. [20.3], [20.5] Morrison Holdings Ltd v Manders Property (Wolverhampton) Ltd [1976] 2 All ER 205; [1976] 1 WLR 533 …. [16.18] Morrison v Jacobs [1945] KB 577 …. [2.12] Morris-Thomas v Petticoat Lane Rentals Ltd (1986) 53 P & CR 238 …. [3.1] Morrow v Nadeem [1986] 1 WLR 1381 …. [18.6] Mortal v Lyons (1858) 8 1 Ch R 112 …. [4.6] Morton v Hampson [1962] VR 364 …. [23.40] Moschi v Lep Air Services Ltd [1973] AC 331 …. [16.32] Mosely v Virgin (1796) 3 Ves Jun 184; 30 ER 959 …. [10.13] Mosman Municipal Council v Shaw (1928) 11 LGR (NSW) 150 …. [10.8] Moss v Barton (1866) 55 ER 870 …. [14.9] — v Gallimore (1779) 1 Dougl 279; 99 ER 182 …. [15.20] — v Glebe Municipal Council (1947) 48 SR (NSW) 208 …. [3.6] Moss’ Empires Ltd v Olympia (Liverpool) Ltd [1939] AC 544; [1938] 3 All ER 166 …. [10.13], [15.19] Moteks Pty Ltd v Matthews Pastoral Co Pty Ltd (1998 unreported) …. [7.8] Motor Works Ltd v Westminster Auto Services Ltd [1997] 1 NZLR 762 …. [14.4]

Mottram Consultants Ltd v Bernard Sunley & Sons Ltd [1975] 2 Lloyd’s Reports 197 …. [6.5] Moule v Garrett (1872) …. [15.21] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 …. [6.5] Mount Charlotte Investments Ltd v Leek and Westbourne Building Society (1975) …. [11.6] Mount Cook National Park Board v Mount Cook Motels Ltd [1972] NZLR 481 …. [8.5] Mowan v Wandsworth London Borough Council [2001] BLGR 228 …. [8.4] Mowats Ltd v Hudson Bros Ltd (1911) 105 LT 400 …. [10.5] Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376 …. [23.12], [24.2] — v — [2004] ANZ ConvR 230; [2003] NSWCA 376 …. [23.12], [23.18] Muirs v Morrison [1980] VR 83 …. [6.9] Mulcahy v Brown (1947) 64 WN (NSW) 39 …. [20.15] — v Hoyne (1925) 36 CLR 41 …. [7.7], [17.18] Mulholland’s Will Trusts, Re [1949] 1 All ER 460 …. [14.1] Muller v Trafford [1901] 1 Ch 54 …. [14.1], [15.20] Mumford Hotels Ltd v Wheler [1964] Ch 117; [1963] 3 All ER 250 …. [10.1] Munday v Prowse (1878) 4 VLR (Eq) 101 …. [13.11] Munro v Dare [1934] St R Qd 332 …. [2.13] Murphy, Ex parte (1856) 2 Legge (NSW) 976 …. [2.8] Murphy v Harris [1924] QSR 187 …. [15.21] — v Hurly [1922] 1 AC 369; [1922] All ER Rep 169 …. [10.6] — v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26; [2004] HCA 3 …. [12.9], [23.39], [23.55] — v Simpson [1957] VR 598 …. [5.18], [6.2] — v Victoria (2014) 45 VR 119 …. [12.1], [12.9]

Murray v McKelvey (1950) 68 WN (NSW) 70 …. [16.20] Murrell v Fulton [1962] VR 118 …. [16.19] Muspratt v Johnston [1963] 2 QB 383; 2 All ER 339 …. [17.12] Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 …. [13.15] Myers v Catterson (1889) 43 Ch D 470 …. [8.5] — v Pioneer Concrete (Vic) Pty Ltd [1997] …. [11.5] N H Dunn Pty Ltd v L M Ericsson Pty Ltd (1979) 2 BPR 9241 …. [10.5] Nai Pty Ltd v Hassoun Nominees Pty Ltd [1985–86] ANZ ConvR 349 …. [16.31] Nance v Taylor [1928] 1 KB 263; [1927] All ER Rep 184 …. [19.2] Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184 …. [11.17], [15.20], [16.30], [16.32] Napatarra Pty Ltd v Perpetual Trustee Co Ltd [1999] NSWSC 750; [2000] ANZ ConvR 592 …. [4.1] Napier v Williams [1911] 1 Ch 361 …. [5.15], [6.8] Napper, Nieling & Rose v PT Ltd, Terry White Ltd (VCAT (M F Macnamara, Deputy President) 13 March 2003, unreported) …. [23.39] Narcan Pty Ltd v Piccol Credit Co-operative Ltd [1993] ANZ ConvR 393; (1992) V ConvR ¶54-426 …. [23.39] Nardell Coal Corporation Pty Ltd (in liq) v Hunter Valley Coal Processing Pty Ltd (2003) 46 ASCR 467 …. [5.9], [5.10] Nash v Johnsen [1965] NSWLR 1193 …. [3.4] Nashvying Pty Ltd v Giacomi [2007] QCA 454 …. [12.9] National Australia Bank Ltd v Blacker (2000) 104 FCR 288 …. [10.5] — v Golden Sea Dragon (Hobart) Pty Ltd (1992) 4 Tas R 250 …. [1.15] National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 …. [1.2], [3.1], [4.1], [16.26], [16.27], [16.28], [16.29], [16.30], [16.35] National Mutual Life Association of Australasia Ltd v Price Brent Services [1996] ANZ ConvR 249 …. [16.22]

— v Ampol Ltd (1983) …. [11.6] National Mutual Life Nominees Ltd v Travellers (NSW) Pty Ltd [1997] ANZ Conv R 249 …. [2.15], [11.28], [16.18], [16.21] National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97, 322 …. [1.4], [1.5], [3.3], [3.6] National Phonograph Co of Australia Ltd v Menck (1908) 7 CLR 418 …. [2.19] National Provident Fund v Shortland Securities Ltd [1996] …. [11.5] National Provincial Bank v Ainsworth [1965] AC 1175 …. [7.4] National Savings Bank Association, In re; Brady’s case (1867) 15 WR 753 …. [4.6] National Trustees Executors & Agency Co of Australasia Ltd v Boyd (1926) 39 CLR 72 …. [4.1], [4.8] — v Tindall [1933] VLR 369 …. [5.16] National Westminster Bank v Hart [1983] …. [11.3] Natural Gas & Oil Corporation Ltd v Byrne (1951) 68 WN (NSW) 207 …. [2.6], [2.9], [2.20], [10.10] Nature’s World (Chadstone) Pty Ltd v Perpetual Trustees Ltd [2001] VCAT 654 …. [23.34], [23.39] Nature’s World (Chadstone) Pty Ltd v Perpetual Trustees Ltd (2001 unreported) …. [23.35], [23.40] Naumberg v Executors of Albertson (1889) 3 QLJ 125 …. [7.12], [15.16] Naylor v Arnitt (1830) 1 Russ & M 501, 39 ER 193 …. [5.17] NCL Properties Pty Ltd v Harlington Pty Ltd [1979] …. [17.12] Neale v Mackenzie (1836) 1 M & W 747; 150 ER 635 …. [1.9] Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 …. [16.33] Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR ¶55-496 …. [14.1], [14.6] Neubauer v Scott (1967) 10 FLR 72 …. [11.2] Never-Stop Railway (Wembley) Ltd v British Empire Exhibition (1924) Incorporated [1926] 1 Ch 877 …. [10.5]

New Oriental Bank Corporation, Re [1985] 1 Ch 753 …. [16.28] New Oriental Bank Corporation, Re [1895–9] All ER Rep 910 …. [16.28] New South Wales v SAS Trustee Corporation (1997) …. [11.8] New Zealand Government Property Corp v HM & S Ltd [1982] QB 1145; [1982] 1 All ER 624 …. [10.5], [16.36] New Zealand Insurance Co Ltd v Keesing [1953] NZLR 7 …. [10.8] New Zealand Shipping Co v Societe des Ateliers et Chantiers de Franc [1919] AC 1 …. [6.9] Newbolt v Bingham (1895) 72 LT 852 …. [19.2] Newell and Nevill’s Contract, Re [1900] 1 Ch 90 …. [5.19] Newell v Crayford Cottage Society [1922] 1 KB 656 …. [16.19] Newey v Westpac Banking Corporation [2011] NSWCA 319 …. [6.5] Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 …. [7.4] Newlon Housing Trust v Alsulaimen [1999] 1 AC 313 …. [5.15] Newman v Real Estate Debenture Corporation Ltd [1940] 1 All ER 131 …. [26.9] — v Slade [1926] 2 KB 328 …. [20.3], [20.4] NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 …. [6.4], [17.10], [17.12], [17.18], [19.6] Niagara Therapy (UK) Ltd v Richard Shops Ltd (QB, 8 June 1981, unreported1981 unreported) …. [4.2] Niazi Services Ltd v Van der Loo [2004] 1 WLR 1254 …. [10.13], [13.15] Nicholas & Grant’s Lease, Re (1923) 44 ALT 169 …. [14.3] Nicholas v Smith [1956] VLR 416 …. [2.17] Nicholson v Smith (1882) 22 Ch D 640 …. [14.2], [14.8] Nickolau v Papasavas Phillips & Co [1988] VR 682 …. [16.32] Niesmann v Collingridge (1921) CLR 177 …. [14.8] Nightingale v Courtney [1954] 1 QB 399; [1954] 1 All ER 362 …. [16.19] Nime Pty Ltd v Seventh Storey Pty Ltd [1993] V ConvR ¶54-491 …. [25.2]

Nina’s Bar Bistro Pty Ltd v MBE Corp (Sydney) Pty Ltd [1984] 3 NSWLR 613 …. [16.30] Ninubon v Gag Pty Ltd (1998) 9 BPR 16,479 …. [14.6], [20.2], [20.5] Nixon, Re [1904] 1 Ch 638 …. [5.18] — v Doney [1960] NSWR 2; (1960) 77 WN (NSW) 369 …. [11.2] NLS Pty Ltd v Hughes (1966) 120 CLR 583; 40 ALJR 292 …. [11.17], [13.4], [13.14], [16.22], [16.30], [24.7] No 1 Albemarle St, Re [1959] 1 Ch 531; 1 All ER 250 …. [15.20] No Worries Management v Dolman [2004] QSC 153 …. [11.1] Noblett v Manley [1952] SASR 155; [1952] ALR 673 …. [3.8] Nokes v Fish (1857) 3 Drew 735; 61 ER 1084 …. [15.21] Noone v Traynar (1952) 69 WN (NSW) 33 …. [1.9] Norbury Sudbury Ltd v Noront Steel (1981) Ltd (1984) 11 DLR (4th) 686 …. [10.11] Norden v Blueport Enterprises Ltd [1996] 3 NZLR 450 …. [8.4], [8.5] Norfolk Capital Group Ltd v Kitway [1977] QB 506 …. [15.14] Norman v FCT (1963) 109 CLR 9 …. [6.8] Norris v Checksfield [1991] 1 WLR 1241 …. [3.5] Nortel Australia Pty Ltd v Portfolio Leasing Australia Ltd (20 March 1998, unreported) …. [11.8], [14.8] North Eastern Railway Company v Lord Hastings [1900] AC 260 …. [6.6] North Shore Gas Co Ltd v Commissioner of Stamp Duties (NSW) (1940) 63 CLR 52 …. [10.5] North, Re [1909] 1 Ch 625 …. [5.17] Northcott v Roche (1921) 37 TLR 364 …. [17.17] Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 …. [10.1], [10.6] Northern Sandblasting Pty Ltd v Harris’ (1997) …. [10.1] — v — (1998) …. [10.1] Northfield (Highgate) Ltd, Ex parte [1957] …. [15.1]

Norwest Beef Industries Ltd v Peninsular and Oriental Steam Navigation Co (1987) 8 NSWLR 568 …. [6.5] Norwich Union Life Insurance Society v Tony Waller Ltd [1984] …. [11.9] Noske v McGinnis (1933) 47 CLR 563; 8 ALJ 15; [1933] ALR 322 …. [13.4] Novell Holdings Pty Ltd v Adjo Pty Ltd (SC(WA), Full Court, 5 February 1999 unreported) …. [1.15] NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 273; 64 WN (NSW) 58 …. [16.18] Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; 116 ALR 26 …. [1.12] Nunn v Fabian (1865) …. [4.6] Nurdin & Peacock plc v DB Ramsden & Co Ltd [1999] …. [11.3] Nyul Nyul Aboriginal Corporation v Dann (1996) 133 FLR 359 …. [3.9] NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 …. [6.5] NZI Insurance Australia Ltd v Baryzcha (2002) 85 SASR 482; [2002] SASC 16 …. [1.12] — v — (2003) 85 SASR 497; [2003] SASC 190 …. [1.3], [4.1], [4.4], [4.8], [11.1], [24.2], [25.2], [26.2], [27.2], [28.2] O’Brien v Clegg; Ex parte Clegg [1951] St R Qd 1 …. [20.20] — v Robinson [1973] AC 912 …. [10.6] O’Callaghan v Elliott [1966] 1 QB 601 …. [14.8] — v Olsen [1948] SASR 123 …. [14.3] O’Connor v Fitzgerald [1927] St R Qd 226 …. [10.10] — v S P Bray Ltd (1937) 56 CLR 464 …. [10.1] O’Connor’s Management Pty Ltd v Kao Holdings Pty Ltd [1998] WASCA 2 …. [26.10] O’Dea v Allstates Leasing System (WA) Pty Ltd (1983) …. [11.3] O’Dwyer v Butts (1952) 69 WN (NSW) 198 …. [4.1] O’Keefe v Williams (1910) 11 CLR 171; [1911] ALR 113 …. [5.6], [7.1],

[8.1], [8.4], [13.15] O’Leary v Islington London Borough Council (1983) 9 HLR 81 …. [8.4] O’Mahony v Dickson (1905) 2 Sch & Lef 305 …. [7.4] O’Mullane v Wilson (1856) 1 VLT 86 …. [5.15], [7.12], [15.16] O’Neill v Coffill (1920) 20 SR (NSW) 264 …. [10.8] O’Rourke v Hoeven [1974] 1 NSWLR 622 …. [4.9] O’Shanassy v Symons (1856) 1 VLT 58 …. [7.7] O’Shea, Re [1957] VR 352 …. [1.7], [5.17] O’Young v Walter Reid and Co Ltd (1932) 47 CLR 497 …. [4.4] Oak Property Co Ltd v Chapman [1947] 1 KB 886; 2 All ER 1 …. [17.18] Oastler v Henderson (1877) 2 QBD 575 …. [16.21], [16.31] Oates v Oates [1949] SASR 37 …. [5.15] Ocean Line v Macquarie Bank (SC(Qld), Mackenzie J, CA No 6935 of 1996, 26 September 1996, unreported) …. [16.36] Oceanic Steam Navigation Co v Sutherberry (1880) 16 Ch D 236 …. [5.17], [5.18] Oceanic Village Ltd v Shirayma Shokussan Co Ltd [2001] EGCS 162 …. [8.5] Ocelota Pty Ltd v Water Administration Ministerial Corporation (2000) …. [11.3] Octra Nominees Pty Ltd v Chipper (2007) ANZ ConvR 455 …. [14.4] Official Assignee, Ex parte [1958] …. [17.9] Official Custodian for Charities v Mackey (No 2) [1985] 1 WLR 1308; [1985] Ch 168 …. [17.17], [19.5], [19.6] — v Parway Estates Developments Ltd [1985] Ch 151 …. [15.21], [17.18], [19.1], [19.6] Official Trustee of Charity Lands v Ferriman Trust Ltd [1937] 3 All ER 85 …. [1.15], [15.17] Offset Printing Co Pty Ltd v Peters (1955) 73 WN (NSW) 178 …. [15.13] Ogwr Borough Council v Dykes [1989] 1 WLR 295 …. [1.4] Old Grovebury Manor Farm Ltd v W Seymour Plant Sales & Hire Ltd (No 2)

[1979] 1 WLR 1397 …. [15.16], [18.10], [24.18] Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 …. [15.16], [19.1], [24.18], [26.8] Oldershaw v Holt (1840) 12 A & E 590; 113 ER 935 …. [13.4] Olga Investments v Citipower Ltd [1988] VR 485 …. [2.16] Oliver as Agent for Women’s Hospital (Crown St) v Holliday (1951) 51 SR (NSW) 316 …. [20.11] Oliver v Oliver (1958) 99 CLR 20 …. [14.8] Olsson v Dyson (1969) 120 CLR 365 …. [1.15] One Stop Lighting (Queensland) Pty Ltd v Lifestyle Property Developments Pty Ltd (1999) Q ConvR ¶54-527 …. [4.1], [4.4], [4.5] Ong v Luong (1991) 9 BPR 16,795 …. [6.5] Onslow v Corrie (1817) 2 Madd 330; 56 ER 357 …. [5.18] Opera House Investments Pty Ltd v Devon Buildings Pty Ltd (1936) …. [11.8] Optus Network Pty Ltd v Stonnington City Council [1996] 2 VR 209 …. [23.65] Oraka Pty Ltd v Leda Holdings (1997) ATPR 41-558 …. [12.9] Orchard v Simpson (1857) 2 CBNS 299; 140 ER 431 …. [26.10] Ormond v Hutchinson (1809) Ves 94; 33 ER 919 …. [5.13] Orr v Ford (1989) 167 CLR 316; 84 ALR 146 …. [8.9] Orti-Tullo v Sadek (2001) 10 BPR 19,179; [2001] NSWSC 855 …. [23.40] Orsay Holdings Pty Ltd v Mecanovic [2013] QCA 232 …. [25.13] Ory and Ory v Betamore Pty Ltd (in liq) (1993) 60 SASR 393 …. [7.4], [11.3], [15.20] Osborne Computer Corporation Pty Ltd (vol admin apptd) v Airroad Distribution Pty Ltd (1995) 17 ACSR 614 …. [16.36] Osborne Park Co-operative Society Ltd v Wilden Pty Ltd (1989) 2 WAR 77 …. [1.15] Oscars Town Centre Restaurant Pty Ltd v Port Shores Pty Ltd (1987) NSW

Conv R ¶55-331 …. [14.8] Osland v Foot (No 1) (1951) 69 WN (NSW) 320 …. [4.10] Otago Harbor Board v Spedding (1885) 4 NZLR 272 …. [5.8] Our Boy’s Clothing Co v Holborn Viaduct Co (1896) 40 Sol Jo 561 …. [7.14] Overell’s Pty Ltd, Ex parte [1941] …. [16.18], [17.10] Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2004] VSC 400 …. [23.39] — v — (2006) V ConvR ¶54-713; [2006] VSCA 6 …. [2.15], [23.39], [23.46] Owen v Elliott (Inspector of Taxes) [1990] 1 Ch 786 …. [23.23] — v Gadd [1956] 2 QB 99; [1956] 2 All ER 28 …. [8.4], [13.15] Owendale Pty Ltd v Anthony (1967) 117 CLR 539 …. [17.4], [17.12], [17.17], [17.18] Owers, Re [1941] Ch 389 …. [5.18] Oxford v Provand [1868] LR 2 PC 135 …. [7.16] Oxley v James (1844) 13 M & W 209; 153 ER 87 …. [1.8] Oz Sushi Pty Ltd v Lloyd Bennett & Associates Pty Ltd [2002] QDC 220 …. [25.8] P & A Swift Investments (a firm) v Combined English Stores Group plc [1989] AC 632 …. [15.20] P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88 …. [24.2], [25.2], [26.2], [27.2], [28.2] P&S Amusements Ltd v Valley House Leisure Ltd [2007] EWHC 1494 …. [8.1] Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 …. [4.2], [6.4], [6.5] Pacific Cinemas (Loganholme) Pty Ltd v Longhurst [1996] …. [11.5] Pacific Loan & Finance Pty Ltd v Litmanowicz [1960] NSWR 805; 78 WN (NSW) 459 …. [16.3], [20.1] Pacific Parking Pty Ltd and Leighton Holdings Ltd v Ryssal Three Pty Ltd

(1995) V ConvR ¶54-515 …. [14.6] Page v More (1850) …. [17.17] Paget v Pearson (1949) 49 SR (NSW) 235 …. [20.9] Pain v Coombs (1857) 1 De G & J 34; 44 ER 634 …. [4.6] Pallos v Munro (1970) 72 SR (NSW) 507 …. [16.8] Palmdale Insurance Limited v Sprenger [1988] 1 Qd R 414 …. [2.14], [2.15], [4.1], [5.1], [15.16] Palmer v Ampersand Investments Ltd (1984) 11 DLR (4th) 295 …. [14.1] Palmer, Ex parte (1912) 12 SR (NSW) 756 …. [3.9], [5.17], [20.12], [20.27] Pampris v Thanos [1968] 1 NSWR 56; (1967) 87 WN (Pt 2) (NSW) 161 …. [8.6] Pan Australian Credits (SA) Pty Ltd v Kolim Pty Ltd (1981) 27 SASR 353 …. [10.5] Panamena Europea Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd [1947] AC 428 …. [17.5] Pape v Aero Club (Holdings) Pty Ltd (1971) 222 EG 41 …. [13.11] Papillon v Brunton (1860) 5 H & N 518; 157 ER 1285 …. [20.28] Paralowie Investments Pty Ltd v Maurice Srour Pty Ltd [2006] SADC 16 …. [25.7], [27.6], [27.7] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 …. [12.9], [24.3], [25.13], [26.3], [27.3], [28.3] Parker v Briggs (1893) 37 Sol Jo 452 …. [16.15] — v Camden London Borough Council [1986] Ch 162 …. [10.13] — v Harris (1692) 1 Salk 262; 91 ER 230 …. [11.1] — v Jones [1910] 2 KB 32 …. [15.16], [16.3] — v Mallon (1907) 24 WN (NSW) 206 …. [13.11] — v Sell (1890) 16 VLR 271 …. [5.14], [5.15], [10.10] — v Taswell (1858) 2 De G & J 559; 44 ER 1106 …. [1.6] — v Webb (1693) 3 Salk 5; 91 ER 656 …. [15.19], [15.20] — v Whyte (1863) 1 H & M 167 …. [13.11]

Parker (dec’d), Re (1985) …. [11.3] Parkinson v Braham [1962] NSWR 165; [1962] SR (NSW) 663 …. [5.16] Parras v FAI General Insurance Company Ltd (2001) 10 BPR 19,209 …. [14.10] Parry v Robinson Wyllie Ltd [1987] 2 EGLR 133 …. [15.19] Parsons v Parsons [1983] 1 WLR 1390 …. [5.15] — v Payne [1945] VLR 34 …. [16.18], [16.21], [16.28] Partenreederei M/S Karen Oltmann v Scarsdale Shipping Co Ltd (The Karen Oltmann)[1976] 2 Lloyd’s Rep 708 …. [6.6] Partnership Pacific Securities Limited, Re [1994] 1 Qd R 410 …. [7.4], [15.20] — v Terry White Group Pty Ltd (SC(Qld), de Jersey J, unreported, OS 240 of 1992) …. [7.4] Partridge v McIntosh & Sons Ltd (1933) 49 CLR 453 …. [1.14] Pascoe v Holyoake [2006] NSWSC 64 …. [24.20] Pascoe-Webbe v Nusuna Pty Ltd (1985) 3 BPR 9620 …. [23.35], [23.36] — v — (1985) 3 BPR 97,231 …. [16.11], [16.19], [23.11], [23.16] Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd [1991] 2 VR 214 …. [16.8] — v — [1991] 2 VR 227 …. [16.9] Pasley v Freeman (1789) 3 TR 51; 1 RR 634; [1775–1802] All ER Rep 31 …. [6.11] Pata Nominees Pty Ltd v Durnsford Pty Ltd [1988] WAR 365 …. [14.1], [14.4] Patel v Earlspring Properties Ltd [1991] …. [11.9] — v Patel [1981] 1 WLR 1342 …. [5.18] Pateman v Heyen (1993) 33 NSWLR 188 …. [5.17] Patrick Corporation Ltd v Toll Holdings Ltd (2005) 55 ACSR 386; [2005] VSC 392 …. [4.2] Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia

(1998) 195 CLR 1 …. [7.8] Patrick Stevedores Operations (No 2) Pty Ltd v Port of Melbourne Corporation [2016] VSC 528 …. [14.2], [14.3] Paul v Nurse (1828) 8 B & C 486; 108 ER 1123 …. [15.16], [15.19] Paull v Williams [2005] NSWCA 421; [2006] ANZ ConvR 132 …. [4.1] Pawson v Revell [1958] 2 QB 360; [1958] 3 All ER 233 …. [5.19] Payne v Haine (1847) 16 M & W 541; 153 ER 1304 …. [10.8] — v Morrison [1991] ANZ ConvR 458; (1992) V ConvR ¶54-428 …. [23.39] PCM Nominees (No 2) Pty Ltd v Brighton Bay Developments Pty Ltd [2006] VSC 351 …. [6.6] Peachy v Duke of Sommerset (1721) 1 Stra 447 …. [19.1] Pearce v Florenca (1976) …. [12.16] — v Kitchin (1931) 26 Tas LR 38 …. [2.19] Pearch v Gyucha (1953) 71 WN (NSW) 123 …. [3.4] Pearse v Boulter (1860) 2 F & F 133; 175 ER 993 …. [20.12] Pearson v Gee and Braceborough Spa Ltd [1934] AC 272 …. [18.4] Peebles v Crosthwaite (1896) 13 LT 37; (1897) 13 TLR 198 …. [15.3] Peers v Sneyd (1853) 17 Beav 151; 51 ER 990 …. [14.8] Peet & Co Ltd v Rocci [1985] WAR 164 …. [4.2], [4.8], [13.4], [16.30] Pellatt v Boosey (1862) 31 LJCP 281 …. [17.18] Pembery v Lamdin [1940] 2 All ER 434 …. [10.7], [10.10] Peninsular Maritime Ltd v Padseal Ltd [1981] 2 EGLR 43 …. [17.12] Penn v Gatenax Co Ltd [1958] 1 All ER 712 …. [8.6], [10.1] — v — [1958] 2 QB 210 …. [8.6], [10.1] Pennell v City of London Brewery Co [1900] 1 Ch 496 …. [18.6] — v Payne [1995] QB 192 …. [16.3], [17.16] Penny v Craber [1967] 1 NSWR 683; (1967) 87 WN (Pt 1) (NSW) 27 …. [16.19]

Penton v Barnett [1898] 1 QB 276 …. [17.18], [18.6], [18.9] — v Robart (1801) 2 East 88; 102 ER 302 …. [10.5] — v — (1802) 2 East 88; 102 ER 302 …. [16.36] Pepper v District Council of Stirling [1948] SASR 344 …. [3.3] Peppercorn Holdings No 1 Pty Ltd v DDH Graham Ltd [2006] QSC 156 …. [14.4] Peppercorn Nominees Pty Ltd v Loizou (1997) V ConvR ¶54-560 …. [23.8], [23.19], [23.55] Perera v Vandiyar [1953] 1 All ER 1109; [1953] 1 WLR 672 …. [8.4], [13.15] Permanent Custodian Trustees v Payne [1964] NSWR 1098 …. [2.11] Perpetual Executors & Trustees Assn of Aust Ltd v England (1901) 27 VLR 443 …. [5.17] — v Russell (1931) 45 CLR 146; [1931] ALR 89 …. [4.3], [4.10] Perpetual Trustee Co Ltd v Crooks Michell Peacock Stewart Pty Ltd (1992) 5 BPR 97, 415 …. [6.7], [11.8] — v — (1994) …. [11.8] — v Morley (1968) 121 CLR 659 …. [1.10] — v Pacific Coal Co Pty Ltd (1953) 55 SR (NSW) 495 …. [11.1], [11.2] — v — (1955) 93 CLR 479 …. [11.1], [11.2] Perre v Apand (1999) 198 CLR 180 …. [10.1] Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 …. [4.1] Perri v Exego Pty Ltd [2009] NSWADT 170 …. [24.10] Perron Investments Pty Ltd v Assignment Holdings Pty Ltd [2005] WASCA 2 …. [26.10] Perry v Sidney Phillips & Son (a firm) [1982] 3 All ER 705; [1982] 1 WLR 1297 …. [10.13] Persey v Bazley [1983] 2 EGLR 3 …. [20.16] Persian Magic Carpets Pty Ltd v Ipoh Garden (Australia) Pty Ltd (1989) ATPR 40-935 …. [12.3]

Peter A Simon Real Estate Pty Ltd v Ghabash [2004] NSWCA 467 …. [10.13] Peters v Oscar Mayer Pty Ltd [1963] VR 390 …. [20.27] Petra Investments Ltd v Jeffrey Rogers PLC [2001] L&TR 451 …. [8.5] Philip Bernstein (Successors) Ltd v Lydiate Textiles (unreported), 26 June 1962 Court of Appeal (Civil Division) …. [10.13] Phillip Webb Pty Ltd v 483 Whitehorse Road Pty Ltd (VCAT, Deputy President Macnamara, 29 August 2006, unreported) …. [7.8], [23.18] Phillips v Mobil Oil Co Ltd [1989] 1 WLR 888 …. [15.20] — v Parnaby [1934] 2 KB 299 …. [23.18] — v Phillips (1861) 4 DeG F & J 208; 45 ER 1164 …. [6.8] Philpots (Woking) Ltd v Surrey Conveyancers Ltd [1986] …. [11.8] Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 …. [11.9], [15.1], [15.2], [15.18], [15.19] Pierson v Harvey (1885) 1 TLR 430 …. [17.18] Piggott v Middlesex County Council [1909] 1 Ch 134 …. [20.16] — v Seeberg (1949) 66 WN (NSW) 198 …. [20.20] Pike v Eyre (1829) 9 B & C 909; 109 ER 338 …. [16.3] Pimms Ltd v Tallow Chandlers Company [1964] 2 QB 547 …. [15.11], [15.13], [15.14], [26.8] Pincott v Moorstons Ltd [1938] 1 All ER 513 …. [15.3] Pinn v Barbour (1870) 1 VR (L) 136 …. [8.4], [13.3] Pioneer Concrete Services Ltd v Galli [1985] VR 675 …. [24.2], [26.2], [27.2] Pioneer Gravel (Qld) Pty Ltd v J & T Mining Corporation Pty Ltd [1975] Qd R 151 …. [19.1], [19.2] Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 …. [11.1], [17.12], [17.19], [18.3], [18.6], [19.1], [19.2], [19.4] — v — (1970) 2 BPR 97, 145 …. [19.2], [19.4]

Pirie v Saunders (1961) 104 CLR 149 …. [4.4] PJ Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88 …. [1.2] Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 …. [1.5], [4.8], [14.3] Planned Properties Ltd v Ramsdens Commercials Ltd (QB, Hutchinson J, 2 March 1984, unreported) …. [17.10] Plastic Enterprises Pty Ltd v The Southern Cross Assurance Company Ltd [1968] Qd R 401 …. [15.16] Platt v Ong [1972] VR 197; 46 ALJ 591 …. [7.14], [19.2], [19.4], [19.5] Players Pty Ltd v Clone Pty Ltd [2006] SASC 118 …. [4.1] Playgoers’ Cooperative Theatres Ltd v Workers Educational Association (NSW) (1955) 72 WN (NSW) 374 …. [3.8] Pleasant v Benson (1811) 14 East 234; 104 ER 590 …. [16.3] Plimmer v Mayor of Wellington (1884) 9 App Cas 699 …. [4.7] — v Wellington Corporation (1884) …. [1.15] Plomley v T K Steanes Ltd (1898) 19 LR (NSW) 215 …. [5.8] Plough Investments v Manchester City Council [1989] 1 EGLR 244 …. [10.7] Plummer v David [1920] 1 KB 326 …. [15.20], [17.12] Plummer & Adams v Needham (1954) 56 WALR 1 …. [24.2], [25.2], [23.18] Plummer & John v David [1920] 1 KB 326 …. [15.20], [16.3], [17.12] Plumrose Ltd v Real and Leaseholds Estates Investment Society Ltd [1970] 1 WLR 52 …. [6.5], [14.2] Plunkett v Dease (1846) 101 Eq R 124 …. [9.1] Plymouth Corporation v Harvey [1971] 1 WLR 549 …. [1.6], [15.10], [18.1], [18.4] Point Cook Community Entertainment Facility Pty Ltd v Geelong Football Club Ltd [2017] VSC 313 …. [6.4] Polgara Pty Ltd v Vision Wise Holdings Pty Ltd (1996) NSW ConvR ¶55781 …. [10.10], [14.1], [23.49]

— v — (SC(NSW), 11 March 1996, unreported) …. [23.50] Polleyket v Georgeson (1878) 4 VLR (Eq) 207 …. [4.7] Ponsford v HMS Aerosols Ltd [1979] AC 63 …. [11.1], [11.8] Poole v Warren (1838) 8 Ad & El 582; 112 ER 959 …. [17.17] Poole’s case (1703) 1 Salk 386; Holt KB 65; 90 FR 934 …. [10.5] Poort v Development Underwriting (Victoria) Pty Ltd (No 2) [1977] VR 454 …. [16.27] Poppett’s (Caterers) Ltd v Maidenhead Corp [1971] 1 WLR 69 …. [5.8] Port Sudan Cotton Co v Govindaswamy Chettiar & Sons [1977] 2 Lloyd’s Rep 5 …. [6.6] Port v Griffith [1938] 1 All ER 295 …. [8.5] Porter v Busch [1974] 1 NSWLR 593 …. [3.4] — v Hannah Builders Pty Ltd [1969] VR 673 …. [3.8] — v Williams (1914) 14 SR (NSW) 83 …. [2.5] Post Office v Aquarius Properties Ltd [1985] 2 EGLR 105 …. [10.8] — v — [1987] 1 EGLR 40 …. [10.8] Potter v Inland Revenue Commissioners (1854) 10 Exch 147; 156 ER 392 …. [24.5], [25.5], [27.5] Poulter v Bigham [1955] VLR 326 …. [15.12], [15.13] Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) (2017) 18 BPR 36,615 …. [10.5] Prasad v Fairfield City Council [2000] NSWADT 164 …. [24.20] Prebble v Reeves [1910] VLR 88 …. [5.17] Precious v Reedie [1924] 2 KB 149; [1924] All ER Rep 573 …. [20.2], [20.3] Precision Street Industrial Property Pty Ltd, Re [1994] 2 Qd R 614 …. [10.1], [16.6] Premier Confectionery (London) Co Ltd v London Commercial Sale Rooms Ltd [1933] Ch 904 …. [15.14] Premier Permanent Building Society, Re (1890) 16 VLR 643 …. [5.9]

Prenn v Simmonds [1971] 1 WLR 1381 …. [6.5] Prestige Land Developments Pty Ltd v Eagle Hotels Pty Ltd (1996) NSW ConvR ¶55-764 …. [6.8] Price v Mayman [1948] SASR 241 …. [17.9], [17.10] — v Murray [1970] VR 782 …. [12.3], [14.8], [15.1], [15.20] — v Strange [1978] Ch 337 …. [10.13] — v Williams (1836) 1 M & W 6; 150 ER 323 …. [13.3] — v Worwood (1859) 4 H & N 512; 157 ER 941 …. [17.18] Prideaux v Director of Prosecutions (Vic) (1987) 61 ALJR 600 …. [21.3] Primary RE Ltd v Great Southern Property Holdings Ltd [2011] VSC 242 …. [18.2], [18.6] Pritchard v Briggs [1980] Ch 338 …. [14.1], [14.4] Proctor v Milton (1987) NSW ConvR ¶56-959 …. [3.8] Profile Events Pty Ltd v West Beach Trust [2010] SADC 52 …. [27.7] — v — [2011] SASCFC 1 …. [27.7] Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; 57 ALR 609; 59 ALJR 373 …. [1.2], [1.6], [2.8], [4.1], [4.8], [10.13], [11.1], [11.3], [11.17], [13.4], [13.15], [14.1], [16.1], [16.11], [16.21], [16.26], [16.27], [16.28], [16.30], [16.31], [16.35], [17.6], [17.7], [17.8], [17.12], [17.22], [19.2], [20.6], [23.11], [23.63], [23.64] Project Blue Moon Pty Ltd v Fairway Trading Pty Ltd [2000] FCA 127 …. [8.5] Propert v Parker (1832) 3 Myl & K 280; 40 ER 107 …. [9.1] Property Holding Co Ltd v Clark [1948] KB 630 …. [11.1] Proudfoot v Hart (1890) 25 QBD 42; [1886–90] All ER Rep 782 …. [10.8], [10.10], [23.54] Provident Capital Ltd v Zone Developments Pty Ltd (2002) 10 BPR 19,133 …. [15.9] Provident Life Assurance Co Ltd v Official Assignee [1963] …. [23.18], [24.2], [25.2] Province of Bombay v Municipal Corporation of Bombay [1947] AC 58 ….

[24.2], [25.2] Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 …. [14.8] — v London Residuary Body [1992] 2 AC 386 …. [1.2], [1.3], [1.5], [1.12], [2.1], [2.2], [2.7], [2.8], [2.13], [2.19] Psaltis v Collins [1961] NSWR 375; (1960) 78 WN (NSW) 424 …. [3.4] PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 …. [24.6] Public Curator v L A Wilkinson (Northern) Ltd [1933] QWN 28 …. [17.17] Public Trustee v Westbrook [1965] 1 WLR 1160 …. [19.5], [19.6] Pukallus v Cameron (1982) 180 CLR 447; 56 ALJR 907 …. [6.8] Pulteney v Shelton (1799) 5 Ves 260n; 31 ER 576 …. [20.27] Purbrick v Rybar [1951] VLR 275 …. [3.4] PW & Milton Gate Investments (BT Property, Pt 20 defendants) [2004] 2 WLR 443 …. [16.3], [17.16] Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170; (2016) 18 BPR 35,741 …. [24.2] Quadling v Robinson (1976) 137 CLR 192 …. [14.1], [14.8] Quadramain Pty Ltd v Sevastapol Investments Pty Ltd (1976) 133 CLR 390 …. [7.8], [12.2] Quan Hong Le v Victoria Investments and Property Pty Ltd (SC(Vic), unreported, Beach J, 9 February 1999) …. [19.1] Quartermaine v McCleery [1947] VLR 412 …. [20.5] Queen’s Club Gardens Estates Ltd v Bignell [1924] 1 KB 117; [1923] All ER Rep 165 …. [20.3] Queensland Electricity Generating Board, The v New Hope Collieries Pty Ltd (1989) 1 Ll Rep 205 …. [4.8] Queensland Television Ltd v Federal Commissioner of Taxation (1969) 119 CLR 167; 1 ATR 419 …. [1.10], [2.11], [5.7] Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 83 ALR 577 …. [26.10]

Quick v Taff-Ely Borough Council [1986] QB 809 …. [10.8] Quilter v Mapleson (1882) 9 QBD 672 …. [19.4] Quinlan v Avis (1933) 149 LT 214 …. [1.6] Quinney v United Stevedoring Pty Ltd [1957] VR 484 …. [20.18] Quirk v Commonwealth (1995) …. [11.4] R & A Dalley & Co Pty Ltd v Giex Pty Ltd (1991) …. [11.8], [11.20] R & C Mazzei Nominees Pty Ltd v Aegean Food Import Export Pty Ltd [2006] VSC 210 …. [23.36], [23.40] R & H Australia Pty Ltd v Salta Constructions Pty Ltd (1993) …. [11.5] R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 …. [7.4] R v Aylesbury (Inhabitants) (1846) NSWSC 232; 115 ER 1273 …. [7.16] — v Barnet Rent Tribunal; Ex parte Millman [1950] 2 KB 506 …. [24.5], [25.5], [26.4] — v Chief Immigration Officer (1973) 1 WLR 141 …. [14.8] — v Chipping-Norton (1804) 5 East 239; 102 ER 1061 …. [5.8] — v Credit Tribunal; Ex parte General Motors Acceptance Corporation, Australia (1977) …. [12.16] — v Dale [1906] VLR 662 …. [5.6] — v Everist (1847) …. [11.1] — v Heron (1884) 10 VLR (L) 314 …. [20.27] — v Kotzmann [1999] 2 VR 123 …. [10.13] — v Licensing Court of Brisbane; Ex parte Daniell (1920) …. [12.16] — v Loewenthal; Ex parte Blacklock (1974) …. [12.16] — v Mountford [1972] 1 QB 28; [1971] 2 WLR 1106 …. [21.3] — v Paulson [1921] 1 AC 271; [1918–23] All ER Rep Ext 809 …. [17.18] — v Registrar of Titles …. [11.1] — v Registrar of Titles; Ex parte Commonwealth (1915) 20 CLR 379; 21 ALR 435 …. [1.12], [5.8]

— v Robinson [1971] 1 QB 156; [1970] 3 All ER 369 …. [21.3] — v Slator (1881) 8 QBD 267 …. [7.14] — v St Martin-in-the-Fields [1842] 3 QB 204 …. [1.12] — v Templeton (1873) 4 AJR 20 …. [21.3] — v Tottenham and District Rent Tribunal; Ex parte Northfield (Highgate) Ltd [1957] 1 QB 103; [1956] 2 All ER 863 …. [15.1], [15.19] — v Victorian Licensing Court; Ex parte Beggs [1964] VR 48 …. [16.4] — v Westbrook; R v Everist (1847) 10 QB 178; 116 ER 69 …. [11.1] — v Young (1999) 8 VLR (Eq) 93 …. [11.8] Radaich v Smith (1959) 101 CLR 209; [1959] ALR 1253 …. [1.2], [1.3], [1.4], [1.12], [3.4], [24.2], [25.2], [26.2], [27.2], [28.2] Radford v De Froberville [1978] 1 All ER 33; [1977] 1 WLR 1262 …. [10.13] Radio Theatres Pty Ltd v City of Coburg [1948] VLR 84 …. [1.3], [3.3] Rae v Clifford (1893) NZLR 257 …. [2.13], [5.18] Raffaele v Raffaele [1962] WAR 238 …. [1.15] Raffety v Schofield [1897] 1 Ch 637 …. [14.6] RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; 112 ALR 511; ATPR 41-225 …. [12.9], [24.3], [25.13], [26.3], [28.3] Rainham Chemical Works Ltd v Belvedere Fish Guano Co Ltd [1921] 2 AC 465 …. [15.3] Rainbow Estates Ltd v Tokenhold Ltd [1999] Ch 64 …. [10.13] Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900; [2012] 1 All ER 1137; [2011] UKSC 50 …. [6.4] Rakay v MacFarlane [1961] NSWR 1121; (1960) 78 WN (NSW) 488 …. [18.7] Rakita’s Application, Re [1971] Qd R 59 …. [12.3], [15.1], [15.20] Raleigh v Cooks Corner Kallista Pty Ltd (2008) …. [23.45], [23.46] Raleigh v Cooks Corner Kallista Pty Ltd (VCAT, Deputy President

Macnamara, 21 February 2008) …. [23.44], [23.45] Ramage v Womack [1900] 1 QB 116 …. [5.17] Ramsbottom v Snelson [1948] 1 All ER 201; [1948] 1 KB 473 …. [3.9] Ramsden v Dyson (1866) LR 1 HL 129 …. [1.15], [4.7] Randall v Lynch (1810) 12 East 179 …. [7.1] Randazzo v Goulding [1968] Qd R 433 …. [14.3] Randi Wixs Pty Ltd v Pokana Pty Ltd (No 2) [2003] NSWADT 4 …. [24.3] Rands v Clark (1870) 19 WR 48 …. [17.17] Rangatira Pty Ltd v Viola Hallam Ltd [1957] NZLR 1188 …. [5.10] Rankin v Danby (1883) 9 VLR (L) 278 …. [15.19] Ratcliffe v Evans [1892] 2 QB 524 …. [13.15] Rathborne v Gandali [1970] 1 NSWR 297 …. [16.19] Ratto v Trifid Pty Ltd [1987] WAR 237 …. [1.6], [4.2], [4.3], [4.5] Raven Financial Group Pty Ltd v 52nd Wayre Pty Ltd (VCAT, M F Macnamara, Deputy President, 3 April 2000, unreported) …. [23.40] Raven v Mc Shorp Pty Ltd (1996) Q ConvR ¶54-474 …. [13.15] Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1980] QB 12 …. [10.8] Ravenseft Properties Pty Ltd v Hall [2002] EG 126 …. [20.20] Rawcliffe v Johnstone and Morton [1921] NZLR 470 …. [5.17] Rawlins v Turner (1699) 1 Ld Raym 736; 91 ER 1392 …. [1.6] Rawlinson v Ames [1925] Ch 96 …. [4.7] — v Marriott (1867) 16 LT 207 …. [17.17] Rawson v Hobbs (1961) 107 CLR 466 …. [16.30] — v Samuel (1841) 41 ER 451 …. [7.4] Raymond v Cook [1958] 3 All ER 407; [1958] 1 WLR 1098 …. [7.14] Raywall Pty Ltd v Calho Pty Ltd (2007) ANZ ConvR 562 …. [14.9] Read, Re [1971] …. [17.18] Reardon-Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989; [1976] 3 All ER 570 …. [6.4], [6.5]

Redden v Wilks and the Registrar of Titles [1979] WAR 161 …. [1.6] Redder Than Red Tomato Co Pty Ltd v AB & SM Rawlings Pty Ltd [1999] SASC 30 …. [1.15] Rede v Farr (1817) 6 M & S 121; 105 ER 1188 …. [17.4] Rederiaktiebolaget Amphitrite v The King [1921] 3 KB 500 …. [5.6] Redman v Permanent Trustee Co of NSW Ltd (1916) 22 CLR 84 …. [4.8] Reed Executive plc v Reed Business Information Ltd [2004] 4 All ER 942 …. [23.59], [23.62] Reed v Sheehan (1982) 56 FLR 206 …. [14.1], [14.6], [14.9] Reeves v Diffin (1964) 82 WN (Pt 1) (NSW) 93 …. [20.14] — v Pope [1914] 2 KB 284 …. [7.4], [15.20] Regent Oil Co Ltd v J A Gregory (Hatch End) Ltd [1965] …. [1.14] Regent v Millett (1976) 133 CLR 679 …. [4.5] Regis Property Co Ltd v Dudley [1959] AC 370; [1958] 3 All ER 491 …. [8.7], [10.2], [10.3], [10.11] Regis Towers Real Estate Pty Ltd v Fung (2001) NSW ConvR ¶55-960 …. [13.11] Register, Re; Ex parte Official Assignee [1958] NZLR 1050 …. [17.9] Registrar of Titles v Spencer (1909) 9 CLR 641 …. [10.5] — v — (1910) 9 CLR 641 …. [10.5] Regor Estates Ltd v Wright [1951] 1 KB 689 …. [11.1], [11.2] Reid v Blagrave (1831) 9 LJ (OS) Ch 245 …. [14.11] — v Hipkiss (2001) 10 BPR 19,305 …. [7.4], [11.3] Reihana Terekuku v Kidd [1885] NZLR 4 SC 140 …. [10.3] Reilly v Liangis Investments Pty Ltd (2000) BPR 17,509 …. [14.6] Reinforcement Scheduling Pty Ltd (t/as Camelot Receptions) v 1736 Dandenong Road Pty Ltd [2004] 10 BPR 19,305; [2004] VCAT 1349 …. [7.8], [23.18] Reinsurance Co Ltd v Fagan [1997] AC 313 …. [6.4] Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362 ….

[10.6] Relvok Properties v Dixon (1973) 25 P & CR 1 …. [11.17], [16.18] Rember Pty Ltd v Western Glade Pty Ltd (30 July 1997) …. [15.9] Remon v City of London Real Property Co [1921] 1 KB 49; [1918–23] All ER Rep Ext 803 …. [20.20] Rendall v Andreae (1892) 61 LJQB 630 …. [5.18], [16.25] Renshaw v Maher [1907] VLR 520 …. [15.19] — v Moore (1917) 34 WN (NSW) 95 …. [8.4] Rental Bond Board v Bayman Development Pty Ltd (1985) 3 BPR 9670 …. [3.3] Reporoa Stores Ltd v Treloar [1958] NZLR 177 …. [14.8] Retail Parks Investments Ltd v Royal Bank of Scotland plc (No 2) (1996) 10 BPR 19,305 …. [7.8] Retail Tenancies Award No 3 (1992) V ConvR ¶58-512 …. [23.43], [23.47] Retail Tenancies Award No 9 [1994] V ConvR ¶58-518 …. [24.2], [25.2] Retail Tenancies Award No 13 (1995) V ConvR ¶58-522 …. [23.30] Retail Tenancies Award No 14 — Farley Bay Pty Ltd v Thomas (1996) V ConvR ¶58-523 …. [7.8] Rethmeier v Pioneer House Pty Ltd (1990) 6 BPR 97,450 …. [14.6] Returned Sailors, etc League v Abbott [1946] SASR 270 …. [10.8] Rexdale Investments Ltd and Gibson, Re [1967] 1 OR 251 …. [19.4] Reynolds, Re (1909) 10 SR (NSW) 109 …. [5.17] — v Pitt (1812) 19 Ves Jun 140 …. [19.1] Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 All ER 1161; [1989] 1 WLR 800 …. [5.10], [15.1], [16.11] Rhone v Stephens [1994] 2 AC 310 …. [15.18], [15.19] Rhyl Urban District Council v Rhyl Amusements Board [1959] 1 WLR 465 …. [5.8] Rialta Pty Ltd v Handbags International Pty Ltd (1993) V ConvR ¶58-469 …. [1.4], [23.16]

Rice v Rice (1853) 2 Drew 73; 61 ER 646 …. [1.15] Richard Clarke & Co Ltd v Widnall [1976] 1 WLR 845; 3 All ER 301 …. [17.1], [18.1], [19.2] Richards v De Freitas (1974) 29 P & CR 1 …. [11.3], [17.18] Richardson, Re [1911] 2 KB 705 …. [5.17] — v Kearton (1882) 8 VLR (E) 201 …. [14.8] — v Landecker (1950) 50 SR (NSW) 250; 67 WN 149 …. [1.4], [1.6], [1.9], [4.3], [15.1], [16.3] — v Lockevo Pty Ltd [2010] NSWADT 305 …. [24.10] — v Somas [1967] WAR 109 …. [15.8], [15.13], [15.16], [17.18] Richmond v Morse (2004) V ConvR ¶58-573; [2003] VCAT 505 …. [23.40] — v Savill [1926] 2 KB 530; [1926] All ER Rep 362 …. [16.22] Richmond Football Club v Verrarty Pty Ltd [2011] VCAT 2104 …. [23.45], [23.46] Rickett v Green [1910] 1 KB 253 …. [1.14] Ricketts v Enfield Church Wardens [1909] 1 Ch 544 …. [12.3], [15.20] Riddington v Pye (1989) BPR 16,643 …. [19.2] Rider v Ford [1923] 1 Ch 541; [1923] All ER Rep 562 …. [14.9] Ridley v De Geerts [1945] 2 All ER 654 …. [13.4] Rigg v Lee Loy Seng [1987] WAR 333 …. [16.30] Riggs, Re [1901] 2 KB 16 …. [7.12], [15.16], [18.4] Riggs, Re; Ex parte Lovell [1901] 2 KB 16 …. [19.6] Right d Fischer v Cuthell (1804) 5 East 491; 102 ER 1158 …. [20.9] — v Darby (1786) 99 ER 1029 …. [2.3] Riley (Inspector of Taxes) v Coglan [1967] 1 WLR 1300 …. [6.5] Riltang Pty Ltd v L Pty Ltd (2004) 12 BPR 22,347 …. [14.8] Ring v RW & CD Investments Pty Ltd [2004] NSWC 1045 …. [14.10] Ripka Pty Ltd v Maggiore Bakeries Pty Ltd [1984] VR 629 …. [6.10], [16.28], [16.29]

Rippon v Chilcotin (2001) 53 NSWLR 198 …. [23.62] Riverlate Properties Ltd v Paul [1975] Ch 133; [1974] 2 All ER 656 …. [6.8] Riverside Property Investments Ltd v Blackhawk Automotive [2005] 1 EG 94 …. [10.8] Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd Receiver & Manager Appointed (Formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462 …. [16.30] Robert John Pty Ltd, Ex parte; Fostars Shoes Pty Ltd, Re [1963] NSWR 419; [1963] SR (NSW) 260 …. [1.3], [1.4] Robert MC Brown & Partners Pty Ltd v Permanent Trustee Co Ltd [1996] …. [11.8] Robert Stephenson and Co Ltd, Re [1915] 1 Ch 802; [1914–15] All ER Rep 1107 …. [15.19] Robert v Besford [1990] V ConvR ¶54-383 …. [25.2] Roberts v Birkley (1888) 14 VLR 819 …. [1.6], [8.4], [14.1] — v Church Commissioners for England [1972] 1 QB 278; [1971] 3 All ER 703 …. [1.10], [19.6] — v Davey (1833) 4 B & Ad 664; 110 ER 606; [1824–34] All ER Rep 290 …. [17.4], [17.7], [17.10] — v Ghulam Nabie (1911) 2 KB 16 …. [7.2] Robertson v Lagreg Investments Pty Ltd [2004] VSC 86 …. [14.4] — v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29 …. 4.2 — v Wilson (1958) 75 WN (NSW) 503 …. [6.10] Robinson v Day (1992) 106 FLR 423 …. [6.5] — v Harman (1848) 1 Exch 850; 154 ER 363 …. [10.13], [13.4], [13.15], [16.30] — v Hudson (1950) 68 WN (NSW) 9 …. [6.6], [15.2] — v Kilvert (1889) 41 Ch D 88 …. [8.5] — v Kingsmill (1954) 71 WN (NSW) 127 …. [16.11], [16.14], [16.17], [16.18] — v Learoyd (1840) 7 M & W 48; 151 ER 673 …. [17.17]

— v Young [2005] NSWSC 777 …. [4.8], [6.8] Robyn Toogood Real Estate Pty Ltd v Healey [2008] …. [23.15] Roche v Norman; Ex parte Norman [1958] QWN 11 …. [20.21] Rock Bottom Fashion Market Pty Ltd (in liq) v HR & CE Griffiths Pty Ltd [1997] …. [25.11] — v HR & CE Griffiths Pty Ltd [1998] ANZ ConvR 549; (1998) Q ConvR ¶54-505 …. [17.17] Rock Freehold Land Co v Cunliffe (1894) …. [11.28] Rodenhurst Estates Ltd v W H Barnes Ltd [1936] 2 All ER 3 …. [1.15], [15.17] Roe d Bendall v Summerset (1770) 2 Wm Bl 692; 96 ER 407 …. [5.18] Roe d Blair v Street (1834) 2 Ad & El 329; 111 ER 127 …. [20.27] Roe d Dean of Rochester v Pierce (1809) Camp 96; 170 ER 1093 …. [20.11], [20.13] Roebuck v Mungovin [1994] 1 All ER 568 …. [1.15] Rogers v Fry [1930] VLR 134 …. [22.3] — v Hosegood [1900] 2 Ch 388 …. [12.3], [15.20] — v Moonta Town Corporation (1981) 37 ALR 49 …. [23.63] — v Rice [1892] …. [19.4], [19.6] — v Ventura [1955] VLR 139 …. [5.15] Rogowski v Bedelis Investments (2001) V ConvR ¶58-562 …. [23.12], [23.35], [23.57] Rojain Pty Ltd v Ambrose [1986] VR 449 …. [3.8], [15.17] Rom Securities Ltd v Rogers (Holdings) Ltd (1967) 205 EG 427 …. [4.1] Romulus Trading Co Ltd v Comet Properties Ltd [1996] EGLR 70 …. [8.5] Rooney, Ex parte (1873) 11 SCR (NSW) 381 …. [3.9] Roos v Pilgrim (1951) 51 SR (NSW) 174 …. [16.20] Roquin Office Services Pty Ltd v Tingdale Pty Ltd (1997) …. [12.9] Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 …. [16.30], [17.7], [17.9], [17.10], [20.1], [22.3]

Rose v Hyman [1911] …. [19.4] — v Spicer [1911]; Rose v Hyman [1911] 2 KB 234 …. [19.4], [19.5] Roseburn Pty Ltd v Eastride Pty Ltd [2009] QSC 159 …. [25.5] Ross (Earl) v Worsop [1740] 1 Bro Parl Cas 281; 1 ER 568 …. [14.11] Ross T Smyth & Co Ltd v T D Bailey, Son & Co (1940) 3 All ER 60 …. [16.33], [16.34] Ross v Robinson (1886) 12 VLR 764 …. [13.4] Rosser v Austral Wine & Spirit Co Pty Ltd [1980] …. [4.5] Ross-Hart Pty Ltd v Cianjan Pty Ltd [2009] VCAT 829 …. [23.12] Rossiter v Miller (1878) 3 App Cas 1124 …. [4.1] Rotorua and Bay of Plenty Hunt Club v Baker [1941] NZLR 669 …. [5.13] Rourke v Victorian Finance etc Co Ltd (1894) 20 VLR 8 …. [20.14] Rous v Mitchell [1991] 1 WLR 469 …. [18.6], [20.1] Rousset v Antunovich [1963] WAR 52 …. [5.17] Rowand v Equity Trustees Executors & Agency Co Ltd (1896) 22 VLR 1 …. [5.17], [5.18] Rowlands v Producers and Citizens Co-operative Assurance Co Ltd (1950) 51 SR (NSW) 164 …. [3.5] Rowley v Ginnever [1897] 2 Ch 503 …. [14.8] Rowston v Sydney County Council (1954) 92 CLR 605; 71 WN (NSW) 190 …. [2.11], [20.2], [20.5] Roxburghe v Cox (1881) 17 Ch D 520 …. [7.4] Royal Bank of Canada v Oram, Rowberry and Hoggard (1978) 1 WWR 564 …. [6.8] Royal Bank of Scotland plc v Jennings [1997] …. [11.5], [11.7] Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; 186 ALR 289; [2002] ANZ ConvR 192 …. [6.5], [23.62] Royal British Bank v Turquand (1856) 6 E & B 327; 119 ER 886 …. [5.8] Royal Philanthropic Society v County [1985] 2 EGLR 109 …. [3.5]

Ruby v Marsh (1975) 132 CLR 642 …. [16.32] Ruffy Investments v Payless Superbarn [1999] VSC 458 …. [13.11] Rugby School v Tannahill [1934] All ER Rep 187; [1935] 1 KB 87 …. [18.7] — v —; Dunraven Securities Ltd v Holloway [1982] 2 EGLR 47 …. [18.7] Rush v Matthews [1926] KB 492 …. [11.2] Russell Cowan Pty Ltd v Bussell (1956) 56 SR (NSW) 300 …. [20.15] Russell v Beecham [1924] 17 Ch D 520; [1924] 1 KB 525; [1923] All ER Rep 318 …. [7.2], [15.16] — v Parkinson (1869) 6 WW & a’B (L) 264 …. [17.18] Russfam Pty Ltd v Benassi’s Shoes Pty Ltd (1999) V ConvR ¶58-533 …. [23.12] Ruxley Electronics and Constructions Ltd v Forsyth [1994] 3 All ER 801; [1994] 1 WLR 650 …. [10.13] — v — [1996] 1 AC 344 …. [10.13] Ryal v Rich (1808) 10 East 48; 103 ER 693 …. [17.17] Ryan v Clarke (1849) 14 QB 65 …. [1.16] — v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 …. [6.6] Ryde Joinery Pty Ltd (Administrators appointed) v Zisti (1997) 7 BPR 15,233 …. [15.20] Rye v Rye [1962] AC 496; [1962] 1 All ER 146 …. [1.2], [5.14], [16.8] Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65 …. [6.5] Ryley v Hicks (1725) 1 Str 651; 93 ER 760 …. [1.6], [4.3] S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 …. [1.15], [4.8], [13.1], [14.6], [19.1] S Kaprow & Co Ltd v Maclelland & Co Ltd [1948] 1 KB 618 …. [16.30] S&A Gallo Pty Ltd v Hollowood Pty Ltd [2012] SASC 176 …. [27.12] Saade v Vergados [1996] NSWCA 463 …. [16.30] Sabelberg v Scott (1879) 5 VLR (L) 414 …. [16.21]

Sabri v Selby [2004] NSWADT 252 …. [24.20] Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 …. [15.20], [16.30] Sackville v Mansard Developments Pty Ltd (1981) …. [12.12] St Martins House Pty Ltd v Law Society of NSW (1983) …. [11.6] St Marylebone Property Co Ltd v Fairweather [1963] …. [16.3], [16.11], [16.14] Sale v Kitchingham (1713) 88 ER 673 …. [15.19] Saloma Pty Ltd v Big Country Developments Pty Ltd (1997) …. [11.9] Samios v Petersilka (1993) 113 FLR 63 …. [20.2], [20.5], [20.7] Sampson v Easterby (1829) 9 B & C 505 …. [7.1] — v Floyd (1989) 10 CL 229; 33 EG 41 …. [13.15], [16.34] — v Hodson Pressinger [1981] 3 All ER 710 …. [7.14], [8.4] — v Hodson-Pressinger (1984) 12 HLR 40; (1982) 261 EG 891 …. [13.15] Samrose Properties Ltd v Gibbard [1958] 1 WLR 235 …. [11.2] Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1064 …. [14.6], [14.11] — v — [1972] 1 WLR 1296 …. [11.6], [14.6], [14.8], [14.11] Samuel v Salmon & Gluckstein Ltd [1946] Ch 8 …. [11.1] Sanar v Bilton [1878] 1 Ch D 815 …. [10.10] Sanctuary Lakes Real Estate Pty Ltd v Sanctuary Lakes Centre Pty Ltd [2007] VCAT 2292 …. [23.18], [23.58] Sanders v Cooper [1974] WAR 129 …. [11.13], [11.28], [14.8] — v Wadham (1870) 4 SALR 73 …. [17.5], [17.6] Sanderson v Mayor of Berwick-on-Tweed (1884) 13 QBD 547 …. [8.4] Sandher v Ferizis (1994) …. [11.20] Sandhurst & Northern District Trustees v Canavan [1908] VLR 373 …. [17.10], [17.14], [19.3] Sandhurst Mutual Permanent Investment Building Society v Gissing (1889) 15 VLR 329 …. [2.17]

Sandhurst Trustees Ltd v Australian Country Cinemas Pty Ltd [2006] QSC 165 …. [14.4] Saner v Bilton (1878) 7 Ch D 815; [1874–80] All ER Rep Ext 1586 …. [10.7], [10.8] Sangora Holdings Pty Ltd v Jones (1996) …. [11.28] Sangster v Noy (1867) 16 LT 157 …. [20.27] Sanwa Australia Leasing Ltd v National Westminster Finance Australia (1989) NSW ConvR 55-437 …. [10.5] Sapphire Salon (Vic) Pty Ltd v Causeway House Pty Ltd (1989) V ConvR ¶54-333 …. [20.5] Saratoga Australia Pty Ltd v Vision Australia Ltd [2007] VCAT 1902 …. [23.13] Sargent v ASL Developments Ltd (1974) 131 CLR 634; 4 ALR 257 …. [16.30], [16.31], [16.34] Sarson v Roberts [1895] 2 QB 395 …. [8.6] Sassoon & Sons Ltd v International Banking Corp [1927] AC 711 …. [6.5] Satellite Estate Pty Ltd v Jaquet (1968) 71 SR (NSW) 126 …. [16.34] Saunderton Glebe Land, Re [1903] 1 Ch 480 …. [7.14] Sauter v Sangster (1950) 68 WN (NSW) 74 …. [3.4] Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665 …. [10.12] Savile Settled Estates, Re [1931] 2 Ch 210; [1931] All ER Rep 556 …. [16.19] Savva v Houssein [1996] 47 EG 138 …. [18.7] Sawyer & Withall, Re [1919] 2 Ch 333 …. [1.12], [11.1] Say v Smith (1530) 1 Plowd 269; 75 ER 410 …. [1.2] Scala House and District Property Co Ltd v Forbes [1974] QB 575; [1973] 3 All ER 308 …. [18.7] — v — [1974] …. [15.2], [15.16], [18.7] Scammell & Nephew Ltd v Ouston [1941] AC 251 …. [7.16]

Scandi International Pty Ltd v Varga Group Investment (No 8) Pty Ltd [2001] NSWSC 21 …. [1.15] Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169 …. [6.10] Scanlon v Campbell (1911) 11 SR (NSW) 239 …. [17.21] Scarcella v Linknarf Management Pty Ltd [2004] NSWSC 1168 …. [16.28] — v — (2005) NSW ConvR 56-106 …. [15.9] Scarf v Jardine (1882) 7 AC 345; 7 App Cas 345 …. [16.30], [17.18] Schalit v Joseph Nadler Ltd [1933] …. [20.8] — v Nadler Ltd [1933] 2 KB 79; [1933] All ER Rep 708 …. [15.19] Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834 …. [6.4] Schilling v Riley [1946] VLR 73 …. [16.28] Schmit v Christy [1922] 2 KB 60 …. [16.19] Schnabel v Allard [1967] 1 QB 627; [1966] 3 All ER 816 …. [20.4], [20.5] Schnitzel World Pty Ltd v Yung Chon Pty Ltd [2010] QCAT 474 …. [25.6] Scientific Management Associates (Aust) Pty Ltd v Australian Capital Territory [1999] …. [11.28] Scott & Sally Dixon Investment Co Pty Ltd (in liq) and Ors v Woakwine Industries Pty Ltd [2002] SASC 161 …. [10.5] Scott v Commr of Stamp Duties [1939] NZLR 293 …. [11.1] — v Matthew Brown & Co (1884) 51 LT 746 …. [19.5] — v Skinner [1947] NZLR 528 …. [14.4] — v Windsor Holdings Pty Ltd (1986) ATPR 40-737 …. [12.9] Scruby v Hoggan (1954) 55 SR (NSW) 2 …. [20.8] SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd (1996) V ConvR ¶54538 …. [15.20] — v — [1998] 2 VR 90 …. [7.4] — v — (1999) 196 CLR 245 …. [5.16] — v Ponti’s Enterprises Pty Ltd [1999] VSC 190 …. [19.1], [19.3] Seabrook v McMullan (1908) 10 WALR 47 …. [15.16], [15.19]

Seacrest Pty Ltd v Apriaden Pty Ltd (2000) V ConvR ¶54-625 …. [23.30], [23.31] Searl v South British Insurance Co [1916] NZLR 137 …. [10.1] Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264 …. [15.5], [15.16], [26.8], [27.16] Secured Income Real Estate (Australia) Limited v St Martins Investments Pty Ltd (1979) 144 CLR 596; 26 ALR 567 …. [6.6], [6.9], [15.11], [15.12], [15.13], [15.14] SEDAC Investments Ltd v Tanner [1982] 1 WLR 1342 …. [18.6] Seers v Hind (1791) 1 Ves Jun 294; 30 ER 351 …. [15.16] Segal Securities Ltd v Thoseby [1963]] 1 QB 887; 1 All ER 500 …. [17.18] Seguin v Anglican Church Property Trust Diocese of Sydney (No 1) [2004] NSWADT 146 …. [24.2] Seka Pty Ltd (in prov liq) v Fabric Dyeworks (Aust) Pty Ltd (1991) 28 FCR 574 …. [16.36] Sellars v Adelaide Petroleum (1994) 179 CLR 332 …. [10.13] Selous Street Properties Ltd v Oronel Fabrics Ltd (1984) 1 EGLR 50 …. [11.9], [15.18] — v — (1985) The Times, 3 March …. [15.18] Selsey v Rhoades (1824) 2 S & S 41; 57 ER 260 …. [5.13] Selwyn v Garfit (1888) 38 Ch D 273 …. [17.18] Serbian Orthodox Ecclesiastic School Community v Vlaislavljevic [1970] Qd R 386 …. [22.3] Serene Hotels Pty Ltd v Epping Hotels Pty Ltd [2015] VSCA 228 …. [23.40] Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525 …. [17.4], [17.7], [17.9], [17.10], [17.12], [17.13], [19.6] Service Station Association Limited v Berg Bennett and Associates Pty Ltd (1993) 117 ALR 393 …. [23.62] Setena Pty Ltd v Permanent Trustee Nominees (Canberra) Ltd (1987) NSW ConvR ¶55-322 …. [14.8] Sewell v Donald & Sons Ltd [1917] NZLR 408 …. [20.21]

Shaltock v Harston (1875) 1 CPD 106 …. [1.14] Sharjade v Commonwealth (2010) 15 BPR 28,443 …. [18.2] Sharma v The Magistrates’ Court of Victoria (SC(Vic), unreported, Beach J, 18 December 1995) …. [19.2] Sharman v McIntosh (1951) 68 WN (NSW) 16 …. [3.8] Sharp v Milligan (1856) 22 Beav 606; 52 ER 1242 …. [5.12] — v — (No 2) (1857) …. [9.3] — v O’Driscoll (1997) …. [23.18] — v Union Trustee Co of Australia Ltd (1944) 69 CLR 539 …. [14.8] Shaw v Groom [1970] 2 QB 504; 1 All ER 702 …. [6.9], [11.18] — v Kay (1847) 1 Ex 412; 154 ER 175 …. [1.5], [1.10] — v Port [1953] VLR 386 …. [15.17], [16.13] Shaw’s Trusts, Re (1871) LR 12 Eq 124 …. [5.17] Sheill v Symonds [1951] SASR 82 …. [6.10] Shell Co of Australia Ltd v Lang Estate Pty Ltd [1975] 2 NSWLR 63 …. [7.16] — v Zanelli [1973] 1 NSWLR 216 …. [16.9] Shell-Mex and BP Ltd v Manchester Garages Ltd [1971] 1 All ER 481; [1971] 1 WLR 612 …. [1.4], [3.6] Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 …. [16.30] — v Lomas [1963] 2 All ER 902; [1963] 1 WLR 962 …. [18.6] Sheppard v Hong Kong and Shanghai Banking Corp (1872) 20 WR 459 …. [15.9], [15.13] Sheralex Nominees Pty Ltd v Johnson Taylor & Co Pty Ltd (1994) …. [11.5] Sherwood v Tucker (1924) 2 Ch 440 …. [14.1] Shevill v Builders Licensing Board (1982) 147 CLR 620; 42 ALR 305 …. [1.2], [6.10], [16.26], [16.28], [16.29], [16.35], [17.6], [23.64], [23.65] Shiell v Symons [1951] SASR 82 …. [6.10] Shiloh Spinners Ltd v Harding [1973] AC 691; [1973] 2 WLR 28 …. [3.8], [14.11], [15.20], [17.19], [19.1], [19.2], [19.4], [19.5]

Shirlcar Properties Ltd v Heinitz [1983] …. [11.9] Shore v Wilson (1842) 9 Cl & F 355 …. [6.6] Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 …. [1.6], [4.3], [11.8], [14.8], [15.20] Shree Sai Charan Pty Ltd v North Indian Flavour (Broadway) Pty Ltd and Bobby Singh [2011] NSWADT 95 …. [24.6] Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14 …. [12.9], [24.3], [25.13], [26.3], [27.3], [28.3] Sidebotham v Holland [1895] 1 QB 378; [1891–4] All ER Rep 617 …. [2.8], [16.19], [20.7], [20.17] Sidney Trading Co Ltd v Finsbury Corporation [1952] 1 TLR 512 …. [11.1] Siggers v Scott (1951) 68 WN (NSW) 131 …. [16.18] Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242 …. [23.65], [23.66] Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 …. [1.15] Sim v Rotherham Metropolitan Borough Council [1987] 2 NSWLR 63 …. [7.4] Simic v New South Wales Land and Housing Corp (2016) 339 ALR 200; (2016) 91 ALJR 108 …. [6.8] Simjanovksi v Maribyrnong Views Pty Ltd (2000) V ConvR ¶54-628 …. [19.2] Simmons v Lee [1998] 2 Qd R 671 …. [15.20] — v Liristis Holdings Pty Ltd (SC(NSW), Smart AJ, 7 February 2000, unreported) …. [2.19] — v Tuck [1918] GLR 736 …. [16.28] Simons v Associated Furnishers Ltd [1931] 1 Ch 379, [1930] All ER Rep 427 …. [14.6] Simpson v Dunedin Drill Shed Commissioners (1885) 3 NZLR 402 …. [5.8] Sina Holdings Ltd v Westpac Banking Corporation [1995] 1 NZLR 1 …. [28.15] Sinclair Scott and Co Ltd v Naughton (1929) 43 CLR 310 …. [4.1]

Sindel v Georgiou (1984) 154 CLR 661 …. [4.1] Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 104 ALR 633 …. [26.10] Singman v Lyons [1922] VLR 719 …. [17.7] Sir Roger Cholmeley’s School at Highgate (Warden, etc) v Sewell [1893] 2 QB 254; [1894] 2 QB 906 …. [19.6] Skiperch Pty Ltd v Mocom Systems Pty Ltd (1995) …. [11.20] Skiwing Pty Ltd v Trust Company of Australia Ltd [2005] NSWADT 188 …. [24.17] — v — [2006] NSWCA 276 …. [24.14], [24.15], [28.12] Skylark Pty Ltd v Penhale Pty Ltd (SC(NSW), Cohen J, 3 December 1986, unreported) …. [10.5] Slater v Hoskins [1982] 2 NZLR 541 …. [8.4], [13.15], [18.4] Sleafer v Lambeth Metropolitan BC [1960] 1 QB 43; [1959] 3 All ER 378 …. [10.1] Sleeman v Colonial Distributors Ltd [1956] NZLR 188 …. [10.13], [15.19] Slipper v Tottenham and Hampstead Junction Railway (1867) LR 4 Eq 112 …. [7.12] Slough Picture Hall Co Ltd v Wade (1916) 32 TLR 542 …. [16.3] Small Business Commissioner Reference for Advisory Opinion, Re [2015] VCAT 478 …. [23.44], [23.48], [23.49] Smirk v Lyndale Developments Ltd [1975] Ch 317 …. [2.18] Smith & Stott, Re (1883) …. [11.27] Smith, Ex parte (1924) 24 SR (NSW) 470 …. [20.27] Smith, Ex parte; Re Robertson (1947) 48 SR (NSW) 29 …. 20.27 Smith v Clark (1840) 9 Dowl 202 …. [20.27] — v Jones [1954] 1954 2 All ER 823 …. [6.8], [7.4] — v Kinsey [1936] 3 All ER 73 …. [20.16] — v Lush (1952) 52 SR (NSW) 207 …. [4.4] — v Marrable (1843) 11 M & W 5; 152 ER 693 …. [8.6]

— v Mather [1948] 2 KB 212; [1948] 1 All ER 704 …. [16.20] — v Metropolitan City Properties Ltd [1986] 1 EGLR 52 …. [19.1] — v Northside Developments Ltd [1987] 2 EGLR 151 …. [1.4] — v Nottinghamshire County Council (1981) Times, 13 November …. [3.1] — v Parkes (1852) 16 Beav 115 …. [7.4] — v Richards [1951] …. [15.10], [15.13] — v Scott [1972] 3 WLR 783; [1973] Ch 314 …. [7.14] — v Scott [1973] Ch 314 …. [8.4] — v Smith (1950) 45 QJPR 49 …. [20.3] — v Trust Company of Australia Ltd [2008] NSWADT 10 …. [24.6] Smith’s Lease, Re; Smith v Richards [1951] 1 All ER 346 …. [15.10], [15.13] Soames v Edge [1860] John 669; 70 ER 588 …. [13.7] — v Nicholson [1902] 1 KB 157 …. [20.5] Sofos v Coburn (1992) V ConvR ¶54-439 …. [23.18] Solomon v Bray (1873) 7 SALR 128 …. [2.10], [2.11] — v Winkler [1922] SASR 428 …. [7.12] Solowave Pty Ltd v Nechi Holdings Pty Ltd [2005] NSWSC 837 …. [19.5] Sorrell v Finch [1977] AC 728 …. [4.1] Sotheby v Grundy [1947] 2 All ER 761 …. [10.8] Soulsby v Neving (1808) 9 East 310; 103 ER 592 …. [17.17] South Suburban Land Co Ltd v Hughes (1889) 15 VLR 308 …. [13.8] South Tottenham Land Securities Ltd v R & A Millett (Shops) Ltd [1984] …. [11.7] Southern Cross Pumps and Irrigation Pty Ltd v Nicholls (1995) 39 NSWLR 501 …. [10.5] Southport Tramways Co v Gandy [1897] 2 QB 66 …. [17.17] Southwark London Borough Council v Baxter [2001] 1 AC 1; [1999] 4 All ER 449;[1999] 1 WLR 939 …. [8.4] Southwark LBC v Mills [1999] 4 All ER 449 …. [7.14]

— v Tanner [2001] 1 AC 1 …. [13.15] — v — [2001] …. [8.4] Sowler v Potter [1940] 1 KB 271; [1939] 4 All ER 478 …. [6.9] Spathis v Havane Investment Co Pty Ltd [2002] NSWSC 304 …. [8.1], [8.4] Specktor v Lees [1964] …. [11.28] Spectra Pty Ltd v Pindari Pty Ltd [1974] 2 NSWLR 617 …. [14.3], [14.9] Spencer’s case (1583) 5 Co Rep 16a; 77 ER 72; [1558–1774] All ER Rep 68 …. [15.18], [15.20] Sperry Rand Australia Ltd v Arrandale Properties Pty Ltd [1979] VR 409 …. [14.1], [14.6] Spicer v Martin (1888) 14 App Cas 12; [1886–90] All ER Rep 461 …. [16.3] Spinks v Mundy [1957] St R Qd 234 …. [16.18] Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 …. [4.2], [6.4] Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290 …. [6.4], [6.5], [6.6], [6.8], [14.3] Spyer v Phillipson [1931] 2 Ch 183; [1930] All ER Rep 457 …. [10.5] St George Bank Ltd v JB (Northbridge) Pty Ltd (2009) 262 ALR 538 …. [14.6] St Marylebone Property Co Ltd v Fairweather [1963] …. [16.3] Stack v Cameron [1941] St R Qd 284 …. [15.14] Stait v Fenner [1912] 2 Ch 504; [1911–13] All ER Rep 232 …. [20.7] Standard Life Assurance v Unipath Ltd [1997] …. [11.4] Standard Pattern Co Ltd v Ivey [1962] Ch 432 …. [19.3] Stanhope v Haworth (1886) 3 TLR 34 …. [19.2] Stanley v Ward (1913) 29 TLR 714 …. [15.11], [15.13], [15.14] Starline Drive Inn Theatre Ltd v Commissioner of Taxation (1964) 112 CLR 458 …. [10.5] Starline Furniture Pty Ltd (In Liq), Re (1982) 6 ACLR 312 …. [10.5] Starmark Enterprises Ltd v CPL Distribution Ltd [2002] …. [11.6]

Starr v Barbaro (1986) NSW ConvR ¶55-315 …. [1.15], [5.8] — v — (1986) 4 BPR 9137 …. [1.15] Starside Properties Ltd v Mustapha [1974] 1 WLR 816; [1974] 2 All ER 567 …. [19.5] State of New South Wales v Watton (1999) NSW ConvR ¶55-885 …. [10.1] State of Victoria v Tymbook Pty Ltd [2005] VSC 267 …. [23.64] State Rail Authority of NSW v Ferreri (1990) NSW ConvR¶55-512 …. [6.8] — v Health Outdoor Pty Ltd (1986) 7 NSWLR 170 …. [6.4] Statham v Liverpool Dock Co (1830) 3 Y & J 565; 148 ER 1304 …. [14.11] Steadman v Steadman [1976] AC 536 …. [4.5], [4.7], [16.18] Stedman v Shaw (1970) 91 WN (NSW) 190 …. [16.19] Steedman v Golden Fleece Petroleum Ltd (1986) ATPR ¶40-060 …. [12.9] Stellar Mining NL v Evanel Pty Ltd (1983) NSW ConvR 55-118 …. [14.6] — v — (SC (CA), NSW, 13 February 1983, unreported) …. [14.1] Stent v Monmouth District Council [1987] 1 EGLR 59 …. [10.8] Stephens v Gerandu Pty Ltd [2004] VCAT 1350 …. [23.41] — v Money (1893) 11 NZLR 775 …. [10.9] Stephenson v Morgan (1963) 80 WN (NSW) 1719 …. [3.4] Stern v McArthur (1988) 165 CLR 489; 81 ALR 463 …. [3.8], [4.8], [19.1] Steve Christenson and Co Ltd v Furs and Fashions (NZ) Ltd [1971] NZLR 129 …. [16.17] Stevens v Copp (1868) LR 4 Ex 20 …. [15.20] Stevenson & Sons Ltd v Brind (1895) …. [5.18] Stevenson v Mayor of North Melbourne (1890) 16 VLR 314 …. [2.19] — v — (1890) 21 VLR 109 …. [2.19] Stewart, Re; Ex parte Overells Pty Ltd [1941] St R Qd 175 …. [16.18], [17.10] — v Alliston (1815) 1 Mer 26; 35 ER 587 …. [1.12], [11.1] — v Goldman & Co Pty Ltd (1947) 64 WN (NSW) 155 …. [1.9], [20.8]

Stickney v Keeble [1915] …. [11.6] Stieper v Deviot Pty Ltd [1977] 2 BPR 9602 …. [19.2], [19.4] Stillwell Trucks Pty Ltd v Nectar Brook Investments Pty Ltd (1993) 115 ALR 295; 10 ACSR 615 …. [6.4] Stockley v Knowsley Metropolitan Borough Council [1986] 2 EGLR 141 …. [10.1] Stodden v Harvey (1608) Cro Jac 204; 79 ER 178 …. [16.36] Storer v Great Western Railway Co (1842) 2 Y & C Ch Cas 48; 63 ER 21 …. [10.13] Stormriders Pty Ltd v Copperart Pty Ltd (2005) NSW ConvR ¶56-110 …. [6.8] Story v Madders (1883) 9 VLR (L) 150 …. [20.5], [20.21] Strachan & Co Ltd v Lyall & Sons Pty Ltd [1953] VLR 81 …. [4.6] Strand and Savory Properties Ltd, Re [1960] Ch 582; [1690] 2 All ER 327 …. [1.10] Strang Patrick Stevedoring Pty Ltd v James Patrick and Co Pty Ltd (1993) …. [11.20] Strang v Gray (1952) 55 WALR 9 …. [10.13] Stratford v Syrett [1958] 1 QB 107; [1957] 3 All ER 363 …. [20.8] Stratton Finance Pty Ltd v Webb (2014) 314 ALR 166 …. [6.5] Straudley Investments Ltd v Barpress Ltd [1987] 1 EGLR 69 …. [6.5] Streatfeld v Winchcombe Carson Trustee Co (Canberra) Ltd [1981] 1 NSWLR 519 …. [1.4], [1.5] Street v Mountford [1985] AC 809 …. [1.3], [1.4], [1.5], [1.7], [1.12], [2.2], [3.2], [3.3], [3.4], [3.5], [15.3] Stremo Pty Ltd v Opal Collections Pty Ltd [2011] QCATA 129 …. [25.8] Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 486 …. [12.2] Stringer v Gilandos Pty Ltd [2012] VSC 361 …. [23.19], [23.21], [23.23] Stroud Building Society v Delamont [1960] 1 All ER 749 …. [5.16] Strzelecki Holdings Pty Ltd v Bogdanis Nominees Pty Ltd [2002] WASC 62

…. [26.14] Stuart v Marshall (1958) 75 WN (NSW) 252 …. [3.4] Sturcke v S W Edwards (1971) 23 P & CR 185 …. [10.6] Styles & Co v Richardson (1915) 17 WALR 81 …. [2.8] Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396 …. [18.10] — v Wetherall Bond Street W1 Ltd [1976] …. [11.6] Sudbrook Trading Company Ltd v Eggleton [1982] 3 WLR 315 …. [14.1], [14.7] — v — [1983] 1 AC 444 …. [4.8], [14.1], [14.3], [14.7] Suisse Atlantique Societe d’Armement Maritime SA v N V Rotterdamsche Kolen Centrale [1967] 1 AC 361 …. [16.35] Sullivan v Hall Russell & Co Ltd [1964] SLT 192 …. [25.2] — v Ison (4 All ER 449) …. [7.14] Summit Properties Pty Ltd v Comserv (No 784) Pty Ltd (1981) 2 BPR 9173 …. [4.1] Sunbird Plaza Pty Ltd v Maloney (1988) 77 ALR 205; 62 ALJR 195 …. [16.32] Sunrose Ltd v Gould [1961] 3 All ER 1142; [1962] 1 WLR 20 …. [20.17], [20.20], [20.26] Sunskill Investments Pty Ltd v Townsville Office Services Pty Ltd [1991] 2 Qd R 210 …. [6.7], [7.16] Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 53 ALJR 614 …. [24.2], [25.2] Surplice v Farnsworth (1844) 4 All ER 449 …. [7.4] Sutcliffe v Chief Constable of West Yorkshire (CA(UK), 19 May 1995, unreported) …. [16.36] Sutherland (Dowager Duchess) v Sutherland (Duke) [1883] 3 Ch 169 …. [5.19] Sutherland Shire Council v James [1963] NSWR 1573; 63 SR (NSW) 273 …. [5.8] Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 …. [16.30]

Svenson v Payne (1945) 71 CLR 531 …. [5.17] Swain v Ayres (1888) 21 QBD 289 …. [4.1] Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71 …. [6.8] Swan v Uecker [2016] VSC 313 …. [1.3], [1.4] Swanson v Forton [1949] Ch 143; [1949] 1 All ER 135 …. [13.16] Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699; [1964] 3 All ER 30 …. [4.2], [9.2] Swift v Macbean [1942] 1 KB 375 …. [2.3] Swinburne v Milburn (1884) 9 App Cas 844 …. [14.2] Swinfen v Bacon (1861) 6 H & N 846; 158 ER 349 …. [17.17] Swintons Pty Ltd v Age Old Builders Pty Ltd (2005) …. [11.20] Sydney Eastman Pty Ltd v Southern [1963] NSWR 815; 80 WN (NSW) 458 …. [14.3] Sydney Harbour Casino Holdings Ltd v NMBE Pty Ltd (CA(NSW), 23 October 1998, unreported) …. [4.1] Sydney Real Estate & Investment Co Pty Ltd v Rich (1957) 74 WN (NSW) 427 …. [17.21] Sydney Markets Ltd v Wilson (2011) 16 BPR 30,583; [2011] NSWCA 201 …. [24.2] Sydney West Area Health Service v Staracek (2008) 73 NSWLR 68 …. [14.6] Sykes v Midland Bank Executor and Trustee Co [1971] 1 QB 113 …. [7.3], [10.8] — v Ranken (1971) EG 1005 …. [6.5] Sylvester v Ostrowska [1959] 1 WLR 1060 …. [18.6] Symmons Plains Pastoral Holdings Ltd v Tasmanian Motor Racing Co Pty Ltd (1996) 6 Tas R 284 …. [19.3] SYNBA Investments Pty Ltd v Brisbane City Council (1979) 50 LGRA 208 …. [11.1] Syntex Australia Ltd v Ray Teese Pty Ltd (CA 259/1996, delivered 6 Aug. 1996) …. [13.15]

T & E Homes Ltd v Robinson [1979] 1 WLR 452 …. [11.1] T Hyland Enterprises Pty Ltd v Alliance Acceptance Co Ltd (Powell J, 2 October 1984) …. [19.4] T P Rich Investments Pty Ltd v Cauldron (1964) 38 ALJR 43; [1964] NSWR 709 …. [6.9], [11.18] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 …. [10.3], [10.8], [10.13] Tabtide Pty Ltd, Re [1989] 1 Qd R 604 …. [14.6] Taddeo v Catalano (1975) 11 SASR 492 …. [6.8] Tailby v Official Receiver (1888) 13 App Cas 523 …. [4.8] Taj Coffee Company Pty Ltd v Plaza Arcade [2009] WASAT 107 …. [26.8] Take Harvest Ltd v Liu [1993] AC 552; [1993] 2 All ER 459 …. [1.6], [2.7], [2.8], [16.11], [16.12], [16.13], [16.14], [16.15], [16.17], [16.18], [16.19] Talbot v Blindell [1908] 2 KB 114 …. [19.5] Talga Investments Pty Ltd v Tweed Canal Estates Pty Ltd (1974) 1 BPR 9675 …. [1.4] Tall-Bennett & Co Pty Ltd v Sadot Holdings Pty Ltd (1988) 4 BPR 97,295; NSW ConvR ¶55-428 …. [11.16], [16.30], [16.31] Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93 …. [14.10] Tamsco Ltd v Franklins Ltd (2001) 10 BPR 19,077 …. [15.6], [15.8], [15.9], [15.13] Tanham v Nicholson (1872) LR 5 HL 561 …. [20.27] Tannous v Cipolla Bros Holdings Pty Ltd (2001) 10 BPR 18,563 …. [11.3], [19.4] Tapoohi v Lewenberg (No 2) [2003] VSC 410 …. [23.62] — v Lewenberg (2004) …. [23.62] Targett v Torfaen Borough Council [1992] 1 EGLR 274 …. [10.7] Tashof v FCT (1970) 473 F 2d 707 …. [12.9] Tasita Pty Ltd v Sovereign State of Papua New Guinea (1991) 34 NSWLR 691 …. [16.17]

Tassoni v Steve; Ex parte Steve [1956] St R Qd 72 …. [20.7] Tatem v Chaplin (1793) 2 Hy Bl 133; 126 ER 470 …. [15.19] Tattersall’s Hotel Penrith Pty Ltd v Permanent Trustee Co of NSW (1942) 42 SR (NSW) 104 …. [17.10] Tayleur v Wildin (1868) 3 Ex 303 …. [20.33] — v Wildin (Freeman v Evans) [1922] 1 Ch 36 …. [20.33] Tay Salmon Fisheries v Speedie [1929] SC 593 …. [6.10] Taylor v Caldwell (1863) 3 B & S 826, [1861–73] All ER Rep 24 …. [6.10] — v Johnson (1983) 151 CLR 422; 45 ALR 265 …. [6.6], [6.8] — v Shum (1797) 1 Bos & P 21; 126 ER 755 …. [5.18] — v Webb [1937] 2 All ER 76; [1937] 2 KB 2833 …. [7.4], [10.11] Taylor Farms (Australia) Pty Ltd v A Calkos Pty Ltd [1999] NSWSC 186 …. [24.20] Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 …. [1.15] Taylor Woodrow Property Co Ltd v Lonrho Textiles Ltd [1985] …. [11.6] Taylor Woodrow Property Co of Australia Pty Ltd v Coles Myer Ltd (1999) 9 BPR 17,449; NSW ConvR ¶55-912 …. [10.10] Taylor, Ex parte [1980] Qd R 253 …. [18.2], [18.4], [18.6] Te Peehi v Smith (1909) 29 NZLR 160 …. [5.15] Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 EGLR 155 …. [7.8] Technomin Australia Pty Ltd v Xstra Nickel Australasia Operations Pty Ltd [2014] WASCA 164 …. [6.5] Telado Pty Ltd v Vincent (1996) NSW ConvR ¶55-786 …. [1.6], [4.8] — v — (1996) 7 BPR 14,874 …. [4.8] Telex (Australasia) Pty Ltd v Thomas Cook & Son (Australasia) Ltd [1970] 2 NSWR 257 …. [13.15] Teller Home Furnishers Pty Ltd, Re [1967] VR 313 …. [15.18], [15.19], [16.25], [17.21], [26.8] Temptress Nominees Pty Ltd v Constantinou (2001) V ConvR ¶58-563 ….

[23.12], [23.36] Tennant v London County Council (1957) 55 LGR 421 …. [20.9] Tenstat Pty Ltd v Permanent Trustee Aust Ltd (1992) 28 NSWLR 625 …. [14.1], [14.5], [15.1], [15.20] Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2008] VSC 40 …. [18.3], [23.54] — v — [2012] VSCA 103 …. [17.8] Terceiro v First Mitmac Pty Ltd (1997) 8 BPR 15,733 …. [6.8] Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 …. [4.1] Terroni v Corsini [1931] 1 Ch 515 …. [10.13] Terry v Tindale (1882) 3 LR NSW 444 …. [1.5], [2.2] Thanes Pty Ltd v Custom Credit Corporation Ltd (1985) 5 BPR 97 …. [5.16] Thearle v Kelley (1958) 76 WN (NSW) 48 …. [6.10] Thermoplastic Foam Industries Pty Ltd v Imthouse Pty Ltd (1990) 5 BPR 97,334 …. [6.8] Thessaly Pty Ltd v Pelworth Pty Ltd (1991) 6 WAR 253 …. [26.4] Thetford Corporation v Tyler (1845) …. [11.28] THL Robina Glades v Glades Golf Club Pty Ltd [2005] 2 Qld R 286 …. [14.4] Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 …. [6.8], [11.1], [11.8], [11.20], [14.7] Thomas Bishop Ltd v Helmville Ltd [1972] 1 All ER 365 …. [20.28] — v — [1972] 1 QB 464 …. [20.28] Thomas v Hayward (1869) LR 4 Ex 311 …. [15.20] — v R (1905) 2 CLR 127 …. [4.6] — v Sorrell (1674) Vaugh 330; 124 ER 1098 …. [1.2], [3.1] — v Thomas [1939] St R Qd 301 …. [5.17] Thompson v Anderson (1870) LR 9 Eq 523 …. [14.7] — v Cross [1954] VLR 635 …. [20.15], [20.16] — v Hakewill (1865) 144 ER 966 …. [5.15]

— v Leach (1698) 2 Salk 618; Show PC 150; [1558–1774] All ER Rep 39 …. [16.11] — v McCullough [1947] KB 447; 1 All ER 265 …. [20.8], [20.30] — v McIntosh (1953) 53 SR (NSW) 212 …. [20.20] — v Palmer (1933) 49 CLR 507 …. [1.15], [14.6] Thorburn v Buchanan (1871) 2 VR (L) 169 …. [16.2], [17.4], [17.18] Thorn v Martin (1960) 77 WN (NSW) 301 …. [2.2] Thorby v Goldberg (1964) 112 CLR 597 …. [1.5] Thorogood v Robinson (1845) 6 QB 769; 115 ER 290 …. [16.36] Threlfall, Re; Ex parte Queen’s Benefit Building Society (1880) 16 Ch D 274 …. [20.2] Thunder d Weaver v Belcher (1803) 3 East 449; 102 ER 669 …. [15.5] Tichborne v Weir (1892) 67 LT 735 …. [1.15], [15.17] Tierney Pty Ltd v Vanda W Holdings Pty Ltd (1997) V ConvR ¶54-570 …. [23.21] Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd (2010) 14 BPR 27,605 …. [6.10] — v Narui Gold Pty Ltd (2010) 15 BPR 28,857 …. [18.2] Timber Top Realty Pty Ltd v Mullens [1974] VR 312 …. [4.7] Timmins v Rowlinson (1765) 3 Burr 1603; 97 ER 1003 …. [17.17] Ting v Blanche (1993) 118 ALR 543; ATPR ¶41-282 …. [12.9] TJ Watkins Ltd v Cairns Meat Export Co Pty Ltd [1963] Qd R 21 …. [6.5] TNT (Melbourne) v May & Baker (Aust) Pty Ltd (1966) 125 CLR 353 …. [16.36] Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11,173; [1990] ANZ ConvR 567 …. [23.11] — v — (1990) 5 BPR 97,333 …. [2.15], [4.1], [4.8], [8.4], [11.1], [13.15], [14.1], [14.5], [16.28], [16.34], [16.35], [23.11] Tod-Heatley v Benham (1888) 1 EGLR 155 …. [7.14] Toler v Slater (1867) 3 QB 42 …. [11.1]

Toll (FGCT) v Alphapharm (2004) 219 CLR 165 …. [4.2], [6.4] Tollbench Ltd v Plymouth City Council [1988] 1 EGLR 79 …. [7.8], [10.8] Tonitto v Bassal (1992) 28 NSWLR 564 …. [14.8] Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (25 September 1996) WASC (FC)) …. [16.30] Toogood v Mills (1896) 23 VLR 106 …. [17.18] Tooth v Coombes (1925) 42 WN (NSW) 92 …. [19.4] Tooth & Co Ltd v Newcastle Developments Ltd (1966) 116 CLR 167 …. [7.16] Torminster Properties Ltd v Green [1983] …. [11.6], [11.7] Torrens v Walker [1906] 2 Ch 166; [1904–7] All ER Rep 800 …. [10.6] Torriano v Young (1833) 6 C & P 8 …. [10.3] Torrisi v Oliver [1951] VLR 380 …. [3.4] Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318; [1971] 3 All ER 1226 …. [1.2], [4.1], [16.28], [16.29] Tournier v National Provincial & Union Bank of England [1924] 1 KB 461 …. [23.42] Town Investments Ltd v Department of the Environment [1976] 1 WLR 1126 …. [24.2], [26.2], [27.2] — v — [1978] AC 359 …. [5.6] Town Investments Ltd Underlease, Re [1954] 1 Ch 301; 1 All ER 585 …. [15.13], [15.14] Towne v Campbell (1847) 3 CB 921; 136 ER 369 …. [20.2] Townsend v Chief Executive, State Rail Authority [1999] NSWADT 58 …. [24.20] Townsville Harbour Board v Scottish Shire Line Ltd (1914) 18 CLR 306 …. [2.19] Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd (1994) 2 VR 106 …. [4.1], [4.2] Trade Practices Commission v J&R Enterprises Pty Ltd (1991) ATPR ¶41133 …. [12.13]

— v Tooth & Co Ltd (1979) 142 CLR 397 …. [12.4] — v Milreis Pty Ltd (1977) 14 ALR 623 …. [6.9] Trafford MBC v Total Fitness UK Ltd [2004] EWCA Civ 553 …. [20.20] Tramways Advertising Pty Ltd v Luna Park (NSW) Pty Ltd (1938) 38 SR (NSW) 632 …. [13.15], [16.33], [16.34] Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33 …. [20.2] Transfer from Balfour to Public Trustee, Re [1916] VLR 397 …. [5.8] Transfield Properties (Kent St) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 …. [14.4], [14.5] Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 …. [14.1] Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326; (1992) Aust Contract R ¶90-011 …. [4.2], [7.16] Traynor v Thompson [1953] VLR 706 …. [1.9] Traywinds Pty Ltd v Cooper [1989] 1 Qd R 223 …. [14.1], [14.8], [14.9] Treacher and Co Ltd v Treacher [1874] WN 4 …. [23.18] Tredegar v Harwood [1929] 116 CLR 167; [1928] All ER Rep 11 …. [7.11], [15.6], [15.13], [23.34] — v — [1929] AC 72 …. [23.33] Trego v Hunt [1896] AC 7 …. [24.5], [25.5], [27.5] Treloar v Bigge (1874) LR 9 Exch 151 …. [15.8], [15.9] Tremearne v Woolhouse [1958] VR 269 …. [20.21] Trendent Industries Pty Ltd (in liq), Re (1983) 8 ACLR 115 …. [16.36] Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 …. [15.2] Trifid Pty Ltd v Ralto [1985] …. [11.5] Triggs v Byron (1950) 67 WN (NSW) 183 …. [16.20] — v Staines Urban District Council [1969] 1 Ch 10 …. [5.6] Trivett v Hurst [1937] St R Qd 265 …. [17.17] Tropical Meat Packers Pty Ltd v Schilta [2006] QSC 164 …. [14.9]

Tropical Traders Ltd v Goonan (1964) 111 CLR 41; [1964] ALR 585 …. [2.17], [16.30], [16.31], [18.3] Tropwood AG of Zug v Jade Enterprises Ltd (The Tropwind) [1982] 1 Lloyd’s Rep 232 …. [6.4] Tru-Grain Co Ltd, Re [1921] VLR 653 …. [13.4] Trustees of Henry Smith’s Charity v AWADA Trading and Promotion Services Ltd (1983) 1 QB 316 …. [11.6] — v Willson [1983] …. [20.32] Tryfonos v D Landau & Son (1961) 181 EG 405; [1962] LMD 3225 …. [19.4] Tsacoucis v Gallipoli Memorial Club Ltd (No 1) (1998) 9 BPR 16,265 …. [14.8], [14.9], [14.10] — v — (No 2) (1998) 9 BPR 16,275 …. [14.8] Tubbs v Wynne [1897] 1 QB 74 …. [7.16] Tuckett v Brice [1917] VLR 36 …. [5.17] Tulapam Properties Ltd v De Almeida [1981] 1 QB 74; [1981] 2 EGLR 55 …. [7.12], [15.16] Turner & Ors v York Motors Pty Ltd (1951) 85 CLR 55 …. [1.12] Turner v Watts (1928) 44 TLR 105 …. [16.19] — v Lamb (1845) 14 M & W 412; 153 ER 535 …. [10.13] — v York Motors Pty Ltd (1951) 85 CLR 55; [1951] ALR 1054 …. [2.11], [2.14], [2.15], [2.16], [10.10], [20.2], [20.5], [20.7] Turpin v Middlesbrough Assessment Committee & Kaye & Eyre Bros Ltd [1931] AC 451 …. [23.18] Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97,311; NSW ConvR 55486 …. [18.3], [18.6], [19.1], [19.2], [19.4] Tweed Motors (Qld) Pty Ltd v Moran Motors Pty Ltd (1965) 39 ALJR 279 …. [15.16] Twinsectra Ltd v Hymes (1995) 71 P & C 145 …. [17.12] TXU Electricity Ltd v Commonwealth Custodial Services Ltd [2003] …. [11.20]

Tymray Pty Ltd v Mercantile Mutual Life Insurance Co Ltd (1994) 13 ACSR 111 …. [18.5] Tynec Pty Ltd v Geekie [2005] NSWSC 938 …. [3.8] Ultraworth v General Accident Fire & Life Assurance Corporation [2000] 2 EGLR 115 …. [10.8] Umphelby v Grey (1898) 24 VLR 979 …. [5.17] Union Bank of Australia v Harrison, Jones & Devlin Ltd (1910) 11 CLR 492 …. [1.13], [5.18] Union Trustee Co of Australia Ltd v Baker (1948) 65 WN (NSW) 247 …. [16.15], [16.17] Unique Lifestyle Investments Pty Ltd v Robertson [2005] VSC 347 …. [4.2] United Dominions Trust Ltd v Shellpoint Trustees Ltd [1993] 4 All ER 310; [1993] 35 EG 121 …. [19.1] United Pacific Transport Pty Ltd, Re [1968] Qd R 517 …. [6.4], [6.8] United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; [1977] 2 All ER 62 …. [4.8], [6.7], [11.1], [11.3], [11.4], [11.6], [11.8], [14.1], [14.3], [14.9], [23.40], [26.10] United Starr-Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) …. [14.5] United Starr Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331 …. [14.5] United States v Milwaukee Refrigerator Transit Co 142 F 247 …. [15.3] United States of America v Motor Trucks Ltd [1924] AC 196 …. [6.8] Universal Roofing & Accessories Pty Ltd v Smith [2004] NSWSC 32 …. [14.8] University of Melbourne v Avram Hotels Pty Ltd (1986) V ConvR ¶54-205 …. [10.5] Upjohn v Macfarlane [1922] 2 Ch 256 …. [17.19], [19.1] Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 …. [1.4], [4.2], [6.7], [7.16], [11.8]

Uratemp Ventures Ltd v Collins [2002] 1 AC 301 …. [1.4], [3.4] Ushers Brewery Ltd v P S King & Co (Finance) Ltd (1969) 113 Sol Jo 815 …. [16.11] V & L Li Nominees Pty Ltd v Sandhurst Trustees Ltd [2002] VCAT 391 …. [23.18] Van der Velde v Marklyn Enterprises Pty Ltd [2005] QSC 239 …. [16.36] Van Haarlam v Kasner [1992] 2 EGLR 59 …. [17.18] Vand Pty Ltd v Highpoint Shopping Centres (Leasing) Pty Ltd [2004] VCAT 2016 …. [23.40] Vanda W Holdings Pty Ltd v G & L Tierney Pty Ltd (1997) V ConvR ¶58526 …. [23.21] Varella v Marsicovetere [1954] VLR 550 …. [3.4] Varley v Coppard (1872) LR 7 CP 505 …. [5.15], [7.12], [15.16] Vasue v Lubo Medich Holdings [2008] NSWSC 899 …. [24.3] Vella v Wah Lai Investment (Aust) (2004) 12 BPR 22,671; [2004] NSWSC 748 …. [1.15], [12.9], [12.14], [15.17] — v — [2006] NSWCA 18 …. [1.15] Venza Corp Pty Ltd v Allsop (SC(NSW), Bryson J, 4 December 1996 unreported) …. [1.15] Verdi La Fontana Pty Ltd v Mabrouk Pty Ltd (1992) 5 BPR 97,381 …. [6.7], [14.1] Vernon v Smith (1821) 5 B & A 1; 106 ER 1094 …. [15.19] Verrall v Great Yarmouth Borough Council [1981] QB 202 …. [3.8] Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2015] VSC 515 …. [23.12] Vesco Nominees Pty Ltd v Stefan Hair Fashion Pty Ltd (2001) Q ConvR ¶54-555 …. [10.5] Vesey v Bodkin (1830) 4 Bli NS 64; 5 ER 23 …. [19.4] Vickers & Vickers v Stichtenoth Investments Pty Ltd (1989) 52 SASR 90 …. [16.21], [16.28], [16.30], [16.31] Vickers v Vickers (1867) LR 4 Eq 529 …. [14.7]

Victoria v Bradto Pty Ltd [2006] VCAT 1864 …. [23.64] Videon v Barry Burroughs Pty Ltd (1981) 37 ALR 365; 53 FLR 425 …. [12.11], [12.12] Vienit Ltd v W Williams & Son (Bread Street) Ltd [1958] 1 WLR 1267 …. [15.12] Vince Bevan Ltd v Findgard Nominees Ltd [1973] 2 NZLR 290 …. [14.6] Vincent Distributors Pty Ltd v Bambacas (1977) 16 SASR 159 …. [14.9] Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 …. [1.5] Vinden v Vinden [1982] 1 NSWLR 618 …. [3.8] Viscount Tredegar v Harwood [1929] AC 72 …. [15.13] Visser v Jacobs (1987) NSW ConvR 55-350 …. [18.6] Voisey, Re; Voisey, Ex parte (1882) 21 Ch D 442 …. [1.6] Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351; [2004] VSCA 10 …. [10.5], [23.41] Vuksic v Metimex (1995) V ConvR ¶54-511 …. [16.34] Vyvyan v Arthur (1823) 1 B & C 410; [1814–23] All ER Rep 349 …. [15.20] W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 …. [16.25], [16.28], [16.34], [17.9], [17.13], [17.21], [19.1], [19.4] W H Tuckett & Sons v Ransom [1914] VLR 8 …. [20.9], [20.13], [20.14] W Skelton Ltd v Harrison & Pinder [1975] QB 361 …. [1.8] Waipara Pty Ltd v Police Association of Victoria (1997) V ConvR ¶54-557 …. [6.8] — v — (1998) V ConvR ¶54-583 …. [1.15], [6.8] Waite v Jennings [1906] 2 KB 11 …. [15.15] Walker v Valuer-General (1978) 5 QCLR 347 …. [25.5] Walliker v Deveaux (1961) 78 WN (NSW) 409 …. [3.4], [15.2] Wallis v Hands [1893] 2 Ch 75; [1891-4] All ER Rep 719 …. [1.16], [16.21] Walls v Atcheson (1826) 3 Bing 462; 130 ER 591 …. [16.21], [16.31] Wallshire Ltd v Advertising Sites Ltd [1988] 2 EGLR 167 …. [3.8]

Wallville Pty Ltd v Liristis Holding Pty Ltd (2001) 10 BPR 19,098 …. [14.10] Walsh v Lonsdale (1882) 21 Ch D 9; [1881] 51 All ER Rep Ext 1690 …. [1.6], [4.8], [6.8] Walters v Cooper [1967] VR 583 …. [16.27] Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; 62 ALJR 110 …. [1.5], [1.6], [1.15], [4.5], [14.6] Wamo Pty Ltd v Jewel Food Stores Pty Ltd (1983) …. [11.20] Wang v Yan (No 1) [2006] VCAT 235 …. [23.57] — v — (No 2) [2006] VCAT 236 …. [23.45] — v — (No 3) [2006] VCAT 237 …. [10.13], [13.15] Ward v Kirkland [1967] Ch 194 …. [1.15] — v Sadler (1959) 76 WN (NSW) 554 …. [16.19] Warder v Cooper [1970] Ch 495; [1970] 1 All ER 1112 …. [3.5], [3.8] Ware v Booth (1894) 10 TLR 446 …. [17.9] Warne v GDK Financial Solutions Pty Ltd (2006) 233 ALR 181 …. [5.9] Warner Bros Records Inc v Rollgreen Ltd [1976] QB 430 …. [14.8] Warner v Sampson [1958] 1 All ER 44 …. [17.9], [17.10], [17.12], [17.21], [17.22], [19.4] — v — [1959] 1 QB 297; [1959] 1 All ER 120 …. [17.9], [17.10], [17.12], [17.21], [17.22] Warnford Investments v Duckworth [1978] 2 WLR 741 …. [11.3], [15.18], [16.25] — v — [1979] Ch 127 …. [16.25], [26.8] Warren v Keen [1953] 2 All ER 1118 …. [8.7] — v — [1954] 1 QB 15; [1953] 3 All ER 521 …. [8.7], [10.3] Warrender Estates Ltd v Simpson (1933) 33 SR (NSW) 390; 50 WN (NSW) 177 …. [16.25] Warwick Entertainment Centre Pty Ltd v McKenzie [2000] WASCA 280 …. [26.4] Warwick Grove Pty Ltd v Wright (1976) 1 SR (WA) 69 …. [4.8], [13.4]

Washington Motors Pty Ltd v O’Halloran [1949] VLR 203 …. [20.8] Watcham v Attorney-General (East Africa Protectorate) [1919] AC 533 …. [6.6] Waterhouse v Waugh [2003] NSWCA 139 …. [1.9], [8.9] Watson Holdings Pty Ltd v Hodinott (1957) 75 WN (NSW) 168 …. [15.2] Watson v Phipps (1985) 60 ALJR 1 …. [11.8], [14.1] — v Riding; Ex parte Riding [1945] St R Qd 75 …. [20.20], [20.26] — v Webb (1948) 66 WN (NSW) 42 …. [16.18] Watts v Rake (1960–61) 34 ALJR 186 …. [16.30] WC Pty Ltd, Re [2003] …. [18.3], [18.6] Weatherhead v Deka New Zealand Ltd [1999] ANZ ConvR 392 …. [10.8] Webb v Plummer (1819) 2 B & Ald 746 …. [7.2] — v Russell (1789) 3 Term Rep 393; 100 ER 639 …. [16.3] Webster v Smith (1689) 2 Vern 103; 23 ER 676 …. [19.6] Wedd v Porter [1916] 2 B & Ald 746; [1916] 2 KB 91; [1916–17] All ER Rep 803 …. [7.13], [15.20] Weddall v Capes (1836) 1 M & W 50; 150 ER 341 …. [16.15] Wedderburn v Wedderburn (No 4) (1856) 22 Beav 84; 52 ER 1039 …. [24.5], [25.5], [27.5] Weeding v Weeding (1861) 1 J & H 424; 70 ER 812 …. [14.1] Weemah Park Pty Ltd v Glenlaton Investments Pty Ltd [2011] 2 Qd R 582 …. [14.8] Weeton v Woodcock (1840) 7 M & W; 151 ER 659 …. [10.5] Weg Motors Ltd v Hales [1961] 3 All ER 181; [1962] Ch 49 …. [1.10], [15.20] Wei Hong Fang v Main Street Shopping Centre Pty Ltd (VCAT Deputy President Macnamara 16 October 2007 unreported) …. [23.39] Weigall & Dawes’ Lease, Re [1942] VLR 49 …. [2.11] — v Waters (1795) 6 TR 488; 101 ER 663 …. [7.4] Weitmann v Katies Ltd (1977) 29 FLR 336 …. [12.9], [23.39], [24.3],

[25.13], [26.3], [27.3], [28.3] Welbeck Way Holdings v H L Savory & Co [1958] EG 179 …. [18.6] Weller v Akehurst [1981] …. [11.6] — v Everitt (1900) 25 VLR 683 …. [10.5] — v Spiers (1872) 26 LT 866; 20 WR 772 …. [16.3], [16.5] Wellington City Corporation v Kirkcaldie & Stains Ltd [1975] 1 NZLR 592 …. [14.7] Wellington v Norwich Union [1991]; (1990) V ConvR ¶54-387 …. [23.8], [23.18], [24.1], [24.2], [26.2], [27.2] — v Norwich Union Life Insurance Society Ltd (1997) …. [23.19] Wells v D’Amico [1961] VR 672 …. [23.62] — v Kingston-Upon-Hull Corporation (1875) LR 10 CP 402 …. [3.7], [4.3] Welsh v Greeenwich London Borough Council [2000] 49 EG 118; [2000] All ER (D) 880 …. [10.8] Wenham v Ella (1972) 127 CLR 454 …. [10.13] Wenkart v Pitman (1998) 46 NSWLR 502 …. [16.30] Wentworth Securities Ltd v Jones [1980] …. [11.27] Wertheim v Chicoutimi Pulp Company [1911] AC 301 …. [10.13] Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 …. [4.1], [4.2], [4.8], [6.2] West v Gwynne [1911] 2 Ch 1 …. [15.9] West Layton Ltd v Ford [1979] QB 593 …. [15.13], [15.14] Western Assurance Company of Toronto v Poole [1903] 1 KB 376 …. [6.5] Western Australian Club Inc v Nullagine Investments Pty Ltd (1992) 6 WAR 441; [1993] ANZ ConvR 403 …. [1.12] Western Australian Trustees Limited v Poon (1994) 6 WAR 72 …. [11.8] — v — (1991) 6 WAR 72 …. [6.7], [11.8], [11.20], [26.10] Westhoughton UDC v Wigan Coal and Iron Co Ltd [1919] …. [12.3] Westinghouse Electric Australasia Ltd v Barina Properties Pty Ltd [1975] 2 NSWLR 652 …. [11.1]

Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty Ltd (2006) 152 FCR 461; 232 ALR 38; [2006] FCAFC 115 …. [23.40] Westminster (Duke of) v Guild [1985] QB 688 …. [10.1] — v Store Properties Ltd [1944] 1 KB 524 …. [11.2] Westminster City Council v Clarke [1992] 2 AC 288 …. [1.4], [3.4] — v Duke of Westminster [1991] 4 All ER 136 …. [6.5], [7.8] Westminster Estates Ltd v Calleja [1970] 1 NSWR 526; 91 WN(NSW) 222 …. [14.1] Westminster v Swinton [1948] 1 KB 524 …. [10.13] Weston v Ray [1946] VLR 373 …. [1.12], [11.1] Westpac Banking Corp v Tanzone Pty Ltd (2000) 9 BPR 17,521 …. [11.8] — v Eltran Pty Ltd (1987) 74 ALR 45 …. [7.4] Westwill Pty Ltd v Heath (1990) 52 SASR 461; ATPR (Digest) 46-056 …. [12.12] Wettern Electric Ltd v Welsh Development Agency [1983] …. [3.1], [8.6], [10.1] Wexelman v Dale (1917) …. [11.3] Whaley, Re [1908] 1 Ch 615 …. [10.5] Whall v Bulman [1953] 2 All ER 306; [1953] 2 QB 198 …. [17.6] Wharf Street Pty Ltd v Amstar Learning Pty Ltd [2004] …. [11.22] Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57 …. [13.11] — v Mercer [1956] …. [2.17] — v — [1957] AC 416; [1956] 3 All ER 631 …. [2.15], [2.19], [2.20] Whelan, Ex parte [1986] 1 Qd R 500 …. [6.8], [11.5], [17.10], [17.18], [18.6] White v Australian & New Zealand Theatres Ltd (1943) 67 CLR 266 …. [6.6] — v Hunt (1870) LR 6 Ex 32 …. [5.17] — v Kenny [1920] VLR 290 …. [1.8], [15.2], [15.19] — v Kitchings [1970] 1 NSWR 510 …. [18.6] Whitehall Court v Ettlinger [1920] 1 KB 680; [1918-19] All ER Rep 229 ….

[1.2], [6.10] Whitehead v Palmer [1908] 1 KB 157 …. [5.18] Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110 …. [1.6], [15.15], [23.36], [24.5], [25.5], [26.4] Whitham v Kershaw (1885) 16 QBD 613 …. [10.13] Whitlock v Brew (1968) 118 CLR 445; [1969] ALR 243 …. [4.2] Whittet v State Bank of NSW (1991) 24 NSWLR 146 …. [6.8] Whittock v Mozley (1883) 1 Cab & El 86 …. [4.7] Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583; [1970] 1 All ER 7976 …. [6.6] Wickham Properties Pty Ltd v Astor Motel Pty Ltd [1994] …. [11.8], [11.20] Wickham v Lee (1848) 12 QB 521; 116 ER 963 …. [17.17] Wigan v Edwards (1973) 1 ALR 497 …. [16.30] Wight v Haberdan Pty Ltd [1984] 2 NSWLR 280 …. [10.13] Wik Peoples, The v The State of Queensland and Ors (1996) 187 CLR 1 …. [1.2], [1.3], [1.4] Wilbraham v Colclough [1952] 1 All ER 979 …. [20.12] Wilchick v Marks and Silverstone (Silverstone, third party) [1934] 2 KB 56 …. [10.1] Wilebbed Pty Ltd v Parramatta Riverside Theatres Pty Ltd (SC(NSW), Hodgson J, 7 November 1995 unreported) …. [1.3], [1.4] Wilkes v Spooner [1911] 2 KB 473 …. [16.3] Wilkinson v Colley (1771) 5 Burr 2694; 98 ER 414 …. [17.17] — v —; Page v More (1850) 15 QB 684; 117 ER 618 …. [17.17] — v Hall (1837) 3 Bing NC 508; 132 ER 506 …. [17.17] — v Rogers (1864) 2 De G J & S 62; 46 ER 298 …. [15.19] Wilks v Back (1802) 2 East 142; 102 ER 323 …. [5.13] Williams v Earle (1868) LR 3 QB 739 …. [13.16], [15.19] — v Evans (1875) LR 19 Eq 547 …. [4.7] — v Frayne (1937) 58 CLR 710 …. [4.8]

— v Heales (1874) LR 9 CP 177 …. [1.15], [15.17] — v Kiley (t/as C K Supermarkets Ltd) [2002] EWCA Civ 1645 …. [7.8] — v Lewis [1915] 3 KB 493 …. [8.8] William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 …. [6.8] Williamson v Williamson (1873) LR 9 Ch 729 …. [15.2] Willshire v Dalton (1948) 65 WN (NSW) 54 …. [2.13], [20.2] Willson v Leonard (1840) 3 Beav 373; 49 ER 146 …. [15.21] Wilmott Growers Group Inc v Willmott Forests Limited (Receivers and Managers Appointed) (in liquidation) (2013) 251 CLR 592 …. [16.25] Wilson, Re (1955) …. [14.10] Wilson v Anderson (2002) 213 CLR 401 …. [1.2], [1.3] — v Furness Railway Co (1869) LR 9 Eq 28 …. [10.13] — v Fynn [1948] 2 All ER 40 …. [15.8] — v Halton [1945] VLR 180 …. [20.18] — v Jolly (1948) 48 SR (NSW) 460 …. [16.3], [16.10] — v Kelly [1957] VR 147 …. [5.16], [17.17] — v Smith (1844) 12 M & W 401; 152 ER 1253 …. [11.1] — v Stewart (1889) 15 VLR 781 …. [13.11], [14.6], [17.18] Wilson’s Laundry Pty Ltd v Patmoy [1961] NSWR 499; 78 WN (NSW) 636 …. [14.10], [20.9], [20.11] Wincant Pty Ltd v State of South Australia (1997) 69 SASR 126 …. [10.5], [10.8], [10.13] Windmill Investments (London) Ltd v Milano Restaurant Ltd [1962] 2 QB 373; 2 All ER 680 …. [17.18] Winfrey & Chatterton’s Agreement, Re [1921] 2 Ch 7 …. [15.13] Wing v Kensit (1921) 21 SR (NSW) 464 …. [15.13] Winks v W H Heck & Sons Pty Ltd [1986] 1 Qd R 226 …. [6.8] Winstonu Pty Ltd t/as Harvey Norman Electrics v Pitson [2001] FCA 541 …. [6.6]

Winter v Ahern [1997] FCA 157 …. [16.22] Wintergarden Theatre (London) Ltd v Millenium Productions Ltd [1948] AC 173; [1947] 2 All ER 331 …. [3.8] Wintergarden Theatre Ltd v Baxter & Webb [1929] QWN 6 …. [16.2], [17.18] Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97; 111 ALR 649 …. [1.15] Wirral Estates Ltd v Shaw [1932] 2 KB 247 …. [16.19] Wisbech St Mary Parish Council v Lilley [1956] 1 WLR 121 …. [17.21] Witham v Bullock [1939] 2 KB 81 …. [15.19] Withers v Withers (1893) 14 ALT 273 …. [5.18] Wollongong City Council v Barker [1964] NSWR 897; (1964) 81 WN (Pt 1) (NSW) 105 …. [18.4] Wolverhampton & Dudley Breweries plc v Trusthouse Forte Catering Ltd [1984] …. [11.8] Wolveridge v Steward (1833) 1 C & M 644; 149 ER 557 …. [15.21] Wong v Moonwalk Pty Ltd (SC(Vic), Beach J, 6 March 1996, unreported) …. [20.9], [20.17], [20.24] — v Silkfield Pty Ltd [1999] HCA 48 …. [24.14], [28.12] Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 …. [1.2], [6.10], [11.17], [14.1], [16.1], [16.2], [16.11], [16.18], [16.21], [16.28], [16.30], [16.31], [16.35] Wood, Ex parte (1889) 6 WN (NSW) 78 …. [3.9] — v Browne [1984] 2 Qd R 593 …. [15.16] Woodall v Clifton [1905] 2 Ch 257 …. [15.20] Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 …. [16.34] Woodcock v Nuth (1832) 8 Bing 170; 131 ER 365 …. [16.21] Woodford Nominees Pty Ltd v Masjakan Medical Pty Ltd [1998] ANZ Conv Rep 254 …. [4.1], [4.8], [11.1]

Woodhouse A C Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 …. [2.16] Woodhouse, Ex parte; Re Teece (1969) 72 WN (NSW) 193 …. [26.4] — v Ah Peck (1900) …. [11.28] — v Walker (1880) 5 QBD 404 …. [10.3] Woodroffe v Box (1954) 92 CLR 245 …. [14.4] Woods & Co Ltd v City and West End Properties (1921) 23 TLR 98 …. [11.2] Woods v Moses [1953] ALR 1165 …. [1.8], [1.9], [15.2] — v Pope (1835) 6 C & P 782; 172 ER 1461 …. [10.13] Woodward v Earl of Dudley [1954] 1 Ch 283; 1 All ER 559 …. [20.15], [20.22] Woolley, Ex parte (1870) 9 SCR (NSW) 305 …. [3.9] — v Clark (1822) 5 B and Ald 744; 106 ER 1363 …. [5.18] Woolwich Equitable Building Society v Preston [1938] Ch 129 …. [17.12] Woolworth & Co v Rambert [1937] Ch 39; [1936] 1 All ER 333 …. [15.10] Woolworths Ltd v Campbells Cash and Carry Pty Ltd (1996) …. [23.18] — v Merost Pty Ltd (1988) …. [11.8], [11.20] — v — (1998) …. [11.20] Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1970, unreported) …. [18.6] — v — (SC(Vic), Adam J, 25 June 1971, unreported) …. [10.8], [10.10], [10.13], [17.17] Wordsley Brewery Co v Halford (1903) 90 LT 89 …. [1.9] World Best Holdings Ltd v Sarker (2010) 14 BPR 27,549; [2010] NSWCA 24 …. [16.35], [18.2], [24.6] World by Nite Pty Ltd v Michael [2004] 1 Qd R 338 …. [19.1], [19.2], [19.4] Wright v Edwards [1961] SASR 267 …. [24.2], [25.2] — v Gibbons (1949) 78 CLR 313; [1949] ALR 287 …. [5.15]

— v Smith (1805) 5 Esp 203; 170 ER 786 …. [17.17] — v Trude (1922) 25 WALR 121 …. [13.13] — v West Australian Trustee and Agency Co Ltd [1987] VR 771 …. [16.32] Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2012] QSC 182 …. [6.5] WST Pty Ltd v GRE Pty Ltd [2012] 115 SASR 216 …. [27.2] Wu v Glaros (1991) 55 SASR 408 …. [4.8], [6.8] — v Hawsher [2002] NSWADT 54 …. [24.14], [28.12] Wycombe Area Health Authority v Barnett (1982) Times, 29 July …. [10.8] Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 …. [1.6], [1.15], [2.15], [2.19] Wynsix Hotels (Oxford St) Pty Ltd v Toomey [2004] NSWSC 236 …. [19.2], [19.4] Wynyard Investments Ltd v Metropolitan Water Board (1953) 19 LGR 26 …. [3.3] Xanthos v Raineri (VCAT, Deputy President Macnamara, 13 May 2005, unreported) …. [23.57] Xclusive Pty Ltd v Christian Brothers Inc [2001] SASC 380 …. [27.3] Xiao v Perpetual Trustees Pty Ltd [208] VSC 412 …. [23.30] Xin v Zakos [2002] NSWADT 189 …. [24.3] Yanchep Sun City Pty Ltd v Commissioner of State Taxation (WA) (1984) 84 ATC 4761; (1984) 15 ATR 1165 …. [11.1] Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) CLR 410 …. [6.9] Yared v Spier [1979] 2 NSWLR 291 …. [13.16], [15.8], [15.9] Yates v Morris [1951] 1 KB 77 …. [7.14] — v Dunster (1855) 11 Exch 15; 156 ER 726 …. [10.13] Yellowly v Gower (1855) 11 Ex 274 …. [10.3]

Yeoman Credit Ltd v Waragouski [1961] 1 WLR 1124; [1961] 3 All ER 145 …. [16.30] York Airconditioning and Refrigeration (A/sia) Pty Ltd v Commonwealth (1949) 80 CLR 11 …. [4.2], [4.8] York Glass Co v Jubb (1925) 134 LT 36; [1925] All ER Rep 285 …. [5.4] York House Pty Ltd v Federal Commissioner of Taxation (1930) 43 CLR 427 …. [2.8], [4.8] Yorkbrook Investments Ltd v Batten (1985) 18 HLR 35; [1985] 2 EGLR 100 …. [7.4] Yorke v Lucas (1985) 158 CLR 661 …. [12.9] Young v Ashley Gardens Properties Ltd [1903] 2 Ch 112 …. [15.9], [15.11] Young v Dalgety plc [1987] 1 EGLR 116 …. [10.5] — v Kitchen (1878) 3 Ex D 127 …. [7.4] — v Lalic [2006] NSWSC 18 …. [15.17] — v Lamb (2001) 10 BPR 18,553; [2001] NSWCA 225 …. [14.8], [23.57] — v — [No 2] [2001] NSWSC 1014 …. [16.30] — v Tilley [1913] SALR 13 …. [10.1] Youngmin v Heath [1974] 1 WLR 135 …. [2.13], [2.21], [11.23] Zacharia v Ajay Investments Pty Ltd and Chan (1982) ANZ ConvR 651 …. [1.15], [14.1], [14.6], [14.8] Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171 …. [12.9] — v — (1996) …. [12.9] Zaoud v Musico [2001] NSWADT 58 …. [24.18] Zegir v Woop [1955] …. [11.28] Zeus & Ra Pty Ltd v Nicolaou (2003) 6 VR 606; V ConvR ¶54-673 …. [23.64] Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 …. [10.13] Zis, Re [1961] WAR 120 …. [10.13]

Zorbas v McNamara [1960] NSWR 428; (1960) 77 WN (NSW) 561 …. [16.13] — v — [1962] NSWR 53; [1962] SR (NSW) 159; (1962) 79 WN (NSW) 52 …. [16.14] Zouch v Parsons (1765) 3 Burr 1794; 97 ER 1103 …. [5.3] Zunneberg v Batt [1948] VLR 107 …. [3.9] 112 Acland Street Pty Ltd v ANZ Banking Group Ltd (2002) 3 Ex D 127 …. [7.16] 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193 …. [1.6], [4.3], [5.8], [14.1], [15.18], [16.17], [26.8] — v —; Ivermee [1969] …. [14.5] 33 Bank Street Nominees Pty Ltd v Citipower Pty Ltd (1997 unreported) …. [11.3], [11.6], [11.8] 34th Enterprise Pty Ltd v Leggetts Tennis & Squash Centre (1999) V ConvR ¶58-538; [1999] VCAT 15 …. [23.48] 409 Lonsdale Street Pty Ltd v Carra [1974] VR 887 …. [1.8], [14.4], [15.1], [15.2] 536 Swanston Street Pty Ltd v Harbrut Pty Ltd (1988) V ConvR ¶54-323 …. [23.18], [23.19] 7-Eleven Stores Pty Ltd v United Petroleum Pty Ltd [2010] QSC 469 …. [25.3] 8 Parriwi Road Pty Ltd v Raffan [1970] …. [14.6]

Table of Statutes References are to paragraphs

UNIFORM COMMERCIAL ARBITRATION ACT …. [14.7] UNIFORM COMPANIES ACTS s 35 …. [5.8] s 123(12) …. [5.8] s 123(13) …. [5.8] COMMONWEALTH Acts Interpretation Act 1901 s 22(1)(c) …. [12.11] Australian Consumer Law …. [12.1], [12.14], [12.16], [23.58] Ch 2 …. [12.1], [12.8], [12.15] Ch 2, Pt 2.2 …. [12.14] Ch 3 …. [12.1], [12.11], [12.15] Pt 4.6 …. [12.15] s 2 …. [12.9], [12.11] s 9 …. [12.16] s 16 …. [12.16] s 18 …. [12.10], [12.15], [12.16], [14.4], [24.3], [26.3], [28.3], [28.6] s 21 …. [12.14], [24.6], [25.6], [25.13], [27.3] s 21(4) …. [12.14] s 22 …. [12.14] s 29 …. [12.10]

s 30 …. [12.11] s 30(1) …. [12.11] s 34 …. [12.13] s 37(2) …. [12.13] s 151 …. [12.10] s 152(1) …. [12.11] s 224 …. [12.15] Bankruptcy Act 1966 …. [17.21] s 133 …. [16.25] s 134(ab) …. [5.11] s 135(1)(c) …. [5.11] s 135(4) …. [5.11] Commonwealth of Australia Constitution s 51(xx) …. [12.1] s 109 …. [12.16] Companies Act 1981 ([state] Codes) s 454 …. [16.25] Competition and Consumer Act 2010 …. [7.8], [12.1], [12.2], [12.6], [15.20], [20.1] Pt IV …. [12.1], [12.2], [12.5], [25.6] s 4 …. [12.11] s 18 …. [24.6] s 21 …. [24.6] s 45 …. [7.8] s 45B(1) …. [12.3] Corporations Act 2001 …. [5.8], [15.3], [17.21], [20.27], [26.2], [26.12] s 9 …. [5.8], [5.10], [23.18], [23.21], [23.22], [26.2] s 57A(2) …. [5.8] s 109X …. [20.27]

s 124 …. [5.8] s 125 …. [5.8] s 125(1) …. [5.8] s 125(2) …. [5.8] s 126 …. [5.8], [16.12] s 126(1) …. [16.12] s 127 …. [16.12] s 127(1) …. [16.12], [20.11] s 127(4) …. [16.12] s 129(4) …. [5.8] s 220 …. [11.9] s 258B …. [5.8] s 262 …. [16.36] s 419(1) …. [5.10] s 419A …. [5.10] s 419A(2) …. [5.10] s 419A(3) …. [5.10] s 419A(7) …. [5.10] s 419A(8) …. [5.10] s 420(2) …. [5.10] s 420(2)(b) …. [5.10] s 442C …. [5.9] s 443B(2) …. [5.9] s 443B(3) …. [5.9] s 443B(9) …. [5.9] s 447D …. [5.9] s 4601CY …. [5.8] s 477 …. [5.9] s 477(1)(a) …. [5.9]

s 477(2)(m) …. [5.9] s 506 …. [5.9] s 568 …. [16.25] s 568A …. [16.25] s 568B …. [16.25] s 568F …. [16.25] Sch 2, s 90–20 …. [5.9] Corporations Law …. [17.21] s 436A …. [18.5] s 440C …. [18.5] s 568 …. [16.25] Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 s 12 …. [5.2] s 67 …. [5.2] Insurance Contracts Act 1984 s 3(1) …. [10.1] National Security (Landlord and Tenant) Regulations …. [3.4] Restrictive Trade Practices Act 1971 …. [12.2] Restrictive Trade Practices Act 1972 …. [12.2] Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010 …. [12.1] Trade Practices Act 1974 …. [6.5], [7.8], [12.1], [12.9], [12.14], [15.20], [20.1], [24.6] Pt IV …. [12.1], [12.2], [12.5] Pt IVA …. [12.1], [12.14], [24.6], [25.6] Pt V …. [12.1], [12.14] Pt V, Div 1 …. [12.15] s 4(1) …. [12.3], [12.8] s 4(2)(a) …. [12.9]

s 4H …. [12.2], [12.5] s 45 …. [7.8], [12.2], [12.5], [12.7] s 45B …. [12.3], [12.5] s 45B(1) …. [12.3] s 45B(2) …. [12.3] s 45B(3) …. [12.3] s 45B(9) …. [12.3], [12.4] s 46 …. [12.5] s 47 …. [12.2], [12.4], [12.5], [12.7] s 47(1) …. [12.4] s 47(8) …. [12.4] s 47(9) …. [12.2], [12.4] s 47(10) …. [12.4] s 47(11) …. [12.4] s 51A …. [12.10] s 51A(1) …. [12.10] s 51AA …. [12.1], [12.14] s 51AB …. [12.14], [12.10], [12.13], [12.15], [23.39] s 51AB(1) …. [12.13] s 51AB(5) …. [12.14] s 51AC …. [12.14], [23.56], [24.6], [25.6], [28.6] s 52 …. [14.4] s 52(1) …. [24.3] s 53 …. [12.10], [12.13], [12.15], [23.40] s 53(e) …. [12.10] s 53A …. [12.11], [12.15] s 53A(1) …. [12.10], [12.12] s 53A(1)(b) …. [12.10], [12.12] s 53A(2) …. [12.12]

s 55 …. [12.15] s 55A …. [12.13], [12.15] s 55A(1) …. [12.12], [12.13] s 59 …. [12.15] s 59(2) …. [12.13] s 75 …. [12.16] s 75(2) …. [12.16] s 79 …. [12.14] s 79(1) …. [12.9] s 80(1) …. [12.9] s 85 …. [12.14] s 85(1) …. [12.14] s 87(1) …. [12.9] s 90(7) …. [12.4] s 93(1) …. [12.4] s 93(3) …. [12.4] s 93(7)(b) …. [12.4] s 93A …. [12.4] s 163A …. [12.6] AUSTRALIAN CAPITAL TERRITORY Civil Law (Property) Act 2006 …. [28.16] Commercial and Retail Lease Code …. [28.1] Fair Trading Act 1992 …. [12.15], [20.1] s 12 …. [12.15] s 13 …. [12.15] s 14 …. [12.15] s 15 …. [12.15] s 20 …. [12.15]

s 25 …. [12.15] Fair Trading (Australian Consumer Law) Amendment Act 2010 (ACT) s 7(1) …. [12.16] Forfeiture of Leases Act 1901 …. [18.6] Landlord and Tenant Act 1969 s 40 …. [11.3] Land Titles Act 1925 …. [28.5] s 77 …. [12.3] s 78 …. [12.3] Leases (Commercial and Retail) Act 2001 …. [28.1], [28.14] Pt 7 …. [28.7] Pt 7, Div 8.1 …. [28.9] Pt 11 …. [28.15] Pt 14 …. [28.17] s 4 …. [28.2] s 5 …. [28.3] s 7(3) …. [28.2] s 8(1) …. [28.2] s 10 …. [28.2], [28.8] s 12(1) …. [28.2] s 12(1)(k) …. [28.2] s 12(2) …. [28.2] s 12(5) …. [28.2] s 12(7) …. [28.2] s 13 …. [28.2] s 22 …. [28.6] s 22(1) …. [28.6] s 22(2) …. [28.6] s 23(1) …. [28.5]

s 23(2) …. [28.5] s 25 …. [28.4] s 26 …. [28.14] s 27 …. [28.14] s 28 …. [28.4] s 30 …. [28.3] s 30(2) …. [28.3] s 30(3) …. [28.3] s 30(4) …. [28.3] s 30(5) …. [28.3] s 31 …. [28.3] s 32 …. [28.3] s 36 …. [28.3] s 38(1) …. [28.5] s 38(2) …. [28.5] ss 39–45 …. [28.7] s 39(1) …. [28.7] s 40 …. [28.7] s 41 …. [28.7] s 42 …. [28.7] s 42(b) …. [28.7] s 43 …. [28.7] s 44 …. [28.7] s 45 …. [28.7] ss 46–60 …. [28.9] s 47(1) …. [28.9] s 47(2) …. [28.9] s 51(2) …. [28.9]

s 52 …. [28.9] s 52(2) …. [28.9] s 52(4) …. [28.9] s 53(1) …. [28.9] s 54 …. [28.9] s 61 …. [28.10] ss 61–64 …. [28.10] s 62 …. [28.10] s 62(1) …. [28.10] s 63 …. [28.10] s 64 …. [28.10] s 65 …. [28.11] ss 65–72 …. [28.11] s 65(1)(a) …. [28.11] s 65(1)(b) …. [28.11] s 66(1) …. [28.11] s 66(2) …. [28.11] s 67 …. [28.11] s 70(1) …. [28.11] s 72(1) …. [28.11] s 73(1) …. [28.14] s 73(2) …. [28.14] s 75 …. [28.11] s 76 …. [28.11] s 77 …. [28.11] s 78(a) …. [28.12] s 78(b) …. [28.12] s 79 …. [28.12] s 80 …. [28.12]

s 81 …. [28.12] s 81(2) …. [28.12] s 84 …. [28.12] s 85 …. [28.12] s 87C …. [5.16] s 89 …. [28.16] s 90 …. [28.16] s 93 …. [28.15] ss 93–103 …. [28.15] s 95 …. [28.15] s 96 …. [28.15] s 98(1) …. [28.15] s 98(2) …. [28.15] s 99(2) …. [28.15] s 99(4) …. [28.15] s 100(1) …. [28.15] s 100(2) …. [28.15] s 100(3) …. [28.15] s 102(1) …. [28.15] s 103 …. [28.15] s 104 …. [28.8] s 104(1)(b) …. [28.8] s 104(2) …. [28.8] s 104(3) …. [28.8] s 104(6) …. [28.8] s 104(7) …. [28.8] s 105(2) …. [28.8] s 105(3) …. [28.8]

s 105(5) …. [28.8] s 107 …. [28.16] s 113 …. [28.16] ss 113–127 …. [28.16] s 114 …. [28.16] s 115 …. [28.16] s 115(2) …. [28.16] s 116 …. [28.16] s 117 …. [28.16] s 119(1) …. [28.16] s 120 …. [28.16] s 121 …. [28.16] s 122(1) …. [28.16] s 122(2) …. [28.16] s 122(4) …. [28.16] s 123(1) …. [28.16] s 123(3) …. [28.16] s 123(4) …. [28.16] s 129 …. [28.14] ss 131–133 …. [28.13] s 131(2) …. [28.13] s 131(3) …. [28.13] s 132(2) …. [28.13] s 132(3) …. [28.13] s 133 …. [28.13] ss 136–138 …. [28.13] s 136(1) …. [28.13] s 136(1)(a) …. [28.13] s 136(1)(d) …. [28.13]

s 137 …. [28.13], [28.14] s 138(1) …. [28.13] ss 139–140 …. [28.13] s 139(1) …. [28.13] s 140 …. [28.13] s 141 …. [28.14] s 142 …. [28.14] s 144 …. [28.17] s 144(3) …. [28.17] s 147 …. [28.17] s 148 …. [28.17] s 149 …. [28.17] s 151 …. [28.17] s 154 …. [28.17] s 155 …. [28.17] s 157A …. [28.3] Dictionary …. [28.2], [28.5] Sch 1 …. [28.9] Sch 1, Cl 1.1 …. [28.9] Sch 1, Cl 1.2 …. [28.9] Sch 1, Cl 1.3 …. [28.9] Sch 1, Cl 1.11 …. [28.9] Leases (Commercial and Retail) Regulations 2002 …. [28.1] reg 3 …. [28.2] reg 4 …. [28.2] Magistrates Court Act 1930 …. [28.17] Retail Tenancy Tribunal Act 1994 …. [28.1] Statute Law Amendment Act 2015 …. [28.15]

Unit Titles Act 2001 …. [28.2] NEW SOUTH WALES Administrative Decisions Tribunal Act 1997 Sch 2, Cl 1 …. [24.6] Sch 2, Cl 4 …. [24.6] Agricultural Tenancies Act 1990 s 10 …. [10.5] City of Sydney Improvement Act 1879 …. [10.1] Conveyancing Act 1919 …. [24.19] Pt VIII, Div 4 …. [14.6] s 6 …. [17.20] s 10 …. [16.8] s 12 …. [15.20] s 23A(1) …. [16.14] s 23A(3) …. [16.14] s 23B …. [1.6] ss 23B–23D …. [15.17], [16.12] s 23B(1) …. [1.6], [15.17], [16.14] s 23B(2)(c) …. [16.12] s 23B(2)(d) …. [15.17] s 23B(3) …. [16.14] s 23C …. [1.6] s 23C(1)(a) …. [1.6], [16.14] s 23D …. [1.6] s 23D(1) …. [1.6] s 23D(2) …. [1.6] s 23H(3) …. [16.14] s 23S(1) …. [15.17]

s 24 …. [5.15] s 38(3) …. [1.6] s 44(2) …. [5.15] s 54A …. [1.6], [4.3], [14.5] s 66D …. [5.17] s 70 …. [15.18], [15.20] s 70A …. [15.18], [15.20] s 74 …. [7.1] s 84 …. [7.1] s 85 …. [7.1], [17.20] s 85(1)(d) …. [17.14] s 86 …. [7.1] s 106 …. [5.16] s 106(16) …. [5.10] s 107 …. [5.16] s 117 …. [20.8] ss 117–118 …. [15.19] s 117(1) …. [15.20], [20.8] s 119 …. [20.16] s 120 …. [7.7], [17.18] s 120A(1) …. [1.16] s 120A(3) …. [1.10] s 120A(5) …. [1.9] s 121 …. [16.3] s 122 …. [16.3], [16.10] s 123 …. [7.7], [17.18] s 125 …. [1.14], [11.3] s 127 …. [1.6], [2.8] s 127(1) …. [1.6], [2.14], [2.19], [15.16], [20.6]

s 129 …. [2.5], [13.11], [16.30], [16.35], [17.20], [18.2], [18.3], [19.1], [19.2] s 129(1) …. [14.6], [16.35], [17.15], [18.1], [18.2], [19.2] s 129(2) …. [19.4] s 129(2A) …. [18.2] s 129(3) …. [18.3] s 129(6) …. [18.3], [19.1] s 129(6)(d) …. [18.3] s 129(6)(e) …. [19.6] s 129(8) …. [18.3], [19.2] s 129(9) …. [18.2], [18.6] s 129(10) …. [18.2] s 130 …. [19.6] s 133A(1) …. [10.13] s 133A(2) …. [17.15], [18.1] s 133B …. [15.6], [15.9], [15.13], [15.15], [24.18] s 133B(1)(a) …. [7.11] s 133C …. [14.6] ss 133C–133G …. [14.6] s 133E …. [14.6] s 133E(1)(b) …. [14.6] s 133E(2) …. [14.6] s 133E(3) …. [14.6] s 133F …. [14.6] s 133F(2) …. [14.6] s 133F(3) …. [14.6] s 133F(4) …. [14.6] s 133G …. [14.6] s 134(1) …. [11.27]

ss 135–141 …. [5.19] s 142 …. [16.22] s 144 …. [11.3], [16.22] s 146A …. [5.2] s 151C …. [5.17] s 153 …. [5.18] s 170 …. [11.9], [14.8], [14.10], [18.10] Sch 4, Pt 11 …. [7.1], [10.3], [15.9] Sch 6 …. [18.6], [18.9] Conveyancing (Amendment) Act 1972 …. [14.6] Crown Land Management Act 2016 s 5.16 …. [5.6] Crown Proceedings Act 1988 …. [5.6] Fair Trading Act 1987 …. [12.15], [20.1], [24.1] s 42 …. [12.15] s 43 …. [12.15] s 44 …. [12.15] s 45 …. [12.15] s 50 …. [12.15] s 54 …. [12.15] Fair Trading Amendment (Australian Consumer Law) Act 2010 s 28 …. [12.16] Frustrated Contracts Act 1978 …. [6.10] Hire Purchase Act 1960 s 35 …. [10.5] Imperial Acts Application Act 1969 …. [17.17] ss 18–20 …. [21.3] Interpretation Act 1987

s 76 …. [14.10] Landlord and Tenant Act 1899 …. [19.2] s 8 …. [11.24], [17.14], [19.3] ss 8–10 …. [11.25], [19.3] s 8(3) …. [19.3] s 9 …. [19.3] s 10 …. [19.3], [19.6] s 22A …. [2.8] Landlord and Tenant Amendment Act 1948 …. [1.5] Landlord and Tenant Amendment (Distress Abolition) Act 1930 …. [11.3] Liquor Act 2007 …. [6.9] s 91 …. [5.20] s 92 …. [5.20] s 92(1) …. [5.20] s 92(1)(c) …. [5.20] s 92(1)(d) …. [5.20], [6.9] Local Government Act 1919 s 327AA …. [1.15] s 327AA(2) …. [1.6] Married Persons (Equality of Status 96 NSW Trustee and Guardianship Act 2009 NSW Trustee and Guardianship Act 2009 s 16 …. [5.4] Powers of Attorney Act 2003 s 43 …. [5.13] Public Trustee Act s 18A …. [16.20] Real Property Act 1900 …. [1.5], [15.17], [24.9] s 7(1) …. [16.14]

s 36 …. [12.3] s 41(1)(d) …. [14.5] s 42 …. [6.8] s 42(1)(d) …. [1.6], [4.8], [5.16] s 43 …. [6.8] s 43A …. [1.15] s 51 …. [12.3] s 52 …. [6.8], [12.3] s 53(4) …. [5.16] s 54 …. [16.12] s 55 …. [17.20], [19.2] s 60 …. [7.4], [15.20] s 63 …. [7.4] s 79(b) …. [17.14] s 81(1) …. [24.9] s 81(3) …. [24.9] s 85(2) …. [17.14] Residential Tenancies Act 1987 …. [10.1], [24.8] s 4 …. [10.1] s 8(1) …. [10.1] s 8(4) …. [10.1] Residential Tenancies Act 2010 …. [24.8] Residential Tenancies Regulations 2006 Pt 4 …. [10.1] Residential Tenancies (Residential Premises) Regulations 1995 …. [16.36] Retail Leases Act 1994 …. [24.1], [24.6], [24.8], [24.19], [27.1] Pt 2A …. [24.7] Pt 8 …. [24.2], [24.20] s 3 …. [24.2], [24.5]

s 5 …. [24.2] s 5(a) …. [24.2] s 5(e) …. [24.2] s 6 …. [24.2] s 6(1) …. [24.2] s 6(1)(a) …. [24.2] s 6(1)(c) …. [24.2] s 6(1)(d) …. [24.2] s 6(1)(e) …. [24.2] s 6A …. [24.2] s 8 …. [24.3] s 8(1) …. [24.3] s 8(2) …. [24.3] s 9 …. [24.4] s 10 …. [24.3] s 10(1) …. [24.3] s 10(2) …. [24.3] s 10(3) …. [24.3] s 11 …. [24.3], [24.12] s 11(1) …. [24.3] s 11(1)(c) …. [24.3] s 11(1)(d) …. [24.3] s 11(2) …. [24.3] s 11(2)(A) …. [24.3] s 11(3) …. [24.3] s 11(5) …. [24.3] s 11A(1) …. [24.3] s 11A(3) …. [24.3]

s 12 …. [24.17] s 12A …. [24.12] s 12A(2)(a) …. [24.12] s 12A(4) …. [24.12] s 14(1) …. [24.5] s 14(2) …. [24.5] s 14(3) …. [24.5] s 14(4) …. [24.5] s 16 …. [24.9], [24.16] s 16(1) …. [24.9] s 16(2) …. [24.9] s 16(3) …. [24.9] s 16(4) …. [24.9] s 16(5) …. [24.9] ss 16A–16ZC …. [24.7] s 16B …. [24.7] s 16C …. [24.7] s 16C(7) …. [24.7] s 16D …. [24.7] s 16G …. [24.7] s 16H …. [24.7] s 16I …. [24.7] s 16O …. [24.7] s 16U …. [24.7] s 16V …. [24.7] s 17(2)(a) …. [24.12] s 17(2)(b) …. [24.12] s 18 …. [24.10] s 18(1) …. [24.10]

s 18(2) …. [24.10] s 18(4) …. [24.10] s 19 …. [24.10] s 19(a) …. [24.10] s 19(d) …. [24.10] s 20 …. [24.11] s 20(1) …. [24.11] s 20(2) …. [24.11] s 20(3) …. [24.11] s 20(4) …. [24.11] s 21 …. [24.12] s 23 …. [24.12] s 24 …. [24.12] s 24A …. [24.12] s 24B …. [24.12] s 25 …. [24.12] s 25(b)–(c) …. [24.12] s 25A …. [24.12] s 27 …. [24.12] ss 27–30 …. [24.12] s 27(a) …. [24.12] s 27(b) …. [24.12] s 28 …. [24.12] s 28(a) …. [24.12] s 28(b) …. [24.12] s 28(e) …. [24.12] s 28A …. [24.12] s 29 …. [24.12]

s 29(a) …. [24.12] s 29(c) …. [24.12] s 30 …. [24.12] s 30(1) …. [24.12] s 30(2) …. [24.12] s 31 …. [24.10] s 31(a) …. [24.10] s 31(b) …. [24.10] s 32 …. [24.10] s 32(1)(a) …. [24.10] s 32(1)(c) …. [24.10] s 32(2) …. [24.10] s 32A …. [24.10] s 32A(1) …. [24.10] s 32A(2) …. [24.10] s 32A(11) …. [24.10] s 32A(12) …. [24.10] s 33 …. [24.14] ss 33–36 …. [24.13] s 34 …. [24.14] s 34(1) …. [24.14] s 34(1)(a)–(d) …. [24.8], [24.14] s 34(2) …. [24.14] s 34(3) …. [24.14] s 34(4)(a) …. [24.14] s 34(4)(b) …. [24.14] s 34A …. [24.13], [24.15] s 34A(a) …. [24.15] s 34A(b) …. [24.15]

s 34A(c) …. [24.15] s 34A(f) …. [24.15] s 35(1) …. [24.14] s 35(1)(b) …. [24.14] s 35(1)(c) …. [24.14] s 35(2) …. [24.14] s 35(4) …. [24.14] s 36 …. [24.14] s 36(1)(c) …. [24.19] s 36(1)(d) …. [24.19] s 36(1)(e) …. [24.19] s 37 …. [24.16] s 39 …. [24.18] ss 39–42 …. [24.18] s 39(2) …. [24.18] s 40 …. [24.18] s 40(1) …. [24.5] s 40(2) …. [24.5] s 41 …. [24.18] s 41(c) …. [24.18] s 41(d) …. [24.18] s 42 …. [24.18] s 43 …. [24.18] s 44(1) …. [24.19] s 44(2) …. [24.19] s 44(3) …. [24.19] s 44(5) …. [24.19] s 45(1) …. [24.5]

s 45(2) …. [24.5] s 46 …. [24.17] s 47 …. [24.7] s 48 …. [24.16] s 50 …. [24.16] s 52 …. [24.17] s 53 …. [24.15] ss 53–56 …. [24.15] ss 53–61 …. [24.13] s 54 …. [24.15] s 55 …. [24.15] s 56 …. [24.15] s 57 …. [24.15] s 57(a) …. [24.15] s 57(b) …. [24.15] s 57(c) …. [24.15] s 57(d) …. [24.15] s 57(f) …. [24.15] s 58 …. [24.16], [24.19] s 59 …. [24.16] s 60 …. [24.16] s 61 …. [24.15] s 61(1) …. [24.15] s 61(2) …. [24.15] s 61(4) …. [24.15] s 62A(2) …. [24.6] s 62B …. [24.6] s 62B(1) …. [24.6] s 62B(2) …. [24.6]

s 62B(3) …. [24.6] s 62B(4) …. [24.6] s 62D …. [24.6] s 63 …. [24.20] s 63(1) …. [24.20] s 63(2) …. [24.20] s 63(2)(b) …. [24.2] s 64 …. [24.20] s 64(1) …. [24.20] s 65(1)(a) …. [24.20] ss 66–67 …. [24.20] s 66(1) …. [24.20] s 67(1) …. [24.20] s 68(1) …. [24.20] s 71 …. [24.20] s 72 …. [24.20] s 72(2)–(4) …. [24.20] s 72A …. [24.20] s 73 …. [24.20] s 75(1) …. [24.20] s 76(3) …. [24.20] s 76(4) …. [24.20] s 77(1) …. [24.20] s 80E …. [24.18] s 82 …. [24.2] s 83 …. [24.2] s 84 …. [24.16] Sch 1 …. [24.2]

Sch 2 …. [24.3], [24.12] Sch 2, Pt 1 …. [24.3] Sch 2, Pt 2 …. [24.3] Sch 3, Cl 20 …. [24.3] Retail Leases Amendment Act 1998 …. [24.6] Retail Leases Amendment (Review) Act 2017 …. [24.1] s 6B …. [24.2] Strata Schemes (Freehold Development) Act 1973 …. [24.2] Strata Schemes (Leasehold Development) Act 1986 …. [24.2] Supreme Court Act 1970 …. [11.25] s 68 …. [1.15] s 73 …. [19.3] Trustee Act 1925 ss 36–38 …. [5.17], [5.18] s 61 …. [5.18] s 81 …. [5.17], [5.18] Uncollected Goods Act 1995 …. [16.36] Western Lands Act 1901 …. [19.1], [19.4] Wills Probate and Administration Act 1898 s 57 …. [5.18] NORTHERN TERRITORY Consumer Affairs and Fair Trading Act 1990 …. [12.15], [20.1] s 42 …. [12.15] s 43 …. [12.15] s 44 …. [12.15] s 45 …. [12.15] s 48 …. [12.15] s 49 …. [12.15]

Consumer Affairs and Fair Trading Amendment (National Uniform Legislation) Act 2010 s 27 …. [12.16] QUEENSLAND Acts Interpretation Act 1954–1977 s 40 …. [18.6] Crimes Act 1928 s 2 …. [21.3] s 197 …. [21.3] Criminal Code Act 1899 …. [21.3] s 70 …. [21.3] s 71 …. [21.3] Crown Proceedings Act 1980 …. [5.6] Fair Trading Act 1989 …. [12.15], [20.1] s 38 …. [12.15] s 39 …. [12.15] s 40 …. [12.15] s 40A …. [12.15] s 45 …. [12.15] s 49 …. [12.15] Fair Trading (Australian Consumer Law) Amendment Act 2010 (Queensland) s 18 …. [12.16] Fire Brigades Act Amendment Act 1983 …. [7.16] Judicature Act 1876 s 5(4) …. [16.8] Land Act 1962 s 274(2)(a) …. [15.16] Land Act 1994 …. [5.6], [15.16]

Land Title Act 1994 s 62 …. [12.3] s 66 …. [5.16] s 78(2) …. [15.20] s 170(1)(b) …. [4.8], [14.5] s 185(1)(b) …. [4.8], [5.16] Land Valuation Act 2010 …. [11.5] s 297 …. [11.5] Married Women (Restraint upon Anticipation) Act 1952 s 2 …. [5.5] Married Womens Property Act 1890 …. [5.5] Penalties and Sentences Act 1992 s 5(1) …. [25.4] Power of Attorney Act 1998 s 69 …. [5.13] Property Law Act 1974 …. [25.17] s 10 …. [1.6] ss 10–12 …. [15.17], [16.12] s 10(2)(b) …. [16.12] s 10(2)(c) …. [15.17] s 11 …. [1.6] s 12 …. [1.6] s 12(2) …. [1.6] s 15A …. [5.2] s 45(2) …. [1.6] s 47 …. [1.6] s 53(1) …. [15.18], [15.20] s 53(2) …. [15.18], [15.20] s 58 …. [10.1]

s 59 …. [1.6], [4.3], [14.5] s 102(1) …. [1.16] s 102(3) …. [1.10] s 103 …. [11.3], [16.36] s 109 …. [7.1] s 112(1) …. [10.13] s 116 …. [20.16] s 117 …. [7.4], [15.20] ss 117–118 …. [15.19] s 117(2) …. [7.4] s 119 …. [7.7], [17.18] s 121 …. [7.11], [15.6], [15.15], [25.16] s 121(3) …. [7.8] ss 123–128 …. [11.25], [14.6] s 124 …. [2.5], [13.11], [17.20] s 124(1) …. [17.15], [18.1], [18.2] s 124(2) …. [19.4] s 124(6) …. [18.3], [19.1] s 124(6)(d) …. [18.3] s 124(6)(e) …. [19.6] s 124(7) …. [18.11], [19.1] s 124(8) …. [18.2], [18.6] s 124(9) …. [18.2] s 125 …. [19.6] s 127 …. [18.2] s 128 …. [14.6] s 129 …. [2.8] s 129(1) …. [1.6], [2.14], [15.16], [20.6]

s 131 …. [2.8] s 132 …. [20.29] s 133(2) …. [2.8] s 138 …. [17.17] s 139 …. [17.17] s 199 …. [15.20] ss 231–233 …. [16.22] s 232 …. [11.3] s 347 …. [18.10] Sch 2, Form 10 …. [18.2] Sch 3 …. [7.1] Real Property Act 1861 s 60 …. [7.4], [15.20] s 70(1) …. [7.11], [7.16] Residential Tenancies Act 1994 …. [25.7] Retail Shop Leases Act 1984 …. [25.1] Pt IV …. [25.1] Pt V …. [25.1] Retail Shop Leases Act 1994 …. [25.1], [25.6], [25.7], [25.14], [25.17] Pt 8 …. [25.8], [25.16], [25.18] Pt 9 …. [25.16], [25.18] s 3 …. [25.1] s 5 …. [25.2], [25.5], [25.8], [25.18] s 5A …. [25.2] s 5A(1) …. [25.2] s 5A(2) …. [25.2] s 5A(3) …. [25.2] s 5B …. [25.2] s 5D …. [25.12]

s 7 …. [25.10] s 9(1) …. [25.9] s 9(2) …. [25.9] s 10 …. [25.2] s 11 …. [25.2], [25.3] s 12 …. [25.1], [25.2] s 13 …. [25.1], [25.2] s 13(2) …. [25.2] s 14 …. [25.2] s 15 …. [25.15] s 15(1) …. [25.2] s 19 …. [25.15] s 21B …. [25.3] s 21B(1) …. [25.4] s 21C …. [25.3] s 21E …. [25.3] s 21F …. [25.3] s 21F(1) …. [25.4] s 21F(2) …. [25.3] s 21F(5) …. [25.3], [25.4] s 22 …. [25.4], [25.10] s 22(2) …. [25.3], [25.4] s 22A …. [25.10] s 22B …. [25.3], [25.16] s 22C …. [25.3] s 22D …. [25.10] s 22E …. [25.10] s 23 …. [25.4]

s 24(1) …. [25.10] s 24(1)(c) …. [25.10] s 24(3) …. [25.10] s 24(4) …. 25.10 s 25(2) …. [25.9] s 26 …. [25.9] s 26(1) …. [25.9] s 26(2) …. [25.9] s 26(4) …. [25.9] s 26(5) …. [25.9] ss 27–36A …. [25.8] s 27(1) …. [25.8] s 27(1)(d) …. [25.8] s 27(1)(e) …. [25.8] s 27(2) …. [25.8] s 27(4) …. [25.8] s 27(5) …. [25.8] s 27(5)(f) …. [25.8] s 27(7) …. [25.8] s 27(8) …. [25.8] s 27A …. [25.8] s 28 …. [25.8] ss 28–35 …. [25.8] s 28(2) …. [25.8] s 29(1)(b) …. [25.8] s 29(2) …. [25.8] s 30 …. [25.8] s 30(1) …. [25.8] s 30(2) …. [25.8]

s 31 …. [25.8] s 34 …. [25.8], [25.10] s 35 …. [25.8] s 35(1)(a) …. [25.8] s 35(1)(b) …. [25.8] s 35(3) …. [25.8] s 36(b) …. [25.8] s 36(c) …. [25.8] s 36(d) …. [25.8] s 36(e) …. [25.8] s 37 …. [25.10] s 37(1) …. [25.10] s 37(2) …. [25.10] s 37(2)(c) …. [25.10] s 38(1)(a) …. [25.10] s 38(2) …. [25.10] s 39 …. [25.5] s 39(1) …. [25.5], [25.10] s 39(2) …. [25.5], [25.10] s 39(2)(e) …. [25.5] s 39(3) …. [25.5] s 40 …. [25.14] s 40(2) …. [25.14] s 40(3) …. [25.14] s 40(4) …. [25.14] s 40(6) …. [25.14] s 40(7) …. [25.14] s 41(2) …. [25.14]

s 41(3) …. [25.14] s 42 …. [25.13] s 43 …. [25.7], [25.12] s 43(1) …. [25.13] s 43(1)(b)–(d) …. [25.13] s 43(2) …. [25.13] s 43(2)(a) …. [25.13] s 43(2)(b) …. [25.13] s 43(3) …. [25.13] s 43AA …. [25.13] s 43AA(1) …. [25.13] s 44 …. [25.13] s 44A …. [25.13] s 45 …. [25.15] s 45(1) …. [25.15] s 45(2) …. [25.15] s 45(3) …. [25.15] s 46 …. [25.11] s 46(1) …. [25.11] s 46(2) …. [25.11] s 46AA …. [25.11] s 46AA(1) …. [25.11] s 46AA(2) …. [25.11] s 46AA(4) …. [25.11] s 46AA(4A) …. [25.11] s 46AA(6) …. [25.11] s 46A …. [25.6] ss 46A–46B …. [25.6] s 46A(1) …. [25.6]

s 46A(4) …. [25.6] s 46B …. [25.6] s 46C …. [25.17] s 46D …. [25.17] s 46E …. [25.17] s 46E(1) …. [25.17] s 46E(2) …. [25.17] s 46E(3) …. [25.17] s 46H …. [25.17] s 46J …. [25.17] s 46K(1) …. [25.17] s 46K(3) …. [25.17] s 47(1) …. [25.15] s 47(2) …. [25.15] s 48 …. [25.10] s 49 …. [25.15] s 50 …. [25.16] s 50A …. 25.16 s 51 …. [25.15] s 53 …. [25.15] s 53(1) …. [25.15] s 53(2) …. [25.15] s 53(3) …. [25.15] s 53(4) …. [25.15] s 54 …. [25.18] s 55 …. [25.18] s 56 …. [25.18] s 57 …. [25.18]

s 61 …. [25.18] s 63 …. [25.18] s 64 …. [25.18] s 72(1) …. [25.18] s 72(2) …. [25.18] s 74(2) …. [25.18] s 82A(1) …. [25.18] s 83(1) …. [25.18] s 84 …. [25.18] s 85 …. [25.18] s 86 …. [25.18] s 95 …. [25.18] s 97 …. [25.18] s 97(2) …. [25.18] s 97(3) …. [25.18] s 98 …. [25.18] s 102 …. [25.18] s 103 …. [25.18] s 103(1)(c) …. [25.18] s 106 …. [25.18] s 107 …. [25.18] s 109 …. [25.18] s 109(1)(c) …. [25.18] s 115(1) …. [25.18] s 115(2) …. [25.18] s 122 …. [25.1] s 122(3) …. [25.1] Sch …. [25.2], [25.5], [25.8] Retail Shop Leases Regulation 2006 …. [25.1]

reg 4 …. [25.10] reg 8(1) …. [25.2] Sch …. [25.2] Trusts Act 1973 s 32 …. [5.17], [5.18] ss 37–39 …. [5.17], [5.18] ss 57–58 …. [5.17] s 66 …. [5.18] s 94 …. [5.17], [5.18] ss 94–97 …. [5.17] s 95 …. [5.17] Valuation of Land Act 1944 …. [11.5] Valuers Registration Act 1992 …. [25.8] SOUTH AUSTRALIA Administration and Probate Act 1919 s 47(b) …. [5.18] Community Titles Act 1996 …. [27.11] Criminal Law Consolidation Act 1935 s 243 …. [21.3] Crown Proceedings Act 1992 …. [5.6] Fair Trading Act 1987 …. [12.15], [20.1] s 56 …. [12.15] s 57 …. [12.15] s 58 …. [12.15] s 59 …. [12.15] s 64 …. [12.15] s 68 …. [12.15] Guardianship and Administration Act 1993

s 39 …. [5.4] Landlord and Tenant Act 1936 Pt II …. [11.3] Pt IV …. [27.1] s 4 …. [11.25], [19.3] s 4(1) …. [17.14] s 4(2) …. [19.3] s 5 …. [11.25], [19.3] s 7 …. [11.25] s 9 …. [11.25], [19.3] s 10 …. [2.5], [13.11], [17.15], [17.20], [18.1], [18.2] s 11 …. [19.4] s 12(4) …. [27.16] s 12(5) …. [18.3] s 12(6) …. [18.2] s 47 …. [7.7], [17.18] s 50 …. [20.16] Landlord and Tenant (Commercial Tenancies) Regulations …. [27.1] Law of Property Act 1936 …. [27.17] s 5 …. [19.6] s 13 …. [16.8] s 15 …. [15.20] s 24 …. [5.2] s 26 …. [1.6], [4.3], [14.5] s 28 …. [1.6] ss 28–30 …. [15.17], [16.12] s 28(2)(c) …. [16.12] s 28(2)(d) …. [15.17] s 29 …. [1.6]

s 30 …. [1.6] s 30(2) …. [1.6] s 40(3) …. [5.15] s 41(5) …. [1.6] ss 63–68 …. [16.22] s 64 …. [11.3] ss 92–111 …. [5.5] s 92(1) …. [5.5] s 112 …. [14.10], [18.10] s 246 …. [1.16] Powers of Attorney and Agency Act 1984 s 5 …. [5.13] s 13 …. [5.13] Real Property Act 1886 …. [27.17] s 69(h) …. [4.8], [5.16] s 69(VIII) …. [14.5] s 94 …. [19.2] s 118 …. [5.16] s 124 …. [7.1] s 125 …. [7.1] s 137 …. [7.4], [15.20] s 152 …. [15.21] s 262 …. [7.1] Residential Tenancies Act 1978 …. [11.3] Residential Tenancies Act 1995 …. [27.6] s 97 …. [27.17] Retail and Commercial Leases Act 1995 (formerly Retail Shop Leases Act 1995) …. [27.1], [27.6], [27.17] Pt 4A …. [27.1]

Pt 8 …. [27.15] Pt 9 …. [27.18] Pt 10 …. [27.5], [27.17] s 3(1) …. [27.2], [27.5], [27.11], [27.12], [27.18] s 4(1) …. [27.2] s 4(2)(a) …. [27.2] s 4(2)(b) …. [27.2] s 4(2)(c) …. [27.2] s 4(3) …. [27.2] s 6 …. [27.2] s 7 …. [27.18] s 9 …. [27.18] s 11 …. [27.4] s 12 …. [27.3] s 12(1) …. [27.3] s 12(2) …. [27.3] s 12(3) …. [27.3] s 12(5) …. [27.3] s 12(6) …. [27.3] s 13 …. [27.15] s 13(1)(b) …. [27.15] s 13(3) …. [27.15] s 14(1) …. [27.5] s 15(1) …. [27.5] s 15(2) …. [27.5] s 15(2)(a) …. [27.5] s 15(2)(b) …. [27.5] s 15(3) …. [27.5]

s 18 …. [27.11] s 18(1) …. [27.12] s 18(2) …. [27.12] s 18(3) …. [27.12] s 19 …. [27.5] s 19(1) …. [27.5] s 19(1)(b) …. [27.5] s 19(2) …. [27.5] s 19(5) …. [27.5] s 20 …. [27.5], [27.7] s 20(4) …. [27.5] s 20(5) …. [27.5] s 20(6) …. [27.5] ss 20A–20N …. [27.1] s 20B …. [27.7] s 20B(1) …. [27.7] s 20B(2) …. [27.7] s 20B(3) …. [27.7] s 20B(3)(a) …. [27.7] s 20D(1) …. [27.7] s 20D(2) …. [27.7] s 20D(3) …. [27.7] s 20D(3)(b) …. [27.7] s 20E …. [27.7] s 20F …. [27.7] s 20G …. [27.7] s 21(2) …. [27.10] s 21(2)(b) …. [27.10] s 22 …. [27.8]

s 22(1) …. [27.8] s 22(2) …. [27.8] s 22(4) …. [27.8] s 23 …. [27.8] s 23(1)(a) …. [27.8] s 23(1)(b) …. [27.8] s 23(1)(c) …. [27.8] s 24 …. [27.9] s 24(1) …. [27.9] s 24(1)(m) …. [27.9] s 24(2) …. [27.9] s 24(3)–(4) …. [27.9] s 24(6) …. [27.9] s 29 …. [27.10] s 29(b)–(c) …. [27.10] ss 31–34 …. [27.10] s 31(1)(a) …. [27.10] s 31(1)(b) …. [27.10] s 31(2) …. [27.10] s 33 …. [27.10] s 33(a) …. [27.10] s 33(c) …. [27.10] s 34 …. [27.10] s 34(1) …. [27.10] s 34(2) …. [27.10] s 35 …. [27.8] s 35(1)(a) …. [27.8] s 35(1)(b) …. [27.8]

s 35(1)(c) …. [27.8] s 36 …. [27.8] s 36(1)(a) …. [27.8] s 36(1)(c) …. [27.8] s 36(2) …. [27.8] ss 37–40 …. [27.11] s 37(2) …. [27.12] s 38 …. [27.6], [27.12] s 38(1) …. [27.12] s 38(1)(a)–(d) …. [27.12] s 38(2) …. [27.12] s 38(3) …. [27.12] s 38(3)(a)–(d) …. [27.12] s 38(4)(a) …. [27.12] s 38(4)(b) …. [27.12] s 39 …. [27.12] s 39(1) …. [27.12] s 39(1)(b) …. [27.12] s 39(1)(c) …. [27.12] s 39(2) …. [27.12] s 40 …. [27.12] s 40(1)(c) …. [27.17] s 40(1)(d) …. [27.17] s 40(1)(e) …. [27.17] s 40(2) …. [27.12] s 41 …. [27.14] s 43 …. [27.16] ss 43–46 …. [27.16] s 44(1) …. [27.5], [27.16]

s 44(2) …. [27.5] s 44(3) …. [27.16] s 45 …. [27.16] s 45(d) …. [27.16] s 46 …. [27.16] s 51 …. [27.14] s 53 …. [27.15] s 53(2) …. [27.15] s 54 …. [27.13] ss 54–56 …. [27.13] ss 54–57 …. [27.11] s 55 …. [27.13] s 56 …. [27.13] s 57 …. [27.13] s 57(a) …. [27.13] s 57(b) …. [27.13] s 57(c) …. [27.13] s 57(d) …. [27.13] s 57(f) …. [27.13] s 58 …. [27.14], [27.17] s 59 …. [27.14] s 60(1) …. [27.14] s 61 …. [27.11] s 61(1) …. [27.14] s 61(3) …. [27.15] s 63 …. [27.18] s 64(1) …. [27.18] s 65 …. [27.18]

s 66 …. [27.18] s 67(1) …. [27.18] s 67(2) …. [27.18] s 68(1) …. [27.18] s 68(2) …. [27.18] s 69 …. [27.18] s 70(3) …. [27.5] s 73 …. [27.1] s 74 …. [27.1] s 76 …. [27.17] s 76(1)(a) …. [27.17] s 76(1)(b) …. [27.17] s 76(2) …. [27.17] s 76(4) …. [27.17] s 76(5) …. [27.17] s 76(6) …. [27.17] s 76(7) …. [27.17] s 77 …. [27.2] s 79(1) …. [27.14] s 79(2)–(3) …. [27.14] s 81(2) …. [27.1] s 81(2)(b) …. [27.1] Retail and Commercial Leases Regulations 2010 …. [27.1] Retail and Commercial Leases Regulations 1995 (formerly Retail Shop Lease Regulations 1995) …. [27.1] reg 4(2) …. [27.2] reg 5 …. [27.3] reg 6 …. [27.12] reg 7 …. [27.7]

reg 12 …. [27.1], [27.17] Sch 1 …. [27.3] Statutes Amendment (Commercial Tenancies) Act 1985 …. [27.1] Statutes Amendment and Repeal (Australian Consumer Law) Act 2010 s 7 …. [12.16] Strata Titles Act 1988 …. [27.11] Trustee Act 1936 s 25c …. [5.17] s 26 …. [5.17] s 26a …. [5.17] s 30 …. [5.18] s 31 …. [5.18] s 59b …. [5.17] s 59c …. [5.17] TASMANIA Administration and Probate Act 1935 …. [5.18] Aliens Act 1913 s 3 …. [5.2] Apportionment Act 1871 …. [16.22] s 2 …. [11.3] Australian Consumer Law (Tasmania) Act 2010 s 6 …. [12.16] Australian Consumer Law (Tasmania) (Consequential Amendments) Act 2010 …. [12.16] Common Law Procedure Act 1854 s 183 …. [17.14], [19.3] Conveyancing and Law of Property Act 1884 ss 10–11 …. [15.19]

s 12 …. [20.16] s 15 …. [2.5], [13.11], [17.20] s 15(1) …. [17.15], [18.1], [18.2] s 15(2) …. [19.4] s 15(3) …. [19.6] s 15(6) …. [18.3], [19.1], [19.6] s 15(7) …. [18.3] s 15(8) …. [18.2] s 16 …. [7.7], [17.18] s 19 …. [5.16] s 19(2) …. [5.18] s 20 …. [5.16] s 36 …. [1.6], [4.3], [14.5] s 60(1) …. [1.6] s 60(1)–(4) …. [15.17], [16.12] s 60(1)(c) …. [16.12] s 60(1)(d) …. [15.17] s 60(2) …. [1.6] s 60(3) …. [1.6] s 60(4) …. [1.6] s 62(2) …. [5.15] s 71 …. [15.18], [15.20] s 71A …. [15.18], [15.20] s 82 …. [16.3], [16.10] s 83 …. [11.27] s 85 …. [14.10], [18.10] s 86 …. [15.20] Fair Trading Act 1990 …. [12.15], [20.1] s 14 …. [12.15]

s 15 …. [12.15] s 16 …. [12.15] s 17 …. [12.15] s 21 …. [12.15] s 25 …. [12.15] Land Titles Act 1980 s 3 …. [12.3] s 40(1)(d) …. [4.8], [14.5] s 40(3)(d) …. [5.16] s 57 …. [7.1] s 60 …. [12.3] s 64(3) …. [5.16] s 66 …. [7.1] s 67 …. [7.1] s 82 …. [15.20] Landlord and Tenant Act 1935 Pt V …. 11.3 Married Womens Property Act 1935 …. [5.5] s 3 …. [5.5] Powers of Attorney Act 1934 s 23 …. [4.2], [5.13], [14.7] Supreme Court Civil Procedure Act 1932 s 11(4) …. [16.8] s 11(14) …. [11.25], [19.3] s 11(14A) …. [11.25] Trustee Act 1898 Pt V …. [5.18] s 47 …. [5.17]

s 55 …. [5.17] VICTORIA Administration and Probate Act 195 s 44(1) …. [5.18] Administrative Arrangements Act 1983 …. [23.22] Arbitration Act 1958 …. [4.2], [14.7] Australian Consumer Law and Fair Trading Act 2012 …. [11.2], [16.36], [23.65] Pt 4.2 …. [16.36] Pt 4.2, Div 2 …. [16.36] s 54 …. [16.36] s 54(1) …. [16.36] s 55 …. [16.36] s 56 …. [16.36] s 56(2)(a) …. [16.36] s 56(5) …. [16.36] s 57 …. [16.36] ss 58–67 …. [16.36] s 58(1) …. [16.36] s 58(2) …. [16.36] s 60 …. [16.36] s 61 …. [16.36] s 62 …. [16.36] s 65 …. [16.36] s 66 …. [16.36] s 67 …. [16.36] s 68 …. [16.36] s 69 …. [16.36]

s 72 …. [16.36] s 73 …. [16.36] s 74 …. [16.36] s 75 …. [16.36] s 182 …. [23.65] Building Act 1993 …. [23.44] Companies Act 1961 s 296 …. [16.25] Crimes Act 1958 s 207 …. [21.3] 207(1) …. [21.3] s 207(2) …. [21.3] s 207(3) …. [21.3] Crown Land (Reserves) Act 1978 …. [23.59] Crown Proceedings Act 1958 Pt II …. [5.6] Evidence Act 1958 …. [23.62] Fair Trading Act 1999 …. [12.1], [12.15], [20.1], [23.58], [23.64], [23.65] s 3 …. [23.65] s 8A …. [23.55] ss 8A–8B …. [12.15] s 9 …. [12.15] s 11 …. [12.15] s 12 …. [12.15] s 20 …. [12.15] s 30 …. [12.15] s 107 …. [23.65] s 159(3) …. [23.55] Fair Trading Amendment (Australian Consumer Law) Act 2010

s 9 …. [12.16] Hire Purchase Act 1959 s 27 …. [10.5] Imperial Acts Application Act 1922 Pt III, Div 7 …. [21.3] Instruments Act 1958 s 126 …. [1.6], [4.3], [4.4], [14.5], [23.24], [23.26] s 127 …. [4.3] Interpretation of Legislation Act 1984 ss 14-16 …. [11.26] s 14(2) …. [23.9] s 17 …. [23.35] Land Act 1958 …. [5.6], [11.8] Landlord and Tenant Act 1948 …. [5.15] Landlord and Tenant Act 1958 …. [23.40] Pt IV …. [2.8] Pt IVA …. [16.36] Pt V …. [2.3], [2.12], [5.6] s 8 …. [11.28] s 9 …. [17.17] s 10 …. [17.17] s 12 …. [11.1], [11.3], [11.26] s 26 …. [10.4] s 28 …. [10.5] s 28(2) …. [10.5], [23.40] s 29 …. [20.8] s 30 …. [16.1] s 32 …. [16.36], [20.6]

s 32(2) …. [2.8], [20.5], [20.6] s 32AA …. [20.32] s 33 …. [4.8], [13.2], [14.5] s 35 …. [10.4] s 42 …. [20.8] ss 42A–42F …. [16.36] s 42B …. [16.36] s 42B(1) …. [16.36] s 43(1) …. [11.2], [15.4] s 43(2) …. [2.3] s 48 …. [1.6] s 50 …. [5.6] s 82 …. [2.3] s 82(6)(b) …. [18.4] s 85(1) …. [1.9] s 103 …. [20.32] Sch 3 …. [7.1] Landlord and Tenant (Amendment) Act 1948 s 18 …. [11.1] Local Government Act 1989 …. [23.59] s 190(1) …. [5.7] s 190(2) …. [5.7] s 190(4) …. [5.7] s 191 …. [5.7] Marriage Act 1958 Pt VIII …. [5.5] s 156(1) …. [5.5] Pharmacists Act 1974 s 22(3)(iii) …. [23.41]

Power of Attorney Act 2014 s 12 …. [5.13] s 27 …. [5.13] Property Law Act 1958 …. [16.14], [23.7], [23.54], [23.57], [23.63] Pt II …. [14.10] Pt V …. [18.4] s 18 …. [5.15] s 18(1) …. [1.12], [15.15] s 27 …. [5.2] s 35(1) …. [5.17], [5.18] s 44(2) …. [4.1] s 52 …. [1.6], [15.17], [16.12], [16.14] ss 52–54 …. [1.6], [4.3], [15.17], [16.12] s 52(1) …. [16.12], [16.14] s 52(2) …. [15.17], [16.12] s 52(2)(c) …. [16.14] s 53 …. [1.6], [4.3] s 53(1) …. [1.6], [16.14] s 53(1)(a) …. [1.6], [4.3], [15.17], [16.12], [16.14] s 54 …. [1.6], [4.3] s 54(1) …. [1.6] s 54(2) …. [1.6], [4.3], [15.17], [16.12], [16.13], [16.14] s 56 …. [15.2] s 72(4) …. [5.15] s 73A …. [1.6] s 77(1)(c) …. [15.21] s 78 …. [15.20] s 79 …. [15.18], [15.20]

s 82 …. [5.15] s 84 …. [17.13] s 86 …. [5.16] s 99 …. [5.16] s 99(17) …. [5.10] s 100 …. [5.16] s 134 …. [15.20] s 136 …. [17.20], [18.5] s 137 …. [15.9] s 139 …. [16.3], [16.10] s 140 …. [20.16] s 141 …. [7.4], [15.20], [20.8] ss 141–142 …. [15.19], [15.20] s 141(2) …. [15.19] s 142 …. [15.20] s 143 …. [7.7], [17.18] s 144 …. [6.7], [15.6], [15.9], [15.15], [23.34] s 144(1) …. [7.11], [15.6] s 146 …. [2.5], [13.11], [14.6], [17.18], [17.20], [18.2], [18.4], [18.5], [18.9], [18.10], [19.2], [19.4], [23.39], [23.63] s 146(1) …. [17.15], [18.1], [18.2], [18.3], [18.5], [18.7], [18.9] s 146(1A) …. [23.63] s 146(2) …. [19.1], [19.4], [19.6], [23.63] s 146(4) …. [19.1], [19.4], [19.6] s 146(5)(e) …. [19.6] s 146(6) …. [5.6], [19.1], [19.4] s 146(8) …. [18.3] s 146(9) …. [18.3], [18.4] s 146(9)(e) …. [18.3]

s 146(10) …. [18.3], [18.4] s 146(11) …. [19.4] s 146(12) …. [18.3], [23.63] s 147 …. [18.2] s 148 …. [7.7], [17.18] s 149(1) …. [1.10], [1.16] s 149(3) …. [1.10] s 149(5) …. [1.9] s 151 …. [1.14], [11.3] s 152 …. [5.19] s 153(1) …. [11.27] s 154A …. [10.5], [23.40] s 185 …. [16.8] s 198 …. [11.9], [14.10], [18.10], [20.29], [23.57] s 198(2) …. [18.10], [23.57] s 198(3) …. [18.10], [23.57] s 198(4) …. [14.10], [18.10], [23.57] s 198(5) …. [14.10] Residential Tenancies Act 1997 …. [23.23] Retail Leases Act 2003 …. [23.1], [23.3], [23.4], [23.5], [23.6], [23.7], [23.8], [23.9], [23.14], [23.18], [23.19], [23.21], [23.22], [23.23], [23.31], [23.34], [23.35], [23.37], [23.38], [23.39], [23.39], [23.40], [23.41], [23.43], [23.44], [23.46], [23.47], [23.54], [23.58], [23.59] Pt 3 …. [23.18], [23.40], [23.62] Pt 5, Div 4 …. [23.20] Pt 8 …. [23.45], [23.46], [23.56] Pt 9 …. [23.11], [23.62] Pt 10 …. [23.7], [23.10], [23.11], [23.26], [23.37], [23.39], [23.40], [23.45], [23.54], [23.58], [23.62], [23.63]

Pt 10, Div 3 …. [23.58] Pt 10, Div 4 …. [23.62] Pt 12 …. [23.5] Pt 13 …. [23.5] s 1 …. [23.63] s 2 …. [23.9], [23.11], [23.63] s 2(3) …. [23.11] s 2(5) …. [23.11] s 3 …. [23.20], [23.37], [23.40], [23.41], [23.43], [23.44], [23.45], [23.46], [23.47], [23.54] s 3(1) …. [26.2] s 4 …. [23.18], [23.46] s 4(1) …. [23.18], [23.19], [23.20], [23.23] s 4(1)(b) …. [23.18] s 4(2) …. [23.11], [23.18], [23.20] s 4(2)(a) …. [23.18], [23.20] s 4(2)(b) …. [23.21] s 4(2)(c) …. [23.21] s 4(2)(d) …. [23.21] s 4(2)(d)(i) …. [23.21] s 4(2)(e) …. [23.18], [23.22] s 4(2)(f) …. [23.22], [23.59] s 4(2)(g) …. [23.21], [23.22] s 4(2)(h) …. [23.22] s 4(3) …. [23.20] s 4(3)(a) …. [23.20] s 4(3)(b) …. [23.20] s 4(3)(c) …. [23.20] s 4(4) …. [23.20]

s 5 …. [23.18], [23.22], [23.58], [23.59] s 5(1)(c) …. [23.59] s 5(1)(d) …. [23.21], [23.22] s 5(1)(e) …. [23.22] s 5(1A) …. [23.22], [23.59] s 5(1B) …. [23.22] s 6 …. [23.43], [23.44], [23.47] s 6(1) …. [23.47] s 6(2) …. [23.47] s 7 …. [23.11], [23.12], [23.18], [23.39], [23.46] s 7(a) …. [23.12] s 7(b) …. [23.12] s 7(c) …. [23.12] s 8 …. [23.13] s 9 …. [23.25], [23.27], [23.29], [23.33], [23.36], [23.37], [23.39], [23.40], [23.59] s 9(1) …. [23.16] s 9(1)(b) …. [23.16], [23.38] s 9(2) …. [23.16] s 9(3) …. [23.16] s 10 …. [23.15], [23.40] s 11 …. [23.11], [23.15], [23.36], [23.40], [23.46], [23.63] s 11(1) …. [23.11], [23.38], [23.63] s 11(1)(a) …. [23.16] s 11(1)(b) …. [23.13] s 11(2) …. [23.11], [23.18], [23.36], [23.63] s 12 …. [23.14], [23.15], [23.36], [23.38], [12.40], [23.59] s 12(1) …. [23.14] s 12(2) …. [23.14], [23.15], [23.36], [23.39], [23.39]

s 12(3) …. [23.38], [23.39] s 12(3)(b)(ii) …. [23.39] s 13 …. [23.11], [23.17] s 14 …. [23.11], [23.17] s 15 …. [23.24], [23.25], [23.28], [23.39] s 15(1) …. [23.25], [23.48] s 15(2) …. [23.25] s 16 …. [23.11], [23.12], [23.24], [23.28] s 16(1) …. [23.24] s 16(1)(a) …. [23.39] s 16(2) …. [23.24] s 17 …. [23.38], [23.39], [23.40], [23.48] s 17(1) …. [23.39], [23.39] s 17(1)(a) …. [23.39] s 17(1)(b) …. [23.39] s 17(1A) …. [23.38] s 17(1A)(b) …. [23.38] s 17(2) …. [23.39], [23.40] s 17(3) …. [23.39] s 17(3)(b) …. [23.45] s 17(3)(c) …. [23.38], [23.39] s 17(4) …. [23.38], [23.39] s 17(4)(c) …. [23.38] s 17(5) …. [23.38], [23.39] s 17(5)(a) …. [23.39] s 17(6) …. [23.38], [23.39] s 17(6)(b) …. [23.38] s 17(7) …. [23.38] s 18 …. [23.26], [23.38], [23.39]

s 18(1) …. [23.39] s 18(2) …. [23.39] s 18(3) …. [23.26], [23.39] s 18(4) …. [23.26], [23.39] s 18(5) …. [23.16], [23.39] s 19 …. [23.26], [23.39] s 21 …. [23.14], [23.15], [23.36], [23.55] s 21(1)–(4) …. [23.36] s 21(1) …. [23.16], [23.36], [23.39] s 21(2) …. [23.16], [23.36] s 21(2)(a) …. [23.36] s 21(2)(b) …. [23.36] s 21(2A) …. [23.14], [23.36] s 21(3) …. [23.14] s 21(4) …. [23.36] s 21(5) …. [23.36], [23.58] s 21(5A) …. [23.36] s 21(6) …. [23.36] s 21(7) …. [23.36] s 22 …. [23.26], [23.48] s 22(1) …. [23.26] s 22(2) …. [23.26] s 22(2)(a) …. [23.26] s 22(3) …. [23.26] s 22(4) …. [23.26] s 23 …. [23.37] s 23(1) …. [23.37] s 23(2) …. [23.10], [23.37]

s 23(3) …. [23.37] s 23(3)(a) …. [23.37] s 23(3)(b) …. [23.37] s 23(4) …. [23.37], [23.62] s 23(4)(b) …. [23.37] s 24 …. [23.8], [23.42] s 24(1) …. [23.42] s 24(1)(a) …. [23.42] s 24(1)(b) …. [23.42] s 24(1)(d) …. [23.42] s 24(2) …. [23.42] s 25 …. [23.27], [23.28], [23.48], [23.58] s 25(c) …. [23.27] s 26 …. [23.38], [23.39], [23.39], [23.40], [23.48] s 26(1) …. [23.38], [23.39], [23.39] s 26(1)(b) …. [23.38], [23.39] s 26(2) …. [23.39] s 26(3) …. [23.38], [23.39], [23.40] s 26(4) …. [23.39] s 26(4)(c) …. [23.39] s 26(5) …. [23.39] s 26(6) …. [23.39] s 27 …. [23.30], [23.39] s 27(2) …. [23.30], [23.39] s 28 …. [23.15], [23.31], [23.39] s 28(1) …. [23.31] s 28(2) …. [23.31], [23.32] s 28(2)(a) …. [23.31] s 28(2)(c) …. [23.31]

s 28(3) …. [23.31] s 28(4) …. [23.32] s 29 …. [23.44] s 30 …. [23.8] ss 30–32 …. [23.53] s 31 …. [23.40], [23.46], [23.51] s 31(2)(a) …. [23.46] s 33 …. [23.41] s 33(1) …. [23.41] s 33(2) …. [23.41] s 33(3) …. [23.41] s 33(4) …. [23.41] s 33(4)(a)–(l) …. [23.41] s 33(4)(c) …. [23.41] s 33(4)(f) …. [23.41] s 33(4)(k) …. [23.41] s 34 …. [23.41], [23.62] s 34(1) …. [23.41] s 34(1)(b) …. [23.41] s 34(2) …. [23.41] s 35 …. [23.10], [23.11], [23.40], [23.62] s 35(1) …. [23.40] s 35(2) …. [23.40], [23.41] s 35(3) …. [23.10], [23.40], [23.41] s 35(4) …. [23.40] s 35(4)(a) …. [23.40] s 35(4)(b) …. [23.40] s 35(4)(c) …. [23.40]

s 35(4)(e) …. [23.40] s 35(5) …. [23.40] s 35(6) …. [23.10], [23.40] s 35(7) …. [23.40], [23.41] s 35(8) …. [23.40] s 36 …. [23.8], [23.11], [23.13], [23.40] s 37 …. [23.36], [23.40], [23.62] s 37(2) …. [23.40] s 37(3) …. [23.40] s 37(4) …. [23.40] s 37(4)–(7) …. [23.40] s 37(5) …. [23.40] s 37(6) …. [23.40] s 37(7) …. [23.40] s 37(7)(b) …. [23.40] s 38 …. [23.40], [23.58], [23.59] s 38(1) …. [23.40], [23.54] s 38(2) …. [23.40] s 38(3) …. [23.40], [23.54] s 38(4) …. [23.40], [23.54] s 39 …. [23.43], [23.44], [23.46], [23.47], [23.49] s 39(1) …. [23.44] s 39(1)(a)–(c) …. [23.44] s 39(2) …. [23.44] s 40 …. [23.43], [23.44], [23.46], [23.47] s 40(1) …. [23.43] s 40(2) …. [23.43] s 41 …. [23.46], [23.49] s 41(1) …. [23.46]

s 41(1)(a)–(d) …. [23.46] s 41(2) …. [23.46], [23.49] s 42 …. [23.46] s 43 …. [23.46] s 44 …. [23.46] s 45 …. [23.46] s 46 …. [23.8], [23.44], [23.45], [23.46] ss 46–48 …. [23.44] s 46(1) …. [23.45] s 46(2) …. [23.45] s 46(3) …. [23.45] s 46(3)(b) …. [23.45] s 46(4) …. [23.45] s 47 …. [23.8], [23.44], [23.45] s 47(2) …. [23.45] s 47(3) …. [23.45] s 47(3)(a) …. [23.45] s 47(4) …. [23.45] s 47(5) …. [23.45] s 47(5)(a) …. [23.45] s 47(5)(b) …. [23.45] s 47(6) …. [23.45] s 47(7) …. [23.45] s 48 …. [23.8], [23.44], [23.45], [23.46] s 48(1) …. [23.45] s 48(2) …. [23.45] s 48(3) …. [23.45] s 48(4) …. [23.45]

s 49 …. [23.11] s 49(1) …. [23.46] s 49(1)(a) …. [23.46] s 49(1)(a)(i) …. [23.46] s 49(1)(a)(ii) …. [23.46] s 49(2) …. [23.46] s 49(3) …. [23.46] s 49(6) …. [23.46] s 50 …. [23.11], [23.46] s 50(2) …. [23.46] s 51 …. [23.37], [23.46], [23.48] s 51(1) …. [23.48] s 51(1)(a) …. [23.48] s 51(1)(b) …. [23.48] s 51(1)(c) …. [23.48] s 51(2) …. [23.48] s 52 …. [10.7], [23.8], [23.12], [23.23], [23.44], [23.46], [23.48], [23.49], [23.59] s 52(1)–(3) …. [23.59] s 52(2) …. [23.49], [23.59] s 52(2)(a) …. [23.49] s 52(2)(a)–(c) …. [23.59] s 52(2)(b) …. [23.49] s 52(2)(c) …. [23.49], [23.59] s 52(3) …. [23.49], [23.59] s 52(4) …. [23.23], [23.49], [23.59] s 52(5) …. [23.49] s 52(5)(b) …. [23.49] s 53 …. [23.8], [23.50], [23.54]

s 54 …. [23.8], [23.40], [23.54] s 54(1) …. [23.54] s 54(2) …. [23.54] s 54(2)(b) …. [23.54] s 54(2)(f) …. [23.54] s 54(3) …. [23.54] s 54(4) …. [23.54] s 54(4)(b) …. [23.54] s 54(5) …. [23.54] s 55 …. [23.51] ss 55–58 …. [23.54] s 55(1) …. [23.51] s 55(2) …. [23.51] s 55(3) …. [23.51] s 55(4) …. [23.51] s 55(5) …. [23.51] s 55(7) …. [23.51] s 56 …. [23.8], [23.52] s 56(2) …. [23.52] s 56(3) …. [23.52] s 56(4) …. [23.52] s 56(5) …. [23.52] s 56(6) …. [23.52] s 57 …. [23.8], [23.49] s 57(1) …. [23.49] s 57(1)(a) …. [23.49] s 57(1)(b) …. [23.49] s 57(1)(c) …. [23.49] s 57(1)(d) …. [23.49]

s 57(2) …. [23.49] s 57(3) …. [23.49] s 58 …. [23.53] s 59 …. [23.53], [23.54] s 59(2) …. [23.53] s 60 …. [23.34] ss 60–62 …. [23.37] s 60(1)(b) …. [23.34] s 61 …. [23.8], [23.34], [23.38] s 61(1)(d) …. [23.34] s 61(2) …. [23.34] s 61(3) …. [23.34], [23.38], [23.39], [23.39], [23.48] s 61(3)–(5A) …. [23.39], [23.39] s 61(4) …. [23.34], [23.35], [23.38], [23.39], [23.39] s 61(5) …. [23.34], [23.38], [23.39], [23.39], [23.48] s 61(5A) …. [23.34], [23.35], [23.38], [23.39], [23.39], [23.48] s 61(6) …. [23.34] s 62 …. [23.35], [23.39], [23.39] s 62(1) …. [23.35] s 62(1)(a) …. [23.35] s 62(2) …. [23.35] s 63 …. [23.34], [23.37] s 64 …. [23.15], [23.33], [23.39] s 64(1) …. [23.33] s 64(2) …. [23.33] s 64(3) …. [23.33] s 64(4)(a) …. [23.33] s 64(4)(b)(i) …. [23.33]

s 64(5) …. [23.33] s 65 …. [23.41], [23.46], [23.56] s 66 …. [23.56] s 67 …. [23.41], [23.56] s 68 …. [23.8], [23.56] s 69 …. [23.46] ss 69–72 …. [23.45], [23.46], [23.56] s 70 …. [23.8], [23.46] ss 70–72 …. [23.46] s 71 …. [23.8], [23.46] s 71(2) …. [23.46] s 71(3) …. [23.46] s 71(4) …. [23.46] s 72 …. [23.8], [23.46], [23.56] s 72(2) …. [23.46] s 72(3) …. [23.46] s 73 …. [23.56] s 74 …. [23.56] s 75 …. [23.56] s 75(1) …. [23.56] s 75(2) …. [23.56] s 76 …. [23.11], [23.13] s 76(1) …. [23.11] s 76(2) …. [23.11] s 77 …. [23.55] s 77(1) …. [23.55] s 77(2) …. [23.55] s 77(2)(d)(ii) …. [23.55] s 78 …. [23.55]

s 78(1) …. [23.55] s 78(2) …. [23.55] s 79 …. [23.55] s 80 …. [23.55] s 80(2) …. [23.55] s 81 …. [23.63] ss 81–83 …. [23.62] s 81(1) …. [23.63] s 81(1)(a) …. [23.62] s 81(1)(b) …. [23.62] s 81(1)(c) …. [23.62], [23.63] s 81(2) …. [23.62] s 82 …. [23.63] s 83 …. [23.11] s 84 …. [23.58] s 84(1)(g) …. [23.58] s 84(1A) …. [23.58] s 85 …. [23.58] ss 85–88 …. [23.58] s 86 …. [23.58], [23.62] s 86(1) …. [23.58] s 86(2) …. [23.58] s 86(2A) …. [23.58] s 86(3) …. [23.58] s 86(4) …. [23.58] s 86(5) …. [23.58] s 86(6) …. [23.58] s 87 …. [23.58]

s 87(1) …. [23.58], [23.61] s 88 …. [23.58] s 89 …. [11.25], [23.62] s 89(1) …. [23.63] s 89(2) …. [19.3], [23.63] s 89(3) …. [19.3] s 89(4) …. [23.63] s 91 …. [23.54], [23.64] s 91(1)(b) …. [23.54] s 92 …. [19.3], [23.54], [23.58], [23.62] s 92(2)(b) …. [23.58] s 93 …. [23.48], [23.61] s 93(1) …. [23.61] s 94 …. [23.10], [23.36], [23.46], [23.48], [23.54] s 94(3) …. [23.37] s 94A …. [23.63] s 95 …. [23.18], [23.19], [23.23] s 97 …. [23.39], [23.39], [23.45], [23.57] s 97A …. [23.22], [23.59] s 100 …. [23.36] s 101 …. [23.13] s 111 …. [23.13] s 118 …. [23.5] s 119 …. [23.5] s 119(1) …. [23.63] s 119(2) …. [23.62] s 121 …. [23.11], [23.46] s 121(1) …. [23.46] s 121(3) …. [23.46]

s 130 …. [23.48] s 130(3) …. [23.48] s 130(4) …. [23.48] s 130(5) …. [23.48] Retail Leases (Amendment) Act 2005 …. [23.4], [23.5], [23.6], [23.7], [23.9], [23.12], [23.14], [23.16], [23.20], [23.21], [23.22], [23.23], [23.25], [23.26], [23.27], [23.31], [23.33], [23.34], [23.35], [23.36], [23.37], [23.38], [23.40], [23.42], [23.46], [23.49], [23.51], [23.52], [23.55], [23.58], [23.59], [23.63] s 1 …. [23.7], [23.9] s 2 …. [23.4], [23.9] s 3 …. [23.9] s 5 …. [23.18] s 5(2) …. [23.19] s 12(7) …. [23.9] s 16 …. [23.9] s 17 …. [23.9] s 23 …. [23.9] s 37 …. [23.9] s 39 …. [23.9] s 40 …. [23.9] s 41 …. [23.9] s 42 …. [23.9] s 43 …. [23.9] s 45 …. [23.36] s 45(2) …. [23.9] s 51 …. [23.9] s 52 …. [23.9] s 81(1A) …. [23.62]

Pt 3 …. [23.9] Pt 4 …. [23.9] Retail Leases Regulations 2003 …. [23.3], [23.39], [23.39], [23.43], [23.44], [23.46] reg 5 …. [23.20], [23.44] reg 6 …. [23.20] reg 7 …. [23.20] reg 7(1) …. [23.20] reg 7(2) …. [23.20] reg 10 …. [23.20], [23.44] reg 11 …. [23.20], [23.43] reg 12 …. [23.20] reg 13 …. [23.46] Sch 1 …. [23.39], [23.39] Retail Leases Regulations 2013 …. [23.39] reg 5 …. [23.44] reg 6 …. [23.18] reg 7 …. [23.20] reg 9 …. [23.44] reg 10 …. [23.43] Retail Tenancies Act 1986 …. [23.1], [23.2], [23.5], [23.6], [23.8], [23.9], [23.11], [23.12], [23.13], [23.20], [23.34], [23.36], [23.40], [23.46], [23.47], [23.54], [23.62] Pt 2 …. [23.16] Pt 3 …. [23.11], [23.55] Pt 4 …. [23.16] s 3(1) …. [23.18], [23.19], [23.21] s 3(2) …. [23.10] s 3(4) …. [23.12]

s 4 …. [23.11], [23.13] s 4(3) …. [23.16] s 4(4) …. [23.11], [23.17] s 9 …. [23.37] s 10 …. [23.62] s 10(3) …. [23.40] s 11A …. [23.62] s 12 …. [23.41] s 14(1) …. [23.30] s 14(2) …. [23.30] s 14(3) …. [23.31] s 14(4) …. [23.30], [23.31], [23.32] s 14(5) …. [23.30] s 14(6) …. [23.57] s 14(9) …. [23.31] s 15 …. [6.9], [23.47] s 17 …. [23.54] s 17(1) …. [23.54] s 17(2) …. [23.54] s 23 …. [23.57] s 24 …. [23.10] Retail Tenancies (Amendment) Act 1995 …. [23.37] Retail Tenancies (Amendment) Regulations 1995 …. [23.1] Retail Tenancies (Exemption) Regulations 1991 …. [23.1] Retail Tenancies Reform Act 1998 …. [23.1], [23.2], [23.5], [23.6], [23.7], [23.8], [23.9], [23.11], [23.13], [23.18], [23.20], [23.34], [23.36], [23.37], [23.38], [23.39], [23.39], [23.40], [23.41], [23.45], [23.46], [23.47], [23.62] s 3(1) …. [23.18], [23.19], [23.21] s 3(2) …. [23.10]

s 3(4) …. [23.12] s 3(4)(b) …. [23.12] s 4 …. [23.11], [23.13] s 4(1) …. [23.11] s 4(2) …. [23.11], [23.17] s 8 …. [23.12], [23.36], [23.39] s 8(2) …. [23.39] s 8(2)(b) …. [23.39], [23.45] s 8(5) …. [23.39] s 8(5)(a) …. [23.39] s 11(1)(a) …. [23.37] s 11(1)(b)(ii) …. [23.37] s 11(2)(a) …. [23.37], [23.48] s 11(2)(b) …. [23.37], [23.48] s 11(2)(c) …. [23.37] s 11(2)(d) …. [23.37] s 11(2)(e) …. [23.37] s 11(2)(f) …. [23.37] s 11(2)(g) …. [23.37] s 11(4) …. [23.37] s 12(1) …. [23.40] s 12(2) …. [23.40] s 12(3) …. [23.40] s 12(4) …. [23.40] s 12(5) …. [23.40] s 12(5)(c) …. [23.40] s 12(6) …. [23.41] s 12A …. [23.62] s 13(1)–(4) …. [23.41]

s 13(4) …. [23.41] s 13(5) …. [23.41] s 13A …. [23.62] s 14 …. [23.41] s 17(2) …. [23.39] s 17(2)(b) …. [23.39] s 18(1) …. [23.30] s 18(2) …. [23.30] s 18(3) …. [23.31] s 18(4) …. [23.30], [23.31], [23.32] s 18(5) …. [23.30] s 18(7) …. [23.31] s 19 …. [23.48] s 19(1) …. [23.48] s 19(2) …. [23.48] s 19(2)(a) …. [23.48] s 19(2)(b) …. [23.48] s 19(2)(c) …. [23.48] s 19(2)(d) …. [23.48] s 19(2)(e) …. [23.48] s 20 …. [23.43], [23.44], [23.47] s 20(1) …. [23.43] s 20(1)(a) …. [23.43] s 20(1)(b) …. [23.43] s 20(1)(c) …. [23.43] s 20(1)(d) …. [23.43] s 20(1)(e) …. [23.43] s 20(3) …. [23.43]

s 21 …. [23.43], [23.44], [23.45], [23.47] s 21(1) …. [23.44] s 21(1)(a) …. [23.44] s 21(1)(b) …. [23.45] s 21(1)(b)(ii) …. [23.45] s 21(1)(c) …. [23.45] s 21(2)–(7) …. [23.45] s 21(3) …. [23.45] s 21(3)(b) …. [23.45] s 21(4) …. [23.45] s 21(5)(b) …. [23.43] s 21(7) …. [23.45] s 26 …. [23.54] s 26(1) …. [23.54] s 26(2) …. [23.54] s 26(2)(a) …. [23.54] s 26(2)(b) …. [23.54] s 26(2)(c) …. [23.54] s 29 …. [23.48] s 29(1) …. [23.48] s 29(2) …. [23.48] s 46 …. [23.57] s 47 …. [23.10] s 50 …. [23.5] s 52 …. [23.5] Retail Tenancies Regulations 1987 …. [23.1], [23.43] reg 6(1)(a) …. [23.46] reg 6(1)(b) …. [23.46] reg 6(1)(d) …. [23.46]

reg 6(1)(g) …. [23.46] Retail Tenancies Regulations 1998 …. [23.43], [23.46] reg 7(1)(a) …. [23.46] reg 7(1)(c) …. [23.46] reg 7(1)(f) …. [23.46] Retail Tenancies (Rent Review) Act 1991 …. [23.1] Sale of Goods (Vienna Convention) Act 1987 …. [4.3] Sale of Land Act 1962 s 31 …. [14.4] s 32 …. [23.26] s 32(7) …. [23.39] Sale of Land (Amendment) Act 1982 …. [10.1] Settled Land Act 1958 ss 41–47 …. [5.17] ss 44–47 …. [5.17] s 101 …. [5.17] Small Business Commissioner Act 2003 …. [23.7] Small Business Victoria (Repeal) Act 1996 …. [23.7] Statutes Amendment Act 1954 Pt IV …. [20.8] Supreme Court Act 1958 s 114 …. [19.3] s 116 …. [19.6] Supreme Court Act 1986 s 3(1) …. [19.3], [19.6] ss 53–56 …. [11.3], [16.22] s 60 …. [13.4] s 79 …. [1.14], [11.24], [11.25], [17.14], [19.2], [19.3], [19.4]

s 79(5) …. [19.3], [19.6] s 80 …. [11.25], [19.3] s 85 …. [11.25], [19.3] s 85(1) …. [19.3] s 114 …. [19.3] Transfer of Land Act 1958 …. [5.16], [17.20], [23.54] s 40(1) …. [1.6] s 42 …. [7.4], [14.5] s 42(2)(e) …. [1.6], [4.8], [5.16], [6.8], [16.33] s 45(2) …. [12.3] s 67 …. [7.1], [17.14], [17.20] s 67(2) …. [15.21] s 70 …. [17.20], [19.2] s 78 …. [7.4], [15.20] s 78(1) …. [15.20] s 81 …. [5.16], [7.4], [18.5] s 81(1) …. [7.4], [15.20], [18.5] s 81(3) …. [7.4] s 87C …. [5.16] s 87C(a) …. [5.16] s 112 …. [7.1] s 113 …. [11.9] s 131 …. [5.16] Trustee Act 1958 s 32 …. [5.18] s 63 …. [5.17], [5.18] s 63A …. [5.17] Pt II …. [5.17] Unclaimed Money Act 2008 …. [16.36]

Victorian Civil and Administrative Tribunal Act 1998 …. [23.54] s 92 …. [23.58], [23.61] s 92(2)(b) …. [23.61] s 123 …. [23.64] Wrongs Act 1958 …. [16.32] WESTERN AUSTRALIA Commercial Tenancy (Retail Shops) Agreements Act 1985 …. [26.1], [26.7], [26.8], [26.12] s 3(1) …. [26.2], [26.4], [26.9] s 3(4) …. [26.2] s 4 …. [26.2] s 4(1) …. [26.2] s 4(1)(a) …. [26.2] s 4(1)(b) …. [26.2] s 4(2) …. [26.2] s 4(4) …. [26.2] s 5 …. [26.2] s 6 …. [26.3], [26.4] s 6(1) …. [26.3] s 6(2) …. [26.3] s 6(4) …. [26.3] s 6(6) …. [26.3] s 7 …. [26.11] s 7(1) …. [26.11] s 7(1)(a) …. [26.11] s 7(1)(b) …. [26.11] s 7(2) …. [26.11] s 7(2)(a) …. [26.11]

s 7(3) …. [26.11] s 7(4) …. [26.11] s 7(5) …. [26.11] s 8 …. [26.11] s 8(1) …. [26.11] s 9(1) …. [26.4] s 9(1)(a) …. [26.4] s 9(2) …. [26.4], [26.8] s 9(3) …. [26.4] s 10 …. [26.8] s 10(1) …. [26.8] s 10(2) …. [26.8] s 10(3) …. [26.8] s 11 …. [26.10] s 11(1) …. [26.10] s 11(2) …. [26.10], [26.12] s 11(2)(c) …. [26.10] s 11(3) …. [26.10], [26.12], [26.14] s 11(5) …. [26.10], [26.14] s 12(1)(a) …. [26.5] s 12(1)(d)(i) …. [26.5] s 12(1a)(a) …. [26.5] s 12(2) …. [26.5] s 12(3A) …. [26.5] s 12A …. [26.6] s 12A(2) …. [26.6] s 12A(3) …. [26.6] s 12A(3)(c) …. [26.6] s 12A(6) …. [26.6]

s 12B …. [26.6] s 13 …. [26.12], [26.13] s 13(1) …. [26.3], [26.12], [26.13] s 13(1)(a) …. [26.13] s 13(2) …. [26.12] s 13(3)(a) …. [26.12] s 13(3)(b) …. [26.12] s 13(3a) …. [26.12] s 13(4) …. [26.12] s 13(5) …. [26.12] s 13(6) …. [26.13] s 13(7) …. [26.13] s 13(7b) …. [26.13] s 13(8) …. [26.12] s 13A …. [26.12] s 13A(1) …. [26.12] s 13A(2) …. [26.12] s 13A(3) …. [26.12] s 13A(4) …. [26.12] s 13A(5) …. [26.12] s 14 …. [26.9] s 14(e) …. [26.9] s 16(1) …. [26.14] s 16(1)(a) …. [26.14] s 16(1)(b) …. [26.14] s 26(1) …. [26.3], [26.14] s 26(1a) …. [26.14] s 26(1aa) …. [26.14]

s 27 …. [26.14] s 27(1) …. [26.14] s 27(2) …. [26.14] s 27(3) …. [26.14] Commercial Tenancy (Retail Shops) Agreements Regulations 1985 …. [26.1] reg 3A …. [26.2] reg 3AA(1) …. [26.2] reg 3AA(2) …. [26.2] reg 3AB …. [26.2] reg 4 …. [26.3] reg 5 …. [26.11] Form 1 …. [26.3] Form 2 …. [26.11] Sch …. [26.3] Commercial Tenancy (Retail Shops) Agreements Amendment Regulations 2012 …. [26.1] Commercial Tenancy (Retail Shops) Agreements Amendment Act 2011 …. [26.1] Commercial Tenancy (Retail Shops) Agreements Regulations (No 2) 2012 …. [26.1] Common Law Practice Act 1856 s 224 …. [22.4] Criminal Code Act Compilation Act 1913 s 69 …. [21.3] Crown Suits Act 1947 …. [5.6] Distress for Rent Abolition Act 1936 …. [11.3] Fair Trading Act 1987 …. [12.15], [20.1] s 10 …. [12.15] s 11 …. [12.15]

s 12 …. [12.15] s 13 …. [12.15] s 18 …. [12.15] s 22 …. [12.15] Fair Trading Act 2010 s 19 …. [12.16] Law Reform (Statute of Frauds) Act 1962 …. [1.6], [4.3], [14.5] Naturalisation Act 1871 s 2 …. [5.2] Property Law Act 1969 …. [26.13] s 9(2) …. [1.6] s 9(4) …. [1.6] s 18 …. [16.8] s 20 …. [15.20] s 33 …. [1.6] ss 33–35 …. [15.17], [16.12] s 33(1) …. [1.6] s 33(2)(c) …. [16.12] s 33(2)(d) …. [1.6], [15.17] s 34 …. [1.6], [4.3] s 34(1)(a) …. [1.6] s 35 …. [1.6] s 35(2) …. [1.6] s 39 …. [5.15] s 44 …. [5.15] s 47 …. [15.18], [15.20] s 48 …. [15.18], [15.20] s 71 …. [1.6], [2.14], [15.16], [20.6] s 72 …. [2.8]

s 73 …. [7.7], [17.18] s 74(1) …. [1.16] s 74(3) …. [1.10] s 76 …. [20.16] ss 77–78 …. [15.19] s 79 …. [7.7], [17.18] s 80 …. [7.11], [15.6], [15.15] s 80(1) …. [26.8] s 81 …. [2.5], [13.11], [17.20] s 81(1) …. [17.15], [18.1], [18.2], [26.13] s 81(2) …. [19.4], [19.5], [26.13] s 81(4) …. [19.6] s 81(8)(b) …. [19.1] s 81(8)(c) …. [18.3] s 81(9) …. [18.3] s 81(10) …. [18.2] ss 83A–83E …. [14.6] s 84 …. [5.13] ss 130–134 …. [16.22] s 131 …. [11.3] s 135 …. [18.10] Residential Tenancies Act 1987 …. [26.7] Transfer of Land Act 1893 s 68 …. [4.8], [5.16], [14.5] s 91 …. [5.16] s 92 …. [7.1] s 93 …. [7.1] s 95 …. [12.3], [15.21], [26.8]

s 111 …. [15.20] s 116 …. [7.4], [15.20], [18.5] s 131 …. [7.1] s 207 …. [10.5] Trustees Act 1962 s 27 …. [5.17], [5.18] s 62 …. [5.18] s 89 …. [5.17], [5.18] s 90 …. [5.17] UNITED KINGDOM Apportionment Act 1870 …. [16.22] Building Societies Act 1939 s 10 …. [10.6] Common Law Procedure Act 1852 …. [19.6], [22.4] ss 210–212 …. [19.3] s 212 …. [19.6] Conveyancing Act 1881 …. [23.63] s 14 …. [18.2] Conveyancing and Law of Property Act 1881 s 10 …. [15.20], [20.8] s 14 …. [18.6] Defective Premises Act 1972 …. [10.1] Distress for Rent Act 1689 …. [16.36] Distress for Rent Act 1737 (11 Geo 2 c 19) s 18 …. [17.17] Fires Prevention (Metropolis) Act 1774 (14 Geo III c 78) s 83 …. [10.1] Grantees of Reversion Act 1540 (32 Hen 8 c 34) …. [15.19], [15.20]

Housing Act 1974 s 125 …. [10.13] Housing Act 1980 …. [10.1] Judicature Act 1873 (36 & 37 Vict c 66) …. [16.8], [22.4] s 25(4) …. [16.8] s 25(8) …. [10.13] Judicature Act 1883 …. [22.4] s 9 …. [16.8] Land Charges Act 1925 …. [1.15] Landlord and Tenant Act 1730 (4 Geo 2 c 28) s 1 …. [17.17] Pt V …. [17.17] Landlord and Tenant Act 1927 s 18 …. [13.17] s 18(1) …. [10.13] s 19(1)(a) …. [15.6] s 19(3) …. [7.8] Landlord and Tenant Act 1954 Sch 5, Cl 1 …. [15.4] Landlord and Tenant (Covenants) Act 1995 …. [15.1] Law of Property Act 1881 s 10 …. [15.20] Law of Property Act 1925 …. [1.5], [5.3], [5.14], [5.15], [19.6] s 52 …. [1.6], [15.17] ss 52–54 …. [15.17] s 53 …. [1.6], [15.17] s 53(1)(a) …. [15.17] s 54(2) …. [1.6], [15.17] s 77 …. [15.21]

s 78 …. [15.18] s 79 …. [15.18] s 139 …. [16.3] s 141 …. [7.4], [15.20], [20.8] s 144 …. [7.8] s 146 …. [14.6], [17.18], [18.1], [18.6], [18.7], [18.10], [19.1], [19.4] s 146(1) …. [18.2] s 146(2) …. [19.4], [19.6] s 146(4) …. [1.15], [19.1], [19.4], [19.6] s 146(9) …. [19.6] s 146(9)(e) …. [18.3] s 146(10) …. [19.6] s 146(11) …. [18.3] s 149(6) …. [1.5], [2.1] s 205(1)(xxiii) …. [11.1] s 205(1)(xxvii) …. [1.12] Law of Property Act (Amendment) Act 1929 s 1 …. [19.6] Law Reform (Frustrated Contracts) Act 1943 …. [6.10] Limitation Act 1935 s 9 …. [2.19] Lord Cairns Act (Chancery Amendment Act 1858) …. [4.9], [7.8] s 2 …. [1.15] Lord St Leonards Act (Law of Property Act 1859) (22 & 23 Vict c 35) s 27 …. [5.18] s 28 …. [5.18] Real Property Limitation Act 1833 (3 & 4 Will 4 c 27) s 7 …. [2.19]

Rent Act 1968 …. [1.4] Statute of Forcible Entry 1381 …. [21.3] Statute of Frauds 1677 (29 Car II c 3) …. [1.6], [4.3], [4.4], [4.9], [4.10], [23.24] s 1 …. [4.3] s 2 …. [1.6], [4.3] s 3 …. [4.3] s 4 …. [1.6], [4.3], [14.5], [16.12], [16.13], [16.14], [16.15], [16.17], [16.19] Supreme Court Act 1981 s 37 …. [10.13] Town Planning Act s 7 …. [5.6] Variation of Trusts Act (6 & 7 Eliz 2 c 53) …. [5.17] Vendor and Purchaser Act 1874 (44 and 45 Vict c 41) s 13 …. [4.1] NEW ZEALAND Property Law Act 2007 s 210 …. [2.14] s 118 …. [17.18] s 120 …. [14.6] s 121 …. [14.6] UNITED STATES Restatement (Second) Contracts par 202(4) …. [6.6] Uniform Commercial Code 1987 para 2–208 …. [6.6] INTERNATIONAL Vienna Convention on the Law of Treaties 1969

art 62 …. [6.10]

Contents Preface Landlord and Tenant Act Comparative Table Table of Cases Table of Statutes

Chapter 1 — Relationship of Landlord and Tenant The grant and the term granted A contract creating an estate Exclusive possession the touchstone of a lease Exclusive possession and licences Agreement and certainty Requirement as to writing Term and reversion Subleases Concurrent leases Future or reversionary leases Building leases Rent Leaseholds as personalty Tenancy by attornment Leases created by estoppel Abolition of doctrine of interesse termini

Chapter 2 — Kinds of Tenancy The five kinds of tenancy

Tenancy for a fixed term — certainty Automatic expiration Provision for notice — overholding clauses Fixed terms and notices to quit Ejectment of overholding tenant Character of tenancy from year to year Creation and determination of yearly tenancies Yearly tenancy presumed where tenant holds over Holding over after short terms Holding over where weekly rent reserved No presumption in absence of necessary intention Periodic tenancy for less than a year Kind of periodic tenancy dependent upon intention Tenancy at will Entry during negotiations for a lease Entry under contract of sale Encroachments by lessee Termination of tenancy at will Tenancy at sufferance Vesting of tenancy on death

Chapter 3 — Licences Nature of licences Licence distinguished from lease Matters not decisive Lodgers Employees Miscellaneous cases Agreement for a licence Determination Recovery of possession

Chapter 4 — Agreements for a Lease Agreements and leases Uncertainty Statute of Frauds Memorandum and signature Part performance Taking of or continuance in possession Alterations to premises The doctrine of Walsh v Lonsdale Damages Unenforceable agreement as a defence Action for specific performance

Chapter 5 — Capacity to Make and Take Leases Capacity to make and take leases Aliens Infants Persons of unsound mind Married women The Crown Municipalities Statutory corporations Administrators and liquidators Receivers Trustees in bankruptcy Unincorporated associations Agents Persons granting leases to themselves Co-owners Mortgagors and mortgagees Trustees

Personal representatives Leases invalidated by reason of non-compliance with terms of powers under which they are granted Illegality

Chapter 6 — Leases as Contracts Introductory Intention to create legal relations Construction and implication of terms Rectification Fraud, illegality and mistake Frustration Collateral warranty

Chapter 7 — Covenants Introductory Construction Solicitor’s duty Rent and lessor’s covenants Covenant to repair Liability on covenant after assignment Permission to act in breach of covenant Covenants concerning user Covenants for renewal Breach of covenants Covenant against assigning without consent Covenants not to assign or sublet Application of covenants to overholding Covenants not to cause nuisance Covenants for quiet enjoyment Covenants to pay rates and taxes and outgoings

Chapter 8 — Implied Covenants Covenants express or implied Covenants in law Exclusion by express covenant Quiet enjoyment Implied covenant of non-derogation from grant by the landlord Covenant of fitness by landlord of furnished house Covenant by tenant to use and deliver up in tenant-like manner Covenant by tenant to cultivate in husband-like manner Covenant by tenant to deliver up vacant possession Other usual covenants

Chapter 9 — Usual Covenants Usual covenants Usualness a question of fact What are usual covenants?

Chapter 10 — Repairs Landlord’s obligations Implied obligation of tenant as to user Waste Emblements Fixtures Covenants to repair and notice Landlord’s covenants Tenant’s covenants Buildings erected after the demise Construction of covenant Fair wear and tear Accident Remedies for breach

Chapter 11 — Rent Characteristics — at common law and by agreement Rent control legislation Payment of rent Rent review clauses Contribution Payment of rent after notice to quit Occupation pending completion of sale Tender of rent Covenant to pay rent a usual covenant Action for rent Liability for rent damages after abandonment of possession Illegality Rent period as evidence of nature of tenancy Determination of rent by a third person Variation of rent Liquidator and receiver Personal representative Common law demand Relief against forfeiture Distress Enlargement of lease into fee simple Use and occupation

Chapter 12 — Australian Consumer Law and Other Commonwealth Legislation Introduction Restrictive Trade Practices: Competition and Consumer Act Pt IV Consumer Protection: Chapters 2 and 3 Remedies Implementation of the Consumer Law

Chapter 13 — Breach of Contract Introductory Agreement for a lease Tender of lease Measure of damages for failure to grant, take or continue lease Agreement for weekly tenancy Covenants to repair Remedies for breach of covenant Miscellaneous covenants

Chapter 14 — Renewal of Leases Options and covenants for renewal Not generally perpetually renewable Uncertainty First refusal Effect of exercise of option Lessee in breach of covenant Rent to be determined by third person Mode of exercise Time for exercise Service of notice of exercise Relief in equity

Chapter 15 — Assignment and Subletting Assignment Subletting Parting with possession Mesne lessors Power to assign or sublet subject to consent Breach of covenant against assignment or subletting Form of assignment

Position of tenant after assignment Position of assignee Benefit and burden of covenants run with the land Assignee to indemnify lessee

Chapter 16 — Determination of Tenancies Modes of termination ‘Waiver’ after termination Effect on subleases Effect on power of attorney Effluxion of time Operation of condition Exercise of option to determine — break clauses Merger Merger and registered leases Merger and subleases Surrender Express surrender Surrender at law and in equity Statutory provisions Future surrenders Surrender by one tenant Surrender by operation of law Relinquishment of possession Acceptance by tenant of new interest Surrender by personal representative Grant of lease to third person Effect of surrender Forfeiture Notice to quit Disclaimer Acceptance of repudiation

Fundamental terms Removal and disposal of goods left on vacated premises

Chapter 17 — Forfeiture Forfeiture not confined to fixed terms Strict compliance essential The three grounds Lease made voidable only Words of condition Covenant made effective by proviso for re-entry Exercise of option to forfeit Proviso for re-entry Re-entry under a proviso for re-entry Actual re-entry Action to recover possession Issue of writ without service Position prior to judgment Common law demand for rent Notice to remedy Effect of forfeiture Mesne profits — double value and double rent Waiver Relief against forfeiture Registered leases Disclaimer Forfeiture and general principles of contract law

Chapter 18 — Condition of Forfeiture Forfeiture Notice to remedy Notice not required Necessity for notice

Possession claimed by mortgagee Contents of notice Breach incapable of remedy Breach capable of remedy Sufficient period of notice Service of notice Protection of position of lessee

Chapter 19 — Relief from Forfeiture Equitable and statutory relief Non-payment of rent Supreme Court Statutory relief Term of relief Sublessees

Chapter 20 — Notice to Quit Notice to quit Period of notice Period of notice for weekly tenancy Clear days unnecessary Notice must expire at end of period Statutory modification The ambulatory notice Who may give notice Notice by agent Notice by personal representatives and trustees Notice by corporations To whom notice may be given Verbal notices Informality and want of signature Part of demised premises excluded; extraneous premises included

Severance of the reversion Strict or benevolent construction Misdescription of tenancy Variation between notice served on two lessees Date of expiration ‘On or before’; ‘by’; ‘within’ Misdescription of premises Misnomer of landlord Misnomer of tenant Notice referring to other matter Reference to other documents Service Service by post Substituted service Second notice ‘Waiver’ of notice Payment of rent ‘Withdrawal’ of current notice

Chapter 21 — Re-entry by way of Self-help The two senses of re-entry Self-help in the recovery of possession Dangers of direct action Legal proceedings preferable

Chapter 22 — The Old Action of Ejectment Real actions Ejectment Fictions Nineteenth century reforms

Chapter 23 — Retail Tenancies Legislation:

Victoria Background Continuing operation of all retail leases legislation Scope of this chapter Retail Leases Act 2003 (as amended in 2005) Commencement of the 2003 and 2005 Acts Extended operation of the 2003 Act Application of the 2003 Act Meaning of ‘retail premises’ Exceptions to the ‘retail premises’ definition (and application of the Act) Residential areas and retail premises leases Formal requirements with respect to leases Renewals, assignments, subleases and the statutory minimum term Key money and goodwill Disclosure requirements Rent and rent review Turnover rent Security deposits Outgoings and other payments Costs and indemnities Repairs, refurbishment, relocation, demolition, alteration and refitting Compensation for interference Unconscionable conduct of landlord or tenant Additional requirements for shopping centres Miscellaneous provisions Functions of Small Business Commissioner Ministerial Determinations Dispute resolution system — alternative dispute resolution Dispute resolution system — Victorian Civil and Administrative

Tribunal (VCAT)

Chapter 24 — Retail Tenancies Legislation: New South Wales Background Premises subject to the Act Express duties of the landlord Unconscionable conduct and misleading or deceptive conduct proscribed Controls on security bonds Other duties Right to at least five years’ tenancy Rent review Rent based on turnover Rent and other payments Implied terms Prohibited terms Void terms Assignments and subleases Termination of lease Determination of disputes

Chapter 25 — Retail Tenancies Legislation: Queensland Background Premises subject to the Act Express duties of the landlord Unconscionable conduct proscribed Other duties Rent review Rent based on turnover

Rent and other payments Options to renew Implied terms Prohibited terms Assignments and subleases Termination of lease Determination of disputes

Chapter 26 — Retail Tenancies Legislation: Western Australia Background Premises subject to the Act Express duties of the landlord Assignments and subleases Implied terms Rent review Rent based on turnover Right to at least five years’ tenancy Termination of lease Determination of disputes

Chapter 27 — Retail Tenancies Legislation: South Australia Background Premises subject to the Act Express duties of the landlord Other duties Right to at least five years’ tenancy and options to renew the term Rent review Rent based on turnover Rent and other payments

Implied terms Prohibited terms Void terms Assignments and subleases Termination of lease Determination of disputes

Chapter 28 — Retail Tenancies Legislation: Australian Capital Territory Background Premises subject to the Act Express duties of the landlord Controls on security bonds Right to at least five years’ tenancy Rent review Rent and other payments Prohibited and void terms Assignments and subleases Termination of lease Determination of disputes Index

[page 1]

1 Relationship of Landlord and Tenant The grant and the term granted [1.1] The ordinary meaning of the word ‘lease’ was considered by Jacobs JA in Borambil Pty Ltd v O’Carroll [1972] 2 NSWLR 302 at 305–6: … it is necessary to consider the ordinary signification of the word ‘lease’. ‘If the owner of land consents by deed that another person shall occupy the land for a certain time, that is a lease’: Earl of St Germains v Willan [(1823) 2 B & C 216 at 220; 107 ER 363 at 365], per Bayley J. ‘The word lease in law is a well known legal term of well defined import. No lawyer has ever suggested that the title of the lessor makes any difference in the description of the instrument, whether the lease is granted by a freeholder or a copyholder with the licence of the Lord or by a man who himself is a leaseholder. It being well granted for a term of years it is called a lease’: per Jessel MR in Camberwell & South London Building Society v Holloway [(1879) 13 Ch D 754 at 759]. However, although it may be said that usually the word lease is to be taken to refer to chattels real it can by no means be said that it is so limited and that the phrase ‘lease for life’ is an inept phrase. ‘A lease doth properly signify a demise or letting of lands, rent, common, or any hereditament unto another for a lesser time than he that doth let it have in it. For when a lessee for life or years doth grant over all his

estate or time unto another, this is more properly called an assignment than a lease’: Sheppard’s Touchstone of Common Assurances 266. The word ‘leasehold’ is probably only appropriate to a lease for years, because a lease for life is a freehold, but it does not follow that the word ‘lease’ is inappropriate to the freehold estate constituted by the grant of a life tenancy or lease for life. There was strictly never the possibility of creating a life estate by feoffment with livery of seisin. The feoffment was only appropriate to the fee simple. If a life estate was created by livery of seisin the ceremony was called a ‘lease’: Littleton, s 57. ‘And yet sometimes improperly it [page 2] is called a feoffment when an estate of freehold (that is an estate for life) only doth passe’: Coke on Littleton, 9a. The other members of the Court of Appeal (Holmes and Moffitt JJA) agreed with Jacobs JA and the decision itself was affirmed by the Privy Council ([1974] 1 NSWLR 1); see also Greco v Swinburne Ltd [1991] VR 304 at 313–16. A lease strictly means a species of conveyance; but the word ‘lease’ can describe not only the grant, but also that which is granted, namely, the term: Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1 at 8; [1966] ALR 929. The expression ‘tenancy agreement’ is often used nowadays to describe a lease in the former sense. A tenancy agreement in this sense must not be confused with an agreement for a lease, that is to say, a contract whereby the parties agree to give and take a lease at some future time; with this we are not presently concerned. So, putting aside the mere contract represented by an agreement to grant a lease at some time in the future, discussed in [4.1], we have the lease or tenancy agreement (the grant) and the term which is granted, called sometimes a lease and sometimes a tenancy.

A contract creating an estate

[1.2] The present analysis is not concerned with the exceptional case of a lease or tenancy created by statute. With the exception of cases where the relation of landlord and tenant is created by statute, the relation arises out of contract: Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 at 550. In considering the nature of a lease for a term of years, Lord Templeman in Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 said, at 390: A demise for years is a contract for the exclusive possession and profit of land for some determinate period. Such an estate is called a ‘term’. Thus Coke on Littleton said (Co Litt, 19th ed, 1832, para 45b): ‘Terminus’ in the understanding of the law does not only signify the limits and limitation of time, but also the estate and interest that passes for that time. Blackstone in his Commentaries (2 Bl Com, 1st ed, 1766, p 143) said: Every estate which must expire at a period certain and prefixed, by whatever words created, is an estate for years. And therefore this estate is frequently called a term, terminus, because its duration or continuance is bounded, limited, and determined: for every such estate must have a certain beginning, and certain end. In Say v Smith (1530) 1 Plowd 269; 75 ER 410 a lease for a certain term purported to add a term which was uncertain; the lease was held valid only as to the certain term. Anthony Brown J is reported to have said (1 Plowd 269 at 272; 75 ER 410 at 415): Every contract sufficient to make a lease for years ought to have certainty in three limitations, viz in the commencement of the term, in the continuance of it, and in the end of it: so that all these ought to be known at the commencement of the lease, and words in a lease, which don’t make this appear, are but babble … And these three are in [page 3]

effect but one matter, shewing the certainty of the time for which the lessee shall have the land, and if any of these fail, it is not a good lease, for then there wants certainty. Originally the relation was one of contract only; it was not until the end of the fifteenth century that it could be said that the termor (the holder of the term) had an estate in land: Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1 at 6; [1966] ALR 929. For nearly 500 years it has been recognised that a lease is not a mere contract but creates rights in rem, that is to say, an estate or interest in the land demised: London and Northern Estates Co v Schlesinger [1916] 1 KB 20; [1914–15] All ER Rep 593; Whitehall Court v Ettlinger [1920] 1 KB 680; [1918–19] All ER Rep 229; Matthey v Curling [1922] 2 AC 180; City of London Corporation v Fell [1993] QB 589 (HL); and see Haidar v Blendale Pty Ltd [1993] 2 VR 524. In City of London Corporation v Fell the House of Lords approved the dictum of Nourse LJ in the Court of Appeal ([1993] QB 589 at 603–4): A lease of land, because it originates in a contract, gives rise to obligations enforceable between the original landlord and the original tenant in contract. But because it also gives the tenant an estate in the land, assignable, like the reversion, to others, the obligations, so far as they touch and concern the land, assume a wider influence, becoming, as it were, imprinted on the term or the reversion as the case may be, enforceable between the owners thereof for the time being as conditions of the enjoyment of their respective estates. Thus landlord and tenant stand together in one or other of two distinct legal relationships. In the first it is said that there is privity of contract between them, in the second privity of estate. To what, in ordinary legal parlance, do we refer when we speak of a ‘tenancy’? I think that we refer to a particular legal relationship between tenant and landlord under which land is held by the one of the other. A ‘tenant’, both by derivation and by usage, is someone who ‘holds’ land of another, for which purpose it is immaterial whether he does so by contract or by estate. Although he may remain contractually liable to the landlord, an original tenant who has assigned the tenancy, equally with an assignee who has himself assigned, cannot

properly be described as the tenant. He no longer holds the land. It is the assignee who now holds the land. It is he who has the tenancy. But see Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 (HL) where the House of Lords found that the grant of exclusive possession of a flat created a tenancy even though the Housing Trust was only a licensee from the freehold owner, and had no freehold estate. The comment is made in Cheshire and Burn’s Modern Law of Real Property (18th ed, 2011) at 183 (referring to Lord Hoffman’s speech at [2000] 1 AC 415) that: ‘This is not simply a decision that a lease has the characteristics of a contract, creating personal obligations between the parties; but a decision that a lease can exist that is only personal to the parties and need not create an estate in the land at all.’ This, in effect, would appear to take the ‘contractualisation’ of leases to its greatest extent, and beyond the position reached by the High Court in Shevill v Builders Licensing Board (1982) 149 CLR 620 and Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; as to which see [16.27]; and, more generally, see also [15.1]. The position reached by the House of Lords in Bruton (particularly that of Lord Hoffman) is at odds [page 4] with the relatively recent decision of Hasluck J in the Western Australian Supreme Court in City of Rockingham v PMR Quarries Pty Ltd (2001) 118 LGERA 93, though apparently made without Bruton having been cited. In this respect, Hasluck J said: [37] The doctrine of estates in land recognises that an estate in land is a legal entity separate from the land itself. Leases were originally regarded as a personal transaction which afforded to the tenant a right to sue the landlord for a breach of contract in the event of default. When the action of ejectment was developed, the dispossessed tenant obtained the right to recover the land. Thereafter, it was recognised that the lease gave its holder proprietary rights in the land, rather than simply personal rights pursuant to the contract. The concept of an estate less than freehold, or leasehold estate, became established.

[38] This has led to a clear distinction being drawn between a lease and a licence. When an owner of land provides a tenancy, a leasehold estate in the land passes to the tenant. The classic definition of a licence was propounded by Vaughan CJ in Thomas v Sorrell (1673) Vaugh 330, namely: ‘A dispensation or licence properly passeth no interest nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful.’ [39] Once a lease has been created, the continuing interest in the land held by the landlord is the leasehold reversion. A further consequence of the doctrine of estates, whereby legal entitlements are separated from the land itself, is that the landlord, as owner and holder of the leasehold reversion, is at liberty to sell the freehold estate during the term of the lease. Likewise, a leasehold interest, being an interest in land, is of its nature transferable. If the right granted is, of its nature, not transferable or is otherwise personal to the grantee, then this suggests that it is not a leasehold interest. [40] The notion that a lease confers upon the tenant an estate or interest in the land seems to have brought with it a recognition that a tenant is entitled to exclude all persons from the leased land, including even the landlord. Thus, in distinguishing between a lease and a licence, a crucial test has sometimes been supposed to be whether the occupier has exclusive possession of the land or not. If the occupier was let into exclusive possession, he was said to be a tenant; whereas, if he had not exclusive possession, he was only a licensee. See Taylor J in Radaich v Smith (1959) 101 CLR 209 at 218. And see Wilson v Anderson (2002) 213 CLR 401. The effect of the Australian authorities is conveniently and very concisely summarised by Master Burley in PJ Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88 at [21]: ‘A right to possession which creates an interest in the land, as opposed to a contractual right to occupy, is an essential part of the lease: Radaich v Smith (1959) 101 CLR 209; The Wik Peoples v The State of Queensland and Ors (1996) 187 CLR 1 at 116 per Toohey J, at 152 per Gaudron J, at 194–5 per Gummow J and at 229 per Kirby J.’ In Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at

51–2 Deane J pointed to the difficulties the common law has had in dealing with leases: A lease for a term of years ordinarily possesses a duality of character which can give rise to conceptual difficulties. It is both an executory contract and an executed demise. [page 5] Its origins lie in contract rather than in real property in that the lessee’s remedies were originally restricted to a personal action against the lessor on his covenant to give enjoyment of the land (see Pollock and Maitland, The History of English Law Before the Time of Edward 1, 2nd ed, 1898, Cambridge University Press reprint, 1952), vol 2, pp 106–7; Holdsworth, A History of English Law, 5th ed, 1942, vol 3, pp 213–4). In time, however, it became accepted that a lessee for a term, although denied ‘seisin’ in the strict sense, had a right to ‘possession’ which was an interest in the land that he was entitled to protect against third parties; initially by a limited writ in ejectment (quare ejecit infra terminum) framed in terms which restricted it to an action against a purchaser from the lessor and subsequently by the remedies afforded under the Statute of Gloucester and by a specialised action of trespass (de ejectione firmae) which, by the end of the middle ages, gave recovery, not merely of damages, but of possession of the land (compare Lat Ten, s 324; Co Litt, 2000b; Pollock and Maitland: op cit, vol 2, pp 107ff, particularly p 110; Holdsworth: op cit, vol 3, pp 214ff; Challis’ Law of Real Property, 3rd ed (1911) pp 63ff, 80, 98ff, Appendix I). Notwithstanding this legal protection of the lessee’s interest in the land, chattels real were never incorporated into the strict system of feudal tenements. The interest of the lessee in the land was, however, accepted as analogous to a form of feudal tenure to the extent that some authorities expressed the view that the lessee was required to do fealty (see eg, Bracton, pp 27, 80; Challis, pp 63–6, Appendix I). The difficulties arise both from the manner in which leases were classified,

in terms of realty and personalty, and because of the fact the contractual obligations incurred by the parties were seen as merely incidental to the creation of the estate: Lobb v Vasey Housing Auxiliary (War Widows Guild) [1963] VR 239 at 247. Deane J, in Progressive Mailing House v Tabali, at 51–2, continued: As they developed, the contractual doctrines of frustration and termination for fundamental breach (or for repudiation) were not seen as applicable to an executed demise under which an interest or estate in land had actually passed to the tenant (see eg, Halloran v Firth (1926) 26 SR (NSW) 183 at 187 and, on appeal, (1926) 38 CLR 261 at 268, but cf at p 269; London & Northern Estates Co v Schlesinger [1916] 1 KB 20 at 24; Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318; Leightons Investment Trust Ltd v Cricklewood Property and Investment Trust Ltd [1943] KB 493 and, on appeal, [1945] AC 221 at pp 233–5 and 244–5 but cf at pp 228ff and 236ff). The rationale of that approach was the perceived inappropriateness of those contractual doctrines to a leasehold estate viewed as analogous to a form of feudal tenure. However, the courts are now viewing leases from a commercial rather than an historical perspective with the result that contractual doctrine is now being applied more freely: see Shevill v Builders Licensing Board (1982) 149 CLR 620; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675; and Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105. The application of contractual doctrines to leases is discussed in Chapter 6. A lease creates mutual rights and obligations which can only be given any meaning if made between independent parties: see Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 (CA). It followed, as was decided in that case, that a nominee [page 6] could not grant an effective lease to his principal and any such lease was a pure

fiction: see at 343–5. See also Kildrummy (Jersey) Ltd v Inland Revenue Commissioners [1990] STC 657; Rye v Rye [1962] AC 496; Grey v Ellison (1856) 1 Giff 438; 65 ER 990; and [5.14].

Exclusive possession the touchstone of a lease [1.3] Not every contract whereby one person grants to another the right to use land is a lease. Leases are to be distinguished from licences. This distinction has been much agitated in the courts in recent years, but, while the authorities have multiplied, it cannot be said that their effect has been to clarify the distinction. On the contrary, in the last 20 years the opposing currents of authority on the subject of licences have created a turbidity which makes difficult the framing of a definition of a lease. The doubt which has been created was not felt 50 years ago. We begin with the notion that the touchstone for distinguishing a lease from a licence is that the former creates an estate or an interest in land. This is in itself not very helpful, and some further test is necessary for determining whether an estate or interest in land is created. At the turn of the century a comfortable certainty existed as to the test to be applied: the test was whether exclusive possession of the land was given to the supposed lessee. In 1904 the Judicial Committee laid down the law as follows: ‘If the effect of the instrument is to give the holder an exclusive right of occupation of the land, though subject to certain reservations or to a restriction of the purposes for which it may be used, it is in law a demise of the land itself’: Glenwood Lumber Co v Phillips [1904] AC 405 at 408; [1904–7] All ER Rep 203 at 205. Five years later, similar definitions were formulated in the High Court. In Landale v Menzies (1909) 9 CLR 89 at 111, Barton J quoted the definition of a lease given by Woodfall on Landlord and Tenant, 17th ed, p 141, as ‘a contract for the exclusive possession of land or tenements for some certain number of years or other determinate period’. In the same case, Griffith CJ, at 100–1, observed that ‘a contract for the exclusive occupation of land for a determinate period, however short, constitutes a lease’. The law as stated by the Privy Council in Glenwood Lumber Co v Phillips has been described as stating ‘the crucial test’: Radio Theatres Pty Ltd v City of Coburg [1948] VLR 84 at 86. The text-writers

were not beset by doubts. The definition given by Woodfall in 1902 has already been mentioned. Edgar Foa, who in 1907 contributed the article on ‘Landlord and Tenant’ in the Encyclopaedia of the Laws of England, vol 7, p 633, wrote as follows: It is essential to a lease … that the lessee should take some estate, as distinguished from a mere licence to use the demised premises. The accepted test of this distinction is to inquire whether or not the grantee gets exclusive possession of some defined portion of land, or a house or room, for some definite period … [page 7] Similarly, Redman on Landlord and Tenant, 6th ed (1912), p 101, put the matter as follows: A lease or demise entitles the tenant to the exclusive possession, for some definite period, of the matter demised; but if a person is not to have the exclusive possession of, or sole dominion over, the matter, then his limited right to use and enjoyment is a licence, which confers no estate in the property … Redman continued at pp 102–3: If, however, instead of a mere right of user the terms of the agreement show that the grantor intends to part with an estate in the property, and to confer an exclusive right of occupation, so that the grantor has no right to come upon the premises without the consent of the occupier, a demise is created, though no words of letting are used, and though the remuneration is not spoken of as rent. It is thought that in this passage the words ‘and to confer an exclusive right to occupation’ are intended, not to impose an additional requirement, but to explain what it is that will amount to an intention to part with an estate in the property. Despite earlier English decisions, there does not appear to be any doubt that the giving of the right to exclusive possession is an essential characteristic of a

lease: see Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 390 (per Lord Templeman); and Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 (CA); a position reaffirmed in Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 (HL); and see Swan v Uecker (2016) 50 VR 74 (Croft J). See also the review of the earlier authorities in All ER Rev pp 171–8 and 185–91, and at [1.4]. It has been said that the only necessary characteristic of any tenancy is that it should give the right to exclusive possession to the tenant for an ascertainable period, whether ‘fixed or renewable’ (see Bruton v London and Quadrant Housing Trust at 413, Lord Hoffman); reservation of rent is not essential: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47; Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323; and see [1.4], [1.12], [4.8] and [11.1] and following; and see, particularly, NZI Insurance Australia Ltd v Baryzcka (2003) 85 SASR 497 (FC) at 506 ([30]–[39]), discussed at [4.8] and [11.1]. See further Commonwealth v K N Harris Pty Ltd [1965] NSWR 63; Ex parte Robert John Pty Ltd; Re Fostars Shoes Pty Ltd [1963] NSWR 419; 63 SR (NSW) 260; Danita Investments Pty Ltd v Rockstrom [1963] NSWR 1275; 80 WN (NSW) 1287; Hayes v Seymour-Johns (1981) 2 BPR 9366; Lewis v Bell (1985) 1 NSWLR 731 Greco v Swinburne Ltd [1991] 1 VR 304 at 313; Wilebbed Pty Ltd v Parramatta Riverside Theatres Pty Ltd (SC(NSW), Hodgson J, 7 November 1995, unreported); Melbourne Pathology Pty Ltd v Health Insurance Commission Pty Ltd (1997) 72 FCR 513 (FCA); Caltex Properties Ltd (in liq) v Love (1997) 95 LGERA 132; BC9702078 (SC(WA), Parker J); City of Rockingham v PMR Quarries Pty Ltd (2001) 118 LGERA 93 (SC(WA)); Wilson v Anderson (2002) 213 CLR 401; and NZI Insurance Australia Ltd v Baryzcka. As the cases indicate, whether exclusive possession is granted is a matter of construction of [page 8] the instrument in question: see Bruton v London and Quadrant Housing Trust [2000] 1 AC 406, particularly the speech of Lord Hoffman at 413; and see [1.4]. The cases also indicate that the courts are concerned with substance and not mere form: see Lord Templeman, ‘Form and Substance’, Rationalizing

Property, Equity and Trusts — Essays in Honour of Edward Burn, pp 130–4 (Ch 7). It is, however, important to bear in mind that a landlord’s right to enter and inspect is not, necessarily, inconsistent with the grant of exclusive possession amounting to a lease and, further, that a right of exclusive possession does not necessarily connote a lease. Thus in Gray v Taylor [1998] 1WLR 1093b (CA) Sir John Vinelott said (at 1097): Having cited a passage in the judgment of Blackburn J in Allan v Liverpool Overseers (1874) LR 9 QB 180, 191–192, where the position of a lodger is more fully described, Lord Templeman continued [in Street v Mountford [1985] AC 809, at 817–818]: If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession and is a tenant. It is of course well settled that, if on its true construction an agreement constitutes a tenancy, the fact that it may be described as a licence is simply neither here nor there. However, it is important to bear in mind a subsequent observation which comes almost immediately after the passage I have cited, where Lord Templeman said: There can be no tenancy unless the occupier enjoys exclusive possession; but an occupier who enjoys exclusive possession is not necessarily a tenant. He may be owner in fee simple, a trespasser, a mortgagee in possession, an object of charity or a service occupier. That observation is elaborated towards the end of his speech where he said, at pp 826–7: Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive

possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. These observations accord with those of Taylor J in Radaich v Smith (1959) 101 CLR 209 at 219–20 that ‘… exceptional cases may arise in which it will be seen that a right to exclusive occupation or possession has been given without the grant of a leasehold interest’; which were referred to with approval by Tadgell J in KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 at 177. In this respect, see also Metha v Royal Bank of Scotland plc (1999) Times 53 (25 January 1999)(QBD). Whether the [page 9] converse may be true was considered by Hasluck J in the Western Australian Supreme Court in City of Rockingham v PMR Quarries Pty Ltd (2001) 118 LGERA 93, with reference to Wik Peoples v Queensland (1996) 187 CLR 1: [52] During the course of argument, my attention was drawn to the recent decision of the High Court in Wik …, in which various members of the High Court looked at the nature of a leasehold estate in land. This case was mentioned also by the Land Valuation Tribunal in the course of its determination with particular reference being made to the reasoning of Toohey J at 115 to 117. His Honour observed at 118 that the decided cases point to exclusive possession as a normal incident of a lease. The authorities do not exclude, however, an inquiry whether exclusive possession is in truth an incident of every arrangement which bears the title of a lease. These observations arguably left open the question of whether the test of exclusive possession should continue to be regarded as decisive. [53] In my view, the Wik case cannot be regarded as a decision overruling or casting significant doubt upon the reasoning in the earlier decisions and the adoption of exclusive possession as the decisive test in the context of commercial transactions. The issue

before the High Court in Wik was of a special kind concerning the relationship between principles of common law and native title rights. Further, and in any event, it seems that a majority of the High Court, including Toohey J, did not consider that the pastoral leases in question, being the product of specific statutory provisions, did confer exclusive possession of a kind sufficient to extinguish native title rights. Accordingly, I am not persuaded that the case can be viewed as a ruling upon the effect of exclusive possession in the context of a commercial transaction which turns upon the application of common law principles. These observations are strengthened in that they are consistent with the approach of the High Court in the subsequent case of Wilson v Anderson (2002) 213 CLR 401. The authorities have, until recent times, insisted upon, or assumed, a proprietary rather than mere personal aspect to the right to exclusive possession: see [1.2], but note the contrary position reached in Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 (HL).

Exclusive possession and licences [1.4] A doubt which was raised in the English cases was whether the grant of exclusive possession is inconsistent with the grant of a mere licence — not a lease. The distinction between a lease and a licence has loomed large in English decisions on residential occupancy arrangements. Generally, if they were characterised as tenancies then legalisation such as the Rent Act 1968 would be applicable — a result desired by ‘tenants’ but not by ‘landlords’. Consequently many of the English cases on the lease and licence distinction, though they proliferate in the higher (and highest) courts, are of little interest in Australia as they are concerned primarily with the quirks of English legislation. Nevertheless a number of these decisions are now usefully considered for their treatment of general law principles on this distinction. [page 10]

The doubt arose initially in England as a result of a series of decisions in the course of the 1950s and 1960s. In 1952 Denning LJ (as he then was) expressed the view that the test of exclusive possession was by no means decisive: Errington v Errington [1952] 1 KB 290 at 297. His Lordship said that the difference between a tenancy and a licence was that in a tenancy an interest passed in the land, whereas in a licence it did not; that in distinguishing between a lease and a licence the test of exclusive possession was by no means decisive; that the matter was one of intention and that, if it appeared that all that was intended was that the occupier should be granted a personal privilege with no interest in the land, he or she would be held to be only a licensee, notwithstanding that he or she was given exclusive possession. In Crane v Morris [1965] 1 WLR 1104 at 1107–8, Lord Denning went so far as to say: At one time it was said … that the difference between a licence and a tenancy was that, on a tenancy, the occupier had exclusive possession, but on a licence he had not exclusive possession. We have got long past those days. It is now perfectly well settled that a man may be a licensee (and no tenant) even though he has exclusive possession … Compare his Lordship’s reference to ‘old law which is now gone’ in ShellMex and BP Ltd v Manchester Garages Ltd [1971] 1 All ER 841; [1971] 1 WLR 612 at 616. In Isaac v Hotel de Paris Ltd [1960] 1 WLR 239, the Judicial Committee held that the intention of the parties was the paramount consideration and that, while the fact of exclusive possession was of great importance, if it appeared that all that was intended was that the supposed lessee should have a personal privilege with no interest in the land, he would be a mere licensee. Thus there appears to be the authority of the Judicial Committee for the proposition that the grant of exclusive possession is not inconsistent with the creation of a mere licence. Some three months before the decision of the Judicial Committee was given, the High Court gave judgment in Radaich v Smith (1959) 101 CLR 209. The court was there concerned with the question whether an agreement relating to the use of refreshment rooms was a lease or a licence. Unfortunately, not all members of the court dealt with the question whether the grant of the right to exclusive possession was inconsistent with the creation

of a mere licence. McTiernan J, at 214, said that the true test of a supposed lease was whether exclusive possession was conferred upon the putative lessee and that the ‘exclusive possession’ test had survived intact despite the criticism it received in Errington v Errington. Taylor J, at 217, held that the effect of the instrument under consideration was to grant a right to exclusive possession and that in consequence it was ‘inevitable’ that the instrument should be held to create a leasehold interest. His Honour continued: It will be seen that I have treated the question in this case as concluded by the fact that the instrument conferred upon the appellant the right to exclusive possession for the specified term. And it seems to me that where, as in cases such as the present, it [page 11] becomes necessary to identify a particular transaction as either a lease or a licence this factor must be decisive. The instrument either makes a grant of an interest in the land or it does not; if it does, a leasehold interest is created and if it does not then nothing more than a licence is given. I do not, of course, overlook that an interest in land for example, an easement or a profit á prendre may be created without a grant of possession. Nor do I wish to assert that whenever a legal owner admits another to possession of his land a leasehold interest is necessarily created. For instance, possession given to a builder under the terms of a building contract does not create such an interest. What I have in mind is that where there is a grant of a right for a determinate period in respect of land and the question is posed whether the grant creates a lease or a licence the question may be resolved by considering whether the right in question is a right to exclusive possession. Menzies J, at 220, regarded the conferring of the right of exclusive possession as decisive. Windeyer J, at 222, put the matter as follows: Whether the transaction creates a lease or a licence depends upon intention, only in the sense that it depends upon the nature of the

right which the parties intend the person entering upon the land shall have in relation to the land. When they have put their transaction in writing this intention is to be ascertained by seeing what, in accordance with ordinary principles of interpretation, are the rights that the instrument creates. If those rights be the rights of a tenant, it does not avail either party to say that a tenancy was not intended. What then is the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right to exclusive possession is a tenancy and the creation of such a right is a demise. To say that a man who has, by agreement with a landlord, a right of exclusive possession of land for a term is not a tenant is simply to contradict the first proposition by the second. His Honour went on to refer to recent decisions holding that only licences had been created, saying: These decisions are largely a by-product of rent restriction statutes and other legislation here and in England. They are all explicable if they mean, as I think they all do, that persons who are allowed to enjoy sole occupation in fact are not necessarily to be taken to have been given a right of exclusive possession in law. If there be any decision which goes further and states positively that a person legally entitled to exclusive possession for a term is a licensee and not a tenant, it should be disregarded, for it is self-contradictory and meaningless. Unfortunately, Dixon CJ contented himself with observing that he had nothing to add to the reasons given by the other members of the court. Windeyer J had further occasion to consider the nature of a lease in Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1; [1966] ALR 929. His Honour was there concerned with the ‘statutory tenancy’ of a tenant of prescribed

[page 12] premises after the expiration of a notice to quit. Referring to the statutory tenant, Windeyer J said at (CLR) 6–7: What rights did the law actually give to Virgona? That rather than their description, is the essential question. It gave him a right to continue in occupation subject to his performing in favour of his landlord the taxpayer what had formerly been his contractual obligations under the lease, to pay rent and so forth. Until he should be ordered by a competent court to give up possession, he had a right to exclusive possession as against all others including his landlord. Such a right, when it flows from contract with the landlord, is the very essence of tenancy. It creates an interest in land: Radaich v Smith (1959) 101 CLR 209. It seems to me that this same right when it flows from statute rather than from contract is an interest in relation to the land, if not, in a technical sense, an estate in the land. In Lapham v Orange City Council (No 2) [1968] 2 NSWR 667 it was held by the Court of Appeal, following Radaich v Smith (1959) 101 CLR 209, that to determine whether a tenancy was created the test was whether there was conferred the right to exclusive possession of the property. Support for the view that exclusive possession is the touchstone of a lease is also to be found in the remarks of Williams J in Clarke v Tyler (1949) 78 CLR 646 at 658, and in the observations of the same judge in Minister of State for the Army v Dalziel (1944) 68 CLR 261. In the latter case his Honour said, at 305: The principal purpose of the lessee in entering into a lease is to obtain the exclusive possession of the demised property so that he may use and enjoy it for those purposes for which the property is suited and which are not forbidden by the lease. This exclusive possession is, therefore, of the very essence of the proprietary interest conferred upon a lessee by a lessor. In Claude Neon Ltd v Melbourne and Metropolitan Board of Works (1969) 43 ALJR 69, the High Court had to consider whether it was possible to create a leasehold interest over the external surface of a building for the purpose of

advertising signs. Kitto J said, at 71, referring to Radaich v Smith, that: ‘… the inquiry must be whether the substance and effect of the documents in question was to grant the appellants a right of exclusive possession of any part of the Corner Hotel Building.’ The other members of the court determined the question on this basis without actually referring to Radaich v Smith. Kitto and Windeyer JJ were of the opinion that the documents were instruments of licence in the guise of leases. The majority found they were leases. In Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199; 3 ATR 546, Mason J considered, by way of obiter, whether there was any conflict between Radaich v Smith and the advice in Isaac v Hotel de Paris Ltd [1960] 1 WLR 239. His Honour, at CLR 212, concluded that the question whether the grant is to be described as a lease rather than as a licence is to be answered initially: … by reference to the test: Does it confer on the appellant a right of exclusive possession? (See Radaich v Smith (1959) 101 CLR 209.) The decision of Mason J was followed in [page 13] Dampier Mining Co Ltd v Federal Commissioner of Taxation (1981) 35 ALR 335, see 348–9, 356. The decision of the Judicial Committee in Isaac v Hotel de Paris Ltd is not, in my opinion, inconsistent with Radaich v Smith. The advice of the Judicial Committee was also considered by the House of Lords in Street v Mountford [1985] AC 809 at 823. In ICI Alkali (Aust) Pty Ltd (in vol liq) v Federal Commissioner of Taxation [1977] VR 393, McInerney J dealt with the question of whether a document which purported to be a lease from the governor of the state of South Australia created a leasehold estate having regard to the various limitations placed upon the grantee in relation to the use of the land by the terms of the document and by legislative provisions. In considering this question, his Honour applied the test laid down by Windeyer J in Radaich v Smith, namely, was the grantee given a legal right to exclusive possession of the land for the relevant term. He was inclined to the view that

in all the circumstances of the case, the grantee acquired a lease and not a licence of the land in question. More recently, in Lewis v Bell (1985) 1 NSWLR 731, the New South Wales Court of Appeal reviewed the authorities. In that appeal the court considered a document styled ‘This Licence Agreement’ which granted rights in respect of a number of horseboxes and certain other facilities. In a judgment adopted by the other members of the court Mahoney JA applied the test in Radaich v Smith (1959) 101 CLR 209, and the approach adopted by the High Court to determine whether the grantee had been given the right of exclusive possession, that ‘the court must initially go to the terms of the grant’ (quoting Windeyer J at 223: see (1985) 1 NSWLR at 735). In most cases the position will then be clear but there will be circumstances where it is not clear what is being granted, even from the terms of the grant ‘construed in light of the whole agreement and its context’ (Mahoney JA at 735). His Honour continued at 735: In deciding, in such cases, whether what has been granted is the right to exclusive possession, the court, in the process of construction, has in practice looked, inter alia, to two things: the nature of the rights which, in terms, have been granted; and the intention of the parties. The nature of the rights granted is significant as an inference can be drawn that the grantee was, or was not, granted exclusive possession. The inference has, said Mahoney JA at 735, been put on this basis, at least: First, it has been held proper to infer that the rights granted do not carry by implication the grant of exclusive possession because the rights granted are inconsistent with the right to exclusive possession. Thus a leasehold interest is an interest in land and, as such, is of its nature transferable: Richardson v Landecker (1950) 50 SR (NSW) 250 at 255; 67 WN 149 at 151. If the right granted is, of its nature, not transferable or is otherwise personal to the grantee it will, as such, not be a leasehold interest: cf Abbeyfield (Harpenden) Society Ltd v Woods [1968] 1 WLR 374 at 376; [1968] 1 All ER 352 (n) at 353. In principle, where the rights are of their nature inconsistent with there being a lease, there will be no implication of a grant of exclusive possession. Second, it has been

[page 14] held necessary to infer the grant of exclusive possession because the rights which have in terms been granted can be enjoyed only by one who has been granted exclusive possession. The grant of exclusive possession has been inferred from the nature of what has been expressly granted. This was the basis of the decision of their Honours in Radaich v Smith (see at 215, 217, 221, 223–5). And see Hamilton Island Enterprises Ltd v Croycom Pty Ltd [1998] ANZ ConvR 615; Q ConvR ¶54-509 (SC(Qld), Thomas J). Land Reclamation Co Ltd v Basildon District Council [1979] 1 WLR 767 provides an example of an incorporeal right, an easement of way, not capable of being occupied in the ordinary sense. His Honour continued by saying that the usual principles apply to the implication of a grant of exclusive possession as apply generally, namely that ‘it is necessary in order to give business efficacy to the rights which otherwise have been granted’. Reference was made to Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337. No implication should be made, said Mahoney JA, if the parties had directed their attention to the matter or expressly provided that no implication was to be made. However, his Honour was apparently not meaning to suggest that it is open to the parties to ‘declare’ an agreement to be of a type at variance with the position at common law. Presumably Lord Templeman’s speech in the House of Lords in Street v Mountford [1985] AC 809 at 819, which was almost contemporaneous, was not available to Mahoney JA or he may have cited his Lordship’s colourful analogy: ‘The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.’ Instead, he relied upon the statement of Windeyer J in Radaich v Smith at 222, that the parties cannot ‘escape the legal consequences of one relationship by professing that it is another’. Nevertheless, this does not mean that the intention is irrelevant but, as Mahoney JA makes clear at 736 and 737, it is potentially applicable in two stages in the court’s reasoning. The first stage, aspects of which have already been considered, involves construing the document according to the ordinary

rules of interpretation and construction. Intention thus gathered may lead the court to read down words that may, out of context, be construed as granting exclusive possession. Any express statement of intention by the parties, particularly as to the nature of the relationship to be created, ‘will be of substantial, though not necessarily conclusive importance: it will, in accordance with the rules of construction, yield to the intention to be derived from the document as a whole’. Similarly, intention is relevant to another aspect of construction, the implication of terms on the basis of business efficacy. As has already been indicated, this may include the implication of a grant of exclusive possession: but, in this respect, see the comments of Tadgell JA in KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 at 186, where his Honour questions ‘whether the decision in Radaich v Smith is properly to be understood as depending ultimately on principles governing the implication of terms’. [page 15] At the time Mahoney JA delivered his judgment, the English and Australian courts appeared to agree on the functions of intention in this first stage but not in the second, the classification stage. It was in this stage that the significance of intention was less in the view of the Australian courts. His Honour said at 737: ‘Once the nature of the rights granted is finally determined, the classification of the transaction, as lease or licence, will depend upon whether the rights are or are not those of exclusive possession.’ In other words, no amount of labelling will turn a fork into a spade. As Lord Templeman’s statement implies, the House of Lords has, in more recent times, had occasion to reconsider the English position. His Lordship, in his speech in the House of Lords in Street v Mountford [1985] AC 809, reviewed the English authorities and came to the same view on the proper role of the intention of the parties as has been taken by the Australian courts. He said, at 826–7: My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred.

Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy. His Lordship followed by saying that ‘the position was well summarised by Windeyer J sitting in the High Court of Australia in Radaich v Smith (1959) 101 CLR 209 at 222’ (the substance of which is contained in the first quote from Windeyer J, above) and concluding with the remark that ‘I gratefully adopt the logic and the language of Windeyer J’. It remains to be seen whether the English Rent Acts will lead to the maintenance of a divergence of approach in particular cases (and in relation to the effect of the Rent Acts in this context, see the comments of Tadgell J in KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 at 180). This position was reaffirmed in Bruton v London and Quadrant Housing Trust [2000] 1 AC 406. Thus Lord Hoffman said in that case (at 413): The fact that the parties use language more appropriate to a different kind of agreement, such as a licence, is irrelevant if upon its true construction it has the identifying characteristics of a lease. The meaning of the agreement, for example, as to the extent of the possession which it grants, depend [sic] upon the intention of the parties, objectively ascertained by reference to the language and relevant background. The decision of your Lordships’ House in Westminster City Council v Clarke [1992] 2 AC 288 is a good example of the importance of background in deciding whether the agreement grants exclusive possession or not.

[page 16] There are a number of useful examples of the application of the approach now reaffirmed by the appeal courts: see Hayes v Seymour-Johns (1981) 2 BPR 9366; Streatfield v Winchcombe Carson Trustee Co (Canberra) Ltd [1981] 1 NSWLR 519 at 526–629; Australian Aggregates (NSW) Pty Ltd v Maxmin Pty Ltd (SC(NSW), Hodgson J, 16 May 1988, unreported); AG Securities v Vaughan [1990] 1 AC 417 (HL); and see Bretherton v Paton [1986] 1 EGLR 172; Ogwr Borough Council v Dykes [1989] 1 WLR 295 (CA); and Family Housing Association v Jones [1990] 1 WLR 779 (CA) (overruled by the House of Lords in Westminster City Council v Clarke [1992] 2 AC 288 but only in respect of particular legislation); and see All ER Rev 1989 pp 184–9; All ER Rev 1990 p 172; but compare Colchester Borough Council v Smith [1991] Ch 448 at 483–5; and see KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 (CA); and Wilebbed Pty Ltd v Parramatta Riverside Theatres Pty Ltd (SC(NSW), Hodgson J, 7 November 1995, unreported). The House of Lords again reaffirmed the decision in Street v Mountford in Westminster City Council v Clarke (and see Uratemp Ventures Ltd v Collins [2002] 1 AC 301 (HL)). In the absence of a written agreement the same principles apply, but the court must draw its own conclusions ‘as to whether there was or was not a right of exclusive possession from the circumstances and facts of the case in order to see whether the proper inference is that such a term was included by means of, and derived from a history of, such a right being recognised’: Smith v Northside Developments Ltd [1987] 2 EGLR 151 at 152 (CA); and see Ex parte Robert John Pty Ltd; Re Fostars Shoes Pty Ltd [1963] NSWR 419; 63 SR (NSW) 260, considered in Australian Aggregates (NSW) Pty Ltd v Maxmin Pty Ltd at p 46 of his Honour’s judgment. The process of construction adopted by the courts for determining whether exclusive possession has been granted is helpfully discussed by Young J in National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97,322. The facts of this case were not dissimilar to Claude Neon Ltd v Melbourne and Metropolitan Board of Works in that they raised the question whether an agreement for the placing of signs on the external wall of an hotel bottle shop was an agreement for lease. Young J said, at pp 9733–4:

It is quite plain from the decision of the High Court of Australia in Claude Neon Ltd v Melbourne & Metropolitan Board of Works (1969) 43 ALJR 69, that it is possible to create a leasehold interest in favour of an advertising company over portions of the external surface of a building for the purpose of advertising signs. The question in the instant case is whether, at least in equity, such an interest was created. When looking to this question one must see whether exclusive possession as a legal concept has been granted to the person who claims to be lessee. In dealing with this question one does not merely look to see whether the magic words ‘exclusive possession’ have been used in the document. But one looks at the whole of the document and, at least, if the document is ambiguous, one looks to the surrounding circumstances as well. I discussed the authorities which led to this result in Chaka Holdings Pty Ltd v Sunsim Pty Ltd (1987) NSW ConvR ¶55-367 at 57,295–57,306, and it is unnecessary [page 17] to repeat that analysis here. Indeed, it is clear from such cases as Radaich v Smith (1959) 101 CLR 209; [1959] ALR 1253 that members of the High Court did look at the surrounding circumstances, such as the fact that a milk bar business could only be carried on in reasonable convenience by persons having exclusive possession, when considering whether or not there was a lease or licence created by the document before them in that case. Again, for the reasons I considered in the Chaka case, above, where it is not a sham, one gives significance to the title or label that the parties have given to the document, as well as the words which they have used. In the instant case there are some words which are indicative of lease, for instance, the word ‘covenant’, the words ‘exclusive possession and quiet enjoyment’ in cl 12, and the phraseology of cll 1 and 2 themselves. Considerations that go the other way are the use of the word

‘agreement’ rather than the word ‘lease’, the absence of any words such as ‘grant’, the imprecision of all the consideration for the rights contained in the agreement and the premises over which those rights are granted, the imprecision of the word ‘owner’ and, indeed, the fact that the person who appears as owner was not the owner, but that the people in a commercial relationship obviously thought it was good enough to have a director sign rather than go through the formalities of searching titles, etc. Furthermore, the term ‘consideration’ is used, rather than the term ‘rent’. The term ‘agreement’ is employed rather than the term ‘lease’ so that of the indications one way or the other there are perhaps more indications in the document itself that it is not to be a lease conferring proprietary rights than the other way round. When one focuses on the rights that are granted one meets such great imprecision as seems to me that it is unlikely that the document is a lease. I have already dealt with the problems as to the parties to the document. So far as the demised premises are concerned, the document grants rights over ‘the area’. The evidence does not show whether the west wall is 10 ft by 5 ft or the south wall 20 ft by 10 ft. If that was not the dimensions of the wall then the area demised would only be part of the wall. I do not think this is fatal, however, because it seems to me that if there is the agreement to grant a lease over part of a wall, and before the suit for specific performance is brought that part of the wall is defined by agreement between the parties, then the court is able to grant specific performance and order the proprietor to grant a lease over the area that has then been defined: compare Talga Investments Pty Ltd v Tweed Canal Estates Pty Ltd (1974) 1 BPR 9675. However, the fact that the area is left imprecise tells against a lease. Again, there is a problem as to whether it is the surface of the exterior area which is given over to the plaintiff or whether it is the whole of the wall. This problem was adverted to by A H Simpson CJ in Eq in Brooks-Thornley v McMurtrie (1904) 21 WN (NSW) 127, particularly at 128–9. His Honour said that if the document was a lease it was difficult to say what the demised premises were and that assisted him to come to the view that the document in that case, which was the right to use a wall for display of a photographer’s showcase, was a

mere licence. The problem is also adverted to by the dissenting judgment of Kitto J in the Claude Neon case itself. The answer given to this submission is that it is quite possible to give a lease of the surface of the wall and grant ancillary contractual rights to insert bolts, etc, into the property of the hotel. Of course, it is quite possible to do it, but the question is whether cl 2(a) on its proper construction operates to give the same rights to the surface and the inner part of the wall or whether it purports to grant a lease of the surface and [page 18] mere contractual rights to the other parts of the wall. It seems to me that the better construction is that only one right is given and this is reinforced by the word ‘including’ in cl 2(a). This sits better as a licence than a lease. Parker J in Caltex Properties Ltd (in liq) v Love (1997) 95 LGERA 132; BC9702078 (SC(WA)) also emphasised that the critical factor is the legal right to exclusive possession rather than the fact of exclusive possession, but noting that in some cases the fact of exclusive possession may be indicative of a legal right to exclusive possession: see BC9702078 at 17–18. Although, as indicated above, the label the parties have given the particular instrument may be relevant to the construction process, it is well settled that courts will not regard themselves as otherwise bound by a label: see KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174 (CA), particularly at 176 (Tadgell JA), referring to Wik Peoples v Queensland (1996) 187 CLR 1 at 152 and the cases there cited; and see [1.3]. And, in this respect, see Hydra Pty Ltd v Holmes & Holmes [2002] SASC 14 (FC) where it was held that an instrument in the form of a lease, which was found not to grant exclusive possession, did not confer more than rights in the nature of a licence, perhaps coupled with an interest, to lay and keep pipes in the ‘leased’ area; and which could not take effect as an easement in the absence of a dominant tenement: see Besanko J at [79] and [80], with whom Doyle CJ and Martin J agreed.

See also Australian Posters Pty Ltd v Wyuna Holdings Pty Ltd (1993) 15 Qld Lawyer Reps 22 (Dist Crt, Qld). As to rights with respect to common areas of shopping centres, see Arndale (Kilkenny) Pty Ltd v Gaetjens (1970) 44 ALJR 434 and Ergopax Pty Ltd v Meerkin and Appel (SC(Vic), Hedigan J, 12 December 1995, unreported) at 77–9; and in Hunts Refuse Disposals Ltd v Norfolk Environmental Waste Services Ltd [1997] 1 EGLR 16 (CA) a 21-year exclusive licence for the depositing of waste was held to be a licence rather than a lease because the grant’s only exclusive quality was that the grantor could not grant a competing right for the same site. Finally it should be noted, as indicated by Young J (above), by Lord Templeman in Street v Mountford ([1985] AC 809 at 826–7 (set out above)) and by the High Court in Radaich v Smith, that surrounding circumstances may be relevant in considering whether a particular document creates a lease or a licence. However, it would appear that this is merely a particular application of the general rules for the admission of extrinsic evidence (see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337) rather than any exception to those rules; a position confirmed in Swan v Uecker (2016) 50 VR 74 (Croft J). Also, regard should be had to the general principle that courts should attempt to uphold agreements where possible: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; Deneys v Delafotis (1992) V ConvR ¶54-433 and Rialta Pty Ltd v Handbags International Pty Ltd (1993) V ConvR ¶58-469. See also [6.3] as to construction of leases, more generally. The cases also indicate that the courts are concerned with substance and [page 19] not mere form: and see Lord Templeman, ‘Form and Substance’, Rationalizing Property, Equity and Trusts — Essays in Honour of Edward Burn, pp 130–4 (Ch 7). The nature of a licence is considered in [3.1]; see also [3.2] and [3.3] for a further discussion of the distinction between a lease and a licence.

Agreement and certainty [1.5] As in the case of other binding agreements, the basic terms of a lease must be agreed upon before the lease is capable of being enforced by any party to it. Thus a lease will not be enforceable unless at least the essential terms of such a lease have been agreed upon: see Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 90 ALJR 770, particularly at 780, [31] (French CJ and Kiefel and Bell JJ), referring to Thorby v Goldberg (1964) 112 CLR 597 at 607; Beattie v Fine [1925] VLR 363, referred to in Placer Development Ltd v Commonwealth (1969) 121 CLR 353 at 360. For example, the duration of the term, its date of commencement, the parties to it, and the subject matter of the demise must be agreed upon and must be capable of being ascertained with certainty. (In the case of a demise by deed, consideration consists of the seal.) If the grant of the term is effected by means other than a deed, then consideration must be provided by the lessee; this is usually done in the form of a reservation of rent (see [1.3], [4.8] and Chapter 11). Subject to agreement between the parties and usual conveyancing practice, creation of a written lease requires an exchange of documents executed by the lessor and the lessee: see Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 97,488; Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486 at 13,576 (per Young J); and see Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 436 (per Deane J) for a summary of the usual New South Wales conveyancing practice in this respect. In Gobblers Inc it was held that execution of the lease by the lessor after the lessee had abandoned the leased premises was too late to create the intended lease, so no lease came into existence: see at 6 BPR 13,594 (per Cohen J). Where a lease or agreement for lease is agreed subject to certain preconditions, no lease or enforceable agreement for lease exists until they have been met: Budmore Pty Ltd v Johnson; and, similarly, where ministerial consent or compliance with other statutory formalities is required, see Graham v Moree Local Aboriginal Land Council [2004] NSWSC 1178; BC200408599; and see [4.1]. Generally, as to consents in conveyancing transactions, see Lewison, The Interpretation of Contracts (6th ed, 2015), para 14.10. An exchange may be prevented subject to further instruction or the happening of some future event by the holding of the documents in ‘escrow’ by, for example, a party’s own solicitor: see Budmore at

6 BPR 13,576, referring to Hooker Industrial Developments Pty Ltd v Trustees of the Christian Brothers [1977] 2 NSWLR 109 at 119 and Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 at 620. As to the requirement of writing for the creation of leases, see [1.6] and [4.3] as to agreements for lease. [page 20] The date of the commencement of the term must be specified or be capable of being ascertained. Where no date is fixed for the commencement of the tenancy, it is usually taken to commence at the date of the document or act constituting the demise: see Woodfall’s Law of Landlord and Tenant, looseleaf, para 5.067, referring to Meskin v Hickford (1624) J Bridg 16; 123 ER 1167, and noting that this position may be negatived by internal evidence. If a deed of lease is delivered in escrow the date to be inserted is the date of delivery and rent expressed to run ‘from the date hereof’ will run accordingly: Alan Estates Ltd v W G Stores Ltd [1982] Ch 511. A lease may specify a commencement date prior to the date of its execution: Bradshaw v Pawley [1980] 1 WLR 10. The extent to which the obligations of the parties are effected from the earlier date until the date of execution depends on the terms of the lease; in some cases the earlier date may only be a reference point for fixing the expiry date; in others, obligations may be imposed. Megarry V-C said, in that case ([1980] 1 WLR at 15): I cannot see what there is to stultify an agreement in a lease to make payments in respect of past periods, or to require the court to construe a lease so as to prevent any agreement from relating to past periods unless compelled to it. It is by no means unknown for a lease not to be executed until after the prospective lessee has entered (usually with safeguards for the lessor), and for the lessee then to pay rent and observe the terms of the lease as from a date prior to the execution of the lease. If as a matter of construction the obligation is to pay rent at a specified rate from some date earlier than that of the execution of the lease, why should that not be enforceable? I think that some support for this view is provided by a dictum of Pollock CB in Shaw v Kay.

The report in the Exchequer Reports [(1847) 1 Exch 412] that was cited to me omits this, but it is to be found in the report of the case in the Law Journal Reports, Exchequer [17 LJ Ex 17 at 18]. Pollock CB said: A party may covenant to indemnify another from what has passed. I may demise premises to-day, and covenant to save my tenant harmless from what has happened six months before. On the same footing I do not see why, by suitable wording, a lease should not impose on one of the parties some liability for things past. Stamp duty considerations may limit the usefulness of this flexibility. It is sufficient if the commencement becomes certain by the time when the lease is to take effect in possession, and accordingly the term may be made to commence upon the happening of an uncertain event: Bishop of Bath’s case (1605) 6 Co Rep 34b; 77 ER 303; Clowes v Hughes (1870) LR 5 Exch 160; Terry v Tindale (1882) 3 LR NSW 444; Brilliant v Michaels [1945] 1 All ER 121 at 127–8; see also [2.2]. The period of the lease term must be fixed with certainty (and see [2.2]). As confirmed by the House of Lords in Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 this follows from the nature of a demise for years. Lord Templeman, with whom the other members of the House of Lords agreed, considered the ‘ancient authority’ in this respect (at 390, referred to at [1.2]) and the Law of Property Act 1925. Having done so his Lordship continued, at 391: [page 21] Ancient authority, recognised by the 1925 Act, was applied in Lace v Chandler [1944] 1 All ER 305; [1944] KB 368. A dwelling house was let at the rent of 16s 5d per week. Lord Greene MR (no less) said ([1944] 1 All ER 305 at 306; [1944] KB 368 at 370–1): Apart from one circumstance, there could be no question that this was an ordinary weekly tenancy, duly determinable at a

week’s notice. But the parties in the rent-book agreed to a term which appears there expressed by the words ‘furnished for duration’ — which must mean the duration of the war. The question immediately arises whether a tenancy for the duration of the war creates a good leasehold interest. In my opinion, it does not. A term created by a leasehold tenancy agreement must be a term which is either expressed with certainty and specifically, or is expressed by reference to something which can, at the time when the lease takes effect, be looked to as a certain ascertainment of what the term is meant to be. In the present case, when this tenancy agreement took effect, the term was completely uncertain. It was impossible to say how long the tenancy would endure. Counsel for the tenant in his argument has maintained that such a lease would be a good lease; and that, even if the term is uncertain at the beginning of the term, when the lease takes effect, the fact that at some future time it will be made certain is sufficient to make it a good lease. In my opinion, that argument is not to be sustained. I do not propose to go into the authorities on the matter; but in Foa on Landlord and Tenant, 6th ed, 1924, p 115, the law is stated in this way and, in my opinion, correctly stated: ‘The habendum in a lease must point out the period during which the enjoyment of the premises is to be had; so that the duration, as well as the commencement of the term, must be stated. The certainty of a lease as to its continuance must be ascertainable either by the express limitation of the parties at the time the lease is made, or by reference to some collateral act which may, with equal certainty, measure the continuance of it, otherwise it is void …’ Lord Templeman reviewed a number of other authorities and concluded (at 394–5): My Lords, I consider that the principle in Lace v Chandler [1944] 1 All ER 305; [1944] KB 368 reaffirming 500 years of judicial acceptance of the requirement that a term must be certain applies to all leases and tenancy agreements. A tenancy from year to year is saved from being

uncertain because each party has power by notice to determine at the end of any year. The term continues until determined as if both parties made a new agreement at the end of each year for a new term for the ensuing year. A power for nobody to determine or for one party only to be able to determine is inconsistent with the concept of a term from year to year: see Doe d Warner v Browne (1807) 8 East 165; 103 ER 305 and Cheshire Lines Committee v Lewis & Co (1880) 50 LJQB 121. In Charles Clay & Sons Ltd v British Railways Board [1971] 1 All ER 1007; [1971] Ch 725 there was no ‘clearly expressed bargain’ that the term should continue until the crack of doom if the demised land was not required for the landlord’s undertaking or if the undertaking ceased to exist. In the present case there was no ‘clearly expressed bargain’ that the tenant shall be entitled to enjoy his ‘temporary structures’ in perpetuity if Walworth Road is never widened. In any event principle and precedent dictate that it is beyond the power of the landlord and the tenant to create a term which is uncertain. A lease can be made for five years subject to the tenant’s right to determine if the war ends before the expiry of five years. A lease can be made from year to year subject to a fetter on the right of the landlord to determine the lease before the expiry of five [page 22] years unless the war ends. Both leases are valid because they create a determinable certain term of five years. A lease might purport to be made for the duration of the war subject to the tenant’s right to determine before the end of the war. A lease might be made from year to year subject to a fetter on the right of the landlord to determine the lease before the war ends. Both leases would be invalid because each purported to create an uncertain term. A term must either be certain or uncertain. It cannot be partly certain because the tenant can determine it at any time and partly uncertain because the landlord cannot determine it for an uncertain period. If the landlord does not

grant and the tenant does not take a certain term the grant does not create a lease. The decision of the Court of Appeal in Charles Clay & Sons Ltd v British Railways Board [1971] 1 All ER 1007; [1971] Ch 725 was taken a little further in Ashburn Anstalt v Arnold [1989] Ch 1. That case, if it was correct, would make it unnecessary for a lease to be of a certain duration. In an agreement for the sale of land the vendor reserved the right to remain at the property after completion as licensee and to trade therefrom without payment of rent: … save that it can be required by Matlodge Ltd [the purchaser] to give possession on not less than one quarter’s notice in writing upon Matlodge certifying that it is ready at the expiration of such notice forthwith to proceed with the development of the property and the neighbouring property involving inter alia the demolition of the property. The Court of Appeal held that this reservation created a tenancy. The tenancy was not from year to year but for a term which would continue until Matlodge Ltd certified that it was ready to proceed with the development of the property. The Court of Appeal held that the term was not uncertain because the vendor could either give a quarter’s notice or vacate the property without giving notice. But of course the same could be said of the situation in Lace v Chandler [1944] 1 All ER 305; [1944] KB 368. The cumulative result of the two Court of Appeal authorities, Charles Clay & Sons Ltd v British Railways Board [1971] 1 All ER 1007; [1971] Ch 725 and the Ashburn case, would therefore destroy the need for any term to be certain. In the present case the Court of Appeal was bound by the decisions in Charles Clay & Sons Ltd v British Railways Board and the Ashburn case. In my opinion both those cases were wrongly decided. A grant for an uncertain term does not create a lease. A grant for an uncertain term which takes the form of a yearly tenancy which cannot be determined by the landlord does not create a lease. See also Street v Mountford [1985] AC 809 (HL) at 818–19. The Prudential Assurance case and the authorities reviewed (including those

said to be wrongly decided) are considered in Sparkes, ‘Certainty of Leasehold Terms’ (1993) 109 LQR 93; and see All ER Rev pp 171–8 and 185–91. There are a number of particular examples of the application of this principle. A tenancy to continue during the time the tenant, a school-master, was stationed in a particular town: Morison v Edmiston [1907] VLR 191, and a lease to endure for the duration of the war: Anthony v Stanton [1943] VLR 179; Lace v Chandler [1944] 1 All ER 305; [1944] KB 368, have been held to be bad for uncertainty, and these are but [page 23] illustrations of the general rule that the term must be definite: Binions v Evans [1972] Ch 359 at 366; see also Cheshire Lines Committee v Lewis & Co (1880) 50 LJQB 121. By a lease dated 1 August 1945 the plaintiff leased premises to the defendant for a term of three years ‘computed from’ 1 July 1945, at an annual rent payable by quarterly instalments, the first payment to be made on 1 July 1945, and payments thereafter to be made on the first days of October, January, April and July in each year. It was held that the date of expiry of the lease was 30 June 1948: Box v Lock (1948) 65 WN (NSW) 291. The expression ‘for the term of 12 months from’ was considered in Forster v Jododex Pty Ltd (1972) 127 CLR 421; [1972–73] ALR 1303; see also [2.2]. See also EWP Ltd v Moore [1992] QB 460 at 468–9. It appears that there is no difficulty, in the absence of statutory provisions affecting the position, in granting a lease for life: see Borambil Pty Ltd v O’Carroll [1972] 2 NSWLR 302 (CA) (especially at 306–7, per Jacobs JA) and [1974] 1 NSWLR 1 (on appeal to the Privy Council). The Privy Council affirmed the Court of Appeal decision that a lease for life of land under the Real Property Act 1900 (NSW) was a lease within the Landlord and Tenant Amendment Act 1948. In Greco v Swinburne Ltd [1991] 1 VR 304 Gobbo J, saying that he was reinforced in his view by the discussions in these decisions, upheld an agreement for lease for the lifetime of the survivor of joint tenants. The grant of a lease for life or lives became impossible in England on the enactment of s 149(6) of the Law of Property Act 1925 which provides that any such grant has effect merely as a contract for a lease for 90 years

terminable by notice. These decisions appear to be consistent with Prudential Assurance Co Ltd v London Residuary Body (see, particularly, [1992] 2 AC 386 at 392–3). Any divergence from English law apparently flows from differences between the Law of Property Act and equivalent legislation rather than the common law. As to the position with respect to periodic tenancies, see [2.8] and [2.13]. In this respect see also EWP Ltd v Moore [1992] QB 460 at 468–70. The premises, the subject of the demise, and its boundaries must also be described with certainty. This requirement is satisfied if the description is one which enables the boundaries of the property to be ascertained or defined. In Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199; 3 ATR 546, Mason J held that part of the sea bed can be the subject matter of a demise if the boundary is described by reference to the surface as it exists from time to time, and the mere fact that the boundary may move is not fatal to the validity of the lease. See also Streatfeld v Winchcombe Carson Trustee Co (Canberra) Ltd [1981] 1 NSWLR 519 at 529; National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97,322 at 9734 (per Young J) and Brooks-Thornley v McMurtrie (1904) 21 WN (NSW) 127 at 128–9 (which is referred to by Young J in National Outdoor Advertising). On the question of certainty, see further [4.2], [6.3] and [14.3] and Chapter 6. [page 24]

Requirement as to writing [1.6] Any requirement that a lease be in writing is the result of statutory intervention rather than the application of any common law rule. The common law position is that a lease for any period of time may be created by oral agreement: see Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 at 59 and Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62 at [30]–[34] (per Kaye J). Statutory intervention took place at various times but the provisions now generally applicable are to be found in derivatives of the relevant provisions of the Statute of Frauds 1677 (see [4.3]) and ss 52, 53 and 54 of the English Law of Property Act 1925 which are

repeated, with some minor variations, in the legislation of all states: and see, for some legislative history, Adamson v Hayes (1973) 130 CLR 276 (discussed at (1974) 48 ALJ 322 (RPA)) and Alcova Holdings Pty Ltd v Pandarlo Pty Ltd at 15 NSWLR 59, 60). Generally as to the operation of these provisions, see Farrand (ed), Wolstenholme and Cherry’s Conveyancing Statutes, pp 128–32; Stuckey, Conveyancing Act 1919–1969 [NSW], pp 42–50; and Robinson, Property Law Act (Victoria), pp 100–14. It is convenient to refer to Victorian ss 52, 53 and 54 which follow closely the structure and content of the English provisions upon which the corresponding legislation of other states is based. The provisions of s 52 of the Victorian Property Law Act render leases of land, except those that are not required by law to be in writing, void for the purpose of creating a legal estate unless made by deed: see Conveyancing Act 1919 (NSW) s 23B; Property Law Act 1974 (Qld) s 10; Law of Property Act 1936 (SA) s 28; Conveyancing and Law of Property Act 1884 (Tas) s 60(1); Property Law Act 1969 (WA) s 33. Except for Tasmania, all states have dispensed with the requirement for a seal, if the document bears the words ‘signed, sealed and delivered’: NSW s 38(3); Qld ss 45(2), 47; SA s 41(5); Vic s 73A; WA s 9(2), (4). Section 53 of the Victorian Act requires writing, in general terms, for the creation or disposition of any interest in land, a declaration of trust or the disposition of an equitable interest or trust: see NSW s 23C; Qld s 11; SA s 29; Tas s 60(2); WA s 34. These provisions are expressly subject to the provisions with respect to the creation of interests in land by parol; a reference to s 54 of the Victorian Act: see NSW s 23D; Qld s 12; SA s 30; WA s 35; Tas s 60(3), (4). Of particular relevance to leases is s 53(1) (Vic) which, subject to this general exception, provides that no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, by an agent lawfully authorised in writing so to do, by will or by operation of law. Section 54 of the Victorian Act (which reproduces s 2 of the Statute of Frauds) provides that all interests in land created by parol and not put in writing and signed by the persons creating the same, or by their agents lawfully authorised in writing, shall have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only. Subsection (2), however, provides that: [page 25]

… nothing in the foregoing provisions of this Division shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years (whether or not the lessee is given power to extend the term) at the best rent which can be reasonably obtained without taking a fine. [See NSW s 23D; Qld s 12; SA s 30; Tas s 60(3), (4); WA s 35.] If a lease is to fall within the ambit of s 54(2) it must also take effect in possession at the time the lease is actually made: see Long v Tower Hamlets London Borough Council [1998] Ch 197; and Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62 at [35]–[38] (per Kaye J). Thus the grant of a weekly tenancy under which possession is to be given at a future date is not a lease ‘taking effect in possession’ within s 54(2): Haselhurst v Elliot [1945] VLR 153. The lease falls within s 54(2) if it is for a term of three years from the making thereof, and not from a future day: Rawlins v Turner (1699) 1 Ld Raym 736; 91 ER 1392, or if it is for a term commencing on a future day and expiring on a day not more distant than three years from the making of the lease: Ryley v Hicks (1725) 1 Str 651; 93 ER 760; Kewley v Ball [1913] VLR 412. A lease is for a term not exceeding three years if at the time of the agreement it may last for less than three years, although it may also last for more: Ex parte Voisey; Re Knight (1882) 21 Ch D 442. Therefore, yearly: Hammond v Farrow [1904] 2 KB 332 at 335; Dennis & Copley v Eddie [1952] VLR 92 at 99, weekly: Haselhurst v Elliot [1945] VLR 153 and other periodic tenancies may be created verbally; compare the view expressed in Harrison, Cases on Land Law, pp 165–6. In Greco v Swinburne Ltd [1991] 1 VR 304 Gobbo J said, at 310, with reference to s 54(2): As to the three year provision, I am of the view that the claimants’ submission is a valid one. In my opinion, a lease exceeds three years if it must last longer than three years. If it provides for a period that may be less than three years then it is valid without any formalities, even though it is capable of lasting longer. Here the parol agreement for a lease for the lives of the lessors might have lasted less than three years. It was also to take effect in possession. See also Australian Posters Pty Ltd v Wyuna Holdings (1993) 15 Qld Lawyer Reps 21 (Dist Crt, Qld).

In Hand v Hall (1877) 2 Ex D 355 it was held, dealing with corresponding English provisions, that a lease for less than three years containing an option for a further three-and-a-half years was a lease for a term not exceeding three years; see also Roberts v Birkley (1888) 14 VLR 819 at 823–4; Gerraty v McGavin (1914) 18 CLR 152 at 163–4, to the same effect; see too 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193. As Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231 indicates, the question is to be determined in some cases by the proper construction of the relevant statutory provisions (in that case Local Government Act 1919 (NSW) s 327AA(2)). As to construction, regard should be had to the words ‘(whether or not the lessee is given power to extend the term)’ which appear immediately after the words ‘for a term not exceeding three years’ in s 54(2) of the Victorian Property Law Act. The meaning of [page 26] these words in brackets does not appear to have been considered directly in the cases dealing with the issue whether or not a particular lease has taken effect in possession for a term not exceeding three years. The words in brackets are not referred to in the annotations to the Act in Robinson, The Property Law Act (Victoria), or in Wolstenholme and Cherry’s annotation of the English Law of Property Act 1925. Some reference is made to these words in the equivalent provisions of s 23D(2) of the Conveyancing Act 1919 (NSW) in Stuckey, Conveyancing Act 1919–1969, p 49. Stuckey comments with respect to the term to which the New South Wales equivalent (s 23D) applies as follows, at 49: Subsection (1), and ss 23B(1) and 23C(1)(a), apply where the term of the tenancy, together with any period by which it may be extended by the lessee, extended three years from its commencement. There is a footnote reference to this statement, namely: ‘cf Ex parte Voisey (1882) 21 Ch D 442 at 458’. It is not entirely clear whether the reference intended is to a discussion of the Statute of Frauds. In any event, the reference

to Ex parte Voisey; Re Knight at 458 appears to be to the discussion of the position with respect to a periodic tenancy. As to this, Brett LJ said: But if, at the time of the arrangement, the tenancy may last for less than three years, although it may last for more, it is not within that section of the statute at all. And it is obvious that the tenancy in this case, although it may last for more than three years, may last for less. A similar position is reached in other cases with respect to periodic tenancies of varying periods, see, for example, Haselhurst v Elliot [1945] VLR 153 as to a weekly tenancy and Dennis v Copley and Eddie [1952] VLR 92 at 99 with respect to a yearly tenancy (and see the cases referred to below). Nevertheless there appears to be some support for Stuckey’s view in Redfern and Cassidy, Australian Tenancy Practice and Precedents, [205], pp 1596–7, especially p 1596, n 19, referring to Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53. Although the wording of the New South Wales provision (s 23D(2)) is slightly different in this respect from the words of s 54(2) of the Victorian Act it seems that these words are equally explicable as having been inserted out of an abundance of caution to indicate that the period of any term available under an option to renew is to be disregarded. This is consistent with authorities to which reference has been made and, particularly, the position that until an option to renew is exercised no new or additional interest passes to the tenant: Gerraty v McGavin at 163; and see 195 Crown Street Pty Ltd v Hoare; and [14.5]. The question arises whether a lease for a period exceeding three years which gives the lessor an option to determine the lease at the end of any year is a lease for a term exceeding three years. In Kushner v Law Society [1952] 1 KB 264 it was held, distinguishing Ex parte Voisey; Re Knight (1882) 21 Ch D 442, that a lease for a term of 14 years containing a clause whereby the lessee could determine the lease at the end [page 27] of any year was a lease for a term exceeding three years within the meaning of the English provision corresponding to s 54(2) (that is,, Law of Property Act

1925 s 54(2)). Similarly, in Quinlan v Avis (1933) 149 LT 214, it was held that a lease was a lease for a term of not less than two years within the meaning of a provision similar to that to be found in the Landlord and Tenant Act 1958 (Vic) s 48 (a provision repealed as from 1 September 2012 — see LL&T Comparative Table), notwithstanding that the lessee had an option to determine it. In Kushner v Law Society Lord Goddard CJ said, at 273: It seems to me that we must apply to this document the same principle which has always been applied to the construction of s 4 of the Statute of Frauds, which provides that contracts not to be performed within a year must be in writing. The principle of law, which is now well established and was reaffirmed by the House of Lords in 1912 in Hanau v Ehrlich [1912] AC 39, is that, if a contract is for an indefinite term but can be determined by either party at reasonable notice within the year, the statute does not apply, but, if the contract is for a definite period extending beyond the year, though it may be concluded by notice within a year, the statute does apply. The agreement now before us purports to create a lease for 14 years with a provision that it may be determined earlier. Notwithstanding that provision, the lease is for a definite period. This passage suggests that it makes no difference whether the option to determine is given to the lessor or the lessee; in neither case will the presence of the option prevent the lease from being one which exceeds three years. In Quinlan v Avis (1933) 149 LT 214 at 215, Talbot J said: The object of Parliament was that at the time when the premises were decontrolled the tenant should have security for at least two years. That security is not in any way lessened by giving him an option to determine within a shorter period. The security is, of course, taken away if the landlord has an option to determine the lease. As can be seen, an oral lease taking effect in possession for a term of say, two-and-a-half years at the best rent which can be reasonably obtained without taking a fine, is good. But an oral agreement to create a weekly tenancy in the future is caught by the Statute of Frauds provisions (see [4.3]), so that unless there has been part performance, such an agreement is

unenforceable. Agreements for a lease are discussed in Chapter 4. On the question of part performance, see [4.5]. Where the manager of a company acting with due authority signs a lease in his or her capacity as manager, such writing satisfies s 54(1). In those circumstances, no written authority to the agent is necessary under that section because the manager was not executing the lease as an agent. Rather, the lease was executed by the company, its execution being authenticated by the manager’s signature: Richardson v Landecker (1950) 50 SR (NSW) 250. An oral agreement not to terminate a yearly tenancy before a date more than 12 months hence is not enforceable as it is an agreement not to be performed within a year under the Statute of Frauds: see Take Harvest Ltd v Liu [1993] AC 552 at 565–6. [page 28] Section 54(2) applies only if the rent is ‘the best rent which can be reasonably obtained without taking a fine’. The corresponding provisions in the other states are similarly phrased: see Conveyancing Act 1919 (NSW) s 23D(2); Law of Property Act 1936 (SA) s 30(2); Conveyancing and Law of Property Act 1884 (Tas) s 60(4); compare Property Law Act 1974 (Qld) s 12(2); Property Law Act 1969 (WA) s 35(2) which contain no proviso in relation to the rent. For a comprehensive review of the authorities on the nature of fines and premiums, see Burke v Gillett (1994) V ConvR ¶54-507 at 65, 816–21 (per Ormiston J); and see Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110. A lease which does not fall within s 54(2), and is not made by deed, is void at law: see Long v Tower Hamlets London Borough Council [1998] Ch 197; and Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62 at [35]–[38] (per Kaye J). But if the lessee takes possession under a void lease, then at common law a tenancy at will arises (see [2.15], [2.17]); and, on payment of rent, a yearly or other periodic tenancy is created, on the terms of the void lease so far as they can be applied: Martin v Smith (1874) LR 9 Ex 50; [1874] 80 All ER Rep Ext 1903; Moore v Dimond (1929) 43 CLR 105; see further [2.9]–[2.15]. Moreover, in equity, under the doctrine of Walsh v Lonsdale (1882) 21 Ch D 9; [1881] 51 All ER Rep Ext 1690, the lessee under the void

lease is in the same position as regards the lessor as if a valid lease has been granted, provided that there is either a sufficient memorandum or some act of part performance; see further [4.5]–[4.8]. A lease under seal can be varied by an agreement not under seal: Plymouth Corporation v Harvey [1971] 1 WLR 549 at 554. In the New South Wales Conveyancing Act 1919, s 127(1) provides to the effect that ‘no tenancy from year to year shall be implied by payment of rent and … if there is a tenancy and no agreement as to its duration then it shall be deemed to be a tenancy determinable by either party by one month’s notice in writing expiring at any time’: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 26; and Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 97,488. Property Law Act 1974 (Qld) s 129(1) and the Property Law Act 1969 (WA) s 71 is the only equivalent legislation. See Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 248–50 and Australian Posters Pty Ltd v Wyuna Holdings Pty Ltd (1993) 15 Qld Lawyer Reps 22 (Qld, Dist Crt) with respect to the Queensland legislation. The effect of the corresponding New South Wales provisions to ss 52, 53 and 54 of the Victorian Property Law Act (and those of the other states, and England, see above) was considered and summarised by Jordan CJ in Dockrill v Cavanagh (1944) 45 SR (NSW) 78; and see Enkelmann v Glissan (1982) NSW ConvR ¶55-084; Alcova Holdings Pty Ltd v Pandarlo Pty Ltd and Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 (CA). In Leask v Farlmist Pty Ltd [1999] ANZ ConvR 566 at 568; BC9806783 at 11 Sheller JA, with whom the other members of the New South Wales Court of Appeal (Beazley JA and Fitzgerald AJA) agreed, said that, where the appellant had gone into occupation as [page 29] a tenant at will at a particular rent per month and s 127 of the Conveyancing Act 1919 (NSW) applied, the tenancy at will was terminable by a month’s notice expiring at any time, referring to Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 84; and similarly Wykes v Samilk Pty Ltd (1998) NSW ConvR

¶55-871 (CA) at 56,827–8 (per Sheller JA, with whom Beazley and Stein JJA agreed); and see [2.19]. As to the corresponding Western Australian provisions, see Adamson v Hayes (1973) 130 CLR 276 at 298 (per Walsh J) and 306 (per Gibbs J); Redden v Wilks and the Registrar of Titles [1979] WAR 161; Ratto v Trifid Pty Ltd [1987] WAR 237 (FC); Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 (FC); and Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (WA, Dist Crt) at 326–8. In Abjornson v Urban Newspapers Pty Ltd, Kennedy J considered the operation of these provisions (at [1989] WAR 199): Relevantly for the present purposes, the rules may be stated in summary form as follows, the references to sections being to sections of the Property Law Act: (1) A lease of land taking effect in possession for a term not exceeding three years may be made verbally, in writing or by deed (ss 35(2), 33(2)(d)). It has been held that the grant of a lease to commence at a future date does not fall within s 35(2) as a lease taking effect in possession: Haselhurst v Elliot [1945] VLR 153. Furthermore, the period of three years runs from the date of the making of the lease: Rawlins v Turner (1699) 1 Ld Raym 736; 91 ER 1392. (2) Subject to (1), a lease of land is required by s 33(1) to be by deed if it is to create a legal estate. (3) If a lease which does not fall within the terms of s 35(2) is not made by deed, it has, at law, the force and effect of an interest at will only. If, however, the lessee takes possession under a void lease, then, at common law, on payment of rent a tenancy from year to year is created and the lessee holds the land upon the terms and conditions of the lease, save in so far as they are inconsistent with a tenancy from year to year. Similarly, at common law, when a lessee takes possession and pays rent under an agreement to grant a lease in future, whether or not it is in writing, a tenancy from year to year is created: Chapman v Towner (1840) 6 M&W 100; 151 ER 338; Moore v Dimond (1929) 43 CLR 105, and in particular at 113–17. (But see now s 71).

(4) In equity, a lessee who takes possession under an agreement for a lease of which specific performance would be granted, provided that it is sufficiently evidenced in writing or there has been part performance, holds under the same terms as if the lease had actually been granted: Walsh v Lonsdale (1882) 21 Ch D 9; Manchester Brewery Co v Coombs [1901] 2 Ch D 608. (5) A lease falling outside the terms of s 35(2) and which is not made by deed is construed as an agreement for a lease and may be enforced as such: Parker v Taswell (1858) 2 De G & J 559; 44 ER 1106; Martin v Smith (1874) LR 9 Exch 50. For a most comprehensive review of the corresponding English legislation and authorities, see Long v Tower Hamlets London Borough Council [1998] Ch 197. [page 30] Consequently, the position may be summarised as follows: (1) A lease for a term not exceeding three years and which otherwise complies with s 54(2) of the Victorian Act and its equivalents may be made orally, in writing or by deed. (2) All other leases should be made by deed. If they are not so made, the lessee will be: (a) at law, at best a yearly (or other appropriate periodic) tenant upon the terms of the lease, so far as applicable; (b) in equity, a tenant for the appropriate term of years, provided that there is either a sufficient memorandum or a sufficient act of part performance; see further [4.3]–[4.8]. This should be compared to an agreement for a lease which must be in writing even if the contemplated demise is to be only for a month. This is so because of the operation of s 126 of the Instruments Act 1958 (Vic), which only applies to agreements for lease; unlike the provisions of ss 52–54 of the Victorian Property Law Act 1958 (and their equivalents) which have been

held to apply to leases and dispositions of property: see Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62, particularly at [33] (per Kaye J); and see [4.3]: NSW s 54A; Qld s 59; SA s 26; Tas s 36; WA: Statute of Frauds 1677 s 4 as amended by the Law Reform (Statute of Frauds) Act 1962. As to NSW s 54A and equitable estoppel, see Waltons Stores (Interstate) Ltd v Maher (1988) 62 ALJR 110 at 129, 135. In relation to the statutory requirements with respect to the sufficiency of the note or memorandum and what constitutes signature, see [4.4]. In Crago v Julian [1992] 1 WLR 372 (CA) (and see All ER Rev 1992 pp 233–4) it was held that on a true construction of ss 52 and 53 of the Law of Property Act 1925 (Eng) (which correspond with the same sections of the Victorian Act) an assignment of a leasehold interest was effective to pass the legal estate only if it was in writing and in the form of a deed: and see [15.17]. The relationship between the Statute of Frauds provisions and s 34(1)(a) of the Western Australian Property Law Act (see s 53(1)(a) of the Victorian Act) was considered in Ratto v Trifid Pty Ltd [1987] WAR 237 (FC) at 258 (per Brinsden J): ‘Section 34 of course is not a Statute of Frauds provision. Its very terms deny the creation of an interest in land unless the provisions of the section are complied with whereas the Statute of Frauds does not deny the legality of the contract but simply makes it unenforceable unless the Act is complied with … It has been held by Burt CJ in Redden v Wilks [1979] WAR 161 that s 34 does affect equitable as well as legal interests in land relying on the dictum of Gibbs J (as he then was) (at 304) and Stephen J (at 319–20) in Adamson v Hayes (1973) 130 CLR 276. I propose to follow Redden v Wilks.’ See also Mr Commissioner Murray (as he then was) in Blazey v Polletti (unreported, Supreme Court, WA, Commissioner Murray, 23 May 1989). [page 31] See also Bayside Development Pty Ltd v Copperart Pty Ltd at (1994) 11 SR (WA) 326–8. In Bayside Developments the differing requirements of s 34(1)(a)

of the Western Australian Property Law Act (see s 53(1)(a) of the Victorian Act) and the relevant Statute of Frauds provisions in that state as to the requirement that the authority of any agent to sign be properly authorised in writing was considered: see at (1994) 11 SR (WA) 329. Only the Victorian Statute of Frauds provisions contain provisions similar to those contained in s 53(1)(a) of the Property Law Act requiring the agent to be properly authorised in writing: see [4.3]. In any event an agent’s authority must be clear: see Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 at 568–9. In the present context regard should be had to the provisions of Torrens title legislation of the various states, though this is not a text on land title generally, Torrens title or otherwise. As to the latter reference should be made to Woodman and Nettle, Baalman’s Torrens Title in New South Wales, and Robinson, Transfer of Land in Victoria. It follows, logically, that as the Torrens system is a registration system for written instruments then if a lease is to be registered it must be in writing and comply with the registration requirements. Robinson suggests that it follows, strictly, from s 40(1) of the Victorian Transfer of Land Act 1958 that an estate or interest in Torrens title land cannot arise other than on registration (see Robinson, Property Law Act (Victoria), pp 103–4; referring to Robinson, Transfer of Land in Victoria, Chapter 3). The practice as to the registration of leases of Torrens title land varies. All states provide for registration but in Victoria, for example, the practice is not to register leases and to rely upon the paramount interests exception to indefeasibility provisions of s 42(2)(e) of the Transfer of Land Act 1958 in favour of the interest of a tenant in possession of the land (but excluding any option to purchase): see, for example, Alcova Holdings Pty Ltd v Pandarlo Pty Ltd as to the equivalent provision of the Real Property Act 1900 (NSW) s 42(1)(d). It the tenant is not in possession or an option to purchase is to be protected then registration of the lease or a caveat or caveats (for both the leasehold interest and the interest under the option) may be required. Most tenants are in possession, either directly or by the possession of those deriving title from them. In many cases (but depending on the proper construction of the lease covenants) a tenant would be in breach of the terms of the lease not to be in actual possession — and carrying on the business. In states where registration of leases is the norm the express or implied agreement between the parties, in the lease or associated transactions (such as guarantees), may

require registration of the lease, hence a written lease which complies with the requirements of relevant Torrens title legislation: see, generally, Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 (especially at 27 (per Mason J)); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; Chan v Cresdon Pty Ltd (1989) 168 CLR 242; Charmer Electrical Pty Ltd v Minda Inc (1990) 55 SASR 112 at 117–18; Australian Posters Pty Ltd v Wyuna Holdings Pty Ltd (1993) 15 Qld Lawyer Reps 22; Ashton v Hunt [1999] 1 Qd R 571 (CA); and see Redfern [page 32] and Cassidy, above, [2 10]–[2 35]; see also [14.5]. The Victorian authorities appear to indicate that where registration of a lease is not required (by statute or agreement in the lease or flowing from that contained in an associated transaction) unregistered leases (oral or written) are to be treated according to general law rules and as subject to the provisions of ss 52, 53 and 54 of the Property Law Act: but see Christensen, ‘Are Long-Term Leases Not in Registrable Form Void at Law and in Equity?’ (1994) 14 Qld Lawyer 227; referred to in Bayside Developments Pty Ltd v Copperart Pty Ltd at (1994) 11 SR (WA) 333–4. Registration of a lease under Torrens title legislation may have significant consequences in terms of saving the operation of an otherwise void instrument: see, for example, Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235; [2001] ANZ ConvR 513; [2001] ANZ ConvR 577 (CA) (per Giles JA (with whom Handley and Stein JJA agreed) at [101], referring to Telado Pty Ltd v Vincent (1996) NSW ConvR ¶55-786). The question whether a legal assignment of a lease must be by deed is discussed at [15.17].

Term and reversion [1.7] A tenant has an estate or interest in land carved out of the estate of his landlord: Keith v Twentieth Century Club (1904) 52 WR 554; see further [1.2]. The lease creates an interest for a term less than that which the grantor has:

Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1 at 8; [1966] ALR 929. The term must be certain: see Street v Mountford [1985] AC 809 at 818–19 and [1.5], [2.2]. The lease of an estate is in fact the sale of a partial interest in it: Re O’Shea [1957] VR 352 at 356. The interest which the lessor retains is known as the reversion. Ordinarily, an incident of the reversion is the right to receive from the lessee payment for the use of the land; reservation of rent is not, however, essential: see [1.12]. The reversion may be assigned, thereby creating the relationship of landlord and tenant between the assignee and the original lessee. The assignment of the term (which creates the relationship between the assignee and the lessor) is considered in [15.1]–[15.21]. The reversion is not necessarily freehold; where the reversioner is personally the holder of a mere leasehold interest, the lease carved out of that interest is called a sublease; see further [1.8].

Subleases [1.8] The power to grant leases is not confined to the owners of freehold estates: the holder of a leasehold interest may grant a lease. A lease granted by the holder of a leasehold interest is called an underlease or (more commonly) a sublease. In the same [page 33] way, the holder of the leasehold interest created by the sublease may grant a further lease, called a sub-underlease. Indeed, there is no limit to the number of lesser leasehold estates which may be carved out of the freehold estate. Two rules must, however, be borne in mind. In the first place, a tenancy at will is not an interest which permits of the creation of a sublease: Fink v McIntosh [1946] VLR 290 at 292–3. In the second place, if it is desired to create a sublease as opposed to effect the assignment of the term, some reversion, be it only a day, must be preserved; otherwise the purported sublease will amount to an assignment: White v Kenny [1920] VLR 290. For an example of the

retention of a reversion of one day upon the grant of a sublease by the holder of a 55 year building lease, see Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported). A purported assignment of less than the whole term is a sublease: 409 Lonsdale St Pty Ltd v Carra [1974] VR 887 at 893. For the purpose of the rule that a purported sublease will take effect as an assignment, if it in fact transfers the whole of the interest of the supposed sublessor, a tenancy from year to year is regarded as a tenancy which continues until it is in fact determined; accordingly a tenant from year to year may grant a sublease from year to year or even for a term of years: Oxley v James (1844) 13 M & W 209; 153 ER 87; 409 Lonsdale St Pty Ltd v Carra at 893; W Skelton Ltd v Harrison & Pinder [1975] QB 361 at 367. This principle applies to other periodic tenancies, and a weekly tenant may sublet the premises from week to week: Woods v Moses [1953] ALR (CN) 1165. Subleases are further discussed in [15.2]–[15.6].

Concurrent leases [1.9] Where a lease is already in existence the lessor may grant a further lease, concurrent with the existing term. Such a lease is known as a concurrent lease. It is a lease for a term to commence in praesenti, subject to an existing lease: Stewart v Goldman & Co Pty Ltd (1947) 64 WN (NSW) 155. In Waterhouse v Waugh [2003] NSWCA 139 the Court of Appeal considered the effect of a purported immediate delivery of possession with the right to future rent in circumstances where there was already a weekly tenant in possession. As to its effect, Handley JA (with whom Giles JA and Young CJ in Eq agreed) said: [27] As Young CJ in Eq suggested during argument, the law can only give effect to this intention by treating the transaction as a concurrent lease, that is, as a tenancy at will from the brothers to the appellants of the reversion expectant on the tenant’s weekly tenancy. See Horn v Beard [1912] 3 KB 181, 187–8; and Conveyancing Act s 120A(5). The nature of a concurrent lease is described by Woodfall’s ‘Law of Landlord and Tenant’, 28th ed, 1978 at p 246:

A concurrent lease is one granted for a term which is to commence before the expiration or other determination of a previous lease of the same premises to another person. Such a lease is said to take effect in reversion expectant upon the earlier term, which may be either shorter or longer than the concurrent term. [page 34] But it should be observed that the concurrent term takes effect at once from the time limited for its commencement, and operates as an assignment of the reversion during such time as the two terms run concurrently … It entitles the lessee, as assignee of part of the reversion, to the rent reserved in the previous lease, and to the benefit of the covenants therein contained, which are to be respectively paid and performed during the then residue of the term granted by the first lease, and the continuance of the concurrent lease. [28] In the absence of a contrary intention a concurrent lease passes to the concurrent lessee the concurrent lessor’s accrued rights under the existing lease. See Cole v Kelly [1920] 2 KB 106 CA and London & County Ltd v W Sportsman Ltd [1971] Ch 764 CA, 781–2. … So a concurrent lease operates as an assignment pro tanto of the reversion: Land v Clyne (1968) 92 WN (NSW) 134. It may be defined as a lease of the reversion immediately expectant on an existing lease: Wordsley Brewery Co v Halford (1903) 90 LT 89; Carberry v Gardiner (1936) 36 SR (NSW) 559 at 577; Stewart v Goldman & Co Pty Ltd (1947) 64 WN (NSW) 155; Cook v Evans (1948) 49 SR (NSW) 83; Richardson v Landecker (1950) 50 SR (NSW) 250; Eureka Operations Pty Ltd v Viva Energy Australia Ltd [2015] VSC 648 (and [2016] VSCA 95 (Appeal dismissed)). A concurrent lease interposes the concurrent lessee between the existing lessor and lessee, the concurrent lessee becoming the landlord of the existing lessee: Buckby v Speed [1959] Qd R 30; Land v Clyne (1968) 92 WN (NSW) 134. The concurrent lessee is,

accordingly, the proper person to determine the existing lease, for example, by giving notice to quit, where this is an appropriate mode of determining it: Stewart v Goldman & Co Pty Ltd or by re-entry in an appropriate case: London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764, in the headnote to which the second lease is wrongly described as a reversionary lease. It is the concurrent lessee who is entitled to possession on the termination of the existing lease and it is he or she who can maintain ejectment proceedings on the termination of that lease: Traynor v Thompson [1953] VLR 706 at 717. This is so even if the existing term is brought to an end prematurely, as by surrender: Neale v Mackenzie (1836) 150 ER 635 at 641. The concurrent term, while it must begin before the expiration of the earlier term, may end either before or after the earlier term. A concurrent lease is not a future lease, to be enjoyed only when the earlier term comes to an end. A concurrent lease gives forthwith a right to the rents arising from the existing lease and to the benefit of the tenant’s covenants therein contained: Re Moore & Hulm’s Contract [1912] 2 Ch 105; Cole v Kelly [1920] 2 KB 106; [1920] All ER Rep 537; Neale v Mackenzie (1836) 1 M & W 747; Noone v Traynar (1952) 69 WN (NSW) 33 at 35; Traynor v Thompson, above, at 716; Property Law Act 1958 s 149(5). A future, or reversionary, lease is one which is to commence in reversion, that is to say, which is not to take effect until some date in the future. Future leases are the subject of [1.10]. A tenant who has granted a sublease may grant a concurrent sublease: Woods v Moses [1953] ALR (CN) 1165. [page 35] Concurrent leases were used, until the legislation was amended and later repealed, as a device for evading the operation of s 85(1) of the Landlord and Tenant Act 1958 (Vic): see Cook v Evans (1948) 49 SR (NSW) 83; Kirsch v Auhl [1949] VLR 324.

Future or reversionary leases

[1.10] A lease may be granted to take effect in possession either at once or from some date in the future. Further, a lease may be made to commence from a date in the past: a large proportion, if not indeed the majority, of leases executed are of this kind. It is not possible, however, by a lease executed, say, in February 1970 to create a term beginning on 15 December 1969 in the sense of bringing into existence a term before the date of the execution of the lease. In such a case, the lease relates back to the date from which the term is expressed to commence only for the purpose of marking the duration of the lessee’s interest: its operation as a grant is merely prospective from the date of its execution: Shaw v Kay (1847) 1 Ex 412; 154 ER 175; King v McIvor (1883) 4 LR (NSW) 43; 4 ALT 153; Fernhill Railway Co v Mayor of Dunedin [1884] NZLR (SC) 86; Earl Cadogan v Guiness [1936] 2 All ER 29; [1936] Ch 515; Queensland Television Ltd v Federal Commissioner of Taxation (1969) 1 ATR 419; 119 CLR 167; Roberts v Church Commissioners for England [1972] 1 QB 278; Perpetual Trustee Co Ltd v Morley (1968) 121 CLR 659 at 662–3; Bradshaw v Pawley [1980] 1 WLR 10; Brikom Investments Ltd v Seaford [1981] 1 WLR 863 at 866–7. In relation to agreements for lease, see [4.1]. A lease granted to take effect in possession from some date in the future is a future lease; such leases, since they take effect in reversion, are also called reversionary leases. Future leases must not be confused with concurrent leases. An example of the confusion of the two kinds of lease is found in the headnote to London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764, where a concurrent lease is misdescribed as a reversionary lease. A concurrent lease is a lease which is to take effect immediately in possession, subject to an existing lease. Further leases are leases in reversion: concurrent leases are leases of the reversion. See [1.9]. Although the expressions ‘future lease’ and ‘reversionary lease’ are generally treated as synonymous, the latter is by some reserved for those future leases in which the term commences after the determination of some earlier lease: Green v Bowes-Lyon [1960] 1 All ER 301; [1960] 1 WLR 176 at 181, as opposed to future leases where the date of commencement of the term is fixed in some other manner. An example of a reversionary lease in the narrow sense is found in Fuller’s Theatre & Vaudeville Co Ltd v Rofe [1923] AC 435 at 438.

By the doctrine of interesse termini, actual entry had to be made by the tenant in order to perfect his or her title. Until entry he or she had no estate in the land, but [page 36] only a right of entry, which was called interest in the term, or interesse termini: Joyner v Weeks [1891] 2 QB 31 at 47; [1891–4] All ER Rep Ext 1438. This doctrine has been abolished by statute: Property Law Act 1958 (Vic) s 149(1). The only limitation now in respect of the grant of future leases is that contained in s 149(3) of the Property Law Act 1958 (Vic), whereby a term, at a rent or granted in consideration of a fine, limited after the commencement of the Act to take effect more than 21 years from the date of the instrument purporting to create it shall be void, and any contract made after such commencement to create such a term shall likewise be void: Conveyancing Act 1919 (NSW) s 120a(3); Property Law Act 1974 (Qld) s 102(3); Property Law Act 1969 (WA) s 74(3). The subsection does not apply to any term taking effect under a settlement, or created out of an interest under a settlement, or under a power for mortgage, indemnity or other like purposes. The effect of this provision is considered in Re Strand and Savoy Properties Ltd [1960] 2 All ER 327; [1960] Ch 582; and Weg Motors Ltd v Hales [1961] 3 All ER 181; [1962] Ch 49.

Building leases [1.11] A building lease contains a covenant by the lessee to erect buildings on the demised land. The covenant may be either to erect a building on vacant land or to pull down old buildings and erect new ones in their place. A building lease is to be contrasted with a repairing lease: City of London v Nash (1747) 26 ER 1095 at 1096. The rent paid by the lessee under a building lease is known as ground rent: see [1.12].

Rent [1.12] The only necessary characteristic of any tenancy is that it should give the right of exclusive possession to the tenant for an ascertainable period of time; the reservation of rent is not essential: Weston v Ray [1946] VLR 373 at 377; Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323; Burns v Dennis (1948) 48 SR (NSW) 266, and other authorities referred to and applied in Hayes v Seymour-Johns (1981) 2 BPR 9366 at 9369. The position was stated very clearly by Barry J in Francis Longmore and Co Ltd v Stedman [1948] VLR 322 at 323; [1948] 1 ALR 126 at 127: The only necessary characteristic of any tenancy is that it should give the right to exclusive possession to the tenant for an ascertainable period of time (Lace v Chantler, [1944] 1 KB 368, per Greene MR, at p 370); reservation of rent is not essential (Landale v Menzies, [1909] 9 CLR 89, per Griffith CJ, at p 100–p 101, per Barton J, at p 111; Commonwealth Life Assurance Co v Anderson, [1946] 46 SR (NSW) 47, at p 49; Burns v Dennis, [1948] 65 WN (NSW) 55, at p 56), and the subsequent arrangement by which the plaintiff relieved Stedman of the obligation to pay rent did not alter the character of the occupation. [page 37] See also Cuttle v Brandt (1947) 64 WN (NSW) 96; Western Australian Club Inc v Nullagine Investments Pty Ltd (1992) 6 WAR 441; [1993] ANZ ConvR 403; on appeal Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; 116 ALR 26; BC9303589; and NZI Insurance Australia Ltd v Baryzcha (2002) 85 SASR 482; [2002] SASC 16; BC200200071. In NZI Insurance Australia Ltd v Baryzcha, above, issues arose in relation to whether a new lease agreement had been negotiated in the absence of final agreement as to rent. It was, consequently, not a case where, as in Francis Longmore, there were arguments as to whether the parties intended that rent should be payable at all but a case where a question of the existence, or enforceability, of a lease pending final agreement as to rent arose. In the

context, Mullighan J in NZI Insurance Australia Ltd v Baryzcha, above, considered the authorities at [50]–[57]: [50] As has been mentioned, the evidence establishes that by the end of May 2000 and probably agreement earlier had been reached on all matters, except the manner of rent review and the extent of the rentfree period. It is only in that respect that the ‘rent’ had not been agreed. Also, it must be acknowledged that the negotiations had always proceeded on the basis that the other terms and conditions of the lease would be the same as in the draft lease which were the same as in the expired lease. The lack of agreement about the manner of rent review and the rent-free period does not mean that there was a lack of agreement about rent. In Beer v Bowden there was a binding and valid lease for the period beyond the first five years even though the new rent had not been agreed and there was no agreement as to how the amount of the rent was to be fixed in the absence of an agreement. Despite the argument to the contrary, I think this decision is authority for the proposition that agreement as to rent is not essential for the existence of a lease. Mr Jenner sought to distinguish this decision on the basis that there was a lease in existence although the rent after the first five years had not been agreed. I do not regard that as a valid point of distinction. In the present case there was agreement about all matters except the rent review and the rent free period. I accept that in the absence of agreement as to the amount of the rent, the law will require a tenant to pay a reasonable rent which will be determined by the courts if the parties cannot agree. In Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323 Barry J said: The only necessary characteristic of any tenancy is that it should give the right to exclusive possession to the tenant for an ascertainable period of time (Lace v Chantler [1944] 1 KB 368 at 370 per Greene MR); reservation of rent is not essential (Landale v Menzies (1909) 9 CLR 89 at 100–101 per Griffith CJ, per Barton J, at 111; Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47 at 49; Burns v Dennis (1948) 48 SR (NSW) 266 at 267), …

[51] Mr Jenner submitted that this decision has no application to the present case because it is concerned with particular regulations in force in the State of Victoria at the time. I reject that submission. The particular regulation did not bear upon the question which had to be decided, namely whether the relationship of landlord and tenant arose even though the premises were occupied under arrangements which did not involve payment of rent. [page 38] [52] Next it was submitted that the authorities relied upon by Barry J did not support the proposition that ‘reservation of rent is not essential’. I do not agree. While Landale v Menzies (1909) 9 CLR 89 was concerned with a tenancy at will between owners of adjoining properties regarding certain land and water at or near a fence, the judgment of Griffith CJ was referred to for the principle which he stated as follows (at 100–101): A contract for the exclusive occupation of land for a determinate period, however short, constitutes a lease: R v Morrish 32 LJMC, 245. It may be seen that there is no mention of rent, although the frequency of the payment of rent may determine when a tenancy at will may be terminated. In Landale v Menzies Barton J (at 111) referred to the definition of Woodfall (17th ed p 141) of a lease as ‘a contract for the exclusive possession of land or tenements for some certain number of years or other determinate period’. Again, there is no reference to rent. In Commonwealth Life (Amalgamated) Assurance Ltd v Anderson the Full Court of New South Wales was concerned with whether a weekly tenancy is a tenancy at will and, therefore, unassignable. Jordan CJ, with whom the other members of the court agreed, said (at 49): But the only essential characteristic of any lease is that it should give the right of exclusive possession of premises to a tenant. So long as the letting is of this character, and is for a specific

period, it is a lease for a term, however short the period or periods, continuous or discontinuous, during which it confers rights of exclusive possession; and it creates an estate in the land: R v St Martin-in-the-Fields [1842] 3 QB 204; Joel v International Circus and Christmas Fair (1920) 124 LT 459. In Burns v Dennis [1948] 65 WN (NSW) 55 the Full Court of New South Wales when considering whether an arrangement to occupy premises was a tenancy, said, at 56: It is true that no rent was to be paid for 12 months from the date of the document; but ‘the reservation of the rent is not of the substance of the lease, for a lease may consist without any reservation’: Knight’s Case (1588) 5 Co Rep 54b at 55a. It may be seen that in neither of the last two mentioned cases was reservation of rent regarded as essential. I regard all of these cases as supporting the principle stated by Barry J in Francis Longmore v Stedman. [53] The appellant also contended that if the parties had reached agreement that there was to be a lease in the same terms as the expired lease which included the preamble which in part is: … and the lessee accepts this lease for the term described in Item 6 of the Schedule and at the rent and payable in the manner set out in Item 7. [54] Item 6 contains the terms of the lease and renewals and Item 7 contains the annual rent and manner of payment. The obligation to pay the rent is set out in cl 2.1 which is an essential term of the lease pursuant to cl 4.1.1. [55] As I understand the submission, if the parties had reached an agreement that there would be a lease in those terms, the agreement could not be concluded until agreement had been reached about the amount of the rent and the additional matters of rent review and the rent-free period. [56] That submission is rejected. As has been mentioned, this form of lease specifically provides that only the obligation to pay rent is an

essential term and not the amount of the rent or the two other matters. The preamble to the expired lease does not establish [page 39] that agreement as to rent is an essential requirement for a lease. At all events, as has been mentioned, the parties had reached agreement about the rent. [57] Mr Jenner referred to observations of Dixon J in Turner & Ors v York Motors Pty Ltd (1951) 85 CLR 55 as authority for the proposition that agreement as to rent is essential for a lease. I do not understand these observations to support such a proposition. The Court was concerned with the legal consequences of the circumstances in which defendants entered into possession of land. Dixon J said as follows (at 68): The one position is an entry provisionally and without any agreement but pending negotiations for an agreement or a lease with a common intention that notwithstanding payment of compensation for the use of the land described as rent the occupier shall remain nothing but a tenant at will until a formal lease is executed or an agreement reached. The other position is that the parties agree on the main terms of a tenancy including rent and agree also that the transaction shall be carried out by a proper conveyancing document and that in the meantime the tenant shall hold in pursuance of the agreement. In the latter case at common law payment of rent established a tenancy of a periodical character (usually from year to year) coming to an end automatically with the effluxion of the agreed term: see Moore v Dimond (1929) 43 CLR 105, particularly at 112, 113. As can be seen these observations do not establish that reservation of rent is an essential requirement of a lease. Compare Street v Mountford [1985] AC 809 at 818–19, which was explained

in Ashburn Anstalt v Arnold [1989] Ch 1 (CA) on the basis that Lord Templeman could not have meant ‘no rent, no lease’ for this would be inconsistent with the Law of Property Act 1925 (UK) s 205(1)(xxvii): see Property Law Act 1958 (Vic) s 18(1). See also All ER Rev 1988 pp 176 and 185 (Ashburn Anstalt was said by the House of Lords in Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 to be wrongly decided, but with respect to other aspects of the Court of Appeal decision, see [1.5]). Accordingly, the Court of Appeal held that the reservation of a rent was not necessary for the creation of a tenancy; similarly, AG Securities v Vaughan [1990] 1 AC 417 (CA) (though reversed by the House of Lords on another point: [1990] 1 AC 417). See also the judgment of Windeyer J in Radaich v Smith (1959) 101 CLR 209 at 222, which was expressly approved in Street v Mountford at 826–7. The parties sometimes stipulate for a nominal rent in the mistaken belief that reservation of rent is essential to the creation of a tenancy. For an example of a peppercorn rent, see R v Registrar of Titles; Ex parte Commonwealth (1915) 20 CLR 379: see further, Chapter 11. Where money is payable under the lease a court will not infer that it is payable as rent if there is a more likely explanation: see Bostock v Bryant [1990] 2 EGLR 101 (where the payment of gas and electricity bills was characterised as a part payment of expenses). Rack rent is a rent of the full value of the holding, or near it: 2 Bl Com 43; Re Sawyer & Withall [1919] 2 Ch 333. Rack rent is to be contrasted with ground rent. The latter expression is sometimes loosely used. The context in which it appears may materially affect its meaning: Stewart v Alliston (1815) 1 Mer 26; 35 ER 587. Ground [page 40] rent is the rent at which land is let for the purpose of improvement by building. It carries with it the reversionary interest in buildings erected after the date of the lease. ‘The term ground rent is well understood and has a definite meaning; it is the sum paid by the owner or builder of houses for the use of land to build on, and is therefore much under what it lets for when it has been built on’: Bartlett v Salmon (1855) 43 ER 1142 at 1145.

Leaseholds as personalty [1.13] By an exception to the general rule that rights over land are regarded as real property, leasehold interests are held to be personal estate. Personal estate consists in part of chattels real and in part of chattels personal. Leaseholds are chattels real. As they are interests in land, they bear many analogies to realty: Union Bank of Australia v Harrison Jones & Devlin Ltd (1910) 11 CLR 492 at 526; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 299. Although leasehold interests are personal property, the rule in Flureau v Thornhill (1776) 2 Wm Bl 1078; 96 ER 635; [1775–1802] All ER Rep 91, limiting the damages recoverable from a vendor of real estate who has acted in good faith and is unable to make title, applies to agreements to grant a lease; see [13.4].

Tenancy by attornment [1.14] At common law an assignment of the reversion could not be completed without an attornment by the tenant (Doe d Wright v Smith (1838) 112 ER 835 at 837), the attornment being the act of the tenant putting one person in the place of another as his or her landlord: Cornish v Searell (1828) 8 B & C 471; 108 ER 1118; Gerard Estates Pty Ltd v McGregor [1967] 2 NSWR 292; 86 WN (Pt 1) (NSW) 156. This situation has been remedied by statute; by s 151 of the Property Law Act 1958 (Vic) (and equivalents), the conveyance of the reversion is valid without any attornment of the lessee: see, for example, Conveyancing Act 1919 (NSW) s 125. As to whether this section applies to an oral lease, see Gerard Estates Pty Ltd v McGregor. The tenant may safely continue to pay rent to the previous landlord until he or she is given notice of the assignment. Notice of the assignment need not be given before bringing ejectment for breach of covenant other than a covenant to pay rent: Shaltock v Harston (1875) 1 CPD 106. The section has no application where at the time of the assignment the tenant has no interest in the land, as where he or she had assigned: Allcocks v Moorhouse (1882) 9 QBD 366. For the position where the assignee relies on s 79 of the Supreme Court Act 1986

(Vic) (see [19.3] for corresponding provisions in other states), and the halfyear’s rent accrued fell due partly before and partly after the date of the assignment, see Rickett v Green [1910] 1 KB 253. [page 41] In modern times the expression ‘attornment’ has come to be commonly used, not in the special sense of the acknowledgment of the tenant which was formerly necessary to complete an assignment of the reversion, but in the more general sense of any acknowledgment or admission of the existence of a tenancy. Attornment clauses, whereby the mortgagor or purchaser ‘attorns and becomes’ tenant to the mortgagee or vendor, are almost invariably inserted into mortgages and ‘terms’ contracts of sale of land. As to the position of a mortgagor in occupation of mortgaged land, whether under an attornment clause in the mortgage or otherwise, see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, (3rd ed, 2014) [12.6]–[12.12]. At attornment clause operates to create a tenancy by estoppel if the facts are such that a true tenancy is not created: Cole on Ejectment, pp 219, 230; Partridge v McIntosh & Sons Ltd (1933) 49 CLR 453; Ex parte Jackson; Re Australasian Catholic Assurance Co Ltd (1941) 41 SR (NSW) 285; ANZ Bank Ltd v Strelitz [1964] NSWR 401; Regent Oil Co Ltd v J A Gregory (Hatch End) Ltd [1965] 2 All ER 90; [1966] Ch 402; City Mutual Life Assurance Society Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1; and see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, (3rd ed, 2014) [12.11]. See further [20.8] and Cam & Sons Pty Ltd v Commissioner of Land Tax [1965] ALR 852; 1 12 CLR 139.

Leases created by estoppel [1.15] In addition to tenancies by estoppel created by an attornment clause in the circumstances referred to in the preceding paragraph ([1.14]), the courts have recognised the creation of leases by estoppel in other circumstances. In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 the

tenant took a lease for 28 years with an option for a further 14. In the belief that it had an option the tenant installed a lift at substantial cost but, unknown to both the landlord and the tenant, the option was void, not having been registered under the Land Charges Act 1925 (UK). It was held that the landlord was estopped from asserting the invalidity of the option on the basis of representations made as to the validity of the option and also because the landlord had encouraged one of the plaintiffs to incur expenditure and alter their position irrevocably by taking additional premises on the basis that the option was valid. The tenant in Andrews v Colonial Mutual Life Assurance Society Ltd [1982] 2 NZLR 556 had expended a substantial sum of money in refurbishing and recarpeting the premises. The work took place with the landlord’s knowledge and agreement, the landlord having confirmed that they were prepared to offer the tenant a new lease for three or six years. It was held that the plaintiffs were entitled to succeed on the basis of proprietary estoppel. After reviewing the authorities (see 567–9) Barker J said (at 570): Whether or not the defendant considered there to be a contract for a new lease, its conduct throughout was such as to give rise to an action based on proprietary estoppel. [page 42] When the defendant learned of the extensive refurbishing to be undertaken by the plaintiffs, the defendant should have concluded that the plaintiffs were undertaking this work in the belief that they were to have a new lease on the terms of the letter. Yet, the defendant did nothing to disabuse them of that view. Similar issues arose in the High Court in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. In summary, the facts were that Mr and Mrs Maher purchased land in the commercial centre of Nowra for commercial development. A substantial brick building and two dilapidated buildings stood on the land. After negotiations with Waltons it was agreed that the Mahers would replace those buildings with a new building, designed specifically to suit Waltons’ requirements, which would be leased to Waltons for six years

with a six year option. Waltons’ solicitors sent an agreement for lease and draft lease to the Mahers’ solicitors on 21 October 1983. Some amendments were required, which were incorporated in fresh documents which were prepared by Waltons’ solicitors. On 11 November the Mahers’ solicitors forwarded the executed documents ‘by way of exchange’ to Waltons’ solicitors. Demolition work then began on the new brick portion of the old building. In early January building work, in accordance with the plans and specifications approved by Waltons, commenced. On 19 January, when the building work was approximately 40% completed, Waltons’ solicitors informed the Mahers’ solicitors that Waltons did not intend to proceed, the contracts not having been exchanged. The appeal was dismissed, the High Court being of the view that Waltons was estopped from denying that a concluded agreement existed. Mason CJ and Wilson J, in a joint judgment, said (at 407–8): The second factor of importance is that the respondents executed the counterpart deed and it was forwarded to the appellant’s solicitor on 11 November. The assumption on which the respondents acted thereafter was that completion of the necessary exchange was a formality. The next their solicitor heard from the appellant was a letter from its solicitors dated 19 January, informing him that the appellant did not intend to proceed with the matter. It had known, at least since 10 December, that costly work was proceeding on the site. It seems to us, in the light of these considerations, that the appellant was under an obligation to communicate with the respondents within a reasonable time after receiving the executed counterpart deed and certainly when it learnt on 10 December that demolition was proceeding. It had to choose whether to complete the contract or to warn the respondents that it had not yet decided upon the course it would take. It was not entitled simply to retain the counterpart deed executed by the respondents and do nothing: cf Thompson [Thompson v Palmer (1933) 49 CLR 507 at 547]; Olsson v Dyson (1969) 120 CLR 365 at 376. The appellant’s inaction, in all the circumstances, constituted clear encouragement or inducement to the respondents to continue to act on the basis of the assumption which they had made. It was unconscionable for it, knowing that the respondents were exposing themselves to detriment by acting on the basis of a false

assumption, to adopt a course of inaction which encouraged them in the course they had adopted. To express the point in the language of promissory estoppel the appellant is estopped in all the circumstances from retreating from its implied promise to complete the contract. [page 43] An estoppel may arise in a variety of ways. An equitable estoppel may arise in favour of a subtenant in the event of forfeiture of the head lease in circumstances where s 146(4) of the English Law of Property Act 1925 (or its equivalents) cannot be called in aid: see Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd [1990] Ch 237 at 252 and following (and see the discussion of the dictum of Denning MR in Moorgate Mercantile Co Ltd v Twitching’s [1976] QB 225 at 241–2; compare Walton’s Stores); discussed at All ER Rev 1989 pp 194–6; see also [19.6]. In S and E Promotions v Tobin Bros (1994) 122 ALR 637 an estoppel was established with respect to the exercise of an option under a sublease; see also Zacharia v Ajay Investments Pty Ltd and Chan (1982) ANZ ConvR 651 (SC(SA), Mitchell J); Osborne Park Co-operative Society Ltd v Wilden Pty Ltd (1989) 2 WAR 77; and Gobblers Inc Pty Ltd v Stevens (1993) 6 BPR 97,488 at 13,596–7 (per Cohen J); cf Scandi International Pty Ltd v Varga Group Investment (No 8) Pty Ltd [2001] NSWSC 21 where a tenant was estopped from denying that a monthly tenancy arose on the same conditions as the original lease as a result of the exercise of an option to renew the lease where the landlord believed that the option was being exercised by the original tenant, whereas the true position was that a receiver and manager had been appointed to the original tenant. However, in circumstances where a lease is agreed subject to certain preconditions, an estoppel does not arise merely because the tenant is let into possession where the preconditions are not met: Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486 at 13,580 (per Young J). As to leases binding on mortgagors in favour of their tenants and binding on mortgagees in favour of mortgagors and tenants, see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, (3rd ed, 2014) [12.17], [12.20]; and as to feeding the estoppel with respect to leases granted by purchaser-mortgagors after contract but before completion,

see Abbey National Building Society v Cann [1991] 1 AC 56 (HL); and Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, (3rd ed, 2014) [12.21]. For a case where forfeiture was allowed where the power to determine the lease by re-entry was not activated, but the landlord acted on an impression created by the tenant’s conduct that it was abandoning the premises thereby raising an equitable estoppel, see Leda Commercial Properties v DHK Retailers Pty Ltd (1992) 111 FLR 81 (SC(ACT)). In any event, even if a representation as to the granting of a lease can be established, reliance on that representation for the purposes of an estoppel must be shown to be reasonable: see Venza Corp Pty Ltd v Allsop (SC(NSW), Bryson J, 4 December 1996, unreported (BC9605912)). Where an estoppel by representation is being relied upon it is, of course, necessary to establish that a relevant representation was actually made: see Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 (CA). Further, any representation must ordinarily be clear and unambiguous if it is to be effective in founding an estoppel: see Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 (CA) at 64,444, [41] (Charles JA, with whom Ormiston and Buchanan JJA agreed); and see Fush v McKendrick & Co Pty Ltd (2004) V ConvR [page 44] ¶54-686 (CA). See also the discussion of the authorities in this respect by the High Court in Crown Melbourne Ltd v Comopolitan Hotel (Vic) Pty Ltd (2016) 90 ALJR 770. Various aspects of the judgments of the High Court in Waltons Stores have been discussed and applied in subsequent decisions of courts. In particular the High Court itself has moved further towards unification of the principles of common law and equitable estoppel in Foran v Wight (1989) 168 CLR 385 and Commonwealth v Verwayen (1990) 170 CLR 394. Without attempting any detailed discussion of these principles and developments it is useful to refer to a few decisions in which they have been applied or explained in relation to, or with particular relevance, to leases and agreements to lease.

In S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 the Full Federal Court (Neaves, Gummow and Higgins JJ) applied Waltons Stores with respect to the need to exercise any option under a proposed new sublease. In a joint judgment the principles established by Waltons Stores and subsequent decisions were considered (at 652–4): In approaching the matter in this way, the primary judge sought to apply the six matters which are stated in the judgment of Brennan J in Waltons Stores, supra, at CLR 428–9; ALR 542, as necessary to establish an equitable estoppel. Brennan J there said: In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. In Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 615–16, Priestly JA spoke as follows of the above passage in Brennan J’s judgment: It may be that those tests do not represent the view of a majority of the court, but even if not, they are useful as a check; if the facts of the case did not measure up to those tests, it would be necessary to think thoroughly about why not. If they do comply with those tests, that is some reason for thinking my conclusion right.

See also Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 at 116–17; 111 ALR 649, per Hill J. For his part, in Austotel (at 610) Priestley JA offered the more succinct proposition: For equitable estoppel to operate there must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed or an interest granted to the plaintiff [page 45] by the defendant, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable. The circumstance that Priestly JA dissented from the result on that appeal does not detract from the cogency of this passage. It will be noted that, like Priestly JA, Brennan J had been speaking of ‘an equitable estoppel’. The argument on the present appeal proceeded on that footing. In Waltons Stores Brennan J, together with Mason CJ, Wilson J and Gaudron J, had accepted the proposition that, whilst they share many ideas, common law and equitable estoppel are distinct doctrines; see the analysis of the High Court judgments by the New South Wales Court of Appeal in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at 472, 476; and see also Commonwealth v Verwayen (1990) 95 ALR 321; 170 CLR 394 at 422 (Brennan J), 454 (Dawson J), 499–501 (McHugh J), and Roebuck v Mungovin [1994] 1 All ER 568 at 574–5 (Lord Browne-Wilkinson). This is important in the present case. The price of equitable relief may be the imposition of terms upon the successful party, on the footing that because it seeks equity it must be prepared to do equity. There is no comparable common law precept of such wide application. As already indicated, Tobin Brothers accepts that the imposition of such terms may be involved in the reformulation of orders in its favour.

It also should be noted that in her judgment in Waltons Stores Gaudron J indicated some qualification to proposition (4) in the formulation by Brennan J. That proposition is that the defendant knew or intended that the plaintiff would act or abstain from acting in reliance on the assumption or expectation induced by the defendant. It was applied by Young J in Milchas Investments Pty Ltd v Larkin (1989) 96 FLR 464 at 474. However, in Waltons Stores Gaudron J held (164 CLR at 462; 76 ALR at 567) that the appellant was not estopped, in relation to the respondents’ assumption that contracts had been exchanged, on the basis that it knew of and failed to correct this mistaken assumption. But her Honour then said that this was not the end of the matter. Gaudron J continued: Whatever the actual knowledge or belief of the appellant as to the state of mind of the respondents once it came to the appellant’s knowledge that demolition work had commenced it ought then to have been aware that there was a real possibility or likelihood that the respondents had commenced work in the reasonable expectation that exchange would take place. That being so, the appellant came under a duty to inform the respondents that the situation had materially changed. An expectation by the respondents that exchange would take place was eminently reasonable in the light of all the facts known to them … Against that background the appellant must have known that an expectation of exchange was reasonable on the facts known to the respondents, but was not reasonable in light of the appellant’s changed attitude. At that stage prudence was required. It was not forthcoming. Where imprudence is ‘a proximate cause of the other party’s adopting and acting upon the faith of the assumption’ (emphasis added), the justice of an estoppel is made out: Thompson v Palmer (1933) 49 CLR 507 at 547; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 676. That test requires no knowledge as to the other’s state of mind. Nor does the test require that imprudence should have caused the assumption to be made. It is sufficient that

[page 46] imprudence is ‘a proximate cause’ of the assumption being adopted and acted upon. Whatever may have caused the respondents to make their assumption that exchange had taken place, the evidence clearly supports the inference that the failure of the appellant to inform them that its attitude had changed was a proximate cause of their adopting and acting upon the faith of that assumption. Indeed such a finding is implicit in the finding of Kearney J that ‘by the [appellant’s] action in doing nothing to complete the exchange [respondents] were lulled into a sense of false security’. The references by Gaudron J to the two earlier High Court decisions are, of course, to the well-known judgments of Dixon J. In addition, in their joint judgment in Waltons Stores (164 CLR at 406–7; 76 ALR at 525) Mason CJ and Wilson J describe the ‘crucial question’ as being whether the appellant was ‘entitled to stand by in silence when it must have known that the respondents were proceeding on the assumption that they had an agreement and that completion of the exchange was a formality’. Their Honours concluded that the appellant was under an obligation to communicate with the respondents within a reasonable time after receiving the executed counterpart lease, bearing in mind several factors. One was that after they had executed the counterpart lease and it had been forwarded to the solicitors for the appellant, the respondents had acted on the assumption that completion of the necessary exchange of counterparts was a formality. Deane J also held that the appeal should be dismissed, even if the evidence had established no more than that by its conduct the appellant had led the respondents mistakenly to assume that exchange of contracts would take place as a matter of course and that the appellant, knowing of the falsity of the assumption, had remained silent when aware that the respondents were acting to their detriment by acting upon it (164 CLR at 446).

Further, as to proposition (5) in the formulation by Brennan J, it is sufficient for the representee to establish that reliance caused it to lose a real chance of avoiding the detriment: Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 at 540, per Handley JA. His Honour supported that proposition by citation of Foran v Wight (1989) 88 ALR 413; 168 CLR 385 at 413, 431–2, 436–7, 454. The contrary was not suggested. See also Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 (CA) and Commonwealth of Australia v Clarke [1994] 2 VR 333 (FC) for a comprehensive review of the authorities on promissory estoppel. In Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 (CA) (Starr v Barbaro (1986) 4 BPR 9137 at first instance) the Waltons Stores principles as formulated by Priestley JA (at 472), with whom the other members of the court agreed, were applied in circumstances where owners of land had executed a memorandum of lease (which was not registrable by reason of s 327AA of the Local Government Act 1919 (NSW)) and subsequently entered into a contract to sell the whole of the land, including the leased land. At first instance and on appeal the plaintiff occupier was successful. As to the effect of the estoppel, it appears from the judgment of Priestley JA that an equitable interest arose at the time of the circumstances giving rise to the unconscionable conduct [page 47] (see at 475). It is also clear that his Honour was referring to an equitable interest (properly so called) and not to a mere personal equity: see Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265. It followed that the priority of the third party purchaser was to be determined on the basis of the rules dealing with competing equitable interests according to the rule in Rice v Rice (1853) 2 Drew 73; 61 ER 646. The priorities position in Silovi was liable to be affected by the operation of s 43A of the Real Property Act 1900 (NSW). However, the purchaser was unable to take advantage of its protection and thereby obtain priority by registration as the purchaser had notice of the prior unregistered interest of the plaintiff at settlement. As to the effect of an equitable estoppel Leopold says (above, at 54):

If an equitable estoppel is made out, then the plaintiff actually has an equitable right, in the sense that the court of equity will grant to the plaintiff substantive relief in whatever form seems, in the court’s discretion, to be the most appropriate in all the circumstances [In Waltons Brennan J said that the successful plaintiff has ‘an equity created by estoppel’; (1988) 164 CLR at 416; 76 ALR at 532; see also Inwards v Baker [1965] 2 QB 29 at 38]. For example, the plaintiff in Corpers (No 664) Pty Ltd v NZI Securities Australia Ltd [(1989) NSW ConvR ¶55-475 (58,450)] obtained an order for damages under s 68 of the Supreme Court Act 1970 (NSW) (which substantially re-enacts s 2 of Lord Cairns’ Act). In terms of consequences it should be kept in mind that the equitable interest produced by the unconscionable conduct upon which the estoppel is founded exists before any relief (which may be described as consequential relief in this sense) is granted by a court of equity: see Silovi at 475 (per Priestley JA). As Dorney comments (op cit, 39): ‘The Court of Equity need only make a declaration as to the representee’s entitlement which gives effect to that equitable interest: Dillwyn v Llewellyn [(1862) 4 De GF & J 517]; Ramsden v Dyson [(1866) LR 1 HL 129].’ The principles of proprietary estoppel were considered in Hollier v Australian Maritime safety Authority (1998) V ConvR ¶54-581 where Sundberg J said (at 66,948): If the owner of land requests or allows another to incur expenditure or otherwise prejudice himself under an expectation created or encouraged by the owner that he will obtain an interest in the land, that raises an equity in the other which will be satisfied in whatever is the most appropriate way. The best known of the cases illustrating this proposition are Dillwyn v Llewelyn (1862) 4 De G F & J 517, Ramsden v Dyson (1866) LR 1 HL 129 and Plimmer v Wellington Corporation (1884) 9 App Cas 699. The nature of proprietary estoppel, and its relationship with other estoppels, was examined by the High Court in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 403–404 per Mason CJ and Wilson J and at 416–417 and 419–420 per Brennan J. There are three conditions which a claimant must satisfy. The first is

that he believed that he would obtain an interest in the land. The second is that that belief must have been encouraged by the owner, either actively or passively. The third is that the claimant must have acted in reliance on the encouragement, so that were the owner to insist on his strict legal rights, the claimant would suffer detriment. The extent of the equity is to have made good the expectation which the owner has encouraged. If the equity is [page 48] established, effect is given to it in whatever is the most appropriate way: Waltons Stores at 419. Sometimes it will be sufficient to dismiss the owner’s action to enforce his legal rights. In other cases the owner may be restrained from asserting his rights. The claimant’s reward may be a lien on the property for his expenditure or for the value of any improvements: Raffaele v Raffaele [1962] WAR 238. In some cases the appropriate remedy is the grant of the interest the claimant believed he would obtain, such as a perpetual easement or a licence to use the land as his home for as long as he desires. See, for example, Ward v Kirkland [1967] Ch 194 and Inwards v Baker [1965] 2 QB 29. Or it may appear that the claimant has already had sufficient satisfaction for his expenditure, and so is entitled to no relief: Attorney-General v Baliol College, Oxford (1744) 9 Mod 407 at 412. The range of relief that may be granted is expounded in Snell’s Equity 29th ed (1990) 577–578. See also Waltons Stores at 419. The plaintiff’s case failed in Hollier because it was found on the evidence that he was aware that AMSA was not in a position to commit itself to longterm occupancy. Following on from these statements of Sundberg J in Hollier, it is helpful to note that Brennan J made particular reference in Waltons Stores to the distinction between a contract and an equity created by estoppel; a distinction which explains and emphasises that the consequence of establishing an equitable estoppel is only to attract the ‘minimum equity’, that is equitable relief only insofar as is necessary to assuage the consequences flowing from the

unconscionable conduct of the representor as a result of failing to meet the expectations created. Thus Brennan J said (at (1988) 164 CLR 425): … A contractual obligation is created by the agreement of the parties; an equity created by estoppel may be imposed irrespective of any agreement by the party bound. A contractual obligation must be supported by consideration; an equity created by estoppel need not be supported by what is, strictly speaking, consideration. The measure of a contractual obligation depends on the terms of the contract and the circumstances to which it applies; the measure of an equity created by estoppel varies according to what is necessary to prevent detriment resulting from unconscionable conduct. And see Redder Than Red Tomato Co Pty Ltd v AB & SM Rawlings Pty Ltd [1999] SASC 30; BC9900143 (per Burley M); and Vella v Wah Lei Investments (Aust) Pty Ltd (2004) 12 BPR 22,671 at 22,676–7, [169] (per Campbell J), and see below. In a similar vein, and with reference to the promissory and proprietary estoppel dichotomy, Nettle J said in Crown Melbourne Ltd v Comopolitan Hotel (Vic) Pty Ltd (2016) 90 ALJR 770 at 810–11; 333 ALR 384 at 434–5, [217]–[218]: [217] The foundational principle on which equitable estoppel in all its forms is grounded is that equity will not permit an unjust or unconscionable departure by a party from an assumption or expectation of fact or law, present or future, which that party has caused another party to adopt for the purpose of their legal relations.258 Consequently, the notion that there is or should be some a priori distinction between the degree of objective certainty required to found a promissory estoppel compared to a proprietary estoppel runs counter to principle. The idea of “one overarching doctrine of estoppel rather than a series of independent rules”259 may not yet have “won general [page 49] acceptance”.260 But, in as much as the recognised categories of equitable estoppel are instances of the operation of the more general

foundational principle, the determination of whether it is unconscionable for the charged party to depart from an assumption or expectation created in the mind of the claimant must always depend on the particular facts and circumstances of the case. The recognised applications of established categories of promissory estoppel are not necessarily exhaustive of the cases in which equity will intervene261 and, even if they were, it would not follow that because it has been found in the context of one relationship that a designated level of certainty was required, the same degree of certainty would be necessary in the context of a different relationship or in different circumstances. [218] Finally on this aspect of the matter, as Warren CJ emphasised, since the object of equitable estoppel in all its forms is to prevent the detriment which a representee would suffer if the representor were unjustly or unconscionably to depart from the assumption or expectation created in the mind of the representee, relief should be accorded only to the extent of the minimum content of the assumed state of affairs from which it would be unjust or unconscionable for the representor to depart.262 Frequently, that may not extend to compelling the representor to fulfil the assumption or expectation as opposed to compensating the representee for the detriment suffered.263 Hence, although an equivocal or objectively ambiguous representation would be incapable of forming a binding contract, it may yet found a promissory estoppel. The equivocal or objectively ambiguous nature of the representation is but one, albeit important, consideration in the determination of whether and to what extent the assumption or expectation is fairly and reasonably to be attributed to the representation and thus the measure of relief which is to be accorded.264 (Footnotes omitted) Agreements or arrangements ‘subject to contract’ (which probably translates in this context as ‘subject to preparation and signing of a formal lease’) may not give rise to an estoppel. In the ordinary course of events a party is not bound by an agreement ‘subject to contract’: see A-G of Hong Kong v Humphreys Estate (Queens Garden) Ltd [1987] 1 AC 114; and Masters v Cameron (1954) 91 CLR 353; and see [4.1]. It follows that prior to exchange of

contracts for the sale of land or the signing (and possible exchange or ‘delivery’) of the lease each party will be free to withdraw as there is then no intention to create legal relations (see Austotel Pty Ltd v Franklins Selfserve Pty Ltd) and in the absence of a further ingredient there is no basis for an estoppel. The further ingredient is unconscionability in the event that a party decides not to proceed with the transaction. Waltons Stores and other cases discussed have provided some examples of conduct on the part of the party seeking to withdraw that is to be regarded as unconscionable and giving rose to an estoppel — in Waltons Stores treating the ‘exchange’ as a mere formality, not affecting a pre-existing agreement. Similarly if the parties to an ‘agreement’ deliberately do not reach agreement on an essential term of that agreement, the inference may be drawn that they did not intend to be bound by any agreement and hence no estoppel will arise: see Austotel Pty Ltd v Franklins Selfserve Pty Ltd at 16 NSWLR at 525 (per Kirby P) and at 620 (per Rogers AJA). As the cases indicate, an essential element in a claim based on estoppel is reliance, together with consequential detriment: see Waipara Pty Ltd v Police Association (1998) V ConvR [page 50] ¶54-583 (CA). It followed in the circumstances of that case that there was no reliance on pre-lease negotiations where the parties had entered into a written arrangement subject to a lease ‘approved by both parties’ and subsequently proceeded to negotiate the terms of a formal lease which they had entered into (and see M Redfern, ‘Estoppel and Masters v Cameron’ (1998) 6 APLJ 278). An estoppel may also arise with respect to the assignment of a lease in circumstances which, in effect, amount to the creation of a new lease by estoppel in favour of the person actually in possession of premises, though that person may be styled as an ‘assignee’. This situation arose in Vella v Wah Lei Investments (Aust) Pty Ltd (2004) 12 BPR 22,671 at 22,676–7, where Campbell J said: [167] The caselaw recognises that, where land has been leased to one person, and another person has entered into possession of the land, the

lessor, and the lessee, can both become estopped from denying that there has been an effective assignment of the lease: Rodenhurst Estates, Ltd v W H Barnes, Ltd [1936] 2 All ER 3; Tichborne v Weir (1892) 67 LT 735; Official Trustee of Charity Lands v Ferriman Trust, Ltd [1937] 3 All ER 85; Williams v Heales (1874) LR 9 CP 177; Brown & Root Technology Ltd v Sun Alliance and London Assurance Co Ltd [2001] Ch 733. Precisely what estoppels exist depends in part upon precisely what representations have been made between the landlord and the person claiming to be an assignee. Mere payment of rent, and taking of possession, is not enough to amount to a representation by a person in possession that he was assignee of the lease (as opposed to a sub-lessee), and hence is not enough to establish that the person in possession is liable to the landlord on the covenants of the lease, although it is enough to establish an estoppel against the person in possession from denying the title of the landlord: Official Trustee of Charity Lands v Ferriman Trust, Ltd [1937] 3 All ER 85. There can be circumstances where a person in possession cannot deny that he is a tenant, and therefore bound to pay rent to the landlord, but can deny that he is bound by all the covenants of the original lease: Tichborne v Weir (1892) 67 LT 735. However, if the representation by a person in possession is that he is tenant on the terms of a particular lease, then he can be estopped from denying that he is liable to pay damages for breach of covenants, such as to repair, contained in the lease: Williams v Heales (1874) LR 9 CP 177. If someone requests a landowner to consent to an assignment of a lease to him, and thereafter goes into possession and pays rent, that is a representation of being in possession on the terms of the lease: Official Trustee of Charity Lands v Ferriman Trust, Ltd [1937] 3 All ER 85 at 90–91, explaining Rodenhurst Estates, Ltd v W H Barnes, Ltd [1936] 2 All ER 3. [168] Whether an estoppel exists also depends upon whether there has been any detrimental reliance on a representation. Thus, even if a person in possession has represented that it is an assignee of a lease, before that person is estopped from denying that there has been an effective assignment of the lease, and that it is bound by all the covenants of the lease, it is necessary for the landlord to have acted to

its detriment on the basis of that representation: Brown & Root Technology Ltd v Sun Alliance and London Assurance Co Ltd [2001] Ch 733. Conversely, even if a landlord has represented that there has been an assignment of a lease to a particular person, before the landlord is estopped from denying that there has been an effective assignment of the lease, it is necessary for that particular person to have acted to his detriment on the basis of that representation. [page 51] [169] Further, the fact that, as at one point of time, two such parties are estopped from denying that there has been an effective assignment of lease does not necessarily mean that that estoppel will endure indefinitely into the future. If one party, who has encouraged another to act on the basis that a particular state of affairs exists, gives notice that that state of affairs should no longer be regarded as existing then, unless the other party has already irretrievably prejudiced himself by acting on the assumption that that state of affairs exists, the estoppel will cease to bind, either immediately or after the other party has been given reasonable notice. This is the result of the principle that the relief which is appropriate to give effect to an estoppel is the minimum relief which would prevent the injustice arising by the person estopped departing from the assumption or expectation which has been induced: The Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 413, 429, 442–3, 487 and 501; Giumelli v Giumelli (1999) 196 CLR 101 at 113–14 and 119; Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 at 516–518. In the event it was found that no estoppel of this kind was established and that the occupant of the premises operated the tavern business conducted on the premises under an implied licence: and see Vella v Wah Lei Investments (Aust) Pty Ltd [2006] NSWCA 18, where the appeal from this decision was dismissed. On appeal reliance was placed on conventional estoppel. See [8] and [26] of the judgment of Hunt AJA on appeal. Conventional estoppel requires an assumption of fact which one party has

caused another to adopt or accept for the purpose of their legal relations. It is essential for the party claiming the benefit of such an estoppel to establish that ‘the departure from the assumption would turn the action or inaction [by the claimant] into a detrimental change of position’: see Novell Holdings Pty Ltd v Adjo Pty Ltd (SC(WA), Full Court, 5 February 1999, unreported (BC9900193)), referring to Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674–6. The requirements of a common assumption or conventional estoppel, in light of recent authorities, are encapsulated in the following paragraph in the judgment of Hunt AJA (with whom Mason P and Bryson JA agreed) in Vella v Wah Lei Investments (Aust) Pty Ltd [2006] NSWCA 18: [23] The essential requirements of an estoppel by common assumption were discussed in MK & JA Roche Pty Ltd v Metro Edgley Pty Ltd [2005] NSWCA 39, where Hodgson JA said (at para [72]): However, I do not accept Mr Newlinds’ submission that reliance and detriment are not essential for the existence of conventional estoppel. The passage from Con-Stan [Con-Stan Industries v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226] refers inter alia to Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, in which Dixon J makes it clear that the relevant principle is that ‘the law should not permit an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations’ (at 674), this involving both (1) action such that the party relying on the estoppel would suffer a detriment if the other party [page 52] were afterwards allowed to set up rights inconsistent with the assumption; and also (2) that the party against whom the estoppel is asserted ‘must have played such a part in the adoption of the assumption that it would be unfair or unjust if

he were left free to ignore it’ (at 675). See also Thompson v Palmer (1933) 49 CLR 507 at 547. In my opinion, common law estoppel by representation or conventional estoppel still requires that the party relying on the estoppel must have ‘placed himself in a position of significant disadvantage if departure from the assumption be permitted’: see Verwayen [Commonwealth v Verwayen (1990) 170 CLR 394] at 444. And see Easts Van Villages Pty Ltd v Minister Administering the National Parks and Wildlife Act [2001] NSWSC 559; (2001) Aust Contract R ¶90-132 (per Mathews AJ) at [72] and following, particularly [78]. A tenancy at will may arise where a prospective tenant enters into possession and pays rent while negotiations for the terms of the lease proceed: see Javad v Aqil [1991] 1 WLR 1007 (CA); Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 (CA); and Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 (CA); and see [2.16]. A lease which is unregistered in accordance with Torrens land registration legislation may, nevertheless, create an equitable term of years and tenure by estoppel: see National Australia Bank Ltd v Golden Sea Dragon (Hobart) Pty Ltd (1992) 4 Tas R 250. In general it is the exceptional case that a lease, or other agreement, arises on the basis of an estoppel; the cases indicate that it is not to be taken to be the norm: see Milchas Investments Pty Ltd v Larkin (1989) ATPR 50,431 at 50,438 (per Young J); Capital Market Brokers Pty Ltd v Hamelyn UPC Ltd (SC(NSW), Young J, 2 May 1989, unreported); and Gobblers Inc Pty Ltd v Stevens. It is not the purpose of this work to examine estoppel in any detail. The reader is referred to the leading texts: Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 5th ed, and Finn (ed), Essays in Equity. See also Prindable, ‘An Examination of the Process of Negotiating and Contracting Commercial Leases in Light of the Remarks of Deane J in Waltons Stores (Interstate) Ltd v Maher’ (1994) Qld Law Soc J 221; Dorney, ‘The New Estoppel’ (1991) 7 Aust Bar Rev 19; and Leopold, ‘Estoppel: A Practical Appraisal of Recent Developments’ (1991) 7 Aust Bar Rev 47.

Abolition of doctrine of interesse termini [1.16] By the doctrine of interesse termini, actual entry had to be made by the lessee in order to perfect his or her title. Until entry, he or she had no estate in the land, but only a right of entry which was called interest in the term, or interesse termini: Joyner v Weeks [1891] 2 QB 31 at 47; [1891–4] All ER Rep Ext 1938. The doctrine did not apply to a lease for life: Ecclesiastical Commissioners for England v Treemer [1893] 1 Ch 166. [page 53] An interesse termini was assignable, and on death passed to the lessee’s personal representative: Doe v Walker (1826) 5 B & C 111. Until the lease was perfected by entry, the lessee could not maintain an action for trespass, for this action is based on actual possession: Ryan v Clarke (1849) 14 QB 65 at 73; he or she might, however, bring ejectment: Doe d Parsley v Day (1842) 2 QB 147, or maintain an action against his or her landlord for not putting him or her in possession: Wallis v Hands [1893] 2 Ch 75; [1891–4] All ER Rep 719. As to this doctrine generally, see (1960) 24 Conveyancer 462. The doctrine has been abolished by statute: see Conveyancing Act 1919 (NSW) s 120A(1); Property Law Act 1974 (Qld) s 102(1); Law of Property Act 1936 (SA) s 24B; Property Law Act 1958 (Vic) s 149(1); Property Law Act 1969 (WA) s 74(1).

[page 55]

2 Kinds of Tenancy The five kinds of tenancy [2.1] If the tenancy at sufferance is regarded as a tenancy, there are five principal kinds of tenancy: (1) tenancy for a fixed term; (2) tenancy from year to year; (3) periodic tenancy for less than a year; (4) tenancy at will; (5) tenancy at sufferance. For a recent discussion of various kinds of tenancy and their incidents, see Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 (HL); see also Moore v Dimond (1929) 43 CLR 105; and Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 (HL). In addition to the five kinds of tenancy listed there remains the possibility of a lease for life in jurisdictions where there is no equivalent of the English Law of Property Act 1925 s 149(6): see Greco v Swinburne Ltd [1991] 1 VR 304; see also Prudential Assurance Co Ltd v London Residuary Body, above; and see [1.5]. It is proposed to say something as to the nature and incidents of each of these in turn.

Tenancy for a fixed term — certainty [2.2] This is a lease for a fixed period of time and the period must be fixed with certainty: see [1.5]. The term will often be several years, but it may be any fixed period, for example, six months: Box v Attfield (1886) 12 VLR 574, or even six days. In Thorn v Martin (1960) 77 WN (NSW) 301, the lease was for a term of one week, a circumstance adverted to by Maguire J in Ex parte Monters Pty Ltd; Re Webster [1960] [page 56] NSWR 521; [1961] SR (NSW) 354. A lease for a ‘term of years’ (which must be for two years at least: Land Settlement Association Ltd v Carr [1944] 2 All ER 126; [1944] 1 KB 657; compare Re Land at Liss [1971] Ch 986), is an example of a lease for a fixed term, but parties may fix any period they please, provided that they comply with the rule which requires that a certain period be fixed: see Street v Mountford [1985] AC 809 at 818–19; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 390–1 and 394–6; and see [1.5]. A tenancy to continue during the time the tenant, a schoolmaster, was stationed in a particular town: Morison v Edmiston [1907] VLR 191, and a lease to endure for the duration of the war: Anthony v Stanton [1943] VLR 179; Lace v Chandler [1944] 1 All ER 305; [1944] KB 368, have been held to be bad for uncertainty, and these are but illustrations of the general rule that the term must be definite: Binions v Evans [1972] Ch 359 at 366. A lease for life may be a lease for a fixed term within the meaning of a statute: Borambil Pty Ltd v O’Carroll (1974) 3 ALR 391; and see Greco v Swinburne Ltd [1991] 1 VR 304; and Australian Maritime Safety Authority v Quirk (1998) NSW ConvR ¶55-858. As to the general requirement that the relevant terms of the lease must be capable of being ascertained with certainty, see [1.5]. The commencement of the term must be certain, but it is sufficient if the commencement becomes certain by the time when the lease is to take effect in possession, and accordingly the term may be made to commence upon the happening of an uncertain event: Bishop of Bath’s case (1605) 6 Co Rep 34b; 77 ER 303; Clowes v Hughes (1870) LR 5 Exch 160; Terry v Tindale (1882) 3

LR NSW 444; Brilliant v Michaels [1945] 1 All ER 121 at 127–8. By a lease dated 1 August 1945 the plaintiff leased premises to the defendant for a term of three years ‘computed from’ 1 July 1945, at an annual rent payable by quarterly instalments, the first payment to be made on 1 July 1945, and payments thereafter to be made on the first days of October, January, April and July in each year. It was held that the date of expiry of the lease was 30 June 1948: Box v Lock (1948) 65 WN (NSW) 291. The expression ‘for the term of 12 months from’ was considered in Forster v Jododex Pty Ltd (1972) 127 CLR 421.

Automatic expiration [2.3] A lease for a fixed term expires automatically at the end of that term: Cobb v Stokes (1807) 8 East 358; 103 ER 380; see also [16.5]. Similarly, a lease will automatically come to an end upon the happening of an event upon which it is expressed to determine: Right d Flower v Darby (1786) 99 ER 1029 at 1030–1; Swift v Macbean [1942] 1 KB 375. It may have been agreed between the parties, however, that the tenancy is to continue after the expiration of the term until a stated notice is given, and in such a case the tenancy will continue until it is determined by the requisite notice: Brown v Trumper (1858) 26 Beav 11; 53 ER 800. It must be emphasised that, unless the parties have agreed that a tenancy on certain terms is to exist after the expiration of the fixed period, the lease will automatically come to an end upon the [page 57] expiration of the fixed period; in other words, a lease for a fixed term is determined by effluxion of time without the need for any notice to quit or other act. If a lessee for a fixed term remains in possession after the expiration of that term, he or she may, unless there is something in the facts warranting the conclusion that a new tenancy has been created, be ejected without notice; the mistaken view that notice to quit is required in such circumstances

is thought to have its origin in the former predominance of ‘prescribed’, or rent controlled, premises and the operation of legislation such as Pt V of the Landlord and Tenant Act 1958 (Vic) (provisions repealed as from 1 September 2012 — see LL&T Comparative Table), whereby ‘lessee’ was defined as including an overholding tenant: s 43(2), and notice to quit on a prescribed ground was a prerequisite to the recovery of possession from a lessee: s 82. Similarly, it is thought that the erroneous notion prevalent in some quarters that the giving of notice to quit is the usual means of forfeiting a lease for breach of covenant has the same origin.

Provision for notice — overholding clauses [2.4] Reference has already been made to the fact that, while ordinarily a lease for a fixed term automatically comes to an end upon the expiration of that term, the parties may agree that the lease is to continue until determined by notice. So a lease for a fixed term may itself provide that, if notice is not given to determine the lease at the end of the term the tenancy shall continue as a yearly tenancy: Brown v Trumper (1858) 26 Beav 11; 53 ER 800. In such a case the provision for the continuance of the lessee’s interest or the creation of some new interest in the lessee is contained in the lease itself. This must be distinguished from the case where a lessee holds over after the expiration of the lease and pays rent and there is attributed to the parties the intention of creating a new tenancy, often a tenancy from year to year (but note the New South Wales, Queensland and Western Australian legislation referred to in [2.14]): see, for example, Christopher v Wright [1949] VLR 145 at 147; but where the requisite intention is lacking the result may be a tenancy at will, or a mere licence, see [2.15]. The case of the overholding clause must also be considered. While an overholding clause may be drawn in terms which show an intention that a new tenancy shall arise upon the expiration of the original term, it will ordinarily be in a form which does not speak on the question whether a new tenancy is to arise after the expiration of the term and which is intended only to secure that, if a new tenancy is created by the conduct of the parties, that new tenancy shall be determinable by a short period of notice (often one month). See Hamilton v Porta [1958] VR 247 at 250–1, and contrast Ex parte Monters Pty Ltd; Re Webster [1960] NSWR 521; [1961] SR (NSW)

354; see also Di Torio v Zollo [1977] VR 547. The decision at first instance and on appeal in Guss v Ajax Technology Centre Pty Ltd (2000) V ConvR ¶54-612 (CA) illustrates the importance of properly recording any agreement to vary overholding provisions previously agreed, whether contained in the lease terms or in a further agreement. [page 58] In that case the alleged agreement to vary overholding provisions contained in the lease was found to be no more than ‘an agreement to negotiate’, the tenant desiring to achieve a reduced rent for the overholding. Additionally, occupation after the end of the lease term must be referable to the original lease so that occupation of further premises together with the premises which were the subject of the lease cannot be subject to the overholding provisions of that lease: see Marquette v Doherty [2002] NSWSC 580. As the Marquette case demonstrates, the proper characterisation of the nature of any occupancy, as under the overholding provisions of the original lease or otherwise, may be significant in relation to the liability of guarantors of the tenant’s obligations under the lease or any overholding, depending upon the terms of the guarantee. As to the terms on which an overholding tenant holds the premises, see [7.13]; see also [2.9]–[2.11].

Fixed terms and notices to quit [2.5] A lease for a fixed term will not ordinarily be determined by notice to quit. The parties may agree, however, that it shall be so terminable, and such agreement is effective. It is well settled that the incorporation into a lease for a fixed term of a right to terminate the lease on giving certain notice is not bad for repugnancy. See for example, Porter v Williams (1914) 14 SR (NSW) 83. The lease may provide for the giving of what may perhaps be described as notice to quit in either of two types of case; on the question of terminology see Foa on Landlord and Tenant, 8th ed, p 586 note (c). In the first place, the

lease may confer upon the landlord, or the tenant, or both, an option to determine it before the expiration of the agreed term. This right may be made exercisable only at a specified time, for example, at the end of the fifth year of the term, or in a specified event, for example, if the landlord requires the premises for a certain purpose. Occasionally, the right to determine is given without its being limited either by the fixing of a time at which it is to be exercised or the naming of events upon which it is to arise. It is usual to require the party exercising his or her option to determine the lease to give a certain period of notice to the other. In the cases so far discussed the right to determine the lease has not been connected with any default by the other party. A well drawn lease for a fixed term will confer upon the lessor the right to determine the lease in the event of a breach of covenant on the part of the lessee and in certain other events, ordinarily being events which reflect upon the solvency of the lessee. This provision usually empowers the lessor to determine the lease by re-entry, and re-entry does not require the giving of any notice to quit. Occasionally, a poorly drawn lease is found which empowers the lessor, in the case of a breach of covenant or the occurrence of one of the other specified events, [page 59] not to re-enter, but to give notice to quit of a short period specified in the lease; to require the giving of some specified period of notice as opposed to mere re-entry has nothing to commend it from the point of view of the lessor. It may be observed in passing that, just as leases occasionally stipulate for the giving of notice to quit instead of re-entry as the means of effecting a forfeiture, so tenancy agreements creating periodic tenancies occasionally provide not only for the giving of notice to quit, but also for determination without notice by way of forfeiture; see [17.1]. The provision occasionally found in leases whereby the giving of a period of notice instead of re-entry is stipulated for as a means of forfeiting the lease must not be confused with the reference frequently made in well drawn leases to the giving where appropriate of the notice required by the Conveyancing Act 1919 (NSW) s 129; Property Law Act 1974 (Qld) s 124; Landlord and Tenant Act 1936 (SA)

s 10; Conveyancing and Law of Property Act 1884 (Tas) s 15; Property Law Act 1958 (Vic) s 146; Property Law Act 1969 (WA) s 81.

Ejectment of overholding tenant [2.6] Where one who has been a lessee of premises and whose term has come to an end remains in possession against the will of his or her landlord, that person is a trespasser: Fry v Metzelaar [1945] VLR 65 at 67. Where such a person remains in possession without either the assent or dissent of his or her landlord, that person is a tenant at sufferance (Fry v Metzelaar, above, at 67). The distinction is without importance so far as the recovery of possession is concerned, for even if the former lessee has remained in possession without the dissent of the lessor and so become a tenant at sufferance, he or she may be ejected without any previous notice to quit or demand of possession: Natural Gas & Oil Corporation Ltd v Byrne (1951) 68 WN (NSW) 207 at 213. Except in the case where the lease itself provides for the creation of some further tenancy, the lessor is accordingly, where the lessee remains in possession after his or her term has come to an end, entitled to recover possession without notice to quit or demand of possession, unless there has been some subsequent creation of a further tenancy either by express agreement or by conduct from which an agreement is to be inferred; see also [2.4].

Character of tenancy from year to year [2.7] A tenancy from year to year, also known as a yearly tenancy, is merely an example of a periodic tenancy. In the case of a periodic tenancy, there is not a new tenancy with the beginning of each recurring period, but a tenancy which continues indefinitely until termination: Amad v Grant (1947) 84 CLR 327 at 336; [1947] ALR 191; Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47; Gleeson v Richey [1959] VR 258 at 261; Bernays v Prosser [1963] 2 All ER 321; [1963] [page 60]

2 QB 592; see also Moore v Dimond (1929) 43 CLR 105 at 113 and 116–8; Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 80; Chan v Cresdon (1989) 168 CLR 242 at 248; Javad v Aqil [1991] 1 WLR 1007; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 392 and following; and Take Harvest Ltd v Liu [1993] AC 552 (PC).

Creation and determination of yearly tenancies [2.8] The creation (see also [2.9]) and termination of yearly tenancies was considered by the High Court in Chan v Cresdon (1989) 168 CLR 242 at 248 as follows: It is well settled that entry into occupation followed by payment of rent under an agreement for a future lease brings into existence a common law tenancy from year to year, so long as the payment of rent is referable to a yearly tenancy, as where it is for an aliquot part of a year: Dockrill v Cavanagh [(1944) 45 SR (NSW) 78 at 80]. Such a tenancy determines on the expiration of the lease agreed upon and it is on the terms and conditions of the agreement so far as they are consistent with a tenancy from year to year (Moore v Dimond [(1929) 43 CLR 105 at 113, 118–122]; York House Pty Ltd v Federal Commissioner of Taxation [(1930) 43 CLR 427 at 436]; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [(1985) 157 CLR 17 at 25–26]). At common law the tenancy from year to year was liable to termination by notice to quit before the expiration of the term contracted for: Moore v Dimond [(1929) 43 CLR at 113]. A similar tenancy from year to year arises from entry into occupation and payment of rent under an informal lease, including an unregistered lease of land under the provisions of the Act: Moore v Dimond [(1929) 43 CLR at 113–114]; Carberry v Gardiner [(1936) 36 SR (NSW) 559 at 570]. This tenancy is an implied or imputed tenancy. As Patteson J noted in Doe d Thomson v Amey [(1840) 12 Ad & E 476 at 480 [113 ER 892 at 893–894]]: ‘[T]he terms upon which the tenant holds are in truth a conclusion of law from the facts of the case, and the terms of the articles of agreement.’ In Moore v Dimond [(1929) 43 CLR at 114],

Knox CJ, Rich and Dixon JJ cited this statement with evident approval. The judgment of Knox CJ, Rich and Dixon JJ in Moore v Dimond, above, examined the basis for the creation of a yearly tenancy by ‘entry into occupation and payment of rent under an informal lease’, and indicated the extent of the relevant presumptions of law: see also Javad v Aqil [1991] 1 WLR 1007 (CA). Their Honours said, at 43 CLR 116–17: In Preston’s edition of Watkins’ Principles of Conveyancing (1820) he says: ‘All leases made generally and not for any particular period, are, by construction of law, leases from year to year.’ This was recognized by Cozens-Hardy J in Low v Adams [(1901) 2 Ch 598 at 601]: ‘A general occupation of land was, as long ago as the Year-Books, held to be an occupation from year to year.’ In principle there appears to be no reason why the circumstances that the rent paid under an agreement for a term of five years is weekly should displace this presumption in favour of the yearly tenancy. The doctrine which justifies reference to the period of the rent in order to ascertain the term no doubt is that the rent is a compensation for the land, and the parties have so understood it. A quarterly payment thus implies a yearly tenancy because it is part of the compensation for a year’s holding. When the parties agree for a five years’ holding with weekly [page 61] payments of the compensatory rent, their intention is not that each week’s rent shall represent a distinct and therefore terminable holding of a week. The weekly rent is part of the compensation for the entire period. Where the intention of the parties is to hold for a greater duration than a yearly tenancy would give them, and this intention fails because of its want of appropriate expression or of formal demise, the presumption or assumption that a general holding is from year to year supplies the term. It should, perhaps, be added that the conclusion which has been

thus reached appears to be supported by the views adopted in four of the Australian States in relation to the implication of tenancies from year to year. (See Ex parte Murphy [(1856) 2 Legge (NSW) 976]; Bloomfield v Bloomfield [(1893) 9 NSW WN 188]; Bank of Victoria v M’Hutchison [(1881) 7 VLR (L) 452]; Box v Attfield [(1886) 12 VLR 574; 8 ALT 45]; Morison v Edmiston [(1907) VLR 191; 26 ALT 148]; Beattie v Fine [(1925) VLR 363; 47 ALT 19]; Marshall v Coupon Furnishing Co [(1916) SR (Q) 120 at 125]; Styles & Co v Richardson [(1915) 17 WALR 81].) It follows that at law, whatever may be the position in equity, the respondent would be considered a tenant from year to year. As the last sentence of this passage indicates the position at law and the position in equity may be quite different. An agreement for lease may have produced a lease for a fixed term in equity (see [4.1] and following) though at law it is a yearly tenancy: see also 43 CLR 112, and [2.15]. As to the creation of yearly tenancies, see also [2.9]–[2.12]. A landlord (and, it follows, a tenant) cannot covenant not to give a notice to quit at all, though a covenant not to give a notice for a fixed, certain, period of time is valid: Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 393–5; and see [1.5]. See also Take Harvest Ltd v Liu [1993] AC 552; and [1.6]. A tenancy from year to year differs from the lesser periodic tenancies in that the period of notice required for its determination is not the recurring period (a year), but only half a year: Landale v Menzies (1909) 16 ALR 217; 9 CLR 89 at 101. The notice must expire at the end of a year of the tenancy, but this requirement is regarded as satisfied, not only in cases where the tenant is in terms required to quit on the last day of the year, but also in cases where he or she is required to quit on the anniversary of the commencement of the year, provided that in the latter case no language is used which will not permit the notice to be construed as requiring the tenant to quit at the first moment of the anniversary. See Sidebotham v Holland [1895] 1 QB 378; Bathavon Rural District Council v Carlile [1958] 1 All ER 801; [1958] 1 QB 461, and the other decisions cited in [20.5] in relation to the lesser periodic tenancies. Section 32(2) of the Landlord and Tenant Act 1958 (provisions repealed as from 1

September 2012 — see LL&T Comparative Table), whereby in the case of the summary proceedings to recover possession in a magistrates’ court under Pt IV of the Act a notice to quit shall not (unless otherwise expressly agreed) be invalid by reason only of the fact that it expires on a day other than the day of expiry of a recurring period, has no application to tenancies from year to year; the provision applies only to periodic tenancies the [page 62] recurring period of which does not exceed one month: see Conveyancing Act 1919 (NSW) s 127; Landlord and Tenant Act 1899 (NSW) s 22A; Property Law Act 1974 (Qld) ss 129, 131, 133(2); Property Law Act 1969 (WA) s 72.

Yearly tenancy presumed where tenant holds over [2.9] A lessee who remains in possession after the expiration of a lease for a term without the assent or dissent of the lessor is a tenant at sufferance: Natural Gas & Oil Corporation v Byrne (1951) 68 WN (NSW) 207: and see Longrigg, Burrough and Trounson v Smith [1979] 2 EGLR 42 (CA). In certain circumstances the lessee will, once rent is accepted by the lessor, become a tenant from year to year (but see the New South Wales, Queensland and Western Australian legislation referred to in [2.14]). Unless the parties have agreed otherwise, the notice required to determine a yearly tenancy is half-ayear’s notice expiring at the end of a year of the tenancy: Landale v Menzies (1909) 16 ALR 217; 9 CLR 89 at 101. For these reasons, an overholding clause is inserted in well drawn leases. In Hamilton v Porta [1958] VR 247 the lease contained a clause in the following terms: Provided always that no overholding … shall be construed as creating a tenancy from year to year, but that notwithstanding the failure of the tenant to vacate the premises upon expiration of the paid term or of the landlord to require possession at such expiration or payment and receipt of rent by the landlord and tenant respectively the tenant’s

occupancy or possession of the leased premises after the expiration of the said term may be determined by either the landlord or the tenant at any time upon one month’s written notice … Herring CJ stressed that this clause did not speak on the question whether a new tenancy was to be inferred after the expiration of the term. That was a question which could be determined only by reference to the intention of the parties, with regard to which no help could be derived from the terms of the clause. The effect of the clause was merely that in the event of an overholding after the expiration of the term from which a new tenancy was to be inferred, such new tenancy would, in the absence of any agreement to the contrary between the parties, be terminable on a month’s notice on either side. The possibility of the existence of a yearly tenancy is in practice often overlooked in proceedings for the recovery of possession from a tenant who has held over after the expiration of a lease for a fixed term; see also [2.4].

Holding over after short terms [2.10] The authorities conflict on the question when a yearly tenancy is created as the result of the tenant’s holding over. It is clear that the doctrine of a presumed yearly tenancy applies not only where the term was for a period of years, but also where it was for a year certain: Bank of Victoria v M’Hutchison (1881) 7 VLR (L) 452; Box v Attfield (1886) 12 VLR 574; Adler v Blackman [1952] 2 All ER 41; [1953] 1 QB 146. [page 63] In Box v Attfield the Full Court expressed the opinion that it was ‘sufficiently plain’ that the doctrine applied where the tenant held over after the expiration of a term of six months. In Solomon v Bray (1873) 7 SALR 128 the Full Court of South Australia held that to make a tenant holding over and paying rent a tenant from year to year, the original letting must have been for a year or an aliquot part of a year, or at a yearly rent; therefore, a letting for a period of 18 months at a weekly rental was not a letting from year to year, and where a

tenant held over beyond such period, and continued to pay rent as before, he or she was merely a weekly tenant. Cussen J in Beattie v Fine [1925] VLR 363 at 374, spoke of a yearly tenancy’s being implied ‘where a tenancy extends over one year or a number of years’: see also [2.4].

Holding over where weekly rent reserved [2.11] The second question which arises is whether a yearly tenancy is to be presumed only if the rent is paid by reference to a year, or at least an aliquot part of a year. Here the authorities undoubtedly conflict. In Adler v Blackman [1952] 2 All ER 41; [1953] 1 QB 146 the Court of Appeal held that it was essential to the presumption of a yearly tenancy that the rent should be expressed as an annual sum, though it might be payable half yearly, quarterly, monthly or even weekly. There was no presumption of a yearly tenancy where the rent was stated as a rent per week and not as an instalment of the rent fixed for a year. In that case the Court of Appeal applied the dictum of Maugham J in Ladies’ Hosiery & Underwear Ltd v Parker [1930] 1 Ch 304 at 328; [1929] All ER Rep 667, and disapproved the decision of Macnaghten J in Covered Markets Ltd v Green [1947] 2 All ER 140. Similarly, in Ball & Huntley v Laffin (1876) 10 SALR 6 at 12, Stow J said that whether the tenancy was created by entry under a void lease or an agreement for a lease, or by holding over after the expiration of a tenancy, and by payment of rent, in either case the question was whether the rent was paid with reference to a yearly holding, and that where the payment was a weekly one the tenancy ought not to be held to be from year to year. In Rowston v Sydney County Council (1954) 92 CLR 605 at 616, the Full High Court, in what would seem to be a mere dictum, said: As between the claimant council and the defendant appellant the rent has always been payable as a weekly sum not apparently referable to a year. If no more appeared it would be impossible at common law to regard the tenancy as one from year to year … But it must be borne in mind that the rent reserved by the reddendum in the lease was expressed as a yearly rent of £443 and so in proportion for any less period than a year payable by weekly payments of £8 l0s 5d to be

made in advance. If the £8 l0s 5d is considered as nothing but an instalment of a rent calculated as a yearly rent then the inference would at least be open, if not inevitable, that a tenancy from year to year was implied between the claimant council and the defendant. It is to be noted that £8 l0s 5d a week is not a true instalment of the rent of £443. A rent at the rate of £8 l0s 5d [page 64] a week calculated for 365 days would give a yearly rent of £444 6s. That perhaps is not a very important consideration. The South Australian Full Court has held that to make a tenant holding over and paying rent a tenant from year to year the original letting must have been for a year or an aliquot part of a year, or at a yearly rent. Therefore, a letting for a period of 18 months at a weekly rental, the tenant to pay rates and taxes, is not a letting from year to year, and where a tenant holds over beyond such period, and continues to pay rent as before, he or she is merely a weekly tenant: Solomon v Bray (1873) 8 SALR 128. In other cases it has also been said that for a yearly tenancy to be presumed the rent must be paid by reference to a year or an aliquot part of a year. See Dennis & Copley v Eddie [1952] VLR 92 at 99 where Sholl J referred to the question whether there must be payment of rent by reference to a year or an aliquot part of a year without expressing any opinion upon it. Such cases occur where a tenant overholds. In such cases payment or acknowledgment of rent constitutes evidence of the establishment of a tenancy, and the fact that the rent is paid by reference to a year, or aliquot part of a year, affords evidence of a tenancy from year to year: Moore v Dimond [1930] ALR 341, 43 CLR 105 at 114 (per Knox CJ, Rich and Dixon JJ). Similarly, in Re Weigall & Dawes’ Lease [1942] VLR 49, a case of a lease for three years at an annual rent payable monthly, O’Bryan J said, at 54, that the obligation imposed by a covenant in the lease did not rebut ‘the inference which would otherwise be drawn from mere continuance in possession and payment of rent by reference to an aliquot part of a year, viz, that the tenancy intended was one from year to year …’.

In Beattie v Fine [1925] VLR 363, Cussen J said, at 374: After a consideration of all these cases it is sufficient for me to say that where a tenancy extends over one year or a number of years, the agreement providing that the rent shall be payable in relation to some period which (though there is no word like ‘year’ or ‘annual’ used directly in connexion with the rent) is in fact an aliquot part of a year eg, monthly or quarterly and, the tenancy having expired, the tenant holds over with the consent of the landlord, and rent is paid and received in respect of such periods, the implication of law is, unless there is something to rebut it, that the tenant holds over as a tenant from year to year … I might be justified in stating the rule in wider terms, such as those used in some of the cases, but this is enough here. This judgment was referred to by Kitto J in Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 93; [1951] ALR 1054. In the same case Dixon CJ said, at CLR 66: There is little resemblance between such a case and the very many instances in which a person has been let into, or has retained, possession of land without any express contract, and the question is whether he is a tenant, and if so, for a term of what duration. Such cases occur when a tenant overholds; when a tenant for life has granted a lease in excess of his power and dies before its determination, and the remainderman allows the lessee to retain possession; when a mortgagor has granted a lease without statutory or other power; and when the terms of entry are too vague or uncertain to be [page 65] ascertainable. In such cases payment or acknowledgment of rent constitutes evidence of the establishment of a tenancy, and the fact that the rent is paid by reference to a year, or aliquot part of a year, affords evidence of a tenancy from year to year. The existence and duration of the tenancy in such a case were, however, questions of fact.

Webb J at CLR 86 referred to the creation of a tenancy from year to year where a tenant held over and paid rent: see further Permanent Custodian Trustees v Payne [1964] NSWR 1098; Queensland Television Ltd v Federal Commissioner of Taxation (1969) 1 ATR 419; 119 CLR 167 at 175. If a yearly tenancy will be implied only where rent is paid by reference to a year or an aliquot part of a year, then, since a week is not an aliquot part of a year (Dennis & Copley v Eddie, above), there will be no presumption of a tenancy from year to year where a lessee holds over and continues to pay rent after the expiration of a lease reserving a weekly rent. In Edwards v Horrigan; Ex parte Horrigan [1923] St R Qd 8, the tenant held over after the expiration of a void lease for five years at the rent of 18s per week. It was held by the Full Court of Queensland that, though a tenancy from year to year could arise by implication of law only in cases where the rent was payable with reference to a yearly tenancy, yet in the instant case the rent was clearly payable with reference to such a tenancy because the agreement provided clearly that the weekly rent was to be payable throughout the five years. In Bank of Victoria v M’Hutchison (1881) 7 VLR (L) 452, there was a lease for one year at a rent of 30s per week. The tenant held over after the expiration of the term at a weekly rent, which was raised to 40s shortly after the expiration of a second year. The court held, rejecting the argument that the rent must be payable for periods referable to a year or an aliquot part of a year, that the justices were at liberty to infer a tenancy from year to year. Five years later the Full Court held, following Bank of Victoria v M’Hutchison, above, that if, after the expiration of a tenancy for a year certain at a weekly rent, the tenant is allowed to remain in possession, still paying the same rent, the presumption is that the continuing tenancy is a yearly one: Box v Attfield (1886) 12 VLR 574. It may be noted that in Moore v Dimond (1929) 43 CLR 105; [1930] ALR 341, Isaacs J at CLR 122, expressly approves Bank of Victoria v M’Hutchison and Box v Attfield, and Knox CJ, Rich and Dixon JJ, at CLR 117, refer to the decisions with apparent approval. Note also, however, that a passage in the joint judgment, at CLR 114, suggests that the presumption of a yearly tenancy arises only where the rent is paid by reference to a year or an aliquot part of a year. In Fitzgerald v Button (1890) 16 VLR 561, a tenant for life granted a lease for 21 years at a yearly rent payable weekly. Upon his death the

representatives of the remainderman, not knowing the terms of the lease, and being refused inspection thereof, wrote to the tenant asking him to pay the rent weekly to them, and he continued thereafter to do so for a considerable time, until the representatives gave him a week’s notice to quit. Holroyd J dismissed an action for the recovery of the premises, on the ground that, assuming the lease to have terminated upon the death of the tenant for life, the receipt [page 66] of rent by the representatives had constituted a tenancy from year to year between them and the lessee. This decision was affirmed by the Full Court: (1891) 17 VLR 52. It should be noted that in this case the lease reserved a yearly rent of £234, payable by weekly payments of £4 l0s. Accordingly, even on the view of the law taken by the Court of Appeal, a yearly tenancy might have been presumed; for in Adler v Blackman, it was recognised that, provided that an annual rent is reserved, the fact that the rent is payable weekly will not prevent the presumption of a yearly tenancy from arising. The case of Fitzgerald v Button is therefore of little assistance for present purposes although one observation made during the argument at first instance is of interest. Counsel for the defendant made the following submission: Upon the death of the tenant for life that lease terminated, but the tenancy was allowed to continue upon the same terms precisely. It must therefore be presumed to be a tenancy from year to year, the fact of the rent being payable weekly not affecting the presumption: Bank of Victoria v M’Hutchison, followed Box v Attfield, which also shows that the same presumption applies where the lease was originally for an aliquot part of a year. This moved Holroyd J to remark, ‘I do not think there is the slightest doubt of those two cases being correct’: (1890) 16 VLR 561 at 563. The decisions of the Full Court in Bank of Victoria v M’Hutchison and Box v Attfield were cited to the Court of Appeal in Adler v Blackman [1952] 2 All ER 41; [1953] 1 QB 146 at 148. The Court of Appeal did not find it necessary to

consider its decision, and, indeed, did not even call upon counsel for the respondent. The result is that there is conflict between two decisions of the Full Court and a later decision of the Court of Appeal. This conflict was referred to by Adam J in Marshall v Burman (No 2) [1961] VR 161 at 166–7, his Honour finding it unnecessary to choose between the two lines of authority. For a discussion of the current status in Australia of decisions of the English (and other) courts, see (1987) 61 ALJ 263.

No presumption in absence of necessary intention [2.12] Where the restrictions of landlord and tenant rent control legislation, such as those which were imposed by Pt V of the Landlord and Tenant Act 1958 (Vic) apply (provisions repealed as from 1 September 2012 — see LL&T Comparative Table), if a landlord takes no steps to oust the tenant at the expiration of the term, but merely leaves the tenant in possession and accepts rents after the expiration of the term, no inference is to be drawn against the landlord that he or she intends to create a tenancy from year to year, for it cannot be said that he or she has voluntarily abstained from turning the tenant out: Morrison v Jacobs [1945] KB 577; Bowden v Rallison [1948] 1 All ER 841 at 843; Christopher v Wright [1949] VLR 145; Hamilton v Porta [1958] VR 247; Arnold v Mann (1957) 99 CLR 462; [1957] ALR 1207: and see Javad v Aqil [1991] 1 WLR 1007 at 1016–18 and Easts Van Villages Pty Ltd v Minister Administering the [page 67] National Parks and Wildlife Act [2001] NSWSC 559; (2001) Aust Contract R ¶90-132. These decisions apply where no more appears than that the lessor might or might not have left the lessee in possession, not because he or she intended to create a tenancy from year to year, but because the lessee’s rights were restricted by legislation; the decisions have no application where it appears that the landlord’s reason for leaving the lessee in possession was not

the existence of the statutory restrictions on eviction: Dennis & Copley v Eddie at 100; see also [2.4].

Periodic tenancy for less than a year [2.13] The tenancy from year to year, which is one example of a periodic tenancy, has been dealt with in [2.7]–[2.11]. Periodic tenancies are tenancies having a recurring period; they are tenancies for a series of indefinite periodic terms, and continue indefinitely until they are determined: Bootes v Staples & Co [1916] GLR 530; Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47; Fink v McIntosh [1946] VLR 290 at 292; see also [2.7]. However, a periodic tenancy must be determinable and it is not possible for either party to covenant not to give a notice to quit at all as the result is an uncertain lease term: see Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 393–5; and see [1.5]. Subject to express agreement, a periodic tenancy does not determine upon the tenant’s death: Youngmin v Heath [1974] 1 WLR 135. The periodic tenancies for less than a year which are commonly found are tenancies from quarter to quarter, tenancies from month to month and tenancies from week to week. A fortnightly tenancy may be created (Munro v Dare [1934] St R Qd 332; Foenander v Dabscheck [1954] VLR 38), as may a daily tenancy (Butcher v Bowen [1964] NSWR 36; 80 WN (NSW) 1520) and a half-yearly tenancy (Re Midland Railway Co’s Agreement [1970] 1 Ch 568, affirmed [1971] 2 WLR 625). Similarly, there may be a letting for successive periods of 364 days: Land Settlement Association v Carr [1944] 1 KB 657; [1944] 2 All ER 126; and see EWP Ltd v Moore [1992] QB 460 at 468–9. The parties may, it would seem, select any period they please. A monthly tenancy properly so called is a tenancy the recurring period of which is a calendar month, not a lunar month of 28 days: for example, the monthly periods might extend from the 25th day of one month to the 24th of the next month: Amad v Grant (1947) 74 CLR 327 at 348; [1947] ALR 191; Willshire v Dalton (1948) 65 WN (NSW) 54. A monthly tenancy in the accepted sense is not to be confused with a tenancy the recurring period of which is only 28 days. Such a tenancy may be described as a lunar monthly tenancy, or as a tenancy from four weeks to four weeks: Bootes v Staples & Co [1916] GLR 530, or as a four-weekly tenancy:

Lemon v Lardeur [1946] KB 613; [1946] 2 All ER 329; Rae v Clifford (1893) NZLR 257. In the case of a weekly tenancy it will often be found that the tenant pays rent every four weeks. Where a weekly rent is reserved, and the rent is by express or implied agreement payable every four weeks, the tenancy may be a mere weekly tenancy, or a [page 68] weekly tenancy determinable by four weeks’ notice, or a lunar monthly tenancy. The distinction between a weekly tenancy determinable by four weeks’ notice and a lunar monthly tenancy is a somewhat fine one. A weekly tenant who pays rent monthly in advance is entitled to a month’s notice: Cohen v Milner [1960] VR 499 at 503.

Kind of periodic tenancy dependent upon intention [2.14] What kind of periodic tendency has been created is a question to be answered by reference to the intention of the parties, and is one of fact: Fitzgerald v Button (1891) 17 VLR 52 at 53. If nothing more appears than that a weekly rent is paid, the inference is that the tenancy is a weekly tenancy: Adams v Cairns (1901) 85 LT 10; 17 TLR 662; Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 at 550. This is an example of a more general rule whereby the period by reference to which rent is fixed affords some evidence of the nature of the tenancy. Although entry into possession and payment of rent calculated by reference to a year, a month or a week are not legally conclusive of a yearly, monthly or weekly tenancy and amount only to evidence of such a tenancy, they are facts which according to circumstances may afford such evidence that any other conclusion would be unreasonable: Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 66; [1951] ALR 1054; (per Dixon J); compare the remarks of Williams J at CLR 81, and Kitto J at CLR 90; Cohen v Milner [1960] VR 499; D’Silva v Lister House Development Ltd [1971] 1 Ch 17; [1970] 1 All ER 858.

New South Wales, Queensland and Western Australia have enacted a special provision to deal with the implication to be made where a lease is implied by payment of rent. Conveyancing Act 1919 (NSW) s 127(1) provides: No tenancy from year to year shall, after the commencement of this Act, be implied by payment of rent; if there is a tenancy, and no agreement as to its duration, then such tenancy shall be deemed to be a tenancy determinable at the will of either of the parties by one month’s notice in writing expiring at any time. Property Law Act 1974 (Qld) s 129(1) and Property Law Act 1969 (WA) s 71 are in similar terms. An example of the application of the Queensland provision is provided by Palmdale Insurance Ltd v Sprenger [1988] 1 Qd R 414; and see Leitz Leeholme Stud Pty Ltd v Robinson (1977) 2 NSWLR 544. There is also an equivalent provision in New Zealand (Property Law Act 2007 s 210) which is discussed in Beattie v Lyttleton Borough [1966] NZLR 65.

Tenancy at will [2.15] A tenancy at will, though called a tenancy, is unlike any other tenancy except a tenancy at sufferance, to which it is next of kin. The tenancy is terminable at the will of either party: see [2.19]. It has properly been described as a personal relation [page 69] between the landlord and his or her tenant; it is determined by the death of either of them or by any one of a variety of acts, even by an involuntary alienation, which would not affect the subsistence of any other tenancy. It is true that in some cases the relation of tenant at will may be expressly created by contract (Manfield & Sons Ltd v Botchin [1970] 2 QB 612; 3 All ER 143) but that is an exceptional case, and usually the tenancy at will is founded on an implied contract: Wheeler v Mercer [1957] AC 416 at 427; [1956] 3 All ER 63D. There are very many decisions on particular facts dealing with the

question whether a tenancy at will has been created by implied agreement. In practice it is at times necessary to make a choice between five possible relations. The relationship may be that only of licensor and licensee or there may have been created a tenancy at sufferance, a tenancy at will, one of the lesser periodic tenancies or a tenancy from year to year. The choice is often not an easy one. The fact that the rent was reserved at an annual rate was held to override the expressed intention of the parties to create a tenancy at will in Manfield v Botchin. Whether in modern times the tenancy at will has suffered a change in its purpose and function was considered in Heslop v Burns [1974] 1 WLR 1241 at 1253. A tenancy at will arises where there has been an agreement for a lease and an occupation without payment of rent which subsists until it is determined or the tenant pays rent, at which time he or she becomes a tenant from year to year: Moore v Dimond (1929) 43 CLR 105 at 112–13. Although the position in equity may be otherwise (see [4.1]) it seems that this represents the position at law. This is made clear in Moore v Dimond at 43 CLR 112 (per Knox CJ, Rich and Dixon JJ): As the agreement for a lease was not a demise, but an executory contract to grant a lease, it could not operate to create an interesse termini [as to which, see [1.16]] and, immediately upon the effluxion of the prior term, the respondent became at law (although of course not in equity) a tenant at will only. A tenancy at will may also arise as a result of a failure to comply with the statutory requirements as to writing applicable to leases: see [1.6], and see Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 (CA). In Kellow-Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 the Victorian Court of Appeal found, in circumstances where the parties had been negotiating a formal lease but had not finally agreed its terms, that a tenancy at will only had arisen: see [2.16]. It is not necessarily inconsistent with a tenancy at will for an intending tenant holding at will to pay compensation to the owner for the use and occupation of the land: see the principle in this respect as stated by Dixon J in Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 65–6, referred to in National Mutual Life Nominees Ltd v Travellers (NSW) Pty Ltd [1997] ANZ ConvR 249 (CA(NSW)); BC9604670 and in Leask v Farlmist Pty Ltd [1999] ANZ ConvR 566 (CA(NSW)) at 568; BC9806783 at 11 (per Sheller JA); and see Kellow-

Falkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620; and also [2.16]. The judgment of Mahoney ACJ in National Mutual [page 70] Life Nominees Ltd v Travellers (NSW) Pty Ltd indicates that the courts may now be more likely to take a more liberal approach to the whole question of entitlement to compensation, rent or payments analogous to rent for use and occupation of land in light of the trend towards viewing leases more as contractual arrangements rather than proprietary interests (see BC9604670 at 3 and 4). In any event it was decided by all members of the court (the other members of which were Sheller and Clarke JJA) that no tenancy at will arose as between the landlord and the occupant as its possession was as a suboccupant from the tenant only. For a consideration of the authorities in relation to actions for use and occupation of land more generally, see Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6; BC200600331, discussed in Croft, Retail Leases Victoria, [130,075]. The position at law and in equity also diverged in Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333. In that case an option to renew the lease had been exercised but no formal lease entered into as a result of its exercise. The tenant remained in possession, paying rent. It was held that a lease in equity for a term of three years was created in the same terms as though the lease had been formally renewed. The position at law was that the tenant had contractual rights and a tenancy at will determinable on one month’s notice. A tenancy at will may also be created as a result of a failure to obtain consent of the appropriate person as required by a statutory power of leasing or subleasing: see Palmdale Insurance Limited v Sprenger [1988] 1 Qd R 414; and also [15.16].

Entry during negotiations for a lease [2.16] Two frequently recurring situations are where one party is permitted

to go into occupation during negotiations for a lease and where a purchaser under a contract of sale is allowed to go into occupation prior to final settlement. In Turner v York Motors Pty Ltd (1951) 85 CLR 55 Dixon CJ said (at 65): The first of these five views [that the defendants may have been tenants at will only] is based upon the notion that the defendants went into possession of the premises provisionally pending agreement upon and the execution of a lease and that from beginning to end the defendants’ possession remained of this character so that no fixed or periodical term arose and the defendants held as tenants at will only. If an intending lessor lets the intending lessee into occupation of the premises in anticipation of an agreement for a lease or of a lease, simply so that he may temporarily occupy while they proceed to negotiate concerning the conditions upon which the intending tenant shall hold, it is of course true that in the meantime the intending lessee holds as a tenant at will only. It is not inconsistent with the intending lessee’s continuing so to hold that he pays the landowner some compensation for the use of the land and indeed if it is not intended that his occupation of the land shall be gratuitous the owner may recover from him upon a quantum valebat for use and occupation. But the reservation and receipt of a periodical rent as such affords strong evidence of the creation of a periodical term. ‘Where parties enter under a mere agreement for a future lease they [page 71] are tenants at will; and if rent is paid under the agreement, they become tenants from year to year, determinable on the execution of the lease contracted for, that being the primary contract’ per Littledale J in Hammerton v Stead (1824) 3 B & C 478 at 483; 107 ER 811 at 813. The case where the parties have not actually reached an agreement for a future lease depends upon the same principle, that is upon the implication from the receipt of a compensation for the use of

the land, but the inference to be drawn from the circumstances may be less certain. And see Leask v Farlmist Pty Ltd [1999] ANZ ConvR 566 at 568; BC9806783 at 11 where this passage was applied by Sheller JA, with whom the other members of the New South Wales Court of Appeal (Beazley JA and Fitzgerald AJA) agreed. Nevertheless, there is no presumption in this respect. The proper characterisation of the kind of tenancy created depends on the intention of the parties. Where parties are negotiating for a proposed lease and the prospective tenant is allowed into possession on payment of rent pending negotiations, the result may not be a periodic tenancy if this is merely an interim measure and lease terms are not agreed: see Javad v Aqil [1991] 1 WLR 1007 at 1012–13 where it was held that a tenancy at will was created. Similarly, in KellowFalkiner Motors Pty Ltd v Nimorakiotakis (2000) V ConvR ¶54-620 the Victorian Court of Appeal found, in circumstances where the parties had been negotiating a formal lease but had not finally agreed its terms, that a tenancy at will only had arisen; absent agreement and any equitable estoppel: as to the latter, see also [1.15] and, for a discussion of the decision and as to the extent to which statutory and general law requirements in relation to good faith in negotiations may be applicable, see (2000) 8 APLJ 172 (Redfern). The difficulty for a person in occupation of premises negotiating formal lease terms where there is no ‘preliminary’ agreement for lease applying between them is highlighted in the judgment of Charles JA (with whom Ormiston and Buchanan JJA agreed) in the Kellow-Falkiner Motors case (at 64,443–4): [39] In this Court, and also before the trial judge, Mr Porter placed great reliance upon the decision of the Court of Appeal in Javad v Aqil [[1991] 1 WLR 1007]. In that case the plaintiff entered into negotiations to lease his premises to the defendant, who had lost his place of business and needed to store stock elsewhere for his leather goods manufacturing business. The plaintiff allowed the defendant to move into possession on payment of £2,500, being one quarter’s rent in advance, even though the terms of the lease had not been agreed. Negotiations continued between the parties on the terms of the proposed lease and the defendant paid a further two quarters’ rent in

the interim. The parties were unable to agree on the terms of the lease and the plaintiff gave the defendant two weeks’ notice to quit. The defendant refused to leave, claiming that he had a periodic tenancy arising out of his payment of the rent and the plaintiff’s acceptance of it. [40] The plaintiff brought proceedings claiming possession, which was ordered to be given up by the trial judge. The defendant appealed. Dismissing the defendant’s appeal, Nicholls, LJ (with whom Mustill and Ralph Gibson, LJJ agreed) made the following observations [[1991] 1 WLR 1012–3], all of which bear on the present dispute — Where parties are negotiating the terms of a proposed lease, and the prospective tenant is let into possession or permitted to remain in possession in advance [page 72] of, and in anticipation of, terms being agreed, the fact that the parties have not yet agreed terms will be a factor to be taken into account in ascertaining their intention. It will often be a weighty factor. Frequently in such cases a sum called ‘rent’ is paid at once in accordance with the terms of the proposed lease; for example, quarterly in advance. But, depending on all the circumstances, parties are not to be supposed thereby to have agreed that the prospective tenant shall be a quarterly tenant. They cannot sensibly be taken to have agreed that he shall have a periodic tenancy, with all the consequences flowing from that at a time when they are still not agreed about the terms on which the prospective tenant shall have possession under the proposed lease, and when he has been permitted to go into possession or remain in possession merely as an interim measure in the expectation that all will be regulated and regularised in due course when terms are agreed and a formal lease granted.

Of course, when one party permits another to enter or remain upon his land on payment of a sum of money, and that other has no statutory entitlement to be there, almost inevitably there will be some consensual relationship between them. It may be no more than a licence determinable at any time, or a tenancy at will. But when and so long as such parties are in the throes of negotiating larger terms, caution must be exercised before inferring or imputing to the parties an intention to give to the occupant more than a limited interest, be it licence or tenancy. Otherwise the court would be in danger of inferring or imputing from conduct, such as payment of rent and the carrying out of repairs, whose explanation lies in the parties’ expectation that they will be able to reach agreement on the larger terms, an intention to grant a lesser interest, such as a periodic tenancy, which the parties never had in contemplation at all. See also Hagee Ltd v A B Erikson & Larson (A Firm) [[1976] QB 209 at 217]. [41] I agree, with respect, with the observations of Nicholls, LJ in Javad. In the context of an alleged tenancy by estoppel, this cautious approach is also consistent with the well-established proposition that for a representation to be effective in founding an estoppel it must ordinarily be clear and unambiguous: Low v Bouverie [[1891] 3 Ch 82]; Woodhouse A C Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [[1972] AC 741, per Lord Hailsham of St Marylebone LC at 755–6]; Olga Investments v Citipower Ltd [[1988] VR 485 at 499]. See further [2.17] in relation to entry under a contract of sale and, in relation to tenancies at will more generally, [2.15].

Entry under contract of sale [2.17] In the case of sales of land, the purchaser under a ‘cash’ contract is at times let into possession prior to settlement, and in such cases it is necessary to consider the particular facts in order to determine the nature of the

relationship; sometimes there is a special condition in the contract of sale; at other times the agreement rests upon correspondence and conversations between the respective solicitors for the parties. ‘Terms’ contracts of sale usually contain an attornment clause which expressly creates a periodic tenancy. Similarly, where the purchaser under a ‘cash’ contract is let into [page 73] possession pending settlement, it is common for a weekly or other periodic tenancy to be expressly created. In the absence of an attornment clause or some other express provision creating a periodic tenancy, a purchaser who is let into possession under a contract of sale of land becomes at law a tenant at will to his or her vendor, and cannot be ejected by his or her landlord without a previous demand of possession. The tenant has at the same time an equity which will not allow his or her vendor to determine the tenancy at will except by converting it into an estate in fee simple, or pursuant to some term of the contract itself, or by exercising a right to rescind the contract at law: Sandhurst Mutual Permanent Investment Building Society v Gissing (1889) 15 VLR 329 at 331; Nicholas v Smith [1956] VLR 416; Kinleyside v Irwin [1961] WAR 169. In Wheeler v Mercer [1956] 1 QB 274 at 284; [1955] 3 All ER 455, Denning LJ (as he then was), made the following observation concerning an argument of counsel: He took the case of a person who goes in under a treaty for purchase, and then the sale goes off. Such a person has been stated in the old books to be a tenant at will. Is he to be entitled to the benefit of the Act? I think not, for the simple reason that such a person is not a tenant at will at all. He is only a licensee: see Errington v Errington and Woods [1952] 1 KB 290, 297; 1 All ER 149. On appeal, this observation did not find favour, and, in the course of making the leading speech, Viscount Simonds said ([1957] AC 416 at 425) said: For there must be many cases, for example, where a purchaser has been let into possession before completion without any special

stipulation and is therefore at law a tenant at will, where it would be manifestly unjust to grant any tenancy. I must observe that, notwithstanding the observation of Denning LJ and the reference to Errington v Errington I cannot but regard the example that I have given as a typical case of a tenancy at will. A contract of sale which entitles the purchaser to immediate possession creates a tenancy at will: Tropical Traders Ltd v Goonan (1964) 111 CLR 41; [1964] ALR 585 at 591. As to whether a person who is permitted to occupy premises under a contract of sale or in anticipation of the grant of a lease is a tenant at will, see further Kater v Kater (1960) 77 WN (NSW) 873; on appeal (1960) 104 CLR 497; [1960] ALR 418; Baikie v Fullerton-Smith [1961] NZLR 901; Barraclough v Konnecke [1962] NSWR 1262; 79 WN (NSW) 821. As to whether, in the absence of agreement, a purchaser who is let into possession prior to completion of the contract of sale is liable to pay rent, see [11.13].

Encroachments by lessee [2.18] Where the tenant, during the currency of his or her tenancy takes (adverse) possession of land, whether or not immediately adjacent to the demised premises and whether or not the land is waste or belongs to the landlord or a third party, there is a presumption that the land so taken is part of the holding belonging to the landlord unless the tenant, during the term, communicates to the landlord some disclaimer of the landlord’s title: Smirk v Lyndale Developments Ltd [1975] Ch 317. The [page 74] old authorities dealing with encroachments by the tenant onto land other than that of the landlord, are discussed by Pennycuick V-C in the above case.

Termination of tenancy at will

[2.19] A tenancy at will is terminable at the will of either party: Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 299; Binions v Evans [1972] Ch 359; Greco v Swinburne Ltd [1991] 1 VR 304 at 313; Colchester Borough Council v Smith [1991] Ch 448 at 481–3; Javad v Aqil [1991] 1 WLR 1007 (CA). The authorities in relation to the termination of a tenancy at will were very usefully considered by Parker J in Caltex Properties Ltd (in liq) v Love (1997) 95 LGERA 132; BC9702078 at BC 21–24 (SC(WA)): It was submitted by counsel for the plaintiff that if I found a tenancy that was determinable only on reasonable notice then the tenancy was not a tenancy at will as a tenancy at will is one that is determinable instanter. I was referred to Landale v Menzies (1909) 9 CLR 89 in this regard. In Landale v Menzies the court was concerned with ascertaining the rights of the parties under an agreement relating to a ‘give and take’ fence between two pastoral properties separated by a watercourse. The headnote to the decision could be taken as suggesting that three members of a four member court agreed that a tenancy determinable on reasonable notice can be a tenancy at will. A careful reading of the reasons given by the members of the court reveal, however, that is not entirely accurate. Both Griffith CJ at 99 and Barton J at 111 held the agreement had an implied term that it was determinable only on reasonable notice, but only Barton J at 112–113 was unequivocal in finding the tenancy was one at will. It is apparent from Griffith CJ’s reasons at 102, 103 that he preferred the view that the agreement was a tenancy at will, but his Honour’s reasons must be taken as leaving it open whether the tenancy was one at will or one from year to year. At 102 his Honour said: For the reasons I have given I am of opinion that the plaintiff was, in point of law, lessee (whether at will or from year to year) … O’Connor J at 119 held that the agreement was a tenancy at will but was subject to a distinct undertaking that the will to terminate would only be exercised after reasonable notice had been given. Isaacs J at 130 held that is was a contradiction to speak of a tenancy at will determinable on reasonable notice. The view taken by Isaacs J has

been accepted as correct by Dixon J in Amad v Grant (1947) 74 CLR 327 at 345. Griffith CJ’s preference for the view that the agreement was a tenancy at will was no doubt based on historical notions of a tenancy at will. At 100–101 his Honour said: A contract for the exclusive occupation of land for a determinate period, however short, constitutes a lease: R v Morrish 32 LJMC 245. A period determinable at the will of either party is such a period. In such a case the lease is called at lease at will. And, in one sense, and perhaps in strictness every lease which is not for a term certain is a lease at will, although of late years the phrase is ordinarily used to describe a tenure under which the lessor may determine the lease instanter. But this was not the original idea of a lease at will. Griffith CJ then continued with a recitation of the historical development of a tenancy at will. In support of his conclusion that at a tenancy determinable on reasonable notice [page 75] is not a tenancy at will Isaacs J cited a nineteenth century case, Doe d Nicholl v McKaeg (1830) 10 B & C 721 [109 ER 618] at 723. The reasons of both Griffith CJ and Isaacs J reveal that the concept of a tenancy at will has not remained static. At the time Landale v Menzies was decided a tenancy at will had already evolved to the stage where it was considered to be determinable instanter: see Woodfall’s Law of Landlord and Tenant 17th edn (1902) at 252, so much was recognised by Griffith CJ in the passage cited above. It is for that reason that the preferable view is that expressed by Isaacs J. The views of the court in Landale v Menzies provide little guidance, however, in determining what is meant by a tenant at will in s 9 of the Limitation Act 1935. The terms of [the] section itself provide no guidance. The section, however, is almost identical to s 7 of the Real

Property Limitation Act 1833 (UK) (3 & 4 Will 4 c27). When an act, or a provision of an act, is enacted in similar terms to an English statute it is assumed the legislature knew of judicial interpretation of that statute or provision and intended that is should be interpreted the same way in Australia: National Phonograph Co of Australia Ltd v Menck (1908) 7 CLR 418 at 529 per O’Connor J; Townsville Harbour Board v Scottish Shire Line Ltd (1914) 18 CLR 306; Pearce v Kitchin (1931) 26 Tas LR 38. It is apparent from the discussion of the equivalent English provision in Woodfall’s Law of Landlord and Tenant 17th edn (1902) at 256–258 and the cases referred to therein, that in the English provision a tenant at will has been understood to mean a tenant holding under a tenancy determinable instanter; also see Colchester Borough Council v Smith [1991] Ch 448 at 483 per Ferris J. In my view that is the meaning which should be applied to s 9 of the Limitation Act 1935 for the reasons given. As indicated earlier in these reasons, implicit in the occupation agreement is a term that the agreement can be determined only on reasonable notice. Such a term is inconsistent with the notion of a tenant at will within the meaning of s 9 of the Limitation Act. That alone would also be sufficient to dispose of the defendants’ claim based s 9 of the Limitation Act. It is not possible for either party to agree not to give a notice of termination at all as the result would be an uncertain lease term: see Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 393–5; and see [1.5]. No period of notice is necessary for its determination (Stevenson v Mayor of North Melbourne (1890) 16 VLR 314 at 318), although, on termination by the landlord, the tenant has a reasonable time to enter and remove his or her goods, but not a right to exclusive possession for the purpose: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47. However, in Leask v Farlmist Pty Ltd [1999] ANZ ConvR 566 at 568; BC9806783 at 11, Sheller JA, with whom the other members of the New South Wales Court of Appeal (Beazley JA and Fitzgerald AJA) agreed, said that where the appellant had gone into occupation as a tenant at will at a particular rent per month and s 127(1) of the Conveyancing Act 1919 (NSW) applied (as to this and corresponding provisions in other states, see [1.6]) the

tenancy at will was terminable by a month’s notice expiring at any time, referring to Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 84; and similarly Wykes v Samilk Pty Ltd (1998) NSW ConvR ¶55-871 (CA) at 56,827–8 (per Sheller JA, with whom Beazley and Stein JJA agreed); and see Simmons v Liristis Holdings Pty Ltd (SC(NSW), Smart AJ, 7 February 2000, unreported (BC200000160)), [page 76] particularly at [58]–[67], referring to Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540; and see [2.15]. A tenancy at will may be determined by the lessor by an act inconsistent with the existence of the tenancy, as by demising the premises to a third person. Such an act, if done upon the land, is effective whether or not it is brought to the knowledge of the lessee; but if the act is done off the land it must be brought to the lessee’s knowledge: Griffin v Dunn (1878) 4 VLR (L) 419; Martin v Elsasser (1878) 4 VLR (L) 481. A tenancy at will is determined by the death of either party: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson; Wheeler v Mercer [1957] AC 416 at 427. The tenancy is not an interest which is capable of being assigned or sublet, and a purported assignment or subletting by the tenant which comes to the knowledge of the landlord will terminate the tenancy: Fink v McIntosh [1946] VLR 290 at 292– 3. It would seem that the issue, or possibly the issue and service, by the lessor of a writ claiming possession will suffice to determine a tenancy at will so as to enable possession to be recovered in the action commenced by the writ (Martinali v Ramuz [1953] 1 WLR 1196; City Mutual Life Assurance Society Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1); nonetheless, it would be prudent to make a demand of possession before issuing the writ: see Martin v Individual Homes Pty Ltd (FCA, Full Court, 18 May 2000, unreported (BC200003377)); see also [17.12].

Tenancy at sufferance

[2.20] The so-called tenancy at sufferance is not truly a tenancy. It cannot be created by contract and arises by implication of law; it wants the essential characteristics of all real tenancies and is, indeed, a mere fiction of the law: Fry v Metzelaar [1945] VLR 65 at 67; Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 at 550. A tenant on sufferance is one who entered by a lawful title and, after that has ceased, wrongfully continues in possession without the assent or dissent of the person entitled to the property. The tenancy arises, for example, where a tenant for a fixed term holds over after the expiration of the term without either the assent or the dissent of his or her landlord: Wheeler v Mercer [1957] AC 416; [1956] 3 All ER 631. But where one who has been a lessee of premises and whose term has come to an end remains in possession against the will of his or her landlord, he or she is not a tenant on sufferance, but a trespasser. See Fry v Metzelaar [1945] VLR 65 at 67; Anderson v Bowles (1951) 84 CLR 310 at 319; [1951] ALR 913; Natural Gas & Oil Corporation Ltd v Byrne (1951) 68 WN (NSW) 207 at 212–13.

Vesting of tenancy on death [2.21] Prima facie, a periodic tenancy or a term of years vests in the tenant’s personal representative upon his or her death: Mellows v Low [1923] 1 KB 522 at 525; [1923] All ER Rep 537; Youngmin v Heath [1974] 1 WLR 135; Francis Longmore & Co Ltd v Stedman [1948] VLR 322; see also [5.18].

[page 77]

3 Licences Nature of licences [3.1] A mere licence passes no interest in land, but only makes an action lawful which without it would have been unlawful: Thomas v Sorrell (1673) 124 ER 1098 at 1109; Banks v Transport Regulation Board [1968] ALR 445 at 448–9. It operates as a bare permission to do what would otherwise be an invasion of the licensor’s rights: Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605 at 630; [1937] ALR 273. The rights which are created are merely personal rights between the parties to a contract; such personal rights are binding solely upon the parties to the contract and do not run with the land: Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 300; [1944] ALR 89; and see [1.3] and [1.4] It follows that contractual doctrines apply; for example, the doctrine of frustration: Krell v Henry [1903] 2 KB 740; see National Carriers Ltd v Panalpina Ltd [1981] AC 675 at 693–4, 713–4; and see [6.10]. There are all sorts of licences, but basically each is an authority which prevents the individual to whom it is granted from being regarded as a trespasser on someone else’s property. Every licence is a limited permission both as to how long it will inure and as to what it allows to be done on the premises. It is contractual in origin and may be upon express or implied terms. It is a purely personal and temporary permission, a permissive occupation: Baikie v Fullerton-Smith [1961] NZLR 901 at 906. A licence to use premises for a particular purpose does not carry with it an implied warranty that the premises are fit for the agreed purpose: Morris-Thomas v Petticoat Lane Rentals

Ltd (1986) 53 P & CR 238 (CA). Nevertheless a court is not precluded from implying terms as to fitness or suitability for purpose of premises wherever necessary to give business efficacy to the contract granting the licence: Wettern Electric Ltd v Welsh Development Agency [1983] QB 796; and see [8.6], [10.1]. Something in the nature of a covenant for quiet enjoyment may be implied in favour of a licensee: Smith v Nottinghamshire County Council (1981) Times, 13 November (CA). [page 78] Considerable confusion of thought has resulted from the tendency to regard a licence as something having an existence apart from the contract creating it; as a proprietary right akin to but less than an interest in land. This tendency makes it easier to accept the view that it involves some interest in land which of itself will attract equity’s protection. In fact the word ‘licence’ merely epitomises certain rights arising under certain types of contract whereby permission is given to do something which would otherwise be unlawful: Dudgeon v Chie (1953) 55 SR (NSW) 450; proceedings on appeal are reported in (1954) 55 SR (NSW) 477, and (1955) 92 CLR 342. The contractual nature of licences may have significant consequences. For example, the courts will imply a term as to fitness or suitability for purpose of premises into contracts creating a licence to occupy land, but not into contracts for the sale of land or the grant of a lease: see Wettern Electric Ltd v Welsh Development Agency, above, and see [10.1].

Licence distinguished from lease [3.2] Unlike a licence, which does not create any estate or interest in the land: Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 300; [1944] ALR 89, a lease is not only a contract, but also that by which an estate or interest in the land demised is created: London and Northern Estates Co v Schlesinger [1916] 1 KB 20; [1914–15] All ER Rep 593; see further [1.2]. Sixty years ago it appeared to be settled that in order to determine whether what

had been granted was a lease (which created an estate or interest in the land) or a licence (which did not) it was necessary and sufficient to determine whether exclusive possession of the land had been given to the supposed lessee. A number of English decisions given in the course of the last 30 years unsettled the position, but since the House of Lords decision in Street v Mountford [1985] AC 809, it appears settled that exclusive possession is the touchstone of a lease; a position reaffirmed in Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 (HL), but, contrary to Australian authority, not necessarily with any requirement that it have a proprietary rather than mere personal aspect: see [1.2]. This test applies to both residential and business premises: see London and Associated Investment Trust plc v Calow [1986] 2 EGLR 80, but the indicia may vary as between residential and business tenancies: Dresden Estates Ltd v Collinson [1987] 1 EGLR 45. The authorities are discussed in [1.3], [1.4]; see further [3.3].

Matters not decisive [3.3] Often pains are taken by the parties, or at all events the party on whose behalf the instrument is drawn, to declare the nature of the relationship created. This declaration frequently takes the form of a statement to the effect that nothing in the document amounts to a demise. Such declarations are of very limited use. The use by [page 79] the parties of words like ‘rent’ and ‘tenancy’ is not decisive: Barnes v Barratt [1970] 2 QB 657; 2 All ER 483. Where persons were admitted to occupy suites of rooms in a house on the basis of a written agreement which provided, inter alia, ‘this licence does not constitute the relationship of landlord and tenant between the owner and the occupier and it is expressly agreed that no such relationship of landlord and tenant exists or shall exist by virtue of this agreement between the parties hereto’, it was held that the relationship between the owner and occupiers was not that of lessor and lessee: McCombe v

Smith (1950) 52 WALR 12. On the other hand, in many cases the characterisation of the relationship adopted by the parties in their agreement has been rejected by the court. For example, in Birt & Co Pty Ltd v Leichhardt Municipal Council (1951) 18 LGR 78, a deed which was described as a licence was held to exhibit a plain intention to confer upon the occupier the exclusive occupancy of the subject premises and to constitute a lease, despite the fact that the deed provided that nothing contained therein should amount to or be construed as a demise or as an agreement to demise the premises or any part thereof. For other cases in which it has been held that there was a lease despite the use of the word ‘licence’, see Wynyard Investments Ltd v Metropolitan Water Board (1953) 19 LGR 26; Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513; [1957] 3 All ER 563; Butcher v Bowen [1964] NSWR 36; 80 WN (NSW) 1520. The relationship is determined by the law, and not by the label which the parties choose to put on it: Addiscombe Garden Estates Ltd v Crabbe (QB) 528. In Danita Investments Pty Ltd v Rockstrom [1963] NSWR 1275; 80 WN (NSW) 1287, Ferguson J was confronted with an agreement which described the parties as licensor and licensee and provided that nothing which it contained should be deemed to constitute a tenancy between the parties or to constitute the relationship of landlord and tenant. His Honour held that the document was a lease, saying at NSWR 1277; WN 1288–9: Whether the document is a lease or a licence depends upon the intention of the parties to be gathered from its terms. For the claimant it is submitted that that intention is clearly evidenced by the use of the words licensor and licensee, and by the express terms of cl (4) above referred to. But in determining questions of this sort the court is not concerned with the legal relationship that in law arose from what they intended to do, which is a very different thing. This approach has been reaffirmed recently in Lewis v Bell (1985) 1 NSWLR 731 and by the House of Lords in Street v Mountford [1985] AC 809; see also Rental Bond Board v Bayman Development Pty Ltd (1985) 3 BPR 9670; National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97,322; Hamilton Island Enterprises Ltd v Croycom Pty Ltd [1998] ANZ ConvR 615; Q ConvR ¶54-509 (SC(Qld), Thomas J); Caltex Properties Ltd (in liq) v Love

(1997) 95 LGERA 132; BC9702078 (SC(WA), Parker J); and KJRR Pty Ltd v Commissioner of State Revenue [1999] 2 VR 174; see also the authorities and discussion at [1.3] and [1.4]. [page 80] An agreement which gave a person exclusive right of occupation of premises and all goods and chattels therein on payment of certain specified sums constituted that person a tenant in respect of the period of occupancy notwithstanding that the occupancy was stated to be ‘as caretaker’: Holden v Nuttall [1945] VLR 171. A lease may exist despite the fact that there are restrictions on the user: Glenwood Lumber Co v Phillips [1904] AC 405 at 408; [1904–7] All ER Rep 203; Radio Theatres Pty Ltd v City of Coburg [1948] VLR 84; Castor v Brisbane City Council [1955] St R Qd 348; ICI Alkali (Aust) Pty Ltd (in vol liq) v Federal Commissioner of Taxation [1977] VR 393; 6 ATR 271; 9 ATR 373. Similarly, the right of user may be restricted to certain times. Authority for this proposition is Radio Theatres Pty Ltd v City of Coburg, above, where a municipal council demised the messuage and premises, known as the concert hall, situated in its town hall, to hold the same unto the lessee for a period of three years for the purpose of using the demised premises as a theatre on six nights in each week, during the term granted, for night performances, and also on Saturday afternoons and public holidays for matinees. Provision was made for the lessee’s limiting its user to three nights a week together with matinees. By way of the grant of a ‘licence for occupancy’, the lessee covenanted to permit the council on giving notice to use and occupy the demised premises for its own purposes 12 times a year. There were covenants by the lessee to repair, to permit entry by the council and to yield up in good and tenantable repair, and there was a provision for a weekly tenancy at the expiration of the term. A lease was held to have been created. In Burns v Shire of Woorayl [1944] VLR 166, an instrument entitling the grantee to use a hall between 12 noon and 12 midnight on Tuesdays, Thursdays and Saturdays for a period of five years was held to be a mere licence; see further Pepper v District Council of Stirling [1948] SASR 344.

Lodgers [3.4] As a general rule a lodger is not a tenant because, although he or she may be the occupier of a room or rooms, the lodger has not the right to exclusive occupation of that part of the house, and is a licensee only. In Porter v Busch [1974] 1 NSWLR 593, Samuels J held that all that is necessary for the relationship of licensor and lodger to exist is some form of contract or agreement by which the former agrees to accept the lodger in that capacity. Such a contract or agreement does not require to be evidenced by some form of consensual arrangement made before the lodger entered into occupation, but may come into being at some later stage, and may then govern, not only the future relationship of the parties, but their relationship retrospectively from the date when occupation commenced. The contract or agreement may be evidenced by the acts and conduct of the parties. There is a presumption, where an owner is living in a house, that another occupier is a lodger rather than a tenant: Burnett v Guice [1946] VLR 257 at 259–60 (per Martin J): [page 81] … the question remains whether they occupied as tenants or as licensees. If as tenants, then the National Security (Landlord and Tenant) Regulations apply … Although the agreement was for specific rooms with the right to use the kitchen and other conveniences, there was no provision in it for attendance or services to be rendered by the plaintiff … The chief debate hinged on whether or not the defendants had exclusive possession of the part occupied by them. It is common ground that the plaintiff at no time entered their rooms, but if he retained the power of control, the fact that he did not exercise such power does not matter … There is no conclusive evidence that the plaintiff retained control of the whole house, in the sense that, for example, he could eject a trespasser from the bedroom occupied by the defendants, nor is there

any that the defendants had exclusive possession of the part occupied by them. Until quarrels occurred the plaintiff and the defendants appear to have used all the rooms, other than their respective bedrooms, in common and without objection. The border between lease and licence is not always easily apparent, and I do not consider either party had adduced evidence which enables me to say with any certainty that the plaintiff had or had not retained dominion of the whole house. But it is urged that there is a presumption, where an owner is living in a house, that another occupier is a lodger rather than a tenant; and the judgments of Collins MR in Kent v Fittall [1906] 1 KB 60 at 70; [1904–7] All ER Rep Ext 1308, and of Cozens-Hardy MR in Douglas v Smith [1907] 2 KB 568 at 575; [1904–7] All ER Rep Ext 1166, were cited in support of this contention … I accept the position that there is such a presumption and, as there is nothing to rebut it in the evidence, judgment will go for the plaintiff for possession of that part of the house occupied by the defendant. See too, Purbrick v Rybar [1951] VLR 275, and Varella v Marsicovetere [1954] VLR 550 to the same effect. But this presumption is one of fact only, which may operate where otherwise the evidence is insufficient to lead to a conclusion either way. It cannot prevail where there is sufficient evidence to enable the court to determine the question: Torrisi v Oliver [1951] VLR 380; Downie v Taylor [1954] VLR 603; Helman v Horsham & Worthing Assessment Committee [1949] 2 KB 335. See Lewis v Bell (1985) 1 NSWLR 731 and the House of Lords decision in Street v Mountford [1985] AC 809 at 823 where the distinction between a letting and a licence was considered in detail and the authorities reviewed; see also the discussion at [1.4]. Any inference that may be drawn from the statement of Lord Templeman (Street v Mountford, above, at 823) — that a person who enjoys exclusive occupation may be a lodger or a tenant — appears to be unjustified in view of the context of the judgment and the express adoption of the judgment of Windeyer J in Radaich v Smith (1959) 101 CLR 209 at 222; [1985] AC 809 at 827; a view supported by Hadjiloucas v Crean [1988] 1 WLR 1006 at 1019–20; and in the speech of Lord Templeman

himself in AG Securities v Vaughan [1990] 1 AC 417 at 465 and see Westminster City Council v Clarke [1992] 2 AC 288 (HL); All ER Rev 1989 pp 184–9; but see Uratemp Ventures Ltd v Collins [2002] 1 AC 301 (HL). [page 82] The application of the authorities in the case of occupation of premises by more than one person is usefully considered in the latter cases, the possibilities being two separate licences or a joint tenancy (see, particularly, AG Securities v Vaughan [1990] 1 AC 417 at 472–3). In determining whether an arrangement is one of letting or of licence the fact that the subject premises form part of the lessor’s own personal house is very strong evidence negativing an intention on the lessor’s part to create a tenancy: Stuart v Marshall (1958) 75 WN (NSW) 252. The question depends on whether the owner of the house resides upon the premises, retaining his or her quality of master, and reserving to himself or herself the general control and dominion over the whole. If the owner does this, the inmate is a mere lodger: Frieze v Unger [1960] VR 230 at 237. As to the meaning of ‘lodger’, see too Freeman v Wells [1909] VLR 361. The lessee of a dwelling house was accustomed to let a room to each of two persons with the right to use, in common with herself, the kitchen, bathroom, laundry and garage; and, in the event of any occupants ceasing to occupy, she let the room to other occupants successively. It was held that there was no relationship of landlord and tenant created: Harper v Fairbrother [1951] ALR 951. Where the keeper of a lodging house was asked by the defendant whether he could give accommodation to six persons, and he made available two partly furnished rooms, provided the linen, sometimes made the beds and provided other services, but retained the keys to the doors of the rooms, it was held in Sauter v Sangster (1950) 68 WN (NSW) 74, that the defendant was a mere licensee. The position of the occupier of a serviced room was also considered in Appah v Parncliffe Investments Ltd [1964] 1 WLR 1064. Persons may be lodgers despite the existence of a ‘rent book’ and the fact that they have exclusive possession of their bedrooms: Pearch v Gyucha (1953) 71 WN (NSW) 123. Compare

Walliker v Deveaux (1961) 78 WN (NSW) 409 and Psaltis v Collins [1961] NSWR 375; 78 WN (NSW) 424. The owner of a building comprising ‘flatettes’ entered into a ‘licence agreement’ with the defendant and another in relation to a ‘flatette’ comprising two rooms. Under the terms of the agreement, the ‘licensees’ were jointly and severally given the right to occupy the two rooms and to use certain furniture and cooking facilities therein and certain amenities of the establishment on payment of a weekly sum per person. The agreement gave each of the licensees the right, independently of the other, to ‘leave’ on seven days’ notice. The owner was given the right to give seven days’ notice to either ‘licensee’ to ‘leave’ and if the owner so chose to put, without the consent of the other, a stranger in her stead; and to fix rules for the house and to give reasonable directions to the ‘licensees’ governing their use of the premises. The ‘licensees’ agreed that their visitors or guests would not remain on the premises overnight. The relationship created was that of licensor and licensee: Nash v Johnsen [1965] NSWLR 1193. A family was permitted by the owner of a house to live in the house with him and to have exclusive possession of certain rooms and the use of other rooms with him. [page 83] The family paid certain periodical sums for such accommodation. Some seven years after the arrangement commenced the owner went to a convalescent home, where he died 18 months later, having done nothing about his home or the family occupying it. In an action of ejectment brought by the executor of the owner, it was held that the defendants had raised a triable issue as to whether a tenancy existed: Stephenson v Morgan (1963) 80 WN (NSW) 1719. A family arrangement for the sharing of a house created no tenancy in Armstrong v Armstrong [1970] 1 NSWR 133.

Employees [3.5] Where the occupier of premises has been let into occupation by his or

her employer, a further test is available for determining whether the arrangement is one of licence or of lease. If it can be said that the occupation is ascribable to the relationship of master and servant, and not to that of landlord and tenant, then there is a mere licence. This will be so if the occupation is subservient to and necessary to the service rendered: HA Warner Pty Ltd v Williams (1974) 73 CLR 421 at 429; Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323. Generally, the courts are reluctant to infer the grant of a tenancy where no rent is paid and a domestic or other like relationship exists: Heslop v Burns [1974] 1 WLR 1241. The owner of a dwelling house gave to a married couple a right to occupy the house, jointly with himself, in return for services. No rent was ever fixed, and the arrangement could have been terminated by either party at any time. There was no such exclusive possession as would create a tenancy, and the arrangement, dependent on personal service by the occupiers to the owner, terminated on the death of the owner; what was created was a mere licence, and not a tenancy within the meaning of the relevant Fair Rents Act: McCann v Annett [1948] NZLR 116. Reservation of rent is not, however, essential to the creation of the relationship of landlord and tenant, and where an employee was placed in occupation of the premises in order to give him or her the benefit of a dwelling house as a concession, and the employee’s occupation was not subservient to or necessary to the service rendered by him or her, a tenancy was created: Francis Longmore & Co Ltd v Stedman; and see [1.12]. A fireman, with his partner and children, occupied a flat belonging to his employer. The flat was allotted to him at his own request, but the purpose of his occupying it was that he might the better perform his duties; he was not allowed to occupy as part of the remuneration for his services. No tenancy was created: Metropolitan Fire Brigades Board v Tait [1949] VLR 231. The fact that no rent was specified to be payable, that the supposed lessor could not grant a lease without breaking a covenant in the lease under which he himself held and the fact that the employment was liable to be determined on two weeks’ notice were regarded as pointing towards a licence in Warder v Cooper [1970] Ch 495; 1 All ER 1112. For other cases of a servant occupying premises owned by his or her master, see Rowlands v Producers and Citizens Cooperative Assurance Co Ltd

[page 84] (1950) 51 SR (NSW) 164; E & W Hackett Ltd v Oliver [1953] SASR 19. See also the House of Lords decision in Street v Mountford [1985] AC 809; Royal Philanthropic Society v County [1985] 2 EGLR 109; Norris v Checksfield [1991] 1 WLR 1241 (CA), and the comments in [3.4].

Miscellaneous cases [3.6] In Moss v Glebe Municipal Council (1947) 48 SR (NSW) 208, it was held that the relationship of landlord and tenant did not exist between a municipal council resuming land and the occupiers of the land. A tennis club occupying courts and a clubhouse was regarded as holding a lease, not a licence: Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513; [1957] 3 All ER 563. As to the standing of a purchaser who takes possession of the subject property before the completion of the contract of sale, see [2.17]. A right to prospect and mine for coal was considered in Mittagong Shire Council v Mittagong Anthracite Coal Co Ltd (1957) 3 LGRA 290. As to mining leases, see Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199; ICI Alkali (Aust) Pty Ltd (in vol liq) v Federal Commissioner of Taxation [1977] VR 393; 6 ATR 271; 9 ATR 373. In KL Distributors Pty Ltd v Jacob [1949] Tas LR 123, A granted to B the right to use and occupy a portion of the ground floor of business premises for the storage of goods. A’s employees at all times had access to the area occupied by B, and A paid for electric current consumed thereon. Some time after B had commenced to occupy the area, he asked for the key of the premises, which A refused. Later, A took possession of portion of the premises occupied by B, without seeking the permission of B, who merely acquiesced. B was held to be a licensee. On the question of lease or licence, see further Dudgeon v Chie (1955) 92 CLR 342 (share-farming agreement); Cody v Martyr (1954) 71 WN (NSW) 109 (tenant’s invalid son and his wife having exclusive possession of certain rooms); Marshall v Commonwealth Hostels Ltd [1953] VLR 503 (migrant in Commonwealth hostel); Shell-Mex and BP Ltd v Manchester Garages Ltd [1971] 1 All ER 841; [1971] 1 WLR 612 (service station); Hardwick v Johnson [1978] 1 WLR 683

(informal family arrangements). As to whether an advertising sign agreement constitutes a lease or licence, see Claude Neon Ltd v Melbourne and Metropolitan Board of Works (1969) 43 ALJR 69; National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97,322; and see [1.4].

Agreement for a licence [3.7] An agreement for a licence is not required to be evidenced in writing, for it is not an agreement for the creation of an interest in land: Wells v Kingston-Upon-Hull Corporation (1875) LR 10 CP 402. [page 85]

Determination [3.8] A licence is at once determined by the grantor’s ceasing to own the property over which it is exercised: Sharman v McIntosh (1951) 68 WN (NSW) 16; Frieze v Unger [1960] VR 230 at 240. A licence to occupy premises granted in return for personal services to be rendered to the licensor will terminate on the death of the licensor or licensee: McCann v Annett [1948] NZLR 116 at 120; Frieze v Unger at 240. This rule evidently applies to all revocable licences: Sharman v McIntosh; Butlin v Cox (1955) 73 WN (NSW) 44 at 48; Noblett v Manley [1952] SASR 155; ALR 673. One co-owner may terminate a licence, even without the consent of the other or others: Annen v Rattee [1985] 1 EGLR 136 (CA); and see [5.15]. Whether notice is required to determine a licence agreement depends upon the interpretation of the agreement, haying regard to the ordinary rules applied to the construction of contracts. An express provision about notice can be in any form which the parties care to adopt. If the term is that a contract is to terminate six months (or a reasonable time) after notice given, the notice need amount to no more than an election to terminate. It will automatically take effect after the expiry of six months (or of such period as the court subsequently determines to be

reasonable). On the other hand, an express term can prescribe the form and content of any notice to be given and then a notice in the wrong form or with insufficient content will be bad. If the contract is, as here, entirely silent about notice and a term has to be implied, the nature and requirements of the term to be implied must be settled according to the ordinary rules governing the implication of a term. The question then will be whether the necessary implication extends beyond that of a simple notice, to embrace a notice in a particular form or with a particular content: Australian Blue Metal Ltd v Hughes [1963] AC 74 at 100–1; [1962] 3 All ER 335. See also Lewis v Bell (1985) 1 NSWLR 731 where the termination of a licence to use a number of horse-boxes and other facilities which expressly provided for termination on one month’s notice was considered. If a licensee is entitled to reasonable notice and notice is given which is unreasonably short, the licensor will nonetheless succeed in an action to recover the premises from the licensee if in fact a reasonable time had elapsed by the date of the institution of the proceedings: Minister of Health v Bellotti [1944] 1 All ER 238; [1944] KB 298. In the well-known case of Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605; [1937] ALR 273 at 281, Dixon J said at CLR 630–1: A licence which is not coupled with or granted in aid of an interest is revocable at law. It operates as a bare permission to do what would otherwise be an invasion of the licensor’s rights. If the permission is terminated, further continuance of the acts [page 86] it authorised becomes wrongful. A licensee does not become a trespasser until he has received notice that the licence is countermanded and until a reasonable time has elapsed in which he may withdraw from the land and remove whatever property he has brought in pursuance of the licence (Cornish v Stubbs [(1870) LR 5 CP 334]). But, if he then refuses to leave the premises, he cannot complain of his forcible removal.

See too Fowler v Begg (1953) 53 SR (NSW) 451. The revocation of a licence to occupy a bungalow was considered in Warder v Cooper [1970] Ch 495; 1 All ER 1112. In Wallshire Ltd v Advertising Sites Ltd [1988] 2 EGLR 167 (CA) it was held that letters written by the owners did not constitute notice to terminate the licence according to its terms as they stated that the licence was already terminated. The question whether equity will restrain the wrongful revocation of a licence has been much discussed in recent years in consequence of certain observations made by the House of Lords in Wintergarden Theatre (London) Ltd v Millenium Productions Ltd [1948] AC 173; [1947] 2 All ER 331. In Cowell’s case, the High Court had held that a licence given to enter upon land and view horse races, although granted for value, did not create a proprietary interest in the land, but created a contractual right only, and was revocable at common law, and that equity did not preclude the licensor from effectively revoking the licence or relying upon its revocation. The essence of the principle applied in Cowell’s case is that a licence may be determined and the licensee transformed into a trespasser even if the determination involves a breach of contract: Porter v Hannah Builders Pty Ltd [1969] VR 673 at 678. On the question whether Cowell’s case is still good law, see Brennan v Thomas [1953] VLR 111 at 120; Marshall v Commonwealth Hostels Ltd [1953] VLR 503 at 510; Adamson v Busch [1955] VLR 450 at 458; Baikie v FullertonSmith [1961] NZLR 901; Playgoers’ Co-operative Theatres Ltd v Workers Educational Association of NSW (1955) 72 WN (NSW) 374; Porter v Hannah Builders Pty Ltd; Hounslow (London Borough Council) v Twickenham Garden Developments Ltd [1970] 3 All ER 326; [1970] 1 Ch 233. Cowell’s case has been applied in New Zealand: Mayfield Holdings Ltd v Moana Reef Ltd [1973] 1 NZLR 309; see further Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93; and Tynec Pty Ltd v Geekie [2005] NSWSC 938. The question was considered again recently in Chaka Holdings Pty Ltd v Sunsim Pty Ltd (1987) NSW ConvR ¶55-367 and the authorities reviewed. Young J said (at 57,305–6): I turn now to the question as to whether relief against forfeiture can be given in respect of a contractual licence. It would seem to me that as a result of decisions such as Legione v Hateley (1983) 152 CLR 406 I can

do this though it would only be in exceptional cases that I would in fact do it, those cases involving situations where there was a trivial breach but great prejudice to the person seeking relief (see eg per Mason and Deane JJ at p 449. See also Shiloh Spinners Ltd v Harding [1973] AC 691). Not only does the [page 87] making of such an order seem open as a matter of principle, but, in this court, Hodgson J has already held in Proctor v Milton (1987) NSW ConvR ¶56,959 at 56,965 that this court can give such relief against forfeiture. His Honour said at that page that ‘relief will generally be granted only where the conduct of the party effecting the forfeiture can be described as unconscionable’. The defendant says that if the interest is a licence then equity should not intervene at all. This view may have been right many years ago but it seems to me that in the light of cases such as Verrall v Great Yarmouth Borough Council [1981] QB 202 and Rojain Pty Ltd v Ambrose [1986] VR 449, 455 [successfully appealed as McMahon v Ambrose [1987] VR 817, but this does not, for present purposes, detract from the citation] it does not represent the current law. It is true, as counsel for the defendant points out that the great majority of the cases in which equity has given relief by way of injunction in respect of licences with respect to land have been in connection with licences over public halls and arenas, see eg Heidke v Sydney City Council (1952) 52 SR (NSW) 143; Playgoers’ Cooperative Theatres Ltd v Workers Educational Association (NSW) (1955) 72 WN (NSW) 374; Alonso v Leichhardt Municipal Council (1975) 1 BPR 9368 and Verrall v Great Yarmouth Borough Council [1981] QB 202. The reason for this may well be that in such cases it is easier to demonstrate that damages are not an adequate remedy. There are examples of the use of the remedy outside the public hall situation which reinforces the view that the remedy is not limited to those situations: see, for example, Vinden v Vinden [1982] 1 NSWLR 618 where a bare licence

to occupy a private house was protected by injunction because the defendant’s conduct made it unconscionable not to do so. The defendant also submitted that if the court gave relief in respect of a contractual licence, it was opening up a whole new area of reversing breaches of contract. I think this may be true as a matter of theory, but the circumstances in which relief may be given will not, in practice, open the floodgates, see, for example, Megaloconomos v MGM Ltd (1953) 54 SR (NSW) 275. I have already referred to the decision of Hodgson J in Proctor v Milton (1987) NSW ConvR ¶56,959. This decision has the effect that equity will in the appropriate cases grant relief against forfeiture where the plaintiff’s interest is a licence appears to be consistent with principle (see, for example, note by Butt (1987) 61 ALJ 369–73). In any event even if I had reservations about the decision (which I do not) in comity I should follow it. The grounds for giving relief against forfeiture are that it would be unconscionable for the defendant to take advantage of the situation. The grounds may be those set out in the judgment of Mason and Deane JJ in Legione v Hateley (1983) 152 CLR 406 at 449 but this is clearly not intended as anything more than a guide (see pp 448–9 and McArthur v Stern (1986) 5 NSWLR 538 at 554). [See Stern v McArthur (1988) 81 ALR 463.] Thus what must be asked is how it is unconscionable for the defendant to rely on the fact that at law the plaintiff’s interest has terminated? When considering this question, particular attention must be paid as to the nature of the breach, the loss of the plaintiff, the gain of the defendant and any involvement of the defendant in the circumstances which constituted the plaintiff’s breach. In Australian Aggregates (NSW) Pty Ltd v Maxmin Pty Ltd (SC(NSW), Hodgson J, 16 May 1988, unreported) it was held that the New South Wales statutory provisions [page 88]

which provide for relief against forfeiture when the right to renew a lease has been lost by some breach of covenant do not apply to licences: see [14.6].

Recovery of possession [3.9] Where a mere licence is granted and the licensee refuses to depart from the premises after his or her licence has been determined, summary proceedings may not be available in the lower courts. Sometimes it is not possible to assert with confidence the nature of the relationship which formerly existed between the occupier of land and the person who gave permission to occupy; the agreement may have been a mere licence, or it may have created a tenancy at will or a periodic tenancy: see [2.15] (and see [2.19] in relation to the termination of a tenancy at will). Proceedings may be available in the lower courts if a tenancy did exist, whatever the nature of the tenancy; but if there is a possibility that the parties were merely licensor and licensee it may, depending on the particular legislation and court rules, be unsafe to proceed in the lower courts, if jurisdiction is dependent upon the former existence of a tenancy. A number of decisions illustrate this type of limitation on the jurisdiction of lower courts to which reference has just been made. In the first place, the relationship which formerly existed must have been that of landlord and tenant: Ex parte Wood (1889) 6 WN (NSW) 78. If the parties were licensor and licensee, the court has no jurisdiction: Ramsbottom v Snelson [1948] 1 KB 473; 1 All ER 201; Zunneberg v Batt [1948] VLR 107 at 108. In the same way, a person who has always been a mere trespasser (as opposed to a person who was a tenant and has become a trespasser in consequence of the determination of his or her tenancy) cannot be ejected by proceedings in a magistrates’ court: Zunneberg v Batt at 108; Ex parte Woolley (1870) 9 SCR (NSW) 305; Ex parte Wood (1889) 6 WN (NSW) 78; Cohen v Milner [1960] VR 499 at 504. Tenancies at sufferance are, as has been observed in [2.20], not true tenancies, and such a tenancy does not attract the jurisdiction of a magistrates’ court: Ex parte Woolley (1870) 9 SCR (NSW) 305; Ex parte Rooney (1873) 11 SCR (NSW) 381. On the other hand, ejectment proceedings may be taken against a former tenant at will: Ex parte Rooney (1873) 11 SCR (NSW) 381; Ex parte Gruer (1891) 8 WN (NSW) 44; Mackett v Shields (1894) 16 ALT 38; Holmes v North (1872) 2 VLR (L) 84 at 87

(per Stephen J). A tenancy will support proceedings notwithstanding that its creation may have been a breach of trust: Ex parte Palmer (1912) 12 SR (NSW) 756. The mere fact of a quondam tenancy is not, however, enough to confer jurisdiction; for the parties may upon or after the determination of the tenancy have substituted some new relationship. This was the situation in Barker v Williams [1933] VLR 101 where the lease was replaced by a licence and, the licence having been revoked, jurisdiction was held not to exist in a magistrates’ court. Hamilton v Chapman [1902] QWN 86 is a similar case. [page 89] The general position in relation to the recovery of possession from a trespasser was discussed by Owen J in Nyul Nyul Aboriginal Corporation v Dann (1996) 133 FLR 359 (SC(WA)) at 371: So far as concerns occupancy of the house, the defendant is a ‘squatter’ as that word was explained in McPhail v Persons Unknown [1973] Ch 447. At law a squatter is regarded as a trespasser and the true owner is entitled to recover possession from a trespasser without serving a notice to quit. This much appears from what Lord Denning MR said in McPhail (supra), at 456: What is a squatter? He is one who, without any colour of right, enters on an unoccupied house or land, intending to stay there as long as he can. He may seek to justify or excuse his conduct. He may say that he was homeless and that the house was standing empty, doing nothing. But this plea is of no avail in law … The owner is not obliged to go to the courts to obtain possession. He is entitled, if he so desires, to take the remedy into his own hands. He can go in himself and turn them out without the aid of the courts of law. This is not a course to be recommended because of the disturbance that might follow. Of course, the fact that the owner can embark on a self-help regime

does not mean that the owner is deprived of a remedy at law if he or she wishes it [as to the remedy of self-help, see [21.2] to [21.4]]. The owner is entitled to a writ of possession immediately. In those circumstances it must follow that a notice to quit prior to the issue of the writ seeking possession is not necessary. I have so far been speaking of the occupancy by the defendant of the houses. I do not think there can be much doubt that the plaintiff, through George Dann, granted the defendant a licence to come onto the Land and to live in a caravan on the Land in connection with his employment: see Dover v Prosser [1904] 1 KB 84 per Lord Alverstone CJ at 86; Ramsbottom v Snelson [1948] 1 KB 473. There is a distinction drawn in these cases between a situation where the occupier is required to live in a particular place as a term of his employment and a situation where the occupancy is a matter of convenience for all parties. It would be a strained construction of the evidence to find that the defendant was required, by virtue of the arrangement which he reached with George Dann, to live in a caravan on [land] at Lungabid. The better view is that this was a matter of convenience. The cessation of the employment may well entitle the owner to bring the licence to occupy to an end but it must do so in the customary fashion. In other words, this was a contractual licence revocable at law rather than a licence creating an interest of a proprietary nature: see Cowell v Rosehill Racecourse Co Ltd (1936–1937) 56 CLR 605 at 616–617. As to the process of determination of licences, see [3.8].

[page 91]

4 Agreements for a Lease Agreements and leases [4.1] An agreement for a lease must be distinguished from a lease. The former is a contract whereby the parties bind themselves to give and take respectively a lease at some time in the future. The latter contains words of present demise, which may be expressed or implied; a lease is a species of conveyance, and the question is whether the parties intend that an estate in the land shall by force of their agreement be conveyed by one to the other. If they do so intend, there is a lease. An agreement for a lease contemplates that an estate will be conveyed by some further act at some future time. This is not to say that the term of a lease must commence as soon as the lease is granted. The term may be made to commence in the future, in the past or at the present. However, a term defined in a deed as beginning from a date prior to the delivery of the deed, say for 10 years from such date, is not a term of 10 years. It is a shorter term beginning from the date of delivery of the deed and ending 10 years from the earlier date specified in the lease: see Earl Cadogan v Guiness [1936] Ch 515 at 517–19 (per Clauson J); Brikom Investments Ltd v Seaford [1981] 1 WLR 863 at 866 (per Ormrod LJ). Thus the making of a lease cannot effect the grant of an estate for the period of a preceding agreement for lease; see also [1.10]. The distinction between the lease and the mere agreement for a lease resides in the fact that the lease does more than create mere contractual rights; it creates at once an estate, even though the interest of the tenant may be reversionary: Green v

Bowes-Lyon [1960] 1 WLR 176; Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318 at 323–4; Leitz Leeholme Stud Pty Ltd v Robinson (1977) 2 NSWLR 544; National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675; and see [6.10]. While it might appear to follow that contractual doctrines would apply to an agreement for lease because it [page 92] is a contract without any formal conveyance (see National Carriers case at 693– 702 and 713–15 and Rom Securities Ltd v Rogers (Holdings) Ltd (1967) 205 EG 427) the position, in Australia at least, appears to be otherwise as the creation of an equitable term of years (see [4.8]) takes an agreement for lease out of the class of mere contracts and puts it in the same position as a lease: see National Trustees Executors and Agency Co of Australasia Ltd v Boyd (1926) 39 CLR 72, cited with approval by Mason J (with whom Wilson and Dawson JJ agreed in substance) in Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17 at 27. Compare Brennan J (at 40–1); and see Deane J who cautions against (at 54): … the danger of over-emphasising the equivalence of the equitable estate under an agreement for lease or an unregistered memorandum of lease followed by entry into possession and of a common law leasehold estate for the like term in that one can point to statements of authority which support the approach that the ordinary contractual doctrines of frustration and termination for fundamental breach would, in an appropriate case, operate to destroy the contractual foundation of such an equitable estate even if the view that they were not applicable at all to a common law lease had continued to prevail: see Coatsworth v Johnson [(1886) 55 LJ QB (NS) 220 at 223] (per Lindley LJ); Swain v Ayres [(1888) 21 QBD 289 at 294] (per Lord Esher MR), [at 295] (per Lindley LJ), [at 296–7] (per Lopes LJ), and Dimond v Moore [(1931) 45 CLR 159, esp at 186–7]. See also Chan v Cresdon Pty Ltd (1989) 168 CLR 242; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333; NZI Insurance Australia

Ltd v Baryzcha (2003) 85 SASR 497 (CA); and the discussion at [4.8]. Note also the divergent positions at law and in equity this situation produces with respect to the nature of the occupancy of premises: see [2.8], [2.15] and [4.8]. Regardless of the existence of divergent positions as to the effect of an agreement for lease, it is clear that the issue will not arise unless the agreement for lease is complete in that it contains all the essential elements of an enforceable agreement for lease, viewed in the context of the particular circumstances: see NZI Insurance Australia Ltd v Baryzcha at 506 ([30]–[39]), set out in part at [4.8]; and see Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 at [45]–[65] (per Gillard J); Woodford Nominees Pty Ltd v Masjakan Medical Pty Ltd [1998] ANZ Conv Rep 254 (SC(Qld)); and One Stop Lighting (Queensland) Pty Ltd v Lifestyle Property Developments Pty Ltd (1999) Q ConvR ¶54-527. An agreement for lease is quite distinct from an agreement in relation to the terms of a lease, such as an agreement between a third party and the tenant not to vary the terms of the lease, which creates enforceable rights between the parties to that agreement but which does not impinge directly on the relationship between the landlord and the tenant under the terms of the lease: see Almond v Camrol Pty Ltd (1984) 3 BPR 9461. Also, the use of the expression ‘agreement for lease’ as a general description of some arrangement to be negotiated and formalised in the future, whether by formal grant at law or by way of agreement in contract only, is to be distinguished from an actual agreement to lease, containing all the essential elements [page 93] and enforceable on the bases discussed below according to the applicable Masters v Cameron (1954) 91 CLR 353 category: see Fush v McKendrick & Co Pty Ltd (2004) V ConvR ¶54-686 (CA), particularly at 62,790, [20] (per Buchanan JA). It remains open to the parties to vary the terms of the agreement for lease in the formal lease itself when that is entered into: see Players Pty Ltd v Clone Pty Ltd [2006] SASC 118 at [117]–[119]; and see Leggott v Barrett (1880) 15 ChD 306 (CA) where James LJ said (at 309): ‘… if parties have made an executory contract which is to be carried out by a deed

afterwards executed, the real completed contract between the parties is to be found in the deed, and that you have no right whatever to look at the contract, although it is recited in the deed, except for the purpose of construing the deed itself’; and see Lewison, The Interpretation of Contracts (6th ed), para 10.13; and see [3.05]. It should be noted that instruments styled tenancy agreements are usually found to be in fact leases; see further [1.1]. A document which purports to be a demise of land, but which is void or invalid as such may, nevertheless, be used as an agreement between the parties to it, and in appropriate cases specific performance of the agreement can be obtained: O’Dwyer v Butts (1952) 69 WN (NSW) 198; see further the proceedings on appeal (1952) 87 CLR 267; [1953] ALR 117. Also see [1.6]. The effect of granting a lease or sublease without the consent of the appropriate person as required by the terms of a statutory power to lease will, depending on the terms of the statutory provision, be to create an agreement for a lease or sublease until the required consent is given or refused: see Palmdale Insurance Limited v Sprenger [1988] 1 Qd R 414; see also [15.16]. A person in possession under an agreement for a lease as distinct from a lease may obtain relief against forfeiture for non-payment of rent: Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49. Depending on particular circumstances and any agreement between the parties, an agreement for a lease may require a degree of formality, such as an exchange of parts, before it comes into existence: see [1.5] with respect to the creation of leases in writing. In commercial developments which involve construction of premises it is common for an agreement for lease to be executed prior to the lease and the same formality generally attends the creation of the agreement for lease as the lease. The question in any particular case is, however, one of intention, determined objectively: see Brunswick Development Pty Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604 (FCA) where Sundberg J said (at 67,267–8): Shock contended that even if the parties had reached agreement upon the essential terms of the lease, they did not intend to be contractually bound until a formal lease was executed. It said the case fell within the

third class mentioned in Masters v Cameron (1954) 91 CLR 353 at 360 [Dixon CJ, McTiernan and Kitto JJ]: Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be [page 94] dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of these terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In the first case there is a binding contract, whether or not the contemplated formal document comes into existence. In the second case there is a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. In the third, there is no contract. Although the terms have been agreed, the parties do not intend to be bound until the formal contract is executed. The intention of the parties is to be ascertained on an objective basis: Encino Plaza Pty Ltd v Wilson International Pty Ltd (1988) V ConvR [¶54-308] p 63,908. In my view the parties intended to be bound upon the signing of

the Offer document. The document is expressed with some formality and precision. It has a distinct legal flavour. It uses the language of offer and acceptance. It provides for payment of two months rental as a deposit. Shock’s common seal was to be affixed. That Mr Lo Giudice attached importance to the formality of a seal was apparent to the directors, for after they had signed the document he returned it to them for the seal to be affixed. The fact that the parties contemplated the execution of a formal lease does not of itself mean they did not intend then and there to be bound. In Masters v Cameron, speaking of the first class of case, the Court said at 360–361 [Dixon CJ, McTiernan and Kitto JJ]: Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. Shock’s counsel submitted that what happened was really rather informal, and the fact that there was no formal exchange of executed parts of the Offer document argued against an intention that the parties were to be immediately bound upon acceptance of the offer. It has often been said that the usual method of making a contract for the sale of land is by the exchange of parts, and that in the absence of an exchange no binding agreement exists: Allen v Carbone (1975) 132 CLR 528 at 533; Sindel v Georgiou (1984) 154 CLR 661 at 655–656. No evidence was led as to whether in Victoria the usual practice in relation to leases or agreements for leases involves the exchange of parts. Cf Voumard, Sale of Land 5th ed at 27–28. In Encino Plaza at 63,915 Ormiston J rejected an argument, based on the sale of land analogy, that no binding agreement should be found in the absence of an exchange of counterparts of an agreement for lease. In my view the case falls within the first class in Masters v Cameron. The objective intention of the parties, viewed in the context of their

negotiations, was that they were to be immediately bound, although they also intended that the terms of their bargain [page 95] would be restated in a form which would be ‘fuller or more precise but not different in effect’. That was the burden of special condition 2. The formal lease was to incorporate the terms of the Offer, and would be made fuller or more precise by reference to the standard lease in use by the Banco Group. The agreement may also fall within the, so called, fourth category of Masters v Cameron: ‘“That is the category where parties intend to be immediately bound but also intend and may indeed agree to have a further agreement with additional and perhaps different terms.” (the reference to “the Fourth category” being based on what was said by McLelland J (as his Honour then was) in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd [(1986) NSW ConvR ¶55-299 at 56,786; affd (1987) NSW ConvR ¶55-324 at 56,981]; see also Sinclair Scott and Co Ltd v Naughton [(1929) 43 CLR 310, 317]).’: per Powell JA in Heysham Properties Pty Ltd v Action Motor Group [1997] ANZ ConvR 440 at 445; and, similarly, Sheller JA at 443; and see Abigroup Contractors Pty Ltd v ABB Service Pty Ltd (Formerly ABB Engineering Construction Pty Ltd) [2004] NSWCA 181; (2005) 21 BCL 12 (CA). Carter comments that whether or not a fourth category does exist, as the Baulkham Hills Private Hospital case and also Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 suggest, ‘the initial agreement in situations where parties are bound by an agreement to execute a formal document containing additional terms … will be enforceable unless superseded by a later agreement’: see Contract Law in Australia (6th ed, 2013), [5–06]; and see Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27. See also Lend Lease Financial Planning Ltd v Southcap Pty Ltd (CA(Qld), 2 June 1998, unreported (BC9802393)); and Kingsley’s Chicken Pty Ltd v Queensland Investment Corp [2006] ACTCA 9; BC200603875. The nature of the particular lease may enable inferences to be drawn with

respect to the Masters v Cameron categories. For example, in Landsmiths Pty Ltd v Hall (1999) 9 BPR 17,057 Young J said (at 17,058): [9] The cases show that the court is entitled to assume that where there is a contract for the sale of land or a lease for three years or more, the parties normally intend to have a formal document, in the case of a lease because it has to be registered. Again, the cases show that it is more likely than not that in such a situation the parties do not intend to be bound until the formal document has been exchanged. This is the case with leases: Blackburn Developments No 19 Pty Ltd v Downs Surgical (Australia) Pty Ltd (1974) 2 BPR 9141. I applied that case in Arjay Investments Pty Ltd v Morrison’s Outdoor Catering Pty Ltd, 1 May 1995, unreported, and further said in that case that one also looks to see whether the parties have involved solicitors in the transaction, and that the mere fact that they have hit upon a price or have worked out the basic conditions of their agreement does not necessarily indicate that they have reached a legally binding agreement. In certain circumstances a concluded agreement for lease may be found on the basis of the conduct of the parties, without the need for classic offer and acceptance: see Paull v Williams [2005] NSWCA 421; [2006] ANZ ConvR 132 at [24] (per Giles JA, [page 96] with whom Tobias and Bryson JJA agreed); and see Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523; Integrated Computer Service Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110; Gamvrogiannis v Blackshaw (2000) NSW ConvR ¶55-940, affd [2002] NSWCA 6; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153); L E Stewart Investments Pty Ltd v F C & M Legge Building Contractors & Developers (2003) 11 BPR 21,053; and Boreland v Docker (2007) NSW ConvR ¶56-182 (CA) at 56,323–4 (per Beazley JA (with whom Mason P and Ipp JA agreed) at [75]–[86]); and having regard to all relevant facts, including events which took place after the conclusion of the alleged agreement, see Wesfarmers

Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 at [45]– [65] (per Gillard J), particularly at [46] (referring to Hussey v Horne-Payne (1879) 4 App Cas 311; Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd (1994) 2 VR 106 at 134); and see Global Halal Meat Exports Pty Ltd v Macri Investments Pty Ltd (SC(WA), 11 April 1996, unreported (BC9601186)) where Steytler J commented (at BC9601186 17–18): It seems now to be settled, on this question of contractual intention, that a court may have regard to communications between the parties after what is contended to have been the time of formation of a binding agreement in order to assist in the determination, objectively, of the question whether or not they intended to form such an agreement. (See, for example, B Seppelt and Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147; Geebung Investments [Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) Aust Contract Reports ¶90-059] at 90,322 and Australian Broadcasting Commission v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 547–8 and cf, also, Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 and Elmslie v Commissioner of Taxation (1993) 46 FCR 576 at 586–7). But see Moratic Pty Ltd v Gordon (2007) NSW ConvR ¶56-172 at [20]–[25] (per Brereton J) where it was held that there was no agreement to vary a lease arising from a course of dealing between the parties. It is a different question whether conduct subsequent to the making of an agreement can be relied upon for the purposes of its interpretation, as to which see [6.6]. The question whether the parties intend to make a concluded bargain is to be resolved objectively: see Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 (CA) where it was held that the question of intention in this respect was, prima facie, to be resolved objectively by the usual process of construction of the relevant documents; and see Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd at [45]–[65] (per Gillard J); Guilfoyle Pty Ltd v National Mutual Life Association of Australasia (2000) V ConvR ¶54-622 (CA); and Long v Piper

(2002) NSW ConvR ¶56-000 (CA). As to the distinction between this question and whether the parties intended to create legal relations, see [6.2]. The difficulty in determining whether a binding contract has come into existence in the context of agreements for lease was discussed by Young J in Arjay Investments [page 97] Pty Ltd v Morrison’s Outdoor Catering Pty Ltd (SC(NSW), 1 May 1995, unreported (BC9504537)) where the following ‘guidelines’ were offered (BC9504537 at 4 and 5): The question as to whether there has been a binding contract in this sort of situation is one which is often difficult to resolve because one has to look at the intention of the parties where the understanding they may have reached is contained in what might be called commercial correspondence often imprecisely formulated. The courts have worked out various guidelines to assist in coming to a conclusion as to whether there is a binding agreement. These are only guidelines and the actual evidence in a case, or the actual intention of the parties, will, of course, mean that one may have to put some of the guidelines to one side, but nonetheless they are helpful. One of these guidelines is that where one has a lease of commercial premises one normally expects that the lease will only come into existence after there has been an exchange of formal documents; Blackburn Developments No 19 Pty Ltd v Downs Surgical (Australia) Pty Ltd (1974) 2 BPR 9141, which applies the Eccles v Bryant [1948] Ch 93 rule for leases. See also Summit Properties Pty Ltd v Comserv (No 784) Pty Ltd (1981) 2 BPR 9173. A second guideline is that if one can see in the negotiations that the parties have in mind the preparation of a more formal document by a solicitor, one tends to think that they did not intend to be bound until the formal document was produced and exchanged. Thirdly, the mere fact that parties have hit upon a price or have

worked out the basic conditions of their agreement does not necessarily indicate that they have actually reached agreement; Clifton v Palumbo [1944] 2 All ER 497. Indeed, it is not at all uncommon in a sale of land transaction for estate agents to prepare a document similar to the heads of agreement document in the present case for the purpose of being submitted to the solicitors for both sides so that they have some details from which they can draw a formal document. The mere agreement on the basics does not mean that there is an operative agreement. Thus in Kassabian v Lagonicos (1993) NSW ConvR 55-690 at 59,943 McLelland CJ in Eq said, ‘There must be more than the arrival by the parties at a consensus. The parties must intend that the consensus at which they have arrived should there and then constitute a binding contract.’ Guidelines of this nature do, however, have their limitations, as indicated by Bryson J in Napatarra Pty Ltd v Perpetual Trustee Co Ltd [1999] NSWSC 750; [2000] ANZ ConvR 592; BC9904183 (at [8]): In Dellwest Pty Ltd v Cafabe Pty Ltd (Bryson J) Unreported 26 November 1997, p 7 I said: ‘Counsel referred me to Arjay Investments Pty Ltd v Morrison’s Outdoor Catering Pty Ltd (Young J 1 May 1995 unreported) at p 4 and p 5 where his Honour set out guidelines to assist in coming to a conclusion as to whether there is a binding agreement arising out of commercial correspondence. The dominance of the facts of the present case is such that, in my opinion, guidelines and normal expectations are of little value. Judges of the Equity Division have, I think it is right to say, approached allegations that there has been an agreement to grant a commercial lease with the knowledge that commercial practice is that a binding relationship is made at the point of execution and delivery of the lease. However that is no more than an approach, as it [page 98]

is quite open to persons in negotiation for a commercial lease to proceed as they choose and to make an agreement for lease in an informal way, by correspondence or orally; if they do come to an agreement in that way the Court must recognise that this is so and act on their agreement.’ See too Arjay Investments Pty Ltd v Morrisson’s Outdoor Catering Pty Ltd (Young J) Unreported 1 May 1995 at p 4. There is considerable gulf between taking this approach and reaching a conclusion on the facts of any particular case, as the conclusion must be dominated by those facts. And see G and E Avakoumides Pty Ltd v Commonwealth Funds Management [2004] NSWSC 711 at [17] and [18] (per Windeyer J); and Long v Piper (2002) NSW ConvR ¶56-000 (CA) at [55], where Giles JA doubted the utility of guidelines, saying: I prefer not to speak of guidelines. It must depend on the particular situation, but if the parties are following normal practice for the creation of a building lease, particularly a relatively major lease of a hotel with an option to purchase, that is an indication that they do not intend to be bound until execution of the formal lease. In Lend Lease Financial Planning Ltd v Southcap Pty Ltd (CA(Qld), 2 June 1998, unreported (BC9802393)) Pincus JA commented that guidelines of this kind should be used cautiously: BC9802393 at 12; and see [7.16]. Nevertheless, the cases indicate that guidelines, whether formally applied or not, may provide assistance in directing consideration to relevant matters, the significance and weight of which will depend upon the particular circumstances. In any event regard should be had to the note of warning sounded by Ormiston JA (dissenting on the particular issues, not general principles) in Guilfoyle Pty Ltd v National Mutual Life Association of Australasia (2000) V ConvR ¶54-622 (CA) where his Honour commented (at [24]): It is sufficient for me to say that, where interests in land, whether by sale, lease or sub-lease, are involved and are being negotiated by persons some of whom have legal training, one should be careful not to assume that the parties would not require the necessary conveyancing documents to be exchanged before they are bound.

In Sydney Harbour Casino Holdings Ltd v NMBE Pty Ltd (CA(NSW), 23 October 1998, unreported (BC9805593)) it was held that there was no final agreement on a variety of important issues and, consequently, also that a ‘holding deposit’ was recoverable on the basis that the prospective contract failed to come into existence: applying the prima facie rule in this respect, referring to Masters v Cameron (1954) 91 CLR 353 at 364–5 (per Dixon CJ, McTiernan and Kitto JJ); Henning v Ramsay [1964] NSWLR 1165; in England, Sorrell v Finch [1977] AC 728 at 743–5, 754 (per Lord Russell). An agreement for lease may not arise until certain preconditions are met or be subject to an ‘escrow’: see Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486; and see Brunswick Development Pty Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604. Similarly, where ministerial consent or compliance with other statutory formalities is required, see Graham v Moree Local Aboriginal Land Council [2004] NSWSC 1178; BC200408599; and see [1.5]. Generally, as to consents in conveyancing transactions, [page 99] see Lewison, The Interpretation of Contracts (6th ed, 2015), para 14.10. The issue whether there are any preconditions to an agreement for lease taking effect is to be contrasted with the question whether parties have merely been negotiating and have failed to conclude an agreement for lease: see, for example, Brunswick Development Pty Ltd v Shock Records Pty Ltd. The issue of preconditions arose in Players Pty Ltd v Clone Pty Ltd [2006] SASC 118 (FC) in relation to the question whether the liability of a guarantor (arising out of a notation to the guarantor’s attestation of the agreement) was conditional upon the grant of a lease term in accordance with an agreement for lease. In relation to this issue Doyle CJ said: [134] In Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 Mason J considered the Court’s approach to conditions of the kind in question. Although his judgment was a dissenting judgment, there is no reason to think that his statement of the principles is not an accurate summary of the law. He said at 552:

Generally speaking the court will tend to favour that construction which leads to the conclusion that a particular stipulation is a condition precedent to performance as against that which leads to the conclusion that the stipulation is a condition precedent to the formation or existence of a contract. In most cases it is artificial to say, in the face of the details settled upon by the parties, that there is no binding contract unless the event in question happens. Instead, it is appropriate in conformity with the mutual intention of the parties to say that there is a binding contract which makes the stipulated event a condition precedent to the duty of one party, or perhaps of both parties, to perform. Furthermore, it gives the courts greater scope in determining and adjusting the rights of the parties. For these reasons the condition will not be construed as a condition precedent to the formation of a contract unless the contract read as a whole plainly compels this conclusion. [135] The issue of the effect of the notation raises a question of the construction of the Agreement. The effect of the notation, as a matter of construction, is not affected by the later conduct of the parties, although that conduct may, as in Kennedy v Vercoe [(1960) 105 CLR 521], affect the entitlement of a party to rely upon a condition. The title of a party to make an agreement for lease may arise. In Brunswick Development Pty Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604 Sundberg J, speaking in general terms, said (at 67,269) that ‘… at common law a lessor is not required to show title at the date of an agreement for lease, so long as he can do so at the date he executes the lease: De Medina v Norman (1842) 9 M and W 820; 152 ER 347’. More specifically, his Honour continued: ‘Therefore, if at the time the agreement to lease was made Brunswick’s title was in any way deficient, that did not justify Shock’s withdrawal from negotiations on 23 June. The common law was modified by the Vendor and Purchaser Act 1874 (44 and 45 Vict c 41, s 13), the present Victorian counterpart of which is s 44(2) of the Property Law Act 1958, but not in a fashion that assists Shock’s present submission.’ Nevertheless, on the reasoning in De Medina v Norman, which applies the general distinction in

conveyancing law between a contract to grant freehold or leasehold title and the instrument of assurance itself, it would seem [page 100] that the answer to this question depends on which of the Masters v Cameron categories (see above) the particular agreement for lease falls into. For example, if the parties never intend the execution of a formal lease but, rather, intend to rely on the agreement for lease itself as the ‘instrument of assurance’, the time at which the landlord’s title would need to be tested is at the time the agreement was made, or at the commencement of the agreed term if it is other than at that time. This view is supported by the comments made in Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 (CA) where it was emphasised that the existence of a lease in equity as a result of the application of the doctrine of Walsh v Lonsdale depends not only on the agreement being specifically enforceable but also upon the existence of sufficient right or interest in the purported ‘grantor’ to support the necessary decree for specific performance (particularly Nourse LJ (with whom Evans LJ agreed) at 408); and see [4.8].

Uncertainty [4.2] An agreement for a lease (and a lease) are subject to the rules governing contracts generally: Fletcher v Davies (1980) 257 EG 1149 (CA). Thus it is for a court to construe documents that have passed between an owner and intending lessee to determine whether there was a concluded agreement for lease: Ratto v Trifid Pty Ltd [1987] WAR 237; Fire and All Risks Insurance Co Ltd v Concorde Personnel Management Services Pty Ltd (1987) NSW ConvR ¶55-330; and see Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396 (FC). An unconditional agreement evidenced by correspondence is sufficient: Niagara Therapy (UK) Ltd v Richard Shops Ltd, QB, 8 June 1981, unreported. A supposed agreement may suffer from the defect of uncertainty. As a general rule, courts are reluctant to hold void for

uncertainty any provision that was intended to have legal effect: Brown v Gould [1972] Ch 53; [1971] 2 All ER 1505 at 1507–8; see also [14.3]. Where possible, courts try to give effect to the bargain made between the parties and are very reluctant to find contracts void for uncertainty: see Hillas and Co v Arcos Ltd (1932) 147 LT 503; Charles Clay & Sons Ltd v British Railways Board [1971] Ch 725 at 732–4; York Airconditioning and Refrigeration (A/sia) Pty Ltd v Commonwealth (1949) 80 CLR 11 at 26; Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429; Brown v Gould [1972] Ch 53 at 56; Australian Broadcasting Commission v Australian Performing Rights Association Ltd (1973) 129 CLR 99 at 109–10 (per Gibbs J); Meehan v Jones (1982) 149 CLR 571; Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396; Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326; (1992) Aust Contract R ¶90011; Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd (1994) 2 VR 106 at 130 (per Brooking J); Lend Lease Financial Planning Ltd v Southcap Pty Ltd (CA(Qld), 2 June 1998, unreported (BC9802393)); Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 at [45]–[65] (per Gillard J); Sportsvision Australia Pty [page 101] Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103; Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 462, [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Toll (FGCT) v Alphapharm (2004) 219 CLR 165 at [40] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Demtear Pty Ltd v Abelian Pty Ltd [2004] QSC 103 at [13]–[26] (per Muir J); Unique Lifestyle Investments Pty Ltd v Robertson [2005] VSC 347 at [88]–[94] (per DoddsStreeton J), affd [2007] VSCA 29; Patrick Corporation Ltd v Toll Holdings Ltd [2005] VSC 392 at [81]–[87] (per Dodds-Streeton J); (2005) 55 ACSR 386; Marsha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd [2006] VSC 15 at [182]– [184] (per Hargrave J); and Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2013] VSC 614. Thus, in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd, Barwick CJ said (at 436–7), ‘a contract is affected

by uncertainty only if its essential terms are uncertain or lacking’. Consequently, care should be taken to ensure that the parties have reached a concluded agreement and, if that agreement is required to be in writing, then such document should contain all the essential elements of the agreement: see [4.1] and [4.8]. As to the requirement that there be certainty of agreement in respect of terms of a lease, see [1.5]; and, on the question of construction of covenants, see [7.2]. Where a purported contract for the sale of land contained a stipulation that the purchaser should give a ‘lease’ on the land sold to any person who might purchase the business of the vendor and the contract did not specify or refer to the terms of the lease or make any provision for fixing them, it was held that the supposed contract was void for uncertainty: Duggan v Barnes [1923] VLR 27. An agreement for a lease, in order to be valid, must define the parties, the demised premises, the rent (if any) and the commencement and duration of the term: Harvey v Pratt [1965] 1 WLR 1025; see also Brikom Investments Ltd v Seaford [1981] 1 WLR 863, where part performance was relevant to fixing the commencement date of the term. Accordingly, a purported agreement for a lease will be bad if it fails to fix either expressly or by reasonable inference the date from which the term is to commence: Jopling v Jopling (1908) 8 CLR 33, or if it fails to define the duration of the term: King v McIvor (1883) 4 LR (NSW) 43; 4 ALT 153; Bishop v Taylor (1968) 118 CLR 518 at 523, or does not fix or make provision for the fixing of the rent: Beattie v Fine [1925] VLR 363. If there is agreement as to the terms of a lease, apart from a starting date, agreement as to an event that will trigger the start of the lease, and also manifestation of an intention to enter into a binding legal relationship, then the absence of an agreed starting date would not prevent there being an agreement for lease: see Azkanaad Pty Ltd v Galanos Bros Pty Ltd (No 2) [2008] NSWCA 185 at [45]; cf Pirie v Saunders (1961) 104 CLR 149 at 152. No agreement for lease is created where the alleged agreement is subject to qualifications which include ‘subject to mutual agreement re terms of lease’: Atkinson v Findon Shopping Centre Pty Ltd [1987] ACLD 403. Where the parties agreed upon the rent and the commencement and duration of the term, agreed that the tenant [page 102]

should not assign the lease and went on to agree that the lease should contain such other covenants and conditions as should be reasonably required by the landlord, it was held that the parties had reached a concluded agreement and that the last-mentioned provision was not too vague or widely drawn, but was sufficiently certain: Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 3 All ER 30; [1964] 2 QB 699; see also [9.1], [14.3]. In Godecke v Kirwan (1973) 129 CLR 629; 1 ALR 457, Walsh and Gibbs JJ expressed different views as to whether or not there can be a binding agreement if some matter is left for the determination of one of the parties. Walsh J at CLR 642 said that providing matters are not left so that further agreement between the parties is necessary, ‘there is no reason in principle for holding that there cannot be any binding contract if some matter is left to be determined by one of the parties’. At CLR 646–7, Gibbs J expressed doubts about the correctness of that statement, but said that generally, if the matter in question is left for the determination of the solicitor acting for one of the parties to the contract, that, of itself, would not prevent the agreement from being a concluded one. In Peet & Co Ltd v Rocci [1985] WAR 164 it was held that a special condition precedent that the completed lease was to be to the satisfaction of the lessee’s solicitor was a contractual term and did not fail on the ground that it was to be regarded merely as the basis for a future contract (at 168–9). In Foster v Wheeler (1888) 38 Ch D 130; [1886–90] All ER Rep Ext 1567, the facts were unusual. The plaintiff was the tenant of ‘Cedar Lodge’ under a lease held of Dr Ord for a term which was about to expire. He made a contract with Miss Wheeler, the defendant, whereby she promised that she would within seven days enter into a binding agreement with Dr Ord for a lease of the premises from Dr Ord ‘at a rental of £140 per annum for such a term (to commence from 24 June next) and subject to such conditions as Dr Ord shall approve’. It was further agreed between the plaintiff and Miss Wheeler that upon the grant of the new lease to her the plaintiff should surrender his existing lease. Miss Wheeler refused to take a lease from Dr Ord, and the plaintiff brought an action claiming specific performance or damages. Kekewich J gave judgment for the plaintiff directing an inquiry as to damages, and this decision was affirmed by the Court of Appeal. The argument that the agreement was too indefinite to be enforced was rejected, Bowen LJ saying of the contention:

That is based upon a confusion of ideas, it proceeds on the assumption that we are discussing the terms as between Dr Ord and Miss Wheeler. Now suppose there was nothing further known about the terms of the lease than what we find in this agreement, there would be no agreement of which specific performance could be enforced against Miss Wheeler either in the way of specific performance or damages, but if the agreement furnishes a standard from which the terms can be ascertained, then the maxim id certum est quod certum reddi potest applies. Here there is a contract by Miss Wheeler to enter into an agreement the terms of which are to be dictated by Dr Ord. If a person will bargain that in seven days he will enter into an agreement for a lease on terms to be determined by AB and then refuses to do so, he must pay damages: (1888) 38 Ch D 130 at 133; [1886–90] All ER Rep Ext 1567. [page 103] Cotton LJ dealt with the point as follows at (Ch D) 131–2: The first clause of the agreement between the parties, subject to what I shall have to say as to its construction, contains a contract to enter into an agreement for a lease with a certain person, Dr Ord. If he had been a party to the contract, and had been coming to enforce it, it may be that it would be held to be too vague to be enforced, though I do not decide that it would. But it is an agreement with Mr Foster to enter into an agreement with Dr Ord to take a lease at a certain rental and from a certain day for such a term and subject to such covenants as Dr Ord shall approve, and if he fixes the terms and settles the covenants Miss Wheeler is bound to accept the lease. It was contended that to make a binding agreement Miss Wheeler and Dr Ord must agree as to the terms to be granted; and, no doubt, that would be necessary to enable Dr Ord to obtain specific performance of an agreement with himself. But as between the plaintiff and the defendant, if Dr Ord fixes the term the defendant is bound to accept a lease for that term and with such covenants as he determines.

Where the parties agree that the rent shall be a fair rent to be fixed by two indifferent persons, one to be chosen by each of them, and possession is given and taken without the rents having been so fixed, equity may enforce the agreement, referring it to the master to find the fair rent: Gregory v Mighell (1811) 18 Ves 328; 34 ER 341; Hall v Busst (1961) 104 CLR 206 at 223; [1961] ALR 508. Gregory v Mighell and the modern authorities received consideration in Australian Mutual Provident Society v Overseas Telecommunications Commission (Aust) [1972] 2 NSWLR 806; see also Brown v Gould [1972] Ch 53. In the latter case an option in a lease permitted the tenant to renew the lease for a further term ‘at a rental to be fixed having regard to the market value of the premises at the time of exercising this option taking into account to the advantage of the tenant any increased value of such premises attributable to structural improvements made by the tenant during the currency of this present lease’. No machinery for fixing rent was provided in the lease. It was held that the option was not void for uncertainty: see [14.3]. A contract for the sale of land contained the following special condition: Portion of the land sold is used for the sale of petroleum oils and greases and petroleum products of the Shell Co of Australia Ltd. The purchaser covenants that he will immediately upon taking possession hereunder grant a lease of that portion of the land sold as is now used for the sale of the above-mentioned products to the Shell Co of Australia Ltd upon terms that the said land leased as aforesaid be used by Shell or their subtenant or licensee for the sale of such products and upon such reasonable terms as commonly govern such a lease. In the event of any dispute between the parties as to the interpretation or operation of this clause such dispute shall be referred to an arbitrator to be appointed, failing agreement as to an arbitrator, by the President for the time being of the Law Institute of Victoria and such arbitrator shall arbitrate thereon in accordance with the provisions of the Arbitration Act 1958. The High Court held by majority in Whitlock v Brew (1968) 118 CLR 445, that the clause, and the whole agreement, were bad for uncertainty. Taylor, Menzies and Owen JJ said that:

[page 104] The first question to be considered is whether the contention that cl 5 is uncertain should be upheld. The appellant asserts that it should not and that, in effect, that clause simply provides that in the event of there being no agreement as to the terms of the contemplated lease, including both the period during which it is to subsist and the rent to be paid, the parties shall enter into a lease in the form settled by an arbitrator. Of course, if this were so the basis for the contention that the clause is uncertain would disappear. But the language of the clause does not permit this view. The lease is to be ‘upon such reasonable terms as commonly govern such a lease’ and in the event of a dispute ‘as to the interpretation or operation’ of the clause the dispute is to be referred to arbitration. We are firmly of opinion that the expression ‘upon such reasonable terms as govern such a lease’ is not, in the context in which it appears, apt to refer to either the period for which the contemplated lease is to subsist or to the rent to be payable thereunder. Nor do we think that the further expression ‘as to the interpretation or operation’ of this clause covers a dispute as to either of those matters. We, therefore, are of opinion that the clause is uncertain in that it neither specifies nor provides a means for the determination as between the parties of the period for which the contemplated lease shall be granted or the rent which shall be payable thereunder Whitlock v Brew (1968) 118 CLR 445 at 460; [1969] ALR 243 at 250–1. A contract for the sale of a business carried on upon rented premises provided that the vendor should allow the purchaser to remain tenant of the premises ‘while ever lessee of premises or if he becomes owner of same’. The provision was held not to be bad for uncertainty: Lakin v Mylecharane (1957) 57 SR (NSW) 33. The question whether an agreement for a lease is sufficiently certain often arises in consequence of the exercise of an option of renewal. A number of decisions dealing with uncertainty in relation to options of renewal are considered in [14.3]. Negotiations ‘subject to contract’ for the grant of a lease remain in a state of negotiation until exchange of lease and

counterpart: D’Silva v Lister House Development Ltd [1971] 1 Ch 17; [1970] 1 All ER 858.

Statute of Frauds [4.3] An agreement for a lease is caught by the Statute of Frauds 1677 s 4 (Conveyancing Act 1919 (NSW) s 54A; Property Law Act 1974 (Qld) s 59; Law of Property Act 1936 (SA) s 26; Conveyancing and Law of Property Act 1884 (Tas) s 36; Instruments Act 1958 (Vic) s 126; Statute of Frauds 1677 s 4, as amended by the Law Reform (Statute of Frauds) Act (WA) 1962). For convenience, reference is made to the Victorian provision in the following pages. It should be noted that there is no equivalent in the other states to provisions which were contained in the Instruments Act 1958 (Vic) s 127 (which required written authority to any agent who signed) and which, together with s 126, have been re-enacted in modified form in one section, s 126; see Sale of Goods (Vienna Convention) Act 1987 (Vic) as a ‘contract or sale of lands, tenements or hereditaments or any interest in or concerning them’: see Abjornson & Urban Newspapers Pty Ltd [1989] WAR 191 (FC) where it was held that a notice to renew by the lessee which was out of time under the provisions of [page 105] the option to renew nevertheless provided sufficient writing, the notice having been orally accepted by the lessor. In any event, the authority of the agent must be clear: see Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 at 568–9. Accordingly, except in a case where there has been part performance, an agreement for a lease cannot be enforced unless the agreement or some note or memorandum thereof is in writing and signed by the party to be charged or his or her agent. In Victoria if the signature is by an agent, the agent must be authorised in writing signed by the party to be charged: Instruments Act 1958 (Vic) s 126 (by reason of this section now containing the former provisions of s 127, see above): compare the position

under s 53(1)(a) of the Victorian Property Law Act and corresponding provisions, see [1.6]. Where the manager of a company acting with due authority signs a lease in that capacity, such writing satisfies s 126 of the Instruments Act. In those circumstances, no written authority to him or her (as agent) is necessary under that section because in so signing the lease he or she has not acted as the company’s agent. Rather, the lease was executed by the company, its execution being authenticated by the manager’s signature: Richardson v Landecker (1950) 50 SR (NSW) 250; see also 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193; Ivermee (Third Party) [1969] 1 NSWLR 193; Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (WA, Dist Crt). Every agreement for a lease is caught by the Statute of Frauds; it matters not that the interest agreed to be created is not a great one; even an agreement to create at some future time a weekly tenancy must, in the absence of part performance, be contained in or evidenced by a signed writing: Haselhurst v Elliot [1945] VLR 153 at 155. Paradoxically, while an agreement to create in the future a weekly tenancy will not in the absence of part performance be enforceable if it is merely oral, an oral lease taking effect in possession for a term not exceeding three years at the best rent which can be reasonably obtained without taking a fine is good: s 54(2) of the Victorian Property Law Act and its equivalents; Haselhurst v Elliot; Dennis & Copley v Eddie [1952] VLR 92 at 99; see further [1.6]. The extent of the operation of s 126 of the Victorian Instruments Act 1958 in the present context, and the reasons for its application to agreements for lease but not to the lease itself, was examined in Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62. In this respect, Kaye J said (at [33]): Section 126 only applies to agreements for lease. On a proper construction of s 126, the phrase ‘or other disposition’ is dependent on the phrase, immediately before it, ‘upon a contract for …’. In other words, s 126 provides that an action may not be brought to charge a person upon (inter alia) a contract for the sale, or a contract for other disposition of an interest in land. That construction follows from the following considerations: (i)

As a matter of syntax, the phrase ‘or upon a contract for the’ must

govern, not only the next word ‘sale’, but also the phrase ‘or other disposition’. If the words ‘or other [page 106] disposition’ were not governed by the words ‘upon a contract for the’, s 126 would be unintelligible and would read as follows: An action must not be brought … upon … other disposition … (ii) The exception to the operation of s 126 — ‘unless the agreement on which action is brought, or a memorandum or note of the agreement …’ — clearly connotes that s 126 applies to agreements (or contracts), including contracts for the disposition of an interest in land, as distinct from the actual disposition of the interest itself. (iii) The first part of s 126 relates to a ‘special promise to answer for the debt, default or miscarriage of another person’. It thereby reinforces the notion that s 126 is intended to apply to promises or contracts. (iv) Historically s 126 of the Instrument Act derives from s 4 of the Statute of Frauds 1677. That section was concerned with actions brought to enforce a variety of parol promises and contracts. On the other hand, ss 1, 2 and 3 of the Statute of Frauds, which were the predecessors of, but in different terms to, ss 53 and 54 of the Property Law Act were concerned with leases and other dispositions of land. Continuing, Kaye J said (at [34]): In particular, the reported authorities have assumed a dichotomy between ss 1 and 2 of the Statute of Frauds (and the successors to those sections) which were concerned with leases, and s 4 of the Statute of Frauds (and its successors) which has been regarded as being applicable to contracts for leases; see for example Ryley v Hicks [(1725) 1 Str 651;

93 ER 760]; Inman v Stamp [(1815) 1 Stark 12; 171 ER 386] …; Edge v Strafford [(1831) 1 C & J 391 at 397; 148 ER 1474]. Further, there are dicta in the authorities which also expressed the view that ss 52 to 54 of the Property Law Act (or the equivalent thereto) apply to leases and dispositions of property, whereas s 126 of the Instruments Act only applies to agreements to lease; see Dennis and Copley v Eddie [(1952) VLR 92 at 99]; Abjornson v Urban Newspapers Pty Ltd [(1989) WAR 191 at 200]; Kewley v Ball [(1913) VLR 413 at 415 and 416] (I note that an unrelated dictum in this last decision was disapproved by the High Court in Perpetual Executors and Trustee Association of Australia Ltd v Russell [(1931) 45 CLR 146]). See Long v Tower Hamlets London Borough Council [1998] Ch 197 for a most comprehensive review of the English legislation and authorities in this respect; and see Evans v Athedim (Vic) Pty Ltd (2000) V ConvR ¶54-613 (CA) at [20]– [22] (per Batt JA); and Duff v Blinco [2006] QCA 497; and [1.6]. As to the relationship between provisions of property law legislation with respect to writing and other requirements (such as the Victorian Property Law Act 1958 s 53, and the Western Australian Property Law Act 1969 s 34) and the Statute of Frauds provisions, see Ratto v Trifid Pty Ltd [1987] WAR 237 at 258 (per Brinsden J); and Bayside Developments Pty Ltd v Copperart Pty Ltd, above, at 327; and see [1.6]. An agreement for a licence is not required to be evidenced in writing, for it is not an agreement for the creation of an interest in land: Wells v KingstonUpon-Hull Corporation (1875) LR 10 CP 402. [page 107]

Memorandum and signature [4.4] In order to comply with the Statute of Frauds provisions (see [4.3]), the memorandum must state all the essential terms of the contract, that is to say: (i) the parties;

(ii) the consideration; (iii) the property to be demised; (iv) the term and its commencement; (v) any special conditions or stipulations which have been agreed upon. The statute is heavily encrusted with decisions dealing with the sufficiency of the note or memorandum; it is not proposed to discuss these here. The Statute of Frauds requires only that there should be an agreement or memorandum signed by the party to be charged; the party seeking to enforce the agreement need not himself or herself have signed: Laythoarp v Bryant (1836) 2 Bing (NC) 735; 132 ER 283. As to the distinction between a memorandum or note of an agreement and the written agreement itself, see O’Young v Walter Reid and Co Ltd (1932) 47 CLR 497 at 513 (per Evatt J); and Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 at 203 (FC) (per Franklyn J), referring to O’Young; and see Greig and Davis, Law of Contract, pp 693–5. Although a sufficient memorandum may be constituted by more than one document, and parol evidence is admissible to identify a transaction referred to in a document, the memorandum however constituted must contain all the essential, and relevant, terms; with possibly fatal doubt arising in relation to the latter aspects where the contents of a document or documents relied upon by way of memorandum do not reflect any alleged oral contract: see One Stop Lighting (Queensland) Pty Ltd v Lifestyle Property Developments Pty Ltd (1999) Q ConvR ¶54-527 at [30]–[35] (per Chesterman J); and see Smith v Lush (1952) 52 SR (NSW) 207 at 210 (per McLelland J). A written offer which is accepted orally and subsequently acted upon is sufficient: see Pirie v Saunders (1961) 104 CLR 149 at 154 (per Dixon CJ and Fullagar, Kitto, Taylor and Menzies JJ); and G and E Avakoumides Pty Ltd v Commonwealth Funds Management [2004] NSWSC 711 at [17] (per Windeyer J); and see Azkanaad Pty Ltd v Galanos Bros Pty Ltd (No 2) [2008] NSWCA 185 at [45]; and [4.2] where reference is made to Azkanaad in the context of uncertainty with respect to the commencement of a lease term. Where a lease contains an option of renewal and this option is exercised by a notice signed by an agent of the lessee who has not himself or herself been authorised in writing as required by s 126, the agreement for a lease resulting from the exercise of the option will not, in the absence of part performance, be

enforceable against the lessee; it will, however, be enforceable against the lessor, provided that the original lease was signed by him or her or by his or her agent authorised in writing: [page 108] Healy v Southern Milk Transport Pty Ltd [1954] VLR 448 at 459. The content of the essential terms of an enforceable agreement for lease will, naturally, depend upon the particular circumstances: see NZI Insurance Australia Ltd v Baryzcha (2003) 85 SASR 497 (FC) at 506 ([30]–[39]), set out in part at [4.8].

Part performance [4.5] In some cases equity will intervene to compel performance of an agreement notwithstanding the absence of a note or memorandum in writing. Courts of equity will not permit the statute to be made an instrument of fraud: Maddison v Alderson (1883) 8 App Cas 467 at 474; [1881–85] All ER Rep 742. The fraud which causes equity to intervene is fraud of a special kind, namely, fraud arising from ‘part performance’ of the contract, or, in other words, part execution of the agreement. The jurisdiction to compel performance of an agreement struck at by the statute does not arise unless the bargain in fact made has been so acted upon by partly performing it that for the defendant to recede from it at that stage would be a fraud on the plaintiff: Cooney v Burns (1922) 30 CLR 216 at 232–3; 28 ALR 181 (per Isaacs J); and see J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 300 (per Dixon J). The doctrine of part performance was evolved by the courts of equity to prevent a defendant escaping from a contract on the defence of lack of a statutory requirement of writing when the plaintiff had done something in performance of his or her obligations thereunder which rendered it unconscionable for a defendant to rely upon the want of form, that is to say, the party seeking the performance of a contract which should have been, but was not evidenced by writing had to show some act of performance on his or her part: Colman v Golder [1957] VR 196 at 197–8.

The acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged: Maddison v Alderson. By ‘some such agreement as that alleged’ is meant some contract of the general nature of that alleged: McBride v Sandland (1918) 25 CLR 69 at 78; Francis v Francis [1952] VLR 321 at 340; Regent v Millett (1976) 133 CLR 679, especially at 683 (per Gibbs J); and Ratto v Trifid Pty Ltd [1987] WAR 237 at 258 (per Brinsden J). The House of Lords in Steadman v Steadman [1976] AC 536 held that in order to establish facts amounting to part performance it is necessary for the party relying on such acts to establish that he or she had acted to his or her detriment and that the acts in question were such as to indicate on the balance of probabilities that they had been performed in reliance on a contract made with the party claiming the protection of the statute which was consistent with the contract alleged. There is no general rule that the payment of a sum of money could never constitute part performance so that in certain circumstances the payment may be taken into account in determining whether or not the agreement had been partly performed. Referring to the authorities, Chesterman J said in [page 109] One Stop Lighting (Queensland) Pty Ltd v Lifestyle Property Developments Pty Ltd (1999) Q ConvR ¶54-527: In order that acts may be relied on as part performance of an unwritten contract, they must be done under the terms and by force of that contract and they must be unequivocally and in their nature referable to some contract of the general nature of that alleged. Per Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 432. The converse of the proposition appears, as Hill J pointed out in ANZ Banking Group Ltd v Widin (1990) 26 FCR 21 at 34, in Dale v Hamilton [5 Hare 369 at 381] 67 ER 955 at 960: But an act which, in truth done in pursuance of a contract, admits of explanation without supposing a contract, is not, in general, admitted to constitute an act of part performance

taking the case out of the Statute of Frauds; as, for example, the payment of a sum of money, alleged to be purchase money. In J C Williamson Ltd v Lukey (1931) 45 CLR 282, Dixon J said at 300: The acts of part performance must be such as to be consistent only with the existence of a contract between the parties, and to have been done in actual performance of that which in fact existed. And see Laserbem Pty Ltd v Gainsville Investments Pty Ltd [2004] VSC 62 at [53] and [54] (per Kaye J). The acts relied upon as part performance must have been done by the person seeking specific performance, and the other party must have permitted it to be done on that footing: McBride v Sandland, above, at 79; and see Kalnenas v Kovacevich [1961] WAR 188; Ratto v Trifid Pty Ltd, above, at 258; Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA); and Laserbem Pty Ltd v Gainsville Investments Pty Ltd at [53] and [54] (per Kaye J). Acts done by the person against whom the agreement is sought to be enforced cannot be relied upon as part performance: King v Grimwood (1891) 17 VLR 253 (overruled and not followed, respectively, on other grounds in Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VR 313 (FC); and Di Biase v Rezek [1971] 1 NSWLR 735 (CA) at 742–3); Guest v Watson (1891) 17 VLR 497. Further, the act relied upon must be a part execution of the substance of the agreement and not merely of matters preparatory or ancillary to performance, and the act relied upon must have involved, on the part of the person doing it, a change of position in relation to the subject matter of the contract of such a character that he or she would be unfairly prejudiced if the other party were to take advantage of the absence of written evidence: Francis v Francis, above, at 340. Payment or acceptance of a varied rent may be sufficient: see Bayside Developments Pty Ltd v Copperart Pty Ltd at 332–3. However, it follows that there must be an unconditional agreement for lease (or an actual lease) in existence which may be partly performed: see Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486; and see [1.5]. See further [4.6] and [4.7].

[page 110]

Taking of or continuance in possession [4.6] The delivery and taking of possession of the premises on the faith of the agreement will ordinarily be sufficient: M’Bean v Brown (1887) 13 VLR 726; Mortal v Lyons (1858) 8 1 Ch R 112; Pain v Coombs (1857) 1 De G & J 34; 44 ER 634; Gilbey v Cossey (1912) 106 LT 607; [1911–13] All ER Rep 644; Brough v Nettleton [1921] 2 Ch 25; Colman v Golder [1957] VR 196. However, possession in circumstances where the agreement for lease, or lease, is subject to preconditions which have not been met will not without more (such as waiver or estoppel; but as to the latter, see [1.15]) have any significance: see Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486. In that case it was held that the tenant’s possession, commencement of building work and moving goods into the premises indicated merely that the tenant was prepared to take the risk in the expectation that the lease would be signed. See also [1.5]. More difficult questions may arise in the case of an agreement for a lease resulting from the exercise of an option of renewal, for in such a case the tenant will ordinarily not enter into, but continue in possession. In Re National Savings Bank Association; Brady’s case (1867) 15 WR 753, mere continuance in possession at the same rent was held not to be sufficient; compare Humphreys v Green (1882) 10 QBD 148 at 156 where Baggallay LJ said, in relation to Nunn v Fabian (1865) 1 Ch App 35; [1861–73] All ER Rep Ext 1378, that the continued possession of the plaintiff alone was not a sufficient part performance of the agreement for a new lease, for it was equally consistent with his continuing in possession under his previous tenancy. Dowell v Dew [1842] 1 Y & C Ch Cas 345; [1843–60] All ER Rep 1084, is sometimes cited as authority for the view that mere continuance in possession may be a sufficient act of part performance; in that case, however, there was in fact a sufficient memorandum under the Statute of Frauds, so that the observations on part performance were mere dicta; further, the tenant had not merely remained in possession, but had on the faith of the agreement for a new lease

cultivated the farm in a different manner and with different expenditure than he would have done had he been compelled to quit at the end of the term. Continuance in possession will be sufficient if it does not stand alone, but is coupled with payment of rent at a varied rate (Strachan & Co Ltd v Lyall & Sons Pty Ltd [1953] VLR 81; Kalnenas v Kovacevich [1961] WAR 188; Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (WA, Dist Crt)); or with payment of rates which previously were not paid by the tenant: Strachan & Co Ltd v Lyall & Sons Pty Ltd. See further Commonwealth Oil Refineries Ltd v Hollins [1956] VLR 169, where Sholl J was concerned with the position of a tenant who had gone into possession before the making of the agreement and continued in possession after the agreement had been made. His Honour held that, although an entry into possession before agreement cannot be referred to the agreement and is therefore insufficient, nevertheless evidence [page 111] of continuance in such possession after agreement, or of allowing continuance in possession after agreement, was, especially when combined with the payment and receipt of rent, capable of constituting sufficient evidence of part performance. In Darcy v Ryan (1882) 8 VLR (Eq) 36, the plaintiff had acted upon the agreement by taking possession, fencing off and occupying; with some doubt, Molesworth J decreed specific performance. In Thomas v R (1905) 2 CLR 127, the tenant continued in possession, paid the old rent and paid in addition interest at the rate of 6% on the value of certain improvements made by the lessor. He alleged that there had been part performance of a verbal agreement whereby he was to have a further lease for seven years at the former rent together with 6% interest on the value of the new improvements. In fact, a special agreement (that is to say, an agreement distinct from the agreement for a further lease for seven years) had been made for the payment of interest upon the value of the improvements. In these circumstances there was no sufficient act of part performance; the continuance in possession and the payment of rent at the former rate were equally referable to the expired lease and the payment of interest was equally referable to the

special agreement; in other words, none of the acts relied upon was unequivocally referable to the agreement for a new lease. See also Evans v Athedim (Vic) Pty Ltd (2000) V ConvR ¶54-613 (CA).

Alterations to premises [4.7] The mere fact that the intending landlord expends money in making alterations to the premises is not enough, for such an act is equally referable to the landlord’s ownership of the premises: Whittock v Mozley (1883) 1 Cab & El 86; Rawlinson v Ames [1925] Ch 96 at 114; but see Steadman v Steadman [1976] AC 536. On the other hand, if improvements, alterations or repairs are carried out by the intending landlord at the request of the tenant, the agreement for a lease may be held to have been sufficiently performed. Such a case was Rawlinson v Ames, above, where Romer J dealt with the point as follows (at 114): Now the mere fact that the plaintiff converted part of her premises into the flat and expended money thereon is not only referable to a contract such as that alleged. It is equally referable to her ownership of the premises. Nor would this improvement by the plaintiff of her own property be such an act as to render it a fraud in the defendant to take advantage of the contract not being in writing. It is, however, to be observed that in the present case the plaintiff in altering her premises and expending the money in the alterations was doing so in accordance with requests and suggestions made to her or her employees from time to time by the defendant. It appears to me that this fact necessarily suggests the existence of some such contract as alleged. I think that any one on the spot who saw what was being done and the way in which it was being done would inevitably have come to the conclusion that the defendant must have a contract giving her some interest in the property. The act of the plaintiff in submitting, so far as she did submit, to the more or less constant interference of the defendant and in adopting, as from time to time she did adopt, the suggestions made by the defendant

[page 112] and in acceding, as she did accede, to the requests made by the defendant as to the method in which the flat should be constructed, are, in my opinion, referable only to a contract such as that alleged. In the somewhat similar case of Kaufman v Michael (1892) 18 VLR 375 the plaintiff agreed to let a house to the defendants, who were husband and wife. When this verbal agreement for a lease was made the defendants gave to the plaintiff a list signed by them of alterations which they wished to be made to the house. Among these alterations was the papering of a room with paper to be chosen by the wife and the removal of a hall lamp and water-heating apparatus from the premises which the defendants were then occupying and their installation at the subject premises. The wife selected a wallpaper to her taste, and the plaintiff had it hung and also carried out all other alterations. A’Beckett J concluded that the alterations made by the plaintiff on the faith of the agreement entitled him to have it enforced. If a tenant in possession acts on the faith of an agreement to grant him or her a further term and lays out money on the property, he or she may be in a position to enforce the agreement: Williams v Evans (1875) LR 19 Eq 547; Steadman v Steadman, above: but compare Budmore Pty Ltd v Johnson (1993) 6 BPR 97,486; see also [4.6]. A striking case is Polleyket v Georgeson (1878) 4 VLR (Eq) 207, where inconvenience suffered by the tenant was regarded as sufficient. There the plaintiff was the defendant’s tenant of a hotel for a term of three years. Four months before the expiration of the term the parties verbally agreed that a further lease should be granted, and the landlord was permitted to enter to paint and repair for the preservation of the property. The landlord entered accordingly, and by his workmen carried out repairs for a period of one month. The landlord’s men also entered and painted, causing inconvenience to the tenant. The tenant brought a successful suit for specific performance, alleging that he had suffered great inconvenience and damages as a result of the work, to which, as the defendant knew, he would not have submitted, but for the agreement to renew. Similarly, if a person is led to believe by the owner of land that he or she will be granted a lease of it and in anticipation of such grant and with the

approval of the owner he or she takes possession of the property and spends money on improving it, then a court of equity is likely to give effect to such a promise or expectation: Ramsden v Dyson (1866) LR 1 HL 129 at 170; Plimmer v Mayor of Wellington (1884) 9 App Cas 699; Timber Top Realty Pty Ltd v Mullens [1974] VR 312 at 317–18; cf Guilfoyle Pty Ltd v National Mutual Life Association of Australasia (2000) V ConvR ¶54-622 (CA).

The doctrine of Walsh v Lonsdale [4.8] Under the doctrine of Walsh v Lonsdale (1882) 21 Ch D 9 (CA), since the fusion of law and equity, a tenant holding under an agreement for a lease of which specific performance would be decreed is, generally speaking, in the same position as [page 113] if the lease had been executed. This so-called doctrine is founded upon the following statement of Sir George Jessel MR in Walsh v Lonsdale (at 14–15): There is an agreement for a lease under which possession has been given. Now since the Judicature Act the possession is held under the agreement. There are not two estates as there were formerly, one estate at common law by reason of the payment of the rent from year to year, and an estate in equity under the agreement. There is only one Court, and the equity rules prevail in it. The tenant holds under an agreement for a lease. He holds, therefore, under the same terms in equity as if a lease had been granted, it being a case in which both parties admit that relief is capable of being given by specific performance. That being so, he cannot complain of the exercise by the landlord of the same rights as the landlord would have had if a lease had been granted. On the other hand, he is protected in the same way as if a lease had been granted; he cannot be turned out by six months’ notice as a tenant from year to year. He has a right to say, ‘I have a lease in equity, and you can only re-enter if I have committed such a

breach of covenant as would if a lease had been granted have entitled you to re-enter according to the terms of a proper proviso for reentry.’ That being so, it appears to me that being a lessee in equity he cannot complain of the exercise of the right of distress merely because the actual parchment has not been signed and sealed. The appeal in Walsh v Lonsdale was from an order granting interlocutory relief (by Fry J). Although the other members of the Court of Appeal (Cotton and Lindley LJJ) agreed with the Master of the Rolls their attention was (as was that of Fry J) directed to the terms of the agreement for lease and maintenance of the status quo pending trial (see Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 250). In spite of these considerations which may, strictly, limit the authority of Walsh v Lonsdale the doctrine has generally been accepted and over a long period of time (see Seton’s Judgments and Orders, 7th ed, pp 2205–9); no doubt due, in part, to the standing of Sir George Jessel as an equity judge. The doctrine is an application of the maxim that equity considers as done that which ought to be done: see Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 at 11,174; and see Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 (CA) where it was emphasised that the existence of a lease in equity as a result of the application of the doctrine of Walsh v Lonsdale depends not only on the agreement being specifically enforceable but also upon the existence of sufficient right or interest in the purported ‘grantor’ to support the necessary decree for specific performance (particularly Nourse LJ (with whom Evans LJ agreed) at 408); cf Brunswick Development Pty Ltd v Shock Records Pty Ltd (1999) V ConvR ¶54604; and see [4.1]. As to the need for agreement as to essential terms as a prerequisite to any order for specific performance, see NZI Insurance Australia Ltd v Baryzcha (2003) 85 SASR 497 at 506 (FC), below. In more recent times the nature of the interest of a person who was ‘tenant’ under an agreement for lease was considered by the Supreme Court of New South Wales. In Baxton v Kara [1982] 1 NSWLR 604 it was argued, for the lessor, that the lessee should be denied specific performance as a result of approximately an 18 month [page 114]

delay taking action to protect his rights. It was argued that he should have sought an order for specific performance, directing an exchange of executed parts of the deed of lease. In spite of the fact that, due to an oversight, this had not occurred, the parties had clearly acted on the basis that it had. Cross J, at 607, had no difficulty in reaching the view that there existed an agreement for lease in the terms of the draft deed. In rejecting the lessor’s argument Cross J adopted Fry on Specific Performance, paras 1110–1111, pp 517–18: Where the contract is substantially executed, and the plaintiff is in possession of the property, and has got the equitable estate, so that the object of his action is only to clothe himself with the legal estate, time either will not run at all as laches to debar the plaintiff from his right, or it will be looked at less narrowly by the Court; per Lord Redesdale in Crofton v Ormsby 2 Sch & Lef 604, for the plaintiff has not been sleeping on his rights, but relying on his equitable title, without thinking it necessary to have his legal right perfected. See Cartan v Bury 10 I Ch R at 395; Homan v Skelton 11 I Ch R at 96. Therefore, where a tenant holds under a contract for a lease, pays his rent, and has possession of the property and the enjoyment of all the benefits given him by the contract, the effluxion of time will not be a ground for resisting its enforcement: Clarke v Moore, 1 Jon & L 723; Sharp v Milligan, 22 Beav 606 (affirmed by the LJJ); Shepheard v Walker LR 20 Eq 659, and so, where there was a contract for the lease of a shop and the sale of the stock, and the stock had been paid for, the plaintiff had been put into possession as lessee, and the rent had been paid — in fact, everything had been done but the execution of the lease, which the defendant had refused to execute on a ground which was untenable — specific performance of the lease was granted, notwithstanding considerable laches on the part of the plaintiff subsequent to the defendant’s refusal, but therefore without costs: Burke v Smyth, 3 Jon & L 193. See also Ridgway v Wharton 6 HLC 292 (per Lord St Leonards); and consider Brophy v Connolly, 7 I Ch R at 177; Finucane v Turner, 13 I Ch R 488 at 494. As is clear from the decision in Baxton v Kara a crucial issue was whether

specific performance of the agreement for lease could be granted and, in particular, whether the defence of laches could be raised against the plaintiff. It is often overlooked with respect to the doctrine of Walsh v Lonsdale that generally the only matter of any real interest to the parties is whether the agreement for lease is enforceable. Indeed, given the nature of the equitable jurisdiction it is difficult to see how it is possible to separate as some abstract concept the classification of the rights of the parties under an agreement for lease from its enforcement. If a court of equity will not enforce an agreement for lease (which is not enforceable at law by reason of failure to comply with formal requirements: see [1.6]) there is, effectively, no estate or interest. These general issues were considered by the High Court in Chan v Cresdon Pty Ltd in relation to the doctrine of Walsh v Lonsdale. In Chan v Cresdon Pty Ltd the High Court (Mason CJ and Brennan, Deane and McHugh JJ in a joint judgment) referred to Walsh v Lonsdale but noted with reference to [page 115] authorities (at 168 CLR 250–1) the view ‘championed’ by Lords Lindley and Parker, at 250: ‘… that a lease and an agreement for lease are two different things which can only be equated in equity for certain purposes if equity would decree specific performance of the agreement’. Their Honours concluded that the weight of English authority was against Sir George Jessel, but noted as an authority against this trend the House of Lords decision in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 924–5 and 944–5 (see at 168 CLR 251). Reference was made to decisions of the High Court with respect to the doctrine (at 168 CLR 251–2), namely: Redman v Permanent Trustee Co of NSW Ltd (1916) 22 CLR 84 at 96; National Trustees, Executors and Agency Co of Australasia Ltd v Boyd (1926) 39 CLR 72 at 82; York House Pty Ltd v Federal Commissioner of Taxation (1930) 43 CLR 427 at 435–6; Williams v Frayne (1937) 58 CLR 710; and Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 26–7. Their Honours made a general point and particular points in relation to these decisions. Generally (at 168 CLR 251): ‘… this Court, while acknowledging that an agreement for a

lease will be treated as giving rise to a lease in equity in accordance with the doctrine in Walsh v Lonsdale, has always rejected the notion that the lessee has a legal interest in the term.’ And more particularly (at 168 CLR 252–3): For present purposes these authorities establish two propositions. First, the court’s willingness to treat the agreement as a lease in equity, on the footing that equity regards as done what ought to be done and equity looks to the intent rather than the form, rests upon the specific enforceability of the agreement. Secondly, an agreement for a lease will be treated by a court administering equity as an equitable lease for the term agreed upon and, as between the parties, as the equivalent of a lease at law, though the lessee does not have a lease at law in the sense of having a legal interest in the term. The first proposition requires some elaboration or qualification in order to accommodate what has been said in later cases. Although it has been stated sometimes that the equitable interest is commensurate with what a court of equity would decree to enforce the contract, whether by way of specific performance (Connolly v Ryan [(1922) 30 CLR 498 at 506–7]; Brown v Heffer [(1967) 116 CLR 344 at 349]; Chang v Registrar of Titles [(1976) 137 CLR 177 at 184–5, 189–90]), injunction or otherwise (Tailby v Official Receiver [(1888) 13 App Cas 523 at 546–9]; Redman v Permanent Trustee Co [(1916) 22 CLR at 96]; Legione v Hateley [(1983) 152 CLR 406 at 446, 456]), the references in the earlier cases to specific performance should be understood in the sense of Sir Frederick Jordan’s explanation adopted by Deane and Dawson JJ in Stern v McArthur [(1988) 165 CLR 489 at 522]: Specific performance in this sense means not merely specific performance in the primary sense of the enforcing of an executory contract by compelling the execution of an assurance to complete it, but also the protection by injunction or otherwise of rights acquired under a contract which defines the rights of the parties: … ‘Chapters on Equity in New South Wales’, Select Legal Papers, 6th ed, 1947, p 52, n (e). In relation to the second proposition stated above Maitland, in his

Lectures on Equity, 2nd ed, 1936, p 158, in a statement quoted by Latham CJ in Williams v Frayne ((1937) 58 CLR at 720), commented: [page 116] An equitable right is not equivalent to a legal right; between the contracting parties an agreement for a lease may be as good as a lease … But introduce the third party and then you will see the difference. See also Chronopoulos v Caltex Oil (Aust) Pty Ltd [(1982) 70 FLR 8 at 1516; 45 ALR 481 at 489]. [Emphasis added.] The remaining issue was the effect of treating the agreement as a lease in equity with respect to remedies at law. With apparent approval reference was made to the following statement (at 168 CLR 253–4): … in Manchester Brewery Co v Coombs [[1901] 2 Ch 608 at 617], Farwell J observed that the application of the doctrine in Walsh v Lonsdale: … involves two questions: (1) Is there a contract of which specific performance can be obtained? (2) If Yes, will the title acquired by such specific performance justify at law the act complained of, or support at law the action in question? It is to be treated as though before the Judicature Acts there had been, first, a suit in equity for specific performance, and then an action at law between the same parties; and the doctrine is applicable only in those cases where specific performance can be obtained between the same parties in the same court, and at the same time as the subsequent legal question falls to be determined. His Lordship plainly considered that, if specific performance could be so obtained, then the agreement for lease was enforceable between the parties as a lease at law, as though the lease had been granted

pursuant to the agreement before the decree for specific performance [[1901] 2 Ch at 618]. The operation thus attributed to the Judicature Acts had the effect of enabling a party to an agreement to enforce, against another party to the agreement, legal remedies in respect of equitable rights and interests. In this respect the English cases referred to in the preceding paragraph proceed on the footing that the Judicature Acts have a procedural operation. This can be demonstrated by reference to the fact that, although there is no recorded instance of a court of equity exercising a jurisdiction to make an order for the payment of rent under an equitable lease, there was a jurisdiction to backdate specific performance to enable an action to be brought at law on the covenants in the lease. Nevertheless the authorities indicate that the jurisdiction to ‘backdate’ specific performance is to be exercised sparingly (see 168 CLR 254–5). For a discussion of procedure and appropriate orders, see Seton’s Judgments and Orders, paras 2205–2209. Chan v Cresdon Pty Ltd has been distinguished when, unlike the position in that case, the guarantee provides that it should bind the parties as if the lease had been registered: see Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235; [2001] ANZ ConvR 513; [2001] ANZ ConvR 577 (CA) (per Giles JA (with whom Handley and Stein JJA agreed) at [101], referring to Telado Pty Ltd v Vincent (1996) NSW ConvR ¶55-786). As to Chan v Cresdon Pty Ltd generally, see Butt (1990) 64 ALJ 353. Generally as to the application of the doctrine of Walsh v Lonsdale, see Moore v Dimond (1929) 43 CLR 105 at 112, 114 (and see [2.8] and [2.15]); Downie v Lockwood [1965] VR 257 (and see [6.8]); Charmar Electrical Pty Ltd v Minda Incorporated (1990) [page 117] 55 SASR 112 (FC) at 117–18; Wu v Glaros (1991) 55 SASR 408 (and see [6.8]); Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 at

11,174; S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 at 656; Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA); Marshall v Snowy River Council (1994) 6 BPR 97,483 (per McLelland CJ in Eq); and Telado Pty Ltd v Vincent (1996) 7 BPR 14,874 (CA); cf Robinson v Young [2005] NSWSC 777 (and see [6.8]). An agreement for lease may contain a condition precedent to its completion by execution of a lease at law. It is a question of construction and of fact whether a party seeking to avoid the agreement can rely on the conditions: see Peet & Co Ltd v Rocci [1985] WAR 164 at 168–70. As to the application of the doctrine to an oral agreement to assign a lease, see McMahon v Ambrose [1987] VR 817. Thus a tenant under an agreement for a lease may obtain an injunction to restrain the lessor from granting a lease to a third person which would defeat his or her own equity: City of Melbourne Gold Mining Co v R (1867) 4 WW & a’B (Eq) 148 at 156. The tenant may plead his or her equitable term as a defence to an action for the recovery of land brought in the Supreme Court and, if the tenant is sued in a magistrates’ court, he or she may set it up as ‘reasonable cause why possession should not be given’ within the meaning of s 33 of the Landlord and Tenant Act 1958 (Vic) (a provision empowering a magistrates’ court to issue a warrant for possession, in summary proceedings; repealed as from 1 September 2012 — see LL&T Comparative Table): Dalton v O’Gorman [1921] VLR 599; Healy v Southern Milk Transport Pty Ltd [1954] VLR 448. He or she may also bring an action for specific performance, and this remedy will be granted in a proper case even where the agreement is for a very short term (Lever v Koffler [1901] 1 Ch 543) or about to expire (see S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd at 122 ALR 656, applying Chan v Cresdon Pty Ltd at 168 CLR 254–5) but see [13.5]. Such a tenant may also obtain relief against forfeiture for non-payment of rent (Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49) or damages for breach of the agreement where the premises had been relet: Warwick Grove Pty Ltd v Wright (1976) 1 SR (WA) 69 (Dist Crt, WA). The equitable term which the tenant enjoys under Walsh v Lonsdale will not prevail against a bona fide purchaser for value of the legal estate without notice, either actual or constructive, of the equitable estate: see Chan v Cresdon Pty Ltd at 168 CLR 253, above. As to this, where the tenant is in possession,

protection is afforded by the rule in Hunt v Luck [1902] 1 Ch 428; [1900–03] All ER Rep 295, whereby possession of land by a tenant affects a purchaser of the land with notice of all that tenant’s rights. Section 42(2)(e) of the Transfer of Land Act 1958 (Vic) protects the interest of a tenant in possession of land under the operation of that Act: see Real Property Act 1900 (NSW) s 42(1) (d); Land Title Act 1994 (Qld) s 185(1)(b); Real Property Act 1886 (SA) s 69(h); Land Titles Act 1980 (Tas) s 40(3)(d); Transfer of Land Act 1893 (WA) s 68. [page 118] Regardless of the existence of divergent positions as to the effect of an agreement for lease it is clear that questions of specific performance will not arise unless the agreement for lease is complete in that it contains all the essential elements of an enforceable agreement for lease, viewed in the context of the particular circumstances: see NZI Insurance Australia Ltd v Baryzcha (2003) 85 SASR 497 (FC). The position in this respect was concisely stated by Debelle J (with whom Duggan and Williams JJ agreed) at 506 ([30]–[39]), particularly as follows: [31] The only essential characteristic of a lease is that it should give the right of exclusive possession of premises to a tenant: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47 at 49; Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323; Lewis v Bell (1985) 1 NSWLR 731 at 734. Although a lease usually provides for rent, the reservation of rent is not an essential element: Landale v Menzies (1909) 9 CLR 89 per Griffiths CJ at 100–101, per Barton J at 111; Commonwealth Life (Amalgamated) Assurance Co v Anderson (above) at 49; Burns v Dennis (1948) 65 WN(NSW) 55 at 56; Francis Longmore & Co Ltd v Stedman (above) at 323. However, where the intended landlord seeks payment of monies as consideration for allowing the intended tenant to occupy the premises, rent is an essential term of the contract: Harvey v Pratt [1965] 2 All ER 786 per Lord Denning MR at 788; Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396 per Murray J at 408. It follows that where rent is payable as

consideration for the occupation of premises, the essential elements of an enforceable agreement for a lease are that the agreement identifies the parties to the lease; identifies the land or premises the subject of the lease; enables the commencement and duration of the term to be clearly ascertained; and enables the rent to be ascertained. See Harvey v Pratt (above) and Copperart Pty Ltd v Bayside Developments Pty Ltd (above). In this case, it is possible to identify the parties, the premises the subject of the lease and the duration of the term and its commencement. The question is whether the parties have agreed the rent. And see Woodford Nominees Pty Ltd v Masjakan Medical Pty Ltd [1998] ANZ Conv Rep 254 (CA(Qld)) where it was found that no binding agreement for lease had been made because, in the particular circumstances, there had been no agreement as to an essential term, namely the annual rent payable; also Demtear Pty Ltd v Abelian Pty Ltd [2004] QSC 103 at [20]–[26] (per Muir J); though, as Demtear indicates, the failure to agree on an essential term will not give rise to fatal uncertainty if, first, the parties have agreed a mechanism for determining it or, second, reference to some objective criteria or standards enables the court to make a determination (per Muir J, at [20], referring to Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at 605 and 610–17; Attorney-General v Barker Bros Ltd (1976) 2 NZLR 495; and The Queensland Electricity Generating Board v New Hope Collieries Pty Ltd (1989) 1 Ll Rep 205 at 210 as authorities in support of the first [page 119] proposition and Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 in support of the second). Muir J, in Demtear, also made reference to the illusory contract argument: [21] The illusory contract argument is based on dicta of Gibbs J in Godecke v Kirwan [(1973) 129 CLR 629] where, after noting that

parties to a contract may leave essential terms for determination by a third person, including the solicitors for one of the parties, his Honour said [at 646–7] — I should perhaps make it clear that it does not necessarily follow from what I have said that an agreement which left further terms to be settled by one of the parties, rather than by his solicitors, would be treated as a concluded contract. In May and Butcher Ltd v The King ((1934) 2 KB, at p 21), Viscount Dunedin suggested that a sale of land which left the price to be settled by the buyer himself would be good. With great respect, it seems to me that there would be no binding contract in such a case, which would fall within the principle that ‘where words which by themselves constitute a promise are accompanied by words which show that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought’ [Reference to authorities omitted.] It might be suggested that the same principle would not apply if the determination of the price were left to the seller, for then it would be the promisee, not the promisor, who was left with the discretion as to performance. However, in Beattie v Fine ((1925) VLR 363), Cussen J drew no such distinction and held that an option for renewal ‘at a rental to be agreed upon by the lessor’ did not give rise to any contractual obligation. [22] The plaintiff placed reliance on Kabwand Pty Ltd v National Australia Bank Ltd [(1989) ATPR ¶40-950], in which the court, after referring to uncertainty arising through the parties’ failure to agree on a fundamental term and as a result of a party being left to choose whether he will perform it, said — A third but related principle is that there can be no concluded bargain if a vital matter has been left to the determination of one of the parties: Godecke v Kirwan (1973) 129 CLR per Gibbs J at p 647.

… Reference to the above passage from Gibbs J’s reasons in Godecke v Kirwan reveals that his Honour did not state the principle in such unqualified terms. [23] Kitto J, in Placer Development Ltd v The Commonwealth [(1969) 121 CLR 353 at 356], identified the principle in these terms — It is that wherever words which by themselves constitute a promise are accompanied by words showing that the promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract on which an action can be brought at all. The succinct statement of the principle in Leake on Contracts, 3rd ed, p 3: ‘Promissory expressions reserving an option as to the performance do not create a contract’ was approved by the Lord Justice, as it was later by Lord Wright in Hillas and Co Ltd v Arcos Ltd (1932) 147 LT 503, at p 517. [page 120] [24] It is impossible to fit within these principles a clause which permits a lessor to relocate a tenant to another premises in the same complex, not more than 10 percent smaller or larger and ‘as nearly as possible comparable’ to the old premises. [25] Williams J observed in York Air Conditioning [and Refrigeration (Australasia) Pty Ltd v Commonwealth (1949) 80 CLR 11 at 29. See also Lombard Tricity Finance Ltd v Paton (1989) 1 All ER 918] — But there is no reason why the parties to a contract should not agree that the determination of some of the incidents of the contract should be left to the decision of a third party or to one of themselves. Following on from this discussion, reference should be made to [11.7] and [14.7] in relation to the provision, or otherwise, of an ‘entire mechanism’ for

rent review and provisions for determination of rent by a third party, respectively. See also Insearch Ltd v Kin Hing Pty Ltd [2004] ANZ ConvR 111 where the repeated use by the parties of the words ‘subject to lease’ and the absence of agreement on a variety of matters upon which it was found the parties would have required agreement led to the finding that the parties had failed to reach an agreement even within the, so called, fourth category of Masters v Cameron (1954) 91 CLR 353; and see Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 at [45]–[65] (per Gillard J); and [4.1]. As to the doctrine of Walsh v Lonsdale in the context of equity generally, see Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 5th ed, [2270]–[2-315].

Damages [4.9] The circumstances in which damages may be recovered for the breach of an agreement for a lease which is struck at by the Statute of Frauds but saved by the operation of the doctrine of part performance are not clear. It is necessary to distinguish between damages at common law for breach of contract and damages under Lord Cairns’ Act, a distinction not always drawn in the cases. It is apprehended that the Statute of Frauds, if pleaded, will always be a defence to an action to recover damages at common law; in other words, the doctrine of part performance cannot be invoked to obtain common law damages. On the other hand, the doctrine of part performance can be relied upon in order to obtain damages under Lord Cairns’ Act, provided that the plaintiff is entitled to equitable relief. Lord Cairns’ Act provides that in all cases in which the court entertains an application for an injunction against a breach of any covenant contract or agreement, or against the commission or continuance of any wrongful act or for the specific performance of any covenant contract or agreement, the court may, if it thinks fit, award damages to the party injured either in addition to or in substitution for such injunction or specific performance. These damages may be assessed in such manner as the court directs. The opinion expressed above,

namely, that part performance will not support an action for damages at common law but [page 121] will support a claim for damages under the Act, provided that the plaintiff is entitled to equitable relief, is supported by J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 293–5, 303, 306 and 311; [1931] ALR 157; Dillon v Nash [1950] VLR 293 at 300; O’Rourke v Hoeven [1974] 1 NSWLR 622; Ellul v Oakes (1972) 3 SASR 377 at 382–3. An award of damages was made by a’Beckett J in Kaufman v Michael (1892) 18 VLR 375, part performance having been established. It is not clear whether the award was viewed by the learned judge as an award of damages at common law or an award under the Act. The reference made to Lavery v Pursell (1888) 39 Ch D 508 and the fact that the plaintiff was offered the alternative of a decree of specific performance suggest that the award was made under the Act; on the other hand, the observation that ‘the court can now administer both law and equity’ might be thought to suggest that damages were being awarded at common law. In M’Bean v Brown (1887) 13 VLR 726, the Full Court upheld an award of damages made in reliance upon part performance; the award so upheld appears to have been an award of common law damages. The judgment of Wells J in Ellul v Oakes (1972) 3 SASR 377 at 394–5 appears to proceed upon the basis that part performance will support an award of common law damages. Despite the decisions mentioned, it is submitted that the correct view is that a plaintiff who seeks to surmount the hurdle of the Statute of Frauds with the aid of part performance is restricted to obtaining damages under Lord Cairns’ Act and cannot obtain damages at common law.

Unenforceable agreement as a defence [4.10] Even though the agreement for a lease is in a form which does not satisfy the Statute of Frauds, a person who is in possession of land may rely upon the agreement as a defence to proceedings for the recovery of

possession, if he or she has partly performed the agreement, since equity will not permit the Statute of Frauds to be used as an engine of fraud. If there has been no sufficient act of part performance, there may, nonetheless, be some ground for refusing to permit a party to rely upon the statute. It may be that the absence of a sufficient writing cannot be relied upon by a party whose fraudulent conduct has prevented the drawing up of a sufficient writing. As to this, see Williams, The Statute of Frauds, pp 223 and following. Further, a person may, by his or her acts and words, so conduct himself or herself as to estop him or her from saying that a written contract is not a sufficient memorandum: Ford v Young (1882) 8 VLR (Eq) 93. The question which now arises is whether, where there is no sufficient act of part performance and no other ground for refusing to give effect to the Statute of Frauds, a party to an agreement for a lease may, nonetheless, rely upon that agreement as a defence in proceedings for the recovery of possession of the land, on the ground that to rely on the agreement by way of defence is not to bring an action charging the other party upon the agreement. In Kewley v Ball [1913] VLR 412, the [page 122] defendant was the tenant of certain premises under a written lease for a term of two years. Before the expiration of that term the complainant verbally agreed with the defendant that the lease should be extended for a further period of two years. Notwithstanding this, the complainant took proceedings in a court of petty sessions to recover possession of the premises from the defendant upon the basis that the defendant had ceased to be entitled to possession upon the expiration of the original two-year term. Hodges J took the view that the defendant was entitled to rely upon the verbal arrangement that had been made, on the ground that in so doing the defendant was bringing no action, but was merely standing on the defensive. The decision was considered by the High Court in Perpetual Executors and Trustees Assoc of Aust Ltd v Russell (1931) 45 CLR 146; [1931] ALR 89. There the defendant was the plaintiff’s tenant for a term of three years; the defendant had a verbal option to purchase the land, and exercised this option.

Thereupon a contract of sale came into existence which was, by reason of the Statute of Frauds, unenforceable. It was argued for the defendant that, notwithstanding the absence of a memorandum, he was entitled to remain in possession, since he was not bringing any action and was relying upon a good, but unenforceable contract by way of defence. This argument was rejected, the High Court holding that the reasoning in Kewley v Ball could not be supported and that a claim unenforceable by an action because of the statute could not be enforced by counter-claim or defence either at law or in equity. There are a number of other decisions to the same effect: Gray v Ellis [1925] St R Qd 209; Mason v Stevens (1943) 60 WN (NSW) 70; Carter v Smith (1952) 52 SR (NSW) 290; 69 WN (NSW) 326; Osland v Foot (No 1) (1951) 69 WN (NSW) 320. In considering the decisions of the Supreme Court of New South Wales, it should be remembered that there were some particular problems that arose from the separate administration of law and equity in that state.

Action for specific performance [4.11] As to the jurisdiction to decree specific performance of an agreement for a lease, and the practice and procedure in an action for specific performance of such an agreement, see [13.2], [13.3], [13.5]–[13.9]; and see also Seton’s Judgments and Orders, pp 2205–9.

[page 123]

5 Capacity to Make and Take Leases Capacity to make and take leases [5.1] The general rule is that any person may make or take a lease. To this rule there are, however, still a number of exceptions, representing cases where capacity or power to grant or accept a lease is limited; certain former restrictions have been abolished by statute. It is proposed to consider the following cases: aliens; infants; persons of unsound mind; married women; the Crown; municipalities; statutory corporations; liquidators; receivers; trustees in bankruptcy; unincorporated associations; agents; persons granting leases to themselves; co-owners; mortgagors and mortgagees; trustees; personal representatives. As to the effect of granting a lease or sublease without the consent of the appropriate person as required by the terms of a statutory power to lease, see Palmdale Insurance Limited v Sprenger [1988] Qd R 414 and [15.16].

Aliens [5.2] Every alien friend resident in a state may acquire and hold and may convey or otherwise dispose of every description of property whether real or personal in the same manner as if he or she was a natural born subject of Her Majesty: Conveyancing Act 1919 (NSW) s 146A; Property Law Act 1974 (Qld) s 15A; Law of Property Act 1936 (SA) s 24; Aliens Act 1913 (Tas) s 3; Property Law Act 1958 (Vic) s 27; Naturalisation Act 1871 (WA) s 2. As to

the position of leases granted to alien enemies, see London & Northern Estates Co v Schlesinger [1916] 1 KB 20; Halsey v Lowenfield [1916] 2 KB 707; see further In the Will of Doig [1916] VLR 698. As to the acquisition of an interest in land by a ‘foreign person’ see Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 (Cth), new ss 12 and 67 in the principal Act. [page 124]

Infants [5.3] A lease made by an infant is not void, but voidable by the infant during minority or within a reasonable time after coming of age: Crick v Murray (1882) 3 LR (NSW) (L) 20; Ketsey’s case (1613) Cro Jac 320; 79 ER 274; London and North Western Railway Co v McMichael (1850) 5 Ex 114; 155 ER 374. The lessee cannot avoid the lease: Zouch v Parsons (1765) 3 Burr 1794; 97 ER 1103; Gibbons v Wright (1954) 91 CLR 423 at 447; [1954] ALR 383. A lease to an infant stands in the same position: Davies v Beynon-Harris (1931) 47 TLR 424. These difficulties may be overcome by interposing trustees for the infant. In England, since the changes wrought in the land law by the Law of Property Act 1925, an infant is incapable of holding a legal estate in land; this radical difference from the Australian law must be borne in mind when making use of the English texts.

Persons of unsound mind [5.4] A lease made by or to a person of unsound mind may in an appropriate case be avoided by that person or their representatives (but not by the other party to the transaction: Gibbons v Wright (1954) 91 CLR 423 at 439; [1954] ALR 383). In considering the question of capacity, regard must be had to the subject matter of the particular case. The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires in relation to each particular matter or piece of business transacted

that each party shall have such soundness of mind as to be capable of understanding the general nature of what he or she is doing by his or her participation. The mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by the means of the instrument and may be described as the capacity to understand the nature of that transaction when it is explained: Gibbons v Wright (1954) 91 CLR at 437–8. That a person may be subject to the most bizarre delusions and yet be competent to execute a lease is shown by the case of Jenkins v Morris (1880) 14 Ch D 674. It is now settled that not only the contract but also the conveyance of a person of unsound mind is not void, but only (in appropriate circumstances) voidable at the option of that person or his or her representatives: Gibbons v Wright. What those circumstances are has yet to be finally determined. If the other party to the transaction knew the person with whom he or she was dealing to be of unsound mind, the right of avoidance will arise; it is not clear whether in the absence of such knowledge the existence of circumstances making the transaction unfair will suffice to give rise to the right: Imperial Loan Co v Stone [1892] 1 QB 599; [1891–94] All ER Rep 412; York Glass Co v Jubb (1925) 134 LT 36; [1925] All ER Rep 285; Gibbons v Wright at CLR 441 and 444. [page 125] The position of a person who is intoxicated at the time of the transaction is considered in Blomley v Ryan (1956) 99 CLR 362. A lease of the property of a mentally ill person may be granted under statutory powers in some states: NSW Trustee and Guardianship Act 2009 (NSW) s 16; Guardianship and Administration Act 1993 (SA) s 39.

Married women [5.5] A married woman is capable of acquiring, holding and disposing of any property whatsoever, of rendering herself and being rendered liable in respect of any contract, debt or obligation and of suing and being sued in respect of

any contract, debt or obligation, in all respects as if she were a feme sole: Married Women (Restraint upon Anticipation) Act 1952 (Qld) s 2; Law of Property Act 1936 (SA) s 92(1); Married Women’s Property Act 1935 (Tas) s 3; Marriage Act 1958 (Vic) s 156(1). Generally, see the legislation which derives from the Married Women’s Property Acts: Married Persons (Equality of Status) Act 1996 (NSW); Married Women’s Property Act 1890 (Qld); Law of Property Act 1936 (SA) ss 92–111; Married Women’s Property Act 1935 (Tas); Marriage Act 1958 (Vic) Pt VIII.

The Crown [5.6] The matter of Crown lands generally, including the grant of leases thereof, is dealt with under Crown lands legislation in the various states (see, for example, Crown Land Management Act 2016 (NSW) s 5.16; Land Act 1994 (Qld); Land Act 1958 (Vic)). It was long ago recognised that the relationship between the Crown and the holders of Crown lands under the Land Acts of the Australian states was of a contractual nature: Kickham v R (1882) 8 VLR (Eq) 1 at 6; O’Keefe v Williams (1910) 11 CLR 171 at 190; [1911] ALR 113. Accordingly, relief against forfeiture for nonpayment of rent may be granted to a tenant of the Crown: Kickham v R (1882) 8 VLR (Eq) 1; R v Dale [1906] VLR 662. It should be noted, however, that by s 146(6) of the Property Law Act 1958 (Vic) (the provision dealing with relief against forfeiture generally), the section shall not apply to leases by the Crown. For a discussion of the ambit and effect of the corresponding exclusion in New South Wales, see (1964) 38 ALJ 289; material differences between state legislation should be borne in mind in considering the suggestions contained in this article. From time to time reference will need to be made to transitional provisions in Crown lands or other legislation intended to re-vest property in a reconstituted corporation, the Crown, or a private purchaser of the reversion. For example, in Victoria, references in Crown leases to the now dissolved Board of Land and Works must be taken as [page 126]

references to the Minister of Lands: Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported); see also Land Act 1958 (Vic) s 100. As to whether the Crown is the tenant where the premises in question have been leased pursuant to a document which names a minister as tenant, see Town Investments Ltd v Dept of Environment [1978] AC 359. Civil proceedings by and against the Crown are now dealt with in Crown Proceedings Act 1958 (Vic) Pt II. See corresponding legislation in other states: Crown Proceedings Act 1988 (NSW); Crown Proceedings Act 1980 (Qld); Crown Proceedings Act 1992 (SA); Crown Suits Act 1947 (WA). Some landlord and tenant legislation contains provisions which do not apply to the Crown; for example, the now repealed Pt V of the Landlord and Tenant Act 1958 (Vic) dealing with the control of rents and recovery of possession of prescribed premises (repealed as from 1 September 2012 — see LL&T Comparative Table), did not bind the Crown in right of the Commonwealth or of the state (s 50). The jurisdiction of the Supreme Court of New South Wales to entertain proceedings in ejectment by the Commonwealth was considered in Commonwealth v Anderson (1961) 105 CLR 303; [1961] ALR 354. Whether ‘landlord’ in a statutory provision included the Crown was considered in Commonwealth v Rhind (1966) 119 CLR 584; [1967] ALR 483. Quite apart from the question of the extent of provisions empowering the Crown to grant leases there are also limitations imposed by the doctrine of ‘executive necessity’, as to which see City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 (FC) (at [43]–[59], particularly [43]–[46] (per Ipp J)): [43] This rule was stated by Rowlatt J in Rederiaktiebolaget Amphitrite v The King [1921] 3 KB 500 at 503 as follows: [I]t is not competent for the Government to fetter its future executive action which must necessarily be determined by the needs of the community when the question arises. It cannot by contract hamper its freedom of action in matters which concern the welfare of the State. [44] Earlier, in Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623 the House of Lords had expressed similar views. In Birkdale District Electric Supply Co v Southport Corp [1926] AC 355 at 364, it was held that a

local authority, entrusted by the legislature with powers and duties for public purposes, cannot divest itself of those powers and duties, and cannot enter into any contract or take any action incompatible with the due exercise of its powers or the discharge of its duties. Mason J in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 cited Birkdale District Electric Supply Co Ltd v Southport Corp as authority in saying (at 74): There is a general principle of law that a public authority cannot preclude itself from exercising important discretionary powers or performing public duties by incompatible contractual or other undertakings. [45] Triggs v Staines Urban District Council [1969] 1 Ch 10 is a helpful example of the rule. A local authority reserved property owned by Triggs as proposed public open [page 127] space but agreed with him that the land should be released from reservation if it did not purchase the land by a certain time. The local authority also agreed that so long as the land was occupied by the existing tenants, it would not purchase the land either voluntarily or compulsorily during a certain period and would not make any claim for betterment. When Triggs died, his executor claimed declarations that the agreement was ultra vires the authority and void ab initio. Cross J agreed, saying (at 18): The council could not effectively contract not to exercise its statutory powers or to abdicate its statutory duties. Hence, Cross J found, following Birkdale District Electric Supply Co Ltd v Corp of Southport, that the promises made by the local authority were void and unenforceable against it. [46] The rule of executive necessity is of application in the present case as, at the relevant times, by s 7 of the Town Planning Act, the City

had the power, to be exercised in the public good, to make or amend a town planning scheme, and the term contended for by Heytesbury and upheld by White J would impinge on the City’s freedom of action in so exercising its powers. That is to say, were the leases to be construed so as to contain a promise by the City that the lessee would have the quiet enjoyment of the leased premises for the purpose of conducting a manufacturing business thereon, the City would have committed a breach of contract by procuring the enactment of the Town Planning Amendment.

Municipalities [5.7] Wide leasing powers are conferred upon municipalities by local government legislation. For example, in Victoria, municipalities may let on lease any land to any person for a term of 50 years or less and subject to any exceptions, reservations, covenants and conditions: Local Government Act 1989 s 190(1) and (2). Under s 190(2) a municipal council is required to give public notice of certain proposed leases. Section 190(4) enables a person to make submissions in relation to the proposed lease. Provision is also made for the granting of leases (with or without consideration) to the Crown, a Minister of the Crown, a public body, trustees appointed under any Act to hold the land on trust for public or municipal purposes, or any hospital: s 191. The effect of the grant of a lease by a municipality without the approval of the Executive was considered in Queensland Television Ltd v Federal Commissioner of Taxation (1969) 1 ATR 419; 119 CLR 167 (as to the effect of a lease granted other than in accordance with statutory enabling provisions, see [5.8]). The council may not agree that its tenant should not pay rates, although it may agree that he or she need pay the rates in consideration of a specified rent, so that the rates are deducted from the rent and credited to the tenant as paid by him or her: Mayor of Bendigo v Burke [1917] VLR 531. In City of Melbourne v Holdenson and Nielson Fresh Foods Pty Ltd [1959] VR 626 at 633, an express power to grant leases conferred upon the City of Melbourne was held to carry with it the implied right to terminate such leases. Quite apart from the question of the extent of provisions empowering municipalities to grant leases there

[page 128] are also limitations imposed by the doctrine of ‘executive necessity’, as to which see City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 (FC)(at [43]–[59], particularly [43]–[46] (per Ipp J); and see [5.6].

Statutory corporations [5.8] Statutory corporations are persons under a disability: R v Registrar of Titles; Ex parte Commonwealth (1915) 20 CLR 379 at 404; 21 ALR 435 (per Powers J). For it is a rigid principle that where an Act of Parliament creates a corporation the creature of the particular statute is to be deemed to have only those powers which are conferred upon it by the statute, and everything else is prohibited: Ashbury Railway Carriage & Iron Co v Riche (1875) LR 7 HL 653; [1874–80] All ER Rep Ext 2219; Re Metropolitan Permanent Building & Investment Society (1881) 7 VLR (Eq) 87. It follows from this principle that such a corporation can grant or accept leases only if power to do so is expressly or by implication conferred by the relative statute. Express power to grant and take leases is almost invariably conferred upon a corporation by the statute creating it, although sometimes only a limited power is given. If a statutory corporation other than a company incorporated under the Corporations Act grants a lease in excess of the statutory powers conferred upon it, as by granting a lease for a term greater than that authorised, the lease is wholly void; moreover, in such a case a plea of estoppel cannot be set up: Simpson v Dunedin Drill Shed Commissioners (1885) 3 NZLR 402, Otago Harbor Board v Spedding (1885) 4 NZLR 272; Rhyl Urban District Council v Rhyl Amusements Board [1959] 1 WLR 465; Sutherland Shire Council v James [1963] NSWR 1573; 63 SR (NSW) 273; and see Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231 at 236–7; but compare Starr v Barbaro (1986) NSW ConvR ¶55-315 where Powell J made orders granting a licence to lessees under a prohibited lease in circumstances which required the conclusion that the lessees had an equity in the property. In the case of a company incorporated under the Corporations Act, the company’s constitution will often be found to contain a power to grant and

accept leases, although this is no longer necessary in view of s 124 of the Corporations Act which provides that ‘a company has the legal capacity and powers of an individual both in and outside this jurisdiction’. This general power is nevertheless subject to any prohibitions or restrictions on the exercise of any power contained in the company’s constitution (see s 125(1) and (2) of the Corporations Act). The rule in Royal British Bank v Turquand (1856) 6 E & B 327; 119 ER 886 (the ‘indoor management’ rule) was applied so as to make a lease binding on a company notwithstanding some irregularity with respect to the exercise of a power: Plomley v T K Steanes Ltd (1898) 19 LR (NSW) 215. The question of whether the company intended to enter into a lease or an agreement for a lease might be resolved by ascertaining the intention of the company: H L Bolton [page 129] (Engineering) Co Ltd v T J Braham & Sons Ltd [1957] 1 QB 159; [1956] 3 All ER 624; Poppett’s (Caterers) Ltd v Maidenhead Corp [1971] 1 WLR 69. See now Corporations Act ss 125 and 129(4). Quite apart from the question of the extent of provisions empowering statutory corporations to grant leases there are also limitations imposed by the doctrine of ‘executive necessity’, as to which see City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 (FC)(at [43]–[59], particularly [43]–[46] (per Ipp J); and see [5.6]. It may also be necessary to consider whether a lease granted by a company while otherwise authorised is nonetheless struck at by some principle of company law. Where a company which had erected a building of flats contracted to grant to each holder of certain of its shares a lease for 99 years of one of such flats at a rental to be fixed each year by the directors of the company at an amount sufficient only to meet outgoings with some provision for a reserve fund, but not including any amount as landlord’s reward, the grant of the lease was held to amount to a return of capital to shareholders and to be ultra vires the company even though such an arrangement was expressly authorised by the company’s memorandum of association: Jenkins v Harbour View Courts Ltd [1966] NZLR 1. See s 123(12) and (13) of the Companies

Code and see the article by Cassidy in (1970) 1 ACLR 72: see now s 258B of the Corporations Act. So far as the matter of form is concerned, at common law a lease by a corporation must as a general rule be made by deed: R v Chipping-Norton (1804) 5 East 239; 102 ER 1061. In the case of a company incorporated under the Corporations Act, any contract, including a lease, which if made between private persons might be validly made by mere writing or by parol, may be made on behalf of the company in the manner which would bind such persons: Corporations Act s 126 (formerly Companies Act 1961 s 35). For an example of the application of s 35 of the Companies Act 1961 to a lease, see 195 Crown St Pty Ltd v Hoare [1969] 1 NSWR 193. A British corporation, if so empowered by its Act of incorporation or other charter, is capable of holding land in Victoria: Re Transfer from Balfour to Public Trustee [1916] VLR 397. By s 601CY of the Corporations Act a registered foreign company may hold land. An express power to grant leases conferred upon a corporation may be held to carry with it an implied right to terminate them: City of Melbourne v Holdenson and Nielson Fresh Foods Pty Ltd [1959] VR 626 at 633. As to whether a lease sealed by a company may be regarded as executed only as an escrow, see D’Silva v Lister House Development Ltd [1971] 1 Ch 17; [1970] 1 All ER 858. An ‘exempt public authority’ is not a corporation for the purposes of the Corporations Act: ss 9 and 57A(2). As to the meaning of a ‘public authority’, see Re Honey Pool of Western Australia (1988) 6 ACLC 208 (SC(WA)); and see Electricity Trust of South Australia v Linterns Ltd [1950] SASR 133. [page 130]

Administrators and liquidators [5.9] Administrators may seek directions under s 90–20 of the Insolvency Practice Schedule (Corporations) of the Corporations Act 2001 (Cth) (Sch 2 of that Act) in relation to how to deal with a lease by a company in administration; which may include an order for leave to assign the lease under s 442C: see In the matter of Brickworks Markets Pty Ltd (subject to a deed of

Company Arrangement) (FCA, Mansfield J, 21 April 1997, unreported). Should the company continue to use or occupy property under an agreement existing before administration, administrators are liable for rent after a seven-day period, from the date of administration, expires: s 443B(2). Administrators are not, however, taken to have adopted the agreement: s 443B(9). Administrators may avoid such liability by serving a notice on the owner or lessor within the first seven days of the administration stating that the company does not intend to exercise or assert any rights in relation to the property and specifying the location of the property, if the administrator has knowledge, whether constructive or actual, of that location: s 443B(3). However, any notice will lose its effect if the administrator revokes the notice or the company exercises, or purports to exercise, a right against the owner or lessor. The liability to pay rent may also be discharged if a receiver is appointed to the particular property; or a secured party takes possession or control of the property; or the court excuses the administrators from the liability: s 443B(7), (8). see Featherby v Read [2002] WASC 251 and Nardell Coal Corporation Pty Ltd (in liq) v Hunter Valley Coal Processing Pty Ltd (2003) 46 ASCR 467 for applications of s 443B(8). The powers of a liquidator are dealt with by ss 477 and 506 of the Corporations Act 2001 (Cth). By s 477(2)(m), the liquidator may do all such other things as are necessary for winding up the affairs of the company and distributing its property. This power is wide enough to cover the leasing of property of the company in an appropriate case: Re Premier Permanent Building Society (1890) 16 VLR 643. It has also been held that, as long as the granting of leases is a step in the carrying on of a business for the purposes of s 477(1) (a), that provision is wide enough to permit the granting of leases without having to rely on s 477(2)(m): Warne v GDK Financial Solutions Pty Ltd (2006) 233 ALR 181 at 193. Leasing is prima facie inconsistent with liquidation, however, and the liquidator may grant leases only where to do so is advantageous to the liquidation: Re Federal Bank of Australia Ltd (1895) 6 BC (NSW) 3. If the lessee is a company and goes into liquidation, the lessor may not prove for future rent and at the same time keep the term outstanding: Commissioner of Stamp Duties v Brasch (1937) 57 CLR 69 at 86; [1937] ALR 246. The disclaimer by a liquidator of an onerous lease held by the company is dealt with at [16.25].

The liability of a liquidator for rent accrued since the commencement of the winding up was considered in Re ABC Coupler & Engineering Co Ltd (No 3) [1970] 1 All ER 650; see further Re Downer Enterprises Ltd [1974] 1 WLR 1460. [page 131]

Receivers [5.10] A receiver, or receiver or manager, appointed by the court cannot grant a lease without the sanction of the court: Corporations Act 2001 (Cth) s 420(2)(b); Re Cripps [1946] Ch 265; see further Kerr and Hunter on Receivers and Administrators, (19th ed, 2010) pp 201–3. Where the court specifically lists the powers (but not all) from s 420(2) of the Corporations Act 2001 (Cth) under its orders, the order shall be read as restricting the powers of the receiver to those under the order: Australian Securities & Investment Comm v Australian Investors Forum Pty Ltd (2003) 44 ACSR 503; [2003] NSWSC 130. The powers of a receiver, or receiver and manager, appointed by the holder of a debenture are also to be ascertained by reference to that instrument: Corporations Act 2001 (Cth) s 420(2). This will often confer upon the person so appointed a power of leasing the mortgaged property. Note also the provisions of s 99(17) of the Property Law Act 1958 (Vic). (See also Conveyancing Act 1919 (NSW) s 106(16), whereby the mortgagee may delegate to the receiver his or her power of leasing.) Problems arise in practice with regard to premises occupied by companies over whose assets a receiver is appointed, the question usually being whether the receiver is liable for rent. A receiver, whether appointed by the court or appointed by a debenture-holder, is not by reason merely of his or her appointment liable for the rent of premises leased to the company of which he or she has been appointed receiver: Hay v Swedish & Norwegian Railway Co Ltd (1892) 8 TLR 775; Consolidated Entertainments Ltd v Taylor [1937] 4 All ER 432; Rangatira Pty Ltd v Viola Hallam Ltd [1957] NZLR 1188. As to the effect of, or a possible means of avoiding the consequences of, the appointment of a receiver of an intermediate landlord by directing subtenants to pay rent direct to the superior

landlord, see Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 All ER 1161 (CA); discussed in All ER Rev 1989 p 191. By statute, any receiver or other authorised person entering into possession of any assets of a company for the purpose of enforcing any charge shall, notwithstanding any agreement to the contrary, but without prejudice to his or her rights against the company or any other person, be liable for debts incurred by him or her in the course of the receivership or possession for services rendered, goods purchased or property hired, leased, used or occupied: Corporations Act 2001(Cth) s 419(1). Under section 419A, a controller (defined as a receiver, or receiver and manager, in relation to property of a corporation under s 9) is required to pay rent where the company, under a pre-existing agreement before the control date, occupies, uses or remains in possession of property leased from a third party. The controller’s liability to pay rent is triggered after a seven-day period, from the date of the controller’s appointment, expires: s 419A(2). Despite this liability to pay rent, it should also be noted that the controller is not taken to have adopted the agreement: s 419A(8). In any case, the controller may avoid this liability by providing the owner or lessor notice of the appointment within the seven-day period, indicating the controller’s intent not to exercise rights over the property, and not to use the [page 132] property: s 419A(3). Under s 419A(7) the controller may also request the court to excuse it from liability, though the court will exercise its discretion within the scope and purpose of the act: see Nardell Coal Corporation Pty Ltd (in liq) v Hunter Valley Coal Processing Pty Ltd (2003) 46 ACSR 467 for application of s 419A(7). It should also be noted that any discharge of the receiver’s liability will leave the company’s liability unaffected.

Trustees in bankruptcy [5.11] By s 134(1)(ab) of the Bankruptcy Act 1966, a trustee in bankruptcy may, subject to the Act, lease any property of the bankrupt. The right of a

trustee in bankruptcy to disclaim an onerous lease held by the bankrupt is considered in [16.25]. Generally, see O’Donovan and Hammond, ‘Insolvency Aspects of Property Law’ (1993) 1 APLJ 211.

Unincorporated associations [5.12] A lease cannot be granted to an unincorporated association: Freeman v McManus [1958] VR 15, where the proceedings concerned a room at the Trades Hall alleged to have been let by the Melbourne Trades Hall Council to the Australian Labor Party. O’Bryan J held that this purported lease to an unincorporated body was a nullity, and accordingly (at 16 and 18) found it unnecessary to consider whether the Trades Hall Council (evidently also an unincorporated association) was, in view of its lack of legal personality, capable of granting a lease. Freeman v McManus was applied in Carlton Cricket etc Club v Joseph [1970] VR 487. A lease may be granted to trustees for an unincorporated body: Freeman v McManus at 18–19 and 21–2. Similarly, the rule that an unincorporated association may not hold a lease does not mean that partners may not be lessees. For in such cases the lease is merely one to an aggregate of individuals. What is not possible is the grant of a lease to a fluctuating body of persons, such as the members of an association from time to time. A lease may be granted to the members of a club or similar body only in the sense that the persons who were members at the time of the grant will remain the lessees notwithstanding that thereafter some of them may cease to be members and others may take their place (at 19). Where one partner purports to give or take a lease on behalf of the firm it may be necessary to consider whether he or she had express or implied authority to do so. In Sharp v Milligan (1856) 22 Beav 606; 52 ER 1242, the question of authority to take a lease was considered, while in Macky v Cafe Monico [1906] 25 NZLR 689, the matter for consideration was that of authority to grant a lease. Where partners take a lease as part of the partnership property or as an accessory to the trade carried on by them, equity will regard them as holding the lease as tenants-in-common: Cook v Rowe [1954] VLR 309 at 312. In Chan v Zacharia (1984) 53 ALR 417 it was held

[page 133] that a tenant held a new lease as a constructive trustee where he had obtained the new lease for himself rather than exercise an option for renewal of the former lease which was held with his former partner.

Agents [5.13] One person may authorise another to grant a lease on his or her behalf: Hamilton v Clanricarde (1762) 1 Brown 341; 1 ER 608. No particular form is required for the authority to grant a lease, unless the lease is to be by deed, in which case the authority must also be by deed: Berkeley v Hardy (1826) 5 B & C 355; 108 ER 132. Formerly a lease under seal executed by an agent was required to be executed in the name of the principal: Wilks v Back (1802) 2 East 142; 102 ER 323, but by ss 12 and 27 of the Power of Attorney Act 2014 (Vic), it is provided that the donee of a power of attorney may, if that person thinks fit, execute a deed in his or her own name and with his or her own seal: see Powers of Attorney Act 2003 (NSW) s 43; Power of Attorney Act 1998 (Qld) s 69; Powers of Attorney and Agency Act 1984 (SA) ss 5, 13; Powers of Attorney Act 2000 (Tas) s 23; Property Law Act 1969 (WA) s 84. Where a lease is executed by an attorney under power, but contains covenants in excess of such power the lease is void altogether and not merely as respects the excess. So where the agent was authorised to grant leases containing usual and reasonable covenants and executed a lease containing covenants which were found to be unreasonable it was held that the lease was altogether void: Blake v Lane (1876) 2 VLR (L) 54. A power of attorney gave the attorney full powers to lease land for as long a term as he thought fit and to sell it on such terms as he thought fit. A lease containing an option to purchase fell within the terms of this power: Rotorua and Bay of Plenty Hunt Club v Baker [1941] NZLR 669. A lease may be granted to one person as agent for another or others provided that the necessary authority exists. See Jarrott v Ackerley (1916) 85 LJ Ch 135, where Eve J observed that the supposed sublease could not be regarded as a lease to all the persons who were members of the society at the

time of its execution, since no one had undertaken or authorised any one on his or her behalf to undertake the obligations imposed on a lessee; compare Freeman v McManus [1958] VR 15 at 24. A mere collector of rents has no authority to create a tenancy: McCalman v Higgins [1960] NSWR 739; 78 WN (NSW) 603 at 607. The case of a lease taken by an agent as such is to be distinguished from the case where an agent obtains from his or her principal a lease which that person holds on his or her own behalf. Where this occurs, the agent may be required to show that he or she took no advantage of his or her position and that the transaction is perfectly fair and reasonable: Ormond v Hutchinson (1809) Ves 94; 33 ER 919; Selsey v Rhoades (1824) 2 S & S 41; 57 ER 260. As to the general statutory requirements with respect to an agent being properly authorised in writing to act, see [1.6] and [4.3]. [page 134]

Persons granting leases to themselves [5.14] As to whether persons may grant leases to themselves, or themselves and others, reference should be made to Parker v Sell (1890) 16 VLR 271; and also Rye v Rye [1962] AC 496, particularly at 514 where Lord Denning said: … I have come to the clear opinion that even under the [Law of Property Act 1925] a person cannot grant a tenancy to himself: for the simple reason that every tenancy is based on an agreement between two persons and contains covenants expressed or implied by the one person with the other. Now if a man cannot agree with himself, I do not see how he can grant a tenancy to himself. Is the tenancy to be good and the covenants bad? I do not think so. The one transaction cannot be split up in that way. The tenancy must stand or fall with the agreement on which it is founded and with the covenants contained in it: and as they fall, so does the tenancy. See also Kildrummy (Jersey) Ltd v Inland Revenue Commissioners [1990] STC

657; Grey v Ellison (1856) 1 Giff 438; 65 ER 990; and Joseph v Joseph [1967] Ch 78; see also [5.15]. As these cases indicate, the general position is that it is not possible for persons to grant a lease to themselves, if for no other reason than because persons cannot enforce covenants against themselves. The position is not changed where the parties to the purported lease are different persons but where the only function of the ‘landlord’ is to hold the beneficial interest in the ‘lease’ for the ‘tenant’: see Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 (CA), particularly at 401 (per Nourse LJ) where the passage from the speech of Lord Denning in Rye v Rye, above, was adopted and applied.

Co-owners [5.15] Leases may be granted either by or to co-owners, and the co-owners may be either joint tenants or tenants-in-common. Throughout this discussion the expression ‘joint tenant’ is used with reference to co-ownership; a joint tenant in this sense may be either a landlord or a tenant, that is to say, one of the owners either of the reversion or of the term. It should be noted that the description ‘joint’ is often used merely to signify that the persons to whom it is applied are all parties to the one lease. So tenants-in-common who join in granting a lease of the premises may be described as ‘joint lessors’ (as in Rogers v Ventura [1955] VLR 139 at 140), and persons to whom a lease is granted may be described as ‘joint lessees’, notwithstanding that they hold the term as tenants-in-common. Such usage is confusing and ought to be eschewed, for it tends to suggest that the lessors (or lessees) concerned are not merely parties to the one lease, but also joint tenants in the strict sense. It is proposed to consider first the position of co-owners as landlords and then to consider their position as tenants. [page 135] When the granting of a lease by co-owners is under consideration, it is necessary to distinguish between the letting of the whole and the letting of the

respective shares of the lessors. Where land is owned by joint tenants, all may join to lease the whole to a stranger. Though upon a joint lease by joint tenants each may perhaps be regarded as demising his or her own share, this is not the only operation of such a lease; the true character of the demise is that the tenant holds, not merely the share of each, but the whole of all. See Doe d Aslin v Summersett (1830) 1 B & Ad 135; 109 ER 738, where the court, in holding that the demise operated in part as a demise by each of his or her own share, evidently treated the word ‘my’ in Littleton’s expression ‘per my et per tout’ as meaning ‘half’, and so fell into the error mentioned by Dixon J in Wright v Gibbons (1949) 78 CLR 313 at 330; [1949] ALR 287. In Doe d Aslin v Summersett it was held that a notice to quit given to the lessee by one joint tenant was effective to determine the tenancy, upon the ground that a periodic tenancy granted by joint tenants is a tenancy of the whole to continue until either the lessee or all the lessors choose to determine it by notice. See further Leek & Moorlands Building Society v Clark [1952] 2 QB 188; 2 All ER 492; and see Parsons v Parsons [1983] 1 WLR 1390; Annen v Rattee [1985] 1 EGLR 136 (CA). The parties may by agreement stipulate that all joint tenants must join in giving notice to quit to the lessee. Similarly, for example, the position may be affected by statute, as in Rogers v Ventura [1955] VLR 139, which established that the effect of the meaning of ‘lessor’ in s 37(3) of the Landlord and Tenant Act 1948 is to require a notice to quit to be given by all lessors (a provision repealed as from 1 September 2012 — see LL&T Comparative Table). A lease by joint tenants to one of their number is effective. This was so even at common law, notwithstanding the old rule that a person could not make a contract with him or herself, or with him or herself and others (Parker v Sell (1890) 16 VLR 271; Napier v Williams [1911] 1 Ch 361). These decisions treat the lessors other than the lessee as demising their undivided shares to their co-tenant. It has been suggested in a learned article by Buttery, ‘Leases by Joint Tenants’, (1944) 17 ALJ 292 at 294, that such leases may now be sought to be supported under s 72(4) of the Property Law Act 1958 (Vic), whereby two or more persons may convey any property vested in them to any one or more of themselves in like manner as they could have conveyed such property to a third party. By s 18, ‘convey’ includes lease. See further s 82, dealing with covenants and agreements entered into by a person with him or herself and another or others; and see Mendes Da Costa, ‘Co-ownership under Victorian Land Law’ (1961) 3 MULR 137, 306, 433,

especially 456–60. As to corresponding provisions in other states, see Conveyancing Act 1919 (NSW) ss 24, 44(2); Law of Property Act 1936 (SA) s 40(3); Conveyancing and Law of Property Act 1884 (Tas) s 62(2); Property Law Act 1969 (WA) ss 39, 44. The effect of a purported assignment by one joint tenant to another was considered in Burton v Camden LBC [2000] 2 AC 399 (HL). In relation to this issue Lord Millett said (at 408) (and, similarly, Lord Nicholls, at 405): [page 136] … the word ‘assignment’ is not a term of art. It denotes any conveyance, transfer, assurance or other disposition of property from one party to another. The essence of an assignment is that it operates to transfer its subject matter from the ownership of the assignor to that of the assignee. A lease is not an assignment, because it does not transfer any pre-existing property from the lessor to the lessee, but creates a new interest and vests it for the first time in the lessee. A purported assignment of the interest of one joint tenant to the other joint tenant does not constitute an assignment, because each of the joint tenants is already the owner of the whole. The so-called assignor has no separate interest of his own which is capable of being transferred to the other and which the other does not already own. None of this, of course, applies to a tenant in common, because he has a separate and distinct interest of his own which he can assign either to a third party or to his co-owner. Lord Nicholls made particular reference to Varley v Coppard (1872) LR 7 CP 505 where it was held that an assignment by one of two tenants-incommon to the other constituted a breach of the lease covenant not to assign: see [2000] 2 AC at 405. Tenants-in-common are incapable of jointly demising the whole: Doe d Poole v Errington (1834) 1 Ad & El 750; 110 ER 1394; Burne v Cambridge (1836) 1 M & Rob 539; 174 ER 185. A purported joint demise by tenantsin-common operates as a separate demise by each lessor of his or her

undivided share and as a confirmation of the demise by each of his or her companions: Burne v Cambridge, above; Thompson v Hakewill (1865) 144 ER 966 at 971; Henare Tomonana v Ormond (1878) 3 NZ Jur (NS) SC 86; Te Peehi v Smith (1909) 29 NZLR 160. Each co-owner, whether a joint tenant or a tenant-in-common, has the right to lease his or her share, and that co-owner may grant such a lease either to a stranger or to his or her companion: Leigh v Dickeson (1884) 15 QBD 60; [1881–85] All ER Rep 1099; Parker v Sell (1890) 16 VLR 271 at 277; Re Marcellos (1940) 41 SR (NSW) 154; Oates v Oates [1949] SASR 37; Frieze v Unger [1960] VR 230 at 245; but cf Burton v Camden LBC, above, in relation to the effect of a purported assignment by one co-owner to another. It is a vexed question whether a lease by a joint tenant to a stranger or to his or her companion severs the joint tenancy or merely suspends it during the continuance of the lease. See Oates v Oates [1949] SASR 37; Wright v Gibbons [1949] ALR 287; 78 CLR 313 at 330 (per Dixon J); Frieze v Unger [1960] VR 230 at 241–5; Lyons v Lyons [1967] VR 169 at 173; also see the article by Buttery in (1944) 17 ALI 292. The right of survivorship is above all that which differentiates the joint tenancy from the tenancy-in-common: Frieze v Unger [1960] VR 230; Eastgate v Equity Trustees Executors and Agency Co Ltd (1964) 110 CLR 275 at 282–3; [1964] ALR 1063. In reading English texts dealing with co-ownership it must be borne in mind that the Law of Property Act 1925 wrought radical changes in the land law, including the abolition of legal tenancies-in-common. A lease may be granted to several persons. Just as co-owners granting a lease may be either joint tenants or tenants-in-common, [page 137] so a lease may be granted to persons who bear either character. The general rule is that a lease to two is a lease to them as joint tenants both at law and in equity, but equity will, if circumstances show such was the intention, treat them as tenants-in-common. One well-established case where a tenancy-incommon will be held to exist in equity is where a lease is taken by partners as part of the partnership property or as an accessory to the trade carried on by

the partners. In such a case equity regards the lessees as tenants-in-common: Cook v Rowe [1954] VLR 309 at 312; compare Cunningham-Reid v Public Trustee [1944] KB 602; 2 All ER 6. As with freehold estates, the right of survivorship exists in the case of a leasehold estate held by joint tenants: Cunningham-Reid v Public Trustee [1944] KB 602; 2 All ER 6. As to the right to obtain contribution from the co-tenant where one tenant alone pays the rent, see Cunningham-Reid v Public Trustee, above. Where one of two joint tenants assigned his interest in the term to the other without the consent of the landlord, the covenant not to assign without such consent was broken: O’Mullane v Wilson (1856) 1 VLT 86. The authorities dealing with an assignment of his or her interest by one tenant-in-common to the other are considered in Cook v Rowe [1954] VLR 309. In a case where only one of the co-owners occupies the premises, he or she may, in certain circumstances, be required to pay rent for use and occupation to the other co-owner: Dennis v McDonald [1982] Fam 63. It would seem that where a periodic tenancy is granted to joint tenants any one of them may, unless it has been otherwise agreed, give notice to quit: Doe d Aslin v Summersett (1830) 1 B & Ad 135; 109 ER 738, dealing with notice given by lessors; Leek and Moorlands Building Society v Clark [1952] 2 QB 788 at 793; 2 All ER 492; Doe d Kindersley v Hughes (1840) 7 M & W 139 (per Parke B); 151 ER 711. A notice to quit given by the landlord to one only of a number of joint tenants who hold the premises of him or her is good: McMillan v Lowry (SC(Vic), December 1954, unreported); Doe d Lord Macartney v Crick (1805) 5 Esp 196; 170 ER 784. The headnote to the secondmentioned decision wrongly refers to a tenancy-in-common; according to the judgment, ‘the two defendants appeared to hold the lands jointly’. Whether a tenancy may be determined by notice to quit given by one only of several tenants-in-common by or to whom the tenancy was granted is not clear. The effect of notice given by one only of several tenants-in-common is discussed in Cole on Ejectment, p 44. In Rogers v Ventura [1955] VLR 139 at 141, Lowe J may perhaps be regarded (it is by no means clear) as accepting the view that at common law one of several lessors who are tenants-in-common may determine the tenancy by notice to quit; although the judgment refers in general terms to ‘joint lessors’, an earlier passage makes it plain that the persons in question were tenants-in-common. As to notice to quit given to one of

several tenants-in-common, the brief report of the decision of Lord Ellenborough in Doe d Lord Macartney v Crick, discussed above, suggests that the notice to quit was held to be valid only because it sufficiently appeared that the [page 138] lessees held as joint tenants; in other words, that had they held as tenants-incommon, the notice would have been bad. One of two joint tenants to whom a lease has been granted cannot surrender the lease unless he or she be authorised so to do by his or her co-tenant: Leek and Moorlands Building Society v Clark [1952] 2 All ER 492; [1952] 2 QB 788; Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 (HL); and see Hounslow London Borough Council v Pilling [1993] 1 WLR 1242 (CA). In Hammersmith and Fulham LBC the House of Lords reviewed the authorities and held that a periodic joint tenancy held by two or more joint tenants may be determined at common law by a notice to quit given by one of the joint tenants without the concurrence of any other joint tenant unless the terms of the lease provide otherwise. This position was reaffirmed by the House of Lords, by reference to Hammersmith and Fulham LBC, in Harrow LBC v Johnstone [1997] 1 WLR 459; and also in Newlon Housing Trust v Alsulaimen [1999] 1 AC 313. These decisions should be contrasted with Hounslow LBC where it was held that the relevant notice was not a notice to quit but rather a notice operating a ‘break clause’ under the lease agreement, which would thereby effect a surrender of the lease. Such a notice could not be given by one of two joint tenants as a surrender of the lease required the concurrence of both tenants. The Court of Appeal in Hounslow LBC distinguished the House of Lords decision (per Nourse LJ at 1246): All that [Monk’s] case decided was that the continuation of a periodic joint tenancy beyond the end of each period of it depends on the joint will of the tenants, so that if one of them gives notice determining it at the end of a period it does not continue. See also Leek and Moorlands Building Society v Clark; Featherstone v Staples

[1986] 1 WLR 861; see [14.8] as to the exercise of an option to renew; and see [16.16] as to surrender by one tenant.

Mortgagors and mortgagees [5.16] In the case of general law land, a lease given by the mortgagor after the date of the mortgage does not bind the mortgagee unless given with his or her consent, except in the case of a lease granted in the exercise of a power conferred either by the mortgage deed or by provisions such as s 99 of the Property Law Act 1958 (Vic): Corbett v Plowden (1884) 26 Ch D 678; Dudley & District Benefit Building Society v Emerson [1949] 1 All ER 691; [1949] 1 Ch 707; Australian Mutual Provident Society v Geo Myers & Co Ltd (1931) 47 CLR 65 at 79; National Trustees Executors & Agency Co of Australasia Ltd v Tindall [1933] VLR 369 at 375–6; Wilson v Kelly [1957] VR 147 at 148; Stroud Building Society v Delamont [1960] 1 All ER 749; and see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage (3rd ed), [12.17]. It is clear from Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231 that a party under an obligation to seek the mortgagee’s consent must do so bona fide. It follows that the same applies to a variation of lease effected by the mortgagor after the date of the mortgage: see SEAA [page 139] Enterprises Pty Ltd v Figgins Holdings Pty Ltd (1999) 196 CLR 245. A tenancy granted by a mortgagor in breach of the terms of a mortgage may become binding on the mortgagee if the mortgagee consents to the lease expressly or by implication, in the latter case generally by acceptance of rent (Chatsworth Properties Ltd v Effiom [1971] 1 All ER 604 (CA)); but the bare fact of acceptance of rent by a receiver acting as agent of the mortgagor, though appointed by the mortgagee, is not sufficient: Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589 at 599–600; and see generally Fisher and Lightwood, above, [12.17]–[12.20]. A mortgagee’s express consent may be given subject to any conditions the mortgagee wishes to impose: Thanes Pty Ltd v Custom

Credit Corporation Ltd (1985) 5 BPR 97,422. The fact that a lease may not be binding on the mortgagee does not affect its validity as between the mortgagor and the tenant (Thanes Pty Ltd v Custom Credit Corporation Ltd; Commonwealth Bank of Australia v Baranyay; and see Fisher and Lightwood, above, [12.17]– [12.20]). As to feeding the estoppel with respect to leases granted by a purchaser-mortgagor after contract but before completion, see Abbey National Building Society v Cann [1990] 1 All ER 1085 (HL); and Fisher and Lightwood, above, [12.21]. See also Dixon, ‘Leases, Mortgages and Deeds of Consent’ [1993] Qld Law Soc J 515; [1994] Qld Law Soc J 1; Xavier and Kearsley, ‘The Lessee’s Bane: The Mortgagee’s Consent — Prudence or Abundant Caution?’, (1993) Qld Lawyer 103, 183. Even in circumstances where the mortgage is in default and the mortgagee is otherwise entitled to possession, the mortgagor, having been allowed to remain in occupation by the mortgagee, is entitled to the rents without liability to account to the mortgagee: SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd (1999) 196 CLR 245. It was said by McHugh J that ‘any default on the part of [the mortgagor] merely enlivened the rights and remedies conferred by the section [s 81 of the Transfer of Land Act 1958 (Vic)] and, in the absence of those rights being invoked, did not affect the right of [the mortgagor] to deal with the reversion’: SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd (1999) 196 CLR 245 at 285. Consequently, until the mortgagee gave notice to the tenant to pay the rent to the mortgagee, the mortgagor could agree with the tenant to reduce the rent and to give a good discharge for reduced rent so payable and paid up until the date the mortgagee gave such notice. Leasing powers are conferred upon mortgagors in possession and mortgagees in possession by Conveyancing Act 1919 (NSW) s 106; Conveyancing and Law of Property Act 1884 (Tas) ss 19, 20; Property Law Act 1958 (Vic) s 99. Power to accept surrenders of leases is conferred upon these persons by (NSW) s 107; (Vic) s 100. By s 86 of the Property Law Act 1958 (Vic), these provisions are excluded in the case of mortgages under the Transfer of Land Act 1958 (Vic), effected by instruments of mortgage under that Act: compare New South Wales and Tasmania where the provisions (NSW: ss 106, 107; Tas: ss 19, 20) apply to Torrens system land subject to any contrary provision in the mortgage. In New South Wales it appears that if the

[page 140] mortgage contains a contrary provision a mortgagor has no power to make even an oral or implied lease, though leases of this type are not within the scope of s 53(4): Australia and New Zealand Bank Ltd v Sinclair [1968] 2 NSWR 26. Generally, see the full discussion of the issues raised by these provisions in Fisher and Lightwood, above, [12.22]–[12.30]. Reference has already been made to the common law limitation on the leasing powers of mortgagors of land under the general law. Though in a mortgage under the Transfer of Land Act the title remains in the mortgagor, the mortgagor’s right to make a lease which will bind the mortgagee is equally limited. No registered lease of land subject to a mortgage or charge is valid or binding against the mortgagee or annuitant unless the mortgagor has consented in writing to the lease: Transfer of Land Act 1958 (Vic) s 87C(a). See also Real Property Act 1900 (NSW) s 53(4); Land Title Act 1994 (Qld) s 66; Real Property Act 1886 (SA) s 118; Land Titles Act 1980 (Tas) s 64(3); Transfer of Land Act 1893 (WA) s 91; and Commonwealth v Orr (1981) 58 FLR 219. It is to be noted that the Victorian provision begins with the words ‘no registered lease’, and that the concluding words of s 131 of the Act of 1958 (‘prior to the same being registered’) have been omitted. Despite the fact that s 87C deals only with registered leases, it is thought that an unregistered lease will similarly not bind the mortgagee unless he or she has consented to it; compare English Scottish & Australian Bank Ltd v City National Bank [1933] St R Qd 81 and contrast Parkinson v Braham [1962] NSWR 165; [1962] SR (NSW) 663. Section 87C of the Transfer of Land Act 1958 (Vic) now provides: The creation, variation or surrender of a lease or the creation or variation of an easement or restrictive covenant, in respect of land subject to a mortgage or charge, is not valid or binding against a mortgagee or annuitant unless the mortgagee or annuitant has consented in writing to (as the case requires) — (a) the creation, variation or surrender of the lease; or (b) the creation or variation of the easement or restrictive covenant. In Daniher v Fitzgerald (1919) 12 SR (NSW) 260 it was held that the New South Wales provisions do not apply to oral or implied leases. As to the

statutory power of leasing and the statutory power to accept a surrender of a lease by a mortgagor in possession or by a mortgagee in possession, see Fisher and Lightwood, above, [12.22], [12.25], [12.26]–[12.28] and [12.30]. Where a lease is not granted under some statutory or other power of leasing the lease will be valid if made by mortgagee and mortgagor together: see Fisher and Lightwood, above, [12.29]. In the case of general law land, a mortgagee is bound by a lease granted by the mortgagor before the giving of the mortgage: Moss v Gallimore (1779) 1 Dougl 279; 99 ER 182. Nevertheless a mortgagee may determine the lease in any way in which the mortgagor might have determined it. An unregistered lease given by the mortgagor of land under the Transfer of Land Act 1958 (Vic) (or its equivalents) before the date of the mortgage may attract the protection of provisions such as s 42(2)(e) of that Act: [page 141] see Real Property Act 1900 (NSW) s 42(1)(d); Land Title Act 1994 (Qld) s 185(1)(b); Real Property Act 1886 (SA) s 69(h); Land Title Act 1980 (Tas) s 40(3)(d); Transfer of Land Act 1893 (WA) s 68; and see Fisher and Lightwood, above, [12.12]. A registered lease of Torrens system land will be binding on a mortgagee (or otherwise) according to the paramountcy and priorities provisions of the relevant Torrens legislation if the tenant is in possession. As in the case of general law land, the mortgagee will be entitled to put an end to the lease if the mortgagor would have been entitled to do so. See Colonial Bank v Roache (1870) 1 VR (L) 165, where, however, the mortgagee failed to make the demand of possession necessary to determine the tenancy at will. Generally a tenant may safely pay rent due to the mortgagor in the absence of any notice by the mortgagee to the tenant to pay the rent to the mortgagee: SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd; and see Fisher and Lightwood, above, [12.13]. As to the position of the mortgagee as assignee of the reversion or otherwise with respect to claims by the tenant by way of set-off or otherwise, see [7.4] and as to claims by the mortgagee against the tenant, including for rent arrears, see [15.20].

Trustees [5.17] In considering the leasing powers of trustees, a distinction must be drawn between the capacity of a trustee, at law, as owner of the legal estate in land, to transfer a portion of his or her interest therein by way of demise and the propriety and effect of the transaction when viewed from the standpoint of a court of equity. In the first sense, the capacity of a trustee to grant a lease has no limit save that imposed by the size of the legal estate vested in him or her: Tuckett v Brice [1917] VLR 36. In the second sense, the trustee’s capacity is to be judged by reference to whether the transaction constitutes a breach of trust, having regard to the powers of leasing which have been conferred by the trust instrument or by statute and to the rules laid down by courts of equity. If the trustee grants a lease which falls within his or her capacity in the narrow or legal sense, but exceeds his or her powers in the more usual sense and is accordingly a breach of trust, the position of the lessee or those deriving title under him or her as against the beneficiaries under the trust will fall to be determined by the usual principles governing priorities in cases where an estate has been acquired in consequence of a breach of trust: Malpas v Ackland (1827) 3 Russ 273; 38 ER 578. A lease granted without capacity in the former sense is void (but not as between the parties to it); a lease granted without power in the latter sense, while on occasions described as void, is merely wrongful and (in appropriate circumstances) liable to be set aside: see Svenson v Payne (1945) 71 CLR 531; as to the possible effect of Torrens system legislation in these circumstances, see Meek v Bennie [1940] NZLR 1 at 6 (referring to Fels v Knowles (1906) 27 NZLR 604; see also Horne v Horne (1906) 26 NZLR 1208 at 1214 and 1217. The paradoxical defence that a tenancy will not support proceedings against the tenant for the recovery of possession if the [page 142] tenancy was created in breach of trust will not succeed: Ex parte Palmer (1912) 12 SR (NSW) 756. A trustee has a duty to obtain the best rent reasonably

obtainable in the circumstances: Pateman v Heyen (1993) 33 NSWLR 188 at 193–4. It is as a result of the control exercised by courts of equity that trustees are to be regarded as one of the classes of persons whose capacity to grant leases is limited. Hereafter, when reference is made to the leasing powers of trustees, this is the sense intended; in other words, the question for consideration is whether power exists in the sense that the lease cannot be impugned as having been made in breach of trust. Even where the trust instrument gave no express power of leasing the courts would often uphold a lease as warranted by an implied power: Naylor v Arnitt (1830) 1 Russ & M 501, 39 ER 193; Egmont v Smith (1877) 6 Ch D 469; Re Shaw’s Trusts (1871) LR 12 Eq 124. However, the onus is on the trustee to show that the lease was proper: Re Mallen [1929] SASR 154. The trustee was bound to act reasonably, and an improvident lease could not be supported as an exercise of the implied power: Attorney-General v Owen (1805) 10 Ves Jun 555; 32 ER 960; Re North [1909] 1 Ch 625. The supposed rule confining the implied power to leases not greater than tenancies from year to year is considered in Perpetual Executors & Trustees Assn of Aust Ltd v England (1901) 27 VLR 443 at 453–4. Where a grazier empowered his trustees to carry on his business and for that purpose to employ all assets used by him in connection with the carrying on of the business, the trustees had no implied power to grant leases: Thomas v Thomas [1939] St R Qd 301. An express power of leasing in general terms will ordinarily authorise a lease of opened but not of unopened mines: Re Reynolds (1909) 10 SR (NSW) 109; Re Baskerville [1910] 2 Ch 329; see now, as to the grant of mining leases by trustees for sale, the statutory powers of trustees to lease, below (in relation to Victoria, note the provisions of ss 44–47 of the Settled Land Act 1958, applying to building and mining leases, and Property Law Act 1958 s 35(1)). As to the propriety of a lease which, while expedient from a business point of view, might tend to give the life tenant an advantage over the remainderman, see Re Mallen. Trustees with power to lease and power to sell are not generally, in the absence of an express power, empowered to give an option to purchase in the lease which they grant: Oceanic Steam Navigation Co v Sutherberry (1880) 16 Ch D 236; Rawcliffe v Johnstone and Morton [1921] NZLR 470; see also Re Farnell’s Settled Estates (1886) 33 Ch D 599; Horne v Horne; Re Stephenson’s Settled

Estates (1906) 6 SR (NSW) 420; Meek v Bennie; and Re Lovett [1966] VR 65. In general terms the cases indicate that the objection to trustees granting such option is that they thereby preclude a proper exercise of the trustees’ discretion at the time of sale: see, particularly, Oceanic Steam Navigation Co v Sutherberry at (1880) 16 Ch D 245 (per James LJ) and Rawcliffe v Johnstone and Morton at [1921] NZLR 473. Options to renew leases are similarly objectionable. However, the nature of the trust and normal commercial arrangements in that context may [page 143] make the granting of options appropriate: see Meek v Bennie; Rousset v Antunovich [1963] WAR 52. Consequently where the trust is an income producing trust of real property, rather than a trust for sale, it may be quite proper for the trustees to grant leases with options to renew to best secure the income flow, provided the rent review provisions during the lease term and in the exercise of options and during renewed terms are designed, as far as possible, to maintain current market rents from time to time (which would be consistent with the duty of a trustee in leasing to obtain the best rent reasonably obtainable in the circumstances: see Pateman v Heyen at 33 NSWLR 193–4). It has also been said that the proper duty of trustees having a power to lease is to execute that power, not to enter into a contract to execute it: In the Settlement of Wills (1880) 6 VLR (E) 99 (and see the report of previous proceedings in the same matter at (1879) 5 VLR (E) 292 which indicates that the case concerned an agreement for lease and the demands by the person to whom it was agreed that the lease would be granted for execution of the lease itself). By statute the leasing powers of trustees have been much enlarged: Trustee Act 1925 (NSW) ss 36–38, 81 (Conveyancing Act 1919 (NSW) ss 66D, 151C, in relation to trusts for sale); Trustee Act 1958 (Vic) Pt II; Property Law Act 1958 (Vic) s 35(1) (in relation to trusts for sale, which confers all the powers of leasing conferred on a tenant for life under the Settled Land Act 1958 ss 41–47, and see s 101); Trusts Act 1973 (Qld) ss 32, 37–39, 94–97; Trustee Act 1936 (SA) ss 25c, 26, 26a; Trustees Act 1962

(WA) s 27; generally, see Jacobs’ Law of Trusts, (8th ed, 2016) pp 462–7. In addition, there is the power conferred upon trustees generally by s 63 of the Trustee Act 1958 (Vic); and see Trustee Act 1925 (NSW) s 81; Trusts Act 1973 (Qld) ss 57–58, 94; Trustee Act 1936 (SA) s 59b; Trustee Act 1898 (Tas) ss 47, 55; Trustees Act 1962 (WA) s 89. By this provision, where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release or other disposition, or any purchase, investment, acquisition, expenditure or other transaction, is, in the opinion of the court, expedient (but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument (if any) or by law), the court may by order confer upon the trustees, either generally or in the particular instance, the necessary power for the purpose on such terms and subject to such provisions and conditions (if any) as the court thinks fit. An order may be made under this section authorising a trustee to enter into a lease notwithstanding that the trustee has in fact power under the trust instrument to enter into the lease: Degan v Lee (1939) 39 SR (NSW) 234. Reference should also be made to s 63A of the Trustee Act 1958 (Vic), whereby the court may by order approve arrangements enlarging trustees’ powers of managing or administering any of the property subject to the trusts: this provision follows the English Variation of Trusts Act (6 & 7 Eliz 2, c 53); similar provisions now exist in the trustee legislation of Queensland (s 95), South Australia (s 59c) and Western Australia (s 90), but not in New South Wales or Tasmania. [page 144] Just as implied power on the part of a trustee to grant a lease may be held to exist, so a trustee may have not only express, but also implied power to accept leases. Trustees were held to have implied authority to take a lease of certain premises owned by the testator’s family and used by him in his business: Thomas v Thomas [1939] St R Qd 301. Where trustees had power to manage and in fact carried on a sheep station, they were held to have power to take a lease of contiguous lands, the occupation of which was almost essential to the beneficial management of the station: Umphelby v Grey (1898) 24 VLR 979.

Where a trustee takes a lease the lessor cannot sue the beneficiary on the covenants: Ramage v Womack [1900] 1 QB 116. The trustee is personally liable on the covenants: White v Hunt (1870) LR 6 Ex 32; compare Rowand v Equity Trustees Executors & Agency Co Ltd (1896) 22 VLR 1, dealing with the position of an executor. The trustee has, provided he or she has acted properly in the matter, a trustee’s normal right to be indemnified out of the trust estate: Re Richardson [1911] 2 KB 705. A power on the part of trustees to accept surrenders of leases may be implied: Umphelby v Grey (1898) 24 VLR 979. In the leading case of Keech v Sandford (1726) Cas temp King 61; 25 ER 223; [1558–1774] All ER Rep 230, a person who held a lease on trust for an infant and obtained a renewal on his own behalf was held to be a constructive trustee of the further term: compare Re Knowles’ Will Trusts [1948] 1 All ER 866. A person who is not a trustee of the original lease may, nonetheless, become a constructive trustee of a further lease in consequence of the existence of a fiduciary relationship and the circumstances in which the further lease is obtained: Prebble v Reeves [1910] VLR 88. The rule against a trustee’s purchasing the trust property extends to the taking of a lease: Re Dumbell; Ex parte Hughes (1802) 31 ER 1223 at 1226; Re O’Shea [1957] VR 352 at 356.

Personal representatives [5.18] The personal representative of a deceased lessee is liable as such in respect of the lessee’s obligations under the lease, that is to say, he or she is liable as a personal representative, so that, if nothing more appears, where the estate is insolvent the lessor will not be able to look to the private assets of the personal representative. Even though the lease be of a burdensome nature, the personal representative is not entitled to disclaim: Rendall v Andreae (1892) 61 LJQB 630 at 631; Commissioner of Stamp Duties v Brasch (1937) 57 CLR 69 at 86; [1937] ALR 246. If the deceased lessee was merely an assignee, an attempt may be made to minimise the liability of the estate by an assignment to a man of straw: Taylor v Shum (1797) 1 Bos & P 21; 126 ER 755; Onslow v Corrie (1817) 2 Madd 330; 56 ER 357; Rendall v Andreae (1892) 61 LJQB 630 at 631; Stevenson & Sons Ltd v Brind (1895) 21 VLR 109. Where the estate of the deceased is or may be insolvent, a personal

representative would be well advised not to enter into possession of the demised premises. For by [page 145] doing so that person will make him or herself personally liable to the lessor upon the covenants contained in the lease, in that he or she will become an assignee of the lease by operation of law: Re Bowes (1887) 37 Ch D 131; [1886–90] All ER Rep 693; Rendall v Andreae; Rowand v Equity Trustees Executors & Agency Co Ltd (1896) 22 VLR 1; Whitehead v Palmer [1908] 1 KB 157. A number of the authorities are considered in Carson on Real Property, pp 536–7. As to the liability of the personal representative for rent due under a lease under which the deceased was tenant, see [11.23]. Where a personal representative who has taken possession is sought to be made personally liable and the rent reserved exceeds the value of the premises, he or she may by proper pleading limit his or her liability to the value of the premises: Rendall v Andreae; Commissioner of Stamp Duties v Brasch; Re Bowes. In Rae v Clifford (1893) 12 NZLR 257, the testatrix had a four-weekly tenancy of certain business premises; her executor remained in possession for several years, carrying on the business in the premises. The executor was held to be in possession not under the original contract made by the testatrix, but under a new contract made between the landlord and himself. A practice grew up of protecting personal representatives by ordering a fund to be set aside to answer possible liabilities arising under leases held by the deceased. See as to this practice Re Nixon [1904] 1 Ch 638; Re King [1907] 1 Ch 72. In 1859 a measure of protection was given by statute (Lord St Leonard’s Act 22 & 23 Vict c 35 ss 27, 28): see Trustee Act 1925 (NSW) s 61; Trusts Act 1973 (Qld) s 66; Trustee Act 1936 (SA) ss 30, 31; Trustee Act 1958 (Vic) s 32; Trustees Act 1962 (WA) s 62. By this provision, where a personal representative liable as such for any rent covenant or agreement reserved by or contained in any lease satisfies all liabilities under the lease which may have accrued, and been claimed up to the date of the conveyance hereinafter mentioned, and where necessary sets apart a sufficient fund to answer any future claim that may be made in respect of any fixed and ascertained sum which the lessee agreed to

lay out, then the personal representative may convey the property demised to a purchaser, legatee, devisee or other person entitled to call for a conveyance thereof; thereafter he or she may distribute the residuary estate other than the fund (if any) set apart without appropriating any part or any future part (as the case may be) to meet any future liability under the lease, and notwithstanding such distribution he or she shall not be personally liable in respect of any subsequent claim under the lease. The effect of this section on the old practice of ordering a fund to be set aside for the protection of the executors must be considered. Where the personal representative has taken possession and so made him or herself liable personally, from privity of estate, under the obligations contained in the lease, an order will still be made for his or her protection under the old practice: Re Nixon; Re Owers [1941] Ch 389. Even apart from statute, personal representatives may grant leases, and the court will not interfere provided that they have acted in the due administration of the estate: Oceanic Steam Navigation Co v Sutherberry (1880) 16 Ch D 236; Chambers v Kingham (1878) 10 Ch D 743; Withers v Withers (1893) 14 ALT 273; In the Estate of Corrigan [page 146] (1925) 42 WN (NSW) 28; Re Chaplin & Staffordshire Potteries Waterworks Co [1922] 2 Ch 824; Colyton Investments Pty Ltd v McSorley (1963) 107 CLR 177 at 183–4; [1963] ALR 487; Re Kemnal and Stills Contract [1923] 1 Ch 293 at 297, 308 and 316; Murphy v Simpson [1957] VR 598; Patel v Patel [1981] 1 WLR 1342. Reference should now be made to the statutory provisions discussed below. An executor may demise before probate: Roe d Bendall v Summerset (1770) 2 Wm Bl 692; 96 ER 407. However, an administrator, since he or she derives that title from the grant, cannot demise before he or she obtains it: Woolley v Clark (1822) 5 B and Ald 744; 106 ER 1363. For the position under the legislation of New South Wales, see The Daily v White (1946) 63 WN (NSW) 262. As to the effect of a lease granted by one only of several executors, see Union Bank of Australia v Harrison, Jones & Devlin Ltd (1910) 11 CLR 492; Colyton Investments Pty Ltd v McSorley (1963) 107 CLR 177; [1963] ALR 487. Wide leasing powers are conferred upon personal

representatives by statute: Conveyancing Act 1919 (NSW) s 153; Trustee Act 1925 (NSW) ss 36–38; Trusts Act 1973 (Qld) ss 32, 37–39 and definition of ‘trustee’; Administration and Probate Act 1919 (SA) s 47(b); Conveyancing and Law of Property Act 1884 (Tas) s 19(2); Administration and Probate Act 1935 (Tas); Administration and Probate Act 1958 (Vic) s 44(1); Property Law Act 1958 (Vic) s 35(1); and Trustees Act 1962 (WA) s 27. There are also statutory provisions which enable leases to be made with court approval where personal representatives lack necessary powers and the lease would be appropriate in the course of administration: Trustee Act 1925 (NSW) s 81; Wills Probate and Administration Act 1898 (NSW) s 57; Trusts Act 1973 (Qld) s 94; Trustee Act 1898 (Tas) Pt V; Trustee Act 1958 (Vic) s 63; Trustees Act 1962 (WA) s 89. Generally, see Jacobs’ Law of Trusts, (8th ed, 2016) pp 340–2. As to the position where personal representatives hold jointly, see [5.15]; and see Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 at 484 (HL).

Leases invalidated by reason of non-compliance with terms of powers under which they are granted [5.19] Section 152 of the Property Law Act 1958 (Vic) validates leases in certain circumstances where they would otherwise be invalidated due to a failure to comply with terms or powers under which they are granted. However, the section is intended to cure formal defects, not matters of substance: Re Newell and Nevill’s Contract [1900] 1 Ch 90, and will not validate a lease granted by a person with no power to lease: Ex parte Copper (1865) 34 LJ Ch 373, or validate a lease of one kind by turning it into a lease of another kind: Hallett v Martin (1883) 24 Ch D 624. Section 152 does not create a substantially different lease from the lease purported to have been granted: Pawson v Revell [1958] 2 QB 360; [1958] 3 All ER 233. Nor does the section apply

[page 147] where the lease is in the form intended by the parties: Gaslight & Coke Co v Towse (1887) 35 Ch D 519. A lease which is invalid because part of the premises cannot be demised cannot be validated: Sutherland (Dowager Duchess) v Sutherland (Duke) [1883] 3 Ch 169 at 194; King v Bird [1909] 1 KB 837. As to the scope of this section, see also Kisch v Hawes Brothers Ltd [1935] Ch 102; [1934] All ER Rep 730; Davies v Hall [1954] 1 WLR 855. As to the effect of s 152(6), see Pawson v Revell. The corresponding New South Wales provisions are contained in Conveyancing Act 1919 ss 135–141.

Illegality [5.20] The consequences of a lease being granted in breach of statutory provisions were considered more recently by the New South Wales Court of Appeal in Polish Club Pty Ltd v Gnych (2014) 86 NSWLR 650. The issue was addressed by Tobias AJA (with whom Meagher and Leeming JJA agreed) in the context of the provisions of s 92(1)(d) of the Liquor Act 2007 (NSW) which, it was held, rendered a lease entered in breach of these provisions void and unenforceable. Reviewing the authorities Tobias AJA said (at 86 NSWLR 667–9): [64] Both parties referred to authorities on the issue of the effect of illegality which do not appear to have been referred to the primary judge. In particular, reliance was placed upon the judgment of McHugh J in Nelson v Nelson (1995) 184 CLR 538 (to which the primary judge was referred) where his Honour commented upon what he referred to as the Bowmakers rule. Thus, at 609 McHugh J said: “The Bowmakers rule has no regard to the legal and equitable rights of the parties, the merits of the case, the effect of the transaction in undermining the policy of the relevant legislation or the question whether the sanctions imposed by the legislation sufficiently protect the purpose of the legislation. Regard is had only to the procedural issue; and it is that issue

and not the policy of the legislation or the merits of the parties which determines the outcome.” [65] Again, at 610, after referring to what Lord Goff had said in Tinsley v Milligan [1994] 1 AC 340, McHugh J observed: “A final criticism of the Bowmakers rule adopted by the majority in Tinsley is that it may often defeat the intention of the legislature. Parliament almost invariably provides mechanisms for dealing with breaches of its laws. Those mechanisms sometimes include a provision that makes unlawful and unenforceable an agreement that defeats or evades the operation of the relevant law. If a particular enactment does not contain such a provision, the prima facie conclusion to be drawn is that Parliament regarded the sanctions and remedies contained in the enactment as sufficient to deter illegal conduct and saw no need to take the drastic step of making unenforceable an agreement or trust that defeats the purpose of the enactment.” (Footnote omitted) [66] McHugh J then remarked at 612–613 that if courts withhold relief because of an illegal transaction, they necessarily impose a sanction on one of the parties to that transaction that will deprive one party of his or her property rights and effectively [page 148] vest them in another person who will almost always be a willing participant in the illegality. Leaving aside cases where the statute makes rights arising out of the transaction unenforceable in all circumstances, such a sanction can only be justified if two conditions are met. The first is that the sanction should be proportionate to the seriousness of the illegality involved. The second is that the imposition of the sanction must further the purpose of the statute and not impose a further sanction for the unlawful conduct if Parliament has indicated that the sanctions

imposed by the statute are sufficient to deal with conduct that breaches or evades the operation of the statute and its policies. [67] At 613 McHugh J framed his conclusion in the following terms: “Accordingly, in my opinion … courts should not refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose unless: (a) the statute discloses an intention that those rights should be unenforceable in all circumstances; or (b)(i) the sanction of refusing to enforce those rights is not disproportionate to the seriousness of the unlawful conduct; (ii) the imposition of the sanction is necessary, having regard to the terms of the statute, to protect its objects or policies; and (iii) the statute does not disclose an intention that the sanctions and remedies contained in the statute are to be the only legal consequences of a breach of the statute or the frustration of its policies.” (Footnote omitted) [68] In the same case Deane and Gummow JJ said at 551–552 that authorities in contract law (including Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 429–430) suggest drawing a distinction between three cases: “… (i) an express statutory provision against the making of a contract or creation or implication of a trust by fastening upon some act which is essential to its formation, whether or not the prohibition be absolute or subject to some qualification such as the issue of a licence; (ii) an express statutory prohibition, not of the formation of a contract or creation or implication of a trust, but of the doing of a particular act; an agreement that the act be done is treated as impliedly prohibited by the statute and illegal; and (iii) contracts and trusts not directly contrary to the provisions of the statute by reason of any express or implied prohibition in the statute but which are ‘associated with or in furtherance of illegal purposes’.” [69] In Miller v Miller [2011] HCA 9; (2011) 242 CLR 446, French CJ,

Gummow, Hayne, Crennan, Kiefel and Bell JJ cited at [26] the passage from the judgment of Deane and Gummow JJ in Nelson that I have set out in the preceding paragraph. At [27] their Honours refer to what McHugh J had said in Nelson at 611 observing that the statement of Lord Mansfield in Holman v Johnson (1775) 1 Cowp 341; 98 ER 1120 at 343; 1121 that “[n]o Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act”, by its all-embracing generality, fails to take sufficient account of the different ways in which questions of illegality may arise. Their Honours continued: “[27] … Hence the emphasis given in Nelson v Nelson … to the discernment, from the scope and purpose of the statute, of whether the legislative purpose will be fulfilled without regarding the contract or the trust as void and unenforceable. But implicit in, indeed at the very heart of, that process lies the recognition that there are cases where the breach of a norm of conduct stated expressly or implied [page 149] in the statutory text requires the conclusion that an obligation otherwise created or recognised is not to be enforced by the courts.” (Citation omitted) [70] The most recent pronouncement of the High Court on this subject is that in Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498. At [23] French CJ, Crennan and Kiefel JJ refer to the joint judgment of the court in Miller and the decisions of the court there cited, observing that an agreement may be unenforceable for statutory illegality where: “[23] … (i) the making of the agreement or the doing of an act essential to its formation is expressly prohibited absolutely or conditionally by the statute;

(ii) the making of the agreement is impliedly prohibited by statute. A particular case of an implied prohibition arises where the agreement is to do an act the doing of which is prohibited by the statute; (iii) the agreement is not expressly or impliedly prohibited by a statute but is treated by the courts as unenforceable because it is a ‘contract associated with or in the furtherance of illegal purposes’.” (Footnotes omitted) [71] Their Honours continued: “In the third category of case, the court acts to uphold the policy of the law, which may make the agreement unenforceable. That policy does not impose the sanction of unenforceability on every agreement associated with or made in furtherance of illegal purposes. The court must discern from the scope and purpose of the relevant statute ‘whether the legislative purpose will be fulfilled without regarding the contract or the trust as void and unenforceable’. As in the case when a plaintiff sues another for damages sustained in the course of or as a result of illegal conduct of the plaintiff, ‘the central policy consideration at stake is the coherence of the law’.” (Footnotes omitted) Applying these principles to the legislation in question, Tobias AJA continued (86 NSWLR 669): [72] In essence, the Club submitted that upon consideration of the objects and policy of the Liquor Act and, in particular, of s 92(1), it was apparent that a lease which falls within any of the subparagraphs of s 92(1) is expressly prohibited, absolutely by s 92(1)(c) and conditionally by s 92(1)(d). The policy of the Act generally, and s 91 and s 92 in particular, is to ensure that the licensee or in the case of a licensee which is a corporation, the manager of the licensed premises, at all times is responsible for the personal supervision and management of the (lawful) conduct of the business of the licensed premises. That objective cannot be realised if any part of the licensed premises

is subject to a lease to a third party who might not be a fit and proper person to be a licensee or, for that matter, a manager, but who, by virtue of the lease has exclusive possession of part of the licensed premises thus having the right to exclude therefrom the licensee or in the case of a corporate licensee, the manager. Tobias AJA concluded that the policy or purposes of the legislation could only be achieved by holding the lease void (at 86 NSWLR 670, [79]) a position which the [page 150] High Court rejected on appeal in Gnych v Polish Club Ltd (2015) 255 CLR 414 at 428–9, [50]–[52] (French CJ, Kiefel, Keane and Nettle JJ). Two reasons were given for this position. First, that the vesting of premises under the lease in a person other than the licensee could not be said to be contrary to the purpose and policy of the statute. Second, that role of the authority supervising and managing licensed premises was inconsistent with the view that the regime required that a contravention by the licensee would render the lease void and unenforceable. The plurality also observed (at 255 CLR 426): [41] The scope of the prohibition in s 92(1)(d) of the Liquor Act can be understood only by reference to the legal characteristics of a lease. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd, [(1985) 157 CLR 17 at 51] Deane J described a lease as possessing a “duality of character … [being] both an executory contract and an executed demise”. In this conception, a lease is a “[bundle] of rights and duties which together can be identified as [a] species of property” the origins of which lie in the contract between lessor and lessee.30 In terms of the dual character of a lease described by Deane J, s 92(1)(d) is not directed at the bundle of rights and duties under the contract between lessor and lessee; rather, it is directed squarely at the conduct of the licensee/lessor in executing a demise of part of licensed premises. In relation to the general principles to be applied in the context of statutory illegality, the plurality reaffirmed the position as stated in Equuscorp Pty Ltd v

Haxton (2012) 246 CLR 498 at [23], to which reference was made by the Court of Appeal (and see also at 255 CLR 431–2, [62]–[64] (Gageler J)). See also Dovastand Pty Ltd v Mardasa Nominees Pty Ltd [1991] 2 VR 285 and Croft, Hay and Virgona, Retail Leases Victoria (LexisNexis, looseleaf) pp 71,160–2, [210,025].

[page 151]

6 Leases as Contracts Introductory [6.1] A lease is not a mere contract; it also creates rights in rem: see [1.2]. In this chapter it is proposed to consider some of the matters which arise concerning leases viewed as contracts. These matters are as follows: intention to create legal relations; construction; rectification; fraud illegality and mistake; frustration; and collateral warranty. Generally reference should also be made to the contract texts, such as Greig and Davis, Law of Contract and Seddon, Bigwood and Ellinghaus, Cheshire and Fifoot’s Law of Contract; see also Heydon, Leeming and Turner, Equity Doctrines and Remedies, 5th ed, and Spry, Equitable Remedies, 9th ed. Other questions which concern leases regarded as contracts are dealt with in other chapters. Matters considered elsewhere include the following: capacity to make and take leases (Chapter 5); implied covenants (Chapter 8); usual covenants (Chapter 9); repairs (Chapter 10); breach of contract (Chapter 13); renewal (Chapter 14). Of particular importance is the discussion of the application of the doctrine of repudiation to leases in the context of determination of tenancies (Chapter 16). As to the application of contractual doctrines to agreements for lease, see also [4.1].

Intention to create legal relations

[6.2] Agreements may be made between parties which do not result in contracts within the meaning of that term in law. An example is where there is an offer and an acceptance of hospitality. Similarly, domestic arrangements are often made which do not constitute a contract. What is lacking in such cases is the intention that the agreements should be attended by legal consequences, or, as it has been put, ‘an intention to create a legal bond’: Balfour v Balfour [1919] 2 KB 571; [1918–19] All ER Rep 860; McBride v Sandland (1918) 25 CLR 69 at 92; 25 ALR 54. Leases, like any other contract, are [page 152] subject to this rule, and an attempt to establish the grant of a lease may accordingly fail because of the absence of an intention to create legal relations: Murphy v Simpson [1957] VR 598; Heslop v Burns [1974] 1 WLR 1241. As to the intention of a company to enter into a lease or an agreement for a lease, see [5.8]. The issue whether there is an intention to create legal relations is to be contrasted with the question whether parties have merely been negotiating and have failed to conclude an agreement for lease: see, for example, Brunswick Development Pty Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604 (FCA, Sundberg J). Thus there is a distinction between the question whether the parties intended to enter into contractual relations and the question whether they intended to make a concluded bargain: see Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 (CA) where it was held that the question of intention in this respect was, prima facie, to be resolved objectively by the usual process of construction of the relevant documents; and see Wesfarmers Bunnings Ltd v Angus & Robertson Bookworld Pty Ltd [1998] VSC 101 at [45]–[65] (per Gillard J); and Guilfoyle Pty Ltd v National Mutual Life Association of Australasia (2000) V ConvR ¶54622; and see [1.5], [4.1] and [4.8].

Construction and implication of terms

[6.3] The general rules of construction of contracts are applicable to leases. With particular reference to the construction of options to renew leases, see [14.1] and [14.3].

General principles of construction [6.4] The guiding light for the courts in questions of construction is the intention of the parties to be discerned from the terms of the contract and the ‘factual matrix’ insofar as that provides objective evidence in this respect. In Reardon-Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989 (HL) Lord Wilberforce described the process in the following terms (at 997): … what the court must do must be to place itself in thought in the same factual matrix as that in which the parties were. All of these opinions seem to me implicitly to recognise that, in the search for the relevant background, there may be facts which form part of the circumstances in which the parties contract in which one, or both, may take no particular interest, their minds being addressed to or concentrated on other facts so that if asked they would assert that they did not have these facts in the forefront of their mind, but that will not prevent those facts forming part of an objective setting in which the contract is to be construed. And see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; and Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 where the High Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) reaffirmed (at 462, [22]) the following statement by Lord Wiberforce in Reardon-Smith (at 995–6; [page 153] which it was noted had been set out by Mason J with evident approval in Codelfa Construction, at 350): In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn

presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating. Further, the High Court also reaffirmed (at 462, [22]) that the construction of terms in a commercial contract is to be determined objectively, ‘by what a reasonable person in the position of [the third party] would have understood them to mean’; and see BHP v QV [2004] VSC 447 at [11] (per DoddsStreeton J). Elaborating or explaining the position further, the High Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, said (at 179, [40]): This Court, in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. Referring to this and earlier High Court authority, Beazley JA (with whom Mason P and Ipp JA agreed), said in Boreland v Docker (2007) NSW ConvR ¶56-182 (CA) at 56,322: [67] This ‘shift’ in the High Court’s approach was examined by the Full Court of the Federal Court in Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144. In that case, each of the members of the Court recognised the High Court’s shift in approach to the admissibility of surrounding circumstances when construing a commercial contract

More recently, the High Court (French CJ, Hayne, Crennan and Kieffel JJ) in Electricity Generation Corp v Woodside Energy Ltd (2014) 251 CLR 640 (at 656–7) summarised the principles of interpretation as follows: The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean; McCann v Switzerland Insurance Australia Pty Ltd (2000) 203 CLR 579; Pacific Carriers Ltd v BNP Paribas (Pacific Carriers) (2004) 218 CLR 451; International Air Transport Association v Ansett Australia Holdings (IATA) (2008) 234 CLR 151; and see further Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 201 CLR 181, citing Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912; [1998] 1 All ER 98 at 114. See also Homburg Houtimport BV v Agrosin Private Ltd [2004] 1 AC 715; [2003] [page 154] UKHL 12. That approach is not unfamiliar; see, for example, Hydarnes Steamship Co v Indemnity Mutual Marine Assurance Co [1895] 1 QB 500 at 504; Bergl (Australia) Ltd v Moxon Lighterage Co Ltd (1920) 28 CLR 194 at 199; see generally Lord Bingham of Cornhill, “A New Thing Under the Sun? The Interpretation of Contract and the ICS Decision” (2008) 12 Edin LR 374. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract; Pacific Carriers at 461–2 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40]; IATA at 160 [8]; Byrnes v Kendle (2011) 243 CLR 253 at 284 [98]. See also Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 326 and 350; Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900; [2012] 1 All ER 1137; [2011] UKSC 50 at [14]. Appreciation of the commercial purpose or objects is facilitated by an understanding of the “genesis of the transaction, the background, the context [and] the market in which the parties are operating”: Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 350, citing Reardon Smith

Line v Hansen-Tangen [1976] 1 WLR 989 at 995–6; [1976] 3 All ER 570 at 574. See also Zhu v Treasurer (NSW) (2004) 218 CLR 530 at 559 [82]; IATA at 160 [8]. As Arden LJ observed in Re Golden Ket Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result.” A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience.” And see Lewison, The Interpretation of Contracts (6th ed), para 2.02; Debenhams Retail plc v Sun Alliance and London Assurance Co Ltd [2005] EWCA Civ 868; Growthpoint Properties Australia Ltd v Australia Pacific Airports (Melbourne) Pty Ltd [2014] VSC 556 at [12]–[16]; Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 91 ALJR 486 at 491; and Point Cook Community Entertainment Facility Pty Ltd v Geelong Football Club Ltd [2017] VSC 313 at [6]–[7]. As to the general process of construction, in relation to a commercial lease, Winneke P said, in Highpoint Homemaker Centre (Vic) Pty Ltd v Sanatar Pty Ltd (1997) V ConvR ¶54-564 (CA) (at 66,775): It is not in dispute that in construing an instrument of the type which we are asked to construe, it is the Court’s duty to endeavour to discover the intention of the parties from the words of the contract. As Gibbs, J said in Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973)129 CLR 99 at 109: Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be resolved by other parts, and the words of every clause must, if possible, be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. These principles were expressed as part of a dissenting judgment but

the principles cannot be thought to be in doubt because Barwick, CJ, who with Stephen, J formed the majority, said (at p 105): But if that result is produced by the application of the words in which the parties have expressed themselves, it is no part of the function of a court by some [page 155] process of divination as distinct from the construction of the language employed, to attribute to the parties an intention to do something for which their express words do not provide. The court has no power to re-make the contract to avoid an unjust or inconvenient result. On the other hand, if the language of the instrument is open to two constructions, preference will be given to the one which will avoid the result which is considered inconvenient or unjust (per Gibbs, J Australian Broadcasting Commission Australian Performing Rights Association Ltd, supra, at 109). It is the effect of these rules of construction that where a court can glean from the written instrument what can be seen to be the real intention of the parties, it is bound to give effect to that intention even to the extent of rejecting as superfluous whatever is repugnant to the intention which is discerned (NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 at 95 per Kaye, J; Gwyn v Neath Canal Navigation Co (1868) LR 3 Ex 209 at 215, per Kelly, CB). The cases in relation to the construction of leases and other documents are as many and varied as the particular provisions and circumstances considered. Nevertheless some principles or rules (the latter used in a loose sense in this context) do emerge, as indicated in, for example, Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290; and see also Lewison, particularly Chapter 2 ‘The Purpose of Interpretation’. In Spunwill Santow J provided a convenient summary of these principles or rules (in the course of considering a restraint of trade provision in a sale of business agreement) (at 298–300): 1.

In construing a contract which is in restraint of trade, the

2.

3.

ordinary rules applicable to contracts are applied: Mills v Dunham [1891] 1 Ch 576; Dubowski & Sons v Goldstein [1896] 1 QB 478; Haynes v Doman [1899] 2 Ch 13.] A presumption that the parties intended a written document to be the sole and exclusive repository of their agreement arises where the document is clear on its face, contains all terms appropriate to the transaction and is signed by the parties as the record of their agreement: LG Thorne & Co Pty Ltd v Thomas Borthwick & Sons (Australasia) Ltd [1956] SR (NSW) 81; (1956) 73 WN (NSW) 9. Extrinsic evidence is available to show that a document, ostensibly the entire and final contract, does not contain all the terms of the agreement but may for example be partly oral and partly written, or in more than one document: State Rail Authority of NSW v Health Outdoor Pty Ltd (1986) 7 NSWLR 170 at 191. However, where it is determined that the terms of the agreement are wholly contained in writing and are unambiguous or of a plain meaning, extrinsic evidence cannot be admitted to subtract from, add to, vary or contradict the language of the written agreement: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 347. In construing a written document, the object is to discover and give effect to the contractual obligations that reasonable persons in the position of the parties would objectively have intended the document’s language to create. The emphasis is thus on giving effect to the apparent intention of the parties, and direct evidence of the parties’ actual subjective intentions and expectations is inadmissible for purposes of construction: Codelfa Construction Pty Ltd v State Rail Authority of NSW at 348 and 352; Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834 at 840. [page 156]

4.

The language of a term is generally assigned its natural and

5.

6.

7.

ordinary meaning, read in the light of the contract as a whole but where it is ambiguous surrounding circumstances may be taken into account in assigning the presumed meaning. The surrounding circumstances include the matrix of mutually known facts, and the background, object, context and commercial purpose of the transaction, in the objective sense of what reasonable persons in the position of the parties would have had in mind: Codelfa Construction Pty Ltd v State Rail Authority of NSW (at 347–52); Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd (at 844–50); Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Insurance Cases ¶60-853 at 75,343. The consequences of alternative interpretations are not immaterial, and where the meaning of language in a contract is ambiguous, that interpretation will be preferred which avoids consequences which are in the circumstances capricious, unreasonable, unjust or not consonant with business efficacy: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; Lewis Construction (Engineering) Pty Ltd v Southern Electric Authority of Queensland (1976) 50 ALJR 769; 11 ALR 305; Stillwell Trucks Pty Ltd v Nectar Brook Investments Pty Ltd (1993) 115 ALR 295; 10 ACSR 615. Every passage of a document must be read as part of the whole instrument. This may justify departing from what had seemed the plain meaning of a clause considered in isolation: The Metropolitan Gas Co v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449 at 455–6. Where a court can discern the intent of the parties from an examination of the document as a whole, words may be supplied, omitted or corrected in the instrument, where it is clearly necessary in order to avoid absurdity or inconsistency: Fitzgerald v Masters (1956) 95 CLR 420 at 426–7. In such cases rectification of the document is not required: Re United Pacific Transport Pty Ltd [1968] Qd R 517; Codelfa Construction Pty Ltd v State Rail Authority of NSW (at 346).

8.

‘If, by any reasonable construction, the intention of the parties can clearly be arrived at from the document itself, then the court will give effect to that intention even though this involves departing from or qualifying particular words used. So the court will be prepared to restrict, transpose, modify, supply or reject words or terms in the documents, provided the intention of the parties is plain in spite of the words’: Chitty on Contracts, 26th ed, 1989, vol 1, para 827; Tropwood AG of Zug v Jade Enterprises Ltd (The Tropwind) [1982] 1 Lloyd’s Rep 232. The less settled question of whether post-contractual conduct of the parties may be taken into account in considering the surrounding circumstances and, if so, to what extent, is an issue requiring more detailed consideration later in my judgment. The latter question is considered further below; and, in this respect, the contrasting views of Bryson J in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 should be noted. As to the ‘correction’ etc of contractual provisions short of rectification (point 7, above), see [6.4.36]. Where possible, courts try to give effect to the bargain made between the parties and are very reluctant to find contracts void for uncertainty: see [4.2]. [page 157]

Evidence of surrounding circumstances [6.5] Following on from this summary attention is now directed to the extent to which regard may be had to surrounding circumstances for the purpose of construing the provisions of a lease. Surrounding circumstances were used to construe the lease in Downie v Lockwood [1965] VR 257 where the covenant to be construed was one whereby the lessee was to use the demised premises only as a dwelling house. For some years prior to the execution of the lease the tenant, with the knowledge of the landlord, had used the premises for the taking in of boarders. Smith J (at 263) held that this was a matter to which regard might be had, observing:

Then again the surrounding circumstances point to the wider meaning because it is the less restrictive of user. The plaintiff was already the tenant of the premises free from any restriction on user, and he had for years been using them for the purposes now said to be precluded by cl 7. The transaction, in its general nature, was an extension of the duration of his tenancy, giving him security of tenure without alteration in the rent payable. And in such a transaction it would seem odd to find a provision precluding the tenant from continuing the existing long established user. There is nothing in the evidence to suggest that it would have been of any advantage whatever to the grantor to impose such a restriction, and obviously it would have been a serious disadvantage to the tenant, who was deriving an income from the existing user. The case of City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129; [1958] 2 All ER 733, should not, in my view, be regarded as preventing the taking into account of these surrounding circumstances in determining which of its possible meanings the word ‘dwelling-house’ bears in cl 7: cf Hall v Lund (1863) 1 H & C 676; Hart v Hart (1881) 18 Ch D 670 at 692; [1881–5] All ER Rep Ext 1745; Bank of New Zealand v Simpson [1900] AC 182; Odgers, Construction of Deeds and Statutes, 4th ed, p 83. In Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Mason J stated the rule (see 348–52) which his Honour summarised in the following terms (at 352): The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed. See also Prenn v Simmonds [1971] 1WLR 1381 at 1383–4 (HL) (per Lord Wilberforce); Plumrose Ltd v Real and Leaseholds Estates Investment Society Ltd

[1970] 1 WLR 52; Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973)129 CLR 99; Reardon-Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989 (HL); Westminster City Council v Duke of Westminster [1991] 4 All ER 136 at 141 (per Harman J); Ong v Luong (1991) 9 BPR 16,795 (where it was found that ‘lock-up shop …’ was not ambiguous etc); Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290; Highpoint Homemaker Centre (Vic) Pty Ltd v Sanatar Pty Ltd (1997) V ConvR ¶54-564 [page 158] (CA); Kilkerrin investments Pty Ltd v Yiu Ying Mei Pty Ltd (2001) Q ConvR ¶54-551; Royal Botanical Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] ANZ ConvR 192; and Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; and see [6.4]. The status of the ‘true rule’ as expressed by Mason J in Codela has more recently been the subject of some conjecture, and of different judicial opinion: see Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2012] QSC 182; Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR 113; Newey v Westpac Banking Corporation [2011] NSWCA 319; Technomin Australia Pty Ltd v Xstra Nickel Australasia Operations Pty Ltd [2014] WASCA 164; Stratton Finance Pty Ltd v Webb (2014) 314 ALR 166; Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190. Some clarity has been provided in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, where French CJ, Nettle and Gordon JJ said: [47] In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; 306 ALR 25; [2014] HCA 7 at [35] (Electricity Generation). That enquiry will require consideration of the language used by the parties in the contract, the

circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract; Electricity Generation at [35]. [48] Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to a contract) cannot be adduced to contradict its plain meaning; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (Actions Nos 71 and 72 of 1981) (1982) 149 CLR 337; 41 ALR 367; [1982] HCA 21 at CLR 352; ALR 374 (Codelfa Construction); See also Sir Anthony Mason, “Opening Address” (2009) 25 Journal of Contract Law 1 at 3. [49] However, sometimes recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”; Electricity Generation at [35], citing Codelfa Construction at CLR 350; ALR 373, in turn citing Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995–6; [1976] 3 All ER 570 at 574 (Reardon Smith). The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. [50] Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist [page 159] in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the

parties’ statements and actions reflecting their actual intentions and expectations; Codelfa Construction at CLR 352; ALR 374; Reardon Smith at WLR 995-6; All ER 574. The High Court then went on to say that ‘these observations are not intended to state any departure from the law as set out in Codelfa Constructions and Electricity Generations’: at [52]. Extrinsic evidence may be admitted as to whether the entire agreement between the parties is contained in the written document: see Norwest Beef Industries Ltd v Peninsular and Oriental Steam Navigation Co (1987) 8 NSWLR 568 (CA) at 570 (per Hope JA); and see Robinson v Day (1992) 106 FLR 423 at 426 (SC(ACT)). Evidence of subjective intention is not admissible to remove a patent ambiguity in the course of construing a document: see Leprina Appointments Pty Ltd v State Authorities Superannuation Board (1990) 5 BPR 97,332 at 11,171 (per McLelland J); and see Codelfa Construction. In Sykes v Ranken (1971) EG 1005, the question of whether the defendant accepted an offer of a lease (containing certain terms) was resolved by looking at his conduct during the relevant period. In Graystone Property Investments Ltd v Margulies [1984] 1 EGLR 27 the Court of Appeal took account of the usual expectation in construing the lease of a flat as including all the space between the floor of the flat and the underside of the flat above, the effect of which was to include the area above a false ceiling. Nevertheless attention should first be given to the terms of the lease read as a whole. In Straudley Investments Ltd v Barpress Ltd [1987] 1 EGLR 69 (CA) it was held that it could be inferred that the demise was of the whole building including the roof and airspace, although not specified in the parcels clause, because the intention was clear that the tenant’s repairing covenant included the roof. Surrounding circumstances may not be used to vary the natural and ordinary meaning of clear and unequivocal words: Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported). If a covenant in a sublease follows the language of a covenant in the head lease it may be necessary to give the same meaning to the words in question in both instruments notwithstanding the existence of surrounding circumstances which might affect the interpretation of the sublease but which could not be

used in construing the head lease, Re Automotive & General Industries Ltd’s Lease. Where an instrument is in a printed form with written additions or alterations, the written words (subject always to being governed in point of construction by the language and terms with which they are accompanied) are entitled in a case of reasonable doubt as to the meaning of the whole to have greater effect attributed to them than the printed words: see Addis v Burrows [1948] 1 KB 444 (CA) at 449 (per Evershed LJ); and at 457 where Lord Greene MR said: [page 160] … apart from striking any words out, the fact that the parties have deliberately typed into this document words creating a tenancy for eighteen months made it clear that it must be so construed, and that, if necessary, the subsequent words in print must yield to that construction. Nevertheless it has been said that this does not mean that the printed terms are to be overridden, if clear, or ignored in the overall construction process: ‘we are to take the whole together, both the written and the printed parts’: see Joyce v Realm Marine Insurance Co (1872) LR 7 QB 580 at 583 (per Blackburn J). But the courts soon moved to giving more weight to the written terms which, in all probability, represent the more considered position of the parties. Thus in Western Assurance Company of Toronto v Poole [1903] 1 KB 376 at 388 Bingham J said that the written clause must prevail where the written and printed clauses are inconsistent. Similarly, in G H Renton & Co Ltd v Palmyra Trading Corporation of Panama [1956] 1 QB 462 (CA) where Jenkins LJ said (at 501): … where … any of the printed conditions is found to be inconsistent with or repugnant to the main object and intention of the bill of lading as disclosed by the terms specially agreed, the court will limit or modify the conflicting printed condition to the extent necessary to

enable effect to be given to such main object and intention, or in the case of complete repugnancy wholly reject it. See also Riley (Inspector of Taxes) v Coglan [1967] 1 WLR 1300; and Lewison, The Interpretation of Contracts (6th ed), para 9.10. The more modern cases in this context reflect the general approach of the courts that they will try to give effect to the bargain made between the parties: see [4.2]. The fondness for printed forms of leases and other instruments gives this rule some practical importance in matters of real property and landlord and tenant. In Mobil Oil Australia Ltd v Kosta [1970] ALR 253; 14 FLR 343, it was held, not following TJ Watkins Ltd v Cairns Meat Export Co Pty Ltd [1963] Qd R 21, that in construing the agreement the court was not entitled to have regard to words which had been struck out of the agreement. The court refused to look at words struck out in Harrod v Palvaris Construction Pty Ltd (1973) 8 SASR 54. In City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129; [1958] 2 All ER 733, Harman J declined to look at words which appeared in a draft and did not appear in the lease as executed. His Lordship referred to commercial cases where printed forms had been used and attention had been paid to words struck out and said that, assuming that method of construction to be legitimate, it must be confined to commercial cases where the words struck out appeared on the face of the signed documents and could not be extended to looking at words which appeared in a draft. Leases, like other deeds, are to be construed against the grantor: Johnson v Edgware Railway Co (1866) 55 ER 982 at 983–4. A proviso for re-entry will be construed strictly: Doe d Abdy v Stevens (1832) 3 B & Ad 299; 110 ER 112. In Robinson v Day Higgins J said (at 106 FLR 426) referring to the judgment of Mason J in Codelfa Construction that: [page 161] A specific refusal to include a particular term might, his Honour said, be receivable in evidence. Higgins J continued (at 426): The parties should not be presumed to have intended a meaning they

have expressly rejected. In NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481, Rogers CJ Comm D gave effect to that qualification. His Honour received evidence of refusal to include a term which, in the absence of such evidence, would have otherwise been taken to have been implied. In Brennan v Kinjella (1993) 6 BPR 97,442 at 13,172 Young J also adopted the approach taken in NZI Capital Corporation which, in turn, relied upon the statements of Mason J in Codelfa Construction at 149 CLR 352–3. Some earlier contrary authorities (including Mobil Oil Australia Ltd v Kosta) were also referred to by Young J at 13,172. Similarly in Centrepoint Custodians Pty Ltd v Lidgerwood Investments Pty Ltd [1990] VR 411, Ormiston J had regard to clauses deleted from the lease by orders made by the Federal Court under the Trade Practices Act 1974 (Cth) for the purpose of interpreting other, undeleted, parts of the lease. On the basis of the more recent decisions the law appears to be as stated by Rogers CJ Comm D in NZI Capital Corporation. In Ecosse Property Holdings Pty Ltd v Gee Dee Pty Ltd (2017) 343 ALR 58; (2017) 91 ALJR 486, the High Court noted that each party to the appeal accepted it was permissible for courts to have regard to words deleted from a standard form contract, but which remained legible on the face of the document, as an aid to the proper construction of the relevant clause. This does not affect the rule that evidence of subjective intention is not admissible to remove a patent ambiguity in the course of construction: see Leprina Appointments and Codelfa Construction. As the cases indicate, there is also controversy as to whether a court is permitted to consider deleted provisions of documents in circumstances where the document in which the deletion is found is not a contract in a standard form in general use and also whether deletions can only be considered in circumstances where the remaining words of the contract produce an ambiguity: see Lewison, pp 93–4, para 3.04. These reservations appear to stem from the judgment of Diplock J in Louis Dreyfus & Cie v Parnaso Cia Naviera SA [1959] 1 QB 498 at 513, but do not appear to be supported in the first respect by an advice of the Privy Council in Sassoon & Sons Ltd v International Banking Corp [1927] AC 711 or, in the second respect, by a decision of the House of Lords in Inglis v Buttery (1878) 3 App Cas 552: and see Lewison, pp 93–4, para 3.04. Subject to these comments it is helpful to refer to part of the

speech of Lord Cross of Chelsea (with whom the two other members of the majority in the House of Lords, Lord Hodson and Lord Wilberforce agreed) in Mottram Consultants Ltd v Bernard Sunley & Sons Ltd [1975] 2 Lloyd’s Reports 197 at 209: One must I think, first ask oneself what the position would have been had the contract not been varied. Suppose that Mottrams were alleging that the architect had negligently stated in several interim certificates that expenses had been incurred by the contractor [page 162] in executing the works which had not in fact been incurred and were claiming to deduct the amounts which they said had been improperly included in the earlier certificates from the amount stated to be due in a subsequent certificate. In the absence of any suggestion of fraud on the part of the architect or the contractor — and there is, of course, no suggestion of fraud here — I cannot see how it could have been argued that such a deduction could be made. Condition 28(d) states that the only sums which can be deducted from the amount stated to be due in an interim certificate are (i) retention money and (ii) any sum previously paid. It is, moreover, to be noted that the printed form which the parties used provided for a third permissible deduction which the parties deleted. It ran as follows: (iii) Any amount which the employer or the co-ordinator on his behalf shall be entitled to deduct from or set off against any money due from him to the contractor (including any retention money) in virtue of any provisions of the contract or any breach thereof by the contractor. When the parties use a printed form and delete parts of it one can, in my opinion, pay regard to what has been deleted as part of the surrounding circumstances in the light of which one must construe what they have chosen to leave in. The fact that they deleted (iii) shows that these parties directed their minds (inter alia) to the question

of deductions under the principle of Monde v Steel and decided that no such deductions should be allowed. A fortiori no deduction could have been allowed for an alleged mistake by the architect in issuing a certificate. At first sight the Victorian decision in Centrepoint Custodians Pty Ltd v Lidgerwood Investments Pty Ltd [1990] VR 411 (per Ormiston J) may be thought to be authority for the proposition that further evidence will be required in relation to the purposes of the parties in making deletions to a document. However, a consideration of the whole of the judgment of Ormiston J in that case appears to indicate that any comments made by Ormiston J in this vein are not authority for this proposition. They were directed to the issue whether evidence may be relied upon to establish that the parties have departed from ‘certain standard or conventional terms or conditions’ under which they were ‘accustomed to dealing with each’; in which circumstance ‘it would not seem necessary to establish that fact by reference only to the crossing or striking out of particular printed terms on a form, as long as it could be shown by appropriate evidence that all parties were aware of the whole of the terms of a standard or conventional contract’: at 423. Rather, it appears that the position with respect to deletions, in this context, is conveniently summarised by Ormiston J in the following passage (at 422: and see 421–2): A distinction drawn in the authorities appears to have been given some significance. On the one hand there is no case of which I am aware in which a court has looked for the purpose of interpretation to a draft contract or term which has been rejected in the course of negotiations, although in several cases, some of which have been cited above, a court has been prepared to look at a clause or words which have appeared on, but which have been struck out of, a standard form contract. This distinction has been justified by saying that evidence of negotiations is always irrelevant to the process of construction, but that a deliberate and mutually agreed deletion of a standard form term may throw [page 163]

light on the parties’ intentions in cases of ambiguity: cf City and Westminster Properties (1934) Ltd v Mudd [1959] Ch 129, at pp 140–1 and London and Overseas Freighters Ltd v Timber Shipping Co SA [1972] AC 1, at pp 15–16. In many ways there is robust common sense in looking at terms which undoubtedly all parties have deliberately chosen to strike out, certainly where part of the structure of a conventional or well known form is deleted. The distinction is, however, one which is hard to justify, for in an era of word processors standard agreements take many forms, and it may be just as clear from other extrinsic evidence that both parties have agreed not to include a term normally found in a standard contract or in a contract which the parties have frequently used for earlier transactions, which for brevity I have called ‘conventional’ contracts. In the present general context reference should also be made to the question whether a court may have regard to the deletion of material from earlier drafts of a written agreement. This question was considered by Hayne J (then a Judge of the Victorian Supreme Court) in Jasam (AMC) Pty Ltd v The Australis Marketing Corporation (Int) Pty Ltd (SC(Vic), Hayne J, 23 February 1995, unreported) (at 20–2): However, as Mason J acknowledged in Codelfa (149 CLR at 352–3): There may perhaps be one situation in which evidence of the actual intention of the parties should be allowed to prevail over their presumed intention. If it transpires that the parties have refused to include in the contract a provision which would give effect to the presumed intentions of persons in their position it may be proper to receive evidence of that refusal. After all, the Court is interpreting the contract which the parties have made and in that exercise the Court takes into account what reasonable men in that situation would have intended to convey by the words chosen. But is it right to carry that exercise to the point of placing on the words of the contract a meaning which the parties have united in rejecting? It is possible that evidence of mutual intention, if amounting to

concurrence, is receivable so as to negative an inference sought to be drawn from surrounding circumstances. Now, as I have said elsewhere, Esso Australia Ltd v Australian Petroleum Agents’ and Distributors’ Association (unreported 5 October 1993) the trend of authority would seem now to be in favour of receiving evidence of the fact of rejection of a particular form of a draft if to do so would negative an inference sought to be drawn from the surrounding circumstances that the contract bears a meaning that is positively rejected by the parties. (See NZI Corporation v Child (1991) 23 NSWLR 481 at 490–494; MCA International BV v Northern Star Holdings Ltd (1991) 4 ACSR 719 at 725; Brennan v Kinjella Pty Ltd [1993] NSW ConvR 59,858.) However I do not consider that it is every deletion or every rejection of a form of words in an earlier draft that may be tendered in evidence as an aid to construction. First, it may be that if the words used in the final written agreement are clear and unambiguous they should be given effect according to their terms unless one party is able to obtain rectification of the instrument. Second, even if the words of the contract are ambiguous and resort is had to surrounding circumstances, the bare fact of rejection of an earlier draft or deletion of particular words may be equivocal. Thus, the rejection of the earlier draft or deletion of particular words may say nothing about how or why the parties took those steps. Was it because the new draft was thought to be more elegant or achieved the particular ends of one or other of the parties? Perhaps this is [page 164] why there is what Diplock J referred to as ‘a pleasant diversity of authority’ concerning the effect that should be given to the deletion of words in construing agreements (Louis Dreyfus & Cie v Parnaso Cie Naviera SA [1959] 1 QB 498, 513). Mason J spoke in Codelfa only of circumstances in which parties

united in rejecting a particular meaning and of ‘evidence of mutual intention, if amounting to concurrence’ as receivable to negate an inference sought to be drawn from surrounding circumstances and I tend to the view that it is only evidence of that kind that is receivable. Thus in the present case the evidence tendered should be rejected unless it shows a united rejection of a meaning or concurrent mutual intention.

Subsequent conduct and prior negotiations [6.6] As has been foreshadowed (see Spunwill Pty Ltd v Bab Pty Ltd ((1994) 36 NSWLR 290 at 300), where a document is the subject of ambiguity in the sense that it is capable of more than one meaning, the question arises whether evidence is admissible of what the parties said or did under the document for the purpose of seeing whether it is to be construed as bearing one or another of the possible meanings. In FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 (FC) it was held that such evidence was not admissible: compare Robinson v Hudson (1950) 68 WN (NSW) 9 and Appleby v Pursell [1973] 2 NSWLR 879; and see Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 (CA) where the question was discussed but was not necessary to determine. Brooking J in FAI Traders Insurance reviewed the often conflicting or ambiguous authorities. His Honour, with whom the other members of the court agreed in substance, reached the position that the views of the House of Lords endorsed by Menzies, Gibbs and Stephen JJ in Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 (at 405, 446 and 460, respectively) should be adopted. Gibbs J (with whom Menzies and Stephen JJ agreed) said (at 446): The general principle of the law is that ‘it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made’: Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583, at p 603; see also [1970] AC, at pp 606, 611, 615; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, at pp 252, 259–60, 261, 265–70, 272–73. Gibbs J in that part of his Honour’s judgment quoted by Brooking J (at [1993] 2 VR 349–50) continued, referring to some exceptions:

However, the decision in Watcham v Attorney-General (East Africa Protectorate) [1919] AC 533 that evidence may be given of subsequent conduct of the parties for the purpose of resolving an ambiguity in an instrument relating to land, although criticized, may possibly be supported as laying down a special rule for the interpretation of such instruments: see L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235. Reference was also made to the exception with respect to the construction of ‘ancient’ documents: North Eastern Railway Company v Lord Hastings [1900] AC 260 at 268–9. The court of FAI Traders Insurance apparently did not consider either exception [page 165] to be relevant (and, of course, the lease was not an ‘ancient’ document). Brooking J continued (at [1993] 2 VR 350): Even if the matter rested there [ie with the PNG case] I would have no doubt that this court should adopt the view taken by the House of Lords and endorsed by three members of the High Court, but there is in addition a seventh decision of the High Court, Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, where Mason J, as his Honour then was, cited with approval, at p 348, something that Lord Wilberforce had said in the Schuler case: The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties’ intentions must be ascertained, on legal principles of construction, from the words they have used. It is one and the same principle which excludes evidence of statements, or action, during negotiations, at the time of the contract, or subsequent to the contract, any of which to the lay mind might at first sight seem to be proper to receive. The part of the judgment of Mason J in which this citation appears was concurred in by Stephen J, at p 344, and Wilson J, at p 392.

Any general principle that the conduct of the parties after a contract has been made may be used as throwing light on its meaning would be uncertain in its operation and mischievous in its effect. The present case affords a good example. This is a lease of a valuable building for a term of 71 years. Is a prospective purchaser of the term to ascertain its provisions not simply by examining the instrument but also by calling for evidence of what has been done under it? Is there any limit to the conduct to which regard may be had as an aid to interpretation? Does it include mere statements as opposed to acts? Is the conduct of one party admissible or must the conduct be the concurring conduct of all? Is the conduct of a party which favours the view on construction which his supports admissible even if it is not concurred or acquiesced in by the other? In principle, why should evidence of subsequent conduct be admissible where direct evidence of intention is not? FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd was considered at length but not followed by Santow J in Spunwill Pty Ltd v Bab Pty Ltd (at 36 NSWLR 304–12). In general terms Santow J declined to follow the Victorian Full Court on the basis that the position adopted with respect to evidence of subsequent conduct was not justified by earlier Australian (including High Court) authority (at 304–8); there is no special rule that such evidence should be excluded, the question is only an issue within the parol evidence rule (at 308); the admission of such evidence is not at odds with the so-called objective theory of contract (at 309–12); and such evidence is admissible in other jurisdictions with comments or indications in the cases that this is desirable (307 and 312, at the latter referring to Re Canadian National Railways and Canadian Pacific Ltd (1978) 95 DLR (3d) 242 at 262 (per Lambert JA)). Thus the position reached was that although the general rule is that evidence of subsequent conduct is not admissible it is not an absolute rule, any more than the rule with respect to evidence of prior negotiations (at 309). More particularly Santow J said (at 306–10): Caution as to the conclusions reached in FAI Traders [(1993) Aust Contract Reports ¶90-025] is required due to the weight given by Brooking J, with whom the other

[page 166] judges agreed, to the authority of Administration of the Territory of Papua and New Guinea v Daera Guba. Despite the views of the New South Wales Court of Appeal in Hide and Skin Trading, Brooking J in FAI Traders (at 89,583) [at [1993] 2 VR 349–50], treated Administration of the Territory of Papua and New Guinea v Daera Guba as decisively overruling the earlier authorities, for the reasons that the passage of Gibbs J represented ‘a considered statement of principle in the light of the decisions of the House of Lords’, and that the views of the House of Lords were ‘endorsed by three members of the High Court’. In the context of considering the validity of an order in council in Administration of the Territory of Papua and New Guinea v Daera Guba, Gibbs J stated (at 446): If it were admissible to give evidence of acts done under the Order in Council for the purpose of resolving an ambiguity in it, the instrument registered on 17 March 1905 would provide the strongest evidence that the boundary of the land described in the schedule to the Order in Council was intended to go round section I to section VIII. The general principle of the law is that ‘it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made’: Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583 at 603; see also [1970] AC at 606, 611, 615; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, at 252, 259–60, 261, 265–70, 272–73. However, the suggestion that the dicta in Administration of the Territory of Papua and New Guinea v Daera Guba represents a sufficiently unequivocal endorsement of the views of the House of Lords to overrule previous High Court authorities such as White must be regarded as somewhat questionable for two reasons, at least. First, while Menzies J and Stephen J gave general agreement to the comprehensive and lengthy discussion by Gibbs J of the several alleged

causes of invalidity in the order, they did not expressly mention the question of post-contractual conduct. Secondly, because Gibbs J was able to conclude that the order in council on its proper construction included the land in question without recourse to subsequent conduct, he did not have to embark on a comprehensive examination of this question. Though Gibbs J did in dicta endorse the English rule, he did so without addressing previous Australian authority on this topic, without examining the justifications for such an exclusionary rule, and without considering the possibility that the law in Australia may differ from that in England, as indeed it does in Canada (see cases cited in Hide & Skin Trading (at 315)), the United States (Uniform Commercial Code 1987, text, par 2-208; Restatement (Second) Contracts, par 202(4)), and ‘every other civilised system of law, including the countries of the common market’: per Lord Denning in Port Sudan Cotton Co v Govindaswamy Chettiar & Sons [1977] 2 Lloyd’s Rep 5 at 11. (New Zealand may experience some regret at its apparent relegation to the realms of uncivilised systems of law as a result of Herriott v Crofton Holdings Ltd [1974] 2 NZLR 383.) Thus while the statement of Gibbs J in Administration of the Territory of Papua and New Guinea v Daera Guba, invites the conclusion that the earlier High Court authorities employing subsequent conduct as an aid to construction of written contracts are now in doubt, it should not be treated as decisive of the issue. Possibly the most important reason that caution is required as to the conclusion expressed by FAI Traders, is due to the treatment given the decision of Mason J in Codelfa Construction. Brooking J noted (at 89,583) [at [1993] 2 VR 350] that Mason J [page 167] (at 348) cited with approval a portion of Lord Wilberforce’s judgment in L Schuler AG, in a passage with which Stephen J agreed (at 344) and

Wilson J agreed (at 392). The relevant passage from the judgment of Mason J in Codelfa Construction (at 348) is as follows: On the other hand, it has frequently been acknowledged that there is more to the construction of the words of written instruments than merely assigning to them their plain and ordinary meaning — see, for example, the remarks of Knox CJ in Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 69. This has led to a recognition that evidence of surrounding circumstances is admissible in aid of the construction of a contract. So Lord Wilberforce in L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 261 was able to state the broad thrust of the rule in this way: The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties’ intentions must be ascertained, on legal principles of construction, from the words they have used. It is one and the same principle which excludes evidence of statements, or actions, during negotiations, at the time of the contract, or subsequent to the contract, any of which to the lay mind might at first sight seem to be proper to receive. His Lordship noted that evidence of surrounding circumstances is an exception to the rule, but he had no occasion to discuss its scope for there it was not, as it is here, a critical question. [My emphasis.] Brooking J in FAI Traders quoted only the middle paragraph from the above passage, and relied upon it as support for a special rule specifically preventing use of subsequent conduct as an aid for the construction of written documents. It was assumed in FAI Traders that there was no exception to this special rule. However, when read in context, the passage from Codelfa Construction appears to invite a contrary conclusion. Rather than being excluded by a special rule, subsequent conduct is excluded as part of the parol evidence rule: the parties’ intention must be determined from the words they used, and extrinsic evidence is not available for the construction of a written

contract, whether that extrinsic evidence is from prior to, at the time of, or subsequent to the time of contracting: see also Australian Estates Ltd v Palmer (Court of Appeal, 22 December 1989, unreported) at 50, per Samuels JA, with whom Kirby P agreed. Further, the parol evidence rule is subject to the exception that evidence of surrounding circumstances is available as an aid to construction of an ambiguous written contract, an exception whose scope was not defined in L Schuler AG. The possibility is thus raised, if subsequent conduct is excluded by the general parol evidence rule rather than specifically excluded by a special rule of construction, that such evidence may in some circumstances satisfy the criteria necessary to be admissible under the recognised exceptions to that rule, and in particular the ‘surrounding circumstances’ exception. Thus the status of subsequent conduct is not to be decided by the opinions of the House of Lords in L Schuler AG, but rather by an examination of Codelfa Construction to determine the scope of the surrounding circumstances exception to the parol evidence rule. Mason J discusses the scope of this exception in Codelfa Construction. It is worth quoting from the judgment of his Honour (at 353) in some detail: The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible [page 168] of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed. It is here that a difficulty arises with respect to the evidence

of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both the parties and the subject matter of the contract. To the extent which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. Mason J makes it clear, in the passage quoted above, that the scope of the ‘surrounding circumstances’ exception to the parol evidence rule is to be determined in the context of the objective theory of the contract. The object of construction is to determine the apparent intention of the parties at the time of contracting; that is, to discover and give effect to the contractual obligations that reasonable persons in the position of the parties would objectively have intended the document’s language to create. Extrinsic evidence is only available to the extent it assists in this process of determining the presumed

intention of the parties, by placing the language of the document in the context of the objective framework of facts from which it arose. Extrinsic evidence of facts, statements and conduct known to both parties when the contract was made is relevant to this process, as it will illuminate the meaning that reasonable persons in the position of the parties objectively intended ambiguous language of the document to bear. Extrinsic evidence which merely illuminates the actual subjective intentions, aspirations or expectations of the parties does not assist in discovering the presumed intention and is inadmissible. The question thus arises as to whether extrinsic evidence of subsequent conduct can ever assist in this process of determining the presumed intention of the parties. Clearly the fact that post-contractual conduct is known to both parties is not relevant, as the object is to determine the apparent intention of the parties at the time of contracting. Such conduct, however mutually known, was not part of the objective background facts at [page 169] that time. Subsequent conduct generally only has a logical relevance to the meaning of a contract as later evidence of what the parties believed the contract originally meant at the time of contracting. To the extent that this belief was not mutual, such a logical relevance is dispelled under the objective theory of contract discussed by Mason J in Codelfa Construction. Thus the general rule is that subsequent conduct may not legitimately be employed as an aid to construction. This general rule is not, however, absolute. Under the objective theory of the contract, evidence of actual intention is admissible in the limited circumstance where it is evidence of a ‘shared subjectiveness’, that is to say of matters in common contemplation or of common assumption. Such matters of mutual subjective intention are themselves part of the objective framework of facts within which the contract came into existence, and are thus receivable as part of the surrounding factual

circumstances. For example, extrinsic evidence is admissible to show that the parties negotiated on the basis that ambiguous language had a particular meaning; parties can in effect give their own dictionary meaning to words as a result of their common intention: per Kerr J, The Karen Oltmann [1976] 2 Lloyd’s Rep 708. To be admissible, the extrinsic evidence must unambiguously show actual common agreement as to the meaning of an expression: Burns Philp Hardware Ltd v Howard Chia Pty Ltd; Secured Income Real Estate (Australia) v St Martins Investments Pty Ltd (1979) 144 CLR 696; Mason J in Codelfa Construction (at 354) allows use of prior negotiations for the purpose of revealing matters in common contemplation or of common assumption. He states (at 352–3): After all, the court is interpreting the contract which the parties have made and in that exercise the court takes into account what reasonable men in that situation would have intended to convey by the words chosen. But is it right to carry that exercise to the point of placing on the words of the contract a meaning which the parties have united in rejecting? It is possible that evidence of mutual intention, if amounting to concurrence, is receivable so as to negative an inference sought to be drawn from surrounding circumstances. Thus evidence of a mutual subjective intention is admissible as part of the surrounding circumstances, as an objective fact that illuminates the meaning a reasonable person in the position of the parties would attach to a provision. Mutual subjective intention is a factor to be taken into account in determining presumed intention, without necessarily being determinative. As was said in an analogous context: ‘Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always, the determining factor’: Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 330, per Mahoney JA. His Honour then considered the question whether any other factors required a different position to be taken as to the admissibility of pre-

contractual and post-contractual intention and concluded that they did not (see 36 NSWLR 310–11). However, the approach of Santow J to the subsequent conduct of the parties was not adopted by Bryson J in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 at 114–16: The English law on this subject is very clear: the later conduct and statements of parties are not admissible even to resolve an ambiguity in the meaning of the contract. It is [page 170] admissible to identify the things with which the contract deals, and that is a different subject. The law was stated clearly and shortly in speeches in the House of Lords in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583. Lord Reid stated the basis of the doctrine (at 603): ‘I must say that I had thought that it is now well settled that it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made. Otherwise one might have the result that a contract meant one thing the day it was signed, but by reason of subsequent events meant something different a month or a year later.’ In L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 views to a similar effect were expressed in the House of Lords. An exception relating to land titles based on Watcham v Attorney-General of East Africa Protectorate [1919] AC 533 was considered. In most of the speeches treatment was brief. Lord Reid (at 252), Lord Morris of Borth-Y-Gest (at 260), Lord Kilbrandon (at 272). Lord Wilberforce spoke at greater length (at 261–262) and Lord Simon of Glaisdale (at 265–270). It is significant that Lord Simon (at 269) referred to the opinion of Baron Parke in Shore v Wilson (1842) 9 Cl & F 355 at 555–556; 8 ER 450 at 528–529 which referred to the admissibility of evidence of the meaning of foreign and technical language and for the identification of

the subject matter and went on, as quoted by Lord Simon (at 270), to say: From the context of the instrument, and from these two descriptions of evidence, with such circumstances as by law the court, without evidence, may of itself notice, it is its duty to construe and apply the words of that instrument; and no extrinsic evidence of the intention of the party to the deed, from his declarations, whether at the time of his executing the instrument, or before or after that time, is admissible; the duty of the court being to declare the meaning of what is written in the instrument, not of what was intended to have been written. In Australia the authorities up to 1990 were referred to in the judgment of Kirby P in Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 315–316, with references to the position in New Zealand, Canada and the United States and to the dangers of expanding the field of inquiry. Priestley JA (with whom Meagher JA agreed (at 331)) made a lengthier examination of Australian and English authority. Statements in judgments in the High Court in Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 treat the House of Lords decisions as establishing the general principle that ‘… it is not legitimate to use as an aid in the construction of the contract anything which the party said or did after it was made’: Gibbs J (at 446). However Priestley JA regarded expressions in judgments in White v Australian & New Zealand Theatres Ltd (1943) 67 CLR 266 as being to a different effect, including an enumeration by Williams J (at 281) of matters admissible to identify the meaning of words in a written contract. It was Priestley JA’s view (at 328) that as there seemed to be conflicting authority in the High Court it was prudent to consider the effect of the evidence. When considered the evidence did not affect construction of the contract. In White, Williams J (at 281) set out eight surrounding circumstances admissible in evidence to identify the meaning of the

words ‘sole professional services’ including two which were later conduct relating to the subject of the agreement. In my respectful [page 171] view, the inclusion by Williams J of those circumstances among the material considered for the purpose of identifying the ‘sole professional services’ referred to in the letter of agreement was entirely orthodox and furnishes no support for any view in which resort may be had to parties’ later conduct and behaviour for resolving ambiguities in the text of an agreement or for construction of what the written agreement said. In FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 and in Re Homfray Carpets Australia Pty Ltd & Hycraft Carpets Pty Ltd (1996) 14 ACLC 555, the Court of Appeal of Victoria has adhered firmly with the position as established in England. In Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290 at 304 to 312, Santow J in this Division expressed a different view. I see the treatment of this subject in the judgments in the Hide & Skin Trading case in a different way to Santow J. To my reading the judgments do not support any different view to that of Gibbs J in Daera Guba. With respect I do not understand Priestley JA as endorsing the views expressed in White by observing that those views were entirely rational. In the case of an oral agreement, later statements and conduct of the party could well be admissible as admissions or constructive admissions of the meaning of terms on which parties had agreed, and there is no rule of exclusion of evidence extrinsic to oral statements constituting agreement. It could not be said that it is not rational to adopt a rule admitting such evidence where the agreement was in writing; nor could that be said of adopting the contrary rule. Priestley JA was directing himself to the state of authority, and the incontestable observation that the broad view is entirely rational did not express adherence to that view. Notwithstanding the force which would ordinarily be attributed to a later considered statement in High

Court judgments, Priestley JA’s conclusion was that the earlier statements made it prudent to consider what conclusion would be reached on the broader basis. In my opinion it cannot be said that Kirby P came to a conclusion supporting the broader basis. In my view the opinions expressed in Administration of the Territory of Papua New Guinea v Daera Guba, coming as they did after the High Court had given attention to the subject a number of times earlier in the century and after a very firm conclusion had been reached for the law in England, have great force for courts in New South Wales, including primary judges like myself. A rule in which later declarations and conduct could be looked to where admissible to resolve ambiguities would have advantages as well as inconveniences; but there is no such rule. In my respectful opinion the consideration stated by Lord Reid is of overwhelming and unanswerable importance. The contract cannot mean one thing if it is never acted on, and something else if it is. The meaning of the words used in a written agreement is the same, in my opinion, whether the parties did not ever do anything under it, or acted on it every day for many years, and cannot change if evidence of what they did under it becomes unavailable because the contract has been forgotten, or because everyone concerned is now dead. There are also policy considerations which weigh strongly against acting on such evidence; it is an invitation to engage in contrived behaviour, and it would lead to the admission of large bodies of evidence which in their nature require interpretation and are more difficult to interpret than the original agreement; to be picked over for assertions that they show something about the original agreement: an expanded inquiry on an inherently less reliable body of material than what the parties recorded at the time they came to agreement. It would be necessary to infer their earlier intentions from their later actions and intentions, using some form [page 172]

of the presumption of continuance. Litigants would be tempted to prove every event in relation to performance and to assert that they all contained grains of confirmation. The parties’ later declarations and conduct do not bear directly on the matter in issue, which is what their intentions were at the time when they entered into the Agreement. Bryson J then noted references, in Grant v Grant (1870) 5 CP 727 (at 728 and 729), by Blackburn J to his own text ‘Contract of Sale’ (1845), and said that the text references did not support reference to evidence of later conduct to resolve ambiguity, or to do anything but to identify the subject matter referred to; but were to the contrary: see (1998) 44 NSWLR 103 at 116–18. The position taken by Bryson J received support in the judgment of Heydon JA (with whom Mason P and Ipp J generally agreed, but did not specifically explore this issue; and cf Ipp J at [140], which may be thought to be equivocal in the present context) in Brambles Holdings Ltd v Bathurst City Council (2001) NSWLR 153 at 164: [26] The third relevant principle is that post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether it was formed. As explained by Priestley JA (Meagher JA agreeing) in Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 326–330, the status of the relevant High Court authorities is unclear: hence unless it is demonstrated that the later decisions of the Victorian Full Court and Court of Appeal against admissibility, Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 and FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343, are clearly wrong or they are overruled, they should be followed in New South Wales. No attempt was made to demonstrate that they are clearly wrong. Ipp JA (with whom Meagher and Heydon JJA agreed) made further comment on the issue in C H Magill v National Australia Bank [2001] NSWCA 221; (2001) Aust Contract R ¶90-131, noting that the issue was yet to be authoritatively determined: [50] The admissibility of subsequent conduct as an aid to the construction of a contract remains to be authoritatively resolved. It is

sufficient to point to the differing views flowing from Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 expressed by Santow J in Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290 (where subsequent conduct was held to be potentially admissible) and by Bryson J in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 (where the contrary was held). [51] In my respectful opinion the views expressed in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd are to be preferred. Like Bryson J, I consider the reasoning of Lord Reid in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 at 603 to be unanswerable. His Lordship there said: I must say that I had thought that it is now well settled that it is not legitimate to use as an aid in the construction of the contract anything which the parties said or did after it was made. Otherwise one might have the result that a contract meant one thing the day it was signed, but by reason of subsequent events meant something different a month or year later. [page 173] [52] The force of these remarks is well illustrated by the present case. I have come to the conclusion that, as at 20 November 1978, upon a construction of the written record of the contract of loan constituted by the letter of that date, CBC was the lender of the loan to be made thereunder, and not PIBA. In theory, were it to be permissible to have regard to the conversation nearly two months later between Mr Magill and Mr Munro, the contract of loan might then be differently construed, with PIBA and not CBC being held to be the lender. On this basis, CBC would be held to be the lender for nearly two months and PIBA the lender thereafter. This would be a situation of incongruity that the law could not tolerate. [53] Other intermediate courts of appeal have concluded that

subsequent conduct is not admissible for the purposes of construing a contract: see FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343; Hamfray Carpets Australia Pty Ltd v Hycraft Carpets Pty Ltd (1996) ACLC 555; Winstonu Pty Ltd t/as Harvey Norman Electrics v Pitson [2001] FCA 541. This is the law of England: L Schuler AG v Wickman Machine Tools Sales Ltd [1974] AC 235. I would adopt this rule. As to Victoria, in so far as the law in that state as to the admissibility of evidence of subsequent conduct is settled by FAI Traders, the judgment of Santow J in Spunwill Pty Ltd v Bab Pty Ltd provides a useful analysis of the authorities on the admissibility of extrinsic evidence generally. In PCM Nominees (No 2) Pty Ltd v Brighton Bay Developments Pty Ltd (2007) V ConvR 54-727; [2006] VSC 351, Whelan J said, with respect to the position in Victoria: [51] The Court of Appeal has made it clear that the position in Victoria is that evidence of later conduct is inadmissible for the purpose of interpreting a contract [FAI Insurance Traders Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343; Ryan v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 and Collins Hill Group Pty Ltd v Trollope Silverwood and Beck Pty Ltd [2002] VSCA 205 (‘Collins Hill Group’)]. The only qualification to this general principle is that postcontractual conduct might be an appropriate means in a particular case of drawing inferences in the conventional way as to relevant circumstances existing before or at the time of the making of the contract [The existence of this qualification was suggested by Ormiston JA in Collins Hill Group at [44]]. Additionally Ormiston JA, in Collins Hill Group, indicated that the position in Australia may now conform with the position in Victoria, against the admissibility of evidence of subsequent conduct in the process of contractual interpretation (at [44]): What has been said on a number of occasions in this State, and not seriously doubted by intermediate courts of appeal in other States, is that this evidence of later conduct is inadmissible for the purpose of interpreting a contract: see FAI Traders Insurance Co Ltd v Savoy Plaza

Pty Ltd and Ryan v Textile Clothing and Footwear Union of Australia [[1996] 2 VR 235]. This view seems largely now to be accepted by the Court of Appeal in New South Wales: see Brambles Holdings Ltd v Bathurst City Council [(2001) 53 NSWLR 153 at 164 para [26]) and C H Magill v National Australia Bank Ltd. [[2001] NSWCA 221; (2001) Aust Contract R ¶90-131: at para [50] – para [53]]. The only qualification [If so it can be described. It could only affect interpretation if the matrix is properly in issue.] I would place on this is that the rule is intended to apply to conduct which [page 174] might otherwise have reflected an assumption or acceptance of a particular meaning of a term or terms of a contract; I would not see it necessarily as preventing the use of post-contractual conduct as a means of drawing inferences in the conventional way as to relevant circumstances existing before or at the time of the making of the contract [Cf the 2nd and 3rd propositions in para 13-100 of Carter on Contract (2002) (looseleaf, 2002). A similar view was expressed by Campbell JA in Franklins Pty Ltd v Metcash Pty Ltd (2009) 76 NSWLR 603 at 681–2: The objective theory of contract is now clearly established in Australian contract law: Taylor v Johnson (1983) 151 CLR 422; 45 ALR 265; Pacific Carriers at [22]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; 211 ALR 101; [2004] HCA 55 at [34] (Equuscorp); Toll at [40]–[44]. I would accept that, at the level of whether as a matter of ordinary human experience one piece of evidence can make more probable the existence or non-existence of some disputed fact in issue, subsequent conduct can sometimes provide a legitimate insight into what were the mutual beliefs of the parties, or the belief of one of the parties, about the scope of the obligations they were undertaking at the earlier time of contracting — it is a particular example of retrospectant evidence. However, under the objective

theory of contract such beliefs of the parties at the time of contracting are of no significance to what the terms are of the contract that has been entered. Rather, the terms of the contract depend upon what a reasonable observer would understand from what was said or written at the time of contracting, in the context in which it was said or written. It necessarily follows that subsequent conduct of the parties cannot enter into that exercise. His Honour then went on to say that this does not mean that in no circumstance would the subsequent conduct of the parties be admissible (at [324]): It could happen that an event occurring after was made was used as proof of matter that is relevant to construction of the contract even on the objective theory of contract. If, for example, a contracting party admitted, after the contract had been made, the truth of some fact that was a relevant part of the context in which the contract has been made, I see no reason why that admission could not be used as part of the means of proof of that background fact. See also Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570, where the High Court (Gummow, Hayne and Kiefel JJ) referred to ‘the general principle that “it is not legitimate to use as an aid in the construction of [a] contract anything which the parties said or did after it was made”: James Miller & Partners Ltd v Whitworth Street Estates Ltd [1970] AC 583 at 603; [1970] 1 All ER 7976 at 7989’: at 582. Evidence of prior negotiations is admissible to the extent that it goes to establishing objective background facts which were known to both parties and the subject matter of the contract: Codelfa Construction Pty Ltd v State Rail Authority of NSW at 149 CLR 352–3 (per Mason J); and see Spunwill Pty Ltd v Bab Pty Ltd at 36 NSWLR 308 and 310 where the relevant passages from the judgment of Mason J are quoted (set out above). [page 175]

Implication of terms

[6.7] In general the rules in relation to the implication of terms in leases are to be found in the rules applying to the implication of terms in contracts: see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282–4; and (1977) 52 ALJR 20 at 26–7; Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 (CA), which may include an implied obligation of good faith in performing obligations and exercising rights, see at 363–9 (Sheller JA, with whom Powell and Beazley JJA agreed); and see Greig and Davis, Law of Contract, pp 538–60; and see [8.1]. There are, nevertheless, particular instances with respect to leases where the general rules either have not by their application produced the implication of a particular term, or type of term, or are subject to an exception or a presumption or rule of law to the contrary (and see [8.1]). For example the general refusal of the courts to imply a term imposing obligations on a landlord to repair (see [10.1]) is probably an instance of the general rules failing, by their own operation, to produce the implied term whereas the refusal of the courts to imply a term that non-residential premises are reasonably fit for the permitted purpose (see [8.1] and [8.6]) is probably an example of the operation of an exception or presumption. Nevertheless, whatever the correct analysis, an express covenant may deal with these issues in any way the parties agree. This warning that general contractual doctrines in relation to the implication of terms may not apply fully to leases is becoming less apposite as the High Court and the House of Lords move to apply contractual doctrines to leases more generally (see, for example, [6.10] in relation to the doctrine of frustration and [16.26] in relation to repudiation); but, in this respect, the distinction between an agreement for lease, as an executory contract to grant a lease, and a formal lease, as an actual grant, should be kept in mind: see [4.1], and also [4.2] and [4.8]. Generally the courts will attempt to give business efficacy to commercial agreements, including leases, where possible: see Deneys v Delafotis (1992) V ConvR ¶54433; Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429; Western Australian Trustees Ltd v Poon (1991) 6 WAR 72 at 80 (CA) (per Malcolm CJ); Perpetual Trustee Co Ltd v Crooks Michell Peacock Stewart Pty Ltd (1992) 5 BPR 97,415 at 11,869 (CA(NSW); Kirby P); Kazas & Associates Pty Ltd v Multiplex (Mountain Street) Pty Ltd (2002) 11 BPR 20,353 at [55]–[68] (SC(NSW), Palmer J); Alamdo Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd (2007) NSW ConvR

¶56-167 (CA); and Moratic Pty Ltd v Gordon (2007) 13 BPR 24,713; and see, for further examples, other authorities referred to with respect to rent review provisions in leases at [11.9]. Nevertheless there is a difference of fundamental significance which should be kept in mind, which was highlighted by Ipp J (with whom Malcolm CJ and Wallwork J agreed) in City of Subiaco v Heytesbury Properties Pty Ltd (2001) 24 WAR 146 (FC) (at [33]–[42], particularly [34]): The City contended that the mere letting of the premises for a particular purpose did not give rise to an implied term that the premises could lawfully be used for that purpose, and relied on Hill v Harris [1965] 2 QB 601, where Diplock LJ said at 614–615: [page 176] It has been submitted that, where a lease of property is entered into and it is in the contemplation of both parties that the property shall be used for a certain purpose, there is contract or condition on the part of the landlord, implied by law, that the premises are fit for the purpose, that is to say, that they can lawfully be used for the purpose, and that there will be no let or hindrance to their being so used. That is a proposition in support of which no authority has been cited. Devlin J in Edler v Auerbach [1950] 1 KB 359 said at 373: The relevant principle of law was enunciated by Parke B in Hart v Windsor [1843] 12 M & W 68 at 87 and quoted with approval by Scrutton LJ in Bottomley v Bannister [1932] 1 KB 458 at 468 and is as follows: There is no contract, still less a condition, implied by law on the demise of real property only, that it is fit for the purpose for which it is let. Devlin J went on at 374: This principle has often been applied in cases where the premises are physically unfit for the purpose. I think it equally

applicable where premises are, so to speak, legally unfit. It is the business of a tenant, if he does not protect himself by an express warranty, to satisfy himself that the premises are fit for the purpose for which he wants to use them, whether that fitness depends upon the state of their structure, the state of the law, or any other relevant circumstance. [Counsel for the lessee] has pointed out that that statement of the law by Devlin J has not yet received approval from a higher court. I think that the sooner it does the better, and as far as I am concerned I am prepared to approve it here and now. Russell LJ also approved the principle enunciated in Edler v Auerbach [1950] 1 KB 359 at 374. Sellers LJ agreed with both Diplock LJ and Russell LJ. A distinction between commercial documents and conveyancing documents for the purpose of reading a presumed intention into a document was drawn by Wells J in Mestros v Blackwell (1974) 8 SASR 323 at 327, where his Honour said that the approach of reading a presumed intention into a document to give it business efficacy is more properly applied to purely commercial documents and commercial enterprises rather than to conveyancing documents: but compare United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; [1977] 2 All ER 62 (HL); and note that the South Australian decision was some years before the trend to treat leases as being more akin to contracts became clear (see above). As to the implication of a term with respect to the obligations of guarantors for a renewed lease term, see Verdi La Fontana Pty Ltd v Mabrouk Pty Ltd (1992) 5 BPR 97,381 (CA(NSW)); and see [14.1]. A term will not be implied where it would operate inconsistently with a provision excluding s 144 of the Property Law Act 1958 (Vic) (its exclusion having the effect of conferring an absolute discretion on a landlord whether to consent or not to a proposed assignment of lease): Australian Mutual Provident Society v 400 St Kilda Road [page 177]

Pty Ltd [1991] 2 VR 417 at 425 (FC), applying BP Refinery (Westernport) Pty Ltd v Shire of Hastings; and see [15.6]. A lease, like any other document, should be construed as a whole: see Combara Nominees Pty Ltd v McIlwraith-Davey (1991) 6 WAR 408 at 417 (FC) (per Rowland J), referring to Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109 (per Gibbs J); and see Sunskill Investments Pty Ltd v Townsville Office Services Pty Ltd [1991] 2 Qd R 210 where construction of the document as a whole was significant with respect to the meaning of particular covenants. The general rules of construction of contracts and other documents are applicable to leases, subject to the particular comments made here and in other parts of this work. In addition to the texts referred to in [6.1], see also Lewison, The Interpretation of Contracts (6th ed) para 6.01 and following. As to construction of covenants, particularly, see [7.2]; and as to implied covenants, see Chapter 8, below.

Rectification [6.8] The remedy of rectification is available in the case of leases as in the case of other instruments. The party claiming rectification must prove that the instrument does not represent the common intention of the parties; proof of a previously existing contract is not, however, necessary: see, for example, Slee v Warke (1949) 86 CLR 271 at 280–1; Joscelyne v Nissen [1970] 2 QB 86; Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463 (this decision of Crockett J, and the principles applied, was affirmed by the Full Court, [1976] VR 725); and L E Stewart Investments Pty Ltd v F C & M Legge Building Contractors & Developers (2003) 11 BPR 21,053 at [10]–[13] (per Barrett J). The principles to be applied, together with the authorities, were considered by Sheller JA (with whom Mahoney AP and McLelland AJA agreed) in Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 338–40: Mason J, [in Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336] with whose judgment Menzies J agreed (at 349), summarised the effect of the evidence by saying that the written

instrument was not executed as the result of a mistaken belief as to what it contained. The purchaser’s representative was mistaken as to its effect but not as to its contents. His Honour quoted from the judgment of Lord Chelmsford LC in Fowler v Fowler (1859) 4 De G & J 250 at 265; 45 ER 97 at 103. The person seeking rectification must establish clearly ‘that the alleged intention to which he desires’ (the instrument) ‘to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought’. Mason J continued (at 349): … On other occasions statements have been made which emphasize that it is for the plaintiff to show that by the writing sought to be rectified the parties intended to record the terms of an antecedent oral bargain and that by common mistake there is a disconformity between the oral bargain and the writing (United [page 178] States of America v Motor Trucks Ltd [1924] AC 196 at 200, per Earl of Birkenhead). The difference in expression is not of importance. It is explained partly by the difference in the character of written instruments sought to be rectified and partly by the more recent desire to emphasize that the remedy is designed to relieve against the mistaken expression of the true agreement of the parties. As Mason J pointed out (at 350) the existence of an antecedent agreement is not essential to the grant of relief by way of rectification. ‘It may be granted in cases in which the instrument sought to be rectified constitutes the only agreement between the parties, but does not reflect their common intention.’ It will be seen that his Honour’s remarks were directed to demonstrate that, although there may have

been an oral, although unenforceable, agreement with which the written instrument did not conform and although at all times up to the conclusion of the auction the parties may have intended that a written contract would be executed to record the terms of the auction sale, it remained for the purchaser to prove that the parties intended by the writing to give effect to the whole of the antecedent agreement and that by common mistake they had failed to do so. His Honour said (at 350–351): It may be asked why should a plaintiff be required to establish more than disconformity between the antecedent agreement and the written instrument. Why should he be called upon to show that the writing was intended to give effect to the whole of the oral contract and that by common mistake the written instrument failed to do so? The answer lies in the circumstance that the court must be satisfied that the instrument does not reflect the true agreement of the parties. It cannot be so satisfied unless the writing was intended to record the earlier agreement and by the mistake of the parties it fails to do so. If the plaintiff fails to establish these elements he does not displace the hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties. Mason J said (at 351): Mr Mutton did not intend to give effect to the entire antecedent agreement by the writing. He was content to allow the auctioneer’s statement as to finance to remain apart from the written contract. Furthermore, the appellant and the respondent, knowing through Mr Mutton and Mr Brady respectively that the contract contained a provision requiring payment of cash on completion, executed the contract with that knowledge. Accordingly, the appellant has not shown that in this respect the instrument was intended to record the antecedent oral agreement or that the instrument by common mistake failed to conform to that agreement. The parties assented to a provision

calling for payment of cash on completion which differed from that agreement. They were not mistaken as to the contents of the written instrument. Although Mr Mutton was mistaken in the reason which led him to accept the contract in its written form, the unilateral mistake which he made as to its legal effect was not a mistake of the kind that grounds rectification. In Pukallus v Cameron (at 452), Wilson J observed that so long as there was a continuing common intention of the parties, it may not be necessary to show that the accord found outward expression, notwithstanding the views expressed to the contrary in Joscelyne v Nissen [1970] 2 QB 86 at 98 and Maralinga (at 350). Brennan J (at 457) referred to [page 179] the passage in the judgment of Lord Helmsford in Fowler v Fowler and quoted from Mason J’s judgment in Maralinga (at 349) and the need for the alleged intention to continue concurrently in the minds of the parties down to the time of the execution of the writing. Sheller JA continued, with respect to ‘governing intention’ (at 341): In his book The Principles of Equitable Remedies, 4th ed (1990) Dr Spry QC (at 597–598), dealing with the case where the parties were aware of the precise terms of the relevant part of the document but misapprehended their effect, distinguished between two positions. He said (at 597): … The first position occurs where the concurrent intention, that is, the intention that the document is desired to effectuate, remains the governing intention. In this event it should not matter that the precise terms of the document have been seen by the parties, and rectification, where otherwise appropriate should be ordered. The learned author referred to the judgment of Brightman J and

continued (at 597–598): … The second position arises where the parties, whatever their previous intention may have been, have ceased to retain that intention as their governing intention and have formed instead an intention to be bound by the precise terms of the document in question, regardless of possible discrepancies between its provisions and prior or other intentions on their part. In this event rectification is not appropriate. Maralinga was treated as an example of the second position. However Dr Spry went on to advert to another complicating factor. He said that the different considerations apply whether relevant mistake does not arise through a lack of conformity between a document and the concurrent intention of the parties, but rather arises through an error underlying that intention itself. Where there is no lack of conformity between the document and the concurrent intention, the basis for rectification does not exist. These principles may justify the decision in Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [[1953] 2 QB 450]. An error of law or other error may have related only to the expected consequences of an agreement and not to what the parties have actually agreed. In conclusion, Sheller JA stated (at 344): In Bush v National Australia Bank Ltd (1992) 35 NSWLR 390 at 406, Hodgson J said that he thought the preponderance of authority now favours the view that, ‘provided all other requirements of rectification are satisfied, rectification will not be refused merely because the common mistake is as to the legal effect of the words used, rather than as to the actual words used’. His Honour said (at 407): In such cases, it will often be the case that each party will have conflicting intentions as to the document. It may well be the case that each party intends to give effect to the document as it is worded, but also intends to enter into a transaction with a particular legal effect, which is not the true legal effect of the document as worded. The problem is not unlike that in the

case of a mistake as to the identify of a person with whom one is making a contract: one may [page 180] intend to contract with a person with a particular name and description, but also intend to contract with the very person who is present; and in subsequent legal proceedings, a decision may have to be made as to which intention should prevail. So it may also be with this type of rectification, with the additional complication that the intention and mistake must be clearly proved. So one needs to be able to say that, although in a sense the parties intended to be bound by a document which included certain words, nevertheless their intention to achieve a legal effect which was not the true legal effect of those words was somehow predominant over that other intention, and clearly predominant. This accords with Dr Spry’s ‘governing intention’. Summarising, in Prestige Land Developments Pty Ltd v Eagle Hotels Pty Ltd (1996) NSW ConvR ¶55-764 Santow J said (at 55,875): The first requirement is that the party seeking rectification must be able to establish a common intention of the parties, being that which is subjectively foreseen by all parties and intended to be effected by the document and which subsists up to and including the time of execution of the document; Commissioner of Stamp Duties v Carlenka Pty Ltd and Anor (Court of Appeal 28 August 1995, unreported per Mahoney AP at 3). That common intention may be reflected in an antecedent agreement between the parties, though this requirement is no longer necessary if a common intention so subsisting can otherwise be established; Maralinga Pty Ltd v Major Pty Ltd (1973) 128 CLR 336 per Mason J at 350. The second requirement to be satisfied is that the effect of the document sought to be rectified is not only in disconformity with the

antecedent agreement between the parties or with the other expression of their common intention still held at the time of its execution, but also that the document must have been intended by all parties to give effect to ‘the whole of’ that antecedent agreement or other expression of common intention and by common mistake did not; Maralinga Pty Ltd v Major Enterprises Pty Ltd (supra) at 350–1 per Mason J. Thus mistake by only one party as to the legal effect of the document does not suffice to ground rectification if the other party did not share that mistake. In this context ‘effect’ of the document refers to the legal and factual operation of the document or instrument, according to its true construction. Thus it does not include legal or factual consequences of the operation of the instrument of a more remote or collateral kind (such as its liability to stamp duty), per McLelland AJA in Commissioner of Stamp Duties v Carlenka Pty Ltd and Anor. The third requirement, applicable where the document involves a misapprehension of its terms, though purposely entered into, is that it must be clearly proven that the parties have a predominant or governing intention to give effect to their common intention, which prevails over any intention to enter into the document sought to be rectified; Bush v National Australia Bank Ltd (1992) 35 NSWLR 380 at 407 per Hodgson J. And see Winks v W H Heck & Sons Pty Ltd [1986] 1 Qd R 226, particularly the judgment of Thomas J at 237, referred to by Sheller JA in Carlenka at 342– 3; and see Simic v New South Wales Land and Housing Corp (2016) 339 ALR 200; (2016) 91 ALJR 108. Also, in Waipara Pty Ltd v Police Association of Victoria (1997) V ConvR ¶54-557, Hansen J said (at 66,695): [page 181] It ought not be inferred from what I have said that I am of the view that rectification is possible only in circumstances where one or both parties are mistaken as to the actual terms of their contract. There may

well be cases in which rectification is properly ordered where both parties know precisely what words are incorporated into their written agreement, but one or both parties are mistaken as to the meaning or effect of the words so used. The decision of Doyle CJ in Australian Consolidated Investments Ltd v Southern Equities Corporation Ltd (unreported, 1 November 1995, sub-nom Australian Consolidated Investments Ltd v England (1995) 183 LSJS 408) (‘ACIL’) may be such an example. And see, similarly, Classic International Pty Ltd v Lagos (2002) 60 NSWLR 241 at 249–50, [42] (per Palmer J). In order to obtain rectification of a lease it is not enough to show, for example, that both parties, in fact, intended that the defendant should be allowed to reside on the demised premises; there must have been a common intention to insert such a provision in the lease: City and Westminster Properties (1934) Ltd v Mudd [1959] 1 Ch 129 at 143; and see Swainland Builders Ltd v Freehold Properties Ltd [2002] 2 EGLR 71 (CA) at [33] (per Peter Gibson LJ); and KPMG LLP v Network Rail Infrastructure Limited [2007] Bus LR 1336. The lessor and lessee executed an original and counterpart of a lease, the counterpart having deleted from a printed list of lessee’s obligations therein the payment of rates and insurances. By mutual mistake, these items were not deleted from the original. The lessee was entitled as against the lessor to have the lease rectified by deleting the reference to rates and insurance premiums, and his rights were held to be protected against a purchaser by s 42(2)(e) of the Transfer of Land Act 1958 (Vic): Downie v Lockwood [1965] VR 257. There must be clear evidence that this intention of the parties is not reflected in the document sought to be rectified: see Pukallus v Cameron (1982) 180 CLR 447 at 457 per Brennan J; Waipara Pty Ltd v Police Association of Victoria (1997) V ConvR ¶54-557; affd on appeal (1998) V ConvR ¶54-583; and Misner v Australian Capital Territory (2000) ACTR 1. Also essential is a common mistake ‘or a unilateral mistake made by the party claiming rectification which, at the time the contract was entered, was known to but not corrected by the other party, or where the other party was responsible for the first party’s unilateral mistake’: see Waipara ¶54-557 at 66,693 (per Hansen J), referring to Maralinga; and Australia and New Zealand

Banking Group Ltd v Letore Pty Ltd (SC(Vic), 22 December 1994, unreported (BC9401303)) where Hansen J said (at BC 38): In a case of unilateral mistake, if one party to a transaction knows that the instrument contains a mistake in his favour and that the other party does not and he does nothing to correct it and allows the other party to sign the document, he will be precluded from resisting rectification. In A Roberts and Co Ltd v Leicestershire County Council (1961) Ch 555 at 570 this was described as ‘a species of equitable estoppel’. Cf Royal Bank of Canada v Oram, Rowberry and Hoggard (1978) 1 WWR 564. The present is a clear case of unconscionable dealing. [page 182] … It was submitted that the courts have been reluctant to rectify written instruments and have imposed a high standard of proof of the terms of any alleged agreement, because of the problem which a case such as the present highlights, namely, trying to ascertain from versions of the facts, what was in fact agreed or intended to occur. The relevant standard of proof is, of course, on the balance of probabilities. I bear in mind the warnings as to the degree of satisfaction required, in determining this case. See Commerce Consolidated at 730; Pukallus v Cameron (1982) 56 ALJR 907 at 909 and 911; The Bacchus Marsh Concentrated Milk Co Ltd (In Liquidation) v Joseph Nathan and Co Ltd (1919) 26 CLR 410 at 433. In A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555 at 570, Pennycuick J adopted the principle as stated in Snell’s Principles of Equity, 25th ed (1960), p 569, as follows: By what appears to be a species of equitable estoppel, if one party to a transaction knows that the instrument contains a mistake in his favour but does nothing to correct it, he (and those claiming under him) will be precluded from resisting rectification on the ground that the mistake is unilateral and not common.

The principle thus enunciated was referred to with approval by the Court of Appeal in Riverlate Properties Ltd v Paul [1975] Ch 133 at 140; [1974] 2 All ER 656 at 660, but with the gloss that the ‘[k]nowledge of the intention and mistake of the other party must be a question of fact to be decided on the evidence … such as to involve the lessee in a degree of sharp practice’. In Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 the Court of Appeal reviewed the Roberts and Riverlate cases, with approval, and again endorsed the principle, but subject to the comment (at 515) that the reference to ‘sharp practice’ in the Riverlate case was an obiter dictum. Buckley LJ emphasised that the basis of the principle was that the defendant’s conduct ‘must be such as to make it inequitable that he should be allowed to object to the rectification of the document’. In so doing his Lordship strengthened the foundations of the principle in equitable estoppel and avoided the possibility of it being narrowed as some species of fraud. In conclusion, Buckley LJ, with whom other members of the court agreed in substance, said: For this doctrine (that is to say the doctrine of A Roberts v Leicestershire County Council) to apply I think it must be shown: first, that one party, A, erroneously believed that the document sought to be rectified contained a particular term or provision, or possibly did not contain a particular term or provision which, mistakenly, it did contain: second, that the other party, B, was aware of the omission or the inclusion and that it was due to a mistake on the part of A: third, that B has omitted to draw the mistake to the notice of A. And I think there must be a fourth element involved, namely that the mistake must be one calculated to benefit B. If these requirements are satisfied, the court may regard it as inequitable to allow B to resist rectification to give effect to A’s intention on the ground that the mistake was not, at the time of execution of the document, a common mistake. Eveleigh LJ added that he did not think it was necessary to show that the party aware of the mistake would be benefited. He said (at 521): ‘It is enough that the [page 183]

inaccuracy of the instrument as drafted would be detrimental to the other party, and this may not always mean that it is beneficial to the one who knew of the mistake.’ This view is to be preferred as more consistent with the basis of the ‘doctrine’ as an equitable estoppel. It is difficult to see why it would be any the less inequitable for one party to stand by and knowingly, gratuitously, allow the other to act to his or her detriment. In the context of the broad view Buckley LJ took in other respects it seems surprising that he would have intended to restrict the principle. Nevertheless, his Lordship’s fourth point is unambiguous and approved by the third member of the court, Brightman LJ (as he then was). See also Slee v Warke (1949) 86 CLR 271; Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463; Majestic Homes Pty Ltd v Wise [1978] Qd R 225; Taylor v Johnson (1983) 151 CLR 422; Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98; State Rail Authority of NSW v Ferreri (1990) NSW ConvR ¶55-512 (per Young J); Thermoplastic Foam Industries Pty Ltd v Imthouse Pty Ltd (1990) 5 BPR 97,334; and Wu v Glaros (1991) 55 SASR 408 (FC). The basis of relief by way of rectification for unilateral mistake is necessarily different from rectification for mutual mistake (and also from rescission): see Terceiro v First Mitmac Pty Ltd (1997) 8 BPR 15,733; and Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust (2004) 11 BPR 21,629. In Terceiro v First Mitmac Pty Ltd McLelland CJ in Eq said (at 15,739): The principles which govern rectification for unilateral mistake are founded upon the concept of unconscionable conduct in the sense in which that expression is used as a description of a species of equitable fraud. In the context of a claim for rectification for the unilateral mistake of one party, the unconscionable conduct of the other party ‘must be such as to make it inequitable that he should be allowed to object to the rectification of the document’ (per Buckley LJ in Thomas Bates & Son at 515). It is important to note, as was pointed out by Stuart-Smith LJ in Commission for New Towns [v Cooper (Great Britain) [1995] Ch 259 (CA)] (at 278), after referring to the decision of the High Court of Australia in Taylor v Johnson 151 CLR 422, that Taylor ‘was a case of rescission, and the same principles do not ordinarily apply, for the simple reason that in rescission the Court simply undoes the bargain, provided that the parties can be restored to their original

position; in rectification for unilateral mistake the original bargain is undone and a different one imposed’ (and see Meagher, Gummow & Lehane Equity Doctrines & Remedies (3rd ed) at para 2615 where it is said ‘… the fundamental bases of the remedies of rescission and rectification are entirely different. The latter supposes that there was a valid agreement which has been incorrectly documented, the former that in equity there never has been a valid agreement at all’). In other words unconscionable conduct sufficient to found a remedy by way of rescission is not necessarily sufficient to found a remedy by way of rectification. Furthermore, the elements of unconscionable conduct which would justify rectification for unilateral mistake must be proved to the same clear and convincing standard as the elements which would justify rectification for common mistake (cf Whittet v State Bank of NSW [(1991)] 24 NSWLR 146 at 150–4 per Rolfe J). [page 184] And further, in relation to unilateral mistake, see Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust (2004) 11 BPR 21,629 at [24] and [25] (per Barrett J), particularly the reference to the position as stated in Taylor v Johnson: [24] In the case of unilateral mistake, where the actuating misapprehension is said to have operated upon one party but not the other, rectification is generally not permissible. There is, however, an exception where the party not under the misapprehension is guilty of fraud, whether actual, constructive or equitable. The relevant principle was stated by Mason ACJ, Murphy and Deane JJ in Taylor v Johnson (1983) 151 CLR 422 at 432–433 as follows: The particular proposition of law which we see as appropriate and adequate for disposing of the present appeal may be narrowly stated. It is that a party who has entered into a written contract under a serious mistake about its contents in relation to a fundamental term will be entitled in equity to an

order rescinding the contract if the other party is aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension … In such a situation it is unfair that the mistaken party should be held to the written contract by the other party whose lack of precise knowledge of the first party’s actual mistake proceeds from wilful ignorance because, knowing or having reason to know that there is some mistake or misapprehension, he engages deliberately in a course of conduct which is designed to inhibit discovery of it. Clear and convincing proof is required of the factual elements necessary to establish a claim for rectification: see Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329; Waipara Pty Ltd v Police Association of Victoria (1997) V ConvR ¶54-557; affd on appeal (1998) V ConvR ¶54-583; Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336; Pukallus v Cameron (1982) 180 CLR 447; 56 ALJR 907; Terceiro v First Mitmac Pty Ltd (1997) 8 BPR 15,733; and L E Stewart Investments Pty Ltd v F C & M Legge Building Contractors & Developers (2003) 11 BPR 21,053 at [10]–[13] (per Barrett J); Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust (2004) 11 BPR 21,629; Stormriders Pty Ltd v Copperart Pty Ltd (2005) NSW ConvR ¶56-110; Carrathool Hotel Pty Ltd v Scutti (2006) NSW ConvR ¶56-132; and Aspro’s Pty Ltd v Hayter [2005] ANZ ConvR 425 (SC(NSW), Bergin J). As an equitable remedy the grant of relief by way of rectification is discretionary, in relation to which general equitable principles apply: see Re Butlin’s Settlement Trusts [1976] Ch 251; and Misner v Australian Capital Territory (2000) ACTR 1. Also applicable are the usual priorities rules applicable to legal and equitable interests: see Wu v Glaros (1991) 55 SASR 408 (FC). This case contains a discussion of the application of the equitable priorities rules as between the equity of the tenants under an agreement for lease and that of a purchaser under a contract of sale: see at 55 SASR 414–15,

relying upon Lapin v Abigail (1930) 44 CLR 166 and Taddeo v Catalano (1975) 11 SASR 492. [page 185] In Robinson v Young [2005] NSWSC 777 Smart AJ considered the relative priorities of the interest of a tenant of Torrens title land under an unregistered lease, who claimed rectification on the basis of a unilateral mistake in the omission of a particular document from the lease, and the equitable interest of a purchaser of the freehold under a contract of sale. It was accepted that the tenant’s equity was a personal equity as envisaged in Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) (1965) 113 CLR 265 and, consequently, the question was whether the purchaser had taken subject to this equity, which, in turn raised the question whether the purchaser was a bona fide purchaser for value without actual or constructive notice of this equity: see [2005] NSWSC [52] and following. In considering this question Smart AJ said: [66] The sheet anchor of its submission was the decision of Upjohn J (as he then was) in Smith v Jones 1954 2 All ER 823. … [68] … Although it did not arise for decision, but because it had been fully argued, his Lordship dealt with the second defence that the defendant was a bona fide purchaser for value without notice of the plaintiff’s equity: Upjohn J adopted these statements of principle from Barnhart v Greenshields (1853) 9 Moo PC C 32, 14 ER 204 (citations omitted): With respect to the effect of possession merely, we take the law to be, that if there be a tenant in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor, and that the equity of the tenant extends not only to interests connected with his tenancy, as in Taytlor v Stibbert, but also to interests under collateral agreements, as in Daniels v Davidson, Allen v Anthony, the principle being the same in both classes of cases; namely, that the possession of the

tenant is notice that he has some interest in the land, and that a purchaser having notice of that fact, is bound, according to the ordinary rule, either to inquire what that interest is, or to give effect to it, whatever it may be. And continued: Later in the judgment Mr Pemberton Leigh cited a passage from the judgment in Allen v Anthony where Lord Eldon, LC said: It is so far settled as not to be disputed, that a person purchasing, when there is a tenant in possession, if he neglects to inquire into the title, must take, subject to such rights as the tenant may have. [69] Upjohn J continued at 827: … it would be extending the doctrine of notice and the obligation to make inquiry far too much if the doctrine was extended to cover an equity of rectification. [70] Upjohn J explained that the purchaser was bound by the rights of the tenant in occupation and must look at and is bound by the tenancy agreement. [71] Upjohn J stated (at 827): … a purchaser is not only entitled but bound to assume, when he is looking at the agreement under which the tenant holds, that the agreement correctly states [page 186] the relationship between the tenant and the landlord and he is not bound to ask or make inquiry whether the tenant has any rights which would entitle him to have the agreement rectified. [72] In Smith Upjohn J was not dealing with a case where extrinsic evidence was admissible to resolve an ambiguity nor with a case where

the written agreement specifically referred to another document (Annex C) and to additional leased property. On its face the 2002 lease suggested that there was a document missing. Mr Young contended that even if the verbatim equivalent of Annex C was not incorporated in the 2002 lease nevertheless the references in it pointed to a document which should have been included and should have formed part of the 2002 lease and, at the very least, required inquiries to be made to ascertain the true position. In spite of the distinctions that could be drawn with the situation in Smith v Jones, Smart AJ found that in the particular circumstances of Robinson the fact that the lease was incomplete on its face should have prompted enquiry by the purchaser, which would almost certainly have led to the position of the tenant being disclosed: see [2005] NSWSC 777 at [82]. As this case and the references to Smith v Jones indicate, it does not necessarily follow that an equity to rectify based on extrinsic evidence and circumstances will necessarily be discoverable (at least within the bounds of the doctrine of constructive notice and the expectations that apply to the conduct of parties with respect to enquiries that should be made) by a person seeking to take what would be an inconsistent interest — in which case the equity may be defeated by that person as a bona fide purchaser for value without notice of the equity; but cf Ong v Luong (1991) 9 BPR 16,759 where McClelland J reached a different result on the application of ss 42 and 43 of the New South Wales Real Property Act 1900 in the circumstances of that case. A different view of the effect of Smith v Jones was taken by Smith J in Downie v Lockwood [1965] VR 257, in the context of s 42(2)(e) of the Victorian Transfer of Land Act 1958 which provides, as an exception to statutory indefeasiblity, the ‘interest … of a tenant in possession of the land’: see at 259–60. The priority dispute in this case was between the rights of a party in possession under a tenancy agreement and the registered proprietors of the freehold. In this context, Smith J said (at 259): Two views are possible as to what the plaintiff’s rights were immediately before the defendants contracted to buy the land. One is that there were two rights to which he was entitled, namely: (a) an equitable leasehold interest in the land, having among its

incidents an obligation to pay rates and premiums and a power of re-entry for non-payment thereof, and (b) a separate and distinct equity to have the agreement rectified by striking out the references therein to rates and premiums. The other view is that what he was entitled to was an equitable leasehold interest in the land, not subject to any such obligation or power of re-entry as I have just referred to. How matters would stand upon the first of these two views it is unnecessary for me to consider, for, in my opinion, the second of them is the true view. The plaintiff’s [page 187] equitable interest in the land had its existence by reason of the fact that the plaintiff was entitled, as against Tovell’s executrix, to specific performance of the contract made between the plaintiff and Tovell: Lysaght v Edwards (1876) 2 Ch D 499; Coatsworth v Johnson (1885) 55 LJQB 220. The incidents of that interest were determined by the form in which specific performance would have been enforced: Walsh v Lonsdale (1882) 21 Ch D 9. And the cases of Craddock Bros Ltd v Hunt, [1923] 2 Ch 136; [1923] All ER Rep 394, and United States v Motor Trucks Ltd, [1924] AC 196, have made it clear that immediately before the defendants contracted to buy the land the plaintiff was entitled to specific performance in the form of a decree or order requiring Tovell’s executrix to sign and deliver to the plaintiff a registrable lease of the land upon terms imposing no obligation on him to pay rates or premiums and giving no power of re-entry for non-payment thereof. In Wu v Glaros (1991) 55 SASR 408 at 414–15 Olsson J (with whom Matheson and Duggan JJ agreed) treated the competing ‘equities’ arising from an agreement to lease and a contract of sale as both being ‘equitable interests’ of the same status and so applied the ‘first in time rule’; referring to Phillips v Phillips (1861) 4 DeG F & J 208; 45 ER 1164; and Lapin v Abigail. This is consistent with Downie v Lockwood, but not Robinson v Young where the equity

to rectify was treated as a ‘mere equity’ and so liable to be defeated by the bona fide purchaser for value without notice of an equitable interest. The decision of the High Court in Latec Investments Ltd v Hotel Terrigal Pty Ltd (in liq) would seem to indicate that the approach in Robinson v Young is to be preferred in general terms; but even applying this approach it would not follow that a different result would have been obtained in Downie v Lockwood having regard to the provisions of the Victorian Torrens legislation; and see Ong v Luong. As a chose in action a right of rectification is assignable provided, as with assignments of equitable property, the intention to make an immediate disposition is clearly expressed. Thus in Misner Crispin J said (at (2000) 146 ACTR 9 and 10): [27] … It is clear that a right to rectification is a chose in action capable of assignment: see Dickinson v Burrell (1866) LR 1 Eq 337; 35 LJ Ch 371; and Majestic Homes Pty Ltd v Wise [1978] Qd R 225 per Stable SPJ at 232. Furthermore, all that is required to assign equitable property is a ‘clear expression of an intention to make an immediate disposition’: Norman v FCT (1963) 109 CLR 9 per Windeyer J at 30. See also William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 per Lord Macnaghten at 462. It is unclear whether rectification is possible in the case of an assignment of a contractual document (and the contract which it embodies or evidences) which does not contain any reference to an assignment of the right of rectification (see Napier v Williams [1911] 1 Ch 361) though I am inclined to agree with the learned authors of The Laws of Australia that it is probably a matter of construing the subject matter of a particular assignment: see ‘Remedies’, at 7.9. But absent an express assignment, the implication of a term assigning a right of rectification depends on the application of the usual rules in relation to the implication of terms: see Misner at (2000) 146 ACTR 10 and 11. Crispin J, in that case, rejected the argument that the right of rectification passed as a result of registration of a transfer of [page 188]

the lease under the Australian Capital Territory Torrens legislation. His Honour said (at 10): [25] It is clear that what passed to a transferee by virtue of s 77 was the estate or interest of the transferor ‘as set forth in the transfer’ and the rights, powers and privileges belonging or appertaining to that estate or interest. A right to seek rectification is not, in my view, a right which might fairly be described as belonging or appertaining to the leasehold interest so set forth but rather a right in personam to obtain redress in relation to the lease or agreement to lease. [26] It is true that in English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 322 Dixon, Evatt and McTiernan JJ said of a comparable South Australian provision that: … the plan of the legislation is to enable the proprietor to transfer by registration not only the interest in the land, but all the accompanying personal obligations normally incident thereto. However, even if one were to assume that the plan of the legislation extended, conversely, to enabling the transfer of all accompanying personal rights ‘normally incident thereto’ it would be difficult to see how a right to seek rectification could fall within the relevant provision. Whilst Mr Arthur would, no doubt, contend that it was an ‘accompanying’ personal right, it could not be said to be ‘normally incident’ to the estate or an interest as set out in the relevant instrument. In the earlier case of Measures v McFadyen (1910) 11 CLR 723 at 731, Griffith CJ construed the terms of s 52 of the Real Property Act 1900 (NSW), which is a comparable provision to s 78 of the Real Property Ordinance 1925 (ACT) as reflecting an intention to transfer the estate or interest of the transferor in the land with all rights incidental to present and future possession. His Honour observed that he did not think that it was ‘intended to transfer also mere choses in action in respect of past and completed breaches of covenant’. I am not satisfied that the right to rectification can be regarded as falling within these principles and, accordingly, I am unable to be satisfied that Ms

Misner’s right to seek rectification was assigned to the plaintiff by operation of either of these sections. Nevertheless, it is not always necessary to resort to rectification. The courts will go some distance in correcting obvious errors and slips. In Ex parte Whelan [1986] 1 Qd R 500 Thomas J (with whom other members of the Full Court agreed) reviewed the authorities on how far this was possible (at 502– 3): The present case is not one which requires the evidence tests and procedures of rectification to be pursued, as the meaning of the lease is already sufficiently clear. It is sometimes overlooked that ‘words may generally be supplied, omitted or corrected in an instrument, where it is clearly necessary in order to avoid absurdity or inconsistency’ (Fitzgerald v Masters (1956) 95 CLR 420, 426–7). The Court there inferred that the word ‘inconsistent’ must be read as if it were the word ‘consistent’. This salutary exercise is sometimes referred to as the correction of an absurdity or error. An example of application of the principle by this Court may be found in Kavir Pty Ltd v Dwyer [1973] Qd R 192, 198 where certain figures were corrected and the agreement was read as if a particular figure had been deleted. A similar exercise was performed in Re United Pacific Transport Pty Ltd [1968] Qd R 517, 523, in which W B Campbell J (as he then was) made the following observations: [page 189] An instrument is to be construed according to the intention of the parties appearing from the whole of its contents and to that end corrections may be made which a perusal of the document shows to be necessary: and — In my opinion the word ‘mortgagee’ in the latter part of cl 2 of the deed should be read as ‘mortgagor’ otherwise that latter part of the clause is meaningless and clearly contrary to the

intention of the parties as it appears from the whole of the contents of the debenture charge. I do not consider it necessary that there should be an order for rectification of the deed in a suit brought for that purpose before I should give effect to the intention of the parties. It is simply a matter of the interpretation of the document. In the present case all the necessary criteria are present, and it is apparent that words of linkage have been omitted. I do not think that any court since the time of Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 would have any great difficulty in concluding that the parties to this commercial lease did have a meaning and that that meaning is readily ascertainable. The Privy Council recently applied similar reasoning in Watson v Phipps (No 16 of 1985, October 21, 1985) which involved construction of a clause which literally gave a lessee an ‘utterly meaningless’ right to make an offer to purchase the demised land for a specified consideration. Of course anyone in the world could make such an offer without the need for a clause to confer such a right. Their Lordships held that the clause ‘can be read without giving rise to an absurdity if it is construed as creating a right to purchase, and not as creating a meaningless power to make an offer to purchase’. Accordingly the lessee succeeded on construction of the clause, making relief by way of rectification unnecessary. And see Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290 at 299–300; and Westpac Banking Corporation v Tanzone Pty Ltd (2000) 9 BPR 17,521 (CA). But see Miwa Pty Ltd v Siantan Properties Pty Ltd (2011) 15 BPR 29,545, where Basten JA observed that ‘courts have no mandate to rewrite agreements, so as to depart from the language used by the parties, merely to give a provision an operation which, as it appears to the court, might make more commercial sense’: at [18] (emphasis in the original text) Generally, reference should be made to Greig and Davis, Law of Contract, pp 928–38; Seddon, Bigwood and Ellinghaus, Cheshire and Fifoot’s Law of Contract, [12.30]–[12.45]; and also Heydon, Leeming and Turner, Equity

Doctrines and Remedies, 5th ed, [27-005]–[27-160]; and Spry, Equitable Remedies, 9th ed, p 630 and following.

Fraud, illegality and mistake [6.9] The question whether a tenancy agreement was rendered void or illegal by reason of the fact that the premises in respect of which it was made were not registered as required by a by-law and were incapable of registration was considered in Ford v Newton [1949] St R Qd 119. The plaintiff sued for rent under a lease by which he [page 190] had let premises to the defendant knowing that the defendant intended to use them for a dancing studio and for letting for private functions. The premises did not comply with the requirements of an ordinance under the Local Government Act with respect to construction of exits and staircases. The trial judge found that the plaintiff knew that in this regard the defendant’s use of the premises would be unlawful. On appeal it was held that the trial judge was entitled so to find and that in those circumstances the lease was not enforceable by the plaintiff: T P Rick Investments Pty Ltd v Calderon [1964] NSWR 709; (1964) 38 ALJR 43n. In Holidaywise Koala Pty Ltd v Queenslodge Pty Ltd [1977] VR 164, Gillard J recognised the distinction between laws which have the effect of prohibiting the use of premises on the one hand and legislation which may prohibit the letting of the premises on the other hand. In the former case, where a particular use is prohibited, a letting which will involve a use which is prohibited may not be void. In that case, his Honour considered, at 170–6, the relevant authorities dealing with the effect of illegality on the validity of the lease. Failure to provide a proper rent book as required by statute was held not to disentitle the landlord to rent in Shaw v Groom [1970] 2 QB 504; 1 All ER 702. Like other contracts, a lease may be avoided for fraud; moreover, if a lease and some other agreement are interdependent upon one another, fraud

which taints the other agreement will taint the lease also: Campbell v Morris (1952) 69 WN (NSW) 40. In Sowler v Potter [1940] 1 KB 271; [1939] 4 All ER 478, a case which has been discussed frequently, the defendant had on 12 May been convicted under the name of Ann Robinson of permitting disorderly conduct in a cafe conducted by her. In June she entered into negotiations with the plaintiff’s agent for the grant of a lease to her of certain premises to be used as a restaurant and tea-room. During these negotiations she concealed her identity under the alias of Ann Potter, under which name she subsequently obtained the lease. The plaintiff’s agent knew that a woman named Ann Robinson had been convicted of keeping a disorderly cafe, but did not associate that name with the defendant. Tucker J took the view that the lease was void ab initio, on the ground that there was a mistake on the part of the plaintiff as to the identity of the proposed lessee. This decision has been subjected to a good deal of learned criticism, the suggestion being that there was only one entity (the woman known both as Ann Potter and as Ann Robinson), so that the lease was not void on the ground of mistake, but merely voidable for fraud. A party to an illegal or fraudulent transaction may not be denied relief if the cause of action can be proved without proving the illegality or fraud: Muirs v Morrison [1980] VR 83. In that case the defendant was able to prove a tenancy at will without proving the illegality or fraud. The nature of illegality and its effect was considered by Marks J in Dovastand Pty Ltd v Mardasa Nominees Pty Ltd [1991] 2 VR 285 in the context of the requirements of s 15 of the Retail Tenancies Act 1986 (Vic) which regulated the basis upon which [page 191] outgoings could be apportioned and recovered from tenants. His Honour decided that non-compliance with the statutory provisions did not, once and for all, make the outgoings irrecoverable but, rather, that they were not recoverable until these provisions were complied with. The Act did not provide for any penalty or any other consequence for non-compliance. In

response to the tenant’s arguments that the landlord’s claim was unenforceable, Marks J said (at 288–9): Mr Heerey QC for the tenant submitted that as a result the claim of the landlord is unenforceable. He submitted that this resulted from the proper construction of s 15. He relied on a number of authorities to the effect that a contract might become illegal or void in its performance although it was perfectly legal in its making. He cited Anderson, Ltd v Daniel [1924] 1 KB 138 a decision of the Court of Appeal which was followed in B and B Viennese Fashions v Losane [1952] 1 All ER 909 and cited with approval by Brennan J in Trade Practices Commission v Milreis Pty Ltd (1977) 14 ALR 623, at pp 637–9. Mr Heerey placed particular reliance on the statement of Denning LJ in Marles v Philip Trant and Sons Ltd [1954] 1 QB 29, at pp 36–7, to the effect that a contract which becomes unlawful only in the performance of it is not void ab initio but unenforceable. Denning LJ referred to a passage in the judgment of Atkin LJ in Daniel’s Case. However, it is inappropriate here to debate the matter. I observe merely that Mr Heerey sought to extract from these authorities the doubtful proposition that an illegality arising in the performance of a contract has a different consequence from one which arises in its making, namely that in the latter case a question of unenforceability only arises but no question that the contract or a provision of it has become void. I do not think that this is what the authorities say, although it must be conceded that the language of Denning LJ, out of context, might give that impression. But the authority to which his Lordship referred — Lord Atkin in Daniel’s Case — does not support the proposition of Mr Heerey. In the cases cited the contract in its entirety was held to have become void by the illegality in performance. That result is not contended for here nor a result that the lease provisions for payment of the share have become void. In principle, the consequences of illegality must be the same no matter at what time it arises, that is, the courts will not assist either

party to enforce an illegal contract or provision. The concept of unenforceability is susceptible of different juridical analysis. At times, the courts have said that a void contract is unenforceable, at others they have reserved the word ‘unenforceable’ for contracts which are not illegal but which the law will not enforce, for example, oral contracts for the sale of land. The authorities on which Mr Heerey relied also concerned statutes which, unlike the Act, provided penalties for contravention of the relevant provisions. He also referred to Liverpool Borough Bank v Turner (1860) 2 De GF and J 502 which he contended was not such a case as the statute there did not provide for imposition of a penalty. However, the decision turned entirely on the construction of a differently worded statute and on a conclusion that its effect was to render inoperative a contract which did not conform with its requirements. Here, Mr Heerey contends for the legality of the lease but the temporary downfall only of some of its provisions. [page 192] In my opinion, the questions here are to be answered according to the proper construction of the Act and it is unnecessary to debate such problems as might stem from use of the word ‘unenforceable’ in some of the cases to describe not, as Mr Heerey contended, a consequence of something short of a void contract but a consequence of a contract being void ab initio or having become so in its performance. Marks J continued (at 290): It goes without saying that the Act, as is common ground, does not provide a penalty or that there is to be any other consequence of the non-compliance. In Cutler v Wandsworth Stadium Ltd [1949] AC 398, at p 107, Lord Simonds said: It is, I think, true that it is often a difficult question whether,

where a statutory obligation is placed on A, B … has a right of action against him … The only rule which in all circumstances is valid is that the answer must depend on a consideration of the whole Act and the circumstances, including the preexisting law, in which it was enacted. But that there are indications which point with more or less force to the one answer or the other is clear from authorities which, even where they do not bind, will have great weight with the House. For instance, if a statutory duty is prescribed but no remedy by way of penalty or otherwise for its breach imposed, it can be assumed that a right of civil action access to the person with is damnified by the breach. For, if it were not so, the statute would be but a pious aspiration. In Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) CLR 410 members of the High Court emphasised that questions of the present kind turn on application of the ordinary principles that Govern construction of statutes: see Gibbs ACJ, at p 413 and Mason J, as he then was, at p 424 ff. Where the illegality is brought about by an act or omission of the party seeking to have the lease declared void, the legislature must have evinced a clear intention in the wording of the statute that such illegality is to have that effect. In Gnych v Polish Club Ltd (2015) 255 CLR 414, the respondent held premises that were licensed for the sale or supply of liquor for consumption on premises under the Liquor Act 2007 (NSW). The respondent leased part of this licensed premises to the appellants without approval of the Independent Liquor and Gaming Authority, in contravention of s 92(1)(d) of the Liquor Act, which provided that a licensee must not lease or sublease any other part of the licenced premises except with the approval of the Independent Liquor and Gaming Authority. The New South Wales Court of Appeal held that the policy of the Liquor Act meant that a lease that contravened s 92(1)(d) was unenforceable by the courts. In allowing the appeal, the High Court (French CJ, Kiefel, Keane and Nettle JJ) said: [43] Section 92(1)(d) is concerned with the act of the licensee; it proscribes the grant by the licensee rather than that which is granted. It

does not, in terms, proscribe the performance by the parties of their obligations under the relationship created by the grant. [44] The club, in pressing for a more expansive view of the scope of the proscription in s 92(1)(d), in which the rights of the parties to the lease are sterilised, did not shrink from the unattractive result that, on this view, contractual arrangements freely entered [page 193] into by a licensee would be automatically sterilised, at the licensee’s instigation, but the licensee’s reliance on its own breach of the statute to the detriment of the lessee. [45] As a matter of a legislative construction, the likelihood of adverse consequences for the “innocent party” to a bargain has been recognised as a consideration which tends against the attribution of an intention to avoid the bargain to the legislature; Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1 at [46]. That consideration is consistent with the general disinclination on the of the courts to allow a party to a contract to take advantage of its own wrongdoing: New Zealand Shipping Co v Societe des Ateliers et Chantiers de Franc [1919] AC 1 at 8 and 9; Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 188–9; Alghussein Establishment v Eton College [1988] 1 WLR 587 at 595; [1991] 1 All ER 267 at 274. There may be cases where the legislation which creates the illegality is sufficiently clear as to overcome that disinclination; but it is hardly surprising that the courts are not astute to ascribe such an intention to the legislature where it is not made manifest by the statutory language: Orr v Ford (1989) 167 CLR 316 at 323, 326–7 and 333–4; 84 ALR 146 at 147, 149–50 and 154–5. And in the present circumstances, this unattractive aspect of the club’s argument is compounded by the circumstances that, as its counsel acknowledged, the club was obliged to take steps to seek the approval of the authority for the grant of the lease and did not do so; Mackay v Dick (1881) 6 App Cas 251 at 263; Secured Income Real Estate

(Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 605-6; 26 ALR 567 at 575-6; Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; 88 ALJR 814; 312 ALR 356; [2014] HCA 32 at [25]. See also Croft, Hay and Virgona, Retail Leases Victoria, [210,005] and [210,025].

Frustration [6.10] In National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 the House of Lords had the opportunity to consider whether the doctrine of frustration applied to leases. The facts raised the issue squarely. The appellants leased a commercial warehouse for a period of 10 years at an annual rent, reviewable after five years. The landlord’s covenants included an express covenant for quiet enjoyment. The lease also contained special provisions under which the obligation to pay rent was suspended and the lease terminable at the option of the landlord in the event of destruction by fire. There were also provisions for re-entry by the landlord for breach of covenant, or on six months’ notice if required for the purposes of British Railways (with whom the respondents were associated). Unfortunately for the appellant lessee a Victorian period warehouse which stood beside the only access to the leased warehouse became both dangerous and derelict and for safety reasons the City Council closed this access, apparently to both vehicles and pedestrians, pending demolition of the Victorian warehouse. The leased warehouse was thereby rendered totally useless as a commercial warehouse, the one use for which it was fitted and the sole purpose for which, under the terms of the lease, it could be used. The lessee’s problems did not end there, as the Victorian period warehouse [page 194] had become a ‘listed building’ under national heritage conservation legislation with the result that it could not be demolished without permission from the

Secretary of State for the Environment. Local objections meant that consent could not be granted without a public local inquiry. Even assuming an ultimately favourable result, the process was likely to last in excess of a year. Shortly after the street was closed the lessee stopped paying rent. It defended the landlord’s claim solely on the basis that the lease had become frustrated and was at an end. The question remained open as although the Court of Appeal had decreed that the doctrine of frustration was not available to determine a lease in Leighton’s Investment Trust Ltd v Cricklewood Property and Investment Trust Ltd [1943] AC 221 the appeal to the House of Lords produced evenly divided opinion on the issue, and a clear statement of the arguments for and against the application of the doctrine to leases. Lord Wilberforce considered these arguments in National Carriers and was persuaded that the doctrine should apply to leases, a view that was shared by the majority on the basis of substantially the same reasoning ([1981] AC 675 at 693–7): 1.

2.

The doctrine of frustration of contracts made its appearance in English law in answer to the proposition, which since Paradine v Jane (1647) Aleyn 26, [1558–1774] All ER Rep 172 had held the field, that an obligation expressed in absolute and unqualified terms, such as an obligation to pay rent, had to be performed and could not be excused by supervening circumstances. Since Taylor v Caldwell (1863) 3 B & S 826, [1861–73] All ER Rep 24 it has been applied generally over the whole field of contract. Various theories have been expressed as to its justification in law: as a device by which the rules as to absolute contracts are reconciled with a special exception which justice demands, as an implied term, as a matter of construction of the contract, as related to removal of the foundation of the contract, as a total failure of consideration. It is not necessary to attempt selection of any one of these as the true basis; my own view would be that they shade into one another and that a choice between them is a choice of what is most appropriate to the particular contract under consideration. One could see, in relation to the present contract, that it could provisionally be said to be appropriate to refer to an implied term, in view of the grant of the right of way,

3.

or to removal of the foundation of the contract, viz use as a warehouse. In any event, the doctrine can now be stated generally as part of the law of contract; as all judicially evolved doctrines it is, and ought to be, flexible and capable of new applications. In view of this generality, the onus, in my opinion, lies on those who assert that the doctrine can never apply to leases. They have at once to face the argument that it has been held to apply to demise charters of ships (and presumably by analogy could apply to hirings of other chattels) and to licences for use (see Krell v Henry [1903] 2 KB 740; [1900–3] All ER Rep 20 and other Coronation cases). So why not to leases of land? To place leases of land beyond a firm line of exclusion seems to involve anomalies, to invite fine distinctions, or at least to produce perplexities. [page 195]

4.

How, for example, is one to deal with agreements for leases? Refusal ever to apply the doctrine to leases of land must be based on some firm legal principle which cannot be departed from (compare art 62 of the Vienna Convention on the Law of Treaties (1969) (Cmnd 4818) which excludes boundary disputes from the analogous doctrine in international law). Two arguments only by way of principle have been suggested. The first is that a lease is more than a contract: it conveys an estate in land. This must be linked to the fact that the English law of frustration, unlike its continental counterparts, requires, when it applies, not merely adjustment of the contract, but its termination. But this argument, by itself, is incomplete as a justification for denying that frustration is possible. The argument must continue by a proposition that an estate in land once granted cannot be divested, which, as Viscount Simon LC pointed out, begs the whole question.

It was pointed out, however, by Atkin LJ in Matthey v Curling [1922] 2 AC 180 at 199–200, in a passage later approved by Viscount Simon LC, that as a lease can be determined, according to its terms, on the happening of certain specified events, there is nothing illogical in implying a term that it should be determined on the happening of other events, namely, those which in an ordinary contract work a frustration. It has indeed been held, with reference to an agreement for a lease, that this can be put an end to through implication of a term (see Rom Securities Ltd v Rogers (Holdings) Ltd (1967) 205 Estates Gazette 427 per Goff J). So why, in the present case, for example, should an actual lease not be determinable by implication of a term? If so, it could hardly be suggested that a lease was not capable of frustration even though the theory of frustration had shifted to another basis. In the second place, if the argument is to have any reality, it must be possible to say that frustration of leases cannot occur because in any event the tenant will have that which he or she bargained for, namely, the leasehold estate. Certainly this may be so in many cases, let us say most cases. Examples are London and Northern Estates Co v Schlesinger [1916] 1 KB 20, [1914–15] All ER Rep 593, where what was frustrated (viz the right of personal occupation) was not at the root of the contract, and requisitioning cases, eg Whitehall Court Ltd v Ettlinger [1920] 1 KB 680, [1918– 19] All ER Rep 229, where again the tenant was left with something he could use. But there may also be cases where this is not so. A person may desire possession and use of land or buildings for, and only for, some purpose in view and mutually contemplated. Why is it an answer, when he or she claims that this purpose is ‘frustrated’ to say that he or she has an estate if that estate is unusable and unsaleable? In such a case the lease, or the conferring of an estate, is a subsidiary means to an end, not an aim or end of itself. This possible situation is figured, in fact, by Viscount Simon LC in the Cricklewood case. The second argument of principle is that on a lease the risk passes to the lessee, as on a sale it passes to the purchaser (see per Lord

Goddard in the Cricklewood case). But the two situations are not parallel. Whether the risk, or any risk, passes to the lessee depends on the terms of the lease; it is not uncommon, indeed, for some risks (of fire or destruction) to be specifically allocated. So in the case of unspecified risks, [page 196]

5.

which may be thought to have been mutually contemplated, or capable of being contemplated by reasonable people, why should not the court decide on whom the risks are to lie? And if it can do this and find that a particular risk falls on the lessor, the consequence may follow that on the risk eventuating the lessee is released from his or her obligation. To provide examples, as of a 999-year year lease during which a frustrating event occurs, or of those in decided cases (see above), to show that in such cases frustration will not occur is insufficient as argument. These examples may be correct; they may cover most, at least most normal, cases. But the proposition is that there can be no case outside them and that I am unable to accept. I find the experience in the United States of America instructive. It is clear that in the common law jurisdictions of that country, the doctrine of frustration has developed and is still developing. It has been applied, inter alia, in connection with Prohibition and leases of liquor saloons, to leases. Yet neither of the well-known commentators, Williston or Corbin, sees any doctrinal objection to this. I quote one passage from Corbin on Contracts, 1951, vol 6, para 1356): In modern cases, there has been a tendency to treat a lease as a contract instead of a conveyance, although in fact it is both at once. The older allocation of risks does not now always seem just. Many short-term leases have been made, in which the purpose of the lessee was to conduct a liquor

saloon, a purpose known to the lessor and one which gave to the premises a large part of its rental value. There followed the enactment of a … prohibitory law preventing the use of the premises for the expected purpose. The prohibition law does not make it impossible or illegal for the lessee to keep his promise to pay the rent … but it frustrates his purpose of using the premises for a liquor salon in the reasonable hope of pecuniary profit. If the terms of the lease are such that the lessee is restricted to this one use, it has been held in a considerable number of cases that his duty to pay rent is discharged. Williston is to a similar effect, where it is pointed out that termination of a lease by frustration is more difficult to establish than termination of a mere contract (Contracts, 3rd ed, 1978, para 1955). There is a similar indication in Canada. In Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710 the Supreme Court had to consider the extent to which the contractual doctrine of wrongful repudiation could be applied to a lease, the argument being that the landlord was limited to remedies given by the law of property. In an instructive judgment Laskin J said (at 721): It is no longer sensible to pretend that a commercial lease, such as the one before this Court, is simply a conveyance and not also a contract. It is equally untenable to persist in denying resort to the full armoury of remedies ordinarily available to redress repudiation of covenants, merely because the covenants may be associated with an estate in land. So, here is a route opened by common law jurisdictions, by which the result of frustration of leases may be attained. This may be wide, or narrow, or indeed very

[page 197]

6.

narrow, that we need not decide in advance. But it would be wrong to erect a total barrier inscribed ‘You shall not pass’. I can deal briefly with the authorities: they are one way (against application of the doctrine), they are partial. They decide that particular sets of facts do not amount to frustrating events. A judgment often quoted is that of Lush J in Schlesinger’s case [1916] 1 KB 20, [1914–15] All ER Rep 593 where a lessee was unable to occupy the rented premises because he was an alien enemy. Lush J said ([1916] 1 KB 20 at 24: cf [1914–15] All ER Rep 593 at 595): As the contract could be performed without his personal residence, the fact that his personal residence was prohibited by the Order did not make the performance of the contract impossible. But there is, I think, a further answer to the contention. It is not correct to speak of this tenancy agreement as a contract and nothing more. A term of years was created by it and vested in the appellant, and I can see no reason for saying that because this Order disqualified him from personally residing in the flat it affected the chattel interest which was vested in him by virtue of the agreement. There is nothing to disagree with here, the argument may indeed be valid in many or most cases of leases. It is not expressed as one which must apply to all. The reasoning of this House in Matthey v Curling [1922] 2 AC 180, [1922] All ER Rep 1 is not ‘clear’ or any authority that the doctrine of frustration does not apply to a lease (see per Lord Wright in the Cricklewood case [1945] AC 221 at 230; 1 All ER 252 at 256). It was not until the Cricklewood case that the argument was put on principle and fully explored. The governing decision (of the Court of Appeal) was summary, unargued and based on previous cases which will not bear the weight of a

generalisation. I think that the movement of the law of contract is away from a rigid theory of autonomy towards the discovery, or I do not hesitate to say imposition, by the courts of just solutions, which can be ascribed to reasonable men in the position of the parties. It is said that to admit the possibility of frustration of leases will lead to increased litigation. Be it so, if that is the route to justice. But, even if the principle is admitted, hopeless claims can always be stopped at an early stage, if the facts manifestly cannot support a case of frustration. The present may be an example. In my opinion, therefore, though such cases be rare, the doctrine of frustration is capable of application to leases of land. It must be so applied with proper regard to the fact that a lease, ie a grant of a legal estate, is involved. The court must consider whether any term is to be implied which would determine the lease in the event which has happened and/or ascertain the foundation of the agreement and decide whether this still exists in the light of the terms of the lease, the surrounding circumstances and any special rules which apply to leases or to the particular lease in question. If the ‘frustrating event’ occurs during the currency of the lease it will be appropriate to consider the Law Reform (Frustrated Contracts) Act 1943. On the facts of the case it was held that, although the appellant’s business would be severely dislocated, the events did not approach the gravity of a frustrating event. This [page 198] serves to emphasise a point made very strongly by their Lordships, that the cases in which a lease will be held to have been frustrated will be rare. It follows that longer term ‘speculations and investments’ are generally less easily frustrated than short-term leases, an extreme example being a 999-year lease: see Lord Hailsham LC at [1981] AC 691.

Consideration was given to the basis and nature of the doctrine, or principle, of frustration in Graves v Graves [2007] EWCA Civ 660; [2008] HLR 10 at [33]–[39] (Thomas LJ, with whom Hughes and Coleridge LJJ agreed). In particular, Thomas LJ commented: [37] It is helpful to refer in a little more detail to the judgment of Vaughan Williams LJ in Krell v Henry [[1903] 2 KB 740], the case arising out of the postponement of the coronation of King Edward VII, at p 749 where he said of the principle of frustration: I do not think that the principle of the civil law as introduced into the English law is limited to cases in which the event causing the impossibility of performance is the destruction or non-existence of some thing which is the subject matter of the contract or of some condition or state of things expressly specified as a condition of it. I think that you first have to ascertain, not necessarily from the terms of the contract, but, if required, from necessary inferences, drawn from surrounding circumstances recognised by both contracting parties, what is the substance of the contract, and then to ask the question whether that substantial contract needs for its foundation the assumption of the existence of a particular state of things. If it does, this will limit the operation of the general words, and in such a case, if the contract becomes impossible of performance by reason of the non-existence of the state of things assumed by both contracting parties as the foundation of the contract, there will be no breach of the contract thus limited. Although the National Carriers decision indicates that the English courts will ‘hardly ever’ find that a lease has been frustrated (see Lord Hailsham LC at [1981] AC 692) it does also indicate that these courts are now more concerned with commercial realities and will not be constrained by doctrines of real property that had their reason and relevance in a quite different historic and economic environment. The same view or approach has been adopted in Australia following a number of decisions on the application of the doctrine of repudiation to leases. This is particularly evident in the decision of the High Court in Progressive Mailing House Pty Ltd v Tabali (1985) 157 CLR 17 in

which the National Carriers decision was referred to with approval in relation to the application of the general view or approach that it is no longer sensible to treat a commercial lease as simply a conveyance and not also a contract: see Mason J at 28 (with whom Wilson and Dawson JJ agreed in substance) and Deane J at 52–3, although Brennan J expressly declined to consider the doctrine of frustration, see at 42. Brennan J, in Progressive Mailing House, distinguished discharge of a contract by frustration and discharge by repudiation on the basis that (at 157 CLR 42): An implied term that a lease should determine on the happening of a frustrating event is in the nature of a limitation. An implied term that a lessor should have an election to determine if the lessee should repudiate is in the nature of a condition. [page 199] This is a very convenient way of reconciling the dual nature of leases (see also Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 123 and Ripka Pty Ltd v Maggiore Bakeries Pty Ltd [1984] VR 629). In resolving whether the doctrines of frustration and repudiation are applicable to leases, the courts have really been asking a wider question: how far is contractual doctrine generally applicable to leases? Lord Roskill, in the National Carriers case (at [1981] AC 713 and 717–18), indicated very strongly that compartmentalisation of the law is likely to lead to anomalous and arbitrary results. The same view is clear in the views of the other members of the House of Lords in the majority, and in the High Court decisions in Shevill v Builders Licensing Board (1982) 149 CLR 620 and the Progressive Mailing case (see, particularly, Deane J at 157 CLR 53 in the latter case). In Maori Trustee v Prentice [1992] 3 NZLR 344 it was accepted that the doctrine of frustration applied to leases but it was held that a substantial rent increase did not constitute a frustrating event. For earlier Australian cases with respect to the application of the doctrine of frustration to leases, see Firth v Halloran (1926) 38 CLR 261; Re Equity Trustees Executors & Agency Co Ltd [1932] VLR 137; Scanlan’s New Neon Ltd v Tooheys

Ltd (1943) 67 CLR 169; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 302; [1944] ALR 89 (per Williams J); Shiell v Symons [1951] SASR 82; Robertson v Wilson (1958) 75 WN (NSW) 503; Thearle v Kelley (1958) 76 WN (NSW) 48; Frieze v Unger [1960] VR 230 at 241; Lobb v Vasey Housing Auxiliary (War Widows Guild) [1963] VR 239 at 246–7; and see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 where the formulation of the doctrine of frustration by Viscount Simon in National Carriers was adopted. The weight of this Australian authority is, nevertheless, against the application of the doctrine of frustration to leases. However, given the trend in the authorities of applying contractual doctrines to leases (see, particularly, Progressive Mailing House, and the authorities referred to in [16.26]) it is thought that the High Court will ultimately follow National Carriers and apply the doctrine of frustration to leases. See also Effron, ‘The Contractualisation of the Law of Leasehold: Pitfalls and Opportunities’ (1988) 14 Mon VL Rev 83; Cockburn, ‘Frustration of Commercial Leases’ (1993) Qld Lawyer 195; and see O’Hara, ‘The Frustrated Tenant — Towards a Just Solution’ (1994) 2 APLJ 1. Cockburn’s article contains a useful discussion of relevant considerations in determining whether a lease is frustrated (pp 206– 11). In the meantime there are a number of more recent Australian decisions which have either applied the doctrine to leases or indicated that it is applicable, but is not attracted in the particular circumstances. If any ‘golden thread’ can be extracted from these cases it is probably the same that runs through the speeches in the House of Lords in the National Carriers case — ‘hardly ever’! Turning now to the more recent Australian cases, a convenient place to start is City of Subiaco v Heytesbury Properties Pty Ltd (2001) WAR 146 (FC). In this case [page 200] the leases were very long-term leases by Australian standards, four 99-year leases. A significant part of their remaining terms had been purchased by Heytesbury with the intention of developing the land commercially. In the meantime Heytesbury continued to sub-lease the land to Humes Ltd, from

which Heytesbury had purchased its interest in the leases, which carried on a concrete pipe manufacturing business. This type of business was within one of the permitted uses under the leases. In fact the leases imposed an obligation to carry on manufacturing on the leased premises, an obligation which Heytesbury had requested the City, as landlord, to waive; but this request had been refused. The permitted use under the leases had been varied, in 1984, to permit the warehousing, wholesaling or retailing of goods manufactured on the premises — or in certain other, specified, circumstances, but provided the use did not contravene the provisions of the town planning scheme in force from time to time. In 1993 the relevant planning scheme was amended to prohibit manufacturing on the leased land. An application by Heytesbury for a permit to conduct a concrete pipe manufacturing business was refused in 1993 but it continued to treat the leases as subsisting. This situation continued until 1996 when Heytesbury sold its interest in the leases to the Subiaco Development Authority for $2.5 million. The rights of the parties were preserved under the agreement assigning Heytesbury’s interest and in this context one of the issues it raised in proceedings against the City was frustration. In relation to the issue of frustration, Ipp J (with whom Malcolm CJ and Wallwork J agreed) reviewed the authorities in relation to the basis of the law of frustration in relation to contracts generally and then considered its application to leases (see at (2001) WAR 163–5). In relation to the basis of the doctrine of frustration generally, Ipp J said (at 163–4): [66] The law relating to frustration of contracts was discussed by Stephen J in Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143 at 162–163 in the following terms: It is no doubt true, as critics complain, that the various expositions of the true basis of the doctrine of frustration leave imprecise its actual operation when applied to the facts of particular cases. How dramatic must be the impact of an allegedly frustrating event? To what degree or extent must such an event overturn expectations, or affect the foundation upon which the parties have contracted, or, again, how unjust and unreasonable a result must flow or how radically different from that originally undertaken must a contract become (to use the language of some of the various expositions), before it is to be

regarded as frustrated? The cases provide little more than single instances of solutions to these questions. These differences of application of the doctrine of frustration were keenly appreciated by both Latham CJ and by Williams J in their consideration of the doctrine in Scanlan’s New Neon Ltd v Toohey’s Ltd (1943) 67 CLR 169. They are, perhaps, inevitable in questions of degree arising when a broad principle must be applied to infinitely variable factual situations. [67] In Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 357, Mason J, in effect, adopted these remarks, saying: [page 201] I agree with Stephen J’s acceptance [in Brisbane City Council v Group Projects Pty Ltd] of the approach adopted by Lord Reid and Lord Radcliffe in Davis Contractors [1956] AC 696. Lord Reid said that the task of the court is to determine ‘on the true construction of the terms which are in the contract read in light of the nature of the contract and of the surrounding circumstances’, ‘whether the contract which they did make is … wide enough to apply to the new situation: if it is not, then it is at an end’ (at 720–721). Later he described frustration as ‘the termination of the contract by operation of law on the emergence of a fundamentally different situation’ (at 723). Lord Radcliffe (at 729) said: … frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract … It was not this that I promised to do.

His Lordship, noting that special importance attaches to an unexpected event, observed ‘There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for.’ In relation to leases, particularly, Ipp J continued (at 164–5): [68] The cases in which the doctrine of frustration could properly be applied to leases are extremely rare (National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 at 688–689 per Lord Hailsham). One reason for the rarity is that a lease is more than a contract, it conveys an estate in land. Thus, in many instances, frustration of leases will not occur because the tenant will still have that which he or she bargained for, namely, the leasehold estate — particularly when it has considerable value. In that event, the tenant would be ‘left with something he could use’ (per Lord Wilberforce in National Carriers Ltd v Panalpina (Northern) Ltd at 694). Of course, that would not be so when the estate is ‘unusable and unsaleable’ (per Lord Wilberforce at 695). [69] An example of the tenant being ‘left with something he could use’ is London & Northern Estates Co v Schlesinger [1916] 1 KB 20. By a wartime order in council, an Austrian subject, who was an ‘alien enemy’, was prohibited from residing within certain specified areas, including the area where the leased premises were situated. Although he could not personally exercise a right of personal occupation, he could sub-let the premises and therefore there was no frustration. [70] Another example is Whitehall Court Ltd v Ettlinger [1920] 1 KB 680, where a tenant was forced to give up possession of leased premises by authorities acting under wartime regulations. As there was a requisition of the premises only for ‘the time being’ and as the tenant still had the leasehold interest in the property (which was a benefit to him), there was no frustration. [71] In determining whether a frustrating event has occurred, regard may be had to all relevant circumstances. The evidence in question is not admitted so as to construe the contract and the parol evidence rule

has no relevance. The purpose of the evidence is simply to show the change in obligations and that the contract cannot be performed in the way contemplated by the parties. Thus, in Brisbane City Council v Group Projects [page 202] Pty Ltd the economic and other consequences of the relevant event were examined. In Finch v Sayers [1976] 2 NSWLR 540, a case where it was said that a contract of employment had been frustrated, Wootten J took into account the nature of the illness of the employee, the prospects of recovery and other relevant matters. In Bank Line Ltd v Arthur Capel Co [1919] AC 435 at 454, Lord Sumner said, ‘What happens [after the frustrating event] may assist in showing what the probabilities really were, if they had been reasonably forecasted …’ It has been said that what the parties say and do about the event said to cause the frustration ‘is only evidence, and not necessarily weighty evidence, of the view to be taken of the event by informed and experienced minds’: Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497 at 509. Ipp J also referred to other factors that were important in the particular circumstances: see at 165. These included the fact that: the leased land was useable and saleable and was regarded as being critical to the redevelopment of the area and in which Heytesbury wished to participate, the evidence of this being the actual sale of the leases to the development Authority; when the planning scheme was amended Heytesbury had no intention or desire to manufacture at the leased premises; and, finally, the treatment, by Heytesbury, of the leases as ‘fully operative’ for three years after the town planning amendment. The latter was said to be fatal to the frustration claim: see Ipp J at 165, [75]. And see Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd (2010) 14 BPR 27,605, where Barrett J expressed the view that the question of whether the doctrine of frustration applied to leases had not been the subject of ‘seriously considered dicta of a majority’ of the High Court (adopting the description made relevant by Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230

CLR 89 at [134]) and that, in light of the decision in Heytesbury Properties, ‘it cannot be said today, as an abstract proposition, that the doctrine of frustration has no application to leases, in the sense that a lease can in no circumstances whatsoever be discharged by frustration’: at [220]. There are some cases in England, Scotland and Australia where leases have been avoided successfully on the basis that a frustrating event had occurred. In England and Scotland, see Taylor v Caldwell (1863) 3 B & S 826; 122 ER 309 (where, absent negligence by the tenant, the building or structure the subject of a short-term lease was destroyed totally); Krell v Henry [1903] 2 KB 740 (where the purpose of the leases was to enable the tenant to view the coronation procession of Edward VIII, which was cancelled); Denny Mott & Dickson v James B Fraser [1944] AC 265 (where wartime restrictions prevented performance of a supply contract integral to the subject matter of an agreement for lease); Tay Salmon Fisheries v Speedie [1929] SC 593 (where a bombing range was constructed near a salmon fishery in Scotland which was, consequently, rendered unusable); and see Woodfall’s Landlord and Tenant, para 17.282. In Crickelwood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd [1945] AC 221, Lord Simon LC was not prepared to deny the possibility of frustration: ‘if, for example, some vast convulsion of nature swallowed up the property altogether, or buried it in the depths of the sea’: at 229. In Australia, see Robertson v Wilson (1958) 75 WN (NSW) 503 and Sheill v Symonds [1951] SASR 82 (FC) at 88 (per Ligertwood J; [page 203] with whom Napier CJ and Abbott J agreed on the frustration point) (premises rendered unusable or inaccessible as a result of the operation of an act or regulation); and see Liberty Investments Pty Ltd v Sakatik Pty Ltd (CA(NSW), 30 August 1996, unreported) (accepting the possibility that a court may properly find that a lease had been frustrated, but concerned principally with procedural issues on appeal); and Re Brickworks Markets Pty Ltd (1997) 74 FCR 165 (FCA) at 182, where Mansfield J appeared to accept the general possibility of the doctrine of frustration applying to leases, commenting that an increased burden to pay rates and taxes would not necessarily amount to frustration and,

further, raising a possibly significant issue (which it was not necessary for him to consider) in relation to whether a lease registered under the Torrens legislation can be frustrated by a supervening event, referring to Firth v Halloran (1926) 38 CLR 261; National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675; and Shevill v Builders Licensing Board (1981–82) 149 CLR 620). For a collection of cases in England and Australia where a claim that the lease has been frustrated has failed, in addition to the cases referred to above, see Woodfall’s Landlord and Tenant, para 17.282, and Redfern and Cassidy, Australian Tenancy Practice and Precedents (LexisNexis Butterworths, looseleaf), [17 450] and [17 455]. There is some authority to support the view that ‘partial frustration’ may be a possibility where it is temporarily impossible to perform a particular covenant or covenants, rather than the lease as a whole. It has been suggested that the result would be to suspend any obligation to perform the affected covenant or covenants during the temporary impossibility of performance: see Leighton’s Investment Trust Ltd v Cricklewood Property and Investment Trust Ltd [1943] AC 221 at 233 (per Lord Russell); and see Woodfall’s Landlord and Tenant, para 17.283. Authorities in the United Kingdom, the United States, Canada and Australia are considered in the context of a discussion of the doctrine, theory and policy issues in relation to frustration and leases in O’Hara, ‘The Frustrated Tenant — Towards a Just Solution’, (1994) 2 APLJ 1. The application of the doctrine of frustration to leases may, of course, be provided for by making express provision as to the rights of the parties on the occurrence of a ‘frustrating event’ or ‘events’ (as far as any can be anticipated): see City of Subiaco v Heytesbury Properties Pty Ltd (2001) WAR 146 (FC) at 163, [65] (per Ipp J, referring with apparent approval to the judgment of White J at first instance). In this respect regard should be had to the statutory provisions implying or providing for the adoption of lease covenants: see [7.1]; see also some drafting suggestions in Cockburn at 13 Qld Lawyer 213–16. The consequence of a finding of frustration of a contract is to discharge obligations in futuro, and not to produce something in the nature of rescission

ab initio; but the occurrence of a frustrating event does not produce a right to damages, though it does [page 204] not affect a cause of action in damages which has already accrued, and, as a general law, contract terms cannot be enforced once frustration has occurred: see Carter, Contract Law in Australia (6th ed), [34-02]–[34-05] and following; and see Greig and Davis, p 1331 and following; and see Conveyancing Service NSW (LexisNexis Butterworths, looseleaf) [13640] where, referring to Minister for the Army v Dalziel (1944) 68 CLR 261 at 302 (per Williams J) it is said that the effect of frustration is to bring the contract to an end, a position seemingly unaffected by the Frustrated Contracts Act 1978 (NSW).

Collateral warranty [6.11] It often happens that someone is induced to take a lease or enter into some other agreement by a representation made by or on behalf of the other party to the transaction, the lease or other agreement containing no provision concerning the matter in question. Sometimes the party so induced is able to establish fraud and the other elements necessary to found an action for damages for deceit. At other times it is possible to establish that the statement made was not a mere representation, but constituted a warranty in law, being a warranty collateral to the lease. Such a case was De Lassalle v Guildford [1901] 2 KB 215; [1900–03] All ER Rep 495, where the plaintiff, who was negotiating to take a lease from the defendant, refused to hand over the counterpart until he received a verbal assurance from the defendant that the drains of the house were in order. The drains were not in order and the plaintiff suffered loss in consequence. The Court of Appeal held that the plaintiff was entitled to recover, saying, at KB 221–2: Now what constitutes a warranty in law, or a mere representation? To create a warranty no special form of words is necessary. It must be a collateral undertaking forming part of the contract by agreement of the

parties express or implied, and must be given during the course of the dealing which leads to the bargain, and should then enter into the bargain as part of it. It was laid down by Buller J as long ago as 1789 in Pasley v Freeman (1789) 3 TR 51; 1 RR 634; [1775–1802] All ER Rep 31: ‘It was rightly held by Holt CJ’ in Crosse v Gardner [1688] Carth 90 sub nom Cross v Garnet [1688] 3 Mod 261 and Medina v Stoughton [1699] Salk 210; 1 Ld Raym 593: ‘and has been uniformly adopted ever since, that an affirmation at the time of sale is a warranty provided it appear on evidence to have been so intended’. In determining whether it was so intended, a decisive test is whether the vendor assumes to assert a fact of which the buyer is ignorant, or merely states an opinion or judgment upon a matter of which the vendor has no special knowledge, and on which the buyer may be expected also to have an opinion and to exercise his judgment. In the former case it is a warranty, in the latter not; see Benjamin on Sales, 3rd ed, p 607, whose statement upon the law, in my judgment, is accurate. That the above constitutes a warranty upon the sale of a chattel cannot be doubted, and why not upon the sale of real property, or upon the granting and taking of a lease if it be collateral? I know of no authority which shows, nor do I see any principle upon which it should be held, that, the like conditions existing, such an affirmation does not constitute a warranty upon, as in this case, the granting of a [page 205] lease. Now in the present case, did the defendant assume to assert a fact, or merely to state an opinion or judgment upon a matter of which he had no special knowledge, and upon which the plaintiff’s wife, on behalf of her husband, might be expected also to have an opinion? What is it the defendant asserts? I paraphrase the evidence: ‘You need have no certificate of a sanitary inspector — it is quite unnecessary; the drains are in perfect condition. I give you my word upon the subject. Will that satisfy you? If so, hand me over the counterpart.’ What more deliberate and emphatic assertion of a fact

could well be made during the course of the dealing which led up to the counterpart lease being handed over to the defendant? That the question asked and the answer given were seriously intended, to use the words of Wills J in Best v Edwards (1895) 60 JP 9, to be the basis of the contractual relation between the parties, I cannot doubt. There is the evidence that the plaintiff would not take the lease unless the drains were guaranteed, and surely the statements made by the defendant were not made on the assumption that they were to be of no avail to the plaintiff except they were made fraudulently. In my judgment everything necessary to establish a warranty has in this case been proved. The next question is, was the warranty collateral to the lease so that it might be given in evidence and given effect to? It appears to me in this case clear that the lease did not cover the whole ground, and that it did not contain the whole of the contract between the parties. The lease is entirely silent about the drains, though there is a covenant that the lessee during the term should do the inside repairs, and the lessor the outside repairs, which would, I suppose, include the drains which happened to be inside or outside the house. There is nothing in the lease as to the then condition of the drains ie at the time of the taking of the lease, which was the vital point in hand. Then why is not the warranty collateral to anything which is to be found in the lease? The present contract or warranty by the defendant was entirely independent of what was to happen during the tenancy. It was what induced the tenancy, and it in no way affected the terms of the tenancy during the three years, which was all the lease dealt with. The warranty in no way contradicts the lease, and without the warranty the lease never would have been executed … Another example of a collateral agreement not inconsistent with the main contract is Clement v Morris [1922] VLR 189. Difficulty may be experienced, however, in satisfying the court that a verbal statement which preceded the making of the written lease amounted to a warranty: Heilbut Symons & Co v Buckleton [1913] AC 30; [1911–13] All ER Rep 83; Cutts v Buckley (1933) 49 CLR 189. The only conclusion which will support a collateral warranty is that the statement relied on was promissory and not merely representational: J J

Savage & Sons Pty Ltd v Blakney (1971) 119 CLR 435; [1971] ALR 92. Moreover, a party may not set up a collateral agreement which conflicts with the main agreement: see Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133; and Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507; and see Carter, Contract Law in Australia (6th ed), [10-13]–[10-14]; and Greig and Davis, p 504 and following.

[page 207]

7 Covenants Introductory [7.1] A covenant is a promise under seal (Randall v Lynch (1810) 12 East 179) that something shall or shall not be done or that a certain state of facts exist. Although the expression is in strictness confined to promises under seal, it is nowadays commonly used also in referring to promises contained in leases that are not under seal. Covenants are either express or implied. The former are those which are made by express stipulation, including covenants which are as a matter of construction to be derived from words used which do not amount in terms to a covenant to the effect alleged: O’Keefe v Williams (1910) 11 CLR 171 at 220, although covenants inferred as a matter of construction are sometimes classified as implied. Implied covenants are considered in Chapter 8. No special form of words is necessary to create a covenant. The words ‘yielding and paying’ or ‘rendering’ give rise to a covenant to pay the rent: Giles v Hooper (1690) Carth 135; 90 ER 683. Where the lease recited an agreement that a building should be erected and contained express covenants to maintain and leave in repair, a covenant to erect the building was clearly enough intended: Sampson v Easterby (1829) 9 B & C 505 affirmed (1830) 6 Bing 644. A covenant by one party may be so expressed as to show that the other party is also engaging to do something; for example, a covenant by the lessee to do certain repairs, the buildings ‘being previously put in repair and kept in repair by’ the lessor, was regarded as containing a covenant on the part of the lessor to put the premises into repair: Cannock v Jones (1849) 3 Ex 233.

A scheme of development, with its regime of covenants, may exist over leasehold land: Cousin v Grant (1991) 103 FLR 236 (SC(ACT)). Covenants are also implied by statute, usually in the sense that the lease is deemed to include specified covenants, which may be varied by express agreement. In New South Wales the covenants implied by the Conveyancing Act 1919 apply to both Torrens and general law land: see ss 74, 84 and 85; see also Watts (1936) 10 ALJ 357–9. [page 208] The position is similar in Queensland: see Property Law Act 1974 ss 105–108. In other states covenants are only implied in leases under Torrens legislation: see Real Property Act 1886 (SA) ss 124, 125, 262; Land Titles Act 1980 (Tas) ss 57, 66, 67; Transfer of Land Act 1958 (Vic) ss 67, 112; Transfer of Land Act 1893 (WA) ss 92, 93, 131. Provision is also made in some legislation for short form covenants which if used are to be read as including a full, long form, covenant as set out in the relevant Act: see Conveyancing Act 1919 (NSW) s 86, Sch IV; Property Law Act 1974 (Qld) s 109, Third Sch.

Construction [7.2] Covenants must be construed with reference to the lease as a whole: Iggulden v May (1806) 7 East 237. Regard may be had to surrounding circumstances: Downie v Lockwood [1965] VR 257; and see [6.3]. In construing a covenant which if broken entails a forfeiture the court will tend to resolve an ambiguity in favour of the lessee: Russell v Beecham [1924] 1 KB 525; Downie v Lockwood [1965] VR 257 at 264. It is also a rule of construction that the words of a covenant must be taken most strongly against the covenantor: Webb v Plummer (1819) 2 B & Ald 746; Doe d Abdy v Stevens (1832) 3 B & Ad 299. The contra proferentem rule also applies to leases: Love v Pears (1810) 104 ER 297 at 300; but compare some recent cases, Bennett v Suburban Centres Pty Ltd (1981) 2 BPR 9659 (covenant as to user), and Horowitz Holdings Pty Ltd v Plastic Reclaimers (Australia) Pty Ltd (1982) 2 BPR 9492 (covenant to insure,

and see [13.17]. Two rules of construction may have opposing tendencies in a given case. A well drawn lease granted to more than one person should make it clear whether the lessees’ covenants are joint or joint and several; in the interests of the lessor, the lessees should be made to covenant jointly and severally. If the lease does not make the nature of the liability clear, the death of one of the lessees may make it necessary to determine whether the covenants are joint covenants: Grimley v Permanent Trustee Co of NSW Ltd (1935) 35 SR (NSW) 384. Another question that may arise is whether one covenant is dependent upon another in the sense that the obligation to perform it is conditional upon the performance by the other party of his or her covenant. If the covenants are independent, the covenantor cannot allege that his or her obligation to perform his or her own covenant was conditional upon performance by the other party of the other covenant. If one covenant is dependent upon another, performance of that other covenant is a condition precedent to the obligation to perform. Covenants may be mutually dependent only in the sense that one of them is subject to a condition precedent that the other be performed. For an example of covenants held to be independent, see Roberts v Ghulam Nabie (1911) 13 WALR 156. Generally as to construction and implication of terms in leases, see [6.3]; and see [4.1], [4.2] and [4.8]. [page 209]

Solicitor’s duty [7.3] A solicitor who fails to explain to his or her client the effects of unusual covenants in a proposed lease may be found to have been negligent: Sykes v Midland Bank Executor and Trustee Co Ltd [1971] 1 QB 113; 87 LQR 10 (see Chapter 9 in relation to usual covenants); Bailey v Raymond Sullivan McGlashan [1997] ANZ ConvR 619 (NZHC) (failures in relation to registration of the lease and mortgagee’s consent); Ergopex Pty Ltd v Meerkin & Apel (1996) V ConvR ¶54-550 (advice concerning landlord’s entitlement to extend shopping centre); and Gilbert v Shanahan [1998] NZLR 528 (CA) (failure to advise shareholders as to their need for independent advice as

guarantors). A similar situation may prevail where the solicitor fails to carry out the relevant searches: G & K Ladenbau (UK) Ltd v Crawley & de Reya [1978] 1 WLR 266. As to a solicitor’s obligation to advise with respect to lease provisions, more generally, see Ergopax Pty Ltd v Meerkin and Appel (SC(Vic), Hedigan J, 12 December 1995, unreported). A covenant to pay legal costs (to the extent permitted by relevant retail leases legislation) may only be binding on the grant of the lease: see CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754.

Rent and lessor’s covenants [7.4] The covenant to pay rent is usually placed at the head of the tenant’s covenants. Under an express covenant to pay rent which fails to specify a place for payment the tenant is obliged to seek out the landlord and pay him, her or it: Harrison v Petkovic [1975] VR 79 at 83. As to the covenant to pay rent, see [11.3]. Occasionally the question arises, in an action on the covenant to pay rent, whether it is a defence that the landlord is in breach of his, her or its covenant to repair, bearing in mind that the general position is that a tenant is not excused from tendering rent on the proper day merely because the tenant has some offsetting claim against the landlord: see Ford v Centenary Investments Pty Ltd [1957] VR 288 at 292; referred to as authority for this position by Young J in Reid v Hipkiss (2001) 10 BPR 19,305 (at [16]); and see [11.3]. It would be possible to frame a covenant to pay rent in such a way as to make that covenant dependent upon the landlord’s covenant to repair. But while this is theoretically possible, in practice it will almost invariably be found that the covenant to pay rent has not been made dependent upon the landlord’s covenant to repair (or the premises being placed in or maintained in a state suitable for the tenant’s intended use), with the consequence that the lessee, when sued for rent, cannot contend that it was a condition precedent to his or her obligation to pay rent that the landlord should him or herself perform his, her or its covenant to repair: Hart v Rogers [1916] 1 KB 646 at 651; Taylor v Webb [1937] 2 KB 283 at 289–90; Chatfield v Elmstone Resthouse Ltd [1975] 2 NZLR 269 at 275; and see Yorkbrook Investments

[page 210] Ltd v Batten (1985) 18 HLR 35; [1985] 2 EGLR 100 (CA) where it was held that a covenant by the tenant to pay a maintenance contribution and a covenant by the landlord to provide hot water were independent covenants (cf R & J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232; BC200802616). Similarly, in Lymarn Holdings Pty Ltd v M and W Holdings Pty Ltd (SC(WA), Anderson J, 9 May 1996, unreported) it was held that in the absence of any repair obligations on the landlord the tenant was not entitled to withhold rent on the basis of alleged want of repair; the assumption seemingly underlying the judgment being that any landlord’s repair covenant and the rent covenant would, in any event, be independent covenants. It is also clear that the failure of the landlord to perform an obligation to repair does not entitle the tenant to quit the premises, so that the tenant will remain liable for rent notwithstanding that he, she or it departs: Surplice v Farnsworth (1844) 7 Man & G 576; 135 ER 232; Chatfield v Elmstone Resthouse Ltd at 275. In these cases the distinction is not always kept clear between the tenant’s not being entitled to quit the premises and that person not being able to contend that the covenant to pay rent was conditional upon the performance of the landlord’s repairing covenant. The authorities establish that the tenant may do neither of these things. They do not go so far, however, as to establish beyond argument the broad proposition that if a landlord is in breach of his, her or its covenant to repair, the tenant must still pay the rent, a proposition to be found in Chatfield v Elmstone Resthouse Ltd at 275. It is arguable that there are two senses in which the tenant need not pay the rent if the landlord has wrongfully failed to repair. In the first place, Woodfall’s Law of Landlord and Tenant, looseleaf, at [7.111] suggests that the tenant may himself, herself or itself do the repairs and deduct the expense from the rent (that is, common law abatement of rent: see Lee-Parker v Izzet [1971] 1 WLR 1688, and other authorities cited to make this position clear in Weir, ‘A Tenant’s Right of Set-off’ (1994) 68 ALJ 857 at 862. See also Connaught Restaurants Ltd v Indoor Leisure Ltd [1994] 1 WLR 501; and Electricity Supply Nominees Ltd v IAF Group plc [1993] 1 WLR 1059). In the second place, it is arguable that even though, the covenants being independent, the tenant is in breach of his, her or its covenant to pay rent, he, she or it may set off against

the landlord’s claim for rent the damages to which he, she or it is entitled for breach of the repairing covenant (and see Weir, above, at pp 860 and following). The law on the circumstances in which a claim for unliquidated damages may afford a set-off was not clear. The authorities were reviewed in Galambos v McIntyre (1974) 5 ACTR 10. It was then thought to be established that a tenant may not claim a set-off so as to defeat the landlord’s right to distress. According to Halsbury, 3rd ed, vol 34, p 406 (and see 13 Halsbury’s Laws, 4th ed, [284]–[286]; referred to in Eller v Grovecrest Investments Ltd [1995] QB 272 at 275 (CA)) in general no damage suffered by a tenant can be set off against his or her landlord’s claim for rent. The authorities cited in support of this wide proposition are thought not to support it: see Eller v Grovecrest Investments Ltd (and note the comments of Hoffman LJ at 850 that cases [page 211] now should be decided on principle and not on procedural distinctions of long ago). The view expressed in Halsbury, 3rd ed, vol 23, p 547 is that if the landlord brings an action for rent, the tenant has a right to set off any right or claim which he or she may have against the landlord, whether it sounds in damages or not. In Fong v Cilli (1968) 11 FLR 495 Blackburn J had to consider whether a claim for unliquidated damages for breach of an alleged contract afforded a set-off to a claim for rent. It might be said that the views expressed on the question of law were obiter dicta, since the defendant failed to show that he was entitled to damages. Blackburn J did express the opinion that the claim for damages would not have given rise to a set-off. In reaching this conclusion his Honour referred to the supposed special position of claims for rent, citing the passage in Halsbury, 3rd ed, vol 34, pp 406–7. In addition Blackburn J held that a claim sounding in unliquidated damages could not be relied on as a defence to a liquidated demand. As to the first point, when the decisions are examined, they are mostly found to be either cases of distress for rent or cases which are concerned, not with the question of set-off now under consideration, but with some other question, such as that of the alleged interdependence of covenants. Decisions given in the eighteenth and early

nineteenth centuries and dealing with the right to set-off must be read with caution having regard to modern developments in the field of equitable setoff: in Weigall v Waters (1795) 6 TR 488; 101 ER 663 an attempt to set off against a claim for rent a claim for unliquidated damages for breach of a covenant to repair failed. What was said on the question of the right of set-off was not essential to the decision, since the lease was regarded as not imposing on the landlord any obligation to repair. It should moreover be noted that Lord Kenyon CJ observed that perhaps a court of equity would give the tenant relief. Reference should also be made to Beasley v D’Arcy (1800) 2 Sch & Lef 403, where the tenant was entitled to redeem his lease upon payment of the rent due, and in ascertaining the amount of the rent a sum was deducted which was due to the tenant from the landlord for damage done in cutting timber. This decision was mentioned by Lord Cottenham LC in Rawson v Samuel (1841) 41 ER 451 at 458–9, where it was said that the equity against the landlord was that he ought not to recover possession of the farm for nonpayment of rent while he owed to the tenant a sum for damage to that same farm. Fong v Cilli was briefly discussed by Woodward J in Galambos v McIntyre. Woodward J described Blackburn J as having followed ‘a substantial line of authority peculiar to the particular topic’. It appears that most of the decisions cited in relation to set-offs against claims for rent were in fact either cases of distress (which were previously thought to stand in a special position) or not cases of set-off at all. By 1979 it could be suggested that, while the law might have been regarded as doubtful, the better view was that in appropriate circumstances a claim for unliquidated damages for breach of a covenant contained in a lease might be set off against a claim for rent: relying on British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137, which is now cited in Halsbury’s Laws, [245-4365] for the proposition [page 212] that ‘[a] lessee can set-off an unliquidated claim for damages for such breach against the liability to pay rent’. In British Anzani the plaintiffs agreed with the defendants to build and in due course lease to the defendants certain warehouses. The agreement

provided that the plaintiffs would at their own expense remedy any defects in the floors of the buildings caused by their default in design or construction. The lease subsequently entered into contained no such provision, nor did it contain a covenant to repair. The defendants later commenced actions claiming damages in excess of £1m for alleged defects in the floors and they refused to pay further rent. The plaintiffs claimed possession of the premises and arrears of rent and mesne profits of some £570,000, of which £540,000 was admitted to be due by the defendants subject to a set-off in respect of their counter-claim. On a preliminary issue as to whether the defendants were entitled to set off their unliquidated demand, it was held that: (1) a bona fide claim for unliquidated damages could amount to an equitable setoff affording a complete defence if its amount exceeded that of the plaintiffs’ claim; (2) the defendants could not rely upon any common law right of set-off against rent; but (3) the doctrine of equitable set-off applied since the defendants had no common law right and since, although their claim did not arise out of the lease, it arose from an agreement closely connected therewith, and because it would be manifestly unjust to allow the plaintiffs to recover without taking account of their breaches of the original agreement. A similar approach was taken in Melville v Grapelodge Developments Ltd [1980] 1 EGLR 42 (QB); and see Knockholt Pty Ltd v Graff [1975] Qd R 88, and note in that case the comment by WB Campbell J (at 90) that ‘should I consider that the lessees are entitled to set-off damages suffered by them by reason of the landlord’s breach of covenant, I could not hold that they have breached their obligation under the lease to pay the rental’, a consideration that may be relevant in other circumstances, such as in relation to the exercise of an option. More recent decisions indicate that equitable set-off will be available to a tenant as a result of breach of the landlord’s covenants under the lease, or some associated obligation to the tenant provided the requirements for an equitable set-off generally are satisfied: and see Weir, above, pp 860 and following. The essential ingredient for an equitable set-off is that the crossclaim ‘impeach’ the claim of the plaintiff (that is, a ‘true’ equitable set-off). In

MEK Nominees Pty Ltd v Billboard Entertainments Pty Ltd (1993) V ConvR ¶54-468 the tenant sought to resist proceedings by the landlord for possession by which it elected to re-enter and determine the lease for non-payment of rent. The tenant sought to set off against the landlord’s claim its claim for unliquidated [page 213] damages for the landlord’s breach of the covenant for quiet enjoyment; although the proceedings were interlocutory the authorities were considered by Tadgell J in some detail. Apart from noting that the tenant was successful at this interlocutory stage it should also be noted that the landlord’s breach of the covenant for quiet enjoyment was not of a minor nature. It involved persistent leakage of sewage into or about the premises (a basement nightclub and discotheque) which, apparently, had a serious adverse effect on the tenant’s business. As to the essential ingredient for an equitable set-off, Tadgell J said (at 65,466): There was agreement between counsel that, at least in this Court, it is an indispensable requirement to the utilisation of a cross-claim as an equitable set-off that there be, ‘such a nexus between the claim and the cross-claim that the cross-claim can be said to impeach the plaintiff’s claim’: Indrisie v General Credits Ltd [1985] VR 251, 254, and the cases there cited. The essence of the dispute here is whether, having regard to the nature of the plaintiff’s claim, the requirement is capable of being met in point of principle and, if so, whether it is met in point of fact. The traditional statement of principle in terms of ‘impeachment’ seems to derive from the dictum of Lord Cottenham in Rawson v Samuel, (1841) Cr & Ph 161; 41 ER 451 at p 179 (458), that ‘the equity of the Bill impeached the title to the legal demand’. Since the word is probably not so much in common use nowadays as Lord Cottenham’s day, and has now — as it had then — various connotations, it is perhaps useful to consider how the notion of ‘impeachment’ is to be appropriately understood. Professor R M Goode, in Legal Problems of Credit and Security, 2nd ed, at p 155, has

stated that one of the prerequisites of equitable set-off is that ‘the crossclaim must be so closely connected with the claim as to impeach it, that is, to render it inequitable to allow the plaintiff to obtain judgment on his claim without giving credit for the cross-claim’. He cites as authority Rawson v Samuel, supra; Hanak v Green (1958) 2 QB 9 and British Anzani (Felixstowe) Ltd v International Maritime Management (UK) Ltd [1980] 1 QB 137. This statement, though helpful, does not much assist in an identification of circumstances in which equity will intervene, or what it will do. Meagher, Gummow and Lehane, in Equity Doctrines and Remedies, 3rd ed, pp 822–3, have suggested that a series of modern English authorities seems to have diluted the requirement of ‘impeachment’ into one whereby it is sufficient that the set-off arises out of the same transaction as that on which the plaintiff sues or out of a closely related transaction, or even where it is reasonable in the interests of justice and fair dealing to allow it. A similar dilution has not occurred in this Court. In Re KL Tractors Ltd [1954] VLR 505, at p 508, O’Bryan, J observed, citing Story’s Equity Jurisprudence, that ‘… equity did not interfere to give a better right of set off than that given by the common law Courts unless special natural equities between the parties were disclosed’. This sentence is, I suggest, a useful key to a proper understanding of what is meant by ‘impeachment’ in the context, for it indicates that the cross-claim must afford an equity which calls in question, impugns, disparages or impedes the title to the plaintiff’s demand. The cross-claim need not necessarily destroy the plaintiff’s claim but, if it is to afford an equitable set-off, it must admit of being taken necessarily into account in a determination of the plaintiff’s title to relief. The range of the equitable jurisdiction is most surely discerned (to borrow some words of Lord Simonds, LC) ‘… by seeing what jurisdiction the great equity judges of the past assumed and how they justified that assumption’: Chapman v Chapman [1954] AC 429, 444. [page 214]

Tadgell J continued (at p 65,467): In Eagle Star Nominees Ltd v Merril (1983) V ConvR ¶54-002; [1982] VR 557, at pp 560–1, I had occasion briefly to consider the British Anzani Case but it is of more particular relevance here and deserves concentrated attention. It involved a landlord’s action for possession, unpaid rents and mesne profits to which the tenant raised by way of defence a cross-claim for unliquidated damages. The damages claimed by the tenant were for alleged breaches of covenants contained, not in the lease but in associated building contracts pursuant to which the tenant was obliged to take a lease. Forbes, J was required to consider as a preliminary issue the question whether such a cross-claim could operate as a defence. After a careful review of authority his Lordship decided that it could. His conclusion was expressed at p 151 in this way — … except in cases of distress or replevin equity has never refused to interfere to protect a tenant whose landlord was bringing proceedings based on nonpayment of rent, if the tenant had a bona fide cross-claim for unliquidated damages against the landlord, provided that he was not covered by an existing common law remedy and that the ordinary rules pertaining to equitable set off were obeyed. At p 152 he said — While I am satisfied that it is proper in principle to allow that a cross-claim could be effective as an equitable set off against a claim for rent, it by no means follows that such a defence is available in all circumstances. The important qualification is that the equity must impeach the title to the legal demand, or in other words go to the very foundation of the landlord’s claim. This seems to me to involve consideration of the proposition that the tenant’s cross-claim must at least arise under the lease itself, or directly from the relationship of landlord and tenant created by the lease. The landlord’s covenant to repair contained in the lease, if broken, might found, as has been seen earlier, the ancient common law

defence for a claim for rent if the tenant had been forced to pay for repairs to maintain the premises in a fit state for the purpose for which they were let. If instead of paying for the repairs the tenant cross-claims for damages for breach of the covenant, there is no common law defence, but there must, in my view, be an equitable right to set off the unliquidated damages. In the British Anzani Case there was no covenant by the landlord to repair contained in the lease. It was therefore necessary to consider whether the alleged breach of the covenants contained in associated building contracts impeached the landlord’s claim. In the present case I need not go so far, for the covenant upon breach of which the defendant relies is an express covenant for quiet enjoyment contained in the lease. Although the covenant provides, in a usual form, that ‘The Lessee, upon paying the rent and other moneys payable to the Lessor … shall and may peaceably possess and enjoy the premises …’, payment of the rent is not a condition precedent to the performance of the covenant: Edge v Boileau (1885) 16 QBD 117, 120 per Pollock, B. In conclusion Tadgell J emphasised that it was not any breach of the covenant for quiet enjoyment that would give rise to an equitable set-off. Neither was the relative quantum of the respective claims the relevant consideration — rather the claim for breach of the landlord’s covenant must ‘impeach’ the landlord’s claim. His Honour said (at p 65,469): [page 215] Instructed by the British Anzani Case and the decisions upon which Forbes, J there relied, I think I am justified in acting on the following proposition: a claim for unliquidated damages for breach of a landlord’s covenant for quiet enjoyment may disclose an equity sufficient to defeat the landlord’s claim for possession founded on forfeiture for non-payment of rent. That is not to say that any breach of a covenant for quiet enjoyment will disclose a title to equitable relief. I doubt, for example, whether a right to compensation by way of damages from a

landlord for breach of such a covenant would necessarily provide a defence in equity merely because they over-topped the unpaid rent. On the other hand it might not obviously follow that equitable relief to some degree should not be allowed merely because the damages due for a breach of covenant for quiet enjoyment did not over-top the amount of the unpaid rent. As Scott, J observed in Sim v Rotherham Metropolitan Borough Council [1987] Ch 216, at p 262 — If, in principle, the nature of a breach and of the cross-claim attributable to the breach impeach a party’s title to full contractual payment, the fact that the claimable damages are small is not, in my view relevant. Equitable set off does not depend on the size of the damages or on the severity of the breach of contract. It depends, in my judgment, on the nature of the breach relative to the nature of the contractual claim. In the British Anzani Case Forbes, J observed, at p 156, that — It would in my view be manifestly unjust to allow the landlords to recover the rent without taking into account the damages which it is alleged the tenants have suffered through failure by the landlords to perform their part of the agreement. So here, I have no doubt that the evidence for the defendant should be taken into account in determining whether the plaintiff should recover possession upon its claim founded on forfeiture for nonpayment of rent. If the plaintiff in the capacity of landlord is liable for unliquidated damages to the defendant in the capacity of tenant, the defendant’s claim ought in the circumstances of this case, to use the words of Lord Redesdale, LC, ‘to have been paid by the landlord in order to enable the tenant to pay his rent’. This is in essence the approach that was taken by WB Campbell, J in Knockholt Pty Ltd v Graff, [[1975] Qd R 88]. I therefore decide the point of principle in favour of the defendant. And see Gibb Australia Pty Ltd v Cremor Pty Ltd (1992) 108 FLR 129 (SC(ACT) (FC)); and Liangis Investments Pty Ltd v Dalypyn Pty Ltd (1994) 117 FLR 28; [1994] ANZ ConvR 637 (SC(ACT)).

Similarly, in Eller v Grovecrest Investments Ltd the Court of Appeal proceeded on the basis of ensuring ‘fair dealing’ between the parties: see [1995] QB 272 at 278, referring to Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1979] AC 757; [1978] 3 All ER 1066 (CA) at 1078 (per Denning MR); and see O’Mahony v Dickson (1905) 2 Sch & Lef 305. It may be that the extent of any injustice or lack of fairness may lead a court to a more relaxed view as to the closeness of the connection of the claims which it requires: see Weir, above, pp 861–2 and see Spry, ‘Equitable Setoffs’ (1969) 43 ALJ 265 at 268, to which reference is made (at pp 862–4). Further it appears that, provided there remains the requisite connection between the two claims, [page 216] the tenant may set off damages against rent due in respect of a period other than that in which the landlord’s breach occurred: see Waite, ‘Disrepair and Set-off Damages Against Rent: The Implications of British Anzani’ (1983) 47 The Conveyancer 373 at 381, referring to Newfoundland v Newfoundland Railway Co (1888) 13 App Cas 199 and Federal Commerce. The British Anzani decision was cited with approval or applied in BICC plc v Burndy Corp [1985] Ch 232 (CA) at 249 (per Dillon LJ) (referred to by Tadgell J in MEK Nominees, above, at 65,468); Sim v Rotherham Metropolitan Borough Council [1987] Ch 216; Westpac Banking Corporation v Eltran Pty Ltd (1987) 74 ALR 45; Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168; Ory and Ory v Betamore Pty Ltd (in liq) (1993) 60 SASR 393 (FC); Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410 (per Williams J); (and see Partnership Pacific Securities Ltd v Terry White Group Pty Ltd (SC(Qld), de Jersey J, unreported, OS 240 of 1992; referred to in Weir, above, p 866); Connaught Restaurants Ltd v Indoor Leisure Ltd; Eller v Grovecrest Investments Ltd; Miwa Pty Ltd v Siantan Properties Pte Ltd (2011) 15 BPR 29,545; see also Electricity Supply Nominees Ltd v IAF Group plc. The cases do not suggest any limitation on the type or basis of the claim of the tenant for unliquidated damages that may be the subject of an equitable set-off against the landlord’s claim, provided the latter claim is ‘impeached’ in the relevant sense. However, tenants’ claims for nuisance and for breach of the landlord’s covenant for quiet enjoyment are likely to predominate as they are

the type of claim by the tenant which are probably most likely to impeach the landlord’s claim: see, for example, MEK Nominees at 65,469 and Eller v Grovecrest Investments Ltd; as to refurbishment by the landlord, see Citibank v Partnership Pacific; but compare Ory and Ory v Betamore Pty Ltd (in liq). In appropriate circumstances claims for damages for fraudulent misrepresentation or claims under the Competition and Consumer Act 2010 (Cth) or state fair trading legislation may give rise to an equitable set-off: compare DKB Investments Pty Ltd v Belcote Pty Ltd [No 2] (1993) 113 FLR 290 (SC(NT)). The general rule with respect to assignees of a creditor is that: ‘an unliquidated cross-claim possessed by the debtor against the assignor may be set off against the assigned debt if the case is one in which the claims are sufficiently closely connected to give rise to an equitable set-off as between the debtor and assignor’: Derham, Set-off, 4th ed, para 17.32; and see Newfoundland v Newfoundland Railway Company; also Weir, above, p 865. In the context of the landlord and tenant relationship it seems that the assignee from the landlord must take subject to a tenant’s rights of equitable set-off because the landlord’s entitlement to rent has actually been impeached: Barnhart v Greenshields (1853) 9 Moo PC 18; 14 ER 204; see also Waite, above, p 386; Weir, above, p 865; and Spry, above, p 269. However, given that an equitable right of set-off is by its nature an equitable right, one may well ask whether the position is affected by the bona fide purchaser rule. Waite considered this question, suggesting that the rule would almost invariably not apply because either the chose in action assignment [page 217] rules would apply or the assignee of the reversion would have actual or constructive notice of the equitable right, and most probably the latter (a view which is supported by Reeves v Pope [1914] 2 KB 284 (CA), particularly at 289 (per Buckley LJ), set out below). Waite said (pp 385–6): Under section 141 of the Law of Property Act 1925 [see [15.20]] the right to receive rent passes with the reversion without the necessity of any separate assignment. An assignment of a chose in action takes effect subject to a right of set-off existing at the time of notice of

assignment [Smith v Parkes (1852) 16 Beav 115; Roxburghe v Cox (1881) 17 Ch D 520 at 526 (CA) and Young v Kitchen (1878) 3 Ex D 127 and the Newfoundland case]. This rule has been held to apply irrespective of whether the assignee has notice of the right of set-off. In Mangles v Dixon [(1852) 3 HL Cas 702 at 731–2] Lord St Leonards LC held that ‘whoever takes an assignment of a chose in action … takes it subject to all the equities of the person who made the assignment … But the rule to which I have referred applies where there is no notice’. [This case was not one of set-off but depended on the construction of an agreement between the parties. However, it is submitted that the principle is the same for set-off. In Roxburghe v Cox the assignee of the chose in action was bound by the right of set-off, although apparently he had no notice of it.] It appears that the notice referred to is actual notice because it is made clear that the duty to make enquiries rests with the assignee [Mangles v Dixon, above, at 732 et seq]. Only where it is clear that the assignee has been deceived, does the debtor have a duty to inform the assignee of the true position. If the debtor fails to speak out then he loses his right of set-off [Mangles v Dixon, above, at 733]. However, it is likely to be very rare in practice that a tenant has any knowledge of the dealings between the original landlord and his assignee and so will rarely have a duty to inform the new landlord of his outstanding claim for damages. [And see under ‘loss of right of set-off: equitable principles and estoppel’]. That being so, it appears that the reason why the assignee of the reversion is bound by the tenant’s right of set-off is because he has constructive notice of it. [Some cases, eg, Newfoundland and Roxburghe v Cox appear to ignore the bona fide purchaser rule. If so, the assignee may be bound by equities automatically. The end result is the same.] Courts may, however, prefer a different analysis, based on the assignment of the whole of the landlord’s estate. In that case, if the landlord’s assignee is a bona fide purchaser, it is submitted that he will be fixed with constructive notice of the tenant’s right of setoff. This follows from the law laid down in the Privy Council’s judgment in Barnhart v Greenshields [(1853) 9 Moo PC 18] delivered by Mr Pemberton Leigh afterwards Lord Kingsdown:

With respect to the effect of possession, merely, we take the law to be, that if there be a tenant in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor … the principle being … that the possession of the tenant is notice that he has some interest in the land, and that a purchaser having notice of that fact, is bound, according to the ordinary rule, either to enquire what that interest is, or to give effect to it, whatever it may be. [This case was followed in Hunt v Luck [1902] 1 Ch 428 and cited with apparent approval in Smith v Jones [1954] 1 WLR 1089 (where, however, contrary to the usual rule, a tenant’s equity of recission was held to be subject to the bona fide purchaser rule).] [page 218] Whether this rule applies to equitable set-off depends on whether it can be described as a mere equity. It is submitted that it can, for as has been shown it binds the successor of the original landlord and it is capable of transmission to a successor tenant by assignment. It is a right which is incidental to the tenancy, because it impeaches the landlord’s entitlement to the rent. [See National Provincial Bank v Ainsworth [1965] AC 1175, and Blacklocks v JB Developments (Godalming) Ltd [1981] 3 WLR 554.] A mortgagee, at common law, is not, it seems to be treated in the same way as an assignee of the reversion other than by way of mortgage. In Reeves v Pope Buckley LJ (with whom Phillimore LJ agreed) said (at [1914] 2 KB 289–90): The mortgagees were entitled, as mortgagees, to the reversion expectant on the determination of the lease under which the defendant held, and as such mortgagees they were entitled in their own right to enforce payment of the arrears of rent. They were not assignees of the rent; they were persons claiming to enforce payment of the rent as entitled thereto as mortgagees; they could have distrained for the rent.

They were asserting a legal right to rent which was due to them as owners of the reversion expectant upon the term. The argument before us started, I think, upon a similar line, but it soon became obvious that that could not be maintained. Then it was said that there was a right of set-off by reason of the fact that the damages in question were damages arising from a breach of contract to do something upon the land within a time. Now, that, I conceive, is wholly a misconception. The doctrine is this — that, whether there be a purchaser or mortgagee (it does not matter which), and the purchaser or mortgagee finds a tenant in possession, he is bound to assume that the tenant in possession has some interest in the land. He may inquire what it is, or forbear to inquire, as he thinks proper, but if he does not inquire he must give effect to it, whatever the interest in point of fact is. Now, is that doctrine confined entirely to the interest of the tenant in the land? All that these mortgagees knew was that there were such facts as that the tenant was saying ‘I have a personal right against the mortgagor to damages in respect to his having failed to perform some obligation which lay upon him to do something upon the land’. That, of course, created no incumbrance on the land at all. Those damages were not any incumbrance on the land, and the right to them was no estate or interest in any way in the land. Reeves v Pope, and the above passage, was cited with approval by Beach J in Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168 at 173–4; and also by Smith J in Downie v Lockwood [1965] VR 257 at 260 and by Williams J in Re Partnership Pacific Securities Ltd at [1994] 1 Qd R 418–19; see also Ory and Ory v Betamore Pty Ltd (in liq) at 60 SASR 404. Having accepted this common law position Beach J in Citibank said (at 175): In my opinion a mortgagee in possession is not bound by any claims a tenant may have against the lessor-mortgagor. Upon default in payment of principal and interest due under a mortgage, a mortgagee is given a statutory right to the rent due under a lease of the mortgage property. See s 78 of the Transfer of Land Act. That right cannot be subject to any personal obligation of the mortgagor to the tenant.

The fact that Citibank, as mortgagee, had arguably adopted the lease was said not to change the position and render it subject to any personal rights to damages (see at 172–3): similarly Ory and Ory v Betamore Pty Ltd (in liq). [page 219] It is pertinent to note that no reliance was placed by Beach J in Citibank on s 81 of the Transfer of Land Act 1958 (Vic) which seeks to equate the rights of the first mortgagee of general law land with a first mortgagee of Torrens title land (see [18.5]; the only other equivalent provision is the Transfer of Land Act 1893 (WA) s 116). Section 78 of the Victorian Act is reflected in the Torrens legislation of the other states: see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage, [19.3]; and Ory and Ory v Betamore Pty Ltd (in liq) at 60 SASR 406–7 with respect to the South Australian provision; but compare the comments of Williams J on the ‘equivalence’ of these provisions in Partnership Pacific at [1994] 1 Qd R 419–20. See also Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505; (1994) V ConvR ¶54492 and SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd [1998] 2 VR 90 (CA) (reversed on grounds not relevant to the present discussion, (1999) 196 CLR 245; 162 ALR 382); and see [5.16] and [15.20]; see also Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage (3rd Aust ed), [12.4] and [12.7]. In Ory and Ory v Betamore Pty Ltd (in liq) the tenants claimed a right to set off money overpaid to the landlord by way of rent against rent claimed by the mortgagee. It was found that the mortgagee was entitled to the rent under s 137 of the South Australian Real Property Act 1886 (which was said to be the equivalent of s 78 of the Victorian Act). Legoe J (with whom the other members of the court agreed) expressly approved the statement of Beach J in Citibank, which is set out above (at 60 SASR 406). On the particular facts it was held, first, that the overpayments were not rent. They were not payments to which the landlord was entitled. Second, it was held that there was not the requisite ‘close connection’ between the claims. The mortgagee, it was said, if entitled to the rent was entitled to the rent payable pursuant to the lease. Relying on Reeves v Pope, Legoe J said: ‘… I am of the opinion that the alleged equitable set-off in these circumstances is not available to the tenants

because the overpayment does not run with the lease but is a personal claim by tenant against landlord’ (at 406). It followed on the basis of Citibank that the tenants’ claim against the mortgagee failed. De Jersey J in Partnership Pacific Securities Ltd v Terry White Group (SC(Qld), unreported, OS 240 of 1992); but see [1994] 1 Qd R 416–17; Weir, above, p 866) appears to have treated s 117(2) of the Queensland Property Law Act 1974 as something of an equivalent of s 78 of the Victorian Transfer of Land Act for present purposes (rather than its ‘true’ equivalents, s 141 of the Property Law Act 1958 (Vic) and the other state equivalents which are generally seen as dealing with the benefit of covenants in favour of assignees of the reversion: see [15.19], [15.20]). In any event Williams J in Re Partnership Pacific Securities Ltd took a contrary view. His Honour found that by reason of the fact that a Torrens title mortgagee is a mere statutory chargee and not in the same position as a mortgagee of general law land there is no interest right in the mortgagee as holder of the fee simple to sue the tenant for rent (see at [1994] 1 Qd R 417–19). Williams J then considered whether s 60 of the Real Property Act 1861 [page 220] (Qld) made any difference to this position. Comparing the provisions in the other states, his Honour said (at 419–20): Bearing in mind that under the Torrens System the mortgagee’s rights are conferred by statute it is important to have regard to the precise language of the statute in question. Here one must approach decisions of courts in Australia with some care because there are subtle differences between the relevant legislation in the various States. For example, ss 60 and 63 of the Real Property Act 1900 (NSW) confer far wider rights on a mortgagee than is the position under the corresponding Queensland statute. The former section gives the mortgagee power to enter ‘in the same manner in which he might have made entry … if the principal sum … were secured to him by a conveyance of the legal estate in the land’, and the latter provides that whenever a mortgagee gives notice of entering into receipt of rents

and profits all the powers and remedies of the mortgagor as to such rents and profits are suspended and transferred to the mortgagee until the notice is withdrawn or the mortgage satisfied. (Cf Re Smith; Ex parte Coleman (1934) 7 ABC 1 at 7 per Lukin J.) There is similar legislation in the Australian Capital Territory. In Victoria s 81 of the Transfer of Land Act 1958 produces a vastly different position to that which exists in Queensland. Subsection (1) gives a mortgagee ‘the same rights and remedies at law and in equity … as he would have had if the legal estate in the mortgaged land had been vested in him as mortgagee’. Thus from the creation of the mortgage the mortgagee is in the same position as if he were the owner of the fee simple, and that would mean, where the subject land was leased, he held the reversionary interest in the land. The mortgagee clearly is given the right to sue for rent. Subsection (3) is also significant because it deprives the mortgagor-lessor of the right to sue for rent (even before default under the mortgage) without the consent of the mortgagee. As Sykes points out in his work, The Law of Securities, 4th ed, 1986, pp 254–7, there are differences between the position in the Australian Capital Territory, New South Wales and Victoria, on the one hand, and that in Queensland, South Australia and Tasmania on the other. Speaking of the latter three states he went on to say that ‘the general position would then seem to depend on whether a power to enter into possession “by receiving the rents and profits” conferred a power to sue for rent or damages for breach of covenant, or whether it meant merely that the mortgagee committed no wrongful act in so receiving and that the tenant was entitled to pay the rent to the mortgagee. It is submitted that the words are not wide enough to confer a right of suit against the tenant, that they express merely a right against the mortgagor. There is nothing impossible in the existence of a right as against a mortgagor to receive rents, divorced from an ability to recover them by legal action against the tenant. This after all is the situation where the old title mortgage directs tenants holding under a lease granted by the mortgagor after the date of mortgage, to pay the rents to him, the mortgagee’.

(But compare Ory and Ory where the South Australian Full Court treated the South Australian provision as being equivalent to s 78 of the Victorian Act in this context: see 60 SASR 406.) Citibank was distinguished on the basis that it correctly applied Reeves v Pope given the provisions of s 81 of the Victorian Transfer of Land Act. However, as has been noted, Beach J did not rely on s 81. As to s 117 of the Queensland Property Law Act 1974, Williams J decided that it created no new rights in the mortgagee and could [page 221] not be the basis for an action for rent or recovery of arrears of rent (see at [1994] 1 Qd R 421 where Williams J also acknowledges that this is contrary to the conclusion reached by de Jersey J). With respect to Williams J it is suggested that the decision of Beach J in Citibank, relying as it does on s 78 rather than s 81 of the Victorian Transfer of Land Act, is the more satisfactory result in so far as it does not impose on a mortgagee some ‘equity’ in favour of a tenant of which it had no notice (and which it possibly could not know of and had no right to discover). This is also consistent with the position of the South Australian Full Court in Ory and Ory. The idea that a mortgagee ought generally to be taken to have notice of any ‘equity’ as between the mortgagor and any tenant was rejected implicitly in Citibank by his Honour’s reliance on s 78 of the Act and also by treating the mortgagee’s adoption of the lease as irrelevant to the position (and similarly in Ory and Ory). More generally, to be departing from the position applicable to mortgagees of general law land too readily and thereby imposing ‘equities’ on registered mortgages of Torrens title land seems to be a departure from the underlying philosophy of the legislation (as evident in the ‘paramountcy’ provisions: see, for example, s 42 and following of the Victorian Act) and to lose sight of the position taken by the High Court, at an early stage, that the legislation was primarily a conveyancing statute: see Barry v Heider (1914) 19 CLR 197 at 213 (per Isaacs J); and see Tyler, Young and Croft, Fisher and Lightwood’s Law of Mortgage (2nd Aust ed), [28.3] and [28.4]. The right of a

mortgagee to arrears of rent in light of the Citibank and Partnership Pacific decisions is discussed at [15.20]. A tenant’s right of set-off, or a right of set-off generally, may be excluded by an express provision to this effect; but the provision must be clear as there is a presumption that neither party intends to abandon any remedies for breach arising by operation of law: Connaught Restaurants Ltd v Indoor Leisure Ltd. In the Connaught decision it was held that the words ‘without deduction’ with respect to the rent were insufficient in themselves to exclude a tenant’s right to set off severe damage caused by the flooding of the tenant’s premises which disrupted its business. Williams J in Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410 said that the expression ‘without any deduction’ was not sufficient to create the result (see at 425 and note the reference to the discussion by Weaver and Craigie in Banker and Customer, [3.810] of the meaning of expressions such as ‘free of exchange’ and ‘deductions’); compare Beach J in Citibank at [1993] 2 VR 175 where his Honour took the contrary view of the effect of ‘without any deduction’. Finally, as to the nature and types of set-off, see Derham, Set-off; Heydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, 5th ed, [39-005]–[39-140] and see, particularly [39-050] as to the four kinds of equitable set-off and the discussion of ‘true’ equitable set-off at [39-055] and following; and Weir, above, pp 857–62. For an example of an alleged counter-claim rather than a set-off, see DKB Investments Pty Ltd v Belcote Pty Ltd [No 2]. [page 222]

Covenant to repair [7.5] A written lease will usually contain a covenant on the part of the lessee to repair. Less frequently, there is a repairing covenant by the lessor. Covenants to repair are dealt with in Chapter 10.

Liability on covenant after assignment [7.6] The liability of the tenant and assignee of the term on covenants in the lease after the term has been assigned is examined in [15.18]–[15.21].

Permission to act in breach of covenant [7.7] The absurd rule in Dumpor’s case (1603) 4 Co Rep 119, was that a licence to do an act in breach of a covenant or condition determined that covenant or condition. The effect of this doctrine was that if a lease contained a covenant or condition against assigning without licence, and the lessor once permitted the lessee to assign, the lessor had no right to prevent further assignments: for this reason, the Full Court held in O’Shanassy v Symons (1856) 1 VLT 58, that a covenant not to assign did not run with the land, for an assignment with the licence of the lessor destroyed the covenant before it could begin to run with the land. The rule has been abolished by statute: see Conveyancing Act 1919 (NSW) ss 120, 123; Property Law Act 1974 (Qld) s 119; Landlord and Tenant Act 1936 (SA) s 47; Conveyancing and Law of Property Act 1884 (Tas) s 16; Property Law Act 1958 (Vic) ss 143, 148; Property Law Act 1969 (WA) ss 73, 79. As to what may amount to a waiver of a breach of covenant, see [17.18]. ‘Actual waiver’ includes waiver by conduct: Mills v Griffiths (1876) 45 LJQB 771; and Attorney-General for Hong Kong v Fairfax Ltd [1997] 1 WLR 149 (PC). The effect of s 148 (Vic) is considered in Mulcahy v Hoyne (1925) 36 CLR 41. Section 148 is further considered in Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported).

Covenants concerning user [7.8] A covenant not to use the premises for any purpose other than that of carrying on a particular kind of business does not require the lessee to carry on that business on the premises: Doe d Marquis of Bute v Guest (1846) 15 M & W 160; 150 ER 804; Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268. In the latter case, the lessee covenanted ‘not … to use

the demised premises for any other purpose than (a specified type of) supermarket’. During the currency of the lease, it ceased using the premises for any business purpose, but left on the premises furniture fittings and equipment used by it in its business formerly carried on at the [page 223] demised premises and it exhibited a notice in the window advertising the removal of its business to a new address. Gowans J held that the lessee’s conduct did not constitute a breach of the above covenant, nor a repudiation, abandonment or disclaimer of the lease, nor a repudiation of the basic condition thereof. Nevertheless, ‘a covenant not to use premises except in a certain way is a covenant not to use them in any other way’: Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480 at 492 (per Hutley JA). If on the other hand the covenant is cast not in negative but in affirmative terms, the lessee will be in breach if he or she fails to use the premises for the specified purpose: Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751; FW Woolworth plc v Charlwood Alliance Properties Ltd [1987] 1 EGLR 53 (Ch). From the fact that the lessee covenants to not carry on any business other than a business of a particular kind it is not possible to imply a promise on the part of the lessor that the premises can lawfully be used to conduct the business in question: Hill v Harris [1965] 2 QB 601. A user covenant may, however, be cast in such a way to impose an obligation on the tenant to carry on a particular business or a business consistent with the permitted use provisions, sometimes in considerable detail with respect to the standard of the business, including its being well stocked, well run and open during certain hours: see Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd; EMS Quarries Pty Ltd v Beaumont (2001) 10 BPR 18, 943 (where it was held that a lease covenant to pay royalties and work a mine did not impose an obligation to undertake non-economic operation); and G & A Lanteri Nominees Pty Ltd v Fishers Stores Consolidated Pty Ltd (2005) V ConvR 54-708 (a breach that was held to occur on the vacating of the supermarket premises in spite of the tenant’s continued performance of its financial obligations under the lease); affirmed on appeal without discussion

of this issue ([2007] VSCA 4); and see Woodfall’s Landlord and Tenant, para 11.187 (positive and negative user covenants); para 11.201 (specified business); and para 11.202 (‘high class’). Each covenant must, of course, be construed in the context of the particular lease provisions, so it is dangerous to assume that a judicial interpretation in relation to a particular type of use can be applied generally: see Blumenthal v Church Commissioners for England [2005] EGLR 78 (CA) at [23] (per Sir William Aldous). Covenants which permit use for a particular business during certain, specified, hours may raise a positive user obligation in this respect (see Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751) as may a covenant which requires the premises to be ‘kept and used’: see Westminster City Council v Westminster (Duke) [1991] 4 All ER 136; but see the comments in relation to this case in Blumenthal. The words of a particular user covenant may have the appearance of imposing a positive obligation but ‘… may be simply an emphatic statement of the prohibition on uses other than that specified’ (see Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 EGLR 155 (Ch D; per Hoffman J); or may be seen as permissive or protective where, for example, the words ‘but to use’ [page 224] are used in a provision following a general prohibition on carrying on an obnoxious trade such as ‘but to use the premises only for the ordinary purposes of the lessee’s business that is for the manufacture and export of synthetic rubber’: see JT Sydenham & Co Ltd v Enichem Elastomers Ltd [1989] 1 EGLR 257 (Ch D). In Moteks Pty Ltd v Matthews Pastoral Co Pty Ltd (CA(NSW), 5 March 1998, unreported) it was held that occasional use of the premises to serve coach parties was a breach of a covenant requiring the tenant to carry on in and upon the premises the business of a motel and licensed restaurant; as the covenant obliged the tenant conduct a licensed restaurant as a required element of the overall business. Depending upon the terms of the lease and the particular circumstances the tenant will not be in breach of a user covenant specifying a particular permitted business or businesses merely because ancillary activities take place at the premises: see Retail Tenancies Award No 14 — Farley Bay Pty Ltd v

Thomas (1996) V ConvR ¶58-523 (per Mr George Golvan QC); and see Joint London Holdings Ltd v Mount Cook Land Ltd [2005] EWCA Civ 1171; see also Woodfall’s Landlord and Tenant, [11.203]. The ambit of the permitted use provisions of a lease is, of course, a matter of construction: see AMP Life Ltd v Lillium Pty Ltd (2001) V ConvR ¶58-551; [2000] VCAT 34, in relation to a ‘Make Your Own Sandwich’ shop and the sale of alcoholic beverages, which was held not to be permitted; and see Harrem Pty Ltd (t/as CTH Transport & Services) v Toyo Tyre Rubber Australia [2008] NSWSC 776, where the inclusion of a special condition permitting the loading and unloading of shipping containers in a specified area of the premises was held to expand the permitted use of ‘warehousing, storage, and distribution’ under the lease. As to issues of construction, rectification and equitable estoppel in this respect, see Barton v Lantsbery [2004] VCAT 926 (Deputy President Macnamara, 17 May 2004); Reinforcement Scheduling Pty Ltd (t/as Camelot Receptions) v 1736 Dandenong Road Pty Ltd [2004] VCAT 1349 (Deputy President Macnamara, 18 June 2004); and Phillip Webb Pty Ltd v 483 Whitehorse Road Pty Ltd (VCAT, Deputy President Macnamara, 29 August 2006, unreported), referring (at [24]) to Montross Associated Investments SA v Moussaieff [1992] 1 EGLR 55 (CA); and see Blumenthal v Church Commissioners; see also [4.1], [4.2], [4.8] and [6.3]– [6.5] (construction) and [6.8] (rectification); and also [1.15] (estoppel, in the context of the creation of tenancies). In Montross the English Court of Appeal (Parker, Nourse and Butler-Sloss LJJ) held that ‘leased premises could still be regarded as having been used “for the business of high-class retailers of jewellery” even where used only for storage, processing of paperwork and negotiations with suppliers to the business’. The permitted use clause considered by the New South Wales Court of Appeal in Goldana Investments Pty Ltd v Amberdown Pty Ltd (2000) 10 BPR 18,001 prohibited use of the premises or any part ‘otherwise than for a pharmacy including a post office agency and photographic store and processing agency’. It was held that the word ‘agency’ did not exclude the use of a minilab and photographic processing on site. Sometimes a particular use may appear to be merely an ancillary use but, as a matter of construction applying the [page 225]

principles referred to above, is properly to be regarded as a separate, nonpermitted use: see Harrison v Inala Plaza Pty Ltd (2003) Q ConvR ¶54-580, where the permitted use as a ‘medical centre’ was held not to encompass the sub-lease of less than 10 per cent of the area of the premises for use as a pharmacy. See also Easy Buy International Pty Ltd v Macquarie Goodman Property Services Pty Ltd [2006] NSWSC 148 where it was held that a permitted use of ‘warehousing and distribution’ did not, having regard to the meaning and combination of the words ‘warehousing’ and ‘distribution’, in the context of the particular provisions of the lease, include direct sales to customers off the street. The approach of a court to construction of the permitted use provisions and any issues as to more remote or ancillary uses may be influenced where premises are located nearby other premises leased by the landlord, in a shopping centre or otherwise, and subject to something in the nature of a ‘letting scheme’ whereby the permitted uses under the leases of these premises are designed to be complementary rather than overlapping or conflicting, to protect each of the leased premises: see Williams v Kiley (t/as C K Supermarkets Ltd) [2002] EWCA Civ 1645. The extent to which courts would be prepared to enforce a covenant by a tenant to carry on business at the leased premises by a decree of specific performance is likely to be very limited indeed having regard to the general refusal of the courts to grant specific performance when this would involve continued supervision by the court to ensure fulfilment of the contract: see J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 297–8 (per Dixon J); and, similarly, Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL); and see Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, [20-065]. There may, however, be some exceptions to this general position in particular circumstances: see Argyll Stores [1998] AC 1 at 16 (per Lord Hoffmann) and Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33 (discussed at [10.13] in relation to remedies for breach of repair covenants); and see Woodfall’s Landlord and Tenant, para 4.109. For example, in Retail Parks Investments Ltd v Royal Bank of Scotland plc (No 2) (1996) SLT 669 (Court of Session, IH (Ex Div), Scotland) an order in the nature of specific performance (a decree ad factum praestandum) was made with respect to a lease covenant by the bank to use and occupy its leased premises as bank offices and to keep the premises open for business

throughout the whole period of the lease. It was held that an order of this nature would pass the test for precision and specification laid down in the authorities as the order sought merely required the bank to continue to honour its obligations for the remainder of the term of the lease. This approach is consistent with the statements, and review of authorities, by Lord Hoffman in Argyll Stores [1998] AC 1 at 13–15. Nevertheless there are particular considerations arising with respect to the nature of the remedy of specific performance and the consequences of a breach of such an order which require careful consideration where a reluctant tenant and, most likely, an uneconomic business are involved. These were highlighted in the speech of Lord Hoffmann in Argyll Stores (at 13): [page 226] The prospect of committal or even a fine, with the damage to commercial reputation which will be caused by a finding of contempt of court, is likely to have at least two undesirable consequences. First, the defendant, who ex hypothesi did not think that it was in his economic interest to run the business at all, now has to make decisions under a sword of Damocles which may descend if the way the business is run does not conform to the terms of the order. This is, as one might say, no way to run a business. In this case, the Court of Appeal [[1996] Ch 286)] made light of the point because it assumed that, once the defendant had been ordered to run the business, self-interest and compliance with the order would thereafter go hand in hand. But, as I shall explain, this is not necessarily true. Secondly, the seriousness of a finding of contempt for the defendant means that any application to enforce the order is likely to be a heavy and expensive piece of litigation. The possibility of repeated applications over a period of time means that, in comparison with a once and for all inquiry as to damages, the enforcement of the remedy is likely to be expensive in terms of cost to the parties and the resources of the judicial system. Continuing, Lord Hoffman highlighted a further objection to the grant of

an order for specific performance in this context, both in relation to the effect the grant of such an order may have in ‘adjusting’ the relative losses of the parties in comparison with leaving them to the more usual remedy of damages for breach of covenant; and the likely effect in terms of the relationship between the parties and, consequently, repeated applications to the courts (at 15–16): There is a further objection to an order requiring the defendant to carry on a business, which was emphasised by Millett LJ in the Court of Appeal [see [1996] Ch 286 at 303–305]. This is that it may cause injustice by allowing the plaintiff to enrich himself at the defendant’s expense. The loss which the defendant may suffer through having to comply with the order (for example, by running a business at a loss for an indefinite period) may be far greater than the plaintiff would suffer from the contract being broken. As Professor R J Sharpe explains in ‘Specific Remedies for Contract Breach’ (ed Reiter and Swan, Studies in Contract Law (1980)) p 129: In such circumstances, a specific decree in favour of the plaintiff will put him in a bargaining position vis-à-vis the defendant whereby the measure of what he will receive will be the value to the defendant of being released from performance. If the plaintiff bargains effectively, the amount he will set will exceed the value to him of performance and will approach the cost to the defendant to complete. This was the reason given by Lord Westbury LC in Isenberg v East India House Estate Co Ltd (1863) 3 De GJ & S 263 at 273 [46 ER 637 at 641] for refusing a mandatory injunction to compel the defendant to pull down part of a new building which interfered with the plaintiff’s light and exercising instead the Court of Chancery’s recently acquired jurisdiction under the Chancery Amendment Act 1858 (Lord Cairns’s Act) to order payment of damages: I hold it … to be the duty of the Court in such a case as the present not, by granting a mandatory injunction, to deliver over the Defendants to the Plaintiff bound hand and foot, in order to be made subject to any extortionate demand that he

may by possibility make, but to substitute for such mandatory injunction [page 227] an inquiry before itself, in order to ascertain the measure of damage that has been actually sustained. It is true that the defendant has, by his own breach of contract, put himself in such an unfortunate position. But the purpose of the law of contract is not to punish wrongdoing but to satisfy the expectations of the party entitled to performance. A remedy which enables him to secure, in money terms, more than the performance due to him is unjust. From a wider perspective, it cannot be in the public interest for the courts to require someone to carry on business at a loss if there is any plausible alternative by which the other party can be given compensation. It is not only a waste of resources but yokes the parties together in a continuing hostile relationship. The order for specific performance prolongs the battle. If the defendant is ordered to run a business, its conduct becomes the subject of a flow of complaints, solicitors’ letters and affidavits. This is wasteful for both parties and the legal system. An award of damages, on the other hand, brings the litigation to an end. The defendant pays damages, the forensic link between them is severed, they go their separate ways and the wounds of conflict can heal. And see Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at 46–7, [78]–[81] (per Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ) and 87–9, [192] (per Gaudron J). In some jurisdictions statutory provisions exist which, in general terms, have the effect of preventing a landlord from withholding consent to the tenant’s request for agreement to a change in use of the leased premises other than on payment of a fine or something in the nature of a fine. An example of a statutory provision of this type is Queensland Property Law Act 1974 s 121(3): (3) In all leases, whether made before or after the commencement of

this Act, containing a covenant, condition, or agreement against the alteration of the user of the leased premises without licence or consent such covenant, condition, or agreement shall, if the alteration does not involve any structural alteration of the premises, be deemed, despite any express provision to the contrary, to be subject to a proviso that no fine or sum of money in the nature of a fine, whether by way of increase of rent or otherwise, shall be payable for or in respect of the licence or consent, but this proviso does not preclude the right of the lessor to require payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to the lessor and of any legal or other expenses incurred in connection with the licence or consent. Similar provisions are to be found in s 19(3) of the English Landlord and Tenant Act 1927. The comment is made in Woodfall’s Landlord and Tenant that these provisions are relatively limited in their operation. It is noted that the landlord’s right to grant or refuse consent is not fettered, it simply cannot be charged for (Comber v Fleet Electrics Ltd [1955] 1 WLR 566); a fine would include a demand for increased rent (Jenkins v Price [1907] 1 Ch 229; [1908] 1 Ch 10 (CA)), a condition that a free house become a tied house (Gardner & Co Ltd v Cone [1928] Ch 955, a case under s 144 of the Law of Property Act 1925), and the requirement of a break clause that would enable the [page 228] transfer of profits to the landlord (Barclays Bank plc v Daejan Investments (Grove Hall) Ltd [1995] 1 EGLR 68 (Ch)); and these provisions do not apply where they involve any, even slight, structural alteration to the premises — and ‘involves’ has been held to include changes of this nature associated with the proposed change of use: see Barclays Bank plc v Daejan Investments (Grove Hall) Ltd. As these provisions raise similar issues in relation to requests for the landlord’s consent to an assignment of the lease, and similar statutory

provisions, this issue is dealt with in detail in that context: see Chapter 15, particularly [15.6]–[15.16]. Additionally, questions in relation to the reasonableness of the landlord consenting to or declining to agree to a change of use often arise in relation to a request for consent to assign where the proposed new tenant wishes to vary the permitted use: see Ashworth Fraser v Gloucester City Council [2001] 1 WLR 2180 (HL), where their Lordships all shared the view (though not the final result) that a landlord will not necessarily be found to have acted reasonably where consent to assignment is refused because it involves a proposed change in use of the leased premises: see Lord Rodger at 2202–3, [70] and [71]; and see Lord Bingham at 2183, [6], and Lord Scott at 2186, [22]. The landlord is entitled to consider a combined application for consent to assignment and consent to a change of use together (Crown Estate Commissioners v Signet Group plc [1996] 2 EGLR 200); and, generally, the same principles are applicable with respect to both applications: Anglia Building Society v Sheffield City Council [1983] 1 EGLR 57 (CA); and Tollbench v Plymouth City Council [1988] 1 EGLR 79 (CA). There is no implied condition or warranty that leased premises are fit for the purpose or purposes for which they may be used under the lease covenants as to user or, indeed, that such permitted use or uses are lawful: see [8.6], noting the general law exception in this respect in relation to the letting of a furnished house (which now will be subject to residential tenancies legislative requirements in various jurisdictions) or in the event that the landlord has made express or implied representations in relation to fitness for purpose in any respect. The doctrine relating to restraints of trade does not apply to covenants in leases restricting the use to which the premises may be put: Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269; see further Quadramain Pty Ltd v Sevastapol Investments Pty Ltd (1976) 133 CLR 391; 50 ALJR 475; 8 ALR 555, which also contains some discussion of the effect on leases of s 45 of the Trade Practices Act 1974 (as it stood prior to its amendment in 1977, and now contained in s 45 of the Consumer and Competition Act 2010 (Cth)). Nevertheless, it seems that a covenant by a lessor not to permit other than an agreed number of premises with the same permitted use within a specified area will be construed strictly against a lessee within the class of permitted users: Bennett v Suburban Centres Pty Ltd (1981) 2 BPR 9659. A

covenant as to user will not normally be construed to reserve to the landlord, in effect, the right to impose user conditions unilaterally: C & A Pensions Trustees Ltd [page 229] v British Vita Investments Ltd [1984] 2 EGLR 75 (Ch). The current provisions of the Competition and Consumer Act (and the former provisions of the Trade Practices Act) as they may apply to leases are discussed in Chapter 12.

Covenants for renewal [7.9] Covenants for renewal are considered in Chapter 14.

Breach of covenants [7.10] Remedies for breach of covenant other than covenant to repair are discussed in [13.11]. As to breach of a covenant to repair, see Chapter 10.

Covenant against assigning without consent [7.11] Leases normally contain a covenant on the part of the lessee not to assign, sublet or part with possession of the premises without the consent of the lessor. It was said by Smith LJ in Bates v Donaldson [1896] 2 QB 241 at 247, that the purpose of the covenant against assignment without consent is to protect the lessor from having his or her premises used in an undesirable way or by an undesirable person. At common law, when there was a covenant against assigning or subletting without consent, the lessor’s right to refuse consent was absolute and he or she might arbitrarily refuse consent: Tredegar v Harwood [1929] AC 72 at 79, 82; [1928] All ER Rep 11. By s 144(1) of the Property Law Act 1958 (Vic), such a covenant is to be subject to a proviso that consent shall not be unreasonably withheld and that no fine shall be

payable for such consent: see Conveyancing Act 1919 (NSW) s 133B(1)(a); Property Law Act 1974 (Qld) s 121; Property Law Act 1969 (WA) s 80. The lease may exclude this proviso, except in the case of licensed premises. The operation of these provisions is further examined in Chapter 15.

Covenants not to assign or sublet [7.12] A covenant against assignment is not broken by the execution of an instrument that is void, for example, as an act of bankruptcy: Doe d Lloyd v Powell (1826) 5 B & C 308. Nor is the covenant broken by an equitable assignment: there must be an assignment at law: Naumberg v Executors of Albertson (1889) 3 QLJ 125; Gentle v Faulkner [1900] 2 QB 267; Hill v Short (1910) SALR 141; Martin v Coultas (1911) SALR 1; Macindoe v Wehrle (1913) 13 SR (NSW) 500; MacDonald v Robins (1954) 90 CLR 515 at 520. There is no breach if the assignment is by operation of law as opposed to by the voluntary act of the party: O’Mullane v Wilson (1856) VLT 86; Slipper v Tottenham and Hampstead Junction Railway (1867) LR 4 Eq 112. Since a covenant against assignment [page 230] is restricted in its operation to voluntary assignments, it is not broken when the lease passes on the death of the tenant, whether as part of his or her personal estate or under a specific bequest: Bryen v Reus [1961] SR (NSW) 396. In Marsh v Gilbert [1980] 2 EGLR 44 (Ch) the covenant was construed as being against assignment by the lessee, not trustees under a vesting order. The vesting of property resulting from the bankruptcy of the lessee is not a breach of a covenant against assignment: Re Riggs [1901] 2 KB 16; Solomon v Winkler [1922] SASR 428. As to the construction of a covenant not to share possession, see Tulapam Properties v De Almeida [1981] 2 EGLR 55 (QB). On the question whether a covenant not to assign the premises is broken by an assignment of part only, see Grove v Portal [1902] 1 Ch 727; Varley v Coppard (1872) LR 7 CP 505; Abrahams v MacFisheries Ltd [1925] 2 KB 18; Cook v

Rowe [1954] VLR 309; see also Chapter 15. The measure of damages for breach of such a covenant is discussed in [13.16].

Application of covenants to overholding [7.13] The overholding tenant will usually be taken to hold subject to all the covenants contained in the old lease in so far as they are applicable to the overholding term and providing the facts do not exclude an implied agreement to that effect: Digby v Atkinson (1815) 4 Camp 275; 171 ER 88; Wedd v Porter [1916] 2 KB 91; Cole v Kelly [1920] 2 KB 106; Ettelson v Caldwell [1946] VLR 262; Di Torio v Zollo [1977] VR 547 at 549–50: see also Elrington v Judd [1964–65] NSWR 493; 81 WN (Pt 2) (NSW) 257.

Covenants not to cause nuisance [7.14] Leases often contain covenants by which tenants undertake not to cause or create nuisance or annoyance to adjoining or neighbouring occupiers. This is particularly so in the case where the demised premises consist of a flat. The word ‘nuisance’ probably bears its legal technical meaning and therefore does not extend to all acts which might be popularly termed nuisances: see R v Slator (1881) 8 QBD 267 at 272. The type of legal nuisance to which the above covenant will no doubt most commonly apply is the wrongfully causing or allowing to escape of deleterious things, for example, fumes or noise, on to the premises of another so as to cause damage thereto, or substantial discomfort and inconvenience in the use thereof. Nevertheless, in some circumstances, ordinary and usual use of adjoining or nearby premises may constitute a nuisance, and while a substantial interference with the leased premises may amount to a breach of the covenant for quiet enjoyment it may not constitute a nuisance as it is not a necessary prerequisite to a finding that there has been a breach of the covenant for quiet enjoyment that the interference constitute a nuisance: see Sampson v Hodson-Pressinger [1981] 3 All ER 710 (CA); and see Southwark LBC v Mills [1999] 4 All ER 449 (HL); and as to the covenant for quiet enjoyment, see [8.4]. The

[page 231] reasonable and ordinary use of premises for the very purpose for which they were let is probably not conduct which is a nuisance or annoyance: Mercantile Investments Ltd v Australian Optical Co Ltd [1945] SASR 129. The use of a dwelling house in an ordinary and accustomed manner is not a nuisance, though it may produce more or less noise and inconvenience to a neighbour: Clarey v Principal and Council of the Women’s College (1953) 90 CLR 170. The tenant’s conduct must have some relation to his or her use of the premises: Curtis v Stutley [1950] ALR 888; [1950] SASR 211. But the conduct need not take place on the premises: Sullivan v Ison (SC(NSW), McClemens J, 11 February 1958, unreported). In Fraser v Dummett (1948) 67 WN (NSW) 129, it was held that it is possible for a lessee to be guilty of conduct which is a nuisance or annoyance to adjoining or neighbouring occupiers by failing to prevent conduct on the part of persons admitted to the premises which the lessee could have prevented. In Commercial General Administration Ltd v Thomsett [1979] 1 EGLR 62 the Court of Appeal held that the landlord must show that the tenant failed to take reasonable steps to prevent the nuisance to establish a breach of the covenant. As to conduct by the lessee’s family, see Blee v Kearney [1962] NSWR 198; 79 WN (NSW) 431. On the question of whether a landlord who places intolerable tenants on his or her property is liable for their behaviour which amounts to nuisance, see Smith v Scott [1972] 3 WLR 783; [1973] Ch 314. Otherwise a landlord would not be liable in nuisance for acts of its tenants unless it had specifically authorised them: see Hussain v Lancaster City Council [1999] 4 All ER 125 (CA). To constitute an ‘annoyance’ there must be something which will annoy reasonable people, having regard to the usage of the locality, and it is not sufficient that a particular person is in fact annoyed: Tod-Heatley v Benham (1888) 40 Ch D 80. The burning of rubbish may constitute an annoyance: Fleming v Hislop (1886) 11 App Cas 686, as may excessive noise: Re Saunderton Glebe Land [1903] 1 Ch 480, but it has been held that an obtrusive and vulgar advertisement was not an annoyance: Our Boy’s Clothing Co v Holborn Viaduct Co (1896) 40 Sol Jo 561. Where a by-law prohibited the use of any noisy instrument ‘so as to cause annoyance to the inhabitants of the

neighbourhood’, Lord Parker CJ said: ‘It seems to me that the proper approach is for the justices to ask themselves first: Was the noisy instrument so noisy as calculated to annoy? On that, the facts may speak for themselves, or it may be necessary for them to hear evidence, albeit of only one inhabitant …’: Raymond v Cook [1958] 3 All ER 407; [1958] 1 WLR 1098 at 1103; see also Dikstein v Kanevsky [1947] VLR 216; Platt v Ong [1972] VR 197 at 198; 46 ALJ 591. As to the meaning of ‘nuisance or annoyance’ see too, Downie v Taylor [1954] VLR 603. Evidence by adjoining or neighbouring occupiers of the alleged acts of nuisance or annoyance, although desirable, is not essential: Frederick Platts Co Ltd v Grigor [1950] 1 All ER 941. If the tenant is shown to be suffering the premises to be used for immoral purposes, then prima facie an order should be made against him or her: Yates v Morris [1951] [page 232] 1 KB 77. As to a covenant not to carry on an offensive trade, see Re Koumoudouros and Marathon Realty Co Ltd (1978) 89 DLR (3d) 551, where the premises had been a venue for topless waitresses and nude dancing. In some circumstances it may be necessary for a court to determine the meaning of words in a covenant, such as ‘offensive’, in the context of a particular lease (on the general principles for construing restrictive covenants according to the nature of the transaction and the nature of the locality, see Earl of Pembroke and Montgomery v Warren [1896] 1 IR 76 at 87); however, it is generally not necessary for a court to settle the precise literal construction before considering all the evidence in the light of the terms of the lease, the surrounding circumstances and the relevant law: see Re Koumoudouros at 556– 7.

Covenants for quiet enjoyment [7.15] The rights and liabilities arising out of a breach of a covenant for quiet enjoyment are discussed in [8.4] and [13.15]. As to the measure of

damages where there is a breach of this covenant, see [13.15]. A covenant for quiet enjoyment ‘is in reality no more than a contractual backing for the landlord’s obligation not to derogate from his grant’: per Nourse LJ in Ingram v Inland Revenue Commissioners [1997] 4 All ER 395 at 409.

Covenants to pay rates and taxes and outgoings [7.16] A covenant by the tenant to pay rates and taxes, except such as are expressly payable by the landlord is a usual covenant: Hampshire v Wickens (1878) 7 Ch D 555; Flexman v Corbett [1930] 1 Ch 672; Chester v Buckingham Travel Ltd [1981] 1 WLR 96; and see [9.3]. In Sunskill Investments Pty Ltd v Townsville Office Services Pty Ltd [1991] 2 Qd R 210 (FC) McPherson J reviewed the authorities on the nature of ‘rates and taxes’ and on covenants imposing an obligation to pay ‘rates and taxes’ on a tenant (see at 213–15). The statutory implied covenant imposing such an obligation was noted (under s 70(1) of the Real Property Act 1861 (Qld)) as was the ordinary rule of common law that this obligation fell on the tenant (Woodfall on Landlord and Tenant, [12.078]): see at 212 (per McPherson J) and 219 (per Williams J); and see [7.1]. As to the meaning of the word ‘rate’, McPherson J said (at 216): Textbooks and judgments are notably reticent about defining the term ‘rate’; but the underlying conception is of a levy to defray the expenses of local government imposed on all owners or occupiers of property in a particular area. Its essence is that it is calculated according to values of land or buildings in the locality rather than the cost of supplying the service to particular premises, so that each owner or occupier bears his rateable share of those expenses. Hence the word ‘rate’. Something of that conception is evident in Direct Spanish Telegraph Co Ltd v Shepherd [(1884) 13 QBD 202] and Bourne & Tant v Salmon & Gluckstein Ltd [[1907] 1 Ch 616] mentioned above. [page 233]

And, as to ‘taxes’, McPherson J said (at 217): The fire levy, which was introduced by the Fire Brigades Act Amendment Act 1983, takes the form of an annual contribution by the owners of prescribed properties. Being imposed by an Act of Parliament, it is of the nature of a tax: see R v Aylesbury (Inhabitants) (1846) 9 QB 261, 269; 115 ER 1273, 1277, and therefore also falls within the lessor’s covenant to pay rates and taxes … As to the construction of a covenant to pay rates and taxes in common form, see Lang v Asemo Pty Ltd [1989] VR 773 at 779 (FC); FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 (FC). It was held in the FAI case that the covenant to pay rates and taxes did not cast on the tenant the obligation to pay insurance premiums: see also [6.3] as to construction generally and, particularly, as to subsequent conduct of the parties. As to body corporate charges Gobbo J in Lang v Asemo Pty Ltd said (at 779): ‘Body corporate contributions are linked to ownership and would not normally be matters for which a tenant of the owner of a unit could normally be liable to the body corporate, whatever the position between the owner and its tenant.’ The lease will be read as is indicated by the process of construction adopted for various rates, taxes and outgoings provisions in Sunskill Investments Pty Ltd v Townsville Office Services Pty Ltd. As to covenants with respect to the payment of land tax and the incidence and calculation of land tax, see Centrepoint Custodians Pty Ltd v Lidgerwood Investments Pty Ltd [1990] VR 411; see also Tooth & Co Ltd v Newcastle Developments Ltd (1966) 116 CLR 167 at 170–1; Shell Co of Australia Ltd v Lang Estate Pty Ltd [1975] 2 NSWLR 63 at 72–3; compare Mansfield v Relf [1908] 1 KB 71. In City Parking Pty Ltd v Ausvest Holdings Pty Ltd (1999) V ConvR ¶54-597 (CA) it was held that a covenant excluding land tax from the tenant’s obligations to pay all charges etc imposed a correlative obligation on the landlord. A covenant to pay ‘all municipal and other rates and charges’ was, in 112 Acland Street Pty Ltd v ANZ Banking Group Ltd (2002) 4 VR 372 (CA), held not to cover exactions by parliament, such as land tax. Lease covenants providing for the payment of land tax may provide for payment on ‘a single holding’ basis: see Aqua Jet Car Wash Pty Ltd v Buraan Pty Ltd [2004] NSWSC 1087; and, in this respect note, by way of example, the position under the Victorian retail leases legislation,

when ‘retail premises’ leases could impose obligations on a tenant to pay land tax: see Croft, Hay and Virgona, Retail Leases Victoria, [150-020]. The expression ‘outgoings’ has been commonly used for a considerable period of time, as indicated in the judgment of McPherson JA (with whom Derrington J agreed) in Lend Lease Financial Planning Ltd v Southcap Pty Ltd (CA(Qld), 2 June 1998, unreported (BC 9802393)) (at BC 9 and 10): Other matters were covered by the description ‘outgoings’. It is an expression that has been in common use over the last 150 years in leases and in contracts for sale of land. In those contexts there are literally dozens of reported decisions in England, as well as some in Australia, in which its content has been considered in relation to particular charges. In covenants in leases, it is commonly tacked on to a provision imposing on [page 234] the lessee an obligation to pay all rates and taxes in respect of the premises occupied. In Tubbs v Wynne [1897] 1 QB 74, 78, it was said to be ‘not very easy’ to collect any definite principle from the decisions on such covenants, while adding that they at least established that ‘outgoings’ is ‘the largest word which can be used’. In Fisher v Oborn [1968] 3 NSWR 447, 450, Else Mitchell J, speaking in the context of sales of land, said that ‘outgoings’ were not limited to moneys charged on land, nor to periodical payments of a recurring character. In sales of land (of which sales or assignments of leases are a variety), Voumard on The Sale of Land, 2nd ed, at 342, says that ‘outgoings’ can be used to indicate expenses incurred or payable in respect of or as incidental to the ownership of property. In a contract of sale, the author continues: … the term normally refers, in the absence of an express provision to the contrary, to expenses payable in respect of the property actually comprised in the contract, and not in respect of a larger property of which, in the hands of the vendor, it may have formed part.

The expression ‘outgoings’ continues to be used in covenants in leases. The Australian Encyclopaedia of Forms and Precedents, 2nd ed, vol 8, at 48–50, contains an extended note of decisions concerning its application to particular expenses, as well as offering several forms of precedent in which it appears. See, for example, Forms 235 and 236; and also the note in vol 8, 3rd ed at §[90], as well as the equivalent English Encyclopaedia, 4th ed, vol 11, at 65–74. In the light of this extensive current and past usage by conveyancers, it is quite out of the question now to suppose that ‘outgoings’ has no meaning at all, or one that is so indefinite or imprecise as to be devoid of content. In instances of this kind, the courts have no alternative but to arrive at a meaning for the expression based on common usage and, so far as they assist, reported decisions on the subject. What is clear is that, if a lease says no more than does the letter of 23 June, which is that the tenant is to pay ‘outgoings’, an agreement to that effect is not void for uncertainty or for failure to agree on an essential matter. What was also submitted below was that an element of uncertainty resulted from the agreement here to pay a proportion of outgoings based on the area of the tenancy. However, the area of the tenancy is readily ascertainable and has in fact been ascertained as being 366 sqm. The attempt on appeal to complicate the question by referring to the provision for eight undercover car bays is, in my respectful opinion, not sustainable. Pincus JA expressed some reservations in relation to the certainty of the outgoings agreement but ultimately agreed with McPherson JA on the basis that the court could enforce the agreement even if it needed to be ‘fleshed out’ to some extent. His honour said (at BC 12): In my opinion there is substance in these contentions and, more generally, in the view that what the parties agreed about reimbursement of outgoings left considerable room for reasonable argument. There was no absolutely certain agreement reached as to what outgoings of the landlord should be reimbursed, nor as to the basis of apportionment. Nevertheless I am of opinion that the learned primary judge’s

decision on this question was correct. My principal reason is that especially since the High Court’s decision in Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 courts have been inclined to avoid holding what the parties appear to have regarded as an agreement to be unenforceable and have striven [page 235] to ascribe meaning to language employed by the parties, so long as it is not ‘so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention’. Scammell & Nephew Ltd v Ouston [1941] AC 251 at 268 quoted with approval in the Upper Hunter case at 437. A strong example of this approach is to be found in the decision of the New South Wales Court of Appeal in Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326. Among the difficulties which a majority of the Court was able to overcome in that case was ascribing a meaning to the expression ‘percentage profit margin’, which was held to contemplate a ‘reasonable commercial profit’. It should also be noticed that one of the clauses in the contract which was held to be sufficiently certain said that the parties ‘shall confer and shall establish’ prices for future years (338). Not a great deal can be achieved, however, by pointing to rather vague expressions which have been held to pass muster, in reported litigation the Court must exercise a judgment as to whether what are said to be uncertainties or incompletely agreed terms throw up such intractable problems as to force the conclusion which I suggest the Court strives to avoid, especially when the parties have acted on the basis that an agreement has been made. An old example of this approach in a landlord and tenant case, is Oxford v Provand [1868] LR 2 PC 135. I have noted what Young J, in Arjay Investments Pty Ltd v Morrison’s Outdoor Catering Pty Ltd (Supreme Court of New South Wales,

unreported, 1 May 1995), called ‘guidelines’ used in deciding whether there has been a binding agreement. His Honour said that one of the guidelines is that ‘where one has a lease of commercial premises one normally expects that the lease will only come into existence after there has been an exchange of formal documents’, and another is that if ‘the parties have in mind the preparation of a more formal document by a solicitor, one tends to think that they did not intend to be bound until the formal document was produced and exchanged’ (3). For myself I would respectfully urge that such prima facie rules be used, if at all, cautiously. Experience, at least in this State, suggests that it is not uncommon that rather informal agreements for leases of commercial premises, particularly short leases, are made and acted upon (as in the present case) and I see no good reason why courts should be reluctant to enforce such agreements. If necessary courts must ‘supplement and flesh out broad agreements’ per Young J in the Arjay Investments case, at p 3. See also [4.1]. As a matter of construction of the lease provisions, and any appendices, ‘rent’ may or may not include ‘outgoings’: see Hall v National Mutual Life Nominees Ltd [1999] ANZ ConvR 301 (CA(NSW)); and see [11.1], as to the nature and characteristics of rent.

[page 237]

8 Implied Covenants Covenants express or implied [8.1] Covenants are either express or implied: generally, as to the implication of terms, see [6.3]. The same rules apply with respect to implying an obligation against the landlord in favour of the tenant as apply with respect to implying an obligation against the tenant in favour of the landlord: McAuley v Bristol City Council [1992] QB 134 at 147 (per Ralph Gibson LJ). The former are discussed in Chapters 7, 9, 10 and 11. The latter are of two kinds. In the first place, a covenant may be implied by the application of the rules which govern the implication of terms of contracts generally. It has been said that an implied covenant is held to arise when, and only when, it appears that without it the intention of the parties with regard to the main object of the bargain would be frustrated: Moore & Scroope v State of Western Australia (1907) 5 CLR 326 at 333–4 (per Griffith CJ), although this proposition has been rejected as unnecessarily strict recently in the context of the covenant for quiet enjoyment: Spathis v Havane Investment Co Pty Ltd [2002] NSWSC 304 at [150]; Gordon v Lidcombe Developments Pty Ltd [1966] 2 NSWR 9 at 14–16. The implication will be made if, without such a term, it is impossible to give business efficacy to the contract made: Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P&CR 10; Dikstein v Kanevsky [1947] VLR 216 at 221; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 391–2; Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493; Codelfa

Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; and see [6.3]. In Liverpool City Council v Irwin [1977] AC 239, Lord Denning MR considered that a term should be implied into a lease where, in all the circumstances of the case, it was reasonable to do so. The other two members of the Court of Appeal, Roskill and Ormrod LJJ, however, expressly disagreed with that view. In their opinion, a covenant or a term should not be implied into a lease unless it is necessary to give effect to the [page 238] agreement embodied in the lease. See also the speeches of the members of the House of Lords in this case in [1977] AC 239; particularly the speech of Lord Wilberforce at 254–5 (to which reference was made in McAuley v Bristol City Council at [1992] QB 134 at 146): ‘… such obligation [an obligation to do repairs] should be read into the contract as the nature of the contract itself implicitly requires, no more, no less; a test in other words of necessity’. As the Court of Appeal observed in McAuley in considering Liverpool City Council in the House of Lords and this speech (at [1992] QB 134 at 146 per Ralph Gibson LJ, with whom the other members of the court agreed on this point): ‘The court does not have power to introduce into contracts a term merely upon the ground that the court thinks it reasonable’. See also Crédit Suisse v Beegas Nominees Pty Ltd [1994] 4 All ER 803 at 819. A frequently quoted dictum of the High Court as to the conditions necessary to ground the implication of a term is that of the majority in GP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26: ‘(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract’. The requirement that the term to be applied must ‘go without saying’ was recently emphasised in P&S Amusements Ltd v Valley House Leisure Ltd [2007] EWHC 1494. Terms will not readily be implied: Heimann v Commonwealth (1938) 38 SR

(NSW) 691 at 695; Karaggianis v Malltown Pty Ltd (at 392); Codelfa Construction Pty Ltd v State Rail Authority of NSW; and see [6.3]. For instance, in Huggett v Miers [1908] 2 KB 278; [1908–10] All ER Rep 184, the Court of Appeal rejected a submission that the landlord was under an implied obligation to light the staircase of the building let out in separate floors. There is also general limitation in the rule that in the absence of an express covenant no warranty of fitness of the premises for any particular purpose is implied by law even where it was known to the lessor, when the lease was entered into, that the lessee was leasing the premises for the exclusive purpose of using them in some particular way: Bradford House Pty Ltd v Leroy Fashion Group Ltd (1983) 46 ALR 305; and see Cruse v Mount [1933] 1 Ch 278, and [8.6]. Subject to the other provisions of the lease, the situation may be no different even where the lease contains a covenant by the lessee to use the premises in a specified way: see Bradford House v Leroy Fashion. In that case the argument failed because it was held that another covenant, properly construed, imposed upon the lessee an obligation to prevent damage to the floor of the premises by heavy machinery, plant and equipment even though such machinery, plant and equipment was claimed to be essential to the agreed use, namely that of a printing business. There are no fixed categories of implied covenants; in every case the question whether the implication ought to be made will depend upon the particular facts. The [page 239] range of possible covenants is wide, provided only that the stringent rules governing implication are satisfied. So a term may be implied for the use of a lift: Dikstein v Kanevsky (followed in Karaggianis v Malltown Pty Ltd, above, for the maintenance and operation of lifts and escalators), or for the maintenance of a supply of electricity to a kiosk: Jenkins v Levinson (1929) 29 SR (NSW) 151. As to the distinction between an implied covenant to keep a common stairway safe, and an implied covenant to keep such a stairway in good repair, see Liverpool City Council v Irwin [1976] QB 319 at 330–2, 337–8 and 343–4.

Implied covenants of this kind may be regarded as implied by necessary implications. The second kind of implied covenant is that which the law regards as arising merely by reason, either of the relationship of landlord and tenant simpliciter, or of that relationship in respect of land or premises of a particular type: O’Keefe v Williams (1910) 11 CLR 171 at 220. These covenants are considered in [8.4]–[8.9].

Covenants in law [8.2] Covenants may be held to arise by reason merely of the existence of the relationship of landlord and tenant. Unlike covenants implied as a matter of the construction of the particular lease, covenants which arise by reason of the relationship of landlord and tenant (sometimes called ‘covenants in law’) do not depend for their implication or for their terms upon an examination of the language of the lease and the surrounding circumstances; the basis of the implication is the relationship itself, and the covenant will be one of those covenants whose implication and terms result from the operation of general rules of law: Birmingham, Dudley & District Banking Co v Ross (1888) 38 Ch D 295 at 308 (per Cotton LJ); Baynes v Lloyd [1895] 1 QB 820 per Lord Russell CJ, affirmed [1895] 2 QB 610. There are only five such covenants, two on the part of the landlord and three on the part of the tenant. These ‘covenants in law’ are considered in [8.4]–[8.9]. They are as follows: (i) a covenant by the landlord for quiet enjoyment; (ii) a covenant by the landlord that a furnished house is fit for habitation; (iii) a covenant by the tenant to use and deliver up in a tenant-like manner; (iv) a covenant by an agricultural tenant to cultivate in a ‘husband-like’ or proper manner; (v) a covenant by the tenant to deliver up possession at the expiration of the term. The first, third and fifth covenants arise from the very relationship of landlord and tenant, whatever the nature of the demised land or premises and to a greater or lesser extent flow from the more general implied covenant not

to derogate from the grant: see Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 at 218–19; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 392–4; Browne v Flower [1911] [page 240] 1 Ch 219. The other two covenants are implied only in the case of leases of land or premises of a particular kind.

Exclusion by express covenant [8.3] A covenant in law which would otherwise be implied may be excluded by reason of the fact that the lease itself makes provision in the matter. So an express covenant for quiet enjoyment will prevent the implication of the covenant for quiet enjoyment which would otherwise be implicit in the demise: Miller v Emcer Products Ltd [1956] Ch 304; 1 All ER 237; and see Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 at 218. An express covenant will operate to displace an implied covenant only if they both cover the same ground; that is to say, only if they are in pari materia: Miller’s case [1956] Ch 322. An express covenant to repair and the implied covenant to use in a tenant-like manner are not concerned with the same matter; accordingly, the former does not exclude the latter: City of Ballarat v Waller [1924] VLR 115.

Quiet enjoyment [8.4] The implied covenant for quiet enjoyment is not an absolute covenant protecting a tenant against eviction or interference by anybody, but is a qualified covenant protecting the tenant against interference with the tenant’s quiet and peaceful possession and enjoyment of the premises by the landlord or persons claiming through or under the landlord.

The basis of it is that the landlord, by letting the premises, confers on the tenant the right of possession during the term and impliedly promises not to interfere with the tenant’s exercise and use of the right of possession during the term. I think the word ‘enjoy’ used in this connexion is a translation of the Latin word fruor and refers to the exercise and use of the right and having the full benefit of it, rather than deriving pleasure from it. [Kenny v Preen [1963] 1 QB 499 at 511; [1962] 3 All ER 814.] The covenant imposes an obligation on the landlord to put the tenant into possession and allow the tenant to remain peacefully in possession during the term of the lease free from interruption: Jaeger v Mansions Consolidated Ltd (1903) 87 LT 690; Markham v Paget [1908] 1 Ch 697. The covenant is prospective in nature and amounts to an obligation on the landlord not to do anything after the date of the grant which substantially interferes with the tenant’s occupation; the covenant does not provide a remedy where the state of affairs existed at the date of grant of the lease: Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456; Southwark London Borough Council v Baxter [1999] 1 WLR 939; AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd [2007] VSC 73. A merely temporary disturbance of enjoyment which does not interfere with title or possession is not a breach of the covenant: Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456 at [16]; Manchester, Sheffield & Lincolnshire Railway Co v Anderson [1898] 2 Ch 394 at 401. [page 241] The covenant may be breached where there is substantial interference with the ordinary and lawful enjoyment of the premises by the tenant occurring by reason of a negligent act or omission on the part of the landlord (Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15) or by the landlord’s successor in title who knowingly authorises acts (by another of his or her tenants) which will cause disturbance to a tenant, to the extent that they interfere with the reasonable enjoyment of the premises: Sampson v Hodson Pressinger [1981] 3 All ER 710. A recent illustration is Hunte v E

Bottomley & Sons Ltd [2007] EWCA Civ 1168; The Times, 21 November 2007. In this case the lease of café premises contained a right of way over the estate roads leading to a main road for customer access. This right of access was subject to the tenant observing the landlord’s regulations relating to the direction of traffic. The landlord closed the access road from the main road and erected a wall across it, directing the traffic to a different access, justifying his actions based on the proviso to the grant of the right of way. The Court of Appeal held that this action by the landlord amounted to a breach of the covenant for quiet enjoyment. There is no requirement that the tenant prove negligence on the part of the landlord: AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd [2007] VSC 73. If the law were otherwise, the covenant would in most cases be redundant. On this latter point, cf Martins Camera Store Pty Ltd v Hotel Mayfield Ltd [1976] 2 NSWLR 15 at 24 per Yeldham J. These decisions are based upon what might be termed the usual covenant for quiet enjoyment. Nevertheless, it is the words of the covenant that regulate the rights of the parties and a covenant for quiet enjoyment may be drafted so widely as to amount to a guarantee that no one will interrupt the tenant’s enjoyment of the premises, or it may be limited, even to the extent that the landlord is to be liable only for his own acts, and their consequences: see Celsteel Ltd v Alton House Holdings Ltd (No 2) [1986] 1 WLR 666 at 672 (appealed on other ground, [1986] 1 All ER 608). This case raised for consideration a qualified or restrictive covenant for quiet enjoyment, the landlord having covenanted only in respect of ‘interruption by the Landlord or any person lawfully claiming through under or in trust for the Landlord’. It was held that a covenant in this form does not protect against acts by the landlord’s predecessors in title or their grantees of any rights or interests (at 604). See also O’Leary v Islington London Borough Council (1983) 9 HLR 81 where it was held that there is no implied term obliging a landlord to enforce a covenant not to cause nuisance to neighbours who are also the landlord’s tenants. The proper remedy is an action in tort for nuisance by the aggrieved neighbour against the tenant. The word ‘demise’ imports a covenant for quiet enjoyment: Moore and Scroope v State of Western Australia (1907) 5 CLR 326 at 333. A question which has been the subject of considerable discussion is whether such a covenant is to be implied in a written lease which is not under seal and even in the case of

a verbal letting: Roberts v Birkley (1888) 14 VLR 819 at 824. In Hart v Windsor (1844) 12 M & W 68 at 85; 152 ER 1114 [page 242] at 1121; [1843–60] All ER Rep 681 Parke B, delivering the judgment of the Court of Exchequer, said: It is clear that from the word ‘demise’, in a lease under seal, the law implies a covenant, in a lease not under seal, a contract, for title to the estate merely, that is, for quiet enjoyment against the lessor and all that come in under him by title, and against others claiming by title paramount during the term; and the word ‘let’, or any equivalent words (Shepp Touch, p 272), which constitute a lease, have no doubt, the same effect, but not more. In Bandy v Cartwright (1853) 8 Ex 913; 155 ER 1624, it was held that a covenant for quiet enjoyment was implied in the case of a demise by parol, and in Hall v City of London Brewery Co Ltd (1862) 2 B & S 737; 121 ER 1245, it was held that such a covenant was to be implied in the case of a written lease not under seal. In Baynes & Co v Lloyd & Sons [1895] 1 QB 820 at 826, Lord Russell CJ referred to the two decisions last cited and laid it down that the law imported a covenant for quiet enjoyment in all cases where the relation of landlord and tenant was established by instrument under seal and imported a contract to the same effect where the instrument was not under seal. On appeal, however, the Court of Appeal expressed the opinion that the weight of authority was in favour of the view ‘that a covenant in law is not implied from the mere relationship of landlord and tenant, but only from certain words used in creating the lease: [1895] 2 QB 610 at 615’. In Budd-Scott v Daniell [1902] 2 KB 351 a divisional court was concerned with a tenancy agreement which used the words ‘agrees to let’. It was held that the true principle was that the implied covenant for quiet enjoyment depended on the relation of landlord and tenant and not on the use of the word ‘demise’, the court declining to follow the view expressed by the Court of Appeal in Baynes & Co v Lloyd & Sons. The authorities were considered by Swinfen

Eady J in Markham v Paget [1908] 1 Ch 697, and once again it was held that the use of the word ‘demise’ was not essential to the implication of the covenant. It appears to have been assumed in Lavender v Betts [1942] 2 All ER 72 that a covenant for quiet enjoyment was to be implied from the mere relationship of landlord and tenant. Finally, in 1963 the Court of Appeal adopted the view expressed in Budd-Scott v Daniell and held that a covenant for quiet enjoyment was to be implied in the case of what was evidently a verbal weekly tenancy: Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814. The covenant will not be implied where there is nothing more than an agreement for a lease: Pinn v Barbour (1870) 1 VR (L) 136. In Mockbell v Hughes (1909) 9 SR (NSW) 304, it was held that in the deed of lease in question there was an implied covenant by the lessor to give immediate and full possession. The common law implication that ‘he or she who lets agrees to give possession’ is not excluded by a statutory provision whereby certain covenants are to be implied in every instrument of lease of land under Torrens legislation: Renshaw v Moore (1917) 34 WN (NSW) 95. The covenant is independent of the covenant to pay rent; thus nonpayment of rent does not remove the obligation on the landlord to give quiet enjoyment, even where [page 243] the obligation is expressed to be subject to the tenant complying with the provisions of the lease: Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185. Where a breach occurs, recent cases have decided that in some circumstances the tenant may be able to treat the lease as having been repudiated and may leave the premises without liability for further rent or other obligations under the lease: Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1; Norden v Blueport Enterprises Ltd [1996] 3 NZLR 450. A covenant by a lessor for quiet enjoyment is not the same thing as a covenant that he or she will not grant a later lease to any other person. Since the lessor has already parted with the estate demised, any attempt by him or her to dispose of it, or any part of it, to another person would be futile. There is, therefore, no necessity to imply a covenant not to do such a futile act.

Whether the entry of a person claiming under such an ineffectual attempt would operate as a breach of the implied covenant for quiet enjoyment is a different question: Moore and Scroope v State of Western Australia (1907) 5 CLR 326 at 334. The position of the Crown as lessor in relation to the implied covenant for quiet enjoyment was considered in O’Keefe v Williams (1910) 11 CLR 171 and Commissioners of Crown Lands v Page [1960] 2 QB 274; 2 All ER 726. A covenant of quiet enjoyment is not a guarantee against all disturbance by the landlord. In Goldmile Properties Ltd v Lechouritis [2003] 2 P & CR 1 the lease also contained a covenant by the landlord to use its reasonable endeavours to keep the building in repair. Pursuant to this repair clause the landlord undertook building works over a six-month period which involved the erection of scaffolding and sheeting to the outside of the building. This had the effect of seriously disrupting the tenant’s restaurant business. The English Court of Appeal held that there was no breach of the covenant of quiet enjoyment on the basis that it was sufficient under the covenant that the landlord took all reasonable steps to avoid disturbing the tenant rather than all possible steps. It is sometimes said that this covenant provides the tenant with a legal remedy in 11 cases of harassment. Some instances of harassment are undoubtedly within the scope of the covenant: thus, for example, the covenant has been held to be breached where the landlord removed the doors and windows to the premises and cut off the gas and electricity supplies in order to induce the tenant to vacate the premises: Lavender v Betts [1942] 2 All ER 72; Perera v Vandiyar [1953] 1 All ER 1109; Drane v Evangelou [1978] 1 WLR 455. Unfortu-nately, however, this statement is too broad-ranging to be accurate; while some acts of harassment undoubtedly breach the covenant of quiet enjoyment, other acts are outside the scope of the covenant. There are two limitations on the scope of the implied covenant. First, the covenant does not amount to a guarantee of title. The landlord is not liable for acts of his or her predecessors-in-title or grantees of rights or interests created by predecessors-in-title: Celsteel Ltd v Alton House Holdings Ltd (No 2) [1986] 1 WLR 666. The landlord

[page 244] is only liable for a breach of the covenant if he or she personally disturbs the tenant’s peaceful possession or authorises a third party claiming under him or her to commit a disturbance: Sanderson v Mayor of Berwick-on-Tweed (1884) 13 QBD 547; Malzy v Eichholz [1916] 2 KB 308 at 318. Thus, for example, if the landlord lets premises adjoining the tenant to other persons who engage in unruly behaviour and disturb the tenant’s peaceful possession, there will only be a breach of the implied covenant if the tenant can prove that the landlord either authorised or encouraged the other persons to commit the disturbance. In the absence of such authorisation or encouragement, the tenant’s only remedy would be to sue the unruly persons in nuisance: Smith v Scott [1973] Ch 314; Mowan v Wandsworth London Borough Council [2001] BLGR 228. Second, there is no remedy under the implied covenant where the tenant’s possession is disturbed by a person claiming through title paramount: Jones v Lavington [1903] 1 KB 235 (CA); Kenny v Preen [1963] 1 QB 499. The most common illus-tration of this arises in the case of subleases. Take the case where X leases premises to Y and Y sublets the premises to Z. If Y breaches one of the covenants of the head lease and X exercises a right of re-entry under the express or implied terms of the lease, the sublease to Z will be determined automatically and the remedy of quiet enjoyment will be regarded by the courts as inoperative. Historically there was a further limitation on the scope of the implied covenant in that it applied only in cases of direct physical interference with the tenant’s peaceful possession: Browne v Flower [1911] 1 Ch 219; Gordon v Lidcombe Developments Pty Ltd [1966] 2 NSWR 9. In Browne v Flower, where the tenant of the upper floors of a building obtained the landlord’s permission to erect a staircase outside the plaintiff tenant’s flat on the ground floor, the fact that this constituted an invasion of privacy was held to be irrelevant to the covenant of quiet enjoyment and a remedy for breach of this covenant was refused. However, the House of Lords in Southwark London Borough Council v Baxter [2001] 1 AC 1; [1999] 4 All ER 449; [1999] 3 WLR 939 expressed the view that a substantial physical interference is not required. The court held that regular excessive noise is capable of amounting to a breach of the

covenant. This view has recently been accepted by Australian courts: Barton v Lantsbery (2004) V ConvR ¶58-577; Spathis v Havane Investment Co Pty Ltd [2002] NSWSC 304 at [151]. A landlord is not entitled to re-enter to prevent an unlawful act on the premises by the tenant other than in accordance with the proviso for re-entry and will otherwise commit a trespass and a breach of the covenant for quiet enjoyment: Slater v Hoskins [1982] 2 NZLR 541. Disconnection of a fire sprinkler system may amount to a breach of the covenant for quiet enjoyment where the result would be to increase the fire hazard significantly or to put the tenant at risk of considerable damage to its property: Kohua Pty Ltd v Tai Ping Trading Pty Ltd (1985) 3 BPR 9705. On the question of the availability of remedies in the case of breach of the covenant for quiet enjoyment, see [13.15]. [page 245] As to rights created with respect to common areas of shopping centres, see Arndale (Kilkenny) Pty Ltd v Gaetjens (1970) 44 ALJR 434 and Ergopax Pty Ltd v Meerkin and Appel (SC(Vic), Hedigan J, 12 December 1995, unreported) at 77–9. Particularly helpful in this respect is the judgment of Powell J in Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 at 11,177–8: The covenant for quiet enjoyment operates to secure the tenant, not merely in the possession, but in the enjoyment, of the subject premises and any rights appurtenant thereto, for all usual purposes; and where the ordinary and lawful enjoyment of the premises (see, for example, Owen v Gadd [1956] 2 QB 99; 2 All ER 28; Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814) or of the rights appurtenant thereto (see Dikstein v Kanevsky [1947] VLR 216; Dowse v Wynyard Holdings Ltd [1962] NSWR 252; Arndale (Kilkenny) Pty Ltd v Gaetjens [1970] 44 ALJR 434; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381) is substantially interfered with by the acts or omissions of the landlord or those lawfully claiming under him, the covenant is broken, even if

neither title to, nor the possession of, the demised premises, or of those rights, is otherwise affected. Whether or not any interference is substantial is a question of fact. It is my view that the conversion of what had formerly been a free car park, not subject to any time limit, into a ‘commercial operation’ did substantially affect the activities of ‘the merchants’, and of those who had been accustomed to use the car park, it following that, unless the conversion represented no more than the imposition of ‘reasonable rules and regulations with regard thereto’ (cl M2), it amounted to a breach of the covenant for quiet enjoyment. I am unable to accept Mr Wood’s submission that no more was involved than the exercise by the plaintiff of the power conferred on it by cl M2. I say this for the following reasons: (1) Despite the attempt to describe the ‘commercial operation’ of the car park as ‘a joint venture’ between the plaintiff and Secure Parking, it is clear enough that what occurred was that the plaintiff granted to Secure Parking ‘a licence’ to operate the car park as ‘a parking station’ and that it yielded control of the car park to Secure Parking; (2) Despite the plaintiff’s attempt to deny that this was so, it is clear that at least one of the objects which the plaintiff sought to achieve in doing so was to turn a profit for itself; (3) As a result, the character, and use, to which the car park had formerly been put was substantially altered (see, for example, Arndale (Kilkenny) Pty Ltd v Gaetjens (1970) 44 ALJR 434 at 436 per Windeyer J); (4) Further, as it appears as if the provision, and maintenance, of a free car park was a condition of the original building approval, and, as it also appears — despite the submissions of Mr Wood to the contrary — that the establishment and operation of ‘a parking station’ required both development approval and a licence under Ordinance 34b, neither of which at any relevant time had been obtained, the illegal activities involved in the ‘commercial operation’, in my view, could hardly merit the description of

‘reasonable rules and regulations’ for the use of the car park. [page 246]

Implied covenant of non-derogation from grant by the landlord [8.5] There is a general principle of real property law that a grantor must not derogate from his or her grant. This principle is variously referred to as a maxim, a presumption of law, an implied obligation, an implied contract and an implied covenant: see, for example, Myers v Catterson (1889) 43 Ch D 470 at 482–4; Project Blue Moon Pty Ltd v Fairway Trading Pty Ltd [2000] FCA 127. The meaning of the principle has been explained in various ways. Bowen LJ stated in Birmingham, Dudley & District Banking Co v Ross (1888) LR 38 Ch D 295 at 313 that ‘a grantor having given a thing with one hand is not to take away the means of enjoying it with the other’, while Stirling J stated in Aldin v Latimer, Clark, Muirhead & Co [1894] 2 Ch 437 at 444 that: Where a landlord demises part of his property for carrying on a particular business, he is bound to abstain from doing anything on the remaining portion which would render the demised premises unfit for carrying on such business in the way in which it is ordinarily carried on. See also Lawson v Hartley-Brown (1995) 71 P&CR 242 at 255. According to Elias J in Nordern v Blueport Enterprises Ltd [1996] 3 NZLR 450, the doctrine ‘merely embodies in a legal maxim a rule of common honesty’. The doctrine can best be understood by way of illustrations. In Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207, the New South Wales Court of Appeal held that a reduction in security for a tenant caused by demolition work undertaken by the landlord around the demised premises may constitute a breach of the implied covenant. In Cable v Bryant [1908] 1 Ch 259, where the landlord had granted a lease of a stable, it was held that he

could not derogate from his grant by erecting hoardings which adversely affected the supply of ventilation to the stable. Similarly in Aldin v Latimer, Clark, Muirhead & Co it was held to be a derogation from grant where the landlord had leased property to the tenant for the purpose of carrying on a timber business and the landlord’s successors-in-title erected equipment on adjoining land for the purpose of supplying electricity to neighbouring districts which interfered with the access of air to the drying sheds used in the timber business. Derogation from grant was also found to exist in Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1; [1997] Q ConvR ¶54-485, where the plaintiff’s business, the manufacture and sale of new and repaired canvas goods, was disrupted by a later tenant of adjoining premises, which used the premises for making timber staircases, involving the use of power saws, sanders and spindle planers. The derogation from grant was based on the court’s finding that significant quantities of sawdust entered the plaintiff’s premises; and the plaintiff’s employees were constantly subjected to considerable noise, leading to increased absences from work due to headaches and [page 247] respiratory illnesses. Conversely in Carpet Fashion Pty Ltd v Forma Holdings Pty Ltd [2004] NSWCA 150 the court rejected the claim for non-derogation of grant where the lessor of a shopping centre changed the tenant mix and types of products sold at the centre during the course of the lease to the financial detriment of the tenant. In Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] 1 Ch 200, the landlord leased certain premises to a tenant for the purposes of an explosive magazine. Pursuant to legislation, the tenant’s licence for storing explosives would be withdrawn if buildings were erected on the landlord’s adjoining property within a certain distance from the magazine. The landlord later leased the adjoining land to another tenant for different purposes, and that tenant proceeded to erect buildings within the prohibited distance of the explosive magazine. It was held that a breach of the landlord’s obligation not to derogate from his grant had occurred. The traditional view is that the obligation will not be breached where the

landlord lets adjoining premises for a purpose which competes with the business carried on by another tenant of the same landlord, even if economic detriment can be proved: Port v Griffith [1938] 1 All ER 295; Romulus Trading Co Ltd v Comet Properties Ltd [1996] EGLR 70. This proposition has been recently qualified by the English courts. While it is true that non-derogation will not lie in cases which involve only economic detriment as a result of a lease to a competitor, it may lie where the rented premises is not just a separate and independent retail unit but is a shop in a shopping arcade or mall. This has been justified on the basis that the court must consider the obligations which were implicit in the use for which the landlord had designed the arcade and for which the tenant had taken the lease of the unit: Oceanic Village Ltd v Shirayma Shokussan Co Ltd [2001] EGCS 162; Petra Investments Ltd v Jeffrey Rogers PLC [2001] L&TR 451. In addition, no remedy will lie where the use to which the tenant puts the demised premises is particularly sensitive, and the landlord was unaware of the sensitivity at the time he or she granted the lease: Robinson v Kilvert (1889) 41 Ch D 88. It is clear from all these authorities that to amount to derogation from grant, the interference must be substantial: Carpet Fashion Pty Ltd v Forma Holdings Pty Ltd (2005) NSW ConvR 56-116; Nordern v Blueport Enterprises Ltd [1996] 3 NZLR 450 at 455; Mount Cook National Park Board v Mount Cook Motels Ltd [1972] NZLR 481. In Bankstown Trotting Recreational Club Pty Ltd v Chisholm (2016) 18 BPR 36,219; 218 LGERA 428 the Court of Appeal reaffirmed that the application of the doctrine depends on the scope and terms of the relevant grant: at BPR 36, 231–2 and LGERA 442–3, [82]–[89] per Beazley P, with whom Bathhurst CJ and Sackville AJA agreed. The principle of non-derogation from grant partially overlaps in its operation with the covenant of quiet enjoyment. Conceptually, the two principles are different. As stated by Young CJ in Eq in Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456 at [27]: ‘The difference between a covenant for quiet enjoyment and an obligation not to derogate from the grant essentially is that the former springs [page 248]

from the relevant instrument, but the latter from the duty imposed on the grantor in consequence of the relation which he has taken upon himself towards the grantee.’ The real distinction appears to be that non-derogation from grant is concerned with use of the retained part which makes the demised premises less fit for the purpose for which they were let, while the covenant for quiet enjoyment is concerned with the enjoyment of the premises and any disturbance of such enjoyment: see Woodfall’s Law of Landlord and Tenant, [11,083] and [11,266]–[11,301]. Young CJ in Eq concluded in Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456 at [28] that the differences between the two are minimal. For a recent case illustrating the closeness of the two concepts, see Hunte v E Bottomley & Sons Ltd (discussed at [8.4]), where the same action was found to constitute a derogation from grant as well as a breach of the covenant of quiet enjoyment.

Covenant of fitness by landlord of furnished house [8.6] Where a house or apartment is let furnished, there is an implied covenant by the lessor that the premises are fit for habitation at the commencement of the tenancy. For the establishment of this salutary rule the law owes something to the fastidiousness of Lady Marrable and the resolution of her husband. In September 1842 Sir Thomas took a lease of a furnished house at Brighton for five or six weeks at the weekly rent of eight guineas. Possession was taken, and three days later the following note was dispatched to the landlord’s wife: ‘Lady Marrable informs Mrs Smith, that it is her determination to leave house in Brunswick Place as soon as she can take another, paying a week’s rent, as all the bedrooms occupied but one are so infested with bugs that it is impossible to remain.’ The premises were evacuated accordingly, whereupon the landlord sued for five weeks’ rent. Sir Thomas vigorously defended the action, calling evidence to show that the house was greatly infested by bugs, and the Court of Exchequer held that he had been fully justified in abandoning the premises: Smith v Marrable (1843) 11 M & W 5; 152 ER 693:

What is the meaning of ‘fit for habitation’? The meaning of the phrase must vary with the circumstances to which it is applied. In the case of unclean furniture or defective drains or a nuisance by vermin the matter is not, as a rule, one of difficulty. The eye or the nostrils can detect the fault and measure its extent. But in the case of a house lately occupied by a person suffering from an infectious disease, the eye and other senses are of no avail. The bacilli of infection are not apparent to the eye. Yet a peril is none the less grave because it is hidden. [Collins v Hopkins [1923] 2 KB 617 at 620–1; [1923] All ER Rep 225.] In the case cited McCardie J went on to decide that the landlord was in breach where the premises were, by reason of their having been occupied by a person suffering from tuberculosis, such that there was an actual and appreciable risk of infection. [page 249] The implied covenant is directed only to the condition of the premises at the time the tenancy is to begin, the Court of Appeal having declined to extend the rule so as to extract from the landlord an implied warranty that the premises shall continue to be fit for occupation during the period of the tenancy: Sarson v Roberts [1895] 2 QB 395; Pampris v Thanos [1968] 1 NSWR 56; (1967) 87 WN (Pt 2) (NSW) 161: compare Gunn v National Coal Board 1982 SLT 526 (Outer House). The rule now under consideration does not apply in the case of an unfurnished house or unfurnished apartment: Cruse v Mount [1933] Ch 278; [1932] All ER Rep 781; Penn v Gatenex Co Ltd [1958] 2 QB 210 at 233; 1 All ER 712; Wettern Electric Ltd v Welsh Development Agency [1983] QB 796 at 805. The application of the rule in commercial leases, where the premises are provided furnished or partly furnished, has never been tested, but appears dubious. The absence of any implied covenant of fitness for habitation in the case of unfurnished dwellings is but an illustration of the general rule that the landlord does not impliedly undertake that the premises are fit for the purpose for which they are to be used: Manchester Bonded Warehouse Co Ltd v Carr (1880) 5 CPD 507; [1874–80] All ER Rep 563, a rule which applies even where the

lease contains covenants forbidding the use of the premises for any other purpose: Balcairn Guest House Ltd v Weir [1963] NZLR 301; compare the position in relation to licences, see Wettern Electric Ltd v Welsh Development Agency, above; see also [3.1] and [10.1]. The implied covenant does not extend to the dangerous condition of appliances or furnishings of a dwelling house: Pampris v Thanos (1967) 87 WN (Pt 2) (NSW) 161.

Covenant by tenant to use and deliver up in tenant-like manner [8.7] An implied covenant on the part of the tenant to use the premises in a tenantlike manner arises from the very relationship of the parties; moreover, such a covenant is not displaced by an express covenant to repair, since the two covenants do not cover the same ground: City of Ballarat v Waller [1924] VLR 115; see also [8.3]. The content of the implied covenant was considered by the Court of Appeal in Warren v Keen [1954] 1 QB 15; [1953] 2 All ER 1118, where the court refused to treat the covenant as imposing in effect an obligation to keep the premises in repair. Useful examples of matters which do fall within the scope of the implied covenant are given by Lord Denning ([1954] 1 QB 15 at 20): Apart from express contract, a tenant owes no duty to the landlord to keep the premises in repair. The only duty of the tenant is to use the premises in a husband-like, or what is the same thing, a tenant-like manner. That is how it was put by Sir Vicary Gibbs CJ in Horsefall v Mather (1815) Holt NP 7, and by Scrutton LJ and Atkin LJ in Marsden v Edward Heyes Ltd [1927] 2 KB 1 at 7, 8; [1926] All ER Rep 329 at 332. [page 250] But what does ‘to use the premises in a tenant-like manner’ mean? It

can, I think, best be shown by some illustrations. The tenant must take proper care of the place. He must, if he is going away for the winter, turn off the water and empty the boiler. He must clean the chimneys, when necessary, and also the windows. He must mend the electric light when it fuses. He must unstop the sink when it is blocked by his waste. In short, he must do the little jobs about the place which a reasonable tenant would do. In addition, he must, of course, not damage the house, wilfully or negligently; and he must see that his family and guests do not damage it: and if they do, he must repair it. But apart from such things, if the house falls into disrepair through fair wear and tear or lapse of time, or for any reason not caused by him, then the tenant is not liable to repair it. Lord Denning gave further consideration to the implied obligation to use the premises in a tenant-like manner in Regis Property Co Ltd v Dudley [1959] AC 370 at 407; [1958] 3 All ER 491 at 509–10: I would first take a case where the tenancy agreement contains no express provisions — express or implied which requires the tenant to do any repairs at all. He is not therefore, under the terms of tenancy, responsible for any repairs not even for ‘some’ of them. But, nevertheless he is, by the common law, under an obligation not to commit waste, that is to say, voluntary waste; and he is also under an obligation to use the premises in a tenant-like manner. As I pointed out in Warren v Keen [1954] 1 QB 15 at 20; [1953] 2 All ER 1118, those are not obligations to repair. They are obligations as to his conduct, and user of the premises, and so long as they are fulfilled, as they ought to be, no question of repair arises. It is true, of course, that if the tenant breaks those obligations as, for instance, if he commits waste by removing partitions or walls: Marsden v Edward Heyes Ltd [1927] 2 KB 1; [1926] All ER Rep 329, or if he uses the premises in an untenant-like manner by breaking windows or doors: Ferguson v Anon [1798] 2 Esp 590 — he must execute repairs or else pay damages. But in doing so he is not fulfilling an obligation to repair under the terms of the tenancy, express or implied. He is only remedying his own breaches of his common law obligations as to conduct and user. These obligations are altogether separate and distinct from those

imposed by a covenant to repair, and give rise to separate and distinct remedies, see Kinlyside v Thornton (1776) 2 Wm Bl 1111; 96 ER 657, a case of waste, but the same applies, I think, to use in a tenant-like manner. The terms of the lease may contemplate the possibility of the tenant’s negligence, such as a provision that in the event of damage by fire, whether due to accident or negligence by anyone, the landlord’s loss is to be recouped from insurance moneys with no further claim against the tenant for damages for negligence: Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211. The obligation of the tenant is not only to use but also to deliver up the premises in a tenant-like manner: Marsden v Edward Heyes Ltd [1927] 2 KB 1; [1926] All ER Rep 329; Combara Nominees Pty Ltd v McIlwraith-Davey Pty Ltd (1991) 6 WAR 408 (FC). Waste is considered in [10.3]. As to the implied covenant of an agricultural tenant to cultivate in a husband-like manner, see [8.8]. [page 251]

Covenant by tenant to cultivate in husband-like manner [8.8] The law implies from the bare relation of landlord and tenant, an undertaking or covenant on the part of an agricultural tenant to cultivate the land in a husbandlike manner: Williams v Lewis [1915] 3 KB 493.

Covenant by tenant to deliver up vacant possession [8.9] Even in the absence of express provision to that effect, the tenant is bound to yield up possession to the landlord at the expiration of the term. The tenant is required not merely to vacate the premises but to ensure that the landlord is able to retake possession. Thus, the covenant will be breached if a

caretaker or sub-tenant installed by the tenant during the term of the lease fails to vacate at the end of the lease: Henderson v Squire (1869) LR 4 QB 170. A tenant does not give up vacant possession if he or she leaves rubbish on the premises at the end of the lease other than a minimal quantity: Waterhouse v Waugh [2003] NSWCA 139 at [62].

Other usual covenants [8.10] As to what other covenants are to be implied, see Chapter 9. Although usual covenants may be implied, usual covenants are not implied covenants: see Chester v Buckingham Travel Ltd [1981] 1 WLR 96 at 100–1 and [9.1].

[page 253]

9 Usual Covenants Usual covenants [9.1] An agreement for a lease may be bad for uncertainty in any one of several respects. As to want of certainty in relation to matters other than the covenants, see [4.2]. It is highly desirable that an agreement for a lease should stipulate with sufficient particularity what covenants the lease is to contain. The effect of an agreement for a lease to contain all such usual and proper conditions, reservations and agreements as should be judged reasonable and proper by a third person was considered in Gourlay v Somerset (1815) 19 Ves 429; 34 ER 576, while the Irish case of Plunkett v Dease (1846) 101 Eq R 124 was concerned with an agreement to grant a lease subject to such clauses as the lessor chose to insert. An agreement for a lease may provide that the lease shall contain the usual covenants. If the agreement is silent as to covenants, its effect will be the same, for the law will imply that the lease shall contain only the usual covenants: Church v Brown (1808) 15 Ves 258 at 265; 33 ER 752 at 755; [1803–13] All ER Rep 440; Propert v Parker (1832) 3 Myl & K 280; 40 ER 107; Irvine v Penwarden (1912) 32 NZLR 43; Bennett v Excelsior Land Investment & Building Co Ltd (1893) 14 LR (NSW) Eq 179. Similarly, if an ‘open’ contract is made for the grant of a sublease, the proposed sublessee may require the grant of a sublease which contains only the usual covenants unless he or she had notice of the terms of the head lease: Melzak v Lilienfeld [1926] Ch 480; [1926] All ER Rep 404; McGarrity v Condy (1927) 27 SR (NSW) 217. In modern times the agreement for a lease appears to be less in common

use than previously, the parties proceeding instead to the immediate giving and taking of a lease. One result of this is that the numerous cases decided (mostly during the nineteenth century) on what covenants should be regarded as usual are now of diminished practical importance. Usual covenants should not be confused with implied covenants, although there is no inconsistency in implying ‘usual covenants’. In Chester v Buckingham Travel Ltd [page 254] [1981] 1 WLR 96 at 101, the cases on implication of terms having been cited, Foster J said (at 390): … these cases deal with quite another subject, namely, what the court will imply into a formal document. But when the court has to decide what is a usual covenant it is not implying anything into a document but merely deciding, in an assignment case, whether the existing lease includes an unusual covenant which should have been disclosed and in an open contract case, what covenants should be inserted.

Usualness a question of fact [9.2] In Bennett v Excelsior Land Investment & Building Co Ltd (1893) 14 LR (NSW) Eq 179, Owen CJ (in Eq) expressed the view that the question, ‘What are usual covenants?’, is one of law. The weight of authority is against this view, although it is impossible to extract any clear statement of the law from some of the reported cases. As long ago as 1787 the question whether a covenant was usual was left up to the jury by Thomson B; on proceedings by way of a case stated by one member of the court, Butler J, observed: ‘In the present case, the Court are relieved from determining whether this covenant is or is not usual; because the jury have expressly found that it is unusual’: Doe d Ellis v Sandham (1787) 1 TR 705 at 709; 99 ER 1332 at 1334. This is a curious observation; one would have expected the law to ordain whether it was the business of the jury or of the court to determine the question. Forty

years later Lord Tenterden CJ had no doubts that it was the business of the jury: Bennett v Womack (1828) 3 C & P 96; 172 ER 339. Similarly, the question whether a covenant was usual was left to the jury in Brookes v Drysdale (1877) 3 CPD 52. In Blake v Lane (1876) 2 VLR (L) 54, the Full Court made the cryptic observation that it is ‘generally’ for the jury to determine whether a covenant is usual, and referred to Bennett v Womack. The last-mentioned decision is itself not without difficulty. It was there necessary to consider whether the lease contained unusual covenants in any of three respects: the tenant’s covenant to pay land tax and sewers rate, the proviso for re-entry for nonpayment of rent, and the proviso for re-entry for use of the premises for any trade other than that of licensed victuallers. The first objection was disposed of by reference to another provision, which indicated that the tenant must be obliged to pay the charges in question. Of the other two objections, Lord Tenterden CJ said (172 ER 339 at 340): As to the covenant for re-entry for non-payment of rent, that is quite usual, though in some cases it is after a lapse of a greater, and in others a less number of days from the time of the rent becoming due. With regard to the stipulation, that no other business shall be carried on than that of a licensed victualler, I have some doubt, and I am ready to hear evidence on either side. Evidence was then called by the plaintiff that the stipulation in question was contained in six out of 10 leases of public houses. Counsel for the defendant did not [page 255] call evidence on this issue, and submitted that the question was one of law for the court. The Chief Justice rejected this submission, saying: I am clearly of opinion, that what is a usual covenant is a question of fact for the jury … as it is proved that more than half the leases contain such a covenant, there being no evidence on the other side, I shall recommend the jury to say that it is usual.

The jury acted upon this recommendation, and returned a verdict for the plaintiff. What became of the second objection (that relating to re-entry for non-payment of rent) is not clear. It was probably not pressed, so that the question did not have to be left to the jury; another possibility is that the Chief Justice did not leave the question to the jury because he considered that a finding that the proviso was unusual would have been perverse. It may be that by its use of the word ‘generally’ in Blake v Lane (1876) 2 VLR (L) 54, the Full Court was concerned to do no more than draw attention to the question of law which may arise in any case whether there is any evidence fit to be submitted to a jury. If, on the other hand, the court intended to convey that in most cases the question is one of fact and that in a minority of cases the question is one of law, no discrimen is suggested in the judgment. The question whether the usualness of a covenant is one of fact is touched on by Chapman J in Irvine v Penwarden (1912) 32 NZLR 43 at 45; unhappily, the judgment serves only to add to rather than dispel the confusion which exists. A number of the authorities were considered in Flexman v Corbett [1930] 1 Ch 672; [1930] All ER Rep 420. It is useful to quote at length from the judgment of Lord Maugham (then Maugham J) (1930] 1 Ch 672 at 677–9): I now come to consider the wholly different point which arises with regard to the covenants and the proviso for re-entry contained in the lease. This point has long occasioned doubts among judges and lawyers, and it is one which has been the subject of a good deal of consideration in recent times; and I confess that I think that the view which has been expressed in some of the cases with regard to what are usual covenants in leases of houses for residential occupation in London, if not elsewhere, requires reconsideration at the present time in the light of the existing practice. It is suggested on behalf of the defendant that the court is bound to find that usual covenants in leases at the present time are those, and those only, which are specified in the case of Hampshire v Wickens (1878) 7 Ch D 555 at 561. They, therefore, are only covenants: (1) to pay rent; (2) to pay taxes; (3) to keep and deliver up in repair; (4) to allow the lessor to enter and view the state of repair, and finally, the usual qualified covenant by the lessor for quiet enjoyment. It is true that that case has constantly been

cited in textbooks and has been referred to from time to time as containing a statement of what are usual covenants in a lease of a house. I think it right to express my opinion, after having heard and considered all the numerous authorities which have been cited to me, that the question whether particular covenants are usual covenants is a question of fact, and that the decision of the court on that point must depend upon the admissible evidence given before the court in relation to that question. I think that it is proper to take the evidence of conveyancers and others familiar with the practice in reference to leases and that it is also permissible to examine books of precedents. It is permissible to obtain evidence [page 256] with regard to the practice in the particular district in which the premises in question are situated. I would add that, in my view, it is a complete mistake to suppose that the usual covenants in regard to a lease, for instance, of a country house, are necessarily usual covenants in regard to the lease of a London residence, and I would add that it seems to me that it may very well be that what is usual in Mayfair or Bayswater is not usual at all in some other part of London such, for instance, as Whitechapel. Further, in my opinion, ‘usual’ in this sense means no more than ‘occurring in ordinary use’, and I think that it is an error to suppose that the court is entitled to hold that a particular covenant is not usual because it may be established that there are some few cases in which that covenant is not used. If it is established that (to put a strong case) in nine cases out of ten the covenant would be found in a lease of premises of that nature for that purpose and in that district, I think that the court is bound to hold that the covenant is usual. The court must bear in mind here the ultimate question which is being decided, which is whether the form of the covenant is such as to constitute a defect in the subject-matter of the contract; and if it were established that the lease is in the form in which it would be anticipated as being in the great majority of cases, having regard to the

nature of the property and to the place where it is situated and to the purposes for which the premises are to be used, it does not seem to me reasonable to say that there is a defect in the subject matter of the contract. I do not think it necessary to go through and comment upon all the authorities which have been cited to me on this subject, because I have come to the conclusion that the question for me must be, not whether such a covenant as the covenant to insure, which is mentioned as objectionable in this case, justifies the defendant in refusing to complete — a thing which I may say I should be very loath to hold, but whether there are not in the lease covenants which the defendant is entitled to rely upon as being unusual and onerous. The view of Maugham J that the question ‘What are usual covenants?’ is one of fact appears to have been accepted in Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699 at 726 and 735; 3 All ER 30; Charalambous v Ktori [1972] 1 WLR 951 at 953; and in Chester v Buckingham Travel Ltd [1981] 1 WLR 96 at 101.

What are usual covenants? [9.3] Despite the authorities cited in [9.2] in support of the view that the question ‘What covenants are usual?’ is one of fact, the reports abound with decisions in which the courts have decided, sometimes with and sometimes without the aid of evidence, that a particular covenant should or should not be regarded as usual. These decisions are often cited as if they laid down immutable rules of law whereby particular covenants have been irrevocably assigned for all purposes to one category or the other. The proviso for re-entry is a good example. It is often said that, while a proviso for re-entry for nonpayment of rent is usual, a proviso entitling the lessor to re-enter for breach of some other covenant or in some other event must be regarded as unusual: Coleman v Dean (1870) 1 VR (Eq) 142; Hodgkinson v Crowe (1875) LR 10 Ch 622; Hampshire v Wickens (1878) 7 Ch D 555. Nevertheless, in Chester v Buckingham Travel Ltd [1981] 1 WLR 96 at 105 Foster J expressed the view that a right of re-entry on breach of any of the covenants of the lease was usual in 1971, but the relevant clause also sought ‘a

[page 257] right of re-entry if the tenant has a receiving order in bankruptcy made against him and other matters in regard to insolvency’, which was held not to be usual. In reaching this view Foster J relied upon the remarks of Maugham J in Flexman v Corbett [1930] 1 Ch 672 at 682; [1930] All ER Rep 420 at 425: I do not think that the evidence in this case is sufficient to enable me to express the opinion that the proviso for re-entry [and he was dealing with re-entry for breach of covenant] is in the usual form, although I think that, even with regard to the proviso for re-entry, the matter is one which might usefully and properly be considered in the light of modern evidence at some future time. Provisos for re-entry upon breach of any covenant have, of course, been common for many years, and, so far as present day practice is concerned, a written lease for a term of years prepared by a solicitor, or proffered by an estate agent on a standard form, which did not contain a proviso extending to breaches of covenant generally would be a rarity. Such leases are on occasion to be found; it is not unknown for the proviso for re-entry to disappear altogether in the course of the over-hasty adaption of an earlier lease used as a draft; the deliberate omission of a proviso for re-entry covering breaches generally is, however, something exceedingly rare if not indeed altogether unknown. In these circumstances, the application of decisions given 100 years ago so as to reach the result that, at the present time, a proviso for re-entry in the common form is not ‘usual’ would seem to be unreal, particularly if reached in the teeth of the body of evidence that might be called as to modern practice. On the other hand, despite the attempt of Lord Maugham, above, to cast off the fetters seemingly forged by certain earlier decisions, the possibility remains that, whatever evidence may be called as to the practice of modern conveyancers, a narrow and rigid approach will be adopted, whereby the list of usual covenants will for practical purposes be treated as closed and as determined by judicial decision, although the decision in Chester v Buckingham Travel Ltd, above, does now provide an authority for the broader view. The uncertainty which exists emphasises the desirability of avoiding the ‘open’ agreement for a lease or (and this amounts to the same thing) an agreement for

a lease to contain the usual covenants, and instead stating clearly what covenants are to appear in the lease. While it is not proposed to consider at length the decisions dealing with what covenants are usual, it may be noted that the following covenants have been held to be usual: (a) the usual qualified covenant by the landlord for quiet enjoyment: Hampshire v Wickens, above; Flexman v Corbett, above; Chester v Buckingham Travel Ltd, above; (b) a covenant by the tenant to pay rent, with a proviso for re-entry for nonpayment of rent: Bennett v Womack (1828) 3 C & P 96; 172 ER 339; Hodgkinson v Crowe, above; Flexman v Corbett; Chester v Buckingham Travel Ltd; (c) a covenant by the tenant to pay taxes, except such as are expressly payable by the landlord: Hampshire v Wickens; Flexman v Corbett; Chester v Buckingham Travel Ltd; and see [7.16]. [page 258] (d) a covenant on the tenant’s part to keep and deliver up the premises in repair: Sharp v Milligan (No 2) (1857) 23 Beav 419 at 422; 53 ER 165 at 166; Hampshire v Wickens; Flexman v Corbett; Chester v Buckingham Travel Ltd; (e) a covenant by the tenant to allow the landlord to enter and view the state of repair: Blakesley v Whieldon (1841) 1 Hare 176; 66 ER 996; Hampshire v Wickens; Flexman v Corbett; Chester v Buckingham Travel Ltd; (f) a right of re-entry on breach of any of the covenants of the lease: Chester v Buckingham Travel Ltd; and see Flexman v Corbett. In Chester v Buckingham Travel Ltd a number of additional, particular, covenants are considered in light of modern conveyancing practice, and some are held to be usual.

[page 259]

10 Repairs Landlord’s obligations [10.1] There is no implied obligation upon the landlord to put the demised premises into a proper state of repair at the commencement of the tenancy (Chappell v Gregory (1864) 34 Beav 250; 55 ER 631), although on the letting of a furnished house or apartment there is an implied covenant by the lessor that the premises are fit for habitation at the commencement of the tenancy together with a duty of care to avoid foreseeable risk; this implied covenant and duty is discussed in [8.5]. It is a common misunderstanding that where a lease does not impose a repair obligation on a tenant it must follow, by implication, that the obligation is imposed on the landlord; but this is not correct as a matter of general principle, with the result that there may not be any such obligation on either party: see, for example, Lymarn Holdings Pty Ltd v M and W Holdings Pty Ltd (SC(WA), Anderson J, 9 May 1996, unreported); BC9601731 at 5. As the cases considered indicate, there may, however, be circumstances where a correlative obligation will be implied: see N Dowding and K Reynolds, Dilapidations: The Modern Law and Practice, 5th ed, Sweet and Maxwell, 2013, paras 19-12–19-17. An obligation of this kind will not be implied unless the contract cannot work without the implication of the correlative obligation: see Duke of Westminster v Guild [1985] QB 688; and see Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 584; [2002] VSC 272 (per Balmford J); and Carrathool Hotel Pty Ltd v Scutti [2005] ANZ ConvR 471; (2006) NSWw ConvR ¶56-132; [2005] NSWSC 401 (per White J); and see

Alliance Accounting & Business Consultants Pty Ltd v Australian Property Investment & Development Pty Ltd (SC(NSW), White J, 19 June 2007, unreported) at [16]. The common general categories of circumstances that have invited an implication of this kind are where the lease contains a covenant on the part of the tenant to pay for landlord’s repair work and where the tenant’s repair obligations cannot be performed unless the landlord undertakes repair work which is outside the scope of the tenant’s obligations. Related to the second general category is the situation where the landlord retains parts of the building in which the leased premises are situated. In these circumstances the landlord [page 260] has a more limited obligation than it would under a landlord’s repair covenant, express or implied. The ‘… obligation is not an absolute duty to repair but a more limited duty to take reasonable care to see that the condition of the retained part does not cause damage to the tenant or the demised premises’: see Dowding and Reynolds, para 19-21; and also paras 19-18 and 19-19; and see Carstairs v Taylor (1871) LR 6 Ex 217; and Duke of Westminster v Guild [1985] 1 QB 688 (CA). A distinction must be drawn between the landlord’s obligations, if any, with respect to the premises under a landlord’s repair covenant and any duty of care the landlord has with respect to the premises and its occupants. The landlord’s duty in this respect was considered in State of New South Wales v Watton (1999) NSW ConvR ¶55-885 (CA), with particular reference to the extent of the landlord’s obligation, if any, to inspect the demised premises prior to letting; and to the High Court’s consideration of the extent of the landlord’s duty in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. Beazley JA (with whom the other members of the Court of Appeal, Powell and Fitzgerald JJA, agreed; with Fitzgerald JA adding some further observations) stated (at 56,914–15): The appellant attacked her Honour’s reasoning process, and in particular her conclusion that Northern Sandblasting v Harris was authority for the proposition that there was a duty on a landlord to

carry out an inspection before a new tenant took up occupation of premises. It was submitted that an analysis of the individual judgments revealed that four of the members of the Court (Dawson, Toohey, Gummow and Kirby JJ) found there was no duty to inspect but two (Brennan CJ and Gaudron J) found there was duty. It was submitted therefore, that the underlying legal rationale for her Honour’s decision was erroneous. I agree that Northern Sandblasting v Harris does not establish that there is an independent existing duty upon a landlord to inspect premises. Rather, it established that a landlord owes a duty of care to a tenant to make leased premises as safe for the purpose as reasonable care and skill on the part of the landlord can make them: see also Assaf v Kostrevski & Ors (unreported, New South Wales Court of Appeal, 30 September 1998). In determining whether there has been a breach of the duty of care the court is required to determine what was the standard of care in the particular circumstances of the case. In Northern Sandblasting, Brennan CJ (at 340) considered that the standard of care was the same as is required of occupiers towards those who enter occupied premises by consent and for reward. In the particular circumstances of the Northern Sandblasting case, the Chief Justice found that this standard called for an inspection of the premises. Gaudron J appears to have put the matter more generally, holding at 360 that: Having regard to the control which, at the beginning of a lease, a landlord exercises over the state of the premises and, also, the extent to which members of the household are then dependent upon the landlord for their safety, a landlord’s duty at that point cannot, in my view, be limited to defects of which he or she is aware. Dawson J at 344 rejected that there was any general obligation to inspect, considering that the duties of a landlord to a tenant was not analogous to that of the occupier to an invitee. Having regard to the findings at trial, he also rejected that there was anything in the circumstances of the particular case which gave rise to an obligation to inspect.

[page 261] Likewise, Toohey J at 349 considered that there were difficulties in finding a breach of duty due to failure to inspect, those difficulties being ‘in part evidentiary’. Kirby J also rejected the requirement for inspection, stating at 394: The imposition of a duty of regular and repeated inspections of domestic electricity systems was sustained neither by evidence of common practice nor by commonsense. … The argument about a suggested duty of electricity inspections could not stop there. If correct in principle, it would require regular inspections against the risk of other perils, eg, gas supply, floorboards, balustrades, etc. In the absence of evidence about the prevalence of, and need for, any such inspections of rented accommodation, there was no foundation for imposing such a duty on landlords leasing residential premises. The fault in the neutral link would not have been obvious to an untrained observer such as the appellant. Kirby J’s reference to ‘duty’ in these passages is, in my opinion, a reference to whether the appropriate standard of care calls for an obligation to inspect. McHugh J expressed no view on this issue. Fitzgerald JA added the additional observation (at 56,915–16): Northern Sandblasting Pty Ltd v Harris does not establish that a landlord does not have a duty to inspect premises before letting them to a tenant. In general, a landlord’s duty to take reasonable care might or might not encompass such an obligation, depending on the circumstances. In New South Wales, such an obligation arises in relation to residential premises from the Residential Tenancies Act 1987. The appellant did not dispute that it is bound by the Residential

Tenancies Act [s 4]. In accordance with subs 8(1) of that Act, a standard form of residential tenancy agreement has been prescribed by the regulations. In accordance with subs 8(4), the prescribed standard form of residential tenancy agreement requires completion of a report relating to the condition of the residential premises. Those matters are elaborated upon in Pt 4 of the Regulations made under that Act. The report relating to the condition of residential premises must be completed by or on behalf of the landlord and given to the tenant at or before the time the residential tenancy agreement is executed by the landlord [see reg 22]. These statutory/regulatory provisions necessarily import a requirement that residential premises be inspected with reasonable care prior to letting to a new tenant. Breach of that obligation is evidence of negligence [Fraser v Victorian Railways Commissioner (1908) 8 CLR 54, 77; O’Connor v S P Bray Ltd (1937) 56 CLR 464; Duyvelshaff v Cathcart & Ritchie Ltd (1973) 47 ALJR 410]. As explained by Mason P (with whom Priestley JA and Sheppard agreed) in Assaf v Kostrevski (1999) NSW ConvR ¶55-883, the duty found to apply to a landlord in Northern Sandblasting v Harris arises out of the landlord’s control of the premises. Mason P said (at 56,902): The landlord’s duty of care as found in Northern Sandblasting stems from the power of control at the inception of the lease, being a power indistinguishable from that exercised by an occupier: see at 339–40 (Brennan CJ), 349, 353–4 (Toohey J), 359–60 (Gaudron J), 396–7 (Kirby J). [page 262] We are not in this appeal concerned with any duty other than that stemming from the relationship at the inception of the relevant tenancy when there was no question about the landlord’s control of the premises. The accident occurred within days of the tenant taking up occupancy. Northern Sandblasting discusses the precise content of the landlord’s

duty in different situations. There was disagreement among the justices as to the extent (if any) to which it is delegable: see generally Swanton and McDonald, ‘Landlord’s liability for injuries caused by the defective conditions of the premises’ (1998) 72 ALJ 345. See also Redfern, ‘Northern Sandblasting Again’ (1999) 7 APLJ 185 (on Assaf v Kostrevski (1999) NSW Conv R 55-883). For further discussion of Northern Sandblasting v Harris, principally from a tortious perspective, see A Edgar, ‘Landlords’ Liability: All Care Plus Responsibility — Northern Sandblasting Pty Ltd v Harris’ ALMD Advance No 16, 27/8/1997, p 1; K Evans, ‘Extension of a Landlord’s Duty of Care — The Decision in Northern Sandblasting Pty Ltd v Harris’ (1997) 12 APLB 9; M Spry, ‘The Liability of Landlords to Their Tenant: Northern Sandblasting Pty Ltd v Harris’ (1997) 17 Proctor (No 11) 7; P Handford, ‘No Consensus on Landlord’s Liability: Northern Sandblasting Pty Ltd v Harris’ (1998) 6 Tort Law Rev 105; and see A Stanfield, ‘The Shifting Foundations Underlying Repair Covenants and How They Affect the Landlord, the Tenant and Third Parties’ (1996) 17 Qld Lawyer 23; A Hood, ‘The Extent of the Modern Covenant to Repair in Commercial Leases’ 1997 5 APLJ 53; and Swanton and McDonald, ‘Landlords’ liability for injuries caused by the defective condition of the premises’ (1998) 72 ALJ 345. In relation to the operation of the Defective Premises Act 1972 (Eng), with respect to leased premises, see, for example, Alker v Collingwood Housing Association [2007] 1 WLR 2230 (CA). More generally in Gotze v Ylitalo [2005] ANZ ConvR 159; (2005) Q ConvR ¶54-616 Dutney J said: [33] I am satisfied that the septic system was negligently installed. It was not done by qualified tradespeople. It was not done properly. It was always foreseeable that people in the position of Mr & Mrs Gotze would suffer damage if the septic system was not properly installed. Even if the damage caused was purely economic Mr Ylitalo as the builder and the person responsible for the installation would nonetheless remain liable. Whichever formulation of the principle in Perre v Apand [(1999) 198 CLR 180] is adopted, a landlord who personally constructs premises for a particular commercial purpose and

then leases those premises to a tenant will be liable for the foreseeable economic loss flowing from negligent construction. Further, the distinction between the position with respect to third parties in the context of tortious or statute-based claims and the possible rights and obligations of third parties under repair and other lease covenants should be kept in mind: as to the latter see, for example, Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025 where the head landlord sought to recover the cost of repairs from the subtenant relying on the provisions of covenants in the sub-lease; and see [15.2]. [page 263] The common law position that the courts will not imply a term as to fitness or suitability for purposes of premises into contracts for the sale of land or the grant of a lease was again confirmed, relatively recently, in Wettern Electric Ltd v Welsh Development Agency [1983] QB 796. But where the contract has included the provision of something other than land the courts have been willing to imply terms. Thus, terms may be implied, in accordance with the usual principles for implying terms into contracts, in a contract granting a licence: see Wettern Electric Ltd v Welsh Development Agency at 804–5 where the authorities are usefully reviewed. Nevertheless, a landlord will be held liable in the event that defects are fraudulently concealed: Gordon v Selico Co Ltd (1986) 18 HLR 219; [1986] 1 EGLR 71 (CA). Generally, in the absence of express stipulation the landlord is not bound to repair the demised premises during the continuance of the demise: Gott v Gandy (1853) 2 E & B 845; 118 ER 984; Colebeck v Girdlers Co [1896] 1 QB 234; Collins v Winter [1924] NZLR 449; Wilchick v Marks & Silverstone [1934] 2 KB 56; [1934] All ER Rep 73; Mint v Good [1951] 1 KB 517 at 519 and 522; [1950] 2 All ER 1159; Liverpool City Council v Irwin [1977] AC 239; [1976] 2 All ER 39; and note the distinction between a covenant to repair at the landlord’s expense and an agreement by the landlord to spend a maintenance fund contributed to by tenants on repairs. See Alton House Holdings Ltd v Calflane (Management) Ltd (1987) 20 HLR 129; [1987] 2 EGLR 52 (Ch), where it was also held that there was no implied covenant by the landlord to make good any shortfall.

These authorities were considered by the Court of Appeal in Barrett v Lounova (1982) Ltd [1990] 1 QB 348; and see All ER Rev 1989 pp 189–90. A covenant by the landlord to carry out repairs to remedy defects to the structure and exterior of the premises was implied to give business efficacy to the agreement because the tenant’s covenant to do all inside repairs could not be carried out unless the exterior of the premises was in good repair. There was no express obligation on anyone to keep the outside in repair. The court rejected the argument that no repairing covenant could arise by implication according to ordinary principles of construction concerning implied terms. Kerr LJ treated the authorities on the point as standing for a rule of construction rather than a rule of law (at 355–8): The landlord relied strongly on a well-known passage in Woodfall on Landlord and Tenant, 28th ed, 1978, para 1-1465, in the following terms: In general, there is no implied covenant by the lessor of an unfurnished house or flat, or of land, that it is or shall be reasonably fit for habitation, occupation or cultivation, or for any other purpose for which it is let. No covenant is implied that the lessor will do any repairs whatever … The first authority cited was the old case of Hart v Windsor (1844) 12 M & W 68; [1843–60] All ER Rep 681. There there was a full tenant’s repairing covenant of a house, but he declined to pay the rent because the house was bug-infested to such an extent that he said it was unfit for human habitation. That plea was rejected. Parke B, giving the judgment of the court, said (12 M & W 68 at 87–88; [1843–60] All ER Rep 681 at 685): [page 264] We are all of opinion … that there is no contract, still less a condition, implied by law on the demise of real property only, that it is fit for the purpose for which it is let. The principles of the common law do not warrant such a position; and though,

in the case of a dwelling-house taken for habitation, there is no apparent injustice in inferring a contract of this nature, the same rule must apply to land taken for other purposes — for building upon, or for cultivation; and there would be no limit to the inconvenience which would ensue. It is much better to leave the parties in every case to protect their interests themselves, by proper stipulations, and if they really mean a lease to be void by reason of any unfitness in the subject for the purpose intended, they should express that meaning. Secondly, there is an even stronger passage in a dictum of Bankes J in Cockburn v Smith [1924] 2 KB 119; [1924] All ER Rep 59, a decision of this court. The owner of a block of flats had let one of the top flats but had kept the roof of the building and the guttering in his own possession and control. The guttering became defective, water escaped and wetted the tenant’s outside wall and so caused damage to the inside. Not surprisingly, it was held that since the landlord had retained control of the guttering he was under a duty to take reasonable care to remedy any defects in it of which he had notice and which were a source of damage. Those facts, of course, do not apply here, but in an obiter dictum Bankes LJ said ([1924] 2 KB 119 at 128; [1924] All ER Rep 59 at 62): I want to make it plain at the outset that this is not a letting of the whole house where, without an express covenant or a statutory obligation to repair, the landlords would clearly be under no liability to repair any part of the demised premises whether the required repairs were structural or internal and whether they had or had not notice of the want of repair. The statement was not only obiter, but if it purported to lay down any general rule that no repairing covenant could arise by implication then, with all respect, it clearly went too far, as shown by later cases. Finally in this context the landlord relied on the decision of Goodard J in Wilchick v Marks and Silverstone (Silverstone, third party) [1934] 2 KB 56; [1934] All ER Rep 73. However, implication derived from the true construction of the terms of the letting was not raised in

argument in that case. It was also not dealt with by the judge since no relevant implication could have been derived from the terms of that particular instrument. I turn now to the more recent cases. They show that there is no rule of law against the implication of any repairing covenant against landlords and that the ordinary principles of construction concerning implied terms apply to leases in that context as they apply generally in the law of contract. That is illustrated, but in a very different context, by the decision of the House of Lords in Liverpool City Council v Irwin [1977] AC 239. I need not refer to that case, but I should mention two other cases, both decisions of this court, which show that implication of a landlord’s repairing covenant is a permissible approach if the terms of the agreement and circumstances justify it. The first is Sleafer v Lambeth Metropolitan BC [1960] 1 QB 43; [1959] 3 All ER 378. That was an extraordinary case, in which the tenant found that he was unable to open his front door due to a minor defect which caused it to jam. So he pulled hard on the only external handle, the letterbox knocker. That came off, and he fell backwards against an iron balustrade and suffered injury to his back. He sued the landlord for allowing [page 265] the door to get into that state. Perhaps not surprisingly, it was held that in relation to a minor defect of that kind no question of any obligation on the landlord could arise. It is also to be noted that the lease provided, by cl 2, that the tenant was to reside in the dwelling, that is to say, in the same way as here, that it was not to be used for any business purposes, and by cl 9 the tenant was not to do, or to allow to be done, any decorative or other work without the landlord’s consent in writing. In rejecting the tenant’s claim against the landlord, Morris LJ, who gave the first judgment, quoted the passages in Hart v Windsor and Cockburn v Smith which I have already set out (see [1960] 1 QB 43 at 55; [1959] 3 All ER 378 at 383). But I do not think that he said

anything about the possibility of implying a term dealing with repairs. However, that was dealt with by Ormerod LJ in a passage which I must read ([1960] 1 QB 43 at 60; [1959] 3 All ER 378 at 386): When this matter was argued before the learned judge, it was contended by counsel for the landlords that in no circumstances could a condition be implied that the landlords should be under an obligation to repair. The learned judge dealt with that in this way: ‘Although I cannot follow counsel for the tenant in saying that the mere fact that the landlords have reserved the right to do repairs means that an obligation is imposed on them, I cannot agree with counsel for the landlords when he says that the absence of some express term in the tenancy, whether oral or in writing, means that a contractual duty on the landlords to do the repairs can never arise — in other words, that such term can never be implied. I am not sure that that is right; I am not prepared to say that circumstances may not arise in which a court could find itself impelled to imply such terms in a tenancy agreement’. Without having to decide that question, as at present advised, I should certainly agree with the learned judge. A tenancy agreement, like any other agreement, must be read as a whole, and it may very well be that in construing the agreement it is possible to imply an obligation on the landlords to do repairs, but the question for the learned judge and for this court to decide was whether such an obligation could be implied in this particular agreement. Wilmer LJ said ([1960] 1 QB 43 at 63; [1959] 3 All ER 378 at 388): There is much to be said for the view that cl 2 of the agreement, which requires the tenant to reside in the dwellinghouse, does by implication require the landlords to do such repairs as may make it possible for the tenant to carry out that obligation. At least it seems to me that that is a possible view. Then he said that, even if that view be right, in his judgment the obligation would not extend to cover the type of repairs which fell to

be considered in that case, which was no more than easing the bottom of the jammed door. He said in that regard ([1960]1 QB 43 at 63; [1959] 3 All ER 378 at 388): Wherever the line is drawn, even assuming that counsel for the tenant is right in saying that some obligation on the part of the landlords to execute repairs must be implied, I should have thought that that line must be drawn well short of including responsibility for such a trivial repair as the unsticking of this door. Finally, there is a recent decision of this court in Duke of Westminster v Guild [1985] QB 688; [1984] 3 All ER 144, in which the judgment was delivered by Slade LJ. He referred to two decisions in which an obligation on landlords had been implied to do certain work, in the first case the cleaning of the common parts of premises and in the [page 266] second painting the premises (see [1985] QB 688, 696–7; [1984] 3 All ER 144 at 149). These obligations were implied from terms imposed on the tenants to pay for the cost of a cleaner in the first case and for the cost of the necessary paint in the second. The position in those cases was of course far stronger than here. Before quoting the general proposition from Woodfall on Landlord and Tenant, 28th ed, 1978, para 1-1465, which I have already set out, Slade LJ said ([1985] QB 688 at 697; [1984] 3 All ER 144 at 149): We do not question the correctness of these two decisions on their particular facts, or doubt that in some instances it will be proper for the court to imply an obligation against a landlord, on whom an obligation is not in terms imposed by the relevant lease, to match a correlative obligation thereby expressly imposed on the other party. Nevertheless we think that only rather limited assistance is to be derived from these earlier cases where obligations have been implied.

Then he referred to the proposition in Woodfall which I have read. So it follows that a repairing obligation on the landlord can clearly arise as a matter of implication. See also McAuley v Bristol City Council [1992] QB 134 at 146–52 (and All ER Rev 1992 pp 243–4) for a review of the principles and authorities on when an obligation on the landlord to do repairs can be implied (and as to the principles of construction generally, including the implication of terms, see [6.3]); see also Crédit Suisse v Beegas Nominees Pty Ltd [1994] 4 All ER 803 at 819. More recently, Barrett v Lounova was considered in Carrathool Hotel Pty Ltd v Scutti [2005] ANZ ConvR 471; (2006) NSW ConvR ¶56-132; [2005] NSWSC 401 (per White J). After reaffirming the general principle that there is no implied covenant in leases of non-residential premises that the premises will be fit for the permitted use or that the landlord will carry out any repairs (see Duke of Westminster v Guild, above), White J said: [41] Counsel for the defendants referred to the decision of the English Court of Appeal in Barrett v Lounova (1982) Ltd [1989] 1 All ER 351, where the lease contained a covenant by the tenant to carry out inside repairs to leave the inside of the premises and fixtures in good repair, order and condition. Kerr LJ, with whom Swinton Thomas J concurred, held that it should be inferred from the obligation imposed upon the tenant to carry out repairs to the inside of the house, that the landlord should carry out necessary repairs to the exterior of the house which if not done would prevent the tenant from being able to comply with its covenant. [42] Barrett v Lounova (1982) Ltd was considered by Balmford J in the Supreme Court of Victoria in Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 584; [2002] VSC 272. Her Honour (at [29]), doubted whether it is possible to imply into a simple lease, where there is no relationship between the parties other than that of landlord and tenant, an obligation on the landlord to repair and maintain the structure of the leased premises. Her Honour noted that a number of text writers, including Woodfall, have disapproved of the reasoning in Barrett v Lounova (1982) Ltd. The decision was also criticised in Dowding and Reynolds, The Law of Dilapidations, 3rd ed, pp 379–380. In Adami v

Lincoln Grange Management Ltd [1998] 1 EGLR 58, Vinelott LJ (with whom the other members of the Court of Appeal agreed) held that Barrett v Lounova (1982) Ltd was to be taken to have been decided on its own special facts. Woodfall concludes [page 267] that it is probably no longer safe to rely on Barrett v Lounova (1982) Ltd (Woodfall, Landlord and Tenant, Vol 1, para 13.007.2). My principal difficulty with the reasoning in Barrett v Lounova (1982) Ltd is that prima facie the obligation to do that which is necessary to carry out a repairing obligation, would be imposed on he who had that obligation. Further, it is perfectly possible for premises to be leased with neither the lessor nor the lessee having an obligation to carry out repairs, or repairs of a certain kind (Adami v Lincoln Grange Management Ltd at 61). Even if it were necessary to imply a term as a corollary of a tenant’s obligation to repair the inside of a building, that the landlord would effect such repairs to the outside of the building which, if not done, would prevent the tenant from keeping the inside in repair, that is not a term for which either party contends in the present case. See also Alliance Accounting & Business Consultants Pty Ltd v Australian Property Investment & Development Pty Ltd (SC(NSW), White J, 19 June 2007, unreported) at [16]; and Fallon Street Properties Pty Ltd v Steel & Stuff Pty Ltd [2006] ANZ ConvR 21; [2006] NSWCA 296 (BC200608775) at [25]–[28] (per Basten JA). Now that it is established that contractual doctrines apply to leases there seems no reason in principle why, in more extreme cases, a tenant could not argue frustration or repudiation as a result of the landlord’s failure to repair: see [6.10], [16.26]. (In England, for the circumstances in which an obligation to repair a dwelling house will be implied by statute, see Halsbury, 5th ed, para 303). Where, however, the landlord retains various parts of a building such as stairways, lifts or rubbish chutes which are necessarily used by tenants in order

to enjoy their respective leaseholds which are located in the same building, easements or rights in the nature of easements over such areas are implied into the respective leases and the landlord is bound to take reasonable care to maintain such common parts of the building. Failure to do so may render the landlord liable to pay damages to the tenants: Liverpool City Council v Irwin [1976] 2 All ER 39. Similarly, a landlord is under a duty to take reasonable care to prevent the consequences of flooding from a burst water pipe: Stockley v Knowsley Metropolitan Borough Council [1986] 2 EGLR 141 (CA); but compare Westminster (Duke of) v Guild [1985] QB 688 (CA) where it was held there was no implied covenant to keep a drain in repair over which the tenant had exercised an easement. As to the lessee’s right to use common areas, such as passageways or lavatories, see Dowse v Wynyard Holdings Ltd [1962] NSWR 252; Dillon v Nash [1950] VLR 293; Miller v Emcer Products [1956] Ch 304. Similarly, where the landlord lets a shop but retains possession of the flat roof above it he or she is under a duty of care to the tenant of the shop to take reasonable steps to prevent water from escaping from the roof into the shop. If he or she fails to take such action he or she may be liable for any damages suffered by the tenant as a result of the breach: Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15. But where a flat contained a refrigerator operated by a central apparatus located outside the demised premises, it was held that an obligation on the part of the landlord to supply [page 268] motive power to the refrigerator or to maintain the central plant was not implied: Penn v Gatenax Co Ltd [1958] 2 QB 210. In view of the decision of the House of Lords in Liverpool City Council v Irwin [1977] AC 239, Penn v Gatenax is unlikely to be applied. As to whether the tenant must continue to pay rent notwithstanding the landlord’s failure to maintain the area retained by him or her, see [7.4] and Chapter 11. The exception of wear and tear from the tenant’s covenant to repair does not impose any obligation upon the landlord to make good damage due to wear and tear: Arden v Puller (1842) 10 M & W 321; 152 ER 492; Collins v Winter [1924] NZLR 449. Even if the premises are destroyed by a

conflagration, the landlord may, if he or she has insured the premises, receive the insurance moneys and refuse to rebuild (Lofft v Dennis (1859) 1 E & E 474; 120 ER 987; but see Lonsdale & Thompson Ltd v Black Arrow Group plc [1993] Ch 361) although the tenant, being a ‘person interested’ within the meaning of provisions based on s 83 of the Fires Prevention (Metropolis) Act 1774 (Eng) (14 Geo III, c 78): see Property Law Act 1974 (Qld) s 58 may require the insurer to rebuild instead of paying the insurance moneys to the landlord. The Imperial legislation has been held to apply in South Australia (Havelberg v Brown [1905] SALR 1; Young v Tilley [1913] SALR 13) and Western Australia (Goldman v Hargrave (1966) 115 CLR 458 at 468) but its repeal by the Commonwealth Insurance Contracts Act 1984 (s 3(1)) has effected a repeal of the Imperial legislation as it applied to those states: see Kirmani v Captain Cook Cruises Pty Ltd (1985) 59 ALJR 265; 59 ALJR 480. No equivalent of the Imperial legislation is now in force in New South Wales or Victoria following the repeal of colonial and state legislation adopting its provisions by the City of Sydney Improvement Act 1879 (NSW) and the Sale of Land (Amendment) Act 1982 (Vic): Searl v South British Insurance Co [1916] NZLR 137; see also Mumford Hotels Ltd v Wheler [1964] Ch 117; [1963] 3 All ER 250 and Re King (dec) [1963] Ch 459; 1 All ER 781. As to the tenant’s insurable interest, see Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211. The tenant may be unsuccessful, however, in his or her invocation of such a provision if he or she is personally bound to rebuild: see Mark Rowlands Ltd v Berni Inns Ltd. In Beacon Carpets Ltd v Kirby [1985] QB 755, the lease of a warehouse provided that the tenants were to pay a sum in addition to the rent equal to the premium payable to insure the premises against fire and other risks. The landlords covenanted to keep the premises fully insured and, in the event of destruction or damage, to expend all insurance moneys received in reinstating the premises. The premises, which were destroyed by fire, were substantially underinsured. As a result of their subsequent acts the landlord and tenant were held to have released their right to have the premises reinstated and, not having reached agreement on how the insurance moneys were to be dealt with, were held to have an interest in the moneys in shares proportionate to their respective interests in the property insured. See also Mark Rowlands Ltd v Berni Inns Ltd. As to the meaning of ‘totally destroyed’ with respect to leased premises, see Re Precision Street Industrial Property Pty Ltd [1994] 2 Qd R 614.

[page 269]

Implied obligation of tenant as to user [10.2] Tenants are under an implied obligation to use the premises in a tenant-like manner. The content of this obligation is discussed in [8.6]. The obligation is distinct from the obligation not to commit waste: Regis Property Co Ltd v Dudley [1959] AC 370 at 407; [1958] 3 All ER 491. Waste is considered in [10.3].

Waste [10.3] The nature of ‘waste’, an ancient legal concept, was described by Blackstone (3 Bla Comm 223) in the following terms: Waste is a spoil and destruction of the estate, either in houses, woods or lands; by demolishing not the temporary profits only, but the very substance of the thing; thereby rendering it wild and desolate; which the common law expresses very significantly by the word vastum; and … this vastum, or waste, is either voluntary or permissive; the one by actual and designed demolition of the lands, woods and houses; the other arising from mere negligence, and want of sufficient care in reparations, fences and the like. The destruction of demised premises by a fire caused through the negligence of the tenant is commissive and not permissive waste: Anderson v James (1908) 28 NZLR 34; similarly where the premises were intentionally destroyed by fire by an employee of the tenant acting outside the course of his or her employment: Combara Nominees Pty Ltd v McIlwraith-Davey Pty Ltd (1991) 6 WAR 408 (FC). Waste includes positive acts such as demolition of the demised premises which is injurious to the reversion, the injury usually being the diminution in its value: see Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2007) ANZ ConvR 297; [2007] FCA 708 at [64] (per Tracey J), referring to Marsden v Edward Heyes Ltd [1927] 2 KB 1. As the Bowen Investments case indicates, damage is an element of the cause of action for

waste (see at [67] and [68]); but see, on appeal, [2008] FCAFC 38 where an appeal was allowed on other bases, and which appeal was subsequently upheld in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272. The action for waste is an action in tort; for an account of the history of the action, see Woodhouse v Walker (1880) 5 QBD 404; see also Marsden v Edward Heyes Ltd; Mancetter Developments Ltd v Garmanson Ltd [1986] QB 1212 at 1217–20; and Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2007] FCA 708 (but see, on appeal, [2008] FCAFC 38, where an appeal was allowed on other bases, and which appeal was upheld in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272). How far tenants of the various classes are liable for waste is not entirely clear. The holder of a term of years is liable for voluntary waste; the better view appears to be that he or she is also liable for permissive waste: Yellowly v Gower (1855) 11 Ex 274 at 293–4; Davies v Davies (1888) 38 Ch D 499; Reihana Terekuku v Kidd [1885] NZLR 4 SC 140; for the contrary view see Avis v Newman (1889) 41 Ch D 532; and compare Brian Stevens Pty Ltd v Clarke [page 270] (1965) 83 WN (Pt 1) (NSW) 32. A tenant from year to year is liable for voluntary waste; whether he or she is also liable for permissive waste is not clear; probably he or she is not: Torriano v Young (1833) 6 C & P 8; see also Warren v Keen [1954] 11 QB 15; [1953] 3 All ER 521. An action lies against a weekly tenant for voluntary waste, but not for permissive waste: Warren v Keen (QB) at 21. The position is the same in the case of a monthly tenant: Regis Property Co Ltd v Dudley [1959] AC 370 at 407; [1958] 3 All ER 491. Removal of tenant’s fixtures without making good the damage, being in excess of the tenant’s right of removal, is waste actionable in tort, the liability to make good the damage being a condition of the tenant’s right of removal: Mancetter Developments Ltd v Garmanson Ltd at 1219–20. If the damage is covered by a relevant covenant, the landlord has an election whether to sue in tort or on the covenant: see Mancetter Developments Ltd v Garmanson at 1219– 20; see also [8.6]. In the absence of an express provision in the lease, the benefit of a covenant implied by statute (such as No 22 in the Fourth

Schedule to the Conveyancing Act 1919 (NSW)), or the benefit of express statutory provisions, a tenant would commit voluntary waste by removing emblements or fixtures: see [10.4] and [10.5] where the right to remove emblements and fixtures is discussed.

Emblements [10.4] Section 35 of the Landlord and Tenant Act 1958 (Vic) previously preserved the tenant’s rights to take emblements. Since August 2010, that section has been repealed, and not replaced, and will continue to apply only to leases entered into before 1 August 2010. The right to take emblements extends only to cultivated crops which ordinarily repay the labour by which they are produced within the year in which that labour is bestowed: Graves v Weld (1833) 5 B & Ad 105; 110 ER 731, and is enjoyed only by tenants who have an uncertain lease. A tenancy from year to year is an uncertain interest: Graves v Weld; Kingsbury v Collins (1827) 130 ER 746 at 748. The right to harvest emblements may apply to all periodic tenancies: Kirby v Caruso [1976] Qd R 164. The right to take emblements does not arise where the tenancy is determined by the tenant’s own act or by forfeiture (Davis v Eyton (1830) 7 Bing 154). A person entitled to emblements is entitled to enter and gather the crop after the estate has determined: Kingsbury v Collins; see also Kirby v Caruso. Section 26 of the Victorian Act substituted for the right to take emblements the right to hold until the expiration of the current year of the tenancy and has similarly been repealed from 1 August 2010 and not replaced; it applied to all tenancies in respect of which there might be a claim to emblements; Haines v Welch (1868) LR 4 CP 91.

Fixtures [10.5] As with many general rules of law which are applied to freehold property, there is sometimes a need for some modification or adaptation with respect to leases.

[page 271] This usually follows from the, generally, more limited extent of enjoyment of the premises available to a tenant, at least in terms of time. There are also practical, and economic, considerations which, if not taken into account, would have the potential to make leasehold property unattractive. The development of the law of fixtures with respect to the attaching of tenant’s chattels to the freehold for the enjoyment of the demised premises, economically or otherwise, is the development of one of those adaptations. The judgment of Olsson J in Wincant Pty Ltd v State of South Australia (1997) 69 SASR 126 (FC) summarised the general law position and its application to leases (at 142–3): One therefore commences with a consideration of the legal concept of what constitutes a fixture and the legal incidents related to it. A useful starting point is what fell from Matheson J in Pan Australian Credits (SA) Pty Ltd v Kolim Pty Ltd (1981) 27 SASR 353 at 355–6. He there indicated that one of the clearest expositions of the principles applicable to determining what is, in law, a fixture is to be found in the judgment of Jordan CJ in Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR (NSW) 700 at 712. As the learned Chief Justice pointed out in the latter case, the legal concept of a fixture involves the notion that an item, which is originally a chattel, becomes, in law, land, by virtue of having been fixed to it. Whether that transformation actually occurs in particular circumstances depends upon whether the chattel has, in fact, been fixed to the land and, if so, how and for what purpose. At common law if a chattel is actually fixed to the realty to any extent, by any means other than its own weight then, prima facie, it is a fixture. The test is whether it has been fixed with the intention that it shall remain in position permanently, or at least for an indefinite or substantial period; or whether it is merely in situ for a temporary purpose (Holland v Hodgson (1872) LR 7 CP 328 at 335–7). Jordan CJ commented:

If a thing has been securely fixed, and in particular, if it has been so fixed that it cannot be detached without substantial injury to the thing itself or to that to which it is attached, this supplies strong, but not necessarily conclusive, evidence that a permanent fixing was intended. He cites abundant authority for that proposition, to which I would add a reference to Billing v Pill [1954] 1 QB 70. It is abundantly clear, on the authorities, that the basic common law rule was, and still is, that, in general, fixtures, properly so characterised, having become part of the relevant realty, pass with it — quicquid plantatur solo, solo cedit. That principle originally applied without exception. However, as Dillon LJ indicated in Mancetter Developments Ltd v Garmanson Ltd and Another [1986] QB 1212 at 1218 (‘Mancetter’), the absolute rule came to be mitigated over time. As he pointed out, the mitigation ‘came about — not by any change in the concept of what is a fixture, but by a qualification of the tenant’s obligation not to remove fixtures once they had been affixed to the land: See per Kindersley V-C in Gibson v Hammersmith and City Pty Co (1863) 2 Drew & Sm 603 at 608; 62 ER 748 at 750’. [page 272] Dillon LJ further directed attention to the fact that the precise nature and degree of mitigation in question also underwent development over time, particularly as to issues such as rectification of damage caused by any removal. Be that as it may, the common law evolved the concept that it was appropriate to draw a distinction between what came to be known as ‘landlord’s fixtures’, on the one hand and so-called ‘tenant’s fixtures’, on the other. In simple terms the former were all fixtures which could not properly be placed in the latter category; and as to which the original common law rules continued to operate unabated.

A chattel is a fixture if it was attached to the freehold not for the enjoyment of the chattel itself, but for the better enjoyment of the freehold: In re Whaley [1908] 1 Ch 615; Love v Bloomfield [1906] VLR 723; Craven v Geal [1932] VLR 172; Isaacs v Lord [1920] VLR 274. In order to determine the purpose with which a chattel was affixed to the freehold, the nature of the chattel itself and the degree and object of the annexation should be looked at; no regard can be paid to declarations of intention: see Love v Bloomfield; Re May Bros Ltd [1929] SASR 508; Hobson v Gorringe [1897] 1 Ch 182; Registrar of Titles v Spencer (1910) 9 CLR 641; and see Commissioner of Stamps (WA) v Whiteman Ltd (1940) 64 CLR 407. More recent authorities reaffirm that the test is an objective one; a matter of imputed intention having regard to all relevant circumstances, including the degree of annexation, the nature of the chattel, the use to which it is to be put and the nature of the building or other property to which it has been annexed: see Famous Makers Confectionery Pty Ltd v Sengos (1993) 6 BPR 13,222, referred to with approval by Murray J in Aus-game Pty Ltd v D’Orsogna Bros Pty Ltd [1996] ANZ ConvR (SC(WA)); and see Berkley v Poulett [1977] 1 EGLR 87 (CA); and Re Starline Furniture Pty Ltd (In Liq) (1982) 6 ACLR 312 at 313–14 (per Neasey J) (Tas SC); see also Lyndon Griggs, ‘The Doctrine of Fixtures: Questionable Origin, Debateable History and a Future that is Past!’ (2001) 9 APLJ 51. This approach was also reaffirmed by the House of Lords in Elitestone Ltd v Morris [1997] 1 WLR 687; [1997] 2 All ER 513; [1998] ANZ ConvR 478 with respect to a house built in such a way that it could not be removed except by destruction; which led to the objective assessment that it could not have been intended to remain a chattel and must have been intended to form part of the realty. In spite of the general abhorrence with which the courts usually treat subjective intention as in any way determinative of rights, it would put the position too high to say that subjective intention has absolutely no relevance. Thus, in Scott & Sally Dixon Investment Co Pty Ltd (in liq) and Ors v Woakwine Industries Pty Ltd [2002] SASC 161, Perry J said: [80] For an illustration of how little weight may sometimes be placed on the subjective intention of the parties, see Deventer Pty Ltd v BP Australia Ltd [[1983–4] ANZ ConvR 311]. But on the other hand, in determining whether a chattel has become part of the realty, the actual intention of the owner of the chattel is not irrelevant. It remains one

of the circumstances to be taken into account: see Dunn Pty Ltd v Ericsson Pty Ltd [[1979–80] ANZ ConvR 301] where Mahoney JA observed [at 303]: [page 273] The actual or subjective intention of the parties and, a fortiori, of one of them, is, no doubt, not conclusive as to the status of the chattel. But I do not think that the intention of the owner of the chattel is irrelevant. The issue of subjective intent should also be viewed against the general rule that the question whether or not a chattel has become part of the realty is one of law and not susceptible of agreement or declaration by the parties, though the parties are free to agree on the ultimate fate of a chattel, whether or not characterised as a fixture at law: see Melluish v B.M.I. (No 3) Ltd [1996] AC 54 (HL); and see Elitestone Ltd v Morris. Thus, Lord Browne-Wilkinson said in that case (at 473): The terms expressly or implicitly agreed between the fixer of the chattel and the owner of the land cannot affect the determination of the question whether, in law, the chattel has become a fixture and therefore in law belongs to the owner of the soil: … The terms of such agreement will regulate the contractual rights to sever the chattel from the land as between the parties to that contract and, where an equitable right is conferred by the contract, as against certain third parties. But such agreement cannot prevent the chattel, once fixed, becoming in law part of the land and as such owned by the owner of the land so long as it remains fixed. And it follows that a different result cannot be obtained by relying upon an estoppel on the basis of the common assumption of the parties: see Elitestone Ltd v Morris. The onus lies on the party seeking to establish an item is a chattel: see Holland v Hodgson. Further, as to the general principles, see Australian Provident Assurance Co Ltd v Coroneo; N H Dunn Pty Ltd v L M Ericsson Pty Ltd (1979) 2

BPR 9241; Sanwa Australia Leasing Ltd v National Westminster Finance Australia (1989) NSW ConvR 55-437; National Australia Bank Ltd v Blacker (2000) 104 FCR 288 (where Conti J collected many of the authorities); Macrocom Pty Ltd v City West Centre Pty Ltd (2001) 10 BPR 18,631; Scott & Sally Dixon Investment Co Pty Ltd (in liq) v Woakwine Industries Pty Ltd [2002] SASC 161; Re Cancer Care Institute of Australia Pty Ltd (admin apptd) (2013) 16 BPR 31,529; and Power Rental Op Co Australia, LLC v Forge Group Power Pty Ltd (in liq) (recs and mgrs apptd) (2017) 18 BPR 36,615. In Macrocom Windeyer J considered whether a satellite dish and transmit technical components were fixtures or chattels and noted that the critical considerations tend to overlap (at 10 BPR 18,636): [20] It is often stated when considering the purpose of annexation the court should look to see whether the attachment was for the better enjoyment of the property generally, (that is the item) or for the better enjoyment of the land or buildings to which the article is attached. These considerations tend to overlap. For instance, the evidence established that it was necessary to set the dish carefully so far as direction was concerned and at least when attached to the framework on top of the roof it was necessary to secure the dish by bolts. It could not have stood there unattached. On the other hand for the purpose of the lease being of any benefit to the lessee/plaintiff, it was necessary to have the dish attached to the premises which would otherwise have been useless from the lessee’s point of view. This was a building erected and fitted for high technology satellite based communications; the leased premises were of no benefit without the dish and it was of no use unless fixed. [page 274] So long as the chattel can be removed without doing irreparable damage to the premises, neither the method of attachment, nor the degree of annexation, nor the quantum of damage that would be alone either to the chattel itself or to the premises by the removal, has any bearing on the question, except insofar as it throws a light upon the question of the intention with which the

chattel was affixed: Spyer v Phillipson [1931] 2 Ch 183; [1930] All ER Rep 457; and see Elitestone Ltd v Morris. A number of Australasian decisions on fixtures are conveniently summarised in 3 ALJ 405. See also Kay’s Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429. The general rule is that fixtures become part of the property demised and must be delivered up to the landlord on the determination of the tenancy. The tenant may, however, during or at the expiration of his or her term remove fixtures erected by him or her for ornament or domestic convenience (Grymes v Boweren (1830) 6 Bing 437) or for the purposes of trade: Poole’s case (1703) 1 Salk 386; Elwes v Maw (1802) 3 East 38; [1775–1802] All ER Rep 320; Weller v Everitt (1900) 25 VLR 683; Re May Bros Ltd; Geita Sebea v Territory of Papua (1941) 67 CLR 549. The distinction between ‘tenant’s fixtures’ and ‘landlord’s fixtures’ was described by Denning MR in New Zealand Government Property Corp v HM & S Ltd [1982] QB 1145 at 1157 in the following terms: The term ‘tenant’s fixtures’, for present purposes, mean those fixtures which the tenant himself fixed into the premises for the purpose of his trade, that is for the business of the theatre, but which do not become part of the structure itself. Instances are the seats for the stalls, or auditorium, which are fixed by screws or bolts to the floor, wall brackets for lights which are screwed on to the wall, electric transformers fixed on to the floor, and so forth. All these the tenant is entitled to remove when his term comes to an end. Whereas ‘landlord’s fixtures’ for present purposes means those fixtures which the tenant himself fixes into the premises so that they become part of the structure itself: see Boswell v Crucible Steel Co [1925] 1 KB 119; [1924] All ER Rep 298. Instances are improvements made by the tenant by putting in new doors or windows in place of those that were there before, or a new frontage or a new safety curtain. These improvements become part of the structure itself. The tenant cannot remove them when his term comes to an end. All this goes back to the time of Holt CJ. In 1795 he had before him Poole’s Case (1703) Holt KB 65; 90 FR 934. A soap boiler was the tenant for years of a house in Holborn. For the convenience of his trade he put up vats and coppers and paved the back yard. Holt CJ said (Holt KB 65 at 66; 90 ER 934):

During the term the soap-boiler might well remove the vats he set up in relation to his trade; and that by the common law (and not by virtue of any special custom) in favour of trade: but after the term they become a gift in law to the reversioner. There is a difference between what he did to carry on his trade, and what he did to compleat the house, as hearths & c chimney-pieces, which are removable. See also, for example, Macrocom Pty Ltd v City West Centre Pty Ltd where Windeyer J would, had it been in issue, have held that a satellite dish was a tenant’s fixture (see 10 BPR at 18,636, [21]); and see Vesco Nominees Pty Ltd v Stefan Hair Fashion Pty Ltd (2001) [page 275] Q ConvR ¶54-555 at [15]–[24] (per Muir J); and see the passages of the judgment in this case extracted in A Hyam, The Law Affecting Rent Review Determinations, 2nd ed, Federation Press, Sydney, 2014, at pp 153–56, particularly at 154. The right of a tenant to remove tenant’s fixtures remains during his or her possession of the premises after the expiration of the term, subject to any agreement to the contrary, a right which is not lost if a new lease is taken provided the tenant remains in possession: New Zealand Government Property Corp v HM & S Ltd. Denning MR, expressing views shared by the other members of the court, considered the basis of the ‘correct rule’ (at 1157–8): In the present case the question arises: if the term expires by effluence of time or by surrender, and the tenant remains in possession by virtue of a new tenancy express or implied, can he still remove the ‘tenant’s fixtures’ during his extended time of possession? Or did he lose them irretrievably when his original term came to an end? There are many statements in the textbooks to the effect that the tenant loses them when his original term comes to an end. Woolf J quotes the textbooks at length. I think those textbooks are wrong. In my opinion the tenant remains entitled to remove the ‘tenant’s fixtures’ so long as he remains

in possession. That was decided in Penton v Robart (1801) 2 East 88; 102 ER 302. Robart was under-tenant of a yard and buildings at Battlebridge. During his sub-tenancy he erected a wooden shed for the purpose of making varnish. It had a brick foundation. The original term expired at Michaelmas 1800. He remained in possession for some time afterwards, and during that time he pulled down the wooden superstructure of the shed and carried away the utensils. The head landlord claimed that they belonged to him. The Court of King’s Bench held that the tenant was entitled to remove them. Lord Kenyon CJ said (2 East 88 at 90; 102 ER 302 at 303): The old cases upon this subject leant to consider as realty whatever was annexed to the freehold by the occupier: but in modern times the leaning has always been the other way in favour of the tenant, in support of the interests of trade which is become the pillar of the state. What tenant will lay out his money in costly improvements of the land, if he must leave every thing behind him which can be said to be annexed to it … Here the defendant did no more than he had a right to do; he was in fact still in possession of the premises at the time the things were taken away, and therefore there is no pretence to say that he had abandoned his right to them. (My emphasis.) That case was distinguished in Weeton v Woodcock (1840) 7 M & W; 151 ER 659, but not doubted. The landlords let a cotton factory to Taylor for seven years. Taylor installed a steam engine boiler, firmly fixed to the floor and walls of the enginehouse. Taylor became bankrupt. His property vested in his assignees, Woodcock and others. They entered into possession of the factory. The landlords then forfeited the lease for breach of covenant by Taylor. So it came to an end. The assignees then sold the boiler and removed it. The landlords claimed that the assignees had no right to sell the boiler because the term had already come to an end, and the tenant no longer remained in possession. The Court of Exchequer held that the assignees were not entitled to remove the boiler. After the lease

was forfeited, they held on, not as tenant nor by agreement with the landlords, but [page 276] as trespassers. So they had no right to remove the boiler. Alderson B in giving the reserved judgment of a strong court said (7 M & W 14 at 19; 151 ER 659 at 661): The rule to be collected from the several cases decided on this subject seems to be this, that the tenant’s right to remove fixtures continues during his original term, and during such further period of possession by him, as he holds the premises under a right still to consider himself as tenant. (My emphasis.) The rule applies where the tenant retains possession under a bona fide claim of right to be there as a tenant (D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317); as a tenant at sufferance (Braidwood v Dunn [1917] NZLR 269), or a result of holding over: Cockburn v Cockburn [1921] NZLR 652; Weeton v Woodcock (1840) 7 M & W 14 at 19; Leschallas v Woy [1908] 1 Ch 641; and see Landlord and Tenant Act 1958 (Vic) s 28(2) (now repealed and replaced by s 154A of the Property Law Act 1958 (Vic) – see LL&T Comparative Table; and see Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd [2006] NSWSC 804. It follows that the right to remove fixtures is lost once the tenant is out of possession (Skylark Pty Ltd v Penhale Pty Ltd (SC(NSW), Cohen J, 3 December 1986, unreported); D’Arcy v Burelli Investments Pty Ltd; and see McMahon’s (Transport) Pty Ltd v Ebbage [1999] 1 Qd R 185 (CA); but this may be subject to exceptions, where the term has suddenly determined by forfeiture (Braidwood v Dunn; Abau Holdings Pty Ltd v J & C Reid Pty Ltd (No 2) (SC(NSW), Young J, 20 March 1987, unreported) and, on appeal, (1988) NSW ConvR ¶55-416; and see McMahon’s (Transport) Pty Ltd v Ebbage at 198 (per Pincus JA); and Kyriacou v Manakis [2006] NSWSC 804 at [25]–[28] (per White J)); where the lease has been mortgaged (Meux v Jacobs (1875) LR 7 HL 481); and where the lease was for an uncertain

period, such as a tenancy at will or a life tenancy (see D’Arcy v Burelli Investments Pty Ltd at (1987) 8 NSWLR 322–3 (per Young J); referred to in Kyriacou v Manakis at [25] (per White J)). In these circumstances it appears that a reasonable time after the termination of the lease will be allowed for the purpose of removing tenant’s fixtures, in favour of the tenant or any mortgagee (and, in the latter case, where there are competing claims by mortgagees, it would follow that the mortgagee claimant ranking in priority to any others would have the prior entitlement). A tenant at will who has erected trade fixtures during his or her tenancy has a reasonable time after the determination thereof within which to remove the fixtures: Clarke v Tresider (1867) 4 WW & A’B (L) 164; Bacchus Marsh Brick and Pottery Co Ltd (in liq) v Federal Building Society (in liq) (1895) 22 VLR 181. Young CJ, in Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd, said (at [25]), as a general statement, that ‘when a lease comes to an end the tenant may remove a trade fixture’. However, his Honour continued (at [25]): There is some arcane law as to whether the fixture must be removed before the end of the fixed term lease or whether in a reasonable time thereafter and what happens if there is a holding over for continuous occupation of the site by the tenant; see for instance D’Arcy v Burelli Investments Pty Ltd …; McMahon’s (Transport) Pty Ltd v Ebbage … [page 277] See also the discussion of this issue, on an interlocutory application, in Kyriacou v Manakis [2006] NSWSC 804 at [25]–[28] (per White J), in which reference was made to McMahon’s (Transport) Pty Ltd v Ebbage at 198 (per Pincus JA, with whom Davies JA and Dowsett J agreed): There is authority in favour of the view that once the tenant gives up physical possession, which in this case occurred on 31 August 1990, the right to remove fixtures is gone; see the discussion in D’Arcy v Burrelli Investments Pty Limited; (1981) 8 NSWLR 317. But the better view, and certainly one more in accordance with practical justice, is

that the right to remove continues for a reasonable time after a lease has been terminated … White J noted that the decision was not authority in relation to the effect of the sudden termination of the lease through forfeiture. In any event the statement of Pincus JA appears to have much to commend it as the more reasonable approach and one much more likely to accord with commercial realities and the likely intention of the parties had they turned their minds to such an issue. A similar position was reached in Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351 (CA) and Commissioner of State Revenue v Uniqema (2004) 9 VR 523 (CA), per Ormiston JA (with whom Phillips and Callaway JA agreed) at 546–7, [53] and [54], with reference to the provisions of the former s 28(2) of the Landlord and Tenant Act 1958 (Vic) (now repealed and replaced by s 154A of the Property Law 1958 (Vic) see below). As the cases indicate, the tenant’s right to remove tenant’s fixtures carries with it an obligation to make good any damage done to the demised premises as a result of their removal: see City West Centre Pty Ltd v Galaxy Media Pty Ltd (1998) 9 BPR 16,313. The rule is subject to any express provision in the lease to the contrary: see, for example, Wincant Pty Ltd v State of South Australia; City West Centre Pty Ltd v Galaxy Media Pty Ltd; and Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue. As the cases indicate, the regulation of ‘the often confusing and contentious claims to property left behind when a lease is terminated’ are the subject of a variety of clauses found in leases, which often use inconsistent terminology: see Curtin v Meadlow Holdings Pty Ltd (2001) Q ConvR ¶54-552 at [12] and [13] (per Thomas JA). In Cooney v Millar [1921] VLR 254 a lessee covenanted to erect buildings to be used as residences only, and to remove the buildings within three calendar months from the determination of the lease. It was held that the clause requiring removal within three months was inconsistent with the lessor’s ownership of the buildings, and that the lessee might remove them at any time, being, however, liable in damages for breach of covenant for not removing them within the period stipulated in the lease. A tenant who takes a new lease loses his or her right to remove fixtures unless there be some reservation of that right in the new agreement: Love v Bloomfield [1906] VLR 723.

In Bacchus Marsh Brick and Pottery Co Ltd (in liq) v Federal Building Society (in liq) it was held that, where there is an original term of years and then another tenancy after [page 278] that, the only ground upon which the lessee for the original term can claim a right, after the expiration of the original term, to remove trade fixtures put up during such term is that he or she has a right to do so during the continuance of the term, or so long afterwards as he or she has a right to consider him or herself a tenant. A lessee covenanted ‘to well and effectually uphold, support and maintain the said premises and all additions, improvements and fixtures which may be made thereto and keep the same in substantial, good and tenantable repair, order and condition’ and also ‘to keep and at the end of the tenancy to deliver up the whole of the said premises with all additions, improvements and fixtures belonging thereto to the said landlord in good order and repair as at present’. In Dawson v Stevenson [1920] VLR 564, during the tenancy the lessee erected at her own expense on the premises certain buildings which were admitted to be fixtures. It was held that, despite the use of the words ‘as at present’ in the second covenant, both covenants contained a ‘provision to the contrary’ within the meaning of the former s 28 of the Landlord and Tenant Act 1958 (Vic), and therefore the fixtures were not removable by the lessee. Lease provisions with respect to landlord’s contributions to fit out should be considered in this respect: see Kyriacou v Manakis. In this respect reference should also be made to s 154A of the Property Law Act 1958 (Vic), which replaces the former s 28(2) of the Landlord and Tenant Act 1958 (provisions unique to Victoria, at least within Australia) which, in part, provided: If any tenant holding lands by virtue of any lease or agreement … at his own cost and expense erects any building either detached or otherwise or erects or puts in any building fence engine machinery or fixtures for any purpose whatever (which are not erected or put in in pursuance of some obligation in that behalf) then, unless there is a provision to the contrary in the lease or agreement constituting the

tenancy, all such buildings fences engines machinery or fixtures shall be the property of the tenant and shall be removable by him during his tenancy or during such further period of possession by him as he holds the premises but not afterwards; notwithstanding the same consist of separate buildings or that the same or any part thereof may be built in or permanently fixed to the soil … This provision, and its legislative history, was considered in detail by Ormiston JA (with whom Warren CJ and Buchanan JA agreed) in Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue and the conclusion reached was that it operated according to the plain meaning of its terms (see at (2004) 12 VR 369–70, [39] and [40]); and see Commissioner of State Revenue v Uniqema (2004) 9 VR 523 (CA) where the broadest meaning was given to the meaning of tenant’s fixtures in this context and the position clarified that the effect of s 28(2) with respect to the proprietary rights of the landlord and the tenant also bound third parties (see Ormiston JA, with whom Phillips and Callaway JA agreed, at 546–7, [53] and [54]). The provisions of s 28(2) of the Landlord and Tenant Act 1958 (Vic) were repealed as from 1 September 2012 and replaced by the provisions of s 154A of the Property Law Act 1958 (Vic), in the following terms: [page 279] Tenant may remove buildings and fixtures (1) A tenant who at his or her own cost or expense has installed fixtures on, or renovated, altered or added to, a rented premises owns those fixtures, renovations, alterations or additions and may remove them before the relevant agreement terminates or during any extended period of possession of the premises, but not afterwards. (2) A tenant who removes any fixtures, renovations, alterations or additions under subsection (1) must— (a) restore the premises to the condition they were in immediately before the installation, renovation, alteration or

addition, fair wear and tear excepted; or (b) pay the landlord an amount equal to the reasonable cost of restoring the premises to that condition. (3) This section does not apply to the extent that— (a) the lease otherwise provides; or (b) the landlord and the tenant otherwise agree. Although the terminology of these provisions has changed it would appear that s 154A does, at least in substance, reflect the provisions of s 28(2) of the Landlord and Tenant Act. It is, of course, unfortunate that this issue should now arise as a result of repeal of a provision which had been judicially considered and reasonably settled since 1895. In the absence of a provision such as s 154A of the Property Law Act (or the former s 28(2) of the Landlord and Tenant Act) it would appear that the title to any tenant’s fixtures remains with the landlord unless and until they are actually severed from the freehold in the exercise of the tenant’s right of removal: see Bain v Brand (1876) 1 AC 762; Crossley Bros Ltd v Lee [1908] 1 KB 86; Cooney v Millar [1921] VLR 254; Starline Drive Inn Theatre Ltd v Commissioner of Taxation (1964) 112 CLR 458; and Wincant Pty Ltd v State of South Australia. This accords with the analysis of the authorities in Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue where Ormiston JA (with whom Warren CJ and Buchanan JA agreed) said (at (2004) 12 VR 362– 4): [24] On the other hand, this meaning appears contrary to conventional rules relating to fixtures, so that it is necessary to examine the background to the passing of s 28(2). The view customarily accepted in most of the authorities is that expressed by Dixon J in North Shore Gas Co Ltd v Commissioner of Stamp Duties (NSW) [(1940) 63 CLR 52 at 68]: … Though removable tenants’ fixtures may during the term be detached and become chattels belonging to the tenant, yet the better opinion appears to be that unless and until the tenant exercises his right of removal they form part of the realty [For this two authorities were cited: Halsbury’s Laws of England, 2nd

ed, vol 20, p 97 note o and Foa, Landlord and Tenant, 6th ed, (1924), p 771] … and for this reason, subject to the exercise of the tenant’s right to convert them again into chattels, pass with the land. His Honour’s cautious statement derives [see the discussion both in Halsbury (ibid) and in Foa, ibid, fns (x)–(y)] from the fact that in a number of authorities, especially at [page 280] the turn of the century, a view was expressed that tenant’s fixtures remained for the time being chattels owned by the tenant, although if the tenant failed to exercise the relevant rights of removal, then the fixtures would thereafter be treated as having been affixed permanently to the soil and forming part of the realty. Statements to this effect appear in particular in the judgment of Buckley J (later Lord Wrenbury) in Re Hulse [[1905] 1 Ch 406] where there was a dispute as to certain heavy machinery brought by a tenant onto a mill. After describing a number of the authorities and referring to the classification of tenant’s fixtures as being an exception to the general rule, his Lordship said [at 411]: … It is not that the law allows the tenant for years to remove part of the freehold, but that the chattels have not become part of the freehold. The exception makes them not part of the freehold. He therefore concluded that the machinery ‘never became part of the soil’ [at 412]. The same view was expressed by Fletcher Moulton LJ in Mowats Ltd v Hudson Bros Ltd (1911) 105 LT 400 at 403, but Buckley LJ appears to have had by then a change of heart, at least in relation to tenant’s fixtures: ibid. Perhaps what he said earlier should be confined to the rights of tenants for life, but his Lordship, as may be seen above, drew no distinction with tenants for years in Re Hulse]. [25] That the latter view was not so exceptional as, perhaps, it might

otherwise have appeared, is borne out by the decision only a few years later of the High Court in Registrar of Titles v Spencer [(1909) 9 CLR 641], where Re Hulse was expressly followed. The decision was the last of a well-known group of cases on valuation of land, and the issue was what value, if any, should be placed on tenant’s fixtures placed on the subject land by the tenant for life. The issue was essential to a claim for compensation against the Registrar of Titles for Western Australia pursuant to s 207 of the Transfer of Land Act 1893 (WA) arising from the wrongful issue of a certificate of title by the registrar. In reaching the conclusion that trade fixtures should effectively be ignored for this purpose the court expressly followed Re Hulse. Griffith CJ, after stating [at 646] that Re Hulse was ‘accepted as containing a correct statement of the law on the subject’, proceeded to distinguish the case where buildings on land should be included in the value of that land for relevant purposes, as had been held earlier, by saying [at 647]: But that is because buildings put on the land become (with some exceptions not here material) part of the land, whether put up by a tenant for life, tenant for years, or a trespasser; whereas trade fixtures put on land by tenants for life or years do not, or may not, become part of the land. Barton J likewise followed Re Hulse, setting out much of the reasoning in detail [at 650]. His Honour likewise distinguished the case of buildings on land saying [at 651]: They necessarily became part of the soil. Fixtures do not always become part of the soil, though they generally do so, and in such a case of trade fixtures as the present, I do not think they become part of it. In reaching the same conclusion O’Connor J said [at 653–4] that it was unnecessary to go beyond Re Hulse ‘for a full and accurate statement of the law on this point’. He therefore stated that the basic assumption must be ‘that the fixtures were placed on land by the tenant for life for the purpose of their use in trade and not for the purpose of making them a present to the freehold’ [at 654], and thus were to be ignored in valuing the land.

[page 281] Nevertheless it would seem that the position is not entirely clear, as in Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd Young CJ in Eq said: [26] Surprisingly there is still some uncertainty in the law as to what happens to tenant’s fixtures on the expiry of the lease. One theory is that the chattels never become part of freehold, even though they are securely annexed; see for instance Mowats Ltd v Hudson Brothers Ltd (1911) 105 LT 400. [27] The other theory is that they become part of the freehold but remain subject to a right in the tenant to detach them and make them chattels again; see for instance Horwich v Symond (1914) 110 LT 1016 affirmed by the Court of Appeal in (1915) 84 LJKB 1083. See also the treatment in Woodfall, The Law of Landlord and Tenant (28th ed, The Law Book Co Ltd, Sydney, 1978) paras 1–1572 and following and Lewis & Cassidy’s Tenancy Laws in NSW, Book 1 (Butterworths, Sydney, 1966) at pp 266 to 267. Unfortunately this question was not resolved in the Eye Corp Australia case. Express provision may be made in the lease for removal of fixtures or to define as a fixture a chattel that would not otherwise be a fixture: University of Melbourne v Avram Hotels Pty Ltd (1986) V ConvR ¶54-205. There is implied in a covenant by the tenant to remove fixtures a right to do so: Starline Drivein Theatre Ltd v Commissioner of Taxation. In determining the effect of the terms of the lease on the right of the tenant to remove fixtures it may be necessary to construe the provisions of the lease as a whole: see Young v Dalgety plc [1987] 1 EGLR 116 (CA); and see Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd (Young CJ in Eq). Conversely, it follows from the nature of the tenant’s right of removal, as a right that the tenant may or may not elect to exercise, that, absent a lease or other contractual provision to the contrary, a tenant is under no obligation to remove tenant’s fixtures on quitting the premises: see Never-Stop Railway (Wembley) Ltd v British Empire Exhibition (1924) Incorporated [1926] 1 Ch 877; and Wincant Pty Ltd v State of South Australia; but, as the latter case indicates, an obligation to remove may arise in the event that the tenant would not be able to comply with the lease

provisions in relation to delivery up of the demised premises in good and tenantable repair. See also Wincant at 69 SASR 128, where Doyle CJ commented on the approaches in the other judgments in that case (having noted the lack of authority on the point): … it seems to me consistent with principle to hold, as Matheson J does, that a tenant is entitled to remove tenant’s fixtures, but may be obliged by the landlord to remove them if their presence on the premises means that the premises are out of repair. This is to be contrasted with the result which Olsson J appears to reach, that a tenant is entitled to remove tenant’s fixtures or leave them at the tenant’s discretion, regardless of the effect of their presence upon the state of repair of the premises. See also Scott & Sally Dixon Investment Co Pty Ltd (in liq) v Woakwine Industries Pty Ltd [2002] SASC 161 at [90] (per Perry J, but in relation to the general law with respect to fixtures). However, it would appear that the difference between Matheson and Olsson JJ was not on the principles applicable to tenant’s fixtures and the entitlement [page 282] of the tenant to elect whether to remove them but, rather, the construction and effect of the delivery-up covenant, express or implied, in the context of the particular facts and circumstances: see at 69 SASR 137–8 (per Matheson J) and 144–5 (per Olsson J). As Olsson J commented, to require removal of tenant’s fixtures on the basis of an ordinary repair and delivery-up covenant or covenants which imposed no specific obligation on the tenant to remove the fixtures and fittings would be tantamount to a finding that the repair covenant was breached as soon as the items were affixed by the tenant, which is clearly at odds with the law with respect to tenant’s fixtures (see at 69 SASR 148). In some circumstances the landlord’s co-operation may be required to enable the tenant to remove fixtures which it is entitled to remove as tenant’s fixtures: see Eye Corp Australia Pty Ltd v Goliath Investments Pty Ltd (where the landlord was under an express obligation to sign any applications for consent

with respect to the sign, provisions which it was found enabled the tenant to require the landlord to sign an application to the municipality for consent to remove an outdoor advertising sign from the demised premises, which it was otherwise entitled to remove as a tenant’s fixture). Absent an express provision of the lease the tenant should, it seems, be able to call upon the general rule that each party to a contract implicitly agrees to do all things necessary to enable the other party to have the benefit of the contract: and see J Tarrant, ‘Tenant’s Fixtures: A Landlord’s Duty to Co-operate’ (2006) APLJ 217, where Butt v McDonald (1896) 7 QLJ 68 at 70–1 is referred to with respect to the general duty of co-operation applicable to contracting parties. See also Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 (CA), where the authorities are considered in relation to any implied obligation of good faith in performing obligations and exercising rights (at 363–9 per Sheller JA, with whom Powell and Beazley JJA agreed); and see [6.7]. Additionally, there may be third party rights to remove chattels from land according to the principles discussed in Fitzgerald v Kellion Estates Pty Ltd (1977) 2 BPR 9181, particularly by Hutley JA. Referring to that case, Young J said at DW & JA Edwards Pty Ltd v SHIH (1995) 7 BPR 14,405 (at 14,406): The Court came to the view that where the chattels of A are on the land of B but originally came onto the land of B innocently, then A can demand that B permit A to go onto the land and retrieve the chattels. See also Southern Cross Pumps and Irrigation Pty Ltd v Nicholls, Young, J, [(1995) 39 NSWLR 501] … The decision in Kellion’s case has been criticised by Professor Palmer in (1980) 9 Anglo-American Law Review 277 as being an unwarranted development in the law and one where Hutley JA was misled into a faulty analysis of the law by Lord Denning MR in Capital Finance Co Ltd v Bray [1964] 1 WLR 323, 329. See also Aitken, ‘The Abandonment and Recaption of Chattels’ (1994) 68 ALJ 263, 276. It should be noted that the rule in D’Arcy v Burelli Investments Pty Ltd (above), by reference to the New Zealand Government Property Corp case, does not apply to chattels: see Young J in Edwards v SHIH at 14,405. Subject to the terms of the lease, chattels

[page 283] brought onto the demised premises may be removed by the tenant at any time. Thus, Windeyer J said, in City West Centre Pty Ltd v Galaxy Media Pty Ltd at 9 BPR 16,315: ‘At common law, chattels that a tenant brings onto leased premises can be removed at will and should be removed prior to the termination of the lease. The failure to so remove tenant’s chattels prior to termination does not bring about any change of ownership’: and see Curtin v Meadlow Holdings Pty Ltd at Q ConvR ¶12 (per Thomas JA). The common law rules have been modified by statute: see Agricultural Tenancies Act 1990 (NSW) s 10; Property Law Act (Vic) 1958 s 154A; note also other statutory provisions, such as the Hire Purchase Act 1960 (NSW) s 35 (since repealed), under which only a bona fide purchaser of the reversion without notice of the owner’s rights in a fixture could defeat those rights: see Hire Purchase Act 1959 (Vic) s 27 (since repealed).

Covenants to repair and notice [10.6] A written lease almost invariably contains a repairing covenant or covenants, usually on the part of the lessee. A covenant to repair made at a time when it is known that planning permission will be required before the repairs can be lawfully carried out is subject to the proviso that the repairs need only be executed if permission is granted: Sturcke v S W Edwards (1971) 23 P & CR 185. Occasionally a covenant on the part of the lessor is to be found, especially in relation to the exterior of the premises. A covenant by the lessor to repair will often be construed as a covenant to repair on notice: Kreitmayer v Kennedy (1878) 4 VLR (L) 215; Torrens v Walker [1906] 2 Ch 166; [1904–7] All ER Rep 800; Kersey v Thomson [1947] NZLR 392; Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 at 608; [1958] 1 WLR 845; Chatfield v Elmstone Resthouse Ltd [1975] 2 NZLR 269; Austin v Bonney [1999] 1 Qd R 114; McKinnon v Kirdy [2003] QSC 302; Carrathool Hotel Pty Ltd v Scutti [2005] ANZ ConvR 471; and Gration v C Gillan Investments Pty Ltd [2005] 2 Qd R 267 (CA). The approach of the courts in this respect was

summarised and explained by Atkin LJ in Morgan v Liverpool Corporation [1927] 2 KB 131 (at 149–50): If it had been an express term I think there would be no doubt that in ordinary circumstances the obligation of the landlord to do repairs does not come into existence until he has had notice of the defect which his contract to repair requires him to make good. The reason for that is obvious. The landlord has given the tenant exclusive occupation of the house. The landlord, therefore, is not in a position to know whether the house is in repair or out of repair, and it is held that it would be quite contrary to justice to impose an obligation to repair of this kind upon a landlord in respect of matters of which he has in fact no knowledge. It appears to me that the reason for reading in that condition depends, and depends in truth and in fact, solely upon that consideration; he has given the exclusive occupation of the house to his tenant and the landlord does not know, and, more than that, he has not the means of knowledge. The result is, to my mind, that in all cases of that kind, speaking generally, it is a condition of [page 284] the liability of the landlord that he should receive notice of the repairs. Any other view would certainly impose a very considerable hardship upon the landlord … And see further McCarrick v Liverpool Corporation [1927] AC 219. The basis for the different approach with respect to landlord’s repair covenants was expressed more recently in similar terms, though in a slightly different context, in Gration v C Gillan Investments Pty Ltd with reference to Northern Sandblasting, by Williams JA, as follows: [5] Why there should be such a distinction was clearly explained by Gaudron J in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 359, where she said: If the position is considered at or immediately prior to the

commencement of the lease, the relationship is not unlike that of occupier and invitee in that the state of the premises is known to, or can be ascertained by the landlord. Moreover and as in the case of an occupier, the landlord is in a position of control in relation to the premises. In particular, the landlord is in a position to control the state in which the premises are let. … Once a tenancy commences, there is an important change in the features of the relationship which bear on the question of the landlord’s liability in negligence. Generally speaking, it is the tenant who is then in a position to ascertain and control the state of the premises. And again generally speaking, if defects develop during the tenancy, the landlord will become aware of them only if informed of their existence by the tenant or by members of the tenant’s household. [6] Much the same was said by her Honour in Jones v Bartlett (2000) 205 CLR 156 at 192: ‘… what was reasonable would vary according to whether or not the tenants were in possession. Thus, before the tenancy commences, it was reasonable both to inspect the premises and to remedy existing defects that gave rise to a foreseeable risk of injury.’ Also in that case McHugh J said at 192; ‘… what was reasonable would vary according to whether or not the tenants were in possession. Thus, before the tenancy commenced, it was reasonable both to inspect the premises and to remedy defects that gave rise to a foreseeable risk of injury.’ [7] To the best of my researches only Vaisey J has provided a judicial definition of the term ‘ensure’ when used in a statute. In Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362 at 373 he said, speaking of the term ‘ensure’ used in s 10 of the Building Societies Act 1939 (UK): The word ‘ensure’ has puzzled me a good deal. I think it is used in the common and colloquial sense in which ‘making sure’ is used, that is, as equivalent to ascertaining or satisfying

oneself, and does not mean anything in the nature of warranty or guarantee. The landlord’s obligation to start carrying out any work of repair to the subject premises does not arise until he or she has information about the existence of a defect in the premises such as would put a reasonable person on inquiry whether works of repair were needed. Consequently, he or she is under no liability to repair a latent defect until he or she becomes aware of it: O’Brien v Robinson [1973] AC 912 at 925–6, [page 285] 928–30 (HL); and see British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69 at 74–5 and following. The rule that the landlord is not liable unless he or she had notice of the defective condition of the premises has no application to a case in which he or she demises only a portion of the premises and retains in his or her own control the portion the defective condition of which causes the damage: Melles & Co v Holme [1918] 2 KB 100; [1918–19] All ER Rep 271; Bishop v Consolidated London Properties Ltd [1933] All ER Rep 963; Loria v Hammer [1989] 2 EGLR 249 at 258; and British Telecommunications plc v Sun Life Assurance Society plc, above, at 75–6 and following (CA). Murphy v Hurly [1922] 1 AC 369; [1922] All ER Rep 169 is another case in which it was held that there did not exist the necessities which led to the implication of the condition of notice. This rule must also be subject to the terms of and the nature of the particular covenant. For example, in Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33 it was held that a covenant by the landlord to maintain lifts and replace when required obliged the landlord both to take such preventative measures as should ensure that there would not be any malfunction (if necessary by replacing the lifts) and to attend to any malfunction of a lift should it occur.

Landlord’s covenants

[10.7] In view of the limited extent of a landlord’s obligation to repair at common law (see [10.1]) it might be thought that leases would contain express covenants imposing and regulating obligations on landlords to effect repairs, at least to the extent of maintaining the structural integrity of the leased premises. This is, however, not the common position and more often than not leases will contain a very limited range of landlord’s covenants, not including any repair covenant — including where the lease imposes no obligation on the tenant with respect to structural repairs. This, of course, is likely to be indicative of the superior bargaining position of the landlord. In more recent times it seems that the growing tendency to emphasise the contractual nature of leases and the development of implied obligations of good faith with respect to contractual rights and obligations may see the position change (see Chapter 16 with respect to ‘contractualisation’ of leases and [6.7] with respect to implied terms, particularly the reference to Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 (CA)) but for the present the long-standing common law position applies: see [10.1]. This is, naturally, subject to the possibility of statutory intervention to impose repair obligations, to a greater or lesser extent, on landlords: see, for example, Retail Leases Act 2003 (Vic) s 52. Consequently the discussion which follows is only applicable where the lease imposes some repair obligation on the landlord or where any statutory provisions imposing landlords’ repair obligations do so by means of implied covenants: see, for example, Retail Leases Act 2003 (Vic) s 52. [page 286] If the landlord repudiates its obligation under a repairing covenant the tenant may either bring an action for damages immediately without first doing the work him or herself, or at his or her option proceed to do the requisite work and sue the landlord for its proper cost as damages flowing from the breach: Granada Theatres Ltd v Freehold Investments (Leytonstone) Ltd [1959] Ch 592 at 609; [1958] 1 WLR 845; and see [10.13]. In a case where a landlord declined to remedy serious structural disrepair, in breach of its repairing covenant, but continued to collect rent and perform some of its obligations under the lease, the court appointed a receiver, under statutory powers, to

effect the necessary works, at the tenant’s application: Daiches v Bluelake Investments Ltd [1985] 2 EGLR 67 (Ch). As to whether the tenant is obliged to continue paying rent when the landlord is in breach of his or her obligation to keep the premises in repair, see [7.4]. Land was let for grazing purposes and there was a covenant by the lessor that he would look after the stock and keep the fences in repair. The lessor resided in the same place as that in which the land was situated and the lessee resided some distance away. Owing to the disrepair of a fence the lessee’s sheep escaped into a neighbour’s land and damaged his crop. The neighbour recovered damages for this trespass against the lessee in an action in which the lessor was made a third party on the ground that by reason of his breach of covenant he was liable to the lessee to the extent that the lessee might be found liable to the plaintiff. Judgment was given for the lessee against the lessor for the amount of damages recovered by the plaintiff and costs, and the Full Court affirmed this decision, holding that the damages were not too remote: Dunlop v Troy [1915] VLR 639. Premises were let to a tenant for the purpose, as both landlord and tenant knew, of a warehouse, and the landlord agreed to put in repair, before delivery of possession, certain machinery on the premises necessary for their use as a warehouse. Some time after taking possession the tenant discovered that the machinery had not been put into repair. The landlord then undertook to effect the repair, but did not do so until the time of the year when the machinery was most necessary for warehouse purposes. It was held that the measure of damages which the tenant was entitled to recover against the landlord for the breach of his agreement to repair was the expense necessarily incurred by the tenant upon the machine, and also the injury to his business, and loss of profits through the machine’s being out of order until the repair was completed by the landlord: Bank of Victoria v Synott (1885) 11 VLR 598; see also [10.13] as to remedies for breach more generally. In Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1958] 1 WLR 845 (Ch D); [1959] Ch 592 (CA), Jenkins LJ laid down a number of propositions concerning the landlord’s covenant to repair; apparently in circumstances where the landlord had demised the whole of the premises (at [1959] Ch 592 at 608) (see also [1.6]): (1) It is well settled that a landlord’s covenant to repair is a covenant to repair on notice [but see the authorities on this issue discussed

at [10.6]]. [page 287] (2) It is further well settled that under such a covenant the landlord has an implied licence to enter on the premises for the purposes of performing it: see Saner v Bilton (1878) 7 Ch D 815; [1874–80] All ER Rep Ext 1586. (3) Where, as here, the covenant is to ‘keep’ in repair, failure to perform it after notice constitutes a continuing breach in respect of which a fresh cause of action arises from day to day so long as the requisite repairs remain undone. (4) In the event of the landlord failing to do the requisite repairs within a reasonable time after notice, the tenant is entitled to sue him in damages without first incurring expense by doing the repairs himself: Hewitt v Rowlands (1924) 131 LT 757; [1924] All ER Rep 344 [and see [10.13]]. (5) The covenant is clearly not specifically enforceable, but I apprehend that, in the event of the landlord failing to do the repairs in a reasonable time, the tenant can, at his option, do the requisite repairs himself and claim the proper cost of so doing as damages flowing from the breach. [As to equitable relief available, see Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33, discussed below.] (6) If the landlord attempts within a reasonable time to do the work, but is prevented from so doing by the tenant refusing him entry on the premises in accordance with the implied licence, the tenant cannot, I apprehend, maintain his action for damages so long as he persists in such refusal, because, in such circumstances, the landlord is not in breach of his covenant, or, at all events, has only been put in breach of it by the tenant’s own conduct. (7) The parties are under a duty to each other to act reasonably. It behoves the landlord, who is in breach of his covenant, to be

diligent in the remedying of such breach. He is not entitled to keep the tenant waiting indefinitely and then complain if the tenant ultimately decides to do the work himself. On the other hand, he must be reasonable in the exercise of his licence to enter and (as I think) give the tenant sufficient notice of his intention to enter, and information as to the nature and extent of the work he proposes to carry out. On his part, the tenant must not unreasonably obstruct the landlord in the exercise of his right of entry for the purpose of doing the work, or take the matter out of the landlord’s hands by doing the work himself before the landlord has had a reasonable opportunity of doing so. Any landlord’s repair covenant is commonly limited to ‘structural repairs’ or even structural repairs of a substantial nature. As to the meaning of these expressions, see Granada Theatres at [1996] Ch 69 at 77–8; and note the reference to A E Terry’s Motors Ltd v Rinder [1948] SASR 167 as indicating that ‘substantial’ is a word devoid of any fixed meaning. See also Lazar v Williamson (1886) 7 LR (NSW) 98 as to the making good of structural defects not being repairs; and, generally, [10.8]. In Saner v Bilton (1878) 1 Ch D 815 at 821 it was held that a covenant on the part of the lessor that he or she will during the term ‘keep the main walls and main timbers of the warehouse in good repair and condition’ imposes an obligation on the [page 288] lessor to put the main walls and main timbers into good repair and condition if they were in bad condition when the lessee takes possession of the premises. The question of what is ‘good repair and condition’ is to be viewed having regard to the class to which the demised premises belongs and not with regard to the very premises in question. The Court of Appeal, however, in Pembery v Lamdin [1940] 2 All ER 434 held that where the landlord covenanted to keep the external part of the demised premises in good and tenantable repair and condition, the obligation on him was only to keep the premises in repair in the condition in which they were demised. Since they were old premises the

landlord was not liable to do any more than paint the brickwork and was not liable, as the tenant claimed, to waterproof the outside walls and so render the place dry; and see Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd at 18 NSWLR 38. A landlord’s obligations under a repair or maintenance covenant are distinct from any general duty of care the landlord may owe the tenant: see Targett v Torfaen Borough Council [1992] 1 EGLR 274 (CA). In British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69 (CA) it was held that a landlord’s covenant to keep the demised premises in ‘complete good and substantial repair and condition’ which extended to the building as a whole obliged the landlord to keep the other parts of the building in which the demised premises were situated in repair at all times so that there was a breach of the repairing obligation immediately a defect occurred. In circumstances where the landlord is obliged to carry out repairs but the tenant is obliged to pay for them it has been held that, provided the works are such that an owner who had to bear the cost might reasonably decide upon them, the tenant cannot insist that cheaper works be undertaken or that the repair work is effected only to a minimum standard: see Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001] All ER (D) 36; [2001] 2 EGLR 103 (Ch D); referring to Plough Investments v Manchester City Council [1989] 1 EGLR 244 (Ch D); and see Hi-Lift Elevator Services v Temple (1994) 28 HLR 1; (1994) 70 P & CR 620 (CA); and Minja Properties Ltd v Cussins Property Group plc [1998] 2 EGLR 52 (Ch D). See also [6.3], [10.10] and [10.11] as to the construction of covenants to repair and the discussion at [10.8] as to the nature of ‘repairs’ (particularly the distinction between ‘repair’ and ‘renew’) and the extent of obligations imposed by repair covenants in various forms of words and in various circumstances. The extent to which a landlord is obliged to repair under a landlord’s repair covenant only on notice is considered at [10.6].

Tenant’s covenants [10.8] As with other covenants the nature and scope of a tenant’s repair covenant depends upon the terms of the particular covenant; the ordinary

rules of construction apply: see Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2008] FCAFC 38 at [49] and following (per Rares J) (upheld on appeal in Tabcorp Holdings Ltd v Bowen Investments [page 289] Pty Ltd (2009) 236 CLR 272); and see [6.3]–[6.5]. This was highlighted more recently in Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 (CA) by Sheller JA (with whom Powell and Beazley JJA agreed), referring with approval to the decision at first instance (at 354–5): Windeyer J regarded the covenant to keep in good and substantial repair as a double covenant having both a qualitative obligation (‘good’) and a quantitative (‘substantial’). His Honour found support for this conclusion in Lurcott v Wakely & Wheeler [1911] 1 KB 905, particularly in the judgment of Fletcher Moulton LJ at 915. The covenant there under consideration was a little different; ‘well and substantially repair … and keep in thorough repair and good condition’. Fletcher Moulton LJ at 915–6 said: I therefore look upon these as three separate covenants: there is a covenant to repair, there is a covenant to keep in thorough repair, and there is a covenant to keep in good condition. In Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 at 731–2 Atkin LJ referred to Fletcher Moulton LJ’s judgment and said that effect should be given, if possible, to every word used by the parties. Windeyer J said that it followed that a covenant to ‘keep in good and substantial repair’ imposed greater obligations upon the covenantor than a covenant to keep in ‘good tenantable repair’ and quoted the following passage from Atkin LJ’s judgment in Anstruther’s case at 734: ‘Repair’ … connotes the idea of making good damage so as to leave the subject so far as possible as though it had not been damaged. It involves renewal of subsidiary parts; it does not involve renewal of the whole. Time must be taken into account; an old article is not to be made new; but so far as

repair can make good, or protect against the ravages of time and the elements, it must be undertaken. Windeyer J continued: By contrast, a covenant to ‘keep in good and substantial repair’ suggests a higher standard of maintenance is required such that the condition of the premises is both good and substantially sound. I do not, however, accept the contention that such a construction requires the lessee to put the building into ‘mint condition’. It merely obliges the covenantor to effect such repairs as a reasonably minded owner would effect in accordance with his or her obligations as formulated by Atkin LJ in Anstruther’s case. His Honour then referred to a passage in the judgment of Robert Walker J in Ladbroke Hotels Ltd v Sandhu & Singh (1995) 72 P & CR 498 at 504: If a tenant disregards his repairing obligations and, as a result, the premises become rundown and commercially unattractive, it hardly lies in the tenant’s mouth to rely on that fact as lowering the standard of repair required under the tenant’s repairing covenant. His Honour also referred to a passage in the judgment of Starke J in Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567 at 585. In that case at 579, Latham CJ cited Lurcott v Wakely & Wheeler with approval. At 585 Starke J said: The state of repair required by a covenant to yield and deliver up premises well and substantially repaired depends primarily upon the words used. It involves, [page 290] in the present case, an obligation to yield and deliver up the premises in such a state of repair as that in which they would

be found if managed by a reasonably minded owner having regard to their age, their character, their ordinary use and the requirements of the tenants likely to take them at the time of the demise or sub-letting (Lurcott v Wakely & Wheeler, Anstruther-Gough-Calthorpe v McOscar). Atkin LJ, as he then was, said in the latter case that such a covenant connotes the idea of making good damage so as to leave the subject matter as far as possible as though it had not been damaged. It involves renewal of subsidiary parts: it does not involve renewal of the whole. Nevertheless, as appears from the authorities discussed (particularly at [10.7] to [10.11]), the courts tend to take a reasonably broad approach to the construction of repair covenants, on the basis of reading the repair and related covenants as a whole. Thus in Weatherhead v Deka New Zealand Ltd [1999] ANZ ConvR 392 Thomas J, delivering the judgment on behalf of the Court of Appeal, said: [23] In oral argument today Mr Squire understandably chose to focus on the nature of the lessee’s obligation contained in clause 2(c) and to submit that both the arbitrators and Baragwanath J construed that obligation too narrowly. He submitted that the clause must be read in context and as a whole and that none of the operative words can be disregarded. We have no difficulty in accepting that submission. But Mr Squire sought to break the obligation in clause 2(c) down into six separate obligations. There is, he said, an obligation to repair, an obligation to maintain, an obligation to amend, an obligation to cleanse, an obligation to keep the demised premises in good and substantial repair, and an obligation to keep the premises in good and substantial condition. On his construction all requirements are subject to the need to have regard to the condition of the premises at the commencement of the term (reasonable wear and tear accepted), but he argued that this express qualification would be implied in any event.

[24] This fractured approach to the construction of the covenant does not have great appeal to us. Certainly the words ‘repair, ‘maintain’ and ‘amend’ may have different meanings and import different obligations. Certainly, too, none can be disregarded. But the sense of the covenant can be better discerned when it is read as a whole. For present purposes, the lessee’s obligation is to repair, maintain, amend and keep the premises in good and substantial repair and condition having regard to the condition of the premises at the commencement of the lease. Once the obligation is framed in these terms the significance of the qualification that regard is to be had to the condition of the building at the outset of the lease is plain to see. The lessee’s obligation, however it might be perceived, is subject to that standard or ‘benchmark’, as it came to be called in the course of the hearing. The ultimate question, therefore, whether the obligation arising from the words used in the covenant are appropriate to describe the work involved, cannot be answered divorced from that benchmark. Regardless of the approach of the courts to construing the particular terms of lease covenants it is a fair generalisation to say that the tenant’s repairing covenants are often extremely onerous. Frequently the tenant’s understanding of his, her or its (and usually the latter in terms of its guarantor-directors) obligations at the timeof taking the lease is as imperfect as his, her or its subsequent performance of them. A solicitor acting [page 291] for an intending lessee who fails to explain the meaning and consequences in law of any of its wording which he or she knows, or ought to know, the client does not fully understand, is likely to be found to be Negligent, though depending on the scope of the solicitor’s retainer: see Sykes v Midland Bank Executor and Trustee Co [1971] 1 QB 113, where the lease contained unusual clauses relating to

user and assignment which reduced its market value; and for a discussion of this case, see 87 LQR 10. In Luxmore v Robson (1818) 1 B & Ald 584 the tenant covenanted to repair and keep in repair the leased premises during the continuance of the lease term. It was contended on his behalf that the covenant would be satisfied by his putting the premises into repair at any time during the term and that therefore no right of action vested in the landlord before the term had expired. This contention was, however, summarily rejected by Lord Ellenborough: By the terms of the covenant the lessee is bound to keep the premises in repair; then to keep them in repair he must have them in repair at all times during the term; and if they are at any time out of repair, he is guilty of a breach of covenant, which is the proper subject of an action. See also Lurcott v Wakeley and Wheeler [1911] 1 KB 905 (CA) at 918–19 (per Fletcher Moulton LJ); [1911–13] All ER Rep 41 at 46–7; British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69 at 77–8 (CA) (per Nourse LJ). ‘A repair covenant is breached not only if the premises fall into disrepair during the term of a lease but also if the tenant destroys or alters the premises: Gange v Lockwood (1860) 2 F & F 115, 117 [175 ER 984, 985]; Barton v Reilly (1878) 1 SCR (NS) NSW 125, 127; Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567, 580–582, 585–586, 593–594’: Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2008] FCAFC 38 at [9] (per Finkelstein and Gordon JJ, upheld on appeal in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272). Representations by the landlord may be relevant in determining a tenant’s liability under a covenant to repair. In Brikom Investments Ltd v Carr [1979] QB 467 the lease contained a covenant by the landlords to repair and maintain the structure of the building including the roof, with a covenant by tenants of the building to contribute in respect of excess maintenance by the landlords. Before the relevant leases were signed, the landlords made oral representations to the tenants’ association and to individual tenants that they would repair the roofs at their own expense. Certain tenants were also given written confirmation of this, also before the relevant leases were signed. It was

held that the landlords had waived their rights under the covenant to claim the cost of repairs of the roofs from the tenants; alternatively, that there was a collateral contract between the parties that the tenants were not liable for the cost of these repairs (see Roskill LJ at 488–9). A general covenant to repair is satisfied if the lessee really and substantially complies with the covenant; a strict and literal performance of the covenant is not to be required: Harris v Jones (1832) 1 M & Rob 173; 174 ER 59. ‘Good repair, order and condition’ is very much the same thing as ‘tenantable repair’ and ‘habitable repair’: Proudfoot v Hart (1890) 25 QBD 4 (per Lord Esher); [1886–90] All ER Rep 782; Calthorpe v McOscar [page 292] [1924] 1 KB 716 (per Scrutton LJ); Wincant Pty Ltd v State of South Australia (1997) 69 SASR 126 (FC); and see Welsh v Greeenwich London Borough Council [2000] 49 EG 118; [2000] All ER (D) 880 (CA); and Alcatel Australia Ltd v Scarcella at 44 NSWLR 355 (per Sheller JA). Even though the covenant does not require the tenant to ‘put’ the premises into repair, but requires him or her only to ‘keep’ the premises in repair, the tenant is not justified in keeping in a state of disrepair premises which are not in repair when he or she takes them; the tenant must put the premises into repair: Payne v Haine (1847) 16 M & W 541; 153 ER 1304; Proudfoot v Hart; Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1971, unreported); Chatfield v Elmstone Resthouse Ltd [1975] 2 NZLR 269; and see Alcatel Australia Ltd v Scarcella at 44 NSWLR 355 (per Sheller JA). A covenant to repair premises is construed, however, with reference to the age, the character and the locality of the premises: Saner v Bilton (1878) 1 Ch D 815; Proudfoot v Hart at 42; Woorarra Pastoral Co Pty Ltd v Cash; Wincant Pty Ltd v State of South Australia; and see Alcatel Australia Ltd v Scarcella at 44 NSWLR 355 (per Sheller JA). The lease may provide for the release of the tenant from repairing obligations in the event of destruction of the premises by fire, the tenant having covenanted to pay to the landlord a sum equivalent to the fire insurance premium, the landlord having covenanted to apply insurance moneys received in reinstating the premises: see Mark

Rowlands Ltd v Berni Inns Ltd [1986] QB 211; compare Combara Nominees Pty Ltd v McIlwraith-Davey Pty Ltd (1991) 6 WAR 408 (FC); and see [10.3]. But while the age and the nature of the building can qualify the meaning of the covenant, they can never relieve the lessee from his or her obligation. If the tenant chooses to covenant to keep in good condition an old house, he or she is bound to do it, whatever be the means necessary for him or her to employ in so doing. The tenant can never say ‘the house was old, so old that it relieved me from my covenant to keep it in good condition’: Lurcott v Wakely and Wheeler [1911] 1 KB 905; [1911–13] All ER Rep 41; Card v Bilderbeck [1951] NZLR 296; Crédit Suisse v Beegas Nominees Ltd [1994] 4 All ER 803. A covenant to use the house in a tenant-like manner requires only that the tenant take precautions reasonable under the prevailing circumstances to prevent damage to the premises: Wycombe Area Health Authority v Barnett (1982) Times, 29 July (CA). See further as to tenant’s repairing covenants and premises out of repair at the commencement of the term Clowes v Bentley Pty Ltd [1970] WAR 24. The term of the lease and the commercial life of the leased premises may be relevant factors in determining the scope of the repair covenant: see Ladbroke Hotels Ltd v Sandhu [1995] 2 EGLR 92 (Ch D). A covenant to repair requires the tenant (or the landlord) to repair, but not to renew. But it must be understood that repair will often involve the renewal of subsidiary parts and in more extreme cases may, subject to the terms of the lease, involve the landlord or the tenant curing an unsuspected inherent defect in a building: Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1980] QB 12; and Elmcroft Developments [page 293] v Tankersley-Sawyer [1984] 1 EGLR 47. These decisions are explained in Quick v Taff-Ely Borough Council [1986] QB 809 at 817–19. In Lurcott v Wakely Buckley LJ said ([1911–13] All ER Rep at 49): ‘Repair’ and ‘renew’ are not words expressive of a clear contrast. Repair always involves renewal; renewal of a part; of a subordinate part. A skylight leaks; repair is effected by hacking out the putties,

putting in new ones, and renewing the paint. A roof falls out of repair; the necessary work is to replace the decayed timbers by sound wood; to substitute sound tiles or slates for those which are cracked, broken or missing; to make good the flashings and the like. Part of a garden wall tumbles down; repair is effected by building it up again with new mortar, and, so far as necessary, new bricks or stone. Repair is restoration by renewal or replacement of subsidiary parts of a whole. See further New Zealand Insurance Co Ltd v Keesing [1953] NZLR 7; and Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33; Minja Properties Ltd v Cussins Property Group plc [1998] 2 EGLR 52 (Ch D); and also Ultraworth v General Accident Fire & Life Assurance Corporation [2000] 2 EGLR 115. Where there is more than one way in which a covenant might properly be performed or satisfied, the tenant is entitled to choose which method to utilise, and cannot be criticised for choosing the least expensive option: see George Fischer v Multi Design (1998) 61 Con LR 85; Ultraworth v General Accident Fire & Life Assurance Corporation; and Riverside Property Investments Ltd v Blackhawk Automotive [2005] 1 EG 94. In the most general sense, repair ‘connotes the idea of making good damage so as to leave the subject so far as possible as though it had not been damaged’; per Atkin LJ in Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 at 734; [1923] All ER Rep 198 at 206. A covenant to repair does not require rectification of a design defect unless a repair has to be done for other reasons in which case the design defect should be rectified where it is sensible and practical to carry out the necessary work as part of the repairs, so long as it does not involve substantial rebuilding of the whole: Stent v Monmouth District Council [1987] 1 EGLR 59 (CA); and see Cugg Pty Ltd v Gibo Pty Ltd (2001) 10 BPR 18,641 (Hodgson CJ in Eq) and the reference in that case to Graham v Markets Hotel Pty Ltd (1942) 43 SR(NSW) 98 at 103 (at [72]); see also Gotze v Ylitalo [2005] ANZ ConvR 159; (2005) Q ConvR ¶54-616. Neither does a covenant to repair extend to the rectification of defective construction: Post Office v Aquarius Properties Ltd [1987] 1 EGLR 40 (CA). The line must be drawn somewhere, and Lister v Lane and Nesham [1893] 2 QB 212; [1891–4] All ER Rep 388 fell on the

wrong side of the line from the point of view of the plaintiff, who had let to the defendant a house under a lease which contained a covenant by the defendant to ‘repair, uphold, sustain, and maintain’ the demised premises. The house, which was very old at the date of the demise, was built upon a timber raft which floated, as it were, upon the boggy soil. The raft had become rotten and the only way in which it would have been possible to [page 294] effect repairs was by digging down through the mud until gravel was reached and then building up from that to the brick work of the house. It was held that to do this would not be to repair, uphold or maintain the house, but to make a house of a different character. A similar case is Sotheby v Grundy [1947] 2 All ER 761. The position with respect to repair and renewal was stated by Latham CJ in Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567 at 579 in the following terms: It is now well established that the repair of a structure may involve renewal or rebuilding of part of it, and that all repairs involve renewal to some extent: Lurcott v Wakely and Wheeler at 914, 923–6. There is a difference between repairing a house and building a new house in place of an old house. It is a question of degree whether rebuilding part of a house does or does not fall within the category of repairing a house. A covenant to repair does not involve the covenantee [sic] in an obligation to make improvements, but if he cannot perform his covenant to repair without making improvements, then the expense of making the improvements falls upon him. This is the case whether the necessity arises from physical causes, or from legal causes. The question whether, and if so to what extent, repair may involve renewal or rebuilding naturally depends very much on the particular circumstances: see Creska Ltd v London Borough of Hammersmith and Fulham [1998] 3 EGLR 35 (CA) where this point is illustrated with discussion of various authorities. See also Cugg Pty Ltd v Gibo Pty Ltd (2001) 10 BPR 18,641 (Hodgson CJ in Eq),

referring to Graham v Markets Hotel Pty Ltd (1943) 67 CLR 579 (at [72] and [99]); a case where the position was found to be otherwise because of the tenant’s obligation under the lease to comply with council orders (see below). The position is not dissimilar where the tenant’s obligation to effect improvements arises not under any lease repair covenant but under some collateral agreement, such as a joint venture agreement with the owner of the land: see Lismore City Council v Green Gro Pty Ltd (2003) 56 NSWLR 204 (CA). As this case indicates, a similar position may be reached on the basis of a statutory obligation which binds the tenant, directly or through the operation of lease covenants other than the repair covenant. ‘Repair’ does not extend to reconstruction of the whole or substantially the whole of the building, but it does include restoration by renewal or replacement of subsidiary parts: O’Neill v Coffill (1920) 20 SR (NSW) 264. ‘Renewal’ does not extend to substitution by the use of a different type of material, and a different mode of construction: Mosman Municipal Council v Shaw (1928) 11 LGR (NSW) 150. The distinction between reconstruction and repair is considered in Returned Sailors, etc League v Abbott [1946] SASR 270 and Joel v Swaddle [1957] 1 WLR 1094. Alterations and reconstruction and the making good of structural defects are not repairs: Lazar v Williamson (1886) 7 LR (NSW) 98. In that case the beams in the roof of a building were not strong enough for the purpose for which the building was used, and it was held that the insertion of beams of adequate strength did not constitute repairs. [page 295] Structural repairs are commonly the subject of an express exception to the tenant’s covenant to repair, even though they may not in some cases amount to repair items. As to the nature of structural repairs, see Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 at 603–4 (CA); and see [10.7]. Further, as to the distinction between repairs on the one hand and improvements or structural alterations on the other, see Morcom v CampbellJohnson [1956] 1 QB 106; [1955] 3 All ER 264; Equity Trustees Executors & Agency Co Ltd v Riddell [1954] VLR 161; Henderson v Harrison [1916] QWN 6; 10 QJPR 25; Kersey v Thomson [1947] NZLR 392. The question whether a

covenant to repair and keep in repair required the restoration of premises so as to efface structural alterations effected by the previous tenant was considered in Bailey v John Paynter (Mayfield) Pty Ltd [1966] 1 NSWR 596. In Marlborough Park Services v Rowe [2006] 23 EG 166 (CA) it was held that the expression ‘the main structures’ included the floor joists. In the context of this particular case Neuberger LJ (with whom the other members of the court relevantly agreed) noted that the expression being considered was not ‘the main structure’ and, further, that the meanings of these two expressions may be subtly different (and as to the expression ‘main structure’, see Hallisey v Petmore Developments Ltd [2000] All ER (D) 1632; [2000] EGCS 124 (Ch D)). His Lordship did, however, refer, with apparent approval, to the following observations of Mr Recorder Thayne Forbes QC sitting as a deputy judge in Irvine v Moran [1991] 1 EGLR 261 at 262 (observations already apparently approved by Rimer J in Ibrahim v Dovecorn Reversions Ltd [2001] 2 EGLR 46; [2001] 30 EG 116), discussing the meaning of the word ‘structure’, though in the context of a statutorily implied repairing covenant: I have come to the view that the structure of the dwelling house consists of those elements of the overall dwelling house which give it its essential appearance, stability and shape. The expression does not extend to the many and various ways in which the dwelling house will be fitted out, equipped, decorated and generally made to be habitable. I am not persuaded … that one should limit the expression ‘the structure of the dwelling house’ to those aspects of the dwelling house which are load-bearing in the sense that that sort of expression is used by professional consulting engineers and the like; but what I do feel is, as with regard to the words ‘structure of the dwelling house’, that in order to be part of the structure of the dwelling house a particular element must be a material or significant element in the overall construction. To some extent, in every case there will be a degree of fact to be gone into to decide whether something is or is not part of the structure of the dwelling house. As the authorities indicate, the question whether repairs are to be characterised as structural or not is very much dependent on the particular circumstances and that aphorisms in this respect are not necessarily particularly

helpful. For example, it might be thought, as was argued unsuccessfully in Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA), that bitumen as distinct from reinforced concrete paving could not be [page 296] a structure because it was flexible and did not distribute load to the ground (see at [39] and [40] per Hodgson JA, with whom Basten JA and McClellan CJ at CL agreed). In the course of considering this issue Hodgson JA also referred, with approval, to the useful analysis of the more recent authorities in relation to the nature of structural repairs by Barrett J at first instance (at [38]): … The first thing to be said is that, as I view matters, maintenance, replacement or repair that is ‘structural’ can be undertaken only in relation to something that is a ‘structure’ although, of course, not everything done by way of maintenance, replacement or repair in relation to a ‘structure’ is properly classified as ‘structural’. I regard as apposite, in this connection, a passage in the judgment of Brereton J in Hampson v Clyne (1967) 86 WN (NSW) 321: ‘Structure’ of course is a word of which the meaning varies considerably according to the context, and the phrase ‘structural character’ or ‘defect of a structural character’ varies correspondingly. Literally ‘structure’ means something which has been constructed and ‘defect of a structural character’ means either a fault in putting the structure together or some subsequent failure on the part of the structure to remain satisfactorily put together. With particular reference to buildings in common parlance we refer to the bare building as the structure. We refer to fixtures and fittings attached to the structure although these may themselves as individual units be technically ‘structures’. We refer also to installations, such as gas and water piping and electrical circuits. Each of these may, however, independently be in certain contexts regarded as a

‘structure’ in that it is something which has been constructed within another structure. Applying the same concepts, maintenance, replacement or repair is ‘structural’ when its purpose and effect are to remedy some ‘failure on the part of the structure to remain satisfactorily put together’. This is, I think, consistent with the approach taken to the meaning of ‘structural repairs’ in relation to buildings as such in cases such as Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] 1 Ch 592 and Advance Fitness Corporation Pty Ltd v Bondi Diggers Memorial & Sporting Club Ltd [1999] NSWSC 264 to which counsel for both parties referred. Reference may also be made to what was said by Balmford J — again in relation to a building — in Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR; [2002] 548 VSC 272: … ‘the structure’ is that part of the total building that supports the loads and stops the building falling down. It should be emphasised that a building may be structurally sound notwithstanding that it shows signs of movement; as by the opening of cracks. Unless such cracks indicate a real and present threat to load bearing integrity, of building failure or collapse, they may be treated as simply cosmetic defect — susceptible of patching, painting or other straight-forward repair. Also instructive, in this connection, is the decision of the Full Court of the Supreme Court of South Australia in J F Hillam Pty Ltd v Mooney (1988) 48 SASR 381. That case concerned an indoor swimming centre which included two heated pools built into the ground but inside a building. They had on their inside surfaces a particular coating akin to concrete (described as ‘marblesheen’) to ‘make them safe and acceptable to swimmers’. The marblesheen deteriorated and one of the issues for determination was whether its replacement was ‘a major [page 297]

repair of a structural nature to the premises’. King CJ (with whom Jacobs and von Doussa JJ agreed on this aspect) answered the question in the affirmative: The swimming pools were undoubtedly part of the structure of the premises. The marblesheen which rendered them usable as swimming pools by providing an appropriate surface must be regarded, to my mind, as part of the structure. The repair or replacement of that marblesheen is therefore a repair of a structural nature. Returning to the particular case of the pavements, I am satisfied that they are properly to be regarded as ‘structures’. They were put upon the land by a process of construction. Their character, as consisting of a skin or coating of asphalt placed upon a prepared land surface to which a basecourse of aggregate or blue metal had first been added, makes them similar to, although lesser in degree than, the ‘low attractive brick fence’ considered in Durkin v Commonwealth Savings Bank of Australia (unreported, Full Court of the Supreme Court of South Australia, 30 November 1990) where a fence ‘in which the bricks are cemented to a cement base and to one another by mortar’ was held to be a ‘permanent domestic improvement of a structural nature’. In the same way pavements constructed in the way I have described should be characterised as being improvements ‘of a structural nature’. Furthermore, the replacement of the asphalt skin and any missing basecourse that, to adapt the words in the JF Hillam case, made them usable as pavements by providing the necessary hard surface and its support, and, as stated in Hampson v Clyne, was necessary for them to ‘remain satisfactorily put together’, must, in my judgment, amount to maintenance, replacement or repair that is ‘structural’. Lav Pty Ltd v Routledge [1998] ANZ ConvR 34 (WASC) also illustrates, in the context of a tenant’s covenant not to make structural alterations without consent, that the meaning of covenants of this nature (noting also the

reference in the covenant to the ‘principal structure’) depends on factors such as the nature and defined extent of the ‘premises’ and the type of work proposed. In relation to the issue of the reasonableness of the landlord’s withholding of consent this decision indicates that consideration may need to be given to whether the tenant has obtained necessary planning (and, in this case, heritage consent both from the National Trust and the City of Perth) and other consents, whether adequate indemnity has been offered, and secured by a bank guarantee if necessary, for reinstatement of the premises and to meet any claims by other tenants with respect to the effect of the proposed alterations on the cost of shared facilities. In Iqbal v Thakrar [2004] 3 EGLR 21 (CA) it was held that the principles laid down in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 (CA) (see [15.13]) with respect to a landlord’s consent to the assignment of a lease were applicable, with necessary changes, with respect to consent to alterations to leased premises. Further, in applying these principles the court should consider both the actual reason for the landlord’s refusal of consent and whether the reason was reasonable or unreasonable, referring to Tollbench Ltd v Plymouth City Council [1988] 1 EGLR 79 (CA) at 81 (per May LJ) (see Gibson LJ at [27] in Iqbal). It was held in Iqbal that the landlord was entitled to withhold consent [page 298] on the basis that the tenant’s proposed alterations either would or could give rise to structural problems. Another aspect of common form tenant’s repair covenants which exclude liability of structural repairs is that this ‘exclusion’ is, in turn, usually subject to an ‘exception’ whereby the tenant will be liable for structural repairs where those repairs have been rendered necessary as a result of the tenant’s default or the tenant’s use of the premises. The effect of exclusions and exceptions of this nature is not always easy to determine. The process must, however, begin with construction of the lease provisions as a whole. The tenant’s use within the nature and reasonable scope of the permitted use covenant would, at least prima facie, not be thought likely to produce the result of tenant’s liability for structural repairs which flow only from this type of use, and absent any

relevant default. In the latter case Haskell v Marlow [1928] 2 KB 45 (and see [10.11]) would seem to provide the prime example of a case of a tenant’s default in routine repair and maintenance in the course of reasonable use of the demised premises leading to a fresh liability for structural repairs. In Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA) it was held that use of the premises under a subtenancy consented to by the landlord was not relevant to the ‘tenant’s use’ of the premises in the context of the exception to the tenant’s structural repair liability exclusion provisions of the lease (see Basten JA at [134], with whom McClellan CJ at CL agreed; compare the contrary view taken by Hodgson JA at [60]–[66]). Whether the end-product requiring to be done properly constitutes ‘repair’ is a question of degree: Brew Bros Ltd v Snax (Ross) Ltd [1970] 1 QB 612; 1 All ER 587; and see Weatherhead v Deka New Zealand Ltd [1999] ANZ ConvR 392 (NZCA); and Ultraworth v General Accident Fire & Life Assurance Corporation [2000] 2 EGLR 115. This was emphasised by the Court of Appeal in Holding and Management Ltd v Property Holding and Investment Trust plc [1989] 1 WLR 1313; discussed at All ER Rev 1990 pp 175–6. Nicholls LJ (with whom the other members of the court agreed) said (at 945): … the question is whether, having regard to all the relevant circumstances, the proposed works can fairly be regarded as ‘repair’ in the context of the particular lease. As Hoffmann J said in Post Office v Aquarius Properties Ltd [1985] 2 EGLR 105 at 107: In the end … the question is whether the ordinary speaker of English would consider that the word ‘repair’ as used in the covenant was appropriate to describe the work which has to be done. Likewise, in the oft-quoted words of Sachs LJ in Brew Bros Ltd v Snax (Ross) Ltd [1970] 1 QB 612 at 640; 1 All ER 587 at 602–3: It seems to me that the correct approach is to look at the particular building, look at the state which it is in at the date of the lease, to look at the precise terms of the lease, and then come to a conclusion whether, on a fair interpretation of those

terms in relation to that state, the requisite work can fairly be termed [page 299] repair. However large the covenant it must not be looked at in vacuo. Quite clearly this approach involves in every instance a question of degree … (Sachs LJ’s emphasis.) Thus the exercise involves considering the context in which the word ‘repair’ appears in a particular lease and also the defect and remedial works proposed. Accordingly, the circumstances to be taken into account in a particular case under one or other of these heads will include some or all of the following: the nature of the building; the terms of the lease; the state of the building at the date of the lease; the nature and extent of the defect sought to be remedied; the nature, extent and cost of the proposed remedial works, at whose expense the proposed remedial works are to be done; the value of the building and its expected lifespan; the effect of the works on such value and lifespan; current building practice; the likelihood of a recurrence if one remedy rather than another is adopted; and the comparative cost of alternative remedial works and their impact on the use and enjoyment of the building by the occupants. The weight to be attached to these circumstances will vary from case to case. This is not a comprehensive list. In some cases there will be other matters properly to be taken into account. For example, as in the present case, where a design or construction fault has led to part of the building falling into a state of disrepair, and the proposed remedial works extend to other parts of the building, an important consideration will be the likelihood of similar disrepair arising in the other parts of the building if remedial work is not undertaken there also, and how soon such further disrepair is likely to arise. See also Ladbroke Hotels Ltd v Sandhu [1995] 2 EGLR 92 (Ch D); Minja Properties Ltd v Cussins Property Group plc; and Alcatel Australia Ltd v Scarcella at

44 NSWLR 355 (Sheller JA); and see [10.10], particularly in relation to the position where provision has been made for a series of lease renewals. Covenants frequently require the lessee to comply with the ‘requirements’ of public authorities. In Kersey v Thomson it was held that this expression was wide enough to include not only a general rule, regulation or by-law, but also a specific direction to an individual; see also [10.10], [10.11]. In Cugg Pty Ltd v Gibo Pty Ltd (2001) 10 BPR 18,641 (Hodgson CJ in Eq) it was held that a tenant would not have had any obligation to repair a concrete slab if a council order had not been made, an event which triggered the operation of lease provisions requiring the tenant to comply with orders of this kind, because the ‘repairs’ would have the effect of improving the premises beyond their condition at the commencement of the lease (see at [99] and [100]). The distinction between the position with respect to third parties in the context of tortious and statute-based claims and the possible rights and obligations of third parties under repair and other lease covenants should be kept in mind: as to the latter see, for example, Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025 where the head landlord sought to recover the cost of repairs from the subtenant relying on the provisions of covenants in the sublease; and see [15.2]. As to remedies for a breach of the tenant’s covenant to repair, or the like, see [10.13]. [page 300]

Buildings erected after the demise [10.9] The repairing covenant may expressly extend to buildings erected after the demise, as in Hudson v Williams (1897) 39 LT 632. Even in the absence of express provision, the repairing covenant may be held to embrace buildings erected during the term. A covenant to repair ‘the demised premises’ may be construed as including buildings erected after the demise, on the ground that any buildings erected on the demised land during the lease become part of the demised premises: Stephens v Money (1893) 11 NZLR 775;

and see Flora Investments Ltd v Samson Corporation Ltd [1999] ANZ ConvR 392 (NZHC). It is in each case a matter of the construction of the covenant. In Doe d Worcester Trustees v Rowlands (1841) 9 C & P 734; 173 ER 1030, the covenant was held to extend only to the buildings which were on the premises at the time of the granting of the lease.

Construction of covenant [10.10] The more general question of what is ‘good repair and condition’ is to be viewed having regard to the class to which the demised premises belongs and not with regard to the very premises in question: Sanar v Bilton [1878] 1 Ch D 815 at 821. In Pembery v Lamdin [1940] 2 All ER 434, the Court of Appeal held that the lessor’s liability under a covenant on his or her part to repair is to be construed with reference to the state of premises at the commencement of the demise: see Brew Bros Ltd v Snax (Ross) Ltd [1970] 1 QB 612 at 640; 1 All ER 587 at 602–3 (per Sachs LJ); and see Alcatel Australia Ltd v Scarcella at 44 NSWLR 355 (per Sheller JA); and [10.10]. This approach has the potential for very significant consequences in relation to renewals of leases because a renewed lease is, as a matter of law, a new demise, a fresh lease term (see [14.1]). This means that absent some express or implied term to the contrary the date upon which the condition of the leased premises is to be considered for the purpose of the operation of any repair covenant is the commencement date of the lease which contains the repair covenant. It may be implied from the nature of the particular transaction of which a series of leases forms a part that the date of first occupation of the leased premises by the tenant is the critical date in this respect, in spite of a series of renewals. Nevertheless, it remains highly desirable to include an express term fixing the critical date as the date of first occupation where this is desired, and a series of lease renewals means that this is a potential issue: and see Polgara Pty Ltd v Vision Wise Holdings Pty Ltd (1996) NSW ConvR ¶55-781. Attention is now directed to more particular issues of construction of both landlord’s and tenant’s repair covenants. In Finco v Masterton Licensing Trust [1956] NZLR 896, the covenant by the landlord was to repair the ‘roof and outer walls’ of the shop. It was held that

the word ‘roof’, used in conjunction with the term ‘outer walls’, showed that the landlord was [page 301] assuming responsibility for the maintenance of the exterior of the building, and that the words ‘roof and outer walls’ included ordinary accessories thereto — namely, the roof guttering forming part of the roof, the rain head and the downpipe: and see Barrett v Lounova (1982) Ltd [1990] 1 QB 348 (CA); Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 584; [2002] VSC 272 (Balmford J); and Carrathool Hotel Pty Ltd v Scutti [2005] ANZ ConvR 471; (2006) NSW ConvR ¶56-132; [2005] NSWSC 401 (per White J); Alliance Accounting & Business Consultants Pty Ltd v Australian Property Investment & Development Pty Ltd (SC(NSW), White J, 19 June 2007, unreported) and the other cases considered at [10.1]. An ‘external wall’ is one forming part of the enclosure of the premises and is not necessarily exposed to the atmosphere but may adjoin another building: Pembery v Lamdin. In Douglas-Scott v Scorgie [1984] 1 WLR 716 it was held that the roof above a tenant’s flat in a block of flats may, as a matter of construction, be within the covenant although not part of the demised premises in conveyancing terms. This decision also demonstrates how much these cases on construction turn on their particular facts and the terms of the lease, express or implied, by statute or otherwise: compare Campden Hill Towers Ltd v Gardner [1977] QB 823. Where there were upon the leased land a hotel, a bakehouse and other buildings, and saleyards, it was held that the lessee’s covenant to keep in repair ‘the internal part of the premises’ did not impose upon him a duty to keep in repair the internal dividing fences out of the saleyards: Gerraty v McGavin (1914) 18 CLR 152. In Mitchell v Hore (1927) 27 SR (NSW) 433, the word ‘improvements’ was held to refer to buildings, plant and improvements of that kind and not to extend to the garden. It was further held that a covenant not to suffer the garden to be damaged imposed upon the lessee the obligation of taking such measures as were reasonable and prudent in the circumstances to prevent the garden from falling into decay. A lease provided as follows:

The lessee will at all times … repair, maintain and keep all buildings and improvements on the said land … now and all fences … in good substantial repair fair wear and tear excepted. The lessee will at the expiration or sooner determination of the said term peaceably and quietly surrender and yield up to the lessor the said lands and premises … with all buildings erections and fixtures … in good and substantial repair and condition in all respects reasonable wear and tear excepted. The lessee agrees that he will if any of the buildings (except the house) … should be blown down or otherwise injured by storm or tempest forthwith re-erect or repair the same at his own expense. Certain outhouses were destroyed by fire, and the lessee did not rebuild them. The landlord was able to recover the value of the outhouses: O’Connor v Fitzgerald [1927] St R Qd 226. In Kirkwood Bros Ltd v O’Reilly [1947] NZLR 860, the words ‘painting and papering’ were held to apply to both the outside and the inside painting. Ordinarily a repairing covenant makes express reference to painting. In the absence of express reference, whether a covenant to repair requires the painting of the premises [page 302] is a question of construction. See, for example, Monk v Noyes (1824) 1 C & P 265; 171 ER 1189; Proudfoot v Hart (1890) 25 QBD 42; [1886–90] All ER Rep 782. In Gemmell v Coldsworth [1942] SASR 55 it was held that, where a person has agreed to keep buildings in the state of repair which existed at the commencement of the term and also to repair them if in need of repair and to keep and yield them in repair at the end of the term, he or she is bound to repaint any parts requiring repainting notwithstanding that the agreement contains a covenant to paint every two years. Where the defendant covenanted to keep and maintain an orchard in fair and reasonable condition, he was not obliged to fence the orchard, which had not been previously fenced, but he was bound to take such precautions as would ensure that the orchard was kept and maintained in a fair and reasonable condition: Parker v Sell (1890) 16 VLR 271. Covenants in a lease of a farm were considered in Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1971,

unreported). In Home Yardage (NSW) Pty Ltd v Telado Pty Ltd (FCA, Beaumont J, 8 April 1998, unreported, BC9801525), it was held that although the landlord was not under any obligation to have air conditioning equipment operating, and the tenant’s obligation to repair did not oblige it to incur any capital costs, the landlord could not ‘withdraw the service for any arbitrary or non-technical reason’ (see BC at 7). As to the effect of a landlord’s covenant to use ‘best endeavours’ to keep air conditioning and elevators working, see Bevillesta Pty Ltd v Sovereign Motor Inns Pty Ltd (2002) 11 BPR 20,289; [2003] ANZ ConvR 35 (CA). The meaning of the expressions ‘land’ and ‘demised premises’ were discussed in Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA). Hodgson JA (with whom Basten JA and McClellan CJ at CL agreed on this issue) referred to the following passage in the judgment of Barrett J, at first instance, with approval, at least as a general statement (at [19]): The expression ‘Demised Premises’, as defined, refers to a part of the totality that constitutes the ‘Land’. The definition of ‘Demised Premises’ is not exhaustive. It uses the word ‘includes’, not ‘means’. The definition does not refer to buildings but there can be no doubt that buildings on the ‘Land’ are part of the ‘Demised Premises’. In the law of landlord and tenant, the expression ‘demised premises’ generally refers to a house or building together with its land and outbuildings: Natural Gas & Oil Corporation Pty Ltd v Byrne (1951) 68 WN (NSW) 207; Cram v Bellambi Coal Co Ltd (1964) 82 WN (NSW) (Pt 1) 18. The basic meaning of ‘premises’ refers to buildings: Beacon Life and Fire Assurance Co v Gibb (1862) 1 Moo (NS) 73; Turner v York Motors Pty Ltd (1951) 85 CLR 55. In the present case, where there is a distinction between the ‘Land’ and the ‘Demised Premises’, it seems to me that the latter expression must be taken to comprehend the buildings on or forming part of the ‘Land’, together with the particularly identified items specifically brought within the ‘Demised Premises’ concept, being (subject to any contrary indication in the particular context) fixtures, fittings, furnishings, plant, machinery, and equipment from time to time ‘installed therein’, plus any fences and gates ‘at or around

the Land’, subject, in each case to the lessor’s having ‘an interest’ in the particular item. [page 303] A breach of covenant may be established in circumstances where the event causing damage is not, at least strictly, within the class of events in relation to which the covenant might be thought to be intended to provide protection. Thus, in Taylor Woodrow Property Co of Australia Pty Ltd v Coles Myer Ltd (1999) 9 BPR 17,449; (1999) NSW ConvR ¶55-912 it was held that, as a matter of construction, a covenant to keep the roof in a weatherproof condition was breached when water from a cooling tower entered the premises — there being no evidence that water from the cooling tower was not relevantly equivalent to rainwater on the roof: see [30]–[34] per Giles JA, with whom the other members of the Court of Appeal agreed. See also the discussion of a tenant’s repair and related covenants with respect to ‘storm’ and ‘flood’ in Hirlmont Pty Ltd v Dybka (1999) ANZ ConvR 405; (1998) Q ConvR ¶54-517 (CA). As to the meaning of the words ‘paint’ and ‘repaint’ in the context of particular lease provisions, see Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA).

Fair wear and tear [10.11] Often the obligation to repair is cut down by the exception of ‘fair wear and tear’ or ‘reasonable wear and tear’. The fact that fair wear and tear is excepted from the lessee’s covenant to repair does not impose on the lessor any obligation to make good damage due to those causes: Collins v Winter [1924] NZLR 449. The lease of a shop contained a covenant to repair, fair wear and tear excepted. The tenant undertook to repair on notice given. A stone was thrown and slightly cracked a shop window. The tenant, contending that the injury did not in any way interfere with the purposes for which the premises would ordinarily be used, on notice being given, refused

to repair, and the landlord brought an action of ejectment. It was held that it was a question for the jury to determine whether the damage done was of a substantial character as distinguished from a mere fanciful injury: Julian v McMurray (1924) 24 SR (NSW) 402. The lessee of licensed premises covenanted to ‘well and sufficiently repair and keep in repair and … yield up to the lessor, the demised premises in good, substantial, and tenantable repair, fair wear and tear … in every case excepted’. The exception of fair wear and tear did not relieve the lessee from liability under his covenant as to matters which were repairs proper without proof by him of the actual state at the time of the demise and the user, traffic, or inevitable waste on which he relied to establish the exemption, but the decay of a tank by atmospheric influence did come within the exemption: Henderson v Harrison [1916] QWN 6; 10 QJPR 25. In Haskell v Marlow [1928] 2 KB 45 at 58–9, Talbot J said of a covenant to repair which excepted reasonable wear and tear: The meaning is that the tenant (for life or years) is bound to keep the house in good repair and condition, but is not liable for what is due to reasonable wear and tear. That is to say, his obligation to keep in good repair is subject to that exception. If any want [page 304] of repair is alleged and proved in fact, it lies on the tenant to show that it comes within the exception. Reasonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces. The exception of want of repair due to wear and tear must be construed as limited to what is directly due to wear and tear, reasonable conduct on the part of the tenant being assumed. It does not mean that if there is a defect originally proceeding from reasonable wear and tear the tenant is released from his obligation to keep in good repair and condition everything which it may be possible to trace ultimately to that defect. He is bound to do such repairs as may be required to prevent the consequences flowing originally from wear and tear from producing others which wear and tear would not directly produce.

For example, if a tile falls off the roof, the tenant is not liable for the immediate consequences; but, if he does nothing and in the result more and more water gets in, the roof and walls decay and ultimately the top floor, or the whole house, becomes uninhabitable, he cannot say that it is due to reasonable wear and tear, and that therefore he is not liable under his obligation to keep the house in good repair and condition. In such a case the want of repair is not in truth caused by wear and tear. Far the greater part of it is caused by failure of the tenant to prevent what was originally caused by wear and tear from producing results altogether beyond what was so caused. This reasoning was disapproved by the Court of Appeal in Taylor v Webb [1937] 2 KB 283; [1936] 2 All ER 763, where it was held that the exception relating to fair wear and tear operated to relieve the covenantor from liability in respect of consequential damage by rain which gained entry to the premises in consequence of defects in the roof and skylights which were themselves due to the action of the elements. The House of Lords has now restored the dictum of Talbot J and held that the exception covers only the remedying of things which wear out in the course of reasonable use and does not cover other damage which flows from the wear and tear: Regis Property Co Ltd v Dudley [1959] AC 370; [1958] 3 All ER 491; see Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA) where the expression ‘reasonable wear and tear’ was also considered: and see Bonafair Holdings Pty Ltd v Hungry Jack’s Pty Ltd [2016] NSWCA 276. Further as to the scope of the exception see Bunyip Buildings Pty Ltd v Gestetner Pty Ltd [1969] SASR 87; Norbury Sudbury Ltd v Noront Steel (1981) Ltd (1984) 11 DLR (4th) 686. Fair wear and tear in relation to fences and gates on a farm was dealt with by Adam J in Woorarra Pastoral Co Pty Ltd v Cash; and with respect to the deterioration of a concrete slab, see Cugg Pty Ltd v Gibo Pty Ltd (2001) 10 BPR 18,641 (Hodgson CJ in Eq).

Accident [10.12] Some leases provide that the tenant will not be liable for damage

caused to the premises by reason of an accident. Where the lessee wishes to take advantage of that sort of exception to the covenant which obliges him or her to keep the demised premises in good repair, he or she must establish that a reasonable person [page 305] in his or her shoes would not have foreseen that the relevant event would probably cause the damage to the leased premises of the kind that occurred and that he or she could not have reasonably guarded against it. Generally, the term ‘accident’ bears its ordinary meaning of an event causing damage for which the lessee is not responsible; in other words, where he or she can show that the event that caused the damage was unintentional and unexpected: Saviane v Stauffer Chemical Co (Australia) Pty Ltd [1974] 1 NSWLR 665; see also Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211, and [8.6].

Remedies for breach [10.13] The court will not ordinarily grant specific performance of a covenant to repair: Hill v Barclay (1810) 16 Ves Jun 402; 33 ER 1037; Maud v Sandars [1943] 2 All ER 783 at 785; Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 at 608; [1958] 1 WLR 845. This reluctance flows from the general refusal of the courts to grant specific performance when this would involve continued supervision by the court to ensure fulfillment of the contract: see J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 297–8 (per Dixon J); and, similarly, Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL); and see Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, para 20-065; and see [7.8]. There may, however, be some exceptions to this general position in particular circumstances: see Argyll Stores [1998] AC 1 at 16 (per Lord Hoffmann); Rainbow Estates Ltd v Tokenhold Ltd [1999] Ch 64; and see Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33; and Jeune v Queens Cross Properties Ltd [1974] Ch 97; [1973] 3 All ER 97

where specific performance was ordered of a landlord’s covenant; and see also Woodfall’s Landlord and Tenant, para 4.109; and Dowding and Reynolds, Dilapidations — The Modern Law and Practice, paras 28-01–28-15, pp 655–63. In Jeune v Queens Cross Properties Ltd the landlord was plainly in breach of the repair covenant and there was no doubt as to the specific work which was required to be done to remedy the breach. In contrast, Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd involved ongoing obligations, not once and for all rectification work. The lease contained a covenant by the landlord, in substance, to maintain lifts and to replace them when required (and see [10.6]). The tenant adduced evidence of a significant failure in the lift service in the building, to such an extent that its motel business was gravely affected. One of the matters considered was: ‘Does equity ever give relief in respect of a covenant to maintain a lift service?’. In dealing with this question Young J provided a statement of the position as to the extent of equitable relief available for breach of a repair, or similar, covenant (at 18 NSWLR 37– 8): It is trite law that equity will not ordinarily grant specific performance of a covenant to repair or a covenant of a like nature: see, eg, Mosely v Virgin (1796) 3 Ves Jun 184 at 185; 30 ER 959 at 960 and Hill v Barclay (1810) 16 Ves Jun 402 at 406; 33 ER 1037 at 1038. It is sometimes said that this general rule does not apply to enforcing a lessor’s [page 306] covenants. It is hard to support a proposition in that form in view of what was said by Jenkins LJ in Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 at 608. However, there is a principle which does not go quite so far and that is, that where the landlord has covenanted to repair or maintain some part of the property which is not the subject of the lease and which the tenant is not able to enter onto and repair at his own expense, then in a proper case, the equity court may grant a mandatory order to compel the landlord to carry out the repair or maintenance.

One of the first cases in this line is Lane v Newdigate (1804) 10 Ves Jun 192; 32 ER 818. There the plaintiff had a lease of a mill which was suffering because the defendants were not maintaining the canal on which the mill relied. Lord Eldon declined to make an order requiring the defendant to repair the canal, but granted an injunction to restrain the defendants impeding the plaintiff from proper use of the canal. The practical effect is the same, because as Lord Eldon himself remarked (at 194; 819): … The injunction, I shall order, will create the necessity of restoring the Stop-gate; and attention will be had to the manner in which he is to use these locks; and he will find it difficult, I apprehend, to avoid completely repairing these works. This utterance is certainly relevant to the third question I have to consider. The case shows that it is one where equity interferes in the present type of situation. There then come a series of railway cases, the first of which is Storer v Great Western Railway Co (1842) 2 Y & C Ch Cas 48; 63 ER 21. There, there had been an agreement that the plaintiff would withdraw his opposition to the London to Bristol railway passing across his lands on condition that the railway company paid his price and ‘construct and for ever thereafter maintain one neat archway, sufficient to permit a loaded carriage of hay to pass under the archway, at such place as the plaintiff … should think most convenient … and should form and complete the approaches to such archway’. The defendant having obtained the land for its railway, declined to build the archway but Knight Bruce V-C specifically ordered that it both construct and maintain the archway in accordance with the agreement. To a similar effect were Wilson v Furness Railway Co (1869) LR 9 Eq 28 and Greene v West Cheshire Railway Co (1871) LR 13 Eq 44. Cases which more nearly approach the current facts have occurred in England in recent years. The first of the series is Jeune v Queens Cross Properties Ltd [1974] Ch 97. There, a balcony had collapsed in a building, in which building each of the four plaintiffs had a lease,

though the balcony itself was not in any of these leases. Each of the leases contained a covenant that the landlord would maintain, repair and renew the structure of the building including external walls and that included the balcony. Pennycuick V-C granted a mandatory order requiring the landlord to reinstate the balcony in a form in which it existed prior to its partial collapse. That case was followed by Rubin J in Francis v Cowlcliffe Ltd (1976) 33 P & CR 368; 239 EG 977. In that case the plaintiff lived in a third floor flat in London and the hydraulic lift had failed to operate after February 1972. The reason for this was that the landlord was redeveloping the building and had exhausted its funds. The judge ordered specific performance on the repairing covenant to restore the lift. It should again be noted that the lift itself was not part of a lease. It also might be noted that the judge’s decision was reinforced by the presence of the Housing Act 1974 (UK), s 125, which removes the defence of lack of mutuality [page 307] in respect of specific performance cases involving landlords’ covenants in leases: see also Parker v Camden London Borough Council [1986] Ch 162. It seems to me that the principle that I have stated above and which is sufficient to dispose of this case is well established. There would be room for argument that there is a wider principle which would avail the plaintiff in this case, namely that these days this Court can always grant an injunction or give other equitable relief when justice requires it, Wight v Haberdan Pty Ltd [1984] 2 NSWLR 280, a decision based in part on Greene’s case previously considered. One manifestation of this principle is that in an appropriate case, despite the general principle, equity does give specific performance of a contract to build or do repairs: Price v Strange [1978] Ch 337. As to the terms of any final injunction, see at 41 per Young J.

In Hart v Emelkirk Ltd [1983] 1 WLR 1289 where the landlord had refused or neglected to collect rents due under several leases and refused or neglected to perform the covenants in the leases to repair and insure the properties, the court appointed a receiver to receive rents and profits and other moneys payable under the leases and to manage the properties in accordance with the rights and obligations of the reversioner. The receiver was appointed under the Supreme Court Act 1981 (UK) s 37 (now retitled as the Senior Courts Act 1982), which allows the court to ‘appoint a receiver in all cases in which it appears to the court to be just and convenient to do so …’: see also Judicature Act 1873 (UK) s 25(8) and Daniell’s Chancery Practice, para 1409 and following. Accordingly, the remedy of a landlord who either is not entitled or does not choose to determine the lease for breach of a repairing covenant is almost invariably an action for damages. At common law the measure of damages, where an action is brought upon the covenant to repair at the end of the term, is such a sum as will put the premises into the state of repair in which the tenant was bound to leave them: Joyner v Weeks [1891] 2 QB 31; [1891–4] All ER Rep Ext 1938; Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567 at 582–4 and 586; Duke of Westminster v Swinton [1948] 1 KB 524; 1 All ER 208; Sleeman v Colonial Distributors Ltd [1956] NZLR 188; Lowe v Ellbogen [1959] NZLR 1103; Re Zis [1961] WAR 120; Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1971, unreported); and Maori Trustee v Rogross Farm Ltd [1994] 3 NZLR 410 (CA). In addition, damages may be awarded for the loss of the use of the premises while they are undergoing repair: Woods v Pope (1835) 6 C & P 782; 172 ER 1461. Similarly, a breach of a clean up obligation may give rise to a claim for damages for loss of opportunity as a result of the leased premises being unavailable for further letting pending completion of clean up work, which would not have been required had the relevant covenant or covenants been properly observed: see Masha Nominees Pty Ltd v Mobil Oil Australia Pty Ltd [2006] VSC 15; (2006) Aust Contract R ¶90-237 (per Hargrave J) at [266] and following, applying Sellars v Adelaide Petroleum (1994) 179 CLR 332 and Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64. The measure of damages in an action brought after the determination of a lease for [page 308]

damages for breach of a covenant to repair and to yield up in repair, where the act of repairing amounts to a substantial rebuilding, is the cost of rebuilding, less any increase in the value of the premises when rebuilt: Strang v Gray (1952) 55 WALR 9. The position may, however, be different where the claim for damages for want of repair, which may also be made in the context of or as part of a claimed breach of the covenant to deliver up the premises in a tenant-like manner (see [8.6]), arises where there has been an alteration or modification to the demised premises without the landlord’s consent. Thus, in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 49; [2008] FCAFC 38, a case concerned with modification works which were carried out without the landlord’s consent where the landlord claimed damages by way of the full cost of reinstating the demised premises to their original condition plus rent lost for the period of the reinstatement work, Finkelstein and Gordon JJ stated the position as follows: [9] … An action may be brought for breach of a repair covenant while the lessee is still in possession during the term of the lease. If brought while the tenancy continues the general rule is that the damages ‘represents the diminution in the value of [the] reversion owing to the breach of covenant’ — an amount that will be determined by reference to the length of time the lease is still to run: Conquest v Ebbetts [1896] AC 490, 494; Gooderham and Worts Ltd v Canadian Broadcasting Corporation [1947] AC 66, 83. The reversion referred to is the reversion that falls in on the expiry of the lease: Terroni v Corsini [1931] 1 Ch 515, 519; Hanson v Newman [1934] Ch 298, 304. The diminution in value is preferred to the cost of putting the premises into repair because the landlord is not bound to expend any money recovered as damages in carrying out the repairs and whatever he recovers beyond his reversionary interest is regarded as excess compensation: Turner v Lamb (1845) 14 M & W 412, 412 [153 ER 535, 535–536]. [10] On the other hand, if the action is brought at or near the termination of the lease the rule, firmly established in Joyner v Weeks [1891] 2 QB 31, is that the landlord is entitled to recover the cost of repairs. Strictly speaking the cost of repairs includes any loss of rent

during the repair period with some deduction, if appropriate, for betterment: Woods v Pope (1835) 6 Car & P 782 [172 ER 1461]; Birch v Clifford (1891) 8 TLR 103, 103; Yates v Dunster (1855) 11 Exch 15 [156 ER 726]. In Joyner v Weeks Lord Esher described (at 43) this measure of damages as ‘a rule of law’ and later as the ‘ordinary rule’ but, more accurately as Fry LJ put it (at 46 and 47), it is the ‘ordinary rule’ or the ‘prima facie rule’. [11] In Graham v Markets Hotel the High Court applied Joyner v Weeks. In that case a sub-lease of a hotel contained a repair covenant which also required the sub-tenant to yield up the hotel in repair. The subtenant decided to improve the hotel. An aspect of the works involved closing up an existing lavatory and installing another in adjoining premises. When the lease expired the demised premises could not be used as a hotel without a new toilet as the proprietor would otherwise have been in breach of liquor licensing laws. Latham CJ (with whom Rich J agreed) said (at 582): ‘The general rule for assessing damages for breach of a covenant by a lessee to deliver up the demised premises in repair was settled by Joyner v Weeks, where it was held that the damages were the cost of putting the premises into the state of repair required by the covenant’. To like [page 309] effect see Starke J at 586 (who said that the measure of damages ‘is authoritatively stated in Joyner v Weeks’) and Williams J at 593 (‘At common law the damages recoverable would be the sum required to restore the lavatory in the basement’, citing, among other cases, Joyner v Weeks). [12] The rule is the same in New Zealand. In Maori Trustee v Rogross Farm Ltd [1994] 3 NZLR 410 Tipping J, in delivering the judgment of the Court of Appeal, said (at 420) after a review of the authorities in several jurisdictions: ‘The rule in Joyner v Weeks is not an absolute rule. It is, however, the prima facie rule which will be applied unless the lessee can show by sufficiently cogent evidence that in both the short

and the long term the lessor will definitely suffer no loss or will suffer a loss which can definitely be assessed at less than the prima facie measure’. [13] It will be noticed that the cases to which we have referred all concern a covenant to keep and leave premises in repair: a covenant such as cl 2.10. There can be no meaningful distinction between a full repair covenant and cl 2.13, at least as regards the extent to which the clause prohibits alterations or additions without approval. This is because relevantly the obligations are the same. Accordingly damages for breach of cl 2.13 are to be assessed on the same basis as for breach of a repair covenant. So, for example, in Eyre v Rea [1947] KB 567 the defendant breached a covenant not to alter the internal planning of the premises by converting a house into flats and was ordered to pay the cost of re-conversion, although the premises were more valuable as flats. See also Whitham v Kershaw (1885) 16 QBD 613, 616–617 where Lord Esher said: ‘[I]f there were a covenant to leave the premises in the same condition as when taken, the damages in an action which could only be brought after the termination of the lease would obviously be the cost of replacing the house by a house of equal value’. The tenant appealed to the High Court (Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272), seeking orders that the trial judge’s assessment of damages on the basis of diminution in value be restored. In dismissing the appeal, the High Court said: [13] Underlying the tenant’s submission that the appropriate measure of damages was the diminution in value of the reversion was an assumption that anyone who enters into a contract is at complete liberty to break it provided damages adequate to compensate the innocent party are paid. It is an assumption which at least one distinguished mind has shared: Zhu v Treasurer (NSW) (2004) 218 CLR 530 at 274–5. It has been dignified as “the doctrine of efficient breach”. It led, in the landlord’s submission, to an attempt “arrogantly [to] impose a form of ‘economic rationalism’” on the unwilling landlord. The assumption underlying the tenant’s submission takes no account of the existence of equitable remedies, like decrees of specific

performance and injunction, which ensure or encourage the performance of contracts rather than the payment of damages for breach. It is an assumption which underrates the extent to which those remedies are available; Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 at 503–4. However, even if the assumption were correct it would not assist the tenant. The tenant’s submission misunderstands the common law in relation to damages for breach of contract. The “ruling principle” (Wertheim v Chicoutimi Pulp Company [1911] AC 301 at 307) confirmed in this court on numerous occasions; see for example, Wenham v Ella (1972) 127 CLR 454 at 460 and 471, with respect to damages at common law for breach of [page 310] contract is that stated by Parke B in Robinson v Harman (1848) 1 Exch 850 at 855; 154 ER 363 at 365: The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. Oliver J was correct to say in Radford v De Froberville [1978] 1 All ER 33 at 44; [1977] 1 WLR 1262 at 1273 that the words “the same situation, with respect to damages, as if the contract had been performed” do not mean “as good a financial position as if the contract had been performed” (emphasis added). In some circumstances putting the innocent party into “the same situation … as if the contract had been performed” will coincide with placing the party into the same financial situation. Thus, in the case of the supply of defective goods, the prima facie measure of damages is the difference in value between the contract goods and the goods supplied. But as Staughton LJ explained in Ruxley Electronics and Constructions Ltd v Forsyth [1994] 3 All ER 801 at 806; [1994] 1 WLR 650 at 655, such a measure of

damages seeks only to reflect the financial consequences of a notional transaction whereby the buyer sells the defective goods on the market and purchases the contract goods. The buyer is thus placed in the “same situation … as if the contract had been performed”, with the loss being the difference in market value. However, in cases where the contract is not for the sale of marketable commodities, selling the defective item and purchasing an item corresponding with the contract is not possible. In such cases, diminution in value damages will not restore the innocent party to the “same situation … as if the contract had been performed”. [14] In circumstances like the present, where the relevant covenant is in the form of cl 2.13, it is not the case that, in Oliver J’s words (Radford at All ER 44; WLR 1273): … the disappointment of the plaintiff’s hopes and expectations from the contract becomes a relevant consideration only so far as it is measurable either by some deterioration of the plaintiff’s financial situation or by some failure to obtain an amelioration of his financial situation. To reason otherwise is to undermine a fundamental postulate inherent in cl 2.13. [15] Similar thinking underlies a statement made by Dixon CJ, Webb and Taylor JJ in Bellgrove v Eldridge (1954) 90 CLR 613. A builder who had built a house which, in breach of contract, contained defective concrete and mortar, contended that the measure of damages was limited to diminution in value and did not extend to costs of rectification. Their Honours said (at 617): (emphasis in original): In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be

measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract. So here, the landlord was contractually entitled to the preservation of the premises without alterations not consented to; its measure of damages is the loss sustained by the [page 311] failure of the tenant to perform that obligation; and that loss is the cost of restoring the premises to the condition in which they would have been if the obligation had not been breached. See also the discussion of the authorities, including the usual authorities applicable to the measure of damages with respect to building work not performed in accordance with contractual specifications in circumstances where the rule in Joyner v Weeks is not applicable (particularly Bellgrove v Eldridge (1954) 90 CLR 613; Ruxley Electronics & Construction Ltd v Forsyth [1996] 1 AC 344 (HL); and Jacob & Youngs Inc v Kent 230 NY 239; 129 NE 889 (1921) which is referred to in the judgment of Rares J in Bowen Investments). See also the judgment of Finkelstein and Gordon JJ in this respect at [29]; see also N Dowding and K Reynolds, Dilapidations: The Modern Law and Practice, 5th ed, Sweet & Maxwell, 2013, at [31-05] and [31-09]–[31-12]. See also Gimtak Pty Ltd v Cathie [2001] VSC 88, particularly with respect to the issue of reasonableness of any award of damages as depending on the proportionality between the benefit in fulfilment of the obligation and the cost of compliance with that obligation: at [9] (per Smith J), referring to Bellgrove v Eldridge (1954) 90 CLR 613; Ruxley Electronics & Construction Ltd v Forsyth [1996] 1 AC 344; James v Hutton [1950] 1 KB 9 (CA); Joyner v Weeks [1891] 2 QB 31; Alucraft Pty Ltd v Grocon [1996] 2 VR 386; Eyre v Rea [1945] 1 KB 567; and Westminster v Swinton [1948] 1 KB 524. See also Wincant Pty Ltd v State of South Australia (1997) 69 SASR 126 (FC) in relation to the question whether a tenant can be required to remove tenant’s fixtures on delivery up

where their presence results in the premises not being in good and tenantable repair (and see [10.5]). When an action is brought by the landlord during the currency of the term for breach of a repairing covenant, the measure of damages is the diminution of the value of the reversion: Conquest v Ebbetts [1896] AC 490; [1895–9] All ER Rep 622; Duke of Westminster v Swinton; Sleeman v Colonial Distributors Ltd [1956] NZLR 188. The rule of the common law whereby the cost of repairs was allowed in actions brought after the termination of the tenancy will often be productive of injustice. In Joyner v Weeks the plaintiff brought an action against the defendant upon a covenant in a lease made between them that the defendant would leave the demised premises in repair at the end of the lease. When the lease came to an end the premises were out of repair, so that there was a breach of the covenant by the defendant, who paid £45 into court. The plaintiff proved before the official referee that the cost of putting the premises into repair was £70; but the defendant alleged that the plaintiff was entitled only to nominal damages, upon the ground that he had demised the premises to a third party, who had covenanted to pull down and rebuild the premises and also to pay a higher rent than the defendant had paid. The defendant therefore contended that the want of repair in which he had left the premises at the end of the term had caused no damage to the plaintiff. The official referee gave the plaintiff a farthing damages, and [page 312] gave the defendant all the costs of the action. It was held by the Court of Appeal that the measure of damages was the amount which the landlord proved to be the fair and reasonable sum necessary to put the premises into the state of repair in which he was entitled to have them left; the plaintiff was accordingly entitled to judgment for £70. Another case which illustrates the common law rule is Henderson v Thorn [1893] 2 QB 164. In that case, two years before the expiration of a lease the lessor brought an action against the lessee for breach of a covenant to repair. The lessee paid into court the sum of £235, which was accepted in satisfaction. No repairs were in fact done. At the expiration of the term another action was brought by the same lessor for

breach of covenants to repair and leave in repair. The particulars in this action included the items of non-repair in respect of which the claim had been made in the first action; they also included other items. The official referee assessed the damages by ascertaining the amount required to put the premises into repair, together with a sum for any depreciation that would have accrued had the repairs been done on the first occasion between that date and the end of the term, and deducting from such amount the sum received by the lessor in the first action. An application by the defendant to set aside this decision failed, Wills J saying [1893] 2 QB 164 at 166–7: It is possible that in paying this sum into court the defendant acted under a misapprehension of his legal liabilities, and thought that the measure of damages was the sum required to put the premises into repair; but it is also possible that he proceeded on the ground that he was aware that the true measure of damages was not the sum required to put the premises into repair, but the loss to the landlord measured by the depreciation in the saleable value of the reversion. It is clear that that is the law as to the measure of damages where the action for breach of the covenant to repair is brought during the currency of the tenancy. It must be taken, therefore, that the sum paid into court two years ago did not represent the sum required to put the premises into repair, or that, if it did, it was an accident: the two measures of damage may often come to the same thing; they may often be different. It is impossible therefore, to say that the defendant is entitled to treat the payment into court as made upon the footing that it was the amount required to put the premises in repair. If he were, the contention on his behalf would be perfect, and we should accept the proposition that a fresh start must be made from the date of the first action, and that the defendant was only liable for breaches of covenant committed since that date — that is, for additional acts of nonrepair. But the measure of damages being otherwise, I do not see how we can accept that view of what was done on that occasion. In my judgment, the only way of treating this matter is that which has been adopted by the learned official referee. An action for breach of covenants to repair and leave in repair is brought at the end of the term, and a large sum of money claimed as damages; it is true that the sum paid by the tenant is often a

sum preposterous in relation to the real damage to the landlord; as, where he is going to pull down the premises and is, therefore, not the loser by a penny because they are returned on his hands out of repair. In such a case, the rule of law may amount to putting into the landlord’s pocket money far beyond the damage which he has actually suffered; but it must be remembered that there are difficulties on the other side, and that, but for this rule of law, a tenant who has broken his contract might come off better than if he had kept it; a result not to be lightly encouraged. It is not surprising that of [page 313] these two principles the Court of Appeal has chosen that which they believed to be the workable one, that is, that at the end of the term, no matter how indifferent it may be to the landlord whether his premises are in perfect order or not, yet if the repairing covenants are not performed the landlord is entitled to recover the amount necessary to put them into repair. It is impossible for us in this case to treat the first set of damages as the equivalent of putting the premises in repair; we can only say that, when the end of the term comes and the landlord is entitled to put the premises in repair at the expense of the tenant who has broken his contract, he shall not have the money twice over, but shall, subject to an allowance for such depreciation as would have accrued, had the covenant been performed on the first occasion, between that date and the end of the term, subtract what was paid to him before from the amount that he now recovers. It was to remedy Joyner v Weeks [1891] 2 QB 31; [1891–4] All ER Rep Ext 1938 that s 18(1) of the Landlord and Tenant Act 1927 was enacted in England: Duke of Westminster v Swinton [1948] 1 KB 524; 1 All ER 208; Sleeman v Colonial Distributors Ltd [1956] NZLR 188. This provision is in the following terms: Damages for a breach of a covenant or agreement to keep or put premises in repair during the currency of a lease, or to leave or put

premises in repair at the termination of a lease, whether such covenant is expressed or implied, and whether general or specific, shall in no case exceed the amount (if any) by which the value of the reversion (whether immediate or not) in the premises is diminished owing to the breach of such covenant or agreement as aforesaid; and in particular no damage shall be recovered for a breach of any such covenant or agreement to leave or put premises in repair at the termination of a lease, if it is shown that the premises, in whatever state of repair they might be, would at or shortly after the termination of the tenancy have been or be pulled down, or such structural alterations made therein as would render valueless the repairs covered by the covenant or agreement. There is a corresponding provision in Conveyancing Act 1919 (NSW) s 133A(1) and Property Law Act 1974 (Qld) s 112(1). That there is no corresponding provision in Victoria and other jurisdictions is a matter for regret. The terms of the lease may give the landlord, or the tenant for that matter, options other than merely seeking damages for breach of a covenant to repair. For example, in Hamilton v Martell Securities Ltd [1984] Ch 266 the lease contained an express covenant which conferred on the landlord the right to enter on the demised premises to effect repairs in accordance with the covenants and provisions of the lease with a provision that ‘the expense of such repairs shall be repaid by the Lessee to the Lessor on demand’. It was held that an action by the landlord to recover the cost of repairs under such a covenant was a claim for a debt due under the lease rather than a claim for damages for breach of the covenant to repair. The Court of Appeal decision in Middlegate Properties Ltd v Gidlow-Jackson (1977) 34 P & CR 4 was applied: see 674. Similarly, in Jervis v Harris [1996] Ch 195 (CA), Millett LJ (with whom the other members of the Court of Appeal agreed) said (at 202–3): The law of contract draws a clear distinction between a claim for payment of a debt and a claim for damages for breach of contract. The distinction and its consequences are set [page 314]

out in Chitty on Contracts, 27th ed. (1994), vol. 1, p. 1046, para. 21031. As there stated, a debt is a definite sum of money fixed by the agreement of the parties as payable by one party to the other in return for the performance of a specified obligation by the other party or on the occurrence of some specified event or condition; whereas damages may be claimed from a party who has broken his primary contractual obligation in some way other than by failure to pay such a debt. The plaintiff who claims payment of a debt need not prove anything beyond the occurrence of the event or condition on the occurrence of which the debt became due. He need prove no loss; the rules as to remoteness of damage and mitigation of loss are irrelevant; and unless the event on which the payment is due is a breach of some other contractual obligation owed by the one party to the other the law on penalties does not apply to the agreed sum. It is not necessary that the amount of the debt should be ascertained at the date of the contract; it is sufficient if it is ascertainable when payment is due. The landlord’s monetary claim under clause 2(10) does not arise unless and until he has carried out the repairs; when it does arise, his claim is for an account and payment, not for damages. Arguments were also raised in Jervis as to the possible characterisation of the landlord’s right to recover the cost of repairs as something in the nature of a penalty, or something in the nature of a ‘substitute remedy’, referring to the dictum of Lord Atkin in Moss’ Empires Ltd v Olympia (Liverpool) Ltd [1939] AC 544 at 550–1. As to these arguments, Millett LJ said (at 206): But it is well settled that the event on which the sum alleged to be a penalty becomes payable must be a breach of some other contractual obligation owed by the obligor to the obligee. That is not the case here. There is only one relevant obligation on the part of the tenant, and that is to repay the landlord his costs of carrying out repairs himself. Counsel for the defendant advanced an interesting argument based on the law relating to bonds. As at present advised, I think that a bond in a sum certain conditioned on the tenant’s keeping the premises in repair, or carrying out specific works of repair required by the landlord, would constitute a penalty even in the absence of an

express covenant by the tenant to do so. The condition of the bond supplies the necessary obligation. But the event which triggers the tenant’s liability under a clause such as clause 2(10) is the expenditure by the landlord of money in effecting repairs, not the anterior failure of the tenant to repair. If the payment were secured by a bond, it would be a simple or single bond, not a double or conditional one. The doctrine of penalties, which operates by striking down the penalty and enforcing the condition, does not apply to the former. In Export Credits Guarantee Department v Universal Oil Products Co [1983] 1 WLR 399, 404 Lord Roskill expressly approved of the warning given by Diplock LJ in Philip Bernstein (Successors) Ltd v Lydiate Textiles Ltd (unreported), 26 June 1962; Court of Appeal (Civil Division) Transcript No. 238 of 1962 against extending the law by relieving against an obligation in a contract entered into between two parties which does not fall within the well defined limits in which the court has in the past shown itself willing to interfere. In Maori Trustee v Bolton [1971] NZLR 226, the measure of damages for breach of a covenant to improve was considered. Henry J refused to apply the rule in Joyner v Weeks [1891] 2 QB 31. [page 315] Mere breaches of covenant on the part of the tenant do not amount to repudiation or fundamental breach: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 34; and see [16.26]. The extent of a landlord’s liability in damages to a tenant for breach of the repairing covenant was considered in Calabar Properties Ltd v Stitcher [1984] 1 WLR 287. The action arose as the result of the landlord failing to rectify defects in the premises which resulted in water entering the tenant’s flat and ultimately rendering it uninhabitable. Stephenson LJ said (at 295–6): In measuring and assessing any tenant’s damages for breach of a landlord’s repairing covenant the court must, I think, always start with the fundamental principle that they are ‘so far as is possible by means of

a monetary award, to place the plaintiff in the position which he would have occupied if he had not suffered the wrong complained of, be that wrong a tort or a breach of contract’. I take that statement from the judgment of Donaldson LJ in Dodd Properties (Kent) Ltd v Canterbury City Council [1980] 1 All ER 928 at 938; [1980] 1 WLR 433 at 456, a case in which this court applied that principle by awarding the owners as damages for negligence and/or nuisance the cost of repairing a building damaged by the defendants’ operations, and the lessees of the building their loss of profits through dislocation of their business. The diminution in the building’s value in the open market was not considered as a basis for assessing the damage of either of the plaintiffs. That basis was, however, considered appropriate to the assessment of damages for the negligence of a surveyor at the suit of a purchaser of the surveyed property in Perry v Sidney Phillips & Son (a firm) [1982] 3 All ER 705; [1982] 1 WLR 1297, where the court awarded the plaintiff the difference in price between what he paid for the property and its market value as it should have been described at the time of purchase with interest and damages for distress and discomfort, vexation and inconvenience, since his conduct in the circumstances had been reasonable. So the true measure of damages for persons owning or occupying land, whether in tort or contract, depends on the position of the plaintiffs and all the circumstances in which they have suffered loss and damage, in the light of the fundamental principle to which I have referred. Applying the principle more particularly, Griffiths LJ said (at 297–8): The object of awarding damages against a landlord for breach of his covenant to repair is not to punish the landlord but, so far as money can, to restore the tenant to the position he would have been in had there been no breach. This object will not be achieved by applying one set of rules to all cases regardless of the particular circumstances of the case. The facts of each case must be looked at carefully to see what damage the tenant has suffered and how he may be fairly compensated by a monetary award. In this case, on the findings of the judge, the landlords after notice

of the defect neglected their obligation to repair for such a length of time that the flat eventually became uninhabitable. It was also clear that, unless ordered to do so by an order of the court, the landlords had no intention of carrying out the repairs. In these circumstances the tenant had two options that were reasonably open to her: either of selling the flat and moving elsewhere or alternatively of moving into temporary accommodation and bringing an action against the landlords to force them to carry out the repairs and then returning to the flat after the repairs were done. [page 316] If a tenant chooses the first option then the measure of damages would indeed be the difference in the price he received for the flat in its damaged condition and that which it would have fetched in the open market if the landlord had observed his repairing covenant. If, however, the tenant does not wish to sell the flat but to continue to live in it after the landlord has carried out the necessary structural repairs it is wholly artificial to award him damages on the basis of loss in market value because once the landlord has carried out the repairs and any consequential redecoration of the interior is completed there will be no loss in market value. The tenant should be awarded the cost to which he was put in taking alternative accommodation, the cost of redecorating, and some award for all the unpleasantness of living in the flat as it deteriorated until it became uninhabitable. These three heads of damage will, so far as money can, compensate the tenant for the landlord’s breach. Two other points of significance are made in the judgments: first, that the tenant was not entitled to recover outgoings or running costs in respect of the flat (for example, rates) during the time it was uninhabitable because ‘she had not terminated the lease and had to pay outgoings on some property’ (at 291 per Stephenson LJ); second, a tenant would not be awarded the cost of alternative accommodation by way of damages until the landlord is in breach of his or her covenant to repair: ‘A landlord is not in breach of his covenant to

repair until he has been given notice of the want of repair and a reasonable time has elapsed in which the repair could have been carried out’ (at 298 per Griffiths LJ, explaining Green v Eales (1841) 2 QB 225). In the present case the tenant failed under this head of damages as it was not specially pleaded. Applying this decision, the Court of Appeal subsequently ordered damages in favour of a tenant for having to live in an unrepaired house after it should have been repaired, and the landlord to make good any consequential loss and damage: McGreal v Wake (1984) 13 HLR 107; [1984] 1 EGLR 42 (CA). The measure of damages for breach of a landlord’s repair covenant with respect to machinery on the leased premises was considered in Bank of Victoria v Synott (1885) 11 VLR 598. See also Gotze v Ylitalo [2005] ANZ ConvR 159; (2005) Q ConvR ¶54-616 (especially at [59] and following (per Dutney J)) where the measure of damages in tort was considered where the leased premises had not been properly constructed by the landlord, with particular reference to damages for loss of the value of an asset, namely the tenants’ business, and damages for stress (which were awarded). Generally in relation to damages for ‘mental stress’ and the like, see Wang v Yan (No 3) [2006] VCAT 237 at [8] (Deputy President Macnamara); and Niazi Services Ltd v Van der Loo [2004] 1 WLR 1254 (CA); and as to exemplary damages, see AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 744 (Deputy President Macnamara). Any loss of rent claim must be supported by evidence of causation in this respect (see Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224; (2007) NSW ConvR ¶56-167 (CA) (at [88] (per Hodgson JA)) and must flow from the act or omission of somebody falling within a relevant identified class under the lease (see Alamdo Holdings at [137] and [138] (per Basten JA)). As to the valuation of [page 317] goodwill in the context of a claim arising out of destruction of the leased premises by fire, see Peter A Simon Real Estate Pty Ltd v Ghabash [2004] NSWCA 467. In Marshall v Rubypoint Ltd [1997] 1 EGLR 69 (CA) it was held that a criminal act did not break the chain of causation where that act was

a reasonably foreseeable consequence of a breach of, in this particular case, a landlord’s repair covenant. The distinction between the position with respect to third parties in the context of tortious or statute-based claims and the possible rights and obligations of third parties under repair and other lease covenants should be kept in mind: as to the latter see, for example, Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025 where the head landlord sought to recover the cost of repairs from the subtenant relying on the provisions of covenants in the sublease; and see [15.2]. Where the total damage can be assessed it may be necessary to do an apportionment which, absent evidence or evidence other than of doubtful weight, may be done by estimate: see Bevillesta Pty Ltd v Sovereign Motor Inns Pty Ltd (2002) 11 BPR 20,289; [2003] ANZ ConvR 35 (CA). The issue of apportionment arose in this case in relation to the effect of a landlord’s covenant to use ‘best endeavours’ to keep air conditioning and elevators working where it was found that there were limitations in the expert evidence sought to be relied upon for the purpose of apportionment. In view of the extent to which expert evidence is commonly relied upon in relation to claims that repair covenants have been breached it is useful to set out the comments of Sheller JA (with whom Handley JA and Foster AJA agreed) in this respect: [62] It is here useful to quote two passages from the judgment of Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705. Heydon JA, after a careful review of authority and learned commentary, in para 82 quoted from Callaway JA’s judgment in R v Kotzmann [1999] 2 VR 123 at 135 that it was desirable for juries to be directed that ‘expert evidence is no better than the facts on which it is based’. At para 85 Heydon JA enumerated among matters necessary to the admissibility of expert opinion evidence, the following: [S]o far as the opinion is based on facts ‘observed’ by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on ‘assumed’ or ‘accepted’ facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the

opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert [page 318] knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v The Queen (1999) 197 CLR 414, on ‘a combination of speculation, inference, personal and secondhand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise’ (at para 41). As to apportionment of rent, more generally, see Evans v Athedim (Vic) Pty Ltd (2000) V ConvR 54-613 at [23] and [24] (per Batt JA, with whom Tadgell and Chernov JJA agreed). In relation to the obstacles to a head landlord seeking to enforce repair obligations by way of recovery of the cost of repairs against a subtenant in circumstances where it was not a party to the sublease, see Amsprop Trading Ltd v Harris Distribution Ltd (1997) 47 EG 127 (Ch D). As to other authorities with respect to remedies available for breach of a landlord’s repair covenant, see [10.7].

[page 319]

11 Rent Characteristics — at common law and by agreement [11.1] Rent is a sum issuing out of the land demised payable by the lessee to the lessor for the right to occupy that land and all that went with it and use it for the purpose for which it was demised: Junghenn v Wood (1958) SR (NSW) 327. Characteristics of true rent are that it can be distrained and that it is payable to the lessor and not a third party: Apperly v Federal Commissioner of Land Tax (1914) 17 CLR 535 at 546. The early common law regarded rent as a thing issuing from the land. It was recoverable by the real actions and treated very much like an estate in land. It followed that certainty as to the amount of rent reserved and the time at which it was payable was essential: Parker v Harris (1692) 1 Salk 262; 91 ER 230. It was sufficient if, at the time when payment became due, the rent could be ascertained with certainty: Greater London Council v Connolly [1970] 2 QB 100; Re Essoldo (Bingo) Ltd’s Underlease: Essoldo v Elcresta Ltd (1971) 23 P & CR 1. The converse followed that rent could not be effectually charged if the amount had not been ascertained on the due date for payment. In Blatherwick (Services) Ltd v King [1991] Ch 218 (CA), Nourse LJ said (at 224): ‘… at common law “rent” means a payment reserved on a demise, for non-payment of which a distress is leviable’. In Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 Powell J emphasised that rent is an incident of tenure (at 11,175–6): First, the plaintiff’s claim for the alleged shortfall in rent. One of the

fundamental principles of the law of landlord and tenant is that rent is an incident of tenure, or, to put it in another way, rent issues out of the estate. The consequence of this is that, if no valid term be created, the obligation of the intended tenant under a covenant to pay rent never arises (see, for example, Toler v Slater (1867) 3 QB 42 at 45 per Cockburn CJ; Johnson v Billyard (1890) 11 NSWLR (L) 319 at 321–2 per Darley CJ; Davis v McConochie (1915) 15 SR (NSW) 510 at 513– 14 per Pring J), and, if the term is brought to an end by forfeiture, or a surrender which is accepted, the obligation under the covenant to pay rent is terminated, (see, for example, Davis v McConochie (1915) 15 SR (NSW) 510; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) [page 320] 157 CLR 17; 57 ALR 609 at 39 per Brennan J), while if the tenant is evicted by the landlord, or by a person lawfully claiming by title paramount, the obligation to pay rent accruing after the eviction is suspended so long as the eviction continues. However, as the mere abandonment of the premises by the tenant does not bring the estate to an end, his liability to pay rent continues unless, and until, the landlord re-enters, in which event, re-entry being equivalent to either an acceptance of a surrender, or an eviction, the landlord cannot recover rent subsequently accruing, although, depending on the circumstances, he may be entitled to recover damages for breach of agreement (see, for example, Gray v Owen [1910] 1 KB 622; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; 57 ALR 609. However, in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, Brennan J in considering this question reviewed modern common law thinking on the nature of rent. His Honour said (at 610–12): Such an argument is not supportable if the character of rent is that expressed by Lord Denning MR in C H Bailey Ltd v Memorial Enterprises Ltd [[1974] 1 WLR 728; [1974] 1 All ER 1003] in a passage which has since commanded the assent of the majority of the House of

Lords, his Lordship quoted [[1974] 1 WLR, at p 732; [1974] 1 All ER at p 1007] Holdsworth, A History of English Law, vol VII, 1925, p 262: … in modern law, rent is not conceived of as a thing, but rather as a payment which a tenant is bound by his contract to make to his landlord for the use of the land … and continued — The time and manner of the payment is to be ascertained according to the true construction of the contract, and not by reference to out-dated relics of medieval law. In United Scientific Holdings Ltd v Burnley Borough Council [[1978] AC 904] the majority of the House of Lords assented to this view [[1978] AC, at pp 935, 947, 956, 964]. Rightly, in my opinion. There were two leases under consideration in that case, each of which contained a clause providing for a review of rent. The question was whether those clauses were effective to impose retrospectively a liability upon the respective lessees to pay an increased rent in accordance with the determination made on the review. Lord Fraser of Tullybelton said [[1978] AC, at pp 963–4]: The main argument against retrospection was based upon the proposition that rent must be certain in amount at the time when it is payable, and that a payment which is uncertain because it depends on the result of an arbitration or valuation could not be rent: see In re Essoldo (Bingo) Ltd’s Underlease [(1971) 23 P & CR 1] and Greater London Council v Connolly [[1970] 2 QB 100]. That proposition applies to rent in the strict sense, that is rent which can be recovered by distraining, but the word ‘rent’ in modern usage can and often does mean simply a sum of money which the tenant has contracted to pay to the landlords for the use of the premises let: see Foa’s General Law of Landlord and Tenant, 8th ed, 1957, p 101: ‘prima facie rent is the monetary compensation payable by the tenant in consideration for the grant, however it be described or allocated. It is submitted that nevertheless the landlord’s

common law right to levy distress is confined to rent in its medieval or strict sense’. The question in each case is to [page 321] determine the sense in which the word is used. If it is used not in the strict sense but in the sense merely of the contractual sum due, then it need not be certain at the date on which it becomes payable: C H Bailey Ltd v Memorial Enterprises Ltd [[1974] 1 WLR 728; [1974] 1 All ER 1003]. In the present case where the rents are for large commercial premises I see no reason why the prima facie meaning of rent as contractual rent should not prevail as it seems unlikely that the landlord had in view the use of distraint against the tenant. I would therefore hold that the rents fixed by the valuation will be payable retrospectively from the respective review dates. To hold that a retrospective increase in rent may be validly imposed in accordance with the contract between landlord and tenant involves some modification of the landlord’s right to distrain. Brennan J held in the Booker case the ‘prima facie meaning of rent as contractual rent’ should prevail as the rents were for large commercial premises and it seemed unlikely that the landlord would have contemplated distraining for rent. Distress for rent has been abolished in all states except South Australia and Tasmania, where it is still available in respect of business leases: see [11.3]. In those states where distress for rent has been abolished it would appear now to be difficult to argue that ‘rent’ means anything other than ‘contractual rent’, although this point was not raised by Brennan J: but compare Todburn v Taormina International Pty Ltd at 5 BPR 11,175–6. Where distress for rent is available, it will be necessary in each case to determine the sense in which ‘rent’ is used. However, even if the word is being used in its medieval sense, it may be possible to allow retrospective rent increases with some modification of the lessor’s right to distrain: see Brennan J at 611–12.

The strict meaning of rent at common law, its historical basis, and the development of the more modern concept of rent as a contractual obligation for the use of land was considered by Brooking J in Commissioner of State Revenue (Vic) v Price Brent Services Pty Ltd (1994) 94 ATC 4672 (FC, SC, Vic) at 4675: In recent years there has been a reluctance to attribute to the expression ‘rent’, when used in a lease or a statute, the strict meaning of that term at common law, a meaning reflecting the medieval notion of rent as a thing issuing from the land. Until comparatively recently it was still often said that ‘true’ rent issues out of the land demised and that the primary liability to pay it arises from privity of estate and not from covenant (Commissioner of Stamp Duties (NSW) v Brasch (1937) 57 CLR 69 at p 82; Loder v Tokoly (1952) SR (NSW) 283 at p 285; Junghenn v Wood (1958) SR (NSW) 327 at p 330. Rent was treated by the early common law as a thing — a tenement — just like the land (Holdsworth, History of English Law, Vol 3, p 151; Holdsworth, Historical Introduction to the Land Law, p 97). Rents were regarded as so far a part of the realty as to be capable of possession and disseisin, and they could be recovered like land by a real action (Holmes, The Common Law, pp 240 and 388–90). The land was bound to pay the rent, which ‘issued out of’ the land and was secured on it. By ancient remedies of the common law, the landlord could seize the land itself for rent in arrear and hold it until payment was made. These ancient processes were replaced by distress, whereby, instead [page 322] of seizing the land, the lord seized all movables on the land and held them until he received payment: see the annotation in 62 ALR 1107. It is a characteristic of true rent that it can be distrained for (Apperly v Federal Commissioner of Land Tax (1914) 17 CLR 535 at p 546). Distress for rent was abolished by s 18 of the Landlord and Tenant (Amendment) Act 1948 (No 5291); see now s 12 of the Landlord and Tenant Act 1958.

In the view of the early law, the landlord who demanded rent that was in arrear was not seeking to enforce a contract, he was seeking to recover a thing. The rent which was ‘reserved’ when the tenancy was created was thought of as something which remained to the lessor after he had made the lease (Pollock and Maitland, The History of English Law Before the Time of Edward I, pp 127, 129). As already mentioned, in recent years the courts have shown reluctance to apply the medieval notion of rent as a thing issuing from the land to the expression ‘rent’ when used in a lease or statute, preferring the more modern conception that rent is a contractual obligation to pay for the use of the land. The new approach can be traced in England from the judgment of Evershed LJ in Property Holding Co Ltd v Clark [1948] KB 630 at pp 648–649, through Sidney Trading Co Ltd v Finsbury Corporation [1952] 1 TLR 512 at p 515 per Lord Goddard, CJ, through C H Bailey Ltd v Memorial Enterprises Ltd [1974] 1 WLR 728 at p 732 per Lord Denning MR and through what was said in the House of Lords in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at p 935 per Lord Diplock, at p 940 per Viscount Dilhorne, at p 947 per Lord Simon of Glaisdale, at p 956 per Lord Salmon and at pp 963–964 per Lord Fraser of Tullybelton. Finally in England reference should be made to T & E Homes Ltd v Robinson [1979] 1 WLR 452 at pp 456– 457 per Orr LJ, and at pp 458–459 per Templeman LJ. In Australia reference should be made to the judgment of Brennan, J, in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at pp 610–612, Yanchep Sun City Pty Ltd v Commr of State Taxation (WA) 84 ATC 4761 at p 4766; (1984) 15 ATR 1165 at p 1170 and Commr of Stamp Duties (NSW) v J V (Crows Nest) Pty Ltd 86 ATC 4740 at p 4742; (1987) 7 NSWLR 529 at 531–532 per Mahoney JA and at ATC p 4747; CLR 538–539 per McHugh JA (with whose judgment Samuels JA agreed). Rent is the recompense paid by the lessee to the lessor for the exclusive possession of corporeal hereditaments; a fluctuating royalty based on output, being capable of ascertainment by calculation so as to become certain, is rent: Perpetual Trustee Co Ltd v Pacific Coal Co Pty Ltd (1955) 55 SR (NSW) 459.

Rent need not consist of the payment of money. It may consist in the performance of services or the render of chattels: Montague v Browning [1954] 1 WLR 1039; see also Weston v Ray [1946] VLR 373. Rent may be a percentage of the gross receipts of a business conducted on the premises: Aarons v Lewis (1877) 3 VLR (E) 234. See further Hughes v Waite [1957] 1 WLR 713 where it was held that lump sums calculated by reference to so many weeks’ rent or so many years’ rent were not rent and fell within the definition of a fine in the English Law of Property Act 1925 s 205(1)(xxiii). The only necessary characteristic of any tenancy is that it should give the right to exclusive possession to the tenant for an ascertainable period of time; reservation of rent is not essential: Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323; Bagust v Rose (1963) 80 WN (NSW) 604 at 607; and NZI Insurance Australia Ltd v Baryzcha (2003) 85 SASR 497 (FC); [page 323] but subject to the terms of any initial agreement for lease which the parties have made which indicates, expressly or impliedly that a rental covenant is to be an essential term of the subsequent lease, see Woodford Nominees Pty Ltd v Masjakan Medical Pty Ltd [1998] ANZ ConvR 254 (CA(Qld)); and see [1.3], [1.12] and [4.8]. The parties sometimes stipulate for a nominal rent in the mistaken belief that reservation of rent is essential to the creation of a tenancy. For an example of a peppercorn rent, see R v Registrar of Titles; Ex parte Commonwealth (1915) 20 CLR 379. Rack rent is a rent of the full value of the holding, or near it (2 BI Com 43; Re Sawyer & Withall [1919] 2 Ch 333). Rack rent is to be contrasted with ground rent. The latter expression is sometimes loosely used. The context in which it appears may materially affect its meaning: Stewart v Alliston (1815) 1 Mer 26; 35 ER 587. Ground rent is the rent at which land is let for the purpose of improvement by building. It carries with it the reversionary interest in buildings erected after the date of the lease. ‘The term ground rent is well understood and has a definite meaning: it is the sum paid by the owner or builder of houses for the use of land to build on, and is therefore much under what it lets for when it has been built on’: Bartlett v Salmon (1855) 43 ER 1142 at 1145. More recently, in Australian Maritime

Safety Authority v Quirk (1998) NSW ConvR ¶55-858, Bryson J (at 56,715) considered the meaning of the term ground rent, and adopted the statement of Lord Chancellor Cranworth in Bartlett v Salmon (1855) 6 De GM&G 33; 43 ER 1142 at 1145 that: ‘The term ground rent is well understood and has a definite meaning: it is the sum paid by the owner or builder of houses for the use of land to build on, and is therefore much under what it lets for when it has been built on’. Bryson J continued, saying: ‘This is a good general indication of what is involved in a ground rent, although it cannot be applied directly where the houses had already been built at the time of the letting’. Contributions by a shareholder to a home unit company, the shareholder having no estate in the land, are not rent: Bagust v Rose (1963) 80 WN (NSW) 604. Rent payable by the lessee may include rates and statutory and other charges that may be levied with respect to the demised land. Whether payment of rates was to be considered as equivalent to rent was discussed in Langmore v Vines [1917] VLR 595; but it was found that payment of rates was not intended to be equivalent to rent in the circumstances of the case: at 601. The question whether rates or charges are to be treated as part of the rent is dependent on the intention of the parties as expressed in the lease provisions properly construed. This is clear from the authorities to which reference is made and, particularly, from Escalus Properties Ltd v Robinson [1996] QB 231 (CA) where it was said (at 244 per Nourse LJ) that there is no reason in law or public policy why the parties to a lease may not include a provision in the lease to treat as rent something which is not rent. In that case it was held that service charges payable with respect to the premises were under the provisions of some of the leases considered to be taken as additional rent — that is, to have all the attributes of rent. [page 324] This question was most usefully considered by Brooking J in Commissioner of State Revenue (Vic) v Price Brent Services Pty Ltd (at 4,676–7): Whether the payments for outgoings are rent is a question of

construction of the lease. In every case it is a question of construction whether a sum payable under an instrument is rent (Hutchison v Ripeka te Peehi [1919] NZLR 373 at p 380; Scott v Commr of Stamp Duties [1939] NZLR 293 at p 311). Have the parties by their lease made the payments rent? There are a number of rules — call them technical rules, if you like — whereby certain payments are incapable of being payments of rent. For example, except perhaps in the case of a lease granted by the Crown, rent must be payable to the lessor, not to a third party (Apperly v Federal Commr of Land Tax (1914) 17 CLR 535 at p 546). There is no suggestion that the amounts payable for outgoings in this case fall foul of any rule of law whereby they are incapable of being made rent by the parties to the lease. It has been said that ‘rent reserved’ includes everything, however called, which is really rent in the true sense (Apperly’s case at 546). But the description chosen by the parties is not to be ignored in considering whether they have made rent a payment capable in law of being so made. In Duke of Westminster v Store Properties Ltd [1944] Ch 129 at p 132 Bennett J seems to have thought that the description given to the payment in the lease was irrelevant. I do not, with respect, agree. No words can make a rent of what is not in its nature a rent, yet when the question is whether a payment is to be construed as intended to be a rent its being called so by the parties ought to be considered as evidence of their intention (Evans v Robins (1863) 33 LJ Ex 68 at p 73). The view that the description of a sum in the lease as rent, or the failure to describe it in the lease as rent, while not conclusive, is relevant, is supported by what was said in Cox v Harper [1910] 1 Ch 480 at p 487 per Cozens-Hardy MR and at p 488 per Fletcher Moulton, LJ. Similarly in Samuel v Salmon & Gluckstein Ltd [1946] Ch 8 at p 13 Uthwatt J said that the label attached by the parties might assist in the determination of the question but was not decisive; this passage was cited by Cohen, LJ in Regor Estates Ltd v Wright [1951] 1 KB 689 at pp 698–9. Again in Loder v Tokoly (1952) SR (NSW) 283 at p 285 reliance was placed on the description by the parties of a payment as rent; compare Junghenn v Wood (1958) SR (NSW) 327 at p 332 per Owen J.

An interesting example of the consideration of what payments constituted ‘rent’ for stamp duty purposes is the decision of the Court of Appeal in British Electrical Traction Co v Inland Revenue Commissioners [1902] 1 KB 441. Clause 3 of a lease of tramways to a traction company provided, it seems (the report is not clear), for payment of a rent of £3,250 per annum. By clause 4, the lessee was in addition to pay to the lessor the sum of £100 per annum per mile of road along which the tramways were laid, in lieu of repairing the tramways, with a minimum annual payment of £900. Clause 5 reserved a further uncertain sum as rent in certain contingencies. Clause 9 described the rent of £3,250 and the £900 as ‘hereinbefore reserved’. By clause 27, the lessee was to purchase from the lessor all electrical energy required for the purposes of the tramways at a rate (fixed by clause 30) of two pence per Board of Trade unit, with a minimum payment of £4,000 per annum. Clause 44 gave the lessor power to distrain for ‘the said rents or other moneys whatsoever (except the payments … for … electrical energy hereby made payable)’. The Court of Appeal held that not only the £3,250 but also the £900 was rent for the purposes of the Stamps Act 1891 but that the £4,000 was not rent. At p 450 Collins, MR observed with regard to the £900 that clause 4 was in substance a stipulation for additional rent payable to the lessor by reason of the lessor’s [page 325] undertaking to keep the tramways in repair; it was to be noted that clause 44 made the £900 recoverable by distress. Stirling LJ at p 452, in holding the £900 to be rent, said that really the only objection to its being so treated was that the lease did not expressly denominate it as rent. The first mention of it was in clause 4, between clauses 3 and 5, which dealt with two other sums, both described as rent; the payment was provided for in the place where reservations in the lease were found. Clause 9 described the £900 as reserved. Clause 44 conferred a power of distress in respect of it. The £900 was an additional

minimum rent reserved in order to provide for the cost to the lessor of repairing the tramways. Mathew LJ at p 455 agreed that the £900 was rent. An early decision of some interest is Wilson v Smith (1844) 12 M & W 401; 152 ER 1253. A lease at a rent of £50 a year stipulated that the lessor should insure the premises for £1,000 and that the insurance premiums ‘shall be added to the aforesaid rent of £50, and became due and payable in like manner as the said rent’. The question was whether the lease had been sufficiently stamped. It bore a stamp of 30 shillings, which was the appropriate duty where the yearly rent was not less than £20 but less than £100. It was held that the party objecting to the instrument as insufficiently stamped (the defendant lessee) bore the onus of proving that the stamp was insufficient and that the lessee had failed to prove that the premium, added to the £50, amounted to at least £100. I turn now to consider the present lease. In my opinion its terms are such as to make the lessee’s proportion of outgoings ‘rent’ even within the strict common law meaning of that term. The other members of the court, Ormiston and Nathan JJ, agreed. Ormiston J also specifically commented that this general position is subject to the inability of the parties to a lease to characterise as ‘rent’ something which cannot be so characterised (at 4,680). As to whether payment of rates by the lessee direct to the rating authority constitutes rent, see the following cases, which were referred to by Brooking J in this case (at 4,679–90): We were referred to a number of decisions in which there has been considered the question whether payments of rates by a lessee direct to the rating authority may constitute payment of rent: Apperly v Federal Commr of Land Tax (1914) 17 CLR 535; Langmore v Vines [1917] VLR 595 at p 599 per Hodges, J and at p 601 per Hood, J; Yanchep Sun City Pty Ltd v Commr of State Taxation (WA) 84 ATC 4761; (1984) 15 ATR 1165. One could add a reference to four Canadian decisions: Davis v McKinnon (1871) UCQB 564; Finch v Gilvey (1889) 16 OAR 484; East v Clarke (1915) 33 OLR 624; 23 DLR 74; Boone v Martin (1920) 47 OLR 205; 53 DLR 25. In addition, decisions from the

United States may be noted: see 49 American Jurisprudence 2d, sec 733; annotations to the decision of the Circuit Court of Appeals, Fourth Circuit, in Irving Trust Co v Burke 65 F (2d) 730 in 88 ALR 884; annotations to Farmers & Merchants National Bank of Bridgeton v Boyman 382 A 2d 437 in 99 ALR 3d 1100. But none of these decisions assists on the construction of the present lease. See Blatherwick (Services) Ltd v King, above; and as to the meaning of rates, taxes and various service charges, see [7.16]. Often the question arises from which date must the lessee pay any increase in the rates so charged. In Westinghouse Electric Australasia Ltd v Barina Properties Pty Ltd [1975] [page 326] 2 NSWLR 652, the lease provided that the term was to commence on 29 November 1971. Pursuant to the lease the lessee undertook to pay the amount of any ‘increase’ in the rates charged over and above those ‘assessed as at the date of these presents’. It was held that the words ‘the date of these presents’ was the date of the execution of the lease and not the date of the commencement of the term. The rent payable may be the sum of a number of defined components, which should be defined with care. For an example of the difficulties in construction that may be caused by complex provisions of this sort, see SYNBA Investments Pty Ltd v Brisbane City Council (1979) 50 LGRA 208; and see No Worries Management v Dolman [2004] QSC 153, which raised issues in relation to the burden of goods and services tax. Royalties reserved upon the grant of a lease and payable by the lessee to the lessor in respect of materials extracted from the leased land are, on the authorities, properly to be regarded as rent: R v Westbrook; R v Everist (1847) 10 QB 178 at 203–5; 116 ER 69 at 79–80; Coal Commission v Earl Fitzwilliam’s Royalties Co [1942] Ch 365; Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 at 9571; see also Perpetual Trustee Co (Ltd) v Pacific Coal Co Pty Ltd (1955) 93 CLR 479 at 488. In Boldmark v Cohen [1986] 1 EGLR 47 (CA) the

lessees covenanted to contribute towards the lessor’s yearly costs, expenses and outgoings. It was held that no principle dictated that a tenant should pay the landlord’s interest on borrowings and that the tenant was not liable to do so in the absence of a specific provision. Where rent is calculated by reference to turnover, a term may be implied that the tenant will use its best endeavours to obtain the best receipts reasonably obtainable: see Kogarah Private Hospital Pty Ltd v Hoteliers (NSW) Pty Ltd (SC(NSW), Brownie J, 28 October 1987, unreported). A ‘reasonable rent for the demised premises’ means that rent which is reasonable for the premises as they are, taking into account improvements made by the tenant: Ponsford v HMS Aerosols Ltd [1979] AC 63, and see Cuff v J & F Stone Property Co Ltd [1979] AC 87 which was approved by the House of Lords in this decision; also Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 and Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16, discussed in [11.4].

Rent control legislation [11.2] Decisions dealing with the meaning of ‘rent’ for the purposes of rent control legislation remain of interest, despite the lack of application to commercial tenancies in most jurisdictions. An example of this type of legislation was provided by the former Victorian provisions. By s 43(1) of the Landlord and Tenant Act 1958 (Vic) (since repealed by the Australian Consumer Law and Fair Trading Act 2012 (Vic)), it was provided as follows: ‘Rent’ means the actual rent payable under a lease, and includes: — [page 327] (a)

the value to the lessor of any covenants, conditions or other provisions of, or relating to, the lease to be performed by the lessee, other than covenants, conditions and provisions usually entered into by a lessee; and (b) any rates or taxes payable by a lessee in respect of any premises,

other than excess water rates — and where, in any lease — it is provided that a reduced amount, as rent, shall be accepted by the lessor upon any condition to be performed by the lessee, that reduced amount shall be deemed to be the rent payable under the lease; any rebate, discount, allowance or other reduction is provided for, the amount payable after each such reduction is made shall be deemed to be the rent payable under the lease. A monetary consideration payable by a lessee for a right exercisable by him or her for his or her benefit is not ‘rent’ within the definition in the former s 43(1) and, accordingly, periodical payments for an option to purchase under an agreement by which the lessee enjoys rent-free use and occupation were not rent: Neubauer v Scott (1967) 10 FLR 72. A weekly amount payable by way of ‘additional rent’ as the tenant’s contribution towards the expenses of cleaning is rent: Woods & Co Ltd v City and West End Properties (1921) 23 TLR 98. Premises were let at £1 3s 6d a week and provision was made for payment of a weekly premium of 11s 6d. It was held that the so-called premium was in reality rent: Rush v Matthews [1926] KB 492. As to whether a sum of money is to be regarded as rent or a premium, see also Samrose Properties Ltd v Gibbard [1958] 1 WLR 235; Grace Rymer Investments Ltd v Waite [1958] Ch 314. Samrose Properties Ltd v Gibbard was applied in Nixon v Doney [1960] NSWR 2; 77 WN (NSW) 369. The court in that case drew the distinction between the concepts of ‘rent’ on the one hand, and ‘bonus’ and ‘premium’ on the other. These concepts were also discussed in Ex parte Lathouras, Re Vendaros [1964–5] NSWR 254. A royalty may be a form of rent: Perpetual Trustee Co (Ltd) v Pacific Coal Co Pty Ltd (1955) 93 CLR 479. The court is concerned with the nature of the payment, not with what the parties have chosen to call it: Westminster (Duke) v Store Properties Ltd [1944] Ch 129. ‘We are not bound by the vocabulary the parties have chosen to use’: Regor Estate Ltd v Wright [1951] 1 KB 689 at 698 per Cohen LJ. See also Nixon v Doney. But if the parties describe the payments as rent, then prima facie that word should be given its ordinary meaning: Loder v Tokoly (1952) 69 WN (NSW) 264. If the parties to a lease provide for the payment of a particular sum as rent, and there is nothing which would justify the conclusion that the description of that sum as rent is a sham, the word ‘rent’ which they have used

should be given its ordinary meaning, viz a sum issuing out of the land demised payable by the lessee to the lessor for the right to occupy that land and all that went with it and use it for the purpose for which it was demised: Junghenn v Wood (1958) 75 WN (NSW) 353. In Montague v Browning [1954] 1 WLR 1039 Denning LJ expressed the opinion that where rent is not payable in money, but in kind, so long as the parties have by agreement quantified the value in terms of money, the sum so quantified is the rent [page 328] of the house, within the meaning of the Rent Restriction Acts. See too, Australian Provincial Assurance Assoc Ltd v Roddy (1956) 95 CLR 478; [1956] ALR 694. It will be noted that ‘rent’ is defined in s 43(1) as including the value to the lessor of any covenants, conditions or other provisions of, or relating to, the lease to be performed by the lessee, other than ‘covenants, conditions and provisions usually entered into by a lessee’. Compare Allen v Belmore Property Co Pty Ltd (1966) 114 CLR 454; [1966] ALR 646; Aroney v Heily [1968] 3 NSWR 619; 88 WN (Pt 2) (NSW) 41; McGirr v Warman [1968] 3 NSWR 730. In Ford v Centenary Investments Pty Ltd [1957] VR 288 a sum of money described as a bonus was held to be rent. Legislation in relation to retail, or business, tenancies is discussed in Chapters 24–27.

Payment of rent [11.3] If there is an express covenant to pay rent and no place is specified for payment, the lessee must seek out the lessor and pay the rent to him or her. If there is no express covenant, the lessee must be prepared to pay the rent on the demised premises: Harrison v Petkovic [1975] VR 79 at 83. In addition to this requirement, the law with respect to the payment of rent remains quite complex, as the judgment of Young J in Reid v Hipkiss (2001) 10 BPR 19,305 indicates:

[14] Before dealing with these points it is necessary to go into the background of the law of rent. As has been pointed out many times in the authorities, the law still retains a number of medieval aspects which have never been removed. Accordingly, rent is due in the morning of the day appointed for payment, but is not in arrear until after midnight: Dibble v Bowater (1853) 2 E & B 564. But the reason for this is probably that rent was to be made payable on quarter days which were High Feast Days and that arrangement prevented the sacred character of the day being broken. Payment before the day was considered to be a voluntary payment by the tenant and was no satisfaction at law of the covenant to pay rent, which required the tenant to actually pay the rent just before sunset on the day in question: Clun’s case (1613) 10 Co Rep 127b; 77 ER 1117; Cromwel v Andrews (1583) Cro Eliz 15; 78 ER 281. These authorities are the basis for the Full Court’s decision in Ex Parte Alcock; Re McConnell (1955) 55 SR (NSW) 259, 262. In that case the tenant had been paying rent in excess of the fair rent. When this was realised, the tenant stopped paying rent until the overplus had been made good. However, Roper CJ in Eq said that this was quite wrong, that the obligation of the tenant was to pay ‘the rent’ each and every month and the mere fact that he was owed money for previous months by the landlord was no defence to his breach of not paying the rent for that particular month. [15] The covenant in the standard form of lease is not to pay rent but to pay ‘the rent’. This means that on the day in question the tenant must pay the full amount no matter what offsetting claims there may be, no matter what he may have paid earlier on account of rent, or what money the landlord may owe the tenant. There are some exceptions by statute, such as where, for instance, rates have been demanded by the council from the tenant and the tenant has paid them. By statute, they can be deducted from the rent. But unless there is some statutory authority, that is the situation. [page 329]

[16] Accordingly, the mere fact that there is an offsetting by a tenant against a landlord does not excuse the tenant from tendering the rent on the proper day: Ford v Centenary Investments Pty Ltd [1957] VR 288, 292. In Harrison v Petkovic it was held that a payment made before the day on which the rent is due is a payment not of rent but of a sum in gross. Subject to the terms of the lease, rent payments may be made by personal cheque, but only as long as the landlord does not object: see Tannous v Cipolla Bros Holdings Pty Ltd (2001) 10 BPR 18,563; [2001] ANZ ConvR 430; (2002) NSW ConvR ¶56-001, where it was held that payment by personal cheque, though previously acceptable to the landlord, was not valid following notice of objection to this means of payment by letter from the landlord’s solicitors as a result of previously dishonoured personal cheques by way of rental payments. The law with respect to payment by personal cheque was considered by Barrett J in that case, and applied with respect to rental payments: [16] The question whether delivery of a personal cheque constitutes discharge of a money obligation was dealt with as follows by Mason J (with whom Aickin J agreed) in George v Cluning (1979) 28 ALR 57: The practice of giving and accepting personal cheques in payment of debts and liabilities is now so widespread that there is a general expectation on the part of persons making payments that a personal cheque, given in payment of a debt or liability, will be accepted unless the payee objects before or at the time of receipt that the cheque does not constitute legal tender. To my mind the law was correctly stated in two Canadian decisions — Wexelman v Dale (1917) 35 DLR 557 and Laidlaw v Rehill (1943) 4 DLR 429 — where it was decided that a personal cheque, though not legal tender, was a sufficient payment if not objected to on that account. Barwick CJ said: Further, the cheque itself, unless the agreement is read as demanding legal tender, is conditional payment. When

honoured it is payment as from the date of receipt of the cheque. [17] In Re Parker (dec’d) (1985) 79 FLR 338, Nygh J professed himself ‘more than happy to follow the remarks of Mason J as indicating the law in Australia today’. In Josland v Mullaly Properties Pty Ltd (1993) 6 BPR 13285, Young J accepted that delivery of a personal cheque may well be a legally acceptable means of paying a deposit. The same Judge said in Deputy Cmr of Taxation v Barroleg Pty Ltd (1997) 25 ACSR 167 at 172: The second matter is that although the company purportedly had [still paid] the full amount demanded, the payment was by cheque and not the company’s cheque. However, prima facie this would have been compliance with the demand. As the letter returning the cheque never took any point that the cheque was insufficient tender as a matter of law, any possible point as to the formality of the tender must be taken to be waived: see George v Cluning (1979) 28 ALR 57. Thus, had this matter been relevant, I would have held that there had been compliance with the statutory demand. By statute, rents are considered as accruing from day to day and apportionable in respect of time accordingly: Conveyancing Act 1919 (NSW) s 144; Property Law Act [page 330] 1974 (Qld) s 232; Law of Property Act 1936 (SA) s 64; Apportionment Act 1871 (Tas) s 2; Supreme Court Act 1986 (Vic) ss 53–56; Property Law Act 1969 (WA) s 131; and as to the common law position, see Clun’s case (1613) 10 Co Rep 1276; 77 ER 1117. The statutory provisions concerning apportionment have been held not to apply to rent which is payable in advance: Ellis v Rowbotham [1900] 1 QB 740; [1900–3] All ER Rep 299; Hildebrand v Lewis [1941] 2 KB 135; 2 All ER 584; Carmody v Delehunt (1984) 1 NSWLR 667; and Ocelota Pty Ltd v Water Administration Ministerial

Corporation (2000) 9 BPR 17,527 (Hodgson CJ in Eq). Where the landlord assigns the reversion expectant on the determination of the lease, the tenant may safely continue to pay rent to the assignor until he or she is given notice of the assignment: s 151 of the Property Law Act 1958 (Vic) (see Conveyancing Act 1919 (NSW) s 125); see [1.14]. The lessee remains liable on the covenant to pay rent notwithstanding an assignment of the term: Auriol v Mills (1790) 4 TR 94; 100 ER 912. Thus, where the liquidator of a company or the trustee in bankruptcy of an individual disclaims the lease in question, the original lessee will remain liable to the lessor for the rent throughout the term: Warnford Investments v Duckworth [1978] 2 WLR 741. It has been said that if the lessor is in breach of his or her covenant to repair, the lessee must still pay the rent: Chatfield v Elmstone Resthouse Ltd [1975] 2 NZLR 269 at 275. Whether this broad proposition is correct is considered in [7.4]. Where rent is to be paid on the ‘first day of each week’, in the absence of a contrary intention the rent is computed from the first day of each week of tenancy and not from the Sunday of each week: Love v Chryssoulis (1977) 16 ACTR 1. Rent may become payable from a date which has passed, notwithstanding that the sum due was not ascertained at that date: C H Bailey Ltd v Memorial Enterprises Ltd [1974] 1 WLR 728; and 33 Bank Street Nominees Pty Ltd v Citipower Pty Ltd (SC(Vic), Beach J, 16 June 1997, unreported). Consequently, in the case where the rent review clause is duly implemented by the landlord after the commencement of the period and during which a higher rent is to be paid by the tenant, the landlord may recover the higher rent retrospectively to the beginning of such a period: United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; and see [11.4]. Where premises are leased to A, who operates a business through a company, the lessor may insist that the rent may be paid by A and can properly refuse tender from the company unless it expressly tenders the rent on A’s behalf: Richards v De Freitas (1974) 29 P & CR 1. It is well settled that, in the event of a lease being determined prior to the expiry of the term, the covenant to pay rent for the unexpired portion of the term ceases to bind the lessee, thus the lessee commits no breach of covenant by not paying the rent for the remainder of the term: Jones v Carter (1846) 15 M & W 718 at 726; 153 ER 1040 at 1043; and see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 609 at 625; but the tenant’s guarantors may be liable under the provisions of the lease with respect to the whole of the rent payable during the entirety of the

lease term, not the lease term foreshortened by repudiatory conduct: see Lewy v Moss Nominees Pty Ltd [1997] ANZ ConvR 239 (CA(NSW)); (and see [16.26]–[16.34]; and see [11.22]). [page 331] A lessee is under no obligation to continue to pay rent after the lessor’s title to the property has determined: National Westminster Bank v Hart [1983] QB 773. The Court of Appeal also held in this decision that a lessee is not estopped in these circumstances unless rent has been paid with knowledge, or notice, of the true state of the lessor’s title and that there is no requirement that a third party should have claimed the title before the rent is withheld by the lessee. As to a lessee’s right to set off against rent for breach of agreement, see British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1980] QB 137; Gibb Australia Pty Ltd v Cremor Pty Ltd (1992) 108 FLR 129 (SC(ACT) (FC)); and Liangis Investments Pty Ltd v Dalypyn Pty Ltd (1994) 117 FLR 28; [1994] ANZ ConvR 637 (SC(ACT)); and the other cases, discussed at [7.4]. Pre-contractual assurances inconsistent with the rental covenants of the lease may give rise to an equitable estoppel where there is evidence of reliance upon these assurances by the recipient to that person’s detriment: see Liangis Investments Pty Ltd v Dalypyn Pty Ltd; and see, more generally in relation to equitable estoppel, [1.15]. Overpayments of rent may be recoverable under the terms of the lease or according to the principles established in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; and see Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349; [1998] 4 All ER 513 (HL); and Nurdin & Peacock plc v DB Ramsden & Co Ltd [1999] 1 All ER 941; [1999] 1 WLR 1249 (Ch). See also Ocelota Pty Ltd v Water Administration Ministerial Corporation where rent already paid, plus interest, was sought to be recovered for a period after termination of the lease (see above, with respect to Conveyancing Act 1919 (NSW) s 144) and it was suggested that a provision in a lease which purports to entitle the landlord to retain the whole of the rent payable for a substantial period would, where the lease is terminated, amount to a penalty so that the landlord would only be entitled to recover its actual

damages for breach, referring to O’Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359. The recoverability of rent under the principles enunciated in David Securities may be affected to the extent that overpayments of rent may be regarded as voluntary payments and, consequently, not payments induced by any mistake: see Edex International Holdings Pty Ltd v Marmalade Films Pty Ltd (2003) 56 NSWLR 63; [2001] ANZ ConvR 358; (2004) NSW ConvR ¶56-081 (CA) at [23]–[30] where Hodgson JA (with whom Beazley and Heydon JJA agreed) adverted to the issue but did not find it necessary to express a final view on the correct approach; and see Harrison v Petkovic and Reid v Hipkiss with respect to the characterisation of prepayments of rent as being voluntary payments; and see Callaghan v Merivale CBD Pty Ltd [2006] ANZ ConvR 114; (2006) NSW ConvR ¶56-155 where it was held that the overpayments of rent were the result of a mistake by the tenant induced by an innocent misrepresentation made on behalf of the landlord and so were recoverable. In Edex International Holdings Pty Ltd v Marmalade Films Pty Ltd it was held, with respect to rent abatement provisions of the lease, that there could be no recovery of rent which had been paid in full for which liability had actually arisen unless there [page 332] had been a previous claim for abatement and the rent had been paid under protest or provisionally pending resolution of the claim. Nevertheless it was also held that an abatement could be claimed where rent and outgoings had not been paid even where no notice of claim of abatement had been given prior to the commencement of the period for which the rent and outgoings were due. The overpayment may not provide a true equitable set-off to the tenant against a claim by the landlord for subsequent rent: Ory and Ory v Betamore Pty Ltd (in liq) (1993) 60 SASR 393 (FC); and see [7.4]. As with all lease covenants the rental covenant may be varied by agreement between the parties but where the freehold of the leased premises is mortgaged issues may arise as to the extent to which the variation is binding upon subsequent or other parties: see, for example, Figgins Holdings Pty Ltd v SEAA Enterprises Pty Ltd (1999) 196 CLR 245; and see [5.16] and [7.4].

In relation to a claim for abatement of rent under a rental abatement clause of the lease it was held that the tenant had to establish that the leased premises were rendered at least partially unfit for occupation by the tenant in the conduct of its business as a result of damage by a nominated cause under the clause, such as storm or flood in the particular case: see Hirlmont Pty Ltd v Dybka [1999] ANZ ConvR 405; (1998) Q ConvR ¶54-517 (CA). And see Big Toys Pty Ltd v Bartlett [2001] NSWSC 625 where the tenant’s claim for abatement of rent was unsuccessful due to a failure to prove that the leased premises were rendered substantially unfit for use and occupation by the tenant so as to deprive him of a substantial use of the premises. Subject to the terms of the rental abatement clause, where the rent has been paid in full a tenant cannot claim a refund under such a provision unless the rent had been paid under protest or provisionally pending resolution of the claim: see Edex International Holdings Pty Ltd v Marmalade Films Pty Ltd (2003) 56 NSWLR 63 (CA); [2003] ANZ ConvR 358; (2004) NSW ConvR ¶56-081. This case also indicates that a claim for abatement can be made with respect to rent and outgoings that have not been paid even where no notice of the abatement claim was given prior to the period for which the rent and outgoings were due. Distress for rent has been abolished in all states except South Australia and Tasmania, where it is still available in respect of business leases: Landlord and Tenant Ordinance 1969 (ACT) s 40; Landlord and Tenant Amendment (Distress Abolition) Act 1930 (NSW); Property Law Act 1974 (Qld) s 103; Landlord and Tenant Act 1958 (Vic) s 12 (since repealed; see [11.26]); Distress for Rent Abolition Act 1936 (WA); and see Landlord and Tenant Act 1936 (SA) Pt II; Residential Tenancies Act 1978 (SA); Landlord and Tenant Act 1935 (Tas) Pt V; Residential Tenancy Act 1997 (Tas) s 24. In a relatively recent Tasmanian case Underwood J considered a claim of unlawful, excessive or irregular distress and in so doing considered the requirements for lawful distress: see Matthias v Scott [2000] TASSC 88 at [7], [8] and [20]–[24]. [page 333]

Rent review clauses

[11.4] Most long-term leases of business premises contain provisions whereby the rent payable by the tenant is to be reviewed at certain points in time during the period of the term. In the most general terms the usual purpose of rent review clauses in leases is to endeavour, as far as possible, to keep the initially agreed rent at the same real value throughout the term of the lease having regard to the effect of inflation and changing economic conditions to the extent that they affect the relevant rental market. This does not mean that in some cases the parties may not have agreed to ‘real’ increases of rent during the lease term — as is often the case where a landlord in a new development will seek to establish new tenancies and businesses and for this purpose provide low rents initially, both as an incentive and, in some cases, financial assistance to tenants establishing new businesses. In many cases, of course, the rental provisions are a combination of these provisions containing lease incentives by way of low rent, rent concessions, delays in the operation of turnover rent provisions (in terms of time or turnover levels, or a combination of both) followed by what might be termed more traditional and ongoing rent review provisions which are merely designed to maintain, in real terms, the ‘full commercial rent’ level once it is reached as the initial ‘concessions’ cease to apply. It may, however, be clear from the lease terms that the intention is that the rent review clause operate solely as an upwards ‘ratchet’ provision: see, for example, Standard Life Assurance v Unipath Ltd [1997] 38 EG 152 (CA). In considering rent review clauses it is helpful to consider a number of judicial statements in relation to the purpose of these more traditional and ongoing rent review provisions. The purpose of rent review clauses was explored in the judgment of Windeyer J in Quirk v Commonwealth (1995) 6 BPR 13,989 (at 13,993): … [Basingstoke Deane Borough Council v Host Group Ltd [1988] 1 All ER 824] was about whether the terms of the actual lease in that case, including a tied house arrangement, were to be taken into account in determining the rent, the court concluding they were. The judgment of the court was delivered by Nicholls LJ and at page 828 he said: That purpose has been referred to in several recent cases, and is not in doubt. Sir Nicolas Browne-Wilkinson V-C expressed it

in these terms in British Gas Corp v Universities Superannuation Scheme Ltd [1986] 1 All ER 978 at 980–981, [1986] 1 WLR 398 at 401: There is really no dispute that the general purpose of a provision for rent review is to enable the landlord to obtain from time to time the market rental which the premises would command if let on the same terms on the open market at the review dates. The purpose is to reflect the changes in the value of money and real increases in the value of the property during a long term. To the same effect Dillon LJ said in Equity and Las Life Assurance Society plc v Bodfield Ltd [1987] 1 EGLR 124 at 125: [page 334] There is no doubt that the general object of a rent review clause, which provides that the rent cannot be reduced on a review, is to provide the landlord with some measure of relief where, by increases in property values or falls in the real value of money in an inflationary period, a fixed rent has become out of date and unduly favourable to the tenant. The exact measurement of relief depends on the true construction of the particular rent review clause. The means by which rent review clauses afford landlords relief in respect of increases in property values or falls in the value of money is by providing, normally, for a valuer, in default of agreement, to assess the up-to-date rent for the demised premises at successive review dates. In making that assessment the valuer will be achieving the intended purpose of keeping the rent in line with current property values having regard to the current value of money if, but only if, he assesses

the up-to-date rent on the same terms (other than as to quantum of rent) as the terms still subsisting between the parties under the actual, existing lease. If he departs from those terms, and assesses the up-to-date rent on the footing of terms materially less onerous to the tenant than those in the actual, existing lease, the rental at which he arrives will reflect, in addition to the rental increases attributable to a rise in property values or a fall in the value of money, an additional element, viz the increased rental attributable to the fact that he is calculating the rent of a lease on terms more favourable to the tenant than the terms in the actual, existing lease. Conversely, if he assesses the up-to-date rent on the basis of terms materially more onerous to the tenant than those in the actual existing lease, the rental figure at which the valuer arrives will not fully reflect the rise in property values or the fall in the value of money since the lease was granted or the rent was last fixed. The decision makes it clear, I think, that what matters is the wording of the review clause in question … There is also an underlying general purpose of fairness and mutual benefit in relation to rent review clauses, as highlighted in the judgment of Ipp JA in ADC Buildings Pty Ltd v Barana Properties (No 1) Pty Ltd (2005) 12 BPR 23,717; (2006) NSW ConvR ¶56-144 (CA) (with whom Mason P and Bryson JA agreed): [21] In United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (cited by Gleeson CJ in GR Mailman and Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 at 86) Lord Salmon said (at 948): [A rent review clause] is for the benefit of the tenant because without such a clause he would never get the long lease which he requires; and under modern conditions, it would be grossly unfair that he should. It is for the benefit of the landlord because it ensures that for the duration of the lease he will receive a fair rent instead of a rent far below the market value

of the property which he demises. Accordingly the landlord and the tenant by agreement in their lease provide that at stated intervals during the term, the rent should be brought up to what is then the fair market rent. The revision clause itself lays down the administrative procedure or machinery by which the fair market rent shall be ascertained. See also City of Aberdeen Council v Clark (1999) SLT 613 (Ex Div). [page 335]

Rent review processes [11.5] Some rent review clauses provide a formula which operates automatically to determine the new rent for the relevant period, whereas other clauses set up machinery for the calculation of the new rent, but which must be implemented by one or other party to the lease (usually the landlord) before it can have any effect. In either case, it is usual to fix time limits within which the rent is to be reviewed although in those leases where the rent review formula is quite automatic, in the sense that neither party is required to do anything to bring about the review, questions of time being of the essence do not arise: see Joint Coal Board v Noone Pty Ltd (1984) 3 BPR 9440. In Ex parte Whelan [1986] 1 Qd R 500 the rental rose automatically under the terms of the lease, which contained express provisions which made demand for rent unnecessary and preserved the rights of the landlord notwithstanding failure to take advantage of previous defaults. Thus the tenant was obliged to tender the revised rent and it was held that there had not been any waiver by the landlord during the period he was entitled to any increase, by reason of the fact that there had been no formal demand for the automatically reviewed rent. A proviso which forms part of a rent review clause may be capable of operating as a covenant and importing an obligation on the tenant to pay the minimum amount prescribed by it as rent even though the parties have not reached agreement as to the new rent or finalised the matter through arbitration. In Hely v Sterling [1982] VR 246, the relevant clause provided that

rental was to be at the rate of $130 per week for the first three years of the term and thereafter: … to be increased for a period of two years, and thereafter to be increased for a period of one year at such weekly rental as shall be agreed upon by the parties … and failing agreement, to be decided by an arbitrator … provided however that the amount payable in each period shall not be less than the amount payable in the previous period and shall correspond with any increase made by the Consumer Price Index (CPI) during such previous term. Lush J held (at 249) that words which constitute a proviso are not necessarily limited in effect to confining or modifying the provision to which they are attached. What is expressed as a proviso may in fact contain a promise. In the case before him, his Honour held that the proviso filled a gap, or a possible gap created by the lack of reservation of rent after each of the three periods and that it imported an obligation by the tenant to pay an amount not less than a minimum (even though there was neither agreement nor arbitration on that point). The proviso also fixed a minimum amount of rent below which it was not to go, that minimum being adjustable in accordance with the Consumer Price Index. Where provision is made for rent review with reference to the Consumer Price Index, care should be taken in specifying which Consumer Price Index is to be used and the effect of changes in the basis of the calculation of the index: see Trifid Pty Ltd v Ralto [1985] WAR 19; and Australian Encyclopaedia of Forms and Precedents Cumulative Supplement, pp 327–30. [page 336] Difficulties may also arise where the formula contained within rent review provision is defined by the adoption of statutory definitions, but where the parties fail to specify whether those statutory definitions are to be maintained for the duration of the term. In HS Hotels (Australia) Ltd v State of Queensland [2012] 2 Qd R 252, a lease and sub-lease for a term of 75 years contained identical rent review clauses providing that rental ‘for each year of the balance

of the term shall be a sum equal to 7.5 percent of the Valuer General’s unimproved value of the capital land’. When the lease and sublease were granted, the definition of ‘unimproved value’ was contained in the Valuation of Land Act 1944. By the time of the repeal of the 1944 Act by the Land Valuation Act 2010, there had been significant changes made to that definition. Under the 2010 Act, the ‘Office of Valuer-General’ made its determination as to the value of non-rural land based on ‘site value’, which differed from the 1944 concept of ‘unimproved value’. Section 297 of the 2010 Act provided that a reference in a lease to unimproved value under the repealed Act is taken to be a valuation under the 2010 Act. The tenant unsuccessfully sought a declaration that the reference in the rent review clauses to ‘unimproved capital value’ was to the value determined by reference to, and in accordance with, the definition of ‘unimproved value’ in the form it was when the lease and sublease commenced. While accepting that the tenant’s position that ‘the commercial purpose of the lease would be defeated if the expression in the clause “the Valuer General’s unimproved capital value of the said land” comprehended a valuation made in accordance with a very different methodology stipulated in subsequent legislation’ was at least arguable, Fraser JA (with whom McMurdo and Boddice JJ agreed) preferred the finding of the primary judge and held (at [18]) that: … the parties presumably appreciated that the legislative regime for the determination of the unimproved value of the land under the 1944 Act might change over time, and, faced with the choice of fixing rent by reference to the legislation as it then stood or fixing rent by reference to a procedure for the determination of a specified value which might vary over time with amendments to the applicable legislation, the language of the clause indicates that the parties opted for the latter method. The question whether the rent review process at any rent review date is mandatory or may only be triggered by either the landlord or the tenant, or both, can only be answered by properly construing the relevant provisions of the lease: see, for example, R & H Australia Pty Ltd v Salta Constructions Pty Ltd (1993) V ConvR ¶54-462 (and see the relevant terms of the lease set out in CCH, Victorian Conveyancing Law and Practice, paras 26–570 at 42) and Sheralex Nominees Pty Ltd v Johnson Taylor & Co Pty Ltd (1994) V ConvR ¶54-489; and

see AMP Society v National Mutual Life Association of Australasia Ltd [1995] 1 NZLR 581; National Provident Fund v Shortland Securities Ltd [1996] 1 NZLR 45; and Myers v Pioneer Concrete (Vic) Pty Ltd [1997] ANZ ConvR 331; (1997) V ConvR ¶54-563 (FCA, FC); Commonwealth v GIO Compulsory Third Party Insurance Ltd (SC (WA), White J, 22 July 1997, unreported); and Baycloud v Dowling Investments Pty Ltd [2005] ANZ ConvR 335; (2005) NSW ConvR ¶56-124; Growthpoint Properties [page 337] Australia Ltd v Australia Pacific Airports (Melbourne) Pty Ltd [2014] VSC 556; see also Pacific Cinemas (Loganholme) Pty Ltd v Longhurst [1996] ANZ ConvR 530 (CA(Qld)) in relation to whether ‘further review’ provisions, which provided for a market review, were mandatory in circumstances where the lease otherwise provided for a fixed percentage annual increase in rent. In Highpoint Homemaker Centre (Vic) Pty Ltd v Sanstar Pty Ltd [1997] ANZ ConvR 170; (1997) V ConvR ¶54-564 (CA) it was held that the giving of a notice instituting a rent review was discretionary to the landlord even though the rent review provisions expressly made time of the essence with respect to a tenant’s counter notice. As to rent review notices generally, see [11.9]. It does not necessarily follow that because the rent review provisions contemplate steps being taken by one only of the landlord or the tenant that the particular party which is to take these steps has, consequently, the exclusive right to trigger (or not trigger) the rent review process; and neither does it follow that the party involved is under any obligation imposed by the lease provisions to take the steps contemplated: see Royal Bank of Scotland plc v Jennings [1997] 19 EG 152; (1998) 75 P & CR 458 (CA). The rent review process in the lease considered in this case provided that the revised rent may be agreed between the landlord and the tenant or in the absence of agreement be determined by a specialist valuer to be agreed between the parties or nominated by the President for the time being of the Royal Institution of Chartered Surveyors upon application by the landlord at any time after the commencement of the relevant rental period. The landlord’s argument that these provisions conferred an option on the landlord alone whether or not to invoke the rent review

process was rejected by the Court of Appeal. Sir Richard Scott VC (with whom Saville and Potter LJJ agreed) said (at 464): In my judgment the issue depends upon whether construing the lease as a whole, the conclusion is justified that the landlord was intended to have that option. If the landlord was intended to have that option, the landlord was entitled to exercise it and to decide whether or not there should be a rent review. But if the judge below was right in concluding that the provision in question was no more than mere machinery for the carrying out of rent reviews which were intended to happen in any event, then, on authority, there is no reason why the landlord’s failure to make the application should be allowed to frustrate the contractual intention discerned from the lease as a whole. The court will in that event if necessary supply machinery to prevent that frustrating refusal from achieving its purpose. In circumstances where the lease provided for the right to review the rent to be exercised by the landlord alone it was held that the absence of an upwards only rent review formula did not provide a sufficient basis to construe the clause as providing for a mandatory rent review or a rent review that could be triggered by both the landlord and the tenant: see Hemmingway Realty Ltd v Master Wardens and Commonalty of Freemen of the Art or Mystery of Clothworkers of the City of London [2005] 2 EGLR 36 (Ch D); and see Growthpoint Properties Australia Ltd v Australia Pacific Airports (Melbourne) Pty Ltd, where Croft J held that the conditional language used in the operative section of [page 338] the rent review provisions conveyed to the head tenant a discretion as to whether to initiate a market rent review, despite the parties to the sub-lease expressly excluding the operation of the upward-only rent review provision contained within the sub-lease.

Time limits

[11.6] In many circumstances, the landlord is required to take steps during the prescribed time to have the new rent determined either by agreement or by valuation (or by arbitration). Where a landlord in such a situation fails to initiate the necessary procedure within the required time, it becomes open for the tenant to claim that, by reason of such failure, the landlord has lost the right of raising the rent. Having regard to general inflationary trends, it is therefore not surprising that a relatively large number of disputes of this nature have ended in litigation. Until recently, the courts have not provided any clear or definitive statement of the law on the subject. It seems that the position now is that a landlord who has failed to observe the time limits specified in the rent review clause will lose his or her right to raise the rent only if such time limits are of the essence of the contract and that, in the absence of any indication in the lease to the contrary, the presumption is that the time limits prescribed by such a clause are not of the essence of the contract: United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; [1977] 2 All ER 62; (1978) 52 ALJ 43. The House of Lords in that case overruled the Court of Appeal which held that since such a rent review clause forms part of an agreement of a commercial character (and is for the benefit of the landlord), time should be regarded as being of the essence of that contract. Prior to that decision, a distinction was sought to be made in some cases between a rent review clause which gave the landlord the ‘option’ of reviewing the rent and a clause which became known as an ‘obligation’ clause by which the parties became contractually bound to carry out the review (or where the review was to be an automatic event). In the former class of case, if the landlord did not comply with the time limits, it was held to lose its right to insist on the higher rent: Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1296; Stylo Shoes Ltd v Wetherall Bond Street W1 Ltd [1976] 1 EGLR 86; Mount Charlotte Investments Ltd v Leek and Westbourne Building Society (1975) 30 P & CR 410. In the latter class of case, the time limits were construed as being directory and, provided the tenant had not been prejudiced by the delay, the new rent could be fixed after the expiration of the time period: C H Bailey Ltd v Memorial Enterprises Ltd [1974] 1 WLR 728; Kenilworth Industrial Sites Ltd v E C Little & Co Ltd [1975] 1 WLR 143; Accuba Ltd v Allied Shoe Repairs Ltd [1975] 1 WLR 1559. The Court of Appeal in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 did away

with that distinction. The House of Lords, above, also disregarded it, holding that, generally, a rent review clause could not be considered as being in the nature of an option because the effect of the landlord exercising his or her rights under it was not to create a new interest or determine an existing one. The relevant [page 339] clause in United Scientific Holdings v Burnley Corporation provided that ‘during the year immediately preceding the period of the second 10 years of the said term and during the year immediately preceding each subsequent 10 year period, the landlords and the tenants shall agree or failing agreement shall determine by arbitration (the rental for each new 10 year period)’. The landlords did not seek to have the rent review provisions implemented until after the expiration of the relevant time period and the tenants claimed that in those circumstances the landlords were not entitled to require the tenants to pay the higher rent. The House of Lords held that the stipulation as to time was not of the essence of the clause and the landlords were entitled to demand a review of the rent retrospectively to the beginning of the relevant (new) period. Thus, in the absence of an agreement to the contrary, time is not regarded as of the essence of the contract in respect of rent review provisions contained in a lease: Al Saloom v Shirley James Travel Service Ltd (1981) 259 EG 420 (CA), applied in Legal and General Assurance (Pension Management) Ltd v Cheshire County Council [1984] 1 EGLR 102 (CA). An example, however, where it has been held that the true agreement between the parties included the requirement that the rent review timetable be of the essence of the lease, and therefore failure to adhere to it meant that such a provision could not be insisted upon, is Weller v Akehurst [1981] 1 EGLR 105. In that case it was held that, in the absence of the rent review clause coming into operation, the parties must have intended the old rent to continue. This decision was the result of the application of United Scientific Holdings v Burnley Corporation. Fox J began with the general presumption, settled by the House of Lords, that strict adherence to timetables specified in a rent review is not of the essence of the contract, and continued (at [1981] 3 All ER 415):

But as Lord Diplock observed ([1977] 2 All ER 62 at 67): It is not disputed that the parties to a lease may provide expressly that time is or time is not of the essence of the contract in respect of all or any of the steps required to be taken by the landlord to obtain the determination of an increased rent, and that if they do so the court will give effect to their expressed intention. Later he said ([1977] 2 All ER 62 at 77): … the best way of eliminating all uncertainty in future rent review clauses is to state expressly whether or not stipulations as to the time by which any step provided for by the clause is to be taken shall be treated as being of the essence. Lord Diplock’s exhortation should be noted in the drafting of leases. For an example of the successful application of this approach, see Kenilworth Industrial Sites Ltd v E C Little & Co Ltd [1975] 1 WLR 143; and see Trustees of Henry Smith’s Charity v AWADA Trading and Promotion Services Ltd (1983) 47 P & CR 607 (CA) where the parties had laid down a timetable in the lease and made express provision as to what was to happen if that timetable was not strictly complied with. This was held to be sufficient contraindication to displace the presumption against time being of the essence (see Donaldson MR at 47 P & CR 614 and also the dissenting judgment of BrowneWilkinson LJ in Mecca Leisure Ltd v Renown Investments (Holdings) Ltd (1984) 49 [page 340] P & CR 12 at 23 (CA); both set out in GR Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 at 95–6 (CA) (per Samuels JA) and at 100, 101 (per Meagher JA)). However, a provision in a lease deeming a tenant to have agreed to reviewed rent, as specified in a notice from the landlord, unless a counternotice by the tenant was served in a specified time, has been held insufficient to make time of the essence for service of the counternotice: Taylor Woodrow Property Co Ltd v Lonrho Textiles Ltd [1985] 2 EGLR 120 (QB); and Mecca Leisure Ltd v Renown Investments (Holdings) Ltd.

The divergence between the latter case and Trustees of Henry Smith’s Charity v AWADA Trading and Promotion Services Ltd (both decisions of the Court of Appeal) has been explained on the basis that they merely raised questions of construction, the provisions in the latter case involving an elaborate procedure and ‘a time limit at virtually every turn’: see Gleeson CJ in G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 at 90 (CA); and see at 96 (per Samuels JA) and at 99, 100 (per Meagher JA). However, in G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd the New South Wales Court of Appeal held that an express provision for a default rent in the event of a failure to serve a notice within a specified time necessarily showed that time was of the essence of the service of the notice. The ‘deeming’ provision considered in that case provided that if the tenant did not serve a notice on the landlord within a prescribed time the tenant ‘shall be deemed to have agreed that the amount set out in the notice … is the current market rent’ of the premises as at the rent review date and for the following rent period. In G R Mailman, Gleeson CJ provided a convenient summary of the effect of the decision in United Scientific, with reference to Trustees of Henry Smith’s Charity and other authorities (at 88–9): The effect of the decision in United Scientific Holdings Ltd v Burnley Borough Council was summarised by Slade LJ in Trustees of Henry Smith’s Charity v AWADA Trading & Promotion Services Ltd (at 619) as follows: (1) Where a rent review clause confers on a landlord or tenant a right for his benefit or protection, as part of the procedure for ascertaining the new rent, and that right is expressed to be exercisable within a specified time, there is a rebuttable presumption of construction that time is not intended to be of the essence in relation to any exercise of that right. (2) In a case where the presumption applies, the other party concerned may, if he wishes to bring matters to a head after the stipulated time for the exercise of the right has expired, give to the owner of the right a notice specifying a period within which he requires the right to be exercised, if at all; the period thus specified will if it is reasonable then become of the essence of the contract …

(3) The presumption is rebuttable by sufficient ‘contraindications in the express words of the lease or in the interrelation of the rent review clause itself and other clauses or in the surrounding circumstances’. (4) Though the best way of rebutting the presumption is to state expressly that stipulations as to the time by which steps provided for by the rent review clause [page 341] are to be taken is to be treated as being of the essence (see United Scientific Holdings Ltd v Burnley Borough Council per Lord Diplock [[1978] AC] at 936, and per Lord Salmon [[1978] AC] at 947), this is not the only way. Any form of expression which clearly evinces the concept of finality attached to the end of the period or periods prescribed will suffice to rebut the presumption. The parties are quite free to contract on the basis that time is to be of the essence if they so wish. Certain features of these propositions may be noted. First, although the question whether time is of the essence of a contract usually arises in relation to contractual obligations which are to be performed by or within a stated time, so that many of the leading authorities on the subject discuss the matter in terms of one party being in breach, and the consequent rights of the ‘innocent’ party, in this context the principles concerning time being of the essence are operating in the context of the exercise of a right rather than the performance of an obligation. Secondly, and in consequence, there is an element of incongruity in the importation into this area of discourse of the notice procedure, for the party giving the notice is not requiring the performance of a promise made for that party’s benefit but is, instead, ‘requiring’ the exercise of a right which may be adverse to that party’s own interests. A notice of the kind contemplated may, in effect, be requiring the recipient to declare an attitude or take a stand rather than to do anything the recipient is contractually bound to do. This is a

somewhat unusual use of such a notice. However, the decision of the House of Lords clearly provides for such a notice where otherwise appropriate. Thirdly, it is established that, in a case where a time is stipulated in a contract but is not of the essence, the consequence is not that the agreement between the parties is altered so that the stipulation is varied by, for example, adding to it an expression such as ‘or within a reasonable time thereafter’. The agreement as to time remains, and if there is a breach, and consequent damage, the party in breach may be liable. The rules as to time being or not being of the essence, and as to the giving of a notice such as a notice to complete, relate to some of the consequences of non-compliance with the contractual stipulation, but they do not alter its meaning: Louinder v Leis (1982) 149 CLR 509. Finally, the issue always comes back to the construction of the contract between the parties. The idea of a ‘rebuttable presumption’ as to the meaning of words involves some conceptual difficulties, but it is not novel, and the result is that, if there is doubt about what the language of the contract means, the court will lean against a conclusion that time is of the essence, but, nevertheless, if, either expressly or by necessary implication, the parties clearly evince an intention that time is to be of the essence, the court will give effect to that intention. See also Samuel JA (at 93–5) and Meagher JA (at 99, 100). In Highpoint Homemaker Centre (Vic) Pty Ltd v Sanstar Pty Ltd [1997] ANZ ConvR 170; (1997) V ConvR ¶54-564 (CA), Winneke P made reference to GR Mailman but in the context of rent review provisions which expressly made time of the essence with respect to a tenant’s counter notice to the landlord’s notice instituting a rent review, the latter being held to be discretionary and not mandatory (see at V ConvR 66,777); and see GDH Pty Ltd v Wayne [2001] QSC 73; and Callaghan v Merivale CBD Pty Ltd [2006] ANZ ConvR 114; (2006) NSW ConvR ¶56-155; and as to rent review notices, see [11.9]. [page 342]

It appears that United Scientific accurately states the law in Australia though it has not escaped some criticism: see G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 (CA) (the report of this decision notes that the High Court refused special leave to appeal). It was referred to by the High Court in Louinder v Leis, above, a vendor and purchaser case. Mason J (at 525–6) and Brennan J (at 533) approved aspects of Lord Diplock’s general comments on stipulations as to time. In Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455 the lessors had failed to activate effectively the rent review clause until more than two-and-a-half years after its provisions had become applicable. The High Court (Mason, Murphy, Brennan, Deane and Dawson JJ), referring to the provisions of the rent review clause, the subject of the appeal, said (at 468): They constituted the only agreed procedure for ascertaining a rent for the last five years of the lease … even if the lease had contained a provision expressly requiring Gollin and the lessors respectively to appoint a valuer or to activate the rent review procedure within a specific time, the performance of that obligation within that particular time could not, without more, have properly been seen either as a condition of the applicability of cl III(vii) [the rent review clause] or as being of the essence of the contract (see, generally, United Scientific Holdings Ltd v Burnley Borough Council). The position is even clearer in the present case where there was no express obligation and no express provision as to time. It is, as has been seen, difficult enough to imply in the lease an unqualified requirement that each party appoint a valuer or obtain a valuation or otherwise activate the rent review procedure within a reasonable time of the commencement of the fourth year of the term without agreement having been reached on the rent for the last five years. It is plainly impossible to imply a further provision that that implied time for the performance of that implied obligation was of the essence of the contract or that the performance of that implied obligation within that implied time was a condition of the operation of the only clause of the contract which made provision as to the amount of rent to be paid for the last five years of the term. The High Court also concluded that, as the rent review clause provided the only agreed means for ascertaining the rent for the last five years of the term,

its provisions were not capable of being waived unilaterally by one party. United Scientific was applied in National Mutual Life Association of Australia Ltd v Ampol Ltd. In that case the lessor had given notice of its intention to increase the rent four months late under the rent review clause. It was held that, notwithstanding the delay, the lessor was entitled to the increased rent as the parties could not be taken to have intended strict compliance with the rent review timetable. It was observed that an important and inseverable part of the consideration for granting the lease was the right of the lessor to increase the rent, and that this was particularly important in long-term leases. The House of Lords decision has also been applied in St Martins House Pty Ltd v Law Society of NSW (1983) NSW ConvR ¶55-141 and Kelmea Pty Ltd v State Rail Authority of NSW (SC(NSW), Bryson J, 10 December 1986, unreported); and see Maritime Services Board of NSW v Australian Shipping Commission (1991) 27 NSWLR 258; 33 Bank Street Nominees Pty Ltd v Citipower Pty Ltd (SC(Vic), Beach J, 16 June 1997, unreported) and other authorities referred to below. [page 343] While the general principle for which United Scientific Holdings v Burnley Corporation may be easily stated, in the absence of any express provision as to the intended effect of time limits, its application to any particular lease requires careful consideration of the terms of that lease and the surrounding circumstances to determine whether the presumption is rebutted by an indication to the contrary. In spite of this, some general propositions do emerge. It seems that a tenant’s ‘break’ clause tied in with a rent review clause will generally have the effect of making time of the essence in the rent review provisions if to hold otherwise would prejudice the tenant’s rights under the former, where time is of the essence: see United Scientific [1978] AC 904 at 935–6 (per Lord Diplock), and 945–7 (per Lord Simon); Al Saloom v Shirley James Travel Service Ltd (1981) 259 EG 420 (CA), applied in Legal and General Assurance (Pension Management) v Cheshire County Council [1984] 1 EGLR 102 (CA); and Kelmea Pty Ltd v State Rail Authority of NSW; but compare Metrolands Investments Ltd v J H Dewhurst Ltd [1986] 3 All ER 659 where it was held that the interrelation between the rent review clause and the break

clause was insufficient to rebut the presumption that time was not of the essence. Slade LJ, on behalf of the Court of Appeal, provides a useful review of the authorities on ‘break clauses’ in this case (and see also Central Estates Ltd v Secretary of State for the Environment (1995) 72 P & CR 482 (CA)). On the other hand, it is clear from the cases that the presumption is not easily rebutted and any contrary intention must be spelt out very clearly. For example, the following have been held to be insufficient: the right to initiate the review ‘not later than’ (National Mutual Life Association of Australia Ltd v Ampol Ltd (1983) 3 BPR 9101 (SC(NSW)); where the specified date is significant for the purposes of indexation, valuation or arbitration (National Mutual, above); where a date or period is specified on or before which notice is to be given (St Martins House Pty Ltd v Law Foundation of NSW). On the other hand, in G R Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 (CA) it was held that a rent review provision which allowed the tenant a specified period of time to dispute the landlord’s assessment of the reviewed rent and set out the consequences of failing to dispute the assessment within the specified time indicated an intention that the time stipulation was to be of the essence of the lease. See also Maritime Services Board of NSW v Australian Shipping Commission. More recently, in Starmark Enterprises Ltd v CPL Distribution Ltd [2002] Ch 306, the English Court of Appeal reaffirmed the position that the normal presumption in rent review cases that time was not of the essence could be displaced if the contracting parties had shown clear contraindications in their wording of the rent review clauses in the lease; in this case provisions which provided for the consequences of a failure to comply with the stipulated timetable (and, similarly, see Banks v Kokkinos [1998] EGCS 187 (Ch D)). There are many other examples in the law reports, decisions which are merely the application of the general principles to the provisions of particular leases and circumstances. Reference should be made to Halsbury’s Abridgment for the numerous English decisions of this type. [page 344] The most important limitation on the general principles and application of United Scientific appears to arise on the facts of the appeals, heard together by

the House of Lords. In the first, the lease was for a term of 99 years with provision for rent review every 10 years. In the second, the lease was for a term of 21 years with rent reviews every seven years. Thus, if the rent review provisions were construed according to their terms (that is, if time were of the essence) the landlord would have been deprived of a rent review for a considerable period of time. In the light of this, Lord Diplock said in relation to the first appeal (at 932): The absence of any serious detriment to the tenant if the determination of the new rent is postponed until some time after the commencement of the ten year period to which it will relate is to be contrasted with the detriment to the landlord if strict adherence to the date specified in the review clause is to be treated as of the essence of the contract. If it were determined even slightly late the landlord would lose his right to the additional rent for the whole period of ten years until the next review date. (As to rent review provisions being an essential part of the consideration in long leases, see Lord Salmon at 947–8 and Lord Fraser at 957–8.) The tenant’s position was considered more fully on the second appeal; Lord Diplock said (at 933–4): In two respects under the terms of the review clause the progress of the procedure for determining the new rent is, or may become, within the exclusive control of the landlords. They alone can initiate the procedure; and they alone can apply to the president of the Royal Institution of Chartered Surveyors if negotiations with the tenants do not result in an agreement as to the rent or on the person who is to value it. The tenant’s position under this clause thus differs from that of the tenants under the rent review clause that is the subject of the first appeal, inasmuch as they have no right under their contract to initiate the procedure or to apply for the appointment of a valuer if the landlords themselves fail to do so within the stipulated times. But this difference has not in my view any significant practical consequences so far as concerns any detriment to the tenants from the landlords’ failure to do either of these things within the stipulated times. If the tenants

reckon that the advantage of knowing before the review date exactly how much higher their new rent will be outweighs the economic benefit of having the use of the money representing the difference until the new rent has been determined, they have the remedy in their own hands. Quite apart from the fact that they can get a pretty good idea of what the market rent is from their own surveyor or can themselves offer to enter into negotiations with the landlords before the stipulated time for serving a lessors’ notice has expired, so soon as that time has elapsed they can give to the landlords notice specifying a period within which they require the landlords to serve a lessors’ notice if they intend the market rent to be determined and payable instead of the former rent for the ensuing seven years. The period so specified, provided that it is reasonable, will become of the essence of the contract. The fact that the tenants had previously pressed the landlords to start negotiations before the end of the period specified in the rent review clause for service of a lessors’ notice or that the determination of the rent before the review date was specially important to them, would be relevant facts in determining whether the period specified by the tenants was reasonable (Stickney v Keeble [[1915] AC 386] per Lord Parker of Waddington); and in view of the ease with which the landlords could comply [page 345] with the requirement a notice fixing a very short period would no doubt suffice to make time become of the essence. So here again I find nothing to displace the presumption that strict adherence to the timetable specified in the rent review clause is not of the essence of the contract. In relation to leases of relatively short terms or short rent review periods, these comments do not have such force, although it may be otherwise if the rate of inflation has been very high over a significant period. It appears that the courts are unlikely to be greatly concerned by the effect

on the tenant of mere delayed rent review if, on a proper construction, the landlord has the right to a review out of time: see Lord Diplock’s remarks in the United Scientific case [1978] AC 904 at 933–4, above (compare Lord Salmon’s comments at 956) and the view of Oliver LJ in Amherst v James Walker Goldsmith & Silversmith Ltd [1983] Ch 305 at 315 (CA) that ‘… even delay plus hardship to the tenant would not disentitle the landlord to exercise the right which he has, on the true construction of the contract, unless the combination amounted to an estoppel’. Thus the hardship aspect goes to construction of the relevant provision of the lease, not its operation. In Amherst, Oliver LJ, leading up to this position, commented (at 315): I know of no authority for the proposition that the effect of construing a time stipulation as not being of the essence is to substitute a fresh implied term that the contract shall be performed within a reasonable time and even if such a term is to be substituted the passage of a reasonable time would not automatically abrogate the contract. Lawton LJ was of the opinion that business efficacy did not require the implication of such a term into the lease (at [1983] Ch 319). In Maritime Services Board of NSW v Australian Shipping Commission, Rogers CJ Comm D accepted the position expressed by Oliver LJ as to delay and hardship and, referring to the relevant parts of these judgments with approval, held that in the absence of any provision in the leases as to the time for giving notices relating to rent increases, business efficacy did not require notification of a rent increase within a reasonable time after the commencement of the relevant rent review period. Nevertheless, unreasonable delay causing hardship is another matter: see United Scientific case [1978] AC 904 at 956 (per Lord Salmon); and London & Manchester Assurance Co Ltd v G A Dunn & Co (1982) 265 EG 39 at 136 (per Slade LJ). In Esso Petroleum Co Ltd v Anthony Gibbs Financial Services Ltd [1983] 2 EGLR 112 (CA) the landlord’s notice to review the rent was held valid in spite of the fact that the landlord and tenant had previously agreed informally that no rent review was necessary. Liability to pay rent in accordance with a rent review clause is not destroyed or discharged by a surrender after the commencement of the rent review period to which such provision relates: Torminster Properties Ltd v Green [1983] 1 WLR 676 at 684–5 (CA) (per Stephenson LJ). Subject to hardship,

estoppel or express or implied agreement disentitling the landlord from exercising the right, the reasoning [page 346] in Torminster indicates that the basis of this position is of general application and would not usually be affected by the mode of determination of the lease (whether by effluxion of time or otherwise). In relation to the calculation of time limits and time periods for the giving of rent review notices, see, for example, First Property Growth Partnership v Royal & Sun Alliance Property Services Ltd [2003] 1 All ER 533 (CA), particularly in relation to the meaning of the word ‘before’.

Entire mechanism [11.7] Where a lease contained a renewal clause at a rental to be mutually agreed and, in default of agreement by an arbitrator, it was held that the lease provided the entire mechanism for renewal and determination of the new rent, and that it was an implied term that both parties would do all that was reasonably necessary to procure the appointment of an arbitrator, see Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; and see the discussion of this decision at [14.7]. The courts may be prepared to imply a term or provide machinery, but cannot do so in circumstances where the intended result of the ‘failed mechanism’ is not clear: see Fraser & Pipestock Ltd v Gloucester City Council (1995) 71 P & CR 123 (Ch D) where the machinery was intended to produce an ad hoc ground rent rather than to achieve a fair rent. In these it could not be said that the parties would have been ad idem as to how a fair market rent was to be calculated; and the court could not remake the parties’ bargain. In circumstances where, on the true construction of the lease as a whole, it was clear that the parties contemplated that there would be a rent review for each of the rental periods and a revised rent, it was held that the landlord should not be able to frustrate the rent review process by failing to appoint an expert to determine market rental value: Royal Bank of Scotland plc v Jennings [1997] 19 EG 152 (CA); 1 EGLR 101 (CA). This

position was reached on the basis that the provision relating to the nomination of the expert was a matter of machinery and not of substance, so the court could supplement the machinery to prevent this result. See also City of Aberdeen Council v Clark (1999) SLT 613 (Ex Div). Where a new rent was fixed by an arbitration under a rent review clause after the review date and the lease provided that rent was to be paid in equal quarterly instalments on the usual quarter dates, the new rent was held to become due and payable on the next quarter date following the award and not when the award was made: South Tottenham Land Securities Ltd v R & A Millett (Shops) Ltd [1984] 1 WLR 710; compare Torminster Properties Ltd v Green [1983] 1 WLR 676 where the problem was dealt with expressly in the rent review clause. As to the correction of errors in rent review clauses in the process of construction of their provisions, see [11.8]. [page 347]

Basis of rent review — construction of the rent review clause [11.8] In this context, it is important to bear in mind that a rent review clause is unlike an option to purchase (or to take a new lease). ‘The determination of a new rent under the procedure stipulated in the rent review clause neither brings into existence a fresh contract between the landlord and the tenant nor does it put an end to one that had existed previously’ (per Lord Diplock in United Scientific [1978] AC 904 at 930). It is a clause which is intended to operate within the framework of an existing contract, unlike an option to purchase (or lease) which gives one party the right to bring into existence a new contract so that all the relevant terms of it, including the purchase price or rent (as the case may be) must be agreed upon or capable of being ascertained before such a right can be enforced. (See, for example, Kings Motors (Oxford) Ltd v Lax [1970] 1 WLR 426.) Consequently, it may well be easier to imply a term in a rent review clause so as to fill a gap and give business efficacy to it than it would be where the option to purchase (or lease)

omitted a material term. Some support for this can be found in the decision of the Court of Appeal in Beer v Bowden [1981] 1 WLR 522, where the rent review clause provided that the new rent was to be ‘such rent as shall be agreed upon between [the parties] … and in any case [the rent shall be] not less than the yearly rental …’ of £1250. No provision was made as to what was to happen in default of agreement. The parties failed to agree on the new rent and the Court of Appeal held that on the true construction of the clause it was to be implied that in default of agreement a ‘reasonable price’ was payable, namely the fair market rent, excluding tenant’s improvements. Despite the absence of an arbitration clause in the rent review provisions, a term was implied in order to give business efficacy to the clause. See also Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 at 517– 19; and see [14.7]. Sometimes a rent review clause does not in terms stipulate whether the new rent is to be determined on the basis of market valuation or whether it is to be calculated by reference to what is reasonable between the parties. In each case, it is a matter of construing the relevant clause to determine its true meaning. The few authorities that do exist on this point indicate that, generally, where the rent review clause provides that the new rent will be ‘such as shall have been agreed’ between the parties and not ‘a reasonable rent for the demised premises’ (as was the case in Ponsford v HMS Aerosols Ltd [1979] AC 63; see also Cuff v J & F Stone Property Co Ltd [1979] AC 87, which was approved by the House of Lords in this decision), the relevant rent is the rent which it would be reasonable for the particular parties to have agreed upon having regard to all the relevant circumstances, and is not to be the rent assessed objectively on the basis of market rent at which the premises might reasonably be expected to have been let: see Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 at 518–19; Lear v Blizzard (1983) 268 EG 1115; compare Burns Philp Hardware Pty Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642. Relevant circumstances include ‘reference to the particular landlord or the particular tenant or to the history of how [page 348]

the premises came to be built or paid for’: [1981] 1 All ER at 1088, analysing the Ponsford decision. The Victorian Full Court adopted a similar approach in Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16 in construing the words ‘reasonable rental’; and see Bank of South Australia v SA Health Commission (1996) 65 SASR 409; [1996] ANZ ConvR 559. The court in Email said (at [1984] VR 21): We first make the obvious point that the parties did not provide for a ‘market rental’ as they so easily could have done. The parties provided for a ‘reasonable rental’. This, in our opinion, means a rental which is reasonable in the light of all the relevant circumstances. In the factual setting, we do not find it surprising that the parties did not provide for a ‘market rental’. To do so would have been recognised as having a potentiality for injustice. But the next question is who is to decide which circumstances are relevant and what weight should be given to them. If the provision had merely stated that a reasonable rental was to be payable, no doubt the Court, in the event of a dispute, would have to determine what circumstances were relevant to the fixing of a reasonable rent. But, in this case, the parties provided that ‘such annual rental shall be as determined as a reasonable rental by a single certified valuer’. In our opinion, the parties have clearly bestowed upon the valuer the obligation of determining what circumstances are relevant to the question of fixing ‘a reasonable rental’. We do not consider that the Court should make a declaration which delineates the circumstances to which the valuer should have regard. The declaration that we are disposed to make is that ‘a reasonable rental’ means a rental which the valuer considers is reasonable having regard to all the circumstances which the valuer considers are relevant. The court reached this view on the proper construction of the words on the basis of ‘certain factual considerations’ which it inferred to have been present in the minds of the contracting parties. They included the fact that the leased development was very large, had special features to suit the convenience of the particular tenant (and therefore had special value to the tenant) and that it would be difficult to let. On this basis the court continued:

As we have said, the premises have a special value for Email. The fact that premises may have a special value to the owner, beyond the market value, has been recognized in cases concerned with compensation payable to compulsorily dispossessed owners: The Moreton Club v Commonwealth (1948) 77 CLR 253, at pp 257–8, per Dixon J … In Opera House Investments Pty Ltd v Devon Buildings Pty Ltd (1936) 55 CLR 110, the High Court was concerned with construing a provision in a lease which required the lessee to pay to the lessor such rate of interest as the lessor ‘may reasonably contract to pay on the said moneys’. At p 116, Latham CJ said: ‘The word “reasonable” has often been declared to mean “reasonable in all the circumstances of the case”. The real question, in my opinion, is to determine what circumstances are relevant. In determining this question regard must be paid to the nature of the transaction’. Starke J said, at p 117 ‘“Reasonable” is a relative term, and the facts of the case must be considered before what constitutes a reasonable contract can be determined’. This issue was considered more recently in Colin Marg Pty Ltd v Mackay Medical Investment Ltd [2006] QSC 181; [2007] 1 Qd R 303; (2006) ANZ ConvR 492; (2006) Q ConvR ¶54-657 where Wilson J said: [page 349] [8] The applicant contends that Mr Thorne’s determination is not in accordance with cl 15.4.4 of the lease. It contends that the determination should have been undertaken on a subjective basis — that is, what he should have determined was the rent payable under the particular lease between the particular parties (which included the permitted use being that of a health and fitness centre), and not the market rent between a lessor and a lessee who were hypothetically at arms’ length. The central issue in this application is whether the valuation complies with the terms of the lease, and not whether there was some error in the discretionary judgment of the valuer.

[9] The further lease is in all relevant respects on the same terms and conditions as the original lease: in other words, it contains the same restriction on the use of the demised premises. The primary method for establishing the rent for the first year is by agreement of the parties (cl 15.4.3), and it is only where the parties do not agree that a valuer is to be appointed. That is a strong indicator that the valuer is to do what the parties cannot agree to do, and so to take into account all the considerations which would affect the minds of the parties when negotiating to a conclusion. See the observation of Moynihan J in Wickham Properties Pty Ltd v Astor Motel Pty Ltd [[1994] 1 Qd R 211 at 220], where His Honour was commenting upon the decisions in cases such as Lear v Blizzard [[1983] 3 All ER 662] and Jefferies v RC Dimock Ltd [[1987] 1 NZLR 419]. [10] In Lear a lease for a petrol station contained an option to renew for a further 21 years ‘at a rent to be agreed between the parties … or in default of agreement at a rent to be determined by a single arbitrator’ [Lear [1983] 3 All ER 662 at 664]. Tudor Evans J held that the clause required the arbitrator to determine the rent subjectively — that is, by considering all the circumstances and deciding what would be a fair rent between the particular parties. In doing so His Honour placed great emphasis on the fact that the arbitrator was only to be involved if the parties failed to reach agreement: the focus of the clause was the agreement between the parties, not merely the objective premises. In this way the earlier case of Ponsford v HMS Aerosols Ltd [[1979] AC 63], where the focus of the clause was squarely on ‘the demised premises’, was distinguished [In Ponsford, the rent was to be agreed by the parties and, if the parties failed to agree, an independent surveyor was to be appointed to determine ‘a reasonable rent for the demised premises’. This case highlights the need to analyse each lease independently and carefully: the fact that the independent expert is only required to determine the rent if the parties fail to reach agreement does not automatically make that task a subjective one. The clause in Ponsford was materially different from the clause in this case and the other cases relied on, which explains the different result.] In

Lear the clause required the arbitrator to perform the task that the parties themselves failed to do. [11] Similarly, in Jefferies, the lease contained a rent review clause in these terms: ‘the rental fixed at each review shall be such rental as is agreed upon by the Landlord and the Tenant and if they cannot agree to be determined by Arbitration’ [Jefferies [1987] 1 NZLR 419 at 420]. The court held, referring to Lear, that the clause required the arbitrator to determine, subjectively and considering all the circumstances, a fair rent as between the particular parties. [12] By contrast, in Wickham, a compromise agreement [In this case the respondent sought to exercise an option in the original lease, and the appellant disputed its entitlement. The proceeding that followed was compromised by way of agreement.] contained a rental clause in these terms: ‘the rental to be paid pursuant to such lease be fixed by determination of a valuer mutually agreed upon by the parties … who [page 350] in determining such rental shall have due regard to comparable rent in the City of Brisbane for premises of comparable age, position and architectural qualification’ [Wickham [1994] 1 Qd R 211 at 217]. This clause was substantively different from the clauses in the previous two cases: the valuer was the only means of determining the rent, not the alternative method in case of failure of the parties to agree. Further, the valuer was explicitly directed to have regard to objective considerations. These two factors caused the court to distinguish Lear and Jefferies and hold that the rent must be determined objectively. [13] In the present case the rental is to be determined by agreement between the parties, and in the event of failure to agree, by an appointed valuer. It is therefore directly analogous to Lear and Jefferies: the valuer is to perform the task that the parties have been unable to do themselves, and so must determine the rent subjectively. See also the note of this case, ‘Rent Review: “Subjective” or “Objective”

Valuation?’ (2006) 80 ALJ 717. Where it becomes apparent that a rent review clause contains an error, the court will correct the error by construction so long as it is possible to determine the nature of the omission with sufficient precision by construing the document as a whole: see Wolverhampton & Dudley Breweries plc v Trusthouse Forte Catering Ltd [1984] 2 EGLR 141 (Ch). However, it cannot be assumed that parties to a commercial lease invariably intend that the rent should not fall below the market value: Philpots (Woking) Ltd v Surrey Conveyancers Ltd [1986] 1 EGLR 97 (CA). An error may manifest itself where the application of the plain words of the rent review clause lead to an absurd result. Westpac Banking Corporation v Tanzone Pty Ltd (2000) 9 BPR 17,521; [2000] ANZ ConvR 354; (2000) NSW ConvR ¶55-939 (CA) provided an illustration of this situation: see also ‘When will the “ordinary and natural” meaning of words prevail?’ (2002) 22(4) Queensland Lawyer 105; ‘Considering the Terms of an Agreement’ (2001) 16(3) APLB 28; ‘Absurd Rent Review Clause’ (2000) 74 ALJ 498; ‘Case of Absurdity — Westpac Banking Corp v Tanzone Pty Ltd’ (2000) 14(9) APLB 94. In Tanzone the operation of the rent review provisions according to their terms was producing ever more massive percentage rent increases (by the sixth review date an 81.45 per cent increase on the previous rent) so that it was relatively easy to say that the result was absurd rather than merely unreasonable. The Court of Appeal (Priestly and Fitzgerald JJA and Foster AJA) said: [19] On the construction question, Westpac repeated the submission it had put to the trial judge, that Tanzone’s construction led to absurd results and that cl 2.02 should be construed to avoid the absurdity. Windeyer J accepted the legal proposition upon which the submission was based. He said: The question is whether these words [ie of cl 2.02] lead to an absurd result looking at the situation in 1985. If they do then they should be construed so as to avoid the absurdity by supplying omitting or correcting words. [20] Windeyer J cited Fitzgerald v Masters (1956) 95 CLR 420 and Watson v Phipps (1985) 60 ALJR in support of his view. In this we think he was correct. Other authorities are to

[page 351] the same effect: see Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1991) 147 CLR 297 for the Australian position and cf, in England, Mannai Investments Co Pty Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 and Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, particularly per Lord Hoffmann in each case. [21] In Australia, Fitzgerald v Masters and Cooper Brookes in particular have been followed many times and are well entrenched High Court authorities. We note at this stage that contrary to submissions put by Tanzone, these cases are by no means limited to instances of ambiguity, nor is their authority affected by R v Young (1999) 46 NSWLR 681. [22] Returning to Windeyer J’s line of reasoning, he went on to cite authority to the effect that mere unreasonableness of itself is not enough to justify application of the absurdity rule. Again, we agree with him that the authorities justify this distinction. The Court of Appeal concluded that the absurdity resulted from the mistaken omission of certain words from the rent review clause and, consequently, construed the clause as though the words mistakenly omitted were included in its provisions. Tanzone was applied by the South Australian Full Court in Dockside Holdings Pty Ltd v Rakio Pty Ltd (2001) 79 SASR 374; [2002] ANZ ConvR 217 where an absurd result in the operation of the rent review provisions was the result of a drafting error identified by the court. As in Tanzone the lease was construed without an order for rectification ‘as if it said’ something different (see [51]); and also in Callaghan v Merivale CBD Pty Ltd [2006] ANZ ConvR 114; (2006) NSW ConvR ¶56-155. General guidelines on the construction of rent review clauses are provided in British Gas Corp v Universities Superannuation Scheme Ltd [1986] 1 WLR 398, guidelines which were approved by the Court of Appeal in Equity & Law Life Assurance Society plc v Bodfield Ltd [1987] 1 EGLR 124 and Basingstoke and Deane Borough Council v Host Group Ltd [1988] 1 WLR 348 and also Arnold v National Westminster Bank plc [1990] Ch 573 at 587; and British Airways PLC v

Heathrow Airport Ltd [1992] 1 EGLR 141 at 144 (per Mummery J), referring to the ‘starting point and guiding principle’ enunciated in Basingstoke (at [1988] 1 WLR 353), being the intention of the parties as expressed in the rent review clause having regard to the language used, construed in the context of the whole document and the ‘matrix of material surrounding circumstances’, and the normal commercial purpose of such provisions. The judgment of Mummery J in this respect was referred to with approval in Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 (CA). However, it is for the court to construe the particular rent review clause in each case: Equity & Law Life Assurance Society plc v Bodfield Ltd (1987) Times, 21 March (CA). See also Charmer Electrical Pty Ltd v Minda Inc (1990) 55 SASR 112 at 122–3 (FC); Western Australian Trustees Limited v Poon; Perpetual Trustee Co Ltd v Crooks Michell Peacock Stewart Pty Ltd; Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 at 570–1 (as to construction); and Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) (parol evidence); and see [6.3]. In terms of general approach, a court is obliged to give a sensible [page 352] construction to commercial contracts, which include rent review provisions in leases of commercial premises: see Perpetual Trustee Co Ltd v Crooks Michell Peacock Stewart Pty Ltd at 5 BPR 11,869 (per Kirby P); and Western Australian Trustees Ltd v Poon at 6 WAR 80 (per Malcolm CJ) referring to Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437; but as is illustrated by the decision of the Queensland Court of Appeal in Leisure Resort Holdings Pty Ltd v Leisure Resort Group Pty Ltd (Fitzgerald P, Dowsett and White JJ, 13 December 1996, unreported), referring to Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 109 (per Gibbs J), it is not necessary to rely upon this approach to construction unless there can be identified any ambiguity or difficulty in construction; and in this case the court could identify none with respect to the variable rent formula. Where words in a rent review clause are capable of bearing more than one meaning the court is

entitled to have regard to the context and commercial purpose of the rent review provisions for the purpose of choosing between possible meanings: see Nortel Australia Pty Ltd v Portfolio Leasing Australia Ltd (1998) 8 BPR 15,857. See also [6.11]. As to rental valuations with particular respect to lease incentives of various kinds, see Squirrell and Hockley, ‘Lease Incentives and Rental Valuations’ (1993) 1 APLJ 31. In considering the treatment of lease incentives Bryson J said in New South Wales v SAS Trustee Corporation (1997) NSW ConvR ¶55829 (at 56,488): On general principles an incentive will not necessarily lead a valuer to make an adjustment for a determination of market rent. A small incentive may be nominal and have no bearing on rental valuation, while a large incentive may conceivably be of a capital nature and have no bearing on the market rental valuation for that reason. These general principles do not apply to a rent review. See also the discussion in this case of the expressions ‘face rental’ and ‘effective rental’. See also Capel Services Ltd v Legal and General Assurance Society Ltd (SC(Vic), Beach J, 23 October 1984, unreported); Woolworths Ltd v Merost Pty Ltd (1988) 14 NSWLR 300; Western Australian Trustees Ltd v Poon (1991) 6 WAR 72 (FC); IBM Australia Ltd v MEPC Australia Ltd [1991] 1 Qd R 201; Perpetual Trustee Co Ltd v Crooks Michell Peacock Stewart Pty Ltd (1992) 5 BPR 97,415 (CA); Land Securities plc v Westminster City Council [1993] 1 WLR 286; Wickham Properties Pty Ltd v Astor Motel Pty Ltd [1994] 1 Qd R 211 (FC); Re McCafferty [1994] 2 Qd R 538 (FC) as to matters to which a valuer should have regard in the context of rent review valuations. Where a lease made provision for rent review by reference to the valuation of the leased premises for rental purposes by the Valuer-General, it was held that the reference to ‘valuation for rental purposes’ in the rent review clause meant that the valuer was to determine the value of the property for the purposes of rental for the permitted use or uses under the lease, rather than a valuation of the property unencumbered by

[page 353] the lease and for its highest and best use: see BBC Hardware Ltd v Payce Properties Pty Ltd (2000) 50 NSWLR 66 (CA); and see ADC Buildings Pty Ltd v Barana Properties (No 1) Pty Ltd (2005) 12 BPR 23,717; (2006) NSW ConvR ¶56-144 (CA). Subject to the terms of the lease the valuation process does not generally involve speculation in relation to future events. Thus, in R & A Dalley & Co Pty Ltd v Giex Pty Ltd (1991) 5 BPR 11,554 McClelland J said (at 11,556): I do not, however, consider that a valuation of the true market rental value of premises as at a specified date can properly involve a consideration of actions which the owner or lessor of the premises might decide to take subsequent to that date to improve or otherwise alter the state or condition of the premises. Neither can later ‘extraneous events’ affect the proper interpretation of the lease for the purposes of a rental valuation, as this process of interpretation is limited to considering what was in contemplation at the time the lease was executed: see Bank of South Australia v SA Health Commission. In relation to the use of lower and upper ‘caps’ in rent review provisions, see Robert MC Brown & Partners Pty Ltd v Permanent Trustee Co Ltd [1996] ANZ ConvR 468; (1996) NSW ConvR ¶55-792 (CA), and also note the discussion of the terms ‘rental value’ and ‘annual market rental value’. The treatment of improvements to leased premises for the purpose of determining market rental value of the leased land under Crown lands legislation (Land Act 1958 (Vic)) was considered in Dominion Taylor Wood Auctioneers Pty Ltd v Mandat (1997) V ConvR ¶54-558 (CA); and, similarly, see 33 Bank Street Nominees Pty Ltd v Citipower Pty Ltd (SC(Vic), Beach J, 16 June 1997, unreported). The market rental may be affected by the presence or absence of lease provisions which require the tenant to reinstate the leased premises to its original condition, particularly in circumstances where the tenant has made significant alterations or modifications to the leased premises: see Commonwealth v Wawbe Pty Ltd. As to determination of ground rent, see Australian Maritime Safety Authority v Quirk (1998) NSW ConvR ¶55-858. The rent review provisions of the lease may require the valuer to proceed on the basis of a hypothetical situation and

to assume, among other things, that there remains an open market for the property in spite of the hypothesis: see Alcatel Australia Ltd v Scarcella. It has been noted, with respect to the construction of rent review clauses, that it is not the function of the court to usurp that of the valuer. Thus, in Alcatel Stein JA (with whom the other members of the court agreed in this respect) said, adopting the statement of Mummery J in British Airways PLC v Heathrow Airport Ltd [1992] 1 EGLR 141 at 144: ‘… It is not, however, the function of the court to answer questions or give general directions as to how the independent valuer should go about making his valuation, such as the factors to be taken into account or the weight to be attached by him to those factors …’. As to the resolution of ongoing issues or disputes with respect to the operation of rent review provisions under a long-term lease using a review board, see Australian Pacific Airports (Melbourne) Pty Ltd v Nuance Group (Aust) Pty Ltd (2005) V ConvR ¶54-699 (per Hansen J); [2005] VSCA 133; BC200503467 [page 354] (CA). Nevertheless the proper construction of the rent review clause may be critical in establishing the basis for valuing the premises for rental purposes: see Dukeminster (Ebbgate House One) Ltd v Somerfield Property Co Ltd [1997] 40 EG 157 (CA); (1997) 74 P & CR D 37 (CA), with respect to ascertainment of the reviewed rent with respect to ‘notional’ premises. In relation to the calculation of time limits and time periods for the giving of rent review notices, see, for example, First Property Growth Partnership v Royal & Sun Alliance Property Services Ltd [2003] 1 All ER 533 (CA), particularly in relation to the meaning of the word ‘before’. Generally, as to the various bases and processes of rent review, by valuation or otherwise, see D Clarke and J Adams, Rent Reviews and Variable Rents, 3rd ed, Oyez Longman, London, 1990; K Reynolds and G Fetherstonhaugh, Handbook of Rent Review, Sweet and Maxwell, London, looseleaf; R Whipple, Commercial Rent Reviews Law and Valuation Practice, LBC, 1986; and A Hyam, The Law Affecting Rent Review Determinations, 2nd ed, Federation Press, 2014.

Rent review notices [11.9] In general terms care should be taken to ensure that any notice is (1) in the correct form (if any); (2) addressed to the correct person or persons; and (3) served on such person or persons in accordance with the terms of the lease and any statutory provisions with respect to service of documents that may be applicable. See, for example, Conveyancing Act 1919 (NSW) s 170; Property Law Act 1958 (Vic) s 198; Transfer of Land Act 1958 (Vic) s 113; and Corporations Law s 220 (with respect to bodies corporate subject to its provisions). The notice must adequately refer to the increase in rent in accordance with any criteria referred to in the lease and, as a general proposition, clearly indicate the extent of the rent increase sought: see Saloma Pty Ltd v Big Country Developments Pty Ltd (1997) 8 BPR 15,935. The validity of a notice of a new rent assessment was considered in Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC; (2007) ANZ ConvR 93. The Court (Kiefel, Sundberg and Edmonds JJ) considered that the trial judge had applied the correct test for determining the validity of such a notice but had erred to the extent that the test had not been applied on the basis that the recipient of the notice should be taken to have knowledge of the critical lease provisions. As to the initial aspect of the test, the court said: [18] The focus of his Honour’s reasons was therefore the clarity of the notice and what it could be taken to convey to a party in the position of Lactos Fresh. His Honour stated the test derived from Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 (‘Mannai’) to be: [page 355] 129 The test to be applied to determine the validity of the notice is whether a reasonable recipient, who is credited with knowledge of the terms of the lease, and taking into account

the surrounding circumstances, would have doubt as to the meaning of the notice or have regarded it as equivocal. If so, the notice will be found to be invalid. His Honour observed that the test has since been repeatedly applied in English and Australian courts. As to the effect of knowledge, of the effect of the notice and of the critical lease provisions, the court continued: [24] A court might decline relief where it is shown that a party was not in fact misled by a ‘trigger’ notice, although they had argued that they were. This point should however rarely be reached if regard is had to how a reasonable person, having knowledge of the terms of the lease, would read the notice. The knowledge which such a person is assumed to have is of some importance on this appeal. [25] Lord Steyn in Mannai said that the inquiry is ‘what reasonable persons, circumstanced as the actual parties were, would have had in mind’ (at 768). His Lordship went on: … It follows that one cannot ignore that a reasonable recipient of the notices would have had in the forefront of his mind the terms of the leases. Given that the reasonable recipient must be credited with knowledge of the critical date and the terms of clause 7(13) the question is simply how the reasonable recipient would have understood such a notice … Further observations may be added in connexion with the approach to be taken to what a notice is likely to convey. The courts often point out that the process of construction is not one by which lawyers might dissect its terms or place particular emphasis upon parts of it in order to prove ambiguity. As Lord Clyde pointed out in Mannai (at 782), perfect precision is not required: ‘It is not an absolute clarity or an absolute absence of any possible ambiguity which is desiderated’. The courts also bear in mind that these are commercial provisions and the notices are directed to commercial people (see for example Patel v Earlspring Properties Ltd [1991] 2 EGLR 131 at 132; Lex Services PLC v Oriel House BV [1991] 2 EGLR 126 at 126).

Where the lease has been assigned by the lessee it is generally sufficient to serve any notice required to institute a rent review on the assignee only, even though, on a proper construction of the lease and assignment, the assignor is guarantor of the assignee for the rent: see Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 (FC). In Centrovincial Estates plc v Bulk Storage Ltd [1983] 2 EGLR 45 (CA) it was held that an agreement between the landlord and assignees as to rent review was binding on the original tenants who were liable to pay rent at the reviewed rate, in default by their assignees. Similarly, a rent review would appear to be binding upon a guarantor of the obligations of the original tenant even though the lease has been assigned, but subject to the terms of the guarantee: Selous Street Properties Ltd v Oronel Fabrics Ltd (1984) 270 EG 643, 743 (QB). Any notice purportedly given to trigger a rent review clause must make it clear to the tenant that this is its effect: Shirlcar Properties Ltd v Heinitz [1983] 2 EGLR 120 (CA). A rent review notice marked ‘without prejudice’ [page 356] is not privileged, not having been written in the course of a dispute or negotiations: Norwich Union Life Insurance Society v Tony Waller Ltd [1984] 1 EGLR 126 (Ch); but the words of the particular notice were held to be equivocal and thus it was ineffectual. It is a matter of construction of the rent review provisions of the lease to determine whether time is of the essence with respect to the landlord’s notice instituting a rent review or the tenant’s counter notice: see Highpoint Homemaker Centre (Vic) Pty Ltd v Sanstar Pty Ltd [1997] ANZ ConvR 170; (1997) V ConvR ¶54-564 (CA); and see GDH Pty Ltd v Wayne [2001] QSC 73; and Callaghan v Merivale CBD Pty Ltd [2006] ANZ ConvR 114; (2006) NSW ConvR ¶56-155; and, in relation to time limits and rent review clauses, see [11.6].

Retail or commercial tenancies legislation [11.10] There are special provisions with respect to rent review in the legislation dealing specifically with retail or commercial premises in various

states. Nevertheless, the general principles of law discussed above underpin this legislation. Reference should be made to Chapters 23–27 in this respect.

Contribution [11.11] As to the right to obtain contribution from the co-tenant where one tenant pays the whole of the rent, see Commonwealth-Reid v Public Trustee [1944] KB 602; 2 All ER 6.

Payment of rent after notice to quit [11.12] The consequence of payment and acceptance of rent after the expiration of the notice to quit is discussed at [20.32].

Occupation pending completion of sale [11.13] A purchaser who has entered into possession of land with the consent of the owner pending completion of the contract of sale (or a former lessee who continues in occupation after he or she has exercised his or her option to purchase the subject land) may not be bound to pay rent between the date of so taking possession and the completion of the contract of sale: Sanders v Cooper [1974] WAR 129.

Tender of rent [11.14] Where the lessee has a good defence of tender, he or she cannot be said to have failed to pay the rent; otherwise, where he or she has a defence of set-off: Ford v Centenary Investments Pty Ltd [1957] VR 288; Ex parte Goodwin; Re Read [1971] 1 NSWLR 461; see also [17.18] as to the effect of a tender and an acceptance of rent after forfeiture. [page 357]

Covenant to pay rent a usual covenant [11.15] An agreement for a lease may expressly provide that the lease shall contain the usual covenants. If the agreement says nothing as to covenants, the result will be the same, for the law will imply that the lease shall contain only the usual covenants. The covenants which have been held to be usual include a covenant by the tenant to pay rent, with a proviso for re-entry for nonpayment of rent: Bennett v Womack (1828) 3 Car & P 96; 172 ER 339; Hodgkinson v Crowe (1875) LR 10 Ch 622; see also Chapter 11.

Action for rent [11.16] The extent to which the defendant lessee can rely on the lessor’s breach of a repairing covenant or other covenants by way of set-off is considered in [7.4]; as is the distinction between an equitable set-off and a right of recoupment: and as to the latter, see particularly Carrathool Hotel Pty Ltd v Scutti (2006) NSW ConvR ¶56-132 at 59,581–2, [62] and [63] (per White J). The circumstances when the landlord may recover double the yearly value of the demised land is discussed in [17.17]. This paragraph also discusses when double rent may be recovered. As to recovery of rent by a mortgagee, see [5.16], [7.4] and [15.20]. In circumstances where the landlord may elect to accept the tenant’s repudiation of the lease or keep the lease on foot and the landlord elects to keep the lease on foot, there is no duty to mitigate in an action against the tenant for non-payment of rent: see Tall-Bennett & Co Pty Ltd v Sadot Holdings Pty Ltd (1988) 4 BPR 97295 (SC(NSW), Young J); and De Landgrafft v Brown (1993) 9 SR (WA) 236 (Dist Crt, Keall J); and see [16.26] as to the termination of leases by acceptance of repudiation. It follows that in normal circumstances, where the lease is clearly on foot, the landlord is under no duty to mitigate. Issues in relation to mitigation should not be confused with the tenant’s right to a set-off, where that right exists: see [7.4]. Mitigation issues merely determine the extent of the landlord’s claim that may be the subject of a set-off. An action for recovery of rent is subject to limitation of actions legislation but where an action would otherwise be statute barred it will be saved by an acknowledgement by the tenant; and time will begin to run again from the date of the acknowledgement for the

purposes of the statute: see Merdigate Nominees Pty Ltd v Fetterplace (SC(Vic), Beach J, 29 April 1998, unreported, BC9801745).

Liability for rent damages after abandonment of possession [11.17] Situations arise where the lessee relinquishes possession of the demised premises prior to the expiration of the lease and the question then arises of what rights, if any, does the lessor have to claim rent or damages with respect to the balance [page 358] of the term? The answer to this question will depend principally on what the lessor does with the premises after they have been so abandoned. (The acts which constitute abandonment are discussed in [16.18].) The lessor can choose not to re-let the premises, in which case the lessee remains liable for the rent and the lessor is under no duty to mitigate his or her loss by reletting: Hughes v NLS Pty Ltd [1966] WAR 100; 120 CLR 583; 40 ALJR 292; Maridakis v Kouvaris (1975) 5 ALR 197; see also Goldhar v Universal Sections & Mouldings Ltd (1963) 36 DLR (2d) 450; Highway Properties v Kelly Douglas & Co Ltd (1971) 17 DLR (3d) 710; see also the article by A Bradbrook, ‘Role of the Judiciary in Reforming Landlord and Tenant Law’, in (1976) 10 MULR 459 at 475–6 and the case note by G Teh in (1975) Monash ULR at 115–19. Also, see the article ‘Application of the Principle of Mitigation of Damages to Landlord–Tenant Law’, by A Bradbrook in (1977) 8 Syd L Rev 15. The lessor who adopts such a course is entitled to change the locks in order to protect the property: Relvok Properties v Dixon (1973) 25 P & CR 1. If, however, the lessor accepts the abandonment of the premises by the lessee and re-lets them, then such act on his or her part will probably put an end to the original letting. In such circumstances there is a surrender by operation of law, as to which see [16.17] and [16.18]. If the new letting is at a rent which is less than the amount which the former lessee had to pay, then the question arises

whether the lessor can claim such loss by way of damages or in an action for arrears of rent, from the original lessee. On this point, the authorities were, until recently, far from clear. In Hughes v NLS Pty Ltd [1966] WAR 100 and NLS Pty Ltd v Hughes (1966) 120 CLR 583; 40 ALJR 292, the lessee under a lease for a term of years at a calendar monthly rental of $369 repudiated its obligation under the lease and vacated the premises. The lessor re-let the premises for the balance of the 10-year term at the weekly rent of $26 which was the best rent then procurable. The lessor brought an action wherein he claimed $488 for arrears of rent up to the date of re-letting and $22,814 as damages for loss of future rent after the date of re-letting. The trial judge, Jackson J, awarded $19,870 under the second head, an appropriate discount having been agreed upon by the parties to take account of the immediate payment of a future economic loss. On appeal to the High Court only two grounds of appeal were argued; both failed. The first concerned illegality, and is irrelevant here. The second was that a provision in the lease for ‘security money’ of $600 limited the lessee’s liability. The judgments in the High Court referred to the lessee’s having repudiated the lease, but do not deal with the question of the mode of determination; this is not surprising, having regard to the grounds of appeal which were argued. The report of the proceedings at first instance, [1966] WAR 100, shows that Jackson J rejected an argument that the re-letting was the acceptance of a surrender which prevented the recovery of damages for loss of future rent. His Honour apparently accepted the view that there had been a surrender but held that the lessor could after the surrender recover damages representing the loss of future rent. On the other hand, in Maridakis v Kouvaris (1975) 5 ALR 197, the plaintiff could not recover loss of rent for the period after the surrender. In that case [page 359] the tenant entered into a lease for a two-year term commencing on 21 April 1972 at a weekly rent of $100. The lessee abandoned the premises in May 1972 and the lessor sought to re-let them shortly thereafter, but was unsuccessful until August 1973. Ward J held that until the lessor had re-let the premises in August 1973 there had been no acceptance by him of a surrender,

with the result that the tenancy survived until that time, thereby entitling him to claim the full amount of rent as arrears between May 1972 and August 1973. By re-letting the premises in August 1973, the lessor accepted the tenant’s act and, consequently, there was as at that date a surrender of the lease by operation of law. His Honour held that the landlord was not entitled to damages which he claimed for the period after August 1973 (such damages being the shortfall in the rent) because no such damages could be recovered once a surrender by operation of law has arisen. There does, therefore, seem to be a conflict between the two cases, although it should be noted that in the Hughes case the plaintiff brought his claim in damages (which in amount corresponded to the loss of rent after surrender), whereas in Maridakis v Kouvaris the plaintiff’s claim for a similar period was made by way of arrears of rent. It is unlikely that such a distinction can satisfactorily reconcile the different approaches to this issue in these cases. In the second edition of Brooking and Chernov, Tenancy Law and Practice, Victoria, para 129 this discussion could only be concluded with the comment: It may be that the lessor’s prospects of successfully claiming for loss of rent after surrender, however it may be framed, will depend upon whether the courts will accept the proposition that the abandonment by the tenant amounts to a repudiation which is capable of being accepted by the lessor and if accepted, will bring the term to an end and will entitle him (as the innocent party) to claim damages for loss of bargain. Following the High Court decision in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 and the decision of the New South Wales Court of Appeal in Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 (and the other cases considered in [16.26]) it is now clear that a lessor is entitled to damages for loss of the lease provided conduct amounting to a repudiation can be established and the repudiation is accepted prior to any conduct which the law regards as an election to affirm the lease in spite of the repudiation. As the damages are contractual, for loss of the lease, the lessor has a duty to mitigate its loss. As to determination of leases by acceptance of repudiation and related issues, including damages and mitigation, see [16.26]. It should be noted that in some instances commercial leases provide for a significant shortening of the lease term in the event of a provision of the lease

which it specifies as an essential or fundamental term (that is, a breach of condition: see [16.34]). Whether the shortening of the lease term is automatic in such an event or at the lessor’s option, it may have the effect of all but nullifying any advantage a lessor may enjoy by accepting repudiatory conduct and suing for loss of bargain — as the contractual damages for loss of the lease will only apply to the shortened term. In other words, the lessor’s position will, in effect, be as set out in this paragraph without [page 360] any valuable right to seek contractual damages. However, it seems that the result will depend very much on the drafting of the particular lease provision. In Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA), Jackson J said (at 335–6): Where a lessee wrongfully repudiates the lease during its term and the lessor accepts the repudiation, the fact that the lessor’s proprietary interest in the property lessens or changes after the repudiation is not of itself a factor to be taken into account in assessing damages. Damages are compensation for loss of bargain and are assessed at the date of breach. Evidence of subsequent events is admissible only if it throws light on the extent of damage suffered: Nangus Pty Ltd v Charles Donovan Pty Ltd [[1989] VR 184]. See also [16.32].

Illegality [11.18] In Shaw v Groom [1970] 1 All ER 702; [1970] 2 QB 504, a landlord was held to be entitled to recover rent notwithstanding his failure to provide a proper rent book as required by statute. On the other hand, in T P Rich Investments Pty Ltd v Cauldron [1964] NSWR 709; (1964) 38 ALJR 43n, an action for rent failed where it was found as a fact that the landlord knew that the tenant’s use of the premises would be unlawful in that they did not comply with the requirements of an ordinance under the Local Government

Act with respect to construction of exits and staircases. The consequences of illegality were also considered by Gillard J in Holidaywise Koala Pty Ltd v Queenslodge Pty Ltd [1977] VR 164 at 170–6.

Rent period as evidence of nature of tenancy [11.19] The period by reference to which rent is fixed affords some evidence of the nature of the tenancy: see [2.6].

Determination of rent by a third person [11.20] If rent is to be determined by a third person, the agreement will ordinarily be an agreement for valuation or appraisement, not arbitration, the intention being that the valuer should make his or her valuation according to his or her own skill, knowledge and experience: Re Dawdy (1886) 53 LT 800; Eads v Williams (1854) 24 LJ Ch 531; [1843–60] All ER Rep 917; Bottomley v Amber (1878) 38 LT 545; see also [14.7]. As the cases referred to in this paragraph indicate, the valuer must determine the rent in accordance with the provisions of the lease which, among other things, may in addition to the requirement that the valuer exercise his or her expert skill and judgment in accordance with relevant valuation principles require the valuer to have regard to certain matters and disregard others. The provisions of the lease may also, [page 361] expressly or by implication, prescribe the basis of valuation and the scope of enquiry required. Thus, in Colin Marg Pty Ltd v Mackay Medical Investment Ltd [2006] QSC 181; [2007] 1 Qd R 303; (2006) ANZ ConvR 492; (2006) Q ConvR ¶54-657 it was held that the terms of the lease required a valuation on a ‘subjective basis’ rather than on an ‘objective basis’ — ‘that is, what he should have determined was the rent payable under the particular lease between the particular parties (which included the permitted use being that of a health and fitness centre), and not the market rent between a lessor and a

lessee who were hypothetically at arms’ length’ (Wilson J at [8]). As to the construction of rent review clauses, which is critical in this respect, see [11.8]. The lease can, of course, provide in terms or by necessary implication that the rent will be determined by arbitration: see, for example, Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505 and Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; and see [11.8]. Disagreements between two valuers engaged as part of the rent determination process may be resolved by recourse to an umpire, but the lease provisions establishing this process must be considered and applied with care: see Heaps v Addison Wesley Longman Australia Pty Ltd [1999] NSWSC 1093 (per Austin J). As to the binding nature of a valuer’s assessment, and the importance of complying with the formalities required on a proper construction of the rent review clause for the appointment of a valuer, see Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455; [1983] 1 VR 657 at 670. The valuers were held not to have been validly appointed because there had been no notification of the appointment of each to the party other than the appointor. The High Court reached this decision on the basis of a long line of authorities which established that the appointment of a third person by one party to an agreement to do something that is contractually binding on another party to the agreement is, subject to the terms of the agreement, generally only effective when the identity of that third party has been communicated to the other party (153 CLR at 470–2). Although it is not clear from the cases how far valuations are reviewable by the courts, it does seem, following the High Court decision in Gollin and the Privy Council advice in A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1986) 66 ALR 70 (on appeal from New South Wales), that the position is that speaking valuations (those in which the valuer’s reasons appear on the fact of the valuation) are reviewable: see also Mayne Nickless Ltd v Solomon [1980] Qd R 171; Wamo Pty Ltd v Jewel Food Stores Pty Ltd (1983) 1 BPR 9611 (SC(NSW)); Capel Services Ltd v Legal and General Assurance Society Ltd (SC(Vic), Beach J, 23 October 1984, unreported); Woolworths Ltd v Merost Pty Ltd (1988) 14 NSWLR 300; Western Australian Trustees Ltd v Poon (1991) 6 WAR 72 (FC); Wickham Properties Pty Ltd v Astor Motel Pty Ltd [1994] 1 Qd R 211 (FC); R & A Dalley & Co Pty Ltd v Giex Pty Ltd (1991) 5 BPR 11,554; [1992] ANZ ConvR 358; (1991) NSW ConvR

¶55-605; Strang Patrick Stevedoring Pty Ltd v James Patrick and Co Pty Ltd (1993) 32 NSWLR 583; Bank of South Australia [page 362] v SA Health Commission (1996) 65 SASR 409; [1996] ANZ ConvR 559; and Caltex Oil (Australia) Pty Ltd v Baltis (1981) 2 BPR 9674 (SC(NSW)) as to the proper function of an umpire in this context. Nevertheless, as the authorities indicate, the courts are reluctant to interfere with a valuer’s decision too readily. Thus, in Commonwealth v Wawbe Pty Ltd (1999) ANZ ConvR 597; (1999) V ConvR ¶54-599 Gillard J said: [13] The plaintiff submits that the valuer’s decision should be set aside on the ground of mistake. The law has for many years recognised the right of a contracting party to challenge the decision of an expert certifier who has been entrusted with making a decision pursuant to the contract between the parties. [14] It is well established in the absence of fraud or collusion, a court should be slow to interfere with a decision made by an expert valuer pursuant to an authority given him by the contract. [15] In A Hudson Pty Ltd v Legal and General Life of Australia (1986) 61 ALJR 280 the Privy Council at p. 281, after referring to an attack upon the terms of a valuer’s report observed — In general their Lordships consider that it would be a disservice to the law and to litigants to encourage forensic attacks on valuations by experts where those attacks are based on textual criticisms more appropriate to the measured analysis of fiscal legislation. [16] Much the same observations can be made when an attack is made upon a valuer’s interpretation of the contract which gives him the authority to make the valuation. [17] The reasons are obvious. The parties to a contract agree that the value is to be determined by an expert acting as such and using his

own skill, judgement and experience. He is not a lawyer. His authority derives from the contract. The terms of the contract are to be considered by him. It would be contrary to the parties’ common intention to expect the valuer to construe the contract and apply it as a court would. The parties have entrusted the task to an expert valuer, not a lawyer. They must be taken to accept the determination ‘warts and all’ and subject to such deficiencies as one would expect in the circumstances. The parties put in place the procedure, they must accept the result unless it would be contrary to their common intention. [18] In Baber v Kenwood Manufacturing Co Ltd and Anor (1978) 1 Ll R 179 Lawton LJ said at p. 181 — They (the auditors) were to be experts. Now experts can be wrong; they can be muddle headed; and, unfortunately, on occasions they can give their opinions negligently. Anyone who agrees to accept the opinion of an expert accepts the risk of these sorts of misfortunes happening. What is not acceptable is the risk of the expert being dishonest or corrupt. [19] However, the law does recognise that a valuation may be challenged and held not binding on the ground of mistake. However, what type of mistake is a question involving some controversy. [20] It is clear — (i) that if there is fraud collusion or improper motive on the part of the valuer the determination does not bind the parties; [page 363] (ii) that the basis for any challenge must be found in the terms of the contract between the parties. Gillard J then turned to consider the authorities as to the type of mistake that would justify setting aside the valuer’s determination, referring to Karenlee Nominees Pty Ltd v Gollin and Co Ltd (1983) 1 VR 657 (FC) at 668 and

following; Gollin and Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455; and Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16 at 21 and, in conclusion, to the following statement of the law: [37] The starting point for any consideration of the modern law is to be found in what Lord Denning MR said in Campbell v Edwards (1976) 1 WLR at p. 407 when he said — It is simply the law of contract. If two persons agree that the price of property should be fixed by a valuer on whom they agree, and he gives that valuation honestly and in good faith, they are bound by it … if there were fraud or collusion, of course, it would be very different. Fraud or collusion unravels everything. (Quoted with approval in Karenlee supra at p. 670.) [38] In Legal and General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314 the Court of Appeal was concerned with a valuer’s decision and whether it should be set aside on the ground of mistake. One of the three judges, McHugh JA, considered the principles that should be applied and summarised them at p. 335 as follows — This review of the authorities shows that this branch of law has been subject to much difference of opinion over the last thirty years. Moreover, much of the discussion appears to have proceeded upon the assumption that at least the general proposition espoused by Sir John Romilly MR, in Collier v Mason [(1825) 25 Beav 200; 53 ER 613] can be applied to both legal and equitable remedies. With respect, I think that this is a mistake. Only one decision (Jones v Jones [(1971) 1 WLR 840]), however, has resulted in a valuation being set aside by the application of what I regard as a wrong principle. The preferable course, in my opinion, is to restate the law on the matter in accord with what I believe is its correct basis. In my opinion the question whether a valuation is binding upon the parties depends in the first instance upon the terms of the contract, express or implied. This was pointed out by Sir

David Cairns in the Court of Appeal in Baber v Kenwood Manufacturing Co Ltd ([(1978) Lloyd’s Law Reports 179] at 181). A valuation obtained by fraud or collusion can usually be disregarded even in an action at law. For in a case of fraud or collusion the correct conclusion to be drawn will almost certainly be that there has been no valuation in accordance with the terms of the contract. As Sir David Cairns pointed out, it is easy to imply a term that a valuation must be made honestly and impartially. It will be difficult, and usually impossible, however, to imply a term that a valuation can be set aside on the ground of the valuer’s mistake or because the valuation is unreasonable. The terms of the contract usually provide, as the lease in the present case does, that the decision of the valuer is ‘final and binding on the parties’. By referring the decision to a valuer, the parties agree [page 364] to accept his honest and impartial decision as to the appropriate amount of the valuation. They rely on his skill and judgment and agree to be bound by his decision. While mistake or error on the part of the valuer is not by itself sufficient to invalidate the decision or the certificate of valuation, nevertheless, the mistake may be of a kind which shows that the valuation is not in accordance with the contract. A mistake concerning the identity of the premises to be valued could seldom, if ever, comply with the terms of the agreement between the parties. But a valuation which is the result of the mistaken application of the principles of valuation may still be made in accordance with the terms of the agreement. In each case the critical question must always be: Was the valuation made in accordance with the terms of a contract? If it is, it is nothing to the point that the valuation may have proceeded on the basis of error or that it constitutes a gross over or under value. Nor is it

relevant that the valuer has taken into consideration matters which he should not have taken into account or has failed to take into account matters which he should have taken into account. The question is not whether there is an error in the discretionary judgment of the valuer. It is whether the valuation complies with the terms of the contract. Furthermore, when a party seeks the assistance of equitable remedies to enforce an agreement to abide by the valuation of a third party, mistake, fraud or collusion can be a defence to the action in certain circumstances: Collier v Mason; Weekes v Gallard. But those equitable defences are not available when the plaintiff seeks a common law remedy. To hold otherwise is to become a victim of ‘the fusion fallacy’ which Messrs Meagher QC, Gummow and Lehane so roundly condemn: Equity, Doctrines and Remedies, 2nd ed (1984) at 44–58. Of course, defences of fraud, collusion or mistake may be available when a common law remedy is sought. But that is because the express or implied terms of the contract permit them. The defences of which Sir John Romilly MR spoke in Collier v Mason were equitable defences to an equitable remedy. They are not available in a common law action. [My emphasis] [39] In my respectful opinion, what his Honour has written states the law. I respectfully agree that in the end it is a question whether the valuation complies with the terms of the contract. [40] What his Honour wrote has been followed on a number of occasions — see Woolworths Ltd v Merost Pty Ltd (1998) 14 NSWLR 300 at 303; Strang Patrick Stevedoring Pty Ltd v James Patrick & Co (1993) 32 NSWLR 583 at 586 and Skiperch Pty Ltd v Mocom Systems Pty Ltd, per Hayne J, delivered 15 March 1995. [41] When that case went to the Privy Council the Judicial Committee declined to consider what type of mistake could be the basis for declaring a valuation not binding on the parties. Their Lordships said — There being no discernible mistake in the valuation their

Lordships are not concerned to consider the kinds of mistake which might justify interference by the court with the valuation of an expert. — supra [(1986)] 61 ALJR 280 at p 281. [page 365] [42] The Court of Appeal in England reconsidered the principles in 1989 in a case which was not reported until 1992. [43] In Jones v Sherwood Computer Services 121c (1992) 1 WLR 277, Dillon LJ considered the recent English authorities and stated at p. 287 — On principle, the first step must be to see what the parties have agreed to remit to the expert, this being, as Lord Denning said in Campbell v Edwards (1976) 1 WLR 403 at 407, a matter of contract. The next step must be to see what the nature of the mistake was, if there is evidence to show that. If the mistake made was that the expert departed from his instructions in a material respect — eg if he valued the wrong number of shares, or valued shares in the wrong company, or if, as in Jones v Jones (1971) 1 WLR 840, the expert had valued machinery himself whereas his instructions were to employ an expert valuer of his choice to do that — either party would be able to say that the certificate was not binding because the expert had not done what he was appointed to do. [44 The trend of the authorities establish that the mistake must be of a kind which demonstrates that the valuer did not perform his task as required by the contract making allowance for the fact that the valuer in construing the agreement, where necessary, is a valuer and not a lawyer. See also Kanivah Holdings Pty Ltd v Holdsworth Properties Pty Ltd (2002) 11 BPR 20,201 (CA) where the judgment of McHugh JA in Legal and General

Life of Australia v A Hudson Pty Ltd was applied, with some further comments by way of clarification. Stein JA (with whom Beazley JA agreed) said: [48] As Mason P observed in Holt v Cox (1997) 23 ACSR 590 at 595 the reasoning of McHugh JA has been frequently followed with approval. [49] Mason P said: A close reading of McHugh JA’s judgment in Legal & General indicates that his Honour was not propounding the view that a valuation will stand regardless of error. Rather he was making the point that mistake is not itself a ground of vitiation: see also Wamo Pty Ltd v Jewel Food Stores Pty Ltd (1983) ANZ ConvR 50. A valuation may contain factual error or embody consideration of matters which should not have been taken into account, but it does not follow that the result is outside that which the contract contemplated would be within the realm of determination by the valuer. As McHugh JA makes plain, ‘in each case the critical question must always be: Was the valuation made in accordance with the terms of [the] contract? If it is, it is nothing to the point that the valuation may have proceeded on the basis of error or that it constitutes a gross over or under value’ (emphasis added). [50] As McHugh JA observed in Hudson, by providing that the decision of the valuer be final and binding, the parties agree to accept the valuer’s honest and impartial valuation. They rely on his skill and judgment. The valuation stands even if made negligently. A mistake by the valuer will only matter if it shows that the valuation was not made in accordance with the contract. His Honour made the point that even if a valuation proceeded on the basis of error, or was a gross under or over value, it matters not. Further, a failure to take account of relevant matters (or the converse) is not a vitiating mistake. [page 366]

Giles JA made further comment in the same vein, but additionally emphasising and explaining the point: [70] It is necessary to emphasise, lest others misguidedly pursue the same course as the appellant, the reasoning of McHugh JA in Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314. [71] McHugh JA states the question whether the valuation complies with the terms of the contract. Lying behind the question is that a valuer may make a mistake or arrive at an unreasonable valuation, the valuation remaining binding on the parties to the contract. [72] Ordinarily in providing for a valuation the contract will be taken to mean a valuation according to usual valuation principles, but a valuation not so made may still comply with the terms of the contract. If the contract says that the valuer is to value Blackacre, provided the valuer does so he complies with the contract, even though he does so negligently. The reasoning places what the contract says shall be done at a level of generality permitting mistake or an unreasonable value. [73] When the contract goes further and says (as here) that the valuer is to have regard to the highest and best use of the land and to usual valuation principles, the reasoning is the same. No doubt the parties expect that the valuer will correctly assess the highest and best use and correctly apply usual valuation principles. But they do not contract that he must do so in order that the valuation be binding upon them. They contract that the valuer shall have regard to the highest and best use and usual valuation principles, and the valuer can be mistaken in the regard he has. [74] There is good reason for an expert valuation clause to operate in this way. There is not necessarily one correct valuation answer, and there is certainly likely to be room for dispute. This is what the parties to the contract seek to avoid, agreeing to rely on the honest and impartial decision of the valuer but also agreeing that they will be bound even if the valuer makes a mistake in doing what the contract says shall be done. [75] The reasoning of McHugh JA must be appreciated, as much as the statement of the question. The appellant focussed on the question,

submitting that failure to arrive at the correct highest and best use and error in applying valuation principles vitiated the valuation. With the proper focus on the reasoning it can be seen that, even if there were the mistakes for which the appellant contended, they were not such that the valuation should be set aside. See also Corpco No 23 Pty Ltd v JS Hemingway Investments Pty Ltd [2003] 2 Qd R 32; (2002) Q ConvR ¶54-576 where, applying Legal & General, it was held that the valuer’s determination was not invalid merely because allowance was made for the benefit the tenant gained from exclusive use areas, which were not part of the demised premises but which it was licensed to use under the terms of the lease. The court found nothing in the terms of the lease which prohibited the valuer taking into account the benefits the tenant may derive from the exclusive use areas. Generally, as to the review of a decision of a valuer, see A Hyam, The Law Affecting Rent Review Determinations, 2nd ed, The Federation Press, Sydney, 2014, Ch 4; and see generally A Hyam, The Law Affecting Valuation of Land in Australia, 5th ed, The Federation Press, Sydney, 2014, Ch 20. [page 367] Consistently with the reluctance of the courts to interfere with valuers’ decisions they are reluctant to make declarations as to the methodology to be applied in valuations. Thus, in TXU Electricity Ltd v Commonwealth Custodial Services Ltd [2003] VSC 88, Byrne J said (at [8]): ‘… it is not the role of the Court to answer questions directed to telling the valuer how he should go about the task which has been entrusted to him as an expert’. In Trencrom Investments Pty Ltd v Caltex Petroleum Pty Ltd [2011] QSC 160, Applegarth J considered the delay to the valuation process that court interference may have as a factor carrying considerable weight. His Honour said (at [30]): If the umpire seeks direction from the Court on the issue of construction then at that stage the Court can consider the appropriate exercise of its discretion to intervene in relation to that issue, and any other issues that may be ripe for judicial determination. However, in the absence of consent of the

parties, or a request from the umpire for the assistance of the Court as to the proper construction of relevant provisions of the lease, the agreed procedure should run its course. As to the distinction between an arbitration and a valuation, and the consequences that flow from it, see M Mustill and S Boyd, Commercial Arbitration, 2nd ed, Butterworths, London, 1989, p 49, and J Sharkey and J Dorter, Commercial Arbitration, Law Book Co, Sydney, 1986, p 2. Note also the provisions of the uniform Commercial Arbitration Acts s 27, and, more broadly, see with respect to the distinction between arbitration and other processes, such as expert determination, which includes valuations, Hockley, Croft, Hickie and Ho, Australian Commercial Arbitration, LexisNexis Butterworths, 2015, [8.30]; D Jones, Commercial Arbitration in Australia, 2nd ed, Thomson Reuters, Sydney, 2013, [1420] and [4130]; Age Old Builders Pty Ltd v Swintons Pty Ltd [2002] VCAT 1489; and on appeal to the Supreme Court at first instance, Age Old Builders Pty Ltd v Swintons Pty Ltd [2003] VSC 307; and, on appeal to the Court of Appeal, Swintons Pty Ltd v Age Old Builders Pty Ltd (2005) 13 VR 381; [2005] VSCA 217; and, as to the nature of valuations as expert determinations, see, for example, Bank of South Australia v SA Health Commission. As to the resolution of ongoing issues or disputes with respect to the operation of rent review provisions under a long-term lease using a review board, see Australian Pacific Airports (Melbourne) Pty Ltd v Nuance Group (Aust) Pty Ltd (2005) V ConvR ¶54-699 (per Hansen J); [2005] VSCA 133; BC200503467 (CA). An employee of the landlord may fix the rent under the terms of the lease subject to there being objective criteria for the process: see Sandher v Ferizis (1994) 6 BPR 97,459. An arbitrator’s power to determine a rent has been held not to include a power to direct that rent should be periodically reviewed (Bracknell Development Corporation v Greenless Lennard Ltd (1981) Times, 6 May (Ch)), but the question is one of construction. [page 368]

Variation of rent

[11.21] In the well-known case of Central London Property Trust v Hightrees House Ltd [1947] KB 130 the rent under a lease was reduced because the property was not fully let on account of the war, the reduction being granted in writing but without consideration, and no period being stated as to the duration of the reduction. This was held to be a promise binding in law, because it was intended to be binding, intended to be acted on and in fact acted on. Its duration was the period for which the parties had intended it; this period was, on the evidence, only to last until the property was fully let, or substantially fully let, from which time the full rent would be payable. This decision was applied in Mitas v Hyams (1951) 2 TLR 1215; see further Combe v Combe [1951] 2 KB 215. The agreement for a rental variation may be dependent upon continued performance of some condition by the tenant, such as the provision of weekly turnover figures (see Jarre Pty Ltd v Vumbaca (No 2) (1999) NSW ConvR ¶55-902), or it may apply only until some event, such as the completion of building work by the landlord: see Fallon Street Properties Pty Ltd v Steel & Stuff Pty Ltd [2006] NSWCA 296. There is a good deal of learning on the question whether a variation of the rent involves a surrender and regrant. The authorities are discussed at [16.19]. As to the recovery of any overpayment of rent as a result of variation, see [11.3], and also [7.4]; and in relation to the operation of rental abatement provisions, see [11.3].

Liquidator and receiver [11.22] If the tenant, being a company, goes into liquidation, the landlord may not prove for future rent and at the same time keep the term outstanding: Commissioner of Stamp Duties v Brasch (1937) 57 CLR 69 at 86; [1937] ALR 246. The liability of a liquidator for rent accrued since the commencement of the winding up was considered in Re ABC Coupler and Engineering Co Ltd (No 3) [1970] 1 WLR 702. The liquidator may seek to recover damages for repudiation for the period after the lease has been terminated but can only be successful if the guarantee is cast sufficiently broadly to include repudiation damages: see Wharf Street Pty Ltd v Amstar Learning Pty Ltd [2004] QCA 256; [2004] ANZ ConvR 510.

Personal representative [11.23] It is an implied term of a periodic tenancy that the obligation to pay rent continues during the currency of the tenancy. This contractual obligation binds the tenant and his or her personal representative until such time as the tenancy is determined by proper notice or otherwise. If the tenant dies, his or her personal representative must fulfil such obligation to pay the rent, but only to the extent of [page 369] the assets in his or her hands: Youngmin v Heath [1974] 1 WLR 135. As to periodic tenancies of less than a year, see [2.13]; see also [5.18].

Common law demand [11.24] The lessor is unable to forfeit a lease for non-payment of rent without first making a common law demand for rent, unless either the lease dispenses with a formal demand or the case falls within the Supreme Court Act 1986 (Vic) s 79; see Landlord and Tenant Act 1899 (NSW) s 8. What constitutes a common law demand for rent is dealt with at [17.14].

Relief against forfeiture [11.25] Courts of equity usually granted relief against forfeiture for nonpayment of rent, the proviso for re-entry being regarded as a mere security for the payment of rent. Relief is given by the equitable jurisdiction as recognised and restricted by statute, being the Supreme Court Act 1986 (Vic) ss 79, 80, 85; see Landlord and Tenant Act 1899 (NSW) ss 8–10 (sections inserted by Supreme Court Act 1970 (NSW)); Property Law Act 1974 (Qld) ss 123–128; Landlord and Tenant Act 1936 (SA) ss 4, 5, 7, 9; Supreme Court Civil Procedure Act 1932 (Tas) s 11(14), (14a). These provisions are dealt with in Chapter 19. Relief against forfeiture can also be granted by the Victorian Civil

and Administrative Tribunal under s 89 of the Retail Leases Act 2003 but, unlike the usual position with respect to such relief, the parties in such an application must generally bear their own costs: see Croft, Hay and Virgona, Retail Leases Victoria, LexisNexis, loose-leaf, [240,025] and [240,140], and Chapter 23, below.

Distress [11.26] Traditionally, a characteristic of true rent is that it can be distrained for. Distress for rent has been abolished in most states: see above at [11.1]. Section 12 of the Landlord and Tenant Act 1958 (Vic) (which had the effect of abolishing distress for rent in that state) has since by repealed. However, distress for rent was not revived by the repeal; see Asian Pacific Building Corporation Pty Ltd v Sharon-Lee Holdings Pty Ltd [2013] VSC 11 at [24]; and see Interpretation of Legislation Act 1984 (Vic) ss 14–16; see also D C Pearce and R S Geddes, Statutory Interpretation in Australia, 8th ed, LexisNexis, 2014, [6.9]–[6.12], [6.14].

Enlargement of lease into fee simple [11.27] By s 153(1) of the Property Law Act 1958 (Vic) (see Conveyancing Act 1919 (NSW) s 134(1); Conveyancing and Law of Property Act 1884 (Tas) [page 370] s 83), a lease may be enlarged into a fee simple if no rent or any money value is payable. A yearly rent of ‘one silver penny if lawfully demanded’ has no money value (Re Chapman & Hobbs (1885) 29 Ch D 1007), but a yearly rent of three shillings (Re Smith & Stott (1883) 29 Ch D 1009) and, it seems, one shilling (Blaiberg v Kleeves [1906] 2 Ch 175), is a rent of money value. The intervention of a concurrent lease does not prevent the operation of these provisions: Wentworth Securities Ltd v Jones [1980] AC 74.

Use and occupation [11.28] In order to recover in an action for use and occupation the plaintiff must prove the existence of an agreement express or implied between him or her and the defendant to the effect that the latter shall at least be the tenant of the lands and premises occupied, at will or sufferance of the former, and shall pay for that occupation: Zegir v Woop [1955] VLR 394 (FC). In that case Herring CJ considered the basis of the action for use and occupation (at 400– 1); see also Australian Provincial Assurance Association Ltd v Rogers (1943) 43 SR (NSW) 202; Minister v Mathieson (1903) 3 SR (NSW) 298; Specktor v Lees [1964] VR 10; see also Sanders v Cooper [1974] WAR 129. A complainant cannot succeed in a magistrates’ court on a civil debt recoverable summarily for use and occupation of premises if it appears that there is a written agreement under which the defendant held, but such agreement is not tendered in evidence for want of a stamp: Specktor v Lees at 17. Where the defendant entered under an agreement for a lease which was not executed, he was held liable in an action for use and occupation: Barbour v Pinn (1870) 1 VLR (L) 222. Where a court of petty sessions adjudged the landlords entitled to possession, but deferred execution of the warrant for a period, imposing no terms upon the defendant, it was held that the landlords could not recover either for use and occupation or for mesne profits, in respect of the period between the termination of the tenancy and the vacation of the premises: Hammond v Bishop (1933) 50 WN (NSW) 103. A claim for damages for use and occupation will not succeed in the face of payment of the rent reserved by the lease: see Scientific Management Associates (Aust) Pty Ltd v Australian Capital Territory [1999] ACTSC 17; and see the discussion of the history and basis of a use and occupation claim in this context at [34]–[45] (per Miles CJ). The amount recoverable is such a sum as the occupation is worth: Thetford Corporation v Tyler (1845) 8 QB 95 at 100 and see Anderson v Bowles (1951) 84 CLR 310. Note the concluding words of the Victorian provision as to using the rent reserved as evidence of the amount recoverable. An action for use and occupation may be brought by way of a specially endorsed writ: Beech v Potter (1904) 29 VLR 830, overruling Rock Freehold Land Co v Cunliffe (1894) 20 VLR 328. The action lies only if the tenant has actually entered on the

premises: Lowe v Ross (1850) 5 Exch 553; Clarke v Austin (1856) 2 VLT 200; Cooper v Dick (1862) 1 SCR (NSW) 127; Woodhouse v Ah Peck (1900) 16 WN [page 371] (NSW) 166. Since the action is based on occupation, the landlord cannot recover rent payable in advance: Angell v Randall (1867) 16 LT 498. As to the meaning of the words ‘held or occupied’ in this section, see Morison v Hall [1923] VLR 93. On the determination of a tenancy a landlord may elect to treat the tenant as a tenant at sufferance and claim for use and occupation, or to treat the former tenant as a trespasser and sue for possession and mesne profits on the recovery of pos-session: Anderson v Bowles at 84 CLR 319; and see [17.17] in relation to mesne profits. The position nevertheless depends upon the terms of the lease, which is likely to have an overholding provision which creates a new periodic tenancy. In National Mutual Life Nominees Ltd v Travellers (NSW) Pty Ltd [1997] ANZ ConvR 249 (CA) it was held that the landlord was not entitled to an occupation fee as no tenancy at will had been created between it and a third party, the landlord not having accepted the tenant’s abandonment of the premises. In Victoria, s 8 of the Landlord and Tenant Act 1958 previously enabled a landlord to recover a reasonable satisfaction in an action for use and occupation where the agreement between the landlord and tenant is not by deed. The history of this section is examined in Specktor v Lees [1964] VR 10 at 17–19. The effect of this section was that proof of a parol demise or any agreement (not being by deed) whereon a certain rent is reserved does not defeat an action for use and occupation, although a contract is required as the foundation upon which the section is to operate. However, ‘to any action for use and occupation … proof (by the defendant) of an actual demise under seal … is an answer’: Specktor v Lees at 19 (per Sholl J). While the provision has since been repealed and has not been replaced in subsequent legislation, an action for use and occupation still remains in Victoria. Use and occupation claims should be contrasted with situations where a tenancy can be implied at common law. Thus, in Sangora Holdings Pty Ltd v Jones (1996) 16 SR (WA)

316; [1996] ANZ ConvR 565 it was held that the tenant was liable for all rent, outgoings and interest for the period of its occupation under a tenancy implied at common law where the lease was unregistered and not in registrable form but the parties had acted as though bound by it. See also Williams Civil Procedure in Victoria, LexisNexis Butterworths, Sydney, looseleaf, [I 21.03.120] and [I 21.03.125]; and as to the nature of a use and occupation claim, see Scientific Management Associates (Aust) Pty Ltd v Australian Capital Territory [1999] ACTSC 17 at [24]–[27] (per Miles CJ).

[page 373]

12 Australian Consumer Law and Other Commonwealth Legislation Introduction [12.1] On 1 January 2011 the Trade Practices Act 1974 (Cth) and statebased fair trading legislation, such as the Fair Trading Act 1999 (Vic), were replaced and harmonised under the Competition and Consumer Act 2010 (Cth). The consumer protection laws formerly found in the Trade Practices Act and the state-based fair trading legislation are now contained in the Australian Consumer Law (hereafter referred to as ‘Consumer Law’), which is contained in Sch 2 of the Competition and Consumer Act. The Consumer Law is applied by each state and territory’s application act as a law of each state and territory. The provisions of the Consumer Law are, with some exceptions, principally provisions of general application which are not directed to leases or any other transactions in particular. While not enacted with the specific purpose of reforming the landlord–tenant legal relationship, there are, nevertheless, a number of provisions which largely adopt the those previously contained in Pts IV, IVA and V of the Trade Practices Act and which directly affect the parties’ legal relationship and (in some instances) give additional remedies to tenants. The wording of the relevant provisions in Pt IV of the Trade

Practices Act has been adopted in Pt IV of the Competition and Consumer Act, while the former Pts IVA and V are now largely replicated in Chs 2 and 3 of the Consumer Law. These provisions will be considered separately. [page 374] The Trade Practices Act continues to apply in relation to acts or omissions that occurred before 1 January 2011, and to proceedings under or in relation to that Act that were commenced, but not concluded, before 1 January 2011; s 6 of the Trade Practices Amendment (Australian Consumer Law) Act (No 2) 2010. The case law associated with the understanding and interpretation of the protections under the Trade Practices Act will continue to be relevant to the interpretation and application of the Consumer Law; Second Reading Speech; and see Murphy v Victoria (2014) 45 VR 119. For constitutional reasons, the relevant provisions in the Trade Practices Act are limited in their scope to actions by a ‘corporation’: Constitution s 51(xx). In the present context, it thus follows that the landlord must constitute a ‘corporation’ before the tenant may invoke any of the provisions of the Trade Practices Act. However, subject to this limitation (and the temporal restrictions referred to above), the Trade Practices Act will extend to all types of commercial tenancies, including retail tenancies. The updated provisions in Pt IV of the Competition and Consumer Act are still restricted in their application to acts done by a corporation; however, significantly, the consumer protections now found in Chs 2 and 3 of the Consumer Law have been expanded to include acts done, or omissions, done by a ‘person’. In the case of retail tenancies, the relevant provisions of the Consumer Law, the Competition and Consumer Act, and Trade Practices Act, will apply in addition to those in the state retail tenancies legislation (see Chs 23–29) in the absence of any inconsistency between the various sections.

Restrictive Trade Practices: Competition and Consumer Act Pt IV

Origin and relevance to leases [12.2] The origin of Pt IV of the Competition and Consumer Act can be traced to the Restrictive Trade Practices Acts of 1971 and 1972. This legislation was replaced by Pt IV of the Trade Practices Act, which was enacted largely in consequence of the decision of the High Court in Strickland v Rocla Concrete Pipes Ltd (1971) 124 CLR 486, which in effect upheld the power of the Commonwealth to enact trade practices legislation. Like its predecessor, Pt IV draws heavily upon the United States anti-trust legislation and the American experience relating to it. The relevance of Pt IV to commercial leases is that many such leases contain covenants which restrain the tenant’s freedom to trade on the demised premises as he or she sees fit. The most notorious and one of the most ancient of such covenants effects a tie of trade, compelling the tenant to purchase stock from the landlord or a supplier nominated by him or her. There are, of course, other covenants which affect directly and indirectly the tenant’s ability to conduct business on the demised [page 375] premises in his or her chosen manner. For example, commercial leases often seek to regulate: (a) the type of business that the tenant is permitted to carry on; (b) the hours during which he or she may or must trade; (c) the advertising signs which must be displayed inside and outside the premises; (d) the tenant’s contribution towards the costs of advertising schemes which relate to the whole of a shopping centre; (e) the insurance that is to be provided by the tenant; and (f) the lessee’s membership of a merchant’s association. When the Trade Practices Act was first introduced, there was considerable doubt as to whether Pt IV of that Act applied to covenants contained in leases.

These doubts proved to be well founded in light of the decision of the Full Court of the High Court in Quadramain Pty Ltd v Sevastopol Investments Pty Ltd (1976) 133 CLR 390. This case concerned the application of s 45 of the Trade Practices Act, as originally drafted, to restrictive covenants contained in a contract for the sale of land. The court held that on a grant of land it cannot be said, whatever the terms of the covenants, that it is in restraint of trade for conditions to be attached to the grant. The rationale for this decision is that prior to the sale the purchaser had no rights in relation to the land and, regardless of the severity of the conditions, after the grant the purchaser will inevitably have greater rights in the land. In this regard, the High Court followed the reasoning of the House of Lords in Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269. Although the decision in Quadramain did not relate to the landlord–tenant relationship, there is a direct parallel between the sale of land and the grant of a leasehold estate, and it was universally accepted that leases were outside the scope of Pt IV. Following Quadramain, the Trade Practices Act was extensively amended in 1977. Some of the changes were designed to ensure the future application of that Act to leases. For example, a new s 4h was inserted which stated, among other things, that a reference to a contract shall be construed as including a reference to a lease of, or a licence in respect of, land or a building or part of a building. That definition has been adopted in s 4H of the Competition and Consumer Act. Section 47, relating to exclusive dealing, was repealed and replaced. The new provision specifically defined ‘exclusive dealing’ as including the situation where a corporation refuses to grant or renew a lease or exercises a right to terminate a lease where another party to the lease has acquired goods or services directly from a competitor of the corporation; s 47(9), a definition which has again been adopted in the Competition and Consumer Act See generally S Hii, ‘The Effect of Part IV of the Trade Practices Act 1974 on Contemporary Commercial Leasing Practices’ (1999) 7 APLJ 121. [page 376]

Section 45B: covenants affecting competition

[12.3] Adopting the words of its predecessor in the Trade Practices Act, s 45b(1) states: A covenant, whether the covenant was given before or after the commencement of this section, is unenforceable in so far as it confers rights or benefits or imposes duties or obligations on a corporation or on a person associated with a corporation if the covenant has, or is likely to have, the effect of substantially lessening competition in any market in which the corporation or any person associated with the corporation supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the covenant, supply or acquire, or be likely to supply or acquire, goods or services. Subsection (2) prohibits a corporation from requiring the giving of a covenant, or giving a covenant, if the proposed covenant has the purpose, or would have or be likely to have the effect of substantially lessening competition in any market for the supply or acquisition of goods or services in which the corporation is involved. A person is deemed to require the giving of a covenant, within the meaning of s 45b(2), where he or she issues an invitation or an offer to another person to enter into a contract containing a covenant, or makes it known that he or she will not enter into a contract of a particular kind unless the contract contains a covenant of a particular kind or in particular terms: s 45b(3). By s 45b(9), the section does not apply to any covenant if the sole or principal purpose for which it is required to be given is to restrict the use of the relevant land to residential purposes. The section also has no application where the person requiring the covenant to be given is a religious, charitable or public benevolent institution or its trustees. For a consideration of the application of s 45b to shopping centre leases, see Persian Magic Carpets Pty Ltd v Ipoh Garden (Australia) Pty Ltd (1989) ATPR 40-935. ‘Covenant’ is defined in s 4(1) as meaning ‘a covenant (including a promise not under seal) annexed to or running with an estate or interest in land (whether at law or in equity and whether or not for the benefit of other land)’. Thus, s 45B only applies to those covenants running with the land. This is not an important restriction since most provisions in a lease which could affect competition, including covenants as to user and ties, run with the land. In

addition, it is important to note that all covenants run with the land in respect of Torrens land: Land Titles Act 1925 (ACT) ss 77, 78; Real Property Act 1900 (NSW) ss 36, 51, 52; Land Title Act 1994 (Qld) s 62; Land Titles Act 1980 (Tas) ss 3, 60; Transfer of Land Act 1958 (Vic) s 45(2); Transfer of Land Act 1893 (WA) s 95. Reference should be made to [15.19] and to C Harpum, S Bridge and M Dixon, Megarry and Wade — Law of Real Property, 8th ed, Sweet and Maxwell, 2012, pp 950–55, and A Bradbrook, S MacCallum and A Moore, Australian Real Property Law, 6th ed, Lawbook Co, 2016, pp 711–8, for a list of reported cases of covenants which have been held to run with the land, and those which have been held not to run with [page 377] the land. In the present context, the following are relevant illustrations of covenants which have been held to run with the land: covenants as to assignment or subletting: Re Rakita’s Application [1971] Qd R 59; McEacharn v Colton [1902] AC 104; Goldstein v Sanders [1915] 1 Ch 549; covenants relating to the user of the leased land or adjoining land: Rogers v Hosegood [1900] 2 Ch 388; Ricketts v Enfield Church Wardens [1909] 1 Ch 544; Westhoughton UDC v Wigan Coal and Iron Co Ltd [1919] 1 Ch 159; covenants restricting the persons who can use the leased property: Lewis v American and Colonial Distributors Ltd [1945] 1 Ch 225; and an option to purchase the reversion: Denham Bros Ltd v W Freestone Leasing Pty Ltd [2002] QSC 307; Price v Murray [1970] VR 782. These covenants and other such covenants which run with the land may be held to be unenforceable under s 45b(1) of the Competition and Consumer Act if they have the effect of substantially lessening competition and are within the scope of the wording of the provision.

Section 47: exclusive dealing [12.4] Section 47(1) again adopts verbatim the wording of its predecessor. The section states that a corporation shall not, in trade or commerce, engage

in the practice of exclusive dealing. The relevance of this provision to landlord–tenant law is explained in s 47(8) and (9). Section 47(8) states: A corporation also engages in the practice of exclusive dealing if the corporation grants or renews, or makes it known that it will not exercise a power or right to terminate, a lease of, or a licence in respect of, land or a building or part of a building on the condition that another party to the lease or licence or, if that other party is a body corporate, a body corporate related to that body corporate — (a) will not, or will not except to a limited extent — (i) acquire goods or services, or goods or services of a particular kind of description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; or (ii) re-supply goods, or goods of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; (b) will not supply goods or services, or goods or services of a particular kind or description, to any person, or will not, or will not except to a limited extent, supply goods or services, or goods or services of a particular kind or description — (i) to particular persons or classes of persons or to persons other than particular persons or classes of persons; or (ii) in particular places or classes of places or in places other than particular places or classes of places; or (c) will acquire goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation. [page 378] Section 47(9), which was held by the High Court to be constitutionally

valid in Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, deals with the converse situation and includes within the meaning of ‘exclusive dealing’ a refusal by a corporation to grant or renew, or exercise a power or right to terminate a lease on the ground that the tenant is engaged in one or more of the practices referred to in s 47(8). Section 47(11) contains similar exemptions to these granted by s 45b(9) in favour of trustees for religious, charitable or public benevolent institutions. None of the conduct of the corporation referred to in subss (8) and (9) constitutes an infringement of s 47(1) unless it has the purpose, or has or is likely to have the effect, of substantially lessening competition: s 47(10). Useful examples of the operation of s 47 in the landlord–tenant context are a condition in the lease that the tenant shall acquire some or all of his or her stock only from the landlord or from a company associated with the landlord, or the fact that the landlord takes into account when granting, renewing or terminating a lease the source from which the tenant has acquired its stock. In fact, the scope of the section is sufficiently wide to include any tie requiring the tenant to deal with the landlord or an associated person or to refrain from dealing with another specified person. If a company proposes to engage in conduct which amounts or may amount to exclusive dealing, it can lodge a notification with the Australian Competition and Consumer Commission (Commission) under s 93(1). If the Commission is satisfied that the company’s engagement in the proposed conduct is likely to have a substantial anti-competitive effect and that in all the circumstances the conduct is not likely to result in a benefit to the public or that any such benefit would not outweigh the detriment to the public constituted by any lessening of competition, the Commission may give notice in writing to the company stating that it is so satisfied: s 93(3). Before it can lawfully give such a notice, however, the Commission is required by s 93a to afford the company the opportunity to confer with it about the proposed conduct. Once the company notifies the Commission of its intention to engage in the proposed conduct, then it can lawfully engage in that conduct until the expiration of 30 days from the date of the service upon it of the Commission’s notice. This means that, in practical terms, a company can engage in conduct which is or may amount to exclusive dealing immediately after it has given to the Commission the requisite notice and may continue to

do so until at least 30 days after the holding of a compulsory conference: s 93(7)(b). The authorisation procedures were retained in the 1977 amendment, but a new test has been substituted for the one that was set out in the original 1974 legislation. The test now adopts that which was contained in the 1977 amendments, and remains whether the public benefit flowing from the agreement outweighs the detriment of its anti-competitive provisions: s 90(7). In other words, it seems that it may no longer be necessary for the applicant to demonstrate that the agreement will have a ‘substantial’ public benefit or that such a benefit was ‘not otherwise available’. [page 379] As in the case of the notification procedure, before the Commission finally determines an application for an authorisation adversely to the applicant, it must afford the applicant an opportunity to hold a conference with it. The Commission’s refusal to grant an authorisation may be reviewed by the Australian Competition Tribunal.

Other provisions [12.5] Sections 45b and 47 are the only substantive provisions in Pt IV of the Competition and Consumer Act specifically referring to leases. Despite this, however, as a lease is included within the meaning of a ‘contract’ by virtue of s 4H, other provisions may occasionally be applicable to the landlord– tenant relationship. Thus, the anti-monopolisation law in s 46 and the provisions in s 45 against contracts which constitute an exclusionary provision or have the purpose, or have or are likely to have the effect, of substantially lessening competition may sometimes apply in the present context.

Declarations as to Competition and Consumer Act and the Consumer Law [12.6] Under s 163A of the Competition and Consumer Act, any person may apply to the Federal Court or the state Supreme Court for a declaration

as to the operation of the relevant provisions of either the Competition and Consumer Act, or the Consumer Law.

Commercial and shopping centre leases [12.7] On 12 May 1975 the Commission issued Information Circular No 7 in which it set out guidelines relating to the following covenants contained in commercial leases and, in particular, shopping centre leases: (a) covenants not to compete; (b) covenants against subletting or assigning the term; (c) covenants regulating the hours during which the demised premises may or must remain open for business; (d) covenants dealing with the tenant’s right to advertise inside and outside the premises; (e) covenants requiring the tenant to take out specified insurance; (f) covenants requiring the tenant to join a particular merchants’ association; and (g) covenants by which the landlord is permitted to audit the tenant’s accounts. When considering the Commission’s Circular, it should be borne in mind that it deals with the covenants in the context of s 45 as it stood in 1975, when it was directed against [page 380] contracts in restraint of trade. Section 45 no longer deals with contracts in restraint of trade and in any event, under the 1977 amending legislation, leases containing covenants which do restrain the freedom to trade probably fall within s 47 and not s 45 so that somewhat different considerations may now apply compared to those arising under s 45. Nevertheless, the circular remains valid despite the 1977 amendments (see para 2.1 of the Commission’s Information Circular No 20 (30 June 1977)). The 1975 circular is a very

useful guide because it indicates the Commission’s views as to the likely impact upon competition the various covenants in restraint of trade may have and, in some instances, it makes useful suggestions as to how such covenants could be modified so as to remove their proscribed anti-competitive effect. See also Pengilley, ‘Competition Policy and Shopping Centre Leasing’ (1977) 51 ALJ 747 and 812.

Consumer Protection: Chapters 2 and 3 Relevance to leases [12.8] Chapters 2 and 3 of the Consumer Law contain a number of consumer protection measures which are concerned with the supply of goods or services. ‘Services’ is defined in s 4(1) as including rights in relation to, and interests in, real property. Leases are thus clearly within the scope of this part of the legislation. The following remedies may be available to tenants.

Section 18 Misleading or deceptive conduct [12.9] A general proscription of misleading or deceptive conduct engaged in by a person in trade or commerce is contained in s 18. Section 18 replaces the former s 52 of the Trade Practices Act. The substance of the drafting of the prohibition has not been changed, other than to reflect the more expansive nature of the Consumer Law provisions by changing the reference in the former s 52 from ‘a corporation’ to ‘a person’. Section 18 states: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. In Murphy v Victoria (2014) 45 VR 119, the Victorian Court of Appeal said in relation to the application of the existing case law dealing with s 52 of the Trade Practices Act (at [77]): … s 18 of the CL remains subject to limitations that were authoritatively identified by the majority in Concrete Construction. An analysis of each of the matters referred to by the appellant does not

lead to a conclusion different from that asserted in the Explanatory Memorandum which was to the effect that s 18 of the ACL replaced s 52 of the Trade Practices Act 1974 (Cth) ‘without substantive change’ and that ‘[t]he only change made in including the prohibition in the ACL is to apply the prohibition to “a person” rather than “a corporation”’. [page 381] Accordingly, the well-developed jurisprudence relating to s 52 of the TPA is relevant to the interpretation or understanding of the meaning and application of s 18 of the Consumer Law. The purpose of the section (in relation to the former s 52 of the Trade Practices Act) was explained by Barwick CJ in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 220: Section 52 is concerned with conduct which is deceptive of members of the public in their capacity as consumers of goods or services: it is not concerned merely with the protection of the reputation or goodwill of competitors in trade or commerce. The phrase ‘engaging in conduct’ is defined in s 4(2)(a) as follows: In this Act a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding or the requiring of the giving of, or the giving of, a covenant. Surprisingly, however, the Consumer Law has followed the drafting of the Trade Practices Act in failing to provide a definition of ‘misleading’ and ‘deceptive’ within it. In interpreting these words, Franki J stated in Weitmann v Katies Ltd (1977) 29 FLR 336 at 343: The most appropriate meaning for the word ‘deceive’ in the Oxford Dictionary is: ‘To cause to believe what is false; to mislead as to a

matter of fact, to lead into error, to impose upon, delude, take in’. The most appropriate definition in that dictionary for the word ‘mislead’ is: ‘To lead astray in action or conduct; to lead into error, to cause to err’. Gleeson CJ in Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 475 explained the limited scope of the former s 52 as follows: Where parties are dealing at arms’ length in a commercial situation in which they have conflicting interests it will often be the case that one party will be aware of information which, if known to the other, would or might cause that other party to take a different negotiating stance. This does not in itself impose any obligation on the first party to bring the information to the attention of the other party, and failure to do so would not, without more, ordinarily be regarded as dishonesty or even sharp practice. It would normally only be if there were an obligation of full disclosure that a different result would follow. This could occur, for example, by reason of some feature of the relationship between the parties, or because previous communications between them gave rise to a duty to add to or correct earlier information. See also Nashvying Pty Ltd v Giacomi [2007] QCA 454 at [100]. The reported cases on s 52 establish several propositions of law which are relevant to the application of s 18: (i) According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public, likely to read the statement or be influenced by it, into [page 382] error’. See also RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Havane Pty Ltd v LFOT Pty Ltd [1998] 1051 FCA 31; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982)

(ii)

(iii)

(iv)

(v)

149 CLR 191; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14. This seems to suggest that the correct test of liability under s 18 is to ascertain whether the conduct complained of has a misleading or deceptive tendency; if so, the section will be infringed without the need for proof of further facts. This interpretation was confirmed as correct in Arcric Investments Pty Ltd v Ductline Pty Ltd (1992) ATPR 41-180 at 40, 459. Section 18 will be breached even in circumstances where a person did not intend to deceive or believed that its conduct was not misleading or deceptive. In other words, mens rea on the part of a person is irrelevant and liability is strict: Hornsby Building Centre Pty Ltd v Sydney Building Information Centre Ltd, above; Scott v Windsor Holdings Pty Ltd (1986) ATPR 40-737; Bluehive Pty Ltd v Dukemaster Pty Ltd [2000] FCA 1307 at [82]; Yorke v Lucas (1985) 158 CLR 661 at 666; Eastern Garden Pty Ltd v Sangster [2004] SASC 45 at [44]. The issue whether a representation was made, and if it was made, whether it constitutes misleading conduct is assessed objectively looking at the conduct as a whole: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 604. In a case where the relevant conduct was directed towards a particular person, the correct approach is to analyse the conduct from this perspective, rather than from the perspective of a class of persons within which the plaintiff falls: Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 at [78]. Section 18 will not be breached if the only result of the conduct is to confuse the public. The major authority on this point is McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) 33 ALR 394, where the Full Court of the Federal Court held that the confusion caused by the appellants in advertising one of its table wines as ‘Big Mac’, the same title as given to the respondent’s hamburgers, did not amount to misleading conduct within the meaning of the former s 52(1) of the TPA. See also Arcric Investments Pty Ltd v Ductline Pty Ltd (1992) ATPR 41-180; Monaco Willows Pty Ltd v Greenbox Pty Ltd (1996) ATPR 41527. As stated by Stephen J in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd, above, at 227, ‘… nothing in [s

52(1)] suggests that a statement made which is literally true … may not at the same time be misleading and deceptive’. It thus appears that s 18 extends to cases of failure to disclose relevant information where the suppression of facts will mislead a person. Two relevant cases interpreting the American legislation equivalent to s 18 are Aronberg v FCT (1943) 132 F 2d 165 and Tashof v FCT (1970) 473 F 2d 707. Aronberg’s case held that the section will be breached where a corporation fails to identify an inherently dangerous feature of goods or services, while [page 383] in Tashof’s case it was decided that a breach occurs where there is a failure to disclose an essential term of a transaction. In Australia, Black CJ in Demagogue Pty v Ramensky (1992) 39 FCR 31 at 32 stated the relevant test as follows: Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of ‘mere silence’ or a duty of disclosure can divert attention from that primary question. Although ‘mere silence’ is a convenient way of describing some fact situations, there is in truth no such thing as ‘mere silence’ because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed. This decision was approved and applied in Hamilton-Smith v CFS Managed Property Ltd [2005] SASC 461; Aldahr v Motor Vehicle Commission [2007] NSWSC 1102; Mikaelian v Commonwealth Scientific and Industrial Research Organisation (1999) 163 ALR 172; [1999] FCA 610; General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164; and Zaknic

Pty Ltd v Svelte Corporation Pty Ltd (1996) BC9603695. See also Eastern Garden Pty Ltd v Sangster [2004] SASC 45; Havane Pty Ltd v LFOT Pty Ltd [1998] 1051 FCA 31. (vi) A promise to do something in the future is treated as a representation that it will be performed. It will be deemed to be misleading unless the defendant proves that it had reasonable grounds for making the statements. The burden of proof is on the defendant in this regard: Ting v Blanche (1993) 118 ALR 543 at 552; Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136 at [81]. Compare ACCC v Universal Sports Challenge Ltd [2002] FCA 1276 at [47]. (vii) A statement of opinion may constitute misleading or deceptive conduct. In Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682, it was held that a statement of opinion as to the reasonableness of rent payable contravened the misleading or deceptive conduct provisions. The conduct complained of related to a number of separate representations about the rent payable for five separate premises which formed part of a food court in a shopping centre. The respondent lessor told the lessee that the rent to be paid was ‘reasonable’ or ‘very reasonable’, and that it was to be set at ‘market value’ or ‘below market value’. Gordon J held that there was no reasonable basis for the statements about the rent. Her Honour said: A statement of opinion will not be misleading or deceptive or likely to mislead or deceive merely because it turns out to be incorrect, misinforms or is likely to do so: Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 242; (1987) ATPR (Digest) 46-030; Bateman v Slayer (1987) 71 ALR 553 at 559; 8 IPR 33; (1987) ASC 55-559; (1987) ATPR 40762. An incorrect opinion does not of itself establish that the opinion was not held [page 384] by the person who expressed it or that it lacked any or adequate

foundation: Global Sportsmen Pty Ltd v Mirror Newspapers (1984) FCR 82 at 88; 55 ALR 25; (1984) ASC 55-334; (1984) ATPR 40-463. An expression of an opinion which is identifiable as an expression of opinion conveys no more than that the opinion is held and perhaps that there is a basis for the opinion. If that is so, an expression of opinion however erroneous misrepresents nothing: Global Sportsman 2 FCR 82 at 88. However, an opinion may convey that there is a basis for it, that it is honestly held and when it is expressed as the opinion of an expert, that it is honestly held upon rational grounds involving an application of the relevant expertise. If the evidence shows that the opinion was not held or that it lacked any or any adequate foundation, particularly if the opinion was expressed as an expert, a statement of opinion may contravene s 52 of the TPA: Elders Trustee 78 ALR 193 at 242, proposition (4); see also Hannaford (trading as Torrens Valley Orchards) v Australian Farmlink Pty Ltd [2008] FCA 1591; BC200809414 at [253] and RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; 112 ALR 511; (1993) ATPR 41-225; BC9304639; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26; [2004] HCA 3; BC200400148; NC Seddon and MP Ellinghaus, Cheshire and Fifoot’s Law of Contract (9th Australian Edition, 2008), [11.116]. (viii) Mere exaggeration of the capabilities of goods or services is permissible provided that the person does not make specific claims for the product that cannot be substantiated. Legally permissible exaggeration is usually referred to as ‘puffing’. Each case is decided on all the facts in light of the surrounding circumstances: see, for example, Lyndon v Coventry Motors Retailers Pty Ltd (1975) 11 SASR 308; Collier Constructions Pty Ltd v Foskett Pty Ltd (1990) 97 ALR 460; Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1996) BC9603695. (ix) Reliance on representations can sometimes be inferred: Vella v Wah Lai Investment (Australia) [2004] NSWSC 748 at [202]; Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242; Gould v Vaggelas (1985) 157 CLR 215.

(x) An exemption clause in a lease is no defence to a landlord in a cause of action under s 18: IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470. However, it may be relevant in considering whether a tenant has been induced to enter into the lease by misleading or deceptive conduct, provided that the clause is well drafted and brought to the attention of the tenant who has the benefit of legal advice: Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd [1989] ATPR (Digest) 46-048; Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1989) 89 ALR 539; Oraka Pty Ltd v Leda Holdings (1997) ATPR 41558. There are numerous reported illustrations of the application of the former s 52 to the landlord–tenant relationship. For example, in Mister Figgins Pty Ltd v Centrepoint [page 385] Freeholds Pty Ltd (1981) 36 ALR 23, Northrop J, of the Federal Court, held that the section was infringed by representations by the landlord’s agent relating to the appearance of the shopping complex, the nature of the tenants of the other shops and the rate of occupancy of the rented premises within the complex. In Mikaelian v Commonwealth Scientific and Industrial Research Organisation (1999) 163 ALR 172; [1999] FCA 610, the fact that the landlord of a shopping complex failed to advise the applicant for a lease of premises within the complex that the premises was already subject to a right of first refusal in a third party constituted conduct that was misleading or deceptive within the meaning of s 52. In Brown v The Jam Factory Pty Ltd (1981) 53 FLR 340, the tenant successfully argued for the application of s 52 where the landlord’s agent had falsely misrepresented to him that all but one of the shops within the shopping centre had been leased and that all the shops would be opened when the shopping centre itself was opened. In Baillieu Knight Frank (Gold Coast) Pty Ltd v Susan Pender Jewellery Pty Ltd (1997) ATPR ¶41-542; (1996) BC9605413, the Full Court of the Federal Court upheld a breach of s 52 where the lessor of a shopping centre had misrepresented to one of the

shop lessees that it would be the sole retailer of a specific category of goods in the shopping centre. For further cases on the former s 52 involving the landlord–tenant relationship, see Cairns Shelfco No 16 Pty Ltd v Armanel Pty Ltd [2004] QSC 122; McKendrick & Co Pty Ltd v Fush [2001] VSC 95; Roquin Office Services Pty Ltd v Tingdale Pty Ltd (1997) BC9706769 (NSWCA); ADC Centres Pty Ltd v Kilstream Pty Ltd (1979) 25 ALR 549; Cohen v Centrepoint Freeholds Pty Ltd (1982) 66 FLR 57; Maniero Pty Ltd v El Barador Holdings Pty Ltd (1982) 1 TPR 437; Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 47 ALR 114; Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR (Digest) ¶46-048; Juneau Pty Ltd v Kayford Pty Ltd (1991) ATPR ¶41-117; Ting v Blanche (1993) ATPR ¶41-282; Lowe & Sze Tu Holdings Pty Ltd v Cudal Nominees Pty Ltd (1991) ATPR (Digest) ¶46–074. For s 52 cases involving service stations leases, see for example, George MacGregor Auto Service Pty Ltd v Caltex Oil (Australia) Pty Ltd (1980) 51 FLR 458; Dinyarrak Investments Pty Ltd v Amoco Australia Ltd (1982) 45 ALR 214; Steedman v Golden Fleece Petroleum Ltd (1986) ATPR ¶40-060; Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171. A breach of s 18 is not treated as an offence punishable by a fine. Chapter 4 of the Australian Consumer Law creates a number of offences for breaches of consumer protection provisions of the Australian Consumer Law, none of which are in the broad terms of s 18. The major remedy for a breach of s 18 is for the ACCC or any other person to apply to the court for an injunction restraining a person from engaging in conduct that constitutes a breach of s 18 (s 232(1)), and may also seek rectification under the general discretionary power of the court contained in s 237(1) to make ‘such order or orders as it thinks appropriate against the person who engaged in the conduct’. [page 386]

Section 29 False or misleading representations about goods or services [12.10] Section 53 of the TPA prohibited the making of certain false or misleading representations in connection with the supply or possible supply of

goods, supplementing the prohibition under s 52 of the TPA. Some of the proscribed specific representations were prohibited from being false, some from being false or misleading, and others from being about qualities the relevant goods or services do not have. As the Explanatory Memorandum identified, there did not appear to be any rationale as to why the different forms of wording were used for different elements of the section: see Explanatory Memorandum, [6.11]. Section 29 of the Consumer Law replaces s 53 of the TPA and has been drafted to remove this distinction and applies to false or misleading conduct as well as including the new forms of prohibited misrepresentation. Section 151 of the Consumer Law, which applies in precisely the same circumstances as s 29, creates a number of offences of which the following eight may be relevant in the landlord and tenant context, particularly having regard to the broad definition of ‘services’ in the Act: see s 4. The relevant parts of s 29 are as follows: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (b) make a false or misleading representation that services are of a particular standard, quality, value or grade; … (d) make a false or misleading representation that a particular person has agreed to acquire goods or services; (e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; (f) make a false or misleading representation concerning: (i) a testimonial by any person; or (ii) a representation that purports to be such a testimonial; relating to goods or services; …

(g) make a false or misleading representation that represent that the goods or services have a sponsorship, approval or affiliation it does not have; … (i) make a false or misleading representation with respect to the price of goods or services; … [page 387] (l)

make a false or misleading representation concerning the need for any goods or services; or (m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 or Part 3.2). Like s 18, it appears that s 29 is based on strict liability. Authority for this proposition is Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212 where the defendant argued unsuccessfully that the words ‘falsely represent’ require the plaintiff to prove in the case of a corporation that a person of sufficient seniority to bind the company knew that the representation was false. Franki J stated (at 217): … if a representation is in fact not correct it comes within the words of the section, even if it is not false to the knowledge of the person making the representation, and even if the person making the representation is a servant of the company of insufficient significance in the company for his knowledge, according to the ordinary principles of common law, to be deemed to be the knowledge of the company. There is nothing novel in equating ‘false’ with ‘contrary to fact’. In Australian Competition and Consumer Commission v Dukemaster Pty Ltd and Wong [2009] FCA 682, Gordon J discussed the relationship between the former s 52 and s 53 of the Trade Practices Act (in the context of the former s

53(e) relating to the prohibition on making false or misleading representation with respect to the price of goods), as well as the dichotomy between the wording of the two sections. Her Honour said (at [14]–[15]): In relation to the first element, s 53(e) requires the representation to be “false or misleading” as opposed to “misleading or deceptive” (in s 52). I was not taken to, and I have not found, any authority which attributes a meaningful difference to this dichotomy for the purposes of the TPA. (For a discussion of the phrase “false and misleading” under a different Act, see Construction, Forestry, Mining and Energy Union v Hadkiss (2007) 160 FCR 151). Indeed, the vast majority of cases that discuss an alleged breach of s 53(e) couple it with a breach of s 52 and deal with the “false or misleading” and “misleading or deceptive” aspect of the conduct mutatis mutandis: see Foxtel Management Pty Ltd (2005) 214 ALR 554 at [94]; ACCC v Target Australia Pty Ltd (2002) ASAL(Digest) 55-072; (2001) ATPR 41-840; [2001] FCA 1326; BC200105578; ACCC v Harbin Pty Ltd [2008] FCA 1792; BC200810538; ACCC v Prouds Jewellers Pty Ltd [2008] FCAFC 199; BC200811421 at [42]. That is not altogether surprising. The purpose of s 53 has been described as being to “[support] s 52 by enumerating specific types of conduct which, if engaged in by a corporation in trade or commerce in connection with the promotion or supply of goods or services, [would] give rise to a breach of the Act”: see R Miller, Miller’s Annotated Trade Practices Act (30th ed, 2009), [1.53.5]. Accordingly, and in the absence of any submission to the contrary, I see no reason why the application of s 53(e) should not fall to be determined upon the conclusions I reach in relation to s 52 -- namely that the representations were misleading and deceptive or likely to mislead or deceive. [page 388]

Section 30: False representations and other

misleading conduct in relation to land. [12.11] A provision of Ch 3 of the Consumer Law that is particularly relevant to commercial leases is s 30, which replaces the former s 53A of the Trade Practices Act. Section 30 provides as follows: (1) A person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land: (a) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or (b) make a false or misleading representation concerning the nature of the interest in the land; or (c) make a false or misleading representation concerning the price payable for the land; or (d) make a false or misleading representation concerning the location of the land; or (e) make a false or misleading representation concerning the characteristics of the land; or (f) make a false or misleading representation concerning the use to which the land is capable of being put or may lawfully be put; or (g) make a false or misleading representation concerning the existence or availability of facilities associated with the land. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) This section does not affect the application of any other provision of Part 2-1 or this Part in relation to the supply or acquisition, or the possible supply or acquisition, of interests in land. The prohibitions in s 30(1) of the Consumer Law are mirrored in s 152(1), which renders conduct in breach of s 30(1) an offence. While the definition of an ‘interest’ in relation to land remains the same under the Consumer Law as

it was under the Trade Practices Act, that definition is no longer contained in s 30 (as it was under s 53A). The definition is now contained in s 2 of the Consumer Law which provides that an ‘interest’ in relation to land means: (a) a legal or equitable estate or interest in the land; (b) a right of occupancy of the land, or of a building or part of a building erected on the land, arising by virtue of the holding of shares, or by virtue of a contract to purchase shares, in an incorporated company that owns the land or building; or (c) a right, power or privilege over, or in connection with, the land. The word ‘land’ is not defined in s 4 of the Competition and Consumer Act or in s 2 of the Consumer Law (or in the former Trade Practices Act). Paragraph 22(1)(c) of the Acts Interpretation Act 1901 (Cth) provides that unless a contrary intention [page 389] appears, land includes messuages and tenements, so that buildings are included. There is, however, an argument that a ‘contrary intention’ does exist for the purposes of the Acts Interpretation Act definition and that ‘buildings’ are not ‘land’ for the purposes of these provisions: see Heydon 12.800. It has been held that leases are within the definition in s 2 of the Consumer Law as, in the modern law, they are legal or equitable interests in land: see Videon v Barry Burroughs Pty Ltd (1981) 37 ALR 365; 53 FLR 425. There are other limitations on the operation of these provisions. It seems that ‘interest’ with reference to land means a proprietary interest in land and not an interest in the sense of a purpose for which the land might be used: see Westwill Ltd v Heath (1990) 52 SASR 461 at 480; ATPR (Digest) 46-056 at 53,209 (Duggan J, SC(SA)). On the other hand, the reference to ‘characteristics of the land’ seems to invite a very broad interpretation which, for example, will cover statements about the direction the land faces, the suitability of the land for building, the condition of existing buildings and the nature of cultivation: see Heydon 12.860. However, it should be noted that in

Brown v Jam Factory Pty Ltd (1981) 35 ALR 79; 53 FLR 340 at 349–50; [1981] ANZ ConvR 156; (1981) ATPR 40-213 Fox J doubted whether a ‘characteristic’ of the particular interest in land could cover representations by a tenant of one shop concerning other shops in a shopping centre. [12.12] The majority of cases on the former s 53A(1) concerned the sale of freehold land, where a number of convictions under s 53A(1)(b) have occurred: see Given v Pryor (1980) 30 ALR 189; Sackville v Mansard Developments Pty Ltd (1981) ATPR ¶40-222; Videon v Barry Burroughs Pty Ltd (1981) 53 FLR 425; Latella v L J Hooker Ltd (1985) 5 FCR 146. In the landlord–tenant context, most actions brought against corporations under the former provision have been unsuccessful. For example, a tenant who had leased premises to store printing materials failed to prove a breach of s 53A(1) (b) where the floor proved inadequate and the premises became unsuitable for its business: Bradford House Pty Ltd v Leroy Fashions Group Ltd (1983) 46 ALR 305. See also Brown v The Jam Factory Pty Ltd (1981) 53 FLR 340, discussed in [12.9], and Lobendhan v West Perth Investments Pty Ltd [1998] FCA 1257. Both actions in these cases appear to have failed because the false or misleading representation did not on the facts relate to a ‘characteristic’ of the land. A further, important, distinction of the operation of s 30 when compared with the wording of the section under s 53A of the Trade Practices Act that should be noted is the removal of the wording found in the former s 53A(2) which proscribes the use of physical force, undue harassment or coercion in connection with the sale or grant of an interest in land or the payment for an interest in land. Persistence has been held not to amount to harassment: Westwill Pty Ltd v Heath (1990) ATPR (Digest) ¶46-056. The most obvious illustration of the use of this subsection in the [page 390] present context is harassment or force used in the collection of arrears of rent. There appear to be no relevant authorities on this subsection relating to the landlord–tenant relationship.

Section 34 Misleading conduct as to the nature etc of

service [12.13] Section 34 of the Consumer Law replaces the former s 55A of the Trade Practices Act. Pursuant to this section, a person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services. This section could be infringed where the landlord publishes a misleading brochure or prospectus concerning premises to be leased. To date, there are no reported cases concerning the application of this section, or its predecessor, to the sale or grant of an interest in land. For cases where a travel agent and an insurance agent were held guilty of breaches of s 55a(1), see Doherty v Traveland Pty Ltd (1982) ATPR ¶40-323 and Adams v Anthony Bryant & Co Pty Ltd (1987) ATPR ¶40-784, respectively. See also Trade Practices Commission v J&R Enterprises Pty Ltd (1991) ATPR ¶41-133; ‘E’ v Australian Red Cross Society (1991) ATPR ¶41-085. Section 37(2) of the Consumer Law, which substantively reproduces s 59(2) of the Trade Practices Act, may also possibly be of relevance. This subsection reads: (2) A person must not, in trade or commerce, make a representation that: (a) is false or misleading in a material particular; and (b) concerns the profitability, risk or any other material aspect of any business activity: (i) that the person invites (whether by advertisement or otherwise) other persons to engage or participate in, or to offer or apply to engage or participate in; and (ii) that requires the performance of work by other persons, or the investment of money by other persons and the performance by them of work associated with the investment. The subsection arguably includes within its scope an invitation contained in an advertisement or brochure to take a tenancy of business premises, particularly if either a premium is to be paid, or investment in plant, fixtures

or stock is required. A further possible illustration is a general offer for the sale of a business conducted on the rented premises.

Unconscionable conduct under the Consumer Law [12.14] The unconscionable conduct provisions of the Consumer Law are contained in Pt 2.2 of Ch 2, and replaces the former Pt IVA of the Trade Practices Act. Part IVA, which was added in 1992 and amended in 1998, introduced the concept of unconscionability into the Trade Practices Act. The principal provision, s 51AA, stated: [page 391] (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. As stated in the explanatory memorandum in the Bill that introduced Pt IVA into the Trade Practices Act, the provision embodied the equitable concept of unconscionable conduct as recognised by the High Court in Bromley v Ryan (1956) 99 CLR 362 and Commercial Bank of Australia v Amadio (1983) 151 CLR 447. In Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51, the High Court, in taking a restrictive approach of s 51AA, emphasised the requirement of ‘special disadvantage’ and the unconscionable taking advantage by another of the disadvantage. In this case the tenant was attempting to sell its business. The landlord knew that the tenant would be unable to sell its business without a new lease, but refused to renew the lease unless the tenant withdrew the legal proceedings that it had instituted against the landlord. The landlord was held to have acted unconscionably in acting in this manner. See D O’Brien, ‘The ACCC v Berbatis Litigation and Section 51AA of the Trade Practices Act 1974 (Cth)’ (2002) 10(4) TPLJ 201; and Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) BPR 16,361; [1999] ANZ ConvR 360; (1998) NSW ConvR ¶55-861; and Vella v Wah Lai Investment (Australia) [2004] NSWSC 748.

Section 21 of the Consumer Law has its origins in the former ss 51AB and 51AC of the Trade Practices Act and creates a general prohibition against unconscionable conduct in relation to the supply, or possible supply of goods or services to another person. Section 22 of the Consumer Law works in connection with the prohibition as set down in s 21, articulating a series of considerations which a court may have regard to when determining whether a person has engaged in unconscionable conduct for the purposes of s 22. Section 21 of the Consumer Law provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person, or the acquisition or possible acquisition of goods or services from a person, engage in conduct which is, in all the circumstances, unconscionable. Section 21(4) makes it clear that the section is not limited to the ‘unwritten law’, and so its application is intended to have a wider reach and not be limited to conduct that would traditionally be regarded as unconscionable conduct according to equitable principles; see Canon Australia Pty Ltd v Patton (2007) 244 ALR 759; and Body Bronze International Pty Ltd v Fehcorp Pty Ltd (2011) 34 VR 536. ‘Unconscionable’ in this context is wider than recognised by the common law. The Full Federal Court stated in Hurley v McDonalds Australia Ltd [1999] FCA 1728: For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable, must be demonstrated … Whatever ‘unconscionable’ means in s 51AC, the term carries the meaning given by the shorter Oxford English Dictionary, namely, action showing no regard for conscience, or that are irreconcilable with what is [page 392] right or reasonable … The various synonyms used in relation to the term ‘unconscionable’ import a pejorative moral judgment … Before s 51AC will be applicable, there must be some circumstance other than the mere terms of the contract itself that would render reliance on the

terms of the contract ‘unfair’ or ‘unreasonable’ or ‘immoral’ or ‘wrong’. This passage was cited with approval by Tracey J in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd [2007] ANZ ConvR 297; [2007] FCA 708 in a case concerning a claimed right of rectification of the terms of a commercial lease. It is clear then that something more than unfairness or unreasonableness is required; Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392. See also E Webb, ‘Section 51ac and Retail Leasing — A False Start But Some Guidelines for the Future’ (2000) 8 APLJ 135. It is important to note the distinction with respect to the significance of these provisions to commercial leases under the Consumer Law when compared to the previous prohibition under the Trade Practices Act, which limited the reference to ‘goods and services’ to a reference to goods and services of a kind ordinarily acquired for personal, domestic or household use or consumption: s 51AB(s). This meant that these provisions under the Trade Practices Act would only in exceptional cases have any relevance to commercial leases or, indeed, retail premises leases under the retail tenancy legislation. This restriction has not been imported into the wording of s 21 (or s 22) of the Consumer Law. The consequence of this is likely to be significant for both landlords and tenants, as the unconscionable conduct provisions under the Consumer Law will now touch upon a much wider ambit of that relationship.

Remedies [12.15] Except for s 18, a breach of any of the clauses of Ch 2 or Ch 3 of the Consumer Law discussed above constitutes an offence punishable by a maximum penalty of $220,000 (in the case of a person) or $1,100,000 (in the case of a body corporate): s 224. Part 4.6 provides a number of defences against prosecution under these provisions.

Implementation of the Consumer Law

[12.16] The Consumer Law replaces national, state and territory consumer protection and fair trading laws. While each state or territory based law contained similarities, the differences which did exist, created regulatory complexity, uncertainty and cost, particularly for consumers and businesses operating across state border, although rarely in the landlord–tenant relationship. The Consumer Law has been applied by each state and territory through their own Acts, namely: s 7(1) of the Fair Trading (Australian Consumer Law) Amendment Act 2010 (ACT); [page 393] s 28 of the Fair Trading Amendment (Australian Consumer Law) Act 2010 (NSW); s 27 of the Consumer Affairs and Fair Trading Amendment (National Uniform Legislation) Act 2010 (NT); s 18 of the Fair Trading (Australian Consumer Law) Amendment Act 2010 (Queensland) (see the new s 16 of the principal Act); s 7 of the Statutes Amendment and Repeal (Australian Consumer Law) Act 2010 (SA) (see the new s 18 of the principal Act); s 6 of the Australian Consumer Law (Tasmania) Act 2010 and the Australian Consumer Law (Tasmania) (Consequential Amendments) Act 2010 (Tasmania); s 9 of the Fair Trading Amendment (Australian Consumer Law) Act 2010 (Victoria) (see the new s 9 of the principal Act); and s 19 of the Fair Trading Act 2010 (Western Australia).

[page 395]

13 Breach of Contract Introductory [13.1] Legal proceedings between landlord and tenant are commonly concerned with the recovery of possession. In this chapter it is proposed to deal with certain other kinds of claim, emphasis being placed on matters of procedure and measure of damages. As to the grant of specific performance of an agreement for lease, generally, see Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 254–5; and S & E Promotions Pty Ltd v Tobin Bros Pty Ltd (1994) 122 ALR 637 at 656; and see [4.8]. As to remedies for breach of a repair or like obligation, including damages and specific performance, see [10.13]; and as to the terms of any final injunction with respect to a breach of this kind, see Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 33 NSWLR 33 at 41; and see [10.13]. As to damages recoverable on the determination of a lease by repudiation and its acceptance, see [16.26].

Agreement for a lease [13.2] An enforceable agreement for a lease may be relied upon in the following ways: 1. as founding an action for damages for its breach. Whether damages may be recovered for breach of an agreement which is enforceable only by reason of the equitable doctrine of part performance is considered in

2. 3.

[4.9]. by way of seeking specific performance in an action commenced by the lessor or lessee for the purpose of obtaining that relief: and see [4.8]. as a defence to an action for the recovery of the land brought by the lessor. The lessee may have gone into possession on the faith of the agreement for a lease or may have remained in possession after the determination of a previous lease in consequence of the making of an agreement for a further term. In such a case the lessee will ordinarily not only raise the agreement as a defence to the [page 396]

4.

lessor’s claim, but also seek by way of counter-claim an order for the specific performance of the agreement. for the purposes of some provisions in landlord and tenant legislation; for example, as constituting ‘reasonable cause why possession should not be given’ within the meaning of s 33 of the Landlord and Tenant Act 1958 (Vic) (a provision repealed as from 1 September 2012 — see LL&T Comparative Table). See Healy v Southern Milk Transport Pty Ltd [1954] VLR 448, and the other decisions cited in R Brooking and A Chernov, Tenancy Law and Practice, Victoria, (2nd ed, by Alex Chernov, Butterworths, Sydney, 1980) [405].

Tender of lease [13.3] In the absence of agreement to the contrary, the lessee ought to tender the lease to the lessor for execution, and an action for damages for breach of the agreement to grant the lease may fail unless its commencement was preceded by such tender: Pinn v Barbour (1870) 1 VR (L) 136. The defendant should raise this point on the pleadings if he or she wishes to rely upon it: Brown v Hardy (1868) 5 WW & A’B (L) 245. Notwithstanding Pinn v Barbour, it may be doubted whether, having regard to modern conveyancing practice, it is in the ordinary case necessary for the lessee to tender a lease for

execution by the lessor before suing for damages for breach of the agreement to make the lease. The basis of the decision in Pinn v Barbour is expressed in the following words: Reasoning by analogy we think the argument for the plaintiff cannot be sustained. In all instances the person who is to get, tenders. The drawer of a bill tenders it for acceptance; the purchaser tenders the conveyance to be executed by the vendor; the mortgagee tenders the deed of mortgage to be executed by the mortgagor; and by analogy we think that the lessee ought to tender the lease to the lessor to execute. But, apart from analogy, the decisions are clear. Price v Williams (1836) 1 M & W 6; 150 ER 323, is conclusive. It was held that there it was incumbent in that particular instance, in consequence of the special terms of the agreement for the landlord to tender the lease; showing that in the absence of such an agreement it would not have been so incumbent; and thus the case by necessary implication decided that it is the duty of the tenant to tender the lease to the landlord for execution (1870) 1 VR (L) 136 at 137–8. Price v Williams (1836) 150 ER 323 was a case where the agreement provided that the lease should be drawn, prepared and executed at the sole expense of the lessor. In an action by the lessee on the agreement it was held that it was not necessary to aver that a lease was tendered to the lessor for execution. The court dealt with the point as follows (at 326): But as the lease was to be prepared at the sole expense of the defendant, he was to prepare it, and not the lessee. It may be, indeed, that one may be bound by the express terms of a contract to prepare a lease or conveyance and yet that it shall be paid for by another, for such stipulations are not inconsistent; but where all that is stipulated for is, [page 397] that it shall be prepared at the expense of the lessor, and there is no

context to explain it, it must be intended that the lessor is to prepare it also. This breach is, therefore, well assigned. The answer to the question whether it is necessary to tender a lease before suing for damages would seem to depend upon whether it was an express or implied term of the agreement that the lease was to be prepared by the lessee. Having regard to modern conveyancing practice in relation to the preparation of leases, it is difficult to see how it could be contended in the ordinary case that it was an implied term of the agreement that the lessee should prepare the lease. It is accordingly suggested that in the ordinary case no such term can be implied as will make the tender of a lease by the lessee a condition precedent to the bringing of an action for damages by the lessee. For a discussion of the Victorian practice in relation to the payment of the costs of preparation and execution of leases, see A Bloch, ‘Cost of Leases — Letter’, (1971) 45 LIJ 5, 112. On the question which of the parties is entitled to hold the original stamped lease, see Headnote, ‘Conveyancing Practice — Original Lease’, (1977) 51 LIJ 117. Whatever the correct view may be of the matter just discussed, it is apprehended that a lessee who desires not to claim damages, but to obtain specific performance, is not obliged to tender a lease before issuing the writ. The refusal of the lessor to execute a lease tendered to him or her is only one of the possible ways of showing circumstances which justify the intervention of a court of equity. To hold otherwise would be to fall into the error of equating the right to sue for specific performance with a cause of action at law: Khatijabai Jiwa Hasham v Zenab D/O Chandu Nansi Widow and Executrix of Haji Gulam Hussein Harji [1960] AC 316; [1958] 3 All ER 719.

Measure of damages for failure to grant, take or continue lease [13.4] If a vendor of real estate who has acted in good faith is unable to make a good title, the purchaser is unable to recover damages at common law for the loss of his or her bargain and is limited to the expenses he or she has incurred. This is the rule in Flureau v Thornhill (1776) 2 Wm Bl 1078; 96 ER 635; [1775–1802] All ER Rep 91, also known as the rule in Bain v Fothergill (1874) LR 7 HL 158; [1874–80] All ER Rep 83. This rule applies to

agreements to grant a lease, notwithstanding that a leasehold interest is, as mentioned in [1.13], personal property: see Gaslight & Coke Co v Towse (1887) 35 Ch D 519 at 543; [1886–90] All ER Rep Ext 1771; J W Cafes Ltd v Brownlow Trust Ltd [1950] 1 All ER 894. The rule in Bain v Fothergill has no application where the vendor will not do what he or she can and ought to do in order to obtain a good title: Noske v McGinnis (1933) 47 CLR 563; 8 ALJ 15; [1933] ALR 322. Nor does it apply where the vendor knew at the time of the sale that he or she could make no title: Colonial Investment & Agency Co Ltd v Cobain (1888) 14 VLR 740. Moreover, the rule does not protect a person who, having agreed to sell the freehold or grant a [page 398] lease, proceeds instead to sell or let to another: Ross v Robinson (1886) 12 VLR 764; Ridley v De Geerts [1945] 2 All ER 654. Where the lessee is entitled to general damages for the loss of his or her bargain, the ordinary measure of damages is the difference between what the lessee had agreed to pay and the value of the lease: Noske v McGinnis (1933) 47 CLR 563 at 595; [1933] ALR 322. In looking at what the lessee had agreed to pay, it will be necessary to have regard not only to the rent reserved by the lease agreed to be granted, but also to any premium. The lessor may be the party claiming damages for breach of the agreement. For example, an owner who has agreed to let premises to a lessee may recover damages against him or her if the lessee fails to execute a lease of the premises and to go into possession of them. If the owner later re-lets the premises at a higher rent, he or she may nevertheless be entitled to damages to the time of re-letting and without any deduction in respect of the high new rent: Warwick Grove Pty Ltd v Wright (1976) 1 SR (WA) 69 (Dist Crt, WA). The assessment of damages in such a case necessitates an estimation of the value of the term to the lessor. Compare Buchanan v Byrnes (1906) 3 CLR 704, especially at 715. In order to estimate the value of the term it will be necessary to compare the agreed rent with the rent which the lessor is likely to obtain from a substitute tenant, and an allowance will in appropriate circumstances have to be made for delay in re-letting: Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd

(1906) 4 CLR 672 at 684; Re Tru-Grain Co Ltd [1921] VLR 653 at 658; Marshall v Mackintosh (1898) 78 LT 750. As to whether the landlord is bound to mitigate the damage suffered by him or her when the tenant wrongfully abandons premises, see [11.17]. Regard must be had to the fact that a present payment is being made to compensate for future economic loss, and those actuarial calculations so familiar in other fields of endeavour may require to be made, the plaintiff claiming the present value of the difference between the total amount payable under the proposed lease and the total amount receivable by reason of the re-letting: NLS Pty Ltd v Hughes [1966] WAR 100, affirmed (1966) 120 CLR 583; 40 ALJR 292. If there is no loss, nominal damages only may be awarded for the breach: Oldershaw v Holt (1840) 12 A & E 590; 113 ER 935; Mayer v Southey (1892) 8 TLR 395. A contract for the sale of a business provided that ‘the vendor warrants that the lease is for a period of not less than two years with the right of option for an additional three years’. The contract also provided that ‘if either of the parties hereto as vendor and purchaser should at any time neglect to perform or refuse to comply with any part of this agreement, the party so refusing or neglecting shall pay unto the other of them, who shall be willing to complete the same, the sum of £100 as or in the nature of liquidated damages’. In fact there was no lease of the premises in existence and, after the purchaser had been in possession and carrying on the business for one year, the landlord served him with a notice to quit. Gavan Duffy J held that the provision for payment of the sum of £100 had no application to the warranty given by the vendor and that the measure of damages for breach of the warranty was the value of the goodwill of the business properly [page 399] attributable to the unexpired portion of the five years promised the purchaser: Fraser v Evans [1946] VLR 382, affirmed (1946) 72 CLR 658n. As indicated in Brunswick Developments Pty Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604 (FCA), damages may be recoverable by the landlord for loss of the value of the premises as a result of the breach of the

agreement for lease. In the course of reviewing the authorities and considering issues of remoteness, Sundberg J said in that case (at 67,272): The usual measure of damages is the difference between the rent reserved by the lease and that recovered on a reletting of the premises: Lamson Store Service Co Ltd v Russell Wilkins and Sons Ltd (1906) 3 CLR 672. But the general principle is that stated by O’Connor J in Buchanan v Byrnes (1906) 3 CLR 706 at 721, that the landlord can recover damages for the loss of the benefit of the lease. Or as Deane J put it in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 55, the landlord can ‘in accordance with ordinary contractual principles sue the tenant for damages for loss of the benefit of the tenant’s covenant to pay future rent and outgoings’. Where, as here, the landlord does not re-let but sells, I see no reason why it should not recover the difference between the value of the premises with the tenant in occupation and their value without a tenant. That accords with the general principle that a person who has sustained loss by reason of a breach of contract is entitled to be placed in the same position, so far as money can do it, as if the contract had been performed: Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 at 365; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 81, 98, 117, 134. In Peet and Co v Rocci [1985] WAR 164, where the lessor had not re-let but had sold the premises at a loss, Rowland J said, at 178: … there are several ways one may assess damages for breach of a lease agreement and in the end the method adopted may have to depend upon the circumstances of the existing case and the attitude taken by the lessor. In my view in this case the true measure of damages is the difference between the value of the premises as a going concern with a tenant in possession pursuant to the contractual term and one without a tenant in possession at the relevant time at which such valuation is to be made being either the date of the breach or the date of acceptance of that breach. I do not regard loss of the value of the premises as being too remote in

the present case. In C Czarnikow Ltd v Koufos [1969] 1 AC 350 at 385, in a passage approved by Mason CJ, Brennan and Dawson JJ in Amann at 92, 99, Lord Reid said: The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation. In the circumstances of the Brunswick Development case Sundberg J found that the directors of Shock Records did have sufficient information to realise (in terms of Lord Reid’s crucial question) that the intending landlord would suffer loss of value of the premises if its obligations under the agreement were not performed. [page 400] In G & A Lanteri Nominees Pty Ltd v Fishers Stores Consolidated Pty Ltd [2007] VSCA 4 the Victorian Court of Appeal considered the date at which damages should be assessed against a lessee in breach of a covenant that a leased supermarket in a shopping centre would remain open for business where it was closing down 31 months prior to the end of the term, though the tenant did continue to pay rent. Callaway JA (with whom Ashley and Neave JJA agreed in relevant respects) said, having referred to the first paragraph (and the quoted passage from Peet and Co v Rocci) in the judgment of Sundberg J in the Brunswick Development case as set out above: [10] It will be observed that, in the first passage that I have italicised, Sundberg J stated the issue to be determined in a way that was neutral so far as the date of assessment was concerned and that, in the second italicised passage, Rowland J specified the date of the breach or its acceptance. In Costain Property Developments Ltd v Finlay & Co Ltd [(1988) 57 P & CR 345], to which the appellants also referred, a

deputy judge in the Queen’s Bench Division assessed damages as at the date of sale of the reversion but gave no reasons for choosing that date. [11] One argument in favour of the date of sale was that, by analogy with personal injury and fatal accident cases, actual facts are preferable to an estimate of the probability of their occurring. I do not accept that analogy, not least because the price at which the shopping centre was sold to Sofal cannot simply be equated with the market value. It may have been, and probably was, affected by specific factors. It is like a comparable sale, and as such, I should have thought [footnote as to factual matter omitted], may be taken into account in determining the value of the property as at the date of breach. It is important not to confuse the question of the date as at which damages are to be assessed with the permissibility of looking at later events for the purpose of making that assessment. [12] Another argument in favour of the date of sale was that the impact of Fishers’ abandonment had worsened during the period between 5th April and 30th August 2002. Whether or not that might have been a sufficient reason in other circumstances to prefer the date of sale, it is insufficient if the analysis of the evidence in [45]–[47] below is correct. We are concerned with the underlying value of the shopping centre as an investment, not with the temporary effects of Fishers’ premature departure. They are temporary because it has to be assumed that Fishers would not have renewed the lease. [13] I am not persuaded that we should depart from the ordinary rule that damages for breach of contract are to be assessed as at the date of breach. [If that date is selected, interest pursuant to s 60 of the Supreme Court Act 1986 will run from the date of filing of the writ. If the date of sale is selected, as Ashley JA pointed out in the course of the hearing, there might be good cause to order that interest run from the date of sale.] I agree with the learned trial judge, who reached the same conclusion. In any event the appeal in the Lanteri Nominees case was dismissed, which left the finding of the trial judge (Bongiorno J) that the lessor had failed to satisfy the court that the lessee ceasing to operate its supermarket business

caused the value of the shopping centre freehold to be diminished. Consequently nominal damages, of $5, were awarded: see Lanteri Nominees v Fishers Stores [2005] VSC 336; (2005) V ConvR ¶54-708. [page 401] As to determination of leases by acceptance of repudiation and related issues, including damages and mitigation, see [16.26].

Agreement for weekly tenancy [13.5] The courts of equity have never granted specific performance of an agreement to give or take a weekly tenancy, the reason being that the rights which are created by such a tenancy are so ephemeral that the court’s decree or order could be set at naught in reality before ever it could be obtained: Linfield Linen Pty Ltd v Nejain (1951) 68 WN (NSW) 163; see also [4.8].

Readiness and willingness [13.6] In order to obtain specific performance of a contract, a plaintiff must ordinarily show that he or she is ready and willing to perform his or her part of the bargain. But if in the past he or she has not been ready and willing to do so, and the other party has nevertheless elected to keep the contract on foot, the plaintiff may put him or herself right, even at the trial, and apparently at any time up to judgment, subject only to risk of being ordered to pay costs. The writ in the action may itself amount to an offer to perform the contract: Commonwealth Oil Refineries Ltd v Hollins [1956] VLR 169 at 180–1; and see Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16,361; (1998) NSW ConvR ¶55-861.

Partial specific performance [13.7] If the agreement for a lease contains provisions which fall outside the scope of the remedy of specific performance, as by involving continuous acts

and requiring the watching and supervision of the court, it may be possible to obtain specific performance as to part of the agreement. Where the plaintiff agreed to grant a lease to the defendant, when and as soon as he, the defendant, should have built a new house on the land, and the defendant agreed to accept such lease when required, and by a certain date pull down an old house then standing on the land, and build a new one on the site, it was held that the plaintiff was entitled to damages for the failure to build the house and to specific performance of the contract to accept the lease: Soames v Edge [1860] John 669; 70 ER 588.

Pleading part performance [13.8] Where the plaintiff alleged a verbal agreement in the statement of claim and the defendant pleaded the Statute of Frauds, it was held that the plaintiff might allege part performance in his reply: Henderson v Thorne (1895) 16 ALT 193. Similarly, where the statement of claim alleged the existence of a written memorandum and the defence contained a plea that the memorandum did not satisfy the statute, the matter [page 402] of part performance was held to have been properly raised in the reply: South Suburban Land Co Ltd v Hughes (1889) 15 VLR 308. It would, indeed, be embarrassing if the plaintiff were to allege in his or her statement of claim an oral contract and acts of part performance, as such, for the defendant may not plead the statute: Francis v Francis [1952] VLR 321 at 328; Harlow v Mitchell [1970] QWN 68. It is not good pleading to anticipate the defence of the Statute of Frauds: Hall v Eve (1876) 4 Ch D 341, 345; Johnston Fear & Kingham & Offset Printing Co Pty Ltd v Commonwealth (1943) 67 CLR 314 at 324. In the reply, however, acts alleged to constitute part performance should be pleaded: Harlow v Mitchell.

Decree of specific performance [13.9] Useful minutes of a decree for specific performance of an agreement

for a lease are to be found in Commonwealth Oil Refineries Ltd v Hollins [1956] VLR 169 at 184–5.

Covenants to repair [13.10] Covenants to repair are dealt with in Chapter 10, and the measure of damages is considered at [10.13]. Specific performance of a repairing covenant is not ordinarily to be had: see [10.13].

Remedies for breach of covenant [13.11] If a covenant is broken by the lessor or the lessee, the other party may obtain damages and, in an appropriate case, an injunction. A few examples of the latter form of relief may be given. The lessee has been compelled by mandatory injunction to fulfil his or her covenant to do all things requisite for obtaining a renewal of the licence of licensed premises: Parker v Mallon (1907) 24 WN (NSW) 206. A mandatory injunction was granted in MacIntosh v Bebarfalds Ltd (1922) 22 SR (NSW) 371, directing the tenant to restore the premises to the state they were in before the making of alterations in breach of covenant. Examples of a restrictive injunction are Munday v Prowse (1878) 4 VLR (Eq) 101, where the tenant was restrained from felling timber, and Pape v Aero Club (Holdings) Pty Ltd (1971) 222 EG 41, where the lessor and its director were restrained by an interlocutory injunction from taking steps the effect of which would amount to a breach of covenant by the lessor. In some cases the grant of a mandatory injunction may be appropriate to prevent a continuing breach of the covenant for quiet enjoyment, but not in circumstances where this would expose the court to continuing supervision of the contract between the parties: see Becker v Cariste [2001] NSWSC 663 at [35] (per Austin J). In addition to an action for damages or an injunction, the landlord has a further remedy, for he or she may forfeit the lease for breach of covenant, provided that the

[page 403] lease contains a proviso for re-entry and provided that any notice to remedy required by s 146 of the Property Law Act 1958 (Vic) (see Conveyancing Act 1919 (NSW) s 129; Property Law Act 1974 (Qld) s 124; Landlord and Tenant Act 1936 (SA) s 10; Conveyancing and Law of Property Act 1884 (Tas) s 15; Property Law Act 1969 (WA) s 81) is given. The lessor is not obliged to either forfeit the lease or submit to the breach; he or she may claim an injunction: Parker v Whyte (1863) 1 H & M 167. Once the lessor elects to determine the lease, he or she may not, however, claim an injunction on the footing that the lease is still subsisting: Wheeler v Keeble (1914) Ltd [1920] 1 Ch 57. A forfeiture may be waived, but waiver of the forfeiture is not waiver of the breach, and the lessor may recover damages: Wilson v Stewart (1889) 15 VLR 781. In appropriate circumstances a representative action for an injunction may be brought to protect the common interest of lessees holding leases in common form: Gaetjens v Arndale (Kilkenny) Pty Ltd [1969] SASR 470; for proceedings on appeal, see (1970) 44 ALJR 434. Also, depending upon the circumstances an injunction may be granted restraining alterations to the layout of a shopping centre in breach of lease covenants (see Coles Supermarkets Australia Pty Ld v Australian Retail Freeholds Pty Ltd (1996) 16 WAR 282) or to restrain the use of leased premises being a lot on a plan of strata subdivision in breach of strata subdivision by-laws: see Regis Towers Real Estate Pty Ltd v Fung (2001) NSW ConvR ¶55-960. The extent to which courts would be prepared to enforce a covenant by a tenant to carry on business at the leased premises by a decree of specific performance is likely to be very limited indeed having regard to the general refusal of the courts to grant specific performance when this would involve continued supervision by the court to ensure fulfillment of the contract: see J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 297–8 (Dixon J); and, similarly, Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL); and see J Heydon, M Leeming and P Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015), [20-065]; and also [7.8]; and Ruffy Investments v Payless Superbarn [1999] VSC 458. In relation to mitigation by the lessee in the context of a claim against the

landlord for breach of covenant in allowing the opening of a competing business in circumstances where further expenditure of moneys by the lessee for this purpose appeared to be pointless, see Cotrell Pty Ltd v D and M Pelle Holdings Pty Ltd [2006] ACTCA. As to remedies for breach of a repair covenant or a covenant of similar nature, see [10.13].

Continuing and other breaches [13.12] In considering the measure of damages it is sometimes necessary to distinguish between a covenant to do a definite act capable only of a breach once and for all and a continuing covenant: Larking v Great Western (Nepean) Gravel Ltd (1940) [page 404] 64 CLR 221 at 238. Continuing breaches are discussed in relation to waiver of forfeitures: see [17.18].

Nominal damages [13.13] If the plaintiff in an action for damages for breach of covenant fails to prove actual damage he or she is entitled to nominal damages: Gerraty v McGavin (1914) 18 CLR 152; Wright v Trude (1922) 25 WALR 121; see further [13.16]. See also Lanteri Nominees v Fishers Stores [2005] VSC 336; (2005) V ConvR ¶54-708 (on appeal [2007] VSCA 4), referred to at [13.4]. In an appropriate case the defendant should safeguard him or herself against the possibility of an award of nominal damages by making a payment into court.

Security money and guarantees [13.14] In NLS Pty Ltd v Hughes (1966) 120 CLR 583; 40 ALJR 292 it was unsuccessfully argued that a provision in a lease requiring the lessee to deposit ‘security money’ with the lessor had the effect of limiting the liability of the

lessee for damage which the lessor might sustain. The lessor was held entitled to security deposits received by a company that leased a block of flats and granted separate tenancies of the various flats after the expiration of the company’s lease and the company’s liquidation ahead of its creditors where the security deposits had been kept separate from the general moneys of the company, and therefore subject to a trust: Re Chelsea Cloisters Ltd (in liq) (1980) 41 P & CR 98 (CA). The lessor was held entitled to receive the whole fund together with any interest on it, which was to be dealt with in accordance with the tenancy agreements under which the deposits were paid. The entitlement arose on the expiry of the company’s lease. While a contract of guarantee will be construed strictly, where, on a proper construction, the contract was that the surety would make good all losses suffered by the lessor as a result of some failure on the part of the tenant, the lessor is entitled to recover damages whether in contract or in tort. Thus, a claim of mesne profits, an action in tort, by the lessor was held not to amount to a waiver of the lessee’s contractual rights — thus releasing the surety from liability in respect of the lessee’s breach of covenant to vacate the premises at the end of the term on the basis that the surety was only liable for the tenant’s contractual obligations: Associated Dairies Ltd v Pierce [1983] 1 EGLR 45 (CA).

Quiet enjoyment [13.15] There is a breach of covenant for quiet enjoyment where there is a substantial interference with the ordinary and lawful enjoyment of the premises occurring by reason of a negligent act or omission on the part of the lessor (Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15); persons acting with the lessor’s authority (Sampson v Hodson-Pressinger (1984) 12 HLR 40; (1982) 261 EG 891); [page 405] or others, depending how widely the covenant is drafted (Celsteel Ltd v Alton House Holdings Ltd (No 2) [1986] 1 WLR 666 at 673 (appealed on other ground, [1986] 1 All ER 608)); see also Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC(NSW), Powell J); and see [8.4],

[10.1]. In Slater v Hoskins [1982] 2 NZLR 541 it was held that a lessor who entered premises to prevent the continuing unlawful act of operating a cinema without a licence committed trespass and a breach of the covenant for quiet enjoyment. A breach of the implied covenant for quiet enjoyment may occur where the lessor demands the right to have a prospective lessee inspect the premises where there is a subsisting lease: see Raven v Mc Shorp Pty Ltd (1996) Q ConvR ¶54-474, where damages of $500 were awarded on the basis that in the particular circumstances an award of aggravated or exemplary damages was not appropriate. The payment of rent by the lessee is not a condition precedent to the performance of the covenant for quiet enjoyment even though the covenant may be drafted conditionally on payment of rent and performance of the covenants: Dawson v Dyer (1833) 5 B & Ad 584; Edge v Boileau (1885) 16 QBD 117; Slater v Hoskins at 549–51; Batson v De Carvalho (1948) 48 SR (NSW) 417; Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16,361; (1998) NSW ConvR ¶55-861; and Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185; see also [10.1]. Where the breach of a covenant for quiet enjoyment consists of an assignment by the lessor of part of the land to a third party and the placing of that third party in possession of that part, the lessee is entitled to damages in respect of the expenditure incurred through the loss of the land and so much of the damages and costs awarded in a trespass action against the third party as cannot be recovered from him or her. The quantum of the loss is calculated as at the date when the tenant’s possession is first threatened: Conodate Investments v Bentley Quarry Engineering Co (1970) 216 EG 1047. Money received by a lessor from a third party for the use of the land demised, which was de jure in the possession of the lessee, but of which such third party had de facto occupation, may be recovered by the lessee from the lessor as money had and received: O’Keefe v Williams (1910) 11 CLR 171. In so far as a claim for damages for a breach of a covenant for quiet enjoyment is a claim only in contract and not in tort, punitive or exemplary damages could not be awarded: Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814. See further Liddle v Cunningham (1874) 5 AJR 120; Ah Lop v Donald (1906) 26 NZLR 218; reversed on the facts (1907) 9 GLR 455; Dowse v Wynyard Holdings Ltd [1962] NSWR 252; J C Berndt Pty Ltd v Walsh [1969]

SASR 34; Telex (Australasia) Pty Ltd v Thomas Cook & Son (Australasia) Ltd [1970] 2 NSWR 257; and see Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185 (FCFCA); but compare Raven v Mc Shorp Pty Ltd, above; and see Malagara Pty Ltd v Mabrouk Pty Ltd (SC(NSW), Hulme J, 24 June 1998, unreported, BC9804891); and see Todburn Pty Ltd v Taormina International Pty Ltd, [page 406] below. In general, damages for breach of the covenant for quiet enjoyment will not properly include damages for mental distress, only damages for physical interference or inconvenience: Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 (applying the general rule with respect to damages for disappointment and distress, referring to Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 405 (per McHugh J at 34 NSWLR 752); and Branchett v Beaney (1992) 24 HLR 348; [1992] 28 EG 107 (CA). However, there are two exceptions. The first is where the mental distress is directly related to, or proceeded from, the physical interference or inconvenience; and the second is if the object of the ‘contract’, the lease, was to provide ‘pleasure, relaxation, peace of mind and freedom from molestation’: Musumeci at 34 NSWLR 752 (and per McHugh J in Baltic Shipping at 176 CLR 405); and Branchett v Beaney at [1992] 3 All ER 916. It will, of course, be most unusual for a lease to fall into the latter category of ‘contract’, but this remains a possibility, which highlights the importance of having regard to the terms of the covenant in relation to the question of damages. Generally in relation to damages for ‘mental stress’ and the like, see Wang v Yan (No 3) [2006] VCAT 237 at [8] (Deputy President Macnamara); and Niazi Services Ltd v Van der Loo [2004] 1 WLR 1254 (CA); and as to exemplary damages, see AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 744 (Deputy President Macnamara); and see Barton v Lantsbery (2004) V ConvR ¶58-577 (VCAT) at [58] (Deputy President Macnamara). Where there has been a breach of a covenant to give possession by a certain day, a sum paid as a bonus on the lease may be recovered in an action for damages for breach of the covenant: Churchill v Williams [1877] Knox 521. As

to the lessor’s liability for damages for breach of the implied covenant not to derogate from a grant, and the distinction between this covenant and the covenant for quiet enjoyment, see Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207; see also [8.4]. Nevertheless, it does not appear that any substantial distinction can be drawn between a covenant for quiet enjoyment and the implied covenant or obligation not to derogate from grant. Thus, in Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd [2005] NSWSC 456 Young J said: [27] The difference between a covenant for quiet enjoyment and an obligation not to derogate from the grant essentially is that the former springs from the relevant instrument, but the latter from ‘the duty imposed on the grantor in consequence of the relation which he has taken upon himself towards the grantee’; per Cotton LJ in Birmingham Dudley & District Banking Co v Ross (1888) 38 Ch D 295 at 308. [28] However recent authorities, such as Southwark LBC v Tanner [2001] 1 AC 1 show that there are really minimal differences between the two. Any distinction that may be drawn does not have any, or any significant, consequences in relation to the award of remedial damages. In this vein, McPherson JA (with whom Fitzgerald P and Thomas J agreed in relevant respects) said in Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1 at 8: [page 407] It is sometimes said that the agreement for quiet possession is directed primarily to acts of the lessor done on the leased premises, whereas the obligation not to derogate from the grant is directed to acts done off the premises on other land retained by the lessor. Having regard to the way in which the matter was approached in O’Keefe v Williams [(1910) 11 CLR 171], it is perhaps doubtful whether the distinction has much practical significance, the question always being whether the effect of the acts in question is such as to disturb or interfere with the lessee’s

occupation irrespective of the place where those acts originated. In the present case, the lessee’s occupation was disturbed, or so the plaintiff claims, by the penetration or entry on and into the leased premises of particles of sawdust and waves of sound. Both were acts or effects for which the adjoining tenant was responsible and could have been sued in nuisance or, in the case of sawdust, in trespass; but the question here is not whether Top Flight itself was or might have been made liable, but whether those acts or their consequences were such as to disturb the plaintiff’s occupation of the premises in a way that involved the defendant landlord in legal responsibility for the loss alleged to have ensued. In relation to the question of damages, McPherson JA continued (at 15–16): The approach to the assessment of damages adopted by her Honour accords with the principles laid down in decisions of this Court in other cases in which precise calculation has proved impossible. The authorities were reviewed by Pincus JA in his reasons, with which Thomas J agreed, in Syntex Australia Ltd v Ray Teese Pty Ltd (CA 259/1996, delivered 6 Aug. 1996). In the proof of damages as much certainty and particularity must be insisted on as is reasonable in the circumstances: Ratcliffe v Evans [1892] 2 QB 524, at 532–533, referred to with approval by Pincus JA in Syntex v Ray Teese. The case now before us was one in which, because of the conjunction of compensable and non-compensable factors contributing to the loss, precise proof was not practicable or possible. However, the plaintiff was not, for that reason, restricted to recovering only nominal damages. There was evidence, which the trial judge accepted, that prospective customers were dissuaded by the noise from remaining on the premises to make purchases; that discounts were given for goods soiled or stained by sawdust; and that staff absences and inefficiency were at least partly attributable to conditions on the plaintiff’s premises for which the defendant was legally liable. In that state of affairs the judge was bound to do the best that could be done to make an assessment, and, subject to one qualification to be mentioned, the amount awarded was in the circumstances neither unduly niggardly nor over generous.

The matter deferred for mention is the trading results and profits of the plaintiff’s business during the period under review. They are calculated to excite the envy of other entrepreneurs … Results such as these naturally prompt speculation about whether conditions at Enoggera were in fact as bad or the losses sustained there as serious as the plaintiff maintained. The objective evidence does, however, establish the plaintiff’s case at least to the extent accepted by the trial judge. Conversely, it also discourages adventurous assumptions that the amount of damages awarded was seriously underestimated. In circumstances like these in which precise calculation is admittedly not possible, any hypothetical mistake in assessment falls fairly within the principle of the decision of this Court in Elford v FAI General Insurance Co Ltd [1994] 1 Qd R 258 concerning the limits of reviewable quantum errors on appeal. [page 408] In any event, proof of damage is essential: see Lawson v Hartley-Brown (1995) 71 P & CR 242 (CA). A breach of the covenant for quiet enjoyment does not of itself amount to a breach of an essential condition which would entitle the tenant to terminate the lease: Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC(NSW), Powell J); referring to Tramways Advertising Pty Ltd v Luna Park (NSW) Pty Ltd (1938) 38 SR (NSW) 632 at 642 (at 5 BPR 11,176). It depends whether the breach is a major or a minor disturbance: see Powell J at 5 BPR 11,176. Further, as to damages for breach of the covenant for quiet enjoyment, Powell J said (at 11,178), referring to the possibility of damages in tort or in contract: Conduct which amounts to a breach of the covenant for quiet enjoyment may involve no more than a breach of contract, but it may also involve a tort. If the conduct involves no more than a breach of contract, then, as a general rule, damages are to be measured by the loss resulting from the breach (see, for example, Owen v Gadd [1956] 2

QB 99; 2 All ER 28; Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814) which loss can include special damage, including, in an appropriate case, the loss of rental which could be obtained by subletting (see, for example, Mira v Aylmer Square Investments (1989) 21 HLR 284; noted (1989) 11 CL 237; cf Calabar Properties v Stitcher (1983) 3 AER 759) and, again, in an appropriate case, damages for distress or mental suffering (see, for example, Sampson v Floyd, (1989) 33 EG 41, noted (1989) 10 CL 229; see also Halsbury’s Laws of England, 4th ed, Butterworths, London, XXVII p 259 para 333 n 3), but not aggravated damages, or exemplary damages (see Perera v Vandiyar [1953] 1 WLR 672; 1 All ER 1109; Kenny v Preen [1963] 1 QB 499; [1962] 3 All ER 814, which may be awarded only in cases in which the conduct in question also constitutes a tort as, for example, the tort of trespass (see, for example, Lavender v Betts [1942] 2 All ER 72; Drane v Evangelou [1978] 1 WLR 455; 2 All ER 437). The notion of tortious damages in this context was, however, rejected by Hill J (with whom Gallop and Gyles JJ agreed in relevant respects) in Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185, a case in which reliance was placed on an alleged breach of the covenant for quiet enjoyment, rather than additionally, or alternatively, a derogation from grant. In this respect Hill J said: [51] Although a lease creates an interest in land and covenants in the lease run with the land, a lease is a contract (cf The Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 27–9) and in the event of a breach of the lease the party not in breach is entitled to damages for the breach. The measure of damages will be that applicable to contract, not, to the extent that there is divergence, that applicable, for example, in tort. [52] In general terms it may be said that where damages are awarded in tort the object is to place the plaintiff in the same position in which the plaintiff would have been had the tort not been committed. By contrast, where damages are to be assessed for breach of contract the damages are the means of placing the plaintiff in the position the plaintiff would have been in had the contract been performed,

including expectation loss: Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 11–13. [page 409] [53] In the United Kingdom the Court of Appeal recently discussed the basis of the computation of damages for breach of a covenant for quiet enjoyment in Mira v Aylmer Square Investments Ltd [1990] 1 EGLR 45. The fundamental principle is that so far as possible by a monetary award the plaintiff is to be placed in the position he or she would have occupied if the contract had been fulfilled: cf Robinson v Harman (1848) 1 Ex 850, Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80. In the normal case of damages for breach of covenant the plaintiff will ordinarily be entitled to recover the profit he or she could be expected to make if the contract had been performed. But there will be cases where loss of profits cannot be proved, because, for example, it is impossible to assess what would have been the outcome had the contract been performed. In such a case a plaintiff may be entitled to recover expenditure which he or she has thrown away: see Amann at 84–5. So, as Mason CJ and Dawson J in that case observed at 85–6: An award of damages for expenditure reasonably incurred under a contract in which no net profit would have been realized, while placing the plaintiff in the position he or she would have been in had the contract been fully performed, also restores the plaintiff to the position he or she would have been in had the contract not been entered into. In this particular situation it will be noted that there is a coincidence, but no more than a coincidence, between the measure of damages recoverable both in contract and in tort. [54] Obviously each case will depend upon its own facts. However, where, for example, the tenant is driven out of occupation by the breach and forced to sell, damages may be assessed by reference to the

difference between the selling price and the price which would have been obtained had the covenant been observed: Calabar Properties v Stitcher [1984] 1 WLR 287 at 299D per Griffiths LJ. The fact that, both in tort and in contract, the fundamental basis for damages is compensation for the loss which directly and naturally flows from the breach tends to lead, in many cases, to a convergence between the principles applicable in the one and those applicable in the other, albeit as was observed in Amann by coincidence. If it is accepted that the basis of these obligations, the covenant for quiet enjoyment and the obligation not to derogate from grant, lies in covenant or contractual obligations, express or implied, the view expressed by Hill J is preferable; and is, in any event, consistent with the authorities cited previously (see above). The passage from Glasshouse Investments Pty Ltd v MPJ Holdings Pty Ltd, set out above, appears to support the view that this is the correct basis of these obligations. In some cases the grant of a mandatory injunction may be appropriate to prevent a continuing breach of the covenant for quiet enjoyment: see [13.11].

Assignment or subletting [13.16] The measure of damages for breach of a covenant against assignment of the term is the loss which the plaintiff has sustained by the substitution of the assignee for the assignor as tenant: Williams v Earle (1868) LR 3 QB 739; Cohen v Popular Restaurants Ltd [1917] 1 KB 480; [1916–17] All ER Rep 1113. If the assignee is respectable and [page 410] responsible, it may be possible to obtain only nominal damages: Swanson v Forton [1949] Ch 143; 1 All ER 135; see also [13.13]. In Lepla v Rogers [1893] 1 QB 31, a lessee covenanted not to sublet without consent. Subsequently, the lessor insured the demised premises against fire. The lessee afterwards, without the knowledge of the lessor and in breach of the covenant, knowingly sublet the premises for the purpose of an oil refinery.

In consequence of the dangerous character of the business a fire broke out, partially destroying the premises, and the insurers refused to indemnify the lessor for the loss, as they were entitled to do, owing to the additional risk incurred. The lessor in an action against the lessee for damages for breach of the covenant sought to recover the loss he had sustained through the refusal to pay the insurance money. The claim succeeded, on the ground that the damages were not too remote, but were the natural result of the breach. However, a refusal by the lessor to consent to a subletting to a proposed respectable and responsible sublessee will not give rise to damages in favour of the lessee where the covenant in question provides that the lessee would not during the term sublet the premises ‘without the consent in writing of the lessor, but such consent shall not be refused in the case of a proposed respectable and responsible … tenant’. This is because the provision with respect to the refusal of consent is to be construed as a qualification on the generality of the lessee’s covenant not to sublet the premises: Yared v Spier [1979] 2 NSWLR 291; and see [15.6].

Miscellaneous covenants [13.17] In Mills v Heuston (1909) 9 SR (NSW) 469, the plaintiff held a lease of a farm from the defendant, who agreed to erect a sheep-proof fence to protect the cultivated portion. Owing to the defendant’s failure to erect the fence, the plaintiff’s own sheep destroyed his crops. In the absence of evidence that the plaintiff had failed to take reasonable precautions to prevent the injury, he was entitled to substantial damages. In Re De Garis and Rowe’s Lease [1924] VLR 38, the lessor covenanted with the lessee to rebuild the premises demised in the event of their destruction by fire. The premises, which were of wood, were destroyed by fire. After the lease and before the fire the local municipal council passed a by-law prohibiting the erection of any but brick buildings in the area in which the premises were situated. It was held that, even though the by-law made it impossible for the lessor to fulfil his covenant, it did not relieve him from liability for not performing it, and that the lessor was liable in damages for failing to rebuild. In Horowitz Holdings Pty Ltd v Plastic Reclaimers (Australia) Pty Ltd (1982) 2 BPR 9492 (CA(NSW) the lease provided:

The lessee will at all times maintain in full force and effect a valid policy of insurance of the demised premises against damage by fire … for the full insurable value of the demised premises which at the date of this agreement is agreed to be seventy thousand dollars ($70,000.00). [page 411] Needham J was of the opinion that this covenant imposed an obligation ‘to ensure that, at all times, the sum insured represented the “full insurable value of the premises”’. Further, that the reference to the sum of $70,000 ‘merely reflected an agreement between the parties that, at the date of the commencement of the lease, the full insurable value was that sum’ (at 9493). The issue of waiver by the lessor was raised but it was found to have no substance. Needham J then turned to the question of what was, at the relevant date, the ‘full insurable value’ of the building. Limiting his remarks to the context of leases, Needham J said (at 9494): It is to be noted that this question is one which arises between lessor and lessee on a covenant in a lease; it does not arise as between insurer and insured under a policy of insurance. Accordingly, the substantial question is — what was the value of the building at the relevant date? Neither side sought to place emphasis upon the words ‘full insurable’, although the submissions made on behalf of the defendants leant strongly towards principles applicable to fire insurance. The adjectives could have a significant meaning if, for example, some question could arise as to whether an insurer would insure the property for its value. Where the only question is as to what sum should have been included in the insurance policy so as to reflect the value of the subject matter, I do not think the phrase ‘full insurable value’ means more than ‘value’. These views were adopted on appeal. It was argued on appeal that the only proper measure of damages for failure to insure was the extent of the loss, being the difference between the cost of reinstatement and the sum paid under the policy. Hutley JA (with whom other members of the court agreed)

rejected this argument, as had Needham J, and considered the authorities (at 9496): This conclusion is said to follow from the fundamental principle that the assured ‘shall be fully indemnified but shall never be more than fully indemnified’: Castellain v Preston (1883) 11 QBD 380 at 386. If the assured can have his building back he cannot ask for more. This principle, when extrapolated to apply to claims for damages for breach of covenant to insure for the full insurable value, results in the damages being the difference between the cost of reinstatement and the sum payable under the policy … However, the rule is more correctly stated as the cost of reinstatement is the limit of liability. That the cost of reinstatement is the limit of liability is established by the Court of Appeal in Leppard v Excess Insurance Co Ltd [1979] 1 WLR 512 at 519, where Megaw LJ said: The ‘full value’ is the cost of replacement. That defines the maximum amount recoverable under the policy. The amount recoverable cannot exceed the cost of replacement. But it does not say that that maximum is recoverable if it exceeds the actual loss. That the cost of reinstatement is not the measure of liability under a covenant to insure is clearly illustrated by the judgment of the Supreme Court of Canada in Canadian National Fire Insurance Co v Colonsay Hotel Co [1923] SCR 688. The Saskatchewan Insurance Act provided that the insurance company should not be liable for loss beyond the actual value of the property destroyed by the fire. Owing to the effect of prohibition in the Province, the replacement cost far [page 412] exceeded the value of the property destroyed and a direction to

a jury that they should find the value of the hotel on a replacement basis was held to be wrong. In this present case, the building was replaced after the fire by another structure which, because of zoning restrictions, was smaller than that destroyed. Each party set out through expert evidence to derive from the cost of a theoretical rebuilding the true cost of the replacement of the destroyed building, assuming this replacement could legally have been made. Hutley JA agreed that, in all the circumstances, it was appropriate that Needham J had adopted another method of calculating the insurable value of the building, the capitalisation of the rental value. It should be noted that the comment by Needham J that the ‘restoration method’ of valuation could produce a more realistic figure where a similar building could be erected in place of the one destroyed was not dissented from (at 9495). Finally, it should be noted that the covenant did not also require reinstatement (see Mahoney JA at 9497). The defendant entered into a lease by which he covenanted to carry on the plaintiff’s house as a hotel for 10 years from August 1904. After entering into possession the defendant in June 1905, in breach of his covenant, sold all the furniture in the house and closed it up, and the defendant’s licence was forfeited. The plaintiff re-entered in September 1905 under a term in the lease. In an action for breach of covenant the plaintiff claimed as damages: (1) the licence fee of £30; (2) £2 paid for a certificate of renewal of licence under the Liquor Act; (3) £20 for expenses incurred in refurnishing the house as a hotel. All these amounts were paid after the plaintiff had entered into possession and after the commencement of the action. The plaintiff did not succeed in recovering the £30 paid for the licence fee, but did recover the other two amounts, those being the necessary consequence of the defendant’s breach: Mackay v Blackston (1906) 6 SR (NSW) 248. In Bernstein v Gardiner (1926) 26 SR (NSW) 109, the plaintiff alleged that, in consideration of his taking a lease of one of the defendants’ shops, the defendants warranted that they would not during the term of the lease carry on or permit any other person to carry on in any of their shops any business in competition with the business carried on by the plaintiff. The defendants broke this warranty. The trial judge told the jury that, if they came to the question of damages, they

were at large up to the amount claimed. Not surprisingly, this direction was held to be inadequate and erroneous. As to the measure of damages for breach of a covenant not to make alterations, see Eyre v Rea [1947] KB 567; 1 All ER 415 and Duke of Westminster v Swinton [1948] 1 KB 524; [1948] 1 All ER 248, but note that s 18 of the English Landlord and Tenant Act 1927, limiting damages for breach of a repairing covenant, does not apply in Australia. As to damages for rectification of an inadequate air-conditioning system and for loss as a result of the reduced value of the lease, see Liangis Investments Pty Ltd v Ipex [page 413] ITG Pty Ltd [2005] ACTCA 2. In relation to the issue of rectification the court said (Higgins CJ and Crispin and Selway JJ): [51] The importance of this is its impact upon the damages suffered by the respondent as a result of the breach of the lease by the appellant. The respondent’s claim for damages included the cost of the rectification works it commissioned. As is made clear in Bellgrove v Eldridge (1954) 90 CLR 613, a person may be entitled to recover the costs of rectification where the rectification is a reasonable course to adopt and the rectification is necessary to achieve conformity with the contract (see at 618). The Magistrates Court held that the airconditioning system was not adequate for the purpose; nor was the electrical system. It held that the rectification work was relevantly necessary. [52] There are several problems with this analysis. Most obviously, the error made by the Court in identifying the correct meaning of cl 9.2 had the effect that the Magistrates Court did not identify whether the rectification ‘was necessary in order to achieve conformity with the contract’. Further, it would seem clear from the report of the contractor given to the respondent in June 2001 that some of the issues considered by the contractor as requiring rectification (eg

‘durability’ and ‘running costs’) did not have anything to do with cl 9.2 of the lease even on the interpretation adopted by the Magistrate. [53] The consequence is that the assessment of damages in relation to the rectification work actually undertaken cannot be sustained. At the very least it proceeded on a false understanding of the contract. The respondent was not entitled to damages on the basis of the actual cost of the ‘rectification’ where such rectification was to bring the airconditioning system up to the standard required to meet the actual operation of the respondent’s business. What was required was an assessment of what changes were necessary to provide air-conditioning in accordance with industry standards for the premises as described in Plan C having regard to such further information as was known to both parties. There is no evidence as to what rectification work was necessary to meet this standard or what it would have cost. On the other hand, the appellant accepts that it breached the lease. It was also noted by the court (at [60]) that there are some circumstances where a party is entitled to recover the full cost of rectification work even if the rectification exceeds the requirements of the contract, referring to Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313 (14 November 2001). It was said, however, that this was not the position in the Liangis Investments case. The court also noted the potential for further loss and damage as a result of increased fit out costs (see [63]) and, in terms of the reduced value of the lease, said: [64] The other aspect of the damages arising from the insufficiency of the air-conditioning system was the amount allowed by the Magistrate for the reduced value of the lease until the rectification works were completed. That involved a ‘broad axe’ assessment by the Magistrate, based upon expert evidence, of the effect upon the market rent of the inadequate air-conditioning. Although the Magistrate was proceeding upon the basis that the air-conditioning system was more deficient than we have, nevertheless it does not seem to us that the difference was likely to be significant in terms of the rent actually payable. We would not be disposed to interfere with that assessment.

[page 414] As to the question whether the lessor should have made further enquiries of the lessee in relation to the intended actual use of the premises, see [39] and [40]. A claim for damages to compensate for an interruption to a tenancy due to operational problems with lifts and air-conditioning equipment, including the cost of relocation, set up costs in temporary premises and other wasted expenditure, was successful in Commonwealth of Australia v Silverton Ltd (1997) 130 ACTR 1.

[page 415]

14 Renewal of Leases Options and covenants for renewal [14.1] A lease obtained by the exercise of an option to renew is a new lease, a new demise: Gerraty v McGavin (1914) 18 CLR 152 at 163; 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193 at 199 (CA) (per Asprey JA); Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231 at 235; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC, NSW, Powell J) at 11,174; but see Polgara Pty Ltd v Vision Wise Holdings Pty Ltd SC(NSW), 11 March 1996, unreported) at 5 where Young J suggests that while this is the position as a matter of the law of estates it may not be the position from the ‘contractual’ perspective with respect to leases (referring to Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 and Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105, discussed at [16.26]). It follows that whether the obligations of any guarantor of the obligations of the tenant under the renewed lease extend to the renewed term depends upon the proper construction of the provisions of the guarantee, bearing in mind that contracts of guarantee are construed strictly and in favour of the guarantor: Verdi La Fontana Pty Ltd v Mabrouk Pty Ltd (1992) 5 BPR 97,381 (CA, NSW); and see Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 561 and Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 256 as to the construction of guarantees. Consistent with this, a lease for a term not exceeding three years containing a right of renewal for a period greater than three years is a lease for a term not exceeding three years: Hand v Hall (1877)

2 Ex D 355; Roberts v Birkley (1888) 14 VLR 819 at 823–4; Gerraty v McGavin (1914) 18 CLR 152 at 163–4. Leases frequently contain a provision enabling the tenant to obtain a renewal of the term. Such a provision may take the form either of an option conferred upon the tenant entitling him or her to require a renewal or of a covenant on the part of the lessor to grant a renewal. A covenant to renew the lease runs with the land and with the reversion: Dalton v City Freehold Investment Co Ltd (1888) 9 LR (NSW) Eq 129; Muller v Trafford [1901] 1 Ch 54. The effect of failure to refer to an option of renewal in describing a lease for the purposes of an option to purchase land subject [page 416] to the lease was considered in Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1. Although it does not require separate consideration to be valid, an option to purchase is a separate agreement from the lease and in the absence of specific agreement does not survive the termination of the term: Palmer v Ampersand Investments Ltd (1984) 11 DLR (4th) 295 (HC, Ontario); see also Sherwood and Tucker (1924) 2 Ch 440; Batchelor v Murphy (1926) AC 63; Hill v Hill (1947) Ch 23; Esther Investments v Cherrywood Park (1986) WAR 279; and Amber Properties Pty Ltd v Sufigoe Pty Ltd (1995) NSW ConvR ¶55-735. The period during which an option to purchase may be exercised will not be extended merely as a result of the exercise of an option to renew the lease unless clear words are used to this effect: Sherwood v Tucker; see also Amber Properties Pty Ltd v Sufigoe (1994) 6 BPR 13,822. Similar considerations apply in relation to options to renew and options to purchase: see Sperry Rand Australia Ltd v Arrandale Properties Pty Ltd [1979] VR 409 at 411 (see [14.6]). The proper characterisation of an option is not settled: see Braham v Walker (1961) 104 CLR 366 at 376; Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at 71; Quadling v Robinson (1976) 137 CLR 192 at 200; United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 929; and see Grepo v Jam-Cal Bundaberg Pty Ltd [2015] QCA 131; [2015] Q ConvR 54829. One view is that an option is a contract subject to conditions: Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674 at 678; Carter v Hyde (1923) 33 CLR 115 at 120 (per Knox CJ) and at 128 (per Higgins J);

Kennewell v Dye [1949] Ch 517; Ballas v Theophilos [1958] VR 576 (on appeal (No 2) (1957) 98 CLR 193); Griffiths v Pelton [1958] Ch 205 at 225; Weeding v Weeding (1861) 1 J & H 424; 70 ER 812; Re Mulholland’s Will Trusts [1949] 1 All ER 460; Laybutt v Amoco Australia Pty Ltd at 76 (at 70–6 Gibbs J comprehensively reviewed the authorities); Sudbrook Trading Company Ltd v Eggleton [1982] 3 WLR 315 per Lord Diplock at 319; Braham v Walker (1961) 104 CLR 366 at 376. The other is that an option is an irrevocable offer: Commissioner of Taxes (Qld) v Camphin (1937) 57 CLR 127 at 132; Carter v Hyde (1923) 33 CLR 115 per Isaacs J at 123; Johnson v Bones [1970] 1 NSWLR 28; Westminster Estates Ltd v Calleja [1970] 1 NSWR 526; 91 WN (NSW) 222; Beesly v Hallwood Estates Ltd [1960] 1 WLR 549 at 555 (on appeal [1961] Ch 103); Re Buttons’s Lease [1964] Ch 263 at 270; Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) 59 SR (NSW) 122 at 123; Stellar Mining NL v Evanel Pty Ltd (SC (CA), NSW, 13 February 1983, unreported); Commonwealth of Australia v Antonio Giorgio Pty Ltd (1986) 67 ALR 244 (FCA, FC); Todburn Pty Ltd v Taormina International Pty Ltd; BS Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589 (FC); Tenstat Pty Ltd v Permanent Trustee Aust Ltd (1992) 28 NSWLR 625 at 629; Duncan Properties Pty Ltd v Hunter [1991] 1 Qd R 101 at 103 (per de Jersey J); Re Copperart Pty Ltd (1995) 16 ACSR 351 (SC, Qld, per White J); and see Zacharia v Ajay Investments Pty Ltd and Chan (1982) ANZ ConvR 651 at 654 (SC, SA, per Mitchell J). [page 417] In Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd the New South Wales Court of Appeal unanimously adopted the ‘irrevocable offer’ view (at 123–4): In the present case the lessor irrevocably offered to grant a lease. Its offer prescribed the time and manner for acceptance. Only by performing the conditions prescribed could it be accepted and result in an agreement for a lease. A purported acceptance without performance of the prescribed conditions would not and could not be an acceptance of the offer. It would in reality be a counter-offer by the original offeree requiring acceptance by the original offeror if an agreement

were to result. If a conditional offer is made and the offeree without performing the condition purports to accept it, that is to say makes a counter-offer and that counter-offer is accepted, it is a loose although not uncommon use of language to say that the original offeror has waived performance of the condition which was prescribed by his offer as being the manner of accepting. In contemplation of law the original offeror has done no such thing. What he has done is to accept a counter-offer and in the result an agreement is made but it is not an agreement consisting of the original offer and an acceptance of that offer. The correctness of McCaul’s case was not doubted by the High Court in Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8 which was a case concerned with an option to purchase a reversionary interest in mineral deposits; and B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd at [1990] VR 595 (per O’Bryan J) and 603 (per Gray J); and see Commonwealth of Australia v Antonio Giorgio Pty Ltd (1986) 67 ALR 244 (FCA, FC). In Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 in the House of Lords, Lord Diplock expressed the ‘contract’ view (at 476–7): The option clause cannot be classified as a mere ‘agreement to make an agreement’. There are not any terms to be agreed between the parties. In modern terminology, it is to be classified as a unilateral or ‘if’ contract. Although it creates from the outset a right on the part of the lessees, which they will be entitled, but not bound, to exercise against the lessors at a future date, it does not give rise to any legal obligations on the part of either party unless and until the lessees give notice in writing to the lessors, within the stipulated period, of their desire to purchase the freehold reversion to the lease. The giving of such notice, however, converts the ‘if’ contract into a synallagmatic or bilateral contract which creates mutual legal rights and obligations on the part of both lessors and lessees. In B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd O’Bryan J (with whom the other members of the court apparently agreed) said (at [1990] VR 594): ‘There is overwhelming authority for the proposition that an option to renew a lease does not constitute a contract, but constitutes an offer to

grant a further term which the lessor is contractually precluded from withdrawing so long as the option remains exercisable’. His Honour then reviewed a number of authorities (see at 594–5). However, see Jacobs v Platt Nominees Pty Ltd [1990] VR 146 (FC) where it was held that an option to purchase land creates a contingent or executory equitable interest (at 149); compare Pritchard v Briggs [1980] Ch 338 (CA); Pata Nominees Pty Ltd v Durnsford [page 418] Pty Ltd [1988] WAR 365 (FC) at 371–2 (per Burt CJ); Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55-459 at 58,322 (per Young J) and Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR ¶55496; Barba v Gas & Fuel Corporation (Vic) (1976) 136 CLR 120 (per Gibbs J at 137); Epic Feast v Mawson KLM Holdings (1998) 71 SASR 161; and see [14.4] and [14.5] as to the effect of the exercise of an option. Although the issue was not raised for consideration it appears that the High Court was of the same view in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at 604–5 and particularly at 617 (per Brennan J). The authorities were reviewed by the Queensland Full Court in Traywinds Pty Ltd v Cooper [1989] 1 Qd R 223; but see Re Copperart Pty Ltd at 16 ACSR 356–7. In some circumstances the view adopted will be of significance. These include where the grantee of an option dies (see Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, especially at 70–6 (per Gibbs J)); where the option is exercised by the grantee out of time (see Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd and United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; Reed v Sheehan (1982) 56 FLR 206, and see [14.9]; and where legislation requires that a disclosure statement be given to a lessee before a lease is entered into if the lease includes an agreement for lease for the purposes of the legislation. Whatever the prevailing view of the nature of options, regard must be had to the actual words used in the option and their proper construction: see Laybutt v Amoco Australia Pty Ltd at 70–6 (per Gibbs J); Johnson v Bones [1970] 1 NSWLR 28 at 37; Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607; and Eastern Health v MIA Victoria Pty Ltd (2009) 22 VR 502. In

Watson v Phipps (1985) 60 ALJR 1 the Privy Council construed the words ‘may offer to purchase’ contained in a lease as conferring upon the lessee a legal right to purchase: and see 60 ALJR 476. A provision which, properly construed, compels purchase or renewal is not a true option even though it may be couched in the language of options: Morgan v Savage (1872) 3 ALJR 53. The nature of an option — ‘the standing controversy’ — is considered in D Farrands, The Law of Options and Other Pre-emptive Rights, Lawbook Co, Sydney, 2010, pp 18–28. In conclusion Farrands suggests that the matter is to be resolved in particular instances by construing the words used in the option provision: see pp 30–3, particularly pp 32–3. As to the general rules applicable to the construction of leases, see [6.3]. A good example of the regard that must be had to the actual words used is ACT Aerial Services Pty Ltd v Canberra International Airport Ltd [2000] ACTSC 63 where the court had to construe two clauses in a lease to determine whether their combined effect was to require the landlord to extend the term: the first clause provided that ‘the Commonwealth may grant extensions beyond the fifteen (15) year term certain herein created for up to five (5) year periods at a time to a maximum extension of five (5) years …’; the second clause provided that ‘Unless otherwise agreed between the Commonwealth and the Tenant two (2) years notice will be given by the [page 419] Commonwealth of intention not to extend the term of the lease’. No notice was given by the landlord of its intention not to extend the term. The court held that a while a breach of the second clause entitled the tenant to an award of damages the landlord under the first clause had a discretion as to whether it would grant an extension and therefore the landlord was not required to extend the term. Where the consent of a third party is required, such as a mortgagee, the parties have an obligation under the agreement to do all that is reasonably within their power to ensure that the condition of the agreement is fulfilled: Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231.

Not generally perpetually renewable [14.2] Special provision is often made concerning the rent for the new term, but subject to this the almost invariable provision is that the new lease shall contain the same stipulations as the old lease except the covenant or option for renewal. This express provision is intended to prevent any suggestion that the landlord has granted a perpetually renewable lease. Even in the absence of such an express exception, however, a lease which provides that the new lease shall contain the same provisions as the old one will ordinarily be read down so as to exclude the covenant or option for renewal: Iggulden v May (1804) 9 Ves 325 at 330; 32 ER 628; Swinburne v Milburn (1884) 9 App Cas 844 at 850; Hare v Burges (1857) 4 K & J 45; 70 ER 19; [1843–60] All ER Rep 650; East Coast Commissioner v Kells [1924] NZLR 76; Plumrose Ltd v Real and Leasehold Estates Investment Society Limited [1970] 1 WLR 52; Caerphilly Concrete Products Ltd v Owen [1972] 1 WLR 372; Majorie Burnett Ltd v Barclay (1980) 258 EG 642; Cobram Laundry Services Pty Ltd v Murray Goulburn Cooperative Co Ltd [2000] VSC 353; and Patrick Stevedores Operations (No 2) Pty Ltd v Port of Melbourne Corporation [2016] VSC 528; but there may be special circumstances arising from the nature and purpose of the lease and its terms, such as an ‘escape’ clause that favours perpetuity, as to which see Elesanar Constructions Pty Ltd v Queensland [2007] ANZ ConvR 369 (CA). But where the landlord and tenant signed an endorsement on the lease renewing the lease for a further term of five years ‘on the same terms and conditions as are herein contained’ the tenant was held to be entitled to an option of renewal as provided for in the lease: Benbow v Synod of the Church of England in the Diocese of Adelaide [1954] SASR 320. The lease in Caerphilly Concrete Products Ltd v Owen [1972] 1 WLR 372 was held to be perpetually renewable; and see Nicholson v Smith (1882) 22 Ch D 640, discussed at [14.8].

Uncertainty [14.3] Very general words may be sufficient to confer a valid option of renewal. As a general rule, where the term of the lease containing the option was intended

[page 420] to have legal effect, the courts are reluctant to hold it void for uncertainty: Brown v Gould [1972] Ch 53 at 56–8. So where premises were let for a term of three years commencing from a certain date at a certain rent ‘with the option of renewal’ it was held that the words were sufficiently definite to enable the court, at the instance of the tenant, to carry them out by a decree for specific performance for a renewed lease for the same period, on the same terms, except as to renewal, as those contained in the original lease: Lewis v Stephenson (1898) 78 LT 165; 67 LJQB 296. The option or covenant for renewal frequently makes special provision as to the rent for the new term. At times the question arises whether the provision for renewal is sufficiently certain in relation to rent or some other matter. Where a lease for five years reserved a monthly rental and conferred upon the tenant an option of renewal for a further term of five years ‘at a rental to be agreed upon by the lessor’ it was held that the agreement as to renewal was illusory and imposed no contractual obligations on the landlord as to the amount of rent to be charged for the further term: Beattie v Fine [1925] VLR 363; but a provision such as this is to be contrasted with a provision that, failing agreement, rent is to be determined by a third person: see [14.7]. No binding obligation is imposed by an option for renewal for ‘a further period of three years from the expiration hereof on the same terms and conditions as are herein contained, excepting this clause’, whereby ‘the rental to be payable under any further lease shall be such rent as is mutually agreed upon by the lessor and lessee’: Randazzo v Goulding [1968] Qd R 433. Similarly, an option in a lease ‘that the lessee shall have the option of purchasing the said property for the sum of three thousand pounds on such terms as shall be agreed upon between the lessor and the lessee’ was held to be unenforceable at the instance of the lessee because the option contemplated further negotiations between the parties relating, in the context of that case, to the payment of the purchase price: Re Apps & Sons Pty Ltd and Hurley [1949] VLR 7. But see Re Harlon Pty Ltd (in liq) [1950] VLR 499 at 450. An option of renewal for 21 years ‘at a rent to be fixed having regard to the market value of the premises at the time of exercising this option taking into account to the advantage of the tenant any increased value of such premises attributable to structural improvements

made by the tenant’ has been upheld: Brown v Gould [1972] Ch 53; 1 All ER 1505. For decisions dealing with the question whether provisions for the renewal of share-farming agreements were too uncertain, see Collins v Wragge (1926) 26 SR (NSW) 53; 43 WN (NSW) 35; Hempel v Robinson [1924] SASR 288; O’Callaghan v Olsen [1948] SASR 123. In Andrews v Colonial Mutual Life Assurance Society Ltd [1982] 2 NZLR 556 it was held that ‘the then market rental’ meant the market rental obtaining at the date when the lease was to commence and so provided sufficient agreement as to the basis for the rental payable under the new lease. In the particular circumstances of this case it was held that the correspondence between the parties did not record a concluded contract, even on this basis. However, the plaintiff lessees succeeded on the basis of proprietary [page 421] estoppel. As to matters relevant to the determination of ‘current market rent’, see Edmund Barton Chambers (Level 44) Co-operative Ltd v Mutual Life & Citizens Assurance Co Ltd (1985) 6 NSWLR 312. The mere fact that the proposed rent is to be tied to the Consumer Price Index does not make the clause void for uncertainty: Hely v Sterling [1982] VR 246. The same considerations may not apply in the case of a rent review clause which is to operate within an existing contract: see [11.4]. The mere fact that the provision for renewal recognises that the parties may, if they choose, agree upon further or other terms will not make it bad for uncertainty if in fact it does expressly or by implication show that agreement has been reached on the necessary matters. Where an option was conferred on agreed terms ‘or terms to be mutually arranged’ it was held that the added words did not create any uncertainty: Sydney Eastman Pty Ltd v Southern [1963] NSWR 815; 80 WN (NSW) 458. If the lease contains an option to renew ‘provided that the lessor and lessee shall agree as to the amount of rental to be paid for the extended term of the lease’, the tenant will have no right to renewal unless the rent is agreed upon: Eudunda Farmers’ Co-operative Society Ltd v Mattiske [1920] SALR 309. Sometimes the case is very near the line. In Beattie v Fine, in holding that the promise of a further term ‘at a rental to be

agreed upon by the lessor’ was illusory, Cussen J rejected the argument that there was an implied term that, in the absence of agreement the old rent should stand unaffected or that the lessee should be obliged to pay a rent which the court should fix as reasonable, or which the court should fix as that which the lessor, acting bona fide, would or ought to have agreed to. (On the question of whether there is an enforceable option where a subject matter of the option is left for the determination of one of the parties as distinct from his or her solicitor, see Godecke v Kirwan (1973) 129 CLR 629 at 641–2, 646–7.) On the other hand, in Re Nicholas & Grant’s Lease (1923) 44 ALT 169, Irvine CJ held to be sufficiently certain a clause as follows: ‘The tenant has the option of renewing this tenancy for a further period of two years from the expiration hereof subject to the landlord’s right to review or increase the rental’. It was held that the word ‘reasonably’ should by necessary implication be read into the clause after the words ‘review or increase’. An option for renewal ‘at such a rental as may be agreed upon between the parties hereto’ was held to be unenforceable in King’s Motors (Oxford) Ltd v Lax [1970] 1 WLR 426, on the ground that it was merely a contract to make a contract: Brown v Gould [1972] Ch 53 at 58; and see Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 and Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 which are considered in detail in connection with the effect of a provision that the rent for a new term is, failing agreement, to be determined by a third person: see [14.7]. In Hamey v Nelson [1878] 1 SCR (NS) (NSW) 178, the covenant in a lease for three years for renewal ‘for any time he may desire’ was held to have been broken by a refusal to grant a lease for 90 years. See further the discussion in [4.2] of the question what would amount to a sufficiently certain agreement for a lease. [page 422] In Austin v Newham [1906] 2 KB 167, a shop and dwelling were let for a period of 12 months ‘with the option of a lease of the same after the aforesaid time at the rental of £30 per annum’. This was construed as entitling the tenant, upon the exercise of the option, to a tenancy for at least a further

period of one year; one of the members of the court, Kennedy J, suggested that the further term might be for the life of the tenant. In Howey v Dolan [1915] VLR 297, the landlord agreed to pay municipal rates, water rates and charges for water and sanitary or sewerage rates. There was an option of renewal, whereby the rent was to be ‘not more than £10 per week net’. Cussen J held that, notwithstanding the use of the expression ‘net’, the new lease should contain the special provisions of the old lease, whereby the landlord had agreed to pay rates. Where a building lease provided that the rent was to be determined by arbitrators ‘as the fair and reasonable rent of the said premises calculated on the basis of the unimproved value of the said lands’ it was held that these words did not require the rent to be determined only upon the earning power of the unimproved value of the land without reference to the duration or terms and conditions of the tenancy: Re Brechin and Drapery Importing Co Ltd [1928] NZLR 241. An option to be exercised by registered letter sent ‘not later than (blank) calendar months prior to the expiration of the term hereby granted’ was good, the lessee being entitled to send the notice at any time before the expiration of the term: Spectra Pty Ltd v Pindari Pty Ltd [1974] 2 NSWLR 617. A covenant to renew the lease which provides, in substance, that the new lease will contain ‘the like covenants and provisos as are herein contained’ (except for the covenant for renewal) usually contemplates that the parties will continue their relationship for a further period without changing the status quo (save for a further renewal): Mark Mayne Pty Ltd v Suburban Centres Pty Ltd [1976] 2 NSWLR 67. In that case, the original lease required the tenant to pay so much of the relevant rates and taxes as were in excess of the amount thereof ‘at the commencement of the term of this lease’. In establishing the amount of rates and taxes that the tenant would have to pay under the new lease, the relevant starting date for the calculation of that amount was held to be the date of the commencement of the original demise. In Mestros v Blackwell (1974) 8 SASR 323 a three-year lease merely provided that the lessees should ‘be entitled to a renewal of this lease on the same terms and conditions’ (without a further right of renewal). The rental for the renewed lease was stipulated at an increased amount. Wells J held that although the words ‘the same terms and conditions’ did not relate to the term of years, the words ‘they shall be entitled to a renewal of this lease’ should be construed as

implying that the lessees should be entitled to a renewal for the period of the original lease, namely three years. His Honour (at 327) was of the view that the approach of reading a presumed intention into a document to give it business efficacy is more properly applied to purely commercial documents and commercial enterprises rather than to conveyancing documents. As to this view, see United Scientific [page 423] Holdings Ltd v Burnley Borough Council [1978] AC 904; but see the authorities referred to and discussed at [6.7]. The relevant date for determining whether an option is enforceable is at the date of the lease: Downward Bricklaying Pty Ltd v Goulburn-Murray Rural Water Authority (2003) 8 VR 61. In Downward the tenant contended that an option clause should be given a particular construction that favoured it because otherwise the option clause contained an illusory promise. The tenant’s contention was rejected on the basis that the time for determining whether an option clause was enforceable was the date on which the lease was made, at which time the promissory content of the option clause was not illusory. The usual rules of construction apply to option provisions as apply to leases and contracts generally: see Brennan v Kinjella (1993) 6 BPR 97,442; and see [6.3]. In the absence of clear words to the contrary, a contract is to be construed in a commercially rational manner: see Antaios Cia Naviera SA v Salen Rederierna AB [1985] AC 191, MFI Properties Ltd v BICC Group Pension Trust Ltd [1986] 1 All ER 974 and Patrick Stevedores Operations (No 2) Pty Ltd v Port of Melbourne Corporation [2016] VSC 528 (Croft J); as to the construction of written documents see also Santow J in Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290 at 298–300 and Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912–14. Nevertheless an alleged fresh agreement to renew a lease will not be enforceable unless at least the essential terms of such a lease have been agreed upon: see Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 90 ALJR 770, particularly at 780, [31] (French CJ and Kiefel and Bell JJ), referring to Thorby v Goldberg (1964) 112 CLR 597 at 607; Beattie v Fine

[1925] VLR 363, referred to in Placer Development Ltd v Commonwealth (1969) 121 CLR 353 at 360.

First refusal [14.4] Where the lease provided that the lessor would grant to the lessee first refusal of a further five years’ lease, it was held that, notwithstanding that the clause described itself as an option of renewal, the provision was not the equivalent of a covenant for renewal and the lessee was only entitled to first refusal in the event that the lessor proposed to lease and wanted a tenant: Scott v Skinner [1947] NZLR 528, applying Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37; [1900–3] All ER Rep Ext 1537; and see generally Pata Nominees Pty Ltd v Durnsford Pty Ltd [1988] WAR 365 (FC) at 371–2 (per Burt J); and Pritchard v Briggs [1980] Ch 338 (CA). Where the lease confers on the lessee a pre-emptive right (as distinct from an option) to purchase the subject property upon terms and conditions which the lessor can in fact obtain from a purchaser ready, willing and able to purchase it, there must be an offer by the lessor and an acceptance by the lessee in the relevant sense, before there can be a binding contract of sale. A letter written on behalf of the lessor to the lessee, [page 424] enclosing a copy of a contract of sale pursuant to which the lessor intended to sell the property to a purchaser and informing the lessee that the property was available to him or her to buy at the price and on the conditions set out in the contract, constitutes an offer on the part of the lessor which is capable of being accepted by the lessee and, if that is done, a binding contract of sale comes into existence between the lessor and the lessee (subject to the possible application of legislation providing for a ‘cooling off’ period; for example, Sale of Land Act 1962 (Vic) s 31, or imposing other requirements that must be met before the contract is binding). This is so even if the lessee, in his or her letter of acceptance, requests the lessor to sell the subject property to a company of

which the lessee is the sole owner: 409 Lonsdale Street Pty Ltd v Carra [1974] VR 887. In that case (at 892), the question of enforceability of a pre-emptive right given to a lessee when he or she assigns the term only, but not the right, was raised, but not decided by Lush J. A prospective lessee of premises should be informed by the lessor about another person’s right of first refusal to lease the subject premises: Mikaelian v Commonwealth Scientific & Industrial Research Organisation (1999) 163 ANZ 172; [2001] ANZ ConvR 139; (1999) NSW ConvR ¶55-909. In Mikaelian the court held that, while the lessor and the lessor’s agent had engaged in misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (now s 18 of the Australian Consumer Law) in failing to inform the prospective lessee about the right of first refusal, it was inappropriate to grant a declaration to that effect where the prospective lessee had not suffered any damage. The presence of a pre-emption clause in a lease does not by itself give rise to an equitable interest in the leased land in favour of the lessee: Mackay v Wilson (1947) 47 SR (NSW) 315 at 325 per Street J; see also Robertson v Lagreg Investments Pty Ltd [2004] VSC 86. In Robertson v Lagreg Investments Pty Ltd [2004] VSC 86 a lease contained a pre-emption clause in favour of the lessee that provided that, if the lessors desired or proposed to sell the premises, the lessors had to make an offer in writing to the lessee which was to remain open for 30 days. The lessors informed the lessee that they intended to offer the premises for sale at auction for $5,250,000. The lessors made a written formal offer to the lessee to sell at that price and upon the terms of an enclosed contract of sale and expressed to be made in compliance with the pre-emption clause and to be open for 30 days. The premises were sold at an auction that was held before the expiry of the offer to the lessee and before the lessee had accepted the offer. A special condition in the contract of sale provided to potential purchasers at the auction stated that the vendor was obliged by the terms of the lease to offer to sell the property to the lessee and that the vendor had delivered the offer to the lessee and that if the lessee accepted the offer the contract would be cancelled. After the auction the lessee accepted the offer. The question in the litigation was whether the special condition operated to cancel the contract of sale made at the auction. The purchaser at

[page 425] the auction contended that the offer made by the lessors to the lessee did not comply with the pre-emption clause. The court held that the contract had been cancelled by the lessee accepting the offer because the special condition in the contract of sale was not restricted to an offer that complied with the pre-emption clause. While not required to do so, the court decided that if an offer had been made by the lessor to the lessee that complied with the preemption clause the lessee would, at that time, have acquired an equitable interest in the land: as to this issue see also Mackay v Wilson at 325 cited with apparent approval in Woodroffe v Box (1954) 92 CLR 245 at 254 per Fullagar, Kitto JJ; Transfield Properties (Kent St) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 at 343 per Santow J; Beneficial Finance Corporation v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510 at 526 per Young J; Motor Works Ltd v Westminster Auto Services Ltd [1997] 1 NZLR 762 at 765–6 per Tipping J; Jonns v Kim Seong Tan [1999] NSW SC 64 at [13] per Santow J; Bob Jane TMarts Pty Ltd v The Baptist Union of Victoria [1999] VSC 346 per Warren J. A right of pre-emption by which a promisor promises not to sell his or her land without first offering it to the promisee cannot be defeated by disposing of the property otherwise than by way of sale: THL Robina Glades v Glades Golf Club Pty Ltd [2005] 2 Qld R 286; Gardner v Coutts & Co [1968] WLR 173; Esso Australia Ltd v Air Ride Transportation Pty Ltd (unreported, Supreme Court of Victoria, 28 September 1988). The question of what dealings can be undertaken by a landlord with respect to land that is the subject of a preemption clause contained in a lease is answered by construing the lease as a whole in accordance with the principles governing the construction of commercial documents: see Peppercorn Holdings No 1 Pty Ltd v DDH Graham Ltd [2006] QSC 156; see also Woodroffe v Box (1954) 92 CLR 245. A right of pre-emption clause contained in a lease by which a lessor promises not to sell his land without first offering it to the lessee does not ‘touch and concern’ the land with the consequence that, in the absence of privity of contract between the lessor and the lessee, the right of pre-emption cannot be enforced: Sandhurst Trustees Ltd v Australian Country Cinemas Pty Ltd [2006] QSC 165.

In Chipper v Octra Nominees Pty Ltd [2006] FCA 1633 the court at first instance held that the lessor’s promise to first offer the land to the lessee was held on trust by the lessee (the sublessor) for the sublessee. The sublessee sought and was granted specific performance of the lessor’s promise contained in the head lease to first offer the land to the lessee (the sublessor). The decision was overturned on appeal with the decision on appeal turning entirely on the construction of the clause containing the right of first refusal: see Octra Nominees Pty Ltd v Chipper (2007) ANZ ConvR 455. The sublessee had been offered the land on the same terms as a proposed third-party purchaser but had rejected the offer. After a binding contract was made with the third-party purchaser the binding contract was varied. The Full Court of the Federal Court had to decide whether the right of first refusal was revived by the variation of [page 426] the contract of sale and whether an offer in terms of the varied contract had to be made to the holder of the right of first refusal. The court decided that the entry into the contract of sale exhausted the right of first refusal and therefore the right of first refusal was not revived.

Effect of exercise of option [14.5] Until the option is exercised, no new or additional interest passes to the lessee: Gerraty v McGavin (1914) 18 CLR 152 at 163. In practice the lessee having an option to renew often duly gives notice exercising his or her option and then remains in possession, the parties seemingly not adverting to the need to prepare and execute a new lease. The mere exercise of the option of renewal does not create any legal estate (Garbutt v Naughton (1874) 5 AJR 70), but the effect of the due exercise of an option contained in a written lease is that an agreement is made for the grant of the further lease, being an agreement which the tenant is ordinarily entitled to have specifically performed; accordingly, in equity, the tenant is regarded as having a lease for

the further term: Garbutt v Naughton; Blackwell v Smyly (1866) 3 WW & A’B (Eq) 1; Healy v Southern Milk Transport Pty Ltd [1954] VLR 448 at 459; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC, NSW, per Powell J); Lee v Ferno Holdings Pty Ltd (1993) 33 NSWLR 404 (CA); and see Duncan Properties Pty Ltd v Hunter (1991) 1 Qd R 101. In Tenstat Pty Ltd v Permanent Trustee Aust Ltd (1992) 28 NSWLR 625, McLelland J said (at 629): ‘It is only the fulfilment by the lessee of all the conditions prescribed for the acceptance of the offer constituted by the option that results in an agreement for a renewed lease: Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) SR (NSW) 122 …’; and see [14.1]. In Todburn Powell J summarised the position, both at law and in equity (at 11,174–5): In the result, therefore, the result of the defendant’s exercise of the option to renew, coupled with its remaining in possession and paying rent, was to confer upon the parties rights, and to subject the parties to obligations, at law, in contract, in equity as landlord and tenant for a term, and, at law, as landlord and tenant under a lease at will terminable upon a month’s notice. As to tenancies at will, see [2.15]. See also Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55-459 and the cases referred to at [14.7]; and, with respect to a right of first refusal to purchase, Transfield Properties (Kent Street) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 at 341–3. In such a case, if the lessee wishes to obtain specific performance of the agreement for a further term, or to resist proceedings for the recovery of possession on the ground that he or she has in equity the further term, it is unnecessary to consider whether there has been some act of part performance on the part of the lessee: see [4.5]. In this case, the written lease serves as a sufficient note or memorandum for the purposes of s 126 of the [page 427] Instruments Act 1958 (Vic) (and see Conveyancing Act 1919 (NSW) s 54A; Property Law Act 1974 (Qld) s 59; Law of Property Act 1936 (SA) s 26; Conveyancing and Law of Property Act 1884 (Tas) s 36; Statute of Frauds 1677 (WA) s 4 as amended by the Law Reform (Statute of Frauds) Act 1962);

and see [4.3]. This is so even if there is no written notice of exercise of option which will serve as a note or memorandum to enable the lessor to enforce the agreement for renewal against the lessee, provided that the option has been duly exercised: Healy v Southern Milk Transport Pty Ltd. The due exercise by a lessee of an option of renewal is ‘reasonable cause why possession should not be given’ within the meaning of s 33 of the Landlord and Tenant Act 1958 (Vic) (a provision repealed as from 1 September 2012 — see LL&T Comparative Table; and note provisions in other states for summary proceedings to recover possession): Dalton v O’Gorman [1921] VLR 599; Healy v Southern Milk Transport Pty Ltd. Similarly, the equitable rights or interest arising from the exercise of the option may be set up as a defence to an action for the recovery of the land brought by the landlord. In the same way, in the case of land under the general law, having regard to the rule in Hunt v Luck [1902] 1 Ch 428; [1900–3] All ER Rep 295, whereby the possession of a tenant is notice of any right of the tenant affecting the title to the land, a tenant who has exercised an option of renewal is protected as against an assignee of the reversion: Blackwell v Smyly (1866) 3 WW & A’B (Eq) 1 at 7; Lewis v Stephenson (1898) 78 LT 165. Moreover, in the case of land under the operation of the Transfer of Land Act 1958 (Vic), a tenant in possession who has exercised an option of renewal is protected by s 42 of that Act, whereby the estate of the registered proprietor of the land is subject to the interest of a tenant in possession of the land. In McMahon v Swan [1924] VLR 397, it was held that s 42 protected a tenant in respect of an option to purchase; the effect of this decision was nullified when s 42 was amended so as to exclude options to purchase, but the reasoning of the decision leads to the result that an option of renewal is still protected. In New South Wales an agreement for an option is protected if the additional term for which it provides would not, when added to the original term, exceed three years: Real Property Act (1900) s 42(1)(d); and see United Starr-Bowkett Cooperative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331; Clyne v Lowe (1968) 69 SR (NSW) 433; 195 Crown Street Pty Ltd v Hoare; Ivermee [1969] 1 NSWR 193; see also Land Title Act 1994 (Qld) s 185(1)(b); Real Property Act 1886 (SA) s 69(h); Land Titles Act 1980 (Tas) s 40(3)(d); Transfer of Land Act 1893 (WA) s 68.

Lessee in breach of covenant [14.6] Option clauses commonly provide in substance that the option shall be exercisable only if the lessee has duly observed and performed his or her obligations under the lease. Such provisions are construed strictly against the lessee; they create a condition precedent to the exercise of the option. Any failure by the lessee to [page 428] perform his or her covenants, however trivial, is a failure to satisfy the conditions upon which alone his or her right to exercise the option depends. On the other hand, if a breach has been committed, but has been remedied prior to the time of exercise of the option, the condition may be treated as satisfied: Finch v Underwood [1876] 2 Ch D 310; Wilson v Stewart (1889) 15 VLR 781; Healy v Southern Milk Transport Pty Ltd [1954] VLR 448; and see Reed v Sheehan (1982) 56 FLR 206; Commonwealth of Australia v Giorgio (1986) 67 ALR 244 (FC, FCA) at 249; and Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493 (CA) considered below. It should be noted that the failure to perform the condition precedent will prevent the tenant from exercising the option even though the landlord has waived his or her right to forfeit for breach of the covenant: Wilson v Stewart (1889) 15 VLR 781; Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) SR (NSW) 122; 76 WN (NSW) 72; MacDonald v Robins (1954) 90 CLR 515; McGregor Motors Ltd v Barton [1956] NZLR 297; B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589 (FC) at 594–5 (per O’Bryan J) and 603–4 (per Gray J); Rethmeier v Pioneer House Pty Ltd (1990) 6 BPR 97,450 (SC, NSW, per Bryson J); and see Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505 at 511–13 (as to options to renew with particular reference to s 14(5) of the now repealed (but nevertheless applicable to any leases to which it applied) Retail Tenancies Act 1986 (Vic)); Re Copperart Pty Ltd (1995) 16 ACSR 351 (SC, Qld, per White J); compare Zacharia v Ajay Investments Pty Ltd & Chan (1982) ANZ ConvR 652 at 654 (with respect, the reference there to Gilbert J McCaul does not appear to be supported by that

decision: see at (1959) SR (NSW) 124). In Sperry Rand Australia Ltd v Arrandale Properties Pty Ltd [1979] VR 409, where that right to exercise the option was made conditional upon the tenant ‘duly and punctually’ paying the rent reserved at the times stipulated in the lease, the failure by the tenant to make each payment of rent on or before the due date deprived him of renewal of the lease. In Rethmeier v Pioneer House Pty Ltd it was held that it was a condition of the right to take a renewed lease that the covenants and payments relating to the payment of rent (among others) must be performed and observed at all times up until the expiry of the lease. These cases highlight the need to have regard to the proper construction of the words of each particular option provision; particularly as the occurrence of certain events, such as an insolvency event, may not amount to a breach of covenant in this context: see St George Bank Ltd v JB (Northbridge) Pty Ltd (2009) 262 ALR 538 at 542–44, [11]–[14] (Brereton J); affirmed on appeal, see JB (Northbridge) Pty Ltd v St George Bank Ltd (2010) 15 BPR 28,933, [12]–[21] (Giles JA, with whom Handley and Sackville AJJA relevantly agreed). See also Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55-459; Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR ¶55-496; and Brennan v Kinjella (1993) 6 BPR 97,442 in this respect; which with Rethmeier are discussed in D Skapinker, ‘A lessor’s rights and obligations on exercise of an option to renew a lease’ (1994) 68 ALJ 217. [page 429] The strict view taken in the Sperry Rand case appeared to echo the views of Dixon CJ in MacDonald v Robins (1954) 90 CLR 515 at 519, and settled authority. In considering that case, Lush J said in the Sperry Rand case (at [1979] VR 411–12): In that case Dixon CJ, dealing with a condition precedent to an option of purchase given in a lease which was expressed in the terms, ‘the lessees having duly observed performed fulfilled and kept all the covenants condition agreements and stipulations’, said at (CLR) p 519, (ALR) p 155 ‘No doubt these words make it essential to the right to exercise the option that the lessees’ covenants in the lease have been so

observed and performed that there is no existing right of action under them at the time when the option comes to be exercised’. And, at 412–13: As was observed during the argument, it is curious that in many of these cases the principle referred to in the quotations which I have taken from MacDonald v Robins and Healy’s Case was stated by way of obiter dictum but it is so well established by such high authority that it is not possible for me to depart from it. However, the essential question is a question of construction of the particular clause before the court. From the start, in Finch v Underwood, [(1876) 2 Ch D 310] in the classic passage from which the various statements are all derived, Mellish, LJ posed the question: ‘What does duly observe and perform mean?’ And it was that question that he purported to answer in formulating what is at times treated as a principle. That the task is one of construction is emphasized in the sentences immediately following the passage which I quoted from the judgment of Dixon, CJ. Those sentences go on to say, at (CLR) p 519, (ALR) p 155: ‘Moreover it is immaterial that the forfeiture arising from the breach of covenant has been waived as a breach of condition: … But the question is whether the covenant upon which the defendant depends in this appeal was broken’. So also Dean, J in Healy’s Case at (VLR) p 456, (ALR) p 849, a few lines later than the passage which I quoted, said that ‘the question in each case is one of interpretation of the words in which the condition is expressed’. Lush J continued (at 415): Further, the cases from Finch v Underwood, [(1876) 2 Ch D 310] onwards show that a consideration relevant to the question whether there is a right of forfeiture or whether there has been a waiver of a right of forfeiture are not relevant to the consideration of the question whether there has been compliance with the conditions precedent to the exercise of an option. This last statement of Lush J (at 415) was cited with approval by the

Victorian Full Court in B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 599 and 601. The effect of there being ‘no existing right of action’ (see Lush J at 411–13, above) when the option came to be exercised was not pursued. In Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493, the Court of Appeal carefully considered the authorities and rejected what might be termed the strict view in favour of a more flexible view which gives more weight to the needs and realities of commercial life. [page 430] The lease contained the usual types of covenant to be found in lettings of commercial premises, both positive and negative, and an option to renew drafted in the usual form. The appeal was concerned with ‘spent breaches’ rather than ‘subsisting breaches’. In the former case the breach or breaches ‘occurred in the past, so that its effect is spent by the operative date in question’ whereas in the latter case ‘there is still a breach (or at any rate a cause of action based on a breach, whether for forfeiture or damages or both)’: at 517. It is implicit that any cause of action must be for other than nominal damages: see at 533 per Nicholls LJ. Thus, the crucial question was whether the condition precedent that there must be no material breaches of covenant by the tenants applies to spent as well as to subsisting breaches. By way of answer Kerr LJ said (at 518): (2) … This question is covered by dicta in numerous cases, going back in particular to Grey v Friar (1854) 4 HL Cas 565, 10 ER 583, and by the decision of Clauson J in Simons v Associated Furnishers Ltd [1931] 1 Ch 379, [1930] All ER Rep 427. The upshot of these authorities is that spent breaches will not destroy the tenant’s right to exercise the option, but subsisting breaches will. As shown by the passages to which I refer below, the reasoning is in effect as follows. Firstly, it must be accepted that absolute and precise compliance by the tenant with every single covenant throughout the period of the lease prior to the operative date is virtually impossible of attainment. If this were required as a

condition precedent, then the option would in practice be worthless or merely at the mercy of the landlord. Therefore the parties cannot have intended that the absence of spent breaches should be a condition precedent. Secondly, however, it is natural and sensible that the landlord should require the tenant not to be in breach of any covenant on the operative date and that all outstanding claims for breach of covenant should have been previously satisfied, so that the lease is then effectively clear. The proviso is therefore to be construed as intended to apply to subsisting breaches, with the result that the relevant condition precedent is the absence of any subsisting breach. The first point in the reasoning contrasts with the Sperry Rand case and highlights the problems associated with that approach: see Nicholls LJ at 528– 9, who also notes the difficult position in which that approach puts assignees from the lessee. Nevertheless, the possibility of drafting an option to apply also to spent breaches was considered a possibility, if a remote one. Thus, Kerr KJ continued (at 518–19): (4) Subject to the question whether the wording of any particular proviso imposes a condition precedent to the exercise of the option, which was the issue in Grey v Friar (1854) 4 HL Cas 565, 10 ER 583, the precise words used in such provisos in relation to the observance of the covenants have played no part in the conclusions summarised in (2) above. While it would of course be possible to formulate a proviso which is sufficiently explicit to cause spent breaches to preclude the exercise of the option, there appears to be no reported case in which this was so; and the wording of the proviso in the present case is in a form similar to, and effectively indistinguishable from, the formulations adopted in all the cases subsequent to Grey v Friar. Accordingly, in mentioning some of these cases below, it would serve no purpose to set out the precise terms of the particular provisos. [page 431]

And, having reviewed the authorities (at 519–20): (7) The upshot, in cases such as the present, is that we are nowadays dealing with what has become a standard conveyancing formula imposing a condition precedent concerning the absence of (material) breaches of covenant in relation to the exercise of virtually an[y] tenants’ option in leases. The unanimous consensus on the authorities in relation to a proviso such as the present is as summarised in (2) above, viz that the condition applies to subsisting breaches and not to spent breaches. There is no reported case in which any tenant’s option has been defeated by a spent breach, and virtually none in which this has even been suggested. In these circumstances it is in my view of greater importance that this accepted long-standing interpretation of provisos such as the present should be respected and upheld, since it must have been relied on and applied in countless transactions. The authorities considered by Kerr LJ concerned breaches of positive rather than negative covenants. The trial judge had drawn a distinction between positive and negative covenants in the sense that a breach of a positive covenant can be remedied, if belatedly, but a breach of a negative covenant is irremediable. Kerr LJ rejected the distinction for present purposes (at 520): (9) With all due respect, I cannot agree with this analysis or with the conclusion to which it leads. It is not based on any commercial or other practical consideration. Its effect would be entirely fortuitous. Thus, as mentioned at the beginning of this judgment, many of the covenants in this lease in common form contain both positive and negative obligations in one provision, and other obligations to the same or similar effect have been expressed in the form of both positive and negative covenants. I do not see on what realistic grounds it could be said that the intention of the parties was that spent breaches of positive covenants should be irrelevant, but that any breach of any negative covenant, albeit equally ‘spent’ in its practical effect, should disqualify. The reasoning of other members of the Court of Appeal was very similar on all points. In spite of the fact that there are some problems with the view

that spent breaches do not bar the exercise of an option, as it denies a lessor the chance to be rid of a troublesome tenant constantly in breach of covenants, though the breaches are subsequently remedied, it does have attractions. MacDonald v Robins (1954) 90 CLR 515 would not appear to be any obstacle in spite of its treatment in the Sperry Rand case because the covenant in question was the covenant by the lessees not to transfer, assign or sublet. Thus, it followed that a breach would leave a subsisting breach, or at least a cause of action for more than nominal damages. In these circumstances the statements of Dixon CJ are not inconsistent with the decision of the Court of Appeal, which was not concerned with subsisting breaches. Circumstances may arise where the lessor is estopped from denying the lessee’s right to exercise the option, in spite of a breach of covenant: Milos Nominees Pty Ltd v F J and M J Parker Pty Ltd (1981) 2 BPR 9248. In S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 the Full Federal Court held, on the basis of Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (equitable estoppel), that [page 432] the sublessors came under a duty to inform Tobin Brothers that the assumption that it was not necessary to exercise any option under the proposed new sublease was wrong. The court also noted that the finding of an equitable estoppel was the basis for equitable relief, and that equitable relief may come at a price on the basis that a successful party seeking equity must be prepared to do equity: see at 122 ALR 653. It was also noted by the court (at 653) that there is no comparable common law precept of such wide application. In Lee v Ferno Holdings Ltd (1993) 33 NSWLR 404 (CA) at 407, 413 it was held that the doctrine of estoppel by convention prevented sublessees from denying the validity of a renewed sublease where all parties had acted on the basis that the purported sublease was valid and had been validly renewed: applying Commonwealth of Australia v Verwayen (1990) 170 CLR 394; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; and Thompson v Palmer (1933) 49 CLR 507. See also Zacharia v Ajay Investments Pty Ltd and Chan (1982) ANZ ConvR 651 at 654; and Commonwealth of

Australia v Giorgio at 67 ALR 250; and see [1.15] as to leases created by estoppel and estoppel generally. In Ninubon v Gag Pty Ltd (1998) 9 BPR 16,479 a tenant contended that because of representations made in a conversation the landlord was estopped from relying on the requirements for exercising an option contained in the lease. After rejecting the contention that the words allegedly used gave rise to the representation alleged, Young J said (at 16,484): The court also bears in mind that ordinarily parties expect each other to observe their contractual obligations because they have laid them down for a purpose. The court does not encourage people who fail to do that to put forward some estoppel case as a back stop. There will be some cases where estoppel can be relied on, but they are the exception rather than the ordinary case. Many leases provide that it is a condition of the exercise of an option that the tenant has complied with the terms of the lease and not breached the lease. In such cases a landlord cannot deny that the option has been exercised in reliance on breaches that have been waived by the landlord: see Health Partners Incorporated v Gonos (1996) 67 SASR 338; and see Domino’s Pizza Enterprises Ltd v Seldex Pty Ltd [2009] QSC 137. In Health Partners Incorporated a landlord reduced the rent payable by the tenant because of poor economic conditions to a level below that provided for in the lease. The tenant paid the reduced rent. The landlord sold the premises and the tenant paid the reduced rent to the new landlord without any objection by that landlord. The tenant then exercised an option contained in the lease for a further term. The new landlord contended that the option had not been exercised because the tenant had breached the lease by paying a lower rent than provided for in the lease. It was a condition of the exercise of the option that the tenant had complied with all the covenants, terms and conditions of the lease and had not committed any breach or breaches and at the time of the exercise there was no subsisting breach. The court rejected the new landlord’s contention, holding that the new landlord could not rely on breaches of the lease that had been waived [page 433]

by it or breaches that occurred before the new landlord became the registered proprietor of the premises. There may also be conduct by the lessor that is properly characterised as a fresh offer without the conditions attaching to the option and capable of acceptance by the lessee: 8 Parriwi Road Pty Ltd v Raffan [1970] 2 NSWR 428; and see Reed v Sheehan (1982) 56 FLR 206, where the argument failed. The loss of the right to exercise an option is not relieved either by the longstanding statutory provisions providing relief against forfeiture of leases, such as s 146 of the Law of Property Act 1925 (UK) (re-enacted, for example, as s 129(1) of the Conveyancing Act 1919 (NSW) and as s 146 of the Property Law Act 1958 (Vic)), or generally in equity: Greville v Parker [1910] AC 335; Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1064; Evanel Pty Ltd v Stellar Mining NL [1982] 1 NSWLR 380, especially at 386 (affirmed on appeal, (1983) NSW ConvR ¶55-118); but see [14.11]. In 1928 New Zealand moved to overcome this limitation in the jurisdiction of the courts to grant relief against what, in many cases, amounts to a forfeiture. Similar legislation has now been enacted in New South Wales (Conveyancing Act 1919 Pt VIII Div 4 ss 133C–133G, inserted by Conveyancing (Amendment) Act 1972; see 46 ALJ 209 at 210 and NSWLRC Report 5) and Queensland (Property Law Act 1974 ss 123–8, based on the New South Wales provisions: see QLRC Report 16, p 87); and see Property Law Act 1969 (WA) ss 83A–83E. These statutes confer jurisdiction to grant relief against forfeiture where the right to renew has been lost by reason of some breach of covenant: see Lewis v Bentley [1977] 1 NSWLR 743. In Australian Aggregates (NSW) Pty Ltd v Maxmin Pty Ltd [1988] ACLD 576 it was held that these provisions do not apply to licences: see at 69. In Evanel Pty Ltd v Stellar Mining NL the origins and operations of the New South Wales provisions were considered in detail by Wootten J (at 386–7): In 1928 the New Zealand legislature enacted provisions (which appear now in an amended form as the Property Law Act 1952, ss 120 and 121) to confer upon the courts the jurisdiction to grant the relief which Greville v Parker (a New Zealand appeal) had held they did not possess. The legislature may also have had in mind the decision in Birch v Prouse [1922] NZLR 913 (Vince Bevan Ltd v Findgard Nominees Ltd [1973] 2 NZLR 290 at 294).

In 1967 the Attorney-General for New South Wales made a reference to the New South Wales Law Reform Commission in the following terms: To review the law relating to provisions in leases enabling the tenant to renew the lease or to purchase the leased premises and incidental matters. The Commission, in its ‘Report on Options in Leases’, LRC 5 (1968), referred to Gilbert J McCaul Pty Ltd v Pitt Club Ltd, and said (at 4): The result of the judgment of the Full Court would appear to be that a breach of a covenant, however trivial and however long before the time of exercise of the option the breach may have occurred, prevents the exercise of the option although the lessor may have waived the breach so far as concerns forfeiture of the original term. [page 434] Such a condition could operate harshly, especially where the option is an option to purchase the leased property. The Commission also said (at 5): In our work under this reference we considered the comparable legislation in New Zealand, sections 120 and 121 of the Property Law Act, 1952. The proposed Bill gives effect to the broad principles of those sections. The draft bill did not follow the New Zealand legislation in detail, and the legislation that was enacted by Parliament four years later was more elaborate than the recommendation of the Commission. However, the New South Wales legislation and the New Zealand legislation do have a broadly common purpose and both give a discretion to the courts to grant relief in similar wide terms.

The New South Wales legislation is in the Conveyancing Act, ss 133C–133G. They extend to options contained in a lease which give the lessee a right to require the lessor (a) to sell or offer to sell to the lessee the reversion expectant on the lease; or (b) to grant or offer to grant to the lessee a renewal or extension of the lease or a further lease of the demised premises or a part thereof: s 133C. If a lessor wishes to rely on a breach of the lease by the lessee as precluding the lessee from exercising an option, he or she must within fourteen days after the purported exercise of the option by the lessee, serve on the lessee a notice specifying the acts or omissions and stating that subject to an order of the court under s l33F the lessor proposes to treat the breach as having precluded the lessee from exercising the option. The lessee then has a period of one month in which to seek relief from the court against the effect of the breach: s l33E. The court has jurisdiction to make such orders as it thinks fit for the purpose of granting the relief sought, or to refuse the relief. It may make an order on such terms as to cost, damages, compensation or penalty, or on such other terms as it thinks fit, and may make any consequential or ancillary order it considers necessary to give effect to its orders: s 133F(2) and (4). Section 133F(3) provides that in proceedings for relief the court may take into consideration (a) the nature of the breach complained of; (b) the extent to which, at the date of the institution of the proceedings, the lessor was prejudiced by the breach; (c) the conduct of the lessor and the lessee, including conduct after the giving of the prescribed notice referred to in section 133E(2); (d) the rights of persons other than the lessor and the lessee; (e) the operation of s 133G; and (f) any other circumstances considered by the court to be relevant. Section 133G is in the nature of a machinery provision supplemental to s 133E, directed to continuing the lease in force until the issue is decided by the court. The result of the sections is that the lease in this case has continued in force pending the disposal of the proceedings. Section 133G is not otherwise relevant.

At 388 Wootten J said that the court should: … approach the exercise of the discretion in accordance with the long established equitable principles regarding forfeiture of leases, except insofar as those principles may be inconsistent with the legislation or with any policy indicated by it, or inappropriate having regard to the nature of the matter against which relief is given … [page 435] The operation of these provisions has since been considered in a number of cases: see Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55-459; Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR ¶55-496; Rethmeier v Pioneer House Pty Ltd (1990) 6 BPR 97,450; Brennan v Kinjella (1993) 6 BPR 97,442 (which are discussed in the article by Skapinker, above); Flagstaff Investments Pty Ltd v Cross Street Investments Pty Ltd (1999) 9 BPR 17,067; Best & Less (Leasing) Pty Ltd v Darin Nominees Pty Ltd (1994) 6 BPR 13,783; Dad & Dave Pty Ltd v W & J Nicholls Pty Ltd [2005] NSWSC 415. Except for Best & Less (Leasing) Pty Ltd and Dad & Dave Pty Ltd these cases have principally dealt with the problems arising under these provisions where the tenant is not in breach of covenant at the date of exercise of the option but is in breach at the expiration of the lease. In considering these decisions regard must be had to the terms of the particular option provisions; and see [14.6]. In Beca Developments Young J held that equitable rights came into existence on the giving of the notice of exercise of option by the tenant. These were subject to forfeiture by the landlord but s 129(1) of the Conveyancing Act 1919 had to be complied with and that had not been done. On the other hand in Nessmine Hodgson J construed as a condition precedent to the valid exercise of the option to renew the requirement that there be no breach at the expiration of the lease being renewed. On that condition not being satisfied a notice was required under s 133E(2). Alternatively Hodgson J adopted the reasoning of Young J in Beca Developments to achieve the same result (at 58,618). In Rethmeier the option provisions required due and punctual payment of rent after the notice of exercise of the option by the tenant. Bryson J held that these breaches precluded the valid exercise of the

option and that the tenant was not entitled to relief against forfeiture under any statutory provisions for relief. In Brennan v Kinjella Young J found that the option had not been validly exercised. However, his Honour went on to consider the question whether s 133E relates only to past breaches that have been remedied or whether it also extends to current breaches. It was submitted for the landlord that s 133E does not apply where there are existing breaches. Young J said that this section covered both current and spent breaches (at 13,173–5): There are four cases decided over the last five years which must be considered in connection with this submission. The first is Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493. In that case a tenant was given an option for a further period of 125 years provided it gave notice of exercise no later than 29 September 1985 and it had performed and observed the tenant’s covenants contained in the lease. There had been breaches in 1984 of making planning applications without the landlord’s approval and non-payment of rent, the latter being dealt with by relief against forfeiture proceedings. The English Court of Appeal construed the lease as only applying to current breaches and not to spent breaches. The next case cited was my decision in Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1989) NSW ConvR ¶55-459. Although this case went on appeal on another aspect of the case, my decision on this point was not affected by what happened in the Court of Appeal. In that case at the time when the notice [page 436] of exercise of the option was given there were no breaches of the lease, but between that date and the time when the old lease expired, breaches occurred. I held that on the construction of that particular lease the equitable rights to a new term came into existence upon the notice of exercise and the other breaches could only be dealt with as part of a discretionary reason as to why specific performance should not be granted. In the circumstances I granted specific performance.

Hodgson J considered the problem in Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR ¶55-496. In that case the tenant was given an option to renew subject to performance of the covenants and conditions up to the expiration of the term. His Honour considered that that meant that the exercise of option took effect as at the end of the term and the time only began to run for giving a notice under s 133E(2) at the end of the term. In Rethmeier v Pioneer House Pty Ltd (1990) NSW ConvR ¶55-516, Bryson J considered the problem. Bryson J did not follow Bass’ case and in the circumstances rightly distinguished the Beca case. However, it would not appear that the Nessmine case was either cited to him or considered by him. Bryson J held that s 133E(2) took away the effect only of breaches occurring up to the date of the notice purporting to exercise the option. The lessee had not duly and punctually paid the rent thereafter and was thus in breach of the lease and not entitled to a renewed lease. The solution to the problem will be a matter of construction of the lease in each case. However, generally speaking, it seems to me that a s 133E notice must be given by a landlord within 14 days of the giving of the tenant’s notice to exercise the option and that one looks to breaches as at the date of exercise of the option. Any breaches that occur after that date before the end of the lease are taken into account as discretionary matters as to whether or not to grant specific performance. The terms of the lease may show that there is to be some different result in the particular case. None of the cases referred to actually deal with the situation as to whether breaches mean breaches which are past and spent or including continuing breaches. The basic argument for limiting it to the first would be that the section was passed to deal with problems that arose out of cases such as Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) 59 SR (NSW) 122, the problem being that a tenant who had committed any breach at all no matter how insignificant and no matter that it was spent was completely disentitled to renew the lease even though the landlord may not have suffered any prejudice. The argument for the other view is that the section was intended to be a

wide liberal provision to preserve options. If the wider view were taken then a landlord is still protected because: (1) A vigilant landlord will give a counter notice; (2) The court is empowered if the landlord does give the notice to do what is right in the individual case; and (3) There is always the discretionary remedy in equity to refuse specific performance if there are unremedied breaches at the time when the specific performance suit consequent upon the exercise of the option goes before the court. However, the problem for the landlord is that if the wider view is taken the relatively short time of 14 days may slip by unnoticed especially if there is an intervention [page 437] of a managing agent and the landlord is in another city and that refusal of specific performance may still entitle the tenant to damages at law. The only one of the cases which seem to consider the problem at all is the Evanel case and that only by a side wind because Wootten J takes into account as one of the factors relevant as to whether an order should be made that there was no continuing breach. It seems to me that on the proper construction of the section it was intended to cover both spent and current breaches. The option in the lease is a valuable right of property and it is to be recognised unless there is some real prejudice to the landlord against recognising it. If a landlord is not vigilant and does not give a counter notice in time then that is solely a matter of his fault. If the landlord is vigilant then the wider construction of the section enables what is fair to be done between the parties. This is in accordance with the way in which the section has been construed both in New Zealand and in the Evanel case in NSW. In Flagstaff Investments Pty Ltd v Cross Street Investments Pty Ltd Windeyer J

held that s 133E did not apply to a breach of a lease that occurred after service of a notice purporting to exercise an option with the consequence that if the tenant did not comply with every condition of the landlord’s offer contained in the option clause there was no contract and therefore it was not possible for equity to give relief against forfeiture. In Reilly v Liangis Investments Pty Ltd (2000) BPR 17,509 Young J summarised the differing approaches concerning the effect of s 133E on breaches of a lease that occur after the giving of a notice exercising an option as follows: One then has to face the problem as to what s 133E of the Conveyancing Act really means. It has been the subject of a series of decisions in this court, unfortunately, not all going in the one direction. In previous cases, I have said that where a notice has to be given X months before the end of the lease, and there is an obligation on the tenant to keep the premises in proper repair until the end of the lease, s 133E covers the situation up to the notice and thereafter one relies on general equitable principles; see Brennan v Kinjella (1993) 6 BPR 13,168. [38] The Chief Judge has said that one allows the landlord in such a situation the appropriate period from the end of the lease in which to give the notice: Nessmine Pty Ltd v Devuzo Pty Ltd (1989) NSW ConvR 55-496. Both Bryson J, in Rethmeier v Pioneer House Pty Ltd (1990) NSW ConvR 55-516, and Windeyer J, in the Flagstaff case, declined to follow both those cases and said that the teeth in s 133E are drawn at the date of the notice and thereafter the old law of Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) 59 SR (NSW) 122 applied. That law was that a clause such as cl 26 gave to tenants the right to accept the landlord’s offer of a new lease if, and only if, they strictly complied with every condition of that offer. If they did not comply with every condition of that offer, then there was just no contract and if there was no contract then it was not possible for equity to give any relief against forfeiture. The legislature has taken note of the confusion created by the many first instant decision referred to above and effective from 1 January 2002 s 133E of

the Conveyancing Act 1919 (NSW) was amended to make it clear that the section applies to breaches that occur after, as well as before, service of the lessor’s notice under s 133E. [page 438] As to the formal requirements of a valid notice under s 133E(1)(b), see Bay Marine Pty Ltd v Clayton Properties Pty Ltd (1984) 9 ACLR 780 at 788, referred to with approval by Young J in Brennan v Kinjella at 13,172. Moreover, in Sydney West Area Health Service v Staracek (2008) 73 NSWLR 68, it was held that the requirements of s 133E(2) as to service of a prescribed notice, as defined in s 133E(3), must be strictly complied with if a lessor is to be entitled to rely on breach of obligations in a lease as precluding the right of the lessee to exercise an option for renewal (and see Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd (2012) 16 BPR 31,089 at [19] (White J)). In Allsvelte Pty Ltd v Cassegrain Wines Pty Ltd (2015) 18 BPR 35,637 Ball J said (at [56]) that: In any proceedings for relief under s 133E the burden of proof of a breach of the lease lies upon the lessor, while the burden of demonstrating that relief should be granted, assuming that the alleged breaches are made out, lies upon the lessee: Re Denny’s Restaurants [1977] Qd R 92, applied in Evanel Pty Ltd v Stellar Mining NL [1982] 1 NSWLR 380 at 387–8. A lessor is not required to give a notice under s 133E(2) where the tenant repudiates the lease or agreement for lease after the purported exercise of the option: see Marshall v Snowy River Council (1994) 6 BPR 97,483. In Queensland the provisions were applied in Re Denny’s Restaurants Pty Ltd [1977] Qd R 92 (followed and applied in Evanel); F Tritton Pty Ltd v Hunnicutt Pty Ltd (SC(Qld), Dunn J, 23 December 1982, unreported) which, in turn, applied the Evanel decision, particularly the statements on the origins and operation of the provisions; and Re Tabtide Pty Ltd [1989] 1 Qd R 604. See also Grepo v Jam-Cal Bundaberg Pty Ltd [2015] QCA 131; [2015] Q ConvR 54-829 where the New South Wales provisions are discussed (at [38]– [51]) and then, following consideration of the corresponding provisions of s

128 of the Property Law Act 1974 (Qld) (at [52]–[57]), it was held that the provisions of s 128 are inapplicable between the date of giving of notice and the expiry of the lease term (at [57]). Unless on its proper construction the lease makes performance of the covenants by the lessee a condition precedent to the exercise of an option of renewal, the lessee may exercise his or her option, notwithstanding that he or she is in breach of a covenant: Raffety v Schofield [1897] 1 Ch 637; Buckeridge v Tucker (1899) 17 NZLR 513; Hawke v McGrath (1900) 10 QLJ 83; a proposition that is implicit in the judgments in the cases cited above. Where provision is made for both put and call options, care should be taken to ensure that, as a matter of construction, non-performance of covenants by the lessee will not prevent the exercise of the lessor’s put option: see Pacific Parking Pty Ltd and Leighton Holdings Ltd v Ryssal Three Pty Ltd (1995) V ConvR ¶54-515. [page 439]

Rent to be determined by third person [14.7] Quite often it is provided that the rent for the new term shall be the rent agreed upon by the parties and failing agreement the rent determined by the president of some such body as the Real Estate Institute of Victoria or the Commonwealth Institute of Valuers; sometimes there is a further provision that the rent shall not be less than a stated amount. Where the determination of a ‘fair market rent’ is left to three persons, including one appointed by a nominated body, in the absence of a special provision in the lease to the contrary, the decision of the majority prevails: MEP Australia Ltd v Commonwealth [1973] 2 NSWLR 848. At times the lease commits the determination of the rent for the renewed term, not to the holder of a particular office or his or her nominee, but simply to the holder of the office; in such a case, having regard to the fact that skill and care are required for the doing of the act in question, it would seem that the president or other officer has no implied authority to delegate the right to fix the rent.

Where the option clause provides that the rent shall be determined by a third person, the agreement will ordinarily be an agreement for valuation or appraisement, not arbitration (even if that person is described as an arbitrator), the intention being that the valuer should make his or her valuation according to his or her own skill, knowledge and experience: Re Dawdy (1886) 53 LT 800; Eads v Williams (1854) 43 ER 671; [1843–60] All ER Rep 917; Bottomley v Ambler (1877) 26 WR 566; (1878) 38 LT 545; Ajzner v Cartonlux Pty Ltd [1972] VR 919; Australian Mutual Provident Society v Overseas Telecommunication Commission (Australia) [1972] 2 NSWLR 806; Lear v Blizzard [1983] 3 All ER 662. The lease may, however, on its proper construction, provide for arbitration, even though the lease speaks of ‘valuation’ and ‘valuers’: Wellington City Corporation v Kirkcaldie & Stains Ltd [1975] 1 NZLR 592. In each case, what is important is not the existence of a dispute or disagreement between the parties, but the subject matter that the parties have agreed to submit to another for determination. If they have agreed to submit their differences to be determined by a third party, it may well be that the scope of the reference is limited by the extent of such differences and in those circumstances the person called upon to make the determination may be acting as an arbitrator. Where, for instance, the lessor offered to accept new rent at the rate of $200 per week, but the lessee has offered to pay only $150 per week and such offers are submitted to a third party who is required to determine the new rental, then that third party can only determine a rental which is within the range of $200 and $150 per week because in such a case the subject matter of the reference is not an objective fact — namely, the true new rental — but the difference between the parties. In such circumstances, the referee would act as an arbitrator: see Thompson v Anderson (1870) LR 9 Eq 523. [page 440] But if the parties agree that in default of agreement between them they would make an open reference to the third person requiring him or her to determine an objective fact, such as rental, then such a reference does not, by itself, make the referee an arbitrator within the meaning of the Arbitration Act

1958 (Vic) (see now the uniform Commercial Arbitration Acts) and he or she is not limited in his or her determination by the values nominated by the lessor and lessee: Ajzner v Cartonlux Pty Ltd; and see Australian Mutual Provident Society v Overseas Telecommunication Commission (Australia); and [11.4]. Usually, once the parties nominate a third person to determine the value of the rent or premises in question, they are bound by his or her decision. Consequently, if the valuer nominated by the parties makes an honest assessment of the value of the premises or of the rental, the parties are generally bound by that valuation even if it was significantly higher than the valuation that would have been made by other valuers: Campbell v Edwards [1976] 1 WLR 403; and see [11.9]. If the renewal clause in a lease is subject to the condition that the new rental is to be determined by a specified third person and that person refuses or is unable to make that valuation, the law was that the agreement for renewal was arguably unenforceable on the ground that the new rental cannot be ascertained in accordance with the terms of the agreement between the parties: Milnes v Gery (1807) 14 Ves 400; 33 ER 574; Agar v Macklew (1825) 2 Sim & St 418; 57 ER 405; Morgan v Milman (1853) 3 De GM & G 24; 43 ER 10; Vickers v Vickers (1867) LR 4 Eq 529; George v Roach (1942) 67 CLR 253 at 257–8. However, this is no longer the position following recent reconsideration of the issues by both the House of Lords and the High Court. In Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 the leases contained an option to purchase the reversion in fee simple at a price to be agreed between two valuers, or by an umpire to be appointed by the valuers in default of agreement. A minimum purchase price was also specified for each leased property. On the lessees seeking to exercise the options the lessors claimed the options were void for uncertainty and refused to appoint a valuer. The House of Lords had no difficulty in overruling the English line of authority which originated in Milnes v Gery on the basis that present day conditions justified a departure from precedent, including the fact that the valuer’s profession and the rules of valuation were better established now than in the nineteenth century: see Lord Fraser at 483. Their Lordships, in a more radical departure from the authorities than the High Court was prepared to make in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, ordered specific performance of the options (including an order for execution of conveyance) and for that purpose ordered inquiries as to what

was a fair valuation of the reversions and whether good title could be made. This position was reached in three steps. First, as a matter of construction it was held that the contract was for sale at a fair and reasonable price according to objective standards. Second, the mode of ascertaining the value was properly regarded as a machinery provision, a provision that was subsidiary and non-essential, rather than as an essential part of [page 441] the agreement. The position may have been otherwise had the parties specified a particular named valuer or a valuer who would, by reason of holding some office, have special knowledge relevant to the valuation. Third, it was held that, where an inessential machinery provision has broken down, the court would substitute its own machinery. There appears no reason why these principles should not be applied whatever the reason for the breakdown. Lord Fraser based his decision on the general principle that the court should save an agreement on the breakdown of an inessential machinery provision, however the breakdown was caused (at 483–4). Lord Diplock, on the other hand, placed more emphasis on the lessors’ breach of contractual duty and the fact that the law does not allow a party to take advantage of self-induced frustration of a contract (at 478–9). The speeches of the other members cast no light on this question. The High Court in the Booker case took a more conservative view. In that case the lease contained an option to renew at such rental as may be mutually agreed between the lessor and lessee and, failing agreement, rental as fixed by a single arbitrator to be nominated by the President for the time being of the Queensland Law Society. The lessor did not recognise the lessee’s purported exercise of the option and required vacant possession. The lessee sought specific performance ‘of an agreement contained in a lease … for the renewal thereof’. In their joint judgment Gibbs CJ, Murphy and Wilson JJ said that the only issue of substance arising was whether the renewal agreement was a concluded agreement, as it is well established that the courts will not lend their aid to enforce an incomplete agreement. Their Honours held that in the present case no further agreement

was required of the parties as the lease provided the entire mechanism for determining the rent for the new term. At 605 their Honours said: … in the circumstances as they stand at present, there is a valid agreement for the renewal of the lease subject to the fixation of a rental for the new term. The fixation of that rental is a condition precedent to the performance of the agreement. It follows that at this stage an order could not be made for the specific performance of the agreement to grant a further lease: Brown v Heffer (1967) 116 CLR 344 at 350. Butts v O’Dwyer (1952) 87 CLR 267 was cited as authority for the proposition that in order to give business efficacy to the arrangements it was necessary to imply a term that both parties would do all that was reasonably necessary to procure the nomination of an arbitrator as soon as other specified preconditions in the option had been satisfied. Lord Diplock’s speech in the Sudbrook case was also cited in support without comment on the approach of the House of Lords except the later comment that the earlier English authorities could not have been fully accepted in Australia: see 606. Thus, the approach of their Honours was to grant a limited order for specific performance, but only as far as was necessary to activate their machinery. In summary (at 606): If a lessor agrees to renew a lease at a rent to be fixed by a third party, and agrees (expressly or impliedly) to do all that is reasonably necessary to ensure that the rent is [page 442] so fixed, it is not right to say that there is no concluded contract until the rent is fixed. There is a contract which immediately binds the lessor to perform his obligation to do all that is reasonably necessary to ensure that the rent is fixed, although the performance of the further obligation to renew the lease is conditional on the rent being fixed. There is no reason in justice or in law why the court should not make an appropriate order for specific performance in such a case, that is, an

order that the lessor should do whatever is reasonably necessary to ensure that the rent is fixed, and, if the rent is fixed, should renew the lease. As the machinery agreed by the parties had not failed, it was not necessary, as it was for the House of Lords, to consider whether there could or should be specific performance of the substantial obligation. The other member of the court, Brennan J, after a detailed analysis of the authorities, including the Sudbrook decisions in the House of Lords and the Court of Appeal, was prepared to go further (at 617; compare Lord Diplock in the Sudbrook case [1982] 3 All ER at 5 (quoted at [11.1])): It follows, in my opinion, that neither the synallagmatic contract which came into existence upon the exercise of the option nor the lease to be granted in performance of that contract is uncertain. If the contractual machinery for fixing the rental were to fail, the rental would be fixed by the court. There is therefore no impediment to granting a decree of specific performance of that contract and requiring Booker to grant to Wilson a lease containing a clause relating to the fixing of the rental drawn in conformity with cl 4.01. Such a lease would be valid, for if the machinery for fixing the rent should fail, the court’s machinery will be available to fix it: certum est quod certum reddi potest. There is much to commend the House of Lords approach in the event that the machinery fails as giving effect to the real intention of the parties. In view of this, and in light of the judgment of Brennan J, it may be adopted by the High Court, faced with similar circumstances. The reasoning of Lord Diplock in the Sudbrook case was adopted and applied by Kearney J in Brooks v Wyatt (1992) 112 FLR 12 (SC, NT). There are occasions of course where, on a true construction, the lease provides that the rent is to be determined by arbitration: see, for example, Thomas Bates & Son Ltd v Wyndham’s (Lingerie) Ltd [1981] 1 WLR 505, and see [11.9]. The option clause often provides that the new lease shall be granted at the expense of the tenant; the question may arise whether this has the effect of requiring the tenant to bear the fee for the valuation.

As to construction of rent review clauses, see [11.8].

Mode of exercise [14.8] Whether an option to renew has been exercised depends upon the terms of the agreement between the parties contained in the lease (Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) 76 WN (NSW) 72), and it is a matter of examining the [page 443] lease in order to determine what mode of exercise has been agreed upon between the parties. A mere notice of intention to exercise an option may not be sufficient if, in the circumstances, more was required, such as the tender of purchase money and a transfer, or rent: see Richardson v Kearton (1882) 8 VLR (E) 201; also Reporoa Stores Ltd v Treloar [1958] NZLR 177. The cardinal rule is that the notice must be clear and unequivocal and that the exercise of the option be absolute and unqualified: Ballas v Theophilos (No 2) (1957) 98 CLR 193 at 196; Oliver v Oliver (1958) 99 CLR 20; Lamont v Heron (1971) 126 CLR 239; Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, especially at 71–6; Quadling v Robinson (1976) 137 CLR 192, especially at 200–1; Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673; Traywinds Pty Ltd v Cooper [1989] 1 Qd R 223; Mannai Investment Company Ltd v Eagle Star Life Assurance Company Ltd [1997] AC 749. Notices of exercise of option are construed objectively in the way they would be understood by a reasonable recipient: see Mannai Investment Company Ltd v Eagle Star Life Assurance Company Ltd; Tsaoucis v Gallipoli Memorial Club Ltd (No 2) (1998) 9 BPR 16,275. Some guidance as to the meaning of ‘absolute and unqualified’ is given by Gibbs J in Quadling v Robinson at 200–1: In Laybutt v Amoco Australia Pty Ltd [(1974) 132 CLR 57 at 71–6] I discussed the nature of an option, but whether (as I think) the option in the present case was a conditional contract of sale, or whether it was merely an irrevocable offer to sell, it is clear that the exercise of the

option, to be valid, must have been absolute and unqualified and must have bound the respondents to perform the very terms set out in the option. Authority is hardly necessary to support this statement, but some of the cases are collected in the judgment of Smith J in Ballas v Theophilos [[1958] VR 576 at 581] (which was affirmed on somewhat different grounds [(1957) 98 CLR 193]). However, it is not always easy to determine whether the purported exercise of an option should be understood as attempting to vary the terms of the option or as intending to accept its terms without modification, notwithstanding that they may have been misdescribed, or notwithstanding that the grantee of the option may have indicated that he intends to perform the contract in a manner for which the terms of the option do not provide. Thus although a notice misstates the terms of the option which it purports to exercise, it may nevertheless amount to an unqualified and unconditional exercise of the option: see Carter v Hyde [(1923) 33 CLR 115 at 121–2, 126, 133]. On the other hand, if the grantee of an option sets out his own erroneous understanding of the option, and then purports to exercise the option as so understood, there will (speaking generally) be no effective exercise of the option: see Cavallari v Premier Refrigeration Co Pty Ltd [(1952) 85 CLR 20 at 26–7]. It must of course depend upon the proper construction of the document by which the grantee purports to exercise an option whether it amounts to an absolute and unqualified acceptance of the rights and liabilities conditionally created by the option. As an aside it is observed that there is no reason in principle why the proper characterisation of an option (see [14.1]) should affect the manner in which it is exercised. Gibbs J was clearly of this view. A notice is construed objectively. In Carter v Hyde (1923) 33 CLR 115, Isaacs J, in considering whether an option to purchase was properly exercised, applied the following test (at 126): [page 444] In those circumstances the appropriate question is that of Romer J in Jones v Daniel [[1894] 2 Ch 332 at 335], namely, ‘Now, what would

anybody when he received that letter fairly understand to be the meaning of it?’ I add, of course, ‘in the circumstances of its receipt’. Thus, it follows that what the landlord or tenant took the meaning of the notice to be is not admissible: see Prudential Assurance Co Ltd v Health Minders Pty Ltd. Unless the lease provides otherwise, the option may be exercised by conduct: Gardner v Blaxill [1960] 1 WLR 752; and see Weemah Park Pty Ltd v Glenlaton Investments Pty Ltd [2011] 2 Qd R 582 (CA). The question whether notice is required, and, if so, whether the notice must be in writing, is a matter of the interpretation of the lease. The lease in Nicholson v Smith (1882) 22 Ch D 640 contained a covenant to grant a renewal ‘whenever required by the lessees … it being the intention of the parties that this lease should be renewable forever at the option of the lessees’. The landlord gave notice to the secretary of the company which was tenant that the lease would expire on the following day, and the secretary replied by letter stating that the directors of the company ‘would, of course, renew the lease’. This was held to be good, Pearson J saying at 659: I do not think any form was necessary. No requisition in writing is required by the covenant. The lease is to be a lease which is to be renewed in perpetuity at the option of the lessees. I think the option of the lessees and their desire to remain tenants was stated fairly and broadly upon the letter … It would be, in my judgment, a departure from the deed if I were to hold that any formal notice in any formal words was requisite with regard to this option when no notice in writing is required, and when it is expressly stated in the lease that the lease is to continue at the option of the lessees. See also Miller v Sharp [1899] 1 Ch 622; Metford Industries Ltd; Ex parte, Re Hall, Commissioner for Railways (NSW) [1962] NSWR 1228; O’Callaghan v Elliott [1966] 1 QB 601 at 606–11; see also Gardner v Blaxill [1960] 1 WLR 752; Niesmann v Collingridge (1921) CLR 177; Johnson v Bones [1970] 1 NSWR 28 at 36; and Commonwealth v Newcrest Mining (WA) Ltd (1995) 130 ALR 193 at 242; Nortel Australia Pty Ltd v Portfolio Leasing Australia Ltd (20 March 1998, unreported), noted (1998) 72 ALJ 355. In Tsacoucis v Gallipoli Memorial Club Ltd (No 1) (1998) 9 BPR 16265 the tenant contended that it

had exercised an option during a conversation with the landlord in circumstances where the option clause did not specify how the option was to be exercised. Young J had held that s 170 of the Conveyancing Act 1919 (NSW) applied, with the consequence that written notice was necessary. It was not necessary for the Court of Appeal to consider the applicability of s 170 in the appeal: see (TS: wf 1998) 9 BPR 16275. See also the decision of Young J in Universal Roofing & Accessories Pty Ltd v Smith [2004] NSWSC 32. Even where the lease requires a written notice of exercise, a letter in informal terms may be held to be sufficient; so, where the lease contained the words ‘if the lessee desired to take a renewed lease of the premises for the further term of two years from the expiration of the first and of such desire should, [page 445] prior to the expiration, give to the lessor one calendar month’s previous notice in writing’, Molesworth J held to be good a notice in the following terms: ‘I hereby give you notice of my intention of remaining in your shop for a further term’: Lonergan v M’Arthur (1874) 5 AJR 172. In Riltang Pty Ltd v L Pty Ltd (2004) 12 BPR 22,347 the court held to be valid a notice that stated ‘we would like to exercise our option to renew the lease’; see also Young v Lamb [2001] NSWCA 225 where the court held valid a notice that stated ‘we intend to exercise the option to renew the lease’ and Bava Holdings Pty Ltd v Pando Holdings Pty Ltd (1998) NSW ConvR ¶55-862 where the notice contained the words ‘we are keen to continue …’. In Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16,361 the court held that the tenant had exercised an option to renew despite the covering letter stating that ‘The enclosed lease renewal is therefore subject to me knowing precisely what is likely to happen over the short to medium term, what is the plans in terms of merchandising and how is Lolly Pops to be affected any more than it is already’. In that case Young J said (at 16,373): It is not every acceptance which appears to have a condition attached to it that should be classed as a qualified acceptance. There may be an acceptance which asks for matters to be reviewed so long as it is clear from the whole of the context that if the request is refused, the

acceptor is prepared to carry out the original contract. Furthermore, there may be an acceptance coupled with an offer to enter into a further collateral contract. In the case of Kavia Holdings Pty Ltd v Suntrack Holdings Pty Ltd [2011] NSWSC 716, Pembroke J found, however, with respect to a claimed exercise of the option to renew contained in an email, that (at [29]): Properly understood, and objectively characterised in its context, it would not, in my view, have been understood by a reasonable person in the lessor’s position as being an unqualified statement of a desire to take a further lease of the premises for the further term of years set out in the reference schedule. In Hinds v Randell (1961) 177 EG 733; [1961] LMD 2536, Wilberforce J held that a notice purporting to exercise an option to renew which stated the rent at £500 instead of £510 was invalid and that the option had therefore not been properly exercised; referred to with approval in Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1296 at 1307. Nevertheless, it seems that a mere clerical error would not vitiate a notice if the meaning would be clear to a reasonable lessor: see Germax Securities Ltd v Spiegal (1979) 123 Sol Jo 164 (CA); (1978) 37 P & CR 204; (1978) 250 EG 449 (although this case is concerned with an error in a notice to quit, the same considerations apply); cited with approval by Kerr LJ in Bass Holdings Ltd v Morton Music Ltd [1988] Ch 493 at 527. Generally the courts will overlook trifling defects in notices, even where the notice may have serious consequences: see the cases reviewed in Lockhart v Yorkshire Guarantee and Securities Corp (1908) 9 WLR 182 (FC, British Columbia); and see C Croft and R Hay, The Mortgagee’s Power of Sale, LexisNexis Butterworths, Sydney, 3rd ed, 2012, pp 33–6; and see E Tyler, [page 446] P Young and C Croft, Fisher and Lightwood’s Law of Mortgage, LexisNexis Butterworths, Sydney, 3rd ed, 2014, para 20.17. In Della Imports Pty Ltd v Birkenhead Investments Pty Ltd (1987) NSW Conv R 55–358 a notice was held

to be valid in spite of the fact that it did not accurately describe the premises or the duration of the term. In that case McLelland J said (at 3): The primary question is whether the option conferred by cl 18 was effectively exercised by Della. As Gibbs J in Quadling v Robinson 137 CLR 192 at 201 said ‘… it is not always easy to determine whether the purported exercise of an option should be understood as attempting to vary the terms of the option or as intending to accept its terms without modification, notwithstanding that they may have been misdescribed, or notwithstanding that the grantee of the option may have indicated that he intends to perform the contract in a manner for which the terms of the option do not provide. Thus although a notice misstates the terms of the option which it purports to exercise, it may nevertheless amount to an unqualified and unconditional exercise of the option: see Carter v Hyde (1923) 33 CLR 115 at 121–122, 126, 133. On the other hand, if the grantee of an option sets out his own erroneous understanding of the option, and then purports to exercise the option as so understood, there will (speaking generally) be no effective exercise of the option: see Cavallari v Premier Refrigeration Pty Ltd (1925) 85 CLR 20, at 26–27. It must of course depend upon the proper construction of the document by which the grantee purports to exercise an option whether it amounts to an absolute and unqualified acceptance of the rights and liabilities conditionally created by the option’. The question is whether, on its true construction, the notice given on 22 December 1986 fulfils the description in cl 18, ie a notice of Della’s desire to take a renewed lease of unit 6 for a further term for a period of five years. The true construction of an instrument of this kind must be ascertained from the instrument as a whole considered in the light of the surrounding circumstances, ie the facts and matters which were or ought reasonably to have been in the contemplation of both parties at the date of the instrument. In Riltang Pty Ltd v L Pty Ltd Davies AJ adopted McLelland J’s reasoning in Della Imports Pty Ltd in holding valid a notice which incorrectly described the

demised premises as ‘lot 8, 38–46 Oxford St, Darlinghurst’ rather than ‘34–46 Oxford St, Darlinghurst’. In Lambert v Cole [1950] QWN 47 the landlord gave a lease with an option for a further term and later agreed with an assignee, by deed reciting the lease and option, that if the assignee should be desirous of continuing the term created by the lease for a further term ‘at the expiration of the term hereby granted’, the lessor would let the premises for a further term. There was no exercise of the option in the original lease by the lessee or any assignee. It was held that the deed was not an exercise of the option and that no further term was granted by the deed, the word ‘hereby’ being read as ‘thereby’. For a case where not less than six months’ notice was required and the notice failed to state the date on which it would expire, see Dyet Investments v Moore (1972) 223 EG 945. The requirements relating to the service of the notice of exercise of option are considered in [14.10]. [page 447] In Bava Holdings Pty Ltd v Pando Holdings Pty Ltd (1998) BPR 16,295 Santow J summarised the law concerning the exercise of options as follows: As a general rule and traditionally, an option must be exercised in strict compliance with the requirements set out for such exercise (that is, strictly within the time and in the form stipulated, with the grantee having met any conditions precedent imposed): Tonitto v Bassal (1992) 28 NSWLR 564; ‘in the sphere of options it is a cold hard world’ (Burrell v Cameron (SCNSW, Windeyer J, 4 April 1997, unreported)). As Goulding J said in Carradine Properties Ltd v Aslam [1976] 1 WLR 442 at 446: In an option clause the requirement is that a party must strictly comply with the condition for its exercise. If the condition includes the giving of a particular notice, it seems to me that the logical first approach is to interpret the notice, looking at the words and applying legal principles to their construction, and then ask whether it complies with the strict requirements as to the exercise of the option.

More recently, however, there has been some signs of relaxation of this strict approach, though by reference primarily to ordinary principles of construction. This is more incipiently and tentatively as regards minor time infractions (for example, Hillier v Goodfellow [1988] V Conv R 54–310 and the trend remains the other way (see for example, Bressan v Squires [1974] 2 NSWLR 460; Diakogiannis v Johnson (1989) NSW Conv R 55–472). But significantly, in construing notices with some inaccuracy, obvious error or looseness of formal expression, the courts have simply asked how would the recipient, as a reasonable commercial person, be taken to have understood the intent of the notice: Mannai Ltd v Eagle Star Association Company Ltd [1997] 2 WLR 945. That this approach has manifested itself so far in cases dealing with a notice to terminate a lease — so called ‘break clauses’ — does not alter the application of that principle to option cases. This is demonstrated by the juxtaposition, without discrimination, of those two categories in Carradine Properties Ltd (supra) at 446. In Hillier v Goodfellow [1988] V Conv R ¶54-310 (which was referred to by Santow J in the above quote from Bava Holdings Pty Ltd), Murphy J considered an appeal from orders and declarations made by a Master to the effect that an option to purchase land had expired without being exercised. There was evidence from correspondence indicating that the vendors knew at all material times that the grantee desired and intended to exercise his option. His Honour said (at 63,970): It is, in my opinion, open to the defendant to submit, in these circumstances, that if once it was established that the defendant had made it known that he was prepared to enter upon the contract, but that the plaintiffs denied its very existence, Equity might well grant relief against a minor time defalcation, not wilful or deliberate, but accidental and inconsequential. It might well appear to be only fair to grant relief, when the facts are finally found in the case, cf Hunter v Earl of Hopetoun (1865) 13 LT 130 (HL). Murphy J granted the appeal and gave the grantee leave to defend the proceeding. Hillier was applied by Balmford J at a final hearing in Bezden Pty

Ltd v Castellano Nominees Pty Ltd [2003] ANZ ConvR 443; (2003) V ConvR ¶54-679. [page 448] In Gillard v Lifoon Pty Ltd [2005] NSWSC 687 the landlord was estopped from relying on the requirement in the lease for a written notice in circumstances where the landlord had represented that written notice was not required. A tenant who, shortly before the expiration of the term exercises his or her option to purchase the subject property and remains in occupation between the expiration of the term and the completion of the sale, may not be obliged to pay rent or money for use and occupation of the property for the above period. The same applies to a purchaser who enters into possession of land with consent of the owner pending completion of the purchase: Sanders v Cooper [1974] WAR 129. A duly appointed agent may be the giver or recipient of a notice, which need not name either as long as it does not thereby become misleading: Churcher v Danis Hotels Pty Ltd (SC(NSW), Holland J, 12 February 1980, unreported). A solicitor, on the record in court proceedings concerning the leased premises, will have authority to receive a notice exercising an option: Gower Chapman v Morris (SC(NSW), Kearney J, 15 April 1987, unreported); see also Carter v Schmitt [2003] NSWC 1166. In Kratzmann (Toowong) Pty Ltd v Marjorie’s Investments Pty Ltd (1986) 67 ANZ ConvR 803, Moynihan J held that service on a managing agent was not valid service on the lessor. However, in Setena Pty Ltd v Permanent Trustee Nominees (Canberra) Ltd (1987) NSW ConvR ¶55-322, McLelland J found to the contrary. His Honour said: The management of property leased to tenants would ordinarily embrace the receiving of a notice from a tenant exercising an option of renewal of his lease, and in my view a managing agent of such property would, in the absence of proof of some relevant limitation to his authority, be presumed to have authority to receive such a notice

(cf Peers v Sneyd 17 Beav 151, 51 ER 990, R v Chief Immigration Officer (1973) 1 WLR 141). See also the decision of McLelland J in Oscars Town Centre Restaurant Pty Ltd v Port Shores Pty Ltd (1987) NSW Conv R ¶55-331. A similar view was also taken by Stein JA in Young v Lamb [2001] 10 BPR 18,553 at 36. In Riltang Pty Ltd v L Pty Ltd Davies AJ said at [14] that: … the agent’s authority to accept service of a notice of renewal must be determined having regard to the circumstances of the case, including the terms of the lease and the part which the agent performs in the relationship between the lessor and the lessee. In that case the notice exercising the option was held to be valid despite it only being addressed to the lessor’s managing agent and served on that agent. In Carter v Schmitt [2003] NSWSC 1166 an option to renew was signed by a duly authorised solicitor for a party to a sharefarming agreement. The owner contended that the option had not been exercised because, among other things, the option clause referred to the ‘farmer’ giving the ‘owner’ notice in writing, and thus the option could [page 449] not be exercised by an agent. Smart AJ rejected the contention, holding while the clause did not refer to agents or solicitors giving notice on behalf of the farmer it did not preclude them from doing so. His Honour said (at 40): ‘I see no difficulty with duly authorised solicitors giving a notice exercising the option to the owner. In the absence of an express or implied prohibition there is no impediment to authorised agents giving notice of the exercise of the option on behalf of the defendants’. In order to prevent the landlord disputing the authority of the tenant’s solicitor or agent to sign a notice, it would be of assistance if the lease contained a provision to the effect that the landlord agrees that any notice given may be signed by the tenant’s solicitor or agent. If a dispute is anticipated, it is desirable that the notice be signed by the tenant

personally. It follows from the well-settled equitable rule that a person in a fiduciary capacity can only exercise an option for the benefit of his or her cestui que trust and not for his or her own personal benefit: Keech v Sandford (1726) 25 ER 223; Rowley v Ginnever [1897] 2 Ch 503; Re Biss [1903] 2 Ch 40; Keith Henry & Co Pty Ltd v Stewart Walker & Co Pty Ltd (1958) 100 CLR 342. Thus, it followed that where one partner, without the consent of his copartner, obtained a renewal of a lease of partnership premises in his own name, he was bound to account to the partnership for any benefit received, as a constructive trustee: Chan v Zacharia (1984) 154 CLR 178. An equitable lessee cannot exercise an option in the lease in favour of the ‘lessee’ in the equitable lessee’s own name where a lease effective at law exists: Friary Holroyd and Healey’s Breweries Ltd v Singleton [1899] 1 Ch 86; MacDonald v Robins (1954) 90 CLR 515 at 522–3; Lee v Ferno Holdings Pty Ltd (1993) 33 NSWLR 404 (CA) at 412–3. The same would apply to an equitable assignee of a lease. This follows from the cases referred to and on general principle. As to the latter the statement of Giles J in Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 at 561 is noted: ‘The equitable assignee could not exercise the option because, absent a legal assignment, it was not in a contractual relationship with the grantor of the option and could not exercise a right given by the contract — all it could do was to require the assignor to exercise the right’; and see the authorities referred to at 559–61, particularly Warner Bros Records Inc v Rollgreen Ltd [1976] QB 430 (CA) and Long Leys Co Pty Ltd v Silkdale Pty Ltd (1991) 5 BPR 11,512 (CA). This should be contrasted with the position of an assignee of a lease assigned at law with respect to the exercise of an option: see Price v Murray [1970] VR 782; and see [15.1], [15.20]. Generally it is necessary that both co-tenants exercise any option, but this general rule is subject to a proper construction of the lease, particularly provisions defining expressions such as ‘the lessee’: MacDonald v Robins (1954) 90 CLR 515; and see Sharp v Union Trustee Co of Australia Ltd (1944) 69 CLR 539 where it was considered that the option could only be exercised by two surviving partners jointly (at 548 per Latham CJ and 553 per Starke J); and Zacharia v Ajay Investment Pty Ltd & Chan (1982) ANZ ConvR 651 (SC, SA, per Mitchell J), in similar circumstances. In Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501 (CA) it was held that

[page 450] under the terms of the lease the surviving tenant had the right to exercise the option, whether the tenants took jointly or in common. See also Brennan v Kinjella (1993) 6 BPR 97,442 and Hammersmith and Fulham London Borough Council v Monk [1992] 1 All ER 1 (HL); and the cases referred to at [5.15]. The law governing partnerships also needs to be considered in determining whether an option has been exercised: in Young v Lamb (2001) 10 BPR 18,553 a letter signed by one of four partners was held to be an effective exercise of an option that bound all four partners despite three partners not expressly authorising the signing of the letter.

Time for exercise [14.9] As with manner of exercise, so with time for exercise: it is a matter of the construction of the lease to determine by what time the option is required to be exercised. Usually a stipulation as to time at or within which notice to exercise an option to renew must be given is of the essence of the option: United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 at 929– 30 (per Lord Diplock). This is in marked contrast to the approach taken in relation to time stipulations in rent review clauses: see [11.4]. Lord Diplock, in the United Scientific case, explained the different approaches at 929–30. His Lordship said that a clause granting to the tenant an option to renew the lease upon the expiration of the term provides a classic instance of an option to acquire a leasehold in futuro and that it was well-established that a stipulation as to the time at which notice to exercise must be given is of the essence of the option to renew. Any miscalculation of the time within which the option can be exercised can have drastic consequences: see Raywall Pty Ltd v Calho Pty Ltd (2007) ANZ ConvR 562. A like view is taken of a ‘break clause’ which grants to the tenant an option to determine his or her interest in the property. This conclusion is based upon the premise that the tenant, by reason of the option, acquires an interest in the property and the grantor, so long as the option remains open, submits to being disabled from disposing of it to anyone other than the grantee and this without any guarantee that it will be disposed

of to the grantee. In accepting such a fetter upon his or her powers of disposition of his or her property, the grantor needs to know with certainty the moment when it has come to an end. If the lease does not fix any time for the exercise of the option, the option may be exercised so long as the relationship of landlord and tenant exists: Buckland v Papillon [1866] LR 2 Ch 67; Bain v Bartlett [1922] NZLR 790; Rider v Ford [1923] 1 Ch 541; [1923] All ER Rep 562. Accordingly, where a lease for three years was granted and it was agreed that the tenant might call for a further lease, no time being specified within which he was to call for it, and the tenant held over after the expiration of the original term as a tenant from year to year for four years and then required a lease, it was held that he was entitled to demand it: Moss v Barton (1866) 55 ER 870; see also Tsacoucis v Gallipoli Memorial Club Ltd (No 1) (1998) 9 BPR 16265 where Young J held that where no time is specified [page 451] in a lease for exercising an option it may beexercised in a holding over period; and on appeal (1998) 9 BPR 16275. If the lease provides for the option to be exercised during the term of the lease ‘or any extension’, the option cannot be exercised in a holding over period after the expiry of the term of the lease in the absence ‘of some agreement between the lessor and the lessor to constitute an extension’: see Douglas J in Tropical Meat Packers Pty Ltd v Schilta [2006] QSC 164 at [37]. In Spectra Pty Ltd v Pindari Pty Ltd [1974] 2 NSWLR 617, an option to renew a lease provided that the relevant notice was to be given ‘not later than (blank) calendar months prior to the expiration of the term hereby granted’. The court held that on the facts of the case there was no agreement by the parties as to any particular length of time prior to the expiration of the term of the lease by which notice of exercise of option was to be given. Consequently, the option clause was not void for uncertainty and the notice of renewal could be given at any time prior to the expiration of the term of the lease. Where a lease gives the lessee the option to renew the lease and the option to purchase the demised premises during ‘the renewal period’ of the lease, the lessee may exercise the option to purchase the property only during the period for which the lease was in fact renewed (and not during the

period for which the lease might have been renewed). Consequently, if the lessee fails to renew the term, he or she may not be able to exercise his or her option to purchase the premises after the expiration of the original term: Vincent Distributors Pty Ltd v Bambacas (1977) 16 SASR 159. On the question of uncertainty, see [14.3]. Where a lease gave an option to renew but did not specify when the option was to be exercised, or the procedure to be followed, it was held that the option was validly exercised if the tenant remained in possession at the end of the term: Blomidon Mercury Sales Ltd v John Pierceys Auto Body Shop Ltd (1982) 129 DLR (3d) 63 (SC, Newfoundland). An interesting situation arose in Lo Giudice v Biviano (No 2) [1962] VR 420. There the lease was forfeited for non-payment of rent, the commencement of the action claiming possession being the forfeiture. Some three months after the issue of the writ, and while the action was pending, the tenants purported to exercise the option for renewal conferred by a clause which provided that the option should be exercised ‘by notice in writing at least three months before the expiration of this agreement’. Adam J held, as a matter of construction of the lease, that the option had ceased to be exercisable after the lease had been duly terminated: what was contemplated was renewal during the term to operate as from the expiration at its appointed date, not the grant of a new lease to take effect after the lapse of an interval of time from the determination of the original lease. The provision dealing with the renewal of a lease may manifest an intention that the lease shall be capable of renewal only up to the time when it expires: Associated Mineral Pty Ltd v NSW Rutile Mining Co Pty Ltd (1961) 35 ALJR 296. Whether application for renewal of a licence had been made ‘not later than one month before’ its expiration was considered in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421. See also Reed [page 452] v Sheehan (1982) 56 FLR 206; and Commonwealth of Australia v Giorgio (1986) 67 ALR 244 (FCA, FC) at 251. A condition of the exercise of an option to renew, including stipulations as to time, may, in a general sense, be waived by the lessor but, on the basis of

the authorities (see [14.1] and [14.6]), the correct characterisation of the dealings between the parties appears to be that a fresh agreement for a new term has been made after the time limited for exercise of the option. In Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 (FC) the lessee gave written notice for renewal, but out of time, which the lessor accepted. Franklyn J said (at 204): She did not exercise the option within the time prescribed and thus she had not accepted the irrevocable offer of the lessor contained in cl 13(f) to grant her the further term upon her acceptance of that offer in the manner provided for. Her purported acceptance out of time was in fact a counter offer specifying all the necessary terms by reference to the terms of the lease, which counter offer was accepted by the respondent on 2nd April. Such acceptance was not, as was contended by the respondent before us, a waiver of a condition of the exercise on the option. The writing was held to be sufficient for the purposes of the Statute of Frauds, so the lessor was able to sue on the fresh agreement to renew the lease. The decision of White J in Re Copperart Pty Ltd (1995) 16 ACSR 351 specifically supports the proposition that a time stipulation with respect to the exercise of an option cannot be waived. His Honour said (at 356): Dealing with the issue of the option, the question is whether when the time period in which an option may be exercised has lapsed, there can be an effective waiver of this requirement. The answer to this depends on the characterisation of an option to renew. Mr McQuade for the respondent relied upon statements in the judgment of Kelly SPJ in Traywinds Pty Ltd v Cooper [1989] 1 Qd R 222, which he submitted supported the view that the stipulation as to time in an option to renew could be waived. It seems clear on a reading of his Honour’s reasons, that he was expressing no concluded view on the subject and was content to find that either waiver or by the coming into existence of a fresh agreement by the acceptance of a counter-offer (being the offer to exercise the option out of time) sufficiently characterised what had occurred. Macrossan J as his Honour then was, agreed with the SPJ and likewise

considered that if the option agreement under consideration could properly be regarded as a conditional contract for the grant of a further term, then the doctrine of waiver may operate, but he too considered that it was not necessary to seek to provide a definitive answer on that question. However, his Honour did comment that the fact that a different higher rent was paid and accepted bespoke the existence of a fresh agreement. That is not the case here, although new terms were included in the proposed new lease which was subsequently provided to Copperart. De Jersey J having been referred to Traywinds, preferred the characterisation in that case of the facts as a counter-offer, in Duncan Properties Pty Ltd v Hunter [1991] 1 Qd R 101 at 106. He was of the view that the option to renew a written lease depended on exact compliance with its notice requirement, and when notice was not given by the due date, the option lapsed completely (see 103). [page 453] With respect to his Honour, that seems to be the generally accepted approach, dependent always upon the terms of the option. See Gilbert J McCaul (Australia) Pty Ltd v Pitt Club Ltd (1959) SR (NSW) 122; United Scientific Holdings v Burnley Borough Council [1978] AC 904; Commonwealth v Antonio Georgio Pty Ltd (1986) 12 FCR 51 and B S Stillwell and Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589. His Honour then set out the passage from McCaul’s case (at 123–4) which is set out at [14.1] and continued (at 357): Having concluded that the option requirement as to time could not be waived it follows that without a further agreement there could not be an implied extension of time in which to exercise it. See also B S Stillwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd at 594–5 (per O’Bryan J) and 603–4 (per Gray J) and the other cases considered at [14.6]; see also Forrest Chase Medical Services Pty Ltd v Toliver Pty Ltd [1998] ANZ ConvR 31 where the court (per Anderson J) determined that a sublessor

had agreed to renew a sublease despite the subtenant’s wish to do so being communicated after the expiration of the option period. In Forrest Chase Medical Services Pty Ltd the parties’ conduct after the expiry of the period for exercising the option was relevant to the decision. While it was not necessary for Anderson J to consider the tenant’s alternative claim based on estoppel, his Honour held the tenant would have succeeded in a claim based on estoppel but that good conscience would only have entitled the tenant to remain in the premises for 12 months which was less than the period that would have resulted from the exercise of the option. As to statutory relief against the loss of the right to exercise an option in some jurisdictions, see [14.6]; as to equitable relief generally, see [14.11]; and as to leases created by estoppel and estoppel generally, see [1.15], and with particular reference to the exercise of an option to renew, see [14.6]. A defective notice cannot be cured retroactively by ratification or amendment after the time for giving it has elapsed: Churcher v Danis Hotels Pty Ltd (SC(NSW), Holland J, 12 February 1980, unreported); Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8.

Service of notice of exercise [14.10] The lease itself may make provision for the service of the notice of exercise of option, either by way of a general provision for the service of notices or by way of specific provision in the option clause itself: see Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995) 63 SASR 235 (FC). As the Elizabeth City Centre case indicates, it is a matter of construction whether a provision in a lease with respect to the service of notices prescribes an exclusive mode of service or whether its purpose is to deem service if its requirements are complied with, without the necessity to prove actual receipt of the notice. The postal acceptance rule in contract (as stated in [page 454] Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93

at 111 (per Dixon CJ and Fullagar J), which is an exception to the general rule in contract that acceptance must be communicated, is not generally applicable: Elizabeth City Centre at 63 SASR 238 (per King CJ) and 241 (per Millhouse J); and see Bressan v Squires [1974] 2 NSWLR 460 at 462 (per Bowen CJ in Eq); Holwell Securities Ltd v Hughes [1973] 1 WLR 757 (per Templeman J) and [1974] 1 WLR 155 (Court of Appeal) (per Russell LJ at 158 and Lawton LJ at 161); Levitt v Illawarra Seafood Pty Ltd (No 2) [1983] 3 BPR 97165 (per Kearney J at 9140); see also Young J in Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd [1998] 9 BPR 16,631 at 16370–16372; Wallville Pty Ltd v Liristis Holding Pty Ltd (2001) 10 BPR 19,098; Ring v RW & CD Investments Pty Ltd [2004] NSWC 1045; see also Parras v FAI General Insurance Company Ltd (2001) 10 BPR 19,209 and on appeal (2002) 55 NSWLR 498; (2002) BPR 20,475. Section 198 of the Property Law Act 1958 (Vic) (and see Conveyancing Act 1919 (NSW) s 170; Law of Property Act 1936 (SA) s 112; Conveyancing and Law of Property Act 1884 (Tas) s 85) should also be borne in mind; see also Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd; Wallville Pty Ltd v Liristis Holding Pty Ltd; and Ring v RW & CD Investments Pty Ltd. This deals with the service of notices under Pt II of the Act, and subs (5) extends the provisions of the section to notices required to be served by any instrument affecting property unless a contrary intention appears. When an agreement provided that an option to purchase the leasehold interest should be exercised by notice in writing given by registered mail, and a notice was sent by ordinary mail, it was held that the requirement of the agreement had not been observed: Mobil Oil Australia Ltd v Kosta [1970] ALR 253; 14 FLR 343. That it may not be safe to deliver notice of the exercise of the option to the solicitors acting for the landlord is shown by Lo Giudice v Biviano (No 2) [1962] VR 420. Subject to these considerations, the statutory provisions extend the means by which service may be effected; however, they do not prescribe the only means: Ex parte Dally-Watkins; Re Wilson (1955) 75 WN (NSW) 454. Clauses contained in leases that describe how notices ‘may’ be given to a party to the lease are generally construed as being facultative only and not as prescribing an exclusive method for the service of notices: see Wilson’s Laundry Pty Ltd v Patmoy (1961) 78 WN (NSW) 636; and Tsaoucis v Gallipoli Memorial Club Ltd (No 1) (1998) 9 BPR 16265.

The decision of the New South Wales Court of Appeal in FAI General Insurance Company Ltd v Parras (2002) 55 NSWLR 498; (2002) BPR 20,475 is an interesting example of the issues that can arise concerning the relationship between provisions in a lease that provide for service of a notice and statutory provisions concerning modes of service of a notice. The Court of Appeal had to consider whether an option had been validly exercised. The option clause required a notice in writing to be given to the lessor during a specified time before the expiry of the lease. A separate clause [page 455] (cl 31(14)) provided that any notice ‘required to be served on the Lessor under this Lease shall be served personally or by sending the same by pre-paid registered post to the Lessor’s registered office’. The notice exercising the option was not served personally or by pre-paid registered post. The result of the application of s 170 of the Conveyancing Act 1919 (NSW) in conjunction with s 76 of the Interpretation Act 1987 (NSW) was that the option notice was deemed to have been received outside the period when the option could have been exercised. Section 170 sets out how notices can be served while s 76 provides a mechanism for determining the time at which service takes place. Fortunately for the tenant, the consequence of the application of the statutory provisions was overcome because the trial judge had found that on the balance of probabilities the option notice had in fact been received within the period that the option could be exercised. The Court of Appeal also had to consider whether compliance with cl 31(14) was a precondition to the exercise of the option. The court held that, while the option notice was ‘required to be served’ within the meaning of cl 31(14), compliance with that clause was not a precondition to the exercise of the option: a breach of that clause merely gave rise to a claim for damages by the lessor. Disputes as to whether an option has been exercised in time arise on occasions. Often the facts are disputed; the tenant may allege that the landlord is falsely denying the receipt of a notice, or the landlord may contend that the tenant is pretending to have sent a notice, the necessity for which he or she overlooked. Such disputes may be resolved by a finding, on the one hand, that

the landlord did receive the notice or, on the other hand, that it was never despatched. If the finding is an intermediate one — for example, that the notice was sent by post, but never received — is the tenant entitled to the further term? In such a case it will first be necessary to consider whether there is anything in the lease to make the mere posting of the notice good service: s 198(4) of the Property Law Act 1958 (Vic) will also have to be considered, and regard here had to Holwell Securities Ltd v Hughes [1974] 1 WLR 155, holding that the provisions of s 198 were inconsistent with the application of the theory of acceptance of an offer at the time of posting; see also Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd; Wallville Pty Ltd v Liristis Holding Pty Ltd; and Ring v RW & CD Investments Pty Ltd. If upon a consideration of any applicable provision as to mode of service it appears that notice has not been given in the manner required, it is then necessary to consider whether equity will grant relief. For example, will equity relieve against the accidental loss of the notice in the post? This matter is discussed in [14.11]. The courts will not allow the grantor of an option to benefit from intentionally evading service of a notice exercising the option until after the time stipulated for its exercise has expired: see Bragg v Alam [1981] 1 NSWLR 668, noted (1982) 56 ALJ 142 (affirmed CA(NSW), 5 July 1982, unreported). The validity of a notice served on a party’s agent is discussed in [14.8]. [page 456]

Relief in equity [14.11] A number of old cases are concerned with leases for lives containing covenants of renewal upon the dropping of a life and requiring the application for a renewal to be made within a stated time of the death. In Maxwell v Ward (1822) 11 Price 3; 147 ER 382; (1824) 13 Price 674; 148 ER 192, a lease for a term of years determinable at the deaths of three persons contained a covenant to renew upon notice given by the lessee within one year of the dropping of a life. The notice was not given because the lessee’s successor in title was unaware of the existence of the covenant. The report of the earlier proceedings is concerned with the question whether the defendant lessor

should be restrained from prosecuting an action of ejectment. During the argument, Richards CB said that, if an application had been made to the court at the time when the plaintiff became aware of the existence of the covenant, the court would most certainly have relieved the plaintiff from the effect of the objection that notice in writing had not been given, if it could have been shown that a fair intimation of an intention to renew had been given in any way. In continuing the injunction until the hearing of the suit, Richards CB said: I do not consider that it is necessary, in all cases of this sort, that there should be fraud, surprise or ignorance not wilful shown to entitle a party to relief. Those are common grounds of equitable relief in all cases of any description. This sort of relief is given constantly without any such causes existing, particularly in contracts for the sale of estates. When the suit came on for hearing two years later ((1824) 13 Prince 674; 148 ER 192), it was held by Alexander CB that there was no ground for relief in equity, since it was ‘quite clear that ignorance of a party’s own right, or of instruments in his possession or power, an ignorance to which the adverse party is in no way auxiliary, cannot excuse a non-performance of anything encumbent on that party to perform’. In Eaton v Lyon (1798) 3 Ves 690; 30 ER 1223, there was again a lease for lives with a covenant for renewal requiring notice to be given to the lessor within six months of the dropping of the life. Within six months of the decease of one of the lives the agent of the lessee went on the instructions of the lessee to the house in which the lessor resided in order to seek a renewal. The agent did not see the lessor, and was told that he was too ill to speak. The agent did not ask the person to whom he spoke at the house of the lessor to inform the lessor of his business. Arden MR held that the lessee had lost her right of renewal; she had not done everything in her power to give notice. The Master of the Rolls said: At law a covenant must be strictly and literally performed; in equity it must be really and substantially performed according to the true intent and meaning of the parties, so far as circumstances will admit; but if by unavoidable accident, if by fraud, by surprise, or ignorance not wilful, parties may have been prevented from executing it literally, a court of

equity will interfere; and upon compensation being made, the party having [page 457] done everything in his power, and being prevented by the means, I have alluded to, will give relief. It was this reference to fraud, surprise, or ignorance not wilful which led Richards CB to make the observation already cited in Maxwell v Ward, and to say that Eaton v Lyon laid down propositions somewhat more strongly than the cases warranted. In Blackwell v Smyly (1866) 3 WW & A’B (Eq) 1, there was a covenant to renew if requested by the tenant one month before the expiration of the lease. The lease had been granted by the mortgagee, by his attorney, and the mortgagor. The plaintiffs, who were assignees of the term, served notice exercising the option on the mortgagee’s attorney within the time limited by the lease. Counsel for the plaintiffs contended that the giving of this notice was a sufficient compliance with the condition precedent to a renewal; they cited Platt on Leases 1847 for the proposition that equity does not require the same strictness as is required at law in the performance of conditions, and referred also to Maxwell v Ward (1822) 147 ER 382 at 387. Molesworth J held that the right of renewal subsisted against the mortgagee, Farrow, and the mortgagor, Hodge. His Honour said (at 384): I think that regularly to entitle the plaintiffs to a renewal for seven years they should have tendered a lease to Farrow, or his agent Westwood, and Hodge, before 1 January 1863. Farrow was the principal person to serve, as clothed with the legal estate. But, under the circumstances of the case, I think that the right of renewal was saved in equity by the request made to Westwood as against Farrow and Hodge. I have referred upon this especially to Platt on Leases, 751 et seq; and Maxwell v Ward. The bill is framed too much under the view that the mere prolongation of possession after the year must be attributed to an exercise of the right of renewal, and although it states

the outlay of the plaintiffs, does not charge that Hodge had notice of it. If this was a case in which the tenant had sought to play fast and loose, retaining the claim for renewal without subjecting himself to the liability of a tenant covenanting, or in which the landlord might be imagined to have suffered inconvenience by acting under the impression that the claim for renewal was abandoned, I should be very backward to relieve as on the ground of accident or relief from forfeiture. But I think that Hodge, continuing to receive the rent after the year without fresh bargain, or any adjustment as to the tenant’s right of renewal allowance for improvements, or removal of them, must have been conscious that the tenants regarded their right of renewal as recognized. The basis of this decision appears to be that, while notice had not been given strictly in the manner required by the covenant, the case was an appropriate one for equity to relieve the plaintiffs from the consequences of the failure to comply strictly with the covenant. Ross (Earl) v Worsop [1740] 1 Bro Parl Cas 281; 1 ER 568, is another example of a lease for lives, perpetually renewable, requiring the nomination of a new life within six months after the failure of a life. Attempts made by the lessee to exercise the option were thwarted by the lessor; at one stage, the lessor promised to renew the lease on his return to Ireland from London; he further promised that no advantage would be taken of any lapse in the meantime. In these circumstances the [page 458] lessee was relieved against a forfeiture for not literally complying with the terms of the covenant. The facts were very different in Harries v Bryant (1827) 4 Russ 89; 38 ER 738. That was yet another case of a lease for lives containing a covenant for renewal upon the dropping of any life, provided that application was made within six months. The assignee of the lease, having failed to apply within the six-month period, brought proceedings claiming relief against the consequence of his failure to comply with the terms of the covenant. The ground upon which relief was sought was that the assignee did

not within the six-month period know that the person was dead, or that the deceased person was one of the lives named in the lease. The bill was dismissed, since the plaintiff might have known the facts if he had used reasonable diligence and acted with ordinary prudence. Sir John Leach MR delivered the following judgment: A court of equity will relieve against the effect of an express covenant, where strict performance of the condition is prevented by ignorance not wilful, or by unavoidable accident. Ignorance is considered to be wilful, where a person neglects the means of information, which ordinary prudence would suggest; and accident is not unavoidable, which reasonable diligence might have prevented. When the plaintiff became the assignee of a lease containing such a condition or covenant for renewal, ordinary prudence would have suggested, and reasonable diligence would have required, that he should have ascertained who the lives were, and have taken measures to secure early information of their deaths. All this he appears to have neglected; his ignorance, therefore, was wilful, and the accident not unavoidable, assuming the facts to be as he alleges them. To the same effect is Reid v Blagrave (1831) 9 LJ (OS) Ch 245, where Leach MR said: … the rule is now established, that no accident will entitle a party to renew unless it be unavoidable. I am of opinion, that nothing but accident, which could not have been avoided by reasonable diligence, will entitle the plaintiff to a renewal in this court. See further Hussey v Domville [1903] 1 IR 265. In Statham v Liverpool Dock Co (1830) 3 Y & J 565; 148 ER 1304, it was held in unusual circumstances that the lessee was relieved from the strict performance of his obligations under the covenant, since otherwise the lessor would have been enabled to take advantage of his own wrong. In London Corporation v Mitford (1807) 14 Ves 41; 33 ER 437, the covenant for renewal was one whereby the lessor would a month prior to the expiration of the lease upon request grant another lease. The lessee did not apply for a renewal within the time limited. Lord Eldon dismissed the bill, saying (at 443):

I shall not notice the cases farther than by observing, that there is a great distinction between this and the cases upon leases for lives; and that, where there has been default of this kind in making a request, unless it has been excused by circumstances, there is no authority for decreeing a specific performance … In Hunter v Hopetoun (Earl) (1865) 13 LT 130; 29 JP 727 the plaintiff held a lease for 19 years, perpetually renewable on 12 months’ previous notice before the expiration of each term. By his suit he sought to compel the landlord to renew from 1842 to [page 459] 1861. The defendant pleaded that the lease had been forfeited for breach of covenants. The suit was allowed to stand still and the parties negotiated. The time arrived for the plaintiff to give notice of renewal of a term from 1861 to 1880. He failed to do so, but was held to be excused from giving the notice, it being inequitable in the landlord to insist on compliance with a covenant of which he denied the existence. While it is to be regretted that there is no modern authority which lays down clearly the principles to be applied to a claim by a lessee who seeks to be relieved from the consequences of his or her failure to comply with the requirements of the lease as to the exercise of the option of renewal, it is to say the least possible, on the older authorities, to contend with some force that a lessee, whose diligent efforts to comply with his or her obligations are unavailing through no fault of his or her own, is to be placed in the same position as he or she would have occupied had he or she strictly complied with the requirements of the lease; at all events in a case where the lessor has not altered his or her position on the faith of a belief that the option had not been exercised. This is in contrast to the position where relief is being sought against the loss of the right to exercise an option for renewal: see [14.6]. Some of the earlier cases were considered in Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1064 where the provision was not for renewal but for rent review. The judgments do not, however, enable a clear set of principles to be enunciated concerning relief against failure to renew in time. The

decision of the House of Lords in Shiloh Spinners Ltd v Harding [1973] AC 69l suggests that a lessee might obtain relief even in the absence of ‘accident’ or some other supposed recognised category of extenuating circumstances. As to the possibility of an estoppel arising against the lessor denying the lessee’s right to exercise the option in spite of a breach of covenant or some defect in the manner of exercise of the option, see [14.6]. In New South Wales, Queensland, Western Australia and New Zealand the loss of the right to exercise an option may, in some circumstances, be relieved against under statutory provisions enacted in those jurisdictions: see [14.6]. As to relief against forfeiture generally, see Chapter 19; see also C Rossiter, Penalties and Forfeiture, Law Book Co, Sydney, 1992; and M Redfern, ‘Relief Against Failure to Exercise Option’ (1994) 2 APLJ 286.

[page 461]

15 Assignment and Subletting Assignment [15.1] The relationship of landlord and tenant exists between the original parties to a lease, but it may also arise in consequence of assignment. The assignment may be either of the term or of the reversion: see Milmo v Carreras [1946] KB 306 (CA); Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 (FC); City of London Corporation v Fell [1993] QB 589 at 603–4 (approved [1993] 4 All ER 968 (HL)); Haidar v Blendale Pty Ltd [1993] 2 VR 524; and see [15.19], [15.20]. As to the position of a debenture holder, see Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 WLR 800 (discussed All ER Rev 1989 pp 191–3); and as to the position of mortgagees generally, see [5.16], [7.4] and [15.20]. If the term is assigned, the relationship of landlord and tenant is created between the assignee of the reversion and the lessee; if both the term and the reversion are assigned, the relationship arises between the assignees. The expression ‘assigns’ comprehends not only those who take immediately, but also those who take remotely: Bailey v De Crespigny (1869) LR 4 QB 180 at 186. Once an assignment of a lease becomes effective to pass the estate to the assignee, the lessee no longer has any rights founded on the estate and ceases to be a tenant: Richardson v Landecker (1950) 66 WN (NSW) 236. Although a lessee may validly assign his or her interest in part of the demised premises, an assignment of part of the term is a sublease: Federal Commissioner of Taxation v G J Coles & Co Ltd (1974) 4 ALR 163 at 178–9; on appeal (1975) 132 CLR 242 at 252; 6 ALR 83 at 90; 409 Lonsdale Street Pty

Ltd v Carra [1974] VR 887 at 893; and see A Goldfinch, ‘Sublease or Assignment’ (1994) 2 APLJ 261. An assignment, whether of the term or of the reversion, may be either by the act of the parties or by operation of law. An option to purchase will ordinarily pass upon an assignment of the lease: Price v Murray [1970] VR 782; and see Tenstat Pty Ltd v Permanent Trustee Aust Ltd (1992) 28 NSWLR 625 as to an option to renew; see also [page 462] [15.20] in relation to the benefits and burdens which pass on the assignment of the reversion. As to co-owners generally, see [5.15] and as to co-owners, surrender and assignment, see [16.16]. The purist would probably confine ‘lessor’ and ‘lessee’ (whether used with or without a prefix) to the original grantor and grantee respectively of the term, and speak always of the assignee of the reversion or the term as ‘landlord’ or ‘tenant’, as the case may be. Modern usage appears, however, to sanction the use of ‘lessor’ and ‘lessee’ in relation to mere assignees. But the context may show the words are used in the sense of the parties to the contract of letting. This was the case in R v Tottenham and District Rent Tribunal; Ex parte Northfield (Highgate) Ltd [1957] 1 QB 103; [1956] 2 All ER 863, where the section used also the words ‘grant’ and ‘party to the contract’. In Re Rakita’s Application [1971] Qd R 59 the word ‘lessees’ was held not to be limited to the original lessees. The position in England with respect to the rights and obligations of parties to a lease and assignees of the lease term or the reversion has been changed radically by the Landlord and Tenant (Covenants) Act 1995: see Hindcastle Ltd v Barbara Attenborough Associates Ltd [1997] AC 70 and P Butt, ‘Liability of tenant for assignee’s breaches’ (1996) 70 ALJ 600.

Subletting [15.2]

Assignment of the term must be distinguished from subletting

(sometimes called underletting). A sublease is a lease by a tenant; it is a separate demise by the tenant to the subtenant and it follows that there is no privity of contract or estate between the landlord (the head landlord) and the subtenant: see Williamson v Williamson (1873) LR 9 Ch 729 (CA); and Mackusick v Carmichael [1917] 2 KB 581. In Williamson v Williamson the landlord consented to the subleasing on the basis that the provisions of the sublease prevent further subletting or assignment. The landlord’s consent was sought and given under a provision in the head lease which prohibited assignment or subletting without consent. The sublease contained the usual provision that the sublease contain the provisions of the head lease, so the question arose whether the same provision applied to the sublease to require the consent of the head landlord to any assignment or subletting, or only that of the tenant under the lease, the landlord under the sublease. It was held that only the consent of the tenant under the lease, the landlord under the sublease, was required. As a matter of construction it was held that the effect of the reference in the sublease to the provision in the head lease restricting assignment or subletting was merely a convenient drafting device, the effect of which was merely to transpose (or ‘cut and paste’) from the head lease to the sublease the relevant provision. However, this device or process did not have the effect of making the head landlord a ‘party’ to this provision either as a party to the sublease or as a person for whose benefit the provision was included. If, as a matter of [page 463] construction, the latter had been the position, the head landlord may have been able to enforce the provision either on the basis of the Property Law Act 1958 (Vic) s 56 (or its equivalents), or more generally: see Beswick v Beswick [1968] AC 58 (HL); Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460; Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107; and see S Robinson, Property Law Act of Victoria, Law Book Company, Sydney, 1992, pp 114–17. The position may also be different if the head landlord was a party to the sublease; but the position would, nevertheless, depend on the proper construction of the relevant provisions of the sublease. Subject to the terms of the sublease a subtenant is not an assignee

or an agent of the lessee: Mackusick v Carmichael at [1917] 2 KB 584 (per Atkin J). As to the effect of determination of the head lease or subleases and the relationship between the subtenant and the head landlord, see [16.3]. Such a lease must be for a term less than the tenant’s own. If the tenant transfers the whole of his or her interest, the result is not a sublease, but an assignment, notwithstanding that the conveyance may take the form of a lease: Beardman v Wilson (1868) LR 4 CP 57. If it is desired to create only a sublease, some reversion, be it only a day, must be preserved: White v Kenny [1920] VLR 290 at 295; and see Milmo v Carreras [1946] KB 306 (CA); see also [15.18]. The common law rule that a purported subletting for the whole of the balance of the lessee’s term operates as an assignment does not apply to tenancies from year to year or other periodic tenancies: Burrell v Duncan [1957] St R Qd 52 at 56. In Woods v Moses [1953] ALR 1156 it was held that a weekly tenant can grant a sublease from week to week. See further [1.8]; Gilbert v Beattie [1921] GLR 58. For an example of the retention of a reversion of one day upon the grant of a sublease by the holder of a 55-year building lease, see Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported). An assignment of part of the term is a sublease: 409 Lonsdale Street Pty Ltd v Carra [1974] VR 887 at 893. There may, however, be a valid assignment of the whole of the interest of a lessee in part of the demised premises: Federal Commissioner of Taxation v G J Coles & Co Ltd (1974) 4 ALR 163 at 178–9; G J Coles & Co v FCT (1975) 132 CLR 242 at 252; 6 ALR 83 at 90. A lessee may enter into an arrangement with another person whereby that person is to manage the lessee’s business on the leased premises for a stated period of time. Such an arrangement is probably not an assignment or a sublease of the term even if the arrangement between the lessee and the manager is that the manager should pay the lessee a certain sum per week and keep the rest of the profits for him or herself. In such a case the lessee keeps control of the premises. On the other hand, if it is shown that he or she does not keep such control, the arrangement may well be categorised as a subletting or an assignment of the term: Scala House and District Property Co Ltd v Forbes [1974] QB 575 at 583–4; see also [7.12]. Where it is uncertain whether a document executed by a lessee and a third party created a sublease or an assignment, extrinsic evidence may be admissible to show

[page 464] the intention of the parties: Lane v Capellari (1950) 68 WN (NSW) 1; and see [6.3]. When a document is the subject of ambiguity in the sense that it is capable of two meanings, evidence may be admissible of the surrounding circumstances; but not what the parties did under the document for the purpose of seeing whether it is to be construed as bearing one or the other of the two possible meanings: see FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 (FC); and see [6.3]. The material portions of a document executed by a person who had a weekly tenancy of certain premises and a third party were as follows: ‘Memorandum of agreement made 5 September 1949 to let and take [the premises concerned] for a term of one week — thence weekly to be computed from 5 September 1949, at the weekly rental of £2’. The document created, not a sublease, but an assignment of the tenancy: Robinson v Hudson (1950) 68 WN (NSW). Subleases are often called underleases, although the former expression is more commonly used in Australia. The holder of the leasehold interest created by a sublease may him or herself grant a lease for a term less than his or her own, called a sub-underlease (Re Knight and Hubbard’s Underlease [1923] 1 Ch 130) and so on ad infinitum. The lease granted by the freeholder is usually called the head lease and the parties thereto are usually called the head lessor and head lessee. The head lessor may also be described as the superior landlord. If there are several steps in the ladder or pyramid of lettings, the expression ‘superior landlords’ may be used of all the landlords who occupy a position above that of the landlord under consideration; ‘immediate landlord’ is a useful description of the person who is entitled to the immediate reversion; that is to say, the person of whom the relevant tenant directly holds the land. The head lessee, viewed from the standpoint of the sublessee, is called the sublessor or (less frequently) the underlessor. The holder of the term created by the sublease is known as the sublessee or underlessee, and the holder of the term created by a subunderlease is called the sub-underlessee; the expression ‘sub-undertenant’ does not appear to be used. Between lessor and sublessee there is privity neither of contract nor of estate: Fuller’s Theatre and Vaudeville Co Ltd v Rofe [1923] AC 435 at 438.

The granting of a licence does not constitute subletting: Copley v Newmark [1950] VLR 17; see also Scala House and District Property Co Ltd v Forbes [1974] QB 575; provided the arrangement is, at law, a licence and not merely labelled to mislead the lessor into thinking that there has not been an assignment or a subletting: Dellneed Ltd v Chin [1987] 1 EGLR 75; and see [1.3] and [3.2]. The mere entry into possession of premises and payment of rent therefore are not of themselves sufficient to found an estoppel that the person so entering is an assignee of an existing lease of such premises: Mitchell v Catlin [1948] VLR 367. Payment of rent out of a fund to which the occupiers of a portion of the premises contribute does not necessarily prove a subletting to them: Re Messenger (1960) 77 WN (NSW) 114. In Walliker v Deveaux (1961) 78 WN (NSW) 409, it was held that the fact that the lessee and M (who occupied one room in the [page 465] lessee’s flat) referred to the payment made by the latter to the former as rent was not very important and did not prove subletting: see also Milne v Lahz (1951) 52 SR (NSW) 30, as to presuming an assignment or sublease from a change in occupation. As to the evidence necessary to support the inference of a subletting where the tenant goes out of possession and another person is in occupation in his or her stead, see Watson Holdings Pty Ltd v Hodinott (1957) 75 WN (NSW) 168; see further [15.3]. Generally, see Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 (FC) at 110–11 (per Brinsden J); and see [15.19].

Parting with possession [15.3] Most leases are so worded that the mere parting with possession by the lessee of the demised premises during the currency of the term gives the lessor the right to re-entry. Often it is difficult to establish whether or not the lessee has parted with possession of the premises in the relevant sense. The mere fact that such premises are, at a given point in time, occupied by a

person other than the lessee is not conclusive. The rule seems to be that a lessee who retains the legal possession does not commit a breach of the covenant against parting with possession if he or she merely allows other people to use the premises. Consequently, a lessee who grants a licence to another to use the premises in question does not commit a breach of the covenant unless such action on his or her part wholly ousts him or her from legal possession: Peebles v Crosthwaite (1896) 13 LT 37 at 38; (1897) 13 TLR 198 at 199; Jackson v Simons [1923] 1 Ch 373 at 380; [1922] All ER Rep 583 at 586; Chaplin v Smith [1926] 1 KB 198 at 206, 209 and 210; Copley v Newmark [1950] VLR 17; Pincott v Moorstons Ltd [1938] 1 All ER 513 at 515; Scala House and District Property Co Ltd v Forbes [1974] QB 575 at 583–4; Lam Kee Ying Sdn Bhd v Lam Shes Tong [1975] AC 247; see [19.4]; [1974] 3 All ER 137 at 143 and see [1.3] and [1.4] in relation to the effect of the exclusive possession. The question whether the lessee has parted with possession of the demised premises must depend on all the facts and circumstances of the case. In Lam Kee Ying Sdn Bhd v Lam Shes Tong, the lessor leased certain premises to the lessee. The lessee covenanted ‘not to assign underlet or part with the possession of the demised premises or any part thereof without the prior written consent of the (lessor) such consent not to be unreasonably withheld’. The lessor was given a right of re-entry for breach of that covenant. Shortly after taking possession, the lessee formed a company in which he was the principal shareholder. Thereafter, the company carried on a business at the demised premises. The electricity and water supply and the telephone service were transferred into the name of the company. The company also erected outside the demised premises a signboard showing that it carried on business on the leased premises. The company tendered to the lessor a cheque drawn on its account as payment of a [page 466] month’s rent in advance whereupon the lessor commenced proceedings for forfeiture of the lease on the ground that the lessee was in breach of the covenant against assigning, underletting or parting with possession of the

premises without consent. The Privy Council considered that the evidence as to the erection of a signboard, and the transfer of the electricity, water supply and telephone service to the name of the company was equivocal and consistent with the conclusion that, although the company occupied the premises, the lessee retained possession of them. However, the fact that the company tendered its own cheque in payment of the rent was considered by the Board to amount to some evidence that the company regarded itself and was regarded by the lessee as having possession of the subject premises. It concluded that in the light of all the evidence the lessee had parted with possession and was therefore in breach of the abovementioned covenant. The question whether a lessee had parted with possession was considered more recently in Ace Property Holdings Pty Ltd v Australian Postal Corp. [2011] 1 Qd R 504 at 531–4 where Keane JA (as his Honour then was; and with whom Fryberg and Douglas JJ agreed) said, in reviewing the authorities: [84] The Judicial Committee in Lam Kee Ying v Lam Shes Tong explained the various factual considerations which led it to conclude in that case that there had indeed been a parting with possession by the lessee in the following passage (in which the first respondent was the lessee and the second respondent its subsidiary) [[1975] AC 247 at 256-257]: “A covenant which forbids a parting with possession is not broken by a lessee who in law retains the possession even though he allows another to use and occupy the premises. It may be that the covenant, on this construction, will be of little value to a lessor in many cases and will admit of easy evasion by a lessee who is competently advised, but the words of the covenant must be strictly construed, since if the covenant is broken a forfeiture may result: Crusoe d Blencowe v Bugby (1771) 2 WmB1 766, 767 and Chaplin v Smith [1926] 1 KB 198, 210. … [T]he question whether the first respondent has parted with possession must depend upon all the facts and circumstances of the present case which in their Lordships’ opinion are distinguishable from those of the cases cited. Some of the

evidence–as to the erection of the signboard, the transfer of the electricity, water supply and telephone, and the issue of receipts, bills and invoices in the name of the second respondent–is equivocal and is quite consistent with a conclusion that although the second respondent occupied the premises the first respondent retained possession. However the fact that the second respondent tendered its own cheque in payment of the rent is some evidence that the second respondent regarded itself, and was regarded by the first respondent, as having possession of the premises. Even more significant in their Lordships’ opinion is the fact that at no time before the trial or in evidence did the respondents give an unqualified denial that the first respondent had parted with possession to the second respondent. In their solicitors’ letter of November 13, 1969, in their defence and in evidence the reply given by the respondents to the claim that they had broken the covenant was not that there had in fact been no parting with possession, but [page 467] that there had been no parting with possession because the first respondent was a major shareholder in the second respondent. If in truth the second respondent had merely been given a licence to occupy the premises, and the first respondent had retained possession, it would have been easy for someone to say so. The other evidence that is in itself equivocal is to be understood in the light of the fact that the respondents, who could have produced affirmative evidence that the first respondent retained possession if that had been the fact, failed to do so. In their Lordships’ opinion the proper conclusion to be drawn from the whole of the evidence in the case, scanty as it may be, is that the first respondent did part with possession of the premises. The trial judge was therefore correct in his

conclusion that the evidence established a breach of the covenant contained in clause 1(g) of the lease.” [85] Two points may be made here about the decision of the Judicial Committee in Lam Kee Ying v Lam Shes Tong. First, the issue whether there had been a parting with possession was not resolved in favour of the lessee by reason of the fact that the occupant was its subsidiary. Secondly, the absence of “affirmative evidence” from the lessee that it “retained possession”, as opposed to enjoying the right to reclaim possession, was fatal to the lessee’s case that it had not parted with possession. [86] A different view of the significance of the circumstance that the relationship between a lessee and the occupant of premises is that of holding company and subsidiary respectively was taken in the Court of Appeal of England and Wales in Akici v LR Butlin Ltd. In that case Neuberger LJ said [[2006] 1 WLR 201 at 217 [79]–[81]]: “Where a lessee owns all the shares in, and exclusively controls, a company which is operating the only activity conducted in the demised premises, it appears to me that, unless it is inconsistent with other facts, it is permissible to treat the company as the agent of the lessee for the purposes of identifying who is in possession of those premises. It is clear that such an analysis is open in principle from the reasoning of the House of Lords in Rainham Chemical Works Ltd v Belvedere Fish Guano Co Ltd [1921] 2 AC 465: see, for instance the speech of Lord Buckmaster, at p 478, and Lord Sumner, at p 483. It is only right to acknowledge that in that case the arrangement to that effect was expressly agreed: see p 474. None the less, where the lessee has covenanted not to part with or share possession (and even more, perhaps, where he is seeking to remedy the breach of having done so) it appears to me right at least to lean in favour of an analysis of the relationship between lessee and occupier which results in there being no breach of covenant. This approach appears to derive

some support from the judgment of Bankes and Warrington LJJ in Chaplin v Smith [1926] 1 KB 198, 207 and 209–210. It is true that the very fact that a person chooses to conduct his business through a company is because the company is treated as a different entity in law from him, and that there is therefore nothing unfairly artificial in treating him as sharing possession with (or, depending on the facts, as parting with possession to) the company. However, where the lessee owns all the shares in, and is in sole control of a company, it seems to me that it is justifiable in principle, as well as commercially sensible, to treat the lessee as in possession through the medium of the company (possibly as well as through his own presence). In such a case it is no more artificial to treat the lessee as being in possession through the company [page 468] than it is to treat an employer who requires an employee to reside in premises as enjoying possession through his employee: see Street v Mountford [1985] AC 809 at 818F–G.” [87] Where commercial activity is conducted by corporations organised under the Corporations Act 2001 (Cth) and its analogues, the legal doctrines of separate corporate personality and limited personal liability are brought into play, [Salomon v A Salomon & Co Ltd [1897] AC 22; Lee v Lee’s Air Farming Ltd [1961] AC 12; Friend v Brooker (2009) 239 CLR 129 at 161 [88]] so that the business conducted by Decipha is, prima facie, its own business and not the business of Australia Post [Macaura v Northern Assurance Co Ltd [1925] AC 619]. One may accept that the courts should not be astute to allow legal forms to defeat commercial substance, but here the commercial substance was that Decipha occupied the Premises in order to conduct a business operation which Australia Post could not conduct because the operation was to be carried out by employees it chose not to employ. The discussion by Neuberger LJ does not encompass a case,

such as the present, where the subsidiary has been chosen by the holding company to conduct the activities on the premises in question because the lessee chooses not to carry on those activities through its own employees. [88] On occasion the courts have been willing to penetrate the corporate veil when the concept of separate corporate personality is sought to be used to defeat public convenience, or to justify wrong, or to protect fraud, or to defend crime [United States v Milwaukee Refrigerator Transit Co 142 F 247, 55 (1905); Hotel Terrigal Pty Ltd (in liq) v Latec Investments Ltd (No 2) [1969] 1 NSWR 676]. It may also be that a subsidiary’s relationship with its holding company is so arranged that the parent company’s business is conducted by the subsidiary as an agent of the parent [Smith, Stone & Knight Ltd v Birmigham Corporation [1939] 4 All ER 116]. Such cases are, however, exceptional: the decision of the Privy Council in Lam Kee Ying v Lam Shes Tong [[1975] AC 247] stands as a reminder that the doctrines of separate corporate personality and limited personal liability are not set at nought by the mere existence of a relationship of subsidiary and holding company. [89] In Lam Kee Ying v Lam Shes Tong [[1975] AC 247], the Judicial Committee decided that there had in fact been a parting with possession by the lessee even though, as the court below had held, the second respondent, the occupant, was the subsidiary of the first respondent, the lessee. Sir Harry Gibbs, who delivered the advice of the Privy Council, expressly made the point that the court below was wrong to treat the circumstance that the second respondent was a subsidiary of the first respondent as apt to defeat the inference that the lessee had parted with possession to the second respondent. Sir Harry Gibbs said [[1975] AC 247 at 255-6]: “… [T]he [Federal Court] went on to hold that … the trial judge had erred in finding that there was a breach of covenant; in the opinion of the Federal Court, there had been no assignment of the lease and the second respondent, although let into occupation by leave and licence of the first respondent, had not been given possession.

… The sole breach alleged was a parting with the possession of the demised premises. It could not be disputed that the first respondent had permitted the second respondent to occupy the premises. Counsel for the respondents … very [page 469] properly, did not place any reliance on the fact that the second respondent was a company controlled by the lessee in submitting that there had been no parting with possession …” [90] These remarks are consistent with the view that the circumstance that Australia Post might alter the existing state of affairs in which Decipha has possession of the Premises, by the exercise of its power as shareholder, is not inconsistent with the conclusion that that state of affairs does presently exist. The absence of a documented agreement between Australia Post and Decipha in relation to the terms on which Decipha is in occupation of the Premises is also consistent with the view that Decipha has possession of the Premises unless and until Australia Post exercises its corporate power to change that situation. More importantly, it is also consistent with the absence of affirmative evidence from Australia Post that it retained possession of the Premises, eg by virtue of the retention of keys to the Premises by employees of Australia Post. [91] These observations do not, I think, give undue weight to the legal technicality that Australia Post and Decipha are separate legal persons. Decipha’s business was conducted by its own employees who were not employees of Australia Post. Decipha made its own contracts with customers. One should not assume that these commercial realities could be, or would be, changed by the stroke of a pen especially when one bears it in mind that Australia Post had no use for the Premises other than as a site for Decipha’s business. Decipha had given consideration to seeking a sub-lease of the Premises; that would have been consistent with the “commercial reality” of the situation. This did not occur, and while it may be accepted that Australia Post was

entitled to take such steps as it might be advised to ensure that it did not breach cl 7.1 of the lease, to say this is to recognise that it is Australia Post, not Ace, which is driven to rely on legal forms to defeat the inference which would otherwise be drawn from commercial substance. And the only legal form on which Australia Post can rely is the relationship of holding company and subsidiary. In my respectful opinion, this point does not rebut the conclusion which otherwise flows from the facts of the case. [92] I note that in the lease in question here, there was no covenant against sharing possession. The effect of a covenant against sharing possession was explained by Neuberger LJ in Akici v Butlin Ltd [[2006] 1 WLR 201 at 208 [29]] as being “to prevent the conversion to a single lessee into what, in practical terms, will amount to a joint tenancy”. It may be accepted for the sake of argument that there is no parting with possession in the mere sharing of possession. But if, as appears to be the case here, Decipha had such a degree of control over the Premises that they were used solely for Decipha’s operations conducted by it in its own right, it is accurate to say that it had obtained possession of the Premises from Australia Post. This description of the circumstances of Decipha’s occupation of the Premises is no less accurate because that position could have been changed by the exercise by Australia Post of its corporate power over its subsidiary. A lessee who covenants ‘not … to use the demised premises for any other purpose than (a specified type of) supermarket’ does not necessarily breach a covenant not to part with possession of the demised premises merely because he ceases to pursue actively the activity contemplated by such ‘purpose’: Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268. [page 470]

Mesne lessors

[15.4] The use of the expressions ‘mesne lessor’ and ‘mesne lessee’ is best avoided, having regard to their uncertain import. They are nowadays used in various senses, and are at times to be found in a statute bearing a special meaning, which may or may not be enshrined in a definition section. The expression ‘mesne lord’ derives from the feudal system. Where a tenant held directly from the Crown, he or she was a tenant in chief (in capite). If he or she did not hold directly from the Crown, he or she held from an intermediate lord, and that person held either from the Sovereign or from another intermediate lord. The Crown was lord paramount of all land within the realm. The intermediate lords were known as ‘mesne lords’: see Re Holliday [1922] 2 Ch 698. To describe as a ‘mesne tenant’ one who held of a mesne lord was, strictly, erroneous: Shorter Oxford English Dictionary, ‘mesne’. ‘Mesne tenant’ should be regarded as synonymous with ‘mesne lord’, although as great an authority as Holdsworth describes a person who holds of a ‘mesne lord’ as a ‘mesne tenant’: History of English Law, vol 3, p 79. To introduce into the law of landlord and tenant a term of art taken from the law of feudal tenure tends to produce confusion. Sometimes ‘mesne lessor’ is used in the sense of the grantor of a sublease. This is the sense in which the term should be employed, if it is to be used at all. So in E Lewis and D Cassidy, Tenancy Law of New South Wales, Butterworths, Sydney, 1966, (looseleaf), p 272, the grantor of a sublease is described as the ‘mesne lessor’, the learned authors correctly pointing out that ‘mesne lessee’ should not be used to describe the subtenant, it being merely a variant of ‘mesne lessor’; similarly, the grantor of a sublease may be regarded either as head lessee or as sublessor. This use of the term ‘mesne lessor’ preserves the notion that such a person is an intermediate lessor, who intervenes between the freeholder and subtenant. In the same way, in the English Landlord and Tenant Act 1954, Fifth Sch, para 1, ‘mesne landlord’ is defined as ‘a tenant whose interest is intermediate between the relevant tenancy and the interest of the competent landlord’. (This definition, incidentally, also illustrates the option that the framer of definitions has of describing the sublessor either as a landlord or as a tenant.) Martin v Elsasser (1878) 4 VLR (L) 481 provides another example of the correct use of terms. In that case a lease was granted by Mackenzie to Martin. Mackenzie having died, his executors became the head (or superior) landlords in his place. Martin granted a sublease to Elsasser, and Martin, being

the grantor of the sublease, is referred to by the Full Court as the mesne landlord. By the now repealed Landlord and Tenant Act 1958 (Vic) s 43(1): ‘Lessor’ and ‘lessee’ mean the parties to a lease, or their respective successors in title, and include: (a) a mesne lessor and a mesne lessee; (b) a sublessor and sublessee; and [page 471] (c) in respect of premises which are subject to a mortgage, a mortgagee who enters or has entered into possession of the premises under the mortage and a person who was the lessee of the premises under the mortgagor immediately prior to the mortgagee entering into possession respectively. The framer of this definition has fallen into the error, already mentioned, of failing to appreciate that ‘mesne lessor’ and ‘mesne lessee’ should, like ‘sublessor’ and ‘head lessee’, be regarded as the same person viewed from different aspects. It would also appear that the draftsman wrongly believed that the ‘mesne’ landlord was the head landlord. The definition must be made to work. Notwithstanding the use of the word ‘mesne’, para (a) is presumably intended to catch head lessors and head lessees. The presence of para (b) makes it impossible to treat para (a) as concerned with the parties to a sublease. One possible view (which would give effect to the notion of intermediacy contained in ‘mesne’) is that para (a) is directed to subleases and para (b) to sub-underleases. It is difficult to support this suggestion, for, since subunderleases are merely a type of sublease, para (b) according to its ordinary meaning applies both to subleases and to sub-underleases. It would therefore seem that, as earlier suggested, ‘mesne’ means ‘head’. Perhaps the use of language can be justified by the circumstance that (in legal theory) the freeholder is at most a tenant in fee simple, deriving his or her title from the Crown. To make this point is, however, to confuse the principles of the law of real property with those of the law of landlord and tenant. The suggestion

has already been made that, if the term ‘mesne lessor’ is to be used at all in landlord and tenant matters, it should be used only to describe an intermediate lessor, in the sense of the grantor of a sublease. For this purpose, the freeholder is not a tenant, notwithstanding that he or she may be the tenant in fee simple; he or she is the owner.

Power to assign or sublet [15.5] The lessor has power to assign the reversion. He or she may also lease the reversion. Such a lease is known as a concurrent lease, and operates as an assignment pro tanto of the reversion. Concurrent leases are discussed in [1.9]. The lessee has power to grant a sublease or to assign the term, whatever its nature, except in the case of a tenancy at will or tenancy at sufferance: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 62 WN (NSW) 240; Booton v Clayton (1948) 65 WN (NSW) 164; Fink v McIntosh [1946] VLR 290. A tenancy at will is not an interest which is capable of being assigned or sublet and a purported assignment or sublease which comes to the landlord’s knowledge will determine the tenancy: Fink v McIntosh [1946] VLR 290 at 292–3. A tenancy at sufferance is a mere fiction of the law: see [2.20]. A tenancy at sufferance does not create an interest capable of being assigned or sublet: Thunder d Weaver v Belcher (1803) 3 East 449 at 451; 102 ER 669 at 669–70; Martin v Elsasser (1878) 4 VLR (L) 481 at 484. The power to assign or sublet may be, and frequently is, restricted by the terms of the lease. [page 472] An assignment or sublease made in breach of a prohibition contained in the lease is nonetheless effective to pass the interest, the landlord’s right being in an appropriate case to determine the lease by forfeiture: Massart v Blight [1951] ALR 401; 82 CLR 423; Morison v Hall [1923] VLR 93; Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264 at [91]. In Molina v Leask [1998] ANZ ConvR 361 (confirmed on appeal, Leask v Molina [1999] NSWCA 14) the landlord of a shopping centre claimed rent from the original lessee of shop premises in the centre, their assignees (Molinas) and their assignee (Leask). There had been an agreement to take an assignment of the lease between the

Molinas and Leask and, while the relevant documents were not executed, Leask went into possession and conducted a business from the premises for a short period before abandoning the tenancy. Molinas sought to make Leask liable for the rent which the landlord sought from them. For the purposes of the proceedings it was assumed that GIO had not consented to the assignment to Leask, although it was not likely to have been withheld. In that context, Santow J said (at 363): An assignment for value which is not a legal assignment will nevertheless be upheld as an assignment in equity where there is either written evidence or part performance of that assignment … here there is both written evidence of the agreement and part performance … Where an assignment has been effected in equity — as is clearly the case here — the parties should be in the same position as if there had been a legal transfer of the lease … the fact of absence of consent to an assignment of lease makes such an assignment in breach of covenant, but does not make the assignment ineffective … the assignment was complete in equity notwithstanding the absence of consent of the lessor to the particular assignment to Mr Leask personally. The GIO takes the position in these proceedings that the assignment to Mr Leask was valid in equity. However this is not material, as consent must be asked for even if it could not be reasonably refused … put simply, the breach of covenant to obtain consent is a matter for the lessor and cannot be relied upon by Mr Leask as a matter preventing the assignment in equity. Thus the assignment of the lease should be treated as effective in equity, giving rise to liability on the part of Mr Leask to the Molinas. See also Gillion v Casserly (2005) Q ConvR 54-626. The fact that the transfer of a registered lease is made in breach of covenant does not entitle the registrar of titles to decline to register it; registration of the transfer does not affect the landlord’s right of re-entry for breach of covenant: Re Duggan (1883) NZLR 2 SC 144. The tenant may be restrained by injunction from assigning in breach of covenant: McEacharn v Colton [1902] AC 104.

Power to assign or sublet subject to consent [15.6] At common law, where the lease contained a covenant against assigning or subletting without consent, the right of the lessor to refuse consent was absolute and he or she might arbitrarily refuse consent: Tredegar v Harwood [1929] AC 72 at 79 and 82; [page 473] [1928] All ER Rep 11. The purpose of a covenant against assignment without the consent of the landlord is to protect the lessor from having his premises used or occupied in an undesirable way, or by an undesirable tenant: see Balcombe LJ (with whom Mustill and Fox LJJ agreed), in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 519; see also Tamsco Ltd v Franklins Ltd (2001) 10 BPR 19,077. By the Property Law Act 1958 (Vic) s 144, such a covenant is deemed to be subject to a proviso that consent shall not be unreasonably withheld and that no fine shall be payable for such consent: see also Conveyancing Act 1919 (NSW) s 133b; Property Law Act 1974 (Qld) s 121; Property Law Act 1969 (WA) s 80. The lease may exclude this proviso, except in the case of a lease relating to licensed premises. Section 144 has no application where the lease contains an absolute prohibition: Re Giles and McConachy’s Lease [1953] VLR 273. The Victorian and Western Australian provisions are subject to any express provision to the contrary in the lease whereas the New South Wales, Queensland and English (Landlord and Tenant Act 1927 s 19(1)(a)) provisions provide for the implication notwithstanding any express provision to the contrary in the lease. Section 144(1) of the Property Law Act 1958 (Vic) fetters the right of a landlord to refuse or withhold consent ‘unless the lease contains an express provision to the contrary’. In Australian Mutual Provident Society v 400 St Kilda Road Pty Ltd [1991] 2 VR 417 (FC) O’Bryan and McDonald JJ said (at 425): … s 144 enables parties to contract, if they wish, so as to require a tenant to obtain consent to an assignment, underletting or parting with

possession of the premises. A tenant’s covenant prohibiting assignment etc, if not qualified by the words ‘such consent not being arbitrarily or unreasonably withheld’ or, if the operation of s 144 is not expressly excluded, would be absolute. A lessor, in these circumstances would be given an unfettered discretion to refuse or withhold consent. The court refused to imply any term that the landlord’s consent would not be unreasonably withheld on the basis that this would contradict the provision excluding s 144, contrary to the rules for the implication of terms stated in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282–4: see at [1991] 2 VR 425; and see [6.3]. [Many leases contain covenants against assignment that commence with a prohibition against assignment but then permit assignments if specified preconditions are met and if the landlord’s consent is obtained: see [15.13]. Where statutory provisions such as 133B of the Conveyancing Act 1919 (NSW) apply the pre-conditions cease to be pre-conditions and become matters that the landlord is entitled to take into account in deciding whether to give or withhold consent to assignment: see Tamsco Ltd v Franklins Ltd (2001) 10 BPR 19,077 and J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd [1992] 2 Qd R 121. [page 474]

Consent to assignment [15.7] The lease may properly contain a covenant whereby the lessee is prevented from assigning the term unless he or she has first offered to surrender it without consideration. If the lessee purports to assign without first making such an offer, he or she shall be deemed to have made that offer and the lessor may then accept it without a stipulated period after he or she first became aware of the assigning or parting with possession: Creer v P & O Lines of Australia Pty Ltd (1971) 125 CLR 84, adopted by the Court of Appeal in Bocardo SA v S & M Hotels Ltd [1980] 1 WLR 17. Therefore, the lease can contain an absolute prohibition against the tenant signing or subletting the term, but, if it contains a right of assignment or subletting subject to the

consent of the landlord, then that consent cannot be unreasonably withheld. As to the curtailment of the section by the operation of the lease, see [15.10]. See, generally, G Kodilinye, ‘Refusal of Consent to Assign: The Unreasonable Landlord’ [1988] The Conveyancer 45.

Consent must be sought [15.8] The result of a proviso that consent shall not be unreasonably withheld, whether such proviso be express or implied as a result of the operation of these statutory provisions, is not the implication of a covenant on the part of the lessor not to refuse his or her consent unreasonably: Treloar v Bigge (1874) LR 9 Ex 151; Harvey v Walker (1945) 46 SR (NSW) 180; Berry (Frederick) Ltd v Royal Bank of Scotland [1949] 1 KB 619; Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406. The lessee must ask for consent before he or she assigns even though it could not properly be refused (Barrow v Isaacs & Son [1891] 1 QB 417; Eastern Telegraph Co v Dent [1899] 1 QB 835; McMahon v Docker (1945) 62 WN (NSW) 155; Tamsco Ltd v Franklins Ltd (2001) BPR 19,077 at [37]) and if necessary provide the lessor with adequate information to enable the lessor to make a proper decision: Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406. See Air Force Assoc (Vic Division) v White Manufacturing Co (Aust) Pty Ltd [1951] VLR 85 at 91 (per Smith J): Under such a covenant, the lessee is guilty of a breach if he assigns without asking for consent or if he assigns after asking for consent and having it reasonably refused or withheld but he is not guilty of any breach if he assigns after asking for consent and having it unreasonably refused or withheld … On this point Moat v Martin [1950] 1 KB 175; [1949] 2 All ER 646 should also be noted; see the discussion of this case by Smith J in Air Force Assoc (Vic Division) v White Manufacturing Co (Aust) Pty Ltd at 92; see also Ideal Film Renting Co Ltd v Nielsen [1921] 1 Ch 575; Cominos v Rekes [1979] 2 BPR 9619; Yared v Spier [1979] 2 NSWLR 291; and Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWR 450. In the latter case Hutley JA (at 493) noted that consent must be sought in respect of each proposed transaction:

[page 475] The failure to give consent allows the lessee to go ahead with the transaction in respect of which the application for consent resulted in a refusal or failure, but no more. It does not obliterate the covenant. For example, if a lessee becomes, by force of the covenant, entitled to grant a sublease to which the lessor had not consented, and the sublease expires, the lessee cannot grant another sublease without asking for the lessor’s consent. A covenant not to assign or sublet ‘any part of the premises’ without consent includes the whole or any part of the premises: Field v Barkworth [1986] 1 WLR 137. The landlord is entitled to be told the terms of the proposed sublease: Fuller’s Theatre & Vaudeville Co v Rofe [1923] AC 435, and to have a reasonable time to consider the matter: Wilson v Fynn [1948] 2 All ER 40; Richardson v Somas [1967] WAR 109.

Remedy where consent refused [15.9] If consent has been unreasonably refused the lessee or, in some circumstances, the proposed assignee may bring an action for a declaration that he or she is entitled to assign without consent: Young v Ashley Gardens Properties Ltd [1903] 2 Ch 112; West v Gwynne [1911] 2 Ch 1; Ideal Film Renting Co Ltd v Nielsen [1921] 1 Ch 575; Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385; in Tamsco Ltd v Franklins Ltd (2001) 10 BPR 19,077 at [34] Young CJ in Equity held that a proposed assignee could ‘approach the court in appropriate cases’; see also Rember Pty Ltd v Western Glade Pty Ltd (30 July 1997) WA Sup Ct, BC9703305, which concerned the standing of a proposed sublessee. A course more speedy and less expensive is the issue of a landlord and tenant summons under the Property Law Act 1958 (Vic) s 137 (or its equivalents) for a declaration that the lessor has unreasonably withheld his or her consent. This was the course adopted in Major v Joseph [1949] ALR (CN) No 9 1056; Re Giles and McConachy’s Lease [1953] VLR 273; and Hamilton v Porta [1958] VR 247. The lessee also has a ‘self help’ remedy in that if consent is unreasonably withheld the lessee may effectually

assign without consent: Ideal Film Renting Co Ltd v Nielsen; Cominos v Rekes [1979] 2 BPR 9619; Yared v Spier [1979] 2 NSWLR 291; Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480; and see [15.8]. The lessee, of course, risks being wrong in his or her interpretation in which case the lessor may gain the right to determine the lease by forfeiture: see [15.6]. The lessee will also have an action for damages for wrongful refusal of consent if it is established that there was a covenant or promise in the lease on the part of the lessor not to withhold consent in the particular circumstances: see Yared v Spier at 294, and the authorities reviewed in the following pages. It appears that such a covenant may, in rare cases, be implied but only in circumstances where the intention of the parties would not be given effect to ‘by adopting a literal and natural construction’: Treloar v Bigge (1874) LR 9 Exch 151 at 156–7 (per Amphlett B). If this remedy is available to the lessee, it is an additional remedy in that the lessee may, if consent is withheld in breach of a covenant on the part of the lessor, both assign the lease without consent and sue for damages for breach of the covenant (per Amphlett B at 156–7). Generally, clear words will be required [page 476] to establish a covenant or promise on the part of the lessor, such as in the provision considered in Sheppard v Hong Kong and Shanghai Banking Corporation (1872) 20 WR 459, where the lease contained a covenant against assigning without the consent in writing of the lessors ‘who thereby agreed not to withhold such consent without some reasonable objection to the proposed sub-tenant, lessee, or assignee’. In the absence of clear words the courts will construe a provision requiring the lessor’s consent as merely amounting to a qualification of the covenant in which it is found: see Scarcella v Linknarf Management Pty Ltd (in liq) (2005) NSW ConvR 56-106 at [11] to [17]; and Yared v Spier, and the authorities reviewed (at 294–7). It was held in that case that the lessee’s covenant No 16 in Pt 11 of Sch IV of the Conveyancing Act 1919 (NSW) did not contain any covenant or promise by the lessor in relation to consent. Similarly in Cominos v Rekes it was held that the proviso to the covenant against assigning or subletting to be implied by the Conveyancing

Act 1919 (NSW) s 133b — namely that ‘consent is not to be unreasonably withheld’ — imposed no liability on the lessor for withholding consent. The same reasoning would apply to the Property Law Act 1958 (Vic) s 144 which applies a proviso in the same terms. Where the consent of a third party is required, such as a mortgagee, the parties have an obligation under the agreement to do all that is reasonably within their power to ensure that the condition of the agreement is fulfilled: Misiaris v AFC Holdings Pty Ltd (1988) 15 NSWLR 231. As to the meaning of a lessor ‘withholding consent’, see Provident Capital Ltd v Zone Developments Pty Ltd (2002) 10 BPR 19,133 at [39]–[41].

Curtailment of statutory implied covenant by lease [15.10] The parties cannot curtail the operation of the statutory provisions by postulating in the lease that certain things shall not be deemed unreasonable: Re Smith’s Lease; Smith v Richards [1951] 1 All ER 346; Creer v P & O Lines of Australia Pty Ltd (1971) 125 CLR 84 at 87; 45 ALJR 697 at 698; Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406; but a proviso that, before assigning, the lessee shall offer to surrender the lease is not caught by this principle: Adler v Upper Grosvenor Street Investment Ltd [1957] 1 WLR 227. This case was followed by the High Court in Creer v P & O Lines of Australia Pty Ltd (1971) 125 CLR 84 and by Bocardo SA v S & M Hotels Ltd [1980] 1 WLR 17. See also H W Tebbutt, ‘The Conveyancer’ (1980) 54 ALJ 368. Thus, the courts have sanctioned the device by which the lease prohibits the assignment by compelling the lessee to offer to surrender the lease to the landlord, but then if the landlord does not accept the surrender, the lessee may assign or sublet subject to the approval of the landlord, which approval cannot be unreasonably withheld. On the other hand, in Plymouth Corporation v Harvey [1971] 1 WLR 549 it was laid down that a forfeiture in the guise of a surrender remains a forfeiture for the purpose of the Property Law Act 1958 (Vic) s 146; and Adler’s [page 477]

case was doubted in Greene v Church Commissioners [1974] Ch 467. Adler’s case was approved by the High Court, however, in Creer v P & O Lines of Australia Pty Ltd, although Menzies J (at CLR 90) expressed a doubt concerning its correctness. Where, however, a lease contains an express provision absolutely prohibiting an assignment, s 144 does not apply to such a lease: Re Giles and McConachy’s Lease [1953] VLR 273; compare Woolworth & Co v Rambert [1937] Ch 39 at 58; [1936] 1 All ER 333.

Onus on tenant [15.11] The onus is on the lessee to prove that the refusal is unreasonable: Stanley v Ward (1913) 29 TLR 714; Mills v Cannon Brewery Co Ltd [1920] 2 Ch 38 at 46; Pimms Ltd v Tallow Chandlers Company [1964] 2 QB 547 (CA) at 564; Secured Income Real Estate (Australia) Limited v St Martins Investments Pty Ltd (1979) 144 CLR 596, because it is for the lessee to establish the lessor’s breach of contract (at 609); International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 520; and see Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406; J A McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 Qd R 121 (FC); and Arball Pty Ltd v Chow (1992) V ConvR 54-429 at 65,063. The lessor is not bound to give reasons for refusing: Young v Ashley Gardens Properties Ltd [1903] 2 Ch 112, but if he or she gives no reason the court will more readily imply that the refusal is unreasonable: Berry (Frederick) Ltd v Royal Bank of Scotland [1949] 1 KB 619; applied in the Secured Income Real Estate case at 609; and see Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd at 411. Whether consent has been unreasonably withheld is a question of fact which depends on all the circumstances: International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 521; applied in JA McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd at 129.

Reason for refusal connected with assignee [15.12] Whether a lessor’s reason for refusing his or her consent must, as a matter of law, be connected with the assignee or the use and occupation of the premises has been a much discussed question: McKenzie v McAllum [1956] VLR 208; Colvin v Bowen (1958) 75 WN (NSW) 262; Vienit Ltd v W Williams

& Son (Bread Street) Ltd [1958] 1 WLR 1267; Bickel v Duke of Westminster [1977] QB 517 at 534; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; Ashworth Frazer v Gloucester City Council [2001] 1 WLR 2180. The decision of Nettle J in Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 contains a useful summary of the leading Australian and English cases. The applicant shows a prima facie case of unreasonableness when he or she gives evidence of a refusal to accept an assignee against whose character or stability nothing is alleged and who proposes to carry on the same business as has been sanctioned by the respondent in the past: Poulter v Bigham [1955] VLR 326. [page 478]

Grounds for refusal [15.13] The lessor is entitled to a reasonable time to consider the application for consent: Richardson v Somas [1967] WAR 109. If the lessor gives no reason it will be more readily implied that his or her refusal is unreasonable: Berry (Frederick) Ltd v Royal Bank of Scotland [1949] 1 KB 619. The legal principles relating to reasonable refusal to consent to an assignment are examined in an editor’s note at (1964) 28 Conveyancer 357. Refusal on the grounds that the lessor him or herself desires possession has been held to be unreasonable: Re Smith’s Lease; Smith v Richards [1951] 1 All ER 346. To determine whether a landlord’s refusal to consent to an assignment of a tenancy of premises is reasonable or not, a court may not only consider whether the landlord has refused his or her consent because he or she requires possession for him or herself, but may consider the effect of the landlord and tenant legislation and review all consequences of the proposed assignment and the refusal of consent. It seems that the lessor is entitled to rely on a ground for refusal not taken at or about the time of refusal: Secured Income Real Estate (Australia) Limited v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 611 (per Mason J); JA McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 Qd R 121 (FC) at 129; and see Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 at 1034; but this may go to the lessor’s credibility and the authorities show that the court will look to the real reason

for refusal. Where the evidence showed that the lessor had not questioned the respectability or responsibility of the sublessees prior to the proceedings, a refusal based on the ground that no evidence of respectability or responsibility had been put before the lessor before, at or subsequent to the request was held unreasonable; in the same case, multiplicity of tenants and undue profit from subletting were considered as grounds for refusal: Offset Printing Co Pty Ltd v Peters (1955) 73 WN (NSW) 178. As to refusal on the ground that, the premises being prescribed premises, the assignee would be able to show greater hardship than the present tenant, so that the lessor would be in a worse position if he or she sought to recover possession, see Poulter v Bigham; McKenzie v McAllum; Bookman (Thomas) Ltd v Nathan [1955] 1 WLR 815; Colvin v Bowen (1958) 75 WN (NSW) 262, applied in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd. Where a proposed assignment of a tenancy, subject to the landlord and tenant legislation, is for the purpose and has the effect of conferring a substantial benefit on a third party by reason of the operation of the Act, but results in little or no benefit to the tenant, and works an injustice on the landlord, it is not unreasonable for the landlord to refuse his or her consent: Bambury v Chapman (1960) 77 WN (NSW) 191. Refusal of consent is unreasonable if the lessor’s main aim is to obtain some advantage for him or herself; for example, to obtain a surrender of the lease: Bates v Donaldson [1896] 2 QB 241; [1895–9] All ER Rep 170; Re Winfrey & Chatterton’s [page 479] Agreement [1921] 2 Ch 7; Colvin v Bowen, or to prevent the assignee from giving up other premises which he or she holds of the lessor: Houlder Brothers & Co Ltd v Gibbs [1925] Ch 575, or to deprive the lessee of some advantage that would otherwise accrue to it: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd, or for the purposes of good estate management which involved destroying the lease and merging it with another lease in the same building: Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 at 1033. Where there is no express covenant or undertaking by the tenant to

offer a surrender of the lease, but the landlord insists on such an offer as a condition of giving his or her consent to an assignment, that would be an unreasonable withholding of the consent: Adler v Upper Grosvenor Street Investment Ltd [1957] 1 WLR 227. Refusal on the ground that the assignee was of Chinese nationality (Wing v Kensit (1921) 21 SR (NSW) 464) or was a foreign company (Atkins (Charles) & Co Ltd v Backhouse [1928] SASR 179) has been regarded as unreasonable. The fact that the lessor has promised the premises to a friend is not a good reason: Brightwell v Foley (1946) 63 WN (NSW) 204. As to a proposed subletting at a low rent and in consideration of a substantial premium, see Re Town Investments Ltd Underlease [1954] 1 Ch 301; 1 All ER 585. A refusal of consent may be reasonable where the references are not satisfactory: Stanley v Ward (1913) 29 TLR 714. It was unreasonable for a landlord to refuse to consent to the tenant subletting part of the leased premises for the ulterior purpose of pressuring the proposed subtenant to lease the upstairs part of the premises: Eddadock Pty Ltd v Denning Properties Pty Ltd [2002] NSWSC 208 (BC200201078). A refusal to consent so as to extract a higher rent from assignees was not justifiable: J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd. It is a question of fact whether a refusal to consent to an assignment to a tenant who intends to use the premises for a purpose not allowed by the user covenant is justified: Ashworth Fraser Ltd v Gloucester City Council [2001] 1 WLR 2180: see also Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480; Eddock Pty Ltd v Denning Properties Pty Ltd. In Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd, the provision under consideration was that approval was not to be ‘capriciously or arbitrarily withheld’. It seems that these words add little to the more conventional formula and that departure from it is more likely to lead to uncertainty than to assist the position of either party. Mason J, delivering the judgment of the court, said (at 609): The meaning of the word ‘arbitrarily’ in the context of refusal of consent to an assignment of a lease has been much discussed. In Barrow v Isaacs & Son [[1891] 1 QB 417 at 419], Lord Esher MR thought that it meant ‘wholly unreasonably’. In Mills v Cannon Brewery Co Ltd [[1920] 2 Ch 38 at 45], P O Lawrence J considered the authorities, including Barrow v Isaacs & Son, in which the meaning of the word had been considered, and concluded that the various synonyms assigned to

it, ‘unreasonably’, ‘wholly unreasonably’ and ‘without reasonable cause’, practically meant the same thing. I am inclined to agree, though I should prefer to say that ‘arbitrarily’ connotes ‘unreasonably’ in the sense that what was done was done ‘without reasonable cause’. [page 480] In these circumstances I doubt whether ‘capriciously’ adds anything, except perhaps to direct attention to the motivation of the respondent. Mason J then turned to consider the principles to be applied in particular cases to determine whether the withholding of consent was reasonable. These principles give some thread to the cases which otherwise appear to be a series of single instances. His Honour said (at 609–10): In Colvin v Bowen [(1958) 75 WN (NSW) 262 at 264], Walsh J, speaking with reference to a provision that consent to an assignment of a tenancy should not be unreasonably withheld, after referring to the decisions culminating in Houlder Bros & Co Ltd v Gibbs [[1925] Ch 575], said: According to the view thus preferred the grounds upon which a refusal may be based must be concerned either with the character and personality of the proposed assignee, or with matters affecting the use or occupation of the premises which may result from the proposed assignment. The somewhat less narrow view, to which reference is made is Sargant LJ in Houlder’s Case [at 587], requires that the reason for refusal must be something affecting the subject matter of the contract which forms the relationship between the landlord and the tenant, and not something extraneous and dissociated from the subject matter of the contract. It appears to me to be clear from the judgements in the cases mentioned that the principles contained in those cases would exclude from consideration, as a ground for refusal of consent, the circumstances that the lessor desires to resume possession of

the property in order to occupy it. Despite the critical remarks and the expressions of doubt to which those principles were subjected in Tredegar v Harwood [[1929] AC 72], the authority of Houlder’s Case has been affirmed subsequently, and it must be regarded by me as binding in cases to which the principles it contains are applicable. The decision in West Layton Ltd v Ford [1979] QB 593 assists in the application of these principles. In Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 the Court of Appeal applied the dictum of Sargant LJ in Houlder’s case and the West Layton case. Referring to the latter case Dunn LJ said (at 1033): West Layton Ltd v Ford [above] shows that in considering whether the landlord’s refusal of consent is unreasonable, the court should look first at the covenant in the context of the lease and ascertain the purpose of the covenant in that context. If the refusal of the landlord was designed to achieve that purpose then it may not be unreasonable, even in the case of a respectable and responsible assignee; but if the refusal is designed to achieve some collateral purpose wholly unconnected with the terms of the lease, as in Houlder Bros & Co Ltd v Gibbs [above], as in this case, then that would be unreasonable, even though the purpose was in accordance with good estate management. In Bickel v Duke of Westminster [1977] QB 517 Lord Denning MR said (at 524): Two propositions have been canvassed in this case as if they were propositions of law. The first proposition is that, in order to be reasonable, the landlord’s refusal must be based on (i) either the personality of the assignee or (ii) the user or occupation of the premises. If his reasons have nothing to do with either, then his refusal is unreasonable. Such is [page 481] said to be the ground of the decision in In re Gibbs and Houlder Brothers

and Co. Ltd’s Lease [1925] Ch. 198, 575, which was doubted in the House of Lords in Viscount Tredegar v Harwood [1929] A.C. 72, 82: but is said to be still binding in this court. If such be the law, then it follows that Grosvenor Estate cannot reasonably refuse consent to the assignment by the Foresters to the lady. The personality of the assignee cannot be impeached on any score, and her user and occupation of the premises cannot be criticised in any respect … If those cases can properly be regarded as laying down propositions of law, I would agree that we ought to hold the landlords’ refusal to be unreasonable. But I do not think they do lay down any propositions of law, and for this reason. The words of the contract are perfectly clear English words: ‘such licence shall not be unreasonably withheld’. When those words come to be applied in any particular case, I do not think that the court can, or should, determine by strict rules the grounds on which a landlord may, or may not, reasonably refuse his consent. He is not limited by the contract to any particular grounds. Nor should the courts limit him. Not even under the guise of construing the words. The landlord has to exercise his judgment in all sorts of circumstances. It is impossible for him, or for the courts, to envisage them all … Seeing that the circumstances are infinitely various, it is impossible to formulate strict rules as to how a landlord should exercise his power of refusal. The utmost that the courts can do is to give guidance to those who have to consider the problem. As one decision follows another, people will get to know the likely result in any given set of circumstances. But no one decision will be a binding precedent as a strict rule of law. The reasons given by the judges are to be treated as propositions of good sense — in relation to the particular case — rather than propositions of law applicable to all cases … The dictum of Lord Denning MR in Bickel v Duke of Westminster was applied by the House of Lords in Ashworth Frazer v Gloucester City Council [2001] 1 WLR 2180. The decision of Nettle J in Cathedral Place Pty Ltd v Hyatt of Australia Ltd [2003] VSC 385 contains a useful summary of the leading Australian and English cases and a consideration of whether Australian courts and the English courts have a different approach concerning the matters that a landlord can

take into account in deciding whether to give or withhold consent to a request to assign the term of a lease. In International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 (CA) the authorities were reviewed and helpfully summarised in the following seven propositions of law (at 519–21 per Balcombe LJ, with whom Mustill and Fox LJJ agreed): (1) The purpose of a covenant against assignment without the consent of the landlord, such consent not to be unreasonably withheld, is to protect the lessor from having his premises used or occupied in an undesirable way, or by an undesirable tenant or assignee: see per A L Smith LJ in Bates v Donaldson [1896] 2 QB 241 at 247; approved by all the members of the Court of Appeal in Re Gibbs & Houlder Bros & Co Ltd’s Lease [1925] Ch 575. (2) As a corollary to the first proposition, a landlord is not entitled to refuse his consent to an assignment on grounds which have nothing whatever to do with the relationship of landlord and tenant in regard to the subject matter of the lease: see [page 482] Re Gibbs & Houlder Bros & Co Ltd’s Lease, a decision which (despite some criticism) is binding on this court: see Bickel v Duke of Westminster [1977] QB 517. A recent example of a case where the landlord’s consent was unreasonably withheld because the refusal was designed to achieve a collateral purpose unconnected with the terms of the lease is Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019. (3) The onus of proving that consent has been unreasonably withheld is on the tenant: see Stanley v Ward (1913) 29 TLR 714 and Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 QB 547 at 564. (4) It is not necessary for the landlord to prove that the conclusions

which led him to consent were justified, if they were conclusions which might be reached by a reasonable man in the circumstances: see Pimms Ltd v Tallow Chandlers in the City of London [1964] 2 QB 547 at 564. (5) It may be reasonable for the landlord to refuse his consent to an assignment on the ground of the purpose for which the proposed assignee intends to use the premises, even though that purpose is not forbidden by the lease: see Bates v Donaldson [1896] 2 QB 241 at 244. (6) There is a divergence of authority on the question, in considering whether the landlord’s refusal of consent is reasonable, whether it is permissible to have regard to the consequences to the tenant if consent to the proposed assignment is withheld. In an early case at first instance, Sheppard v Hong Kong and Shanghai Banking Corp (1872) 20 WR 459 at 460, Malins V-C said that by withholding their consent the lessors threw a very heavy burden on the lessees, and they therefore ought to show good grounds for refusing it. In Re Gibbs & Houlder Bros & Co Ltd’s Lease [1925] Ch 575 at 584 Warrington LJ said: An act must be regarded as reasonable or unreasonable in reference to the circumstances under which it is committed, and when the question arises on the construction of a contract, the outstanding circumstances to be considered are the nature of the contract to be construed and the relations between the parties resulting from it.

In a recent decision of this court, Leeward Securities Ltd v Lilyheath Properties Ltd (1984) 271 EG 279, a case concerning a subletting which would attract the protection of the Rent Act, both Oliver and O’Connor LJJ made it clear in their judgments that they could envisage circumstances in which it might be unreasonable to refuse consent to an underletting, if the result would be that there was no way in which the tenant (the sublandlord) could reasonably exploit the premises except by creating a tenancy to which the Rent Act protection would apply, and which inevitably would affect the value of the landlord’s reversion. O’Connor LJ said (at 283): It must not be thought that, because the introduction of a Rent Act tenant

inevitably has an adverse effect upon the value of the reversion, that that is a sufficient ground for the landlords to say that they can withhold consent and that the court will hold that that is reasonable.

[page 483] To the opposite effect are the dicta, obiter but nevertheless weighty, of Viscount Dunedin and Lord Phillimore in Viscount Tredegar v Harwood [1929] AC 72 at 78, 82. There are numerous other dicta to the effect that a landlord need consider only his own interests: see, for example, West Layton Ltd v Ford [1979] QB 593 at 605; and Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019 at 1027. Those dicta must be qualified, since a landlord’s interests, collateral to the purposes of the lease, are in any event ineligible for consideration: see para (2) above. But in my judgment a proper reconciliation of those two streams of authority can be achieved by saying that while a landlord need usually only consider his own relevant interests, there may be cases where there is such a disproportion between the benefit to the landlord and the detriment to the tenant if the landlord withholds his consent to an assignment, that it is unreasonable for the landlord to refuse consent. (7) Subject to the propositions set out above, it is, in each case, a question of fact, depending on all the circumstances, whether the landlord’s consent to an assignment is being unreasonably withheld: see Bickel v Duke of Westminster [1977] QB 517 at 524; and West Layton Ltd v Ford [1979] QB 593 at 604, 606. These seven propositions have been referred to with approval in many cases including Tamsco Ltd v Franklins Ltd (2001) 10 BPR 19,077 at 19,083 per Young CJ in Equity, and Ashworth Frazer v Gloucester City Council [2001] 1 WLR 2180 at 2201 per Lord Roger of Earlsferry; and see Boss v Hamilton Island Enterprises Ltd [2008] QSC 274; affirmed on appeal, [2010] 2 Qd R 115. In Tamsco Ltd v Franklins Ltd Young CJ in Equity considered the second of Balcombe LJ’s propositions in International Drilling Fluids Ltd v Louisville

Investments (Uxbridge) Ltd concerning the consequences of a landlord withholding consent to an assignment for a collateral purpose and said (at 19,084). [53] (1) There is … no independent rule that a collateral purpose necessarily makes the refusal of the consent unreasonable. Indeed, Balcombe LJ puts it merely as an illustration of his rule 2. (2) A collateral purpose connected with the terms of the lease is, in any event, not necessarily bad, … (3) Just as it would be wrong of a lease to trespass on the general concept of unreasonableness in s 133B of the Conveyancing Act, so would also the adoption of any other special factor, such as debilitating collateral purpose. [54] Accordingly, although the court has to work out what was the real and true reason for the refusal of consent, the mere fact that the landlord has in mind some collateral purpose or some back-up scheme, which is outside what is contemplated by the tenant of the assignment, does not necessarily mean that the refusal of consent will be unreasonable. [55] If the consent is based on the area of concern that is legitimate for the landlord to take into account, the mere fact that that may involve a motive or a collateral purpose [page 484] will not be enough for the tenant to succeed in showing that the landlord’s refusal was unreasonable. In Tasmsco Ltd v Franklins Ltd the lease precluded the lessee from assigning the lease without the consent of the landlord but under cl 17.2 the landlord would not refuse or delay its consent if the: … proposed assignee is a respectable and financially responsible person being an experienced retail trader with management and size

comparable to that of Franklins in conducting a business of the kind similar to the Permitted Use, the onus of proving same to the satisfaction of the Landlord (acting reasonably) being upon Franklins … The lessor refused to consent to a transfer of a lease from a Franklins supermarket store to a company which the lessor alleged was only a vehicle to allow less experienced retailers to trade. One proposed assignee was a public company said to be one of Australia’s top 150 companies which had, by its subsidiaries, operated supermarkets, though its subsidiaries principally traded as wholesale grocers. The other proposed assignee was a wholly-owned subsidiary of the public company which operated principally as a greengrocer. The lessor contended that: the proposed assignee had not shown that it was a respectable and responsible person and an experienced retail trader with management and size comparable to Franklins; the proposed assignee did not have a proven history of running an independent retail business; other tenants opposed an unknown operator acquiring the lease; the store was supposed to be occupied by an anchor tenant and the name ‘IGA Riverwood’ was nowhere near as big a name as Woolworths or Coles; the plaintiffs were distributors and not retailers, and would only be a vehicle to permit inexperienced retailers to trade; and the landlord had had a previous and unfavourable experience with one of the proposed assignees. The evidence made it clear that the landlord was anxious to have two anchor tenants in his shopping centre and had support from specialty shop traders. Originally there had been two anchor tenants, Franklins and Woolworths. It came out in evidence that on the material before the lessor the lessor took the view that Coles was the only possible competitor for Woolworths and that any other person, unless the contrary could be demonstrated, would not be a second anchor tenant but only a weak second link. Young J held that the assignee or sublessee had not met the guidelines, referred to in cl 7.2 but even when they were put aside the lessor’s approach was not unreasonable. His Honour said (at 19,085): Even if there were a collateral purpose involved, having accepted Mr Saric’s evidence [i.e. the lessor’s evidence], the collateral purpose was for the good of the shopping centre and tenants …

… there is sufficient evidence … to show that it is a very real concern for the operation of the shopping centres that they be properly balanced, and that there be anchor tenants which will attract business to the centre and that there will be available specialty shops and one has to be very careful about the way in which assignments are considered. [page 485] In the light of all that material, it would seem to me that the landlord’s approach was reasonable or, at least, the tenant has not demonstrated that it was unreasonable. His Honour held that the lessor’s ‘collateral purpose’, being his concern for the operation of the shopping centre, was connected with the terms of the lease and therefore not unreasonable. In J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd (1992) 2 Qd R 121 the Full Court of the Supreme Court of Queensland held that a landlord was entitled to consider the effect the transaction might have upon its ability in the future to let satisfactorily the different parts of its property and it was sufficient if a reasonably man in the lessor’s position might have regarded the proposed transaction as damaging to his property interests even though some persons might take a different view. Kelly SPJ (with whom Ryan J agreed) held at 132 that a refusal to consent should not be designed to achieve ‘some collateral purpose wholly inconsistent with the terms of the lease’. The seventh proposition should be borne in mind, namely that it is a question of fact, in each case, depending on all the circumstances, whether it is reasonable for the lessor to withhold consent; and see Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406; J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd per Kelly SPJ at 120; see also Ashworth v Gloucester City Council where Lord Roger of Earlsferry said (at 2201) that because the ‘circumstances are infinitely various it is impossible to formulate strict rules as to how a landlord should exercise his power of refusal’. In the same case Lord Bingham of Cornhill said (at 2183) that care must be taken

‘not to elevate a decision made on the facts of a particular case into a principle of law’. Note the comment in Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd (at 412) that ‘it is difficult to see how a landlord could be held to have unreasonably refused his consent until such time as he has sufficient details upon which to make a proper decision’: and see [15.8]. Many leases contain covenants against assignment that commence with the prohibition against assignment but then permit assignments if specified preconditions are met and if the landlord’s consent is obtained. In most cases the question of the reasonableness or otherwise of the landlord’s withholding of consent to the assignment does not arise until the pre-conditions have been met: JDM Investments Pty Ltd v Todbern [2000] NSWSC 349. The lessee must prove that the pre-conditions have been met before the lessor is required to consider the giving or withholding of consent. But where the statutory provisions referred to in [15.6] apply, the position is different: the preconditions cease to be pre-conditions and become matters that the landlord is entitled to take into account in deciding whether to give or withhold consent to assignment; see Tamsco Ltd v Franklins and J A McBeath Nominees Pty Ltd v Jenkins Corporation Pty Ltd. [page 486]

Court will not interfere with reasonable protection of property [15.14] The court will not interfere if a reasonable person in the lessor’s position might have regarded the proposed transaction as damaging to his or her own property interests, even though some persons might take a different view: Re Town Investments Ltd Underlease [1954] 1 Ch 301 at 314; 1 All ER 585; Pimms Ltd v Tallow Chandlers Company [1964] 2 QB 547 (CA) at 570; J A McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd [1992] 2 Qd R 121 (FC) at 130. Consequently, the lessor is entitled to consider the effect which the assignment may have on other premises owned by him or her (Premier Confectionery (London) Co Ltd v London Commercial Sale Rooms Ltd [1933] Ch 904); including the effect the use to which the proposed assignee or

sublessee would put the property would have on the commercial well-being of the lessor’s other properties; particularly other leased properties in the same shopping mall: see Coopers & Lybrand Ltd v William Schwartz Construction Co Ltd (1980) 116 DLR (3d) 450 (SC, Alberta) where the authorities (English and Canadian) are reviewed. Probable loss of goodwill is also a good reason why consent may be refused: Batstone v Nicholls [1939] VLR 325; Stack v Cameron [1941] St R Qd 284. A landlord is entitled to consider the effect the proposed assignment may have on their ability to let satisfactorily in the future different parts of their own property, particularly in the case of default on the part of the tenant in performing its obligations: Pimms Ltd v Tallow Chandlers Company at 570; J A McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd at 130. Batstone v Nicholls was a case involving a lease with an express provision giving the lessor the absolute right to refuse consent to an assignment. Stack v Cameron applied Batstone v Nicholls in circumstances where there was a qualified right in the lessor to refuse consent to an assignment and distinguished between the value of the goodwill of the business (in which the landlord is unlikely to have any interest) and the rental value of the premises which may be damaged by the same factors as may adversely affect goodwill (directly) and also by the decline in the value of goodwill attaching to the business itself. As to the meaning of ‘goodwill’, see Federal Commissioner of Taxation v Williamson (1943) 67 CLR 561 at 564 (per Rich J, who analysed customer types in terms of cats, dogs, rats and rabbits) and Hoogerdyk v Condon (1990) 2 NSWLR 171. Similarly, a refusal based on the ground that the assignment may result in a diminution in the value of the reversion will generally not amount to an unreasonable refusal to consent to a proposal assignment: Norfolk Capital Group Ltd v Kitway [1977] QB 506; Bickel v Duke of Westminster [1977] QB 517. The dictum of Lord Denning MR (at 524) in the latter case was applied by the Court of Appeal in West Layton Ltd v Ford [1979] QB 593, a case where the proposed subtenancy would have significantly altered the use of the premises and attracted Rent Act protection; and see Bromley Park Garden Estates Ltd v Moss [1982] 1 WLR 1019. While the lessor usually need only consider his or her own interests, such as maintaining the value of the reversion, there may be [page 487]

cases where there is such a disproportion between the benefit to the lessor and the detriment to the lessee if the lessor withholds consent as to make it unreasonable to do so: see International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513 at 520–1. It has been said that a lessor may reasonably refuse consent to an assignment if the assignment would necessarily involve a breach of another covenant including, in some circumstances, a covenant in relation to use: Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWR 480 (CA), where it was held that there was no requirement of reasonableness to be implied in a covenant not to alter the use of the premises without the lessor’s consent, hence the lessor was entitled to withhold consent to a change of use, even unreasonably; followed in Re Archos [1994] 1 Qd R 223; compare Killick v Second Covent Garden Property Co Ltd [1973] 1 WLR 658 at 661–2 which in Coopers & Lybrand Ltd v William Schwartz Construction Co Ltd (at 459) was said to have been wrongly decided and which was overruled in Ashworth Fraser Ltd v Gloucester City Council [2001] 1 WLR 2180. In the latter case the House of Lords applied the dictum of Lord Denning MR in Bickel v Duke of Westminster (at 524) and allowed an appeal from a decision of the Court of Appeal, which had held itself to be precluded by Killick v Second Covent Garden Property Co Ltd from holding that the belief of the landlord (however reasonable), that the proposed assignee intended to use the demised premises for purpose, which would give rise to a breach of the user covenant, was of itself ground for withholding consent to the assignment. It may not be unreasonable for a lessor to refuse consent on the ground of the intended use of the premises even though the use is not forbidden by the lease: Bates v Donaldson [1896] 2 QB 241. A refusal may also be reasonable where the relevant references are not satisfactory (Stanley v Ward (1913) 29 TLR 714) or where the lessor has reasonable doubts that the lessee could or would pay the rent promptly: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; and see J A McBeath Nominees Pty Ltd v Jenkins Development Corporation Pty Ltd.

Fine [15.15] The proviso implied by the Property Law Act 1958 (Vic) s 144 is that such consent shall not be unreasonably withheld and that no fine or sum of money in the nature of a fine shall be payable for or in respect of such

licence or consent; the proviso is not to preclude the right to require the payment of a reasonable sum in respect of any legal or other expense incurred in relation to such licence or consent. ‘Fine’ includes a premium or foregift and any payment considered or benefit in the nature of a fine, premium or foregift (Property Law Act 1958 (Vic) s 18(1)) — that is, it includes any valuable consideration given in such circumstances that, if it were money, it would be what is commonly known as a fine: Waite v Jennings [1906] 2 KB 11 at 18. The Property Law Act 1969 (WA) s 80 is in virtually identical form to the Victorian section. The Conveyancing Act 1919 (NSW) s 133B and the Property Law Act 1974 [page 488] (Qld) s 121 are in substance the same. The word ‘fine’ does not extend to a contract or covenant which only secures the performance of the covenants of the lease (Waite v Jennings), nor to a deposit of money as security for the performance of the lessee’s covenant to build: Re Cosh’s Contract [1897] 1 Ch 9. The demand for an increased rent as a condition of consenting to an assignment is a demand of a fine (Jenkins v Price [1907] 2 Ch 229), reversed on another point [1908] 1 Ch 10; Barina Properties Pty Ltd v Bernard Hastie (Australia) Pty Ltd [1979] 1 NSWLR 480. A stipulation that for the remainder of the term a public house, formerly free, shall be a tied house, is a fine or benefit in the nature of a fine: Gardner & Co v Cone [1928] Ch 955; [1928] All ER Rep 458. In Hughes v Waite [1957] 1 WLR 713, a lump sum described as ‘rent in advance’ was held to be a fine. This section does not make illegal the payment and acceptance of a fine, and if the lessee make such a payment, not under protest, he or she cannot recover it: Andrew v Bridgman [1908] 1 KB 596; Waite v Jennings [1906] 2 KB 11; West v Gwynne [1911] 2 Ch 1; Lord v Procter [1923] ALR 350. An agreement by the lessee to pay a fine is not enforceable, except, it seems, where the agreement is under seal: Comber v Fleet Electrics Ltd [1955] 1 WLR 566. For a discussion of the nature of fines and premiums in the context of commercial tenancies legislation, see Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110; and Burke v

Gillett (1994) V ConvR ¶54-507 (FC) at 65,816–21 (per Ormiston J) and 65,833–4 (per Smith J).

Breach of covenant against assignment or subletting [15.16] A covenant in a lease not to assign the demised premises has been held to be a covenant not to make a legal assignment of them and is not broken by an equitable assignment: Gentle v Faulkner [1900] 2 QB 267; Hill v Short (1910) SALR 141; Naumberg v Executors of Albertson (1889) 3 QLJ 125; Martin v Coultas (1911) SALR l; Macindoe v Wehrle (1913) 13 SR (NSW) 500; MacDonald v Robins (1954) 90 CLR 515 at 520; [1954] ALR 153; see also the discussion in Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [31] to [37]. In each case, however, it is necessary to construe the relevant covenant to determine whether an equitable assignment is prohibited: Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd at [41]. It is arguable that a covenant against assignment should be construed as relating to equitable assignments where the lease is of registered land and is not drawn as a registrable document, at all events where the lease is for a term exceeding three years: see MacDonald v Robins CLR at 520–1; this is consistent with Chan v Cresdon Pty Ltd (1989) 168 CLR 242, particularly where the lessee’s obligations are guaranteed. The effect of an assignment of the lessee’s interest by one co-owner of the term to another co-owner is considered in Varley v Coppard (1872) LR 7 CP 505; O’Mullane v Wilson (1856) 1 VLT 86; Cook v Rowe [1954] VLR 309; MacDonald v Robins. The entry into possession by mortgagees of a lease of land under [page 489] Torrens legislation has been held not to constitute a breach of a covenant not to assign or sublet: Seabrook v McMullan (1908) 10 WALR 47. A covenant not to share possession of any part of the leased premises was held to be breached as the property was used in part by people other than the tenants; the word

‘possession’ was given its broad, popular, meaning as the sharing of the use or occupation, as in a strict legal sense the sharing of possession is an unknown concept: Tulapam Properties Ltd v De Almeida [1981] 2 EGLR 55 (QB). What is necessary for a voluntary assignment at law as opposed to in equity is considered in [15.17] — the word ‘voluntary’ referring, not to absence of consideration, but to an act of the parties. A covenant against assignment is not broken by an involuntary assignment; that is to say, an assignment by operation of law: Bryen v Reus [1961] SR (NSW) 396. Accordingly, the lease may, for example, pass on the death of the lessee (Seers v Hind (1791) 1 Ves Jun 294; 30 ER 351) or on his or her bankruptcy: Re Riggs [1901] 2 KB 16, without there being a breach of the covenant not to assign. As to the consequences of a sublease, see Russell v Beecham [1924] 1 KB 525; [1923] All ER Rep 318. The measure of damages for breach of a covenant against assignment is dealt with in [13.16]. An assignment or subletting without consent (where such consent is required by the terms of the lease) is a once for all breach and is incapable of remedy: Scala House and District Property Co Ltd v Forbes [1974] QB 575; David Blackstone v Burnetts (West End) Ltd [1973] 1 WLR 1487 at 1496. But such an assignment or subletting is not void, although it may be avoided if the lessor chooses to re-enter under a proviso for re-entry: Paul v Nurse (1828) 108 ER 1123; Parker v Jones [1910] 2 KB 32 at 38; Morison v Hall [1923] VLR 93; Massart v Blight (1951) 82 CLR 423; [1951] ALR 401; Old Grovebury Manor Farm Ltd v W Seymour Plant Sales & Hire Ltd (No 2) [1979] 1 WLR 1397; Galaxy Motors Pty Ltd v Carroll [1964–5] NSWR 463; 82 WN (Pt 1) (NSW) 40 (discussed in (1964) 38 ALJ 252); Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264 at [91]; Molina v Leask [1998] ANZ ConvR 361 (confirmed on appeal, Leask v Molina [1999] NSWCA 14); Ladies Sanctuary Pty Ltd v Parramatta Property Investment Ltd (1997) 7 BPR 15,156. In Richardson v Somas [1967] WAR 109, the lease contained a covenant by the lessee not to assign without the prior written consent of the lessor, but such consent should not be withheld in the case of a proposed respectable and responsible person. Two days after the lessee sought the lessor’s consent (and before he received a reply from the lessor), the lessee parted with possession of the premises to his assignee. It was held that irrespective of whether the proposed assignee was a responsible and respectable person, it was necessary that the lessor’s consent

should be sought and the lessor was entitled to a reasonable time to consider the application for consent and in this case it had not been given to her. The lessee had therefore committed a breach of the above covenant. If there is an assignment of the term without the lessor’s consent and the landlord chooses to re-enter, the assignee of the [page 490] term may be the appropriate party to seek relief from forfeiture: Ladies Sanctuary Pty Ltd v Parramatta Property Investment Ltd. The lessee may be restrained by injunction from assigning in breach of a covenant: McEacharn v Colton [1902] AC 104. A breach of the covenant may be waived by the lessor’s knowledge or acquiescence in the breach, or by that of the lessor’s agents: see Metropolitan Properties Co Ltd v Cordery [1979] 2 EGLR 78 (CA). The effect of subletting a Crown lease without the consent of the Minister of Lands which was required by the Land Act 1962 (Qld) s 274(2)(a) (compare now Land Act 1994) was considered by the Queensland Full Court in Palmdale Insurance Ltd v Sprenger [1988] 1 Qd R 414. It was held, applying Tweed Motors (Qld) Pty Ltd v Moran Motors Pty Ltd (1965) 39 ALJR 279, that a sublease entered into without ministerial approval created a binding agreement to sublease pending approval, defeasible on refusal of approval. However, entry into possession and payment of rent would, at common law, create a tenancy on the same terms as the void lease except for the duration of the term. But for the Property Law Act 1974 (Qld) s 129(1), which abolished tenancies from year to year implied by payment of rent, a tenancy from year to year would have been implied. The effect of s 129(1) was to imply a tenancy at will determinable on one month’s written notice by either party, expiring at any time (only New South Wales and Western Australia have similar legislation: Conveyancing Act 1919 (NSW) s 127(1); Property Law Act 1969 (WA) s 71). See also Plastic Enterprises Pty Ltd v The Southern Cross Assurance Company Ltd [1968] Qd R 401; Wood v Browne [1984] 2 Qd R 593.

Form of assignment [15.17] One would not have expected doubt to exist as to the form necessary for an assignment of a lease, but the law is not clear. The relevant statutory provisions in the various states are: Conveyancing Act 1919 (NSW) ss 23B–D; Property Law Act 1974 (Qld) ss 10–12; Law of Property Act 1936 (SA) ss 28–30; Conveyancing and Law of Property Act 1884 (Tas) s 60(1)–(4), which are generally in similar terms; Property Law Act 1958 (Vic) ss 52–54; Property Law Act 1969 (WA) ss 33–35 (and see [1.6], [16.12], [16.14]). Reference is made to the Victorian provisions which closely follow in form and substance the provisions of ss 52–54 of the English Law of Property Act 1925 on which all the state provisions are based: see [1.6]. The doubtful question is whether a legal assignment, as opposed to an assignment good only in equity, must be made by deed in all cases. According to Foa on Landlord and Tenant, 8th ed, pp 415–16, assignments by act of the parties must be by deed if the legal estate is to be conveyed, and this is so even though the tenancy itself may not require writing for its creation. Woodfall on Landlord and Tenant, Vol 1, para 16.081, also takes the traditional view that an assignment of a tenancy of any kind must, to be good at law, be by deed. Similarly, Hill & Redman’s Law of Landlord and Tenant, 18th ed, Vol A, para 2641 states [page 491] that a legal assignment must be by deed, even in the case of a tenancy from year to year. It is clear that something which is ineffective as a legal assignment will be upheld as a good assignment in equity provided that there is either written evidence or part performance, equity treating the defective legal assignment as an agreement to assign: Ferguson v Hullock [1955] VLR 202; Colman v Golder [1957] VR 196; Molina v Leask [1998] ANZ ConvR 361 (confirmed on appeal [1999] NSWCA 14). The difficult question is whether a legal assignment must in all cases be by deed. The contrary view is that, in the case of leases for a term not exceeding three years which fall within s 54(2) (or the corresponding provisions), a legal assignment may be made by mere writing.

Section 52 begins by providing that all conveyances of land or of any interest therein shall be void (New South Wales and Queensland: ‘No assurance of land shall be valid’, rather than ‘void’) for the purpose of conveying or creating a legal estate unless made by deed; the section goes on to provide: (NSW s 23B(2)(d); Qld s 10(2)(c); SA s 28(2)(d); Tas s 60(1)(d); WA s 33(2)(d)) that it shall not apply to ‘leases or tenancies or other assurances not required by law to be made in writing’. By s 53(1)(a), subject to the subsequent provisions with respect to the creation of interests in land by parol, no interest in land can be created or disposed of except by writing, signed by the person creating or conveying the same, or by will, or by operation of law. Section 54(2) provides that nothing in the foregoing provisions of the Division shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years at the best rent which can be reasonably obtained without taking a fine. The same analysis applies to the corresponding provisions of the other states. The question is whether leases falling within the last-mentioned provision may be assigned at law by writing as opposed to deed. There is authority for the view that such an assignment is possible. In Milne v Lahz (1951) 52 SR (NSW) 30, the Full Court of New South Wales held that the effect of the provision in New South Wales corresponding to s 53(1)(a) was that a legal assignment of a weekly tenancy was required to be in writing. It must be noted, however, that the court proceeded upon the basis that the provision corresponding to s 52 had no application, in that that provision excluded from its operation land under the provisions of the Real Property Act 1900. As to this decision, see the article by H Tebbutt, ‘Surrenders and Assignments of Leases — Is a Deed Necessary’ (1961) 34 ALJ 353 and see [16.12]–[16.13] dealing with the form which a legal surrender must take. Nevertheless, where an estate or interest in land is not registered under the Real Property Act 1900 (NSW), an assignment is not valid at law unless made by deed, by virtue of the Conveyancing Act 1919 (NSW) s 23B(1): Chronopoulos v Caltex Oil (Australia) Pty Ltd (1982) 45 ALR 481; see also [16.14]. In Shaw v Port [1953] VLR 386, Martin J applied Milne v Lahz without adverting to the fact that in that case the Full Court had tacitly treated the provision corresponding to s 52 as inapplicable and had done so because of a limitation not to be found in the Victorian section. The actual decision in Shaw v Port was not that writing was sufficient, but that it was necessary;

[page 492] the distinction between deed and writing is not adverted to in the judgment, although counsel for the defendant had made the submission that a deed was necessary ([1953] VLR at 387). In Colman v Golder [1957] VR 196, Martin J appears to have accepted the view that the effect of s 53 was to require the assignment to be in writing. See also Ferguson v Hullock [1955] VLR 202 at 205–6. In view of these authorities it is not clear whether the traditional view, namely that a legal assignment must in all cases be by deed, is correct. Nevertheless, more recently the Court of Appeal held that on a true construction of ss 52 and 53 of the Law of Property Act 1925 (Eng) (corresponding provisions) an assignment of a leasehold interest was effective to pass the legal estate only if it was in writing and in the form of a deed: Crago v Julian [1992] 1 WLR 372 (see All ER Rev 1992 pp 233–4). As has been mentioned above, legislation exists in all states which allows the creation of parol leases in certain specified circumstances; for example, Property Law Act 1958 (Vic) s 52(2). In McMahon v Ambrose [1987] VR 817, the Full Court (on appeal from the decision in Rojain Pty Ltd v Ambrose [1986] VR 449) considered a claim for equitable damages, arising out of a claim for arrears of rent, against an assignee, by oral agreement, of a three-year lease. The court accepted that there were sufficient acts of part performance in support of the oral agreement to assign: see, particularly, at 846–8 (per Marks J), with which other members of the court apparently agreed; see at 823 (per McGarvie J). As the term assigned was less than three years, there seems no reason why the assignment could not be effective at law, but this issue did not arise as equitable remedies were being sought: see Property Law Act 1958 (Vic) ss 53(1)(a) and 54(2). However, McGarvie J, who dissented on the issue whether specific performance was available, the term having expired, commented (at 823): Reliance has been placed for the appellant on s 52 of the Property Law Act 1958 which has the effect that Ambrose’s legal interest in the lease could not be assigned to McMahon except by deed. That section has no application here because the oral agreement to assign does not itself purport to assign Ambrose’s legal interest in the lease.

This appears to be difficult to reconcile with the provisions of s 54(2) which permit the creation of leases for less than three years by parol, there being no evidence that the rent was other than the ‘best rent without taking a fine’: see above. One interpretation open is that his Honour’s view is that, once a lease for three years or less has been created by deed, s 54(2) has no operation in relation to dealings with the whole of the leasehold interest. However, even on this view there would seem no obstacle to the creation of new leases for three years or less, including subleases, by parol. Where land has been leased to one person, and another person has entered into possession of the land, it is possible that both the lessor and the lessee can be estopped from denying that there has been an effective assignment of the lease: Rodenhurst Estates Ltd v W H Barnes Ltd [1936] 2 All ER 3; Tichborne v Weir (1892) 67 LT 735; [page 493] Official Trustee of Charity Lands v Ferriman Trust Ltd [1937] 3 All ER 85; Williams v Heales (1874) LR 9 CP 177; Brown & Root Technology Ltd v Sun Alliance and London Assurance Co Ltd [2001] Ch 733; see also Vella v Wah Lei Investments (Aus) Pty Ltd [2004] NSWSC 748 and on appeal [2006] NSWSC 18.

Position of tenant after assignment [15.18] Privity of contract exists between the original lessor and the original lessee. It is unaffected by any assignment of their interests: see [15.1]. Accordingly, the original lessee remains liable on the covenants in the lease notwithstanding the assignment of the term: Baynton v Morgan (1888) 22 QB 74; John Betts & Sons Ltd v Price (1924) 40 TLR 589 (whether or not the lease was under seal); Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 305; [1944] ALR 89; Re Teller Home Furnishers Pty Ltd [1967] VR 313 at 320; 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193; Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 (FC); see also Arlesford Trading Co

Ltd v Servansingh [1971] 1 WLR 1080; Warnford Investments v Duckworth [1978] 2 WLR 741; Molina v Leask [1998] ANZ ConvR 361 (confirmed on appeal, Leask v Molina [1999] NSWCA 14). This is so because there is a contractual nexus between the parties and because s 79 of the Property Law Act 1958 (Vic) provides that covenants made relating to the land of the covenantor are deemed to be made on behalf of the tenant and his or her successors in the title: see Conveyancing Act 1919 (NSW) s 70a; Property Law Act 1974 (Qld) s 53(2); Conveyancing and Law of Property Act 1884 (Tas) s 71a; Property Law Act 1969 (WA) s 48; Law of Property Act 1925 (Eng) s 79. But the tenant is entitled to an indemnity from the assignee where the tenant incurs an obligation owing to the assignee’s breach both by statute and under the general law: Re Healing Research Trustee Co Ltd [1992] 2 All ER 481; and see [15.21]. A similar provision is made in s 78 of the Victorian Act with respect to the landlord who assigns his or her reversion: see Conveyancing Act 1919 (NSW) s 70; Property Law Act 1974 (Qld) s 53(1); Conveyancing and Law of Property Act 1884 (Tas) s 71; Property Law Act 1969 (WA) s 47; Law of Property Act 1925 (Eng) s 78. Sections 78 and 79 of the 1925 English Act have been described as provisions designed to overcome ‘conveyancing difficulties’ without generally affecting the substantive rule in Austerberry v Corporation of Oldham (1885) 29 ChD 750; Rhone v Stephens [1994] 2 AC 310 at 314–15 (per Lord Templeman); and see [15.19]. In Hindcastle Ltd v Barbara Attenborough Assoc Ltd [1997] AC 70 at 89–90 it was held that disclaimer by the liquidator of the assignee did not release the lessee or its sureties: see P Butt, ‘Liability of tenant for assignee’s breaches’ (1996) 70 ALJ 600; and see [16.25]. The position is, of course, different if the landlord determines the lease by re-entry: see at [1996] 1 All ER 748 (per Lord Nicholls). Where an assignment was made with the lessor’s consent the word ‘lessee’ in the lease meant the assignee, hence a notice of a rent increase was to be served only on the assignee: Picton-Warlow [page 494] v Allendale Holdings Pty Ltd; but it is a matter of construction of the particular lease. In this case Brinsden J said (at 110–11):

The appellant contends in effect that the construction to be placed upon the word ‘lessee’ is that where there has been an assignment with the lessor’s consent, the term ‘lessee’ means both the original lessee and any permitted assignee. Thus the definition would have the effect of extending references to the lessee in the lease to include both the lessee and the assignee. The respondent on the other hand would read the word ‘lessee’ to mean the lessee personally if he is alive and the lease had not been assigned, or if he is dead and the lease has not been assigned, his executors or administrators. But if the lease has been assigned with the lessor’s consent then it means the assignee. Which of these two alternative constructions should be adopted is I think answered by consideration of the general law applicable to the relationship of a lessor, the original lessee, and his assignee. In Milmo v Carreras [1946] KB 306 at 310 Lord Greene MR explained what was the situation of a lessee vis-à-vis the lease after a lessee had assigned it in these terms: For the purposes of this case, I think it is sufficient to say that, in accordance with a very ancient and established rule, where a lessee, by a document in the form of a sub-lease, divests himself of everything he has got (which he must necessarily do if he is transferring to his so-called sub-lessee an estate as great as, or purporting to be greater than, his own) he from that moment is a stranger to the land, in the sense that the relationship of landlord and tenant, in respect of tenure, cannot any longer exist between him and the so-called sub-lessee. That relationship must depend upon privity of estate. I myself find it impossible to conceive of a relationship of landlord and tenant which has not got that essential element of tenure in it, and that implies that the tenant holds of his landlord, and he can only do that if the landlord has a reversion. You cannot have a purely contractual tenure. Tenure exists by reason of privity of estate. By reason of the assignment here the appellant had divested himself of the whole of his interest in the lease by the assignment. No privity of estate continued to exist between him and the respondent lessor.

The benefit of the lessor’s covenants in the lease ran with the land in favour of the appellant’s assignee provided that the covenants were ones which touched or concerned the land: Spencer’s case (1583) 5 Co Rep 16a and Halsbury’s Laws of England, 4th ed, Vol 27, para 398. Once this lease was assigned the contractual rights of enforcement passed to the assignee, and it was the assignee and not the appellant who could from thence on sue the respondent: Halsbury’s, vol 27, para 390. Of course the appellant, by reason of privity of contract and indeed the provisions of the deed of assignment, remained liable to the respondent to observe and perform the lessee’s covenants. Apart from that obligation the original lessee appellant, to use the words of Lord Greene MR in the quoted passage above became ‘a stranger to the land’ in the sense that the relationship of landlord and tenant in respect of the lease no longer existed between him and the respondent. In view of these general considerations it seems very unlikely that the construction which the appellant seeks to place upon the word ‘lessee’ in the lease was the one the parties intended. Having considered the relevant terms of the lease, Brinsden J continued (at 112): I do not see any compelling reason why the construction of the word ‘lessee’ favoured by the appellant should be applied to the lease. When the lease speaks of the lessee [page 495] it contemplates the lessee who has the enjoyment and burden of the term created by the lease. The appeal therefore can be decided on the basis of Baynton v Morgan (1888) 22 QBD 74 since by making the assignment the appellant has empowered the assignee, if it should so desire, to, inter alia, surrender to the lessor all or any part of the demised premises, to agree to the review of rent requested by the lessor, and indeed if it wished to dispute the review and push the

matter to arbitration. I am quite unable to distinguish this case from Baynton in any meaningful way: … a lessee by assigning all his interest in the term to an assignee empowers the assignee, if he so desires, to surrender to the lessee all or any part of the demised premises. He gives to his assignee the powers which he might himself have exercised, and, as he himself might have surrendered part of the premises, he authorises his assignee to do so: per Lord Esher MR (at 78). There is also authority which directly supports the respondent namely Centrovincial Estates v Bulk Storage (1983) 46 P & CR 393 and Hazelmere Estates Ltd v British Olivetti Ltd (unreported, High Court of Justice, UK, Deputy Judge David McNeil QC, No 1976/H1232, 1 June 1977); see also Selous Street Properties v Oronel Fabrics (1985) The Times, 3 March, where it was held that the original lessee remains liable in respect of a rent review even if the value of the demised premises is increased by works carried out by the assignee without the knowledge of the lessee. See also Rowland J at 117–18. See also Centrovincial Estates plc v Bulk Storage Ltd [1983] 2 EGLR 45; Selous Street Properties Ltd v Oronel Fabrics Ltd [1984] 1 EGLR 50; and Friends Provident Life Office v British Railway Board [1996] 1 ALL ER 336; and see [11.9]. The Court of Appeal in Friends Provident Life Office disapproved of Centrovincial Estates plc and Selous Street Properties Ltd insofar as those cases suggested that an assignee of the term of a lease could vary or increase the obligations of the lessee. In that case the assignee of the term entered into a deed with the lessor that varied the lease by increasing the rent. The lessor claimed that that lessee was liable to pay the rent as varied by the deed made between the lessor and the assignee. The Court of Appeal rejected the lessor’s contention, holding that an assignee could not by contract vary or increase the obligations undertaken by the lessee in its contract with the lessor. Compare the position where the tenant surrenders the lease: see [16.22]. As to the position where privity of contract does not exist with a subsequent assignee, see [15.19].

Position of assignee [15.19] An assignee of the term is not, by virtue only of the fact of assignment, bound by mere personal convenants on the part of the lessee contained in the lease. But he or she is bound by covenants which ‘run with the land’, the relationship of landlord and tenant being exceptional in this regard: Austerberry v Corporation of Oldham (1885) 29 Ch D 750; see also Rhone v Stephens [1994] 2 AC 310. [page 496] Tenants’ covenants which have been held to touch and concern the land include the following: to pay rent or taxes: Parker v Webb (1693) 91 ER 656; to repair or leave in repair: Martyn v Clue (1852) 18 QB 661; to pay £40 towards decoration on quitting the premises: Boyer v Warbey [1953] 1 QB 234; 1 All ER 269, and see Moss’ Empires Ltd v Olympia (Liverpool) Ltd [1939] AC 544; [1938] 3 All ER 166; to sell fixtures: Malmsbury Confluence Gold Mining Co Ltd v Tucker (1877) 3 VLR (L) 213; to purchase beer only from the lessor: Clegg v Hands (1890) 44 Ch D 503; Manchester Brewery Co v Coombs [1901] 2 Ch 608; to lay dung on the land every year: Sale v Kitchingham (1713) 88 ER 673; to reside on a farm during the term: Tatem v Chaplin (1793) 2 Hy Bl 133; 126 ER 470; not to alter and not to advertise upon the demised premises: White v Kenny [1920] VLR 290; to renew tenant’s fixtures: Williams v Earle (1868) LR 3 QB 739; to carry on the business of a publican and to conduct the premises in an orderly manner, there being no stipulation that the lessee should remain on the land and personally carry on the business: Seabrook v McMullan (1908) 10 WALR 47; Fleetwood v Hull (1889) 23 QBD 35; not to assign or sublet: McEacharn v Colton [1902] AC 104; Goldstein v Sanders [1915] 1 Ch 549; Cohen v Popular Restaurants Ltd [1917] 1 KB 480; [1916–17] All ER Rep 1113; Re Robert Stephenson and Co Ltd [1915] 1 Ch 802; [1914–15] All ER Rep 1107; to pay a bonus for the lessor’s consent, such covenant being part of a covenant against assignment without consent: Cripps v Irwin (1931) 31 SR (NSW) 383; not to let a particular person be concerned in the conduct of the business carried on upon the demised premises: Lewis v American and

Colonial Distributors Ltd [1945] Ch 225; 1 All ER 592; to use the premises as a private dwelling house only: Wilkinson v Rogers (1864) 2 De G J & S 62; 46 ER 298; to insure against fire: Vernon v Smith (1821) 5 B & A 1; 106 ER 1094. As to landlord’s covenants which have been held to touch and concern the land, see [15.20]. It has been held that a covenant by the tenant did not touch and concern the land in the case of the following covenants: to pay to the landlord or a stranger a collateral sum — that is, a sum not reserved as rent: Mayho v Buckhurst (1617) Cro Jac 438; 79 ER 374; Lambert v Norris (1837) 2 M & W 333; 150 ER 784; Flight v Glossopp (1835) 2 Bing NC 125; 132 ER 50; to pay to the landlord a security deposit: Hua Chiao Commercial Bank Ltd v Chiaphua Industries Ltd [1987] AC 99 (compare Kumar v Dunning [1989] 1 QB 193); to sell to the lessor moveables upon the land demised: Malmsbury Confluence Gold Mining Co Ltd v Tucker (1877) 3 VLR (L) 213; to pay taxes on premises other than the demised premises: Gower v Postmaster-General (1877) 57 LT 527; 4 TLR 5; not to employ a certain class of person on the premises: Congleton Corporation v Pattison (1808) 10 East 130; 103 ER 725. Landlord’s covenants which have been held not to touch and concern the land are mentioned in [15.20]. The effect of the Property Law Act 1958 (Vic) s 141(2) (see [page 497] [15.20]) is that the person entitled to the rent to the exclusion of all others can recover it, although, but for s 141(2), he or she would have been obliged to sue in the name of the person in whom the legal estate was vested: Schalit v Nadler Ltd [1933] 2 KB 79; [1933] All ER Rep 708. Legislation similar to the Property Law Act 1958 (Vic) ss 141–142 exists in the other states: see Conveyancing Act 1919 (NSW) ss 117–118; Property Law Act 1974 (Qld) ss 117–118; Conveyancing and Law of Property Act 1884 (Tas) ss 10–11; Property Law Act 1969 (WA) ss 77–78. It appears that the English legislation from which these provisions are derived, the Grantees of Reversion Act 1540

(32 Hen 8, c 34), remains in force in South Australia. In relation to ss 141– 142 of the Property Law Act 1958 (Vic), and the corresponding provisions, and the Grantees of Reversion Act 1540, see [15.20]. As to landlord’s covenants which touch and concern the land and those which do not touch and concern the land, these are examined in [15.20]. The assignee’s liability in respect of covenants which run with the land stems from the privity of estate which exists between him or her and the original lessor, there being no privity of contract in consequence of the mere fact of assignment: R v Tottenham and District Rent Tribunal; Ex parte Northfield (Highgate) Ltd [1957] 1 QB 103 at 107; [1956] 2 All ER 803. Where the assignment is only as at part of the land demised, the lessor may sue the assignee only for the proportion of the rent that is attributable to that part of the land: G J Coles Co Ltd v Federal Commissioner of Taxation (1975) 132 CLR 242 at 252; 5 ATR 353; Lester v Ridd [1990] 2 QB 430 at 438 (per Dillon LJ); and the references to Curtis v Spitty (1835) 1 Bing NC 756; 131 ER 1309 and Witham v Bullock [1939] 2 KB 81. Lester v Ridd is discussed at All ER Rev 1989 pp 198–9. In practice, there is often, in addition, privity of contract between the original lessor and the assignee, the assignment containing a covenant on the part of the assignee with the lessor that he or she will pay the rent and perform and observe the covenants, agreements and conditions contained in the lease. See, for example, Re Teller Home Furnishers Pty Ltd [1967] VR 313 at 320. Where privity of contract does not exist, so that the assignee is liable only by virtue of privity of estate, he or she may rid him or herself of liability as to the future by assigning the term: Paul v Nurse (1828) 8 B & C 486; 108 ER 1123. Unless the assignee assumes an appropriate liability in contract towards the lessor, he or she will be liable only in respect of rent which accrues due and breaches of covenant which take place after the lease has been assigned to him or her: Grescot v Green [1700] 1 Salk 199; 90 ER 996; Renshaw v Maher [1907] VLR 520; Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1959] Ch 592 at 606; [1958] 2 All ER 551: this applies even in relation to a rent review under the provisions of the lease with retro-active effect, as rent is to be treated as accruing from day to day even though it may not be payable immediately: Parry v Robinson-Wyllie Ltd [1987] 2 EGLR 133 (Ch), applying the Apportionment Act 1870 (UK); see [16.22] (the preceding sentence and the propositions contained therein and also

[page 498] the discussion which follows in the remainder of this paragraph [15.9] was relied upon in Gigi Entertainment Pty Ltd v Schmidt [2012] NSWSC 1423 [117] (Schmidt J); at least prior to the concluding reference made to this case.). However, in Estates Gazette Ltd v Benjamin Restaurants Ltd [1994] 1 WLR 1528, it was held that where the licence to assign imposed on the assignee an obligation to pay the rents reserved by the lease at the time and in the manner therein provided for and the rents reserved by the lease were those ‘during the said term hereby granted’ it was clear that the assignee was bound to pay the rents payable during the whole term. See also Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107 (FC), discussed at [15.18]. It is therefore at times important to consider whether the covenant is a covenant to do a definite act capable only of a breach once for all or a continuing covenant: Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 238. If the covenant is a continuing one, the assignee will be liable, but if the covenant is one which can be broken only once for all, the assignee will be liable by reason of privity of estate only if the breach took place after the assignment: Rankin v Danby (1883) 9 VLR (L) 278; Renshaw v Maher [1907] VLR 520; the assignee will be liable for the disrepair of the premises as they stand when he or she takes over only so far as their then state of disrepair falls within the scope of the tenant’s repairing covenants: Granada Theatres Ltd v Freehold Investments (Leytonstone) Ltd; Sleeman v Colonial Distributors Ltd [1956] NZLR 188. A covenant to build is not a continuing covenant: Measures v McFadyen (1910) 11 CLR 723 at 732. If a lessee permits a continuous breach of a covenant in his or her lease, such as allowing the buildings to fall into disrepair, and then assigns the lease, and the assignee continues to permit the breach of covenant, both lessee and assignee can be joined as defendants in an action for damages for this breach, and the continuous breach of covenant gives rise to one cause of action: Fleming v Blythe (1906) 26 NZLR 500. An equitable assignee does not, generally speaking, render him or herself liable to be sued directly by the lessor on the covenants of the lease: Hoskins v Dillon (1950) 67 WN (NSW) 115. The issue which arose with respect to the preceding discussion in Gigi Entertainment Pty Ltd v Schmidt [2012] NSWSC 1423 was, Schmidt J said:

[118] The disagreement turned on whether or not any of the obligations imposed by the lease was “a covenant to do a definite act capable only of a breach once for all or a continuing covenant”. The former is a breach of a kind which may be waived. By way of contrast, breach of a continuing obligation, “involves a continuing breach until the omission is made good” (see Dixon J in Larking v Great Western (Nepean) Gravel Ltd [1940] HCA 37; (1940) 64 CLR 221 at 238). There his Honour also observed: The distinction between a covenant to do a definite act capable only of a breach once for all and a continuing covenant has consequences not only in relation to waiver but also in the measure of damage, in the effect of lapse of time under statutes of limitation, and, where the covenant runs with the land, in the liability of an assignee to sue or be sued for further breaches. [page 499]

Benefit and burden of covenants run with the land [15.20] Where the landlord grants the tenant a lease, privity of contract exists between those parties, and the landlord may enforce all covenants in that lease against the tenant, notwithstanding that the latter has assigned his or her interest therein and it was the assignee who committed the breach: John Betts & Sons Ltd v Price (1924) 40 TLR 589; and see [15.1] and [15.18]. This is so because there is a contractual nexus between the parties and because s 79 of the Property Law Act 1958 (Vic) provides that covenants made relating to the land of the covenantor are deemed to be made on behalf of the tenant and his or her successors in title: see Conveyancing Act 1919 (NSW) s 70A; Property Law Act 1974 (Qld) s 53(2); Conveyancing and Law of Property Act 1884 (Tas) s 71A; Property Law Act 1969 (WA) s 48. For a discussion of the effect of the New South Wales provisions on the entitlement of an assignee to

exercise an option to purchase the reversion, see C Rossiter, ‘Options to Acquire Interests in Land — Freehold and Leasehold’ (1982) 56 ALJ 576 at 582–3 (and see the authorities cited below in relation to covenants by the landlord which do not touch and concern the land). But the tenant is entitled to an indemnity from the assignee where the tenant incurs an obligation owing to the assignee’s breach: see [15.21]. A similar provision is made in s 78 with respect to the landlord who assigns his or her reversion: see Conveyancing Act 1919 (NSW) s 70; Property Law Act 1974 (Qld) s 53(1); Conveyancing and Law of Property Act 1884 (Tas) s 71; Property Law Act 1969 (WA) s 47. But compare the position where the tenant surrenders the lease: see [16.22]. Where there is no privity of contract or estate as, for example, between a landlord and a subtenant, covenants are not enforceable between the parties. For the distinction between assignment and subletting, see [15.1], [15.2]. There are two exceptions to this: one is that the benefit (as opposed to the burden) of a covenant can be assigned with the land for the benefit of which it was made if it touches and concerns the land; the other exception is that equity permits the assignment of both the benefit and the burden of restrictive covenants — that is, those imposing a negative obligation (for example, not to build) — as opposed to positive covenants (for example, to build), so long as there is both land which is benefited and land which is burdened. If there is privity of estate — that is, where the relationship of landlord and tenant can be said to exist between the parties (on this question, see [15.1]) — at common law an assignee of the lease can enforce the benefit of covenants which run with the land. So far as the burden of covenants is concerned, the common law draws a distinction between a covenant which relates to a thing in esse (that is, in existence; for example, to repair a house already built) and a covenant which relates to a thing in posse (that is, not in existence; for example, to erect new buildings or to repair a new building if it is erected). A covenant which relates to a thing in esse and which runs with the land binds the assignee of the term in all cases, but a covenant which relates [page 500] to a thing in posse and which touches and concerns the land binds the assignee

only if the original lessee convenanted for himself ‘and his assignees’: Spencer’s case (1583) 5 Co Rep 16a; [1558–1774] All ER Rep 68; 77 ER 72; Congleton Corporation v Pattison (1808) 10 East 130; 103 ER 725. Since s 79 deems the covenantor to enter into the covenant for him or herself and his or her successors in title, the above distinction is now non-existent, with the result that the benefit and the burden of covenants which touch and concern the land now run with the lease in all cases: see further [15.19]. For a statement as to the basis and the extent to which the common law fixes the leasehold estate with the benefits and the burdens of covenants, see City of London Corporation v Fell [1994] 1 AC 458 at 465–6 (per Lord Templeman). As can be seen, the common law rule is that in most instances covenants touching and concerning the land run with the lease (where there is privity of estate). But this rule does not apply where the reversion is assigned. At common law the assignee of the reversion is neither able to sue or liable to be sued. He or she can, however, sue on implied covenants — that is, covenants inherent in the relationship of landlord and tenant; for example, a covenant to pay rent: Wedd v Porter [1916] 2 KB 91; [1916–17] All ER Rep 803. The common law was altered by statute, and the Victorian provisions are now contained in the Property Law Act 1958 ss 141–142. By s 141, the benefit of covenants having reference to the subject matter of the lease, and by s 142, the burden of such covenants, runs with the reversion: for the corresponding provisions in the other states, see [15.19]. It has been held, and seemingly generally accepted, that these sections apply only to covenants which touch and concern the land: Davis v Town Properties Investment Corporation Ltd [1903] 1 Ch 797; [1900–3] All ER Rep 558; Barnes v City of London Real Property Co [1918] 2 Ch 18 at 33. However, the operation of the New South Wales equivalent of s 141 (Conveyancing Act 1919 s 117) was considered in Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546. His Honour said (at 549–50; and see the review of the authorities at [20.8]): I set out the provisions of section 117(1). ‘Rent and benefit of lessees’ covenants to run with reversion. 117(1) Rent reserved by a lease and the benefit of every covenant or provision therein contained having reference to

the subject-matter thereof and on the lessee’s part to be observed or performed, and every condition of re-entry and other con-dition therein contained shall be annexed and incident to, and shall go with the reversionary estate in the land or in any part thereof immediately expectant on the term granted by the lease, notwithstanding severance of that reversionary estate, and shall be capable of being recovered, received, enforced, and taken advantage of by the person from time to time entitled, subject to the term, to the income of the whole or any part as the case may require of the land leased. This subsection extends to a covenant to do some act relating to the land, notwithstanding that the subject-matter may not be in existence when the covenant is made. [page 501] Except for the last sentence this re-enacts the Conveyancing and Law of Property Act 1881 (UK), s 10, and may be compared with the Law of Property Act 1925 (UK), s 141. Subsection 117(1) appears to me to divide itself into two parts the first of which relates to rights which are annexed and incident to and go with the reversionary estate in the land, referring to the legal estate, and the second of which, in a striking departure, confers rights in terms which are adjectival or procedural and relates to standing to take advantage of a covenant in various ways which it gives to the person from time to time entitled subject to the term to the income of the land leased. In this departure, rights are not associated with the legal estate in the land but are associated with an entitlement to income, without specification of the source, whether in a legal or an equitable estate or conceivably in some contractual or statutory entitlement, of the right to the income of the land leased. On the basis of this analysis of s 117(1), and having considered an argument

that the relevant covenant was merely personal, his Honour continued (at 555): The relevant inquiry to my mind is not inquiry for expressions of an intention that the benefit of a covenant or a condition should pass; the inquiry is an inquiry to ascertain whether the circumstances indicated by s 117(1) in which it does pass exist; the intention of the parties is significant and could even operate to exclude the benefit from passing in this way, but otherwise the statute operates with respect to every covenant and provision having reference to the subject-matter, or in the older language touching or concerning the land, and also to every condition of re-entry and other condition contained in the lease, in the latter cases irrespective of whether they have reference to the subject-matter or touch and concern the land; see Shiloh Spinners Ltd v Harding [1973] AC 691 at 717 where Lord Wilberforce disparaged the authority of Stevens v Copp (1868) LR 4 Ex 20. It would seem that the Conveyancing and Law of Property Act 1881 (UK), s 10, and its successor legislation made an intentional departure from the earlier statute law on which Stevens v Copp was decided by going further than annexing the benefit of rent and covenants having reference to the subjectmatter or in the older language touching and concerning the land to the reversionary estate and adding ‘every condition of re-entry and other condition therein contained’ without in the latter cases relating the conditions mentioned to their having reference to the subjectmatter: see the commentary in Megarry & Wade, The Law of Real Property, 5th ed, 1984, at pp 758–9. See also Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 at 11. This is not the position in South Australia where the Grantees of Reversion Act 1540 (32 Hen 8, c 34) remains in force: see Charmar Electrical Pty Ltd v Minda Incorporated (1990) 55 SASR 112 at 118–19 (FC) as to this legislation. This legislation does not distinguish between covenants and conditions in the same way as do the modern re-enactments, with the result that it only applies to covenants which touch and concern the land: see Megarry & Wade, The Law of Real Property, 8th ed, 2012, at [20– 062], [20–079]–[20–080]. The expression ‘therein contained’ in s 141 includes

implied covenants and provisions: Cole v Kelly [1920] 2 KB 106; [1920] All ER Rep 537; Dalegrove Pty Ltd v Isles Parking Station Pty Ltd. [page 502] A concurrent lessee is entitled to the reversion ‘expectant on the term granted by the lease’ within the meaning of s 141: Plummer v David [1920] 1 KB 326. A personal representative of the tenant is an assignee by operation of law: Ashe v Hogan [1920] IR 159. The question whether the assignor can sue the lessee after the assignment for breaches of covenant committed before the assignment has been considered in a number of cases: see Re King [1963] 1 Ch 459; [1962] 2 All ER 66; London and County (A&D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764; Arlesford Trading Co Ltd v Servansingh [1971] 1 WLR 1080; and City and Metropolitan Properties Ltd v Greycroft Ltd [1987] 1 WLR 1085. In Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd R 1 the Queensland Full Court considered the effect of equivalent legislation (Property Law Act 1974 (Qld) s 117; which is in the same terms as the Law of Property Act 1925 (Eng) s 141) on a claim by a vendor for arrears of rent which had accumulated over a period of time before settlement of the sale of the property. The purchaser of the property had become the registered proprietor on or shortly after settlement. It was held, applying the three cases, Re King, London and County (A & D) Ltd, and Arlesford Trading, that the assignee of the reversion (the purchaser) acquired the right to the benefits of the arrears of rent that had accrued prior to the assignment by reason of the operation of s 117. Further, the right was simultaneously lost by the assignor (the vendor) by reason of the operation of those provisions. The reasons for the operation of s 117 in this way were conveniently stated by Ryan J with reference to the authorities (at 5–6): In Flight v Bentley (1835) 7 Lim 149; 58 ER 793, it was decided that the assignee of a reversion was not entitled to arrears of rent which became due prior to the assignment. Accordingly, a purchaser of the reversion whose conveyance was executed in July 1832 could not sue for the previous June quarter’s rent, but only the vendor, the reason

given being that that rent had been severed from the reversion and was a mere chose in action. That decision was referred to by Lord Denning MR in In re King dec’d [1963] Ch 459. In an examination of the historical background to s 141 of the Law of Property Act 1925, he pointed out that prior to 1540, when a lessor assigned his reversion to a purchaser, the assignee did not get the benefit of any of the express covenants in the lease, and could not even sue for breaches that occurred after he bought the premises, because he was a stranger to the covenant between the lessor and the lessee. Privity of estate gave the assignee the right to sue the lessee in debt for rent that occurred in his own time, but no right to sue on the express covenants. By an Act 32 Henry 8 c 34, assignees of the reversion were given the same advantages, benefits and remedies as the heir. The heir could sue for rent falling due in his own time, but failure to pay rent during the assignor’s time was a breach which caused damage to the assignor exclusively. Accordingly, as Flight v Bentley decided, the assignor alone could sue for it and not the assignee. His Lordship thought that s 141 of the Law of Property Act 1925 had not changed the previous law, and Flight v Bentley was still good law. A different view was expressed by Upjohn LJ and Diplock LJ. Upjohn LJ stated his opinion as being that Flight v Bentley was not very satisfactory, and said that the reasoning in that case that rent which issued out of the land became severed after it had become [page 503] due did not apply to a covenant. Diplock LJ did not refer to Flight v Bentley, but he expressed the view that the effect of s 141 was that after the assignment of the reversion to a lease, the assignee alone is entitled to sue the tenant for breaches of covenants contained in the lease whether such breaches occurred before or after the date of the assignment of the reversion. The issue in In re King was whether s 141 conferred upon an assignee of the reversion the right to damages for breach of a covenant

to rebuild a factory, where the covenant had already been breached by the lessee before the assignment. It was held that it did. That case was not concerned with the applicability of s 141 to the question of rent in arrear at the date of the assignment of the reversion. That issue did arise however in London & County Ltd v W Sportsman Ltd [1971] 1 Ch 764, when it was decided that Flight v Bentley was not now the law. Russell LJ with whom other members of the Court agreed said that the language of s 141 was such as to indicate plainly that an assignee of the reversion may sue and re-enter for rent in arrears at the date of the assignment when the right of re-entry had arisen before the assignment. The position is therefore that an assignee of the reversion acquires the right to sue for breaches of covenant committed before the assignment, and the assignor loses that right. See also Macrossan CJ (at 3) and Byrne J (at 9–10). Byrne J dissented as to the result of the appeal, taking the view that the terms of the contract of sale had the effect of precluding the operation of s 117 (see at 10–11), having said (at 9) that it was open to the purchaser to ‘renounce’ the benefit of s 117, referring to The Equitable Life Assurance Co of the United States v Bogie (1905) 3 CLR 878 at 897 (per Barton J); and see the reference to Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546 at 555. All members of the court agreed that the provisions of s 117 could be negated by an agreement between the assignor and assignee to this effect in which case the assignor can still sue, if necessary in the name of the assignee, referring to Re King at [1963] Ch 459 at 488 (per Upjohn LJ): see at 4, 7 and 9. It was also noted that the operation of s 117 could, in effect, be precluded by agreement between the vendor assignor and purchaser assignee for adjustment at settlement on the basis that arrears of rent accrued to that date were the vendor assignor’s entitlement, though if there needs to be an action for their recovery that will be a matter for the purchaser. See also P Butt, ‘Vendor Cannot Recover Arrears of Rent’ (1991) 65 ALJ 727. As to the position of a mortgagee with respect to entitlement to rent, including rent arrears, see [5.16], and see also [7.4]. In London and County (A & D) Ltd v Wilfred Sportsman Ltd it was held that by virtue of s 141 an assignee of the reversion may sue and re-enter for

rent in arrears at the date of the assignment when the right of re-entry has arisen before the assignment. A matter which is not clear is the extent to which this rule applies to a mortgage. The position would appear to depend on the extent to which a mortgagee is to be regarded as an assignee for the purpose of s 141 and when that ‘assignment’, if any, takes place. At general law a mortgagee is not regarded as an assignee of the rent and is entitled to enforce payment of arrears in its own right: Reeves v Pope [1914] 2 KB [page 504] 284 (CA) at 289–90 (per Buckley LJ); cited with approval in Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168 at 173–4, and see the other authorities to which reference is made at [7.4]. Also, at general law, if the mortgagee takes possession or gives notice to the tenant, the mortgagee’s title relates back to the date when his or her right first accrued: see E Tyler, P Young and C Croft, Fisher and Lightwood’s Law of Mortgage, LexisNexis Butterworths, Australia, 2014, at [12.14]. In Moss v Gallimore (1779) 1 Doug KB 279; 99 ER 182 it was held that the mortgagee becomes entitled to and may distrain or sue for the rent in arrears since the mortgage, and also for that which subsequently accrues. Until the mortgagee gives the tenant a notice to pay rent to it, the tenant is obliged to pay the mortgagor under the terms of the lease. However, if the tenant pays rent to the mortgagor after notice to pay to the mortgagee and is afterwards compelled to pay the latter, the payment being voluntary, cannot afterwards be recovered from the mortgagor: Higgs v Scott (1849) 7 CB 63; 137 ER 26; and see Tyler, Young and Croft, above, at [12.13]. On this basis, or on the basis that a mortgagee of general law land is to be taken as an assignee of the reversion for present purposes as at the date of the grant of the mortgage, a mortgagee of general law land is entitled to rent accruing and unpaid from the grant of the mortgage, payable to it as and from the date the mortgagee gives the tenant notice to pay rent to it. Under Torrens system legislation a mortgagee has no claim to rents or profits until default in payment of all or part of the principal sum or any interest (see Real Property Act 1900 (NSW) s 60; Land Title Act 1994 (Qld) s

78(2); Real Property Act 1886 (SA) s 137; Land Titles Act 1980 (Tas) s 82; Transfer of Land Act 1958 (Vic) s 78(1); Transfer of Land Act 1893 (WA) s 111); or breach of any covenant: see Transfer of Land Act 1958 (Vic) s 81(1) and Transfer of Land Act 1893 (WA) s 116. Sections 81(1) and 116 of the Victorian and Western Australian Acts seek to place a first registered mortgagee of Torrens system land in the same position as a first mortgagee of general law land: see City Mutual Life Assurance Society Ltd v Lance Creek Meat Works Pty Ltd [1976] VR 1; Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505; and see Tyler, Young and Croft, above, [19.04]. On this basis it would appear to follow that in Victoria and Western Australia the general law position applies. This position is consistent with Citibank Pty Ltd v Simon Fredericks Pty Ltd [1993] 2 VR 168; Ory and Ory v Betamore Pty Ltd (in liq) (1993) 60 SASR 393 (FC); and Re Partnership Pacific Securities Ltd [1994] 1 Qd R 410, which are discussed at [7.4]. However, given that the nature of the Torrens title mortgage is that of a statutory charge (which is discussed in these cases; and see Tyler, Young and Croft, above, [4.1]), it may be thought that the position would be otherwise in the other states. Partnership Pacific would support this view, but not Citibank or Ory and Ory: see [7.4]. Having regard to the latter two decisions and the approach to Torrens system legislation adopted by the High Court in Barry v Heider (1914) 19 CLR 197 at 213 (per Isaacs J) and subsequent decisions (and see Tyler, Young and Croft, above, [28.14]–[28.15]) it seems that the general law [page 505] position would apply, subject to the mortgagee complying with the Real Property Act 1886 (SA) s 137, or Transfer of Land Act 1958 (Vic) s 78 (see Ory and Ory and Citibank, respectively) or their equivalents. Any entitlement of a mortgagee (general law or Torrens) to rents, arrears or otherwise, is subject to the mortgagee’s obligation to account to the mortgagor as a mortgagee in possession: see Tyler, Young and Croft, above, [19.39]–[19.40]. As to the necessity for a mortgagee to give the tenant notice to pay rent to it, see SEAA Enterprises Pty Ltd v Figgins Holdings Pty Ltd (No 2) (1996) V ConvR ¶54-538, referred to in [5.16].

Any covenant which affects the landlord qua landlord or the tenant qua tenant will probably be within the class of covenants which touch and concern the land: Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1 at 7; 1 All ER 758. In P & A Swift Investments (a firm) v Combined English Stores Group plc [1989] AC 632 the tenant’s obligations under a sublease to pay the rent and to observe the covenants were guaranteed by the appellant company. The leasehold reversion was conveyed and assigned but the conveyance did not contain any express assignment of the benefit of the surety’s covenant. The House of Lords approved and applied the Court of Appeal decision in Kumar v Dunning [1989] 1 QB 193, that the benefit of a covenant by a surety for the performance of a tenant’s obligations under a lease is one capable of running with the reversion and therefore passes to an assignee of the reversion without express assignment. Lord Oliver of Aylmerton provided a useful review of the authorities (at 639–42): The relationship between the landlord and a surety in a case such as the present is, of course, contractual only. The surety has no interest in the land the subject matter of the demise and there is thus no privity of estate. In seeking, therefore, to enforce the surety’s covenant, an assignee of the reversion cannot rely on the statute 32 Hen 8 c 34 (grantees of reversions (1540)), the provisions of which were substantially re-enacted in s 141 of the Law of Property Act 1925 and which apply only to covenants between landlord and tenant. His claim to enforce rests on the common law rule under which the benefit of the covenant would run with the land if, but only if, the assignee had the legal estate in the land and the covenant was one which ‘touched and concerned’ the land. There is no question but that the first of these conditions is complied with in the instant case, but it is said, first, that a reversion on a lease is not ‘land’ for the purposes of the application of the common law rule and, second, and in any event, that the covenant of a surety is no more than a covenant to pay a sum of money which is entirely collateral and does not therefore touch and concern the land. As to the first point, counsel for the appellant has argued with his usual persuasiveness that although there is no specific authority on the point the reversion of a lease clearly could not have been treated as

‘land’ under the old common law rule since, if it had, the 1540 Act would have been unnecessary. Certainly that seems to have been so as regards covenants between the tenant and his landlord, but, of course, the tenant’s covenants ordinarily endure only during the term of the lease and this may, therefore, have been peculiar to that particular relationship. There seems to be no logical reason in the case [page 506] of a third party covenant why the mere fact that the land is let, either at the time of the covenant or of its transfer to a successor, should prevent the benefit from running with the land. Certainly it appears that some incorporeal hereditaments (for instance an easement) rank as ‘land’ for this purpose: see Gaw v Coras Iompair Eireann [1953] IR 232. As was pointed out by Romer LJ in Grant v Edmondson [1931] 1 Ch 1 at 28, [1930] All ER Rep 48 at 59, it is impossible in this area of the law to argue safely either by reason or by analogy for: ‘The established rules concerning it are purely arbitrary, and the distinctions, for the most part, quite illogical’. We are, in any event, concerned with what is the position in 1988 and not in 1539 and there being no direct decision on the point I am, for my part, not prepared to assume that the common law has not developed in the four centuries which have elapsed since the 1540 Act nor that ‘land’ for the purposes of the common law rule has not, over this period, come to bear the same meaning as it does in the context of landlord and tenant. In my opinion the question of whether a surety’s covenant in a lease touches and concerns the land falls to be determined by the same test as that applicable to the tenant’s covenant. That test was formulated by Bayley J in Congleton Corp v Pattison (1808) 10 East 130 at 138, 103 ER 725 at 728 and adopted by Farwell J in Rogers v Hosegood [1900] 2 Ch 388 at 395: … the covenant must either affect land as regards mode of occupation, or it must be such as per se, and not merely from collateral circumstances, affects the value of the land.

The meaning of those words ‘per se, and not merely from collateral circumstances’ has been the subject matter of a certain amount of judicial consideration and the judgment of Sir Nicolas BrowneWilkinson V-C in Kumar v Dunning [1987] 2 All ER 801, [1987] 3 WLR 1167, where the problem was identical to that in the instant case save that the covenant was given on an assignment and not on the grant of the lease, contains a careful and helpful review of the authorities. No useful purpose would be served by repeating this here and I am both grateful for and content to accept both his analysis and his conclusion that the correct principle was that pronounced by Best J in Vyvyan v Arthur (1823) 1 B & C 410 at 417, [1814–23] All ER Rep 349 at 352 and approved by this House in Dyson v Forster [1909] AC 98, [1908–10] All ER Rep 212: The general principle is, that if the performance of the covenant be beneficial to the reversioner, in respect of the lessor’s demand, and to no other person, his assignee may sue upon it; but if it be beneficial to the lessor, without regard to his continuing owner of the estate, it is a mere collateral covenant, upon which the assignee cannot sue. Sir Nicholas Browne-Wilkinson V-C stated his conclusion ([1987] 2 All ER 801 at 809–10, [1987] 3 WLR 1167 at 1177): From these authorities I collect two things. Firstly, that the acid test whether or not a benefit is collateral is that laid down by Best J, namely ‘is the covenant beneficial to the owner for the time being of the covenantee’s land, and to no one else?’ Secondly, a covenant simply to pay a sum of money, whether by way of insurance premium, compensation or damages, is a covenant capable of touching and concerning the land provided that the existence of the covenant, and the right to payment thereunder, affects the value of the land in whomsoever it is vested for the time being. [page 507]

It is objected that this states the matter too broadly because, for example, it is said that it would involve the conclusion that a simple covenant to pay an annuity of £x per annum to the owner for the time being of Blackacre would then be treated as a covenant touching and concerning the land because it would enhance the value of the land. This is, I think, to read the words of Sir Nicholas BrowneWilkinson V-C too literally, for it is, as it seems to me, implicit in them that he is referring to a monetary obligation related to something which issues out of or is to be done on or to the land. His approach to the problem (which, again, I respectfully adopt) emerges from the following passage from his judgment (1987)] 2 All ER 801 at 807, [1987] 3 WLR 1167 at 1174): The surety covenant is given as a support or buttress to covenants given by a tenant to a landlord. The covenants by the tenant relate not only to the payment of rent, but also to repair, insurance and user of the premises. All such covenants by a tenant in favour of the landlord touch and concern the land, ie the reversion of the landlord. The performance of some covenants by tenants relate to things done on the land itself (eg repair and user covenants). Other tenants’ covenants (eg payment of rent and insurance) require nothing to be done on the land itself. They are mere covenants for the payment of money. The covenant to pay rent is the major cause of the landlord’s reversion having any value during the continuance of the term. Where there is privity of estate, the tenant’s covenant to pay rent touches and concerns the land: see Parker v Webb (1693) 3 Salk 5, 91 ER 656. As it seems to me, in principle a covenant by a third party guaranteeing the performance by the tenant of his obligations should touch and concern the reversion as much as do the tenants’ covenants themselves. This view accords with what, to my mind, is the commercial common sense and justice of the case. When, as in the present case, the lease has been assigned on the terms that the sureties will guarantee performance by the assignee of the lease, justice and common sense ought to require the sureties,

not the original tenant, to be primarily liable in the event of default by the assignee. So long as the reversion is not assigned, that will be the position. Why should the position between the original tenant and the sureties be rendered completely different just because the reversion has been assigned, a transaction wholly outside the control of the original tenant and the sureties? I entirely agree and would add only this. It has been said that the surety’s obligation is simply that of paying money and, of course, in a sense that is true if one looks only at the remedy which the landlord has against him in the event of default by the tenant. But for my part I do not think that this is a complete analysis. The tenant covenants that he will do or refrain from doing certain things which undoubtedly touch and concern the land. A surety covenants that those things shall be done or not done as the case may be. Now it is true that the remedy for breach will sound in damages only, but the primary obligation is the same, namely that that which is covenanted to be done will be done. Take for instance the tenant’s covenant to repair. There is nothing here requiring personal performance by the tenant. The effect of the covenant is that the tenant must procure the premises to be kept in repair. Equally, a guarantee by the surety of the repairing covenant is no more than a covenant or warranty that the guarantor will procure that the tenant, in turn, procures the premises to be kept in repair. The content of the primary obligation is, as it seems to me, exactly the same and if that of the tenant touches and concerns the land that of the surety must, as it seems to me, equally do so. [page 508] Formulations of definitive tests are always dangerous, but it seems to me that, without claiming to expound an exhaustive guide, the following provides a satisfactory working test for whether, in any given case, a covenant touches and concerns the land. (1) The covenant benefits only the reversioner for the time being, and if separated from

the reversion ceases to be of benefit to the covenantee. (2) The covenant affects the nature, quality, mode of user or value of the land of the reversioner. (3) The covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner nor in respect of the obligations only of a specific tenant). (4) The fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on, to or in relation to the land. For my part, I am entirely satisfied that the decision of the Court of Appeal in Kumar v Dunning [1987] 2 All ER 801, [1987] 3 WLR 1167 was correct and was reached for the correct reasons. The instant case is indistinguishable in any material respect. A similar position was reached by the Victorian Full Court in Lang v Asemo Pty Ltd [1989] VR 773 with respect to the enforcement of a guarantee, the benefit of which had not been expressly assigned, applying P & A Swift Investments v Combined English Stores Group plc. The ‘working test’ as to whether a covenant touches and concerns the land as formulated by Lord Oliver in that case (which is set out above) was adopted: see at [1989] VR 776. In Ryde Joinery Pty Ltd (Administrators appointed) v Zisti (1997) 7 BPR 15,233 the New South Wales Court of Appeal approved of the principles enunciated in P & A Swift Investments v Combined English Stores Group plc and Lang v Asemo Pty Ltd: see also the decision of the Queensland Court of Appeal in Simmons v Lee [1998] 2 Qd R 671. The House of Lords considered the issues again in Coronation Street Industrial Properties Ltd v Ingall Industries plc [1989] 1 WLR 304 (and see All ER Rev 1989 p 190). The specific question raised in that appeal was whether a covenant by a surety to accept a lease replacing a lease which was disclaimed on behalf of an insolvent tenant is a covenant which touches and concerns the land so that the benefit of the covenant runs with the reversion. Lord Templeman, with whom other members of the House agreed, said (at 307): The surety’s obligation to take a new lease after a disclaimer gives effect to the surety’s obligation to procure compliance with the terms of the old lease. In these circumstances, it seems to me that the

considerations which led this House in the Swift Investments case to hold that the covenant by the surety touched and concerned the land apply in equal measure to the whole covenant including the covenant to take a new lease after disclaimer. These decisions should be contrasted with Sacher Investment Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 where the effect of the Conveyancing Act 1919 (NSW) s 12 in these circumstances is considered: see Property Law Act 1974 (Qld) s 199; Law of Property Act 1936 (SA) s 15; Conveyancing and Law of Property Act 1884 (Tas) s 86; Property Law Act 1958 (Vic) s 134; Property Law Act 1969 (WA) s 20. [page 509] It also appears that the right of recourse against a guarantor of the due performance by the tenant of the terms of the lease is not affected as a result of changes in the ownership of the reversion after acceptance of a wrongful repudiation by the tenant: see Nangus Pty Ltd v Charles Donovan Pty Ltd [1989] VR 184 (see [16.26]). This decision of the Victorian Full Court is also authority for the proposition that the entitlement to damages for loss of bargain is not affected by such changes in ownership (see [16.26]). The following covenants by the landlord have been held to touch and concern the land. To renew the lease: Dalton v City Freehold Investment Co Ltd (1888) 9 LR (NSW) Eq 129; Muller v Trafford [1901] 1 Ch 54; followed in Weg Motors Ltd v Hales [1961] Ch 176; Phillips v Mobil Oil Co Ltd [1989] 1 WLR 888; Tenstat Pty Ltd v Permanent Trustee Aust Ltd (1992) 28 NSWLR 625 at 629–30 (per McLelland J); to supply the demised premises with good water: Jourdain v Wilson (1821) 4 B & A 266; 106 ER 935; not to build on adjoining land: Ricketts v Enfield Church Wardens [1909] 1 Ch 544; to appoint and pay a housekeeper to act as the servant of the lessee: Barnes v City of London Real Property Co [1918] 2 Ch 18; to erect a new building in place of an old building: Easterby v Sampson (1830) 6 Bing 644; 130 ER 1429; not to determine a quarterly tenancy during the first three years: Breams Property Investment Co Ltd v Stroulger [1948] 1 All ER 758; [1948] 2 KB 1; to consent to the assignment of the lease: Re Rakita’s Application [1971] Qd R 59; to

carry on the business of a petrol filling station and to purchase the landlord’s products: Cairns Motor Services Ltd v Texaco Ltd [1994] 1 WLR 1249 (but as to a covenant of this type, note the potential operation of the Competition and Consumer Act 2010 (Cth): see Chapter 12). As to tenants’ covenants which have been held to touch and concern the land, see [15.19]. The following covenants by a landlord do not touch and concern the land. To sell the reversion: Woodall v Clifton [1905] 2 Ch 257; [1904–7] All ER Rep 268; Coronation Street Industrial Properties Ltd v Ingall Industries plc [1989] 1 WLR 304; Price v Murray [1970] VR 782 at 785; Phillips v Mobil Oil Co Ltd [1989] 1 WLR 888 (CA) (and see Rossiter, above, at 582–3) or adjoining land: Collison v Lettsom (1815) 6 Taunt 224; 128 ER 1020; to permit the tenant to display an advertising sign: Re No 1 Albemarle St [1959] 1 Ch 531; 1 All ER 250; to pay £500 to the lessee at the end of the term unless a renewal is given and taken: Re Hunter’s Lease [1942] Ch 124; 1 All ER 27; Doe d Solomon v Purves (1846) 1 RJ 38; not to open another beer or spirit house within half a mile of the demised premises: Thomas v Hayward (1869) LR 4 Ex 311; to purchase buildings erected by the lessee: Lee v Close (1870) 10 SCR (NSW) 86; Cheyne v Moses [1919] St R Qd 74, or chattels on the land: Gorton v Gregory (1862) 3 B & S 90; 122 ER 35; to keep in repair a large number of houses in the district: Dewar v Goodman [1909] AC 72; [1908–10] All ER Rep 188; to repay to the tenant a security deposit: Hua Chiao Commercial Bank Ltd v Chiaphua Industries Ltd [1987] AC 99; to take up a lease if existing tenants did not renew and the lessor gave due notice: Showa Shoji [page 510] Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548; an option that enabled the landlord to require the lessee to purchase the demised land: Denham Bros Ltd v W Freestone Leasing Pty Ltd [2004] 1 Qd R 500. Tenants’ covenants which have been held not to touch and concern land are mentioned in [15.19].

Assignee to indemnify lessee [15.21] Although the original lessee remains liable on his or her covenants, notwithstanding an assignment of the term, he or she is entitled to be indemnified by the assignee if he or she pays a debt or discharges an obligation occasioned by a breach of covenant committed while the estate is vested in the assignee: Wolveridge v Steward (1833) 1 C & M 644; 149 ER 557; Murphy v Harris [1924] QSR 187; McMahon v Ambrose [1987] VR 817 at 826; Johnsey Estates Ltd v Lewis & Manley (Engineering) Ltd [1987] 2 EGLR 69. In order to extend this protection to liabilities arising from breaches after a further assignment, it became the practice for the lessee to extract a covenant from his or her immediate assignee whereby the latter became obliged to indemnify the lessee against all future breaches notwithstanding any further assignment. By s 77(1)(c) of the Property Law Act 1958 (Vic) it is now provided that in a conveyance for valuable consideration, other than a mortgage, of the entirety of the land comprised in a lease for the residue of the term or interest created by the lease there shall be implied a covenant by the assignee that the assignee or the persons deriving title under him or her will at all times duly pay the rent and observe and perform the covenants and will indemnify the assignor against any breach: see McMahon v Ambrose, above, at 825; see also Real Property Act 1886 (SA) s 152; Transfer of Land Act 1958 (Vic) s 67(2); Transfer of Land Act 1893 (WA) s 95. It appears that an equitable assignee who, under an agreement to assign, enters and enjoys the premises is liable to indemnify the tenant, if he or she is the immediate assignor, for the period of his or her occupation: Crouch v Tregonning (1872) LR 7 Exch 88 at 93. If a tenant executes a declaration of trust he or she is entitled to be indemnified by the assignee, as trustee, in the usual manner, in respect of any liabilities under the lease: Close v Wilberforce (1838) 1 Beav 112; 48 ER 881; Willson v Leonard (1840) 3 Beav 373; 49 ER 146; and see Nokes v Fish (1857) 3 Drew 735; 61 ER 1084. It appears that these statutory provisions impose an obligation which is additional to the obligation imposed by the general law under the principle enunciated in Moule v Garrett (1872) LR 7 Exch 101 at 104: ‘Where one person is compelled to pay damages by the legal default of another, he is entitled to recover from the person by whose default the damage was

occasioned the sum so paid’. This principle was referred to and applied in Re Healing Research Trustee Co Ltd [1992] 2 All ER 481 at 484–5. It was held that this principle of the general law was not excluded by the [page 511] provisions of s 77 of the Law of Property Act 1925 (UK) (corresponding provisions) on the basis that the legislature had by those provisions dealt exhaustively with an area of law, to the exclusion of general law principles (at [1992] 2 All ER 484–5, referring to Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151, especially at 165–6). The obligations of the original tenant and the assignee are several, not joint. However, it is not a cumulative obligation as payment by one discharges the other. In this context, in Deanplan Ltd v Mahmoud [1993] Ch 151, the question arose whether the release of the assignee, whether by accord and satisfaction or under seal, released the original tenant (and see the discussion of the authorities at 159–61 and following, and the reference to G Williams, Joint Obligations, Butterworth, London, 1949). It was said that a distinction must be drawn between a release and an agreement not to sue, which does not have effect as a release; and that it is a matter of construction of the contract, in light of surrounding circumstances, whether the contract is a release or merely an agreement not to sue. In Deanplan it was held that the agreement was a clear case of accord and satisfaction which would not be construed as reserving rights, or as an agreement not to sue (see also All ER Rev 1992 pp 236–7).

[page 513]

16 Determination of Tenancies Modes of termination [16.1] There are a number of modes of determining tenancies. In Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105, Priestley JA (at 120) noted that Halsbury’s Laws of England, 5th ed, vol 62, [419], p 551 lists 15 methods of determination (including effluxion of time). His Honour continued (at 120–1): These can be grouped in the following way: (1) surrender, which can be by actual agreement between the parties; such surrenders can be express or by operation of law; there are also some surrenders by operation of law which are not the result of agreement between the parties; (2) determination resulting from the operation of or reliance upon the terms of the lease itself — effluxion of time, notice to quit, exercise of an option to determine, operation of a condition subsequent, forfeiture; (3) frustration; (4) determination pursuant to specific statutory grounds; (5) acquisition by the tenant of the reversion-merger. There is now what may be either a sixth way or a new species of surrender: acceptance by a landlord of a tenant’s repudiation of the lease or of his breach of a fundamental term of the lease: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 59 ALJR 373; 57 ALR 609. Not every mode is applicable to every type of tenancy; for example, effluxion of time is a manner of determination appropriate only to tenancies

for a fixed term. It is proposed to discuss only the principal ways in which a lease may be determined. The principal modes of termination are: effluxion of time, operation of condition, exercise of option to determine, merger, surrender, forfeiture, notice to quit, disclaimer and acceptance of repudiation.

‘Waiver’ after termination [16.2] Once a lease has been determined, it cannot be restored to life; in cases where it is suggested that the tenancy still exists, the inquiry is not whether the old tenancy [page 514] has been resuscitated, but whether a new one has been born. For example, a notice to quit will upon its expiration determine a periodic tenancy; after the expiration of the notice the lessor may accept rent from the lessee, and this may prevent the lessor from recovering possession. In these circumstances the lessor is often loosely said to have ‘waived’ the notice to quit; the correct analysis is that a new tenancy has been created: Mitchell v Cummings [1947] VLR 315 at 317; Arnold v Mann (1957) 99 CLR 462; [1957] ALR 1207; Finley v Russell-Jones (1949) 49 SR (NSW) 96 at 101; 66 WN 32 at 35; Baxton v Kara [1982] 1 NSWLR 604 at 609; Longrigg, Burrough & Trounson Smith [1979] 2 EGLR 42 (CA). A licence will not necessarily be ‘revived’ by the acceptance of payments after termination; it depends on the intention of the parties, as derived from what they have said and done and surrounding circumstances: Lewis v Bell (1985) 1 NSWLR 731 at 739; and see Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 138. Similarly, it is correct to say that a forfeiture may be ‘waived’ in the sense that the lessor may elect not to determine the lease upon a cause of forfeiture arising; it is incorrect, however, to speak of the ‘waiver’ of a forfeiture in the sense of a waiver of the rights which have arisen once the landlord had elected to forfeit the lease. In other words, once the landlord has by some unequivocal act, such as commencing an action for the recovery of the land, shown his or her

determination to put an end to the lease, no subsequent act will operate as a ‘waiver’: Jones v Carter (1846) 15 M & W 718; 115 ER 1040; Grimwood v Moss (1872) LR 7 CP 360; Thorburn v Buchanan (1871) 2 VR (L) 169; Wintergarden Theatre Ltd v Baxter & Webb [1929] QWN 6; Hinton v Fawcett [1957] SASR 213; and see Billson v Residential Apartments Ltd [1992] 1 AC 494 at 534. Accordingly, if, for example, a landlord who has forfeited the lease by commencing an action for the recovery of the land subsequently accepts rent from the tenant, the question will be, not whether the forfeiture has been ‘waived’, but whether a new tenancy has been created by implication: Evans v Wyatt (1880) 43 LT 176; 44 JP 767; see further [17.18].

Effect on subleases [16.3] The effect of the determination of the head lease on a sublease depends upon the mode of determination; though the general rule at common law is that when the head lease comes to an end any sublease derived out of it also automatically and simultaneously comes to an end: see Pennell v Payne [1995] QB 192 (CA); Barrett v Morgan [2002] 2 AC 264 per Lord Millett at 274; PW & Milton Gate Investments (BT Property, Pt 20 defendants) [2004] 2 WLR 443. In PW & Milton Gate Investments Neuberger J held that it was not possible for the head lessor and the lessor to contract out of the general rule. A sublease is brought to an end upon the determination of the head lease by effluxion of time (Weller v Spiers (1872) 26 LT 866; 20 WR 772); and forfeiture (Great Western Railway Co v Smith (1876) 2 Ch D 235 at 253); see also [17.16], on notice to quit given by the landlord (Metropolitan [page 515] Trade Finance Co Pty Ltd v Coumbis (1973) 2 ALR 258); and see Pennell v Payne at 197 and following as authority for all these particular propositions. However, where the head lease is surrendered or merges in the reversion, the rights of the sublessee are not affected: Fleeton v Fitzgerald [1998] 9 BPR 16,715; Cihan v Oncu [2004] 11 BPR 21,653; Wilson v Jolly (1948) 48 SR

(NSW) 460; Pleasant v Benson (1811) 14 East 234; 104 ER 590; Pike v Eyre (1829) 9 B & C 909; 109 ER 338; Spicer v Martin (1888) 14 App Cas 12 at 23; [1886–90] All ER Rep 461; Parker v Jones [1910] 2 KB 32; Wilkes v Spooner [1911] 2 KB 473; Slough Picture Hall Co Ltd v Wade (1916) 32 TLR 542; Andrews v Hogan (1952) 86 CLR 223; [1952] ALR 601; Evans v Barboutis [1957] VR 35; Fairweather v St Marylebone Property Co Ltd [1963] AC 510 (HL) at 546; [1962] 2 All ER 288; Pacific Loan & Finance Pty Ltd v Litmanowicz [1960] NSWR 805; 78 WN (NSW) 459 at 461; Pennell v Payne; see also M Watt, ‘More about Notices to Quit’ (1960) 24 Conveyancer and Property Lawyer 130 at 142–3. At common law the surrender or merger of a lease destroyed the covenants and the sublessee was freed from the obligation to pay rent or to observe the covenants of the sublease. This was because they were incident to the reversion which had disappeared: Webb v Russell (1789) 3 Term Rep 393; 100 ER 639; see also Fairweather v St Marylebone Property Co Ltd [1963] AC 510 at 546; [1962] 2 All ER 288 and Pennell v Payne at 197 (referring particularly to St Marylebone Property Co at [1963] AC 546 and [1962] 2 All ER 288 at 289), to the same effect. The Property Law Act 1958 (Vic) s 139 (see Conveyancing Act 1919 (NSW) s 122; Conveyancing and Law of Property Act 1884 (Tas) s 82; and the English Law of Property Act 1925 s 139) now brings the head lessor and the sublessee into direct relationship on the terms of the old sublease (when a surrender or a merger of the head lease occurs). This section applies to a parol surrender: Plummer v David [1920] 1 KB 326; Richardson v Landecker (1950) 50 SR (NSW) 250. Section 150 of the Victorian Act deals with the case where the head lease is surrendered in return for a new lease: see Conveyancing Act 1919 (NSW) s 121. By that section a surrender for the purpose of renewal may be made without the necessity for the surrender of the underleases, but the surrender leaves untouched the subinterest; the effect of a new demise of the original term is to make the new lessee the assignee of the reversion on the term granted by the surrenderor: Cousins v Phillips (1865) 2 H & C 892; 159 ER 786; Plummer & John v David [1920] 1 KB 326. Surrender and merger are discussed below. The exercise of an option by a sublessee under a sublease after the surrender of the head lease is ineffective as against the head lessor: Cihan v Oncu. The

Conveyancing Act 1919 (NSW) s 122 does not assist the sublessee in such circumstances: Cihan v Oncu. An interesting question is whether notice to quit given by the tenant determines a sublease. In Brown v Wilson (1949) 93 Sol Jo 640, Hilbery J enunciated the proposition that a tenant cannot by his or her own voluntary act in putting an end to his or her [page 516] own tenancy destroy or impair the interest which he or she has granted to his or her subtenant, and went on to hold that this proposition applied not only to a surrender, but also to a notice to quit given by the tenant. This decision is discussed by M Watt, ‘More about Notices to Quit’ (1960) 24 Conveyancer and Property Lawyer 130 at 142–3, where it is said to be correct; on the other hand, Foa on Landlord and Tenant, 8th ed, p 832, regards it as wrong in principle. The question whether notice to quit by the tenant has the effect of determining a subtenancy was raised in Pacific Loan & Finance Pty Ltd v Litmanowicz, but McClemens J found it unnecessary to express any opinion on the matter. Clarke v Watson [1943] VLR 81 is a case which at first sight might be thought to bear on the question now under consideration; in fact, the decision is of no assistance, since the head tenancy had been determined, not by the giving of notice to quit by the tenant, but by surrender. In Adamson v Busch [1955] VLR 450 at 452, Herring CJ accepted the view that a notice to quit given by the tenant had the effect not only of determining that person’s tenancy, but also of enabling the landlord to recover possession from subtenants. More recently the English Court of Appeal in Pennell v Payne considered the authorities in this respect (see [1995] QB 192 at 198–203) and reached the same general position as Adamson v Busch, expressly overruling Brown v Wilson. In answer to the submission that this position would invite collusion between landlords and tenants to circumvent tenancy protection legislation, Simon Brown LJ (with whom the other members of the court agreed) observed that this was unlikely as service of a notice to quit by the tenant would leave it liable in damages for breach of the covenant for quiet enjoyment under the sublease (though it was conceded that the value of this

right depended on the financial state of the tenant): see at 201. Further, it was said that were the result not to be the destruction of the subtenancy it would be possible for a tenant to foist an unwelcome subtenant on the landlord, possibly in most disadvantageous circumstances — such as where the tenant had sublet at an initial premium, with low or nominal rent payable under a subtenancy for a long term: see at 202 (per Simon Brown LJ). Further, in the absence of some legislative equivalent to s 139 of the 1925 English Act applicable beyond surrender or merger (the limits of its present operation, which would not include a notice to quit by the tenant against the wishes of the landlord) even this low or nominal rent would not be recoverable by the landlord and the landlord would not have the benefit of any of the other subtenant’s covenants: Pennell v Payne at 202. As to the effect of a surrender of mortgaged leaseholds, see [16.11].

Effect on power of attorney [16.4] Whether the effect of the determination of a lease of a hotel was to bring to an end the power of attorney contained in the lease was considered by Gowans J in R v Victorian Licensing Court; Ex parte Beggs [1964] VR 48. [page 517]

Effluxion of time [16.5] Where a lease is granted for a fixed term, the lease comes to an end upon the expiration of the last day of the term. A not uncommon misconception, probably resulting from the long-standing statutory requirement of a notice to quit to determine all tenancies of ‘prescribed premises’, is that at common law a notice to quit is necessary notwithstanding that the term of the lease has expired. In fact, the term ends by effluxion of time without the necessity for any act on the part of the lessor: Cobb v Stokes (1807) 8 East 358; 103 ER 380; see also [2.3]. A sublease similarly comes to an end upon the expiration of the head lease:

Weller v Spiers (1872) 26 LT 866; 20 WR 772.

Operation of condition [16.6] A lease may be determined by the operation of a condition. Such cases, where the lease is by its terms to determine automatically upon the occurrence or non-occurrence of a certain event, are to be distinguished from cases where the landlord is entitled, if he or she so elects, to forfeit the lease for breach of condition or covenant or by reason of some other cause of forfeiture. In Doe d Lockwood v Clarke (1807) 8 East 183; 103 ER 313 a farm was leased to Thomas Clarke for 21 years, if the tenant should so long continue to inhabit the farmhouse and occupy the lands. Clarke ceased to dwell in the farmhouse and to have the actual occupation of the farm. In ejectment proceedings it was contended that the case was one of forfeiture for a condition broken and that the lessor should have re-entered before he brought his ejectment. This argument was rejected, Lawrence J saying (103 ER 313 at 313): If this had been a question of forfeiture, there might have been something in the objection; but here the term itself is made to continue and depend upon the personal occupation of the lessee. It is like the case of a lease for 21 years, if the lessee shall so long live; there if he die before the 21 years run out, there is an end of the term. Here the lease in effect is for 21 years if Thomas Clarke shall so long live in the house. Then if he has ceased to live there, from whatever cause, the condition on which the term was made to determine has happened, and there is an end of his interest in the premises. It has been pointed out that the defence taken in this case was on any view a bad one, since the bringing of the action of ejectment was itself equivalent to re-entry; accordingly, even if re-entry was required, the requirement had been fulfilled. See the article by F R Crane, ‘Automatic Determination of Leases’ (1963) 27 Conveyancer and Property Lawyer 111 at 118. The learned author also discusses the question whether the authorities support the existence of the mode of determination now under discussion.

[page 518] It is not uncommon for a lease to be terminable at the option of either party on the total or partial destruction of the leased premises, but the nature and extent of operation of any such provision is a matter of construction of the provisions of the lease, as a whole: see Re Precision Street Industrial Property Pty Ltd [1994] 2 Qd R 614. In that case the lease was terminable at the option of either party in the event that the leased premises were ‘totally destroyed’. It was held that these words as used in the lease had their ordinary meaning.

Exercise of option to determine — break clauses [16.7] A lease for a fixed term may contain a provision enabling the lessor, or the lessee, or either of them, to determine the lease by the giving of notice, often at the end of a certain number of years of the term. In Mannai Investment v Eagle Star Life Assurance Co [1997] AC 749; 2 WLR 945 the House of Lords had to consider the validity of notices served by a tenant that purported to terminate a fixed term tenancy. The tenant had wrongly described the date of termination as 12 January 1995 when the correct date was 13 January 1995. The Court of Appeal held that the notices were invalid. The Lords held that the construction of the notices had to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context; that the purpose of the notices was to inform the landlord of the tenant’s decision to determine the leases in accordance with the break clauses. Lord Steyn said (at [1997] AC 768]): ‘… the question is simply how the reasonable recipient would have understood such a notice’; Lord Clyde said (at [1997] AC 782]) that ‘the standard of reference is that of the reasonable man exercising his common sense in the context and in the circumstances of the particular case’. The Lords held that a reasonable recipient with knowledge of the terms of the leases would have been left in no doubt that the tenant wished to determine the leases on the date provided for in the lease but had wrongly described the date and that, accordingly, the notices were effective to determine the leases. Because of the potentially serious consequences of a termination of the lease

the question sometimes arises whether the power to terminate is subject to an implied obligation to act reasonably. In McIntosh v Dylcote Pty Ltd (1999) 9 BPR 16,805 the court had to consider a clause in a lease that permitted a party to terminate the lease without compensation ‘[i]f the whole or any part of the Building shall be destroyed or damaged by fire flood lightning storm tempest or other disabling cause so as to render the Demised Premises during the Term substantially unfit for the use and occupation of the Lessee or so as to render the rebuilding or reconstruction of the Building in its previous form impracticable or undesirable, in the opinion of the Lessor …’. Bryson J held that it was: … an implied obligation of the lessor to act reasonably in forming an opinion on the undesirability of reconstruction, and it is an implied obligation of each party to act reasonably in terminating the lease. Unless facts objectively exist in which it is reasonable [page 519] to conclude that reconstruction is undesirable, an opinion that it was undesirable would not have any contractual effect. In an endeavour to articulate what is required by the test of reasonableness when it is to be applied to a decision to terminate under the lease, I will say that it requires proportionality between the outcome of termination without compensation and the nature of the underlying problem. The calculation of time is considered with respect to the termination of periodic tenancies in [20.2].

Merger [16.8] A person cannot be, at the same time, both landlord and tenant of the same premises; for as soon as the tenancy and the reversion are in the same hands the tenancy is merged — that is, sunk or drowned, in the reversion: Rye v Rye [1962] AC 496 at 513; 1 All ER 146; and see generally Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd [1991] 2 VR 214; E Tyler, P

Young and C Croft, Fisher and Lightwood’s Law of Mortgage, 3rd Australian ed, LexisNexis Butterworths, Sydney, 2014, Ch 36. At law, two requirements must be satisfied before a merger will occur. In the first place, the term and the reversion must be vested in the same person without any intervening estate, however short: Burton v Barclay (1831) 7 Bing 745; [1824–34] All ER Rep 437; 131 ER 288. In the second place, the term and the reversion must be held by that person in the same right: Chambers v Kingham (1878) 10 Ch D 743; Herman v Gill (1921) 24 WALR 10. Equity, on the other hand, did not view the doctrine of merger with favour, and in many cases refused to treat as merged a term which in the view of the courts of common law had been destroyed by merger: Chambers v Kingham. In Capital and Counties Bank v Rhodes [1903] 1 Ch 631 (CA) at 652 Cozens-Hardy LJ said: Now, as to the first question, there was prior to the Judicature Act 1873, a great difference between the courts of law and the courts of equity on the subject of merger. The rule of the former was rigid, that whenever a term of years and a freehold estate, whether for life or in fee, immediately expectant upon the term, vested in the same person in his own right, the term was merged in the freehold, whatever may have been the intention of the parties to the transaction which resulted in the union. The courts of equity, on the other hand, in many cases treated the interest which merged at law as being still subsisting in equity. They had regard to the intention of the parties, and, in the absence of any direct evidence of intention, they presumed that merger was not intended, if it was to the interest of the party, or only consistent with the duty of the party, that merger should not take place. See also Budget Rent-a-Car System Pty Ltd v B S Stillwell & Co Pty Ltd (1989) V ConvR ¶54-336; on appeal [1990] VR 589. It was enacted in Victoria, by the Judicature Act 1883 s 9 (re-enacting the English Judicature Act 1873 (36 & 37 Vict c 66) s 25(4)), that there should not be any merger by operation of law only of any estate, the beneficial interest in which would not be [page 520]

deemed to be merged or extinguished in equity. This provision is now to be found in the Property Law Act 1958 (Vic) s 185: see Conveyancing Act 1919 (NSW) s 10; Judicature Act 1876 (Qld) s 5(4); Law of Property Act 1936 (SA) s 13; Supreme Court Civil Procedure Act 1932 (Tas) s 11(4); Property Law Act 1969 (WA) s 18. Its result is that, if the circumstances are such that a court of equity would have held that there was no merger, there is now no merger at law. The emphasis nowadays is on intention: see, for example, Pallos v Munro (1970) 72 SR (NSW) 507; Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd. Evidence of intention may be direct or inferred from circumstances and parol evidence may be admitted: Astley v Miller (1827) 1 Sim 298 at 345; 57 ER 588 at 606; and see Tyler, Young and Croft, above, para [36.6]. Where the evidence is neutral or there is no evidence of conduct or acts of the owner of the estate, the course most beneficial to the owner will be the presumed intent: Liquidation Estates Purchase Co v Willoughby [1896] 1 Ch 726; and see Tyler, Young and Croft, above, paras [36.7] and [36.8].

Merger and registered leases [16.9] The question arises whether the doctrine of merger applies to a registered lease of land under the operation of the Torrens system. In Bevan v Dobson (1906) 26 NZLR 69, the registered leasehold interest was subject to a registered mortgage; the lessee agreed to purchase the fee simple, and Stout CJ expressed the opinion that the purchase of the freehold would not have the consequence that the rights of the mortgagee would be destroyed, saying: There is nothing in the Land Transfer Act declaring that a registered lease merges upon the lessee becoming the registered proprietor of the land previously leased to him. That is a rule of law, and the rule of equity is, as I have said, that the mortgage over the lease is not destroyed by its merger in law. Our law is that equity prevails, and I see no reason for assuming that the rule of equity does not prevail in this transaction. Whether this passage is to be regarded as containing an expression of opinion that the doctrine of merger does not apply to a registered lease is not clear, particularly having regard to the distinction, discussed in [16.8], between

merger at law and merger in equity. The question whether the old law of merger applies to registered leasehold interests was further considered in Lewis v Keene (1936) 36 SR (NSW) 493; 53 WN (NSW) 17; but in Shell Co of Australia v Zanelli [1973] 1 NSWLR 216 (CA) the correctness of this decision was doubted where both the freehold and leasehold estates are of Torrens land. In English, Scottish & Australian Bank Ltd v Phillips (1937) 57 CLR 302, the High Court considered whether the mortgage might become merged in the fee simple in the case of land under the operation of the Act. A distinction was drawn between a mortgage under the Torrens system, which was the creature of statute, and a term of years. Dixon, Evatt and McTiernan JJ said (at 323–4): [page 521] A term of years is an interest existing apart from the provisions of the statute and its qualities are defined by the general law, subject, however, to the statute. The system does not make the determination of the term dependent, in all cases, on registration, and it is possible that its determination by merger remains allowable. Upon this we express no opinion. But we do not think that it is the case with mortgages. More recently the High Court has considered the question in Cooper v Federal Commissioner of Taxation (1958) 100 CLR 131; 7 AITR 333. Dixon CJ, Fullagar and Taylor JJ expressed the opinion (at 142) that the view that a registered leasehold interest does not merge at law, so long as it remains registered as a separate estate or interest, appears to conform better with the Torrens system: see Shell Co of Australia v Zanelli; R Woodman and K Nettle, The Torrens System in New South Wales, Law Book Co, Sydney, 1996, p 461; see also S Robinson, Transfer of Land in Victoria, Law Book Co, Sydney, 1979, pp 83–6. Generally, see Pascon Pty Ltd v San Marco in Lamis Cooperative Social Club Ltd [1991] 2 VR 227; and Tyler, Young and Croft, above, para [36.17].

Merger and subleases

[16.10] If the head lease merges in the reversion, the rights of a sublessee are not affected. Formerly, the destruction in this way of the reversion, although it did not disturb the sublessee’s rights, liberated him or her from his or her obligation to pay rent or to observe the covenants of the sublease, since these were incident to the reversion which had disappeared. But by the Property Law Act 1958 (Vic) s 139 (see Conveyancing Act 1919 (NSW) s 122; Conveyancing and Property Law Act 1884 (Tas) s 82) it is now provided that, where the reversion expectant on a lease of land is merged, the estate which confers as against the tenant the next vested right to the land shall be deemed the reversion expectant on the lease for the purpose of preserving the same incidents and obligations as would have affected the original reversion had there been no merger thereof: see Wilson v Jolly (1948) 48 SR (NSW) 460; [16.3].

Surrender [16.11] We have seen that a lease has two aspects; it is both a contract and something which creates an estate or interest in land: see [1.2]. Just as a lease involves a contract and the creation of an estate in land, so a surrender involves a contract and the reconveyance of that estate: Robinson v Kingsmill (1954) 71 WN (NSW) 127 at 133; and see Pascoe Webbe v Nusuna Pty Ltd (1985) 3 BPR 97,231; Take Harvest Ltd v Liu [1993] AC 552. A surrender is a yielding up of the estate to the immediate reversioner. Not only a lease for a fixed term, but also a periodic tenancy can be determined by surrender: Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1. A tenancy at will, on the other hand, can be abandoned, but not surrendered, for there is no term to surrender: see Chelsea Investments. Mutual agreement is necessary before a surrender can take place. Windeyer J said (at 115 CLR 5): [page 522] A surrender by deed of a particular estate of freehold becomes effective

at once and does not await formal acceptance: Thompson v Leach (1698) 2 Salk 618; Show PC 150; [1558–1774] All ER Rep 39. But this of course is not so of a leasehold. A lessee can not at will divest himself of a lease. His landlord’s assent is required, except in the case of a tenancy at will. A surrender operates by merger of the reconveyed estate in the reversion, not by assignment: Chelsea Investments, above; Fairweather v St Marylebone Property Co Ltd [1963] AC 510; [1962] 2 All ER 288. Denning MR said (at 546): ‘… a surrender operates as a determination of the term’. The surrender of a term may be either express or implied. Implied surrender is often called surrender by operation of law. A surrender of a lease can be effected only by the owner of the term to the owner of the reversion: Andrews v Hogan (1952) 86 CLR 223 at 250; [1952] ALR 601. The dual aspects of a lease should not be overlooked and consideration should be given to the effect of a surrender on the contractual relationship between the parties. In Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 Samuels JA commented (at 118): I accept that the same act may evidence both the acceptance of a repudiation of the tenant’s obligations under a lease and a surrender of the term. In Progressive Mailing [Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 59 ALJR 373; 57 ALR 609] Brennan J said (at 386–7; 632): Acceptance of a surrender by a lessee who has repudiated a lease is at once an acceptance of the repudiation and a determination of the lessee’s interest in the land. Where the lessee repudiates but does not give up possession, a lessor’s acceptance must take some other form. This passage recognises the dual aspects of a lease pointed out by Brennan J in Progressive Mailing (at 383; 626) and by Deane J (at 388; 634). In Buchanan v Byrnes (1906) 3 CLR 704 there was much discussion as to whether the lease was surrendered when the lessor reentered, or only later when he re-let the premises. Griffith CJ (at 714) found the question unnecessary to determine because, whenever the surrender took place, it was after the breach of covenant to carry on

the hotel: see also (at 721 and 723) per O’Connor J. In Hughes v NLS Pty Ltd [1966] WAR 100 Jackson J (at 102) distinguished between the repudiation and abandonment of the whole contract and the subsequent surrender of the lease. It is probably clear without pursuing the point further that, although a lessor by re-entry or re-letting may accept both a repudiation and a proposal to surrender, the two transactions remain separate acts in the law. An unsuccessful attempt to exercise the powers of determination under the terms of the lease does not preclude a finding that the tenant has by its conduct surrendered the term or repudiated the lease: Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 at 90 (SC, ACT, per Higgins J). A surrender of mortgaged leaseholds does not extinguish the mortgagee’s interest and the mortgagee will thereupon be entitled to possession: Ushers Brewery Ltd v P S King & Co (Finance) Ltd (1969) 113 Sol Jo 815; E S Schwab & Co Ltd v McCarthy [page 523] (1975) 31 P & CR 196 at 209. See also London & County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764; and Rhodes v Allied Dunbar Pension Services Ltd [1989] 1 WLR 800. See Tyler, Young and Croft, 2005, para [37.8] and, as to the nature of mortgages of leases, see [3.3]. Acceptance of repudiation is considered below, in [16.26]. See also M Slatter, ‘So hard to surrender’ [1993] NZLJ 358 (I), 435 (II), with particular reference to Take Harvest Ltd v Liu; and see [16.17], surrender by operation of law.

Express surrender [16.12] The form of an express surrender is governed by the Property Law Act 1958 (Vic) ss 52–54: the corresponding provisions in the other states are

Conveyancing Act 1919 (NSW) ss 23B–23D; Property Law Act 1974 (Qld) ss 10–12; Law of Property Act 1936 (SA) ss 28–30; Conveyancing and Law of Property Act 1884 (Tas) s 60(1)–(4), which are generally in similar terms; Property Law Act 1969 (WA) ss 33–35 (and see [1.6], [15.17]); with respect to registered leases see the Real Property Act 1900 (NSW) s 54. Somewhat surprisingly, doubt exists as to the effect of a surrender other than by deed. The question is whether legal surrender of a lease is possible other than by deed. By s 52(1), all conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed (NSW and Qld: ‘… no assurance of land shall be valid’, rather than ‘void’). By subs (2) the section shall not apply to ‘(c) surrenders by operation of law, including surrenders which may, by law, be effected without writing’: NSW s 23B(2)(c); Qld s 10(2)(b); SA s 28(2)(c); Tas s 60(1)(c); WA s 33(2)(c). Section 53(1)(a) provides that, subject to the subsequent provisions with respect to the creation of interests in land by parol, no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his or her agent thereunto lawfully authorised in writing, or by will, or by operation of law. By s 54(2), nothing in the foregoing provisions of the Division shall affect the creation by parol of leases taking effect in possession for a term not exceeding three years at the best rent which can be reasonably obtained without taking a fine. The same analysis applies to the corresponding provisions of the other states. In Ferguson v Hullock [1955] VLR 202 at 205, Gavan Duffy J thought it clear that the effect of s 52 was to make a deed necessary for legal surrender. Moreover, his Honour appears to have taken the view that a deed was necessary for a legal surrender whatever the nature of the tenancy. Similarly, Foa on Landlord and Tenant, 8th ed, p 623, states that the consequence of s 52 is that an express surrender must be by deed even in the case of a lease not created by a written instrument, although a surrender not by deed, while void as a surrender, may be valid as an agreement to surrender. Foa does not in terms deal with the question whether a surrender not by deed which takes [page 524]

effect as an agreement to surrender is good only in equity. According to B Helmore, The Law of Real Property in New South Wales, Law Book Co, Sydney, 1966, p 292, dealing with the provisions of the Conveyancing Act of New South Wales, an express surrender at law must be by deed, but a surrender for value, evidenced in writing or accompanied by part performance, is good in equity. The law as stated by Woodfall on Landlord and Tenant, looseleaf, para 17.009, is that every express surrender must be by deed including surrenders of leases for a term not exceeding three years which fall within s 54(2). Woodfall does not distinguish between surrender at law and surrender in equity, and is presumably speaking of a legal surrender. Hill and Redman on Landlord and Tenant, looseleaf, para 2099, contrary to Woodfall suggested that mere writing will suffice for a term not exceeding three years, once again evidently speaking of legal surrender. As to the requirement that an agreement for surrender must comply with the (Hong Kong) equivalent of the Statute of Frauds 1677 s 4, see Take Harvest Ltd v Liu; and see [16.13]. The Hong Kong provisions considered in Take Harvest also included provisions similar to ss 52–54 of the Victorian Property Law Act, but attention was directed primarily to the Statute of Frauds provision: and see [1.6] and [4.3]. In considering whether a document signed by an officer of the tenant purporting to surrender a lease is effective, consideration may need to be given to the Corporations Act 2001 ss 126 and 127. Section 127(1) provides that a company may execute a document without using its common seal if it were signed by two directors, or a director and a company secretary, or a sole director who was also the sole company secretary. Section 127(4) provides that the section did not limit the ways in which a company might execute a document. Section 126(1) provides that a company’s power to make, vary, ratify, or discharge a contract might be exercised by an individual acting with the company’s express or implied authority and on behalf of the company. In Indian Taj Pty Ltd (in liq) v Gilany [2005] ANZ ConvR 310 the court had to consider whether a notice purporting to surrender the lease and signed by one of the tenant’s two directors was effective to surrender the lease when combined with the service of a notice by the landlord purporting to terminate the lease. The court held that the tenant’s notice was not valid because the notice did not comply with s 127 and there was no ratification pursuant to s

126 and also that the Real Property Act 1900 (NSW) s 54 provided a specific method to effect a surrender.

Surrender at law and in equity [16.13] So far as surrender in equity is concerned, it is thought that the same position obtains as in relation to assignments which are not good as legal assignments having regard to the provisions of ss 52–54 (for corresponding provisions in states other than Victoria, see [16.12]). For a legal assignment, a deed is necessary except in [page 525] the case of an assignment of a lease for a term not exceeding three years at the best rent which can be reasonably obtained without taking a fine, which (on one view of the law) may be assigned by writing: see [15.17]. Equity will give effect to an assignment which is not a good legal assignment provided that there is an agreement to assign which is either evidenced in writing or supported by part performance: Milne v Lahz (1951) 52 SR (NSW) 30; Shaw v Port [1953] VLR 386; Ferguson v Hullock [1955] VLR 202; Colman v Golder [1957] VR 196. In the same way, if there is a surrender which is bad at law, equity will, provided that there is either sufficient written evidence or part performance, treat the surrender as a contract to surrender and give effect to it: and see Take Harvest Ltd v Liu at 571–2 where an oral agreement for surrender was rendered unenforceable by the Hong Kong equivalent of the Statute of Frauds 1677 s 4. It appears that issues of part performance and estoppel were only finally raised in the Privy Council appeal; the issue of part performance was dealt with briefly at 571–2; and see [16.18]. The doubt which exists in relation to what will constitute a surrender relates not to what will be a good surrender in equity, but to what is necessary to constitute a good surrender at law. The question is whether, for there to be a legal surrender, a deed is essential; the contrary view is that, while a deed is in general essential, mere writing will suffice in the case of a lease for a term

not exceeding three years which falls within s 54(2). The view that a deed is in all cases essential was expressed by Gavan Duffy J in Ferguson v Hullock [1955] VLR 202 at 205, and by McLelland CJ in equity and the Full Court of New South Wales in Zorbas v McNamara [1960] NSWR 428; 77 WN (NSW) 561; affirmed [1962] NSWR 53; 79 WN (NSW) 52; and this would appear to be the view of McGarvie J in McMahon v Ambrose [1987] VR 817 at 823: see [15.17]. On the other hand, in Bateman v Tsaoucis [1960] NSWR 471; 77 WN (NSW) 435 at 438, the Full Court of New South Wales observed that an express surrender must be in writing. The court was there concerned with a weekly tenancy. This decision supports the view that mere writing will suffice for a legal surrender of a lease falling within s 54(2).

Statutory provisions [16.14] The provisions of the Property Law Act 1958 (Vic) (and equivalents, see [16.12]) leave room for doubt on the question whether a legal surrender may ever be effected by mere writing. First there is s 52(1), whereby all conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed. Although surrender operates by way of merger (Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1 at 9; 10 AITR 52; Fairweather v St Marylebone Property Co Ltd [1963] AC 510 at 546; [1962] 2 All ER 288), a surrender nonetheless involves the reconveyance of an estate to the landlord: Robinson v Kingsmill (1954) 71 WN (NSW) 127 at 133. Accordingly, s 52(1) applies to express surrenders. [page 526] By subs (2)(c) the section is not to affect ‘surrender by operation of law, including surrenders which may, by law, be effected without writing’. This is the provision which occasions the difficulty. We are not here concerned with surrenders by operation of law (as to which, see [16.17]–[16.21]), and the question is that of the effect of the words which save surrenders which may by

law be effected without writing. In an interesting article, ‘Surrender of lease’, in (1935) 8 ALJ 441 it is suggested that these words refer to the common law and that at common law a lease which may be granted without writing may be surrendered without writing. Leases which may be created without writing are now those which fall within s 54(2), and the author of the article referred to suggests that at first sight the effect of the exclusion from the operation of s 52 of surrenders which may by law be effected without writing is to enable leases which fall within s 54(2) to be surrendered orally. The learned author goes on to point out, however, that a difficulty is presented by s 53(1)(a) whereby, subject to the provisions with respect to the creation of interests in land by parol, no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his or her agent thereunto lawfully authorised in writing, or by will, or by operation of law. A surrender of a lease is a disposition or conveyance of an interest in land, so that s 53(1)(a) applies to surrenders; but if this provision applies to surrenders, it is inconsistent with s 52(2)(c), which refers to surrenders which may by law be effected without writing. If the effect of s 53(1)(a) is that every express surrender must be by writing, then the effect of s 52(1) is that it must also be by deed. This result cannot be avoided by reference to the introductory words of s 53(1), for these words are concerned only with the creation of interests in land by parol, not with the reconveyance of an interest which has earlier been created. The author of the learned article in the Australian Law Journal puts forward as a possible explanation of the apparent inconsistency between s 52(2)(c) and s 53(1)(a) that there may have been an accidental omission in the drafting of the former provision consisting of the omission of the words ‘of a lease’ after the word ‘surrenders’ where it occurs a second time; as to this, however, the author observes that the word ‘effected’ is more appropriate to describe the surrender than the creation of the lease. Reference should be made to the editor’s note in (1960) 34 ALJ 212, the article by H W Tebbutt, ‘Surrenders and Assignments of Leases —Is a Deed Necessary?’ (1961) 34 ALJ 353, and the editor’s note in (1962) 35 ALJ 383. In 34 ALJ at 355, Tebbutt raises the question whether, having regard to the difficulty of distinguishing between the case of an assignment and the case of a surrender, it is possible to reconcile Milne v Lahz (1951) 52 SR (NSW) 30 with Zorbas v McNamara [1962] NSWR 53; 79 WN (NSW) 52: see [15.17], [16.13]. Zorbas v McNamara was applied in Chronopoulos v Caltex Oil (Australia)

Pty Ltd (1982) 45 ALR 481 (FC). Fox J reviewed the New South Wales provisions, drawing no distinction between a surrender and an assignment (at 488): In my view, the assignment, not being by deed, was not valid at law. It is submitted that a deed is not necessary. Certainly writing is (Conveyancing Act 1919 as amended, [page 527] s 23C(1)(a)). At common law a deed was necessary for the assignment of a lease. Section 23A(1) of the Conveyancing Act states ‘no assurance of land shall be valid to pass an interest in law unless made by deed’. Su-bsection (3) states: ‘This section does not apply to land under the provisions of the Real Property Act 1900’. Section 7(1) provides that, unless the context or subject-matter indicates or requires, ‘land under the provisions of the Real Property Act 1900, or any equivalent expression, means estates registered under that Act’. It is difficult to see why, as a matter of statutory construction, s 23B(1) should not apply where the particular interest or estate in land is not registered under the Real Property Act. ‘Land’ is widely defined in s 7(1), as is ‘assurance’, which includes a ‘conveyance’. It does not seem permissible, or even sensible, to construe ‘land’ in s 23H(3) as confined to the fee simple in land. Commentators have taken the view that a deed is necessary (see Tebbutt, 34 ALJ 353; Vrisakis, 35 ALJ 353; Lang, Leases and Tenants in New South Wales, at 221–2). It is established that a surrender (otherwise than by operation of law) of a lease not registered under the Real Property Act, although of land under that Act, must be by deed (Zorbas v McNamara [1962] SR (NSW) 159; Lang, op cit, at 222). For relevant purposes there seems no proper or logical basis for a distinction between a surrender and an assignment. This reaffirms Tebbutt’s view that the critical point in seeking to reconcile Milne v Lahz and Zorbas v McNamara is that s 23B(3) only applies in the case of

an assignment or surrender of lease where the lease is itself registered under the Act: see 34 ALJ at 354. An agreement for surrender must comply with the equivalent of the Statute of Frauds 1677 s 4: see Take Harvest Ltd v Liu. Furthermore, reliance cannot be placed on an agreement rendered unenforceable by reason of failure to comply with requirements of provision of this kind by way of defence where this is, in substance, to seek to enforce the agreement (at 471); and see [16.13].

Future surrenders [16.15] It is commonly-said that an express surrender cannot be made to take effect in futuro: see, for example, Woodfall on Landlord and Tenant, looseleaf, para 17,001; Foa on Landlord and Tenant, 8th ed, p 627; Halsbury, vol 62, [521] p 595. The authority usually cited for this proposition is Doe d Murrell v Milward (1838) 3 M & W 328; 150 ER 1170, where Parke B expressed himself to be very strongly of the opinion that there could not be a surrender to take place in futuro. The case of Weddall v Capes (1836) 1 M & W 50; 150 ER 341 has the distinction of being relied upon both by those who hold the view that a surrender must take effect at once and those who are of the contrary opinion. The lastmentioned decision was referred to in argument in Badeley v Vigurs (1854) 4 El & Bl 71 at 79; 119 ER 28. In the unreported case of Parker v Briggs, noted in (1893) 37 Sol Jo 452, the Court of Appeal refused to adopt the dictum of Parke B that a surrender to take effect on a future date was invalid. In New South Wales the view appears to have been taken that surrender to operate in futuro is good: Union Trustee Co of Australia Ltd v Baker (1948) 65 WN (NSW) 247. The question has arisen in Victoria in circumstances in which it [page 528] did not require to be answered: McDonald v Jane [1960] VR 184 at 189–90. It appears that the Privy Council in Take Harvest Ltd v Liu [1993] AC 552 was of the opinion that an oral agreement for surrender at a future date was valid,

though unenforceable by reason of the provisions of the Hong Kong equivalent of the Statute of Frauds 1677 s 4, subject to further issues being raised with respect to part performance and estoppel.

Surrender by one tenant [16.16] One of two joint tenant–lessees cannot, in the absence of express words or authority, alone surrender the term: Leek & Moorlands Building Society v Clark [1952] 2 QB 788; 2 All ER 492; but compare D Mendes Da Costa, ‘Co-ownership under Victorian Land Law’ (1961) 3 MULR 137, 306 and 433 at 322 (having referred to this case as authority for this proposition): One joint tenant–lessee can clearly assign his interest to the lessor and it may be that likewise he can surrender his interest, a partial merger of the term resulting, and the lessor and the surviving joint tenant–lessee becoming tenants in common, the former by virtue of his fee simple estate to which a right to immediate possession now attaches and the latter by virtue of his interest in the term initially granted. See also [5.15] as to co-owners generally.

Surrender by operation of law [16.17] Express surrender, and the formal requirements for such a surrender, have been considered in [16.12]–[16.14]. Notwithstanding the statutory requirements, in appropriate circumstances conduct on the part of the landlord and tenant will be held to have worked a surrender by operation of law. Surrender by operation of law is often called implied surrender. A surrender by operation of law occurs only where there is an act done by one party and assented to by the other which is inconsistent with the continuance of the lease: 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193 per Asprey JA at 199–200 and Walsh JA at 196; Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd (1992) 26 NSWLR 687 per Clarke JA at 694; Tasita Pty Ltd v Sovereign State of Papua New Guinea (1991) 34 NSWLR 691 per Young J at 695; Forte-Senes Hotels Pty Ltd v Austcorp No 473 Pty Ltd [2004] ANZ ConvR

243 (CA); Enhill Pty Ltd v Bonsoc Pty Ltd (No 2) [2007] VSCA 108. In ForteSenes Hotels Pty Ltd the lessee abandoned premises which were then occupied by a proposed assignee of the term; the proposed assignee vacated the premises which were then occupied by the landlord. Giles JA (with whom Meagher JA and Stein AJA agreed) held (at [21]) that the lease had not been surrendered because surrender required regard to both the conduct of the landlord and that they ‘did not conduct themselves inconsistently with the continuance of the lease, unequivocally indicating an agreement that the lease [page 529] should come to an end’ (at [25]). The term ‘surrender by operation of law’ is applied to cases where the owner of a particular estate has been a party to some act, the validity of which he or she is by law afterwards estopped from disputing, and which would not be valid if his or her particular estate had continued to exist: Lyon v Reed (1844) 13 M & W 285; 153 ER 118; [1843– 60] All ER Rep 178; Steve Christenson and Co Ltd v Furs and Fashions (NZ) Ltd [1971] NZLR 129. It has been said that estoppel is the essential requisite to surrender: Union Trustee Co of Australia Ltd v Baker (1948) 65 WN (NSW) 247 at 249; Robinson v Kingsmill (1954) 71 WN (NSW) 127 at 133; Re Marlow Rolls Theatres Ltd; Ex parte Empire Theatres Ltd (1934) 51 WN (NSW) 193. In order to constitute a surrender by operation of law there must be, first, an act of purported surrender invalid per se by reason of non-compliance with statutory or other formalities and, second, some change of circumstances supervening on, or arising from, the purported surrender, which, by reason of the doctrine of estoppel or part performance, makes it inequitable and fraudulent for any of the parties to rely upon the invalidity of the purported surrender: Foster v Robinson [1951] 1 KB 149 at 155; [1950] 2 All ER 342; and see Take Harvest Ltd v Liu where it was held that an oral agreement for surrender was unenforceable by reason of non-compliance with the Hong Kong equivalent of the Statute of Frauds 1677 s 4. The Privy Council referred briefly to the issue of part performance and estoppel, these issues apparently only having been raised in the Privy Council appeal: see 571–2; and see [16.18]. The principles relating to surrender by operation of law which apply

to a legal term apply with no less force to an equitable term: James v Nesbitt (1954) 28 ALJ 482. The conduct of the parties may work an implied surrender — that is to say, a surrender by operation of law — in two main types of cases. In the first place, the tenant may give up possession of the premises: see [16.18]. In the second place, a new interest may be granted by the landlord to the tenant: see [16.19].

Relinquishment of possession [16.18] If there is an agreement between the landlord and the tenant to put an end to the term, followed by resumption of possession by the landlord, that operates as a surrender by operation of law: see Buchanan v Byrnes (1906) 3 CLR 704 at 712; and see Take Harvest Ltd v Liu. A mere agreement is not sufficient; the agreement must have been acted upon by the giving and taking of possession: see Take Harvest, above; Lord v Still [1962] NSWR 363; 79 WN (NSW) 579; Galaxy Motors Pty Ltd v Carroll [1964–5] NSWR 463; 82 WN (Pt 1) (NSW) 40; McDonald v Jane [1960] VR 184 at 189–90; and the agreement must be enforceable: see Take Harvest and [16.12]–[16.14]. If the tenant abandons possession, there must be something amounting in law to an acceptance by the landlord of that abandonment; otherwise there is not surrender by operation of law: Cummings v Matheson [1955] VLR 389; Watson v Webb (1948) 66 [page 530] WN (NSW) 42; Spinks v Mundy [1957] St R Qd 234; Andrews v Hogan (1952) 86 CLR 223 at 252–3; [1952] ALR 601; generally a resumption of possession, see NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co (1947) 47 SR (NSW) 273 at 281; 64 WN (NSW) 58 at 62; Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd (1992) 26 NSWLR 687 (CA) at 693, 697; National Mutual Life Nominees Pty Ltd v Travellers (NSW) Pty Ltd [1997] ANZ Conv R 249; and see Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 (SC, ACT); Commonwealth Bank of Australia v Figgins Holdings Pty

Ltd [1994] 2 VR 505; and Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) at 325 and on appeal (1996) 16 WAR 396. Mere abandonment of possession is equivocal: see Take Harvest where the Privy Council said at [1993] 2 All ER 473, with reference to Steadman v Steadman [1976] AC 536 (HL) in relation to the issue of part performance: ‘The mere vacation by a tenant of the tenanted property cannot, by itself and without more, constitute an act of part performance because viewed in isolation it is equally consistent with the existence or non-existence of a contract to surrender the tenancy’. As to the abandonment of possession, see further Re Marlow Rolls Theatres Ltd; Ex parte Empire Theatres Ltd (1934) 51 WN (NSW) 193; Connor v McManus (1925) 27 WALR 104; NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 274; Re Stewart; Ex parte Overell’s Pty Ltd [1941] St R Qd 175; Haddrick v Lloyd [1945] SASR 40; and see Jones v Edwards (1994) 3 Tas R 350 as to the meaning of ‘vacate’ (this aspect of this case is referred to in [16.34]). Where the tenant abandons possession and lets a third person into possession in his or her place and the landlord, with the intention of putting an end to the lease, exercises such rights of ownership over the property as are open to him or her in the circumstances, the tenancy is at an end: Parsons v Payne [1945] VLR 34, where one tenant exchanged houses with another without the consent of his landlord, who thereupon brought an action to recover possession against the new occupier: considered in Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 128; in relation to the application of the contractual doctrine of repudiation to leases, see [16.26]. But where a tenant is forced to vacate premises by reason of fire or a similar cause, he or she will not be regarded as having abandoned possession of the premises if he or she intends to return to them as soon as physically possible. In such circumstances he or she remains in occupation of the premises: Morrison Holdings Ltd v Manders Property (Wolverhampton) Ltd [1976] 2 All ER 205; [1976] 1 WLR 533. Similarly, a lessee does not necessarily abandon a lease which contains a covenant not to use the demised premises for any purpose other than the one stated in the lease, if he or she merely ceases to pursue positively the activity contemplated by such ‘purpose’: Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268. In Relvok Properties v Dixon (1973) 25 P & CR 1, the

tenant absconded and the landlord changed the locks to protect the property. The onus was on the tenant [page 531] to prove that the landlord’s acts had amounted to more than merely protecting his property, and he failed to show either a re-entry by the landlord or an acceptance of the surrender. As to the liability of the tenant for rent after, or for damages arising out of, abandonment, see [11.17]. Where the tenant promised to vacate it was held that the agreement was not a surrender:Ex parte Keogh (1893) 9 WN (NSW) 207. Surrender may take place where the tenant tells the landlord that he or she intends to give up that tenancy, and leaves the premises, and the landlord re-enters: Ferguson v Hullock [1955] VLR 202; Robinson v Kingsmill (1954) 71 WN (NSW) 127. The mere giving up of the key without an abandonment of possession is not a surrender: Siggers v Scott (1951) 68 WN (NSW) 131. As to the giving up of the key and the signing of a document stating that the tenant no longer wished to have a tenancy, see Gorman v Pye (1951) 68 WN (NSW) 180. For the effect of temporarily yielding up possession for the purposes of structural work under an agreement whereby the tenant was to return afterwards, see Goldsworthy v Calvert [1953] QWN 11. As to what constitutes a surrender, see also McFadden v Snow (1951) 69 WN (NSW) 8; Coen v Costelloe (1952) 69 WN (NSW) 230. In Collins v Claughton [1959] 1 WLR 145, the tenant wrote a letter, which both he and his wife signed, to one of his landlords in the following terms: ‘As I have come to an agreement with my wife on changing name on rent book into her name … would you be kind enough to grant same as she is going to see [the rent] is paid in the future herself’. The landlords agreed to this proposal, and thereupon the rent book was changed into the wife’s name and she paid the rent instead of her husband. It was held that the original tenancy had been surrendered by operation of law. In Commonwealth Bank of Australia v Figgins Holdings Pty Ltd it was held that although the tenant ceased to carry on business on the premises it at no time abandoned possession of the premises as it always left a considerable quantity of shop fittings and similar items on the premises; but compare Big Country Developments Pty Ltd v Peter Griffiths (No 3)

[2015] NSWSC 1182 where the tenant was found to have abandoned the premises by reason of its failure to take any steps to assert an ongoing occupation of, or interest in, the premises, despite all of the tenant’s fixtures, fittings and equipment remaining undisturbed at the premises from the time the tenant had ceased operating its business until shortly before the landlord granted a new lease to another tenant. As to the effect of a re-letting of the premises by the landlord on behalf of the tenant or the recovery or attempted recovery of payment from a person occupying the premises without the landlord’s permission, see Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd; National Mutual Life Nominees Pty Ltd v Travellers (NSW) Pty Ltd; and see [16.21]. Where the landlord re-lets premises on behalf of a tenant who has abandoned the premises the lease is not brought to an end; Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd; National Mutual Life Nominees Pty Ltd v Travellers (NSW) Pty Ltd. [page 532]

Acceptance by tenant of new interest [16.19] Surrender by operation of law takes place where the tenant accepts a new interest inconsistent with the demise. In Take Harvest Ltd v Liu [1993] AC 552 at 564–5 the Privy Council approved the following statement of the law: In Jenkin R Lewis & Son Ltd v Kerman [1970] 3 All ER 414 at 419; [1971] Ch 477 at 496 Russell LJ, delivering the judgment of the Court of Appeal, summarised a set of circumstances in which, on wellestablished principles, a lease will be treated as having been surrendered by operation of law: If a tenant holding land under a lease accepts a new lease of the same land from his landlord he is taken to have surrendered his original lease immediately before he accepts the new one. The landlord has no power to grant the new lease except on the footing that the old lease is surrendered and the tenant by

accepting the new lease is estopped from denying the surrender of the old one. This ‘surrender by operation of law’ takes effect whether or not the parties to the new lease intend it to take effect. Moreover, even if there is no express grant of a new lease the old lease will be surrendered by operation of law if the arrangements made between the landlord and the tenant are such as can only be carried out so as to achieve the result which they have in mind if a new tenancy is in fact created. It is on this principle that a new letting to an old tenant, commencing immediately, operates as a surrender of the original term; for the lessor could have no power to create a new term if the original term subsisted: M’Donnell v Pope (1852) 9 Hare 705; 68 ER 697; Doe d Solomon v Purves (1846) 1 a’Beckett’s RJ 38 at 46; affirmed (1847) 2 a’Beckett’s RJ 1; and see PascoeWebbe v Nusuna Pty Ltd (1985) 3 BPR 97,231; Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505. Provided that the new lease is to commence during the term of the old lease, a surrender will take place, even though the new lease is for a shorter term than the residue of the old term: Joseph v Joseph [1967] Ch 78 at 85; [1966] 3 All ER 486 (per Lord Denning MR). In accepting the new lease the lessee is a party to an act the validity of which he or she is estopped from disputing: Lord v Still [1962] NSWR 363; 79 WN (NSW) 579 at 580. Where a tenant takes a new lease that is altogether void, the new lease will not work as a surrender of the existing lease: Blake v Lane (1876) 2 VLR (L) 54; Johnston v Simeon (1884) NZLR 2 SCH 216. The principle that the acceptance by the tenant of a new interest inconsistent with the demise works as a surrender extends to the acceptance of a licence: Foster v Robinson [1951] 1 KB 149; [1950] 2 All ER 342; Lord v Still, above. Where there is an agreement varying the rent, the question whether a new tenancy is created thereby depends upon the effects of the alteration — that is to say, whether there has been an express or implicit surrender of the current tenancy, and a new tenancy entered upon. Where the rent is reduced, the situation must be interpreted (unless, obviously, it is only permission to pay the whole sum by instalments) either as [page 533]

a voluntary forbearance or as the grant and acceptance of a new demise: A E Terry’s Motors Ltd v Rinder [1948] SASR 167. As to the effect of a variation of the rent, see further Re Savile Settled Estates [1931] 2 Ch 210; [1931] All ER Rep 556; Donellan v Read (1832) 3 B & Ad 899; 110 ER 330; [1824–34] All ER Rep 639; Re Arkwright’s Settlement [1945] Ch 195; 1 All ER 404; Crowley v Vitty (1852) 7 Exch 319; 155 ER 968; Holme v Brunskill (1878) 3 QBD 495; Hodges v Lawrance (1854) 18 JP 347; Newell v Crayford Cottage Society [1922] 1 KB 656; Schmit v Christy [1922] 2 KB 60; Kerr v Byde [1923] AC 16; Grossop v Ashley [1922] 1 KB 1; Michael v Phillips [1924] 1 KB 16. The payment and acceptance of a reduced rent does not, at least where the lease is not required to be in writing, of itself constitute a surrender and regrant: Rathborne v Gandali [1970] 1 NSWR 297. Whether an agreement for increase of rent involves a surrender and regrant is a question of intention: Jenkin R Lewis & Son Ltd v Kerman [1971] Ch 477 at 496–7 (CA per Russell LJ), referred to with approval by the Privy Council in Take Harvest at [1993] 2 All ER 467. As to the position where rent is varied pursuant to a rent review clause, see [11.4]. Any arrangement between the landlord and tenant which operates as a fresh demise will work a surrender of the old tenancy, and this may result from an agreement under which the tenant gives up part of the premises and pays a diminished rent for the remainder, and may result from the mere alteration in the amount of rent payable: Re Savile Settled Estates [1931] 2 Ch 210; [1931] All ER Rep 556; Baker v Merckel [1960] 1 QB 657; 1 All ER 668. In Jones v Bridgman (1878) 39 LT 500; 43 JP 112, the plaintiff, while lessee of five rooms from the defendants for a term, entered into negotiations with them by which he was to hold three only of the rooms at a diminished rent, and on the next quarter day paid and took a receipt for rent at the lesser rate. There was evidence that the parties intended a written agreement to be prepared, embodying the terms of the new arrangement, but they ultimately disagreed and such agreement was never, in fact, signed. On the following quarter day the defendants claimed rent of the plaintiff under the old lease, which he repudiated. There was evidence that the plaintiff had given up possession of two of the rooms. It was held that the jury were justified in finding that there was a new tenancy, and therefore there was a surrender by operation of law. The mere surrender of a small part of the demised premises and proportionate

reduction of the rent does not in itself amount to a surrender by operation of law of the old tenancy and the creation of a new one: Holme v Brunskill (1878) 3 QBD 495. See also Baynton v Morgan (1888) 22 QBD 74; Re Arkwright’s Settlement [1945] Ch 195; 1 All ER 404; Penny v Craber [1967] 1 NSWR 683; 87 WN (Pt 1) (NSW) 27; Jenkin R Lewis & Son Ltd v Kerman [1970] 1 All ER 833; 2 WLR 378. However, in circumstances where an agreement for surrender was unenforceable by reason of failure to comply with the Hong Kong equivalent of the Statute of Frauds 1677 s 4, it was held that a court should not artificially infer an agreement for a fresh tenancy, which would have the effect of a surrender: Take Harvest Ltd v Liu; applying Sidebotham v Holland [1895] 1 QB 378 at 385 (CA). The result of the decisions appears to be that [page 534] it is a question of fact whether the giving up to the landlord of part of the premises involves a surrender of the old lease and the creation of a new tenancy in respect of the premises retained by the tenant. The position is similar where the parties execute a deed which shortens the term of the lease. It is a question of fact whether the effect of the deed is to surrender the existing lease and create a new lease for a shorter term or merely vary the existing lease: Pascoe-Webbe v Nusuna Pty Ltd. In that case Young J said (at 9622): Up until fairly recently courts would usually take the view that unless there was some relatively minor alteration in the terms of the lease the parties must have intended a surrender and a regrant, see eg Lewis & Cassidy, Landlord and Tenant Law, 1966, p 122. However, such a question is a question of fact (Wirral Estates Ltd v Shaw [1932] 2 KB 247 at 257 as applied by the Court of Appeal in Stedman v Shaw (1970) 91 WN (NSW) 190 at 196) and courts have been more ready to infer a mere variation, especially in cases of adjustment to the rent, in the last 20 years and the present law is probably accurately summed up in the 4th edition of Halsbury vol 27 para 448. That summary includes

the statement that normally where the term of the lease is altered it is difficult to satisfy the court that there has been a mere variation. In Doe d Gray v Stanion (1836) 1 M & W 695; 150 ER 614; [1835–42] All ER Rep 290 a person who held a house as tenant from year to year entered into a contract to buy the house from his landlord. It was contended on behalf of the landlord that the contract of purchase amounted to a surrender of the term, in as much as it was inconsistent with the continuance of the tenancy. This argument was rejected, on the ground that the contract was conditional upon the making of a good title. See further to the same effect Abrahams v Cussen (1848) 3 a’Beckett’s RJ 55 at 61, and Nightingale v Courtney [1954] 1 QB 399; 1 All ER 362. In Murrell v Fulton [1962] VR 118 O’Bryan J applied Nightingale v Courtney, above, and held that, where a lease contains an option to purchase which the lessee exercises, but the sale is not completed because of the default of the lessee under the contract of sale, the exercise of the option does not, unless something to the contrary appears in the lease or by other agreement between the parties, involve the surrender of the balance of the term of the lease. On the other hand, in Turner v Watts (1928) 97 LJ KB 403; 44 TLR 105, it was held that the terms of the contract whereby the sitting tenant agreed to purchase the house were inconsistent with the continued existence of the weekly tenancy. In Ward v Sadler (1959) 76 WN (NSW) 554 the weekly tenant of a cottage agreed to purchase it from her landlord. The contract gave to the tenant the right to the rents and profits and required her to pay weekly instalments and interest on the unpaid balance of the purchase price. The tenant having defaulted under the contract, the landlord rescinded it and sued in ejectment. The New South Wales Court of Appeal held that, from the fact that the contract gave the purchaser the rents and profits and required her to pay weekly instalments and interest on the unpaid balance of the purchase money, it was plain that the parties intended that the weekly tenancy should cease from the date of the contract. [page 535]

Surrender by personal representative

[16.20] In Francis Longmore & Co Ltd v Stedman [1948] VLR 322 it was suggested that, where on the death of a weekly tenant the person in whom the estate is legally vested does not promptly assert a claim that the tenancy continues and the landlord manifests his or her intention to resume possession, the tenancy is at an end. The correctness of this decision was doubted by Fullagar J in Andrews v Hogan (1952) 86 CLR 223 at 251–2. In Triggs v Byron (1950) 67 WN (NSW) 183, Herron J, while accepting Smith v Mather ([1948] 2 KB 212; 1 All ER 704) as an authority that, in order to bring the tenancy to an end, the landlord might serve a notice to quit on the Public Trustee, refused to follow Francis Longmore & Co Ltd v Stedman, and held that the Public Trustee in New South Wales has no power to make a surrender until he or she has obtained a grant in the court or has elected to administer pursuant to s 18A of the Public Trustee Act. Similarly, in Furness v Sharples (1950) 68 WN (NSW) 18, the Full Court of New South Wales expressed doubts as to the capacity of the Public Trustee to divest him or herself of tenancies vested in him or her by virtue of the relevant statutory provision. In Murray v McKelvey (1950) 68 WN (NSW) 70, upon the death of the tenant, the tenant’s daughter, Mrs McKelvey, stated that she did not propose to take out representation, although in fact she did so later with her brother, the other next of kin. A letter was written to the Public Trustee, who stated in reply that he had no interest in the premises. A writ in ejectment was then issued against Mrs McKelvey. It was held that the letter from the Public Trustee did not have the effect of surrendering the tenancy, even if the Public Trustee had that power, which was doubtful. It was further held that the act of one of the next of kin could not destroy the estate vested in the Public Trustee, although it was conceded that all the next of kin might put an end to the interest. In Andrews v Hogan, however, McTiernan, Webb and Fullagar JJ held that the Public Trustee has power to surrender a tenancy. The Full Court of New South Wales in Dykes v Gerke [1963] NSWR 721; 79 WN (NSW) 432 held that the surrender by operation of law of a tenancy vested in the intestate at the time of death, by the Public Trustee in due course of administration, even though brought about prior to the filing of an election by the Public Trustee to administer the intestate estate, is valid as between the estate of the deceased tenant and the lessor. In Armstrong v Fisher (1950) 68 WN (NSW) 93 it was held that there had

been no surrender of the tenancy by the widow of the tenant. In April 1947 the weekly tenant of a flat sublet it, less one room. The tenant died intestate on 7 July 1950, and no Letters of Administration were taken out, nor were they likely to be taken out, as she had no assets of any substance. The registered proprietor of the premises in which the flats were situated, in ejectment proceedings in the Supreme Court, sought to eject the subtenant, alleging that since the person in whom the estate was legally vested had not asserted a claim that the tenancy continued, it had come to an end, and the subtenant [page 536] was a trespasser. The Full Court of New South Wales held that the relationship of landlord and tenant had not been destroyed and that consequently the court had no jurisdiction to entertain the action: Roos v Pilgrim (1951) 51 SR (NSW) 174.

Grant of lease to third person [16.21] The grant by the lessor of a new lease to a third person, with the lessee’s assent, operates as a surrender of the old lease, provided that the old lessee gives up possession to the new lessee at or about the time of the grant of the new lease: Hamerton v Stead (1824) 3 Barn & Cress 478; 107 ER 811; Wallis v Hands [1893] 2 Ch 75; [1891–4] All ER Rep 719; Sabelberg v Scott (1879) 5 VLR (L) 414; Johnston v Simeon (1884) NZLR 2 SC 216; Armytage & Jones Pty Ltd v Jones (1952) 69 WN (NSW) 299; Maridakis v Kouvaris (1975) 5 ALR 197; see further [11.17]. There is also a surrender where the lessor, with the lessee’s assent, accepts another person as lessee and such other person takes possession: Bees v Williams (1835) 2 Cr M & R 581; 150 ER 248; Woodcock v Nuth (1832) 8 Bing 170; 131 ER 365; Parsons v Payne [1945] VLR 34 at 38; and see [16.18]. So far as surrender by the grant of a new lease to a third person is concerned, the old lease is surrendered regardless of the nature of the new

lease or tenancy: Crowley v Vitty (1852) 21 LJ Ex 135; 131 ER 365; Dodd v Acklom (1843) 134 ER 1063 at 1066; Ive’s case (1597) 6 Co Rep 11a; Knight v Williams [1901] 1 Ch 256. Even if the new tenancy is a tenancy at will, the old tenancy is surrendered: Mellows v May (1601) Cro Eliz 874; 78 ER 1099. But there is not surrender if the evidence establishes no more than an assignment: Ahearn v L A Wilkinson Ltd [1929] St R Qd 66. In Hoskins v Dillon (1950) 67 WN (NSW) 115 it was held that there had been an assignment, while in Armytage & Jones Pty Ltd v Jones (1952) 69 WN (NSW) 299 it was held that surrender had taken place. However, the application of this rule without regard to the basis of the doctrine of surrender by operation of law has the potential to cause significant unfairness to a landlord where the tenant abandons premises on a falling rental market. As the New South Wales Court of Appeal indicated in Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd (1992) 26 NSWLR 687 the landlord’s position may be ameliorated by its re-letting the premises on the tenant’s account and thereby avoiding a surrender. As to this option, Clarke JA, with whom the other members of the court agreed, said (at 693–6): Although the clarification of the law effected by Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17, may alleviate the landlord’s problems in a situation such as I have described above there may be strong reasons why a landlord may wish to keep the lease on foot and at the same time receive some financial return from its premises. One reason which comes to mind is the existence of a guarantee under which the surety guarantees the (insolvent) tenant’s payment of rent so that the guarantee remains effective only while the lease remains on foot. [page 537] In principle it would seem odd that a tenant, and its guarantor, could escape liability for future rent upon the tenant, in contravention of its contractual obligation, abandoning the premises in the knowledge that the landlord would, almost certainly, be obliged to find another tenant. Such a result would, however, only follow if there

was a universal rule to the effect that once the landlord re-lets the premises a surrender by operation of law would occur. I do not think there is such a rule. Although many of the cases are expressed in terms which indicate the existence of a rule of that nature there is a line of authority supporting the principle that a surrender will not occur if the landlord re-lets the premises on the tenant’s account. Walls v Atcheson (1826) 3 Bing 462; 130 ER 591, is usually cited as the case which laid down that proposition. In that case there is a suggestion but not a positive statement that that is the law. What the case did positively state was that if the landlord did not give prior notice to the tenant that it was re-letting on the tenant’s behalf then once the re-letting occurred a surrender would be complete. Although Walls has been in the law reports for well over 150 years it has been referred to in only a few reported cases in Australia and usually in circumstances where it has been found that a surrender has occurred: Boxsel v Bennett (1981) ANZ ConvR 153 and Maridakis v Kouvaris (1975) 5 ALR 197. In both these cases the courts assumed that Walls supported the proposition that a re-letting by the landlord on the tenant’s behalf did not bring about a surrender by operation of law but found against the landlord for he had not given prior notice to the tenant that he was reletting on the tenant’s behalf. However, in Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105, Priestley JA accepted the proposition, the correctness of which had been assumed in those two cases. His Honour said (at 133): … (ii) Where the landlord, as discussed in Walls v Atcheson and as occurred in Oastler v Henderson, takes possession, not solely on his own account, but either on the tenant’s account or for the benefit both of the tenant and himself. Then, so long as that position remains, the lease is not terminated, there is no surrender by operation of law and the tenant remains liable for the rent. As a matter of theory, there seems no reason why the landlord, on this approach, should not actually re-let on account of the tenant, credit the new lease rental against the

continuing tenant’s obligation to him and claim the balance. There was however a very strong tendency to treat the leasing to a new tenant as a surrender of the old lease, no doubt strengthened because it avoided the problem of distinguishing between a case where the landlord was granting the new lease on the tenant’s account and where he was not. Furthermore in two Canadian cases, Goldhar v Universal Sections and Mouldings Ltd (1963) 36 DLR (2d) 450 and Highway Properties Ltd v Kelly Douglas & Co Ltd (1971) 17 DLR (3d) 710, it is said that the principle for which Walls stands is well-established. It is to be noticed, however, that Priestley JA expressed proposition (ii) without reference to any requirement that the landlord should give notice to the tenant that it was re-letting on the tenant’s behalf before it actually re-let the premises. In this respect his Honour was going beyond what had been understood to be the principle in Walls but in my view his Honour was correct in expressing his proposition without the notice qualification. In determining whether a surrender by operation of law has taken place [page 538] the courts look to the actions of the parties in order to determine whether they have conducted themselves in a manner inconsistent with the continued existence of the lease. Where it is found that both parties have so conducted themselves then the conclusion will be that a surrender by operation of law has taken place. In this context abandonment by a tenant and re-letting by a landlord have generally been found to be acts inconsistent with the continuation of the lease: see Oastler v Henderson (1877) 2 QBD 575 and 195 Crown Street Pty Ltd v Hoare; Invermee (Third Party) [1969] 1 NSWR 193. Where, however, the proper inference to be drawn in all the circumstances is that the landlord has re-let the premises on behalf of the tenant then I can see no reason in principle or logic to hold that a

surrender has occurred. That is not conduct inconsistent with the continued existence of the lease. On the contrary it would seem to me that the distinction which should be drawn is between cases in which the landlord re-lets on its own account and those in which it re-lets for the benefit of the tenant, either expressly or by applying rent received in part satisfaction of the tenant’s liability under its lease. Some support for this approach is to be found in Highway, where Laskin J said (at 718): English and Canadian case law has given standing to a limitation on the operation of surrender, although there is repudiation and repossession, if the landlord, before repossessing, notifies the defaulting tenant that he is doing so with a view to re-letting on the tenant’s account. No such notice was given in the Goldhar case; and although it was argued in the present case that the letter of November 22, 1963, asserted that position, neither the trial Judge nor the Court of Appeal accepted the argument. I agree that the letter is not sufficiently explicit to that end, but I would think that the recognition of such a modifying principle would suggest a readiness to imply that a re-letting was on the repudiating tenant’s behalf, thus protecting the landlord’s rights under the lease and at the same time mitigating the liability for unpaid rent. Some of the views expressed in Oastler et al v Henderson (1877) 2 QBD 575, point to a disposition to such an implication; and there is authority in the United States to that effect: see 11 Williston on Contracts [Jaeger, 3rd ed, p 1403]. I know that under the present case law the landlord is not under a duty of mitigation, but mitigation is in fact involved where there is a reletting on the tenant’s account. In the same judgment Laskin J noted that the principle expressed in Walls was based on an unauthorised assertion of agency by the landlord. That is clearly correct for it cannot be that, in the absence of specific authority under the lease, a landlord can constitute itself the

agent of the tenant for the purpose of sub-letting the premises merely by serving a notice upon the tenant. But Walls has stood for a long time despite this apparent difficulty and should continue to be accepted as authority for the proposition that a landlord is able to grant a sub-lease on the defaulting tenant’s behalf. However, there is, in my opinion, no case for holding to the view that the landlord must serve a notice before granting the new lease or, more accurately, the sub-lease. In particular I see no reason why it should be held that a landlord who, upon the tenant vacating the premises during the term, re-lets the premises and accounts to the tenant for the rent received, in the sense that it credits the tenant with that rent, should be regarded as having brought, or intended to bring, the tenant’s leasehold interest to an end. Rather those facts would indicate that it wished to keep the lease on foot while ensuring that the premises did not lie dormant. [page 539] Similar considerations may apply where, for instance, the landlord does not re-let the premises but seeks to recover payment from a person occupying the premises without its permission, until it can regain possession through the courts. In those circumstances, whether it demands mesne profits, occupation or licence fees or rent, the proper conclusion may well be that the landlord was keeping, or intending to keep, the lease on foot while endeavouring to recover some moneys for the benefit of its tenant and itself. If so then it could not be said that the landlord’s actions were inconsistent with the continued existence of the lease. Similar views were expressed in Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 133–4 (CA, Priestley JA); see also National Mutual Life Nominees Pty Ltd v Travellers (NSW) Pty Ltd [1997] ANZ Conv R 249; see, [16.31]. The landlord’s seeking to re-let the premises is not necessarily inconsistent

with the continuing rights of the tenant; advertising is only an invitation to treat (Vickers and Vickers v Stichtenoth Investments Pty Ltd (1989) 52 SASR 90 at 92 (per Bollen J), referring to Oastler v Henderson [1877] 2 QBD 575); but in particular circumstances it may amount to an election to accept the repudiation of the lease: see Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 146 (CA, McHugh JA); and see Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 at 325 (Dist Crt, WA) and on appeal at (1996) 16 WAR 396.

Effect of surrender [16.22] A surrender, whether express or by operation of law, operates only to release the tenant from liability on the covenants in the future, the tenant remaining liable in respect of past breaches: Dalton v Pickard [1926] 2 KB 545; [1926] All ER Rep 371; Richmond v Savill [1926] 2 KB 530; [1926] All ER Rep 362; see further Buchanan v Byrnes (1906) 3 CLR 704; NLS Pty Ltd v Hughes (1966) 120 CLR 583; 40 ALJR 292; Winter v Ahern [1997] FCA 157; National Mutual Life Association of Australasia Ltd v Price Brent Services [1996] ANZ ConvR 206; and especially the proceedings at first instance reported in [1966] WAR 100; see also Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 at 325 (Dist Crt, WA) and on appeal at (1996) 16 WAR 396. Whether a tenancy may be surrendered in circumstances rendering the lessee liable for damages for the loss of future rent is discussed in [11.17] and [16.26]. Provision for the apportionment of rent is made by the Supreme Court Act 1986 (Vic) ss 53–56: see Conveyancing Act 1919 (NSW) ss 142, 144; Property Law Act 1974 (Qld) ss 231–33; Law of Property Act 1936 (SA) ss 63–68; Apportionment Act 1871 (Tas); Property Law Act 1969 (WA) ss 130–34. It has been held that the statutory provisions concerning apportionment (which are derived from the Apportionment Act 1870 (UK)) do not apply to rent which is payable in advance: Ellis v Rowbotham [1900] 1 QB 740; [1900–3] All ER Rep 299; Hildebrand v Lewis [1941] 2 KB 135; 2 All ER 584. The surrender of the head lease does not affect the rights of the sublease: see [16.3].

[page 540]

Forfeiture [16.23] Forfeiture as a mode of the determination of leases is a topic of such difficulty and practical importance as to warrant a separate chapter: see Chapter 17.

Notice to quit [16.24] A formidable body of case law has grown up around the simple act of determining a periodic tenancy by notice to quit. The subject is of such practical importance and difficulty as to merit a chapter to itself: see Chapter 20.

Disclaimer [16.25] In the ordinary understanding of language, to disclaim an estate or interest is to renounce or to disavow any claim or title to the estate or interest. Where the estate or interest in land is one which has come into existence by virtue of a lease, the disclaimer involves a direct repudiation of the relation of landlord and tenant. In effect, the one who disclaims says, ‘I am no longer your tenant’: Re Teller Home Furnishers Pty Ltd [1967] VR 311 at 317. It is necessary to distinguish between disclaimers in the exercise of a statutory power and other disclaimers. The trustee in bankruptcy of a tenant has the right, subject to certain conditions, to disclaim an onerous lease. This right is conferred by the Bankruptcy Act 1966 (Cth) s 133. The disclaimer, when filed with the Registrar in Bankruptcy, operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed. A trustee is not entitled to disclaim a lease without the leave of the Federal Court unless: (a) he or she has, in accordance with the rules made under the Act, given to the lessor and, if the bankrupt has sublet the whole or any part of the

leased property or has mortgaged the lease, to each sublessee or mortgagee, 28 days’ notice in writing of his or her intention to disclaim the lease; and (b) no person to whom the trustee has given such notice has, within 28 days after it was given to him or her, required the trustee, in accordance with the rules, to apply to the court for leave to disclaim the lease. The winding up of a company does not automatically put an end to a lease held by it: Warrender Estates Ltd v Simpson (1933) 33 SR (NSW) 390; 50 WN (NSW) 177. Where a company is in liquidation it is empowered by the Corporations Act 2001 s 568 to disclaim an onerous lease (formerly s 568 of the Corporations Law, s 454 of the Companies Code and s 296 of the Companies Act 1961 (Vic)). The Companies Act 1961 (Vic) s 296 was considered in Re Teller Home Furnishers Pty Ltd [1967] VR 313. The court has power to vest the property in another person, such as a subtenant of the company whose rights would otherwise disappear. The subtenant may apply for [page 541] a vesting order for the property to be held on the same terms as it was held by the company: see s 568F. A liquidator must give notice to the lessor and any sublessees and charges of the lease: s 568A; and see s 568B. When the liquidator of a company or the trustee in bankruptcy of an individual disclaims a lease which has been assigned to the company or the individual, the original lessee will remain liable to the lessor for the rent throughout the term: Warnford Investments v Duckworth [1978] 2 WLR 741; [1979] Ch 127. The disclaimer provisions apply where the company in liquidation is the lessor: Wilmott Growers Group Inc v Willmott Forests Ltd (recs and mgrs apptd) (in liq) (2013) 251 CLR 592. In that case, the company was the manager of forestry investment schemes, and had leased to the participants in those schemes portions of land which the company owned or leased. The creditors of the company resolved that it be wound up, and the liquidators applied to the Supreme Court of Victoria for directions concerning the sale of the land. In

dismissing the appeal, the High Court said as to effect of the disclaimer provisions (at 608): But the relevant question is whether the effect of the operation of the statute is that the estate or interest is brought to an end. In that respect, it is critically important to recognise that the tenants do not stand as third parties divorced from the rights, interests and liabilities of the company which are to be brought to an end. In every case the tenant is the party that has the liability, interest or right which is correlative to the relevant right, interest or liability of the company: cf Hindcastle Ltd v Barbara Attenborough Associates Ltd [1997] AC 70 at 87 per Lord Nicholls of Birkenhead. And contrary to the submissions of WGG, the company’s rights, interests and liabilities in respect of the leases cannot be brought to an end without bringing to an end the correlative liabilities, interests and rights of the tenants. That is, to adopt the closing words of s 568D(1), ‘in order to relaease the company … from liability’, it is necessary to terminate the tenant’s rights under the leases. This operates to terminate the tenants’ estates or interests in the land. For further discussion of these statutory provisions reference should be made to works on Bankruptcy and Company Law. In Hindcastle Ltd v Barbara Attenborough Associates Ltd [1997] AC 70 the House of Lords held that, under the provisions of relevant English legislation, a disclaimer by the liquidator of a company that had taken an assignment of the lease from an intermediate assignee did not operate to determine the liability of the original lessee and any surety for the original lessee to pay the rent due under the lease (and see [15.18]; see also Bairstow v Christopher Moran Holdings Ltd [1992] 2 WLR 396; [2000] ANZ ConvR 173). The position is, of course, difficult if the landlord determines the lease by re-entry: see at [1997] AC 89 (per Lord Nicholls). A personal representative has no right to disclaim a lease even though it be damnosa hereditas: Rendall v Andreae (1892) 61 LJQB 630 at 631; Commissioner of Stamp Duties v Brasch (1937) 57 CLR 69 at 86; [1937] ALR 246. Disclaimer (at least disclaimer not on a statutory basis) is analogous to repudiation in that it must be clear and unambiguous and, like repudiation, may be accepted by re-entry or by issuing and

[page 542] serving proceedings claiming possession (or, alternatively, the landlord may choose not to accept it): see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 302–3. Disclaimer as a means of determining a tenancy by the exercise of a power conferred by statute is to be distinguished from the determination of a tenancy which may take place where a tenant does some act which directly repudiates the relation of landlord and tenant. Such an act does not of itself determine the tenancy; it gives the landlord an option to determine the tenancy. Disclaimer in this sense — that is to say, disclaimer as a cause of forfeiture — is considered in [17.21]. As to relief against forfeiture for disclaimer (or for acceptance of repudiation), see [19.1] and [19.4].

Acceptance of repudiation [16.26] In dealing in this text with the various ways in which a lease may be brought to an end, the writers have not included a method by which contracts in general may be discharged; namely, repudiation of the contract by one party followed by the acceptance of that repudiation by the other: Heyman v Darwins Ltd [1942] AC 356; [1942] 1 All ER 337. Although the word repudiation is used in different senses, it generally refers to the following situation ([1942] AC at 378 (per Lord Wright); see also 398 (per Lord Porter)): ‘… the [guilty] party, though not disputing the contract, declares unequivocally that he will not perform it and, admitting the breach, leaves the other party to claim damages’. It is a ‘… wrongful renunciation of the contractual relation into which he has entered’: Johnstone v Milling (1886) 16 QBD 460 at 473 (per Bowen LJ). However, intention is not always relevant: … if one party, although wishing to perform the contract, proves himself unable to do so, his default in performance will give the other party a right to rescind the contract, if the breach goes ‘so much to the root of the contract that it makes further commercial performance of

the contract impossible’: Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 at 64. See Shevill v Builders Licensing Board (1982) 149 CLR 620 per Gibbs CJ at 626 (with whom Murphy and Brennan JJ agreed in relation to repudiation; see also Wilson J at 633). This latter species of repudiation makes the boundaries between contractual doctrines in relation to frustration, repudiation and rescission for breach of an essential term very blurred, at least in relation to their application to leases: see also [16.34]. It is submitted that the discussion of the cases that follow, and the earlier examination of National Carriers v Panalpina (Northern) Ltd [1981] AC 675 (see [6.10]), showed that the way is open for the application of all relevant contractual doctrines to leases. This was confirmed by the High Court in Progressive Mailing House Pty Ltd v Tabali Ltd (1985) 157 CLR 17; see Mason J at 29 (see below); and see [16.34]; also J Effron, [page 543] ‘The Contractualisation of the Law of Leasehold: Pitfalls and Opportunities’ (1988) 14 Mon LR 83–113; J & C Reid v Abau Holdings Pty Ltd (1988) NSW ConvR ¶55-416; Glentham Pty Ltd v Luxer Holdings Pty Ltd [2006] WASC 132.

Previous position [16.27] The feudal origins of leases have dominated to such an extent that until recent times the courts and text-writers have treated leases almost exclusively from a proprietary rather than a contractual perspective. It is certainly true that a long-term lease of agricultural land at minimal rent produces rights and obligations more appropriately viewed as based on the demise of an estate or interest in land; indeed, this was the environment in which the feudal doctrines were developed. However, the modern commercial lease does not sit comfortably in this framework. For example, the obligations of a tenant under a shopping centre lease are primarily based on the contractual relationship between the parties. The increasing importance of

what might be termed commercial leases has led to changes in judicial thinking: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 especially at 51–2 (per Deane J). In the second edition of R Brooking and A Chernov, Tenancy Law and Practice Victoria, Butterworths, Sydney, 1980, it seemed, on good English and Australian authority, that the doctrine of frustration did not apply to leases. Nor, it seemed, did the doctrine of repudiation, although there were increasing numbers of comments in the cases suggesting that it may, and doubts were expressed that leases should be viewed merely in terms of their proprietary character: see pp 191–7. By implication, the anomaly that an agreement for lease, which involves the creation of an equitable estate or interest in land, could be discharged in consequence of repudiation (see Dimond v Moore (1931) 45 CLR 159; [1931] ALR 177) but that a lease could not, was noted. Other inconsistencies flow from attempting to compartmentalise the law. Anomalous distinctions arise, for example, between a conveyance of freehold and a long lease, between a time or voyage charter-party and a charter by demise, between a lease of land and a lease of other chattel interests, say, under a hire-purchase agreement and between a lease and a licence to occupy land, even given the notorious difficulties, in some cases, of drawing the distinction: see National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 at 701–2 (per Lord Simon), and 712–3 (per Lord Roskill). The mere fact that a lease passes an estate in the land is no reason for refusing to hold that the effect of the acceptance of a repudiation is to revest the estate in the lessor; it has never been suggested that the fact that an equitable estate passes on the making of a binding contract for the sale of land has the consequence that the contract of sale may not be determined by acceptance of a repudiation: Walters v Cooper [1967] VR 583; and see Poort v Development Underwriting (Victoria) Pty Ltd (No 2) [1977] VR 454, in relation to an instalment contract for the purchase of land. [page 544] While the proprietary view of leases was accepted as the basis for excluding the application of the doctrine of frustration, it was more difficult to argue that

a lease could be repudiated. In Lobb v Vasey Housing Auxiliary [1963] VR 239 at 247, Hudson J said: … the accepted basis for the exclusion of the doctrine appears to be that the contractual obligations incurred by the parties to a lease are merely incidental to the creation of the estate, and when this has been effected it can no longer be said that what was agreed or contemplated by the parties has been rendered impossible or frustrated. In Firth v Halloran the Full Court of New South Wales (whose reasons were adopted by Knox CJ and Gavan Duffy J) observed that, if the doctrine of frustration were to be held to apply to a demise, it would have the extraordinary effect of terminating automatically the estate vested in the lessee and of putting the lessor back into possession irrespective of the wishes of the parties: (1926) 38 CLR 261 at 266. Isaacs J expressed a contrary view on the application of the doctrine of frustration: see 38 CLR 269 and [6.10]. In the case of discharge in consequence of repudiation, the court is not concerned with some event which occurs irrespective of the wishes of the parties to the lease.

Changing position [16.28] In 1981 the House of Lords comprehensively reviewed the nature of a modern lease in National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675: see [6.10]. Their Lordships decided that the doctrine of frustration was applicable to leases, but stressed that the cases in which a lease will be held to have been frustrated will be rare. This decision was a radical departure from the former Anglo-Australian common law position on the basis for excluding the doctrine of frustration, and opened the way to a new view of leases. The basis of the decision is probably best summarised by the statement of Laskin J in the Canadian Supreme Court decision in Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710 at 721, which was cited with approval in [1981] AC 675 at 696 (per Lord Wilberforce): It is no longer sensible to pretend that a commercial lease, such as the one before this Court, is simply a Conveyance and not also a contract. It is equally untenable to persist in denying resort to the full armory of

remedies ordinarily available to redress repudiation of covenants, merely because the covenants may be associated with an estate in land. Apart from this passing reference, the House of Lords did not mention the question of repudiation. The view that the determination of a lease is governed by the general principles of contract law is supported by the remarks of Owen J in Campbell v Payne (1953) 53 SR (NSW) 537 at 539. An observation of Vaughan Williams J in Re New Oriental Bank Corporation [1985] 1 Ch 753 at 765; [1895–9] All ER Rep 910 contains a [page 545] clear expression of opinion that a lease may be determined by the acceptance of a repudiation. This view is also supported by the New Zealand case of Macky v Cafe Monico [1906] 25 NZLR 689 (especially the judgment of Cooper J at 708) and Elder v Gray (1891) 10 NZLR 107 at 110. In Parsons v Payne [1945] VLR 34 at 39 Herring CJ first refers to Buchanan v Byrnes (1906) 3 CLR 704 in relation to surrender and then speaks of a tenant’s ‘acting in such a way that his landlord may become entitled, if he will, to put an end to the contract on which such tenancy is based’. This appears to accept the view that a tenancy may be determined by the acceptance of a repudiation. In Australian Safeway Stores Pty Ltd v Toorak Village Development Ltd [1974] VR 268 at 274, Gowans J considered whether the lessee had repudiated the lease (but concluded that it had not done so). See further Simmons v Tuck [1918] GLR 736; and Schilling v Riley [1946] VLR 73. In Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318; [1971] 3 All ER 1226, the Court of Appeal decided that the acceptance of a repudiation does not bring a lease to an end. The reasons of the court on this important question occupy only a dozen lines, which no doubt in some way reflects the strength of the then accepted view on the prime character of leases, particularly as it proceeded on the basis that there was no authority on the point. Lord Denning MR, who delivered the leading judgment, disposed of the question as follows ([1972] 1 QB 318 at 324):

The second point is: what is the effect of the repudiation by the oil company which was accepted by the dealer? Does it put an end to the lease? I think not. A lease is a demise. It conveys an interest in land. It does not come to an end like an ordinary contract on repudiation and acceptance. There is no authority on the point, but there is one case which points that way. It is Leighton’s Investment Trust Ltd v Cricklewood Property and Investment Trust Ltd [[1943] 2 All ER 580, on appeal [1945] 1 All ER 252]. Lord Russell of Killowen and Lord Goddard were both of opinion that frustration does not bring a lease to an end. Nor, I think, does repudiation and acceptance. These issues have been reconsidered by the Australian courts since the National Carriers case, principally in Shevill v Builders Licensing Board (1982) 149 CLR 620; (1982) 42 ALR 305; Ripka Pty Ltd v Maggiore Bakeries Pty Ltd [1984] VR 629; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105; J & C Reid Pty Ltd v Abau Holdings Pty Ltd (1988) NSW ConvR ¶55-416 (CA, NSW); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; Vickers & Vickers v Stichtenoth Investments Pty Ltd (1989) 52 SASR 90; Charmar Electrical Pty Ltd v Minda Incorporated (1990) 55 SASR 112 (FC); Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC, NSW); Hawkett v Tailgate Taxi Trucks Pty Ltd (1990) V ConvR ¶54-400 (SC, SA, Legoe J); W G Clark (Properties) Pty Ltd v Dupre Properties Ltd [1992] Ch 297; Konica Business Machines Australia Pty Ltd v Tizine Pty Ltd (1992) 26 NSWLR 687 (CA); Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) [page 546] 111 FLR 81 (SC, ACT) and, on appeal, DHK Retailers Pty Ltd v Leda Commercial Properties Pty Ltd (FC, Full Court, 21 April 1993, unreported) discussed at (1995) 3 APLJ 59; Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 97,476; Marshall v Snowy River Council (1994) 6 BPR 97,483; Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) and on appeal at (1996) 16 WAR 396; Brunswick Developments Pty

Ltd v Shock Records Pty Ltd (1996) V ConvR ¶54-604; Batiste & Ors v Lenin (2002) 11 BPR 20,403; Belperio v Linehaul Holdings Pty Ltd (2004) 89 SASR 185; Scarcella v Linknarf Management Pty Ltd [2004] NSWSC 1168; Apriaden Pty Ltd v Seacrest Pty Ltd (2005) V ConvR ¶54-704. See also the discussion of the similarities between the doctrine of disclaimer of title and the doctrine of repudiation of contract in W G Clark (Properties) Ltd v Dupre Properties Ltd at [1992] Ch 302–3; and as to disclaimer, see [17.21].

Shevill v Builders Licensing Board and following [16.29] In Shevill v Builders Licensing Board (1982) 149 CLR 620 the lessee under a three-year lease was constantly late with payments of rent. The lessor pressed for prompt payment but accepted late and, sometimes, partial payments. Some 18 months into the term the lessee was two months’ rent in arrears at which time the lessor, in exercise of its right of re-entry, issued and served a statement of claim claiming possession of the land. Although possession was not given up immediately it was conceded that the effect was to forfeit the lease. On the evidence, Gibbs CJ (with whom the other members of the court were in agreement) said (at 149 CLR 624): It is enough to say that the only possible inference is that the lessee was experiencing financial difficulty which made it unable to make the payments of rent at the times required by the lease. It is, however, impossible to conclude that the lessee was unwilling to comply with its obligations. The lessor argued that it was entitled to terminate the contract as a result of the lessee’s breaches and that on doing so it became entitled to damages for loss of the benefits that it would have enjoyed had the contract been performed. In other words, that the breaches of the covenant to pay rent were breaches of an essential term of the contract. Alternatively, the lessor submitted that the contract had been repudiated, the lessee having revealed the necessary unwillingness or inability to perform the contract. Gibbs CJ said (at 625): This argument proceeded on the basis that the general principles of the law of contract, so far as they are relevant to the questions that arise in this case, are equally applicable to leases. A contrary view was

expressed in Total Oil v Thompson Garages [[1972] 1 QB 318], where Lord Denning MR said [at 324] that repudiation which is accepted does not put an end to a lease; he said that a lease, being a demise, does not come to an end like an ordinary contract on repudiation and acceptance, and drew an analogy with the case of frustration. The learned authors of Brooking and Chernov: Tenancy Law and Practice in Victoria, 2nd ed, 1980, at p 197, dispute this view and cite a number of cases, from New Zealand and Canada as well as from Australia, which in their opinion support the [page 547] conclusion that a lease may be determined by an acceptance of a repudiation. I need not enter upon this controversy. I am content to assume that the ordinary principles of contract law are applicable. However, on the evidence, there was no basis upon which the lease could be said to have been repudiated. Nothing suggested that the lessee had any intention ‘… other than to fulfil the contract, according to its terms, to the best of its ability’ (at 626 per Gibbs J; and see 634 per Wilson J). This left the primary argument of the lessors that there had been a breach of an essential term, which also failed on the evidence. Nevertheless, there was no suggestion that this contractual doctrine did not apply. Its application would have enabled the lessor to rescind on breach of a fundamental term and to recover damages for ‘total breach’: see 630 per Gibbs CJ. It is clear from this decision that repudiation is not found or inferred lightly: see particularly 634 per Wilson J. In considering it, one must look to all the circumstances of the case to see whether the conduct ‘amounts to a renunciation, to an absolute refusal to perform the contract’: Mersey Steel and Iron Co v Naylor, Benzon and Co (1884) 9 App Cas 434 at 438–9 (at 314 per Wilson J). On this basis his Honour observed: I know of no authority or of any principle of law which requires me to hold that consistently late payment of rent without more is sufficient to establish repudiation of a lease. It would indeed be a harsh

doctrine. Although not directly in point, the practice in equity of viewing a proviso for re-entry as a security for the payment of rent affords an indication to the contrary: cf Howard v Fanshawe [1895] 2 Ch 581 at 588. Wilson J also found that the evidence did not establish repudiation. The other members of the court, Murphy and Brennan JJ, agreed with the Chief Justice on the repudiation issue. Two years later the issue was again raised, this time in the Victorian Supreme Court in Ripka Pty Ltd v Maggiore Bakeries Pty Ltd [1984] VR 629. In that case Gray J held that the contractual doctrine of repudiation applied to leases, at least as between the original contracting parties: see at 634. As the decision was expressly confined in this way, it was not necessary to determine whether there was substance in the defendant’s argument that application of the doctrine could have difficulties for an assignee of the lease in the event of repudiation by his or her assignor: at 633–4. Nevertheless, his Honour said that he was not persuaded that any significant problem would arise: at 633. Gray J did not have any difficulty in declining to follow Total Oil Great Britain Ltd v Thompson Garages (Biggin Hill) Ltd [1972] 1 QB 318, particularly having reviewed National Carriers v Panalpina (Northern) Ltd [1981] AC 675 and the application by the House of Lords of the reasoning in Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3rd) 710; to these decisions see [6.10]. The assumption in Shevill v Builders Licensing Board (1982) 149 CLR 620 that the doctrine was applicable was not cited in support: see [1984] VR 632. In contrast to Shevill’s case the relevant conduct in the Ripka case involved substantial defaults in rents and other payments and, it was held, evidence of inability to perform the contract, the lessee having stated its [page 548] inability to pay the rent. Gray J decided that this amounted to a repudiation because, having regard also to the lessor’s obligations to financiers, the default went to the root of the contract and made further commercial performance impossible. His Honour, in reaching this conclusion, relied upon the judgment of Gibbs CJ in Shevill’s case (149 CLR at 625) that there may be

repudiation even in circumstances where the party wishes to perform the contract where there is proof that he or she is unable to do so and the breach goes to the root of the contract to make further commercial performance impossible.

Progressive Mailing House v Tabali [16.30] The issue was raised before the High Court again in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17. The lessor was the owner of factory premises which were leased. Under the terms of the lease the lessor was required to carry out specified work prior to the lessee taking occupation. Provision was made for the first payment of rent two months after the date upon which occupation was to be taken by the lessee. The lessee took occupancy prior to the agreed date but paid no rent pending completion of the work. A dispute arose as to whether the work was properly carried out, the lessee claiming that no obligation to pay rent arose until the work was properly carried out. Notwithstanding this, the rent was paid for the first four months (it appears, without prejudice in the first instance) but no rent was paid for the five months that followed, until the action giving rise to the appeal was commenced. There were also other breaches of covenants by the lessee. Mason J reviewed the state of authorities and said (157 CLR at 29: see also Brennan J at 45–51, especially at 45–50): Accordingly, the balance of authority here as well as overseas, and the reasons on which it is based, support the proposition that the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, apply to leases. It will be noticed that this statement, which reflects the views of the other members of the court, does not limit the principles of contract law that apply to leases. The anomalous distinctions commented upon in National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, referred to previously, are thereby avoided. Deane J, while accepting this view in general, did so subject to one qualification (at 53): The qualification is that the further one moves away from the case where the rights of the parties are, as a matter of substance, essentially defined by executory covenant or contractual promise to the case

where the tenant’s rights are, as a matter of substance, more properly to be viewed by reference to their character as an estate (albeit a chattel one) in land with a root of title in the executed demise, the more difficult it will be to establish that the lease has been avoided or terminated pursuant to the operation of the ordinary principles of frustration or fundamental breach. Indeed, one may reach the case where it would be quite artificial to regard the tenant’s rights as anything other than an estate or interest in land (eg, a 99 year lease of unimproved land on payment [page 549] of a premium and with no rent, or only a nominal rent, reserved). In such a case, it may be difficult to envisage circumstances in which conduct of the tenant short of actual abandonment would properly be held to constitute repudiation or fundamental breach or in which anything less than a cataclysmic event such as the ‘vast convulsion’ referred to by Viscount Simon LC in Cricklewood Property and Investment Trust Ltd v Leighton’s Investment Trust Ltd [[1945] AC 221 at 229] would warrant a finding of frustration. Consistently with earlier authorities and the approach taken by the House of Lords in National Carriers v Panalpina in relation to frustration, Mason J agreed (157 CLR at 32–3): … that repudiation of a contract is a serious matter and is not to be lightly inferred and that neither a breach of a covenant to pay rent nor a breach of a covenant to repair, without more, constitutes a breach of a fundamental term, nor amounts to a repudiation of a lease. Being more specific, Mason J continued (at 33–4): This finding, though it comes close to a finding of repudiation, stops short of it. What needs to be established in order to constitute a repudiation is that the party evinces an intention no longer to be bound by the contract or that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any

other way: Shevill [(1982) 149 CLR at 625–7]. Likewise, the primary judge’s finding does not amount to a finding that there was a fundamental breach of contract in the sense that the party at fault, though wishing to perform the contract, was guilty of such default in performance that the breach went so much to the root of the contract that it made commercial performance of it impossible. Whether fundamental breach is but another illustration of repudiation, as Mahoney JA thought in Honner v Ashton [(1979) 1 BPR 9478 at 9490], or is a separate category, is a question which may be put to one side. Repudiation or fundamental breach of a lease involves considerations which are not present in the case of an ordinary contract. First, the lease vests an estate or interest in land in the lessee and a complex relationship between the parties centres upon that interest in property. Secondly, this relationship has been shaped historically in very large measure by the law of property, though in recent times the relationship has been refined and developed by means of contractual arrangements. Thus, traditionally at common law a breach of a covenant by a lessee, even breach of the covenant to pay rent, conferred no right on the lessor to re-enter unless the lease reserved a right of re-entry: Lane v Dixon [(1847) 3 CB 776 [136 ER 311]]; Doe d Dixon v Roe [(1849) 7 CB 134 [137 ER 55]]. And in Equity the proviso for re-entry was treated as a security for the payment of the rent (Howard v Fanshawe [[1895] 2 Ch 581 at 588]; Ezekiel v Orakpo [[1977] QB 260 at 268–9]), so that on payment of the rent Equity would relieve against the forfeiture: Dendy v Evans [[1910] 1 KB 263]. The object and effect of s 129 of the Conveyancing Act was to give further protection to the lessee and to preclude forfeiture of his interest in property within the sphere of the section’s operation, except in accordance with its terms. These incidents of the law of landlord and tenant indicate that mere breaches of covenant on the part of the lessee do not amount to a repudiation or fundamental

[page 550] breach. Indeed, it is of some significance that the instances in which courts have held that a lessee has repudiated his lease are cases in which the lessee has abandoned possession of the leased property. But too much should not be made of this as very few cases of repudiation by lessees have come before the courts. I would therefore specifically reject the appellant’s submission that abandonment of possession is necessary to constitute a case of repudiation by a lessee. On the other hand, it should be acknowledged that it would be rare indeed that facts which fell short of abandonment would properly be seen as constituting repudiation by the lessee in the case of a long lease at a rental which was either nominal or but a fraction of the amount which could be obtained in the market place. On the facts of this particular case it was held that the lessee’s conduct did amount to repudiation, there being no basis in the provisions of the lease to support the lessee’s refusal to pay (see 157 CLR at 37 (per Mason J), 38 (per Wilson J), 40 (per Brennan J), 51 (per Deane J); Dawson J agreed with Mason J, and the additional observations of Wilson and Deane JJ). Whether conduct is repudiatory is determined on an objective consideration of the acts and omissions of the repudiating party: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 647–8, 658. The question is whether, viewed objectively and in context, the conduct of the party alleged to have repudiated would convey to a reasonable person, in the position of the other party, that the first party had renounced the contract or did not intend to perform it except in the manner substantially inconsistent with its terms: Rigg v Lee Loy Seng [1987] WAR 333; Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (25 September 1996) WASC (FC), BC9604734. The application of the contractual doctrine of repudiation to leases brings with it the right to damages in accordance with ordinary contractual principles. Thus the lessor may sue the lessee ‘for damages for loss of benefit of the tenant’s covenant to pay future rent and outgoings’: 157 CLR at 55 (per Deane J). More specifically, Brennan J said (at 47): Subsequently, in Lamson Store Service Co Ltd v Russell Wilkins & Sons

Ltd [(1906) 4 CLR 672 at 684], Griffith CJ stated the measure of the damages: In the ordinary case of a demise for a term of years with an express covenant to pay the rent, if the lessee unequivocally repudiates the lease and abandons the land, the lessor may at his option bring an immediate action for breach of covenant, in which he will be entitled to recover the full amount of the agreed rent for the whole term, less such sum as a jury may think he is likely to derive as profits from the use of the land during the residue of the term: Buchanan v Byrnes [(1906) 3 CLR 704]. This is the … ordinary rule of damages. Thus in Hughes v NLS Pty Ltd [[1966] WAR 100 (affirmed on different grounds: (1966) 120 CLR 583)] a repudiation of a lease by the lessee was followed by a surrender and Jackson J [[1966] WAR at 102] applying Buchanan v Byrnes, held that: ‘Until surrender, [the lessor] can sue for rent as such; after surrender, he is limited to damages for loss of rent flowing from the lessee’s breach of contract. [page 551] See also Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 127 and following (per Priestley JA) and 146 and folowing (per McHugh JA). As to the estimation of the value of the lease term, see Buchanan v Byrnes (1906) 3 CLR 704, especially at 715; and see [13.4]. The ordinary rule is subject to any circumstances that may operate in mitigation of damages: see Buchanan v Byrnes at 3 CLR 719 (per Barton J); and see 57 ALR at 630–1 (per Brennan J); see also Glentham Pty Ltd v Luxer Holdings Pty Ltd [2006] WASC 132. However, in the application of the contractual doctrine to leases, their dual proprietary and contractual character should not be overlooked. Thus, in holding that ordinary contractual principles do apply to leases, Brennan J noted that ‘the character of a lease as a demise distinguishes the consequence of this application from their application

to a contract that is not also a demise’: 157 CLR at 40. As a result of this duality it follows that damages for repudiation are only recoverable where repudiation occurs prior to the determination of the term of the lease: at 39. The relationship between the rights which flow from the application of this doctrine and those which flow from what might be termed the proprietary characteristics of leases were considered. The general position was summarised by Brennan J as follows (at 39): When a lease is determined prior to the expiry of the term, the covenant to pay rent for the unexpired portion of the term ceases to bind the lessee. Once the lease is determined, the lessee commits no breach of covenant by reason of his non-payment of rent for that unexpired portion: Jones v Carter [(1846) 15 M & W 718 at 726 [153 ER 1040 at 1043]]. A lessor who, under a proviso for re-entry, serves the lessee with process for recovery of possession is entitled to mesne profits for the period during which the lessee remains in possession after service: Canas Property Co Ltd v K L Television Services Ltd [[1970] 2 QB 433)]. The lessor may thereby recover an amount equal to the rent in respect of that period. But mesne profits are damages for trespass; mesne profits are not rent, nor are they damages for breach of a covenant to pay rent. This analysis explains the manner in which damages were calculated in Hughes v NLS Pty Ltd [1966] WAR 100, referred to above: and see [11.17]. See also Nangus Pty Ltd v Charles Donovan Pty Ltd (in liq) [1989] VR 184 (FC) where the question of the calculation of damages was considered in circumstances where there had been changes in the ownership of the reversion since the repudiation (discussed in [16.32]); and see Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) 316 at 335–6 and on appeal at (1996) 16 WAR 396; and see [11.17] and [16.32]. As appears from the review of the authorities in Nangus (including Progressive Mailing House), and others, the right to damages for loss of bargain vests at the time of the acceptance of the repudiation: see [16.32]; see also Jones v Edwards (1994) 3 Tas R 350 at 357 and Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16 WAR 396. Where a breach does not amount to a repudiation, the right to damages vests at the time of the breach: G & A Lanteri Nominees Pty Ltd v Fishers Stores Consolidated Pty Ltd [2007] VSCA 4.

[page 552] In Brunswick Developments Pty Ltd v Shock Records Pty Ltd (1996) V ConvR 54-604 Sundberg J summarised the principles governing the assessment of damages where there has been a repudiation of a lease as follows: The usual measure of damages is the difference between the rent reserved by the lease and that recovered on a reletting of the premises: Lamson Store Service Co Ltd v Russell Wilkins and Sons Ltd (1906) 4 CLR 672. But the general principle is that stated by O’Connor J in Buchanan v Byrnes (1906) 3 CLR 706 at 721, that the landlord can recover damages for the loss of the benefit of the lease. Or as Deane J put it in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 55, the landlord can ‘in accordance with ordinary contractual principles sue the tenant for damages for loss of the benefit of the tenant’s covenant to pay future rent and outgoings’. Where, as here, the landlord does not re-let but sells, I see no reason why it should not recover the difference between the value of the premises with the tenant in occupation and their value without a tenant. That accords with the general principle that a person who has sustained loss by reason of a breach of contract is entitled to be placed in the same position, so far as money can do it, as if the contract had been performed: Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 at 365; The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 81, 98, 117, 134. In Peet and Co v Rocci [1985] WAR 164, where the lessor had not re-let but had sold the premises at a loss, Rowland J said, at 178: BC9605667 at 32: … there are several ways one may assess damages for breach of a lease agreement and in the end the method adopted may have to depend upon the circumstances of the existing case and the attitude taken by the lessor. In my view in this case the true measure of damages is the difference between the value of the premises as a going concern with a tenant in possession pursuant to the contractual term and one without a tenant in possession at the relevant time at which such valuation is to be

made being either the date of the breach or the date of acceptance of that breach. I do not regard loss of the value of the premises as being too remote in the present case. In C Czarnikow Ltd v Koufos [1969] 1 AC 350 at 385, in a passage approved by Mason CJ, Brennan and Dawson JJ in Amann at 92, 99, Lord Reid said: The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation. It follows from the application of the ordinary rule that damages are to be discounted to take account of the immediate payment of future economic loss: see Hughes v NLS Pty Ltd [1966] WAR 100 and NLS Pty Ltd v Hughes (1966) 120 CLR 583; discussed at [11.17], [13.4]. See also Charmar Electrical Pty Ltd v Minda Inc (1990) 55 SASR 112 (FC); Bayside Developments Pty Ltd v Copperart Pty Ltd at (1994) 11 SR (WA) 334–5 and on appeal at (1996) 16 WAR 396; and Exford Pines Pty Ltd v Vlado’s Pty Ltd (7 February 1996) (Vic Sup Ct, BC9000472). As has been noted, it also follows from the application of the ordinary rule with respect to contractual damages that the [page 553] party seeking damages must take steps to mitigate its loss and damage: see Vickers and Vickers v Stichtenoth Investments Pty Ltd (1989) 52 SASR 90; Charmar Electrical Pty Ltd v Minda Inc; and Jones v Edwards; and see Tall-Bennett & Co Pty Ltd v Sadot Holdings Pty Ltd (1988) 4 BPR 97,295 (SC, NSW, Young J); J & S Chan Pty Ltd v McKenzie (1994) ANZ ConvR 610 (SC, ACT, Higgins J) (noted (1994) 2 APLJ 195), and see Glentham Pty Ltd v Luxer Holdings Pty Ltd; and see [11.16] in relation to an action for rent; see also [11.17] and [13.4]. In relation to the extent of the duty to mitigate, Yeldham J

said in Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd [1976] 1 NSWLR 5 at 9: Although a plaintiff cannot recover for loss consequent upon a defendant’s breach of contract, where he could have avoided such loss by taking reasonable steps, nonetheless a defendant who seeks to rely upon a failure to mitigate must show that the plaintiff ought, as a reasonable man, to have taken certain steps for the purpose of doing so. The plaintiff is not under any obligation to do anything other than in the ordinary course of business, and the standard is not a high one, since the defendant is a wrongdoer. See generally Chitty on Contracts, 23rd ed, vol 1, par 1482 et seq, 691 et seq. See also Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, at 506: The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken. It is clear that the plaintiff is not required to sacrifice or risk any of his property or rights in order to mitigate his loss. See generally also McGregor on Damages, 13th ed, par 209 et seq, 148 et seq and Cheshire and Fifoot, Law of Contract, 3rd ed, Aust, p 733 et seq. See also Jones v Edwards (1994) 3 Tas R 350 at 358 where this passage is set out without any adverse comment. The onus of proof on the issue of mitigation is on the defendant and, if the defendant fails to show that the plaintiff ought reasonably to have taken certain mitigating steps, then the normal measure of damages applies: Wenkart v Pitman (1998) 46 NSWLR 502 at 523 per Powell JA and see also Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 at [187] and Young v Lamb [No 2] [2001] NSWSC 1014 per Austin J at [27]–[31]; Jones v Edwards at (1994) 3 Tas R 359, referring to Watts v Rake (1960–61) 34 ALJR 186 at 187 (per Dixon CJ) and Metal Fabrications (Vic) Pty Ltd v Kelcey [1986] VR 507. As to the particular circumstances in Jones v Edwards, Wright J said (at 359):

In my opinion it has not been shown that the plaintiffs failed to take all reasonable steps to mitigate their loss once the defendants ceased paying rent and repudiated the agreement. The plaintiffs engaged the services of estate agents and the property was advertised as being available for lease, both by the plaintiffs and their agents. The plaintiff also placed large signs in each shop window. Some prospective tenants made inquiries but these came to naught, through no fault of the plaintiffs or their agents, until the existing tenants entered into occupation of the two shops in 1993. [page 554] See also Bayside Developments Pty Ltd v Copperart Pty Ltd at (1994) 11 SR (WA) 337 and on appeal at (1996) 16 WAR 396. As to pleading damages, and with respect to mitigation, see Halsbury’s Laws of England, 5th ed, vol 29, para [627] (Damages). Although it is clear from Progressive Mailing House and other cases to which reference is made that no duty to mitigate arises until the repudiation is accepted — for it is only then that a party has elected to pursue contractual damages — this should probably be emphasised; see also, by way of example, Jones v Edwards at (1994) 3 Tas R 357; see also [11.16], [11.17] and [13.4]. As has been emphasised already, an essential element in an action for damages for repudiation is acceptance of the repudiation: ‘That is because the liability in damages is substituted for the executory obligations to which acceptance of repudiation puts an end’ (per Brennan J at 48, adopting the explanation of this proposition by Lord Diplock in Lep Air Services v Rolloswin Ltd [1973] AC 331 at 350). A question which arises in relation to the manner of acceptance of the repudiation is whether termination of a lease under the proviso for re-entry amounts to affirmation of the contract. Mason J (at 618) doubted Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 in so far as it held that re-entry is required to effect a forfeiture unless dispensed with by contract. In his Honour’s opinion the better view is ‘that re-entry is essential only where the parties stipulate that advantage shall not be taken of a forfeiture except by an entry upon the land’: see [17.7], [17.22]. The lessor

does, therefore, in most cases, have a choice in the manner in which he or she accepts the repudiation, so there is the basis for an argument that the manner chosen is an election. However, Mason J continued (at 31): Termination in the exercise of a contractual power is not an affirmation of the contract which debars the innocent party from suing for damages for breach on the ground of repudiation or fundamental breach. This is because the termination, so far from insisting on performance by the party at fault, brings to an end his obligation to perform his promise in specie. Nor can it be said in the case of repudiation or fundamental breach, that loss of the bargain is attributable to the innocent party’s exercise of his contractual power to terminate. It is different in the case of termination for non-essential breach, as Shevill demonstrates, because, by terminating pursuant to the contract at that stage, the innocent party puts it beyond his power to insist on performance, thereby bringing to an end any possibility of repudiation or fundamental breach with consequential damages for loss of bargain. It follows from this view that the lessor is not obliged to elect between remedies. Taking the question from this perspective, Deane J said (at 55–6): The landlord was not obliged to elect between the two grounds for terminating the lease: it was entitled to rely upon them both. A party entitled to terminate a contract for repudiation or fundamental breach may rely upon both a specific contractual right to terminate the contract and the common law right to terminate unless, as a matter of construction, the former excludes the latter: see, eg Rawson v Hobbs [(1961) 107 [page 555] CLR 466 at p 480]; Shepherd v Felt and Textiles of Australia Ltd [(1931) 45 CLR 359 at pp 377–8] and, generally, the cases referred to in Carter, Breach of Contract (1984), paras 914, 1006). More specifically, where a contractual right to terminate for past breach and the common

law right to terminate for repudiation or fundamental breach exist concurrently, the reliance upon the contract involved in the exercise of the contractual right to terminate will not preclude the recovery of damages for loss of the future benefit of the contract by reason of repudiation or fundamental breach unless the contract expressly or impliedly so provides: cf Yeoman Credit Ltd v Waragouski [[1961] 1 WLR 1124; [1961] 3 All ER 145]. However, there may be circumstances where the lessor is forced to elect which species of remedy to pursue, particularly if the proviso for re-entry precludes other claims. Brennan J considered the lessor’s position in some detail and, it is submitted, his Honour’s statements illustrate this point (at 49– 50): Where the lease is liable to forfeiture, as it was in the present case, enforcing the forfeiture both determines the lessee’s interest in the land and constitutes the lessor’s election to accept the repudiation. Conversely, a waiver of the forfeiture constitutes the lessor’s election to keep the lease on foot. It is not necessary to consider the possible effects of statutory restrictions on the enforcing of a forfeiture or of the granting of relief against forfeiture, except to bear in mind that the condition on which the lessee’s liability in damages for repudiation arises is that he ceases to be liable to perform the executory obligations resting on him under the lease. Once the lessee’s interest is determined, there is no reason why damages should not then be recoverable, provided the lessor has not previously made an election to keep the lease on foot. Where it is necessary for a lessor to determine a lease by re-entry under a proviso for re-entry contained therein, does his reliance on the proviso evidence an election to keep the lease on foot? In Johnstone v Milling, [(1886) 16 QBD 460] where the lease conferred a power on the lessee to give a notice putting an end to the term at the expiration of the first four years and the lease was determined accordingly, Lord Esher MR regarded the giving of the notice as indicative of an affirmation of the contract. He said [16 QBD at pp 468–9]: He did not renounce the lease or give up the premises. He did

not do any act which affected the existence of the contract. He made no declaration of intention to treat it as rescinded except for the purpose of bringing his action upon it. On the contrary, at the time fixed by the contract he gave the requisite notice to determine the lease. The giving of the notice was to be seen in conjunction with the lessee’s failure to renounce or give up the premises. His conduct as a whole affirmed the contract. A lessor is in a different position if the lessee remains in possession. In that event, a lessor who enforces a forfeiture in accordance with the lease as soon as he is entitled to do so after he has knowledge of the lessee’s anticipatory breach cannot be taken to elect not to enforce a claim for damages. The mere continuance of the lease pending forfeiture is not an election either way. The election to be made by a lessor is between continuing to bind the lessee to performance of his executory obligations and putting an end to those obligations so that the substitutionary liability in damages will arise. Enforcing a forfeiture may be an effective means of accepting a repudiation by anticipatory breach, though the power to enforce the forfeiture may depend upon some other breach [page 556] of covenant or upon some event (eg, going into liquidation) which is no breach of covenant. In the present case it was conceded that the service of the statement of claim determined the lessee’s interest in the land. The statement of claim clearly accepted the lessee’s repudiation and sought damages accordingly. Thus the elements of the lessor’s cause of action were established. The assessment of damages by Lusher J conformed to principle. It was submitted that cl 10.1 of the lease limits the damages recoverable by the lessor to damages for past breaches of covenant. The submission is not borne out by the language of the clause. The

clause specifies the events on the occurrence of which the right to reenter arises and preserves ‘any claim which the Lessor may have against the Lessee in respect of any breach of the covenants … to be observed or performed’. A claim for damages for anticipatory breach answers precisely that description: see per Lord Diplock in Lep Air Services v Rolloswin Ltd [[1973] AC 331]. (Mason and Deane JJ expressed similar views on the effect of the proviso for re-entry in this case: at 32 and 55–6.) It seems that a lessor will not be at risk of unwittingly electing to pursue only ‘contractual’ remedies as long as the proviso for re-entry does not by its terms preclude (see 31–2 per Mason J) other claims (and preferably expressly preserves them) and the lessor does not in some way affirm the lease after the repudiation. The service of any notices would appear to carry considerable risks unless required only for the purpose of enforcing a forfeiture. Concluding, Brennan J noted (at 50–1) that there may be some procedural difficulties associated with joining a claim for damages for repudiation with an action for possession by way of enforcement of the forfeiture. Difficulties would arise if the cause of action for damages does not accrue until the writ is served: see Wigan v Edwards (1973) 1 ALR 497. As to the quality of the conduct needed to constitute an acceptance, in Sargent v ASL Developments Ltd (1974) 131 CLR 634 Stephen J said (at 646): The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease (Viscount Dilhorne in the Kammins Ballrooms Case [1971] AC, at p 873; Herring CJ in the Coastal Estates Case [1965] VR, at p 436; Kitto J in Tropical Traders Ltd v Goonan (1964) 111 CLR 41, at p 56). However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election (Elder’s Trustee Case (1941) 65 CLR at p 618). There need be no expressed intention to elect, nor will an express disclaimer of

such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right (Croft v Lumley (1858) 6 HL Cas 672 [10 ER 1459]; Matthews v Smallwood [1910] 1 Ch, at p 786). For an election there need be no actual, subjective intention to elect (Scarf v Jardine (1882) 7 AC, at p 361), an election is the effect which the law attributes to conduct justifiable only if such an election had [page 557] been made (per Kitto J in Tropical Traders Ltd v Goonan (1964) 111 CLR, at p 55); cf S Kaprow & Co Ltd v Maclelland & Co Ltd, per Wrottesley LJ [1948] 1 KB 618, at pp 629–630. See also Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81; Saade v Vergados [1996] NSWCA 463; Christiansen v Klepac [2001] NSWSC 385; and GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1 per Finn J at [359]. Where acceptance is not express an inference may be drawn from facts and circumstances: see Wood Factory Pty Ltd v Kiritos Pty Ltd and the other cases to which reference is made in [16.31]. The onus of proof that the contract has been brought to an end lies on the party alleging the termination: J Kitchen & Sons Pty Ltd v Stewart’s Cash and Carry Stores (1942) 66 CLR 116 per Latham CJ and Mc Tiernan J at 126. Because of the dual character of leases, it appears that the application of the doctrine of repudiation is restricted in that a lessor cannot determine a lease by mere acceptance of the lessee’s repudiation of obligations under the covenants of the lease where the lease is not liable to forfeiture. In expressing this view, Brennan J, by way of explanation, said (at 43): ‘[i]t would be a curious law which permitted a lessee in breach of covenant to seek relief against forfeiture while denying the prospect of relief to a lessee who had committed an anticipatory breach’ (see also Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 132 per Priestley JA). In practice, provisos for re-entry are drawn widely, to be triggered by any breach of covenant. Therefore it follows

that the conduct claimed as repudiation must be of such a nature as to preclude the lessee obtaining relief against forfeiture. This is consistent with the approach the courts have taken in relation to the nature of repudiatory conduct and is consistent with the views of Mason J in the context of an analysis of Shevill’s case (at 30–1). The converse proposition follows from the decision in that case; namely, that the mere fact that breach of a particular covenant triggers the proviso for re-entry, according to its terms, does not make breach of that covenant a breach of an essential term. Where a party to a lease has engaged in repudiatory conduct or has breached an essential term of the lease so as to deprive the other party of the substantial benefit of the contract, the party in breach cannot accept a repudiation of the lease by the other party: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 440–2; Nina’s Bar Bistro Pty Ltd v MBE Corp (Sydney) Pty Ltd [1984] 3 NSWLR 613 at 620–1 and 632; Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd Receiver & Manager Appointed (Formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462 at 479–80; Enhill Pty Ltd v Bonsoc Pty Ltd [2003] VSC 333 and on appeal ([2007] VSCA 108). [page 558]

Wood Factory v Kiritos and following [16.31] The issues raised in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 were raised the following year in the New South Wales Court of Appeal in Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 where application of the contractual doctrine of repudiation in circumstances where there was a surrender by operation of law was considered. In this case the lessor granted a lease of factory premises for three years but the lessee, which had difficulty in paying rent, substantially moved out of the premises towards the end of the first year. The lessor re-let the factory some months later to a new lessee at a lower rent. The lessor then brought proceedings against the first lessee claiming rent unpaid to the grant of the new lease and the difference between the rent payable under the new and the old leases, until the date the first term would have ended.

The judgment of Priestley JA (who was in the majority, with McHugh JA) contains a useful summary of the authorities as they related to surrender and repudiation of leases prior to the Progressive Mailing House case. After analysing the judgments in that case Priestley JA said (at 132; see also the judgment of McHugh JA at 143–4): Perhaps the most accurate way of stating that ratio is that the rules of contract law which permit a party to a contract not at fault in regard to that contract to elect to terminate it by accepting either repudiatory conduct or breach of an essential term by the other party will apply to a lease when both (i) the landlord is in a position to forfeit the lease and (ii) the conditions for application of repudiation doctrine are fulfilled. (Those conditions may of course frequently be fulfilled by the same facts that put the landlord in the position to forfeit the lease.) Finally, it seems to me to be important to recognize that Progressive Mailing is a decision which states clear principles of the law of leases which neither need for their authority, nor directly depend on earlier case law. Buchanan represented a stage in the evolution towards the principles now stated, but it did not itself state them, nor will it be necessary in future to puzzle over some of the difficult passages in the reasons for judgment in that case. Progressive Mailing is a clear root of title for the present and future law in Australia, behind which it will be unnecessary to go. Priestley JA then summarised the state of the law on repudiation of leases as it relates to their surrender (at 133–4): It is now possible to summarize the state of the law relevant to the present appeal by reference to different types of surrender. 1. Surrender by express agreement. This puts an end to the lease. The landlord has no claim for damages for the early termination. Questions of repudiation cannot arise. 2. Surrender by operation of law. (a) Where this comes about by an agreement either manifested by or inferred from a giving up of possession by the tenant and immediate resumption of possession by the landlord, the position is the same as with surrender by express agreement. (b) Another situation under this heading

comes about where the tenant abandons the premises without agreement with the landlord, in circumstances manifesting his intention to put the lease to an end, and [page 559] the landlord does not retake possession until some time later. There are actually two varieties of this kind of situation one of which results in a surrender, and the other of which does not: (i) Where the landlord, in retaking possession does so on his own account. This is the situation where Progressive Mailing has shown the legal result is different from what it was once thought to be. In Buchanan for example, it was taken for granted that a surrender by operation of law became complete upon the landlord taking possession on his own account and the landlord could not get damages for loss of the lease. Under the Progressive Mailing doctrine, upon the landlord taking possession on his own account the lease still comes to an end (and the situation can still be called an example of surrender by operation of law as well as a contractual termination following accepted repudiation or breach of fundamental term) but the landlord is entitled to any damages suffered by loss of the lease. (ii) Where the landlord, as discussed in Walls v Atcheson [(1826) 3 Bing 462; 130 ER 591] and as occurred in Oastler v Henderson [(1877) 2 QBD 575], takes possession, not solely on his own account, but either on the tenant’s account or for the benefit both of the tenant and himself. Then, so long as that position remains, the lease is not terminated, there is no surrender by operation of law and the tenant remains liable for the rent. As a matter of theory, there seems no reason why the landlord, on this approach, should not actually re-let on account of the tenant, credit the new lease rental against the continuing tenant’s obligation to him and claim the balance. There was however a very strong tendency to treat the leasing to a new tenant as a surrender of the old lease, no doubt

strengthened because it avoided the problem of distinguishing between a case where the landlord was granting the new lease on the tenant’s account and where he was not. The importance of this type of situation was that it kept the lease on foot and left the landlord, under the old law, in a better position than in the previous situation described. Now that the position in regard to that previous situation has changed, there would seem to be no practical difference in result for a landlord between the two situations. In the former, the right to damages for loss of the lease will enable him to recover rent lost following the termination of the lease as part of his damages, and in the latter, the breach of the covenant to pay rent under the continuing lease will enable him to recover what will be substantially the same amount. (Further as to avoidance of a surrender by operation of law (and acceptance of repudiation) by a re-letting on behalf of the tenant, see [16.21].) This statement follows from his Honour’s statement of the ratio in the Progressive Mailing House case and applies it in circumstances where there has been a surrender by operation of law. Acceptance of the repudiatory conduct is to be implied by the lessor’s resumption of possession, unless there are other factors which mitigate against this implication. On the facts, Priestley and McHugh JJA held that the conduct of the lessee amounted to repudiation of the lease, which was accepted by the lessor on granting the second lease, an act that also constituted surrender by operation of law. The lessor was, therefore, entitled to damages as claimed for the loss of the lease. Samuels JA did [page 560] not accept that the lessee’s conduct, in the absence of an actual refusal by the lessee to pay the rent, was repudiatory. His Honour did accept that surrender by operation of law occurred on the grant of the second lease which had the effect of discharging the lessee from any further obligations under the lease. The lessee would, on this basis, only be liable to pay unpaid rent to that date.

The question whether formal communication to the lessee of acceptance of repudiation is required was considered by Samuels and McHugh JJA. McHugh JA put the position as follows (at 146; see also the judgment of Samuels JA at 117–19): In his judgment Samuels JA draws attention to the necessity for the plaintiff not only to have elected to accept the repudiation but also to have communicated it to the defendant. His Honour refers to the statement in Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 655–6 where Mason J said that essential ‘to the making of an election is communication to the party affected by words or conduct of the choice thereby made’. But I do not think that Mason J meant that the defaulting party must always receive a direct notification from the person rescinding. In Holland v Wiltshire (1954) 90 CLR 409 Dixon CJ said (at 416) that the vendor’s ‘election to treat the contract as discharged by the purchasers’ breach was sufficiently manifested by his proceeding to advertise the property for sale, and by his selling it’. No doubt this was what Mason J had in mind when he referred to the communication of the election ‘by words or conduct’. In Tropical Traders v Goonan (1964) 111 CLR 41 at 55, which was one of the two statements to which Mason J referred, Kitto J said: ‘… Not that election is a matter of intention. It is an effect which the law annexes to conduct which would be justifiable only if an election had been made one way or the other …’. Moreover in the present case the facts which constituted the surrender by operation of law and the acceptance of the repudiation were known to the defendant. Mr Callum and the defendant’s solicitors were well aware that Insul Fluff had entered into occupation of the premises as tenant. There is no support in the judgment of Priestley JA for any such notice requirement with respect to acceptance of the repudiation. In particular, such a requirement appears to be at odds with his Honour’s summary of the law at (1985) 2 NSWLR 133–4 (set out above). More generally, it is not supported by the cases on repudiation of leases and runs counter to the approach of the courts to surrender by operation of law which very heavily relies on inference: see [16.17], [16.18] and [16.19]. This is not to say, of course, that formal notice of acceptance of repudiation may not be desirable in particular

circumstances to avoid arguments as to whether and when it was accepted. As to implying acceptance of repudiation from particular facts and circumstances, in the absence of express acceptance, see, for example, Vickers and Vickers v Stichtenoth Investments Pty Ltd (1989) 52 SASR 90 at 92; and Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 at 325 (Dist Crt, WA) and on appeal (1996) 16 WAR 396. There have been a number of other decisions in which the question of repudiation has arisen but which are more in the nature of illustrations of application of the principles settled in the authorities considered, rather than fresh statements of law. In [page 561] Nai Pty Ltd v Hassoun Nominees Pty Ltd [1985–86] ANZ ConvR 349 (SC, SA) the repudiatory conduct included both a breach of the covenant to pay costs and taxes and the covenant not to assign without the lessor’s consent. The New South Wales Court of Appeal reviewed the authorities in J & C Reid Pty Ltd v Abau Holdings Pty Ltd (1988) NSW ConvR ¶55-416. The issue arose in that case because of the failure by a tenant to pay rent as a result of its financial difficulties. It was held that the tenant’s conduct did not amount to repudiation. The conduct did not evince any intention not to be bound by the lease, neither did it make commercial performance of the lease impossible. There was reason to believe that the tenant would repay arrears of rent. Hope JA (with whom McHugh JA agreed) noted a number of unresolved problems in relation to the application of contractual principles to leases. In particular his Honour said (at 51): Again I am not clear how a lease for a term is to be terminated for breach or repudiation otherwise than by re-entry or its equivalent, unless there is an express surrender by the lessee or a surrender by operation of law. The final and absolute act of election which the common law seems to have required to terminate a lease for breach (absent a surrender) seems always to have been re-entry or its equivalent.

The issue was not one which was necessary to resolve on the appeal. However, his Honour concluded by expressing agreement with the views expressed by Priestley JA in the Wood Factory case (1985) 2 NSWLR at 132, which are set out above. Kirby P agreed with Hope JA but also expressed views in relation to the undesirability of the use of the concept of ‘fundamental breach’ in relation to termination of leases: see [16.34]. TallBennett & Co Pty Ltd v Sadot Holdings Pty Ltd (1988) 4 BPR 9522; NSW ConvR ¶55-428 was not concerned with the repudiation issue because the lessor did not elect to treat the lessee’s failure to pay rent as a repudiation. On the authorities the failure may not have been sufficient to constitute repudiation, but the issue did not arise. The case illustrates the principle that conduct that may amount in law to repudiation must first be accepted as such by the relevant party before the conduct may be characterised as repudiation. It is also authority for the proposition that a lessor may elect to affirm the lease and sue for rent as it falls due. Conversely, if a repudiation is accepted there is, on the application of general contractual principles, a duty to mitigate damages; for example, by attempting to re-let the premises.

Nangus v Charles Donovan [16.32] In Nangus Pty Ltd v Charles Donovan Pty Ltd (in liq) [1989] VR 184 the Victorian Full Court was required to consider the nature of the right acquired by a lessor on acceptance of a repudiation, because there had been changes in the ownership of the reversion since the repudiation. Kaye and Southwell JJ in a joint judgment (with which Young CJ agreed) held that such changes in ownership could make no difference to the assessment of damages, as the right of the lessors to damages became vested on their acceptance of the repudiation. Their Honours considered [page 562] the authorities, and other events that may be relevant to the assessment of damages (at 188–90): These opposing submissions render it necessary for us to examine the

nature of the right acquired by a lessor who accepts a repudiation of a lease. Bearing in mind that the ordinary principles of contract apply, a useful starting point is the statement in McGregor on Damages, 15th ed, at para 29, where it is said: ‘… the basic loss to the other party is the market value of the benefit of which he has been deprived through the breach. Put shortly, the plaintiff is entitled to compensation for the loss of his bargain.’ At para 986 the learned author refers to Marshall v Mackintosh (1898) 78 LT 750 where the lessor had re-let the premises at a lower rent and damages were assessed on the basis of the difference between the contractual rent under the broken agreement and the new rent. In Sunbird Plaza Pty Ltd v Maloney (1988) 77 ALR 205; 62 ALJR 195, a case to which we must later refer in dealing with the question of the liability of the guarantor, Mason CJ said, at (ALR) p 212; (ALJR) p 199: ‘Loss of bargain damages are recoverable only if the contract is at an end. Once termination due to the defendant’s wrongful conduct is established the plaintiff is entitled to damages for loss of bargain’. At (ALR) p 221; (ALJR) p 204 Gaudron J referred to damages flowing from a breach of a contract of sale of land as ‘damages for loss of bargain and consequential loss’. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd, Mason J (with whom Wilson and Deane JJ agreed generally, Dawson J agreeing) said, (CLR) at p 31, that repudiation or fundamental breach ‘entitles the innocent party to rescind the contract and sue for damages for loss of the bargain’. Brennan J, (CLR) at pp 46–7, quoted with approval dicta of Barton J in Buchanan v Byrnes where the latter said, at p 719: ‘… the plaintiff was then entitled to claim in an immediate action, prospectively, such damages as would be caused by a breach at the appointed time, subject to any circumstances which might operate in mitigation of damages …’. Deane J, at p 55, said: ‘It follows that the landlord was entitled to terminate the lease and in accordance with ordinary contractual

principles sue the tenant for damages for loss of the benefit of the tenant’s covenant to pay future rent and outgoings’. In Buchanan v Byrnes the Court was considering the repudiation after five years of a 15 year lease of a hotel, which the lessee abandoned. Griffiths, CJ said, at p 714, that upon breach: ‘the plaintiff had at once a complete cause of action against him. He was entitled to bring an action forthwith for the breach of that covenant, and he was entitled to such damages as would properly flow from such a breach of covenant’. On the question of damages, his Honour said, at p 715: ‘The natural damage is the loss likely to be sustained by the plaintiff during the period for which the covenant ought to be kept’. His Honour went on to observe that where an employer unequivocally breaks a contract of employment, the employee can recover not wages, but damages, usually to be assessed as the difference between the wages which would have been earned under the contract and the wages which might reasonably be expected to be earned. O’Connor J, at p 721, said: ‘The landlord’s rights upon that breach were to get such compensation and damages as the jury might think that he was entitled to for the loss of the benefit of the 15 years’ contract’. [page 563] In Moschi v Lep Air Services Ltd [1973] AC 331, at p 345 Lord Reid said in a passage, which we later quote verbatim, that when a contract is brought to an end by repudiation accepted by the other party all the obligations in the contract come to an end and they are replaced by operation of law by an obligation to pay money damages. Accordingly, there exists what appears to us to be powerful authority for the proposition that at the time of the acceptance by the lessors of the lessee’s repudiation of the lease, the lessors were vested with a right to damages for loss of their bargain. Subsequent events may touch upon the extent of that loss, but the damages fall to be

assessed as at the date of the acceptance of the repudiation. The same principle applies in actions of an entirely different nature, for example, an action for damages for personal injuries, or under the Wrongs Act 1958, in respect of the death of a person upon whom the plaintiff is dependent. In Wright v West Australian Trustee and Agency Co Ltd [1987] VR 771, Murphy J (with whom Gray and King JJ agreed), at p 783, referred to Ruby v Marsh (1975) 132 CLR 642 where it was held that the right to damages for personal injuries accrues when the act is done or the event occurs which leads to liability, and, at p 784, his Honour went on to say: ‘… at law the loss is suffered at the date of receipt of the injuries, and that is the loss that should be assessed’ (emphasis added). In Nickolau v Papasavas Phillips & Co [1988] VR 682, Young CJ referred, at p 689, to ‘the general principle of English law that damages must be assessed as at the date when the damage occurs’. We have said that Mr Southall was unable to cite any authority in direct support of his principal submission that changes in the proprietary rights of the lessors affected the assessment of the damages to which they are entitled. We know of no principle of law which could support the submission. It tends to equate proprietary rights with the lessors’ contractual rights, which are the subject of this action. It cannot be that variations in the lessor’s proprietary shares could be held to have increased the extent of the lessee’s liability to pay damages: logically, there is no reason why they should decrease that liability. The evidence of the changes in proprietary shares do not deal with events which throw light on the extent of the damage suffered by the lessees upon the repudiation. Evidence of subsequent events is admissible only where it throws such light. See also Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) at 335–6 and on appeal at (1996) 16 WAR 396; referred to at [11.17]; and see [16.30]. The other issue that arose in the Nangus appeal was whether a guarantor of the due performance of the terms of the lease by the lessee continued to be liable following the repudiation. It was argued that the guarantor’s liability was

limited to the lessee’s performance of the covenants prior to termination of the lease. Their Honours rejected this submission and in so doing considered the legal consequences of acceptance of repudiation (at 192–3): However, the common law principles of the legal consequences of acceptance of repudiation by an innocent party to a contract was stated and explained by Sir Owen Dixon in McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, at pp 476–7 as follows: [page 564] When a party to a simple contract, upon a breach by the other contracting party of a condition of the contract elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected. When a contract is rescinded because of matters which affect its formation, as is the case of fraud, the parties are to be rehabilitated and restored, so far as may be, to the position they occupied before the contract was made. But when a contract, which is not void or voidable at law, or liable to be set aside in equity, is dissolved at the election of one party because the other has not observed an essential condition or has committed a breach going to its root, the contract is determined so far as it is executory only and the party in default is liable for damages for its breach. This passage of his Honour’s judgment was cited with approval by Lord Wilberforce (with whom the other members of the House agreed) in Johnson v Agnew [1980] AC 367, at p 396. Lord Edmund Davies in Hyundai Heavy Industries Co Ltd v Papadopoulos [1980] 1

WLR 1129, at p 1141 also cited with approval the same passage from Sir Owen Dixon’s judgment, together with the following statement appearing in Treitel, The Law of Contract, 5th ed, 1979, p 641 that: Rescission … releases the party in breach for the future from his primary obligations to perform. But he is not released from primary obligations already due at the time of rescission, and he also comes under a secondary liability to pay damages. His liability may thus relate both to breaches committed before rescission and to losses suffered by the victim as a result of the defaulting party’s repudiation of future obligations. The statements to which we have referred were made in connection with contracts for the sale of land and commercial contracts. Nevertheless, as we have noted above, it is now settled law in Australia, whatever the law might be elsewhere, that ‘the ordinary principles of contract law, including that of termination for repudiation on fundamental breach, apply to leases’: per Mason J in Progressive Mailing Housing Pty Ltd v Tabali Pty Ltd, at p 29. It follows that liability for damages of the first-named appellant, as lessee, accrued to it from its failure to perform the covenants and terms of the lease during the unexpired term of the lease. By the instrument of guarantee the secon-dnamed appellant guaranteed to the respondents ‘the due performance and observance by the company of all the covenants terms and conditions contained in the said lease to be observed and performed’ by the first-named appellant. Thus the liability undertaken by the secon-dnamed appellant as guarantor was for the performance of the covenants by the firstnamed appellant during the entire period reserved by the lease, and for the consequences of the first-named appellant’s failure to perform the covenants. Damages to which the respondents were entitled accrued to them as a result of the first-named appellant’s failure to perform the covenants during the unexpired period of the term; and the firstnamed appellant’s liability for damages as lessee accrued at the time of the acceptance of its

[page 565] repudiation. The secon-dnamed appellant’s liability for the consequences of the first-named appellant’s failure to perform the covenants yet to be performed continued after the first-named appellant terminated the lease. It should be remembered that the terms of the guarantee may be critical in applying this analysis in other circumstances.

Laurinda v Capalaba Park Shopping Centre [16.33] The repudiation issue was considered again by the High Court in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623. In that case, Capalaba Park Shopping Centre Pty Ltd which was building a shopping centre, entered into an agreement for lease with Laurinda. The arrangements followed the usual pattern for the grant of leases in shopping centres. The lease was attached to the deed of agreement for lease both of which were executed and delivered to the lessors’ solicitors with authority to complete the lease in certain respects, including inserting a commencement date. The lease was in registrable form. The agreement for lease was entered into on 31 October 1985, possession taken on 3 December 1985 and the lease commencement date agreed to be 1 December. On 3 January 1986 the lessee paid costs, stamp duty and registration fees on the lease in the expectation that it would be stamped and registered forthwith, the lessors’ solicitors having advised, in November, that the lease had been executed by the lessor. The lessee was relatively patient and it was not until mid-March that its accountants wrote to the lessors’ solicitors requesting a copy of the lease. The reply received from the lessors’ solicitors, by letter of 25 March, indicated that the executed lease had not been returned from Melbourne and had therefore not been registered. Laurinda was then seeking to sell its business and to assign the lease to the purchaser, hence the urgency of having the lease registered (in Victoria, where leases are generally not registered (relying on the Transfer of Land Act 1958 (Vic) s 42(2)(e)), a lessee in a similar position would only be concerned that the lease had not been stamped). Time ran on until, on 21

August 1986, the lessees’ solicitor wrote the following letter to the lessor’s solicitors: It is clearly of critical importance to our clients that the Lease be registered immediately to safeguard their rights of tenure. To that end our clients have already paid to your firm on 6th January this year sufficient funds to allow registration of the Lease to be effected by your client. In such circumstances, and in view of the unexplained and lengthy delay, it appears reasonable that our clients require your client to complete registration within fourteen days from the date hereof. If the registration is not completed within that time then our clients naturally reserve their rights in respect of your client’s default. After an unsatisfactory response from the lessor’s solicitors the lessee discovered that the lease had not been completed or stamped and that the mortgagee’s consent had not [page 566] been obtained because the lessor was in the process of refinancing. On 5 September 1986 the lessee, by letter between solicitors, wrote, noting the unsatisfactory response: ‘… our clients are compelled to respond to your client’s breach by advising you that they can no longer regard themselves as bound by the Lease and Guarantee …’; in other words, purporting to accept a repudiation. The premises were subsequently vacated. The High Court, reversing the decision of the Full Court of Queensland, upheld the decision of Connolly J that the lessee was entitled to terminate the lease for the lessor’s repudiation of its obligation to register the lease. It was held that the notice (by letter of 21 August) was not effective. A number of important points are made in the judgments. First, as to repudiatory conduct, Mason CJ said (at 634): There is a difference between evincing an intention to carry out a contract only if and when it suits the party to do so and evincing an

intention to carry out a contract as and when it suits the party to do so. In the first case the party intends not to carry out the contract at all in the event that it does not suit him. In the second case the party intends to carry out the contract, but only to carry it out as and when it suits him. It is much easier to say of the first than of the second case that the party has evinced an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with his obligations and not in any other way. But the outcome in the second case will depend upon its particular circumstances including the terms of the contract. In some situations the intention to carry out the contract as and when it suits the party may be taken to such lengths that it amounts to an intention to fulfil the contract only in a manner substantially inconsistent with the party’s obligations and not in any other way. Similarly Brennan J (at 643–4) citing Fullagar J in Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 at 349. Second, repudiation may occur in relation to the whole contract or in relation to a particular term of the contract if sufficiently important. Thus Brennan J said (at 641–3): A right in one party to rescind a contract will arise when the other party repudiates a contract generally, but it may also arise when the other party repudiates a term of the contract. A right to rescind depends on the importance of the term repudiated. Here, the subject of the agreement was the granting of a legal lease for a term of six years. The implied promise by Capalaba to procure registration of an appropriate instrument was thus at the heart of the agreement. It was a promise of such importance to the promisee that it would not have entered into the contract unless it had been assured of substantial performance and this ought to have been apparent to the promisor. It answered the criterion of an essential promise in the sense that an outright repudiation of the promise would have entitled Laurinda to rescind. The criterion of an essential promise which I have stated in terms relevant to the present case is derived from the criterion expressed by Jordan CJ in Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd [(1938) 38 SR (NSW) 632 at pp 641–2] and frequently adopted in this Court, most recently in Ankar Pty Ltd v National

Westminster Finance (Australia) Ltd [(1987) 162 CLR 549 at p 556], but I have modified it by using the term ‘substantial performance’ rather than the usual formula of ‘a strict or a substantial performance’. The modification is [page 567] necessary when, no day for performance being stipulated and the subject-matter of the promise not being such as to require strictly timeous performance, time is not of the essence of the promise either in law or in equity: Canning v Temby [(1905) 3 CLR 419 at p 425]; Louinder v Leis [(1982) 149 CLR at p 533]. When time is not of the essence, the promisee must have been willing to enter into the contract without an assurance that the promise would be performed strictly, albeit with an assurance that the promise would be performed substantially. Thus, Laurinda would not have been entitled either at law or in equity to rescind the contract as soon as a reasonable time for procuring registration had elapsed. As Griffith CJ said in Canning v Temby [at p 426]: In one sense, of course, time is always of the essence of a contract to be performed within a reasonable time. But that is not the sense in which the term ‘of the essence’ is used. Where an essential term — in the sense defined — is to be performed within a reasonable time, there being no stipulated day for performance, and that time passes without performance, the innocent party does not acquire a right to rescind unless the defaulting party repudiates or has repudiated his obligation to perform. Barwick CJ and Jacobs J observed in Neeta (Epping) Pty Ltd v Phillips [(1974) 131 CLR 286 at p 306]: Contracts for the sale of land, creating as they do equitable interests in the land, do not easily go off except pursuant to an express condition of the contract or pursuant to an express repudiation or a repudiation clearly to be inferred.

The same observation may be applied to agreements for lease. More than a mere failure in timeous performance is necessary to warrant an inference of repudiation, but delay may be so serious as to amount to a refusal to perform and in such a case an innocent party has a right to rescind: see De Soysa v De Pless Pol [(1912) AC 194 at pp 202–3]; Holland v Wiltshire [(1954) 90 CLR 409 at p 420]. Third, subjective, uncommunicated intention is not relevant in determining whether a repudiation has occurred; it is an objective test. As to this Deane and Dawson JJ said (at 657–8; see also Brennan J at 646): Lord Wright’s oft-quoted admonition that ‘repudiation of a contract is a serious matter, not to be lightly found or inferred’ (Ross T Smyth & Co Ltd v T D Bailey, Son & Co [(1940) 3 All ER 60 at p 71]) is, no doubt, a wise one. It should not, however, be allowed to cloud the fact that an allegation of repudiation of contract in a civil case does not involve an assertion that the alleged repudiator subjectively intended to repudiate his obligations. Thus, it is of little assistance in the present case to identify reasons why the lessor was unlikely to have subjectively desired to repudiate its agreement to grant a lease. An issue of repudiation turns upon objective acts and omissions and not upon uncommunicated intention. The question is what effect the lessor’s conduct ‘would be reasonably calculated to have upon a reasonable person’ (per Lord Herschell LC, Carswell v Collard [(1893) 20 R (HL) 47 at p 48]; Forslind v Bechely-Crundall [(1922) SC (HL) 173 at p 190]). It suffices that, viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it. In the present case, the alleged repudiation by the lessor was of the fundamental obligation to produce a lease of the subject premises in registrable form. Clearly, [page 568]

there was unreasonable delay on the part of the lessor in the performance of that obligation. That delay was deliberate and was for the lessor’s own commercial purposes. Its significance, from the viewpoint of a reasonable person in the position of the lessee, was heightened by an absence of explanation in the face of the lessee’s requests and complaints and by the dishonouring of assurances given as to future conduct … Further, as to delay in this context, see Brennan J at 643–4. Fourth, an effectual notice to complete is not essential, but likely to make it easier to establish repudiation (see Brennan J at 644–5). At 649 Brennan J said: Repudiation may be established without proof of an effective notice to complete. The absence of an effective notice means that the other evidence must be examined to determine whether a clear inference of repudiation should be drawn, but it does not preclude the drawing of that inference. As to the adequacy of the notice in this case, see the joint judgment of Deane and Dawson JJ at 652 (with whom Brennan J agreed at 646) and, generally, P Butt, ‘The Modern Law of Notices to Complete’ (1985) 59 ALJ 260 at 270–2 of which are referred to in the judgment; and see Butt, ‘Repudiation and Notices to Com-plete in the High Court’ (1989) 63 ALJ 773.

Further cases and references [16.34] In Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 it was submitted that a breach of the covenant for quiet enjoyment constituted a repudiation or a breach of an essential condition which entitled the defendant sublessee to determine the sublease. The alleged breach of this covenant was the conversion of a previously free car parking area in which the leased premises were situated into a commercial enterprise. In response to these submissions Powell J said (at 11,176–7): (1) Even accepting, as I do, for the reasons upon which I will later elaborate, that the plaintiff’s conduct constituted a breach of its covenant for quiet enjoyment, or an attempt to derogate from its

grant, and even accepting that, in some cases — as, for example, when the landlord has evicted the tenant, or his conduct has been so gross as to render it virtually impossible for the tenant to continue in possession (see, for example, Sampson v Floyd (1989) 33 EG 41; noted (1989) 10 CL 229) — a breach of the covenant for quiet enjoyment may amount to a repudiation, I am unable to accept that the plaintiff’s conduct in the present case constituted a repudiation of the agreement for lease; (2) Nor, so it seems to me — since the forms of conduct which would constitute a breach of a covenant for quiet enjoyment may range from minor to major disturbances — am I able to accept that a covenant for quiet enjoyment is an essential condition of a lease, any breach of which will entitle a tenant to terminate the lease (see Tramways Advertising Pty Ltd v Luna Park (NSW) Pty Ltd (1938) 38 SR (NSW) 632 at 642); (3) But even if the plaintiff’s conduct were to be regarded as a repudiation, or as involving a breach of an essential condition, and even if — which I accept (see, [page 569] for example, Sargent v AGL Developments Ltd (1974) 131 CLR 634 at 656; 4 ALR 257 per Mason J (as he then was)) — the defendant was not obliged, immediately upon the commencement of the ‘commercial operation’ of the car park, to elect to terminate the lease, it seems to me that its conduct in continuing to negotiate for a substituted sublease, and in paying rent over the course of the following three months, is consistent only with an election to maintain the lease, it following that, by 4 November 1986, it was no longer open to it to rely upon the plaintiff’s conduct as a just cause for termination of the lease; (4) Finally, so it seems to me, even if it were still open to the defendant, in November 1986, to rely upon the plaintiff’s

conduct as a just cause for termination of the lease, it was not open to it to elect to terminate as from a date some three and a half months in the future. In summary, for a breach of the covenant for quiet enjoyment to amount to a repudiation, the breach must be of a very serious nature, making it virtually impossible for the tenant to continue in possession, and a tenant must elect promptly to accept any such repudiation, and not in the future. This decision may be contrasted with Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 97,476 in which a series of more minor matters cumulatively constituted repudiatory conduct, but in the particular circumstances of that case. A substantial part of the tenants’ business involved the fixing of window tint film to motor vehicles. It was found that dust interfered with this process and that the defendant’s concern in relation followed from this and was not a subterfuge to allow them to escape their obligations under the lease. The landlord was aware of the nature of the tenants’ business. As to the nature of the repudiatory conduct, Young J said (at 13,469): From the findings of fact it would seem that the Magistrate considered that not only did the landlords know that the tenants were conducting a very sensitive business on the premises, but also that the tenants had complained about the problem, the landlords had promised to seal the carpark but had failed to do so, the landlords had promised to sweep the carpark regularly, but had failed to do so and a serious amount of dust was entering the premises from the carpark (the carpark being under the control of the landlords) which was causing great detriment to the tenant’s business. He also found that the dust penetration was a nuisance. As A’Beckett J said in Harris v Carnegie’s Pty Ltd [1917] VLR 95 at 99, dust undoubtedly may be a nuisance. The learned Magistrate found as a matter of fact in the instant case that there was a nuisance and gave damages on the cross-claim. This is really, however, peripheral to the question before this court except that the Magistrate’s finding of damages of $3000 might be set against the loss of rent for the landlords if the lease is terminated. However, when one thinks about it, the amounts are not disproportionate because the Magistrate may very well have decided that the $3000 compensated for past

damage, but that future damage would invariably be suffered which had been avoided by the tenants vacating the premises. It is said that repudiation is not lightly to be inferred, Ross T Smyth and Co Ltd v T D Bailey, Son and Co [1940] 3 All ER 60 at 71. It might be thought that some of the factors mentioned are minor, but it is clear that a series of minor matters may together constitute repudiation: Hudson Crushed Metals Pty Ltd v Henry [1985] 1 Qd R 202. [page 570] However, finding that on particular facts there was repudiation is a question of fact to be judged on the totality of the parties’ conduct. See also Bayside Developments Pty Ltd v Copperart Pty Ltd (1994) 11 SR (WA) 316 (Dist Crt, WA) (and on appeal at (1996) 16 WAR 396), where it was held that indirect repudiation was sufficient, even by a former statement of claim in the same proceedings: see at 325. This was in the context of a finding that the whole history of the matter showed ‘good faith and endeavour’ on the part of the plaintiff, but the opposite on the part of the defendant: see at 326. It appears that acceptance of the repudiation by service of a written notice to this effect contained in a ‘Minute of Substituted Statement of Claim’ by the plaintiff on the defendant’s solicitors was sufficient: see at 325. Though, as the cases indicate, what constitutes repudiation may differ according to circumstances, it seems that if a tenant gives notice of intention to vacate, a landlord is entitled to assume that the tenant is repudiating the lease: Charmar Electrical Pty Ltd v Minda Inc (1990) 55 SASR 112 (FC); Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 at 93 (SC, ACT, Higgins J) and on appeal DHK Retailers Pty Ltd v Leda Commercial Properties Pty Ltd [1993] ANZ ConvR 635; see also Hawkett v Tailgate Taxi Trucks Pty Ltd (1990) V ConvR ¶54-400 (SC, SA, Legoe J) and Vuksic v Metimex (1995) V ConvR ¶54-511. As to the meaning of ‘vacate’ in this context, see Jones v Edwards (1994) 3 Tas R 350 where it was held that

tenants, who had retained the keys, had not vacated the premises by removing stock-in-trade and equipment from the premises and continuing to pay rent. Consequently, there was no repudiation while this state of affairs continued. However, it was emphasised that ‘vacate’ takes its meaning from the context of any lease provisions and circumstances: see at (1994) 3 Tas R 356 referring to McDonald v Jane [1960] VR 184 at 187 and McLean v Grace [1953] NZLR 566. As is emphasised in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, repudiation of a contract is a serious matter and not lightly to be found or inferred: and see [16.33]. Consistently with this position the courts will not find or infer a repudiation by one party bona fide purporting to accept the repudiation of another party. Thus, in Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 (HL) Lord Wilberforce said (at 283): … it would be a regrettable development of the law of contract to hold that a party who bona fide relies upon an express stipulation in a contract in order to rescind or terminate a contract should by that fact alone, be treated as having repudiated his contractual obligations if he turns out to be mistaken as to his rights. Repudiation is a drastic conclusion which should only be held to arise in clear cases of a refusal, in a matter going to the root of the contract, to perform contractual obligations. Similarly, Lord Keith of Kinkel said (at 297): Where one party, honestly but erroneously, intimates to the other reliance on a term of the contract which, if properly applicable, would entitle him lawfully to rescind the [page 571] contract, in circumstances which do not and are not reasonably understood to infer that he will refuse to perform his obligations even if it should be established that he is not so entitled, legal proceedings to decide that issue being in contemplation, I do not consider it in

accordance with ordinary concepts of justice that the other party should be allowed to treat such conduct as a repudiation. See also DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; but contrast the position where it is clear that a party knows that its claim with respect to the performance of the contract is unfounded: see Satellite Estate Pty Ltd v Jaquet (1968) 71 SR (NSW) 126 at 149 (per Asprey J); and Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 at 351 (per Fullagar J). In Impact Funds Management Pty Ltd (as t’ee for IG 401 Collins Trust) v Roy Morgan Research Ltd [2016] VSC 221 the landlord submitted that the tenant had repudiated the lease by alleging that the landlord had repudiated the lease and by seeking at declaration from the court that the lease was terminated. After undertaking an extensive review of the authorities with regard to repudiation in general, and in regard to the specific application of the principles as to leases, Croft J said (at [164]): As has been observed in relation to the general principles governing repudiation, the overriding position reaffirmed in these authorities is that the characterisation of conduct as repudiatory or otherwise is dependent on context and it is critical that all of the circumstances of the case are considered. That the test for repudiation is highly context dependent is also evident in the Court of Appeal’s treatment, in Sopov v Kane Constructions Pty Ltd (2007) 20 VR 127, of the situation where one party adopts an incorrect interpretation of the contract. The Court of Appeal summarised the principles to be drawn from these cases in various circumstances as follows: 1. For party A merely to assert, or argue for, a wrong interpretation of the contract will usually not be enough to justify party B drawing an inference of repudiation. The reason for this is that party A may be: willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.

2.

Thus the inference of repudiation should not readily be drawn where, for example: (a) party A makes “contentious observations in the course of discussions or arguments”; or (b) party A’s conduct amounts to engaging in “a bona fide dispute as to the true construction of a contract expressed in terms which are by no means clear.” The inference of repudiation can more readily be drawn when the interpretation relied on by party A is clearly or obviously untenable and party A: (a) acts (or threatens to act) unilaterally on the basis of the interpretation; or (b) persists in the interpretation in the face of communications from party B pointing out the error. [page 572]

As to the possibility of a repudiating tenant obtaining relief against forfeiture, see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 309–10 (and see [19.1] and [19.4]); see also Legione v Hateley (1983) 152 CLR 406 (discussed in J Carter, Carter’s Breach of Contract, LexisNexis, Sydney, 2011, para 10.68): compare Commonwealth Development Bank of Australia v Eagle Hotels Pty Ltd (1990) NSW ConvR ¶55-506 at 58,788–90. For a summary of the principles that it is suggested emerge from some of the cases considered, see K Mackie, ‘Repudiation of Leases’ (1988) 62 ALJ 53; see also J Effron, ‘The Contractualisation of the Law of Leasehold: Pitfalls and Opportunities’ (1988) 14 Mon LR 83; T Cockburn, ‘Frustration of Commercial Leases’ (1993) 13 Qld Lawyer 195; M Debenham, ‘Contract Law and Real Property Leases’ (1995) 3 APLJ 52.

Fundamental terms

[16.35] As has been indicated, the way is now open for the application of all relevant contractual doctrines to leases: see National Carriers v Panalpina (Northern) Ltd [1981] AC 675; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 per Mason J at 29; Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105. Speaking in general terms McHugh JA, in the latter case, said (at 144–5): A contract may be determined, apart from effluxion of time or by agreement, on one of three grounds. First, it may be determined for any breach of a fundamental or essential term: Suisse Atlantique Societe d’Armement Maritime SA v N V Rotterdamsche Kolen Centrale [1967] 1 AC 361 at 422; Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 at 337; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 430–1. The test whether the term is fundamental is whether it is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or substantial performance of the promise and that ought to have been apparent to the promisor: Associated Newspapers Ltd v Bancks (at 337). Secondly, a contract may be determined on the ground that the defendant has evinced an intention no longer to be bound by the contract: Freeth v Burr (1874) LR 9 CP 208 at 213. This is the doctrine of repudiation. Thirdly, a contract may be determined on the ground of fundamental breach by the defendant. If the promisor, although wishing to comply with the contract, is nevertheless in breach to such an extent that the promisee’s bargain is substantially destroyed, the promisee can put an end to the contract. Some judges have treated fundamental breach as constituting an implied repudiation of the contract: see Suisse Altantique Societe d’Armement Maritime SA v N V Rotterdamsche Kolen Centrale (at 421–2) per Lord Upjohn and Federal Commerce & Navigation Co Ltd v Molena Alpha Inc [1979] AC 757 at 778–9 per Lord Wilberforce. But the better view would seem to be that they are separate categories. Repudiation depends upon the promisor’s refusal to carry out the contract. Fundamental breach turns on the objective nature of the breaches whatever the state of mind of the promisor is. It may be of course, that the objective facts which will constitute a fundamental breach of the contract are also evidence of an intention to

repudiate the contract. In many cases the same facts will lead to a conclusion that there is both a fundamental breach and a repudiation. In other [page 573] cases the objective facts may demonstrate only a fundamental breach. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd, for example, Mason J (at 382, 624) held that the appellant’s conduct amounted ‘to a repudiation of the lease or a fundamental breach of its obligations’. Wilson J thought there was a ‘fundamental breach’. So did Deane and Dawson JJ. Brennan J thought that the lessee had repudiated the contract embodied in the lease: see generally the discussion on repudiation and fundamental breach by Gibbs CJ in Shevill v Builders Licensing Board (1982) 149 CLR 620 at 626 and by Mahoney JA in Honner v Ashton (1979) 1 BPR 9478 at 9490. The parties to a lease may stipulate that a term is to be treated as having a fundamental character: Shevill’s case 149 CLR at 627; India Pty Ltd v Florlim Pty Ltd [2003] SASC 161; and see M Debenham, ‘Contract Law and Real Property Leases’ (1995) 3 APLJ 52 at 59; and M Redfern, ‘What is the Value of an Anti-Shevill Clause?’ (1995) 3 APLJ 158. However, it does not follow that a term is essential, or fundamental, merely because the proviso for reentry gives a right to reenter for any breach of that term; the proviso cannot be taken as a stipulation or express indication: Shevill’s case, see at 627–8 (per Gibbs CJ) and at 636–7 (per Wilson J). The terms repudiation and fundamental breach are often used, almost interchangeably, in the cases considered in [16.26], as is noted by McHugh JA, above. Whether they are, as his Honour suggests, to be regarded as separate categories remains to be seen. In Shevill’s case Gibbs CJ (at 149 CLR 626) said: For present purposes, it is immaterial whether repudiation and fundamental breach are treated as separate categories, for in either case

the innocent party can rescind the contract and recover damages to compensate him for the failure to perform the contractual obligations. See also Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 97,333 (SC, NSW) at 11,176 (per Powell J), the relevant part of which is set out in [16.26]. The question was left open by the majority in J & C Reid Pty Ltd v Abau Holdings Pty Ltd (1988) NSW ConvR ¶55-416 (CA, NSW, Hope and McHugh JJA). However, Kirby P said ‘that it is now desirable to expunge the suggested category designated by the “shorthand” expression “fundamental breach”’ and to impute repudiation where the suggested category would otherwise have been applied: see the note of this case in (1988) 62 ALJ 1053– 4. In spite of the fact that it may become blurred, there is, nevertheless, a distinction between a breach of condition and a repudiation. Young J drew attention to the distinction in (1985) 1 Aust Bar Rev 21 and, subsequently, in Lagouvardis v Brett and Janet Cottee Pty Ltd (1994) 6 BPR 97,476 (SC, NSW). His Honour said (at 13,469): It concerned me that para 3 and para 4 of the decision [of the magistrate appealed from] seem to confute two separate principles, namely (a) that one can put to an end a lease for a breach of condition; and (b) that one can accept the other party’s repudiation as putting an end to the lease. I analysed the various differences between the two in a paper on repudiation which is published in (1985) 1 Aust Bar Rev 21. [page 574] If a term of a contract or lease is so basic that it is classed as a condition, then breach of that term will entitle the ‘innocent party’ to terminate. It does not matter how blatant the breach is if the term itself is a condition. On the other hand, if the term is not a condition, then the breach may be so blatant as to show that the ‘guilty party’ does not intend to perform the contract or lease except in a manner inconsistent with its provisions. It may also be possible that there is a fundamental

breach short of repudiation which puts an end to the contract; see per Mahoney JA in Honner v Ashton (1979) 1 BPR 9478 at 9490. The distinction between a breach of condition and a repudiation essentially is that when one is looking to see whether there is a right to terminate for breach of condition, one looks to see the seriousness of the term and the seriousness of the breach may be immaterial. On the other hand, with repudiation, one does not direct one’s mind to the seriousness of the term which is being breached, but rather to the seriousness of the breach. Despite this clear distinction as a matter of theory, it is not at all unusual to find in text books and authorities some blurring of the distinction and to put together breaches of fundamental terms and fundamental breaches of anything in the one category as repudiation. It seems to me, with great respect, that this is what the learned Magistrate has done in the instant case. If this distinction is kept in focus, the utility of lease provisions which specify certain terms as having a fundamental character may be doubled with respect to repudiation. The relevance of the distinction between the two terms will have significance in the proper application of the statutory provisions for the proper notice to be given for the termination of a lease. In World Best Holdings Ltd v Sarker (2010) 14 BPR 27,549, Progressive Mailing House principles were relied on in submitting that s 129(1) of the Conveyancing Act 1919 (NSW) (and its equivalents) does not affect the right of an innocent party to accept a repudiation and terminate the lease. The question had previously arisen in Marshall v Council of the Shire of Snowy River (1994) 7 BPR 14,447, where the court held that s 129 did not apply. Meagher JA said (at 14,457): … a lease being a contract, where one party to it repudiates it or commits a fundamental breach or a breach of one of its essential terms, the other party may ‘accept’ the repudiation or breach and terminate the lease. In such a case the lessor, presuming him … to be the innocent party, will have two rights: first, a contractual right to terminate the lease by re-entry for breach of covenant … and secondly, on the application of the ordinary principles of contract law

to terminate for breach. If he relies on the former right he must comply with s 129 of the Conveyancing Act before re-entry; if, as here, he relies on the latter right, s 129 becomes an irrelevance. After noting that a landlord’s remedies for non-repudiatory breaches of fundamental terms did not arise for decision in Marshall, Handley AJA (with whom Tobias and Campbell JJA agreed) said: [page 575] 42

43

44

Section 129(1) applies where a landlord wishes to terminate the lease ‘for a breach of any covenant, condition or agreement … in the lease’. It may be accepted that the tenant’s repudiation of the lease is not within this language and that the landlord’s common law right to accept the repudiation and terminate the lease is not affected. Breaches of contract or covenant, falling short of repudiation, fall squarely within the language of the section. The Court must start with the section and give full effect to its language. There is nothing, other than the dicta in Marshall, to support the view that compliance with the section is optional so that a landlord is free to choose between exercising an express right of termination or forfeiture which required compliance with s 129, and his common law right of termination for fundamental breach where that is not necessary. A landlord cannot contract out of s 129(1) by making any or all of the tenant’s covenants essential terms, and providing that any breach or fundamental breach thereof will give rise to a right of termination. Section 129 exists for the protection of tenants, and subs (10) provides that it ‘shall have effect notwithstanding any stipulation to the contrary’.

This position was reaffirmed in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28,563, where Hodgson JA said (Allsop P and Macfarlan JA agreeing):

… where a landlord terminates for breach of an obligation agreed by the parties to be essential, but where the breach does not amount to repudiation in the sense I have explained, as re-taking of possession would be the exercise of a ‘right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition or agreement (express or implied) in the lease’ within s 129(1). The leases being considered in Macquarie International included clauses which granted to the tenant the opportunity to assign its interest under the leases in the event that it repudiated any of its obligations under the leases, before the landlord could exercise any right to terminate for such repudiation. Hodgson JA considered the effect of these clauses to be the manifestation of the ‘intention of both parties that even repudiation be dealt with by exercise of contractual remedies under these clauses, and not by way of termination at general law simply by accepting the repudiation’: at [298]. His Honour went on to say (at [301]): Accordingly, in my opinion, exercise by Area Health of a right to terminate by reason of repudiation does fall within the opening words of s 129(1); and in any event, in my opinion, the primary judge was correct to hold that, by reason of the terms of the relevant default notice and notice of termination, this was just what Area Health was in fact doing. Thus, even if the conduct of Macquarie in relation to the hospital did amount to repudiation, this would not obviate the need for this default notice to comply with s 129. See also CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2012] TASFC 7. [page 576]

Removal and disposal of goods left on vacated premises

[16.36] At common law, items which the tenant fixed to the premises for the purpose of trade and which did not become part of the structure itself would be ‘tenant’s fixtures’ which the tenant would be entitled to remove at the expiration of the term: New Zealand Government Property Corp v HM & S Ltd [1982] 1 QB 1145, 1157; [1982] 1 All ER 624, 627; (Lord Denning MR). Furthermore, tenants are entitled to take away chattels that they have brought on to the land: Hobson v Gorringe [1897] 1 Ch 183; compare Penton v Robart (1802) 2 East 88 at 89; 102 ER 302, 303, and other cases cited in L Aitken ‘Applications in Equity: Removal of Tenants Fixtures?’ (1999) 73 ALJ 834. In Curtin v Meadlow Holdings Pty Ltd (2001) Q ConvR ¶54-552 Thomas JA (with whom Dutney and Byrne JJ agreed) said at [12]: A variety of clauses may be found in leases which endeavour to regulate the often confusing and contentious claims to property left behind when a lease is terminated. There are a number of cases in which clauses with some similarity have come before the courts, but I have found none directly in point. The cases include City West Centre Pty Ltd v Galaxy Media Pty Ltd (Windeyer J, 1998 9 BPR 16,313); GM & MY Campbell & Co Pty Ltd v Cotton ([1992] ANZ Conv R 610); Ocean Line v Macquarie Bank (Mackenzie J, SC Qld, CA No 6935 of 1996, 26 September 1996); and Jigrose v Drummond ([1994] ANZ Conv R 212). In City West Centre v Galaxy Media Windeyer J noted that the expression ‘the lessee’s removable fixtures’ was not a happy expression to include chattels of whatever nature, notwithstanding that the definition of that term in the lease included ‘all of the tenant’s removable items or removable fixtures which are part of the alterations …. His Honour considered that the word ‘removable’ in this context indicated removing from attachment. His Honour also noted that at common law, chattels that a tenant brings onto leased premises can be removed at will by the tenant, and should be removed prior to the termination of the lease, but that the failure to so remove the chattels prior to termination does not bring about any change of ownership. That of course might be altered by the specific terms of the lease, but forfeiture should not lightly be implied, and clear words would be necessary to achieve that effect. Each of these points in my view has

some relevance in the present matter, although of course the terms of the lease may be readily distinguished. At [21] his Honour said that ‘reasonably clear words are needed to achieve a forfeiture of a tenant’s property’. After construing the lease to mean that the tenant could remove chattels that were not affixed to the building, his Honour said at [28]: By changing the locks and excluding the lessee the lessor took possession of the premises and their contents. It is not correct to describe the lessor as an involuntary bailee. Having placed itself in control of the building and contents, the applicable duty of care is at least that owed by a gratuitous bailee, although it may be arguable that higher duty was owed because the lessor stood to gain by the possession in question. In the absence of adequate legal argument it is not desirable, and is in any event unnecessary, to pursue this point, as the matter may be determined on the footing that [page 577] the lessor was a gratuitous bailee of the goods. A gratuitous bailee who fails to return the goods when demanded has the onus of showing that their loss was not caused by his negligence. In that case the landlord was liable to pay damages for conversion of the tenant’s chattels with the value of the goods being determined by their market value. The extent to which lease provisions may assist a landlord with respect to goods left on vacated premises — both in terms of their disposal and recourse to their value — was considered in Van der Velde v Marklyn Enterprises Pty Ltd [2005] QSC 239, in which Wilson J said (at [12]–[14]): [12] At common law if a tenant did not pay his rent, a landlord could seize and retain his goods. If the tenant wished to regain possession of his goods, he had either to pay the rent or to apply for an order restoring them (ie to ‘replevy’ them). The landlord could not sell the

goods. The Distress for Rent Act 1689 (UK) granted the landlord power to sell. But from the late 19th century the availability of the remedy in England was restricted by a series of statutes. There were similar developments in Queensland, culminating in the abolition of distress for rent (and rates) by s 103 of the Property Law Act 1974. See generally Kim Lewison QC (Ed), Woodfall on Landlord and Tenant (London: Thomson, Sweet and Maxwell) Ch 9; Queensland Law Reform Commission Report No 16, Regarding Property Law Reform, 1973 at p 79. [13] Clause 44.2 is a contractual provision between the tenant and the respondent. It is binding on the applicants as liquidators if it is otherwise valid. By virtue of that clause the respondent had the right, exercisable in the event of termination by re-entry, to retain possession of the tenant’s property. That right was clearly intended to survive the termination of the tenancy. By contrast, distress could be levied only during the subsistence of the tenancy: once a tenancy had been terminated, the landlord could not thereafter distrain for rent: see Woodfall para 9.006. It follows from this fundamental distinction that cl 44.2 is not tantamount to distress for rent. [14] As counsel for the respondent submitted, cl 44.2 confers a mere possessory lien. It is not a charge requiring registration under s 262 of the Corporations Act 2001, the critical difference being that it depends for its existence on possession whereas a charge exists regardless of possession: Re Trendent Industries Pty Ltd (in liq) (1983) 8 ACLR 115; Seka Pty Ltd (in prov liq) v Fabric Dyeworks (Aust) Pty Ltd (1991) 28 FCR 574; Osborne Computer Corporation Pty Ltd (vol admin apptd) v Airroad Distribution Pty Ltd (1995) 17 ACSR 614 at 62. See also Asian Pacific Building Corporation Pty Ltd v Sharon-Lee Holdings Pty Ltd [2013] VSC 11. In this context the provisions of the lease are of critical importance, noting in this respect the statement of McLelland CJ in Eq in Martin v King (1996) 7 BPR 14,681 at 14,683 that ‘a landlord does not at common law have a possessory lien over the goods of the tenant in order to secure arrears of rent or any other obligation of the tenant’. As indicated in Van der Velde, lease

provisions designed to abrogate or vary the common law position may be characterised as provisions effecting distress for rent; which is no longer permitted (as to which, see above [11.3]). [page 578] Subject to the provisions of the lease, where a tenancy is terminated without sufficient warning to enable the tenant to remove his or her goods from the premises prior to such termination, the tenant has a right of entry on the premises for the purpose of removing his or her goods, for a reasonable time: see Coke upon Littleton s 69; Stodden v Harvey (1608) Cro Jac 204; 79 ER 178; Doe v McKaeg (1830) 10 B and C 721; 109 ER 618; Clarke v Tresider (1867) 4 WW and A’B 164 at 171–2; Haniotis v Dimitriou (1983) VR 598 at 501; Collier v Howard (23 April 1996) NSW Comm Trib; Martin v King (1996) 7 BPR 14,681. In Collier v Howard McLelland J rejected the tenant’s application to re-gain possession of a unit that she had leased and then considered the tenant’s rights to retrieve belongings that she had left in the premises. His Honour said: As I have already said, the defendant’s primary claim since 3 April 1996 has been that she should be permitted entry to the unit at least for the purpose of locating and removing her own property and in particular her own documents. In my opinion, she has no legal entitlement to enter the unit for that purpose, in the absence of a refusal by the plaintiff to comply with a formal demand by her for delivery of her goods at the entrance to the unit, or at some other reasonable place she may nominate, transportation of the goods to which would not place any appreciable burden on the plaintiff. The defendant is not in the position of a tenant or licensee of premises, whose tenancy or licence is terminated without sufficient warning to enable her to remove her goods from the premises prior to such termination (cf as to the right of entry for that purpose within a reasonable time, of a tenant, Coke upon Littleton s 69; Stodden v Harvey (1608) Cro Jac 204; 79 ER 178; Doe v McKaeg (1830) 10 B and C 721, 109 ER 618; Clarke v Tresider (1867) 4 WW and A’B 164, 171–2; and

Haniotis v Dimitriou (1983) VR 498 at 501, and as to a licensee, Fowler v Begg (1953) 53 SR (NSW) 451; Minister of Health v Bellotti [1944] 1 KB 298; Australian Blue Metal v Hughes (1962) 79 WN (NSW) 498 at 508–9, affirmed [1963] AC 74). The judgment for possession in favour of the plaintiff established that any tenancy or licence to occupy, which the defendant had prior to the commencement of these proceedings, had terminated by 5 August 1994. Furthermore, she had ample prior notice of the execution of the writ of possession. Her right to recover her goods from the plaintiff depends upon the making by her of a formal demand upon him to make those goods available to her or her agent at the entrance to the unit, or some other place designated by her which, as already stated, would not place any appreciable burden on the plaintiff, or to which the plaintiff is prepared to have them taken, and failing which, to permit her to enter the unit and remove them (see Fitzgerald v Kellion Estates (1977) 2 BPR 9181; Thorogood v Robinson (1845) 6 QB 769; 115 ER 290; Deeble v McMullen (1857) 8 Ir C L Rep 355, 362). No such formal demand has yet been made by the defendant … In Victoria, specific provisions were introduced into the Landlord and Tenant Act to deal with the removal and disposal of goods left on vacated premises. The provisions were contained in Pt IVA of the Act as ss 42A–42F of that Act. These former provisions, which were introduced in 1971, are set out and discussed in the third edition of this work: see [16.36], pp 553–5). In spite of these former provisions causing no apparent difficulty with respect to their operation, they were repealed by and replaced by the [page 579] Australian Consumer Law and Fair Trading Act 2012. The replacement provisions, which are more generic in nature to the former provisions, are now contained in Pt 4.2 — Disposal of Uncollected Goods, which comprises ss 54–77. The expression ‘uncollected goods’ is defined in s 3(1) of the 2012 Act by reference to the provisions of s 54, which provides:

54 Uncollected goods (1) Goods under bailment are uncollected goods if— (a) the goods are ready for delivery to the provider in accordance with the terms of the bailment, but the provider has not taken delivery of the goods and has not given directions as to their delivery; or (b) the receiver is required to give notice to the provider when the goods are ready for delivery but cannot locate or communicate with the provider; or (c) the receiver can reasonably expect to be relieved of any duty to safeguard the goods on giving notice to the provider but cannot locate or communicate with the provider; or (d) the provider has not paid the relevant charge payable to the receiver in relation to the goods within a reasonable time after being informed by the receiver that the goods are ready for delivery. (2) Goods are not uncollected goods for the purposes of subsection (1)(a) if the provider’s failure to take delivery arises from— (a) the receiver refusing to make delivery; or (b) the receiver preventing the provider from taking delivery. Section 54 of the 2012 legislation is complemented by the provisions of ss 55 and 56: 55 Relevant charge (1) The relevant charge is the amount payable by the provider to the receiver for goods under bailment and payment of which entitles the provider to take delivery of the goods. (2) Unless determined otherwise by a court order, the amount payable to the receiver is the sum of the following— (a) for any carriage or storage of the goods or for any repairs, cleaning, treatment or other work done in connection with the goods—

(i)

the amount agreed to by the provider and receiver as the charge payable to the receiver; or (ii) in the absence of an agreement, an amount that is reasonable; (b) the amount of costs for any storage, maintenance or insurance of the goods incurred by the receiver from— (i) the giving of a notice under Division 2 of the receiver’s intention to dispose of the goods until the disposal of the goods; or (ii) the making of an application for a court order under Division 3 until the disposal of the goods. [page 580] 56 Application (1) This Part applies to the possession of goods under a bailment regardless of whether possession was taken before or after the commencement of this Part. (2) This Part does not apply to— (a) goods left behind at the end of a tenancy to which the Residential Tenancies Act 1997 applies; … (o) uncollected goods under any other Act that is prescribed for the purposes of this paragraph. As will be seen from these provisions, particularly the chapeau to s 54(1), their operation and application to the landlord and tenant context is premised on there being a bailment. The nature of tenant’s property ‘left behind’ was, as observed previously, discussed by the Queensland Court of Appeal in Curtin v Meadlow Holdings Pty Ltd. Although it was accepted that the landlord in placing itself in control of the premises became the bailee of the tenant’s goods, the court did not find it necessary to characterise the nature of that

bailment. The position was considered further by Hodgson CJ in Eq in Bowden v Lo (1998) 9 BPR 16,317 where, proceeding on the basis that the landlord was a bailee of the goods not removed from the premises, a bailee’s obligation with respect to those goods was considered. Moreover, the provisions of s 56(2)(a) and (5) indicate by implication that the legislature proceeded on the basis that tenants property ‘left behind’ would lead to a bailment upon which the provisions of Pt 4.2 of the 2012 Act would operate. This legislation also specifically preserves the application of the common law relating to the bailment of goods (s 57), which is also consistent with this position. Division 2 of Pt 4.2 makes provision for the disposal of uncollected goods: ss 58–67. These provisions empower disposal of uncollected goods (s 58(1)), except when there is a dispute regarding the ‘relevant charge’ (provided for in s 55) or any dispute about the condition of the goods or other work done in connection with the goods or where any application has been made to the court with respect to those matters under s 69: s 58(2). Specific provisions are included with respect to the manner of disposal of low value, medium value, high value and perishable goods: ss 60, 61, 62 and 65, respectively. There are also provisions with respect to the form and giving of notice of intended disposal of uncollected goods: ss 66 and 67. Division 3 (ss 68–72) provides for applications to court, court orders and related provisions. If uncollected goods are sold, the landlord is entitled to retain the ‘relevant charge’ and disposal costs; with a provision that any surplus is to be treated as unclaimed moneys under the Unclaimed Money Act 2008 and any deficiency recoverable as a debt in court: s 73. The landlord must keep records with respect to the disposition of uncollected goods as required by s 74. A purchaser of uncollected goods disposed of under these provisions obtains good title: s 75. [page 581] In Bowden v Lo the failure to remove goods occurred on residential premises with the result that the Residential Tenancies (Residential Premises) Regulations 1995 (NSW) applied and thereby enabled the landlord to retain the goods until certain amounts of money payable under the terms of the lease

were paid. In this context, considering the landlords’ obligations as bailees, Hodgson CJ in Eq said (at 9 BPR 16,322–3): … in my opinion, Mr and Mrs Lo became bailees of the goods for Mr Bowden. Even though they initially had possession involuntarily because the goods were left in their house, it is reasonable to regard their possession as voluntary from shortly after that: cf Chesworth v Farrer [1967] 1 QB 407. Bailees are obliged to exercise reasonable care in relation to bailed goods, and if the goods are lost or damaged the onus lies on them to prove that the loss or damage was not caused by their own negligence or that of their servants or agents: Glebe Island Terminals v Continental Seagram Pty Ltd (1993) 40 NSWLR 206 at 228. It appears that this is true for gratuitous bailees as for bailees for reward, although the application of the standard of care may vary according to circumstances: see Mitchell v Ealing London Borough Council [1979] QB 1; Sutcliffe v Chief Constable of West Yorkshire (CA(UK), 19 May 1995, unreported). However, even if this is not entirely clear (see TNT (Melbourne) v May & Baker (Aust) Pty Ltd (1966) 125 CLR 353 at 366– 7 note at (1971) 45 ALJ 101–2; Brambles Security Services v Bi-Lo Ltd (1992) Aust Tort Rep 81-161 at 61,269), I am in any event satisfied that Mr and Mrs Lo should be treated as bailees for reward: they were relying on their possession of the goods in order to gain the advantage of having some security for money owing by Mr Bowden. Accordingly, Mr and Mrs Lo would be liable as bailees to Mr Bowden for the goods that were lost or damaged, unless they could prove that the loss or damage was not due to their own negligence or the negligence of their servants or agents. In my opinion, that onus is not discharged. The Uncollected Goods Act 1995 (NSW) contains similar provisions and is structured similarly to the Victorian legislation and does also provide for different processes for disposal depending on the value of the goods.

[page 583]

17 Forfeiture Forfeiture not confined to fixed terms [17.1] A lease may be determined by forfeiture. Forfeiture is a mode of determination not often appropriate to tenancies other than leases for a fixed period; but occasionally a periodic tenancy is granted on terms which enable it to be determined by forfeiture: see (1962) 26 Conveyancer and Property Lawyer 6 at 7; Campbell v Payne (1953) 53 SR (NSW) 537 at 539–40; Maley v Fearn [1947] LJR 276; 176 LT 203; [1946] 2 All ER 583. The meaning of ‘forfeiture’ was considered in Richard Clarke & Co Ltd v Widnall [1976] 1 WLR 845. An example of a tenancy agreement creating a quarterly tenancy and containing a proviso for re-entry is found in Gleeson v Richey [1959] VR 258. A lease for a fixed term may empower the lessor to determine it for breach of covenant by giving, say, three months’ notice; the exercise of such a power may for certain purposes properly be described as a ‘forfeiture’: Richard Clarke & Co Ltd v Widnall; see also Holden v Blaiklock [1974] 2 NSWLR 262; editorial note (1975) 49 ALJ 289.

Strict compliance essential [17.2] Forfeiture is a matter stricti juris: Doe d Lloyd v Powell (1826) 5 B & C 308; 108 ER 115. As it is said in the older cases, a condition which goes in defeasance of an estate is odious in law; accordingly there is no forfeiture unless the terms of the condition for forfeiture are exactly complied with: Doe

d Staughton v Jennings (1856) 1 VLT 182; Hamilton v Warne (1907) 4 CLR 1293 at 1298. A proviso for re-entry is strictly construed: Doe d Abdy v Stevens (1832) 3 B & Ad 299; 110 ER 112. The question whether a common law demand for rent or a notice to remedy a breach of covenant is necessary should be borne in mind: see [17.14] and [17.15]. [page 584]

The three grounds [17.3] A lease may be forfeited on three grounds: 1. breach of condition; 2. breach of covenant, where the lease contains a proviso for re-entry or similar stipulation; or 3. disclaimer. In addition to forfeiture on one of the three grounds mentioned, provision has been made by statute for the summary determination of leases in certain cases of use for an illegal purpose: see [16.1]. Breach of condition is dealt with at [17.5] and [17.6]. As to forfeiture for breach of covenant, see [17.6]–[17.9]. Disclaimer as a cause of forfeiture is considered in [17.21]. The suggestion that the grounds on which a lease may be forfeited are to be regarded as merely illustrating the application of the principles of the law of contract is discussed in [17.22].

Lease made voidable only [17.4] If a condition is broken, the lease does not ipso facto come to an end. A contrast must be drawn with cases where the lease is by its terms to determine automatically upon the occurrence of a certain event; for example, a lease which is to endure for a fixed term if the lessee shall so long continue to occupy the land. In such a case the lease will endure only until the event

occurs; no act on the part of the lessor is necessary to determine it: see [16.6]. On the other hand, a condition in the sense now under discussion is a stipulation the breach of which does not determine the lease, but merely exposes the lease to forfeiture by conferring upon the lessor the right to determine it if he or she so chooses; similarly, a breach of covenant or the occurrence of some other event falling within the terms of a proviso for reentry merely makes the lease voidable at the option of the lessor: Thorburn v Buchanan (1871) 2 VR (L) 169; MacIntosh v Bebarfalds Ltd (1922) 22 SR (NSW) 371; Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525; Massart v Blight (1951) 82 CLR 423; [1951] ALR 401; Billson v Residential Apartments Ltd [1992] 1 AC 494 at 534 (HL). This is so even if the lease provides that on breach it shall ‘cease and be void’: Dakin v Cope (1827) 2 Russ 170; 38 ER 299, or ‘cease, determine, and be utterly void and of no effect’: Roberts v Davey (1833) 4 B & Ad 664; 110 ER 606; [1824–34] All ER Rep 290; compare Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 589. A lessee may not take advantage of his or her own wrong, and a lease which provides that the demise shall cease in the event of non-payment of rent does not make the lease voidable by the lessee: Rede v Farr (1817) 6 M & S 121; 105 ER 1188; Owendale Pty Ltd v Anthony. [page 585]

Words of condition [17.5] With the possible exception of covenants for the payment of rent, a breach of covenant will not entitle the lessor to forfeit the lease unless the right to do so is expressly reserved to him or her: Bashir v Commissioner of Lands [1960] AC 44 at 51; 1 All ER 117; Sanders v Wadham (1870) 4 SALR 73. Sometimes the right to forfeit the lease may be implied from covenants in the lease. For instance, an option given to the lessor to convert a tenancy for a fixed term into a periodic tenancy in the event of the lessee breaching or failing to perform any of the covenants in the lease: Holden v Blaiklock [1974] 2 NSWLR 262; (1975) 49 AJL 289. If there is no proviso for re-entry the lessor may forfeit the lease only if he or she can successfully contend that the

stipulation in question is not a mere covenant, but a condition. No precise form of words is needed to make a condition: Doe d Henniker v Watt (1828) 8 B & C 308; 108 ER 1057; Maley v Fearn [1947] LJR 276; 176 LT 203; [1946] 2 All ER 583. The words ‘provided always’, ‘upon condition that’ and ‘so that’ are words often employed for that purpose: Doe d Henniker v Watt. If words both of covenant and of condition are used in the same instrument, they both operate: Doe d Henniker v Watt. Whether rent stands in a special position is discussed in [17.6]; generally, see [16.34]. A lessor may not take advantage of the non-fulfilment of a condition the performance of which has been hindered or prevented by him or her: Panamena Europea Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd [1947] AC 428 (per Lord Thankerton at 436); see also Edwards Aberayron Mutual Ship Insurance Society [1876] 1 QBD 563 and Investanley Holdings Pty Ltd v South Eastern Qld Water Corporation [2004] QSC 201 at [94] (per Muir J).

Covenant made effective by proviso for re-entry [17.6] Forfeiture for breach of condition differs in an important respect from forfeiture for breach of covenant. A condition subsequent is a qualification annexed to an estate whereby the latter shall be defeated upon its performance or breach. The main distinction between a condition subsequent for the cesser of the term of a lease upon the happening of a certain event and a lessee’s covenant is that (subject to any right of relief from forfeiture given to the lessee) upon breach of a condition the lessor may re-enter, because the estate of the lessee is determined; whereas a breach of covenant only gives him or her the right to recover damages (or to obtain an injunction), unless the right to re-enter is expressly reserved to him or her by the lease: Bashir v Commissioner of Lands [1960] 1 All ER 117; [1960] AC 44 at 51; Sanders v Wadham (1870) 4 SALR 73; Maley v Fearn [1947] LJR 276; 176 LT 203; [1946] 2 All ER 583; Whall v Bulman [1953] 2 All ER 306; [1953] 2 QB 198. Leases containing covenants on the part of the tenant, but no proviso for reentry, are occasionally to be found. Under such a lease the lessor is in an unenviable position. He or she may find

[page 586] that the tenant is unable or unwilling to pay the rent. Such a case was Re Brain [1874] LR 18 Eq 389, where it was held that the lessor was entitled to reenter, Malins V-C saying (at 405–6): I believe the principle is clear that every lessor ought to have, and I believe there is no instance in which he has not, the right of recovering possession of land if his rent be not paid; because if it is a grant upon conditions at common law, undoubtedly he can resume possession upon a failure to perform the conditions: if it is not a grant upon conditions he undoubtedly reserves the right to himself. The Crown here reserves no such right in terms, but it is perfectly clear to my mind that these grants are had upon conditions, that is to say, conditions affixed inherently to the grant, that if the tenant does not pay the rent the Crown has a right to resume possession. I am satisfied, upon the terms of the grant, that it is a conditional grant. What is it in its terms? ‘Granted a gale to John Brain, of the Alexandra Colliery, rendering and paying therefor to Her Majesty, her heirs and successors, for all such coal as shall be brought out so much money, and further so working the said colliery’ — that is to say, working the coal and paying the rent — ‘he must do so upon this further condition.’ There cannot be a further condition unless there has been one already; to make that a further condition there must have been one before. What is the further condition? It is as plain to my mind as if it had been in these words; granting to him upon condition that he shall render 2d for every ton of coal, and pay the rent every half-year; and upon the further condition that he shall do certain things. What do we want beyond that? Here is a grant from the Crown upon condition. The tenant is bound to perform that condition; it is not an unreasonable one, it is one he ought to perform, and it is one which upon every principle, if he fails to perform it, ought to entail the loss of possession. What can be more monstrous than the argument that the grantor is to submit to the non-payment of rent year after year with no right to reenter — to say, in fact, that it is not a condition, and therefore there is

no right of re-entry in the Crown: the Crown having reserved no right of re-entry, and the Act of Parliament having given none, therefore the Crown must hold this property year after year without any possibility of recovering the rent. It has been said that it might be recovered by an action, but let us look at that. These free miners are men working at moderate weekly wages; to sue them at law would be useless, to distrain upon the property would be impossible, there is nothing to distrain, it is an unopened mine, they have not got beyond the surface. Now under these circumstances, ought not the Crown to have this right? I am clearly of opinion that they ought to have it, and I am equally clearly of opinion that they have it; because I am satisfied upon the very terms of the grant that it is a grant upon condition, and therefore is like a grant at common law, to which I have already referred, in which case, if the condition is not performed, the grantor enters into possession. It should be noted that in Re Brain, above, the use in the lease of the word ‘further’ enabled it to be said that a condition requiring payment of rent had already been imposed; nonetheless, the judgment suggests that a condition for payment of rent should be implied in any case as a condition ‘affixed inherently to the grant’. Insofar as this decision suggests that an implied right of re-entry for non-payment of rent exists where the lease neither contains an express proviso for re-entry nor expresses a condition for payment of rent, its correctness is not free from doubt; the implication of such a right certainly avoids the results which Malins V-C described as ‘monstrous’; [page 587] on the other hand, ‘monstrous’ consequences have not prevented the development and survival of other technical rules of landlord and tenant law. It would seem that Woodfall on Landlord and Tenant (looseleaf), vol 1, para 17.109 does not admit an exception to the rule in the case of rent; and see Shevill v Builders Licensing Board (1982) 149 CLR 620 at 627; Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; Gallic Pty Ltd v Cynayne Pty Ltd (1986) 83 FLR 31 at 35, 39 (per Kearney J).

Exercise of option to forfeit [17.7] It has already been said that the breach of a covenant in a lease containing a proviso for re-entry or similar stipulation will not ipso facto determine the lease; the lease will continue unless the lessor elects to determine it: see [17.4]. It is proposed to consider now what acts will amount to a sufficient exercise of this option. It is not easy to find a clear statement of the law in this regard. There is no shortage of reported cases dealing with the attempts of particular landlords to rid themselves of particular tenants; what is not easy to find is a statement of principle. It is thought that the steps necessary to forfeit a lease in the exercise of a right expressly conferred by the lease are governed by the terms of the lease; in other words, that it is in each case a matter of considering and if necessary construing the relevant provision of the particular lease in order to ascertain what act or acts on the part of the lessor it requires. To say that the answer to the question depends on the terms of the particular contract is not, however, to deny that judicial decisions have attached a tolerably clear meaning and effect to the provision most commonly encountered in practice, namely a proviso for re-entry in what may be regarded as the common form. Provisions entitling the lessor to forfeit the lease are of two types: those which answer the description ‘proviso for reentry’ and those which do not. A ‘proviso for re-entry’ might take the following form: If the rent hereby reserved or any part thereof shall be unpaid for 21 days after becoming payable (whether formally demanded or not), or if any covenant on the tenant’s part herein contained shall not be performed or observed or if the tenant for the time being shall become bankrupt or enter into any composition with his creditors or suffer any distress or execution to be levied on his goods or if the tenant for the time being is a company and shall enter into liquidation whether compulsory or voluntary (save for the purpose of reconstruction or amalgamation), then and in any of the said cases it shall be lawful for the landlord at any time thereafter to re-enter upon the demised premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine, but without prejudice to the

right of action of the landlord in respect of any breach of the tenant’s covenants herein contained. For the purposes of the present discussion a stipulation is regarded as a proviso for re-entry if it provides in terms that the lessor may re-enter by way of determining the lease. Leases prepared by solicitors ordinarily contain such a proviso. If the provision for determination is not in the form of a proviso for re-entry, it may take any one of a number of widely varying forms; the parties may, of course, employ any language they [page 588] choose. Examples will illustrate what is meant by a stipulation for forfeiture which is not a proviso for re-entry: that the indenture shall ‘cease, determine, and be utterly void and of no effect to all intents and purposes’: Roberts v Davey (1833) 4 B & Ad 664; [1824–34] All ER Rep 290; 110 ER 606; that the landlord ‘may distrain for such rent, and put an end to this tenancy in which latter case this agreement may be produced as a notice to quit duly given and expired’: Green v Patten (1894) 15 ALT 254. In those fairly rare cases where the provision for forfeiture is not a proviso for re-entry, it will in each case be a matter of considering the language used in order to determine as a matter of construction what act is required: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 29–30 (per Mason J). If the lease provides in substance that the landlord may determine the tenancy, it will be necessary for the landlord to evince in some way his or her intention to determine the tenancy. It is conceived that the use of some such words as ‘the landlord may put an end to this tenancy’ requires some unequivocal act on the part of the landlord evincing an intention to determine the tenancy. In McCallum v McVean (1872) 3 VR (L) 157, the report does not show the nature or language of the provision dealing with determination. Delivering the judgment of the Full Court, Stawell CJ said, at 159: ‘The mere breach of covenant is not a determination of the tenancy; the landlord must evince in some way his intention to act upon it … It is evident from the case that the landlord had given no notice to quit, and made no demand of possession other than the summons’. The question arises whether, if the lease uses some such

words as ‘the landlord may determine the tenancy’, the act required to forfeit the lease must not only evince an intention to determine the tenancy, but also communicate that intention to the tenant. It is suggested that the question is one of construction. In Green v Patten, the tenancy agreement provided as follows: ‘And it is hereby agreed that whenever any rent shall be due and unpaid (in advance or otherwise), or if the said tenant does not fulfil all the conditions, the said landlord may distrain for such rent, and put an end to this tenancy in which latter case this agreement may be produced as a notice to quit duly given and expired’. The landlord’s agent served on the tenant a notice signed by the landlord, addressed to the tenant, describing the premises and the lease and stating that the landlord, ‘having determined the tenancy thereby created’, did ‘hereby demand that possession of the said premises be now given to my agent W J Green for me’. The point taken on behalf of the tenant was that a common law demand for rent had not been made. Hood J dealt with the point as follows (15 ALT at 255–6): There was proof of a demand of possession, dated 29 March 1894, served by the land-lord upon the tenant, and there was proof of default in payment of the rent, and the agreement provides that whenever any rent shall be due and unpaid, the landlord may distrain and put an end to the tenancy. It is contended for the defence that the landlord should have proved that he had made a demand for the rent before he is entitled to take these proceedings. I do not think that this is correct, because the agreement provides that as soon as the rent is unpaid the landlord may put an end to the tenancy. The object of the clause is to avoid the necessity of proof at all. The moment the rent is due and [page 589] the landlord has done some act to determine the tenancy, the document is pro-duced as proof of notice duly given. I think that the objections are technical at the very best, and I am not at all sorry to be able to overrule them. The words in the judgment (‘some act to determine the tenancy’), while

they might be thought to suggest that the doing of an act without the communication to the tenant of the fact of its having been done is sufficient, are not inconsistent with the view that an ‘act to determine the tenancy’ will be effective only if it involves the communication to the tenant of the intention to determine the tenancy; the act in fact done (the making of a demand of possession) was, of course, such an act. In Singman v Lyons [1922] VLR 719, the lease contained a clause in substantially identical terms to that in Green v Patten (1894) 15 ALT 254. The landlord served on the tenant a notice which identified the premises and the tenancy and stated that ‘as you have committed a breach of the covenants and conditions against subletting or assigning contained in the lease … I … hereby … determine the said lease …’. Mann J held this sufficient, saying: The notice of intention to re-enter … must show what the right is that the landlord is purporting to exercise, and what the tenancy is to which he is purporting to put an end …; and, having given to the tenant notice as to what covenant it is which the landlord says has been broken, and the notice of his intention in respect of that breach to exercise his right of re-entry upon the premises, I think he has done all that he is required by law … Some light may be thrown on the problem now under consideration by the answer to the question whether, in the case of a proviso for re-entry, the mere issue (as opposed to the issue and service) of a writ seeking to recover possession will determine the lease; as to this, see [17.12] and [17.21]. There is an observation of Collins MR in Serjeant v Nash Field & Co [1903] 2 KB 304 at 310; [1900–3] All ER Rep 525, which might be thought to support the view that, where the landlord is empowered to determine the lease, he or she is required only to take some unequivocal step and is not under a further obligation to see that the tenant is apprised of it. His Lordship there said: ‘There is a final determination of a tenancy under a lease when the lessor, by some final and positive act which cannot be retracted, treats the breach of covenant by the lessee as constituting a forfeiture’. It should be noted that Serjeant’s case was concerned with a proviso for re-entry. In Roberts v Davey (1833) 4 B & Ad 664; [1824–34] All ER Rep 290; 110 ER 606, the indenture contained a provision whereby it was to cease, determine and be utterly void. Denman CJ at 608–9 spoke of the need for ‘some act showing

his intention to determine the licence’, while Littledale J at 609 referred to the need to give notice of intention to put an end to the agreement. A number of Victorian cases, including Green v Patten and Singman v Lyons, were considered by Sholl J in Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97. His Honour adopted the suggestion of Adam J, made in Lo Giudice v Biviano (No 1) [1962] VR 412, that a stipulation such as that contained in Green v Patten might be regarded as saying in effect: ‘If I make a default in payment of rent for 10 days, you need not, in [page 590] order to enable you to re-enter, make the formal common law demand. It will be sufficient if you produce this lease which will conclusively establish as against me that all legal formalities have been complied with to enable you to determine the tenancy’. On this view, said Sholl J, the provision in Green v Patten amounted to ‘a contractual dispensation by the lessee with all common law requirements, such as a common law demand for the rent or a common law re-entry’. This reasoning begins with the presupposition that at common law re-entry is necessary to forfeit a lease and then proceeds to conclude that the parties have by the terms of their contract dispensed with this requirement. The other view (and that suggested earlier in this discussion) is that re-entry is necessary to determine a lease in the exercise of an express power conferred by the lease only if upon its proper construction the provision conferring the power so provides. On the view of Sholl J, re-entry is required unless the parties have agreed to dispense with it; on the other view, it is merely a matter of deciding upon what it is that the parties have agreed as the step necessary to determine the lease. Support for the view that re-entry is essential only where the parties stipulate that advantage shall not be taken of a forfeiture except by an entry upon the land is to be derived from Liddy v Kennedy (1871) LR 5 HL 134, and especially the remarks of Lord Chelmsford at 151, cited during the argument in Griffiths v McDougall and Carroll (1894) 16 ALT 29 at 32. Provisions whereby the tenancy agreement may be produced as a notice to quit duly given and expired are not, as is sometimes thought, concerned with

the production of the document to the tenant by way of the giving of something in the nature of notice of re-entry; they contemplate the production of the document to the court: Green v Patten (1894) 15 ALT 254; Lo Giudice v Biviano (No 1) [1962] VR 412; Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97. Indeed, sometimes the provision makes this abundantly clear by referring to production ‘to the court’ or ‘in any proceedings’. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 Mason J said (at 29–30): … it has been suggested that the presence of an express proviso for reentry in a lease excludes any other right of termination of the lease by the lessor. Thus, in Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [[1965] VR 97], it was held that at common law re-entry is necessary to forfeit a lease unless dispensed with by contract. The better view is, in my opinion, that re-entry is essential only where the parties stipulate that advantage shall not be taken of a forfeiture except by an entry upon the land: Liddy v Kennedy [(1971) LR 5 HL 134 at 151]. For a case where forfeiture was allowed where the power to determine the lease by re-entry was not activated, but the landlord acted on an impression created by the tenant’s conduct that it was abandoning the premises thereby raising an equitable estoppel, see Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 (SC, ACT), at 95–6; and see [1.15]. See [18.6] as to the requirements of a notice of re-entry. See also the discussion of the cases on repudiation of leases in [16.26]. [page 591]

Proviso for re-entry [17.8] A proviso empowering the lessor to ‘repossess himself’ of the premises confers a right of re-entry: Doe d Staughton v Jennings (1856) 1 VLT 182. The proviso for re-entry in the sense now under consideration authorises re-entry whereby the lease is forfeited and must not be confused with a proviso empowering the lessor merely to enter and hold the premises until the

arrears of rent are paid; entry under a proviso of the latter kind does not put an end to the lease: Doe d Darke v Bowditch (1846) 8 QB 973. It is often said that, while a proviso for re-entry for non-payment of rent is ‘usual’ within the meaning of the rules relating to usual covenants, a proviso entitling the lessor to re-enter for breach of some other covenant or in some other event must be regarded as unusual: Coleman v Dean (1870) 1 VR (Eq) 142; Hodgkinson v Crowe (1875) LR 10 Ch 622; Hampshire v Wickens (1878) 7 Ch D 555. As to this, see [9.3]. An express proviso for re-entry does not exclude the lessor’s right to terminate for repudiation or fundamental breach: Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; and see [16.26], [16.34]. As to considerations with respect to unconscionable conduct in relation to the exercise of the right of re-entry, see Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2012] VSCA 103.

Re-entry under a proviso for re-entry [17.9] The stipulation in a lease empowering the lessor to determine it for breach of a covenant on the part of the lessee or upon the occurrence of some other event nearly always takes the form of a proviso for re-entry; that is to say, a provision which, whether or not it uses additional expressions, empowers the lessor to ‘re-enter’. The first question which arises is whether, where the lease contains a proviso for re-entry, the lessor may determine the lease only by actually re-entering. Despite earlier doubts, this question may now be answered without hesitation in the negative, for it is now clear that a landlord may avail him or herself of the right conferred upon him or her by the proviso for re-entry either by actually re-entering or by bringing an action for the recovery of the demised premises. The bringing of an action for the recovery of the land is regarded as the equivalent of actual entry. It was recognised over a century ago that the landlord might, without actual re-entry, avail him or herself of his or her rights under a provision for re-entry by bringing an action of ejectment: Jones v Carter (1846) 15 M & W 718; 153 ER 1040; Doe d Staughton v Jennings (1856) 1 VLT 182. Under the old procedure in actions of ejectment there were fictitious averments of entry and ouster and the defendant admitted an entry by the consent rule. For an

account of the old procedure see McKinnon v Portelli (1960) SR (NSW) 343 at 346–7; Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 at 99; see also [22.3]. The question whether the consequence of the procedural reforms of the nineteenth century which abolished the need for the fictitious averments and [page 592] the consent rule was that the bringing of an action for the recovery of the demised premises could no longer be regarded as the equivalent of entry was raised, but not decided, in Ex parte Dyke (1882) 22 Ch D 410. The argument that the changes in procedure had had that result was rejected in Grimwood v Moss (1872) LR 7 CP 360; Ware v Booth (1894) 10 TLR 446; and Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525. It is now settled that a landlord may re-enter under a proviso in that behalf either by making an actual entry or by doing that which is the equivalent of actual entry, namely bringing an action for the recovery of the land. See further McKinnon v Portelli [1960] SR (NSW) 343; Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97; Billson v Residential Apartments Ltd [1992] 1 AC 494 (HL); and [17.12]. It is, then, established that ‘re-entry’ for the purposes of a proviso for reentry need not be actual re-entry, but may be the bringing of an action for recovery of possession, which is regarded as the equivalent of actual entry. Further than that the law does not go; if the stipulation dealing with forfeiture provides for ‘re-entry’, there must be either actual re-entry or the taking of proceedings which stands in its place. It is possible to find observations which might be thought to suggest that, where the stipulation does not merely provide that the lessor may ‘determine’ or ‘put an end to’ the lease, but in terms permits ‘re-entry’, the lessor may elect to put an end to the lease by some means other than actual re-entry or the institution of proceedings. In Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525 (a case of a proviso for re-entry), Collins MR said at 310: ‘There is a final determination of a tenancy under a lease when the lessor, by some final and positive act which cannot be retracted, treats a breach of covenant by the

lessee as constituting a forfeiture’. Despite this dictum, it must now be regarded as settled that, where the lease empowers the landlord to ‘re-enter’, the landlord must either actually re-enter or take the equivalent step of bringing an action for the recovery of the land, it not being competent to him or her to exercise his or her option to determine the lease in any other way. In other words, it cannot be said that re-entry (or the bringing of proceedings which is its equivalent) is merely one example of a ‘final and positive act’ which will serve to determine a lease in the exercise of a power conferred by a proviso for re-entry. That the selection may not be expressed in any other way than by re-entering is shown by Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575, where Warrington J said (at 587–8): I am of opinion upon the authorities — and I refer particularly to Jones v Carter (1846) 15 M & W 718 at 725, and to a dictum of Bayley J’s in Fenn d Matthews & Lewis v Smart (1810) 12 East 444 at 448 — that where the condition in the lease is that the landlord may re-enter he must actually re-enter, or he must do that which is in law equivalent to re-entry, namely, commence an action for the purpose of obtaining possession. Parke B in Jones v Carter (1846) 15 M & W 718 at 725 puts that quite plainly. In the particular case to which he was referring the proviso for re-entry was in a different form to that in the present case — a form which one sometimes finds, namely, that upon breach the lease shall be determined. What he says is this: ‘An entry, or ejectment, in which an [page 593] entry is admitted,’ — that is, having reference to the old form of procedure — ‘would be necessary in the case of a freehold lease, or of a chattel interest, where the terms of the lease provided that it should be avoided by re-entry. Whether any other act unequivocally indicating the intention of the lessor would be sufficient to determine this lease’ — that is, the lease in the form of the one with which he was dealing — ‘which is made void at the option of the lessor, we need not determine, because an ejectment was brought, and proceeded

with to the consent-rule, by which the defendant admitted an entry, and the entry would certainly be an exercise of the option’. In Fenn d Matthews & Lewis v Smart (1810) 12 East 444 at 448, Bayley J — although it is only a dictum in the course of the argument, but it shows the view he took — said: ‘Must not the necessity of an entry depend upon the wording of the condition? If the words be, that upon the doing of such an act, the reversioner may enter, there must be an entry to avoid the estate; but if the estate be granted upon condition that if the grantee do such an act, the estate shall thereupon immediately cease and determine, there no entry is necessary’. He there draws a distinction between the two classes of cases. In my opinion, the present case falls within the first class, and I do not see how it is possible, on any construction of this proviso for re-entry, to say that the lessors have re-entered, when all that they have done is to give notice of their intention to re-enter, founded on a statement that the lease had determined, which had not in fact happened, or a demand for possession founded on that notice. In Warner v Sampson [1959] 1 QB 297; [1958] 1 All ER 44 the Court of Appeal was principally concerned with the question whether a traverse in a pleading had operated as a disclaimer so as to enable the landlord to forfeit the term. All members of the court held that there had been no disclaimer, and Hodson and Ormerod LJJ went on to hold that in any event the delivery of a reply purporting to forfeit the term in consequence of the alleged disclaimer contained in the defence was not an effective election to forfeit the lease. Their Lordships were there concerned, not with the meaning of ‘re-entry’ in a proviso for re-entry, but with what might amount to ‘re-entry’ for the purposes of the rule of law whereby the landlord might forfeit the lease for disclaimer, but some of the observations are germane to the matter now being discussed. At 320–1 Hodson LJ cited with approval the passage from the judgment of Warrington J in Moore v Ullcoats Mining Co Ltd, in which it is laid down that, where the provision in the lease is that the landlord may re-enter, he or she must either actually re-enter or do that which is in law equivalent to re-entry, namely — commence an action for the purpose of obtaining possession. Further authority for the view that a proviso for re-entry requires either actual entry or its equivalent in the institution of an action to recover

possession, and does not permit the exercise of the right to forfeit in any other way, is to be found in McKinnon v Portelli [1960] SR (NSW) 343; Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97; and Re Register; Ex parte Official Assignee [1958] NZLR 1050 at 1054–5. In Price v Mayman [1948] SASR 241 at 243, Napier CJ held that in the special case of prescribed premises the giving of notice to quit should be regarded as the equivalent of the institution of proceedings and hence as the equivalent of re-entry, a view rejected by Sholl J in Dennis & Copley v Eddie [1952] VLR 92 at 106. In reaching this conclusion Napier CJ used language suggesting that [page 594] (contrary to the opinion expressed above) in a case where ‘re-entry’ is required it is sufficient if the landlord does what he or she can to indicate his or her election to put an end to the lease. London and County (A & D) Ltd v Greenwoods (Hosiers & Outfitters) Ltd [1969] 1 WLR 1215 may bear on the question of what amounts to re-entry. Once proceedings for possession have been served no subsequent amendment of the pleadings can improve the tenant’s position (or, it seems, position of either party): see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 307. The use of an action for the recovery of land as a substitute for actual entry is further considered at [17.11]–[17.13].

Actual re-entry [17.10] There are a number of decisions which deal with the effect of a supposed re-entry in a particular case without laying down any principle capable of general application. In Bayless v Le Gros (1858) 4 CBNS 537; 140 ER 1201 it was held to be sufficient if the landlord comes upon the premises and enters into an agreement with a third person whom he or she finds in possession whereby the latter is to become his or her tenant, the landlord intending by this to act upon the forfeiture and to oust the lessee. This is discussed in Ashton v Sobelman [1987] 1 WLR 177 at 185–6. Similarly,

continuance in possession through a subtenant after the acceptance of a concurrent lease may amount to re-entry: London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764; and see Ashton v Sobelman at 185. McCallum v McVean (1872) 3 VR (L) 23 is not helpful, for there the landlord had taken no step to determine the tenancy; further, the report does not show the terms of the stipulation entitling the lessor to determine the lease, so that it is not even known whether the lease provided for ‘re-entry’. In Sandhurst & Northern District Trustees etc v Canavan [1908] VLR 373 the lease contained a proviso for re-entry which did not dispense with a common law demand for rent. The failure to make such a demand was accordingly held to be fatal to the ejectment proceedings, but the judgment suggests that, had a formal demand for rent been made, the lease would have been determined by the steps which had been taken. In that case the lessor had served on the lessee a notice purporting to determine the tenancy as from the date of service for non-payment of rent, such rent being more than 14 days in arrears, and stating that the lessor re-entered the land on the day of service and that, unless the lessee forthwith gave up possession, proceedings to eject him would be taken. In Hamilton v Dawson (1899) 5 ALR 266 ‘notice of re-entry’ was regarded as sufficient. The lessor was also held to have re-entered in Gregg v Goodall (1896) 17 ALT 231, where the complainant’s solicitor’s clerk served on the defendant personally at the demised premises a notice requiring him forthwith to quit and deliver up the premises. The defendant argued that there should have been an actual entry by the landlord or his duly authorised agent, who should say ‘I re-enter and determine the lease’. Madden CJ disagreed, saying: [page 595] The authorities show that a landlord is bound to make it perfectly clear to his tenant that in consequence of a breach of a covenant in the lease he intends to put an end to the tenancy, and that no special form of ceremony is requisite. The evidence shows that there was a sufficient re-entry … The lease is properly determined if the tenant gets all the information that can be substantially of use to him. Next, there is Cleverdon v Townsend (1894) 16 ALT 69. Here, again, the

alleged re-entry was held to be good. On 11 August the lessor sent a notice to the lessee specifying a default in the payment of rent, stating that in consequence the tenancy had ceased on the day after the default and stating that, unless the tenant delivered up possession on 20 August, the lessor would apply for a warrant. On 20 August one of the complainant’s clerks went to the subject premises and found them locked. He knocked repeatedly, but could not get in. Williams J held that what the clerk did on 20 August in pursuance of the notice of 11 August was equivalent to re-entry. Where the president and secretary of the lessor (a voluntary association) went into the demised premises, and, not finding the managing director or the secretary of the lessee company, immediately sought them out and told them that they had reentered the demised premises and would be taking action to terminate the lease, it was held that the re-entry was sufficient: Fremantle etc Association of Workers v Victor Motor Co Pty Ltd [1963] WAR 201. An important decision is Moore v Ullcoats Mining Company Ltd [1908] 1 Ch 575. There the landlords claimed to have re-entered for breach of a covenant to permit them to inspect. On 29 April the landlords gave to the tenant notice as follows: We hereby give you notice that the lease [particulars of which were given] and the liberties licences and powers thereby granted have been determined by the company’s breach of covenant to permit inspection by the lessors’ agents of the mines demised by the said lease and to produce to them the company’s plans of the said mines and we hereby also give you notice that we intend to re-enter upon the premises demised by the said lease in pursuance of the proviso for that purpose therein contained. On 3 May the landlords served this further notice: We hereby demand possession of the mines [describing them] and we also give you notice that [the landlords’ agent] will attend at the Ullcoats Mines on Saturday the 4th instant at 8am to receive possession of the said mines. Possession was not given, and on 4 May the landlords issued a writ claiming possession, an injunction and other relief. Warrington J held that the writ was not equivalent to a re-entry, since it did not make an unequivocal demand for possession. His Lordship then went on to deal with the question whether the

service of the notices amounted to a re-entry, and held that it did not: see at 587–8: his Lordship’s view of the authorities as set out in these pages is quoted in [17.9]. Another important decision is that of Sholl J in Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97, where the authorities are reviewed. The landlord claimed to have forfeited the term for non-payment of rent. That which was relied upon as the [page 596] re-entry was the service upon the tenant of a notice (under the seal of the landlord and addressed to the tenant) which was in the following terms: Rosa Investments Pty Ltd formerly of 109 Russell Street Melbourne now of 22 Flinders Lane Melbourne, hereby gives you notice of its intention to exercise on 31 January 1963 its right of re-entry upon all that piece of land together with all buildings and other improvements erected thereon situate at and known as 84 Collins Street Melbourne, which you hold of it as tenant thereof pursuant to the lease dated 29 July 1960. You have made default in payment of rent payable under cl 2 (a) of the said lease. Service of this notice upon the defendant was admitted at the hearing, the mode of service not being revealed either by the admission or by evidence. Sholl J held that the landlord had not re-entered. His Honour began by referring to authorities for the view that mere notice of the lessor’s intention to re-enter, or to recover possession, or to forfeit or terminate the lease, is not enough to bring the term to an end. Sholl J then went on to consider the Victorian cases to which reference has already been made. His Honour next pointed out that all that had been served was a notice of intention to exercise 16 days after service, the right of re-entry for non-payment of rent. The notice stated, in effect, that the lessor was going to re-enter on 31 January. It announced a future act, which was never performed, for the lessor did nothing on 31 January. A mere revocable notice of intention to re-enter on a future day, not followed by any other step, was not an effective determination of a

fixed term under the usual proviso for re-entry: see NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 at 98. Such was the actual decision in the Rosa Investments case; but his Honour also dealt with the more general question of service of a notice as a means of effecting a re-entry ([1965] VR at 101–2): What the common law required was an unequivocal election by the lessor to forfeit, evinced by re-entry (or later, by writ of ejectment). Re-entry in earlier times was, no doubt, usually effected by the lessor personally going on to the demised premises and verbally demanding immediate possession from the lessee. But there can have been no magic in a verbal demand; I see no reason why a written demand should not have done as well, and if, for example, the lessee was stone deaf, it might be the only effective way. Nor can I see that the presence of the lessor personally was essential; his duly authorised agent could make the entry and demand just as effectively. I know that in Woodfall on Landlord and Tenant, 26th ed, vol 1, p 939, it is said, on the authority of Rolle’s Abridgement, that a corporation aggregate is incapable of re-entry by an agent not appointed under its corporate seal, but I can see no reason why a trading company in Victoria should not re-enter by an agent authorised in any way which is now legally available to the company. After referring to the Victorian cases, his Honour continued (at 105): Perhaps there has been in Victoria a trend towards the view that a written notice of immediate determination of a lease, by way of enforcing a forfeiture, is a sufficient re-entry under a proviso therefor, irrespective of the place and mode of service. Perhaps some judges have been influenced by general remarks in the English cases about evincing the lessor’s intention. But it has to be remembered that those remarks were made merely with reference to the sufficiency of proceedings in ejectment. Unless on [page 597]

the construction of the lease, or otherwise, there is a dispensation with the requirement of re-entry, a lessor must still, I think, in order to take advantage of a forfeiture which requires him to exercise it by re-entry, either proceed by an action for possession in the Supreme Court (which by a long course of authority is held equivalent to re-entry), or do something amounting to a demand on the demised premises, on the lessee or the person in possession, for immediate possession thereof, whether by verbal request or by service of clear written notice. Whether service of such a notice, addressed to the lessee or the person in possession, should be held sufficient if made by delivery of it to the demised premises by the post office as the lessor’s agent, is perhaps doubtful; I do not think any case has expressly so held. But I need not decide that point in the present case where the mode and place of service were not proved, as I am in any case of opinion that the notice was insufficient for a different reason. This reason was, as already mentioned, that the notice served was no more than a notice of intention to re-enter. A more recent case in which the authorities were reviewed is Ex parte Whelan [1986] 1 Qd R 500. The relevant parts of the judgment of Thomas J, with which the other members of the Full Court agreed, provides a useful summary of the current position (at 506–7): The landlord performed certain overt acts and made his intention of retaking possession perfectly clear. He gave written notice (in a solicitor’s letter accompanying the notice to remedy breach of covenant) that if the breaches were not remedied he would ‘re-enter the demised property and thereupon determine the lease’. In due course he attended at the premises with a locksmith and demanded possession. The articled clerk said ‘We’re effecting a re-entry’. The male tenant said to the locksmith ‘If you change that lock it will be at your own risk’. Eventually the police and the tenants’ solicitor were summoned, and the landlord and his companions left. Short of engaging in physical violence the landlord did everything possible to achieve his purpose. It is equally clear that the lessees refused to go and that they remained in occupation.

In these circumstances the landlord submits that it was sufficient to make an unequivocal demand for immediate possession, relying upon Price v Mayman [1948] SASR 41, 246; Fremantle Trades Hall Industrial Association v Victor Motor Co Ltd [1963] WAR 201, 204–5; Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97, 99–105; NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92, 97. The tenants submit that the re-entry was not effective unless the landlord obtained physical possession to the exclusion of the tenant, or served a writ for recovery of possession, relying upon Tattersall’s Hotel Penrith Pty Ltd v Permanent Trustee Co of NSW (1942) 42 SR (NSW) 104, 110; Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575, 587; and Warner v Sampson [1959] 1 QB 297, 320. A clear divergence can be seen in the above decisions and it is necessary to examine the basis for the conflicting views. A convenient and neutral starting point exists in Jones v Carter (1846) 15 M & W 718; 153 ER 1040 in which Parke B, delivering the judgment of the Court of Exchequer, dealt firstly with the case of a covenant which provided that on breach of covenant by the lessee the lease should be ‘void’. In such event the court rules that the lease would be void only upon the exercise of an election by the lessee to make it void. The court held that ‘the lease would be rendered invalid by some unequivocal act, indicating the intention of the lessor to avail himself of the option given to him, and notified to the lessee’. The court went on to observe: [page 598] An entry, or ejectment, in which an entry is admitted, would be necessary in the case of a freehold lease, or of a chattel interest, where the terms of the lease provided that it should be avoided by re-entry. Whether any other act unequivocally indicating the intention of the lessor would be sufficient to determine this lease, which is made void at the option of the

lessor, we need not determine, because an ejectment was brought … The point had similarly been left open by Parke J as a member of the Court of King’s Bench in Roberts v Davey (1833) 4 B & Ad 664, 672; 110 ER 606. When Mr Cole produced his work on ejectment in 1857 he stated the requirement that ‘the lessor must do some act evidencing his intention to enter for the forfeiture and determine the lease’. (Vide p 408). This was in the context of effecting the forfeiture of a lease void at the option of the lessor. That test has been taken up in a number of English cases in which the covenant gave the right of re-entry upon breach, including Elliott v Boynton [1924] 1 Ch 236, 246, 252. However, two separate lines of authority may be found throughout the English decisions and no attempt seems to have been made to reconcile them. Moore v Ullcoats Mining Co (above) and Warner v Sampson (above) assert that there must be an actual and effective re-entry ‘or he must do that which is in law equivalent to reentry, namely, commence an action for the purpose of obtaining possession’ (per Warrington J in Moore v Ullcoats Mining Co (above) at p 588 and per Hodson LJ in Warner v Sampson (above) at p 320). The point of departure in the two lines of authority is, I think, the assumption that the only set of facts which the law will regard as equivalent to a physically successful re-entry is the commencement of an action in ejectment. I do not think that that assumption is necessarily correct. After establishing that the English authorities are in conflict and that no attempt has been made to resolve the conflict, his Honour then turned to the Australian position (at 508–10): There is also some conflict in the Australian authorities. This was recognised by Sholl J in Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97. After a review of the cases, his Honour concluded that it was sufficient for the lessor to ‘do something amounting to a demand on the demised premises, on the lessee or the person in possession, for immediate possession thereof, whether by verbal request or by service of clear written notice’ (p 105). This view was

followed by Kaye J in NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92, 97. A different view seems to have prevailed in New South Wales. In Tattersall’s Hotel Penrith Pty Ltd v Permanent Trustee Co of NSW (1942) 42 SR (NSW) 104 at 110, Roper J said: In my opinion, in order to effect a re-entry the lessors or their agent must obtain possession to the physical exclusion of the lessee or anyone properly claiming under him. Again, in McKinnon v Portelli (1960) SR (NSW) 343, emphasis has been placed upon the fact that a mere notice of intention to re-enter or to recover possession is not enough to terminate the lease. Similarly, Hammond & Davidson’s Law & Practice Relating to Landlord and Tenant in New South Wales (4th ed), in reliance upon the Tattersall’s Hotel Case, and upon Re: Stewart; Ex parte Overells Pty Ltd [1941] St R Qd 175 says: To effect re-entry, the lessor must obtain physical possession to the exclusion of the lessee. [page 599] Unfortunately the Queensland case does not support such a proposition, and in the former case Roper J did not cite any authority. The same text writers, earlier in the same paragraph (para 674) had stated the more general test, namely ‘… breach of a condition, or of a covenant entitling the landlord to re-enter, makes the lease voidable only at the option of the landlord, and not void until the landlord has shown an absolutely clear intention to avoid it’, citing a number of English cases. In Fremantle Trades Hall Industrial Association v Victor Motor Co Ltd [1963] WAR 201, 204–5, D’Arcy J concluded that unequivocal demands were sufficient to effect a re-entry. This was also the preferred view in South Australia in Price v Mayman [1948] SASR 241,

246. Similarly, in Finney Isles v Estate CH Pelling [1950] St R Qd 128, 136, Macrossan CJ delivering the judgment of the Full Court held that a notice to quit was: … equivalent to the ancient entry. It is an act unequivocal in the sense that it asserts the right of possession upon the grounds specified in the notice. Cf Grimwood v Moss (1872) LR 7 CP 360, and Serjeant v Nash Field & Co [1903] 2 KB 304 at pp 310–11. and By giving it, a lessor is acting in the only way which is open to him if he desires to re-enter, and in my opinion it is an unequivocal act indicating an intention to determine the lease. Cf Price v Mayman [1948] SASR 241 at 246. Quite apart from the fact that it may be difficult to distinguish the decision of this court in the Finney Isles Case, that decision is preferable in principle to those cases which suggest that re-entry may be effected only by physical dispossession or by the issue of a writ. The most satisfactory discussion which examines both points of view is that of Sholl J in the Rosa Investments Case in which he identifies some of the diverging authorities and concludes that an unequivocal demand communicated to the lessee will suffice. It may also be observed that since at least as early as the Assize of Novel Disseisin, the courts have been concerned to discourage violent entries and re-entries upon land. There would be something undesirable in a law which recognised a dispossession only if it were physically successful. To leave the law in such a state would be to provide too great an incentive to landlord and tenant alike to achieve physical success whenever such a confrontation occurred. The wider view expressed in the Rosa Investments Case and Finney Isles v Pelling is to be preferred to the limited examples of reentry permitted by Moore v Ullcoats Mining and Warner v Sampson. It was held that re-entry was effected in this case. In Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607 Young J criticised departures from the Moore v Ullcoats Mining Co Ltd approach. A demand for the keys to the premises and that the tenants vacate may amount to a re-entry

even though the intention is not to re-enter but to secure goods on the premises: Planned Properties Ltd v Ramsdens Commercials Ltd (QB, Hutchinson J, 2 March 1984, unreported). London and County (A & D) Ltd v Greenwoods (Hosiers & Outfitters) Ltd [1969] 1 WLR 1215 may bear on the question of what amounts to re-entry. Re-entry which determines a lease is to be distinguished from re-entry which is merely the exercise of an existing right of property of the person exercising it. The distinction (which is discussed in [21.1]) was drawn by Lord Greene MR in Butcher v Poole Corporation [1943] KB 48 at 53–4; [1942] 2 All ER 572 at 577. [page 600]

Action to recover possession [17.11] Where there is a proviso for re-entry, the bringing of an action to recover possession of the demised premises will stand in place of re-entry: see [17.9]. The claim for possession must be an unequivocal demand if the institution of proceedings is to have this effect: Moore v Ullcoats Mining Co Ltd [1908] 1 Ch 575. There the lessee broke a covenant to permit the lessor to inspect. The lease contained a proviso for re-entry, and the lessor issued a writ claiming recovery of possession of the mine, mesne profits, an injunction to restrain the lessee from working the mine so as to occasion loss or damage to it, an order on the lessee to allow inspection of the mine and its workings, a receiver and damages. Warrington J held that the writ was not an unequivocal claim for possession and therefore was not equivalent to re-entry under the proviso. Similarly, in Calabar Properties v Seagull Autos Ltd [1969] 1 Ch 451, a claim for injunctions to restrain breaches of covenant was held to be, not ancillary to the claim for possession, but an alternative claim, so that the writ could not be regarded as an unequivocal demand for possession. A claim for a declaration of title to possession will determine the lease even if the plaintiff does not claim an order for possession: Cohen v Donegal Tweed Co Ltd (1935) 79 Sol Jo 592. For a writ claiming possession to stand in place of re-entry it is not necessary that the tenant should be named as defendant; a writ directed to an assignee or sublessee will suffice: Commissioners of Works v Hull [1922] 1 KB

205; [1921] All ER Rep 508. The question whether the mere issue of a writ making the appropriate claim, without service, is sufficient is discussed in [17.12]. As to the position between the institution of proceedings and the giving of judgment, see [17.13]. The logical difficulty about treating the institution of proceedings as that which perfects the cause of action by determining the lease is referred to in [17.12]. The bankruptcy of the lessee does not prevent the lessor from forfeiting the lease for non-payment of rent by the issue and service of a writ: Ezekiel v Orakpo [1977] QB 260.

Issue of writ without service [17.12] The question arises whether the mere issue of a writ unequivocally demanding possession without service is the equivalent of re-entry. The distinction between mere issue, and issue and service, is not always made; indeed, at times there is a positive confusion of the two. In Ex parte Dyke (1882) 22 Ch D 410 (a decision given before it had been decided that the abolition of the old procedure in actions of ejectment had not altered the rule that the commencement of an action was the equivalent of re-entry), Bowen LJ at 428–9, in the space of a single sentence moved from service to issue, saying: ‘… although the writ of ejectment was served on 14 October the trustees had been appointed on 13 October, so that the writ was not [page 601] issued till after the lease had vested in the trustees’. The prevailing view which seems to be that it is the issue and service of the writ that stand in place of reentry, is supported by Jones v Carter (1846) 153 ER 1040 at 1043; 153 ER 1040; Majala Pty Ltd v Ellas [1949] VLR 104 at 109; Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433; 2 All ER 795; David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487 at 1498–9; Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84 at 90–1; NCL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 at 98; Billson v Residential Apartments Ltd [1992] 1 AC

494 at 534 (HL). In Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525, Stirling LJ said at 314: ‘I come, therefore, to the conclusion that the lease was forfeited and gone from the time when the writ was served …’. In the same case, Mathew LJ remarked at 315: ‘… but it is said that all that was done was to issue and serve a writ, and that to do so does not finally create a forfeiture’. It is arguable that these passages support the view that service is necessary; while this may be said of the first passage, it is thought that the second does not imply any expression of opinion. In some cases what is referred to as the equivalent of re-entry is ‘commencing’ or ‘bringing’ an action for possession: see, for example, Moore v Ullcoats Mining Company Ltd [1908] 1 Ch 575 at 587; Dennis and Copley v Eddie [1952] VLR 92 at 103; McKinnon v Portelli (1960) SR (NSW) 343 at 346. Ordinarily, an action would be regarded as commenced or brought by the issue of the writ, so that remarks of this kind give some support to the view that service is not necessary. There are, indeed, a number of decisions where that which stands in place of re-entry has been in terms described as the issue of the writ: Commissioners of Works v Hull [1922] 1 KB 205 at 208; [1921] All ER Rep 508 (per Shearman J); Elliott v Boynton [1924] 1 Ch 236 at 246–7; [1923] All ER Rep 174 (per Pollock MR), at 250 (per Warrington LJ) and at 252 (per Astbury J); Woolwich Equitable Building Society v Preston [1938] Ch 129; Warner v Sampson [1959] 1 QB 297 at 304; [1958] 1 All ER 44 (per Lord Denning during the argument), at 320–1 (per Hodson LJ) and at 326 (per Ormerod LJ); Lo Giudice v Biviano (No 2) [1962] VR 420. Other cases in which the issue of the writ appears to have been regarded as the necessary act are Driscoll v Church Commissioners for England [1957] 1 QB 330 at 339–40; [1956] 3 All ER 802 (per Denning LJ); Borzak v Ahmed [1965] 2 QB 320; 1 All ER 808; Calabar Properties Ltd v Seagull Autos Ltd [1969] 1 Ch 451; McVicar v Jackson (1958) 75 WN (NSW) 146; Greater Wollongong City Council v Barker [1964] NSWR 897; 81 WN (Pt 1) (NSW) 105; Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1971, unreported). It is true that in Dendy v Evans [1909] 2 KB 894; [1908–10] All ER Rep 589, Darling J (at 900) referred to the issue and service of the writ as equivalent to the ancient entry; but on appeal ([1910] 1 KB 263 at 265–8) Cozens-Hardy MR spoke of issue only; the headnote on appeal is misleading in this respect. The balance of authority was in favour of the view that mere issue of a writ

would suffice. Turning from authority to principle it might be thought that the answer to [page 602] the question depended upon whether what was necessary was a mere unequivocal act, or such an act communicated to the tenant. In Jones v Carter (1846) 153 ER 1040 at 1043, Parke B delivering the judgment of the court, said: ‘We think that the bringing of an ejectment for a forfeiture, and serving it on the lessee in possession, must be considered as the exercise of the lessor’s option to determine the lease …’. A little earlier, at 1043, the learned Baron had said: ‘… the lease would be rendered invalid by some unequivocal act, indicating the intention of the lessor to avail himself of the option given to him, and notified to the lessee …’. In these observations, the requirement of service of the writ appears to follow from the requirement of notification to the lessee. On the other hand, in Serjeant v Nash Field & Co [1903] 2 KB 304 at 310; [1900–3] All ER Rep 525, Collins MR referred merely to an unequivocal act: ‘There is a final determination of a tenancy under a lease when the lessor, by some final and positive act which cannot be retracted, treats a breach of covenant by the lessee as constituting a forfeiture’. There is a good deal to be said for the view that a re-entry may be effective, notwithstanding that it does not come to the knowledge of the tenant. So far as the actual re-entry is concerned, the tenant might have deserted the premises, so that he or she would not become aware of the re-entry. In the case of the deemed re-entry resulting from the commencement of an action, the action might be commenced against, and the writ served upon, not the original lessee, but a sublessee or an assignee; the commencement of such an action would amount to re-entry (Commissioners of Works v Hull [1922] 1 KB 205; [1921] All ER Rep 508), notwithstanding that the original lessee might never become aware of the steps taken. Having regard to these considerations, and to the authorities referred to above, it is strongly arguable that the issue of a writ making the necessary unequivocal demand for possession will amount to re-entry and that service of the writ is not necessary in order, so to speak, to perfect the re-entry. It was not until 1970 that it became necessary to

decide the point; this is not surprising, for the issue of the writ will ordinarily be soon followed by its service, and it is unlikely that it will be found necessary to determine whether re-entry has been effected in respect of the short interval between issue and service. The question did at last fall for decision in Canas Property Co Ltd v KL Television Services Ltd [1970] 2 All ER 795; [1970] 2 QB 433, where a summons against an assignee was issued but not served, and the question whether the lease had been thereby determined arose in an action brought by the lessor against the original lessee for rent alleged to have accrued due after the issue of the summons against the assignee. The Court of Appeal held that the lease had not been terminated, on the ground that the lessor had an election which was not determined until it was communicated to the other party, except in a case where the lessor could not reasonably be expected to find or communicate with the other party concerned. Without commenting on the correctness of this decision one may make the respectful observation that the matter is dealt with fairly shortly, only some of the relevant authorities being considered and the discussion of principle being [page 603] disappointingly brief. The decision just cited holds also that mesne profits may be recovered, not from the date of issue of a writ unequivocally claiming possession, but from the date of the service of such a writ; the decision was cited for this proposition, without comment, by Brennan J in Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 39. That decision was briefly discussed, but its correctness not doubted, in David Blackstone Ltd v Burnetts (West End) Ltd [1973] 1 WLR 1487 at 1496; it was referred to in Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 at 9571 (SC, NSW); and applied in Peninsular Maritime Ltd v Padseal Ltd [1981] 2 EGLR 43 (CA). In Maori Trustee v Bolton [1971] NZLR 226 it was held, following Canas Property Co Ltd v KL Television Services Ltd, that the lease was determined by service of the writ in an action to recover the land. The House of Lords, in Billson v Residential Apartments Ltd [1992] 1 AC 494 reaffirmed that issue and service of the writ was required, and the

principle that the exercise of the lessor’s option to determine the lease must be exercised once and for all — in other words, clearly and unequivocally. Lord Templeman (with whom the other members of the House of Lords agreed) said (at 534): The bringing of an action to recover possession is equivalent to an entry for the forfeiture. Thus in Jones v Carter (1846) 15 M & W 718 at 726; 153 ER 1040 at 1043 Parke B said: … the bringing of an ejectment for a forfeiture, and serving it on the lessee in possession, must be considered as the exercise of the lessor’s option to determine the lease; and the option must be exercised once for all … for after such an act, by which the lessor treats the lessee as a trespasser, the lessee would know that he was no longer to consider himself as holding under the lease, and bound to perform the covenants contained in it … This observation was cited and applied by Lord Denning MR in Canas Property Co Ltd v KL Television Services Ltd [1970] 2 All ER 795 at 798; [1970] 2 QB 433 at 440. At first sight the first sentence of Lord Templeman’s statement suggests that service of the writ is not necessary to complete the election. However, the context and authorities referred to indicate otherwise. This view was taken in GS Fashions Ltd v B & Q plc [1995] 1 WLR 1088 at 1092–3 (per Lightman J). Reference should also be made to [17.7] and [17.22]. Decisions to the like effect were reached by Lush J in Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84 at 90–1, and by Kaye J in NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 at 98. Once a writ claiming possession is served, the discontinuance or withdrawal of the action does not revoke the determination of the lease: NGL Properties at 98, applying Jones v Carter (1846) 15 M & W 718; 153 ER 1040. Nor can this position otherwise be resiled from: see GS Fashions Ltd v B & Q plc: see further [17.18]. This follows from the general rule that the determination of the lease cannot be revoked: see NGL Properties at 98; and see GS Fashions Ltd v B & Q plc. Service of a writ claiming possession does not, however, determine a lease where the proceeding is subsequently compromised:

[page 604] Twinsectra Ltd v Hymes (1995) 71 P & C 145. In Twinsectra Aldous LJ explained the principle as follows: … the authorities establish that service of the proceedings for possession is an election by the lessor to treat the lease as forfeited. Further, it is to be taken as notional re-entry and thus forfeiture; but the act of forfeiture is subject to determination by the Court of the validity of the claim. The lease is potentially good and the process of forfeiture is not complete until the proceedings are determined, which may include determination of an application for relief from forfeiture. Thus, service of the proceedings is taken as forfeiture, but it will be a nullity if the proceedings do not succeed, or there is relief from forfeiture. There is a logical difficulty in regarding the issue or (especially) the issue and service of a writ as determining the tenancy. An action for the recovery of land can be maintained only by a person who has the immediate right to possession: Plummer v David [1920] 1 KB 326 at 330; Croft v Kennaugh [1945] VLR 40 at 41. In such an action the issue is whether, at the date of the writ, the plaintiff was entitled to possession: Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225 at 227; Housing Commission of NSW v Allen [1967] 1 NSWR 776; 86 WN (Pt 2) (NSW) 204 at 212; Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540. Where the plaintiff is entitled to forfeit the lease he or she must do so by taking some step; until that step is taken, his or her cause of action is not complete: Elliott v Boynton [1924] 1 Ch 236 at 248–9; [1923] All ER Rep 174. On principle one would have thought that, since a writ of summons will be premature unless the cause of action exists at the time of its issue (Minister of State for the Interior v RT Co Pty Ltd (1963) 107 CLR 1 at 7; [1963] ALR 57), a cause of action could not be regarded as perfected by the issue and service of the writ itself. Whether as a matter of logic the issue could be regarded as perfecting the cause of action is another matter, for it might be said that the cause of action is complete by the time when the issue of the writ is complete. Be that as it may, it would appear to be logically indefensible to maintain that a cause of

action existed when the writ was issued if the true view was that it was the issue and service of the writ that supplied the last element of the cause of action. Despite this difficulty, it is well settled that the commencement of proceedings (whatever that may mean) can be the act which determines the lease and so puts the plaintiff in the position of being able to maintain the action: see further [17.13]. An attempt to rationalise the rule that the commencement of an action can stand in place of re-entry and so enable the plaintiff to maintain the action might pray in aid the suggestion that a forfeiture does not determine the lease only as from the date of re-entry, but relates back to the breach which gave rise to the right to forfeit: Driscoll v Church Commissioners for England [1957] 1 QB 330 at 344; [1956] 3 All ER 802 (per Hodson LJ). For the contrary view on this question of relation back, see Elliott v Boynton [1924] 1 Ch 236; [1923] All ER Rep 174; Muspratt v Johnston [1963] 2 QB 383 at 394; 2 All ER 339 (where Lord Denning MR said that it was ‘settled law’ that a forfeiture does not relate back). The conflicting views are discussed in Owendale Pty [page 605] Ltd v Anthony (1967) 117 CLR 539 at 559, 583 and 588–9. Reference should also be made to Minister of State for the Interior v RT Co Pty Ltd (1963) 107 CLR 1 at 7; [1963] ALR 57. It may well be that it is better simply to accept the rule which enables the institution of the action itself to perfect the cause of action as one too well established to stand in need of rationalisation than to seek to justify it as a matter of logic by recourse to some dubious doctrine of relation back.

Position prior to judgment [17.13] In Driscoll v Church Commissioners for England [1956] 3 All ER 802; [1957] 1 QB 330, the question arose whether a tenant had standing to apply under the English equivalent of s 84 of the Property Law Act 1958 (Vic) for an order discharging or modifying restrictions contained in covenants in his

lease where writs had been issued by the landlord claiming possession on the ground that the leases had been forfeited for breach of covenant. Denning LJ dealt with this question (at 339–40): He said that because of those writs for forfeiture being issued, Driscoll had no locus standi to apply for these restrictions to be modified at all in regard to six of these leases. He said that the issue of a writ for forfeiture is an unequivocal election by the landlords to determine the leases, and in consequence the leases had gone and the covenants had gone, and that there was nothing left to modify. I do not agree with that argument, for this reason; that, although a writ is an unequivocal election, nevertheless, until the action is finally determined in favour of the landlord, the covenant does not cease to be potentially good. For instance, the forfeiture may not be established; or relief may be granted, in which case the lease is re-established as from the beginning. That appears from the case of Dendy v Evans [1910] 1 KB 263 [1908– 10] All ER Rep 589, following what Sir Richard Henn Collins MR said in Serjeant v Nash Field & Co [1903] 2 KB 304; [1900–3] All ER Rep 525. It seems to me that so long as the covenant is potentially good, Driscoll, or anyone in like position, has a locus standi to apply to the tribunal for a modification of the covenant. These observations were applied by Fenton Atkinson J in Borzak v Ahmed [1965] 2 QB 320; 1 All ER 808, his Lordship saying (at 326): ‘The authorities appear to establish clearly that the issue of the writ itself does not terminate the tenancy … But when the matter goes a stage further and judgment has been obtained and any existing claim for relief has been disposed of, then plainly the tenancy is terminated …’. Doubt may be entertained as to the correctness of the view that the institution of an action for the recovery of possession does not operate to determine the lease. There is a good deal to be said for the view that, provided the ground of forfeiture in fact exists, the institution of proceedings will determine the lease, notwithstanding the possibility that relief against forfeiture may be granted. In Serjeant v Nash Field & Co [1903] 2 KB 304 at 311–12; [1900–3] All ER Rep 525, Collins MR said: It is true that the rights of the parties were not determined by the issue of the writ and could not be finally determined until the result of the

action was known; but that con-sideration does not affect the fact of the election of the lessor to treat the lease as [page 606] at an end, subject to proof that there had been a breach of covenant which entitled her to do so. There was, therefore, no relation of landlord and tenant existing between the mortgagees and the plaintiff … It might well be said that, leaving aside the matter of relief against forfeiture, the decision of the court will merely remove any doubt which exists if the facts warrant the issue of the writ; the commencement of the action will serve to determine the lease, notwithstanding that it may not be until some months later that the court resolves the dispute and holds that the circumstances were such that the landlord was entitled to forfeit the lease. Once proceedings for possession have been served, no subsequent amendment of the pleadings can improve the tenant’s position (or, it seems, the position of either party): see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 307; and see [17.9].

Common law demand for rent [17.14] Before a lease can be forfeited for non-payment of rent, a common law demand (which involves troublesome formalities) must be made for the rent, unless the lease dispenses with a formal demand or the case falls within s 79 of the Supreme Court Act 1986 (Vic). This section makes a common law demand for rent unnecessary where one half-year’s rent is in arrears and the landlord had the right by law to re-enter for non-payment thereof: compare Conveyancing Act 1919 (NSW) s 85(1)(d), which implies necessary powers in the lessor where rent is more than one month in arrears whether a formal demand has been made or not; and see Landlord and Tenant Act 1899 (NSW) s 8; Landlord and Tenant Act 1936 (SA) s 4(1); Common Law Procedure Act 1854 (Tas) s 183. A well drawn lease will therefore contain some such words

as ‘whether formally demanded or not’, ‘whether legally demanded or not’, ‘although no legal or formal demand be made’. In the case of land under the operation of the Transfer of Land Act 1958 (Vic), if the parties do not use the general law form of lease but instead use an instrument of lease, s 67 of that Act implies into the instrument of lease a proviso for re-entry which dispenses with the common law demand: see Conveyancing Act 1919 (NSW) s 85(1) (d), which expressly applies to every memorandum of lease under the Real Property Act 1900 (NSW) s 85(2); see also E C Lewis and D I Cassidy, Tenancy Law in New South Wales, Butterworths, Sydney, 1966, (looseleaf), pp 385–6 and note the now repealed provision of the Real Property Act, s 79(b). Unless a common law demand is dispensed with, the lessor must, before he or she can re-enter for non-payment of rent, go through certain troublesome formalities, which at the present day appear fantastic: Sandhurst & Northern District Trustees Executors & Agency Co Ltd v Canavan [1908] VLR 373; Gleeson v Richey [1959] VR 258; Lo Giudice v Biviano (No 1) [1962] VR 412. A common law demand must be made: (a) by the landlord or his or her agent; (b) upon the precise day on which the rent might be paid to avoid a forfeiture; [page 607] (c) of the precise rent due; (d) at a convenient time before sunset and continuing until sunset; (e) upon the land and at the most notorious part of it, or at the place, if any, appointed for payment. The essentials of a common law demand are discussed in Cole on Ejectment, pp 412–14. There are a number of decisions on the question whether the provisions of a lease are such as to exclude the common law demand. Where a tenancy agreement provided that whenever any rent should be due and unpaid the landlord might put an end to the tenancy, it was held that no demand for rent was necessary: Green v Patten (1894) 15 ALT 254. In Commissioners of State Savings Bank of Victoria v Millane [1931] VLR 18

McArthur J held that a common law demand was unnecessary where the mortgage provided that in the event of default the mortgagee might re-enter upon giving, in the manner specified in the mortgage, seven previous days’ notice of intention so to do. Where the lease provided that in the event of default the landlord might re-enter, in which event the lease might be produced by the landlord as a notice to quit duly given and expired, it was held by Pape J that the landlord was not excused from making a common law demand: Gleeson v Richey [1959] VR 258. On the other hand, in Lo Giudice v Biviano (No 1) [1962] VR 412, a proviso for re-entry in similar terms was held to make a common law demand for rent unnecessary, Adam J declining to follow Gleeson v Richey on this point.

Notice to remedy [17.15] By s 146(1) of the Property Law Act 1958 (Vic), a right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice: (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and (c) in any case, requiring the lessee to make compensation in money for the breach, and the lessee fails, within a reasonable time thereafter, or the time, not being less than 14 days, fixed by the lease, to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach. For the corresponding provisions in other states, see Conveyancing Act 1919 (NSW) ss 129(1), 133A(2); Property Law Act 1974 (Qld) s 124(1); Landlord and Tenant Act 1936 (SA) s 10; Conveyancing and Law of Property Act 1884 (Tas) s 15(1); Property Law Act 1969 (WA) s 81(1). These provisions are discussed in Chapter 18. Where the balance of the term has been assigned, the lessor is not required

to serve the prescribed notice on the assignor of the term: Chelfield Pty Ltd v Goldsea Pty Ltd; Re WC Pty Ltd [2003] 2 Qd 243. [page 608]

Effect of forfeiture [17.16] Once a lease has been forfeited the tenant remains liable for rent accrued before the forfeiture or for other antecedent breaches of covenant: see McMahon v Ambrose [1987] VR 817 at 831, also at 822, 853. This is so notwithstanding that the proviso for re-entry contains words whereby the landlord who re-enters is to have the premises again ‘as if the said indenture had never been made’: Hartshorne v Watson 132 ER 756 at 758, where Tindal CJ said: The proper construction of this condition is, that from the time of reentry, the lessor shall have the land as if the indebture had not been made; for the period previous to re-entry the lessee or assignee had it subject to the indenture. It would be a singular construction to hold that to an action for rent on an instrument under seal, the lessee or assignee may plead, not payment, but that the lessor entered for nonpayment; in other words, may deprive the lessor of his rent because he declines to submit to any further loss; the argument would apply equally to covenant for repairs, or other services to be rendered by the lessee, and is so unreasonable that it cannot be upheld. Forfeiture of a lease avoids all subleases: Great Western Railway Co v Smith (1876) 2 Ch D 235 at 253; Pennell v Payne [1995] QB 192 at 197; PW & Milton Gate Investments (BT Property, Pt 20 defendants) [2004] 2 WLR 443; Barrett v Morgan [2002] 2 AC 264 at 274; see further [16.3]. The right of the sublessee to obtain relief against forfeiture of the head lease is considered in Chapter 19. Once the lease has been forfeited, no subsequent act will operate as a waiver: see [17.18]. Whether a landlord who has forfeited the lease may recover damages for ‘loss of bargain’ is discussed in [16.26]. Jurisdiction to grant relief against forfeiture exists: see [17.19].

Mesne profits — double value and double rent [17.17] If a lessee becomes a trespasser by remaining in possession after the forfeiture of his or her lease, he or she is liable to pay mesne profits, which are in substance damages for trespass: Wilson v Kelly [1957] VR 147 at 152, and can be claimed only from the time when the defendant ceased to hold as a tenant and became a trespasser. In Elliott v Boynton [1924] 1 Ch 236; [1923] All ER Rep 174, the lease had been forfeited for breach of covenant and the lessor contended that the mesne profits payable should run from the date of the first breach of covenant giving rise to the action, on the ground that the re-entry related back to the breach of covenant giving the right to re-enter. This argument was rejected, it being held that the lessee was rightly in possession until the date of re-entry, so that mesne profits were recoverable only from the date upon which re-entry was effected: see also Gair v Smith [1964] VR 814 at 819. The result is that mesne profits run from the date of actual re-entry or, in the case of the deemed re-entry constituted by the bringing of an action for the recovery of the land, the date of the bringing of the action. On the question whether it is the issue or the service of the writ which effects the forfeiture, see [17.12]. Mesne profits may be recovered [page 609] only from the date of service of the writ where the commencement of the action puts an end to the lease: Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433; 2 All ER 795. It should be noted that the question of the correctness of Elliott v Boynton was referred to in Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 559, 583 and 588–9. The plaintiff is entitled to mesne profits until possession is delivered up to him or her: Southport Tramways Co v Gandy [1897] 2 QB 66. An inquiry may be directed in order to enable the assessment of mesne profits to be made: Gair v Smith at 819. In Minister of State for the Interior v RT Co Pty Ltd (1963) 107 CLR 1; [1963] ALR 57, the plaintiff brought an action claiming mesne profits. The writ was issued before entry, but entry was made before the trial of the action. Taylor J held that the action failed on the ground that it was premature, the action not

being proceedings in ejectment. The latter was relevant because it had long been established in a number of jurisdictions that a claim for mesne profits could be combined with an action of ejectment against a tenant who had held over without consent: at 107 CLR 6. The judgment contains a useful discussion of the basis of the claim for mesne profits; see also London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764. When the rent represents the fair value of the premises, mesne profits are assessed at the moment of the rent, but if the real value is higher than the rent, then the mesne profits must be assessed at the higher value: Clifton Securities Ltd v Huntley [1948] 2 All ER 283. The lessor may rely on the rent payable under the expired lease as proof of the measure of the mesne profits: Rock Bottom Fashion Market Pty Ltd v HR & CE Griffiths Pty Ltd [1998] ANZ ConvR 549; (1998) Q ConvR ¶54-505 per Dowsett J with whom Pincus JA and Helman J agreed; Clover Pines Pty Ltd v Avin Operations Pty Ltd [2003] VSC 242 at [7]. Where a tenant holds over and fails to keep the premises in repair, in assessing mesne profits the value of repairing covenants may be taken into account in addition to the rent reserved: Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic), Adam J, 25 June 1971, unreported). Loss other than loss of rent may also be recovered: Lee v Blakeney (1887) 8 LK (NSW) 141; Dunn v Large (1783) 3 Doug 335; 99 ER 683. As to the liability of receivers appointed by the mortgagee of a lease to account to the landlord for rent paid by a subtenant, whether as money had and received or mesne profits, see Official Custodian for Charities v Mackey (No 2) [1985] 1 WLR 1308. It should be noted that in some states there are provisions which entitle the landlord to double damages or double rent: see Landlord and Tenant Act 1958 (Vic) ss 9, 10 (provisions repealed as from 1 August 2010 — see LL&T Comparative Table); similar provisions were repealed in New South Wales by the Imperial Acts Application Act 1969. Section 9 of the Victorian Act and s 138 of the Queensland Property Law Act 1974, which provide for recovery of double damages, are equivalent to the English Landlord and Tenant Act 1730 (4 Geo 2 c 28) s 1. It does not apply to weekly tenancies: Lloyd v Rosbee (1810) 2 Camp 453; 170 ER 1216. As to quarterly tenancies, see Wilkinson v Hall (1837) 3 Bing NC 508; 132 ER 506. The section does apply to a

[page 610] yearly tenancy: Ryal v Rich (1808) 10 East 48; 103 ER 693. One tenant-incommon may sue for the double value of his or her moiety: Cutting v Derby (1776) 2 Wm Bl 1077; 96 ER 634; [1775–1802] All ER Rep 520. Tenantsin-common cannot jointly maintain an action for double value where the premises have been held over after the expiration of a tenancy from year to year without proof of a joint demise: Wilkinson v Hall. It is not a dividing of the cause of action to levy one plaint for rent of premises and another to recover double value: Wickham v Lee (1848) 12 QB 521; 116 ER 963. The section applies only to a case of a wilful and contumacious holding over by a tenant after notice to quit and not a bona fide holding over by mistake or under a fair claim of right: Wright v Smith (1805) 5 Esp 203; 170 ER 786; Soulsby v Neving (1808) 9 East 310; 103 ER 592; Rawlinson v Marriott (1867) 16 LT 207; Hirst v Horn (1840) 6 M & W 393; 151 ER 464; Public Curator v L A Wilkinson (Northern) Ltd [1933] QWN 28. The section does not apply unless the tenant is conscious that he or she has no right to retain possession: Swinfen v Bacon (1861) 6 H & N 846; 158 ER 349; see also French v Elliott [1960] 1 WLR 40, to the same effect. It is not enough to show that the premises were held over by a subtenant of the defendant without his or her assent or authority: Rands v Clark (1870) 19 WR 48. Nor does the section apply when the tenant holds over under the provisions of Pt V of the Act: Crook v Whitbread (1919) LJKB 959. The notice may be given by a receiver appointed by the court: Wilkinson v Colley (1771) 5 Burr 2694; 98 ER 414, or by a receiver under a mortgage deed: Poole v Warren (1838) 8 Ad & El 582; 112 ER 959. It may be given either before or after the expiration of the term, provided in the latter case that the landlord has in the meantime done no act to acknowledge the continuance of the tenancy: Cutting v Derby; Cobb v Stokes (1807) 8 East 358; 103 ER 380. A notice to quit is itself a demand for possession under the section without a more specific demand: Wilkinson v Colley; Page v More (1850) 15 QB 684; 117 ER 618. A notice to quit at noon on the last day of the term is bad: Page v More. The penalty given by the section is not double rent, but double the yearly value: Doe d Matthews v Jackson (1779) 1 Doug KB 175; 99 ER 115. As to the calculation of double value, see Robinson v Learoyd

(1840) 7 M & W 48; 151 ER 673; Trivett v Hurst [1937] St R Qd 265, and as to the landlord waiving his or her claim by accepting a single rent, see Ryal v Rich. Double rent may be recoverable under the Property Law Act 1974 (Qld) s 139 or the Landlord and Tenant Act 1958 (Vic) s 10 (a provision repealed as from 1 September 2012 — see LL&T Comparative Table) which correspond to the English Distress for Rent Act 1737 (11 Geo 2 c 19) s 18. The section applies to all tenants who have power to determine the tenancy by notice: Johnstone v Hudlestone (1825) 4 B & C 922; 107 ER 1302. In proceedings under the section the terms of the tenancy and of the notice to quit should be so shown that the tenant’s power to determine the tenancy by notice, and the sufficiency of the notice actually given, may appear: Humberstone v Dubois (1842) 10 M & W 765; 152 ER 681. A notice to quit upon a contingency will not [page 611] make the tenant liable, even if the contingency happens: Farrance v Elkington (1811) 2 Camp 591; 170 ER 1262. A tenant liable under the section may put an end to his or her liability as to the future by leaving the premises without giving a fresh notice to quit: Booth v Macfarlane (1831) 1 B & Ad 404; 109 ER 1022. Where the landlord assigns the reversion after the expiry of the notice to quit, the assignee is the ‘landlord’ and may sue for the double rent: Northcott v Roche (1921) 37 TLR 364. The notice of intention to quit need not be in writing: Timmins v Rowlinson (1765) 3 Burr 1603; 97 ER 1003. See also Cooke, ‘Trespass Mesne Profits and Restitution’ (1994) 110 LQR 420; and N Williams, Civil Procedure Victoria, Butterworths, 1987, Sydney, (looseleaf), vol 1, paras I21.03.120 and I21.03.125. As to the difference between a claim for mesne profits and a claim for use and occupation, see Anderson v Bowles (1951) 84 CLR 310 at 319; and see [11.28].

Waiver

[17.18] A cause of forfeiture may be waived (compare waiver after termination: see [16.2]). Waiver of a breach of covenant may be express or implied. At common law, an implied waiver waived only the particular breach; it did not waive the condition itself: Doe d Griffith v Pritchard (1833) 110 ER 973 at 975–6. An express waiver, however, destroyed the condition itself (Dumpor’s case (1603) 4 Co Rep 119). Section 143 of the Property Law Act 1958 (Vic) abrogates this inconvenient rule: see also s 148 and Mulcahy v Hoyne (1925) 36 CLR 41. The rule has also been abrogated in the other states: Conveyancing Act 1919 (NSW) ss 120, 123; Property Law Act 1974 (Qld) s 119; Landlord and Tenant Act 1936 (SA) s 47; Conveyancing and Law of Property Act 1884 (Tas) s 16; Property Law Act 1969 (WA) ss 73, 79. In this section, ‘actual waiver’ includes waiver by conduct: Mills v Griffiths (1876) 45 LJ QB 771. The fact that an act such as the payment of rent, which has to be performed periodically under a contract, has in the past been performed unpunctually without protest does not justify the assumption that the irregularity will be waived in future, and so place on a landlord the obligation to give the tenant notice before exercising his or her remedies for a further breach: Bird v Hildage [1948] 1 KB 91; [1947] 2 All ER 7. Waiver is implied if the landlord, with knowledge of the cause of forfeiture (Atkin v Rose [1923] 1 Ch 522; Carson v Wood (1884) 10 VLR (L) 223; Majala Pty Ltd v Ellas [1949] VLR 104; Finley v Russell-Jones (1949) 49 SR (NSW) 96 at 101; 66 WN 32 at 35; Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151; Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340; Ex parte Whelan [1986] 1 Qd R 500 at 504) does any act recognising the continued existence of the relationship of landlord and tenant (Davenport v Smith [1921] 2 Ch 270); compare waiver and implied agreement, Ex parte Whelan at 504–5 and Gollin & Co Ltd v Karenlee Nominees Pty Ltd (1983) 153 CLR 455 at 465–9. Delay is not waiver, nor is inaction, though it may be evidence of it: Selwyn v Garfit (1888) 38 Ch D 273 at 284 and, in some cases, would probably in [page 612] practice be taken as conclusive evidence: Majala Pty Ltd v Ellas. The effect of

an act relied upon as waiver must be considered objectively without regard to the state of mind of the landlord or tenant: Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048; [1972] 3 All ER 610. The proffering of a mere negotiating document may be a sufficient act of recognition of the existence of a presently subsisting tenancy, depending on all the circumstances of the case: Expert Clothing v Hillgate [1986] Ch 340 at 360. In that case the Court of Appeal distinguished between acts such as this, and a demand for or acceptance of rent. In the latter case ‘the established legal effect of such acceptance is so clear that, whatever the particular circumstances of the case, it is probably not open to the landlord to submit that he has not waived the relevant breach’ (Slade LJ at 360). His Lordship continued (at 361): If it is necessary to distinguish the sending of these documents from a demand for rent, a distinction is readily to be found in the speech of Lord Blackburn in Scarf v Jardine (1882) 7 App Cas 345 at 361, [1881– 5] All ER Rep 651 at 658, where he defined an unequivocal act as meaning ‘an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way’. A landlord’s demand for current rent is justifiable only on the basis that the tenancy is still subsisting. The request that the defendants should execute the deed of variation would have been justifiable simply on the ground that, under the agreed compromise, the parties had contracted to execute a deed of this nature. The knowledge required for waiver is knowledge of the facts constituting the breach. But there does not have to be knowledge of the legal consequences of those facts, nor need there be any intention to waive: Cornillie v Saha and Bradford & Bingley Building Society (1996) 72 P & CR 147 (CA) per Aldous LJ at 156–7. Where a landlord suspects that a tenant might be in breach of a tenancy agreement but is not sufficiently confident that a judge would disbelieve the tenant’s denial of the allegation, a failure to take any action against the tenant and a continued acceptance of rent does not amount to a waiver of the breach: Chrisdell v Johnson [1987] 2 EGLR 123; Van Haarlam v Kasner [1992] 2 EGLR 59; McDrury v Luporini [2000] ANZ ConvR 568. Acceptance of rent which accrues due after the forfeiture operates as a

waiver of the forfeiture: Arnsby v Woodward (1827) 6 B & C 519; 108 ER 542; Doe d Galehouse v Rees (1838) 4 Bing NC 384; 132 ER 835; Russell v Parkinson (1869) 6 WW & a’B (L) 264; McGowan v Smith (1886) 12 VLR 244. The lessor cannot avoid this result by accepting the rent without prejudice to his or her right to forfeit the lease: Croft v Lumley (1858) 6 HL Cas 672; [1843–60] All ER Rep 162; 10 ER 1459; Davenport v R (1877) 3 App Cas 115; [1874–80] All ER Rep 157; Oak Property Co Ltd v Chapman [1947] 1 KB 886 at 898; 2 All ER 1. Similarly, a demand for rent ‘without prejudice’ will operate as a waiver: Segal Securities Ltd v Thoseby [1963] 1 QB 887; 1 All ER 500; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 at 1054; Expert Clothing v Hillgate [1986] Ch 340 at 359; Segal Securities referred to with approval in Baxton v Kara [1982] 1 NSWLR 604 at 608–9. So will acceptance of rent (prior to forfeiture) as ‘mesne profits’: Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84. [page 613] In Central Estates (Belgravia) Ltd v Woolgar (No 2) the tenant committed a breach of covenant in the lease which entitled the landlord to forfeit the lease. Accordingly, the landlord’s agents served a notice on the tenant under s 146 of Law of Property Act 1925 (a provision similar to s 146 of the Property Law Act 1958 (Vic)) complaining of the breach of the relevant covenant. After the notice was served, a clerk in the agents’ office, being ignorant of those facts, sent to the tenant a demand for rent which accrued after the cause for forfeiture arose. Such rent was duly paid by the tenant. The agents did not intend to waive the forfeiture and when the tenant paid the rent he knew that the landlord’s intention to forfeit the lease remained unchanged. The Court of Appeal held that, in the circumstances, the agents and the clerk had to be regarded as one and, in demanding and accepting rent with knowledge of the breach of covenant by the tenant giving grounds for forfeiture, the landlord, by his agents, had unequivocally waived its right to forfeiture by acting in a way consistent only with the continued existence of the lease. It was immaterial that the landlord did not intend its action to waive the forfeiture and that the tenant knew at the time of paying the rent that the landlord’s

intention to forfeit the lease remained unchanged (compare Expert Clothing v Hillgate [1986] Ch 340 at 360–2, above). However, waiver will not result from acceptance of rent due at the time of the forfeiture: Price v Worwood (1859) 4 H & N 512; 157 ER 941; London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764, or from acceptance of rent which accrues due partly after the breach and partly after the issue of a writ claiming possession: Civil Service Co-operative Society v McGrigor’s Trustee [1923] 2 Ch 347; [1923] All ER Rep 595. In McDrury v Luporini the tenant farmers failed to spread fertiliser on their leased farm as required by a covenant in the lease. Months later the landlords served a notice in respect of the breach under s 118 of the Property Law Act 1952 (NZ) (a provision similar to s 146 of the Property Law Act 1958 (Vic)) complaining of the breach of the relevant covenant. The tenants failed to comply with the notice and the landlords re-entered. The tenants contended that the landlords had waived their right to forfeit the lease because they had accepted rent from the date of the breach of covenant and during the running of the statutory notice. The Court of Appeal of New Zealand rejected the contention, holding that acceptance of rent in the period prior to the issue of the statutory notice could not amount to an election not to forfeit because no unconditional right to forfeit had arisen until the expiry of the notice. The receipt of rent payable in advance will not deprive the landlord of his or her right to forfeit for a breach committed after the receipt of such rent and during the period covered by the rent: Toogood v Mills (1896) 23 VLR 106. Where rent is payable in advance, acceptance of or demand for rent can operate as a waiver only of past and continuing breaches of covenant known to the landlord at the time of the acceptance or demand, and for such period as the landlord knows that they would continue: Segal [page 614] Securities Ltd v Thoseby [1963] 1 QB 887; 1 All ER 500. Receipt after a forfeiture of rent due previously to the forfeiture, but payable in advance for a period which terminates after the forfeiture, will not operate as a waiver: Balls-

Headley v Ambler (1880) 6 VLR (L) 360. Receipt of an amount due both before and after the accrual of a forfeiture does not amount to a waiver: BallsHeadley v Ambler per Higinbotham J. Payment of rent into the lessor’s bank account, if usual, may operate as a waiver, even though the lessor has given the bank instructions not to accept it (Pierson v Harvey (1885) 1 TLR 430); with this decision, contrast Hill v Short (1910) SALR 141; Richardson v Somas [1967] WAR 109; Moore v Callus [1971] QWN 26. Acceptance of rent paid by a person other than the lessee may amount to waiver: Doe d Griffith v Pritchard (1833) 5 B & Ad 765; 110 ER 973; Pellatt v Boosey (1862) 31 LJCP 281. Suing for (Penton v Barnett [1898] 1 QB 276), or making an unqualified demand for (Doe d Nash v Birch (1836) 1 M & W 402; 150 ER 490; Cheyne v Moses [1919] St R Qd 74; Segal Securities Ltd v Thoseby [1963] 1 QB 887; 1 All ER 500), rent accruing due after a forfeiture also operates as a waiver. The effect of a demand for rent, especially a demand made as a matter of routine by the landlord’s agent, and the effect of the acceptance of rent, were considered in Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 557; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048; David Blackstone v Burnetts [1973] 1 WLR 1487; Expert Clothing v Hillgate House. It is a question of fact whether money is tendered and accepted as rent; but, once it is decided as a fact that money was tendered and accepted as rent, the question of its consequences as a waiver is a question of law: Windmill Investments (London) Ltd v Milano Restaurant Ltd [1962] 2 QB 373; 2 All ER 680. The question whether a landlord may determine a lease for failure to make a punctual payment of rent after refusing a tender of rent was considered in Lo Giudice v Biviano (No 2) [1962] VR 420, where Adam J said (at 423): Where rent is accepted, without qualification, by a landlord, he cannot thereafter proceed on the footing that such rent is in arrears. By his acceptance of it he waives the default as a ground of forfeiture. He cannot both have his cake and eat it. On the other hand, where a ground of forfeiture is accrued, it is for the landlord to elect whether to take advantage of it or not. By his refusal of a tender of rent in arrears he certainly does not elect to waive his right of forfeiture, and I see no reason why he should not avail himself of it. Whatever the relevance of the tender to such matters as relief against forfeiture, or

costs, I am unable to accept the proposition that it deprives the landlord of his right to terminate the lease for non-payment of rent. This decision was distinguished in Ex parte Goodwin; Re Read [1971] 1 NSWLR 461, where it was held that rent does not remain unpaid after it has been validly tendered and the tender has been refused. In Richards v De Freitas (1974) 29 P & CR 1 it was held that where premises are leased to A who operates a business thereon through a company, the landlord can insist that the rent be paid by A and can properly refuse tender of rent from the company unless it expressly tenders the rent on behalf [page 615] of A. The question of in what circumstances can a landlord properly refuse a tender of rent was also discussed in that case. In Alliswell Pty Ltd v Macdav Pty Ltd (2002) V ConvR ¶54-660 Byrne J provided a succinct summary of the law of waiver as it applies to the acceptance of rent: Where a Lessor accepts rent after the date of a breach of the lease by the Lessee, the question whether this amounts to a waiver of the right of re-entry for that breach will depend upon whether the rent fell due before or after the breach. If the rent fell due after the breach, its acceptance is taken at common law to be a waiver because it is an unequivocal assertion that the lease is on foot. If it were not on foot the rent would not have fallen due and the Lessor would have had no entitlement to demand or accept it [Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 557, per Windeyer J; Lidsdale Nominees Pty Ltd v Elkharadly [1979] VR 84 at 89, per Lush J]. Where, on the other hand, the rent fell due before the right of re-entry arose, then its acceptance without more cannot amount to a waiver because the rent was and remained due and payable as a debt to the Lessor [Balls-Headley v Ambler (1880) 6 VLR 360 at 365, per Stawell CJ, Barry and Higinbotham JJ concurring]. Whether the acceptance of such rent amounts to an election not to determine the lease will depend upon all

the circumstances relied upon as giving rise to such an inference [Croft v Lumley (1858) 6 HLC 672 at 705; 10 ER 1459 at 1472, per Bramwell B]. It would seem that a statement or act by the landlord which is neither communicated to the tenant nor capable of having any impact on the tenant cannot be taken to be an election to waive a forfeiture: London and County (A & D) Ltd v Wilfred Sportsman Ltd [1971] Ch 764. A forfeiture is waived if the landlord takes proceedings which imply the continuance of the tenancy (Evans v Davis (1878) 10 Ch 747), or gives notice to quit (Doe v Miller (1826) 1 M & W 402), or describes the lessee as his or her tenant (Green’s case (1582) Cro Eliz 3; 78 ER 269), or executes the lease with knowledge of prior breaches: Carson v Wood (1884) 10 VLR (L) 223. But once the landlord has by some unequivocal act, such as serving a writ in ejectment, shown his or her determination to put an end to the lease, no subsequent act will operate as a waiver (Jones v Carter (1846) 15 M & W 718; 153 ER 1040; Grimwood v Moss (1872) LR 7 CP 360; Thorburn v Buchanan (1871) 2 VR (L) 169; Wintergarden Theatre Ltd v Baxter & Webb [1929] QWN 6; Hinton v Fawcett [1957] SASR 213), although receipt of rent may be evidence of a new tenancy: Evans v Wyatt (1880) 43 LT 176. It would seem that even a discontinuance of an action where the lessor has issued against and served upon the lessee a writ for possession does not amount to a waiver or revocation of his or her determination of the lease; Jones v Carter (1846) 15 M & W 718; 153 ER 1040; NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92 at 98. In GS Fashions Ltd v B & Q plc [1995] 1 WLR 1088 the plaintiff was not permitted to resile from an unequivocal election to forfeit the lease by serving a writ pleading a breach of covenant by setting up the invalidity of that act of forfeiture; particularly as the lessee had pleaded his admission of the breach and of the plaintiff lessor’s entitlement to forfeit. The lessor cannot prevent an implied [page 616] waiver from taking effect by inserting in the lease a provision that no waiver by the lessor shall take effect unless it is in writing: R v Paulson [1921] 1 AC

271; [1918–23] All ER Rep Ext 809; Briggs v Pinchbeck [1937] SASR 30. Promissory estoppel as disabling a lessor from relying upon breaches of covenant as working a forfeiture was considered by Adam J in Re Automotive & General Industries Ltd’s Lease (SC(Vic), 1 May 1970, unreported). Waiver of the forfeiture is not waiver of the breach, and the lessor may recover damages for the breach of covenant: Wilson v Stewart (1889) 15 VLR 781. In the case of a continuing breach, such as breach of covenant to repair, receipt of rent is only a waiver of the forfeiture incurred down to the date when the rent became due: Penton v Barnett [1898] 1 QB 276. Where there is a continuing breach, the waiver of past breaches does not deprive the landlord of the benefit of the covenant itself: Re Automotive & General Industries Ltd’s Lease. But in certain circumstances waiver of a breach of covenant — for example, not to sublet — will necessarily involve waiver of a continuing breach of another covenant; for example, to use premises as a single dwelling house only: Downie v Turner [1951] 2 KB 112; 1 All ER 416. The distinction between a covenant to do a definite act capable only of a breach once and for all and a continuing covenant has consequences not only in relation to waiver, but also in the measure of damage, in the effect of lapse of time under statutes of limitation, and, where the covenant runs with the land, in the liability of an assignee to sue or be sued for further breaches: Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 238 (per Dixon J). In the case just cited Dixon J said (at 236): If a covenantor undertakes that he will do a definite act and omits to do it within the time allowed for the purpose, he has broken his covenant finally and his continued failure to do the act is nothing but a failure to remedy his past breach and not the commission of any further breach of his covenant. His duty is not considered as persisting and, so to speak, being forever renewed until he actually does that which he promised. On the other hand, if his covenant is to maintain a state or condition of affairs, as, for instance, maintaining a building in repair, keeping the insurance of a life on foot, or affording a particular kind of lateral or vertical support to a tenement, then a further breach arises in every successive moment of time during which the state or condition is not as promised, during which, to pursue the examples, the building is out of repair, the life uninsured, or the particular

support unprovided. The distinction may be difficult of application in a given case, but it must be regarded as one depending upon the meaning of the covenant.

Relief against forfeiture [17.19] Courts of equity usually granted relief against forfeiture for nonpayment of rent, the proviso for re-entry being regarded as a mere security for the payment of rent and not to be enforced after that end had been attained: Howard v Fanshawe [1895] 2 Ch 581 at 588; [1895–9] All ER Rep 855; Gill v Lewis [1956] 2 QB 1 at 16; Pioneer [page 617] Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 (SC, NSW). It has been said that, as a general rule, equity would not relieve against forfeiture for breach of covenants other than covenants to pay rent, unless there was fraud, accident or mistake: Barrow v Isaacs [1891] 1 QB 417 at 425; Upjohn v Macfarlane [1922] 2 Ch 256. This view is too narrow: Shiloh Spinners Ltd v Harding [1973] AC 691. The jurisdiction to give relief in the case of covenants other than covenants to pay rent is thus essentially statutory. Relief in cases of non-payment of rent is given by the equitable jurisdiction, as recognised and restricted by statute. Relief against forfeiture is examined in Chapter 19.

Registered leases [17.20] In the case of land under the operation of the Transfer of Land Act 1958 (Vic), if the lease is not in the general law form, but is made by instrument under the Act, there will be implied in the lease a proviso for reentry which dispenses with the common law demand for rent. See Conveyancing Act 1919 (NSW) s 85; Transfer of Land Act (Vic) s 67. Section 146 of the Property Law Act 1958 (Vic) (Conveyancing Act 1919 (NSW) s

129; Property Law Act 1974 (Qld) s 124; Landlord and Tenant Act 1936 (SA) s 10; Conveyancing and Law of Property Act 1884 (Tas) s 15; Property Law Act 1969 (WA) s 81), imposing a restriction on the forfeiture of leases and providing for relief against the forfeiture, applies to leases and subleases under the Transfer of Land Act (Property Law Act 1958 (Vic) s 136: see Conveyancing Act 1919 (NSW) s 6). Relief against forfeiture for nonpayment of rent may be granted notwithstanding that the Registrar has entered a memorandum in the register book pursuant to provisions such as s 55 of the Real Property Act 1900 (NSW) or s 70 of the Transfer of Land Act 1958 (Vic): Brooker’s Colours Ltd v Sproules (1910) 10 SR (NSW) 839. In Laffer v Gillen [1927] AC 886 at 897 the Judicial Committee said of a provision in the South Australian Act similar to s 70 that, once the entry in the register book had been made, the validity of the forfeiture or determination could not be questioned. The registration of a transfer which is a breach of covenant will not destroy the lessor’s right to forfeit the lease: Re Duggan (1883) 2 NZLR 144.

Disclaimer [17.21] A lease may be forfeited in consequences of disclaimer. In the ordinary understanding of language, to disclaim an estate or interest is to renounce or to disavow any claim or title to the estate or interest. Where the estate or interest in land is one which has come into existence by virtue of a lease, the disclaimer involves a direct repudiation of the relation of landlord and tenant. In effect, the one who disclaims says, ‘I am no longer your tenant’: Doe d Gray v Stanion (1836) 150 ER 614 at 616–7; [1835–42] All ER Rep 290; Scanlon v Campbell (1911) 11 SR (NSW) 239 at [page 618] 243–4; Re Teller Home Furnishers Pty Ltd [1967] VR 313 at 317; W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297. But a lessee does not necessarily disclaim a lease which contains a covenant not to use the demised

premises for any purpose other than the one stated in the lease if he or she merely ceases to pursue positively the activity contemplated by such ‘purpose’: Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268. Disclaimer in the exercise of a statutory power is also discussed in [16.25]. It is often said that, where the tenant disclaims the tenancy, the tenancy is determined by disclaimer. See, for example, Doe d Phillips v Rollings (1847) 136 ER 476 at 481; Scanlon v Campbell (1911) 11 SR (NSW) 239 at 249 per Ferguson AJ. It is thought, however, that this is not strictly an accurate statement of the effect of a disclaimer. It is true that in the special case of disclaimer in the exercise of a statutory power the act of the person disclaiming determines the tenancy: see [16.25]. But except in the special case of disclaimer in the exercise of a statutory power, the act of the tenant does not, it would seem, of its own force determine the tenancy; instead, the landlord is given an option to treat the tenancy as determined. In other words, disclaimer is a cause of forfeiture and will result in the determination of the tenancy only if the landlord elects to avail him or herself of the cause of forfeiture. The question arises whether disclaimer (leaving aside the special case of disclaimer of onerous property in the exercise of a statutory power) is to be regarded as a distinct mode of determination of a tenancy or merely as an example of determination by forfeiture. This question is probably only of academic interest. Where the tenancy is for a term certain, disclaimer may be regarded as a cause of forfeiture. In the case of periodic tenancies, disclaimer is often described as giving rise to forfeiture. See, for example, Doe d Jefferies v Whittick [1820] Gow 195; 171 ER 883; Wisbech St Mary Parish Council v Lilley [1956] 1 WLR 121 at 125–7. On the other hand, it has been suggested that it is not correct to refer to a periodic tenancy as being ‘forfeited’ by a disclaimer and that one should instead say that the assertion by the tenant that there is no tenancy makes it unnecessary to prove that notice to quit was given. ‘A notice to quit is only requisite where a tenancy is admitted on both sides, and if a defendant denies the tenancy there can be no necessity for a notice to end that which he says has no existence’: Doe d Calvert v Frowd (1828) 130 ER 883 at 884. ‘It is sometimes said that a tenancy from year to year is forfeited by disclaimer; but it would be more correct to say that a disclaimer furnishes evidence in answer to the disclaiming party’s assertion that he has had no

notice to quit; in as much as it would be idle to prove such a notice where the tenant has asserted that there is no longer any tenancy’: Doe d Graves & Downe v Wells (1839) 113 ER 162 at 166; [1835–42] All ER Rep 204. It is thought that the correct view is that, both in the case of a lease for a fixed period and in the case of a periodic tenancy, the act of disclaimer does not automatically determine the term or interest of the tenant; the landlord is given an option to bring [page 619] it to an end if he or she pleases. Accordingly, it is suggested that, except in the special case of disclaimer of onerous property in the exercise of a statutory power, disclaimer is merely an example of determination by forfeiture. That a disclaimer, like any other cause of forfeiture, will be effective to determine the lease only if the landlord elects to treat it as determining the lease is shown by the decisions dealing with the effect of the delivery of a defence which puts in issue the title of the plaintiff. These decisions are: Kisch v Hawes Bros Ltd [1935] Ch 102; [1934] All ER Rep 730; Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225; Sydney Real Estate & Investment Co Pty Ltd v Rich (1957) 74 WN (NSW) 427; Warner v Sampson [1959] 1 QB 297; [1958] 1 All ER 44. Similarly, a disclaimer, like any other cause of forfeiture, may be waived, and if it is waived the landlord will be unable to rely upon it as determining the tenancy: Doe d David v Williams (1835) 7 C & P 322; 173 ER 143. Further, as with forfeitures for other causes, once the disclaimer has, so to speak, been accepted by the landlord so as to bring the lease to an end ‘waiver’ is impossible: Douglas & Co (Insurance) Pty Ltd v Economic Insurance Co Ltd (1951) 68 WN (NSW) 225 at 227. So long as it is appreciated that, not only in the case of a lease for a fixed term, but also in the case of a periodic tenancy, the act of disclaimer will not determine the tenancy unless the landlord chooses to ‘accept’ it, it is unnecessary to pursue the question whether the expression ‘forfeiture’ is strictly appropriate in the case where a tenant having a periodic tenancy disclaims the tenancy and the landlord elects to rely upon the disclaimer. As to the effect of an oral disclaimer, see Doe d Graves & Downe v Wells (1839) 10 Ad & E 427; 113 ER

162; [1835–42] All ER Rep 204; Wisbech St Mary Parish Council v Lilley [1956] 1 WLR 121. In W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 it was said that the doctrine of disclaimer (other than on some statutory basis) was analogous to the doctrine of repudiation, and that the landlord may choose to accept the disclaimer or not. T R A Morrison QC (as a Deputy Judge of the High Court) said (at 302–3): Counsel for Dupre sought to persuade me that the doctrine of disclaimer by denial of title by record was an unfortunate hangover from medieval feudal relationships and that either the doctrine did not now still exist or had never existed. In the light of the ratio of Warner v Sampson [[1959] 1 All ER 120] such a contention is unarguable. In any event, it seems to me that there is no reason in principle why the doctrine should not exist. A tenant who repudiates the relationship of landlord and tenant should be in no different position from a party to a contract who repudiates or renounces it. It seems to me that the doctrine of disclaimer is analogous to the concept of repudiation of a contract. Counsel for the landlord in Warner v Sampson used the phrase ‘repudiation, renunciation, denial’. Hill and Redman’s Law of Landlord and Tenant, 18th ed, 1991, vol 1, para 2181 says: There is implied in every lease a condition that the lessee shall not do anything that may prejudice the title of the lessor; and that if this is done the lessor may re-enter for breach of this implied condition. The principle may be traced back to the reign of Henry II and appears to be founded on the oath of fealty given by a tenant of real property to his lord under the medieval system of tenure. [page 620] The repudiation of the relationship by a tenant may be ignored by the landlord, who may continue to enforce the terms of the demise; or the landlord may accept the repudiation by re-entry or by issuing and serving proceedings claiming possession. This common law position is

to be contrasted with statutory rights to disclaim, such as a trustee in bankruptcy or a liquidator of a company have. When that statutory right is exercised, the tenant’s interests in the property are extinguished. No question of acceptance arises. The act of disclaimer itself, by virtue of the relevant statute, determines the tenant’s interests and liabilities. In my judgement, a disclaimer does not constitute a repudiation of the landlord and tenant relationships unless it is clear and unambiguous (see Doe d Gray v Stanion (1836) 1 M & W 695, [1835–42] All ER Rep 290). Where the disclaimer is by words, as here, then whether there has been a repudiation of the relationships is to be determined by looking at the words used in the context in which they were used. The court must decide whether those words in that context evinced an intention on the part of the tenant no longer to be bound by the relationship of landlord and tenant. As a matter of binding precedent, Warner v Sampson [1959] 1 All ER 120; [1959] 1 QB 297 decides that where a pleading is relied upon as a disclaimer a tenant must be asserting that the property belongs either to himself or to a third party. In effect, the tenant must be saying to the alleged landlord ‘You are not my landlord; I am not in the relationships of landlord and tenant with you’. Simply putting the landlord to proof is not sufficient. As to disclaimer on the basis of statutory provisions contained in the Bankruptcy Act 1966 (Cth) and the Corporations Act 2001 (Cth), see [16.25].

Forfeiture and general principles of contract law [17.22] The question arises whether it is possible to regard the law relating to the forfeiture of leases as merely an example of the application of the general principles of the law of contract dealing with the determination of agreements. An attempt to systematise the rules relating to forfeiture in this way is a bold one, for some medieval rules may still persist and defy the attempt to analyse the law relating to forfeiture by reference to the principles of the law of contract. The fact that forfeiture defeats an estate in addition to determining an agreement must also be borne in mind. It is nonetheless

arguable that the law relating to forfeiture of leases represents the application of more general principles drawn from the law of contract. It has been said in [17.3] that a lease may be forfeited on three grounds: 1. breach of condition; 2. breach of covenant, where the lease contains a proviso for re-entry; or 3. disclaimer. It might be said that ‘condition’ is here used in the sense in which it is used in the law of contract by way of contradistinction from a warranty. On this view, a condition is a term going to the root of the contract constituted by the lease, the breach of which entitles the landlord to determine that contract, and a covenant is a [page 621] mere warranty, the breach of which sounds only in damages, unless the parties have by express stipulation (ordinarily in the form of a proviso for re-entry) agreed that the landlord may determine the lease for breach of the covenant, just as the parties to any contract may agree that a breach of any term, however trifling the breach or unimportant the term, will enable the party not in default to put an end to the contract: see [16.35]. On this analysis, disclaimer would be regarded as an example of repudiation of the lease; for in the case of disclaimer the tenant renounces his or her character of tenant: Warner v Sampson [1959] 1 QB 295 at 318 and 324; [1958] 1 All ER 44. Some support for this general approach is to be found in the observations of Owen J in Campbell v Payne (1953) 53 SR (NSW) 537 at 539: At common law one method by which a lease might come to an end was by forfeiture. A right of forfeiture might arise if the tenant committed such a breach of covenant as to show that he was repudiating the contract, or it might arise, in the case of any breach of covenant however trifling, if the parties had agreed that a breach of that covenant should create a forfeiture. This was, of course, only an application of the general law of contract; and, where a breach giving rise to a right of forfeiture occurred, the lease became voidable, and, if

the lessor elected to avoid it, it thereupon terminated … but an unequivocal act indicating the lessor’s intention to exercise his option to treat the lease as at an end was necessary. This approach would regard disclaimer as merely an example of repudiation: see [16.26]. The adoption of this general view would result in the rejection of the suggestion that the landlord may take advantage of a forfeiture only by actual re-entry or its equivalent, the commencement of an action for the recovery of the land. The answer to the question of what steps were necessary to take advantage of a forfeiture would be answered in part by reference to the general law of contract and in part by reference to the terms of the particular lease under consideration. In Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 30, Mason J said that ‘re-entry is essential only where the parties stipulate that advantage shall not be taken of a forfeiture except by an entry upon the land’: see [16.26] and [17.7]. In a case of disclaimer, the landlord would be able to ‘accept’ the repudiation, and so determine the lease, by an unequivocal act evincing the intention to determine the lease, the position being no different from that which obtains in the case of any repudiation of a contract. Similarly, in the case of a breach of a condition, all that would be necessary would be some unequivocal act showing the landlord’s intention to determine the lease, unless the lease provided for the exercise of the landlord’s right in some particular way, in which case it would be necessary to adopt the method prescribed. In the case of a mere breach of warranty — that is to say, breach of a stipulation which was not a condition — the right to determine the lease would exist only if and to the extent that the lease so provided, and in this case it would be necessary to adopt any mode of determination prescribed by the lease. Ordinarily, the lease would contain a proviso for re-entry, in which case re-entry would generally be necessary; but note the view of Mason J expressed in the Progressive Mailing House case which is referred to above. [page 622] If the lease provided merely that in the event of a breach of covenant the landlord might ‘determine’ or ‘put an end to’ the lease, presumably it would

be sufficient if the landlord did some unequivocal act which would be sufficient in the case of repudiation or breach of a condition. On this view, the principal importance of the technical rules of landlord and tenant law lies in their defining ‘re-entry’ where this is the mode of determination expressly required by the lease. Language is sometimes used in the books suggesting that the only method whereby a lease can be forfeited is that of entry or its equivalent, the commencement of an action. According to Woodfall on Landlord and Tenant (looseleaf), vol 1, para 17.058: A lease may usually be determined by forfeiture for: (1) breach of a condition in the lease; or (2) for a breach of any covenant, if the lease contains a condition or proviso for re-entry or forfeiture for a breach of such covenant. This passage does not state in terms that actual or notional entry is the only means of forfeiting a lease. Foa on Landlord and Tenant, 8th ed, p 321 states that advantage may be taken of a breach of condition ‘to make an entry or avoid the estate’. This suggests that the lease may be determined by some means other than re-entry. In the passage cited already from Campbell v Payne, Owen J speaks of ‘an unequivocal act indicating the lessor’s intention to exercise his option to treat the lease as at an end’. So far as disclaimer is concerned, in Warner v Sampson [1958] 1 All ER 44; [1959] 1 QB 297 at 316, Lord Denning said: ‘In this case again there was no re-entry or its equivalent’. This might be taken as implying a view that actual or notional re-entry was essential, but it might also be explained as a reference to the absence of re-entry or some other act exercising the option to forfeit. In the same case Hodson LJ at 320 said that counsel recognised ‘that to make his election the landlord must either re-enter or issue a writ of possession, or take some equivalent step in order to make his election …’. Ormerod LJ (at 326) referred to the fact that ‘nothing had been done by the landlord to claim possession of the premises’. If forfeiture is but an example of the determination of an agreement in accordance with the principles of the law of contract, re-entry is not to be regarded as some ancient rite deriving its significance from the medieval mysteries of landlord and tenant law; it is merely one kind of unequivocal act exercising the landlord’s option to determine the lease, and is essential (to the

exclusion of other modes of exercising the option) only if the lease so provides. It is possible to make this assertion and yet to recognise that the law has defined ‘re-entry’ in a way which requires something more than any unequivocal act showing the landlord’s intention to determine the tenancy: see [17.10]. If (but only if) the parties choose to stipulate for re-entry, the landlord will be obliged to ‘re-enter’ in the sense in which that term has come to be understood.

[page 623]

18 Condition of Forfeiture Forfeiture [18.1] Forfeiture is a method of determining certain tenancies. The circumstances in which a lease may be forfeited are discussed in Chapter 17. In this chapter it is proposed to analyse the statutory requirement imposed by s 146(1) of the Property Law Act 1958 (Vic) and corresponding provisions in the other states (Conveyancing Act 1919 (NSW) s 129(1), and see 133a(2); Property Law Act 1974 (Qld) s 124(1); Landlord and Tenant Act 1936 (SA) s 10; Conveyancing and Law of Property Act 1884 (Tas) s 15(1); Property Law Act 1969 (WA) s 81(1), referred to in this chapter by reference to states or, generally, as a reference to s 146) that a particular notice be served upon the lessee before the lessor can enforce the right to forfeit the lease. For the purposes of the operation of these provisions the term ‘forfeiture’ has been given a wide meaning, so that, for example, a forfeiture in the guise of a surrender remains a forfeiture for the purposes of s 146 (Law of Property Act 1925, the corresponding English provision): Plymouth Corporation v Harvey [1971] 1 WLR 549. Similarly, the section cannot be evaded by providing that in the event of a breach of covenant the landlord may determine the lease either by re-entry or by three months’ notice; whichever course the landlord adopts, there will be a forfeiture so that in the usual course of events the landlord must serve upon the tenant a notice under s 146: Richard Clarke & Co Ltd v Widnall [1976] 1 WLR 845. See also Holden v Blaiklock [1974] 2 NSWLR 262; (1975) 49 ALJ 289.

Notice to remedy [18.2] By s 146(1) of the Property Law Act 1958 (Vic), it is provided that a right of re-entry or forfeiture under any proviso or stipulation in a lease or otherwise arising [page 624] by operation of law for a breach of any covenant or condition in the lease, including a breach amounting to repudiation, shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice: (a) specifying the particular breach complained of; and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and (c) in any case, requiring the lessee to make compensation in money for the breach, and the lessee fails to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money to the satisfaction of the lessor for the breach, within a reasonable time thereafter, or the time — not being less than 14 days — fixed by the lease: see NSW s 129(1); Qld s 124(1); SA s 10; Tas s 15(1); WA s 81(1); UK s 146(1); only the Victorian provision contemplates a period fixed by the lease to remedy the breach, or a minimum period; the Victorian provision is also the only provision that refers to a breach amounting to repudiation. This provision has effect notwithstanding any stipulation to the contrary: NSW s 129(10); Vic s 146(13); Qld s 124(9); SA s 12(6); Tas s 15(8); WA s 81(10). In Ex parte Taylor [1980] Qd R 253 at 256, Campbell J noted the origin of the Queensland provision and its objectives, which are common to provisions in other states (at 256): The section was based on s 14 of the Conveyancing Act 1881 concerning which Lord Russell CJ said in Horsey Estate Limited v Steiger [1899] 2 QB 79, at p 91: The object seems to be to require in the defined case (1) that a

notice shall precede any proceeding to enforce a forfeiture, (2) that the notice shall be such as to give the tenant precise information of what is alleged against him and what is demanded from him, and (3) that a reasonable time shall after notice be allowed the tenant to act before an action is brought. The reason is clear he ought to have the opportunity of considering whether he can admit the breach alleged; whether it is capable of remedy; whether he ought to offer any, and, if so, what compen-sation, and, finally, if the case is one for relief, whether he ought or ought not promptly to apply for such relief. In short, the notice is intended to give to the person whose interest it is sought to forfeit the opportunity of considering his position before an action is brought against him. But as Wallace J pointed out in Johnson v Senes (1961) 78 WN (NSW) 861, at p 863, the Act of 1881 did not prescribe a form of notice. The history and purpose of these statutory requirements was also referred to and considered by Judd J in Primary RE Ltd v Great Southern Property Holdings Ltd [2011] VSC 242, where his Honour, referred with approval, particularly, to a then recent decision of the New South Wales Court of Appeal in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28,563; [2010] NSWCA 268; discussed further as to the purpose and application of these provisions at [18.6]. Section 146 of the Property Law Act 1958 (Vic) was amended to refer to a breach amounting to a repudiation following the Victorian Court of Appeal’s decision in [page 625] Apriaden Pty Ltd v Seacreast Pty Ltd (2005) 12 VR 319 in which it was held that service of a notice was not necessary where the tenant had repudiated the lease: see also the following cases where it was held that a notice was not

necessary where a breach amounted to a repudiation: Batiste v Lenin (2002) 11 BPR 20,403; Marshall v Council of The Shire of Snowy River (1994) 7 BPR 14,447; Kiama Development Co Pty Ltd v Wilcox [1999] NSWSC 277; India Pty Ltd v Florlim Pty Ltd [2003] SASC 161; World Best Holdings Ltd v Sarker (2010) 14 BPR 27,549 at [42]–[44] (Handley AJA; with whom Tobias and Campbell JJA agreed); and Tim Barr Pty Ltd v Narui Gold Pty Ltd (2010) 15 BPR 28,857 at [31] (Barrett J). Moreover, in World Best Holdings the further point was made that although a landlord can accept a tenant’s repudiation of a lease without serving a notice under s 129 of the Conveyancing Act, breaches of contract falling short of repudiation require compliance with the provisions of that section; a position which was reaffirmed by the Court of Appeal in DeeTech Pty Ltd v Neddam Holdings Pty Ltd (2010) 15 BPR 29,021 at 29,030 [56] (Sackville AJA, with whom Campbell and Young JJA agreed). The position was further considered by the New South Wales Court of Appeal in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28,563 where Hodgson JA (with whom Allsop P and Macfarlan JA agreed) said (at 28,572): [295] It was submitted by Mr Burton that the conduct of Macquarie constituted fundamental breaches of the leases and the Construction Deed, and that it also constituted the repudiation of them; and that Area Health did not have to rely on contractual rights to terminate the leases on that basis, but could do so in reliance on its general law rights: Marshall v Council of the Shire of Snowy River (1994) 7 BPR 14,447 at 14,457. Even on the narrower view taken in World Best Holdings Limited v Sarker [2010] NSWCA 24 at [42]–[44], Area Health was entitled to terminate the leases by accepting Macquarie’s repudiation of them, without having to comply with s 129(1). [296] The decision in World Best proceeds on the assumption that there is a distinction between fundamental breaches of contract (which entitle the other party to terminate), and repudiation of a contract (which entitles the other party to terminate by acceptance of the repudiation): see [Koompahtoo Local Aboriginal Community v] Sanpine [(2007) 233 CLR 115] at [44], [47]–[49]. In general repudiation is constituted by communications or conduct manifesting unwillingness or inability to render substantial performance of the contract; and

while some fundamental breaches would do this and thus amount to repudiation, this is not so in all cases. For example, it is open to parties to agree that a particular obligation under a contract is essential, in which case a breach of that obligation will be treated as a fundamental breach entitling the other side to terminate (Sharjade [v Commonwealth (2010) 15 BPR 28,443] at [46]); but breach of such an obligation will not necessarily manifest unwillingness or inability to render substantial performance of the contract. In my opinion, as accepted in World Best, where a landlord terminates for breach of an obligation agreed by the parties to be essential, but where the breach does not amount to repudiation in the sense I have explained, a re-taking of possession would be the exercise of a “right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition or agreement (express or implied) in the lease” within s 129(1). [page 626] See also, CMA Recycling Victoria Pty Ltd v Doubt Free Investments Pty Ltd [2011] TASSC 71 (FC) and [2012] TASFC 7. Section 124(8) of the Queensland legislation requires the notice to be in Form 10 of the Second Schedule to the Act; and in the equivalent New South Wales legislation, s 129(9) requires that it be ‘in the form set out in the Sixth Schedule or to a similar effect’. Special provision is made in Queensland and Victoria for relief against a notice to effect internal decorative repairs, to a house or building, in the circumstances specified; the provisions apply to subleases: Qld s 127; Vic s 147. Provision is also made in New South Wales for relief against forfeiture for breach of a covenant not to make alterations to the premises without consent where the term is 10 years or more and that the alterations have not or will not cause substantial injury to the lessor: NSW s 129(2A). A notice of this kind should be executed by the lessor in order to avoid the possibility of invalidity as a result of execution by another person, such as the lessor’s solicitor, where the authority of that other person is found to be

deficient or where it is unclear that execution purports to be as agent of the lessor: see Enviro Remote Sensing Australia Pty Ltd v Bankstown Airport Ltd (2008) 14 BPR 26,191; [2008] NSWSC 1001. In that case, Windeyer J said (at [33]): In my view the ordinary authority of a solicitor would not extend to signing a notice on behalf of a lessor client nor would the solicitor, without other authorisation, be the agent of the client, in this case lessor, for that purpose. As I have pointed out the lessor is not mentioned by name in the notice and the solicitor is not claiming to sign as agent for the lessor. See also [31]–[42]. This position, and difficulty, flows from the relevant statutory requirements, in this instance NSW s 129; cf the position with respect to notices to quit: see [20.9].

Notice not required [18.3] Section 146(1) operates only in relation to leases so that it does not apply, for example, to a tenancy at will arising under a contract of sale, for the contract is not a lease: Tropical Traders Ltd v Goonan (1964) 111 CLR 41; [1964] ALR 585 at 591. In some states the provision does not extend to a breach of covenant endangering a liquor licence: see NSW s 129(3); Tas s 15(6); Vic s 146(1); WA s 81(8)(c), or to covenants for inspection of mining leases: NSW s 129(6)(d); Qld s 124(6)(d); Vic s 146(8). In all states except Queensland it does not affect the law relating to re-entry or forfeiture in the case of non-payment of rent: NSW s 129(8); SA s 12(5); Tas s 15(7); Vic s 146(12); WA s 81(9); s 146(11) of the English Law of Property Act 1925; though the provisions of the lease may impose a prior notice requirement, see Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2008] VSC 40; and see Escalus Properties Ltd [page 627] v Robinson [1996] QB 231 (CA) where arrears of service charge had accrued

which were not deemed under the lease to be additional rent. See [11.1] as to the meaning of ‘rent’. But where re-entry is based solely on the ground of non-payment of rent in the absence of special circumstances it is not open to the lessor when seeking to oppose the exercise of the court’s discretion to grant relief against forfeiture to pray in aid of the lessor’s position breaches of covenant not the subject of a notice under s 129 of the Conveyancing Act 1919 (NSW) (or equivalents): see Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 (SC, NSW, Hope J); Cicinave Pty Ltd v Jasco Pty Ltd (1989) 5 BPR 97,329 (SC, NSW, Powell J); Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97,311; and see [18.6]. Some states have specific provisions for forfeiture on bankruptcy or on taking in execution of the lessee’s interest: see Vic s 146(9), (10); also NSW s 129(6); Qld s 124(6); Tas s 15(6). For a consideration of the exclusion contained in s 146(9)(e) (UK, which corresponds to the Victorian provision), see Bathurst (Earl) v Fine [1974] 1 WLR 905. A mortgagee seeking to recover possession of the mortgaged land does not have to comply with s 146(1) where the ‘term’ of the mortgage has expired, whether or not there is an attornment clause in the notice: Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547: see [18.5]. A lessor is not required to serve a notice on the assignor of the term of the lease: Chelfield Pty Ltd v Goldsea Pty Ltd; Re WC Pty Ltd [2003] 2 Qd R 243.

Necessity for notice [18.4] A notice under s 146, or one of the corresponding provisions, is a necessary preliminary to the enforcement of a forfeiture, whether by peaceable re-entry or by action: Re Riggs [1901] 2 KB 16; McFadyen v Measures (1910) 10 SR (NSW) 190; Slater v Hoskins [1982] 2 NZLR 541; Ex parte Taylor [1980] Qd R 253. As to the necessity for notice to enforce a forfeiture on the bankruptcy or insolvency of the tenant, see Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347 at 354–5 and Re Hi-Fi Sydney Pty Ltd (Admin Apptd) [2015] NSWSC 1312, which also bear upon the operation of subss (9) and (10) of s 146; see also Pearson v Gee and Braceborough Spa Ltd [1934] AC 272 in relation to the operation of s 146(10). It is not possible to circumvent the operation of the relevant provision by delivering a deed of

surrender of a lease in escrow to an independent solicitor on terms that he or she shall deliver it to the landlord unless satisfied that the tenant has by a certain date fulfilled certain conditions: Plymouth Corporation v Harvey [1971] 1 WLR 549. Similarly, a landlord must serve a notice under the relevant provision before he or she can exercise an option given to him or her to convert a tenancy for a term of years into a tenancy from week to week (or some other recurring tenancy) in the event of the lessee failing to pay rent by the due date or breaching any of the covenants in the lease. The exercise of such an option by the landlord would constitute a forfeiture for [page 628] the purposes of the relevant provision (and for the purposes of the equitable doctrine of relief against forfeiture): Holden v Blaiklock [1974] 2 NSWLR 262; (1975) 49 ALJ 289; and see Kemp v Lumeah Investments Pty Ltd (1983) NSW ConvR ¶55-162. If the proceedings are instituted to recover possession without giving the notice, the proceedings are instantly demurrable (Fox v Jolly [1916] 1 AC 1 at 8; [1914–15] All ER Rep Ext 1316), but it is not necessary for the plaintiff to aver service of a notice: Gates v Jacobs Ltd [1920] 1 Ch 567. In the case of prescribed premises where the lease is for a term which is unexpired, a notice under s 146 must also be given before the lessor can rely upon ground (b) in s 82(6) of the now repealed Landlord and Tenant Act 1958 (Vic) (a prescribed ground for a notice to quit, namely that the lessee has failed to perform or observe some term or condition, other than for the payment of rent; for recovery of prescribed premises under Pt V; provisions repealed as from 1 September 2012 — see LL&T Comparative Table): Ford v Centenary Investments Pty Ltd [1957] VR 288; Griffiths v Reid (1951) 51 SR (NSW) 377; Johnson v Senes [1961] NSWR 566; 78 WN (NSW) 861; compare Finney Isles and Co Ltd v Estate of Pelling [1950] St R Qd 128. See also McKinnon v Portelli (1960) 77 WN (NSW) 49; Glebe Administration Board v Tasker [1964] NSWR 1307; Wollongong City Council v Barker [1964] NSWR 897; 81 WN (Pt 1) (NSW) 105. Moreover, whatever the nature of the tenancy, by the proviso of s 82(6)(b) of the Landlord and Tenant Act 1958 (Vic) (a provision now repealed as from 1 September 2012 — see LL&T

Comparative Table), notice in writing specifying the breach must have been served on the lessee and the lessee must for a period of not less than 14 clear days have failed to remedy the breach; otherwise the prescribed grounds will not exist.

Possession claimed by mortgagee [18.5] In Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547 Menhennitt J was concerned with an action for the recovery of mortgaged land. By the terms of the mortgage the debt was repayable on 20 August 1967. The writ was issued on 4 April 1968. The mortgage contained an attornment clause in the following terms: The mortgagor hereby attorns and becomes tenant to the mortgagee of the said land from quarter to quarter at a rent equal to and varying in amount with the interest from time to time payable by the mortgagor under this mortgage on the days hereinbefore provided for payment of interest. Such tenancy in the event of breach by the mortgagor of any of his obligations under this mortgage to be determinable by the mortgagee without notice. The due payment by the mortgagor of the interest payable hereunder shall however be accepted by the mortgagee in lieu of rent. The mortgagor contended that s 146(1) of the Property Law Act applied. Menhennitt J rejected this argument, saying (at 549–50): In the first place it appears to me that the plaintiff is not seeking to exercise a right of re-entry or forfeiture under any proviso or stipulation in a lease for breach of any covenant or condition in a lease. The decision of Holroyd J in Farrington v Smith (1894) [page 629] 20 VLR 90, establishes, I think, that by reason of what is now s 81 of the Transfer of Land Act, in the case of mortgage under the Transfer

of Land Act, the mortgagee is to be treated as if he had the legal estate in the mortgaged land and, accordingly, the mortgagor, by reason of s 81(1) itself, is in the position of a tenant. The period of that tenancy is, it appears to me, the period of the mortgage, that is the period during which the moneys are on loan, and when that period expires and all the moneys become repayable, it appears to me that the decision in Farrington v Smith leads to the conclusion that the tenancy then terminates. Looking at the position from the point of view of the rights given to the mortgagor by s 81(1) of the Transfer of Land Act, Holroyd J said expressly at 93, in Farrington v Smith: ‘If I am right in this, we have here in the mortgagor a tenant whose term has expired by effluxion of time, using the word term as signifying an interest for a term of years’ and it appears to me that, so far as any rights given by s 81(1) of the Transfer of Land Act to the mortgagor are concerned, the term has expired by the effluxion of time, not by any breach of any covenant or condition in a lease. Likewise, so far as attornment cl 10 in this lease is concerned, it appears to me that what is there provided is that a breach during the currency of the mortgage, that is before the mortgage money shall become payable, makes the attornment terminable. When, however, the term created by the mortgage expires by the effluxion of time, it appears to me that the right of the mortgagee to possession as against the mortgagor in his capacity as tenant flows not from a breach by the mortgagor of any of his obligations under the mortgage, but from the termination of the tenancy. From the words in the attornment clause, ‘such tenancy in the event of breach by the mortgagor of any of his obligations under this mortgage to be determinable by the mortgagee without notice’, it appears to me that the tenancy is terminated not through breach of obligations, but by the effluxion of the period of the mortgage and that, whatever form of tenancy the mortgagor has, the right of the mortgagee to possession flows not from a breach of any covenant or condition in the lease, but from the termination of the tenancy created by cl 10, the attornment clause. A different situation might well arise if interest were paid in advance and a new form of tenancy from quarter to quarter might well arise, but that is not the position here, the

interest being paid at the end of the quarterly periods and not in advance. This position appears to me to be clear. This decision appears to accept tacitly the view that the mortgage was a ‘lease’ within the meaning of ss 136 and 146 of the Property Law Act 1958 (Vic). Only Western Australia has a provision corresponding with the Transfer of Land Act s 81: Transfer of Land Act 1893 s 116. In Tymray Pty Ltd v Mercantile Mutual Life Insurance Co Ltd (1994) 13 ACSR 111 a mortgagee of premises that were leased took possession of the premises and served a notice on the lessee requiring the lessee to pay the rent to the mortgagee. The tenant fell in arrears in payment of the rent. Unbeknown to the mortgagee the tenant appointed an administrator pursuant to s 436A of the Corporations Law. The mortgagee’s application to take possession of the premises failed because the payment of rent by the tenant to the mortgagee constituted an attornment by the tenant to the mortgagee giving rise to the relationship of lessor and lessee and constituting the mortgagee the ‘lessor’ of the premises for the purpose of s 440c of the Corporations Law. Section 440c precluded the owner or lessor of property taking possession of [page 630] property occupied or used by or in possession of a company under administration without the administrator’s consent or with the leave of the court.

Contents of notice [18.6] The notice must specify with reasonable detail the particular breach complained of. As to the form of the notice, see editor’s note at (1935) 9 ALJ 193. The object of the legislation includes not only the placing of restrictions on and the giving of relief against forfeiture and re-entry, but the placing of the lessee in a completely informed position so as to enable him or her to elect

what shall be his or her subsequent conduct: Horsey Estate Ltd v Steiger [1899] 2 QB 79 at 91; [1895–9] All ER Rep 515; Chelfield Pty Ltd v Goldsea Pty Ltd; Re WC Pty Ltd [2003] 2 Qd R 243; see [18.2]. See also Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340. The notice contemplated by the section is a notice: (a) calling on the tenant to remedy a breach complained of; (b) informing him or her at the same time that he or she has a reasonable time within which to do it; and (c) also informing him or her what the legal consequences will be if he or she fails to do it: Harris v Thallon (1926) 26 SR (NSW) 456. In Hill v Short (1910) SALR 141, a notice in general terms complaining of the lessee’s misconduct was held not to satisfy the requirements of the section. The notice must give precise information of what is alleged against the tenant and what is required of him or her; and therefore a notice requiring a tenant to remove a structure, where two had been erected, was held bad: Davenport v Smith [1921] 2 Ch 270. Where a schedule to a notice concluded with the words ‘and note that the completion of the items mentioned in this schedule does not excuse the execution of other repairs if found necessary’, it was held that the notice sufficiently specified the particular breaches complained of and was not vitiated by the addition of the general clause at the end: Fox v Jolly [1916] AC 1. In the case of the covenant to keep the premises in repair, the notice must state the particular condition of the premises which the tenant is required to remedy and not merely that there has been a failure to comply with the covenant: Gerraty v McGavin (1914) 18 CLR 152. In Sylvester v Ostrowska [1959] 1 WLR 1060, the notice alleged breaches of a covenant to repair as specified in the schedule and breach of a covenant against subletting. The lease contained no covenant against subletting. The notice was held to be good. A notice referring to several alleged breaches of covenant is not invalidated in toto because it turns out that although some of the alleged breaches have occurred the others have never taken place, or that the lessor is not entitled to rely on them: Pennell v City of London Brewery Co [1900] 1 Ch 496; applied in Shepherd v Lomas [1963] 2 All ER 902; [1963] 1 WLR 962 at 970; see also Gair v Smith [1964] VR 814 at 817; Woorarra Pastoral Co Pty Ltd v Cash (SC(Vic),

[page 631] Adam J, 25 June 1970, unreported). A notice referring to the wrong covenant is bad: Jacob v Down [1900] 2 Ch 156. Where a notice set out the general covenant to repair contained in a lease, and then set out two further special painting covenants which the lease did not contain at all, and contained a schedule of work required to be done generally, some at least of which was not properly referable to the general covenant, the notice was invalid (Guillemard v Silverthorne (1908) 99 LT 584); but see Welbeck Way Holdings v H L Savory & Co [1958] EG 179. In Blewett v Blewett [1936] 2 All ER 188 it was held that the notice was not bad merely because it included work which the plaintiff was not entitled to require to be done under the lease. A notice relating to a portion only of the premises is sufficient: Hurd v Whaley [1918] 1 KB 448; [1918–19] All ER Rep 812. A notice was not bad because it failed to take into account an arrangement whereby as a matter of convenience the landlord permitted the tenant to deduct from the rent payable moneys that it paid for maintenance of the premises: Hace Corporation Pty Ltd v F Hannam (Properties) Ltd (1995) BPR 14,326. A failure properly to specify a breach of one covenant will not vitiate the notice insofar as it is otherwise valid and effective: Re Automotive and General Industries Ltd v Bryson Industries (Vic) Pty Ltd (2012) V ConvR 54-801; (SC(Vic), Adam J, 1 May 1970, unreported); compare Jennings Industries Ltd v Commonwealth of Australia (1983) 69 FLR 189 at 209. In the Automotive and General Industries case, particulars of a breach were held to be defective in not sufficiently bringing to the notice of the lessee the only justifiable ground of complaint while specifying other causes of complaint which were groundless. The giving of a notice under s 146 providing particulars of alleged breaches of covenant does not of itself disentitle the lessee to further and better particulars of the breaches alleged in an action for the recovery of the land: White v Kitchings [1970] 1 NSWR 510. In some states the form of notice is prescribed, with varying degrees of flexibility: Conveyancing Act 1919 (NSW) s 129(9); Property Law Act 1974 (Qld) s 124(8). The Queensland provision is mandatory: s 124(8); see Ex parte Taylor [1980] Qd R 253 where the position in New South Wales was reviewed, by way of contrast. Referring to decisions on the New South Wales provision, Campbell J said (at 256–7):

The earliest of these was Harris v Thallon (1926) 26 SR (NSW) 456. Under s 129(9) of the NSW Act the notice was to be in the form set out in the Schedule ‘or to a similar effect’. It was held that the notice in that case was insufficient as it did not give the lessee notice that she had a reasonable time to remedy the breach and did not inform her what her legal position would be if she failed to do so. Street CJ (with whom Gordon J and Harvey CJ in Eq agreed) said (at p 462): We cannot hold that any notice not in the statutory form is sufficient unless it is to a similar effect, and this one is not. This case was distinguished in Dogan v Morton (1935) 35 SR (NSW) 142 where the lessor included in the note at the foot of the form after the words ‘in the event of the lessee failing to comply with the notice within a reasonable time’ the words ‘which is seven days from the date hereof’. Davidson J (Stephen and Street JJ concurring) held (at pp 149–150): [page 632] … having told the tenants that he had reasonable time the addition was surplusage, and might have been proved to be correct or not when the jury came to determine in any action that might occur whether the time allowed was in fact reasonable or whether it was not. If there is any dispute in these matters the question of the reasonableness must always be determined by the jury, if there is one, or by the judge as a question of fact. In the last case referred to by Mr Gotterson, Johnson v Senes [above], the note at the end of the form was held to be an integral part of the form. Wallace J observed (at p 862): There are some breaches which are incapable of remedy but this merely means that the notice is accordingly attenuated, but is still otherwise necessary.

The omission from the notice in Ex parte Taylor was significant, namely a note to the statutory notice the purpose of which was ‘to ensure that the lessee is apprised of the lessor’s rights in the event of non-compliance within a reasonable time’ (at 258). The section may not have been construed so strictly had the omission been less significant. In view of the provisions of s 40 of the Acts Interpretation Act 1954–1977 (Qld) it is submitted that the standard by which the validity of a notice should be determined should be on the basis of ‘the capacity of the notice to give the [mortgagor] a reasonable opportunity to do what he is obliged to do’: Clarke v Japan Business Machines (Australia) Pty Ltd [1984] 1 Qd R 404 at 413. This was the approach of the Full Court in Ex parte Whelan [1986] 1 Qd R 500 at 505, but in relation to errors in particulars provided in a notice in statutory form which, it was held, could not have misled the lessees. See also Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 at 89–90 (SC, ACT). The purpose and application of these statutory requirements was also referred to and considered by Judd J in Primary RE Ltd v Great Southern Property Holdings Ltd [2011] VSC 242, where his Honour, referred with approval, particularly to a then recent decision of the New South Wales Court of Appeal: [105] A useful summary of legal principles applicable to the construction of the relevant statutory requirements, mentioned above, is to be found in the judgment of Hodgson JA in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [(2010) 15 BPR 28,563; [2010] NSWCA 268]. All parties relied, to a greater or lesser extent, on some of the passages set out below. His Honour said: 307. The genesis of s 129 lies in s 14 of the Conveyancing and Law of Property Act 1881 (UK) (which was re-enacted as s 146 of the Law of Property Act 1925 (UK)). In New South Wales, the equivalent of s 129 was first enacted by the Forfeiture of Leases Act 1901. For present purposes, these provisions are substantially identical to s 129; the only relevant difference is that the UK provisions contain no standard form like that which was set out in the schedule to the Forfeiture of

Leases Act (now Sch 6 to the Conveyancing Act). This difference should be borne in mind, but it does not follow that the English cases are of no assistance: Johnson v Senes & Berger (1961) 78 WN (NSW) 861 at 862–863. [page 633] 308. The purpose of s 129 is to give the lessee an opportunity to remedy any alleged breaches before the lessor exercises its legal right of forfeiture: Fletcher v Nokes [1897] 1 Ch 271 at 274; Horsey Estate Ltd v Steiger [1899] 2 QB 79 at 91; Ex parte Dally-Watkins; Re Wilson (1956) 72 WN (NSW) 454 at 456. 309. In my opinion, a proper opportunity is not afforded unless the lessee is alerted to the particular breaches on which the lessor proposes to rely and what the lessor requires in order to bring about a position where termination would not occur. 310. The reported cases are concerned with notices issued pursuant to alleged breaches of covenants to repair. In Fletcher v Nokes, a notice was issued under s 14 of the Conveyancing and Law of Property Act 1881 in which the lessor alleged generally that the lessee had “broken the covenants for repairing the inside and outside” of the demised premises, and required the lessee to repair “in accordance with the said covenants”. This notice was held insufficient because the lease was over six houses and the notice did not indicate in which of the houses the default was made. North J said (at 274): I think the notice which is to be given under s 14 ought to be such a notice as will enable the tenant to understand with reasonable certainty what it is which he is required to do. I do not mean that the landlord need go through every room in a house and point out every defect. But the notice ought to be so distinct as to direct the attention of the tenant to the particular things of which the landlord complains, so that the tenant may have an opportunity of remedying them before an action to enforce a forfeiture of

the lease is brought against him. In my opinion, the notice which the plaintiff has given to the defendant is not sufficiently specific. Sect. 14 says that it is to be a notice “specifying the particular breach complained of.” I do not think that is met by a notice which simply says, “You have broken the covenants for repairing.” The plaintiff has not condescended upon any details, and, in my opinion, the notice is not sufficient under s 14. 311. To similar effect are the statements of Collins LJ in Penton v Barnett [1898] 1 QB 276 and Lord Russell CJ in Horsey Estate Ltd v Steiger [1899] 2 QB 79. Collins LJ said ([1898] 1 QB 276 at 281): I think, however, that we ought to construe the words “particular breach” in the section according to the obvious intention of the Legislature, which was that the tenant should be informed of the particular condition of the premises which he was required to remedy. The expression “breach” means the neglect to deal with the condition of the premises so pointed out, and not merely failure to comply with the covenants of the lease. The common sense of the matter is, that the tenant is to have full notice of what he is required to do. He has had notice, and has failed to act on it; and with regard to that the physical condition of the premises which he was required to make good was the same when the action was brought as when the notice was given. 312. Lord Russell CJ said ([1899] 2 QB 79 at 91): To determine the character of the required notice, what it shall contain and when it ought to be given, it is necessary to consider the scope of s 14 of the Act of 1881 as a whole. The object seems to be to require in the defined cases (1.) that a notice shall precede any proceeding to enforce a forfeiture, (2.) that the notice shall be such as to give the tenant precise information of what is alleged against him and what is [page 634]

demanded from him, and (3.) that a reasonable time shall after notice be allowed the tenant to act before an action is brought. The reason is clear: he ought to have the opportunity of considering whether he can admit the breach alleged; whether it is capable of remedy; whether he ought to offer any, and, if so, what, compensation; and, finally, if the case is one for relief, whether he ought or ought not promptly to apply for such relief. In short, the notice is intended to give to the person whose interest it is sought to forfeit the opportunity of considering his position before an action is brought against him. 313. The statements in Fletcher v Nokes, Penton v Barnett and Horsey Estate v Steiger were quoted with approval in the leading case of Fox v Jolly [1916] 1 AC 1. Lord Buckmaster LC saw no reason to depart from the statement of North J in Fletcher v Nokes, “except so far as it seeks to establish the standard — often fluctuating and uncertain — of particulars in an action as a test of the sufficiency of the notice” (at 13). His Lordship went on to say that the particulars required for a notice in respect of a covenant to repair “would not necessarily be as detailed and minute” as the particulars required in respect of a claim for damages for breach of covenant (at 14). 314. Lord Atkinson was “quite willing” to accept the statement of North J, but said that it is to be borne in mind that the notice is addressed to a person who knows, or ought to know, the nature and condition of the premises, “so that a statement might be sufficient to draw his attention to the things of which the landlord complains, which might be insufficient so to do in the case of a stranger” (at 18). 315. Lord Parmoor said (at 22): My Lords, in my opinion a notice is sufficient to comply with s 14 if it specifies to the lessee the breach complained of, with such particularity, as fairly to tell him what it is he is required to remedy, if it is capable of remedy, and what it is for which he is required to make compensation in money. To determine whether a notice

complies with this test depends on the information which the notice, as a whole, may be fairly said to give. 316. The impugned notice in Fox v Jolly was served by the lessor of six small houses. Annexed to the notice was a schedule of dilapidations, including, for example, “Make good all cement fillets and all flashings” and “Repair landings and other woodwork”. Lord Buckmaster LC held that the notice sufficiently specified the landlord’s complaints and gave the tenant adequate notice of what he was required to do. In reaching this conclusion, his Lordship said (at 11): Now the schedule is attacked on several grounds. It is said that it does not tell the tenant what it is he ought to do in order to remedy the breach of which the complaint is made. I am not prepared to accede to that view of the schedule. But even if it did not, I can find nowhere in the section any words which cast upon the landlord the obligation of telling the tenant what it is that he must do. All that the landlord is bound to do is to state particulars of the breaches of covenants of which he complains and call upon the lessee to remedy them. The means by which the breach is to be remedied is a matter for the lessee and not for the lessor. In many cases specification of the breach will of itself suggest the only possible remedy. For example, complaint that a covenant to paint or to paper has been broken can only be met by painting and papering. But it does not follow that this is always so. A particular covenant to keep the [page 635] roof watertight, if broken, would be sufficiently defined by a reference to the covenant, a statement that the roof had not been kept watertight, and that the tenant was required to remedy the omission; the means by which this could be accomplished would be for the tenant to determine. 317. The Australian position reflects the above authorities. In

the second reading speech to the Forfeiture of Leases Bill, the Hon F B Suttor said that the object of the bill was to bring New South Wales law into conformity with the English law, and that: The object of the bill is to give the lessee the right to have notice given to him before his lease is cancelled so as to have time in which to complete the necessary repairs and in which to pay the necessary compensation demanded by the lessor for breach of the covenant of the lease. New South Wales Legislative Council, Parliamentary Debates (Hansard), 4 July 1900 at 619; 11 July 1900 at 816. 318. In Gerraty v McGavin [1914] HCA 23; (1914) 18 CLR 152 at 160 (decided before Fox v Jolly), Griffith CJ quoted with approval the statement that Collins LJ made in Penton v Barnett, and held that a notice merely quoting the covenant was insufficient. Isaacs J agreed in the result with Griffith CJ, saying that a lessor (at 164–165): [M]ust then do what he would have to do if he had brought an action, namely, specify what he says is “the particular breach,” and not merely state that there has been “a breach.” If he does that, he is not bound to go further and instruct the tenant how to repair it. That would not only be an undue burden on the landlord, but, if effectual at all, would tie the tenant down to one particular mode of repairing his fault. 319. In Dogan v Morton (1935) 35 SR (NSW) 142 at 148, Davidson J (with whom Stephen and Street JJ agreed) referred to the English authorities and concluded: The landlord must give the kind of particulars which will draw the attention of the lessee to the particular defect in the premises which he desires to have rectified in accordance with the covenant. The indication need only be such as would enable the lessee to understand with reasonable certainty what it is that he is required to remedy. 320. In Ex parte Dally-Watkins; Re Wilson (1956) 72 WN (NSW) 454 at 456, Street CJ (with the concurrence of Roper CJ in Eq and Sugerman J) said that the object of the notice is

to bring to the attention of the lessee the matters which are complained of and to give him the opportunity of rectifying what has taken place in the past, if it be capable of rectification. To do so, the “vital thing” is to alert the tenant to the term of the lease alleged to have been broken and the manner in which it has been broken. Street CJ also held that the form set out in Sch 6 is not “a piece of sacramental ritual”. 321. In Johnson v Senes & Berger (1961) 78 WN (NSW) 861 at 864, Wallace J said (referring to Horsey Estate v Steiger): The object of this legislation includes not only the placing of restrictions on and the giving of relief against forfeiture and reentry, but the placing of the lessee in a completely informed position so as to enable him to elect what shall be his subsequent conduct. 322. Finally, in Visser v Jacobs (1987) NSW ConvR 55-350 at 57,164, Bryson J explained that: The underlying mechanism achieved by the working of sec 129 is that provisions of leases which create rights of re-entry are not employed [page 636] to deprive lessees of valuable leasehold interests if other measures are available to bring about the desirable result that covenants of leases are complied with and breaches of them are remedied. Bryson J acknowledged that the “degree of specificity must vary with the circumstances and with the facts already known or manifest to the lessee”. One of the bases on which the notice in Visser was held invalid was that it contained no specification of particular breaches (only the general subject of the breaches). 323. In my opinion, the above authorities clearly indicate that a notice under s 129 must not only allege breach, but must also describe the particular acts or omissions constituting the alleged

breach; and the notice must indicate the acts of the tenant which the landlord would consider sufficient for the lease to continue, and upon completion of which the landlord would abandon its claim to forfeit. The standard of particulars or degree of specificity depends upon the circumstances, including the nature of the covenant alleged to be breached, the tenant’s actual or constructive knowledge, and whether the landlord claims reasonable compensation. To use the example of Lord Buckmaster LC, where there are several options open to a tenant to waterproof a leaking ceiling, then that choice is at the tenant’s discretion. Thus s 129 is, in my opinion, directed at allowing the tenant to bring about (within a reasonable time) a state of affairs under which the landlord would not pursue forfeiture. 324. In particular, the lessee should not be left to speculate as to whether, if it took whatever action it could to remedy the specified breaches, the lessor might nevertheless proceed to terminate the lease on the basis that the breaches were not capable of remedy or that, because what the lessee did was insufficient to eliminate loss caused to the lessor by the late performance of the lessee’s obligations, the lessee was still in breach [[2010] NSWCA 268, [307]-[324]]. [106] The landlords submitted that the tenant was not required, in a statutory notice, to specify the means by which a breach was to be remedied. In Fox v Jolly [[1916] AC 1]. Lord Buckmaster LC said: Now the schedule is attacked on several grounds. It is said that it does not tell the tenant what it is he ought to do in order to remedy the breach of which the complaint is made. I am not prepared to accede to that view of the schedule. But even if it did not, I can find nowhere in the section any words which cast upon the landlord the obligation of telling the tenant what it is that he must do. All that the landlord is bound to do is to state particulars of the breaches of covenants of which he complains and call upon the lessee to remedy them. The means

by which the breach is to be remedied is a matter for the lessee and not for the lessor. In many cases specification of the breach will of itself suggest the only possible remedy. For example, complaint that a covenant to paint or to paper has been broken can only be met by painting and papering. But it does not follow that this is always so. A particular covenant to keep the roof watertight, if broken, would be sufficiently defined by a reference to the covenant, a statement that the roof had not been kept watertight, and that the tenant was required to remedy the omission; the means by which this could be accomplished would be for the tenant to determine [[2016] AC 1 at 11]. … [page 637] I think the notice which is to be given under s 14 ought to be such a notice as will enable the tenant to understand with reasonable certainty what it is which he is required to do. I do not mean that the landlord need go through every room in a house and point out every defect. But the notice ought to be so distinct as to direct the attention of the tenant to the particular things of which the landlord complains, so that the tenant may have an opportunity of remedying them before an action to enforce a forfeiture of the lease is brought against him [[2016] AC 1 at 13]. … I have only to add that it would be very unfortunate if, in every case where a landlord was serving notice under s 14, he should feel himself bound to obtain a surveyor’s detailed specification of the work to be done. It would greatly increase the cost which, if the work were performed by the tenant before proceedings were instituted, would fall on the landlord,

or, if the tenant were compelled to obtain relief, would, by the Act of 1892, fall upon the tenant. I am glad to think that no such obligation is imposed by the statute [[2016] AC 1 at 15]. Continuing, Judd J said: [128] Primary relied upon the decision of the Court of Appeal of New South Wales in Macquarie to support its contention that the amount of compensation must be quantified. In my opinion, Macquarie does not stand for any such proposition. In that case the notice was directed to a default on the part of the tenant by its failure to pay amounts under a car park lease. The notice of default did not purport to claim compensation as an additional component of a demand made under s 129 of the Conveyancing Act 1919. Hodgson JA held: [325] In the present case, the notices did not express any requirement to do anything. Even accepting that they can be read with cl 16 of the Car Park Lease and cl 17 of the Hospital Lease, they did not alert Macquarie as to whether Area Health was asserting that the breaches were remediable by payment of money (and if so, what was “all money necessary to remedy the Event of Default”), or were remediable other than by payment of money (and if so, by what), or were not remediable (and if so, what compensation would be to the reasonable satisfaction of Area Health). Specifically, the notices did not indicate whether Area Health was claiming interest on money that had not been paid at the times required by the agreements, or was claiming that the failure to complete the car park or substantially commence the hospital by 31 June 1999 caused loss entitling Area Health to compensation even if Macquarie proceeded in response to the notice to do these things. [326] Accordingly, the notices did not convey to Macquarie what Area Health claimed Macquarie needed to do to avoid the failure referred to in s 129(1) which would then permit

Area Health to exercise its right of re-entry or forfeiture [[2010] NSWCA 268, [325]-[326]]. [129] The defect in the notice in Macquarie was that it did not express a requirement to do anything. Hodgson JA continued: [page 638] [327] A s 129 notice is not invalidated if the lessor includes in it specification of breaches that a court later finds were not committed: Fox v Jolly. In my opinion, it would follow from this that an otherwise valid s 129 notice is not invalidated just because the lessor requires the lessee to remedy a breach that has not in fact occurred, or to pay an amount in compensation that is more than what is reasonable. In such cases, if the lessee does not wish to comply with requirements in the notice to the extent that the lessee considers them excessive, the lessee may take the risk of not complying fully with the lessor’s requirements; and if the lessor then purports to forfeit the lease and the matter comes to litigation, the lessee may or may not be successful. But in such a case, at least the lessee is given information as to what the lessor requires and can be confident that if these things are done there will be no forfeiture. The notices in this case did not perform that function [[2010] NSWCA 268, [327]]. His Honour’s observations concerning the validity of a s 129 notice do not, it seems to me, goes so far as to suggest that when a bald claim for compensation is made, unspecified as to amount, the notice is invalid. [130] The landlords submitted that one purpose of a statutory notice was to give the tenant the opportunity of considering “whether he ought to offer any, and if so, what compensation”. In Horsey Estate Ltd v Steiger [[1899] 2 QB 79] Lord Russell CJ said: The object seems to be to require in the defined cases (1.) that a notice shall precede any proceeding to enforce a forfeiture,

(2.) that the notice shall be such as to give the tenant precise information of what is alleged against him and what is demanded from him, and (3.) that a reasonable time shall after notice be allowed the tenant to act before an action is brought. The reason is clear: he ought to have the opportunity of considering whether he can admit the breach alleged; whether it is capable of remedy; whether he ought to offer any, and, if so, what, compensation; and, finally, if the case is one for relief, whether he ought or ought not promptly to apply for such relief. In short, the notice is intended to give to the person whose interest it is sought to forfeit the opportunity of considering his position before an action is brought against him [[1899] 2 QB 79, at 91-2 (emphasis added)]. [131] The notice in Horsey Estate was found not to comply with the requirements of s 14 of the 1881 Act. The notice was served two days prior to the issue of the writ seeking possession. The plaintiffs admitted at trial that they were in no position to rely upon the alleged breach for non-repair. An extensive schedule of repairs was attached. Two days was not a reasonable time. But they also relied upon other breaches. These included the tenant’s insolvency, and breach by under-letting. The Court of Appeal held that there was no breach by under-letting. Lord Russell CJ said: … if the entering upon liquidation had alone been put forward, the defendants would have had the opportunity of considering whether they had any answer, and, if not, whether they could make terms with the plaintiffs, but this was impracticable so long as the claim for breach of covenant to repair was made. Again, if non repair was alone relied on, the defendants might possibly by offer of compensation accompanied by undertaking to repair have made terms with the plaintiffs [[1899] 2 QB 79, at 92] [132] It seems tolerably clear that Lord Russell CJ was of the opinion that a claim for compensation provided the tenant with an opportunity to avoid termination by

[page 639] making an offer of compensation, accompanied by undertaking to remedy the breach. The relevant shortcoming in the notice was that two days was not a reasonable time. Translated into the context of this case, it might be said that a sufficient response by the tenant to the notices would have been to undertake to recommence management of the plantations and perform its obligations under each lease and forestry agreement, which would necessarily involve remediating the consequence of its lapse in management at the appropriate time in the management cycle. The tenant could also agree to pay reasonable compensation for any damage to the reversion. If viewed from that perspective, a reasonable time to respond to the notice would be the time required to decide whether to put such a proposal to the landlord. [133] A landlord will rarely be in a position to specify the amount of compensation necessary to satisfy a reasonable demand. I accept the submission of Primary that compensation is directed to loss suffered as a consequence of damage to the reversion. It is not intended as a substitute for remediation. But just as the landlord will rarely be able to precisely quantify compensation, so the tenant will rarely be in a position to do more than agree to pay a reasonable sum. The question as to what is reasonable may be capable of negotiation, but if not, it may be determined by a court. Thus, Primary’s complaint that the notices failed to specify an amount of compensation misunderstood the nature of the response required from the tenant if it wished to avoid forfeiture. A notice, to be valid, must be served before the breach complained of is remedied: SEDAC Investments Ltd v Tanner [1982] 1 WLR 1342, where the landlord purported to serve a notice in respect of repairs which, because of their urgency, the landlord had already caused to be effected. A tenant may waive the right to assert the invalidity of a notice, but must do so in full knowledge of the defects: Morrow v Nadeem [1986] 1 WLR 1381. As to

clerical errors in notices, see C Croft and R Hay, The Mortgagee’s Power of Sale, 3rd ed, LexisNexis Butterworths, Sydney, 2012, pp 33–6. However, an omission from the notice may prove very significant in proceedings for relief against forfeiture. The New South Wales Court of Appeal in Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97,311 stated the position as follows (at 9638 per Meagher JA with whom the other members of the court agreed): Before this court can adequately perform that exercise, it will be necessary to determine what, if any, effect can be given to the circumstance that the lessee was in breach of the covenant requiring it to obtain the mortgagee’s consent which undoubtedly did take place although the notice under s 129 had not specified that breach. This is a matter which is the subject of one decision by this court viz the decision of Hope J (as he then was) in Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562. In that case, after a careful review of the authorities, his Honour concluded that where a notice is issued specifying one breach a court cannot, unless there are special circumstances, take into account other breaches which have not been referred to in the notice. His Honour did not decide that in no circumstance can a court take into account such other breaches, and such a conclusion would be surprising in view of the ample discretion of the court. Indeed, in some cases (for example whether there have been continued and repeated breaches of covenants after the notice has been served) a court of Equity, asked to relieve against any forfeiture, would necessarily have to take into account unspecified breaches. Nevertheless, in my view his Honour in that case [page 640] correctly laid down the law applicable, and in the present case I do not see any special circumstances which could enable us to take into account the lessor’s failure to obtain the mortgagee’s consent to the sub lease in question. [emphasis added]

See also Cicinave Pty Ltd v Jasco Pty Ltd (1989) 5 BPR 97,329 (SC, NSW, Powell J). As to the effect of fraud in a notice similar in nature, see Rous v Mitchell [1991] 1 WLR 469 (CA), referred to at [20.1].

Breach incapable of remedy [18.7] Where the breach is incapable of remedy, the notice need not require the breach to be remedied: Rugby School v Tannahill [1935] 1 KB 87; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 at 1053; and Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340, where the authorities are reviewed at length; see also Hoffman v Fineberg [1949] Ch 245; [1948] 1 All ER 592; but compare Glass v Kencakes Ltd [1966] 1 QB 611; [1964] 3 All ER 807. The remedy must be a complete remedy: the Expert Clothing case at [1986] Ch 340 at 352, citing Maugham LJ in the Rugby School case [1935] 1 KB 87 at 93. As to the giving of a notice to forfeit a lease on the bankruptcy or insolvency of a tenant, see Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347 at 354–5. A breach of covenant not to assign, sublet or part with possession is a once for all breach and is incapable of remedy; consequently, it is unnecessary for the notice given under s 146(1) of the Property Law Act 1958 (Vic) (or the corresponding provisions: see [18.1]) to call on the lessee to remedy the breach: Scala House and District Property Co Ltd v Forbes [1974] QB 575; the Expert Clothing case. Slade LJ (with whom in the latter case the other members of the Court of Appeal agreed) commented at 354: However, in the Scala House case this court was addressing its mind solely to the once and for all breach of a negative covenant. No corresponding anomaly arises if the once and for all breach of a positive covenant is treated as capable of remedy. While the Scala House decision is, of course, authority binding on this court for the proposition that the breach of a negative covenant not to assign, underlet or part with possession is never ‘capable of remedy’, it is not, in my judgment, authority for the proposition that the once and for all breach of a positive covenant is never capable of remedy.

His Lordship added that a breach of a positive covenant, whether continuing or once and for all, will ordinarily be capable of remedy. Note also the doubts expressed by O’Connor LJ in the Expert Clothing case (at 364) in relation to the reasoning in the Scala House case. In Savva v Houssein [1996] 47 EG 138 the Court of Appeal held that a breach of a negative covenant that precluded a tenant from making alterations to the demised premises without the landlord’s consent was capable of remedy within the meaning of a provision corresponding to s 146(1) of the Property Law Act 1958 (Vic). After the tenant effected alterations without first obtaining the landlord’s consent the [page 641] landlord served a notice forfeiting the lease. The landlord contended that the breaches of the negative covenant were not capable of remedy. The Court of Appeal disagreed. Staughton LJ held that: In my judgment, except in a case of breach of a covenant not to assign without consent, the question is: whether the remedy referred to is the process of restoring the situation to what it would have been if the covenant had never been broken, or whether it is sufficient that the mischief resulting from a breach of the covenant can be removed. When something has been done without consent, it is not possible to restore the matter wholly to the situation which it was in before the breach. The moving finger writes and cannot be recalled. That is not to my mind what is meant by a remedy, it is a remedy if the mischief caused by the breach can be removed. In the case of a covenant not to make alterations without consent or not to display signs without consent, if there is a breach of that, the mischief can be removed by removing the signs or restoring the property to the state it was in before the alterations. I would hold that all the breaches complained of in this case were capable of remedy. In the same case Aldous LJ said: In one sense a breach can never be remedied because there must have been non-compliance with the covenant for there to be a breach. That

cannot be the solution. Thus, the fact there has been a breach does not determine whether it can be remedied in the way contemplated by the Law of Property Act 1925, s 146. That was decided in Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] 1 Ch 340. Breach of a positive covenant to do something, could ordinarily for practical purposes, be remedied by the thing being actually done ([1986] 1 Ch 340 at 357 per Slade LJ). I can see no reason why similar reasoning should not apply to some negative covenants. An important purpose of section 146 is to give tenants, who have not complied with their obligations, one last chance to do so before the landlord reenters. Slade LJ in Expert Clothing, proposed this test ([1986] 1 Ch 340 at 358). If the section 146 notice had required the lessee to remedy the breach and the lessors had then allowed a reasonable time to elapse to enable the lessee fully to comply with the relevant covenant, would such compliance coupled with the payment of any appropriate monetary compensation have effectively remedied the harm which the lessors had suffered or were likely to suffer from the breach? It is only if the answer to that question is ‘no’ can it be said that the breach is not capable of being remedied. What was proposed as the question to ask by Slade LJ, albeit in relation to a case of dispute about a positive covenant, is relevant to consideration as to whether a negative covenant can be remedied. There is in my view nothing in the statute, nor in logic, which requires different considerations between a positive and negative covenant, although it may be right to differentiate between particular covenants. The test is one of effect. If a breach has been remedied then it must have been capable of being remedied. A notice which requires the tenant to ‘remedy the breach if capable of remedy’ is probably good: Hoffman v Fineberg (Ch) at 252–3; Glass v Kencakes Ltd [1966] 1 QB 611 at 629–30; Re Automotive & General Industries Ltd v Bryson Industries (Vic) Pty Ltd (2012) V ConvR 54-801; (SC(Vic), Adam J, 1 May 1970, unreported). Where a defendant committed a breach of her covenant not to use the premises for illegal or immoral purposes it was held that the breach was incapable of remedy;

[page 642] Rugby School v Tannahill; Dunraven Securities Ltd v Holloway [1982] 2 EGLR 47 (CA). In the following cases also, the breach was regarded as irremediable: Hoffman v Fineberg (using premises as gaming house), distinguished in Glass v Kencakes Ltd; Egerton v Esplanade Hotels London Ltd [1947] 2 All ER 88 (premises used as a brothel), distinguished in Glass v Kencakes Ltd; BorthwickNorton v Romney Warwick Estates Ltd [1950] 1 All ER 798 (premises used as a brothel), distinguished in Glass v Kencakes Ltd; Bickerton’s Aerodromes Ltd v Young (1958) 108 L Jo 218 (breaches of the licensing laws); see also Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 at 1053. Whether the breach of a covenant not to suffer a distress is capable of remedy depends upon the particular circumstances of the case; so, where the plaintiff had sustained no undue injury and no undue notoriety had attached to the premises as a result of the distress which had been levied on them, the breach of covenant that the defendant committed was capable of being remedied and had been remedied by the payment of the rent due and the costs of the distress: Hartley v Larkin (1950) 66 TLR 896. In Batson v De Carvalho (1948) 48 SR (NSW) 417 it was held that a breach of a covenant against assigning, subletting or parting with possession without the consent of the lessor first had and obtained may be capable of remedy. Some doubt must exist as to whether this decision will be followed, having regard to the contrary view expressed by the Court of Appeal in Scala House and District Property Co Ltd v Forbes [1973] 3 All ER 308; see also Johnson v Senes [1961] NSWR 566; 78 WN (NSW) 861. As to whether two breaches — (a) conviction for selling liquor without a licence; and (b) failing to give the lessor notice of the conviction — are capable of remedy, see Rakay v MacFarlane [1961] NSWR 1121; 78 WN (NSW) 488. The notice need not require compensation if the lessor does not desire it: Lock v Pearce [1893] 2 Ch 271; Rugby School v Tannahill [1935] 1 KB 87; see also Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547 at 551, to the same effect. Thus, if no compensation is desired and the breach cannot be remedied, a notice merely specifying the breach will suffice: Rugby School v Tannahill. A breach to be capable of remedy must be capable of remedy within a reasonable time, which depends upon the circumstances: Hick v Raymond and

Reid [1893] AC 22 at 29; the Rugby School case; Egerton v Esplanade Hotels (London) Ltd [1947] 2 All ER 88 at 91; and the Expert Clothing case [1986] Ch 340 at 356. The possibility of remedy within a reasonable time nevertheless depends upon the nature of the covenant. In the Expert Clothing case (at 357) Slade LJ said: However, in my opinion, in considering whether or not remedy within a reasonable time is possible, a crucial distinction (which I infer from the judgment did not feature prominently in argument before the judge) falls to be drawn between breaches of negative user covenants, such as those under consideration in the Rugby School and the Explanade Hotels cases, and breaches of positive covenants. In the two last-mentioned cases, where the relevant breaches consisted of allowing premises to be used as a brothel, even full compliance with the covenant within a reasonable time and for a reasonable [page 643] time would not have remedied the breach. As Maugham LJ pointed out in the Rugby School case [1935] 1 KB 87 at 94, [1934] All ER Rep 187 at 192: … merely ceasing for a reasonable time, perhaps a few weeks or a month, to use the premises for an immoral purpose would be no remedy for the breach of covenant which had been committed over a long period. On the facts of cases such as those, mere cesser by the tenant of the offending use within a reasonable period and for a reasonable period of time could not have remedied the breaches because it could not have removed the stigma which they had caused to attach to the premises. The harm had been irretrievably done. In such cases, as Harman J pointed out in Hoffmann v Fineberg [1949] 1 Ch 245 at 257; [1948] 1 All ER 592 at 597, mere cesser will not enable the tenant to ‘make his record clean, as he could by complying, though out of time, with a failure to lay on the prescribed number of coats of paint’.

In contrast with breaches of negative user covenants, the breach of a positive covenant to do something (such as to decorate or build) can ordinarily, for practical purposes, be remedied by the thing being actually done if a reasonable time for its performance (running from the service of the s 146 notice) is duly allowed by the landlord following such service and the tenant duly does it within such time.

Breach capable of remedy [18.8] A notice is bad if, the breach being capable of remedy, the notice does not require it to be remedied: Glass v Kencakes Ltd [1964] 3 All ER 807; [1966] 1 QB 611.

Sufficient period of notice [18.9] Unlike the Victorian provision, the corresponding English provision and those in the other states (see [18.1]) do not contain the words ‘or the time not being less than 14 days fixed by the lease’. A notice given under the New South Wales Act need not specify a time for remedying the breach: Glebe Administration Board v Tasker [1964] NSWR 1307. Two days’ notice has been held unreasonable (Horsey Estate Ltd v Steiger [1899] 2 QB 79; [1895–9] All ER Rep 515), and 14 days has been held sufficient: Civil Service Cooperative Society v McGrigor’s Trustee [1923] 2 Ch 347; [1923] All ER Rep 595. Three months will usually be long enough: Penton v Barnett [1898] 1 QB 276. Where the notice required the breaches to be remedied ‘within a reasonable time which is seven days from the date hereof’ it was held that the words ‘which is seven days from the date hereof’ were surplusage and that the notice was good: Dogan v Morton (1935) 35 SR (NSW) 142. In Re Automotive & General Industries Ltd’s Lease (SC(Vic), Adam J, 1 May 1970, unreported) the notice required the breaches to be remedied ‘within 14 days from the service of this notice’. This period was held to be too short, on the ground that the lease spoke of a notice to remedy ‘after the expiration of 14 days’ from service, not ‘within’ that period. Adam J also expressed the view that the time given was not reasonable, but went on to decide that the notice

[page 644] was good, on the ground that the specification of a time was not necessary and on the further ground that where the lease fixed a period not being less than 14 days the question of reasonableness did not arise. The result of this important decision would seem to be as follows: (a) Section 146 (Vic) does not require the notice to specify any period; what is essential is that the necessary period should in fact elapse between the service of the notice and the exercise of the right of re-entry or forfeiture. (b) The necessary period for this purpose is the time fixed by the lease, not being less than 14 days, whether or not the time so fixed is reasonable. If the lease does not fix a time (or fixes one of less than 14 days), the necessary period is a reasonable time. (c) If the notice does specify a period, the taking of this unnecessary step will not vitiate the notice even though the period specified is less than the law allows. Adam J appears to have relied on Harris v Thallon (1926) 26 SR (NSW) 456. In that case the Full Court of New South Wales held that the corresponding statutory provision (which refers only to a reasonable time) required a notice informing the tenant that he had a reasonable time within which to remedy. This decision would seem, with respect, not to support the view that the fixing of too short a period by the notice does not make it bad; on the contrary, the court held that the section required that the tenant be accurately informed as to his rights. The basis of the decision in Harris v Thallon may be the form of notice set forth in Sch 6 to the Conveyancing Act, since, while there is nothing in the body of that prescribed form to suggest that the notice must inform the lessee that he or she has a reasonable time within which to comply, there is a footnote informing the lessee that the lessor will be entitled to forfeit the lease in the event of the lessee’s failing to comply within a reasonable time; compare Glebe Administration Board v Tasker [1964] NSWR 1307. The view taken by Adam J is thought, with respect, to accord with the express provisions of s 146(1) (Vic), the contrary view requiring an implication based upon the supposed object of the section. Dicta

in Horsey Estate Ltd v Steiger [1899] 2 QB 79 at 91–2; and Dunedin City Corporation v Searl [1916] NZLR 145 at 156 similarly suggest that the necessary period should be in fact allowed to elapse between the service of the notice and the forfeiture. Nonetheless, it is suggested that just enough doubt exists on the point to make it unwise to prepare a notice which requires a breach to be remedied but is silent as to the time allowed in that behalf. Breaking silence in relation to time does of course create the danger that the notice will indicate too short a period and be held bad on that ground.

Service of notice [18.10] The word ‘lessee’ in s 146 refers only to a lessee in possession or to a lessee who has some present estate or interest in the premises: Cusack-Smith v Gold [1958] 1 WLR 611. The requirement of the section is satisfied if the appropriate notice is [page 645] given to the person who is ‘the lessee’ at the time the notice is given; if, after service of the notice, the tenant assigns, there is no necessity to serve a new notice upon the assignee before starting proceedings against him or her to enforce the right of re-entry or forfeiture: Kanda v Church Commissioners for England [1958] 1 QB 332; [1957] 2 All ER 815. A notice of forfeiture of a lease under s 146 of the Law of Property Act 1925 should be served on the assignee irrespective of whether or not the assignment was in breach of a covenant not to assign: Old Grovebury Manor Farm Ltd v W Seymour Plant Sales & Hire Ltd (No 2) [1979] 1 WLR 1397. The notice may be addressed to ‘the lessee’ by that designation, without his or her name, or generally to the persons interested, without any name, and notwithstanding that any person to be affected by the notice is absent, under disability, unborn or unascertained: Property Law Act 1958 s 198(2). If there are several lessees, they must all be served: Blewett v Blewett [1936] 2 All ER 188. The notice will be sufficiently served if it is left at the last-known place of abode or business (in the relevant

state) of the lessee or other person to be served, and, if it is to be served on the lessee, it is sufficient to affix it or leave it for him or her on the land or any house or building comprised in the lease: Property Law Act 1958 (Vic) s 198(3); see Conveyancing Act 1919 (NSW) s 170; Property Law Act 1974 (Qld) s 347; Law of Property Act 1936 (SA) s 112; Conveyancing and Law of Property Act 1884 (Tas) s 85; Property Law Act 1969 (WA) s 135; and as to service generally, see Stylo Shoes Ltd v Prices Tailors Ltd [1960] Ch 396. Where a notice addressed to the lessee is left with a person on the premises, and there are reasonable grounds for supposing that that person will pass it on to the lessee, the service is good within s 198(3): Cannon Brewery Co Ltd v Signal Press Ltd (1928) 139 LT 384; [1928] All ER Rep 108. Service by registered post is good, if the letter is not returned undelivered; service is deemed to be made at the time at which the letter would in the ordinary course be delivered: Property Law Act 1958 (Vic) s 198(4). Section 198, however, does not lay down the only modes of service. A party cannot take advantage of his or her own act in intentionally avoiding service of a notice: Bragg v Alam [1981] 1 NSWLR 668; editor’s note (1982) 56 ALJ 142 (affirmed CA(NSW), 5 July 1982, unreported). In Ex parte Dally-Watkins (1955) 72 WN (NSW) 454, a letter sent to the lessee’s solicitor (who brought it to his client’s attention) was held to have been properly served. In that case, a letter from the lessor’s solicitor to the lessee’s solicitor specifying the dates of certain episodes involving noisy conduct, requesting an undertaking to minimise noise and stating that in default of such undertaking being given notice to quit and summons would issue, was held to be a sufficient notice. These matters were also discussed in Johnson v Senes [1961] NSWR 566; 78 WN (NSW) 861. As to requirements relating to service on a liquidator, see Grangeside Properties Ltd v Collingwoods Securities Ltd [1964] 1 All ER 143. A notice need not be served on the assignor of the term of a lease: Chelfield Pty Ltd v Goldsea; Re WC Pty Ltd [2003] Qd R 243. [page 646]

Protection of position of lessee [18.11] Section 124(7) of the Queensland Act provides a lessee seeking relief under that section with statutory protection against the argument that implied admissions have been made by so doing: (3) The making of an application under this section shall not of itself be construed as an admission on the part of the lessee — (a) that any such notice as is mentioned in subsection (1) has been served by the lessor; or (b) that any such breach as is mentioned in subsection (1) has occurred or that any right of or cause for re-entry or forfeiture has accrued or arisen, and the Court may, if it thinks fit, grant relief as aforesaid without making a finding that, or arriving at a final determination whether, any such notice has been served, or any such breach has occurred, or that any such right has accrued or cause arisen. This provision could usefully be considered by other jurisdictions as it has the potential to avoid some of the esoteric and costly arguments to which many of the cases cited above testify.

[page 647]

19 Relief from Forfeiture Equitable and statutory relief [19.1] Courts of equity usually grant relief against forfeiture for nonpayment of rent. The readiness to grant relief in these circumstances was because equity considered that a right of forfeiture was only a security for payment of rent; in much the same way as equity considered a mortgage only security for payment of the mortgage debt, in spite of the position of the parties at law. Therefore, it would favour restoring the tenant to his or her position despite the landlord’s action to forfeit the lease if: (a) the tenant paid the arrears of rent; (b) the tenant paid all expenses to which the landlord had been put by the tenant’s breach; and (c) it was just and equitable to grant relief. The equitable jurisdiction to grant relief against forfeiture is very broad. There are many cases cited (here and elsewhere) in relation to the exercise of that discretion but they should be seen as applications of a general principle rather than decisions defining the principle, in whole or in part. The general principle was clearly stated and applied by the House of Lords in Shiloh Spinners Ltd v Harding [1973] AC 691 and by the High Court in Legione v Hateley (1983) 152 CLR 406 and Stern v McArthur (1988) 81 ALR 463. The general principle was applied with approval by the New South Wales

Court of Appeal in Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687 and conveniently summarised by Kirby P (with whom Meagher JA agreed) as follows (at 691–3): In Crabb v Arun District Council [1976] Ch 179 at 187, Lord Denning MR described how ‘Equity comes in, true to form, to mitigate the rigours of strict law’. In the same case Lord Scarman (at 193) spoke of the ‘eternal credit’ due to equity which, in the law of England, had developed ‘an immensely flexible, yet perfectly clear, doctrine’. [page 648] One aspect of that doctrine was the relief, long given by courts of equity, against legal provisions resulting in the forfeiture of a proprietary interest. In exercising its jurisdiction, equity ‘controlled the excesses of the common law’: see R P Meagher, W M C Gummow, J R F Lehane, Equity Doctrines and Remedies, 2nd ed (1984) at 418. This form of relief brought into focus ‘the antithetical attitude of equity and the common law’. It rested, ultimately, on the notion ‘that a person should not use his legal rights to take advantage of another’s misfortune’: see ibid at 418. The availability of relief against the forfeiture of leasehold interests was considered by the House of Lords in Shiloh Spinners Ltd v Harding [1973] AC 691. Lord Wilberforce (at 722) said of this form of relief: There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concern mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copyholds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self-limitation to be imposed

or accepted on this power. There has not been much difficulty as regards the heads of jurisdiction. First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs (Peachy v Duke of Sommerset (1721) 1 Stra 447 and cases there cited). Yet even this head of relief has not been uncontested: Lord Eldon LC in his well known judgment in Hill v Barclay (1811) 18 Ves Jun 56 expressed his suspicion of it as a valid principle, pointing out, in an argument which surely has much force, that there may be cases where to oblige acceptance of a stipulated sum of money even with interest, at a date when receipt had lost its usefulness, might represent an unjust variation of what had been contracted for: see also Reynolds v Pitt (1812) 19 Ves Jun 140. Secondly, there were heads of fraud, accident, mistake or surprise, always a ground for equity’s intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults. In the same case, Lord Simon of Glaisdale (at 726f–727) asserted that the jurisdiction of equity was founded on a broader principle of which, by inference, the categories mentioned by Lord Wilberforce were but illustrations: … The last hundred years have seen many examples of relaxation of the stance of regarding contractual rights and obligations as sacrosanct and exclusive of other considerations: though these examples do not compel equity to follow — certainly not to the extent of overturning established authorities — they do at least invite a more liberal and extensively based attitude on the part of courts which are not bound by those authorities. I would therefore myself hold that equity has an unlimited and unfettered jurisdiction to relieve against contractual forfeitures and penalties. What have sometimes been regarded as fetters to the jurisdiction are, in my view, more properly to be seen as considerations which the

court will weigh in deciding how to exercise an unfettered jurisdiction … Prominent but not exclusive amongst such considerations is the desirability [page 649] that contractual promises should be observed and contractual rights restricted, and even more the undesirability of the law appearing to condone flagrant and contemptuous disregard of obligations. It is not necessary in this case to resolve the controversy concerning the breadth of the principle which underlies the provision of equitable relief to protect interests in leaseholds from the operation of forfeiture. It is enough that this is a case which falls within the first of Lord Wilberforce’s two categories. The right to forfeiture is essentially provided here to secure the payment of money (Crown dues). The respondents have proffered, belatedly, payment of such dues together with interest and expenses. They have also submitted to the order which Kearney J made that they pay the appellants’ costs. The case is therefore (statute apart) a classic example of the kind of circumstances in which equity would provide relief from forfeiture. Any doubt that the principles in Shiloh Spinners are part of the law of Australia is dispelled by the decision of the High Court of Australia in Legione v Hateley (1983) 152 CLR 406. The passage from Lord Wilberforce’s speech was cited with approval by Gibbs CJ and Murphy J in that decision (at 424). Reference was made to the wider basis suggested by Lord Simon for the jurisdiction of equity; but that controversy was not there resolved. Their Honours proceeded to apply the jurisdiction of equity to relieve against forfeiture in that case, which was one involving a contract for the sale of land. Their view of the jurisdiction of the court was shared by Mason and Deane JJ. Their Honours allowed (at 447): … generally speaking equity expects men to carry out their

bargains … Nor will it remake the parties’ contract simply because it transpires that as things have happened one party has made a bad bargain. But if there be fraud, mistake, accident, surprise or some other element which would make it unconscionable or inequitable to insist on forfeiture of the purchaser’s interest under the contract because he has not performed in strict accordance with its terms there is no injustice to the innocent party in granting relief against forfeiture by means of specific performance with or without compensation. [Emphasis added.] See also Batiste v Lenin (2002) 11 BPR 20,403 where the New South Wales Court of Appeal approved of the principles in Shiloh Spinners and Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 where the Full Court of the Supreme Court of Western Australia applied Shilo Spinner; see also Melksham v Archerfield Airport Corporation [2004] ANZ ConvR 363. Similar threads can be seen running through Lord Hardwicke’s classic statement of the basis for and the nature of the equitable jurisdiction to relieve against fraud in Chesterfield v Janssen (1750–1) 2 Ves Sen 125; Ves Sen Supp 297; 28 ER 82,531. See Howard v Fanshawe [1895] 2 Ch 581 at 588; Gill v Lewis [1956] 2 QB 1 at 15; Direct Food Supplies (Vic) Pty Ltd v DLV Pty Ltd [1975] VR 358; Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 (SC, NSW) and note the comment of Hope J, at 9574, that ‘the grant of relief against forfeiture is always a matter of discretion, even in the case of non-payment of rent’; Baxton [page 650] v Kara [1982] 1 NSWLR 604 at 609–10; Gallic Pty Ltd v Cynayne Pty Ltd (1986) 83 FLR 31 at 35. The circumstance that a term under an agreement for lease is about to expire, or has expired, is no necessary obstacle to a court of equity exercising its discretion to grant specific performance: see Chan v

Cresdon Pty Ltd (1989) 168 CLR 242 at 254–5; S & E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 (Fed Crt, FC) at 656. It seems that the same position would apply with respect to the exercise of the general discretion to relieve against forfeiture, in equity and under statutory provisions: and see Billson v Residential Apartments Ltd [1992] 1 AC 494 at 535–6 (HL) (per Lord Templeman). The court has an inherent equitable jurisdiction to grant relief from forfeiture to sublessees (and mortgagees of leases) even after the lessor has forfeited the lease and gone into occupation, a jurisdiction not displaced by s 146(4) of the Law of Property Act 1925 (Eng) (see Property Law Act 1958 (Vic) s 146(4)); Abbey National Building Society v Maybeech Ltd [1985] Ch 190; and see United Dominions Trust Ltd v Shellpoint Trustees Ltd [1993] 4 All ER 310; [1993] 35 EG 121 (CA). This discretion has been recognised and slightly modified by the statutory provisions which are discussed below. It has been said that as a general rule equity would not relieve against forfeiture for breach of covenants other than covenants to pay rent, unless there was fraud, accident or mistake: Barrow v Isaacs [1891] 1 QB 417 at 425; Upjohn v Macfarlane [1922] 2 Ch 256. Although this view may now be regarded as being too narrow (Shiloh Spinners Ltd v Harding [1973] AC 691; Pioneer Gravel (Qld) Pty Ltd v J & T Mining Corporation Pty Ltd [1975] Qd R 151), the jurisdiction to give relief in the case of covenants other than covenants to pay rent is essentially statutory. ‘Relief from forfeiture is virtually the creature of statute’ (Bashir v Commissioner of Lands [1960] AC 44 at 61; 1 All ER 117 at 127), being conferred by s 146 of the Law of Property Act 1925 (Eng), upon which, and its predecessors, Australian legislation is based. Nevertheless, it would appear that the statutory provisions have not, in general, displaced the ‘ancient relieving jurisdiction’ of courts of equity in non-rent cases: Abbey National v Maybeech [1985] Ch 190 at 204–5 (Ch); but compare Smith v Metropolitan City Properties Ltd [1986] 1 EGLR 52 (Ch). The relevant Queensland legislation includes a provision that the ‘rights and powers conferred by this section are in addition to and not in derogation of any right to relief or power to grant relief had apart from this section’: Property Law Act 1974 s 124(7). In Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151 the Court of Appeal decided that the provisions of English s 146(9) and (10) (which correspond to the Victorian provisions) ousted any inherent equitable jurisdiction to relieve against forfeiture in the event of the bankruptcy or insolvency of the lessee on the

basis that these provisions must be regarded as comprehensive within that particular area: see Conveyancing Act 1919 (NSW) s 129(6); Property Law Act 1974 (Qld) s 124(6); Conveyancing and Law of Property Act 1884 (Tas) s 15(6); Property Law Act 1969 (WA) s 81(8)(b). The exercise of discretion by the courts under those provisions is discussed in [19.4]. The jurisdiction and practice of [page 651] equity in granting relief from forfeiture in cases of non-payment of rent is considered in [19.2] and the effect of the various state legislative provisions is briefly analysed in [19.3]. In [19.5] the terms upon which the court may grant relief are considered, and the right of the sublessee to obtain relief where the head lease has been forfeited is discussed in [19.6]. Relief against forfeiture in the sense now considered is only available in respect of tenancies. It is not available, for example, in respect of a sale, buy-back arrangement: see Athabasca Realty Co Ltd v Graves (1979) 106 DLR (3d) 473 (QB, Alberta). In relation to tenancies the inherent equitable jurisdiction is wide ranging. In Ladup Ltd v Williams & Glynn’s Bank plc [1985] 1 WLR 851 relief was granted against forfeiture of a lease for non-payment of rent to an equitable chargee although the charging order in respect of the lease conferred no interest in the lease entitling the charges to possession. Relief against forfeiture may be granted against the Crown or assignees of the Crown; but subject to the provisions of legislation, general or particular, in relation to Crown leasing: see Australian Mutual Provident Society v 400 St Kilda Road Pty Ltd [1990] VR 646 (affirmed on other grounds [1991] 2 VR 417) (Crown, but not assignees, excepted from the operation of s 146(2) of the Property Law Act 1958 (Vic) by s 146(6) of that Act); Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687 (CA) (not affected by Western Lands Act 1901 (NSW)). As to the general jurisdiction to relieve against forfeiture for disclaimer of the landlord’s title, or repudiation, see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 309–10; and see the discussion of this case at [17.21]. See also [19.4]. As to relief against forfeiture for failure to exercise an option to renew, see

[14.6] and [14.11]. Except where the tenant has repudiated the lease, in the absence of special circumstances, a landlord in opposing a tenant’s application for relief against forfeiture cannot rely on breaches of covenant which are not the subject of a notice under s 129 of the Conveyancing Act 1919 (NSW) (or equivalents): Batiste v Lenin (2002) 11 BPR 20,403; Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97311; World by Nite Pty Ltd v Michael [2004] 1 Qd R 338; and see [18.3] and [18.6]. Relief against forfeiture for non-payment of rent can also be granted to a tenant who is in possession under an agreement for a lease as distinct from a lease: Greenwood Village Pty Ltd v Tom the Cheap (WA) Pty Ltd [1976] WAR 49; Seaa Enterprises Pty Ltd v Ponti’s Enterprises Pty Ltd [1999] VSC 190. Relief against forfeiture is not available where the term of the lease has expired: Quan Hong Le v Victoria Investments and Property Pty Ltd (SC(Vic), unreported, Beach J, 9 February 1999, BC9900404) at [15]; see also Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236. Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd at [435]–[476] contains a useful summary of the principles governing applications for relief from forfeiture. [page 652]

Non-payment of rent [19.2] As has been said earlier, the court’s discretion to grant relief against forfeiture for non-payment of rent is very wide. Because the landlord’s power to re-enter or forfeit for non-payment of rent is regarded as security for the payment of rent, the court usually exercises its discretion in favour of the tenant where the arrears of rent (and costs) are paid and there is no reason to believe that the tenant will not meet his or her future obligations to pay rent: Jam Factory Pty Ltd v Sunny Paradise Pty Ltd [1989] VR 584; Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Company of New South Wales [1970] 2 BPR 9562; Stieper v Deviot Pty Ltd [1977] 2 BPR 9602 and Riddington v Pye

(1989) BPR 16,643. The Jam Factory is also authority for the proposition that, unless there are consistent lengthy defaults in payment of rent which give rise to the inference that there is a reasonable likelihood that rent will not be paid in the future, mere failure to pay rent does not constitute an exceptional circumstance upon which a court should not exercise its discretion to grant relief to the tenant: see at 591. Unless delays in payment of rent are ‘gross’, the court will usually exercise its discretion in favour of the tenant: Hace Corporation Pty Ltd v F Hannan (Properties) Pty Ltd (1995) 7 BPR 14,326. The attitude of the court is that relief against forfeiture for non-payment of rent should be refused on account of breaches of other covenants only in the most exceptional circumstances: Lo Giudice v Biviano (No 2) [1962] VR 420; Platt v Ong [1972] VR 197; 46 ALJ 591; Pioneer Gravel (Qld) Pty Ltd v T & T Mining Corporation Pty Ltd [1975] Qd R 151; and Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562, where it was held that a royalty payable under the lease should be regarded as rent. Such circumstances were held to exist in Direct Food Supplies (Vic) Pty Ltd v DLV Pty Ltd [1975] VR 358 and in Stieper v Deviot Pty Ltd (1977) 2 BPR 9602 (SC, CA, NSW). The court has even granted relief to a tenant who was in arrears of rent and whose tenancy was determined by an act of the landlord which was characterised as (or as being similar to) forfeiture: Richard Clarke Co Ltd v Widnall [1976] 1 WLR 845; 3 All ER 301. In that case, a three months’ notice was given by the landlord pursuant to the provisions of the tenancy agreement by which he was entitled to determine the lease either by re-entry or by three months’ notice if the tenant was in breach of the covenant to pay rent. It was held that whichever course the landlord adopted, there would be a forfeiture. The jurisdiction to relieve from forfeiture for non-payment of rent extends to cases where the landlord re-enters without action: Howard v Fanshawe [1895] 2 Ch 581; [1895–9] All ER Rep 855; Direct Food Supplies (Victoria) Pty Ltd v DLV Pty Ltd [1975] VR 358. Howard v Fanshawe was approved in Lovelock v Margo [1963] 2 QB 786; 2 All ER 13; or where the power to determine the lease by re-entry was not activated, but the landlord acted on an impression created by the tenant’s conduct that it was abandoning the premises, thereby raising an equitable estoppel: see Leda Commercial Properties Pty Ltd v DHK Retailers Pty Ltd (1992) 111 FLR 81 (SC, ACT); and see

[page 653] [17.7]. Although equity would grant relief at any time (Bowser v Colby (1841) 1 Hare 109 at 125; 66 ER 969 at 975–6), it now seems that equity will by analogy apply the six months’ limit which s 79 of the Supreme Court Act 1986 (Vic) imposes in a case where the lessor has proceeded by action to execution and will refuse relief to the tenant where more than six months has elapsed from re-entry (Howard v Fanshawe (Ch) at 589; Dennis & Copley v Eddie [1952] VLR 92 at 106); Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236 at [465]; see also [19.3]. Provided that the lessor and other persons interested can be put in the same position as before, the lessee is usually entitled to be relieved against the forfeiture on payment of the rent and any expenses to which the lessor has been put: Gill v Lewis [1956] 2 QB 1 at 14–16; Pioneer Quarries (Sydney) v Permanent Trustee Co; Jam Factory Pty Ltd v Sunny Paradise Pty Ltd. For instance, in Freemantle etc Association of Workers v Victor Motor Co Pty Ltd [1963] WAR 201, relief was granted notwithstanding irregular payments of rent by the tenant in the past; but in Pioneer Quarries (Sydney) v Permanent Trustee Co (1970) 2 BPR 97,145 at 9575, Hope J expressed the view that there was no authority for the proposition that a history of non-payment of rent is irrelevant to the exercise of the discretion in all cases. Nevertheless his Honour’s reference to Newbolt v Bingham (1895) 72 LT 852 indicates that the number of occasions when such a history is relevant will be rare. Relief will be refused if the lessee has been guilty of unreasonable delay in applying, particularly if the lessor has made an arrangement to re-let the premises: Stanhope v Haworth (1886) 3 TLR 34; followed in Pioneer Quarries (Sydney) v Permanent Trustee Co (1970) 2 BPR at 9574–5; and see Giuffre v City of Geelong (1992) V ConvR ¶54-438, where the premises had been re-let; see also Sharma v The Magistrates’ Court of Victoria (SC(Vic), unreported, Beach J, 18 December 1995, BC9502613) and Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd. In Direct Food Supplies (Victoria) Pty Ltd v DLV Pty Ltd [1975] VR 358 relief from forfeiture for non-payment of rent was also refused as the plaintiff was not able to make future rental payments or, if it could make such payments, they may later constitute a preference in a winding up of the company. Starke J held that in those circumstances it would

not be just and equitable to grant the relief sought. (In that case, the defendant re-entered the premises and thereafter the plaintiff issued a summons seeking relief from forfeiture.) In Stieper v Deviot Pty Ltd the New South Wales Court of Appeal upheld the decision of Needham J refusing to grant relief against forfeiture for non-payment of rent even though the lessee had paid all arrears of rents and costs. The court’s refusal was based on the conduct of the lessee in respect of the premises during its occupation of it and circumstances other than those relating to breach of covenant to pay rent. It is a factor to be considered in the exercise of the court’s discretion that the tenant has expended considerable sums of money on improving the leased premises or that the business operated from the leased premises is valuable: Simjanovksi v Maribyrnong Views Pty Ltd (2000) V ConvR ¶54-628. Where the landlord is likely to make a windfall if relief from forfeiture is not granted it ‘makes it more likely that relief against forfeiture should [page 654] be given rather than less likely’: Wynsix Hotels (Oxford St) Pty Ltd v Toomey [2004] NSWSC 236 per Young CJ in Eq at [70]. The lessee will not necessarily be disentitled to relief by agreeing after judgment to give possession: Nance v Taylor [1928] 1 KB 263; [1927] All ER Rep 184. Where relief is granted on conditions, there is power to extend the time fixed for compliance with the conditions: Chandless-Chandless v Nicholson [1942] 2 KB 321. As to an application by a mortgagee, see Belgravia Insurance Co Ltd v Meah [1964] 1 QB 436. In the case of a lease registered under Torrens legislation, relief against forfeiture may be granted notwithstanding the entry by the Registrar of a memorandum (under, for example, Real Property Act 1900 (NSW) s 55; Real Property Act 1886 (SA) s 94; Transfer of Land Act 1958 (Vic) s 70) that the lessor has re-entered: Brooker’s Colours Ltd v Sproules (1910) 10 SR (NSW) 839; but compare Hill v Short (1910) SALR 141; Laffer v Gillen (1927) 40 CLR 86; Jennings Industries Ltd v Commonwealth of Australia (1983) 69 FLR 189 at 211–5; and note the comments in S Robinson, Transfer of Land in Victoria, Law Book Co, Sydney, 1979, p 277 on the concluding words of the Victorian

section which would appear intended to preserve a lessee’s right to seek relief against forfeiture. Where the term of a lease has been assigned in breach of a covenant against assignment, an application for relief from forfeiture can only be made by the assignee of the term: Ladies Sanctuary Pty Ltd v Parramatta Property Investments Pty Ltd (1997) 7 BPR 15,156. Unless the tenant has repudiated the lease, a landlord in opposing a tenant’s application for relief against forfeiture cannot rely on breaches of covenant which are not the subject of a notice under s 129 of the Conveyancing Act 1919 (NSW) (or equivalents): Batiste v Lenin (2002) 11 BPR 20,403; Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97311 and World by Nite Pty Ltd v Michael [2004] 1 Qd R 338; see [18.3] and [18.6]; in Victoria a notice under s 146 of the Property Law Act 1958 (Vic) is required even where the tenant has repudiated the lease. This means that although a notice under this section (or equivalent) is not required (except in Queensland) where the breach is solely non-payment of rent, in the absence of special circumstances no other breaches may be relied upon by the landlord in opposition to the claim for relief: see [18.3]. In Batiste v Lenin (2002) 11 BPR 20,403 the landlord sought possession of the leased premises and the tenant sought, among other things, relief from forfeiture. The trial judge: determined that the tenant had repudiated the lease; the repudiation had been accepted; and declined to grant relief from forfeiture relying in part on breaches of covenant not referred to in the notice served under s 129 of the Conveyancing Act 1919 (NSW). The Supreme Court of New South Wales Court of Appeal upheld the trial judge’s decision. With respect to the claim for relief from forfeiture the Court at [55]– [63] said: [page 655] [55] Bryson J found that Mr Lenin had a clear right to re-enter based on Art 13 of the lease and the failure to pay rent for long periods, including any rent at all from June 2001 onwards. His right to possession was perfected by the commencement of the first cross-claim which had the same effect as an actual re-entry to terminate the lease.

A further ground for his right of re-entry was failure to pay outgoings which was admitted on the pleadings. [56] The speech of Lord Wilberforce in Shiloh Spinners Ltd v Harding [1973] AC 691 at 725–726 is most instructive. That case turned upon whether a right of entry could be validly reserved on an assignment of a leasehold property when the assignor retained no reversion. It having been held that it could there was a question of whether the Court should grant relief against the exercise of that right. Lord Wilberforce said: Failures to observe the covenants having occurred, it would be right to consider whether the assignor should be allowed to exercise his legal rights if the essentials of the bargain could be secured and if it was fair and just to prevent him from doing so. It would be necessary, as stated above, to consider the conduct of the assignee, the nature and gravity of the breach, and its relation to the value of the property which might be forfeited. Established and, in my opinion, sound principle requires that wilful breaches should not, or at least should only in exceptional cases, be relieved against, if only for the reason that the assignor should not be compelled to remain in a relation of neighbourhood with a person in deliberate breach of his obligations. In this light should relief have been granted? The respondent’s difficulty is that the Vice-Chancellor, who heard the witnesses and went into all the facts, clearly took the view that the case was not one for relief. I should be reluctant, in any event, except on clear conviction to substitute a different view of my own. But I have examined in detail the evidence given, the correspondence over a period of four years, the photographs and plans of the site. All this material establishes a case of clear and wilful breaches of more than one covenant which, if individually not serious, were certainly substantial: a case of continuous disregard by the respondent of the appellants’ rights over a period of time, coupled with a total lack of evidence as to the respondent’s ability speedily and adequately to make

good the consequences of his default, and finally a failure to show any such disproportion between the expenditure required and the value of the interest involved as to amount to a case of hardship. In my opinion the case is not, on established principles, one for relief. With that speech the other members of the House of Lords agreed. [57] The arguments against Bryson J’s refusal to grant relief turn upon two matters to which he referred. In the first place his Honour said that when he raised Hazaran’s ability to pay rent up to date, Ms Batiste’s evidence was that, for the rent from 1 January 1999 on, Hazaran could not pay the rent up to date if it had to, but possibly Provident Capital Ltd (Provident Capital), a company of substance, which was described as the ‘funder for the property’, could. This was not accompanied by any evidence of willingness by the finance company to make the necessary advances. As to the rent for the period up to 1 January 1999, Ms Batiste said that if the Court decided that Hazaran was not entitled to a rent holiday, Provident Capital would pay the rent. From this his Honour understood, correctly I would have thought, that Hazaran could not pay that rent [page 656] except with finance from its funder. Bryson J found that the plaintiffs had not shown, in a clear way, whether Provident Capital had given any commitment to fund the arrears of rent and the first two years rent if the need arose. He went on to refer to breaches of covenant which extended far beyond failures to pay money and the plaintiffs’ failure to express any readiness to comply with the covenant relating to the fire stairs. To my mind, particularly in a case with a history of nonpayment of rent such as was revealed here, it was well open to Bryson J in his discretion to refuse relief. [58] In doing so his Honour referred to the fact that there was no offer to overcome the failure to comply with the breach of covenant

requiring the performance of works. To that end, the plaintiffs’ contention was that the works covenanted were impossible. It was accepted on behalf of Mr Lenin that s 129(1) of the Conveyancing Act 1919 provides that the right of re-entry for breaches of covenant other than the non-payment of rent is not enforceable by action, except where the lessor serves on the lessee a notice in the form set out in the sixth schedule or to similar effect and the lessee fails within a reasonable time thereafter to remedy the breach or pay reasonable compensation, as the case may be. No such notices were given. Subs (8) provides that the section does not affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent. The appellants argued that as no notices had been given Bryson J should not have taken into account breaches of covenant requiring the performance of works in determining whether relief should be granted. [59] The appellants relied upon what was said by Hope J, as his Honour then was, in Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 97145 at p 9576. After referring to the judgments of members of the English Court of Appeal in Gill v Lewis [1956] 2 QB 1 at 13 and 17 Hope J said: These statements seem to me to justify the view that breaches of other covenants should generally not be taken into account if the lessor is not entitled to effect a forfeiture by reason of those breaches. Indeed, this follows from what Wigram VC said [in Bowser v Colby [1841] 1 Hare 109; 66 ER 969], for he considered that the breaches of other covenants would be relevant where they would have occasioned the forfeiture of the lease. Section 129 of the Conveyancing Act 1919, as amended, requires that the lessor give a notice complying with the section before effecting a forfeiture, and the lessee is consequently given an opportunity of remedying the breaches. Where such notice has not been given, or where it has been given but the breaches have been remedied, the lessor is not in a position to effect a forfeiture. No notice was given by the lessor in the present case so that it would seem that the breaches of the covenants other than the covenants to pay rent

and royalties should not preclude the granting of relief in the present case. [60] Hope J did not consider that this was inconsistent with the decision of A H Simpson CJ in Eq in Langley v Foster (1909) 10 SR (NSW) 54, where notices under the then equivalent legislation had been given by the lessor, and the decision of the Privy Council in Greville v Parker [1910] AC 335, which concerned the exercise of an option to renew. In two cases — Hayes v Gunbola Pty Ltd (1986) 4 BPR 97263 and Dalla Costa v Beydoun (1990) 5 BPR 11,379 — Young J agreed with and applied what Hope J said, to the effect that where there had not been a proper notice given under s 129 of the Conveyancing Act one did not take into account breaches of the lease, other than non-payment of rent, when considering relief against forfeiture. [page 657] [61] In Tutita Pty Ltd v Ryleaco Pty Ltd (1989) 4 BPR 97311 at 9638 Meagher JA, with whose judgment Priestley and Clarke JA agreed, in upholding an appeal from a decision to refuse relief against forfeiture so that the Court was required to exercise that discretion afresh, said: Before this court can adequately perform that exercise, it will be necessary to determine what, if any, effect can be given to the circumstance that the lessee was in breach of the covenant requiring it to obtain the mortgagee’s consent which undoubtedly did take place although the notice under s 129 had not specified that breach. This is a matter which is the subject of one decision by this Court viz the decision of Hope J (as he then was) in Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of New South Wales Ltd. In that case, after a careful review of the authorities, his Honour concluded that where a notice is issued specifying one breach a court cannot, unless there are special circumstances, take into account other

breaches which have not been referred to in the notice. His Honour did not decide that in no circumstance can a court take into account such other breaches, and such a conclusion would be surprising in view of the ample discretion of the court. Indeed, in some cases (for example where there have been continued and repeated breaches of covenants after the notice has been served) a court of Equity, asked to relieve against any forfeiture, would necessarily have to take into account unspecified breaches. Nevertheless, in my view his Honour in that case correctly laid down the law applicable, and in the present case I do not see any special circumstances which could enable us to take into account the lessor’s failure to obtain the mortgagee’s consent to the sub lease in question. [62] I accept, as this Court did in Tutita Pty Ltd v Ryleaco Pty Ltd, that the Court when asked to grant relief against forfeiture would not ordinarily take into account breaches which for want of a notice under s 129(1) did not allow a right of re-entry or forfeiture to be enforced by action. But, as Meagher JA pointed out, the Court’s discretion in considering such an application is not necessarily fettered in a case such as the present. Bryson J found that Hazaran had repudiated the lease as the result of very significant breaches of covenant. These led his Honour to the conclusion that Hazaran had evinced an intention not to comply with the terms of the lease. It would, in my opinion, be quite unjust to the lessor to ignore such breaches in considering whether to exercise the discretion to grant relief. The claim to possession was based not merely on breaches of conditions in the lease but also on the lessee’s repudiation of the lease. [63] Nor do I think that his Honour wrongly took into account the relationship between the parties as a further ground for refusing relief. To adapt the language from the passage I have quoted from the speech of Lord Wilberforce, the lessor should not be compelled to remain in a relation of neighbourhood with a lessee in deliberate breach of its obligations. In large measure that relationship was poisoned by Hazaran’s habitual and long continued lateness in paying rent to the point, as his Honour noted, of not paying it at all since the

proceedings were begun in July 2001 and making claims for contribution which were not on any reasonable view based on any obligation the lessor actually had. I am not persuaded that his Honour’s discretion in refusing relief against forfeiture miscarried particularly when the lessee’s repudiation of the lease is brought into account. It is not necessary to consider relief against forfeiture in connection with the lessor’s acceptance of the lessee’s repudiation of the lease as a separate basis for [page 658] the order for possession of the hotel; compare Progressive Mailing House Property Ltd v Tabali Property Ltd at 43 per Brennan J and see Abidogun v Frolan Health Care Ltd [2001] EWCA Civ 1821. See also Re Hi-Fi Sydney Pty Ltd (Admin Apptd) [2015] NSWSC 1312 where Brereton J observed: [27] The considerations applicable on an application for relief against forfeiture, at least in this general context, were summarised by Keane JA (as his Honour then was) in Ace Property Holdings Pty Ltd v Australian Postal Corporation [2011] 1 Qd R 504; [2010] QCA 55, [163], as involving the conduct of the applicant for relief, including whether the default was inadvertent or wilful; the gravity of the breaches; the damage to the covenantee or lessor; the relative loss to the covenantor or lessee; and the disparity between the value of the property forfeited and the damage caused by the breach. The basis of the jurisdiction to grant relief against forfeiture and the effect of an order for relief against forfeiture was also considered in Impact Funds Management Pty Ltd v Roy Morgan Research Ltd [2016] VSC 221 at [186]–[191] (Croft J). As to the procedure to be adopted when claiming relief against forfeiture for non-payment of rent, see Lo Giudice v Biviano (No 2) [1962] VR 420 especially at 425. Relief will not be granted where only one of two joint lessees applies for relief: see 1 M Fairclough & Sons Ltd v Berliner [1930] 1 Ch

60; Jacobs v Chaudhuri [1968] 2 QB 470; [1968] 2 All ER 124; Platt v Ong [1972] VR 197 at 197–8; Australian Retail Enterprises Pty Ltd v ND Cowan Nominees Pty Ltd [2000] VSC 538. Young J in Islam v South Sydney City Council (1998) 9 BPR 16,865 at para 12 stated obiter that the Landlord and Tenant Act 1899 (NSW) ‘shows a general legislative intention that almost as of course a tenant who is in arrears’ in payment of rent ‘may rehabilitate the lease’.

Supreme Court [19.3] The relief given by the equitable jurisdiction of the Supreme Courts of the states has been recognised and restricted by statute in some states by statutory provisions generally based on ss 210–212 of the English Common Law Procedure Act 1852: see Supreme Court Act 1970 (NSW) s 73; Landlord and Tenant Act 1899 (NSW) ss 8–10; Landlord and Tenant Act 1936 (SA) ss 4, 9; Supreme Court Civil Procedure Act 1932 (Tas) s 11(14); Supreme Court Act 1986 (Vic) ss 79, 80, 85. They are discussed briefly in Standard Pattern Co Ltd v Ivey [1962] Ch 432. Prior to the enactment of these provisions, there was no limit to the time within which application for relief had to be made, subject to the general principle that equity would give no assistance to stale claims: Hill v Barclay (1811) 34 ER 238 at 239, 240. Section 79 (Vic), while recognising the court’s discretion to grant relief, provides that every application for relief must be made within six months of the enforcement [page 659] of the judgment. The section also dispenses, in the circumstances contemplated by it, with the common law demand for rent. The corresponding provisions are in similar terms: Landlord and Tenant Act 1899 (NSW) s 8; Landlord and Tenant Act 1936 (SA) s 4; Common Law Procedure Act 1854 (Tas) s 183. In the absence of such dispensation, the lessor must, unless the lease provides to the contrary, make such a demand for rent before

he or she can re-enter for non-payment of it: Sandhurst & Northern District Trustees Executors & Agency Co Ltd v Canavan [1908] VLR 373. As to this, see also [17.19], [20.3]. The scope of operation of the former Victorian provision, Supreme Court Act 1958 s 114, was quite limited. The section applied only if the landlord ‘ha[d] right by law to re-enter for the nonpayment (of rent)’. This meant a right to re-enter and determine the lease (Doe d Darke v Bowditch (1846) 8 QB 973), where such right had been expressly given by the lease (Brewer v Eaton (1783) 3 Doug 230; 99 ER 627), in respect of the failure to pay half a year’s rent: see s 79; Doe d Dixon v Roe (1849) 7 CB 134; 137 ER 55. For the section to apply, there had to be half a year’s rent in arrears at the time of the issue of proceedings (Doe d Gretton v Roe (1847) 4 CB 576; 136 ER 633) or at least the service of the writ: Cotesworth v Spokes (1861) 10 CBNS 103; 142 ER 389. An underlease could obtain relief under Supreme Court Act 1958 (Vic) s 114 against forfeiture of the headlease for nonpayment of rent; the section referred to ‘the lessee or his assignee or other person claiming or deriving under the said lease’: similarly, Landlord and Tenant Act 1899 (NSW) s 8(3); Landlord and Tenant Act 1936 (SA) s 4(2); Supreme Court Act 1986 (Vic) s 79 (which replaces former s 114) omits these words but, read with the definition of ‘tenant’ (s 3(1)), its effect is the same. These words clearly include the sublessee, and probably a mortgagee of the lease: see Abbey National Building Society v Maybeech Ltd [1985] Ch 190; and see Escalus Properties Ltd v Robinson [1996] QB 231 at 245–7 (CA). Section 80 of the Supreme Court Act (Vic) provides that, where the lessee proceeds under s 79 for relief against forfeiture for non-payment of rent, he or she shall not be entitled to relief without paying the arrears of rent and costs: similarly, NSW s 9; SA s 5. By s 79(5) it is provided that if the tenant at any time before the hearing of the action for the recovery of land pays or tenders to the lessor or pays into court all rent and arrears together with costs, then all further proceedings in that action shall cease and be discontinued. This section operates only in respect of the proceedings referred to in s 79: similarly, NSW s 10; SA s 5. Relief from forfeiture under s 85 of the Supreme Court Act (Vic) (and its equivalents) is only available where a ‘proceeding for forfeiture’ has been commenced: s 85(1) of the Supreme Court Act (Vic); Seaa Enterprises Pty Ltd v Ponti’s Enterprises Pty Ltd [1999] VSC 29; Symmons Plains Pastoral Holdings Ltd

v Tasmanian Motor Racing Co Pty Ltd (1996) 6 Tas R 284. Thus, s 85 (and its equivalents) applies only where an application for forfeiture has been made by a landlord. The Victorian Civil and Administrative Tribunal has the same jurisdiction, including equitable jurisdiction, and powers as the Supreme Court of Victoria with respect to [page 660] applications for forfeiture and applications for relief from forfeiture: s 89(2) of the Retail Leases Act 2003. Tenants under leases caught by the dispute resolution provisions of the Retail Leases Act (Vic) should consider applying for relief from forfeiture in the Victorian Civil and Administrative Tribunal because applicant tenants cannot be required to pay the landlord’s costs as part of the price for relief from forfeiture: ss 89(3) and 92 of the Retail Leases Act (Vic) and Jacques Nominees Pty Ltd v Jam Factory No 1 Pty Ltd [2003] VCAT 176.

Statutory relief [19.4] It has been mentioned earlier that equity provided relief from forfeiture where such action was based on breach of a covenant to pay rent. Equity did not, however, as a general rule, give relief where the lessor reentered as a result of a breach of other convenants. Section 146(2) of the Property Law Act 1958 (Vic) (and its equivalents, including s 146(2) of the English Law of Property Act 1925) now gives the court jurisdiction to grant relief against such forfeiture: see Conveyancing Act 1919 (NSW) s 129(2); Property Law Act 1974 (Qld) s 124(2); Landlord and Tenant Act 1936 (SA) s 11; Conveyancing and Law of Property Act 1884 (Tas) s 15(2); Property Law Act 1969 (WA) s 81(2). Section 146(2) confers upon the court a very broad discretion, though some general principles have been laid down in the cases: see Associated British Ports v C H Bailey plc [1990] 2 AC 703 at 707–8 (HL) (per Lord Templeman), referring to the general principle laid down in Rose v

Spicer; Rose v Hyman [1911] 2 KB 234 at 241 (per Cozens-Hardy MR), and on appeal in Hyman v Rose [1912] AC 623 at 631. See also Billson v Residential Apartments Ltd [1992] 1 AC 494 (HL); and Australian Mutual Provident Society v 400 St Kilda Road Pty Ltd [1990] VR 646 at 669–70 (affirmed on other grounds [1991] 2 VR 417) where it was held that s 146(2) of the Property Law Act 1958 (Vic) applied to an assignee of the Crown but that the Crown itself was exempted from its operation by s 146(6): compare Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687 (CA) where it was held that the equitable jurisdiction to grant relief against forfeiture of an interest in a Crown lease was not affected by the Western Lands Act 1901 (NSW). As to whether s 146 applies to an agreement for a lease and to periodic tenancy, see (1960) 24 Conveyancer 125. Section 146(2) provides that when a lessor is proceeding by action or otherwise, to enforce or has enforced without the aid of the court a right of re-entry or forfeiture, the lessee may, in the lessor’s actions (if any) or in any action brought by him or herself, or upon summons, apply to the court or a judge thereof for relief and the court or judge may if it thinks fit grant relief on such terms (if any) as to costs, expenses, damages, compensation penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court or judge thinks fit. The lessor cannot be said to be ‘proceeding’ within the meaning of this subsection where he or [page 661] she has sued to judgment and has obtained possession by way of execution: Rogers v Rice [1892] 2 Ch 170; Quilter v Mapleson (1882) 9 QBD 672; Lock v Pearce [1893] 2 Ch 271; Billson v Residential Apartments Ltd [1992] 1 AC 494. It was also argued in this case that a tenant could not apply for relief against forfeiture under s 146(2) after the landlord had re-entered without obtaining a court order as the landlord was not then ‘proceeding’ to enforce rights, they had been enforced successfully. This argument was rejected. Lord Templeman (with whom the other members of the House of Lords agreed, Lord Oliver adding some further reasons on this point; see at 541–2, 543–4) said (at 540): The results of s 146 and the authorities are as follows. A tenant may

apply for appropriate declarations and for relief from forfeiture under s 146(2) after the issue of a s 146 notice but he is not prejudiced if he does not do so. A tenant cannot apply for relief after a landlord has forfeited a lease by issuing and serving a writ, has recovered judgment and has entered into possession pursuant to that judgment. If the judgment is set aside or successfully appealed the tenant will be able to apply for relief in the landlord’s action but the court in deciding whether to grant relief will take into account any consequences of the original order and repossession and the delay of the tenant. A tenant may apply for relief after a landlord has forfeited by re-entry without first obtaining a court order for that purpose but the court in deciding whether to grant relief will take into account all the circumstances including delay on the part of the tenant. Any past judicial observations which might suggest that a tenant is debarred from applying for relief after the landlord has re-entered without first obtaining a court order for that purpose are not to be so construed. Thus, the tenant may apply for relief against forfeiture under s 146(2) where the landlord is ‘proceeding’ by action or where the landlord is proceeding ‘otherwise’ than by action. See also Re Rexdale Investments Ltd and Gibson [1967] 1 OR 251 at 259 (per Laskin JA, who became the Canadian Chief Justice), referred to with approval by Lord Templeman at [1992] 1 AC 494 at 539. See also Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd [1990] Ch 237 in relation to s 146(4); and see [19.6]. But a sublessee (or mortgagee of the lease) may nevertheless obtain relief against forfeiture from the court acting in its equitable jurisdiction: see Abbey National Building Society v Maybeech Ltd [1985] Ch 190; and see Escalus Properties Ltd v Robinson [1996] QB 231 at 246–51. The tenant is in a superior position in the case of non-payment of rent; there he or she may apply within six months of the execution of judgment delivered in the landlord’s action: see Vesey v Bodkin (1830) 4 Bli NS 64; 5 ER 23; see also [19.3]. In Lock v Pearce [1893] 2 Ch 271 at 275, Esher MR said: ‘Asking for relief against forfeiture is an admission that there is a forfeiture’; see also Langley v Foster (1909) 10 SR (NSW) 54 at 62. For a short but critical discussion of these and other authorities, see the editor’s note in (1964) 38 ALJ 67. In Tooth v Coombes (1925) 42 WN (NSW) 92, and David Jones Ltd v Leventhal (1927)

27 SR (NSW) 350, it was held that a lessee-plaintiff seeking relief against forfeiture cannot set up alternatively that there has been [page 662] no forfeiture. In Hayes v Gumbola Pty Ltd (1988) NSW ConvR ¶55-375, Young J considered a lessor’s defence to a claim for relief against forfeiture. The defence contended, among other things, that relief should not be given because there was no distinct admission of facts giving rise to the forfeiture. His Honour said (at 57,458): ‘… the mere asking for relief against forfeiture constitutes an admission that there is a forfeiture …’. In Islam v South Sydney City Council (1998) 9 BPR 16,865 Young J indicated that the proposition he asserted in Hayes v Gumbola Pty Ltd was not absolute. The absolute nature of the statement made by Young J in Hayes v Gumbola Pty Ltd was also doubted by Austin J in Kumaragamage v Rallis [2001] NSWSC 466 at [11]–[20]. Whether the rule applies in the case of a lessee-defendant may be questioned. A lessee might choose to rely on Mitchison v Thomson (1883) 1 Cab & E 72, where it was held that relief may be granted even though it has not been claimed in the pleadings: see further Lam Kee Ying v Lam Shes Tong [1975] AC 247 at 257. In City & Westminster Properties (1934) Ltd v Mudd [1959] 1 Ch 129; [1958] 2 All ER 733, the defendant denied the breach and counterclaimed for relief against forfeiture, a course also adopted by the defendants in Lo Giudice v Biviano (No 2) [1962] VR 420. In MI Design Pty Ltd v Dunecar Pty Ltd [2000] NSWSC 996 Santow J said (at [56]) that while the asking for relief against forfeiture did constitute an admission that there was a forfeiture, the law was not so clear where the relief asked for was in the alternative. Santow J said that if he were required to decide the question he would ‘incline to the view that no forfeiture is admitted if the relief is not ultimately required’. It is submitted where a tenant bona fide disputes that it has been in breach of an obligation it should be permitted to seek relief from forfeiture if the court ultimately makes a determination adverse to it. This was the approach of Brereton J in Greek Macedonian Club Ltd v Pan Macedonian Greek Brotherhood NSW Ltd [2007] NSWSC 92 where his Honour said: [72] Relief against forfeiture is ordinarily given to a lessor whose sole

breach is non-payment of rent, where the rent has now been paid, although the matter always remains discretionary [Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562]. The burden of establishing that a forfeiture for non-payment of rent should not be relieved against, where all arrears of rent have been paid and where no interested third parties have intervened, is a very heavy one which normally involves demonstrating that, by reason of the conduct of the lessee, or otherwise, the grant of relief would be inequitable [Pioneer Quarries; Steiper v Deviot Pty Ltd (1977) 2 BPR 9602; Tutita Pty Ltd v Ryleaco Ltd (1989) NSW ConvR 55-486; Hayes v Gumbola (1986) 4 BPR 9247; Cicinave Pty Ltd v Jasco Pty Ltd (1989) 5 BPR 11,139; Hace Corp Pty Ltd v F Hannan (Properties) Pty Ltd (1995) 7 BPR 14,326, 14,329; Mineaplenty Pty Ltd v Trek31 Pty Ltd [2006] NSWSC 1203, [67]]. [73] Although it was once the case that before relief against forfeiture would be granted, the relevant breaches and if need be the forfeiture must first be admitted by the plaintiff [Langley v Foster (1909) 10 SR (NSW) 54; T Hyland Enterprises Pty Ltd v Alliance Acceptance Co Ltd (Powell J, 2 October 1984, BC8400245)], there is no reason in equity why a tenant who bona fide disputes that it has been in breach of an obligation [page 663] under a lease should be denied relief against forfeiture for that breach if it is ultimately established. This was illustrated by Helman J’s decision in World by Nite Pty Ltd v Michael [2004] 1 QdR 338, holding that where there was a genuine dispute between a landlord and tenant (in that case, as to the obligation to pay certain insurance premiums), and the tenant had undertaken to remedy its default and the landlord could be put in the same position as before forfeiture, the tenant would ordinarily be entitled to such relief. In that case, the disputed obligation to pay premiums was litigated in the proceedings for relief against forfeiture; the tenant failed on that dispute, and Helman J

concluded that since the issue was resolved adversely to the applicant, its refusal to pay the premiums was contrary to its obligations under the lease, so that the respondents were entitled to re-enter, but his Honour nonetheless granted relief against forfeiture (at 343–344): A tenant is not entitled to relief against forfeiture as a right. The Court has a discretion in the matter. The test is one of unconscionability. In a recent case in which there had been a forfeiture for non-payment of rent Barrett J put the test in this way: ‘whether, in the light of the tenant’s remedying of the default in the payment of rent, resort by the landlord to his strict legal right of re-entry would be unconscionable; or, if I may put this another way, whether the tenant has been guilty of conduct over and above the remedied default in payment of rent which is of such gravity that, even accepting that the default for which the right of re-entry is security has been satisfied, it would not be unconscionable on the landlord’s part to insist on his strict legal right’ (Tannous v Cipolla Bros Holdings Pty Ltd (2001) 10 BPR 18,563, at 18,568). ‘If arrears of rent, costs and interest are paid and the lessor can be put into the same position as before forfeiture or re-entry, the lessee will ordinarily be entitled to relief absent “very special circumstances”’: Meagher, Gummow and Lehane’s Equity Doctrines and Remedies, (4th ed, 2002), para 18-025, p 581. Those statements of principle apply mutatis mutandis to the circumstances of this case in which the default relied on is in the payment for something other than rent and about which there was a genuine dispute, but which default the tenant has undertaken to remedy. [74] In Mineaplenty, I concluded that where the tenant had disputed its liability for certain alleged arrears of rent but indicated at the outset of the hearing that if the issue were resolved adversely to it it would pay those arrears, the circumstance that it disputed liability and whether there was any breach did not deprive it of a claim for relief against forfeiture, at least so long as the dispute was bona fide [Mineaplenty, [70]]. In World by Nite, Helman J granted relief against forfeiture on

conditions, which included payment of the outstanding insurance premium. Ultimately, the applicant’s counsel informed the court that it could not pay the amount of the outstanding premium, whereupon the application was dismissed and an order for possession made. An order for discovery may be made in a counter-claim under s 146(2): Mascherpa v Direck Ltd [1960] 1 WLR 447. Section 146 does not apply to forfeiture arising, not under any proviso or stipulation in the lease, but by operation of law: Warner v Sampson (No 2) [1958] 1 All ER 314, where forfeiture occurred by reason of the lessee’s denial of the lessor’s title; but see W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 at 309 (T R A Morison QC sitting as a Deputy Judge of the High Court) where it was said, with respect to statutory relief, that: ‘A tenant who repudiated the tenancy relationship by disclaimer and then sought [page 664] relief would be in no different position from a tenant who repudiated the relationship by breach of the other conditions. No doubt relief would only be granted provided that the landlord’s position had not been irrevocably damaged by the disclaimer; in appropriate cases it might be proper to grant an injunction to restrain any further such conduct or impose a penalty’; and see [17.21] (disclaimer) and [16.26] (repudiation). The circumstances in which relief against forfeiture for breaches of covenant other than the one to pay rent may be granted were discussed by Gillard J in Platt v Ong [1972] VR 197 at 199–200; and see Pioneer Quarries (Sydney) Pty Ltd v Permanent Trustee Co of NSW Ltd (1970) 2 BPR 9562 (SC, NSW) at 9574–8. Where the personal qualifications of a tenant are of importance for the preservation of the value or character of the property, those qualifications are a legitimate consideration for the court to take into account in determining whether to exercise its discretion to grant relief against forfeiture. In certain circumstances the failure by the tenant to pay debts properly incurred to traders may give proper grounds for the landlord forfeiting the lease and in the court refusing to grant relief from forfeiture: Earl Bathurst v Fine [1974] 2 All ER 1160; [1974] 1 WLR 905. The court refused relief where the lessees committed grave

breaches of covenant to repair and were insolvent, one being in prison, and the landlord was well advanced in registrations to dispose of the premises: Tryfonos v D Landau & Son (1961) 181 EG 405; [1962] LMD 3225. On the other hand, a court has held that depending on the circumstances of the case, relief against forfeiture may be granted where the tenant unlawfully kept a brothel in breach of covenant: Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 at 1052–3. Where the mortgagee brings an action for recovery of mortgaged land after the ‘term’ of the mortgage has expired, he or she is not seeking to exercise a right of re-entry or forfeiture under any proviso or stipulation in the lease for breach of covenant or condition in the lease. The right of the mortgagee to possession flows not from a breach by the mortgagor of his or her obligation under the mortgage, but from the termination of the tenancy by effluxion of time. Therefore, the mortgagor is not entitled to relief. The situation may be different if interest were paid in advance and a new tenancy created: Gunnion v Ardex Acceptance Pty Ltd [1968] VR 547. Relief against forfeiture will not be granted, even for non-payment of rent, to the prejudice of an innocent third party: see Giuffre v City of Geelong (1992) V ConvR ¶54-438, where the premises had been re-let; and see [19.2]. The court will grant relief from forfeiture where a landlord exercises a right external to the lease that causes an event of default under the lease which entitles the landlord to re-enter the premises: Wynsix Hotels (Oxford St) Pty Ltd v Toomey [2004] NSWSC 236. In Wynsix the landlord, pursuant to a mortgage, appointed a receiver and manager over the tenant’s assets; the appointment constituted an event of default under the lease that entitled the landlord to re-enter the premises. Young CJ in Eq [page 665] held at [60] that the purpose of the clause in the lease that defined the appointment of a receiver as an event of default was to ‘protect the landlord against a situation where the company is in dire financial straits because of external matters and not to confer some right on the landlord to terminate the lease at whim’.

The effect of relief being granted under s 146(2) is to restore the original lease as if there had been no forfeiture (Chelsea Estates Investment Trust Co Ltd v Marche [1955] Ch 328) and to automatically reinstate all derivative interests: Dendy v Evans [1910] 1 KB 263; and see Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd [1990] Ch 237 at 250 where this position is contrasted with the effect of an order under s 146(4) for relief against forfeiture in favour of a sublessee; see also Cadogan v Dimovic [1984] 1 WLR 609 (CA) and Escalus Properties Ltd v Robinson [1996] QB 231 at 247–8 (CA). In Escalus Properties Nourse LJ (with whom the other members of the court agreed), referring to s 146(11) of the 1925 English Act which provides that the section does not, save as otherwise mentioned, affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent (which has equivalents in all states except Queensland: see [18.3]), said (at 247): The effect of sub-s (11) is to exclude from sub-s (2) proceedings based only on non-payment of rent. Subsection (4), on the other hand, expressly includes such proceedings, thus giving effect to the decision of this court in Gray v Bonsall [1904] 1 KB 601. Nourse LJ then turned to the question whether a sublessee was entitled to apply for and obtain relief under s 146(2), as an alternative to a sublessee’s right to relief under s 146(4). His Lordship reviewed the legislative history of these provisions and concluded that relief was available to a sublessee under either provision: see 247–51. The position of sublessees is discussed in [19.6]. In equity, where the tenant’s default is wilful, relief from forfeiture will usually be granted only in exceptional cases: Shiloh Spinners Ltd v Harding [1973] AC 691 at 723–4. This principle is not authority for the basis of exercise of discretion in cases where relief from forfeiture is sought pursuant to a statutory provision, although the wilfulness of the breach is something to be taken into account in determining whether or not relief ought to be granted: Ladies Sanctuary Pty Ltd v Parrammatta Property Investments Ltd (1997) 7 BPR 15,156 at 15,161. In cases of applications for relief from forfeiture for non-payment of rent, equity by analogy applies the six months’ limit which s 79 of the Supreme Court Act 1986 (Vic) imposes in a case where the lessor has proceeded by action to execution and will refuse relief to the tenant where more than six

months has elapsed from re-entry: see [19.2]. It was held in Beamer Pty Ltd v Star Lodge Supported Residential Services Pty Ltd [2005] VSC 236 at [465] that there was no reason why equity by analogy should not also apply the six month limit in cases of forfeiture for breaches other than non-payment of rent. [page 666]

Term of relief [19.5] The court has absolute discretion to grant or to refuse relief: Scott v Matthew Brown & Co (1884) 51 LT 746; Hyman v Rose [1912] AC 623; [1911– 13] All ER Rep 238; Egerton v Esplanade Hotels London Ltd [1947] 2 All ER 88; Lehrer v Gandali [1970] 1 NSWR 9; 91 WN (NSW) 891 at 896; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048; Australian Mutual Provident Society v 400 St Kilda Road Pty Ltd [1990] VR 646 at 668–9 (affirmed on other grounds [1991] 2 VR 417). The effect of an order granting relief is to restore the lease as if it had never been forfeited: Dendy v Evans [1910] 1 KB 263; [1908–10] All ER Rep 589; Re Automotive & General Industries Ltd’s Lease (No 2) (SC(Vic), Adam J, 6 November 1970, unreported); Meadows v Clerical, Medical and General Life Assurance Society [1981] Ch 70; Official Custodian for Charities v Mackey [1985] Ch 168; but compare Bass Holdings Ltd v Morton Music Ltd [1988] 1 Ch 493. The terms upon which relief will be granted must vary according to circumstances: Bridge v Quick (1892) 61 LJQB 375. Relief against forfeiture for non-payment of rent may be made conditionally upon the undertaking of the tenant to perform any other covenants of which the tenant was in breach at the time of re-entry: Jam Factory Pty Ltd v Sunny Paradise Pty Ltd [1989] VR 584 at 591; compare Public Trustee v Westbrook [1965] 1 WLR 1160 at 1163 and Platt v Ong [1972] VR 197 at 200–1. As to the form of order that may be appropriate on the granting of such relief, see Janos v Chama Motors Pty Ltd [2011] NSWCA 238 at [6] and [7] (Young JA). On the question whether such relief against forfeiture may be granted where only one of two joint lessees applies for such relief, see Platt v Ong;

Jacobs v Chaudhuri [1968] 2 KB 470; [1968] 2 All ER 124; I M Fairclough & Sons Ltd v Berliner [1930] 1 Ch 60; Australian Retail Enterprises Pty Ltd v N D Cowan Nominees Pty Ltd [2000] VSC 538. The court will not necessarily insist on immediate rectification of the breach: Duke of Westminster v Swinton [1948] 1 KB 524. Prima facie, one of the terms imposed should be the payment of all costs: Langley v Foster (1909) 10 SR (NSW) 54. In Rose v Spicer [1911] 2 KB 234 at 241, Cozens-Hardy MR said: I am aware of the danger of defining the mode in which discretionary powers of this nature ought to be exercised. Yet I think it expedient to attempt to lay down some general principles. In the first place, the applicant must, so far as possible, remedy the breaches alleged in the notice and pay reasonable compensation for the breaches which cannot be remedied. In the second place, if the breach is of a negative covenant, such as not to carry on a particular business on the demised premises, the applicant must undertake to observe the covenant in future, or at least must not allow his intention to repeat the breach complained of. In the third place, if the act complained of, though not a breach of a negative covenant, is of such a nature that the court would have restrained it during the currency of the lease on the ground of waste, the applicant must undertake to make good the waste if it be possible to do so. In the fourth place, if the act complained of does not fall under either the second or the third head, but is one in [page 667] respect of which damages, other than nominal, might be recovered in an action on the covenant, the applicant must undertake not to repeat the wrongful act or to be guilty of a continuing breach. In short, subject only to the maxim de minimis, the applicant must come into court with clean hands, and ought not to be relieved if he avows an intention to continue or to repeat the breach of covenant. In the same case in the House of Lords, sub nom Hyman v Rose [1912] AC

623; [1911–13] All ER Rep 238, Earl Loreburn LC said ((AC) at 631): I desire in the first instance to point out that the discretion given by the section is very wide. The court is to consider all the circumstances and the conduct of the parties. Now it seems to me that when the Act is so expressed to provide a wide discretion, meaning, no doubt, to prevent one man from forfeiting what in fair dealing belongs to someone else, by taking advantage of a breach from which he is not commensurately and irreparably damaged, it is not advisable to lay down any rigid rules for guiding that discretion. I do not doubt that the rules enunciated by the Master of the Rolls in the present case are useful maxims in general, and that in general they reflect the point of view from which judges would regard an application for relief. But I think it ought to be distinctly understood that there may be cases in which any or all of them may be disregarded. If it were otherwise the free discretion given by the statute would be fettered by limitations which have nowhere been enacted. The nature of the discretion was considered more recently by Burt CJ in Love v Gemma Nominees Pty Ltd (1983) ANZ ConvR 68 at 69–70: The jurisdiction to relieve against forfeiture of a lease upon a breach by the tenant of a covenant which in the terms of the lease works a forfeiture is undoubtedly discretionary. This is so whether the jurisdiction is based upon the statute or upon the ordinary law and practice of the Courts of Equity. The discretion is sometimes said to be unfettered. That cannot be taken literally. It is a jurisdiction which must be exercised judicially and this at least means that in the exercise of it one must have regard to the purpose to be achieved by it and one cannot have regard to matters which are foreign to that purpose. The purpose can only be expressed in general terms as by saying that it is to be exercised ‘to prevent one man from forfeiting what in fair dealing belongs to someone else, by taking advantage of a breach from which he is not commensurately and irreparably damaged.’ See Hyman v Rose (1912) AC 623 at 631 per Lord Loreburn LC. His Lordship was there speaking of a statutory jurisdiction similar to that conferred upon this Court by s 81(2) of the Property Law Act 1969 [WA] but the statement

is, I think, equally true of the equitable jurisdiction. It is not the purpose of the jurisdiction ‘to relieve against men’s bargains’. Shiloh Spinners Ltd v Harding [1973] 2 WLR 28 at 38, per Lord Wilberforce. On the contrary, the general rule is that ‘contractual promises should be observed and contractual rights respected’. Lord Simon of Glaisdale in Shiloh Spinners, at 41 of the report. To obtain relief a person seeking it must show that relief is ‘appropriate’ and that ‘involves consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity of the value of the property of which forfeiture is claimed as compared with the damage caused by the breach’. Shiloh Spinners, supra, at 38 of the report, per Lord Wilberforce. And there may, no doubt, be other considerations and no one consideration can be decisive. Hyman v Rose at 631 per Lord Loreburn LC. [page 668] Where relief has been granted upon condition of repairs being done in a certain time, the court may enlarge the time upon motion, and upon good cause shown: Gaze v London Drapery Stores (1900) 44 Sol Jo 722; ChandlessChandless v Nicholson [1942] 2 KB 321; 2 All ER 315; Starside Properties Ltd v Mustapha [1974] 1 WLR 816; [1974] 2 All ER 567. Where the court grants relief conditionally on the lessee performing certain acts, and after part performance the lessee fails to perform the remainder, the court cannot compel performance and the order for relief must be treated as abandoned: Talbot v Blindell [1908] 2 KB 114. The circumstances in which relief against forfeiture for breaches of covenant other than the one to pay rent may be granted were discussed by Gillard J in Platt v Ong [1972] VR 197 at 199–201. Matters relevant to the exercise of the discretion to grant relief, and the terms upon which relief should be granted, were also considered by Adam J in Re Automotive & General Industries Ltd’s Lease (SC(Vic), 1 May 1970, unreported). The order made in this case is thought to be open to the respectful observation that the terms imposed altered the bargain between the parties by providing that the lessor’s approval or permission in relation to two of the

covenants should not be unreasonably withheld, so as to put a lessee who was in breach of his or her covenant and ‘in mercy’ into a better position than that which he or she had occupied before the breaches, see also Platt v Ong. The order granting relief effaces the forfeiture: Re Automotive & General Industries Ltd’s Lease (No 2). Whether the court can vary the terms originally imposed in granting relief was left open in the case last cited. A tenant may in appropriate circumstances obtain an injunction to protect an equity against forfeiture; however, a court will not usually grant an injunction to protect an equity against forfeiture in the absence of an undertaking to pay all arrears in rent including the rent for any period in which the tenant has been excluded from possession by reason of the landlord’s re-entry: Solowave Pty Ltd v Nechi Holdings Pty Ltd [2005] NSWSC 837; McGregor v Henry [2006] NSWSC 368 at [66]; Kyriacou v Manakis [2006] NSWSC 804. In Melksham v Archerfield Airport Corporation [2004] ANZ ConvR 363 relief against forfeiture was granted to a lessee that purported to sub-lease the demised premises in breach of a covenant precluding subleasing without the landlord’s consent. While the terms of the conditions imposed by the court on the lessee do not appear in the judgment, Holmes J stated that he would impose conditions that at a minimum required the applicant for relief to do what was required to obtain the landlord’s consent to the sublease. His Honour said that it may be necessary to ‘factor in the possibility of further relief being sought against any unreasonable withholding of consent, and to require that if such consent is not ultimately forthcoming, the applicants retake possession of the premises from the second respondent [the purported sublessee]’. [page 669]

Sublessees [19.6] Forfeiture of a lease avoids all underleases: Great Western Railway Co v Smith (1876) 2 Ch D 235 at 253: see also Serjeant v Nash Field & Co [1903] 2 KB 304 (CA); considered in Carbone v Zecevich [1954] SASR 296 (and applied

in NGL Properties Pty Ltd v Harlington Pty Ltd [1979] VR 92); as to the effect of the issue of a writ, see [17.12]. As to the effect of determination of the lead lease on subleases generally, see [16.3]. By s 146(4), a subtenant may apply for relief against the forfeiture of the head lease, whether the forfeiture be for nonpayment of rent or for breach of any other covenant: see Conveyancing Act 1919 (NSW) s 130; Property Law Act 1974 (Qld) s 125; Conveyancing and Law of Property Act 1884 (Tas) s 15(3); Property Law Act 1969 (WA) s 81(4). Whereas an order under s 146(2) restores the original lease and derivative interests as if there had been no forfeiture (see [19.4]) the grant of relief to a sublessee under a provision such as these creates a new lease from the date of the court’s order: see Chelsea Estates Investment Trust Co Ltd v Marche [1955] Ch 328; Cadogan v Dimovic [1984] 1 WLR 609 (CA) (and the judgment of Scott J [1985] Ch 168 at 180–8); and Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd [1990] Ch 237 at 250 and at 252–3 where Warner J, having reviewed the authorities and legislative history of s 146(4), said it was clear that, when the subsection was re-enacted in the Law of Property Act 1925, parliament did not intend that an order vesting a new lease in a former sublessee would automatically reinstate all derivative interests under the former sublease. See also Escalus Properties Ltd v Robinson [1996] QB 231 at 247–8 (CA) (per Nourse LJ). The term ‘underlessee’ includes a legal mortgagee or a chargee by way of legal mortgage: Gray v Bonsall [1904] 1 KB 601; Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151; Abbey National Building Society v Maybeech Ltd [1985] Ch 190; Official Custodian for Charities v Mackey [1985] Ch 168; Escalus Properties Ltd v Robinson at [1996] QB 247–8; and see s 146(5)(e). Under the 1925 equivalent English provision and its predecessors the underlessee, or a person claiming through him or her, is obliged to apply for relief before reentry by the lessor (see Rogers v Rice [1892] 2 Ch 170; Egerton v Jones [1939] 2 KB 702, 707; compare Abbey National Building Society v Maybeech Ltd in relation to the grant of relief under the equitable jurisdiction after the judgment had been executed and the lessor had taken possession) but the same provision in Victoria has been modified to allow application after a right of reentry or forfeiture has been enforced. Section 146(4) applies where the lessor is proceeding to enforce a right of re-entry or forfeiture by peaceable entry: Re Riggs; Ex parte Lovell [1901] 2 KB 16; and see Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd at [1990] Ch 237 at 258–61;

which is consistent with the House of Lords’ decision in Billson v Residential Apartments Ltd [1992] 1 AC 494 on the application of s 146(2) in a similar respect; see [19.4]. But s 146(4) applies only where the head lessor is proceeding to enforce a right of re-entry or forfeiture under a covenant proviso or stipulation in the head lease: Cannon Enterprises Ltd v Ranchhold [1975] [page 670] 2 NZLR 57. The lessor is, in general, under no obligation to give notice to subtenants, mortgagees of the lease or others having any interest in the lease: Egerton v Jones; see also Grangeside Properties Ltd v Collingwoods Securities Ltd [1964] 1 WLR 139; Chelsea Estate Investment Trust Co Ltd v Marche; and Abbey National Building Society v Maybeech Ltd [1985] Ch 190 at 198–9. As with other applications of the court’s jurisdiction to relieve against forfeiture, the jurisdiction is very wide and regard will be had to the circumstances of each particular case: Egerton v Jones; Westminster (Duke of) v Swinton [1948] 1 KB 524; Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd; and see [19.1]–[19.3]. A sublessee may not, however, obtain a lease for a longer term than under the original sublease (Factors (Sundries) Ltd v Miller [1952] 2 All ER 630; Cadogan v Dimovic) nor may a term be obtained extending beyond the expiry date of the head lease: Cannon Enterprises Ltd v Ranchhold; and see Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd. The terms upon which relief may be granted to a subtenant under s 146(4) were considered in Chatham Empire Theatre (1955) Ltd v Ultrans [1961] 1 WLR 817. The decision proceeded on the basis that the subsection confers on the court ‘the widest possible discretion as to the terms on which relief should be granted’ and that, in general, the landlord is entitled to be put back in the same position as he or she was in before the forfeiture: see at 820. In the Chatham Empire case the further question arose, namely: ‘… when a sub-lessee of a part of the premises is claiming relief against forfeiture: is the landlord entitled to be put back in the same position as he was in before the forfeiture qua the whole of the premises in the head lease or only in respect of the premises of which the sub-lessee is in possession?’ (at

820). In this case it was held that the landlords were only so entitled qua that part of the premises sublet, so the subtenants were ordered to pay only that part of the arrears of rent attributable to their property. However, it was stressed that each case must be considered on its own facts and that there may be circumstances where it would impose great hardship on a landlord to grant relief other than on the basis that all arrears payable under the head lease were paid by the subtenant seeking relief; the reference to London Bridge Buildings Co v Thomson (1903) 89 LT 50 (at [1961] 2 All ER 383) serves to emphasise the point. In general the court will grant relief to a subtenant on payment of rent in arrears and performance of the covenants under the head lease, and costs (Chatham Empire Theatre (1955) Ltd v Ultrans; Belgravia Insurance Co Ltd v Meah [1964] 1 QB 436; Grangeside Properties Ltd v Collingwoods Securities Ltd [1964] 1 WLR 139; Public Trustee v Westbrook [1965] 1 WLR 1160), including the costs of the inquiry necessary to determine the new rent: Ewart v Fryer (1902) 86 LT 676; see also Abbey National Building Society v Maybeech Ltd, Halsbury, 4th ed, vol 27, para 443 notes that a frequent order is: ‘… that the premises should vest in the underlessee for the residue of the term of the underlease upon his executing a deed of covenant to pay the rent and perform the covenants of the head lease during that residue’. Authority to order the execution of a deed of covenant is conferred by the subsection; see also Official Custodian for Charities [page 671] v Mackey [1985] Ch 168 at 184–7. The subtenant will normally be required to enter into covenants in all respects the same, or at least as stringent, as those contained in the head lease: Creery v Summersell and Flowerdew & Co Ltd [1949] Ch 751 at 767. In Cadogan v Dimovic the Court of Appeal rejected an argument that an order under s 146(4) was a restoration of the ‘old’ tenancy and therefore that an order under this provision could be made with retrospective effect. Referring to s 146(4), Fox LJ said ([1984] 1 WLR 609 at 613–4): It is evident from these provisions that the new sublease is not merely a restoration of the old one. It is a new grant. The parties, the term and

the other provisions may be different from those of the forfeited sublease … The new lease is therefore a quite distinct piece of property from the old, and in this respect the position of a sublessee is different from that of a lessee under s 146(2) of the 1925 Act. It is settled law that a lease, as a grant, takes effect only from the date of delivery (see Roberts v Church Comrs for England [1972] 1 QB 278 at 282, 285; [1971] 3 All ER 703 at 704, 707 per Russell and Stamp LJJ). If, for example, a lease of 1 January 1984 is expressed to grant a term of years from 30 June 1983, the document is inoperative to create any term in respect of the period prior to 1 January 1984. Robert Goff LJ said ([1984] 2 All ER 168 at 173; [1984] 1 WLR 609 at 616): It is to be observed that, under s 146(4), the court’s jurisdiction, in respect of subtenancies, is not to grant relief against forfeiture (compare its jurisdiction under s 146(2)) but to grant a new lease, no doubt because one of the parties to a new lease will be a person who was not a party to the original headlease, and because the demised premises, the term of the lease and the conditions on which it is held, may also be different … I also agree that, under s 146(4), a lease cannot be granted for any longer term than the sublessee had under his original sublease … This particular aspect of Cadogan v Dimovic was applied in Official Custodian for Charities v Mackey [1985] Ch 168 (see at 183–4) with rather unsatisfactory results. In that case the effect of lack of power to make a retrospective order meant that the lessor became entitled to mesne profits from the date the forfeiture became effective until a vesting order was made in favour of the mortgagees under s 146(4): see [1985] Ch 168 at 186–7. See also Escalus Properties Ltd v Robinson [1996] QB 231 at 247–8 (CA) and following. A new lease granted to a mortgagee is subject to the mortgage as a substituted security: Chelsea Estates Investment Trust Co Ltd v Marche; see also Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd. Under this provision, the court has power to grant relief to an underlessee in a case in which it would have no power to grant relief to the lessee: Sir Roger Cholmeley’s School at Highgate (Warden, etc) v Sewell [1893] 2 QB 254; [1894] 2

QB 906 (concerning re-entry on the bankruptcy of the lessee). A subtenant is not disentitled from seeking relief by reason of the fact that there have been breaches of covenant under the sublease: Hurd v Whaley [1918] 1 KB 448. The power to grant relief to an underlessee is to be exercised with caution and sparingly: Imray v Oakshette [1897] 2 QB 218. Relief may be refused where the underlessee has been guilty of negligence: Imray v Oakshette; Matthews v Smallwood [1910] 1 Ch 777; [page 672] [1908–10] All ER Rep 536; Atkin v Rose [1923] 1 Ch 522; Creery v Summersell and Flowerdew & Co Ltd; and see Hurd v Whaley. In the case of a forfeiture of the head lease for non-payment of rent, s 116 of the Supreme Court Act 1958 (Vic) gave the subtenant the opportunity of obtaining relief against such forfeiture. That section used the words ‘the tenant or his assignee or other person claiming or deriving under the lease’ and those words plainly include underlessees: but compare, Landlord and Tenant Act 1899 (NSW) s 10; Law of Property Act 1936 (SA) s 5 which refer only to ‘the tenant or his assignee’ (the same more limited expression as is used in s 212 of the English Common Law Procedure Act 1852). The Supreme Court Act 1986 (Vic) s 79(5) (which replaces former s 116 in this respect) omits these words but, read with the definition of ‘tenant’ (s 3(1)), its effect is the same. Where there are a number of subtenants and only some of them seek relief against forfeiture of the headlease, the persons seeking relief must pay the whole of the arrears but they may compel the other sublessees to contribute: Webster v Smith (1689) 2 Vern 103; 23 ER 676. The principles on which relief may be granted and the terms imposed do not differ between procedures based on the Common Law Procedure Act 1852 (UK) and s 146(4) of the Law of Property Act: Belgravia Insurance Co Ltd v Meah. In the event of forfeiture on the bankruptcy or insolvency of the lessee subss (9) and (10) of s 146 of the Law of Property Act 1925 (UK) have been held to oust any inherent equitable jurisdiction to relieve against forfeiture: Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151. These provisions do not affect the operation of s 146(4) of that Act due to a specific provision in the Law of Property

(Amendment) Act 1929 s 1: see also Conveyancing Act 1919 (NSW) s 129(6) (e); Property Law Act 1974 (Qld) s 124(6)(e); Conveyancing and Law of Property Act 1884 (Tas) s 15(6). It appears, following the decision of the English Court of Appeal in Escalus Properties Ltd v Robinson, that a sublessee is entitled to apply for and obtain relief under s 146(2) (see [19.4]) as an alternative to the sublessee’s right to obtain relief under s 146(4). Nourse LJ (with whom the other members of the court agreed) reviewed the legislative history of these provisions and concluded that relief was available to a sublessee under either provision: see [1996] QB 231 at 247–51. Nourse LJ noted, quoting the decision of the trial judge (at 251): ‘An applicant for relief has an alternative and in some cases might prefer to proceed under sub-s (4) if he wanted a clear new lease in his own name rather than taking on the old lease’. Also, an applicant would presumably have regard to the differing effects of an order under subss (2) and (4): referred to by Nourse LJ at 247–8; and see above and [19.4]. Whether a sublessee is granted relief under subss (2) or (4) is a matter for the discretion of the judge (per Nourse LJ at 251). His Lordship’s concluding comment as to the exercise of this discretion in the circumstances of Escalus Properties was (at 251): ‘As a general point in cases of this kind, a judge might well think it inequitable that a landlord who had received a premium should receive in addition mesne profits vastly exceeding a rent whose minimal rate had been the very means of acquiring the premium’. Clearly a very broad discretion is contemplated by the court.

[page 673]

20 Notice to Quit Notice to quit [20.1] The expression ‘notice to quit’, while sometimes used to signify a notice given in the exercise of an option to determine a lease, is most commonly used of the notice which, being of the requisite period, may be given by either party to the other in order to determine a periodic tenancy without the consent of that other: Pacific Loan & Finance Pty Ltd v Litmanowicz [1960] NSWR 805; 78 WN (NSW) 459 at 462. At common law a notice to quit is not related to any default of the tenant (Dennis and Copley v Eddie [1952] VLR 92 at 103; Campbell v Payne (1953) 53 SR (NSW) 537 at 539– 40), although in the special case of prescribed (or controlled) premises the existence of one of the prescribed grounds is required by statute; see R Brooking and A Chernov, Tenancy Law and Practice, 1st ed, Butterworths, Sydney, p 467. Forfeiture, a mode of determination dependent upon the prior occurrence of some default or other act or event, is considered in Chapter 17. The term ‘notice to quit’ is usually limited to the case of a notice to determine a periodic tenancy by the giving of the appropriate period of notice, and does not refer to the exercise of the right of forfeiture: Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 at 102. Occasionally the expression ‘notice to quit’ is used to describe the step necessary to forfeit a lease; for example, there is no reason why an agreement which creates, say, a quarterly tenancy should not provide that in the event of non-payment of rent or breach of some other covenant the lessor may forfeit the lease by the giving of 24 hours’

notice to quit: see [17.1]. In such a case, the quarterly tenancy will be determinable by a quarter’s notice to quit (Gleeson v Richey [1959] VR 258), the right so to determine it being entirely independent of any default on the part of the tenant. The tenancy will also be determinable by forfeiture in the event of default, the mode whereby the forfeiture is to be effected being the giving of 24 hours’ notice to quit. The latter kind of notice is not commonly provided for. It is a notice to quit only in the sense that it is a notice requiring the tenant to quit and operating to determine the tenancy; it is not a notice to quit in the sense in which the expression is used in this chapter. [page 674] There may be a special provision in a lease (or collateral agreement) or an estoppel arising on the basis of the conduct of the lessor, which imposes additional obligations on the lessor on determination of the lease. For example, an obligation to make a substantial goodwill payment, even though the lessee was holding over on a weekly or monthly tenancy: Bonds Brewing (NSW) Ltd v Reffell Party Ice Supplies Pty Ltd (SC(NSW), Waddell CJ (in Eq), 17 August 1987, 9 September 1987, unreported). As to the effect of a notice to quit containing untruthful or misleading statements, see Rous v Mitchell [1991] 1 WLR 469. It was held that a party seeking to rely on its fraudulent conduct would not be allowed to do so, whether or not the tenant was actually deceived. As to other remedies in relation to misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth) or the State Fair Trading legislation, see Chapter 12.

Period of notice [20.2] In the case of a periodic tenancy there is not a new tenancy with the beginning of each recurring period, but a letting which continues indefinitely until determined by notice to quit: Amad v Grant (1947) 74 CLR 327 at 336; [1947] ALR 191; Gleeson v Richey [1959] VR 258 at 261. As to periodic

tenancies, see Chapter 2. At common law, the parties are free to agree upon any period of notice which they please as the period requisite to the determination of the tenancy; they may agree upon a period greater or less than that which would otherwise have been necessary: Re Threlfall; Ex parte Queen’s Benefit Building Society (1880) 16 Ch D 274 at 281–2; Land Settlement Association v Carr [1944] 1 KB 657; 2 All ER 126; Cohen v Milner [1960] VR 499 at 502–3; Gleeson v Richey at 261; Re Midland Railway Co’s Agreement [1970] 1 Ch 568; affirmed [1971] 2 WLR 625; Ninubon v Gag Pty Ltd (1998) 9 BPR 16,479. Not only may the parties agree that some period of notice other than that fixed by the law shall be the period of notice necessary to determine the tenancy; they may agree that the notices to quit to be given by the landlord and the tenant respectively shall be of unequal length: Allison v Scargall [1920] 3 KB 443; [1920] All ER Rep 172; Re Midland Railway Co’s Agreement. In the absence of agreement to the contrary, the period of notice required at common law is (with the exception of yearly tenancies and the possible exception of weekly tenancies) that which corresponds to the recurring period of the tenancy. So, to determine a quarterly tenancy the notice which must be given is a quarter: Towne v Campbell (1847) 3 CB 921; 136 ER 369; Gleeson v Richey. Similarly, the period necessary in the case of a monthly tenancy is a calendar month: Willshire v Dalton (1948) 65 WN (NSW) 54; Precious v Reedie [1924] 2 KB 149; [1924] All ER Rep 573; Amad v Grant (1947) 74 CLR 327 at 348; [1947] ALR 191; Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 73 and 91; [1951] ALR 1054. Since the period of notice required is a calendar month, the requisite period will vary according to the number of days in the month during the currency of [page 675] which the notice is served: compare McPherson v Lawless [1960] VR 363, especially at 366. The general rule is that a recurring period ends on the day of the month numerically corresponding to the date of its commencement, less one: Amad v Grant; McPherson v Lawless at 366. Notwithstanding this rule, if the tenancy begins on 31 January, the notice to quit may presumably expire on 28 February in an ordinary year, and 29 February in a leap year, that day

being regarded as the end of the recurring period in the month of February: McPherson v Lawless at 366. The period of notice necessary to determine a weekly tenancy is discussed in [20.3]. In the case of a weekly tenancy where the rent is payable calendar monthly in advance, notice appropriate to a monthly tenancy should be given: Cohen v Milner [1960] VR 499 at 503. A proviso whereby the lessor agrees not to give notice to quit except in a certain event is not bad for repugnancy: Re Midland Railway Co’s Agreement [1970] 1 Ch 568; affirmed [1971] Ch 725. But an agreement for weekly tenancy, containing a term that it shall be determinable only by the lessee, while not being void for uncertainty, is void as being repugnant to the nature of the tenancy: Centaploy Ltd v Matlodge Ltd [1974] Ch 1; [1973] 2 All ER 720; [1973] 2 WLR 832. Subject to the terms of the lease and in the absence of evidence to the contrary, the day of the month upon which rent has ‘customarily’ been paid will establish the commencement date of each period of a monthly tenancy: see Samios v Petersilka (1993) 113 FLR 63 (SC, ACT) at 65, referring to Rowston v Sydney County Council (1954) 92 CLR 605. Where a term is stated to commence on a certain date the lease commences at the beginning of that day rather than at the end of the day: Meadfield Properties Ltd v Secretary of State for the Environment [1995] 1 EGLR 39. Where a provision in a lease related to the measurement of time or the fixing of a date for an obligation, it is generally proper to look at the date from which the duration of the term was calculated rather than the date of execution: Trane (UK) Ltd v Provident Mutual Life Assurance [1995] 1 EGLR 33; [20.2].

Period of notice for weekly tenancy [20.3] It is remarkable that at the present day it is still not possible to answer with certainty the simple question of the period of notice necessary to determine a weekly tenancy. The unresolved point is whether in some circumstances less than a week’s notice will suffice. We are here concerned with the common law position. In view of the statutory provisions in most jurisdictions in relation to tenancies of dwelling houses the point will only arise in relation to business premises, where weekly tenancies are not very

common. There is a good deal of authority for the view that a week’s notice, while always (in the absence of a contrary stipulation) sufficient, is not always necessary to determine a tenancy from week to week: see Calvert v Turner [page 676] (1865) 2 WW & a’B (L) 174; Kurrle v Heide (1898) 20 ALT 171; Fitzgerald v Button (1891) 17 VLR 52; Carter v Aldous [1921] VLR 234; Mornane v All Red Carrying Co Pty Ltd [1935] VLR 341 at 346–7; Dikstein v Kanevsky [1947] VLR 216 at 224–5. A dictum in the New Zealand case of Elder v Gray (1891) 10 NZLR 107 is to the same effect. In Queen’s Club Gardens Estates Ltd v Bignell [1924] 1 KB 117 at 123–4; [1923] All ER Rep 165, Lush J said: Having regard to the vast number of weekly tenancies that have been created in the past, one would have thought that the question must often have arisen what notice to quit is necessary to determine a tenancy of that kind, and it therefore seems a little strange that the law should be in a condition of uncertainty with regard to the necessary requisites of a notice to quit in the case of a weekly tenancy. In order to ascertain what these requisites are there are two points to be considered — namely; first, what length of notice to quit must a landlord or tenant give to determine a weekly tenancy; secondly, whether the notice to quit must expire at the end of the weekly term or may expire during the currency of that term? With regard to the first point — namely, what ought the length of the notice to quit to be — several possible answers have been suggested. It has been said for instance that it should be a week’s notice, or as was once said by a very learned judge, half a week’s notice, or more than a week’s notice, or a reasonable notice. Cases are to be found in the books, some of which lay down one of these propositions and some another. Several cases have decided that a reasonable notice is all that is necessary. I cannot bring myself to accept that view. A notice to quit which was expressed to be to quit at the end of a reasonable time would clearly not be a good notice because it would not be definite or certain. Again, if a landlord or tenant gave a notice to quit on such and such a date, no

one would know whether it was a valid notice until some jury or other tribunal had found that it was in fact reasonable, because in the absence of such a finding even reasonable people might take different views as to whether it was in the circumstances a reasonable notice to quit. The tendency of modern decisions, however, has been to define a reasonable notice to quit as being a week’s notice. That, in my opinion, is the proper view. I think that the law is that in the case of weekly tenancy a week’s notice to quit is that which should be given, and I do not propose to occupy further time in discussing the question of the proper duration of the notice. In the present case the notice to quit, exclusive of the last words with which I have already dealt, was a week’s notice, and I think that, so far as its duration was concerned, it was sufficient. Precious v Reedie [1924] 2 KB 149; [1924] All ER Rep 573 is further authority for the view that a week’s notice is necessary. See also Smith v Smith (1950) 45 QJPR 49, where the notice necessary to determine a weekly tenancy was considered. The Victorian and English authorities down to Mornane v All Red Carrying Co Pty Ltd [1935] VLR 341 were discussed by Adam (later Adam J) in (1936) 1 Res Judicatae 98. More recently, in Fink v McIntosh [1946] VLR 290 at 292, and Gleeson v Richey [1959] VR 258 at 261, Lowe J and Pape J respectively have expressed the opinion that a week’s notice is necessary; and see Amad v Grant (1947) 74 CLR 327 at 348; [1947] ALR 191, to the same effect. The suggestion that at common law a weekly tenancy may be determined by less than a week’s notice would, it is thought, come as a surprise to most members of the profession. The common understanding of the profession is, it [page 677] is submitted, that a week’s notice is not only sufficient but essential: compare Mitchell v Wieriks (1975) 49 ALJR 81 at 82. As Lush J observed in the passage already cited from Queen’s Club Gardens Estates Ltd v Bignell [1924] 1 KB 117; [1923] All ER Rep 165, the rule that a reasonable notice is all that is necessary leads to uncertainty in a field where certainty is very desirable; compare the

remarks of Salter J in Newman v Slade [1926] 2 KB 328 at 329. The view of Lush J that ‘reasonable notice’ should be regarded as having been defined as a matter of law as one week’s notice has much to commend it from the point of view of convenience. Even if ‘reasonable notice’ has not as a matter of law crystallised into a week’s notice, it is perhaps unlikely that less than one week would in any circumstances be held nowadays to be reasonable notice, having regard to the arrangements that need to be made to vacate premises and reestablish in new premises. If a weekly tenant is required to pay the rent monthly in advance, a month’s notice should be given: Cohen v Milner [1960] VR 499 at 503.

Clear days unnecessary [20.4] A weekly tenancy commencing on a Saturday expires at midnight on the following Friday, and, although such a tenancy is sometimes called a ‘Saturday to Saturday tenancy’ (compare Newman v Slade [1926] 2 KB 328 at 329), the expression is misleading: Crate v Miller [1947] KB 946 at 948–9; 2 All ER 45. The question whether a notice to quit may at common law expire, not on the last day of the period, but on the following day, is considered in [20.5]. In the absence of agreement to the contrary, seven clear days’ notice is not required to put an end to a weekly tenancy: Newman v Slade [1926] 2 KB 328; Schnabel v Allard [1967] 1 QB 627; [1966] 3 All ER 816. Having regard to the common law rule that a notice to quit may expire either on the last day of a recurring period or on the following day (see [20.5]), the position at common law is as follows: in the case of a tenancy commencing on a Saturday (and hence expiring at midnight on the following Friday), the notice to quit may expire either on the Friday or on the Saturday. If a notice to quit is made to expire on the Friday, it may be served on a Friday; if it is made to expire on the Saturday, it may be served on a Saturday: Schnabel v Allard.

Notice must expire at end of period [20.5] It is now settled that at common law the notice to quit to determine a periodic tenancy must expire at the end of one of the recurring periods: see

Amad v Grant (1947) 74 CLR 327; [1947] ALR 191, following the decision of the Court of Appeal in Lemon v Lardeur [1946] 2 All ER 329; [1946] 1 KB 613; and see Samios v Petersilka (1993) 113 FLR 63 (SC, ACT). Insofar as it holds to the contrary, Mornane v All Red Carrying Co Pty Ltd [1935] VLR 341 must be considered to be over-ruled. This rule of common law is subject to an agreement to the contrary (see Soames [page 678] v Nicholson [1902] 1 KB 157; Love v Chryssoulis (1977) 16 ACTR 1; Sapphire Salon (Vic) Pty Ltd v Causeway House Pty Ltd (1989) V ConvR ¶54-333; Samios v Petersilka); and see Woodfall on Landlord and Tenant, 28th ed, vol 1, para 1-2018. The common law has been modified by statute: see the Landlord and Tenant Act 1958 (Vic) s 32(2), discussed in [20.6] (provisions repealed as from 1 September 2012 — see LL&T Comparative Table). If the rent day is changed, the day on which the recurring period of the tenancy commences may also be changed: Rowston v Sydney County Council (1954) 71 WN (NSW) 190; affirmed (1954) 92 CLR 605; and see Samios v Petersilka. The common law requirement that notice to quit expires at the end of a period of the tenancy is satisfied if the notice to quit expires either on the last day of the recurring period or on the anniversay of its commencement: Quartermaine v McCleery [1947] VLR 412; Schnabel v Allard [1967] 1 QB 627; [1966] 3 All ER 816; Commonwealth v K N Harris Pty Ltd [1965] NSWR 63; Rowston v Sydney County Council (CLR) at 611–12; Harty v Kolman [1977] 1 NSWLR 674; Samios v Petersilka; Ninubon v Gag Pty Ltd (1998) 9 BPR 16,479. In Quartermain v McCleery, Fullagar J did not feel called upon to discuss the logical basis of this rule, but it has been explained by the Court of Appeal as resting upon the view that a notice to quit on the last day of the period is construed as a notice to quit at midnight on that day, while a notice to quit on the anniversary is regarded as a notice to quit at the first moment of that day; in other words, whichever of the two types of notice is used, it is regarded as a notice requiring possession to be given at the end of the last day of the recurring period: Crate v Miller [1947] KB 946; 2 All ER 45. It is

interesting to note that this view had been anticipated in the Full Court in Story v Madders (1883) 9 VLR (L) 150 where Holroyd J said (at 152–3): I am inclined to think that a notice to quit on the last day of the term, and also one to quit on the day following, would both be good, for the purpose of meeting the difficulty of giving a notice which will fit the precise state of the facts. The tenant is entitled to hold until the last moment of the last day of his term, and, strictly, he ought to be out at the moment after his term has expired. But there is nothing unreasonable in construing the notice differently, according as it is given for the last day of the term, or for the next day. If it is given to quit on the last day, it may be considered good as requiring the tenant to quit on the last moment of that day; a notice to quit on the day following would mean that he must quit on the first moment of that day. There is in fact only a moment between the two. I think the authorities would support both kinds of notice. A different type of notice was considered in Harty v Kolman [1977] 1 NSWLR 674. The monthly tenancy commenced on 18 December 1975. On 12 October 1976 the lessor gave the lessee a notice to quit on 18 November 1976 ‘or at the expiration of the month of your tenancy which shall expire next after the expiration of one month from the service upon you of this notice’. Needham J held that a tenancy from month to month is determined by a notice to quit expiring either on the day of the month corresponding to that of the commencement of the tenancy or on the day before and, in such a case, a notice so expressed as to expire on a specified day or at the expiration [page 679] of the current month of the tenancy which shall expire next after the end of a month from service of the notice effectively terminates the tenancy. Accordingly, the notice to quit was effective to terminate the tenancy. Consistently with this explanation of the rule, it has been held that a notice to quit which in terms expires at the expiration of the anniversary of the

commencement of the recurring period is bad; see Re Appeal of Hayman (1964) 80 WN (NSW) 783 where Herron ACJ said: It was said that the tenancy was a weekly one commencing on Sunday or to expire on Monday 16 January 1961. The notice was served on Friday 26 August. The date for quitting was, therefore, midnight on Monday 25 September 1961, viz, at the expiration of 31 days after service. The argument of the appellant was that, according to the common law rule, the notice to quit was invalid as the correct time of expiry was midnight on Sunday, a result which might have been achieved by a notice to expire on Monday, but not by a notice to expire ‘at the expiration of’ Monday. This contention is supported by many authorities. Similarly, it was held by the Court of Appeal in Bathavon Rural District Council v Carlile [1958] 1 QB 461; 1 All ER 801, that, where there was a weekly tenancy commencing on Monday and ending at midnight on Sunday, a notice to quit by noon on a Monday was bad, on the ground that it was impossible to construe such a notice as requiring the tenant to quit at the first moment of the anniversary. If a weekly tenancy begins on a Monday, the weekly period expires at midnight on Sunday: Crate v Miller [1947] KB 946 at 949; 2 All ER 45. The effect of Quartermaine v McCleery [1947] VLR 412 is that a notice to quit requiring the tenant to deliver up possession on a Sunday will be good and a notice requiring the tenant to deliver up possession on a Monday will also be good. Similarly, if a monthly tenancy commences on the first day of a month, the lessor has the option of serving a notice to quit which requires the delivery of possession on the last day of a month or of serving one requiring possession to be given on the first day of a month: see further Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 73 and 91; [1951] ALR 1054; and see [20.4], [20.7].

Statutory modification [20.6] The Landlord and Tenant Act 1958 (Vic) s 32(2) (provisions repealed as from 1 September 2012 — see LL&T Comparative Table) modifies the common law by providing that, for the purpose of s 32, in the case of a

periodic tenancy, the recurring period of which does not exceed one month, a notice to quit shall not (unless otherwise expressly agreed by the parties thereto) be invalid by reason only of the fact that it expires on a day other than the day of expiry of a recurring period. This provision is not limited to dwelling houses. It is limited, however, by the use of the expression ‘for the purposes of this section’, which presumably has the effect of confining its operation to the summary proceedings to recover possession in a [page 680] magistrates’ court. With the greater frequency of actions for the recovery of land in the Supreme Court, the common law rule has become of increasing importance; it is a rule which is thought to be not infrequently overlooked in practice. In the New South Wales Conveyancing Act 1919 s 127(1) provides to the effect that ‘no tenancy from year to year shall be implied by payment of rent and … if there is a tenancy and no agreement as to its duration then it shall be deemed to be a tenancy determinable by either party by one month’s notice in writing expiring at any time’: see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 26. The Property Law Act 1974 (Qld) s 129(1) and Property Law Act 1969 (WA) s 71 are the only equivalent provisions.

The ambulatory notice [20.7] Where doubt exists as to the day on which the recurring period of a periodic tenancy ends, the difficulty may be overcome by giving a notice to quit which in terms requires the tenant to quit at the end of the next complete month (or other recurring period) of the tenancy after the date of service of the notice; otherwise the notice may fail: see [20.5]; and Samios v Petersilka (1993) 113 FLR 63 (SC, ACT) for an example of a more recent failure. The validity of an ambulatory notice of this kind is now established: Sidebotham v Holland [1895] 1 QB 378 at 389; [1891–4] All ER Rep 617 (per A L Smith LJ); Turner v York Motors Pty Ltd (1951) 85 CLR 55 at 73 and 91; [1951] ALR

1054; Addis v Burrows [1948] 1 KB 444; 1 All ER 177; Tassoni v Steve; Ex parte Steve [1956] St R Qd 72; Blumberg v Wood [1966] Qd R 457; Harty v Kolman [1977] 1 NSWLR 674; see also [20.2], [20.5], [20.20]. In Harty v Kolman the lessor gave an ambulatory notice to the lessee which also required him to quit the premises on a specified date (being the anniversary of the commencement of the term). In terms, the notice required the lessee to quit ‘on 18 November 1976 or at the expiration of the month of your tenancy which shall expire next after the expiration of one month from the service upon you of this notice’. The tenancy was a monthly one which commenced on 18 December 1975. Needham J held that the notice terminated the tenancy.

Who may give notice [20.8] The position under the general law is that the proper person to give notice to quit is the legal owner of the reversion or the legal owner of the lease. To this rule there are two exceptions. In the first place, a person authorised to act as agent for the landlord or tenant in the giving of notice to quit may exercise that authority: see [20.9]. In the second place, if a tenancy by estoppel exists, either party to the relationship created by estoppel may give notice. The result is that, in the absence of a relationship of landlord and tenant by estoppel, or of agency, notice to quit given by the mere equitable owner of the reversion or the lease is bad: Stait v Fenner [1912] [page 681] 2 Ch 504; [1911–13] All ER Rep 232; Freeman v Hambrook [1947] VLR 70; Thompson v McCullough [1947] KB 447; 1 All ER 265; Stratford v Syrett [1958] 1 QB 107; [1957] 3 All ER 363; Gilshenan v Hancox; Ex parte Hancox [1958] Qd R 111. Where a tenancy by estoppel exists, the equitable owner of the reversion may give notice to quit; he or she may in addition, once the notice to quit has expired, avail him or herself of the summary proceedings to recover possession in a magistrates’ court, for the expression ‘reversion’ in the

definition of ‘landlord’ contained in the Landlord and Tenant Act 1958 (Vic) s 29 (provisions repealed as from 1 September 2012 — see LL&T Comparative Table) includes an equitable reversion: Goldberg v Kolt [1932] VLR 342; Freeman v Hambrook [1947] VLR 70 at 77. The practical importance of the rule now under consideration is chiefly in relation to notices to quit given by persons who are purchasing premises, but who have not yet become the legal owners of the premises. It was Freeman v Hambrook which served as a reminder of the need to establish a tenancy by estoppel before a mere equitable owner of the reversion could give notice to quit. That was an action for recovery of possession brought against a person who was in possession as tenant of the vendor at the time of the contract of sale. The plaintiff was the purchaser, and he had given notice to quit to the defendant at a time when he was the equitable, but not the legal, owner of the premises, in as much as the transfer signed by the vendor had not been registered at the Titles Office or even lodged for registration. Although the plaintiff received the rent, which the defendant paid to the same agent as had acted for the original owner, the defendant was not aware, prior to receiving the notice to quit, that the plaintiff was the owner of the premises. It was held that, as the plaintiff was merely the equitable owner and not the legal owner of the reversion, and as no relationship of landlord and tenant by estoppel or otherwise existed between the plaintiff and the defendant, the plaintiff was not entitled to give notice to quit, and his action failed. The pitfall of Freeman v Hambrook may be overcome if the purchaser, upon becoming entitled to the rents and profits, notifies the tenant that he or she is the new owner and directs that the rent in future be paid to the purchaser or his or her agent; when, by the payment of rent or other acknowledgment, the tenant has attorned to the new owner, the latter, even though still only the equitable owner, is entitled to give notice to quit. See [1.14] as to tenancies by attornment. The payment of rent to a person who has not let the tenant into possession does no more than raise a prima facie case of estoppel, which is not conclusive if the tenant can explain away the payment, for example, by showing that he or she made it in ignorance of the true state of the title; but it is not sufficient for the tenant in such a case merely to show that the person to whom he or she paid the rent had no title; he or she must go on and show that some third person is the real assignee of the reversion — a persona

designata, who, if he or she were to bring ejectment, would be entitled to eject the tenant (Washington Motors Pty Ltd v O’Halloran [1949] VLR 203); for the position where the landlord let the tenant into possession, see Metropolitan Trade Finance Co Pty Ltd v Coumbis (1973) 2 ALR 258. [page 682] Freeman v Hambrook was considered by the Supreme Court of New South Wales in Dalegrove Pty Ltd v Isles Parking Station Pty Ltd (1988) 12 NSWLR 546 in the context of the operation of the Conveyancing Act 1919 (NSW) s 117, which provides for the running of the rent and the benefit of the lessee’s covenants with the reversion (a provision based on the Law of Property Act 1925 (Eng) s 141; as to the other states, see [15.9]). The facts of the Dalegrove and Freeman cases were similar. The Maritime Services Board had granted a registered lease to Isles Parking Station Pty Ltd which contained a provision reserving the right to the Board to determine the lease on at least six months’ written notice in the event that the Board required all or part of the leased premises for its own purposes. The Board sold the freehold to Dalegrove Pty Ltd. After completion of the sale but before registration of the transfer, Dalegrove gave notice to determine the lease. At the same time a notice of attornment, signed on behalf of the Board, was given, but this was not in any way decisive in the proceedings. Bryson J considered the provisions of s 117(1), particularly noting the right to enforce covenants and conditions under its provisions are associated not with the legal estate in the land but with entitlement to income and ‘without specification of the source, whether in a legal or an equitable estate …’ (see p 6 of his Honour’s judgment, and the full text from which this passage is taken at [15.10]). Turning to the authorities his Honour said (at 550–1): The view that the Law of Property Act 1925 (UK), s 141 (and the Conveyancing and Law of Property Act 1881 (UK), s 10, before it) effected a sweeping procedural reform appears to me to be established by observations in the Divisional Court of the Kings Bench Division (Acton and Goddard JJ) in Schalit v Joseph Nadler Ltd [1933] 2 KB 79. It is true that their Lordships’ views did not avail the party claiming

entitlement to income in that case because that party was cestui que trust of a trust which was held not to be a bare trust, but a trust in which the trustee had an entitlement to administer the trust because he was personally liable to superior landlords for rent and due performance of covenants, and hence was entitled to reimburse himself out of the rent collected from the sub-tenant, so that the entitlement of the cestui que trust was an entitlement to no more than an accounting for the rent in an account in which other credits and debits might be brought into account. Their Lordships said of s 141 (at 82– 3): We think it means that a person entitled to the rent to the exclusion of all others can recover it, although, but for the section, he would not have been able to sue in his own name, but would have been obliged to use the name of a person to whom the legal estate was vested. It is a section dealing only with procedure. In my view the last sentence: ‘It is a section dealing only with procedure’ needs to be considered with care and taken with the very terms of s 141 and s 117(1); in my respectful view it is not possible that Goddard J can have intended to refer only to curial procedure; or that he can have intended to indicate that the sole operation of the provision is to give an assignee standing in litigation to enforce, as it were, the rights of some other person. (If his Lordship did so intend I would not follow his view.) I have regard to the amplitude of the expression referring to every covenant or provision being ‘… capable of being recovered, received, enforced, and taken advantage of by the person from time to time entitled … to the income …’. The references to enforcement and taking advantage [page 683] of covenants and provisions in leases appears to me to extend at least to steps such as forming intentions, making demands and giving notices

where a covenant or provision makes such an event a condition upon which rights arise or are enforceable. If such steps are to be regarded as procedural I would respectfully accept Goddard J’s observation. In the present case the facts of completion and payment and the delivery to the plaintiff of a registrable transfer conferred an equitable estate in the land on the plaintiff and left the Maritime Services Board as vendor to the plaintiff a bare trustee of its registered legal estate with no active duties. The plaintiff will have no need to invoke procedural law giving it standing to enforce the lessee’s implied covenant to yield up possession on termination as when the time comes for performance the plaintiff will have become registered proprietor and will have no need to rely on s 117 for such standing. However, the plaintiff was in my opinion entitled to take all steps preliminary to and ancillary to the enforcement of that right having regard to s 117(1). His Honour continued (at 552–3): It appears to be well established that an equitable assignee of the freehold is not entitled to give notice to quit so as to terminate a weekly or other periodic tenancy: Freeman v Hambrook [1947] VLR 70. In those situations however, it is difficult to see what operation s 117 would have as notice to quit does not represent a claim by the landlord to the benefit of a covenant contained in the lease, but operates to prevent the implication which would otherwise arise that the parties agreed to the creation of another tenancy in respect of each period for which they acted as if their relationship continued to exist. A week’s notice to quit from an equitable assignee of the freehold who had not earlier taken a part in the pattern of interacting behaviour with the tenant is not treated as having any impact on this pattern of behaviour. Once notice of the assignment is given and the assignee acts, even in the simplest way, as a party to a relationship with the tenant the question will assume other dimensions because, with the payment of rent or other interaction, evidence of a direct relation with the tenant will soon come into existence, possibly aided by statutory provisions relating to evidence of a tenancy. O’Byran J reviewed at length authorities and opinions in texts which establish firmly the necessity

that except in such circumstances a notice to quit should be given by the legal owner. However, he did notice the Property Law Act 1928 (Vic), s 141, corresponding with the Conveyancing Act, s 117, and his Honour distinguished its operation (at 77) in these words: However that may be, the section is not concerned with the right at common law, or by custom, or by statute … by notice to terminate a lease from year to year or month to month or from week to week, or other periodical tenancy which otherwise continues from period to period. Such a termination of a lease is not brought about by the exercise of the condition of forfeiture or re-entry with which this section is concerned. Bryson J concluded that s 117 authorised Dalegrove to give the notice after completion of the purchase but before registration of the transfer. The approach in the Dalegrove case has much to commend it and avoids the need to resort to somewhat artificial devices to overcome the rule applied in the Freeman case. Section 117 and equivalent provisions are considered further at [15.10] in the context of the authorities, including Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd R 1, to which reference should be made. [page 684] The giving of notice to quit in the case of co-owners is considered in [5.15]; contrast the position with ‘break’ notices: see Hounslow London Borough Council v Pilling [1994] 1 All ER 432 (CA); and Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478; both referred to at [5.15]; see also Crawley BC v Ure [1996] QB 13. Notices to quit given by agents, by personal representatives or trustees, and by corporations are considered in [20.9], [20.10] and [20.11] respectively. A concurrent lease interposes the concurrent lessee between the existing lessor and lessee, the concurrent lessee becoming the landlord of the existing lessee: Buckby v Speed [1959] Qd R 30. Thus, it is the concurrent lessee who is the proper person to determine the existing lease, for example, by giving notice to quit (Stewart v Goldman & Co Pty Ltd (1947) 64 WN (NSW) 155):

see further [1.9] as to the effect of a concurrent lease and the rights of the concurrent lessee. Where a lessor who has given notice to quit thereafter assigns the reversion the assignee is the proper person to take proceedings for recovery of possession: Anderson, Hodgson & Lithgow v Vecht [1946] VLR 458; Goddard v Precians (1948) 66 WN (NSW) 166. It appears that the death of a tenant after notice to quit does not affect its validity: Scruby v Hoggan (1954) 55 SR (NSW) 2. By the Landlord and Tenant Act 1958 s 42 (first enacted by the Statutes Amendment Act 1954), the personal representative of a deceased party to proceedings under Pt IV of that Act (summary proceedings to recover possession) may, on filing an affidavit as to representation, continue the proceedings or enforce the order. The scarcity of accommodation and the protection against eviction afforded by legislation to tenants in modern times have given rise to a tendency to regard the notice to quit as something emanating from the landlord; the ability of the tenant to give notice to quit is at times overlooked. A ‘notice to quit’ may be a notice of intention to quit the land given by the occupier of it, or it may be a notice given to him or her by the person desiring to resume possession requiring him or her to quit the land he or she occupies: Clarke v Tyler (1949) 78 CLR 646 at 651 and 653. Notice to quit by a tenant may be quite informal: see [20.14].

Notice by agent [20.9] A notice to quit may be given by the landlord or tenant personally; it may also be given by the agent of either party, provided that the necessary authority exists: Heywood v Miles [1944] VLR 155; Freeman v Hambrook [1947] VLR 70 at 74–5. Whether the necessary authority existed is a question of fact: Doe d Mann v Walters (1830) 10 B & C 626; 109 ER 583. In the case just cited, Parke J observed (at 585–6) that ‘a mere receiver of rents, as such, has no authority to determine a tenancy’; compare Doe d Rhodes v Robinson (1837) 3 Bing NC 677. In Commonwealth v K N Harris Pty Ltd [1965] NSWR 63 at 73–4 it was laid down that a solicitor instructed to recover possession has authority to sign a notice to quit. Nonetheless, it is thought that the question of authority is one of fact. A notice to quit given without the authority of the landlord cannot be validated by ratification, for a notice to quit is an act in

[page 685] defeasance of the estate of the tenant, and, in order to be valid, such a notice must be one on which the tenant can act with security from the very moment at which he or she receives it: Right d Fischer v Cuthell (1804) 5 East 491; 102 ER 1158; Doe d Mann v Walters; Re Bebington’s Tenancy [1921] 1 Ch 559; Ex parte Moriarty (1924) 24 SR (NSW) 298; Brisbane City Council v Chu Cho Far; Ex parte Chu Cho Far [1967] Qd R 568. In Love v Chryssoulis (1977) 16 ACTR 1, however, Joske J held that although it is not shown that a notice to quit has been authorised by the landlord, such a notice is effectively ratified by the landlord if he or she applies to the court for an order for possession of the demised premises and appears on the return of the application. Where notice to quit is given by an agent the fact of agency should appear in the notice, unless the agent has a general authority: Lemon v Lardeur [1946] 1 KB 613; 2 All ER 329; Harmond Properties Ltd v Gajdzis [1968] 1 WLR 1858. As to whether an agent has a general authority, the court can draw the inference in appropriate circumstances that the giver of the notice had due authority to give it as a general agent, but the circumstances must be such that the recipient can act on that notice safely, knowing that the principal will be bound: Lemmerbell Ltd v Britannia LAS Direct [1998] 3 ELGR 67. In Lemmerbell the court held that the landlord could not have acted safely upon the notice given by the agent with purported general authority and therefore the notice was not valid. In the case of a special authority, the notice need merely inform the tenant that the person giving it is acting as agent for the lessor; no further expression of authority is required: Wilson’s Laundry Pty Ltd v Patmoy [1961] NSWR 499; 78 WN (NSW) 636. The effect of a second notice to quit given by an agent where proceedings on the first notice given to him proved abortive was considered in Paget v Pearson (1949) 49 SR (NSW) 235. If the agent is a firm, the notice may be signed in the firm name: W H Tuckett & Sons v Ransom [1914] VLR 8. Provided that authority exists, notice to quit may be given by the lessor’s solicitor: Ex parte Fuller; Re Taylor (1945) 62 WN (NSW) 158. If a signed notice to quit is required, the signature may be by proxy: London County Council v Agricultural Food Products Ltd [1955] 2 QB 218; 2 All ER 229; Tennant v London County Council (1957) 55 LGR 421. The effect of an alteration to a notice to quit made by the lessor’s agent after it had

been signed by the lessor was considered in Marshall v Burman (No 2) [1961] VR 161. In Wong v Moonwalk Pty Ltd (SC(Vic), Beach J, 6 March 1996, unreported, BC9600645) a notice signed by an agent was held to be good despite the notice only referring to the agent signing for one of the two landlords. For the special case of agents of corporations, see [20.11].

Notice by personal representatives and trustees [20.10] Provided that they are the legal owners of the reversion (Freeman v Hambrook [1947] VLR 70; Henry v Humphris [1956] VLR 371 at 378), personal representatives or trustees may give notice to quit. At common law, the notice need not refer to their representative capacity: Heath v McGrath [1951] VLR 496 at 500; Henry v Humphris [page 686] at 378. The special case of notice to quit given by a personal representative or trustee in respect of prescribed premises within the meaning of the Landlord and Tenant Act 1958 (Vic) raises problems which have been considered in Kirsner v Haan [1947] VLR 119; Heath v McGrath and Henry v Humphris.

Notice by corporations [20.11] In Roe d Dean of Rochester v Pierce (1809) 2 Camp 96; 170 ER 1093, a verbal notice to quit given by the steward of a corporation was held to be good, the court rejecting the argument that a notice to quit given by or on behalf of a corporation must either be under the seal of the corporation or be given by an agent having a power of attorney under the seal of the corporation. In Wilson’s Laundry Pty Ltd v Patmoy [1961] NSWR 499; 78 WN (NSW) 636 at 638, Ferguson J had this to say: I am by no means satisfied that at common law a notice to quit given by a corporation is required to be under its common seal; but on the

assumption that it needs to be, I am of opinion that the argument is unsound. The notice to quit in the present case was not given by the company, it was given by its agent. At common law a company, like any other person, is entitled to appoint an agent to sign notices to quit on its behalf, and such agent duly appointed is in no different position, because his principal happens to be a company, from the agent of an individual. A notice to quit signed by him is just as effective as an individual. In Oliver as Agent for Women’s Hospital (Crown St) v Holliday (1951) 51 SR (NSW) 316, it was held that a resolution of the board of the hospital (a body corporate) was not essential to confer authority on the secretary or other officer to give notice to quit, although a resolution duly minuted would have supplied the best possible evidence of authority. By the Corporations Act 2001 s 127(1), a company may execute a document without a common seal if the document is signed by two officers of the company or a director and secretary of the company or, in the case of a proprietary company that has a sole director who is also the sole company secretary, by the director. From a practical point of view, in order to facilitate proof and prevent doubts from arising, the best course, where the lessor is a company and wishes to give notice to quit, is to have the notice sealed by the company, care being taken to ensure that the seal is affixed in the manner provided for by the articles of association; a resolution of the board of directors for the affixing of the seal should precede the sealing. It will often be convenient for the same resolution (or another passed at the same time) to authorise the institution in due course and prosecution of proceedings for the recovery of possession of the subject premises and the taking of any other steps which may be necessary or expedient for the recovery of possession. The giving of notice to quit to a corporation is discussed in [20.12]. [page 687]

To whom notice may be given

[20.12] Notice to quit may be given to an agent, provided that he or she has authority to receive such a notice. Where the tenant gave notice to a mere collector of rents this was held to be insufficient: Pearse v Boulter (1860) 2 F & F 133; 175 ER 993. Where the tenant is a corporation, the notice to quit should be addressed to the corporation itself, not to its officers: Doe d Carlisle v Woodman (1807) 8 East 227; 103 ER 329. In Hawtrey v Beaufront Ltd [1946] KB 280; 1 All ER 296 a notice to quit addressed to the directors of the company which was the tenant was held to be good. There the question was treated as one of construction; slight differences in wording might well lead to a different result, and the only safe course is to address a notice to quit to the corporation which is the tenant, not to its officers. A lenient view was also taken in Ex parte Palmer (1912) 12 SR (NSW) 756, where a notice to quit addressed to the secretary of a union instead of to the trustees of the union was shown to have been subsequently received by one of the trustees, and it was held that it was sufficient to show that the notice had been received by one of the joint tenants, notwithstanding the fact that it was not addressed to them. Similar clemency was shown in Allam & Co Ltd v Europa Poster Services Ltd [1968] 1 WLR 638 where a notice determining licences addressed to a named company ‘and associated companies’ was held to be good. The matter of misdescription of the tenant is further considered in [20.23]. Frequently, the notice to quit is addressed to husband and wife and it is later discovered that one of the spouses alone is the tenant. The notice to quit is good in these circumstances. See Wilbraham v Colclough [1952] 1 All ER 979 discussed in editor’s note (1952) 26 ALJ 217. In that case an order for possession was made against one person, notwithstanding that the notice to quit was addressed to and the proceedings were taken against that person and another. Service on corporations is dealt with in [20.27]; in relation to service on co-owners, see [5.15].

Verbal notices [20.13] At common law notice to quit may be verbal (Doe d Macartney v Crick (1805) 5 Esp 196; 170 ER 784; Roe d Dean of Rochester v Pierce (1809) 2 Camp 96; 170 ER 1093; W H Tuckett & Sons v Ransom [1914] VLR 8); see

too Ex parte McGrath; Re Coyle (1943) 60 WN (NSW) 145, holding that a tenancy created by oral contract may be determined by oral notice to quit. Even in these cases where the common law rule still applies, the verbal notice to quit is to be eschewed, having regard to the fallibility of memory and veracity.

Informality and want of signature [20.14] The notice may be of the most informal character: W H Tuckett & Sons v Ransom [1914] VLR 8; Kemp v Palmer (1899) 20 LR (NSW) Eq 129. At common [page 688] law it may be verbal: see [20.13]. A written notice need not be signed as long as it shows on its face that it is a notice from the landlord to the tenant: Rourke v Victorian Finance etc Co Ltd (1894) 20 VLR 8; Marshall v Burman (No 2) [1961] VR 161 at 166; Love v Chryssoulis (1977) 16 ACTR 1. The official receiver of the bankrupt estate of the tenant of a shop wrote to the landlord of the shop informing him that ‘as from the close of business on [a particular date] the business will be closed down by me. I will not accept any further liability for the rent of the premises after that date’. This constituted a notice to quit by the tenant: Reeves v Diffin (1964) 82 WN (Pt 1) (NSW) 93.

Part of demised premises excluded; extraneous premises included [20.15] The validity of a notice which referred only to a portion of the demised premises was considered in Mulcahy v Brown (1947) 64 WN (NSW) 39; Barry & Roberts Properties Ltd v Collins [1950] St R Qd 242; Woodward v Earl of Dudley [1954] 1 Ch 283; 1 All ER 559; Thompson v Cross [1954] VLR 635 at 641; and Dodson Bull Carpet Co Ltd v City of London [1975] 1 WLR

781 at 785. In Greater Union Organisation Pty Ltd v Pappas (1968) 116 CLR 457; [1968] ALR 137, Barwick CJ at 482 and Windeyer J at 499 lay down the rule that a notice to quit must extend to the whole; if given for a part only of the totality of the demised lands, it will be void. A notice is valid despite the fact that it purports to include premises not held of the lessor: Thompson v Cross at 641. It has been held, however, that where a tenant is served with a notice to quit which is wider in its ambit than the law allows, he or she is not bound, on the one hand, to observe it in its entirety or, on the other hand, to assume that it is intended to relate only to a part of the premises to which it refers and to act accordingly: Kays Holdings Pty Ltd v Nassar [1967] 1 NSWR 335; 87 WN (Pt 2) (NSW) 189. In addition to cases where the notice to quit either excludes part of the demised premises or includes premises extraneous to the demise, there are cases where the person drafting the notice to quit intends to apply his or her notice to the demised premises, but misdescribes them. Cases of this kind are discussed in [20.22]. For the position when the demise is of both prescribed and non-prescribed premises, see Russell Cowan Pty Ltd v Bussell (1956) 56 SR (NSW) 300 and Glebe Administration Board v Perpetual Trustee Co Ltd [1962] NSWR 19; 79 WN (NSW) 335.

Severance of the reversion [20.16] At common law a condition could not be apportioned unless the severance of the reversion took place by act of law: Piggott v Middlesex County Council [1909] 1 Ch 134; the position is otherwise if the reversion in part was assigned to the lessee of that part: Hyde v Warden (1877) 3 Ex D 72; see generally (1960) 24 Conveyancer 468. In Re Bebington’s Tenancy [1921] 1 Ch 559 it was held that where the tenant had not [page 689] consented to and so recognised the division of his tenancy, a notice to quit given by the assignee of part only of the reversion was a bad notice. The Property Law Act 1958 (Vic) s 140 overrules this decision: Smith v Kinsey

[1936] 3 All ER 73; see Conveyancing Act 1919 (NSW) s 119; Property Law Act 1974 (Qld) s 116; Landlord and Tenant Act 1936 (SA) s 50; Conveyancing and Law of Property Act 1884 (Tas) s 12; Property Law Act 1969 (WA) s 76. Notwithstanding this section, a severance of the reversion by conveyance does not bring two separate tenancies into being: Jelley v Buckman [1974] QB 488. Section 140 does not enable the assignee of part of the reversion in a verbal monthly tenancy to give notice to quit that part of the premises of which he or she holds the immediate reversion: Thompson v Cross [1954] VLR 635. Conveyance of part of the reversion to bare trustees has been held not to effect a severance for the purposes of s 140; the section contemplates a ‘real’ conveyance of the reversion as a matter of substance: Persey v Bazley [1983] 2 EGLR 3 (CA).

Strict or benevolent construction [20.17] The law reports abound with decisions passing upon notices to quit whose validity has been assailed on the ground of misdescription or uncertainty. Rather than turn at once to cases dealing with particular errors, it will be useful to consider the general approach of the courts to matters of this kind. Anyone concerned with a notice to quit of questionable validity who goes to the reports in search of guidance will soon discover that there are in fact two different approaches; examples will illustrate this. Notices to quit are documents of a technical nature (Hankey v Clavering [1942] 2 KB 326 at 329; 2 All ER 311) but the court may decline to adopt what it stigmatises as a technical approach: Harmond Properties Ltd v Gajdzis [1968] 1 WLR 1858 at 1864. A notice to quit must be strictly construed against the landlord (Bolton’s (House Furnishers) Ltd v Oppenheim [1959] 3 All ER 90; [1959] 1 WLR 913 at 915); yet the notice should be benevolently construed ut magis valeat quam pereat: Sunrose Ltd v Gould [1961] 3 All ER 1142; [1962] 1 WLR 20 at 23. ‘There is no doubt that … notices to quit have to be in precise terms, and a mistake (even though it is quite easy to see what the landlord intended and it may be purely a mistake in drafting) is sufficient to render a notice to quit invalid’: Bolton’s (Home Furnishers) Ltd v Oppenheim [1959] 2 All ER 473; [1959] 1 WLR 685 at 689; nonetheless, the court may overlook an obvious blunder which in no way affected the tenant: Frankland v Capslick [1959] 1

WLR 204. A notice to quit must be clear and certain and properly describe the premises to which it relates, leaving no doubt as to the intention of the party giving it and using language upon which the other party can safely act (Kays Holdings Pty Ltd v Nassar [1967] 1 NSWR 335; 87 WN (Pt 2) (NSW) 189 at 202); on the other hand, if the premises are misdescribed, but the tenant is not in any way misled by the error of the description, the notice to quit may be held to be good: Doe d Armstrong v Wilkinson (1840) 12 Ad & El 743; 113 ER 995; Carradine [page 690] Properties v Aslam [1976] 1 WLR 442. Where a notice to quit referred to a tenant’s unregistered business name rather than to the tenant, the notice may also be good: Wong v Moonwalk Pty Ltd (SC(Vic), Beach J, 6 March 1996, BC9600645). Merely to contrast dicta in this way may be misleading; it must be recognised that sensible distinctions can often be drawn between decisions which may at first sight appear to be in conflict. However, the fact remains that it is possible to extract from the authorities statements in support of two fundamentally different methods of approach to notices to quit. The first emphasises that the notice is a technical document, that it defeats an estate and that it must be clear and in such terms that the tenant can act upon it with safety. The second approach is the liberal one of construing the document if possible in a way which will give it validity, at all events in cases where the error cannot have misled the tenant. Much of the uncertainty concerning whether notices should be given a strict or benevolent construction has been removed by the decision of the House of Lords in Mannai Investment v Eagle Star Life Assurance Co Ltd [1997] AC 749. In that case the Lords had to consider the validity of notices served by a tenant that purported to terminate a fixed term tenancy. The Lords overruled Hankey v Clavering and held that the construction of the notices had to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context; that the purpose of the notices was to inform the landlord of the tenant’s decision to determine the leases in accordance

with the break clauses. Lord Steyn said (at 768): ‘… the question is simply how the reasonable recipient would have understood such a notice’; Lord Clyde said (at 782) that ‘the standard of reference is that of the reasonable man exercising his common sense in the context and in the circumstances of the particular case’. In that case the tenant had wrongly described the date of termination provided for in the lease. The Lords held that a reasonable recipient with knowledge of the terms of the leases would have been left in no doubt that the tenant wished to determine the leases on the date provided for in the lease but had wrongly described the date and that, accordingly, the notices were effective to determine the leases. While the House of Lords in Mannai Investment v Eagle Star Life Assurance Co Ltd has clarified the approach to be adopted by English courts, because of the infinite variety of human error in the preparation of notices to quit, there will always be a large area of uncertainty in determining the validity or otherwise of a notice. A notice to quit may be void for uncertainty. As to this, see Blumberg v Wood; Ex parte Blumberg [1966] Qd R 457; Ex parte Callan; Re Smith [1968] 1 NSWR 433; 87 WN (Pt 1) (NSW) 595. It is proposed now to look at some of the many decisions which are concerned with misdescription or uncertainty in notices to quit. In Sidebotham v Holland [1895] 1 QB 378 at 383; [1891–4] All ER Rep 617, Lindley LJ protested that ‘the validity [page 691] of a notice to quit ought not to turn on the splitting of a straw’. Nonetheless, an examination of the cases reveals that very fine distinctions are at times necessary in order to reconcile the seemingly irreconcilable. Generally, in relation to clerical errors in notices, see [14.8].

Misdescription of tenancy [20.18] In Gleeson v Richey [1959] VR 258, the notice to quit described the

tenancy as a quarterly tenancy. On behalf of the defendant it was argued that the tenancy was a statutory tenancy which was not upon the terms of a quarterly tenancy and that the misdescription invalidated the notice. Pape J held that the tenancy was not a statutory tenancy, but went on to say that even if the supposed mistake had been made, it was immaterial and did not and could not mislead the defendant. His Honour added that the precise point had been considered by Dixon J in Amad v Grant (1947) 74 CLR 327 at 347; [1947] ALR 191. Two years earlier, in Quinney v United Stevedoring Pty Ltd [1957] VR 484 at 489, Pape J had referred to ‘the principles in regard to notices to quit laid down by Dixon J’ in the passage in Amad v Grant to which reference has just been made. It is to be noted, however, that in Amad v Grant the document in question was not a notice to quit, but a notice of the owner’s intention to apply to a court of petty sessions, being the forerunner of the present complaint and summons; moreover, the decisions to which Dixon J referred in Amad v Grant were themselves concerned with the notice of intention to apply to justices. To make this comment is not to suggest that the approach taken in Gleeson v Richey was incorrect; as has been already said, there is ample authority for the view that a notice to quit may be valid notwithstanding some error in it which is immaterial and not such as to mislead. So far as the particular question of misdescription of the tenancy is concerned, the case of Wilson v Halton [1945] VLR 180 should also be considered. There the notice to quit described the tenancy as a weekly tenancy; it required the delivery up of possession on a specified date (about seven weeks after the date of service) ‘or on such other day thereafter as the then current week determines’. It was argued for the tenant that the notice to quit was bad, in that the tenancy was a monthly one. Herring CJ rejected this contention, holding that the tenancy was from week to week: [1945] VLR 180 at 184–5. It might be suggested that the fact that Herring CJ found it necessary to consider the nature of the tenancy shows that his Honour recognised that, if the tenancy had been misdescribed, the notice was bad. To this suggestion there are at least two answers. In the first place, his Honour may well have taken the view that it was unnecessary to deal with the question of law raised by the submission, since the factual basis for it did not exist. In the second place, the case was a special one, since the notice to quit,

in fixing the date of expiration, referred to the determination of ‘the then current week’. It could thus be put that, unless the tenancy was indeed [page 692] a weekly one as alleged in the notice, the notice would be bad as failing properly to specify the date of its expiration. For these reasons it is considered that Wilson v Halton does not support the view that the misdescription of the nature of a periodic tenancy will, without more, vitiate the notice: see further [20.20].

Variation between notice served on two lessees [20.19] In Arnold v Wood [1948] VLR 261, there was a variation between the notice to quit served on one lessee and that served on the other; this variation did not create such uncertainty in the minds of the lessees as to permit them to rely on it as constituting a basis for treating the notice as invalid.

Date of expiration [20.20] The notice need not mention the particular day on which the tenant is required to quit. (As to the common law requirement that a notice expire at the end of one of the recurring periods, see [20.5], [20.7].) As long as the landlord either gives a certain date or supplies the tenant with a formula from which the date can be ascertained with certainty, the notice is good: Addis v Burrows [1948] 1 All ER 177; [1948] 1 KB 144. Where a quarterly tenant was given notice to quit ‘on 24 June next or at the expiration of the year of your tenancy which shall expire next after the end of half a year of the delivery of this notice’, Bankes LJ expressed the opinion that the notice was good, saying that the alternative contained in the last clause of what was a printed form, obviously prepared for use in the case of a yearly tenancy, had no application in the case of a quarterly tenancy and might be treated as

surplusage: Remon v City of London Real Property Co [1921] 1 KB 49 at 54; [1918–23] All ER Rep Ext 803. The contrary view might well have been taken: see further [20.18]. In Sunrose Ltd v Gould [1961] 3 All ER 1142; [1962] 1 WLR 20, a notice omitted the year from the date of determination of the tenancy; the year was apparent by reference to a note on the back of the notice, and the notice was held to be valid. In Hankey v Clavering [1942] 2 KB 326; 2 All ER 311 at 313–14, under the terms of a lease for 21 years from 25 December 1934, either party could determine the tenancy at the end of seven years on giving six months’ notice. The landlord gave a notice as from 21 June 1941, which purported to determine the lease on 21 December 1941. It was held that the notice was invalid notwithstanding that the mistake as to date was obviously due to a slip on the part of the landlord. Lord Greene MR said ([1942] 2 KB at 329–30): Notices of this kind are documents of a technical nature, technical because they are not consensual documents, but, if they are in proper form, they have of their own force without any assent by the recipient the effect of bringing the demise to an end. They must on their face and on a fair and reasonable construction do what the lease provides that they are to do. It is perfectly true that in construing such a document, [page 693] as in construing all documents, the court in a case of ambiguity will lean in favour of reading the document in such a way as to give it validity, but I dissent entirely from the proposition that, where a document is clear and specific, but inaccurate on some matter, such as that of date, it is possible to ignore the inaccuracy and substitute the correct date or other particular because it appears that the error was inserted by a slip. By the clear wording of this notice the plaintiff purported to bring the lease to an end on 21 December 1941. In so doing he was attempting to do something which he had no power to do, and however much the recipient might guess, or however certain he might be, that it was a mere slip, that would not cure the defect

because the document was never capable on its face of producing the necessary legal consequence. In Carradine Properties v Aslam [1976] 1 WLR 442, however, Goulding J said that the test generally applicable in deciding the validity of a notice to quit is whether the meaning is quite clear to a reasonable tenant reading it, so that he or she cannot be misled by it. In that case, the notice by which it was intended to determine the tenancy on 27 September 1975 in terms gave the relevant date as 27 September 1973. The notice was nevertheless held to have been effective to determine the tenancy on the intended date. His Honour, applying the general test, said that it was clear from the terms of the lease and from the fact the notice was given in 1974 that the date in the notice to quit was erroneous and that the corresponding date in 1975 was intended. In Mannai Investment v Eagle Star Life Assurance Co Ltd [1995] 1 WLR 1508 the Court of Appeal had to consider the validity of notices by a tenant to determine a fixed tenancy which incorrectly stated the date for termination as being the day before the day of termination provided for in the lease. The court applied Hankey v Clavering and held the notice to be invalid. Nourse J (at 1513) explained Hankey v Clavering and Carradine Properties v Aslam as follows: The effect of these authorities can be summarised as follows. If a notice clearly and specifically purports to determine a demise for a fixed term on a date not authorised by the lease, the date cannot be corrected simply because it is clear, first, what the correct date ought to be, secondly, that the wrong date was inserted by a slip and, thirdly, that the recipient might guess or even be certain that that was what had happened. An exception can only be made where the date specified is an impossibility, either because it has passed or because it is on some other ground inconceivable that it was the date intended. The notices in the present case, having clearly and specifically purported to determine the leases on a date which had not passed and could conceivably, like Goulding J’s example of 1976, have been the date intended, do not fall within the exception. In allowing an appeal the House of Lords overruled Hankey v Clavering: Mannai Investment v Eagle Star Life Assurance Co Ltd [1997] AC 749. The Lords

held that the construction of the notices had to be approached objectively, and the question was how a reasonable recipient would have understood them, bearing in mind their context; that the purpose of the notices was to inform the landlord of the tenant’s [page 694] decision to determine the leases in accordance with the break clauses; that a reasonable recipient with knowledge of the terms of the leases would have been left in no doubt that the tenant wished to determine the leases on the date provided for in the lease but had wrongly described the date and that, accordingly, the notices were effective to determine the leases. Lord Steyn said (at 768): ‘… the question is simply how the reasonable recipient would have understood such a notice’; Lord Clyde said (at 782) that ‘the standard of reference is that of the reasonable man exercising his common sense in the context and in the circumstances of the particular case’. The test adopted by the House of Lords in Mannai was applied by the Court of Appeal in Ravenseft Properties Pty Ltd v Hall [2002] EG 126; Trafford MBC v Total Fitness UK Ltd [2004] EWCA Civ 553; and Garson v Scottish Widows’ Fund and Life Assurance Society [1998] 3 ALL ER 596. Notice to quit ‘on the date when your current tenancy may next lawfully be determined’ was said to be good in Sunrose Ltd v Gould [1961] 3 All ER 1142; [1962] 1 WLR 20 at 23. In Allam & Co Ltd v Europa Poster Services Ltd [1968] 1 WLR 638, a notice determining a licence ‘at the earliest possible date after service of this notice which is permissible under the terms of your licence, lease or agreement (as the case may be) or at law’ was held to be valid. This decision might be thought to go a long way, especially in its rejection of the suggestion that the addition of the words ‘or at law’ created doubt as to when the notice would take effect. The general rule is that, in computing time from a given day, that day is prima facie to be excluded. Therefore, a notice to quit ‘at the expiration of 30 days from the date of service upon you of this notice’ is not bad for uncertainty: Piggott v Seeberg (1949) 66 WN (NSW) 198. Where the landlord (being bound to give 30 days’ notice) gave a notice to quit dated 9 December 1949, which informed the tenant that he was

given ‘twenty-eight days’ notice to quit and deliver up possession of the said premises on 9 January 1950’, it was held that the notice would be good if it was served on the day of its date, as the tenant would actually have the necessary 30 days’ notice: O’Brien v Clegg; Ex parte Clegg [1951] St R Qd 1. If a notice to quit is in fact served in time, the fact that it is postdated will not invalidate it: Lazarus Estates Ltd v Beasley [1956] 1 QB 702; 1 All ER 341. Notice to quit ‘on 12 May 1965, or at the expiration of the week of your tenancy which shall expire next after the end of 28 days from the date of service of this notice upon you’ was held to be good in Blumberg v Wood [1966] Qd R 457. Incorrect dating will not invalidate a notice, but an insufficient notice, even if assented to by the tenant, will not determine the tenancy or operate as a surrender: Thompson v McIntosh (1953) 53 SR (NSW) 212. Notice was given to quit premises ‘not later than the weekly period of your tenancy first occurring 13 weeks after this notice to you’. The landlord’s solicitors later informed the tenant that the words ‘the expiration of’ were omitted before the words ‘the weekly period’. The notice to quit was held to be good: Watson v Riding; Ex parte Riding [1945] St R Qd 75; see also [20.26]. [page 695]

‘On or before’; ‘by’; ‘within’ [20.21] A notice to quit ‘on or before’ a certain date is valid, for it prescribes a final date: Story v Madders (1883) 9 VLR (L) 150; Dagger v Shepherd [1946] 1 KB 215; 1 All ER 133; Amad v Grant (1947) 74 CLR 327 at 341; [1947] ALR 191; Tremearne v Woolhouse [1958] VR 269 at 270. Notice to quit ‘by’ a certain date means ‘on or before’ that date; the tenant is not required to quit on the day before that date: Eastaugh v Macpherson [1954] 1 WLR 1307. As to whether when the validity of a notice to quit is concerned, there is any distinction between a lease commencing ‘on’ a particular date and one commencing ‘from’ a particular date: Box v Lock (1948) 65 WN (NSW) 291; see also Crate v Miller [1947] KB 946. A notice to quit requiring the tenant to deliver possession ‘within 30 days’ is good: Roche v Norman; Ex parte Norman [1958] QWN 11; compare Tremearne v Woolhouse [1958] VR 269 at

270; Manorlike Ltd v Le Vitas Travel Agency and Consultancy Services Ltd [1986] 1 EGLR 79; but see Sewell v Donald & Sons Ltd [1917] NZLR 408.

Misdescription of premises [20.22] A misdescription of the premises in a notice to quit is not fatal if the tenant has not been misled: Doe d Cox v Roe (1802) 4 Esp 185; 170 ER 685, where a notice referring to ‘The Waterman’s Arms’ instead of ‘The Bricklayer’s Arms’ was held valid, there being only one house held by the tenant of the landlord. Another notice described the premises as ‘that messuage, farm, etc situated at D, in the county of York’. The premises were situated, not at D, but at H; D and H were adjoining parishes. It was held that this was not a material variance, the tenant not having shown that he held more than one farm of the lessor, or that he was misled by the notice, and not having desired to have any question on this point submitted to the jury: Doe d Armstrong v Wilkinson (1840) 12 Ad & El 743; 113 ER 995; see also Woodward v Earl of Dudley [1954] 1 Ch 283 and 288–9 to the same effect. A landlord caused a notice to quit signed by him to be delivered to his estate agent for service, such notice describing the street number of the premises as ‘146’. The street having been renumbered, the agent, without reference to the landlord, altered ‘146’ to the new number ‘412’. The tenant conceded that he would have understood a reference to No 146 as a reference to the subject premises and that the alteration in no way affected his understanding that he was being given notice in respect of those premises. In these circumstances the notice was valid: Marshall v Burman (No 2) [1961] VR 161.

Misnomer of landlord [20.23] A notice making a claim for dilapidations was expressed to be given by solicitors ‘as solicitors for your landlord Raven Frankland’. In fact, Raven Frankland [page 696]

was the name of the landlord’s son, who, to the knowledge of the tenant, had been acting as agent for the landlord in unsuccessful negotiations which had preceded the service of the notice. It was held that, while the notice was ambiguous, it was clearly given on behalf of the landlord; the blunder was an obvious one which had in no way affected the tenant or her understanding of what the proceedings were and her obligations thereunder: Frankland v Capstick [1959] 1 All ER 209. Where one Harvey was the general agent of the landlord and had always been regarded by the tenant as his landlord and notice to quit was expressed to be given by solicitors ‘on behalf of your landlord, R P Harvey’, the notice was good: Harmond Properties Ltd v Gajdzis [1968] 3 All ER 263.

Misnomer of tenant [20.24] Where the tenant’s name was Wladyslaw Gajdzis, ‘Wladyslaw’ being the Polish for ‘Walter’, notice to quit addressed to ‘Walter Gajdzis’ was, not surprisingly, held to be good: Harmond Properties v Gajdzis [1968] 1 WLR 1858. In Lazarus Estates Ltd v Beasley [1956] 1 QB 702; 1 All ER 341, a notice was addressed to ‘Mr E G Brasley, tenant of 13 The Palatinate, SE 1’. Mrs Violet Beasley was in fact the tenant, having become the tenant on the death of her husband, E C Beasley. The Court of Appeal held the notice to be good. Mrs Beasley knew that she was the tenant and must have understood that notice was being given to her as the tenant of No 13. She was not misled in any way. If a mistake is made in the notice as to the tenant’s Christian name, and he or she keeps the notice, it is a waiver of the misdescription, and the lessor may recover on it, if there be no other tenant of that surname: Doe v Spiller (1806) 6 Esp 70; 170 ER 833. It is not necessary to name the tenant, provided that the notice to quit is properly served upon him or her: Doe d Matthewson v Wrightman (1801) 4 Esp 5; 170 ER 622. Similarly, a notice to quit given by the tenant to the landlord need not be addressed to the landlord by name so long as it is properly served on him or her or his or her duly authorised agent: Butcher v Bowen [1964] NSWR 36; 80 WN (NSW) 1520; in Wong v Moonwalk Pty Ltd (SC(Vic), Beach J, 6 March 1996, BC9600645) the notice was held to be valid despite it being addressed not to the tenant but to the tenant’s unregistered business name.

Notice referring to other matter [20.25] Where the tenant had power to determine a lease at the end of the first seven years of the term, a notice stating that he would ‘not be able to stop’ unless some reduction in the rent was made was held to be sufficient: Bury v Thompson [1895] 1 QB 696. A notice to quit which referred also to the payment of arrears of rent was considered in Bayne v Love (1909) 7 CLR 748. [page 697]

Reference to other documents [20.26] As to whether a prior letter from the landlord to the tenant can be used to validate a notice to quit, see Duggan v Little [1951] QWN 13; Bellas v Ryan [1954] QWN 59. Notice was given to quit premises ‘not later than the weekly period of your tenancy first occurring 13 weeks after this notice to you’. The landlord’s solicitors later informed the tenant that the words ‘the expiration of’ were omitted before the words ‘the weekly period’. The notice to quit was held to be good: Watson v Riding; Ex parte Riding [1945] St R Qd 75. In Sunrose Ltd v Gould [1961] 3 All ER 1142; [1962] 1 WLR 20, regard was had to a note on the back of the notice.

Service [20.27] There are decisions which, while not concerned with notices to quit, nevertheless throw light on what will amount to sufficient service of such a notice. In R v Heron (1884) 10 VLR (L) 314, the Full Court was concerned with the service of a notice to fence. Higinbotham J said at 316–17: When a Statute requires service upon an individual, and does not provide any special mode of service — as by delivery at a specified place or otherwise — then no service other than personal service is sufficient, and that must be proved. But what does personal service mean? The presiding magistrate seems to have been of opinion that the

personal service required was an actual service by an occupier, with his own hand, upon the adjoining occupier himself … I apprehend that if the proper notice is either delivered to the person himself into his own hands, or so that he is enabled to obtain possession of it, or if it be sufficiently shown that it has come into his hands, there has been personal service upon him to all intents and purposes. This decision was cited by Sholl J in City of Camberwell v Reed [1954] VLR 653 at 658, where his Honour also referred to the guiding principle stated by Lord Cranworth LC in Hope v Hope (1854) 4 De G M & G 328 at 342; 43 ER 534 at 539–40 where the Lord Chancellor said: The object of all service is, of course, only to give notice to the party on whom it is made, so that he may be made aware of and may be able to resist that which is sought against him; and when that has been substantially done, so that the Court may feel perfectly confident that service has reached him, everything has been done that is required. See further Davidson v McCarten [1953] VLR 697. It is thought that the same principle applies to service of notices to quit. At common law, the mere leaving of a notice to quit at the tenant’s home, without further proof of its being delivered to a servant, and explained, is not sufficient: Doe d Buross v Lucas (1804) 5 Esp 153; 170 ER 769; Alford v Vickey (1842) Car & M 280; 174 ER 507; Ex parte Smith; Re Robertson (1947) 48 SR (NSW) 29. The delivery of a notice to quit at the tenant’s dwelling house, even though it be not upon the demised premises, to the servant of [page 698] the tenant is strong presumptive evidence that the master received the notice: Jones d Griffiths v March (1791) 4 Term Rep 464; 100 ER 1121. The same presumption arises where the notice is served on the wife of the tenant at his dwelling house: Pulteney v Shelton (1799) 5 Ves 260n; 31 ER 576; Roe d Blair v Street (1834) 2 Ad & El 329; 111 ER 127; Smith v Clark (1840) 9 Dowl 202. This is because of the implied authority of the servant or wife to receive the notice. In such a case the notice is duly served though it never reaches the

tenant personally. The presumption that the notice reached the tenant cannot be rebutted by showing that it did not in fact reach him or her. It can be rebutted only by showing that the reference of agency was not correctly drawn from the facts: Tanham v Nicholson (1872) LR 5 HL 561. Where the tenant disappears, delivery of the notice to his or her last known address is not sufficient: Hogg v Brooks (1885) 15 QBD 256. A party cannot take advantage of his or her own act in intentionally avoiding service of a notice: Bragg v Alam [1981] 1 NSWLR 668; noted 56 ALJ 142 (affirmed (1982) NSW ConvR ¶55-082). Notice to quit served on one or two joint tenants, on the demised premises, is evidence that the notice reached the other who lived elsewhere: Doe d Bradford v Watkins (1806) 7 East 551; 103 ER 213. Where a notice to quit addressed to the secretary of a union instead of to the trustees of the union was shown to have been subsequently received by one of the trustees, it was held that it was sufficient to show that the notice had been received by one of the joint tenants, notwithstanding the fact that it was not addressed to them: Ex parte Palmer (1912) 12 SR (NSW) 756. Evidence that a notice to quit was served on a tenant, but not as to the date of such service and that the tenant read the same and made no objection thereto is prima facie evidence that the notice was given in sufficient time: Ex parte Smith (1924) 24 SR (NSW) 470. The regular service of a notice to quit was held to have been properly inferred from the circumstances of the tenant’s speaking about ‘the notice to quit which he had received’ and engaging a valuer to value his rights as an outgoing tenant: Doe d Simpson v Hall (1843) 5 Man & G 795; 134 ER 781. The notice may be served on Sunday: Sangster v Noy (1867) 16 LT 157. Notice to quit to a corporation may be served on one of its officers: Doe d Carlisle v Woodman (1807) 8 East 227; 103 ER 329. In the case of a company incorporated under the Corporations Act 2001, or any corresponding previous enactment, a document may be served on the company by leaving it at or sending it by post to the registered office of the company: Corporations Act s 109X. This section does not purport to provide an exclusive mode of effecting service on a company; it provides what will be sufficient, leaving other modes open of proving effective service: Peters v Oscar Mayer Pty Ltd [1963] VR 390. As to the form of notices to quit given to corporations, see [20.12]. Service by post is dealt with in [20.28]. Special provision is made for the service of

notices to quit by the Landlord and Tenant Act 1958 (Vic) s 32(3); and see Property Law Act 1974 (Qld) s 132. [page 699]

Service by post [20.28] If a letter properly directed, containing a notice to quit, is proved to have been posted, it is presumed that the letter reached its destination at the proper time according to the regular course of business of the post office, and was received by the person to whom it was addressed: Gresham House Estate Co v Rossa Grande Mining Co [1870] WN 119; Papillon v Brunton (1860) 5 H & N 518; 157 ER 1285; Thomas Bishop Ltd v Helmville Ltd [1972] 1 QB 464. Service by post is not recommended, however, because of the danger that the document may go astray. The notice is posted at the risk of the landlord; that is to say, if it is in fact not received, the supposed service is bad: see Thomas Bishop Ltd v Helmville Ltd [1972] 1 All ER 365. There is also the danger that the tenant will falsely deny receipt of the notice, and that his or her false denial will be incapable of contradiction.

Substituted service [20.29] Where the tenant disappears, a notice to quit is not well served by delivering it to his or her last known address: Hogg v Brooks (1885) 15 QBD 256. Provision has now been made for substituted service: see Property Law Act 1974 (Qld) s 132; Property Law Act 1958 (Vic) s 198.

Second notice [20.30] It was laid down by Denning J in Lowenthal v Vanhoute [1947] KB 342 that a second notice to quit is of no effect unless it can be inferred from other circumstances that a new tenancy has been created after the expiry of the first notice. A second notice to quit is, however, an admission of a new

tenancy: Kennedy v Miller (1867) 4 WW & a’B (L) 255. The second notice raises a presumption of an existing tenancy, but that presumption can be rebutted, as by the existence of current ejectment proceedings which are inconsistent with an intention to treat the lessee as a tenant: George v Hille [1946] VLR 427. If the second notice to quit is issued after the commencement of proceedings for recovery of possession which are based on the first notice, the lessor cannot lawfully take physical possession of the premises at the expiration of the second notice while such proceedings are pending: Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377. It may be otherwise if the action has been determined (Jones v Foley [1891] 1 QB 730); see also Long v Fairbank (1947) 64 WN (NSW) 205, to the same effect. In Green v Summers (1908) 14 ALR 218, the landlord, after the expiration of a notice to quit, served a second notice. Hodges J held that the service of the second notice operated merely as an offer of a new tenancy, and not as a waiver of the first notice in a case where the facts were inconsistent with the tenant’s having accepted the new tenancy. Where the lessor on 5 April gave his [page 700] weekly tenant notice to quit expiring on 4 May and on 10 April gave the tenant a second notice expiring on 20 April, it was held by the Court of Appeal that the second notice determined the tenancy; up to 4 May the tenancy was still in existence as a weekly tenancy and it was open to the lessor to give to the lessee a notice appropriate to determine such a tenancy: Thompson v McCullough [1947] KB 447; see also Moore v Callus [1971] QWN 26. In Lower v Sorrell [1963] 1 QB 959; [1962] 3 All ER 1074, the first notice to quit was served on 20 March 1959 and required the tenant to quit on 29 September 1960, and the second was served on 27 September 1960 and expired on 29 September 1961. The Court of Appeal discussed the question whether a tenancy may be determined by a notice to quit given before its commencement. In so far as this decision is concerned with the effect of the ‘withdrawal’ of a notice to quit, its correctness is not free from doubt: see

[20.33]. The decision is noted in (1963) 27 Conveyancer and Property Lawyer 138 and (1963) 79 LQR 178.

‘Waiver’ of notice [20.31] Once a notice to quit has expired, the old tenancy has gone; the parties cannot avoid this consequence by agreeing that the notice to quit is to be withdrawn: Mitchell v Cummings [1947] VLR 315 at 317; Arnold v Mann (1957) 99 CLR 462; [1957] ALR 1207. If after the expiration of a notice to quit the parties make an express or implied agreement that there shall be a tenancy, a new tenancy will be created. But while it is correct to say that after the expiration of a notice to quit it is possible only to create a new tenancy and not to revive the old one, it is not correct to say that the question is whether the intention of the parties was that a new tenancy should be created. In Arnold v Mann, Dixon J said (at 99 CLR 474–5): Again, although a new tenancy must be created and an intention, express or implied, must be found that there shall be a weekly tenancy between the parties, certain distinctions must be kept in mind. On the one hand what is needed is a common intention that there shall be a tenancy, not an intention that the tenancy shall be a new one as opposed to a revival or continuation of the old one. If the parties really intended to revive or continue the old tenancy mistakenly believing that they could so do, for example, by a retraction ex post facto of the notice to quit, this might perhaps be construed as the creation of a new tenancy. On the other hand a mistaken belief that the notice to quit had not destroyed the tenancy is not the same as an intention to revive or continue it. Compare the observations of Fullagar J at 479; see also Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 at 1052.

Payment of rent [20.32] The agreement which it is necessary to prove may be either express

or implied, and it is far more common to find a tenant setting up an implied agreement than an express agreement. Tender and acceptance of rent will often be decisive in [page 701] favour of the tenant. This is because it is prima facie not explainable on any other basis than that the parties are treating the relation of the landlord and tenant as still subsisting. The true position is that payment and acceptance of rent after the expiration of the notice to quit do give rise to the implication of a new tenancy, unless the payment and acceptance are otherwise explained (Arnold v Mann [1957] 99 CLR 462 at 481–2; Mitchell v Cummings [1947] VLR 315 at 317; Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377 at 381–3); compare Trustees of Henry Smith’s Charity v Willson [1983] 1 QB 316. The effect of a payment of rent not yet due, made after the expiration of a notice to quit, was considered in Foenander v Dabscheck [1954] VLR 38. The court may decline to infer a new tenancy where rent in respect of a period extending beyond the date of expiry of a notice to quit is paid by the tenant to the landlord’s bank and the amount relating to the period after expiry is later repaid: Moore v Callus [1971] QWN 26. Similarly, the acceptance of rent after proceedings have commenced may not be sufficient to establish a new tenancy because the commencement of the action for recovery of possession may be inconsistent with the (implied) intention to create a new tenancy: Argyle Art Centre Pty Ltd v Argyle Bond & Free Stores Co Pty Ltd [1976] 1 NSWLR 377 at 383. In Victoria the provisions of the Landlord and Tenant Act 1958 s 32AA should be noted: 32AA. Where notice to quit any premises has been given, whether before or after the coming into operation of this section — (a) any demand by the lessor for payment of rent, or of any sum of money as rent, in respect of any period within six months after the giving of the notice; (b) the commencement of proceedings by the lessor to recover

rent, or any sum of money as rent, in respect of the period mentioned in paragraph (a); or (c) the acceptance of rent, or of any sum of money as rent, by the lessor in respect of any period mentioned in paragraph (a) — shall not of itself constitute evidence of a new tenancy to operate as a waiver of the notice. Section 32AA was inserted by Act No 8208 s 4, in 1971. The new section introduced by this amendment is obviously modelled on s 103. The terms of s 103 suggest that the words ‘to operate as a waiver of the notice’ in the new section should have been ‘or operate as a waiver of the notice’. The new section uses the expression ‘lessor’. This may be regarded as unfortunate, having regard to the fact that the section appears in a part of the Act which uses, and defines, the expression ‘landlord’.

‘Withdrawal’ of current notice [20.33] It is clear that, once a notice to quit has run its course, the old tenancy is dead and cannot be revived by a common agreement that the notice shall be [page 702] withdrawn. The law is not clear as to the effect of an attempt by the parties during the currency of a notice to quit to have the notice withdrawn by mutual consent. In Tayleur v Wildin (1868) 3 Ex 303 it was held by the Court of Appeal that the effect of such an agreement was not to continue the old tenancy, but to create a new one. Twenty years later the Irish Court of Appeal refused to follow Tayleur v Wildin and held that the effect of the withdrawal of a notice to quit before its expiration was that no new tenancy had been created and that the old one continued: Lord Inchiquin v Lyons (1887) 20 LR Ir 474. In England the Court of Appeal has twice followed Tayleur v Wildin

(Freeman v Evans [1922] 1 Ch 36; Lower v Sorrell [1963] 1 QB 959; [1962] 3 All ER 1074), but the correctness of that decision has been doubted in the High Court. In Arnold v Mann (1957) 99 CLR 462 at 474; [1957] ALR 1207, Dixon CJ had this to say of Tayleur v Wildin: ‘One would have thought that if by mutual consent the unexpired notice were withdrawn a conventional estoppel would arise requiring the parties to treat it as if it had never been. For the term or interest had not at that time been destroyed’. In the same case Fullagar J said, at 480, that it was ‘indeed not surprising’ that the Irish Court of Appeal had declined to follow Tayleur v Wildin. The conflicting authorities were cited to Pape J in Emery v Commonwealth of Australia [1963] VR 586. While finding it unnecessary to choose between them, Pape J expressed a preference for the view taken by the Court of Appeal in Ireland. A useful discussion of the cases is to be found in the article by Barnsley (1963) 27 Conveyancer and Property Lawyer 335. Lower v Sorrell is discussed in (1963) 79 LQR 178.

[page 703]

21 Re-entry by way of Self-help The two senses of re-entry [21.1] A question which often arises in practice is whether it is safe for a landlord who contends that the lease or tenancy has been determined to take possession of the land by way of self-help; that is to say, without recourse to legal proceedings. The act of the landlord in resuming possession of land to the possession of which he or she has become entitled is usually described as re-entry. It should be noted that there are two kinds of re-entry. In the first place, there is the re-entry which actually determines a lease or tenancy; for example, re-entry for breach of covenant under a proviso for re-entry contained in a lease. This has the effect of extinguishing the lessee’s term. In the second place, there is re-entry which takes place when the lease has already been determined; such re-entry does not put an end to the term of the lessee (his or her interest having already been determined); it amounts to no more than the exercise by the landlord of his or her proprietary right to go into possession of land to the possession of which he or she has become immediately entitled. The distinction was made clear by Lord Greene MR in Butcher v Poole Corporation [1943] KB 48 at 53–4; [1942] 2 All ER 572 at 577: It is useful to observe that a remedy by way of taking possession of land or re-entry upon land, using the word remedy in the broadest sense, may be one of two kinds. It may be a remedy, the exercise of which determines or defeats some right or title in the person against whom it is exercised, or it may be a remedy the exercise of which is

merely an exercise of the existing right of property of the person exercising it, and does not in any way defeat or determine any estate or interest or title of the person against whom it is exercised. I can make that distinction clearer by taking a typical example of each case. A right of re-entry under a lease for breach of covenant is one the exercise of which determines the existing interest of the tenant, whereas a person [page 704] who merely goes into possession of property of which he is the absolute owner is not determining or defeating anybody’s title … another example is where a lease has come to an end. A landlord who re-enters upon the termination of a lease is merely exercising his own proprietary right and is not doing something which defeats or determines the interest of the lessee as is the case where a right of reentry for breach of covenant is exercised. There is no reason why re-entry in the first sense may not be immediately followed by re-entry in the second sense. If under a lease the lessor has become entitled to forfeit the lease by re-entry for breach of covenant, he or she may effect the forfeiture by way of actual re-entry upon the land; see [17.10]. This is re-entry of the first kind — namely, that which determines an estate or interest. The landlord then has two courses open to him or her. The landlord may seek to recover possession by legal proceedings, or he or she may seek to recover possession by actual re-entry. If the landlord adopts the latter course, he or she may do this either on the day on which he or she determined the lease by re-entry or on some subsequent day. In the case where the landlord, having become entitled to forfeit the lease immediately by re-entry, re-enters and then remains in possession of the land, we have an example of the first kind of re-entry followed immediately by the second. For a discussion of what will amount to re-entry in the first sense, see [17.10].

Self-help in the recovery of possession

[21.2] What we are now concerned with is whether a landlord may safely re-enter in the second of the two senses discussed in [21.1]. Accordingly, we presuppose that the lease has already been determined. This determination may have resulted from a formal re-entry by way of forfeiture, or from the expiration of a notice to quit, or in any one of several other ways. The tenancy having been terminated, the question is whether the landlord may him or herself physically take possession of the land without the aid of the court or whether he or she should avail him or herself of legal process. In McDonald Multiple Pty Ltd v Presto Smallgoods (NSW) Pty Ltd [1978] 1 NSWLR 337 the lease, by cl 29, gave the lessor the right to re-enter the demised premises and determine the lease in case the rent was ‘in arrears for the space of fourteen days’. Rent due on 1 November 1977 was not paid until 16 November 1977. On 15 November 1977 the lessor gave the lessee a letter stating, ‘This letter is to advise that we have today determined sub-lease pursuant to cl 29 thereof’. On that day the lessor changed the lock of the premises and left the changed lock on the premises thereafter after 15 November had expired. It was held that: (1) the right to re-enter did not arise till the whole of the 15th day of November had expired; [page 705] (2) there is no general principle whereby a lessor not entitled to forfeit the lease can wrongfully re-enter and maintain its possession until the time arrives when it is entitled to re-enter and then be held to have re-entered at the later time; and (3) in view of the intention of the lessor expressed in its letter, there could not be imputed to it an intention, after 15 November had expired, to re-enter and forfeit the lease. Accordingly, there had been no valid re-entry. If the tenancy has been determined, the landlord is entitled to take physical possession of the premises and to evict the tenant and his or her goods; if the tenant refuses to depart, the landlord may use such force as is necessary to

expel him or her without becoming liable to an action for damages for trespass or assault. This was decided by the leading case of Hemmings v Stoke Poges Golf Club [1920] 1 KB 720; [1918–19] All ER Rep 1170. That was a case of a licensee whose licence had been determined, but the same principle applies to a tenant whose tenancy has been determined; in either case, the licensor or landlord is entitled to possession, and the former licensee or tenant has become a trespasser. Hemmings was a servant of the Stoke Poges Golf Club. For the proper performance of his duties he was required to live in a cottage belonging to the club. He left the employment of the club and his licence to occupy the cottage was determined. Hemmings had some difficulty in finding another cottage and decided that he would stay on until he found alternative accommodation. The agent of the club, having on a previous occasion unsuccessfully requested Hemmings to deliver up the cottage, went to the cottage accompanied by several men. Mr and Mrs Hemmings declined to leave, and the husband was gently led or pushed out of the cottage, while the wife, who refused to leave the chair in which she was seated, was carried out in the chair and deposited outside. The furniture was taken out of the cottage and placed in the adjoining garage. At the trial it was found as a fact that no unnecessary force had been used. Mr and Mrs Hemmings claimed damages for trespass, assault and battery, and it was held by the Court of Appeal that their action failed. The principle laid down was that no civil liability to pay damages arose unless there was either a use of more force than was necessary to remove the occupant of the premises or a want of proper care in the removal of his or her goods. This principle was applied in Aglionby v Cohen [1955] 1 QB 558; [1955] 1 All ER 785, where it was held that the right to take the law into one’s own hands was not lost merely as a result of having invoked the law at an earlier stage and obtained a judgment for possession; the argument that a judgment for possession could be enforced only by process of execution and not by self-help was rejected. See also Housing Commission of NSW v Allen [1967] 1 NSWLR 776; [1967] 86 WN (Pt 2) (NSW) 204 at 206–7. A landlord who is entitled to immediate possession of demised premises may, by entry, convert his or her rights to possession into actual possession and he or she may then maintain an action of trespass and may use reasonable force to expel his or her former tenant. If, however, he or she wishes to remove his or her tenant’s goods after the determination of the tenancy, he or she must first

give reasonable notice to the tenant requiring the removal of goods: Haniotis v Dimitriou (1983) VR 598. [page 706]

Dangers of direct action [21.3] Despite the Stoke Poges case, dangers attend the use of self-help as a means of recovering possession. In the first place, as already mentioned, the landlord will be civilly liable if more force is used than is necessary or if proper care is not exercised in the removal of the tenant’s goods; the tenant may prove difficult to dislodge, tempers may become frayed and there is always the possibility of a conflict of evidence concerning what occurred at the premises. In the second place, there is the danger that it may subsequently be held that in fact the tenancy had not been duly determined by the time when the landlord took possession; this danger is avoided if legal proceedings resulting in a judgment for the recovery of possession are taken, for such a judgment will conclude the matter against the tenant. It is also possible that the landlord may find him or herself in the situation where, although the tenancy has been duly determined by a second notice to quit, the landlord nevertheless cannot lawfully take possession of the premises because the proceedings for the recovery of possession which were based on the first notice are still pending: Argyle Art Centre Pty Ltd v Argyle Bond and Free Stores Co Pty Ltd [1976] 1 NSWLR 377. Next, there is the possibility that goods which are the property of third persons (for example, goods on hire-purchase) may be wrongfully interfered with. Finally, there is the question of criminal liability. It was held in R v Templeton (1873) 4 AJR 20 that the Statute of Forcible Entry (1381) was in force in Victoria. The numerous and lengthy English enactments on the subject were dispensed with and replaced by the consolidating provisions contained in Pt III Div 7 of the Imperial Acts Application Act 1922 (Vic). These provisions were based on the Queensland Criminal Code: see Explanatory Paper, p 79. They were repealed by s 2 of the Crimes Act 1928, and replaced by s 197 of that Act. They are now to be found in s 207 of the Crimes Act 1958 (Vic): see Imperial Acts Application Act 1969 (NSW) ss 18–

20; Criminal Code 1899 (Qld) ss 70, 71; Criminal Code Act Compilation Act 1913 (WA) s 69. Section 207(1) has been repealed; s 207(2) states: No person being in actual possession of land for a period of less than three years by himself or his predecessors shall without colour of right hold possession of it in a manner likely to cause a breach of the peace or a reasonable apprehension of a breach of the peace against a person entitled by law to the possession of the land and able and willing to afford reasonable information as to his being so entitled. By subs (3), every person who is guilty of a contravention of the section shall be guilty of an indictable offence and liable to level 10 imprisonment or a level 10 fine or to both fine and imprisonment. Prosecutions under this section are not common, but the section cannot be regarded as having fallen into disuse: see Prideaux v Director of Prosecutions (Vic) (1987) 61 ALJR 600; and see 62 ALJ 306. For recent English decisions, see R v Robinson [1971] 1 QB 156; [1970] 3 All ER 369; R v Mountford [1971] 2 WLR 1106; [1972] 1 QB 28. Doubt has been created concerning the right of self-help of the landlord by certain observations in McPhail v Persons, Names Unknown [1973] Ch 447. [page 707] In that case Lord Denning MR with whom Orr LJ agreed, said that a tenant, whose tenancy had been determined by notice to quit or otherwise, could not be forcibly removed by the owner (even using no more force than reasonably necessary) without incurring criminal liability under the Statute of Forcible Entry (1381). As to civil liability, Lord Denning said at 459, ‘He may not be liable to a civil action for damages: see Hemmings v Stoke Poges Golf Club [1920] 1 KB 720; [1918–19] All ER Rep 1170. But, nevertheless, his conduct is unlawful and should not be countenanced by the courts of law’.

Legal proceedings preferable [21.4] Having regard to the matters to which attention has been drawn, self-help should be reserved for the case of extreme urgency and the case

where the right to possession is plain beyond a peradventure and the possibility of any disturbance is slight indeed. In the following chapter an account is provided of the old action of ejectment. Many of the cases cited in this and preceding chapters make reference to the action of ejectment, or more modern proceedings derived from it. While it may be useful to consider some aspects of the more modern procedures, space does not permit it as Australia is cursed with at least eight major legal systems. Reference should therefore be made to the relevant texts on civil procedure.

[page 709]

22 The Old Action of Ejectment Real actions [22.1] In early times freeholders who had been dispossessed had available as remedies the real actions, with their quaint and splendidly evocative names (Writ of Right, Assize of Novel Disseisin, Formedon, Cosinage, Assize of Mort d’Ancestor). These actions could not be brought by a leaseholder. By the end of the fifteenth century it became established that the lessee for years might recover the land by the writ of ejectio firmae, which commenced the action of ejectment. See W Holdsworth, A History of English Law, vol 3, pp 213–17; F Maitland, Forms of Action. The new action of ejectment had considerable advantages over the old real actions. The real actions afforded the defendant (technically, the ‘tenant’) many opportunities for delay, and it was possible for a determined litigant to hold up the hearing of the action for years. For example, many excuses (‘essoins’) might be given for nonappearance; the defendant could occasion much delay by taking to his or her bed. Holdsworth, vol 3, p 624, n 6 cites an amusing illustration from the Modern Conveyancer (1725), where the tenant in a writ of formedon, intent on delay, enfeoffed 100 persons jointly, and the demandants were advised to sue the feoffor, relying upon the Statute of Elizabeth against fraudulent alienations, because ‘it will be fruitless to bring the formedon against all the enfeoffees, for every one of them will essoin; and if they be 100 of them then it will be 50 years before all will have essoined; and if any of them die in the meantime, his death abates that action, and you must begin de novo’. Moreover, the plaintiff

(the ‘defendant’) ran the risk of choosing the wrong form of action; there were many actions between which to choose, and some of them were of very limited scope. Further, the rules concerning the wording of the writ and the pleadings were technical in the extreme. Someone who brought a real action for a house or an orchard lost his or her action if he or she did not call the house a messuage and the orchard a garden. [page 710]

Ejectment [22.2] In consequence of the disadvantages of the old real actions the action of ejectment came to be used for the recovery of freeholds. That action applied only to leasehold interests, so the freeholder who wished to avail him or herself of it was obliged to first grant a lease to a person who was prepared to act as nominal plaintiff. Since a person who granted a lease without being in possession was guilty of maintenance, it was necessary for the freeholder to enter upon the land and there deliver a lease under seal to the nominal plaintiff. The nominal plaintiff took possession of the land and remained in possession until he or she was ejected either by the occupier or by some person acting on the instructions of the freeholder, the person so employed by the freeholder being known as the casual ejector. Once the nominal plaintiff was in a position to prove that he or she had been granted a lease, that he or she had entered under that lease and that he or she had been ousted, he or she was in a position to bring his or her action. If the nominal plaintiff could in addition establish the title of the freeholder to grant the lease at the time of the demise, he or she succeeded in his or her action and recovered possession on behalf of the freeholder. It was necessary to sue the person by whom the plaintiff had been ejected. If that person was not the real defendant but a casual ejector, notice of the action was required to be given to the tenant in possession, who was in a position to intervene if he or she wished to do so.

Fictions

[22.3] At first the whole process of lease, entry and ouster was actually gone through, but by the middle of the seventeenth century the ingenuity of lawyers had made it unnecessary for there to be any actual lease or entry by the plaintiff or ouster, fact being replaced by fiction. Traditionally, Rolle CJ is credited with the invention of the practice whereby the defendant was required, as a condition of being allowed to defend the action, to admit the fictitious lease entry and ouster alleged in the declaration. The procedure whereby the defendant admitted the fictitious lease entry and ouster was known as the consent rule. Cole (Cole on Ejectment) commenced his celebrated treatise on ejectment with an account of the old practice: Before the passing of the Common Law Procedure Act 1852, actions of ejectment were in point of form pure fictions, but in substance and effect they were serious realities. The action was commenced (without any writ) by a declaration, every word of which was untrue; it alleged a lease from the claimant to the nominal plaintiff (John Doe); an entry by him under and by virtue of such lease; and his subsequent ouster by the nominal defendant (Richard Roe): at the foot of such declaration was a notice addressed to the tenants in possession, warning them, that, unless they appeared and defended the action within a specified time, they would be turned out of possession. This was the only comprehensible part to a non-professional person; it generally alarmed the tenants sufficiently to send them to their attorney, whereby one main object of the proceedings was attained; but the tenants were not permitted to defend the action, nor [page 711] to substitute their names as defendants in lieu of that of the casual ejector (Richard Roe), except upon entering into a ‘consent rule’, whereby they bound themselves to admit the alleged lease, entry and ouster, and to plead the general issue ‘not guilty’, and to insist on the title only. The effect of this was that they were bound to admit the truth of all the fictions in the declaration; and (curiously enough) the only matter in issue was a fact or point not alleged in the declaration, viz,

whether the claimant on the day of the alleged demise, and from thence until the service of the declaration, was entitled to demise the property claimed or any part thereof; ie whether he was himself then legally entitled to actual possession, and consequently to dispose of such possession; if not, it is obvious that the defendants might very safely admit that he did in fact make the alleged demise, and that his lessee entered, and was afterwards ousted by the defendants. Such admissions (however contrary to the truth) could not prejudice the defendants, except upon the supposition that the claimant really was entitled to the possession of the property claimed, or some part thereof, on the day of the alleged demise … The whole proceeding was an ingenious fiction, dexterously contrived so as to raise in every case the only real question, viz, the claimant’s title or right of possession, and to exclude every other, and whereby the delay and expense of special pleadings and the danger of variances by an incorrect statement of the claimant’s title or estate were avoided. But it was objectionable, on the ground that fictions and unintelligible forms should not be used in courts of justice; especially when the necessity for them might be avoided by a simple writ so framed as to raise precisely the same question in a true, concise, and intelligible form. For further accounts of the procedure, reference should be made to Holdsworth, A History of English Law, vol 7, p 10 and folowing; Encyclopaedia of the Laws of England, 2nd ed, vol 12, p 455–6; Potter, Historical Introduction to English Law, pp 437–40; Selwyn’s Law of Nisi Prius, Chapter 18; McKinnon v Portelli (1960) SR (NSW) 343; Commonwealth of Australia v Anderson (1961) 105 CLR 303; [1961] ALR 354. The nominal plaintiff was often called Doe, but not infrequently a more imaginative name was chosen, such as Goodright, Peaceable, Goodtitle, Fairclaim and (in at least one case) Thunder. The casual ejector was usually Richard Roe, but Shamtitle, Badtitle, No-right and Thrustout also figure in the reports as casual ejectors. The action was entitled Doe on the demise of Brown v Black, or Doe d Brown v Black, Brown being the real claimant. It has been said that the fictitious entry which was one of the three matters admitted by the consent rule was the entry of the real plaintiff for the purpose of his or her leasing to the nominal plaintiff, such entry being, as previously mentioned, necessary in order not to offend against the law

prohibiting maintenance; see Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 at 99. With respect, it is suggested that the entry admitted by the consent rule was the entry of the nominal plaintiff prior to the eviction. The form of declaration in Selwyn’s Law of Nisi Prius, p 723, alleges the demise of Doe, by virtue of which Doe entered and was possessed, until Roe afterwards ejected him. Compare the reference to the declaration in the passage from Cole on Ejectment already cited, and see further Holdsworth, above, pp 11–13; Potter, above, p 438; Maitland, Forms of Action, pp 352–3; R Megarry and W Wade, The Law of Real Property, 2nd ed, Stevens, London, 1959, pp 1072–3; [page 712] Commonwealth v Anderson (1961) 105 CLR 303; [1961] ALR 354. As to the bringing of an action of ejectment as the equivalent of re-entry, see [17.9].

Nineteenth century reforms [22.4] After 1852 John Doe would never again declare on a demise, for an Act passed in England in that year brought about his own demise. The Common Law Procedure Act 1852 abolished the fictions of lease, entry and ouster and effected other procedural reforms. It enabled the real claimant to bring an action of ejectment in his or her own name. These provisions were then introduced in the colonies; for example, the corresponding statute in Victoria is the Common Law Practice Act 1856 19 Vict No 19 ss 224 and following. That Act came into operation on 1 May 1856. Since the Supreme Court of Victoria was not established until 1852, it is not easy to find reports of actions of ejectment brought in that court by John Doe or one of the other imaginary lessees. The curious will find in Doe d Staughton v Jennings (1856) 1 VLT 182 and Doe d Lord v Wilson (1854) 1 VLT 115 what are thought to be the only two such reported cases. A number of earlier local examples of the fictitious procedure will be found in the Reserved Judgments of a’Beckett J sitting as the judge of the Supreme Court of New South Wales resident at

Port Phillip. Finally, the Judicature Acts introduced the modern remedy of the action to recover possession of land. The action for recovery of land, which has since the Judicature Acts replaced the old method of proceedings by ejectment (Rogers v Fry [1930] VLR 134 at 137; Serbian Orthodox Ecclesiastic School Community v Vlaislavljevic [1970] Qd R 386), is in almost all respects like other actions: Jones v Curling (1884) 13 QBD 262 at 273 per Bowen LJ.

[page 713]

23 Retail Tenancies Legislation: Victoria Background Retail Tenancies Act 1986 [23.1] In Victoria, the first piece of retail tenancies legislation was the Retail Tenancies Act 1986 (referred to in this chapter as the ‘1986 Act’), which was assented to on 16 December 1986 and proclaimed in effect on 21 September 1987. The Retail Tenancies Regulations 1987 (SR No 245, 1987), made pursuant to this Act, came into operation on the same date. Minor amendments were effected by the Retail Tenancies (Amendment) Act 1988, which was assented to and proclaimed to commence on 27 April 1988, and by the Retail Tenancies (Rent Review) Act 1991, which commenced on 3 December 1991. The Retail Tenancies (Exemption) Regulations 1991 (SR No 56, 1991) prescribed classes or kinds of premises that are exempt from the operation of the retail tenancies legislation. More substantial amendments were made by the Retail Tenancies (Amendment) Act 1995 (in force 1 August 1995). The main purpose of that Act was, pursuant to s 1, to establish a procedure for the compulsory conciliation of disputes and to extend the prohibition on the receipt of key money by landlords or people on their behalf. Provisions relating to the conduct of conciliations and arbitrations were introduced by the Retail Tenancies (Amendment) Regulations 1995. The application of, in effect, mandatory alternative dispute resolution processes

under the retail tenancies legislation was discontinued in 1998 when the 1986 Act was superseded by the Retail Tenancies Reform Act 1998 and did not reemerge until that Act was, in turn, superseded by the Retail Leases Act 2003. The 1986 Act had a lengthy gestation period. The Cain Labor Government recognised in the early 1980s that, with the rapid proliferation of regional shopping centres, significant inequities had developed in the landlord–tenant relationship [page 714] in the retail context, and many small businesses were required to submit to unfair leases. These inequities were revealed by a study of the Victorian Small Business Development Corporation in 1982. In 1983 the government appointed a Retail Tenancies Advisory Committee to advise on the need for legislation. This committee recommended against the introduction of legislation creating a fair standard form of lease, but supported legislation which proscribed certain practices or conditions in leases of retail premises and ensured certain rights for tenants. It also supported the establishment of a retail tenancies tribunal to adjudicate on all landlord–tenant disputes affecting such tenancies (Legislative Assembly Debates, Hansard, 8 May 1986, pp 1957–8). The government then sought public responses, and in 1984 established a further consultative committee for the purpose of determining which aspects of the earlier report should be implemented and the best method of achieving reform (Legislative Assembly Debates, Hansard, 8 May 1986, 1959). This process ultimately led to the introduction of the initial Retail Tenancies Bill into the Legislative Assembly on 7 May 1986. Debate on the Bill was adjourned until the spring session of parliament to enable further consultations to take place with interested organisations and individuals. Following the government’s decision to make significant changes to the existing Bill, the Retail Tenancies Bill (No 2) was introduced into the Legislative Assembly on 23 October 1986 and was later enacted into law.

Retail Tenancies Reform Act 1998

[23.2] The Retail Tenancies Reform Act 1998 (referred to in this chapter as the ‘1998 Act’) was assented to on 28 April 1998. The Bill for the Act was first introduced into the Victorian Parliament in the Legislative Assembly on 19 February 1988. The Bill passed the Legislative Assembly without amendment and was introduced in the Legislative Council on 7 April 1998. The Bill also passed the Legislative Council without amendment. The Second Reading Speech of the Hon T C Reynolds MP, Minister for Sport on behalf of the Hon Louise Asher MLC, Minister for Small Business and Tourism, was first reported in the Legislative Assembly Daily Hansard of 19 February 1998 (pp 37–40). The Second Reading Speech of Louise Asher is reported in the Legislative Council Weekly Hansard of 8 April 1988 (pp 373–6) and 21 April 1988 (pp 534–62). References to the Second Reading Speech are references to the speech of the minister in the Legislative Council. The Bill was also the subject of a news release from the office of the Minister for Small Business and Tourism, dated 19 February 1998, which draws some comparisons between the provisions of the Retail Tenancies Act 1986, as then currently amended (1986 Act), and the Bill. The 1998 Act was the product of continuing debate in relation to the adequacy of the retail tenancies legislation and the work of various advisory committees and working parties considering the operation of the 1986 Act. In December 1994 the [page 715] Small Business Advisory Network proposed to the then Minister for Small Business, the Hon Vin Heffernan, that he conduct a broad-based review of the 1986 Act with particular attention being given to matters of concern that had been raised by landlords and tenants as to its operation. The then minister accepted the proposal on the basis that the Small Business Advisory Network would establish a committee or review panel whose membership was balanced between the interests of landlords and tenants. The committee was also to include some independent members who would further enhance the expertise and experience of the committee. The committee was established with the minister’s approval at the end of 1994 and, following the state election in

1995, its work continued with the endorsement of the then new Minister for Small Business, Louise Asher. The committee, which had a broad-based membership, mainly of peak organisations representing landlord, tenant and other related business interests, carried out a very detailed and extensive review of the provisions of the 1986 Act. The committee reported in May 1997. During early 1997, the then minister set up a working party to review the 1986 Act. It was chaired by the Hon Wendy Smith MLC and included the Hon Peter Ryan MLA, Mr Ron Thomlinson, former Executive Director of the Retail Traders Association of Victoria, Mr Peter Clarke, Executive Director, Property Council of Victoria and Mr Darryl Beitzel, a small business operator. In a news release on 19 February 1998 the minister said: The working party agreed on major issues and identified a range of ways for small business operators to improve their position during negotiations over leases, rent and conditions with landlords. The Bill meets and at times exceeds the Commonwealth Government’s set of principles that set minimum legislative protection requirements for retail tenants and will set the bench mark for other Australian states and territories. Victoria has more than 170 shopping centres with 2.5 million square metres of retail space. The sector employs about 308,000 people and turns over $29 billion annually. Retailing is an important component of Victoria’s small business sector, the state’s largest private sector employer. The reference to the Commonwealth Government set of principles is a reference to the Report of the House of Representatives Standing Committee on Industry, Science and Technology which was presented in May 1997, entitled Finding a balance — towards fair trading in Australia: [5-10/01-1].

Retail Leases Act 2003 [23.3] The Retail Leases Act 2003 (referred to in this chapter as the ‘2003 Act’) was assented to on 15 April 2003. The Bill for the Act was first introduced into the Victorian Parliament in the Legislative Assembly on 26 February 2003. The Bill passed the Legislative Assembly without amendment on 20 March 2003. Legislation was introduced at the same time to establish

the office of the Small Business Commissioner, in the form of the Small Business Commissioner Bill 2003. The Bill was introduced in [page 716] the Legislative Council on 25 March 2003. The Bill also passed the Legislative Council without amendment. The Second Reading Speech of the Hon J M Brumby, Treasurer, on behalf of the Hon Marsha Thomson MLC, Minister for Small Business and Tourism, was first reported in the Legislative Assembly Daily Hansard of 27 February 2003 (pp 230–3). The Second Reading Speech of the Hon Marsha Thomson is reported in the Legislative Council Weekly Hansard of 27 March 2003 (pp 649–52). The Bill was also the subject of a news release from the office of the Minister for Small Business and Tourism dated 25 February 2003, which said that the legislation demonstrated the government’s policy to overhaul Victoria’s retail tenancy laws to deliver greater certainty and fairness in commercial dealings between retail tenants and landlords. The Retail Leases Act 2003 is the result of an extensive consultation and review process which culminated in the publication of Review of Retail Tenancies Legislation, which included an exposure draft of a Retail Leases Bill 2002. The review was published by the Minister for Small Business, Marsha Thomson, and the Office of Regulation Reform in the latter part of 2002. Further discussion and consultation in relation to the review and the exposure draft of the Bill led to the introduction in the Legislative Assembly of the Retail Leases Bill 2002. The 2002 Bill was accompanied by an extensive explanatory memorandum and further explained in the Second Reading Speech in the Legislative Assembly on 10 October 2002. The 2002 Bill lapsed when the Victorian Parliament was prorogued for the state election in November 2002, the Bill not having progressed beyond the second reading stage in the Legislative Assembly. There were some significant differences between the provisions of the 2002 Bill and the current 2003 Act, but the legislative structure and content is substantially the same and the general approach of the Victorian Government is the same. The 2003 Act, and the preceding consultation and review process, was the

product of the Bracks government’s 1999 commitment to review Victoria’s retail tenancy legislation to better protect small and medium size retail tenants. An issues paper and discussion paper were released for comment, a series of public forums and industry workshops were conducted and an exposure draft of the proposed legislation was then released. In a news release on 10 April 2003 the minister’s office said: Victoria now has the most comprehensive retail tenancy legislation in Australia following the passage of the Retail Leases Bill through Parliament this week. The Minister for Small Business, Marsha Thomson, said the new laws would provide greater certainty for retail tenants. The new laws will protect tenants from unfair or unconscionable conduct, prevent landlords from passing on their land tax to retail tenants and empower the Small Business Commissioner to resolve disputes … Ms Thomson said retailing was a vital component of Victoria’s economy with over 35,000 mostly small retailers and a turnover of $35 billion each year. Nearly half of the 350,000 employees in the industry are under 25 years of age … Ms Thomson said the Retail Leases Bill 2003 was a key element in the government’s major reform package aimed at giving small businesses a fair go in the marketplace. [page 717] Regulations were made under the Act in the form of the Retail Leases Regulations 2003 (which commenced on 1 May 2003). A significant departure from the previous legislative regimes was the inclusion of the prescribed form of Landlord’s Disclosure Statement in the regulations, rather than the Act. This was done to provide more flexibility and ease in future revision of the prescribed form.

Retail Leases (Amendment) Act 2005 [23.4] The 2003 Act was amended by the Retail Leases (Amendment) Act 2005 (referred to in this chapter as the ‘2005 Amendment Act’). The Retail

Leases (Amendment) Bill 2005 passed the Legislative Assembly without amendment on 26 October 2005. The Second Reading Speech was delivered in the Legislative Council on 27 October 2005 and passed the Legislative Council without amendment on 16 November 2005. The Bill received the Royal Assent on 22 November 2005 and commenced substantially on 23 November 2005 (but with a complex commencement regime in relation to particular provisions: see s 2 of the 2005 Act (and see [23.9]); as to which, see the comprehensive table of section commencements contained in Croft, Hay and Virgona, Retail Leases Victoria (LexisNexis, looseleaf) [20,005]). The 2005 Amendment Act made significant amendments to the 2003 Act, amendments which were the product of practical experience with the operation of the 2003 Act, for over two years. Consequently, consideration of the provisions of the 2005 Amendment Act highlights critical issues that emerged in relation to the operation of the 2003 Act, and so aids the understanding of that and the 2005 legislation. More importantly it is necessary to consider the provisions of the 2003 Act and the 2005 Amendment Act separately because, in many cases, the amendments made in 2005 did not commence their operation until after the commencement of the 2003 Act, on 1 May 2005. Many of the 2005 Amendment Act provisions did not commence until 23 November 2005, and then only prospectively, whereas the majority of other 2005 provisions were deemed to have commenced at the time of commencement of the 2003 Act, on 1 May 2003.

Continuing operation of all retail leases legislation [23.5] A unique feature of the Victorian legislative regime regulating retail tenancies is that it is made up of three main regimes (the 1986 Act, the 1998 Act and the 2003 Act) plus what might be described as the sub-regime of the 2005 Amendment Act. Each of these regimes remains in full force and effect with respect to leases to which each of these Acts apply, or applied, during the period of their ‘primary’ operation. The 2003 Act is still in its ‘primary’ operation (subject to the effect of the 2005 Amendment Act) but the ‘primary’

operation of the 1986 Act ended on the commencement of the 1998 Act, the primary operation of which, in turn, ended with the commencement of [page 718] the 2003 Act. Nevertheless the three regimes survive because, although the 1998 Act and the 2003 Act each repealed the Act applying at the date of their commencement, each of those Acts provided that the operation of the previous Act continued until the commencement of the later Act (see ss 50 and 52 of the 1998 Act and ss 118 and 119 of the 2003 Act, which also, as a result of its continuing the operation of the 1998 Act, continued the operation of the 1986 Act until the commencement of the 1998 Act). In spite of the operation of the 1986 Act and the 1998 Act being continued, extensive amendments were made by Pts 12 and 13 of the 2003 Act (to the 1998 Act and the 1986 Act, respectively) with further amendments as a result of the 2005 Amendment Act. Although the effect of many of these amendments was to insert identical, or substantially similar, provisions in the earlier legislation to those contained in the 2003 Act, the ‘three continuing regimes’ structure was not affected.

Scope of this chapter [23.6] Time and space does not permit a detailed, comprehensive, review of the content and effect of the three legislative regimes to which reference has been made: see [23.5]. Consequently attention has been directed to the operation of the legislative regime under the 2003 Act, as amended by the 2005 Amendment Act. The content and effect of both the provisions of the 1986 Act and the 1998 Act (and also those of the 2003 Act) are, however, examined in comprehensive detail in Retail Leases Victoria, to which reference should be made.

Retail Leases Act 2003 (as amended in 2005)

Legislative purpose [23.7] The key purpose of the 2003 Act is expressed in the Second Reading Speech of the Minister for Small Business, Marsha Thomson MLC (in the Legislative Council on 27 March 2003) as follows: The purpose of the bill is to establish a new regulatory framework for retail tenancies that promotes greater certainty, fairness and clarity in the commercial relationship between landlords and tenants of retail premises. The purpose, or at least the main purpose, as stated in the 2003 Act is as follows: 1.

Main purpose The main purpose of this Act is to replace the scheme in the Retail Tenancies Reform Act 1998 with a new scheme to enhance — (a) the certainty and fairness of retail leasing arrangements between landlords and tenants; and (b) the mechanisms available to resolve disputes concerning leases of retail premises.

See Retail Leases Victoria [10,025] and [20,015]. [page 719] The general purpose of the 2005 Amendment Act is expressed in the Second Reading Speech as follows (Mr Bob Cameron, Minister of Agriculture, representing the Minister for Small Business, the Hon Andrè Haermeyer, 6 October 2005 (Legislative Assembly)): The purpose of the bill is to provide for a range of amendments to the Retail Leases Act 2003 to streamline and improve its practical operation. The bill also promotes the fairness of property law in

regards to ‘notice for breach of lease’ requirements under the Property Law Act 1958. The minister, after referring to some background in relation to the 2003 Act, continued: The Act was successfully implemented and appears to be working well, with general support from both tenant and landlord groups. However, retail tenancy is a complex and fluid area of law, being based on a combination of legal principles and several statutory regimes. From time to time, industry stakeholders have brought to the attention of the government some operational improvements and clarifications that could be made to address emerging issues and improve the practical operation of the Act. In this context it is appropriate, now that over two years have passed, to implement improvements to the practical operation of the Act. The government has ensured that the feedback of key industry stakeholders within the retail leasing industry has been taken into account in developing the amendments proposed under the bill. I turn now to the key elements of the bill. A fairer balance The bill reaffirms the government’s commitment to strike a fair balance between the interests of landlords and small tenants. The bill improves the notice provisions contained in the Property Law Act 1958 to give greater protection to tenants where there has been a breach of a lease by the tenant, including a breach amounting to repudiation. The outcome of recent common-law cases suggests that a tenant may be subject to termination without notice, potentially on the basis of a trivial breach of the lease. Faced with the landlord regaining possession of the premises, for example, by changing the locks to the premises overnight, a tenant may be forced to go to the courts to seek relief against forfeiture. The bill restores the original intent of the notice provision contained in the Property Law Act 1958 of providing

tenants with advance notice that the landlord is acting on a breach of lease. In such cases, a landlord will be required to give the tenant a notice of breach and at least 14 days to rectify the breach prior to the landlord entering the premises. The amendment also provides greater clarity for landlords in specifying when a notice is required. The right of a landlord to re-enter premises in the case of non-payment of rent will remain. The bill also addresses the application of the old Retail Tenancies Reform Act 1998 which, as a result of recent court decisions, has enabled tenants covered by the 1998 [page 720] Act to recover rent that was paid during any period in respect of which they were not provided with a disclosure statement. This potentially means that a tenant could unfairly obtain a windfall gain by seeking to recover its rent paid over several years, even though it has enjoyed the use of the premises over that period and is no worse off for not having received a disclosure statement. The government is of the view that it is desirable and fair that any outstanding claims by current and former tenants be resolved, and that landlords and former landlords are not subject to the uncertainty of future claims particularly where they may have changed their positions. The bill addresses this situation by limiting claims that may be made in relation to 1998 Act leases by providing that claims of this type may not be made after 1 May 2006. However, any court proceedings or retail tenancy disputes commenced under Pt 10 of the current Act before then will not be prejudiced. Tenants who may still be operating under a 1998 Act lease that renew their lease after the bill receives Royal Assent will be subject to a

regime similar to that provided for in the current Act. The current 2003 Act limits the likelihood of claims remaining unresolved by requiring the tenant to notify the landlord if a disclosure statement has not been provided within 90 days of entering into a lease. The tenant is only able to withhold rent after providing the notice of non-receipt to the landlord. It is considered that the changes result in consistency with the notice regime in the 2003 Act and provide a balanced approach where a tenant has not been provided with a disclosure statement. To enable these changes to take effect from 1 May 2006 the amendments made by the bill to the 1998 Act disclosure and notice regime come into operation at the last moment of 30 April 2003. This is to ensure consistency with the operation of the 1998 Act. The bill also makes the protections regarding a landlord or tenant engaging in unconscionable conduct clearer. The Act prohibits a landlord or tenant in connection with a lease from engaging in unconscionable conduct. Consequently, it was not clear that the prohibition extended to dealings in relation to proposed leases. The bill clarifies the application of the unconscionable conduct provisions of the Act to prohibit unconscionable conduct by a landlord or tenant in relation to a proposed retail premises lease. The minister then turned to provisions of the Bill which, he said, contained improvements to the practical operation and clarity of the 2003 Act. The purposes of the 2005 Amendment Act are set out, formally, in s 1, as follows (Explanatory Memorandum): Clause 1 provides that the main purpose of the Act is to make miscellaneous amendments to the Retail Act 2003, the Retail Tenancies Reform Act 1998 and the Retail Tenancies Act 1986, to amend section 146 of the Property Law Act 1958 in relation to a breach of a lease amounting to repudiation and to repeal the Small Business Victoria (Repeal) Act 1996. [page 721]

The final objective, the repeal of the Small Business Victoria (Repeal) Act 1996 is merely a repeal of redundant legislation. The legislation to which reference is made was passed for the purpose of abolishing the then ‘Small Business Victoria’, in 1996, for the purpose of incorporating the activities of that body into a government department. These provisions have nothing to do with the Small Business Commissioner or the provisions of the Small Business Commissioner Act 2003. Speaking of the Small Business Commissioner it should be noted that reference was made in the Second Reading Speech to the success of the dispute resolution services provided by the Commissioner. The minister said that they have proved to be particularly effective, with a Small Business Commissioner success rate for mediations at 74%.

Ameliorating or remedial legislation [23.8] It seems clear from the review and consultation process leading to the 2003 Bill, the parliamentary materials (the Second Reading Speech, the Explanatory Memorandum, the Clause Notes, the Bill itself and the Parliamentary Debates in relation to the 2003 Bill) and the contents of the 2003 Act (see particularly, s 1, set out above, [23.7]), that the 2003 Act is to be regarded as ameliorating or remedial legislation, in the same way as the 1986 Act and the 1998 Act (see Retail Leases Victoria [10,030]). In this respect particular reference should be made to Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333 at 334 (per Nathan J), Peppercorn Nominees Pty Ltd v Loizou (1997) V ConvR ¶54-560 (per Smith J at 66,734), Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd [2013] VSC 344 at [42] (per Croft J), CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23 at [20] (Croft J) and see Retail Leases Victoria [10,030]). An aspect of the ameliorating or remedial operation of the 2003 Act is the approach of implying terms in leases; terms that cannot be contracted out of because of the operation of the provisions of s 94: see [23.10]. The 2003 Act adopts the ‘implied term’ formula in a wide variety of provisions. The nature and effect of ‘implied terms’ in the context of the provisions of s 54 (in respect of compensation for interference with the tenant’s premises or business: see [23.55]), which contains its own ‘internal’

compensation provisions, would appear to be different from the more general position under the 2003 Act, where provisions are merely implied, applying the usual formula, and left to operate as lease provisions in the ordinary way. The usual formula in this respect is: ‘A retail premises lease is taken to provide as set out in this section’ (subject to some linguistic variations, depending on context). The following provisions of the 2003 Act utilise the ‘implied term’ formula in the general sense described, in contrast to the more special circumstances [page 722] of provisions such as s 54, which links the ‘implied term’ to a compensation provision within that section. The references are to section numbers and their headings: 24 (Security deposit) 30 (Alterations to premises to enable fit-out) 36 (Rent reviews based on current market rent) 46 (Estimate of outgoings) 47 (Statement of outgoings) 48 (Adjustment of contributions to outgoings) 52 (Landlord’s liability for repairs) 53 (Landlord to give notice of alterations and refurbishments) 54 (Relocation of the tenant’s business) 56 (Demolition) 57 (Damaged premises) 61 (Procedure for obtaining consent to assignment) 68 (Availability of statistical information about the retail shopping centre) 70 (Marketing plan for advertising and promotion) 71 (Statement and report on advertising and promotion expenditure) 72 (Unspent advertising and promotion contributions)

In addition to referring to the discussion of provisions of this nature in this work, reference should be made to the very extensive discussion of the effect of these provisions in Retail Leases Victoria.

Commencement of the 2003 and 2005 Acts [23.9] The 2003 Act contains rather elaborate commencement provisions which are necessary because the earlier legislation remains in force with respect to the leases to which it applied prior to its repeal (see [23.5]); and see Retail Leases Victoria [20,005]. These commencement provisions are contained in s 2. It is sufficient for present purposes to note that the main substantive provisions of the 2003 Act commenced on 1 May 2003. The commencement provisions of the 2005 Amendment Act, which are also contained in s 2 of that Act, are very complex. This is because the 2005 Amendment [page 723] Act amends not only the 2003 Act but also further amends amendments made to the 1986 Act and the 1998 Act which were made previously by the 2003 Act. A number of problems arose as a result of the amendments made to the 1986 Act and the 1998 Act by the 2003 Act, principally because most of them took effect from 1 November 2003 although they were dealing with legislation which had commenced on 27 September 1987 and (principally) on 1 July 1998, respectively. The operation of the commencement provisions of s 2 of the 2005 Amendment Act is helpfully summarised in the Explanatory Memorandum to the Introduction Print of the 2005 Amendment Bill, as follows: Clause 2 provides for the commencement of the Act. Sub-clause (1) provides that sections 1, 2, 3, 12(7), 16, 17, 23, 37, 51 and 52 come into operation on the day after the day on which the Act receives Royal Assent.

Sub-clause (2) provides that Pt 4 is deemed to have come into operation at the last moment of 30 June 1998. Part 4 of the Act is necessarily deemed to have come into operation at the last moment of 30 June 1998 as Pt 4 amends the Retail Tenancies Act 1986 which was repealed on 1 July 1998 by the Retail Tenancies Reform Act 1998. Sub-clause (3) provides that clause 45(2) is deemed to have come into operation on 1 July 1998. Clause 45(2) amends the Retail Tenancies Reform Act 1998 to define ‘prospective tenant’. It is required to come into operation on that date to ensure that leases entered into under the Retail Tenancies Act 1986 which were renewed during the operation of the Retail Tenancies Reform Act 1998 are covered under the Retail Tenancies Reform Act 1998 from the date this Act first commenced operation, being 1 July 1998. Sub-clause (4) provides that sections 39, 40, 41, 42 and 43 are deemed to have come into operation on 15 April 2003, the date of Royal Assent of the Retail Leases Act 2003, with these sub-clauses amending the sections of the Retail Leases Act 2003 which amend the Retail Tenancies Reform Act 1998 and the Retail Tenancies Act 1986. Sub-clause (5) provides that Pt 3 (other than section 45(2)) is deemed to have come into operation at the last moment of 30 April 2003. Part 3 of the Act is necessarily deemed to have come into operation as the last moment of 30 April 2003 as Pt 3 amends the Retail Tenancies Reform Act 1998 which was repealed on 1 May 2003 by the Retail Leases Act 2003. Sub-clause (6) provides that the remaining provisions of this Bill are deemed to have come into operation on 1 May 2003, the date the Retail Leases Act 2003 came into operation. The amendments are mainly procedural amendments to the Retail Leases Act 2003 and it is necessary for these provisions to commence on the same date as the commencement of the Retail Leases Act 2003 to ensure that

the substantive provisions of that Act have effect from their commencement as amended by this Bill. [page 724] It would appear that these provisions would constitute a contrary intention for the purposes of subs 14(2) of the Interpretation Act 1984 and so will affect the consequences of past events, arrangements and entitlements. See also the comprehensive table of section commencements contained in Retail Leases Victoria [20,005].

Extended operation of the 2003 Act [23.10] Section 94 of the 2003 Act extends the operation of the legislation to the provisions of other agreements or arrangements: 94. The Act prevails over retail premises leases, agreements etc. (1) A provision of a retail premises lease or of an agreement (whether or not the agreement is between parties to a retail premises lease) is void to the extent that it is contrary to or inconsistent with anything in this Act (including anything that the lease is taken to include or provide because of a provision of this Act). (2) A provision of a retail premises lease or of an agreement (whether or not the agreement is between parties to a retail premises lease) is void to the extent that it purports — (a) to exclude the application of a provision of this Act; (b) to limit the right of a party to the lease to seek resolution of a retail tenancy dispute under Part 10 or otherwise to limit the application of that Part. (3) A provision contained in any other agreement or arrangement (whether or not between parties to a retail

premises lease) is void if that provision would be void under this Act if it were contained in a retail premises lease. These provisions are, in substance, a combination of subsections 3(2) of the 1986 Act and the 1998 Act and the general avoiding provisions contained in ss 24 and 47 of those Acts, respectively. It will be seen, however, that the provisions of s 94 not only extend the operation of the legislation to any other agreement between parties, in terms of lease provisions or in relation to dispute resolution, but also to any agreement with third parties (see Retail Leases Victoria [30,030]). The general avoiding provisions are, in relation to the substantive provisions of retail premises leases, sometimes supplemented by other provisions of the 2003 Act such as, for example, s 35 in relation to rent reviews which has some ‘internal’ express avoiding provisions: see subss 35(3) and (6); and see subs 23(2) in relation to key money and goodwill. It does not appear that the particular provisions should be construed to detract from the operation of the general avoiding provisions in any way. [page 725]

Application of the 2003 Act Application generally [23.11] The application of the 2003 Act and the time at which its application is to be tested is dealt with principally by s 11. This section does, however, need to be read with other provisions of the Act which bear directly or indirectly on the application of the Act; some of which define or have the effect of giving meaning to the language of s 11. Section 7 (when a retail premises lease is entered into or assigned) is one such provision: see [23.12]. Section 13 provides that the Act applies to a lease that provides for the occupation of retail premises in Victoria regardless of (a) where the lease was entered into; and (b) whether the lease purports to be governed by a law other than the law of Victoria.

These provisions reflect subs 4(4) of the 1986 Act and subs 4(2) of the 1998 Act: see Retail Leases Victoria [120,005] and [180,005]. ‘Lease’ is defined broadly in s 3 of the 2003 Act, as follows: ‘lease’ — (a)

means a lease, sublease, or an agreement for a lease or sublease, whether or not in writing; and (b) in Part 10, includes a former lease (because of s 83);

The 2003 Act definition is similar to the definition of ‘lease’ contained in the 1998 Act and 1986 Act in so far as there is no requirement under the earlier legislation that the lease be in writing (but see now s 16 of the 2003 Act, discussed at [23.24]). The significant change in the general definition provisions is the omission in the 2003 Act of the exception, which appears in the corresponding definition in the two earlier Acts, in favour of a lease or sublease having ‘a term of not less than one year’. This reflects a different approach taken to leases of less than one year in the 2003 Act: see [23.14]. Both the old and new definitions of ‘lease’ apply to a lease, a sublease or agreement for lease or sublease. As to the nature of agreements for lease and their creation, see Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 27; 57 ALR 609; BC8501116 (per Mason J); Chan v Cresdon Pty Ltd (1989) 168 CLR 242; 89 ALR 552; BC8902685; Todburn Pty Ltd v Taormina International Pty Ltd (1990) 5 BPR 11,173; [1990] ANZ ConvR 567; BC9002319; Australian Property Buyers Pty Ltd v Kowalski [2006] VCAT 24 (Deputy President Macnamara, 6 January 2006); and [4.1] and Chapter 4, generally. The inclusion of an agreement for lease (or sublease) within the definition of ‘lease’ should not be overlooked for the purposes of the other requirements of the 2003 Act, whether they be, for example, the disclosure statement requirements, the requirement of writing, and the minimum fiveyear term provisions. There is nothing in the 2003 Act which treats a tenant by estoppel any differently [page 726] from an actual tenant: see De Simone Nominees Pty Ltd v Szabo [2005] VCAT

2919 (Deputy President Macnamara, 20 December 2005) at [12] and [15]. The reference to ‘a former lease’ in subs (b) of the ‘lease’ definition in the 2003 Act is a reference to the provisions of s 83 which, for the purposes of Pt 10 of the 2003 Act (Dispute Resolution), define ‘landlord’ as including a former landlord; a ‘lease’ as including a former lease; and a ‘tenant’ as including a former tenant: see [23.64]. These provisions have the effect of broadening the definition of ‘retail tenancy dispute’ and avoiding some of the jurisdictional constraints flowing from the provisions of Pt 3 of the 1986 Act and the 1998 Act (which are discussed at Retail Leases Victoria [240,035] and following (as to the 1998 Act) and [240,065] (as to the 1986 Act)). The definitions of ‘landlord’ and ‘tenant’ reflect the definition of ‘landlord’ contained in the previous Acts (noting that, strangely, there was no previous definition of ‘tenant’) and under the general law, but with additions to accommodate s 83 and the provisions of Pt 10 of the 2003 Act generally: ‘landlord’ under a retail premises lease — (a) means the person who under the lease is entitled to the rent payable for the premises; and (b) in Part 10, includes a former landlord (because of s 83). … ‘tenant’ under a retail premises lease — (a) means the person who under the lease is entitled to occupy the premises; and (b) in Part 10, includes a former tenant (because of s 83). Section 14 of the 2003 Act provides that the Act binds the Crown in right of the State of Victoria and also in all its other capacities to the extent that the legislative power of Victoria will extend. This provision is in substantially the same terms as s 6 of both the 1986 Act and the 1998 Act (see Retail Leases Victoria [120,005] and [180,005]; and see [30,080.10] with respect to the public companies exception — to the ‘retail premises’ definition in subs 4(2) of the 2003 Act: see [23.21]). The provisions of s 11 reflect a generally similar approach to the application provisions of s 4 of the 1998 Act; in contrast to the strictly prospective provisions of s 4 of the 1986 Act. In particular s 11 does not except from its

operation leases entered into under an option granted in a lease made prior to the commencement of the 2003 Act or under an agreement made prior to the commencement of that Act. Section 11 provides: 11. Application generally (1) This Act applies to a retail premises lease that is — (a) entered into after the commencement of this section; or (b) renewed after the commencement of this section, whether the lease was entered into before or after that commencement. [page 727] (2) Except as provided by Part 10 (Dispute Resolution), this Act only applies to a lease of premises if the premises are retail premises (as defined in section 4) at the time the lease is entered into or renewed. Note: Sections 36 and 76(1) extend the application of certain provisions of this Act to certain leases entered into or renewed before the commencement of this section. The reference to s 36 is a reference to the rent review provisions contained in s 35, with s 36 extending their application to the commencing rent for a renewed term of a retail premises lease that was entered into prior to the commencement of the legislation where the lease which is being renewed would otherwise have fallen within the operation of the 2003 Act. Subsection 76(1) applies the unconscionable conduct provisions of Pt 9 of the 2003 Act to a retail premises lease that was entered into or renewed before the commencement of s 76 if the Act would have applied to that lease had it been entered into or renewed after that commencement: see Retail Leases Victoria [80,015]. It should, however, be noted that subs 76(2) provides that Pt 9 does not apply to conduct that occurred before the commencement of s 76 which was on 1 May 2003: see Retail Leases Victoria [80,015]. In considering the commencement provisions of ss 11, 36 and subs 76(1)

reference should be made to the commencement provisions of s 2 which indicate (in subs 2(5)) that these provisions will commence on 1 May 2003. The treatment of the application issues in Ensabella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626; [2000] VSCA 73; BC200002299 emphasises that the sphere of operation of each piece of retail leases legislation is to be strictly confined within the ambit of each Act, the boundaries being provided by their respective commencement dates. The position is in a sense rendered more complex, but no less clear, by reason of the fact that each of the Acts defines ‘lease’ to include both an agreement for lease and a ‘formal’ lease: as to which, see Retail Leases Victoria [30,090]. Subsection 11(1) reflects the provisions of subs 4(1) of the 1998 Act: see Retail Leases Victoria [30,005]. As indicated previously, subs 11(1) operates both prospectively in relation to freshly negotiated leases which are entered into after the commencement of s 11 and retrospectively in relation to leases which are merely renewed after the commencement of subs 11(1) (and in relation to the circumstances which amount to the entering into of a fresh lease, see s 7: discussed at [23.12]). The significance of subs 11(2) is discussed below in relation to the meaning of ‘retail premises’: see [23.18]. Subsection 11(2) provides that, except as provided by Pt 10 (Dispute Resolution), the 2003 Act only applies to a lease of premises if the premises are retail premises as defined in s 4 at the time the lease is entered into or renewed (see Retail Leases Victoria [30,065.10]). Presumably this is a reference to the provisions of the Act in operation [page 728] at the time the relevant lease is entered into; a question which may be significant in relation to the recovery of management fees (s 49) and land tax (s 50) as ss 49 and 50 did not commence until 1 July 2003: see subs 2(3). This view would appear to be consistent with parliament’s stated intention to delay the commencement of some provisions because a contrary position — that a lease entered into was subject to all the provisions of the 2003 Act whether they had commenced or not — would negate this intent by giving effective

operation to all provisions of the act to all leases entered into after 1 May 2003 (but compare s 121 which seems only to have been inserted out of an abundance of caution to ensure that s 50 does not apply to prior 2003 Act leases; rather than deal with or affect this present issue). It follows from these provisions that the application of the 2003 Act to any particular lease may fluctuate in some instances, but in a more limited way than under the 1986 Act or the 1998 Act. This is because the only time at which ‘fluctuation’ can occur is between the date upon which the lease is first entered into and any date or dates upon which it is renewed; apart from a surrender and re-grant by operation of law: see Pascoe-Webbe v Nusuna Pty Ltd (1985) 3 BPR 97,231 (per Young J). Except when the lease is entered into or renewed, subs 11(2) prevents a lease being caught by the Act; however, it is unclear whether it precludes the Act from ceasing to apply to a lease during the term of the lease. This is a more satisfactory situation than ‘fluctuation’ at any time as a result of the determination of the application of the Act depending upon circumstances existing at the time at which a dispute arises and proceedings are taken. Nevertheless, it does leave open the possibility of leases drafted without regard to the possible application of the 2003 Act being subsequently caught by its provisions with the sort of unsatisfactory consequences that occurred in some of the cases decided under the earlier Acts. These provisions should be kept in mind in terms of the possible application of the disclosure requirements of the legislation. For further discussion in relation to the time at which application of the 2003 Act is to be determined, see Retail Leases Victoria [30,005].

Commencement of leases [23.12] Section 7 of the 2003 Act makes express provision as to the time a retail premises lease is entered into or assigned: see Retail Leases Victoria [30,010]. These provisions are in substantially the same form as the provisions of subs 3(4) of the 1998 Act which, in turn, was in the same terms as subs 3(4) of the 1986 Act, but with some additions which specifically accommodate lease assignments and confirm what was probably implied in the 1986 Act provisions, namely that the tenant’s entering into possession of the premises in the relevant sense must mean lawfully under the terms of the lease; and so, in that sense, ‘with the consent of the landlord’. The drafting of the provisions of

s 7 of the 2003 Act appeared to cause some confusion because rather than following the formula of the corresponding provisions of the earlier Acts by listing relevant matters and concluding [page 729] with the words ‘whichever first occurs’ the 2003 Act nominated the critical time as the occurrence of ‘either’ of the elements; which are now split up into paras (a), (b) and (c) of the new s 7 which was substituted by the 2005 Amendment Act. The new provision, which is now more correct grammatically (because there were really always three possibilities, rather than two alternatives), is in the following terms: 7.

New section 7 substituted For section 7 of the Principal Act substitute — ‘7. When retail premises lease is entered into or assigned For the purposes of this Act, a retail premises lease is entered into or assigned when — (a) under the lease or assignment, the tenant enters into possession of the premises with the consent of the landlord; or (b) under the lease or assignment, the tenant begins to pay rent for the premises; or (c) the lease or assignment has been signed by all of the parties to it — whichever first occurs’.

The separation of the elements of the original para 7(a) of the 2003 Act into new paras 7(a) and (b) apparently serves to emphasise that both elements in the original paragraph were to read as qualified by the opening words ‘under the lease or assignment’. This would also appear to reinforce the strict approach to the application provisions of the 1986 Act and the 1998 Act by the Court of Appeal in Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 at 64,485–6 ([25]–[30]) (Phillips JA, with

whom the other members of the Court of Appeal, Ormiston and Charles JJA agreed); an approach equally applicable with respect to the provisions of the 2003 Act. A similar strict approach is evident in the decision of Deputy President Macnamara in VCAT in the context of the application of the disclosure requirements of s 8 of the 1998 Act in Rogowski v Bedelis Investments Pty Ltd (2001) V ConvR ¶58-562 at 65,094-6 (though the end result of the discussion of Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 in this context was complicated by the decision of Judge Davey, sitting as a Vice President of VCAT, in Khodr v Foo Quan Eng Holdings Pty Ltd (No 2) (2001) V ConvR ¶58-558 which depended on the meaning of ‘prospective’ for the purposes of the disclosure requirements of s 8 of the 1998 Act and which Deputy President Macnamara felt constrained to follow). Nevertheless, this did not appear to detract from or cast doubt upon the general principle arising from Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 in relation to the application provisions of the retail leases legislation (and see Temptress Nominees Pty Ltd v Constantinou (2001) V ConvR ¶58-563 at 65,109 (VCAT; Deputy President Macnamara); and Retail Leases Victoria [30,010]). Section 7 was considered by Croft J in Versus (Aust) Pty Ltd v ANH Nominees Pty Ltd [2015] VSC 515 at [51]–[54]. [page 730] The critical events for the purposes of s 7 include all parties signing the lease (or assignment): see new para 7(c). This requirement has been interpreted, in the context of the corresponding provisions of para 3(4)(b) of the 1998 Act, as meaning the signing of some formal document, not merely the signing of a letter or notice exercising an option to renew the lease: see Russfam Pty Ltd v Benassi’s Shoes Pty Ltd (1999) V ConvR ¶58-533 (M F Macnamara, Deputy President)]; and see also Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR ¶58-546 (M F Macnamara, Deputy President); Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376; BC200307829; Ross-Hart Pty Ltd v Cianjan Pty Ltd [2009] VCAT 829, [32] (M F Macnamara, Deputy President); Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2015] VSC 515

(Croft J at [54]). This position would appear to be confirmed for the purposes of the 2003 Act by the requirements of s 16 which, subject to a penalty of 10 penalty units, provides that a landlord or tenant must not enter into a retail premises lease that is not in writing and signed by all of the parties to it: see Retail Leases Victoria [30,085]. The relationship between s 7 and s 52 of the 2003 Act (landlord’s obligation to maintain premises) (discussed at [23.50]) was considered by Croft J in Versus (Aus) Pty Ltd v ANH Nominees Pty Ltd [2015] VSC 515 at [51]–[54]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Assignments of lease [23.13] Section 8 of the 2003 Act now (as compared to the earlier legislation in its form unamended by the 2003 Act) makes specific provision as to the effect of an assignment of a retail premises lease (see Retail Leases Victoria [30,025]), as follows: 8.

Effect of assignment of retail premises lease For the purposes of this Act, an assignment of a retail premises lease is taken to be a continuation of that lease (and not the entering into of a new lease).

In relation to assignments of leases to which the 2003 Act applies in any event, s 8 would appear to settle the controversy as to the effect of assignment of the lease term of retail premises leases which arose under the 1986 Act or the 1998 Act as a result of the decision in Bradbun Pty Ltd v Bobo Nominees Pty Ltd (1994) V ConvR ¶54-501 (per O’Bryan J). As the discussion of Bradbun v Bobo Nominees indicates, whilst it is clear enough that the effect of this decision, so long as its authority remains intact, was that an assignment of the lease term of a 1986 Act lease produced a new lease for the purposes of that Act, it was not so clear that the same result would follow under the 1998 Act, either in terms of the assignment of a lease under the then former 1986 Act or where the lease term of a 1998 Act lease was assigned. Against this background and having regard to the words of s 8, it would seem clear that the assignment of the term

[page 731] of a ‘retail premises lease’ under the 2003 legislation would not produce a new lease on the Bradbun v Bobo Nominees reasoning. Nevertheless these provisions do not settle the issue of the effect of the assignment of the lease term of a ‘retail premises lease’ under the 1986 Act or the 1998 Act (in their form prior to any amendment by the 2003 Act) or of a lease unregulated by any of these earlier Acts after the commencement of the 2003 Act. There is nothing in s 8 which suggests that the analysis of the Court of Appeal in Antonino Guiseppina Ensabella & Son Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54626 — which, strictly, confined the operation of the provisions of the 1986 Act and the 1998 Act (with respect to rent review) to leases within the application provisions of s 4 of those Acts — should be departed from with respect to those Acts or the 2003 Act. It is suggested that this position is in fact reinforced by the 2003 Act which does contain some specific provisions directed to extending the application of the 2003 provisions to circumstances which the application provisions would not otherwise reach: see s 36 (rent review) and s 76 (unconscionable conduct); and see para 11(1)(b) (renewals prior to 1 May 2003), referred to above. This position would appear to be reinforced because amendments were made by the 2003 Act to both the 1986 Act and 1998 Act by inserting provisions in the same form as s 8 of the 2003 Act in s 4 (the application provisions) of both Acts, effective from 1 November 2003: see ss 101 and 111. On the basis that parliament must have intended that these three sets of identical provisions, in each of the three Acts, must each have been intended to have some work to do and in the absence of any overarching provision in the 2003 Act (and given the approach in Ensabella) it would seem that the Bradbun v Bobo Nominees principle would apply at the very least to an assignment of an unregulated lease after the commencement of the 2003 Act to bring it within the operation of that Act: but compare Saratoga Australia Pty Ltd v Vision Australia Ltd [2007] VCAT 1902 (13 October 2007), where Senior Member Walker applied the reasoning in Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR ¶58-546 (Deputy President Macnamara) against the application of Bradbun v Bobo Nominees in these; and see Retail Leases Victoria [30,025].

Leases for less than a year [23.14] The provisions of s 12 of the 2003 Act provide for the application of that Act, in certain circumstances, to leases for a term of less than a year: see Retail Leases Victoria [30,095]. These provisions were amended by the 2005 Amendment Act, in subs 12(2), to make clear that the continuous possession of 12 months required to attract the operation of the Act with respect to a lease for a term of less than one year is only to be calculated with respect to the period of continuous possession after the commencement of s 12, which was on 1 May 2003 with the commencement of other provisions of the 2003 Act. Subsection 12(2), as amended by the 2005 Amendment Act, now provides, with subs 12(1), as follows: [page 732] 12. Application if lease term of less than a year (1) This Act does not apply to a retail premises lease for a term of less than one year. (2) However, if the term of a retail premises lease is less than one year and as a result of either or both of the following — (a) the lease being renewed (one or more times); (b) the lease being continued — the tenant is continuously in possession of the retail premises for one year or more under the lease after the commencement of this section, this Act applies to the lease on and from the day on which the tenant has continuously been in possession of the retail premises for one year after that commencement. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act). These amendments are entirely consistent with the strict reasoning of the Court of Appeal in relation to the temporal limitations on the application of the retail leases legislation in Antonino Giuseppina Ensbella & Sons Pty Ltd v

Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 which, on that reasoning, would appear to have required the period for the purposes of subs 12(2) of the 2003 Act, as unamended by the 2005 legislation, to be calculated from the commencement of the first recurring period after 1 May 2003 (the commencement of the 2003 Act) because that is the first ‘lease’ for the purposes of the 2003 Act: see Retail Leases Victoria [30,005], [30,095] and [40,075]. The critical time for the application of these provisions is the day on which the tenant has been in possession of the retail premises continuously for one year: see Daco Enterprises Pty Ltd v The Golden Sultana Pty Ltd [2006] VCAT 2547 (Senior Member R J Young; 19 December 2006), Bob Jane Corporation Pty Ltd v Commercial Road Developments Pty Ltd [2007] VCAT 2120 (Deputy President C Aird; 13 November 2007) and G & L Panels Pty Ltd v Gargano [2009] VCAT 1704 (Senior Member Lothian, 26 August 2009). The consequences of the use of the expressions ‘continuously entitled to possession’ in subs 21(2A) and ‘entitlement to possession’ in subs 21(3), with respect to the tenant’s possession in the minimum five-year term provisions of s 21, in contrast to the use of the expression ‘continuously in possession’ in subs 12(2) as discussed in these cases should be noted: see [24] of the reasons in Golden Sultana and [30] following in Bob Jane: and, in relation to the minimum five-year-term provisions, see Retail Leases Victoria [40,075]). As the legislation does not define what is meant by ‘continuously in possession’, the general law would seem to apply in this respect. The general proposition or approach contained in the earlier legislation, that the legislative provisions do not apply to a retail premises lease for a term of less than one year, is reaffirmed in subs 12(1). This is, however, subject to the proviso in subs 12(2) [page 733] designed to avoid devices such as 364 day leases or, more generally, the position where a periodic tenancy, which may be a tenancy from month to month, simply runs on beyond 12 months. The effect of subs 12(2) is that the renewal of a lease for a term of less than one year or the continuation of a

periodic tenancy will attract the operation of the 2003 Act once the tenant has been continuously in possession of the retail premises for at least one year ‘under the lease’ (and under a lease to which the 2003 Act applies). The critical time for the application of these provisions is the day on which the tenant has been in possession of the retail premises continuously for one year after 1 May 2003: see subs 12(2), as amended in 2005, above. As the legislation does not define what is meant by ‘continuously in possession’, the general law would seem to apply in this respect. Consequently, a strict reading of these provisions would indicate that a 364 day lease with a break in possession of at least one day before the commencement of a fresh lease of 364 days would avoid the operation of s 12. Similarly, gaps in possession between periods of a periodic tenancy would have the same effect. The result would, of course, be a fresh tenancy after the ‘gap’ which may, in turn, be caught by s 12 depending upon the length of the fresh period of possession under the new lease. Also, as the provisions of subs 12(2) refer to the tenant being continuously in possession ‘under the lease’, it may be argued that the gaps in possession under the lease may exist in circumstances where the ‘tenant’ retains non-exclusive possession during these gaps as a licensee. However, the courts have not treated the labelling of tenancy agreements as licences very favourably and have consistently looked at the substance of the arrangement and found that exclusive possession will leave the arrangement to be construed as a lease regardless of the label: see [1.3], [1.4], [3.2] and [3.3]. Also, the reference to ‘the lease’ in the expression ‘under the lease’ may suggest that the grant of a fresh 364 day lease is itself sufficient to avoid the application of s 12(2) as a result of possession beyond the initial 364 day period being possession under another lease and not under ‘the lease’; though the holding over provisions of s 10 may militate against this position: and see Retail Leases Victoria [30,100]. As against these types of interpretation is the general view that the retail tenancy legislation is ameliorating or remedial legislation and its provisions should be construed in favour of its having the desired ameliorating or remedial legislative purpose: see [23.8].

Effect of holding over [23.15] Sections 11 and 12 of the 2003 Act should also be read with s 10 which makes express provision for holding over under a retail premises lease:

10. Holding over under a retail premises lease If, in accordance with a retail premises lease, the tenant continues to be in possession of the retail premises for a period after the lease has expired, the lease is taken to continue for the purposes of this Act while the tenant is in possession of the premises. [page 734] The scheme of these provisions would seem to be that where the operation of s 11 is attracted because of the application of subs 12(2), s 10 will provide a deemed extension of the lease for the purposes of the Act while the tenant remains in possession of the premises. It should be noted that s 10 is prefaced by the words ‘if, in accordance with a retail premises lease …’ which suggests that it can only operate in circumstances where a retail premises lease has already subsisted; such as where subs 12(2) operates or where a lease term for more than one year has simply run out: see also Retail Leases Victoria [30,100]; and the references to other provisions of the 2003 Act which effect extensions to the lease term. This view was confirmed in Bob Jane Corporation Pty Ltd v Commercial Road Developments Pty Ltd [2007] VCAT 2120 (Deputy President C Aird; 13 November 2007); but compare Awad v Connell [2009] VCAT 1806 where Senior Member Walker said (at [53]) that he was not certain that s 10 was confined to retail premises leases to which the Act already applied. As to the possible effect of these provisions with respect to the operation of the statutory minimum term provisions of s 21, see the discussion of Daco Enterprises Pty Ltd v The Golden Sultana Pty Ltd [2006] VCAT 2547 (Senior Member R J Young); see also Awad v Connell [2009] VCAT 1806 (Senior Member R Walker; 7 November 2016): and see Retail Leases Victoria [30,100] and [40,075]. These provisions must also be considered in conjunction with provisions which have the effect of extending the lease term in the event that the landlord fails to give a tenant notice of an option to renew (s 28), fails to give a tenant a notice of the landlord’s intentions concerning renewal (s 64) or the statutory minimum five-year term provisions: s 21. The provisions of s 10 would not appear to affect the general law rules with respect to the

termination of periodic tenancies (as to which see Chapter 20, particularly [20.5] in relation to the rule that a notice to quit must expire at the end of the recurring period of the periodic tenancy and [20.7] in relation to ‘ambulatory’ notices to quit, with particular reference to Harty v Kolman [1977]1 NSWLR 674; and as to the determination of periodic tenancies generally, see Robyn Toogood Real Estate Pty Ltd v Healey [2008] VCAT 905 at [24] (Deputy President Macnamara)).

Leases entered into under an option [23.16] The provisions of subs 9(1) of the 2003 Act, which have the effect of defining ‘renewal’ for the purposes of that Act, have been constrained in their possible broad application by the addition of a further requirement, in para 9(1)(b). This paragraph is the provision which expanded the definition of ‘renewal’ beyond what might be said to be a true renewal at common law as a result of the acceptance (according to the ‘mirror’ principle of contract law) of the standing offer constituted by an option to renew a lease: see B S Stilwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589; and see Retail Leases Victoria [30,015]. The constraint or further requirement imposed by the 2005 Amendment Act arises as a result of the addition of the words [page 735] ‘on substantially the same terms and conditions, except as to rent’ to para 9(1) (b). This means that a ‘renewal’ for the purposes of the 2003 Act includes both a ‘true’ renewal on the basis spelt out in Stilwell’s case and, additionally, a renewal under a fresh agreement to renew provided the lease, as renewed, is on substantially the same terms and conditions, except as to rent. The expanded definition of ‘renewal’ under the provisions of the 2003 Act did appear to have substantive consequences in terms of the disclosure requirements under that Act (see Retail Leases Victoria [40,105]) and, possibly, the minimum five-year term provisions of s 21 of the 2003 Act, depending upon the particular circumstances: see Retail Leases Victoria [40,075]. As indicated in Retail Leases Victoria ([30,015]), apart from the possible consequences that flow from the provisions of subss 9(2) and (3), it is difficult

to see why, on Stilwell’s case principles, an agreement to renew for a further term should not otherwise be treated in the same way as a ‘true renewal’ which falls within para 11(1)(a). In any event, the introduction of the further qualifying words in the 2005 Amendment Act may have the effect of introducing further uncertainty as a result of the need to determine whether the agreement to renew the lease is ‘on substantially the same terms and conditions except as to rent’. This requirement appears to raise similar issues to those discussed by Hayne J in Rialta Pty Ltd v Handbags International Pty Ltd (1993) V ConvR ¶54-469 in relation to whether a lease entered into after the commencement of the 1986 Act was exempt from the application of Pts 2 and 4 of that Act under subs 4(3) on the basis that it arose out of an agreement made before the commencement of the 1986 Act. The tenant, in the Rialta case argued that the exemption should be construed strictly so that a lease could not be said to have been made ‘under’ an agreement unless the lease was in a form which would have resulted from an order for specific performance of the agreement for lease. The landlord, on the other hand, argued that the exemption should apply as long as the lease, the product of the agreement, was for the same subject matter, the same term and the same rent as that required by the agreement for lease. A comparison was made between the agreement and the lease and it was found that some of the terms contained in the ‘standard lease’ which had been entered into had not been dealt with in the correspondence which constituted the agreement. It seems, however, that a degree of latitude may have been permitted. Hayne J said (at 65,480) that this ‘is not to find that the parties have made some new or different agreement from that originally struck’. It was held, on the basis of a comparison with the correspondence and the standard lease, that there was no departure from or addition to the agreement struck previously. In relation to the tenant’s argument with respect to specific performance, Hayne J said (at 65,481): Handbags International contended that a lease could be said to be made ‘under’ an agreement if and only if the lease made was that which would have resulted had a court ordered specific performance of the agreement for lease. It is unnecessary to decide which of these constructions is to be preferred because I am of the opinion that even

[page 736] adopting the test propounded by Handbags International, the lease that was made in this case was one that would have been made had specific performance been ordered of the agreement of March 1987. It is therefore unnecessary to decide (and I express no view on) whether that or some less stringent test must be met in order to show that a lease was one made ‘under’ an agreement made before the commencement of the Retail Tenancies Act. It will be seen that these words do introduce a degree of uncertainty, which will remain even when the Victorian Civil and Administrative Tribunal and the Supreme Court have resolved the question whether the test, in terms of the requisite conformity between the terms and conditions of the lease and the agreement to renew the lease, is cast in strict or more liberal terms. These issues should also be considered in the context of the cases on surrender and re-grant of leases by operation of law (see, particularly, Pascoe-Webbe v Nusuna Pty Ltd (1985) 3 BPR 97,231 (SC, NSW per Young J) where it was held that a relatively slight alteration to a lease might effect a surrender and re-grant rather than a mere variation (see Young J in Pascoe-Webbe at 9622), though the question is ultimately one of intention. Applying these principles, if an agreement to renew the lease provides for lease terms sufficiently different from the terms of the lease itself such that they would, as a variation of that lease, be held to effect a surrender and re-grant by operation of law, it is difficult to see how an agreement to renew could be said to be ‘on substantially the same terms and conditions’ as the lease, even allowing for a variation of the rent covenant. Further, in relation to the latter, presumably the addition to para 9(1)(b) is not intended to go beyond permitting changes in dollar amounts or minor adjustment of the rent review machinery to accommodate its operation over a new, subsequent, rental period. For the reasons indicated, it would seem difficult to contemplate that any variation in the provisions for rent review could be regarded as falling within the exception as rent (save for minor, machinery, variations; for example, as to rent review dates during the new lease term). It should also be noted that, in spite of the amendment of para 9(1)(b) of the 2003 Act, no amendment has

been made to subs 21(2) of the 2003 Act which has the effect of disregarding an option conferred after the lease was entered into for the purposes of calculating the minimum five-year term entitlement under subs 21(1): see Retail Leases Victoria [40,075]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Other provisions [23.17] Section 13 of the 2003 Act provides that the Act applies to retail premises in Victoria regardless of: (a) where the lease was entered into; and (b) whether the lease purports to be governed by a law other than the law of Victoria. [page 737] These provisions reflect subs 4(4) of the 1986 Act and subs 4(2) of the 1998 Act: see Retail Leases Victoria [30,005]. Section 14 of the 2003 Act provides that the Act binds the Crown in right of the State of Victoria and also in all its other capacities to the extent that the legislative power of Victoria will extend. This provision is in substantially the same terms as s 6 of both the 1986 Act and the 1998 Act: see Retail Leases Victoria [30,005].

Meaning of ‘retail premises’ ‘Retail premises’ defined and the nature of retailing [23.18] The provisions which define ‘retail premises’ are now contained in a separate provision — s 4 of the 2003 Act: see Retail Leases Victoria [30,035]. Although the general structure and content of s 4 reflects the definition of ‘retail premises’ contained in subs 3(1) of both the 1986 Act and the 1998 Act there are some very important differences. Section 4 provides as follows:

4.

Meaning of ‘retail premises’ (1) In this Act, ‘retail premises’ means premises, or a part of premises, that under the terms of the lease relating to the premises or part are used, or are to be used, wholly or predominantly for — (a) the sale or hire of goods by retail or the retail provision of services; or (b) the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies. (2) However, ‘retail premises’ does not include the following premises — (a) premises in respect of which the occupancy costs (as defined in subsection (3)) under the lease concerned is more than the amount prescribed by the regulations for the purposes of this paragraph; (b) premises that are used wholly or predominantly for the carrying on of a business by a tenant on behalf of the landlord as the landlord’s employee or agent; (c) premises the tenant of which is — (i) a listed corporation (as defined in section 9 of the Corporations Act); or (ii) a subsidiary (as defined in section 9 of the Corporations Act) of such a corporation; (d) premises the tenant of which is — (i) a body corporate whose securities are included in an official list of a stock market (as defined in section 9 of the Corporations Act) outside Australia and the external Territories; and [page 738]

(ii) a subsidiary (as defined in section 9 of the Corporations Act) of such a body corporate; (e) premises used wholly or predominantly for the carrying on of a specified business or a specified kind of business that the Minister determines under section 5 is a business to which this paragraph applies; (f) premises of a kind that the Minister determines under section 5 are premises to which this paragraph applies. (3) In subsection 2(a), ‘occupancy costs’ means — (a) the rent payable under the lease, not being rent (or any part of rent) that is to be determined by reference to the turnover of a business; and (b) outgoings of a prescribed kind to which the tenant is liable to contribute under the lease; and (c) any other costs of a prescribed kind that the tenant is liable to pay under the lease. (4) Regulations made for the purposes of subsection (2)(a) may — (a) prescribe an amount; or (b) prescribe a method by which an amount may be calculated. Note: This Act may not apply to certain premises because of Part 3 (Application of the Act). Generally, the cases establish that ‘retail’ with respect to goods involves sale and delivery, though a retailer may occasionally enter into executory contracts to sell, and that selling by retail involves the sale to members of the public. It should be noted that the definition applies not only to the sale or hire of goods by retail but also to the ‘retail provision of services’. In Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333; (1990) V ConvR ¶54-387 Nathan J said that the use of the word ‘or’ between the words ‘the sale or hire of goods by retail’ and ‘the retail provision of services’ was disjunctive so that the definition applies to both retail sales and hirings and provision of retail services: at [1991] 1 VR 334; (1990) V ConvR ¶64-752. In

Provident Life Assurance Co Ltd v Official Assignee [1963] NZLR 961 it was held that retail provision of goods or services denoted their provision directly to the public. The definition of retail premises was first considered by Kaye J in 536 Swanston Street Pty Ltd v Harbrut Pty Ltd (1988) V ConvR ¶54-323; BC8800578. The lease in this case was in respect of premises to be used as ‘cabaret, restaurant and/or discotheque’. Entry into the premises was open to the public on payment of an admission fee. Customers were entitled to enjoy the music and entertainment provided and to dance. Food and drink were available for purchase. Three issues arose concerning the application of the statutory definition of ‘retail premises’. First, were the premises used ‘wholly or predominantly for the carrying on of a business’? Kaye J answered this in the affirmative, stating (at 64,088) that the business was the provision of entertainment by way of discotheque, restaurant and cabaret facilities. Secondly, did the business involve [page 739] the sale or hire of goods by retail or retail provision of services? Again, the answer was affirmative. Kaye J (at 64,088) stated that ‘involve’ is to be given its ordinary and everyday meaning, namely as ‘including’. Finally, what was the meaning of ‘retail’? On this point, Kaye J stated (at 64,088): … I have been referred to several definitions by authorities of what is described as retail shop and retail trade. Perhaps the most succinct statement from which assistance is to be derived is from that made by Viscount Dunedin in his speech in Turpin v Middlesbrough Assessment Committee & Kaye & Eyre Bros Ltd [1931] AC 451 at 474. His Lordship then said, referring to buildings, that they were buildings to which the public can resort for the purpose of having particular wants supplied and services rendered to them. It is, in my view, clear that the demised premises fall within that description of being available to members of the public for the purposes of having their food and drink requirements supplied and services of discotheque entertainment provided to them. Accordingly, in my view, the demised premises are retail premises within the meaning of the Act.

This decision was applied by Nathan J in Wellington v Norwich Union in relation to premises leased to patent attorneys. Nathan J held that the pursuit of professional practice of this nature did, on the authorities, amount to the conduct of a business; a business providing retail services (a decision approved by Ashley J in FP Shine (Vic) Pty Ltd v Gothic Lodge Pty Ltd [1994] 1 VR 194; (1993) V ConvR ¶54-472 at 65,528 and see Hitech Pathology Pty Ltd v Bankberg Pty Ltd (1999) V ConvR ¶58-536 at 68,169). Nathan J said that the same applies to the conduct of other professional businesses such as solicitors, architects and medical specialists. In relation to retailing, generally, his Honour said (at VR 336; V ConvR 64,753): The essential feature of retailing, is to my mind, the provision of an item or service to the ultimate consumer for fee or reward. The end user may be a member of the public, but not necessarily so. In support of this conclusion, I call in aid not only common sense but the Macquarie Australian Dictionary which defines retail as being a sale to an ultimate consumer, usually in small quantities. When the verb is used in the transitive form, it is to sell directly to the consumer. The fact that the advice may pass through the hands of an intermediary to the ultimate consumer or end user does not appear to matter, provided it comes in a form that cannot be amended and is the product of the intellect of the deliverer: see at VR 338; V ConvR 64,755; see also Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd (at [15]–[20]) (Croft J); CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23 (Croft J) (affirmed by the Court of Appeal in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178). The authorities indicate that the touchstone of retailing is selling to the ‘ultimate consumer’: see Wellington v Norwich Union at VR 336; V ConvR 64,753 (above); Sofos v Coburn (1992) V ConvR ¶54-439 at 65,150 (per Nathan J); Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd (at [17]–[18]); CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23 at [27]–[28]; Hitech Pathology Pty Ltd v Bankberg [page 740]

Pty Ltd at (1999) V ConvR 68,169. Similarly, the Full Court of the Federal Court in Collector of Customs v Chemark Services Pty Ltd (1993) 42 FCR 585; 114 ALR 531 at 536 followed the Western Australian Full Court in Plummer and Adams v Needham (1954) 56 WALR 1, referring to the following passages in the judgments (at FCR 590; ALR 536): Dwyer CJ in Plummer stated (at 5–6): According to the Oxford Dictionary, retail is selling goods in small quantities; Webster’s Dictionary gives an alternative meaning, viz a sale directly to a consumer. That alternative has justification in the decision of the Court of Appeal in Phillips v Parnaby [1934] 2 KB 299, in which case the goods consisted of one parcel of two tons of coal, not a small quantity. In my opinion, where the commodity sold is, as in the case before us, a single unit and in a form in which it is commonly purchased by a buyer for his own use, its bulk and price are immaterial. Similarly, Virtue J in Plummer held (at 15–16): Some support for the appellants interpretation of ‘sale by retail’ as referring to a sale in small quantities may no doubt be derived from the etymology of the word and also from its primary meaning as given in the standard dictionaries. But the word has undoubtedly acquired a specialised meaning of sales to an ultimate consumer as opposed to sales to the trade for the purpose of resale. Continuing, the Full Court of the Federal Court in Chemark said (at FCR 590; ALR 536): In Chappell & Co Ltd v Nestle Co Ltd [1959] 2 All ER 701; [1960] AC 87, Viscount Simonds observed at 102: It is a sale to a consuming member of the public and I know of no other factor which distinguishes a retail sale from other sales. Put negatively, it is not a sale wholesale to a purchaser who proposes himself to sell it retail. The ‘ultimate consumer’ test is also supported by Treacher and Co Ltd v Treacher [1874] WN 4; Phillips v Parnaby [1934] 2 KB 299 at 304 (per Lord

Hewart CJ) and Provident Life Assurance Co Ltd v Official Assignee [1963] NZLR 961 at 965 (per North P and Turner J). The ‘ultimate consumer’ test also received support from the consideration by Nathan J of the authorities on what is comprehended by the provision of retail services in Wellington v Norwich Union (at [1991] 1 VR 336–9 (esp 336); (1990) V ConvR 64,753–4); which was approved by Ashley J in FP Shine v Gothic Lodge (at [1994] 1 VR 199; (1993) V ConvR 65,528; see also Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd (Croft J) and CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd (Croft J)) (affirmed by the Court of Appeal in IMCC Group (Australia) Pty Ltd v CB Cold Storage Pty Ltd [2017] VSCA 178); and see Retail Leases Victoria [30,055]. It will be seen that the retail business component, both in terms of the sale or hire of goods by retail or the retail provision of services element of the former definition, has generally been retained: see Retail Leases Victoria [30,035] and [30,040]; and [page 741] see [30,045] as to the meaning of the word ‘business’. There is, however, an important difference in the wording of subs 4(1) as a result of the deletion of the word ‘business’ to avoid the confusion as to whether the reference to use ‘wholly or predominantly’ was directed only to the use of the premises for the carrying on of a business and not to the extent to which the business included retail selling or hiring or the retail provision of services: see [23.19]. The effect of these changes was considered by the Victorian Supreme Court in Brimbank City Council v Westvale Community Centre Inc [2006] VSC 100 (Williams J). It was held that it was not essential that the ‘retail’ use be ‘commercial’ in the generally accepted sense of that word. Thus, premises leased for what may be described, in general terms, as ‘community purposes’ at a nominal annual rent of $100 were considered to be ‘retail premises’ for the purposes of the 2003 Act: see Retail Leases Victoria [30,055]. The consequences of this decision are now avoided significantly as a result of the Ministerial Determination (Leases by Councils) which came into effect on 1 August 2008: see [23.22] and [23.53].

Under the definition of ‘retail premises’ in s 4 of the Retail Leases Act 2003 (and under the definition of ‘retail premises’ in subs 3(1) of both the 1986 Act and the 1998 Act) the relevant use is that provided for ‘under the terms of the lease relating to the premises’: see Sofos v Coburn; Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505 at 512; (1994) V ConvR ¶54-492; Hitech Pathology Pty Ltd v Bankberg Pty Ltd; Cambridge Co-ordinates Pty Ltd v Vikings Press Pty Ltd (2001) V ConvR ¶58-553 (M F Macnamara, Deputy President) and see Joad Pty Ltd v Ospies Hotels Pty Ltd [1995] 1 VR 198 at 203; (1994) V ConvR ¶54-505 at 65,788). In Cambridge Co-ordinates Pty Ltd v Vikings Press Pty Ltd Deputy President Macnamara held (at 28]) that ‘under the terms of the lease relating to the premises’ in subs 4(1) should be read as meaning ‘in accordance with’ the terms of the lease. Depending upon the terms of the lease and the particular circumstances, the tenant will not be in breach of a user covenant specifying a particular permitted business or business merely because ancillary activities take place at the premises (see Retail Tenancies Award No 14 — Farley Bay Pty Ltd v Thomas (1996) V ConvR ¶58-523 (G H Golvan QC). The ambit of the permitted use provisions of a lease is, of course, a matter of construction: see AMP Life Ltd v Lillium Pty Ltd (2001) V ConvR ¶58-551; [2000] VCAT 34 in relation to a ‘Make Your Own Sandwich’ shop and the sale of alcoholic beverages, which was held not to be permitted. As to issues of construction, rectification and equitable estoppel in this respect, see Barton v Lantsbery [2004] VCAT 926 (Deputy President Macnamara; 17 May 2004); Reinforcement Scheduling Pty Ltd (t/as Camelot Receptions) v 1736 Dandenong Road Pty Ltd [2004] VCAT 1349 (Deputy President Macnamara; 18 June 2004); and Phillip Webb Pty Ltd v 483 Whitehorse Road Pty Ltd (Deputy President Macnamara, 29 August 2006, unreported), referring (at [24]) to Montross Associated Investments SA v Moussaieff [1992] 1 EGLR 55. Difficult issues may also arise with respect to the proper construction and ambit of user covenants in leases in the context of provisions which [page 742] are directed to restraining the landlord from letting or allowing other nearby

premises to be used for competing uses. In order to determine questions of this nature it will generally be necessary to determine the ambit of the permitted user covenant under the lease which is to benefit from the restraint and also to determine extent of the restraint. The process is well illustrated by Sanctuary Lakes Real Estate Pty Ltd v Sanctuary Lakes Centre Pty Ltd [2007] VCAT 2292 (Deputy President Aird; 4 December 2007) where it was necessary to determine whether the restraint extended to the grant of both further leases and licenses, whether the further grant was a lease or a licence and whether the selling of land owned by a subsidiary of the selling company for a limited period involved the carrying on of the business of a real estate agency, which was the subject of the restraint. It appears, on the basis of the authorities as they now stand, that regard must be had to actual use and not merely the permitted use: see Cambridge Co-ordinates Pty Ltd v Vikings Press Pty Ltd (2001) V ConvR ¶58-553 (Deputy President Macnamara); and see Retail Leases Victoria [30,060]. The analysis of the authorities in Cambridge Coordinates is, of course, in the context of the provisions of the 1998 Act. In terms of the 2003 Act, the effect of subs 11(2) of that Act may be to limit consideration of the actual use to the time at which the lease is entered into (as to the time at which a retail premises lease is ‘entered into’ for the purposes of the 2003 Act, see s 7 of that Act: see Retail Leases Victoria [30,065.10] as to the effect of subs 11(2). If the premises are not actually in use at the time at which the lease is entered into, then the lease terms alone (or the terms of any agreement for lease) would appear to govern. It is not uncommon for premises to be subject to an agreement for lease where parties agree to lease buildings which are to be constructed, the lease term commencing on the completion of building works, commonly after an allowance of time for tenant’s fitout work. (See, generally, Moweno Pty Ltd v Stratis Promotions Pty Ltd [2004] ANZ ConvR 230; [2003] NSWCA 376; BC200307829, where issues of this nature are discussed, albeit in a different legislative context.) Another aspect of the reference to ‘under the terms of the lease’ is that it would appear to follow from these words and the other parts of the definition of ‘retail premises’ that if the premises are used for retail purposes they must be used for these purposes by the tenant under the lease. The use of a service company as the tenant may raise issues as to the application of the Act on the basis that the service company tenant does not carry on any retail business.

Nevertheless, where this occurs on an agreed basis where the parties contemplate retail use the arrangement may be construed in such a way as to fall under the Act: see V & L Li Nominees Pty Ltd v Sandhurst Trustees Ltd [2002] VCAT 391 (Deputy President Macnamara); and see Retail Leases Victoria [30,060]. The reference to ‘the premises or part’ would seem to be intended to accommodate the possibility of a residential area in the premises: see s 95 which deals with the occupation of a residential area under a retail premises lease, and which is discussed at [23.23]; and see [23.19]. [page 743] Paragraph 4(1)(b) is a new provision to accommodate a determination by the minister, under s 5, that a specified business or a specified kind of business is a business to which para (b) applies. This provision is reflected in the excepting provisions of para 4(2)(e). The excepting provisions applicable to the ‘retail premises’ definition contained in subs 4(1) are contained in subs 4(2): see Retail Leases Victoria [30,070]–[30,080]. The very significant difference between these excepting provisions and those contained in excepting provisions to the ‘retail premises’ definition in the previous Acts is the replacing of the ‘floor area’ exception with an ‘occupancy costs’ exception (in para 4(2) (a)). Premises where the ‘occupancy’ costs exceed $1,000,000 (exclusive of GST) per annum are excluded from the definition: see reg 6 of the Retail Leases Regulations 2013. The provisions of the 2003 Act which define the expression ‘retail premises’ were amended by the provisions of s 5 of the 2005 Amendment Act. These provisions are minor, as a matter of drafting, but are, nevertheless, of some significance. Section 5 is as follows: 5.

Meaning of ‘retail premises’ (1) In section 4(1) of the Principal Act, for ‘or a part of premises’ substitute ‘not including any area intended for use as a residence’. (2) In section 4(1) of the Principal Act omit ‘or part’.

(3) For section 4(2)(d)(i) of the Principal Act substitute — ‘(i) a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges; or’; (4) In section 4(2)(f) of the Principal Act, for ‘applies’ substitute ‘applies;’. (5) After section 4(2)(f) of the Principal Act insert — ‘(g) premises the tenant of which is a kind of tenant that the Minister determines under section 5 is a tenant to which this paragraph applies; (h) premises the lease relating to which is a kind of lease that the Minister determines under section 5 is a lease to which this paragraph applies.’. (6) For section 4(3)(b) of the Principal Act substitute — ‘(b) the outgoings, as estimated by the landlord, to which the tenant is liable to contribute under the lease; and Note: Section 46 requires the landlord to give the tenant a written estimate of the outgoings to which the tenant is liable to contribute’. These amendments did not, however, change the overall structure and effect of s 4 of the 2003 Act: see Retail Leases Victoria [30,040]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). [page 744]

Wholly or predominantly [23.19] It will be recalled that the central requirements of the definition of ‘retail premises’ under subs 3(1) of the 1986 Act and the 1998 Act appeared, at least potentially, to be contradictory. On one view, the expression ‘wholly or

predominantly’ which was used as part of the definition in the context of ‘wholly or predominantly for the carrying on of a business involving the sale or hire of goods by retail or the retail provision of services’ might have been thought to be directed only to the use of the premises for the carrying on of a business and not to the extent to which the business included retail selling or hiring. It seemed that the potential inconsistency in the previous provisions was resolved in favour of the view that the effect of the definition was to require a predominant use of the provisions for the sale of goods or services by retail, not merely a predominant business use: see Cambridge Co-Ordinates Pty Ltd v Vikings Press Pty Ltd (2001) V ConvR ¶58-553 at 65,036–7 (Deputy President Macnamara, VCAT); and see Retail Leases Victoria [30,050]. Nevertheless, having regard to the apparent purpose of the Act to provide a degree of protection to retail tenants, it does not appear that parliament could have intended that its provisions would apply to premises which are being used for the conduct of a business (either wholly or predominantly) where that business is only incidentally engaged in retail selling or hiring or the retail provision of services. The decisions of Nathan J in Wellington v Norwich Union Life Insurance Society Ltd and Smith J in Peppercorn Nominees Pty Ltd v Loizou (1997) V ConvR ¶54-560 are consistent with this purposive approach. Although the decision of Kaye J in 536 Swanston Street v Harbrut may suggest the contrary position (especially at 64,088), it is on the facts and in substance also consistent with this more purposive approach (as is the decision of Nathan J in Wellington v Norwich Union). In Bretair Pty Ltd v Cave [2012] VCAT 1039 (Senior Member Riegler) rejected an argument that a service station and restaurant business were not retail premises because they occupied only a small part of a large area of leased land. The position was complicated under the 2003 Act by the addition of the words ‘or part’ which appear to qualify the word ‘premises’ in subs 4(1) of that Act. It seemed unlikely that parliament had intended to abrogate the approach to the previous definitions of ‘retail premises’ in the 1986 Act and the 1998 Act merely by the addition of these words. Consequently, an explanation which appeared to give them some meaning, but consistently with the approach in Cambridge Co-Ordinates, of which parliament might be presumed to have been aware, appeared to be provided by reference to s 95 which deals

with the occupation of a residential area under a retail premises lease. It followed that the words ‘or part’ in subs 4(1) were to be taken, consistently with s 95, to be a reference, for the purposes of the retail leases aspect of the lease, to that part excluding the residential area of any premises: see Retail Leases Victoria [30,050]. This view appears now to be confirmed by the words to be substituted for ‘or a part of [page 745] premises’ in subs 4(1) of the 2003 Act, namely ‘not including any area intended for use as a residence’. Subsection 5(2) of the 2005 Amendment Act is a consequential provision in the same vein. In Stringer v Gilandos Pty Ltd [2012] VSC 361 Croft J said (at [64]) that ‘not including any area intended for use as a residence’ in subs 4(1) was referring to accommodation that was occupied ‘with a degree of permanence’. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Exceptions to the ‘retail premises’ definition (and application of the Act) Occupancy costs exception [23.20] The excepting provisions applicable to the ‘retail premises’ definition contained in subs 4(1) of the 2003 Act are contained in subs 4(2) of that Act. The most significant difference between these excepting provisions and those contained in the excepting provisions to the ‘retail premises’ definition contained in the previous Acts is the removal of the ‘floor area’ exception (which is contained in para (a) of the 1986 Act and 1998 Act excepting provisions) as the principal exception and indicia of the scale of business the legislation is intended to target, and its replacement with an ‘occupancy costs’ exception (in para 4(2)(a) of the 2003 Act). The expression ‘occupancy costs’ is defined for the purposes of para 4(2)(a)

of the Retail Leases Act 2003 by subs 4(3) of that Act. These provisions should also be read with subs 4(4) which confers an express power to make regulations for the purposes of para 4(2)(a) prescribing ‘an amount’ or prescribing ‘a method by which an amount may be calculated’. The amount prescribed by reg 6 of the Retail Leases Regulations 2013 is $1,000,000 exclusive of GST. It will be seen that the ingredients of ‘occupancy costs’ for the purposes of subs 4(3) of the Act (which is set out at [23.18]) are: the rent payable under the lease, not being rent (or any part of rent) that is to be determined by reference to the turnover of a business; outgoings of a prescribed kind to which the tenant is liable to contribute under the lease; and any other costs of a prescribed kind that the tenant is liable to pay under the lease. The defining of ‘occupancy costs’ under subs 4(3) is, therefore, a process which involves a number of steps. The reference to rent in para 4(3)(a) must, in the absence of any statutory definition of rent, mean rent as understood by the common law; and as to the common law nature of rent, see Commissioner of State Revenue (Vic) v Price Brent Services Pty Ltd [1995] 2 VR 582 at 585–6; (1994) 94 ATC 4672 at 4675; BC9401299 (per Brooking J). [page 746] In paras 4(3)(b) and (c) of the 2003 Act ‘occupancy costs’ for the purposes of the occupancy costs exception contained in para 4(2)(a) of the 2003 Act are: (b) outgoings, as estimated by the landlord, to which the tenant is liable to contribute under the lease; and (c) any other costs of a prescribed kind that the tenant is liable to pay under the lease. ‘Outgoings’ is defined in s 3 of the 2003 Act. The s 3 definition should also be read with the provisions of Div 4 of Pt 5 of the 2003 Act, the provisions of which regulate the recovery of outgoings from tenants and the tenant’s liability to contribute to various species of outgoings and costs. For the purposes of subs 4(3)(c), reg 7 of the Retail Leases Regulations

2013 prescribes ‘advertising and promotional services, including marketing fund contributions’ as ‘another kind of cost’: see Retail Leases Victoria [30,075]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Employee or agency and public companies exceptions [23.21] The employee or agency exception contained in para 4(2)(b) of the definition of ‘retail premises’ in s 4 of the 2003 Act is provided for in the following terms: (a)

premises that are used wholly or predominantly for the carrying on of a business by a tenant on behalf of the landlord as the landlord’s employee or agent.

These provisions are substantially in identical terms (with some minor redrafting) to the provisions of para (c) of the definition of ‘retail premises’ in subs 3(1) of the 1986 Act and the 1998 Act: see Retail Leases Victoria [120,080] and [180,100], respectively. The elements of this exception are that the premises are used ‘wholly or predominantly’ for the carrying on of the relevant business, that the business be carried on by the tenant and, finally, that it be carried on by the tenant on behalf of the landlord as the landlord’s employee or agent. The nature and purpose of this exemption seems reasonably clear and to indicate that it was not intended by parliament that the Act should impose its regulatory regime in circumstances where the landlord and tenant relationship was merely incidental to another legal relationship between the parties, namely that of employer and employee or principal and agent. Issues also arise as to the time at which the existence or otherwise of an employee or agency relationship is to be determined. It is, of course, a question of mixed fact and law as to whether or not either of these relationships does exist at a particular time: see Retail Tenancies Award No 17 — Vanda W Holdings Pty Ltd v G & L Tierney Pty Ltd (1997) V ConvR ¶58-526; and on appeal in Tierney Pty Ltd v Vanda W Holdings Pty Ltd (1997) V ConvR ¶54-570; BC9705005 (per Eames J). [page 747]

In Stringer v Gilandos Pty Ltd [2012] VSC 361 Croft J considered the ‘employee or agency’ exception: see [69]–[95]. In Stringer, the operator of a resort complex managed the resort and leased units from the owners and then rented those units to members of the public. After considering the terms of the leases, his Honour rejected the operator’s claim that it was the landlord’s agent. His Honour said (at [94]): … the agency exception only applies if the tenant and landlord relationship is merely incidental to the agency relationship. So even if I am wrong in finding that there is no agency relationship, it cannot be said that the landlord and tenant relationship between the Plaintiffs and the Defendant is incidental to the agency relationship. The public companies exception, or exceptions, are provided for in paras 4(2)(c) and (d) of the 2003 Act. These provisions represent a variation of the former, so called, public (or non-proprietary) companies exception contained in para (d) of the definition of ‘retail premises’ in subs (1) of the 1986 Act and the 1998 Act: see Retail Leases Victoria [120,075] and [180,105]. The former excepting provisions combined an exception with respect to domestic public or non-proprietary companies with foreign companies of the same type which were rather loosely and ambiguously defined as corporations that ‘would not be eligible to be incorporated in Victoria as a proprietary company’: see para (d)(i) of the former provisions. The 2003 Act provisions seek to overcome the ambiguities inherent in the former provisions, some of which flowed from this attempt to combine the domestic and foreign corporation exceptions. Accordingly, para 4(2)(c) provides an exception, domestically, for listed corporations and their subsidiaries and para 4(2)(d) provides an exception for foreign listed corporations and their subsidiaries: see [23.18], where these provisions are set out. The provisions of subs 4(2)(d) of the 2003 Act were clarified by the 2005 Amendment Act by the substitution of a new paragraph (i), in the following terms: (i)

a body corporate whose securities are listed on the stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges;

These new provisions more closely define the exception insofar as the

inclusion of securities listed on a foreign stock exchange is now limited to a stock exchange that is a member of the World Federation of Exchanges: see www.world-exchanges.org; and see Retail Leases Victoria [30,080.10]. However, the effect of these amendments was that a publicly-listed corporation on an overseas exchange could be classified as a retail tenant solely on the basis that the exchange on which it was listed was not a member of the World Federation of Exchanges, and in circumstances where a number of significant exchanges are not members (including the London Stock Exchange). To address this anomaly, a ministerial determination was made on 12 August 2016 (see Victorian Government Gazette No S259 (18 August 2016)) under s 5(1)(d) of the Act whereby the following kind of tenants are determined to be tenants to which subs 4(2)(g) of the Act applies: [page 748] … bodies corporate or companies or corporations whose securities are listed on a stock exchange outside Australia or the subsidiaries (including subsidiaries as defined in section 9 of the Corporations Act 2001) of such bodies corporate, companies or corporations). Ministerial determinations are discussed in [23.22]. This expansion of the exemption with respect to publicly-listed securities on foreign exchanges should add a degree of certainty to the original provisions which is highly desirable, particularly having regard to the difficulties that may be encountered in determining the exempt or nonexempt status of a public company or corporation and the further difficulties that may be encountered in making this determination from the perspective of a subsidiary of a corporation: see, for example, Leung v Hungry Jack’s Pty Ltd (2000) V Conv R ¶54-614, which illustrates the extent of the difficulties that may arise. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Exempt businesses, premises, tenants or leases

[23.22] Paragraphs 4(2)(e) and (f) of the 2003 Act enable the minister to determine to except from the operation of the Act certain businesses, kinds of businesses or kinds of premises: see Retail Leases Victoria [30,080.15]. These provisions have now been expanded by the 2005 Amendment Act to enable the minister to except certain kinds of tenant or kinds of lease. This is the result of the addition of paras 4(2)(g) and (h) by the 2005 Amendment Act, as follows: (g) premises the tenant of which is a kind of tenant that the Minister determines under section 5 is a tenant to which this paragraph applies; (h) premises the lease relating to which is a kind of lease that the Minister determines under section 5 is a lease to which this paragraph applies. These additional provisions are mirrored in amendments to s 5 of the 2003 Act, which is the provision which empowers the minister to make determinations. This has been achieved by the 2005 Amendment Act adding to subs 5(1) new paragraphs (d) and (e), as follows: (d) determine that a kind of tenant is a tenant to which section 4(2) (g) applies; or (e) determine that a kind of lease is a lease to which section 4(2)(h) applies. The minister’s powers under s 5 have also been expanded by the 2005 Amendment Act, quite significantly, by the addition of new subss 5(1a) and (1b), as follows: (1A) An instrument made under subsection (1) may leave any matter to be certified by a Minister. [page 749] (1B) An instrument made under subsection (1) may provide that it has

effect on and from 1 May 2003 or such later date (whether before, on or after the date on which the instrument is made) as is specified in the instrument as the date on which it comes into effect. In relation to the certification of a matter by ‘a Minister’, note that the reference is to ‘a’ and not ‘the’ minister. This certification power could, for example, be potentially useful for the purposes of the, so called, 15-year lease Determination made on 20 August 2004: see [23.53]. It will be noted that in para C of that Determination provision is made for a certificate signed by the Small Business Commissioner being ‘prima facie evidence’ that a lease is a lease which satisfies the application provisions of para A of that Determination. The provisions of new subs 5(1a) would now allow the provision of a conclusive certificate to this effect by either the Minister for Small Business or any other minister nominated for this purpose. It would seem, nevertheless, that any other minister needs to be specifically nominated by title or, perhaps, as the minister from time to time administering particular legislation under the provisions of the Administrative Arrangements Act 1983. The same would apply to the Leases by Councils Ministerial Determination: see below and [23.53]. The provisions of new subs 5(1b) also give added flexibility in terms of the minister’s determination-making powers. These provisions provide for Determinations commencing at some specified time in the future or prior to the date of their making, as long as that date is after 1 May 2003, the date of commencement of the 2003 Act. The ability to ‘back date’ or ‘post date’ Ministerial Determinations under the unamended provisions of s 5 of the 2003 Act was not part of the statutory power conferred under those provisions. The limitation, in terms of 1 May 2003, on the powers under subs 5(1b) again emphasises the importance of the temporal limits on the operation of the various pieces of retail leases legislation: as to which see Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54626; and see [23.12]; and Retail Leases Victoria [30,005] and [30,010]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). Since the commencement of the 2003 Act there have been seven

ministerial determinations exempting: Victorian Bar chambers provided by Barristers Chambers Ltd (dated 23 April 2004; effective 1 May 2004) Victoria Government Gazette No S99 (27 April 2004); leases for 15 years or longer (dated 20 August 2004; effective 24 August 2004) Victoria Government Gazette No S184 (23 August 2004); [page 750] Melbourne Market Authority premises (dated 15 September 2005; effective 19 September 2005) Victoria Government Gazette No S175 (19 September 2005); leases by municipal councils (dated 22 July 2008; effective 1 August 2008) Victoria Government Gazette No S209 (24 July 2008); premises the tenant of which is a body corporate whose securities are listed on the New Zealand Stock Exchange Limited or a subsidiary (as defined in s 9 of the Corporations Act 2001) of such a body corporate (dated 20 December 2011; effective 20 December 2011) Victorian Government Gazette No S2 (5 January 2012); premises used for community and charitable purposes (dated 6 October 2014; effective 1 January 2015) Victorian Government Gazette No S362 (13 October 2014). This determination revoked the determination dated 22 July 2008 but did not affect the operation of the former determination concerning leases to which the former determination applied; and bodies corporate (and their subsidiaries) (dated 12 August 2016; effective 12 August 2016) Victorian Government Gazette No S259 (18 August 2016). This determination revoked the determination dated 20 December 2011. As a result of some doubts that had arisen as to the validity of some of the Ministerial Determinations then already made in circumstances where the powers provided for making them under s 5 of the 2003 Act did not extend to include determinations with respect to kinds of tenant or kinds of lease, a new s 97a was been inserted in the 2003 Act by the 2005 Amendment Act which is

designed to validate the Ministerial Determinations which had then been made. It is in the following terms: 97a. Validation of certain instruments An instrument made under section 5(1) before the day on which the Retail Leases (Amendment) Act 2005 received the Royal Assent that would have been validly made had section 6 of that Act been in operation at the time at which the instrument was made or purportedly made has, and is deemed always to have had, the same force and effect as it would have had if section 6 of that Act had been in operation at the time at which the instrument was made or purportedly made. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Residential areas and retail premises leases [23.23] Section 95 of the 2003 Act provides that if a retail premises lease confers the right on a tenant to occupy a residential area in the building in which the retail premises are located, and the Residential Tenancies Act 1997 does not apply to the lease, to the extent that it provides for the occupation of the residential area then the retail premises lease is taken to provide that the landlord must ensure that the residential area is maintained in good repair: and see Retail Leases Victoria [30,050]. [page 751] It would appear to follow from the language of s 52, which imposes liability on landlords for repairs of retail premises, that this means that repairs (otherwise within the ambit of s 52) to the residential area are to be at the landlord’s expense and that this expense is not recoverable from the tenant (more generally as to repairs, see [23.46]). It would appear to be an interesting question as to whether a tenant would be entitled to invoke the urgent repair

provisions of subs 52(4) with respect to the residential area. Although the language of the two sections is not abundantly clear in this respect, a purposive approach, on the basis that this is ameliorating or remedial legislation, would provide a reasonable basis for arguing the application of subs 52(4) to the residential area in these circumstances. The amendments made by the 2005 Amendment Act to subs 4(1) (see [23.18] and [23.19]) appear to indicate that the words ‘or part’, which were contained in that subsection when enacted in 2003, were to be taken, consistently with s 95, to be a reference, for the purposes of the retail leases aspect of the lease, to that part excluding the residential area of any premises. This view appears now to be confirmed by the words substituted for ‘or a part of premises’ in subs 4(1) of the 2003 Act by the 2005 Amendment Act, namely ‘not including any area intended for use as a residence’. These provisions of the 2005 Amendment Act would appear to contemplate the provisions of s 95 and, consequently, be provisions which should be read together. On this basis regard should be had to the provisions of s 95 which refer to and are limited to ‘a right on the tenant to occupy a residential area’ (emphasis added) and which, consequently, would appear to limit the opening paragraph of subs 4(1), at least with respect to ‘use as a residence’. In other words, residential use by third parties on the basis of a licence or sublease from ‘the tenant’ under a lease which otherwise involves the sale or hire of goods by retail or the retail provisions of services to the requisite extent (that is, ‘wholly or predominantly’, under the provisions of subs 4(1)) by ‘the tenant’ would not appear to affect the application of the Act. Were the position otherwise it might be argued that hotels, motels and similar premises were excluded as a result of the reference to ‘residence’ in subs 4(1), which could not have been parliament’s intention in 2005, given the history of the 2003 Act and the earlier legislation which clearly applied in these circumstances. Further, this view appears to be supported by the decision of the Full Federal Court in Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307; (2004) 141 FCR 299 in which it was accepted that the words ‘reside’, ‘residence’ and ‘residential’ connote a degree of permanence and long-term commitment. In this vein the court (per Dowsett, Hely and Conti JJ) said (at [51]): It may be that the expression ‘residential accommodation’ is sometimes

used to describe short-term accommodation in an hotel or a motel. We are not sure that any such usage is as common in Australia as the Court of Appeal in Owen v Elliott [(Inspector of Taxes) [1990] 1 Ch 786] considered it to be in England. We would have thought that such accommodation is more often described as ‘temporary accommodation’, ‘holiday accommodation’ or perhaps as ‘hotel accommodation’ or ‘motel accommodation’. [page 752] This view was confirmed by Croft J in Stringer v Gilandos Pty Ltd [2012] VSC 361 where his Honour said (at [64]) that ‘not including any area intended for use as a residence’ in subs 4(1) of the 2003 Act was referring to accommodation that was occupied ‘with a degree of permanence’.

Formal requirements with respect to leases Leases to be in writing and signed [23.24] Section 16 of the 2003 Act imposes a requirement that a retail premises lease must be in writing and signed by all parties: see Retail Leases Victoria [40,150]. Section 16 provides as follows: 16. Lease must be in writing and signed (1) A landlord or tenant must not enter into a retail premises lease that is not in writing and signed by all of the parties to it. Penalty: 10 penalty units. (2) A failure to comply with this section does not make the retail premises lease illegal, invalid or unenforceable. It remains unclear how these provisions operate in practice where agreements for lease come about as a result of a chain of correspondence. There is nothing to suggest, to date, that the learning in relation to the Statute

of Frauds (and its derivatives, including s 126 of the Instruments Act 1958) will be relied upon so that the chain of letters signed by the parties will be sufficient. The wording of subs 16(1), which refers to writing ‘signed by all of the parties to it’ does not specifically contemplate execution of the writing by an agent on behalf of one or more parties. This is a different situation from the provisions of s 126 of the Instruments Act which contemplate the signing of the ‘writing’ by an agent but only in circumstances where the agent is authorised in writing by the relevant party to sign. Victoria is unique in this respect in relation to Statute of Frauds provisions. Perhaps the absence of a specific ‘agent authorised in writing’ provision in subs 16(1) will lead to the conclusion that an agent may sign whether authorised in writing or not. It would, however, seem prudent to ensure that the parties themselves actually sign relevant critical correspondence or that there is a specific authority in writing in favour of any agent who signs on behalf of the party, whether an estate agent or solicitor. It seems probable that a practice of this kind may develop particularly when regard is had to the requirements of s 15. It seems unlikely that subs 16(2) of the 2003 Act will be interpreted as abrogating the application of the Statute of Frauds provisions in Victoria, by a legislative ‘side wind’: see Retail Leases Victoria [40,150].

Copy of proposed lease etc to be provided [23.25] Section 15 of the 2003 Act requires that any person who enters into negotiations with another person about a lease gives to that other person a copy [page 753] of the proposed lease in writing and a copy of the information brochure (if any) about retail leases published by the Small Business Commissioner: see Retail Leases Victoria [40,140]. These requirements extend to circumstances where a person who, as a landlord or on behalf of the landlord: (a) offers to enter into a retail premises lease; or (b) advertises by any means that the retail premises are for lease (see

paragraph 15(a) and (b)). Section 15 has now been amended by the 2005 Amendment Act by way of addition of a new subsection 15(2), as follows: (2) Subsection (1) does not apply to a renewal of a lease. In construing these provisions regard should be had to the extended meaning of ‘renewal’ under s 9 of the 2003 Act, as amended: see [23.16]; and see Retail Leases Victoria [30,015]. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Tenant to be given copy of signed lease [23.26] Section 22 of the 2003 Act requires the landlord to give the tenant a copy of the lease: see Retail Leases Victoria [40,145]. This must be done within 28 days after the landlord is given a copy of the retail premises lease signed by the tenant; and the copy (which may be a photocopy) must be of the lease signed by the landlord and the tenant: see subs 22(1). Contravention of this requirement entitles the tenant to give the landlord a written notice of termination at any time within 28 days after the tenant has been given a copy of the lease or entering into a lease, whichever happens last: see subs 22(2). The effect of a notice of termination by the tenant in accordance with subs 22(2) is that the lease will terminate 14 days after the notice is given but subject to subs 22(4) which incorporates the excusing provisions of s 18: see subss 22(3) and (4). The 2005 Amendment Act has introduced some flexibility with respect to these provisions by qualifying the 28 day period requirement with the words ‘or such other period as is agreed in writing between the landlord and the tenant’. There is no requirement that this writing be contained in the lease itself and could, presumably, be constituted by an exchange of correspondence, consistently with, for example, the learning in relation to ‘writing’ under the provisions of s 126 of the Instruments Act 1958: see [1.6]. Additionally, para 22(2)(a) has been clarified in terms of its operation by the addition of the words ‘signed by the landlord and the tenant’ after the word ‘lease’ in that paragraph. This amendment should ensure that only an executed

lease and not a blank copy or lease documents signed by one party and delivered in escrow will not trigger the tenant’s termination rights under subs 22(1). These provisions commence on 1 May 2003. [page 754] The provisions of s 18, which are incorporated within the provisions of s 22 (see above), enable a landlord, within 14 days after being given the notice of termination by the tenant, to object to termination on the ground that: (a)

the landlord has acted honestly and reasonably and ought fairly to be excused for the contravention; and (b) the tenant is substantially in as good a position as the tenant would have been if there had been no contravention (see subs 18(2)). These provisions reflect the provisions of s 32 of the Sale of Land Act 1962. Presumably the cases on the corresponding s 32 provisions will come to be relied upon in relation to s 18: as to these cases, see CCH Victorian Conveyancing Law and Practice, paras 9-500–9-820; and see Retail Leases Victoria [40,125]. The tenant may advise the landlord that the tenant accepts the landlord’s notice of objection in which case the lease does not terminate (see subs 18(3)); and the tenant is taken to have accepted the landlord’s notice of objection if the tenant does not advise the landlord, in writing, within 14 days after being given the notice (subs 18(4)). If the validity of the termination or the objection is not resolved under this statutory machinery for facilitating agreement, the whole question must be determined by VCAT under Pt 10 of the Act, in which case the termination of the lease is suspended until the matter has been determined: see subss 18(3) and (5). It should be noted that s 19 of the 2003 Act contains a general provision with respect to notices of termination under the 2003 legislation to the effect that no existing privilege or obligation etc is to be affected. Section 19 provides as follows: 19. Notices of termination

The termination of a lease by a notice of termination given in accordance with this Act does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the lease before the date of termination, unless the landlord and tenant otherwise agree or it is otherwise provided by this Act or determined under Part 10.

Small Business Commissioner to be notified of any lease [23.27] Section 25 of the 2003 Act was introduced into the 2003 Act in 2005. Under that section, within 14 days (or such period as was agreed between the landlord and the Small Business Commissioner) after a retail premises lease is signed by all of the parties to it, the landlord had to notify (in writing) the Small Business Commissioner about details of the lease including the address of the retail premise, the landlord’s name and address (and, if the landlord was not a natural person, the name and address of a person who could be contacted about the lease); the tenant’s name and address, and the date the lease was signed. See also Retail Leases Victoria [40,155]. Section 25 was repealed effective 21 November 2012. [page 755]

Renewals, assignments, subleases and the statutory minimum term Meaning of renewal [23.28] Section 9 of the 2003 Act, as amended by the 2005 Amendment Act, contains a specific provision as to the meaning of ‘renewal’ of a lease: see [23.16]; and see Retail Leases Victoria [30,015].

Lease renewal provisions and grounds for refusing renewal

[23.29] Section 27 of the 2003 Act contains provisions which reflect subss 18(1), (2) and (4) of the 1998 Act which, in turn, reflect subss 14(1), (2) and (4) of the 1986 Act. Section 27 provides as follows: 27. Option to renew (1) If a retail premises lease contains an option exercisable by the tenant to renew the lease for a further term, the lease must state — (a) the date until which the option is exercisable; and (b) how the option is to be exercised; and (c) the terms and conditions on which the lease is renewable under the option; and (d) how the rent payable during the term for which the lease is renewed is to be determined. (2) If a retail premises lease contains an option exercisable by the tenant to renew the lease for a further term, the only circumstances in which the option is not exercisable is if — (a) the tenant has not remedied any default under the lease about which the landlord has given the tenant written notice; or (b) the tenant has persistently defaulted under the lease throughout its term and the landlord has given the tenant written notice of the defaults. Subsection 27(2) is in the same terms as subss 18(5) of the 1998 Act and 14(5) of the 1986 Act. It follows that the statement of Hayne J in Commonwealth Bank of Australia v Figgins Holdings Pty Ltd (1994) V ConvR ¶54-492 remains applicable (at 65,692): It follows that subs 14(5) of the Retail Tenancies Act applies and that ‘the only circumstances in which the option’ in the lease is not exercisable is if the tenant remains in default notwithstanding notice to remedy it or has persistently defaulted under the lease throughout its term and the landlord had given written notice of those defaults. See also Retail Leases Victoria [40,055].

As to subsection 27(2), see Computer and Parts Land Pty Ltd v Property Sunrise Pty Ltd [2012] VCAT 1522 and Leonard Joel Pty Ltd v Australian Technical Approvals Pty Ltd [2017] VCAT 1781 at [137]–[143]. [page 756]

Notice of last day for renewal [23.30] Section 28 of the 2003 Act imposes an obligation on the landlord to notify the tenant of the option to renew: see Retail Leases Victoria [40,060]. These provisions are a re-casting of the requirement that the landlord notify the tenant in writing of the date after which the option is no longer exercisable and the consequences of failing to give such notice in subss 14(3), (4) and (9) of the 1986 Act and subss 18(3), (4) and (7) of the 1998 Act. Section 28 provides as follows: 28. Obligation to notify tenant of option to renew (1) If a retail premises lease contains an option exercisable by the tenant to renew the lease for a further term, the landlord must notify the tenant in writing of the date after which the option is no longer exercisable — (a) at least 6 months; and (b) no more than 12 months — before that date but is not required to do so if the tenant exercises, or purports to exercise, the option before being notified of the date. (2) If subsection (1) requires the landlord to notify the tenant but the landlord fails to do so within the time specified by that subsection — (a) the retail premises lease is taken to provide that the date after which the option is no longer exercisable is instead 6 months after the landlord notifies the tenant as required; and

if that date is after the term of the lease ends, the lease (b) continues until that date (on the same terms and conditions as applied immediately before the lease term ends); and (c) at any time before the landlord notifies the tenant as required, the tenant may give written notice to the landlord terminating the lease from a specified day that is — (i) on or after the date on which the term of the lease ends; and (ii) before the date until which the lease would otherwise have continued because of paragraph (b). (3) If the tenant gives the landlord a notice of termination under subsection (2) (c), the lease terminates on the day specified in the notice. (4) If an option to renew is exercised because of subsection (2) (b) after the term of the lease ends, the lease for the further term commences on the expiry of the previous lease, disregarding for this purpose any period during which that lease continued because of that subsection. Subsection 28(1) requires notice in writing of the date after which the option is no longer exercisable to be given to the tenant at least six months and not more than 12 months before that date. The specification of these time periods means that the issue which arose in Retail Tenancies Award No 13 (1995) V ConvR ¶58-522 in relation to the validity or otherwise of attaching the notice to the lease itself will not arise. The time [page 757] periods indicate that the notice must be a separate notice. This is also consistent with the position reached by Judge Davey (sitting as Vice-President

of VCAT) in Khodr v Foo Quan Eng Holdings Pty Ltd (No 1) (2001) V ConvR ¶58-557: see [12] and [13]. In Xiao v Perpetual Trustees Pty Ltd [208] VSC 412 Vickery J held that ‘notify’ in subs 28(1) meant actual receipt of the notice and not merely ‘service’. The latter part of subs 28(1) is included to overcome the decision of the Court of Appeal in Seacrest Pty Ltd v Apriaden Pty Ltd (2000) V ConvR ¶54625 in which it was held that the notice requirements of subs 14(3) of the 1986 Act were not abrogated or satisfied (in other words, they still needed to be complied with), even in circumstances where there had been a finding that subs 14(5) operated to prevent the tenant effectively exercising the option to renew and, further, in circumstances where the tenant had exercised the option to renew within the time limited by the lease in these circumstances: see Retail Leases Victoria [40,060]. Subsection 28(2) provides for the effect of a failure to give notice: see Retail Leases Victoria [40,060]. These provisions are, in substance, similar to the corresponding provisions of the 1986 Act and the 1998 Act to which reference has been made except that a period of six months is now allowed rather than three as under the previous Acts. The six month period conforms with the period specified in subs 28(1). There is a conflict about the contents of the notice referred to in para 28(2) (a). Xiao suggests that the notice will be valid if it states the last date for exercising an option as extended by the operation of the subsection. By contrast, in Bed for Backs v Palace Pty Ltd [2006] VCAT 2677 Deputy President Macnamara held that the notice had to comply with subs 28(1) except that it was late; the consequence being that the notice had to refer to the terms of the lease concerning the date beyond which the option could not be exercised. Beds for Backs was followed in LEGFIN Pty Ltd v Anthony [2015] VCAT 986. The tenant retains the right to terminate the statutory extension of the lease term under subs 28(2) by giving a notice of termination (see para 28(2)(c) and subs 28(3)); which corresponds, generally, with subs 14(9) of the 1986 Act and subs 18(7) of the 1998 Act. A difficulty with the provisions which entitle the tenant to give written

notice to the landlord terminating the lease as a result of the landlord’s noncompliance with the notice requirements with respect to the option to renew under subs 28(1) was, from the tenant’s perspective, the restriction that the notice could only be given before the landlord notified the tenant of the last day for the exercise of the option under subs 28(2) (see para 28(2)(c) as enacted in 2003). Once this landlord’s notice has been given, the lease term runs on for a period of six months after the giving of the notice for the purpose of enabling the tenant to exercise the option. The problem is, [page 758] of course, that this ‘extended’ lease term also carries with it all the lease obligations, hence the difficulty. Consequently, para 28(2)(c) of the 2003 Act has been amended by the 2005 Amendment Act to enable the tenant to give a notice of termination at any time, whether or not a landlord’s notice has been given. Consequently, para 28(2)(c), as amended in 2005, is as follows: (c) the tenant, whether or not the landlord has by then notified the tenant as required, may given written notice to the landlord terminating the lease from a specified day that is — (i) on or after the date on which the term of the lease ends; (ii) before the date until which the lease would otherwise have continued because of paragraph (b). These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Effect of failure to give notice of last day for renewal [23.31] A further matter which the 2003 Act addresses is the question whether the statutory extension under these type of provisions effects an overall extension of the lease term: see Retail Leases Victoria [40,060]. It appears from the Court of Appeal decision in Seacrest v Apriaden that the effect of provision such as subs 14(4) of the 1986 Act and subs 18(4) of the 1998 Act and now subs 28(2) of the 2003 Act would be to ‘disrupt’ the structure or

timetable for initial lease term and renewed terms. In other words, the effect of the statutory extension was to delay the commencement of the renewal with the result that the ultimate renewed term would finish correspondingly later as a result of the statutory extension. This position is changed by subs 28(4) which relegates the statutory extension of the lease term to the status of a mere piece of machinery to enable the tenant to exercise the option to renew while the lease term subsists so that it is a true renewal rather than a fresh lease, though with some statutory assistance. These provisions had, prior to Seacrest v Apriaden, been thought to be merely machinery, ameliorative, provisions which would not otherwise disrupt the lease term structure. This is now made clear.

Landlord’s intentions where no right of renewal under the lease [23.32] Section 64 of the 2003 Act operates where the tenant ‘does not have an option under the lease to renew the lease for a further term’: see subs 64(1) and, as to the extended meaning of ‘renewal’ under s 9 of the Act, see [23.16]; and, generally in relation to these provisions, see Retail Leases Victoria [40,065]. The landlord is required by subs 64(2) to give written notice to the tenant at least six months and not more than twelve months before the end of the term of the lease in which the landlord either offers the tenant a renewal of the lease on terms specified in the notice, including a [page 759] term setting out the rent, or informs the tenant that the landlord does not propose to offer the tenant a renewal of the lease. An offer to renew the lease cannot be revoked without the tenant’s consent for 60 days after it is made: subs 64(3). A deficiency in the mechanism provided by s 64 became evident in relation to the requirement in subs 64(5) where the tenant’s entitlement to give a notice terminating the lease because of the landlord’s non-compliance with the notice of requirements of subs 64(2) (offering the tenant a renewal or

informing the tenant that the landlord does not propose to offer the tenant a renewal of the lease) would be lost in the event that the landlord had given a notice, containing the information required under subs 64(2), ‘late’ in accordance with para 64(4)(a). The effect of the tenant losing its rights to give notice to terminate the lease term (from a day not earlier than the lease term would otherwise have expired) meant that the lease term would run on for a period of six months after the landlord gave its ‘late’ notice: see para 64(4)(b)(i). Subsection 64(5), as amended by the 2005 Amendment Act, now provides as follows: (5) If the landlord fails to comply with subsection (2), the tenant may, whether or not the landlord has given the tenant a notice as required under subsection 4(a), give written notice to the landlord terminating the lease from a day that is not earlier than the day on which the term of the lease expires. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Assignments and subleases [23.33] The 2003 Act, unlike the 1986 Act and the 1998 Act, only provides a statutory regime with respect to assignments of the lease term: see Retail Leases Victoria [40,040] to [40,050]. The position with respect to subleases, the granting of occupancy rights, or mortgaging or otherwise charging or encumbering the tenant’s interest in the lease is that s 63 of the 2003 Act permits a lease provision which allows the landlord an absolute discretion to refuse consent, a position which has not changed as a result of the 2005 Amendment Act: see Retail Leases Victoria [40,040] to [40,050] and, particularly, [40,045]. These provisions of s 63 are significant in that, unlike the earlier retail leases legislation, they allow a reversion to the common law position which is that where a lease contains a covenant against assigning or subletting (or mortgaging) without consent, the right of the landlord to refuse consent is absolute and the landlord might arbitrarily refuse consent: see Tredegar v Harwood [1929] AC 72 at 79 and 82 (HL); and see [15.6]. It was to remedy this situation that legislation was introduced under which such a covenant is deemed to be subject to a proviso that consent shall not be

unreasonably withheld and that no fine shall be payable for such consent (legislation which is now contained in s 144 of the Property Law Act 1958). [page 760] The procedure for obtaining consent to assignment is set out in s 61 of the 2003 Act: see Retail Leases Victoria [40,045]. Broadly speaking the requirements follow the usual approach found in provisions of this type in commercial leases in requiring a written request to the landlord together with the provision of such information as to the proposed assignee’s financial experience and business resources as the landlord reasonably requires: see subs 61(2). Before requesting the landlord’s consent the tenant must give the proposed assignee a copy of the disclosure statement which it received together with details of any changes of which the tenant is aware or could reasonably be expected to be aware: see subs 61(3). The procedure for obtaining consent to assignment set out in s 61 of the 2003 Act has been amended by the Retail Leases (Amendment) Act 2005 by the repeal of subs 61(4) of the 2003 Act and the addition of a new subs (5A). Interestingly, the effect of this repeal and insertion seems to be no more than a re-enactment of subs 61(4) so that the same provisions which were formerly contained in subs (4), but are now contained in subs (5a), will now follow existing subs 61(5). The changed order of subsections appears to be more logical, but the substance has not changed. Subsection 61(6) requires the landlord to deal expeditiously with a request for consent and is taken to have consented to the assignment if a tenant has complied with s 61 (which would include the provision of a disclosure statement in the circumstances required by subs 61(3) and now, under the new subs (5a); but see subs 61(5)) and the landlord has not within 28 days after the request was made by the tenant given written notice to the tenant consenting or withholding consent. Specific provision is made in s 60 of the 2003 Act as to the circumstances in which a landlord can withhold consent to an assignment: see Retail Leases

Victoria [40,045]. These provisions, as originally enacted in 2003, were as follows: 60. When the landlord can withhold consent to an assignment (1) A landlord is only entitled to withhold consent to the assignment of a retail premises lease if one or more of the following applies — (a) the proposed assignee proposes to use the retail premises in a way that is not permitted under the lease; (b) the landlord considers that the proposed assignee does not have sufficient financial resources or business experience to meet the obligations under the lease; (c) the proposed assignor has not complied with reasonable assignment provisions of the lease; (d) the proposed assignor has not provided the proposed assignee with business records for the previous 3 years or such shorter period as the proposed assignor has carried on business at the retail premises. (2) Section 144 of the Property Law Act 1958 does not apply to or with respect to a retail premises lease to which this Act applies. [page 761] In AAMR Hospitality Group Pty Ltd v Goodpar Pty Ltd [2009] VCAT 2782 Deputy President Macnamara held that the words ‘reasonably’ or ‘acting reasonably’ should be read into para 60(1)(b). The 2005 Amendment Act amends para 61(d) by introducing an additional element with respect to the landlord’s entitlement to withhold consent where the proposed assignor has not provided the proposed assignee with business records etc. The additional element is the requirement that ‘the assignment is in connection with a lease of retail premises that will continue to be used for

the carrying on of an ongoing business …’. Consequently, para 60(1)(d) of the 2003 Act, as amended by the 2005 Amendment Act, provides as follows: (c) the assignment is in connection with a lease of retail premises that will continue to be used for the carrying on of an ongoing business and the proposed assignor has not provided the proposed assignee with business records for the previous three years or such shorter period as the proposed assignor has carried on business at the retail premises. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Assignors and guarantors [23.34] Section 62 of the 2003 Act provides immediate protection to the assigning tenant and any guarantor or covenantor of the assigning tenant against liability to pay to the landlord any money in respect of amounts payable by the proposed assignee (implicitly, once the assignment of the lease term becomes effective under the deed of assignment or agreement to assign or transfer), provided the tenant’s disclosure requirements of subs 61(4) are complied with, in so far as they may be applicable. Section 62, as originally enacted, provides as follows: 62. Protection of assignors and guarantors (1) This section applies if — (a) a tenant gives a landlord and proposed assignee a copy of a disclosure statement in accordance with s 61(4); and (b) the disclosure statement does not contain any information that is false, misleading or materially incomplete. (2) None of the following persons are liable to pay to the landlord any money in respect of amounts payable by the proposed assignee — (a) the tenant;

(b) a guarantor or covenantor of the tenant. The protection of assignors and guarantors provided by s 62 of the 2003 Act has been expanded, in subs 62(2), to include protection against liability to ‘perform any [page 762] obligations under the lease …’ rather than only liability ‘to pay’: see Retail Leases Victoria [40,050]. Consequently, subs 62(2) of the 2003 Act as amended by the 2005 Amendment Act is as follows: (2) None of the following persons are liable to perform any obligations under the lease or to pay to the landlord any money in respect of amounts payable by the proposed assignee — (a) the tenant; (b) a guarantor or covenantor of the tenant. In 2011 para 62(1)(a) was amended by deleting the reference to subs 61(4) in substituting 61(5A). It will be noted that satisfactory compliance with subs 61(5A), in terms of the requirements of subs 62(1), also requires that the disclosure statement does not contain any information that is false, misleading or materially incomplete (as to which, see Nature’s World (Chadstone) Pty Ltd v Perpetual Trustees Ltd (VCAT, M Macnamara, Deputy President, 1 March 2001, unreported); and see Retail Leases Victoria [40,125], [130,055] and [130,090]. These provisions commenced on 1 May 2003 (being the date of commencement of the 2003 Act).

Statutory minimum term of five years [23.35] In broad terms the effect of s 21 of the 2003 Act was to provide for a statutory minimum five-year term, with some exceptions in this respect in relation to a renewal of a lease: see Retail Leases Victoria [40,075]. These provisions of the 2003 Act represent a marked change in policy from assistance with security of tenure, for five years, for first time retail tenants to security of

tenure, for five years, for all retail premises leases (subject to the possibility of exemption from these provisions by certificate from the Small Business Commissioner, see below). This policy shift followed extensive debate and consultation on the subject, including in the deliberations of the Small Business Advisory Committee, which reported on the operation of the 1986 Act to the then Minister for Small Business: see [20,020]. Proposals for security of tenure included adoption of the English legislation: see M Haley, The Statutory Regulation of Business Tenancies, OUP, 2000. It will be seen that the scheme for security of tenure which was ultimately adopted in the 2003 Act is to provide for a lease term of at least five years by means of the imperative provisions of subs 21(1), which are supplemented by subs 21(4), which provides its own ‘self executing’ remedy for any ‘breach’ of subs 21(1). This period is calculated counting the initial term and the further term or terms provided for by an option for the tenant to renew the lease which, as subs 21(2) makes clear, is included as part of the original terms of the lease. If, however, the lease is a sublease then the statutory minimum term operates for so long as possible having regard to [page 763] the remaining term available under the relevant head lease and expires one day prior to the expiration of the head lease term (subs 21(1); in order to avoid an assignment, by statute): see [15.2]. It should be noted that subs 21(2) specifically provides that, in applying subs 21(1), an option conferred after the lease was entered into must be disregarded. The terminology of this subsection requires careful consideration, particularly when regard is had to the provisions of s 9 as to the meaning of ‘renewal’ of a lease. As indicated previously (see [23.16] and Retail Leases Victoria [30,015]) the two aspects of the meaning attributed to ‘renewal’ by s 9 are (a) under an option granted under the lease for a further term or (b) under an agreement to renew the lease for a further term entered into by all the parties to the lease. Subsection 21(2), given its terminology, appears to be referring only to ‘renewal’ in the nature of the para (a) type and not under an agreement to renew of the type referred to in para (b). It might have been thought that the intention of subs 21(2) was to catch

the para (b) type rather than the para (a) type ‘renewal’, because on a strict reading of subs 21(2) a variation of a lease in which an option for a further term or terms is conferred as part of the variation seems to fall within subs 21(2). However, at general law, a variation of a lease to this extent would seem to produce a surrender and re-grant by operation of law and thus create a fresh lease which, in all the circumstances, is likely to be ‘entered into’ at the time the surrender and re-grant occurs (as to variation of leases in these circumstances, see Pascoe-Webbe v Nusuna Pty Ltd (1985) 3 BPR 9620; BC8500693; and see [23.16] and Retail Leases Victoria [30,005]). If this analysis is correct, then the result is that the further option to renew thus granted will be counted for the purposes of subs 21(1) with respect to the new lease created by surrender and re-grant by operation of law. This may, of course, be an argument in favour of interpreting subs 21(2) on the basis that options to renew conferred by variation of lease terms subsequent to the date of the original lease are not to be treated as new leases for the purposes of these provisions. This purposive approach may be thought to require too much in the way of implication into the provisions of s 21, and a simpler answer may be that the absurdity as a result of application of general law principles to subs 21(2), as indicated above, is overcome by applying the general principle of s 11 (to which reference has already been made (see [23.10] and Retail Leases Victoria [30,005]); which is, as stated in subs 11(2), that the Act only applies to a lease of premises if the premises are retail premises at the time the lease is entered into or renewed, and that this is to be treated as a general directive that the provisions of the Act are to be considered and applied at the time the lease is entered into. However, the operation of subss 21(1) and (2) does not impinge upon the question whether or not premises are ‘retail premises’, so this question is, strictly, outside the purview of s 11(2). Another matter that is not clear is whether the effect of subs 21(2) is to avoid any term which is provided for under an option conferred after the lease was entered into, a position which would, of course, avoid the absurdity which flows from the application of the common law principles of surrender and re-grant with respect to lease variations. If a further option [page 764]

conferred after the lease was entered into is not avoided, then the further question arises as to whether that option can be exercised and enjoyed leaving the statutory provisions to operate to extend the term at the end of such an after conferred renewed term. The provisions of subs 21(4) suggest that an after-conferred option for a further term would be valid and enforceable and permitted to operate on this basis. The position is, however, not clear. The provisions of the 2005 Amendment Act maintain the original philosophy and general operation of s 21 but make some amendments designed to clarify the position in relation to overholding tenancies being brought within the operation of the substantive provisions of the 2003 Act under s 12: see [23.14]; and see Retail Leases Victoria [30,095]. Provisions are also included in the 2005 Amendment Act to allow a ‘prospective tenant’ to seek a certificate from the Small Business Commissioner which has the effect of enabling a tenant or a prospective tenant to waive the operation of s 21; hence the minimum five-year term provisions: see subss 21(5), new (5a) and (6). Provision is also made for the review of rent payable for any ‘extended period’ of a lease as a result of the operation of s 21 (new subs 21(7)). In the first instance, an addition was made by the 2005 Amendment Act to the note to subs 21(1), the prime provision establishing the minimum fiveyear term. That note now reads: Note: the landlord or the tenant may, in accordance with the lease or this Act, be able to terminate the lease before the end of the term if, for example, there has been default, relocation, demolition or damage to the retail premises. The likely application of the minimum term provisions of s 21 in circumstances where s 12 operated to bring a lease within the operation of the 2003 Act has already been foreshadowed: see [23.14]; and see Retail Leases Victoria [40,075]. Parliament has now apparently accepted this position, but on the basis that the tenant’s period of prior continuous possession, which itself triggered the operation of subs 12(2), is to be taken into account for the purposes of the minimum five-year term. Provision is made on this basis in the new subs 21(2a), as follows: (2a) In applying subsection (1) to a retail premises lease to which this Act applies because of section 12(2), account must be taken of

any period during which the tenant was continuously entitled to possession of the retail premises before the day on which this Act first applied to the lease. Note: Section 8 provides that an assignment of a retail premises lease is taken to be a continuation of that lease. As discussed previously, it should be noted that the 2005 Amendment Act also made amendments to subs 12(2) of the 2003 Act so that the period of ‘one year’ of continuous possession required to trigger the operation of s 12 can only be counted back to the commencement of that Act, namely 1 May 2003: see Retail Leases Victoria [30,095]. [page 765] Subsections 21(5) and (6) of the 2003 Act have been amended to enable a ‘prospective tenant’ to make application for a certificate from the Small Business Commissioner enabling waiver of the minimum five-year term provisions of s 21. It is noted that the expression ‘prospective tenant’ is not defined for the purposes of this section. Unfortunately, there was no definition of the expression ‘prospective tenant’ as contained in s 8 of the 1998 Act (the disclosure in relation to new lease provisions under that Act) and this led to the position, on the authorities, that this expression did not apply to a tenant under an existing lease of the premises under the 1986 Act (see Khodr v Foo Quan Eng Holdings Pty Ltd (No 2) (2001) V ConvR ¶58-558; Rogowski v Bedelis Investments Pty Ltd (2001) V ConvR ¶58-562; Temptress Nominees Pty Ltd v Constantinou (2001) V ConvR ¶58-563; Aegean Food Import Export Pty Ltd v R & C Mazzei Nominees Pty Ltd [2004] VCAT 1450 (Deputy President Macnamara; 28 July 2004), which was appealed to the Supreme Court (Ashley J) [2004] VSC 515; and see also R & C Mazzei Nominees Pty Ltd v Aegean Food Import Export Pty Ltd [2006] (per Osborn J); and, a further decision on other aspects of these proceedings, Aegean Food Import Export Pty Ltd v R & C Mazzei Nominees Pty Ltd [2007] VCAT 68 (Deputy President Macnamara; 10 January 2007). There does appear to be the potential for the application of these authorities because the provisions of s 21 of the 2003 Act and the disclosure requirement provisions of s 8 of the 1998 Act are both concerned

with ‘new’ tenants. For the reasons indicated in Rogowski and Temptress Nominees the position which appears to accord best with the position of the Court of Appeal in Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 with respect to the temporal limitations on the operation of the retail leases legislation is that any person who is not a tenant under a lease to which the 2003 Act applies is to be regarded as a ‘new’ tenant for the purposes of that Act, and therefore a ‘prospective tenant’ for the purposes of these amendments to subss 21(5) and (6). Nevertheless, the position is not free from doubt and it may be found, on a strict application of these provisions on the basis of the authorities to which reference has been made, that a tenant under a lease to which the 1986 Act or the 1998 Act applies cannot avail itself of subss 21(5) and (6) prior to its entering into the first 2003 Act lease to which it has been a party as it is not to be regarded as a ‘prospective tenant’. This may have serious consequences in relation to the period of the lease term, consequences of which may only become clear years after a purported waiver of the statutory minimum term, bearing in the mind the inability of parties to contract out of the operation of the 2003 Act (see s 94; and [23.10]; and see Retail Leases Victoria [30,030]) and, consequently, the inability of parties to argue for abrogation of the Act in whole or in part as a result of the application of doctrines of waiver or estoppel. This position may be thought to be reinforced, by implication, as a result of the need perceived by parliament to add specific ‘prospective tenant’ provisions to the definition section of the 1998 Act: see s 100 of the 2003 Act and s 45 of the 2005 Amendment Act. [page 766] The only exception to the operation of the statutory minimum term provisions of s 21 arises under the provisions of subss 21(5) and (6). This exception requires a certificate from the Small Business Commissioner given under the provisions of subs 21(5). A certificate may be granted by the Small Business Commissioner in response to the tenant’s request for such a certificate (implicitly a written request). The Commissioner must certify that the effect of subss 21(1)–(4) have been explained to the tenant by the

Commissioner, or a person acting on his or her behalf, and that the tenant’s giving a written notice to the landlord waiving the application of s 21 to the lease will result in the statutory minimum term provisions of s 21 not applying to the particular lease. Subsection 21(6) provides that the Commissioner must issue a certificate under these provisions within 21 days after being requested to do so by the tenant. There is a proviso that a certificate issued after that period is not invalid as a result. A further provision was also inserted by the 2005 Amendment Act, in the midst of subss (5) and (6), imposing time limits on the Small Business Commissioner’s consideration of any request under subs (5), in the following terms: (5A) The Small Business Commissioner — (a) must consider a request under subsection (5) made by a tenant or a prospective tenant before a lease is entered into and within 90 days after a lease is entered into; and (b) may consider a request made at any other time under subsection (5). It is noted that there are no ‘deeming’ provisions in this new subs (5A), such as the deeming provisions with respect to applications to landlords to consent to assignment under subs 61(6): see [23.34] and Retail Leases Victoria [40,045]. This is probably because provisions of this kind would seem to be inappropriate, particularly at the heart of a ‘consumer protection’ provision such as subs 21(5). Nevertheless, in practical terms, these provisions impose time limits which will, on past performance, no doubt be achieved. Failure to meet these time limits does not preclude the Small Business Commissioner considering a request under subs 21(5). The provisions of new subs 21(5a) do not impinge upon the 21 day time limit within which a certificate is to be issued, as provided in subs 21(6). A further matter which was not addressed by s 21 as originally enacted in 2003 was the question of rent review for any ‘extended term’ as a result of the application of the minimum five-year term requirements of s 21. This is now

addressed in a new subs 21(7) inserted by the 2005 Amendment Act, as follows: (7) If the term of a lease is extended under this section and no provision is made in the lease for a review of the rent payable in respect of the extended period, then the lease is taken to provide for a rent review to be made on the basis of the current market rent of the premises as at the beginning of that period. Note: For reviews based on the current market rent of the retail premises, see section 37. [page 767] In relation to the operation of s 37 (see Retail Leases Victoria [50,015]), it should be noted that the new subs 21(7) does not preclude the possibility of the lease terms themselves making provision for rent review during any ‘extended period’ as a result of the application of s 21. The operation of subs 21(7) in this respect should be kept in mind in the event that the possible application of s 21, without waiver under subs 21(5), is contemplated by the parties (or at least by the landlord). These provisions, apart from the new subs 21(5a), commence on 1 May 2003 (being the date of commencement of the 2003 Act). Subsection 21(5a) commences on the day after assent to the 2005 Amendment Act, namely 23 November 2005.

Key money and goodwill [23.36] The approach of the 2003 Act is, like the earlier legislation, to prohibit (and now with a penalty) payments by way of key money or goodwill. ‘Key-money’ is defined in s 3 as follows: ‘key-money’ means money that a tenant is to pay, or a benefit that a tenant is to give, that is — (a) by way of a premium, or something similar in nature to a

premium, in that there is no real consideration or no true consideration given for the payment or benefit (for example, it is so disproportionate to the benefit that it cannot be true consideration); and (b) in consideration of — (i) a lease being granted or an agreement being made to grant a lease; or (ii) the variation of a lease; or (iii) the renewal of a lease or the granting of an option for the renewal of a lease; or (iv) consent being given to the assignment of a lease or to the sub-leasing of the premises to which a lease relates; It will be seen that this expanded definition is directed to dealing with the unresolved issue of controversy raised in the decision of the Appeal Division in Gillett v Burke [1997] 1 VR 81; Burke v Gillett (1994) V ConvR ¶54-507 with respect to the meaning of the expression ‘by way of a premium or something of a like nature’ in the definition of ‘key-money’ in subs 3(1) of the earlier legislation and whether the key-money provisions extended to the grant or agreeing to grant an option to renew. Paragraph (a) of the ‘key-money’ definition resolves the first Gillett v Burke issue referred to above in favour of the views expressed by Smith J (who adopted the approach of Rowland J in Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110): see Retail Leases Victoria [40,020]. The approach of para (a) of the definition, reflecting the approach of Smith J, requires ‘real’ or ‘true’ consideration for the ‘payment [page 768] or benefit’. This is emphasised by the words in parenthesis at the conclusion of para (a) — ‘for example, it is so disproportionate to the benefit that it cannot be true consideration’. This appears to indicate, as does the judgment of Smith J in Gillett v Burke, that these provisions go beyond the sufficiency rule with

respect to consideration in the law of contract. In assessing the sufficiency of the consideration for the payment or benefit it would appear, in the context of these provisions, that no account can be taken of the value to the tenant of securing or protecting the goodwill of its business where the tenant is, in the stereotypical case, being ‘held to ransom’ by a landlord who is threatening not to grant a further term which would enable the tenant’s business to continue, either at all or at the particular location of the premises, because this situation is (as discussed below) apparently the very evil that the key-money provisions of the retail leases legislation were designed to prevent. On the other hand, if the payment or benefit was for the grant of a further option to renew in addition to other options to renew still available in the future under the terms of the lease, where the grant would enhance the value of the tenant’s goodwill, hence the saleability of the business, it would seem reasonable to take this tenant’s benefit into account, assuming that there is no suggestion that the tenant is being ‘held to ransom’ in the sense discussed. The provisions of para (a) of the definition of ‘key-money’ raised difficult questions which can only be determined in the context of particular circumstances having regard to the above matters. Paragraph (b) of the ‘key-money’ definition contained in the 2003 Act resolves, in favour of the Gillett v Burke approach, the issue whether the keymoney provisions extend to the grant or agreement to an option to renew, and a number of other issues yet to be raised. Consistently with the broad interpretation of the ‘key-money’ definition with respect to the option issue in Gillett v Burke, para (b) of the ‘key-money’ definition now specifically includes the variation of a lease, the renewal of a lease (and in this respect regard should be had to the meaning of ‘renewal’ of a lease as provided for in s 9 of the 2003 Act (see [23.16]; and see Retail Leases Victoria [40,055])) or the granting of an option for the renewal of a lease or consent being given to the assignment of a lease or to the sub-leasing of premises to which a lease relates (and as to assignment, see ss 60–62 of the 2003 Act, but note that under s 63 of that Act the landlord may reserve the right to refuse consent to a sublease: see [23.34]). The inclusion of the reference to the variation of a lease in general terms would seem to ensure that the application of the ‘key-money’ provisions is not dependent upon the variation effecting a surrender and re-grant by operation of law and thus creating a new lease which would otherwise have

attracted the lease grant or agreement provisions in para (b)(i) of the present definition and the corresponding words in the earlier legislation (as to surrender and re-grant of leases by operation of law, see Pascoe-Webbe v Nusuna Pty Ltd (1985) 3 BPR 9620; BC8500693, and see [23.16]). [page 769] The definition of ‘key-money’ under the 2003 Act must be read with s 23 of that Act, which is the operative part of the key-money provisions. Section 23 as originally enacted is as follows: 23. Key-money and goodwill payments prohibited (1) person must not, as landlord or on behalf of a landlord, seek or accept the payment of — (a) key-money; or (b) any consideration for the goodwill of any business carried on at the retail premises. Penalty: 50 penalty units. (2) A provision of a retail premises lease is void to the extent that it requires the payment of key-money or consideration for goodwill or has that effect. (3) However, subsections (1) and (2) do not prevent a landlord from — (a) recovering from the tenant costs which the landlord reasonably incurred in investigating a proposed assignee of the lease or sub-tenant of the premises; or (b) recovering from the tenant costs which the landlord reasonably incurred in connection with — (i) an assignment of the lease or a sub-lease; and (ii) obtaining any necessary consents to the assignment or sub-lease; or (c) claiming goodwill from the tenant in relation to the sale

of a business that the landlord operated from the retail premises immediately before its sale, if the lease was granted to the tenant in the course of the sale of the business; or (d) receiving payment of rent in advance; or (e) securing the performance of the tenant’s obligations under the lease by requiring a bond, security deposit or guarantee to be provided from the tenant or any other person (such as a requirement that the directors of a corporation guarantee performance of the corporation’s lease obligations); or (f) seeking and accepting payment for plant, equipment, fixtures or fittings that are sold by the landlord to the tenant in connection with the lease being granted; or (g) seeking and accepting payment for the grant of a franchise in connection with the lease being granted. (4) Any payment made, or the value of any benefit conferred, by the tenant and received by or on behalf of the landlord contrary to this section may be — (a) recovered by the tenant from the landlord in a court of competent jurisdiction as a debt due; or (b) ordered by the Tribunal under Part 10 to be paid to the tenant by the landlord. [page 770] A minor but important amendment has been made to subs 23(4) by the Retail Leases (Amendment) Act 2005. Paragraph (b) of that subsection has been replaced by the following provisions: (b) otherwise recovered by the tenant from the landlord as determined under Part 10 (Dispute Resolution). As the clause notes to the Bill indicate, the purpose of this amendment is to

remove any doubt that a tenant can recover any payment using all of the dispute resolution provisions of Pt 10 of the 2003 Act. Formerly para 23(4)(b) was limited to recovery by order of the tribunal only. These 2005 amending provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). The prohibition contained in the s 23 provisions is directed to a person in the capacity as landlord or a person acting on behalf of a landlord. It follows from the structure of these provisions and the 2003 Act (including the definition of ‘landlord’ in s 3) that the reference is to the reversioner or former reversioner under the relevant retail premises lease, not some third party who happens to be a landlord under some other lease. This means that these provisions are limited in that they do not appear to comprehend or reach payments made to third parties who are not in any sense able to be described as the landlord or a person acting on the landlord’s behalf (and see the discussion of corresponding provisions in the 1986 Act after their amendment by the Retail Tenancies (Amendment) Act 1995, discussed at Retail Leases Victoria [190,020]). This omission may be significant as it might be expected that the penal provisions of subs 23(1) will, accordingly, be strictly construed: noting the generally more restrictive approach to the interpretation of penal provisions in statutes discussed by Pearce and Geddes, Statutory Interpretation in Australia, 6th ed, LexisNexis, Sydney, 2006, at [9.8]–[9.10], [9.14] and [9.15]; and see Commonwealth Bank of Australia v Friedrich (1991) 5 ACSR 115 at 182– 3; 9 ACLC 946; BC9100656, per Tadgell J. Also, in this context, it should be noted that the opening words of subs 23(1) are, at least arguably, not as comprehensive as the opening words of subs 11(1)(a) of the 1998 Act. The former prohibition was ‘must not request, receive or retain the payment of’. The current prohibition is ‘must not … seek or accept the payment of’. Presumably, one cannot ‘retain’ a key money or goodwill payment without having first accepted it. Nonetheless, the change in wording appears to be unfortunate, particularly as decisions such as Gillett v Burke indicate that these provisions are likely to be scrutinised by the courts and VCAT very carefully. A further change has been made in subs 23(2) in the omission of provisions which correspond with subpara 11(1)(b)(ii) of the 1998 Act. Subsection 23(2) continues to avoid the provision of a retail premises lease to an extent that it

requires the payment of key money or consideration for goodwill or has that effect, but the 2003 Act no [page 771] longer avoids a provision to the extent ‘that the landlord, or a person claiming through the landlord, is entitled to any key money or consideration for goodwill’. It is not easy to think of circumstances in which subpara 11(1)(b)(ii) might have been applicable. At first sight it may have been thought that a provision such as subpara 11(1)(b)(ii) may have assisted in extending the operation of these provisions to catch third parties (that is, the person who is neither a landlord nor a person acting on behalf of a landlord) who have received a prohibited payment by creating the necessary link between that person and the landlord. However, the avoidance of such a provision by the legislation would seem to achieve the opposite result. The reference to a provision of a retail premises lease should, of course, be read in the context of the provisions of subs 94(3), which render void a provision contained in any other agreement or arrangement, whether or not between parties to a retail premises lease; that provision would be void under the 2003 Act if it were contained in a retail premises lease: see [23.10]. Goodwill is not defined by the 2003 Act and there is no definition or provision in the 1995 Amending Act (or the 1998 Act) which affects the meaning of the term at general law. In Federal Commissioner of Taxation v Williamson (1943) 67 CLR 561 at 564; BC4300019, Rich J said (after analysing customer types in terms of cats, dogs, rats and rabbits): The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom. See also Young J in Hoogerdyk v Condon (1990) 22 NSWLR 171 at 175–6; and see (1992) ALJ 49 at 50. The evil to which s 9 of the 1986 Act (from which s 11 of the 1998 Act

and s 23 of the 2003 Act derive) was directed is indicated in the Second Reading Speech of the Bill that became the Act in the Legislative Council on 12 November 1986. The then minister, the Hon David White, said (at 996 of Hansard): KEY-MONEY AND GOODWILL It has been recognised that the practice of charging a non-returnable bond or key-money is on the increase in strip shopping areas of growing popularity. As the values of businesses have grown with inflation and an increase in the size of the average business, so the value of goodwill has also increased, and figures of 50% payable to the landlord are not uncommon. Clause 9 recognizes this problem and provides that any agreement to make such payments is void. However, this clause recognises that trading in leases should be discouraged as it disadvantages both the landlord and the tenant in shopping complexes. It affects the continuity and stability of trading and threatens the optimum tenant mix of a centre. For these reasons clause 9 provides certain calculated payments to be made by the tenant to the landlord when he vacates a lease within a certain period. It is, of course, a question of fact in the particular circumstances whether a payment is properly characterised as key money or consideration for the goodwill of any business [page 772] carried on at the retail premises within the prohibition of s 23(1). In interlocutory proceedings, the possibility was entertained that an inflated annual rental figure for the first year of a five-year lease commencing in June 1999 (and therefore subject to the corresponding provisions of the 1998 Act) may have included ‘key-money’: see Lin Creations Pty Ltd v Springvale Property Holdings Pty Ltd (2000) V ConvR ¶54-627; [2000] VSC 24; BC200000671. The provisions of s 23 of the 2003 Act, together with the definition of ‘key-money’ in s 3, continue to address the first difficulty with the initial 1986 Act key-money provisions which were highlighted in Gillett v Burke [1997] 1

VR 81; Burke v Gillett (1994) V ConvR ¶54-507; [1994] ANZ ConvR 542; BC9401174. Tadgell J in that appeal held that subs 9(1) of the 1986 Act (as originally enacted), did not apply to payment made by a tenant by choice and not by obligation (see at [1997] 1 VR at 89; (1994) V ConvR at 65,813), a position with which Ormiston J agreed (at VR 90; V ConvR 65,814): see [190,025]. As indicated previously, this deficiency was cured by the provisions of the Retail Tenancies (Amendment) Act 1995: see Retail Leases Victoria [40,020]. The excepting provisions of subs 23(3) of the 2003 Act reflect in large part the provisions of subs 11(2) of the 1998 Act, to the extent of paras (a), (b) and (c). The provisions of para 11(2)(d) of the 1998 Act, which excepts, in the circumstances specified, the recovery from the tenant of certain sums in connection with the assignment of the lease of premises in a retail shopping centre, has been omitted and new paras (d), (e), (f) and (g) now included. These provisions require no particular explanations, save to note that they are directed to excepting payments of certain types from the key money and goodwill payments prohibition of s 23 and, as such, do not go further and authorise such payments to the extent that they may be prohibited or constrained by other provisions of the 2003 Act. For example, paras 23(3)(a) and (b) must be read subject to the provisions of s 51 of the 2003 Act, which limit the extent to which a landlord is able to recover costs associated with a lease. Any payment made or the value of any benefit conferred by the tenant and received by or on behalf of the landlord in breach of s 23 may be recovered by the tenant from the landlord in a court of competent jurisdiction as a debt due or by order of VCAT under Pt 10 of the 2003 Act: see subs 23(4). It should be noted that, like the provisions inserted in s 9 of the 1986 Act by the 1995 Amending Act, the recovery of prohibited payments is from the landlord and not from any third party receiving them on behalf of the landlord: see Retail Leases Victoria [190,020]. The provisions of subs 23(4) also reflect the provisions of subs 11(4) of the 1998 Act. A minor but important amendment was made to subs 23(4) by the 2005 Amendment Act by replacing paragraph (b) of that subsection with the following: (b) otherwise recovered by the tenant from the landlord as determined under Part 10 (Dispute Resolution).

[page 773] As the clause notes to the 2005 Amendment Bill indicate, the purpose of this amendment was to remove any doubt that a tenant can recover any payment using all of the dispute resolution provisions of Pt 10 of the 2003 Act. Formerly para 23(4)(b) was limited to recovery by order of the tribunal only. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Disclosure requirements Statutory provisions [23.37] The provisions of s 17 of the 2003 Act contain disclosure requirements which apply to the grant of new leases: see Retail Leases Victoria [40,105]. The provisions of s 17 (as originally enacted) apply to the grant of new leases as follows: 17. Landlord’s disclosure statement (1) At least 7 days before entering into a retail premises lease, the landlord must give the tenant — (a) a disclosure statement in the form prescribed by the regulations (but the layout of the statement need not be the same as the prescribed disclosure statement); and (b) a copy of the proposed lease in writing. (2) If a tenant has not been given the disclosure statement before entering into a retail premises lease, the tenant may give the landlord, no earlier than 7 days and no later than 90 days after entering into the lease, a written notice that the tenant has not been given the disclosure statement. (3) If the tenant gives the landlord a notice in accordance with subsection (2) —

the tenant may withhold payment of the rent until the day on which the landlord gives the tenant the disclosure statement; and (b) the tenant is not liable to pay the rent attributable to the period from and including the day on which the notice was given until and including the day on which the landlord gives the tenant the disclosure statement; and (c) the tenant may give the landlord a written notice of termination at any time before the end of 7 days after the landlord gives the tenant the disclosure statement. (4) If the premises are not available for handover to the tenant on the date specified in the disclosure statement, the tenant is not liable to pay the rent attributable to a period before that date. (5) If — (a) any information provided by the landlord in the disclosure statement is misleading, false or materially incomplete; or (a)

[page 774] (b) the tenant is not given a copy of the proposed lease in accordance with subsection (1)(b) — the tenant may give the landlord a written notice of termination. (6) The tenant may give a notice of termination under subsection (5) at any time before the end of 28 days after — (a) the tenant is given the disclosure statement; or (b) the tenant is given a copy of the lease; or (c) the lease is entered into —

whichever happens last. Section 17 has been amended by the 2005 Amendment Act. Some of the amendments are in the nature of ‘housekeeping’, but others are more substantial. In terms of the more substantial, a specific provision has now been included in relation to sub-tenancies, in the form of a new subsection 17(1A), as follows: (1A) In the application of subsection (1) to a sub-lease, a tenant who has been given a disclosure statement concerning a head-lease is only required to give a sub-tenant — (a) a copy of that disclosure statement; and (b) details of any changes of which the tenant is aware, or could reasonably be expected to be aware, that have affected the information in the disclosure statement since it was given to the tenant. It will be noted that the obligations imposed on the ‘intermediate landlord’, the tenant under the head lease, are to give the subtenant a copy of the disclosure statement provided by the head landlord together with details of any changes etc that have affected the information in that disclosure statement since it was given to the tenant. The para 17(1a)(b) requirements appear to be intended to accommodate the situation where the sublease is entered into some time after, at least not contemporaneous with, the head lease. The other substantive addition made by the 2005 Amendment Act is the addition of a new subs 17(7), as follows: (7) If a tenant has been given the disclosure statement before entering into an agreement for a retail premises lease, the landlord is not required to give a further disclosure statement before subsequently entering into a retail premises lease if that lease is substantially in accordance with the earlier agreement for the lease. This new provision will avoid the necessity for costly duplication in complying with the disclosure requirements where an agreement for lease is entered into, followed by the entering into of a formal lease on the basis of that agreement. It will be noted from the provisions of this new subs (7) that

this concession is limited to the circumstance where the lease entered into on the basis of the agreement for lease is ‘substantially in accordance with the earlier agreement for lease’. This invites the same [page 775] issues and considerations with respect to the 2005 amendments to para 9(1)(b) of the 2003 Act which limits the extended meaning of ‘renewal’ of a lease to a situation where the renewal as subsequently agreed is on substantially the same terms and conditions as the original lease, except as to rent: see [23.16]. On the basis of the strict approach to the temporal limitation on the application provisions of the retail leases legislation arising out of the Court of Appeal decision in Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626 it would not appear that these provisions would extend to release these obligations where the agreement for lease was subject to the operation of the 1998 Act: see Retail Leases Victoria [40,095]. In any event, having regard to the limited operation of the sanctions for non-disclosure under the 2003 Act, there do not appear to be any significant consequences as a result: see Retail Leases Victoria [40,110]. In terms of ‘housekeeping’ matters, subs 17(4) was amended by the 2005 Amendment Act to clarify that the release of the tenant’s obligation to pay rent where premises are not available for handover to the tenant on the date specified in the disclosure statement applies to the period before ‘the date on which the premises are available to handover’. The provisions of subs 17(4) now read: (4) If the premises are not available for handover to the tenant on the date specified in the disclosure statement, the tenant is not liable to pay the rent attributable to a period before the date on which the premises are available for handover. Subsection 17(4) as originally enacted in 2003, read literally, did not provide for a ‘period’ during which the rent obligation was released. In terms of the consequences of provisions of this type, including the possible application of restitutionary principles allowing recovery of rent paid in

circumstances where rent was paid by a tenant under a mistake as to the obligation to do so during the period provided for under subs 17(4): see Retail Leases Victoria [40,110] and, particularly in relation to the authorities as to the application of the equitable restitutionary principles where money is paid under a mistake of law: see Retail Leases Victoria [130,075]. These possible consequences are not affected by the provisions of the 2005 Amendment Act. Subsection 17(6) was amended by the 2005 Amendment Act so that the tenant may give a notice of termination under subs 17(5) at any time before the end of 28 days after, inter alia, the tenant is given a copy of the proposed lease: see para 17(6)(b). Previously, para 17(6)(b) referred only to the tenant being given ‘a copy of the lease’. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). Section 26 of the 2003 Act provides for disclosure on the renewal of a lease: see Retail Leases Victoria [40,105]. Section 26 of the 2003 Act (as originally enacted) provides for disclosure on renewals, as follows: [page 776] 26. Landlord’s disclosure on renewal of lease (1) If — (a) a tenant has exercised, or is entitled to exercise, an option to renew a retail premises lease granted under the lease; or (b) all of the parties to a retail premises lease enter into an agreement to renew the lease — the landlord must (at least 21 days before the end of the current term of the lease in the circumstances referred to in para (a) and at least 14 days after the entering into of the agreement in the circumstances referred to in para (b)) give the tenant a disclosure statement in the form prescribed by the regulations (but the layout of the statement need not be the same as the prescribed disclosure statement).

(2)

(3)

(4)

(5)

(6)

Note: Section 12(3) changes the way that this section applies to certain leases (for example, the time limit in subsection (1) is changed). The disclosure statement must include information that is current from a specified date that is within 3 months before the statement is given. If the tenant has not been given the disclosure statement before the retail premises lease is renewed, the tenant may give the landlord, no earlier than 7 days and no later than 90 days after the lease is renewed, a written notice that the tenant has not been given the disclosure statement. If the tenant gives the landlord a notice in accordance with subsection (3) — (a) the tenant may withhold payment of the rent until the day on which the landlord gives the tenant the disclosure statement; and (b) the tenant is not liable to pay the rent attributable to the period from and including the day on which the notice was given until and including the day on which the landlord gives the tenant the disclosure statement; and (c) the tenant may give the landlord a written notice of termination at any time before the end of 7 days after the landlord gives the tenant the disclosure statement. If any information provided by the landlord in the disclosure statement is misleading, false or materially incomplete, the tenant may give the landlord a written notice of termination at any time before the end of 28 days after — (a) the tenant is given the disclosure statement; or (b) the lease is renewed — whichever happens last. Section 18 applies to a notice of termination given under subsection (4)(c) or (5) in the same way and to the same

extent as it applies to a notice of termination given under s 17(3)(c) or (5). Note: This section applies to the renewal, on or after its commencement, of a lease entered into before its commencement, see s 11(1). [page 777] Subsection 26(1) has been amended to clarify the nature of the 14-day time limit for the provision of a disclosure statement as a result of an agreement to renew the lease, as distinct from the exercise of an option to renew: see para 26(1)(b) of the Act. Instead of the reference being to ‘at least 14 days’ after entering into of the agreement to renew (as originally enacted in 2003), the 2005 Amendment Act substitutes a requirement of ‘no later than 14 days’. The provisions of subs 26(3), in relation to the notification by the tenant that no disclosure statement has been given, have been recast consistently with the time limits provided for in subs 26(1), as follows: (3) If the tenant has not been given the disclosure statement before the expiration of the relevant period specified in subsection (1), the tenant may, no later than 90 days after the expiration of the relevant period, give the landlord a written notice that the tenant has not been given the disclosure statement. These provisions commence on 23 November 2005 (being the day after the 2005 Amendment Act on 22 November 2005). The disclosure requirements with respect to assignment of leases are contained in s 61 of the 2003 Act, in the context of provisions prescribing the procedure for obtaining consent to assignment: see [23.34] and see Retail Leases Victoria [40,040]. The critical provisions are subss 61(3), (4) and (5) (as originally enacted), as follows: 61. Procedure for obtaining consent to assignment …

(3) Before requesting the landlord’s consent, the tenant must give the proposed assignee — (a) a copy of any disclosure statement given to the tenant concerning the lease; and (b) details of any changes of which the tenant is aware, or could reasonably be expected to be aware, that have affected the information in the disclosure statement since it was given to the tenant. Penalty: 10 penalty units. (4) If the assignment is in connection with the lease of retail premises that will continue to be used for the carrying on of an ongoing business, the tenant must give the landlord and the proposed assignee a disclosure statement in the form prescribed by the regulations (but the layout of the statement need not be the same as the prescribed disclosure statement). (5) For the purpose of complying with subsection (3), the tenant may ask the landlord to give the tenant a disclosure statement that is current from a specified date that is within 3 months before the statement is given and, if the landlord does not give the tenant such a statement within 14 days — (a) the tenant is not required to comply with that subsection; and (b) the landlord is guilty of an offence and liable to a fine not exceeding 10 penalty units. … [page 778] The disclosure provisions contained in s 61 of the 2003 Act have been amended by the insertion of a new subs 61(5A), which is in the same terms as subs 61(4) of the 2003 Act as originally enacted, but subs 61(4) has now been repealed. The effect of these changes is to re-order these subsections, rather

than anything in the nature of a substantive change: see [23.34]; and see Retail Leases Victoria [40,105]. These provisions commence on 1 May 2003. Section 12 of the 2003 Act, which deals with the application of the Act if the lease term is less than a year, specifically applies the requirements of disclosure on renewal, in subs 12(3), as follows: 12. Application if lease term of less than a year … (3) If this Act applies to a lease because of subsection (2) — (a) s 17 (landlord’s disclosure statement) does not apply to the lease; and (b) s 26 (landlord’s disclosure on renewal of lease) applies to the lease with these changes — (i) s 26(1) is taken to provide that the landlord must give the tenant the disclosure statement referred to in that section within 60 days after this Act begins to apply to the lease; (ii) s 26(3) is taken to provide that if the tenant has not been given the disclosure statement within that time, the tenant may give the landlord the notice referred to in that section no earlier than 7 days and no later than 90 days after this Act begins to apply to the lease; (iii) s 26(5)(b) is taken to refer to when this Act begins to apply to the lease.

Effect of statutory provisions [23.38] The Retail Leases Regulations 2013 prescribe a form of disclosure statement for the purposes of para 17(1)(a), subs 26(1), subs 61(5) and subs 61(5A) of the 2003 Act; that is, for each of the circumstances of a new lease, a renewal and an assignment of lease: see reg 8. Each of these provisions states that the layout of the disclosure statement need not be the same as the prescribed disclosure statement. As to the meaning of ‘give’ in the context of

these provisions, reference should be made to s 97 of the 2003 Act, which makes provision for the service of documents. In the case of a new lease under the 2003 Act the landlord is required, at least seven days before entering into a lease, to give the tenant (a) a disclosure statement in the prescribed form and (b) a copy of the proposed lease in writing: subs 17(1); and see Australian Property Buyers Pty Ltd v Kowalski [2006] VCAT 24 (Deputy President Macnamara, 6 January 2006, unreported) (particularly at [28]) as to the manner of creation of leases with reference to the operation of these provisions. The provisions [page 779] of s 15, which require a copy of the lease to be provided at negotiation stage together with a copy of the information brochure about retail leases published by the Small Business Commissioner as required by s 15, should also be noted in relation to the provisions of subs 17(1). In the case of a ‘renewal’ of a retail premises lease, the provisions of subss 26(1) and (2) must be complied with. Where a tenant has exercised or is entitled to exercise an option to renew a retail premises lease granted under the lease, the landlord must at least 21 days before the end of the current term of the lease give the tenant a disclosure statement in the prescribed form. It would appear from the words of para 16(1)(a) that in the event that the tenant is not entitled to exercise the option to renew, these disclosure requirements do not apply. However, in terms of entitlement to exercise, regard should be had to the provisions of ss 27 and 28 of the 2003 Act, the latter which require the landlord to notify a tenant of the last day for the exercise of an option to renew, with the consequences of failure, including the lease term running on until the required notice is given: see [23.30] and [23.31]; and see Retail Leases Victoria [40,055]. The tenant’s entitlement may also be lost by reason of the applicability of the provisions of subs 27(2) as a result of various defaults under the lease: see [3.30]; and see Retail Leases Victoria [40,070]. Where the ‘renewal’ is the result of all of the parties to the retail premises lease entering into an agreement to renew the lease, within para 26(1)(b) of the Act, then the tenant must be given a disclosure statement in the prescribed form no later

than 14 days after the entering into of an agreement of this nature. Subsection 26(2) requires that the disclosure statement include information that is current from a specified date — that is, within three months before the statement is given. As to the meaning of the word ‘given’ in the context of these provisions, reference should be made to s 97 of the Act as to the service of documents. The disclosure requirements under subss 26(1) and (2) will continue to apply to the renewal of a retail premises lease the term of which is extended by reason of the operation of s 28 according to the period of the tenant’s entitlement to exercise the option as a result of the operation of those provisions: see [23.32]; and see Retail Leases Victoria [40,055]. In this respect reference should also be made to the notice requirements of s 64 as to the landlord’s intentions concerning renewal where the tenant under a retail premises lease does not have an option under the lease to renew the lease for a further term: see [23.33]; and see Retail Leases Victoria [40,065]. The consequences of a failure to comply with the notice requirements of s 64 include the lease term running on for the purpose of securing compliance for the benefit of the tenant. The circumstances in which s 64 would apply would be expected to be the circumstances in which para 26(1)(b) may be applicable. Because of the post-agreement time limits provided for in para 26(1)(b), the possible interrelationship between para 26(1)(b) and s 64 does not affect the disclosure requirements (but see Retail Leases Victoria [40,095]). [page 780] The disclosure requirements on assignments of lease under the 2003 Act are similar to those contained in the 1998 Act, but with some important differences. Subsection 61(3) requires that before the tenant seeks the landlord’s consent the tenant must give the proposed assignee (a) a copy of any disclosure statement given to the tenant concerning the lease and (b) details of any changes of which the tenant is aware, or could reasonably be expected to be aware, that have affected the information in the disclosure statement since it was given to the tenant. These provisions are not simply a mandatory requirement but also subject to a penalty of ten penalty units for noncompliance. If the assignment is in connection with the lease of retail

premises that will continue to be used for the carrying on of an ongoing business (the usual case of a sale of a business in leased premises), the tenant must give the landlord and the proposed assignee a disclosure statement in the prescribed form. As has been discussed previously, the giving of a disclosure statement in accordance with subs 61(5a) (formerly subs 61(4), which has been repealed by the Retail Leases (Amendment) Act 2005) is a prerequisite to the protection of assignors and guarantors under s 62: see [23.35]; and see Retail Leases Victoria [40,050]. If a considerable period of the lease term has elapsed before the proposed assignment, it follows that the disclosure statement originally given to the tenant may be significantly out of date. This is significant as there are a number of important elements in the disclosure statement which require input according to the current knowledge of intent of the landlord if the statement is to remain currently meaningful. It is apparently to meet this circumstance that subs 61(5) provides that the tenant may ask the landlord to give the tenant a disclosure statement that is current from a specified date that is within three months before the statement is given, in order to enable the tenant to comply with subs 61(3). If the landlord does not comply with the tenant’s request and give the tenant a statement within 14 days, (a) the tenant is not required to comply with subs 61(3) and the landlord is guilty of an offence and liable to a fine not exceeding ten penalty units. Reference should also be made to s 97 of the Act in relation to the service of documents with respect to the use of the word ‘give’ in relation to the disclosure statement provisions of subss 61(3) to 61(5a). The provisions of subss 12(3) of the 2003 Act apply the s 26 (landlord’s disclosure on renewal of lease) provisions in the context of the application of the Act if the lease term is less than one year. This is on the basis that the application of the Act is triggered under subs 12(2) as a result of the tenant’s continuous possession of the retail premises for one year or more: see [23.14]; and see Retail Leases Victoria [30,005] and [30,095]. It will be seen that the s 26 provisions are adapted to this particular circumstance by altering the time limit within which the disclosure statement is to be given from 21 days, as in the usual case of renewal under an option to renew, to 60 days after the Act begins to apply to the lease which, in context, must mean in accordance with the application provisions of subs 12(2).

[page 781]

Consequences of non-compliance with disclosure requirements [23.39] The consequences of non-compliance with the disclosure requirements of the 2003 Act depend upon the nature of the non-compliance and the circumstances in which the non-compliance has occurred. The provisions of ss 17 (new leases) and 26 (renewal of lease) of the 2003 Act confer the right to give a notice of termination in two circumstances. The first is where the tenant has not been given a disclosure statement before entering into a retail premises lease and has triggered the operation of subss 17(3) and 26(4) by giving the landlord a notice under subs 17(2) or subs 26(3), respectively, of this fact. Under para (c) of subs 17(3) or subs 26(4) the tenant may give the landlord a written notice for termination at any time before the end of seven days after the landlord gives the tenant the disclosure statement required under the relevant set of provisions. The other circumstance in which a (written) notice of termination may be given is where, in the case of the grant of a new lease, any information provided by the landlord in the disclosure statement is ‘misleading, false or materially incomplete’ or the tenant is not given a copy of the proposed lease in accordance with the requirements of para 17(1)(b): see subs 17(5). The disclosure requirements of subss 17(5) and 26(5) of the 2003 Act, which apply to new leases and lease renewals, respectively, expressly provide a tenant’s right of termination where the information provided by a landlord in a disclosure statement is ‘misleading’ or ‘false’: see para 17(5)(a) and subs 26(5). The question whether a disclosure statement is ‘misleading’ or ‘false’ may raise difficult issues. The words used invite reference to decisions under s 52 of the Trade Practices Act 1974 (Cth) (see generally, R Miller, Trade Practices Act, 29th ed, Lawbook Co, Australia, p 476 and following; and D Everett and A Ransom, The Fair Trading Acts, Longman Professional, 1989, p 96 and following). In Weitmann v Katies Ltd (1977) 29 FLR 336 at 344 it was said that ‘misleading’ means ‘to lead astray in action or conduct; to lead into error, to cause to err’. In Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR

77 at 81 Northrop J said a statement is misleading ‘if it would lead one ordinary member of the public … into error’ (see also Miller, 1.52.45). The meaning of the word ‘false’ is helpfully considered in light of the authorities on s 53 of the Trade Practices Act (in relation to false or misleading representations): see Miller, para 1.53.15. See also Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26; [2004] HCA 3; BC200400148 (5 February 2004); and Barbcraft Pty Ltd v Goebel Pty Ltd [2003] VCAT 1700 (Deputy President Macnamara; 3 November 2003) and Vand Pty Ltd v Highpoint Shopping Centres (Leasing) Pty Ltd [2004] VCAT 2016 (Deputy President Macnamara; 21 October 2004). [page 782] A notice of termination under subs 17(5) may be given by a tenant at any time before the end of 28 days after the happening of the last of the following events: (a) the tenant is given the disclosure statement under the provisions of s 17; (b) the tenant is given a copy of the lease; or (c) when the lease is entered into (see subs 17(6)). The corresponding provisions of subs 26(5) are slightly different in drafting and content because of the differences between the requirements and provisions of subs 26(1) and subs 17(1). Nevertheless, the general scheme is otherwise the same. Under subs 26(5) the tenant is entitled to give a written notice of termination at any time before the end of 28 days after the happening of the last of the following events: (a) the tenant is given the disclosure statement in accordance with the provisions of s 26; or (b) the lease is renewed. A new section, s 18, makes specific provision for the effect of a notice of termination, as follows: 18. Effect of notice of termination (1) If a tenant under a retail premises lease gives the landlord a notice of termination under — (a) s 17(3)(c) within the time allowed by that section; or (b) s 17(5) within the time allowed by s 17(6) — the lease terminates 14 days after the notice is given unless

(2)

(3)

(4)

(5)

the landlord gives the tenant a notice of objection to the termination. Within 14 days after being given the notice of termination the landlord may give the tenant a notice of objection to the termination on the ground that — (a) the landlord has acted honestly and reasonably and ought fairly to be excused for the contravention; and (b) the tenant is substantially in as good a position as the tenant would have been in if there had been no contravention. If the tenant advises the landlord that the tenant accepts the landlord’s notice of objection or the notice is upheld under Part 10, the lease does not terminate in accordance with the notice of termination despite subsection (1). The tenant is taken to have accepted the notice of objection if the tenant does not advise (in writing) the landlord, within 14 days after being given the notice, whether or not the tenant accepts it. The operation of a notice of termination under s 17(3)(c) or (5) is suspended until the effect of a notice of objection to it is determined.

Subsection 26(6) provides that s 18 applies to a notice of termination given under para 26(4)(c) or subs 26(5) in the same way and to the same extent as it applies to a notice of termination given under para 17(3)(c) or subs 17(5). It should be emphasised that each of these provisions requires that the notice of termination be in writing and that it be given to the landlord (as to the meaning of ‘give’ in the context of these provisions, see the service of documents provisions contained in s 97). [page 783] If a notice of termination is given under any of the provisions of ss 17 or 26

referred to in subss 18(1) or 26(6) the lease terminates 14 days after the notice is given, unless the landlord gives the tenant a notice of objection to the termination: see subs 18(1). A notice of objection to the termination may be given by the landlord within 14 days of being given the notice of termination: see subs 18(2). The notice of objection to the termination may only be given on the ground that: (a) the landlord has acted honestly and reasonably and ought fairly to be excused for the contravention; and (b) the tenant is substantially in as good a position as the tenant would have been if there had been no contravention (subs 18(2)). These provisions borrow heavily on subs 32(7) of the Sale of Land Act 1962 (as to which see Curtain v Aparo [1988] ANZ ConvR 508; (1988) V ConvR ¶54-316; Payne v Morrison [1991] ANZ ConvR 458; (1992) V ConvR ¶54-428 and Narcan Pty Ltd v Piccol Credit Cooperative Ltd [1993] ANZ ConvR 393; (1992) V ConvR ¶54-426; which are discussed at Retail Leases Victoria [190,095]). If the tenant advises the landlord that it accepts the landlord’s notice of objection or the notice is upheld by VCAT under Pt 10 of the 2003 Act, then the lease does not terminate in accordance with the notice of termination, despite subs 18(1): see subs 18(3). Under subs 18(4) the tenant is taken to have accepted the notice of objection if it does not advise the landlord in writing, within 14 days after being given the notice, whether or not the tenant accepts it. Subsection 18(5) suspends the operation of a notice of termination until the effect of the notice of objection to it is determined. Finally, whichever provision a lease is determined in accordance with, the termination does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the lease before the date of termination, unless the landlord and tenant otherwise agree, or it is otherwise provided by the 2003 Act or determined by VCAT under Pt 10 of the Act: see s 19 of the 2003 Act, which reflects subs 8(12) of the 1998 Act. Finally, the provisions of subss 17(5) and 26(5) of the 2003 Act should be compared with the provisions of subss 8(5) of the 1998 Act (new lease) and the provisions of s 17 of that Act (renewals). First, it should be noted that the 2003 Act now permits termination for breach of the disclosure requirements in relation to both new leases and renewals (subject to necessary variations to take account of the different circumstances in which the provisions apply). This is in marked contrast to the provisions of the 1998 Act which did not apply the equivalent of the subs 17(5) provisions of the 2003 Act (provisions

which reflect and expand the provisions of subs 8(5) of the 1998 Act) to the disclosure requirements upon renewal of a lease, under s 17 of that Act. The provisions of subs 8(5) of the 1998 Act have also been expanded to add, in para (a), the words ‘or materially incomplete’. This addition is apparently intended to avoid the position taken in Nature’s World (Chadstone) Pty Ltd v Perpetual Trustees Ltd [2001] VCAT 654 which suggests that a disclosure statement that is materially deficient or wrong is in effect a ‘non notice’, its legal effect being the same as a failure to [page 784] serve notice: at [17]. See also Napper, Nieling & Rose v PT Ltd, Terry White Ltd (VCAT (M F Macnamara, Deputy President) 13 March 2003, unreported) and Richmond v Morse (2004) V ConvR ¶58-573; [2003] VCAT 505 (Deputy President Macnamara) (all of which are discussed at Retail Leases Victoria [130,075] and [130,090]). As to the calculation of periods of notice, see Industrial Services Pty Ltd v 52– 64 Latrobe Street Pty Ltd [2007] VCAT 918 (14 April 2005) (Deputy President Macnamara) at [8]–[10]; and, more generally, Morton v Hampson [1962] VR 364; and see Retail Leases Victoria [30,100]. The position is similar with respect to a lease term of less than one year in the event that the provisions of the Act apply by the operation of subs 12(2), in which event the disclosure requirements of s 26 (landlord’s disclosure on renewal of lease) apply. Subsections 61(3) to 61(5a), which provide for disclosure on assignment, do not provide for any right of termination or other consequences, apart from the penal provisions attached to subss 61(3) and (5), which have been discussed, and the protection of assignors and guarantors provisions of s 62 being dependent upon compliance with the disclosure requirements under subs 61(5a) (formerly subs 61(4), which has been repealed by the Retail Leases (Amendment) Act 2005): see [23.38]. Apart from the possibility of termination of the lease for breach of the disclosure requirements of ss 17 and 26, there is the possibility of the tenant withholding payment of rent and the rent obligation otherwise being

abrogated pending the landlord’s compliance with the disclosure requirements. The consequences of non-compliance do not include invalidity of the lease: see Wei Hong Fang v Main Street Shopping Centre Pty Ltd (VCAT; Deputy President Macnamara; 16 October 2007; unreported) [62]) In the case of the grant of a new lease, subs 17(2) provides that if the tenant has not been given a disclosure statement before entering into the retail premises lease, the tenant may give the landlord no earlier than seven days and no more than 90 days after the entering into of the lease a written notice that the tenant has not been given the disclosure statement: as to the date of entering into the lease, see s 7: and see [23.12]. The giving of a notice by the tenant to the landlord under subs 17(2) is a trigger for the operation of subs 17(3), which is set out at [23.38]. Although the content of subs 17(3) is substantially the same as the provisions of subs 8(2) of the 1998 Act, varied taking account of the timing considerations arising under subs 17(2), the important difference is that the current sanction is contingent upon the tenant’s prior notice that the disclosure statement provisions have not been complied with (compare Retail Leases Victoria [130,075] as to the operation of subs 8(2)). The position with respect to lease renewals is very similar. Subsection 26(3) provides for a tenant’s notice that a disclosure statement has not been given on renewal no later than 90 days after the expiration after the relevant period specified in subs 26(1). It will be noted that the terminology in this subsection is ‘renewed’, which is a reference to the extent and

[page 785] meaning of ‘renewal’ in s 9 and as reflected in subs 26(1): see [23.16] as to the extended meaning of ‘renewal’. The effect of a tenant’s notice under subs 26(3) is to trigger the provisions of subs 26(4), which are in identical terms to subs 17(3). The provisions of subs 26(3) are adapted by s 12 with respect to the application of the Act if a lease term is less than a year. Paragraph 12(3)(b) (ii) provides that subs 26(3) is taken to provide that if the tenant has not been given the disclosure statement within 60 days after the Act begins to apply to the lease the tenant may give the landlord the notice referred to in that section (that is, s 26) no earlier than seven days and no more than 90 days after the Act begins to apply to the lease (under subs 12(2)). Having regard to the nature of the provisions of s 12 and the triggering event of its application under subs 12(2), which is the tenant being continuously in possession of the retail premises for one year or more under the lease (after the commencement of s 12 on 1 May 2003), the fulfilment of this condition may be unpredictable until the 12 month period has actually elapsed. In relation to subs 17(3) and subs 26(4), some comment is required about their elements and their likely interpretation having regard to the history of the interpretation of the corresponding provisions of subs 8(2) and subs 17(2) of the 1998 Act (though the crucial difference of the requirement of a tenant’s notice to trigger their operation under the 2003 Act must be kept in mind). The provisions of para (a), which entitle the tenant to withhold the payment of rent until the landlord gives the tenant a disclosure statement, appeared reasonably straightforward until the decision of the Court of Appeal in Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331, as interpreted with respect to the primary (rather than restitutionary counterclaim) aspects of this decision with respect to the corresponding provisions of the Retail Tenancies Reform Act 1998 in Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported): and see R & C Mazzei Nominees Pty Ltd v Aegean Food Import Export Pty Ltd [2006] VSC 210; BC200604402 and Retail Leases Victoria [130,075]. Generally speaking, it is rarely prudent for a

tenant to withhold payment of rent as a means of asserting its rights under a lease as this immediately invites the allegation by the landlord that the tenant is in default. Further, the failure to pay rent (short of repudiatory conduct) is a species of default to which the provisions of s 146 of the Property Law Act 1958 do not protect by requiring notice to remedy the default, with a period of time for the tenant to do so, before the landlord may forfeit the lease: see Retail Leases Victoria [240,025]. Lease provisions commonly provide for relatively summary forfeiture for non-payment of rent which will leave the then former tenant seeking to reinstate the lease by an application for relief against forfeiture. An obvious circumstance in which a tenant might be illadvised to rely on para (a) and withhold payment of rent is where there is some argument as to whether or not a disclosure statement was actually provided. Given the provisions of subs 17(1) and [page 786] subs 21(1) and the note to the Sch 1 disclosure statement contained in the Retail Leases Regulations 2003, which indicate that a disclosure statement in the form or to the effect of the prescribed form will be sufficient, it would not appear that this situation is likely to arise very frequently, which means that the para (a) remedy is likely to be quite effective in securing compliance with the disclosure requirements. In the event that a tenant seeks to rely on para (a), it is most important that the landlord be given clear and express notice that this is being relied upon, with reference to the relevant statutory provisions and the basis upon which it is said that they apply. Failure to make this position expressly clear will leave a tenant open to allegations of mere default in payment of rent, as would a retrospective notice for the purposes of para (a), after the non-payment of rent has occurred. Failure to expressly claim reliance on para (a) may also be relevant for the purposes of an allegation, or defending an allegation, of repudiation by the tenant of the lease by its nonpayment of rent (though mere non-payment of rent would not in itself amount to repudiation unless in the circumstances it was indicative of the tenant’s intention henceforth not to comply with the terms of the lease: see [16.29] to [16.34]).

The effect of para (b) appeared to operate, as it did in the corresponding provisions of the 1998 Act, to abrogate entirely the tenant’s obligation to pay rent until the landlord gives the tenant a disclosure statement in accordance with the Act (see Raven Financial Group Pty Ltd v 52nd Wayre Pty Ltd (VCAT, M F Macnamara, Deputy President, 3 April 2000, unreported) at [16] and [18], and see Cutting Edge Victoria Pty Ltd v Industry Superannuation Property Trust Pty Ltd (2001) V ConvR ¶58-550; [2000] VCAT 2011 (M F Macnamara, Deputy President) at [22] where it was held that a failure to give a disclosure statement under s 8 of the 1998 Act (apparently erroneously referred to as s 7) ‘results in not only suspension of the obligation to pay rent imposed upon the tenant by the lease but a forfeiture of that entitlement by the landlord … rent is not deferred or suspended, it is wholly forfeited’). This position has, however, become much less clear following the Court of Appeal’s decision in Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331, in which a restitutionary counterclaim by the landlord for use and occupation was allowed: see Retail Leases Victoria [130,075]. Having regard to the drafting and apparent legislative purpose of para (b) of the corresponding provisions of the 1998 Act, it appeared (on the reasoning in Raven Financial Group and The Cutting Edge) that these provisions would not have provided a basis for a ‘primary’ claim for rent, or its equivalent, on any basis. Nevertheless a different position was taken in Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported) where what was in substance a primary use and occupation claim was allowed; though the fact that these provisions did preclude a claim for rent had the effect of defeating the landlord’s entitlement to re-enter for non-payment of rent: and see Retail Leases Victoria [130,075]. On this basis, the combined operation [page 787] of paras (a) and (b) would indicate that, once a tenant’s notice has been given under subss 17(2) or 26(3), there is no obligation on the tenant to pay the rent; but there may be an obligation to meet and use an occupation claim in the future. Clearly one option for the tenant is to give notice under para (a)

and withhold the rent, in which case para (b) indicates that it is not a withholding on the basis of a suspension of obligation to pay rent but, rather, that the rent obligation has been expunged, almost literally taken out of the lease covenants, until the landlord provides the tenant with a disclosure statement under the Act; though the possibility of a landlord’s use and occupation claim makes this, ultimately, more of academic rather than practical interest. Assuming that the Kiwi Munchies approach is followed, there does remain the practical consequence that the tenant may safely withhold rent under these provisions without thereby creating any default under the lease which could provide the basis for re-entry or a claim that the lease has thereby been repudiated. Consequently some sanction against a landlord remains for non-compliance with the disclosure requirements under the 2003 Act but it does not appear to have the same strength in the sanction that appears to have been contemplated by parliament: see Retail Leases Victoria [130,075]; and see Croft, ‘Disclosure obligations and the abolition of the Dog Depot decision’ (2006) 7 APLJ 36. The further question is whether a tenant which has not elected to exercise its rights under para (a) and continues to pay rent may, nevertheless, recover the rent paid under para (b). The position under the corresponding provisions of paras 8(2)(b) and 17(2)(b) of the 1998 Act was that tenants could recover rent paid under these provisions where landlords failed to comply with the disclosure requirements on the basis that the rent paid was recoverable as subtenant paid under a mistake of law under the restitutionary principles stated by the High Court in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; 109 ALR 57; BC9202662; but only so long as payments were made during the period in which the mistake, the lack of knowledge of rights under the relevant 1998 Act provisions, continued: see Jovanovski v Santana (2001) V ConvR ¶58-564 (VCAT, Deputy President Macnamara); Dog Depot Pty Ltd v Ovidio Carrideo Nominees Pty Ltd (VCAT, Member Aird, 17 December 2003, unreported); Fabian Amber Pty Ltd v Ben Liano (t/as St Elbright Motors) (VCAT (Deputy President Macnamara), 22 December 2003, unreported); Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2004] VSC 400; BC200406890 (15 October 2004); and Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331; compare Elmer v Minute Wit Enterprises Pty Ltd [2002] VCAT 1101 (Senior Member Davis); but this position has now been rejected, apparently in all but the most exceptional

(unconscionable) circumstances, by the Court of Appeal in Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331 (8 February 2006). (See Retail Leases Victoria [130,075] and [130,090]). On this basis, and if the path to recovery of rent paid is proof of moneys paid under a mistake of law on the David Securities principle (in the most exceptional circumstances contemplated in Dog Depot), then the rent paid would not [page 788] be recoverable by the tenant in spite of para (b) because any mistake that persisted in the mind of a tenant as to its rights under these provisions would necessarily have been dispelled on its giving a notice which triggers these provisions under subs 17(2) or 26(3). In other words, the operation of para (b) could only arise after the tenant’s mistake is dispelled: compare the approach in Elmer v Minute Wit Enterprises under which the subtenant would not have been recoverable in any event. Alternatively, it might be argued that any rent paid by a tenant is recoverable not on a restitutionary basis relying upon the principle in David Securities but rather on the basis of the statutory powers conferred on the tribunal under s 91 of the Act, combined with the declaration in para (b) that, in effect, the landlord is not entitled to rent paid after a tenant’s notice and before the landlord complies with the disclosure requirements (but see above in relation to the Kiwi Munchies approach). It might be argued that, as the para (b) situation does not arise under the 2003 Act until the landlord has been put on notice that the position has arisen (unlike the position under the 1998 Act), there is not the same injustice in allowing recovery of rent paid as emphasised in the Elmer v Minute Wit Enterprises decision in relation to the 1998 Act. Nonetheless, the more simple and compelling interpretation appears to be that the purpose of para (b) was to put beyond doubt that once a tenant has withheld payment of rent under para (a) the obligation is gone forever, the rent obligation is abrogated not suspended and the tenant will never be obliged to make up any of the payments withheld under para (a). In other words, that is the potential sanction under the 2003 Act for the landlord failing to comply with the

disclosure requirements in terms of payments of rent: but see Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331; and Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported) in relation to the possible substantial ‘abrogation’ of these provisions by a use and occupation claim; and see R & C Mazzei Nominees Pty Ltd v Aegean Food Import Export Pty Ltd [2006] VSC 210; BC200604402 and Retail Leases Victoria [130,075]. Finally, para (c) also gives the tenant the right to give the landlord a written notice of termination at any time before the end of seven days after the landlord gives the tenant the disclosure statement. This maintains the ability of the tenant to assess its position in light of the contents of the disclosure statement and to decide whether or not to continue with the lease. The sanctions for failure to comply with the disclosure statement requirements for new leases also include subs 17(4) under which the tenant is not liable to pay the rent attributable to a period prior to the premises being available for handover, where they are not available for handover to the tenant on the date specified in the disclosure statement. Subsection 17(4) is slightly ambiguous in its drafting because, on a strict grammatical reading, the reference to ‘that date’, which is critical with respect to the obligation to pay rent, might be said to be a reference back to the [page 789] date specified in the disclosure statement. Assuming that the liability to pay rent was otherwise to commence on the date shown on the disclosure statement, and not before, a strict grammatical construction would negate what appears to be the purpose of this subsection. As subs 17(4) is not triggered by a prior notice by the tenant to the landlord under provisions similar to subss 17(2) or 26(3), there remains the potential for argument that rent payments have been made by the tenant under a mistake of law because it was not aware of its rights not to make the payments under subs 17(4). This invites the possible application of the restitutionary principles in David Securities as applied in Jovanovski, Dog Depot and Fabian Amber and the other

decisions which are discussed above; but apparently only in the most exceptional (unconscionable) circumstances, as indicated by the Court of Appeal in Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd (2006) V ConvR ¶54-713; [2006] VSCA 6; BC200600331 (8 February 2006); and see Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported): see Retail Leases Victoria [130,075] and [130,090]. Further, as to issue with respect to waiver and estoppel in the event that the David Securities principles are otherwise applicable, see Retail Leases Victoria [130,075]. Similar issues also arise under the subs 17(4) provisions in relation to right of a landlord to bring a primary claim for use and occupation, rather than a rent claim, in spite of these provisions: see above, in relation to the para (b) provisions and the effect of the Court of Appeal decision in Dog Depot and the decision of Deputy President Macnamara in Kiwi Munchies.

Rent and rent review [23.40] Section 35 of the 2003 Act regulates rent review under leases entered into after the commencement of that Act (subject to some extended application of s 35 under s 36 of the 2003 Act): see Retail Leases Victoria [50,005]. Subsection 35(1) requires the lease to state: (a) when the reviews are to take place; and (b) the basis or formula on which the reviews are to be made. The opening part of subs 35(1) makes it clear that the rent review provisions apply to the lease term and to any renewed term, and also to the fixing of rent for the first year of a renewed term ‘under a renewal of the lease’. These words represent a change from the wording of subs 12(1) of the 1998 Act and a clear extension of the application of these provisions to ‘renewal’ in the broad sense as provided in s 9 of the 2003 Act: see [23.16]; and see Retail Leases Victoria [30,015]. Apart from this change these provisions reflect the provisions of subs 12(1) of the 1998 Act which, themselves, made a significant change to the position under the 1986 Act, where it was not clear whether the rent review provisions of s 10 of that Act applied to the fixing of the initial rent of a renewed term, both because of the actual words used in s 10 and the

statements in the Second Reading Speeches on the Bill that became the 1986 Act [page 790] that the legislation was not intended to fix or otherwise control ‘initial rents’: see Retail Leases Victoria [200,045]. Subsection 35(2) provides that the basis or formula on which a ‘rent review’ is to be made must be one only of the following: (a) (b) (c) (d) (e)

a fixed percentage; an independently published index of prices or wages; a fixed annual amount; the current market rent of the retail premises; basis or formula prescribed by the regulations.

Whatever may have been the position under the 1986 Act, it is clear from the words of subs 12(2) of the 1998 Act and now subs 35(2) of the 2003 Act that the specific bases or formulae cannot be ‘mixed’, provided what is being mixed is more than one ‘basis or formula’: see Retail Leases Victoria [200,025] with respect to the 1986 Act and see [50,040]. This is clear from the use of the words ‘one only’ (as to this expression in subs 12(2) of the 1998 Act, see Fazzolari v Couchouron (2003) V ConvR ¶58-572; [2003] VCAT 503 at 36; and see Retail Leases Victoria [200,015]). It seems, however, that it is permissible to use a different basis or formula at each rent review date because of the use of the plural ‘reviews’ in subs 35(1) and the singular ‘review’ in subs 35(2). On this basis it would appear that subs 35(1) refers to all rent reviews during the lease term, on the renewal of the lease (in the broad, s 9, sense (see [23.16])) and during any renewed term of the lease and that subs 35(2) refers to each rent review during the term, on the renewal of the lease and during any renewed term. There is also the more general and substantive reason that the 2003 Act — as was the 1986 Act and the 1998 Act (see Retail Leases Victoria [10,025], [110,015] and [170,015]); and see [20,025] — is ameliorating or remedial legislation so it should be given a broad interpretation to give

effect to its ameliorating or remedial purpose. In this respect, permitting variation in the application of types of permitted rent review bases or formulae as between various rent review dates is likely to be as much in the interests of the tenant as the landlord. Although the provisions of subss 12(1) and (2) of the 1998 Act, like the corresponding provisions of subss 35(1) and (2) of the 2003 Act, are prescriptive, the provisions of subs 12(3) of the 1998 Act did seem to contemplate the possibility of other types of rent review provisions: see Retail Leases Victoria [140,015]. This ambiguity in the 1998 Act has been cured by re-drafting the provisions of subss 12(3) and (4) of the 1998 Act and reversing the order of those provisions, which now appear in subss 35(3) and (4) of the 2003 Act. The new provisions now commence with the general proposition, in subs 35(3), that a provision in a retail premises lease is void to the extent that it purports to preclude, or prevent or enables a person to prevent, the reduction of the rent or to limit the extent to which the rent may be reduced (in other words, ‘ratchet provisions’). [page 791] Subsection 35(4) is now a qualification on this general proposition, excepting out of the prohibition a provision that uses (a) a basis or formula referred to in para (a), (b) or (c) of subs 35(2); or (b) a prescribed basis or formula referred to in para (e) of subs 35(2) that is also prescribed as a basis or formula to which subs 35(3) does not apply (no regulations have been made for the purpose of these provisions). Subsection 35(5) of the 2003 Act provides that a rent review is to be conducted as early as practicable within the time provided by the lease. If the landlord has not initiated the review within 90 days after the end of that time, the tenant may initiate the review. The ‘time provided by the lease’ could refer either to the time provided by the lease at which the rent review process is to be initiated or the time it is to be concluded or, in the absence of any provisions of this nature, the commencement of the period for which the rent is to be reviewed (whether it is a period within the term of a lease or the initial rent for a renewed lease). The better construction of subs 35(5), in

order to give efficacy to its provisions, would seem to be that the expression ‘time provided by the lease’ is to be taken to mean the time provided for in any express provisions with respect to rent review or, in the absence of any provisions of this nature, the date of commencement of the new rent period (or new lease term). Apart from these provisions, nothing in s 35 alters or impinges upon the common law position in relation to the observance of time limits in respect of rent review clauses: see United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904; [1977] 2 All ER 62 (HL); and see (1978) 52 ALJR 4; and [11.6]. Subsection 35(6) provides that a rent review provision in a retail premises lease is void if the lease does not specify how the review is to be made. This is a re-enactment of subs 12(4) of the 1998 Act and subs 10(3) of the 1986 Act (and as to the latter, see Barbcraft Pty Ltd v Goebel Pty Ltd [2003] VCAT 1700 (3 November 2003) and see Retail Leases Victoria [200,025]). It appears that subs 35(6) is intended to deal with rent review provisions that are so ambiguous or uncertain as to be void for uncertainty; at least to the extent that this would be the position at common law: see Retail Leases Victoria [200,030]; and see Barbcraft v Geobel. Reference has been made to a number of provisions in s 35 which have the effect of avoiding rent review provisions in whole or in part. The consequence appears to be the operation of subs 35(7), which provides a process for rental determination on review by agreement between the landlord and tenant, or rent review based on the current market value as determined by a specialist retail valuer appointed by the Small Business Commissioner, in default of agreement. The operation of these provisions also attracts the obligation of the landlord and tenant to pay the costs of the valuation in equal shares under subs 35(8). In order to overcome the particular circumstance highlighted in Ensabella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626; [2000] VSCA 73; [page 792]

BC200002299 (and see Retail Leases Victoria [50,065]), s 36 was included in the 2003 Act. Section 36 provides as follows: 36. Extended application of s 35 In addition to a retail premises lease to which s 35 applies because of Part 3, that section applies to the determination on a rent review (conducted after the commencement of s 11) of the commencing rent for the renewed term of a retail premises lease that was entered into before that commencement, and to any subsequent review of the rent payable under the renewed lease, if this Act would have applied to the lease had it been entered into after that commencement. The 2005 Amendment Act amended the footnote to subs 35(2) to correct the reference to s 36 to be a reference to s 37, which contains provisions with respect to determination of the current market rent, either by agreement or by a specialist retail valuer: see Retail Leases Victoria [50,015]. Subsection 35(7) provides for the process of rent review by agreement or determination by a specialist retail valuer appointed by the Small Business Commissioner in the event that a provision in a retail premises lease that provides for a review of the rent does not comply with subs 35(2). These provisions have been amended also to include within their ambit a situation where a rent review provision in a retail premises lease is rendered void under subs 35(6) because the lease does not specify how the review is to be made. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). Sections 37 and 38 of the 2003 Act contain specific and extensive provisions with respect to rent reviews based on current market rent: see Retail Leases Victoria [50,015]. Section 37 provides the current market rent review mechanism which is, principally, the determination of rent by a specialist retail valuer. The meaning of the expression ‘current market rent’ is crucial to the operation of s 37. Current market rent is, in effect, defined by the provisions of subs 37(2), which is a re-enactment, with substantial redrafting, of subs 12(5) of the 1998 Act: see Retail Leases Victoria [140,015]. The provisions of subs 12(5) were considered in Justbake Pty Ltd v Otranto Nominees Pty Ltd

(VCAT, Senior Member Davis, 22 October 2003, unreported) where a valuer had given a valuation of the current market rent of a retail premises taking into consideration goods and services tax liability in determining the current market rent. In addressing the question whether the valuer had given a valuation of the current market rent in accordance with the lease and subs 12(5) of the 1998 Act, Senior Member Davis said at [28]: Thus, in my view, reading the valuation as a whole, the valuer did not come to his determination by calculating the market rental and adding GST to that figure. What he in fact did was calculate the market rental in accordance with the terms of the lease and then deduct the amount of GST that the landlord would be required to pay. Thus, in my view, the mistake that the valuer has made is not the kind of mistake [page 793] that demonstrates that the valuation is not made in accordance with the terms of the contract. In determining the rental at $47,300 it is probable that the valuer took into account the GST had on ‘economic behaviour and on current market rental’ (see [Orti-Tullo v Sadek (2001) 10 BPR 19,179; [2001] NSWSC 855; BC200106187 (28 September 2001) Bryson J] case, at [24]). However, that did not mean that he went outside the terms of the lease, because the GST is relevant to ‘current market rental’ as used in s 12(5) of the Retail Tenancies Reform Act 1998. Subsection 37(2) of the 2003 Act does not make any specific reference to the treatment of GST and on the basis of its terms, generally, it would seem that Justbake is apposite to its provisions. It should be noted that subs 37(2) specifically excludes from consideration the value of goodwill created by the tenant’s occupation or the value of the tenant’s fixtures and fittings. These provisions did not appear in subs 12(5) of the 1998 Act (but query the extent to which this position might have been reached under para 12(5)(c) of the 1998 Act, which required the valuer to take into account ‘all other relevant factors, matters or variables used in proper land valuation practice …’). The

provisions of subs 37(2), in effect, provide the critical ingredients of the contract under which the valuation is to be determined: see Legal & General Life of Aust Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314; (1985) NSW ConvR ¶55-237; Commonwealth of Australia v Wawbe Pty Ltd (1999) V ConvR ¶54-599; [1998] VSC 82; BC9805379; Orti-Tullo v Sadek; and see also Justbake v Otranto Nominees; Stephens v Gerandu Pty Ltd [2004] VCAT 1350 (Deputy President Macnamara, 14 July 2004); Kurc v Eyecare Pty Ltd [2004] VCAT 1139 (Deputy President Macnamara, 16 June 2004); and see Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported); and see Retail Leases Victoria [140,015]. In relation to the nature of a ‘review opportunity’ under Goods and Services Tax legislation in the context of rent review provisions in leases, and having regard to the relative incidence of the tenant’s obligations to pay base rent, percentage rent and also outgoings, see Commissioner of Taxation v DB Rreef Funds Management Ltd (2006) 152 FCR 437; [2006] FCAFC 89; BC200604120 and Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty Ltd (2006) 152 FCR 461; 232 ALR 38; [2006] FCAFC 115; BC200605241; and generally in relation to GST liability in this context, see Retail Leases Victoria [140,015]. As to the use of the ‘profits method’ in determining current market rent, see Serene Hotels Pty Ltd v Epping Hotels Pty Ltd [2015] VSCA 228. Subsection 37(3) states what is implicit, namely that if the parties cannot agree on the amount that the rent is to be, then it is to be determined by another mechanism. As to the meaning of ‘agreement’ in the subsection, see Figgins Holdings Pty Ltd v Williamson Place Pty Ltd [2010] VCAT 243. The mechanism is provided by that subsection and is determination by a valuation carried out by a specialist retail valuer appointed: (a) by agreement between the landlord or the tenant; or (b) in the absence of agreement, by the Small Business Commissioner. Subsection 37(3) specifically provides that the [page 794] landlord and the tenant are to pay the costs of the valuation in equal shares. The expression ‘specialist retail valuer’ is defined in s 3 of the 2003 Act as follows:

‘specialist retail valuer’ means — (a) for the purposes of a valuation relating to retail premises in a retail shopping centre, a valuer having not less than 5 years’ experience in valuing retail premises located in regional or sub-regional shopping centres; or (b) for the purposes of a valuation relating to any other retail premises, a valuer having not less than 5 years’ experience in valuing retail premises; The machinery for the valuation process, time limits and sanctions (applicable to the landlord) for non-provision of relevant information to the specialist retail valuer are contained in subss 37(4) to 37(7). Under subs 37(4) the landlord must within 14 days after a request by the specialist retail valuer supply the valuer with relevant information about leases for retail premises located in the same building or retail shopping centre (as to which, see Retail Leases Victoria [60,030]), to assist the valuer to determine the current market rent. Failure to comply with these provisions leaves the landlord liable to a fine of up to 50 penalty units. The specialist retail valuer is specifically empowered to make an application to VCAT under Pt 10 of the 2003 Act for an order that a landlord comply with a request under subs 37(4): see subs 37(7). Subsection 37(5) specifically directs the specialist retail valuer to take into account the matters set out in subs 37(2) which, in effect, provides the essential ingredients of the contract under which the valuation is to be determined: see above. Subsections 37(6) and (7) address themselves to the specialist retail valuer. Under subs (6) the valuation must be in writing, contain detailed reasons for the determination, and specify the matters to which the valuer had regard in making the determination. In other words, these provisions specifically require what is generally known as a ‘speaking’ valuation: see Legal and General Life v Hudson and Commonwealth of Australia v Warbe and Pinebark. The obligations imposed on a valuer by subs 37(6) were considered in detail by Croft J in Higgins Nine Group Pty Ltd v Ladro Grenville St Pty Ltd [2016] VSC 244. Subsection 37(7) of the 2003 Act required the specialist retail valuer to carry out the valuation within 45 days after accepting the appointment. The 2005

Amendment Act introduces more flexibility in this respect, allowing for such longer period as may be agreed between the landlord and tenant or, in the absence of agreement, as determined in writing by the Small Business Commissioner: see new subs 37(7), inserted by the 2005 Amendment Act. Additionally, para 37(7)(b), which enabled the specialist retail valuer to apply to VCAT under Pt 10 of the 2003 Act for an order that a landlord comply with a request by a specialist retail valuer as specified in subs 37(4), was amended to enable this obligation to be enforced more broadly, under all the dispute resolution mechanisms of Pt 10 of the 2003 Act, not merely by resort to VCAT. This means that reliance could be placed on the agreement reached at a mediation proceeding under the auspices of the Small Business Commissioner provided it was [page 795] conducted under Pt 10 of the 2003 Act. The practical effect of these provisions is not so clear. Apart from the order by VCAT any ‘enforcement’ under Pt 10 of the 2003 Act will be by way of inter-partes agreement, which must, by the nature of the dispute, include both the landlord and the tenant. This means, in effect, that the 2005 Amendment Act provisions really only apply to the landlord’s agreement to comply with a request for the provision of relevant information etc under subs 37(4), an agreement which one might have thought could be forthcoming at any time. As it is an agreement, there is no basis for possibly limiting the provision and effectiveness of this consent or agreement to ‘proceedings’ under Pt 10 of the 2003 Act. In any event such an agreement can only be ‘enforced’ in any practical sense by an order by VCAT. It is helpful to set out the amended provisions of subs 37(7) as follows: (7) The specialist retail valuer — (a) must carry out the valuation within 45 days after accepting the appointment, or within such longer period as may be agreed between the landlord and tenant, or if there is no agreement, as determined in writing by the Small Business

Commissioner; and (b) may seek to enforce under Part 10 (Dispute Resolution) an obligation of the landlord under subsection (4). Additionally, a correction has been made to the reference in subs 38(1) of the 2003 Act, provisions which deal with the confidentiality of information supplied to a valuer, to correct the reference to s 36 to a reference to the process of ‘determining’ under s 37. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). Section 38 imposes strict duties of confidentiality on a specialist retail valuer who is supplied with information by a landlord or a tenant for the purpose of determining the current market rent for a retail premises lease, with the sanction of a penalty. Subsections 38(1) and (2) (as originally enacted) provide: (1) A specialist retail valuer who is supplied with information by a landlord or tenant for the purpose of determining under s 36 the current market rent for a retail premises lease must not — (a) use or permit the use of the information for any purpose other than to determine the current market rent for the lease concerned; or (b) communicate or divulge that information to any other person or permit that information to be communicated or divulged to any other person. Penalty: 50 penalty units. Subsection 38(2) provides some exceptions, as follows: (2) However, subsection (1) does not prevent the specialist retail valuer — (a) communicating or divulging the information to a court, the Tribunal or the Small Business Commissioner, or permitting another person to do so; or [page 796]

(b) using, communicating or divulging the information or permitting another person to do so — (i) in accordance with the consent of both the landlord and tenant; or (ii) in a way that does not disclose information identifying a particular lease or tenant, or relating to a tenant’s business, for the purpose of specifying the matters to which the valuer had regard in making the determination concerned. In addition to the penalties provided for a contravention of subs 38(1), subs 38(3) provides that a specialist retail valuer who contravenes s 38 is liable to pay to the landlord or the tenant concerned compensation for any loss or damage suffered by the landlord or the tenant as a result of the information being used, communicated or divulged. Subsection 38(4) provides that the amount of compensation is to be the amount that is agreed between the valuer and the person seeking compensation or, in the absence of agreement, as determined by VCAT under Pt 10 of the 2003 Act. Subsections 38(3) and (4) do not provide any guidance as to the basis upon which compensation is to be assessed. Arguably, the analogy is something in the nature of equitable compensation for breach of fiduciary duties rather than on some common law analogy. However, if the latter is thought to be more appropriate on the basis that the constraints of causation applicable to common law damages ought to be imposed, then tortious rather than contractual damages appear to be more analogous: and see the discussion of the compensation provisions for interference with the tenant’s premises under s 54 of the 2003 Act at Retail Leases Victoria [40,005]. In Stephens v Gerandu Pty Ltd [2004] VCAT 1350 (Deputy President Macnamara; 14 July 2004) an issue arose as to whether an expert valuation could be called into question as a result of the valuers adding a ‘surcharge’ representing the goods and services tax payable by the landlord: see Retail Leases Victoria [280,125]. The ownership of fixtures and fittings installed by the tenant may become relevant for valuation or other purposes. As to the position at general law and the effect of subs 28(2) of the Landlord and Tenant Act 1958 (now repealed)

and s 154A of the Property Law Act 1958, see [10.5]; and see also Vopak Terminals Australia Pty Ltd v Commissioner of State Revenue (2004) 12 VR 351; [2004] VSCA 10; BC200400373; and Brown Brothers Land Holdings No 1 Pty Ltd v Cmr of State Revenue [2006] VCAT 2192 (Senior Member Davis, 31 October 2006); and see AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 744 (Deputy President Macnamara, 27 April 2004); and the subsequent proceedings, AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 1336 (Deputy President Macnamara, 5 July 2004). See also Bretair Pty Ltd v Lenro Properties Pty Ltd [2004] VCAT 1141 (Senior Member R Davis, 16 June 2004); and see Kiwi Munchies Pty Ltd v Nikolitsis [2006] VCAT 929 (Deputy President Macnamara, 29 May 2006, unreported); and Retail Leases Victoria [140,015]. [page 797] Additionally, the Retail Leases (Amendment) Act 2005 amended subs 38(1) of the 2003 Act to correct the reference to s 36 to a reference to the process of ‘determining’ under s 37. The 2005 amending provisions referred to above commenced on 1 May 2003 (being the date of commencement of the 2003 Act). A failure to comply with the disclosure requirements of ss 17 (new lease) and 26 (renewal) of the Retail Leases Act 2003 will lead to an abrogation of the rent obligations under the lease until the disclosure requirements are complied with if the tenant gives a notice as to non-compliance under subs 17(2) or 26(3), respectively: see [23.40]. Rent obligations are also abrogated where a landlord’s obligations concerning fitout are not complied with in the circumstances specified in s 31 of the 2003 Act: see Retail Leases Victoria [50,075].

Turnover rent [23.41] Section 33 of the 2003 Act makes provision for rent based on turnover. The provisions of s 33 are substantially the same as the provisions of subss 13(1) to (4) (but with some redrafting and additions) of the 1998 Act.

Some of the provisions of subs 33(4) of the 2003 Act contain changes of substance and significant re-drafting. The provisions of subs (4) of these sections of both the 2003 Act and the 1998 Act are specific provisions which except from ‘turnover’ for the purposes of the provisions of a retail premises lease the matters listed in paras (a)–(l) of that subsection. Paragraph (c), which excepts the amount of uncollected credit accounts written off by the tenant, has a further proviso in the 2003 Act provisions, namely ‘(except to the extent that amounts written off a credit account previously written off by the tenant are recovered)’. Paragraph (f), which excepts the amount of any purchase, receipt or other similar tax imposed on the purchase price or the cost of hire of merchandise or services at the point of sale or hire, adds the words ‘(including GST)’ with respect to ‘other similar tax’. The provisions of para (k), which, under the 1998 Act, excepted receipts from sales of tickets in any consultation or soccer pool within the meaning of those terms in the Tattersall Consultations Act 1958, other than amounts derived as commissions or fees from those sales, now excepts money received for entry in any public lottery within the meaning of the Public Lotteries Act 2000, other than amounts derived as commission or fees on those entries. The former subs 13(5) of the 1998 Act has been omitted from the 2003 Act. It seems doubtful that subs 13(5) added anything to subs 13(4) of the 1998 Act, in any event. If anything, it served to raise some ambiguity in relation to the operation of subs (4). [page 798] The 2003 Act does not define turnover directly other than by exception in the provisions of subs 33(4) (which is the same position as under the 1986 Act and the 1998 Act). In Aris-Bainbridge v Turner Manufacturing Co Ltd [1951] 1 KB 563; [1950] 2 All ER 1178, McNair J said (at 564): ‘… turnover … must be taken to include all sums received and receivable in the year as the result of … trading, whether normal or abnormal’. As to turnover rent generally, see Redfern, ‘Rent Review and Rent Review Clauses’, Leases and Mortgages (Leo Cussen Institute, 1997, at 105–7). Also note the comment (at 106) in relation to possible difficulties caused by legislation such as para 22(3)(iii) of the Pharmacists Act 1974 which prohibits ‘profit sharing’ with respect to the

pharmacy practice for turnover rent provisions. Similar difficulties may occur under legislation regulating other professions. If the rent provided for is not a turnover rent properly so called, the relevant lease provisions may produce something in the nature of a rent review or ‘rental floor’ provision which offends subss 35(2) or (3) of the 2003 Act: see [23.41]. If subs 33(1) is complied with, subs 33(2) requires statements of turnover to be provided by the tenant if the lease provides for rent to be determined fully or partly by reference to the turnover of the business (and that provision has not been made void by subs 33(1) on the basis that it does not specify how the rent is to be determined). These statements must be provided monthly (within 14 days after the end of each month) and yearly (within 28 days of the end of each year), the latter together with a statement of the turnover and an audit report from an independent accountant stating that in his or her opinion the statement fairly represents the turnover of the business during that year or other period to which the statement relates. Subsection 33(3) provides that a tenant who gives the landlord statements for a period in accordance with subs (2) satisfies any obligation under the lease to provide turnover figures or statements for that period. The monthly or yearly periods provided for the giving of statements may be extended by the provisions of the lease: see subs 33(2). Section 34 of the 2003 Act contains provisions to meet the situation where a provision of a retail premises lease for determination of the rent, either fully or partly by reference to the turnover of the business, is avoided under s 33 and the lease makes no other provision for determining the rent. In this event the rent is to be as agreed in writing between the landlord and tenant (subs 34(1)) or under subs 34(2) in default of agreement. These provisions are substantially the same as subs 12(6) of the 1998 Act, including the ambiguity inherent in the former provisions which now arises from the para 34(1)(b) requirement for the application of these provisions, that the lease makes no other provision for determining the rent. In a situation where turnover rent provisions are utilised the usual position is that there is a base rent provided for and the turnover rent provisions either apply in addition to the base rent throughout the term of the lease, or only commence to operate once the turnover has reached a predetermined value, which is provided for under the lease. This means that if the

[page 799] provisions of subs 34(1) are read strictly, and a lease which makes provision for turnover rent has these usual provisions, then there is ‘another provision for determining the rent’ so the second pre-condition (in para 34(1)(b)) cannot be satisfied. Having regard to the provisions of s 34 and its apparent purpose of providing machinery to ‘rectify’ a failure in the turnover rent machinery in a retail premises lease, it would seem to lead to an absurdity not to construe the second precondition in para 34(1)(b) as being satisfied so long as the lease ‘makes no other provision for determining’ the turnover rent. The first limb of this ‘default’ rent review mechanism is a requirement that the parties seek to agree the new rent in writing between them. In default of such an agreement within 30 days of the landlord giving the tenant a written notice specifying an amount, the amount of the rent is to be determined by valuation carried out by a specialist retail valuer appointed either by agreement or, in default of agreement, by the Small Business Commissioner: see subs 34(2). This subsection concludes with the requirement that the landlord and the tenant are to pay the costs of the valuation in equal shares. Subsection 35(7) contains similar ‘default’ provisions which are resolved by valuation by a specialist retail valuer: see [23.41]. It should be noted that the ‘default’ mechanism only produces a new rent by agreement or determination of a specialist retail valuer — it does not produce new turnover rent machinery to replace the provisions avoided under s 33. It is not clear whether a specialist retail valuer would venture into a valuation which, directly or indirectly, established turnover rent machinery rather than simply a determination of the current market rent for the purposes of the retail premises lease. It follows that if a specialist retail valuer is not able to substitute valid turnover rent machinery for the provisions which have been avoided under s 33 and a narrow view is taken of para 34(1)(b), then avoided turnover rent provisions would not be replaced. These provisions should also be read in light of the common law position that the courts will assist in the operation of provisions for the determination of new rent where the mechanism for the determination is entirely provided for in the lease by implying a term that both parties would do all that was reasonably necessary to operate that mechanism: see Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; 43 ALR

68; BC8200112; and see [11.7] and [14.7]. The corollary of this is that where the lease does not provide an entire mechanism for rental determination, the courts will not supply the missing parts for the ‘machine’: see Booker Industries and [11.7] and [14.7]. Section 67 of the 2003 Act now makes provision for confidentiality of turnover information. The provisions of s 67 represent a substantial change from the provisions for confidentiality of turnover information which appear in s 14 of the 1998 Act (which are in the same terms as s 12 of the 1986 Act: see Retail Leases Victoria [200,055]). Section 67 of the 2003 Act is contained in Pt 8 of that Act, which only applies to retail premises located in retail shopping centres and applies in addition to the other [page 800] provisions of the Act: see s 65; and see the definition of ‘retail shopping centre’ in s 3 of the 2003 Act (as to which, see also [23.48]). As to the confidentiality or otherwise of a landlord’s rental or aggregate turnover figures for a retail shopping centre, or part thereof, see Choi v Trust Co of Australia Ltd (2001) V ConvR ¶58-549; [2000] VCAT 1867 (M F Macnamara, Deputy President). In that case the question was whether a landlord could be compelled to provide rental and aggregate turnover figures in respect of other leases for the purpose of determining the current market rent for one particular lease. Mr Macnamara rejected the argument that this information had an implied confidential character (at [19]): So far as I can see there is no obligation of confidentiality implied between landlord and tenant. There are circumstances in which the very nature of a relationship leads to an implication by law of an obligation of confidentiality. An example of that is a relationship of that between Banker and Customer. See the decision of the English Court of Appeal in Tournier v National Provincial & Union Bank of England [1924] 1 KB 461. But there is no such authority between landlord and tenant. Mr Macnamara clarified what he believed to be at issue (at [22]):

Accordingly, whilst I accept that the information that is here sought is information which other tenants may very well wish not to be made known and which the landlord does not wish to be made known I cannot accept that it is confidential information in any sense known to the law. What I think is a more significant question is whether the disclosure of this information is necessary for the proper performance of the contract and it will be recalled that I have accepted that there is an implied term in the lease that the parties will do all that is necessary for the performance of the contract constituted by the lease. It was concluded that provision of the information sought was not necessary for the proper performance of the lease.

Security deposits [23.42] Section 24 of the 2003 Act contains specific provisions with respect to security deposits which require that they be held by the landlord on behalf of the tenant in an interest bearing account (para 24(a)); and the landlord must account to the tenant for the interest but is entitled to keep the interest and deal with it as money paid by the tenant to the landlord to form part of the security deposit: see para 24(b); and see Retail Leases Victoria [50,080]. The 2005 Amendment Act has inserted a new para 24(1)(d) which adds the requirement for return of the security deposit when the tenant has performed all of its obligations under the lease as an ‘implied’ term of the lease, in the following terms: (d) if the tenant performs all of the tenant’s obligations under the lease the landlord must return the security deposit to the tenant as soon as practicable after the lease ends. [page 801] Similar provisions were contained in subs 24(2) of the 2003 Act but these provisions were not couched as an ‘implied’ term under subs 24(1) which would enable the tenant to sue upon it as though it were an express term of

the lease. As to these types of ‘implied’ terms, see Retail Leases Victoria [40,005]. Provisions of this kind contained within a ‘mere’ statutory requirement under subs 24(2) would not admit of such ready enforcement by a tenant at the conclusion of the lease. Subsection 24(2) has been repealed by the 2005 Amendment Act, presumably for these reasons. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act).

Outgoings and other payments Outgoings and operating expenses [23.43] The Retail Leases Act 2003 contains provisions which limit contributions in relation to the sharing of outgoings (s 39) and provisions in relation to liability to contribute to non-specific outgoings: s 40. The provisions of the 1998 Act limit contribution for non-specific expenses (s 20) and contain provisions in relation to the sharing of operating expenses: s 21. The relationship between the two sets of provisions in the 1998 Act is obscure (see Laundry Coin-Wash Leasing Nominees Pty Ltd v Karenlee Nominees Pty Ltd (2000) V ConvR ¶58-545 (per M F Macnamara, Deputy President)), comments which remain true of the 2003 Act provisions. Section 40 applies only to retail premises within a retail shopping centre (which is defined in s 3): see [23.47]. Unlike s 20 of the 1998 Act, the concept of ‘specific referrability’ which was used to delimit the extent of the tenant’s contribution under those provisions, is replaced, in s 40, with the concept of benefit as the delimiter (though the expression ‘directly attributable’ is incorporated within the operation of s 40 through the definition of ‘outgoings’ in s 3, and subs 20(3) of the 1998 Act appears to equate ‘referrable’, with respect to an expense with enjoyment or sharing the ‘benefit’ resulting from the expense). Section 40, like the 1998 Act provisions, contains two elements. The first is subs 40(1) which provides that a tenant is only liable to contribute towards an outgoing of the landlord that ‘benefits’ specific retail premises in the retail shopping centre in which the retail premises are located ‘if the retail premises are one of the premises that benefit from the outgoing’. Subsection 20(1) of the 1998 Act contains provisions which limited the

recoverability of ‘expenses’ to expenses that are ‘specifically referrable’ to a particular retail premises in the retail shopping centre (para 20(1)(d)); and where the retail premises are one of the premises to which the expenses are referrable: para 20(1)(e). In terms of the permitted application of the expenses by the landlord, s 20 of the 1998 Act is limited to the expenses of operating, including repairing and maintaining: (a) the building in which the retail premises are situated; (b) any building in the retail shopping centre; or (c) any common area, for the purpose of the provisions with respect to tenants’ liability on the basis of [page 802] ‘specific referrability’. In view of the definition of ‘shopping centre’ and ‘outgoings’, the former references to a building in which the retail premises are situated (para 20(1)(a)) and the building in the retail shopping centre (para 20(1)(b)) do not appear to be necessary. It is, however, noted that the type of expenses to which subs 20(1) of the 1998 Act was directed specifically included landlord’s expenses of operating, including repairing and maintaining, any common area, subject to the other tests being satisfied. The expression ‘common areas’ is defined by s 6 of the 2003 Act. It would seem that the ‘benefit’ test applied by subs 40(1) would result in the landlord’s expenses of operating, repairing and maintaining any common area being caught by the provisions of subs 40(1) without the necessity for any particular reference to ‘common area’ in the provisions, as appears in para 20(1)(c) of the 1998 Act. The concept of ‘benefit’ is at large under these provisions of the 2003 Act as the other provisions contain no definition nor do they give any particular guidance in this respect. The Oxford English Dictionary (2nd ed) contains the following definitions: Advantage, profit, good. (the ordinary sense) for the benefit of: for the advantage of, on behalf of. … a natural advantage or ‘gift’

… pecuniary advantage, profit, gain … 1592 nobody & ; Somebody (1878) 336 ‘the grand benefit you get by dice, Deceitful Cards and other cozening games. 1612 DAVIES discov. wirel (1787) 29 why the King received no benefit for his land of Ireland. 1712 Steele Spect. No 310 p 2 My Estate is 700 Pounds a Year besides the Benefit of Tin-Mines. 1885 Law Times Rep. L11 706/1. The secretary transferred the benefit of his contract as to three of the lots to other persons. The Macquarie Dictionary (3rd ed) defines benefit as follows: Benefit … n. 1. an act of kindness. 2. anything that is for the good of a person or thing. 3. a theatrical performance or other public entertainment to raise money for a worthy cause. 4. a payment or other assistance given by an insurance company, mutual benefit society, or public agency. — v.t. 5. to do good to; to be of service to. — v.i. 6. to gain advantage; make improvement. Webster’s Third New International Dictionary contains a variety of similar definitions, with the following the most helpful: Benefit … 2 a: something that guards, aids, or promotes wellbeing: ADVANTAGE GOOD, b: useful aid : HELP, MEANS, AGENCY — used esp. in the phrase without benefit of … [page 803] These definitions indicate that the word ‘benefit’ as used in the context of subs 40(1) is apparently intended to mean something real and tangible, and not something merely ephemeral. Whether the benefit needs to be substantial is not as clear. Section 40 does not contain provisions which seek to balance the level or reasonableness of the ‘non-specific outgoings’ that are recoverable

subject to the retail premises benefiting from the outgoing with the level or value of the ‘benefit’ itself. Inherent in the concept of ‘benefit’ is some reasonable correlation between the extent of the outgoing and the extent of the benefit, because as the former increases it is likely that the latter will diminish and eventually to the point where it could not be reasonably said that there is any benefit at all. This may be the reason for the absence of any provisions in s 40 or the regulations, which seek to establish some balance between the outgoing and the benefit so that the tenant’s payment of the outgoing can be said to be a ‘real’ or ‘true’ consideration for the benefit (see para (a) of the ‘key-money’ definition contained in s 3 of the 2003 Act (see [23.37])), though it would appear that subs 40(2) is intended for this purpose. Unfortunately, reg 10 of the Retail Leases Regulations 2013 does not address this issue, although it does limit the maximum contribution under subs 40(1), as follows: 10. Maximum outgoing For the purposes of s 40(2) of the Act, a tenant is not liable to contribute towards an outgoing of the landlord in excess of an amount calculated by multiplying the total amount of the outgoing by the relevant fraction. Regulation 5 defines ‘relevant fraction’ as follows: ‘relevant fraction’ means the fraction calculated using this formula — A/B where — A is the lettable area of the retail premises; and B is the total of lettable areas of all the retail premises which receives the benefit of the outgoing. For a detailed discussion of the operation of this and other related regulations, see Retail Leases Victoria [60,025]. It will be noted that the definition of ‘relevant fraction’ relies upon a ratio by reference to the ‘lettable area’ of the retail premises and the total of ‘lettable areas’ of all the retail premises which receives the ‘benefit’ of the outgoing. A similar ratio was utilised in the 1987 regulations, though that ratio used ‘leasable area’: see Retail Leases Victoria [210,010]. The ratio in the 1998

regulations used ‘floor area’ rather than ‘leasable area’. Subject to the changes made in the 1998 regulations on the provisions of the 1987 regulations, reference should be made to Retail Tenancies Award No 3 (1992) V ConvR ¶58-512 in relation to the operation of the 1986 and 1998 Act statutory provisions and the regulations: see also Retail Leases Victoria [150,020] and [150,030]. As to the meaning of ‘floor area’, see Retail Leases Victoria [120,070]. [page 804] No specific provision is included in the ‘relevant fraction’ definition to accommodate ‘common areas’ as was the case under para 21(5)(b) of the 1998 Act, which provided: (b) expenses incurred in respect of common areas are deemed to be incurred in respect of the total floor areas of all the retail premises in the retail shopping centre. The reason for the omission would appear to be the reliance, in the 2013 regulations and the Act itself in ss 39 and 40, on the concept of ‘benefit’ which is reflected in the denominator, ‘B’, of the ‘relevant fraction’ definition. The limiting operation of subs 40(2) and reg 10, in the context of s 40, imposes an upper limit on recoverability of outgoings but subject to the further requirement that ‘benefit’ must be established. This may, as indicated, impose some further limitation on recoverability as a result of the requirement of proportionality ‘between the level of outgoings’ and the (level of) benefit, as indicated. Regulation 10 might usefully be expanded to deal expressly with the ‘proportionality’ issue.

Sharing of outgoings and operating expenses [23.44] Section 39 of the 2003 Act limits the extent to which outgoings may be recovered from a tenant with respect to the provisions of the lease, but subject to the provisions of the Retail Leases Regulations 2003. For a discussion of the operation of the outgoings provisions, including s 39 of the

2003 Act, see Jones v Mega Bargains Pty Ltd (VCAT, Deputy President Macnamara, 19 February 2007, unreported). The provisions of s 39, like the provisions of s 40, are directed to ‘outgoings’ and contrast to the corresponding provisions of the 1998 Act, ss 21 and 20, respectively, which are directed to ‘expenses’: see Retail Leases Victoria [150,010] and [150,015], respectively. The word ‘outgoings’ is defined in s 3 of the 2003 Act. Subsection 39(1) is a hybrid of the mandatory requirements of para 21(1)(a) of the 1998 Act with respect to lease provisions and the ‘implied term’ provisions contained in the 2003 Act, which operate by means of a provision that ‘a retail premises lease is taken to provide’ (see [23.8] and, as more immediate examples, s 46 (estimate of outgoings); s 47 (statement of outgoings); and s 48 (adjustment of contributions to outgoings)). Although subs 39(1) does not impose mandatory lease terms or ‘implied terms’, which cannot be contracted out of (see [23.10]), its provisions do require lease terms which have the effect of satisfying the requirements of paras 39(1)(a) to (c), the sanction being that if these requirements are not satisfied then the tenant is not liable to pay outgoings at all (see Raleigh v Cooks Corner Kallista Pty Ltd (VCAT, Deputy President Macnamara, 21 February 2008) at [61], referring to this proposition with apparent approval) or to the extent of the ‘deficiency’ in the lease provisions in this respect. [page 805] The requirements flowing from paras 39(1)(a) to (c) are that the lease contains specific provisions which, first, describe the type of outgoings which the tenant is to pay; second, how the amount of these specified outgoings is to be determined and how they will be apportioned to the tenant; and, third, how the outgoings or any part of them are to be recovered from the tenant. The first requirement is self-explanatory but the second and third are not so clear. Whether provisions which satisfy the requirement of specifying ‘how the amount of those outgoings will be determined’ will comply depends upon the nature of the outgoings. Presumably references to rates and taxes are

sufficiently dealt with by a provision that indicates that they are as assessed from time to time by the authority or municipality levying them. In terms of apportionment, the provisions of reg 9 of the Retail Leases Regulations 2013 could be incorporated, by reference to the ‘relevant fraction’ (as defined in reg 5), or those provisions (including the ‘relevant fraction’ definition) could be repeated in full. The former is, of course, safer because it avoids errors in ‘transcription’ and enables the lease to incorporate the relevant regulations from time to time. The third requirement should, depending upon the circumstances, be read subject to the provisions of ss 46–48 as to the estimate of outgoings, outgoing statements and adjustments of contributions, respectively, depending upon the circumstances. The provisions of s 39 must, like the provisions of s 40, be read subject to and incorporating the definition of ‘outgoings’ in s 3 of the 2003 Act; and see Retail Leases Victoria [60,010], where that definition is set out; and see s 29. It will be seen that the definition of ‘outgoings’ includes expenses ‘directly attributable’ to the operation, maintenance or repair of the building in which the retail premises are located or any other building or area owned by the landlord and used in association with the building in which the retail premises are located or, in the case of a retail premises situated in a retail shopping centre, any building in the centre or any areas used in association with a building in the centre. These provisions both incorporate and expand the provisions of subs 21(1) of the 1998 Act which applied to expenses of the landlord in operating, repairing and maintaining the building in which the retail premises were situated and, if situated in a retail shopping centre, the common area. The expression ‘common area’ is now defined in s 6 of the 2003 Act. It would appear that a ‘common area’ as defined would be an area ‘used in association with a building’ in a retail shopping centre for the purposes of subpara (a)(ii) of the definition of ‘outgoings’: see Retail Leases Victoria [150,015]. Subsection 39(2) makes provision for regulations prescribing the manner in which the amount of outgoings may be determined and apportioned to a tenant. As discussed, reg 10 provides that for the purposes of subs 39(2) of the Act, the amount of an outgoing may be determined and apportioned to a tenant by multiplying the total amount of the outgoing by the ‘relevant

fraction’. The definition of ‘relevant fraction’ is set out in [23.44]. In spite of the use of the word ‘may’ in relation to the [page 806] determination and apportionment requirements of subs 39(2) and reg 10 with respect to the application of the ‘relevant fraction’, these requirements have been held to be mandatory: see Raleigh v Cooks Corner Kallista Pty Ltd at [54] to [60] (per Deputy President Macnamara). In view of the fact that subs 39(1) does not operate by way of mandatory provisions or ‘implied terms’, it would appear to follow that although the provisions of the Act and the regulations prescribe the limits, in a sense, for the provisions of leases in relation to the recovery of outgoings from a tenant, there is nothing in these provisions to suggest that the lease may not impose its own even more strict limits (see Laundry Coin-Wash Leasing Nominees Pty Ltd v Karenlee Nominees Pty Ltd (2000) V ConvR ¶58-545); a position which appears to be confirmed by the provisions of s 29 of the 2003 Act. In Re Small Business Commission Reference for Advisory Opinion [2015] VCAT 478 Garde J held that a landlord was precluded from recovering from a tenant the costs incurred by a landlord in complying with its obligations under s 52 of the 2003 Act and the costs incurred in complying with essential safety measure requirements under the Building Act 1993 and its regulations.

Estimates, statements and adjustment of contributions to outgoings [23.45] The provisions of s 46 (estimate of outgoings), s 47 (statement of outgoings) and s 48 (adjustment of contributions to outgoings) of the 2003 Act reflect in substance the provisions of paras 21(1)(b) and(c) and subs 21(2) to 21(7) of the 1998 Act: see Retail Leases Victoria [60,010]. For a discussion of the operation of the outgoings provisions, including ss 46, 47 and 48 of the 2003 Act, see Jones v Mega Bargains Pty Ltd (VCAT, Deputy President Macnamara, 19 February 2007, unreported). Section 46 of the 2003 Act makes provision for estimates of outgoings to be

given to the tenant. The provisions of subs 46(1) have the effect of ‘implying’ subss 46(2), (3) and (4) into the lease as terms: as to ‘implied terms’ in this sense, see [23.8]. Subsection 46(2) provides that the estimate of outgoings must be in writing and must itemise the outgoings. Again, the provisions of this section differ from the provisions of s 21 of the 1998 Act in that they operate with respect to ‘outgoings’ rather than ‘expenses’ as under the earlier legislation: see Retail Leases Victoria [60,015]. Subsection 46(3) requires that the tenant be given the estimate of outgoings (a) before the lease is entered into, but no minimum time before the entering into of the lease is specified. There may be an implication that the tenant is entitled to a reasonable time in which to consider the estimate: see, generally, as to reasonableness of time for the giving of notices in not entirely dissimilar circumstances, Khodr v Foo Qan Eng Holdings Pty Ltd (No 1) (2001) V ConvR ¶58-557; in relation to notices of the last day [page 807] for the exercise of an option to renew, see [23.31]. Additionally, the tenant must be given an estimate of outgoings in respect of each of the landlord’s accounting periods during the term of the lease, at least one month before the start of that period. This is a requirement under para 46(3)(b), which reflects the provisions of subpara 21(1)(b)(ii) of the 1998 Act. The provisions of para 21(1)(c) of the 1998 Act, which require the landlord to give the tenant annual statements of expenditure incurred on each of the relevant items of expense within three months after the annual period to which the expenditure refers, are not reflected in the provisions of s 46, though they are, in effect, contained in the provisions of subss 47(2) and (3), with reference to the landlord’s actual accounting periods. Subsection 46(4) contains a ‘self enforcing’ provision, particularly having regard to the fact that it is ‘implied’ as a lease term under subs 46(1), which provides that the tenant is not liable to contribute to any outgoings of which an estimate is required to be given to the tenant until the tenant is given that estimate (as to which see Wang v Yan (No 2) [2006] VCAT 236 (24 February

2006, Deputy President Macnamara) in relation to the now equivalent provisions of the Retail Tenancies Reform Act 1998: see Retail Leases Victoria [150,015]. These provisions, which differ from the approach of the provisions of s 21 of the 1998 Act, appear to go some way to actually abrogating the tenant’s obligation to contribute to any outgoings at all for the period prior to the provision of an estimate in accordance with s 46. The wording of these provisions ‘is not liable to contribute to any outgoings’ is very reminiscent of the wording of para 17(3)(b) of the landlord’s disclosure statement provisions of the 2003 Act, which provides that, in certain circumstances, the tenant is ‘not liable to pay the rent’ attributable to the period prior to the landlord giving the tenant a disclosure statement, provisions which, with respect to the critical wording, reflect the corresponding disclosure statement provisions of para 8(2)(b) of the 1998 Act, which have been held to entirely abrogate the rent obligation prior to compliance with the disclosure requirements: see [23.40]. On this approach the tenant’s liability to contribute to any outgoings is entirely abrogated prior to the date that the landlord complies with the s 46 requirements, and compliance would not revive any of those prior obligations. By analogy with the authorities on the disclosure provisions to which reference has been made, it would be as though the tenant’s covenants to pay outgoings in the lease are entirely removed until s 46 is complied with, and then they are only ‘restored’ in futuro. Contrary to this analysis, Member Edquist in Australian Asset Consultants Pty Ltd v Staples Super Pty Ltd [2016] VCAT 1726 held that once an estimate was given the tenant was liable to contribute to those outgoings. In that case the tenant had paid outgoings in the absence of a notice under s 46 and the landlord later served a notice. These provisions also raise the possibility that a tenant may be able to recover outgoings which have been paid in circumstances where s 46 has not been complied with and the tenant was unaware of its rights under subs 46(4) — in other words, in the situation where the tenant has paid outgoings to the landlord under a mistake of [page 808] law, namely that it was not obliged to do so because of the provisions of subs

46(4). The same issues arise in this respect as arise in similar circumstances under the disclosure provisions: see [23.40]. However, apart from claims concerning recover of land tax paid by a tenant by mistake, tenants have been unsuccessful in recovering outgoings paid by mistake: see Richmond Football Club v Verrarty Pty Ltd [2011] VCAT 2104 and Market Ring Write Services Pty Ltd v Dudson [2013] VCAT 546. Section 47 of the 2003 Act requires the provision of a statement of outgoings at various times and, like subs 46(1), adopts the device of ‘implying’ the provisions of s 47 in the retail premises lease as lease terms: as to which, see [23.8]. As indicated previously, the provisions of s 47 are a reflection of many of the provisions of s 21 of the 1998 Act. The s 47 provisions are, however, considerably more detailed in their requirements. Subsection 47(2) requires the landlord to prepare a written statement detailing actual expenditure in each relevant accounting period during the lease term on account of ‘outgoings’. Again, like s 46, the definition of ‘outgoings’ contained in s 3 of the Act is critical to these provisions. Subsection 47(3) imposes, in para (a), an additional requirement to that imposed under subs 21(3) of the 1998 Act, which is reflected in para (b). Under para 47(3)(a) the tenant must also have the statement made available to it during, rather than after the end of, the relevant accounting period. The usual requirement under the provisions of ss 46, 47 and 48 is that the landlord must ‘give’ statements etc to the tenant (as to which see the provisions of s 97 in relation to service of documents), so it is not entirely clear what the expression ‘make the statement available to the tenant’ means in para (a). It would seem that such an expression would include allowing the tenant to read the statement at the landlord’s (or landlord’s agent’s) office and have an opportunity to take notes. Having regard to the ameliorating or remedial nature of this legislation, particularly the sections in relation to outgoings, and the possibility that the tenant may wish to seek accounting or other advice in relation to the statement, it seems reasonable to regard it as being implicit in this expression that the tenant is entitled to be provided with a copy of the statement. Subsection 47(4) is a machinery provision in that it enables outgoings statements to be prepared for more than one tenant, as long as the details with respect to any particular tenant can be ascertained.

Subsections 47(5), (6) and (7) are important provisions which considerably expand on the audit requirements of subs 21(4) of the 1998 Act and, further, specifically impose the relevant principles and disclosure requirements of applicable accounting standards: see para 47(5)(a). Paragraph 47(5)(b) requires a statement which is accompanied by a registered company auditor’s report (which is relevant to the operation of subs 47(6), see below) to state whether the statement correctly states the landlord’s expenditure during the accounting period in respect of the total amount of outgoings, and each individual outgoing that comprises more than the prescribed percentage [page 809] of the total amount of outgoings to which the tenant is liable to contribute, and also whether the total amount of estimated outgoings for that period exceeded the total actual expenditure by the landlord in respect of those outgoings during that period. These provisions are relevant to the operation of s 48 in relation to adjustment of contributions to outgoings. The accounting standards and audit requirements of subs 47(5) are augmented from the tenant’s perspective by the provisions of subs 47(7), which requires that the tenant be given a reasonable opportunity to make a written submission to the auditor on the accuracy of the outgoings statement where an auditor is preparing a report on the matters to which reference has been made under para 47(5)(b). This implies that the tenant must have received the outgoings statement and have been invited to make a written submission on its accuracy to the auditor. As the provisions of s 47 are ‘implied terms’ in the retail premises lease, and subs 47(7) is in the nature of a ‘covenant’ for the benefit of the tenant, it would appear to follow that the landlord has an obligation to ensure that the expenditure statement is provided to the tenant in sufficient time to enable it to make a written submission to the auditor. Subsection 47(6) is an exception to the auditor’s report requirements (see para 47(5)(b) and subs (7)) in respect of straight forward and simple outgoings statements which deal with the usual utility charges, municipal rates and charges, insurance and GST (with provision to include within the exception other outgoings of a kind prescribed by the regulations) where the outgoings

statement is accompanied by copies of assessments, invoices, receipts or other proof of payment for all expenditure by the landlord included in the statement. Section 48 of the 2003 Act provides for the adjustment of contributions to outgoings by the tenant. As with ss 46 and 47, subs 48(1) ‘implies’ these provisions into the retail premises lease: see [23.8]. These provisions reflect the provisions of subs 21(7) of the 1998 Act, but are substantially expanded. The general position that there is to be an adjustment with respect to any underpayment or overpayment by the tenant, in respect of outgoings during a relevant period, is established by subs 48(2). Under subs 48(3) the adjustment is to take place by the earlier of one month after the landlord gives the tenant the relevant outgoings statement under s 47, or 4 months after the end of the relevant period. Subsection (4) provides for the calculation of the adjustment and to that extent is a machinery provision which gives effect to the general position as set out in subs 48(2). Subsection 48(4) does, however, contain an important substantive provision in so far as it provides that the landlord’s expenditure for the purposes of these provisions is limited to that which is ‘properly and reasonably incurred by the landlord in the payment of those outgoings’. The operation of these provisions will, naturally, depend upon the particular circumstances and, if necessary, any controversy between the parties in this respect will have to be resolved by VCAT under Pt 10 of the 2003 Act. [page 810] As to the extent to which reliance may be placed on the provisions of s 48 for the purpose of re-adjusting an overpayment of outgoings, see Raleigh v Cooks Corner Kallista Pty Ltd (VCAT, 21 February 2008), where (at [61]) Deputy President Macnamara said: What s 48 of the Act supposes will occur is that there should be an adjustment of outgoings following each 12 month period by comparison of the actual expenditures against a contribution made by tenants. Here, there is no evidence that any such adjustments have taken place so that no accounts have effectively been ‘settled’ for the

purposes of s 48. In those circumstances and with some hesitation I conclude that it is proper to re-adjust the outgoings as between landlord and tenant in reliance upon s 48 though it is fair to say that the section seems to be more directed to a contrast between projected expenditure and actual expenditure rather than to the issue of apportionment amongst the tenants. The operation of these provisions is modified and expanded in varying degrees under the provisions of ss 69–72 of Pt 8 of the 2003 Act, provisions which are additional requirements for retail shopping centres: see [23.57].

Non-recoverable amounts [23.46] In addition to the provisions of ss 39 and 40 and the related provisions of ss 46 and 48 of the 2003 Act, which have been discussed (see [23.46]), there are a number of specific provisions which have the effect of prohibiting the recovery of specific types of payments, whether or not they might or might not fall within the definition of ‘outgoings’ in s 3 of the Act. This result is achieved in these particular provisions by including a specific provision which renders ‘a provision in a retail premises lease’ void ‘to the extent’ that it requires the tenant to make or pay any sum in respect of the non-recoverable items. A claim to recover outgoings or other nonrecoverable amounts paid under a mistake as to liability to pay as a result of the operation of any of these provisions is likely to be met with the defence of good consideration, at least as to part: see Jones v Mega Bargains Pty Ltd at [53], referring to Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd (2006) V ConvR ¶54-713 (CA); and see [23.40]. However, in Richmond Football Club v Verrarty Pty Ltd [2011] VCAT 2104 Riegler SM rejected the landlord’s defence of good consideration to a claim to recover land tax paid by the tenant by mistake; s 50 of the 2003 Act renders void any provision in a lease that makes the tenant liable to pay land tax. Section 31 of the 2003 Act abrogates the tenant’s obligation, if any, to pay outgoings in respect of any period before the landlord has substantially complied with its obligations with respect to fitout: see para 31(2)(a); and see [23.40] with respect to the rent obligation in these circumstances. Section 41 of the 2003 Act renders void a provision in a retail premises

lease to the extent that it requires the tenant to pay an amount in respect of the capital costs of: (a) the building in which the retail premises are located; (b) any building in a [page 811] retail shopping centre in which the retail premises are located; (c) any areas used in association with the building referred to in paras (a) or (b) (which corresponds with the ‘outgoings’ definition in subparas (a)(i) and (ii) where reference is made to ‘areas used in association’ in this context) (see s 3 of the Act); or (d) plant in a building referred to in paras (a) or (b). For a discussion of the operation of the outgoings provisions, including s 41 of the 2003 Act, see Jones v Mega Bargains Pty Ltd (VCAT, Deputy President Macnamara, 19 February 2007, unreported). See also Retail Leases Victoria [60,050]. The 2005 Amendment Act has converted the provisions of s 41 as originally enacted into subs 41(1) and qualified those provisions with the words ‘subject to subs (2), a provision …’. The new subs 41(2) is in the following terms: (2) Subsection (1) does not operate to render void a provision in a retail premises lease requiring the tenant to undertake capital works at the tenant’s own cost. The provisions of s 41 as originally enacted (now subs 41(1)) rendered void a provision in a retail premises lease requiring the tenant to pay an amount ‘in respect of’ the capital costs of the items enumerated in paras (a)–(d). The phrase ‘in respect of’, or the like, is a phrase of the broadest scope and operation: see Exford Pines Pty Ltd v Vlado’s Pty Ltd [1992] 2 VR 449; (1992) V Conv R ¶54-453; and see Retail Leases Victoria [240,035]. New subs 41(2) is also a provision in very broad terms. The 2005 Amendment Act does not insert a definition of ‘capital works’ into the 2003 Act so this expression must bear its common and very broad general meaning. Further, it is to be noted that the word ‘works’ is, itself, a word with a very broad meaning. For example, in the present context it does not appear to be limited to structural work, renewal, repair or improvement, or any one or combination of these possibilities. Subsection 41(1) remains, after the 2005 amendments, a general

avoiding provision which is now matched by something in the nature of a provision which would seem to permit the complete avoidance of the operation of subs 41(1) provided the machinery used to achieve this is a ‘provision’ in the relevant retail premises lease. This is a significant departure from the position which was adopted in the Retail Tenancies Regulations 1987 (see reg 6(1)(a)) and the Retail Tenancies Regulations 1998 (see reg 7(1) (a)). Further, these amendments would appear to permit the substantial avoidance of the requirements under s 52 of the 2003 Act which provided for the landlord’s liability for repairs (see Retail Leases Victoria [70,005]); a provision which s 94 of the 2003 Act prevented the parties contracting out of: and see [23.46] in relation to the amendments to s 52 of the 2003 Act made by the 2005 Amendment Act. These provisions commenced on 1 May 2003. Section 42 of the 2003 Act renders void a provision in a retail premises lease to the extent that it requires the tenant to pay an amount in respect of depreciation. This provision restores the position with respect to payments or contributions in respect of depreciation, which were prohibited under reg 6(1) (b) of the 1987 regulations, though this prohibition was not reflected in the corresponding provisions of the 1998 [page 812] regulations: see Retail Leases Victoria [150,060] and [210,050]. Similarly, s 43 of the 2003 Act renders void a provision in a retail premises lease to the extent that it requires the tenant to make a contribution to a sinking fund to provide for capital works. A similar provision was included in the 1986 regulations, but the prohibition was omitted from the 1998 regulations: see Retail Leases Victoria [150,060] and [210,050]. Section 44 of the 2003 Act renders void a provision of a retail premises lease to the extent that it requires the tenant to pay an amount in respect of interest or other charges incurred by the landlord in respect of amounts borrowed by the landlord. A similar prohibition is contained in reg 7(1)(f) of the 1998 regulations and in reg 6(1)(g) of the 1986 Regulations. Section 45 of the 2003 Act is directed to rent payable under any head lease

or rent or other costs associated with any other land, and is in the following terms: 45. Rent etc associated with other land not recoverable A provision in a retail premises lease is void to the extent that it requires the tenant to pay an amount in respect of — (a) rent payable under any head lease under which the landlord holds the retail premises; or (b) rent or other costs associated with any other land including — (i) land on which the building or retail shopping centre of which the retail premises forms part is located; and (ii) land of the landlord used by, or for the benefit of, the tenants conducting business in that building or retail shopping centre or in connection with trading in that building or retail shopping centre. This is a new provision and is not reflected in the earlier legislation or regulations. Subsection 49(1) of the 2003 Act rendered void management fees unless they relate to the management of the building in which the retail premises are located or, if the retail premises are located in a retail shopping centre, that centre, and the retail premises are exclusive of salaries and other administrative costs related to the operation of that building or centre: see paras 49(1)(a)(i) and (ii) of the 2003 Act as originally enacted; and see Retail Leases Victoria [60,075]). The 2005 Amendment Act substitutes a new para 49(1)(a) which is in the same terms as original para 49(1)(a)(i) deleting the further proviso contained in sub-para 49(1)(a)(ii) so that no longer must the management fees be exclusive of salaries and other administrative costs relating to the operation of the building or shopping centre. These changes are also provided for, in terms of the operation of subss 49(2) and (3) in a new subs 49(6), as follows: (6) For the purposes of subsections (2) and (3) only, the amount for management fees does not include salaries and other administrative costs related to the operation of the building in which the retail premises are located in a retail shopping centre,

in that centre. [page 813] These provisions commenced on 23 November 2005 (being the day after the commencement of the 2005 Amendment Act, on 22 November 2005). It should be noted that, as is relevant to these provisions, the 2005 Amendment Act inserted, in s 3, a definition of ‘accounting period’ as follows: ‘Accounting period’, in relation to a retail premises lease, means the period of 12 months specified in the lease as the accounting period for the purposes of the lease. These provisions commenced on 1 May 2003. Section 50 of the 2003 Act provides that a provision of a retail premises lease is void to the extent that it makes the tenant liable to pay an amount for land tax: see Retail Leases Victoria [60,080]. The 2005 Amendment Act now, in terms of land tax liability, refers to both the ‘landlord or head landlord’. The effect of subs 121(1) of the 2003 Act is to exempt from the operation of the s 50 prohibition on recovery of land tax leases ‘entered into’ before the commencement of s 121, which was on 1 May 2003: see Retail Leases Victoria [60,080]. This is consistent with the application provisions of s 11 (and the associated provisions of s 7, including as amended by the 2005 Amendment Act) in relation to the time at which the lease is entered into or renewed: see Retail Leases Victoria [30,010] and [30,015]. The unresolved question, having regard to the fact that the provisions of s 50 commenced on 1 July 2003, subsequent to the commencement of the substantive provisions of the 2003 Act on 1 May 2003 (see subs 2(3); and Retail Leases Victoria [20,005]) was whether the prohibition operated with respect to the period 1 May to 1 July 2003. New subs 50(2), inserted by the 2005 Amendment Act, resolves the position as follows: (2) Subsection (1) does not apply, in the case of a lease entered into at any time on or after 1 May 2003 and before 1 July 2003, in respect of any period before 1 July 2003.

The intended effect of these provisions seems to be that if a retail premises lease is ‘entered into’ after 1 July 2003 the full s 50 prohibition on the recovery of land tax will apply for the whole lease term. On the other hand, if a retail premises lease is ‘entered into’ between 1 May 2003 and 30 June 2003, then recovery of land tax is permitted from the time the lease was entered into until 1 July 2003, but not with respect to the lease term continuing beyond 1 July. These provisions commence on 1 May 2003 (being the date of commencement of the 2003 Act). Amendments have also been made to s 121 of the 2003 Act, which provides for the notification of the amount of land tax: see Retail Leases Victoria [60,080]. The 2005 Amendment Act amends s 121 to substitute for the word ‘lease’ the expression ‘retail premises lease’ and also to add after the word ‘landlord’ the words ‘or head landlord’. Amendments to subs 121(3) now expressly exclude any requirement by the landlord to give notice to the tenant if an estimate of the amount of land tax which the tenant is liable to pay has been given to the tenant as required by s 46 of the 2003 Act (provisions in relation to the estimate of outgoings: see Retail Leases [page 814] Victoria [60,020]) and the corresponding provisions of the 1986 Act and 1998 Act. Otherwise the amendments made to s 121 would appear to have little effect on either the operation of those provisions or the related provisions of s 50. It should be noted that the amendment made to s 121 which substitutes the expression ‘retail premises lease’ appears to be consistent with the strict approach to the temporal limitations on the operation of the retail leases legislation adopted by the Court of Appeal in Antonino Giuseppina Ensbella & Sons Pty Ltd v Players on Downunder Pty Ltd (2000) V ConvR ¶54-626: and see Retail Leases Victoria [30,005] and [30,010]. In other words, the reference now to ‘retail premises lease’ is to be taken as a reference to a ‘retail premises lease’ within the meaning of s 4 of the 2003 Act and cannot mean a ‘mere’ lease which does not fall within this definition, though it may have fallen under the corresponding definition under the 1998 Act or the 1986 Act; but that is not relevant for the purposes of s 121 of the 2003 Act. These provisions

commence on 1 May 2003 (being the date of commencement of the 2003 Act). Section 51 of the 2003 Act prohibits a landlord under a retail premises lease claiming from any person (including the tenant) the landlord’s legal or other expenses as specified in those provisions. These provisions are discussed at [23.49]. Section 52 of the 2003 Act imposes on the landlord responsibility for maintaining the retail premises and its fixtures, plant and appliances in good repair to the extent specified in that section. These provisions are discussed at [23.50]. Sections 69–72 of the 2003 Act are directed to advertising and promotion, the reporting on advertising and promotion, and expenditure and adjustments with respect to unspent advertising and promotion contributions by tenants. These provisions are contained in Pt 8 of the 2003 Act and apply only to retail premises located in retail shopping centres (as to which, see the definition contained in s 3 of the Act, which is set out at [23.48]); and are provisions which apply in addition to the other provisions of the Act: see s 65. Under s 69 a provision in a retail premises lease is avoided to the extent that it requires the tenant to undertake any advertising or promotion of the tenant’s business, but this does not apply to a provision that requires a payment to the landlord for advertising or promotion costs incurred or to be incurred by the landlord. Under s 70, where a retail premises lease requires the tenant to pay an amount to the landlord for advertising and promotion costs, the lease is taken to contain the provisions set out in s 70. These require that at least one month before the start of each of the landlord’s accounting periods the landlord must make available to the tenant a marketing plan that gives details of the landlord’s proposed expenditure on advertising and promotion during that accounting period. Where the tenant’s payment relates to an opening promotion, the landlord must make available to the tenant details of the proposed expenditure on the promotion at least one month before that opening promotion. Section 71 requires the landlord to prepare a written statement detailing all expenditure in each accounting period of the landlord during the term of the lease on

[page 815] account of advertising or promotion costs to which the tenant is required to contribute: see subs 71(2). Subsections 71(3) and (4) impose requirements as to the provision of the statement to the tenant, with time limits, and for its preparation and auditing. Section 72 contains provisions for adjustments as between the landlord and the tenant at the expiration of the lease term to take account of any under payment or over payment by the tenant in respect of expenditure on advertising or promotion of the shopping centre: see subs 72(2). The adjustment is to be made in accordance with the regulations and within 4 months after the end of the lease: see subs 72(3). Regulation 13 of the 2003 regulations provides that, for the purposes of subs 72(3) of the Act, the adjustment is to be made on a pro rata basis, only taking into account expenditure during the term of the lease. The manner in which ss 70–72 operate is by means of the ‘implied term’ model: see [23.8]. Each of these provisions opens with the legislative statement that a retail premises lease is taken to provide, in some cases in effect, as set out in the relevant section. Regulation 6(1)(d) of the 1987 regulations and reg 7(1)(c) of the 1998 regulations prohibits: ‘insurance premiums in respect of insurance for loss of profits’: see Retail Leases Victoria [150,050] and [210,040]. No similar provision is included in the 2003 Act or the 2003 regulations.

Buildings and retail shopping centres [23.47] The provisions of ss 39 and 40 of the 2003 Act, together with the interrelated definition of ‘outgoings’ in s 3, raise questions as to the meaning of ‘building’, ‘area owned by the landlord and used in association with the building’, ‘areas used in association with a building in the [retail shopping] centre’ and ‘retail shopping centre’. The meaning of ‘common areas’ of a shopping centre as provided for in s 6 of the 2003 Act also needs to be considered. ‘Building’ is defined in s 3 of the Act to include any structure (the same definition as appears in the 1986 Act and the 1998 Act): see Retail Leases Victoria [150,025] and [210,015]. This definition may be of assistance in

determining whether any particular operating expenses (including repairing and maintaining the building) apply in relation to any particular work. The definition seems to establish that the relevant work would be work on any structure. However, the definition does not assist in determining the limits of a ‘building’ for the purposes of these provisions. For example, must the building be one discrete structure or built as one structure? Alternatively, may a series of buildings which were inter-connected after they were built be regarded as one structure, a ‘building’? Further, if the correct view is that a ‘building’ is one discrete structure which was built in this way, what is the position if there is more than one building built on one parcel of land — are all the expenses to be shared between tenants of retail premises in more than one building and is the liability to contribute to non-specific outgoings to be assessed with respect to more than one building? The reference to ‘building’ singular in para (a) of the [page 816] definition of ‘outgoings’ generally and in the particular situation of premises in a retail shopping centre (see subpara (a)(ii)) suggests the former (which appears to have been the position under the 1986 Act and the 1998 Act). Retail shopping centre is defined in s 3 of the 2003 Act as follows: ‘retail shopping centre’ means a cluster of premises that has all of these attributes — (a) at least 5 of the premises are retail premises; (b) the premises are all owned by the same person or have (or would have if leased) the same landlord or the same head landlord; (c) the premises are located — (i) in a single building; or (ii) in 2 or more buildings that are — (A) adjoining; or (B) separated only by common areas or other areas owned by the owner of the retail premises; or

(C) separated only by a road; (d) the cluster of premises is promoted as, or generally regarded as constituting, a shopping centre, shopping mall, shopping court or shopping arcade; The crucial expression in this definition is ‘a cluster of premises’. The word ‘cluster’, which does not appear to have been the subject of judicial attention, is defined by the Oxford English Dictionary (2nd ed) in the first definition of the word in its substantive sense as: 1 a collection of things of the same kind, as fruits or flowers, growing closely together; a bunch. a. originally of grapes (in which sense bunch is now the usual term). The Macquarie Dictionary defines ‘cluster’ in the first two senses, as follows: n. 1. a number of things of the same kind, growing or held together; a bunch: a cluster of grapes. 2. a group of things or persons near together: a cluster of bombs. Webster’s Third New International Dictionary defines ‘cluster’ in the first three senses, as follows: 1: a number of things of the same kind (as fruit or flowers) growing closely together: BUNCH 2 : a number of similar things grouped together in association or in physical proximity 3 : a number of similar things considered as a group because of their relation to each other or their simultaneity of occurrence or for convenience in treatment or discussion … The Webster’s definition more closely reflects the provisions of para (d) of the ‘retail shopping centre’ definition, which has regard to the manner in which a ‘cluster’ of [page 817]

premises that might otherwise satisfy the definition is actually treated. It is, under these provisions, necessary that the ‘cluster’ of retail premises be promoted as, and generally regarded as, constituting a shopping centre, ‘shopping mall’, ‘shopping court’ or ‘shopping arcade’. The three latter expressions are not defined in the 2003 Act and so it will be a question of fact whether the promotion and general regard of the ‘cluster’ brings it within the ‘retail shopping centre’ definition. In unusual circumstances, expert evidence may be required in this respect. The provisions of para (d) represent a marked change on the ‘retail shopping centre’ definition contained in the 1986 Act and the 1998 Act: see Retail Leases Victoria [150,025] and [210,015]. In general terms, on the basis of the dictionary definitions, it seemed that the 1986 Act and 1998 Act definitions require a contiguousness or closeness in proximity in the (at least five) retail premises. On the basis of this test, if a landlord owns five or more retail premises located in close proximity — even in a common retail strip or ribbon development — the definition may apply, even though the strip or ribbon of shops would not be regarded as a shopping centre in the commonly understood sense. A contrary view is that this definition could be read with s 15 of the 1986 Act (ss 20 and 21 of the 1998 Act) so that unless the landlord incurs expenses in operating the whole of the area in which the retail premises are situated, including any common area, the definition does not apply. This would leave retail premises which happen to be situated in close proximity and owned by the same landlord in a strip or ribbon development outside the scope of this definition under the 1986 Act and the 1998 Act. Nevertheless, this does not appear to be an approach justified by the actual provisions of the former legislation: see Retail Tenancies Award No 3 (1992) V ConvR ¶58-512 (J R Coghlan) and Laundry Coin-Wash Leasing Nominees Pty Ltd v Karenlee Nominees Pty Ltd (2000) V ConvR ¶58-545 (VCAT Deputy President Macnamara); the relevant parts of which are set out at Retail Leases Victoria [150,025] and [210,015], respectively. Another change in the 2003 Act definition of ‘retail shopping centre’ as compared to the definition in the earlier legislation is that the ‘cluster of premises’ must have all of the attributes specified in paras (a)–(d). This means that the requirements in para (d) as to promotion and general regard are of overriding importance, with the result that merely satisfying the more technical requirements of paras (a), (b) and (c) will not of themselves lead to the definition applying (compare the position in Retail Tenancies Award No 3 and Laundry Coin-Wash Leasing

Nominees v Karenlee Nominees). The technical requirements themselves have also been significantly changed. One of the difficulties of the definitions in the earlier legislation, which is highlighted in the decisions to which reference has been made, is that on satisfaction of the corresponding technical requirements of paras (a) and (b) of the 2003 Act definition there is the further requirement, cast as an exclusion: … but does not include a building with more than one storey except in relation to each storey of the building on which is situated a cluster of premises in respect of which paras (a) and (b) apply. [page 818] These provisions have been replaced by para (c) of the 2003 Act definition, which treats premises as potentially part of the ‘cluster’, whether they are in a single building, regardless of the storey or storeys on which they are situated, or in two or more buildings provided they are adjoining or, if separated, separated only by common areas or other areas owned by the owner of the retail premises or separated only by a road. The removal of the requirements of these exclusionary provisions in the 2003 Act will avoid the difficulties experienced where outgoings of various kinds fell to be apportioned between levels in a building, some of which were ‘retail shopping centres’ within the definition and some of which were not. These new provisions will also avoid the issues that arose with respect to premises which were part of a ‘cluster’ in a generally accepted sense but may be situated in separate buildings and separated by roadways or accessways. In relation to both general aspects of these issues, see the decisions to which reference has been made and also 34th Enterprise Pty Ltd v Leggetts Tennis & Squash Centre (1999) V ConvR ¶58-538; [1999] VCAT 15 (Davey J sitting as VCAT, 16 April 1999), and see Retail Leases Victoria [150,025] and [210,015], where the relevant parts of these decisions are set out. The provisions of para (c) of the 2003 Act definition of ‘retail shopping centre’ introduce the concept of ‘common area’ for the purposes of this definition (rather than in terms of the sharing of expenses etc provisions of the

earlier legislation). ‘Common area’ is defined in s 6 of the 2003 Act, with respect to a shopping centre, as follows: 6.

Meaning of ‘common areas’ of a shopping centre (1) In this Act, the ‘common areas’ of a retail shopping centre means the areas in or adjacent to the centre that are under the control of the landlord and are used or intended for use — (a) by the public; or (b) in common by the tenants of premises in the centre relating to the carrying on of businesses on those premises — other than any areas in respect of which there is a retail premises lease to which this Act applies. (2) The ‘common areas’ of a retail shopping centre include — (a) stairways, escalators and elevators; and (b) malls and walkways; and (c) parking areas; and (d) toilets and rest rooms; and (e) gardens and fountains; and (f) information, entertainment, community and leisure facilities.

It will be seen that the crucial part of these definition provisions is that there be ‘areas in or adjacent to the centre that are under the control of the landlord and are [page 819] used or intended for use’ as specified in paras (a) and (b). The qualification in relation to these ‘areas’, that they are ‘used or intended for use’, does not refer, as in the case of the ‘retail premises’ definition, to the position ‘under the terms of the lease relating to the premises or part’: see [23.18] and [23.19]. In

the context of the ‘common areas’ definition this is, perhaps, not surprising as the definition applies, in conjunction with the other provisions of the 2003 Act, to regulate the rights of a number of tenants of retail premises within the relevant centre, and so there is no particular reason to select any or all of the provisions of retail premises leases of premises within the centre as governing the actual or intended use aspects of this definition. It would seem, therefore, that this requirement is to be tested by reference to objective indications of the intent of the owner of the shopping centre, which may be provided to some extent by the provisions of the retail premises leases of premises within the centre in relation to these areas, whether described as common areas or not, and their use or intended use. It should be noted that the ‘common area’ definition does not simply refer to the public areas of a shopping centre, but also extends to areas used in common by the tenants of the shopping centre in relation to their carrying on business at the centre (compare Arndale (Kilkenny) Pty Ltd v Gaetjens (1970) 20 LGRA 37 as to the nature of and respective rights in relation to ‘public’ common areas and, in this respect, see also the South Australian Supreme Court decision appealed from Gaetjens v Arndale (Kilkenny) Pty Ltd [1969] SASR 470; (1969) 20 LGRA 21). The ‘common area’ definition in so far as it is contained in subs 6(1) is supplemented by the provisions of subs 6(2). These provisions are inclusive provisions and appear to be provided by the legislature more by way of helpful examples (which are, nevertheless, binding) rather than provisions intended in any way to limit subs 6(1). The provisions of the ‘retail shopping centre’ definition and the ‘common areas’ definition do not shed any light directly on the expression ‘used in association with’ in para (a) of the ‘outgoings’ definition, referred to above. It would appear that where, as in the case of s 40 (in relation to liability to contribute to non-specific outgoings), those provisions apply only to a tenant under a retail premises lease where the retail premises are located in a retail shopping centre, the provisions of both subparas (i) and (ii) of the para (a) of the ‘outgoings’ definition would be applicable. In these circumstances, it would seem that the reference to ‘areas used in association …’ as used in subpara (a)(ii) should be read subject to and consistently with the definition of ‘common areas’ in s 6 of the 2003 Act. On the other hand, where the outgoings provisions, such as s 39, operate generally and are not limited to

premises situated in a retail shopping centre, then it would appear that only subpara (i) of (a) of the ‘outgoings’ definition is applicable. It follows that on a strict interpretation there is no reason why the ‘common area’ provisions of s 6 should govern the expression ‘used in association’ in subpara (i). However, the ordinary principles of statutory interpretation would tend to favour giving similar expressions in two subparagraphs of one paragraph [page 820] of a definition the same meaning in so far as the context allows. Accordingly, there is a reasonably strong argument that the ‘common areas’ provisions of s 6 would also govern the subpara (i) provisions, though it is true that the ‘common areas’ definition in s 6 is expressly limited to those in a retail shopping centre. This appears to be the better view on the basis of the legislative purpose and legislative consistency.

Costs and indemnities [23.48] Section 51 of the 2003 Act contains provisions which regulate the extent of the tenant’s liability for costs associated with a retail premises lease. These provisions, in general terms, reflect the provisions of s 19 of the 1998 Act (which was a new provision in that legislation). Section 51 provides as follows: 51. Liability for costs associated with lease (1) A landlord under a retail premises lease is not able to claim from any person (including the tenant) the landlord’s legal or other expenses relating to — (a) the negotiation, preparation or execution of the lease; or (b) obtaining the consent of a mortgagee to the lease; or (c) the landlord’s compliance with this Act. (2) However, subsection (1) does not prevent a landlord from

claiming the reasonable legal or other expenses incurred by the landlord in connection with an assignment of the lease or a sub-lease, including investigating a proposed assignee or sub-tenant and obtaining any necessary consents to the assignment or sub-lease. The provisions of subs 51(1) prevent the landlord claiming from any person (including the tenant) the landlord’s legal or other expenses as specified in paras (a)–(c). The reference to ‘any person’ is apparently designed to avoid a common scheme adopted to avoid the operation of s 19 of the 1998 Act, which was to insert a provision in the retail premises lease or in some collateral agreement imposing an obligation on a third party to pay the landlord’s legal and other expenses, even though some or all of them would otherwise have been non-recoverable as a result of the operation of s 19. As the ‘third party’ had to be bound by the agreement the lease guarantor or guarantors were generally the ‘third party’ subject to this obligation. Subsection 19(1) was more limited that subs 51(1), extending only to the landlord’s legal or other expenses in relation to the preparation of the lease. Arguments ensued as to whether this prevented recovery of the cost of preparation of the disclosure statement under the 1998 Act: see Retail Leases Victoria [130,110]. Paragraphs (a) and (b) of subs 51(1) are reasonably self-explanatory. In the third edition of this text the authors expressed the view that para (c) was very far-reaching and would appear to extend to all legal or other expenses ‘relating to’ (again, a very broad provision (see Exford Pines Pty Ltd v Vlado’s Pty Ltd [1992] 2 VR 449; (1992) V ConvR ¶54-453) (see Retail Leases Victoria [240,035] and [240,085]) the [page 821] landlord’s compliance with this Act. However, Garde J in Re Small Business Commissioner Reference for Advisory Opinion [2015] VCAT 478 held that para 51(1)(c) was concerned only with expenses arising in the course of the provision of legal services, such as disbursements by a legal practitioner or expenses incidental or anciliary to the provision of the legal services referred to in subs 51(1). His Honour said that para 51(1)(c) was not concerned with

expenses incurred by a landlord in compliance with s 52 of the 2003 Act. Section 52 concerns the landlord’s liability to maintain premises in the condition specified in the section. It is not possible to contract out or agree inconsistent provisions, in a retail premises lease or any other collateral agreement, which would affect the operation of the provisions of s 51 and the other provisions to which reference has been made: see s 94 of the 2003 Act, discussed at [23.10]. The excepting provisions of subs 51(2) are much more limited, in terms of specific detail, than the provisions of subs 19(2) of the 1998 Act: see Retail Leases Victoria [130,110]. There is, however, a more general underlying limitation in these excepting provisions as they except the landlord’s reasonable legal or other expenses, limited to those incurred by the landlord in connection with an assignment of the lease or a sublease, including investigating a proposed assignee or subtenant and obtaining any necessary consents to the assignment or sublease. Costs of this nature were excepted under subs 19(2) of the 1998 Act (under para 19(2)(e), with reference to paras 11(2)(a) and (b) of that Act). The other exceptions provided for in subs 19(2) are not included within the subs 51(2) exclusions. In particular it excludes survey fees associated with the registration of the lease (subs 19(2)(a)); the reasonable expenses incurred by the landlord in obtaining the consent of the landlord’s mortgagee to the lease (para 19(2)(b), which is, in any event, excluded as these expenses are now not able to be recovered as they are mentioned expressly in the provisions of para 51(1)(b)); stamp duty on the lease (para 19(2)(c)); and fees payable to the Registrar General or the Registrar of Titles for the registration of the lease (para 19(2)(d)). The cost of fit-out works is regulated by s 130 of the 2003 Act, with a requirement that the maximum cost of the works, on the basis or formula with respect to these costs, be agreed before the works begin (subs 130(3)); with provision for determination by an independent quantity surveyor if the maximum cost cannot be agreed (see subss 130(4) and (5)). Section 93 of the 2003 Act renders void certain indemnity provisions (and requires an indemnity with respect to charges, rates or taxes recoverable from the tenant by a public statutory authority) in the following circumstances: 93. Indemnities

(1) A provision in a retail premises lease is void to the extent that it purports to indemnify, or require the tenant to indemnify, the landlord against any action, liability, penalty, claim or demand for or to which the landlord would otherwise be liable or subject. [page 822] (2) A provision in a retail premises lease is void to the extent that it purports to make the tenant liable for or subject to any action, liability, penalty, claim or demand in respect of any act, matter or thing done or omitted to be done by the landlord or any other person if the tenant would not otherwise be liable for or subject to that action, liability, penalty, claim or demand. (3) The landlord must indemnify the tenant for any amount recoverable from the tenant by a public statutory authority for charges, rates or taxes payable under any Act for the retail premises. (4) Subsection (3) does not apply to — (a) charges for the supply of water by measure in excess of the minimum amount payable for it relating to a period during which the tenant occupied the retail premises; or (b) charges, rates or taxes for which, under the terms of the retail premises lease, the tenant is liable. In Barton v Lantsbery [2004] VCAT 926 (Deputy President Macnamara; 17 May 2004) a claim was made for damages for breach of the covenant for quiet enjoyment as a result of spray and paint fumes emanating from neighbouring premises. Issues arose in the counterclaim with respect to the tenant’s claim for breach of the covenant for quiet enjoyment which raised issues as to the proper interpretation of the provisions of s 29 of the 1998 Act which, in general terms, seek to prohibit, by avoiding, various indemnity provisions in

leases (provisions now reflected in s 93 of the 2003 Act). The Deputy President said (at [63]–[65]): [63] The counterclaim places reliance upon an indemnity contained in Clause 3(j) of the lease. The indemnity is in the following terms: This lease is entered into upon the express condition that the lessor shall not in any way be liable for any damage or injury to the premises or to the lessee or to the lessee’s property or to the property of any employee, agent, invitee or licensee of the lessee by reason of any happening not attributable to a negligent act of the lessor. To the extent that it is not prohibited by law, the lessee indemnifies and agrees to keep the lessor indemnified in respect of all claims, actions, suits, demands, judgments or costs arising from such damage or injury. [64] The applicant’s pleaded response to the reliance on the indemnity is that it is avoided by Section 29 of the Retail Tenancies Reform Act 1998. Subsections (1) and (2) of that section provide: A provision in a retail premises is void to the extent that it purports to indemnify or require the tenant to indemnify the landlord against any action, liability, penalty, claim or demand for which or to which the landlord would otherwise be liable or subject. A provision in the retail premises lease is void to the extent that it purports to make the tenant liable for or subject to any action, liability, penalty, claim or demand in respect of any act, matter or thing done or omitted to be done by the landlord or any other person if the tenant would not otherwise be liable for or subject to that action, liability, penalty, claim or demand. [page 823] [65] In my view, the sub-clause in so far as it constitutes an indemnity

would be avoided by one or other of these two subsections. In so far as the sub-clause might be regarded as an exemption clause it would according to established principle be subject to the contra proferentem rule. I have already drawn the inference that these leases were drawn by agents acting for the landlords. The sole and fundamental obligation imposed upon the landlord by the terms of the written lease is to give the tenant quiet possession. It would be only with the clearest of language that a sub-clause such as this could be regarded as operating to diminish that fundamental obligation. Such clear language is not to be found in the sub-clause. Accordingly I put it to one side in both its indemnity and exemption clause aspects. Although the indemnity issues were not critical to the ultimate decision in this case, the comments as to the ambit of the s 29 provisions are important because the indemnity provisions avoided, or which may be avoided, were contained in standard form lease provisions, namely the form of the ‘commercial lease’ published by the Real Estate Institute of Victoria.

Repairs, refurbishment, relocation, demolition, alteration and refitting Repairs [23.49] Section 52 of the 2003 Act, as originally enacted, imposed responsibility on the landlord for maintaining the structure of the retail premises, its fixtures, plant, equipment, appliances and fittings in good repair; provisions which are ‘implied’ as provisions of a retail premises lease: see Retail Leases Victoria [70,005]; and in relation to ‘implied’ provisions under this Act, see Retail Leases Victoria [40,005]. These provisions were new to Victorian retail leases legislation (and to the general law which imposes very limited obligations on landlords). The 2005 Amendment Act contains amendments to s 52 which both expand or clarify the extent of a landlord’s liability for repairs under the provisions of s 52 and, at the same time, limit the extent of that obligation in terms of the standard of repairs required. Additionally these amendments

apparently erode any tenant’s protection under s 52 in that they allow for the possibility of recovery of the cost to the landlord in meeting its obligations under s 52 by way of outgoings recovery from the tenant under s 39, subject to the restrictions, to the extent that they now remain, on recovery of capital costs from tenants under the amended s 41: see [23.47]. Subsection 41(2), added by the 2005 Amendment Act, appears to open the possibility of requiring a tenant to undertake capital works itself, and at the tenant’s own cost, subject to the presence of an express term of the lease making provision in this respect. Non-capital outgoings are generally recoverable under the provisions of s 39 of the 2003 Act, which has not been amended by the 2005 Amendment Act. It should be noted that, if outgoings are to be recovered in accordance with s 39, specific provision must be [page 824] made in the lease with respect to outgoings and their recovery, as specified in s 39: see [23.45]; and see Retail Leases Victoria [60,015]. In relation to the standard and extent of repairs the 2005 Amendment Act amends subs 52(2) to limit the landlord’s responsibility to maintaining the premises in ‘a condition consistent with the condition of the premises when the retail premises lease was entered into’. These words replace the expression ‘good repair’ which was the standard prescribed in subs 52(2) of the 2003 Act as originally enacted. The difference in substance is that the landlord’s repair obligation under s 52 has been transformed from a ‘put in and keep in repair’ obligation to an obligation to ‘keep in repair’ as at the date the retail premises lease was entered into: and, as to the distinction between covenants of these types, see [10.18]. Consequently, these provisions will be triggered for the purpose of ‘defining’ the extent of the landlord’s obligations each time a lease is renewed without, it seems, the possibility of providing for the date the tenant first took occupancy as the ‘defining moment’ in relation to the condition of the premises: see [10.10]; compare Polgara Pty Ltd v Vision Wise Holdings Pty Ltd (1996) NSW Conv R ¶55-781. The ingredients of that obligation (paras 52(2)(a),(b) and (c)) have, however, arguably been expanded in their ambit by the substitution of the disjunctive ‘or’ for the conjunctive

‘and’ in each paragraph. Thus, for example, the substance of para (a) changes from an obligation with respect to ‘structure of, or fixtures’ to ‘structure of, and fixtures’, and a similar position follows in the subsequent paragraphs. Consistently with these changes an amendment was also made to subs 52(3) where the exceptions to the landlord’s former responsibility for maintaining ‘those things’ in ‘good repair’ is simply left as a responsibility for maintaining, with the deletion of ‘good repair’. Following these amendments, subss 52(2) and (3) now provide as follows: (2) The landlord is responsible for maintaining in a condition consistent with the condition of the premises when the retail premises lease was entered into — (a) the structure of, and fixtures in, the retail premises; and (b) plant and equipment at the retail premises; and (c) appliances, fittings and fixtures provided under the lease by the landlord relating to the gas, electricity, water, drainage or services. (3) However, the landlord is not responsible for maintaining those things if — (a) the need for the repair arises out of misuse by the tenant; or (b) the tenant is entitled or required to remove the things at the end of the lease. Further amendments were made to para 52(5)(b) which, with the remainder of subs 52(5) and subs (4), make provision for a tenant to carry out urgent repairs. The amendment to para 52(5)(b) is the addition of the words ‘and may not recover that cost or any part of it as an outgoing’ as an addition to the existing provisions which provide that ‘the landlord is liable to reimburse the tenant for the reasonable cost of the repairs’, in circumstances where the tenant has carried out the urgent repairs. [page 825] The costs incurred by a landlord in complying with s 52 cannot be

recovered from a tenant: see Re Small Business Commissioner Reference for Advisory Opinion [2015] VCAT 478. The above provisions commenced on 1 May 2003. Section 57 of the 2003 Act contains further provisions relating to repairs in circumstances where the retail premises or the building in which the premises are located is damaged: see Retail Leases Victoria [70,005]. The word ‘damaged’ is not defined in these provisions so the word would be expected to bear its ordinary meaning, together with some of the learning derived from the decisions on lease provisions which provide for abatement of rent as a result of the premises being damaged, often by fire, and becoming unusable’: see Halsbury’s Laws of Australia, Leases and Tenancies at para 245-3125. The rent abatement provisions are contained in paras 57(1)(a) and (b). As is commonly found in rent abatement or compensation provisions of this kind, provision is made for termination by the landlord where the landlord reasonably considers that the extent of the damage makes its repair impracticable or undesirable and so notifies the tenant in writing; with provisions which entitle the tenant to terminate in the event that the landlord fails to repair the damage within a reasonable time after the tenant asks the landlord in writing to do so: see paras 57(1)(c) and (d). The right of the landlord to recover damages from the tenant in respect of any damage subject of subs 57(1) is preserved by para (e) of that subsection. The provisions of subss 57(2) and (3) are self explanatory. Section 57 was considered in detail by Croft J in Casa Di Iorio Investments Pty Ltd v Guirguis [2017] VSC 266.

Notice of alterations and refurbishments [23.50] Section 53 of the 2003 Act ‘implies’ a term in a retail premises lease to the effect that the landlord must not start any alteration or refurbishment of any building or retail shopping centre in which the retail premises are located unless these provisions as to notice, except in the case of emergency, are complied with: see Retail Leases Victoria [70,010]. Section 53 requires a 60-day notice before the alteration or refurbishment work is started.

Relocation [23.51] Section 55 of the 2003 Act provides for relocation of the tenant’s

business: see Retail Leases Victoria [70,015]. These provisions apply where the relevant lease provides for the relocation of the tenant’s business or termination of the lease and offer of a new lease or alternative retail premises: see subs 55(1). Subsection 55(2) requires the landlord to provide the tenant with details of a proposed refurbishment, redevelopment or extension that are sufficient to indicate a genuine proposal which is to be carried out within a reasonably practical time after the relocation — that is, it cannot be carried out practicably without vacant possession of the retail premises. [page 826] If the landlord wishes to require the tenant’s business to be relocated or to terminate the lease and offer a new lease or alternative retail premises, the tenant must be given at least three months’ written notice of the details of the ‘reasonably comparable alternative’ retail premises: see subs 55(3). These relocation provisions were amended by the 2005 Amendment Act by changing the requirement of ‘alternative comparable retail premises to be made available to the tenant’ to a requirement that a ‘reasonably comparable alternative’ be made available. As a matter of ordinary language it might have been thought that the word ‘comparable’ as used within subs 55(3) would need to be read having regard to the nature of the provisions of s 55 and the fact that it is the word chosen to qualify the ‘alternative … retail premises’ and not a word suggesting something in the nature of identical premises, generally a practical impossibility in any event. It would seem that the addition of the word ‘reasonably’ adds little to the original language and that having regard to the apparent purpose of the provisions of s 55 the obligations of landlords under these provisions have not changed in substance. These provisions commence on 1 May 2003. Subsection 55(5) gives the tenant the right to give the landlord a written notice of termination within one month after being given a relocation notice. If this is done the lease will terminate three months after the relocation notice was given or otherwise as agreed between the parties. If a tenant does not give a notice of termination it is taken to have accepted the offer of a lease on the terms and conditions referred to in subs 55(4), or otherwise agreed between

the parties. Provision is made for payment of the tenant’s reasonable costs, under subs 55(7). Section 31 of the 2003 Act requires a landlord of retail premises in a retail shopping centre to consult any relevant merchants’ association in relation to a proposed redevelopment of the shopping centre: see Retail Leases Victoria [70,020].

Demolition [23.52] Section 56 of the 2003 Act contains special provisions for demolition which apply where a retail premises lease provides for its termination on the ground of proposed demolition: see Retail Leases Victoria [70,025]. Broadly speaking, these provisions require the landlord to give the tenant at least six months’ notice of the termination date of the lease for the purpose of demolishing the building within a reasonably practicable time after the lease is to be terminated. Provision is made for termination of the lease by the tenant of not less than seven days written notice (see subs 56(3)) together with compensation for termination under subss 56(4), (5) and (6). An error in the original drafting of s 56 whereby the provisions for tenant’s reasonable compensation were only triggered by termination of a lease by the landlord under subs 56(2), without reference to the possibility of a tenant terminating under the provisions of subs 56(3), has now been rectified by the 2005 Amendment Act in the form of amendment to subs 56(4). [page 827]

Refurbishment, alteration and refitting [23.53] Section 58 of the 2003 Act renders void a provision of a retail premises lease requiring the tenant to refurbish or refit the retail premises unless it gives details of the refurbishment or refitting as are necessary to indicate generally its nature, extent and timing; with ss 30–32 of the 2003 Act containing specific provisions in relation to alterations and refitting: see Retail Leases Victoria [70,030]. Section 59 of the 2003 Act avoids lease provisions which, in general terms, limit or have the effect of limiting the tenant’s right

to employ or engage persons it chooses, subject to exceptions: see subs 59(2); see Retail Leases Victoria [70,035].

Compensation for interference [23.54] Section 54 of the 2003 Act makes provision for the payment of compensation by the landlord to the tenant for breach of any of the various provisions of subs 54(2) which, under subs 54(1), a retail premises lease ‘is taken to provide’ (provisions which broadly reflect the provisions of s 17 of the 1986 Act and s 26 of the 1998 Act, but with significant changes to the former provisions which are designed, on the basis of past experience, to make them more effective from a tenant’s perspective: see Retail Leases Victoria [130,005] and [190,005]). In a broad sense it might said that s 54 implies various terms in retail premises leases, as set out in subs 54(2). Nevertheless, this is a generalisation because, to the extent that they may be regarded as implied terms, the effect they produce is different from that which generally flows from implied covenants, whether implied as a matter of general law, by statute or in particular instances to give business efficacy to the lease provisions: see [6.3], [8.1] and [8.4]–[8.9]). One of the usual attributes of an implied covenant is that, as with an express covenant, the covenantor may be sued by the covenantee for damages with respect to any breach. Further, a breach by a tenant covenantor may lead to determination of the lease by forfeiture or acceptance by the landlord covenantee of the tenant’s repudiation of the lease in more serious cases: see [16.26]–[16.35]. The subs 54(2) provisions are ‘covenants’ by the landlord. Even if they were implied covenants in the usual sense, their breach would be unlikely to lead to determination of the lease, save perhaps in extraordinary circumstances where repudiation could be established against the landlord. In any event the subs 54(2) covenants do not produce any general right to take proceedings for damages for their breach. Rather, they give the tenant the right to ‘compensation’ (which may or may not correspond with the damages that would have been recoverable with respect to conventional covenants) without any express requirements or prerequisites to this entitlement, which are separately provided for in subss

26(1) and (2) of the 1998 Act (and in the corresponding provisions of the 1986 Act: see Retail Leases Victoria [130,005] and [190,005], respectively). In Versus (Aust) Pty Ltd v ANH Nominees Pty Ltd [2017] VCAT 895, Senior Member Riegler held (at [79]) that subs 54(2) does not enable a [page 828] tenant to terminate a lease even where the landlord’s conduct amounts to gross failure to act or not act. In relation to subs 26(1) of the 1998 Act, the prerequisites are a failure to rectify any relevant matter within a reasonably practicable time after receiving written notice from the tenant requesting the landlord to do so. Subsection 26(2) of the 1998 Act provides for the tenant’s entitlement to compensation on the occurrence of the matters set out in paras 26(2)(a), (b) or (c) without the prerequisite of any written notice from the tenant (similarly, subs 17(2) of the 1986 Act). The provisions which appeared in subs 26(2) (and subs 17(2)) are not reflected in s 54 of the 2003 Act but are now contained in other provisions of that Act: see [23.50] and following; and see Retail Leases Victoria [70,005] and following. It has been held that lease provisions which do not permit abatement or set-off do not affect rights of compensation under subs 17(1) of the 1986 Act: see Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2008] VSC 40; BC200800822 (per Byrne J, 22 February 2008); and see Retail Leases Victoria [190,005] in relation to subs 17(1) of the 1986 Act and Retail Leases Victoria [130,005] in relation to the corresponding provisions of the 1998 Act. At common law an express covenant will displace a conventional implied covenant (see Miller v Emcer Product Ltd [1956] Ch 304) but this will not apply to ‘covenants’ implied by statutory provisions in the form of s 54. These provisions are in contrast to covenants implied by provisions such as those contained in the Property Law Act 1958 and the Transfer of Land Act 1958, provisions to which reference has been made: and see Retail Leases Victoria [40,005]. The provisions of s 54 of the 2003 Act are reinforced in this respect by the provisions of s 94 of the Act which prevent contracting out of its provisions in whatever form, whether under the terms of the lease or under some other ‘collateral’ agreement or arrangement: see [23.10]. Subject to these

provisions an express covenant may add to the statutory ‘covenants’ but could not detract from them in any way, either as to their substance or the extent of their operation. The terms created by s 54 are set out in subs 54(2), as follows: 54. Tenant to be compensated for interference … (2) The landlord is liable to pay to the tenant reasonable compensation for loss or damage (other than nominal damage) suffered by the tenant because the landlord or a person acting on the landlord’s behalf — (a) substantially inhibits the tenant’s access to the retail premises; or (b) unreasonably takes action that substantially inhibits or alters the flow of customers to the retail premises; or (c) unreasonably takes action that causes significant disruption to the tenant’s trading at the retail premises; or (d) fails to take reasonable steps to prevent or stop significant disruption within the landlord’s control to the tenant’s trading at the retail premises; or (e) fails to rectify as soon as practicable — [page 829] (i)

any breakdown of plant or equipment that is not under the tenant’s care or maintenance; or (ii) any defect in the retail premises or in the building or retail shopping centre in which the retail premises are located, other than a defect due to a condition that would have been reasonably apparent to the tenant when entering into or renewing the lease or when the tenant accepted assignment of the lease; or

(f)

neglects adequately to clean, maintain or repair the building or retail shopping centre in which the retail premises are located (but not the retail premises themselves).

These provisions should be read with subs 54(4) which provides as follows: (4) This section does not apply to action taken by a landlord — (a) as a reasonable response to an emergency; or (b) in compliance with any duty imposed by or under an Act or resulting from a requirement imposed by a body acting under the authority of an Act. The provisions in para 54(4)(b) would cover matters such as statutory fire protection orders or other statutory orders in relation to safety or the state of the premises. The amount of compensation is provided for in general terms in subs 54(5), as follows: (5) The amount of the compensation is the amount that is — (a) agreed between the landlord and the tenant; or (b) if there is no agreement, determined under Part 10 (Dispute Resolution). As subs 54(2) provides for the payment of ‘reasonable compensation for loss or damage (other than nominal damage) suffered’ for something in the general nature of a breach of an implied term, it would seem to follow, at least from a common law perspective, that the contract measure of damages would be appropriate. By way of contrast, and to highlight the importance of the substantive nature (and the words used in the remedial parts) of various provisions of the 2003 Act, it is noted that the measure of damages in tort appears to be more appropriate for a breach of the provisions of subs 38(1), which imposes an obligation of confidentiality on a specialist retail valuer who is supplied with information by a landlord or tenant for the purposes of determining current market rent (and see subs 38(3) which imposes liability to pay compensation for a breach of this obligation, and subs 38(4) as to the amount of compensation): see [23.41]; and see Retail Leases Victoria [50,015].

Nevertheless, the use of the word ‘compensation’ in subss 54(2), (3) and (5) in the context of its substantive provisions suggests that something more in the nature of equitable compensation or equitable damages to restore the tenant’s position was contemplated. In other words, parliament intended to provide tenants with a restitutionary remedy. This position is [page 830] now further supported by s 91 of the 2003 Act (which is contained in Pt 10 of that Act), which confers upon VCAT specific powers to make orders in Pt 10 proceedings requiring the payment of money by way of restitutional compensation or otherwise: para 91(1)(b). These powers are in addition to the powers conferred on the tribunal under the Victorian Civil and Administrative Tribunal Act 1998. Nevertheless, as has been noted, these are not true implied terms as their breach does not, as with convention express or implied covenants in a lease, give rise to an immediate right to damages — but rather a right to ‘reasonable compensation’. The provisions of subs 54(2) and the corresponding provisions of subs 17(1) of the 1986 Act and subs 26(1) of the 1998 Act invite the drawing of analogies with the general law with respect to the covenant for quiet enjoyment or the principle of non-derogation from grant. In Barton v Lantsbery [2004] VCAT 926 (Deputy President Macnamara, 17 May 2004) a claim was made for damages for breach of the covenant for quiet enjoyment as a result of spray and paint fumes emanating from neighbouring premises. In terms of the principles to be applied in this respect, Deputy President Macnamara said (at [56]): In the Aussie Traveller case McPherson JA proceeded on the basis that a damages claim for breach of the covenant of quiet enjoyment would succeed in circumstances such as this where the tenant’s occupation of the leased premises ‘was substantially interfered with’ [1998] 1 Qd R 1, 12. In my view the evidence establishes a substantial interference with the enjoyment of the tenancy at 48C albeit one not as severe as that alleged by Mr Barton.

In terms of a claim for damages for mental distress, Deputy President Macnamara said (at [58]): Here the applicant is a natural person who can suffer mental distress unlike the applicant in AK Freund Pty Ltd v Kameel Pty Ltd [2004] VCAT 744. Damages might also be claimed under the provisions of para 54(2)(b) of the 2003 Act on the basis that a landlord’s letting of premises to a competing business is to be regarded, in light of particular representations and undertakings by the landlord, as the unreasonable taking of action that substantially inhibits or alters the flow of customers to the retail premises in breach of these provisions (a claim left open, in circumstances where no or insufficient action is taken by the landlord itself, in the decision of the Full Court of Western Australia in Fernandes v Lam [1999] ANZ ConvR 445 and on the basis of the statements of the members of the High Court in the special leave application on 21 October 1999). A further issue that arose with respect to compensation under subs 26(1) of the 1998 Act (and subs 17(1) of the 1986 Act) was whether the landlord’s liability arose, in terms of the calculation of compensation, only on the expiry of a ‘reasonably practicable time’ after the tenant’s written notice (fixed by reference to the nature of the breach complained of in the notice having regard to all the particular circumstances) and only [page 831] for losses suffered after that time or for losses from the date of the original breach of the subs 26(1) (or subs 17(1)) provision by the landlord. Having regard to the nature of the default provisions themselves, and the general law on time periods and default (as to whether time is of the essence with respect to non-essential terms, see Louinder v Leis (1982) 149 CLR 509; 41 ALR 187; NSW ConvR ¶55-065; BC820075), it seems that a ‘reasonable time’ would need to elapse before an event or omission within the terms of subs 26(1) (or subs 17(1)) becomes a ‘default’ under one of those provisions. Further, given the general law position that landlord’s repair covenants are generally taken to

be covenants to repair only as and when notice of disrepair is given by the tenant (see [10.6] and [10.7]), it seems that the tenant’s rights to compensation would arise no earlier than the giving of notice under subs 26(1) (or subs 17(1)) and probably only as and from any subsequent ‘default’ as a result of inaction or tardy action in response by the landlord. As indicated previously, the requirement of notice under what might be termed the liability provisions of subs 26(1) of the 1998 Act (and subs 17(1) of the 1986 Act) clearly affected the landlord’s liability under those provisions, which would not be triggered unless a tenant’s notice was given. The position is different under s 54 of the 2003 Act, as provided in subs 54(3): (3) The tenant must give the landlord written notice of the loss or damage as soon as practicable after it is suffered but a failure to do this does not affect any right of the tenant to compensation. Although s 54 clearly separates the liability provisions of subs 54(2) from the provisions requiring tenant’s notice, in subs 54(3), it does not appear that it necessarily follows in the context of the s 54 provisions that the absence of notice by the tenant necessarily has no consequences in terms of the amount of compensation payable. The common law position is that in ordinary circumstances a landlord’s obligation under a landlord’s repair covenant does not arise unless and until he, she or it has notice of the defect — generally by notice from the tenant where the tenant’s exclusive occupation of the leased premises would otherwise deprive the landlord of knowledge of the defect: see Morgan v Liverpool Corporation [1927] 2 KB 131 at 149–50; and see [10.6]. The same considerations with respect to the ‘impossibility’ of the landlord discovering the defect other than on notice from the tenant may not apply to all retail premises where there is regular inspection of premises and facilities, such as in a shopping centre. Nevertheless, in circumstances where the landlord could not have discovered the defect and it was not caused by any act or omission by the landlord, it would seem most unfair if subss 54(2) and (3) were construed to provide a right to compensation which was not effected by lack of notice in these circumstances. On the other hand, such a strict interpretation may be thought to run counter to the purposes of the 2003 Act (see [23.7] and [23.8]), which would favour a broader interpretation in favour

of the tenant’s rights arising on the original default under subs 54(2). If the 2003 Act is [page 832] regarded as ameliorating legislation in favour of tenants, this would also support the less strict view: see Peppercorn Nominees Pty Ltd v Loizou (1997) V ConvR ¶54-560; and see [23.8]. Nevertheless, even on a less strict view, written notice by the tenant may be required in circumstances where the landlord could not reasonably have discovered the existence of any breach of the subs 54(2) requirements and the breach does not flow from any act or omission of the landlord if any substantial compensation, akin to a restitutionary payment or damages, is to be awarded to a tenant. The provisions of subs 54(5) refer to the determination of reasonable compensation in favour of the tenant in the absence of agreement. Agreement requires the giving by the tenant of notice of its claim and, perhaps, some bona fide attempt to reach agreement (see Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194; 10 BCL 199) if, in the ordinary course of litigation, adverse costs consequences are to be avoided in proceedings in VCAT under Pt 10 of the 2003 Act. However, the costs position in VCAT proceedings under Pt 10 is now regulated by s 92, which requires that each party bear its own costs in the VCAT proceedings unless the tribunal is satisfied that it is fair to impose a costs order because the party conducting the proceeding did so in a vexatious way that unnecessarily disadvantaged the other party to the proceeding, or the party refused to take part in or withdrew from mediation or another form of alternative dispute resolution under Pt 10: see [23.59] and [23.61] and following. These provisions should, at least, be kept in mind for the purposes of subs 54(5). Whether a breach of the provisions of subs 54(2) could entitle the tenant to determine the lease on the basis of repudiation by the landlord is not clear. If these provisions are to be treated as lease terms, and assuming their breach by the landlord is conduct sufficiently serious to constitute repudiation (as to the nature of such conduct, see [16.26]), then it is arguable that the lease may be determined by the tenant’s acceptance of the repudiation. However, even

assuming the subs 54(2) provisions are to be treated as lease terms, it cannot be said that the landlord is repudiating the bargain in the same sense as is the position with terms actually agreed between the parties. Having regard to this, and the fact that subs 54(2) and the other provisions of s 54 expressly provide for the remedy for breach of their ‘implied terms’ — reasonable compensation for any loss or damage suffered by the tenant — which does not include a right to determine the lease on any basis, the better view appears to be that no right to determine the lease by acceptance of repudiation can arise on the basis of these provisions. In Versus (Aust) Pty Ltd v ANH Nominees Pty Ltd [2017] VCAT 895 at [71]–[79], Senior Member Riegler agreed with this analysis. Finally, some comment might usefully be made in relation to the reference to ‘repair’ in subs 54(2)(f). ‘Repair’ is not a word susceptible of easy definition, at least with any particularity in general terms, as its meaning depends very much on all the circumstances, including the terms of the lease, particularly whether or not there is an exception of fair wear and tear, and the age, character and locality of the premises: [page 833] see, for example, Proudfoot v Hart (1890) 25 QBD 42; [1886–90] All ER Rep 782 (CA), which makes it clear that the obligation to repair is likely to be more onerous in Grosvenor Square than Spitalfields, and provides a discussion of matters relevant in particular circumstances to determine whether there has been a breach or not; see also other cases referred to at [10.8]. The guiding general principle of the cases is conveniently stated in Halsbury’s Laws of England (4th ed, vol 27, Landlord and Tenant, para 285), as follows: Under a covenant to repair, a tenant is liable to repair but not to renew. Repair in this sense means the restoration by renewal or replacement of subsidiary parts of the whole, whereas renewal, as distinguished from repair, means the reconstruction of the whole or of substantially the whole … Also with reference to para 54(2)(f) it should be noted that the word ‘building’ is defined in s 3 of the 2003 Act as including any structure, and

‘retail shopping centre’ is also defined: see [23.48]. As to works, repairs etc under ss 53 and 55 to 58, see [23.50]–[23.54]; and see Retail Leases Victoria [70,005] and following. As to restrictions in lease provisions on whom a tenant employs or engages, see s 59: see Retail Leases Victoria [70,035]. These provisions are not limited with respect to tenants’ works but apply to tenants’ employees etc generally. In any event, these provisions are not applicable where the tenant caused the damage: see MESATA Pty Ltd v Rastogi [2007] VCAT 1242 (Senior Member Davis, 18 July 2007 at [84] and, similarly, at [93] with respect to consequential loss to the tenant’s business); a case which involved water damage from a tap being left on in the premises as a result of the tenant’s ‘misuse’; and see Retail Leases Victoria [70,005].

Unconscionable conduct of landlord or tenant [23.55] Sections 77 and 78 of the 2003 Act provide for unconscionable conduct of a landlord and unconscionable conduct of a tenant, respectively: see Retail Leases Victoria [80,020]. The structure of both sections is the same in that they are prefaced with the provision that a landlord (s 77) or the tenant (s 78) ‘under a retail premises lease’ must not, in connection with the lease, engage in conduct that is, in all the circumstances, unconscionable: see subss 77(1) and 78(1) which are followed by the provisions in subss 77(2) and 78(2) which provide particular instances of relevant unconscionable conduct. These ‘particularise’ provisions reflect the corresponding provisions of the Australian Consumer Law: see Retail Leases Victoria [220,060] and [220,065]. The difficulty with the opening words of subss 77(1) and 78(1) is the potential restriction on the operation of these provisions to unconscionable conduct that has some connection with the lease and, of course, the fundamental limitation or requirement that there be a lease in existence, a limitation which harks back to the jurisdictional limitations encountered under the provisions of Pt 3 of the 1986 Act [page 834]

where this expression is also used: see Retail Leases Victoria [20,035]. This kind of more fundamental limitation has now been rectified by amendments made to subss 77(1) and 78(1) by the 2005 Amendment Act, inserting after the expression ‘retail premises lease’ the words ‘or a proposed retail premises lease’. These amendments remove the requirement that a retail premises lease must be in existence but they do not address possible limitations with respect to the conduct of the relevant party which might be said to indicate that the unconscionable conduct must have a close connection or association with the relevant retail premises lease or, now, the proposed retail premises lease. A more embracing expansion of these provisions might have been to draw the boundaries round the relevant unconscionable conduct in terms of conduct ‘in connection with a retail premises lease, whether before or after the retail premises lease was entered into …’. The possible difficulty with the present provisions is that the reference to a ‘proposed retail premises lease’ may be said to pre-suppose some existing form of lease or agreement for lease where the terms have been settled, or substantially settled, but not presently finally agreed. It seems difficult to contemplate that provision such as ss 77 and 78, which potentially carry serious consequences for the parties, could be intended to operate in circumstances where no form of proposed lease has been agreed and there was some mere general intention that retail premises would be leased on some unspecified basis, particularly if no retail premises lease is subsequently executed. It might be said that many of the provisions in subss 77(2) and 78(2) which provide particular instances of relevant unconscionable conduct will not or are unlikely to arise if no retail premises lease is ever executed, but this is not true in all instances and the general prohibition on unconscionable conduct, contained in subss 77(1) and 78(1), is not so limited and necessarily dependent upon actual execution of a retail premises lease. Paragraph 77(2)(d)(ii) has been amended to take account of the possibility that, as a result of the 2005 amendments, the minimum term requirements of s 21 will not necessarily require a five-year term, having regard to previous continuous occupancy by the tenant: see [23.36]. These amending provisions commenced on 1 May 2003. Section 79 of the 2003 Act contains three specific exceptions to the unconscionability provisions of both ss 78 and 79, in the following terms:

79. Certain conduct is not unconscionable A person is not to be taken for the purposes of s 77 or 78 to engage in unconscionable conduct in connection with a retail premises lease merely because — (a) the person institutes proceedings in relation to the lease or refers a dispute, application or claim relating to the lease to arbitration, conciliation, mediation or some other form of alternative dispute resolution; or [page 835] (b) the person fails to renew the lease or enter into a new lease; or (c) the person does not agree to having an independent valuation of current market rent carried out. Section 80 of the 2003 Act contains its own remedial provision, in the following terms: 80. Recovery of amount for loss or damage (1) A landlord or tenant, or former landlord or tenant, who suffers loss or damage because of unconscionable conduct of another person that contravenes s 77 or 78 may recover the amount of the loss or damage by lodging a claim with the Tribunal against the other person. (2) The claim must be lodged within 6 years after the alleged unconscionable conduct occurred. (3) If the matter of the loss or damage arises in connection with proceedings in the Tribunal, the Tribunal may proceed to decide the matter and award a sum that it considers appropriate. It should be noted that the limitation period of six years provided for under subs 80(2) is calculated from the date the alleged unconscionable conduct

occurred, rather than the date upon which any loss or damage occurred. This limitation period reflects the six-year limitation period provided for in subs 159(3) of the Fair Trading Act 1999. As to entitlement to damages under the generally equivalent provisions of s 236 of the Australian Consumer Law, see Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26; [2004] HCA 3; BC200400148 (5 February 2004).

Additional requirements for shopping centres [23.56] Part 8 of the 2003 Act contains a variety of provisions which only apply to retail premises located in retail shopping centres; and apply in addition to the other provisions of the 2003 Act: see s 65. A number of these provisions relate to other aspects of the Act’s operation and are dealt with in detail in connection with the other provisions to which they relate. These provisions are s 67 (confidentiality of turnover information) (see [23.42]; and see Retail Leases Victoria [50,075]) and ss 69–72 (advertising and promotion requirements, marketing plan for advertising and promotion, statement and report on advertising and promotion expenditure, and provision for adjustment of advertising and promotion expenditure), which are discussed at [23.47]; and see Retail Leases Victoria [60,015]. This leaves s 66 (changes to core trading hours), s 68 (availability of statistical information about the retail shopping centre), s 73 (termination by landlord for inadequate sales prohibited), s 72 (geographical restrictions on tenant prohibited), and s 75 (tenants’ associations etc). [page 836] Section 66 operates where a retail premises lease provides that the tenant’s business must be open for trading during the core trading hours of the retail shopping centre. In these circumstances, the lease is ‘taken to provide’ (in other words, an ‘implied term’) that the landlord cannot change those hours

unless the majority of the tenants in the retail shopping centre who hold a retail premises lease agree in writing to the landlord so doing. Section 68 again adopts the ‘implied term’ model. The term implied is that the landlord must, at the request of the tenant, make the statistical information about the operation or performance of the retail shopping centre in which the premises are located available to the tenant if the retail premises lease requires the tenant to pay an amount in respect of outgoings on account of expenditure incurred by the landlord in obtaining statistical information of this kind: compare Choi v Trust Co of Australia Ltd (2001) V ConvR ¶58-549; [2000] VCAT 1867; and see Retail Leases Victoria [50,075]. Section 73 renders a provision of a retail premises lease void to the extent that it permits or otherwise provides for the termination of the lease by the landlord on the ground that the tenant or the tenant’s business has failed to achieve a specified sales or turnover performance. Section 74 renders void a provision in a retail premises lease to the extent that it has the effect of preventing or restricting the tenant from carrying on business outside the retail shopping centre in which the premises are located, either during the lease term or after its expiry, provided that the lease (or other agreement) may contain a provision that prevents the use of the name of the retail shopping centre in connection with the business carried on outside the shopping centre. Section 75 renders a provision of a retail premises lease void to the extent that it has the effect of preventing or restricting the tenant from forming, joining or taking part in any activities of a tenant’s association, chamber of commerce or similar body: subs 75(1). Subsection 75(2) is a mandatory provision which prevents a landlord from treating, or proposing to treat, a tenant who forms or joins or proposes to form or join such an association, chamber of commerce or similar body, less favourably than a tenant in similar circumstances who does not do or propose to do any of those things.

Miscellaneous provisions [23.57] Section 97 of the Retail Leases Act 2003 makes provision for the service of documents under the Act. It will be noted that s 97 specifically

refers to a document being ‘served on’ (the more usual expression) or ‘given to’ (the expression used extensively throughout the Act, as is its variant ‘give’). [page 837] The effect of these provisions is not entirely clear as they do not state, expressly, that compliance with the requirements and matters specified in paras (a)–(d) will of itself be ‘sufficient’ service or giving for the purposes of the Act without the need for (except in the case of para (a)) proof of actual receipt of the document by the intended recipient: compare the provisions of s 198 of the Property Law Act 1958 which provides, in subss (2), (3) and (4) that compliance with various specific modes of service ‘shall be sufficient’ or ‘shall be sufficiently served’, with no requirement of proof of actual receipt (and see [18.10]; and see, for example, Kudeweh v T & J Kelleher Builders Pty Ltd [1990] VR 701 at 708–10 (per Ormiston J). There is a strong argument that it is implicit in s 97 that compliance with any of its provisions is ‘sufficient’ without proof of actual receipt (save for para (a)) because, otherwise, there seems little purpose in the section, but the contrast in language with the Property Law Act provisions is significant. This position appears to be confirmed by the experience with s 23 of the 1986 Act and s 46 of the 1998 Act, which are provisions in similar terms. Section 23 of the 1986 Act has been held to be a facultative provision which does not prevent effective notification by other means, such as service on solicitors known to be acting for the tenant: see The Cutting Edge Victoria Pty Ltd v Industry Superannuation Property Trust Pty Ltd (2001) V ConvR ¶58-550; [2000] VCAT 2011 (M F Macnamara, Deputy President) at [27] and [28] (in relation to a notice under subs 14(6) of the 1986 Act); and see Xanthos v Raineri (VCAT, Deputy President Macnamara, 13 May 2005, unreported) at [32]–[46] in relation to the validity of a notice of exercise of an option to renew which was given between solicitors; but care should be exercised in departing from s 23, and the circumstances of this decision examined carefully; and see Khodr v Foo Qan Eng Holdings Pty Ltd (No 1) (2001) V ConvR ¶58-557 at [17], and see [21] and [22]. Service by registered mail will not generally be sufficient service, in the absence of proof of actual receipt, unless the lease provides otherwise: see

Rogowski v Bedelis Investments (2001) V ConvR ¶58-562 and also Happy Century Pty Ltd v Nezville Pty Ltd (2000) V ConvR ¶58-546; though these decisions were concerned, in this context, with payment of rent by ordinary or registered post. As to service of a notice by way of exercising an option to renew a lease, see Wang v Yan (No 1) [2006] VCAT 235 (24 February 2006, Deputy President Macnamara): see Retail Leases Victoria [130,035]. Reference was also made in the Wang case to the requirements for a valid exercise of an option to renew a lease by notice of exercise given to an agent of the landlord, relying on the decision of the New South Wales Court of Appeal in Young v Lamb (2001) 10 BPR 18,553; [2001] NSWCA 225; BC200103794: and see Retail Leases Victoria [40,070]. In Sanctuary Lakes Real Estate Pty Ltd v Sanctuary Lakes Centre Pty Ltd [2007] VCAT 2292 (Deputy President Aird, 4 December 2007) an issue was whether the tenant had responded to a landlord’s rent review trigger notice within the time limited for the tenant’s counter notice. The rent review provisions in this respect were drafted [page 838] in the usual way so that a failure by the tenant to give a counter notice within the time stipulated resulted in the reviewed rent being fixed in accordance with the amount specified in the landlord’s trigger notice. The evidence was that the landlord gave the tenant notice of a market rent review by letter dated 19 January 2007; but the tenant claimed that it did not receive the notice until 26 February 2007 and that it immediately objected by letter dated 27 February 2007. The landlord did not accept that the letter was not received until 26 February 2007 and, consequently, denied that the tenant was entitled to object to the rent review. Deputy President Aird turned to the notice and service provisions of the lease: The meaning of ‘receipt’ The respondent seeks to rely on clause 25 and in particular clauses 25.1 and 25.2 of the leases in relation to the time for service of notices viz:

Notices Any notice required to be served under this Lease must be in writing and must be served by post, facsimile transmission or hand delivered to: the Tenant at its address set out in this Lease, the Tenant’s registered office address, the Premises, or the last known address of the Tenant; …

Time for Service A notice or other communication is deemed served: … if posted, 2 business days after posted; …

However, the difficulty with attempting to rely on clause 25.2 is that it relates to the time of service not receipt and clause 5.2 specifically relates to the 14 day objection period commencing on the date of receipt. Whilst a notice or document may be deemed to have been served under clause 25.2.2 it is not deemed received. These words are not interchangeable. Had it been intended that the 14 day objection period commence on the day of service, particularly given the provisions of clause 25.2.2, this would have been obvious from an ordinary reading of clause 5.2. It is not. In my view these words should be given their plain meaning as used in everyday parlance — service of documents anticipates the giving or sending of such document to another person, receipt anticipates that which is given or sent being actually received by the person to whom it has been delivered. It was found that the notice was received on 27 February 2007 and accordingly the tenant’s notice of objection was within time. The case indicates the importance of careful consideration of provisions with respect to the service of notices, particularly whether they are directed to the giving of a particular type of notice or its receipt, or both, and the extent to which compliance with any procedure specified in the notice provisions results in a ‘deemed’ giving or a ‘deemed’ receipt of any notice to which the provisions apply — and the extent to which the need for proof of events other than compliance with the notice provisions is required.

[page 839]

Functions of Small Business Commissioner [23.58] Section 84 of the 2003 Act confers a range of functions on the Small Business Commissioner, in the context of the dispute resolution provisions of Pt 10 of the 2003 Act, in addition to those conferred by the Small Business Commissioner Act 2003, particularly s 5. These functions are as follows: 84. Functions of Small Business Commissioner (1) The Small Business Commissioner has the following functions under this Act — (a) to make arrangements to facilitate the resolution by mediation, or by another appropriate form of alternative dispute resolution, of retail tenancy disputes (whether or not a dispute has been formally referred under this Act to the Commissioner); (b) to take proceedings for an offence against this Act; (c) to report to the Minister on the operation of this Act; (d) to authorise, if the Commissioner considers it appropriate to do so, a body to represent that the form of a standard lease that the body is to make available to the public (whether or not for a fee) is endorsed by the Commissioner; (e) to confirm whether a certificate has been given in accordance with s 21(5); (f) to prepare and publish an information booklet or guidelines about retail leases that may be purchased on demand by members of the public; ….. (h) such other functions as may be conferred or imposed on the Commissioner by or under this Act.

(2) In arranging for the resolution of retail tenancy disputes, the Commissioner is to have regard to the need for the mediation or other form of alternative dispute resolution to be conducted by persons who are experienced in the field of retail premises leases. (3) The Commissioner may himself or herself conduct a mediation or other form of alternative dispute resolution and is entitled to be paid his or her fees and expenses for doing so, which must not be more than the maximum amount (if any) prescribed by the regulations. (4) The Commissioner may charge a fee for giving an authorisation under subsection (1)(d), which must not be more than the maximum fee (if any) prescribed by the regulations. (5) The Commissioner is not subject to the Minister’s control or direction in exercising functions under subsection (1)(a) or (b). Division 3 of Pt 10 of the 2003 Act makes provision in ss 85, 86, 87 and 88 for mediation and other alternative dispute resolution as a compulsory preliminary step [page 840] in dispute resolution under that Act, except in relation to proceedings in VCAT for an order in the nature of an injunction: see subs 87(2). The scope of mediation and other types of alternative dispute resolution are defined or provided for in very broad terms in s 85 of the 2003 Act, as follows: 85. What mediation and other alternative dispute resolution covers Mediation and other forms of alternative dispute resolution under this Part are not limited to formal mediation procedures but

extend to preliminary assistance in dispute resolution, such as the giving of advice designed to ensure that — (a) the parties are fully aware of their rights and obligations; and (b) there is full and open communication between the parties concerning the matter. This is consistent with the very broad understanding of mediation and alternative dispute resolution, both as a matter of general law and under various rules of court: see, for example, Halsey v Milton Keynes General NHS Trust [2004] 4 All ER 920; Reed Executive plc v Reed Business Information Ltd [2004] 4 All ER 942; and ET Petroleum Holdings Pty Ltd v Clarenden Pty Ltd (No 2) [2005] NSWSC 562; BC200504614 (per White J); see Retail Leases Victoria [240,200] and see [23.62]. Subsection 86(1) of the 2003 Act provides that any or all of the parties to a retail premises lease may refer a retail tenancy dispute to the Small Business Commissioner for mediation. Subsections 86(2), (2a) and (3) provide for the mechanics of referral, joinder of any person to the mediation by the Small Business Commissioner, as he or she considers it appropriate, and arrangement, by the Small Business Commissioner, of a mediation by a mediator or another appropriate form of alternative dispute resolution by a suitably qualified person. Of particular importance in the present context are the provisions of subss 86(4), (5) and (6) which provide, at least to some extent, for the mediation ‘procedure’ and also for the immunity of the mediator or person conducting some other form of alternative dispute resolution. These s 86 provisions are as follows: (4) A party to a mediation or another form of alternative dispute resolution may be represented by a legal practitioner but the mediator or person conducting the other form of alternative dispute resolution may, if he or she considers it appropriate to do so, meet with the party (alone or together with any other party) without their legal representative being present. (5) The costs of, and associated with, mediation by a mediator, or another form of alternative dispute resolution by a suitably qualified person (including the fees and expenses of the mediator or person conducting the other form of

alternative dispute resolution) are to be determined by the mediator or that other person and paid by the parties in the proportions that they agree among themselves or, if they cannot agree, in equal shares. (6) A mediator or person conducting another form of alternative dispute resolution is not civilly or criminally liable in respect of the performance, in good faith, of the functions of a mediator or such a person under this Act. [page 841] A related provision to these provisions is s 88 which, like s 92 of the VCAT Act (see Retail Leases Victoria [240,200]), is an essential part of the basis of the confidentiality of the mediation (or other form of alternative dispute resolution) proceedings. Section 88 provides: 88. Statements made during alternative dispute resolution not admissible A statement or admission made in the course of a mediation or another form of alternative dispute resolution under this Part is not admissible in proceedings under Division 4 or in any other legal proceedings. These provisions may be contrasted with the very extensive mandatory provisions of s 38 of the 2003 Act which impose confidentiality requirements on specialist retail valuers with respect to information provided to them; with penalty and compensation provisions: see [23.41]; and see Retail Leases Victoria [50,015]. As indicated previously, except in the case of proceedings for an order in the nature of an injunction, an essential, mandatory, preliminary step required before any retail tenancy dispute can be the subject of VCAT proceedings is a reference for mediation or other alternative dispute resolution to the Small Business Commissioner. This is the result of the provisions of s 87 of the 2003 Act: 87. Retail tenancy disputes must first be referred for alternative dispute

resolution (1) A retail tenancy dispute may only be the subject of proceedings before the Tribunal (whether under this Act the Fair Trading Act 1999 or any other Act) if the Small Business Commission has certified in writing that mediation or another appropriate form of alternative dispute resolution under this Part has failed, or is unlikely, to resolve it. (2) This section does not apply to proceedings for an order in the nature of an injunction. (3) This section does not affect the validity of any decision made by the Tribunal. Thus s 87 confers upon the Small Business Commissioner a ‘gatekeeper’ role in relation to proceedings before VCAT (whether under the Retail Leases Act 2003, the Australian Consumer Law or any other Act). The subs 87(1) requirement that before any VCAT proceedings are commenced the Small Business Commissioner must have certifed in writing that mediation or another appropriate form of alternative dispute resolution under Pt 10 of the 2003 Act has failed, or is unlikely to resolve the dispute is, however, not amplified by any provisions which indicate the extent of any inquiries the Small Business Commissioner may, or should, make for this purpose. A closely related provision to subs 87(1) is s 92 of the 2003 Act. This is because subs 92(2)(b), in effect, provides for the consequences of the certificate given by the Small Business Commissioner under subs 87(1), depending upon the nature of the certificate which is given. A ‘negative’ certificate may have costs consequences, according to the provisions of s 92: see Retail Leases Victoria [240,140] and [240,200]. [page 842] The extent to which the Small Business Commissioner may lift the veil of mediation confidentiality for the purpose of providing a certificate under subs 87(1) of the 2003 Act that the mediation or another form of alternative dispute resolution ‘has failed, or is unlikely to resolve’ the dispute, would

appear to be very limited. This appears to follow from the confidentiality provisions of s 88 of the 2003 Act, which apply to mediations or other alternative dispute resolution procedures for which the Small Business Commissioner is responsible under ss 85–88 of the 2003 Act, and the general law position as to confidentiality in relation to mediations, as discussed in [23.62]; and see Retail Leases Victoria [240,190] (mediation confidentiality and the question whether a settlement agreement was actually entered into) and [240,200] (in relation to mediation confidentiality and costs consequences for refusal to participate or general non-cooperation). Generally, as to dispute resolution under the 2003 Act, see [23.63]–[23.66]; and Retail Leases Victoria [230,035] and [240,125] and following. The Small Business Commissioner has announced that guidelines will be released from time to time in relation to the operation of various provisions of the 2003 Act as the need arises: see Retail Leases Victoria [290,140]. Guidelines, entitled ‘What are “Retail Premises”?’ have been issued and are available from the Small Business Commissioner website (www.sbc.vic.gov.au).

Ministerial Determinations [23.59] As indicated previously, seven Ministerial Determinations have now been made under s 5 of the 2003 Act: see [23.22] in relation to the provisions of s 5. The most significant Determination (see Victoria Government Gazette No S75, 30 April 2003) has general application and excludes premises above the first three storeys of a building, but only with respect to retail services, in the following terms: RETAIL LEASES ACT 2003 PREMISES NOT CONSTITUTING RETAIL PREMISES This determination is made under s 5(1)(c) of the Retail Leases Act 2003. This determination does not apply to: premises that under the terms of the lease relating to the premises or part are used, or are to be used, wholly or predominately for the sale or hire or goods by retail; or

retail premises located in a retail shopping centre. Acting under s 5(l)(c) of the Retail Leases Act 2003, I determine that the following kind of premises are premises to which s 4(2)(f) applies: Premises that are located entirely within a building which, under the terms of the lease relating to the premises, or part of the premises, are used, or are to be used, wholly or [page 843] predominately for the retail provision of services, other than premises located entirely on any one or more of the first three storeys in a building, excluding any basement levels. This determination comes into effect on 1 May 2003. Dated: 29 April 2003 MARSHA THOMSON MP Minister for Information and Communication Technology Minister for Small Business It will be noted that the determination excludes ‘commercial’ premises which are used (or are to be used) under the terms of the relevant lease wholly or predominately for the retail provision of services. The determination does not, however, apply to retail premises located in a ‘retail shopping centre’ or premises located on floors one to three (excluding any basement levels) of a building. Any perceived ambiguity in relation to the reference to ‘any basement levels’ in the determination is cured by reading its provisions as meaning that the exclusion applies to any storey above the first three storeys of a building (that is, fourth floor and above) calculated from what would reasonably be regarded as the ground level, and including basement levels. Reading the provisions of the determination as a whole it appears to be a reasonable inference that the reference to basement levels is intended to mean ‘also excluding any basement levels’. Particular reference should also be made to the Ministerial Determination

made on 20 August 2004 (Victoria Government Gazette No S184 (23 August 2004)) concerning leases of 15 years or longer containing tenant’s obligations to carry out substantial work; The August 2004 Ministerial Determination (which came into effect on 24 August 2004) deals with leases for an initial term of 15 years or longer. In all instances the references to lease terms exclude any options for renewal. It will be noted that this Determination applies to leases where the term granted is 15 years or longer or where the term is less than 15 years where that lease is a renewal of a lease of 15 years or longer made after the date of the Determination to which its provisions applied or a lease of 15 years or longer entered into before the date of the Determination to which its provisions would have applied had the lease been made after the Determination date. The same approach is adopted with respect to variations of leases which, as a matter of common law, result in a surrender and re-grant of the initial term. These are the primary application provisions (which are contained in paras A(a)–(c)) of the Determination. A lease must also satisfy the more substantive requirements of paras A(d)–(f), provisions which generally reflect the provisions of subss 52(2) and (3) of the 2003 Act, which would otherwise impose repair obligations on the landlord in the circumstances specified. It is helpful to [page 844] note the provisions of subss 52(1)–(3) (unamended) as follows; and see Retail Leases Victoria [70,005]: 52. Landlord’s liability for repairs (1) A retail premises lease is taken to provide as set out in this section. (2) The landlord is responsible for maintaining in good repair — (a) the structure of, or fixtures in, the retail premises; and (b) plant or equipment at the retail premises; and (c) the appliances, fittings or fixtures provided under the

lease by the landlord relating to the gas, electricity, water, drainage or other services. (3) However, the landlord is not responsible for maintaining those things in good repair if — (a) the need for the repair arises out of misuse by the tenant; or (b) the tenant is entitled or required to remove the thing at the end of the lease. As indicated previously (see [23.50]), s 52 has been amended by the 2005 Amendment Act in a number of respects. The amendments of more particular interest with respect to this Determination are the changes made in subs 52(2) in substituting the conjunctive for the disjunctive in paras (2)(a)–(c) and removing the ‘keep-in repair’ provisions in subs 52(3); and also in subs 52(4): see [23.50]. These amendments would not, however, appear to have any impact on the operation of this Determination. In any event, once again, it should be noted that the 2005 Amendment Act expressly validated existing Ministerial Determinations in terms of a new s 97a in the 2003 Act (inserted by s 38 of the 2005 Amendment Act, which is deemed to have commenced on 1 May 2003): see [23.22]. In summary, the effect of the August 2004 Determination is to exempt from the operation of the 2003 Act (s 52 and otherwise) leases of 15 years or longer (or renewals or re-grants as a result of lease variations; as to which, see [23.11]) which contain any provisions that impose an obligation on the tenant or any other person to carry out any substantial work on the premises which involves the building, installation, repair or maintenance of any of the items specified in subs 52(2) (whether or not the appliances, fittings or fixtures referred to in para 52(2)(c) were provided under the lease by the landlord); which impose an obligation on the tenant or any other person to pay any substantial amount in respect of the cost of carrying out this work; or which significantly disentitles the tenant or any other person to remove any of these items at any time after the end of the lease. Paragraph B of the Determination makes it clear that the exempting provisions of para A do not apply to any subleases of the premises or any part of the premises which is the subject of a lease to which para A applies by

reason only of the application of the determination to the head lease. This means that, for example, a 15 year plus [page 845] lease to which para A applies of a shopping centre development may not be subject to the provisions of the 2003 Act but the subleases of the retail shops and other retail premises within the shopping centre (subject to the possible application of the commercial premises determination in the case of multistorey developments) will be subject to the provisions of that Act. Provision is made in para C for the Small Business Commissioner to provide a certificate which is to be prima facie evidence that a lease is a lease which satisfies the provisions of para A of the determination. It should be noted that the obtaining of a certificate from the Small Business Commissioner is not a precondition or prerequisite to the application of the Determination and that a certificate is not binding on any court or VCAT as to the application of the Determination in any particular case. Also, the giving of a certificate by the Small Business Commissioner is, having regard to the language of the Determination, entirely at the Commissioner’s discretion. The Small Business Commissioner has provided a ‘Request for Certificate under paragraph C of the Ministerial Determination … (the ‘15 year’ exemption)’ which is available on the Office of the Victorian Small Business Commissioner website (www.sbc.vic.gov.au). In Luchio Nominees Pty Ltd v Epping Fresh Food Market Pty Ltd [2016] VCAT 937 Member Edquist considered the August 2004 Determination in detail. As noted previously, the new provisions contained in subs 5(1a) of the 2003 Act (as amended in 2005) would allow for the possibility of an amendment to the Determination to provide for a ‘conclusive’ certification by a minister: see [23.22]. All the Ministerial Determinations are available in Retail Leases Victoria [330,005] and following; and also on the Office of the Victorian Small Business Commissioner website (www.sbc.vic.gov.au).

Dispute resolution system — alternative dispute resolution Small Business Commissioner [23.60] A new regime for alternative dispute resolution (ADR) has been provided for in ss 85–88 of the 2003 Act: see [23.59]; and see Retail Leases Victoria [230,005].

Confidentiality issues in ADR processes [23.61] Mediation is a very common means of alternative dispute resolution but it does, in spite of its apparently flexible and unrestricted nature, carry with it some inherent difficulties: see Retail Leases Victoria [240,190]. For example, if the parties are advised in any way by the mediator in relation to their dispute, whether in relation to the terms of settlement or otherwise, issues may arise in relation to mediator [page 846] liability: see Tapoohi v Lewenberg (No 2) [2003] VSC 410; and see J H Wade, ‘Liability of Mediators for Pressure, Drafting and Advice: Tapoohi v Lewenberg’ (2004) 16 Bond Dispute Resolution News 12. Additionally, questions have arisen as to the extent that the cloak of mediation confidentiality can be disturbed for the purpose of determining whether a settlement was in fact agreed. Thus, in Intercon Group Pty Ltd v Nakajima [2005] VCAT 918 (Domestic Building List, 20 May 2005) Deputy President C Aird had to consider the position in the context of allegations of an oral agreement. The Deputy President said: 10. Before exercising its powers under section 93(1) the Tribunal must first satisfy itself as to whether settlement has been achieved, and in doing so may have regard to the Terms of Settlement whether they be oral or in writing. As clearly enunciated by Deputy President McKenzie in Hart v Huna [1999] VCAT 626:

11.

12.

13.

14.

To determine whether I can exercise the power to make orders under section 93. I must determine this dispute. In other words the dispute about whether or not there has been an agreement to settle. This is not the same as deciding some general question or making some general inquiry about the validity of an agreement or the enforceability of an agreement. and I have been careful in this decision not to deal with anything said or done in the course of the mediation, but I have taken the view that in order to determine whether the Tribunal can exercise its powers under section 93 it must be able to look at any terms of settlement whether oral or written that are put before it, so they can determine whether there has been an agreement to settle. In my view, it is therefore entirely appropriate for the Tribunal to have regard to any oral agreement which of itself, in my view, necessitates a consideration of the circumstances surrounding the making and acceptance of any offer. In Latif Al-Hakim v Monash University [1999] VSC 511 Justice Beach approved the following comments by Deputy President McKenzie where at page 11 of the decision at first instance she said: However, in my view, as I said, the fact that a settlement has been reached and what the terms of that settlement were is admissible and evidence of those matters is admissible. His Honour’s comments at paragraph 16 are of particular relevance here: … It would seem to me to be an extraordinary situation if in practice parties who have reached agreement to settle a proceeding at mediation cannot then seek to enforce their agreement, particularly when section 93(1) of the Act specifically provides that if the parties do agree to settle a proceeding at any time, the tribunal may make any orders necessary to give effect to the settlement. Mr Andrew did not address me specifically in relation to whether I should strike all or any part of the Affidavit from the Tribunal

file. I have carefully considered the Affidavit and whilst on the face of it parts of it may seem to stray into the arena of disclosing what happened at the mediation, I find it is necessary and appropriate background to the alleged agreement to which I may properly have regard. I am therefore satisfied that I should not order that Mr Noble’s affidavit be struck from [page 847] the tribunal file at this time. However, in the event the Respondents’ application is unsuccessful it may be appropriate for the Applicant to once again request that the Affidavit be struck from the file. See also Firmway Pty Ltd v Bretain Pty Ltd [2007] VCAT 576 (which is discussed below). The major issue affecting the mediation confidentiality under the 2003 Act arises as a result of the relationship between the mandatory provisions with respect to alternative dispute resolution (see subs 87(1)) and the costs regime in VCAT under this Act: see s 92, particularly para 92(2)(b). Within this general issue, questions arise as to how far the Small Business Commissioner can investigate or enquire into the mediation proceeding for the purpose of certifying that the matter is unlikely to resolve by mediation and thereby, possibly, lift the cloak of confidentiality. Similarly questions arise as to the extent to which VCAT may also lift the cloak for the purpose of exercising its costs jurisdiction in the event that a party ‘refused to take part in or withdrew from mediation …’. In terms of the costs jurisdiction a relevant consideration would seem to be whether a party was acting reasonably in refusing to cooperate with the mediation procedure, either by not participating at all or by attending the mediation conference or hearing and not participating in any meaningful way, or at all. Closely related questions arose in the English Court of Appeal in Halsey v Milton Keynes General NHS Trust [2004] 4 All ER 920 (CA) and also in Reed Executive plc v Reed Business Information Ltd [2004] 4 All ER 942 (CA) and also before the Supreme Court of New South Wales in ET Petroleum Holdings Pty Ltd v Clarenden Pty Ltd (No 2) [2005] NSWSC 562

(White J). As each of these cases raised these issues in different contexts they are now considered separately. Nevertheless, the position reached in these three cases is consistent insofar as it would appear to indicate that para 92(2)(b) of the VCAT Act confers a very limited mandate on VCAT to lift the cloak of mediation confidentiality. Coming at these provisions from a different perspective, these cases also appear to indicate that in circumstances where a court or tribunal would not have found it unreasonable for a party to refuse to participate in a mediation or other alternative dispute resolution process it would be inappropriate for any costs discretion to be exercised against that party under para 92(2)(b), or any similar type of provision: and see Retail Leases Victoria [240,200]. The effect of an agreed settlement, as a possible res judicata, was considered in De Simone Nominees Pty Ltd v Szabo [2005] VCAT 1595 (Deputy President Macnamara, 5 August 2005). As to this issue, Mr Macnamara said (at [68] and [69]): [68] It may be accepted that the settlement of all claims without any Court adjudication may nevertheless prove a res judicata such that a claim for further monies by way of damages for in substance the same clause of action as the one compromised is barred. Wells v D’Amico [1961] VR 672; Darley Main Colleries Limited v Mitchell (1886) 11 App. Cas. 127; Brunsden v Humphrey (1884) 14 QBD 141. The doctrines [page 848] of res judicatae however apply only between the parties to the previous proceeding or settlement and their privies. The Szabos were not parties to the other proceeding nor was any predecessor in title of theirs who might be regarded as one of their privies. The defence based upon res judicta in its strict sense must therefore fail. [69] There is modern authority for the view that the doctrine of abuse of process may apply even where the previous adjudication is

between different parties. Rippon v Chilcotin (2001) 53 NSWLR 198. It is difficult to see how a settlement by way of compromise for a ‘round sum’ of money coming from various parties can be regarded as having determined any issue of fact, particularly is this so when as with the present terms of settlement all payments to De Simone are made by the relevant parties ‘without any admission of liability’. Rippon’s case says that it may be an abuse of process to seek to reopen an issue determined in one proceeding so as to create an issue estoppel between the immediate parties between other parties in a separate proceeding. For the reasons given however I do not believe that the settlement of the County Court proceeding entailed the determination of any issue between the parties to that proceeding. For a further review of the authorities in relation to any obligation to act reasonably and in good faith in commercial dealings which may be relevant to a consideration of the ‘bona fides’ of a party in relation to the pursuit of alternative dispute resolution, see Mega Byte Baby Pty Ltd v WJH Pty Ltd [2005] VCAT 1391 (Deputy President Macnamara, 14 July 2005) at [94] and [95]. In this respect the following comment of Mr Macnamara (at [94]) is noted: The High Court of Australia in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289, 301 [40] left open the question as to whether such an obligation should generally be implied. At the Tribunal level the existence of such an implied term should be accepted on the basis of existing authority in the same way as Byrne J accepted its establishment in the Trial Division of the Supreme Court in the Far Horizons case. Nevertheless, speaking for myself I find the critique of the alleged implied term by Gummow J, then a Judge of the Federal Court of Australia, in Service Station Association Limited v Berg Bennett and Associates Pty Ltd (1993) 117 ALR 393 compelling. With no less than two separate sorts of unconscionability now introduced into our law at both the state (Fair Trading Act) level and the federal (Trade Practices Act) level, the need for the development of an additional implied term along similar lines but of uncertain content is not obvious.

Dispute resolution system — Victorian Civil and Administrative Tribunal (VCAT) Statutory basis of VCAT jurisdiction [23.62] The jurisdiction of VCAT is significantly enhanced by the provisions of Div 4 of Pt 10 — Dispute Resolution — of the Retail Leases Act 2003. The jurisdiction of the tribunal is now provided for, in s 89, as follows: [page 849] 89. Jurisdiction of Tribunal (1) The Tribunal has jurisdiction to hear and determine an application by a landlord or tenant under a retail premises lease, or by a specialist retail valuer, seeking resolution of a retail tenancy dispute. (2) In an application under subsection (1) for forfeiture or relief against forfeiture (whether or not for non-payment of rent), the Tribunal has the same jurisdiction, including equitable jurisdiction, and powers as the Supreme Court has in relation to proceedings for forfeiture or relief against forfeiture. (3) The Tribunal’s powers under subsection (2) are subject to s 92 (which provides that each party to the application is to bear its own costs). (4) Subject to s 23(4) (key-money and goodwill payments prohibited), a retail tenancy dispute other than — (a) an application for relief against forfeiture; or (b) a claim under Part 9 (Unconscionable Conduct) — is not justiciable before any other tribunal or a court or

person acting judicially within the meaning of the Evidence Act 1958. (5) The Tribunal also has jurisdiction to hear and determine any other application that under this Act, the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 may be made to the Tribunal. Section 89 of the 2003 Act makes reference to ss 81–83 which (as originally enacted), in effect, define the meaning of ‘retail tenancy dispute’, as follows: 81. Meaning of ‘retail tenancy dispute’ (1) In this Part, ‘retail tenancy dispute’ means a dispute between a landlord and tenant — (a) arising under or in relation to a retail premises lease to which — (i) this Act applies or applied because of Part 3; or (ii) the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 applies or applied; or (b) arising under a provision of the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 in relation to a lease to which that Act applies or applied; or (c) arising under a lease that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied — despite anything to the contrary in this Act (apart from subs (92) and s 119(2)). Note: If proceedings were in progress under the Retail Tenancies Reform Act 1998 when this Act commenced, see s 119(2) (general transitional and savings). (1A) In addition, a “retail tenancy dispute” includes — (a) a dispute between a landlord and a guarantor of a tenant’s obligations under a lease arising in circumstances referred to in subsection (1)(a), (b) or (c);

and [page 850] (b) a dispute between a landlord and a person who has given an indemnity to the landlord for loss or damage arising as a result of a breach by a tenant of a lease in circumstances referred to in subsection (1)(a), (b) or (c). (2) However, ‘retail tenancy dispute’ does not include a dispute solely relating to the payment of rent or a dispute that is capable of being determined by a specialist retail valuer under s 34 or 37. 82. Application of Part to retail premises In this Part, a lease of retail premises includes a lease of premises that are retail premises at any time during the lease but before a referral under s 86 is made in relation to that lease (whether or not the premises are retail premises when that referral is made). 83. Part applies to current and former leases In this Part — ‘landlord’ includes a former landlord; ‘lease’ includes a former lease; ‘tenant’ includes a former tenant. The Retail Leases (Amendment) Act 2005 made some housekeeping amendments to these provisions, in s 34 of that Amending Act as follows: Meaning of ‘retail tenancy dispute’ 34 In section 81(2) of the Principal Act, for ‘section 34 or 37’ substitute ‘34, 35 and 37 of this Act or under section 12a or 13a of the Retail Tenancies Reform Act 1998 or section 10 or 11a of the Retail Tenancies Act 1986’. These 2005 amending provisions commenced on 1 May 2003 (being the

date of commencement of the 2003 Act). In 2014 a new subs 81(1A) extended the definition of ‘retail tenancy dispute’ to a dispute between a landlord and a guarantor of a tenant’s obligations under a lease and a dispute between a landlord and a person who has given an indemnity to the landlord for loss or damage arising from a breach by the tenant of the lease. A very broad scope (hence very broad VCAT jurisdiction, by reference to s 89) is given to the meaning ‘retail tenancy dispute’. It means a dispute between a ‘landlord’ and ‘tenant’ arising ‘under or in relation to’ a retail premises lease to which the 2003 Act, the 1986 Act or the 1998 Act applies or applied: see para 81(1)(a); and see Retail Leases Victoria [240,040] and [240,070] in relation to jurisdiction under the earlier Acts. Alternatively it may mean a dispute between a ‘landlord and tenant’ ‘arising under’ a provision of the 1986 Act or the 1998 Act in relation to a lease to which one of those Acts applies (para 81(1)(b)) or ‘arising under’ a lease ‘that provides for the occupation of retail premises in Victoria to which none of those Acts apply or applied’: para 81(1)(c). The latter is also a significant extension of the meaning of ‘retail tenancy dispute’ in terms of VCAT jurisdiction. It would seem that these provisions must mean or apply to leases which are ‘retail premises leases’ under the provisions of the 2003 [page 851] Act as they are not otherwise already caught by the 1986 Act or the 1998 Act. This would mean pre-1986 Act leases would be caught as would post-1986 and post-1998 Act leases which would be or would have been caught by the 2003 Act definition of ‘retail premises lease’. Thus, for example, a lease of premises with a floor area in excess of 1000 m2 which would otherwise be caught by the 2003 Act definition but which was excepted by the 1986 Act or the 1998 Act would now be caught by Pt 10.

Extent of VCAT jurisdiction under the Retail Leases Act 2003

[23.63] The breadth of the jurisdiction conferred by para 81(1)(c) of the 2003 Act was confirmed by Byrne J in State of Victoria v Tymbook Pty Ltd [2005] VSC 267 at [11] and [12]: [11] The scheme of the 2003 Act appears to be that the dispute resolution procedures of Part 10 have a far wider application than the rest of the Act. Accepting that section 11 limits the application of the Act generally to certain leases entered into after 1 May 2003, the wide definition of ‘retail tenancy dispute’ in section 81 clearly extends to disputes arising under other leases and to retail premises other than premises referred to in section 11(2) [the concluding words of section 82(1) serve to dispel any suggestion that section 11 could be read to detract from this conclusion. See also section 119(1)]. The jurisdiction of the Tribunal under section 89(1), which depends upon an application seeking the resolution of a retail tenancy dispute, is similarly extensive. The consequences of this, having regard to section 89(4) is that, subject to the stipulated exceptions, such a dispute is not justiciable in this Court [or a tribunal other than VCAT or a person acting judicially within the meaning of the Evidence Act]. [12] It is true that this creates a certain terminological awkwardness in the Act. For example, the undefined expressions ‘retail premises lease’ or ‘lease of retail premises’ in Part 10 may have a meaning different from those words in the rest of the Act [see also section 82]. Furthermore, the conclusion which I have preferred means that the whole of section 11 should be qualified so as not to apply to Part 10. It may be thought surprising, therefore, that the introductory qualification in section 11(2) was not located before subsection (1) and sections 1 and 2 were prefaced by ‘except as provided by Part 10’. But these difficulties cannot detract from the extensive terms of section 81(1). With respect to para [12] of Byrne J’s judgment, Associate Justice Derham in AMJE Pty Ltd v Mobil Oil Australia Pty Ltd [2016] VSC 777 rejected a

tenant’s argument that ‘retail premises’ in para 81(1)(c) should be given a wider meaning than ‘retail premises’ as defined in s 4(1) of the 2003 Act. The jurisdiction of VCAT in relation to proceedings for forfeiture or relief against forfeiture, which is specifically conferred under subs 89(2) of the 2003 Act, is apparently quite broad: see Retail Leases Victoria [240,025]. Of relevance in any [page 852] forfeiture proceedings (VCAT or otherwise) is the decision of the Victorian Court of Appeal in Apriaden Pty Ltd v Seacrest Pty Ltd [2005] VSCA 139 where, after a very extensive review of the authorities, it was decided that a lease was terminated by the landlord’s acceptance of the tenant’s repudiation notwithstanding that no notice had been served under s 146 of the Property Law Act 1958: see the judgment of Williams AJA, with whom Ormiston, with some additional observations, and Batt JJA agreed; and see Chapter 18 as to the more general operation and requirements of these provisions. Nevertheless, it is clear from Apriaden (see at [69] Williams AJA) and the authorities to which reference was made (particularly Shevill v Builders Licensing Board (1982) 149 CLR 620; and Progressive Mailing House v Tabali Pty Ltd (1985) 157 CLR 17) that repudiation is not to be inferred lightly; though widespread use of so called Shevill clauses in leases (which characterise certain lease terms as essential so that their breach is taken to amount to repudiation) may broaden the scope of the application of this decision. As to repudiation of leases generally, see [16.26] and following; see also Benarca Pty Ltd v Milgate [2005] VCAT 1390 (Deputy President Macnamara, 14 July 2005) at [32]–[34] referring to Apriaden (at [69]) and Progressive Mailing House; and also Mega Byte Baby Pty Ltd v WJH Pty Ltd [2005] VCAT 1391 (Deputy President Macnamara, 14 July 2005) at [99]. The High Court of Australia refused special leave to appeal Apriaden v Seacrest on 18 November 2005. The 2005 Amendment Act inserted a specific provision in the 2003 Act expressly affirming the position (which had previously been generally accepted and understood) that s 146 of the Property Law Act 1958 applies to retail premises leases; in the following terms:

94a Section 146 of the Property Law Act 1958 applies to retail premises leases To avoid doubt, section 146 of the Property Law Act 1958 applies to retail premises lease. Note: Section 146 of the Property Law Act 1958 provides that a lessor must give a lessee notice before exercising a right of reentry or forfeiture. These provisions commence on 23 November 2005 (being the day after the 2005 Amendment Act commenced, on 22 November 2005). These provisions would appear to have been inserted in the 2003 Act out of an abundance of caution as a result of amendments made to s 146 of the Property Law Act by the 2005 Amendment Act. The effect of the 2005 Amendment Act amendments to Property Law Act s 146 was to extend the operation of s 146 in accordance with the existing general policy position under those provisions (which flowed from their first enactment in the English Conveyancing Act of 1881) which was to require landlords to give tenants notice of breaches of covenant (apart from the covenant to pay rent) upon which they intended to rely for the purpose of forfeiting the lease: see [18.2]. As indicated above, [page 853] the Court of Appeal in Apriaden Pty Ltd v Seacrest Pty Ltd [2005] VSCA 139 held that the notice requirements of s 146 did not apply to require the giving of notice under its provisions where the breach relied upon by the landlord amounted to repudiation of the lease. Consequently, the provisions of s 146 were amended to require notice in these circumstances. The exception to the notice requirements under s 146 in relation to non-payment of rent have been preserved where non-payment of rent is being relied upon as the basis for reentry and forfeiture of the lease. This position is maintained under subs 146(2) even where the lease expressly provides that a breach of the rent covenant is a breach of an essential term and therefore amounts to repudiation (on the basis of Shevill v Builder’s Licensing Board (1982) 149 CLR 620). There would not,

however, be any reason why a landlord should not give a s 146 notice with respect to a default under the rent covenant because if the default amounts to repudiation in itself or on the basis of a Shevill clause the landlord is protected from arguments that it has thereby affirmed the lease and lost its right to accept the repudiation by new subs 146(1a). Nevertheless it would be prudent to reserve rights under subs 146(12) in such a notice in case it is found that the protection provided by subs 146(1a) does not apply where the default is only in relation to the rent covenant (whether or not the lease contains a Shevill clause in this respect). These provisions commence on 23 November 2005 (being the day after the 2005 Amendment Act commenced, on 22 November 2005). The 2003 Act does not contain special provisions with respect to the termination or forfeiture of leases (apart from the provisions which empower VCAT to grant relief against forfeiture, discussed above). In the absence of provisions of this kind, the general common law rules as to the termination by forfeiture (as amended by the Property Law Act 1958 (see [17.1] and following) and the 2005 Amendment Act) will continue to apply to retail premises leases. Absent default, or the landlord relying on any default to effect a forfeiture, the common law rule that a fixed-term lease will expire due to the effluxion of time without the need for notice by either party (Rogers v Moonta Town Corporation (1981) 37 ALR 49 at 54; Cobb v Stokes (1807) 8 East 358; 103 ER 380; Ackland v Lutley (1839) 9 Ad & El 879; 112 ER 1446) is applicable.

Powers of VCAT [23.64] The powers of VCAT under s 91 of the 2003 Act are broadly cast: see Retail Leases Victoria [240,125] and [240,135]. An award of damages may be made under these empowering provisions (and as to the power under the Fair Trading Act 1999, see Retail Leases Victoria [220,110]); as may orders for the recovery of other sums (and interest) payable under the provisions of a lease. In making such an award the usual principles are applied: see Bachelor Girl Clothing Pty Ltd v Martino Properties Pty Ltd (VCAT, Deputy President Macnamara,

[page 854] 1 April 2005). In that case loss of bargain damages were awarded where the tenant’s conduct was found to amount to repudiation of the lease, having regard to an express provision in the lease that the covenant to pay rent was an essential term: see [42] and [43] and the Appendix to the Reasons setting out the damages calculations; and see the references to Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 and Shevill v Builders’ Licensing Board (1982) 149 CLR 620 in relation to the application of the contractual doctrine of repudiation to leases and the effect of Shevill, or essential terms, clauses in this respect. As to the recovery of other sums (and interest), see [45]–[49] of the reasons in that case. As to the power to order rectification, see Hedin v McIntyre [2005] VCAT 227 (Deputy President C Aird, 14 February 2005). Further, the breadth of the power of VCAT to grant injunctions under s 123 of the VCAT Act, and in addition to any such power granted to VCAT under a specific enabling enactment, was reaffirmed by the Court of Appeal in Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242: see Batt JA (with whom Vincent and Nettle JJA agreed) at [24]. Unreasonable delay in applying for interlocutory injunctive relief and a weak case is likely to be fatal to the application. Deputy President Macnamara, reviewing the authorities in this context in Dang v T M Smith Street Pty Ltd (VCAT, Deputy President Macnamara, 10 February 2005), said (at [19]): Further, the very uncertainty of the case made by the applicant is a matter raising the balance of convenience. The Court of Appeal in Optus Network Pty Ltd v Stonnington City Council [1996] 2 VR 209, 213 said that it is proper to consider the strength or otherwise of the serious question found to exist in determining where the balance of convenience lies. Here, I have noted that there is uncertainty as to what year the key conversations took place, uncertainty as to whether what is being alleged is a lease or a licence. The authorities such as the famous decision of the English Court of Appeal in Lace v Chandler [1944] KB 368 tell us that one cannot have a valid lease of land for an uncertain period of time and everything about the conversation relied

upon seems to be uncertain. In Lace v Chandler the Court of Appeal said that a lease of premises for the duration of the war was not a valid lease because it did not have a certain term. In this case, the term was to be about three years; but it was hedged with uncertainty about when the clean up of the premises would be completed, when a business would be commenced, when rent would be payable and so forth. Therefore, both legally and as a matter of fact, I believe that there are significant weaknesses in the serious question that I have found exists. Also, the need for urgent injunctive relief is in my view belied by the almost six months that have passed since this matter was before Senior Member Davis. Mr Cheung’s explanation was that there have been continued efforts at without prejudice negotiation. So much may be true but what that means is that the matter is not so urgent that the applicant cannot, as it were, put things on the long finger and concentrate on negotiation. How can one view a matter as being in need of an urgent injunction in those circumstances? [page 855] The power of the tribunal to grant declaratory relief and the circumstances in which it should be granted were considered in Victoria v Bradto Pty Ltd [2006] VCAT 1864 (Judge Bowman, sitting as VCAT). As to the principles to be applied to an application for an order for summary dismissal or strike out under subs 75(1) of the VCAT Act, see Forrester v AIMS Corporation [2004] VSC 506. Generally, as to VCAT powers, see Retail Leases Victoria, [240,135].

Australian Consumer Law and Fair Trading Act jurisdiction of VCAT [23.65] The jurisdiction of VCAT with respect to retail premises and other leases under the Australian Consumer Law and Fair Trading Act 2012 depends upon there being ‘services’ within the definition of ‘fair trading dispute’ under s 182 of that Act. The jurisdictional position in this respect was summarised by

Deputy President Macnamara with respect to the Act’s predecessor, the Fair Trading Act 1999, in Dang v T M Smith Street Pty Ltd (VCAT, Deputy President Macnamara, 10 February 2005) (at [16]): The definition of ‘services’ in section 3 of the Fair Trading Act is wide enough to encompass interest in land, hence the Court of Appeal in Zeus and Ra v Nicolao (2003) 6 VR 606, 626 [76] accepted that the Tribunal had a general landlord and tenant jurisdiction additional to its jurisdiction under the Retail Leases Act by reason of section 107. Similarly, in its more recent decision of Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242 the Court accepted that a dispute with regard to an alleged licence of business premises would be a consumer and trader dispute within the meaning of section 107. Consequently Mr Macnamara did not uphold a jurisdictional challenge on the basis that the premises were not retail premises, though it was conceded that they were capable of being retail premises, and there was no lease: see [13]–[16]. See also Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242; and see Zeus & Ra Pty Ltd v Nicolaou (2003) 6 VR 606; (2003) V ConvR ¶54-673 (CA): and Retail Leases Victoria [220,105]. The Australian Consumer Law and Fair Trading Act jurisdiction of VCAT is considered in detail in Retail Leases Victoria [220,100]–[220,115].

[page 857]

24 Retail Tenancies Legislation: New South Wales Background [24.1] The process of reform culminating in the introduction of retail tenancies legislation occurred in New South Wales several years later than in Victoria. Initially, the focus was on the introduction of a code of practice as an alternative to legislation. The initial proposal was to develop a mandatory code of practice regarding retail tenancy leases, and to prescribe the code by regulation under the Fair Trading Act. Lengthy discussions between the New South Wales Business and Consumer Affairs Department, the Retail Traders Association, the Shopping Centre Tenants’ Association of Australia and the New South Wales Division of the Building Owners and Managers’ Association of Australia (hereafter ‘BOMA’) led to a draft Code in 1991. BOMA later that year withdrew its endorsement of the draft Code and criticised some of its terms. Following further discussions BOMA indicated its preparedness to accept a voluntary Code, and in December 1991 the parties agreed upon a Retail Tenancy Leases Code of Practice, which came into effect in January 1992. Unfortunately the Code was found to be frequently breached, and the government resolved to legislate. The result was the Retail Leases Act 1994, which received assent on 2 June 1994 and commenced on 1 August 1994. The fundamental purpose of the Act is ‘to protect the weak against the strong,

i.e. the small retail tenant against the large retail lessor’: GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 at [14]; Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333. The legislation establishes a number of safeguards for tenants of retail premises and prohibits the parties from [page 858] contracting out of any of the provisions. Pursuant to s 7, any lease provision, agreement or arrangement between the parties is void to the extent to which it is inconsistent with a provision of the Act. On 1 March 2017 the Retail Leases Amendment (Review) Act 2017 received assent resulting in significant changes to the Act. The amendments came into effect on 1 July 2017.

Premises subject to the Act [24.2] It is only premises which constitute a ‘retail shop’ which are within the scope of the Act. ‘Retail’ is not defined in the Act. At common law, the natural meaning of ‘retail’ has been said to involve ‘sale and delivery’, although on occasion a retailer may enter into executory contracts to sell: Wright v Edwards [1961] SASR 267 at 282. The traditional distinctions between retail and wholesale trading are well established in case law: Provident Life Assurance Co Ltd v Official Assignee [1963] NZLR 961 at 965; Plummer & Adams v Needham (1954) 56 WALR 1 at 15. ‘Retail’ necessarily involves the notion of sale to members of the public: Bateman Television Ltd v Coleridge Finance Co Ltd [1969] NZLR 794 at 815. In Collector of Customs v Chemark Services Pty Ltd (1993) 114 ALR 531, imported herbicide sold in 250 kg drums to professional horticulturists was held by the Full Court of the Federal Court to be a ‘retail sale’, notwithstanding the fact that the sale was not to ordinary members of the public, and the fact that the sales were not of a commodity in small quantities. The Full Court added that ‘retail sale’ must be construed in the context of the legislation under consideration. The decision of Von Doussa J in Electricity

Trust of South Australia v Krone (Australia) Technique Pty Ltd (1994) 123 ALR 202 is to similar effect. ‘Retail shop’ is defined in s 3 as meaning: premises that: (a) are used, or proposed to be used, wholly or predominantly for the carrying on of one or more of the businesses prescribed for the purposes of this paragraph (whether or not in a retail shopping centre); or (b) are used for the carrying on of any business (whether or not a business prescribed for the purposes of paragraph (a)) in a retail shopping centre. ‘Premises’ in this definition has been held not to include a lease or licence for bare or vacant land, even if the land is used in conjunction with the lease of a retail shop: Manly Council v Malouf [2004] NSWCA 299. In Sydney Markets Ltd v Wilson (2011) 16 BPR 30,583; [2011] NSWCA 201, the Court of Appeal decided that a shop need not be enclosed by a permanent structure to be a ‘retail shop’. The court held that stalls in a market which was enclosed in a building were ‘shops’ and that the agreement governing the use of the stalls was a ‘retail shop lease’. [page 859] Schedule 1 currently contains 164 different types of businesses, with provision for further businesses to be prescribed in future by the regulations. The noteworthy feature of the list is that it conforms with the notion that ‘retail’ necessarily involves the notion of sale to members of the public: Bateman Television Ltd v Coleridge Services Pty Ltd [1969] NZLR 794 at 815, and to involve sale and delivery, although on occasion a retailer may enter into executory contracts to sell: Wright v Edwards [1961] SASR 267 at 282. The list in Sch 1 and the statutory definition of ‘retail shop’ includes some conventional service establishments, such as restaurants and cafeterias, but excludes many (although not all) professional and public services, such as

solicitors’ and accountants’ offices, doctors’ and dentists’ surgeries, government services and Australia Post. Premises are not excluded from being a ‘retail shop’ under para (a) of the definition because products are produced in the premises and sold elsewhere: Akora (Bondi Junction) Pty Ltd v Buttrose [2008] NSWADT 275. In Akora the tenant operated a catering business. Schedule 1 refers to ‘bakeries or bread shops’. The tribunal held that the premises were being used as a bakery and there was nothing in the Act that prohibited a bakery business operating from a retail shop selling its product to other shops or clients. The product of the business did not have to be sold exclusively to retail customers coming to the shop. For the purposes of para (a) of the definition, the fact that the prescribed list of businesses in Sch 1 is exhaustive avoids the possibility of litigation to determine whether a particular type of business falls within the scope of the legislation. However, in respect of para (b) of the definition, which applies to any business in a retail shopping centre, this is unavoidable. ‘Retail shopping centre’ is defined as: … a cluster of premises that has all of the following attributes: (a) at least 5 of the premises are used wholly or predominantly for the carrying on of one or more of the listed businesses; (b) the premises are all owned by the same person, or have (or would if leased have) the same lessor or the same head lessor, or comprise lots within a single strata plan under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold) Development Act 1986; (c) the premises are located in the one building or in 2 or more buildings that are either adjoining or separated only by common areas or other areas owned by the owner of the retail shops; (d) the cluster of premises are promoted as, or generally regarded as constituting, a shopping centre, shopping mall, shopping court or shopping arcade. For a consideration of the meaning of ‘retail shopping centre’, see Mehevi Pty Ltd v Stromboli Pty Ltd [2005] NSWADT 29.

As in the equivalent provision in Western Australia (see [26.2]), the effect of the definition of ‘retail shop’ is to give a broader scope to the Act to premises situated in [page 860] a retail shopping centre than to premises located elsewhere. Where the premises are located in a retail shopping centre, the Act will apply in respect of ‘any business’. At common law, ‘business’ has been given a wide meaning. It has been held that a business exists wherever there is continuity, diligence and repetition of actions constituting the activities of the enterprise, provided that the operations have some significant commercial purpose or character. Alternatively, the actions or operations must be of such magnitude that, given favourable seasons or conditions, they will by maturity or further activity reasonably be expected to develop into a viable venture. See Town Investments Ltd v Department of the Environment [1976] 1 WLR 1126 at 1149–50; Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333 at 335; Durant v Greiner (1990) 21 NSWLR 119 at 128; Abernethie v A M & J Kleiman Ltd [1970] 1 QB 10 at 20; American Leaf Blending Co v DirectorGeneral of Inland Revenue [1979] AC 676 at 683–4; Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 705. ‘Business’ would thus seem to be sufficiently wide to include the retail provision of professional and public services; for example, solicitors’ and accountants’ offices, doctors’ and dentists’ surgeries, Australia Post, etc. The issue arises whether the Act applies where there is a lease giving a right of occupation for the purpose of use as a retail shop, but the tenant does not actually use the premises as a retail shop. Section 3 defines ‘retail shop lease’ as follows: ‘retail shop lease’ or ‘lease’ means any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop: (a) whether or not the right is a right of exclusive occupation, and

(b) whether the agreement is express or implied, and (c) whether the agreement is oral or in writing, or partly oral and partly in writing. In Moweno Pty Ltd v Stratis Promotions Pty Ltd [2003] NSWCA 376 (at [14]ff) the court refused to decide this issue based simply on the wording of this definition; rather the court stated that the correct approach is to consider whether the Act discloses an intention to apply when premises that were intended to be used as a retail shop, and are the subject of a lease giving a right of occupation for that purpose, come to be used by the tenant for some other purpose. The court concluded that the answer may depend on the detailed facts of the case. In Dee-Tech Pty Ltd v Neddam Holdings Pty Ltd [2012] NSWSC 251, the premises, at the commencement of the lease were used predominantly for the carrying on of a business prescribed in Sch 1 but as a result of a variation to the lease the use the premises were used partly for a use prescribed in Sch 1 and partly for a use not prescribed in Sch 1. The court held that the lease had commenced as a ‘retail shop lease’ but as a result of the variation to the lease, the premises had ceased to be used predominantly for the carrying on of a business prescribed in Sch 1 with the consequence that the lease had ceased to be a ‘retail shop lease’. [page 861] Certain retail shops are excluded from the operation of the Act. Pursuant to s 5, these are: (a) shops that have a lettable area of 1,000 square metres or more; (b) shops that are used wholly or predominantly for the carrying on of a business by the lessee on behalf of the lessor; (c) any shop within premises where the principal business carried on on those premises is the operation of a cinema, bowling alley or skating rink and the shop is operated by the person who operates the cinema, bowling alley or skating rink; (d) premises used only for any one of the purposes listed in Schedule

1A; (e) premises of a class or description prescribed by the regulations as exempt from this Act. Pursuant to para (a) of s 5, only small retail shops — that is, those with a lettable area of 1,000 square metres or less — are subject to the legislation. The exclusion, in para (a) of the statutory definition of ‘retail premises’ of premises with a floor area exceeding 1,000 square metres was added out of recognition of the fact that large retail tenants do not suffer from inequality of bargaining power and do not need the statutory protection granted by the Act. It is noteworthy that the definition refers to ‘lettable area’ rather than ‘floor area’ as in the case of interstate legislation: see [26.2]. The New South Wales Act appears to avoid the ambiguities associated with the use of the word ‘floor’ in this context. ‘Lettable area’ seems to be sufficiently broad as to clearly encompass both enclosed and unenclosed areas. In the absence of any statutory indication as to how the lettable area is to be measured, it is submitted that the BOMA system of measurement would be adopted (approved by the Full Court of the Federal Court in Lezam Pty Ltd v Seabridge Australia Pty Ltd; JLW (NSW) Pty Ltd v Seabridge Australia Pty Ltd (1992) 107 ALR 291). As in Victoria, it is assumed that in the case of a strata subdivision, the common property, not being part of the leased premises, cannot be counted within the ‘lettable area’: Retail Tenancies Award No 9 [1994] V ConvR ¶58-518. The state government has not yet invoked s 5(e), and no premises have been declared to be exempt from the Act. By s 6(1), the Act also excludes: (a) (Repealed); (b) leases for a term of 25 years or more (with the term of a lease taken to include any term for which the lease may be extended or renewed at the option of the lessee); (c) leases entered into before the commencement of this section; (d) leases entered into under an option granted or agreement made before the commencement of this section; (e) any other lease of a class or description prescribed by the

regulations as exempt from this Act. [page 862] With certain limited exceptions, s 6A declares that the Act further excludes leases of a retail shop for a term of less than six months without any right for the tenant to extend the lease (whether by means of an option to extend or renew the lease or otherwise). Section 6A, added in 2005, replaces s 6(a), which was repealed at that time. The old s 6(a) was interpreted by the Full Court of the Federal Court in Lin v State Rail Authority of NSW [2006] FCAFC 42 to mean that a short-term lease will be excluded by the legislation unless the tenant can show that he or she has a legal right to extend the lease beyond six months. A provision for holding over beyond six months is not enough to attract the application of the Act if it operates effectively at the discretion of the landlord. In Duncan’s Catering Pty Ltd v Bankstown City Council [2006] NSWADTAP 9, the catering company had a one-year agreement to use a kiosk within the town hall. The terms of the agreement were that the rights to occupy the kiosk only arose on each occasion that the council asked the company to supply services. These occasions were never for more than one day in duration. The issue was whether the company fell within the exception in s 6(1) in favour of short term leases under six months and were thus excluded from the Act. The Appeal panel held in the affirmative on the basis that the agreement was ad hoc in nature and only arose when the council requested services. On the facts there was held to be no grant of a one-year lease. The exception in respect of very short leases (under six months) and very long leases (25 years or more) is, in practice, of only minor significance as few leases of this nature are encountered in relation to retail shops. The justification for the exception is presumably one of equity; tenants under a lease of less than six months have such a short term that they cannot reasonably expect the advantages bestowed on tenants generally, especially the statutory option to extend the lease to a minimum five-year term. Conversely, tenants under a lease of 25 years or more are regarded as having sufficient bargaining power that they have no need for the protections given under the

legislation. In Pyrmont Point Pty Ltd v Westacott (2016) 91 NSWLR 170; (2016) 18 BPR 35,741, the Court of Appeal held that a lease for a term of five years with four options to renew each for five year terms was a lease for ‘25 years or more’ and was therefore not governed by the Act. One matter left unclear by the legislation is whether tenancies at will or periodic tenancies may exist in relation to retail shops subject to the Act and, if so, whether the right to a minimum five-year term (discussed at [24.9]) applies to these tenancies. A court or tribunal decision is awaited to resolve this issue. Subsections 6(c) and (d) concern the timing of the application of the Act. Section 6, along with the rest of the Act (with the exception of Pt 8 which relates to dispute resolution) commenced on 25 November 1994. All leases entered into prior to this date, and all leases entered into under an option granted or agreement made prior to this date, will be outside the scope of this legislation and will be subject to the general [page 863] law rules. Note that the Pt 8 provisions apply to disputes which arise before the date of commencement of the rest of the legislation: see s 63(2)(b). Thus, leases which commenced too early for the application of the substantive provisions of the Act to apply will still be subject to the system of mediation and tribunal determination of disputes established under Pt 8: see [24.20]. The power under s 6(e) to exempt leases of a certain class or description from the legislation has not yet been exercised by the government. Section 82 gives the government more wide-ranging power to exempt conditionally or unconditionally from the operation of the Act or any provision therein any specified person, retail lease or retail shop or any specified class of persons, retail leases or retail shops. This power also remains unexercised to date. The application of the Act is significantly affected by the statutory definition of ‘lease’ in s 3. The definition refers to an ‘agreement … to grant a right of occupation of premises’ and includes express, implied oral and written agreements that grant a right of occupation of premises ‘whether or not the

right is a right of exclusive occupation’. This definition is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries: see Pyrmont Point Pty Ltd v Westacott at [44], [46] and [63]. The provision was applied in Seguin v Anglican Church Property Trust Diocese of Sydney (No 1) [2004] NSWADT 146, where a right of interrupted occupation conferred on the applicants by a licence agreement was held not to prevent the application of the Act. The tribunal stated at [56] that the policy of the legislation could be averted too easily by landlords if, through the device of reserving a right periodically to re-enter the premises for a short period of time, they could claim that a lease or licence granted by them did not fall within the legislation. In Bigdale Pty Ltd v Royal Motor Yacht Club of NSW Port Hacking Branch [2010] NSWSC 1196 the court held that the Act could apply to non-exclusive occupation rights granted by a license. At common law, it is essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] WASCA 317; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If an occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For information about the nature of a licence, see Chapter 3. In contrast, an occupant will come within the scope of the Act by virtue of the definition of ‘lease’ regardless of whether his or her right of occupation is regarded as exclusive. Section 83 states: This Act binds the Crown in right of New South Wales and, in so far as the legislative power of Parliament permits, the Crown in all its other capacities. [page 864] Section 83 thus appears to include within the scope of the Act all leases of retail premises owned by state government departments and instrumentalities. If the state government department or instrumentality is classed as part of the

Crown in right of the state, it will be subject to the Retail Leases Act by virtue of s 83. If the department or instrumentality is not classed as part of the Crown in right of the state, it will be subject to the Act by virtue of the definition of ‘retail shop’ in s 3 (subject to the exclusions contained in ss 5 and 6). The Act also binds retail premises leased by Commonwealth departments and instrumentalities based on the clear intention in s 83 that the Crown in right of the Commonwealth is to be bound: Province of Bombay v Municipal Corporation of Bombay [1947] AC 58; Bradken Consolidated Ltd v The Broken Hill Proprietary Co Ltd (1979) 145 CLR 107; Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 53 ALJR 614, and the fact that the state appears to have the necessary legislative power to bind the Commonwealth: Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372; Commonwealth v Bogle (1953) 89 CLR 229; Federated etc Service Association v NSW Railway Traffic Employers Association (1906) 4 CLR 488. Section 6B provides that the Act does not apply to a retail shop that is a stall in a market, unless the market is a ‘permanent retail market’.

Express duties of the landlord Give the tenant a disclosure statement [24.3] The landlord is required to give the tenant a disclosure statement at least seven days before entering into a retail shop lease: s 11(1). A form of disclosure statement is prescribed in Sch 2. The prescribed form requires information to be given to the tenant in relation to the specified details of the tenancy, outgoings to be paid by the tenant, retail shopping centre details, details as to the interest of the landlord and details as to any agreements or representations. The disclosure statement must contain the information and be accompanied by the material that is required to complete or accompany the prescribed form: s 11(1)(c). However, the disclosure statement need not comply strictly with the prescribed form so long as it substantially complies: s 11(1)(d). ‘Entered into’ is defined in s 8. Pursuant to s 8(1), a retail shop lease is entered into ‘when a person enters into possession of the retail shop as lessee under the lease or begins to pay rent as lessee under the lease (whichever

happens first)’. However, a lease will be ‘entered into’ on its execution by both parties if that occurs prior to the lessee entering into possession or beginning to pay the rent: s 8(2). In Aspromonte Pty Ltd v Zagari [1999] NSWSC 831 Hodgson CJ in Eq interpreted s 8 as meaning that there can be entry into a retail shop as tenant and payment of rent as tenant under a lease, where these events occur at a time when there is consensus as to the terms of such [page 865] a lease but no formal lease yet entered into. This case was considered in Randi Wixs Pty Ltd v Pokana Pty Ltd (No 2) [2003] NSWADT 4, where the tribunal stated that it was not necessary that s 8 does not mean that there must be consensus about each and every term of the lease; all that is required is that a person enters into possession of a retail shop as tenant, or begins to pay rent as tenant, in circumstances where there is an agreement between the parties for a right of occupation of the premises for the purposes of the use of the premises as a retail shop. As stated by the explanatory note to s 8, money paid in advance (purportedly as rent) as a deposit to secure premises for a proposed lease does not constitute rent paid as tenant under the lease. The need for a disclosure statement raises some difficult practical issues for the landlord. For example, regarding the details of tenancy, the date of commencement may not be known at the time the disclosure statement is given. This may easily occur where the premises require renovation after a prior tenant has vacated, or where the premises are in the course of construction. Where a shopping centre is being constructed, the landlord may be unaware of the nature of changes to the surrounding roads. In Vasue v Lubo Medich Holdings [2008] NSWSC 899, it was the tenant who changed the commencement date on the disclosure statement before returning it and the landlord was therefore not privy to the disclosure. The court concluded that there was no binding agreement for a lease. Further, in Burbridge v Vosedo Pty Ltd [2005] NSWADT 8 the lessor’s disclosure statement incorrectly stipulated a rent-free period and the amount of the bond. The court concluded that

these were matters of fundamental difference and that there was insufficient consensus to constitute an enforceable agreement. One remedy available to the tenant if the landlord fails to comply with s 11(1) is termination of the tenancy. Pursuant to s 11(2), if a tenant has not been given a disclosure statement at least seven days before entering into a retail shop lease, or if the disclosure statement is incomplete or contains false or misleading information, the tenant may give the landlord a written notice of termination at any time within six months after entering into the lease. Strangely, the Act does not specify the length of notice required. Under these circumstances, it is submitted that the tenant may choose the length of notice. If the lessee terminates the lease in accordance with this section, the lessee is entitled to recover compensation from the lessor for costs reasonably incurred by the lessee in connection with the lessee entering into the lease, including compensation for expenditure by the lessee in connection with the fit-out of the retail shop: s 11(2)(A). In a case where the disclosure statement is alleged to be incomplete or contains false information, the tenant cannot terminate the lease if: (a) the landlord has acted honestly and reasonably and ought reasonably to be excused for the failure concerned; and (b) the tenant is in substantially as good a position as the tenant would have been if the failure had not occurred: s 11(3). For an illustration of the application of s 11(2) and (3), see Ashutosh Industries Pty Ltd v Giriftin (RLD) [2005] NSWADTAP 34. [page 866] The termination of a lease pursuant to s 11(1) does not affect any preexisting legal rights and obligations: s 11(5). Thus, for example, tenants will have an obligation to pay rent until such time as the notice of termination served by them under s 11(1) expires. Another remedy available to the tenant for breach of s 11(1) is the right to sue the landlord for reasonable compensation for any damage suffered as a result of being induced by any false or misleading statements or representations to enter into a lease: s 10(1). The giving of a disclosure statement to a prospective tenant under a retail shop lease is expressly stated to be within the scope of s 10(1): s 10(2). Note that s 10 is not limited to cases of disclosure

statements but extends to any pre-lease misrepresentations made by the landlord or any person acting under the landlord’s authority. This is clear from the wording of s 10(1). The remedy in s 10 extends to apply to statements or representations made before the date of commencement of the Act: s 10(3). For recent considerations of s 10(1), see Golden Harvest (Aust) Pty Ltd) v Paing Pty Ltd [2004] NSWCA 85; Fares v Bleakley [2005] NSWADT 230. In the former case the Court of Appeal stated (at [36]) that s 10 requires a misrepresentation to have been one which had a substantial influence of the decision making process of the party affected, but it need not be the only influence. Further, the representation need not be the sole reason for entering into the lease, but it must not be on a minor or peripheral aspect. No guidance as to the meaning, in s 11, of the phrases ‘false or misleading’ and ‘honestly and reasonably’ is given in the legislation. This is a question of fact in each case. In the context of s 52(1) of the Trade Practices Act 1974 (Cth) (which is now s 18 of the Australian Consumer Law), ‘misleading’ has been defined to mean ‘to lead astray in action or conduct; to lead into error, to cause to err’: Weitmann v Katies Ltd (1977) 29 FLR 336 at 343. According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public … into error’. (See also RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171.) By a 2005 legislative amendment, the tenant is now also required to make a written disclosure statement. By s 11A(1), this statement must be provided by the tenant within seven days after receiving the landlord’s disclosure statement. The disclosure statement must contain the information contained in the form set out in Sch 2. Failure to comply with this provision is punishable by a maximum penalty of 50 penalty units. Clause 6 of the tenant’s disclosure statement form states: ‘Apart from the statements or representations set out above, no other promises, representations, warranties or undertakings (other than those contained in the lease) have been made by the lessor to the lessee in respect of the premises or the business to be carried out on the premises’. In

Xin v Zakos [2002] NSWADT 189 the tribunal held that despite cl 6 a tenant can [page 867] still allege any misrepresentation that is not set out in the form, but faces a substantial evidentiary burden.

Give a prospective tenant a copy of the lease at the negotiation stage [24.4] Section 9 states: A person must not, as lessor or on behalf of the lessor, offer to enter into a retail shop lease, invite an offer to enter into a retail shop lease or indicate by written or broadcast advertisement that a retail shop is for lease, unless: (a)

that person has in his or her possession a copy of the proposed retail shop lease (in written form, but not necessarily including particulars of the lessee, the rent or the term of the lease) for the purpose of making the lease available for inspection by a prospective lessee, and (b) the person makes: (i) a copy of the proposed lease, and (ii) if the regulations so provide — a copy of a retail tenancy guide prescribed by or identified in the regulations, available to any prospective lessee as soon as the person enters into negotiations with the prospective lessee concerning the lease. A maximum penalty of 50 penalty units is prescribed for breach of this section. This provision is far more wide-ranging than the equivalent provision in other interstate retail tenancies and residential tenancies legislation (see, for example, the equivalent Queensland provision: [25.4]), which is traditionally

limited to an obligation by the landlord to give the tenant a copy of any executed written lease within a period of time after entering into a lease. It is designed to inform prospective tenants as to the obligations they will incur by entering into the lease rather than simply inform them as to the terms of the lease that they have signed. From a consumer protection standpoint, this provision appears to be forward-looking, although it could be argued to make a mockery of the notion that a lease is a freely-negotiated contract between the parties. Interestingly, there appears to be no obligation on the landlord to give a tenant a copy of the completed lease which, depending on the negotiations, could differ significantly from the proposed lease form initially drafted by the landlord.

Not to require the payment of key money and lease preparation expenses [24.5] A provision in a retail shop lease is void if it requires or has the effect of requiring the payment of key money or lease preparation expenses in connection with the granting of the lease: s 14(1). In the case of lease preparation expenses, an exception exists in the case where an amendment to a proposed lease was requested by a tenant or prospective tenant: s 14(4). In addition, s 14(2) makes it an offence, punishable by a [page 868] maximum penalty of 100 penalty units, for a landlord or a person acting on behalf of the landlord to seek or accept the payment of key money or lease preparation expenses. Section 40(1) mirrors the wording of s 14(1) in the context of the payment of key money in connection with the granting of consent to an assignment of a retail shop lease, and s 45(1) similarly mirrors the wording in the context of the payment of key money and lease preparation expenses in connection with the renewal or extension of a lease. In both cases the provision is void and the landlord or the landlord’s agent is guilty of an offence punishable by a maximum penalty of 100 penalty units. The Act makes no reference to the prohibition of key money where the tenant seeks

the landlord’s consent to sublet the premises, although this situation is arguably covered by s 14(1) read together with the definition of ‘lease’. It is submitted that ‘lease’ in this situation should be interpreted as including a sublease. Where either ss 14(1), 40(1) or 45(1) is infringed, the tenant is entitled to recover from the landlord as a debt any payment made or the value of any benefit conferred by the tenant in contravention of any of these subsections: ss 14(2), 40(2) and 45(2). ‘Key money’ is defined in s 3 to mean: … any money paid to or at the direction of a lessor or lessor’s agent, by way of a premium, non-repayable bond or otherwise, or any benefit that is conferred on renewal, extension or assignment of a lease (and a reference in this Act to the payment of key-money includes a reference to the conferral of any such benefit. The meaning of ‘premium’ was examined by the Full Court of the Supreme Court of Western Australia in Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110, where Malcolm CJ (at 120) defined it as ‘an amount paid in addition to rent … The paradigm case of the ordinary meaning is an amount paid by way of a capital sum over and above the market rent’. This broad construction was also preferred by Ormiston J in Burke v Gillett [1994] V ConvR ¶54-507 at 65,819, who defined ‘premium’ as ‘an amount paid, whether in cash or kind, other than by way of rent’ so as to include other payments and benefits made for the giving of consent to assignments. (Note, however, the more limited definition given by Smith J in Burke v Gillett (at 65,832–4).) See also King v Earl Cadogan [1915] 3 KB 485; Elmdene Estates Pty Ltd v White [1960] AC 528; R v Barnet Rent Tribunal; Ex parte Millman [1950] 2 KB 506. Pursuant to s 14(3), the following payments are permissible: rent in advance; payment for the grant of a franchise in connection with the granting of the lease; payment for plant, equipment, fixtures or fittings sold by the landlord to the tenant in connection with the granting of the lease; the payment of a security deposit; or ‘the payment for goodwill of a business from a purchaser of the business, but only to the extent that the goodwill is attributable to the conduct of the business by the lessor’. The payment of a fee to keep premises available to rent is not refundable as ‘key money’ because the

payment of the fee is not connected with the granting of a lease: Gordon v Trustees of the Roman Catholic Church of the Diocese of Lismore [2010] NSWADT 230. [page 869] ‘Goodwill’ is not defined in the Act. ‘[Goodwill] is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom’: IRC v Muller & Co’s Margarine Ltd [1901] AC 217 at 223. ‘The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom’: Federal Commissioner of Taxation v Williamson (1943) 67 CLR 561 at 564. It was said in Hoogerdyk v Condon (1990) 22 NSWLR 171 at 175 (per Young J): Goodwill includes every positive advantage that has been acquired in carrying out a business which would give a reasonable expectancy of preference in the face of competition … The [elements which compose goodwill] will vary from business to business. There will be local goodwill represented by the fact that people will patronise the business nearest their home or place of business. There will be personal goodwill generated by the persons who in fact carry on the business. There will be goodwill or habit brought about by customers getting into the habit of buying things at a particular outlet … It must always be remembered, however, that all these aspects of goodwill attach to a particular business and one cannot consider goodwill apart from the business. For earlier definitions of goodwill, see Daniell v Federal Commissioner of Taxation (1928) 42 CLR 296 at 302–3; Hill v Fearis [1905] 1 Ch 466 at 471; Trego v Hunt [1896] AC 7 at 17–18; Austen v Boys (1858) 2 De G & J 626 at 635–6; 44 ER 1133 at 1136; Wedderburn v Wedderburn (No 4) (1856) 22 Beav

84 at 104; 52 ER 1039 at 1047; Potter v Inland Revenue Commissioners (1854) 10 Exch 147 at 159; 156 ER 392 at 396–7.

Unconscionable conduct and misleading or deceptive conduct proscribed [24.6] The Retail Leases Amendment Act 1998 added a new Div 7A into the Act, which introduces new controls on both parties regarding unconscionable conduct and misleading or deceptive conduct. The new controls are stated only to apply to conduct that occurred after the commencement of the amendment: s 62A(2). Section 62B concerns unconscionable conduct. Section 62B(1) states: ‘A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unreasonable’. Section 62B(2) imposes a similarly worded obligation on the tenant. The section goes on to list matters to which the tribunal may have regard for the purposes of determining whether either party has contravened the section. The considerations regarding the landlord are listed in s 62B(3) and the tenant in s 62B(4). The most significant of these listed considerations are the following: the relative strengths of the bargaining positions of the parties; whether, as a result of conduct engaged in by one party, the other party was required to comply with conditions that were not reasonably necessary for the protection of the first party’s legitimate interests; whether each party was able to understand any documents relating to the lease; [page 870] the extent to which each party acted in good faith; the extent to which each party was willing to negotiate the terms and conditions of the lease; whether either party used undue influence or pressure or used any unfair tactics against the other party; and the requirements of any applicable industry code. For a consideration and application of the requirement to act on good faith, see Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC

1375. In this case, Palmer J stated (at [54]) that the mere fact that the landlord dislikes the tenant or the proposed assignee is irrelevant; it is not the law that those exercising their legal rights against others must do so only with goodwill and disinterest. For a consideration and application of a range of factors listed in s 62B(3), see Campbell v Astil [2004] NSWADT 277. The New South Wales Court of Appeal considered the application of the unconscionable conduct provision to retail leases in Attorney-General of New South Wales v World Best Holdings Ltd (2005) 63 NSWLR 557. Spiegelman CJ stated (at 583): Unconscionability is a well-established but narrow principle in equitable doctrine. It has been applied over the centuries with considerable restraint and in a manner which is consistent with the maintenance of the basic principles of freedom of contract. It is not a principle of what ‘fairness’ or ‘justice’ or ‘good conscience’ require in the particular circumstances of the case … The Ministerial Second Reading Speech … indicates a similar concern to distinguish what is unconscionable from what is merely unfair or unjust. … Unconscionability is a concept which requires a high degree of moral obloquy. If it were to be applied as if it were equivalent to what is ‘fair’ or ‘just’, it could transform commercial relationships in a manner which the Minister stated was not the intention of the legislation. The principle of ‘unconscionability’ would not be a doctrine of occasional application, where the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute about a retail lease arises. In Armstrong Jones Management Pty Ltd v Sales-Bond & Associates Pty Ltd [2007] NSWADTAP 47, the Appeal Panel of the tribunal commented further: [I]n our view [s 62B] requires, ultimately, an holistic examination of all the circumstances of the lease relationship. While no case is likely to involve all of the categories of misconduct enumerated in the nonexclusive check list, one would normally expect to see an unconscionable conduct finding supported by a range of considerations. It would be unusual, but not impossible, we think, for

one instance of egregious conduct to be enough to give rise to a finding of unconscionable conduct. The tribunal repeated this caution in ACN 079 830 596 Pty Ltd v Wallis Lake Fisherman’s Cooperative Ltd [2007] NSWADT 297, which is a rare illustration of a proven case of unconscionable conduct. For a more usual case involving rejection of the claim of unconscionable conduct on the facts, see, for example, Smith v Trust Company of Australia Ltd [2008] NSWADT 10. Illustrations of a proven case of unconscionable conduct are World Best Holdings Ltd v Sarker (2010) 14 BPR 27,549; [2010] NSWCA 24 and PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446. In the latter case the Court of Appeal upheld a finding that a landlord had acted unconscionably by installing [page 871] kiosks which obstructed public sight of the tenant’s shop. A claim for unconscionable conduct cannot be made where the only connection between parties is that they were lessees of the same premises: Shree Sai Charan Pty Ltd v North Indian Flavour (Broadway) Pty Ltd and Bobby Singh [2011] NSWADT 95. Section 62B was closely modelled on Commonwealth consumer protection legislation contained in Pt 4A of the Trade Practices Act 1974 (now Pt IV of the Competition and Consumer Act 2010 (Cth) (CCA)). Section 51AC of the Trade Practices Act (now s 21 of the CCA) was very similarly worded to s 62B. The only changes were are word changes to replace references to ‘consumer’ and ‘corporation’ with references to ‘lessor’ and ‘lessee’, and the addition to other factors in the list of relevant considerations for the tribunal in s 62B(3) and (4). In light of the close modelling of s 62B on the former Trade Practices Act, it appears that the many judicial precedents under s 51AC of the Trade Practices Act and s 21 of the CCA will also be applicable to the Retail Leases Act. This conclusion was affirmed by Palmer J in Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375, who stated (at [53]) that unconscionable conduct in exercising a power conferred under a lease clearly has the same content in s 62B as it did in the Trade Practices Act.

In relation to misleading and deceptive conduct, s 62D states: ‘A party to a retail shop lease must not, in connection with the lease, engage in conduct that is misleading or deceptive to another party to the lease or that is likely to mislead or deceive another party to the lease.’ The substantive words of this provision are identical to those in s 52(1) of the Trade Practices Act (now s 18 of the CCA). Again, it would appear that the judicial precedents under the Commonwealth provision would be directly applicable to the Retail Leases Act.

Controls on security bonds [24.7] By a 2005 legislative amendment, there are now strict controls imposed on both parties where the lease requires the tenant to pay a security bond on entering into the rented premises as guarantee for the performance of the tenant’s obligations. These new provisions replace the less strict and comprehensive measures contained in s 47, which has been repealed. The relevant provisions are contained in Pt 2A of the Act, comprising ss 16A– 16ZC. The parties are prohibited from contracting out of the legislation: s 16C(7). Section 16C requires the landlord to deposit with the Director-General of the Department of State and Regional Development any new security bond within 20 business days after receiving the bond from the tenant. Existing security bonds must also be deposited with the Director-General, together with any interest or similar payments, less any deductions by way of fees or charges imposed by a deposit-taking institution: s 16D. The landlord must provide a receipt for any bond paid by [page 872] or on behalf of the tenant at the time of the payment: s 16O. The bond is paid into the Retail Leases Security Bonds Trust Account, established under s 16U. Any interest earned on the deposit is paid into the Retail Leases Security Bonds Interest Account, established under s 16V. Applications for payment

out of these accounts may be made jointly by agreement between the parties, or on application by either the landlord or the tenant: ss 16G, 16H. Pursuant to these sections, where an application is made by only one party, the Director-General notifies the other party in writing of the receipt of the application. The other party is given 14 days after service of the notice to commence proceedings in relation to the money in the notice. If no such proceedings are commenced within the prescribed period, or if any proceedings are discontinued, the Director-General will pay out the money to the applicant. Otherwise, the deposit and associated interest are paid out according to judicial or Civil and Administrative Tribunal determination: s 16I. Note that the tenant may offer to provide the landlord with a guarantee from an authorised deposit-taking institution as an alternative to providing a security bond. The landlord is not entitled in these circumstances to unreasonably refuse to accept such a guarantee: s 16B. Where the landlord demands a security bond from a tenant, the landlord is not limited to the value of the bond when seeking compensation. In NLS Pty Ltd v Hughes (1966) 120 CLR 583 Barwick CJ stated (at 589) that a clause requiring the payment of a security was neither a pre-estimate of damage nor a penalty, but rather ‘an earnest of performance which, on default, may be retained and credited against the damage suffered’. The High Court thus held that a landlord then could claim more by way of compensation than the amount of the security bond where the tenant breached a covenant.

Other duties [24.8] Unlike the Residential Tenancies Act 2010 (NSW), the Retail Leases Act is not designed to codify landlord–tenant law in respect of those premises subject to the Act. Accordingly, except to the extent to which the Act covers the field, the rights and duties of both parties established at common law remain in existence. The most important of these are: on the part of the landlord, the duty to allow the removal of fixtures in certain circumstances (see [10.5]), and the implied condition of fitness for habitation at the commencement of a lease (see [8.5]); and on the part of the tenant, not to

commit waste (see [10.3]), to use and deliver up the premises in a tenant-like manner (see [8.6]), and to deliver up possession of the premises at the expiration of the term: see [8.8]. In addition, the general common law rule applies that a covenant will be implied wherever it is necessary to give ‘business efficacy’ to the contract: Liverpool City Council v Irwin [1977] AC 239 at 258; Karaggianis v Malltown Pty Ltd [page 873] (1979) 21 SASR 381 at 392; Dikstein v Kanevsky [1947] VLR 216 at 221; Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P&CR 10; Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493; see further [8.1]. The only modifications to this list of applicable common law rights and duties is in respect of the limitation of the landlord’s covenant of quiet enjoyment and duty not to derogate from the grant in circumstances falling within the scope of s 34(1)(a)–(d): see [24.14].

Right to at least five years’ tenancy [24.9] Section 16 creates a basic right for retail tenants in most circumstances to be granted a minimum period of tenancy of five years. The purpose of this is to enable the tenant to benefit from the goodwill established in respect of the business. The operative provision is s 16(1), which states: The term for which a retail shop lease is entered into, together with any further term or terms provided for by any agreement or option for the acquisition by the lessee of a further term as an extension or renewal of the lease, must not be less than 5 years. An agreement or option is not taken into account if it was entered into or conferred after the lease was entered into. Section 16(2) states that, in the case of leases which contravene this section, the lease is still valid but the term of the lease is extended by such period as may be necessary to prevent the lease contravening the section. An illustration of the operation of this subsection would be a lease for a term of two years

with an option to renew for a further period of two years. In this case the initial term of the lease would be extended to three years in order that the period of the term and the option combined amounted to five years. Three exceptions to the five-year term are specified in the legislation: (a)

where any extension to the term of the lease would be inconsistent with the term of any head lease under which the landlord holds the retail shop: s 16(5); (b) where the lease is a renewal of an earlier lease pursuant to an option conferred on the tenant: s 16(4); and (c) where a lawyer or licensed conveyancer, not acting for the landlord, certifies in writing that he or she has, at the request of the prospective lessee, explained the effect of subsections (1) and (2) to the prospective lessee and that the giving of the certificate will result in this section not applying to the lease: s 16(3). Section 16(3) would appear to open the door in practice to widespread avoidance of the application of the minimum fiveyear term. The meaning of ‘inconsistency’ in s 16(5) was considered in Conoid Pty Ltd v International Theme Park Ltd [2000] NSWCA 189. Meagher JA accepted the argument (at [9]) that two powers (or rights or obligations) would be ‘inconsistent’ if they were radically different even it were possible that they could co-exist. The court held that [page 874] there would be inconsistency in a case where the result of the application of s 16, on the facts of the case extending a sublease from approximately 15 months to a term of five years, would be inconsistent with the terms of the head lease. Where a lease is extended pursuant to s 16, the extension must be registered under the Real Property Act 1900 before it will take effect: s 81(1); Chetcuti v Scarf [2000] NSWSC 637. In this regard the landlord is bound on request by

the tenant to execute a lease or a variation of a lease in the approved form for the purposes of the Real Property Act so as to enable registration to occur: s 81(3). Section 16 was effectively repealed from 1 July 2017. The replacement s 16 requires that a lessor of a retail shop lease for a term of more than three years (or where the parties agree that a retail shop lease is to be registered, irrespective of its term) must lodge the lease for registration within three months after the lease is returned following execution by the lessee.

Rent review [24.10] Section 18 provides for restrictions on the adjustment of base rent. ‘Base rent’ is defined in s 18(1) as ‘rent, or that component of rent, which comprises a specified amount of money (whether or not there is provision for the amount to change)’. Section 18(2) states: A retail shop lease must not provide for a change to base rent less than 12 months after the lease is entered into and must not provide for a change to that rent less than 12 months after any previous change to that rent. This subsection does not apply to a change to base rent by a specified amount or specified percentage. As stated by the Explanatory Note to the subsection, although s 18(2) prevents a lease providing for an increase to current rent more than once in 12 months, it does not prevent a lease providing for the rent to increase by a fixed amount every few months. In addition, it does not prohibit a term in the lease that the rent be increased to current market rent after 12 months and then to be increased by a certain percentage at fixed regular intervals thereafter. If the lease provides for the base rent to be changed in a manner which has the potential to cause the rent to decrease (for example, a provision that the rent change to current market rent), such a provision is void to the extent that it prevents or enables the landlord or any other person to prevent the rent from decreasing: s 18(4). A lease that provides for rent to be charged at current market rent was, until

1 July 2017, controlled by ss 19, 31 and 32. ‘Current market rent’ is defined in s 31(a) as: … the rent that would reasonably be expected to be paid for the shop, as between a willing lessor and a willing lessee in an arm’s length transaction (where the parties are [page 875] each acting knowledgeably, prudently and without compulsion), determined on an effective rent basis, having regard to the following matters: (i) the provisions of the lease, (ii) the rent that would reasonably be expected to be paid for the shop if it were unoccupied and offered for renting for the same or a substantially similar use to which the shop may be put under the lease, (iii) the gross rent, less the lessor’s outgoings payable by the lessee, (iv) rent concessions and other benefits that are frequently or generally offered to prospective lessees of unoccupied retail shops. In Perri v Exego Pty Ltd [2009] NSWADT 170 the tribunal decided that the current market determination was not a valuation under s 19 because the valuer had applied the definition of market rent provided by the Australian Property Institute and not the criteria in s 19. In Richardson v Lockevo Pty Ltd [2010] NSWADT 305, the valuation was held to be ineffective because the matters to which the valuer had considered were not specified and there were no detailed reasons for the determination. ‘Current market rent’ excludes the value of goodwill created by the tenant’s occupation and the value of the tenant’s fixtures and fittings: s 31(a). Section 19 was repealed effective 1 July 2017. The provisions relating to review of current market rental (whether during an existing lease, or in relation to the extension of a lease) have been incorporated in ss 31 and 32A. Any dispute as to the amount of current market rent is to be determined by

a specialist retail valuer appointed by agreement of the parties, or failing agreement, by the Registrar: s 31(b). Either party may apply to the tribunal for the appointment of two specialist retail valuers to conduct a review of the determination of the current market rent by a valuer made under s 32A(1). This application for a review must be made within 21 days after the party first received a copy of the determination: s 32A(2). Where this occurs, the joint decision of the specialist retail valuers is final and binding: s 32A(11). The tribunal’s powers are limited to ordering the decision to be set aside only in the case where the tribunal is satisfied that the valuers have manifestly made a fundamental error warranting such an order: s 32A(12). Where a retail shop lease contains an option to renew or extend the lease at current market rent, the tenant is given the opportunity to have the current market rent determined early. By s 32(1)(a), except where the parties have already agreed as to the actual amount of the current market rent, within three to six months before the last day on which the option may be exercised under the lease, the tenant is entitled to request in writing a determination of the rent. Where such a request is made, the period within which the option may be exercised is varied so that the last day on which the option may be exercised is 21 days after the determination of rent is made and notified to the tenant or the last day of the lease, whichever is the earlier: [page 876] s 32(1)(c). An exception applies to leases of 12 months or less. In this case the request by the tenant for early determination of the current market rent must be made within 30 days to three months before the last day on which the option may be exercised under the lease: s 32(2).

Rent based on turnover [24.11] The Act permits the determination of rent by turnover, but provides certain statutory controls. The relevant legislation is contained in s 20.

‘Turnover’ is not defined in the Act, although by s 20(4) it is stated to include ‘gross takings, gross receipts, gross income and similar concepts’. This is consistent with the definition of ‘turnover’ by McNair J in Aris-Bainbridge v Turner Manufacturing Co Ltd [1951] 1 KB 563 at 564, that the term ‘must be taken to include all sums received and receivable in the year as the result of … trading, whether normal or abnormal’. The Act by s 20(1) declares that a number of charges and payments do not constitute ‘turnover’. The most important of these are: (i) refunds on the return of merchandise; (ii) refunds given where a lay-by, hire purchase or credit sale is cancelled; (iii) delivery charges; (iv) the price of merchandise returned to shippers, wholesalers or manufacturers; (v) uncollected credit accounts that are written off; (vi) discounts allowed to customers in the normal course of business; and (vii) losses incurred in the resale or disposal of merchandise purchased from customers as trade-ins in the usual course of business; (viii) the amount paid or payable by the tenant as GST; and (ix) with some exceptions, revenue from online transactions. Section 20(1) does not include ‘any other matter which the landlord and the tenant agree does not form turnover’. It is submitted, however, that this omission is of no consequence, as the legislation leaves it open for the parties to agree to include any matter within the list of matters which do not constitute turnover, provided that it is not inconsistent with the terms of s 20(1). The purpose of s 20(1) is to ensure that the turnover figures used for the rent calculation accurately reflect the true financial position of the tenant, and to prevent the fixing of an artificially high rent by taking into account matters which the legislature has determined do not constitute genuine receipts and profits. Where a valid rent turnover clause is in operation, there is an implied term

in the lease for any underpayment or overpayment of rent resulting from actual turnover differing from projected or presumed turnover to be adjusted within one month after the tenant requests such an adjustment and provides the necessary information [page 877] to the landlord: s 20(2). Unless both parties agree to more frequent adjustments, such a request may only be made once in the first year of the lease term and thereafter no more than once annually: s 20(3).

Rent and other payments [24.12] Where under the terms of a lease the landlord has an obligation to fit out the premises, pursuant to s 17(2)(a) the tenant is relieved of his or her obligation to pay rent until such time as the landlord has substantially complied with the fitout obligations. The landlord is not able to deny the tenant possession of the retail shop merely because the landlord has not complied with the fitout obligations: s 17(2)(b). A landlord is permitted to include a provision in the lease of a retail shop providing for the payment of a special rent (in addition to any other rent) to recoup the cost of any fitout provided by the landlord at the landlord’s expense: s 21. A provision in a lease requiring the tenant to pay any amount in respect of capital costs of the building in which the shop is located or any building in the retail shopping centre is void: s 23. Any provision requiring the tenant to pay for depreciation, for interest and charges incurred by the landlord on borrowings, or for rent and other costs associated with unrelated land is similarly void: ss 24, 24A, 24B. Conversely, a retail shop lease may include a provision for the tenant to contribute to a sinking fund to cover the landlord’s outgoings in respect of major items of repair or maintenance: s 25. However, this section stipulates certain rules as to the use of this money by the landlord in order to prevent abuse by the landlord: among other things, the money must be paid into an interest-bearing account, and all amounts in the account

must only be applied for the purposes for which the sinking fund was established: s 25(b)–(c). Pursuant to s 25A, the landlord must not establish more than one sinking fund at any one time in respect of retail shop leases for retail shops situated in the same building or retail shopping centre, and the landlord must not require or accept contributions to the sinking fund in respect of any retail shop in a retail shopping centre that total an amount exceeding five per cent of the total of the landlord’s estimated outgoings for the year in respect of the retail shopping centre. Outgoings to which the tenant is required to contribute are controlled by ss 27–30. Section 12A provides that a lessee is not required to pay outgoings which were not disclosed in the lessor’s disclosure statement. Where the disclosure is provided by way of an estimate, the lessee’s liability is limited to the estimate if there ‘was no reasonable basis for the estimate’: s 12A(2)(a). The lessee is entitled to recover from the lessor any amount paid which it was not obliged to pay by reason of s 12A: s 12A(4). The landlord is required to give the tenant a written estimate of the outgoings to which the tenant must contribute, itemised as in the form of disclosure statement prescribed by s 11 and Sch 2: s 27(a). This estimate must be provided before the lease is entered [page 878] into and throughout the lease at least one month before the commencement of each accounting period: s 27(b). In addition, the landlord is required to give the tenant a written outgoings statement detailing all expenditures by the landlord on account of outgoings to which the tenant contributes: s 28(a). If the shop is in a retail shopping centre, the outgoings statement must include a statement of the current gross lettable area of the shopping centre and details of any material change in that gross lettable area during the period to which the outgoings statement relates: s 28(b). The outgoings statement must be accompanied by an auditor’s report on the statement provided by a registered company auditor: s 28(e). By s 28A, if the landlord fails to comply with his obligations under s 27 or s 28, the tenant is entitled to withhold payment of contributions for outgoings until 28 days after the landlord provides the required information.

Section 29 provides for periodic adjustment between the parties to take account of any underpayment or overpayment in respect of the outgoings under the lease: s 29(a). Contributions by the tenant, and expenditure by the landlord, in respect of repairs and maintenance is not to be taken into account for the purposes of adjustment under s 29 to the extent that the contribution relates to payment into a sinking fund under s 25: s 29(c). In respect of retail shopping centres, tenants are not liable to contribute towards a non-specific outgoing of the landlord (defined as an outgoing not specifically referable to any particular shop in the centre) in excess of ‘an amount calculated by multiplying the total amount of that outgoing by the ratio of the lettable area of the shop to the total of the lettable areas of all the retail shops to which the outgoing is referable’: s 30(1). An outgoing is ‘referable’ to premises if the premises enjoy or share the benefit resulting from the outgoing: s 30(2). The purpose of s 30 is to prevent landlords requiring tenants to make up for any deficit in the total of tenants’ outgoings as a result of one or more shops in the centre being vacant.

Implied terms [24.13] The Act contains in ss 33–36 a number of implied terms of general application to retail shop leases. In addition, a number of other implied terms, which are limited in their application to retail shopping centres, are created in ss 34A and 53–61.

Implied terms of general application [24.14] Section 33 imposes a requirement on landlords to give notice to tenants of any proposed alterations or refurbishment of the building of which the retail shop forms part, where such work is likely to adversely affect the business of the tenant. Before such work can occur, the landlord is obliged to give the tenant at least two [page 879]

months’ notice in writing. The only exception is where there is an emergency; in these circumstances the landlord is obliged to give the tenant the maximum period of notice that is reasonably practicable in the circumstances. Section 34(1) contains a number of implied obligations on the landlord, the breach of which will entitle the tenant to reasonable compensation for any consequential loss or damage, if the matter is not rectified as soon as reasonably practicable after the receipt by the landlord of written notice from the tenant requesting him or her to do so. The obligations are: (a) (b) (c)

(d)

(e) (f)

not to inhibit the tenant’s access to the shop in any substantial manner; not to take any action that would substantially inhibit or alter the flow of customers to the shop; not to unreasonably take any action that causes significant disruption of, or has a significant adverse effect on, trading in the shop (in determining this matter, due consideration must be given to whether the landlord has acted in accordance with ‘recognised shopping centre management practices’: s 34(2)); to take all reasonable steps to prevent or stop anything within his or her control that causes significant disruption of, or which has a significant adverse effect on, trading in the shop (interpreted in Kindful (Australia) Pty Ltd v Country Villa Holdings Pty Ltd [2006] NSWADT 224; applied in Daverich Pty Ltd v Daverich Pty Ltd [2005] NSWADT 54); to rectify any breakdown of plant or equipment under his or her care or maintenance; and in the case of a shop within a retail shopping centre, to adequately clean, maintain or repair the retail shopping centre, including common areas.

The only exceptions are in an emergency (s 34(4)(a)), where the landlord is under a duty to take action as a result of a requirement imposed by a public or local authority (s 34(4)(b)), or where the lease contains a provision limiting a claim after the likelihood of the occurrence of the problem was specifically

drawn to the tenant’s attention in writing before the lease was entered into (s 34(3)). The obligations contained in paras (a)–(d) deal with matters which in certain circumstances might otherwise fall within the common law principle of non-derogation from grant (see [8.4]) or the landlord’s implied covenant of quiet enjoyment (see [13.15]), and the application of these common law principles would seem to have been impliedly repealed to the extent to which they overlap with the provisions in s 34. It should be noted, however, that both the covenant of quiet enjoyment and the principle of non-derogation from grant are much broader than the terms of s 34(1)(a)–(d) and would apply in circumstances outside the scope of the statutory provisions: see [24.8]. This was implicitly accepted in the context of quiet enjoyment in Kindful (Australia) Pty Ltd v Country Villa Holdings Pty Ltd [2006] NSWADT 224. [page 880] If a retail shop lease provides for the termination of a lease on the grounds of a proposed demolition of the building containing the retail shop, there is an implied term that the landlord cannot terminate the lease on that ground unless he or she first provides the tenant with details of the proposed demolition sufficient to indicate a genuine proposal to demolish the building within a reasonably practicable time after the termination of the lease: s 35(1). In these circumstances, the landlord must give the tenant at least six months’ notice of termination, unless the lease term is for 12 months or less, in which case only three months’ notice is required: s 35(1)(b), (2). Where the landlord serves a notice under s 35, the tenant may at any time give seven days’ notice of termination to the landlord: s 35(1)(c). A proposal does not lose the character of a ‘genuine proposal’ because the commercial motivation of the lessor is to attract a tenant or particular kind of tenant: see Skiwing Pty Ltd v Trust Company of Australia [2006] NSWCA 276 at [21]–[22]. Section 35(4) defines ‘demolition’ as including ‘any substantial repair, renovation or reconstruction of the building that cannot be carried out practicably without vacant possession of the shop’. This definition appears to be significantly broader than the meaning of ‘demolition’ in everyday use. Section 35(4) was

interpreted extensively by Bryson J in Blackler v Felpure Pty Ltd (1999) 9 BPR 17,259; [1999] NSWSC 958; see also Skiwing Pty Ltd v Trust Company of Australia. For the meaning of ‘substantial’, see Dainford Ltd v Lam (1985) 3 NSWLR 255 at 268 and Wong v Silkfield Pty Ltd [1999] HCA 48 at [27]. ‘Vacant possession’ means vacant physical possession, and legal entitlement to possession is of no significance: Blackler v Felpure Pty Ltd [1999] NSWSC 958 at [42]. Section 36 deals with damaged premises. It states that in case of damage to the shop or the building containing the shop, the tenant’s liability to pay rent is suspended for the period during which the shop cannot be used or is inaccessible due to the damage; where the shop is still useable but its useability is diminished due to the damage, the tenant’s liability for rent is reduced in proportion to the reduction in useability. On its wording, this provision appears to be applicable regardless of the cause of the damage, and applies even if the damage was due to the tenant or the tenant’s invitees. Note, however, that the Administrative Decisions Tribunal has held that the section cannot be used to subvert the well established principle of law that no one should profit from their own wrongdoing: Wu v Hawsher [2002] NSWADT 54 at [42]; Gu v Gold Valley Investments Pty Ltd [2005] NSWADT 169 at [42]. The section is of much broader application than the common law doctrine of frustration: see [6.10].

Implied terms in relation to retail shopping centres [24.15] Sections 53–56 concern advertising and promotion costs in respect of retail shopping centres. Where the lease requires the tenant to pay any amount to the landlord in respect of advertising and promotion costs, the landlord must make available to the tenant within one month before the start of each accounting period [page 881] a marketing plan that gives details of the landlord’s proposed expenditure during each accounting period: s 53. Every six months the landlord must

make available to the tenant a written advertising and promotion expenditure statement in respect of those costs to which the tenant is required to contribute under the lease, together with an auditor’s report: ss 54, 55. A breach by the landlord of ss 53, 54 or 55 entitles the tenant to withhold payment of contributions in respect of advertising or promotion costs of the landlord until 28 days after the necessary information is furnished by the landlord: s 55A. Any amount contributed by a tenant which is not spent for the purpose for which it was contributed must be carried forward and applied by the landlord towards future expenditure on advertising or promotion of the retail shopping centre: s 56. Section 34A contains a provision protecting the tenant in cases where a retail shop lease contains a provision that enables the tenant’s business to be relocated. In this situation, the lease is taken to contain an implied term that the tenant’s business cannot be required to be relocated unless and until the landlord has provided the tenant with details of the proposed refurbishment, redevelopment or extension sufficient to indicate a genuine proposal that is to be carried out within a reasonably practicable time after the relocation and that cannot be carried out practicably without vacant possession of the tenant’s shop: s 34A(a). The landlord cannot require the tenant’s business to be relocated unless the landlord has given the tenant a three-month relocation notice that gives details of an alternative shop to be made available to the tenant within the retail shopping centre: s 34A(b). The tenant must be offered the alternative shop on no less favourable terms than those contained in the existing lease: s 34A(c). Where relocation occurs, the tenant is entitled to payment by the landlord of the tenant’s reasonable costs of relocation: s 34A(f). Section 34A was interpreted extensively in Skiwing Pty Ltd v Trust Company of Australia [2006] NSWCA 276. Section 61 contains provisions relating to trading hours in retail shopping centres. Pursuant to s 61(1), a retail shop lease contains an implied term that a landlord is not entitled to change the core trading hours (defined in s 61(4)) of the centre of which the shop forms part except with the written approval of the tenants of a majority of the shops within the centre. This statutory requirement for a simple majority is in reality a minimum requirement. If there is any other agreement between the parties as to the requirements for a change to core trading hours, this will take precedence: s 61(2).

Prohibited terms [24.16] As in the case of implied terms (see [24.13]), the Act contains a number of prohibited terms which apply to all types of retail shop leases, and others which apply only to retail shopping centres. In most cases a breach of a prohibited term is an offence punishable by a maximum specified monetary penalty, and is dealt with summarily before a local court constituted by a single magistrate: s 84. [page 882] From the standpoint of the protection of the tenant, the most significant prohibited terms of general application relate to the prohibition of key money: see [24.5]. Section 48 prohibits the landlord from requiring a tenant or prospective tenant under a retail shop lease to use the services of a lawyer or licensed conveyancer nominated by the landlord. In this case the penalty for a breach is that the landlord is bound to reimburse the tenant for the amount of fees paid to the lawyer by the tenant, and any certificate provided pursuant to s 16 is invalid. Section 37 prohibits the inclusion of any provision in a lease which has the effect of limiting the tenant’s right to employ persons of his or her own choosing. The landlord is permitted, however, to specify in the lease minimum standards of competence and behaviour for persons working in the shop, may prohibit work from being carried out on specified items of the landlord’s property, and may require the tenant to comply with the requirements of any industrial award, industrial agreement or enterprise agreement (such as a construction site agreement) affecting any retail shopping centre in which the shop is situated. In relation to prohibited terms specific to retail shopping centres, perhaps the most important provision is s 58, which prevents the landlord terminating a lease for inadequate sales: see [24.19]. A tenant cannot be prevented from carrying on a business outside the retail shopping centre, although the tenant can be restrained from using the name of the shopping centre in connection with any outside business activity: s 59. Section 50 makes it an offence, punishable by a maximum penalty of 20 penalty units, for a landlord to

divulge any information as to the turnover of the tenant’s business to any person except with the tenant’s consent or in other specified limited circumstances. A lease must not contain a provision which has the effect of preventing or restricting the tenant from joining, forming or taking part in the activities of any tenants’ association or other similar body: s 60.

Void terms [24.17] In addition to those provisions referred to in [24.12], a number of provisions in a retail shop lease are declared by the Act to be void. In many cases these provisions simply clarify under the legislation terms that would in any event have been void at common law. Breach of any of these provisions is not an offence. A provision that requires the tenant to pay or contribute towards the cost of any finishes, fixtures (see [10.5]), fittings, equipment or services is void unless the liability to make the payment or contribution was disclosed in a disclosure statement: s 12. For a consideration of ‘services’ in this context, see Skiwing Pty Ltd v Trust Company of Australia Ltd [2005] NSWADT 188. A provision requiring the tenant to refurbish or refit the shop is void unless it gives such details of the required work necessary to indicate generally the nature, extent and timing of the required work: s 38. This latter provision would probably have been void at common law under the contractual [page 883] principle of voidness for uncertainty: see [1.5]. A provision is void to the extent that it would operate to require the tenant to trade at a time when trading would be unlawful: s 46. This would appear to be void under the contractual principle of illegality: see [6.9]. A provision limited to retail shopping centres is s 52, which declares void any provision which requires the tenant to undertake any advertising or promotion of the tenant’s business. The section expressly excludes, however, a provision that requires the reimbursement by the tenant to the landlord for

advertising and promotion costs incurred by the landlord. The explanatory note to s 52 states that it is good leasing practice for a landlord to require all tenants in the shopping centre to contribute towards advertising and promotion costs for the centre.

Assignments and subleases [24.18] The existing common law rules regarding the tenant’s right to assign and sublet have been replaced by the new statutory provisions in ss 39– 42. In addition, s 133B of the Conveyancing Act 1919 — which states that in every covenant prohibiting assignment without the consent of the landlord, the covenant shall be deemed to include a proviso that consent not be withheld unreasonably — does not apply to a retail shop lease to the extent that the section is inconsistent with the Retail Leases Act: s 43. Note that subleases are treated less favourably from the tenant’s standpoint. Section 42 states that a retail shop lease may contain a provision which allows a landlord in his or her absolute discretion to refuse to consent to the grant of a sublease, licence or concession in respect of the shop. In the absence of such a provision prohibiting a sublease, a tenant has the power to grant a sublease: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 62 WN (NSW) 240; Booton v Clayton (1948) 65 WN (NSW) 164; Fink v McIntosh [1946] VLR 290. An assignment or sublease made in breach of ss 39–42, or the common law, is nevertheless effective to pass the interest, the landlord’s right being in an appropriate case to determine the lease by forfeiture: Massart v Blight (1951) 82 CLR 423; Morison v Hale [1923] VLR 93; Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11; JDM Investments Pty Ltd v Todbern Pty Ltd [2000] NSWSC 349; Old Grovebury Manor Farm Ltd v W Seymour Plant Sales & Hire Ltd (No 2) [1979] 1 WLR 1397: see [15.5]. Section 39 restricts the grounds on which the landlord may withhold consent to an assignment of a retail shop lease to the following: (a)

where the proposed assignee proposes to change the use to which the shop is put; (b) where the proposed assignee has financial resources or retailing

skills inferior to those of the tenant (see Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2007] NSWSC 1375, where Palmer J concluded, at [42], that a comparison of retailing skills does not require that the businesses of the assignor and the assignee [page 884] be identical, but they must be similar enough to permit ready comparison of the retailing skills involved); and (c) where the tenant has not complied with the procedure in s 41 for obtaining the landlord’s consent to assignment. Section 80E adds a further limited exception from s 39 in respect of airside premises at Sydney (Kingsford-Smith) Airport, where the proposed assignee has inferior skills for competing in the international airport retail market. Section 41 requires, inter alia, that the request for the landlord’s consent must be in writing, and the tenant must provide the landlord with all reasonable information concerning the financial standing and business experience of the proposed assignee. Pursuant to s 41(d), the landlord must deal expeditiously with any such request for consent, and is deemed to have consented if he or she does not respond to the request within 28 days. The lessee must provide the proposed assignee with an updated lessor’s disclosure statement: s 41(c). Where this subsection is breached, liability for damages may arise in an appropriate case: Zaoud v Musico [2001] NSWADT 58. For a comprehensive consideration of the application of s 41, see Indian Taj v Gilany [2004] NSWSC 1249. A landlord may not require key money for the giving of consent (s 40, discussed in [24.5]), but by s 39(2) the landlord may require payment of any reasonable sum in respect of legal or other expenses incurred in connection with the consent, provided that such expenses are substantiated.

Termination of lease

[24.19] The Act does not seek to codify the law relating to termination of leases. Thus, the basic common law rules as to termination of leases (as amended by the Conveyancing Act 1919) will continue to apply to retail shop leases to the extent to which there is no contradictory provision in the Retail Leases Act. The major change made by the Act regarding termination of leases is that a fixed-term tenancy will no longer automatically terminate at the expiration of the term. By s 44(1), not less than six months and not more than 12 months before the expiry of a lease, the landlord must either offer the tenant a renewal or extension of the lease on specified terms or inform the tenant that he or she does not propose to renew or extend the lease. Any offer to renew or extend the lease cannot be revoked for one month after it is made: s 44(2). If the landlord fails to give the requisite notification under s 44(1) the lease is automatically extended until six months after the landlord finally gives the notification, provided that the tenant requests the extension before the lease would otherwise have expired: s 44(3). This section does not apply where the lease contains an option to renew or extend the lease or is the subject of an agreement for the renewal or extension of the lease: s 44(5). [page 885] Where the shop or building of which the shop forms part is damaged, if the landlord notifies the tenant that the landlord considers that the damage is such that repair is impracticable or undesirable, either party may give the other seven days’ written notice of termination: s 36(1)(c). In other circumstances of damage, if the landlord fails to repair the damage within a reasonable time after the tenant requests the landlord to do so, the tenant may give the landlord seven days’ notice of termination: s 36(1)(d). The effect of this latter provision is to impose an obligation on the landlord to repair any damage which arises, even damage caused by the tenant. The position of the landlord is safeguarded in that s 36(1)(e) preserves the right of the landlord to recover damages from the tenant in respect of any damage or destruction. The use by the tenant of the right to terminate the tenancy under s 36(1)(d) would appear to be fraught with difficulty as there is no indication in the legislation as to the

meaning of a reasonable time; if the tenant’s notice is successfully challenged by the landlord, the tenant will be liable for all rent since the invalid notice of termination. Section 58 states that any provision in a lease that permits or otherwise provides for the termination of a lease on the ground that the tenant or the tenant’s business has failed to achieve specified sales or turnover performance is prohibited. Such a provision is not declared to be void, but would be sufficient to make the contract illegal as formed: Anderson v Daniel [1924] 1 KB 138 at 149. In this situation, the provision will be unenforceable: Re Mahmoud and Ispahani [1921] 2 KB 716; Chai Saw Yin v Liew Kwee Sam [1962] AC 304; Haddin v Le Feuvre [1969] 2 NSWR 32.

Determination of disputes [24.20] Dispute resolution procedures are contained in Pt 8 of the Act, which commenced on 25 November 1994. Unlike the remainder of the Act, which only concerns leases or options for leases entered into after 1 August 1994, Pt 8 is stated to apply to all disputes regarding retail shop leases regardless of when they were entered into: s 63(2). Part 8 thus has retrospective effect, although it appears to be uncontroversial in that it does not seek to change the parties’ substantive rights and duties. The meaning of ‘dispute’ in s 63 is very broad. The word is not limited to legal issues, such as the existence or extent of an alleged legally enforceable liability or obligation, but extends to broader questions of fairness as to how an admitted legal liability may, or should, be enforced: GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 at [16]. For a detailed discussion of ‘retail tenancy dispute’, see Taylor Farms (Australia) Pty Ltd v A Calkos Pty Ltd [1999] NSWSC 186 and Prasad v Fairfield City Council [2000] NSWADT 164. The Act places emphasis on mediation as a suitable method for resolving retail tenancy disputes. ‘Mediation’ is defined in s 67(1) as being: [page 886]

… not limited to formal mediation procedures and includes the following: (a) preliminary assistance in dispute resolution, such as the giving of advice designed to ensure that the parties are fully aware of their rights and obligations and that there is full and open communication between the parties concerning the dispute, (b) other appropriate forms of alternative dispute resolution. Section 64 creates the office of Registrar of Retail Tenancy Disputes: s 64(1). The major function of the Registrar is to make arrangements to facilitate the resolution of retail tenancy disputes by mediation: s 65(1)(a). Either the landlord or the tenant, or both, may refer a dispute to the Registrar for mediation: s 66(1). While this reference to mediation is optional, in the sense that s 66(1) uses the word ‘may’, there can be no proceedings before any court (defined in s 63(1) as including a tribunal or arbitrator) unless and until the Registrar certifies that mediation has failed to resolve the dispute or the court is satisfied that mediation is unlikely to resolve the dispute: s 68(1). Any statements made in the course of mediation are not admissible at any later court or tribunal hearing: s 69. A claim may be lodged by either party with the Consumer and Commercial Division of the Civil and Administrative Appeals Tribunal within three years after the liability or obligations that is the subject of the claim arose: s 71. The powers of the tribunal are contained in ss 72, 72A and 73. These include the powers to order, either conditionally or unconditionally, the payment of money up to $400,000, the undertaking of specified work, the performance of specified services and the power to grant relief against forfeiture. In relation to the relief against forfeiture, the power is similar to that exercised by the courts in equity: Sabri v Selby [2004] NSWADT 252; Galaxy Catering Pty Ltd v Trust Company of Australia Ltd [2006] NSWADT 182. Ancillary and interim orders may also be made: s 72(2)–(4). For factors relevant to a consideration of the exercise of the court’s or tribunal’s discretion under s 72, see Townsend v Chief Executive, State Rail Authority [1999] NSWADT 58. Proceedings may be instituted before a court, but in this case either party may apply to have the matter transferred to the tribunal: s 75(1). When considering such an application, a court is required to have regard to the

general principle that it is preferable that retail tenancy disputes should be heard by the tribunal rather than a court: s 75(2); see also GPT Management Ltd v Spa Heaven Pty Ltd [2005] NSWSC 1043 at [29]; Pascoe v Holyoake [2006] NSWSC 64 at [19]. If a retail shop lease provides for any dispute to be resolved by arbitration, either party may nevertheless lodge a claim with the Consumer and Commercial Division of the Civil and Administrative Appeals Tribunal unless all steps necessary to secure arbitration of the dispute have been taken: s 76(3). Once such a claim has been lodged with the tribunal, any provision for submission of a dispute to arbitration is of no effect in relation to the dispute: s 76(4).

[page 887]

25 Retail Tenancies Legislation: Queensland Background [25.1] The first enactment regulating retail tenancies in Queensland was the Retail Shop Leases Act 1984. This Act was passed following a report by the government-appointed Committee of Inquiry into Shopping Complex Leasing Practices (the Cooper Committee) in 1981 and a Discussion Paper on Retail Shop Leases issued in January 1983 by a Joint Parliamentary Committee. The Act was assented to on 12 March 1984 and, except for the provisions in Pts IV and V relating to dispute resolution, commenced on that date. Parts IV and V commenced on 1 July 1984. The 1984 Act was replaced by the Retail Shop Leases Act 1994 (substantially modified in 2006) and the Retail Shop Leases Regulation 2006 (hereafter referred to as the ‘Act’ and the ‘Regulation’, respectively). The new legislation is discussed in Jones, ‘The Retail Shop Leases Act 1994: A New Beginning?’ (1995) 15 Qld Lawyer 221. The stated object of the Act is to promote efficiency and equity in the conduct of certain retail businesses: s 3. The legislation is stated to apply to all retail shop leases whether entered into or renewed before or after the commencement date: s 13. The legislation applies to all retail shop leases of premises in Queensland regardless of where the lease is entered into and even

though the law purports to be governed by a law other than Queensland law: s 12. On 10 May 2016, the Act was amended by the Retail Shop Leases Amendment Act 2016. The amendments commenced on 25 November 2016 and apply prospectively. [page 888] The key changes include: the increased coverage of the Act, pre-lease disclosure, turnover statements, current market rent review, landlord’s outgoings, promotion and advertising, compensation, liability for lease costs, implied relocation and demolition, assignor and guarantor release, refurbishment and refitting, and trading hours. Impetus for further reform of the retail tenancies legislation is maintained by s 122, which requires the minister to review the operation of the Act at intervals of not more than seven years. In each case the minister must prepare a report and table a copy in the Legislative Assembly: s 122(3).

Premises subject to the Act [25.2] The Act applies to all retail shop leases of premises whether entered into or renewed before or after 28 October 1994 subject to 11 specified exceptions: s 13. Also s 14 says the Act does not apply to: (a)

a lease that becomes a retail shop after the commencement of the lease; or (b) an assignment of the lease; or (c) a renewal of the lease under an option under the lease. The purpose of this subsection is to prevent the retrospective application of the Act in circumstances where at the time of signing the lease the parties had no expectation that the Act would be relevant. The application of this provision is far from straightforward, however. In relation to para (a), the Explanatory Note gives the following example:

On 1 April 2016 a person enters into a 3-year lease for carrying on a business that is not a retail business from premises that are not in a retail shopping centre. Accordingly, the premises are not a retail shop as defined in the schedule. However, on 1 September 2016, the business is prescribed by regulation as a retail business. Under this subsection, this Act does not apply to the lease even though the premises become a retail shop on this second date. This illustration is curious as it appears to presuppose that premises are only subject to the Act if they are located in a retail shopping centre. This is, however, not the case, as shown by the definition of ‘retail shop’ in s 5B (see below). It is submitted that the Explanatory Note should be regarded as misleading and incorrect in this regard. ‘Retail shop lease’ is defined in s 5A(1) as ‘a lease of a retail shop’. Section 5A(2) says that a ‘retail shop lease’ does not include: (a) a retail shop with a floor area of more than 1000m2; (b) a retail shop within the South Bank corporation area if the lease is entered into or granted by the South Bank Corporation and is either — (i) a perpetual lease; or (ii) another lease for a term, including renewal options, of at least 100 years; [page 889] (c) premises used wholly or predominantly for the carrying on of a business by a lessee for a lessor as the lessor’s employee or agent; (d) premises in a theme or amusement park; (e) premises at a flea market, including an arts and crafts market; (f) a temporary retail stall at — (i) an agricultural or trade show; or (ii) a carnival, festival or cultural event;

(g) premises that, if the premises were not leased, would be premises within a common area of a retail shopping centre, but only if the premises are used for 1 or more of the following — (i) an information, entertainment, community or leisure facility; (ii) telecommunication equipment; (iii) an automatic teller machine; (iv) a vending machine; (v) an advertisement display; (vi) storage; (vii) parking. Section 5A(3) says a retail shop lease does not include a lease of premises located in a retail shopping centre if — (a)

the premises are not used wholly or predominantly for carrying on a retail business; and (b) at the time the lease is entered into, either — (i) if the premises are located on a level of a multi-level building — the retail area of the level is 25% or less of the total lettable area of the level; or (ii) if the premises are located in a single level building — the retail area of the building is 25% or less of the total lettable area of the building. This definition must be read together with the following definition of ‘lease’ in s 5 and the Schedule: … an agreement under which a person gives or agrees to give to someone else for valuable consideration a right to occupy premises whether or not the right is — (a) an exclusive right to occupy the premises; or (b) for a term or by way of a periodic tenancy or tenancy at will. This definition is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries. At common law, it is

essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] WASCA 317; [page 890] Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If an occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For the nature of a licence, see Chapter 3. In contrast, an occupant will come within the scope of the Act by virtue of the definition of ‘retail shop lease’ regardless of whether his or her right of occupation is regarded as exclusive. Note that short-term leases are not excluded from the definition of ‘lease’. To fall within the scope of the Act the premises must also constitute a ‘retail shop’. ‘Retail’ is not defined in the Act. At common law, the natural meaning of ‘retail’ has been said to involve ‘sale and delivery’, although on occasion a retailer may enter into executory contracts to sell: Wright v Edwards [1961] SASR 267 at 282. The traditional distinctions between retail and wholesale trading are well established in case law: Provident Life Assurance Co Ltd v Official Assignee [1963] NZLR 961 at 965; Plummer & Adams v Needham (1954) 56 WALR 1 at 15. ‘Retail’ necessarily involves the notion of sale to members of the public: Bateman Television Ltd v Coleridge Finance Co Ltd [1969] NZLR 794 at 815. In Collector of Customs v Chemark Services Pty Ltd (1993) 114 ALR 531, imported herbicide sold in 250 kg drums to professional horticulturists was held by the Full Court of the Federal Court to be a ‘retail sale’, notwithstanding the fact that the sale was not to ordinary members of the public, and the fact that the sales were not of a commodity in small quantities. The Full Court added that ‘retail sale’ must be construed in the context of the legislation under consideration. The decision of Von Doussa J in Electricity Trust of South Australia v Krone (Australia) Technique Pty Ltd (1994) 123 ALR 202 is to similar effect. ‘Retail shop’ is defined in s 5B of the Amendment Act and the Schedule as meaning:

… premises that are — (a) situated in a retail shopping centre; or (b) used wholly or predominantly for the carrying on of a retail business. ‘Retail business’ means a business prescribed by regulation as a retail business: s 5C of the Amendment Act and Schedule. Regulation 8 of the Retail Shop Leases Regulation 2016 says: (1) For section 5C of the Act, a business is a retail business if — (a) it is a business mentioned in schedule 1; or (b) its whole or predominant activity is, or is a combination of, the sale, hire or supply of goods or services mentioned in schedule 1. (2) The wholesale sale of goods is not a retail business. The Schedule to the Regulation lists a total of 283 retail businesses. The noteworthy feature of the list is that it conforms with the notion that ‘retail’ necessarily involves the notion of sale to members of the public. The list in the Schedule to the Regulation includes many conventional service establishments, such as restaurants and cafeterias, but excludes all professional and public services, such as solicitors’ and accountants’ offices, doctors’ and dentists’ surgeries, government services and Australia Post. In each case the [page 891] business must have as its whole or predominant activity the sale, hire or supply of goods or services mentioned in the Schedule before it falls within the scope of the Act: reg 8(1). Pursuant to para (a) of the exception to the definition of ‘retail shop lease’ (s 5A(2)), large retail shops — that is, those with a floor area of more than 1000 square metres — are excluded from the legislation. There are no reported decisions in Queensland as to the interpretation of ‘floor area’, but there are relevant authorities in Victoria and elsewhere. The word ‘floor’ does not make it clear whether open, unbuilt space areas, such as car parks, are to be included

within the calculation of the total area. The natural meaning of the word ‘floor’ would appear to presuppose a closed building. Prior to the introduction of the retail tenancies legislation, this interpretation was supported by a dictum of Lord Kissen in Sullivan v Hall Russell & Co Ltd [1964] SLT 192 at 193 that ‘the normal and ordinary meaning of a floor is the lower surface of an enclosed space, such as a room or similar space’. This dictum was cited with approval by Samuels JA in Leichhardt Municipal Council v Daniel Callaghan Pty Ltd (1983) 46 LGRA 29 at 37. In Joad Pty Ltd v Ospies Hotel Pty Ltd [1994] V ConvR ¶54-505, Eames J took the opportunity to analyse differing viewpoints expressed as to the meaning of ‘floor area’ in the earlier decisions of Nathan J in Robert v Besford [1990] V ConvR ¶54-383, J D Phillips J in Hall v Joyworth [1993] V ConvR ¶54-461, Ashley J in F P Shine (Vic) v Gothic Lodge Pty Ltd [1993] V ConvR ¶54-472 and McDonald J in Nime Pty Ltd v Seventh Storey Pty Ltd [1993] V ConvR ¶54-491. Eames J accepted the approach adopted as to the meaning of ‘floor’ in the latter two cases. This approach rejects the notion that the ‘floor’ be either a portion of an enclosed area, or roofed over. It extends at least as far as to embrace an artificially constructed surface upon which an industry is carried on. Eames J continued (at 65,789): Parliament chose to refer to ‘floor’, a word to be distinguished from ‘premises’. The fact that neither ‘ceiling’ nor ‘walls’, nor any similar words, were adopted suggests that there was no concept of an enclosed space, or roofed area, which was of necessary relevance. In a given case the ‘floor’ may not necessarily be constructed, it may, indeed, be made of earth. If the only guidance which may be gained from the parliamentary debates is that we are concerned with small retail business leases then it seems to me thatwe are concerned to identify surfaces over which, and upon which, the trader conducts his or her daily business and which have relevance to the actual day to day operation of the business. It is therefore necessary to have regard not only to the nature of the surface itself, … but also to relate that surface to the nature of the business and the usage, real or potential, of that surface in the conduct of the enterprise. In other words, a surface which would not be appropriately described as a ‘floor’ in the context of one business, may be so in another context. A large paved area may be an amenity for recreation or relaxation but otherwise play no part

in the business of a supermarket, yet to a car sales business it may be the place upon which the wares are displayed and sold. In the former case the small business would survive the loss of the amenity, in the latter, there would be no business without it. To adopt the words of Ashley J, approved as they were by McDonald J, the question is whether the surface is ‘designed and available for use in carrying on the business’. Whilst I have reservations as to the need to import the consideration of the surface being necessarily ‘designed’ for a purpose of the business, the general concept of relating the floor surface to the nature of the business, appears to me to be the appropriate approach. [page 892] For the purposes of the Queensland definition in s 5A, the ‘floor area’ of the demised premises may be said to be the sum, taken over all its levels, of their lower boundary surface areas which are used, likely to be used or capable, without substantial alteration, of being used by the trader and/or his or her actual or potential employees, agents, suppliers, or customers in activity which enables or substantially facilitates the provision of goods and/or services, such provision constituting all, or a not incidental part, of the trader’s commercial purpose in entering into the subject lease. It has been held in Victoria in Retail Tenancies Award No 9 [1994] V ConvR ¶58-518 that in the case of a strata subdivision, the common property, not being part of the leased premises, cannot be counted within the ‘floor area’. The application of the Act is significantly affected by the statutory definition of ‘lease’ in s 5 and the Schedule. The definition includes oral and written agreements to give to someone else for valuable consideration a right to occupy premises, regardless of whether the right is an exclusive right and regardless of the nature of the lease. This definition is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries. At common law, it is essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings

Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] WASCA 317; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If the occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For the nature of a licence, see Chapter 3. In contrast, an occupant will come within the scope of the Act by virtue of the definition of ‘lease’ regardless of whether his or her right of occupation is regarded as exclusive. Section 10 states: This Act binds all persons, including the State and, so far as the legislative power of the Parliament permits, the Commonwealth and the other States. Section 10 thus appears to include within the scope of the Act all leases of retail premises owned by state government departments and instrumentalities. If the state government department or instrumentality is classed as part of the Crown in right of the state, it will be subject to the Retail Shop Leases Act by virtue of s 10. If the department or instrumentality is not classed as part of the Crown in right of the state, it will be subject to the Act by virtue of s 13 (subject to the exclusions contained in the definition of ‘retail shop lease’ in s 5A and the Schedule). The Act also binds retail premises leased by Commonwealth government departments and instrumentalities based on the clear intention in s 10 that the Crown in right of the Commonwealth is to be bound: Province of Bombay v Municipal Corporation of Bombay [1947] AC 58; Bradken Consolidated Ltd v The Broken Hill Proprietary Co Ltd (1979) 145 CLR 107; [page 893] Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979) 53 ALJR 614, and the fact that the state appears to have the necessary legislative power to bind the Commonwealth: Commonwealth v Cigamatic Pty Ltd (in liq) (1962) 108 CLR 372; Commonwealth v Bogle (1953) 89 CLR 229; Federated etc Service Association v NSW Railway Traffic Employers Association (1906) 4 CLR 488.

The timing of the application of the Act is specified in ss 11 and 13. Pursuant to s 13, the Act applies to all retail shop leases regardless of when they were entered into, subject to certain specified provisions of the Act. Section 11 of the Act says that a retail shop lease is ‘entered into’: … on the earliest of the following dates — (a) the first date by which the lease is signed by all of the parties to the lease; (b) the date the lessee enters into possession of the retail shop under the lease; (c) the date the lessee first pays rent under the lease, other than as a deposit to secure the premises for the lease.

Express duties of the landlord Give the tenant a disclosure statement [25.3] The landlord is required to give the prospective tenant a disclosure statement at least seven days before entering into a retail shop lease: s 21B. As to the obligation to provide a disclosure statement where a lease is renewed under an option, see s 21E. The prescribed particulars of the disclosure statement are specified in reg 2. These include specified details of the tenancy, details as to any agreements to be entered into, details of the various payments for which the tenant will be liable, details as to trading hours, and retail shopping centre details. ‘Entered into’ is defined in s 11: see [25.2]. One remedy available to the tenant if the landlord fails to comply with s 21B is termination of the tenancy. Pursuant to s 21F, if a tenant has not been given a disclosure statement at least seven days prior to entering into a retail shop lease the tenant may give the landlord a written notice within six months after the tenant enters into the lease. Strangely, the Act does not specify the length of notice required. Under these circumstances, it is submitted that the tenant may choose the length of notice. The tenant is given an express right by s 21F(2) to terminate the lease if the disclosure statement is ‘defective’ — that is, incomplete or contains false or misleading information. The termination of a lease pursuant to s 21F(2) does not affect any pre-existing

legal rights or obligations: s 21F(6). Thus, for example, tenants will have an obligation to pay rent until such time as the notice of termination served by them under s 21F expires. Another remedy available to the tenant for breach of s 21B is the right to sue the landlord for reasonable compensation for any loss or damage suffered as a result of the landlord’s breach: s 21F(5). As in relation to the termination issue under s 21F(2), this [page 894] remedy is available where the landlord has provided a disclosure statement which is incomplete or contains false or misleading information. A prospective sublessor is also bound to provide a disclosure statement to a prospective sublessee: 7-Eleven Stores Pty Ltd v United Petroleum Pty Ltd [2010] QSC 469. A sublessor may request a disclosure statement from the lessor: s 21C. An assignor of a retail shop lease must give a prospective assignee a disclosure statement: s 22B. A lessor must also give a prospective assignee of a retail shop lease a disclosure statement: s 22C.

Give a prospective tenant copies of the lease [25.4] The landlord is effectively obliged to give the tenant two copies of a retail shop lease: a copy of the draft of the lease at least seven days prior to the prospective tenant entering into the lease (s 21B(1)) and a copy of the lease document or a certified copy of the lease document within 30 days after the retail shop lease is signed by the parties: s 22. A breach of s 21B(1) is not an offence. However, pursuant to s 21F(1), if the landlord does not give the tenant a draft copy of the lease the tenant may terminate the lease by giving written notice to the landlord within six months after entering into the lease and may sue the landlord for reasonable compensation for any loss or damage suffered because of the failure: s 21F(5). As referred to in [25.3], the termination of a lease pursuant to s 21F(1) does not affect any pre-existing legal rights or obligations: s 21F(5).

The remedy under s 21F(1) may be argued to be somewhat excessive in light of the nature of the breach. In addition, it is by no means clear as to how detailed the document must be in order to constitute a ‘draft copy’ of the lease for the purpose of s 21B(1). Must the document include, for example, the rent, the term of the lease and other commonly negotiable details in order to satisfy the legislative provision? The legislation in other jurisdictions on this point is far more precise: see, for example, [27.4].

Not to require the payment of key money or consideration for goodwill [25.5] It is an offence punishable by a maximum penalty of 100 penalty units for the landlord or an agent of the landlord to seek or accept the payment of key money or any amount for the goodwill of the tenant’s business carried on in or from the leased shop: s 39(1). Any amount so paid can be recovered as a debt: s 39(3). ‘Key money’ is defined in s 5 and the Schedule to mean: (a)

an amount to be paid to, or at the direction of, a lessor by way of a premium, nonrepayable bond or otherwise, for the granting, renewing or assigning of a lease; or (b) any benefit to be conferred on, or at the direction of a lessor for the granting, renewing or assigning of a lease. [page 895] The meaning of ‘premium’ was examined by the Full Court of the Supreme Court of Western Australia in Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110, where Malcolm CJ (at 120) defined it as ‘an amount paid in addition to rent … The paradigm case of the ordinary meaning is an amount paid by way of a capital sum over and above the market rent’. This broad construction was also preferred by Ormiston J in Burke v Gillett [1994] V ConvR ¶54-507 at 65,819, who defined ‘premium’ as ‘an amount paid, whether in cash or kind, other than by way of rent’ so as to include other payments and benefits made for the giving of consent to assignments. (Note,

however, the more limited definition given by Smith J in Burke v Gillett (at 65,832–4).) See also King v Earl Cadogan [1915] 3 KB 485; Elmdene Estates Pty Ltd v White [1960] AC 528; R v Barnet Rent Tribunal; Ex parte Millman [1950] 2 KB 506. ‘Goodwill’ is not defined in the Act. ‘[Goodwill] is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom’: IRC v Muller & Co’s Margarine Ltd [1901] AC 217 at 223. ‘The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom’: Federal Commissioner of Taxation v Williamson (1943) 67 CLR 561 at 564. It was said in Hoogerdyk v Condon (1990) 22 NSWLR 171 at 175 (per Young J): Goodwill includes every positive advantage that has been acquired in carrying out a business which would give a reasonable expectancy of preference in the face of competition … The [elements which compose goodwill] will vary from business to business. There will be local goodwill represented by the fact that people will patronise the business nearest their home or place of business. There will be personal goodwill generated by the persons who in fact carry on the business. There will be goodwill or habit brought about by customers getting into the habit of buying things at a particular outlet … It must always be remembered, however, that all these aspects of goodwill attach to a particular business and one cannot consider goodwill apart from the business. For earlier definitions of goodwill, see Daniell v Federal Commissioner of Taxation (1928) 42 CLR 296 at 302–3; Hill v Fearis [1905] 1 Ch 466 at 471; Trego v Hunt [1896] AC 7 at 17–18; Austen v Boys (1858) 2 De G & J 626 at 635–6; 44 ER 1133 at 1136; Wedderburn v Wedderburn (No 4) (1856) 22 Beav 84 at 104; 52 ER 1039 at 1047; Potter v Inland Revenue Commissioners (1854) 10 Exch 147 at 159; 156 ER 392 at 396–7. Despite the general prohibition on charges for goodwill, a landlord may claim payment from the tenant for goodwill where the tenant purchases the

landlord’s business conducted in a retail shop: s 39(2)(e). (For the meaning of ‘business’, see Walker v Valuer-General (1978) 5 QCLR 347; Hope v Bathurst City Council (1980) 54 ALJR 345; American Leaf Blending Co v Director-General of Inland Revenue [1979] AC 676 at 683–4; Commissioner of Inland Revenue v Watson [1960] NZLR 259 at 262; Abernethie v A M & J Kleiman Ltd [1970] 1 QB 10 at 20.) [page 896] Section 39 applies only to lessors and not to lessees: Roseburn Pty Ltd v Eastride Pty Ltd [2009] QSC 159. A lessee is therefore not precluded from seeking or accepting payment of an amount for the goodwill of the lessee’s business. Note that various types of costs and charges are specifically excluded by s 39(2) from the operation of s 39(1) and are deemed not to constitute ‘key money’. This subsection is discussed in [25.10].

Unconscionable conduct proscribed [25.6] Division 8A, containing ss 46A–46B, introduced controls on both parties regarding unconscionable conduct. These controls are stated only to apply to conduct that occurred on or after the commencement of the section: s 46A(4). Section 46A(1) states: ‘A lessor must not, in connection with a retail shop lease, engage in conduct that is, in all the circumstances, unconscionable.’ Section 46A(2) imposes a similarly worded obligation on the tenant. Section 46B contains a non-exhaustive list of the matters to which the tribunal may have regard for the purposes of determining whether either party has contravened the section. The most significant of these listed considerations are the following: the relative strengths of the bargaining positions of the parties; whether, as a result of conduct engaged in by one party, the other party was required to comply with conditions that were not reasonably necessary for the protection of the first party’s legitimate interests; whether each party was able

to understand any documents relating to the lease; the extent to which each party acted in good faith; the extent to which each party was willing to negotiate the terms and conditions of the lease; whether either party used undue influence or pressure or used any unfair tactics against the other party; and the requirements of any applicable industry code. Sections 46A and 46B were closely modelled on Commonwealth consumer protection legislation contained in Pt 4A of the Trade Practices Act 1974, now Pt IV of the Competition and Consumer Act 2010 (Cth). Section 51AC, now s 21 of the Australian Consumer Law is very similarly worded to s 46A(1) and (2). The only changes are word changes to replace references to ‘consumer’ and ‘corporation’ with references to ‘lessor’ and ‘lessee’, and the addition of other factors in the list of relevant considerations for the tribunal in s 46B. In light of the close modelling of s 51AC on the Trade Practices Act, it appears that the many judicial precedents under s 51AC of the Trade Practices Act, now s 21 of the Australian Consumer Law, will be applicable to the Retail Shop Leases Act. In addition, because of the similarity between the unconscionable conduct provisions enacted in New South Wales, the judicial and tribunal precedents decided under the New South Wales legislation (discussed in [24.6]) should also be relevant and applicable in Queensland. [page 897] The widespread claims for unconscionable conduct in relation to retail leases has been led to the tribunal noting that ‘Swingeing claims of claims of unconscionable conduct should not be made unless compelling evidence exists’ and claims of unconscionable conduct have often been unduly used as ‘a mantra, makeweight or catch-all clause’: see Schnitzel World Pty Ltd v Yung Chon Pty Ltd [2010] QCAT 474 at [68].

Other duties [25.7] Unlike the Residential Tenancies Act 1994 (Qld), the Retail Shop Lease Act 1994 is not designed to codify the law of landlord–tenant in respect

of those premises subject to the Act. Accordingly, except to the extent to which the Act covers the field, the rights and duties of both parties established at common law remain in existence: see Paralowie Investments Pty Ltd v Maurice Srour Pty Ltd [2006] SADC 16 at [82] interpreting the equivalent South Australian legislation. The most important of these common law rights and duties are: on the part of the landlord, the duty to allow the removal of fixtures in certain circumstances (see [10.5]), and the implied condition of fitness for habitation at the commencement of a lease (see [8.5]); and on the part of the tenant, not to commit waste (see [10.3]), to use and deliver up the premises in a tenant-like manner (see [8.6]), and to deliver up possession of the premises at the expiration of the term: see [8.8]. In addition, the general common law rule applies that a covenant will be implied wherever it is necessary to give ‘business efficacy’ to the contract: Liverpool City Council v Irwin [1977] AC 239 at 258; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 392; Dikstein v Kanevsky [1947] VLR 216 at 221; Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P&CR 10; Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493; see further [8.1]. Further duties are contained in s 43: see [27.12]. These subsections require that a tenant be compensated where the landlord takes specified forms of action which adversely affects the tenant’s trading in the retail shop. These duties overlap with the common law covenant of quiet enjoyment and the duty not to derogate from a grant: see [8.4] and [8.5]. It is submitted that the common law requirements have not been impliedly repealed in their application to retail leases by s 43 as the scope of the common law duties are much broader.

Rent review [25.8] Rent review is heavily circumscribed by the provisions in ss 27–36A. Section 27(1) states that if a retail shop lease provides for a review of the rent payable under the lease during the term of the lease, or under an option to renew or extend the lease, the lease must state the timing of the reviews and the basis on which each review is to be made. Although the subsection is silent on this point, this provision is presumably inapplicable to periodic

tenancies and tenancies at will. Rent review may only occur once in each year of the lease: s 27(2). [page 898] The central feature of tenant protection in the rent review provisions is the requirement that a rent review can only use one basis for each rent review: s 27(4). For an illustration of this in practice, see Oz Sushi Pty Ltd v Lloyd Bennett & Associates Pty Ltd [2002] QDC 220. Where a lease specifies more than one basis for a review, the rent payable for the rental period after the timing of the review is the same as the rent payable before the timing of the review: s 27(7). A lease which reserves, or has the effect of reserving, to a party a discretion to apply one of two or more methods of calculating the rent on a particular review of the rent is void: s 36(d). Similarly void is a lease which provides for the rent to change on a particular review of the rent in accordance with whichever of two or more methods of calculating the change would result in the higher or highest rent: s 36(e). However, pursuant to s 27(2) if, under a retail shop lease, a major lessee gives a notice under section 27(8), a provision of the lease that would otherwise be void to a particular extent because of subsection (1)(d) or (e) is not void to that extent because of those provisions. The basis for the review must be one of the following: an independently published index of prices, costs or wages; a fixed percentage of the base rent; a fixed actual amount, or the current market rent of the leased shop: s 27(5). Pursuant to s 27(5)(f), other bases for the review may be prescribed in future by regulation, although no such further basis has been prescribed. Where the basis for a rent review is a fixed percentage of the base rent, ‘base rent’ is taken to mean ‘rent, or the part of rent, that is a specified amount of money (whether or not the amount is subject to change)’: s 5 and Schedule. Other forms of rent, including payment in kind, are thus excluded. The rent review clause must contemplate a specific date or a date that is ascertainable: Stremo Pty Ltd v Opal Collections Pty Ltd [2011] QCATA 129. Without a specific review date, the terms of s 27A and s 28 cannot operate as they are based on specific time frames.

Rent review based on the current market rent of the leased shop is subject to control by ss 28–35. Any provision in a lease is void if it requires the determination of the current market rent to be made otherwise than in accordance with these provisions: s 36(c). Where the parties are unable to agree on the current market rent within one month after the review date, the rent is to be determined by a specialist retail valuer agreed to by the parties or, failing agreement, nominated by the chief executive: s 28(2). A specialist retail valuer is a person whose name is recorded on the list of specialist retail valuers kept under the Valuers Registration Act 1992: s 5 and Schedule. The valuer must be independent of the interests of both parties: see Ballymaloe Pty Ltd v Retail Shop Leases Tribunal [2003] QSC 369 for the meaning of ‘independent’ in this context. In making a determination of the current market rent, the valuer must determine the rent on the following three bases: on the basis of the rent that would be reasonably expected to be paid for the retail shop if it were unoccupied and offered for leasing for the use for which the shop may be used under the lease or a substantially [page 899] similar use; on the basis of gross rent less the landlord’s outgoings payable by the tenant under the lease (for the meaning of ‘outgoings’, see [25.10]); and on an effective rent basis. ‘Effective rent basis’, for the determination of rent under a retail shop lease, means determining the rent on the basis of taking into account all associated advantages and disadvantages under arrangements made between the lessor and lessee that reflect the net consideration from the lessee to the lessor under the lease and associated arrangements: s 29(2) and Schedule. The valuer is specifically excluded from having regard to the value of the goodwill of the tenant’s business or the tenant’s fixtures and fittings in the shop (for the meaning of ‘goodwill’, see [25.5]): s 29(1)(b). The valuer may give the landlord written notice requiring the landlord to provide any relevant information about leases in the retail shopping centre in which the shop is situated: s 30(1). If the information is not provided within 14 days after notice is given to the landlord, the valuer must give the tenant written notice of this fact within seven days and a retail tenancy dispute is

deemed to exist between the parties; in this case, the dispute resolution procedure under Pt 8 of the Act (see [25.18]) is invoked: s 30(2). Any information obtained by the valuer from the landlord under s 30 is confidential, and must only be used for the determination of the current market rent: s 35(1)(a). The valuer cannot either directly or indirectly disclose the information to any third party without the consent of the landlord and the tenant: s 35(1)(b). A breach of s 35 is punishable by a maximum penalty of 60 penalty units. In addition, either party may sue the valuer for compensation for any loss or damage resulting from any disclosure: s 35(3). The valuer must give his or her determination in writing and must specify the matters taken into account in making it: s 31. The parties must each pay one-half on the valuer’s fee for the determination of the current market rent: s 34. Any provision in the lease which requires the tenant to pay for the full cost of the determination is void: s 36(b). The rental determination provisions are mandatory and the parties cannot contract out of the provisions; principles of estoppel and waiver have no role to play: see Amricama Pty Ltd v Red Carpet Real Estate Pty Ltd [2014] QSC 267.

Rent based on turnover [25.9] The Act permits the determination of rent by turnover, but provides certain statutory controls. The Queensland retail tenancies legislation is unique in that it is the only Act that exhaustively defines ‘turnover’. Section 9(1) states: ‘Turnover’ of a business carried on in a leased shop is the gross sales of the business for any particular period’. This is consistent with the common law definition of ‘turnover’: see [27.9]. [page 900] The Act by s 9(2) declares that a number of charges and payments do not constitute ‘turnover’. The purpose of this provision is to ensure that the

turnover figures used for the rent calculation accurately reflect the true financial position of the tenant, and to prevent the fixing of an artificially high rent by taking into account matters which the legislature has determined do not constitute genuine receipts and profits. The most important of the list of matters which do not constitute ‘turnover’ are: (i) (ii) (iii) (iv) (v) (vi) (vii)

cash or credit refunds allowed on the return of goods where a sale is cancelled; taxes (including GST) imposed on the purchase price or cost of hire of goods or services at the point of sale or hire; uncollected credit accounts that have been written off; the value of goods returned to shippers, wholesalers or manufacturers; delivery charges; discounts reasonably and properly allowed to customers in the usual course of business; and losses incurred in the resale or disposal of goods reasonably and properly purchased from customers as trade-ins in the usual course of business.

Section 9(2) does not give the parties any discretion to vary this definition of ‘turnover’ by adding any other matter which they agree does not form turnover. The definition of ‘turnover’ is thus inflexible. Section 25(2) provides that where the rent is or may be calculated either in whole or in part as a percentage of the turnover of the tenant’s business, the lease must specify the formula to be used to calculate the rent. The confidentiality of this information is guarded by s 26. It is an offence, punishable by a maximum penalty of 60 penalty units, for a landlord, either directly or indirectly, to disclose to any third party information about the turnover of the tenant’s business without the tenant’s consent: s 26(1). Limited exceptions are specified in s 26(2), the most significant of which is a prospective purchaser or mortgagee of the retail shopping centre in which the leased shop is situated, or their agent or professional adviser. Any person who acquires knowledge of the turnover through any of the exceptions specified in s 26(2) is similarly liable for disclosing such information to third parties, on

conviction, to a maximum penalty of 60 penalty units: s 26(4). In addition, the tenant is entitled to sue the landlord or other person wrongfully disclosing information on the turnover of the tenant’s business for reasonable compensation for any loss or damage resulting therefrom: s 26(5).

Rent and other payments [25.10] A lease must not contain a provision requiring the tenant to make any payment other than for rent and, if specified in the lease, the landlord’s outgoings, damages for breach of a term of the lease, an indemnity given by the lessee to the lessor for loss or damage suffered as a result of the actions or omissions of the lessee [page 901] and, subject to s 24(3), interest on arrears of rent or outgoings: see s 24(1). Section 24(1)(c) permits the landlord to recover from the tenant reasonable legal or other expenses incurred in responding to a request for a variation of the lease or the lessor’s consent to the lessee entering into a sublease or licence. Under s 39(2) the landlord may recover the costs associated with investigating a proposed assignee of the tenant or expenses associated with an assignment of the lease and the giving of any necessary consents to the assignment. Under s 39(2), the landlord may also legitimately receive advance rent payment payable for one rent period under the lease, a security bond (of unspecified amount), payment for the grant of a franchise in relation to the grant of a retail shop lease, and expenses incurred in fitting out the shop or for the sale of plant, equipment, fixtures (see [10.5]) or fittings in the shop. These costs do not constitute ‘key money’, which is prohibited under s 39(1): see [25.5]. Other charges which the tenant may be legitimately required to pay, pursuant to s 24(4), are: (i) half the costs of the valuer’s fee for determining the current market rent of the retail shop: s 34; (ii) contributions towards a sinking fund to defray the landlord’s costs

associated with major maintenance and repairs (see [25.14]); (iii) contributions towards the promotion and advertising of the retail shopping centre in which the leased shop is situated (see [25.14]); and (iv) the costs associated with the preparation and execution of a lease, except for the landlord’s legal or other expenses in relation to the lease preparation: s 48. Section 37 establishes certain legal protection for tenants who are required to contribute towards the landlord’s outgoings in respect of a retail shopping centre or the leased building containing the leased shop. The operative provision is s 37(1), which states: A lessee under a retail shop lease is not liable to pay an amount to the lessor for outgoings unless the lease specifies — (a) the outgoings payable by the lessee; and (b) how the outgoings will be determined and apportioned to the lessee; and (c) how the outgoings may be recovered by the lessor from the lessee. A landlord’s ‘outgoings’ is comprehensively defined in s 7. Several expenses commonly incurred by landlords are excluded: for example, land tax, a landlord’s contributions to merchants’ associations and centre promotion funds, and expenditure of a capital nature, including the amortisation of capital costs. Section 38A(1)(a) requires the landlord to give to the tenant an annual estimate of the landlord’s apportionable outgoings and the proportion of those outgoings for which the lessee will be liable under the lease, normally at least one month before the start of the period to which the estimate relates. This must be followed by an annual audited statement of the outgoings within three months after the end of each accounting period: s 38B. Where a landlord does not [page 902] given an outgoings estimate or an audited annual statement, the lessee may

withhold payments in relation to apportionable outgoings until the lessor gives the outgoings estimate or audited annual statement. Note that where the tenant is required to pay a proportion of the landlord’s apportionable outgoings, the proportion payable by each tenant must not exceed the proportion that the area of the lessee’s leased shop bears to the total area of all premises in the centre or building that are owned by the lessor and leased to or available for lease to tenants who enjoy the benefit resulting from the outgoing: s 38(2). Before entering into a retail shop lease, the prospective tenant is obliged to give the landlord a disclosure statement: s 22A. The statement must contain the information set out in reg 3. The prospective tenant who is not a major tenant (that is, the tenant of five or more retail shops in Australia) nor a prospective franchisee, must, before entering into the lease, also give the landlord a financial advice report and a legal advice report: s 22D. If the prospective tenant breaches either of these obligations, a retail tenancy dispute exists between the parties and the landlord may apply, as provided under the QCAT Act, to the Queensland Civil and Administrative Tribunal (QCAT) for an order that the tenant provide the document: s 22E.

Options to renew [25.11] Unlike in the other jurisdictions with retail tenancies legislation, there is no statutory right given to tenants to be granted a minimum period of tenancy of five years. Options to renew are controlled by s 46 and s 46AA. Section 46 applies to all leases where the retail shop lease provides for an option on the part of the tenant to renew the lease: s 46(1). At least two months, but not longer than six months, before the option date, the lessor must give the lessee written notice of the option date: s 46(2). Section 46AA applies where the lease does not provide for an option on the tenant’s part to renew or extend the lease and is not the subject of an agreement for its renewal or extension: s 46AA(1). By s 46AA(2), the landlord must provide the tenant with a written notice offering the tenant a lease renewal or extension or stating that the landlord does not intend to offer the

tenant such a renewal or extension. This notice must be given, in the case of a lease of one year or less, within a period of three to six months before the lease is to end, or where the lease exceeds one year, within a period of 6 to 12 months before the end of the lease: s 46AA(6). If the landlord fails to comply with s 46AA(2), where the tenant asks for the extension the term of the lease is extended until six months after the landlord gives the required notice: s 46AA(4), (4A). [page 903]

Implied terms [25.12] The Act contains in s 43 implied terms of general application to retail shop leases. ‘Retail shopping centre’ is defined in s 5D as having all of the following attributes: (a)

5 or more of the premises are used wholly or predominantly for carrying on retail businesses; (b) all the premises — (i) are owned by the 1 person; or (ii) have the 1 lessor or head lessor, or, if the premises were leased, would have the 1 lessor or head lessor; or (iii) comprise lots within a single community titles scheme; (c) all the premises are located in — (i) 1 building; or (ii) 2 or more buildings if — (A) the buildings are adjourning; or (B) if the premises are owned by the 1 person – the buildings are separated by common areas or other areas owned by the owner or a road; or (C) if the premises are not owned by the 1 person – the buildings are separated by common areas or a road;

(d) the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court or shopping arcade.

Implied terms of general application [25.13] Certain terms of general application are contained in s 43(1), relating to the landlord’s liability to pay compensation to the tenant in certain specified circumstances. These terms are implied into all cases by virtue of s 42. Reasonable compensation is payable where the landlord or an agent of the landlord does any of the following: (a) substantially restricts the tenant’s access to the leased shop; (b) takes action that substantially restricts or alters access by customers to the shop or the flow of potential customers to the shop; (c) causes significant disruption to the tenant’s trading in the shop or does not take all reasonable steps to prevent or stop significant disruption within the landlord’s control; (d) does not rectify as soon as is practicable any breakdown of plant or equipment under the landlord’s care or maintenance or any defect in the building or shopping centre (other than a defect due to a condition that would have been reasonably apparent to the tenant when the tenant entered into the lease); (e) neglects to clean, maintain or repaint the building or part of the centre that is the landlord’s responsibility; or [page 904] (f)

causes the tenant to vacate the shop before the end of the lease because of the extension, refurbishment or demolition of the shopping centre or building containing the shop.

Any agreement that purports to limit the amount of compensation payable in any of these circumstances is void to the extent of the limit: s 44A. The lessee must give the lessor written notice of loss or damage as soon as

practicable after it is suffered (s 43(2)), but failure to give the notice does not affect the lessee’s right to compensation but is considered when deciding the amount of compensation payable under s 44: s 43(3). The obligations contained in paras (a)–(c) deal with matters which in certain circumstances might otherwise fall within the common law principle of nonderogation from grant or the landlord’s implied covenant of quiet enjoyment (see [8.4]–[8.5]), and the application of these common law principles would seem to have been impliedly repealed to the extent to which they overlap with the provisions in s 43(1). It should be noted, however, that both the covenant of quiet enjoyment and the principle of non-derogation from grant are much broader than the terms of s 43(1)(b)–(d) and would apply in circumstances outside the scope of the statutory provisions: see [25.6]. See Orsay Holdings Pty Ltd v Mecanovic [2013] QCA 232 for a discussion of the applicability of the right to quiet enjoyment. Pursuant to s 43AA, compensation is payable by a landlord to a tenant where the tenant entered into the lease, or a renewal of a lease, on the basis of a false or misleading statement or misrepresentation made by the landlord or any person acting under the landlord’s authority. McMurdo J held in Logan City Shopping Centre Pty Ltd v Retail Shop Leases Tribunal [2006] QSC 172 at [18] that s 43(2)(a) (now s 43AA(1)), in its reference to ‘entered into the lease’, refers only to the creation of the lease and not to any subsequent assignment. An assignee of the tenant thus has no power to apply for compensation under the paragraph. (Note that this decision was rendered under the pre-2006 legislative amendments. McMurdo J discussed at [19], without resolving, whether the new amendments would have affected the result.) No definition of ‘false and misleading’ is given in the legislation. This is a question of fact in each case. In the context of s 52(1) of the Trade Practices Act 1974 (Cth), now s 21 of the Australian Consumer Law, ‘misleading’ has been stated to mean ‘to lead astray in action or conduct; to lead into error, to cause to err’: Weitmann v Katies Ltd (1977) 29 FLR 336 at 343. According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public … into error’. (See also RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR

191 at 198; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171.) [page 905] If the parties cannot agree on the amount of compensation payable the amount is decided by way of the dispute resolution process: s 44.

Implied terms relating to retail shopping centres [25.14] The Act seeks to regulate the payment by tenants of retail shopping centres of contributions to sinking funds for major maintenance and repairs to the centre and for the promotion and advertising of retail shopping centres. Section 40, which governs sinking funds for major maintenance and repairs, provides that only one such fund can be established for each retail shopping centre (s 40(2)), that moneys paid by the tenant must be paid into an interestbearing account (s 40(3)), and that the fund can only be used for the specified purpose: s 40(4). The fund cannot exceed $100,000 (s 40(7)), and the amounts paid into the fund by all the tenants must not exceed five per cent of the landlord’s estimated outgoings for the centre for the year: s 40(6). In relation to amounts required to be paid by a tenant for promotion and advertising of the retail shopping centre, s 41(2) provides that this money can only be used for promotion and advertising directly attributable to the centre, although the money may also be used for joint promotions and advertising with other retail shopping centres: s 41(3). It is noteworthy that there is no requirement in the case of joint advertising or promotion that the expenses be apportioned between the established funds of the various shopping centres engaging in the joint promotional enterprise. Thus, the tenants of one centre may be required indirectly to support the advertising and promotion of another centre. There is no obligation placed on the lessor to use all the advertising and promotion funds in a particular time period: see Briridge Pty Ltd v Charter Hall Real Estate Management Services Pty Ltd [2014] QCAT 469.

Prohibited terms [25.15] The Act contains a number of prohibited terms, in addition to those referred to in [25.13], which apply to all types of retail shop leases. In most cases a breach of a prohibited term is declared to be an offence punishable by a maximum specified monetary penalty, and is dealt with summarily before a magistrates court. From the standpoint of the protection of the tenant, the most significant prohibited terms of general application relate to the prohibition of key money: see [25.5]. Section 47(1) prohibits the landlord from requiring a tenant or prospective tenant under a retail shop lease to use or pay for the services of a lawyer nominated by the landlord. In this case the penalty for a breach is that the landlord is bound to reimburse the tenant for the amount of fees paid to the lawyer by the tenant: s 47(2). A lease must not include a provision which prevents or restricts the tenant from joining any [page 906] chamber of commerce, retail trade association or other commercial association, or forming or joining a tenants’ association to promote a retail shopping centre or for another purpose of mutual interest to the tenants: s 49. Section 45(1) provides that a landlord must not obstruct or hinder the tenant in dealing with the lease or other assets of the business carried on in the leased shop by way of security. Exceptions are, however, prescribed in s 45(2). This subsection states that a tenant is not entitled to deal with the lease or other assets of the business carried on in or from the leased shop by way of security without the landlord and the prospective secured creditor entering into an agreement about certain matters, the most important of which are the times when and the means by which the creditor may remove and dispose of fixtures, fittings or equipment subject to the security, the right of the creditor to enter into possession of, or to place someone else in possession of, the shop in the case of default by the tenant, and the times when the creditor or the creditor’s agents may enter the leased shop, before or after the end of the lease.

Unlike other provisions of the Act, it is possible for the parties to include a term of the lease contracting out of the terms of s 45: s 45(3). Controls on trading hours are contained in s 53. It is an offence, punishable by a maximum penalty of 100 penalty units, for a landlord to require a tenant under an existing lease to extend the hours that the tenant was required to keep the retail shop open for trading immediately before the commencement of the Trading (Allowable Hours) Amendment Act 1994: s 53(4). However, in the case of premises located in retail shopping centres a retail shop lease may include a condition requiring the tenant to keep the premises open for trading in the core trading hours (as defined in s 51): s 53(2). A condition in a lease that purports to impose on the tenant an obligation to open the premises for trading outside the core trading hours for the retail shopping centre is void: s 53(1). However, if the term is in an existing lease, it is void only to the extent that it requires the tenant to open the premises for trading outside the core trading hours for the retail shopping centre: s 53(3). Note also s 16, which states that a provision of a retail shop lease is void if it purports to exclude the application to the lease of any provision of the Act.

Assignments and subleases [25.16] The Act does not alter the general law of landlord–tenant relating to assignment and subleases. Thus, the existing common law rules regarding the tenant’s right to assign and sublet — together with s 121 of the Property Law Act 1974, which states that in every covenant prohibiting assignment without the consent of the landlord, the covenant shall be deemed to include a proviso that consent not be withheld unreasonably — continue to apply to retail shop leases: see [7.11]. [page 907] There are no provisions in the Act relating to subleases. The only provision in the Act relating to assignments is s 50. This section provides that in certain circumstances a retail tenancy dispute shall be deemed to exist between the

parties. The purpose of this is to attract the operation of the dispute resolution provisions contained in Pts 8 and 9 of the Act. A dispute exists where the tenant is required to seek the landlord’s consent to a proposed assignment, the tenant has given the landlord the full particulars of the proposed assignment, and the landlord has not responded to the request within one month. A dispute also exists where the landlord purports or seeks to impose a condition considered by the tenant unreasonable for consenting to the assignment, or purports or seeks to impose on the assignee an obligation additional to those of the existing tenant or to withdraw from the assignee one or more of the rights conferred on the existing tenant. Where an assignor of the lease has complied with the disclosure requirements contained in s 22B, the assignor and any guarantor of the assignor are released from any liability under the lease resulting from a default by the assignee: s 50A.

Termination of lease [25.17] Subject to two exceptions, the Act does not seek to codify the law relating to termination of leases. As there is no contradictory provision in the Retail Shop Leases Act, the basic common law rules as to termination of leases (as amended by the Property Law Act 1974) (see [17.1] and following) will continue to apply to retail shop leases. The first exception applies where the lease states that if the landlord proposes refurbishing, redeveloping or extending the building in which the leased shop is situated during the term of the lease or any renewal of the term, and the works cannot be carried out practicably without vacant possession of the leased premises, the landlord may take action requiring the tenant to relocate the tenant’s business: ss 46C and 46D. In this situation, the landlord must serve a three-month relocation notice on the tenant, stating the proposed relocation day, the details of the reasonably comparable alternative retail shop to be made available to the tenant, and sufficient details of the proposed refurbishment, redevelopment or extension to indicate a genuine proposal that is to be carried out within a reasonably practicable time after the tenant’s business is relocated and cannot be carried out practicably without vacant

possession of the leased shop: s 46D. Unless the parties agree otherwise, the terms of the lease for the new premises are to be the same as those of the original lease: s 46F. Within one month of receiving a relocation notice, the tenant is entitled to give the landlord written notice terminating the lease: this must occur on the day agreed by the parties or, failing agreement, three months after the relocation notice is given: s 46E(1), (2). If the tenant does not give such a notice, the tenant is taken to have accepted the landlord’s [page 908] offer of the alternative retail shop mentioned in the relocation notice on the same terms and conditions as in the original lease: s 46E(3). The other exception relates to a retail shop lease where the lease provides for its termination by the landlord if the building in which the leased shop is situated is to be demolished, requiring vacant possession of the leased shop: s 46H. In this situation, pursuant to s 46I, the landlord must give the tenant at least six months notice in writing, stating the termination date and giving sufficient details of the proposed demolition to indicate a genuine proposal to demolish the building within a reasonable practicable time after the lease is terminated. If the landlord gives the tenant a termination notice, the tenant may terminate the lease earlier than the termination day by giving the landlord one month’s notice at any time: s 46J. Compensation is payable by the landlord to the tenant for the fitout of the rented premises to the extent that the fitout was not provided by the landlord or, if the demolition is not carried out, because of the early termination of the lease: s 46K(1). The amount of compensation is that agreed by the parties or, failing agreement, decided under the dispute resolution process: 46K(3).

Determination of disputes [25.18] Dispute resolution provisions of the Act are contained in Pts 8 and 9 of the Act. The principal methods of determination are mediation and decision by a retail shop lease tribunal, although the parties are not precluded

from including a provision in the lease requiring any dispute under the lease to be referred to arbitration or be heard by any court or tribunal: s 54. There is a panel of mediators appointed by the minister for a term of up to three years: ss 95, 98. ‘Mediation’ is defined in s 5 as ‘the process … under which the parties to a retail tenancy dispute use a mediator to help them resolve the dispute by negotiated agreement without adjudication’. The jurisdiction of a mediator is specified in s 97. Mediators are given a general power to mediate retail tenancy disputes, except for matters which are the subject of arbitration or court proceedings, and except where the issue in dispute concerns rent arrears, the amount of rent payable in respect of the landlord’s outgoings under a lease, or in respect of the amount of the landlord’s outgoings under a retail shop lease: s 97(2). Note, however, that mediators have jurisdiction about the procedure for the determination of rent and the basis on which the landlord’s outgoings are payable by, and the procedure for charging the landlord’s outgoings to, a tenant: s 97(3). For a proceeding for a retail shop lease dispute, the QCAT is constituted by three QCAT members, being a legally qualified member, a person representing lessors and a person representing lessees (s 102). The jurisdiction of the tribunal is specified in s 103. Note that the tribunal’s jurisdiction is limited to claims where the amount in dispute [page 909] is within the current monetary limit of the District Court in its civil jurisdiction ($750,000): s 103(1)(c). Either party may lodge with the chief executive a notice of dispute seeking mediation: s 55. Where this occurs, the chief executive will nominate a mediator and give at least seven days’ notice of the mediation conference: s 56. At the hearing, each party must conduct their own case and, except where a party is a corporation, cannot be represented by an agent unless the mediator gives consent: s 57. Evidence of anything said in a mediation conference is not admissible in any later court or tribunal proceedings: s 115(1). Where

agreement is reached, the agreement must be put in writing and signed by each party. A copy is given to the chief executive: s 61. A dispute is referred to QCAT by the mediator where, among other things, the parties cannot reach a mediated solution, a party fails to attend the mediation conference, or where the dispute is not settled within four months after the dispute notice is lodged: s 63. A party to a retail tenancy dispute may apply to QCAT for an order to resolve the dispute if, among other things, a party claims that the other party has not complied with the terms of the mediation agreement within the time specified in it or, if no time is specified, within two months after the agreement is signed, a mediator refuses to refer the dispute to QCAT because the mediator is of the view that the dispute is not within QCAT’s jurisdiction, or a court has ordered that a proceeding started in the court for the dispute be removed to QCAT or another tribunal: s 64. QCAT is empowered to make any order, including a declaratory order, it considers just to resolve the dispute: s 83(1). The tribunal should not use the declaratory power to express opinions on abstract propositions of fact or law or disputes which are fictitious: Fisherman’s Wharf Tavern Pty Ltd v Perpetual Trustee Co Ltd [2006] QSC 104 at [11], per Chesterman J.

[page 911]

26 Retail Tenancies Legislation: Western Australia Background [26.1] The origin of the Western Australian retail tenancies legislation can be traced to the establishment in September 1981 of a Retail Liaison Committee to improve communication in the retail industry. This Committee, which consisted of representatives of all interested organisations, including the Law Society of Western Australia, recommended the establishment by legislation of a Lease Review Tribunal, although in other respects it preferred voluntary restraints and codes of practice. Following the 1983 state election, in which the control of shop-ping centre leases became an issue, the incoming Burke Labor government estab-lished in September 1983 an Inquiry into Commercial Tenancy Agreements. The inquiry was given wideranging terms of reference, involving all relevant matters relating to commercial tenancy agreements, with particular reference to shopping centres and procedures for resolving conflicts. The inquiry submitted its report in 1984, and called for the introduction of new legislation to regulate the leases of retail premises. The majority of the inquiry’s recommendations were adopted in the Commercial Tenancy (Retail Shops) Agreements Act 1985, which was assented to on 13 May 1985, and proclaimed to commence on 1 September 1985 (Gaz 80 of 30 August 1985 at 3065). The Commercial Tenancy (Retail Shops) Agreements Regulations

1985, made pursuant to the Act, came into operation on the same date (Gaz 80 of 30 August 1985 at 3121). The Regulations were repealed by the Commercial Tenancy (Retail Shops) Agreements Amendment [page 912] Regulations 2012 and the Commercial Tenancy (Retail Shops) Agreements Regulations (No 2) 2012 which commenced on 1 January 2013. On 1 January 2013, the Act was also amended by the Commercial Tenancy (Retail Shops) Agreements Amendment Act 2011.

Premises subject to the Act [26.2] To fall within the scope of the legislation, the premises must be leased under a ‘retail shop lease’. This phrase is defined in s 3(1) as meaning: … a lease that provides for the occupation of a retail shop unless — (a) the retail shop — (i) has a lettable area that exceeds 1 000 square metres; and (ii) is not of a kind prescribed by the regulations for the purposes of this definition; or (b) the lease is held by — (i) a listed corporation (within the meaning of the Corporations Act 2001 (Commonwealth) section 9) that would not be eligible to be incorporated as a proprietary company; or (ii) a subsidiary (within the meaning of the Corporations Act 2001 (Commonwealth) section 9) of such a corporation; or (c) the lease is held by — (i) a body corporate whose securities are listed on a stock exchange, outside Australia and the external territories, that is a member of the World Federation of Exchanges; or

a subsidiary (within the meaning of the Corporations Act 2001 (ii) (Commonwealth) section 9) of such a body corporate; or (d) the lease is of a kind that is prescribed by the regulations as exempt from the operation of this Act; This definition presupposes the existence of a ‘lease’. ‘Lease’ is defined in s 3(1) as meaning: … any lease, licence, or agreement, whether in writing or not, that provides for the occupation of premises situated within the State whether for a term or by way of a periodic tenancy or a tenancy at will … This definition of ‘lease’ is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries. At common law, it is essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] [page 913] WASCA 317; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If an occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For the nature of a licence, see Chapter 3. In contrast, an occupant will come within the scope of the Act by virtue of the definition of ‘lease’ regardless of whether his or her right of occupation is regarded as exclusive. The definition of ‘retail shop lease’ requires the existence of a ‘retail shop’. Section 3(1) defines this as: (a)

any premises situated in a retail shopping centre that are used wholly or predominantly for the carrying on of a business; or (b) any premises not situated in a retail shopping centre that are used wholly or predominantly for the carrying on of a retail business,

but does not include any premises excluded by regulation; The effect of this definition is to give a broader scope to the Act to premises situated in a retail shopping centre (also defined in s 3(1)) than to premises located elsewhere. Where the premises are located in a retail shopping centre, the Act will apply provided that they are used for the carrying on of ‘a business’. At common law, ‘business’ has been given a wide meaning. It has been held that a business exists wherever there is continuity, diligence and repetition of actions constituting the activities, provided that the operations have some significant commercial purpose or character. Alternatively, the actions or operations must be of such magnitude that, given favourable seasons or conditions, they will by maturity or further activity reasonably be expected to develop into a viable venture. See Town Investments Ltd v Department of the Environment [1976] 1 WLR 1126 at 1149–50; Wellington v Norwich Union Life Insurance Society Ltd [1991] VR 333 at 335; Durant v Greiner (1990) 21 NSWLR 119 at 128; Abernethie v A M & J Kleiman Ltd [1970] 1 QB 10 at 20; American Leaf Blending Co v Director-General of Inland Revenue [1979] AC 676 at 683–4; Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 705. ‘Business’ would thus seem to be sufficiently wide to include the retail provision of services, such as solicitors’ and accountants’ offices, doctors’ and dentists’ surgeries, and government services. The only qualification to this is that, pursuant to the definition in s 3(1) of a ‘retail shopping centre’, five or more other premises within the centre must be used wholly or predominantly for the carrying on of either a business involving the sale of goods by retail, or a specified business. (Note that the statutory definition of ‘the business’ in s 3(1) appears to be irrelevant to the definition of ‘retail shop’ as this definition refers to a business.) Conversely, where the premises are located outside a retail shopping centre, they must be used wholly or predominantly for the carrying on of a retail business. ‘Retail business’ is defined in s 3(1) to mean: (a)

a business that wholly or predominantly involves the sale of goods by retail; or (b) a specified business. [page 914]

Apart from a ‘specified business’, the business must involve the retail sale of goods before the Act will apply. This clearly excludes the retail provision of services. In Kwik ‘N’ Kleen Pty Ltd v Sears Wainwright Superannuation Pty Ltd [2009] WASAT 148 the premises were used to operate a car wash but vending machines were also on the premises. The tribunal held that neither an automatic carwash nor a manual carwash constituted the sale of goods by retail. The incidental retail sale via vending machines at the premises was not an essential part of the business. The reference to a ‘specified business’ means a business of a kind prescribed by the regulations to be a specified business: s 3(1). Regulation 3A prescribes the following businesses to be a ‘specified business’: dry-cleaning; hairdressing; beauty therapy and treatments; shoe repair (which may include key cutting and engraving); and the sale or rental of video tapes, DVDs, electronic games or other similar amusements. Pursuant to the definition of ‘retail shop lease’, only small retail shops — that is, those with a lettable area of 1000 square metres or less — are subject to the legislation. The reasons for this limitation are discussed in [23.2]. The expression ‘lettable area’ means an area of a retail shop defined or calculated: (a) in such a manner as is prescribed by the regulations; and (b) if the shop is part of a group of premises, in the same, or in a substantially similar, manner as the area of reach other retail shop in the group of premises is defined or calculated. Regulation 3AA(1) says that the ‘lettable area’ of a retail shop means so much of the surface floor area of the premises as is designed and available for use in carrying on the business that is, or will be, carried on at the shop. Exceptions are set out in reg 3AA(2). ‘Retail’ is not defined in the Act. For its meaning at common law, see [23.2]. The timing of the application of the Act is specified in s 4. Section 16, which relates to the determination of disputes by the State Administrative Tribunal under the State Administrative Tribunal Act 2004 (WA), applies to all disputes relating to retail shop leases regardless of when the lease was

entered into: s 4(2). The remaining provisions of the Act do not apply to a retail shop lease that was entered into before the date on which the Act came into operation (1 September 1985) (s 4(1)(a)), or was entered into pursuant to an option granted or agreement made before that date: s 4(1)(b). ‘Entered into’ is defined in s 3(4) as meaning either: (a) when the tenant enters into possession of, or commences to pay rent in respect of, the premises; or (b) where the lease is in writing, all the parties have signed the lease, whichever first occurs. If a landlord is to avoid the application of the Act by relying on s 4(1)(b), it appears to be essential that the lease entered into under the option is in identical form to that allowed for in the option. If a different form is used, the lease will be classified as a new lease and fall within the scope of the Act: see the interpretation of a similar Victorian provision [page 915] in B S Stilwell & Co Pty Ltd v Budget Rent-a-Car System Pty Ltd [1990] VR 589. The extension of a pre-1 September 1985 lease by way of a deed of variation would appear to be ineffective to avoid the application of the Act to the new term as such extension would amount to an agreement for a lease and be caught by the definition of ‘lease’ in s 3(1). If the requirements in s 4 are satisfied, the Act applies to all retail shop leases in Western Australia regardless of whether the lease was entered into outside the state and even though the lease purports to be governed by a law other than the law of the state: see the definition of ‘lease’ in s 3(1). Section 5 states that the Act binds the Crown. The Act thus clearly affects leases in respect of premises owned by state government departments and instrumentalities. If the state government department or instrumentality is classed as part of the Crown in right of the state, it will be subject to the Act by virtue of s 5. If the department or instrumentality is not classed as part of the Crown in right of the state, it will be subject to the Act by virtue of s 4(1) and the definition of ‘retail shop lease’ in s 3(1). However, the Act does not apply to premises leased by a department or instrumentality of the Commonwealth if it is entitled to Crown immunity. A simple statement in state legislation that the Act binds the Crown is construed as referring only to

the Crown in right of the state: Commonwealth v Bogle (1953) 89 CLR 229 at 259; Essendon Corporation v Criterion Theatres Ltd (1947) 74 CLR 1. The Regulations may exempt a prescribed person, retail shop lease, retail shop or a prescribed class of persons, retail shop leases or retail shops: s 4(4). Regulation 3AB exempts the following leases from the operation of the Act: (a)

a lease held by a body corporate whose securities are listed on the New Zealand Stock Exchange Limited; (b) a lease held by a subsidiary (as defined in the Corporations Act 2001 (Commonwealth) section 9) of such a body corporate; (c) a lease of premises for the purpose of the lessee operating only a vending machine or automatic teller machine on those premises.

Express duties of the landlord Give the tenant a disclosure statement [26.3] The landlord is required to give the tenant a disclosure statement at least seven days before entering into a retail shop lease: s 6(1). (See [26.2] for the meaning of ‘entering into’.) Disclosure statements are not required on an assignment, or on the renewal of a retail shop lease under an option (including the option arising by reason of s 13(1)) (see [26.12]): s 6(6). [page 916] The disclosure statement must be in the prescribed form, and must contain a statement notifying the tenant that he or she should seek independent legal advice: s 6(4). The prescribed form is Form 1, contained in the Schedule to the Regulations: reg 4. Form 1, which was rewritten under the 1992 regulations, requires the disclosure statement to contain details as to the centre or building, the rented premises, the occupation, the rent, the variable outgoings (contributions to the landlord’s expenses), the landlord’s interest in the centre or building, any additional charges payable by the tenant, and a list

of other agreements between the parties or representations made by the landlord. The requirement that a disclosure statement be ‘given’ to the tenant (s 6(1)) raises the meaning of the word ‘give’. It is unclear whether the requirement is satisfied by compliance with the service of notice requirements. Logically, this should be the case, but it could be argued that ‘giving’ imports a stricter requirement than service of notice. The need for a disclosure statement raises some difficult practical issues for the landlord. For example, regarding the details of tenancy, the date of commencement may not be known at the time the disclosure statement is given. This may easily occur where the premises require renovation after a prior tenant has vacated, or where the premises are in the course of construction. Where a shopping centre is being constructed, the landlord may be unaware of the nature of changes to the surrounding roads. The remedy available to the tenant if the landlord fails to comply with s 6 is termination of the tenancy. Pursuant to s 6(1), if a tenant has not been given a disclosure statement at least seven days before entering into a retail shop lease, or if the disclosure statement given contains false or misleading information, the tenant may either give the landlord a written notice of termination at any time within six months after entering into the lease, or may apply to the State Administrative Tribunal for an order that the landlord pay compensation in respect of any pecuniary loss suffered as a result of the lack of a disclosure statement, providing an incomplete disclosure statement or for any false or misleading information contained within the statement. The issue whether a disclosure statement is ‘misleading’ (s 6(1)) is a question of fact in each case. No guidance as to the meaning of this word is given in the Act. In the context of s 52(1) of the Trade Practices Act 1974 (Cth), now s 18 of the Australian Consumer Law, ‘misleading’ has been stated to mean ‘to lead astray in action or conduct; to lead into error, to cause to err’: Weitmann v Katies Ltd (1977) 29 FLR 336 at 343. According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public … into error’. See also RAIA Insurance Brokers Ltd v FAI General Insurance

[page 917] Co Ltd (1993) 41 FCR 164; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171. The lease terminates 14 days after the notice is given: s 6(2). This 14-day notice rule appears to be absolute, and the original lease cannot be restored by an order of the State Administrative Tribunal under s 26(1). A new lease requiring a new disclosure statement would be required if the parties agree to continue with the lease after the expiry of the 14-day period.

Not to require key money or consideration for goodwill [26.4] A provision in a retail shop lease is void if it is to the effect that the landlord or a person claiming through the landlord is entitled to, or may require from the tenant, any key money or any consideration in respect of the goodwill of the business: s 9(1). Pursuant to s 9(1a) (added in 1990), where a retail shop lease provides to the effect that the landlord or a person claiming through the landlord is entitled to or may require from the tenant money or any other benefit in consideration of either a future reduction in rent payable under the lease or a lower rent under the lease than would otherwise be payable, that money or other benefit shall be considered as key money unless the landlord or person claiming through the landlord proves otherwise. The words in s 9(1), ‘a person claiming through the landlord’, require the relevant person to have a legal claim: Thessaly Pty Ltd v Pelworth Pty Ltd (1991) 6 WAR 253 at 257. See also Butcher v Bowen (1963) 80 WN (NSW) 1520; Ex parte Woodhouse; Re Teece (1969) 72 WN (NSW) 193. This is consistent with the natural and ordinary meaning of ‘claiming through’. Pursuant to s 9(1), if the entitlement to the key money does not vest in the landlord, to fall within the proviso the entitlement to or the power to require the payment of key money must itself be a claim which is made through, in the sense that it is legally derived from, the landlord: Thessaly’s case at 268.

‘Key money’ is defined in s 3(1) to mean: (a)

money that is to be paid by, or at the request or direction of, a tenant; or (b) any benefit that is to be conferred by, or at the request or direction of, a tenant, by way of a premium or something of a like nature in consideration of the granting of, or agreeing to grant, a lease or the renewal of a lease or the consenting to an assignment of a lease or the sub-leasing of the premises the subject of a lease. The meaning of ‘premium’ was considered by the Full Court of the Supreme Court of Western Australia in Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110. Malcolm CJ (at 120) defined the word as: ‘… an amount paid in addition to rent … The paradigm case of the ordinary meaning is an amount paid by way of a capital [page 918] sum over and above the market rent’. See also King v Earl Cadogan [1915] 3 KB 485; Elmdene Estates Pty Ltd v White [1960] AC 528; R v Barnet Rent Tribunal; Ex parte Millman [1950] 2 KB 506; compare Burke v Gillett [1994] V ConvR 56-507. In F&G Nominees Pty Ltd v Verdell Pty Ltd [2003] WASCA 290, a deed of extension of a lease required the tenant to pay to the landlord a once only payment of $120,000 by a specified date. This clause was held on the facts to amount to a ‘premium’ within the meaning of s 3(1) and therefore void. The court held (at [15]) that the nature of the payment is to be determined as a matter of substance having regard for the real arrangement between the parties. The inquiry relates to the substance of the transaction rather than the terminology that the parties may have used in the document. Extrinsic evidence is permitted to establish whether a payment is key money: at [65]. See also Whitemore Pty Ltd v O F Gamble Pty Ltd (1991) 6 WAR 110 at 115, 117–18.

In Warwick Entertainment Centre Pty Ltd v McKenzie [2000] WASCA 280, a tenant in a food court was told that a $65,000 payment was required to enter the tenancy. However, a clause of the lease stated that the money was in return for an interest in the plant and equipment to be installed in the common area. The court looked to the substance of the agreement and it was determined that the $65,000 was key money under s 9(1) of the Act. The landlord could not escape the provisions of the Act by listing the payment in another form in the lease. Pursuant to s 9(2), the landlord may legitimately recover from the tenant costs reasonably incurred in investigating a proposed assignee of the tenant or subtenant of the premises, any fair and reasonable expenses which the landlord incurred in respect of the negotiation, preparation or execution of, or obtaining the necessary consents to, an assignment of the lease or a sublease of the premises, and any sum which the tenant has agreed to pay to the landlord in respect of the goodwill of a business carried on by the landlord in the retail shop concerned immediately prior to the lease. These costs do not constitute ‘key money’. It also appears that the landlord may legitimately charge a security deposit and rent in advance. The Act is silent on these issues, and neither security deposits nor rent in advance fall within the scope of the statutory definition of ‘key money’. ‘Goodwill’, in relation to a business, is defined in s 3(1) as: … an intangible saleable asset, separate and distinct from the stock, fixtures, fittings, and other tangible assets of the business, arising from the reputation of the business, the relations formed with customers of the business, and the nature of the location of the business. A tenant who has paid any sum which is void under s 9(1) may recover it from the landlord in the State Administrative Tribunal or a court of competent jurisdiction as a debt due: s 9(3). [page 919]

Give the tenant details of the operating expenses of the building or retail shopping centre [26.5] Section 12(1)(a) states: If provision is made in a retail shop lease for payment by the tenant, in addition to rent, of all or any of the expenses of the landlord — (a) the amount payable by the tenant under the retail shop lease is limited to the items of operating expenses that the retail shop lease specifies are to be paid wholly or in part by the tenant and does not include an amount in respect of which the retail shop lease does not specify both — (i) how the amount is to be determined and, when applicable, apportioned to the tenant; and (ii) how and when the amount is to be paid by the tenant. In Heng v Levison [2006] WASCA 67 at [16], the court interpreted ‘determined’ in s 12(1)(a) as meaning that all that is required is that the tenant be told how the amount is to be fixed. The court rejected the argument that the landlord is also required to specify the means of calculation of the rent. The tenant is not required to pay, and the landlord is not entitled to recover, any expenses under s 12(1)(a) until at least one month after the landlord has given to the tenant annual estimates of expenditure under each item of expense in respect of that year: s 12(1)(d)(i). In addition to such annual estimates, the landlord is also required to furnish to the tenant, within three months after the termination of the year to which the expenses relate, an operating expenses account: s 12(1a)(a). Pursuant to s 12(2), a provision in a retail shop lease in respect of premises in a retail shopping centre to the effect that the tenant is obliged to make a payment to or for the benefit of the landlord, whether by way of contribution to a sinking fund or otherwise, for or in respect of the amortisation of all or part of the costs associated with the construction of the retail shopping centre, any extension of the centre or structural improvement to it, or any plant or equipment that is or becomes the property of the owner of the centre, is void. A provision in a retail shop lease to the effect that the tenant is obliged to contribute towards the cost of any of the landlord’s finishes, fixtures, fittings,

equipment or services is void unless the disclosure statement given to the tenant under s 6 contains a statement notifying the tenant of the effect of the lease provision: s 12(3A).

Permissible payments [26.6] The legislation permits the landlord under specified circumstances to require the tenant to make payments into a sinking fund for repairs or maintenance and into a reserve for marketing or promotion of the retail shopping centre. [page 920] The relevant legislation in relation to sinking funds is s 12A. By s 12A(3), the landlord may only apply money paid into the sinking fund for the purpose of the fund (which must be specified in the lease: s 12A(2)), together with taxes and imposts payable on the fund and the costs of an audit or accounting, legal or other professional costs reasonably incurred. The landlord is required to keep full and accurate accounts of all money received or held in respect of the sinking fund and must arrange for an annual audit and deliver a copy of the auditor’s report to the tenant within three months after the end of each accounting year: s 12A(3)(c). If the landlord fails to comply with the lastmentioned obligation, the tenant is not required to pay, and the landlord is not entitled to recover, payments to the sinking fund from the date of that non-compliance until the landlord complies with the requirement: s 12A(6). Reserves for marketing and promotion are controlled by s 12B. The detailed provisions of this section mirror the terms of s 12A in respect of sinking funds, noted in the preceding paragraph. For a precedent concerning the categorisation of a payment described in the lease as a ‘forecourt levy’, and whether it constituted either a sinking fund or a payment for marketing and promotion, see Minister for Transport v Edgar Enterprises Pty Ltd [2006] WASC 27.

Other duties

[26.7] Unlike the Residential Tenancies Act 1987 (WA), the Commercial Tenancy (Retail Shops) Agreements Act is not designed to codify the law of landlord–tenant in respect of the premises subject to the Act. Accordingly, except to the extent to which the Act covers the field, the rights and duties of both parties established at common law remain in existence. The most important of these are: on the part of the landlord, the duty to allow the removal of fixtures in certain circumstances (see [10.5]), and the implied condition of fitness for habitation at the commencement of a lease (see [8.5]); and on the part of the tenant, not to commit waste (see [10.3]), to use and deliver up the premises in a tenant-like manner (see [8.6]), and to deliver up possession of the premises at the expiration of the term: see [8.8]. In addition, the general common law rule applies that a covenant will be implied wherever it is necessary to give ‘business efficacy’ to the contract: Liverpool City Council v Irwin [1977] AC 239 at 258; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 392; Dikstein v Kanevsky [1947] VLR 216 at 221; Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P & CR 10; Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493; see further [8.1].

Assignments and subleases [26.8] The Act contains two relevant provisions. First, s 9(2) permits the inclusion of a provision in a retail shop lease authorising the landlord to recover from the [page 921] tenant costs reasonably incurred in investigating a proposed assignee or subtenant of the premises, or to recover from the tenant his or her fair and reasonable expenses associated with the preparation or execution of, or obtaining the necessary consents to, an assignment of the lease or a sublease of the premises. Second, s 10, which was repealed and substituted in 1990, creates a right in the tenant to assign the lease. Subsections (1) and (2) state:

(1) Notwithstanding any other written law, a retail shop lease shall be taken to grant to the tenant a right to assign the lease, subject only to a right of the landlord to withhold consent to an assignment on reasonable grounds. (2) Where a tenant under a retail shop lease has in writing requested the landlord to consent to — (a) an assignment of the lease; or (b) where the lease provides for a sub-lease of the premises by consent, a sub-lease of the premises, and the landlord fails to give notice in writing of consent or withholding of consent to the tenant within 28 days after receiving the request, the landlord shall be taken to have consented to the assignment or sub-lease, as the case may be. Section 10(1) goes far beyond the scope of the original form of the 1985 Act in that previously the landlord had the right to prohibit completely any assignment by adding an appropriate clause to that effect in the lease. For an example of where a landlord’s refusal to consent was held to be reasonable, see Taj Coffee Company Pty Ltd v Plaza Arcade [2009] WASAT 107. Note, however, that the subsection does not apply to subleases, which may still be prohibited absolutely by the landlord. (For a discussion of the distinction between as assignment and a sublease, see [15.2]). The reason for the restriction of the application of s 10(1) (but not s 10(2)) to assignments is unclear. Note that s 10 does not apply to retail shop leases entered into prior to 30 November 1990, the date of the introduction of the 1990 amending legislation: Aidan Nominees Pty Ltd v Cockburn (1994) 10 SR (WA) 256. Where a retail shop lease prevents an assignment or sublease without the consent of the landlord, s 80(1) of the Property Law Act 1969 (WA) continues to apply. Under this subsection, where a covenant prohibits assignment or subletting without the consent of the landlord, it is implied that the landlord’s consent shall not be unreasonably withheld unless the lease contains an express provision to the contrary. Most retail shop leases continue to expressly exclude the operation of this subsection.

In addition to s 80(1) of the Property Law Act, s 10 leaves untouched the following common law rules, which continue to apply to retail shop leases: (i) The issue whether the landlord has refused consent unreasonably (when applying s 80(1) of the Property Law Act or an express term of the lease) is a question [page 922] of fact in each case depending on the circumstances: see, for example, Barina Properties Pty Ltd v Bernard Hastie Pty Ltd [1979] 1 NSWLR 480; Re Archos [1994] 1 Qd R 223; Lee v K Carter Ltd [1949] 1 KB 85; Killick v Second Covent Garden Property Co [1973] 1 WLR 658; Pimms Ltd v Tallow Chandlers Co [1964] 2 QB 547. (ii) The legal onus is on the tenant to establish that the landlord’s refusal of consent was unreasonable: Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11 at [78]. (iii) Any covenant preventing subleasing will be strictly construed against the landlord: see, for example, Doe d Pitt v Hogg (1824) 4 Dow & Ry 224; 171 ER 1144; Chaplin v Smith [1926] 2 KB 198. (iv) In the absence of an express provision to the contrary, the tenant has the power to grant a sublease of the term: Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 62 WN (NSW) 240; Booton v Clayton (1948) 65 WN (NSW) 164; Fink v McIntosh [1946] VLR 290. See [15.5]. (v) As assignment or sublease made in breach of s 10 or the common law is nevertheless effective to pass the interest, the landlord’s right being in an appropriate case to determine the lease by forfeiture: Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264; Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406; Massart v Blight (1951) 82 CLR 423; Morison v Hall [1923] VLR 93. See [15.5]. Section 10 has no application where the tenant seeks to part with possession of the premises rather than to assign or sublet them. Thus, where the tenant’s request for consent relates to parting with possession, the landlord has an

unlimited time in which to respond to the request. (For the meaning of ‘parting with possession’, see [15.3].) Section 10(3), inserted in 1990, prohibits the inclusion of a provision in a retail shop lease to the effect that a landlord or a person claiming through the landlord may recover from a tenant who assigns the lease pursuant to s 10 any money payable under the lease by the assignee. The relevant common law rule is that the original tenant remains liable to the landlord for the performance of the covenants in the lease (including the covenant to pay rent) notwithstanding the assignment of the term: Old Papa’s Franchise Systems Pty Ltd v Camisa Nominees Pty Ltd [2003] WASCA 11; Debonair Nominees Pty Ltd v J&K Berry Nominees Pty Ltd (2000) 77 SASR 261; Warnford Investments Ltd v Duckworth [1979] Ch 127; Minister of State for the Army v Dalziel (1944) 68 CLR 261 at 305; Re Teller Home Furnishers Pty Ltd [1967] VR 313 at 320; 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193. However, the original tenant is entitled to an indemnity from the assignee where the tenant incurs an obligation owing to the assignee’s breach: Transfer of Land Act 1893 (WA) s 95. See [15.8]. It is submitted that there are a number of problems associated with s 10(3). First, whereas it could be argued that s 10(3) has repealed the common law rule on this issue in respect of those premises subject to the Commercial Tenancy (Retail Shops) Agreements Act, it [page 923] should be noted that s 10(3) only prohibits ‘the inclusion of a provision’. It is arguable that if a landlord complies with s 10(3) by failing to include a relevant provision, he or she can rely on the common law rule, which the wording of s 10(3) appears not to have directly overturned. The question of the survival of the common law rule in this situation appears to be unclear and awaits judicial determination. It should also be noted that s 10(3) has no application to subleases. Thus, where a sublease occurs, the original tenant can be sued by the landlord if the subtenant fails to pay the rent due. A final problem with s 10(3) is that it is restricted to cases of non-payment of ‘monies’, and has no relevance to the performance of other covenants. Thus, it appears that the

original tenant may be liable to the landlord for the non-performance by the assignee or subtenant of covenants other than the covenant to pay rent.

Implied terms [26.9] Section 14 creates five implied terms, the breach of any of which gives rise to a liability on the landlord to pay the tenant such reasonable compensation as is agreed in writing between the parties or determined by the State Administrative Tribunal. These terms only apply where the rented premises are situated in a retail shopping centre (see the definition of ‘retail shopping centre’ in s 3(1)). The implied terms are as follows: (a) (b) (c)

(d)

(e)

not to inhibit in any substantial manner the access of the tenant to the retail shop; not to take any action that would substantially alter or inhibit the flow of customers to the retail shop; not to cause, or to make reasonable effort to prevent or remove, any disruption to trading within the centre where the disruption causes loss of profits to the tenant; to rectify any breakdown of plant or equipment under the landlord’s care and maintenance, where the breakdown causes loss of profits to the tenant; and to adequately clean, maintain or repaint the building or buildings of which the centre is comprised or any common area connected with the centre (see the definition of ‘common area’ in s 3(1)).

Paragraphs (b) and (c) were construed by the Full Court in Alcides Fernandes v Timothy Yat Wah Lam [1998] WASCA 347. In this case, the tenant operated a delicatessen within a retail shopping centre. When the applicant purchased the business there was no other delicatessen in the centre. Later a restaurant that was operating in the centre commenced trading as a gourmet delicatessen that directly competed with the applicant’s business and caused financial loss to the applicant. The applicant claimed that the landlord had breached para (b) by failing to prevent the restaurant from operating as a delicatessen. This

argument was rejected by the Full Court on the basis that the phrase ‘take any action’ in para (b) denotes positive acts of commission rather [page 924] than mere omissions. The fact that cases decided under the common law covenant of quiet enjoyment drew no difference between acts of commission and omission was held to be irrelevant. The court further held under para (c) that the starting up of another lawful business in the centre within one of the tenancies does not amount to ‘disruption to trading within the centre’. The duty of the landlord ‘to adequately clean’ the buildings and common areas in s 14(e) indicates that the landlord is not required to keep such buildings or areas in a spotless condition. The exact extent of the landlord’s duty is always a question of fact. Note also that a distinction must be drawn between untidiness and uncleanliness, as the landlord’s duty under s 14(e) does not extend to the former. The retail shop lease may contain express provisions concerning compensation in the situations referred to in s 14. Although at common law an express covenant will displace an implied covenant (see Miller v Emcer Products Ltd [1956] Ch 304 and [8.3]), this will not apply to statutorily implied covenants. It is submitted that any express covenant may add to the statutory covenants but cannot detract from them. Note also that in certain limited circumstances a breach of the statutory covenants may amount at common law to a breach of the landlord’s duty not to derogate from his or her grant: see, for example, Newman v Real Estate Debenture Corporation Ltd [1940] 1 All ER 131. See [8.5].

Rent review [26.10] To be enforceable, rent review clauses must comply with the provisions in s 11. Pursuant to s 11(1), a provision in a retail shop lease for a rent review during the term of the lease is void unless the lease specifies, in respect of each occasion in which the review is to be made, a single basis on

which the review is to be made. This appears to be an illustration of the contractual principle of voidness for uncertainty: see [1.5]. Where a lease contains a rent review clause and the parties do not agree upon a question arising as to the amount of rent payable as a result of such review, the issue must be determined by one or two licensed valuers agreed upon by the parties, and cannot be referred to the Commercial Registrar unless the valuers fail to reach agreement or the leave of the Registrar has been first obtained: s 11(3) and (5). Subsection (3) cannot be used in a situation where the rent review clause is void for uncertainty under subs (1), as subs (3) presupposes the existence of a valid clause. Based on principles of natural justice both parties are entitled to see in advance the report or reports prepared by the valuers; s 11(5) cannot be construed as detracting from this right: Perron Investments Pty Ltd v Assignment Holdings Pty Ltd [2005] WASCA 2. Providing the statutory method has been adhered to, parties are bound by the valuer’s determination: Khayat Investments Pty Ltd v Winston Holdings Pty Ltd (No 2) [2011] WASCA 196. [page 925] Where the basis for a rent review during the term of the lease is specified as being the market rent of the premises, unless the lease contains an express provision to the contrary the market rent is, for that purpose, to be ‘the rent obtainable at the time of the review in a free and open market if the premises were unoccupied and offered for rental for a use permitted by, and on the same terms as are contained in, the current lease’: s 11(2). The Full Court held in O’Connor’s Management Pty Ltd v Kao Holdings Pty Ltd [1998] WASCA 2 that this subsection is no more than a definition and does not take away from the parties their right to specify whatever they wish as the basis for reviewing rental. In Head v Zimmerman Investments Pty Ltd [2010] WASAT 75, the rent review clause stipulated that the method of review was the greater of CPI or a fixed percentage. The tenant argued that the clause was not valid as there was no single basis upon which the review was to be made. It was held that the clause was void as it stipulated more than one method of rent review. Further, in Beba Enterprises Pty Ltd v Elle Pty Ltd [2013] WASAT 120, a clause of the

lease in question provided the landlord with the right to elect to review the base rent at each market review date. The tenant contended that the clause was invalid to the extent it only conferred discretion on Elle. However, it was held that it was unlikely that s 11(2)(c) conferred a right to initiate a review to both parties. The definition in s 11(2) appears to confirm the common law meaning of ‘market value’ as ‘the best price which may reasonably be obtained for the property to be valued, if sold in the general market’: Brisbane Water County Council v Commissioner of Stamp Duties [1979] 1 NSWLR 310 at 324. See also Orchard v Simpson (1857) 2 CBNS 299 at 305; 140 ER 431 at 433; Collins v Feltham Urban District Council [1937] 4 All ER 189 at 190–1; Gibson v Norfolk County Council [1941] 1 KB 191 at 195; Darbishire v Warran [1963] 1 WLR 1067 at 1074 and 1078. An interesting review of the common law authorities on the relevant considerations involved in calculating the market rent was undertaken by McInerney J in Edmund Barton Chambers (Level 44) Cooperative Ltd v Mutual Life & Citizen’s Assurance Co Ltd (1985) 6 NSWLR 312. A ‘market’ has been stated by Lord Reid to be ‘a place where there is sufficient trade to enable a market price at a particular time to be recognisable and where a trader can buy or sell almost immediately at that price’: BSC Footwear Ltd v Ridgway (Inspector of Taxes) [1972] AC 544 at 553. See also Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 83 ALR 577 at 588; Singapore Airlines Ltd v Taprobane Tours WA Pty Ltd (1991) 104 ALR 633 at 648–9. The meaning of ‘basis’ and ‘formula’ in s 11(1) and the operation of s 11(2) were considered in Western Australian Trustees Ltd v Poon (1991) 6 WAR 72. In this case the lease contained a provision which stated that, in the absence of an agreement over the rent during a review, the ‘current market rental value’ would be determined by a valuer. ‘Current market rental value’ was defined in the agreement as the best annual rent that could reasonably be obtained for the premises ‘having regard to the current rental [page 926] value of the comparable premises in the Metropolitan area’. The Full Court of

the Supreme Court of Western Australia held, inter alia, that as the definition of ‘current market rental value’ in the lease was narrower than the definition of ‘market rent’ in s 11(2) it was at least as certain as the statutory definition and therefore provided a ‘basis’ for the rent review within s 11(1). The court further held that a proviso in the lease stating that rent should not be less than the prior rent compounded by 10% constituted a ‘formula’ for the purposes of s 11(1). As at common law, in the absence of a rent review clause the rent remains fixed for the duration of the term of a fixed-term retail shop lease: Glossop v Ashley [1922] 1 KB 1. In addition, the common law rule in relation to the observance of time limits in respect of rent review clauses applies: see [11.4] and United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904.

Rent based on turnover [26.11] The Act permits the determination of rent by turnover, but provides a number of statutory safeguards in order to protect the economic position of the tenant. The relevant legislation is contained in ss 7 and 8. The Act prevents the tenant from being required to pay rent based on turnover, and gives him or her a right of election in this matter. Section 7(1) reads in part: … where a retail shop lease contains a provision to the effect that the rent is to be determined either in whole or in part by reference to the turnover of the business and — (a) the tenant did not, by notice in writing in the prescribed form given to the landlord before the provision was included in the lease, elect that the rent should be so determined; and (b) the tenant, by notice in writing given to the landlord, objects to the rent being so determined, the provision is void as from the day on which the notice referred to in paragraph (b) is given. The notice referred in s 7(1)(a) must comply with Form 2, ‘Notice of Election that Rent be Determined by Reference to Turnover’, prescribed by

reg 5. No form has been prescribed with reference to the notice referred to in s 7(1)(b). Even if the turnover provision is valid under s 7(1), it will still be void if it does not specify the formula by which the amount of the rent is to be determined: s 7(2)(a). In this regard, the issue arises as to the meaning and calculation of turnover. ‘Turnover’ is not defined in the Act. According to McNair J in Aris-Bainbridge v Turner Manufacturing Co Ltd [1951] 1 KB 563 at 564, ‘turnover … must be taken to include all sums received and receivable in the year as the result of … trading, whether normal or abnormal’. [page 927] Despite its lack of a comprehensive definition, the Act by s 7(4) declares that a number of charges and payments do not constitute ‘turnover’. The most important of these are: discounts reasonably and properly allowed to any customers; uncollected credit accounts written off by the tenant; refunds given on the return of merchandise or when a lay-by sale is cancelled; taxes on the purchase price of goods and services; delivery charges; and the price of merchandise returned to shippers, wholesalers or manufacturers. Section 7(4) does not include ‘any other matter which the landlord and the tenant agree does not form turnover’. It is submitted, however, that this omission is of no consequence, as the legislation leaves it open for the parties to agree to include any matter within the list of matters which do not constitute turnover, provided that it is not inconsistent with the terms of s 7(4). The purpose of s 7(4) is to ensure that the turnover figures used for the rent calculation accurately reflect the true financial position of the tenant, and to prevent the fixing of an artificially high rent by taking into account matters which the legislature has determined do not constitute genuine receipts and profits. Where a valid rent turnover clause is in operation, the tenant is required to

submit to the landlord a monthly written turnover statement within 14 days after the end of each month (unless the lease specifies a different period), and a yearly written turnover statement, certified by an accountant to truly and accurately represent the turnover of the business during the preceding year, within 42 days after the end of each calendar or financial year of the business (unless the lease specifies a different period) and at the termination of the lease: s 7(2). The tenant must, at the request of the landlord, permit an accountant engaged by the landlord to carry out an audit on any of the turnover figures at the landlord’s cost, and in the event that the yearly turnover statement is found by the audit to have understated the turnover of the business during the relevant period by more than 5%, the tenant must reimburse the landlord for the cost of the audit: s 7(3). If a provision in a retail shop lease concerning rent based on turnover is made void by s 7, the rent is as agreed in writing between the parties, or as determined by the State Administrative Tribunal: s 7(5). Except where turnover figures are needed for the purpose of determining the rent, such figures are not required. Any provision in a retail shop lease which requires the tenant to furnish, or permits the landlord to gather, turnover figures in other circumstances is void: s 8(1). The purpose of this provision is to ensure that the tenant’s business affairs remain confidential, and are not available to competitors. However, there is no provision for compensation to be paid to a tenant where a landlord communicates to any person any information about the turnover of the tenant’s business, unless the communication is made with the consent of the tenant. [page 928]

Right to at least five years’ tenancy [26.12] Section 13 creates a basic right for retail tenants in most circumstances to be granted a minimum period of tenancy of five years. The purpose of this is to enable the tenant to benefit from the goodwill established in respect of the business.

Section 13(1) states that where under a retail shop lease the term of the lease is more than six months but less than five years, and the current term plus any term that may be obtained by the tenant by way of an option to renew the lease totals less than five years, the lease shall be taken to give the tenant an option to renew the lease for a term commencing immediately after the current term and the option term, and ending on a day specified by the tenant that is not later than five years after the date of commencement of the lease. The current s 13(1) replaces the initial 1985 version of the statutory five-year tenancy and, unlike the 1985 draft, appears to apply to all retail shop leases, whether periodic or fixed term. It is submitted that periodic leases would be encompassed within the word ‘term’ in s 13(1): see Hyams Wholesalers Pty Ltd v Western Australian Planning Commission [2010] WASC 48. The statutory option under s 13(1) is exercisable by notice in writing in the prescribed form given to the landlord not less than 30 days before the current term or the option term expires or during such other period before expiry as the tribunal, having regard to the term of the lease or any other circumstances which he or she considers relevant, approves in a particular case: s 13(3)(a). However, the statutory option cannot be exercised while there exists any unremedied default by the tenant in respect of which the landlord has given the tenant a written notice: s 13(3)(b). An exception to the requirement of the 30 days’ notice applies where the issue as to whether there is an unremedied default under the lease by the tenant has been referred by one of the parties to the Registrar. In this situation the Registrar has the discretion to determine that the tenant is not required to exercise the option before the expiry of the current or the option term if the question referred to the Registrar has not been decided by the time of such expiry: s 13(3a). Section 13(3a) goes on to state: … where the Tribunal makes that determination and the question is not decided by the time of such expiry, the current term or the option term, as the case requires, is deemed to be extended — (a) if the question is decided in favour of the landlord, to the time when the question is decided; or (b) if the question is decided in favour of the tenant, to a period ending 7 days after the tenant received notification of the

decision, and where paragraph (b) applies, the tenant may exercise the option referred to in subsection (3) during the period designated in that paragraph. Section 13(2) specifies two circumstances where the statutory option is not exercisable: (a) where the tenant occupied the premises as a retail shop for a period, [page 929] including any time prior to the commencement of the Commercial Tenancy (Retail Shops) Agreement Act 1985, ending immediately before the commencement of the current lease, and that period plus the current lease and any option totals five years or longer; and (b) where the statutory option to renew would be inconsistent with the terms of a head lease under which the landlord holds the premises. This is statutory recognition of the common law principle of title paramount: see Jones v Lavington [1903] 1 KB 253; Markham v Paget [1908] 1 Ch 697; Kenny v Preen [1963] 1 QB 499. Where a tenant assigns the lease, the term to which the assignee becomes entitled is the balance of the term of the assigning tenant as at the date of assignment including, where applicable, the statutory option arising under s 13(1): s 13(8). This new subsection, added in 1990, affirms the decision of the Full Court of the Supreme Court of Western Australia in Dileum Pty Ltd v J K Corporation Pty Ltd (1989) 1 WAR 244 that an assignment does not amount to a grant of a lease entitling the assignee to exercise the statutory option under s 13(1). In the event that the statutory option to renew is inconsistent with the terms of a head lease, the basic rule is that the statutory option shall not continue beyond the last day which the retail shop lease can lawfully continue: s 13(4). However, this provision must be read subject to s 13a, which is designed to prevent avoidance of the Act. Section 13A(1) states, inter alia, that where the landlord under a retail shop lease holds the premises under a head lease with which it would be inconsistent for the retail shop lease to be

continued for a five-year period under s 13, and where the head lessor and head lessee under the head lease are related, the head lease shall be taken to be modified to the extent necessary to remove the inconsistency. The provision thus prevents the artificial creation between related parties of a head lease, which would prevent the exercise of the statutory option in respect of the later sublease of a retail shop. An exhaustive list of parties who are declared to be related for the purposes of s 13A(1) is specified in s 13A(4). The list is cast very widely, and includes companies which are deemed to be related to each other by the Corporations Act 2001 (Cth). Where the head lessor or the head lessee comprises more than one person, s 13A(1) will apply if a relationship under s 13A(4) is established with any of the persons of whom or of which that party is comprised: s 13A(5). Any dispute as to the extent of the modification required by s 13A(1) may be referred for resolution to the State Administrative Tribunal for a final determination, as if the dispute related to a retail shop lease: s 13A(2). The only exception to the operation of s 13A, where the circumstances giving rise to that section exist, is contained in s 13A(3). Pursuant to this subsection, the Registrar may, upon application made to him or her by the head lessor, determine that there are bona fide commercial reasons, other than the desire to avoid the operation of s 13, for the head lease and the provisions thereof giving rise to the inconsistency under [page 930] s 13A(1). In these circumstances, the tribunal is empowered to declare s 13A(1) to be of no effect in relation to the head lease. The terms and conditions under which a lease is renewable under the statutory option are specified in s 13(5). These are the same as under the original lease except that the tenant does not have any further statutory option to renew the lease. If the lease does not provide for rent review, the rent payable during the term of the statutory option is determined having regard to the market rent of the premises ascertained as provided in s 11(2): see [26.10].

Section 13(5) does not make it clear whether any dispute over the market rent is to be determined as under s 11(3). Logically, this should be so, but the statutory option arguably does not fit within the initial words of s 11(3): ‘A retail shop lease … shall be taken to provide that …’, since the option may be considered not to be a ‘retail shop lease’. If this is the case, the dispute may be referred directly to the tribunal, pursuant to s 16, rather than initially to one or two licensed valuers, as under s 11(3).

Termination of lease [26.13] Subject to one exception, the Act does not contain special sections relating to the forfeiture of leases. In the absence of such provisions, the basic common law rules as to termination by forfeiture (as amended by the Property Law Act 1969) (see [17.1] and following) will continue to apply to retail shop leases. The exception is contained in s 13(6). This subsection prohibits a landlord under a retail shop lease from determining the lease at any time before the end of the five year statutory option under s 13(1) except in any of the following circumstances: (a)

By reason of default by the tenant or failure of the tenant to remedy any such default in accordance with the lease; or (b) by reason that — (i) it would be inconsistent with a head lease under which the premises are held by the landlord for the retail shop lease to continue; and (ii) that inconsistency is not, by reason of section 13A(1), removed; or (c) under and in accordance with a provision that is included in the lease with the approval in writing of the Tribunal given under subsection (7) or (7a); or (da) under and in accordance with a provision of the lease that is the same, or substantially the same, as a provision prescribed for the purposes of this section; or

(d) where the Tribunal has granted an application by the tenant under subsection (7b), in relation to a lease referred to in paragraph (aa). It is unclear whether this provision applies in addition to s 81(1) and (2) of the Property Law Act 1969 or is in substitution for it. Section 81(1) is more specific than s 13(1)(a) of the Commercial Tenancy (Retail Shops) Agreements Act in as much as [page 931] it requires the landlord in his or her notice to seek compensation in money for the breach and prevents the landlord from exercising a right of forfeiture for breach unless the tenant fails within a reasonable time (which must be at least 14 days) to make compensation in money, to the satisfaction of the landlord, for the breach: see [18.2]. Section 81(2) gives the court a discretion to grant relief against forfeiture. As s 13 is designed as a measure to assist tenants, it is submitted that s 13(6) must be read as applying in addition to the requirements of s 81(1) and (2) of the Property Law Act. Any other interpretation would result in tenants under retail premises leases being in a significantly weaker legal position than under the general landlord–tenant law, which was not the intention of the legislature. (b) By reason that — (i) it would be inconsistent with a head lease under which the premises are held by the landlord for the retail shop lease to continue; and (ii) that inconsistency is not, by reason of section 13A(1), removed. This is another application of the title paramount principle: see Jones v Lavington [1903] 1 KB 253; Markham v Paget [1908] 1 Ch 697. (c) Under and in accordance with a provision that is included in the lease with the approval in writing of the Tribunal … Paragraph (c) relates to s 13(7), by which the State Administrative Tribunal, upon application by the landlord, may determine the lease before the end of

the five-year period if he or she is satisfied that special circumstances exist by reason of which such approval ought to be given. (d) Where the Tribunal has granted an application by the tenant under subsection (7b). This refers to the power of the tribunal, on the written application of a tenant or prospective tenant, to order that an option for renewal of a lease under s 13(1) does not arise. The subsection requires that this power cannot be exercised unless the Registrar is satisfied that the application was made under the free will of the tenant or prospective tenant, and that the circumstances of the case warrant the granting of the application.

Determination of disputes [26.14] As discussed in [26.10], disputes between the parties as to the amount of rent payable as a result of a rent review must be referred at first instance to one or two licensed valuers, and cannot be referred to the State Administrative Tribunal unless the valuers fail to reach agreement or the leave of the Registrar has been first obtained: s 11(3) and (5). Apart from s 11(3) and (5), all other issues which either party believes to be a question arising under the lease may be referred by either party to the State Administrative [page 932] Tribunal: s 16(1). Where this arises, the Registrar must determine whether or not the question referred to him or her is a question arising under the lease (s 16(1)(a)) and, if so, must hear the matter with a view to obtaining a solution acceptable to both parties (s 16(1)(b)). The tribunal is given wide-ranging powers to make orders for the payment of money, restraining orders and orders requiring work to be performed: s 26(1). These powers include the power to order the parties to enter into an agreement varying a retail shop lease as specified in the order where the

tribunal has found that the tenant was before entering into the lease misled by the landlord as to the meaning or effect of a term or condition of the lease: s 26(1a). By s 26(1aa), the tribunal may also make an order terminating a lease for a breach by the landlord for failing to incorporate a tenant guide into a lease: see [26.3]. The tribunal also has extensive powers where claims are made concerning misleading or deceptive conduct and unconscionable conduct: Pt 11A. The Act has not abolished the previous jurisdiction of the courts over retail shop leases disputes. Where a court has jurisdiction at general law over an issue, proceedings may be instituted either before the court or by way of a reference to the tribunal, but not both: s 27(1). Proceedings may be transferred from the tribunal to a court (and vice versa) if all parties agree or at the direction of the court or tribunal: s 27(2) and (3). The District Court held in Black Swan Holdings Pty Ltd v Hurst (1993) 9 SR (WA) 285 that a ‘direction’ is more in the nature of a ruling than an order, and that a direction under s 27 cannot be the subject of a statutory right of appeal. The basis for the decision was that s 27 is purely procedural in nature and does not finally determine the matter (at 287). Judge Yeats added obiter in this case (at 289) that in determining whether a matter should be transferred to the District Court, the tribunal should not only consider whether it has jurisdiction, but whether the complexity of the legal issues makes it more appropriate for the matter to be heard by a court. Strzelecki Holdings Pty Ltd v Bogdanis Nominees Pty Ltd [2002] WASC 62 decided that s 27(1) must be decided on a ‘first come, first served’ basis and that if one party initiates proceedings before the tribunal, the court has no power to entertain an application by the other party.

[page 933]

27 Retail Tenancies Legislation: South Australia Background [27.1] The first legislation introduced in South Australia relating to retail tenancies was the Statutes Amendment (Commercial Tenancies) Act 1985, which followed the publication of the reports of two separate Working Parties commissioned by the state government on the need for law reform in this area. The legislation was assented to on 14 March 1985 and proclaimed to commence on 1 January 1986. It amended the Landlord and Tenant Act 1936 by inserting a new Pt IV, ‘Commercial Tenancy Agreements’, comprising ss 54–75. The Landlord and Tenant (Commercial Tenancies) Regulations, made pursuant to the Act, came into effect on the same date (Gaz 88 of 5 December 1985 at 1716). Substantial legislative amendments were effected by amending legislation in 1987 and 1990. The regime established by the 1985 legislation has been repealed and replaced by the Retail Shop Leases Act 1995 and the Retail Shop Leases Regulations 1995. As a result of a 1997 amendment, the legislation has now been renamed the Retail and Commercial Leases Act 1995 (the Act) and the Retail and Commercial Leases Regulations 1995 (the Regulations). The Regulations were revoked on 1 September 2010 and replaced by the Retail and Commercial Leases Regulations 2010. Although this legislation contains a number of novel provisions, it appears to have been closely modelled on the

Retail Leases Act 1994 (NSW) (see Chapter 24). For this reason many of the judicial precedents that have developed in New South Wales are likely to have direct application in South Australia. [page 934] The Act and the 1995 Regulations entered into force on 30 June 1995 (except for Pt 4A, comprising ss 20A–20N, which entered into force on 6 October 1997). The 2010 Regulations entered into force on 4 April 2011. Pursuant to s 81(2) of the new legislation, however, the 1985 Act continues to apply to a retail shop lease entered into before the commencement of the 1995 Act. For this reason, in respect of fixed-term leases, the repealed legislation will continue to have relevance for several years to come. It will have no further application to periodic leases, however, as s 81(2)(b) states that in this case the new legislation applies to the lease as from the beginning of the first period after the first anniversary of the commencement of the Act (that is, 30 June 1996) as if there were a novation of the lease on that date. A review of the Act was completed in April 2016. The review made 20 recommendations about a broad range of issues. Submissions concerning the recommendations closed on 26 August 2016. The South Australian Small Business Commissioner is preparing a report on the submissions for the Minister for Small Business. Impetus for further reform of the retail tenancies legislation is maintained by the establishment by s 73 of the Retail Shop Leases Advisory Committee, formed after consultation with all interested organisations: reg 12. The functions of this committee are to keep the administration of the Act under review and to make reports on matters that it thinks appropriate or on which the minister requests a report: s 74.

Premises subject to the Act [27.2] Section 4(1) states that the Act applies to a retail shop lease if the premises to which the lease applies consist of a retail shop or a retail shop

together with an adjacent dwelling. ‘Retail shop lease’ is defined in s 3(1) as meaning: … an agreement under which a person grants or agrees to grant to another person for value a right to occupy a retail shop for carrying on a business — (a) whether or not the right is a right of exclusive occupation; and (b) whether the agreement is express or implied; and (c) whether the agreement is oral or in writing, or partly oral and partly in writing. This definition is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries. At common law, it is essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] WASCA 317; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If an occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For the nature of a licence, see Chapter 3. In contrast, an occupant will come [page 935] within the scope of the Act by virtue of the definition of ‘retail shop lease’ regardless of whether his or her right of occupation is regarded as exclusive. To fall within the scope of the Act the premises must also constitute a ‘retail shop’. ‘Retail’ is not defined in the Act. For its meaning at common law, see [23.2]. ‘Retail shop’ is defined in s 3(1) as meaning: (a)

business premises — (i) at which goods are sold to the public by retail; or (ii) at which services are provided to the public, or to which the

public is invited to negotiate for the supply of services; or (b) business premises classified by regulation as premises to which this Act applies, but does not include business premises of a class excluded by regulation from the ambit of this definition. By virtue of these statutory definitions, it is essential to the application of the Act that the tenant is carrying on a ‘business’. ‘Business’ is not defined in the Act. At common law, the term has been given a wide meaning. It has been held that a business exists wherever there is continuity, diligence and repetition of actions constituting the activities, provided that the operations have some significant commercial purpose or character. Alternatively, the actions or operations must be of such magnitude that, given favourable seasons or conditions, they will by maturity or further activity reasonably be expected to develop into a viable venture. See Town Investments Ltd v Department of the Environment [1976] 1 WLR 1126 at 1149–50; Wellington v Norwich Union Life Insurance Society Ltd [1991] 1 VR 333 at 335; Durant v Greiner (1990) 21 NSWLR 119 at 128; Abernethie v A M & J Kleiman Ltd [1970] 1 QB 10 at 20; American Leaf Blending Co v Director-General of Inland Revenue [1979] AC 676 at 683–4; Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 705. ‘Business’ would thus seem to be sufficiently wide to include the retail provision of services, such as solicitors’ and accountants’ offices, doctors’ and dentists’ surgeries, and privatised public services, such as SA Water. Despite the wide scope of s 4(1), there are several exceptions to the application of the Act. Unlike in the equivalent legislation in other states, there is no exclusion under the South Australian Act of premises with a floor area exceeding 1,000 square metres. The exception in South Australia is based on the quantum of rent. Pursuant to s 4(2)(a), the Act does not apply to leases where the rent payable exceeds $250,000 per annum or any greater amount prescribed by regulation. On 4 April 2011 that amount was increased to $400,000 pursuant to the Regulations. The purpose of this subsection is presumably to limit the scope of the Act to small retail premises. The effect, however, will vary widely between regions of the state and suburbs of Adelaide according to prevailing property values. The exclusion of premises with the annual rental exceeding $400,000 is likely to be widespread in the

City of Adelaide and inner suburbs where property values are highest, and to have little application in country areas or in the outer suburbs of Adelaide where rentals are much lower. In WST Pty [page 936] Ltd v GRE Pty Ltd [2012] 115 SASR 216 (FC), the Full Court rejected the landlord’s argument that in determining whether or not the Act applied the relevant rent was that payable when the lease was entered into and excluded subsequent rent increases. Also excluded from the Act are leases where the right of occupation arises either under an agreement for the sale and purchase of premises, a mortgage, or a scheme under which a group of adjacent premises is owned by a company and the premises comprising the group are let by the company to persons who jointly have a controlling interest in the company: s 4(2)(b). Further exclusions operate where the tenant is a public company or a subsidiary of a public company, an ADI, an insurance firm, the state or Commonwealth Crown or Crown agency or instrumentality, or a municipal or district council: s 4(2)(c). The exclusion in favour of the Crown in all its capacities is perhaps the most significant of these exceptions as it would exclude a wide range of public services. The privatised services, such as SA Water, would, however, fall within the scope of the Act. It is noteworthy that the exclusion in favour of the Crown is different from the other states, where the equivalent legislation expressly binds the Crown: see [23.2], [24.2], [25.2] and [26.2]. The regulations may exclude from the application of the Act, either conditionally or unconditionally, specified classes of retail shop leases: s 4(3). Regulation 4(2) grants unconditional exclusion from the Act in favour of, among others, the operator of the National Railway Museum, any retail shop lease to which the Aboriginal Lands Trust is the landlord, and any retail shop lease to which Distribution Lessor Corporation, Generation Lessor Corporation or Transmission Lessor Corporation is a landlord. Further exemptions to any or all of the provisions of the Act may be granted, on application by an interested person, either by the minister or the Magistrates

Court in respect of any particular actual or proposed retail shop or retail shop lease: s 77. The Act was proclaimed as applying to all leases entered into on or after 30 June 1995. Section 6 defines ‘entered into’ as meaning either (a) when both parties have executed the lease, (b) the tenant enters into possession, or (c) the tenant begins to pay rent (but not in the case of an advanced payment or rent made to secure the premises), whichever of these events occurs first.

Express duties of the landlord Give the tenant a disclosure statement [27.3] The landlord is required to give the tenant a disclosure statement before a retail shop lease is entered into or renewed: s 12(1). For the meaning of ‘entered into’, see [27.2]. The contents of the disclosure form are specified in s 12(2) and (3), and a form of disclosure statement is prescribed in reg 5 and Sch 1 to the Regulations. The prescribed form requires information to be given to the tenant in relation to [page 937] the specific details of the tenancy, outgoings to be paid by the tenant, retail shopping centre details, details as to the interest of the landlord and details as to any agreements or representations. The remedy available to a tenant if the landlord fails to comply with s 12(1), or gives a statement containing information which, at the time it is given, is materially false or misleading, is to apply to the Magistrates Court. Pursuant to s 12(5), the following orders may be made at the discretion of the court: an order declaring the lease partially or totally void, an order varying the lease, an order requiring the landlord to refund money and/or pay compensation to the tenant, and an order dealing with incidental or ancillary matters. In relation to the application of s 12(5), see Xclusive Pty Ltd v Christian Brothers Inc [2001] SASC 380; Farooqi v Mazzocchetti [1998] SASC 6619; Hamilton-Smith v CFS

Managed Property Ltd [2005] SASC 461; Jenkinson v Young [2004] SADC 30. However, no order can be made if the landlord has acted honestly and reasonably and ought reasonably to be excused, and the tenant has not been substantially prejudiced: s 12(6). For the interpretation of s 12(6), see Hamilton-Smith v Managed Property Ltd, above. No guidance as to the meaning in s 12 of the phrases ‘false and misleading’ and ‘honestly and reasonably’ is given in the legislation. This is a question of fact in each case. In the context of s 52(1) of the Trade Practices Act 1974 (Cth) (now s 21 of the Australian Consumer Law), ‘misleading’ has been stated to mean ‘to lead astray in action or conduct; to lead into error, to cause to err’: Weitmann v Katies Ltd (1977) 29 FLR 336 at 343. According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public … into error’. (See also Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171.)

Give a prospective tenant a copy of the lease at the negotiation stage [27.4] Section 11 states: A person must not, as lessor or on behalf of the lessor, offer to enter into a retail shop lease, invite an offer to enter into a retail shop lease or indicate by written or broadcast advertisement that a retail shop is for lease, unless — (a) the person has a copy of the proposed retail shop lease (in written form, but not necessarily including particulars of the lessee, the rent or the term of the lease) available for inspection by a prospective lessee; and (b) the person makes a copy of the proposed lease available to any prospective lessee as soon as the person enters into negotiations with the prospective lessee concerning the lease.

[page 938] A maximum penalty of $500 is prescribed for breach of this section. This provision is similar to that in New South Wales: see [24.4]. It is designed to inform prospective tenants as to the obligations they will incur by entering into the lease rather than simply inform them as to the terms of the lease that they have signed. From a consumer protection standpoint, this provision appears to be forward-looking, although it could be argued to make a mockery of the notion that a lease is a freely-negotiated contract between the parties. Interestingly, there appears to be no obligation on the landlord to give the tenant a copy of the completed lease which, depending on the negotiations, could differ significantly from the proposed lease form initially drafted by the landlord.

Not to require the payment of a premium [27.5] A provision of a retail shop lease is void to the extent that it requires the payment of a premium in connection with the granting of the lease: s 15(1). In addition, s 15(1) makes it an offence for a landlord to seek or accept the payment of a premium. Such an offence is punishable by a maximum penalty of $10,000: s 15(2)(a). In addition, regardless of whether the landlord is convicted of such an offence, the tenant is entitled to recover from the landlord as a debt any payment made or the value of any benefit conferred on the landlord by way of premium: s 15(2)(b). Section 44(1) and (2) mirrors the wording of s 15(1) and (2) in the context of the payment of a premium in connection with the granting of consent to an assignment of a retail shop lease. Similarly, the provision is void and the landlord or the landlord’s agent is guilty of an offence punishable by a maximum penalty of $10,000. The Act makes no reference to the prohibition of a premium where the tenant seeks the landlord’s consent to sublet the premises, although this situation is arguably covered by s 15(1) read together with the definition of ‘retail shop lease’. It is submitted that ‘lease’ should be interpreted as including a sublease. ‘Premium’ is defined in s 3(1) as ‘money paid, or a benefit given, to or as directed by the lessor or the lessor’s agent in connection with the granting, renewal, extension or assignment of a lease (and a reference in this Act to the

payment of a premium extends to giving a benefit)’. The meaning of the term is couched very broadly and roughly equates with the definition of ‘key money’, which is the preferred term used in other jurisdictions: see, for example, [24.5]. Pursuant to s 15(3), the landlord may receive from the tenant payment under a contract for carrying out work on the premises before the tenant goes into occupation, and payment for a right or option to enter into a retail shop lease provided that when the lease is entered into the money is refunded or applied towards rent payable under the lease. The landlord may also legitimately require and receive payment of preparatory costs, rent in advance, a security bond, payment for goodwill of a business that has [page 939] been conducted by the landlord, payment for the grant of a franchise in connection with the granting of the lease, and payment for plant, equipment, fixtures and fittings sold by the landlord to the tenant. Section 14(1) provides that the tenant’s liability for preparatory costs cannot exceed the actual amount of the stamp duty payable on the lease and the lease registration fees, plus onehalf of the other preparatory costs. No definition is given in the Act of ‘goodwill’. At common law, ‘goodwill’ is ‘the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom’: IRC v Muller & Co’s Margarine Ltd [1901] AC 217 at 223. ‘The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom’: Federal Commissioner of Taxation v Williamson (1943) 67 CLR 561 at 564. In Hoogerdyk v Condon (1990) 2 NSWLR 171 at 175, it was explained as follows: Goodwill includes every positive advantage that has been acquired in carrying out a business which would give a reasonable expectancy of preference in the face of competition … The [elements which compose goodwill] will vary from business to business. There will be

local goodwill represented by the fact that people will patronise the business nearest their home or place of business. There will be personal goodwill generated by the persons who in fact carry on the business. There will be goodwill or habit brought about by customers getting into the habit of buying things at a particular outlet … It must always be remembered, however, that all these aspects of goodwill attach to a particular business and one cannot consider goodwill apart from the business. For earlier definitions of goodwill, see Daniell v Federal Commissioner of Taxation (1928) 42 CLR 296 at 302–3; Hill v Fearis [1905] 1 Ch 466 at 471; Trego v Hunt [1896] AC 7 at 17–18; Austen v Boys (1858) 2 De G & J 626 at 635–6; 44 ER 1133 at 1136; Wedderburn v Wedderburn (No 4) (1856) 22 Beav 84 at 104; 52 ER 1039 at 1047; Potter v Inland Revenue Commissioners (1854) 10 Exch 147 at 159; 156 ER 392 at 396–7. Any security bond required by the landlord is limited to four weeks’ rent under the lease: s 19(1)(b). Section 19 states that the maximum amount of the security bond is to be calculated by reference to the rent payable during the first six months of the lease (expressed as a weekly rent) but if a lease provides rent concessions, such as a rent-free period or a period of rent at concessional rates, the concession will be disregarded. After a minimum of two years the landlord may demand an additional sum by way of security bond where the rent has increased in order to bring the total amount of the security bond up to four weeks’ rent: s 19(2). The landlord or the landlord’s agent must provide the tenant with a receipt for the security bond within seven days: s 19(5), and within 28 days (if a registered agent) or seven days (in all other cases) must pay the bond to the Small Business Commissioner: s 19(5). A breach of s 19(1) or (5) is punishable by a maximum penalty of $1000. Any bond received is paid by the Commissioner into the Retail Shop Leases Fund, established under Pt 10 of the [page 940] Act: s 70(3). Either party can apply to the Commissioner for the payment of the security bond: s 20. Except in the case of a joint application by the parties,

where this occurs written notice must be given by the Commissioner to the other party, and seven days allowed for that party to lodge a written notice of dispute: s 20(4). If no written notice of dispute is received within the designated seven-day period, the Commissioner may pay out the amount of the security as proposed in the application: s 20(5). In the case of a dispute, the matter must be referred by the Commissioner to the Magistrates Court for determination: s 20(6).

Other duties [27.6] Unlike the Residential Tenancies Act 1995 (SA), the Retail and Commercial Leases Act is not designed to codify the law of landlord–tenant in respect of those premises subject to the Act. Accordingly, except to the extent to which the Act covers the field, the rights and duties of both parties established at common law remain in existence: Paralowie Investments Pty Ltd v Maurice Srour Pty Ltd [2006] SADC 16 at [82]. The most important of these are: on the part of the landlord, the duty to allow the removal of fixtures in certain circumstances (see [10.5]), and the implied condition of fitness for habitation at the commencement of a lease (see [8.5]); and on the part of the tenant, not to commit waste (see [10.3]), to use and deliver up the premises in a tenant-like manner (see [8.6]), and to deliver up possession of the premises at the expiration of the term: see [8.8]. In addition, the general common law rule applies that a covenant will be implied wherever it is necessary to give ‘business efficacy’ to the contract: Liverpool City Council v Irwin [1977] AC 239 at 258; Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381 at 392; Dikstein v Kanevsky [1947] VLR 216 at 221; Legal & General Assurance Society Ltd v Expeditors International (UK) Ltd [2007] 2 P&CR 10; Gollin & Co Ltd v Karenlee Nominees Pty Ltd [1982] VR 493; see further [8.1]. Further duties are contained in s 38(1)(a)–(f): see [27.12]. These subsections require that a tenant be compensated where the landlord takes specified forms of action which adversely affects the tenant’s trading in the retail shop. These duties overlap with the common law covenant of quiet enjoyment and the duty not to derogate from a grant: see [8.4] and [8.5]. It is submitted that the common law requirements have not been impliedly repealed in their application to retail leases by s 38 as the scope of the common law duties are much broader.

Right to at least five years’ tenancy and options to renew the term [27.7] Section 20B creates a basic right for retail tenants in most circumstances to be granted a minimum period of tenancy of five years. The purpose of this is to enable the tenant to benefit from the goodwill established in respect of the business. [page 941] The five-year period includes any further term provided for by any agreement or option for the acquisition by the tenant of a further term as an extension of the lease. Note that an option of renewal or extension is not taken into account for the calculation of the five-year period if it is given after the lease is entered into: s 20B(1). A lease continues for five years regardless of a change in the particular person leasing the property; the requirement that a lease continues for five years is not frustrated by an assignment or sublease: Henningsen v Nolan [2004] SASC 105 at [35]. In Profile Events Pty Ltd v West Beach Trust [2010] SADC 52 the court held that a tenant occupying premises under an ‘interim arrangement’ pending the conclusion of a long-term lease had acquired a five-year term under s 20B. This aspect of Profile Events was not disturbed on appeal on this basis because by that stage the point was of no practical significance: see Profile Events Pty Ltd v West Beach Trust [2011] SASCFC 1 at [68]–[77]. Section 20B(2) states that, in the case of leases which contravene this section, the lease remains valid but the term of the lease is extended to bring the term (or the aggregate term) to five years. An illustration of the operation of this subsection would be a lease for a term of two years with an option to renew for a further period of two years. In this case the initial term of the lease would be extended to three years in order that the period of the term and the option combined amounted to five years. A number of exceptions to the five-year term are specified in s 20B(3): (a) the lease is a short term lease (that is, six months or less in duration);

(b) the lease contains a certified exclusionary clause; (c) the tenant has been in possession of the premises for at least five years; (d) the lease arises where the tenant holds over after the termination of an earlier lease with the consent of the landlord and the period of holding over does not exceed six months (for the meaning of ‘holding over’, see Henningsen v Nolan [2004] SASC 105 at [25]ff; Erlington v Judd (1964) SR (NSW) 150 at 153); (e) in the case of a retail shop lease that is a sublease, the term of the retail shop lease is as long as the term of the head lease allows; or (f) where the lease arises when the tenant holds over after the termination of an earlier lease with the landlord’s consent and the period of holding over does not exceed six months. In Capital and Equity Group Pty Ltd v Hilton Central Ltd [2010] SASC 197 it was held that s 20B(3)(a) did not exclude a monthly periodic tenancy from the operation of s 20B because such a tenancy is not entered into for a ‘fixed term of 6 months or less’. Certain premises are exempted from the operation of s 20B(3) by the regulations. Pursuant to reg 7 the section is inoperative in certain specified cases where the landlord is a body corporate and the tenant or tenants have a controlling interest in the body corporate, and where the landlord and tenant are in a close family relationship. [page 942] The Act grants a right of preference to existing tenants to renew their lease in certain circumstances. Pursuant to s 20D(1), if a landlord of premises in a retail shopping centre proposes to relet the premises, and an existing tenant wants a renewal or extension of the term, the landlord must give preference to the existing tenant over other possible tenants of the premises. The landlord must presume that the existing tenant wants a renewal or extension of the term unless the tenant has notified the landlord in writing within twelve months before the end of the term that the tenant does not want a renewal or extension: s 20D(2). Certain exceptions to the right of preference are specified

in s 20D(3). The most important of these is para (b): ‘the existing lessee has been guilty of a substantial breach or persistent breaches of the lease’: applied on the facts in Debonair Nominees Pty Ltd v J & K Berry Nominees Pty Ltd [2000] SASC 244. Para (d)(ii), which contains an exception where the landlord ‘requires vacant possession of the premises for the lessor’s own purposes during the relevant period (but not for the purpose of carrying on a business of the same kind as the business carried on by the lessee)’, does not require the landlord to justify its decision; it is enough if the decision is bona fide: Khuu & Lee Pty Ltd v Corporation of the City of Adelaide (2011) 110 SASR 235 at [34] (FC). Where a right of preference exists, the landlord must, within at least six months (but not more than 12 months), begin negotiations in good faith with the existing tenant for a renewal or extension of the lease: s 20E. Where there is no right of preference, the landlord must at least six months (but not more than 12 months) before the end of the term notify the tenant in writing of that fact and state why in the circumstances of the case there is no right of preference: s 20F. If the landlord breaches either s 20E or s 20 and the tenant requests an extension of the lease before the end of the term, the term of the lease is extended until the end of six months after the landlord begins the required negotiations or gives the required notice: s 20G. The right of preference has been held to apply at the end of the full term of the lease and does not override any contractual option to renew: Paralowie Investments Pty Ltd v Maurice Srour Pty Ltd [2006] SADC 16 at [93].

Rent review [27.8] Section 22 provides for restrictions on the adjustment of base rent. ‘Base rent’ is defined in s 22(1) as ‘rent, or that component of rent, which comprises a specified amount (whether or not there is provision for the amount to change)’. Section 22(2) states: A retail shop lease must not provide for a change to base rent less than 12 months after the lease is entered into and must not provide for a change to that rent less than 12 months after any previous change to that rent, but this subsection does not apply to a change to base rent by a specified amount or specified percentage.

As stated by the Explanatory Note to the subsection, although s 22(2) prevents a lease providing for an increase to current rent more than once in 12 months, it does not prevent a lease providing for the rent to increase by a fixed amount every [page 943] few months. In addition, it does not prohibit a term in the lease that the rent be increased to current market rent after 12 months and then to be increased by a certain percentage at fixed regular intervals thereafter. If the lease provides for the base rent to be changed in a manner which may result in a decrease in rent (for example, a provision for the rent to change to current market rent), such a provision is void to the extent that it enables the landlord or any other person to prevent the rent from decreasing: s 22(4). Current market rent is controlled by ss 23, 35 and 36. Where a retail shop lease provides for rent to be changed to current market rent, or where a retail shop lease provides an option to renew or extend the lease at current market rent, the following definitions are deemed to apply. ‘Current market rent’ is ‘the rent that, having regard to the terms and conditions of the lease and other relevant matters, would be reasonably expected for the shop if it were unoccupied and offered for renting for the use to which the shop may be put under the lease’: ss 23(1)(a), 35(1)(a). ‘Current market rent’ excludes the value of goodwill created by the tenant’s occupation and the value of the tenant’s fixtures and fittings: ss 23(1)(b), 35(1)(b). Any dispute as to the amount of current market rent is to be determined by valuation carried out by a person appointed by agreement or, failing agreement, by the President of the Australian Institute of Valuers and Land Economists (SA Division) Inc: ss 23(1)(c), 35(1)(c). Where a retail shop lease contains an option to renew or extend the lease at current market rent, the tenant is given the opportunity to have the current market rent determined early. By s 36(1)(a), except where the parties have already agreed as to the actual amount of the current market rent, within two to six months before the last day on which the option may be exercised under

the lease, the tenant is entitled to request a determination of the rent. Where such a request is made, the period within which the option may be exercised is varied so that the last day on which the option may be exercised is 21 days after the determination of rent is made and notified to the tenant or the last day of the lease, whichever is the earlier: s 36(1)(c). An exception applies to leases of 12 months or less. In this case the request by the tenant for early determination of the current market rent must be made within 30 days to three months before the last day on which the option may be exercised under the lease: s 36(2).

Rent based on turnover [27.9] The Act permits the determination of rent by turnover, but provides certain statutory controls. The relevant legislation is contained in s 24. ‘Turnover’ is not defined in the Act, although by s 24(6) it is stated to include ‘gross takings, gross receipts, gross income and similar concepts’. This is consistent with the [page 944] definition of ‘turnover’ by McNair J in Aris-Bainbridge v Turner Manufacturing Co Ltd [1951] 1 KB 563 at 564, that the term ‘must be taken to include all sums received and receivable in the year as the result of … trading, whether normal or abnormal’. The Act by s 24(1) declares that a number of charges and payments do not constitute ‘turnover’. The most important of these are: refunds on any transaction; refunds on deposits given where a lay-by, hire purchase or credit sale is cancelled; delivery charges; the price of merchandise returned to shippers, wholesalers or manufacturers; uncollected credit accounts that are written off; discounts allowed to customers in the normal course of business; any tax imposed at the point of retail sale or hire of goods or services; and

losses incurred in the resale or disposal of merchandise purchased from customers in the ordinary course of business. Section 24(1)(m) also states that turnover does not include an amount of a prescribed class. To date, no class has been prescribed by the regulations. Unlike some interstate legislation, s 24(1) does not include ‘any other matter which the landlord and the tenant agree does not form turnover’. It is submitted, however, that this omission is of no consequence, as the legislation leaves it open for the parties to agree to include any matter within the list of matters which do not constitute turnover, provided that it is not inconsistent with the terms of s 24(1). The purpose of s 24(1) is to ensure that the turnover figures used for the rent calculation accurately reflect the true financial position of the tenant, and to prevent the fixing of an artificially high rent by taking into account matters which the legislature has determined do not constitute genuine receipts and profits. Where a valid rent turnover clause is in operation, there is an implied term in the lease for any under or overpayment of rent resulting from actual turnover differing from projected or presumed turnover to be adjusted within one month after the tenant requests such an adjustment and provides the necessary information to the landlord: s 24(2). Unless both parties agree to more frequent adjustments, such a request may only be made once in the first year of the lease term and thereafter no more than once annually: s 24(3)–(4).

Rent and other payments [27.10] Where under the terms of a lease the landlord has an obligation to fit out the premises, pursuant to s 21(2) the tenant is relieved of his or her obligation to pay rent until such time as the landlord has substantially complied with the fitout obligations. The landlord is not able to deny the tenant possession of the retail shop merely because the landlord has not complied with the fitout obligations: s 21(2)(b). [page 945]

A retail shop lease may include a provision for the tenant to contribute to a sinking fund to cover the landlord’s outgoings in respect of major items of repair and maintenance: s 29. However, this section stipulates certain rules as to the use of this money by the landlord in order to prevent abuse by the landlord: the money must be paid into an interest-bearing account, and all amounts in the account must only be applied for the purposes for which the sinking fund was established: s 29(b)–(c). Outgoings to which the tenant is required to contribute are controlled by ss 31–34. The landlord is required to give the tenant a written estimate of the outgoings to which the tenant must contribute, itemised as in the form of disclosure statement prescribed in the Schedule: s 31(a). This estimate must be provided before the lease is entered into and throughout the lease at least one month before the commencement of each accounting period: s 31(b). In addition, the landlord is required to give the tenant an expenditure statement detailing all expenditures by the landlord on account of outgoings to which the tenant contributes, and the basis on which the tenant’s contribution is determined: s 31(2). Section 33 provides for periodic adjustment between the parties to take account of any underpayment or overpayment in respect of the outgoings under the lease: s 33(a). Contributions by the tenant, and expenditure by the landlord, in respect of repairs and maintenance is not to be taken into account for the purposes of adjustment under s 33 to the extent that the contribution relates to payment into a sinking fund under s 29: s 33(c). In respect of retail shopping centres, tenants are not liable to contribute towards a non-specific outgoing of the landlord (defined as an outgoing not specifically referable to any particular shop in the centre) in excess of ‘an amount calculated by multiplying the relevant amount of that outgoing by the ratio of the lettable area of the shop to the total of the lettable areas of all the retail shops in the shopping centre to which the outgoing is referable’: s 34(1). An outgoing is ‘referable’ to premises if the premises enjoy or share the benefit resulting from the outgoing: s 34(2). The purpose of s 34 is to prevent landlords requiring tenants to make up for any deficit in the total of tenants’ outgoings as a result of one or more shops in the centre being vacant.

Implied terms

[27.11] The Act contains, in ss 18 and 37–40, a number of implied terms of general application to retail shop leases. In addition, a number of other implied terms, which are limited in their application to retail shopping centres, are created in ss 54–57 and s 61. ‘Retail shopping centre’ is defined in s 3(1) as: a cluster of premises with the following attributes: (a) at least five of the premises are retail shops; and (b) the premises are all owned by the same person, or have (or would if leased have) the same lessor or the same head lessor, or comprise lots within the same community plan under the Community Titles Act 1996 or units within a single strata plan under the Strata Titles Act 1988; and [page 946] (c) the premises are located in the one building or in two or more buildings that are either adjoining or separated only by common areas or other areas owned by the owner of the premises; and (d) the cluster of premises is promoted as, or generally regarded as constituting, a shopping centre, shopping mall, shopping court or shopping arcade.

Implied terms of general application [27.12] Section 37 imposes a requirement on landlords to give notice to tenants of any proposed alterations or refurbishment of the building of which the retail shop forms part, where such work is likely to adversely affect the business of the tenant. Before such work can occur, the landlord is obliged to give the tenant at least one month’s notice in writing. The only exception is where there is an emergency; in these circumstances the landlord is obliged to give the tenant the maximum period of notice that is reasonably practicable in the circumstances. Note that this section does not apply to routine maintenance or repairs: s 37(2). Section 38(1) contains a number of implied obligations on the landlord, the

breach of which will entitle the tenant to reasonable compensation for any consequential loss or damage, if the matter is not rectified as soon as reasonably practicable after the receipt by the landlord of written notice from the tenant requesting him or her to do so. The obligations are: (a) (b) (c)

(d)

(e) (f)

not to inhibit access of the tenant to the shop in any substantial manner; not to take any action that would substantially inhibit or alter the flow of customers to the shop; not to unreasonably take any action that causes significant disruption of, or has a significant adverse effect on, trading in the shop (in determining this matter, due consideration must be given to whether the landlord has acted in accordance with ‘recognised shopping centre management practices’): s 38(2); to take all reasonable steps to prevent or stop anything within his or her control that causes significant disruption of, or which has a significant adverse effect on, trading in the shop; to rectify any breakdown of plant or equipment under his or her care or maintenance; and in the case of a shop within a retail shopping centre, to adequately clean, maintain or repair the retail shopping centre, including common areas.

The only exceptions are in an emergency (s 38(4)(a)), where the landlord is under a duty to take action as a result of a requirement imposed by a public or local authority (s 38(4)(b)), or where the lease contains a provision limiting a claim after the likelihood of the occurrence of the problem was specifically drawn to the tenant’s attention in writing before the lease was entered into: s 38(3). [page 947] The obligations contained in paras (a)–(d) deal with matters which in certain circumstances might otherwise fall within the common law principle

of non-derogation from grant or the landlord’s implied covenant of quiet enjoyment (see [8.4]), and the application of these common law principles would seem to have been impliedly repealed to the extent to which they overlap with the provisions in s 38. It should be noted, however, that both the covenant of quiet enjoyment and the principle of non-derogation from grant are much broader than the terms of s 38(1) (a)–(d) and would apply in circumstances outside the scope of the statutory provisions: see [27.6]. In S&A Gallo Pty Ltd v Hollowood Pty Ltd [2012] SASC 176 the court held (at [47]) that s 38 was ‘intended to address disturbances and disruptions, usually of a physical character, to or within the shopping centre or directed specifically at particular shop premises and which are in the lessor’s control’. If a retail shop lease provides for the termination of a lease on the grounds of a proposed demolition of the building containing the retail shop, there is an implied term that the landlord cannot terminate the lease on that ground unless he or she first provides the tenant with details of the proposed demolition sufficient to indicate a genuine proposal to demolish the building within a reasonably practicable time after the termination of the lease: s 39(1). In these circumstances, the landlord must give the tenant at least six months’ notice of termination, unless the lease term is for 12 months or less, in which case only three months’ notice is required: s 39(1)(b) and (2). Where the landlord serves a notice under s 39, the tenant may at any time give seven days’ notice of termination to the landlord: s 39(1)(c). Section 3(1) defines ‘demolition’ as including ‘a substantial repair, renovation or reconstruction of the building that cannot be carried out practicably without vacant possession of the shop’. This definition appears to be significantly broader than the meaning of ‘demolition’ in everyday use. Section 40 deals with damaged premises. It states that in case of damage to the shop or the building containing the shop, the tenant’s liability to pay rent is suspended for the period during which the shop cannot be used or is inaccessible due to the damage; where the shop is still useable but its useability is diminished due to the damage, the tenant’s liability for rent is reduced in proportion to the reduction in useability. A tenant is not relieved of the obligation to pay rent if the damage results from the wrongful act or negligence of the tenant unless the landlord is insured against loss of rent under an insurance policy and the tenant contributes to the insurance

premium: s 40(2). Section 40 is of much broader application than the common law doctrine of frustration: see [6.10]. An innovative provision contained in the South Australian legislation is s 18(1), which states that if the landlord under a retail shop lease had, before entering into the lease, notice from the tenant that the premises were required for carrying on a particular business, the lease is taken to include a warranty that the premises will, for the duration of the lease, be structurally suitable for the purpose. This avoids the need [page 948] for the tenant to plead that such a term should be implied at common law in order to give business efficacy to the contract: see [8.1]. An exception to s 18(1) arises where the landlord gives notice of exclusion of the warranty in the form prescribed by reg 6 before execution of the lease by the tenant: s 18(2). It is expressly provided by s 18(3) that an assignee or subtenant may sue on the warranty if the assignment or sublease is taken for the purpose of carrying on a business of the same kind. This subsection is interesting in that it overcomes the problem of lack of privity of estate, which at common law prevents the subtenant from taking action against the landlord: see [1.2].

Implied terms in relation to retail shopping centres [27.13] Sections 54–56 concern advertising and promotion costs in respect of retail shopping centres. Where the lease requires the tenant to pay any amount to the landlord in respect of advertising and promotion costs, the landlord must make available to the tenant a marketing plan that gives details of the landlord’s proposed expenditure during each accounting period: s 54. Once each accounting period the landlord must make available to the tenant a written audited advertising and promotion expenditure statement in respect of those costs to which the tenant is required to contribute under the lease: s 55. Any amount contributed by a tenant which is not spent for the purpose for which it was contributed must be carried forward and applied by the landlord

towards future expenditure on advertising or promotion of the retail shopping centre: s 56. Retail shop leases in shopping centres commonly include a provision enabling the landlord to relocate the tenant’s business within the centre. Section 57 specifies minimum entitlements for the tenant in these circumstances. The relocation can only be carried out pursuant to a genuine proposal for the refurbishment, redevelopment or extension of the centre, which work cannot be carried out practicably without vacant possession of the tenant’s shop. Such details are to be furnished to the tenant: s 57(a). The tenant is entitled to at least three months’ written notice of relocation: s 57(b). Where this occurs, the tenant may elect to terminate the lease within one month after the relocation notice is given (s 57(d)), or may take a new lease of the alternative shop on the same terms and conditions as under the existing lease: s 57(c). The landlord must pay the reasonable costs of the tenant’s relocation, including legal costs: s 57(f).

Prohibited terms [27.14] As in the case of implied terms (see [27.11]–[27.13]), the Act contains a number of prohibited terms which apply to all types of retail shop leases, and others which apply only to retail shopping centres. In most cases a breach of a prohibited term is an offence punishable by a maximum specified monetary penalty. A prosecution for [page 949] an offence must be commenced within two years of the date of the alleged offence (s 79(1)), but in particular cases this period may be extended by the minister in writing to a maximum of five years: s 79(2)–(3). From the standpoint of the protection of the tenant, the most significant prohibited terms of general application relate to the prohibition of the payment of premiums: see [27.4]. Section 41 prohibits the inclusion of any provision in a lease which has the effect of limiting the tenant’s right to

employ persons of his or her own choosing. The landlord is permitted, however, to specify in the lease minimum standards of behaviour for persons working in the shop, and may require the tenant to comply with the requirements of any industrial award or agreement (such as a construction site agreement) affecting a retail shopping centre in which the shop is situated. In relation to prohibited terms specific to retail shopping centres, perhaps the most important provision is s 58, which prevents the landlord terminating a lease for inadequate sales: see [27.17]. A tenant cannot be prevented from carrying on a business outside the retail shopping centre, although the tenant can be restrained from using the name of the shopping centre in connection with any outside business activity: s 59. Section 51 makes it an offence for a landlord to divulge any information as to the turnover of the tenant’s business to any person except with the tenant’s consent or in other specified limited circumstances. A lease must not contain a provision which has the effect of preventing or restricting the tenant from joining, forming or taking part in the activities of any tenants’ association: s 60(1). In relation to trading hours, s 61(1) states that these may only be regulated if all the following requirements are met: the shop is within an enclosed shopping complex, the lease does not reduce the trading hours to less than 50 hours per week. In addition, the core trading hours (that is, the hours for which the shop is required to be open for business) must not exceed 54 hours a week (not including any time on a Sunday), and must have been approved in a secret ballot by a majority of at least 75% of the tenants of each shop affected by the issue.

Void terms [27.15] In addition to those provisions referred to in [27.14], a number of provisions in a retail shop lease are declared by the Act to be void. In many cases these provisions simply clarify under the legislation terms that would in any event have been void at common law. Breach of any of these provisions is not an offence. Certain obligations imposed on the tenant to make or reimburse capital expenditure are declared to be void under s 13. A provision that requires the tenant to compensate the landlord for depreciation of the premises attributable

to ordinary fair wear and tear is void, but may be taken into account in the calculation or assessment of base rent: s 13(3). A provision requiring the tenant to fit or refit the shop is void unless the [page 950] disclosure statement discloses the obligation and contains sufficient details to enable the tenant to obtain an estimate of the likely cost of complying with the obligation: s 13(1)(b). A breach of the last-mentioned provision would probably have been void at common law under the contractual principle of voidness for uncertainty: see [1.5]. In relation to Pt 8 of the Act, which provides additional requirements for retail shopping centres, s 53 declares void any provision which requires the tenant to undertake any advertising or promotion of the tenant’s business. Section 53(2) expressly exempts, however, a provision that requires the reimbursement by the tenant to the landlord for advertising and promotion costs incurred by the landlord. A retail shop lease for a shop that is required to be open for business during core trading hours is void to the extent that it requires the tenant to pay, or pay a contribution towards, the costs of operating the shopping complex outside core trading hours when the tenant’s shop is not open for trading: s 61(3).

Assignments and subleases [27.16] The existing common law rules regarding the tenant’s right to assign and sublet have been replaced by the new statutory provisions in ss 43– 46. These provisions amount to a significant improvement as regards protection of the tenant’s interests, in as much as under general South Australian landlord–tenant law there are no restrictions against the landlord acting in an unreasonable manner when the tenant requests the right to assign or sublet. The only relevant provision of general application, under s 12(4) of the Landlord and Tenant Act 1936 (SA), is the power vested in the courts to

grant relief against forfeiture where the landlord vexatiously withholds consent to an assignment or sublease. Section 43 restricts the grounds on which the landlord may withhold consent to an assignment of a retail shop lease to the following: (a)

where the proposed assignee proposes to change the use to which the shop is put; (b) where the proposed assignee is unlikely to be able to meet the financial obligations of the tenant under the lease; (c) where the proposed assignee’s retailing skills are inferior to those of the assignor; and (d) where the tenant has not complied with the procedural requirements under s 45 for obtaining the landlord’s consent to assignment. Section 45 requires, inter alia, that the request for the landlord’s request must be in writing, and the tenant must provide the landlord with all reasonable information concerning the financial standing and business experience of the proposed assignee. Pursuant to s 45(d), the landlord must deal expeditiously with any such request for consent, and is deemed to have consented if he or she does not respond to the request within 42 days. A landlord may not require the payment of a premium for the giving [page 951] of consent (s 44(1)), but may require the payment of a reasonable sum in respect of legal or other expenses incurred in connection with the consent, provided that such expenses are substantiated: s 44(3). From the tenant’s standpoint, subleases are treated less favourably. Section 46 states that a retail shop lease may contain a provision which allows a landlord in his or her absolute discretion to refuse to consent to the grant of a sublease, licence or concession in respect of the shop. In the absence of such a provision prohibiting a sublease, a tenant has the power to grant a sublease: Henningsen v Nolan (2004) 88 SASR 214; Commonwealth Life (Amalgamated)

Assurance Ltd v Anderson (1945) 62 WN (NSW) 240; Booton v Clayton (1948) 65 WN (NSW) 164. An assignment or sublease made in breach of ss 43–46 or the common law is nevertheless effective to pass the interest, the landlord’s right being in an appropriate case to determine the lease by forfeiture: Secure Parking (WA) Pty Ltd v Wilson [2005] WASC 264; Daventry Holdings Pty Ltd v Bacalakis Hotels Pty Ltd [1986] 1 Qd R 406; Commonwealth Life (Amalgamated) Assurance Ltd v Anderson (1945) 46 SR (NSW) 47. See [15.5]. Mulligan J held in Debonair Nominees Pty Ltd v J & K Berry Nominees Pty Ltd [2000] SASC 244 that the various statutory provisions in the Act have not altered the common law position in relation to assignments, namely that an assignment of a lease does not create a new lease and that the original tenant remains liable for all breaches of covenant throughout the term of the lease because privity of contract remains: see Chapter 15.

Termination of lease [27.17] The Act does not seek to codify the law relating to termination of leases. Thus, the basic common law rules as to termination of leases (as amended by the Law of Property Act 1936 and the Real Property Act 1886) will continue to apply to retail shop leases to the extent to which there is no contradictory provision in the Retail Shop Leases Act. Where the shop or building of which the shop forms part is damaged, if the landlord notifies the tenant that the landlord considers that the damage is such that repair is impracticable or undesirable, either party may give the other seven days’ written notice of termination: s 40(1)(c). In other circumstances of damage, if the landlord fails to repair the damage within a reasonable time after the tenant requests the landlord to do so, the tenant may give the landlord seven days’ notice of termination: s 40(1)(d). The effect of this latter provision is to impose an obligation on the landlord to repair any damage which arises, even damage caused by the tenant. The position of the landlord is safeguarded in that s 40(1)(e) preserves the right of the landlord to recover damages from the tenant in respect of any damage or destruction. The use by the tenant of the right to terminate the tenancy under s 40(1)(d) would appear to be fraught with

[page 952] difficulty as there is no indication in the legislation as to the meaning of a reasonable time; if the tenant’s notice is successfully challenged by the landlord the tenant will be liable for all rent since the invalid notice of termination. Section 58 states that any provision in a lease that permits or otherwise provides for the termination of a lease on the ground that the tenant or the tenant’s business has failed to achieve specified sales or turnover performance is prohibited. Such a provision is not declared to be void, but would be treated at common law as void ab initio as being a contract illegal as formed: see N Seddon and M Ellinghaus, Cheshire and Fifoot’s Law of Contract, 10th ed, LexisNexis Butterworths, Ch 10; Anderson Ltd v Daniel [1924] 1 KB 138. It would thus be unenforceable: Re Mahmoud and Ispahani [1921] 2 KB 716; Chai Saw Yin v Liew Kwee Sam [1962] AC 304; Haddin v Le Feuvre [1969] 2 NSWR 32. Unlike in the other jurisdictions with retail tenancy legislation, the South Australian Act establishes a statutory procedure for the disposal of abandoned goods left on the rented premises after the termination of a lease. The relevant provision is s 76, which follows closely the terms of the Residential Tenancies Act 1995 (SA) s 97. Where the goods are perishable foodstuffs or their value is less than a fair estimate of the cost of their removal, storage and sale, the landlord may at least two days after taking possession of the premises remove and destroy or dispose of the goods: s 76(1)(a). In other circumstances, however, the landlord must store the goods in a safe place and manner for at least 60 days: s 76(1)(b). Within seven days of storing the goods the landlord must give notice of the storage in the form prescribed under reg 12 to the tenant and any other interested party, and must publish notice of the storage in a newspaper: s 76(2). Any person entitled to possession of the goods may reclaim them by paying to the landlord the reasonable costs of their removal and storage: s 76(4). If the goods are not reclaimed within the 60-day period, the landlord must sell the goods as soon as practicable by public auction: s 76(5). On the sale, the landlord may retain the costs of removing, storing and selling the goods and any amounts owed by the tenant under the lease and pay the balance to the owner of the goods, if known, or in other cases to the

Commissioner for payment into the Retail Shop Leases Fund established under Pt 10 of the Act: s 76(6). The purchaser of goods at the public auction will obtain a good title against other claimants: s 76(7).

Determination of disputes [27.18] Dispute resolution provisions are contained in Pt 9 of the Act. Jurisdiction to resolve disputes under the Act is vested in the Magistrates Court (s 68(1)), except where the proceedings involve a monetary claim in excess of $100,000, in which case the matter must be referred to the district court: s 69. The Magistrates Court is given extensive powers to make orders. In addition to powers to order compensation, [page 953] possession and orders restraining breaches of the Act or lease, the court may relieve a party from the obligation to comply with a provision of the lease; it may reinstate rights under a lease that have been forfeited or otherwise terminated; and it may require the payment of rent into the Magistrates Court until the lease has been performed or an application for compensation has been determined: s 68(2). For the construction and application of s 68, see Glenelg Backpackers Resort Pty Ltd v 1–3 Alexander Terrace Pty Ltd [2003] SASC 196 (FC). In any court proceedings, the Commissioner is given the power to intervene: s 67(1). The Commissioner is responsible for the overall administration of the Act (s 7), and is given widespread functions under s 9. Intervention would presumably be considered where the Commissioner foresees points of principle as to the interpretation of the Act arising from any particular decision. Where intervention occurs, the Commissioner becomes a party to the proceedings and has all the rights (including rights of appeal) of a party to the proceedings: s 67(2). Although mediation of disputes is not compulsory, the Act places emphasis on this form of dispute resolution. ‘Mediation’ is defined in s 3(1) as including:

Preliminary assistance in dispute resolution such as the giving of advice to ensure that — (a) the parties to the dispute are fully aware of their rights and obligations; and (b) there is full and open communication between the parties about the dispute. It is the function of the Commissioner to make arrangements to facilitate the resolution of disputes by mediation: s 63. Either the landlord or the tenant, or both, may apply to the Commissioner for mediation: s 64(1). In addition, the Magistrates Court or District Court has the right to refer a dispute to the Commissioner for mediation, and to stay the proceedings while the mediation is in progress: s 65. Consistent with normal principles of mediation, evidence of any admissions or statements made in the course of the mediation of a dispute is not admissible before a court: s 66.

[page 955]

28 Retail Tenancies Legislation: Australian Capital Territory Background [28.1] For many years retail tenancies in the Australian Capital Territory were governed by the Commercial and Retail Lease Code. This prescribed a code of conduct to govern the relationship between the parties. Breaches of the code would lead to mediation and a possible application under the Retail Tenancy Tribunal Act 1994. This system was repealed and replaced by the Leases (Commercial and Retail) Act 2001 and the Leases (Commercial and Retail) Regulations 2002 (hereafter referred to as the ‘Act’ and the ‘Regulations’, respectively). The Act and Regulations entered into force on 1 July 2002. While clearly influenced by retail tenancies legislation introduced earlier by other states (except Tasmania), the ACT Act has clarified many of the interpretation difficulties and ambiguities present elsewhere.

Premises subject to the Act [28.2] Section 12(1) states that the Act applies to the following major categories of premises: retail premises, premises located in the retail area of a shopping centre and small commercial premises. Specifically exempted are retail premises that constitute ‘large excluded premises’, which means premises with a lettable area larger than 1,000 square metres that are leased to a listed

public company or a subsidiary of a listed public company: s 12(7). ‘Small commercial premises’ means commercial premises with a lettable area of not more than 300 square metres: s 4 and Dictionary. Unlike other Australian jurisdictions, where the meaning of ‘retail’ has to be determined at [page 956] common law, s 7(3) defines ‘retail business’ as meaning a business involving ‘(a) the sale or hire of goods by retail; or (b) the supply of services by retail’. In Liangis Investments Pty Ltd v Ipex Itg Pty Ltd [2004] ACTSC 8 the Supreme Court held that while the goods sold were predominantly sold to government agencies and businesses, the premises were ‘retail premises’ because the goods were sold to ‘ultimate consumers’. In addition to retail and commercial premises, s 12(1) applies to the following premises under a lease: premises used to provide a combination of business accommodation and secretarial services; child care centres; sports centres; art galleries; gardening supply centres; and premises leased to an association or an unincorporated charitable entity. The Act provides for the application of the Act to further premises to be prescribed by regulation; certain premises of limited scope and significance have been prescribed under reg 3. For the purposes of s 12(1), the Act in s 8(1) defines ‘shopping centre’ as: a group of premises where — (a) at least 5 of the premises are — (i) retail premises; or (ii) small commercial premises; or (iii) premises prescribed by regulation for section 12 (1)(k); or (iv) a mixture of the premises mentioned in subparagraphs (i) to (iii); and (b) the premises — (i) have, or would have if leased, the same lessor or same head lessor; or

(ii) are units in a single unit plan under the Unit Titles Act 2001 and are managed by a single person; and (c) the premises are — (i) in a single building; or (ii) in buildings that adjoin, or are separated only by areas owned by the lessor of the premises; and (d) the group of premises is promoted as, or generally regarded as making up, a shopping centre, shopping mall, shopping court or shopping arcade. As in the equivalent provision in New South Wales and Western Australia (see [24.2] and [26.2]), the effect of the definition of ‘retail shop’ appears to give a broader scope to the Act to premises situated in a retail shopping centre than to premises located elsewhere. Where the premises are located in a retail shopping centre, the Act will apply in respect of any retail premises. The exclusion of premises with a lettable area exceeding 1,000 square metres was added out of recognition of the fact that large retail tenants do not suffer from inequality of bargaining power and do not need the statutory protection granted by the Act. It is noteworthy that the definition refers to ‘lettable area’ rather than ‘floor [page 957] area’ as in the case of some interstate legislation: see [26.2]. The ACT Act appears to avoid the ambiguities associated with the use of the word ‘floor’ in this context. ‘Lettable area’ seems to be sufficiently broad as to clearly encompass both enclosed and unenclosed areas. Any dispute over the measurement of the lettable area will be decided by the Magistrates Court: s 13. As in Victoria, it is assumed that in the case of a strata subdivision, the common property, not being part of the leased premises, cannot be counted within the ‘lettable area’: Retail Tenancies Award No 9 [1994] V ConvR ¶58518. The Act is stated in s 12(5) to apply to ‘an agreement, whether in writing or

not, that provides for the occupation of premises exclusively or otherwise, whether for a fixed term, periodically or at will’. This definition is of fundamental significance as it extends the scope of a lease beyond its traditional common law boundaries. At common law, it is essential that the occupant is granted exclusive possession of the premises before a lease can come into existence: Radaich v Smith (1959) 101 CLR 209; NZI Insurance Australia Ltd v Baryzcka [2003] SASC 190 (FC); P J Balnaves Nominees Pty Ltd v Third Szable Holdings Pty Ltd [2002] SASC 88; City of Rockingham v PMR Quarries Pty Ltd [2001] WASCA 317; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199. If an occupant is not granted exclusive possession, he or she is classified at common law as a licensee. For the nature of a licence, see Chapter 3. In contrast, an occupant will come within the scope of the Act by virtue of s 12(5) regardless of whether his or her right of occupation is regarded as exclusive. By s 12(2), the Act does not apply to premises prescribed by regulation and to leases for less than six months, unless the lease is a continuous occupation lease. Certain premises of limited scope and significance have been prescribed under reg 4. ‘Continuous occupation lease’ is defined in s 10.

Express duties of the landlord Give the tenant a disclosure statement [28.3] The landlord is obliged to give the tenant a disclosure statement for a proposed lease at least 14 days before the lease is entered into: s 30(2). By s 5, a lease is taken to be ‘entered into’ on the execution of the lease or the date of entering into possession of the premises by the tenant, whichever is the earlier. If the lease contains an option to extend the lease, the tenant may, not earlier than 3 months before the tenant may exercise the option, require the landlord to give the tenant a disclosure statement: s 30(3). In this situation, the landlord must give the tenant the statement within 14 days: s 30(4). These time limits do not apply, or apply as varied, where the tenant provides the landlord with a certificate signed by a lawyer stating that the tenant is aware of the time limits under s 30 and has chosen to waive the time limits

[page 958] or vary them as set out in the certificate: s 30(5). The tenant is required to sign and return the statement at the time the tenant returns the signed copies of the lease or within three months after the lease has been entered into, whichever is the earlier: s 32. Section 31 states that the statement must state the accounting period if the landlord’s accounting period is not a financial year, and must contain a written estimate of the outgoings the tenant is required to contribute to under the lease. On 13 February 2003 the Chief Minister approved a form of disclosure statement under s 157A: see approved form AF2003-4. By s 36, neither party must make a representation to the other party during negotiations for a lease (including a representation made in a disclosure statement) that the representer knows or should reasonably know is false or misleading in a material particular. No guidance as to the meaning of ‘misleading’ is given in the legislation. This is a question of fact in each case. In the context of s 52(1) of the Trade Practices Act 1974 (Cth) (now s 18 of the Australian Consumer Law), ‘misleading’ has been stated to mean ‘to lead astray in action or conduct; to lead into error, to cause to err’: Weitmann v Katies Ltd (1977) 29 FLR 336 at 343. According to Northrop J in Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81, a statement is misleading ‘if it would lead one ordinary member of the public … into error’. (See also RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164; Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 29 FCR 14; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198; Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171.)

Give a prospective tenant a copy of the lease [28.4] By s 28, the landlord must give the tenant a copy of the proposed lease as early as practicable in negotiations for the lease, unless the tenant has given, or has indicated an intention to give, a copy of the proposed lease to the landlord. This provision is designed to inform prospective tenants as to the

obligations they will incur by entering into the lease rather than simply inform them as to the terms of the lease that they have signed. Once the lease (or a provision of a lease) has been signed by the tenant, by s 25 the landlord must give the tenant a copy of the lease (or provision) signed by both parties within 21 days after the lease after the lease is signed by the lessor and tenant or, if the lease is to be registered, after the lease is registered by the Registrar-General. Not to require the payment of key money and lease preparation expenses. [28.5] ‘Key money’ is defined in the Dictionary as meaning an amount paid by or on behalf of a tenant to, or at the direction of, a landlord, or any benefit given to, or at the direction of, a landlord, but does not include rent, a payment for goodwill or other [page 959] business assets sold by the landlord to the tenant, a security bond or guarantee, an amount payable by way of outgoings, or any reasonable amount payable to a landlord for goods and services provided by the landlord to the tenant or for attendances on the tenant in relation to the preparations of documents relevant to a lease. A landlord must not demand or accept key money for the grant, extension or renewal of a lease, the consent of an assignment, sublease or mortgage of a lease, or the assignment, sublease or mortgage of a lease: s 38(1). Any breach of this provision entitles the tenant to recover the amount paid, or the value of the benefit given, as a debt owing by the landlord to the tenant: s 38(2). By s 23(1), each party to a lease must bear the party’s own costs in relation to the preparation of a lease. The fee for registering a lease under the Land Titles Act 1925 must be paid by the party requiring the registration: s 23(2).

Unconscionable conduct proscribed [28.6] Section 22 introduces new controls on both parties regarding unconscionable conduct. Section 22(1) states: ‘A party to a lease, or a party to negotiations for a proposed lease, must not, in dealings with another party to

the lease or negotiations, engage in conduct that is unconscionable or harsh and oppressive’. Section 22(2) contains a non-exhaustive list of the matters to which the Magistrates Court may have regard for the purposes of determining whether either party has contravened the section. The most significant of these listed considerations are the following: the relative strengths of the bargaining positions of the parties; whether, as a result of conduct engaged in by one party, the other party was required to comply with conditions that were not reasonably necessary for the protection of the first party’s legitimate interests; whether each party was able to understand the lease or any documents relating to the lease; the extent to which each party acted honestly; and the circumstances under which the tenant could have acquired a lease on similar terms over similar premises from someone other than the landlord. Section 22 is closely modelled on s 51AC of the Commonwealth Trade Practices Act 1974 (now s 21 of the Australian Consumer Law). The only changes are word changes to replace references to ‘consumer’ and ‘corporation’ with references to ‘lessor’ and ‘lessee’, the addition of other factors in the list of relevant considerations for the Magistrates Court in s 22(2), and the addition of the phrase ‘harsh and oppressive’. As ‘unconscionable’ would appear to be broader than ‘harsh and oppressive’, this latter phrase would appear to be redundant. In light of the close modelling of s 51AC on the Trade Practices Act, it appears that the many judicial precedents under s 51AC of the Trade Practices Act (s 21 of the Australian Consumer Law), will be applicable to s 22 of the Leases (Commercial and Retail) Act. In addition, because of the similarity between the unconscionable conduct provisions enacted in New South Wales, many of the judicial and tribunal precedents decided under the New South Wales legislation (discussed in [page 960] [24.6]) should also be relevant and applicable in the Australian Capital Territory. There is no room for s 22 to operate where there is a breach of contract: see Danel Investments Pty Ltd v Nexstar Investments Pty Ltd (No 2) [2011] ACTSC 120 at [304].

Controls on security bonds [28.7] Security bonds are governed by Pt 7 of the Act, comprising ss 39–45. The quantum of the bond is limited to the equivalent of three months’ rent payable under the lease: s 39(1). The bond is held by the landlord in trust for the tenant and must be paid by the landlord into an account that attracts interest: s 42. The interest forms part of the bond: s 42(b). The landlord is only permitted to make deductions from the bond for amounts owed by the tenant under the lease and the deduction does not infringe the terms of the Act: s 43. The note to s 43 gives illustrations of lawful deductions, including the following: the cost of repairs or restoration of the premises caused by damage (other than fair wear and tear) caused by the tenant; rent; insurance premiums payable by the tenant but not paid; and any legal fees incurred by the landlord in assigning or transferring the tenant’s rights under the lease. Any bond, together with interest earned, must be repaid to the tenant apart from lawful deductions within 30 days after the end of the lease or the tenant vacating the premises, whichever is the later: s 44. As an alternative to a security bond, a tenant may offer to the landlord a guarantee and/or an indemnity for the performance of the tenant’s obligations under the lease: s 40. Section 41 provides that the landlord must not unreasonably refuse to accept a bank guarantee: s 41. This section does not extend to other forms of guarantees, which the landlord is presumably entitled to refuse. Where a guarantee is paid, the lease is not being extended under an option and the tenant has performed the obligations secured by the lease, the landlord must return the guarantee document to the tenant not later than 30 days after the end of the lease or the tenant vacating the premises, whichever occurs later: s 45.

Right to at least five years’ tenancy [28.8] Section 104 creates a basic right for retail tenants in most circumstances to be granted a minimum period of tenancy of five years. The purpose of this is to enable the tenant to benefit from the goodwill established in respect of the business. The Act operates by way of granting the tenant

whose lease term is less than five years a statutory right to extend the term so that the total term of the lease is five years: s 104(2). Section 104(3) givers the tenant the right, not later than 90 days before the end of the term of the lease, to serve on the landlord a written notice exercising the right of lease extension and either lodge a caveat on the title of the land or to ask [page 961] the landlord to take reasonable steps to register the lease with the RegistrarGeneral: s 104(3). A number of exceptions to the five-year term entitlement are specified in the Act. Most significantly, the exception will not apply where the tenant is independently advised by a lawyer who was not acting for, or nominated by, the landlord about the effect of s 104 prior to entering into the lease: s 104(1) (b), (6). The provision is also not applicable to a change of use lease, a continuous occupation lease (defined in s 10), or a lease granted under an option to extend a previous lease if there was no break in the entitlement of the tenant to possession of the premises and the option was granted by the earlier lease or by an agreement entered into before or at the same time as the earlier lease was entered into: s 104(7). Where a lease is extended under s 104, the lease is deemed to have the same provisions as it had before the extension, subject to any changes necessary because of the lease extension, unless the parties agree otherwise or the Magistrates Court orders otherwise: s 105(2). The court has the power, on application by either party to a lease made within 14 days after the tenant exercises the right to extend the lease, to make an order varying the terms of the extension: s 105(3), (5).

Rent review [28.9] Rent review is circumscribed by the provisions in Div 8.1 of the Act, comprising ss 46–60. A discretionary rent review clause in a lease is void: s 46. Similarly void is a clause that allows the rent to be changed more than once in

each 12 month period: s 47(1). Limited specified exceptions to the latter provision apply under s 47(2), the most significant being a sublease provision that allows the sublessor to pass on to the subtenant an increase in the rent of the head lease, a provision in a lease that sets out the steps (whether by amount or percentage) that rent will increase by at predetermined times during the lease, or a provision that allows a change to be made to rent directly or indirectly attributable to GST. Market rent is controlled by s 52 and Sch 1. Clause 1.1 of the Schedule defines ‘market rent’ as: the amount that could reasonably be expected to be paid in rent for vacant possession of the premises on the open market if— (a) the premises were let by a willing but not anxious lessor to a willing but not anxious tenant; and (b) both parties acted knowledgeably and prudently; and (c) the use to which the premises may be put under the lease is taken into consideration; and (d) the amount is worked out in accordance with this schedule. [page 962] ‘Market rent’ excludes the value of goodwill created by the tenant’s occupation and the value of the tenant’s fixtures and fittings (cl 1.3), but includes the gross cost of occupancy (defined in cl 1.11), market evidence about comparable premises, including the level of incentives or inducements to lease being offered in the marketplace for comparable premises, and the proposed arrangements for rent review. Other relevant factors in evaluating market rent are also specified in cl 1.2. Any dispute as to the amount of market rent may be referred by either party to the Magistrates Court for mediation: s 52(2). The parties have the option to agree to a valuation of the market rent, in which case a valuer will be appointed by the court: s 52(4). The valuer must work out the market rent in accordance with the terms of Sch 1 (s 54), and must report to the court within

28 days after his or her appointment: s 53(1). In Bells Dry Cleaners Pty Ltd v Aapc Properties Pty Ltd [2005] ACTSC 47, the court ordered that the valuer be disqualified and a new valuer appointed where the determination did not expose the underlying facts such as comparable agreements for leases or other material on which the valuer relied. The determination also did not reveal any analysis or reasoning to show how the determined rental was derived. Where a lease is renewed, the landlord must not propose that the rent to be charged initially under the renewed lease exceed the market rent for the premises (other than under an option to renew contained in the lease): s 51(2). For a consideration of several aspects of the provisions governing the fixing of a market rent, see Kingsley’s Chicken Pty Ltd v Queensland Investment Corp [2007] ACTSC 77; Kingsley’s Chicken Pty Ltd v Queensland Investment Corp [2006] ACTCA 9; Kingsley’s Chicken Pty Ltd v Queensland Investment Corp [2009] ACTCA 9. Rent based on turnover. [28.10] The Act permits the determination of rent by turnover, but provides certain statutory controls. The relevant legislation is contained in ss 61–64. ‘Turnover’ is not exhaustively defined in the Act, although in the Dictionary it is stated to include ‘gross takings, gross receipts and gross income’. This is consistent with the definition of ‘turnover’ by McNair J in Aris-Bainbridge v Turner Manufacturing Co Ltd [1951] 1 KB 563 at 563, that the term ‘must be taken to include all sums received and receivable in the year as the result of … trading, whether normal or abnormal’. The Act by s 64 declares that a number of charges and payments do not constitute ‘turnover’. The most important of these are: refunds on any transaction; refunds on deposits given where a lay-by, hire purchase or credit sale is cancelled; delivery charges; the price of merchandise returned to shippers, wholesalers or manufacturers; uncollected credit accounts that are written off; [page 963]

discounts allowed to customers in the normal course of business; any amount directly or indirectly attributable to GST; and losses incurred in the resale or disposal of merchandise purchased from customers in the ordinary course of business. A lease that provides for the payment of turnover rent must include a provision to the effect that, within one month after receiving a written request by either party for an adjustment, an underpayment or overpayment of turnover rent resulting from actual turnover differing from estimated turnover must be adjusted by the other party: s 62(1). Unless the parties otherwise agree, a request made under s 62 may only be made once the first year of the lease term and thereafter at intervals of not less than one year: s 63. The landlord is expressly permitted to charge a combination of base rent and turnover rent: s 61.

Rent and other payments [28.11] A provision in a lease requiring the tenant to pay an amount for the capital costs of the building containing the leased premises or any building in the retail area of a shopping centre is void: s 76. Any provision requiring the tenant to pay for depreciation is similarly void: s 77. A lease provision is void if it requires the tenant to pay for or contribute towards the cost of a finish, fixture, fitting, equipment or service, unless the requirement to make the payment or contribution was in the disclosure statement: s 75. Outgoings to which the tenant is required to contribute are controlled by ss 65–72. The landlord is require to give the tenant a written estimate of the outgoings to which the tenant must contribute, itemised using the same item descriptions used in the list of outgoings in the disclosure statement: s 65. This estimate must be provided at least one month before the commencement of each accounting period of the landlord: s 65(1)(a). In addition, the landlord is required to give the tenant a written expenditure statement detailing all expenditures by the landlord on account of outgoings to which the tenant contributes, itemised as in the form of disclosure statement: s 65(1)(b). In relation to expenditures, the landlord is obliged to provide the tenant with an auditor’s report containing details of the landlord’s spending on outgoings that

the tenant contributed to in the accounting period: s 66(2). This report must be provided within three months after the end of the accounting period to which it relates: s 66(1). The requirement for the landlord to provide a periodic auditor’s report may be waived in respect of tenants of retail areas of shopping centres if a majority of the tenants in a retail area agree: s 72(1). Contributions by the tenant and expenditure by the landlord must only be in respect of the following specified matters: the common [page 964] areas of a shopping centre; the building containing the premises; rates, taxes, levies or other statutory charges incurred by the landlord in the landlord’s capacity as holder of an interest in the real estate; (in the case of shopping centres) the reasonable cost of promoting the premises or centre; and an outgoing for expenditure incurred in obtaining statistical information: s 70(1). Section 67 provides for periodic adjustment between the parties to take account of any underpayment or overpayment in respect of the outgoings under the lease.

Implied terms of general application [28.12] Section 79 imposes a requirement on landlords to give notice to tenants of any proposed alterations or refurbishment of the building of which the retail shop forms part, where such work is likely to adversely affect the business of the tenant. Before such work can occur, the landlord is obliged to give the tenant at least two months’ notice in writing. The only exception is where there is an emergency; in these circumstances the landlord is obliged to give the tenant the maximum period of notice that is reasonably practicable in the circumstances: s 80. Section 81 proscribes a number of actions by the landlord during the course of the lease. Any such action will entitle the tenant to reasonable compensation for any consequential loss or damage, if the matter is not rectified as soon as reasonably practicable after the receipt by the landlord of

written notice from the tenant requesting him or her to do so. The proscribed actions are: (a) not to materially inhibit the tenant’s access to the premises; (b) not to take any action that would materially inhibit or alter the flow of customers to the shop; (c) failing to fix a breakdown of plant or equipment under the landlord’s care and maintenance as soon as practicable; (d) for premises situated in the retail area of a shopping centre — failing to adequately clean, maintain or repair the shopping centre (including common areas); and (e) action which otherwise adversely affects the trade of the tenant by the landlord’s conduct without reasonable cause, whether by act or omission. The only exceptions are in an emergency or where the landlord is under a duty to take action as a result of a requirement imposed by a government entity: s 81(2). The obligations contained in paras (a)–(b) deal with matters which in certain circumstances might otherwise fall within the common law principle of non-derogation from grant (see [8.4]) or the landlord’s implied covenant of quiet enjoyment (see [13.15]), and the application of these common law principles would seem to have been impliedly repealed to the extent to which they overlap with the provisions in s 81. It should be noted, however, that both the covenant of quiet enjoyment and the [page 965] principle of non-derogation from grant are much broader than the terms of s 81 and would apply in circumstances outside the scope of the statutory provisions. If a retail shop lease provides for the termination of a lease on the grounds of a proposed demolition of the building containing the retail shop, there is an implied term that the landlord cannot terminate the lease on that ground

unless he or she first provides the tenant with details of the proposed demolition sufficient to indicate a genuine proposal to demolish the building within a reasonable time after the termination of the lease: s 78(a). In these circumstances, the landlord must give the tenant at least six months’ notice of termination, unless the lease term is for 12 months or less, in which case only three months’ notice is required: s 78(b). In interpreting similar legislation in New South Wales, the New South Wales Court of Appeal held that a proposal does not lose the character of a ‘genuine proposal’ because the commercial motivation of the lessor is to attract a tenant or particular kind of tenant: see Skiwing Pty Ltd v Trust Company of Australia [2006] NSWCA 276 at [21]–[22]. The Dictionary defines ‘demolition’ as including ‘any repair, renovation or reconstruction of the building that cannot be carried out practicably without vacant possession of the premises’. This definition appears to be significantly broader than the meaning of ‘demolition’ in everyday use. The equivalent New South Wales provision was interpreted extensively by Bryson J in Blackler v Felpure Pty Ltd [1999] NSWSC 958: see [24.13]. For the meaning of ‘substantial’, see Dainford Ltd v Lam (1985) 3 NSWLR 255 at 268 and Wong v Silkfield Pty Ltd [1999] HCA 48 at [27]. ‘Vacant possession’ means vacant physical possession, and legal entitlement to possession is of no significance: Blackler v Felpure Pty Ltd [1999] NSWSC 958 at [42]. Section 84 deals with damaged premises. It states that in case of damage to the premises or the building containing the premises, the tenant’s liability to pay rent or outgoings under the lease is suspended for the period during which the shop cannot be used. Where the premises is still useable but its useability is diminished due to the damage, the tenant may apply to the Magistrates Court for an order for payment of a lower amount of rent or outgoings than is required under the lease: s 85. On its wording, this provision appears to be applicable regardless of the cause of the damage, and applies even if the damage was due to the tenant or the tenant’s invitees. Note, however, that the New South Wales Administrative Decisions Tribunal has held that the equivalent New South Wales section cannot be used to subvert the well established principle of law that no one should profit from their own wrongdoing: Wu v Hawsher [2002] NSWADT 54 at [42]; Gu v Gold Valley Investments Pty Ltd [2005] NSWADT 169 at [42]. The section is of much broader application than the common law doctrine of frustration: see [6.10].

Implied terms in relation to retail shopping centres [28.13] Sections 131–133 concern advertising and promotion levies in respect of retail areas of shopping centres. Where the lease requires the tenant to pay any amount [page 966] to the landlord in respect of advertising and promotion costs, the landlord must make available to the tenant within one month before the start of each accounting period a marketing plan that gives details of the landlord’s proposed expenditure during each accounting period: ss 131(2), 132(2). A breach by the landlord of this provision renders the tenant not liable for the payment of contributions in respect of advertising or promotion costs: ss 131(3), 132(3). Any amount contributed by a tenant that is not spent for the purpose for which it was contributed must be carried forward and applied by the landlord towards future expenditure on advertising or promotion of the retail shopping centre: s 133. Sections 136–138 contain provisions protecting the tenant in cases where a retail shop lease contains a provision that enables the tenant’s business to be relocated. Relocation is only allowed for repairs, refurbishment, redevelopment or extensions of the shopping centre: s 137. In this situation, the tenant’s business cannot be required to be relocated unless and until the landlord has provided the tenant with details of the proposed refurbishment, redevelopment or extension sufficient to indicate that the work cannot be carried out practicably without vacant possession of the tenant’s premises: s 138(1). The landlord cannot require the tenant’s business to be relocated unless the landlord has given the tenant a three-month relocation notice that gives details of an alternative premises to be made available to the tenant within the retail shopping centre: s 136(1). The tenant must be offered the alternative premises on no less favourable terms than those contained in the existing lease: s 136(1)(a). Where relocation occurs, the tenant is entitled to payment by the landlord of the tenant’s reasonable costs of relocation: s 136(1) (d).

Sections 139–140 contain provisions relating to trading hours in retail shopping centres. Pursuant to s 139(1), the landlord is not entitled to change the core trading hours (defined in the Dictionary) of the centre of which the tenant’s premises forms part except with the written approval of the tenants of a majority of the premises within the centre. The tenant may trade outside the core trading hours of the shopping centre with the landlord’s agreement, provided that the tenant meets the costs associated with opening and operating the shopping centre for the additional hours, including any costs of advertising and promotion: s 140.

Prohibited and void terms [28.14] The Act contains a number of prohibited and void terms which apply to all types of retail shop leases, and others which apply only to retail areas of shopping centres. From the standpoint of the protection of the tenant, the most significant prohibited terms of general application relate to the prohibition of key money: see [28.5]. Section 26 prohibits the landlord from requiring a tenant under a retail shop lease to use the [page 967] services of a lawyer nominated by the landlord. In this case the penalty for a breach is that the landlord is bound to reimburse the tenant for the amount of fees paid to the lawyer by the tenant: s 27. A lease provision is declared to be void if it limits, or has the effect of limiting, a tenant’s right to employ people chosen by the tenant: s 73(1). The landlord is permitted to specify in the lease minimum standards of competence and behaviour for persons working in the shop, may prohibit work from being carried out on named property of the landlord, and may require the tenant to comply with the requirements of any industrial award, industrial agreement or enterprise agreement affecting the shopping centre containing the premises: s 73(2). In relation to prohibited terms specific to retail shopping centres, perhaps

the most important provision is s 142, which prevents the landlord from terminating a lease for inadequate sales. A tenant cannot be prevented from carrying on a business outside the retail shopping centre during or after the end of the lease, although the tenant can be restrained from using the name of the shopping centre in connection with any outside business activity: s 141. By s 129, a landlord must not divulge or communicate a tenant’s periodic turnover figures to any person except with the tenant’s consent or in other specified limited circumstances: s 129. A provision in a lease that allows the tenant to be relocated other than so that the landlord can repair, refurbish, redevelop or extend the shopping centre is void: s 137.

Assignments and subleases [28.15] The existing common law rules regarding the tenant’s right to assign and sublet have been replaced by the new statutory provisions in Pt 11 of the Act, comprising ss 93–103. If a tenant wishes to assign or sublet a lease, the tenant must first give a prospective assignee or subtenant a copy of the disclosure statement given to the tenant in relation to the lease (see [28.3]), together with details of any material change affecting the information contained in the statement since it was given to the tenant: s 93. Once this is done, the tenant may request the landlord in writing to agree to the assignment or sublease of the premises: s 95. Where this occurs, the landlord is entitled within 14 days to ask the tenant to provide the landlord with ‘1 or more of the following documents’: information about the financial standing of the prospective assignee or subtenant, or of any guarantor for the prospective assignee or subtenant; a certificate of occupancy for the premises; references relating to the ability of the prospective assignee or subtenant to operate the business on the premises; and information about the business skills of the prospective assignee or subtenant and about the proposed use of the premises: s 96. The reference in s 96 to ‘1 or more of the following documents’ replaced the former reference to ‘any or all of the following documents’ on 27 May 2015 upon the commencement of the Statute Law Amendment Act 2015.

[page 968] Once the tenant has made a request under s 95 (see above), the landlord has 28 days within which to consent or refuse to consent to the proposed assignment or sublease: s 99(2). Failure to respond within 28 days means that the landlord is taken to have consented to the request: s 99(4). The landlord is only permitted to refuse to consent to the request if it is reasonable in all the circumstances to do so: s 100(1). The landlord’s refusal to consent is deemed to be reasonable in the following circumstances: the prospective assignee or subtenant intends to use the premises for a purpose not allowed under the lease; the prospective assignee or subtenant does not have the financial resources or adequate skills to run the business; the tenant cannot produce a current certificate of occupancy for the premises; the prospective assignee or subtenant, or the business conducted by the proposed assignee or subtenant, will not be compatible with other tenants in the building containing the premises; or the tenant has failed to rectify a breach of the lease (other than a breach that has been waived by the landlord): s 100(2). If the landlord wishes to rely on another ground for refusing consent, the landlord has the burden of establishing that refusal to consent is reasonable: s 100(3). If the landlord refuses to consent to a proposed assignment or sublease, the tenant may apply within 14 days to the Magistrates Court to have the decision overturned: s 98(1). The only ground for overturning a refusal is that the refusal is unreasonable: s 98(2). Where an assignment takes place lawfully, the tenant and any guarantor of the tenant are released from further obligations under the lease: s 103. This provision overturns the common law rule that the tenant remains liable to the landlord for the performance of the terms of the lease until the term expires based on the principle of privity of contract: Debonair Nominees Pty Ltd v J & K Berry Nominees Pty Ltd (2000) 77 SASR 261; Sina Holdings Ltd v Westpac Banking Corporation [1995] 1 NZLR 1; Baker v Merckel [1960] 1 QB 657; Hindcastle Ltd v Barbara Attenborough Associates Ltd [1996] 2 WLR 262. Section 103 does not apply to subleases; in this situation, the tenant remains liable to the landlord for any breaches of the terms of the lease committed by the subtenant.

The Act specifies that the landlord may recover from the tenant within six months the reasonable costs of legal and other expenses incurred in the giving or refusing to consent to a proposed assignment or sublease: s 102(1).

Termination of lease [28.16] The Act provides some limited statutory provisions relating to termination in ss 113–127. Apart from these provisions, to the extent that there are no contradictory provisions in the Act, the basic common law rules as to termination of leases (as amended by the Civil Law (Property) Act 2006) (see [17.1] and following) will continue to apply to retail shop leases: see s 113. The Act confirms the common law rule that the [page 969] parties may terminate the lease by agreement: s 114. Section 115 states that a lease is terminated where the tenant abandons the premises. In this event, the landlord may apply to the Magistrates Court for an order for compensation for any losses caused by the abandonment, including the reasonable costs of advertising the premises for lease and of giving a right to occupy the premises to someone else: s 115(2). A tenant whose lease is extended by virtue of s 107 may terminate a lease by giving the landlord one month’s written notice of termination at any time after the day the lease would have expired if it had not been extended: s 116. A tenant is also entitled to terminate a lease if the landlord fails to provide a disclosure statement or provides a disclosure statement that is false or misleading in a material particular, or omits a material particular from a disclosure statement: s 117. The notice takes effect 15 days after service: s 120. Any such termination notice may be contested by a landlord before a Magistrates Court on the ground either that the landlord acted honestly and reasonably and ought reasonably to be excused for breaching s 117, or that the tenant is substantially in as good a position as the tenant would have been in if

the landlord not breached the section: s 119(1). In this situation, the notice does not take effect unless it is confirmed by the Magistrates Court: s 121. If a landlord has the right to terminate a lease, the landlord may give the tenant a 14-day notice of termination: s 122(1). In this situation, the tenant can either agree to the termination by written notice to the landlord or may contest the termination by applying to the Magistrates Court: s 122(2). Where the tenant contests the termination, the notice does not take effect unless it is confirmed by the court: s 122(4). Before the court will confirm the termination, the court must be satisfied that a ground exists for the termination, that the act or omission that gave rise to the termination ground is an act or omission of the tenant or subtenant, that the landlord had given the tenant notice of the breach and a reasonable opportunity to remedy it, and the termination ground justifies confirming the termination: s 123(1). Even if the court is satisfied under s 123(1), the court may refuse to confirm the termination if the breach has been remedied or the tenant gives an undertaking that the tenant will remedy the breach within 14 days: s 123(3). The court has the option of suspending an order for termination for up to 21 days on the ground that the immediate operation of the order would cause significant hardship to the tenant and that the hardship to the tenant would be greater than the hardship that the suspension would cause to the landlord: s 123(4). Rights are given to both parties to terminate a lease in certain circumstances where the premises have, or a building containing the premises has, been damaged: ss 89, 90. The landlord’s right under s 89 may be exercised where the landlord has served a notice on the tenant stating that the landlord does not intend to repair the premises, and either the premises has to be, or has been, demolished because of the damage, the damage extends to more than 50 per cent of the premises, or it is impracticable for the [page 970] landlord to repair or reinstate the premises within one year of the damage occurring, or the premises cannot be used because of the damage and the lease is due to expire within two years of the date when the damage occurred. A

reciprocal right is given to the tenant under s 90. By this section, this right may be exercised either when the landlord serves a notice stating that the landlord does not intend to repair the damage, or tells the tenant that the landlord will repair the premises but unreasonably departs from or takes no action in relation to the plan, or the premises will not be able to be used for their normal purpose within a reasonable period or for more than one year after the date that the damage occurred.

Determination of disputes [28.17] Dispute resolution provisions are contained in Pt 14 of the Act. Jurisdiction to resolve disputes under the Act is vested in the Magistrates Court, which is given unlimited monetary jurisdiction in respect of retail tenancy disputes: s 144. The Magistrates Court is given extensive powers to make orders. By s 144(3), the court may, in addition to its statutory powers under the Magistrates Court Act 1930, Ch 4, exercise any other power necessary or convenient, including the power to make preliminary and procedural orders and give interlocutory directions, and make orders to enforce relief, redress or a remedy. The Act places emphasis on promoting settlement of disputes rather than judicial orders. By s 147, the Magistrates Court must hold a case management meeting with the parties for each application that it receives. The purpose of this meeting is to assess the likelihood of the parties resolving the disputes before the proceeding is heard and to direct the hearing of the application as a result of the assessment. If, at a case management meeting, the court considers it likely that the parties may resolve a dispute, the court must promote the settlement of the dispute, using if thought appropriate mediation or any other form of alternative dispute resolution, and may adjourn the proceedings to allow the parties to attempt to settle the dispute: s 148. If the matter proceeds to court, the parties must bear their own costs unless the court makes a different order: s 154. The court must hear the dispute as quickly as possible and must keep costs for the parties as low as possible: s 149. The court is given the power to determine its own procedures: s 151. An appeal lies on questions of law or fact from the Magistrates Court to the

Supreme Court: s 155.

Index References are to paragraphs

Abandonment possession of rent damages, liability for …. 11.17 surrender, whether amounts to …. 16.18 what constitutes …. 16.18 Abatement of rent …. 11.3 Accident damage to premises, tenant not liable …. 10.12 Action for recovery of land agreement for lease, defence to, 13.2, see also Agreement for lease cause of action, existence of, at time of issue …. 17.12 defence failure to give notice to remedy breach …. 17.12 mesne profits, claim for, see Mesne profits mortgagee, by, 18.5, see also Mortgagee notice to quit, see Notice to quit notice to remedy breach unnecessary for plaintiff to allege …. 17.12 option to renew lease, exercise of, defence …. 14.5 plaintiff immediate right to possession, whether essential …. 17.12 re-entry, whether commencement of action constitutes …. 17.9, 17.10

rent, see also Rent acceptance of, after commencement of action, effect, 16.2 defendant in possession, allegation …. 17.12 non-payment …. 17.12 unequivocal demand for possession …. 17.11 writ of summons issue of effect …. 17.12 premature …. 17.12 prior to determination of tenancy …. 17.12 Action for rent …. 11.16 Administrators company in administration …. 5.9 rent payment requirement …. 5.9 service of notice …. 5.9 Agent attorney under power …. 5.13 capacity, to make and take leases …. 5.13 collector of rents as, authority …. 5.13 lease, execution by agent, authority necessary …. 1.6 form of authority to give and take …. 5.13 notice to quit by, see Notice to quit Statute of Frauds, see Statute of Frauds Agreement for lease, see also Lease action for damages, measure of, for …. 13.4 tender of lease prior to, whether necessary …. 13.3 when recoverable …. 4.9 certainty, requirement of, as to …. 1.5, 4.2

contract, rules subject to …. 4.1 discharged, as consequence of repudiation …. 16.26 enforceable defence to action for recovery of land …. 13.2 reasonable cause why possession should not be given, constitutes …. 13.2 specific performance …. 13.2 option to renew lease, exercise of, amounts to …. 14.5 part performance …. 13.2 quiet enjoyment, covenant for, whether implied …. 8.4 rights under …. 4.8 specific performance of, action for decree for, minutes of …. 13.9 jurisdiction to decree …. 4.11 part performance pleading …. 13.8 procedure in …. 4.11 readiness, willingness to perform …. 13.6 Statute of Frauds, caught by, 4.3, see also Statute of Frauds non-compliance with damages, when recoverable …. 4.9 defence, agreement relied upon as defence …. 4.10 tenant in possession, protected whether …. 4.8 usual covenants …. 9.1 void, invalid lease, may amount to …. 4.1 Walsh v Lonsdale, doctrine of …. 4.8 weekly tenancy enforceable, whether …. 13.5 writing, when necessary …. 1.6 Agreement to vary

recording …. 2.4 Aliens capacity to make and take leases, see Lease Alteration repair, compared with …. 10.8 Ambulatory notice to quit …. 20.7 Annoyance …. 7.14 Antecedent agreement rectification …. 6.8 Assignment …. 15.1 act of parties, by …. 15.1 assignee, indemnity from, lessee entitled to …. 15.21 breach of condition against damages for, measure …. 13.16 breach of covenant committed before, liability for …. 15.20 effect …. 15.5, 15.16 co-owner to other co-owner, effect …. 15.16 concept of …. 15.1 consent, see Consent covenant against effect of assignment in breach of …. 15.5, 15.16 equitable assignment, whether extends to …. 15.16 meaning of …. 15.5 mortgagees entry into possession, whether breach of …. 15.16 covenants, lessee liable, notwithstanding …. 15.18 equity in …. 16.13 evidence to show intention …. 15.2

form, of …. 15.2, 15.17 lease of re-entry, right of, effect on …. 15.5 whether registrar must register …. 15.5 legal, deed, whether necessary …. 15.17, 16.14 lessee, indemnity from assignee, entitled to …. 15.21 lessor–lessee relationship, effect on …. 15.1 liability on covenants …. 15.19 operation of law, by …. 15.1 option to purchase passes with …. 15.1 privity of contract, effect on …. 15.18 purported, whether determines tenancy …. 15.5 reversion of assignee proper person to give notice to quit …. 20.8 by lessor …. 15.5 concurrent lease, as …. 1.9 lessee paying rent to assignor …. 1.14 subletting, compared with …. 15.2 tenancy at sufferance …. 15.5 tenancy at will …. 15.5 voluntary, what is necessary for …. 15.16 writing, whether necessary …. 15.17, 16.14 Attornment clause …. 1.14 mortgage in, see Mortgage dispensing with common law demand for rent …. 11.24, 17.14 effect of …. 18.5 estoppel, tenancy by, whether created …. 1.14, 1.15 grant of reversion

valid without …. 1.14 without, at common law …. 1.14 meaning of …. 1.14 Australian Competition Tribunal …. 12.4 Australian Consumer Law commercial and shopping centre leases …. 12.7 consumer protection provisions …. 12.8 constitutional aspects …. 12.1 covenants affecting competition …. 12.3 declarations as to Act …. 12.6 exclusive dealing …. 12.4 fair trading legislation …. 12.15 false and misleading representations …. 12.10 interrelationship between Commonwealth and state legislation …. 12.16 misleading or deceptive conduct …. 12.9 misleading public as to services …. 12.12 origin and relevance to leases …. 12.2 proscription of harassment or coercion …. 12.10 remedies …. 12.14 unconscionable conduct …. 12.12 Bain v Fothergill damages, rule …. 13.4 Bankruptcy disclaimer …. 16.25 Breach of user covenant specific performance …. 7.8 Burden of proof consent unreasonably withheld, 15.11, see also Consent

Business use, covenant …. 7.8 Capacity leases, to make and take, see Lease Commercial and shopping centre leases, see Retail tenancies legislation — Australian Capital Territory; Retail tenancies legislation — New South Wales; Retail tenancies legislation — Queensland; Retail tenancies legislation — South Australia; Retail tenancies legislation — Victoria; Retail tenancies legislation — Western Australia Company foreign …. 5.8 in liquidation lease manner of executing lease by …. 1.6, 4.3 power to grant and take …. 5.8 lessor must choose between rent and term …. 5.9 Trade Practices Act, operation, and, see Trade Practices Act Trade Practices legislation, unconscionable conduct …. 12.1 Concurrent lease, see also Lease action for recovery of land, who should bring …. 1.9 commencement of …. 1.9 concurrent lessee entitled to benefit of lessee’s covenants …. 15.20 future lease compared with …. 1.9, 1.10 meaning of …. 1.9, 20.8 nature of …. 1.9 possession, taking effect …. 1.9, 1.10 reversion, lease of …. 1.9, 1.10 rights given by …. 1.9

sublease …. 1.9 term, commencement of …. 1.9 Condition, see Covenant Consent, see also Approval assignment of sublease to licensed premises, in relation to …. 15.7–15.15 refused, remedy, where …. 15.9 unreasonably withheld burden of proof …. 15.11 grounds for refusing …. 15.13, 15.14 not to be …. 15.5 covenant not to assign without, effect of …. 15.5 breach of, effect …. 15.5, 15.16 fine prohibited …. 15.15 Contracts lease intention of parties …. 6.4 court, deleted provisions …. 6.5 repudiation …. 18.2 Controller liability to pay rent …. 5.9 subsequent conduct …. 6.6 Co-owners capacity to make and take leases, see Lease Corporation, see Company Costs lease preparation and execution of …. 13.3 renewal of lease …. 14.7

valuation fee …. 14.7 Court documents, deleted provisions …. 6.5 Covenant assignee of term liable on covenants …. 15.19 to indemnify lessee …. 15.21 assignment of lease, liability on, after …. 1.6, 15.18–15.21 assignment against, 7.11, see also Consent assignment in breach of, effect …. 15.5, 15.16 breach of, measure of damages …. 13.16 consent not to be unreasonably withheld …. 15.5, 15.8 effect at common law …. 15.5 equitable assignment, whether extends to …. 15.16 fine prohibited …. 15.15 injunction, may be restrained by …. 15.5 involuntary assignment, effect on …. 15.16 mortgagee’s entry into possession, whether breach of …. 15.16 breach of, see also Forfeiture continuing convenant once and for all breach, compared with …. 13.12 what is …. 13.12 contract law relating to …. 17.22 damages nominal, when …. 13.13 estoppel against, operating as forfeiture …. 17.18 forfeiture, waiver of, not waiver of breach, 13.11, see also Forfeiture injunction, available whether, 13.11, see also Injunction

liability for, on assignment …. 15.20 lessee by lease voidable at option of lessor …. 17.4 repudiation, amounting to …. 16.26 notice to remedy …. 18.2 permission to act in, effect of …. 7.7 possession, to give, recovery of bonus …. 13.15 re-entry for …. 9.3, 21.1 remedies for …. 7.10, 13.11 surrender, on effect …. 16.22 waiver statutory provision …. 17.18 waiver of forfeiture does not amount to …. 13.11 competition, not to permit, 13.17, see also Trade Practices Act condition breach of, see also Forfeiture contract law relating to …. 17.22 effect of …. 17.22 words of …. 17.5 construction of …. 7.2 as to user …. 7.8 continuing, 15.19 covenant to do definite act, compared with …. 17.18 creation of …. 7.1 equitable assignment …. 15.20 express implied covenant may be excluded …. 8.3 meaning of …. 7.1, 8.1 fence to erect

breach of damages, measure of …. 13.17 hotel, to use premises as breach of damages, measure of …. 13.17 implied arises when …. 8.1 business efficacy requires, when …. 8.1 express covenant may exclude …. 8.3 fitness of premises, as to …. 8.6, 10.1 husband-like manner, cultivate in …. 8.8 law, in …. 8.2 meaning of …. 7.1, 8.1 necessary implication, by …. 8.1 non-derogation from grant by landlord …. 8.5 possession to yield up …. 8.8 quiet enjoyment, 8.4, see also Quiet enjoyment range of …. 8.1 reasonable, not merely because …. 8.1 relationship, due to …. 8.1–8.9 tenant-like manner deliver up premises …. 8.7 use premises …. 8.6, 10.2 landlords …. 10.8 lessee, liable on, notwithstanding assignment …. 15.18 licence, does not extinguish …. 7.7 meaning of …. 7.1 nuisance, not to cause …. 7.14

meaning of …. 7.14 overholding tenant, when subject to …. 7.13 particular business use …. 7.8 privity of estate, lacking effect of …. 15.20 quiet enjoyment …. 7.15, 8.4, 13.15 breach of disturbance by landlord …. 8.4 exemplary damages, not awarded …. 13.15 measure of damages …. 13.15 rates, taxes and outgoings, payment …. 7.16 rebuild, to breach of damages, measure of …. 13.17 renewal, for …. 7.9, 14.1–14.11 rent to pay …. 7.4, 17.5, 17.6 covenant to repair, and …. 7.4 repair, to …. 7.4, 7.5, 10.6 covenant to pay rent, and …. 7.4 reversion, assignment of, effect …. 15.20 running with land and reversion …. 15.20 solicitor, duty to client to explain …. 7.3, 10.8 subletting against …. 7.12 breach of measure of damages …. 13.16 occurs when …. 7.11 tenant’s conduct …. 7.8 trade, restriction on, see Trade Practices Act touching and concerning land …. 15.20 unusual solicitor’s duty to explain …. 7.3

user, as to …. 7.8 construction of …. 7.8 may be positive or negative in nature …. 7.8 usual …. 8.10, 9.1–9.3 enter and view …. 9.3 fact, question of …. 9.2 implied …. 9.1, 9.2 mode of establishing …. 9.2 proviso for re-entry …. 9.3 quiet enjoyment, 9.3, see also Rent rates and taxes, 9.3, see also Outgoings repair, keep and deliver up, in, 9.3, see also Repair vacant possession, delivering up …. 8.9 waiver …. 17.18 Covenant of non-derogation …. 8.5 Crown actions by and against …. 5.6 lease capacity to make and take …. 5.6 forfeiture of, relief against, 5.6, see also Forfeiture quiet enjoyment covenant for, implied against, whether …. 8.4 Damages bonus, may be recoverable as …. 13.15 exemplary …. 13.15 future rent, loss of …. 16.26 lease, failure to grant …. 13.4 failure to take …. 13.4

measure of agreement for lease, breach …. 13.2, 13.4 breach of covenant assignment, against …. 13.16 competition not to permit …. 13.17 fence to erect …. 13.17 hotel …. 13.17 quiet enjoyment …. 13.15 rebuild …. 13.17 rent, to pay …. 11.15 repair …. 13.10 lessee, by …. 10.13 lessor, by …. 7.4, 10.7 subletting …. 13.16 mental stress …. 10.13 repudiation …. 16.26 surrender …. 16.26 vendor cannot make title …. 13.4 nominal, only, where …. 13.13 punitive …. 13.15 rent, for loss of …. 11.17 rule in Bain v Fothergill …. 13.4 ‘security money’ deposit of, effect on …. 13.14, 16.26 Decree of specific performance of contract …. 13.9 Deed assignment, whether required to be, by …. 15.17 lease, when required to be, by, 1.6, see also Lease surrender, whether required to be, by …. 16.13 Demised premises, meaning …. 10.10

repair see Repair Determination of tenancy, 16.1–16.26, see also Lease; Periodic tenancy; Tenancy, Tenancy at sufferance; Tenancy at will; Tenancy for fixed term; Tenancy from year to year condition, by operation of …. 16.6 contract law, governed by, whether …. 16.26 disclaimer, by means of, 16.25, see also Disclaimer fixed term, for effluxion of time, by …. 2.3, 16.5 overholding clause, effect of …. 2.4 forfeiture, by, see Forfeiture joint tenants, surrender by one only …. 16.16 merger, see Merger modes of termination …. 16.1 deserted premises …. 16.18 option, exercise of, by …. 16.7 periodic, of notice to quit, upon expiration of …. 16.2 power of attorney, effect on …. 16.4 rent, acceptance after, effect of …. 16.2 repudiation, by, acceptance of …. 16.25, 16.26 surrender, by, compared with …. 16.26 sublease, effect on …. 16.3 surrender, 16.11, see also Surrender tenancy at will demand of possession, by …. 17.12 surrender of …. 16.11 writ claiming possession …. 17.12 time, by effluxion of …. 16.5

waiver, after …. 16.2 Disclaimer bankruptcy and liquidation …. 16.25 contract law, relating to …. 17.22 effect of …. 17.21 forfeiture, determination by, and …. 17.21 meaning of …. 16.26 mode of determination of tenancy, whether …. 17.21 periodic tenancy, in case of notice to quit, whether necessary …. 17.21 personal, representative, by …. 16.25 repudiation, described as …. 16.26 tenancy for fixed term cause of forfeiture …. 17.21 notice to quit, whether necessary …. 17.21 Distress for rent …. 11.1, 11.26 Doctrine of estates in land …. 1.2 Doctrine of ‘executive necessity’ …. 5.6 Documents deleted provisions …. 6.5 commercial/conveyancing, distinction …. 6.7 Domestic convenience …. 10.5 Double rent …. 17.17 Double value …. 17.17 Duty of care, landlord …. 10.1 Dwelling house defined …. 20.5 Ejectment

old action of …. 22.1–22.4 action for recovery of land, replaced …. 22.4 fictions, use of, in …. 22.3 leasehold interests, application only to, effect of …. 22.2 procedure in …. 22.3 real actions, compared with …. 22.1 requirements of, prior to bringing …. 22.2 Emblements meaning of …. 10.4 occupation, in lieu …. 10.4 right to …. 10.4 Employee service occupancy, lease or licence, whether …. 3.5 Encroachments lessee, by …. 2.18 Enlargement long term with fee simple …. 11.27 Enter and view covenant for, implied usual …. 9.3 Equitable assignment …. 15.20 Equitable estoppel …. 1.15 Escrow …. 4.1 Estate in land …. 1.2, 1.7, 16.26 licence, not created by …. 3.2 Estoppel equitable …. 1.15 forfeiture, against …. 17.18 proprietary …. 1.15 tenancy, by …. 1.14, 20.8

Evasion statutory provisions in relation to assignment …. 15.10 Evidence ambiguity, to resolve …. 15.2 document, ambiguity to resolve …. 15.2 intention, to show …. 15.2 unstamped written lease, as …. 11.28 Exclusive dealing Trade Practices Act …. 12.4 Exclusive possession lease characteristic …. 1.3, 1.12 landlords’s right to enter and inspect …. 1.3 rent …. 1.12 tenancy creation …. 1.2 Execution, see also Action for recovery of land; Summary proceedings in magistrates’ court by third party crops liable for rent …. 10.4 emblements …. 10.4 Executors notice to quit, by …. 20.10 Exemplary damages …. 13.15 Express covenant implied covenant may be excluded …. 8.3 meaning of …. 7.1, 8.1 rent payments …. 11.3 False and misleading representations Trade Practices Act …. 12.10

Fee simple long term enlarged into …. 11.27 Fictions ejectment, use in …. 22.3 Fine, see also Lease best rent obtainable without taking …. 1.6 effect of prohibition …. 15.15 meaning …. 15.15 payment of, effect …. 15.15 First refusal covenant or option, whether …. 14.4 Fixtures covenant as to …. 10.5 meaning of …. 10.5 right to remove new lease, effect of …. 10.5 trade ornament or domestic convenience …. 10.5 Foreign companies …. 5.8 Forfeiture acts amounting to …. 17.7, 18.1 statute, by …. 18.1 breach incapable of remedy …. 18.7 breach of conditions for distinguished from breach of covenant …. 17.6 breach of covenant mere, whether determines lease …. 17.5, 17.7 proviso for re-entry not in lease, effect …. 17.5, 17.6 condition, breach of, for distinguished from forfeiture for breach of covenant …. 17.6

condition for, terms of, essential to exactly comply with …. 17.2 condition, words of …. 17.5 contract law, relating to …. 17.22 costs …. 19.4 covenant, breach of, for …. 13.11 distinguished from forfeiture for breach of condition …. 17.6 damages loss of bargain, claim by lessor …. 16.26, 17.16 recoverable …. 17.18 default, dependent upon …. 17.3, 20.1 determination, provision for, form of …. 17.7 disclaimer of title, forfeiture for, 17.21, see also Disclaimer periodic tenancy, in case of gives rise to forfeiture …. 17.21 tenancy for a fixed term, in case of cause of forfeiture …. 17.21 effect of …. 17.16 accrued rent, on …. 17.16 sublease on …. 17.16, 19.6 estoppel against …. 17.18 fixed term, not confined to …. 17.1 grounds …. 17.3, 17.22 breach of condition condition, meaning of …. 17.22 law, operation of, arising by …. 19.4 meaning …. 17.7 statutory …. 18.1 mesne profits after claim for …. 17.17 calculated from date of re-entry …. 17.17

methods of …. 17.3, 17.22 non-payment of rent …. 17.14 demand for payment lease under Torrens system …. 17.14, 17.20 requisites of …. 17.14 when necessary …. 17.14 when not necessary …. 17.14 notice to quit necessary to forfeit lease, whether …. 20.1 by sender …. 20.1 notice to remedy breach …. 18.1 breach incapable of remedy, where …. 18.7 contents of …. 17.15, 18.2, 18.6, 18.8 defective in form, effect …. 18.6, 18.8, 18.9 effect of failure to give …. 17.12, 18.4 essential, whether …. 17.7, 17.12, 18.2–18.4 failure to give, effect …. 17.12, 18.4 lease, required only in relation to …. 18.3 mortgage, where term expired …. 18.5 administrator appointed …. 18.5 necessary, when …. 18.5 option to convert fixed term to periodic tenancy, necessity for notice …. 18.4 option to forfeit acts amounting to exercise of …. 17.7 periodic tenancy, application to …. 17.1 period of …. 18.9 statutory …. 18.1 service of …. 18.10

unnecessary to allege in action …. 17.12 unnecessary when …. 18.3 re-entry action for recovery of land commencement, mere, effect …. 17.1–17.13 judgment, prior to, effect …. 17.13 service of writ, whether essential …. 17.12 unequivocal demand for possession …. 17.11, 17.12 assignment in breach of covenant, effect …. 15.5, 15.16 determining lease distinguished from re-entry …. 17.1 dispensation with, need for …. 17.7 essential, whether …. 17.7 issue of writ, mere, effect …. 17.12 notice of intention to, not sufficient …. 17.10 notice of re-entry, whether amounts to …. 17.10 proviso under …. 17.8, 17.9 action for recovery of land, effect …. 17.9 actual, need not be …. 17.9 exclusive mode of determining lease …. 17.9 form of …. 17.7 meaning of …. 17.7–17.9 what amounts to …. 17.8–17.10 writ mere issue, whether amounts to …. 17.7, 17.12, 17.13 service of, whether essential to constitute …. 17.12 registered lease registration of transfer, effect on …. 17.20 relates back to

breach giving rise to, whethe …. 17.12 date of re-entry, whether …. 17.12 relief against …. 19.1–19.6 breach of covenant other than to pay rent …. 17.19, 19.4 jurisdiction essential statutory …. 17.19, 19.1, 19.3, 19.4 discretionary …. 19.1, 19.2, 19.5 equity, in …. 19.1, 19.2 forfeiture arising by operation of law …. 19.4 joint lessees, application by one …. 19.2, 19.5 lease under Torrens system …. 17.20 licensed premises, in relation to …. 18.3 mortgagor, where mortgage expired …. 19.4 non-payment of rent …. 19.2 agreement for lease, available …. 19.2 Crown, against …. 5.6 discretionary …. 19.2 granting of …. 19.2 joint lessees, application by one …. 19.2, 19.5 jurisdiction equitable …. 17.19, 19.1, 19.2 mortgagor, application by …. 19.2 order granting, form of procedure …. 19.2 re-entry, in case of …. 19.2 refusal …. 19.2 registered lease …. 19.2 register book …. 17.20 relief, only on payment of rent, costs …. 19.1, 19.2 sublessee seeking …. 19.6 time for applying …. 19.2, 19.3 order for …. 19.5

rent, non-payment for …. 17.6, 17.12, 19.2 rent paid in advance, whether deprives right to …. 17.18 statutory creation …. 19.1 statutory provisions relating to …. 17.15, 18.1, 17.19, 19.1, 19.3, 19.4 subleases, effect on …. 17.20, 19.1, 19.3, 19.4, 19.6 sublessee may seek …. 17.20, 19.1, 19.3, 19.4, 19.6 time for applying …. 19.2–19.4 term of lease expired …. 19.1 terms of relief …. 19.5 unequivocal election to forfeit, necessary …. 17.7, 17.10 waiver of …. 17.18 acts which constitute …. 17.18 cannot be made after completion of forfeiture …. 17.18 continuing breach, in relation to …. 13.12, 17.18 meaning of …. 16.2, 17.18 not waiver of breach of covenant …. 13.11, 17.18 rent, acceptance of, as …. 17.18 Frustration doctrine of application to lease …. 1.2, 6.10 meaning of …. 6.10 lease, whether doctrine applies to …. 16.26 Future lease concurrent lease compared with …. 1.9, 1.10 Goods statutory provisions …. 16.36 vacated premises, removal and disposal of goods left by lessor …. 16.36

Grant of reversion attornment valid without …. 1.14 without, at common law …. 1.14 Ground rent …. 1.12, 11.1 Harassment or coercion Trade Practices Act …. 12.11 Illegal leases statutory provisions, breach of …. 5.20 Immediate landlord …. 15.2 Implied covenant arises when …. 8.1 business efficacy requires, when …. 8.1 express covenant may exclude …. 8.3 fitness of premises, as to …. 8.65, 10.1 husband-like manner, cultivate in …. 8.7 law, in …. 8.2 meaning of …. 7.1, 8.1 necessary implication by …. 8.1 possession to yield up …. 8.8 quiet enjoyment, 8.4, see also Quiet enjoyment range of …. 8.1 reasonable, not merely because …. 8.1 relationship, due to …. 8.1–8.9 tenant-like manner deliver up premises …. 8.8 use premises …. 8.6, 10.2 Infant

lease made by or to, lessee cannot avoid …. 5.3 not void …. 5.3 voidable upon infant coming of age …. 5.3 Injunction, see also Action for recovery of land assignment in breach of covenant, restrained by …. 15.5 breach of covenant, see also Forfeiture forfeiture for, in lieu of …. 13.11 licence renew, to …. 13.11 premises, restore to former state …. 13.11 timber, restrain felling of …. 13.11 equity against forfeiture, protection …. 19.5 representative action, for …. 13.11 Insolvency covenant, breach of …. 14.6 Insurance, moneys Fires Prevention (Metropolis) Act 1774, s 83 provisions …. 10.1 rebuild, applied to, at request of tenant …. 10.1 Interesse termini abolished …. 1.16 creation …. 2.15 Joint tenancy, see also Lease lease, by tenant …. 5.15 co-tenant, to …. 5.15 effect of …. 5.15 stranger, to …. 5.15 notice to quit, given by one tenant …. 5.15 partners, lease to, effect …. 5.15 possession, proceedings to recover, by one tenant …. 5.15

tenants-in-common, joint demise by …. 5.15 Key money …. 28.5 Landlord, see also Lessor change in use of leased premises …. 7.8 covenants to effect repairs …. 10.7 duty of care …. 10.1 implied covenant of non-derogation …. 8.5 obligations re repairs …. 10.1 tenant’s application for relief, opposition breaches of covenant, reliance …. 19.2 waiver of right to forfeit …. 17.18 Lease, see also Periodic tenancy; Tenancy; Tenancy at sufferance; Tenancy at will; Tenancy for fixed term; Tenancy from year to year; Trade Practices Act agreement for, see Agreement for lease assignment option to purchase, passes with …. 15.1 attornment clause …. 1.14 period of tenancy created by …. 18.5 breach of covenant, effect …. 17.4, 17.5 building lease meaning …. 1.11 repairing lease, compared with …. 1.11 capacity to make and take …. 5.1–5.18 agent, 5.13, see also Agent alien …. 5.2 co-owners, 5.15, see also Joint tenancy, Tenancy in common Crown …. 5.6

illegal …. 5.20 infant, 5.3, see also Infant liquidator, 5.9, see also Liquidator married women …. 5.5 mortgagees and mortgagors, 5.16, see also Mortgagor municipality …. 5.7 partnership, 5.12, see also Partnership person of unsound mind …. 5.4 person, to himself …. 5.14 personal representative, 5.18, see also Personal representative receiver, 5.10, see also Receiver statutory corporation …. 5.8 trustee, 5.17, see also Trustee trustee in bankruptcy …. 5.11 unincorporated association, 5.12, see also Unincorporated association certainty of, necessary …. 1.5, 4.2 chattel real, is …. 1.13 commencement of term …. 1.10, 4.2 commencing date of …. 1.5, 1.10 before execution of lease …. 1.10 concurrent lease, 1.9, 1.10, see also Concurrent lease meaning …. 1.9, 1.10 proper person to determine lease …. 1.9 condition, of, breach, effect …. 17.4, 17.5 construction, of grantor against …. 6.3 printed form …. 6.3 surrounding circumstances, use of, in …. 6.3 words printed and written …. 6.3

contract domestic arrangement distinguished from …. 6.2 not mere …. 1.1, 1.2, 6.1, 16.26 viewed as …. 6.1–6.11 conveyance, a species of …. 4.1 cost of preparation, execution …. 13.4 covenant, see Covenant deed, where, required to be, 1.6, see also Deed demand for rent dispensation with …. 17.14, 17.20 determination of, see Determination of tenancy concurrent lessee, by …. 1.9 employees …. 3.5 enlargement into fee simple …. 11.27 estate in land, creates …. 1.2, 1.7, 16.26 exclusive possession, whether essential element of …. 1.3, 1.4, 1.12 formal defect, effect …. 5.19 formalities required …. 1.6 fraud, effect of, on …. 6.9 frustration, doctrine of, 1.2, 6.10, see also Frustration future actual entry, necessity for …. 1.10 concurrent lease, compared with …. 1.10 effect, period within which must take …. 1.10 meaning of …. 1.10 reversion, is lease in …. 1.10 reversionary lease, compared with …. 1.10 illegality, effect of …. 6.9

intention, to create a lease …. 1.4 to create legal relations, element of …. 6.2 interpretation of, see Construction …. 6.2 invalidated by non-compliance with terms of power …. 5.19 kinds of …. 2.1 land, interest in, created by …. 1.1–1.3, 1.13 licence, distinguished from …. 1.3, 1.4, 3.2 lodger …. 3.4 meaning of …. 1.1 mistake, effect of, 6.9, see also Mistake option to renew, exercise of, amounts to …. 14.1 option to renew, see Option perpetually renewable …. 1.16 personalty not realty …. 1.13 possession, exclusive, 1.3, see also Exclusive possession lessee parting with, meaning …. 15.3 possession to be given at future date lease, taking effect in possession, whether …. 1.6 production of, as notice to quit …. 17.7 rectification of, remedy of, 6.8, see also Rectification re-entry, after determination of …. 21.1 rent, reservation of, whether essential …. 1.12 surrender, see Surrender sublease, effect of …. 16.3 tenancy, for fixed term, see Tenancy for fixed term tender of prior to action, whether necessary …. 13.3 term definite, must be …. 1.5

terms of, must be certain …. 1.5 expired, relief against forfeiture …. 19.1 three-year term what constitutes …. 1.6, 14.1 unincorporated association by …. 5.12 to …. 5.12 variation of …. 1.6 void possession taken under, effect …. 1.6 warranty, collateral to, creation of …. 6.11 mere representation and, distinguished …. 6.11 writing, when necessary …. 1.6 Lessee assignment notwithstanding, liable on covenants …. 15.18 cannot take advantage of own wrong …. 17.4 conduct …. 7.14 covenants breach of …. 14.6 liability on …. 15.18 death of notice to quit, effect on, after service …. 20.8 vesting of tenancy, after …. 2.21 encroachments by …. 2.18 indemnity from assignee, entitled to …. 15.21 interest of …. 1.7 liability on covenants …. 15.18 lodger, distinguished from …. 3.4

meaning of …. 15.2, 15.4 mesne tenant, meaning …. 15.4 overholding tenant, ejectment of …. 2.6 possession, parting with, meaning …. 15.3 term assignment of …. 15.5 subletting of …. 15.5 trespasser, may become …. 2.6, 17.17 Leased premises, change in use …. 7.8 Lessor covenant …. 7.4 goods left on vacated premises, removal and disposal of, 16.36, see also Goods interest of …. 1.7 mesne lessor, meaning of …. 15.4 meaning …. 15.2 non-fulfilment of condition, advantage …. 17.5 privity, sublessee with …. 15.2 reversion assignment of …. 15.5 leasing of …. 15.5 sublessee, privity with …. 15.2 Lessor and lessee relationship of …. 1.1–1.14 assignment of term, effect on …. 15.1 repudiation of, by lessee, effect …. 16.25 reversion, created by, assignment of …. 1.7 Letters of Administration …. 5.18 Licence

agreement for Statute of Frauds …. 4.4 writing, necessity for …. 3.7 covenant, not extinguished by …. 7.7 declaration that agreement a, effect of …. 3.3 determination death, on …. 3.8 notice, whether necessary …. 3.8 re-entry, after, effect …. 21.2 employee, in case of …. 3.5 estate in land, not created by …. 3.2 family sharing house, in case of …. 3.4 intention of parties …. 1.4, 3.3 lease distinguished from …. 1.3, 1.4, 3.2–3.6 meaning …. 3.2 lodger, in case of …. 3.4 meaning …. 3.4 nature of …. 3.1 proceedings, summary …. 3.8 Licensed premises forfeiture, relief against …. 18.3 Life tenant death of recovery of rent from undertenant …. 10.4 tenant’s right in lieu of emblements …. 10.4 Liquidator, see also Lease lease capacity to …. 5.9

disclaimer …. 5.9 rent, liability for …. 5.9 Lodger, 3.4, see also Licence Lord Cairns’ Act …. 4.9 Manager, see Receiver Market rent …. 28.9 Married women capacity to make and take leases, see Lease Memorandum Statute of Frauds, compliance with …. 4.4 Mental stress, damages …. 10.13 Merger equity, treatment of, by …. 16.8 registered lease, of …. 16.9 sublease, effect on …. 16.3, 16.10 Mesne lessors …. 15.4 Mesne profits, see also Action for recovery of land; Rent forfeiture after calculation of …. 17.17 claim for …. 17.17 meaning of …. 17.17 Misleading or deceptive conduct Trade Practices Act …. 12.9 Misnomer of landlord …. 20.23 Misnomer of tenant …. 20.24 Mistake lease, effect on, of …. 6.9 Mortgage, see also Mortgagee; Mortgagor

attornment clause in …. 18.5 breach of effect …. 18.5 notice to remedy, whether necessary …. 18.5 effect, of …. 18.5 period of tenancy created by …. 18.5 Mortgagee, see also Mortgagor action for recovery of land, by …. 18.5 lease by mortgagor, whether binds …. 5.16 leasing powers of …. 5.16 summary proceedings, by …. 3.8 Mortgagor, see also Mortgage; Mortgagee lease by …. 5.16 Municipality lease, power to grant …. 5.7 licence, power to grant …. 5.7 Nominal damages …. 13.13 Non-derogation from grant …. 8.5 Non-payment of rent, see also Forfeiture relief against forfeiture …. 19.1 breaches of covenant not subject to notice …. 19.2 Notice administrators …. 5.9 breach of covenant to remedy, 18.1–18.10, see also Forfeiture breach incapable of remedy, where …. 18.7 contents of …. 17.15, 18.2, 18.6, 18.8 failure to give, effect …. 18.4 period, of …. 18.9

service, of …. 18.10 repair to, lessee must give …. 10.6, 10.7 Notice to quit act of defeasance, whether amounts to …. 20.9 after expiration creation of new tenancy …. 20.31, 20.32 former tenancy, revival …. 20.31 withdrawal of notice, effect …. 20.33 agent, see also Agent alteration of notice, by …. 20.9 authority of, existence of, question of …. 20.9 by …. 20.8, 20.9 fact of agency, in notice …. 20.9 firm, signature of …. 20.9 give …. 20.9 mere collector of rents, distinguished from …. 20.9 notification of …. 20.9 receive …. 20.12 agreement not to give, effect …. 20.2 agreement on period of …. 20.2 ambulatory …. 20.7 assignee of part of reversion, by …. 20.16 assignee of reversion, by …. 20.8 authority, given without, ratification …. 20.9 common law applicability of, to …. 20.13 default of lessee, relevance of, at …. 20.1 concurrent lessee, by …. 1.9, 20.8 construction of …. 20.17

co-owners, in case of …. 5.15, 20.8 corporation giving by …. 20.11 signature of officer, on …. 20.11 to …. 20.12 date of expiry, of, see Expiry date date of quitting …. 20.20, 20.21 dating of incorrect, effect …. 20.20 death of lessee, after service of …. 20.8 disclaimer, for …. 17.21 documents, reference to other effect …. 20.26 dwelling house, statutory requirements …. 20.5 equitable owner, by …. 20.8 executor, by …. 20.10 expiry date, of at common law …. 20.4, 20.5 statutory provision, as to …. 20.5, 20.6 tenancy from year to year, in case of …. 20.8 extraneous matters, reference to, in …. 20.15 fixed terms, and …. 2.4 forfeiture, whether necessary, to effect …. 20.1 form of at common law …. 11.28 statutory provision, as to …. 11.28 husband and wife, to …. 20.12 informality, of …. 20.15 insufficient, effect of …. 20.20

joint tenants, to …. 5.15, 20.12 lease, production of …. 17.7 legal owner lease of, by …. 20.8 reversion, of, by …. 20.8 meaning of …. 20.1 misdescription premises, of, in, effect …. 20.15, 20.22 tenancy of, in, effect …. 20.18 tenant of …. 20.12 misnomer lessee, of, in …. 20.24 lessor, of, in …. 20.73 notice of intention to quit, tenant by distinguished from …. 20.8 informal, may be …. 20.8 period of agreement, as to …. 20.2, 20.5 at common law …. 11.28, 20.2–20.5 expiration of, weekly tenant …. 20.4 statutory provision, as to …. 20.3, 20.5 weekly tenancy …. 20.3, 20.4 personal representative and trustee, by …. 20.10 post-dating, effect of …. 20.20 premises portion of, excluded from, effect …. 20.15 purchase, under terms contract, by …. 20.8 ratification of notice given without authority …. 20.9 reference, other documents to …. 20.26

rent, acceptance of, after expiry of notice, effect …. 20.32 second, effect of giving …. 20.30 service of, see also Service …. 20.27–20.30 at common law …. 20.27 corporation on …. 20.27 home, by leaving at lessee’s …. 20.27 joint tenants, on one …. 20.27 last known address …. 20.27 personal meaning of …. 20.27 necessary, whether …. 20.27 post, by …. 20.28 proof of, summary proceedings, in …. 20.30 regularity of inference of …. 20.27 servant, on lessee’s …. 20.27 substituted rules relating to …. 20.29 summary proceedings …. 20.29 Sunday, on …. 20.27 signature of authorised officer of corporation, by …. 20.11 firm, by …. 20.9 proxy, by …. 20.9 solicitor, by …. 20.9 whether essential …. 20.14 wife, on lessee’s …. 20.27 solicitor, by …. 20.9 sublease, effect on …. 16.3

tenancy by estoppel created by …. 1.15 either party, to, may give …. 20.8 equitable owner of reversion, by …. 20.8 tenancy for fixed term, necessity for in case of …. 16.5 tenancy from year to year, necessity for in case of …. 2.8 tenant by, notice of intention to quit, distinguished from …. 20.8 informal, may be …. 20.8, 20.14 tenants-in-common, by one …. 5.15 time, computation of …. 20.20, 20.21 unexpired term, given during, effect …. 20.18 union, to …. 20.12 verbal …. 20.13 waiver …. 20.31 rent, acceptance of, not to operate as …. 20.32 tenant by, misdescription of …. 20.24 weekly tenancy, period of …. 20.3, 20.4 withdrawal of current, effect of …. 20.33 without authority given, ratification …. 20.9 Nuisance covenants, not to cause …. 71.4 Offences entry upon land, causing breach of peace …. 21.3 Option lease obtained by exercise of, new lease, is …. 14.1 lease, renewal, see Renewal of lease purchase, to passes upon assignment of lease …. 15.1

Outgoings covenant to pay, implied …. 9.3 meaning, common usage basis …. 7.16 tenant contributions …. 28.11 Overholding clauses …. 21.3 Overholding tenant ejectment of …. 2.6 Overpayments rent, recovery of …. 11.3 Parol lease covenant for quiet enjoyment, implied in …. 8.4 Part performance agreement for lease …. 13.2 deed void at law, where …. 1.6 equity to intervene …. 4.5 Parties, subsequent conduct …. 6.6 Partial specific performance of contract …. 13.7 Partnership lease, see also Lease by, effect …. 5.12 to, effect …. 5.15 Peaceable re-entry, see Self-help Periodic tenancy, see also Lease; Tenancy; Tenancy at sufferance; Tenancy at will; Tenancy for fixed term; Tenancy from year to year creation, by implication

determination of, see Determination of tenancy; Notice to quit disclaimer of notice to quit, whether essential …. 17.21 forfeiture, of …. 17.1 intention, dependent on …. 2.14 kinds of …. 2.13 less than one year, kinds of …. 2.13 meaning of …. 2.13, 2.14 period of …. 2.13 possession under void lease, may create …. 1.6 rent …. 2.14 vesting of, on death of tenant …. 2.21 verbal …. 1.6 waste, liability for …. 10.3 weekly action for double rent …. 17.17 double value …. 17.17 agreement for, enforceability …. 13.5 quiet enjoyment, covenant, in …. 8.4 yearly, see Tenancy from year to year Personal representative administrator lease by, before grant of Letters of Administration …. 5.18 disclaimer, by, effect …. 5.18, 16.25 entry into possession, by, effect …. 5.18 executor lease by, before grant of Probate, effect …. 5.18 lease by one of several, effect …. 5.18

leasing powers …. 5.18 liability for deceased lessee’s obligation …. 5.18 notice to quit by …. 20.10 rent, liability for …. 11.23 statutory protection given to …. 5.18 surrender by, 16.20, see also Surrender Persons of unsound mind capacity to make and take leases, see Lease Physical possession by use of force danger, of …. 21.3 effect, of …. 21.3 legal proceedings preferable …. 21.4 meaning …. 21.1, 21.2 Pleading part performance of contract …. 13.8 Possession concurrent lessee, entitlement to …. 1.9 direct action, dangers of …. 21.3 judgment for, enforcement of legal proceedings, by …. 21.3 lessee, parting with, meaning …. 15.3 self-help …. 21.2 Premises, alteration agreement for lease, performance …. 4.7 Premises deserted …. 16.1 Principle of non-derogation from grant …. 8.5 Privity of contract …. 15.20 Proprietary estoppel, principles …. 1.15 Public confusion s 52, Trade Practices Act 1974, breach …. 12.9

Punitive damages …. 13.15 Quiet enjoyment covenant, breach of, damages, measure of …. 7.15, 13.15 Crown, implied against, whether …. 8.4 distinguished from covenant not to grant later lease …. 8.4 implied law, by …. 8.4 Torrens acts, whether excluded, by …. 8.4 usual …. 9.3 meaning of …. 8.4 Rack rent meaning …. 1.12 Rates meaning, common usage basis …. 7.16 Readiness and willingness specific performance of contract …. 13.6 Receiver, see also Lease lease power to grant …. 5.10 rent, liability for …. 5.10 Reconstruction repair, distinguished from …. 10.8 Recovery of possession, see also Action for recovery of rent from trespasser …. 3.9 reasonable cause why possession should not be given …. 13.2, 14.5 Rectification, see also Lease antecedent agreement …. 6.8 assigning right …. 6.8 governing intention …. 6.8

unilateral mistake …. 6.8 Re-entry self-help, by, see Self-help Relief against forfeiture of rent, see Forfeiture Registered lease, see Forfeiture Renewal repair, compared with …. 10.8 Renewal of lease …. 14.1–14.11 covenant for runs with land and reversion …. 14.1 first refusal, covenant or option, whether …. 14.4 option for, exercise of condition precedent to …. 14.6 defence to action …. 14.5 effect of …. 14.5 failure to properly exercise option, effect …. 14.11 lease, description of, failure to refer to …. 14.1 lessee protected …. 14.5 manner of …. 14.8 notice of, service of …. 14.10 accidental loss of, in post …. 14.10, 14.11 time for …. 14.9 perpetual, express provision to prevent …. 14.2 courts, read down to avoid …. 14.2 provision for certainty, requirement of …. 14.3 form of …. 14.2 rent, to be determined by third person, meaning …. 14.7 valuation fee …. 14.7

Rent abatement …. 11.3 acceptance of, after commencement of action, effect …. 16.2 expiration of notice to quit, effect …. 20.32 giving notice to quit, not to operate as waiver of …. 20.32 accrued, liability for …. 17.16 action for …. 11.16 apportionment, of Supreme Court Act …. 16.22 surrender of lease, on …. 16.22 where payable in advance …. 16.22 certainty, requirement of …. 14.3 common law demand for …. 11.24, 17.14 dispensed with …. 11.24, 17.14 essentials of …. 17.14 registered lease …. 17.14 contribution, right to, of co-tenant paying rent …. 5.15, 11.11 control, legislation by …. 11.2 definition of …. 11.2 covenant to pay covenant to repair, and …. 7.4 implied usual covenants …. 9.3, 11.15 damages for failure to repair, lessee’s right to set off against …. 7.4 nature of …. 7.4 damages, for loss of …. 11.17 determination of, by third person, meaning …. 11.20, 14.7

determination of tenancy, acceptance of, after, effect …. 16.2 distress for …. 11.1, 11.26 double …. 17.17 evidence of nature of tenancy …. 2.14, 11.19 exclusive possession …. 1.12 failure by lessee to pay, effect …. 17.6 forfeiture, relief against …. 11.25 ground rent …. 1.12, 11.1 home unit company, shareholder, contributions, to …. 11.1 illegality, effect, recovery of …. 6.9, 11.18 lease, not by deed, recovery of rent …. 11.27 liquidator, liability for …. 5.9, 11.22 loss of, damages for …. 11.17 market …. 28.9 meaning …. 11.1 rent control legislation, for purpose of …. 11.2 money, need not be payable in …. 11.1 non-payment of, tender, defence, whether …. 11.14 obligation to pay …. 11.13 overpayments, recovery of …. 11.3 payable in advance action for use and occupation, for …. 11.27 apportionment, whether capable of …. 16.22 payment, indication of, nature of tenancy …. 2.14 payment of assignment of term or reversion, and …. 11.3 notice of quit, after …. 11.12 person payable to …. 11.3 time and place of …. 11.3

personal representative, liability for …. 11.23 overpayments, recovery of …. 11.3 rack rent meaning …. 1.12 receiver, liability for …. 5.10 recovery of, when lease not by deed, 11.28, see also Use and occupation relief against forfeiture, see Forfeiture repair, breach of lessee’s covenant to, and obligation to pay …. 7.4, 11.3 repair costs, lessee’s right to set off against …. 7.4 reservation of, whether essential for tenancy …. 1.12, 11.1 review clauses …. 11.4 construction …. 11.8 entire mechanism …. 11.7 notices, 11.9 option, not in the nature of …. 11.4 process …. 11.5 retail or commercial tenancies legislation …. 11.10 time limits …. 11.6 tender of …. 11.14 turnover, by …. 28.10 variation of, effect …. 11.21, 16.19 Repair alteration, compared with …. 10.8 breach of covenant to damages for, measure of when lease determined …. 10.13 when lease not determined …. 10.13 covenant to …. 10.6

action for damages …. 10.13 buildings erected after demise, where …. 10.9 construction, of …. 10.10, 10.11 emblements …. 10.4 fair wear and tear excepted …. 10.11 keep and yield up, in …. 9.3, 10.8 lessee, by accident, in case of …. 10.12 construction of covenant …. 10.8 breach of …. 7.4 damages for, measure of hen lease determined …. 10.13 hen lease not determined …. 10.13 fair wear, tear excepted …. 8.6, 10.11 user, implied obligation as to …. 10.2 lessor, by exterior of building …. 10.10 fair wear and tear, when excepted …. 10.1, 10.11 implied whether …. 10.1 notice, lessee must give …. 10.6, 10.7 obligations, under …. 10.7 painting, whether included …. 10.10 meaning of …. 10.8 renewal, compared with …. 10.8 specific performance of …. 10.13, 13.10 fixtures …. 10.5 improve, damages for breach of covenant to …. 10.13 landlord’s covenants …. 10.7 meaning of …. 10.8

planning permission, subject to …. 10.6 put premises into, obligation to …. 10.8 rebuild, insurer, compellable …. 10.1 lessee, not compellable …. 10.1 reconstruction, distinguished from …. 10.8 remedies …. 13.10, 13.11 remedies for breach …. 10.13 renewal, distinguished from …. 10.8 structural alteration, distinguished from …. 10.8 structural defects, making good, not repair …. 10.8 tenant’s covenants …. 10.8 ‘good and substantial repair’ …. 10.8 waste, meaning of …. 10.3 Repudiation, 16.26, 18.2, see also Covenant; Damages; Determination of tenancy; Lessor and lessee Retail shopping centre leases, see Retail tenancies legislation — Australian Capital Territory; Retail tenancies legislation — New South Wales; Retail tenancies legislation — Queensland; Retail tenancies legislation — South Australia; Retail tenancies legislation — Victoria; Retail tenancies legislation — Western Australia Retail tenancies legislation — Australian Capital Territory assignment and subleases …. 28.15 background …. 28.1 dispute determination …. 28.17 express duties of landlord give tenant copy of lease …. 28.4 give tenant disclosure statement …. 28.3 key money, not to require …. 28.5 lease preparation expenses …. 28.5

permissible payments …. 28.5 implied terms general application, of …. 28.12 retail shopping centres …. 28.13 premises subject to Act …. 28.2 prohibited and void terms …. 28.14 rent and other payments …. 28.11 rent review …. 28.9 rent based on turnover …. 28.10 retail shop lease …. 28.2 right to five years’ tenancy …. 28.8 security bonds, controls …. 28.7 subleases …. 28.15 termination of lease …. 28.16 unconscionable conduct proscribed …. 28.6 Retail tenancies legislation — New South Wales assignments …. 24.186 background …. 24.1 determination of disputes …. 24.20 express duties of landlord give tenant copy of lease …. 24.4 give tenant disclosure statement …. 24.3 key money, not to require …. 24.5 lease preparation expenses …. 24.5 permissible payments …. 25.5 implied terms …. 24.13 general application, of …. 24.14 retail shopping centres …. 24.15

misleading or deceptive conduct proscribed …. 24.6 other duties of landlord …. 24.8 premises subject to Act …. 24.2 prohibited terms …. 24.16 rent and other payments …. 24.12 rent based on turnover …. 24.11 rent review …. 24.10 retail shop lease …. 24.2 right to five years’ tenancy …. 24.9 security bonds, controls …. 24.7 subleases …. 24.18 termination of lease …. 24.19 unconscionable conduct proscribed …. 24.6 void terms …. 24.17 Retail tenancies legislation — Queensland assignment …. 25.16 background …. 25.1 consideration for goodwill …. 25.5 determination of disputes …. 25.18 express duties of landlord give tenant disclosure statement …. 25.3 give tenant copies of lease …. 25.4 goodwill, consideration for, not to require …. 25.5 key money, not to require …. 25.5 floor area …. 25.2 goodwill …. 25.5 implied terms …. 25.1 general application, of …. 25.13 retail shopping centres …. 25.14

options to renew …. 25.11 other duties of landlord …. 25.7 premises subject to Act …. 25.2 ‘floor’ …. 25.2 prohibited terms …. 25.15 rent and other payments …. 25.10 rent based on turnover …. 25.9 rent review …. 25.8 subleases …. 25.16 termination of lease …. 25.17 unconscionable conduct …. 25.6 Retail tenancies legislation — South Australia assignments …. 27.16 background …. 27.1 determination of disputes …. 27.18 express duties of landlord give tenant copy of lease …. 27.4 give tenant disclosure statement …. 27.3 prohibited payments …. 27.5 implied terms …. 27.11 general application, of …. 27.12 retail shopping centres …. 27.13 other duties of landlord …. 27.6 premises subject to Act …. 27.2 prohibited terms …. 27.14 rent and other payments …. 27.10 rent review …. 27.8 rent based on turnover …. 27.9

right to five years’ tenancy …. 27.7 subleases …. 27.16 termination of lease …. 27.17 void terms …. 27.15 Retail tenancies legislation — Victoria alternative dispute resolution confidentiality issues …. 23.62 Small Business Commissioner …. 23.61 assignments …. 23.13, 23.34 assignors and guarantors …. 23.35 background …. 23.1 buildings …. 23.48 commencement of 2003 and 2005 Acts …. 23.9 continuing operation …. 23.5 costs and indemnities …. 23.49 demolition …. 23.53 determination of disputes …. 23.63 disclosure requirements non-compliance consequences …. 23.40 statutory provisions …. 23.38, 23.39 dispute resolution system Victorian Civil and Administrative Tribunal (VCAT) …. 23.63 exempt businesses, premises, tenants or leases …. 23.22 express duties of landlord give tenant copy of lease …. 23.26 give tenant disclosure statement …. 23.38 give tenant operating expenses details …. 23.44 indemnify tenant for certain payments …. 23.49 prohibited payments …. 23.37

formal requirements …. 23.24-23.28 holding over, effect …. 23.15 implied terms …. 23.11 interference, compensation …. 23.55 key money and goodwill …. 23.37 leases entered into under an option …. 23.16 formal requirements …. 23.24 in writing and signed …. 23.24 less than a year …. 23.14 Ministerial Determinations …. 23.60 miscellaneous provisions …. 23.58 non-recoverable amounts …. 23.47 outgoings and other payments …. 23.44 contributions, estimates, statements and adjustments …. 23.46 sharing …. 23.45 premises subject to Act …. 23.10 refurbishments and alterations …. 23.51, 23.54 relocation …. 23.52 renewal failure to give notice of last day, effect …. 23.32 landlord’s intention …. 23.33 meaning …. 23.29 notice of last day …. 23.31 refusal grounds …. 23.30 rent review …. 23.41 rent based on turnover …. 23.42 repairs …. 23.50

residential areas and retail premises leases …. 23.23 Retail Tenancies Reform Act 1998 …. 23.2 Retail Leases Act 2003 …. 23.3 ameliorating or remedial legislation …. 23.8 application …. 23.11 commencement of leases …. 23.12 extended operation …. 23.10 legislative purpose …. 23.7 Retail Leases (Amendment) Act 2005 …. 23.4 VCAT jurisdiction, extent …. 23.64 ‘retail premises’, employee or agency and public companies exceptions …. 23.21 exceptions to definition …. 23.20 meaning …. 23.18 occupancy costs exception …. 23.20 wholly or predominantly …. 23.19 retail shopping centres …. 23.48 additional requirements …. 23.57 right to five years’ tenancy …. 23.36 scope of chapter …. 23.6 security deposits …. 23.43 Small Business Commissioner, alternative dispute resolution …. 23.61 functions …. 23.59 notification …. 23.27 statutory minimum term of five years, 23.36 subleases …. 23.34 termination of lease notice, effect …. 23.40

unconscionable conduct, landlord or tenant, 23.56 Victorian Civil and Administrative Tribunal (VCAT) Fair Trading Act jurisdiction …. 23.66 jurisdiction, extent …. 23.64 jurisdiction, statutory basis …. 23.63 powers …. 23.65 Retail tenancies legislation — Western Australia assignments …. 26.8 background …. 26.1 determination of disputes …. 26.14 express duties of landlord give tenant disclosure statement …. 26.3 give tenant operating expenses details …. 26.5 prohibited payments …. 26.4 implied terms …. 26.9 other duties of landlord …. 26.6 permissible payments …. 26.6 premises subject to Act …. 26.2 rent based on turnover …. 26.11 rent review …. 26.10 right to five years’ tenancy …. 26.12 subleases …. 26.8 termination of lease …. 26.13 Reversion assignment capable of …. 1.7 rent paid to assignee …. 16.3 covenant

benefit runs with …. 15.19 burden runs with …. 15.19 extinguishment, of …. 16.10 effect …. 16.3 freehold, not necessarily …. 1.7 grant of, attornment, without …. 1.14 incident, of …. 1.7 meaning, of …. 1.7 severance, of, apportionment of conditions, on …. 20.16 Reversionary lease …. 1.10 Rule in Bain v Fothergill, see Damages Sale of crops execution of process …. 10.4 Security bonds …. 28.7 Security monies …. 13.14, 16.26 Self-help after determination of lease breach of covenant, re-entry for, compared with …. 21.1 effect, of …. 21.1 physical possession by use of force danger, of …. 21.3 effect, of …. 21.3 legal proceedings preferable …. 21.4 meaning …. 21.1, 21.2 Separate corporate personality possession, parting with …. 15.3 Service, 18.10, see also Notice to quit; Notice Set-off …. 7.4

Shopping centre leases, see Retail tenancies legislation — Australian Capital Territory; Retail tenancies legislation — New South Wales; Retail tenancies legislation — Queensland; Retail tenancies legislation — South Australia; Retail tenancies legislation — Victoria; Retail tenancies legislation — Western Australia Solicitor duty of, covenants to explain, whether …. 7.3, 10.8 notice to quit, issuing …. 20.9 Specific performance agreement for lease …. 4.11, 13.2–13.9 decree for, minutes of …. 13.9 part performance, pleading …. 13.8 partial …. 13.7 readiness to perform, by plaintiff …. 13.6 tendering of lease for execution …. 13.3 weekly tenancy, whether enforceable …. 13.5 agreement to renew lease …. 13.2 breach of user covenant …. 7.8 covenant to repair …. 10.13, 13.10 option to renew lease lease a memorandum …. 14.5 Statute of Frauds agent signing memorandum …. 4.3 agreement for lease subject to …. 1.6, 4.3 writing, requirements of …. 14.5 licence, agreement for not subject to …. 4.4 writing, no requirement of …. 3.7

memorandum, requirements, as to …. 4.4 non-compliance, with, effect …. 4.9, 4.10 option to renew lease …. 14.5 part performance …. 4.5, 4.7 possession, taking of or continuance in, as, 4.6 premises, improvements, alterations or repairs to, as …. 4.7 repairs to premises, as …. 4.7 Walsh v Lonsdale, doctrine, of …. 4.8 Statutory corporation, see also Lease leasing powers …. 5.8 nature of …. 5.8 Statutory provisions change in use of leased premises …. 7.8 Structural repairs …. 10.8 Sublease assignment of lease, compared with …. 1.8 assignment of term, compared with …. 15.2 covenant of quiet enjoyment …. 8.4 determination of head lease, effect on …. 16.3 evidence, intention, to show …. 15.2 forfeiture, effect on …. 17.16, 19.6 forfeiture of head, relief against …. 19.6 lessor, privity …. 15.2 licence, granting, compared with …. 15.2 meaning, of …. 1.8, 15.2 merger effect on …. 16.10 notice to quit by tenant, effect on …. 16.3 periodic tenancy, of …. 1.8

relief against forfeiture …. 19.6 reversion, some preserved …. 15.2 tenancy at will …. 1.8 term, whether lessee has power to …. 15.5 underlease, equivalent to …. 1.8, 15.2 Subletting assignment of term, compared with …. 15.2 breach of covenant against …. 15.5, 15.16 damages for, measure of …. 13.16 lease, may restrict …. 15.5, 15.16 purported, may terminate tenancy …. 15.5 tenancy at sufferance …. 15.5 tenancy at will …. 15.5 Substituted notice, see Notice to quit Superior landlord …. 15.2 Supreme Court rent relief, see Forfeiture Surrender abandonment, tenancy at will, of …. 16.11 abandonment of possession, whether amounts to …. 16.18 acceptance of, damages, effect on …. 16.26 contract by lessee to purchase, whether …. 16.19 determination of tenancy, by …. 16.11–16.14 determination of tenancy at will, abandoned, may only be …. 16.11 effect, of …. 16.22 express deed, whether essential for …. 16.12–16.14 equity, in …. 16.13 in futuro …. 16.15

legal …. 16.11–16.22 form …. 16.12 grant of new lease to third person, effect …. 16.21 joint tenants, by one only …. 16.16 licence, acceptance of, by lessee, effect …. 16.19 meaning …. 16.11, 16.14 merger, operates by way of …. 16.11 new letting to old lessee, whether …. 16.19 operation of law, by …. 16.17, 16.21 abandonment of possession …. 16.18 constituents of …. 16.17 contract by lessee to purchase premises …. 16.19 damages, measure of …. 16.26 grant of new lease …. 16.21 licence, acceptance of, by lessee …. 16.19 meaning of …. 16.17 new letting to old lessee …. 16.19 part of demise …. 16.19 rent, variation of, whether …. 16.19 void new lease, taking of, by lessee …. 16.19 part of demise …. 16.19 personal representative, by …. 16.20 sublease, effect on …. 16.3 Tenancy, see also Lease estoppel, 1.14, 20.8, see also Estoppel holding over, tenancy from year to year, whether …. 2.9-2.11 kinds of …. 2.1 Tenancy at sufferance, see also Lease

assignment, not capable …. 15.5 creation of, holding over, by …. 2.6, 2.9 fiction, mere …. 15.5 meaning …. 2.20 subletting, not capable, of …. 15.5 Tenancy at will, see also Lease; Periodic tenancy assignment capable of, whether …. 2.19, 15.5 purported, effect …. 15.5 contract of sale, arising, under …. 2.17 creation by contract, generally …. 2.15 contract of sale …. 2.17 implication …. 2.15–2.17 demising premises to third person …. 2.19 determination of acts, inconsistent with continuance …. 2.19 at will …. 2.15 death, by …. 2.15, 2.17 demand, by …. 2.19 writ claiming possession …. 2.19, 17.12 implication of, at common law …. 2.15 meaning …. 2.15 similarity to other relations …. 2.15 subletting capable of, whether …. 2.19, 15.5 purported, effect …. 15.5 Tenancy by estoppel see Estoppel Tenancy for fixed term, see also Lease

commencement of term certain, must be …. 2.2 uncertain event, on …. 2.2 determination of, see also Forfeiture; Notice to quit covenant, breach of, ground for …. 2.5 expiry, see Expiry notice to quit, by, whether …. 2.3, 16.5 re-entry, by …. 2.5 surrender, by …. 16.11–16.14 disclaimer, notice to quit, whether necessary …. 17.21 expiry automatic …. 2.3 effluxion of time …. 16.5 holding over, after, effect …. 2.3–2.9 notice to quit, necessary for …. 2.3, 16.5 overholding clauses, effect of …. 2.4 forfeiture, see Forfeiture meaning of …. 2.2 period of …. 2.2 surrender, determination of, by …. 16.11–16.14 tenant, overholding, ejectment of …. 2.6 waste, liability for …. 10.3 Tenancy from year to year, see also Lease; Periodic tenancy creation of, by holding over …. 2.4, 2.9–2.12 determination of, see also Determination of tenancy; Notice to quit notice to quit, by …. 2.8, 2.9 holding over, effect of …. 2.9–2.12 meaning of …. 2.7, 2.8

periodic tenancy, see also Periodic tenancy example of …. 2.7 yearly tenancy, distinguished from others …. 2.11 possession under void lease …. 1.6 verbal, creation of …. 1.6 vesting of, on death of tenant …. 2.21 waste, liability for …. 10.3 Tenancy in common, see also Lease abolished in England …. 5.15 lease by tenant …. 5.15 co-tenant, to …. 5.15 effect, of …. 5.15 stranger, to …. 5.15 notice to quit given by one tenant …. 5.15 partners, lease to, effect …. 5.15 possession, proceedings to remove by one tenant …. 5.15 Tenant, see also Lessee lodger, distinguished from …. 3.4 tenant’s covenants …. 10.8 Tenant at sufferance …. 2.6, 2.9 Tenant in possession, see Lease; Lessee option for renewal of lease, exercise after …. 14.5 Tender of rent …. 11.14 Title lessee’s liability to make, effect of …. 1.13 damages and …. 13.4 Trade fixtures/ornaments …. 10.5 Trade Practices Act see Australian Consumer Law Trespasser …. 3.9

summary proceedings, against …. 3.8 Trustee, see also Personal representative constructive, lessee may become …. 5.17 breach of trust, effect of lease in …. 5.17 grant of option, by …. 5.17 leasing powers …. 5.17 Trustee in bankruptcy lease of bankrupt’s property, power to grant …. 5.11 Unconscionable conduct Consumer Law …. 12.12 corporations …. 12.1 Underlease, see Sublease Underlessee, see Sublessee Unenforceable agreement defence against recovery of possession …. 4.10 Unincorporated association, see also Lease lease by …. 5.12 to …. 5.12 trustee for …. 5.12 Unilateral mistake rectification …. 6.8 Unstamped written lease evidence, as …. 11.28 Use and occupation action for agreement as evidence, in …. 11.28 amount recoverable …. 11.28

contract necessary …. 11.28 plaintiff’s proof …. 11.28 rent payable in advance …. 11.28 unstamped lease …. 11.28 User covenant tenant obligation …. 7.8 Usual covenants …. 8.10 enter and view …. 9.3 fact, question of …. 9.2 implied …. 9.1, 9.2 mode of establishing …. 9.2 proviso for re-entry …. 9.3 quiet enjoyment, 9.3, see also Rent rates and taxes, 9.3, see also Outgoings repair, keep and deliver up, in, 9.3, see also Repair Vacant possession covenant, tenant delivering …. 8.9 Verbal notice to quit …. 20.13 Victorian Civil and Administrative Tribunal (VCAT) Fair Trading Act jurisdiction …. 23.66 jurisdiction, extent …. 23.64 jurisdiction, statutory basis …. 23.63 powers …. 23.65 Waiver …. 17.18 acts amounting to …. 17.18 express …. 17.18 forfeiture …. 16.2, 17.18 knowledge required …. 17.18

Walsh v Lonsdale doctrine of …. 4.8 Warranty creation of …. 6.11 test to determine, whether …. 6.11 Waste action for, is action in tort …. 10.3 commissive …. 10.3 meaning …. 10.3 tenant, obligation not to commit …. 10.3 Words and phrases assigns …. 15.1 attornment …. 1.14 base rent …. 27.8 benefits …. 23.44 business …. 27.2 cash contract …. 2.17 casual ejector …. 22.2 concurrent lease …. 1.9 current market rent …. 27.8 demise …. 8.4 disclaimer …. 16.25 engaging in conduct …. 12.9 executive necessity …. 5.6 fair market rent …. 14.7 fine …. 15.15 fixture …. 10.5 forfeiture …. 18.1 full insurable value …. 13.17

future lease …. 1.10 good and substantial repair …. 10.8 ground rent …. 1.12 immediate landlord …. 15.2 interest …. 12.9 joint tenant …. 5.15 key money …. 28.5 lease …. 1.1, 26.2 lessee …. 15.2, 18.10 lessor …. 15.2 lettable area …. 28.1 licence …. 3.1 licensees …. 3.4 lodger …. 3.4 market rent …. 28.9 mesne lessee …. 15.4 mesne lessor …. 15.4 mesne lord …. 15.4 mesne profits …. 17.17 minimum equity …. 1.15 not less than …. 20.5 notice to quit …. 20.1 on or before …. 20.21 part performance …. 4.5 periodic tenancy …. 2.13, 2.14 rack rent …. 1.12 reasonable notice …. 20.3 re-entry …. 17.9

rent …. 11.1 repair …. 10.8 retail shop lease …. 26.2, 27.2 retail shopping centre …. 27.11 reversion …. 1.7, 20.8 reversionary lease …. 1.10 Saturday to Saturday tenancy …. 20.4 services …. 12.8 self-help …. 21.1 shopping centre …. 28.1 subject to contract …. 1.15 sublease …. 1.8 sublessor …. 15.4 superior landlord …. 15.2 surrender …. 16.11, 16.14–16.17 tenancy at will …. 2.15 tenancy for fixed term …. 2.2 tenancy from year to year …. 2.7 term …. 1.7 turnover …. 27.9, 28.10 waste …. 10.3 Writ, see Action for recovery of land Written offers oral acceptance …. 4.4

Related Titles Bradbrook & MacCallum, Easements and Restrictive Covenants in Australia, 3rd edition, 2010 Croft & Hay, Mortgagee’s Power of Sale, 3rd edition, 2012 Hockley, Croft, Hickie & Ho, Australian Commercial Arbitration, 2015 Tyler, Young & Croft, Fisher & Lightwood’s Law of Mortgage, 3rd edition, 2013