Property A Study Notes
The PLA came into effect December 1st 1975
Land Limits
Airspace Limits
 Trespass will occur if there is a direct unauthorised interference with the airspace of
another’s property Davies v Bennison
o This includes airspace that is required for the ordinary use and enjoyment of a
property Bernstein v Skyviews
o The interference does not have to be actual use and enjoyment, it could be potential
LJP Investments v Howard Chia
 And minor Kelsen v Imperial Tobacco
o Transient trespasses Graham v KD Morris
 Remedies;
o Damages if a once off event Davies v Bennison
o Injunction if ongoing, and damages not an appropriate remedy LJP Investments v
Howard Chia
o Mandatory injunction for removal Kelson v Imperial Tobacco
o Strict liability for damage by aircraft Damages by Aircraft Act 1999 (Cth)
o Creation of easement if in public interest and damages could be appropriate, under
s 180 PLA application.
 Consider cost to both parties Lang Parade v Peluso
o Right to abate nuisance if no damage, or removal under Neighbourhood Disputes
Act
 Compensation for some associated costs.
Rights Under Land
 Mineral Resources Act 1989 (Qld) most minerals (s 6) are property of Crown (s 8)
o Also Petroleum Act 1923 (Qld) s 9
o Cth owns Uranium Atomic Energy Act 1953 (Cth)
 Must not deprive neighbours of lateral support Dalton v Angus
o S 179 of Property Law Act
Riparian Rights
Water Act
S19
Vests in the state the right to use, flow and control all water in QLD
S20
Despite s19, an owner of a land adjoining a watercourse is allowed to take water
for domestic purposes/watering stock
Land Act
S8
A right line boundary is a right line boundary that is located approximately where
a tidal boundary might otherwise be located
S9
State owns land that is on the same side of a tidal boundary or a right line tidal
boundary as water subject to tidal influence
S9(2)
S9(4)
S10
S13A
S123(e)
For a tidal, navigable river, if the high water mark shifts over time gradually and
imperceptibly, then the boundary will shift
Confirms position at CL in relation to accretion to land which before
commencement of 2010 amendments, had a boundary formed by the high water
mark
Provides that where the land is raised above the high water mark because of the
carrying out of works that land belongs to the state (applies to tidal water) –
whether or not deliberate, state will own the land. This is also suggested for nontidal.
If it is a watercourse/lake other land that adjoins the boundary land on the
watercourse/lake side is state land
(4) Action against trespassers for owner of adjoining land.
Water licenses transfer with property title
Survey Mapping and Infrastructure Act – determines where a boundary is located
S62
Definition of right line boundary
S63
Watercourse is defined as a river, creek or other stream, in which water flows
permanently or intermittently, regardless of whether it is a natural channel or
artificial channel. It includes, in-stream islands, benches and bars.
S70
Definition tidal boundary - if identified by reference to water that is subject to
tidal influence/natural feature or thing whose existence and location on water
that is subject to tidal influence
S99(1)
Definition of non-tidal boundary lake
S99(2)
Definition of non-tidal boundary watercourse (and s100)
Accretion Question
 Applies to Crown Land Theosophy v SA
1. Is the boundary a tidal or non-tidal one?
a. Non-tidal – New land acquired if as the result of imperceptible accumulation AG
Southern Nigeria
i. If as a result of human intervention, no title – s 10 Land Act
b. Tidal – Boundary will be ambulatory s 9 (4) Land Act
2. Is the boundary ambulatory? S 70 SMIA
a. Boundary must be a tidal one.
b. Boundary must be identified with reference to a natural feature
c. The boundary must be incapable of being shown as a right line boundary
Fixtures
Answer Plan
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1.
2.
3.
4.
Was there a contractual agreement regarding what should happen?
o Necessary for retail shop leases, s 145 RTSLA
State an assumption as to the nature of the chattel if unclear, eg, a BIG shed, etc.
Decide - Was it the objective intention that the item becomes a fixture? Hobson v Gorringe
o No one test, all facts relevant NAB v Blacker
Degree of annexation (presumptions) – APA v Corneo
a. Connection with the land (Onus of proof) – APA v Corneo
b. Mode and extent of annexation – Removability? Destruction/damage – APA v
Corneo
i. If the area will look unsightly after removal Hawkins v Farley
ii. Or holes left Pan-Australian v Kalim
Objective object of annexation – Hobson v Gorringe
a. Time period of annexation – Permanent or temporary? APA v Corneo
b. Better use – For the object or the land? Holland v Hodgson
i. If property – likely fixture
ii. If for chattel – likely not fixture
c. Integration with other systems – Belgrave v Barlin-Scott
Community Standards regarding the chattel – Reid v Smith
Conclude what action the party should take! Damages or injunction?
a. At time of signing sale, fixtures pass, s 239 PLA
Illustrative Decisions
Fixtures
 Stove and substantial shed – Hawkins v Farley
 Air-conditioning – Belgrave v Barlin-Scott
 Carpeting – Laselle v Canadian Camdex
 Engine – Hobson v Gorringe
 Looms – Holland v Hodgson
Chattels
 Odd decision saying power lines are chattel – Anthony v Cth
 Chairs that have been moved around – APA v Corneo
 Ornamental tapestry – Leigh v Taylor
 Chandelier – Park v Lasrado
Rules of Priority Re Fixtures
1. Vendor & Purchaser – Fixtures alienated with land, unless contract provides otherwise.
Vendor loses right at time of signature
2. Beneficiary of Estate – Beneficiary of property receives fixtures.
3. Landlord & Tenant – Tenant can remove fixtures affixed for ornamental or domestic use.
4. Mortgagor and owner of chattels – Mortgagor has right to all fixtures at time of mortgage
plus those affixed after that.
5. Life tenant and remainder person – fixtures affixed by tenant pass to remainder person.
6. Third party may have equitable right – This will be defeated where another party acquires a
good faith legal interest for consideration without awareness of the dispossession of the
third parties rights to the fixtures (generally in mortgage cases such as Hobson v Gorringe)
7. Hire purchase agreement – Owner has license to enter property to remove chattel.
8. Fixtures cannot be severed from land for taxation purposes Commissioner of Taxation v
Metal Manufacturers
Tenant’s Rights of Removal
 Generally fixtures affixed by tenant become part of landlord’s realty. However;
o Contract may preclude this, otherwise;
 Right to remove if ornamental, domestic or for trade and do so before
expiry of lease (Bain v Brand).
 If tenant dies, right to removal even if lease expires on death Leigh v Taylor
o Tenant cannot remove “lessors fixtures” (one that are not appropriate for removal)
Sebea v Territory of Papua
 Agricultural tenants can remove fixtures they have created under s 155 of the PLA or receive
compensation s 156.
o Must be approved by land owner.
 C Law used to bar this Elwes v Maw
 Given reasonable time opportunity if ongoing lease expires and unable to remove in that
time Smith v City Petroleum
Mistake of Title
Mistake to Title Answer Plan
1. Common law - Mistaken owner committing trespass and nuisance. Affected owner can
remove encroachment. Brand v Chris Building Society
- Equity would intervene if owner of land realised occurrence of
encroachment, estoppel against owner preventing them from making a
claim to title.
2. Rights to Action - S 198 PLA
a. Improver/possessor of improvement
b. Interest party
c. Owner/possessor of affected land
d. Local authority
N.B. No action against parties not at fault (i.e. seller of land with
mistaken title improvement) Newman v Powter
3. Jurisdiction Exists? Where person does improvements on own mistaken view - S 196
a. Re Karynette – As long as the person who made mistake had a genuine belief
that they were doing the right thing the action does not have to be reasonable.
b. Are the Improvements Lasting?
i. Consider nature of improvement
1. Maley v Ukranian West Canada – Clearing is lasting.
2. Substantial fence – Re Karynette
3. Ploughing – Temporary – No compo
4. Relief must be just and equitable - S 197; Re Verdugo
i. Transfer of ownership with compensation
ii. Order removal of fence improvement
iii. Compensation for lost potential
iv. Lease land from land owner potentially.
Encroachment Answer Plan
1. At Common law, amounts to trespass Kelsen v Imperial Tobacco
2. Right to Action s 184 PLA
– Both encroaching owner, and owner of land that has been encroached upon
Not limited to estates in fee-simple; lease holders can’t bring an action.
Only land owners.
3. Does encroachment fall within scope of section?
a. Overhang and subterranean intrusions relevant – s 182 PLA
b. Must be a permanent structure Ex Parte Van Achterberg
4. Determine remedies available – s 185 PLA
Aim for most equitable solution Cantamessa v Sanderson
a. Compensation
i. Affected must mitigate loss Re Melden Homes
ii. Minimum amount is unimproved value of land
 Tripled if encroachment intentional/negligent
 S 186 PLA – Circumstances, value of land, loss and damage possible
will affect amount.
b. Transfer of title
i. Only over affected area Tallon v Metropolitan
ii. Easement if short length of time left Kostis v Devitt
c. Order for removal of encroachment
5. Orders made with reference to; s 185;
a. Who makes application
b. Situation, value of land, nature and extent of encroachment
c. Character of encroachment
d. Loss and damage incurred by adjacent owner
e. Loss and damage to encroaching owner if order for removal granted
f. Circumstances of encroachment.
Tenure in Australia
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No tenure for benefit of Crown for fee simple created after enactment of PLA s 20 PLA
No escheat (reversion to the Crown) for those died post 1968 and quit rent s 20 PLA
o Unless no-one to pass to under Succession Act
Transfers can occur without license or fine s 21 PLA
Estates in Australia
THINK CAREFULLY ABOUT WORDS USED IN PROBLEM, WHAT IS THEIR INTENTION?
1. In Fee Simple
 Can be created s 19 PLA; pass while owner is alive or on their death by will
 Default nature of estate S 29 PLA
2. In Fee Tail
 Now abolished (s 19 PLA silence)
i. Fee tail intention results in fee simple creation s 22 PLA
3. Life Estate
 For as long as holder lives; or another person.
i. Subject to doctrine of Waste – Liable for damages to remainderperson for
degradation s 24 PLA
ii. Only allowed to commit equitable waste if expressly conferred s 25 PLA
 Only occurs by clear expression that this is intention; default position is that estate is
in fee simple s 29 PLA
Waste
1. Permissive Waste – Allowing stuff to decay; only if expressly provided for Re Cartwright
2. Voluntary Waste – Due to positive act, eg; cutting timber Honywood v Honywood
3. Equitable Waste – Purposeful waste where no liability provided for, but inequitable not to
compensate remainderperson Vane v Lord Barnard
4. Ameliorating – Alters the land entirely. Rare. Hyman v Rose
Modified Fee Simples
Determinable Fee Simple – ‘While’, ‘during’, ‘as long as’, ‘until’
 Duration of estate limited by a possible (but not definite) event
o Occurrence of event, grantor automatically resumes title
 No issues with adverse possession
 If determining event fails (eg illegal) then the estate fails, grantor retains ownership
o Courts cautious to deem event failed.

Conditions that may be invalid could be valid as a determinable event (eg, grant to A until A
alienates) Caboche v Ramsay
Conditional Fee Simple - ‘Provided that’, ‘on condition that’, ‘but it’ ‘it happens that’
 Estate is absolute; if condition breached then grantor has right to resume
o Not automatic, can waive right; can be barred by Limitations of Actions Act (Qld)
 If condition void, it is severed and ignored. Re Dugdale
o Void if total, not partial restraint In Re Macleay
o Obligation wilfully assumed by purchaser not void Wollondilly v Picton Power
o Not void if for limited duration Wollondilly v Picton Power
 Voided due to;
1. Policy Reasons
 Zapetal v Wright (immoral relationship)
o But if situation already existed, valid Andrews v Parker
 Can’t marry a class Duggan v Kelly
 Asking for divorce okay Ellaway v Lawson
2. Against Course of Law
 If contrary to normal legal rules, such as A as long as he does not
become bankrupt Caboche v Ramsay
3. Lack of clarity
 Live in Canada Sifton v Sifton
4. Alienation Limits
 General limit on alienation is invalid Re Dugdale
 Partial is acceptable;
o Only sell within family Re Macleay
o Not acceptable if inequitable to seller, for example, forced
to sell at well below market price Saliba v Saliba
Collateral Contracts
 Can be used to limit interests too Hall v Busst
o Still susceptible to voiding due to limits it poses on party with title Hall v Busst
o Acceptable if for a limited duration Wollondilly v Picton Power
Possession
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
Possessor can make claim against whole world except those with better title Perry v Clissold
o Prior possessor has better title than later possessor
 Unless doctrine of adverse possession applies.
Possessor acquires proprietary right Asher v Whitlock
o Can trump paper title if Limitations of Actions Act applies
Adverse Possession – Possessory Title
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
Includes land under pastoral leasehold Eckford v Stanbroke
Does not include against crown – s 6 (4) Limitations of Actions Act
Requirements
1. Possession that is Adverse to the True Owner
(“Open, peaceful, adverse”) – Mulchay v Curramore
a. Physical control Buckinghamshire v Moran
i. Physical exclusion of others (fencing and gates), only access via
dispossessor’s land, maintenance of squatted land. Sum of facts.
ii. Treating land as owner would Pye v Graham
iii. “No trespassing signs” Powell v Macfarlane
iv. Use as communal tennis court not sufficient Riley v Pentilla
b. Intention to exclude others
i. Fencing and limitation of access Buckinghamshire v Moran
ii. Contrary to approval of true owner Shaw v Garbutt
iii. Must be open about ownership Woodward v Wesley
2. Possession for Period Barring Action
a. 12 years s 13 Statute of Limitations 1974
b. If claim based on several possessors all arising from original adverse possession then
good claim Mulcahy v Curramore
Native Title
Mabo (No 2) Results
 Land rights proscribed by indigenous laws and customs recognised by C Law of Aus
 Murray Islanders provided with essentially a proprietary right
 Native Title could be extinguished by acts of the Crown, but these in turn post 1975 were
subject to the Racial Discrimination Act 1975 (Cth)
o State acts extinguishing native title would be inconsistent to the extent of that
extinguishment WA v Cth
o Post RDA extinguishment must pay compensation, pre 1975 does not.
 Also consider s 51 resumptions on “just terms” Ward
 Aboriginals do not have sovereignty of their lands, this was extinguished by British
settlement; approving Coe v Cth
Wik leading to 1998 Amendments
 Pastoral leases don’t necessarily extinguish NT Wik v QLD
o Look at inconsistency of incidents
 Then determine the legal rights that exist, those that are inconsistent with
NT rights invalidate them Ward
Elements of Native Title

Fee simple extinguishes NT Fejo v NT
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
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NT is limited to uses as provided under traditional laws and customs Mabo (No 2); WA v
Ward
o Does not exclude use of commercial fishing, mining, navigation but can include seas
Yamirr
o Control fishing, at least under statutory fee simple grants Blue Mud Bay
o Recognition, not creation of NT rights.
Varies based on different community values WA v Ward
o Does not include mineral rights.
Inalieanable, but can be surrendered to the crown for conversion to fee simple per s 56 NTA
NT can be vested in body corporate, or a trust.
Can be dispossessed if law extinguishes NT but has a non-discriminatory effect on all groups
land rights Ward
o If dispossession and compensation paid to non NT parties, RDA will extend
compensation to NT holders.
o If dispossesses only NT holders of their rights, it is invalid, s 19 NTA validates these
type of acts.
Crown Land
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Does not receive exclusive possession, does not extinguish native title Wik v Qld
Can be in perpetuity, and applications can be made to convert leasehold land to fee simple
under the Land Act 1994
Renewal must be after consideration of things like public policy (16(1) LA), the environment,
and whether conditions of lease met.
DOC for land (s 199), control noxious weeds (s 200), and give info where requested (s 201).
o Forfeiture if breached – s 234
Lease forfeited if rent not paid – s 234
Compensation for improvements upon forfeiture.
Dealing with Native Title
Common Law
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Extinguished entirely by;
o Fee simples extinguish NT Fejo
o Exclusive possession leases, such as perpetual leases extinguish Wilson v Anderson
Partial extinguishment occurs when other party’s rights are inconsistent with NT
 Eg, exclusive possession rights, controlled access to land, etc.
o Non-exclusive pastoral leases Wik
o Mining leases Ward
NT rights never resurrect, if NT is disturbed at any point it is extinguished. Fejo, Ward
Native Title Claim
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
1.
Yorta Yorta provides guide to dealing with s 223 NTA
Right to pursue traditional activities that are barred by other acts s 211
Gain inalienable interest, can relinquish for conversion to fee simple s 56
A connection to the land and waters by the traditional laws and
customs.
a) Identify the content of the traditional rights and interests in
relation to the land and waters held pursuant to the
traditional laws and customs
b) Demonstrate how through traditional laws and customs the
claimant group has a connection with the land or waters
NB: Occupation of the land is not sufficient to establish NT
Does not require physical connection to the land and can be
established without continuous physical presence on the land
Native title must be possessed under the traditional laws
acknowledged and the traditional customs observed by the
claimant group
a) The laws and customs that the claimants currently observe,
and which they rely upon to support the claimed native title
rights and interests, are substantially the same as those that
were observed by their ancestors at the time the Crown
asserted sovereignty over the claim area. (traditional = presovereignty)
b) The acknowledgment and observance of those laws and
customs by members of the claimant society has continued
substantially uninterrupted since the date of the acquisition
of sovereignty by the Crown. (continuity)
The use of contemporary means to undertake traditional activities
will not of itself mean a loss of NT
S223(1)(b)
Ward
3.
The existence of a body of persons – a society - (an identifiable
group, community or normative society)that is “united in and by its
acknowledgement and observance of a body of laws and customs”
The normative system, that is the system of laws and customs,
must be that of a society that existed at the time the Crown
asserted sovereignty. The laws and customs cannot be those of a
later and different society.
S223(1)(a)
Yorta
4.
That native title has not been extinguished or is otherwise not
recognised by the common law. (see below)
The onus of proof rests with the applicants
S223(1)(c)
2.
Yorta
Ward
Ward
S223(1)(a)
Ward; Yorta
Yorta
Maybe
commercial
rights?
Akiba
Yorta
Yanner v Eaton
Extinguishment of NT
At Common Law
 Fee simple grant Fejo
 Exclusive possession leases, such as perpetual leases Wilson v Anderson
 Partial extinguishment occurs when other party’s rights are inconsistent with NT
 Eg, exclusive possession rights, controlled access to land, etc.
o Non-exclusive pastoral leases Wik
o Mining leases Ward
 NT rights never resurrect, if NT is disturbed at any point it is extinguished. Fejo, Ward
Executive Grants
 Look at legal nature of interests to determine if incompatible Ward
 Must be clear intention to extinguish NT Wik
 NT extinguished to extent of inconsistency Wik
Statutory Extinguishment
 Must have plain and clear intention, and extinguishes to extent of inconsistency Wik
 Regulation alone does not extinguish NT Yanner v Eaton
NTA Validation of Actions
1. Is it a Cth action?
2. Is it a future dealing (post Wik) or a confirmation dealing (pre Wik?)
Past Dealings – Pre 1 July 1993 Legislation, Pre 1 Jan 1994 Grants – s 15 NTA
Category A
Category B
Category C
Category D
Freehold Estates;
commercial, agricultural,
pastoral, residential leases. S
229
Community group leases s
230
Mining Leases
All other leases
Total extinguishment
Extinguishment to extent of
inconsistency
NT suspended until lease
expires
Intermediate Period Acts (Between Wik – 1 Jan 1994 and Ward – 23 Dec 1996)
Same as above.
Extinguishment under the Native Title Act (Cth) – 1/1/1994
1.
Review the Act
a. Is it a Cth or State act?
i. If it is Cth, apply NTA
b. Note the date on which Act occurred
2.
3.
i. If the act took place after 23/12/96 then refer to the future dealings regimes
provision
ii. If the act took place prior to 23/12/96 then refer directly to the confirmation
of extinguishment provisions
Future Dealings Regime (If post 23/12/1996)
a. Part 2, Division 3 of the NTA
i. Review the NTA to determine if dealings occurring on or after 1 January
1994 are valid/invalid
ii. Future acts are valid if permitted by NTA but invalid to the extent they affect
NT are not covered by NTA: s24AA(2); s233
Does the act single out NT alone for detrimental treatment? WA v
Ward
iii. The non extinguishment principle generally applies to NT in the future
dealings regime: s238
Confirmation of Extinguishment
a. Part 2, division 2B of NTA
i. PEPA – act which occurred on or before 23/12/1996
1. Does the dealing meet the definition of a PEPA: s23B
a. Is it valid or validated? (see valid/invalid but validated
below)
b. It is a schedule interest?
c. Is it a private freehold, exclusive leasehold or public work?
2. If it is PEPA then the dealing will totally extinguish NT: ss23A, 23C
a. Include the grant or vesting of:
i. a Schedule interest: (s 23B(2)(c)(i) cl 21;
249C NTA);
ii. a freehold estate (s 23B(2)(c)(ii) NTA);
iii. commercial leases that are neither
agricultural or pastoral (s 23B(2)(c)(iii)
NTA);
iv. residential leases (s 23B(2)(c)(v) NTA);
v. exclusive possession leases (other than
mining leases) (s23B(2)(c)(viii) NTA).
vi. And, public works commenced on or prior to
23 December 1996 (ss247A, 248A).
b. If you interest falls here, then you don’t need to look
anywhere else – just s23B(2)(c)
4.
ii. PNEPA – act which occurred 23/12/1996
1. Does the dealing meet the definition of PNEPA: s23F
a. Is it valid or validated? (see valid/invalid but validated
below)
b. Is it a non-exclusive possession pastoral or agricultural
lease?
2. If it is a PNEPA then the dealings will extinguish NT to the extent of
inconsistency: ss23A, 23G
a. So look to CL as to the extent of inconsistency: Wik/Ward
3. Exception: A pastoral lease validated as Category A past act (NTA pt
2, Div 2, ss15, 229) totally extinguishes NT: s23G(2)
Neither a PEPA nor PNEPA
a. The confirmation of extinguishment provisions in the NTA will not apply
5.
b. Determine if the dealing is valid, invalid or invalid but could be validated under the
NTA
Valid and Invalid dealings
a. To determine if the dealing is valid or invalid review the HC’s test regarding validity
in Ward and the application of the RDA
b. Note the date when the dealing is occurred – whether prior to or after 31 October
1975
i. Valid dealings
1. Dealings occurring prior to 1975 will generally be valid, despite the
existence of NT
2. The validation provisions of the NTA (Pt 2, Divs 2 and 2A) do not
apply to valid grants. The implication of such valid acts are to be
determined under confirmation of extinguishment provisions. If not
dealt with in confirmation provisions, then look to common law
rules of extinguishment
3. If the dealing is PEPA or PNEPA then its affect on NT will be
determined by CL
ii. Invalid dealings
1. If the dealing is invalid for reasons other than the existence of NT
then it will not be validated under the NTA
2. Invalid dealings have no affect on NT
iii. Invalid but Validated dealings
1. Dealings occurring post 1975 will generally, because of the existence
of NT be invalid.
a. Invalidity occurs where inconsistency with the RDA exists,
and commonwealth actions which extinguish native title
without just terms are invalid Ward
2. If the dealing is invalid because of the existence of NT then it will be
validated by the NTA (NTA Pt 2, Divs 2 and 2A, ss228(2)(b),
s232A(2)(c)
3. Determine if the dealing was validated as a past act or an
intermediate period act: NTA ss15, 22B
a. Past Act – Part 2, Div 2 of the NTA
i. Does the dealing meet the definition of ‘past act’:
s228 (prior to 1/07/1993)
ii. Does the dealing adversely affect NT? S228(2)
iii. Was it undertaken post 1975 but prior to 1 July
1993 in the case of legislation, or prior to 1 January
1994 in the case of grants?
If so, then the dealing is validated by the
NTA and the effect of validation on NT is
either to extinguish or suspend NT and is
determined by the past act provisions: ss15,
229-232
Note: if the past act is also a PEPA or PNEPA, then
the effect of the dealing on NT will be determined
by the confirmation of extinguishment provisions
(s23C, 23G) with the exception of pastoral and
agricultural leases (Category A past acts): ss23(G)(2),
15 NTA
b. Intermediate Period Act: part 2, div 2A of NTA
i. Does the dealing meet the definition of an
intermediate period act: s232A
ii. Does the dealing adversely affect NT: s232A(2)(c)
iii. Was it undertaken after 1 January 1994, but prior to
23 December 1996?
iv. Is it a non-legislative dealing?
v. Was the dealing done over freehold or leasehold, or
was the dealing the construction of public works?
If so, then the dealing is validated by the
NTA and the effect of validation on NT is
either to extinguish or suspend NT and is
determined by the intermediate period act
provisions: s22B, 233B-232E
vi. Note: if the intermediate period act is also a PEPA or
PNEPA then the effect of the dealing on NT will be
determined by the confirmation of extinguishment
provisions: s23C, 23G
Note: s47 of NTA on past extinguishment can be disregarded in certain circumstances when a NT
claim is made.
Legal and Equitable Interests in Land

Equitable estates;
o Rights to beneficial use and enjoyment
o Good against all, except;
1. Bona fide purchaser of the legal estate for
2. Value and
3. Without notice
 S 256 PLA gives implied notice that normal legal work would make
aware of
Examples of Legal and Equitable Interests
1. A trust for use
 Does not require formal compliance to be created s 11(2) PLA
2. The Equitable Fee Simple
 A purchaser has an equitable fee simple on the signing of a contract of sale because the
purchaser has a right to specific performance of the contact. Tanwar Enterprises Pty Ltd v
Cauchi
o In equity the purchaser has a right to compel the vendor to transfer the land itself,
this does not exist at common law. Lysaght v Edwards
 Trust relationship forms, equity treats vendor as trustee for the purchasor.
 This is exercisable against the estate of the vendor.
o Purchasor’s equitable fee-simple is related to the size of their deposit, eg a deposit
of 10% means a 10% equitable interest in the land.
o
Vendor is a qualified trustee, they retain an interest in the land.
 Entitled to remain in possession until settlement.
 Vendor can take rents and profits during this period.
3. The Equitable Lease
 An equitable lease arises out of a binding contract/agreement for a lease which can
be enforced by an order for specific performance.
o Forces creation of a legal lease, tenant brings the action
o Tennant has a lease under the same terms in equity as what the legal lease
will be. (Equitable right to a legal lease)
o Legal rights of landlord can be exercised Walsh v Lonsdale
 Requires; (Walsh v Lonsdale)
o Terms must be certain and definite (re time, amount)
o Valuable consideration must exist (promise is sufficient)
o Agreement must be in writing
 Limited by;
o Possibility of defeat by bona fide purchaser for value without notice
o Relies on courts for enforcement.
Statutory Requirements Re Legal and Equitable Rights
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
S 10 PLA
o Conveyances and disposition in land must be made by deed or in writing and signed.
S 11 PLA
o Requires equitable interests to have a written contract to support
o Trusts can only be created with relevant consideration provided s 11 (1) and (2) PLA
 Remember – Equity does not assist volunteers
S 181 LTA
o No legal title until registration
 Means that almost all rights in land will begin as equitable, and then become
a legal.
 Upon registration, interest becomes legal s 182
S 59 PLA
o Contracts concerning land require;
 Note/memorandum of contact
 In writing
 Signed by party under obligation
 Includes essential terms.
 Price, parties, promises and property.
(Equity won’t intervene while still negotiating)
o S 5(1) PLA
 PLA is subject to LTA
Exceptions to Statutory Requirements Regarding Legal and Equitable
Interests in Land
Equitable Doctrine of Part Performance – s 6(D) PLA Preserves and Protects
 Oral contact create interest in land
o Proved by oral evidence
o When, partial performance of obligations has occurred
 Established principles as to what is acceptable.
 P must prove (Regent v Millet);
o It would be fraudulent for the other party to deny the contract’s existence
 D must have known of acts at a minimum and at least passively encouraged
their performance
 If totally unaware, no intervention
o The acts of part performance are only explicable to a contract generally of the type
alleged to exist (Maddison v Alderson)
 Eg referable to contract re land, must prove it is land contract BRD (Regent v
Millet);
 Move into possession and pay rent – Kingswood v Anderson
 Possession, repairs and mortgage repayments – Regent v Millet
o Going into possession alone does not distinguish lease from
sale of land.
 Making improvements upon request – Rawlinson v Ames
 Not necessary for exact acts to be specified by contract
 Pre-contractual acts are not acts that amount to part performance,
eg valuations.
 If referable to several contracts, not specific enough McBride v Sandland
 Open to debate, Southcoast Oils v Look Enterprises wider.
o Evidence of concluded agreement
 Proof of terms of agreement
o Contract capable of specific performance
Equitable Remedies
(Discretionary)
1. Injunction
2. Specific Performance
Forces creation of ultimate legal interest.
Requires;
i. A valid and binding contract: (terms must be certain and definite,
consideration must be valuable, therefore does not apply to deeds)
ii. Damages must not be an adequate remedy. Always true re land Pianata
iii. The plaintiff must be ready, willing and able to perform his/her obligations
under the contract.
b. Contracts that can’t be specifically enforceable;
i. Ones lacking mutuality
ii.
iii.
iv.
v.
For personal services and relationships
That extend over a period
Ones that require supervision by the court.
Hardship would occur for the D Blomley v Ryan
CO-OWNERSHIP
Types of Co-ownership

S 33 PLA – Legal and equitable interests can be held as common or joint tenancy.
JOINT TENANCY
Requires;
1. Four Unities
I. Possession – All co-owners have right to non-exclusive possession of the whole
estate.
II. Interests – Are in the same proportion and for the same duration, eg life.
III. Title – The same instrument created all interests.
IV. Time – The interest was vested at the same time.
2. Right of Survivorship
I. On death of co-owner, their interests vests in survivors
i. Nothing they do can affect this
ii. Unless all tenants agree mutually to do this.
iii. S 65 Succession Act says that if same event kills joint tenants, they are
assumed to die in order of seniority.
 Arrangements generally exist in matrimonial home, trustees and mortgagors
o Consider that a common tenancy can exist in the beneficial interest in
equity.
Common Tenancy



Only requires unity of Possession
o Other unities can exist, but don’t have to.
Interests do not have to be equal
No right of survivorship exists.
Creation of Co-Ownerships

Assumed to be a tenancy in common s 35(1) PLA
o Unless;
 Expressly stated otherwise s 35(2)(a) PLA - “participate” indicates common
 Executor, administrator, trustee or mortgagee hold property s 35(2)(a)
 Held for a partnership s 35(2)(b) – But equitable interest is in common s
35(3)
o Therefore tenancy in common where;
 Using words of severance
 The absence of a unity

 Incomplete explanation of interests
 Consideration of practicality of JT vs TiC Re Barbour
Pre PLA courts prepared to consider what was the most rational outcome;
o Re Barbour (splitting land too much, made joint tenancy)
o Re Rose Deceased (joint tenancy impossible due to will meaning unity of time
impossible with children coming of age at different times)
LTA Has No Altering Effect
 S 56 (1) says both are possible, s 56(2) says where not stated it is common
 S 57 says separate titles can be issued where tenancy in common.
Co-Ownership in Law vs Equity
Equity presumes a tenancy in common where;


1. Partnership Spence v Federal Commissioner Taxation, s 35(3) PLA
 At Law, interest is held as joint tenancy
2. Where unequal payment of purchase monies occurred
 Can be joint tenants at law, common at equity with non-contributor holding
beneficial interest on trust. Calverley v Green
 Exception for H and W, if H buys, W has joint interest in law & 50% interest
in equity. Trustees John Daniel v Cummins
3. In Mortgages – s 35(2) PLA
Eg, If A B and C in Joint, A dies, B and C get interest at law, in equity B and C hold A’s interest
on trust, for their legal representatives.
May extent to leases possible Malayan Credit v Jack Chia
Rights Between Co-Owners
1. Rights to Occupation
 All parties have right to occupy property subject to the other owner’s rights
 Includes bringing strangers on Thrift v Thrift (lover)
o Can lease to a tenant, but tenant does not have exclusive possession.
 Can exclude parties other than co-owners Catanzarti v Whitehouse
 No liability to pay rent as long as no exclusion occurring Luke v Luke
o Except where;
 Agreement to pay rent
 Making a claim for contribution to improvements, must offset rent
payments Teasdale v Sanderson
 Relationship breakdown Callow v Rupchev
 Where there has been ouster, occurs when;
o Not reasonable for excluded co-owner to exercise right of
occupation Re Thurgood (eg, police, and drunkenness)
o Denying other’s interest in property Biviano v Natoli
o Changing locks Beresford v Booth
 Rights to court order for entry to property, or payment of rent to
compensate for loss of comparable lodgings Biviano v Natoli
2. Rights to Profits
 Right to action for account where one co-owner has received more than their
“proportionate share of profits” s 43 PLA
o Exception where;
 Profits are due to co-owner’s own labour based on Henderson v Eason
 Can be factored in accounts on sale (s 38) as a result of s 42.
3. Rights to Compensation for Improvements and Repairs
 C law had no remedy unless;
• Contract
• Joint obligation to make improvement Leigh v Dickeson
 Equity
• Right when co-ownership brought to end. Limit is to stop rich co-owners incurring
expenses to force poorer coowners out.
• Claim only upon wind-up, claimee doesn’t have to have done work, just incurred
expense Brickwood v Young
• Consider set-off for rent received potentially.
• Improver has right to lesser of (McMahon v Public Curator);
• Cost of improvements or
• Increase in land value
 No claims for;
• Ordinary repairs McMahon v Public Curator
• Unless, agreement exists.
• Common obligation exists
• If repairs go beyond maintenance, eg, replacing a roof Forgeard v Shanahan
4. Liabilities for Outgoings
 Joint liability for;
o Rates Scapinello
o Mortgage payments Forgeard v Shanahan
 Insurance and pest control not joint liability Forgeard v Shanahan
5. Termination of Co-Ownership
Termination of Joint Tenancy
Can occur by;
1. Conversion into tenancy in severalty
2. Severance – Conversion to tenancy in common
 Destruction of a joint unity; alienation,
 written agreement Williams v Hensman (s 11(1)(a) PLA)
o (must be binding contract Public Trustees v Fiefel, and
o registered s 181 LTA
 or conduct Williams v Hensman
 Cross transfer can occur Wright v Gibbons
 Transfer in equity or law Corin v Patton










Mortgage doesn’t for Torrens land Lyons v Lyons, s 172 LTA
“charge”
Lease doesn’t for Torrens land, just suspends Frieze v Unger
Bankruptcy if a unity is destroyed.
A mutual will won’t itself destroy joint tenancy, but will ensure upon
death of all tenants that the wishes of all tenants are supported.
Court orders effecting it Re Pozzi
Informal agreements are ineffective (as in Corin v Patton)
Homicide, means (Re Stone);
o Surviving joint tenants get their proportionate share under
right to survivorship.
o Murderous joint tenant retains the proportionate share they
had prior to the homicide.
o The share that should have transferred to the murderous
joint tenant is distributed according to the will of the
murdered tenant, held on trust in equity.
Rasmanis v. Jurewitsch
By informal agreement in Burgess but unlikely to follow in QLD,
especially given s 11(1)(a) PLA
o When formal agreement indicates a method to sever, can
apply (pay out) Sprott v Harper
Severance by course of dealing occurs where objectively it appears
that the parties do not consider the tenancy to be one held jointly.
Saleeba v Wilke
o A lack of concluded (but attempted) severance would
indicate still a joint tenancy.
o Negotiations alone are not sufficient Magill v Magill
3. Partition or Sale
Severance under LTA
 Can occur unilaterally s 59 (1)
 Order must be delivered to other joint tenants s 59 (2)
 Effective on registration s 59(3)
o If die before registration, no unilateral severance Lennon v Bell
o If die after registration, the interest passes under will Peldan v Anderson
Termination of Tenancy in Common
 Sale to one party.
 Partition or Sale
o One or more co-owners can make substantive application to court for partition or
sale. S 38 PLA
 Trustees hold property s 37A
 To effect physical partition of land s 37B


Application for sale could be converted to partition if good reasons for doing
so are provided s 38(4)
 Pannizutti v Trask – Won’t do where minor party is doing so to
benefit themselves. Discretionary.
 Re Darby – Not going to partition if decrease value (agricultural
land becoming too fractured).
Court may have discretion to deny application for sale Nullagine v WA Club
 Where parties have not expressly excluded statute.
 Greater ownership, probably greater right to make order for sale.
(Nullagine had 50% interest)
 Having contractual method probably limits s 38 application
Permanent Trustees v Coral
Leasehold Interests in Land
Always Require;
1. Legal Right to Exclusive Possession
 Necessary but not sufficient alone – One of substance not form Radaich v
Smith
 Look at all circumstances to determine if exists, nature of premises,
and intention. Terms alone not definitive Radiach v Smith
 Lessor still has right to inspections s 107 PLA
 Intention through terms can support view
2. Certainty of Duration
 If lacking, void for uncertainty Prudential Assurance v London Residuary
 Definitive start, continuance and ending Say v Smith
 Contingencies suffice for starting Southcoast v Look but not ending
Lace v Chantler
 For duration of life acceptable Haslam v Money for Living
3. Proper Creation
a. In writing, etc.
TYPES OF LEASES AND TENANCIES
1. Fixed Term
 Lease for a define period of time
 Duration certain from outset
 Do not need to enter land prior to taking possession s 102 PLA
2. Periodic Tenancy
 Defined periods, eg, week to week.
 Creation by;
1. Express agreement, or
2. Legal Implication
Terminated by valid notice under PLA
 Must be (s 131);
1. In writing and signed
2. Acknowledge premises
3. Give time for termination, being at least 1 period
4. Provided before end of current cycle.
At least one period’s notice

Served to tenant, placed on the property conspicuously, given to 18 year
old there s 132 PLA
o Weekly – s 133
o Monthly – s 134
o Yearly – s 135
3. Yearly Tenancy
 Created by;
1. Express Grant
2. Implied Agreement
3. Holding Over
4. Terms of lease are too vague or uncertain
5. Informal agreements
 Implied once rent is paid Moore v Dimond
a. Not the case now due to s 129 PLA
b. Each payment is its own divisible period.
c. No agreement for duration, then no agreed upon duration
Dockrill v Cavanagah
Terminated by;


At C Law – Minimum 6 months notice from completed cycle of
tenancy
PLA s 135 does not affect if expressly created yearly tenancy

S 129 – Says if no formal agreement, then tenancy at will of both
parties with 1 month writing notice necessary for termination
4. Tenancy at Will
 Created in any of the following, where tenant has possession and;
1. Negotiations as to terms of proposed lease/tenancy continuing but
possession exists
2. Purchase of property likely in future
3. Rent not paid regularly enough to create periodic tenancy
4. Tenant in occupation after expiry of lease, but prior to paying rent on
periodic basis
 Termination;
1. Notice for a reasonable period – s 137 PLA
 Based on circumstances of creation, nature and terms of lease itself.
2. Generally 1 month is reasonable Turner v York Motors
 Consider relevant circumstances
5. Tenancy at Sufferance
 Where party “holds over” after termination of a lease
6. Tenancy by Estoppel
 Both lessor and lessee are estopped from denying existence of lease Industrial
(Barton) v Associated Electrical
Requirements for Creation of Lease
Leases more than 3 years
 In writing and signed by lessor ss 10, 11 PLA
 Evidenced in writing and signed by lessor s 59 PLA
 Torrens Land
o Effective upon registration (legally) s 181, 182
 If not complied with, void at law and;
o No legal estate passed to lessee
o No legal interest in land for period stated by lease
o But if in possession and paying rent, C Law implies yearly tenancy (Dimond)
 PLA converts to tenancy at will, s 129 – Terminable with 1 months’ notice
 Effect in Contract
o If s 59 PLA satisfied – Contractually enforceable for damages Leitz Leeholme v
Robinson
 Effect in Equity
o If in writing and spec performable, Walsh v Londsdale will apply
 Consider doctrine of part performance to oral leases
Leases Less than 3 Years
 Can be created legally orally s 12(2) PLA
o Possession must be taken
 Do not have to be registered s 185(1) LTA, but not indefeasible.
Covenants in Leases
For Quiet Enjoyment
• Landlord (and agrents) cannot disturb tenant’s possession and use of premises Kenny v
Preen
• Also liable for acts of third parties disturbing tenant where (Australian Traveller v Marklea)
1. Aware of disturbance
2. Has power to stop disturbance (aka other tenants are disturbing affected tenant)
• No liability if inherent defect Southwark v Baxter
3. Landlord fails to exercise ability
• Examples of breach;
• Overflowing pipes Martins Camera v Mayfair
• Cutting electricity/gas Perera v Vandiyar
• Blocking property, limiting customers Berndt v Walsh
• Excessive noise Southwark v Baxter
To Not Derogate from Grant
 Landlord must not do anything that interferes or is inconsistent with purpose of tenant’s
lease of premises Aldin v Latimer
 Aussie Traveller v Marklea where aware of reason for use of premises.
 Does not include pure economic loss Port v Griffiths
To Maintain Premises in Good Repair in Short Term Leases
 Fit for human habitation
 Implied by PLA s 106(1)(a)
o Must be clean, fit to live in, in good repair, and meets Health and Safety Standards
o Fit to live in if normal use of property will not have adverse effect on health or lead
to injury Summers v Salford Corp
 Obligation only arises where landlord knows or should have known of defect O’Brien v
Robinson
o Liability in tort where failure to take reasonable care for safety of premises and
damage to tenant occurs that is reasonably foreseeable Northern Sandblasting v
Harris
 Now limited to cases where clear negligence on landlord’s part – No strict
liability Jones v Bartlett – Must take mitigation measures.
Tenant’s Remedies
For breach of covenant by landlord, may claim;


Damages, including for loss of bargain if lease repudiated
Terminate lease (if serious breach)
Rent owing will be set off against damages British Anzani
Powers of Landlord
Unless otherwise agreed, s 107 PLA implies rights;




To enter and view premises
To enter and repair
To enter and carry out requirements of public authority
To re-enter and take possession
Tenant’s Covenants



Pay rent – If not express, implied s 105(1)(a)
Keep in good and tenable repair if no other agreement s 105(1)(b)
o Long Term Leases
 Decided with regard to condition at start of lease
 Exceptions for general wear, fire, lightning, storms.
 Age, character, location and use also relevant, not absolute state of repair
Proudfoot v Hart
 Direct effects of wear and tear, does not cover consequential damage due to
wear and tear Haskell v Marlow
 Can be contracted out of
o Short Term Leases
 Short term – landlord must maintain fit for human habitation s 106(1)(a)
 Lessee must take care, and responsibility for own damage/damages of
others who are invited onto premises s 106(1)(b)
 Undertake regular maintenance and not wilfully/negligently damage
Warren v Keen
 Cannot be contracted out of s 106(2)
 Damages limited to value of diminution of value of reversion s 112
Not to assign or sublet if term expressly includes need for lessor’s consent
o Cannot be withheld unreasonably s 121 PLA
 Consideration of landlord’s interest, financial position of proposed assignee
Houlder v Gibbs
 Have to submit all relevant information provided;
Then court determine what reasonable person in position do Daventry v
Bacalakis
 May be able to consider landlord’s plans for building JA MacBeath v Jenkins
o Failure to seek approval is breach of covenant
Assignment of Leases


All original covenants implied to assignment s 53(2) PLA
On assignment, only covenants that touch and concern the land are enforceable and pass
with the estate to the assignee (not under original contract because privity) Spencer’s Case
o Do so if affect landlord-tenant relationship, nature, quality, value or enjoyment of
demised premises.
o Eg, pay rent, repair, not assign/sublet, insure and options to renew Mercantile
Credits v Shell
 Options to purchase don’t Re Albernale
 Advertising elsewhere eg.
Subleases


Tenant has privity of contract and estate with sub-tenant.
Landlord can end head-lease for sub-tenants breach of this.
Assignment of Reversion

When sold, all covenants that run with land remain.
o Right to sue (of tenant) remains s 117 PLA
o Right to be sued (of landlord) remains s 118 PLA
o Option to renew lease remains Muller v Trafford
Determination of Leases
Occurs by;
1.
2.
3.
4.
Time of lease passing
Notice
Surrender
Forfeiture
Forfeiture
 Breach of covenant by tenant leading to landlord terminating.
 Requires;
1. Express right to forfeiture in lease
Implied where (s 107(d) (can be excluded))
1. Rent in arrear 1 month
2. Covenant breached for 2 months
2. Tenant breach lease
3. Service of notice to tenant unless exception says don’t have to
i. Service requires (s 124 PLA), Ex Parte Taylor
1. What complained of
2. Requirement for remedy by lessee
3. Requirement for payments if relevant
ii. Tenant has reasonable time (14 days for rent, 3 months repairs) to respond
4. Breach must still be current at expiry of notice period
5. Landlord must effectively forfeit lease
i. Peaceful re-entry MacIntosh v Lobel
1. Possible under s 69 LTA
ii. Unequivocal demand Ex Parte Whelan
iii. Court action for possession Moore v Ulcoats
6. Tenant must not be granted relief against forfeiture under s 124(2)
i. Discretion in equity for court s 124(7)
1. Generally relief if non-payment of rent rectified Gill v Lewis
2. Consider conduct of tenant, gravity of breach, wilfulness of breach
re non-payment of rent Stieper v Deviot
3. Must have clean hands to come to equity Steipor v Deviot
Waiver
 Unequivocal act indicating lessor will not enforce legal right to forfeiture
 Lessee must establish;
o Lessor aware of breach of covenant
o Lessor did an unequivocal act recognising continuing existence of lease, eg accepting
subsequent rent.
 If waive right, and then other later breaches of (same or different) covenant, lessor still has
right to terminate s 119 PLA
Option to Renew/Purchase Leased Premises
 If tenant breach covenant, landlord has right to refuse renewal/sale within 14 days of
tenant’s ability to exercise their option – s 128(4) PLA
o Tenant can seek court’s relief within 1 month of landlord denying exercise of option.
Enforcement of Lease Obligations
Landlord’s Remedies
Where the tenant is in breach of covenant, a landlord can:
(1) Forfeit the lease;
a. Losses recoverable:
i. Rent owing to date
ii. Damages for breach of covenants
(2) Damages for breach of contract;
(3) Damages for repudiation or fundamental breach of the contract
a. Losses recoverable:
i. Rent owing to date;
ii. Damages for breach of covenants;
iii. Any actual or Prospective losses
1. E.g. finding a new tenant/loss of rent if at reducted rent
NB. Landlord has duty to mitigate losses Wood Factory v Kiritos
Repudiation
 Occurs when one party indicates unwillingness to not be bound by contract Shevill v
Builder’s Licensing Board
o Manifestation of unwillingness or inability to comply with obligations under lease,
does not need to be an essential term Wood Factory v Kiritos
o Consistent, deliberate breaches of fundamental term Shevill v Builders
o Culmination of many, non-repudiatory breaches Progressive Mailing v Tabali
 Landlord can either;
 Accept (terminate lease)
 Waive breach
 Seek damages for all losses, including prospective ones (unless fundamental
term breached)
 Forfeit lease and seek damages up until forfeiture
o Essentialness of term depends on construction of whole lease New Corp v Bank

Courts prefer to see payment of rent as non-essential if not expressly stated
Shevill v Builder’s Licensing Board
Retail Shop Leases
Step One: General Application of t he Act
S13
S 19
Applies to all ‘retail shop leases’
Cannot be contracted out of
Step Two: What is a retail shop lease?
S5:
Schedule
A retail shop lease is a lease of a ‘retail shop’ other than:
(a) a retail shop with a floor area of more than 1000m2 by a listed
corporation or a listed corporation’s subsidiary;
(b) a retail shop within the South Bank corporation area if the lease is a
perpetual lease… of at least 100 years
(c) Premises in a theme or amusement park;
(d) Premises at a flea market, including an arts and craft market; or
(e) A temporary retail stall at –
a. An agricultural or trade show; or
b. A carnival, festival or cultural event
Step Three: What is a retail shop?
S5:
schedule
A retail shop is any premises in a ‘retail shopping centre’ or any premises not
in a shopping centre but used for purposes of a ‘retail business’.
Step Four: What is a ‘retail shopping centre’?
S8
A ‘retail shopping centre’ is a cluster of shops where:
(a) 5 of more are used for retail business;
(b) the premises are owned by one person or comprise lots within a
single community titles scheme;
(c) all the premises are located in 1 building, or 2 or more if separated
by common areas or a road
(d) the premises are promoted as a shopping centre
Step Five: What is a ‘retail business’?
S5:
schedule
A business prescribed by regulation as a retail business (i.e. business whose
whole or predominant activity is a combination of the sale, hire or supply of
goods or services mentioned in the schedule to the RSLR
Note: ‘lease’ is used broadly, to include all forms of interest giving a right to occupy premises even if
non-exclusive: s5 schedule.
S19
Where the act applies, the parties cannot contract out of minimum lease
conditions
Rent based on turnover – ss25-26
S9
S25
Turnover is the gross sales of a business for any particular period
If rent is based on percentage of turnover, the lease must specify the formula
to be used
S26
Lessor not to disclose turnover information
Rent Review ss27-36
Connor Hunter (a firm) v Keencrest Pty Ltd had allowed ratchet clauses, now not allowed due to
s 36A.
S27(2)
S27(4)
The rent may not be reviewed more than once in any year (except first year)
Only one basis of method per rent review is permitted, although different
bases can be used throughout the lease
S27(5)
S27(5)(g)
S27(8)
S27(10)
S27(11)
S28
S36
Bases for which a rent review can be reviewed
Can combine multiple bases to make one
Allows lessors and major tenants (lessee of 5 of more shops) to contract out of
provisions in s27
Rent increases can be capped
Invalid review of rent (i.e. more than one review of lease in a year; review
using more than 1 basis or those set out in s36
If basis of rent review is current market rent and parties cannot agree on what
it is, the rent will be determined by a special retail valuer
Certain rent review provisions of leases void if:….
(d) Reserves to a party a discretion to apply 1 or 2 or more methods of
calculating the rent of the leased shop on a particular review of the
rent;
(e) Provides for rent of the leased shop to change on a particular
review of the rent in accordance with whichever of 2 or more
methods of calculating the change would result in the higher or
highest rent
Payment of Lessor’s Outgoings ss37-38
S7
S37(2)
S37(3)
S38(2)
Outgoings are the lessor’s reasonable expenses in relation to operating,
maintaining or repairing the shopping centre, and charges, rates, taxes payable
by the lessor as the owner of the centre
(a) If the lessee is required to pay all/part of lessor’s outgoings the lease
must specify the outgoings payable, how they will be determined and
apportioned to the lessee, and how the outgoings may be recovered by
the lessor from the lessee
(b) The lessor must give to the lessee an annual estimate in the approved
form of the outgoings at least 1 month before the start of the period to
which the estimate relates
The outgoings shown in the estimate must be itemised so that the amount
shown for each item is not more than 5% of the total outgoings shown in the
estimate or statement (unless relating to a charge, levy, rate or tax – s37(3)
The proportion of a lessor’s apportionable outgoings … payable by a lessee
must not be more than the proportion that the area of a lessee’s leased shop
bears to the total area of all premises in the centre/building …
Payment of key money and amount for goodwill prohibited
If a logical connection with the lease granting, then counts potentially as key money Ocean Square v
Duranzo
S5:
schedule
Key money means an amount to be paid to, or at the direction of, a lessor by
way of a premium, non-repayable bond or otherwise, for the granting,
renewing or assigning of a lease, or any benefit to be conferred on, or at the
direction of a lessor for the granting, renewing or assigning of a lease.
S39(1)
S39(2)
Payment of key money/goodwill must not be sought/accepted by the lessor,
and can be recovered as a debt (39(3))
Exceptions:
(a) Can recover lessor’s costs incurred in investigating proposed assigned
(b) Recover expenses incidental to assignment
(c) Receiving payment of rent in advance if the amount paid is not more
than the rent payable for 1 rental period under the lease;
(d) Getting a repayable bond;
(e) …
(f) receiving payments from the lessee for amounts spent fitting out the
leased shop;
(g) ….
Option to Renew s46
S46
S46AA
S46AA(4)
S46(5)
If the lease contains an option to renew, then the lessor must give notice of
the option date in the lease at least 2 months but not longer than 6 months
prior to the date by which the lessee must exercise the option
If a lease does not contain an option to renew, then the lessor must either
notify the tenant as to whether the lessor intends offering a new lease, and if
so on what terms within the notice period.
This notice period is 6 months prior to the end of the lease in the case of a
lease for more than a year; and 3 months for a lease less than a year. The offer
cannot be revoked until one month after it is made.
If the lessor does not give notice in the notice period, then the lease is
extended until 6 months after the lessor gives the notice (the extended
period).
However, this only applies if the lessee, by written notice, given to the lessor
before the lease would expire, asks for extension.
The lessee may terminate the lease before the extended period ends by giving
at least 1 months written notice of termination
Right to Compensation ss42-44
S42
S43
Retail shop lease includes these sections (not if periodic tenancy, or tenancy at
will)
(1) When compensation is payable by the lessor
(a) substantially restricts the lessee’s access to the leased shop;
(b) takes action that substantially restricts access by
customers/flow of potential customers;
(c) causes significant disruption to the lessee’s trading in the
leased shop/does not take reasonable steps to prevent/stop
significant disruption within the lessor’s control
(d) does not have rectified as soon as is practicable any
breakdown of plant/equipment under the lessor’s care or
maintenance, or any defect in the centre;
(e) neglects to clean, maintain or repaint the centre;
(f) causes the lessee to vacate the leased shop before the end of
the lease or renewal of it because of
extension/refurbishment/demolition
(2) Where the lessor has made false or misleading statements
S43A
S44
When compensation is payable by other parties
(1) If parties cannot agree on amount of compensation, it is to be decided by
way of dispute resolution.
(2) An agreement under the lease about compensation payable is void to the
extent it limits the amount
Lease Documentation and Disclosure Statement: ss22-23
S22(1)
S22(3)
S22(4)
S22(8)
S22A
S22D
S22C
S23
S22B
S50A
A draft lease and a disclosure statement must be provided to the tenant at
least 7 days prior to the tenant enters into a retail shop lease (this can be
waived if a major lessee – lease of 5 or more shops – s22(6))
Lessee may terminate the lease by giving written notice to the lessor within 6
months after entering into the lease
The lessor is liable to pay to the lessee the reasonable compensation decided
by way of dispute resolution process for loss or damage suffered because of
noncompliance/defective statement
Defective statement means a statement that is incomplete or contains
information that is false or misleading in a material particular.
Before entering into a lease, the prospective lessee must give the lessor a
disclosure statement
A prospective lessee, who is not a major lessee must give the lessor a financial
advice report and a legal advice report
Lessor’s and prospective assignee’s disclosure obligations to each other
Lessor is obliged to give lessee a certified copy of the signed lease within 30
days after it is signed
Assignor’s and prospective assignee’s disclosure obligations to each other
An assignor is released from ongoing liability under the lease from assignment
if each of the lessor, assignee and assignor have complied with their disclosure
obligations under s22B and s22C
Payment of lessor’s legal expenses
S24
Lessee’s obligations to make particular payments (can only have the following):
(a) rent
(b) If specified in the lease: lessor’s outgoings/damages for breach of a
S48
term/indemnity given by lessee to lessor/interest on arrears of
rent/outgoings
(c) Lessor’s reasonable legal or other expenses incurred in responding to a
request by the lessee for a variation of the lease/consent to the lessee
entering into a sublease/licence with another person
Lessee’s liability for costs associated with preparation etc, of lease (cannot be
liable for legal costs in relation to preparing, renewing or extending the lease,
submitting the lease for reassessment under the duties act)