CITATION:
PARTIES:
Bailey Outdoor Advertising Pty Ltd v Brisbane City
Council [2006] QLC 0038
Bailey Outdoor Advertising Pty Ltd
(applicant) v.
FILE NO.:
DIVISION:
PROCEEDING:
DELIVERED ON:
DELIVERED AT:
HEARD AT:
MEMBER
ORDER:
CATCHWORDS:
APPEARANCES:
SOLICITORS
Brisbane City Council
(respondent)
A2005/0358
Land Court of Queensland
Claim for compensation payable consequent upon the resumption of land by the Brisbane City Council, under the provisions of the Acquisition of Land Act 1967 , for road purposes and for a purpose incidental to road purposes.
28 June 2006
Brisbane
Brisbane
Mrs CAC MacDonald
The Land Court has jurisdiction to hear and determine a claim for compensation for the resumption of the claimant's interest in the land.
Resumption – right to claim compensation – Acquisition of
Land Act 1967 – whether claimant has an estate or interest under s.12(5) – need to establish proprietary interest – contractual licence not sufficient – right of pre-emption not sufficient – equitable conditional lease of land sufficient.
Mr P Lyons QC for the applicant
Mr M Hinson SC for the respondent
Maunsell Pennington for the applicant
Brisbane City Council Legal Practice for the respondent

Background
[1] On 3 March 2000, the Brisbane City Council (the respondent) resumed part of the land located at 1 Musgrave Road, Kelvin Grove for road purposes. Relevantly, the land
[2] resumed was 50 square metres which was part of Lot 632 on S 3183. Prior to the resumption, Bartok Pty Ltd, was the registered proprietor of an estate in fee simple in the land as trustee for the LMRM Unit Trust.
On 27 June 2005, Bailey Outdoor Advertising Pty Ltd (the claimant) commenced
[3]
[4] proceedings in this Court seeking a determination of compensation under the Acquisition of Land Act 1967 (the Act) in respect of losses suffered by it as the result of the compulsory acquisition of the land by the respondent.
The claimant had entered into a written agreement (the licence agreement) with Bartok on
1 September 1999 under which the claimant was given certain rights in relation to the land for a term of 20 years, in consideration of the payment by the claimant of an annual fee, initially set at $17,000.
The rights granted to the claimant by the licence agreement included the right to erect a
[5]
[6] sign on the roof of the bottle shop then constructed on the land. Clause B of the licence agreement provided that:
"The Licensee has requested the Licensor to grant to the Licensee a licence to use part of the said land for the Licensee to erect and operate the Licensee's sign (as hereinafter defined) thereon (that part of the said land to which the Licensee has requested the
Licensor to grant a licence is hereinafter called "the premises" and is outlined in red on the plan in the Second Schedule hereto)."
The second schedule indicated that the proposed sign was to be a 12.6 x 3.3 metre supersite sign on the roof of the bottle shop. The sign was to be located on the front façade nearest to Kelvin Grove Road, commencing from the north eastern corner of the bottle shop.
The evidence given on behalf of the claimant was that approximately 1 metre of the sign was affected by the resumption, the result being, the claimant said, that it was not possible to utilise the remaining space for a supersite sign. The bottle shop was partially on the resumed land and, it was said, the bottle shop and the sign were demolished as a result of the resumption.
As at the date of resumption, s.12(5) of the Act provided that "the estate and interest of every person entitled to the whole or any part of the land" taken was converted into a right to claim compensation under the Act. This decision deals with a preliminary legal issue, namely whether the claimant held an estate or interest in the subject land within the meaning of s.12(5) as at the date of resumption.
2

The licence agreement
[7] Relevantly, the licence agreement provided that – cl 1.01 The licensor agreed to grant to the licensee "a licence to occupy and use the premises for the sole purpose of erecting the Licensee's sign thereon for advertising purposes …". cl 1.02 "The rights of the Licensee under this licence are contractual rights and will not create any tenancy, estate or interest in, or any right to exclusive possession or separate occupation or, [sic] any part of the land in favour of the
Licensee."
cl TERM : The licence granted to the Licensee hereunder shall be for a term of
TWENTY (20) years commencing on the day of the placement of the sign or
NINETY (90) days from the signing of this licence, whichever is the sooner." cl 4.01 The licensee and its employees, agents and contractors were given access across the licensor's land to the premises for the purpose of erecting, maintaining and repairing the sign or installing and maintaining any cl 6 advertising provided that the licensee etc were not to interfere with the conduct of any business carried on on the land.
The licensee was not to assign the licence without the prior consent in writing of the licensor, such consent not to be arbitrarily or unreasonably refused or withheld provided certain conditions were complied with. cl 6.02.1 Notwithstanding clause 6, the licensee was entitled to let space on the sign to any advertiser.
cl LEASE: The parties agree that if the Licensee can obtain the consent of the
Brisbane City Council and all the appropriate authorities to permit the
Licensor to grant a lease to the Licensee over the premises the Licensor will sign all appropriate documents to allow the Licensee to obtain such lease and the Licensee can terminate this licence by giving one months notice in writing to the Licensor. The parties shall enter into a lease over the premises on the same terms and conditions as herein contained with all appropriate amendments to make a valid and registrable lease for the balance of the term of this Licence from the date of termination pursuant to this clause."
cl SALE OF LAND: The Licensor covenants that if it sells, assigns or transfers the said land to another party it shall obtain a covenant from that other party whereby that other party agrees to be bound by the terms of this licence."
3

cl RIGHT OF FIRST REFUSAL : If at any time the Licensor subdivides the said land in such a manner that the premises constitute the whole of one lot in the subdivision then at any time thereafter during the course of this licence or any extension hereof the Licensor shall prior to executing any contract to sell the premises first offer the same to the Licensee on the same terms and conditions (including price) as the Licensor is prepared to bona fide sell the premises to a third party by giving notice to the Licensee of its intention to sell the premises together with the contract in duplicate containing the terms and conditions the Licensor is prepared to sell the premises as aforesaid. If the
Licensee does not execute and return to the Licensor the contract submitted to it as aforesaid within SEVEN (7) days of receipt of the said contract then the
Licensor shall be entitled to sell the premises to a third party on terms and conditions not more favourable than the terms and conditions submitted to the
Licensee as aforesaid. …" cl 18.01(a) The licensor was required to notify the licensee of the receipt of any notice from any local authority or other body which might adversely affect the licensor's occupation and use of the premises or the sign.
(b) The licensor was required to notify the local or other authority of the existence of the licence agreement and, if required by the licensee, to include in any claim for compensation by the licensor, claims for compensation by the licensee.
Counsels' submissions
[8] Senior Counsel for the claimant submitted that the claimant had a sufficient interest in the resumed land to enable it to claim compensation because –
•
Under the licence agreement the claimant had (at the least) a contractual licence to occupy and use part of the land for a period of 20 years. In addition it had a right of entry and conditional rights to lease and purchase that part of the land. These rights amounted to an estate or interest in the land within s.12(5) of the Act.
•
The broad definitions of "estate" and "interest" in the Acts Interpretation Act apply to the Acquisition of Land Act , there being no intention to the contrary in the latter
Act. The broad definitions are appropriate because –
(a) s.18(3) of the Act envisages that a licensee (not being a lessee or tenant) of land is entitled to compensation, except in certain circumstances;
(b) obligations and contracts to which a claimant's estate or interest is subject, are themselves regarded as estates or interests, for the purpose of making a claim.
•
The application of the Acts Interpretation Act definitions is consistent with modern statutory definitions in land acquisition legislation in other jurisdictions.
4

•
The statutory provisions should be read as providing just, indeed liberal compensation to those who lose rights as a result of the exercise of a compulsory power to resume property. The natural and ordinary meaning of the terms used in the definitions of "estate" and "interest" is to be given full effect, particularly when to do otherwise would limit or impair individual rights to compensation.
•
The definitions of "estate" or "interest" are broad enough to include the claimant's rights in relation to the resumed land.
•
Decisions on similar legislative provisions support this approach.
[9] Senior Counsel for the respondent submitted that the claimant did not have any estate or interest in the resumed land under s.12(5) of the Act, because –
•
The effect of clause 1.02 of the licence agreement was that the parties agreed that no proprietary rights were created, and that the rights of the licensee were contractual only.
•
Effect should be given to the parties' express statement of their intention unless the statement is a sham. There is no suggestion that the licence is a sham.
Nature of a compensable interest in the resumed land
[10]
[11]
Section 12(5) of the Act provides that
" 12.(5) On and from the date of the publication of the gazette resumption notice the land thereby taken shall be vested or become unallocated State land as provided by the foregoing provisions of this section absolutely freed and discharged from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest of what kind soever, or if an easement only is taken, such easement shall be vested in the constructing authority or, where the gazette resumption notice prescribes, in the corporation requiring the easement, and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act and every person whose estate and interest in the land is injuriously affected by the easement shall have a right to claim compensation under this Act."
The terms 'estate' and 'interest' are not defined in the Act, but there are definitions in s.36 of the Acts Interpretation Act 1954 . It is considered that those definitions are to be applied in the interpretation of s.12(5) of the Act, as there is no intention to the contrary to be found in the Acquisition of Land Act (see s.4, Acts Interpretation Act ).
[12] Section 36 of the Acts Interpretation Act provides that –
" "estate" includes easement, charge, right, title, claim, demand, lien and encumbrance, whether at law or in equity."
and
[13]
" "interest" , in relation to land or other property, means –
(a) a legal or equitable estate in the land or other property; or
(b) a right, power or privilege over, or in relation to, the land or other property."
Section 2 of the Acquisition of Land Act provides that
" "land" means land, or any estate or interest in land, that is held in fee simple, but does not include a freeholding lease under the Land Act 1994 ."
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[14] Senior Counsel for the claimant referred to a number of authorities from other jurisdictions where it was decided that the definitions of "estate" and/or "interest" in the relevant legislation were sufficiently broad to enable persons to claim compensation for compulsory acquisition where they had rights such as -
• a licence terminable at will ( Unimin Pty Ltd v Commonwealth (1974) 32 LGRA
342);
•
a statutory right granted by the Crown to enter land owned by a third party and remove minerals owned by the Crown ( Maddalozzo v Commonwealth (1979) 39
FLR 254; on appeal, Commonwealth v Maddalozzo (1980) 42 LGRA 168);
• a bare licence to use land ( Re Mills and Department of Administrative Services )
(1991) 23 ALD 765;
• a mere contractual licence ( West v Roads and Traffic Authority of New South
Wales (1995) 88 LGERA 266);
• a tenancy at will and a right to exclusive possession ( Mooliang v Shoalhaven City
Council (2001) 114 LGERA 45); and
[15]
• a statutory permissive occupancy ( Rakus v Energy Australia (2004) 138 LGERA
373).
Senior Counsel also referred to the decision of the Court of Appeal in New South Wales in Hornsby Council v Roads and Traffic Authority of NSW (1997) 41 NSWLR 151 where
Meagher JA, with whom the other members of the Court agreed, said (at 155) that the apparently wide scope of the definition of "interest" in land in s.4 of the Land Acquisition
(Just Terms Compensation) Act 1991 (NSW) should be limited to proprietary or quasiproprietary rights less than a fully-fledged estate. Senior Counsel sought to limit the application of that decision by reference to Minister for Education and Training v Tanner
[2003] 128 LGERA 281, Walker Corporation Pty Ltd v Sydney Harbour Foreshore
Authority (2004) 134 LGERA 195, on appeal Sydney Harbour Foreshore Authority v
Walker Corporation Pty Ltd (2005) 141 LGERA 243 and Jax Franchising Systems Pty
Ltd v State Rail Authority (New South Wales) [2003] NSWLEC 397.
[16] In [2006] QLAC 0016, the Land Appeal Court analysed the words "the estate and interest of every person entitled to the whole or any part of the land" in s.12(5) of the Act. The Court came to the conclusion (at LAC [37]) that the phrase "estate and interest" as used in s.12(5) refers to rights in land of a proprietary or quasi-proprietary nature. The decision in Sorrento was handed down after the hearing of argument on the preliminary legal point. At the hearing, it was agreed that the parties could approach the Court if they wished to make further
6

submission if the Land Appeal Court decision in Sorrento were handed down before this decision. No further submission has been made by either party.
[17] In it was held that the grant to the plaintiff of permission to remove sand from a river bed was an interest in the land in the nature of a profit à prendre. However, the judge also said (at 349) that even if the interest of the plaintiff were a licence terminable at will and no more, it was an interest in the land within the meaning of s.11 and s.5 of the
Lands Acquisition Act 1955 (Cth). In that Act "interest" in relation to land was defined in s.5 to mean "(a) a legal or equitable estate or interest in the land; or (b) a right, power or privilege over, or in connexion with, the land".
[18] In the question was whether the applicant held an interest in certain land which had been compulsorily acquired by the
Commonwealth. Section 6 of the Lands Acquisition Act 1989 (Cth) defined "interest in relation to land" as
"(a) any legal or equitable estate or interest in the land;
(b) a restriction on the use of the land, whether or not annexed to other land; and
(c) any other right (including a right under an option and a right of redemption), charge, power or privilege over or in connection with the land or an interest in the land; …"
The applicant, with the permission of his father, had conducted a business and constructed a number of buildings on land owned by his father prior to the resumption. The
[19]
Administrative Appeals Tribunal held that the applicant held a bare licence over the land unsupported by any contract and terminable at the will of his father. Because the licence was not legally enforceable, it did not create a right over the land. Nevertheless it was held that the licence was a privilege over the land. It was said that a privilege need not be enforceable in a Court. The licence was, therefore, held to be an interest in land within the meaning of s.6(c) of the Lands Acquisition Act 1989 .
In so far as it was held in Unimin and Mills that a licence terminable at will constituted an interest in land, the decisions are not consistent with the decision of the Land Appeal
Court in Sorrento because such a licence does not create a proprietary or quasiproprietary interest in land.
[20] In one issue was whether the appellant held an interest in land within the meaning of the same legislation as that considered in Unimin .
The appellant held two mining leases under the Mining Ordinance 1939 (NT) for a term of 21 years. The majority of the Full Court of the Federal Court said that whatever the juristic classification of the rights which the mining leases conferred they were within one or other of the paragraphs of the statutory definition in s.5. On appeal to the High Court,
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[21]
[22]
( Commonwealth v Maddalozzo ) it appears to have been conceded by Senior Counsel for the Commonwealth (at 177) that Mr Maddalozzo's statutory rights constituted a "right, power or privilege over or in connexion with the land" and, therefore, that they came within the statutory definition of "interest" in relation to land. None of the judges discussed in detail the nature of the interests created by the grant of the statutory leases.
Mason and Aickin JJ left open (at 172, 174) the question of whether the rights were interests within paragraph (a) or (b) of the definition in s.5 although Aickin J thought that the rights were within paragraph (b). Wilson J said (at 178)
"… that the holder of a mining lease enjoys the right to enter the land the subject of his lease and to dig for and extract the mineral. So stated, it would seem to be obvious that the existence of an "interest in land" such as that enjoyed by Mr Maddalozzo imposes a burden or restriction on the enjoyment of the fee simple."
…
The intent of s.10(4) of the Lands Acquisition Act is that "the legal estate in the land and all rights and powers incident to that legal estate … are vested in the Commonwealth".
Assuming … that the Commonwealth by its notice of acquisition acquired only the fee simple estate in the land then it would nevertheless seem to follow from s.10(4) that it acquired that estate freed from the restrictions to which it had hitherto been subject by reason of Mr Maddalozzo's mining leases. If this is so, then the latter's interests under those leases are converted into a right to compensation by virtue of s.11(1)."
I consider that the analysis of Wilson J is premised on the concession that Mr
Maddalozzo's rights constituted an interest in land. The limited description in the judgments of the statutory mining rights held by Mr Maddalozzo indicates that they may well have been statutory proprietary rights. In the absence of any discussion as to the criteria for identifying an interest in land, I do not consider that Wilson J's remarks are of assistance in determining the issue in this case, that is whether the claimant's rights constituted an estate or interest in the resumed land within the meaning of s.12(5) of the
Act. The conclusions of both the Full Court of the Federal Court and the High Court are not inconsistent with those of the Land Appeal Court in Sorrento .
The decisions in West , Mooliang , Rakus , Tanner , Hornsby and Sydney Harbour
Foreshore Authority were considered by the Land Appeal Court in Sorrento and it is unnecessary to add to that discussion. That Court's conclusion (at [35]) was that -
"In West , Mooliang and Rakus it was held that contractual licences were compensable because they created rights to occupy and privileges over the land. We consider that a mere right to occupy land and its concomitant privileges, with nothing more, is a contractual licence. … We prefer the reasoning of the New South Wales Court of Appeal in Hornsby that is, that the right, power and privilege referred to in paragraph (b) of the definition [of "interest"] should be limited to rights, powers and privileges of a proprietary or quasi-proprietary nature."
The Court also said at [61] that the decisions in Hudsons and Sons Pty Ltd v
Commissioner of Main Roads (1982) 8 QLCR 150 and Sydney Harbour Foreshore
Authority v Walker Corporation Pty Ltd (2005) 141 LGERA 243 were concerned with
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[23] principles associated with the assessment of compensation and were not of assistance in determining whether the claimant held an estate or interest in the land within the meaning of s.12(5) of the Act.
Since I am bound by the decision of the Land Appeal Court in Sorrento the decisions cited in this matter are to be read in the light of the Court's reasoning and decision in
Sorrento . It follows that I consider that if the claimant is to succeed in this matter it must be established that it had rights of a proprietary or quasi-proprietary nature in the resumed land as at the date the land was taken.
The claimant's interest in the resumed land
[24] Senior Counsel for the claimant submitted that the claimant had (at the least) a contractual licence to occupy and use part of the land for a period of 20 years. In addition it had a
[25]
[26] right of entry and conditional rights to lease and purchase the land.
It is convenient to consider each of those rights separately as different issues arise as to the nature of the rights granted.
Clause 1.02 of the licence agreement provided that -
"The rights of the Licensee under this licence are contractual rights and will not create any tenancy, estate or interest in, or any right to exclusive possession or separate occupation o[f] any part of the land in favour of the Licensee."
The clause indicates that it was the intention of the parties that the agreement was to create contractual rights only and that the licensee was not to be granted any estate or interest in the land. If, consistently with clause 1.02, the effect of the agreement is that it created contractual rights only, such rights would not constitute an estate or interest in the resumed land within the meaning of s.12(5) of the Act, and the claimant would have no right to claim compensation under the Act.
The right to occupy and use part of the land
[27] The agreement pursuant to which the claimant was granted rights to use and occupy part of the premises is described as a licence agreement. The language used throughout the
[28] agreement is appropriate to the creation of a licence and the parties are described as the licensor and the licensee. The primary right granted to the claimant by the agreement was
"a licence to occupy and use the premises for the sole purpose of erecting the licensee's sign thereon for advertising purposes …" (clause 1.01).
There was no submission that the licence agreement created a leasehold interest in the land. However, the authorities indicate that an agreement of this type should be examined to determine the nature of the rights granted. If the effect of the agreement is to grant a right to exclusive possession of the land, a lease is created even though the parties may
9

[29] have expressly declared that the document is a licence, or that it creates contractual rights only ( Radaich v Smith (1959) 101 CLR 209; Street v Mountford [1985] AC 809).
To determine whether there has been a grant of a right to exclusive possession of the premises, the document must be construed in the context of the surrounding circumstances, and taking into account the nature of the premises ( Radaich v Smith at
215, 217, 221–223).
[30] In (1969) 43 ALJR 69 the owner of land had "leased" to the appellant the roof, parapets and parts of the exterior walls of a building for the purpose of erecting electric signs thereon. It was held that the agreement was a lease and therefore that the appellant held an estate or interest in the land. However the terms of the agreement in that case were very different from those in
[31]
[32]
[33]
[34] the present case and I consider that, on its proper construction, the licence agreement did not grant exclusive possession of the premises to the claimant. There are a number of reasons for this conclusion.
First, although the words used in the agreement are not decisive, it is important to take into account the fact that the parties described the agreement as a licence agreement and expressly provided in clause 1.02 that it did not create any tenancy, estate or interest in, or any right to exclusive possession of any part of the land in favour of the licensee ( Chaka
Holdings Pty Ltd v Sunsim Pty Ltd (1987) NSW ConvR 55-367 at 57,299).
In addition, when construed as a whole, the agreement does not indicate that the claimant was granted rights to exclusive possession of the premises. A grant of a right to exclusive possession means that the grantee is given a general right to exclude others, including the grantor, from the premises ( Lewis v Bell at 736). Clause 1.01 provided that the licence was to occupy and use the premises for one purpose only, the construction and display of the advertising sign. There was no grant of a general right to use the premises. Although the erection of the sign on the roof meant that, while it was in place, no other sign could be placed in the same space, it is not considered that this amounted to exclusive possession in the sense necessary for a lease (see Claude Neon at 71, per Windeyer J).
Similarly, there was no reference to the recovery of possession of the premises by the grantor either on default by the licensee or at the expiry of the licence. Since there was no grant of possession it was, presumably, considered that it was not necessary to provide for recovery of possession.
It is also clear from the licence agreement that the parties had turned their attention to the question of whether a lease or a licence would be created. Clause 9.02 provided that if the claimant could obtain the necessary consents to the grant of a lease, the licensor
10

[35] would sign all the appropriate documents to enable the claimant to obtain such a lease.
Until such time as the necessary consents were obtained, and because, no doubt, the parties were mindful of their legal obligations, it was clearly their intention that no lease be created (see Chaka Holdings v Sunsim ). In my opinion, effect should be given to that intention (see the discussion in Lewis v Bell at 736, 737 as to the relevance of intention in construing an agreement of this nature).
I have come to the conclusion, therefore, that the grant of the right to occupy and use part of the land for a term of 20 years did not amount to a grant of a leasehold interest in the land. Those rights were contractual only and did not constitute an estate or interest in the land within the meaning of s.12(5) of the Act.
Other rights
Right of Entry
[36] Clause 4.01 of the licence agreement provided that the licensee was given access over the licensor's land for the purpose of erecting, maintaining and repairing the sign or installing
[37] and maintaining any advertising thereon.
I consider that the clause created contractual rights only as there is nothing to indicate that the rights are anything other than purely personal rights enforceable only by the parties to the contract. This is consistent with clause 1.02 of the agreement. The rights of access do not, therefore, constitute an estate or interest in the resumed land within the meaning of s.12(5) of the Act.
Conditional right to lease the land
[38] Clause 9.02 is set out in full above. Senior Counsel for the claimant submitted that the
[39] effect of the clause was to grant to the claimant a conditional right to lease the land.
The effect of the agreement is, I consider, that there is a binding contract in existence which makes the stipulated event - obtaining the necessary consents – a condition precedent to the duty of the parties to perform the obligation to enter into a lease (see
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 especially at 552). There is, therefore, an agreement to lease the land subject to a condition that the necessary consents be obtained. An agreement to grant an interest in land creates an equitable interest in the land provided specific performance of the agreement is available. Where however such an agreement is conditional, there is authority that specific performance of the obligation to convey the interest is not available until the condition has been fulfilled.
Therefore the grantee of the interest does not have an equitable interest in the land while the contract remains conditional ( McWilliam v McWilliam's Wines Pty Ltd (1964) 114
CLR 656; Brown v Heffer (1967) 116 CLR 344). However, in Re Henderson's Caveat
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[1998] 1 QdR 632, the Court of Appeal said (at 637, 638) that an equitable interest in land can arise when a claimant is entitled to something less than a full decree of specific performance ordering conveyance, provided a claimant is entitled to equitable relief by way of injunction or other remedy to maintain and protect its interest. Macrossan CJ and
Demack J referred to the decisions of the High Court in Chan v Cresdon Pty Ltd (1989)
168 CLR 242 and Stern v McArthur (1988) 165 CLR 498 to support their opinion that there is now an expanded view of what can constitute an equitable interest in the land (see also the judgment of Davies JA at 642, and Kuper v Keywest Constructions Pty Ltd
(1990) 3 WAR 419).
[40] Although and Kuper were concerned with the question of whether there was a caveatable interest in the land, it is considered that the reasoning in those cases is
[41]
[42]
[43] applicable in deciding whether the claimant has an estate or interest in the land under s.12(5) of the Act. I can see no reason why the "expanded view" of what can constitute an equitable interest in land should not be applied in determining whether a person has an estate or interest in land within the meaning of s.12(5).
I consider that the claimant in this case would be entitled to an injunction to restrain the owner of the land from dealing with the land inconsistently with the claimant's right to the grant of a lease on fulfilment of the requisite condition. The claimant therefore has an equitable interest in the land commensurate with its ability to obtain that equitable relief.
Although clause 1.02 provided that the licence agreement did not create any estate or interest in the land, I consider that it was not open to the parties to alter the legal effect of their agreement by describing it as a contract ( Radaich v Smith at 214, 217, 222). This conclusion is not altered by clause 18.01 which provided that if required by the licensee, the licensor would include a claim for compensation by the licensee in any claim made by the licensor.
It follows that the claimant's conditional lease constituted an interest in the resumed land within the meaning of s.12(5).
Conditional right to purchase part of the land
[44] The effect of clause 14.01 is that the claimant has a conditional right of first refusal over the premises that is, that part of the land which is the subject of the licence agreement.
The right is conditional on the licensor subdividing the land in such a manner that the premises constitute the whole of one lot in the subdivision. A right of first refusal or preemption means that the claimant's right to purchase the premises is contingent on the licensor deciding to sell that part of the land. It appears that a right of first refusal or preemption does not give rise to an equitable interest, at least during the period prior to the
12

[45] owner's decision to sell the land ( Mackay v Wilson (1947) 47 SR NSW 315 at 325;
Briggs v Pritchard [1980] Ch 328 (the decision is trenchantly criticised in Megarry &
Wade, The Law of Real Property (5 th
edn, 1984) at 605, 600)); Walker Corporation Pty
Ltd v WR Pateman Pty Ltd (1990) 20 NSWR 624; Beneficial Finance Corporation
Limited v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510)). It follows that, as at the date of resumption, the claimant's conditional right of first refusal did not give rise to an equitable interest in the land.
I do not consider therefore that the claimant's rights under clause 14.01 constitute an estate or interest in the land within the meaning of s.12(5).
Other Matters
[46] Senior Counsel for the claimant submitted that the Acquisition of Land Act suggests that a
[47]
[48] broad interpretation should be given to the definitions of "estate" and "interest" in the
Acts Interpretation Act because
• s.18(3) envisages that a licensee (not being a lessee or tenant) of land is entitled to compensation, except in certain circumstances;
• obligations and contracts to which a claimant's estate or interest is subject are themselves regarded as estates or interests, for the purpose of making a claim
(s.19(1)(c)).
The Land Appeal Court held in Sorrento (at [42]) that, when read in conjunction with s.12(5), the word licensee must be confined to cases where a licensee has a proprietary or quasi proprietary interest in the land such as when a licence is coupled with an interest.
Section 19(1)(c) provides that a claim for compensation shall be accompanied by a statement as to whether or not the claimant's estate or interest in the land taken is subject to any trust, obligation, mortgage, lease, agreement to lease, charge, rate, contract, claim or other estate or interest whatsoever and, if so, the nature and particulars of those of the aforesaid to which the estate or interest is subject. Some of the transactions listed in s.19(1)(c) give rise to an estate or interest in land e.g. mortgages, leases, charges etc. A contract does not, unless it concerns the sale or disposition of an interest in land. I do not consider that the phrase "or other estate or interest" as used at the end of the list in s.19(1)(c) has the effect of bringing personal obligations or contracts into the category of estates or interests in land.
Conclusion
[49] My conclusion is that for the purposes of s.12(5) of the Act the claimant held an equitable conditional lease over part of the resumed land which was an interest in the land within the meaning of that section. The effect of s.12(5) is that on and from the date of resumption that interest was converted into a right to claim compensation under the Act.
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Section 26(1) provides that this Court has jurisdiction to hear and determine that claim for compensation.
Order
The Land Court has jurisdiction to hear and determine a claim for compensation for the resumption of the claimant's interest in the land.
CAC MacDONALD
MEMBER OF THE LAND COURT
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