LAND COURT OF QUEENSLAND
CITATION:
Sorrento Medical Service Pty Ltd v Department of Main
Roads [2005] QLC 0033
PARTIES:
Sorrento Medical Service Pty Ltd
(claimant)
v.
Chief Executive, Department of Main Roads
(respondent)
FILE NO:
A2002/0848
DIVISION:
Land Court of Queensland
PROCEEDING:
Claim for compensation payable consequent upon the
resumption of land for road purposes under the Acquisition
of Land Act 1967, the Transport Infrastructure Act 1994
and the Transport Planning and Coordination Act 1994
DELIVERED ON:
22 June 2005
DELIVERED AT:
Brisbane
HEARD AT:
Brisbane
MEMBER:
Mr JJ Trickett, President
ORDER:
The Land Court has no jurisdiction to hear and
determine this claim.
CATCHWORDS:
Practice and Procedure - Jurisdiction - Whether claimant
has estate or interest in resumed land - Whether lease or
mere licence granted - Need to establish exclusive
possession for lease
APPEARANCES:
Mr C Carrigan for the claimant
Mr RS Jones for the respondent
SOLICITORS:
Short Punch & Greatorix for the claimant
Crown Solicitor, Crown Law, for the respondent
[1]
This is a claim for compensation by Sorrento Medical Service Pty Ltd ("Sorrento") as
lessee of part of a building on land situated in Bundall Road on the Gold Coast,
consequent upon the resumption of part of that land for road widening purposes by the
Chief Executive, Department of Main Roads ("the respondent").
The Resumption
[2]
A Notice of Intention to Resume dated 18 April 2000 was served on the claimant giving
notice that the respondent intended to take an area of 167 m² from land described as Lot
49 on RP 118683, Parish of Nerang, County of Ward, for the purpose of transport, in
particular road purposes (Southport-Burleigh Road). Then on 13 October 2000, the land
was formally taken for road purposes by a proclamation published in the Government
Gazette of that date.
The Claim for Compensation
[3]
A claim for compensation for $132,000 dated 25 November 2002 was served by Sorrento
on the respondent. Then by way of an amended originating application dated 21 June
2004, Sorrento sought leave to amend the claim to $296,763.
[4]
Compensation for the compulsory acquisition of land is assessed under s.20 of the Act,
which provides:
"
Assessment of Compensation
(1)
In assessing the compensation to be paid, regard shall in every case be had not
only to the value of land taken but also to the damage (if any) caused by either or both of
the following, namely—
(a) the severing of the land taken from other land of the claimant;
(b) the exercise of any statutory powers by the constructing authority otherwise
injuriously affecting such other land.
(2)
Compensation shall be assessed according to the value of the estate or interest of
the claimant in the land taken on the date when it was taken.
(3)
In assessing the compensation to be paid, there shall be taken into consideration,
by way of set-off or abatement, any enhancement of the value of the interest of the
claimant in any land adjoining the land adjoining the land taken or severed therefrom by
the carrying out of the works or purpose for which the land is taken.
(4)
But in no case shall subsection (3) operate so as to require any payment to be made
by the claimant in consideration of such enhancement of value."
[5]
Under s.12(5) of the Act, on and from the date of publication of the Gazette resumption
notice, the land was vested in the respondent and the estate and interest of every person
entitled to the whole or any part of the land was converted into a right to claim
compensation under the Act.
[6]
In this case, a threshold issue has arisen as to whether Sorrento has any estate or interest
in the land that was taken.
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[7]
Malchada Pty Ltd ("Malchada") is the registered proprietor of Lot 49 on RP 118683,
which is situated on the corner of Allawah Street and Bundall Road, Sorrento. The street
address of that land is 1 Allawah Street, Sorrento. The resumption was part of the
widening of Bundall Road and for that purpose a strip of land of 167 m² was resumed
along the Bundall Road frontage.
[8]
On 22 January 1982, the Gold Coast City Council had approved an application to use a
building on Lot 49 as a 24-hour medical centre subject to conditions, one of which
provided as follows:
"(11)
Provision of at least ten (10) off-street car parking spaces and access thereto to
be constructed in accordance with Paragraphs 40 and 42, Part VII of the Town Planning
Scheme and to the reasonable satisfaction of the Chief Inspector. The two car spaces
with access to Bundall Road are to be used only for long term medical practitioner
parking."
[9]
Sorrento operates a medical centre at 1 Allawah Street, Sorrento, having leased part of the
ground floor of the building which is situated on Lot 49. The lease commenced on 1 July
1993, terminating on 30 June 1998. A five-year option to renew was exercised by
Sorrento in June 1998 and continued in existence at the date of resumption.
[10]
Adjoining this leased area on Lot 49, to the south and partly to the east of the building, is
a car park servicing the medical centre. The car park is not stated to be part of the leased
area, nor is there a separate lease over the car park; rather, two clauses in the principal
lease for the building between Sorrento and Malchada provides for the right to use some
10 car parks by Sorrento. Two of such parks are nominated for the exclusive use of
doctors' parking for the practice. The remaining eight can be used on a non-exclusive
basis by patients of the practice. Those two clauses provide:
"42. THE Lessor grants to the Lessee exclusive rights to use the area marked as 'Doctor
Parking' on the plan annexed hereto for parking of the vehicles of the Lessee or its
permitted invitees.
43. THE Lessor grants to the Lessee in common with the Lessee and its invitees of the
area marked 'D' on the said plan the right to permit its patients and the patients of any
person associated with the Lessee the right to park its his her or their vehicles upon the
land marked 'Patient Parking'."
[11]
The resumption did not affect the building, but it did take part of the car park. The area of
the car park resumed comprised the Doctor Parking area and two to three bays of the
Patient Parking area. It is claimed that the resumption has the effect of making the
medical centre unviable due to the reduction in the car parking available and noncompliance with the Council approval conditions.
[12]
Malchada, as the registered proprietor and lessor, has settled its claim for compensation
with the respondent. The present matter concerns the separate claim by Sorrento for loss
of its "interest" in the land taken.
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[13]
The threshold issue which has arisen is whether the rights Sorrento has in the resumed
area are sufficient in law to establish an estate or interest in the land as required by s.12(5)
of the Acquisition of Land Act 1967 to found a compensation claim.
The Relevant Parking Clauses
[14]
Clause 42 of the lease between Malchada and Sorrento grants to the lessee exclusive
rights to use the area marked as "Doctor Parking" on the plan annexed thereto for parking
of the vehicles of the lessee or its permitted invitees. Clause 43 grants to the lessee in
common with the lessee and its invitees the right to permit its patients and the patients of
any persons associated with the lessee, the right to park on the land marked "Patient
Parking".
[15]
Sorrento submits that Clause 42 gives an "estate or interest" in the "Doctor Parking" area
because:
[16]
(a)
the exclusive licence confers on Sorrento an interest in land as it is coupled with
a grant or interest;
(b)
further or alternatively, Sorrento is granted a right of legal exclusive possession
of the doctors' car park for a fixed or periodic term and, accordingly, is a lessee
of that area irrespective of the parties' subjective intention.
Sorrento further submits that as regards Clause 43, on the face of it, "exclusive
possession" is not granted; in that event it does not confer an estate or interest in the land.
However, Clause 43 does not stand alone. The lease is for the purpose of a medical
centre. The Council approval for the medical centre requires that it has 10 car parks. It
follows that the only body that could use the non-exclusive car parks would be the lessee
of the medical centre. On this basis, Sorrento, as lessee, would have exclusive possession
of the Clause 43 area.
The Legal Principles
[17]
The legal principles and considerations applicable in determining whether a relationship
created by a document is one of lessor and lessee, are comprehensively set out in the
decision of the New South Wales Court of Appeal in Lewis v Bell [1985] 1 NSWLR 731.
The principles outlined by the High Court in Radaich v Smith (1959) 101 CLR 209, are
considered and elaborated on in the New South Wales decision. The key principles in the
judgment of Mahoney JA (with whom the other members of the Court of Appeal agreed)
include:
(1)
The test is whether the grantee was given the right to exclusive possession of the
premises.
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(2)
Whether a particular document grants such a right to the grantee depends upon
the construction of the document. Regard is to be had in the normal process of
construction to all the terms of the document considered in their context.
(3)
In determining whether the grantee has been given the right of exclusive
possession, the Court must initially go to the terms of the grant. The grant of a
right of exclusive possession is prima facie sufficient, but the use in the
operative part of the document of such words as "lease" or "devise" will
ordinarily be understood to involve the grant of such a right. Conversely, if
what is granted is not exclusive possession, or if the words used are not
understood to convey the right of exclusive possession, then the transaction is
prima facie not one of lease. Thus, if what is granted is not a right to possession,
but the right to use the premises only for a defined and particular purpose, there
will prima facie be no lease.
(4)
There may be cases where it is not clear from the terms of the grant what is
being granted. In such cases it is necessary to determine what is granted by
looking at other aspects of the transaction; for example, the right to use the
premises either generally or in a particular way. In such cases the Court must,
by the process of construction, determine whether what is granted is mere
occupation or use, or is possession in the relevant sense.
(5)
In deciding whether what has been granted is the right to exclusive possession,
the Court, in the process of construction, has to look at both the nature of the
rights which have been granted and the intention of the parties.
It is proper to infer that the rights granted do not carry, by implication, the grant
of exclusive possession if the rights granted are inconsistent with the right of
exclusive possession; for example, if the right granted is not transferable or is
otherwise personal to the grantee, it will not be a leasehold interest.
(6)
It is necessary to infer the grant of exclusive possession if the rights granted can
be enjoyed only by one who has been granted exclusive possession. The grant
of exclusive possession has been inferred from the nature of what has been
expressly granted, for example, the lock-up milk bar in Radaich.
(7)
In the process of construction, an express statement of the parties' intentions as
to the nature of the relationship to be created, will be of substantial, though not
necessarily conclusive, importance; it will, in accordance with the rules of
construction, yield to the intention to be derived from the document as a whole.
(8)
Once the nature of the rights granted is finally determined, the classification of
the transaction, as a lease or licence, will depend on whether the rights are or are
not those of exclusive possession. It is in this sense that expressions of intention
are irrelevant. The parties cannot escape the legal consequences of one
relationship by professing it to be another.
Application of Principles to Car-parking Clauses
Clause 42
[18]
Clause 42 granting an exclusive right to Sorrento to use the area marked "Doctor Parking"
for car-parking purposes is a term contained in the agreement for lease document.
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However, the "Doctor Parking" area is not included in the area to be leased, that area is
stated to be part of the ground floor of the building.
[19]
If a clear leasing arrangement had been intended for this parking area, that could have
been clearly included in the demised area, along with the part of the building. Prima
facie, the term governing the car parking appears a complementary arrangement to the
lease, rather than an additional lease in its own right.
[20]
Clause 42 is headed "Exclusive Rights" and uses the words "exclusive right to use", rather
than "exclusive possession", to establish an interest in the car-parking area. Exclusive
possession would have to be established either by use of such term, or by necessary
implication, to be found in the lease document as a whole.
[21]
The inclusion of the word "exclusive" describing the permitted use does not in itself
connote a leasing arrangement, as a licence can also be exclusive.
[22]
The open area over which the car-parking rights are created is more akin to the horsestable arrangement held to be a licence in Lewis v Bell, rather than the lock-up kiosk
arrangement in Radaich v Smith, held to connote a leasing intent.
[23]
There is not a necessary implication from all the surrounding circumstances that Sorrento
should need to have exclusive possession to achieve the right for doctors to park
exclusively in the area. In my view, the right to exclusive use for such purpose, with
Malchada retaining rights to possession, would be sufficient to effect the desired
arrangement. However, it is not necessary that there be a specific term in the contractual
arrangement that Malchada retain possession of that area. It is necessary to look at all the
circumstances of the transaction.
[24]
It is not specifically stated that the rights in Clause 42 are personal to Sorrento and that
they could not be transferred. However, because of the local authority requirement that
the medical centre have 10 car parks attached to it, including the "Doctor Parking" area,
separate transfer of that area could not have been intended by the parties.
[25]
Given the above considerations, in my view, Clause 42 created merely an exclusive
licence to use, rather than a right to exclusive possession which, if established, would
connote a lease.
Clause 43
[26]
The Clause 43 rights also create a licence for the reasons which were applicable to Clause
42. However, there is an additional reason for this conclusion. The arrangement is nonexclusive. While it is acknowledged that the eight non-exclusive car parks relate to the
condition attached to the Gold Coast City Council planning approval, they do not have to
relate only to Sorrento's use of the centre. In fact, there was at least one other tenant
6
(Queensland Medical Laboratories) in the earlier period of the Sorrento lease, which
could also have been able to use the car park under the non-exclusive arrangement in
Clause 43. This circumstance further points to the conclusion that it was not intended by
the parties to the lease that exclusive possession be granted to Sorrento.
Conclusion
[27]
For these reasons, I have come to the conclusion that there was no lease created by either
Clause 42 or Clause 43 of the lease document between Malchada and Sorrento.
Therefore, Sorrento had no estate or interest in the car-parking area.
[28]
As Sorrento had no estate or interest in the resumed land, it has no valid claim for
compensation and this Court has no jurisdiction to proceed with the present claim.
Order
The Land Court has no jurisdiction to hear and determine this claim.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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