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  • Unreported Judgment

Hamilton v Armitage

 

[2006] QSC 189

Reported at [2007] 1 Qd R 425

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

DELIVERED ON:

4 August 2006

DELIVERED AT:

Brisbane

HEARING DATE:

4 May 2006

JUDGE:

Byrne J

ORDER:

 

CATCHWORDS:

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – RULES OF CONSTRUCTION – SUPPLYING, OMITTING AND SUBSTITUTING WORDS – where Act is intended to protect tenants – where literal construction could cause unintended mischief – whether provision should be given purposive construction

Acts Interpretation Act 1954, s 14A(1)

Retail Shop Leases Act 1994, s 7, s 38

A Raptis & Sons Holdings Pty Ltd v Commissioner of Stamp Duties (No 1) [1999] 1 Qd R 458 cited

Commonwealth of Australia v South East Queensland Aboriginal Corporation for Legal Services [2006] 1 Qd R 12 cited

Saraswati v The Queen (1991) 172 CLR 1 cited

COUNSEL:

L Alford for the plaintiff

G J Robinson for the first and second defendants

SOLICITORS:

None

[1] The plaintiff is the lessee of lot 1, Building Units Plan 8932, County of Stanley, Parish of North Brisbane. The defendants are registered as proprietors of that lot.

[2] Lot 1 and 44 other lots in BUP 8932 comprise a building. The lots other than lot 1 are owned by more than 30 others, none of whom owns more than four.

[3] Under the Body Corporate’s contribution schedule, as owners of lot 1, the defendants must pay 14.5% of the apportionable outgoings. By the terms of the lease, the plaintiff is obliged to pay the defendants the same 14.5% of outgoings. Lot 1, however, comprises only 7.3% of the total area occupied by all the lots in the building.

[4] Despite her promise in the lease to pay that 14.5%, the plaintiff contends that, by operation of s 38(2) of the Retail Shop Leases Act 1994 (“the Act”), she need not pay more than 7.3% of the outgoings: that is, the proportion that the area of lot 1 bears to that of all 45.

Section 38(2)

[5] Section 38(2) relevantly stipulates:

 

The proportion of a lessor’s apportionable outgoings[1] for a … leased building payable by a lessee … who is … sharing the benefit of the outgoing must not be more than the proportion that the area of the lessee’s … shop bears to the total area of all premises in the … building that are–

 

(a)leased to or occupied by lessees who … share the benefit resulting from the outgoing (whether or not they are lessees under retail shop leases); or

(b) available for lease to or occupation by lessees who would, if leased or occupied, … share the benefit resulting from the outgoing (whether or not they would be lessees under retail shop leases).”

The issue

[6] The essential facts are agreed. The only issue[2] is whether s 38(2) limits the plaintiff’s liability to 7.3% of the “outgoings”.

Problems with a literal interpretation

[7] Literally construed, s 38(2) has the effect for which the plaintiff contends: for the area of lot 1 represents only 7.3% of “the total area” of all lots in the building that are comprehended by the circumstances stated in sub-paragraphs (a) and (b). But such an interpretation yields results fundamentally at odds with the protection that s 38(2) is evidently intended to confer on tenants.

[8] Take this, by no means fanciful, illustration:

Assume a “leased building” comprises four lots, all the same size. Two are owned by A; two by B. Each has the same lot entitlement and, therefore, carries the same burden in respect of the outgoings payable to the body corporate. A leases both his lots. B leases one, withdrawing the other from the rental market.[3] Each of A’s two lots then represents one-third of the total area of all premises in the building that are “leased to or occupied by” or “available for lease to or occupation by” lessees.

[9] In those circumstances, literally construed, s 38(2) fixes one-third as the upper limit of the liability of each of A’s tenants for outgoings. So although A is liable to pay only half the apportionable outgoings of the body corporate, in aggregate, A can extract two-thirds of them from his lessees.

[10] That outcome scarcely accords with the objects of s 38(2), including, obviously enough, capping the tenant’s maximum exposure to preclude an economically dominant lessor from extracting more from the tenant for “outgoings” than the lessor is obliged to contribute to the body corporate.

[11] That kind of unintended mischief can be avoided by one or other of two interpretations of s 38.

[12] First, the section might apply only where one person owns all the lots in a “leased building”. The section would then operate sensibly, but in restricted circumstances. There is a slight textual indication that this was the only scenario the drafter envisaged: the mention of “a lessor’s” – singular – “apportionable outgoings” may be contrasted with the four plural references to “lessees” in sub-paragraphs (a) and (b).

[13] That approach, however, would leave tenants unprotected by s 38 where there was more than one landlord in the building; and, in this Act, that is an unlikely intention to attribute to the legislature.

An available purposive interpretation

[14] A second interpretation involves notionally inserting “owned by such lessor” after “bears to the total area of all premises in the … building” – an addition that produces a workable solution that also accords with the legislative intent evident in s 38.

[15] Section 14A(1) of the Acts Interpretation Act 1954 stipulates that:

 

In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.”[4]

[16] The construction of s 38(2) for which the defendants contend – notionally inserting “owned by such lessor” – best achieves the purpose of the Act.

Conclusion

[17] The plaintiff’s covenant under the lease for payment of outgoings is not inconsistent with s 38(2). Accordingly, her claim fails.

Disposition

[18] I will hear the parties with respect to the form of order and costs.

Footnotes

[1] By s 7(1) of the Act, “A lessor’s ‘outgoings’ for a … leased building are–

(a) the lessor’s reasonable expenses directly attributable to the operation, maintenance or repair of–

(i)   the centre or building; and

(ii) areas used in association with the centre or building; and

(b) charges, levies, premiums, rates or taxes payable by the lessor because the lessor is the owner or occupier of–

(i)  the centre or building; or

(ii) the land on which the centre or building is situated; and

(c) an amount mentioned in section 24A(2).”

[2] The case comes on reference from the Retail Shop Leases Tribunal under s 111(2) of the Act.

[3] As would happen were he to use the premises personally.

[4] Cf A Raptis & Sons Holdings Pty Ltd v Commissioner of Stamp Duties (No 1) [1999] 1 Qd R 458, 460-461; and Commonwealth of Australia v South East Queensland Aboriginal Corporation for Legal Services [2006] 1 Qd R 12, 20 [37]-[38], 22 [47] where Muir J refers with apparent approval to what McHugh J said in Saraswati v The Queen (1991) 172 CLR 1, 22:

“Moreover, once a court concludes that the literal or grammatical meaning of a provision does not conform to the legislative purpose as ascertained from the statute as a whole including the policy which may be discerned from its provisions, it is entitled to give effect to that purpose by addition to, omission from, or clarification of, the particular provision: …”

Close

Editorial Notes

  • Published Case Name:

    Hamilton v Armitage & Anor

  • Shortened Case Name:

    Hamilton v Armitage

  • Reported Citation:

    [2007] 1 Qd R 425

  • MNC:

    [2006] QSC 189

  • Court:

    QSC

  • Judge(s):

    Byrne J

  • Date:

    04 Aug 2006

Litigation History

Event Citation or File Date Notes
Primary Judgment [2007] 1 Qd R 425 04 Aug 2006 -

Appeal Status

No Status