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Mekpine Pty Ltd v Moreton Bay Regional Council

 

[2014] QCA 317

Reported at [2016] 1 Qd R 148

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

Mekpine Pty Ltd v Moreton Bay Regional Council [2014] QCA 317

PARTIES:

MEKPINE PTY LTD
(applicant)
v
MORETON BAY REGIONAL COUNCIL
(respondent)

FILE NO/S:

Appeal No 11770 of 2013

LAC No 9 of 2012

LAC No 10 of 2012

DIVISION:

Court of Appeal

PROCEEDING:

Appeal from the Land Appeal Court

ORIGINATING COURT:

Land Appeal Court at Brisbane

DELIVERED ON:

2 December 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

30 May 2014

JUDGES:

Margaret McMurdo P and Holmes and Morrison JJA

Separate reasons for judgment of each member of the Court, Margaret McMurdo P and Morrison JA concurring as to the orders made, Holmes JA dissenting

ORDERS:

  1. Application for leave to appeal granted.
  2. Appeal allowed with costs.
  3. The decision of the Land Appeal Court is set aside and instead it is ordered that the appeal is dismissed and the matter remitted to the Land Court for the determination of the claim for compensation by Mekpine Pty Ltd.

CATCHWORDS:

Real property Crown lands Queensland Administration Appeal from the Land Appeal Court – where the applicant entered into a 10 year lease of premises in a shopping centre – where the applicant’s lease was in relation to land registered as Lot 6 – where the shopping centre was extended over both Lot 6 and an adjacent lot, Lot 1 – where the registration of Lot 1 and Lot 6 were cancelled and the land was amalgamated into a new registered lot, Lot 1 – where the applicant's lease was endorsed on the registered survey plan of the new, amalgamated Lot 1 as an "Existing Lease Allocation" – where land on the new, amalgamated Lot 1 was resumed by the Council – where the resumed land was wholly outside the old Lot 6 – where the applicant applied for compensation for its interest in the resumed land under s 12(5) Acquisition of Land Act 1967 (Qld) – where the Council refused the applicant’s application – where the applicant applied to the Land Court to determine whether it had a compensable interest under s 12(5) – where the Land Court held that at the date of resumption, the applicant did have an estate or interest in the resumed land – where the Land Appeal Court overturned the finding of the Land Court – whether leave should be given to appeal against the decision of the Land Appeal Court – whether the Land Appeal Court erred in law in holding that the applicant did not have an estate or interest in the resumed land

Interpretation General rules of construction of instruments General matters – where the definition of “Common Areas” in the applicant’s lease is inconsistent with the definition of “common areas” in s 6 of the Retail Shop Leases Act 1994 (Qld) – whether the Retail Shop Leases Act amends the applicant's lease so that the definition of “common areas” under the lease is as defined in s 6 of the Retail Shop Leases Act

Acquisition of Land Act 1967 (Qld), s 12(5)

Acts Interpretation Act 1954 (Qld), s 36

Land Court Act 2000 (Qld), s 75(1)

Land Title Act 1994 (Qld), s 3, s 11, s 27, s 28, s 31, s 37, s 39, s 49, s 49A, s 50, s 52, s 64, s 174, s 175, s 181, s 182

Retail Shop Leases Act 1994 (Qld), s 3, s 4, s 6, s 7, s 8, s 9, s 12, s 13, s 18, s 19, s 20, s 40, s 43, s 47, s 48, s 49, s 50, s 50A

Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70, cited

Brown & Brown Ltd v Municipal Council of Sydney (1925) 4 LVR 27, cited

Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73; [1971] HCA 9, cited

Canada Steamship Lines Ltd v Toronto Terminals Railway [1930] 4 DLR 626, cited

Canadian Pacific Railway Co Ltd v Turta [1954] SCR 427, cited

City of Canada Bay Council v F & D Bonaccorso Pty Ltd (2007) 71 NSWLR 424; [2007] NSWCA 351, cited

Frazer v Walker [1967] 1 AC 569; [1966] UKPC 27, cited

Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74, distinguished

Koompahtoo Local Aboriginal Land Council v KLALC Property Investment Pty Ltd [2008] NSWCA 6, cited

Lensworth Finance Ltd v Commissioner of Main Roads (1978) 5 QLCR 261, cited

LGM Enterprises Pty Ltd v Brisbane City Council (2008) 165 LGERA 232; [2008] QLAC 214, considered

Medical Benefits Fund of Australia Limited v Fisher [1984] 1 Qd R 606, cited

Mekpine Pty Ltd & Anor v Moreton Bay Regional Council [2012] QLC 46, related

Moreton Bay Regional Council v Mekpine Pty Ltd & Anor [2013] QLAC 5, related

Peldan v Anderson (2006) 227 CLR 471; [2006] HCA 48, cited

Prince Alfred Park Reserve Trust v State Rail Authority of New South Wales (1997) 96 LGERA 75, cited

Quach v Marrickville Municipal Council (No 1) (1990) 22 NSWLR 55, cited

Rivers & Rivers v Minister of Education (1975) 12 SASR 321, cited

Robert Reid & Co v Minister for Public Works (1902) 2 SR (NSW) 405; [1902] NSWStRp 85, cited

Rosenbaum v Minister for Public Works (1965) 114 CLR 424; [1965] HCA 65, applied

S J R Investment Co Pty Ltd v Housing Commission of Victoria [1971] VR 211; [1971] VicRp 24, cited

Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd R 373; [2007] QCA 73, cited

COUNSEL:

G J Gibson for the applicant

A S Skoien for the respondent

SOLICITORS:

Hillhouse Burrough McKeown Solicitors for the applicant

Legal Services Department, Moreton Bay Regional Council for the respondent

  1. MARGARET McMURDO P:  The applicant, Mekpine Pty Ltd, has applied for leave to appeal under Div 5 Pt 4 Land Court Act 2000 (Qld) from a decision of the Land Appeal Court.  To succeed, it must demonstrate an arguable error of law in the judgment of the Land Appeal Court and provide reasons justifying the grant of leave to appeal.[1]  With the concurrence of the parties, in determining this issue this Court considered the parties' arguments as to the merits of the proposed appeal.

Background

  1. This case has had a long path to the Court of Appeal. In March 1999 the applicant entered into a 10 year lease of premises where it operated an IGA store in a shopping centre at the corner of Dohles Rocks Road and Ogg Road, Murrumba Downs.  The lease was in relation to land registered as Lot 6 on RP 809722[2] with the effect that the common areas under the lease were described by reference to and within the boundaries of Lot 6.
  1. The lease defined "Common Areas" as meaning "those areas of the Building or the Land which have not been leased or licensed by the Lessor".[3]  The lease also provided:

"Use of Common Areas

The Lessee and the Lessee's Employees may use the Common Areas but must obey all reasonable directions and rules given by the Lessor relating to their use.  The Lessee must not obstruct the Common Areas or Car Park."

  1. Under the lease the applicant acknowledged that the common areas were the property of the lessor and may be used, controlled, managed, altered, closed or dealt with as the lessor from time to time saw fit.[4]  The lease stated that it did not give the applicant by implication or otherwise any rights to the common areas or what is done or not done within them other than as specifically provided in the lease[5] and signage within the common areas was to be controlled by the lessor.[6]
  1. In 2004 the lessors purchased land adjacent to Lot 6.  This adjacent land was registered as Lot 1 on RP 847798.  The lessors obtained a development approval to extend their shopping centre over both Lot 6 and Lot 1, conditional upon the amalgamation of those lots.  On 27 September 2007 the registration of Lot 1 and Lot 6 was cancelled and the land was amalgamated into a new registered lot, Lot 1 on SP 184746.  The applicant's lease was endorsed on the registered survey plan of the new, amalgamated Lot 1 as an "EXISTING LEASE ALLOCATION".
  1. On 14 November 2008 the Council resumed 418 sq m of Lot 1 on SP 184746 for road purposes.[7]  The resumed land was a small strip of vacant land from the south-west corner of the new, amalgamated Lot 1 along the frontage of Dohles Rocks Road and Ogg Road and was entirely in the area included in the old Lot 1 and wholly outside the old Lot 6 to which the lease referred.
  1. The applicant applied for compensation for its interest in the resumed land under s 12(5) Acquisition of Land Act 1967 (Qld).  The Council contended the applicant did not have a compensable interest under s 12(5).  The applicant applied to the Land Court to determine this preliminary point.  The Land Court answered the preliminary question whether, at the date of resumption, the applicant had an estate or interest in the resumed land pursuant to the Acquisition of Land Act, "yes".[8]  The Council appealed to the Land Appeal Court which allowed the appeal and answered the question, "no".[9]

The proposed ground of appeal and reasons for granting leave

  1. If granted leave to appeal, the applicant's sole ground of appeal would be that the Land Appeal Court erred in law in holding that the applicant did not have an interest under the Acquisition of Land Act in the resumed land at the date of resumption.  It contended that leave to appeal should be given under s 75(1) Land Court Act as there is an arguable error of law and the case raises issues of general importance beyond the importance to the parties.  The Land Appeal Court's decision was inconsistent with an earlier judgment of the Land Appeal Court in LGM Enterprises Pty Ltd v Brisbane City Council[10] and this Court should provide clarification.  Further, the applicant contended, the present case raises important questions of law as to the inter-relationship between relevant provisions of the Retail Shop Leases Act 1994 (Qld) and the Acquisition of Land Act as well as to the effect of s 182 Land Title Act 1994 (Qld).
  1. This application does raise two questions of law. The first is whether s 182 Land Title Act conferred on the applicant a compensable interest in the resumed land consequent on the registration of the survey plan of the new, amalgamated Lot 1 on SP 184746 upon which the applicant's lease was noted as an "EXISTING LEASE ALLOCATION".  The second is whether the Retail Shop Leases Act amended the applicant's lease so that, following the registration of the new, amalgamated Lot 1 on SP 184746, the "Common Areas" under the applicant's lease accorded with the "common areas" as that term is defined in the Retail Shop Leases Act.  If either contention were correct, the applicant had a compensable interest in the resumed land.  I will deal with each contention in turn.

The effect of s 182 Land Title Act on the applicant's lease

  1. It is sensible to commence my discussion of the applicant's first contention with a review of the Land Appeal Court's reasoning and to then review relevant parts of the Land Title Act.

The Land Appeal Court's reasoning as to this contention

  1. The Land Appeal Court rejected the applicant's contention concerning s 182 Land Title Act which was not made to the Land Court but was raised in a notice of contention before the Land Appeal Court.  Upon registration of the new, amalgamated Lot 1 with the lease endorsed on it, reference in the lease to the old Lot 6 became a reference to the new, amalgamated Lot 1.  Although the resumed land was not part of the old Lot 6 with which the lease was concerned, following registration of the new, amalgamated Lot 1 with the lease endorsed on it, the lease related to part of the new, amalgamated Lot 1, not part of the old Lot 6.  It followed, the applicant contended, the common areas in the lease were determined by reference to the new, amalgamated Lot 1, not the old Lot 6 which no longer existed.
  1. The Land Appeal Court preferred the respondent's contention that the term "the instrument" in s 182 referred to the applicant's lease.  As that lease only conferred a leasehold interest over part of the new, amalgamated Lot 1 which was formerly part of the old Lot 6, the applicant did not have an interest in the resumed land.  The notation of the lease on the survey plan merely recorded that there was a registered lease in respect of the new, amalgamated Lot 1.  The Land Appeal Court found that whilst the applicant's interests under its lease were registered on the title to the new, amalgamated Lot 1, those interests were as set out under the terms of the lease, citing Barwick CJ's observations in Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd.[11]  The lease formed part of the register with respect to the new, amalgamated Lot 1 from the time the survey plan was lodged, in accordance with s 175 Land Title Act, but there was nothing in the registration process which changed the description of the land the subject of the lease.  It remained a lease in relation to that part of the new, amalgamated Lot 1 which was part of the old Lot 6, with the area of the lease clearly ascertainable by reference to the plan attached to the lease.  The applicant's rights as to common areas and car parks were identified in the lease by reference to the land within the old Lot 6 and did not extend to any part of the new, amalgamated Lot 1 beyond the old Lot 6.  The applicant did not have an estate or interest in the resumed land and had no right to compensation under s 12(5) Acquisition of Land Act.[12]

The relevant provisions in the Land Title Act

  1. In determining this challenging question of law, I have found it helpful to review aspects of the Land Title Act.  The objects of that Act include:

"to consolidate and reform the law about the registration of freehold land and interests in freehold land and, in particular –

(a)to define the rights of persons with an interest in registered freehold land;

… ."[13]

  1. Under Part 3 Div 1 the registrar must keep a register of freehold land[14] and must record in the register the particulars necessary to identify every lot brought under this Act[15] and every interest registered in the register,[16] including the name of the person who holds a registered interest,[17] and all instruments registered in the register and when they were lodged and registered.[18]  On registration of an instrument in the register, the instrument forms part of the register.[19]  Under Part 3 Div 2 an indefeasible title for a lot is created on the recording of the particulars of the lot in the freehold land register.[20]  The registrar may create a single indefeasible title for two or more lots that have the same registered owner.[21]
  1. Part 9 deals with Registration of instruments and its effect. The term "instrument" is defined as including

"(a)a deed of grant or certificate of title; and

  1. a will, grant of representation or exemplification of a will, that may be used to deal with a lot; and
  2. a deed that relates to or may be used to deal with a lot; and
  3. a power of attorney that may be used to deal with a lot; and
  4. a request, application or other document that deals with a lot and may be registered under this Act; and
  5. a map or plan of survey that may be lodged;
  6. another document that may be deposited; and
  7. an electronic conveyancing document."[22]
  1. A registered instrument forms part of the freehold land register when it is lodged.[23]  Part 9 Div 2 deals with Consequences of registration.  The critical provision for present purposes is s 182 which provides:

"182 Effect of registration on interest

On registration of an instrument that is expressed to transfer or create an interest in a lot, the interest—

(a)is transferred or created in accordance with the instrument; and

(b)is registered; and

(c)vests in the person identified in the instrument as the person entitled to the interest."

Conclusion on this contention

  1. It is true, as the Land Appeal Court identified and the respondent emphasised, that the applicant's lease was expressed as concerning land described as part of the old Lot 6.  The leased premises were depicted in an area marked with hatching in a schedule attached to the lease by reference to the old Lot 6.  It followed that under the lease the common areas and car park were identified as solely within the old Lot 6.[24]  The respondent contended that as, the applicant did not have an interest under the lease in the resumed land, s 182 did not transfer or create any interest under the lease upon registration of the new, amalgamated Lot 1, even with the lease noted on the survey plan.
  1. Although that argument has some attraction, I consider the applicant's contentions should be preferred. The old Lot 6 ceased to exist from 27 September 2007 when it was incorporated into the new, amalgamated Lot 1 upon the registration of the survey plan on which the applicant's lease was noted as an "EXISTING LEASE ALLOCATION".  While the term "instrument" is defined widely enough in the Act to include a lease, I consider the better view in applying s 182 to the present facts is that "instrument" refers to the survey plan amalgamating the old Lot 6 and the old Lot 1 into the new, amalgamated Lot 1, with the applicant's lease noted on it.  In my view, s 182 has the effect that the registration of this survey plan with the applicant's lease noted on it as an "EXISTING LEASE ALLOCATION" transferred or created a leasehold interest on the part of the applicant in the new, amalgamated Lot 1.  And as the old Lot 6 ceased to exist from 27 September 2007, the reference to "Land" in the definition in the lease of "Common Areas"[25] then became a reference to the land in the new, amalgamated Lot 1, not the old Lot 6.
  1. This construction is not inconsistent with either s 175 or with Barwick CJ's observations in Bursill Enterprises.  Nor is it inconsistent with the objective intention of the parties when they entered into the lease.  In describing the land on which the leased premises were located, it is clear the parties intended to give the land its registered description which, at that time, was part of the old Lot 6.  If the land were to be amalgamated with other land and re-registered, the parties intended that the leased premises would be described by reference to the registered description of any new, amalgamated lot on which its lease was endorsed.  This construction also sits comfortably with the objects and scheme of the Land Title Act and the principle of indefeasibility of title.
  1. The respondent contended that the lease was registered as an encumbrance over but not an interest in the resumed land. I do not accept that contention. One clear purpose of the registration of the amalgamated survey plan on which the lease was endorsed was to protect the applicant's leasehold interest in the registered new, amalgamated Lot 1 which included the resumed land.
  1. Even accepting that upon registration no new leasehold interest was created, under s 182 the registration of the survey plan transferred the applicant's leasehold interest over the old Lot 6 to the new, amalgamated Lot 1, with the effect that the reference to "Land" in the Lease's definition of "Common Areas" was to the new, amalgamated Lot 1.
  1. Although the Land Appeal Court's reasons and the respondent's contentions raise a persuasive contrary argument, I consider that at the date of resumption on 14 November 2008, the reference in the lease to "Land" in the definition of "Common Areas" was to the areas of land across the whole of the new, amalgamated Lot 1 "which have not been leased or licensed by the lessor."  From the registration of the survey plan endorsed with the applicant's lease on 27 September 2007, the "Common Areas" under the lease were no longer identified by reference to the land in the old Lot 6 but by reference to the land in the new, amalgamated Lot 1.  It follows that, consistent with the unchallenged factual findings of the Land Court, the resumed land was part of the "Common Areas" under the applicant's lease.[26]  The Land Appeal Court erred in law in allowing the appeal from the Land Court and in holding that the applicant did not have an interest under s 12(5) Acquisition of Land Act in the resumed land at the date of resumption.  This error of law is a question of importance, not merely to the parties, but more generally.  It warrants the grant of leave to appeal and the allowing of this appeal.

Does the Retail Shop Leases Act amend the applicant's lease?

  1. Although my conclusion on the first ground of appeal disposes of the appeal, it is desirable in this instance that I also deal with the applicant's second contention. In determining this equally challenging question of law, I have found it helpful to first review aspects of the Retail Shop Leases Act (the Act) and to then review the Land Appeal Court's reasons.

The relevant objects and scheme of the Act

  1. The objects of the Act are "to promote efficiency and equity in the conduct of certain retail businesses in Queensland"[27] and are to be achieved through ways including "mandatory minimum standards for retail shop leases".[28]
  1. Part 3 of the Act is headed "Interpretation". Under Div 1 standard definitions are included in the dictionary in the schedule.  Division 2 is headed "Extended definitions" and includes:

"6Meaning of common areas

(1)Common areas of a retail shopping centre are areas in or adjacent to the centre that are used or intended for use –

  1. by the public; or
  1. in common by the lessees of premises in the centre in relation to the conduct of businesses in premises in the centre.

(2)Common areas include –

(a)stairways, escalators and elevators; and

(b)malls and walkways; and

(c)parking areas; and

(d)toilets and restrooms; and

(e)gardens and fountains; and

(f)information, entertainment, community and leisure facilities.

(3)However, common areas do not include leased areas."

  1. Also included in the Extended definitions are the meanings of "outgoings";[29] "retail shopping centre"[30] and "turnover".[31]  The term "common areas" is used in the definition of "retail shopping centre"[32] which provides:

"(1)A retail shopping centre is a cluster of premises having all of the following attributes:

(a)5 or more of the premises are used wholly or predominantly for carrying on retail businesses;

(b)all the premises—

(i)are owned by the 1 person; or

(ii)have the 1 lessor or head lessor, or, if the premises were leased, would have the 1 lessor or head lessor; or

(iii)comprise lots within a single community titles scheme;

(c)all the premises are located in—

(i)1 building; or

(ii)2 or more buildings if—

(A)the buildings are adjoining; or

(B)if the premises are owned by the 1 person—the buildings are separated by common areas or other areas owned by the owner or a road; or

(C)if the premises are not owned by the 1 person—the buildings are separated by common areas or a road;

(d)the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court or shopping arcade."

  1. It is uncontentious that, for the purposes of the Act, the applicant's lease was a retail shop lease in a retail shopping centre. The term "common areas" is not used again in the Act.
  1. Part 4 of the Act deals with Operation of Act and former Act. The Act applies to all retail shop leases of premises in Queensland regardless of where the lease is entered into and even though the lease purports to be governed by a law other than Queensland law.[33]  It applies to all retail shop leases entered into or renewed before or after 20 October 1994.[34]  The following provisions in this Part are relevant:

"18Act’s provisions implied in leases

If, under this Act, a duty is imposed or an entitlement is conferred on a lessor or lessee under a retail shop lease, the duty or entitlement is taken to be included in the lease.

19Contracting out of Act prohibited

A provision of a retail shop lease is void if it purports to exclude the application of a provision of this Act that applies to the lease.

20Act prevails over inconsistent leases

If a provision of this Act is inconsistent with a provision of a retail shop lease, the provision of this Act prevails and the provision of the lease is void to the extent of the inconsistency."

  1. Part 6 deals with Minimum lease standards and includes divisions dealing with Turnover rent;[35] Confidentiality of turnover information;[36] Rent review for rent;[37] Lessor's outgoings and other payments;[38] Other payments for retail shops;[39] Lease dealings;[40] and Provisions about unconscionable conduct.[41]  Part 6 Div 7 deals with Implied provisions for compensation and includes s 43 which relevantly provides:

"43When compensation is payable by lessor

(1)The lessor is liable to pay to the lessee reasonable compensation for loss or damage suffered by the lessee because the lessor, or a person acting under the lessor’s authority—

(a)substantially restricts the lessee’s access to the leased shop; or

(b)takes action (other than action under a lawful requirement) that substantially restricts, or alters—

(i)access by customers to the leased shop; or

(ii)the flow of potential customers past the shop; or

(c)causes significant disruption to the lessee’s trading in the leased shop or does not take all reasonable steps to prevent or stop significant disruption within the lessor’s control; …"

  1. Part 6 Div 9 is headed "General" and deals with Relocating lessee's business;[42] Demolishing building in which lessee's business is situated;[43] and Other general provisions,[44] including Lessee's right to independent legal advice;[45] Lessee's liability for costs associated with preparation etc of lease;[46] Lessee's right to join or form commercial associations;[47] Retail tenancy disputes between lessors and lessees about assignments of leases;[48] and Release of assignor from lease.[49]  Part 7 deals with Retail shop lease trading hours; Part 8 with Retail tenancy dispute resolution and Part 9, Administration, deals with matters including Mediators;[50] Retail shop leases tribunals;[51] and Confidentiality, privilege and immunity.[52]

The Land Appeal Court's reasoning as to this contention

  1. The Land Appeal Court accepted the Land Court's conclusion that the resumed land formed part of the common areas as that expression is defined in the Act.[53]  The Land Court had found that the Act amended the applicant's lease by substituting the Act's definition of "common areas" in s 6 for the definition of "Common Areas" in the lease as the definitions were inconsistent and the definition in s 6 prevailed by virtue of ss 18 to 20 of the Act.
  1. The Land Appeal Court rejected that approach, following the principle identified in Gibb v Federal Commissioner of Taxation.[54]  It concluded that the s 6 definition of "common areas" did not have substantive operation.  The s 6 definition of "common areas" simply defined that term where it was used in the Act.  The fact that the definition of common areas in the Act was different to the definition of "Common Areas" in the lease[55] did not result in an inconsistency between the Act and the lease; ss 18 to 20 had no application.  The s 6 definition of "common areas" related to an element of the s 8 definition of retail shopping centre.  This made it even less likely that the legislature intended the definition of an expression which was an element of the definition of another expression in the Act to amend parties' rights and obligations under a lease, regardless of the content of those rights and obligations.  The Act did not contain provisions conferring rights or entitlements on lessees or obligations on lessors in respect of common areas under it.
  1. The Land Appeal Court noted that s 43 of the Act grants a lessee a right to damages if a lessor substantially restricts or alters access to the leased shop or the flow of customers past the shop.  That provision, neither expressly nor by implication, creates a right in relation to land.  It provides a remedy which cannot be modified by the provisions of the lease.[56]  In LGM Enterprises Pty Ltd v Brisbane City Council[57] a lessee was found to have a compensable interest under s 12(5) Acquisition of Land Act in walkways in a shopping centre external to the leased premises.  The Land Appeal Court in the present case noted that it was not clear whether the court in LGM considered that s 43 was sufficient to give a lessee in a retail shopping centre an interest in land beyond the leased area, adding that, if that were the finding, the Land Appeal Court in the present case would not be prepared to follow it.[58]

Conclusion on this contention

  1. It is clear from my summary of the scheme of the Act that its legislative intent includes ensuring retail shop lessees, whose bargaining position will often be weaker than their lessors', have the mandatory protections provided under the Act. There were significant differences between the definition of "Common Areas" in the lease[59] and the extended definition of "common areas" in the Act.  If the definition under the Act applied, the applicants would have a compensable interest in the resumed land under s 12(5) Acquisition of Land Act whereas it would not have such a compensable interest under the definition of "Common Areas" in the lease (assuming the applicant was unsuccessful on its first contention).
  1. A somewhat comparable situation arose in LGM Enterprises Pty Ltd v Brisbane City Council.[60]  The Land Court followed LGM in answering the preliminary question, "yes".  In LGM the lessee of a video store in a small suburban shopping centre claimed a compensable interest under s 12(5) Acquisition of Land Act for the loss of the use of walkways through a garden between the road and a paved area outside the store.  Following the land resumption and the construction of a steep bank, access across the walkways became impossible.  This detrimentally affected the video store business.  The Land Court at first instance found that the lessee had no compensable interest.  The Land Appeal Court[61] considered that the Act supplemented the terms of the lease.  The definition of "common areas" in s 6 (which included walkways within and around the shopping centre) applied, even though it differed from the defined common areas under the lease.  The lessee's statutory rights under the Act prevailed where there were inconsistencies between the Act and the lease.  Under s 43 of the Act, a lessor was obliged to pay reasonable compensation to a lessee in specified circumstances.  As I apprehend the Land Appeal Court's reasoning in LGM, s 18, s 20 and s 43, combined with the s 6 extended definition of common areas, showed a legislative intent that the s 6 definition of common areas should be implied into the lease.  Accordingly, the Land Appeal Court found that the Land Court erred in concluding that the walkways were not part of the common areas of the shopping centre.[62]  Applying Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads,[63] the Land Appeal Court in LGM concluded, by way of a combination of the terms of the relevant lease, the provisions of the Act and the uncontested evidence of the lessor's de facto recognition that the lessee's customers used parts of the garden as walkways, that the lessee had a compensable interest under s 12(5) Acquisition of Land Act.[64]
  1. The Land Appeal Court in the present case rejected that approach, relying on observations in Gibb v Federal Commissioner of Taxation.[65]  In that case, Barwick CJ, McTiernan and Taylor JJ noted that in construing a taxation statute, the definition of "dividend" did no more than define the meaning to be assigned to the word "dividend" as used in that Act.  Their Honours observed:

"The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense–or are to be taken to include certain things which, but for the definition, they would not include. Such clauses are, therefore, no more than an aid to the construction of the statute and do not operate in any other way. As was said by Sutherland (Statutes and Statutory Construction, 2nd ed., vol. 2, p. 687),

'Such definitions can, in the nature of things, have no effect except in the construction of the statutes themselves'.

Consequently the effect of the Act and its operation in relation to dividends as defined by the Act must, we think, be found in the substantive provisions of the Act which deal with 'dividends'."[66]

  1. While that is the general principle applicable to definitions in a statute, it is not an absolute rule and can be modified by a clear contrary legislative intent. In my opinion, the legislative intent in the Act was that the s 6 definition of "common areas" was to be incorporated into retail shop leases. This follows from the scheme of the Act; the inclusion of the definition of "common areas" in Div 2 Extended definitions rather than in the Standard definitions in s 5 and the Schedule dictionary; the object of the Act and how it is to be achieved; the intended wide application of the Act;[67] the implication of the Act's provisions in all retail shop leases;[68] the prohibition of contracting out of the Act;[69] and that the Act prevails in the event of an inconsistency with a lease.[70]  The definition of "common areas" under the Act is embedded in the legislation through its incorporation in the extended definition of the fundamental concept in the Act of "retail shopping centre".  The conclusion that the legislative intent was to replace any inconsistent definition of "common areas" in retail shop leases with the s 6 definition is consistent with the object of the Act to "promote … equity in the conduct of"[71] retail shop leases.
  1. The applicant contended, as the Land Appeal Court appears to have recognised in LGM, that provisions such as s 43 of the Act are also consistent with this conclusion.  I have difficulty accepting that contention.  Even if the definition of common areas in a lease differed from that in s 6, s 43 would still provide that a lessor who restricted customer access to the leased premises or disrupted trading would be liable to the lessee in damages.  On this issue I agree with the Land Appeal Court's observations in the present case, that if in LGM the Land Appeal Court found that s 43 alone was sufficient to give a lessee in a retail shopping centre an interest in land beyond the leased area, it should not be followed.[72]
  1. The respondent further submitted that, if the applicant's contention was accepted, an expanding retail shopping centre like the one in this case could expose lessees to more onerous outgoings for common areas. The Act, however, provides some protection to the lessee in respect of outgoings and other payments.[73]  In any case, as the applicant pointed out, in an expanding retail shopping centre either the number or the size of the new leases resulting from the expansion would be expected to increase so that any increase in outgoings for common areas would be shared proportionately, with the result that any increases would be contained.
  1. In my view the Land Court correctly concluded that the Act amended the lease so that the common areas under the lease was as defined in s 6 of the Act and that the resumed land formed part of the common areas of the shopping centre under the lease. Even if I am wrong as to the applicant's first contention, it follows that the applicant was entitled on this alternative basis to compensation for its interest in the resumed land under s 12(5) Acquisition of Land Act.  The Land Appeal Court erred in allowing the appeal and in answering the preliminary point as to whether, at the date of the resumption, the applicant had an estate or interest in the resumed land pursuant to the Acquisition of Land Act, "no".  This question of statutory construction is of sufficient general importance to warrant granting leave to appeal.  The appeal should be allowed on the basis of this contention.

ORDERS

  1. I consider that the applicant has demonstrated two errors of law on the part of the Land Appeal Court, either of which warrants the grant of leave to appeal and the allowing of the appeal with costs.  I propose the following orders:
  1. Application for leave to appeal granted.
  1. Appeal allowed with costs.
  1. The decision of the Land Appeal Court is set aside and instead it is ordered that the appeal is dismissed and the matter remitted to the Land Court for the determination of the claim for compensation by Mekpine Pty Ltd.
  1. HOLMES JA:  I have had the advantage of reading the President’s and Morrison JA’s judgments in draft form.  I gratefully adopt the President’s outline of the factual background to this appeal and the relevant legislation.  However, I have come to different conclusions as to the significance of both the registration of the survey plan creating Lot 1 and the Retail Shop Leases Act provisions in identifying the extent of the applicant’s interest.

Section 182 - Land Title Act 1994

  1. Section 64 of the Land Title Act permits part of a lot to be leased by registering an instrument of lease for the part, while s 65(2)(a) requires the inclusion in the instrument of a sketch plan identifying the relevant part of the lot.  That occurred in this case: the lease was registered in respect of part of the ground floor of the building on Lot 6.  The part leased was shown as a hatched block on Lot 6 in a sketch plan in a schedule to the lease.  The registered lease formed part of the freehold land register from the time when it was lodged,[74] the lease itself becoming part of the register.[75]  The lessee’s interest in the lease then vested.[76]
  1. Later, the plan of survey amalgamated two lots and on its registration created Lot 1.[77]  The applicant’s argument was that by virtue of s 182, registration of the plan of survey conferred on it an interest in the amalgamated Lot 1, because its lease was identified in the plan as encumbering the lot.  For a number of reasons, I do not think that is so.
  1. The principal reason for my conclusion that s 182 did not apply in the way suggested is that the provision deals with the effect of registration on an interest which the relevant instrument is “expressed to transfer or create”. The survey plan in this case was expressed to create Lot 1 from the existing Lots 6 and 1.  It was not expressed to create the lease interest – which had already been created by registration – but to encumber it on Lot 1.  Literally, then, s 182 did not apply to the lease interest so as to create or vest it; rather, the interest created for the purposes of s 182 was the registered owners’ interest in the amalgamated lot.
  1. Other provisions of the Land Title Act lend support to that conclusion.  Section 11 of the Act requires an instrument to create an interest in a lot to be executed by the person creating the interest and the person in whose favour the interest is to be created (or their lawyer).  The owners signed the survey plan; the lessees did not.  The fact that the survey plan was not executed in any way by the lessees, as s 11 of would require if an interest were to be created in the lot in their favour, suggests that no more occurred than the recording of an existing interest against the newly created title of the registered owners.
  1. Here I should say that I do not think Morrison JA’s assumption that the lessee consented to the survey plan is well-founded. The plan of subdivision was required to include a statement by the registered owners agreeing to the plan;[78] but it was not necessary (under s 50(1)(j)) that lessees consent unless their interests were affected by the plan.  In fact, the plan contained the registered owners’ agreement, but the words “[we] as lessees of this land agree to this plan” were struck through.
  1. The Land Title Act does not contain any explication of the circumstances in which interests are considered “affected”, but some illumination as to what occurred may be gained from the Registrar’s directions.  Section 10 of the Act requires an instrument to comply with the Registrar’s directions about how the appropriate form must be completed and how information is to be included in or given with the instrument.  Those directions can be included in the manual of land title practice for which s 9A provides.
  1. The Land Title Practice Manual (Qld) created pursuant to s 9A gives the following explanation of when “interests [are] affected by [a] plan” for the purposes of s 50(1)(j) of the Act:

“The term ‘affected’ in this context means, the spatial extent of a registered interest is intersected by the spatial extent of new road or a new lot (including a lot for public use) depicted on a plan.  The registered interest is partly or wholly extinguished to the extent intersected.”[79]

The Manual provides a table of circumstances in which the consent of a registered proprietor to a plan of subdivision under s 50(1)(j) is required.  In the case of a lease, it is not required where the plan depicts no public use land or new road.[80]  The Registrar’s definition of a statutory expression is not, of course, conclusive but it, with the associated direction in the table, explains why the survey plan did not include the consent of any lessee.

  1. Further understanding of the form of the survey plan can be obtained from the Registrar’s directions for the preparation of plans,[81] also given under s 10.  Those directions include a section dealing with “Allocations”,[82] in which this explanation is given:

“The allocation of Titles allows the land registry to relate the current title description with the new lot. It ensures that the new titles issue correctly in regards to ownership, encumbrances, administrative advices etc. Correct allocations are integral to a correct and complete land registry. The information required on a new title (or Grant, etc) is not brought forward automatically. The land registry creates new titles, and notes interests from the information shown in the allocation schedules on the reverse of the plan of survey.”[83]

The plan of survey is to show by schedule, inter alia,

“Interest allocations (which enable the preparation of endorsements on an indefeasible title to show the effect of a survey against the current registered interests).”[84]

  1. The Registrar’s direction 22.6.6.3 “Existing leases – part of a building (Land Title Act 1994) – not building format plan” applied here:

“Where an existing lease or leases are registered against part of a building, and the land on which that building is situated is being subdivided by either a standard format plan or a volumetric format plan an allocation of the lease or leases against the new lots is required.”

The direction then goes to set out the way in which the existing lease allocations are to be noted against the new lots; which is in the format adopted in this case.  The Registrar’s practice and directions, while again not resolving the question of law involved here, are at least consistent with the view that what occurred was not the creation of a new interest but its recording as an existing encumbrance against a new lot.

  1. As to other relevant provisions of the Land Title Act, it is worth noting that s 67 permits amendment of a registered lease by registering an instrument of amendment of the lease; but such an instrument of amendment “must not…increase or decrease the area leased”.  In light of that bar, it seems improbable that the Act contemplates the expansion of areas to which a lease relates simply by reason of the registration of the lessee’s interest against a different lot.
  1. Nothing in the Land Title Act suggests that registration of an instrument is meant to have the effect of re-creating every existing interest referred to in it.  And it would be an extraordinary result if registration of a survey plan could operate so as to alter, unilaterally and retrospectively, the terms of an agreement between parties; in this case,  rights and obligations under the lease.
  1. In my view, then, the registration of the survey plan did nothing to change the conditions of the existing lease; it simply referred to it and provided that it was to encumber Lot 1.  The nature and extent of the applicant’s interest continued to be defined by the relevant registered instrument – the registered lease – which created it.  The applicant’s “right[s], power[s] or privilege[s]” were those rights specified in the lease. T he entitlement to use common areas remained in respect of the common areas on that part of Lot 1 which had previously been Lot 6; it did not extend to any part of the resumed land.  There is nothing startling about the notion that a no-longer existing lot continued to be the reference point for identification of property subject to rights under the lease.  The premises leased continued to be identified by the sketch plan which formed part of the registered lease instrument; in other words by reference to what had been Lot 6.
  1. The interest created by registration of the survey plan was not the lease but the registered proprietors’ interest in the new Lot 1, subject to the existing interest in the lease.  Section 182 did not apply to the lease interest so as to vest or create it.

Retail Shop Leases Act

  1. I have also reached the view that the definition of “common areas” in the lease, while different from that in s 6 of the Retail Shop Leases Act, is not inconsistent with that provision, so as to fall within the compass of s 20 of the Act.
  1. A difference in definition of a term as between a lease and the Retail Shop Leases Act does not, without more, create an inconsistency for the purposes of s 20.  Importantly, s 6 of the Act does not purport to provide a definition of “common areas” for use in retail shop leases.  And I draw from the fact that it appears in a division of the Act headed “Extended Definitions” only that the definition goes beyond what might ordinarily be regarded as encompassed in the term “common areas” and is too lengthy practically to be included in a schedule.  In my view, the definition in s 6 does no more than explain what is meant by “common areas” when the expression is used in the s 8 definition of “retail shopping centre”.  It is, as was the expression under consideration in Gibb v Federal Commissioner of Taxation,[85] “no more than an aid to the construction of the statute”,[86] having no substantive effect.  It says nothing as to rights or obligations; indeed the Act as a whole attaches no consequence to “common areas” by reason of their definition as such.  The Act evinces no legislative intention in ss 18-20 or elsewhere to convert s 6 into an operative section.
  1. Section 6 plainly does not confer any entitlement or impose any duty so as to attract the application of s 18 of the Act. If LGM Enterprises Pty Ltd v Brisbane City Council[87] stands for the proposition that it does, I would consider it wrongly decided.  But with respect, the reasoning of the Land Appeal Court in that case is difficult to follow.  The court seems to have taken the view that since the definition of “common areas” in the lease lacked content, assistance had to be sought from the Retail Shop Leases Act.  After referring to s 18, the court made the observation:

“What constitute the ‘common areas’ of the tenancy are an aspect of the entitlements and the duties of the lessor and the lessee under the lease.”

That statement is opaque.  The court did not identify any entitlement under the Act relevant to common areas, and while a lease may specify entitlements attaching to common areas, the existence per se of particular areas as common areas hardly constitutes an entitlement or duty, or an aspect of an entitlement or duty.  From there, by a process which is unclear, the court concluded that the statutory definition applied to the lease so that walkways in the shopping centre were common areas which, by virtue of a lease provision, tenants were permitted to use.  The court then adverted to tenants’ rights to compensation under s 43 where access was impeded and reiterated the conclusion that the walkways were part of the common areas.  The connection between the application of s 43 and the definition of common areas, if any, was left obscure.  I do not, with respect, think that the case contains anything that can assist for present purposes.

  1. In reaching the view that s 6 is purely a definition section for the purposes of the Retail Shop Leases Act, I am influenced by the object of the Act: “to promote efficiency and equity in the conduct of certain retail businesses.”[88]  It seems to me improbable that efficiency would be promoted by compelling the use in leases of a uniform definition of common areas, one which extended the common areas throughout the entirety of the shopping centre, whether or not the parties preferred that the associated rights and obligations applied to a more limited area.  That is all the more so when the definition in the Act, which includes “areas in or adjacent to the centre that are used…by the public”, means that the constitution of common areas would be capable of fluctuating wildly over the term of a lease, as patterns of public use changed.

Conclusion

  1. I agree that the application raises questions of law of some importance and would grant leave to appeal. I would, however, dismiss the appeal with costs for the reasons I have given.
  1. MORRISON JA:  I have had the advantage of reading the draft reasons of the President and Holmes JA.  I will express my reasons for agreeing with the conclusions reached by the President, having reached a different conclusion from that of Holmes JA.

The preliminary question posed

  1. The essential background is set out in the President’s reasons in paragraphs [2] – [5], which I adopt.  The preliminary question to be answered is:

“[W]hether, at the date of resumption, the applicant had an estate or interest in the resumed land pursuant to the Acquisition of Land Act [1967].”

  1. The question did not call for an examination or determination of the nature or scope of the interest held by the applicant, unless that was necessary in order to determine whether the applicant had an estate or interest in the resumed land.
  1. That question was posed because of the terms of s 12(5) of the Acquisition of Land Act 1967 (the ALA) which provides:

“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 … 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 …”

Interests and lessees under the Acquisition of Land Act 1967

  1. In Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads[89] this Court decided that the word “interest” in s 12(5) of the ALA has the meaning given by s 36 of the Acts Interpretation Act 1954.  That meaning is:

interest, in relation to land … means –

(a)a legal or equitable estate in the land …; or

(b)a right, power or privilege over, or in relation to, the land …”[90]

  1. Chesterman JA stated that the consequence was that “… every person entitled to an interest, so defined, i.e. a right over or in relation to the land, is entitled to claim compensation upon its resumption”.[91]  The breadth of what may constitute an “interest” is indicated by Sorrento where a contractual right to use a car park on the land was held to confer an “interest” in that land for the purposes of s 12(5) of the Act.
  1. There can be little doubt that a lessee under a registered lease has an interest in the land which is separate from that of the lessor.[92]
  1. Where land is acquired compulsorily that will often involve the expropriation of an interest of more than one person in the land. One such person is a lessee.[93]  It follows that the owner of each interest in the resumed land has a separate and distinct claim to compensation.  That each interest is to be assessed separately is a question that has been settled for some time by the High Court in Rosenbaum v Minister for Public Works:[94]

“[I]t should be decided that upon the true construction of the Public Works Act each person having any estate or interest in the land, including a termor[95] or tenant, has a separate and independent claim to compensation for the value of the interest which is taken from him by the acquisition of the land under the Public Works Act.  Each such person should as to his own interest be regarded as an owner within the meaning of that word in s. 101(1) of the Public Works Act.

  1. That principle is enshrined in the various forms of the acquisition legislation and has continued to be applied, notwithstanding that the legislation upon which it was based has since been repealed.[96]
  1. The position of leases in terms of a right to compensation upon compulsory acquisition, were succinctly stated in the following terms:

“In respect of leases the right to claim compensation for resumed land is subject to each claimant establishing that he or she has an interest in the land.  If the land is leased, it follows that the lessor and the lessee have separate interests in the land.  There may be more than one lessee and there may also be sublessees.  Each has an interest in the land.  If the owner holds the fee simple interest in the resumed land and no other person possesses or holds any other interest in the land, the task of assessing compensation involves making a single award.  The valuation of leasehold interest can be more difficult to assess.”[97]

  1. In considering the compensation for the acquisition, the court is not concerned with questions of title, but is concerned with determining the nature of the interests of those entitled to compensation.              [98]
  1. There are varying measures by which one might assess the compensation claimable by a lessee. For the purposes of this application it is not necessary to deal with that question, as it is one which would properly fall for the court making that determination.
  1. The difficulty that confronts a lessee when a resumption occurs is to demonstrate that there has been a compensable loss because of the resumption. On a resumption the resuming authority acquires the resumed land free of any encumbrances, which includes any leasehold interest. Such leasehold interest comes to an end. However, it may be that a resuming authority, on the resumption of the reversionary interest, steps into the lessor’s shoes and decides to postpone taking vacant possession until the lease is lawfully at an end. In such a case the lessee ordinarily does not sustain a compensable loss, and is not entitled to compensation.[99]
  1. Thus in the applicant’s case the difficulty will be to demonstrate that the acquisition of the piece of land abutting the road had any impact upon the applicant’s right as lessee. It is in that sense that the differing definitions of common areas, the one in the lease and the other in the Retail Shop Leases Act 1994 (Qld) (RSLA), come to the fore.

The history of the land

  1. The registered proprietors provided evidence of the history of Lot 6 on RP809722 (Lot 6) and Lot 1 on RP847798 (old Lot 1).[100]  They owned Lot 6 from 1998 and purchased old Lot 1 in 2004.  At that time old Lot 1 had a house and shed on it.  Application was made to the Council to change the use of old Lot 1 to fast food, takeaway food and store, so that it became an extension of the shopping centre then on Lot 6.  The Council approved that change but imposed a condition that Lot 6 and old Lot 1 be “amalgamated into one parcel of land, and the Plan of Subdivision of this amalgamation shall be registered...”.[101]  The amalgamation was registered on 23 October 2007.
  1. By March 2008 the extension to the shopping centre had been completed. On 17 March 2008 Zacsam Pty Ltd became a lessee of part of new Lot 1, the premises being described as “shop GF21 at Castle Hill Shopping Court”.
  1. Once the survey plan was registered the owners of new Lot 1 “considered the Common Area as defined in [the applicant’s] Lease, to be all the Common Areas of the amalgamated lot”.[102]

The resumption

  1. On 14 January 2008 the respondent issued a Notice of Intention to Resume “Part of Lot 1 on Survey Plan 184746”.[103] It listed the applicant as one of those who held “Encumbrances and Interests”.
  1. On 14 November 2008 the respondent Council published a gazette notice announcing that that it would resume certain land from new Lot 1.  What was resumed was “Part of Lot 1 on Survey Plan 184746”.  An area of about 418m2 was taken.  None of that land was the subject of a lease except to the extent that it was part of Common Areas.  That is consistent with the conditions imposed by the respondent on approving the change of use for Lot 6 and old Lot 1.  One of the conditions was the amalgamation of Lots 6 and old Lot 1; another was that a “land requirement” in these terms:

“There is a land requirement from the subject site that may be dedicated by the Developer as road for the future construction of Dohles Rocks Road as indicated on the attached Council Sketch Plan number D04/16-SK21 dated 17 October 2006. This requirement should be excluded from the proposed development and kept clear of permanent structures or improvements associated with the development.”[104]

  1. The “land requirement” was shown on the sketch plan attached to the development approval, as an area on the corner of Dohles Rocks Road and Ogg Road.  The “land requirement” is essentially the same land as was resumed.

Operation of the land title system

  1. There are a number of features about the land title system that impact on the resolution of this matter.
  1. First, the Torrens system is one of title by registration, not registration by title.[105]  It is only upon registration that a title is created, and gains indefeasibility.  Registration is the source of title, and it confers on the person as registered proprietor, a title that did not previously exist.[106]  Peldan concerned a joint tenancy which was unilaterally severed, so that the registered proprietors became tenants in common.  The passage at [20] bears repeating:

Be that as it may, the Carindale property was land the title to which was provided by the Queensland Torrens title legislation, the Land Title Act. In such a case, the interests as joint tenants were extinguished by registration of a new instrument which created an indefeasible title as tenants in common. This is because, notwithstanding that the Land Title Act (like cognate statutes in other States) uses the language of ‘transfer’, title is comprised by the record contained in the register. A lot or an interest in a lot ‘passes’ by registration of an instrument (s 60). The title of the registered proprietor comes from the fact of registration, and it is this which is the source of the title rather than what Windeyer J contrasted as ‘a retrospective approbation of … a derivative right’.

  1. Secondly, on registration the previous title is extinguished and a new title is certified as if there had been a new Crown grant.[107]
  1. Thirdly, a registered interest is extinguished or modified by a later inconsistent registered dealing. For example, a registered lease for a term exceeding three years is extinguished if the Registrar cancels the folio of the register for the land and issues a new folio containing no mention of the lease. A certificate of title that has been cancelled has no efficacy as a legal document.[108]
  1. Fourthly, s 182 Land Title Act 1994 (Qld) (LTA) provides:

182Effect of registration on interest

On registration of an instrument that is expressed to transfer or create an interest in a lot, the interest –

(a)is transferred or created in accordance with the instrument; and

(b)is registered; and

(c)vests in the person identified in the instrument as the person entitled to the interest.”

  1. It is the registration of an “instrument” that creates the relevant title: s 182 LTA. Further, “on registration of an instrument that is expressed to create an interest in a lot, the interest … is … created in accordance with the instrument”: s 182 LTA. An “instrument” does not create an interest in a lot at law until it is registered: s 181 LTA.
  1. Fifthly, an “instrument” includes a lease, and a survey plan: Schedule 2 LTA.
  1. Sixthly, an amalgamation of lots requires a subdivision plan to be lodged: s 49(b) LTA. Further it requires the consent of each “registered proprietor” in the original lot, if their interest is affected: s 50(1)(j) LTA. A registered lessee is a “proprietor of a lot” within the definitions in the LTA: Schedule 2 LTA. The definition of a “registered proprietor of a lot” means “a person recorded in the freehold land register as a proprietor of a lot”: Schedule 2 LTA.  Therefore a registered lessee is a “registered proprietor” of a lot.
  1. Seventhly, the definition of a plan of subdivision relevantly means “a plan of survey providing for … (b) amalgamation of 2 or more lots to create a smaller number of lots”: s 49 LTA. A plan of subdivision “… must … be consented to by … all … registered proprietors whose interests are affected by the plan”: s 50(1)(j) LTA.
  1. Eighthly, a lot defined in a plan of subdivision is only created when the plan is registered: s 49A(2) LTA.

The applicant’s interest

  1. The applicant’s lease was originally registered against Lot 6.  The adjoining site was old Lot 1.  The title descriptions show that Lot 6 and old Lot 1 were separate lots even though they were adjoining – each had a separate title, created by separate registered plans.
  1. The applicant’s lease was registered in 1999 over Lot 6, pursuant to s 174 LTA.  The “instrument” that created the leasehold interest in Lot 6 was the lease itself.  The lease, as an “instrument”, had effect “on registration”: s 182 LTA.  Thus the leasehold title it created was brought into existence upon registration of the lease in 1999.  The term was for 10 years from 1 March 1999.[109]
  1. On registration of the lease the applicant obtained indefeasible title to an interest in Lot 6.  The extent of that interest was defined by the lease.  I shall return to the impact of the clauses in the lease dealing with Common Areas.
  1. On 27 September 2007 Lot 6 and old Lot 1 were amalgamated to create a new lot, described as Lot 1 on SP184746 (new Lot 1).  New Lot 1 did not exist until the survey plan was registered: s 49A LTA.  On registration of the survey plan, new Lot 1 was created and that title was inconsistent with the continued existence of Lot 6 and old Lot 1, both of which ceased to exist as distinct lots.[110]  So much is confirmed by: the survey plan SP 184746 which created new Lot 1 by “Cancelling Lot 1 on RP847798 & Lot 6 on RP809722”;[111] and an historical search of Lot 6 which reveals all the leases over the land, then the registration of “Survey Plan No 711039152 amalgamating the land into Lot 1 on SP184746”, and stating that “This Title Has Been Fully Cancelled”.[112]  There was at that point no definable lot conforming to Lot 6 or the old Lot 1.  All that then existed was new Lot 1, over which the applicant’s lease was registered.
  1. The system of title under the LTA does not contemplate layers of freehold interest. There is only one freehold title to each lot, albeit that it may be held by multiple people, as in the case of joint tenants or tenants in common. The registration system does not contemplate that Lot 6 or old Lot 1 could continue to exist in some way under or in parallel with new Lot 1.
  1. Section 64 of the LTA provides that a “lot or part of a lot may be leased by registering an instrument of lease for the lot or part”. The interest in the lot (or part) at law, under the lease, is created on registration, and not before: s 181 LTA.
  1. The term “lot” is defined to mean “a separate, distinct parcel of land created on - (a) the registration of a plan of subdivision; or (b) the recording of particulars of an instrument”.[113]
  1. It follows that if a lease specifies a lot that does not exist as part of the land title register it cannot be registered over that lot (or part of it). In my view the same must be the case where a lot ceases to exist as part of the register. Once the survey plan was registered Lot 6 ceased to exist as its title was cancelled.  At that point the applicant’s lease could not remain registered over a lot that no longer existed.
  1. The title reference of new Lot 1, being “on SP184746” reveals that it was created by means of a survey plan.  Such a subdivision plan cannot be registered unless the consent of the various “registered proprietors” of that land is given: s 50(1)(j) LTA.  The definition of “registered proprietor” includes a lessee: paragraph [88] above.  It therefore follows that the applicant must have been asked, and gave, its consent to the amalgamation of Lot 6 with old Lot 1, and therefore the creation of new Lot 1.  That consent was given in circumstances where the legal effect of the registration of the plan of survey was to extinguish the interests of the applicant (and other “registered proprietors”) in Lot 6, and create a new interest in new Lot 1.[114]
  1. The plan of survey, which was the “instrument” by which new Lot 1 was created, was “expressed to … create an interest in a lot”, within the meaning of s 182 LTA.  It identified the applicant’s lease as an encumbrance over new Lot 1, under the heading “Existing Lease Allocations”.  The lease was identified by its registered number and the number ‘1” was entered under the heading “Lots to be Encumbered”.[115]
  1. That the plan of survey was the “instrument” that created new Lot 1, and was the “instrument” that created the applicant’s leasehold interest in new Lot 1, and that the applicant’s interest in new Lot 1 could not have been created by the lease itself, seems to me to follow for several reasons.
  1. First, the lease had its effect under s 182 “on registration”, which predated the plan of survey by some years.[116]  There is no suggestion that it was re-registered on the creation of new Lot 1.  So much is signified by the fact that the lease was not amended or varied to specifically refer to new Lot 1 as the land over which the lease was granted.  Such an amendment would, no doubt, occur if the first or second option under the lease was exercised.  In that event a new lease comes into being: clauses 18.2, 18.3 and 19.3.  Once the first option is exercised clause 18.3 provides:

“Parties to Sign Further Lease – The Lessor and the Lessee must sign the Further Lease or an Instrument of Variation under section 67 of the Land Title Act 1994 within a reasonable time after exercise of the Option of Renewal.”[117]

  1. Secondly, the lease pre-dated the creation of new Lot 1, which only came into existence on registration of the survey plan on 27 September 2007.
  1. Thirdly, the survey plan recorded the lease as an “Existing Lease Allocation”[118] in respect of new Lot 1 when it was created, i.e. at the moment of registration of the survey plan: s 49A LTA.  The register thus records that the interest was an existing one at the time that new Lot 1 was created.  Had the lease been the instrument that created the leasehold interest in new Lot 1, it would have to have been registered at the same time as the survey plan, as the title to new Lot 1 was freehold title and if the lease was not recorded on the title it would exist without the lease as an encumbrance: see paragraphs [82] to [84] above.
  1. Fourthly, the amalgamation of Lot 6 and old Lot 1 was achieved by the owners’ lodging the subdivision plan of survey.  For that purpose they had to obtain the consent of the applicant to the registration of the plan.  That consent was evidently forthcoming on the basis that the lease would remain as an existing encumbrance over new Lot 1.
  1. The survey plan records, in a panel entitled the “Certificate of Registered Owners or Lessees”, that the lessors “as Registered Owners of this land agree to this plan …”.[119]  Immediately under that, as Holmes JA points out in [47] above, the line for lessees was crossed out.  However I respectfully do not agree that means that the applicant did not consent within the meaning of s 50(1)(j) LTA.  The Registered Owners’ agreement in that panel was recorded to comply with s 50(1)(b), which requires a survey plan to “include a statement [by the registered owner or a mortgagee, if in possession] agreeing to the plan”.  Section 50(1)(b) says nothing about such a statement by a lessee or “registered proprietor”.  The recording, on the survey plan, of the lessees’ interests as “Existing Lease Allocations” against the new Lot 1 signifies that such consent must be taken to have been given.
  1. I also respectfully disagree that s 11 of the LTA supports the conclusion that the survey plan did not create an interest in a lot. Section 11 is in Div 2 of Part 2, which deals with “General requirements for instruments in the freehold land register”. It provides that “[a]n instrument to transfer or create an interest in a lot must be executed by - (a) the transferor or the person creating the interest; and (b) the transferee or the person in whose favour the interest is to be created…”.  Plans of subdivision are dealt with in Div 3 of Part 4 and its provisions enable an interest in a lot to be created by a plan of subdivision which is not executed in the way required by s 11: ss 49, 49A, 50, and 52.
  1. In paragraph [49] of the reasons of Holmes JA, a passage from the Land Title Practice Manual (the Manual) is set out, giving the Registrar’s explanation of what  “affected” means in s 50(1)(j) LTA.[120]  That, of course, does not govern the meaning of that term in the LTA.  The explanation deals only with spatial intersections between the registered interest and the newly created interest (be it a road or lot), and in a way that reflects subdivisions which reduce the spatial limits of the lot in which the registered proprietor’s interest exists.  However it does not address the question whether a plan of subdivision that amalgamates two existing lots into one new lot means that existing lessees of one of those lots have interests that are “affected” by the plan.  Where a plan of subdivision has the effect that the title to the lot over which a lease is registered will cease to exist, it seems to me that the lessee’s interest is affected, notwithstanding that there may be no spatial intersection.
  1. Holmes JA has also referred to various parts of the “Registrar of Titles Directions for the Preparation of Plans” in relation to “allocations” on a plan of survey: see [50]-[51] above.  I respectfully agree that the Registrar’s directions and practice do not resolve the question of law here, but observe that the Directions proceed on the basis that a plan of survey will create interests in the new lot.
  1. Thus Direction 22.1 states that “All plans of survey which change the description of a parcel of land, or define a new interest in a parcel of land are the subject of allocations”. The plan here did not change a description but created an interest in new Lot 1.  Direction 22.1 goes on to note that “The land registry creates new titles, and notes interests from the information shown in the allocation schedules.”[121].  The plan here did create a new title, to new Lot 1, and noted interests, being the registered leases.  However those leases had not been previously registered against new Lot 1, which only came into existence at the moment of registration of the plan.
  1. Direction 22.1 then notes that there are only two categories of allocations, one being “Lot allocations”[122] and the other “Interest allocations”.  Further, Direction 22.1 states that “Where any registered interest affects only part of the base parcel, allocate that interest to the new lots, either fully or partially”.  Here it seems the lease was allocated to the entirety of new Lot 1, as no partial allocation was noted.
  1. Direction 22 therefore seems to proceed on the basis that the allocation reference is part of the process by which the registered lessee’s interest in new Lot 1 is noted.
  1. In my view the applicant’s leasehold interest became, on registration of the survey plan, an interest in new Lot 1.  The consent of the applicant to the subdivision was matched by the consent of the owners that the lease would be registered (as an existing encumbrance) on the title to new Lot 1.  However the respondent contended that whilst that might be so, because of the terms of the lease that interest did not extend to any part of the land represented in the former title to old Lot 1.

The terms of the lease

  1. The lease is over “Part of the ground floor of the building erected on the land as hatched in black on the plan in the schedule attached hereto”.[123]  The “land” is defined as the “lot described in Item 2 of the Form 7 of this Lease”.  That in turn refers to “Lot 6 on RP809722”.
  1. The common areas are defined in the lease[124] as “those areas of the Building or the Land which have not been leased or licensed by the Lessor”.  Use of the common areas is provided for in clauses 6.8 and 15:

“6.8Use of Common Areas - The Lessee and the Lessee’s Employees may use the Common Areas but must obey all reasonable directions and rules given by the Lessor relating to their use.  The Lessee must not obstruct the Common Areas or Car Park.

  1. COMMON AREAS AND THEIR USE

The Lessee acknowledges that:-

  1. the Common Areas:-
  1. are the property of the Lessor; and
  1. may be used, controlled, managed, altered, closed or dealt with as the Lessor from time to time sees fit;
  1. this Lease does not give the Lessee by implication or otherwise any rights to the Common Areas or what is done or not done within them other than as specifically provided in this lease; and
  1. signage within the Common Areas will be controlled by the Lessor.”
  1. The term “Lessee’s Employees” is defined to include the lessee’s “employees, contractors, agents, customers … or others (with or without invitation) who may be on the Premises, the Building or the Land”.
  1. The “Premises” is defined as “Shop 1 at Castle Hill Shopping Court, Corner Dohles Rocks Road and Ogg Road, Murrumba Downs, Queensland, 4503”.
  1. The “Building” is defined as “the building of which the Premises forms part”.
  1. The definitions above show that the common areas extend to the boundaries of the “Land”, to the extent that any such area is not leased or licensed by the lessor. Further the wide definition of “Lessee’s Employees” extends to the applicant’s employees, contractors and customers, and others who might visit the applicant’s leased premises. The evidence established that customers had routinely used the balance of Lot 6 and old Lot 1 (including that part of old Lot 1 which was ultimately resumed) as a means of access, and for parking.[125]
  1. The grant of the lease is expressed to be of “the premises described in item 5 to the lessee for the term stated in item 6 subject to the covenants and conditions contained in the attached schedule”.[126]  The grant thus incorporates the conditions in relation to the common areas.  Thus whilst the lease itself was only over part of the building on Lot 6, the lessee’s rights includes use of the common areas to the boundaries of Lot 6.
  1. The parties contemplated that the lessor might wish to deal with the land. Clause 16.4 provides:

Dealing With The Land - The Lessor may subdivide the Land or grant easements or other rights over it or register a Community Title Scheme for the Land. The Lessee must at the Lessor’s expense sign any consent or document needed by the Lessor so the Lessor can carry out its rights under this clause without interference with the Lessee's other rights under this Lease.”[127]

  1. The qualification at the end of clause 16.4 is important as it protects the lessee’s rights from being eroded by any contemplated dealing. That reinforces that the consent that the applicant must have given to the plan of subdivision that amalgamated Lot 6 and old Lot 1, was one that almost certainly preserved all its rights under the lease.

The “Land” under the lease

  1. Item 5 of the first page of the lease has, as its subject matter, the “premises being leased”. It is identified as: “Part of the ground floor of the building erected on the land as hatched in black on the plan in the schedule hereto”. The hatching in black on the plan simply identifies what part of the building is leased.[128]  The reference to the “land” in item 5 is not to delineate any rights as such, but simply to identify in which building the “premises” are.  The “premises” are then further identified in item 3 in the Reference Schedule.  It is “Shop 1 at Castle Hill Shopping Centre”, which is given an address.
  1. The reference to “the Land” is not only to identify what building the premises are in, i.e. the building erected on “the Land”. It also serves to define what land the building is built upon. Clause 1.2 defines “Land” as being “the lot described in Item 2 of the Form 7 in this Lease”. Reference to item 2 shows that to be Lot 6.
  1. The lease therefore defines the “Land”, not by reference to a physical thing,[129] but by reference to something created by the land title register.  That is obviously important for the purposes of identifying the lot over which the lease will be registered, if it is registered at all.  But the relationship between the definition of “Land” and the identification of the Lot in item 2 also means that the Lot is the “Land”.  Therefore, if the Lot number changed,[130] the “Land” would be defined as the Lot with the changed number.
  1. The “Land” is directly relevant to the definition of “Common Areas”. They are “those areas of the Building or the Land which have not been leased or licensed by the Lessor”. At this point the identification of the lot that constitutes the Land is relevant, as the extent of the common areas is defined by the extent of the “Land”, and therefore it is necessary to identify the boundaries of that “Land”. That is done by defining the “Land” as the lot referred to in item 2.
  1. The full extent of the Common Areas matters, as clauses 6.8 and 15 grant the lessee use of the Common Areas, whilst clause 6.3(i) prohibits the lessee from soliciting for business “in Common Areas”.
  1. The definition of the “Land” is also relevant: to identify what forms part of the “Shopping Centre”, namely “a group of shops … together with all parking areas and other associated facilities erected on and/or forming part of the land…”;[131] who might come within the definition of “Lessee’s Employees”, including “customers … or others … who may be on … the Land”.[132]

The approach of the Land Appeal Court

  1. The court below held that when Lot 6 and old Lot 1 were amalgamated, those lots were cancelled and the applicant’s lease was registered as an interest on the title to new Lot 1.[133]  However it held that whilst the lease was registered over new Lot 1, what was leased was that part of Lot 1 which is shown on the plan attached to the lease.  Consequently:

“In this case, the ‘Land’ the subject of the lease is identified in the lease instrument as Lot 6. There is nothing in the registration process which changes that lot description. It is a lease in relation to that part of Lot 1 that was formerly Lot 6, and the area of Lot 6 is clearly ascertainable by reference to the plan attached to the lease. Other rights of [the applicant] under the lease, such as those relating to the use of common areas and car parks, remain identified by reference to land within Lot 6, and do not extend to the whole of Lot 1.”[134]

  1. The court concluded at [57] that:

We therefore conclude that [the applicant’s] lease does not give it rights in relation to the resumed land. [The applicant’s]  lease applies only to the area of what was once Lot 6, which does not include the resumed land. Any rights conferred by the lease are confined to the area of the former Lot 6. It therefore follows that, in answer to the remaining issues raised by [the applicant] in its Notice of Contention, the lease does not confer any contractual rights on [the applicant] to use the resumed land for car parking by its customers and the lease does not confer on [the applicant] any ‘estate or interest’ in the resumed land.”[135]

  1. In my view when the owners of Lots 6 and old Lot 1 amalgamated those lots, with the consent of the applicant, the necessary consequence was that the “Land” over which the lease was granted became new Lot 1.  Lot 6 ceased to exist on the registration of new Lot 1, as its title was cancelled.  Further, the interest of the applicant in Lot 6 was extinguished, and a new interest was created in new Lot 1.[136]  That process involved the applicant consenting to the extinguishing of its interest in Lot 6 and the creation of its new leasehold interest in new Lot 1.  That was signified by the survey plan recording that the applicant’s lease was an existing encumbrance over new Lot 1.  As new Lot 1 was not created until the moment of registration of the survey plan, the lease could not have been described as an existing encumbrance over new Lot 1, unless new Lot 1 was the “Land” under the lease.  Further, for the reasons referred to in paragraph [125] above, when title to Lot 6 was extinguished, and the new title to the physical land was created as new Lot 1, the definition of “Land” necessarily changed to refer to new Lot 1, even if the lease itself was not amended.
  1. The contentions by the respondent, and the approach of the court below, proceed on the basis that the lease could be registered against the title of new Lot 1 but the boundaries of a now cancelled lot would nonetheless define the rights of the parties.
  1. The vice in that approach can be demonstrated by considering the position if, instead of amalgamating the two lots: (i) the owners had subdivided Lot 6 into two lots, with the lessee’s consent; (ii) left the lease registered as an encumbrance over the lot that had the shopping centre on it, but not registered over the other lot; (iii) the definition of “Land” had remained unchanged in the form of the lease, i.e. referring to Lot 6; (iii) the owners retained the shopping centre on the one lot, and sold the other lot.  Adopting the approach taken in the court below presents some difficulties:
  1. the applicant’s rights to the Common Areas, as defined in the lease, run to the boundaries of Lot 6; on the approach taken by the court below that would not change even though part of Lot 6 no longer existed, because the lease would still refer to Lot 6 as the “Land”;
  1. that would mean that the applicant’s rights were defined in a way which treated those rights as extending to a discrete lot with its own title, and which did not have the lease registered against it as an encumbrance;
  1. the subdivided lot which did not have the shopping centre on it would exist as a discrete lot, clear of any registered interest of the lease; indefeasibility of title would mean that lot would not be subject to the lessee’s rights; on that basis could it sensibly be said that the “Land” the subject of the lease had not been varied so that it now was confined to the remaining lot?
  1. The parties to the lease contemplated the situation in which the title to the “Land” over which the lease was granted might alter, in clauses 16.4 and 25(k).
  1. Clause 16.4 permits the Lessor to “subdivide the Land” (i.e. Lot 6) and obliges the lessee to consent, but only if the subdivision will not result in “interference with the Lessee’s other rights under this Lease”.  If consent was given the Lessee could not be heard to say that its rights were interfered with, even if the actual Lot reference in the lease was not amended.  That would be because the parties accept that the Lot over which the lease remains registered, and therefore “the Land” for the purposes of the lease, would be the new Lot created as a result of the subdivision.
  1. In my view the same follows where the subdivision is to achieve an amalgamation of the Lot referred to in the lease with another lot, so that the existing Lot ceases to exist.
  1. Clause 25(k) applies to the three personal guarantors identified in item 10.[137]  Under that clause the guarantors gave a guarantee and indemnity to the lessor, surviving even a variation of the lease: clause 25(e).  More importantly, clause 25(k) provides:

“Further Lease, Replacement Lease – This Guarantee and Indemnity … shall also extend to cover any substitute or replacement lease resulting from any right under this Lease for the Lessor to … subdivide, amalgamate … the … Land containing the Premises.”

  1. The clause contemplates that subdivision or amalgamation of the Land will result in a substitute or replacement lease, but that event will not be such as to alter the liability of the guarantors.  That lends support to the view that the parties’ contemplation was that if subdivision or amalgamation occurred, and the Lot identity changed as a result, the “Land” the subject of the Lease would be the new Lot.
  1. A close analogy to the scenario above is what happened on the respondent’s resumption. A new survey plan was registered, splitting new Lot 1 into Lot 1 on SP215604 and Lot 11 on SP215604.  Lot 11 was the resumed portion, title to which was registered in the respondent’s name.  The survey plan was registered “Cancelling Lot 1 on SP184746”.[138]  Prior to the resumption Zacsam Pty Ltd’s lease was over new Lot 1, for a term of 10 years, and the “Land” was defined as “Lot 1 on SP184746”, i.e. new Lot 1.  Could it sensibly be said that after the resumption its rights should be defined by reference to new Lot 1, a lot that was cancelled, or rather by reference to that lot as affected by the resumption?
  1. Even if the lease was not amended to change the lot description for the purpose of “land”, the parties to the lease must, in my view, be taken to have intended that in the event of subdivision the definition of “Land” would be the modified, to be the new Lot.  So too, in my view, must it be the case that where an amalgamation takes place, the Lot described in the lease ceases to exist because it is subsumed into a larger lot.
  1. For these reasons I agree with what the President has said in paragraphs [16]–[19].

Does the Retail Shop Leases Act amend the lease?

  1. It was contended that this point only arose if the applicant’s contentions on the first point failed. In short the contention is that even if the applicant’s rights in respect of the common areas under the lease itself were confined to Lot 6, and not new Lot 1, nonetheless the RSLA had the effect of substituting the definition of “common areas” in the RSLA, so that the resumed land would have been classed as part of the common areas of the lease, thus giving the applicant an “interest” for the purpose of the ALA.
  1. On this point I respectfully agree with what the President has set out in her reasons, and add only the following observations.
  1. There is no dispute that the applicant’s lease is a retail shop lease, in a retail shopping centre, under the RSLA. The RSLA defines a retail shopping centre as:[139]

“(1)A retail shopping centre is a cluster of premises having all of the following attributes—

(a)5 or more of the premises are used wholly or predominantly for carrying on retail businesses;

(b)all the premises—

(i)are owned by the 1 person; or

(ii)have the 1 lessor or head lessor, or, if the premises were leased, would have the 1 lessor or head lessor; or

(iii)comprise lots within a single community titles scheme;

(c)all the premises are located in—

(i)1 building; or

(ii)2 or more buildings if—

(A)the buildings are adjoining; or

(B)if the premises are owned by the 1 person—the buildings are separated by common areas or other areas owned by the owner or a road; or

(C)if the premises are not owned by the 1 person—the buildings are separated by common areas or a road;

(d)the cluster of premises is promoted, or generally regarded, as constituting a shopping centre, shopping mall, shopping court or shopping arcade.

(2)In this section—

community titles scheme means a community titles scheme under the Body Corporate and Community Management Act 1997.

  1. Further, the court below held that the resumed land was used as “common areas” within the meaning of s 6 of the RSLA, which provides:

“(1)Common areas of a retail shopping centre are areas in or adjacent to the centre that are used, or intended for use—

(a)by the public; or

(b)in common by the lessees of premises in the centre in relation to the conduct of businesses in premises in the centre.

(2)Common areas include—

(a)stairways, escalators and elevators; and

(b)malls and walkways; and

(c)parking areas; and

(d)toilets and rest rooms; and

(e)gardens and fountains; and

(f)information, entertainment, community and leisure facilities.

(3)However, common areas do not include leased areas.”

  1. The applicant contends that the RSLA has the effect of modifying the terms of the lease, relying on ss 18, 19 and 20 of the RSLA:

18Act’s provisions implied in leases

If, under this Act, a duty is imposed or an entitlement is conferred on a lessor or lessee under a retail shop lease, the duty or entitlement is taken to be included in the lease.

19Contracting out of Act prohibited

A provision of a retail shop lease is void if it purports to exclude the application of a provision of this Act that applies to the lease

20Act prevails over inconsistent leases

If a provision of this Act is inconsistent with a provision of a retail shop lease, the provision of this Act prevails and the provision of the lease is void to the extent of the inconsistency.”

  1. The applicant contends the definition of “common areas” in the lease in clause 1.2 is inconsistent with the definition of “common areas” in s 6 of the RSLA.  Clause 1.2 of the lease provides that common areas are: “those areas of the Building or the Land which have not been leased or licensed by the Lessor”.
  1. There are a number of ways, apart from the difference in the wording of the definitions, in which it can be demonstrated that the two definitions operate inconsistently. Three will suffice to make the point.
  1. First, the RSLA defines the common areas by reference to areas “in or adjacent” to the shopping centre. The lease defines them as being areas “of the ... Land which have not been leased or licensed”, and therefore the rights to the common areas extend to the boundaries of the “Land”. Depending on the size of the land that the shopping centre is built on, there could well be a significant difference in those rights. Consider a shopping centre dwarfed by the land it was built on. Under the RSLA the common areas would only be those in or adjacent to the centre, whereas under the lease the rights would extend to the boundaries.
  1. Secondly, the lease defines common areas so that they are restricted to areas that are not “leased or licensed” by the lessor. The RSLA does not, instead focussing on whether the public (or others) use the areas, or it is intended that they be used.  Therefore if an area was licensed to someone but the public used it anyway, that would be part of the common areas under the RSLA, but not under the lease.  An example is an area that someone is licensed to operate as a car park, but which is used by the public for pedestrian access notwithstanding the license.  Another is where an area is licensed to a lessee to use as a loading dock, but the lessee allows other lessees to use it in common.
  1. Thirdly, the lease definition is such that the rights in respect of common areas extends to, but not beyond, the boundaries of the “Land”. Under the RSLA there is no such restriction. Consider a shopping centre that is built on more than one lot, or multiple buildings that cross lot boundaries, and leased premises that are leased by reference to the “Land” being the lot that the relevant building is on. Under the lease the rights to common areas would extend only to the lot boundaries whereas under the RSLA they would comprehend the whole shopping centre, regardless of the boundaries.
  1. However, merely to point to such discrepancies in the operation of the definitions does not answer the question as to whether the definition in the RSLA is, within the meaning of s 20, “a provision of this Act … inconsistent with a provision of [the lease]”. To resolve that issue one must turn attention to the text, in context, of ss 6, 8 and 20, and examine the intended purpose and operation of those sections.
  1. Section 6 defines the “common areas of a retail shopping centre”.  The reference to “lessees” in ss (1) is merely an aspect of that definition, namely the common areas of a retail shopping centre are (relevantly) those areas used or intended for use in common by lessees.  Similarly the reference to “leased areas” in ss (3) serves only to exclude an area from the definition of what are common areas of a retail shopping centre.  The only provision in the RSLA from which one could discern what are common areas for the purposes of a retail shop lease in a retail shopping centre, is s 6.
  1. A “retail shop lease” is obviously a different thing from a “retail shopping centre”. A retail shopping centre is defined in s 8 a being a “cluster of premises” having certain attributes, including, in the case of two or more buildings, separation of them by “common areas”.[140]  That definition does not depend on, or incorporate, the definition of a “retail shop lease”, as a retail shopping centre can exist where there are no leases at all, namely where all the premises are owned by the one owner, or are lots within a community title scheme: s 8(1)(b)(i) and (iii), and s 8(1)(c)(ii)(B).
  1. Nothing in the definitions of “retail shop lease” or “retail shop” purport to define what is a common area for such a lease or premises.[141]  However, the fact that those definitions do not define “common areas” for those purposes, does not carry the debate very far.  The common areas referred to in a retail shop lease for premises in a retail shopping centre will, of course, be the common areas of the shopping centre.  The common areas will normally be the means by which customers are able to get to and from the shops, from one part of the shopping centre to another, and make use of facilities such as car parks, toilets, and information desks, and enjoy the amenities such as gardens or fountains or entertainment.  As such the common areas facilitate lessees’ conducting their businesses, and their ability to earn income, which in turn enables them to pay the rent and other required contributions.  Indeed, in many cases, as here,[142] a component of the rent will be based on the lessee’s turnover.  That serves to highlight that the nature and extent of the common areas is something vital to both lessors and lessees in a shopping centre.
  1. Therefore when the lease refers to “common areas” and the rights given to the applicant in respect of “common areas”, it is referring to the common areas of the shopping centre in which the premises are situated. It defines those areas in a way that is inconsistent with the definition of the same areas in the RSLA.
  1. I agree with the President that a contrary legislative intent is evident such as to displace the general principle enunciated in Gibb v Federal Commissioner of Taxation.[143]  In my view that appears most clearly from the terms of s 20 which provides that if there is inconsistency between “a provision of this Act” and a provision of a retail shop lease, “the provision of this Act prevails and the provision of the lease is void to the extent of the inconsistency”.
  1. Section 6 is a “provision” of the RSLA, notwithstanding that it is a definition section: s 36 of the Acts Interpretation Act 1954 (Qld).  It provides what the common areas in a retail shopping centre are.  The definition of common areas has substantive operation beyond its use in the definition of “retail shopping centre” in three areas.
  1. First, common areas are relevant to the determination of the lessor’s outgoings. Section 7(1)(a)(ii) defines outgoings as including the lessor’s “reasonable expenses directly attributable to the operation, maintenance or repair” of “areas used in association with the centre”. The phrase “areas used in association with the centre” comprehends the common areas, which are clearly areas used in association with the centre.
  1. Secondly, in leases where the lessee is liable to pay a proportion of the lessor’s outgoings, s 38(2) provides that the lessee’s proportion is calculated on the basis of “the proportion that the area of the lessee's leased shop bears to the total area of all premises in the centre”. The latter phrase is then specified to be areas “leased to or occupied by lessees” or “available for lease to or occupation by lessees”, who “enjoy or share the benefit resulting from the outgoing”.  Thus the common areas are not included in the calculation of the lessee’s proportion, even though the lessor’s outgoings include the costs of maintaining those areas: s 7(1)(a)(ii).  Therefore the extent of the common areas is a matter that impacts on the lessee’s contribution in a direct way.
  1. Thirdly, s 40(1)(a) applies if a lessee is to pay amounts towards a sinking fund for the “maintenance of, or repairs to … areas used in association with, the retail shopping centre”. The phrase “areas used in association with, the retail shopping centre” comprehends common areas. Therefore the extent of the common areas matters directly to the amount that the lessee might be called upon the pay.
  1. Therefore in my view the definition in s 6 has practical content, and substantive operation. Section 20 applies to the inconsistency between what the RSLA says common areas are, and what the applicant’s lease provides.

Conclusion

  1. I agree with the orders proposed by the President.

Footnotes

[1] Land Court Act, s 75(1).

[2] Lease, cl 2, Schedule, Definitions and Interpretation c11.2, "Land".

[3] Lease, cl 1.2.

[4] Lease, cl 15(a).

[5] Lease, cl 15(b).

[6] Lease, cl 15(c).

[7] The resumed land was registered as Lot 11 on SP 215604 and the balance of the amalgamated lot was registered as Lot 1 on SP 215604.

[8] Mekpine Pty Ltd & Anor v Moreton Bay Regional Council [2012] QLC 0046.

[9] Moreton Bay Regional Council v Mekpine Pty Ltd & Anor [2013] QLAC 5, Peter Lyons J, MacDonald (President) and Smith (Member).

[10] (2008) 165 LGERA 232; [2008] QLAC 0214.

[11] (1971) 124 CLR 73, 77.

[12] Moreton Bay Regional Council v Mekpine Pty Ltd & Anor [2013] QLAC 5, [47]-[57].

[13] Land Title Act, s 3(a) and (b).

[14] Land Title Act, s 27.

[15] Above, s 28(1)(a).

[16] Above, s 28(1)(b).

[17] Above, s 28(1)(c).

[18] Above, s 28(1)(e).

[19] Above, s 31.

[20] Above, s 37.

[21] Above, s 39.

[22] Above, Sch 2 Dictionary.

[23] Above, s 175.

[24] Lease, cl 6.8 and definition of common areas in cl 1.2.

[25] Set out at [3] of these reasons.

[26] Moreton Bay Regional Council v Mekpine Pty Ltd & Anor [2013] QLAC 5, [25] and Mekpine Pty Ltd & Anor v Moreton Bay Regional Council [2012] QLC 0046, [26].

[27] Retail Shop Leases Act, s 3.

[28] Above, s 4(a).

[29] Above, s 7.

[30] Above, s 8.

[31] Above, s 9.

[32] Above, s 8.

[33] Above, s 12.

[34] Above, s 13(1).

[35] Above, Div 2.

[36] Above, Div 3.

[37] Above, Div 4.

[38] Above, Div 5.

[39] Above, Div 6.

[40] Above, Div 8.

[41] Above, Div 8A.

[42] Above, Sub-div 1.

[43] Above, Sub-div 2.

[44] Above, Sub-div 3.

[45] Above, s 47.

[46] Above, s 48.

[47] Above, s 49.

[48] Above, s 50.

[49] Above, s 50A.

[50] Above, Div 1.

[51] Above, Div 2.

[52] Above, Div 3.

[53] Moreton Bay Regional Council v Mekpine Pty Ltd & Anor [2013] QLAC 5, [57].

[54] (1966) 118 CLR 628.

[55] Set out at [3] in these reasons.

[56] [2013] QLAC 5, [58]-[67].

[57] (2008) 165 LGERA 232; [2008] QLAC 0214.

[58] [2013] QLAC 5, [68].

[59] Set out at [3] of these reasons.

[60] (2008) 165 LGERA 232; [2008] QLAC 0214.

[61] White J, MacDonald (President) and Jones (Member).

[62] (2008) 165 LGERA 232; [2008] QLAC 0214, [22].

[63] [2007] 2 Qd R 373.

[64] Above, [24]-[29].

[65] (1966) 118 CLR 628.

[66] Above, 635.

[67] The Act, s 12 and s 13(1).

[68] The Act, s 18.

[69] The Act, s 19.

[70] The Act, s 20.

[71] The Act, s 3.

[72] [2013] QLAC 5, [68].

[73] The Act, Pt 6 Div 5, esp s 37.

[74] Land Title Act s 175.

[75] Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73 at 77.

[76] Land Title Act s 182.

[77] Land Title Act s 49A(2).

[78] Land Title Act s 50(1)(b)(i).

[79] Land Title Practice Manual (Qld) [21-2230].

[80] Land Title Practice Manual (Qld) [21-2230].

[81] “Registrar of Titles Directions for the Preparation of Plans”.

[82] Section 22.

[83] At 22.1.

[84] At 22.1.

[85] [1966] 118 CLR 628.

[86] At 635.

[87] (2008) 165 LGERA 232.

[88] Retail Shop Leases Act 1994 s 3.

[89] Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd R 373; [2007] QCA 73.  (Sorrento)

[90] Sorrento at [8].

[91] Sorrento at 387 [52].

[92] Prince Alfred Park Reserve Trust v State Rail Authority of New South Wales) (1997) 96 LGERA 75.

[93] Land Acquisition, Brown, 6th ed, para 3.10.

[94] Rosenbaum v Minister for Public Works (1965) 114 CLR 424; [1965] HCA 65; per Barwick CJ at 425.

[95] A person who holds land for a given number of years.

[96] SJR Investment Co Pty Ltd v Housing Commission of Victoria [1971] VicRp 24; [1971] VR 211; Rivers & Rivers v Minister of Education (1975) 12 SASR 321 at 329; and Lensworth Finance Ltd v Commissioner of Main Roads (1978) 5 QLCR 261.

[97] Land Acquisition, Brown, 6th ed, para 3.36.

[98] Robert Reid & Co v Minister for Public Works (1902) 2 SR (NSW) 405; (1902) NSW St R 85; Brown & Brown Ltd v Sydney Municipal Council (1925) 4 LVR 27; (1925) 7 LGR (NSW) 60; Rosenbaum at 428-429, per Kitto J.

[99] Canada Steamship Lines Ltd v Toronto Terminals Railway [1930] 4 DLR 626.  Law of Compulsory Land Acquisition, Jacobs, para 14.60.

[100] Affidavit of Mr Crowley, AB 294.

[101] AB 321.

[102] Affidavit of Mr Crowley, paragraph 29; AB 297.

[103] AB 255.

[104] AB 324.

[105] Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70; at 385 per Barwick CJ; Frazer v Walker [1967] 1 AC 569, at 580 per Lord Wilberforce.

[106] Peldan v Anderson (2006) 227 CLR 471; [2006] HCA 48; at [20]. (Peldan)

[107] Quach v Marrickville Municipal Council (No 1) (1990) 22 NSWLR 55, at 63 C-D; City of Canada Bay Council v Bonaccorso Pty Ltd (2007) NSWLR 424; [2007] NSWCA 351, at [83]; Koompahtoo Local Aboriginal Land Council v KLALC Property Investment Pty Ltd [2008] NSWCA 6, at [130].  See Land Law, Butt, 6th ed., para 20.12, at p. 791.

[108] Medical Benefits Fund of Australia Limited v Fisher [1984] 1 Qd R 606, at 609-610, adopting Canadian Pacific Railway Co v Turta [1954] SCR. 427. See Land Law, Butt, 6th ed., para 20.21.

[109] The expiry date was said in Cl 6 to be 31 February 2009. Of course there was no 31 February 2009; that date would be read as 28 February 2009 given that if the first option period was exercised the new lease would commence on 1 March 2009: clause 18.1. No issue arises as to this.

[110] See paragraphs [82] and [83] above.  An example of the same result is given by the plan of survey that was registered to effect the resumption.  It recites that it is a plan of Lots 1 and 11 on SP215604 “Cancelling Lot 1 on SP184746”: AB 347.

[111] AB 240.

[112] AB 384.

[113] Schedule 2, LTA.

[114] Peldan at [20].

[115] A reference to new Lot 1: AB 333.

[116] Registration occurred originally in 1999, and then in 2002 an amendment was made to the name of one of the lessors.

[117] Clause 19.3 makes similar provision when the second option is exercised, referring to the lease as the “New Lease”.  AB 371.

[118] Emphasis added.

[119] AB 333.

[120] The Manual, [21-2230].

[121] Emphasis added.

[122] Irrelevant here.

[123] AB 350.

[124] Which commences AB 350.

[125] AB 281-282; 287-288; 454.  So much was found by the Land Court: [2012] QLC 46, at [31]-[32]; and accepted by the Land Appeal Court: [2013] QLAC 5, at [59].

[126] Item 8.

[127] Emphasis added.

[128] AB 376.

[129] As it might, for example, by specifying an address.

[130] For instance by some administrative act in the registry.

[131] Definition of “Shopping Centre”.  Even though “land” is used here without a capital letter, it means the “Land”.

[132] Definition of “Lessee’s Employees”.

[133] [2013] QLAC 5, at [8].

[134] [2013] QLAC 5 at [56].

[135] [2013] QLAC 5 at [57].

[136] Peldan at [20].

[137] Mr Kingston, Mr Haack and Mr Sangster.  When the lease was entered into they were the three directors of the applicant Lessee: AB 457.  When Lot 6 was amalgamated with old Lot 1, Kingston and Sangster were still directors.

[138] AB 347.

[139] RSLA, s 8.

[140] RSLA, s 8(1)(c).

[141] The reference, in sub-paragraph (f) of the definition of “retail shop lease”, to “a common area of a retail shopping centre” serves only to specify a location of premises and no more.

[142] Clause 3.2(a) of the lease: AB 358.

[143] (1966) 118 CLR 628; [1966] HCA 74.

Close

Editorial Notes

  • Published Case Name:

    Mekpine Pty Ltd v Moreton Bay Regional Council

  • Shortened Case Name:

    Mekpine Pty Ltd v Moreton Bay Regional Council

  • Reported Citation:

    [2016] 1 Qd R 148

  • MNC:

    [2014] QCA 317

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Holmes JA, Morrison JA

  • Date:

    02 Dec 2014

  • Selected for Reporting:

    Editor's Note

Litigation History

Event Citation or File Date Notes
Primary Judgment - - QLAC
Appeal Determined (QCA) [2014] QCA 317 02 Dec 2014 -
Application for Special Leave (HCA) File Number: B55/14 24 Dec 2014 -
Special Leave Granted (HCA) [2015] HCATrans 323 08 Dec 2015 -
HCA Judgment [2016] HCA 7; (2016) 256 CLR 437 10 Mar 2016 -

Appeal Status

{solid} Appeal Determined (QCA) - {solid} Appeal Determined (HCA)