Mekpine Pty Ltd v Moreton Bay Regional Council

Court of Appeal (McMurdo P, Holmes and Morrison JJA)

2 December 2014

This appeal from the Land Appeal Court presented the Court with issues concerning both the Land Title Act 1994 (“LTA”) and the Retail Shop Leases Act 1994 (“RSLA”).  This case arose out of a lease entered into by the appellant, Mekpine, in 1999 in relation to land registered as Lot 6 on RP 809722 (“Lot 6”) which described the common areas under the lease by reference to the boundaries of the Lot.  Pursuant to this lease, Mekpine had the ability to use the common areas subject to the direction of the lessor.  The lessor subsequently purchased the adjoining lot, Lot 1 (“old Lot 1”), and obtained development approval to extend their property across both lots, conditional upon their amalgamation.  The registration of both these lots was consequently cancelled and the land was amalgamated into a new registered lot, Lot 1 (the “new Lot 1”).  Mekpine’s lease was endorsed on the registered survey plan of the new Lot 1.  In 2008 the Moreton Bay Regional Council (“MBRC”) resumed a part of Lot 1 that was wholly outside the old Lot 6, Mekpine, however, applied for compensation for its interest in the resumed land.  Though successful at first instance, the Land Appeal Court overturned this decision, holding that at the date of resumption Mekpine did not have an interest in the resumed land.  It is this decision which was the subject of the present appeal. 

This appeal raised two questions of law, first, whether upon registration of the amended lease s.182 of the Land Title Act conferred on the applicant a compensable interest in the resumed land; and second, whether the RSLA amended the applicant’s lease such that, on the registration of the new Lot 1, the common areas under the applicant’s lease accorded with the “common areas” as defined in the RSLA.  [9].

Effect of s 182 of the Land Title Act

Pursuant to s 182 of the Land Title Act the registration of an instrument operates to transfer the interest in accordance with the instrument and vest the interest in accordance with the instrument.  Mekpine’s contention was that upon the registration of the new Lot 1 with the lease endorsed on it, references in their lease to Lot 6 became references to the new Lot 1, and thus the common areas of their lease were determined by reference to the new Lot 1, not to the now non-existent Lot 6.  [11]. The Court, (McMurdo P and Morrison JA, Holmes JA dissenting), accepted this contention, concluding that Mekpine did have an interest in the resumed part of the new Lot 1, notwithstanding the fact that the lease had originally referred to Lot 6. 

The system of property registration in Queensland does not contemplate the creation of parallel freehold title, thus the old Lot 6 and Lot 1 ceased to exist on registration of Lot 1.  [95].  The Court concluded that the effect of s 182 registration was that the registration of survey plan with the applicant’s lease noted on it “transferred or created a leasehold interest on the part of the applicant in the new, amalgamated Lot 1”.  [18]. Thus, given that Lot 6 ceased to exist, any reference to “land” in the lease became a reference to the land in the new Lot 1.  [21]–[22], see also [131].  This conclusion it was considered, was consistent with the objective intention of the parties when creating the lease and the objects of the Lands Title Act.  [19]. 

Effect of Retail Shop Leases Act

Though unnecessary given that its previous conclusion disposed of the appeal, the Court considered it desirable to consider Mekpine’s second contention, namely that the RSLA amended the definition of “common areas” in Mekpine’s lease.  [23].  Sections 18, 19 and 20 RSLA provide that: the provisions of the RSLA are to be taken to be included in all retail leases; that parties may not contract out of the provisions of the RSLA; and that where there is an inconsistency between provisions of a lease and the RSLA, the RSLA will prevail.  [28].  Section 6 of the RSLA defines “common area” in a different manner to its definition in the parties lease, and thus the question before the Court was whether this difference resulted in an inconsistency between the Act and the lease and that, as a consequence, this provision had no application.  [152]; RSLA, ss 18–20. 

The Land Appeal Court had relied upon the decision in Gibb v Federal Commissioner of Taxation, concluding that because the relevant definition appeared in the definition clause, it was merely an aid to construction and only provided a definition for the word as it was used in the statute.  [36].  Upon a detailed consideration of the RSLA the Court concluded the contrary holding, that the s 6 definition of “common areas” was to be incorporated into retail shop leases.  [37].  This decision was reached following a consideration of the legislative intent of the RSLA, in particular the Court was swayed by the object and structure of the Act, specifically the location of the definition (outside the “Standard” definition clause); its substantive operation, see [158]–[161], and the express provisions prohibiting contracting out of the RSLA and the supremacy of the provisions of the Act were any inconsistency to arise in a contract dealing with inconsistencies.  [37], see also [157]. 

The Court allowed the appeal.

NB.  It should be noted that an application for special leave to appeal to the High Court has since been filed.