3015LAW Lecture Notes - Lecture 8: Building, Nuisance, Estoppel
1. LEASES
Definition of lease
- A leasehold interest arises when a lessor gives a lessee:
othe legal right to exclusive possession of land;
oa period (“term”) less than the term for which the landlord holds the land;
oa term being certain or at least capable of being rendered certain; and
oan interest in the land, as opposed to a mere personal privilege (licence).
- Can grant to third party
- Tenant create sub tenancy
- Lessor = reversion estate
Exclusive possession and duration of term
- Exclusive possession means that the tenant:
o enjoys the right to exclude all others from the land including the landlord, subject
only to the landlord’s statutory and common law rights.
o has an interest in the land itself – an estate.
- Length of lease (term):
o must be for period less than the lessor’s tenure.
o in case of sublease, term must be for a term less than the head lease.
Certainty of term
Two aspects
1. certainty of the commencing date (South Coast Oils (Qld & NSW) Pty Ltd v Look
Enterprises Pty Ltd can be by reference to contingent event or implied by reference to
date of possession/ payment of rent); and
2. certainty as to duration (Prudential Assurance Co v London Residuary Co).
South Coast Oils (Qld & NSW) Pty Ltd v Look Enterprises Pty Ltd
enforced agreement to grant lease which would be leased at commencement that service
station would be finished being built. Once contingency had occurred then it would
commence so valid
Prudential Assurance Co v London Residuary Co
council purchased land from property owner, leased land back to lender, but when leased
back no specific terms, understanding that they could get it back, 16 years later, party sort
to terminate lease, uncertainty of lease, there was uncertainty despite they operated under
the understanding for 16 years. No legal lease between council and original landlord.
- Commencement inferred once payment of rent made
- Certainty duration = possible to infer from contingent event – must be certain to happen
- Event = eg completion of building
Lease or licence
Three types of licence
1.i.i.a.i.1. bare (or mere) licence = invite someone onto property, rescind invitation
then they have no right to stay - can revoke without notice
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1.i.i.a.i.2. contractual licence = reflected in contract, access provided
1.i.i.a.i.3. licence coupled with an interest. = owner will grant someone to come to take
something off land, licence to enter land and right to take something. Remove natural
resource
Fundamental difference between 1 & 2 and lease
- decisive issue
oobjectively, has a right to exclusive possession been granted (not whether there was
an intention to grant a lease): see Radaich v Smith, and, more recently, Wik People v
Queensland
Right to use or do something.
Right to use land in some way.
Intention on part of parties = objective test
Radaich v Smith
disagreement over rent. Right to use as milk bar, deed of agreement for licence not for
lease. All the terms in the agreement looked like lease terms. HC despite the language of
licence used it was a lease. Only way to use the premises as milk bar was with exclusive
possession.
Lockable to exclude others. Labels irrelevant. Need to look at intention.
Wik People v Queensland
pastoral leases, whether they were legal lease, substance of lease. HC no, because third
parties exceptions to allow people to go on land.
Types of lease
Fixed term tenancy - created for a specific period.
- lease ends automatically on expiration of term.
Periodic tenancy - arises whenever the tenant enters into possession and
pays rent by reference to a specific time period (eg
fortnightly or monthly).
- frequency of payment determines both length of
period and required notice for termination = PLA, ss
134-136
Tenancy at will - arises whenever a person occupies land as a tenant on
the understanding that the lease can be determined at
any time by either the landlord or tenant.
- under PLA s 137 must be reasonable notice period.
- Fixed term expires but continues to occupy – with
consent
- lease not finalised yet and allows early access to
propertyt
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Tenancy at sufferance - tenant holds over without consent.
- determinable at any time with no notice required.
- opposite of above, without consent cant receive rent
but can get compensation
Tenancy at estoppel - arises by convention/mistaken understanding or
according to the principles established in Waltons
Stores (Interstate) Ltd v Maher
- one party induce assumption on another party that
they were landlord to their detriment. Promissory
estoppel.
Yearly tenancy - can be express.
- at common law implied where, for example:
- parties agreed to a lease for a term of years, although
not observed the formalities, and tenant goes into
possession, paying rent by reference to a year or a
proportion of a year (eg every six months); or
- no agreement for a lease but yearly tenancy reflects
common intention of the parties; or
- a party remains in possession after yearly lease
expires and parties have informally agreed to a further
yearly tenancy.
- common law modified by PLA, s 129(1) :
No tenancy from year to year shall, after the
commencement of this Act, be implied by
payment of rent; if there is a tenancy, and no
agreement as to its duration, then such
tenancy shall be deemed to be a tenancy
determinable at the will of either of the parties
by 1 month’s notice in writing expiring at any
time.
- s 129 applied in Palmdale Insurance Limited v
Sprenger
Creating lease over 3 years – formalities
PLA
SECTION DETAILS
S 10(1) No assurance of land is valid to pass an interest at law unless made by
deed or in writing, signed by person making assurance
S 11(1)(a) No interest in land can be created except by writing signed by person
creating interest
S 59 no action may be brought upon any contract for the sale or other
disposition of land or any interest in land unless contract in writing and
signed (mainly regarding enforcement)
S 129 Yearly tenancy may be implied
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Document Summary
Length of lease (term): must be for period less than the lessor"s tenure, in case of sublease, term must be for a term less than the head lease. Two aspects: certainty of the commencing date (south coast oils (qld & nsw) pty ltd v look. Enterprises pty ltd can be by reference to contingent event or implied by reference to date of possession/ payment of rent); and certainty as to duration (prudential assurance co v london residuary co). South coast oils (qld & nsw) pty ltd v look enterprises pty ltd enforced agreement to grant lease which would be leased at commencement that service station would be finished being built. Once contingency had occurred then it would commence so valid. No legal lease between council and original landlord. Certainty duration = possible to infer from contingent event must be certain to happen.
