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Lecture

1. Leases

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Department
Law
Course
JSB171
Professor
All Professors
Semester
Spring

Description
LEASES —Establishing | Formalities | Notice = grant of a right to exclusive possession of land for a fixed or determinate term: Radaich v Smith (1959) S UMMARY I Establishing the lease—elements o Exclusive Possession o Certainty of Term o Other Considerations II Determining enforceability—notice required o In law  Long leases—registration → indefeasibility (enforceable against 3 parties)  Short leases—registration not required ← exception to indefeasibility o At CL—implied from term of contract  BUT yearly tenancies abolished: s129(1) o As a contract—enforceable for damages: Robinson o In equity—specific performance Elements Lease: (Radaich v Smith (1959))  The right to exclusive possession  A fixed or determinable term ↔ Licence: personal permission to enter land & use for a specified purpose 1. Right to Exclusive Possession = right to exclude all others including the lessor • Subject to o Terms of lease o Powers in lessor: s107 PLA • Determined by looking at whether agreement confers right of exclusive possession: Radaich v Smith per Windeyer J (moving away from intention test) • Intention not conclusive (eg expressions of opinion of grantor): Radaich v Smith per Windeyer J • Nomenclature not conclusive: Radaich v Smith o An agreement may be a lease although referred to as a licence: Radaich v Smith (‘licence’ for lock-up shop | covenant to give up possession at end of ‘licence’  lease although referred to as licence ← no need to give covenant to relinquish possession if licence [although failed because 5yr lease must be registered])  However, a licence is not a lease merely because it confers an ‘exclusive licence’ or ‘sole and exclusive use’: Luis v Bell o An agreement may be a licence although referred to as a lease: Radaich v Smith [by analogy] Indicia • Control—ability to exclude others: Radaich v Smith (ability to lock-up shop → exclusive control over the premises  lease) o Where no control—remains a licence: Lewis v Bell (jockey club—lessor remained in control  licence (even though referred to as ‘exclusive licence’) • Nature of business—if business can only be carried out with exclusive possession → lease: Radaich v Smith (shop must be locked up to enable operation—requires privacy | protection | confidence | operation area) o Storage areas not a major part of the grant so does not indicate exclusive possession 1 (1) Leases—Elements, Classification & Notice for Termination Andrew Trotter • Purpose of grant—short-term → licence | long-term → lease • If separate areas are granted / some areas must be used in common with others → licence: Lewis v Bell • Premises shared between tenants— (AG Securities v Vaughan) o Different rooms rented to different people → no right to exclusive possession o Agreements between parties interdependent and contemporaneous → can construe a single agreement granting right to exclusive possession 2. Certainty of Term = term express or capable of calculation • Commencement o express → lease o capable of implication (eg start of payment of rent: Jopling v Jopling) → lease o based on event (eg practical completion of construction) o not given or capable of implication → no lease: Caboolture Park Shopping Centre v Edelsten • Term o Express o Based on event—must have sufficient certainty  “for duration of war” → not certain: Lace v Chantler (lease in 1942)  “until land acquired for widening of road” → not certain: Prudential Assurance o Can be periodically determined by payment of rent (weekly / monthly / annually)—periodic tenancy is certain so long as the first term is ascertainable: Dockrill v Cavanagh  Where a term has been agreed, payment of rent in shorter intervals is not enough to displace the presumption that the longer period is the term of the tenancy: Moore v Dimond (yearly tenancy agreed—rent paid weekly  yearly) o So long as the maximum duration of the lease is certain the fact that the lease can be determined at an earlier uncertain time will make the lease void: Doe and Lockwood v Clarke 3. Other Considerations • Intention of the parties considered where unclear from agreement— (Lewis v Bell) o Covenants which would be unnecessary if a licence → lease: Radaich v Smith  allowing grantor to enter / view / inspect / carry out repairs on the premises  undertaking by grantee to give up premises at end of period o Clause for quiet possession/enjoyment → lease: Radaich v Smith o Clause requiring rent/monetary payments to full economic rent → lease: Radaich v Smith • Whether usual covenants apply → (Chester v Buckingham) o to pay rent; o to pay taxes, except such as were expressly payable by the landlord; o to keep and deliver up the premises in repair; o to allow the lessor to enter and view the state of repair; and o a covenant by the lessor for quiet enjoyment Effect o Licence → No right to assign o Lease → right to assign subject to reasonable refusal (see covenants) Position in law—Formalities & Indefeasibility Whether formalities are required depends on the length of the lease. (1) Leases—Elements, Classification & Notice for Termination 2 Andrew Trotter Long Leases = Longer than 3 years: s4 LTA • To be enforceable, must be— o in writing and signed by the parties: s 11(1)(a) PLA. o Contain essential terms (identify property, rent, names of parties) o Registered under the LTA: ss 64, 65 (formal requirements) & 181 (unregistered instrument does not gain indefeasibility) LTA • The instrument of lease must: s 65 LTA o validly executed o identify the lot or part of the lot to be leased o amount of consideration • If fail to satisfy formalities— o Takes effect as interest at will only: s12(1) PLA  Tenancy with no agreement as to its duration → determinable at will by either party with 1 mth’s notice
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