B Bebarfald and Co Ltd v Macintosh and Corner

Bebarfald and Co Ltd (the appellant) and Macintosh and Corner (the respondents) were parties to a dispute concerning the incidence of land tax under a lease agreement. The matter came before the High Court of Australia.

The central legal issue before the Court was whether the appellant, as the lessee, was liable to pay land tax that became payable after the execution of the lease, notwithstanding a subsequent change in the law. Specifically, the Court had to determine the proper construction of the lease agreement in light of amendments to land tax legislation that occurred after the lease was entered into.

The Court reasoned that the lease agreement, executed in January 1909, contained a covenant by the lessee to pay all rates, taxes, and assessments which might be payable in respect of the demised premises. The relevant land tax legislation was amended in November 1908, prior to the lease execution, and further amended in 1910. The Court held that the covenant in the lease was broad enough to encompass the land tax imposed by the legislation as it stood at the time of the lease and as it might be altered thereafter. The Court applied the principle that a lessee's covenant to pay taxes generally extends to taxes imposed by subsequent legislation unless there is a clear indication to the contrary. The Court found no such contrary intention in the lease.

The appeal was dismissed.