SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Block 27 Pty Ltd v Qursa Pty Ltd |
Citation: | [2024] ACTCA 16 |
Hearing Date: | 15 February 2024 |
Decision Date: | 31 May 2024 |
Before: | Mossop, Baker and McWilliam JJ |
Decision: | 1. The appeal is dismissed. 2. Each party is to pay its own costs of the appeal. 3. The cross-appeal is dismissed. 4. The first respondent is to pay the appellant’s costs of the cross-appeal and there is no order as to costs of the cross‑appeal between the first and second respondents. |
Catchwords: | REAL PROPERTY – CROWN LEASES – Covenants – Crown lease imposed obligation on Crown lessee to sublease or transfer car parking spaces in premises to lessees of units in adjoining premises – Crown lease contained covenants which specified terms required in sublease – sublease did not comply with specified terms – provision in sublease requiring sublessor to comply with covenants in Crown lease – whether sublease could be interpreted as incorporating requirements of Crown lease even where inconsistent with terms of sublease – it could not EQUITY – GENERAL PRINCIPLES AND MAXIMS OF EQUITY – Equity regards as done what ought to have been done – terms required by a Crown lease not incorporated into sublease –sublease contained clause providing sublessor must observe covenants and provisions of Crown lease – whether clause broad enough to incorporate provisions from Crown lease not in sublease where terms to be incorporated were contrary to various clauses of sublease – it was not – therefore equitable maxim could not operate so as to allow requirements of Crown lease to be treated as in incorporated in sublease EQUITY – GENERAL PRINCIPLES AND MAXIMS OF EQUITY – Equitable defences – “unclean hands” – where Crown lease transferred to new proprietor – where previous proprietor failed to fulfil obligation to grant complying sublease – whether new proprietor subject to obligation – whether continued failure to fulfil obligation considered wrongdoing for the purposes of the equitable maxim – held that new proprietor acquired the Crown lease subject to the terms of the Crown lease and the liabilities of the previous registered proprietor – held that continued failure to fulfil obligation considered to be wrongdoing and broader public interest in upholding Crown lease purpose – equitable relief refused CONTRACT – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – Third party benefit trust – obligation in Crown lease implements planning scheme that benefits third parties – whether Territory is a trustee of the benefit of those obligations – whether beneficiaries of those obligations may sue for the enforcement of those obligations even though not a party to the Crown lease – no intention to make the Territory a trustee – no third party benefit trust established |
Legislation Cited: | Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), s 29 Australian Capital Territory (Self-Government) Act 1988 (Cth), s 36 Land (Planning and Environment) Act 1991 (ACT), s 175 Land Titles Act 1925 (ACT), ss 77(2), 88, 88B |
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- Case
- [2024] ACTCA 16
- Decision Date
CaseChat Overview and Summary
The legal issues before the Full Court included whether a sublease could be interpreted to incorporate the requirements of the Crown lease, even where those requirements were inconsistent with the express terms of the sublease. The court also considered whether the equitable maxim "equity regards as done what ought to have been done" could operate to incorporate the Crown lease's requirements into the sublease, despite the inconsistencies. Furthermore, the court had to determine if the new proprietor of the Crown lease, Qursa Pty Ltd, was subject to the obligation to grant a complying sublease, and if their continued failure to do so constituted wrongdoing for the purpose of the equitable defence of "unclean hands". Finally, the court examined whether the Crown lease created a third-party benefit trust, allowing beneficiaries of the obligations to enforce them.
The Full Court reasoned that a sublease could not be interpreted to incorporate terms from the Crown lease that were contrary to its express provisions. The clause in the sublease requiring the sublessor to observe the covenants of the Crown lease was not broad enough to override the specific terms of the sublease where they conflicted. Consequently, the equitable maxim "equity regards as done what ought to have been done" could not be applied to deem the Crown lease requirements as incorporated. Regarding the equitable defence, the court held that Qursa Pty Ltd acquired the Crown lease subject to its terms and the liabilities of the previous proprietor. The continued failure to fulfil the obligation was considered wrongdoing, and given the broader public interest in upholding the purpose of the Crown lease, equitable relief was refused. The court also found no intention to create a third-party benefit trust, meaning the beneficiaries could not sue for enforcement of the obligations.
The Full Court dismissed the appeal and the cross-appeal. Each party was ordered to pay their own costs of the appeal. The first respondent was ordered to pay the appellant’s costs of the cross-appeal, with no order as to costs of the cross-appeal between the first and second respondents.
Orders
Orders of the court
1. The appeal is dismissed.
2. Each party is to pay its own costs of the appeal.
3. The cross-appeal is dismissed.
4. The first respondent is to pay the appellant’s costs of the cross-appeal and there is no order as to costs of the cross‑appeal between the first and second respondents.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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