NEW SOUTH WALES. Crown Lands-Transfer inter vivosLease-Registration-Absence of Minister's
consent-Validity-Operation as agreement for Implied term to obtain consent-Part of term of lease-Quaere, executory-Availity of consent- Option to purchase-ExerciseConstruction-Validity until consent obtained- Specific performance-Crown Lands Consolidation Act 1913-1952 (Act No. 7 of 1913-Act No. 44 of 1952) (N.S.W.), S. 272.
By a document in the form of a memorandum of lease under the provisions of the Real Property Act 1900-1940 (N.S.W.), which was not registered, T.B. purported to lease to O., for a term of five years, land registered under the provisions of that Act, which was also subject to S. 272 of the Crown Lands Consolidation Act 1913-1952 (N.S.W.). That section invalidated, with certain exceptions, a sale or lease of land subject to the section without the consent of the Minister for Lands. The document contained an option to purchase exercisable by notice in writing within two calendar months from the date of the expiration of the term " provided that in the event of the death of the lessor prior to the expiration hereof then the lessee shall forthwith have the right to exercise the option". The Minister's consent had not been obtained either to the leasing or sale of the land. O. went into possession of the land in March 1949. T.B. died in May 1949. By notice in writing given to T.B.'s executors in April 1951, O. purported to exercise the option. A writ of habere facias was issued on a judgment in ejectment obtained in September 1951, by T.B.'s executors after a suit in equity had been commenced by O. in which he sought specific performance of the terms of the memorandum of lease as an agreement for a lease, and of the contract for sale of the land alleged to have been made by his exercise of the option to purchase contained
in the memorandum. The writ was handed to the sheriff for execution, whoreupon the suit was amended by joining him as a defendant and by seeking appropriate injunctions against him and T.B.'s executors to prevent the latter obtaining possession of the land. The Supreme Court held that O. was entitled to specific performance of the agreement and to the injunctions as asked, but was not entitled to specific performance of a contract for sale of the land alleged to be constituted by the purported exercise of the option. On appeal,
Held, (1) that the memorandum of lease was not an executory agreement but evidenced a concluded agreement and, apart from S. 272 of the Crown Lands Consolidation Act 1913-1952 (N.S.W.), only required registration under the Real Property Act 1900 (N.S.W.) in order to operate as a memorandum of lease under its provisions
(2) that by virtue of S. 272 parties may enter into a transfer subject to a condition that it is not to become effective unless the Minister's…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Butts v O'Dwyer [1952] HCA 74
Case
[1952] HCA 74
Decision Date
CaseChat Overview and Summary
The case involved Patrick Thomas O'Dwyer (the plaintiff) and the executors of Thomas Butts (the defendants). O'Dwyer sought specific performance of a memorandum of lease and an option to purchase land, which had been granted by Thomas Butts. The land was subject to section 272 of the Crown Lands Consolidation Act 1913-1952 (NSW), which required the Minister for Lands' consent for transfers, including leases and sales. The Minister's consent had not been obtained for the lease or the subsequent purported exercise of the option to purchase. The Supreme Court granted specific performance of the lease agreement but not the sale agreement. The defendants appealed this decision to the High Court.
The legal issues before the High Court were whether the memorandum of lease, lacking the Minister's consent, constituted a valid lease or merely an executory agreement for a lease, and whether the option to purchase was validly exercisable. The court also had to determine the effect of section 272 of the Crown Lands Consolidation Act on the validity of the lease and the option, particularly in relation to the requirement for the Minister's consent.
The High Court held that the memorandum of lease, while not registered and lacking ministerial consent, evidenced a concluded agreement for a lease. It reasoned that parties could enter into a transfer subject to the condition of obtaining the Minister's consent, implying an obligation on the transferor to take reasonable steps to secure it. The court found that the application for consent could be made at any time during the lease term. Regarding the option to purchase, it was deemed to become exercisable upon the lessor's death, but its effectiveness as a binding obligation was contingent on the Minister's consent to the lease. The court also clarified that section 272(2) applied to dealings and not merely instruments, and that an agreement to lease was not prohibited.
The High Court varied the Supreme Court's decree, declaring that the defendants were bound by an implied obligation to take reasonable steps to enable the plaintiff to apply for the Minister's consent to the lease. The appeal was dismissed with this variation, and the cross-appeal was also dismissed. The court reserved further consideration of the suit and costs, pending the Minister's decision on consent.