Denham Bros Limited v W Freestone Leasing Pty Ltd - [2002] QSC 307

SUPREME COURT OF QUEENSLAND

CITATION:

Denham Bros Limited v W Freestone Leasing Pty Ltd [2002] QSC 307

PARTIES:

DENHAM BROS LIMITED ACN 009 658 075
(applicant)
v
W FREESTONE LEASING PTY LTD ACN 000 586 970
(respondent)

W FREESTONE LEASING PTY LTD ACN 000 586 970
(applicant)
v
DENHAM BROS LIMITED ACN 009 658 075
(respondent)

FILE NO/S:

S4964 of 2002
S6857 of 2002

DIVISION:

Trial Division

DELIVERED ON:

7 October 2002

DELIVERED AT:

Brisbane

HEARING DATE:

8 August 2002

JUDGE:

Mullins J

ORDER:

S4964 of 2002

The originating application filed on 31 May 2002 is dismissed.

S6857 of 2002

It is declared that:

1. 1. W Freestone Leasing Pty Ltd is entitled, as against Denham Bros Limited, to exercise the option contained in cl 33 of registered lease number 601075637.

2. W Freestone Leasing Pty Ltd has validly exercised the option in cl 33 of registered lease number 601075637 by notice in writing to Denham Bros Limited dated 26 July 2002.

CATCHWORDS:

LANDLORD AND TENANT – LEASE – ASSIGNMENT OF REVERSION – covenant giving lessor right to require lessee to purchase demised land, if lessee did not exercise right to renew lease – assignment of reversion effective to assign the benefit of the lessor’s option to require the lessee to purchase the demised land – no assignment of a burden involved in the assignment of the benefit of the lessor’s option to require the lessee to purchase the demised land

LANDLORD AND TENANT – LEASE – CONSTRUCTION – whether deed which was an agreement for lease can be used to construe covenant in lease – no ambiguity in lease – not appropriate to consider terms of agreement for lease in construing the lease

ASSIGNMENT – CHOSES IN ACTION – whether legal or equitable chose in action – existing right conferred by covenant giving lessor right to require lessee to purchase demised land – assignable as legal chose in action – Property Law Act 1974 (Q), s199

Property Law Act 1974

Calaby Pty Ltd v Ampol Pty Ltd (1990) 102 FLR 186
Carter v Hyde (1923) 33 CLR 115
Chan v Cresdon Pty Ltd (1989) 168 CLR 242
Codelfa Construction Pty Ltd v State Rail Authorityof New South Wales (1982) 149 CLR 337
Davenport Central Service Station Ltd v O’Connell [1975] 1 NZLR 755
Esther Investments Pty Ltd v Cherrywood Park Pty Ltd [1986] WAR 279
Gallagher v Rainbow (1994) 179 CLR 624
Griffith v Pelton [1958] Ch 205
Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57
Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85
Norman v Federal Commissioner of Taxation (1963) 109 CLR 9
Price v Murray [1970] VR 782
Woodall v Clifton [1905] 2 Ch 257

COUNSEL:

RIM Lilley for the applicant in S4964 of 2002 and the respondent in S6857 of 2002
BD O’Donnell QC for the respondent in S4964 of 2002 and the applicant in S6857 of 2002

SOLICITORS:

Deacons for the applicant in S4964 of…

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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Details

Case: [2002] QSC 307
Decision Date: 7 October 2002

CaseChat Overview and Summary

Denham Bros Limited took legal action against W Freestone Leasing Pty Ltd in a dispute concerning the assignment of a reversion in a lease agreement. The matter was heard in the Supreme Court of Queensland. The crux of the dispute was whether the assignment of the reversion effectively transferred the benefit of a covenant allowing the lessor to require the lessee to purchase the demised land, and if this could be enforced despite the lessee's contention that such a transfer constituted an assignment of a burden.

The court was required to determine whether the assignment of the reversion included the benefit of the covenant that permitted the lessor to compel the lessee to purchase the property if the lease was not renewed. Furthermore, the court needed to establish if the terms of an agreement for lease could be considered in interpreting a covenant within the lease itself. The court found that the lease was not ambiguous and that it was inappropriate to refer to the terms of the agreement for lease in interpreting the lease.

The court ruled that the assignment of the reversion did indeed transfer the benefit of the covenant, and this transfer did not impose a burden on the lessee. The court held that the covenant was an existing right that could be assigned as a legal chose in action under the Property Law Act 1974 (Q), section 199. Consequently, the court dismissed the originating application and declared that W Freestone Leasing Pty Ltd was entitled to exercise the option contained in clause 33 of the registered lease and that it had validly done so by notice in writing dated 26 July 2002.

Orders

Orders of the court

S4964 of 2002

The originating application filed on 31 May 2002 is dismissed.

S6857 of 2002

It is declared that:

1. 1. W Freestone Leasing Pty Ltd is entitled, as against Denham Bros Limited, to exercise the option contained in cl 33 of registered lease number 601075637.

2. W Freestone Leasing Pty Ltd has validly exercised the option in cl 33 of registered lease number 601075637 by notice in writing to Denham Bros Limited dated 26 July 2002.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Denham Bros Limited v W Freestone Leasing Pty Ltd [2002] QSC 307
PARTIES:	DENHAM BROS LIMITED ACN 009 658 075 (applicant) v W FREESTONE LEASING PTY LTD ACN 000 586 970 (respondent) W FREESTONE LEASING PTY LTD ACN 000 586 970 (applicant) v DENHAM BROS LIMITED ACN 009 658 075 (respondent)
FILE NO/S:	S4964 of 2002 S6857 of 2002
DIVISION:	Trial Division
DELIVERED ON:	7 October 2002
DELIVERED AT:	Brisbane
HEARING DATE:	8 August 2002
JUDGE:	Mullins J
ORDER:	S4964 of 2002 The originating application filed on 31 May 2002 is dismissed. S6857 of 2002 It is declared that: 1. 1. W Freestone Leasing Pty Ltd is entitled, as against Denham Bros Limited, to exercise the option contained in cl 33 of registered lease number 601075637. 2. W Freestone Leasing Pty Ltd has validly exercised the option in cl 33 of registered lease number 601075637 by notice in writing to Denham Bros Limited dated 26 July 2002.
CATCHWORDS:	LANDLORD AND TENANT – LEASE – ASSIGNMENT OF REVERSION – covenant giving lessor right to require lessee to purchase demised land, if lessee did not exercise right to renew lease – assignment of reversion effective to assign the benefit of the lessor’s option to require the lessee to purchase the demised land – no assignment of a burden involved in the assignment of the benefit of the lessor’s option to require the lessee to purchase the demised land LANDLORD AND TENANT – LEASE – CONSTRUCTION – whether deed which was an agreement for lease can be used to construe covenant in lease – no ambiguity in lease – not appropriate to consider terms of agreement for lease in construing the lease ASSIGNMENT – CHOSES IN ACTION – whether legal or equitable chose in action – existing right conferred by covenant giving lessor right to require lessee to purchase demised land – assignable as legal chose in action – Property Law Act 1974 (Q), s199 Property Law Act 1974 Calaby Pty Ltd v Ampol Pty Ltd (1990) 102 FLR 186 Carter v Hyde (1923) 33 CLR 115 Chan v Cresdon Pty Ltd (1989) 168 CLR 242 Codelfa Construction Pty Ltd v State Rail Authorityof New South Wales (1982) 149 CLR 337 Davenport Central Service Station Ltd v O’Connell [1975] 1 NZLR 755 Esther Investments Pty Ltd v Cherrywood Park Pty Ltd [1986] WAR 279 Gallagher v Rainbow (1994) 179 CLR 624 Griffith v Pelton [1958] Ch 205 Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 Price v Murray [1970] VR 782 Woodall v Clifton [1905] 2 Ch 257
COUNSEL:	RIM Lilley for the applicant in S4964 of 2002 and the respondent in S6857 of 2002 BD O’Donnell QC for the respondent in S4964 of 2002 and the applicant in S6857 of 2002
SOLICITORS:	Deacons for the applicant in S4964 of…