Denham Bros Ltd v W Freestone Leasing Pty Ltd - [2003] QCA 376

SUPREME COURT OF QUEENSLAND

CITATION:

Denham Bros Ltd v W Freestone Leasing P/L [2003] QCA 376

PARTIES:

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

(respondent/respondent)

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

(respondent/appellant)

FILE NO/S:

Appeal No 9855 of 2002
SC No 4964 of 2002

SC No 6857 of 2002

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

2 September 2003

DELIVERED AT:

Brisbane

HEARING DATE:

1 May 2003

JUDGES:

McMurdo P, McPherson JA and Holmes J

Separate reasons for judgment of each member of the Court, McPherson JA and Holmes J concurring as to the orders made, McMurdo P dissenting in part

ORDERS:

1.   Appeal dismissed

2.   Appellant to pay respondent’s costs of application and appeal from 26 July 2002

3.   Respondent to pay appellant’s costs of the application at first instance up to and including 26 July 2002

CATCHWORDS:

LANDLORD AND TENANT – ASSIGNMENT, SEVERANCE AND UNDERLEASE – ASSIGNMENT AND SEVERANCE OF REVERSION – RIGHTS OR LIABILITIES OF ASSIGNEE – where respondent purchased property leased by appellant – where original lease contained option for lessor to require lessee to purchase – whether option assignable – whether option passed with reversion

REAL PROPERTY – GENERAL PRINCIPLES – REGISTRATION – WHAT IS CAPABLE OF REGISTRATION – whether s 53 Real Property Act (Qld) 1861 enables registration of covenant to purchase

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSIDERATION – NECESSITY FOR CONSIDERATION – where deed subsequently entered into between original lessor and respondent assigning option for lessor to require lessee to purchase – whether future interest that could not be assigned without consideration – whether effective assignment

Real Property Act 1861 (Qld), s 53
B & B Constructions v Brian A Cheeseman (1994) 35 NSWLR 227 at 245, considered
Chan v Cresdon Pty Ltd (1989) 168 CLR 242, considered
Coastplace Ltd v Hartley & Anor [1987] QB 948, considered
Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607, considered
Cooper v Micklefield Coal & Lime Co Ltd (1912) 107 LT 457, considered
Davenport Central Service Station Ltd v O’Connell [1975] 1 NZLR 755, considered
Devefy Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225, considered
Esther Investments v Cherrywood Park Pty Ltd [1986] WAR 279, considered
Fels v Knowles (1906) 26 NZLR 604, considered
Frazer v Walker [1967] 1 AC 569, distinguished
Griffith v Pelton [1958] 1 Ch 205, considered
Griffith v Tower Publishing Company Ltd [1897] 1 Ch 21, considered
Kumar v Dunning & Anor [1989] QB 193, considered
Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, considered
London & South Western Railway Co v Gomm (1882) 20 Ch D 562, considered
Mercantile Credits Limited v The Shell Company of Australia Limited (1976) 136 CLR 326, considered
Norman v Federal Commissioner of Taxation (1963)…

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: [2003] QCA 376
Decision Date: 2 September 2003

CaseChat Overview and Summary

The case of Denham Bros Ltd v W Freestone Leasing Pty Ltd involved a dispute between the original lessee of a property, Denham Bros Ltd, and the new owner of the reversion, W Freestone Leasing Pty Ltd. The original lease agreement contained a provision granting the lessor the right to require the lessee to purchase the property. The dispute arose when the new owner of the reversion attempted to exercise this right, leading to the current case. The court was required to determine whether the option to purchase could be assigned, whether it passed with the reversion, and whether the assignment of the option was valid.

The central legal issue in this case was whether the option to require the lessee to purchase the property could be assigned by the original lessor to the new owner of the reversion. The court also needed to decide if section 53 of the Real Property Act (Qld) 1861 enabled the registration of such a covenant to purchase and whether the assignment of the option was effective. The court examined the nature of the option, considering whether it was a future interest that required consideration to be assigned. The court further explored the validity of the deed entered into between the original lessor and the new owner of the reversion, which assigned the option.

The court concluded that the option to require the lessee to purchase the property was assignable and had indeed passed with the reversion to the new owner. The court found that section 53 of the Real Property Act (Qld) 1861 did enable the registration of such a covenant to purchase. Furthermore, the court determined that the assignment of the option was effective, even though it involved a future interest, as the assignment was documented in a deed that was properly executed. The appeal by Denham Bros Ltd was dismissed, and the costs of the application and appeal were ordered to be paid by the appellant to the respondent, with the respondent to pay the appellant's costs of the application at first instance up to a specific date.

Orders

Orders of the court

1. Appeal dismissed

2. Appellant to pay respondent’s costs of application and appeal from 26 July 2002

3. Respondent to pay appellant’s costs of the application at first instance up to and including 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 Ltd v W Freestone Leasing P/L [2003] QCA 376
PARTIES:	DENHAM BROS LIMITED ACN 009 658 075 (applicant/appellant) v W FREESTONE LEASING PTY LTD ACN 000 586 970 (respondent/respondent) W FREESTONE LEASING PTY LTD ACN 000 586 970 (applicant/respondent) v DENHAM BROS LIMITED ACN 009 658 075 (respondent/appellant)
FILE NO/S:	Appeal No 9855 of 2002 SC No 4964 of 2002 SC No 6857 of 2002
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	2 September 2003
DELIVERED AT:	Brisbane
HEARING DATE:	1 May 2003
JUDGES:	McMurdo P, McPherson JA and Holmes J Separate reasons for judgment of each member of the Court, McPherson JA and Holmes J concurring as to the orders made, McMurdo P dissenting in part
ORDERS:	1. Appeal dismissed 2. Appellant to pay respondent’s costs of application and appeal from 26 July 2002 3. Respondent to pay appellant’s costs of the application at first instance up to and including 26 July 2002
CATCHWORDS:	LANDLORD AND TENANT – ASSIGNMENT, SEVERANCE AND UNDERLEASE – ASSIGNMENT AND SEVERANCE OF REVERSION – RIGHTS OR LIABILITIES OF ASSIGNEE – where respondent purchased property leased by appellant – where original lease contained option for lessor to require lessee to purchase – whether option assignable – whether option passed with reversion REAL PROPERTY – GENERAL PRINCIPLES – REGISTRATION – WHAT IS CAPABLE OF REGISTRATION – whether s 53 Real Property Act (Qld) 1861 enables registration of covenant to purchase CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSIDERATION – NECESSITY FOR CONSIDERATION – where deed subsequently entered into between original lessor and respondent assigning option for lessor to require lessee to purchase – whether future interest that could not be assigned without consideration – whether effective assignment Real Property Act 1861 (Qld), s 53 B & B Constructions v Brian A Cheeseman (1994) 35 NSWLR 227 at 245, considered Chan v Cresdon Pty Ltd (1989) 168 CLR 242, considered Coastplace Ltd v Hartley & Anor [1987] QB 948, considered Consolidated Development Pty Ltd v Holt (1986) 6 NSWLR 607, considered Cooper v Micklefield Coal & Lime Co Ltd (1912) 107 LT 457, considered Davenport Central Service Station Ltd v O’Connell [1975] 1 NZLR 755, considered Devefy Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225, considered Esther Investments v Cherrywood Park Pty Ltd [1986] WAR 279, considered Fels v Knowles (1906) 26 NZLR 604, considered Frazer v Walker [1967] 1 AC 569, distinguished Griffith v Pelton [1958] 1 Ch 205, considered Griffith v Tower Publishing Company Ltd [1897] 1 Ch 21, considered Kumar v Dunning & Anor [1989] QB 193, considered Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, considered London & South Western Railway Co v Gomm (1882) 20 Ch D 562, considered Mercantile Credits Limited v The Shell Company of Australia Limited (1976) 136 CLR 326, considered Norman v Federal Commissioner of Taxation (1963)…