Firth v Halloran - [1926] HCA 24

Landlord and TenantLease-Frustration of contract-Impossibility of performance

-Eviction by title paramount-Authority to enter to prospect for coal~Application for mining lease-Mining Act 1906 (N.S.T (No. 49 of 1906), secs. 70A, 70D- -Mining (Amendment) Act 1918 (N.S.W.) (No. 41 of 1918), sec. 4.

The plaintiff was the registered proprietor of 857 acres of land. memorandum of lease of 14th October 1913 he leased to a person, of whom the defendant was the executrix, 20 acres out of the whole area, and also the mines, seams, veins and beds of coal and all other minerals and mines other than gold or silver at the depth exceeding 300 feet below the surface within and under the whole 857 acres. The lease empowered the lessee to carry on mining operations on payment of a royalty in respect of all coal won. This royalty was to be set off pro tanto against a fixed rent of £150 for the first six months and thereafter of £600 per annum. The lease expressly provided that should not be obligatory on the lessee to carry on mining operations SO long as he paid the fixed rent, and it contained a covenant for quiet enjoyment. Rent was paid until June 1922 and was tendered up to October 1922. In that month authority to enter portion of the demised lands, not including the 20 aeres mentioned in the lease, was, pursuant to sec. 70A of the Mining Act 1906 (N.S.W.)-enacted by sec. 4 of the Mining (Amendment) Act 1918 (N.S.W.) -granted to A for the purpose of prospecting for coal and shale. On 9th November 1922 A applied to the Minister for Mines for leases under the Mining Act of the lands covered by his authority to enter. Those applications were

38 CLR 262

still pending, but no work of any kind, whether by way of prospecting or mining, had been done on the land by anyone. In an action by the plaintiff to recover the arrears of rent,

Held, by the whole Court, (1) that no frustration of the contract of 14th October 1913 had been brought about either by the passing of the Mining (Amendment) Act 1918 or by the grant to A of authority to enter or by the application by A for leases under the Mining Act; (2) that the performance of the covenant for payment of rent had not thereby been rendered impossible and (3) that nothing in the nature of eviction by title paramount had taken place.

Held, therefore, that the plaintiff was entitled to recover. Matthey v. Curling, (1922) 2 A.C. 180, followed. Decision of the Supreme Court of New South Wales (Full Court): Halloran V. Firth, (1926) 26 S.R. (N.S.W.) 183, affirmed.

APPEAL from the Supreme Court of New South Wales.

An action having been brought in the Supreme Court by Henry Ferdinand Halloran against Amy Clara Firth as executrix of William Arthur Firth deceased, the parties, by leave, stated for the opinion of the Supreme Court a…

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: [1926] HCA 24
Decision Date: 27 August 1926

CaseChat Overview and Summary

This case involved an appeal to the High Court of Australia concerning a lease agreement for land and minerals. The plaintiff, Halloran, was the lessor and the defendant, Firth, was the executrix of the lessee. The dispute arose over the payment of rent under a lease dated 14 October 1913, which granted the lessee rights to 20 acres of surface land and the minerals beneath 857 acres, with a provision for a fixed annual rent and royalties. Rent had been paid until June 1922, and a tender was made for rent up to October 1922.

The central legal issues before the court were whether the lease agreement had been frustrated, whether the performance of the covenant to pay rent had become impossible, and whether an eviction by title paramount had occurred. These issues arose from the granting of an authority to enter portions of the leased land to a third party, Albert Andrew Holland, for prospecting for coal and shale, and Holland's subsequent application for mining leases under the *Mining Act 1906* (NSW). The defendant argued that these events, particularly the statutory provisions and the actions taken under them, discharged the lessee from the obligation to pay rent.

The High Court, affirming the decision of the Supreme Court of New South Wales, held that no frustration of the contract had occurred. The court reasoned that the doctrine of frustration does not typically apply to a demise of land, as it creates a vested estate, and even if it did, the core rights under the lease, specifically the right to mine, had not been destroyed. The court also found that the performance of the covenant to pay rent had not been rendered impossible by the *Mining Act* or the actions taken under it, as the Act did not make the lease or the rent covenant unlawful. Furthermore, the court concluded that no eviction by title paramount had taken place, as the authority to enter granted to Holland conferred no title and did not constitute an eviction in law or in substance.

Consequently, the High Court dismissed the appeal, finding that the plaintiff was entitled to recover the arrears of rent. The court's reasoning was heavily influenced by the decision in *Matthey v. Curling*, which established that a tenant remains liable on their covenants even if deprived of the term by the exercise of legal powers, and that statutory interference with land use does not automatically amount to frustration or eviction.

Orders