Apportionment of condition-Option of renewal of lease - Exercise of option after passing of the Conveyancing Act 1904 (Vicl.)-Notice to remedy breach of MELBOURNE,

covenant, requisites of-Breach of covenant-Performance impossible by law- April 6, 7, 8.

Covenant to repair internal parts of premises-Application to dividing fences- Bakehouse-Conveyancing Act 1904 (Vict.) (No. 1953), secs. 13, 15, 19, 24- Factories and Shops Act 1905 (Vict.) (No. 1975), secs. 11, 12, 14, 151, 154.

Sec. 15 of the Conveyancing Act 1904 (Vict.) provides that $ 6 Notwith- standing the severance by conveyance surrender or otherwise of the rever- sionary estate in any land comprised in a lease

every condition or right of re-entry

contained in the lease shall be apportioned and shall remain annexed to the severed parts of the reversionary estate as

in like manner as if the land comprised in each severed part

had alone originally been comprised in the lease." Held, by Griffith C.J. and Barton and Isaacs JJ., that the section applies where the severance has taken place since the Act came into operation, although the lease was created before that Act.

A lease of land under the Transfer of Land Act 1890 (Vict.) which was made before the Conveyancing Act 1904 came into operation and which was not registered in accordance with the former Act, contained an option renewal by the lessee which was exercised after the latter Act came into operation.

18 CLR 153

Held, that the assignee of the reversion in part of the land was under sec. 15 of the Conveyancing Act 1904 entitled to take advantage of the condition of re-entry contained in the lease.

Sec. 19 (1) of the Conveyancing Act 1904 provides that "A right of re- entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice specifying the particular breach complained of and if the breach is capable of remedy requiring the lessee to remedy the breach

to remedy the breach if it is capable of remedy

Held, that the notice must in the case of a covenant to keep in repair state the particular condition of the premises which the tenant is required to remedy and not merely that there has been a failure to comply with the

A lease of land and premises including a bakehouse contained a covenant that the lessee would "cause the baking business now carried on to be still carried on and kept alive." That business having been discontinued, the lessor with knowledge of the discontinuance accepted rent for some time but subsequently gave notice to the lessee requiring him to re-establish the carrying on of the baking business. The construction of the takehouse was such that under the provisions…

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.

Continue reading Gerraty v McGavin

Details

AGLC: Gerraty v McGavin [1914] HCA 23
Case: [1914] HCA 23
Decision Date: 8 April 1914

CaseChat Overview and Summary

The case of *Gerraty v McGavin* involved an appeal from the Supreme Court of Victoria to the High Court of Australia. The plaintiffs, Andrew Ingram McGavin and Clara Malinda McGavin, as assignees of a portion of the reversionary estate in leased land, sought possession of the land, mesne profits, and damages for alleged breaches of covenants in a lease. The defendant, Mary Catherine Gerraty, was the lessee. The original lease, dated 1899, was for a term of eleven years with an option for renewal, and it was not registered under the Transfer of Land Act 1890. The plaintiffs acquired the reversion in part of the land in 1911, after the lessee exercised the option to renew the lease in 1910.

The High Court was required to determine several legal issues. Firstly, whether section 15 of the *Conveyancing Act 1904* (Vic.) applied to a lease created before the Act came into operation, but where the severance of the reversion occurred after the Act commenced. Secondly, the court had to consider whether the assignee of a part of the reversion could enforce conditions of re-entry contained in the lease. Thirdly, the court examined the validity of a notice served on the lessee under section 19 of the *Conveyancing Act 1904* (Vic.) for alleged breaches of covenant, specifically concerning the repair of internal parts of the premises and the carrying on of a baking business. Finally, the court considered whether the performance of a covenant to keep a baking business alive had become impossible by law due to subsequent legislation.

The court held that section 15 of the *Conveyancing Act 1904* (Vic.) applied to leases created before the Act, provided the severance of the reversion occurred after the Act commenced. This was because the section's provisions regarding apportionment were considered to operate prospectively from the date of severance. The court also found that the exercise of the option to renew the lease in 1910 constituted a new demise, further supporting the application of section 15. Regarding the covenant to repair, the court determined that the internal dividing fences of saleyards were not "internal parts of the premises" as contemplated by the lease. Furthermore, the notice to remedy breaches of covenant was deemed insufficient as it failed to specify the particular condition of the premises requiring repair, as mandated by section 19 of the *Conveyancing Act 1904* (Vic.). As to the baking business covenant, the court found that the lessor had waived the breach by accepting rent after knowledge of the discontinuance. Crucially, the court held that subsequent legislative changes under the *Factories and Shops Act 1905* (Vic.) rendered the re-establishment of the baking business in the existing bakehouse impossible by law, thus excusing the lessee from performance.

Consequently, the High Court reversed the decision of the Supreme Court of Victoria. The appeal was allowed, and the plaintiffs were awarded nominal damages of one shilling for a minor breach of covenant regarding the repair of the premises, as no evidence was presented to establish damage to the reversion.

Orders