Hare v Terry

The High Court of Australia heard an appeal from the Supreme Court of South Australia concerning the right of a hotel lessee to surrender their lease. The appellant, Charles Newton Hare, was the transferee of a hotel lease originally granted to David Callel by the respondent, Harriet Terry. The dispute arose when Hare sought to exercise a statutory right to surrender the lease under section 70 of the Licensing Acts Further Amendment Act (No. 2) 1915 (S.A.), a provision enacted to address the impact of earlier closing times for licensed premises.

The central legal issue before the High Court was whether the appellant, as a transferee of the lease, occupied the premises "under or by virtue of" the original lease within the meaning of section 70. This required the court to consider the effect of the memorandum of transfer, which included a new covenant by the appellant to pay rent and perform the lease's covenants, and the respondent's conditional consent to that transfer. The court also had to determine if these conditions constituted a waiver of the appellant's statutory right to surrender.

The High Court, allowing the appeal, held that the appellant was indeed in occupation of the premises under or by virtue of the original lease and was therefore entitled to surrender it. The court reasoned that the transfer of the lease, with the lessor's consent, meant the appellant occupied the premises under the original lease, fulfilling the statutory requirement. The new covenant in the transfer was viewed as a separate contractual relationship and did not alter the fundamental nature of the appellant's occupation under the lease itself, nor did it amount to a waiver of the statutory right to surrender. The court found that the intention was to preserve the original lease intact and transfer it, with the conditions of consent being distinct from the lease terms. Consequently, the appeal was allowed, and the judgment of the Supreme Court was reversed.