Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd

Lighting by Design (Aust) Pty Ltd was the tenant of premises leased from Cannington Nominees Pty Ltd. The lease was for more than five years but was not registered. After Cannington Nominees sold the freehold to another party, the new owner sought to terminate the lease. The tenant argued that the lease remained binding despite the sale of the freehold. The matter was heard in the Supreme Court of Western Australia. The central legal issue was whether the lease remained binding on the new owner despite not being registered and the transfer of the freehold.

The court examined the relevant provisions of the Property Law Act 1969 (WA), which state that a lease for more than five years must be registered to be binding on a transferee of the freehold. However, the court also noted that a lease may still be binding if there are other grounds for saying the lease is on foot, such as if the tenant is in actual possession of the premises and the landlord has acknowledged the lease. The court found that the tenant was in actual possession of the premises and that the landlord had acknowledged the lease through their conduct. The court held that these factors were sufficient to say the lease was on foot and binding on the new owner.

As a result, the court found that the lease remained binding on the new owner and that the tenant was entitled to remain in possession of the premises. The court also ordered that the new owner pay the tenant compensation for the value of the lease. The decision highlights the importance of registering leases for more than five years and the potential consequences of failing to do so. However, it also demonstrates that there may be other grounds for saying a lease is on foot, even if it is not registered.