Landlord and Tenant—Lease—Determination—Forfeiture—Covenant to commence erection of building within specified time—Clearing operations commenced—Whether breach—Acceptance of rent after notice of breach—Conduct of lessor and lessee—Waiver—Crown lease—Statutory procedure for determination upon breach of covenant—Effect of conduct upon statutory right to determine—Notice—Requirement that conditions for failure to comply with &hich lease may be determined be fully set out—Reference to terms of lease—Whether sufficient—Signature on notice—Delegation of function by Minister—Delegate designated by office held—City Area Leases Ordinance 1936-1964 (A.C.T.), ss. 6,22.*
Decisions
1966, December 22. WINDEYER J. delivered the following written judgment:- The main question in this case is whether the Commonwealth as lessor is entitled to forfeit a lease granted to the plaintiff as lessee of a parcel of vacant land in the City of Canberra for a failure to comply with a covenant in the lease. (at p541)
2. The lease in question was granted on 13th June 1962 for a term of ninety-nine years from that date. The lessee was to erect a residential hotel on the land and to use the land for the purposes of a residential hotel only. (at p541)
3. The lease contains (in cl. 1 (c)) a covenant in the following terms:
"The lessee covenants with the Commonwealth as follows: . . . . . . (c) That the lessee will within one year from the commencement of the said term or within such further time as may be approved in writing by the Commonwealth or the Minister on behalf of the Commonwealth for that purpose commence to erect one building only (with necessary and usual outbuildings and fences) on the said land at a cost not less than the sum of Two hundred and fifty thousand pounds and in accordance with plans and specifications prepared by the lessee and previously submitted to and approved in writing by the Commonwealth or the Minister on behalf of the Commonwealth. (d) That the lessee will within two years from the commencement of the said term or within such further time as may be approved in writing by the Commonwealth or the Minister on behalf of the Commonwealth complete the erection of the said building at a cost not less than the said sum of Two hundred and fifty thousand pounds and in accordance with the said plans and specifications and in accordance with every Statute Ordinance or Regulation applicable thereto." (at p542)
4. The rent payable under the lease was five hundred pounds per annum for the first twenty years of the term and, thereafter, an amount equal to five per cent per annum of the unimproved value of the land as determined from time to time by re-appraisement every twenty years. (at p542)
5. Clause 3 of the lease contains the following among other provisions:
"(a) That if - . . . . . . (ii) a building…
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
AGLC
Owendale Pty Ltd v Anthony [1967] HCA 52
Case
[1967] HCA 52
Decision Date
CaseChat Overview and Summary
Owendale Pty Ltd (the appellant) appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales concerning the interpretation of a lease agreement. The dispute centred on whether the appellant, as the lessee, was entitled to a renewal of the lease for a property located at 140-142 King Street, Sydney, despite having failed to give notice of its intention to renew within the time stipulated in the lease. The respondent, Anthony, was the lessor.
The High Court was required to determine whether the Supreme Court had erred in holding that the appellant was not entitled to a renewal of the lease. Specifically, the court had to consider the effect of the appellant's failure to comply with the express terms of the lease regarding the notice period for renewal, and whether equitable relief could be granted to the appellant in these circumstances.
The High Court, in dismissing the appeal, affirmed the principles governing the exercise of equitable jurisdiction to grant relief against forfeiture or for specific performance of a covenant to renew a lease. The court held that while equity may intervene to relieve a tenant from the consequences of a breach of covenant, such relief is generally not available where the breach is the failure to give notice within the stipulated time, as this is a condition precedent to the right to renewal. The court emphasised that the tenant's right to renewal was conditional upon strict compliance with the notice provisions, and that the lessor was not obligated to grant a renewal in the absence of such compliance.
The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.