Moreton Bay Regional Council v Mekpine Pty Ltd

• Jurisdiction: Australia Federal only
• Judge: French CJ,Kiefel,Bell,Nettle JJ.,Gageler J.
• Judgment Date: 10 March 2016
• Neutral Citation: [2016] HCA 7
• Docket Number: B60/2015
• Date: 10 March 2016
• Court: High Court

[2016] HCA 7

HIGH COURT OF AUSTRALIA

French CJ, Kiefel, Bell, Gageler and Nettle JJ

B60/2015

Moreton Bay Regional Council

Appellant

and

Mekpine Pty Ltd

Respondent

Representation

D F Jackson QC with A N S Skoien for the appellant (instructed by Moreton Bay Regional Council)

G W Diehm QC with P D Hay for the respondent (instructed by Hillhouse Burrough McKeown Pty Ltd)

Acquisition of Land Act 1967 (Q), ss 2, 12(5).

Acts Interpretation Act 1954 (Q), s 36.

Land Title Act 1994 (Q), ss 12, 49, 49A, 50, 64, 65, 182, 183, 184, Sched 2.

Retail Shop Leases Act 1994 (Q), ss 3, 5, 6, 7(1), 8, 19, 20, 38(2), 40(1), Pt 3 Div 2, Schedule.

Moreton Bay Regional Council v Mekpine Pty Ltd

Real property — Resumption of land — Leases — Where registered lease expressed to confer interest over specified lot of land that was later amalgamated with adjacent lot — Where land previously part of adjacent lot resumed by local council — Whether lessee's interest extended to entire amalgamated lot upon registration of plan of subdivision under Land Title Act 1994 (Q) — Whether lessee had compensable interest in resumed land under Acquisition of Land Act 1967 (Q), s 12(5).

Real property — Leases — Retail leases — Construction and interpretation — Whether necessary to construe lease otherwise than in accordance with natural and ordinary effect of its terms.

Statutes — Interpretation — Function of definition clause — Whether definition of ‘Common Areas’ in retail shop lease inconsistent with definition of ‘common areas’ in Retail Shop Leases Act 1994 (Q), s 6.

Words and phrases — ‘common areas’, ‘interest in land’, ‘outgoings’, ‘plan of subdivision’, ‘registered lease’, ‘registration of an instrument’, ‘resumed land’, ‘retail shop lease’, ‘retail shopping centre’.

ORDER

• 1. Appeal allowed with costs.

• 2. Set aside orders 2 and 3 of the Court of Appeal of the Supreme Court of Queensland made on 2 December 2014, and in their place order that the appeal be dismissed with costs.

1 French CJ, Kiefel, Bell and Nettle JJ. This is an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland. The respondent (‘Mekpine’) was a tenant in a shopping centre. Mekpine's registered lease was expressed to be over certain premises on land described as ‘Lot 6 on RP 809722’ (‘former Lot 6’). The lessor subsequently registered a plan of subdivision under the Land Title Act 1994 (Q) (‘the LTA’) to amalgamate former Lot 6 and an adjacent lot (‘former Lot 1’ 1) to create a larger lot (‘new Lot 1’ 2). When part of the land, which was part of former Lot 1, was resumed by the appellant (‘the Council’), Mekpine claimed compensation under the Acquisition of Land Act 1967 (Q) (‘the ALA’).

2 The question in the appeal is whether Mekpine's rights under a lease of premises on former Lot 6 remained over that part of new Lot 1 which previously lay within former Lot 6 or whether they extended to the entirety of new Lot 1. For the reasons which follow, it should be concluded that Mekpine's interest in land remained confined to that part of new Lot 1 which previously lay within former Lot 6.

The facts

3 In March 1999, Mekpine entered into a 10 year retail lease (‘the Lease’) of a shop (‘the Premises’) within the Castle Hill Shopping Court in Murrumba Downs, Queensland (‘the Shopping Centre’) with options to renew. At that time, the Shopping Centre lay within the land comprised in former Lot 6.

4 The Premises were defined in Item 3 of the Schedule to the Lease as:

‘Shop 1 at Castle Hill Shopping Court, Corner Dohles Rocks Road and Ogg Road, Murrumba Downs, Queensland, 4503’.

The Schedule to the Lease included a diagram setting out the metes and bounds of the Premises and former Lot 6.

5 Clause 6.1 of the Lease conferred on Mekpine a right of exclusive possession of the Premises for the permitted use of operating a supermarket.

6 In addition, cl 6.8 of the Lease provided that Mekpine was entitled to use the ‘Common Areas’, in common with other tenants, as follows:

‘The Lessee and the Lessee's Employees may use the Common Areas but must obey all reasonable directions and rules given by the Lessor relating to their use. The Lessee must not obstruct the Common Areas or Car Park.’

7 ‘Common Areas’ were defined in cl 1.2 of the Lease as ‘those areas of the Building or the Land which have not been leased or licensed by the Lessor’. ‘Land’, which appears in the definition of ‘Common Areas’, was defined as ‘the lot described in Item 2 of the Form in this Lease’ and Item 2 of the Form referenced former Lot 6 as the relevant ‘Land’.

8 Clause 15 further provided, however, in broad terms, that the Lease did not give Mekpine any rights to the Common Areas other than those specifically provided for in the Lease, that the Common Areas were the property of the lessor and that the lessor retained a right to use, control, manage, alter, close or deal with the Common Areas as the lessor might deem appropriate.

9 The Lease was registered in the freehold land register kept under and for the purposes of the LTA on 25 January 2002.

10 Subsequently, the lessor acquired former Lot 1, which was adjacent to former Lot 6, and obtained planning approval to extend the Shopping Centre over former Lot 1 on condition that former Lot 1 be amalgamated with former Lot 6 and that the area which later became the resumed land be excluded from the proposed development and kept clear of permanent structures and improvements. In accordance with that approval, in 2007 former Lot 1 was amalgamated with former Lot 6 by registration of a plan of subdivision under Div 3 of Pt 4 of the LTA, thereby creating new Lot 1 (‘the Plan of Subdivision’). The Lease was endorsed on the Plan of Subdivision under the heading ‘EXISTING LEASE ALLOCATIONS’ and identified as an encumbrance on the title.

11 On 14 November 2008, the Council resumed a strip of vacant land from a corner of new Lot 1, being part of the land previously comprised in former Lot 1 (‘the Resumed Land’), to perform road works 3. The Resumed Land was never part of former Lot 6.

12 Mekpine then brought a claim for compensation under the ALA contending that, by reason of s 182 of the LTA, upon registration of the Plan of

Subdivision for the amalgamation of former Lot 1 with former Lot 6, Mekpine acquired an interest in new Lot 1 and thus in the Resumed Land.

Mekpine's claim

13 In order to be entitled to compensation under the ALA, Mekpine must have had an ‘interest’ in the Resumed Land.

14 Section 12(5) of the ALA relevantly provides:

‘On and from the date of the publication of the gazette resumption notice the land thereby taken shall be vested or become unallocated State land … and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act’.

15 ‘Land’ is defined in the ALA as ‘land, or any estate or interest in land, that is held in fee simple, including fee simple in trust under the Land Act 1994, but does not include a freeholding lease under that Act’ 4.

16 Although ‘interest in land’ is not defined in the ALA, s 36 of the Acts Interpretation Act 1954 (Q) (‘the AIA’) provides:

‘ interest, in relation to land or other property, means—

• (a) a legal or equitable estate in the land or other property; or

• (b) a right, power or privilege over, or in relation to, the land or other property.’

17 It has not been in dispute in these proceedings that Mekpine has a relevant interest in the land in former Lot 6 by virtue of the Lease. The principal question on the appeal is whether that interest extended to new Lot 1 on the registration of the Plan of Subdivision.

18 Mekpine's claim for compensation under the ALA had two alternative bases. First, it claimed that its interest in the Resumed Land for which it had a right to compensation arose from the registration of the Plan of Subdivision under s 182 of the LTA. It contended that, by necessary implication, ‘Land’ in the Lease refers to ‘new Lot 1’ and, therefore, that Mekpine had a right to use the

Common Areas in new Lot 1. In the alternative, Mekpine claimed that, pursuant to s 20 of the Retail Shop Leases Act 1994 (Q) (‘the RSLA’), the definition of Common Areas in the Lease was inconsistent with the definition of ‘common areas’ in the RSLA and, therefore, that the definition of ‘common areas’ in the RSLA had to be read into the Lease in place of the Lease definition of Common Areas.

The proceedings below

19 On 10 September 2012, the Land Court of Queensland 5 held that, as the parties had not amended the Lease, the Common Areas over which the lessee gained contractual rights pursuant to the Lease remained those within former Lot 6, not the extended Common Areas within new Lot 1. The Land Court nevertheless upheld Mekpine's claim for compensation on the basis that the definition of Common Areas in the Lease should be substituted by the definition of ‘common areas’ in the RSLA. The effect was that, once former Lot 1 became part of the Shopping Centre, the Common Areas for the purpose of the Lease extended to those parts of the common areas as defined by the RSLA as lay within new Lot 1. On that basis, the Land Court concluded that Mekpine had an interest in the nature of contractual rights over the parts of the common areas as defined in the RSLA that lay within former Lot 1.

20 The Land Appeal Court of Queensland allowed an appeal against the Land Court's judgment 6. It upheld the Land Court's conclusion that, despite the amalgamation of former Lot 1 with former Lot 6, Mekpine's interest as lessee under the Lease continued to be defined by the terms of the Lease and so remained confined to the land previously comprised in former Lot 6. But it reversed the Land Court's holding that the definition of ‘common...