Bendigo & Adelaide Bank Ltd v Best ALB Pty Ltd [2016] QDC 158

DISTRICT COURT OF QUEENSLAND CITATION: Bendigo & Adelaide Bank Ltd v Best ALB Pty Ltd [2016] QDC 158 PARTIES: BENDIGO & ADELAIDE BANK LTD (applicant) v BEST ALB PTY LTD (respondent) FILE NO/S: 1558/16 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 24 June 2016 DELIVERED AT: Brisbane HEARING DATE: 17 June 2016 JUDGE: Smith DCJA ORDER: 1. The applicant is to recover possession of the property described as Lot 33 on Crown plan B15817, title reference 10431046 situated at 77 Woondooma Street, Bundaberg in the state of Queensland. 2. I will hear the parties as to costs. CATCHWORDS: MORTGAGES AND RECEIVERS- Right of Mortgagee to possession- whether mortgagee consented to lease by mortgagors to tenant Land Title Act 1994 (Q) s66, 78 National Credit Code s88 Property Law Act 1974 (Q) s84 AMEV Finance Ltd v Canagon Engineering Pty Ltd Supreme Court NSW No 3835 of 1987 Young J 28 August 1987 Chatsworth Properties Ltd v Effiom [1971] 1 All ER 604 -- 1 of 12 -- 2 Commonwealth Bank of Australia v Baranyay [1993] 1 VR 589 Commonwealth Bank of Australia v Figgins Holdings Pty Ltd [1994] 2 VR 505 Lake Eerie Pty Ltd v Flair Realty Pty Ltd (1992) Q Conv R 54 – 420 National Australia Bank Limited v Dobbi & Ors [2015] QSC 243 Stroud Building Society v Delamont [1960] 1 WLR 431 at 436; [1960] 1 All ER 749 COUNSEL: Ms S. Anderson for the applicant Mr M. Long for the respondent SOLICITORS: K & L Gates for the applicant T.F. Wardrobe and co for the respondent Introduction [2] This is an application pursuant to s 78(2)(c)(i) of the Land Title Act 1994 (Q) for the respondent to deliver possession of 77 Woondooma Street, Bundaberg to the applicant, together with costs. Background [3] In essence, the applicant is the mortgagee of the property. The mortgagors (the Kirbys) breached the terms of the mortgage by becoming bankrupt and, further, by failing to pay monies due under the loan agreement. [4] The respondent alleges that it is entitled to possession of the property by reason of a lease it entered into with the mortgagors and the applicant has consented to the tenancy. [5] The applicant denies it has consented to the tenancy. [6] Estoppel is not relied on by the respondent1. [7] I also note that the director of the Respondent is also the brother in law of Mrs Kirby, one of the mortgagors.2 [8] The mortgagors also breached the terms of the mortgage by entering into the lease with the Respondent without the consent of the Applicant. Applicant’s case [9] Ian Dorey, solicitor for the applicant, has sworn an affidavit filed on 27 April 2016.3 In this affidavit he swears that the applicant is the mortgagee of the property. He 1 Transcript Day 1 pp 25-26. 2 Affidavit of Ian James Dorey, Document 2 at paragraph 40. 3 Document 2. -- 2 of 12 -- 3 swears that on 4 March 2015, under s 84 of the Property Law Act 1974 (Q), s 78 of the Land Title Act 1994 (Q) and s 88 of the National Credit Code, notices were sent to the mortgagors concerning the default on the loan. The default amounted to $27,981.09. [10] On 13 March 2015, Mrs Kirby emailed Mr Dorey enclosing a copy of a contract of sale of the property.4 The buyer was said to be WDMA Pty Ltd as trustee for the WDMA Family Trust. The purchase price was $540,000.00. Steven Greenwood is a director of both the respondent and WDMA Pty Ltd. [11] In the contract the tenancy to Best ALB Pty Ltd was noted. [12] On 27 March 2015,5 Mr Dorey wrote to Finemore Walters & Story, who were acting on behalf of Mrs Kirby, noting that the contract price was insufficient to pay out the debt owing to the Bank. It was noted “this letter does not amount to a waiver of the Bank’s rights, all of which are strictly reserved”. [13] On 31 March 2015,6 Ms Nowland, a legal secretary for Finemore Walters & Story, enclosed a copy of the amended contract. The purchase price was increased to $550,000.00. [14] On 2 April 2015, Ms Nowland wrote to Rebecca Wood of K & L Gates7 noting that the Kirbys would arrange for the transfer of funds to satisfy the matters of default by 4 April 2015. [15] On 21 April 2015, Ms Nowland, by email to Rebecca Wood at K & L Gates,8 advised that Mr Kirby had been declared bankrupt and “the buyer is the tenant of the property and will continue to pay rent into the loan account that will provide for the mortgage repayments due prior to settlement”. It can be seen then that the rent was, in effect, to be paid in satisfaction of continued mortgage payments. [16] Ms Wood on 21 April 2015, by email reply9 noted that Karen Kirby had also filed a debtors’ petition for bankruptcy and noted “this email is not to be construed as acceptance of the contract of sale by the Bank. All of the Bank’s rights are strictly reserved”. [17] Ms Nowland, by email dated 22 April 2015,10 noted that the buyer was committed to the contract. [18] On 27 April 2015, the trustee in bankruptcy advised Mr Dorey it had no objection to recovery of possession by the applicant. [19] On 28 April 2015,11 Mr Dorey wrote to Hal Ing of Finemore Walters & Story via email noting: “In order for us to provide an advice to the Bank can you please provide to us as a matter of urgency a copy of any tenancy agreement 4 Exhibit IJD-03 to affidavit of Ian Dorey filed 27 April 2016. 5 Exhibit IJD-05, p 24 to affidavit of Ian Dorey filed 27 April 2016. 6 Exhibit IJD-06, p 26 to affidavit of Ian Dorey filed 27 April 2016. 7 Exhibit IJD-07, p 32 to affidavit of Ian Dorey filed 27 April 2016. 8 Exhibit IJD-08, P 33 to affidavit of Ian Dorey filed 27 April 2016. 9 Exhibit IJD-09, p 34 to affidavit of Ian Dorey filed 27 April 2016. 10 Exhibit IJD-10, p 36 to affidavit of Ian Dorey filed 27 April 2016. 11 Exhibit IJD-11, p 38 to affidavit of Ian Dorey filed 27 April 2016. -- 3 of 12 -- 4 with Best ALB Pty Ltd referred to on the contract of sale of the property at 77 Woondooma Street. This is certainly not an acceptance of this agreement by the Bank and the Bank’s rights are reserved.” [20] Mr Ing from Finemore Walters & Story on 11 May 2015, via email12 said: “Dear Ian, attached is a copy of what I understand to be the lease relating to the property. Kirby expects that releases of the other encumbrances can be negotiated (for small pay outs) once the position of the bankruptcy is clear. Alternatively Kirby proposes that the transaction could be proceed by the buyer purchasing the mortgage held by your client.” [21] This enclosed a copy of the lease entered into between WDMA and the Kirbys. [22] On 2 June 2015, notices of demand was served by K & L Gates on Michael Kirby and Karen Kirby claiming $526,488.55 was owing.13 [23] On 15 June 2015, Mr Dorey emailed Mr Greenwood14 noting: “Steven, I act on behalf of Bendigo and Adelaide Bank Limited and I understand that Best ALB Pty Ltd has signed a lease with [the Kirbys] with respect to 77 Woondooma Street, Bundaberg. The Bank has a mortgage over the property. We are instructed that the Bank as mortgagee of the property has not consented to the lease. As a result the Bank therefore is not bound by it. Further as you know the Kirbys are now bankrupt and we have spoken to the Trustee in Bankruptcy of their bankrupt estates who has indicated that he is happy for the Bank to enter into possession of the property… as the Bank is not bound by the lease, the Bank is entitled to possession and has a better right than the Company… This email does not amount to a waiver of rights and all of the rights of the Bank are reserved.” [24] On 12 June 2015, the applicant appointed McCann and another as receivers. [25] Further, Mr Dorey, in an email to Mr Ing of Finemore Walters & Story on 15 June 2015,15 stated inter alia “as you may know, the Bank has not consented to any lease over the property and therefore it is not bound by the purported occupation by Best ALB Pty Ltd”. [26] On 18 June 2015, Mr Dorey by letter to Burns & Associates, now acting for the respondent,16 noted: “We note that there is purportedly a lease between the mortgagors and ALB with respect to the property. The Bank was not aware of this lease until 13 March 2015 when the mortgagors provided the Bank with a copy of a contract of sale between WDMA and the mortgagors. The Bank has not prior to this date or subsequently consented to the lease in writing or by conduct and is not bound by the lease. Further we are instructed that the Bank has not received 12 Exhibit IJD-14, p 46 to affidavit of Ian Dorey filed 27 April 2016. 13 Exhibit IJD-15, pp 75-80 to affidavit of Ian Dorey filed 27 April 2016. 14 Exhibit IJD-16, p 83 to affidavit of Ian Dorey filed 27 April 2016. 15 Exhibit IJD-17, p 84 to affidavit of Ian Dorey filed 27 April 2016. 16 Exhibit IJD-19, p 91 to affidavit of Ian Dorey filed 27 April 2016. -- 4 of 12 -- 5 into the loan account of the mortgagors the rental payments from ALB as alleged by Mr Greenwood. In any event even if such amounts were paid into the loan account by ALB this would have been at the direction of the mortgagors and does not amount to consent to the lease by the Bank. Any allegations that the Bank has consented to the lease between the mortgagors and the company will be strenuously refuted and defended… as the Bank has not consented to the lease it is therefore not bound by the lease. The Bank therefore has a better entitlement to the property than ALB and is entitled to possession. The Bank requires ALB to provide vacant possession of the property within seven days of the date of this letter. If ALB does not provide vacant possession by Thursday 25 June 2015 the Bank will take steps to obtain possession…” [27] In the interim details as to where the rent was paid were requested. [28] On 26 June 2015, Burns & Associates wrote to Mr Dorey17 noting that they act for Mr Greenwood and stating: “Our client has been operating a business on the premises for which our client has a lease. Our client recognises the rights of your client, however is concerned about damage to his business and upset to the public if his business were to suddenly close in order that he vacate the premises…. Our client proposes that your client and our client enter into a contract of sale under which our client purchases the property from your client on the following conditions: our client remains in possession and continues to operate the business on the premises… our client would continue to pay rent at the current rate of $3,505.00 per month including GST until the date of settlement… there shall be no legally binding agreement unless and until every party has executed the contract of sale documents… our client pays rent on the property at the rate of $3,505.00 including GST per month. Our client has paid rent up to the end of June 2015 and is in credit in the amount of $1,735.43 with respect to the July rent.” [29] Further, there is a letter from Mr Kidston (Burns and Co) to Mr Dorey dated 26 June 2015,18 which sent out details of rent paid between March 2015 and June 2015. [30] There is an email from Mr Dorey to Mr Kidston on 26 June 2015 at 2.09pm19 in which inter alia he stated: “I refer to your email with the attached letter. I will seek some instructions however one issue not addressed is into what account (and with what Bank) the rent is paid into? Can I please have those details urgently. This obviously does not amount to any consent to your client’s lease or occupation of the property at 77 Woondooma Street, Bundaberg… this email does not amount to a waiver of rights and all of the Bank’s rights and the receiver’s rights are reserved.” 17 Exhibit SG-5, p 32 to the affidavit of Steven Greenwood filed 26 May 2016- document 6. 18 Exhibit IJD-21, p 96 to affidavit of Ian Dorey filed 27 April 2016. 19 Exhibit IJD-21, p 97 to affidavit of Ian Dorey filed 27 April 2016. -- 5 of 12 -- 6 [31] Mr Dorey in his affidavit makes it clear that between June and October 2015 there were a number of telephone conversations between the parties relevant to the negotiation of the contract of sale. He says at paragraph 39 “throughout the negotiations I made no statements indicating that the applicant consents to the lease”. [32] On 8 October 2015, the applicant and WDMA Pty Ltd agreed on the terms of the sale. It was an essential condition of the contract that WDMA Pty Ltd would pay $20,000.00 by way of deposit. [33] On 30 October 2015, notices of exercise of power of sale pursuant to s 84 of the Property Law Act 1974 (Q) were sent to the bankrupts20 on the grounds that they had become bankrupts and that $557,000.00 was owed. [34] On 16 November 2015,21 Mr Dorey by letter to Burns & Associates noted: “In our letter of 18 June 2015 we advised that the Bank had not consented to the lease between the mortgagors and ALB and is therefore not bound by the lease. On that basis, the Bank has a better entitlement to the property than ALB and is entitled to possession. The Bank also requested that your client provide vacant possession of the property which your client failed to do. If the payment of the entire $20,000.00 deposit and evidence of the payment is not received by 4pm on Friday 20 November 2015, the Bank demands that your client provide vacant possession of the property by 9am on Monday 23 November 2015… This letter does not constitute a waiver of the Bank’s rights all of which are strictly reserved.” [35] On 20 November 2015, Mr Burns by email to Mr Dorey22 wrote concerning the deposit and asking for further latitude with respect to payment. [36] A contract was signed between the parties on 24 November 2015.23 The purchase price was $520,000.00; the deposit was $20,000.00 and it was subject to a tenancy to the respondent. The settlement was due on 25 January 2016. [37] In the contract in the section “tenancies” there is reference to the three year lease to Best ALB Pty Ltd. Further, a copy of the lease is annexed to the contract and paragraph 9 specifically refers to the fact that the property is sold subject to the tenancy. [38] Further correspondence attached to Mr Dorey’s affidavit relates to the attempts to settle the matter. [39] On 25 January 2016,24 K & L Gates wrote to Burns & Associates agreeing to an extension of the settlement date noting “the lessee will pay the seller the rent due for the month of February on the due date and rent will not be adjusted at settlement”. [40] On 1 February 2016, Ms Maxwell from K & L Gates wrote to Burns & Associates25 noting that when rent was deposited the settlement statement could be updated. 20 Exhibit IJD-22, pp 107-121 to affidavit of Ian Dorey filed 27 April 2016. 21 Exhibit IJD-23, p 122 to affidavit of Ian Dorey filed 27 April 2016. 22 Exhibit IJD-24, p 124 to affidavit of Ian Dorey filed 27 April 2016. 23 Exhibit IJD-25, P 125 to affidavit of Ian Dorey filed 27 April 2016. 24 Exhibit IJD-27, p 181 to affidavit of Ian Dorey filed 27 April 2016. -- 6 of 12 -- 7 [41] On 3 February 2016, Burns & Associates advised Ms Maxwell that rent had been paid on 2 February 2016.26 [42] On 8 February 2016, Burns & Associates wrote to K & L Gates advising that their client was not in a position to settle.27 [43] On 8 February 2016,28 K & L Gates wrote to Burns & Associates indicating there was no agreement as to an extension of the settlement date and on 9 February 2016, K & L Gates by letter29 noted that the Bank elected to terminate the contract. [44] The respondent’s solicitors changed to Jackson & Associates on 11 February 2016.30 Jackson & Associates alleged that the Bank had consented to the respondent’s occupation of the property on the terms set out in the lease. [45] On 17 February 2016, Mr Dorey by letter to Jackson & Associates stated inter alia: “We advise that the Bank has not consented to the lease between the mortgagors and your client and is therefore not bound by the lease. Throughout all dealings with the mortgagors, Mr Greenwood and the former solicitors for Best ALB, the Bank has maintained this position.” 31 [46] Mr Dorey says that rent payments have been received by the applicant into the loan account, but certainly not at the direction of the applicant. The applicant never consented to the lease. [47] A further affidavit of Mr Dorey filed 5 May 201632 notes that the respondent became deregistered but was reinstated on 18 April 2016. [48] Peter Steer, an officer with the applicant, has sworn an affidavit filed 27 April 2016.33 He is the manager of asset management employed by the applicant. He deposes that, on 18 January 2008, the applicant offered the mortgagors a home loan in the sum of $466,000.00. 34 [49] On 19 January 2008, the mortgage was executed and it was registered on 7 February 2008.35 [50] On 10 March 2008, the amount of the loan was varied to $520,000.00. [51] On 14 April 2015, the applicant was informed that Mr Kirby had become a bankrupt by way of debtors’ petition and, further, on 22 April 2015, the applicant received 25 Exhibit IJD-29, p 184 to affidavit of Ian Dorey filed 27 April 2016. 26 Exhibit IJD-31, p 189 to affidavit of Ian Dorey filed 27 April 2016. 27 Exhibit IJD-32, p 192 to affidavit of Ian Dorey filed 27 April 2016. 28 Exhibit IJD-33, p 194 to affidavit of Ian Dorey filed 27 April 2016. 29 Exhibit IJD-34, p 195 to affidavit of Ian Dorey filed 27 April 2016. 30 Exhibit IJD-35, p 196 to affidavit of Ian Dorey filed 27 April 2016. 31 Exhibit IJD-36, p 197 to affidavit of Ian Dorey filed 27 April 2016. 32 Affidavit of Ian Dorey filed 5 May 2016- Document 4. 33 Affidavit of Peter Steer filed 27 April 2016- Document 3. 34 The loan agreement is Exhibit PLS01, pages 1-59 of the affidavit of Peter Steer filed 27 April 2016- document 3. 35 The mortgage is Exhibit PLS03, pages 60-88 of the affidavit of Peter Steer filed 27 April 2016- document 3. -- 7 of 12 -- 8 notification that Mrs Kirby was bankrupt. This was default under clause 8.1(a)(iv) of the mortgage. [52] On 27 April 2015, the trustee in bankruptcy did not oppose the applicant recovering possession. On 2 June 2015, demands were sent claiming an amount of $526,488.55. [53] The applicant first became aware of the purported lease on 13 March 2015. At no time was there any consent by the applicant to this lease. In the circumstances, the mortgagors have breached clauses 8.1(a)(iii) and 5(e)(v) of the mortgage. [54] Mr Steer also gave oral evidence. In cross-examination he said that he was unsure if he had seen some of the exhibits before. He conceded that the respondent had made a number of payments to the Bank (see also SG13 of Document 8 page 3). He said that as at June 2015 the Bank knew that the respondent was paying rent to the Bank and the Bank never refused to accept these payments. He said that the Bank entered into a contract to sell the property. [55] In re-examination Mr Steer said the condition in the contract that it was subject to a tenancy was put forward by the purchaser. There was no one else in the Bank who would have consented to the lease. He did not direct that any payments be made by the tenants. Respondent’s case [56] Steven Greenwood has sworn an affidavit filed 26 May 2016.36 Mr Greenwood is a director of the respondent. He swears that on 2 January 2014, the respondent entered into a lease of the premises with the Kirbys for a term of three years with annual rent of $40,992.00 and two option periods.37 [57] He says that 15 June 2015 he received an email from Mr Dorey.38 This email noted that the Bank had not consented to the lease and did not consider itself bound by it. [58] He says that on 16 June 2015 he sent an email to Mr Dorey39 alleging that K & L Gates had been long aware of the tenancy and the Bank had been receiving rent payments. [59] On 18 June 2015 Mr Dorey in a letter to Burns & Associates40 pointed out the Bank was not aware of the lease until 13 March 2015 when the Mortgagors provided the Bank with a copy of the contract of sale and “The Bank has not prior to this date or subsequently consented to the lease in writing or by conduct and is not bound by the lease.” Mr Dorey stated that he was instructed that the Bank had not received rental payments into the loan account but even if they were paid this was at the direction of the mortgagors and does not amount to consent. The Bank required vacant possession. 36 Affidavit of Steven Greenwood filed 26 May 2016- Document 6. 37 A copy of the lease is SG1 to of the affidavit of Steven Greenwood filed 26 May 2016- document 6. 38 Exhibit SG2 to the Affidavit of Steven Greenwood filed 26 May 2016- document 6. 39 Exhibit SG3 to the Affidavit of Steven Greenwood filed 26 May 2016- document 6. 40 Exhibit SG4 to the Affidavit of Steven Greenwood filed 26 May 2016- document 6 -- 8 of 12 -- 9 [60] On 26 June 2015 SG5 was sent by Burns and Co to Mr Dorey which “recognised the rights of your client” and proposing a contract of sale. The letter also pointed out that the respondent was paying $3505.00 per month in rent. [61] Mr Greenwood then annexes the contract dated 24 November 2015 alleging that the lease was acknowledged by the applicant in the contract. [62] He then exhibits the letters dated 2 January 2016, 25 January 2016, 1 February 2016, 3 February 2016 and 8 February 2016 to which I have already referred. [63] He attaches a schedule of rental payments.41 This shows that payments were made from the respondent to the applicant from 31 July 2015 until 30 April 2016.42 [64] Mr Greenwood says that the business on the property (an accommodation business) is very busy and successful and the respondent intends to continue to pay rent. [65] In an affidavit filed 15 June 201643 Mr Greenwood annexes exhibit SG13 which sets out payments between July 2015 and June 2016. Submissions by the parties Submissions by the applicant [66] The applicant submits that there was no consent by the Bank to the lease. It submits: (a) There was no evidence that the Bank consented to the lease before it was executed; (b) Money has been paid into the loan account by the tenant not at the direction of the Bank but at the direction of the mortgagors; (c) The Bank has never consented to the lease and has persistently maintained in correspondence that it has not so consented; (d) The lease is not registered; (e) A registered mortgagee is not bound by a subsequent unregistered lease unless he or she consents to it; (f) The Bank is entitled to possession. Submission by the respondent [67] The respondent submits: (a) The originating application should be dismissed because the Bank has by its conduct consented to the lease; (b) Rent has been paid pursuant to the lease directly to the Bank on a number of occasions; (c) Mr Dorey referred to the “current tenant” in his email dated 16 November 2015; (d) The contract dated 24 November 2015 noted the existence of the lease in a number of locations; (e) The email dated 22 January 2016 refers to the tenant and the email from K & L Gates dated 25 January 2016 refers to the lessee; 41 Exhibit SG11, p 105 of the Affidavit of Steven Greenwood filed 26 May 2016- document 6. 42 There were also payments made before this. 43 Document 8. -- 9 of 12 -- 10 (f) The email from Ms Maxwell dated 1 February 2016 refers to rent payable under the lease; (g) On 2 February 2016 ALB made a payment of rent in the sum of $3,505.00; (h) Other correspondence in February points to the existence of consent to the lease; (i) Applying the applicable tests it may be determined in all of the circumstances that by its conduct the Bank has consented to and adopted the terms of the lease and, in the circumstances, the Bank is not entitled to possession of the property as against ALB. Relevant law [68] In Lake Eerie Pty Ltd v Flair Realty Pty Ltd44 McPherson JA stated at pp 3-4: “A registered mortgagee is not bound by a subsequent unregistered lease of the mortgaged property unless he consented to it.” [69] The respondent submitted that section 66 of the Land Title Act did not apply because the mortgage has not been registered. I lean towards the view that section 66 does apply because registration at some point may have been effected. [70] Regardless, the issue both at common law and under section 66 of the Land Title Act is whether it can be proved the mortgagee consented to the tenancy. [71] In AMEV Finance Ltd v Canagon Engineering Pty Ltd45 Young J of the New South Wales Supreme Court stated at p 3: “It is a question of fact as to what acts are sufficient for a tribunal to conclude that there has been such conduct on behalf of the mortgagee that he is to be considered to have consented to the grant of a lease between himself and the mortgagor’s tenant. Usually receipt of rent by a properly appointed receiver or by the mortgagee itself under authority is insufficient… but it may be in the appropriate circumstances that when one looks at everything the tribunal will hold that even though there is a receivership a tenancy has been granted (Stroud Building Society v Delamont).46 There Cross J said that the test was to look at the picture as a whole as a juryman and determine whether the mortgagee had consented to accept the tenant as tenant.” [72] In Stroud Building Society Cross J held that the mortgagee had given consent to accept the mortgagors’ tenant as his own. In that case the Society (the mortgagee) through its solicitors advised that the terms and conditions of the tenancy were the same as between the mortgagor and the tenant. At p 752.2 Cross J said: “The question and answer indicate that both parties thought that a new tenancy between the Society and Mrs Waller would result from her payment of rent. The matter is made still plainer by the words ‘which you hold as tenant of the Stroud Building Society’ in the notice served on July 1 1958…” 44 (1992) Q Conv R 54 – 420. 45 Supreme Court NSW Young J 28 August 1987. 46 [1960] 1 WLR 431 at 436; [1960] 1 All ER 749. -- 10 of 12 -- 11 [73] I consider that case to be different from the instant one. In this matter it is my view that the bank’s solicitors made it perfectly clear that the lease was not being consented to. Any reference to “lessee” and “tenant” in the later correspondence was in the context of contractual negotiations. [74] In National Australia Bank Limited v Dobbie & Ors47 Daubney J held that there was no consent because: “[18] At the highest what has happened here is that receivers and managers who are the agents of the first and second respondents have demanded rent. None of that, in my view, gives rise to any sort of estoppel against the Bank, nor is there any basis for concluding that the Bank consented to the lease at any time before or after the registration of the lease. In those circumstances s 66 prevails and the consequence is that the Bank is not prevented from obtaining an order for possession in respect of the Ballow Street property.” [75] In Commonwealth Bank of Australia v Figgins Holdings Pty Ltd48 Hayne J considered a submission that a Bank had consented to a variation in a lease that the effect of reducing rental to a nominal sum because it took no action when it became aware of the variation shortly after it was made. His Honour noted at p 511.35: “Figgins Holdings pointed to no positive act or statement on behalf of the Bank as constituting consent. Rather it was submitted that the Bank knowing of the transaction, its consent should be inferred from its silence. It was submitted that the Bank ‘could not stand by’ in those circumstances and later assert that it had not consented. Why it could not stand by was not explained in argument, counsel for Figgins Holdings expressly disclaim any reliance upon doctrines of estoppel. Indeed, that disclaimer was inevitable given that there was no evidence at all that Figgins Holdings had acted in any way in reliance upon any act or omission on the part of the Bank. In my view the Bank did not consent to the transaction. It knew something of it, but knowledge of a transaction falls far short of consent to it, and in the end all that Figgins Holdings was able to point to as evidence of consent was the bare fact of knowledge.” [76] Furthermore, in Commonwealth Bank of Australia v Baranyay49 Hayne J held that a tenancy by estoppel was not created by the mere fact of knowledge of occupancy or by receipt of rent by a receiver put in by the mortgagee. [77] The respondent also relied on Chatsworth Properties Ltd v Effiom50. In that case it was held that the mortgagee was precluded from denying it had accepted the defendant as their tenant because of its conduct. It was noted at p 606.b that the mere fact of the collection of rent would not of itself create a tenancy. In that case unlike the present one there appear not to have been letters clearly reserving rights. [78] At the end of the day each case does depend on its own facts. Disposition 47 [2015] QSC 243. 48 [1994] 2 VR 505. 49 [1993] 1 VR 589. 50 [1971] 1 All ER 604 -- 11 of 12 -- 12 [79] It is my respectful opinion that the respondent has failed to prove on the balance of probabilities that the Bank consented to this tenancy. I consider awareness to be a different issue to consent.51 [80] It is my view that, after considering all of the correspondence, the Bank continued to assert, through its solicitors, that it had not consented to this tenancy. The reference to the tenancy in the contract of sale dated 24 November 2015 and in subsequent letters should be understood in the context that there were negotiations between the parties to attempt to sell the property to the respondent. The mere fact that the tenancy was referred to in the contract and “rent” and associated terms were referred to in subsequent correspondence did not, in my view, alter the position that the Bank reserved its rights. The fact is it never consented to the lease at the start and only received rental payments because they had been paid into the Bank’s account by the respondent. It never requested rental payments, they were paid in by the respondent voluntarily. It made commercial sense for the applicant to allow the position to continue, particularly bearing in mind there were negotiations between the parties. [81] I particularly note the statement made by Burns & Associates in the letter dated 26 June 201552 in which it is said “Our client recognises the rights of your client”. [82] My view, on all of the material, is that there was no consent on the part of the applicant. [83] In those circumstances it is my opinion that the applicant is entitled to possession of the property. Orders [84] My orders are that: 1. The Bank recover possession of the property described as Lot 33 on Crown plan B15817, title reference 10431046 situated at 77 Woondooma Street, Bundaberg in the state of Queensland. 2. I will hear the parties as to costs. 51 See letter from Mr Greenwood SG 3 page 27 of the affidavit of Steven Greenwood filed 26 May 2016- document 6. 52 Exhibit SG 5 page 32 of the affidavit of Steven Greenwood filed 26 May 2016- document 6. -- 12 of 12 --