Castle Co Pty Ltd trading as Redcliffe Hospital Courtyard Coffee Shop v State of Queensland [2014] QCAT 514
CITATION: Castle Co Pty Ltd trading as Redcliffe Hospital
Courtyard Coffee Shop v State of Queensland
[2014] QCAT 514
PARTIES: Castle Co Pty Ltd trading as Redcliffe Hospital
Courtyard Coffee Shop
(Applicant/Appellant)
v
State of Queensland
(Respondent)
APPLICATION NUMBER: RSL001-14
MATTER TYPE: Retail shop leases matters
HEARING DATE: 28 July 2014
HEARD AT: Brisbane
DECISION OF: Acting Senior Member Howard, Presiding
Member
Member McBryde
Member Judge
DELIVERED ON: 3 October 2014
DELIVERED AT: Brisbane
ORDERS MADE: 1. It is declared that there is not an
enforceable agreement to lease between
the parties.
2. The State of Queensland must file 4
copies in the Tribunal and serve 1 copy
on the applicant of its written
submissions about jurisdiction by 4pm
on 17 October 2014.
3. The applicant must file 4 copies in the
Tribunal and serve 1 copy on the State of
Queensland of its written submissions
about jurisdiction by 4pm on 31 October
2014.
4. Unless otherwise ordered, the Tribunal
will hear the question of whether it has
jurisdiction in relation to the dispute on
the papers without an oral hearing not
before 3 November 2014.
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CATCHWORDS: RETAIL SHOP LEASE – AGREEMENT TO
LEASE – whether parties have a valid and
enforceable agreement to lease – whether all
essential terms agreed
Acts Interpretation Act 1954 (Qld), s 32C
Property Law Act 1974 (Qld), s 11, s 59
Bradshaw v Henderson [201] QCA 008
Copperart Pty Ltd v Bayside Developments Pty
Ltd (1996) WAR 396
Masters v Cameron (1954) 91 CLR 353
NZI Insurance Australia Ltd v Baryzcka [2003]
85 SASR 497
Watson v Delaney (1991) 22 NSWLR 358
APPEARANCES and REPRESENTATION (if any):
APPLICANT: Mr Russell Mervyn Moles and Ms Gwendoline
Moles, directors of Castle Co Pty Ltd
represented the applicant.
RESPONDENT: Ms M. H. Hindman of Counsel instructed by
Crown Law represented the State of
Queensland.
REASONS FOR DECISION
[1] Castle Co Pty Ltd trading as Redcliffe Hospital Courtyard Coffee Shop
filed a Notice of Dispute seeking orders for specific performance of an
agreement to lease reached with the State of Queensland, or alternatively,
seeking orders for payment of a sum of money for loss and damage. The
State of Queensland denies that there is an enforceable agreement to
lease. It seeks in essence declarations that there is not an enforceable
agreement to lease and that QCAT does not have jurisdiction, as well as
its costs.
[2] At this stage, only the preliminary issue about whether there is an
enforceable agreement to lease is before us for determination. For the
reasons explained, we have concluded that although some agreement
was reached, it is not an enforceable agreement to lease.
Background and the alleged agreement to lease
[3] The events leading up to, and indeed after, the unenforceable agreement
are somewhat extraordinary.
[4] Castle Co has been operating a coffee shop at the leased premises since
the lease was assigned to it in late 2008. The lease expired on 28
February 2013. Under the terms of the lease, the lessor was obliged to
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3
give at least 6 months, but not more than one year, notice of its intention
either to offer a renewal or extension of the lease or informing the lessee
that it did not intend to make such an offer.1 It did not at any time comply
with its obligation to do so, despite reminders from Castle Co’s
representative of the requirement.
[5] However, on 31 January 2012, Mr Moles, a director of Castle Co, met
with, and provided to, a representative of the State of Queensland, Mr
Garry Tweedie, a proposal for the grant of a new lease to Castle Co dated
20 January 2012.2 Mr Tweedie was the Director of Corporate Services at
Redcliffe Hospital for 12 years before his retirement in August 2013. The
proposal included upgrading fitout. Mr Moles indicated that if required, he
would obtain conceptual sketches of the proposed upgrade to fitout.3 He
says that Mr Tweedie said this was not necessary and he was not at any
later time asked for them. Mr Tweedie recalls receiving the proposal, and
believes he indicated that it would be considered. He expresses some
concern about its vagueness (although does not suggest that he conveyed
any such concerns to Mr Moles). He asserts that he did not believe it
would be for him to negotiate a new lease.
[6] Mr Moles then, over an extended period of time, diligently followed up with
Mr Tweedie, in relation to the offer and the intentions of the State of
Queensland. He followed up with telephone calls, in meetings, and e-
mails.
[7] Between February 2012 and October 2012, Mr Moles says that Mr
Tweedie told him variously that, he expected a decision by the end of
May; that a decision was delayed because of the general election; that a
proposal would be made in September 2012; that he would follow up if he
heard nothing within a week; and in October 2012, that he had passed it
on to Property Management Services and that they would contact Castle
Co soon.
[8] Mr Tweedie confirms the latter, saying he had told Mr Moles ‘on several
occasions’ that he was not the decision-maker and that in due course it
would be transferred to Property Management Services.4 Broadly
speaking, Mr Tweedie otherwise generally acknowledges having told Mr
Moles from time to time that it was being looked at but does not indicate
by whom and it does not appear from the evidence that it was considered
by anyone over the February to October 2012 period. Mr Tweedie also
says that he made it clear that he was a point of contact only not the
decision-maker. We do not accept the latter for the reasons explained
below.
[9] In late October, Mr Moles contacted Property Management Services and
was informed that there was no record of information from Mr Tweedie.
1 Exhibit 1, page 46, Term 21.
2 Exhibit 1, paragraph 3 and pages 90 to 107.
3 Exhibit 1, paragraph 3.
4 Exhibit 3, paragraph 22.
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4
Later that day, a Mr Finn at Property Management Services told him that
he had to discuss the proposal with Mr Tweedie. Essentially, Mr Finn said
that all decisions about the lease were made by the hospital, that is, Mr
Tweedie and his hospital committee. Once they had been made, details
would be sent to Property Services to prepare the documentation.5
[10] Mr Tweedie apparently considered this an attempt by Mr Moles to ‘bypass’
him, and says it was intended that he would remain the initial point of
contact.6 The email correspondence between Mr Tweedie and Property
Management Services representatives7 makes it clear that Property
Management Services expected all contact about the lease to be with Mr
Tweedie’s office and that Mr Tweedie, when he finally approached them,
did so about lease documentation only.
[11] On 29 October 2012, in an email to Mr Tweedie, Mr Moles pointed out the
requirement under the lease for the State of Queensland to give notice to
the lessee of at least 6 months about its intentions.8
[12] Eventually, after more follow-up by Mr Moles, Mr Tweedie and Mr Moles
met again on 2 November 2012. Mr Tweedie proffered a letter to Mr Moles
from the Executive Director, Medical Services which referred to Castle
Co’s proposal for development of a new lease and ‘confirmed’ that Mr
Tweedie had been requested to ‘progress the preparation and
negotiations for a new lease in consultation with all parties.’9 Mr Moles
says that during this meeting Mr Tweedie asked whether Castle Co was
generally happy with the terms of the lease. Mr Moles said that he was. Mr
Moles says that Mr Tweedie proposed that the new lease should be on the
same terms except for the name of the lessee and the rent, saying that he
would engage a local valuer for a market rental assessment and a local
solicitor to prepare the lease document. Mr Moles agreed with all of these
proposals.
[13] Mr Tweedie generally agrees with this except to say that he asserts that
he told Mr Moles that someone else would negotiate the rent and finalise
the lease.10 This assertion appears inconsistent with a plain reading of the
letter provided, which advises Mr Moles that Mr Tweedie is to negotiate
the terms. It also appears to be generally inconsistent with the outline of
events as set out in a briefing note later prepared in response to Mr Moles
complaint to the Minister for Health.11
[14] Also, inconsistently, Mr Tweedie took numerous steps to progress the
lease and deal with the rent issue.12 In the days immediately after the
meeting, Mr Tweedie obtained a Revenue Agreement concerning the
5 Exhibit 2, paragraph 1.
6 Exhibit 3, paragraphs 24-26.
7 Exhibit 3, attachment GT6.
8 Exhibit 1, page 111.
9 Exhibit 1, paragraph 15-16 and page 113.
10 Exhibit 3, paragraph 27.
11 Exhibit 3, GT 15, especially paragraphs 10-11.
12 Exhibit 3, paragraphs 30-33.
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5
proposed lease from the Chief Executive of Metro North13 and provided a
work request form to Property Services for lease documentation.14 An
email from lawyers asked to prepare documents to Mr Finn in Property
Services (and copied to Mr Tweedie) refers to the lawyers being told by Mr
Finn that Mr Tweedie was consulting with Knight Frank concerning market
rent.15 An email trail, including email from Mr Finn, confirms he made the
assertion.16 Also, Mr Tweedie’s email to Mr Moles on 27 November says
that he was awaiting market assessment.17
[15] While saying that he thinks Property Management Services suggested it,
Mr Tweedie acknowledges that he did approach Knight Frank for a market
rental assessment but Knight Frank indicated that as there were no
market comparatives, it would not be a useful exercise.18 This
documentation trail and Mr Tweedie’s actions in contacting Knight Frank
tends to support Mr Moles version of events, as does the draft
Amendment to Lease document containing the terms which Mr Moles says
were agreed at the meeting and prepared after the meeting at Mr
Tweedie’s request.19 Therefore, we accept Mr Moles evidence about what
happened at the meeting of 2 November.
[16] Thereafter, Mr Moles regularly followed up on progress. On 27 November,
Mr Tweedie advised him by email20 that he had received the draft lease
and was awaiting market rental assessment, saying that he would arrange
a further meeting with Mr Moles once he received the market rental
assessment. The draft lease highlighted the need for 2 items to be dealt
with: namely, rent and, although an option had not at that point been
proposed by Mr Moles or discussed, the type of rent review if the option
was exercised.21 The only reference, at this point, to an option (of 5 years)
had been made by Mr Tweedie in the Revenue Agreement.
[17] Then on 12 December 2012, Mr Tweedie sent an email to Mr Moles
advising that the ‘final component’ of the lease would need to be finalised
early the following year. On 14 January 2013, Mr Moles emailed
requesting an update. A meeting was arranged by Mr Tweedie for 24
January 2013.
[18] At that meeting, Mr Moles says that Mr Tweedie proposed that the new
lease rental at $40,841.01 for the first year and that the lease be for 5
years with an option for a further 5 years. Mr Moles says he agreed to
these terms. Mr Tweedie said he would email the draft lease which he said
was ‘90%’ complete after the meeting. Mr Moles says that although there
was no specific discussion about the rent review in respect of the option,
13 Exhibit 3, pages 15-17 dated 5 November 2012.
14 Exhbit 3, pages 18020.
15 Exhibit 3, page 21.
16 Exhibit 3, page 9.
17 Exhibit 1, page 114.
18 Exhibit 3, paragraph 33.
19 Exhibit 3, paragraphs 31-35 and GT 9.
20 Exhibit 1, paragraph 18 and page 114.
21 Exhibit 3, paragraph 35 and GT9.
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6
that he expected the same mechanism for rent increase during the lease
term to be used, that is, 5% increase.22 Also, during the meeting Mr
Tweedie gave him a tax invoice for $17,870.07 for rent arrears,23 accrued
because the annual increases provided for in the existing lease document
had never been invoiced as the lease term progressed. The calculation
sheet refers to the new annual rental rate at 1 March 2013 of $40,841.01.
[19] Mr Moles says that he did not understand from his negotiations with Mr
Tweedie that the negotiations were subject to a new lease being signed,
although a new lease was of course to be signed embodying the terms
agreed.
[20] Once again Mr Tweedie has a different version of events. In his affidavit,
he says he impressed on Mr Moles that someone else would be
negotiating final terms and that the starting point for minimum rent would
be the $40,841.01 being the rent if increased in accordance with the
current terms. He further says he does not recall discussing rent on the
exercise of the option term. He denies any verbal agreement for a new
lease.24 Under cross-examination, however, he said somewhat
inconsistently that he ‘would have inferred’ that someone else would be
negotiating the final terms. He further said that the reference to annual
rent of $40,481.01 on the calculations sheet was only the rent to apply
while continuing to negotiate rent, although he was equivocal as to
whether he had advised Mr Moles that he had not expected the lease to
be completed by 28 February.
[21] Ultimately, we accept Mr Moles version of events. Firstly, clause 3.2 of the
existing lease provided for the same rent as applied in the final year for
any holding over period. Therefore, it seems inherently unlikely that Mr
Moles would have agreed to pay more for holding over than the lease
required. Secondly, it is, once again, more consistent with the events
which followed. In particular, although Mr Moles then followed up
requesting the draft lease documentation, he did not follow up about rent.
Given his overall diligence in endeavouring to progress this lease
extension or renewal, we accept that he understood all matters to have
been agreed at the conclusion of the 24 January 2013 meeting.
[22] Also, Mr Tweedie went into the meeting knowing because of Knight
Frank’s advice that a market rent assessment was not a feasible
mechanism to set rent. He arranged the meeting and went into it having
had the opportunity to consider alternative bases for proposing the
commencing rent in circumstances when the end date of the existing
lease was imminent. With this background in mind, the calculation notes
appear, consistent with Mr Moles version, to advance an alternative basis
for the proposed commencing rent for a renewal or extension. Further, Mr
Tweedie’s equivocation about whether he articulated that the agreement
was unlikely to be finalised by 28 February 2013, casts doubt on his
22 Exhibit 2, paragraph 6.
23 Exhibit 1, paragraph 24-24 and pages 117-118.
24 Exhibit 3, paragraph 40-41.
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version as does the contents of the briefing note prepared in early August
which is discussed in later paragraphs.
[23] In any event, if he considered rent was still to be negotiated, Mr Tweedie
might have been expected to respond to Mr Moles request for the lease
document by pointing out, as he had previously that, that it could not yet
be completed until matter/s were agreed. He did not.
[24] On 28 January 2013, Mr Moles emailed advising that he had not received
the draft lease and requesting it so that ‘due diligence’ could be done.25 Mr
Moles does not have a legal background. He says that he meant
reviewing the lease, making sure the lease terms were as agreed and that
the names were correct. As our previous findings indicate, we are satisfied
that he is an accurate and truthful witness generally. There is no basis to
reject his evidence about this point and we accept it.
[25] On 22 February 2013, on the request of Mr Tweedie, Mr Moles and Mr
Tweedie met. At this meeting, Mr Moles says Mr Tweedie advised him that
the new lease had been taken out of his hands, was now with ‘Metro
North’, and that someone would contact him the following week. He said
that he expected Metro North would probably rubber stamp his work and
complete the lease. Mr Tweedie denies the latter. He says, although it
does not seem to be suggested that it was communicated to Mr Moles,
that he had been requested to cease ‘negotiations’ until a further review
was done. He apparently had some concerns and sought some legal
advice26 although he did not, in doing so, disclose the state of the
negotiations to the lawyer whose advice he sought.
[26] Nobody from Metro North did contact Mr Moles the following week. On the
final day of the lease 28 February 2013, he made contact with a Mr Don
Bambry who told him that he intended to review the operation of the shop
and requested to inspect it on 1 March 2013. During the inspection, Mr
Moles pointed out that a new lease had already been agreed upon
between him and Mr Tweedie, and also gave him a letter attaching some
documents. Mr Bambry told Mr Moles that he was now in charge not Mr
Tweedie. He said that another review would be done within a week.
[27] There was no advice to Mr Moles within a week. Mr Moles emailed Mr
Bambry on 11 March, to be told in response that there was ‘no news yet’
because of other decisions being made at Metro North. On 1 May 2013,
Mr Moles telephoned Mr Bambry. At this stage, Mr Bambry told him that a
decision would be made by 30 June 2013. He followed up with Mr Bambry
again on 1 July, to be told that there had been no decision as yet.
[28] On 9 July 2013, Mr Bambry and his assistant arrived unannounced at the
coffee shop premises and asked to take photographs, which Mr Moles
agreed to allow. They also re-inspected, discussed ownership of the
equipment on the premises and possible cost of a refit. Mr Bambry said he
25 Exhibit 1, paragraph 26, and page 119.
26 Exhibit 3, paragraph 46 and GT 11.
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would then update Mr Moles on a weekly basis. This did not happen. On
24 July 2013, Mr Moles telephoned him for an update, and was advised
that a decision would be made by the end of July 2013.
[29] Having received no further advice from Mr Bambry, Mr Moles
endeavoured to contact him on 1 August 2013. The call was returned on 2
August, when Mr Bambry advised that there was no news, as he had yet
to obtain some further advice. Subsequently, Mr Bambry advised on 16
August and 6 September that there was no news. On 14 October 2013, Mr
Bambry advised that Castle Co may receive correspondence that week.
[30] Eventually, on 29 October 2013, Castle Co did receive correspondence
from the Director Commercial Activities from Metro North. It was advised,
amongst other things, that there was no intention to offer Castle Co a
renewal or extension of its lease; that it was proposing to seek offers to
operate the premises by way of public tender; and that Castle Co must
vacate the premises by 28 April 2014. Mr Moles telephoned Mr Bambry to
enquire why, and was told ‘it was nothing except that Castle Co did not
give full details of the proposed refurbishment.’27
[31] In the meantime, at the end of March 2013, Mr Moles had made a formal
complaint to the Minister for Health about what was termed the ‘misleading
and unconscionable conduct of Metro North’ relating to the events that
had transpired. Consistently with Mr Moles evidence, it asserts that Mr
Tweedie had advised that a new lease was to be prepared on the basis of
a 5 year term and 5 year option.
[32] The State of Queensland submits that the fact that he does not in the
correspondence refer to the new agreed rental amount, or specifically
assert that there is a binding agreement, is significant. However, Mr Moles
is not a lawyer and had taken no legal advice at that point. We are
satisfied that he used words in the sense that a lay person does. Mr Moles
received some correspondence from various persons at Queensland
Health from time to time concerning his complaint. There are various
documents relating to this complaint in evidence, including a briefing note
to the Minister for Health.
[33] Mr Tweedie deposes in his affidavit filed in the proceedings to having
prepared the briefing note to the Director-General dated 5 August 2013.28
The briefing note includes a statement that at the meeting on 24 January
2013, ‘Mr Moles was given verbal advice that the new rental offer would
be $41,000 per year’ for the first year.29 Mr Tweedie further deposes to
this statement being inaccurate and says that events were as he now sets
out.30
[34] In evidence at the hearing, Mr Tweedie asserted that in fact he had not
prepared the briefing note, that it was prepared on his behalf. Mr
27 Exhibit 1, paragraph 54.
28 Exhibit 3, paragraph 49.
29 Exhibit 3, GT15, paragraph 11.
30 Exhibit 3, paragraph 49.
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Tweedie’s significant recanting negatively affects his credibility and the
weight to be attached to his statements about this. Further, the briefing
note could only have been prepared on his instructions as he was the only
person other than Mr Moles at the meeting on 24 January 2013. We
conclude that he therefore gave the instructions as to the making of the
rental offer. We ultimately consider that the briefing note as prepared in
the months following the meeting with Mr Moles is more consistent with
the events than Mr Tweedie’s most recent version of events.
Is the agreement to lease enforceable at law?
[35] There are three requirements for an enforceable agreement to lease.
[36] Firstly, the agreement to lease must be sufficiently certain as concerns the
essential terms, in that it identifies the parties to the agreement; the
premises concerned; the rent or how it is to be ascertained, if any;31 the
date of commencement and duration of the term;32 and any rent review
process.33
[37] Secondly, there must be an intention of the parties to be bound. The High
Court has held that there are three classes of agreement where parties
have reached a negotiated contractual agreement and it is to be
formalised.34 In some circumstances, the parties have reached agreement
about all terms of the bargain and intend to be bound immediately, but
propose to reduce the terms to a final document which will be fuller and
more precise, although not different in effect. In other circumstances, the
parties have completely agreed upon all terms of their bargain and do not
intend to add or depart from them, but nevertheless make performance
conditional upon execution of a formal document. The final class is where
the intention is not to make a concluded agreement until and unless a
formal document is executed.
[38] Finally, there must be some writing which satisfies s 11 and s 59 of the
Property Law Act 1974 (Qld) or alternatively, sufficient acts of part-
performance.35
Are the terms certain?
[39] Having regard to the factual findings made by us, we are satisfied that at
the meetings on 2 November 2012 and 24 January 2013, agreement was
reached between Mr Moles as director of Castle Co and Mr Tweedie as
the authorised representative of the State of Queensland that a further
lease term was granted as follows:
31 Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) WAR 396, at 408 relying
upon Whitlock v Brew (1968) 118 CLR 445 at 454.
32 NZI Insurance Australia Ltd v Baryzcka [2003] 85 SASR 497 at 506.
33 Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) WAR 396, at 408; NZI
Insurance Australia Ltd v Baryzcka [2003] 85 SASR 497 at 506.
34 Masters v Cameron (1954) 91 CLR 353, at 360.
35 Watson v Delaney (1991) 22 NSWLR 358 at 366.
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(a) For a term of 5 years with an option for a further 5 years;
(b) Commencing from 1 March 2013;
(c) At a starting rental of $40,821.01;
(d) Annual rental increases of 5% for the remaining years of the lease
term; and
(e) Otherwise, (except in relation to the rent payable during the option
which is discussed below) on the same terms and conditions as the
previous lease.
[40] The only real issue outstanding is whether there was agreement about the
starting rent for the option period. This requires discussion.
[41] Mr Moles says there was no specific discussion about the rent review in
respect of the option. However, he expected it to be on the basis of 5%
increase on the rent payable for the last term of the lease. In other words,
he understood that all future annual increases in rent were to be 5%
increases over and above the rental paid in the previous year.
[42] In November 2012, Mr Tweedie had intended to obtain an assessment of
market rental. When he took steps to do so, he was told by the valuers
whom he approached that this was a pointless exercise due to a lack of
comparatives. We have accepted that he then instead proposed that the
first year of the new lease be at an increase of 5% above the final year of
the expiring term. All subsequent increases during the term were agreed
at 5% because the existing lease provided for them and those same terms
were to continue according to the agreement reached.
[43] The lawyers who had prepared the draft documentation had postulated
market rent or CPI for the option period. Market rent had been ruled out by
Mr Tweedie as a possible option, given the valuers’ advice to him. CPI
was not discussed.
[44] A 5% increase over and above the last year of the lease term, for the first
year of the option period is consistent with the annual increases and the
terms of the lease. This is the apparent basis for Mr Moles expectation
about a 5% increase for the first year of the option term. However, he
does not point to anything said, or discussed, which gave him this view,
only that it was his expectation because all other increases were to be 5%
over and above the rental for the previous year. Mr Moles says no more
than that it was his expectation, even though in the circumstances, it
appears that it may have been an apparently reasonable one.
[45] The law is clear. There is no basis for a court (or, by analogy, a tribunal) to
determine how an annual rent review (or by analogy, rent increase/review
on exercise of an option) should be made.36 It can not be said here, that
the parties had agreement about the mechanism for rent increase/review
36 NZI Insurance Australia Ltd v Baryzcka [2003] 85 SASR 497 at 506-507.
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on exercise of the option. That being the case, we conclude that there is
not certainty about the essential terms agreed.
[46] Therefore, there is not an enforceable agreement to lease.
Orders
[47] Having come to this conclusion, we make orders declaring that there is no
enforceable agreement to lease.
[48] In the event that we reached this conclusion, the State of Queensland in
its written submissions handed up at the hearing seeks orders declaring
that QCAT does not have jurisdiction. Jurisdiction was not listed for
hearing as part of this preliminary hearing and has not been addressed in
Castle Co’s written submissions also handed up at the hearing. Castle Co
is entitled to be heard on the issue.
[49] We direct the State of Queensland to file and serve its written submissions
about jurisdiction within 14 days. We also direct Castle Co to file and
serve its written submissions about jurisdiction of the Tribunal in light of
our declaration within 35 days of these orders. Unless otherwise ordered,
the question whether the Tribunal has jurisdiction will be heard on the
papers without an oral hearing.
Observations
[50] Having reached these conclusions, we do not need to decide the two
other issues. However, in case we are wrong (and our decision is
appealed) about whether the terms are certain, we make the following
observations.
Did the parties intend to be bound? If so, which Masters v Cameron class does
it fall into?
[51] Castle Co submits that the agreement here falls into the first of the classes
identified by the High Court in Masters v Cameron and that therefore the
agreement reached was binding from 24 January 2013 when the final
outstanding matters were agreed. The State of Queensland submits that it
falls into the third class.
[52] The intention of the parties must be objectively ascertained. If all terms are
certain, we would accept that the agreement falls into the first class
identified in Masters v Cameron. We would be satisfied that the parties
intended to be bound immediately.
[53] Mr Tweedie was able to reach a binding agreement on behalf of the State
of Queensland. The letter of the Executive Director, Medical Services,
confirmed his authority. We have rejected his evidence that some other
person would finalise the lease, other than that someone else would
prepare the documentation to embody the agreement reached. The terms
agreed differed in only minor respects from the existing lease terms, and
were not to be different, except in those minor respects discussed.
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12
[54] There is no evidence which suggests that the parties intended to make
their agreement conditional upon the execution of a formal agreement
once agreement had been reached, although the agreement was to be
recorded in writing.
Writing or part-performance?
[55] Castle Co does not allege that there has been part-performance.
[56] The Property Law Act 1974 (Qld) provides relevantly that:
(a) an interest in land can be created only by writing signed by the
person creating or conveying it, or the person’s agent lawfully
authorised in writing;37 and
(b) that any contract for the disposition of land or any interest in it is
unenforceable unless there is ‘some written memorandum or note of
the contract,’ which ‘is in writing,’ and signed by the person to be
charged or some person lawfully authorised.38
[57] Castle Co submits that the Revenue Agreement (which contains the terms
except the rental amounts) signed by the Chief Executive on 5 December
2012 and the calculation sheet (although that document is not signed)
which records the commencing rental for the first year are adequate.
Alternatively, it argues that the (signed) briefing note, which sets out the
rental, in combination with the Revenue Agreement, are adequate writing.
[58] The State of Queensland submits that the documents relied upon are not
relevant, because none of them contains a complete note and, in respect
of the briefing note, it was prepared for an entirely different purpose.
[59] The Acts Interpretation Act 1954 (Qld) provides that words in the singular
(in this case, memorandum or note) include the plural: s32C. We would
conclude therefore that multiple documents may be adequate to satisfy
the requirement for writing. We observe also that in other circumstances,
multiple documents have been found to be adequate.39
[60] Does it matter whether the documents which evidence the agreement
were produced for the purpose of evidencing the agreement or some other
purpose? We were not referred to any relevant authorities. The Revenue
Agreement identifies the land to be subject to the lease, the parties, the
start and end dates, the option period, most of the terms (in terms, ‘as per
present lease’), but not the rent, which is ‘to be reviewed.’ It is signed by
Professor Keith McColl, Chief Executive, Metro North & Health Hospital
37 Property Law Act 1974, s 11(1)(a).
38 Property Law Act 1974, s 59.
39 When considering proposed appeal grounds including that a cheque from a purchaser
and a receipt from a vendor was insufficient to constitute a memorandum or note in
writing sufficient for s 11 and 59, the Court of Appeal of the Supreme Court of
Queensland (although considering there was doubt about whether the sale of marina
berth was an interest in land) did not criticise the finding that multiple documents may
be sufficient: Bradshaw v Henderson [201] QCA 008, at paragraphs [6-7and 21-28].
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13
Service. He is not the agent nominated for the Health Service in the letter
provided to Mr Moles. That said, despite the authorisation given to Mr
Tweedie in the earlier letter, the Revenue Agreement states that for
leases, the approval of the Chief Executive or equivalent to the proposed
terms was required. The terms of the letter suggest that it had earlier been
given, but in any event, the Revenue Agreement confirms that his
approval was given. There is no doubt that as Chief Executive of Metro
North, he was able to bind the State of Queensland and did in fact give his
authorisation.
[61] The calculation sheet is not signed. However, the briefing note, although
created for a different purpose is signed by Dr Tony O’Connell, the then
Director-General of the Department of Health. As its chief executive, he
clearly had authority to bind the Department. On its face, it confirms the
unsigned calculation sheet and Mr Moles assertions about the agreement
as to rental amount for the first year of the lease period.
[62] If we were satisfied that the essential terms of the agreement to lease
were certain, we would have accepted the combination of these
documents may be sufficient memorandum or note of the contract, signed
by duly authorised persons on behalf of the State of Queensland if the
essential terms were contained in them. However, there is no reference to
the rental for the first year of the option term. This is an essential term of
the agreement, and therefore, we would not be satisfied that the relevant
provisions of the Property Law Act 1974 were satisfied.
[63] Therefore, we would, in any event, have found the agreement to lease
unenforceable for lack of adequate writing.
-- 13 of 13 --
Official source: https://www.sclqld.org.au/caselaw/QCAT/2014/514