Archos, Re [1992] QSC 306 [1994] 1 Qd R 223

State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION THOMAS J - .REVISED COPiES ISSUED State Fieprt:ng Bureau Date· (~ OS No 824 of 1992 ( IN THE MATTER OF The Property Law Act 1974 IN THE MATTER OF a lease between MERVYN ARISTOTLE ARCHOS as Lessor and Q M INDUSTRIES PTY LIMITED as Lessee BRISBANE .. DATE 27/08/92 ORDER 1 -- 1 of 8 -- 270892 HIS HONOUR: This is a construction summons concerning the meaning of a lease between a lessor and lessee with respect to commercial premises at Buranda. The applicant is Mr Archos who is the lessor. The lessee is bound by clause l(m) of the lease to use the premises for a·specified use relating to computers and related matters. The relevant part of that 10 covenant states: "That the lessee will at all times during the said term occupy and use the demised· premises as a computer output to microfiche bureau and computer forms plant and also for the sale of computers, printers, software and visual displayunits and\microfiche viewing machinery and will not carry on or permit or suffer to be carried on upon the demised premises any other business without20 ( the consent in writing of the lessor first had and obtained " The lessee is desirous of granting a sub-lease to another occupant who would wish to. use the premises for the sale and fitting of 4-wheel drive accessories. The lessor has refused . to agree to a sub-lease for such a use. 30 I am not directly concerned with the question whether the lessor has unreasonably withheld consent to the grant of a sub-lease under covenant l(d) which provides that such consent is not unreasonably to be withheld. 40 The issue before me has been formulated in a letter on behalf of the respondent dated 6 August 1992 which includes the following: "Obviously the application in relation to changes of user must be treated as an application by our client for change of user under its existing head lease the consen~ of your client is required (clause l(m) of the lease)." Th.:tt is the way in which the parties have placed the issue before me. Clause·· rl'im) , contemplates ·that> t:onsent may be requested and th,at c,onsent may be refused. It has. no .. express requirement that consent not be unreasonably withheld~. The question is 2 ORDER 60 ( ( ~ ' c -- 2 of 8 -- (' ( ' (. 27G892 whether there is any implied requirement to that effect. In similar circumstances with respect to a clause that is in substance indistinguishable from the present clause l(m), the New South Wales Court of Appeal has held that there is no requirement of reasonableness to be implied in the decision ""'hich is taken in this respect by the lessor. (Barina 10 Properties Pty Ltd v.Bernard Hastie (Australia) Pty Ltd (1979) 1 NSWLR,. 480, 486- 487.) This .with English authority:. ·It is ajJ. so . to -be , no:t~d :- that whilst s 121(1) of the Property Law Act makes certain ~ . . _.. . ....:."'"". ···-~·-- . provisions in relation to the unreasonable withholding of 20 consents with respect to assignments and under-leases, thereis a sig~Lhc~tLy limited provision with respect to covenants and conditions concerning the user of premises. This is contained in s 121 (3) } which relevantly provides that in all leases containing a covenant against alteration of the user of the 30 leased premises without consent such covenant shall be subject to a proviso "that no fine or sum of money· ... shall be payable for or in -respect of the licence or consent~·~- Thus the Legislature has not seen fit to legislate against the unreasonable withholding of consents to changes of use of 40 premises where the parties have agreed to a limitation of the user. The authorities point in only one direction, and I have·no hesitation in acceding to the declaration sought by the lessor. It will be50 sufficient if I declare that on the proper construction of the lease dated 25 May 1984 between the applicant Arches ahd the respondent Q M Indu~tries Pty Li~ited, there ·~s no implication in clause 1(m) that the consent in writing ORDER 60 3 -- 3 of 8 -- r . \ 270892 referred to therein may not unreasonably be withheld. The respondent will be ordered to pay the applicant 1 S costs of the application to be taxed. 10 20 30 40 50 ORDER 4 60 r, !, c ( \_, -- 4 of 8 -- ( ) ( I \ ' IN THE SUPREME COURT OF QUEENSLAND IN CHAMBERS o.s. No. 824 of 1992 IN THE MATTER OF The Property Law Act 1974 - and - MATTER OF a lease MERVYN ARISTOTLE Lessor and Q.M. PTY. LIMITED as IN THE between ARCHOS as INDUSTRIES Lessee EXTEMPORE REASONS - THOMAS J. Delivered the 27th day of August, 1992 CATCHWORDS: Counsel: Solicitors: Leases - prescribed use of premises - covenant against change of use without lessor's consent - lessee intending to sublease to sublessee who would use premises for different use no implication that consent may not unreasonably be withheld. G.C. Martin for the applicant D.L. O'Connor for the respondent Francis & McGregor for the applicant McCullough Robertson for the respondent Hearing date: 27th August, 1992 -- 5 of 8 -- c··~ ( ) IN THE SUPREME COURT OF QUEENSLAND IN CHAMBERS o.s. No. 824 of 1992 IN THE MATTER OF The Property Law Act 1974 - and- IN THE MATTER OF a lease between MERVYN ARISTOTLE ARCHOS as Lessor and Q. M. INDUSTRIES PTY. LIMITED as Lessee EXTEMPORE REASONS - THOMAS J. Delivered the 27th day of August, 1992 This is a construction summons concerning the meaning of a lease between a lessor and lessee with respect to commercial premises at Buranda. The applicant is Mr. Archos who is the lessor. The lessee is bound by clause 1(m) of the lease to use the premises for a specified use relating to computers and related matters. The relevant part of that covenant states: "That the lessee will at all times during the said term occupy and use the demised premises as a computer output to microfiche bureau and computer forms plant and also for the sale of computers, printers, software and visual display units and microfiche viewing machinery and will not carry on or permit or suffer to be carried on upon the demised premises any other business without the consent in writing of the lessor first had and obtained " The lessee is desirous of granting a sub-lease to another occupant who would wish to use the premises for the sale and fitting of 4-wheel drive accessories. The lessor has refused to agree to a sub-lease for such a use. I am not directly concerned with the question whether the lessor has unreasonably withheld consent to the grant of a sub- -- 6 of 8 -- 2 lease under covenant 1 (d) which provides that such consent is not unreasonably to be withheld. The issue before me has been formulated in a letter on behalf of the respondent dated 6th August, 1992 which includes the following: "Obviously the application in relation to changes of user must be treated as an application by our client for change of user under its existing head lease the consent of your client is required (clause 1(m) of the lease)." That is the way in which the parties have placed the issue before me. Clause 1 (m) contemplates that consent may be requested and that consent may be refused. It has no express requirement that consent not be unreasonably withheld. The question is whether there is any implied requirement to that effect. In similar circumstances with respect to a clause that is in substance indistinguishable from the present clause 1(m), the New South Wales Court of Appeal has held that there is no requirement of reasonableness to be implied in the decision which is taken in this respect by the lessor. (Barina Properties Pty. Ltd. v. Bernard Hastie (Australia) Pty. Ltd. (1979) 1 N.S.W.L.R., 480, 486-487.) This is consistent with English authority. It (., ,_ _) is also to be noted that whilst s. 121 ( 1) of the Property Law Act (J makes certain provisions in relation to the unreasonable withholding of consents with respect to assignments and under- leases, there is a significantly limited provision with respect to covenants and conditions concerning the user of premises. This is contained in s.121(3) which relevantly provides that in all leases containing a covenant against alteration of the user of the leased premises without consent such covenant shall be subject to a proviso "that no fine or sum of money ... shall be -- 7 of 8 -- c 3 payable for or in respect of the licence or consent." Thus the legislature has not seen fit to legislate against the unreasonable withholding of consents to changes of use of premises where the parties have agreed to a limitation of the user. The authorities point in only one direction, and I have no hesitation in acceding to the declaration sought by the lessor. It will be sufficient if I declare that on the proper ( construction of the lease dated 25th May, 1984 between the applicant Arches and the respondent Q.M. Industries Pty. Limited, ( ' there is no implication in clause 1 (m) that the consent in writing referred to therein may not unreasonably be withheld. The respondent will be ordered to pay the applicant's costs of the application to be taxed. -- 8 of 8 --