Bourseguin v Stannard Bros Holdings Pty Ltd & Ors [1990] QSC 273

'b '-\ " IN THE SUPREME COURT \\':,, ,1; r";;'" C C C C OF QUEENSLAND No. 4140 of 1988 Before the Mr Justice Shepherdson BETWEEN: AND: AND: AND: RAYMONDE BOURSEGUIN Plaintiff STANNARD BROS. HOLDINGS PTY. LTD. First Defendant NORTHERN BUILDING CONTRACTORS PTY. LTD. and CARCORP PTY. LTD. Second Defendants TAWILLA PTY. LTD. Third Defendant JUDGMENT - SHEPHERDSON J. Delivered the Twenty-Third day of August, 1990 CATCHWORDS Sections 44 and 109 Real Property Acts 1961 (as amended) - Lease for 5 years with 5 year option~ Not registered before transfer from lessor first defendant to second defendants as purchaser ofreversion - Fraud established - Competition between plaintiff and third defendants as holders of competing equitable estates or interests. Bahr v. Nicolay (No. 2) (1988) 164 C.L.R. 604; Merrie v. McKay (1897) 16 N.Z.L.R. 124 applied. Counsel: Mr. Keane Q.C. with Mr. Applegarth for the plaintiff Miss Philippides for the first defendant Mr. McGill for the second and third defendants Solicitors: Messrs Robert Lehn & Co. for the plaintiff Messrs Murrell Stephenson for the first defendant Messrs Quinn & Co. for the second and thirddefendants Hearing Dates: 9th, 10th, 11th, 12th and 18th April, 1990. -- 1 of 51 -- C C' C IN THE SUPREME COURT OF QUEENSLAND BETWEEN: AND: AND: No. 4140 of 1988 RAYMONDE BOURSEGUIN Plaintiff STANNARD BROS. HOLDINGS PTY. LTD. First Defendant NORTHERN BUILDING CONTRACTORS PTY. LTD. and CARCORP PTY. LTD. Second Defendants TAWILLA PTY. LTD. Third Defendant JUDGMENT - SHEPHERDSON J. Delivered the Twenty-Third day of August, 1990 The plaintiff presently occupies premises known as Sandpiper Restaurant in Somerset House, Thomas Drive, Chevron Island. She claims to be a tenant of those premises which are described as C part of the ground floor of the building erected on land described as Subdivision 185 of Portion 46 on Registered Plan 93882 in the County of Ward, Parish of Nerang. Her tenancy claim originates in a lease registered no. G950503 and executed by the above named first defendant in her favour for a term of five years commencing on 1 st March, 1983 and terminating on 1 st March, 1988 and an option for renewal for a further five years contained in that lease which option, it is said, was duly exercised. The plaintiff's right to present occupancy relies first oμ an exchange of letters between her solicitor and the first defendant coupled with her possession and payment of rental and secondly on a lease dated 14th July, 1988 executed by the first -- 2 of 51 -- 2 defendant in her favour for a term of--five years from 1st March, 1988 which lease contains an option for the plaintiff to exten4 that term for a further period of five years. --- This lease has not been registered. By a contract dated 14th June, 1988 (Ex. 8) the first defendant sold to the above named second defendants lands described as Subdivisions 185, 186 and 187 of Portion 46 in the County of Ward, Parish of Gilston (sic) being the premises situate at 57 Thomas Drive, ,chevron Island included in which is the property which the plaintiff claims is leased to her. Settlement of that sale was due for completion on 12th September, 1988. By a contract dated 24th August, 1988 (Ex. 9) the second defendants sold the same land to the third defendant with settlement also being due on 12th September, 1988. In the events which have happened those two sales were settled, a memorandum of transfer from the first defendant to the second defendants of the land sold has been registered in the Titles Office, a memorandum of transfer from the second defendants to the third defendant of - the same land has been lodged in the Titles Office but not registered and the lease of 14th July, 1988 from the first defendant to the plaintiff has not been lodged in the Titles Off ice and theref.ore not registered. In this action the principal relief sought by the plaintiff *is a declaration that she is entitled to be registered as lessee of that part of the land de~cribed as Lot 185 of Portion 46 on Registered Plan '·93882 in the County of Ward, Parish of Nerang ip, priority to the transfer of the land from the first defendant to the second defendants and the following transfer thereof from the - second defenclant:s·to the -third defendant. The first defendant :,_. 0 0 0 0 -- 3 of 51 -- ' ..f 0 3 has generally joined ·· issue ~with the plaintiff but the second defendants, in the one pleading · of the second and third defendants, ·have claimed possession of the premises occupied by the plaintiff and further relief including damages. I now set out my findings as to the relevant facts . and matters. By the registered lease no. G950503 (Ex .. 1) which as I have said was executed by the first defendant as lessor and the plaintiff as lessee the plaintiff became lessee of the subject premises for a period commencing on 1st March, 1983 and O terminating on 1 st March, 1988. Clause 12 of that lease gav~ the 'c: plaintiff:- " ... the option of extending the said term of five (5) years for a further period of five ( 5) years at a rental for the first year of any such extended term as shall be mutually agreed upon but shall not be less than the rent payable for the last , year of the original term under this lease and thereafter for the . second, third, · fourth and fifth years of any such extended term to be determined in accordance with .•. II the formula expressed in cl. 12 which was based on movements in the Commonwealth Statistician's Consumer Price Index ,, (hereinafter called CPI). Clause 12 further provided that such extension should be:- " otherwise subject to the like terms and provisions as are herein contained except this present covenant for renewal such option to be exercised by notification in writing by the lessee to reach the lessor at least three (3) calendar months before the 1st day of March, 1988". By letter dated 10th November, 1987 (Ex. 2). Messrs. Short, Punch and Greatorix,· who were then the plaintiff's solicitors and practising at Surfers Paradise, wrote to the first defendant giving notice pursuant to cl. _12 that the plaintiff exercised "her option of extension for a further term of five years commencing on the 1st March, 1988". The letter.asked for "the -- 4 of 51 -- 4 relevant deed of. extension- for the .lessee's execution in due course".· The letter continued: - "Our client further requests the granting to her.of a. further option period of five years to commence from the end of the extended term on similar terms and conditions. Should you be agreeable we would ask if the granting of such option may be included within the proposed deed of extension of the original term." · The first defendant replied by a letter dated 13th November, 1987 (Ex. 3) which letter read:- "Re: Extension of Lease - R. Bourseguin 'SOMERSET HOUSE', Chevron Isl. Thank you for your letter of 10th November, 1987 giving notice that your client, Mrs. R. Bourseguin,. who operates the 'Sandpiper Restaurant' in our property 'Somerset House', Chevron Island, wishes to renew her lease in accordance with the terms and ·· conditions by exercising the option of extension for a further of five years commencing on 1st March, 1988 ·· · to contain a further option of five years from the- end of this extended term. We have passed this matter to our agents, Dave Allen ~~Real-Estate, Chevron Island, to handle on our-behalf. with the instruction to include the above in the Deed of Extension·. -- When the necessary documents have been drawn up our agents will be in touch with your client." 0 0 0 Alan Graham Stannard, who at all material times was Q manager/ director of the first defendant and who gave oral evidence before me, was I find a truthful and reliable witness. I have no doubt that when Ex. 3 was sent to Short, Punch and Greatorix the first defendant was telling the plaintiff's solicitors that the first defendant was agreeing to let the plaintiff have a further option of five years after the expiration of the five year term on 1st March, 1993 and that that further option was to be in effect in the same terms as the option in the registered lease G950503, the first five years of which were-then shortly due to expire. -- 5 of 51 -- C1 5 I find that on or about 13th November, 1987 the first defendant sent to Dave Allen Real Estate at·· Surfers. Paradise a carbon copy of the letter ... Ex. 3 and that the· first .defendant expected Dave Allen Real Estate to attend to the preparation of documents necessary to: record the exercise of the option for the five years commencing on 1st March, 1988 and the grant of the further option of five years from the end of that five year term. Dave Allen Real Estate, who it appears carried on business in Surfers Paradise, instructed a solicitor Mr. Brian Thomas Gillan in early 1988 to extend the lease for the five C: years to commence on. 1 st March, 1988 and to provide . for; the plaintiff to have a further five year option with the terms of the lease which she was taking up being the same terms . and conditions as the lease G950503 (apart from changes in material dates). Mr.· Gillan, who practised in. Surfers, Paradise, gave oral C evidence before me. At the time he received those insb::uctions from Dave Allen Real.. Estate, Mr. Gillan had not, ... met Mr. Stannard. He did not meet him until 14th June, 1988 in circumstances which I shall shortly mention. After Mr. Gillan received the above instructions from Dave Allen Real Estate, he arranged with Short, Punch and Greatorix for them to prepare leases which related to shops 1 and 5 in Somerset House. Shop 1 was occupied by the plaintiff and shop 5 by another tenant of the first defendant. I am satisfied that in respect of shop 1, Short, Punch and Greatorix, by arrangement with Mr. Gillan, prepared a lease on the same terms as the registered lease Ex. 1 (save for the alteration in the period of the lease and the period of the option), had that new lease,,,"(.,. signed by the plaintiff and ultimately sent it to Mr. Gillan. -- 6 of 51 -- 6 The 'photocopy·· of the lease prepared· by· Short,.·• Punch•·· and Greatorix is· Ex~ 62 ~· Exhibit 62 was not dated but the original, of which Ex. 62 H;· a photocopy, was I am satisfied prepared in. triplicate, signed by the plaintiff and witnessed by Mr. Punc.h. This Ex. ·62 was prepared ·in ·accordance with two ·forms ·under the Real· Property Acts: and· the Real Property Regulations - Form 8 which is headed "Lease" and•consistsof two pages and Form 33 described as · a· "Schedule" · in which there are seven pages containing corisecuti vely ·· numbered clauses and · one . page containing a sketch plan. I point out that Ex. 62 contains two identical pages which include clauses 8, 9, 10, 11 .and parts of clauses· 7 and 12. ' This duplication probably occurred during photocopying and I proceed on the basis · that the ·lease· in triplicate as executed·by the· pliintiff did not contain such a duplication.: :, ;, Exhibit 62·,: ori the· face of the photocopy, · appears not. to 0 0 have· bee·n· executed by the first defendant as lessor although the Q first· defendant's name appears thereon as lessor.· Exhibit 62. specified the ''term· of lease" as "commencing on the First Day. of March, 1988 and terminating on the First Day of March, 1993". Clause 12·of Ex. 62 is in terms essentially identical to clause 12 in Ex. 1 save for necessary alterations to the date of the CPI between 1 st March·, 1988 and 1 st March, 1993 and the date by which the option was to be exercised in writing, i.e .. from at least three calendar months before 1st March, 1988 to at least three caleridar months before 1st March, 1993. · I mention also··that clauses 13 in each of Ex. 1 and Ex. 62 are ·identical· save for ne·eessary alterations· to. the dates of relevant periods for which rental was ·. to .. be calculated . in- accordance ~ith~thos~ clause~. 0 -- 7 of 51 -- ' ' : C' 7 I am unable to find exactly when Mr. Gillan received the lease in triplicate a copy of which is Ex. 62. I am however well.satisfied that when Mr. Gillan arranged for Short, Punch and Greatorix to prepare the new lease for shop 1 he was acting on his instructions from the first defendant obtained via Dave Allen Real Estate which instructions were in effect that there were to be prepared and executed documents necessary to reflect an agreement by the first defendant to grant the plaintiff a new lease (pursuant to the already exercised option) over shop 1 for a term .of five years from 1 st March, 1988 together with an (, option for a further five years thereafter and with rental. reviews in accordance with the terms in the lease Ex. 1 which reviews were to reflect movements in the CPI as appearing_in cl. 13 in Ex. 1 .. I should at this stage say that the plaintiff,. having signed the original of Ex. 62; believed that her lease was 'proceeding to completion by. signature by the- first C defendant-. On or about 15th April, 1988 and before she had signed the original of Ex. 62 the_ plain~iff had received a letter from Dave Allen Real Estate (Ex. 28) notifying her~ "In accordance with the terms of your agreement the rental variation based on the CPI December, 1987 is 6. 7%. Your monthly rent from 1 May, 1988 is to be increased from $940.13 to $1,003.16 (i.e. an increase of $63.03 per calendar month)." The plaintiff paid this new rent in accordance with that notice. On the evening of 8th June, 19 88, on an occasion when Mr. A. N. Stannard had come to her restaurant ·for dinner, the plaintiff asked him to "make things hurry up". I find that on this same occasion two -men arrived at the-restaurant and then spoke to Mr. Stannard but - did not eat. Plaintiff then ,asked Mr. Stannard certain questions as a result of which he.told her that the two men were going to make him an of_ter on Somerset -- 8 of 51 -- 8 House. She asked - "What is happening with my lease?II and he replied that he was going to see Mr. Gillan in the morning. I find that it was within a few days of this occasion that plaintiff signed the lease in .triplicate, the copy of which is - Ex. 62~ I find that probably the preparation of the lease was expedited because· plaintiff had complained to her then solicitors Short, -Punch and Greatorix. Thereafter, the plaintiff rang Mr. Stannard on two occasions asking him to hurry things. She next saw Mr.· Stannard on the Gold Coast on - 21 st July, 1988 and I shall come shortly to the circumstances of that visit. I return now to 14th June, 1988 on which dat~ a number-of events happened.· On this date Mr. Stannard first met Mr .. Gillan at the latter's-Surfers Paradise-office. Mr. Stannard had with him·a contract which he had signed that day on.behalf of the first defendant•· to sel-1 the land and buildings situated at 0 0 57 Thomas Drive, Chevron Island the real property description of Q which I ·have already set out. A photocopy of that contract is Ex. 8. The contract was in the R.E.I.Q. form adopted jn 1982 and included certain typed special conditions. The purchasers named in the contract were the above named second defendants Northern Building Contractors Pty. Ltd. and Carcorp Pty. Ltd .. The price was $2,051,750.00 and the date for completion was specified in the contract as 12 September, 1988. Under item M "TENANCIES" on the front page of the contract appeared "ALL EXISTING TENANCIES". Typed special condition 30 read:- "CLAUSE 30 -. THIS CONTRACT IS SUBJECT TO THE PURCHASERS AND THEIR SOLICITORS PERUSING ALL LEASES OVER THE PROPERTY WITHIN 14 DAYS OF THE DATE HEREOF. AND THEIR BEING TOTALLY SATISFIED WITH THE TERMS OF SUCH LEASES. THE VENDOR AGREES TO PRODUCE COPIES OF SUCH LEASES TO THE PURCHASERS OR THE PURCHASERS SOLICITORS AS SOON AS POSSIBLE". 0 -- 9 of 51 -- 9 Plaintiff's lease or tenancy_ was one of,,the existing tenanci,es although it was not specifically mentioned in the contract. At the time of that contract the firs:t defendant was the registered proprietor - of •Subdivisions 185, . 186 and 187 of , Portion 46 · which it . had contracted to _sell to . the second defendants. The title relevant to Subdivision 185 of Portion 46 is Certificate of Title Volume 6018, Folio 15 and a certified copy of that document is Ex. 5~ It shows that the () first defendant became registered proprietor of the fee simple on 19th March, 1981. It also shows the registered lease G950503 C) C .. \ ) to the plaintiff. There are other endorsements on that Certificate of Title and I shall later refer to them. On 14th June, 1988 Mr. Stannard discussed_ with Mr. Gillan the leases to which the property sold, Somerset House, were subject. I am satisfied that Mr. Stannard at that_ time believed that something had been done by :Dave Allen Real Estate about drawing up the leases for shops 1 and 5. I am sa,tisfied that on 14th June, 1988 there was no ·specific. discussion between Mr. Gillan and Mr. Stannard about the lease of shop 1 and that at that time, Mr. Stannard had not executed any document· granting the plaintiff the five year lease from 1st March, 1988 plus the option of renewal for a further five years . with all. rent reviews according to CPI. On or before 14th June, 1988 Robert John Balanda, a solicitor practising at Surfers Paradise under the , name •. of McDonald, Balanda and Chesters, received instructions to act for the second defendants in their purchase under.the_ contract with the first defendant. ..,Exhibit 8 shows· his firm's name as solicitors .for the.purchasers. -- 10 of 51 -- 10 · On 15th June, 1988 .. -Mr.• Balanda ,and· a ·Mrs., Rogers, .a solicitor employed by his firm, - visited Mr •. Gillan at his office.. At that meeting Mr. Gillan disclosed to Mr. Balanda and Mrs.· Rogers all the particulars that he had in relation to the leases of Somerset House, he gave· Mr. Balanda copies of , all leases that he had and he handed over schedules which he had prepared. Mrs. Rogers took fairly detailed notes about matters which Mr. Gillan told them concerning the leases. One of the schedules which Mr. Gillan had prepared and which Mr. Balanda Q said was a photocopy of a handwritten document is Ex. 14 before me. Exhibit 1 4 contains three sheets which are at present stapled .. together. Sheet 1 shows a handwritten list of the tenancies in columnar form with each tenancy number mentioned, the:::, tenant identi·fied,- lease commencement and expiry dates, rentals and other items. I·do not find that sheet 1 was the actual·sheet given· by-Mr~ Gillan to Mr. Balanda on 15thJune, 1988. Against tenancy no. 1 appears the following:- "Tenant - Raymond Boursequin (sic) Lease commencement date - 1.3.88 Lease expiry date - 1.3.91 Area M2 - 81 Monthly rental - $1003.16 Annual Rental - Cars - nil Lease term - 5 + 5 Rental reviews - CPI (ANN) TO MARKET AT OPTION." Written in blue ink on sheet 1 - either by Mr. Balanda or someone from his office - appears:- "Gillan - 2 p.m. tomorrow - copy Sandpiper lease pickup". plaintiff's lease. Sandpiper lease refers to the Sheets 2 and 3·, in Ex. 1 4 show plans of the ground floor and the first floor.respectively and areas there leased. Sheets 2 and 3 identify each of the leased premises referred to in sheet 1. Written in pencil, I find by Mr. Balanda, above shops 0 0 -- 11 of 51 -- C 1 1 1 and 2 ·i.e. the plaintiff'·s shop and the next door shop, are "new" leases agreed ·- not yet executed". I find Mr. Balanda received -- this information from Mr. Gillan on 15th June, 1988. Exhibit 15 is a typed one page document which I find was·-. also handed by Mr. Gillan to Mr. Balanda on 15th June, 1988. It is headed "SOMERSET HOUSE LEASES". follows:- It refers to shop 1 as · "R. Boursequin (sic) new lease for 5 years with a. 5 year option from 1st March, 1988; rental $1003-16 per calendar month - CPI". I find that after 15th June, 1988 Mr. Balanda reviewed the ( position , of the leases in Somerset House,, the property_ his. clients had bought. He prepared his own list of notes in relation to shop 1. Exhibit 16. is a draft of those notes which I find were prepared on or about 24th or 25th June, 1988 and the effect of which, although in draft, is - the .· same as what. Mr. Balanda called his final draft. This Ex. 16 contains (inter_ (, "-, alia) the following:- C "Lessee - Raymond Boursequin (sic). TYPE OF LEASE - Registered lease no: G950503. There is an original lease dated 21st February, 1983 commencing 1 st March 1983 for five years with - an option for a further five years, which option was exercised by deed of extension commencing lst March, 1988. A deed of extension was prepared and this is currently with the ·tenant's solicitors, Short, Punch and Greatorix of Surfers Paradise pending their client's execution. The tenant has requested that the deed of extension contain a further option period to commence upon the conclusion of the extended term. To the best of our knowledge this has been granted. OPTION - Five year option commencing 1st March, 1988. The first year of the option period shall be based on market reviewal and has already been set at $1,003.16 from · the 1 st March, 1988. The lessee has also requested that the deed of extension include grant of a further option period • of five years from the 1 st March, 1993 and to the best of our knowledge this has been granted. - · The•. second, third, fourth· and fifth years; rental is based on a CPI formula." -- 12 of 51 -- 12 This - 'document,- Ex.·.· 16,. satisfies me that during the discussions Mr~ Gillan had with Mr. Balanda,and. Mrs. Rogers on 15th June, 1988 Mr. Gillan did not have the lease of shop 1 _. which he had arranged for Short, Punch and Greatorix to prepare and that he told Mr. Balanda that his clients had granted or agreed to grant - the . option for a further five years - from 1 st March, 1993. Exhibit 16 confirms and satisfies me that Mr. Balanda knew on· 15th June,. 1988 that rental reviews for -the option period were based on · a CPI formula. Exhibit 1 5 also satisfies me ·that on 15th June, 1988 Mr. - Balanda knew that rental during the five years from 1st March, 1988 was subject to CPI adjustment.' " - I should I think comment further on Ex. 14 and on what appears against "shop 1 .in the column headed lfrental reviews." namely "-CPI (ANN) TO MARKET· AT OPTION". These latter words "to mar~et'. "a:t ·option II dO .not fit in with what I have found. was Mr. 0 0 Balanda' s understanding of rental reviews as evinced by Exs. 15 . Q and 16. As I have pointed out, Ex. 14 contains photocopies on which certain marks have been made and the first sheet of Ex. 14 is a photocopy of a handwritten document. Mr. Gillan was not cross-examined about Exs. 14, 15 or 16. I am satisfied that ;Mr. Gillan did tell Mr.- Balanda .on 15th June, 1988 in relation to shop 1 that it bad been agreed that the extension had been ·taken up some ·months ea_rlier and that it had been agreed that the tenant of shop 1 would be given a further lease of five years on the same terms CPI, , that the tenant was presently in the second five years under the registered lease as an option but she was to be given a further five years in addition. I further find that Mr. Gillan told - Mr. Balanda that all rentals were linked to the CPL C) -- 13 of 51 -- c: 13 What I find probahly·happened was that·Mr .. Gillan did give I Mr. Balanda a·sheet in the -form appearing in the first sheet of Ex. 14 but· 'that that sheet did not contain in the "rental reviews" column the words "(ANN) TO MARKET AT OPTION". I find that·that first sheet of Ex. 14'is not the·actual document given to Mr.·Balanda by Mr. Gillan but is a photocopy· of the document to which Mr~ Balanda later added the words "(ANN) TO MARKET AT OPTION" and then photocopied the altered document. When one looks at the first sheet of Ex. ·14 it is clearly a photocopy the right hand margin of the document having cut off part of certain cl words. C I think Mr. Balanda is mistaken when he said that Ex. J 4 contained· the actual· schedule given him by Mr. Gillan~ relevance of the reference to "market" will shortly appear. _The To continue the chronology,· I find that on 29th June, 1,988 Mr. Balanda wrote to Mr. Gillan a letter (Ex. 17) which referred to the contract between his• clients and the first defendant and said:..: "We refer to the above matter and confirm that our clients have satisfied themselves in relation to clauses 30 and 31. The contract is therefore unconditional so far as these clauses are concerned. Pursuant to the provisions of clause 32 we enclose herewith our client's cheque for $97,000.00. We also·confirm that your client has satisfied itself regarding the matters referred to in clause 36 and the contract is also unconditional so far as clause 36 is concerned." Thereafter the second defendants' purchase from the first defendant was unconditional with settlement being expected on 12th September, 1988. By letter dated 29th June, 1988 Mr. Gillan wrote to Mr. Balanda (Ex. 18) and said:- -- 14 of 51 -- 14 "I acknowledge receipt ,of your·,letter of the ,29th instant enclosing your client's cheque for the sum of $97;000:00 and that the contract is now unconditional. I should be pleased if you will forward to me transfer documents together with lease in respect of shop 1 II The reference to lease of shop 1 arises from the fact that,at some date (unspecified) but which I am satisfied was after 15th June, 1988 and before· 29th June, 1988 Mr. Balanda did discuss with Mr.-Gillan Mr. Balanda's clients' instructions that his clients have some· in~ut into the lease to,the plaintiff with a view to altering the rent review provisions.from a CPI base to a market base. Mr. Balanda·claims that before he sent Ex~· 17 to Mr. Gillan he did reach agreement with Mr. Gillan that the pla1ntiff's lease from the first defendant should provide that there be an increase·' to market rental every two years. Mr.' · · GiTlan : denied any· such · agreement al though he did concede: that the matter ~of rent review to market instead of rent re~iew to CPI was discussed. In my view it is immaterial to thi·s present action whether or not Messrs. Gillan and Balanda . did reach an agreement that the plaintiff's lease from the first defendant should be amended so that in effect, instead of annual CPI reviews of rental, the rental should be reviewed according to market movement. I say that for the following reasons:- 1 . The plaintiff and the first defendant had already agreed that·the option for the five year period from 1st March, 1988 had been properly exercised and the plaintiff was entitled to a · five year lease for · that term; the plaintiff and. the first defendant had also agreed that the plaintiff should have a? option for a further five year lease and that rental review for that option'periqd·be according to movements in the CPI. 0 0 0 0 -- 15 of 51 -- c\ 15 2. Those. were Mr. Gillan's instructions from the .first defendant via Dave.· Allen Real Estate - he had carried them out to the extent of telling ,,short, Punch and. Greatorix to prepare a new lease accordingly and this had been done. 3. Those instructions from.the first defendant to Mr. Gillan did not alter. 4. Once having a concluded agreement between the plaintiff and the first defendant, even though not reduced to a written document executed by both parties, that contract could not be got rid of (Perry v. Suff~elds Ltd. (1916) 2 Chancery 187) .. If it were necessary for me to do so, I would find that the .. exchange of letters, Exs. 2 and 3, constituted a contract that the plaintiff should ha.ve a lease. for a term of . five years commencing on 1 st March, 1988 in pursuance of the exercise oJ the option under cl. 12 of the registered lease G950503: and that that lease contain an option for a further,term of five years C: such option to be on · the same terms as those appearing in cl ... 1.2 in the registered lease save for necessary alterations to dates~ In my view Exs. 2 and 3 should not be construed so that together they show uncertainty or lack of meaning. It is quite apparent from the letters that the first defendant acc.epted that the option had been properly exercised and had accepted the request to grant a further. option of five years. Admittedly Ex,. 2,was written by a solicitor but the two letters together are commercial documents and the contractual . intention is not uncertain. As Barwick C.J. said in Upper Hunter County District Council v. Australian Chilling and Freezing Co .. Ltd. (1968) 118 C.L.R. 428 at 437:- "In. the search for that intention, no narrow or. pedantic approach is warranted, particularly·· in the· case of commercial arrangements." -- 16 of 51 -- 16 I would add that .,(subject ,·to an argument as to certainty of all essential terms·· which ·I shall· later mention). at. least for the first 5 years from 1 st March, 1988 a new .. lease had come cinto being when the right of renewal had been exercised (Mercantile Credits Ltd. v. Shell Co. of Aust. Ltd. (1976) 136 .. C.L.R. ,at pp. 344-5; Gerraty v. McGavin (1914) 18 C.L.R. 152 at 163; Rider v. Ford ( 1923) 1 Ch. 541 at 54 7; Eastdoro Pty. Ltd. (No. 2) (1990) 1 Qd.R. 424 at 429). Mr. Gillan at no time had any instructions from.the first Q defendant to agree to a variation of the plaintiff's lease as sought by Mr. Balanda. Mr. Balanda conceded in evidence.that any agreement which he might make with Mr. Gillan could have no effect on any agreement which might already have been made between the first defendant and the plaintiff. Nev~rtheless, I am satisfied that the alteration to market review was canvassed with Mr. Stannard himself. Before I come 0 to that aspect I must mention a letter dated 7th July, 1988 Q written by Mr. Balanda to Mr. Gillan (Ex. 19). That letter, after referring initially to the lease for shop 5, said:- "We also confirm your client's agreement conveyed by.··. your' Mr~ . Gillan on several occasions now for us to prepare all new leases and for the terms of same to be approved by our clients. We confirm that our clients wish to insert provisions requiring market review of rentals every 2 years or at least at the time options are exercised and that the leases be unregistered. It •. is noted that· your client has no objection to these matters." ,. The letter went on to deal with leases of each shop and sought Mr. Gillan' s confirmation that what therein followed "are the basic terms and conditions of the leases for the centre". In respect of shop 1 the following (inter alia) appeared:- .. ''TERM Lease to be registered. The lease has been prepared and is awaiting execution by the landlord. The lease 0 -- 17 of 51 -- .. --~ •··••" 17 is a for a period of 5 ·years fromthe 1st March, 1988 and provides for another option of 5 years. We note that you have agreed on behalf of your client to amend. the existing lease so that same provides for an increase to market e~/ery two years ·RENTAL $1,003.16 per calendar month with CPI increases each .··year · apart from the year when the rental is to be reviewed to market." I return now Mr. Gillan' s letter of 29th June, 1988 to Mr. Balanda (Ex. 18) and the request there contained to forward C: "transfer documents together with the lease in respect to shop 1". C C I find that what happened was that probably within a day or two after 15th June, 1988 Mr. Gillan received from Short, Punch and Greatorix the lease in triplicate which the plaintiff had already signed (refer Ex. 62). I find that that document at that stage was not.securely bound together in the form of one document. I find that Mr. Gillan sent this lease in triplicate to Mr. Balanda - probably within a few days of 17th June, 1988. I find · that Mr. Balanda then typed four sheets containing different clauses 12, 13 and 14 for the lease which the plaintiff had signed. These four sheets were typed in triplicate and returned to Mr. Gillan together with the lease which the plaintiff had signed. I am satisfied that Mr. Balanda prepared these different clauses 12, 13 and 14 with Mr. Gillan's approval. On 8th July, 1988 Mr. Balanda wrote to Mr. Gillan a letter (Ex. 20) enclosing what he called "in duplicate lease for shop 1 amended as required by our client". This duplicate lease included the new clauses 12 to 14 as well as the clauses which Balanda believed those new clauses were to replace. The effect of that replacement if it became part of the lease was to remove a system of rent revie~ according to CPI movements and replace -- 18 of 51 -- 18 it with a system of rent-review which broadly stated was CPI and market review in alternate years with the first and third years of the·.· five year option •· period being fixed . by current market rents. The·new clauses prepared by Mr. Balanda are Ex. 44 and the original clauses are Ex. 45. I should at this stage say that the clauses appearing in Ex. 44 · were in fact drafted by a Mr. . John Watson Quinn a solicitor who subsequently acted for the above named third 0 defendant Tawilla ·Pty.• Ltd. and who I find was in early July, 1988 interested in acquiring Somerset House. reach Mr. Quinn and· his evidence. I shall ,l:a ter I find that it is correct to say, as Mr. Gillan did say, that Mr. ·· Balanda returned to him the lease together with the clause relat:i.ng · to market review. Mr. Gillan theri posted the 0 leas'e in · triplicate·_. to Mr. · Stannard in Sydney so that his company; the· first defendant, could execute it as lessor. The Q first defendant executed this lease in triplicate under its common seal on 14th July, 1988 (see Ex. 4). Mr. Stannard then returned the lease to Mr. Gillan by post. I am satisfied that when the firsf defendant executed the lease it probably was not bound together in a form identical or similar to that in which the lease Ex. 4 is bound. I find that the first defendant executed the lease in only one place and that is on p. 2 where the seal and signatures appear. No sheet of the schedule was signed or initialled by Mr. Stannard or anyone on behalf of the first d·efendant. Mr. Stannard in his evidence before me was shown Exs .· 44, 45 and 4. He said he believed that the document which he signed contained the clauses 12 and 13 as they appeared in Ex. 4 which he had then been shown. I do not think that that -- 19 of 51 -- i c: (' t I '"- • ./ 19 evidence is correct. . Mr. . Stannard .. was adamant in cross-examination that he never at any stage agreed to, nor did he -ever instruct Mr. Gillan to agree :to, a provision for a review of rent to market rent every two years. As I have said, Ex. 44 as drafted did provide for such a review while Ex. 45 did not mention review to market rent at all. The problem is that Ex. 4, while providing in clause 12 for rent during the second, third, fourth and fifth years of the term of. the lease being calculated on a C.P.I. based formula, in clause 13 - the option clause - one finds provision for the rent for the first year of the option period to be then current market rent and there~fter rent for each year to be calculated according to the C.P.I. based formula. Now · there was evidence from Miss Kea~ing, who I shal,l shortly mention and who was the plaintiff's solicitor from 26th July, 1988, that •· at some time during August, 1988 she had (=: drafted, typed and prepared t_he clauses 12 and 13 which appear in Ex.· 4. She told me that these clauses were amended llto r,. include what .. the correct agreement between the parties was". \ .. ___,.,, Initially I had some difficulty reconciling Mr. Stannard's evidence to the effect that he never agreed to any rental review provision based on market rents and the existence of .the market based rent calculation machinery in clause 13 of . Ex. 4. However, Ex. 43 to which I shall later refer, has resolved that difficulty. · Exhibit 4 is put forward as the . lease under which the. plaintiff claims her title and I believe that I have no choice but to act on it as reflecting the agreement between the first defendant and the plaintiff. -- 20 of 51 -- 20 I find that probably what happene,d was that Mr. Gillan sent to Mr. Stannard· in Sydney the lease signed by the plaintiff in its unbound , state and containing the clauses which appear in Ex. 45 and did not sent the clauses appearing in Ex. 44. I find that when the .first defendant. executed · the· lease ·· under its common seal the probabilities are that the clauses appearing in Ex. 45 were included in the document signed.· Thereafter, the matter-of market review remained alive. Mr. Stannard travelled to Surfers Paradise and on 21st July, 1988 attended.a meeting at 0 Mr. Balanda's office~ Mr. Gillan : was also . present. Mr. , Stannard described this meeting as containing Ila lot of, talk about the building and the leases and how.the new owners wanted all>leases to have market review clauses put in them". He said he understood that that referred to "all future leases when they fell· due· and-· that· to· that he could not disagree that being the new·owner'sprerogative". However he told me that as far as he was • concerned •· shops 1 and 5 were existing leases like :all .. the other 12 or 13 in the building. The upshot of the meeting, to use Mr .. Stannard' s words, was that he agreed to talk to the tenants of shops 1 and 5 to see about changing the leases which had been drawn·up to put "a market clause in them even though we had already signed leases under the CPI increases".· In· the event, Mr. Stannard saw the plaintiff on 21st July, 1988. She refused to have anything to do with the proposed change and indeed was quite annoyed about the suggestion. Mr. Stannard then saw Mr. Gillan and instructed him that there was to be no change in the tenancies for shops 1 and 5 to which tenancies the first defendant had already agreed. Thus, at that stage, the operative lease in respect of the plaintiff's premises was that which the first defendant had 0 0 -- 21 of 51 -- 21 signed on· 14th July, 1988 beldeving it to be.for a-term of five years from 1 st March, -1988 with an option of . renewal for a further five years with CPI based reviews of rental on terms as appearing in the registered lease G950503~ Shortly thereafter - on 26th July, 1988 - the plaintiff retained Messrs. Robert Lehn and Co. , solici tars of Surfers Paradise, to act for her. On that day she saw Miss Kathleen Mary Keating a solicitor and partner in the firm of Robert Lehn and Co. The plaintiff instructed Miss Keating to have her lease from the first defendant registered. To that end the plaintiff C then obtained her file from Short, Punch and Greatorix and later on the same day returned to Miss Keating and gave it to her. C Included in that file was the document Ex. 62. Miss Keating wrote to Mr. Gillan a -letter dated 27th July, 1988 (Ex .. 44) reciting her instructions as to the lease including option and rent review provisions and stating her awareness of the sale of the building to a third party. following paragraphs:- The letter included the "We are further instructed that your client also agreed in writing to grant a further extension of five years i.e. from 1st March, 1993. This extended term was to be on similar terms and conditions as the original lease, with rental for the first year as· agreed upon between the parties and failing agreement, as may be determined by a registered valuer appointed by the head. of the Valuer's Institute of Queensland for the time being." The letter concluded by asking Mr. Gillan's urgent reply. Miss Keating then spoke to Mr. Gillan. He told her he had received her letter, that his client was in agreement with the terms of the letter and he told her that he at that stage still had the lease documents and instructed her to make necessary amendments to "bring back into line with what the original agreement -- 22 of 51 -- --------·----~~ 22 between the parties was":' Miss Keating understood that to mean that the original agreement was "five plus five, CPI the only rental adjustment except for the first year of the option". . She also spoke of the plaintiff's concern that Mr. Stannard was trying to "get her to go to market at the end of three years instead of five". In the event Mr. Gilla.n agreed to send the lease to Miss Keating to make·· amendments to clauses 12 and 13. I find Mr. Gillan also told Miss Keating that the building had been 0 sold and that he undertook to Miss Keating to register. the lease, that is that he would attend to immediate registration of the plaintiff's lease to protect her interests. I now reach Ex. 43 which I have earlier mentioned. This was a letter dated 1 st August, 1988 from Mr. Gillan to Robert Lehn and Co. It relevantly said:- "I acknowledge· receipt · of your letter of the 27th ultimo and wish to inform you that the terms of the new lease as set out in your letter are acceptable to my client. I enclose herewith lease which was previously submitted to me and which was ··amended •in accordance with my client's instructions. I suggest that the · page containing clause 1 2 fallowed by the. agreed terms be inserted in the lease and that your office stamp the lease and arrange to lodge·t_pe same with,myself in the Titles Office." Mr., McGill for the second and third defendants has submitted that.this document clearly shows that the lease which the first defendant had signed had been amended to incorporate the clauses appearing in Ex. 44. I find that, despite Mr. Gillan's statement . that the lease "was amended in accordance with my client's instructisms", if there was any amendment it was not in accordance with the first defendant's instructions. I accep't without any res~rvation Mr: Stannard's evidence that he at no time agreed to ,any alteration to market review prior to 0 -- 23 of 51 -- C 23 acceptance of the terms set out in Miss Keating's letter of 27th July, 1988 (Ex. 42).· Miss Keating did receive the lease from Mr. Gillan; she drafted and had typed clauses. 12 and 13 as they now appear in Ex. 4 .. At this time, the agreement for market review after five years and in the first year of the five year option period only was introduced. On 2nd · August, 1988 · Miss Keating sent the lease to Mr. Gillan under cpver of a letter (Ex.46). She noted the changes to clauses 2 ( e) . and . 1 2 and 13. .. This lease was sent for C' Mr. Gillan's approval and once this was given it was returned to Miss Keating. The plaintiff then initialled an alteration on p. 1 of - the lease. The first defe_ndant did not thereafter initial any alteration. The. form of lease now apparently required under the Real Property Acts and the Real Property Regulations being in form 8 . and form. 33 appears to enable an alteration to be effected to form 33 without having either party to a lease confirm such alteration by signature or initial. In · the result, the · 1ease as appearing in Ex. 4 is• in its ' terms almost identical with Ex. 62 save for alterations to dates and periods of time and the insertion of a market review formula for fixing the rent in the first· year of the option period rather than leaving the rent for that year to be determined by. agreement and failing agreement by arbitration. I should I think here say that if I should be wrong in concluding that when the first defendant executed the lease on 14th July, 1988 the pages of Ex. 45 and not the pages of Ex. 44 were part of the document, and if it be correct to say that the pages appearing in Ex. 44 were part of the document, I do not believe that their presence, instead of the presence of the -- 24 of 51 -- 24 pages in Ex. 45 had . any.' bearing on the . terms of the lease which the first defendant intended should be granted to the plaintiff. I am well satisfied, after having heard Mr .. Stannard. that,. on 14th July; 1988 his -mind had been made up and that was that the lease was for five years from 1st March, 1988, that there was to be an option for renewal of five years and·_ that all rent reviews were to be in accordance with a CPI based formula. It must be borne in mind that the lease represented .the agreement reached between· lhe plaintiff: and the first defendant. The pl:aintiff Q had had ·· no say · in . what· had gone between Messrs. Gillan. and Balanda•in their discussions about market review of rental and Mr.· Stannard could not, even. had he wished it-, unilaterally have altered any already- concluded agreement between the pl-aintiff and ·the ·first defendant. Indeed, his one attempt · to persuade the plaintiff to agree to alteration failed. That the agreement between the plaintiff and the first defendant was later varied by mutual consent of the plaintiff and the first defendant, in that the machinery for fixing rent during the first.year.of the option period 0 became based on market rental, is clear from the dealings between Miss Keating for the plaintiff and Mr. Gillan to which I have already referred and the plaintiff's subsequent. initialling of the altered lease. I am satisfied that Mr. Gillan, with the intention of ho.riouring his undertaking to Miss Keating to have the lease to the plaintiff registered, approved the lease documents when M±'ss Keating' s secretary took them to him. After this approval,_ the plaintiff signed the first page and Miss Keating took steps to have the lease stamped urgently~ Mr. Gillan required $150. 00 for having the Tease executed by his client and for a production. fee · for producing the · relevant certi,f.icate of title to the 0 0 0 -- 25 of 51 -- C 25 Titles Off ice to enable • the .. lease to, be registered _on it. Miss Keating sent the lease to the Commissioner o.f Stamp Duties on 4th August, 1988 (Ex. 47). She received a requisition from the Commissioner on 15th August, 1988 (Ex .. 48). She· attended to this by obtaining a declaration from the plaintiff which she sent to the Commissioner on 16th August, 1988. Stamp duty was assessed on 24th August, 1988 and paid on 30th August, 1988. On 6th S,eptember, 1988 Miss Keating sent Mr. Gillan a cheque for $150.00 (Ex. 53). On 8th September, 1988 Miss Keating sent the lease in triplicate to her Brisbane agents Messrs. Poteri Wood c 1 and Co. with instructions for them to lodge that lease i~ the Titles Office in conjunction with Mr. Gillan who would produce the relevant certificate of title .. The document was sent via an overnight delivery system. Thereafter Miss Keating ~elied on Mr. Gillan' s undertaking to have the . lease -registered. She heard nothing further about the matter until 15th . Septembe_r, ~· 1988 when she was told by her secretary that the sale of the. :C premises from the-first defendant had been completed. She then learned that the plaintiff's lease had not been registered and Mr. Gillan, to whom she spoke, told her certain things that had happened at the settlement including his dealings with Mr. John Watson Quinn who had acted for the third defendant, the ultimate. purchaser of · Somerset House. In summary, Mr. Gillan told Miss Keating to telephone Mr. Quinn and arrange to lodge the lease "in conjunction". I shall return late:r.to Miss Keating's. dealings with ·Mr. Quinn. Ultimately, on . 13th. October,. 1988 Miss Keating lodged a caveat in the Titles Office on behalf of the·plaintiff to protect the plaintiff's -interests as lessee. By the contract dated 24th August, 198~ (Ex. 9) the above named third defendant 'I'.awilla Pty. Ltd. had bought from the -- 26 of 51 -- 26 second def endarits · · the , property which the· - first · defendant had sold those two ·companies. The price was ,.$2,251,750.00 and settlement was due for completion on 12tll September, 1988. This contract was also in the 1982 R.E.I.Q. form and also contained typed special conditions. It was .expressly.madellsubject to the simultaheous settlement of the contract of sale dated 14th June, 1988 between Stannard Bros. Holdings Pty. Ltd. · and Northern Building Contractors:Pty. Ltd. and Carcorp Pty. Ltd.". John Watson Quinn, a solicitor who practised under _the firm Q name of 'John Quinn and Co.; at Chevron Island, $urfers Paradise,_ at all times acted for Tawilla Pty. Ltd. He was at all material times a director·of that company. Mr. Quinn gave oral evidence before me. He was,· he said, experienced in conveyancing -::- trained in New Zealand and had been in Queensland 12 years at the time of~ trial. ·At the material times,· a . company named Quinncd~ · Pfy; ·Ltd. · owned al-1 shares in Tawilla Pty. Ltd. and 0 Quinn was the major shareholder in Quinnco., He told me that O Quirihco· was a trustee of a discretionary family trust,_ that he_ was·one of the beneficiaries, the other beneficiaries being his brother-in.:..law named George· Paul, his parents in New Zealand, . . and other relatives also in New Zealand. InJuly, August and September, 1988 the directors of Quinnco Pty. Ltd. were Mr. John Watson Quinn, George Paul and Claudette Donn.- George Paul was Mr. Quinn's brother~in-law and it was said he resided in New Zealand. Claudette Donn- was employed by the solicitors Quinn and Co. at Chevron Island. Tawilla Pty. Ltd. had the. same three directors as Quinnco Pty. Ltd. and Mr. John Quinn told me that· a ·majority of directors could make; decisions for bot_h Q'-liinnco -· Pty. Ltd.· and Tawil la Pty. Ltd. 0 -- 27 of 51 -- 27 I find that before Tawilla Pty. Ltd. contracted to buy Somerset House, another: company named Panjan Pty .. Ltd., of which Mr. John Watson Quinn was •· a director, ,,had contracted to buy Somerset House, apparently from the second defendants. This contract was subsequently terminated. Exactly when that contract was made I was not told but I find that it was probably some time during July - probably in the early part of July. I say that because of Mr. Quinn's ready acceptance that it was he C who drafted part of each of clauses 12 and 13 as they appear in Ex. 44 and that those drafts were contained in a lease he. had (= sent to Mr. Balanda, probably in early July. I find that prior to the third defendant .. signing the contract,· Ex. 9, Mr.· Quinn had been told by Mr. Balanda that rent reviews of shop 1 (i.e~ the plaintiff's shop) were to be according to market changes and not CPI movements. I find also that prior to the third defendant signing the contract Ex. 9, C Mr. Quinn had received from Mr. Balanda copies of correspondence passing between Messrs. Balanda and Gillan which correspondence C included copy of Ex.• 19 (see Ex. 13). I find also that while the Panjan contract was still on foot Mr. Quinn had delivered to Mr. Balanda a form of draft lease on the basis that in respect of any lease that came into existence he required a lease in that form to be signed by any new tenant. This draft lease was prepared on the basis of rental fixing by market review. The settlement or completion of each .of the contracts between the first • defendant and the second .. defendants and between the second defendants and the third defendant did not occur on 12th September, 1988 as stipulated in each contract. Instead they were deferred for one day and the settlements both occurred on 13th September, 1988 in Mr. Gillan' s office at -- 28 of 51 -- -------------------------------··~-~--- -----····--- 28 Surfers Paradise.· There were :two reasons .for th:e delay! First was the non-registration in· the Titles Office of the lease of shop 5 and unavai·labili ty of the relevant. certificate of . title relating to· that shop by 12th - September, 1988_ that title then being in the Titles Office. . The second reason was a caveat which had been lodged by a Mr. Adamson. This caveat problem was resolved by a withdrawal being produced at settlement. As to the first reason, I ain satisfied after hearing Mr. Gillan, t_hat at that time there was what he called a "boom" with _the result Q that the· high volume of- dealings in the Titles Office caused delays in registration. Mr. Gillan travelled to the _ T:!-tles Off ic·e in Brisbane on 12th . September, 1988 to ensure that the lease of shop 5 was registered and that the relevant certificate of title wa:s available for settlement next day. Mr. _ Gillan achieved that object. Mr. Gillan, as solicitor for the vendor first defendant, had to have the relevant certificates of title 0 for delivery· on settlement. I am satisfied that if Mr. Gillan . Q had -wished· to have the plaintiff's lease from the first defendant registered· prior to settlement and to have the· relevant certificate of title available to be handed over on settlementhe·would at that time have needed at least 10 clear working days. I should here say that I find that on 11th August, _1988 a photocopy of the - lea·se (Ex. 4) first came into Mr. Quinn' s hands, ·he having· received that document from Mr. Balanda (see Ex. 11 ) . This was 13 days before the third defendant signed the contract to buy from the second defendants. ·At the settlement on . 13th September Mr ... Gillan was well aware of the undertaking he had given Miss Keating that he woulc;i register the lease Ex. 4. The lease in triplicate was .then held 0 -- 29 of 51 -- C C C C' 29 by Poteri Woods & Co. in expectation of an appointment to lodge at the Titles Office in conjunction with Mr. Gillan who was to produce the relevant certificate of title. The lease was, I am satisfied, in registerable form and could.only be registered while the fee simple for Subdivision 185 remained registered in the name of the first defendant who was the lessor described in the lease. At settlement, Mr. Gillan represented his client the first defendant who was the vendor to the second defendants, Mr. Balanda represented the second defendants and Mr. Quinn represented the third defendant. A Mr. Scott Perri~, a solicitor, representing a company advancing purchase moneys to Tawilla Pty. Ltd. was also present. I find that at the settlement, Mr. Gillan as solicitor for the first defendant had a duty to. ensure that his client performed its obligations under its contract with the second defendants and to receive from the second defendants balance purchase moneys due to it subject to any adjustments for rentals due by tenants, outgoings etc. I find that Mr. Balanda had a duty to ensure that his clients performed their obligations as purchasers under their contract with the first defendant and their obligations as vendors under their contract with the third defendant. I find that Mr. Balanda was well aware of the lease Ex. 4 as he had sent a copy of it to Quinn on 11th August, 1988. I find he was also well aware that the lease to the plaintiff was to be registered - he had been so aware since at least 7th July, 1988 when he wrote to Mr. Gillan.(Ex. 19). That letter clearly stated in relation to shop 1 - "Lease to be registered". Mr. Balanda had, by his ·letter to Mr. Gillan of.29th June, 1988, -- 30 of 51 -- 30 expressed ~atfsfaction, with the' leases' of ·,;·Sortter~~t-t House. including that of the plaintiff.- ' ... During settlement Mr. Gillan handed to Mr: Quinn'a-letter dated 12th September, 1988 and addressed 'to, Messrs. --- Quinn ,and Co. (Ex. 10). That letter (omitting formal parts) read:-,> "Re: Sale of "Somerset House" 'by Staiiriard :Bros/ Holdings Pty. Ltd. I confirm that s,~ttlement of the above matter is to be effected at my office this afternoon~ I wish to advise that Certificate of- Title Volume 3338, Folio 202 is presently in the Titles Office pending the registration of Lease No. J586454C. - Such -- deed was lodged by myself and I undertake to hand over such deed when it is returned to me by the -- Titles, Office. ,Messrs. Robert Lehn & Co., Solicitors for the lessee of Shop 1 is (sic) presently awaiting the lodgement of- ,Volume _6018, _ Fo:I.io 15 in order to register the lease over Shop 1~ ,_ and which should precede , any , other - docum~nt. - I undertake to hold the sum of $20,500-00 in my trust account·• pending a Land Tax clearance to, the 30th 'June - last. My client has paid the rates to the 30th June next amounting to the sum of $9, 002-70 and I undertake to_ - - attend to the adjustment of rentals with Dave Allen Real Estate who have managed the building for the past' - number of_yearsll. Mr. Gillan told me that he said to Mr. _ Quinn, before handing him Ex. 10 - "before any documents could be lodged in the Titles Office for registration the registerable lease that Robert Lehn' s offi_ce had and was ready to lodge had to precede any other document". < .According to Mr,. Gillan, no one said anything apart from Mr. Quinn who, afte~ making an alteration to the letter Ex. 10 handed _the letter back to Mr. Gillan and asked him to initial the alteration. _,, I_ find that Mr. Quinn wrote in after the word "rentals" appearing in the last paragraph of_- the lett:er the o. 0 0 0 -- 31 of 51 -- C C C C 31 words- and figures "as at, 12/9/88", that,he asked Mr. Gillan to initial the alteration, and that Mr. Gillan did this and returned the - letter , to- Mr.; Quinn. Exhibit 1 0 was dated 1 2 th September, 1988 because it was written in expectation of settlement on that day. I find also that the settlements were carried out chiefly between Messrs. Gillan and Quinn with Mr. Quinn and his client's financing company paying most of the money <Freet to Mr. Gillan for his client. Mr. Balanda agreed to this course. I find that Mr. Quinn paid over or caused to be paid, ''over moneys due by his client only after he had received the altered letter (Ex. 10) from Mr. Gillan. Mr. Quinn told me ·· he had no recollection of Mr. Gillan having said anything immediately _before handing Ex. 10 to him. Mr. Balanda told me he had heard Mr. Gillan say in effect "this lease for shop 1 has to be lodged for registration prior to your two transfers". I find that at the settlement Mr. Gillan did say to Mr. Quinn, prior to handing over the letter Ex. 10, words to the effect that the lease for shop 1 which was held by Robert Lehn and Co. had to be lodged for registration prior to the two transfers which Mr. Quinn was to receive. I find that Mr. Balanda believed, from what he had seen and heard pass between Messrs. Gillan and Quinn at the settlement, that the lease to the plaintiff would be lodged in the Titles Office before any transfer from the first defendant to his clients. Mr. Balanda told me - and I accept it as correct~ that he remained silent because he believed the basis upon which the letter was delivered was accepted and that Mr. Gillan made -- 32 of 51 -- 32 it clear to Mr. Quinn that the lease. for. shop 1 should precede any other document. On the evidence which Mr. Quinn gave I thought that, immediately after the settlement, he behaved in what I would call a "sharp" manner. In the witness box he was quite frank. He-did not regard the registration of the.plaintiff's lease from the first defendant prior to lodgement of any of the documents handed over on settlement, i. e. the transfers. from the first defendant to the second defendants and from the second defendants to the third defendant, as a condition of settlement; 0 he knew that Mr. Gillan had made quite clear in Ex. 10 what he Q wanted; he knew that the transfers to the second defendants and the third defendant · were to be subject to . the lease to the p:iain.tfff. · He attempted to make something out of the failure to note -in f~at part 0 of the transfer :from the first defendaht to the · seco.nd defendants (Ex. 25) marked "Mortgages encumbrances etc." any reference to the plaintiff's lease. I did not think 0 this a worthy rock to rely on. Although I think it would have been prudent' for both Messrs. Gillan and Balanda to have inserted in that box "subject to lease no ...... "allowing the dealing number of the plaintiff's lease to be inserted after it was known on lod~ement in the Titles Office, it seems that,·once the lease from the· first defendant to the plaintiff had been lodged to precede the lodgement of the transfer from the first defendant to the second defendants the Titles Office practice was · to requisition· '•the lodger to correct that transfer to show the number of the lease to the · plaintiff -which . was an encumbrance . · Mr. Quinn also quite candidly told me .. that he had no agreement with any person whereby he considered himself or 0 · 1 ! -- 33 of 51 -- c: 33 indeed considered himself at trial bound to register the lease for shop 1 in priority to the transfers; that he understood that the only way that the interests of tfie'l&ssee plaintiff could be protected was by having her lease registered before his transfers;~ that when Mr. Gillan handed him the letter Ex. 10 he understood that if he did not act in conformity with that letter the rights of the lessee would be gone; that he.believed that there was no obligation on his part·to protect the. interests of the lessee and that he believed that registration of the transfers before the lease had the ,.. effect of defeating Miss C: Keating's .client. I find that immediately following the settlements and after he and Mr. Perrin had left Mr. Gillan's office, Mr. Quinn told Mr. Perrin to lodge the documents for registration as soon as possible~ I find that those documents included the transfers from the first defendant _to the second defendants and · from C: second defendants to the third defendant and the relevant certificates· of title .. I find that when Mr. Quinn told Mr. Perrin this Mr. Gillan was unable to hear what he had said. I find that the two transfers were lodged .in the Titles Office on 16th September, 1988. The certified copy of Certificate of Title, Volume 6018, Folio 15 (Ex. 5) shows that the transfer to the second defendants was registered on 10th October, 1988 and that the transfer to the third defendant has not yet:been·registered. As I have said, the plaintiff's caveat was lodged on 13th October, 1988 and so the transfer to the third defendant is held up pending the result of this action .. I return now to Miss Keating's dealings with Mr. Quinn on and after-15th September, 1988. -- 34 of 51 -- 34 · bn the f'irst occasion· when she -spoke to Mr~ Quinn· I find she told him · that she was ringing b:r arrange lodgrnent in conj·unction of her client's lease and to ask :what was happening about the lease. ·a I find that he said··· that he had to get instructions but did not think there would be any problem, that it wa;s not easy because he had to get instructions from one of his clients who was in·New Zealand. Miss ·Keating sent to Quinn and co·. by facsimile two :letters each dated 20th September, 1988 ( Exs . 5 6 and 5 7) . The 'first of these letters sent out at 10.42 a.m. referred to her reliance upon Mr.' Gillan, advised of .. (J the plaintiff's interest and·· sought urgent acknowledgement by Q Mr. Quinn's ·client·of the plaintiffis interest in the property as· lessee and asking for arrangements to be made to lodge the lease· ih conjunction ·to precede the transfers. The second of these letters,· sent at · 1 2. 51 ·· p. m. , disclosed awareness that the tr~~sfers ha:d been - lodged on 16th September, 1988 and sought urgent advice that the third defendant agree to withdraw these (J transfers to enable the lease to be lodged to precede them. On 21st S~~tembJr; 1988 Miss Keating sent by facsimile a further letter to Mr. Quinn (Ex. 59) pointing out that she had then had an opportunity 'to sight· the contract - of sale with the third defendant purchasing subject to "all existing tenancies" and ask:tng Quinri's urgent advices as to what steps he'was going·to take· to register ·the plaintiff's interest as lessee.' . Miss Keating did not have detailed diary notes but I am satisfied she spoke to·Mr. Quirin on a number of occasions.· On one occ::asion'he telephoned her and asked for a copy of the lease - a strange request because he ·· had known details of .. it since 11 th August, 1988 and this request I can, only infer was a delaying - tactic. I· find that at· one - stage Mr. · Quinn told 0 -- 35 of 51 -- C 35 Miss Keating he had to get ·instructions from his clients in New Zealand and on another that he was going to Melbourne for the V .F .L. grand final and that he may. ca'Ech up with his client there. I am satisfied that the overall impression Mr. Quinn gave Miss Keating in a number of telephone conversations was that he was getting instructions. I find .that these were all ploys designed to gain time. I find Mr. Quinn was determined to have the third defendant registered on the relevant certificate of title free of the plaintiff's lease. He had control over both the transfers after the settlement although Mr. Perrin had C possession of them and it is obvious. that Mr. Perrin carried out his instructions to lodge the documents immediately. I infer that Mr. Quinn knew during his dealings with Miss Keating when h~ was fobbing her off, that she at that stage had not lodged any caveat and-that the longer he could stave her off ~he better were his chances of achieving his aim of registration free of the lease. C To return for a moment to Mr. Balanda. As I have already said I find that he believed from what he had seen and heard. pass between Messrs. Gillan and Quinn at the settlement that the lease to the plaintiff would be lodged before any transfer from the first defendant to his clients. I believe this was important for . Mr. Balanda who as I have said was at the settlement to see that his clients discharged their obligations as purchasers and vendors respectively. Mr. Balanda made it quite clear to me that he approached the. settlement on 13th September, 1988 on the basis that Mr. Quinn had the money anp that it was up to him to be satisfied with the documents produced on settlement. I should, in deference t;_o Mr. Balanda, make clear that although Mr .. Balanda approached_ the settlement_ -- 36 of 51 -- 36 in this· way he had inade sure that 0 the- transfer. from the first defendant to ·the second defendants was stamped and in order for registration and:cthat the transfer from the second defendants to the third defendant was in order. Mr. Quinn.had had that latter· document stamped. Mr. Balanda was,• as he told me, basically satis.fied on the matter of the leases. He did refer me to .a letter he · had sent to Mr. Gillan reserving as he said his client.'s rights. This letter which was dated .4th August, 1988 (Ex. 23) is in my view irrelevant to this present case. · The reservation was based on ·. an alleged breach by Mr. Gillan of an 0 alleged agreement made between Messrs. Balanda and Gillan.that Q the ·1eases, 'and especially the plaintiff's lease, were to provide• for rent reviews according to • market and .. not CPI ·· moiernerits. I have already dealt with this aspect. In any event th~ ieservat:ion did not prevent the ·settlements being completed on '13th· September·,. 1988. Both sets of defendants contended that clause 12 of the Q registered 'lease G950503, pursuant to which the plaintiff purported to exercise her option for a further five · years' leas'e~ failed ·for uncertainty. · Their arguments were based on the fact·that ·clause 12 said that the rental for the first year of the extended term should be mutually agreed but should not be less than the rent payable for the last year of the original ter~ under the· lease. Both ~ounsel, Miss Philippides and Mr: McGill, relied on Booker·· Industries Pty~ Ltd. v. Wilson Parking (Old.) Pty. Ltd. (1982) 149 · C.L.R. · 600. The evidence in this case i.s distinguishable from-that in Booker's case. Here, the plaintiff was told by the first defendant's agent in the letter dated 15th April, 1'988 (Ex';: 28) what the new rent was to be. The plaintiff 0 -- 37 of 51 -- c, 37 agreed to the amount and paid .the rent as demanded .. Thus, while the option for renewal ·· when exercised may . not .. have been a concluded agreement as at 1 st March, i 988, it became a concluded .. agreement once the plaintiff agreed on the rent. She evinced her agreement by paying•. and. continuing to pay the rent demanded. No further agreement of the parties was required. The option clause 12 contained the machinery for fixing the rents for the second, third, fourth and fifth years of the lease. opinion the point contended for fails .. In my The plaintiff's claim for declaratory.relief against the c, second defendants involves a claim by the holder of an.equitable !O· C interest against the holder of a_ legal estate. I use those words in the sense that the plaintiff is . the holder of an unregistered lease whereas the defendant is registered as the proprietor of the fee simple of the land to which, on the plaintiff's case, her lease is subject. Her lease has not.yet been lodged. She lodged a caveat on 13th October, 1988. The second defendants .became registered as proprietors of the fee simple on 10th October, 1988. The second defendants' estate is paramount and they presently hold the fee simple free of the plaintiff's lease unless fraud · is proven within ss. 44 and 109 of the Real Property Act 1861 (as amended). The question arises - is fraud within those sections available against the second defendant? ,In Bahr v. Nicolay (No. 2) (1988) 164 C.L.R. 604 the High Court considered similar legislation under the West Australian Statute. Mason C.J. and Dawson J. in their joint judgment said (at p. 613):~ . "There is no fraud on the part . of a registered proprietor in merely acquiring title with notice of an existing unregistered interest or in taking a. transfer -- 38 of 51 -- 38 , with knowledge that its registration will ,defeat such an interest; Mills v. Stockman (1967) 116 C.L.R. 61 at 78 Waimiha Sawmilling Co. v. Waione Timber Co. (1926) A.C. 101. The decision in Waimiha Sawmilling merely gives effect to s. 134 by excluding from the statutory concept of fraud an acquisition of title with notice of any trust or unregistered interest. However Lord Buckmaster in expressing the reasons for the decision (1926) A.C. at p. 106 went rather further when he reproduced the following passage of the remarks of Lord Lindley in the earlier decision (Assets Co. Ltd~ v. Mere Roihi (1905) A.C. 176 at p. 210) :- 'Fraud ... means actual fraud, dishonesty of some sort, not what is called constructive equitable fraud .... ' Lord Buckmaster went on to instance, as examples of fraud, the transfer whose object is to cheat a man of a known existing right and a deliberate and dishonest, trick causing an interest not to be registered (1926) A. C • at pp . 1 0 6- 7 • " Wil~on and Toohey JJ. in their joint judgment in the same case said (at p. 630-631): "What . then constitutes fraud for the purposes of ss. 68 and 134? A convenient starting point is a passage in the judgment of the Privy Council in Waimiha Sawmilling Co v~ Waione Timber Co. (1926) A.C. at pp. 1 0 6- 7 : - 'If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent, and so also fraud may be established by a deliberate and dishonest trick causing an interest not to be registered and thus fraudulently keeping the register clear. It is not, however, necessary or wise to give abstract illustrations of what may constitute fraud in hypothetical conditions, for each case must depend upon its own circumstances. The act must be dishonest, and dishonesty must not be assumed solely by reason of knowledge of an unregistered interest.'" As I have said ss. 68 and 134 have their counterparts in Queensland in ss. 44 and 109 of the Real Property Act 1861 • (as amended). I mention also that in Stuart v. Kingston (1923) 32 C.L.R. 309 at p. 359 Starke J·~ · said that: - 0 0 0 0 -- 39 of 51 -- 39 · "No definition of fraud ·can be attempted, so various . are its forms and methods." In the present case, what is quite clear is that Mr. Balanda, at the conclusion of the settlement, fully expected Mr. Quinn to arrange with the plaintiff's solicitors to lodge the plaintiff's lease· in the Titles Office in conjunction with the certificates of title and the two transfers in such a way that the plaintiff's lease was registered on the relevant 1 C certificate of title before the following transfers from the first defendant to the second defendants and from the second defendants to the third defendant were registered. It is also clear that Mr. Balanda, in hindsight unwisely, allowed_Mr. Quinn to attend to these matters. Mr. Balanda's clients' position was C . .. . . not that of two companies simply acquiring their registered title from the first defendant with notice of the plaintiff's interest as a lessee or simply acquiring the title with knowledge that registration of the title in their favour could defeat the plaintiff's interest. I have already referred to clause 30 of the contract between the first defendant and the second defendants and the letter of 29th June, 1988 written by Mr. Balanda to Mr. Gillan (Ex. 17) in which Mr. Balanda confirmed that the second defendants had satisfied themselves in relation to (inter alia) clause 30. · I shall not repeat what I have said. Clause 30 achieved more than giving the second defendants notice of details of the leases. It was in my view quite clear to Mr. Balanda and therefore to his clients that the purpose of clause 30 was to ensure that the transfer of title from th·e first defendant to the second defendants was to be subject to the leases of which Mr. Balanda had satisfied himself and one of -- 40 of 51 -- --·- ---- -~---· ---·--· ------~-----c-~---- 40 · those lease·s '~as the plaintiff's lease. · In -the -case ·of her lease, Mr. Balanda was, I find, well aware from the time he sent Ex. 17 to Mr. ·Gillan that the transfer of title to the· second defendants was to.be subject to her lease .. Confirmation of this knowledge is found in his letter dated 7th July, 1988 sent to Mr. · Gillan (Ex. 19) and the extract from that · letter - I have al~eady mentioned viz. - his statement in.reference to shop 1 - "Lease to be registered"~ At·the settlement Mr. Balanda knew and he expected that the transfer, when registered, would be Q subject to the plaintiff's registered lease. In Valbirn Pty. Ltd v~ · Smith and Powprop Pty. Ltd. (Appeal· No. 47 of 1989 - Q Queensland Full Court (unreported) -" judgment delivered 22nd June, 1990 there was a contract containing a clause not dissimilar from the· present clause· 30. In that case the learned trial judge had concluded that the appellantPowprop was bound by an option of · renewal contained in the lease originally granted by ·- the vendor from whom the appellant had bought the 0 freehold which lease was in favour of the respondent.· Clause 38. in the contract entered into between Powprop and its vendor, pr~vided that the sale was subject to and conditional upon the purchaser's perusal of all leases - "and the notification of the acceptance of the terms and conditions contained therein by way of written notification thereof by the purchaser or its solicitors to the vendor's solicitors on or before 3rd . day of June, '1987." The appellant's solicitors subsequently confirmed in writing to the solicitors for the ·respondent their client's "acceptance of the leases pursuant to clause 38 of the contract". The learned trial judge said that because of that notification the appellant "had more than notice of (the respondent's) right; it purchased on terms that it would be bound by all the covenants in the 0 -- 41 of 51 -- C' ' 41 lease including . that ·· in clause 11" •.. Clause 11 contained the option. His Honour -relied on Bahr v. Nicolay (supra) and went on to declare that the appellant was <therefore bound by the lease in favour of the respondent including clause 11. The Full Court of the Supreme Court of Queensland dismissed the appeal. In the present case it is my view that the second defendants purchased Somerset House from the first defendant on terms that they would be bound by all leases in respect of which they or their solicitor had satisfied themselves pursuant to clause 30 and the plaintiff's lease was one of these. This was C· important to the first defendant who, in the event of sale of the reversion was bound by clauses 2(c) of the registered lease G950503 and of Ex. 4 to obtain a Deed of Covenant from the purchase~ recognising the lessee's rights and agreeing that each lease should be read and construed as if the purchaser were named . therein as original lessor. The second defendants' C agreement to be bound apparently eliminated the need for such a covenant. C While it may at first sight seem harsh to find that the second defendants have been guilty of fraud as that word has been explained in the cases to which I have referred, I have no doubt that the exception of fraud in ss. 44 and 109 has been proven against the second defendants. In my view it is fraud for the second defendants to contend, as they now do in this case, that their title, having become registered, prevails over the plaintiff's unregistered lease. .The following statements from Sir James Prendergast C. J. in Merrie v. McKay ( 1897) 16 N.Z.L.R. 124 are in, my view apposite to what has occurred in this case. His Honour said:- _ -- 42 of 51 -- --- ---- --------~------ 42 "If the· defendant acquired the title_ intending to carry out the agreement with the plaintiff, there was no fraud then; the fraud is in now repudiating the agreement, and in endeavouring to make use of the position he-has obtained to deprive -the plaintiff of his rights, under the agreement. If the defendant acquired his registered title with a view to depriving the plaintiff of those rights then the fraud was in acquiring the - registered title. Whichever view is accepted, he must be held to hold the land subject to the plaintiff's rights under the agreement and must perform the c9ntract entered into by the plaintiff's vendor." This passage was applied by Stanton J. in Webb v. Hooper (1953) N.S.Z.L.R. 111 and; as His Honour pointed out at p. 114 was quoted with approval by Salmond J. in Waimiha Sawmilling Co. Ltd. v. Waione Timber Co. Ltd. (1923) N:Z.L.R. -1137, 11_69 a decision of the New Zealand Court of Appeal which was later approved by the Judicial Committee of the Privy Council. The second defendants' s solicitor, Mr. Balanda, who was present at· the settlement has told me that he believed that Mr.-- Quinn had accepted the basis upon which Ex. 10 was delivered 0 and had accepted in effect the content of the words spoken to Q him by Mr. Gillan. I find that Mr. Balanda's attitude to the settlement was effectively to delegate to Mr. Quinn what was his (Balanda' s) responsibility namely to ensure that his clients, the second defendants, met their part of their contractual bargain-with the first- defendant namely to see that the actual transfer from the first defendant to the second defendants was registered subject to the plaintiff's lease. If he did not do that then he exposed his client to a claim in damages - at the suit of the first defendant and further, the attitude which the second defendants - now -- take before - me shows that they hav_e repudiated the agreement with the first defendant and are endeavouring, as Sir James Prendergast said, ·to,make use of the 0 -- 43 of 51 -- • 0 0 C 'C --~------------- 43 position · they have obtained. to deprive the plaintiff. of her rights under the agreement. • I turn for the moment to Mr. Quinnand his conduct becaμse Mr. Balanda had effectively delegated to Mr. Quinn the matters to which I have just referred. Mr. Quinn ... in my opinion was guilty of patent cheating. His target was the plaintiff's lease of which he desired his client, which was effectively controlled and partly owned by himself,- to be completely free. Mr. Quinn went about his task in the manner I have already described. He led both Mr. Gillan and Mr. Balanda to believe that he. would ensure that the lease was lodged for registration prior to the transfers to the second and third defendants. It is said. that he was silent and that his silence did not signify assent to what Mr.· Gillan had proposed in his letter. Ex. 10 and in his remarks addressed to Mr. Quinn. Mr.·McGill, for the second and third defendants, has referred me to the judgment of the Court of Appeal in Empirnall Holdings Pty. Ltd. v. Machon Paull Partners Pty. Ltd. (1988) 14 N.S.W.L.R. 523 and especially the judgment of McHugh J.A. at p. 53_4 .. In the view which I take of what occurred at the settlement and with reference to the findings which I have already made, I infer that Mr. Gillan' s statements to Mr. Quinn followed by . delivery of the letter Ex. 10, followed by Mr. Quinn reading and understanding that letter and his request to Mr. Gillan to alter_ it, with which request Mr. Gillq.n complied, followed by Mr. Quinn then paying over moneys due under the contract all lead to one conclusion. only and that is that Mr. Quinn agreed t~ lodge '.the plaintiff's. lease in conjunction with the two transfers and titles so that the plaintiff's lease precede~ the two transfers and was therefore to be registered ahead of these -- 44 of 51 -- 44 two transfers•. · This was .certainly• Mr •. Balanda' s understanding of what he had seen and heard pass between .Messrs. Gillan and Quinn. l ·was most unimpressed with Mr. Quinn who I thought was brazen in the witness box. Apart from what I find to be blatant cheat-ing, namely a.fter - having agreed to lodge the lease in conjunction so that the lease could be registered ahead. of the two transfers, then instructing Mr. Perrin, immediately he and ~. Perrin· had left the settlement room, to immediately lodge the 0 transfer documents and title with the intent of destroying the plaintiff's lease, •Mr.- Quinn continued this conduct, as .I so find, by lying to Miss Keating.about difficulties in obtaining instructions from his client-· for example by saying his client was in New Zealand or perhaps might be in Melbourne when all the time he and his ·secretary between them were capable of giving the"necessary instructions, if instructions .were needed. .It was 0 quite obvious to me that Mr. Quinn at all times was unhappy with Q any leases of Somerset · House in which rental reviews were calculated on CPI movements and he preferred leases containing rental adjustments to market. I · am satisfied Mr .. Quinn therefore set out ·-to defeat the plaintiff's lease because, save for the first year of the renewal period, all rentals thereunder were ·to be based on CPI movements. He had, as I find, made an agreement to -which I have referred, with Mr. Gillan and immediately repudiated that.agreement once out of Mr. Gillan's earshot. Mr. Quinn ·then set· about fobbing off Miss Keating with spurious excuses in the hope that in the interim the transfer to the third defendant would be registered. Mr._ Quinn' s conduct in my view· would fall very comfortably within fraud under: ss. . 44 and 109 if it were necessary for me to have regard to those 0 -- 45 of 51 -- C 45 sections in the case.of the plaintiff's claim for ~eclaratory relief against the third defendant. Both claims to registration i.e. the plaintiff's claim for registration of her lease and the third defendant's claim for registration of the transfer to it are equitable in the sense that both are unregistered on the relevant title. Before I turn to that competition, I should also say that it seems to me that Mr. Balanda, having obviously trusted Mr. Quinn and having allowed to be placed into Mr. Quinn's-hands the two transfers and titles -effectively placed within Mr. Quinn' s power the ability to cheat as he. did. I have considered wh~ther Mr. Balanda and vicariously his clients, the second defendants, should be held liable for Mr. Quinn' s obvious fraud. The matter. was not addressed and in the circumstances I see no need to make any finding on it because,. for reasons already given, .I am satisfied that the exception of fraud has been proven against C: the second defendants. I turn now to the competition between the plaintiff and third defendant - both their rights are presently equitable as I have previously mentioned. The plaintiff's interests - and here I refer to the lease Ex. 4 dated 14th July, 1988 - came into existence before the third defendant's interest. Its contract was dated 24th August, 1988. I have "to determine where the better equity lies" (per Kitto J. in Latec Investments Limited v. Hotel Terrigal Pty. Ltd. (In Liquidation) (196.4-5) 113 C.L.R. 265 at 276. In Clark v. Raymer (Brisbane) Pty. Ltd. (No. 2) (1982) Qd. R. 790 the Full Court of the Supreme Court of Queensland decided that in a competition between two equitable claimants - -- 46 of 51 -- 46 "the court is not-required to limit its examination to the events which have occurred up to the time of acquisition of the later equitable right. All acts or omissions of either party and the effect of those acts or omissions. upon the other party may. be relevant, irrespective of the time when they occurred." (at p. 79'9..) • In the present case,· Mr. Quinn knew of the plaintiff's lease and the- contents thereof on 11th August, 1988 - before the third defendant signed its contract to purchase. Mr. Quinn in fact .. signed the contract on behalf. of the third defendant. The third defendant's . contract (Ex. 9) contained a number of special Q typewritten conditions. One of these was clause 36 which read:- · ''The purchaser agrees to make no objection on settlement to the fact that any of the leases for the shops and suite~ forming the property hereby sold are not registered at the Titles Office Brisbane. The vendor hereby agrees not to undertake any negotiations or make any agreements with any of the tenants of the property hereby sold without first consulting the purchaser herein and accepting the purchaser's direction with respect to any matter of and incidental to any such negotiation." It is thus clear that the third defendant agreed with the second defendants not to object on settlement to leases not being registered. This clause could only have ref erred to 0 0 leases requiring registration - such as the plaintiff's lease. Q This clause could not have referred to any leases of three years or less because they did not require registration to be effective. In considering the matrix of circumstances in which Ex. 9 came into being I do not overlook the letter dated 29th July, 1988 which Mr. Balanda sent by facsimile to Mr. Quinn (Ex. 13). That letter was headed -"Sale . by Northern Building Contractors Pty. Ltd. and Carcorp Pty. Ltd. to Tawilla Pty. Ltd." - al though there was not then any written contract i'n existence. The letter confirmed Mr. Balanda's earlier advice to - Mr. Quinn that at that stage there were three leases in respect -- 47 of 51 -- C C C C 47 of which there were problems regarding the exact ,terms of the lease. The letter then went on to discuss the leases including the plaintiff's lease of shop 1. This letter confirms the view I have taken as to the purpose of clause 36 and Ex. 9. I would add that on 29th July, 1988 Mr. Balanda sent to Mr. Quinn by facsimile a copy · of his letter of 7th July, 1988 written to Mr. Gillan (Ex. 19). As I have said that letter stated that the plaintiff's lease was to be registered. The existence of clause 36 therefore compounds the attitude taken by· Mr. Quinn immediately after the settlement when he instructed Mr. Perrin to immediately lodge the two transfers with the intent to destroy the plaintiff's lease. I would also add that by special condition 35 of the contract Ex. 9 the third defendant agreed to accept the prior stamped-transfer capable of immediate registration in favour of the second defendants as vendors together with an undertaking from the second defendants' solicitors to answer any requisitions. Possession of or control over this transfer was essential to Mr. Quinn's plan to cheat the plaintiff. Had the transfer been registered before settlement of the sale to the third defendant, there can be little doubt that the plaintiff's lease (Ex. 4) would have been registered ahead of the transfer so that the transfer to the third defendant would have been subject to her lease. This clause 35 helps explain why Mr. Quinn was prepared to accept the two transfers on settlement. It may be that Mr. Balanda's attitude to the settlement was influenced by the presence of clause 35 in Ex. 9 although he did not expressly say so. Mr. McGill has argued that the plaintiff's equity should be postponed to the third defendant's equity because of the -- 48 of 51 -- ---- - ---- - -- 48 plaintiff's failure to ·1odge a caveat in the Titles Office to protect her interest as lessee. I accept. that in particular circumstances that failure may contribute to a party losing priority with . respect . to his equitableinterest·(clark v. Raymor (Brisbane) Pty. Ltd. (No. 2) (supra) at p. 798) -~ However it is only one aspect of the actual omissions of the parties which I have to consider. I find that Miss Keating trusted Mr. Gillan and relied on his undertaking to register the plairitiff's lease before settlement. I find that Mr. Gillan had it within his power to do this. He had the relevant unencumbered certificate of .title and Miss Keat:j..ng' s agents, Messrs. Poteri Woods & Co., had the lease in triplicate stamped ready for lodgement at a time to be arranged with Mr. Gillan: I find that Mr .. Gillan did not arrange any joint lodgement of the certificate of title and lease in the Titles Office. I find that Mr. Gillan unilaterally decided upon the course which he followed at settlement and which resulted in the plaintiff's lease not being registered before settlement. I find that Mr. Gillan did not tell Miss Keating of his proposed course and therefore she was deprived of considering at that stage whether or not.she should lodge a caveat. I find Mr. Gillan's course was reasonable considering the delays in registration of dealings then occurring in the Titles Office·and the date for settlement fixed by each contracf but I also find that he should have told Miss Keating before settlement what he proposed to do. The dealings between Miss Keating and Mr. Gillan and between Mr. Gillan and Mr. Quinn showed trust between Miss Keating and Mr. Gillan and trust between ·Mr. Gillan and Mr. Quinn. One frequently reads of "commercial morality" and it -~ .. • 0 0 0 0 -- 49 of 51 -- I " ID C 49 · is quite apparent that Mr. Gillan' s trust in Mr. Quinn was sadly misplaced. Mr. Quinn's conduct after the settlement was from any view point indefensible. He represented the third defendant not only as its solicitor but effectively as its main spring bearing· in mind that he and his secretary between them had voting control of the directorate. The third defendant is bound by his conduct. In my view, when I take into account all_relevant matters and I include the failure by Miss Keating to caveat bef~re settlement on 13th September, 1988, I have no difficulty at all in concluding that the equity of the plaintiff must prevail.over the third defendant's equity in any competition between them. It is unnecessary to ~ssess damages. The second defendants have claimed possession of the leased premises relying on.a notice to quit delivered -by them on 4th August, 1989. This claim based on the plaintiff holding over after expiration of lease G950503 fails. I mention in passing that on 4th August, 1989 the second defendants no longer had any beneficial interest in the land although they were then and still are registered proprietors of the fee simple. In the result I make the following orders:- 1. I declare that an estate or interest in the fee simple of the land described as Lot 185 on Registered Plan No. 93882 (formerly subdivision 195 of Portion 46 on Registered Plan No. 93882) in the County .of Ward, Parish of Nerang and being the whole of the land described in Certificate of Title Volume 6018., Folio 15. particula~s of which interest are set forth in the following schedule do vest in Raymonde Bourseguin on and from 1st March, 1988. -- 50 of 51 -- 50 THE SCHEDULE All that part of the ground floor of the· building erected on part of the said land_ comprised in and described by a lease dated 14th July, 1988 made between Stannard Bros. Holdings Ltd. as lessor and Raymonde Bourseguin as lessee for a term of 5 years commencing on 1 st March, 1988 upon the covenants and conditions set forth in the said lease a true copy whereof is annexed to this Order and marked "A" such lease being Ex. 4 in this action. 2. I declare that the said Certificate of Title, Volume 6018, Folio 15 and the fee simple of the land described in the said Certificate of Title are subject to the said estate or interest described in the said schedule with the intent that the said Certificate of Title shall be read and construed as if the foregoing vesting order had been registered in the second schedule to the said Certificate of Title on 15th September, 1988. 3. I order that office copies of the foregoing orders No. 1 and 2 be forthwith produced to the Registrar of Titles together with Ex. No. 4 (in triplicate) such photocopy orders and Ex. 4 to be retained by the said Registrar of Titles and be available for search on payment of any prescribed fee. 4. 5. I dismiss the counterclaim of the =o~,fendants. I order the first and second l'I defendants to pay the plaintiff's costs of the action to be taxed and I order the second defendants to pay the plaintiff's costs of the second defendants' counterclaim to be taxed. 0 0 -- 51 of 51 --