Comprehensive Notes - 2018 PDF

Preview

Summary

LEASE - Is a document creating an interest in a property for a specific amount of time. Definitions- Lessor – The registered proprietor of the property subject to the lease (landlord) Lessee – The person who acquires the lease interest in the land (tenant) Sublease/Assignment – Agreement where the l...

Description

property!for!a!specific!amount!of!time.!! Definitions-*Lessor!–!The!registered!proprietor!of! the!property!subject!to!the!lease!(landlord)! Lessee!–!The!person!who!acquires!the!lease!interest! in!the!land!(tenant)!Sublease/Assignment!–! Agreement!where!the!lessee!grants!some!or!all!the! rights!he!has!as!a!lessee!to!a!third!party.!! Essential*Elements*of*a*Lease*% 1.%Certainty%of%term%%%-!Lease!cannot!be!for!an! indefinite!period!.!Prudenial!Assurance!co.!limited!v! London!Residuary!Body.!--!Must!be!either!fixed!term! or!periodic!tenancy!(where!etheir!party!can!give! notice!to!end!the!tenancy!at!the!end!of!each!period! deined!by!the!contract)! Refer!to!ss*210*and!212*Property*Law*Act*2007//** U/d*S.*212:*-*Lease*terminating*on*occurrence*of* future*event**(1)A!lease!is!not!invalid!only!because!it! provides!for!its!termination,!or!permits!notice!of!its! termination!to!be!given,!on!the!occurrence!of!a! future!event!so!long!as!the!event!is!sufficiently! defined!in!the!lease!that!it!can!be!identified!when!it! occurs.!If!it!doesn’t!occur!then!after!tenth! anniversary!and.!This!lease!is!an!equitable!lease!for! all!purpose.!Cannot!be!registereted!u/d!LTA!2017!* -!“statutory*tenancy.”**-*s*210*Property*Law*Act* 2007..What*if*tenant*sitting*there,*just*paying*rent* …*Was*called*a*“monthly*tenancy//*This*is* terminable*at*will*//*20*working*days*notice*is*to* be*given.* **2.%Certainty%of%Premises%-!The!land! concerned!must!be!properly!defined!(include! whether!lease!covers!the!whole!of!the!property!or! part!of!it!–!Goldsworthy!Mining!Ltd!V!Federal! Commissioner!of!Taxaion!(1973)!!Includes!all! fixtures!on!the!land!//! !

exclusive%possession%-!Lessee!has!the!right!to! prevent!all!other!people!from!entering!the!premises! including!the!lessor!themselves!and!have!overall! control!of!the!property.%Remember:%IN%Lease--%%You% have%to%be%able%to%identify%the%land:%.%%Have%to% identify%the%area%capable%of%exclusive%possession.%% Examples:!!•!A!lease!to!“store!paint!materials!in!the! house”//!Fatac!Ltd!v!Commissioner!of!Inland! Revenue!-----!IF!a!landlord!e!nters!the!premises! without!permission!or!express!or!implied!authority! in!terms!of!lease,!he/she!commits!tort!of!trespass.!–! Ratio!:!“A!tenant!enjoys!those!fundamental,!if! temporary,!rights!of!ownership!that!stem!from! exclusive!posse////%LTA%S%24-%Property%Act%2007% ssion!for!a!defined!period.!!Stipulated!reservations! stem!from!that!premise!…”!! ! 4.%Proper%Creation%--!A!lease!MUST!be!in!writing!!if! it!is!not!a!Short!Term!Lease!---%Contracts%for% disposition%of%land%not%enforceable%unless%in% writing! (1)!A!contract!for!the!disposition!of!land!is!not! enforceable!by!action!unless—! (a)!the!contract!is!in!writing!or!its!terms!are! recorded!in!writing;!and! (b)!the!contract!or!written!record!is!signed!by!the! party!against!whom!the!contract!is!sought!to!be! enforced.!!(2)!In!this!section,!disposition!does!not! include—!(a)!a!short-term!lease;!or! (b)!a!sale!of!land!by!order!of!a!court!or!through!the! Registrar% Legal!estate:!Effect!of!Land!Transfer!Act!1952.!! Equitable!interest/!Lease:!Conditions!!:!-!1)!Court!of! equity!!2)!not!in!writing!3)!not!registered!4)!not!a! short!term!lease!5)!it!created!in!writing!but!partly! performed!!

when!it!isn’t!in!writing.!This!is!because!in!equity! through!speciic!performance/part-performance!a! lease!can!sill!be!created!-!See!Walsh!v!Lonsdale! (1882)!21!ChD!9!for!informal!leases.!•!! If%one%or%more%elements%are%not%met,%then%the% agreement%is%a%licence%–%p.%4%PLA%2007%–%now% statutory%protected%u/d%Residential!Tenancies!Act! 1986,!but!it!not!an!estate!or!interest!in!land!-S.! 206(4)! LICENSE!It!does!not!confer!exclusive!dominion!or! control!over!the!property.!Under!a!license!to!use! real!estate,!the!owner!typically!controls!!such!things! as!lighting,!heating,!cleaning,!repairing,!and!opening! and!closing!the!premises..!This!applies!regardless!of! how!the!parties!themselves!refer!to!the!agreement:! Westminister!City!Council!v!Clark![1992]!•!Rent*is* not*an*essential*element:*Shevill!v!Builders! Licensing!Board!! LEASE/LICENSE:*Important*things*for*distinction:** A!lease%confers!a!legal!interest!and!a!license%is! merely!personal!permission!to!be!on!the!land.!The! main!disinguishing!feature!between!the!two!is!to! see!whether!exclusive%possession%is!granted!if!it!is.! It!will!be!considered!a!lease.!! Breach*and*Cancellation*-!Lessee!may!seek!to! cancel!under!the!Contractual*remedies*Act*both! CRA*and!PLA*work!together!during!cancellation.! ◊!Lessee!can!seek!to!cancel!under!the!CRA*-!lessor! must!follow!procedure!in!PLA*Must!serve!a!notice! and!EITHER:!Effect!peaceable!entry!OR!go!to!court! for!order!of!possession!-!Lessor!may!apply!for!relief! –!ss*253-257**lessor!may!cancel!and!claim!damages!% 1)!Constructing!agreements:!Exclusive!possession! (EP)!of!the!premises!–!Lease!……!Personal!right!of! (EP)!-!License!

Fatac!Ltd!v!Commissioner!of!Inland!Revenue!–! landmark!judgment!for!the!test!of!a!lease/license!–! Difference%b/t%lease%and%license%-!Where!one! person!grants!a!personal!right!of!exclusive! possession!for!a!fixed!period!of!time,!but!retains! general!control!over!the!premises!this!is!a!LICENCE.! –!has*no*estate*or*interest*in*land.! •Issues!with:!Shopping!malls;!Concession!booth///!! NZ*Fish*and*Game*Council*v*Attorney-*General!-!It is important to stress that in ascertaining whether there is exclusive possession, all the terms of the agreement and the nature of the occupation will be taken into account ! Why*is*this*distinction*important:!Leases%vs% License:%A!lease!is!a!document!creating!an!interest! in!property!for!a!period!of!certain!duration.!Refers! to!the!grating!of!an!interest!in!a!commercial! property!only//!More%detail:!trespass!order!-!leases% you%can%get%a%trespass%order%against%your%landlord,! you!can!mortgage%them,!sublease%them!and!assign% them.!Whereas%licences!are!contractual%and!cannot! be!passed!on!it!is!merely!a!personal!permission!to! be!on!land.!!The!personal!right!will!render!the! occupier!a!licensee!not!a!lessee.!! 2)!Freedom!from!Control:!freedom!from!any! supervisor.!Exceptions!can!be!:!Fatac*Ltd*v* Commissioner*of*Inland*Revenue!:!if!there!are! express!terms!in!a!lease!that!the!occupier!has!to! stipulate!expressly!for!a!right!of!re!entry!for!a! limited!purpose!or!inspection/and!or!repair,!this!is! affirmative!of!exclusive!possession!since!without! this!stipulation!owner!would!have!no!right!to!re! enter!the!premises.!Any!restrictions!in!the!lease!are! the!limited!control!clauses!in!the!lease!such!as! shopping!mall!leases!and!they!are!not!necessarily! incompatible!with!the!lease!–!NZ*Fish*and*Game* !

distinguish!licences!from!leases!for!the!following! reasons:! Part*Performance*of*Lease*-*Part%performance%can% apply%to%agreements%to%lease,%acts%must%be%done% by%the%plaintiff%who%is%seeking%to%enforce%the% contract* • Section%24!of!the!PLA!2007!–!doest!affect!PP!so!no! need!of!written!record!for!enforceability!of!!PP!! • Where!compliance!with!s%24!of!the!PLA!2007! and/or!part!performance!are!in!issue,!these!matters! should!be!pleaded,!since!it!is!a!question!of! enforceability!of!the!agreement,!not!validity.!! T*A*Dellaca*Ltd*v*PDL*Industries*Ltd%[1992]%3%NZLR% 88%(CA):%Tipping!J!undertook!an!extensive!review!of! the!Part!performance!-!the!Court!considers!three! points:! 1.!!Was!there!a!sufficient%oral%agreement!such!as! would!have!been!enforceable!but!for!the!Act?! 2.!!Has!there!been!part%performance%of%that%oral% agreement!by!the!doing!of!something!which:! !(a)!clearly!amounts!to!a!step!in!the!performance!of! a!contractual!obligation!or!the!exercise!of!a! contractual!right!under!the!oral!contract;!and! (b)!when!viewed!independently!of!the!oral!contract! was,!on!the!probabilities,!done!on!the!footing!that!a! contract!relating!to!the!land!and!such!as!that! alleged!was!in!existence.! 3.!!Do!the!circumstances!in!which!that!part! performance!took!place!make!it!unconscionable! (fraudulent!in!equity)!for!the!defendant!to!rely!on! the!Act?!!!!! 1.!General!contract!issues:!Can!you!have!an! “agreement”!in!principle!to!grant!a!lease?:!Oracle! NZ!Ltd!v!Price!Waterhouse!Ltd!(1996)!!

lease!have?! • Acts!of!part!performance!must!be!those!of!the! party!relying!on!the!doctrine!-!Mahoe!Buildings!Ltd! v!Fair!Investments!! “The!act!of!part!performance!must!have!been!done! by!the!plaintiff!...!what!is!required!in!the!case!of! part!performance!is!an!act!by!the!plaintiff,!who!is! seeking!to!enforce!the!contract;!for!if!the!party! refusing!to!perform!the!contract!has!done!the!only! act!of!part!performance,!there!is!no!fraud!but! merely!a!loss!to!himself.”!!•!!Examples!the!types!of! act!that!have!been!invoked!successfully!include!the! lessee!entering!into!possession!of!the!premises,!he! lessor!permitting!continued!occupation,!employing! a!valuer!to!review!the!rent,!and!accepting!rent!at!a! new!rate.!! Types*of*Leases*- *Lease%for%a%fixed%term%–%Start! and!end!dates!of!the!lease!are!clearly!identifiable.! Requires!the!end!date!to!be!either!certain!or! capable!of!being!made!certain!at!the!time!of! creation.!Lease!for!a!ixed!term!does!not!require! continuous!possession,!can!include!a!lease!for!two! specified!weeks!each!year.! Periodic%tenancy%–%The lease!is!for!a!fixed!period,!eg.!One!year,!but!renews! immediately!and!indefinitely!until!notice!is!given.!  Implied%tenancy/Statutory%Lease**(lessee*pays* the*rent)–%There!is!no!valid!lease!agreement,! however!the!lessee!has!possession!and!pays!rent.! An!Implied!tenancy!might!exist!if!the!lease!created! was!invalid.!It!might!also!exist!if!a!fixed!term!or! periodic!lease!expires,!but!the!lessee!remains!in! possession!without!the!lessors!objection.%Prior%2008! –!these!are!treated!as!monthly!periodic!tenancies,! ater!2008!they!are!Statutory!tenancies!and!are! terminated!within!20!working!days!written!notice.!

 Tenancy%at%Will%-%Lessee!has!exclusive!right!of! possession!for!an!indefinite!period.!This!is!generally! found!in!periods!of!transition,!eg.!Where!the!tenant! moves!into!property!while!negotiations!of!the!lease! are!sill!continuing!and!is!not!paying!rent,!or!remains! after!a!short!time!after!the!lease!expires.!Post!2008! these!are!statutory!tenancies,!terminated.....! ‘above’!!  Tenancy%at%sufferance%(no%consent%or%objection% of%lessor%for%lessee%possession%after%the%end%of% lease)%–Consent!is!not!necessarily!found!on!the! basis!that!the!lessor!accepts!rent!(PLA%s213)%If!the! lessor!objects,!the!lessee!will!become!a!trespasser.!!  *“Short*term*leases”*–defined!-!s*207*of*the* Property*Law*Act*–!Less!than!a!year!of!it!can!be!oral! –!s208*-*PLA*2007!////!These!are!for!a!year!or!less! ////!(includes!“statutory!monthly!tenancy”!under!--*s* 210!–3-S.!208!–!form!---!!can!be!oral!or!written!(St!of! Frauds!implications)! -!s*209,*-*effect,*!!--!!Legal*estate!(not!equity)//!!it!as! a!lease!that!commenced!not!later!than!20!days!ater! the!date!of!the!lease!contract,!and!that!is!either,!a! lease!for!a!term!or!one!year!or!less;!a!periodic! tenancy!for!one!year!or!less;!or!a!statutory!tenancy.!! Advantages:!!Can!have!priority!over!other! unregistered!interests!in!the!land!if!the!lessee! enters!into!possession!before!a!caveat!goes!on!the! tile!from!another!party.!……!Doctrine!of!Walsh!v! Lonsdale!-!Can!be!enforceable%where%specific% performance%is%available.!!Treated!as!if!an!equitable! estate!in!the!land,!but!subject/vulnerable!to! equitable!priorities.!  Statutory%tenancies%are%s%210.!!Implied%leases%---% Terminable!at!will.!!Not!really!a!lease!at!all.!!Can!be! terminable!on!20!working!days!written!notice.!!On! !

inconsistent!with!the!statutory!lease.! Rights*and*obligations*in*Leases*:*Covenants% • Covenant:!Obligations!or!promises!in!a!lease.! Common!Law!–!if!the!grant!of!lease!was!conditional! upon!clauses,!the!lease!could!be!terminated!on! their!breach!even!without%a%right%of%re-entry.! • Enforceability!of!covenants:!enforcibility!follows! contract!rules!!covenants!are!created!under!a!deed! or!contract.!if!the!original!covenantor!and! covenantee!are!sill!registered!proprietors!of!the! properties///!If!the!original!covenantee!is!sill! registered!proprietor!of!the!dominant!land,!=!the! covantee!can!sill!claim!the!beneit!of!the!covenant.! This%all%depends%on%the%date%the%covenant%was% entered%into.! *As!a!covenant!is!an!unregistered! interest,!the!new!registered!proprietor!must!also! have!notice!of!the!covenant,!through!either!being! tolf!or!through!the!covenant!being!noted!on!the! certificate%of%tile.! A!covenant!is!an!equitable! interest!and!is!described!under!s%307(a)%of%the%PLA% as!an!unregistered!interests.!S307%(5)%states!that! notification!on!the!tile!does!not!change!this.!! ◊!Subpart%3!----Section%218-221!--!Property%Law%Act% 2007-!!these!sections%apply%to%leases!that!come!into! operation!after!1!Jan!2008!--!s%206%PLA///% * Schedule%3%%-%covenants!apply!to!the!specified! leases!unless!a!contrary!intention%is%expressed! !◊!Implied*Covenants!–*For*leases*entered*into*after* 2008*these*are*found*in*Sch*3*of*PLA**2007:***“Is% implied%%by%the%relationship%of%landlord%and% tenant.”!////!!covenants!implied!in!lease! agreements!through!CL!or!SL!///!Cases!have! suggested!that!actions!that!make!it!more!difficult! for!the!lessee!to!operate!its!business!might!be! breaches!of!this!covenant!!

in!the!lease!agreement%(can%override%implied)* ! Lessor!and!Lessee!can!agree!to!any!additional!terms! they!wish!in!the!lease!contract.!Eg.!Consideration!as! to!whether!alterations!and!improvements!can!be! made,!rent!review!clauses.!  *no!general!implied!covenant!for!a!lessor!to!repair! the!property,!nor!that!the!property!will!be!generally! it!for!purpose.!These!must!be!included!as!Express! Covenants.! ◊!Express%Covenant%for%lessee%take%the%restricted% form.!They!confirm!lessee’s!enjoyment!of!the! premises!during!the!term!without!interruption!from! the!landlord!or!his!agents!so!landlord!has!no!liability! for!interruption!by!other!people!claiming!by!title! paramount!–!Woodhouse!v!Jenkins! ◊!lessee!may!sue!for!breach!of!quite!enjoyment! even!if!in!arrears!with!rent!payments!or!in!breach!of! some!other!covenant.!!!Notice%is%essential%to% activate%these%covenants.! ◊!LESSORS*COVENANTS*:*Implied*or*express*or* combo*of*both*! A*lessor**Ø!Cannot!intimidate!the!tenant;!Ø!Cannot! work!minerals!under!premises;! Ø!Cannot!obstruct!access!to!the!premises;!!Ø!May! have!to!control!acts!of!other!tenants!(in!order!to! give!quiet!enjoyment).!!Ø!May!not!be!able!to!repair! premises!in!too!noisy!a!manner.* ◊!Lessor’s%covenants,%powers,%obligations:% 1)%Quiet%enjoyment%(mostly%express)%%%When%lease% is%silent%-%Quite%enjoyment%of%the%leased%premises:% the*most*fundamental*constructs*of*lease! • Ancient!principle!of!common!law:!!•Is!implied!in!all! grants!(not!just!of!leases)!

(HL)!---!!“Can*not*give*with*one*hand*and*take* away*with*the*other”*! PLA*schedule!three,!CLS*6*and*9:!!•The!statutory! Covenant!for!quite!enjoyment!is!implied!into!lease! by!!S%218%PLA%2007%///%S%281–!is!implied!by!the! relationship!of!landlord!and!tenant!unless!is! displaced!expressed.!•!!Secion!281(2)!of!the! Property!Law!Act!2007!---!!says!a!covenant!is!not! implied!in!a!lease!unless!implied!by!the!Act!or!by! another!enactment.%Applies%to%leases%coming%into% operation%after%1/1/08.!! • S*218-*221!Property!Law!Act!2007!apply!to!leases! that!come!into!operation!after!Jan!2008.!! 1. Nature!of!the!covenant!!-!Covent!secures!the! lessee!against!interruption!by!any!means!(act!or! omissions!of!the!landlord)!in!the!possession!of!the! property!leased.!!!Lessor!must!not!prevent!the! lessee!having!full!use!and!enjoyment!of!the!land! either!through!act!or!omission.!This!will!prevent! lessor!from!interfering!with!the!property!itself.!! 2. Breach!even!if!act!lawful!and/or!reasonably! necessary!–!landlord!may!be!in!the!breach!even!if! the!act!is!necessary!and!is!on!landlord’s!own! property.!! EXAMPLE!:!1)!!Owen!v!Gadd!(scafolding)!–!where! the!landlords,!after!letting!ground-floor!premises!as! a!shop,!caused!scaffolding!to!be!erected! immediately!in!front!of!the!window!and!door!to!the! shop!so!that!urgent!repairs!could!be!undertaken!to! the!upper!part!of!the!same.!The!English!Court!of! Appeal!found!that!the!erection!of!the!scaffolding! was!a!breach!of!the!covenant.!! !!!!!!!!!!!2)!Goldmile!Properties!Ltd!v!Lechouritis![2003]! EWCA!!-!Another!area!of!difficulty!is!!!!!when! landlords!carry!out!repairs!or!other!works!even! !

–!Courts!said!lessor!must!take!all!reasonable!steps! to!minimise!disruption.!! 3. Nan!absolute!covenant!–*It%is%not,%therefore,% an%absolute%covenant!–!IThe!covenant!will%not% protect%the%tenant!against!someone!claiming! through!title!paramount,!and!not!through!the! landlord!-!Southwark!London!Borough!Council!v! Tanner![2001]!! 4. Overlap!with!principle!of!non-derogation! from!grant!-!There!is!considerable!overlap!between! the!covenant!for!quiet!enjoyment!and!the!benefit!of! the!principle!of!non-derogation!from!grant.!Eg:!my! carpark!and!the!roof!belongs!to!the!bar!and!it!is! seeping.!! Westpac!Merchant!Finance!Ltd!v!Winstone! Industries!Ltd!--!!where!the!lessee!of!commercial! premises!complained!of!persistent!problems!with! water!seepage!caused!by!the!poor!state!of!piping! on!the!lessor’s!adjacent!premises.!Ultimately!the! lessor’s!failure!to!replace!the!pipes!resulted!in!the! water!supply!to!the!premises!being!disconnected.! The!lessee!claimed!that!the!lessor!was!in!breach!of! its!covenant!for!quiet!enjoyment.!! Southwark!London!Borough!Council!v!Tanner!Lord! Millett!went!so!far!as!to!say!that!there!is!now!no! difference!between!the!two!principles!at!all,!both! being!based!on!the!idea!that!“a!man!may!not!give! with!one!hand!and!take!away!with!the!other”.! In!Nordern!v!Blueport!Enterprises!Ltd!–facts!–!tenant! co!and!a!brothel!..!land!lord!upper!foolr!to!the! brothel..!use!the!same!walk!way…!!!tentant! defended!on!the!above!basis:!1)!!to!walk!away!from! the!lease!..!2)!!also!claimed!that!this!amounted!to! non-derogation%from%grant!and!that!it!had!lawfully! cancelled!under!the!Contractual!Remedies!Act!1979!

Law!Act!2017!from!1!September!2017)!!..!Judgment!! the!High!Court!found!that!the!facts!amounted!to! both!derogation%from%grant!and!breach!of!the!quiet% enjoyment%covenant.!Elias!J!said!that!this!“will! often,!but!not!inevitably,”!be!the!case.! 5. Remedies....!Remedies!available!to!the! tenant!may!include!an!injunction!(to!stop!the! interference)!or!damages,!including!damages!for! anxiety!and!mental!distress.!-!Southwark!London! Borough!Council!v!Tanner!!///////!Damages!are! compensatory,!to!put!the!plaintiff!in!the!position! that!he!or!she!would!have!occupied!if!the!contract! had!been!fulfilled.!Exemplary!damages!are!not! available!merely!for!breach!of!the!covenant,!but! may!be!available!if!the!tort!of!trespass!has!been! committed.!! 2)%Non%derogation%from%grant%PLA*schedule*three,* CL*8*(generally*implied)**////* *Cancellation%of% derogation%is%under%Contractual%Remedies%Act% 1979%(subpt%3%of%pt%2%of%the%Contract%and% Commercial%Law%Act%2017%from%1%September%2017)% –%Principle%%-%a grantor must not derogate from the grant is an ancient common law one //// EXAMPLE: if A agrees to confer a benefit on B, then A should not do anything that substantially deprives B of the enjoyment of that benefit. Either there will be express easements in such matters or else implied grants. A)!Scope!of!nonderogation!!•!In!the!case!of!leases,!it!is!implied!by! statute,!albeit!that!the!doctrine!is!inherent!in!the! grant!of!a!lease!at!common!law!-!Schedule*three,*CL* 8*/////Mount!Cook!Naional!Park!v!Mount!Cook! Motels!Ltd!!----!Lessor!cannot!interfere!with!any! known!use!of!the!lease!property!---!“The!general! rule!is!that!a!lessor!must!not!voluntarily!prejudice!

permitted!to!do!anything!which!is!inconsistent!with! the!purpose!for!which!the!demised!premises!are! let”.*  !broader!principle!that!“a%man%may%not%give% with%one%hand%and%take%away%with%the%other”,!and! it!has!also!been!described!as!resting!on!common! honesty!and!fair!dealing!-!Johnston!&!Sons!Ltd!v! Holland!1988////!* !!The!effect!of!the!principle! overlaps!to!some!extent!with!the!implied!covenant! for!quiet!enjoyment!,and!the!line!between!the!two! is!often!blurred!-!Westpac!Merchant!Finance!Ltd!v! Winstone!Industries!Ltd///!!However,!the!quotation! above!from!Woodhouse!J!suggests!the!essential! difference!between!derogati...