The Commonwealth v. Oldfield

(1976) 10 ALR 243
(1976) 50 ALJR 535
133 CLR 612
40 LGRA 269

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(Judgment by: McTiernan J) Court:

Judges: Mason J
Gibbs J
Stephen J
Jacobs J

McTiernan J

Judgment date: 8 April 1976

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Judgment by:
McTiernan J

The question for decision is what is the meaning of the word "improvements" in cl 2(d) of a lease of land in the Australian Capital Territory, the appellant being the lessor and the respondent the lessee of the land. Clause 2(d) reads:-

2.

THE Commonwealth covenants with the lessee-

(d)

if any land is withdrawn from this lease pursuant to paragraph (g) of clause 3 of this lease, to pay to the lessee the value at the date of the withdrawal of all fixtures and erections on, and of all improvements on or effected by the lessee or by a prior lessee under this lease or under a prior lease of the land to, the land so withdrawn, except such fixtures, erections and improvements, if any, as are expressly excepted from the purchase by the lessee under paragraph (j) of Clause 1 of this lease and except such fixtures, erections and improvements as are removed by the lessee in pursuance of paragraph (e) of this clause, such value to be ascertained by agreement or in default of agreement by arbitration under the provisions of the laws for the time being in force in the said Territory relating to arbitration;

The word "improvements" is found in combination with the words "fixtures" and "erections" throughout the lease. None of the words "fixtures", "erections" or "improvements" is defined in the lease. To ascertain what the parties may be presumed to have intended by the combination of words "fixtures, erections and improvements", or each of them, the lease as a whole must be looked at. The combination appears in cll 1(j), 1(m), 2(c), 2(d), 2(e), 2(f), 3(k) and 4. These read:-

1.

THE lessee covenants with the Commonwealth-

(j)

to purchase from the Commonwealth for the price or sum of five hundred and seventy seven pounds fifteen shillings (in this lease called the purchase money) such of the fixtures, erections and improvements on the said land as at the commencement of the said term were the property of the Commonwealth excepting boundary fence between points Q-R-S-T-U-V-W-X-Y-Z as shown on the said plan annexed hereto.

...

(m)

to pay to the Commonwealth on demand any expense that may be incurred by the Commonwealth in making good any damage that may be caused to the said land through any fixture erection or improvement being removed pursuant to paragraphs (e) or (f) of Clause 2 of this lease and to pay to the Commonwealth on demand any expense that may be incurred by the Commonwealth in making good any damage that may be caused to any fixture, erection or improvement on the said land the value of which the Commonwealth is required to pay to the Lessee pursuant to paragraph (c) or paragraph (d) of Clause 2 of this lease through any fixture erection or improvement being so removed after the expiration or sooner determination of the said term referred to in the said paragraph (c) or after the date of the withdrawal referred to in the said paragraph (d).

...

2.

THE Commonwealth covenants with the lessee-

...

(c)

to pay to the lessee at the expiration or sooner determination of the said term the value at such expiration or determination, as the case may be, of all fixtures and erections on, and of all improvements on or effected by the lessee or by a prior lessee under this lease or under a prior lease of the land to, the land comprised in this lease at such expiration or determination, except such fixtures, erections and improvements, if any, as are expressly excepted from the purchase by the lessee under paragraph (j) of clause 1 of this lease and except such fixtures, erections or improvements as are removed by the lessee in pursuance of paragraph (f) of this clause, such value to be ascertained by agreement or in default of agreement by arbitration under the provisions of the laws for the time being in force in the said Territory relating to arbitration;

(d)

[this is quoted above]

(e)

that if any land is withdrawn from this lease pursuant to paragraph (g) of clause 3 of this lease, the lessee may, but it shall not be obligatory on the lessee so to do, within seven days after the withdrawal or within such further time as the Minister may in writing allow, remove from the land so withdrawn any fixtures, erections or improvements thereon;

(f)

that the lessee may, but it shall not be obligatory on the lessee so to do, at any time during the said term or within seven days or such further time as the Minister may in writing allow after the expiration or sooner determination of this lease, remove from the land then comprised in this lease any fixtures, erections or improvements on the said land purchased from the Commonwealth if the purchase money payable for such fixtures, erections or improvements has been paid in full to the Commonwealth and remove from the land then comprised in this lease any other fixtures, erections or improvements;

...

3.

IT IS MUTUALLY COVENANTED AND AGREED-

...

(k)

that if any land is withdrawn from this lease pursuant to paragraph (g) of this clause, the lessee shall not be entitled to any compensation in respect of the land withdrawn or, except as provided in paragraph (d) of clause 2 of this lease, in respect of any fixture, erection or improvement on the land withdrawn;

4.

In consideration of the covenants and agreements on the part of the Commonwealth contained in paragraphs (c) and (d) of clause 2 of this lease, the lessee releases and forever discharges the Commonwealth from all liability it is or but for this release could or might have been under by virtue of anything contained in any other lease or otherwise to pay compensation except as provided in this lease for any fixture, erection or improvement which now is or at any time was on the land hereby leased.

I do not think the word "improvements" is to be construed in reference to the Land Tax Assessment Act 1910 (Com), as amended from time to time, which contains a definition of "improvements". The text of that Act is entirely disparate from the text of the present lease (see s 3 of that Act).

The parties contemplated the word "improvements" to have a meaning appropriate in the context of the various clauses quoted above. But not wider meaning than that. I think that what are called "pasture improvements" do not fall within the definition of "improvements" as contemplated by the parties in cl 2(d).

I would allow the appeal in part.