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Tutorials 5 - Tutorial
Property Law (LAW 2112)
Monash University
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TUTORIALS 5 & 6: TOPICS 8-12 LEASES AND LICENCES
Note: there may not be enough time to do all six problems in tutorials 5 and 6. Your tutors will advise you which ones to prepare and the rest can be done in your own time as revision problems.
Question One
Frank is the registered proprietor of a caravan/residential park which he runs as a business. He lives in a house in the park, which is on the same registered title as the park. At the back of the house, but forming part of the house, is an apartment. The apartment has its own exterior entrance and a door with a lock which separates it from the rest of the house. To help with his finances, Frank entered into a written occupation agreement for 4 years with his friend Larry. Larry was to live in the apartment for 4 years and pay Frank $200 per week plus the expenses of maintaining the garden. Frank and Larry have an amicable relationship. Larry often enters the apartment from the house to which he has a key and does not bother to lock the door that separates the apartment from the house. He is also happy for Frank to use the computer in the apartment provided he checks first. Frank often uses the refrigerator in Larry’s apartment to store his beer.
Larry would like to know whether
(a) he has the right to remain in the apartment if Frank sells the property to a new owner, and (b) he can maintain a trespass action against a third party if that person comes into the apartment without his consent?
Question Two
Sharon is an avid supporter of the North Melbourne Football Club. She lives in country Victoria and travels to every game her team plays in Melbourne. When North Melbourne made it to the grand final in 2019, Sharon decided to stay in the city for the night to celebrate. The week before the game she booked and paid for a room at a motel in East Melbourne owned by Paul. Unbeknownst to Sharon, Paul is a fanatical Essendon supporter. After North Melbourne’s convincing victory over Essendon, and en route to her club’s home ground for the celebrations, Sharon arrived at the motel wearing her North Melbourne regalia and humming the club song. When she entered the motel office to check in, she observed a notice on the wall stating that the owner of the motel reserves the right to enter guests’ rooms at any time for any reasonable purpose. However, having observed her attire, Paul informed Sharon in no uncertain terms that he was not prepared to allow North Melbourne supporters to stay at the motel because they would make too much noise and disturb the guests. Sharon remonstrated with Paul and demanded that he hand over the keys to a room, whereupon Paul escorted her off the premises.
Sharon had to bunker down for the night in her club’s old grandstand. She is incensed and comes to you for advice as to whether she can sue Paul for damages for his revocation?
Question Three
Billy owns a retail garden supplies shop at 8 Margaret Street Richmond, Melbourne. His neighbour, Jill, was the owner of a wholesale garden nursery at 12 Margaret Street. Between the two premises at 10 Margaret Street there is a strip of vacant land which was also owned by Jill. In March 2001, Jill and Billy executed a 20-year ‘Occupation Agreement’ concerning the vacant land. For a monthly fee of $500, the agreement allows Billy to use the land to store pot plants for sale to the public. The agreement further provides that Jill is to be the sole provider of pot plants for Billy’s shop. At the time of the agreement, Jill was concerned to protect her commercial reputation by ensuring that the pot plants are in good condition and displayed properly. To that end, the agreement includes the following terms: Clause 8: Jill hereby grants to Billy a licence to use the land only as a display area for garden pot plants. Nothing contained in this agreement shall be construed as granting any estate or interest in the land to be occupied by Billy. Clause 9: Billy shall permit Jill and her authorised representatives to enter and inspect the land at any time outside business hours. In June 2001, Billy fenced off the vacant land so that customers only had access to the pot plants through his shop. Jill was able to access the land from her nursery through a side gate. At the time of fencing the land, Billy said to Jill: ‘I know you want the plants to look good, so feel free to use the side gate and inspect them whenever you like'. However, Jill rarely did so as she did not want to disturb Billy.
In August 2015, Jill passed away after a long illness. Her daughter, Eka, inherited the garden nursery and the vacant land. Eka continues to operate the nursery. She is also the lead singer in a punk rock band which often performs for friends at the back of 12 Margaret Street. In December 2015, Billy comes to see you for legal advice. His employees are complaining about the noise from the band. He would like to sue Eka for breach of the Occupation Agreement. He no longer wants the garden nursery owned by Eka to be the sole provider of his pot plants. Advise Billy: a) Whether the Occupation Agreement is a lease or a licence ( marks). b) Whether Eka is liable to pay compensation for the rock band noise (5 marks). c) Whether Eka can enforce the exclusive pot plant supply arrangement (5 marks). For all of the above, there is no need to consider the Retail Leases Act 2003 (Vic) or the Transfer of Land Act 1958 (Vic). You may assume that there is no privity of contract between Billy and Eka.
Question Four
Bruce owns a large vacant block of land in Ferny Creek. He builds a home and during this time lives in a demountable home that he has moved on to the land. After 3 years, Bruce finishes building his home and moves in. Rather than sell the demountable, he decides to rent it out, as he thinks it more useful to receive rental income over the long term. He signs and registers a seven year lease with Alejandro and Stefani who move in on 6 July 2018. The lease provides as follows:
Clause 1: The Residential Tenancies Act 1997 (Vic) does not apply. Clause 2: This lease commences on 6 July 2018 and determines on 6 July 2025, or earlier by agreement.
3 the rental is $3,280 per calendar month in advance.
3 there is no option to renew.
The landlord contends that the Retail Leases Act 2003 (Vic) does not apply to the lease.
Discuss
Question Six
In January 2020, Larry decided to invest in a factory-warehouse at Geelong. He was registered as sole owner under the Transfer of Land Act 1958. In August 2020, Larry executed a deed of lease of the Geelong factory to Trendy Gear Pty Ltd for a term of 6 years. The lease was registered. Trendy Gear Pty Ltd were manufacturers of low cost clothing. The lease specified that the premises were to be used as a manufacturing plant and Clause 7 of the lease required Larry at the request of Trendy Gear Pty Ltd to install a reinforced concrete floor “to support its heavy equipment”.
In December 2020 Trendy Gear sold the clothing business to Baby Boomers Pty Ltd and with Larry's consent assigned the balance of the term of the lease to Baby Boomers Pty Ltd. The assignment was registered under the Transfer of Land Act. In February 2021, Larry decided to sell the Geelong premises. He entered into a contract with Richard for the sale of the land and factory for one million dollars. Settlement of the sale took place on 15 May 2021 and Richard registered his transfer shortly afterwards. Richard then wrote and notified Baby Boomers Pty Ltd of the change of ownership. Baby Boomers Pty Ltd wrote back asking Richard to install the reinforced concrete floor in accordance with Clause 7 of the lease. When Richard refused, Baby Boomers Pty Ltd stopped paying him rent
a) In March 2021, Baby Boomers decide they want the reinforced concrete floor installed. Can they compel Larry to install the floor?
b) If Larry refused to install the concrete floor and Baby Boomers stopped paying rent in April 2021, could Larry sue to recover the arrears of rent from:
(i) Trendy Gear Pty Ltd; or (ii) Baby Boomers Pty Ltd.
c) If Trendy Gear Pty Ltd did not assign the lease and stayed on as the tenants, could they compel Richard to install the concrete floor? If Richard refused to install the concrete floor and Trendy Gear then stopped paying rent, could Richard sue Trendy Gear to recover the arrears of rent?
Tutorials 5 - Tutorial
Course: Property Law (LAW 2112)
University: Monash University
