Belmore Property Co (Pty) Ltd v Allen [1950] HCA 5; (1950) 80 CLR 191 (26 April 1950)

HIGH COURT OF AUSTRALIA

BELMORE PROPERTY CO. (PTY.) LTD. v. ALLEN [1950] HCA 5; (1950) 80 CLR 191

Landlord and Tenant

High Court of Australia
Latham C.J.(1), Dixon(1), McTiernan(1), Williams(1), Webb(1) and Fullagar(1) JJ.

CATCHWORDS

Landlord and Tenant - Building lease - Covenant by lessee to demolish old building and erect new building - Covenant complied with - New building - Fair rent - Relationship of parties - Decision by Fair Rents Board - "Determination" - Prohibition - Rent - Increase - Jurisdiction of Board - Landlord and Tenant (Amendment) Act 1948-1949 (N.S.W.)(No.25 of 1948 - No.21 of 1949), s. 41.

HEARING

Sydney, 1950, April 13, 26. 26:4:1950
APPLICATION for special leave to appeal from the Supreme Court of New South Wales.

DECISION

April 26.
THE COURT delivered the following written judgment:-
This is an application for special leave to appeal against an order of the prohibition directed to a stipendiary magistrate sitting as a Fair Rents Board under the provisions of the Landlord and Tenant (Amendment) Act 1948-1949. The applicant company is in occupation of property in Pitt Street, Sydney, which is subject to an indenture made on 7th October 1912 between the then owner of the premises and the company. This was a building lease under which the lessee covenanted to pull down the buildings then on the land and to erect a new building to cost at least 10,000 pounds. The old buildings were pulled down and the new building was erected. The present landlord made an application to a Fair Rents Board for a determination of the fair rent of the premises. The tenant contended that there was no lease of the buildings now on the land, so that the buildings were not "prescribed premises" within the meaning of the Act, and that the Fair Rents Board had no jurisdiction to increase the existing rent fixed by the contract between the parties. These objections were heard by the stipendiary magistrate who constituted the Fair Rents Board and he ruled against the tenant, the applicant in this Court. The tenant then obtained a rule nisi for prohibition in the Supreme Court on the ground that the owners of the property were not lessors, that there was no lease of the premises and that the premises were not prescribed premises within the meaning of the Act, that the Act did not authorize interference with existing contractual rights in order to increase rent, and that for these reasons the Fair Rents Board had no jurisdiction to entertain the application. (at p196)

2. Upon the return of the rule nisi it was held by the Supreme Court that the rule must be discharged by reason of the provisions of s. 41 of the Landlord and Tenant (Amendment) Act 1948-1949. Section 41 is in the following terms:- "Every determination of a Fair Rents Board or of the Controller shall, except as provided by this Part, be final and without appeal, and no writ of prohibition or certiorari shall lie in respect thereof." In the present case no determination had been made, but the Supreme Court held that the section showed that it was the intention of the legislature that no proceedings before a Fair Rents Board should be subject to prohibition. In our opinion this is not the effect of s. 41. The words of the section in our opinion are clear. They provide, and provide only, that no writ of prohibition or certiorari shall lie in respect of a determination of the Board. They do not prevent or purport to prevent proceedings by way of prohibition before a determination has been made. Once the determination has been made s. 41 operates in the manner explained in R. v. Connell [1944] HCA 42; (1944) 69 CLR 407 ; R. v. Hickman (1945) 70 CLR 598 ; and Boulus v. Broken Hill Theatres Pty. Ltd. [1949] HCA 8; (1949) 78 CLR 177 . But until a determination has been made the section has no operation (cf. Waterside Workers' Federation of Australia v. Gilchrist, Watt & Sanderson Ltd. [1924] HCA 61; (1924) 34 CLR 482, at p 526 ). Accordingly, in our opinion, the Supreme Court should not have held that s. 41 was fatal to the prohibition proceedings. (at p196)

3. But in our opinion special leave to appeal should not be granted. The lease is a building lease and it cannot reasonably be contended that the premises which were erected in pursuance of the covenant in the lease and are now on the land are not premises which were leased on the prescribed dates mentioned in the Act: see ss. 12, 15 and the definitions of "lease" and "prescribed premises" in s. 8. To hold that the lease was not a lease of the existing buildings would be contrary to the intention of the parties as shown by the indenture of lease. There are several places in the Act where the word "premises" is used in the colloquial but incorrect sense of a building. We think however, that it by no means follows that a building erected under a covenant in a building lease is outside the Act. But holding, as we do, that such a building may fall under the Act, it becomes a question for the Controller or the Fair Rents Board whether, when the tenant has built the building in performance of an obligation under the lease, it is fair and just to increase the rent because the existence of the building has increased the letting value of the land. (at p197)

4. There are several provisions in the Act which show that the Fair Rents Board may increase as well as decrease rents. Section 20 authorizes the determination of fair rent by the Controller appointed under the Act subject to an appeal to a Fair Rents Board - s. 30. Section 31 provides that the Board shall hear the appeal and may confirm the determination of the Controller and dismiss the appeal or may determine the fair rent "at such amount as, in the opinion of the Board, is the correct rent of the prescribed premises." Section 15 contains provisions dealing with a case where the rent has been increased or decreased by a determination made before the commencement of the Act: s. 15 (1) and (2). Section 15 (4) provides that until any rent so fixed "is increased or decreased by a determination, the rent so fixed shall be the fair rent of the prescribed premises." Thus the general provision specifying the power of the Fair Rents Board is sufficient to authorize an increase as well as a decrease of rent, and specific provisions of the Act show that the Act contemplates the possible increase of rent by a determination. Accordingly, in our opinion, it is not shown that, if the Fair Rents Board proceeds with the hearing of the application of the landlord, the Board will be acting beyond its jurisdiction. The application for special leave to appeal should be refused. (at p197)

ORDER

Application refused. Applicants to pay the costs of the respondents.