Scott v Irom [1968] HCA 24; (1968) 121 CLR 247 (10 May 1968)

HIGH COURT OF AUSTRALIA

SCOTT v. IROM [1968] HCA 24; (1968) 121 CLR 247

Landlord and Tenant

High Court of Australia
Barwick C.J.(1), McTiernan(2), Kitto(3), Taylor(4) and Owen(5) JJ.

CATCHWORDS

Landlord and Tenant - State legislation based on National Security (Landlord and Tenant) Regulations - Recovery of possession of prescribed premises - Notice to quit - Grounds - Premises reasonably required by lessor - Premises reasonably required for reconstruction or demolition - Appropriate ground - Landlord and Tenant (Amendment) Act, 1948-1967 (N.S.W.), s. 62 (5) (g) (ii), (m)*.

HEARING

Sydney, 1968, March 14;
Melbourne, 1968, May 10. 10:5:1968
APPEAL from the Supreme Court of New South Wales.

DECISION

May 10.
The following written judgments were delivered:-
BARWICK C.J. I have had the advantage in this case of reading the reasons Owen. The facts and circumstances of the matter are there fully set out and need no repetition. I entirely agree with the reasoning and the conclusions expressed and reached by each of my brothers and would not wish to add anything to what they have written. In my opinion, the appeal should be allowed both because the precise findings of fact made by the magistrate do not justify his conclusion that the appellant required the demised premises for occupation by itself or its associated company and not for demolition and because, even on the assumption that the appellant did intend that its associated company should occupy a portion of the new building which would include all space formerly enclosed in the demised premises, such an intention did not deny the proposition that it required demised premises for demolition within the meaning of the Landlord and Tenant (Amendment) Act. (at p253)

McTIERNAN J. I concur in the reasons for judgment of my brother Kitto and would therefore dismiss the appeal. (at p253)

KITTO J. This is an appeal from a judgment of the Supreme Court of New South Wales (Court of Appeal) (Scott v. Irom (1967) 69 SR (NSW) 133; 87 WN (Pt 2) 183 ) answering in the negative a question which had been submitted to that Court by a case stated under the Justices Act (N.S.W.), whether the decision of a magistrate dismissing a lessor's application for the recovery of certain "prescribed premises" under Pt III of the Landlord and Tenant (Amendment) Act, 1948-1967 (N.S.W.) was erroneous in point of law. The magistrate had held that the notice to quit upon which the lessor relied as having determined the tenancy of the premises was ineffectual for the reason that the only ground upon which it purported to be given was not substantiated by the evidence. The ground was that which is provided by par. (m) of s. 62 (5), namely "that the premises are reasonably required by the lessor for reconstruction or demolition". According to authority which was binding upon the magistrate and is binding upon this Court, par. (m) is impliedly limited by par. (g) (ii), which provides as a ground for a notice to quit "that the premises - not being a dwelling-house - are reasonably required for occupation by the lessor or by a person associated or connected with the lessor in his trade, profession, calling or occupation". The premises here in question were not a dwelling house. They are described as having consisted of a shop on the ground floor of Bull's Chambers, Martin Place, Sydney. (at p253)

2. The magistrate was satisfied that the premises were reasonably required in order that the shop, in common with the rest of Bull's Chambers, might be demolished and a new five-storey building erected on the site; but he found also that the appellant proposed to use the whole of the five-storey building, except possibly the top storey, for its own occupation (or for occupation by one or more of certain companies associated with it in its trade, calling or occupation) at least until, after adjoining buildings which it owned should have been demolished in their turn, a new multistoreyed building should have been erected. This building, the greater part of which was to be erected on the adjoining site, would extend over the Bull's Chambers site so as to incorporate the five-storey building, and when the whole edifice was complete a part of it, not yet determined, was to be occupied by the appellant and its associated companies, and the rest was to be let to strangers. On finding to this effect the magistrate held that the case fell within par. (g) (ii), and that therefore, according to the binding authority above referred to, it did not fall within par. (m). (at p254)

3. The authority is the decision of the Privy Council, given upon similar New Zealand legislation in the case of McKenna v. Porter Motors Ltd. (1956) AC 688 , which this Court held in Morris v. English, Scottish & Australian Bank Ltd. [1957] HCA 93; (1957) 97 CLR 624 must be accepted as governing the construction of s. 62 of the New South Wales Act. McKenna's Case (1956) AC 688 was one in which the demised premises consisted of a parcel of land with a hotel upon it, and the lessor required possession in order to demolish the hotel and build on the land a garage for the lessor's own occupation. The ground in par. (m) could not be relied upon, for the New Zealand Act made that ground conditional upon suitable alternative accommodation being available to the lessee and none was in fact available. The only question therefore was whether the lessor could succeed upon the ground in par. (g) (ii). (I shall use throughout the distinguishing letters of the New South Wales Act.) The lessee contended that par. (g) (ii) was inappropriate to the case because "the premises" meant the whole subject matter of the lease, namely the land plus the building, and since the lessor company did not intend to occupy the building it could not be held to require "the premises" (i.e., as a whole) for its own occupation. The lessor agreed that "the premises" comprised the land and the building, but contended that to require the whole in order to demolish the building with a view to its own occupation of a new building to be erected in its place was to require the premises for its own occupation. The Privy Council indorsed the view of both parties that "the premises" meant the subject matter of the lease, including the building, and accepted the lessor's contention as to what constituted requiring that subject matter for its own occupation. As I understand the judgment, their Lordships considered that although demolishing a building is part of the occupation both of the land and of the building it is not, within the meaning of par. (g) (ii), an occupation by the lessor or by a person associated with it, unless its purpose is to enable a new building to be erected for occupation by the lessor or by such a person. If that be not its purpose, their Lordships held, the appropriate ground for a notice to quit is the ground in par. (m); but e converso if that be its purpose the ground in par. (m) is inappropriate to the case. Their Lordships evidently considered that the paragraphs had to be construed so as not to overlap, presumably because the provision as to the availability of alternative accommodation applied to the one but not to the other; and to achieve that result they held that par. (g) (ii) limited the operation of par. (m) to cases where the lessor required the premises for reconstruction or demolition for the purpose of making provision for occupation by persons other than himself and his associates. (at p255)

4. Save that under the New South Wales Act the necessity for alternative accommodation to be available is attached to par. (g) (ii) instead of par. (m), no relevant distinction between the two statutes exists, so far as I can see. Accordingly the first step we are required to take in this case is to determine what was the subject matter of the lease. The stated case is silent as to the nature and size of Bull's Chambers, as to the dimensions and exact location of the shop, and as to the exact words of the tenancy agreement; but it was common ground on the hearing of the appeal and, we are assured, before the Supreme Court that Bull's Chambers is a building of several storeys, that the shop was slightly elevated above street level, with a basement beneath it, and that at the time of the letting the parties did not express themselves more precisely as to the parcels than by agreeing that "the shop" should be the subject of the weekly tenancy. The laconic expression "the shop" embraced, I should have thought, the entity consisting of (at least) the inner surfaces of the walls, ceiling and floor. It may have included even more of the walls, ceiling and floor: cf. Carlisle Cafe Co. v. Muse Bros. & Co. (1897) 67 LJ Ch 53 ; Hope Bros. Ltd. v. Cowan (1913) 2 Ch 312 ; Goldfoot v. Welch (1914) 1 Ch 213 , but it certainly did not include anything above the ceiling or beneath the floor: cf. Doe d. Freeland v. Burt (1787) 1 TR 701 (99 ER 1330) ; Devonshire (Duke) v. Pattinson (1887) 20 QBD 263, at pp 273,274 . I do not doubt that the lease entitled the lessee to the exclusive right to occupy the space within the shop, for the enjoyment of that space was, in the nature of things, essentially involved in the enjoyment of the structure as a shop; but I see no need to decide whether the space, considered by itself, was part of the demised property. Though "the shop" is no doubt a corporeal hereditament: Co. Litt. 48b; Shep. Touch. 206, the correct view may be that it is so only as a structure, as "physical matter over which ownership is exercised": cf. Megarry and Wade, Law of Real Property, 3rd ed. (1966), pp. 12, 680; Izon v. Gorton [1839] EngR 685; (1839) 5 Bing (NC) 501, at p 507 [1839] EngR 685; (132 ER 1193, at p 1195) ; Resumed Properties Department v. Sydney Municipal Council (1937) 13 LGR (NSW) 170 ; Re Lehrer and the Real Property Act (1961) SR (NSW) 365 ; and compare the views of Viscount Simon and Lord Wright with those of Lord Russell and Lord Goddard in Cricklewood Property and Investment Trust Ltd. v. Leighton's Investment Trust Ltd. (1945) AC 221 . But whether or not it was only the structure of the shop or that structure plus the contained space that was the subject matter of the lease, the question which McKenna v. Porter Motors Ltd. (1956) AC 688 poses for us is whether, on the magistrate's findings, the lessor should be held to require the premises for occupation in order to demolish the structure and then have the space physically enjoyed, by means of a new building, by either its own or an associated company's officers and employees. This is a question of the character of the occupation which the lessor wishes to have up to the time when, by reason of the demolition of the structure, the subject matter of the lease will no longer exist or (if this be the better view) will no longer exist as a whole. (at p256)

5. I cannot see any escape from answering this question, in either form, in the negative. The effect of the findings is that the appeallant required the whole of the leased premises, whatever they were, for the purpose of demolishing the walls, ceiling and floor and then enclosing the space of the shop, together with other space, within the new five-storey building as part of a programme involving an occupation of all the space, including that formerly belonging to the shop, by the appellant or some associated company, this occupation to be followed at an indefinite time either by a continuing occupation by the appellant (or an associate) or an occupation by a stranger. I have not overlooked the fact that the top storey of the five-storey building may (and I am prepared to assume even that it will) be let to a stranger pending the completion of the multi-storey building. We have been told that the former building will have its foundations thirty feet below ground level, but even if this be so it affords no ground for concluding in favour of the appellant, who bears the onus of proof, that the shop space will not be within the four lower storeys. (at p256)

6. If the notice to quit had been given on the ground provided by par. (g) (ii), the magistrate's findings would, I think, clearly have enabled the appellant to say that it had made that ground good. The possibility that after the completion of the whole multi-storey building the space which formerly was the space of the shop would be let to some stranger would have had no materiality, for the situation would nevertheless have been that the appellant requires the shop for a form of occupation (demolition) which is to be directed to serving its own (or an associate's) accommodation needs for an indeterminate period. (at p257)

7. It is not for us to speculate as to whether, having regard to the decision of the House of Lords in Betty's Cafes Ltd. v. Phillips Furnishing Stores Ltd. (1959) AC 20 , the Privy Council would be likely to overrule McKenna v. Porter Motors Ltd. (1956) AC 688 and hold that the several grounds provided by the paragraphs of s. 62 (5) are "entirely separate and independent". That is a question for their Lordships, and it is complicated by the fact that since 1958, when this Court applied McKenna v. Porter Motors Ltd. (1956) AC 688 in the construction of the New South Wales Act, the Act has been amended no fewer than six times, and s. 62 itself has been amended on at least three occasions when one would have expected an amendment of par. (m) to be made if the legislature had been dissatisfied with the meaning that had been assigned to it; yet par. (m) has been left in unaltered form. (at p257)

8. In my opinion the Court of Appeal was right in applying the Privy Council's decision to the facts of this case, and the appeal to this Court should be dismissed. (at p257)

TAYLOR J. The respondent so far has been successful in resisting the appellant's attempts in proceedings instituted under the Landlord and Tenant (Amendment) Act to obtain possession of premises the subject of a lease to him by the appellant. The "premises" consist of a shop in Bull's Chambers, one of three buildings in Martin Place which the appellant proposes to demolish and then, in stages, erect upon the site a modern building part of which would be occupied by it and other associated companies and part of which would be let for commercial and business purposes. The shop is on the ground floor of Bull's Chambers and, apparently, consists of one room. Whether, as is likely, there are basement floors underlying the ground floor does not clearly appear. (at p257)

2. A notice to quit served upon the respondent alleged, in conformity with s. 62 (5) (m) of the Act, that "the premises are reasonably required by the lessor for demolition", and the accompanying particulars set out the proposal which the appellant had in mind:

"Particulars (inter alia): The lessor proposes first to
demolish the building, Bull's Chambers, in which the subject
premises are located and later the adjoining buildings -
22/24 Martin Place, E.S. & A. Bank Chambers (corner of
Martin Place and Pitt St.) and Scot Chambers (94-96 Pitt
St.). It will progressively erect on the whole area commencing
with the Bull's Chambers and possibly 22/24 Martin Place
sites a large modern building of offices etc. for letting purposes
which will put the site to better and more economic use whilst
meeting the needs for more office space for The English Scottish
and Australian Bank Ltd. and its subsidiary companies.
The lessor company and its associated companies will occupy
a portion of such building and the remaining portion will be
let for business and commercial purposes. Advanced design
drawings for the proposed new building have already been
prepared and a building programme fixed by the architects.
Same may be inspected upon appointment. The lessor
requires possession of the subject premises accordingly."

It was found by the magistrate that the lessor proposed to erect the new building in two stages, the first stage involving the demolition of Bull's Chambers and part of one building upon other adjoining land.

"This building", he said, "which will substantially stand
on the site of Bull's Chambers will have five floors, and before
the completion of the multi-storey building, will be used
substantially to accommodate the business of The English,
Scottish and Australian Bank Ltd. at present being conducted
in part of the building purchased from the London Bank of
Australia Ltd. (in liquidation). Immediately the first stage
building of five floors has been constructed and substantially
occupied by the said bank with the possible letting of the top
floor to a tenant, the demolition of the buildings upon the
other two parcels of land will be proceeded with and later the
multi-storey building will be erected on such site. Before
the construction is completed, the two buildings will be
integrated and will eventually all be one building. The
completed new multi-storey building will then", he said,
"be occupied as to part by the said Bank and its associated
companies, and as to the balance will be let for general purposes
to the public."

Further, he found that the lessor reasonably required the premises to demolish the same in order to carry out its proposals. He

". . . considered the first stage of the work, namely the
construction of the five floor building substantially upon the
site of Bull's Chambers only could not be regarded as the
construction of a building in itself but would be integrated
with and form part of the large multi-storey building which
would occupy the whole of the sites of the three parcels of
land above referred to."

Thereupon he expressly

". . . found that a substantial part of the multi-storey
building would be occupied by the lessor and its owning
company The English, Scottish and Australian Bank Ltd.
which is a company associated or connected with the lessor
in its trade, profession, calling or occupation and that the
remaining part of the building would be used for general
letting purposes to the public." (at p259)

3. The information, however, was dismissed because the magistrate held that the ground prescribed by s. 62 (5) (m) had no application in the circumstances of the case. In his view, since it appeared that the appellant required possession of the premises for demolition with the intention of erecting upon the site a multi-storey building which would be used when completed as to part thereof for occupation by the lessor or associated companies and as to the remaining part thereof for general letting purposes to the public, the only ground available to the appellant was that prescribed by s. 62 (5) (g) (ii), namely,

". . . that the premises not being a dwelling-house are
reasonably required for occupation by the lessor associated
or connected with the lessor in its trade, profession, calling
or occupation." (at p259)

4. The magistrate's findings of fact did not, in my view, justify his final conclusion which, no doubt, was induced by the decision in McKenna v. Porter Motors Ltd. (1956) AC 688 . It is important to point out that the "premises" for the purposes of s. 62 (5) (m) are the leased premises of which possession is sought and the magistrate did not find that the appellant required these "premises" for the occupation by the lessor or its associated companies; he simply found that the completed building would, as to some unspecified part, be occupied by them and that the balance would be let for commercial and other purposes to the general public. It is true that it is implicit in his finding in par. 1 (p) of the case stated that it was probable that The English, Scottish and Australian Bank Ltd. would temporarily occupy the ground floor of the five-storey building to be erected on the site of Bull's Chambers as the first stage in the work of reconstruction. But he appears, correctly in my view, to have regarded this merely as an incident of the development of the whole site and his final conclusion rests upon the fact that the completed multi-storey building would be occupied as to part by the Bank and its associated companies and as to the balance would be let for general purposes. (at p260)

5. The result of such a decision, it seems to me, is that where various parts of a building are leased to different tenants and the landlord wishes to obtain possession of the whole for the purposes of demolition and reconstruction, ground (m) will not be available if he proposes to occupy some part of the new building. If this be a correct conclusion it would mean also that ground (g) (ii) would not be available since he could not establish that the building as a whole was required for his own occupation. In my view the magistrate's decision was not justified by the decision in McKenna's Case (1956) AC 688 . Further that decision would seem to have no application where it appears that the work of demolition will result, as in this case, in the disappearance of the demised premises (cf. Woodfall - Landlord and Tenant, 26th ed (1960), p. 1017). (at p260)

6. In Morris v. English, Scottish and Australian Bank Ltd. [1957] HCA 93; (1957) 97 CLR 624 , where the facts were similar to those in McKenna's Case (1956) AC 688 this Court felt bound to follow the decision in that case. But it is sufficient to say that the present case is clearly distinguishable and I agree with the observations of Owen J. on this point. (at p260)

7. For myself I feel bound to venture the observation that McKenna's Case (1956) AC 688 is ripe for reconsideration. It was decided in July 1956 and it was decided without any apparent reference to Fisher v. Taylors Furnishing Stores Ltd. (1956) 2 QB 78 - which was decided some four months earlier - and there are observations in that case which appear to me to be inconsistent with the reasoning in the former case. These observations were the subject of express approval in the later case of Betty's Cafes Ltd. v. Phillips Furnishing Stores Ltd. (1959) AC 20 , and I find the decision in that case difficult, if not impossible, to reconcile with the decision in McKenna's Case (1956) AC 688 . Further, it seems to me that the observations of Williams J. in Burling v. Chas. Steele & Co. Pty. Ltd. [1948] HCA 3; (1948) 76 CLR 485, at p 490 played a not insubstantial part in the decision in the latter case and that learned judge has since indicated that his earlier observations were not as precisely expressed as they should have been and has explained that he did not mean that ground (m) was not available to a landlord who wished to demolish and reconstruct premises for his own occupation (Morris v. English, Scottish and Australian Bank Ltd. (1957) 97 CLR, at pp 630-632 and Felser v. Homes Pty. Ltd. Noted, (1953) 27 ALJ, 116, 117 ). (at p260)

8. In my view the appeal should be allowed, the order of the magistrate set aside and the matter remitted to him to proceed according to law. (at p261)

OWEN J. This appeal by special leave raises questions as to the interpretation of s. 62 (5) (m) of the Landlord and Tenant (Amendment) Act as it stood in June 1967 when the appellant lessor, by its agent Scott, served a notice to quit upon one of its tenants, the respondent. (at p261)

2. By s. 62 (5) (g) (ii) one of the prescribed grounds upon which a notice to quit may be given by a lessor is,

". . . that the premises - not being a dwelling-house, are
reasonably required for occupation by the lessor or by a
person associated or connected with the lessor in his trade,
profession, calling or occupation."

And, by s. 62 (5) (m), another such ground is,

". . . that the premises are reasonably required by the lessor
for reconstruction or demolition."

The word "premises" where used in these provisions means the premises which are the subject matter of the lease: McKenna v. Porter Motors Ltd. (1956) AC 688 . The facts are that the appellant was, at all relevant times, the owner of a city building known as Bull's Chambers and of several adjoining buildings. The respondent was the lessee from the appellant, under a weekly tenancy, of a room in Bull's Chambers in which he carried on business as a shopkeeper, the room presumably being defined by its floor, walls and ceiling. (at p261)

3. The appellant a wholly-owned subsidiary of The English, Scottish and Australian Bank Ltd., to which I shall refer as "the Bank", decided to demolish Bull's Chambers and the adjoining buildings of which it was the owner and to erect a large modern office building on the site on which these buildings stood. It was intended that the Bank should occupy a portion, apparently the first four floors, of so much of the new building as would be erected on the site made available by the demolition of Bull's Chambers and that the remainder of the new building would be let to others for commercial and business purposes. (at p261)

4. The notice to quit served by the appellant upon the respondent was based upon s. 62 (5) (m) and alleged that the premises, the subject of the notice, were reasonably required by the appellant for demolition and this the learned magistrate found to be the fact. He was of opinion, however, that the appellant could not recover possession of the room occupied by the respondent because the Bank, which admittedly was "a person associated or connected with" the appellant in its trade, calling or occupation would, when the new building was completed, occupy portion of it. In these circumstances his Worship considered that the appellant could not avail himself of the ground set out in s. 62 (5) (m) and that the notice to quit should have been based upon s. 62 (5) (g) (ii), that is to say that the room, not being a dwelling house, was reasonably required for occupation by the Bank. (at p262)

5. The learned magistrate and, on appeal by way of stated case, the Court of Appeal felt compelled to reach this conclusion by the decision of the Privy Council delivered by Lord Somervell in McKenna v. Porter Motors Ltd. (1956) AC 688 which this Court felt bound to follow in Morris v. English, Scottish and Australian Bank Ltd. [1957] HCA 93; (1957) 97 CLR 624 . Had it not been for those two cases I would have felt no doubt that, on the findings made by the learned magistrate, the appellant was entitled to succeed. It reasonably required the room leased to the respondent for demolition, not for occupation by itself or the Bank. It proposed to demolish the floor, walls and ceiling of that room along with the rest of the building and the fact that, when the new building was erected, it was intended that the Bank should occupy a portion of the new building which would or might contain within it some or all of the air space which was formerly contained within the floor, ceiling and walls of the room occupied by the respondent would, I would have thought, have been an irrelevant consideration. The words of s. 62 (5) (m) are clear and, with respect, there would appear to be no need to read into the paragraph something in the nature of a proviso to the effect that it is not to be available if it appears that the lessor or some person associated with him in his trade, profession, calling or occupation intends, after the premises demised have been demolished and replaced by a new building, perhaps with floor levels different from those in the existing building, to occupy the whole or some part of that building. This seems to me to accord with the view expressed in a passage in the judgment of Parker L.J. in Fisher v. Taylor's Furnishing Stores Ltd. (1956) 2 QB 78, at pp 91, 92 , which was referred to with approval by Lord Morton, Lord Somervell and Lord Denning in Betty's Cafes Ltd. v. Phillips Furnishing Stores Ltd. (1959) AC 20 and with which I respectfully agree. Each of these cases was concerned with a statutory scheme under which a tenant of business premises might, in certain circumstances, serve upon his lessor a request for a new tenancy to replace that under which he had formerly occupied the premises. The Act provided that in such circumstances the lessor might oppose an application to the court for the grant of a new tenancy on various grounds. These included ground (f) that "the landlord intends to demolish or reconstruct the premises comprised in the holding . . . and cannot reasonably do so without obtaining possession of the holding", and ground (g) that "the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence". What Parker L.J. had said in Fisher's Case was as follows:

"From the scheme of the Act as there laid down I should
have thought that it was clear, apart from authority, that if
any of those grounds of objection is established, the
tenant's application for a new lease must fail. Each ground
is entirely separate and independent, and each, if proved,
entitles the landlord to succeed. Thus, if ground (f) is
proved to the satisfaction of the court, it matters not to
what use the landlord ultimately intends to put the holding.
He may intend to let it when the work is done to a third
party. He may intend ultimately to occupy it himself for his
own business; or he may not have made up his mind at all. To
suggest that, if his intention is ultimately to occupy it
himself and he cannot by reason of sub-s. (2) of s. 30 rely
on ground (g), he is thereby debarred from relying on ground
(f), is to apply a proviso to the operation of ground (f)
which is not there and for which there is no warrant."
(1956) 2 QB, at p 91

I find it difficult to reconcile what was said by Parker L.J. with some of the statements, to which I will presently refer, appearing in Lord Somervell's judgment in McKenna's Case (1956) AC 688 . Moreover it is plain that in that case the interpretation which was placed upon a provision in the Tenancy Act of New Zealand corresponding to s. 62 (5) (m) of the New South Wales Act was based upon an implication which their Lordships thought was to be extracted from a passage in the judgment of Williams J. in Burling v. Chas. Steele & Co. Pty. Ltd. [1948] HCA 3; (1948) 76 CLR 485, at p 490 , an implication which his Honour on two occasions, one before and one after the decision in McKenna's Case (1956) AC 688 , said that he had not intended: See his Honour's remarks Noted, (1953) 27 ALJ, pp 116, 117 , when agreeing that special leave to appeal should be refused in Felser's Case (Sub nom. Felser v. Walker) (1953) 53 S.R. (N.S.W.) 155. , and his judgment in Morris' Case (1957) 97 CLR, at p 632 . I should add that Felser's Case (Sub nom. Felser v. Walker) (1953) 53 S.R. (N.S.W.) 155. was one in which the Full Court of the Supreme Court of New South Wales had held that s. 62 (5) (m) applied to a case in which a lessor reasonably required possession of premises in order to demolish them and erect a new building in their place and that it was not to the point that he, or a person associated with him in his trade or business, intended to occupy the new building. And it was a decision against which, as I have already said, this Court refused to grant leave to appeal. I have mentioned these matters because, while I agree that we are bound by McKenna's Case (1956) AC 688 , they cause me to take the view that we should, with all respect, treat their Lordships' decision as limited in its application to the particular facts with which they had to deal and not give it any wider application than is necessary. The Tenancy Act 1948 of New Zealand which was there under consideration contained provisions limiting the right of a lessor to recover possession of demised premises and specified various grounds upon which possession might be recovered. One of these grounds, ground (h), corresponded with ground (g) (ii) of the New South Wales Act and another, ground (m), corresponded with ground (m) of that Act. The facts were that the premises demised consisted of a parcel of land upon which stood an hotel. The lessors sought to recover possession under ground (h), alleging that they required the premises for their own occupation. Their intention was to demolish the hotel and build a garage in place of it for the purposes of their business. What was decided by the Privy Council was that they were entitled to rely upon ground (h) notwithstanding the fact that when they recovered possession of the premises leased, namely the land and the hotel, they proposed to demolish the hotel and replace it with a garage. In the course of his judgment, however, Lord Somervell said that ground (m) of the New Zealand Act - which corresponded with ground (m) in s. 62 (5) of the New South Wales Act - should be limited in its operation in the way in which his Lordship thought Williams J. in Burling v. Chas. Steele & Co. Pty. Ltd. [1948] HCA 3; (1948) 76 CLR 485 had limited the operation of a similar provision in the National Security (Landlord and Tenant) Regulations which corresponded with what is now ground (m) of the New South Wales Act, that is to say that it should not be applied to "all demolition or reconstruction cases" but only to those cases in which the lessor required the premises for demolition or reconstruction with a view to letting or selling them or making some use of them other than for his own occupation or the occupation of a person associated or connected with him in his trade, profession, calling or occupation. It might well be thought that what their Lordships said as to the meaning of ground (m) of the New Zealand Act was obiter but it was an interpretation which this Court in Morris v. English, Scottish and Australian Bank Ltd. [1957] HCA 93; (1957) 97 CLR 624 felt bound to accept. In Morris' Case [1957] HCA 93; (1957) 97 CLR 624 , however, the facts were for all material purposes identical with those in McKenna's Case (1956) AC 688 , since the subject matter of the demise comprised land with the buildings thereon and the lessor's intention was to occupy the whole of the land and, after demolishing the existing buildings, to occupy the whole of a new building to be erected on it. The facts in the present case are different. The premises demised consist of one room in a building which the lessor proposes to demolish. It seems to me to be quite inapt to say that in these circumstances the lessor requires that room for its own occupation or for occupation by the Bank. What it requires is possession of the room in order to demolish it. (at p265)

6. Accordingly, I am of opinion that the decisions in McKenna's Case (1956) AC 688 and in Morris' Case [1957] HCA 93; (1957) 97 CLR 624 do not compel us to say that the appellant in the present case cannot rely upon s. 62 (5) (m). (at p265)

7. I would allow the appeal. (at p265)

ORDER

Appeal allowed with costs. Order of the Supreme Court of New South Wales (Court of Appeal Division) set aside and in lieu thereof order that the appeal to that Court be allowed with costs, and the question in the case stated be answered in the affirmative. Order that the matter be remitted to the magistrate to proceed according to law.