Property Law Bill

The debate on this part includes schedule 3.

In this long-running Committee debate on the Property Law Bill, we see in Part 4 key provisions relating to the leases of land. There is only really one provision that I think is worthy of comment in the Committee stage, although I am sure other members will have other issues that detain them. But I would like to direct the attention of the Minister to clause 265 and ask a number of questions of him, because tricky legal issues arise here. Clause 265 is concerned with the removal of fixtures by the lessee. The lessor is the landlord; the lessee is the tenant. Clause 265 reads in part: “A lessee may remove any trade, ornamental, or agricultural fixture (except a lessor’s fixture) that the lessee has affixed to any leased premises,” but only on two conditions. The first is while the lessee is in lawful possession of the premises; or, during a reasonable period after the lease ceases to apply in the particular case.

I just note the provisions of clause 265(3), that a lessee who exercises a right to remove a fixture has some very precise obligations. The first is to cause as little damage as possible to the leased premises; the second is to make good any damage caused; and, third, to accept a compensation obligation. In that context, I am sure members of the Committee who may have been in the position of being a tenant will know about the disputes that break out between landlord and tenant on fixture removal issues. Here we see a carry-forward of old law and a clarification in plain English of obligations that certainly needed that degree of precision and rewording.

I selected clause 224 of Part 3 of the Property Law Bill to speak on, because I felt that as a non-practitioner in a legal sense I would find it easier to understand.

It is an interesting point that the Justice and Electoral Committee recommended this particular clause be amended to allow a commercial lease to include an absolute prohibition on changing the use of the leased premises. At first I was struggling to understand why that would be a good idea, but this amendment is particularly relevant to the multi-tenancy permits and premises—for example, malls, where retailers depend on all the premises in the complex being used for their designated purpose. This amendment would ensure that a lessee was limited in the use to which he or she could put a specified lease, and it would protect the interests of the lessor and others in the vicinity of the lease.

The select committee considered the potential interpretation and the effect of this recommendation, and it was one of the very few clauses that attracted a number of submissions. I should say that, being on the select committee, one of the biggest disappointments was the lack of submissions—particularly from the legal fraternity. But the select committee considered that such an amendment would create a workable balance between the interests of lessors and lessees, and would ensure more certainty in practice, while reducing the potential involvement of the courts. So it was recommended that the clause be amended to avoid misinterpretation, and to make it clear that the lessor can claim legal costs and expenses only if entitled to do so under the lease.

The select committee also considered recommending an amendment that would allow all the parties to a commercial lease to agree on the conditions to be satisfied by a lessee before a sublet can be signed, in order to provide greater certainty to parties. However, such an amendment might similarly remove the ability of the court to determine whether a lessor’s consent was unreasonably withheld. It was recognised that this would be a significant change to the current law, and it was considered not to be in the best interests of the parties involved. For those reasons, it was recommended that the existing provision be retained. Thank you, Madam Chair.

The question was put that the amendments set out on Supplementary Order Paper 146 in the name of the Hon Clayton Cosgrove to Part 4 be agreed to.

Amendments agreed to.

Part 4 as amended agreed to.

Part 5 Covenants, easements, profits, and access lots