PANIZZA v AUSCOTT LTD [1989] NSWCA 249

PANIZZA v AUSCOTT LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, MAHONEY JA and HOPE AJA 17 October 1989, 15 December 1989

[1989] NSWCA 249

LEASEHOLD — crop rent — complex provision for calculation of — provision for deduction of mortgage payment to owners in calculation of rent — owners default in their mortgages properties sold by mortgagees to appellants — appellants aware at purchase, of lease and provisions for calculation of rent — whether deduction survives the change of ownership whether deduction was step in calculation of the rent or a separate right granted by the leases — whether right is exercisable against the new owners as assignees either by the common law or pursuant to the Conveyancing Act 1919, ss116-117, or the Real Property Act 1900, s40(3) — held: (1) Upon a true construction of the lease, the covenant to pay the crop rent included the provision for the deduction of the sum as provided in the formula used; (2) The new owner was entitled to enforce the obligation of the lessee to pay the crop rent but that rent was, in turn, to be calculated in the manner provided in the lease being annexed to the reversionary estate; (3) The calculation thus included both by the common law and the Conveyancing Act the deduction complained of; (4) Consideration of the claim under the Real Property Act in respect of part of the land did not therefore arise to be decided.

Conveyancing Act 1919, ss116,117. Real Property Act, 1940, s40(3).

Kirby P The issue in this appeal is whether the new owners of certain properties near Warren known as "Wambandry" are bound by a provision in leases entered by their predecessors in title to accept crop rent paid by a lessee in the terms of those instruments. Under the provision, a deduction was to be made from the sum payable by the lessee as crop rent. The deduction was in an amount equivalent to the sum payable to the then owners of the properties as an instalment, pursuant to a mortgage executed by the parties at the same time as the original leases.