AUSTCORP HOTELS PTY LTD v 179 ELIZABETH STREET PTY LTD [1993] NSWCA 9

AUSTCORP HOTELS PTY LTD v 179 ELIZABETH STREET PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MEAGHER, HANDLEY and SHELLER JJA 9 December 1993, 16 December 1993 [1993] NSWCA 9

REAL PROPERTY — HOTEL MANAGERIAL AGREEMENT- WHETHER INTEREST IN LAND

The appellant lodged a caveat on the title to the Park Lane Hotel at 179 Elizabeth Street, Sydney claiming an estate in interest in the land under a managerial agreement with the owner. Brownie J ordered the removal of the caveat. Held: (1) The Court was not inclined to recognise a novel interest in land which is "akin to a lease" without actually being one; (2) The managerial agreement was neither a lease nor an agreement for lease because (a) the operator had no right to exclusive possession as it was bound to act solely as agent for the owner, (b) the owner was entitled to the rents and profits, and (c) the staff in the hotel were employees of the owner.

Meagher JA I agree with Handley JA.

Handley JA This was an appeal as of right from the decision of Brownie J to order the removal of a caveat lodged by the appellant on the title to the Park Lane Hotel at 179 Elizabeth Street Sydney. The caveat was holding up the registration of a mortgage which the Court was informed secured a sum in excess of $600,000,000. Because of the potential risks involved in the appellant's undertaking as to damages which secured a stay of the order for the removal of the caveat the appeal was expedited and brought on for final hearing as a matter of urgency. It raises for determination the single question whether a so-called managerial agreement dated 14 June 1989 between the parties conferred on the appellant described in that agreement as the operator an estate or interest in the land on which the hotel is situated. Brownie J held that it did not.