Ace Property Holdings P/L v Australian Postal Corporation

[2010] QCA 55

Queensland Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Landlord and Tenant
2. › Covenants
3. › Not to assign or sublet
4. › What constitutes parting with possession
5. › Wholly-owned subsidiary in exclusive occupation of premises
6. › Whether holding company parted with possession to subsidiary
7. › Whether subsidiary was agent or alter ego of lessee
1. Landlord and Tenant
2. › Covenants
3. › Not to assign or sublet
4. › Licence
5. › Whether allowing subsidiary to occupy premises constituted grant of licence within alienation covenant
1. Landlord and Tenant
2. › Covenants
3. › Not to assign or sublet
4. › Lessor's consent
5. › Whether consent given or unreasonably withheld
6. › Whether consent must be sought before it can be said to be withheld
1. Landlord and Tenant
2. › Covenants
3. › Not to carry out works without approval
4. › Renovations carried out by subsidiary without lessor's written approval
5. › Whether lessor estopped from relying on breach

Quick Take

A lessee that allows a wholly-owned subsidiary to assume exclusive factual possession of leased premises — contracting on its own behalf, employing its own employees, and controlling the premises — breaches a covenant against parting with possession, even though the subsidiary is wholly owned by the lessee. The separate corporate personality of the subsidiary is respected; the subsidiary is not treated as the agent or alter ego of the lessee merely by reason of the shareholding relationship. Consent to a subsidiary's 'occupation' of premises is not the same as consent to parting with possession. Consent cannot be said to have been unreasonably withheld unless it has first been sought. Relief from forfeiture will be refused where the breach is deliberate, ongoing, and unremedied, and where granting relief would effectively rewrite the commercial bargain.