McDonald's Australia Limited v Bendigo and Adelaide Bank Limited and Benalla Retail Investments Pty Ltd

[2014] VSCA 209

Victorian Court of Appeal

Built by Barristers,
For Australian Law.

See how it works

Interrogate

Catchwords

1. Landlord and Tenant
2. › Agreement for lease
3. › Relationship between agreement for lease and lease
4. › Right of set off in agreement for lease not replicated in lease
5. › Whether documents to be construed as one
6. › Whether covenant touches and concerns the land
7. › Whether right personal to parties
8. › Property Law Act 1958 (Vic), s 142(1)
1. Landlord and Tenant
2. › Covenants
3. › Covenants running with the land
4. › Test for whether covenant touches and concerns the land
5. › P&A Swift Investments test
6. › Whether right of set off against rent satisfies third criterion
7. › Whether covenant personal or collateral to tenancy
1. Equity
2. › Equitable lien
3. › Lien arising by implication of equity
4. › Lessee carrying out construction works on lessor's land
5. › Whether contractual arrangements preclude implication of equitable lien
6. › Whether unconscionability established
7. › Hewett v Court criteria
1. Landlord and Tenant
2. › Right of recoupment
3. › Whether applicable to costs incurred by prospective lessee under agreement for lease
4. › Whether construction costs were necessary repairs or amounts paid at landlord's request to third party

Quick Take

A right of set off against rent contained in an agreement for lease but deliberately excluded from the subsequently executed lease is a personal contractual right that does not touch and concern the land and does not bind a mortgagee in possession. Where an agreement for lease provides only personal contractual remedies for recovery of construction costs, an equitable lien over the property will not be implied. A tenant's right of recoupment applies only to necessary repairs the landlord was required to carry out, or amounts due by the landlord to a third party paid by the tenant at the landlord's request — not to construction costs incurred by the tenant under a development agreement.