Property, choice and obligation: The Australian law of leases and licences

Abstract

Introduction The concept of a lease of land - where an owner of land allows another to hold all or part of that land exclusively against all others, including the grantor, for a specified time - is not new to Australian law. The concept was known in the Roman law as superfices and emphyteusis, the former allowing a type of leasehold interest in private land, and the latter in state or public land, which has been followed in one way or another in all civilian systems which draw upon the Napoleonic Code and the historic Roman law for their existence. And, of course, the modern lease developed over a long period of time in the English law, emerging initially as a contractual interest between the parties and, eventually, with the action for ejectment being granted as a new remedy by the courts of common law for the recovery of possession by the party holding the lease, into a form of proprietary interest. This dual contractual and proprietary character, which remains to this day, is captured in the unique phrase which is reserved only for the common law leasehold: chattels real. This chapter, while recognising the long provenance of the lease in English law, and taking that law as its structure, provides an overview of the Australian law of leases, as well as the negative counterpart interest often associated or discussed with leases: licences. So what then is meant by the Australian law of leases? In short, it means that this chapter approaches its task in the light of two important themes: one rarely found in other Australian treatments of leases; the other inherently Australian. First, the chapter identifies, using Australian cases (although with reference to the broader history and context of leases emerging from the English law), the necessity of the tension between, on the one hand, the power of choice conferred by ownership upon a party holding a lease to make use decisions about the land so held, and on the other hand, the obligations owed to the party granting the lease and the broader community. The nature of leases and licences, with this tension between choice and obligation and its mixture of property and contract, forms the contextual backdrop to a broader assessment of the lease and licence under both Australian general law and the Torrens system.