Background

The Returned & Services League of Australia (Queensland Branch) Southport Sub-Branch Inc (RSL) is a sub-branch of the Returned and Services League of Australia (RSLA).

RSL was the owner of land, and the building and other improvements on it (property), in Southport. It leased the property to The Southport RSL Memorial Club Inc (Club) under a registered lease.

The Club is not affiliated with RSL or the RSLA, but is a separate body that operates a licensed club, authorised by the RSLA to use the name RSL in its own name and the name of its club.

The lease included clause 29 that obliged the Club to allow RSL to use 2 offices and other spaces within the building, and to display its memorabilia within the building, as well as providing other services to RSL and its members.

In 2019, RSL sold the property to an unrelated party, subject to the lease. This meant that the new property owner is the lessor and the Club remains the lessee.

The Club told RSL that by selling the property, RSL had extinguished its right to continue its occupancy. The Club changed the locks on the doors to the offices that RSL had occupied and moved RSL’s furniture, equipment and records, together with some memorabilia, into a storage facility.

RSL sought damages of $192,820 for breach of the covenants in clause 29 of the lease.

RSL argued that when the land was sold, clause 29 of the lease created obligations that continued to apply in its favour, notwithstanding that it was no longer the lessor. It contended that the Club’s obligations under that clause were personal to the RSL, did not touch and concern the land, and therefore did not transfer (nor were they extinguished) with the change of ownership of the land.

The Club argued that the clause concerned the land which was transferred to a new lessor. The clause was not a separate, collateral contract that would be enforceable, and s 62 of the Land Title Act 1994 was to the same effect.

The Court found that the clause did not touch and concern the land as it was of no benefit to the owner of the land from time to time, but only to the owner at the time the lease was created, the RSL. The Court found that the benefits and obligations of clause 29 did not transfer to the new owner upon registration of the transfer, were not extinguished by that transfer and remained obligations of the Club to RSL.

The Court found that, subject to the effect of s 62 of the Land Title Act, there remained a contract between RSL and the Club, so the Club continued to be bound by clause 29 to provide the relevant services and licences.

The Court found that s 62 of the Land Title Act did not affect the operation of clause 29. Clause 29 created an obligation on the Club to provide, for the term of the lease, the rights to RSL set out in the clause because rights granted under clause 29 were personal to RSL. They did not form part of the leasehold interest in the lot, nor the interest of the reversioner.

Further, RSL was entitled to display its memorabilia (including weapons of war) for the remaining term of the lease, despite the Club board being of the view that it is no longer appropriate to display weapons in the Club premises as it was “not representative of the desires of modern society in the manner it wishes to remember Australia’s war dead” (at [52]).

The Court found that the Club had breached its contractual licence to the RSL under clause 29 and awarded damages to the RSL for the rent to the end of the lease period and storage of its property.

Refer to Returned & Services League of Australia (Queensland Branch) Southport Sub-Branch Inc v The Southport RSL Memorial Club Inc [2022] QDC 20

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