TOPIC 1 EXAMPLE FEEDBACK TO ONLINE ACTIVITIES ACTIVITY 7.1 PROBLEM SOLVING EXERCISE - LEASE VS LICENCE Pastoral Co Pty Ltd (Pastoral) is the owner of a large cattle station in Northern Australia. Pastoral holds the property under a lease from the State of Queensland for 90 years. Pastoral has sub-let some of its land to Agistment Pty Ltd for 1000 head of cattle. Agistment is having financial difficulties and is looking for other avenues to make money. Agistment has heard of Jonny Lu who is a promoter of concerts and festivals in rural and regional areas operating as EventR&R. Jonny claims that the land used by Agistment is perfect for the types of events Jonny organises. Agistment and Jonny enter into an agreement in the following terms: 1. Agistment agrees to allow EventR&R, its employees, contractors, agents and invitees access to a 1 acre area of land (as marked on the plan attached) ("the Land") for the purpose of events organised by Jonny. 2. For the purpose of the events, Agistment licences EventR&R to use the Land for any purpose connected with the event for a maximum period of 1 week every month ("Event Period"). 3. During the Event Period, Jonny: 3.1. is entitled to fence the area for the event and charge an entry fee; and 3.2. is liable for any damage to the land or injury to any person attending the event. 4. EventR&R must deliver up the land in good condition and make good any damage caused. ffi. EventR&R must pay Agistment $5000 per Event Period. The lease from Pastoral to Agistment contains a clause: 10. The subtilessee must not sublet the premises without the prior written consent in writing of the subtilessor. Agistment did not seek Pastoral's consent. After a wild rave at Agistment's property, Pastoral discovers the existence of the arrangement and claims that Agistment has breached the lease by 'subletting' without consent. Advise Agistment what is the nature of the agreement with EventR&R? What impact does this have on the lease between Pastoral and Agistment? FEEDBACK If the agreement is a lease, Agistment will be in breach of clause 10 of their lease by subletting without consent.
2 Whether the agreement between Agistment and EventR&R is a lease or licence is a question of construction of the contract. The fact the agreement refers to a 'licence' is not determinative. Radaich v Smith The test to distinguish a lease from a licence is whether or not what is granted in the contract is exclusive possession: Radaich v Smith. If exclusive possession is granted, then it is a lease. The nature of the agreement and the surrounding circumstances can be assessed to determine this. In this case relevant facts are: . A specific area of land is identified in the agreement for the use of EventR&R; · Occupation is not continuous and is for short terms . During the time EventR&R is in occupation they have a right to fence the area and charge an admission