The High Court has allowed an appeal against a decision of the Queensland Court of Appeal on compensation for resumed land in the context of commercial tenancies. In March 1999 the Mekpine entered into a retail shop lease in respect of Lot 6 within a retail shopping centre, which, after an expansion of the area in 2007, led to amalgamation of Lot 6 with Lot 1 and newly named ‘New Amalgamated Lot 1’. In 2008 the Council resumed part of New Amalgamated Lot 1, which had previously been part of Lot 1. Mekpine then brought a claim for compensation under s 12(5) of the Acquisition of Land Act 1967 (Qld). A majority of the QCA held that the amalgamation gave Mekpine an interest in both Lot 1 and Lot 6, and that even if it did not, the area was a ‘common area’ within the meaning of s 6 of the Retail Shop Leases Act 1994 (Qld), meaning that Mekpine gained a compensable interest over the area. Before the High Court the Council sought to challenge both conclusions of the Court of Appeal.

The High Court unanimously allowed the appeal, holding that Mekpine’s rights under the lease for Lot 6 remained over the part of Lot 1 that lay within the former Lot 6. After examining the relevant provisions of the Land Title Act and the Retail Shop Leases Act (see [27]ff) and in particular ss 64 and 65, the joint judges held that after the registration of the subdivision plan the lease was registered under s 64 as only over that part of the new Lot 1 that was the former Lot 6, and the instrument which vested the former Lot 6 in Mekpine on registration of the subdivision plan was the lease itself, not the plan (see at [48]). The joint judges rejected Mekpine’s argument that to give the lease business efficacy it was necessary to read ‘land’ as meaning Lot 6 together with any other land that might be amalgamated into that lot: the clauses of the lease did not support that implication, it would be contrary to business sense to suppose that the lessee should automatically gain an interest in additional land without further consideration, and that nothing in the lease made it necessary to construe the lease otherwise than in accordance with the natural and ordinary effect of its terms (see [50]–[58]). The joint judges also held that the RSLA definition of ‘common areas’ did not supplant the definition used in the lease because there were no provisions in the RSLA that expressly incorporated the Act’s definition of ‘common areas’ into retail shop leases, and no legislative intent suggesting that its definition should be implied into retail shop leases (see [61]ff). Consequently, Mekpine does not have a compensable interest in the resumed land. Gageler J agreed with the orders of the joint judges and their reasoning on the RSLA but construed the LTA provisions differently (see [79]ff).