Section 82 of the Land Act 1996 sets the baseline for every State lease. Read it before you read your own lease document, because it tells you what is in the lease whether or not it is written on the page.
Section 82(2) — what the Minister may add
In addition to such reservations, covenants and improvement and other conditions as are prescribed, a State lease shall contain such other reservations, covenants and conditions as the Minister considers proper.
Three sources of terms, then: those prescribed by regulation, those the Minister considers proper in the particular case, and those implied by section 82(3). Only the last are uniform across every lease. This is why reading the actual lease document matters — the conditions that will get you forfeited are often the case-specific ones.
Section 82(3) — the four implied terms
(a) All minerals
A reservation to the State of all minerals and mineral substances in or on the land — expressly including gold, silver, copper, tin, metals, ores and substances containing metals, gems, precious stones, coal, shale, mineral oils and valuable earths or substances — together with the right, subject to mining law, to authorise a person to enter on the land to search for, mine, work, win, recover and remove them, and to do all things necessary or convenient for those purposes.
(b) All petroleum
A reservation to the State of all petroleum on or below the surface, with all rights necessary for searching for and obtaining it in any part of the land, and all rights of way and easements for pipelines and other purposes required for searching for, obtaining or conveying petroleum.
Section 82(1) defines “petroleum” as naturally occurring hydrocarbons in a free state — gaseous, liquid or solid — other than coal, shale, or a substance extractable from coal, shale or other rock by heat or chemical process.
(c) Helium
A reservation to the State of all helium found in association with petroleum on or below the surface, with rights similar to those reserved for petroleum. An unusual provision, and a reminder that the drafters were thinking about what a gas field actually yields.
(d) The bona fide purpose condition
A condition that the lessee will, subject to section 119, use the land bona fide for the purpose only for which it is granted, or for a purpose ancillary to that purpose.
This is the single most important implied condition, and the one most often breached. Three elements:
- Bona fide — genuinely. A token use maintained to keep the lease alive is not bona fide use.
- “For the purpose only for which it is granted” — the purpose clause on your title is a limit, not a description. A residence lease does not permit a business; a business lease for a specified class does not permit a different class.
- “Or for a purpose ancillary to that purpose” — genuinely subordinate uses are allowed. Staff quarters on an agricultural lease are ancillary to farming; a separate commercial rental estate is not.
Use inconsistent with the lease purpose is the most common reason State leases are forfeited under Part XV. Where your use has genuinely changed, apply to vary the purpose under Part XII rather than carrying on and hoping.
What the mineral and petroleum reservations mean in practice
Holding a State lease does not give you what is under it, and it does not let you keep out the State’s authorised licensee. The reservations carry rights of entry.
This dovetails with section 5 of the Mining Act 1992, under which all minerals on, in or below the surface of any land are the property of the State, and with the Oil and Gas Act 1998 for petroleum.
What a lessee retains is a right to compensation for surface damage and disturbance under the relevant resource legislation — not a right to refuse access.
Section 82 does not apply to a lease of a government-owned building under section 99, nor to a special agricultural and business lease under section 102. Both sections expressly disapply it. So neither carries the implied mineral, petroleum and helium reservations by force of section 82.
Limits on the conditions that may be imposed
The Minister’s power under section 82(2) is wide but not unlimited:
- Section 66 — where the land is customary land leased to the State, a provision of the State lease inconsistent with the head lease from the customary landowners is, to the extent of the inconsistency, of no effect.
- Section 67 — a lease shall not be granted for a purpose contravening zoning or physical planning requirements.
- Section 41 of the Constitution — even an act done under a valid law is unlawful if it is harsh or oppressive, or disproportionate, in the particular case.
Reading your own lease
- The purpose clause — and any specified class of business. This is the condition you are most likely to breach.
- The improvement conditions — what, to what value, and by when. Time runs from gazettal under section 81, not from when you got the title.
- The rent clause and when the unimproved value is next re-assessed.
- Any covenant to insure or maintain improvements you have not yet paid for — sections 85 and 86.
- Any special covenants the Minister imposed for this lease. These are not in the Act and are easy to overlook.
Sources
- Land Act 1996 — ss 66, 67, 81, 82, 85, 86, 99, 102, 119; Parts XII and XV
- Mining Act 1992 — s 5
- Oil and Gas Act 1998
- Constitution — ss 41, 53
Before relying on anything here, read the current text of the Land Act 1996 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.