New South Wales Consolidated Acts

CONVEYANCING ACT 1919 - SECT 107

107 Acceptance of certain surrenders of leases

(1) For the purpose only of enabling a lease, authorised under section 106, or under any agreement made pursuant to such section or by the mortgage deed (in this section referred to as an authorised lease) to be granted, a mortgagor of land while in possession shall, in like manner as if the legal estate were vested in the mortgagor and as against every incumbrancee, have, by virtue of this Act, power to accept from time to time a surrender of any lease of the mortgaged land or any part thereof comprised in the lease, with or without an exception of all or any of the mines and minerals therein, or in respect of mines and minerals, or any of them, and, on a surrender of part only of the land or mines and minerals leased, the rent may be apportioned.

(2) For the same purpose a mortgagee of or person having the benefit of a charge on land while in possession shall, in like manner, and as against all prior or other incumbrancees (if any), and as against the mortgagor or person whose land is subject to the charge, have, by virtue of this Act, power to accept from time to time any such surrender as aforesaid.

(3) On a surrender of part only of the land or mines and minerals leased the original lease may be varied: Provided that the lease when varied would have been valid as an authorised lease if granted by the person accepting the surrender, and on a surrender and the making of a new or other lease, whether for the same or for an extended or other term, and whether subject or not to the same or to any other covenants, provisions, or conditions, the value of the lessee's interests in the lease surrendered may, subject to the provisions of this section, be taken into account in the determination of the amount of the rent to be reserved and of the nature of the covenants, provisions, and conditions to be inserted in the new or other lease.

(4) Nothing in this section shall, where any consideration (except an agreement to accept an authorised lease) for the surrender is given by or on behalf of the lessee to or on behalf of the person accepting the surrender, authorise a surrender to a mortgagor or person whose land is subject to a charge without the consent of the incumbrancees, or authorise a surrender to a second or subsequent incumbrancee without the consent of any prior incumbrancee.

(5) No surrender shall, by virtue of this section, be rendered valid unless--

(a) an authorised lease is granted of the whole of the land or mines and minerals comprised in the surrender, to take effect in possession immediately or within one month after the date of the surrender, and

(b) the term certain or interest granted by the new lease is not less in duration than the unexpired term or interest which would have been subsisting under the original lease if that lease had not been surrendered, and

(c) where the whole of the land mines and minerals originally leased has been surrendered, the rent reserved by the new lease is not less than the rent which would have been payable under the original lease if it had not been surrendered; or where part only of the land or mines and minerals has been surrendered, the aggregate rents respectively remaining payable or reserved under the original lease and new lease are not less than the rent which would have been payable under the original lease if no partial surrender had been accepted, and

(d) a memorandum thereof, signed by the parties thereto, is registered.

(6) A contract to make or accept a surrender under this section may be enforced by or against every person on whom the surrender, if completed, would be binding.

(7) Section 106(11), (14) and (15) shall apply to surrenders under this section.

(8) Nothing in this section shall prevent the instrument creating the mortgage or the covenant in respect of which the charge arose from reserving to or conferring on the mortgagor or mortgagee, or both, or any one or more of the parties to the instrument creating the charge, any further or other powers relating to the surrender of leases; and any further or other powers so conferred or reserved shall be exercisable, as far as may be, as if they were conferred by this Act, and with the like results, unless a contrary intention is expressed in the instrument creating the mortgage or the covenant in respect of which the charge arose.

(9) Nothing in this section shall operate to enable a mortgagor or mortgagee to accept a surrender which could not have been accepted by the mortgagor, with the concurrence of all the incumbrancees, if this Act had not been passed.

(10) For the purposes of this section, the expression
"mortgagor" does not include an incumbrancee deriving title under the original mortgagor.

(11) The power of accepting surrenders conferred by this section shall, after a receiver of the income of the mortgaged or charged land has been appointed under this Act by the mortgagee or person having the benefit of the charge and the instrument by which the appointment was made has been registered, be exercisable while that appointment is in force by that mortgagee or person instead of by the mortgagor or person whose land is subject to the charge in relation to any land affected by the receivership in the same manner as it would be if the mortgagee or person having the benefit was in possession of the land and the mortgagee or person may, by deed, delegate that power to the receiver.

(11A) Where a trust corporation has been appointed receiver pursuant to section 115(6A), a delegation under subsection (11) by that trust corporation in its capacity as mortgagee or person having the benefit of a charge shall be sufficiently evidenced by a statement in the instrument of surrender of the decision of that trust corporation to exercise the power conferred by subsection (11).

(12) This section applies to land under the provisions of the Real Property Act 1900 .