400 George Street (Qld) Pty Limited & Ors v BG
International Limited  QSC 66
British Gas intended to lease a number of floors at 400 George
Street, Brisbane. An agreement for lease was negotiated between the
landlord (collectively made up of four parties) and British Gas as
After British Gas had signed the agreement for lease, but before
the landlord had signed, British Gas decided that it no longer
wished to be bound by the terms of the agreement for lease.
The landlord brought proceedings seeking a declaration that
British Gas was bound by the terms of the agreement for lease on
the basis that the agreement for lease and attached cover letter
constituted an offer capable of immediate acceptance by British Gas
and further that the agreement for lease was a deed.
The significance of the document being a deed is that once it is
signed and delivered by one party to the other, that party signing
and delivering the deed is immediately bound by the bargain.
So, the question was whether the document was a deed. McMurdo J
pointed out that any intention that a document should operate as a
deed could only be discerned from the document as a whole, read in
the context of the factual matrix as known or assumed by the
parties. The test is two fold: was it written? and did the party
signing and delivering it intend that it was a deed?
The court held that the document was an agreement, not a deed,
for three main reasons:
the language of the agreement was inconsistent with it being a
deed because, among other things, it used the words
"Background" instead of "Recitals" and on the
cover page stated that it was an "Agreement". A deed does
not require consideration for the bargain to be binding; however
the agreement used the following words:
"The parties agree as set
out in the Operative part of this agreement, in consideration of,
among other things, the mutual promises contained in this
there was no communication between the parties that the
document was to be signed as a deed, and
many obligations under the agreement were contingent on the
date of the agreement being identified in the document. British Gas
did not insert the date of the agreement when it signed. On that
basis, British Gas could not have intended for the document to be a
deed and be immediately bound if the obligations under the
agreement were contingent on the date of the agreement being
inserted at a later time by another party.
The court found, on balance, that the document was not a deed
even though on the execution page, the agreement said that it was
"Executed as a deed".
The practical lessons are:
if the document being signed is to be a deed, ensure that
language used is consistent with that commonly associated with
remember that as soon as you sign and deliver a deed you will
be bound and you cannot (subject to some exceptions) withdraw from
the bargain even before the other party has signed that deed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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