A recent Queensland Supreme Court case, GPP Arundel Pty Ltd v Basford Pty Ltd [2025] QSC 165, has sent a clear and reassuring message to commercial property owners: just because your property agent signs a document, it doesn't automatically mean you are bound to a new lease.
For our landlord and developer clients, this case underscores the non-negotiable importance of having clearly defined internal protocols to shield your assets from unauthorised commitments.

Case Summary: The Illusion of a Binding Agreement

- The Tenant: GPP Arundel, a pharmacy, held a lease expiring in August 2025. They were in the
process of selling a stake in their business and needed the security of a new lease to finalise the
deal.
- The Landlords: Basford and Wisely Pty Ltd, who owned the property, the legal owners of the
property on paper.
- The De Facto 'Master Landlord': United Petroleum, a related company in the same corporate group. Crucially, in 2016, the Landlords had signed a head-lease granting United the right to the entire property, including GPP's premises.
- The Agent: Mr. McCarthy, a property consultant for ASEH, the company managing the landlords; portfolio.
- The Dispute: The Tenant, wishing to bring in a new investor, negotiated a new lease through its
agent with a property consultant from the firm managing United's portfolio
- The Critical Juncture: The Agent signed a "letter of offer" on behalf of the Landlords and returned it to the Tenant, creating the appearance of a done deal.
- The Reality: The Landlords and United had not approved the terms. When they refused to honour the document, the Tenant sued for specific performance.
The judge, Cooper J, dismissed the tenant’s case entirely. The reasoning is a masterclass in protecting principal rights.

1. The 'Ostensible Authority'; Trap Was Avoided
The tenant argued that by making Mr. McCarthy their point of contact, the landlords had given him
"ostensible authority" – meaning he appeared to have the power to bind them.
The Court Said NO. Why?
In his emails during negotiations, Mr. McCarthy repeatedly used phrases like "subject to Lessor's
agreement." The judge found these were clear disclaimers that notified the tenant the agent could not
commit the landlords without final sign-off.

2. The court was not convinced that a "property consultant" in a corporate group like this would usually
have the authority to single-handedly bind the company to a multi-year lease. The evidence showed his
role was to negotiate, not to conclude.
The Lesson for Landlords: Always, always ensure your agents explicitly state in writing that their
agreement is "subject to landlord approval." This simple phrase is your first and most powerful line of
defence.
2. The Messenger; Defence Also Failed
The tenant’s fallback argument was clever: even if Mr. McCarthy couldn't bind the landlords, he was authorised to communicate their acceptance. By signing and returning the document, he was simply conveying that the bosses had said 'yes'.
The Court Rejected This, Too.
The judge agreed that, in some rare cases, an agent can have authority to communicate a binding
acceptance. However, for that to work, the principal must have held the agent out as having that
specific authority.
The landlords had a strict internal process. Mr. McCarthy was instructed he could only tell a tenant a
deal was approved after he received confirmation from a director. He had no such confirmation when
he signed.
His job was to conduct "non-binding negotiations." Signing a document was outside the scope of what
he was held out to do. The judge compared his role to a real estate agent who can negotiate but not
vary a contract—not a senior manager who can communicate final board approvals.
The Lesson for Landlords: Your internal protocols matter. Ensure your agents understand they are not
to communicate final acceptance without direct, verified instruction. A well-documented process can
save you from an unauthorised "yes."
Key Takeaways to Protect Your Portfolio
This case is a win for prudent landlords. Here are the actionable steps to ensure you stay protected:
 Have a clear agency agreement that explicitly limits your agent's authority. State in writing that
they cannot bind you to a lease without your final written approval.
 Ensure every communication from your agent during negotiations—especially emails outlining
key terms—contains a clear disclaimer such as "These terms are indicative only and are subject
to the formal approval of the Landlord."
 Make sure prospective tenants understand your process. A well-informed tenant is less likely to
mistakenly believe a mid-level agent can give them a final deal.
 Avoid using informal "Letters of Offer" prepared by the tenant. Instead, insist that agreed terms
be formalised in a document prepared by your lawyer, which will naturally include protective
conditions.

Our property team is highly experienced in advising on all aspects of Property, Commercial and Leasing law,
and developing effective risk mitigation strategies. If you have any queries, please do not hesitate to
contact us.