Australia and New Zealand Banking Group Ltd v Fairfield City Council

In the matter of Australia and New Zealand Banking Group Ltd versus Fairfield City Council, the dispute arose from the council's sale of a property that had been the subject of a mortgage. The bank sought to enforce a guarantee of the council's debt, claiming it was binding despite not being executed as a deed. The case was heard in the Federal Court of Australia, which was required to determine several legal issues. First, the court had to examine the effect of the liquidator's disclaimer under section 568A(1) of the Corporations Act 2001 (Cth) and whether it impacted the enforceability of the guarantee. Second, the court needed to decide if the guarantee was binding on the parties even though it was not executed as a deed. Lastly, the court had to determine whether, following the escheat of the property, it vested in the Crown in right of New South Wales or the Commonwealth.

The court examined the liquidator's disclaimer and found it did not affect the enforceability of the guarantee. The guarantee was found to be binding despite not being executed as a deed, as the intent to be bound was evident from the context and substance of the agreement. Regarding the escheat, the court determined that the property vested in the Crown in right of New South Wales. The exercise of the council's power of sale under section 713 of the Local Government Act 1993 (NSW) was upheld as valid, as the council had the authority to sell the property to recover its debt.

The court concluded that the bank's claim to enforce the guarantee was valid and enforceable. The guarantee remained binding on the parties, and the sale of the property by the council was legitimate. As a result, the orders of the court were made in favour of the bank, allowing it to enforce the guarantee and recover the debt from the council.