Contract - Lease, Assignment of Lease and Guarantee - Whether Lease and Assignment of Lease illegal and void pursuant to Town Planning and Development Act 1928 (WA) - Severance - Effect of illegality or invalidity - Terms of Guarantee and liability of the Defendants - Mistake - Misleading and deceptive conduct - Turns on own facts

Legislation:

Town Planning and Development Act 1928 (repealed) s 20(1)(a)

Result:

Judgment for plaintiff
Defendants' counterclaim dismissed

Representation:

Counsel:

Plaintiff: Mr M F Holler
Defendants: In person

Solicitors:

Plaintiff: MDS Legal
Defendants: Not applicable

Case(s) referred to in judgment(s):

C Convenience Stores Pty Ltd v Wayville Plaza Retirement Pty Ltd [2012] SASC 14; (2012) 114 SASR 299
Canty v Paperlinx Australia Pty Ltd [2014] NSWCA 309
Cellulose Products Pty Ltd v Truda (1970) 92 WN (NSW) 561
Cheetham v Hampson (1791) 4 Term Rep 318, 219, (1791) 100 ER 1041
Citicorp Australia Ltd v Hendry (1985) 4 NSWLR 1
City of Gosnells v Roberts (1994) 12 WAR 437; (1994) 85 LGERA 214; (1994) Aust Torts Reports 81‑313
Commissioner of Taxation v Guy (1996) 67 FCR 68
Covino v Bandag Manufacturing Pty Ltd [1983] 1 NSWLR 237
Dockrill v Cavanagh (1944) 45 SR (NSW) 78
Errichetti Nominees Pty Ltd v Paterson Ground Architects Pty Ltd [2007] WASC 77
Glentham Pty Ltd v City of Perth [1986] WAR 205
Heald v O'Connor [1971] 1 WLR 497, 505 ‑ 506; [1971] 2 All ER 1105
Indrisie v General Credits Ltd [1985] VR 251
Mackinlay v Derry Dew Pty Ltd [2014] WASCA 24; (2014) 46 WAR 247
McFarlane v Daniell (1938) 38 SR (NSW) 337
Moore v Dimond (1929) 43 CLR 105
Palermo Seafoods Pty Ltd v Lunapas Pty Ltd [2014] NSWSC 792
Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321
Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia [2008] WASCA 107
Sleafer v Lambeth Borough Council [1960] 1 QB 43
SST Consulting Services Pty Ltd v Rieson [2006] HCA 31; (2006) 225 CLR 516
Stone James & Co v Investment Holdings Pty Ltd [1987] WAR 363
Svanosio v McNamara (1956) 96 CLR 186
Taylor v Johnson (1983) 151 CLR 422
Tobin v Dodd [2004] WASCA 288
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Total Oil Products (Australia) Pty Ltd v Robinson [1970] 1 NSWR 701
Yeoman Credit Ltd v Latter [1961] 1 WLR 828; [1961] 2 All ER 294

DAVIS DCJ: This case concerns the validity of a lease, an assignment of the lease, and the enforceability of a guarantee and indemnity provided to the landlord, the plaintiff, by the defendants.
In…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Avadean Pty Ltd v Mullany

Details

AGLC: Avadean Pty Ltd v Mullany [2017] WADC 50
Case: [2017] WADC 50
Decision Date: 7 APRIL 2017

CaseChat Overview and Summary

The dispute in Avadean Pty Ltd v Mullany arose between the plaintiff, Avadean Pty Ltd, and the defendants, Mullany and another party. The plaintiff, a property developer, leased premises to a tenant, who then assigned the lease to a third party. The defendants, who were the guarantors of the lease assignment, later claimed that the lease and the assignment were illegal and void under the Town Planning and Development Act 1928 (WA). The defendants argued that the lease and assignment were contrary to town planning provisions, rendering them invalid. The plaintiff sought to enforce the terms of the guarantee against the defendants.

The primary legal issues before the court were whether the lease and the assignment of the lease were indeed illegal and void under the relevant planning legislation. If so, the court had to determine the effect of such illegality or invalidity on the terms of the guarantee and the liability of the defendants. Additionally, the court had to consider whether the defendants were mistaken about the illegality of the lease and assignment and if there was any misleading or deceptive conduct involved.

The court held that the lease and the assignment were not illegal or void under the Town Planning and Development Act 1928 (WA). Consequently, the guarantee provided by the defendants remained valid and enforceable. The court found that the defendants were not mistaken about the legality of the lease and assignment, and there was no evidence of misleading or deceptive conduct. The court ruled that the defendants were liable under the terms of the guarantee to pay the outstanding rent and other costs as per the agreement. The court emphasised that the illegality or invalidity of a contract does not necessarily render unenforceable ancillary agreements such as guarantees, unless there is a specific provision in the legislation to that effect. The court further held that the defendants' reliance on the illegality of the lease and assignment did not absolve them of their obligations under the guarantee.

The court ordered the defendants to pay the plaintiff the outstanding rent and costs as per the terms of the guarantee. The defendants were also ordered to pay the plaintiff's costs of the proceedings. The court made no orders regarding any potential mistake or misleading and deceptive conduct, as it found that these issues were not relevant to the outcome of the case.

Orders