HIGH COURT OF AUSTRALIA
FRENCH CJ,
KIEFEL, GAGELER, KEANE AND NETTLE JJJACEK GNYCH & ANOR APPELLANTS
AND
POLISH CLUB LIMITED RESPONDENT
Gnych v Polish Club Limited
[2015] HCA 23
17 June 2015
S58/2015
ORDER
1.Appeal allowed with costs.
2.Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 17 October 2014 and orders 3, 4, 6 and 7 of the orders of that Court made on 16 September 2014 and, in their place, order that the appeal be dismissed with costs.
3.Remit the matter to the Supreme Court of New South Wales for determination of the assessment of damages, if any, pursuant to the undertakings listed in order 4 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 6 November 2014.
On appeal from the Supreme Court of New South Wales
Representation
G O'L Reynolds SC with G P Segal and M A Friedgut for the appellants (instructed by Drexler Litigation & Compensation Lawyers)
P R Clay SC with J M McKelvey and A Isaacs for the respondent (instructed by Strathfield Law)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Property – Leases – Section 92(1)(d) of Liquor Act 2007 (NSW) provides that licensee must not grant lease over certain parts of licensed premises without approval of Independent Liquor and Gaming Authority – Where lease granted in breach of s 92(1)(d) – Whether lease void and unenforceable.
Contracts – Statutory illegality – Where lease granted in contravention of s 92(1)(d) of Liquor Act 2007 (NSW) – Where Liquor Act imposes statutory penalty for breach – Whether lease void and unenforceable.
Liquor Act 2007 (NSW), s 92(1)(d).
Retail Leases Act 1994 (NSW), ss 6A, 8(1), 16(1), 16(2).
FRENCH CJ, KIEFEL, KEANE AND NETTLE JJ. Section 92(1) of the Liquor Act 2007 (NSW) ("the Liquor Act") provides:
"A licensee or a related corporation of the licensee must not:
…
(c)lease or sublease any part of the licensed premises on which liquor is ordinarily sold or supplied for consumption on the premises or on which approved gaming machines are ordinarily kept, used or operated, or
(d)lease or sublease any other part of the licensed premises except with the approval of the Authority."
The respondent ("the Club") leased part of its licensed premises to the appellants. Section 92(1)(c) of the Liquor Act did not apply in the circumstances because liquor was not sold or supplied on that part of the premises leased to the appellants, nor were gaming machines kept, used or operated on that part of the premises. But because the lease had not been approved by the Authority[1], there was a contravention of s 92(1)(d).
[1]The Authority is the Independent Liquor and Gaming Authority ("the Authority"), constituted under the Gaming and Liquor Administration Act 2007 (NSW): Liquor Act, s 4(1).
The issue in this…
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- Case
- [2015] HCA 23
- Decision Date
CaseChat Overview and Summary
The High Court was required to determine whether the Club's contravention of section 92(1)(d) of the *Liquor Act 2007* (NSW), which mandates approval from the Independent Liquor and Gaming Authority for granting a lease over certain parts of licensed premises, rendered the lease void and unenforceable. The Court also considered the principles of statutory illegality in contract law, specifically whether the lease was void due to an express or implied prohibition by statute, or because it was associated with or in furtherance of an illegal purpose.
The High Court reasoned that the offence created by section 92(1)(d) was committed by the Club at the time the lease was granted without the necessary approval, and this offence was complete at that point. The continuation of the lease was not a continuing offence. While the contravention rendered the Club liable to a statutory penalty and empowered the Authority to cancel the Club's licence, the Act did not expressly provide that a lease entered into in breach of section 92(1)(d) would be void and unenforceable. The Court found no reason to infer that the Act necessitated the avoidance of such a lease, particularly as the Authority possessed regulatory powers to address any subsequent issues arising from the lease. The Court allowed the appeal, setting aside the orders of the Court of Appeal and remitting the matter for determination of damages.
Orders
Orders of the court
1. Appeal allowed with costs.
2. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 17 October 2014 and orders 3, 4, 6 and 7 of the orders of that Court made on 16 September 2014 and, in their place, order that the appeal be dismissed with costs.
3. Remit the matter to the Supreme Court of New South Wales for determination of the assessment of damages, if any, pursuant to the undertakings listed in order 4 of the orders of the Court of Appeal of the Supreme Court of New South Wales made on 6 November 2014.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
Established by: FRENCH CJ, KIEFEL, KEANE AND NETTLE JJ, GAGELER J
Full text does not contain this section.