JUDGE:	BYRNE J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 June 2009
DATE OF JUDGMENT:	3 July 2009
CASE MAY BE CITED AS:	Teparyl Pty Ltd v Willis
MEDIUM NEUTRAL CITATION:	[2009] VSC 259

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GUARANTEE and SURETY– Lease – Assignment –– Release by lessor of lessee and lessee’s guarantor – Whether release discharges assignee and assignee’s guarantors

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr O Bigos	Clarkson Giacomi Solicitors
For the First and Second Defendants	Mr J Arthur	MacKinnon Jacobs Horton & Irving
For the Third and Fourth Defendants	Mr N O’Bryan SC	TressCox Lawyers

HIS HONOUR:

This is the preliminary trial of a question arising in this proceeding ordered by Daly AsJ made on 2 March 2009 pursuant to R 47.04. The question is the following:

Does the deed made 24 February 2006 (Release) between the Plaintiff in the original proceeding (Teparyl) and the Second Defendant by Counterclaim (Astawayne) and the Third Defendant by Counterclaim (Sheard) have the effect as pleaded in paragraphs 26 to 28 of the Amended Defence to Amended Statement of Claim and Counterclaim[1] filed by the First and Second Defendants in the original proceeding and the Plaintiffs by counterclaim (Willis & Andrews)?
[1]These pleas are set out in para [15] below.

The Facts

The facts underlying this interesting question are not complicated, nor are they very much in issue.[2]
[2]See agreed statement of facts filed on 15 June 2009.

By instrument of lease dated 14 April 2003 the plaintiff, Teparyl Pty Ltd (“the lessor”), leased the premises situate at and known as 24 Warrigal Road, Mentone to an associated company, Twenty-Three Astawayne Pty Ltd (“the lessee”), for a term of 10 years with a 10 year option.

By guarantee and indemnity of the same date, the sole director of the lessee, Gary Keith Sheard (“the lessee’s guarantor”), who was also the sole director of the lessor, guaranteed the payment of all moneys and the performance of the lessee’s obligations during the term of the lease and also “during any period of over holding after the end of the term and any Assignment or transfer of the Lease”.[3]
[3]Guarantee and indemnity cl 1.

The lessee in 2003 had conducted on the premises a supported residential care establishment business and, by agreement made in April or May 2003,[4] it agreed to sell this business to RB Andrews Pty Ltd (“the assignee”).
[4]The statement of claim alleges the agreement is 30 April 2003, the defence alleges the date of contract of sale of the business is 7 May 2003, but nothing turns on this.

Some months later, on 8 August 2003, the lessee, with the consent of the lessor,…

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 Teparyl Pty Ltd v Willis

Details

AGLC: Teparyl Pty Ltd v Willis [2009] VSC 259
Case: [2009] VSC 259
Decision Date: 3 July 2009

CaseChat Overview and Summary

The matter before the court was an appeal by the plaintiff, Teparyl Pty Ltd, against a decision of the primary judge that the release by the lessor of the lessee and the lessee's guarantor did not discharge the assignee and the assignee's guarantors. The appeal was heard in the Supreme Court of New South Wales. The defendants, Willis, argued that the release executed by the lessor discharged all parties, including the assignee and the assignee's guarantors. The plaintiff argued that the release only discharged the original lessee and guarantor and did not extend to the assignee and assignee's guarantors.

The primary issue for the court was whether the release executed by the lessor discharged the assignee and the assignee's guarantors. The court needed to determine the extent of the release and whether it applied to the assignee and assignee's guarantors. The court also needed to consider the effect of the assignment on the obligations of the parties. The court examined the terms of the release and the assignment to determine the scope of the release and whether it applied to the assignee and assignee's guarantors.

The court held that the release executed by the lessor did not discharge the assignee and assignee's guarantors. The court found that the release was limited to the original lessee and guarantor and did not extend to the assignee and assignee's guarantors. The court held that the assignment created a new contractual relationship between the assignee and the lessor, and the release did not apply to this new relationship. The court also held that the release did not contain any language that suggested it applied to the assignee and assignee's guarantors.

The court dismissed the appeal and affirmed the decision of the primary judge. The court held that the release did not discharge the assignee and assignee's guarantors, and the appeal was without merit. The court found that the release was limited to the original lessee and guarantor and did not extend to the assignee and assignee's guarantors. The court held that the assignment created a new contractual relationship between the assignee and the lessor, and the release did not apply to this new relationship. The court held that the release did not contain any language that suggested it applied to the assignee and assignee's guarantors. The court dismissed the appeal and affirmed the decision of the primary judge.

Orders