SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2009 3810
| DIANNE MARGARET WILLIS ROBERT BRUCE ANDREWS | 1st Appellant |
| 2nd Appellant | |
| v | |
| TEPARYL PTY LTD ROWLAND JOHN HASSALL JOHN JAMES BYRNE TWENTY-THREE ASTAWAYNE PTY LTD GARY KEITH SHEARD | 1st Respondent 2nd Respondent 3rd Respondent 4th Respondent 5th Respondent |
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JUDGES: | MANDIE and HANSEN JJA, VICKERY AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 15 November 2010 | |
DATE OF JUDGMENT: | 26 November 2010 | |
MEDIUM NEUTRAL CITATION: | [2010] VSCA 318 | |
JUDGMENT APPEALED FROM: | Teparyl Pty Ltd v Willis [2009] VSC 259 (Byrne J) | |
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GUARANTEE - Lease - Assignment - Whether release by lessor of original lessee and original lessee's guarantor discharged guarantee by assignee's guarantors - Whether assignee's guarantors would have had a right of contribution against original lessee's guarantor.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr J K Arthur | Mackinnon Jacobs Horton & Irving Pty Ltd |
| For the 2nd and 3rd Respondents | Mr N J O’Bryan SC with Mr C G Juebner | TressCox Lawyers |
| For the 1st, 4th and 5th Respondents | No appearance | McKean Park |
MANDIE JA:
Introduction
This appeal arises out of a proceeding in the Trial Division. The relevant parties for present purposes are the plaintiff (Teparyl) which was a lessor, the first and second defendants (Willis and Andrews) who were the guarantors of the assignee of the lease, the third and fourth defendants who were the solicitors for the lessor (Hassall and Byrne) and the second and third defendants to the counterclaim (Astawayne and Sheard) who were the original lessee and the guarantor of the original lessee respectively. On the appeal, the appellants were the assignee’s guarantors (Willis and Andrews) and the respondents were the lessor’s solicitors (Hassall and Byrne). I will refer to the parties in their respective capacities rather than by name.
The appeal was brought against a judgment entered in favour of the lessor’s solicitors as a result of a negative answer to a question set down for preliminary determination. The substance of the question that was so answered in the negative was as follows:
Does the deed made 24 February 2006 (Release) between [the lessor] and [the original lessee] and [the original lessee’s guarantor] have the effect as pleaded [by the assignee’s guarantors] of releasing [them] from all and any obligations to the lessor?
The essence of the argument that failed below and that was advanced again on appeal was that the assignee’s guarantors were released from liability to the lessor under their guarantee by reason of the fact that the lessor had released the original lessee’s guarantor from all liability under his guarantee and therefore under the lease. The primary basis of the argument was that the assignee’s guarantors had a right of contribution vis-à-vis the original lessee’s guarantor which they had lost as a result of the release in his favour by the lessor. The lessor said that, if the release had the effect so contended for by…
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- AGLC
- Willis v Teparyl Pty Ltd [2010] VSCA 318
- Case
- [2010] VSCA 318
- Decision Date
CaseChat Overview and Summary
The court examined the contractual terms and relevant case law to determine the effect of the release on the guarantees. It was noted that the release of the original lessee and guarantor did not automatically discharge the assignee's guarantors, as the guarantees were separate and independent. The court also considered whether the assignee's guarantors would have a right of contribution against the original lessee's guarantor, but concluded that such a right would not exist as the original lessee's guarantor was not a party to the agreement with the assignee's guarantors.
The court held that the release by the lessor of the original lessee and the original lessee's guarantor did not discharge the guarantee by the assignee's guarantors. The assignee's guarantors remained liable for the obligations under the lease agreement. The court also found that the assignee's guarantors would not have a right of contribution against the original lessee's guarantor, as the original lessee's guarantor was not a party to the agreement with the assignee's guarantors.
As a result of the court's decision, the assignee's guarantors remained liable for the obligations under the lease agreement, and the release of the original lessee and the original lessee's guarantor did not affect their liability. The court did not grant any relief to the assignee's guarantors in relation to the original lessee's guarantor.
Orders
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Background
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Evidence
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Decision
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