Busic v Tokoragi [2019] NSWCATAP 36

Busic v Tokoragi [2019] NSWCATAP 36

Clause 13.1 applied where a guarantor was named in item 10A and had signed or executed the lease. The Tribunal erred by reading into the clause a requirement that the named guarantor sign in a personal capacity. Construing the lease as a whole, and noting that there was only one place to sign and no separate guarantee execution block, a reasonable person would conclude that the guarantee clause was intended to make a director of a corporate lessee liable as guarantor where the director was named in item 10A and signed the lease as a director. Ms Tokoragi was therefore liable as guarantor, but the amount owing had not been determined and had to be agreed or remitted for determination.

Jurisdiction
Australia
Judgment Date
06 February 2019
Procedural Posture
Internal Appeal in a Retail Tenancy Claim Concerning a Contract of Guarantee Under a Retail Lease / Appeal From the Consumer and Commercial Division Decision Dismissing the Application
Outcome
Appeal allowed; Tribunal decision dismissing the application set aside; Ms Tokoragi held liable as guarantor, with the amount owing to be agreed or remitted for determination; costs awarded to the Appellants.
Legal Topics
['guarantee' 'construction of Commercial Contracts' 'corporate Lessee in Liquidation' 'director Liability Under Lease Guarantee' 'costs on Internal Appeal']
['contracts' 'retail Leases' 'civil and Administrative Tribunal Procedure'] ['guarantee' 'construction of Commercial Contracts' 'corporate Lessee in Liquidation' 'director Liability Under Lease Guarantee' 'costs on Internal Appeal']

Case Brief

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Procedural Posture

Internal Appeal in a Retail Tenancy Claim Concerning a Contract of Guarantee Under a Retail Lease / Appeal From the Consumer and Commercial Division Decision Dismissing the Application

Legal Issues

  1. 1 ['Whether the Tribunal made an error of law by construing clause 13.1 of the lease to require a named guarantor to sign or execute the lease in a personal capacity for the guarantee clause to apply.' "Whether Ms Tokoragi, named as a guarantor in item 10A and having signed the lease as a director of the corporate lessee, was liable as guarantor for the lessee's obligations." 'What orders should be made where the Tribunal made no finding about the precise amount owing under the guarantee.']

Ratio Decidendi

Clause 13.1 applied where a guarantor was named in item 10A and had signed or executed the lease. The Tribunal erred by reading into the clause a requirement that the named guarantor sign in a personal capacity. Construing the lease as a whole, and noting that there was only one place to sign and no separate guarantee execution block, a reasonable person would conclude that the guarantee clause was intended to make a director of a corporate lessee liable as guarantor where the director was named in item 10A and signed the lease as a director. Ms Tokoragi was therefore liable as guarantor, but the amount owing had not been determined and had to be agreed or remitted for determination.

Court Disposition

Appeal allowed; Tribunal decision dismissing the application set aside; Ms Tokoragi held liable as guarantor, with the amount owing to be agreed or remitted for determination; costs awarded to the Appellants.

Orders

  • ['The appeal is allowed.' "The Tribunal's decision dismissing the application is set aside." 'Within 28 days of the date of these reasons, the parties are to confer and, if agreement is reached on the amount the First Respondent owes the Appellants, the parties are to lodge consent orders with the Tribunal.' 'If the...