Geltch v MacDonald & anor [2007] NSWSC 1000

Geltch v MacDonald & anor [2007] NSWSC 1000

Clause 9.1 of the lease required the lessees to apply for and maintain all authorities required by law to enable the provision of entertainment at the hotel. Because a Gaming Machines Act, s 56 authority to keep poker machines depended on corresponding Poker Machine Entitlements, alienating those entitlements would jeopardise and breach the obligation to maintain the authorities. The partners as lessees were therefore contractually restrained from transferring the Poker Machine Entitlements during the lease. That contractual obligation circumscribed the MacDonalds' fiduciary obligations as partners, so they were not required to facilitate realisation of the entitlements for the...

Jurisdiction
Australia
Judgment Date
06 September 2007
Procedural Posture
Equity Division Proceeding Concerning Partnership, Lease and Poker Machine Entitlements / Final Judgment After Hearing
Outcome
Statement of claim dismissed; interlocutory orders discharged; declarations made that the Head Lease, Management and Operating Agreement, Partnership Agreement and Shareholders' Agreement were terminated or dissolved on specified dates; plaintiff ordered to pay the first and second defendants' costs.
Legal Topics
['rights and Duties of Partners Inter Se' 'fiduciary Duties of Partners' "conflict Between Partner's Separate Interest as Lessor and Partnership Interests" 'poker Machine Entitlements' 'contractual Restraints on Alienation of Poker Machine Entitlements' 'unclean Hands']
['partnership' 'equity' 'liquor and Gaming' 'property and Leases'] ['rights and Duties of Partners Inter Se' 'fiduciary Duties of Partners' "conflict Between Partner's Separate Interest as Lessor and Partnership Interests" 'poker Machine Entitlements' 'contractual Restraints on Alienation of Poker Machine Entitlements' 'unclean Hands']

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Procedural Posture

Equity Division Proceeding Concerning Partnership, Lease and Poker Machine Entitlements / Final Judgment After Hearing

Legal Issues

  1. 1 ['Were the partners as lessees under the lease entitled to transfer the Poker Machine Entitlements away from the licence?' 'Do the fiduciary obligations of the MacDonalds as partners constrain their exercise of their rights and powers as proprietors and lessors of the freehold?' 'Can the Court order the MacDonalds to support a transfer of Poker Machine Entitlements, for the purposes of Gaming Machines Act, s 19(3)(c), when they do not subjectively support it?' 'Do unclean hands debar Mr Geltch from claiming equitable relief?']

Ratio Decidendi

Clause 9.1 of the lease required the lessees to apply for and maintain all authorities required by law to enable the provision of entertainment at the hotel. Because a Gaming Machines Act, s 56 authority to keep poker machines depended on corresponding Poker Machine Entitlements, alienating those entitlements would jeopardise and breach the obligation to maintain the authorities. The partners as lessees were therefore contractually restrained from transferring the Poker Machine Entitlements during the lease. That contractual obligation circumscribed the MacDonalds' fiduciary obligations as partners, so they were not required to facilitate realisation of the entitlements for the...

Court Disposition

Statement of claim dismissed; interlocutory orders discharged; declarations made that the Head Lease, Management and Operating Agreement, Partnership Agreement and Shareholders' Agreement were terminated or dissolved on specified dates; plaintiff ordered to pay the first and second defendants' costs.

Orders

  • ['Order that the Statement of Claim be dismissed.' 'Order that the orders made by Gzell J on 20 March 2007 be discharged.' "Reserve liberty to the defendants to apply by motion within 28 days for an inquiry as to damages pursuant to the plaintiff's undertaking as to damages." 'Declare that registered lease NE824570...