Meriton Properties Pty Ltd v DCM Leases-Five Pty Ltd [2009] NSWADT 121

Meriton Properties Pty Ltd v DCM Leases-Five Pty Ltd [2009] NSWADT 121

Mr Plant was held liable as guarantor because, by permitting the lease to be returned to Meriton with his signature and reinstated name as guarantor, he created reasonable grounds for Meriton to believe he consented to guarantee the lease obligations. The tribunal applied the objective theory of contract, as established in Toll v Alphapharm, and found no basis in law for separating the guarantee from the main lease terms.

Parties
Applicant: Meriton Properties Pty Ltd; 1st Respondent: DCM Leases-Five Pty Ltd; 2nd Respondent: Wayne Douglas Plant
Jurisdiction
Australia
Judgment Date
26 May 2009
Procedural Posture
Retail Tenancy Claim / Final Decision After Hearing
Outcome
Orders for damages and liability against both respondent companies and the guarantor; directions given for costs applications.
Legal Topics
Guarantee, Formation of Contract, Lease Agreements, Guarantor Liability
Contract Law Property Law Retail Leases Guarantee Formation of Contract Lease Agreements Guarantor Liability

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Parties

Meriton Properties Pty Ltd

Applicant

DCM Leases-Five Pty Ltd

1st Respondent

Wayne Douglas Plant

2nd Respondent

Procedural Posture

Retail Tenancy Claim / Final Decision After Hearing

Legal Issues

  1. 1 Whether Mr Plant was contractually bound as guarantor of the lease's obligations despite indicating reluctance to assume those responsibilities
  2. 2 Whether the tribunal had jurisdiction to make orders against the guarantor

Ratio Decidendi

Mr Plant was held liable as guarantor because, by permitting the lease to be returned to Meriton with his signature and reinstated name as guarantor, he created reasonable grounds for Meriton to believe he consented to guarantee the lease obligations. The tribunal applied the objective theory of contract, as established in Toll v Alphapharm, and found no basis in law for separating the guarantee from the main lease terms.

Court Disposition

Orders for damages and liability against both respondent companies and the guarantor; directions given for costs applications.

Orders

  • The First Respondent is liable to the Applicant for damages totalling $114,944.56, inclusive of interest in the sum of $4,940.08.
  • The Second Respondent is liable to pay to the Applicant the sum of $114,944.56.