Guarantees disappear like magic - Barecall Pty Ltd v Hoban
[2009] NSWSC 1104
In a recent NSW Supreme Court case, a landlord lost the right to
claim over $1.3 million from the guarantors of a lease because of
incomplete and inadequate documentation.
Background
The lessee was granted a lease and a sublease of premises in
Manly to be used as a nightclub/restaurant. Manly Council owned
some parts of the leased premises - hence the need for a
sublease
Initially, the lease contained personal guarantees from three
directors of the lessee company. The lease (both headlease and
sublease) was varied to change the permitted use slightly and to
provide for a greater area and additional rent. The variation
introduced two new guarantors. The lessee went into liquidation
towards the end of the first term of the lease leaving substantial
debts. The landlord made a claim against the guarantor.
