Resolving statutory illegality in landlord and tenant disputes

How do you resolve an apparent competition between two separate pieces of legislation, where one creates rights that are seemingly taken away by the other?

This was the question recently considered by the High Court in a dispute between a landlord and tenant where the issue of statutory illegality came to the fore. In Gnych v Polish Club Ltd ¹, the High Court ruled that the landlord could not rely on its own breach of one statute to argue against the existence of a lease under another statute.

The facts

The Polish Club Ltd (Club) was the owner of a property that was licensed under the Liquor Act 2007 (NSW) (Liquor Act) for the sale and supply of alcohol for consumption on the property. The Club wished to lease certain areas to a couple, Mr and Mrs Gnych (Gnychs), who wanted to run a restaurant from the premises. Terms were