Shevill v Builders Licensing Board [1982] HCA 47

High Court of Australia Gibbs C.J. Murphy, Aickin, Wilson and Brennan JJ. Shevill v Builders Licensing Board [1982] HCA 47

ORDER Appeal allowed with costs. Order that the judgment of the Supreme Court of New South Wales (Court of Appeal) be set aside and in lieu thereof it be ordered:

(1) That the appeal to that Court be allowed with costs.

(2) That the judgment of Carmichael J. be set aside and in lieu thereof order that judgment in the action be given for the defendants.

(3) That the plaintiff have the costs of the action up to the time when the arrears of rent were paid and that the defendants have the costs of the action thereafter.

Cur. adv. vult.

The following written judgments were delivered:—

1982, Sept. 1 Gibbs C.J.

This is an appeal from a decision of the Court of Appeal Division of the Supreme Court of New South Wales which, by a majority, dismissed an appeal from a judgment given by Carmichael J. in favour of the present respondent, the plaintiff in the action. The appellants were the guarantors of the due performance by Shevill Truck Sales & Service Pty. Ltd. ("the lessee") of all the terms and conditions of a lease dated 22 April 1976 under which the lessee held certain land at Milperra for a term of three years commencing on 7 March 1976. The land was transferred to the respondent on 13 July 1976, and thereafter the lessee attorned tenant to the respondent. Subsequently the guarantee was assigned to the respondent. The lease, so far as it is material, reserved a yearly rent of $35,655 which the lessee covenanted (by cl. 3) to pay in advance by equal monthly instalments of $2,971.25. Clause 9(a) of the lease provided as follows:

The Lessor and the Lessee covenant and agree:

(a) That if the rent hereby reserved or any part thereof shall be unpaid for the space of fourteen (14) days after any of the days on which the same ought to have been paid in accordance with the covenant for payment of rent herein contained (although no formal or legal demand shall have been made therefor) or if the Lessee commits or suffers to occur any breach or default in the due and punctual observance and performance of any of the covenants obligations and provisions of this lease or of any Rules made hereunder or if the Lessee be a company an order is made or a resolution is effectively passed for the winding up of the Lessee (except for the purpose of reconstruction or amalgamation with the written consent of the Lessor which consent shall not be unreasonably withheld) or if the Lessee goes into liquidation or makes an assignment for the benefit of or enters into an arrangement or composition with its creditors or stops payment of or is unable to pay its debts within the meaning of any relevant Companies Act or ordinance or if execution is levied against the Lessee and not discharged within thirty (30) days or if the Lessee (being an individual) becomes bankrupt or commits an act of bankruptcy or brings his estate within the operation of any law relating to bankrupts then and in any one or more or either of such events the Lessor at any time or times thereafter shall have the right to re-enter into and upon the demised premises or any part thereof in the name of the whole to have again repossess and enjoy the same as its former estate anything herein contained to the contrary notwithstanding but without prejudice to any action or other remedy which the Lessor has or might or otherwise could have for arrears of rent or breach of covenants or for damages as a result of any such event and thereupon the Lessor shall be freed and discharged from any action suit claim or demand by or obligation to the Lessee under or by virtue of this Lease.