Intro

This legal practice is located in the riverside suburb of South Perth, only minutes south of Perth.
AMCG Legal is operated by Andrew McGuiness and as a sole legal practitioner will personally deal with your legal query.

If you have a legal question you are welcome to telephone, email or make an appointment to chat.

Profile

AMCG Legal is a legal practice which primarily works in the areas of business and commercial law, property and leasing, trusts and also wills, powers of attorney and deceased estates.

Andrew McGuiness has been a solicitor since 1981 and is admitted as a Barrister and Solicitor in the Supreme Court of Western Australia, in the Supreme Court of New South Wales and the High Court of Australia.

If you would like to discuss any legal query that you have in these areas of law please feel free to contact Andrew by email, telephone, fax or arrange a meeting.

Andrew is happy to assist you whether it be by providing advice, reviewing draft papers and agreements or preparing required documentation.

File 20

 

Updates

Guarantee

Subtitle: 
Signature bound company as lessee + director as guarantor in personal capacity

This decision considered whether the sole director of the lessee/principal debtor had signed a guarantee (cl 24 in the 2004 REIWA standard form lease) in her personal capacity.  The lessee defaulted on rent and other payments under the lease, and was deregistered by the time of trial.The issues considered included:

  • Whether there was an objective intention to create a personal legal liability under the guarantee (in the lease) 
  • Whether the guarantee was “signed by the party to be charged therewith” within the meaning of s 4 of the Statute of Frauds 
  • Whether the guarantee was unenforceable because the lease was unregistered

There was a corporate execution clause and a personal execution clause for the lessee, both marked “Delete if inapplicable” (neither were deleted). The corporate execution clause was signed by the director above the dotted line marked director.  The personal execution clause was not signed, although the witness clause directly below was signed.The Particulars of Lease identified the director as the guarantor.The court held:

  • the director manifested an objective intention to create legal relations as a guarantor in her personal capacity 
  • the requirements of s 4 of the Statute of Frauds were satisfied 
  • the fact that the lease not was registered was  not a bar to recovery of Money (as defined) due under the lease.  On the proper construction of the lease, the obligation to pay Money covered a registered or unregistered lease (although unnecessary to decide, the obligation to perform the Lessee’s Covenants may not have arisen under an unregistered lease.

Objective intention to create legal relationsAt [47]-[53], the court cited previous authority as to when the requisite intention to be bound exists:

  • “the intention if manifested in light of ‘the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances’.” 
  • “’intention, or lack thereof, is to be found upon the construction of the document as a whole, including but not being limited to the qualification attached to the signature, in the light of the surrounding circumstances to the extent to which evidence thereof is permissible’.” 
  • “the question is ultimately whether ‘the parties’ conduct, viewed objectively, reveals a tacit understanding or agreement, or a manifestation of mutual assent, which evinces an intention to create legal relations.” 

The following circumstances were relevant to assessing the director’s objective intention:

  • The omission of a signature next to the lessee’s personal execution clause was not conclusive 
  • The signature of the director with the qualification “Director” was not conclusive of an intention to be legally bound only in that capacity 
  • The Particulars of the Lease named the director as the guarantor 
  • If the director’s signature as a director was not evidence of an intention to be bound personally then there was no purpose for the witness’s signature. A reasonable person in the lessor’s position (ie viewing the execution page) would have inferred that the director’s signature also served as her personal signature 
  • The director had made handwritten changes to the lease, but the guarantee provision was untouched 

Statute of FraudsIn summary, the court held:

  • The capacity in which the director signed the lease was not relevant to whether there was a written memorandum or note for the purpose of s 4 of the Statute of Frauds - the s 4 issue was one of written evidence, not intention 
  • Alternatively/additionally, a letter about the lease signed by the director two days before the lease, with her unqualified signature, was a sufficient written memorandum or note to bind her personally.

 

Extras

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Contact

The office is at
Suite 5, 23 Bowman St
South Perth WA 6151

The postal address is
PO Box 829
South Perth WA 6951

 

Emailandrew@amcglegal.net
Telephone+61 8 9368 1900
Mobile0419 928 666