In Chan v Cresdon Pty Ltd (1989) 168 CLR 242, the High Court of Australia addressed the enforceability of a guarantee connected to a lease agreement that had not been registered under the Real Property Act 1861 (QLD). The appellants had guaranteed the obligations of Sarcourt Pty Ltd, the lessee, under a lease agreement with Cresdon Pty Ltd, the lessor. When the lessee defaulted, the lessor sought to enforce the guarantee. The appellants argued that because the lease had not been registered, they were not bound by the guarantee, citing a failure of consideration due to the unfulfilled condition of granting a legal lease term of five years. However, the High Court, focusing on the contractual obligations as outlined in the lease agreement, determined that the guarantee's validity did not depend on the lease's registration. Therefore, despite the non-registration of the lease, the appellants were held liable under the guarantee.
Full text: https://jade.io/article/67539
From the TLDR Caselaw Archive