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Our Win in the High Court of Australia

On 17 June 2015 The High Court of Australia unanimously ruled in favour of the Appellants Mr Jacek Gnych and Sylwia Gnych who were represented by Counsels and Lawyers from Drexler Litigation Lawyers at the High Court hearing on 5 May 2015. Our legal team consisted of counsels G O’L Reynolds, G P Segal, M. A Friedgut, Principal Solicitor from Drexler Litigation Lawyers, W Drexler and Lawyers G Stathopoulos and P Knap. That was a coveted outcome for our clients who after a long legal dispute with the Polish Club resumed possession of the Kameralna Restaurant. The court ordered inter alia the Polish Club to pay all legal costs in relation to all the legal proceedings and additionally matter was remitted for determination of assessment of damages……( Read More)

Brief History of Dispute

The High Court has unanimously allowed an appeal from a decision of the NSW Court of Appeal on the validity and enforcement of leases in licensed and club premises. The Appellants, Mr Jacek and Sylwia Gnychs operated a restaurant in part of the Polish Club’s premises, although there was no written lease. After the Polish Club terminated Gnych’s lease they asserted that they had a five year lease under the Retail Leases Act 1994 (NSW). Although this claim was successful at trial, the Polish Club appealed on the basis that any lease was contrary to ss 92(1)(c) and 92(1)(d) of the Liquor Act 2007 (NSW), which prohibit grants of leases over licensed premises in some circumstances, and s41J of the Registered Clubs Act 1976 (NSW), which prescribes a process for the disposal of a registered club’s core property. The NSW Court of Appeal held that s 92(1)(d) (which requires the approval of the Independent Gaming and Liquor Authority for leases in premises where alcohol was not served), but not the other statutory provisions, rendered any lease between the Gnychs and the Polish Club unenforceable.

High Court Judgment

The Court (French CJ, Kiefel, Keane and Nettle JJ, Gageler J agreeing) held that s 92(1)(d) of the Retail Lease Act is directed to the conduct of the licensee, rather than the relationship between the licensee and a third party ([43]). Although the Polish Club breached s 92(1)(d) when it gave the Gnychs possession of the restaurant area of the premises, that did not affect the lease. The provision of a statutory penalty for this breach meant that there was no need to prevent the lease, and the Court of Appeal erred in holding otherwise, as s 92(1) contemplated that a lease over licensed premises can be effective, it was possible that the Authority would discharge its responsibility by maintaining the status quo, and the Authority had regulatory powers to deal with behaviour by a lessee that caused a breach of the licence ([51], [52] and [55].) In a concurrence, Gageler J agreed, observing (at [76]) that contrary public policy concerns did not arise, because the Gnychs did not know of the breach of s 92(1)(d), and that the Court of Appeal’s otherwise compelling interpretation of that section was vitiated by the Act’s object of flexible and practical scheme with minimal formality and the wide range of discretionary powers available to the authority ([82] and [83].) Even more significantly, at the hearing on 5 May 2015 Nettle J observed that the Polish Club contravened the Law and was liable for a penalty for doing so.

High Court Judgment[2015] HCA 23
ResultAppeal allowed
High Court DocumentsGnych
Full Court Hearing[2015] HCATrans 101
Special Leave Hearing[2015] HCATrans 62
Appeal from NSWCA[2014] NSWCA 321
Trial Judgment, NSWSC[2013] NSWSC 1249