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CASE BRIEF TEMPLATE
Name of
Case
Chan v Cresdon Pty Ltd
Citation and
Court
(1989) 168 CLR 242
Material
Facts

Creston (the landlord) agreed in writing to lease Torrens Title land in Queensland to
Sarcourt Pty Ltd (The Tenant) for a term exceeding three years.
The agreement contained the terms of the lease as an annexure, but the lease was never
registered, despite being duly executed.
 Robert and Grace Chan (the guarantors) were also parties to the agreement because,
pursuant to cl 23.01 of the annexure, they guaranteed the tenant’s obligations
 Sarcourt defaulted under the lease and Cresdon took action against the guarantors.
 Cresdon’s action against the guarantors was stated as being one taken on the guarantee
‘under this lease’.
 The guarantors argued that the lease’s registration was a condition precedent to their
liability and that, until registration, there were no obligations to be performed under the
lease.
 They also contended that third parties were not subject to the rule in Walsh v Lonsdale,
and that the rule did not mean that a term recognized in equity would necessarily be
sufficient to satisfy the condition of a legal term.
 Cresdon argued that a lease that remained unregistered, although ineffectual at law, was
not void or ineffective for all purposes.
The issue before the High Court was whether the guarantee was enforceable, not withstanding
that the lease had not been registered as required by statute. It also had to consider the
application of the rule in Walsh v Lonsdale to the facts in this case.
Walsh v Lonsdale

Legal Issue
Relevant
Law
Application
of Law to
the Facts
Conclusion
It was decided that Walsh v Lonsdale only gives an equitable lease and thus would not be a lease
‘under this lease’
The majority of the High Court (Mason CJ, Brennan, Deane, and McHugh JJ; Toohey J dissenting)
decided agsint the landlord and ruled that, because there was no registered lease, there was no
enforceable guarantee. It also held that, although the rule in In Walsh v Lonsdale meant that an
agreement to lease gave rise to an equitable lease, it did not create a legal interest. Further, the
operation of the rule depended upon the availability of specific performance of the agreement to
lease. The facts in this case did not support such a finding. The guarantee of obligations ‘under
this lease’ referred to obligations in a legal lease. Because no legal lease existed there was no
enforceable guarantee.
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