ATL (Australia) Pty Ltd v Cui

The case of ATL (Australia) Pty Ltd v Cui involved a dispute over the validity and enforceability of guarantees and indemnities executed in relation to loans provided by the plaintiff to various defendants. The primary focus was on whether certain guarantees were validly executed and whether any of the defendants could be held liable under them. The dispute was adjudicated by the Supreme Court of New South Wales.

The legal issues before the court encompassed whether the second defendant could rely on the defence of non est factum, arguing that he believed he was signing the guarantee only in his capacity as a director of the corporate borrower. The court also considered whether the guarantees were unjust under section 9 of the Contracts Review Act 1980 (NSW) and whether there had been a variation of the guarantee that could discharge the guarantors. Additionally, the court examined the validity of the signature on a guarantee purportedly executed by a corporate guarantor, which was alleged to be a forgery.

The court found that the second defendant's defence of non est factum was not established as he was aware of the essential character of the guarantee he signed. Consequently, the defence failed because he had knowledge of the document's nature, which was sufficient to bind him to its terms. The court further determined that the guarantees were not unjust in the circumstances, as the terms were fair and reasonable at the time of their execution. Additionally, the court held that the side agreement between the creditor and the borrower did not alter the guarantors' rights, and thus the principle in Ankar Pty Ltd v National Westminster Finance did not apply. Finally, the court was satisfied on the balance of probabilities that the signature on the guarantee executed by the eleventh defendant was a forgery, rendering the guarantee unenforceable.

The court ruled in favour of the plaintiff, affirming the validity and enforceability of most guarantees against the defendants. The court ordered that the defendants were liable under the guarantees as per the terms agreed upon, with the exception of the guarantee executed by the eleventh defendant, which was deemed invalid due to the forgery.