Bailey, R.D. v Manos, J - [1992] FCA 251

Re: ROBERT DEAN BAILEY and OTHERS
And: JOHN MANOS; CHRISTINE MANOS; ANTHOULA MANOS; MANOS HOLDINGS PTY LTD and
JOHN MANOS INVESTMENTS PTY LTD
No. S G6 of 1992
FED No. 251
Construction of Deeds - Stamp Duty

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
Von Doussa J.(1)

CATCHWORDS

Construction of Deeds - clause limiting liability of a guarantor to a specified sum - similar limitation clause in mortgage debentures granted to the creditor by the principal debtors - whether on the proper construction of the deeds payment of a sum equal to the specified sum by the debtors discharged the guarantor - whether a personal guarantee was in respect of the past indebtedness of the principal debtors or extended to future debts becoming due to the creditor - manner of apportionment of general payments between interest, a debt carrying interest, and other debts, considered

Stamp Duty - admission of debenture deed into evidence - whether sufficiently stamped - sufficiency of stamping depending on the construction of the deed - upon holding that on its proper construction the deed was insufficiently stamped, proceedings stood over until deed duly stamped

Stamp Duty Act 1923 (SA), ss.21, 22, 77

Judiciary Act 1903 (Cwth), s.79

HEARING

ADELAIDE

#DATE 6:5:1992

Counsel for the applicants : Dr R J Baxter

Solicitor for the applicants : Finlaysons

Counsel for the respondents : Mr P C Heinrich

Solicitor for the respondents : Baker O'Loughlin

ORDER

1. Pursuant to O29, r2 the following two issues be decided as

separate questions:

Question 1. Whether, upon the true construction of the debenture granted by Manos Holdings Pty Ltd to the applicants, that company is presently liable to pay any money to the applicants.

Question 2. Whether, upon the true construction of the guarantee given by John Manos to the applicants, he is presently liable to pay any money to the applicants.

2. The decision of question 1 be stood over for further consideration

on a date to be fixed.

3. Question 2 be answered : No.

4. The question of costs be reserved for further consideration.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The Court is asked by all parties to these proceedings to determine as separate issues two questions which concern the construction of certain deeds. For this purpose the parties have agreed relevant facts and documents. The two questions raise discrete issues which lend themselves to determination as separate issues. If the points of construction are decided against the applicants the decision will finally determine the litigation. If one or both of the questions formulated by the parties are decided in favour of the applicants the remaining questions in the proceedings concern only the amount of the indebtedness of the first or the fourth respondent to the applicants. The parties have indicated that the extent of the indebtedness is a matter for calculation upon which agreement is likely. In these circumstances it…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bailey, R.D. v Manos, J

Details

AGLC: Bailey, R.D. & ors v Manos, J. & ors [1992] FCA 251
Case: [1992] FCA 251
Decision Date: 06 MAY 1992

CaseChat Overview and Summary

In the case of Bailey, R.D. v Manos, J, the court was tasked with determining the liability of the guarantor, John Manos, under a specific guarantee agreement and the liability of Manos Holdings Pty Ltd under a debenture agreement. The case involved a dispute over the construction of these financial instruments, particularly the clauses that limited the liability of the guarantor and the debenture holder. The court had to ascertain whether a payment made by the debtors to the creditor could discharge the guarantor and whether the personal guarantee extended to future debts or only to past indebtedness.

The legal issues the court had to decide included whether the limitation clause in the guarantee meant that the guarantor was only liable for the specified sum, and if the debenture holders were liable for any amount after the debtors had paid a specific sum. Another issue was whether the guarantee applied to past debts only or also to future debts that the principal debtors might incur. The court also needed to consider how any general payments made by the debtors should be apportioned between interest, a debt carrying interest, and other debts.

The court found that the guarantor, John Manos, was not liable to pay any money to the applicants. This decision was based on the court's interpretation of the guarantee agreement, which indicated that the guarantee was limited to the specified sum and did not extend to any future debts. The court also noted that the manner of apportionment of general payments between interest, a debt carrying interest, and other debts was not determinative of the guarantor's liability under the agreement. The decision regarding the liability of Manos Holdings Pty Ltd under the debenture was reserved for further consideration, and the question of costs was also reserved for later determination.

Orders

Orders of the court

1. Pursuant to O29, r2 the following two issues be decided as

separate questions:

Question 1. Whether, upon the true construction of the debenture granted by Manos Holdings Pty Ltd to the applicants, that company is presently liable to pay any money to the applicants.

Question 2. Whether, upon the true construction of the guarantee given by John Manos to the applicants, he is presently liable to pay any money to the applicants.

2. The decision of question 1 be stood over for further consideration

on a date to be fixed.

3. Question 2 be answered : No.

4. The question of costs be reserved for further consideration.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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