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Barecall Pty Ltd v Hoban

Barecall Pty Ltd v Hoban

Case [2009] NSWSC 1104 16 October 2009

Contract Formation

Breach of Contract

Unconscionable Conduct

Guarantee and Indemnity

Estoppel by Convention

Contract Law

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CITATION: Barecall Pty Limited v Hoban [2009] NSWSC 1104

HEARING DATE(S): 18, 19 and 20 February; 25 and 26 August 2009

JUDGMENT DATE :
16 October 2009

JURISDICTION: Equity Division

JUDGMENT OF: Ward J

DECISION: Plaintiff's claim dismissed.

CATCHWORDS: GUARANTEE AND INDEMNITY - the contract of guarantee - original lease, sub lease and variation of lease contained guarantee covenants - whether defendants guaranteed performance of lessee’s obligations under lease, as varied, and sub-lease - whether failure to register leases fatal to lessor’s claim - whether failure of some defendants to sign documents would discharge other defendants from liability - held that defendants not liable as guarantors - lease, as varied, did not provide for guarantee by five defendants - applying Chan v Cresdon, guarantee obligation only extended to registered lease - failure of intended co-guarantors to sign documents would be effective to discharge other defendants from liability - ESTOPPEL - general principles - whether certain defendants estopped from denying obligation to guarantee performance of lessee’s obligations - whether representation made and relied upon giving rise to equitable estoppel - whether common assumption between lessor and defendants, giving rise to estoppel by convention - held that defendants not estopped from denying guarantee obligation - representation not made by relevant defendants - no sufficiently clear, unequivocal and unambiguous common assumption to give rise to estoppel by convention

LEGISLATION CITED: Corporations Act 2001
Family Provision Act 1982
Real Property Act 1900

CATEGORY: Principal judgment

CASES CITED: Amalgamated Investment & Property Co v Texas Commerce International Bank [1982] 1 QB 84
Andrews v Racken Pty Limited [2007] NSWSC 1010
Ankar v Westminster Finance (Australia) Limited (1987) 162 CLR 549
Bell Group Limited (in liq) v Westpac Banking Corporation [2008] WASC 239
Bosaid v Andry [1963] VR 465
Chan v Cresdon Pty Limited (1989) 168 CLR 242
Clark Equipment Credit Australia Limited v Kiyose Holdings Pty Limited (1989) 21 NSWLR 160
Coghlan v Lock (1987) 8 NSWLR 881
Corumo Holdings Pty Limited v C Itoh Limited (1991) 5 ACSR 720
Discount & Finance Limited v Gehrig’s NSW Wines Limited (1940) 40 SR (NSW) 588
Evans v Bremridge (1856) 8 DeG M & G 100; 44 ER 327
Expectation Pty Limited v PRD Realty Pty Limited (2004) 140 FCR 17
Farrow Mortgage Services Pty Limited (In liq) v Slade and Nelson (1996) 38 NSWLR 636
FCA Finance Pty Limited v Cummings (unreported, QSC, 8 February 1988)
Follacchio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067
GEC Marconi Systems Pty Limited (2003) 128 FCR 1
Hadid v Redpath (2001) 35 MVR 152
Holme v Brunskill (1877) 3 QBD 495
James Graham Limited v Southgate-Sands [1986] 1 QB 80
James Thane Pty Limited v Conrad International Hotels Corp [1999] QCA 516
Jones v Dunkel (1959) 101 CLR 298
Laurinda Pty Limited v Capalaba Park Shopping Centre Pty Limited (1989) 166 CLR 62
Macrory v Scott (1850) 5 Exch 906; 155 ER 396
Marston v Charles H Griffith & Co Pty Limited (1985) 3 NSWLR 294
Masters v…

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 Barecall Pty Ltd v Hoban

Details

AGLC: Barecall Pty Ltd v Hoban [2009] NSWSC 1104
Case: [2009] NSWSC 1104
Decision Date: 16 October 2009

CaseChat Overview and Summary

The dispute in Barecall Pty Ltd v Hoban involved the interpretation and enforcement of guarantee and indemnity clauses within a commercial lease arrangement. The plaintiff, Barecall Pty Ltd, sought to enforce guarantees provided by the defendants in relation to a lease and a sub-lease. The defendants argued that they were not liable as guarantors for the lessee’s obligations, either under the original lease as varied or the sub-lease, due to various legal and procedural issues.

The primary legal issues the court needed to address were whether the defendants were indeed liable as guarantors under the lease as varied and the sub-lease, whether the failure to register the leases impaired the lessor's claim, and if the non-participation of some defendants in signing the guarantee documents discharged the other defendants from their obligations. Additionally, the court considered whether the defendants could be estopped from denying their guarantee obligations based on representations or a common assumption.

The court found that the defendants were not liable as guarantors. The lease, as varied, did not explicitly provide for a guarantee by the five defendants in question. The court's reasoning hinged on the requirement for a clear and unequivocal guarantee, which was not present in the documents. The court also held that the failure to register the leases did not necessarily invalidate the lessor’s claim, but it did impact the enforceability of the guarantee. Furthermore, the court determined that the non-participation of some defendants in signing the guarantee documents effectively discharged the other defendants from liability. Regarding estoppel, the court found that the defendants were not estopped from denying the guarantee obligations as there was no sufficiently clear, unequivocal, or unambiguous common assumption that could give rise to an estoppel by convention. The representation made by the lessor was not clear and unambiguous, and the assumption was not sufficiently specific or mutual to create an equitable estoppel.

Orders