Boral Resources (WA) Ltd v Silkbeam Holdings Pty Ltd as Trustee for PHVV Unit Trust

[2019] WADC 141

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   BORAL RESOURCES (WA) LTD -v- SILKBEAM HOLDINGS PTY LTD as Trustee for PHVV UNIT TRUST [2019] WADC 141

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   2 OCTOBER 2019

DELIVERED          :   17 OCTOBER 2019

FILE NO/S:   CIV 4787 of 2018

BETWEEN:   BORAL RESOURCES (WA) LTD

Plaintiff

AND

SILKBEAM HOLDINGS PTY LTD as Trustee for PHVV UNIT TRUST

First Defendant

ALLSTATE WATER CARTAGE PTY LTD as Trustee for TARZIA FAMILY TRUST

Second Defendant

Catchwords:

Practice and procedure - Turns on its own facts

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	Mr M Holler
First Defendant	:	Mr J Cook
Second Defendant	:	Mr J Cook

Solicitors:

Plaintiff	:	Trinix Lawyers
First Defendant	:	Mendelawitz Morton
Second Defendant	:	Mendelawitz Morton

Case(s) referred to in decision(s):

Relwood Pty Ltd v Manning Homes Pty Ltd [1990] 1Qd R 48

DEPUTY REGISTRAR HEWITT:

1. In this matter on 22 August 2019 I delivered a decision which was posted to the solicitors representing the various parties and a date fixed to give them the opportunity to move for such orders as might be appropriate in the light of the reasons for decision.

2. Subsequently, the solicitors for the plaintiff by letter raised an issue regarding a case upon which I had relied in the decision which I had distributed.  Essentially, the issue raised was whether in interpreting the case I had regarded a copy document reproduced within the decision as comprising an application for credit as well as a guarantee.

3. In the light of the matters raised by the letter I relisted the matter for argument and it came before me on 2 October 2019.  At that hearing I made it known to the parties attending, that I had in fact interpreted the document to which I have referred, as being both an application for credit and a guarantee. 

4. Upon examining other material contained within the judgment I formed the view that in doing so I was clearly wrong.  Hence the relisting of the matter to give the parties the opportunity to comment before making final orders.

5. The facts of the matter are that in the case of Relwood Pty Ltd v Manning Homes Pty Ltd [1990] 1Qd R 48 an application for credit was lodged with Relwood Pty Ltd and subsequently a form of guarantee was produced and executed by the guarantors which reproduced some but not all of the terms of the application for credit.

6. In particular, both the application for credit and the terms reproduced under guarantee referred to the fact that the credit limit was 'to be agreed'.  There was never any agreement as to the credit limit and the issue before the court was how the guarantee should be interpreted having regard to the words 'to be agreed'.  Of relevance to the issue was the fact that the form of the guarantee was 'do hereby guarantee the payment/repayment in full to you of all debts incurred by the said company to you'.  The said company referred to was the customer.

7. The court held that notwithstanding those words the fact that the document upon which the guarantee was written also contained what effectively was an extract of the application for credit containing the words 'to be agreed' that in fact until a credit limit had been agreed the guarantee was ineffectual and by implication had a credit limit been agreed then that would have applied to the guarantee.

8. The circumstances in the present case are somewhat similar because the form of the guarantee which is appended to the credit application has cross references to the credit application, and does in fact have credit limits although it is expressed to be an all monies guarantee.  The issue therefore for decision is whether the credit limit expressed on the application for credit should apply to and govern the guarantee.

9. Relwood Pty Ltd v Manning Homes Pty Ltd is a decision of the Supreme Court of Queensland and in argument the plaintiff relied on a number of decisions of lesser authority emanating from courts in Victoria. 

10. In the reasons which I distributed to the parties I took the view, that unless demonstrated to be clearly wrong, the Queensland case was the more powerful authority and should be followed in this instance.

11. Whilst I acknowledge my misunderstanding of the Relwood Pty Ltd case nonetheless I am mindful of the fact that the application before me was a summary judgment.  Summary judgment applications should only succeed where the plaintiff's entitlement is clear.  In order to make such a finding I would need to be of a view that the Relwood case is unarguably distinguishable from the Victorian cases and therefore should not have application in the matter before me.  I am unable to reach that conclusion.  I am of the view that the points upon which the Relwood case is said to be distinguishable from the Victorian cases are open to debate.

12. The arguments of the plaintiff might well prevail in that argument but I do not regard that outcome as being sufficiently certain to justify entering a summary judgment against this defendant and accordingly although I consider I made an error in the reasons for decision which I distributed nonetheless on review of the matter and to having regard to the argument advanced when the matter was reconsidered I adhere to the view that this a case where an outcome in favour of the plaintiff is not so clear that it should not be entitled to a summary judgment and accordingly, it is my view, that the application for summary judgment should be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

TS
Court Officer

8 OCTOBER 2019