SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BURRELL & FAMILY PTY LTD v HARRIS
[2010] SASC 184
Judgment of The Honourable Justice White
24 June 2010
GUARANTEE AND INDEMNITY - THE CONTRACT OF GUARANTEE - PARTIES AND CAPACITY
GUARANTEE AND INDEMNITY - THE CONTRACT OF GUARANTEE - CONSTRUCTION AND EFFECT - GENERALLY
Defendant is the sole director of a company which borrowed money from the plaintiff - written loan agreement executed by the defendant as director of the borrower contained in cl 4(d) an acknowledgment of personal liability by the defendant but no provision for signature by him in two capacities.
Whether the defendant executed the loan agreement in his personal capacity as well as in his capacity as director of the borrower - whether the acknowledgment of personal liability constitutes an enforceable guarantee by the defendant.
Held: defendant executed the loan agreement in both his personal capacity and in his capacity as director of the borrower - cl 4(d) of the loan agreement constitutes an enforceable guarantee - plaintiff's claim upheld.
Limitation of Actions Act 1936 (SA) s 42, referred to.
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503; Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99; Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160; Follacchio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067, applied.
Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909; Stage Club Limited v Millers Hotels Pty Ltd (1981) 150 CLR 535; Surrendra Overseas Ltd v Government of Sri Lanka [1977] 1 WLR 565; Bush v Stevens [1963] 1 QB 1; Spencer v Hemmerde [1922] 2 AC 507, distinguished.
Ariadne Steamship Company Ltd v James McKelvie & Co [1922] 1 KB 518, not followed.
Hardel Pty Ltd v Burrell & Family Pty Ltd (2009) 103 SASR 408, discussed.
Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310; Rawcliffe v Bianco Hiring Service Pty Ltd (2002) 224 LSJS 266; Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773; Ontario Marble Co Ltd v Creative Memorials Ltd (1963) 39 DLR (2d) 149; Wharf Street Pty Ltd v Amstar Learning Pty Ltd [2004] QCA 256; Universal Steam Navigation Co Ltd v James KcKelvie & Co [1920] AC 492; Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549, considered.
BURRELL & FAMILY PTY LTD v HARRIS
[2010] SASC 184Civil
WHITE J: The plaintiff seeks to recover more than $2m from the defendant (Mr Harris) on the basis of a guarantee. For this purpose it…
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- Case
- [2010] SASC 184
- Decision Date
CaseChat Overview and Summary
The primary legal issue was whether the guarantee provided by Mr Harris was effective and enforceable. Specifically, the court needed to determine if the guarantee clause in the contract clearly and unambiguously committed Mr Harris to personally repay any outstanding debt of Hardel Pty Ltd to the plaintiff. The court also had to consider whether Mr Harris had the capacity to enter into the guarantee and whether the terms of the guarantee were clear and unequivocal.
The court found that the guarantee clause in the contract did indeed contain a clear and unequivocal commitment by Mr Harris to personally repay any outstanding debt of Hardel Pty Ltd to the plaintiff. The court held that Mr Harris had the capacity to enter into the guarantee and that the terms of the guarantee were sufficiently clear to be enforceable. The court further determined that Mr Harris was liable under the guarantee for the full amount of Hardel Pty Ltd's outstanding debt, including accrued interest. Consequently, the court upheld the plaintiff's claim and ordered that judgment be entered in favour of the plaintiff for the full amount of the debt, together with interest calculated in accordance with the terms of the contract.
The court ordered that judgment be entered in favour of the plaintiff, Burrell & Family Pty Ltd, in the sum of $1,440,786.87, together with interest calculated in accordance with clause 4 of the April 2008 Agreement to the date of judgment. The court requested that the parties provide details regarding the calculation of the interest.
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