Choules v Siglin
[2001] WASC 186
CHOULES & ORS -v- SIGLIN & ANOR [2001] WASC 186
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 186 | |
| Case No: | CIV:1566/2001 | 10 JULY 2001 | |
| Coram: | MASTER BREDMEYER | 17/07/01 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application adjourned | ||
| PDF Version |
| Parties: | ADRIAN CLAUDE CHOULES LESLEY BARBARA CHOULES ARTHUR THORNDYKE DAVIES INEZ THEONE DAVIES OLIVER WILLIAM HARTLEY DAISY HARTLEY PETER NELSON HELEN NELSON JOHN FRANCIS PARKER DOROTHY JANE PARKER WILLIAM ROBERT ROY SMITH JUNE ILMA SIGLIN DAVID SIGLIN |
Catchwords: | Summary judgment Second defendant signed as guarantor not also as borrower |
Legislation: | Nil |
Case References: | Nil Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- LESLEY BARBARA CHOULES
ARTHUR THORNDYKE DAVIES
INEZ THEONE DAVIES
OLIVER WILLIAM HARTLEY
DAISY HARTLEY
PETER NELSON
HELEN NELSON
JOHN FRANCIS PARKER
DOROTHY JANE PARKER
WILLIAM ROBERT ROY SMITH
Plaintiffs
AND
JUNE ILMA SIGLIN
First Defendant
DAVID SIGLIN
Second Defendant
Catchwords:
Summary judgment - Second defendant signed as guarantor not also as borrower
(Page 2)
Legislation:
Nil
Result:
Application adjourned
Representation:
Counsel:
Plaintiffs : Mr J C Giles
First Defendant : No appearance
Second Defendant : In person
Solicitors:
Plaintiffs : Solomon Brothers
First Defendant : Michell Sillar McPhee
Second Defendant : In person
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
(Page 3)
1 MASTER BREDMEYER: This is an application by the plaintiffs for summary judgment against the second defendant only. It is a mortgage case. The plaintiffs are lenders who loaned money to the defendants through a finance broker.
2 The defendants are mother and son. The mother is legally represented. The son is not. She has filed an affidavit in opposition and in it she stresses her age, 78 years, and her lack of business acumen. She signed the mortgage in a solicitor's office witnessed by the solicitor, Mr Geoffrey Hayles. The actual money borrowed, which was $400,000 less expenses, and a sum for the payment out of the first mortgage, went to her son, David, for his computer business. She said the solicitor did not explain the terms of the mortgage to her. It is clear that Mrs Siglin is running an Amadio type defence and that will be determined at a special appointment.
3 Mr David Siglin, the second defendant, has filed a brief affidavit in opposition and has submitted some written submissions. He asks that the summary judgment application against him be adjourned until after a hearing of the plaintiffs' application against his mother - because if, as a result of that application, the mortgage is set aside, then his guarantee will fall away. He also says in par 5 of his affidavit that if he and his mother had been properly advised, then the mortgage document would not have been signed.
4 The property, the subject of the mortgage, is Unit 21, 23 Swan Street, South Perth, and is registered in his mother's name. The mortgage is signed by her and Mr David Siglin has signed as guarantor. The guarantee clause is at the end of the mortgage, immediately above Mr David Siglin's signature. In addition, pars 21 and 22 mention Mr David Siglin.
5 Subject to a consideration of pars 21 and 22 of the mortgage, which I do in a moment, Mr Siglin's submission is correct. If his mother gets the mortgage set aside, then his guarantee will fall with it. Phillips & O'Donovan, The Modern Contract of Guarantee (2nd ed) at 22.5 states, and I here paraphrase, that if the principal contract is voidable, for example, because of undue influence, creditors' misrepresentation or unconscionable conduct, and the court sets it aside, no liability attaches to the guarantor.
6 Clauses 21 and 22 of the mortgage provide:
(Page 4)
- "21. That in consideration of the principal sum agreed to be advanced under this security to the mrotgagor [sic] and to DAVID SIGLIN of Unit 21, 23 Swan Street, South Perth (The Borrower and Guarantor) by the Mortgagee the Mortgagor for the purpose of securing the payment of the principal sum and interest the Mortgagor mortgages to the Mortgagee the estate and interest specified in the said land and the Mortgagor and the Borrower hereby covenant with the Mortgagee as follows:
That the Mortgagor will on demand in any of the ways herein mentioned and so long as such payments have not been made by the Borrower pay to the Mortgagee the principal sum and any other moneys as shall remain unpaid but at the rate stated computed from the date mentioned in Clause 3 hereof PROVIDED FURTHER that if the Mortgagor shall observe and perform all the covenants contained or implied herein and shall pay to the Mortgagee such sums due and owing as shall not have been paid by the Borrower then the Mortgagee shall not demand nor seek to enforce payment of any of the moneys aforesaid and interest from the Mortgagor otherwise than by the said instalments.
22. That the said DAVID SIGLIN has agreed to the covenants herein and by his willingness to sign as borrower and guarantor at the foot of this mortgage is severally and jointly bound by the terms of this contract."
7 Clause 21 states that the moneys were advanced "to the mortgagor and to David Siglin". Clause 22 states that "the said David Siglin has agreed to the covenants herein and by his willingness to sign as borrower and guarantor at the foot of this mortgage is severally and jointly bound by the terms of this contract" (emphasis mine). However, Mr Siglin has not signed as borrower or mortgagor. He has only signed the document as guarantor after the guarantee clause. For him to be bound by cl 22, I consider he should have signed at the foot of the mortgage proper where his mother signed; that is, before the guarantee clause. There was room for him to sign there, but he did not do so.
8 There are two views held by the courts as to how to interpret a guarantee. This is discussed in Phillips & O'Donovan's text at 175. The first is that the document should be interpreted "strictissimo juris", ie, strictly in favour of the guarantor. Ambiguous terms should be
(Page 5)
- interpreted in favour of the guarantor. The other view is that a guarantee should be interpreted as any other commercial contract. I think whatever interpretation is taken for the purposes of this summary judgment application, it is arguable that, because Mr Siglin did not sign both as borrower and guarantor, but only as guarantor, then he is only liable as guarantor. Hence, I agree with his submission that his liability as guarantor should stand over until after his mother's special appointment. I will therefore adjourn this application to the same special appointment as the plaintiffs' application for summary judgment against the first defendant. That application will be considered first and then the application against Mr Siglin considered second. Costs will be reserved.
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