Reported Decision: (2006) Aust Contract Reports 90-243
Court of Appeal
CITATION: CIT CREDIT PTY LTD v Blayn Norman KEABLE [2006] NSWCA 130 HEARING DATE(S): 11 May 2006
JUDGMENT DATE:
25 May 2006JUDGMENT OF: Spigelman CJ at 1; Giles JA at 90; Gzell J at 91 DECISION: 1 Appeal allowed; 2 The Respondent’s cross claim of 31 May 2004 is dismissed; 3 Judgment for the Appellant in the sum of $424,498.41; 4 The Respondent to pay the Appellant’s costs of the trial and of the appeal; 5 The Respondent to have a certificate under the Suitors’ Fund Act if otherwise entitled. CATCHWORDS: TRADE PRACTICES – Unconscionable conduct – Whether Appellant “delegated” responsibility for execution of guarantee – Absence of disadvantage or special disability on the part of a prospective guarantor – Trade Practices Act 1975, s51AC. - CONTRACTS – Unjust contracts – Weight accorded to failure to implement scheme for certification that potential guarantors obtain legal advice – Relevant time for assessment of “unjustness” – Contracts Review Act 1980, s7. - CONTRACTS – Unjust contracts – Whether “unfair tactics” used – Where guarantor failed to read guarantee – Absence of disadvantage or disability on the part of a prospective guarantor – Contracts Review Act 1980, s9(2)(j). LEGISLATION CITED: Trade Practices Act 1974 (Cth): s51AC, s84(2), s87
Contracts Review Act 1980 (NSW): s7, s9(2)(j)CASES CITED: ACCC v 4WD Systems Pty Ltd (2003) 200 ALR 491
Baltic Shipping Co v Dillon (1991) 22 NSWLR 1
Barclay’s Bank v O’Brien [1994] 1 AC 180
Burt v Australian and New Zealand Banking Group Ltd (1994) ATPR (Digest) 46-123
Gregg v Tasmanian Trustees Ltd (1997) 73 FCR 91
HG & R Nominees Pty Ltd v Fava [1997] 2 VR 368
Lisciandro v Official Trustee in Bankruptcy [1995] ATPR 41-436
Lisciandro v Official Trustee in Bankruptcy (1996) 69 FCR 180
NMFM Property Pty Ltd v CitiBank Ltd (2000) 107 FCR 270
Perpetual Trustee Company Pty Ltd v Khoshaba [2006] NSWCA 41
Toll (FGCT) Pty Ltd v Alpha Pharm Pty Ltd (2004) 79 ALJR 129
Wilton v Farnworth (1948) 76 CLR 646PARTIES: CIT Credit Pty Ltd (Appellant)
Blayn Norman Keable (Respondent)
FILE NUMBER(S): CA 40992 of 2004 COUNSEL: P. Dowdy (Appellant)
R.A. Parsons (Respondent)SOLICITORS: John Bartrop – Abbott Tout Lawyers (Appellant)
James Antonenas (Respondent)
LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 270 of 2003 LOWER COURT JUDICIAL OFFICER: Murrell DCJ
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CA 40992/04
Thursday 25 May 2006SPIGELMAN CJ
GILES JA
GZELL J
CIT CREDIT PTY LTD v Blayn Norman KEABLE
The Respondent was an employee, and subsequently a director, of Parry’s Motorcycles Pty Ltd. Parry’s entered into a floor plan agreement with the Appellant, in the form of a Bailment Agreement, to finance its stock of Yamaha motorcycles. Under a related agreement of Guarantee and Indemnity, the Respondent guaranteed the obligations of Parry’s under the Bailment Agreement.
The Guarantee was delivered to Parry’s by the General Manager of YMAF (as the Appellant was originally known), but the Respondent…
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Details
- AGLC
- CIT Credit Pty Ltd v Keable [2006] NSWCA 130
- Case
- [2006] NSWCA 130
- Decision Date
CaseChat Overview and Summary
CIT Credit Pty Ltd (the appellant) appealed to the Supreme Court of New South Wales, Court of Appeal, against a decision of the primary judge who had dismissed the appellant's claim for $424,498.41 and upheld the respondent's cross-claim. The dispute concerned a guarantee executed by the respondent in favour of the appellant, which the respondent sought to have set aside on grounds of unconscionable conduct under the *Trade Practices Act 1975* (Cth) and unjustness under the *Contracts Review Act 1980* (NSW).
The Court of Appeal was required to determine whether the appellant engaged in unconscionable conduct in contravention of s 51AC of the *Trade Practices Act 1975* and whether the guarantee was unjust within the meaning of the *Contracts Review Act 1980*. Specifically, the court considered whether the appellant had delegated responsibility for the execution of the guarantee, whether the respondent suffered any disadvantage or special disability, and the weight to be accorded to the appellant's failure to implement a scheme for certification that potential guarantors obtain legal advice. The court also examined whether unfair tactics were used, particularly in light of the respondent's failure to read the guarantee.
The Court of Appeal found that the primary judge erred in dismissing the appellant's claim and upholding the respondent's cross-claim. The court reasoned that there was no evidence of unconscionable conduct or unjustness. It held that the respondent had not established any disadvantage or special disability that would attract the protections of either the *Trade Practices Act* or the *Contracts Review Act*. The failure to implement a scheme for legal advice certification was not determinative, nor was the respondent's failure to read the document, in the absence of any other vitiating factors.
Consequently, the appeal was allowed, the respondent's cross-claim was dismissed, and judgment was entered for the appellant in the sum of $424,498.41. The respondent was ordered to pay the appellant's costs of the trial and the appeal, with a certificate for the Suitors' Fund if otherwise entitled.
The Court of Appeal was required to determine whether the appellant engaged in unconscionable conduct in contravention of s 51AC of the *Trade Practices Act 1975* and whether the guarantee was unjust within the meaning of the *Contracts Review Act 1980*. Specifically, the court considered whether the appellant had delegated responsibility for the execution of the guarantee, whether the respondent suffered any disadvantage or special disability, and the weight to be accorded to the appellant's failure to implement a scheme for certification that potential guarantors obtain legal advice. The court also examined whether unfair tactics were used, particularly in light of the respondent's failure to read the guarantee.
The Court of Appeal found that the primary judge erred in dismissing the appellant's claim and upholding the respondent's cross-claim. The court reasoned that there was no evidence of unconscionable conduct or unjustness. It held that the respondent had not established any disadvantage or special disability that would attract the protections of either the *Trade Practices Act* or the *Contracts Review Act*. The failure to implement a scheme for legal advice certification was not determinative, nor was the respondent's failure to read the document, in the absence of any other vitiating factors.
Consequently, the appeal was allowed, the respondent's cross-claim was dismissed, and judgment was entered for the appellant in the sum of $424,498.41. The respondent was ordered to pay the appellant's costs of the trial and the appeal, with a certificate for the Suitors' Fund if otherwise entitled.
Orders
Orders of the court
1 Appeal allowed; 2 The Respondent’s cross claim of 31 May 2004 is dismissed; 3 Judgment for the Appellant in the sum of $424,498.41; 4 The Respondent to pay the Appellant’s costs of the trial and of the appeal; 5 The Respondent to have a certificate under the Suitors’ Fund Act if otherwise entitled.
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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