Guthridge v Coco - [2002] QSC 392

SUPREME COURT OF QUEENSLAND

CITATION:

Guthridge v Coco [2002] QSC 392

PARTIES:

WILLIAM JOHN GUTHRIDGE
(plaintiff)
v
SANTO ANTONIO COCO
(defendant)

FILE NO/S:

6599/02

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

28 November 2002

DELIVERED AT:

Brisbane

HEARING DATE:

25 and 26 November 2002

JUDGE:

Muir J

ORDER:

Judgment for the plaintiff in the sum of $473,592.92 together with costs on an indemnity basis.

CATCHWORDS:

CONTRACT – BREACH OF CONTRACT – DAMAGES – allegation of loan by plaintiff – guaranteed by defendant –allegation by defendant that sums paid by plaintiff were for the acquisition of share capital – extrinsic evidence admitted to establish consideration for guarantee – whether consideration past consideration

COSTS – INDEMNITY COSTS – where objective evidence in favour of the plaintiff

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 561.
Bank of Credit and Commerce International SA v Ali [2001] 2 WLR 735 at 739.
Breusch v Watts Development Division Pty Ltd (1987) 10 NSWLR 311.
Coghlan v S H Lock (Australia) Ltd (1987) 8 NSWLR 88.
Di Carlo v Dubois [2002] QCA 225.
French v French (1841) 2 M & G 644; 133 ER 903.
Investor’s Compensation Scheme Ltd v West Bromwich Building Society [1988] 1 WLR 896 at 912.
Lilley v Midland Brick CoPty Ltd (1993) 9 WAR 339.
Pao On vLau Yin Long [1980] AC 614 at 631.

COUNSEL:

D R Cooper SC with M K Stunden for the plaintiff
P E Hack SC for the defendant

SOLICITORS:

PMM Lawyers for the plaintiff
Gilshenan & Luton for the defendant

Introduction.

The plaintiff claims against the defendant $473,592.92 pursuant to a guarantee evidenced by a letter dated 15 April. The document in question, addressed to the plaintiff and signed by the defendant is on the letterhead of Cosco Holdings. It provides –

“Loan Agreement
Dear William,
I acknowledge the receipt of loan funds made available to Cosco Holdings P/L in the amount of $400,000.00. Details of loan schedule are as follows:
1. Total Amount of loan $400,000.00
2. Repayment Schedule Full amount plus interest to be repaid on 15 June 2001
3. InterestInterest at a rate of 20% (simple) over the term 2. above
4. SecurityThe loan is fully covered by my personal guarantee

A cheque for $480,000.00 will be paid to you on the 15^th day of June 2001.”

The defendant’s signature appears over the typewritten name and words –

“Santo A Coco
Managing Director”

Cosco Holdings Pty Ltd, at relevant times, manufactured and sold paper products. Its financial statements for the year ended 30 June 2000 show that its net profit for that year after tax and bringing into account abnormal items of $7,054,974 was $4,331,344. The balance sheet revealed net assets of $25,815,481. Cosco, however, was experiencing liquidity difficulties. Under the heading “Inherent Uncertainty Regarding Continuation as a Going Concern” Cosco’s auditors made the following comments –

“Note 17 to the financial statements…

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.

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Details

Case: [2002] QSC 392
Decision Date: 28 November 2002

CaseChat Overview and Summary

The plaintiff, Guthridge, brought an action against the defendant, Coco, seeking damages for breach of contract. The dispute centred on a loan that the plaintiff alleged was guaranteed by the defendant. The defendant argued that the sums paid by the plaintiff were for the acquisition of share capital. The case was heard in the Supreme Court of Queensland. The primary legal issue was whether the guarantee provided by the defendant was supported by consideration. Specifically, the court had to determine if the past consideration provided by the plaintiff in making the loan to the company constituted valid consideration for the guarantee. Additionally, the court needed to assess whether extrinsic evidence could be admitted to establish the consideration for the guarantee.

The court examined the nature of the consideration required for the guarantee. It was established that the guarantee was executed after the plaintiff had made the loan to the company. The court allowed the admission of extrinsic evidence to demonstrate that the loan was made as consideration for the guarantee. The court ruled that the past consideration provided by the plaintiff in making the loan to the company was sufficient to support the guarantee. The court also found that the evidence presented by the plaintiff was objective and favoured their case, leading to an order for indemnity costs.

Following the court's determination, judgment was entered in favour of the plaintiff. The court awarded Guthridge damages in the amount of $473,592.92, along with costs on an indemnity basis. The defendant was held liable for the breach of contract, and the court's decision provided a clear resolution to the dispute over the guarantee and the related consideration.

Orders

Orders of the court

Judgment for the plaintiff in the sum of $473,592.92 together with costs on an indemnity basis.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Guthridge v Coco [2002] QSC 392
PARTIES:	WILLIAM JOHN GUTHRIDGE (plaintiff) v SANTO ANTONIO COCO (defendant)
FILE NO/S:	6599/02
DIVISION:	Trial Division
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court
DELIVERED ON:	28 November 2002
DELIVERED AT:	Brisbane
HEARING DATE:	25 and 26 November 2002
JUDGE:	Muir J
ORDER:	Judgment for the plaintiff in the sum of $473,592.92 together with costs on an indemnity basis.
CATCHWORDS:	CONTRACT – BREACH OF CONTRACT – DAMAGES – allegation of loan by plaintiff – guaranteed by defendant –allegation by defendant that sums paid by plaintiff were for the acquisition of share capital – extrinsic evidence admitted to establish consideration for guarantee – whether consideration past consideration COSTS – INDEMNITY COSTS – where objective evidence in favour of the plaintiff Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 561. Bank of Credit and Commerce International SA v Ali [2001] 2 WLR 735 at 739. Breusch v Watts Development Division Pty Ltd (1987) 10 NSWLR 311. Coghlan v S H Lock (Australia) Ltd (1987) 8 NSWLR 88. Di Carlo v Dubois [2002] QCA 225. French v French (1841) 2 M & G 644; 133 ER 903. Investor’s Compensation Scheme Ltd v West Bromwich Building Society [1988] 1 WLR 896 at 912. Lilley v Midland Brick CoPty Ltd (1993) 9 WAR 339. Pao On vLau Yin Long [1980] AC 614 at 631.
COUNSEL:	D R Cooper SC with M K Stunden for the plaintiff P E Hack SC for the defendant
SOLICITORS:	PMM Lawyers for the plaintiff Gilshenan & Luton for the defendant