Hardy v Coates Hire Operations Pty Ltd

In *Hardy v Coates Hire Operations Pty Ltd*, the New South Wales Court of Appeal considered an appeal concerning the enforceability of a director's guarantee for a company's obligations under a credit agreement. The appellant, Mr. Hardy, sought to avoid liability under the guarantee, arguing it was unjust.

The primary legal issues before the Court of Appeal were whether the guarantee was unjust within the meaning of the *Contracts Review Act 1980* (NSW), and if so, what relief should be granted. This involved assessing the circumstances surrounding the formation of the contract, including the commercial experience of Mr. Hardy, the terms of the guarantee, and the availability of legal advice. The Court also had to consider the impact of Mr. Hardy's diagnosis of Lewy body dementia on his capacity and understanding at the time the guarantee was executed, and whether the condition was apparent or significantly impacted his decision-making.

The Court of Appeal affirmed the District Court's finding that the guarantee was not unjust. Their Honours noted Mr. Hardy's extensive experience as a director of a substantial construction business, which indicated a significant level of commercial acumen. The fact that the guarantee was provided in both hardcopy and electronic formats, and that Mr. Hardy had the opportunity to seek legal advice, weighed against a finding of injustice. While acknowledging Mr. Hardy's diagnosis of Lewy body dementia, the Court found the medical evidence did not establish that his condition was sufficiently advanced or apparent at the time of signing to render the contract unjust, particularly given his continued business activity thereafter.

Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondent's costs in the Court of Appeal.