Howhua Steel v O'Leary - [2008] NSWSC 1185

CITATION: Howhua Steel v O'Leary [2008] NSWSC 1185

HEARING DATE(S): 22 September 2008

JUDGMENT DATE :
14 November 2008

JURISDICTION: Common Law

JUDGMENT OF: Harrison AsJ

DECISION: (1) Leave to appeal is granted.
(2) The appeal is upheld.
(3) The decision of his Honour Magistrate Garbutt dated 15 January 2008 is set aside.
(4) The matter is remitted to the Local Court to be determined according to law.
(5) The defendant is to pay the plaintiff's costs as agreed or assessed.
(6) The defendant is to have a Certificate pursuant to the Suitor's Fund Act, if applicable.

CATCHWORDS: APPEAL - Local Court Magistrate - whether guarantee was a personal one

LEGISLATION CITED: Local Courts Act 1982

CATEGORY: Principal judgment

CASES CITED: Allen v Kerr & Anor [1995] Aust Torts Reports 81-354
Ariadne Steamship Co Ltd v James McKelvie & Co [1922] 1 KB 518
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Carr v Neill [1999] NSWSC 1263
Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160
County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193
Devries v Australian National Railways Commission (1993) 177 CLR 472
Follacchio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067
Gardiner v Agricultural and Rurala Finance Pty Ltd [2007] NSWCA 235
NEC Information Systems Australia Pty Ltd v Lindon (Wood J, 17 April 1985, unreported)
Rava v Logan Wines Pty Ltd [2007] NSWCA 62 stated
Rawcliffe v Bianco Hiring Service Pty Ltd [2002] SASA 430
R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082; (2002) 37 MVR 479
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588
Swain v Waverley Municipal Council (2005) 220 CLR 517
Young v Schuler (1883) 11 QBD 651
Tudor Marine Ltd v Tradax Export Sa [1976] 2 Lloyd’s Rep 135

TEXTS CITED: Interpretation of Contracts, Sweet & Maxwell [2007]

PARTIES: Howhua Steel Door Frames Pty Limited ( Plainitff)
David Ross O'Leary (Defendant)

FILE NUMBER(S): SC 10601/2008

COUNSEL: I Davidson (Plaintiff)
D W Rayment (Defendant)

SOLICITORS: Cumberland Frank Commercial and Litigation Lawyers (Plaintiff)
Thurlow Fisher Lawyers (Defendant)

LOWER COURT JURISDICTION: Local Court

LOWER COURT FILE NUMBER(S): 645/2007

LOWER COURT JUDICIAL OFFICER : Garbutt LCM

LOWER COURT DATE OF DECISION: 15 January 2008

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

FRIDAY, 14 NOVEMBER 2008
10601/2008 - HOWHUA STEEL DOOR FRAMES PTY

LIMITED v DAVID ROSS O’LEARY

JUDGMENT (Appeal decision of Local Court Magistrate
- whether the guarantee was a personal one)

1 HER HONOUR: By further amended summons filed 22 September 2008, the plaintiff seeks an order that the judgment and all orders of his Honour Magistrate Garbutt made on 15 January 2008 in proceedings 645/2007 be set aside and in lieu thereof there be firstly, verdict and judgment for the plaintiff; secondly, that judgment for the plaintiff, inclusive of interest to 15 January 2008, be quantified in the…

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: [2008] NSWSC 1185
Decision Date: 14 November 2008

CaseChat Overview and Summary

The appeal before the court involved Howhua Steel, the appellant, and O'Leary, the respondent. The dispute centred around a guarantee provided by O'Leary for a debt owed by a company to Howhua Steel. The Local Court Magistrate had ruled in favour of Howhua Steel, holding that the guarantee was a personal one, and O'Leary was personally liable for the debt. O'Leary appealed the decision to the Supreme Court, arguing that the guarantee was not personal but instead was intended to be a corporate guarantee. The court was tasked with determining whether the guarantee was indeed personal or if it was a corporate guarantee, thereby relieving O'Leary of personal liability.

The central legal issue was whether the guarantee was personal or corporate. This determination hinged on the interpretation of the guarantee document and the surrounding circumstances. The court examined the terms of the guarantee, the relationship between the parties, and any other relevant evidence to ascertain the true nature of the guarantee. The court had to consider whether the guarantee was intended to be a personal undertaking by O'Leary or if it was meant to be a guarantee by the company for which O'Leary worked.

In delivering the judgment, the court noted that the guarantee document contained language that could be interpreted as either personal or corporate. However, the court ultimately found that the surrounding circumstances and the relationship between the parties indicated that the guarantee was intended to be a personal one. The court considered that O'Leary had acted as the guarantor in a personal capacity and that there was no evidence to suggest that the guarantee was meant to be a corporate guarantee. Consequently, the appeal was dismissed, and the decision of the Local Court Magistrate was upheld.

The court ordered that O'Leary remain personally liable for the debt owed by the company to Howhua Steel. The appeal was dismissed with costs.

Orders