Practice and procedure - Lack of proof of service of writ - Stale writ is irregular but not a nullity - Unconditional appearance and filing a defence amounts to a submission to jurisdiction and waiver of irregularity
Practice and procedure - Abuse of process - Delay in bringing action to trial - Three year delay in seeking entry of judgment against the appellants - Plaintiff's purpose in not proceeding immediately to enter judgment following delivery of reasons in the primary proceedings was not vexatious or oppressive in the circumstances that plaintiff was pursing an appeal against other defendants and quantum of monetary orders sought was uncertain until that process was complete - Purpose of adjournments not foreign to the nature of the process
Guarantee and surety - Principal debtor a party to a margin lending loan with the creditor - Payment of debt by a guarantor - Guarantor's contractual right to an indemnity against a debtor and an equitable right of subrogation to stand in the shoes of the creditor - Principles for recovery against the debtor considered - No valid request by the principal debtor to give a guarantee - Principal debtor not party to the contract of guarantee - Agent's power of attorney not sufficient to find a valid request to give a guarantee - No contractual right to an indemnity - Claim in restitution for money paid to satisfy the debt owing under the margin loan - Preconditions for the grant of right of indemnity in equity could not have been found to be satisfied - Turns on own facts as found by the primary judge
Legislation:
Nil
Result:
CACV 123 of 2021 Appeal allowed in part The orders made by the primary judge on 3 December 2021 set aside, and an order is made that the plaintiff's claim against the fifth defendant be dismissed
CACV 124 of 2021 Appeal dismissed
Category: B
Representation:
CACV 123 of 2021
Counsel:
Appellant
:
In person
First Respondent
:
No appearance
Second Respondent
:
No appearance
Third Respondent
:
No appearance
Fourth Respondent
:
No appearance
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
AGLC
King v Smith [2025] WASCA 6
Case
[2025] WASCA 6
Decision Date
CaseChat Overview and Summary
In the case of King v Smith, the plaintiff, King, sought to recover monies paid by the defendant, Smith, who had acted as a guarantor for a margin lending loan taken out by a third party. The dispute involved the validity of the guarantee, the right to indemnity, and the delay in bringing the action to trial. The case was heard in the Supreme Court of New South Wales.
The legal issues the court needed to decide included whether the writ was properly served and if the delay in bringing the action to trial constituted an abuse of process. Additionally, the court had to determine whether Smith, as a guarantor, had a contractual right to an indemnity against the principal debtor and an equitable right of subrogation to stand in the shoes of the creditor.
The court found that although the writ was irregular due to a lack of proof of service, Smith's unconditional appearance and filing of a defence amounted to a submission to jurisdiction and a waiver of the irregularity. The court further held that the three-year delay in seeking entry of judgment against the appellants was not an abuse of process as the plaintiff was pursuing an appeal against other defendants and the quantum of monetary orders sought was uncertain until that process was complete. Regarding the guarantee, the court found that there was no valid request by the principal debtor to give a guarantee, and therefore, no contractual right to an indemnity. The court also found that the preconditions for the grant of the right of indemnity in equity could not have been satisfied.
As a result, the court dismissed the plaintiff's claim for recovery of monies paid by the defendant as a guarantor for the margin lending loan. The court held that the plaintiff was not entitled to an indemnity or subrogation against the principal debtor. No further orders were made by the court.