Metro Finance Pty Ltd v Awad

Metro Finance Pty Ltd (Metro Finance) sought to recover a debt from Mr Awad. The dispute concerned whether Mr Awad was personally liable for the debt owed by a company, Awad Holdings Pty Ltd, to Metro Finance. The matter came before Registrar Chuan Ng in the Magistrates Court of Victoria.

The primary legal issue before the Court was whether Mr Awad had provided a personal guarantee for the debt owed by Awad Holdings Pty Ltd to Metro Finance. Metro Finance contended that Mr Awad had signed a loan agreement in his personal capacity, thereby making him personally liable for the company's debt. Mr Awad denied having signed the agreement in his personal capacity, asserting that he had signed only as a director of Awad Holdings Pty Ltd.

Registrar Ng considered the evidence presented, including the loan agreement itself and the circumstances surrounding its execution. The Registrar noted that the signature block on the loan agreement clearly indicated that Mr Awad was signing in his capacity as a director of Awad Holdings Pty Ltd, and there was no separate signature line for him to sign in a personal capacity. The Registrar applied the principle that a person is generally only bound by a contract if they have clearly indicated their intention to be personally liable. In the absence of such clear indication, and with the document specifying a signature as a director, the Registrar found that Mr Awad had not provided a personal guarantee.

Consequently, the Court ordered that Metro Finance's claim against Mr Awad personally be dismissed.