Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Nashco Pty Ltd v Yang [2022] NSWCA 137 Hearing dates: 21 April 2022 Date of orders: 04 August 2022 Decision date: 04 August 2022 Before: Leeming JA at [1];
Brereton JA at [2];
Mitchelmore JA at [7]Decision: (1) Appeal allowed.
(2) Set aside Orders 2, 3, 5 and 6 made by the primary judge on 25 August 2021.
(3) In lieu thereof:
(a) Judgment on the cross-claim against the first, second, third, fourth and fifth cross-defendants for $979,716.47 (including interest of $36,022.22), to take effect from 25 August 2021;
(b) Order that the first, second, third, fourth and fifth cross-defendants pay the cross-claimant’s costs of the cross-claim on the ordinary basis up to and including 29 January 2020, and on an indemnity basis thereafter.
(4) The respondents pay the appellant’s costs of the appeal.
(5) Reserve liberty to apply within 14 days for different orders as to costs in relation to the proceedings below and the appeal.
Catchwords: GUARANTEE – contract of guarantee – construction – where respondents executed guarantee in favour of partnership “and its successors and assigns” – where partnership subsequently incorporated and assigned business to company – whether company could rely on guarantee to recover payments respondents owed for goods supplied after assignment
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57
Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549; [1987] HCA 15
Backhouse v Hall (1865) 6 B & S 507
Barclay v Lewis (1783) 3 Dougl 32
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44
Bradford Old Bank v Sutcliffe [1918] 2 KB 833
Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295
Coghlan v S H Lock (Aust) Ltd (1987) 8 NSWLR 88
CSR Limited v Adecco (Australia) Pty Ltd [2017] NSWCA 121
Dance v Girdler (1804) 1 Bos & P 34; (1804) 127 ER 370
Davis v Commissioner for Main Roads (1968) 117 CLR 529 at 534; [1968] HCA 10
Erect Safe Scaffolding (Australia) Pty Ltd v Sutton (2008) 72 NSWLR 1; [2008] NSWCA 114
First National Finance Corporation v Goodman [1983] BCLC 203
Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235
Halford v Price (1960) 105 CLR 23; [1960] HCA 38
Housing Guarantee Fund Ltd v Yusef [1991] 2 VR 17
Pacific Brands Sport & Leisure Pty Ltd v Underworks (2006) 149 FCR 395; [2006] FCAFC 40
Rava v Logan Wines Pty Ltd [2007] NSWCA 62
Texts Cited: W Courtney, J Phillips, and J O’Donovan, The Modern Contract of Guarantee: English Edition (4th ed, 2020, Sweet & Maxwell)
Category: Principal judgment Parties: Nashco Pty Ltd (Appellant)
Tun Yang (First Respondent)
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- AGLC
- Nashco Pty Ltd v Yang [2022] NSWCA 137
- Case
- [2022] NSWCA 137
- Decision Date
CaseChat Overview and Summary
The central legal issue before the Court of Appeal was the proper construction of the guarantee, specifically whether the benefit of the guarantee extended to the appellant company, which was the successor in title to the partnership's business and had taken an assignment of the partnership's rights. This required the court to determine if the phrase "successors and assigns" in the guarantee was sufficient to encompass a corporate successor that was not in existence at the time the guarantee was executed.
The Court of Appeal, in allowing the appeal, reasoned that the words "successors and assigns" in the guarantee were broad enough to include a corporate entity that succeeded the partnership and took an assignment of its business and contractual rights. The court applied principles of contractual construction, holding that the intention of the parties, as evidenced by the wording of the guarantee, was to provide security for the partnership's business irrespective of its legal form or ownership structure. The court found that the subsequent incorporation of the partnership and assignment of its business to the appellant fell within the scope of the guarantee. Consequently, the Court of Appeal set aside the primary judge's orders and entered judgment on the cross-claim in favour of Nashco Pty Ltd, with specific orders regarding costs.
Orders
Orders of the court
(1) Appeal allowed.
(2) Set aside Orders 2, 3, 5 and 6 made by the primary judge on 25 August 2021.
(3) In lieu thereof:
(a) Judgment on the cross-claim against the first, second, third, fourth and fifth cross-defendants for $979,716.47 (including interest of $36,022.22), to take effect from 25 August 2021;
(b) Order that the first, second, third, fourth and fifth cross-defendants pay the cross-claimant’s costs of the cross-claim on the ordinary basis up to and including 29 January 2020, and on an indemnity basis thereafter.
(4) The respondents pay the appellant’s costs of the appeal.
(5) Reserve liberty to apply within 14 days for different orders as to costs in relation to the proceedings below and the appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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