Olde v Primary Compass Limited ACN 129 159 812

In Olde v Primary Compass Limited, the applicant sought an injunction to restrain the respondent from calling on a bank guarantee. The applicant, Olde, argued that there was an implied term in the guarantee that it would only be used to meet certain liabilities. The Federal Court was required to determine whether there was a serious question to be tried in relation to the existence of this alleged term, and whether the balance of convenience favoured granting the injunction.

The court examined the nature of implied terms in the context of bank guarantees and the circumstances in which such terms might be inferred. It considered whether there was any evidence to support the existence of an implied term that would restrict the respondent's right to call on the guarantee. The court also assessed whether there was a serious question to be tried regarding the implied term, and whether the balance of convenience favoured granting the injunction. In doing so, the court had to consider the interrelationship between the "serious question to be tried" and "balance of convenience" requirements.

The court found that there was no serious question to be tried regarding the existence of an implied term in the guarantee that would restrict the respondent's right to call on it. The court noted that the burden of proof lay with the applicant to establish the existence of such a term, and that the applicant had not provided sufficient evidence to support the existence of the term. The court also found that the balance of convenience did not favour granting the injunction, as the respondent had a legitimate interest in calling on the guarantee to protect its financial interests. Consequently, the court refused to grant the injunction.

The final order of the court was that the application for an injunction was dismissed. The court found that there was no serious question to be tried regarding the existence of an implied term in the guarantee, and that the balance of convenience did not favour granting the injunction. The respondent was therefore not restrained from calling on the bank guarantee.