Padstow Corporation Pty Ltd v Fleming (No 2)

Padstow Corporation Pty Ltd sought to recover monies from Mr Fleming, a former director, who had provided a personal guarantee for debts of the company. The dispute included cross-claims by Mr Fleming for breaches of contract and misleading conduct by Padstow Corporation, as well as claims against the company’s solicitor. The case was heard in the Supreme Court of New South Wales. The legal issues addressed by the Court included whether Mr Fleming was bound by the personal guarantee he signed, whether the guarantee was unfair under the Contracts Review Act 1980, and whether there were breaches of contract or misleading conduct by Padstow Corporation. The Court found that Mr Fleming was bound by the personal guarantee he signed, as he did not evidence that he signed in a personal capacity rather than as a director. The Court also held that the guarantee was not unjust under the Contracts Review Act 1980, as it was a fair and reasonable term given the commercial realities of the agreement. Regarding the cross-claims, the Court dismissed Mr Fleming’s claims for breach of contract and misleading conduct, as well as the claim against the solicitor. The Court held that Padstow Corporation was not in breach of the share sale agreement, and there was no misleading conduct or negligence by the solicitor. The Court ordered Mr Fleming to pay the full amount owed under the guarantee, plus interest and costs.