Paul George Pty Ltd v George as Executor of the Estate of the Late George

Paul George Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on the late George to ensure that his company, Paul George Pty Ltd, paid a sum of money to the respondent, George as Executor of the Estate of the Late George. The appellant argued that the clause did not create a personal guarantee.

The primary legal issue before the Court of Appeal was whether the wording of the deed of settlement created a personal undertaking by the late George to guarantee the payment of the debt by his company, or if it merely reflected an expectation or intention that the company would make the payment. The court had to determine the true construction of the relevant clause in light of the surrounding circumstances and the principles of contractual interpretation.

The Court of Appeal, in its reasoning, focused on the precise language used in the deed. It held that the clause did not contain the clear and unequivocal words necessary to establish a personal guarantee. The court applied the principle that a party will not be held personally liable for the debts of a company unless there is a clear and express intention to that effect, typically evidenced by specific wording such as "personally guarantee" or similar unambiguous language. The wording in the deed was found to be insufficient to impose such a personal obligation, instead reflecting an agreement that the company would discharge its obligation. The appeal was allowed.