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Permanent Custodians Ltd v AGB Developments Pty Ltd

Permanent Custodians Ltd v AGB Developments Pty Ltd

Case [2010] NSWSC 540 1 June 2010

Breach of Contract

Unconscionable Conduct

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CITATION: Permanent Custodians Ltd v AGB Developments Pty Ltd [2010] NSWSC 540

HEARING DATE(S): 10/5/2010 & 20/5/2010

JUDGMENT DATE :
1 June 2010

JURISDICTION: POSSESSION LIST

JUDGMENT OF: Davies J

DECISION: (1) Judgment for the Plaintiff against the Second Defendant in the amount of $705,093.97 (2) The Second Defendant is to pay the Plaintiff’s costs of this application and the costs associated with the obtaining of judgment.

CATCHWORDS: GUARANTEE AND INDEMNITY - rights of surety - against creditor - creditor claims against guarantors for shortfall after sale of debtor's property - agreement between creditor and surety to enter consent judgment if shortfall - alleged implied terms in agreement to obtain the best price - application by guarantors to file cross-claim to prevent entry of consent judgment - whether terms implied - whether provisions of guarantee require payment by guarantors before claim can be made against creditor - duty under s 420A Corporations Act 2001 - whether provides a remedy. MORTGAGES - remedies of the mortgagee - exercise of power of sale - nature of duty owed to surety.

LEGISLATION CITED: Bankruptcy Act 1966 (Cth)
Company Law Act 1975 (Qld)
Corporations Act 2001 (Cth)
Evidence Act 1995
Uniform Civil Procedure Rules

CATEGORY: Principal judgment

CASES CITED: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Butt v M’Donald (1896) 7 QLJ 68
Cuckmere Brick Co Ltd v Neutral Finance Ltd [1971] Ch 949
Deputy Commissioner of Taxation v Ahern (No. 2) [1998] 2 QdR 158
Gertig v Davies [2003] SASC 86, (2003) 85 SASR 226
Expo International Pty Ltd v Chant [1979] 2 NSWLR 820
Florgale Uniforms Pty Ltd v Orders [2004] VSC 65
GE Capital Australia v Davis [2002] NSWSC 1146
(2002) 11 BPR 20
529
Graeme Webb Investments Pty Ltd v St George Partnership Banking Ltd [2001] NSWCA 93
Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222
Porter v Associated Securities Ltd (1976)1BPR 9279
Proctor & Gamble v Medical Research [2001] NSWSC 183
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Ultimate Property Group Pty Ltd v Lord [2004] NSWSC 114 (2004) 60 NSWLR 646

PARTIES: Permanent Custodians Ltd (Plaintiff)
AGB Developments Pty Ltd (First Defendant)
Craig Kirrin Gore (Second Defendant)
John Edward Atkinson (Third Defendant)

FILE NUMBER(S): SC 2009/294041

COUNSEL: N Bearup (Plaintiff)
M Gunning (Second & Third Defendants)

SOLICITORS: Gadens Lawyers (Plaintiff)
WPS Law (Second & Third Defendants)

- 22 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
POSSESSION LIST

DAVIES J

1 JUNE 2010

2009/0294041 PERMANENT CUSTODIANS LTD V AGB DEVELOPMENTS PTY LTD

JUDGMENT

1 On about 1 March 2004 the Plaintiff and AGB Developments Pty Ltd entered into a loan agreement whereby the Plaintiff lent to AGB the sum of $674,475. On the same day a guarantee was executed by Craig Kirrin Gore (the Second Defendant) and John Edward Atkinson (the Third Defendant) guaranteeing the loan.

2 In addition, on 6 March 2004 AGB mortgaged…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Permanent Custodians Ltd v AGB Developments Pty Ltd

Details

AGLC: Permanent Custodians Ltd v AGB Developments Pty Ltd [2010] NSWSC 540
Case: [2010] NSWSC 540
Decision Date: 1 June 2010

CaseChat Overview and Summary

The case of Permanent Custodians Ltd v AGB Developments Pty Ltd involved a dispute between a creditor and guarantors regarding the terms of a guarantee and indemnity. The creditor, Permanent Custodians Ltd, had entered into a guarantee and indemnity agreement with AGB Developments Pty Ltd. The guarantors sought to prevent the creditor from entering a consent judgment for a shortfall after the sale of the debtor's property, alleging that there were implied terms in the agreement to obtain the best price possible. The court was required to determine the legal issues surrounding the implied terms, the obligations of the guarantors under the guarantee and indemnity, and whether the provisions of the guarantee required payment by the guarantors before a claim could be made against the creditor.

The court examined the terms of the guarantee and indemnity agreement to determine if there were any implied terms regarding the sale of the debtor's property. The court held that there were no implied terms in the agreement to obtain the best price. The court further examined the provisions of the guarantee and indemnity agreement to determine whether the guarantors were required to pay the shortfall before a claim could be made against the creditor. The court held that the provisions of the guarantee and indemnity agreement did not require the guarantors to pay the shortfall before a claim could be made against the creditor. The court also considered whether the duty under s 420A Corporations Act 2001 provided a remedy for the guarantors. The court held that the duty under s 420A did not provide a remedy for the guarantors.

The court ultimately dismissed the guarantors' application to file a cross-claim to prevent the entry of the consent judgment. The court held that the guarantors were not entitled to prevent the creditor from entering a consent judgment for the shortfall after the sale of the debtor's property. The court further held that the guarantors were required to pay the shortfall to the creditor before a claim could be made against the creditor. The court did not find any breach of duty under s 420A Corporations Act 2001 by the creditor. The court ordered that the guarantors pay the shortfall to the creditor before a claim could be made against the creditor.

Orders