Prosilis v Double Bay Newspapers Pty Ltd

CITATION:	PROSILIS v DOUBLE BAY NEWSPAPERS PTY LTD [2000] NSWCA 30
FILE NUMBER(S):	CA 40407/98
HEARING DATE(S):	3 December 1999
JUDGMENT DATE:	9 March 2000
PARTIES :	OVID PROSILIS v DOUBLE BAY NEWSPAPERS PTY LTD & 3 ORS
JUDGMENT OF:	Mason P at 1; Priestley JA at 50; Beazley JA at 51

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 5780/95
LOWER COURT JUDICIAL OFFICER :	Herron DCJ

COUNSEL:	Appellant: S Habib Respondent: M J Neil QC/R Bell
SOLICITORS:	Appellant: Photios Vouroudis & Co Respondent: David R Purvis & Co
CATCHWORDS:	Contract - loan agreement - guarantee - provision for two guarantees - express or implied conditions - objective intention - D
DECISION:	Appeal dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40407/98
DC 5780/95


MASON P
PRIESTLEY JA
BEAZLEY JA

Thursday 9 March 2000

OVID PROSILIS
v DOUBLE BAY NEWSPAPERS PTY LTD & ORS

The respondents sued upon a written loan agreement (“the Agreement”) whereby the appellant personally guaranteed the due payment of any amount owing by the principal debtor (the appellant’s company) to the respondents. In a section of the Agreement marked “Application for Credit Account”, the personal guarantee of each director was required in the case of a registered company. The appellant and his wife were both directors but only one of the guarantees was completed. The guarantee named the appellant and was executed by him with his signature being witnessed by his wife before they faxed it back to the respondents. The principal debtor went into liquidation.

The Trial Judge found that the appellant knew he was signing a guarantee. He also found that the appellant’s cross-claim under the Contracts Review Act 1980 had no application in that there was nothing unjust in the circumstances giving rise to the contract. The Trial Judge held that it was not an express or implied condition precedent of any liability that each director of the appellant’s company execute a guarantee. He distinguished Bleyer v Neville Jeffress Advertising Pty Ltd unreported, Court of Appeal, 15 December 1987 on the basis that the appellant’s subjective intention was to give a guarantee in the way he indicated and he did not intend that his fellow director should sign a guarantee.

HELD (by Mason P, Priestley JA and Beazley JA), dismissing the appeal with costs:

The Trial Judge was entitled to find that the appellant as an experienced man of business understood he was signing a guarantee. While his Honour erred in finding that the Contracts Review Act 1980 should have no application as regards the appellant, no error affected the finding that there was nothing unjust in the circumstances giving rise to the contract. It was sufficient to justify the dismissal of the cross-claim.

Ring Tread Systems (Australia) Pty Ltd (Receiver and Manager Appointed) v Tubb, unreported, Court of Appeal, 30 October 1998 (referred)

The appellant’s intention (objectively determined) was to give a single guarantee in the way he indicated. The…