Re BPTC Ltd (in Liquidation)

The New South Wales Court of Appeal considered a dispute concerning the proper interpretation of a deed of indemnity and the extent of a guarantor's liability. The liquidator of BPTC Ltd sought to recover moneys under the deed from the respondent, who had provided a guarantee in favour of BPTC Ltd. The core of the dispute revolved around whether the guarantor's liability was limited to a specific amount or if it extended to the full extent of BPTC Ltd's indebtedness.

The primary legal issue before the Court of Appeal was whether the deed of indemnity, when read in conjunction with other relevant documents, imposed a continuing liability on the guarantor for all moneys advanced by BPTC Ltd, or whether the liability was capped at a particular sum as suggested by the guarantor. This required the Court to construe the language of the deed and determine the parties' intentions regarding the scope of the guarantee.

The Court of Appeal analysed the wording of the deed of indemnity and found that it clearly established a continuing guarantee for all moneys advanced by BPTC Ltd. The Court applied established principles of contractual interpretation, emphasizing that the plain meaning of the words used in the deed, read as a whole, was paramount. It rejected the guarantor's submission that the liability was limited, finding that the language used did not support such a restrictive interpretation. The Court concluded that the guarantor was liable for the full amount of BPTC Ltd's indebtedness under the deed.