Re Farm Pride Foods Ltd

The Supreme Court of Queensland considered an application by Christos and Magdalene Dimitrakipolous, directors of GCS Seafoods Pty Ltd, to have caveats removed and to declare that a guarantee provided to Farm Pride Foods Ltd was void and unenforceable. The respondents had lodged caveats against the applicants' properties after the applicants failed to settle a debt owed by their company. The applicants argued that the guarantee was ineffective because it was unsupported by consideration, and that the guarantee should not bind Christos as his wife had not also signed it.

The court found that the guarantee was supported by consideration, as there was a written agreement between the parties that provided for payment of the debt by instalments. The court also held that Christos was not bound by the guarantee as his wife had not signed it, and it was intended that both applicants would become guarantors. The court found that the intention that both applicants were required to be guarantors was evident from the agreement recorded in the respondent's letter, which was referenced in the guarantee. The court rejected the argument that the guarantee was uncertain because only one applicant had signed it, as the agreement identified the intended sureties.

The court granted the applicants' relief and ordered that the caveats be removed and that the guarantee be declared unenforceable. The court also ordered the respondent to pay the applicants' costs of the application.