Reozone Pty Ltd v Rene Santoro - [2016] NSWSC 1383

Supreme Court

New South Wales

Medium Neutral Citation: Reozone Pty Ltd v Rene Santoro [2016] NSWSC 1383
Hearing dates: 1 September 2016
Decision date: 30 September 2016
Jurisdiction: Equity
Before: White J
Decision:
Order that the 8th and 9th defendants’ notices of motion filed on 31 August 2016 be dismissed with no order as to costs.

Catchwords: CONTRACT — Guarantee — Principles of construction — Contract signed by first defendant as company director — Contract included a term providing that the first defendant gave a personal guarantee by way of a charge — Whether by signing the agreement the first defendant indicated to a reasonable person that she personally granted a charge to secure payment of moneys owed by the company — Signature expressly stated to be given as an acceptance for and on behalf of the company — First defendant did not sign in her personal capacity — First defendant did not separately sign the guarantee clause — First defendant did not grant a charge to secure payment of moneys owed
Cases Cited: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
National Australia Bank Ltd v Dionys [2016] NSWCA 242
Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160
Ariadne Steamship Company Ltd v James McKelvie & Co [1922] 1 KB 518
Universal Steam Navigation Co Ltd v James McKelvie & Co [1923] AC 492
Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909
Follaccio v Harvard Securities (Aust) Pty Ltd [2002] FCA 1067
Burrell & Family Pty Ltd v Harris [2010] SASC 184
James Thane Pty Ltd v Conrad International Hotels Corp [1999] QCA 516
Jones v Dunkel (1959) 101 CLR 298
Category: Procedural and other rulings
Parties: Rene Santoro (1st Defendant)
Elite Civil Group Pty Ltd (In Liquidation) (2nd Defendant)
Sydney Trucks and Machinery Centre Pty Ltd (8th Defendant)
TCT Management Services Pty Ltd (9th Defendant)
Representation:
Counsel:
No appearance (1st Defendant)
P M Barham (8th and 9th Defendants)
Solicitors:
N/A (1st Defendant)
VL Macri Lawyers (8th and 9th Defendants)

File Number(s): 2014/281917

Judgment

HIS HONOUR: On 23 June 2015, on the application of the plaintiff, Rein J appointed trustees for sale of two properties owned by the first defendant, Mrs Santoro. His Honour declared that Mrs Santoro had charged the properties in favour of the plaintiff to secure certain obligations owed by her to it. The plaintiff had joined nine defendants. The third defendant, the National Australia Bank, had a registered mortgage over the properties. It was paid out from the proceeds of sale. The fourth, fifth, sixth, seventh, eighth and ninth defendants had lodged caveats in respect of Mrs Santoro’s properties. The fifth defendant and the seventh defendant did not make any application for payment out of the moneys paid into court. The fourth defendant did not press its claim. I have made orders for moneys to be paid out of the funds paid into court to the…

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.

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Details

Case: [2016] NSWSC 1383
Decision Date: 30 September 2016

CaseChat Overview and Summary

The dispute between Reozone Pty Ltd and Rene Santoro arose from a contract signed by Santoro, who was a director of the company, which included a term that she gave a personal guarantee by way of a charge. The court was required to decide whether Santoro, by signing the agreement, indicated to a reasonable person that she personally granted a charge to secure payment of moneys owed by the company. The agreement explicitly stated that Santoro signed as an acceptance for and on behalf of the company. However, Santoro did not sign in her personal capacity, did not separately sign the guarantee clause, and did not grant a charge to secure payment of moneys owed.

The court examined the principles of contract construction to determine the intentions of the parties. It considered the terms of the contract, the context in which it was signed, and whether Santoro's signature could be interpreted as an acceptance of personal liability. The court held that Santoro's signature did not indicate that she personally guaranteed the company's debt. Since Santoro did not sign in her personal capacity, did not separately sign the guarantee clause, and the signature was expressly stated to be given on behalf of the company, the court concluded that Santoro did not grant a personal charge.

Consequently, the court found in favour of Santoro. The court determined that Santoro did not personally guarantee the company's debt by signing the contract. The court's decision was based on the clear terms of the contract and the absence of any indication that Santoro intended to personally guarantee the company's obligations. The court's ruling provided clarity on the enforceability of personal guarantees in similar contractual arrangements and the importance of distinct and separate signatures for personal guarantees.

Orders