Richardson v Wagner

[2021] QDC 24

DISTRICT COURT OF QUEENSLAND

CITATION:

Richardson v Wagner [2021] QDC 24

PARTIES:

Scott Lee Richardson
(Plaintiff)

v

Lesleigh Wagner

(Defendant)

FILE NO/S:

4668/19

DIVISION:

Civil

PROCEEDING:

Trial

DELIVERED ON:

18 February 2021

DELIVERED AT:

Brisbane

HEARING DATE:

8, 9 February 2021

JUDGE:

Barlow QC DCJ

ORDER:

Judgment for the plaintiff in the amount of $195,609.17, including interest of $16,755.41.

CATCHWORDS:

GUARANTEE AND INDEMNITY – CONTRACT OF GUARANTEE – WHAT CONSTITUTES – GENERALLY – Plaintiff lent money to company controlled by the defendant’s son – Son sought additional funds from plaintiff – Plaintiff agreed to lend the additional money subject to whole of the company’s debt being personally guaranteed by son and defendant – Defendant and son each signed document purporting to be guarantee – Son subsequently defaulted and went bankrupt – Whether document amounts to valid guarantee – Whether document guarantees whole of the debt or only the additional funds.

EQUITY – GENERAL PRINCIPLES – UNCONSCIONABILITY, UNCONSCIONABLE DEALINGS AND OTHER FORMS OF EQUITABLE FRAUD – SPECIAL DISABILITY – Defendant guaranteed debt owed by her son’s company to plaintiff – Company defaulted and wound up – Whether plaintiff had duty to disclose to defendant certain matters regarding company’s business– Whether defendant’s relationship with son placed her at a special disadvantage vis-à-vis plaintiff.

CASES:

Behan v Obelon Pty Ltd [1984] 2 NSWLR 637, cited

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, considered

Devaynes v Noble (1816) 1 Mer 571, 35 ER 781 (‘Clayton’s Case’), distinguished

Fimiston Investments Pty Ltd (in liq) v Pecker Maroo Pty Ltd [2011] QSC 356, cited

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392, considered

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, cited

COUNSEL:

JD Byrnes for the plaintiff
R Varshney for the defendant

SOLICITORS:

Corney & Lind Lawyers for the plaintiff
Cranston McEachern Lawyers for the defendant

Contents

Overview
The guarantee

Is the document a guarantee, or uncertain?

Consideration

How much is guaranteed?

Guarantee limited to four months

Unconscionable conduct?

Conclusion – the guarantee is enforceable

The alleged debt

Payments by Mr Richardson

Payments to Mr Richardson

Conclusion on payments

Payments of principal or interest

Result

Overview

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,

[1]W Shakespeare, Hamlet, Act 1, scene III.  Polonius speaking to Laertes.

And borrowing dulls the edge of husbandry.[1]

1. This is another unfortunate case in which two people, having been taken advantage of by a friend and a son respectively, now battle over who should suffer the loss arising from that person’s failure to fulfil his promises.  Neither of the parties is at fault, but one must suffer the financial consequences more than the other.  I have sympathy for both, but I must decide the issues according to the evidence and the law.

2. Briefly, Mr Richardson alleges that, in circumstances discussed below, he lent sums totalling $150,000 to a company owned by Mrs Wagner’s son, Jason…