Rondo Building Services Pty Ltd v Casaron Pty Ltd

Case [2002] QDC 128

DISTRICT COURT OF QUEENSLAND

CITATION:

Rondo Building Services Pty Ltd v Casaron Pty Ltd & Anor [2002] QDC 128

PARTIES:

RONDO BUILDING SERVICES PTY LTD
ACN 000 289 207
Plaintiff

v

CASARON PTY LTD (FORMERLY PPP (QLD) PTY LTD)
ACN 077 155 429
First Defendant

and

PETER JOHN DANCE
Second Defendant

FILE NO:

D3731 of 2001

DIVISION:

Civil jurisdiction

PROCEEDING:

ORIGINATING COURT:

Brisbane

DELIVERED ON:

17 May 2002

DELIVERED AT:

Brisbane

HEARING DATE:

22 April 2002

JUDGE:

Judge Forde

ORDER:

Action dismissed with costs to be assessed

CATCHWORDS:

CLAIM ON GUARANTEE – execution by guarantor next to company seal – effects of Romalpa Clause Affixing of goods to other materials – debt or equitable claim – res judicata – issue estoppel

Uniform Civil Procedure Rules (Qld) r. 294

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549;
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; (2000) 74 ALJR 862; discussed
Borden (UK) v Scottish Timber Products Ltd (1981) 1 Ch. 25; referred to
Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd & Ors (1989) 21 NSWLR 160 applied;
CSR Limited v Casaron Pty Ltd & Ors (2002) QSC 21; distinguished
Delaney v Purves & Or (1930) QWN 6; referred to
James Thane Pty Ltd v Conrad International Hotels Corp (1999) QCA 517 applied;
Luton Investments v Davreal (1968-1969) 89 WN (Part 1) NSW 450 referred to;
NEC Information Systems Australia Pty Ltd v John Linton BC 8500877 17.04.85 Supreme Court of New South Wales; Royal Bank of Canada v Oram (1978) 1 WWR 564 distinguished;
Scottish Amicable Life Assurance Society (1985) 9 ACLR 909 applied;
Sunbird Plaza Pty Ltd v Maloney(1988) 166 CLR 245

COUNSEL:

H.J Zillman for plaintiff
S. Couper QC with L Bowden for second defendant

SOLICITORS:

James Conomos Lawyers for plaintiff
Hawthorn Cuppaidge & Badgery for the second defendant

Introduction

  1. The plaintiff in this action is Rondo Building Services Pty. Ltd.  It carries on the business of providing steel frame work used in the construction of walls and ceilings in buildings.  It provided such goods to the first defendant Casaron Pty. Ltd. (formerly PPP (Qld) Pty Ltd).  The second defendant, it is alleged, guaranteed the payment of the debt of the first defendant.  The amount sued for is $162,298.34  and interest.  The second defendant does not dispute that in relation to the sum of $144,881.17, it does not seek any further discounting but that the debt has to be proved.  The claim includes the sum of $1,010.39 for costs incurred in attempting to recover the monies owing. 

  1. Leave was given to the plaintiff to amend paragraph 8 of the Amended Statement of Claim  to rely upon two documents as evidencing the guarantee viz. Exhibits 2a and 2b. 

  1. Judgment has been entered against the first defendant pursuant to an order of his honour Judge McGill on 23 October 2001 in the sum of  $168,889.19 which included the sum of $24,008.02…

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Details
AGLC
Rondo Building Services Pty Ltd v Casaron Pty Ltd [2002] QDC 128
Case
[2002] QDC 128
Decision Date

CaseChat Overview and Summary

The Federal Court of Australia considered a dispute between Rondo Building Services Pty Ltd, the plaintiff, and Casaron Pty Ltd, the defendant, regarding a guarantee provided by the latter for debts owed by a third party. The plaintiff sought to enforce a guarantee executed by Casaron’s director next to the company seal. The central issue was whether the guarantee was binding on the company, considering the execution by the director and the presence of a Romalpa Clause in the agreement. Additionally, the court had to determine whether the plaintiff’s claims were for a debt or an equitable claim, which had implications for the applicability of res judicata and issue estoppel.

The primary legal issues revolved around the enforceability of the guarantee in light of the Romalpa Clause, which aimed to retain ownership of goods until payment in full. The court needed to assess whether the affixing of goods to other materials transformed the plaintiff's claim into an equitable one. Furthermore, the court considered whether the plaintiff's previous litigation against the third party, which resulted in a judgment, barred the current claim against the guarantor due to res judicata or issue estoppel.

The court held that the guarantee executed by the director next to the company seal was binding on Casaron. The Romalpa Clause did not affect the enforceability of the guarantee, as it did not alter the contractual relationship between the guarantor and the obligee. The court found that the plaintiff’s claim was not an equitable claim but rather a debt claim, as the guarantee was a clear promise to pay. Consequently, the previous judgment against the third party did not preclude the plaintiff from enforcing the guarantee against Casaron, as res judicata and issue estoppel did not apply in this context.

The court dismissed the plaintiff's action and ordered that costs be assessed.

Orders

Orders of the court

Action dismissed with costs to be assessed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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