Smith v Skinner

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District Court


New South Wales

Medium Neutral Citation: Smith v Skinner [2018] NSWDC 197
Hearing dates: 13 July 2018
Date of orders: 19 July 2018
Decision date: 19 July 2018
Jurisdiction:Civil
Before: Russell SC DCJ
Decision:

(1)   Apart from the orders made on 13 July 2018, the plaintiff’s Motion is dismissed.
(2)   Order that the costs of the Motion be costs in the cause.

Catchwords:

PROCEDURE – application for summary judgment – evidence of facts on which claim is based – evidence of belief that there is no defence – whether the solicitor for the plaintiff is a “responsible person” within the meaning of the UCPR rule 13.1(1)(b) who can give evidence of such belief

 

PROCEDURE – summary judgment – whether there is a real question of law to be tried

 

GUARANTEE – whether wide enough to prevent guarantor from raising set-off or counterclaim which would have been available to the principal debtor to extinguish the guaranteed debt

  GUARANTEE – construction of guarantee – whether meaning certain – apparent width of possible application – need to determine facts relevant to commercial circumstances which guarantee addresses and objects it is intended to secure – not appropriate to determine construction of guarantee on summary judgment application
Legislation Cited: Uniform Civil Procedural Rules 2005 (NSW)
Cases Cited: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd 162 CLR 549
Australian Broadcasting Commission v Australasian Performing Rights Association Limited (1973) 129 CLR 99 at 109
BOC Group plc v Centeon LLC [1999] 1 All ER (Comm) 970
Bofinger v Kingsway Group Ltd [2009] HCA 44
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Doherty v Murphy [1996] 2 VR 553
Fancourt v Mercantile Credits Limited (1983) 154 CLR 87
Langford Concrete Pty Ltd v Finlay [1978] 1 NSWLR 14
Liberty Mutual Insurance Co (UK) Ltd v HSBC Bank plc [2001] Lloyd’s Rep Bank 224
McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579
Webster v Lampard (1993) 177 CLR 598
Texts Cited: New South Wales Civil Procedure Handbook 2018, Lawbook Co
O’Donovan and Phillips, Modern Contract of Guarantee, Westlaw AU
Ritchie’s Uniform Civil Procedure (NSW)
Category:Procedural and other rulings
Parties: Laurence James Smith (plaintiff)
Kelvin Skinner (defendant)
Representation:

Counsel:
R Tregenza (plaintiff)
M Wells (defendant)

  Solicitors:
Paul A Brown & Co (plaintiff)
Shaddicks (defendant)
File Number(s): 2017/206944

Judgment

Introduction

  1. The plaintiff seeks summary judgment pursuant to r 13.1 of the Uniform Civil Procedural Rules 2005 (NSW) against the defendant for $128,991.51, together with interest of $65,078.71 and costs.

  2. Rule 13.1(1) provides:

“If, on application by the plaintiff in relation to the plaintiff’s claim for relief or any part of the plaintiff’s claim for relief:

(a)    there is evidence of the facts on which the claim or part of the claim is based, and

(b)   there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or…

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Details
Case
[2018] NSWDC 197
Decision Date

CaseChat Overview and Summary

In the case of Smith v Skinner, the plaintiff sought summary judgment against the defendant, who had provided a guarantee for a debt owed by a third party. The plaintiff's application required the court to consider the admissibility of certain evidence and the construction of the guarantee in question. The court was tasked with determining whether the plaintiff's solicitor could provide evidence of the belief that there is no defence to the claim, and whether there was a real question of law to be tried. Additionally, the court had to examine the scope of the guarantee to ascertain if it precluded the guarantor from raising set-offs or counterclaims that would have been available to the principal debtor.

The court first considered the admissibility of evidence regarding the absence of a defence. The plaintiff's solicitor was deemed a "responsible person" under the relevant rules, thereby allowing them to give such evidence. The court then examined the nature of the dispute to determine if there was a real question of law to be tried. It was found that there were factual issues regarding the construction of the guarantee that required resolution, which precluded the grant of summary judgment. Specifically, the court held that the guarantee's wide wording needed to be examined in the context of the commercial circumstances and the objects it was intended to secure, which necessitated further factual inquiry beyond the scope of a summary judgment application.

Consequently, the court dismissed the plaintiff's motion for summary judgment, except for the orders previously made on 13 July 2018. The court also ordered that the costs of the motion be borne by the plaintiff. This decision highlights the importance of thorough factual investigation in cases involving complex guarantees and the limitations of summary judgment applications when real questions of law and fact are intertwined.

Orders

Orders of the court

(1) Apart from the orders made on 13 July 2018, the plaintiff’s Motion is dismissed.

(2) Order that the costs of the Motion be costs in the cause.

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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