Summer Hill Business Estate Pty Ltd v Equititrust Ltd

In the Supreme Court of New South Wales, Court of Appeal, Basten JA considered an application by Summer Hill Business Estate Pty Ltd (the applicant) to direct the Registrar to call upon a guarantee provided by Equititrust Ltd (the respondent). The application arose from interlocutory orders made by Allsop P on 8 February 2011, which had granted a stay of proceedings conditioned on the provision of this guarantee. The applicant sought to vary the existing stay to permit the Registrar to enforce the guarantee.

The central legal issue before Basten JA was whether the Court should exercise its power to vary the interlocutory stay order to allow the Registrar to call upon the guarantee. This involved considering the purpose of the original stay order and the circumstances that would justify its modification to permit the enforcement of the security provided.

Basten JA reasoned that the purpose of the guarantee was to secure the respondent's obligations, and the applicant's application was a mechanism to enforce that security. The Court had the power to vary its own interlocutory orders, and in this instance, the variation was necessary to give effect to the intended operation of the guarantee. Accordingly, Basten JA ordered the Registrar to call upon the guarantee and varied the stay to the extent necessary to permit this action. The Court also made directions regarding the remaining aspects of the notice of motion and the filing of evidence, with costs reserved.