Taurus Trade Finance Pty Ltd v Jakob Mortensen

The dispute between Taurus Trade Finance Pty Ltd and Jakob Mortensen was heard in the Supreme Court of Queensland. Taurus Trade Finance Pty Ltd advanced funds in the context of refinancing corporate business arrangements, and Mortensen, a guarantor related to the principals of the borrower, provided a guarantee. The key issue for the court was whether Mortensen's liability under the guarantee was limited to the debt owed to the outgoing lender, or whether it extended to other debts incurred by the borrower. Another significant legal issue was whether the court could consider extrinsic evidence to establish an ambiguity in a document that was otherwise not ambiguous.

The court held that Mortensen's liability under the guarantee was limited to the debt owed to the outgoing lender. The court found that the guarantee was clear and unambiguous on its face, and that Mortensen's liability was limited to the amount specified in the guarantee, which was $650,000. The court also held that it was not permissible to establish ambiguity in a document not otherwise ambiguous by utilizing extrinsic evidence. The court found that the guarantee was a commercial document and that the parties were sophisticated and experienced in financial transactions. Therefore, the court was not prepared to consider extrinsic evidence to interpret the guarantee.

The court found in favour of Mortensen and held that his liability under the guarantee was limited to the debt owed to the outgoing lender. The court also held that extrinsic evidence could not be used to establish ambiguity in a document that was otherwise clear and unambiguous. The court did not make any further orders beyond these findings.