Varga v Karam - [2018] QDC 242

DISTRICT COURT OF QUEENSLAND

CITATION:

Varga v Karam [2018] QDC 242

PARTIES:

AURORA VARGA
(plaintiff)

v

GEORGIANA KARAM
(defendant)

FILE NO.:

4030 of 2016

DIVISION:

Trial Division

PROCEEDING:

Civil

DELIVERED ON:

23 November 2018

DELIVERED AT:

Brisbane

HEARING DATE:

19 November 2018

JUDGE:

Rosengren DCJ

ORDER:

The matter is adjourned for further submissions

CATCHWORDS:

CONTRACTS – CONSTRUCTION OF PARTICULAR CONTRACTS – VARIATION OR SEPARATE AGREEMENT - where the plaintiff entered into a loan agreement with Waves Medical Pty Ltd as trustee for the Karam Family Trust Ltd as the borrower – where an unregistered mortgage in favour of the plaintiff was given over a property owned by Waves Medical Pty Ltd – where the defendant was a director of Waves Medical Pty Ltd and a guarantor of the loan agreement – where the loan agreement was varied in 2012 and there was a further separate agreement in early 2013 – whether the separate agreement constitutes a replacement agreement – where no express intention – whether the facts support an inference that the parties intended the separate agreement to replace the loan agreement

GUARANTEE AND INDEMNITY – ENFORCEMENT OF GUARANTEES AND RELATED MATTERS – CONSTRUCTION AND EFFECT – EXTENT OF LIABILITY – where no express intention that the separate agreement be covered by the defendant’s guarantee of the loan agreement - – whether the guarantee relates to future indebtedness

Triodos Bank NV v Dobbs [2005] EWCA Civ 630, applied

Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93, applied
Seven Cable Television Pty Ltd v Telstra Corp Ltd [2000] FCA 350, applied
Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520, applied
Koh v Pateman [2005] WASC 172, cited

COUNSEL:
PW Hackett for the plaintiff
MD Martin QC for the defendant

SOLICITORS: GTC Lawyers for the plaintiff
Mills Oakley for the defendant

[1] In late October 2012, the plaintiff as the lender entered into a Secured Loan Agreement (‘the Loan Agreement’) with Waves Medical Pty Ltd as trustee for Karam Family Trust Ltd (‘Waves Medical’) as the borrower. An unregistered mortgage in favour of the plaintiff was given over property owned by Waves Medical. The defendant and her then husband, Dr Thamir Karam, were directors and shareholders of Waves Medical. The defendant was also a guarantor under the Loan Agreement.

[2] The Loan Agreement was varied in December 2012 by extending the repayment date and the interest payable. There were further changes in early 2013 by way of an oral agreement between the plaintiff and the defendant on behalf of Waves Medical. On this occasion, the amount of the loan was more than doubled, the interest was varied, the repayment date was again extended and Dr Karam provided a mortgage over his property at Stretton (‘the separate agreement’).

[3] It is common ground that the written alterations to the Loan Agreement in December 2012 operated as a variation to it. The principal issue…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Varga v Karam

Details

AGLC: Varga v Karam [2018] QDC 242
Case: [2018] QDC 242
Decision Date: 23 November 2018

CaseChat Overview and Summary

In the case of Varga v Karam, the plaintiff, Mr Varga, pursued legal action against the defendant, Mr Karam, who was a director of Waves Medical Pty Ltd and a guarantor of a loan agreement. The dispute centred on the terms of the loan agreement between Mr Varga and Waves Medical Pty Ltd, with the Karam Family Trust Ltd as the borrower. The agreement included an unregistered mortgage over a property owned by Waves Medical Pty Ltd. The loan agreement was varied in 2012, followed by a separate agreement in early 2013. The primary issue for the court was to determine whether the separate agreement constituted a replacement for the original loan agreement, despite the absence of an express intention to that effect. Another significant question was whether Mr Karam's guarantee of the loan agreement extended to cover the separate agreement, even though there was no explicit provision in the guarantee addressing this point.

The court examined the circumstances surrounding the separate agreement to ascertain if the facts supported an inference that the parties intended for it to replace the loan agreement. The analysis involved considering the context of the variations and the nature of the separate agreement. Additionally, the court assessed whether the guarantee extended to future indebtedness, specifically to the separate agreement. The court considered the terms of the guarantee, the relationship between the parties, and the overall context of the agreements. The reasoning involved interpreting the documents in light of the surrounding circumstances and the parties' intentions as evidenced by their conduct.

The court concluded that while there was no express intention for the separate agreement to replace the loan agreement, the circumstances suggested that the parties intended it to do so. However, the court found that the guarantee did not explicitly cover the separate agreement, and there was no clear evidence that it was intended to extend to future indebtedness. The court was not satisfied with the current submissions and decided to adjourn the matter for further submissions to allow the parties to provide additional arguments and evidence on these points. The adjournment aimed to ensure a more comprehensive understanding of the issues and the parties' intentions.

Orders

Orders of the court

The matter is adjourned for further submissions

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Varga v Karam [2018] QDC 242
PARTIES:	AURORA VARGA (plaintiff) v GEORGIANA KARAM (defendant)
FILE NO.:	4030 of 2016
DIVISION:	Trial Division
PROCEEDING:	Civil
DELIVERED ON:	23 November 2018
DELIVERED AT:	Brisbane
HEARING DATE:	19 November 2018
JUDGE:	Rosengren DCJ
ORDER:	The matter is adjourned for further submissions
CATCHWORDS:	CONTRACTS – CONSTRUCTION OF PARTICULAR CONTRACTS – VARIATION OR SEPARATE AGREEMENT - where the plaintiff entered into a loan agreement with Waves Medical Pty Ltd as trustee for the Karam Family Trust Ltd as the borrower – where an unregistered mortgage in favour of the plaintiff was given over a property owned by Waves Medical Pty Ltd – where the defendant was a director of Waves Medical Pty Ltd and a guarantor of the loan agreement – where the loan agreement was varied in 2012 and there was a further separate agreement in early 2013 – whether the separate agreement constitutes a replacement agreement – where no express intention – whether the facts support an inference that the parties intended the separate agreement to replace the loan agreement GUARANTEE AND INDEMNITY – ENFORCEMENT OF GUARANTEES AND RELATED MATTERS – CONSTRUCTION AND EFFECT – EXTENT OF LIABILITY – where no express intention that the separate agreement be covered by the defendant’s guarantee of the loan agreement - – whether the guarantee relates to future indebtedness Triodos Bank NV v Dobbs [2005] EWCA Civ 630, applied Tallerman & Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93, applied Seven Cable Television Pty Ltd v Telstra Corp Ltd [2000] FCA 350, applied Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520, applied Koh v Pateman [2005] WASC 172, cited
COUNSEL:	PW Hackett for the plaintiff MD Martin QC for the defendant
SOLICITORS:	GTC Lawyers for the plaintiff Mills Oakley for the defendant