Winbourne & Ors v The National Commercial Bank of Jeddah & Anor (No2)

In *Winbourne & Ors v The National Commercial Bank of Jeddah & Anor (No2)* [1992] NSWCA 276, the New South Wales Court of Appeal considered an appeal concerning the enforceability of certain guarantees. The appellants, the Winbourne parties, sought to resist enforcement of guarantees they had provided to the National Commercial Bank of Jeddah (the first respondent) and its nominee, Al-Baraka Investments Pty Ltd (the second respondent). The core of the dispute revolved around whether the guarantees were valid and enforceable against the appellants.

The primary legal issues before the Court of Appeal were whether the guarantees were void for illegality, specifically due to contravention of the *Companies (Acquisition of Shares) Act 1980* (Cth) (the Act), and whether the respondents had acted in a manner that estopped them from enforcing the guarantees. The appellants contended that the transactions underlying the guarantees involved the acquisition of shares in a company without compliance with the requisite takeover procedures prescribed by the Act, thereby rendering the guarantees illegal and unenforceable.

The Court of Appeal, in its reasoning, examined the nature of the transactions and the scope of the Act. It determined that the transactions did not constitute a contravention of the *Companies (Acquisition of Shares) Act 1980* (Cth) in a manner that would render the guarantees void for illegality. The Court found that the appellants had not established the necessary elements for an estoppel defence, concluding that the respondents were not precluded from enforcing the guarantees. Consequently, the Court dismissed the appeal.