Yang & Ors v Nashco Pty Ltd - [2023] HCATrans 16

[2023] HCATrans 016

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S127 of 2022

B e t w e e n -
TUN YANG
First Applicant
YINGJIA FU
Second Applicant
YIHIM ZHENG
Third Applicant
LUI YIN KO
Fourth Applicant
and
NASHCO PTY LTD
Respondent
Application for special leave to appeal

EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 17 FEBRUARY 2023, AT 1.30 PM

____________________

EDELMAN J: In accordance with the protocol for remote hearings, I will announce the appearances for the parties.

MR B.W. WALKER, SC appears with MR A.J. MACAULEY for the applicants. (instructed by Du & Associates Lawyers)

MR G.K.J. RICH, SC appears with MR J. SLEIGHT for the respondent. (instructed by Neville Hourn & Borg Legal)

EDELMAN J: Yes, Mr Walker.

MR WALKER: May it please your Honours. We submit that this case arising from a fairly typical commercial dealing of customer, supplier and guarantor gives rise to an opportunity for the Court to look at, what would appear for the first time, at certain matters that are fundamental to the issues of contract and property comprised in the interpretation of the guarantee, the consideration of the supply contracts and, in particular, the assignment, which is contemplated by the expressions in the guarantee.

Could I remind you of the critical expressions – they are found in a number of places, but in the book at page 71, paragraph 14 sets out the relevant words. Your Honours are familiar from the exchanged argument on the special leave application with the need that arises to understand the meaning and extent of the word “seller” throughout. “Assigns” or “assignment” comes in because of the extended expression:

A G Brewer & K M Brewer T/A Nashco and its successors and assigns –

then, compendiously, by the usual device described as constituting “the Seller”. Now, in our submission, the significance of the case, lifting it beyond disputed interpretation of a particular, perhaps not completely artful document is this: the fundamental problem arises, even before we get to conflicting authorities, concerning

the operation of contractual doctrines of privity which, in our submission, have been wrongly shunted to one side in the reasoning against us on the one hand, and on the other hand, the really critical question of understanding how a guarantee can possibly be extended beyond the description contained in the terms of the guarantee by its reference to a supply obligation.

As your Honours know, the facts present this as an ideal vehicle to test the capacity – regardless, apparently, of privity – for someone to be held to a contractual promise to guarantee liabilities owed to somebody who did not exist and who certainly was not within the express description of a contractual party in the guarantee itself.

EDELMAN J: Mr Walker, there is no issue in this case, is there, about the operation of all of those legal provisions derived…

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.

Keep reading for free

Create a free CaseChat account to read Yang & Ors v Nashco Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2023] HCATrans 16
Decision Date

CaseChat Overview and Summary

The applicants, Yang & Ors, sought special leave to appeal to the High Court of Australia from a decision concerning a commercial guarantee. The dispute arose from a customer-supplier relationship where a guarantee was provided, and the core of the disagreement centred on the interpretation of the guarantee's terms, particularly in relation to the identity of the "seller" and the effect of assignments. The applicants argued that the guarantee was intended to cover liabilities owed to the original supplier (Nashco partnership) and its successors and assigns, but that the debts sought to be enforced under the guarantee arose from supplies made by a different entity, Nashco Pty Ltd, under separate arrangements.

The legal issues before the High Court involved the interpretation of the guarantee instrument and its interaction with fundamental contractual doctrines, specifically privity of contract and the assignment of contractual rights and obligations. The applicants contended that the Court of Appeal had wrongly sidestepped the doctrine of privity by focusing on assignment provisions, arguing that a guarantee cannot extend to liabilities owed to a party not contemplated by the original agreement, regardless of assignment clauses. A key question was whether the word "assigns" in the guarantee could encompass liabilities arising from supplies made by a new entity that had not been a party to the original supply contracts or the guarantee.

The High Court, through Edelman J, indicated that an appeal would likely turn on questions of construction of the specific guarantee and supply agreements. The Court's reasoning, as evidenced by the dismissal of the special leave application without hearing from the respondent, suggests that the construction of the documents, including the scope of "assigns" and the effect of any assignments, was considered a matter of interpretation rather than a broader doctrinal issue that warranted appellate intervention. The Court found that the prospects of success on appeal were insufficient to grant special leave.

Accordingly, the application for special leave to appeal was dismissed with costs.

Orders