Liu v Gu [2020] NSWSC 1469

Supreme Court New South Wales

Medium Neutral Citation: Liu v Gu [2020] NSWSC 1469 Hearing dates: 5 August 2020 Date of orders: 28 October 2020 Decision date: 28 October 2020 Jurisdiction: Equity - Commercial List Before: Henry J Decision: Judgment for the plaintiff against the third defendant. See paragraph [105]. Catchwords: GUARANTEE AND INDEMNITY – Contract of guarantee – where defendants jointly and severally guaranteed payment of amounts to plaintiff – where those amounts have not been paid by principal debtor or defendants – where plaintiff reached settlement agreement with first and second defendants and principal debtor – where orders by consent made for judgment against the first and second defendants for those amounts – where judgment sought against third defendant – whether terms of settlement agreement operated as a release of first and second defendants' and principal debtor's liabilities under the guarantee or as a covenant not to sue – whether third defendant remained liable under guarantee – whether guarantee contained a reservation of rights clause – whether guarantee should be interpreted as an indemnity Legislation Cited: Nil Cases Cited: Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36 Bank of Adelaide v Lorden (1970) 127 CLR 185; [1970] HCA 59 Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 Carr v Thomas [2009] NSWCA 208 Dorgal Holdings Pty Ltd v Buckley (1996) 22 ACSR 164 In Re Fireproof Doors Limited, Umney v The Company [1916] 2 Ch 142 In the matter of i-Prosperity Capital Pty Ltd (ACN 605 317 360) [2020] NSWSC 1116 James v Surf Road Nominees Pty Limited [2004] NSWCA 475 Jeans v Bruce [2004] NSWSC 539 Lavin v Toppi (2015) 254 CLR 459; [2015] HCA 4 Murray-Oates v Jjadd Pty Limited (1999) 76 SASR 38; [1999] SASC 537 Osborn v McDermott [1998] 3 VR 1 Padstow Corporation Pty Ltd v Fleming [2011] NSWSC 1337 Perry v National Provincial Bank of England [1910] 1 Ch 464 Pollak v National Australia Bank Limited [2002] FCA 237; [2002] FCAFC 55 Walker v Bowry (1924) 35 CLR 48; [1924] HCA 28 Texts Cited: Glanville Williams, Joint Obligations: A Treatise on Joint and Joint and Several Liability in Contract, Quasi-Contract and Trusts in England, Ireland and the Common-Law Dominions (1949, Butterworth & Co) James Donovan and John Phillips, Modern Contract of Guarantee (4th ed, 2004, Thomson Reuters, looseleaf) Category: Principal judgment Parties: Liyun Liu (Plaintiff) Menghong Gu (First Defendant) Zhouxiang Huang (Second Defendant) Xiaolu Li (Third Defendant) Representation: Solicitors: