Lee v ATL (Australia) Pty Ltd [2023] NSWCA 327

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Lee v ATL (Australia) Pty Ltd [2023] NSWCA 327 Hearing dates: 9 November 2023 Date of orders: 21 December 2023 Decision date: 21 December 2023 Before: Meagher JA at [1] Gleeson JA at [2] Griffiths AJA at [109] Decision: (1) Appeal allowed. (2) Orders (1) and (2) made by Fagan J on 6 April 2023 be set aside. (3) In lieu thereof, order that: (a) the plaintiff's claim against the second defendant be dismissed; and (b) the plaintiff to pay the second defendant's costs of the proceedings below. (4) The respondent to pay the appellant's costs of the appeal. Catchwords: GUARANTEE AND INDEMNITY — Scope of liability of guarantor — Construction — Where guaranteed loan agreement provided for interest accrual on drawdown — Where side letter agreed between borrower and lender provided for pre-drawdown interest — Where guarantor did not consent to side letter — Whether side letter altered borrower's obligations under loan agreement pursuant to which funds were advanced GUARANTEE AND INDEMNITY — Discharge of guarantor — Where draft principal contract altered between borrower and lender prior to contract of guarantee — Whether rule discharging guarantee where principal contract varied without guarantor's consent applied — Rule in Holme v Brunskill (1877) 3 QBD 495 GUARANTEE AND INDEMNITY — Contract of guarantee — Construction — Whether guarantee obligation properly characterised as indemnity — Where guarantee expressed to be principal obligation Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 42.1 Cases Cited: Abby National Building Society v Cann [1991] 1 AC 56 ABM Amro Commercial Finance Plc v McGinn [2014] EWHC 1674 (Comm); [2014] 2 Lloyd's Rep 333 Adisan Pty Ltd v Irwin [2015] NSWCA 217 Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549; [1987] HCA 15 Associated British Ports v Ferryways NV [2009] EWCA Civ 189; [2009] 1 Lloyd's Rep 595 ATL (Australia) Pty Ltd v Cui [2023] NSWSC 336 Bank of Adelaide v Lorden (1970) 127 CLR 185; [1970] HCA 59 Bank of New Zealand v Baker [1926] NZLR 462 Bridgestone Australia Ltd v GAH Engineering Pty Ltd [1997] 2 Qd R 145 Brighton v Australia and New Zealand Banking Group Ltd [2011] NSWCA 152 Caltex Australia Petroleum Pty Ltd v Troost [2015] NSWCA 64 Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 CIMC Raffles Offshore (Singapore) Ltd v Schahin Holding SA [2013] EWCA Civ 644; [2013] 2 Lloyd's Rep 575 Credit Lyonnais Australia Ltd v Darling (1991) 5 ACSR 703 Corumo Holdings Pty Ltd v C Itoh Ltd; BNY Australia Pty Ltd v C Itoh Ltd (1991) 24 NSWLR 370 Egbert v National Crown Bank [1918] AC 903 Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235; [2008] Aust Contract R 90-274 Geelong Building Society (in liq) v Encel [1996] 1 VR 594 GPP Big Field LLP v Solar EPC Solutions SL [2018] EWHC 2866 (Comm) Hackney Empire Ltd v Aviva Insurance Ltd [2013] 1 WLR 3400; [2012] EWCA Civ 1716 Hancock v Williams (1942) 42 SR (NSW) 252 Holme v Brunskill (1877) 3 QBD 495 Moschi v Lep Air Services Ltd [1973] AC 331 Perry v National Provincial Bank of England [1910] 1 Ch 464 Southern Cross Assurance Co Ltd v Australian Provincial Assurance Association Ltd (1939) 39 SR (NSW) 174 Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; [1988] HCA 11 Sutton v Grey [1894] 1 QB 285 The Fletcher Organisation Pty Ltd v Crocus Investments Pty Ltd [1988] 2 Qd R 517 Total Oil Products (Australia) Pty Ltd v Robinson [1970] 1 NSWR 701 Valstar v Silversmith [2009] NSWCA 80 Westpac Banking Corporation v Tanzone Pty Ltd [2000] NSWCA 25; (2000) 9 BPR 17,521 Yeoman Credit Ltd v Latter [1961] 1 WLR 828 Texts Cited: Thomson Reuters, The Modern Contract of Guarantee, electronic version, 7.800 Category: Principal judgment Parties: Jeffery Tse Hung Lee (Appellant) ATL (Australia) Pty Ltd (Respondent) Representation: Counsel: B W Walker AO SC / P D Reynolds / L A Geddes (Appellant) P M Knowles SC / C J Chiam (Respondent)