JOHN BARRIE LOITERTON v ADVANCE BANK AUST LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL CLARKE JA, MEAGHER JA and SHELLER JA 8 July 1993 [1993] NSWCA 165 FACTS: Documentation guaranteeing a loan by the respondent to the appellant was executed four days after the loan was drawn down. The appellant sought to rely on affidavit evidence to infer mistake. A certificate validating contravention of s 230(8) of the Companies Code, undated and drafted in the past tense, was relied upon by the appellant as insufficient to satisfy the requirements of such a certificate. HELD: (per curiam) (1) There was insufficient evidence to enable the inference alleged by the appellant in respect of the guarantee documentation and the certificate. Taylor v Johnson (1983) 151 CLR 422 Clarke JA. I will ask Mr Justice Meagher to give the first judgment. Meagher JA. In this matter the respondent, Advance Bank Australia Limited, advanced to a company called Statford Park Pty Limited, the sum of $871,525.00 on 18 September 1989. That advance was guaranteed by certain documents executed by Mr and Mrs Loiterton, the first defendants, Resort Management Services Limited, the second defendant and Leisuremark, the third defendant. The documents guaranteeing those advances were executed four days after the advances were made, namely on 22 September 1989. The documents, if examined, are really documents of guarantee and indemnity, nor merely documents ofguarantee. That fact could hardly be disputed. They are the documents on which the plaintiff, Advance Bank, sued below. It is first submitted that those documents must have been executed by mistake and therefore are, to that extent, unenforceable. The mistake is alleged to arise in this way, that the documents were executed after an offer of loan which was dated 4 August 1989. That document, the offer of loan, which is detailed in its terms, required guarantees to be given by the three sets of appellants. It does not require guarantees and indemnities to be given. Nonetheless, apparently pursuant to that offer of loan, which was accepted by everyone, documents of guarantee and indemnity were tendered for execution and executed by the present appellants. There was no oral evidence given. The appellant is therefore driven to ask us to infer that a mistake must have existed on the face of the documents. In my view, this cannot be done. One can simply infer from the documents of 22 September 1989, the documents of guarantee and indemnity, that they mean what they say and one can infer nothing else. The parties who executed them presumably knew what they were doing and there is no evidence they did not know what they were doing. If a party wishes to allege that a mistake was made, it is incumbent upon him to give evidence that he was in fact mistaken when he executed that document. That vital step has not been taken in the present case. The first argument of the appellant therefore fails. 2 UNREPORTED JUDGMENTS The second argument of the appellants, likewise in my opinion, fails. Section 230 subs 8 of the Companies Code at the relevant time provided that where a guarantee was provided, or loan was made, in contravention of the section, the person enforcing the guarantee could do so if he had received a certificate before the giving of the guarantee, stating that there was no contravention. In the present case apparently such a certificate was given. The point on which the appellant seizes is that the certificate was undated and is cast in the past tense. On that slender basis he has asked us to draw an inference that the certificate was not given as required by the statute before the guarantee was executed. Again, one of the difficulties that that submission encounters is that there is no oral evidence on the point. Another difficulty which the submission encounters is that the certificate, on the face of it, states that it was given before the guarantee was given. Certainly, the words of the certificate are somewhat curious and their eccentric nature has been emphasised in the very able argument by counsel for the appellant. Nonetheless, at the end of the day, the basic fact is that the section requires the giving of the certificate before the guarantee is executed. It is apparent from the certificate in question that the draftsman of it was endeavouring to comply with the section and the certificate itself contains a statement that it was given before the guarantee in question. In those circumstances, it is my view that an appellate court is unable to infer that the certificate was given after the guarantee had been executed. For those reasons, in my view, the appeal should be dismissed with costs. Clarke JA. I agree with the orders and reasons of Mr Justice Meagher. I would add only these short comments: In relation to the first point, Mr Justice Rolfe concluded that in the absence of evidence, the appellants could not rely on the statement of the majority in Taylor v Johnson (1983) 151 CLR 422. I agree entirely with what Mr Justice Rolfe said on that point in his judgment, which appears at pp 17 and 18. I see no basis on which it could be urged, in the absence of oral evidence, that the relevant document was signed as a consequence of a mistake. The argument that the certificate was given after the giving of a guarantee is based on two facts, one that the certificate is undated and second, that the phraseology used adopts the past tense. It is reasonably apparent that the past tense was adopted by the draftsperson in order to comply with the provisions of the section. That is really of little moment. What is of more importance is that the person certifying said that the certificate was given before the guarantee, and that is the critical fact. For my part, I do not think that the inappropriate use of the past tense justifies the Court in acting otherwise than on thefairly apparent intention of the draftsperson, and that is to certify, in accordance with the section, prior to the giving of the guarantee. I would add that, in my view, nothing can be drawn from the absence of the date on the documents, particularly in the light of the fact that, in accordance with normal conveyancing practice, it would be normal for this document to have been handed over to the respondent prior to the guarantee being given. In the circumstances, there is simply no evidence to support that argument, in my opinion, and the appeal should be dismissed with costs. Sheller JA. For the reasons given by the other members of the Court, I agree that the appeal should be dismissed with costs. Clarke JA. The orders of the Court are that the appeal is dismissed with costs. URJ JOHN BARRIE LOITERTON v ADVANCE BANK AUST LTD (Clarke JA) (1) Appeal dismissed with costs. Counsel for the appellant: R VINCENT Solicitors for the appellant: BIBER and CO Counsel for the respondent: VR W GRAY Solicitors for the respondent: LANDERER and CO