TYREE v CHALLENGE FINANCE LTD [1993] NSWCA 275

TYREE vy CHALLENGE FINANCE LTD

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

PRIESTLEY JA, HANDLEY JA and Cripps JA

10 February 1993

[1993] NSWCA 275

GUARANTEE — question of fact — no question of principle.

Priestley JA. I will ask Handley JA to give his reasons for the conclusion we have arrived at.

Handley JA. This is an appeal by Christopher William Tyree from a judgment entered by Rolfe J in the Commercial Division on 10 April last year following a hearing. The respondent to the appeal, Challenge Finance Ltd, previously Trade Credits Ltd, sued the appellant in the Supreme Court under a guarantee signed by him on 20 November 1986 which in due course covered five equipment leases entered into by Tytel Ltd as lessee with Trade Credits as lessor, between 20 November 1986 and 7 August 1987.

Originally, as appears from the findings of Rolfe J, Rogers CJ of the Commercial Division ordered summary judgment in favour of Challenge Finance and pursuant to his Honour's order, judgment was signed for $196,840.89 on 16 September 1991. Subsequently, the appellant applied to the Commercial Division to havethis judgment set aside based on facts which were deposed to by him on affidavit.

The appellant's point was that the guarantee which he signed in favour of Trade Credits Ltd was required to be signed as a matter of form only, it being understood between that company and the appellant that it would only be enforceable in the event that the appellant improperly diverted assets from Tytel Ltd to himself or some nominee or dummy.

On this application by Mr Tyree, Rolfe J set aside the default judgment, as he described it, and ordered an expeditious hearing on the only issue which was raised before him in answer to the claim under the guarantee, namely, the one that I have referred to a moment ago. As Rolfe J indicated, the only question raised for his determination at the hearing was whether there was an understanding between Trade Credits Ltd and Mr Tyree of the nature I have previously mentioned. At the hearing Mr Tyree agreed that the conversation or conversations that he relied upon to establish the existence of the arrangement or understanding were held with Mr John Douglas Perry, an officer of Trade Credits Ltd.