YOUNAN and ANOR v BENEFICIAL FINANCE CORPORATION LTD [1994] NSWCA 370

YOUNAN and ANOR v BENEFICIAL FINANCE CORPORATION LTD SUPREME COURT OF NEW SOUTH WALES COMMERCIAL DIVISION

MAHONEY JA, SHELLER and POWELL JJA 4 February 1994, 21 November 1994

[1994] NSWCA 370

Guarantees — Contracts Review Act — Consideration of structure and effect — Meaning of terms — Relevance of personal position of guarantors Appeal from Equity Division — Guarantee over home given by elderly lady for son-in-law's business — Guarantee given by wife of son-in-law — Business failed — Call on guarantee. CONTRACTS REVIEW ACT — Consideration of its structure and effect — Meaning of terms, "unjust", etc — "Public interest" in enforcement of contracts — Relevance of personal position of guarantors — Discretionary jurisdiction of the Court.

ORDERS Appeals and cross appeals dismissed with costs.

Mahoney JA In October 1988 two transactions took place between Beneficial Finance Corporation Ltd ("BF") and (as I shall describe them) members of the Bechara family. One involved a loan of about $3,000,000 to TAB Constructions Pty Ltd: that transaction is not now in question. The other involved the grant of a facility of some $672,750 to Dimah Developments Pty Ltd: it is that transaction which is here in question. Mrs Younan gave a guarantee of the Dimah transaction indebtedness, supported by a mortgage of her home. Mrs Bechara, her daughter, also gave a guarantee of the Dimah transaction, supported by a second mortgage of a property which she held as an investment.

Default occurred. In the present proceedings, BF has sought to enforce the mortgage and guarantee given by Mrs Younan and the guarantee given by Mrs Bechara. The proceedings, as originally framed, were brought also against other members of the Bechara family. The Court is now concerned only with the proceedings against Mrs Younan and Mrs Bechara.