NEEDHAM v TELEVISION AUSTRALIA SATELLITE SYSTEMS LTD and ANOR [1995] NSWCA 310

NEEDHAM v TELEVISION AUSTRALIA SATELLITE SYSTEMS LTD and ANOR

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, SHELLER and COLE JJA 10 October 1995, 4 December 1995 [1995] NSWCA 310

GUARANTEE — formalities required promise to "stand beside" or "stand behind" or "take care of" parties extending funds — whether promise constituted guarantee — held: It did not. At best it constituted an expression of comfort. But not a guarantee.

CONTRACT — agreement — promise to make good shortfall — held: In its terms gave rise to entitlement.

GUARANTEE — loan of funds — promise by accountant on behalf of company that it would "stand behind" the lenders or "stand beside" the lenders or "take care of" the lenders — whether such promise constituted a guarantee — held: It did not.

Bank of New South Wales v Bowen Trustee Co of New South Wales Ltd (1943) 68 CLR | applied.

CONTRACT - agreement between parties in business relationship - promise by one party to "make good any shortfall in interest payments due by [another company] for whatever reason when funds are available to the contractor" - funds later become available to the contractor - promise not limited to particular project - construction of promise - held: (Reversing HH Bell DCJ on this point): Upon its true construction, understood in the light of the language of the agreement between the parties viewed in its context, the promise gave its beneficiary the entitlement, in the circumstances which had occurred, to

recovery of the payment of arrears of interest - such sum should be calculated, agree and incorporated in short minutes.

ORDERS

1. Appeal upheld;

2. Orders and judgment of His Honour Bell DCJ be set aside;

3. Parties to agree upon the calculations referred to in these reasons.

Judgment for the appellant against the first respondent in the sum so agreed;