PROUD v BRIMS DISTRIBUTORS PTY LTD [1996] NSWCA 439

PROUD v BRIMS DISTRIBUTORS PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY P, COLE JA and WADDELL AJA 10 April 1996, 26 November 1996

[1996] NSWCA 439

BANKRUPTCY dicharging contingent liability — assessment of value of contingent liability — s82 Bankruptcy Act.

Mahoney P I agree with the judgment of Cole JA.

Cole JA In a judgment delivered 24 August 1993 Bell DCJ held that Christopher James Proud, a guarantor of certain indebtedness of Ilesower Pty Ltd

(lesower) was liable upon his guarantee executed on 2 May 1983 in circumstances where Mr Proud had been made bankrupt on 28 June 1983, was discharged from bankruptcy on 29 June 1986, and where the goods giving rise to the claim on the guarantee were delivered by Brims Distributors Pty Ltd, the unpaid creditor, to Ilesower between February 1987 and April 1987. Mr Proud has appealed that judgment contending that the effect of his bankruptcy, and discharge from bankruptcy, was to negate any liability under the guarantee.

The facts were not in dispute and were as I have stated them above.

The material terms of the guarantee are as follows:

"TO: BRIMS DISTRIBUTORS PTY LTD IN CONSIDERATION of you having at our request agreed to supply and/or continue to supply to Ilesower Pty Ltd of Unit 6/108 Percival Rd, Smithfield 2164.

(hereinafter called "the debtor") with goods and/or services from time to time we Mr C Proud director of 5 Chadwick Cres, FAIRFIELD WEST 2165 HEREBY JOINTLY AND SEVERALLY agree with you as follows:-

1. To guarantee to you the payment by the debtor for all goods and/or services as you may have hitherto supplied or as you may hereafter supply from time to time at his request and notwithstanding that we shall not have notice of any neglect or omission on the debtor's part to pay for such goods and/or services according to the terms agreed on between you and him.