RATCLIFFE and ANOR v OCEANIC LIFE LTD [1998] NSWCA 180

RATCLIFFE v OCEANIC LIFE LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL COMMERCIAL DIVISION

GLEESON CJ, MASON P and CoLe JA 10 March 1998, 10 March 1998

[1998] NSWCA 180

CONTRACT — MORTGAGE — GUARANTEE — ASSIGNMENT — following default by mortgagor a refinancing arrangement was made — for stamp duty purposes parties to refinancing decided that mortgagee would assign debt and securities to new financier — subsequent assignment of benefit of guarantee of debt — HELD — the assignments were legally effective according to their tenor and the way no warrant for disregarding the form of the contracts into which the parties entered.

Gleeson CJ The issue which requires determination by this Court was only one of a number of issues decided by the learned primary judge. Because I am in complete agreement with his Honour's reasoning upon that issue, it will be possible for me to express my reasons relatively briefly. The facts are set out in detail in his Honour's careful reasons for judgment and it is necessary for present purposes to repeat only those which are essential to an understanding of what I propose to say.

In July 1992, Glowtide Pty Ltd borrowed an amount of $10,000,000 from Permanent Trustee Company Ltd. Permanent Trustee Company Ltd was acting in the transaction as trustee for another entity, but that aspect of the matter is presently irrelevant.

In order to secure the debt, Glowtide, as mortgagor, executed in favour of Permanent Trustee Company, as mortgagee, a mortgage over certain real estate in Queensland. The mortgage contained, in covenant 8, a covenant on the part of the mortgagor to repay to the mortgagee the amount of the debt and interest.

On the same day in July 1992, the appellants, Mr Ratcliffe and Mr Tuck, together with one other person, executed an instrument of guarantee and indemnity in favour of Permanent Trustee Company Ltd. The appellants, who were directors of Glowtide, guaranteed to Permanent Trustee the due payment by Glowtide of moneys secured by the mortgage.