New South Wales Supreme Court CITATION : Kennedy v Silver [2005] NSWSC 1153 HEARING DATE(S) : 28 October 2005 JUDGMENT DATE : 28 October 2005 Equity Division JURISDICTION : Commercial List JUDGMENT OF : Windeyer J at 1 DECISION : No issue to be tried, summary judgment to go to the plaintiff. CATCHWORDS : PRACTICE AND PROCEDURE - application for summary judgment - money owed pursuant to guarantee - no real issue to be tried Gregory James Kennedy (Plaintiff) PARTIES : Michael Bernard Silver (Defendant) FILE NUMBER(S) : SC 50110 of 2005 Mr James Stevenson SC with him Mr N C Bearup (Plaintiff) COUNSEL : Mr Richard Horsley (D) Henry Davis York (Plaintiff) SOLICITORS : Brian J Gillard Consulting Lawyers (Defendant) LOWER COURT JURISDICTION : - 3 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST WINDEYER J FRIDAY 28 OCTOBER 2005 50110/05 GREGORY JAMES KENNEDY v MICHAEL BERNARD SILVER JUDGMENT 1 HIS HONOUR: In this matter the plaintiff makes a claim in respect of money said to be owed by the defendant pursuant to a guarantee. The allegation in the summons is that the guarantee was given on 10 August 2004, that in December 2004 the plaintiff agreed to extend the term of the loan agreement for three months from its original due date to become payable on 10 February 2005. 2 The defence, as originally pleaded, admitted that there was a variation but did not admit the terms and stated that the terms of the variation were that the plaintiff elected not to exercise a right to convert the debt into equity, "that the defendant provide by way of his best endeavours (including his expertise) his services as a director of a company, subsequently known as Dominion Oil & Gas Limited, engineer, chief executive officer and professional investor". That statement is meaningless, but I take it to be an endeavour to say that the defendant would provide his services in some capacity through some corporate entity to that particular company. 3 The balance of paragraph 4 of the defence is as follows: The defendant would receive twenty-five percent of the monies invested in DOM as consideration for such undertaking. 4 If what is alleged by the defendant is correct, then it would seem possible for the defendant to say that the money was never repayable, at least by him pursuant to the guarantee. I should add that the defence was amended by consent today, raising a defence of estoppel, based upon what might be said to be representations leading to estoppel rather than a contractual claim. 5 In affidavit evidence the defendant gives evidence of what he says is a conversation which took place in November 2004 under which he told the plaintiff he would like him to convert the loan to equity, as he thought the resort was going to take some considerable further investment and that the plaintiff said: "Don't worry about that, I have a very interesting project in Tanzania that I'd like you to assist with. I'm sure you'll make enough to pay back the loan even if ADC doesn't move forward." 6 The defendant says he said to the plaintiff: "Well, if you are happy to rely on the security of my interest then I can spend more time on your Tanzanian project and I won't have to worry about making progress with ADC." 7 It is said that, although this conversation is alleged to have taken place on about 23 November 2004, that could be taken to be the same time as it is agreed that there was a conversation as to vary the terms of the loan agreement, namely, in December 2004. That contention, in my view, could not be made out. 8 The only question, really, to decide in this matter is whether or not there is an issue which should go to trial. I approach this matter on the basis that, for the purpose of summary judgment, the affidavit evidence of the defendant, to which I have referred, should be accepted. On no possible basis could that affidavit evidence support an agreement binding on the parties in the terms alleged in paragraphs 4 (c), (d) and (e) of the defence. 9 All of the correspondence by way of email and the like produced in evidence admits the debt, but expresses regret there is a delay in payment. There is a letter which does refer to a claimed interest in DOM, which I should say is denied, but whether or not the plaintiff would have been capable of bringing about that interest I cannot determine, although I cannot see how he could have. 10 In any event, the conversation relied upon would not be sufficient to support the defence claimed, and the correspondence is entirely contrary to the defence which is claimed. I am of the clear opinion that there is no issue to be tried on this matter, and summary judgment ought to go to the plaintiff, and I propose to so order. 11 On the plaintiff's notice of motion filed 21 October 2005 I make orders in accordance with paragraphs 1 and 2. 12 On the defendant's notice of motion of 10 October 2005 I have already made an order giving leave to amend in accordance with this document. The claims in paragraphs 1 and 2 are dismissed. 13 On the plaintiff's notice of motion of 21 October 2005 I stay execution of the judgment for 28 days. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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