Nicom Interiors Pty Ltd v Circuit Finance Pty Ltd [2004] NSWSC 728

Reported Decision : 50 ACSR 25 (2005) NSW ConvR 56-107

New South Wales Supreme Court

CITATION : Nicom Interiors Pty Ltd v Circuit Finance Pty Ltd [2004] NSWSC 728 HEARING DATE(S) : 6/8/04 JUDGMENT DATE : 6 August 2004

JURISDICTION: Equity Division Corporations List JUDGMENT OF : Young CJ in Eq DECISION : Orders made.

CATCHWORDS : CORPORATIONS [18]- Deeds- Document to be a deed needs to be sealed or expressed to be a deed. GUARANTEE & INDEMNITY [8]- Party added to joint guarantee after execution- Victorian law applicable- Rule in Pigot's case applicable. PRIVATE INTERNATIONAL LAW [82]- Proper law of contract- Guarantee- Principal contract governed by Victorian law. LEGISLATION CITED : Conveyancing Act 1919, s 184 Corporations Act ss 127, 459G, 459H, 459J Birrell v Stafford [1988] VR 281 CASES CITED : Broken Hill Company Pty Ltd v Xenakis [1982] 2 Ll LR 304 Colonial Bank of Australasia v Moodie (1880) 6 VLR (L) 354 Pigot's case (1611) 11 Co Rep 26b; 77 ER 1177 PARTIES : Nicom Interiors Pty Limited (P) Circuit Finance Pty Limited (D) FILE NUMBER(S) : SC 3588/04 COUNSEL : C R C Newlinds SC and E T Finnane (P) L J Aitken (D) SOLICITORS : Carbone Anderson (P) Leonard Deane Lawyers (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

YOUNG CJ in EQ

Friday 6 August 2004

3588/04 – NICOM INTERIORS PTY LTD v CIRCUIT FINANCE PTY LTD JUDGMENT 1 HIS HONOUR: This is an application under s 459G of the Corporations Act 2001 to set aside a statutory demand. The defendant is a finance company which entered into a lease agreement with respect to the fixtures and fittings of a putative restaurant at King St Wharf, Sydney. The lease agreement, it would appear, ended up as a financial disaster for the defendant and it claims that $602,341.89 is its loss. The lease was the subject of a guarantee which is annexed to the lease document to which I will return. 2 On 2 June 2004 the plaintiff, Nicom Interiors Pty Ltd, received a statutory demand for the sum I have mentioned, the claim being made against it as a guarantor. 3 The grounds on which the defendant's claim is attacked are technical, but it does seem to me that they are valid and that I need to set aside the statutory demand. 4 Section 459H of the Corporations Act provides that if the Court is satisfied that there is a genuine dispute between the company and the claimant about the existence or the amount of the debt then the Court sets aside the statutory demand. Section 459J makes it clear that the Court is not to act merely because there is a defect if there is not substantial injustice caused. 5 The first argument raised by the plaintiff is that on the proper construction of the document it is not a guarantor. There seems little sense in setting out the document in full but in my view it is fairly arguable that the plaintiff is not a guarantor. The guarantee which is attached to the lease commences with the words: "THIS DEED made on the day last hereunder referred to BETWEEN the person or persons named and described in the schedule hereto (hereinafter called 'the Guarantor') - of the one part and CIRCUIT FINANCE PTY LTD ... of the other part." 6 There then follows words after the word "WITNESSETH" which suggest that the guarantee has been given jointly and severally and that the defendant has the powers given to a mortgagee by the Property Law Act 1958 (Victoria). Then follows in a rectangular box the words "THE SCHEDULE". In that rectangular box are four names followed by the address of the four persons named. Names and addresses might come within the words "persons named and described in the schedule" though normally one would expect to find a greater description than the mere address. That rectangular box is then closed off and then there are four other rectangular boxes which commence with the words: "IN WITNESS WHEREOF these presents have been executed on the 22nd day of July 2003 SIGNED SEALED AND DELIVERED by the said"