TINYOW v LEE and Another [2006] NSWCA 80

New South Wales Court of Appeal

CITATION: TINYOW v LEE and Another [2006] NSWCA 80

HEARING DATE(S): 31 March 2006

JUDGMENT DATE: 13 April 2006

JUDGMENT OF: Handley JA at 1; Santow JA at 2; Ipp JA at 63

DECISION: (1) Appeal allowed. ; (2) The orders of the trial judge are set aside. ; (3) There will be a verdict for the appellant and judgment in the sum of $55,000 against the first respondent and in the sum of $65,000 against the second respondent, together with interest pursuant to s83A of the District Court Act 1973 from 9 August 2004. ; (4) The respondents are to pay the appellant's costs of the appeal and of the proceedings in the District Court. ; (5) The respondents are each to have a certificate under the Suitors' Fund Act 1951.

CATCHWORDS: CONTRACT – Breach of contract – In an arrangement to prop up a company in serious financial difficulties, oral promises were made by two minority shareholders (respondents) to pay $70,000 each to a third shareholder (appellant) who in return would acquire the respondents' shares without payment, accept their resignation as directors (which he did) and 'give releases' to each respondent. Whether agreement was to pay the contribution to the company and not the appellant such that no damage had been established – Whether consideration given by appellant who had discharged company's debts thereby providing substantial equivalent to a release from guarantees of those debts to bank though only bank could give actual release from guarantee – difference between consideration bargained for and consideration by way of practical benefit or accepting detriment.

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 CASES CITED: Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1