Yu & anor v Brownvalley Investments Pty Ltd & ors [2010] NSWSC 253

New South Wales Supreme Court

CITATION : Yu & anor v Brownvalley Investments Pty Ltd & ors [2010] NSWSC 253

HEARING DATE(S) : 2 & 3 November 2009

JUDGMENT DATE : 1 April 2010

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

DECISION : The plaintiffs are not entitled to an injunction restraining calling on or payment of the bank guarantee. The plaintiffs are entitled to judgment against Golden Harvests for damages for breach of contract. The first defendant is entitled to judgment against Golden Harvests and Mr Snelson for AU$550,000 less the amount it recovers under the bank guarantee, and against Mr Klein-Beernink for AU$700,000, plus interest from 1 February 2009, less the amount it recovers under the bank guarantee.

CATCHWORDS : BANKING AND FINANCE – Bank guarantee – notice of – effect of unauthorised delivery to favouree – not a negotiable instrument – not money – held, unauthorised delivery does not give favouree title to guarantee – AGENCY – ostensible authority – whether possession of bank guarantee sufficient to confer ostensible authority to deliver same to favouree – held, more than mere possession is required to indicate authority to deal

LEGISLATION CITED : (CTH) Corporations Act 2001 s 1324(10), s 1317H, s 1317HA

CATEGORY : Principal judgment

Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371 Cole v North Western Bank (1872) LR 10 CP 354, 362 Farquharson Brothers & Co v King & Co [1902] AC 325 Fox v Martin (1895) 64 LJ Ch 473] CASES CITED : Fry v Smellie [1912] 3 KB 282 Jerome v Bentley & Co [1952] 2 All ER 114 Lipkin Gorman v Karpnale [1991] 2 AC 548 Miller v Race (1758) 1 Burr 452 Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 Weiner v Gill [1905] 2 KB 172, 182