Surf Road Nominees Pty Limited & Ors v Tass James & Ors [2004] NSWSC 223

Surf Road Nominees Pty Limited & Ors v Tass James & Ors [2004] NSWSC 223

The defendants' liability under the guarantee is not discharged by the transfer or release of units, as such transfer is expressly authorised by the Deed and there is no sufficient evidence of impairment of security or prejudice. Calculation of judgments must follow the contractual allocations; set-off of the value of units is not warranted where the plaintiffs/investors did not receive those funds. Costs are to follow the event, payable by defendants/cross-claimants jointly and severally.

Parties
First Plaintiff: Surf Road Nominees Pty Ltd ACN 087 719 060; Second Plaintiff: Chris Burke & Co Pty Ltd ACN 062 554 849; Third Plaintiff: IG Martyn Real Estate Pty Ltd ACN 001 210 304; Fourth Plaintiff: WIT Investments Pty Ltd ACN 087 762 856; Fifth Plaintiff: DJZ Construction Pty Limited ACN 087 784 601; First Defendant: Tass Alexander James; Second Defendant: Janet Margaret James; Third Defendant: New South Head Road Nominees Pty Ltd CAN 088 322 472; Sixth Cross Defendant/first Cross Claimant (second Cross Claim): Michael Christian; Seventh Cross Defendant/second Cross Claimant (second Cross Claim): Katherine Christian; Eighth Cross Defendant/third Cross Claimant (second Cross Claim): Cottenham Nominees Pty Ltd; Ninth Cross Defendant: Vincent Palmieri; Tenth Cross Defendant: Terry Ian Wilson; Eleventh Cross Defendant: Andrew Peter Mortimer
Jurisdiction
Australia
Judgment Date
01 April 2004
Procedural Posture
Equity—commercial List—guarantee Enforcement and Associated Relief / Decision After Reserved Judgment on Outstanding Issues and Costs
Outcome
Judgment delivered on outstanding issues; applications for set-off and further reduction of liability dismissed; costs determined.
Legal Topics
Guarantee, Release of Security, Costs, Calculation of Entitlements, Set Off Procedures
Equity Commercial Law Contract Law Guarantee Release of Security Costs Calculation of Entitlements Set Off Procedures

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Parties

Surf Road Nominees Pty Ltd ACN 087 719 060

First Plaintiff

Chris Burke & Co Pty Ltd ACN 062 554 849

Second Plaintiff

IG Martyn Real Estate Pty Ltd ACN 001 210 304

Third Plaintiff

WIT Investments Pty Ltd ACN 087 762 856

Fourth Plaintiff

DJZ Construction Pty Limited ACN 087 784 601

Fifth Plaintiff

Tass Alexander James

First Defendant

Janet Margaret James

Second Defendant

New South Head Road Nominees Pty Ltd CAN 088 322 472

Third Defendant

Michael Christian

Sixth Cross Defendant/first Cross Claimant (second Cross Claim)

Katherine Christian

Seventh Cross Defendant/second Cross Claimant (second Cross Claim)

Cottenham Nominees Pty Ltd

Eighth Cross Defendant/third Cross Claimant (second Cross Claim)

Vincent Palmieri

Ninth Cross Defendant

Terry Ian Wilson

Tenth Cross Defendant

Andrew Peter Mortimer

Eleventh Cross Defendant

Procedural Posture

Equity—commercial List—guarantee Enforcement and Associated Relief / Decision After Reserved Judgment on Outstanding Issues and Costs

Legal Issues

  1. 1 Whether release of security constituted discharge of guarantee
  2. 2 Proper calculation of judgments and allocations under deed
  3. 3 Set-off/offset issues in quantifying liability and entitlement

Ratio Decidendi

The defendants' liability under the guarantee is not discharged by the transfer or release of units, as such transfer is expressly authorised by the Deed and there is no sufficient evidence of impairment of security or prejudice. Calculation of judgments must follow the contractual allocations; set-off of the value of units is not warranted where the plaintiffs/investors did not receive those funds. Costs are to follow the event, payable by defendants/cross-claimants jointly and severally.

Court Disposition

Judgment delivered on outstanding issues; applications for set-off and further reduction of liability dismissed; costs determined.

Orders

  • Defendants are jointly and severally liable under clause 5(1) of the Deed as guarantors for payment of preferential distributions to fourth and fifth plaintiffs.
  • Defendants are jointly and severally liable under clause 5(2) of the Deed to indemnify fourth and fifth plaintiffs for loss/damage from failure to ensure payment of IGM bank debt.