Hume Plasterboard Pty Limited v Brilliant Interiors Pty Limited [2019] NSWSC 679

Hume Plasterboard Pty Limited v Brilliant Interiors Pty Limited [2019] NSWSC 679

Ms Sun did not understand the nature and effect of the guarantee; she received no financial benefit from executing it and was a volunteer. Hume believed Ms Sun was Mr Suntsov's wife and took no steps to explain the guarantee or ensure independent advice. On the facts, the guarantee is void and unenforceable as per the Garcia principle and the incorporated law under s 20 and/or s 21 of the ACL.

Parties
Plaintiff: Hume Plasterboard Pty Limited; First Defendant: Brilliant Interiors Pty Limited; Second Defendant: Genade Suntsov; Third Defendant and Cross Claimant: Xiaojuan Sun
Jurisdiction
Australia
Judgment Date
11 June 2019
Procedural Posture
Principal Judgment / Judgment After Trial
Outcome
Guarantee executed by Ms Sun declared void and unenforceable; judgment entered in favour of Ms Sun; costs awarded to Ms Sun.
Legal Topics
Guarantees, Unconscionable Conduct, Suretyship, Volunteers, Credit Arrangements
Contract Equity Consumer Law Guarantees Unconscionable Conduct Suretyship Volunteers Credit Arrangements

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Parties

Hume Plasterboard Pty Limited

Plaintiff

Brilliant Interiors Pty Limited

First Defendant

Genade Suntsov

Second Defendant

Xiaojuan Sun

Third Defendant and Cross Claimant

Procedural Posture

Principal Judgment / Judgment After Trial

Legal Issues

  1. 1 Whether the guarantee signed by Ms Sun is enforceable against her
  2. 2 Whether the guarantee was obtained by unconscionable conduct under the Australian Consumer Law
  3. 3 Whether Ms Sun was a volunteer lacking understanding of the guarantee's effect

Ratio Decidendi

Ms Sun did not understand the nature and effect of the guarantee; she received no financial benefit from executing it and was a volunteer. Hume believed Ms Sun was Mr Suntsov's wife and took no steps to explain the guarantee or ensure independent advice. On the facts, the guarantee is void and unenforceable as per the Garcia principle and the incorporated law under s 20 and/or s 21 of the ACL.

Court Disposition

Guarantee executed by Ms Sun declared void and unenforceable; judgment entered in favour of Ms Sun; costs awarded to Ms Sun.

Orders

  • A declaration that the guarantee executed by Ms Sun on 30 May 2016 is void and unenforceable as against Ms Sun.
  • Judgment entered in favour of Ms Sun.