Smith v Skinner [2018] NSWDC 197

Smith v Skinner [2018] NSWDC 197

Although the plaintiff satisfied r 13.1(1)(a) and r 13.1(1)(b), summary judgment was refused because the meaning and effect of cl 6.1(ii) of the guarantee raised a real question of law. The clause was not free of difficulty, the plaintiff's construction had extreme consequences, and the construction issue arose in a factual context better determined at trial. It was therefore inappropriate to decide on summary judgment whether the guarantee prevented the defendant from relying on a set-off or defence available to FMS.

Jurisdiction
Australia
Judgment Date
19 July 2018
Procedural Posture
Civil; Application for Summary Judgment / Reserved Judgment on the Balance of the Plaintiff's Motion After Orders Concerning Particulars Were Made on 13 July 2018
Outcome
Apart from the orders made on 13 July 2018, the plaintiff's Motion was dismissed and the costs of the Motion were ordered to be costs in the cause.
Legal Topics
['summary Judgment Under R 13.1' 'evidence of Facts on Which Claim Is Based' 'responsible Person Giving Evidence of Belief That There Is No Defence' 'construction of Guarantee and Indemnity' 'set Off or Counterclaim Available to Principal Debtor' 'real Question of Law to Be Tried']
['civil Procedure' 'guarantee' 'contract Law'] ['summary Judgment Under R 13.1' 'evidence of Facts on Which Claim Is Based' 'responsible Person Giving Evidence of Belief That There Is No Defence' 'construction of Guarantee and Indemnity' 'set Off or Counterclaim Available to Principal Debtor' 'real Question of Law to Be Tried']

Case Brief

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Procedural Posture

Civil; Application for Summary Judgment / Reserved Judgment on the Balance of the Plaintiff's Motion After Orders Concerning Particulars Were Made on 13 July 2018

Legal Issues

  1. 1 ["Whether there was evidence of the facts on which the plaintiff's claim for unpaid Ongoing Royalty payments was based." "Whether the plaintiff's solicitor was a responsible person within r 13.1(1)(b) who could give evidence of a belief that the defendant had no defence." 'Whether reliance on cl 6.1(ii) of the guarantee failed because it had not been pleaded in the Statement of Claim.' 'Whether cl 6.1(ii) was wide enough to prevent the defendant guarantor from raising a set-off or counterclaim that would have been available to FMS, the principal debtor.' 'Whether the construction of the guarantee raised a real question of law such that summary judgment should not be granted.']

Ratio Decidendi

Although the plaintiff satisfied r 13.1(1)(a) and r 13.1(1)(b), summary judgment was refused because the meaning and effect of cl 6.1(ii) of the guarantee raised a real question of law. The clause was not free of difficulty, the plaintiff's construction had extreme consequences, and the construction issue arose in a factual context better determined at trial. It was therefore inappropriate to decide on summary judgment whether the guarantee prevented the defendant from relying on a set-off or defence available to FMS.

Court Disposition

Apart from the orders made on 13 July 2018, the plaintiff's Motion was dismissed and the costs of the Motion were ordered to be costs in the cause.

Orders

  • ["Apart from the orders made on 13 July 2018, the plaintiff's Motion is dismissed." 'Order that the costs of the Motion be costs in the cause.']