Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649

Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649

The second defendant was liable as guarantor because the Deed of Loan was binding on him as a deed and, if necessary, was supported by sufficient consideration as a contract of guarantee; the 2007 Deed of Variation affirmed rather than discharged the guarantee; properly construed, the guarantee covered Seabreeze's obligations to repay principal, interest and the $500,000 Additional Moneys; no demand was required before liability arose; and enforcement was not unjust or unconscionable. However, the plaintiff had not proved the precise amount outstanding, so the quantum was referred to an Associate Justice.

Jurisdiction
Australia
Judgment Date
18 June 2010
Procedural Posture
Commercial List Proceeding for Recovery Under a Guarantee in a Deed of Loan / Final Judgment on the Plaintiff's Claim Against the Second Defendant; Default Judgment Had Previously Been Entered Against the First, Third and Fourth Defendants
Outcome
Declaration made that the guarantee under the Deed of Loan is enforceable by the plaintiff against the second defendant; matter referred to an Associate Justice to determine the amount payable under the guarantee.
Legal Topics
['deeds and Execution' 'loan and Guarantee' 'consideration for Guarantee' 'construction of Guarantee' 'contracts Review Act 1980 (nsw)' 'quantum of Debt']
['equity' 'commercial Law' 'contract Law'] ['deeds and Execution' 'loan and Guarantee' 'consideration for Guarantee' 'construction of Guarantee' 'contracts Review Act 1980 (nsw)' 'quantum of Debt']

Case Brief

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Procedural Posture

Commercial List Proceeding for Recovery Under a Guarantee in a Deed of Loan / Final Judgment on the Plaintiff's Claim Against the Second Defendant; Default Judgment Had Previously Been Entered Against the First, Third and Fourth Defendants

Legal Issues

  1. 1 ['Whether the Deed of Loan was binding or enforceable despite the plaintiff not properly reading it and the absence of a produced copy signed by him' 'Whether the document was enforceable as a deed or, alternatively, as a contract supported by consideration' 'Whether the 2007 Deed of Variation affirmed the 2005 Deed of Loan or discharged the guarantee' 'Whether the guarantee extended to repayment of principal, interest and the Additional Moneys' 'Whether notice or demand was a condition precedent to liability under the guarantee' 'Whether enforcement of the guarantee was unjust or unconscionable under the Contracts Review Act 1980 (NSW)' 'Whether the plaintiff had proved the amount outstanding under the loan and guarantee']

Ratio Decidendi

The second defendant was liable as guarantor because the Deed of Loan was binding on him as a deed and, if necessary, was supported by sufficient consideration as a contract of guarantee; the 2007 Deed of Variation affirmed rather than discharged the guarantee; properly construed, the guarantee covered Seabreeze's obligations to repay principal, interest and the $500,000 Additional Moneys; no demand was required before liability arose; and enforcement was not unjust or unconscionable. However, the plaintiff had not proved the precise amount outstanding, so the quantum was referred to an Associate Justice.

Court Disposition

Declaration made that the guarantee under the Deed of Loan is enforceable by the plaintiff against the second defendant; matter referred to an Associate Justice to determine the amount payable under the guarantee.

Orders

  • ['Declare that Mr Beshara is liable as guarantor to Mr Matouk for such amount as is presently outstanding by way of principal and interest on the sum of $800,000 lent to The Entrance Seabreeze Pty Limited on or about 23 November 2005, such interest to be calculated in accordance with the Deed of Loan of that date,...