Permanent Custodians Ltd v AGB Developments Pty Ltd [2010] NSWSC 540

Permanent Custodians Ltd v AGB Developments Pty Ltd [2010] NSWSC 540

The guarantors produced no admissible or probative evidence showing an arguable sale at an undervalue; the proposed s 420A and negligence-based causes of action were misconceived; the alleged implied terms were not necessary, obvious, clearly expressed or consistent with the existing duties and guarantee; and clauses 2.2, 2.5 and 6.6 of the guarantee required payment without set-off and postponed any claim against the Plaintiff until payment. The Plaintiff was therefore entitled to judgment against the Second Defendant without a stay, while judgment against the bankrupt Third Defendant required leave.

Jurisdiction
Australia
Judgment Date
01 June 2010
Procedural Posture
Possession Proceedings and Application to Enter Consent Judgment Against Guarantors / Principal Judgment on Resistance to Entry of Consent Judgment, Proposed Cross Claim and Stay
Outcome
Judgment entered for the Plaintiff against the Second Defendant; no stay of execution; leave would be required before judgment could be entered against the Third Defendant because he had become bankrupt.
Legal Topics
['rights of Surety Against Creditor' "mortgagee's Exercise of Power of Sale" 'alleged Sale at Undervalue' 'implied Terms' 's 420 a Corporations Act 2001 (cth)' "set Off and Suspension of Guarantors' Rights" 'hearsay Evidence in Interlocutory Proceedings' 'bankruptcy Stay on Proceedings']
['guarantee and Indemnity' 'mortgages' 'corporations' 'bankruptcy' 'evidence' 'civil Procedure'] ['rights of Surety Against Creditor' "mortgagee's Exercise of Power of Sale" 'alleged Sale at Undervalue' 'implied Terms' 's 420 a Corporations Act 2001 (cth)' "set Off and Suspension of Guarantors' Rights" 'hearsay Evidence in Interlocutory Proceedings' 'bankruptcy Stay on Proceedings']

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Procedural Posture

Possession Proceedings and Application to Enter Consent Judgment Against Guarantors / Principal Judgment on Resistance to Entry of Consent Judgment, Proposed Cross Claim and Stay

Legal Issues

  1. 1 ['Whether there was an arguable case that the mortgaged property was sold at an undervalue in breach of duties owed by the Plaintiff.' 'Whether the Second and Third Defendants should be permitted to prevent entry of consent judgment and file a cross-claim based on implied terms in the 26 August 2009 agreement.' 'Whether s 420A Corporations Act 2001 (Cth) conferred a damages remedy on guarantors.' 'Whether execution of judgment should be stayed to allow the guarantors to bring fresh proceedings.' 'Whether bankruptcy of the Third Defendant prevented entry of judgment against him without leave.']

Ratio Decidendi

The guarantors produced no admissible or probative evidence showing an arguable sale at an undervalue; the proposed s 420A and negligence-based causes of action were misconceived; the alleged implied terms were not necessary, obvious, clearly expressed or consistent with the existing duties and guarantee; and clauses 2.2, 2.5 and 6.6 of the guarantee required payment without set-off and postponed any claim against the Plaintiff until payment. The Plaintiff was therefore entitled to judgment against the Second Defendant without a stay, while judgment against the bankrupt Third Defendant required leave.

Court Disposition

Judgment entered for the Plaintiff against the Second Defendant; no stay of execution; leave would be required before judgment could be entered against the Third Defendant because he had become bankrupt.

Orders

  • ['Judgment for the Plaintiff against the Second Defendant in the amount of $705,093.97.' "The Second Defendant is to pay the Plaintiff's costs of this application and the costs associated with the obtaining of judgment."]