Brown, Malcolm Kenneth v Jago, Raymond Frederick [1983] FCA 282

Brown, Malcolm Kenneth v Jago, Raymond Frederick [1983] FCA 282

The uncontroverted evidence showed that, when the bankrupt signed the guarantee, the mutual intention of the applicant and the bankrupt was that the bankrupt would guarantee the debt jointly and severally with Mr Gartside only, after Mr Gartside had already executed his guarantee, and that clause 1 failed by common mistake to reflect that bargain. The evidence would sustain rectification of the guarantee, and it was not disputed that the proof of debt could then be considered on the footing that the guarantee had been rectified. Accordingly, the decision rejecting the proof of debt was reversed and the claim admitted.

Jurisdiction
Australia
Judgment Date
12 October 1983
Procedural Posture
Bankruptcy Application to Reverse Rejection of Proof of Debt / Application Determined and Orders Made
Outcome
Application granted; time extended, rejection of proof of debt reversed, and claim admitted against the bankrupt estate.
Legal Topics
['proof of Debt' 'guarantee Liability' 'rectification' 'conditions Precedent' 'extension of Time' 'costs']
['bankruptcy' 'guarantees' 'equity'] ['proof of Debt' 'guarantee Liability' 'rectification' 'conditions Precedent' 'extension of Time' 'costs']

Case Brief

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Procedural Posture

Bankruptcy Application to Reverse Rejection of Proof of Debt / Application Determined and Orders Made

Legal Issues

  1. 1 ["Whether the decision rejecting Raymond Frederick Jago's proof of debt against Malcolm Kenneth Brown's bankrupt estate should be reversed." 'Whether the guarantee signed by the bankrupt should be treated as rectified so that the bankrupt was liable notwithstanding that another director, Jan Rubertus Cornelus Eimberts, did not sign a guarantee.' 'Whether time for making the application should be extended.']

Ratio Decidendi

The uncontroverted evidence showed that, when the bankrupt signed the guarantee, the mutual intention of the applicant and the bankrupt was that the bankrupt would guarantee the debt jointly and severally with Mr Gartside only, after Mr Gartside had already executed his guarantee, and that clause 1 failed by common mistake to reflect that bargain. The evidence would sustain rectification of the guarantee, and it was not disputed that the proof of debt could then be considered on the footing that the guarantee had been rectified. Accordingly, the decision rejecting the proof of debt was reversed and the claim admitted.

Court Disposition

Application granted; time extended, rejection of proof of debt reversed, and claim admitted against the bankrupt estate.

Orders

  • ['Time for the making of the application extended to 5 July 1983.' 'Decision of the Official Receiver in Bankruptcy dated 25 February 1982 rejecting the claim of Raymond Frederick Jago against the bankrupt estate of Malcolm Kenneth Brown be reversed.' 'The claim be admitted against the said estate.' 'The applicant...