Terence Lane-Mullins v Warrenby Pty Limited & Ors [2004] NSWSC 817

Terence Lane-Mullins v Warrenby Pty Limited & Ors [2004] NSWSC 817

The guarantee, on its true construction, imposed an unconditional obligation on the Bank to pay the Vendors on first written demand and an unconditional entitlement to discharge the guarantee at any time. The preamble did not make that obligation conditional on any particular contract or import the contracts dated 30 December 2002. The Plaintiff was not a party to those contracts, had no legal or equitable right under them, could not invoke an exception to privity or to the autonomy principle, and had no claim in unjust enrichment or under Conveyancing Act 1919 (NSW) s 55(2A). The pleaded claims were therefore so clearly untenable that they could not possibly succeed.

Jurisdiction
Australia
Judgment Date
07 September 2004
Procedural Posture
Notice of Motion for Summary Dismissal of Claims for Declaratory Relief, Alternatively Security for Costs / Determination of the Vendors' Application Under SCR Pt 13, R 5 to Dismiss the Plaintiff's Fourth Amended Summons
Outcome
The Vendors' application for summary dismissal succeeded; the Plaintiff's claims in the fourth amended summons were held to be clearly untenable.
Legal Topics
['on Demand Bank Guarantee' 'construction of Guarantee' 'principle of Autonomy' 'privity of Contract' 'unjust Enrichment' 'return of Deposit Under Conveyancing Act 1919 (nsw) S 55(2 A)' 'summary Dismissal']
['contract Law' 'banking and Finance' 'property Law' 'equity' 'civil Procedure'] ['on Demand Bank Guarantee' 'construction of Guarantee' 'principle of Autonomy' 'privity of Contract' 'unjust Enrichment' 'return of Deposit Under Conveyancing Act 1919 (nsw) S 55(2 A)' 'summary Dismissal']

Case Brief

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Procedural Posture

Notice of Motion for Summary Dismissal of Claims for Declaratory Relief, Alternatively Security for Costs / Determination of the Vendors' Application Under SCR Pt 13, R 5 to Dismiss the Plaintiff's Fourth Amended Summons

Legal Issues

  1. 1 ['Whether the HSBC Bank Australia Limited guarantee was conditional on the existence of a contract for sale and purchase of the whole property between the Vendors and the purchasers named in the guarantee.' "Whether the Vendors' entitlement to demand payment under the on-demand guarantee was affected by the underlying contracts for sale of the lots to City Smart Investments Pty Limited." 'Whether the Plaintiff, not being a party to the contracts dated 30 December 2002, had standing or any exception to privity of contract to rely on those contracts against the Vendors.' "Whether payment to the Vendors under the guarantee would constitute unjust enrichment at the Plaintiff's expense." 'Whether the Plaintiff could obtain repayment of the deposit under Conveyancing Act 1919 (NSW) s 55(2A) or equitable principle.' "Whether the Plaintiff's claims were so clearly untenable that they could not possibly succeed."]

Ratio Decidendi

The guarantee, on its true construction, imposed an unconditional obligation on the Bank to pay the Vendors on first written demand and an unconditional entitlement to discharge the guarantee at any time. The preamble did not make that obligation conditional on any particular contract or import the contracts dated 30 December 2002. The Plaintiff was not a party to those contracts, had no legal or equitable right under them, could not invoke an exception to privity or to the autonomy principle, and had no claim in unjust enrichment or under Conveyancing Act 1919 (NSW) s 55(2A). The pleaded claims were therefore so clearly untenable that they could not possibly succeed.

Court Disposition

The Vendors' application for summary dismissal succeeded; the Plaintiff's claims in the fourth amended summons were held to be clearly untenable.

Orders

  • ['The Vendors are entitled to an order under SCR Pt 13, r 5 that the proceedings be dismissed.' 'The Vendors are directed to bring in short minutes.' 'The parties are to have an opportunity to address the Court in relation to costs.' 'Arrangements should be made with the Associate by 17 September 2004 for the...