Scott v Forster Pastoral Co Pty Ltd & Ors [2000] NSWCA 241

Scott v Forster Pastoral Co Pty Ltd & Ors [2000] NSWCA 241

The guarantee by the appellant was given specifically in exchange for performance by Mr Aiken of voting in favour of certain resolutions as required by the financier. Mr Aiken voted against a relevant resolution, so the consideration failed. Accordingly, the appellant was discharged from liability under the guarantee, irrespective of any effect on his interests or requirement to elect to be discharged; no estoppel arose against the appellant.

Parties
Appellant: Walter Robert Scott; Respondents: Forster Pastoral Co Pty Ltd & Ors
Jurisdiction
Australia
Judgment Date
31 August 2000
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed. Trial verdict and judgment for respondents set aside. Verdict and judgment entered for appellant. Respondents to pay costs at trial and on appeal, subject to certificate under the Suitors Fund Act if qualified.
Legal Topics
Guarantee—discharge for Failure of Consideration, Conditions Precedent in Contracts of Suretyship, Requirements for Estoppel in Enforcement of Guarantees
Contract Law Guarantees & Indemnities Guarantee—discharge for Failure of Consideration Conditions Precedent in Contracts of Suretyship Requirements for Estoppel in Enforcement of Guarantees

Case Brief

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Parties

Walter Robert Scott

Appellant

Forster Pastoral Co Pty Ltd & Ors

Respondents

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether the appellant was discharged from his obligations as guarantor due to the creditor's failure to vote in favour of specified resolutions as consideration for the guarantee
  2. 2 Whether voting against the resolution constituted failure of consideration under the guarantee
  3. 3 Whether the conduct of the appellant constituted affirmation or estoppel against relying on discharge

Ratio Decidendi

The guarantee by the appellant was given specifically in exchange for performance by Mr Aiken of voting in favour of certain resolutions as required by the financier. Mr Aiken voted against a relevant resolution, so the consideration failed. Accordingly, the appellant was discharged from liability under the guarantee, irrespective of any effect on his interests or requirement to elect to be discharged; no estoppel arose against the appellant.

Court Disposition

Appeal allowed. Trial verdict and judgment for respondents set aside. Verdict and judgment entered for appellant. Respondents to pay costs at trial and on appeal, subject to certificate under the Suitors Fund Act if qualified.

Orders

  • Appeal upheld
  • Verdict and judgment for respondents and order for costs below set aside