Cai v Tsang (No 2) [2018] NSWSC 1860

Procedural Posture

Common Law Action for Recovery Under a Loan Agreement and Deed of Guarantee and Indemnity / Principal Judgment After Hearing

Legal Issues

1. 1 ["Whether the procurement of unregistered mortgages over properties owned by the defendant's wife and daughter-in-law was a condition precedent to the defendant's liability under his personal guarantee." 'Whether Jessica Zhao and Chun Xiang Zeng were intended co-guarantors such that non-signature or failure to provide mortgage security relieved the defendant of liability.' 'Whether equitable principles made it unconscionable for the plaintiff to enforce the guarantee because third-party mortgage security was not provided.' 'Whether relief was available under s 7 of the Contracts Review Act 1980 (NSW).' 'Whether the plaintiff was precluded by a prevention principle from enforcing the Loan Agreement because he did not cause the company to procure the mortgage securities while recorded as a director.']

Ratio Decidendi

On its proper construction, the Loan Agreement made the defendant the only guarantor bound forthwith and imposed on the company only an obligation to procure third-party unregistered mortgages. Clause 14 expressly contemplated failure to procure the mortgages without making that failure a default discharging the defendant, and cl 20.4 excluded reliance on the plaintiff's failure to obtain performance of the company's obligation. The agreement was not in a form requiring Jessica Zhao or Chun Xiang Zeng to execute as co-guarantors, no express or implied condition precedent to the defendant's liability was established, and the defendant proved no expectation known to the plaintiff that would...

Court Disposition

Judgment for the plaintiff against the defendant for $4,289,593.60, with costs.

Orders

• ['Judgment for the plaintiff against the defendant in the sum of $4,289,593.60.' "The defendant is to pay the plaintiff's costs of the proceedings."]