RHEE FAMILY TRUST & ANOR V CHO & ANOR HC AK CIV 2006-404-1512

RHEE FAMILY TRUST & ANOR V CHO & ANOR HC AK CIV 2006-404-1512

The guarantee was a valid, operative and binding deed despite naming 'Rhee Family Trust' because the beneficiary was sufficiently identifiable by the document and extrinsic evidence; deed formalities meant no consideration was required; the operative clauses created both an independent principal guarantor obligation and a subsidiary obligation making time of the essence to 28 February 2006, and Dain's failure (including being struck off) triggered guarantor liability; accordingly summary judgment was appropriate and plaintiffs' quantified claim was proved.

Citation
openlaw-bb1802ef_5167_4864_87ba_51b17fa47a33.pdf
Parties
First Plaintiff: J Rhee as trustee of the Rhee Family Trust; Second Plaintiff: M Rhee as trustee of the Rhee Family Trust; First Defendant: JW Cho; Second Defendant: ES Cho
Court
High Court
Jurisdiction
New Zealand
Judgment Date
28 August 2006
Procedural Posture
Civil Contract/guarantee (construction) / Summary Judgment Hearing (high Court, Auckland)
Outcome
Summary judgment entered for plaintiffs against both defendants on the first cause of action for NZ$324,016.32; costs awarded to plaintiffs on a 2B basis plus disbursements as fixed by the Registrar.
Legal Topics
Summary Judgment, Consideration, Deeds, Identification of Parties, Independent Guarantee, Quantum of Damages, Contracts Enforcement Act 1956, Rectification, Procedural Estoppel/new Defences
Contract Guarantee Property Company Law Civil Procedure Remedies Summary Judgment Consideration +7 more

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Parties

J Rhee as trustee of the Rhee Family Trust

First Plaintiff

M Rhee as trustee of the Rhee Family Trust

Second Plaintiff

JW Cho

First Defendant

ES Cho

Second Defendant

Procedural Posture

Civil Contract/guarantee (construction) / Summary Judgment Hearing (high Court, Auckland)

Legal Issues

  1. 1 Whether a guarantee addressed to 'Rhee Family Trust' sufficiently identifies the beneficiary
  2. 2 Whether the document is only an agreement to enter into a guarantee or an operative guarantee
  3. 3 Whether consideration was required and if so whether it was present

Ratio Decidendi

The guarantee was a valid, operative and binding deed despite naming 'Rhee Family Trust' because the beneficiary was sufficiently identifiable by the document and extrinsic evidence; deed formalities meant no consideration was required; the operative clauses created both an independent principal guarantor obligation and a subsidiary obligation making time of the essence to 28 February 2006, and Dain's failure (including being struck off) triggered guarantor liability; accordingly summary judgment was appropriate and plaintiffs' quantified claim was proved.

Court Disposition

Summary judgment entered for plaintiffs against both defendants on the first cause of action for NZ$324,016.32; costs awarded to plaintiffs on a 2B basis plus disbursements as fixed by the Registrar.

Orders

  • Defendants to pay plaintiffs NZ$324,016.32 (comprising NZ$311,440.19 rectification/completion costs; NZ$3,440 accommodation; NZ$9,136.13 expert fees)
  • Defendants to pay plaintiffs' costs of and incidental to this application on a 2B basis plus disbursements as fixed by the Registrar (excluding expert fees awarded separately)