Permanent Trustee Co Ltd v Gulf Import and

[2008] VSC 162

Supreme Court of Victoria

Built by Barristers,
For Australian Law.

See how it works

Interrogate

Catchwords

1. Guarantee and Indemnity
2. › Construction of guarantee
3. › Clause precluding guarantor from raising defence, set-off or counterclaim while guaranteed money unpaid
4. › Whether clause prevents guarantor raising defence that principal debt not owing
5. › Whether clause has penal effect
1. Guarantee and Indemnity
2. › Proof of amount owing
3. › Certificate clauses
4. › Certificate as sufficient evidence unless proved false
5. › Whether certificate establishes both legal existence and amount of debt
1. Guarantee and Indemnity
2. › Indemnity clause
3. › Construction
4. › Whether indemnity operates where guaranteed money held never to have been owing
5. › Definition of 'Guaranteed Money'
1. Evidence
2. › Presumption of regularity
3. › Documents executed under power of attorney
4. › Whether presumption applies that power of attorney was current and authorised the act
5. › Failure to challenge in cross-examination

Quick Take

A clause in a guarantee precluding the guarantor from raising a defence, set-off or counterclaim while the guaranteed money remains unpaid prevents the guarantor from challenging the underlying debt on the basis that the creditor bank had knowledge of the debtor's fraudulent conduct. The guarantor's rights are suspended, not extinguished, and may be pursued after payment. A certificate clause providing that a certificate is 'sufficient evidence unless the matter or sum is proved to be false' establishes both the legal existence and the amount of the guaranteed debt. The presumption of regularity applies to powers of attorney under which certificates are executed, and the presumption is not displaced where the powers are not challenged in pleadings or cross-examination.