Pugwall Pty Ltd v Arthur McKenzie Investments Pty Ltd

[2022] VSCA 272

Victorian Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Guarantee
3. › Personal liability of director
4. › Whether director personally bound by guarantee embedded in agreement
5. › Objective intention to be bound
6. › Significance of signing only as director
7. › Whether qualification attached to signature prevails over contrary indicia in document and surrounding circumstances
1. Contract
2. › Guarantee
3. › Statute of Frauds
4. › Whether guarantee enforceable under writing requirement
5. › Whether capacity in which person signs document relevant to satisfaction of s 126
6. › Instruments Act 1958 (Vic), s 126

Quick Take

A director who signs a joint venture agreement or similar commercial document only in their capacity as director may nonetheless be personally bound by a guarantee embedded in that document, where the body of the document names the director as guarantor, defines them as a party for notice purposes, and imposes personal obligations on them. The capacity in which a person signs a document is irrelevant to whether the document satisfies the writing requirement under s 126 of the Instruments Act 1958 (Vic). The existence of further correspondence or conversations about a personal guarantee is not a prerequisite for personal liability.