Westpac Banking Corporation v Linda Yuen Heung Chan; Irene Kit Ying Wong; Connie Fu Kuen Mo and Eric John Walsh [1991] ACTSC 12 (28 February 1991)

SUPREME COURT OF THE ACT

WESTPAC BANKING CORPORATION v. LINDA YUEN HEUNG CHAN; IRENE KIT YING WONG;
CONNIE FU KUEN MO and ERIC JOHN WALSH
S.C. No. 611 of 1990
Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Master Hogan(1)

CATCHWORDS

Practice and Procedure - Summary Judgment - Claim on Guarantee - Blanks in Guarantee when executed - Document not Read by Defendant - Completion by Plaintiff - Not Material Alteration - Not Void

HEARING

CANBERRA
28:2:1991

Counsel for the Plaintiff: Mr Richardson

Solicitors for the Plaintiff: Messrs Minter Ellison

Counsel for the Fourth Defendant: Mr Meagher

Solicitors for the Fourth Defendant: Messrs Gillespie Jones and Co.

ORDER

The plaintiff be granted liberty to enter judgment against the fourth defendant for the sum shown to be due and payable at the date of signing of the judgment.

DECISION

This is an application for leave to enter Summary Judgment against the fourth defendant in an action commenced by Writ against him and three other defendants.

2. So far as concerns him, the second amended Statement of Claim makes the following allegations:
1. Incorporation of the plaintiff Bank.

2. On or about 21 December 1984 the defendant guaranteed in
writing the payment to the plaintiff on demand of moneys
advanced to Carseland Holdings Pty. Limited.
3. On 8 November 1990 Carseland Holdings Pty. Limited was
indebted to the plaintiff in the sum of $251,293.70 with
further interest accruing at 21.499%.
4. At 8 November 1990 the moneys secured by the guarantee
amounted to $212,576.30.
5. It was a term of the guarantee that it was security for the
whole amount of the moneys secured, but that the total
payable under it should not exceed $120,000.00, plus one
year's interest on that sum, plus interest on those sums
from demand until payment.
6. It was a term of the guarantee that the rate of interest
should be, in the events which happened, such rates as the
plaintiff determined. The plaintiff had
determined the rates in respect of various periods as set
out in the Statment of Claim.
7. On 12 October 1988 the plaintiff demanded payment under the
guarantee.
8. The defendant failed to pay the money demanded.
9. The defendant owed the money payable under the guarantee.
10. At 8 November 1990 the money payable under the guarantee
was $212,576.30 with interest accruing at $83.75 per day.

3. The Statement of Claim was verified by the affidavit of a bank officer which exhibited the written guarantee signed by the defendant, proved the debt owing by the principal debtor, Carseland Holdings Pty. Limited, the fixing of the rates of interest, the making of the demand, the failure by the defendant to make any payment under the guarantee, and his belief that the defendant did not have any defence to the action.

4. The defendant relied upon an affidavit in which he deposed that he was at the time the guarantee was signed, a director of Carseland Holdings Pty. Limited, though not a shareholder. He was a director pending the arrival in Australia of a relative of one of the other defendants.

5. He was informed by the first defendant that the plaintiff bank required a guarantee from the directors. He alleges that she told him that $120,000.00 was being borrowed, and that his share was a quarter of that sum.

6. His affidavit then reads:

"On or about 21st December 1984 I signed the 6th page of a
form of guarantee with Westpac Banking Corporation. The
document was executed on the second last business day
prior to Christmas, 1984. I was in a hurry to get away
from Canberra and did not read the document. I did not
initial the spaces on the first and third pages where
there are provisions that require completion. So far as I
am aware the guarantee was incomplete when I signed it. I
assumed that the guarantee would contain the terms advised
to me by Linda Chan and trusted the bank to complete the
guarantee in accordance with those terms."

7. Counsel for the defendant did not rely upon these facts as raising a plea of non est factum. The facts would not seem to bring the case with the doctrine enunciated by the High Court in Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355. See also Chitty on Contracts 26th Ed. paras 365-367, although the last paragraph of para 367 is not a strictly accurate statement of the effect of that case.

8. The defendant's submission is that a triable issue arises on the evidence whether the guarantee was altered in a material particular after the defendant had executed it and without his knowledge or consent. See Chitty op. cit. paras 1753 and 5059.

9. This doctrine would most obviously apply if the guarantee document on its face bore some mark of alteration, so as for example, to increase the defendant's liability from one quarter of the principal debt to the whole of it.

10. But that is not the evidence. What is pointed to is not an alteration of anything that was there when the defendant signed the document. He claims that he did not initial the spaces on the first and third pages. They now contain typing setting out his name address and occupation (on page 1) and the amount of "one hundred and twenty thousand dollars Australian currency" on page 3. His own evidence is that so far as he was aware the gurantee was incomplete when he signed it, and he trusted the Bank to complete it in accordance with the terms that he had been told about by the first defendant.

11. There is no evidence that the plaintiff was aware that the first defendant had informed him that his liability was restricted to one quarter of the principal debt.

12. Nor is there any alteration which relates to the liability for the whole of the moneys secured.

13. Clause 8 of the printed document, on page 3, sets out, unaltered, "That this guarantee is to be security for the whole of the moneys hereby secured". It then proceeds to the part which in the defendant's contention was filled in after he signed it, as follows:

"..but nevertheless the total moneys payable hereunder by
the guarantor shall not exceed the amount of one hundred
and twenty thousand dollars Australian currency."

It is clear to my mind that there has not been a material alteration without knowledge or consent.

14. There is an arguable case that the Bank filled in the limitation of liability after the defendant signed the document. But since, on his own evidence, that is what he trusted the Bank to do, and expected it to do, it was not making a material alteration without his consent when it did so.

15. There is no evidence that the Bank ever held out to him that he was to be liable for any lesser amount than that provided for in the document, or that it was aware of anything that the first defendant might have told him.

16. In my opinion the evidence does not disclose a triable issue which raises a defence to the action.

17. I grant liberty to the plaintiff to enter judgment against the fourth defendant for the sum shown to be due and payable at the date of signing of the judgment.