Csr Building Products (nz) Limited Trading As Csr Bradford Insulation Nz v Roderick James Mcaneaney HC Auckland CIV-2008-404-3596, 11 May 2009
- Court
- High Court
- Judgment
- 11 May 2009
Areas of law
Judgment analysis
AI-generated summary
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Facts
On 27 November 2006, CSR agreed to supply insulation products to AIS Insulation Limited (AIS) on credit. Mr. McAneaney, the managing director of AIS, signed a credit application on behalf of AIS. He also signed a separate guarantee document. The guarantee form explicitly named 'RODERICK JAMES McANEANEY' as the Guarantor (Item A) and 'AIS INSULATION LTD' as the Debtor (Item B). However, the form had two separate signature boxes: one 'If the Guarantor is a Company' and another 'If the Guarantor is an individual'. Mr. McAneaney signed in the box designated for a company guarantor. AIS failed to pay for supplies from August to November 2007, totalling $428,651.47, and was placed into liquidation on 3 December 2007. CSR demanded payment from Mr. McAneaney under the guarantee. He refused to pay, claiming he did not intend to assume personal liability and that the guarantee was unenforceable due to the placement of his signature. CSR applied for summary judgment.
Held
- Where a guarantee document clearly identifies an individual as the guarantor and their company as the debtor, the individual's signature in a space designated for a corporate guarantor is an inconsequential error that does not displace the objective intention, apparent from the document as a whole, that the individual is to be personally bound.
- A signature on a written guarantee satisfies the requirement of being 'signed by the guarantor' under s 27 of the Property Law Act 2007 even if placed in an incorrect section of the form, provided the objective intention to be bound as guarantor is clear.
Orders
Summary judgment is granted for the plaintiff, CSR, in the sum of $480,903.32, plus interest at the rate of 24% per annum from 15 May 2008 to the date of judgment. Costs awarded to CSR on a 2B basis, plus disbursements.
Key passages5
A signatory to a commercial document is generally to be taken to have known what its contents say and to be bound by it.
“A signatory to a commercial document is generally to be taken to have known what its contents say and to be bound by it;”
The approach to ascertaining intention or meaning in a contract is objective, based on what the document would convey to a reasonable person with the parties' background knowledge.
“Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were in at the time of the contract.”
In some summary judgment cases, a robust and realistic approach is warranted.
“This is one of those cases where a robust and realistic approach is warranted: see Krukziener v Hanover Finance Ltd (2008) 19PRNZ 162.”
In the context of summary judgment, 'no defence' means the absence of any real question to be tried, or no bona fide, reasonable, or fairly arguable defence.
“In this context the words 'no defence' have reference to the absence of any real question to be tried. That notion has been expressed in a variety of ways, as for example, no bona fide defence, no reasonable ground of defence, no fairly arguable defence.”
In a summary judgment application, the defendant needs to provide some evidential foundation for the defences which are raised.
“Although the onus is upon the plaintiff there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not, the plaintiff's verification stands unchallenged and ought to be accepted unless it is patently wrong.”
Cases mentioned in judgment
Legislation mentioned
- Property Law Act 2007, s 27
- High Court Rules, Rule 11.5, Rule 12.2