Background
THN Capital Funding Pty Ltd and THN Capital Solutions Pty Ltd sought to enforce a 2023 deed of irrevocable authority under which Jonathan Leffler and Goran Lovrinov jointly and severally guaranteed up to $16 million owed by Total Lifestyle Windows Pty Ltd. The authority contemplated payment from proceeds of a proposed sale of gold doré bars, while the companies agreed to defer enforcement action against the debtor.
The defendants contended that their payment obligation was contingent on completion of the gold sale. Mr Lovrinov also denied signing the authority. Mr Leffler, who appeared without counsel, later sought to reopen the case, amend his defence, join additional parties and obtain subpoenas.
The Court’s Holding
Schmidt AJ held that both defendants were bound by the authority. Contemporaneous communications and execution evidence established that Mr Lovrinov had signed it, and the companies had provided consideration by forbearing from enforcement.
The Court rejected the proposed implied term making the guarantees conditional on the gold sale. The authority expressly guaranteed the debt and permitted immediate demand if it was unpaid by 15 September 2023; it did not make sale of the gold a condition precedent. The proposed term contradicted the written bargain and failed the requirements for implication. The Court found the $16 million had not been paid and that the companies were entitled to judgment for that sum plus interest at the court rate from 6 October 2023. Mr Leffler’s late motion was dismissed.
Key Takeaways
- A guarantee will be enforced according to its express terms where a proposed implied term contradicts the written arrangement.
- References to an anticipated source of payment do not necessarily make the guarantor’s liability conditional on that source being realised.
- Self-represented parties must use available procedural opportunities; late efforts to reopen a concluded hearing may be refused.
Why It Matters
The decision illustrates the distinction between a contractual promise to pay and an anticipated mechanism for funding that payment. Commercial guarantors cannot avoid clear, unconditional liability merely because the expected asset sale or transaction does not occur.
The Court directed the parties to file proposed final orders, including costs, within 14 days.