Then, as I have earlier indicated, the word "Director" has been written next to the printed word "Title" underneath the signature of each person.
51 But in any event, there is nothing so explicit in the Promissory Note concerning a guarantee as was to be found in the factoring agreement in Clark Equipment. Indeed, the only reference to guarantors at all is the statement:
"The Issuer and all indorsers, sureties, and guarantors hereof, hereby jointly and severally waive presentment, demand for payment, notice of dishonour, notice of protest and protest, and all other notices or demands …" (emphasis added)
52 That certainly sounds as if the guarantee is contained within the document, or at least that the guarantors are themselves signing the document with the guarantor's obligations to be found elsewhere, but it seems to me that that statement provides no basis, even when the Promissory Note is read as a whole, (as Clark Equipment determines the proper test is) for reaching the view that Stevens and Wass have signed other than as Directors of AAR.
53 Some support for the Defendant's argument is to be found also in the judgment of Windeyer J in Equity Nominees Ltd v Tucker (1967) 116 CLR 518 at 526.
54 The Plaintiff relies also on a letter of 14 July 1999 (set out in para 37 above). However, that letter presents a number of problems. First, the letter is addressed to IAIL notwithstanding that the payee of the Promissory Note was IAINL. That may, however, be something which the Plaintiff can overcome by proof that the contract was with IAIL notwithstanding the identity of the payee of the Promissory Note.
55 Secondly and more significantly, the letter is signed by AAR. The key signatures of Wass and Stevens identify them as Directors and the letter has that company's name printed as the author of the letter and it is on its letterhead. I accept that the effect of Giles J's decision in Clark Equipment is that the view of Atkin LJ in Ariadne, that one looks simply to any qualification attached to the signature as the determining factor, does not represent the law, and it is necessary to construe the whole document. The part of the letter which impacts on the qualifications to the signatures is the statement "the guarantors again confirm their obligations". On one view, when taken as a whole, the letter might be taken to be an acceptance by the guarantors, who for that purpose one would have to presume were Wass and Stevens, that they had provided guarantees. On the other hand, the letter does not identify the guarantors and does not stipulate what the obligations are.
56 One is then driven back to paragraphs 24 and 25 of Mr Hannah's affidavit (para 38 of above) which must be taken as saying that when the First Promissory Note was signed in May 1999, there was a letter "in similar terms" to the letter of 14 July 1999 except it was dated May 1999.
57 Accepting that statement as being correct, that letter still leaves unanswered the question of who the guarantors were, what their obligations were, and indeed where there was a document of guarantee signed by these guarantors. It cannot have been the Promissory Note, whether the First or the Second, because no guarantee is contained within its terms. It cannot be the letter itself because in its terms it confirms obligations which must be found elsewhere.
58 In this regard, it is to be noted that a guarantee ought to be able to be identified in clear terms. Although the common law did not insist on writing the Statute of Frauds provided that no action could be brought upon a guarantee unless there was a note or memorandum in writing and signed by the party to be charged. However, in New South Wales the Imperial Acts Application Act 1969 s 8(1) had the effect of repealing the Statute of Frauds. Nevertheless, O'Donovan and Phillips, The Modern Contract of Guarantee, 3rd ed, (1996) LBC at 36 say:
"The guarantor's offer must be clear and definite… . Vague or equivocal statements will not suffice; they must be promissory and show an intention to be legally bound. Nor will a mere overture to provide a guarantee constitute an offer capable of acceptance. The central question is whether or not it is sufficiently clear from the documentation and surrounding circumstances that there is an intention to enter a legally binding obligation."
59 In a similar vein, the joint judgment in the High Court in Ankar Pty Limited v National Westminster Finance (Australia) Limited (1987) 162 CLR 549 at 561 said:
"At law, as in equity, the traditional view is that the liability of the surety is strictissimi juris and that ambiguous contractual provisions should be construed in favour of the surety. … A doubt as to the status of a provision in a guarantee should therefore be resolved in favour of the surety…"
60 If the evidence on this application was the totality of the evidence at the final hearing of the matter it is likely that the Plaintiff would be unsuccessful on the basis that it would have failed to show the Defendant entered into a guarantee of the Second Promissory Note. The matter is pleaded in terms that provides that the guarantee was contained in the Promissory Note, which it clearly is not and, in any event, on the state of the evidence on this application the Plaintiff does not identify a guarantee by the Defendant whether in writing or otherwise.
61 Nevertheless, I have come to the view, that it is inappropriate for that matter to be determined on an interlocutory application for summary dismissal. Despite the best efforts of the Defendant to flush out all of the evidence on which the Plaintiff would rely (the Amended Notice to Produce, the orders for Discovery, the requirement that the Plaintiff serve its witness statements) I am not persuaded that there may not be other evidence relevant to the existence of the guarantee. The person conducting the negotiations, apparently, on behalf of the alleged guarantors was Clarence Stevens and there is no evidence on this application from him. It is conceivable that evidence might be obtained from Mr Francken of conversations that he had which might throw some light on the existence or otherwise of a guarantee from the Defendant.
62 Neither Mr Hannah nor Mr Wass was cross-examined at the hearing of this application and the evidence that might emerge from such cross-examination might also throw light on the issue.
63 There is contemporaneous evidence suggesting that the Promissory Note may well have been guaranteed. The letter of 14 July is reasonably clear evidence of that although, I accept, that it does not identify who the guarantors are. An inference is certainly available, however, that because the confirmation of the guarantor's obligations is to be found in a letter signed by the Directors of AAR, those Directors might be the guarantors. Again, the appropriate inference seems to me to be a matter for the trial in the light of all other evidence that is given.
64 There is other contemporaneous evidence which suggests the belief on the part of the Plaintiff that the Defendant had given a guarantee (see the letter of 11 August 1999) although some other documents suggest, perhaps, that it was Stevens only and that the Defendant was not a guarantor (see, for example, letters of Paul Ward-Harvey & Co., Solicitors to Mr Hannah, of 3 May and 29 May 2002).
65 I have considerable sympathy for the position of the Defendant, particularly with the efforts it has made to require the Plaintiff to produce all its evidence to see if the case the Plaintiff brings is a viable one. There is no doubt that the Plaintiff has failed to comply with orders of the Court and, if the reason for disobedience with those orders is an inability to comply with them, there has been no explanation put forward by the Plaintiff to explain that inability. I shall return to this matter later in the judgment.
66 I decline to dismiss the proceedings on the basis that there is no reasonable prospect that a guarantee will be able to be proved.