Case: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471
Outcome: followed
I accept that these authorities support the proposition that contemporaneously executed contracts forming part of the same transaction should, as a general rule, be read as a whole and construed by reference to each other: Star City Pty Limited v Commissioner of Taxation [2007] FCA 1701 at [52] . However, it would go well beyond any concept of contractual context to alter the terms of one contemporaneously executed contract by reference to another where, as here: (1) the parties to each contract are not the same; (2) the term in the contract in question is not ambiguous; and (3) the term in the other contract is directly conflicting. This is especially so where the result is to require an essential term, such as the duration of the contract, to be amended from the written terms of one contract to obtain consistency between the two contracts. To do so would disrupt the longstanding rule that parties are bound by the unambiguous terms of their written agreement unless it is affected by fraud, mistake or misrepresentation: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 , 483-84 [33] and [35]. The terms of the Nepalle Guarantee, including its duration, are not ambiguous. In the absence of such ambiguity, the written document stands on its own as a record of the agreement between the parties to it. 88 Westpac submitted that the 1995 Kirszbaum Guarantee secures all of Middleton Nominees' current liability to Westpac including any liability of Middleton Nominees as guarantor of the Advance debt. The Applicants disputed that the 1995 Kirszbaum Guarantee also secured the Advance debt on the ground that it could not be said that the Advance debt was of the same type or character as the original debt secured by the 1995 Kirszbaum Guarantee or that the Advance transaction documents refer back to the 1995 Kirszbaum Guarantee. In other words, the Applicants contended that it was not the intention of the parties for the Advance debt to be secured by the 1995 Kirszbaum Guarantee and the Kirszbaum Properties. For the following reasons, I reject that submission. Terms of the 1995 Kirszbaum Guarantee 89 The terms of the 1995 Kirszbaum Guarantee are important. First, there is no limit on the amount to be paid under it: cl 3. Secondly, cl 2 is headed "What is Covered by this Guarantee". It provides: This document relates to all money which [Middleton Nominees] may owe to [Westpac] now or in the future for any reason. This is the " Guaranteed Money ". ... At any time, the Guaranteed Money will also include the following. (a) money which [Middleton Nominees] contingently owes [Westpac] (money is "contingently" owed where the Customer has an obligation to pay [Westpac] if something happens or is discovered). ... (b) Money which [Middleton Nominees] may owe [Westpac] after that time of something happens or is discovered, even where there is no existing obligation to pay it, so long as it arises out of or in relation to circumstances existing, foreseeable or contemplated at the time. (c) Money which [Middleton Nominees] is or becomes liable to pay [Westpac] under another guarantee or indemnity. ... 90 Thirdly, Westpac was under no obligation to do anything in relation to, or to tell Mrs Kirszbaum anything concerning, Middelton Nominees' affairs, finances or transactions with Westpac. The responsibility rested with Mrs Kirszbaum both before and after the guarantee was signed: cl 12. Moreover, Mrs Kirszbaum was liable to pay all Guaranteed Money including under replacement or changed "Arrangements": cl 13. The term "Arrangement" was defined in cl 35 to mean: any document, agreement or dealing of any sort between [Westpac] and [Middleton Nominees] (whether or not with others) including where [Westpac] or [Middleton Nominees] becomes a party because of an assignment. Construction of the 1995 Kirszbaum Guarantee