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\f36\fs24\lang1033\langfe5129\cgrid\langnp1033\langfenp5129 {\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 IN THE HIGH COURT OF FIJI
\par At Suva
\par Civil Jurisdiction
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par CIVIL ACTION NO. 0055 OF 1995
\par 
\par Between:
\par 
\par }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 FIJI DEVELOPMENT BANK
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Plaintiff
\par 
\par - and -
\par 
\par }{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 1. }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 INOKE MOTO
\par }{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 2. }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 KERESONI RARAWA
\par 3.}{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841  }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 SISIANA MATE
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Defendants
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par Mr. V. Kapadia for the Plaintiff
\par Ms. V. Narayan for the 2nd and 3rd Defendants
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 JUDGMENT
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 This is an application for summary judgem}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 e}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 nt under }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Order 14}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  of the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 High Court Rules}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  seeking the payment of monies allegedly owed in terms of a }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Deed of Guarantee}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  given by the second and third defendants securing the indebtedness to the plaintiff bank of a company called }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Matowa Shipping Services Ltd.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , of which the defendants are directors and majority shareholders.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The remaining director/shareholder }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Inoke Moto}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 is also named as the {\*\bkmkstart QuickMark}{\*\bkmkend QuickMark}first defendant in the action however in the ab
sence of a notice to defend, default judgment was entered against him by the plaintiff bank and he is accordingly not an active party in the present application.
\par 
\par The facts of the case are not in serious dispute and may be briefly summarised as follows}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 : }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Th
e three named defendants are the directors and shareholders of }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Matowa Shipping Services Ltd.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 March 1992}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  the company obtained a loan of }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 $100,000}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  from the plaintiff bank in order to purchase a shipping vessel.}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The loan was secured by a debenture, bills of
 sale, and personal guarantees of the defendants as shareholders and directors of the company.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Default was made by the company in meeting its monthly loan repayments and this was exacerbated by the loss of the vessel when it sank off }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lakeba}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lau Group }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 on the }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 7th of June 1993}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 A marine insurance hull claim against the ship's insurers was subsequently declined in }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 January 1994}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 By a }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Demand Notice}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  dated }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 4th November 1994}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  the plaintiff bank sought payment from the defendant under their personal guarantees.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par On the face of it this was a fairly straight forward transaction of a fairly common kind whereby on a standard form the directors of a small private company guaranteed the company's indebtedness to its bank.}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The defendants have each sworn an affidavit i
n opposition to the application which their counsel claims raises complicated questions of law and triable issues of fact.
\par 
\par However, before dealing in detail with the various issues raised in the defendant's affidavits it is convenient to consider the proper approach to an application for summary judgment under }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Order 14}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  the purpose of which }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"... is to enable a plaintiff to obtain a quick judgment where is plainly no defence to his claim."}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (}{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Home and Overseas Insurance Co. v. Mentor Insurance Co. (U.K.) Ltd}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (1989) 3 ALL E.R. 74.)
\par 
\par The correct approach to an application for summary judgment is succinctly summarised in my view in the headnote to the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 New Zealand Court of Appeal}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  decision in }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Pemberton v. Chappell}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1987) 1 N.Z.L.R.}{\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 1}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  where it was said of the N.Z. equivalent of }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Order 14}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Held}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 ... the High Court Rules casts onto the plaintiff the onus of convincing the Court that the defendant has no fairly arguable defence.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Normally that onus will be satisfied by the plaintiff's affidavit verifying the allegation
s in the Statement of Claim and his oath that he believes that the defendant has no defence to the claim ...}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
If a defence is not evident on the plaintiff's pleading and the defendant wishes to resist summary judgment, the defendant must file an affidavit r
aising an issue of fact or law and give reasonable particulars of the matters which he claims ought to be put in issue.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Where the only arguable defence is a question of law which is clear-cut and does not require findings on disputed facts or the ascertainment of further facts, the Court may, and normally should, decide it on the application for summary judgment.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
But where the defence raises questions of fact on which the outcome of the cause may turn it will not often be right to enter summary judgment."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par Over a century earlier in }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 1880}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lord Blackburn}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Wallingford v. Mutual Society}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1880) 5 A.C. 685}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  said of the nature of the affidavit required from a defendant in opposing an }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Order 14'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  application, at }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.704}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "I think that when the affidavits are brought f
orward to raise (a) defence they must, if I may use the expression, condescend upon particulars.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 It is not enough to swear }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 I say I owe the man nothing'.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Doubtless, if it was true, that you owed the man nothing as you swear, that would be a good defence.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 But that is not enough.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
You must satisfy the judge that there is reasonable ground for saying so...}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
And in like manner as to illegality, and every other defence that might be mentioned." }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid2843746 
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In this latter regard although the debt is not denied the affidavits of the defendants raises the following three (3) }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defences'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  which may be conveniently categorised as}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \fi-720\li1440\ri0\nowidctlpar\tx-1440\faauto\rin0\lin1440\itap0\pararsid2843746 {\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1)\tab The bank's failure to explain the }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid2843746 guarantee or recommend independe}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 nt legal advice}{\b\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ;}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par (2)\tab The }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 13'}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  defence}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ;}{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841  and}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par (3)\tab The bank's negligence in not seizing and realising the shipping vessel.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par Dealing firstly with (1) which is raised in a single paragraph common to both affidavits, which reads}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \fi-720\li1440\ri1440\nowidctlpar\tx-1440\faauto\rin1440\lin1440\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 5.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 \tab }{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 THAT}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 I admit I signed the Guarantee ... but state that the true meaning and implications of the Guarantee were never explained to me nor was}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  I ever advised to get independe}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 nt legal advice before signing the Guarantee and that I was simply told to sign the Guarantee."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par I notice that the defendants do not deny having read the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Guarantee}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  themselves, nor is it d
enied that it was signed in the presence of a barrister and solicitor of the High Court of Fiji.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Furthermore the first named defendant is a }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "businessman"}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and the last type-written paragraph to the }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Guarantee}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  suggests that this was the second guarantee given
 by the defendants to the plaintiff bank to secure the total liability of the debtor company }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Matowa Shipping Services Limited}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .
\par 
\par Nor is the }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 raised a plea of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 non est factum'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , where the person signing believed that the document he signed had one character or one effect whereas in fact its character or effect was quite different.}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
But in any event it is well established that it is only in exceptional circumstances that a party of full age and understanding will not be bound by his signature to a document, whether he reads or understands it or not.
\par 
\par In }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 F.D.B. v. Navitalai Ragona}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1984) 30 F.L.R. 151}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Kermode J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (as he then was)}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in rejecting a similar }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.153}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "There is no dispute that the defendant executed the Guarantee.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 His defence is not a plea of non est factum.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The document is not one which is required by law to be read over and explained to the Guarantor ...}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The general rule is that a party of full age and understanding is normally bound by his signature to a document whether he reads or understands it or not."}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par The }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  also raises the question of what duty }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (if any)}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  does a bank owe to an intending guarantor to explain the guarantee, or recommend the taking of independ}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 e}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 nt legal advice}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ? }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
The question was not addressed in any meaningful way by learned counsel for the defendants in her written submissions but in any event I reject the existence of any such duty.
\par 
\par In }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Seaton v. Heath}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1899) 1 Q.B.}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Romer L.J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 said of the nature of a contract of guarantee at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.792}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "... ordinary contracts of guarantee are not amongst those requiring }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 uberrima fides' on the part of the creditor towards the surety}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ;}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and mere non-communication to the surety by the creditor of facts known to him affecting the risk to be undertaken by the surety will not viti
ate the contract, unless there be fraud or misrepresentation ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par and later at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.793}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"... in general, contracts of guarantee are between persons who occupy, or ultimately assume, the positions of creditor, debtor, and surety, and thereby the surety becomes bound to pay the debt or make good the default of the debtor.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In general, the creditor does not go to the surety, or represent, or explain to the surety, the risk to be run ...}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The risk undertaken is generally known to the surety, and the circumstance
s generally point to the view that as between the creditor and surety it was contemplated that the surety should take upon himself to ascertain exactly what risk he was taking upon himself."}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par In this regard there is not the slightest suggestion of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "fraud or misrepresentation"}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 in the defendants affidavits nor ought it to be over-looked that the defendants in the present case are not merely intending guarantors, in addition, they were active directors and shareholders of the debtor company and therefore can b
e safely assumed to be fully familiar with the company's financial position and the reasons for seeking the plaintiff bank's assistance, and the nature of the securities required by the plaintiff bank for that assistance.}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Needless to say their earlier guar
antees to the plaintiff bank speaks volumes of the defendants familiarity with the terms and nature of the particular security involved in this case.
\par 
\par I am also fortified in my view by the recent judgments of }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Hardie Boys J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Westpac v. McCreanor}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1990) 1 N.Z.L.R. 580}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and of }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Tipping J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Shivas v. Bank of New Zealand}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
(1990) 2 N.Z.L.R. 327}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  where the latter said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.368}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"A guarantor who is concerned at the circumstances in which he has given a bank guarantee will be able to complain should any of the fol
lowing circumstances be present - deceit by the bank, misrepresentation, negligence if advice or information is sought and given or volunteered by the bank in a careless manner, breach of fiduciary duty in terms of }{
\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Hamilton v. Watson}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (1845) 69 R.R. 85, unconscionable bargain, mistake and undue influence.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The present question is w}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 hether it is necessary or desir}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 able to add to the bases upon which a guarantor may, according to the circumstances, challenge the guarantee by casting upon the bank a positive duty 
to explain, warn or to recommend separate advice.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
In my respectful view a guarantor's position is adequately covered in law already.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
If the guarantor cannot succeed on one or other of the recognised causes of action in my view the pendulum would be swingin
g too far if one were to permit an action for the tort of negligence on the premise not of advice negligently given but on the basis of a failure to explain, warn or recommend separate advice."}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par There is no merit at all in this ground of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .
\par 
\par I turn next to consider }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  number }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 2 }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (above)}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 which is based on }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 13}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 '}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  of the }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Deed of Guarantee}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 . The clause expressly provides }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (so far as relevant for present purposes)}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \fi-720\li1440\ri720\nowidctlpar\tx-1440\faauto\rin720\lin1440\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "13.\tab THAT in case any Guarantor shall give to the Bank at the branch of the Bank
 where the account of the Debtor shall be kept written notice of desire to discontinue any further liability under this guarantee then and immediately after the said notice shall have been so given the liability under this guarantee of the person giving s
u
ch notice shall cease and determine so far as respects any liability which shall be incurred by the Debtor after the receipt of such notice except so far as any future liability shall arise out of ... the Debtor's obligation to pay interest on the moneys 
for the payment of which the person giving such notice remains liable ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par From the foregoing it is sufficiently clear that the defendants as guarantors are expressly empowered to determine their liability under the guarantee upon giving the requisite notice.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Furthermore that the effect of such notice is merely to prevent future liability accruing under the guarantee but not to any liability that may have already accrued and any future interest accruing thereon.
\par 
\par In this regard both affidavits of the defendants refer to a joint letter written by them to the plaintiff bank wherein they purported to inform the plaintiff bank of their withdrawal from the company.
\par 
\par I say }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 purported'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 advisedly because not only did counsel for the defendants not address this issue in any detail but in any event the relevant letter and enclosure are before the Court as annexures }{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 B'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and }{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 C'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  to the affidavit in reply of the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Assistant Manager, Legal}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  of the plaintiff bank.
\par 
\par The letter written on }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Matowa Shipping}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  letterhead is signed by both the second and third defendants and is dated }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 7 July 1992}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In it the defendants specifically acknowledge being }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
the main guarantor to the Company's loan at F.D.B.'}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Then reference is made to their dissatisfaction }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 with the management of the company and the handling of its financial affairs'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and finally the letter closes with the following proposal}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"We propose to the bank that if I. Moto fails to take over the company that the Company's assets and liabilities be taken over by the undersigned."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par This latter }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 proposal'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 is clearly in line with the resolutions passed at a Director's meeting attended by all 3 defendants }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 albeit}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 that there was an additional resolution that the defendants }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "... are to withdraw from Matowa Shipping Services Ltd."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 (whatever that may mean).
\par 
\par I note however that no reference is made to }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 13}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 '}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in the letter }{\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 or}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  the company resolution nor is the same alluded to or mentioned in the defendants affidavits or the }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Statement of Defence}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Furthermore the }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 proposal'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and the }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 resolutions'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  refer to }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 the assets and liabilities of the company'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 which phrase would exclude}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 the defendants personal liability under the guarantees.
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Be that as it may, I have carefully scrutinised the contents of both the letter and the company's resolutions }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
(which I observe differs materially from the defendant's copy of the resolutions - }{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 See}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 annexure }{\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 B}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 ' to the defendants affidavits)}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 and am unable to distil or infer "... (any) }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 desire}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (on the part of the defendants) }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 to discontinue any further liability}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (under their guarantees)" as required in terms of }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 13}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 '}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  of the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Deed of Guarantee}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par On the contrary, I agree with the view expressed by the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Assistant Manager Legal}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , of the plaintiff bank}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "... (that) it is clear (from the annexures) that the Directors of Matowa Sh
ipping Services Ltd. had (had) differences which they were attempting to resolve by either party taking over the management of the company."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par In passing I note from the defendants own admissions and the absence of any clear evidence that advances were being made to the debtor company }{\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 after}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 March 1992}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
, that the larger portion of the advances to the debtor company (}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 i.e.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 $100,000}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 to purchase the vessel) was made long before the defendants letter of withdrawal and therefore even if the defendant's letter qualified as a }{\b\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 notice'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  under }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{
\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 13}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 '}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  of the }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Deed of Guarantee}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , nevertheless, their liability would not be substantially different }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (if at all)}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  from that already set out in the plaintiff bank's }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Demand Notice}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and Writ.
\par 
\par There is also no merit in this }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .
\par 
\par I turn next to deal with the third and final ground of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  urged by the defendants in }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 paras. 10 to 13}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 of their affidavits, the effect of which is conveniently summarised by their counsel in the following passage}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "The plaintiff was aware that th
e First Defendant was not making its payments and yet allowed the First Defendant to retain the boat and ultimately cause it to sink."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par At the hearing of the application counsel on being pressed to identify the }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 duty'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  owed by the plaintiff bank in the above context, referred to the judgment of the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 English Court of Appeal}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Standard Chartered Bank Ltd. v. Walker}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1982) 1 W.L.R. 1410}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  where it was 
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "}{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Held}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  that a receiver realising assets under a debenture owed a duty both to the borrower and to a guarantor o
f the debt to take reasonable care to obtain the best price that the circumstances permitted ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par In his judgment in the case }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lord Denning M.R.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  referred to the decision in }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Cuckmere Brick Co. Ltd. v. Mutual Finance Ltd}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 . }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
(1971) Ch. 949}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  which firmly establis
hed that a mortgagee in exercising his power of sale owes the mortgagor a duty to take reasonable care to obtain a proper price for the mortgaged property at the time of its sale, and said at }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.1415}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "This duty is only a particular application of the gen
eral duty of care to your neighbour which was stated by Lord Atkin in }{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Donoghue v. Stevenson}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 (1932) A.C. 562 and applied in many cases since."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par More specifically in relation to a receiver, }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lord Denning}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  referred to the decision in }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Gaskell v. Gosling}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1897) A.C. 575}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.1415}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"He owes a duty to take reasonable care to obtain the best possible price which the circumstances of the case permit.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
He owes this duty not only to the company, of which he is the agent, to clear off as much of its indebtedness to the bank as possible, but he also owes a duty to the guarantor, because the guarantor is liable only to the same extent as the company.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The more overdraft is reduced, the better for the guarantor."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 

\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par and later in what might be categorised as classical negligence terminology his lordship said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.1416}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "Clearly the guarantor's liability is dependant upon the company's.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 He is in a very special position.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The amount of his liability depends entirely on the amount that the stock realises when sold with proper care.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 To my mind he is well within the test of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 proximity'.}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
The receiver owes a duty not only to the company, but also to the guarantor to exercise a duty of care in the disposal of the assets.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 I say nothing about creditors."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par I accept that the broad principles enunciated in the above passages could well extend to the circumstances of the present case in a very general sense but }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lord Denning's }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 disclaimer in the last sentence cited above puts the lie to the defendants submission.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In my view the relationship between a receiver }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (who is the agent of the debtor)}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  and a surety, and the potential impact upon a surety's liability of the actions of the receiver are so direct that had that been the case here I would have had little doubt in the matter.

\par 
\par The relationship in this case however, is not one between }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 mortgagor and mortgagee'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 or}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 receiver and surety'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  but one of creditor and sureties }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (as a notional debtor)}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 where the sureties complain that the creditor owed them a duty to safeguard, repossess and realise a security which was permitted to remain in the possession and control of the debtor and which was ultimately lost through the debtor's negligence.
\par 
\par If I may say so the submission comes perilously close to equating a }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 contract of guarantee'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  with a }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 contract of insurance'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  which it clearly is not.}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
Nor is it helpful in my view to introduce negligence analysis or terminology in an area of contractual relations where }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Equity'
}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  has, long before the development of the tort of negligence, provided relief to an aggrieved party.
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid10056574 
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 In somewhat similar vein }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Norse L.J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in }{
\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Parker-Tweedale v. Dunbar Bank P.L.C}{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 .}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1990) 3 W.L.R. 767}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.773}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 :
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"In my respectful opinion it is both unnecessary and confusing for the duties owed by a mortgagee to the mortgagor and the surety, }{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 if there is one}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , to be expressed in terms of the tort of negligence.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
The authorities which were considered in the careful judgments of the Court in }{\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Cuckmere Brick Co. Ltd. v. Mutual Finance}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (1971) Ch. 949 demonstrate that the duty owed by the mortgagee to the mortgagor was recognised by equity as arising out of the particular relationship between them."}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \fi-5040\li5760\ri0\nowidctlpar\tx-1440\faauto\rin0\lin5760\itap0\pararsid10056574 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (my underlining)
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par and later in rejecting the extension of a similar duty to a beneficiary under a trust of whose interest the mortgagee has notice, his lordship said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.774}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"Once it is recognised that the duty owed by the mortgagee to the mortgagor arises out of the particular relationship between them, it is readily apparent that there is no warrant for extending its scope so as to include a beneficiary o
r beneficiaries under a trust of which the mortgagor is the trustee."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Purchas L.J.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 in his judgment after noting the general trend in the law of tort against recognising a general liability in tort for pecuniary loss dissociated from physical damage, said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.778}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"Where there is a directly contractual relationship the law will be slow to imply a duty greater than that created under the contract even if that contract is silent in a particular respect ...}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Even where there is no direct contractual relation
ship but where there is a contractual context against which the parties came into a relationship short of a contractual one, again a duty in tort enlarging the rights enjoyed by the victim of the alleged tort beyond those provided for in a contractual con
text generally will not be imposed}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  See}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\i\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Pacific Associates Inc. v. Baxter}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 (1990) 1 Q.B. 993."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par In the present case not only was there a direct contractual relationship between the defendants and the plaintiff bank but the contract itself provided that }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "...
 the guarantee shall be a continuing guarantee ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (Clause 1)}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ;}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 and}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"... shall be enforceable notwithstanding that any ... security shall be still in circulation ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (Clause 2)}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 ;}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 and}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  further, }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "... shall be a principal obligation ... and shall be independ}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid10056574 e}{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 nt of and in no way affected by any other security ..."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (Clause 5).
\par 
\par More particularly and directly relevant to the defendants third }{\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Clause 7}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  provides}{
\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "THAT this guarantee shall not affect or be affected by any other ... security now held or t
aken by the Bank or be affected by any loss by the Bank of any collateral or other security or by the Bank failing or neglecting to recover by the realisation of any collateral or other security ... or by any other laches acts or omissions or mistakes on 
t
he part of the bank or by the release discharge abandonment or transfer ... and either with or without consideration of any security ... held by the Bank from the Debtor ... and the bank shall be under no obligation to marshal in favour of the Guarantor a
n
y security whatever held by the Bank or any assets that the Bank may be entitled to receive or have a claim upon ... and the Bank may at its absolute discretion ... release, refuse to complete or to enforce ... any specialties, ... or other securities or 
instruments ... held by the Bank and whether satisfied by payment or not without discharging the liability of the Guarantor under this Guarantee."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par Of even greater relevance is the case of }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 China & South Sea Bank Ltd. v. Tan Soon Gin}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1990) 1 A.C. 536}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 , }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Lord Templeman}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  in delivering the judgment of the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Privy Council}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 upholding a summary judgment against a surety and in rejecting the surety's claims that the creditor owed him a duty to exercise the power of sale conferred by a mortgage which would have resulted i
n the surety's liability under the guarantee being substantially reduced or eliminated, said at }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.543}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360 
\par }{\f0\lang2057\langfe5129\langnp2057\insrsid10056574\charrsid2843746 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"The Court of Appeal sought to find such a duty in the tort of negligence but the tort of negligence has not yet subsumed all torts and does not supplan
t the principles of equity or contradict contractual promises or complement the remedy of judicial review or supplement statutory rights ... Equity intervenes to protect a surety."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par Their lordships nevertheless affirmed and applied the rule laid down in }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Watts v. Shuttleworth}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  }{
\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (1860) 120 R.R. 559}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  (per }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Pollock C.B.}{
\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 )
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
"... that if the person guaranteed does any act injurious to the surety, or inconsistent with his rights, or if he omits to do any act which his duty enjoins him to do, and the omission proves inj
urious to the surety, the latter will be discharged ... the rights of a surety depend rather upon principles of equity than upon the actual contract."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par In doing so the }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 Privy Council}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  said of the rights and duties of a creditor at }{
\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 p.545}{\f0\lang2057\langfe5129\langnp2057\insrsid2843746 :}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  
\par 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 "The creditor had three sources of repayment.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The creditor could sue the debtor, sell the mortgaged securities or sue he surety.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 All these remedies could be exercised at any time or times simultaneously or contemporaneously or successively or not at all ...}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }
{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The creditor does not become a trustee of the mortgaged securities and the power of sale for the surety unless and until the creditor is paid in full ... 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li720\ri720\nowidctlpar\faauto\rin720\lin720\itap0\pararsid2843746 {\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
The creditor is not obliged to do anything ... if disaster strikes ... the mortgaged securities but the surety remains capable of repaying the debt then the creditor loses nothing.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 The surety contracts to pay if the debtor does not pay and the surety is bound by his contract.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 If the surety ... is worried that the mortgaged securities may decline in value then the surety
 may request the creditor to sell and if the creditor remains idle then the surety may bustle about, pay off the debt, take over the benefit of the securities and sell them.}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid2843746  }{
\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 No creditor could carry on the business of lending if he could become liable to a 
mortgagor and to a surety or either of them for a decline in value of mortgaged properly, unless the creditor was personally responsible for the decline."}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 A fortiori}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746  where the security is lost not through any personal act of the creditor but rather throug
h the negligence of the debtor company of which the defendants are shareholders and directors }{\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 albeit}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 passive even reluctant ones.
\par 
\par In light of the above I have no hesitation in holding as a matter of law that no duty exists upon the plaintiff bank to exercise its power of sale over the shipping vessel at any particular time or at all.
\par 
\par This third and final ground of }{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid11824841 '}{\b\i\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 defence'}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
 is without merit and accordingly there will be judgment entered for the plaintiff bank as prayed.
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\tqc\tx3968\faauto\rin0\lin0\itap0\pararsid10056574 {\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 (D.V. Fatiaki)
\par }{\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 JUDGE
\par }\pard \ql \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid2843746 {\b\f0\ul\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }{\b\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 At Suva,
\par 22nd November, 1995.}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }\pard \qr \li0\ri0\nowidctlpar\faauto\rin0\lin0\itap0\pararsid10056574 {\f0\lang2057\langfe5129\langnp2057\insrsid10056574 HBC0055J.95S}{\f0\lang2057\langfe5129\langnp2057\insrsid811360\charrsid2843746 
\par }}