Written by The case of Delaney Advertising & Media Pty Ltd v Upper Hunter Solar Pty Ltd [2025] NSWSC 1321 involved Mr Williams, the director of a company planning to develop a solar farm in the Hunter Valley, NSW, who had personally guaranteed a $3 million loan taken out by the company. The company ultimately failed to repay the loan and the lender sold the land used as security and sought to recover the remaining debt.
Mr Williams attempted to avoid liability on several grounds. First, he claimed that he would only be liable after other guarantors had been called upon, based on a verbal conversation he described. The Court rejected this, finding his account contradicted by contemporaneous documents. It also noted that his evidence was unreliable, pointing out his false claim of not having received independent legal advice, despite a certificate proving otherwise.
He further argued that he was not liable under the guarantee because it referred to a different loan document than the one the lender actually used, invoking the legal principle that ambiguities between a loan and its guarantee should be interpreted in favor of the guarantor. The Court dismissed this, finding no real doubt that the guarantee clearly applied to the loan provided by the lender.
Finally, Mr Williams contended that the notice of demand was invalid because it required payment in 21 days instead of the 30 days specified in the agreement. The Court held that, despite this technical error, the lender had demonstrated it suffered loss due to the failure to repay the loan, so he remained liable.
Overall, this case underscores the importance of fully understanding guarantees and loan obligations, as courts will enforce them strictly, and technical defenses are unlikely to relieve a guarantor from liability.