A guarantor attempted to resile from his $10m guarantee by arguing that the signing pages did not pertain to the guarantee but were stand alone documents intended to signify assent to a different proposed guarantee under which he would not incur any personal liability. Alternatively, the guarantor pleaded non est factum (not my deed) on the basis that he believed the guarantee was radically different to the one he signed in that it would not expose him to personal liability.
The court found that the guarantor did intend to bind himself to the guarantee. The court found the defence of non est factum failed because the guarantor had no disability which left him unable to read or understand the document signed. The court noted that he twice signed a declaration that he had received independent legal advice regarding it and had freely and voluntarily signed it.
The court said:
At its highest, his complaint is that notwithstanding his declarations that he received legal advice, he was mistaken as to the legal effect of the contract to which he consciously committed himself. But he asserts no operative misrepresentation or vitiating mistake. He asserts no unconscionability or misleading or deceptive conduct. He pleads no estoppel on lender’s part. He brings no cross-claim seeking relief under the Contracts Review Act 1980 (NSW) or rescission of the Guarantee. The evidence does not establish that he was in any way misled by the lender, or, that in committing himself, he relied on anything inaccurate conveyed by the lender.
The court held the guarantor liable.