Bradley West Solicitors Nominee Co Ltd v Keeman - [1994] 2 NZLR 111

Contract — Guarantee — Sale and purchase of shares in a company — Mortgage by company to nominee company — Principal sum increased to fund purchase — Memorandum of variation executed by company and purchasers personally "as Guarantors" - Proper construction of memorandum — Whether memorandum amounted to a valid guarantee — Whether void for uncertainty.

Contract — Defences — Non est factum — Purchasers of shares personally executed memorandum of variation of mortgage to nominee company including guarantee — Explanation of document by solicitor also acting for nominee company — Purchasers not clearly told of effect of guarantee — Purchasers not reading document — Whether purchasers misled by another person as to character or effect of memorandum — Whether explanation was misleading or merely insufficient — Whether failure to take reasonable care by purchasers — Whether plea available where misleading explanation given by the party's own legal adviser — Observations as to ingredients of doctrine of non est factum.

Company law — Shares — Assistance by company in purchase of its own shares — Company obtained increase in principal sum under a mortgage to a nominee company — Funds used for purchase of shares in the company — Whether loan and guarantee in contravention of s 62 of the Companies Act 1955 - Whether contracts should be validated — Circumstances to be considered in exercise of discretion- Companies Act 1955, s 62 - Illegal Contracts Act 1970, s 7.

Equity — Unconscionable bargain — Whether purchasers were under a disability — Effect of purchasers' solicitor being a director of and solicitor for the lender — Whether against conscience for the lender to receive and enforce the benefit of the contract — Elements necessary to establish unconscionability.