Graeme Webb Investments Pty Limited v St George Partnership Banking Limited

(2001) 38 ACSR 282; [2001] NSWCA 93

NSW Court of Appeal

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Interrogate

Catchwords

1. Guarantee
2. › Creditor's duty to surety
3. › Equitable duty
4. › Whether creditor's failure to ensure receiver accepted offer from third party constituted neglect or default allowing security to be lost or diminished
5. › Whether surety entitled to reduction in liability
6. › Distinction between positive act and passive inactivity
1. Guarantee
2. › Creditor's duty to surety
3. › Common law duty of care
4. › Whether creditor owes common law duty of care to surety
5. › No common law duty of care owed
1. Guarantee
2. › Preservation of surety's liability
3. › Contractual provisions
4. › Construction of clauses preserving surety's liability notwithstanding creditor's dealings with security
1. Corporations
2. › Receivers and managers
3. › Agency
4. › Whether receiver appointed by secured creditor remains agent of company after compulsory winding-up
5. › Receiver's powers after liquidation
6. › Corporations Law

Quick Take

A secured creditor's decision to leave a receiver with discretion as to whether to accept an offer from a third party does not constitute 'neglect or default' sufficient to reduce a surety's liability under the equitable principle in Buckeridge v Mercantile Credits Ltd. No common law duty of care is owed by a creditor to a surety; the surety's remedy lies in equitable principles. A receiver appointed by a secured creditor remains the agent of the debtor company after compulsory winding-up for the purpose of realising assets, notwithstanding the statutory winding-up scheme.