A co-surety who has received independent legal advice on the terms of a guarantee and indemnity cannot maintain a defence based on misleading or deceptive non-disclosure by the bank regarding the bank's power to release other co-sureties. The Codelfa principle that a collateral contract cannot be inconsistent with the express terms of the principal contract applies to prevent co-sureties from asserting an implied obligation on the bank not to release other co-sureties where the guarantee expressly permits such release. The question whether the nemo dat quod non habet rule extends to statutory rights of avoidance under the Trade Practices Act was left open.
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