Watt v State Bank of NSW t/as State Bank of NSW

[2003] ACTCA 7

ACT Court of Appeal

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Interrogate

Catchwords

1. Equity
2. › Unconscionability
3. › Guarantee and mortgage
4. › Surety transactions
5. › Whether [name withheld] v [name withheld] principle extends beyond spousal relationships to parent-child relationships
6. › Whether parents who guarantee debts of children can invoke equitable relief available to wives guaranteeing husbands' debts
1. Equity
2. › Unconscionability
3. › Guarantee and mortgage
4. › Volunteer requirement
5. › Whether surety who holds shares in and is director of borrowing company is a 'volunteer'
6. › Whether surety obtained financial benefit from transaction
1. Equity
2. › Unconscionability
3. › Guarantee and mortgage
4. › Understanding of transaction
5. › Whether surety understood general nature of obligations undertaken
6. › Whether failure to read documents establishes lack of understanding

Quick Take

The [name withheld] v [name withheld] principle, as affirmed in [name withheld] v National Australia Bank, does not extend to parents who guarantee the debts of their children or their children's partners. The principle is confined to relationships of or similar to marriage, based on the particular trust and confidence arising from such relationships. A surety who holds shares in and is a director of the borrowing company is not a 'volunteer' for the purposes of the principle, particularly where the refinancing discharged the surety's existing liability to another lender.