King v Smith

[2025] WASCA 6

Western Australia Court of Appeal

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Interrogate

Catchwords

1. Guarantee and Surety
2. › Guarantor's right of indemnity against principal debtor
3. › Restitutionary claim for recoupment
4. › Whether principal debtor requested guarantee
5. › Whether payment by guarantor discharged liability of principal debtor
6. › Whether debtor ratified or adopted payment
7. › Preconditions for grant of right of indemnity in equity
1. Guarantee and Surety
2. › Guarantor's right of indemnity against principal debtor
3. › Payment of another's debt
4. › Whether debt discharged where payment not made on behalf of debtor or with debtor's authority
5. › Whether debtor adopted or ratified payment
1. Agency
2. › Power of attorney
3. › Authorised representative under margin loan facility
4. › Whether power of attorney sufficient to constitute valid request to give guarantee on behalf of principal debtor
1. Practice and Procedure
2. › Abuse of process
3. › Delay in entering judgment
4. › Three-year delay between delivery of reasons and entry of judgment
5. › Whether delay vexatious or oppressive
6. › Whether purpose of adjournments foreign to nature of process

Quick Take

Where a principal debtor did not request a guarantee, a guarantor seeking restitutionary recoupment must establish that the payment discharged the debtor's liability, which requires either that the payment was made on behalf of the debtor with the debtor's authority, or that the debtor ratified or adopted the payment. An agent's power of attorney under a margin loan facility does not necessarily extend to requesting a third party to provide a guarantee on behalf of the principal debtor.