MARZOUK v WESTPAC BANKING CORPORATION [1992] NSWCA 147

MARZOUK v WESTPAC BANKING CORPORATION SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CLARKE, MEAGHER and SHELLER JJA 16, 17 July 1992, 14 October 1992

[1992] NSWCA 147

FACTS: Bank brings proceedings claiming possession of land jointly owned by appellants, and payment of $400,000.00 owing by them under guarantees of loans to company controlled by appellants' son. Father is a director/shareholder of the Company. Son lacked capital to start business and Bank agreed to provide money if mortgage over parents' land and guarantees were executed by parents. They claim guarantee was limited to $20,000.00 and seek declarations that mortgage and guarantee are void and unenforceable.

HELD:(per curiam)

(1) Once it was held below that father did not really believe that liability under the documents was limited, and that son had not misled him, allegations of unconscionable conduct and reliance on the various statutes must collapse.

(2) The Bank's non disclosure to the parents of its previous refusal of a home loan to the son is not a matter of relevance to the appeal.

(3) Although the mother relied entirely upon the advice of her husband, she knew what the substance and effect of the guarantee was, and Equity will not invalidate such a transaction.

(4) The principle of Yerkey v Jones is of no assistance to the mother. It is restricted to transactions between husband and wife, particularly with dispositions of the wife in the husband's favour.

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447. Yerkey v Jones (1939) 63 CLR 649. European Asian of Australia Ltd v Kirland [1987] 8 NSWLR 192 Goodwin v National Bank of Australasia (1968) 114 CLR 173 West v AGC (Advances) Ltd (1986) 5 NSWLR 610. Baltic Shipping company v Dillon (1991) 22 NSWLR 1

Clarke JA I agree that the appeals should be dismissed with costs generally for the reasons given by Sheller JA.