Mytian v Witham [2001] NSWSC 47

New South Wales Supreme Court

CITATION : Mytian v Witham [2001] NSWSC 47 CURRENT JURISDICTION: Equity Division Commercial List FILE NUMBER(S) : SC 50106/2000 HEARING DATE(S) : 06/02/01 JUDGMENT DATE : 6 February 2001

PARTIES : Mytian - Plaintiff Witham- Defendant JUDGMENT OF : Brownie AJ

COUNSEL : Mr D.A. Smallbone and Mr P. M. Fraser - Plaintiff Mr N.A. Confos - Defendant SOLICITORS : Peter J. Corcoran - Plaintiff Castrission & Co - Defendant CATCHWORDS : Guarantee- discharge of surety, by reason of variation of contract between creditor and principal debtor- no question of principle CASES CITED : Winstone Limited v Bourne (1978) 1NZLR 94 Wren v Emet Contractors Pty Limited (1969) 43 ALJR 213 DECISION : Judgment for the plaintiff

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BROWNIE AJ

TUESDAY 6 FEBRUARY 2001

50106/00 - MYTIAN PTY LIMITED v DOUGLAS THEODORE WITHAM

JUDGMENT

1 HIS HONOUR: The plaintiff sues the defendant as one of the guarantors of the liabilities of a company now called Witham Enterprises Pty Limited. That company borrowed $640,000 from the plaintiff in 1992. The principal debtor and the plaintiff entered into a mortgage which in due course was registered under the provisions of the Real Property Act. 2 The defendant and his son, who were then the directors of the principal debtor, executed the document as guarantors. By the mortgage the principal debtor promised to repay the principal sum on or before 21 July 1994 and to pay interest at the rate of 16 per cent per annum, reducible to 15 per cent per annum upon prompt payment. 3 Clause fifthly of the mortgage recited that the principal sum had been lent to the mortgagor at the request and direction of the guarantor, that is to say the defendant and his son "and upon and subject to the promise of the guarantor to guarantee the due repayments by the mortgagor hereunder and the due observance and performance by the mortgagor of the covenants herein". There then followed a series of agreements. Subclause (a) provided: "The guarantor will from time to time pay to the mortgagee all repayments due under this mortgage and any other moneys which shall become payable by the mortgagor whenever and so often as the mortgagor shall fail to pay the same or any part or part thereof".