MACEDONE and ORS v COLLINS; COLLINS WALLIS PROPERTIES PTY LTD v ST GEORGE COMMERCIAL CREDIT CORP LTD; COLLINS v ST GEORGE COMMERCIAL CREDIT CORP LTD [1996] NSWCA 336
The guarantees given were subject to a condition precedent that all proposed guarantors execute their respective guarantees. As this did not occur due to the lack of capacity of the trustee companies, the guarantees were not enforceable. However, the mortgages were enforceable as they were not subject to the same condition precedent. The solicitor's advice to Mrs Collins was adequate as to the risks of losing her home, but there was no breach of fiduciary duty and no entitlement to equitable compensation due solely to double employment absent evidence of disadvantage or disloyalty.
- Parties
- Appellant/solicitor: Macedone Christie Willis Salari and Partners; Respondent/cross Claimant/guarantor/mortgagor: Mrs Collins; Respondent/guarantor/mortgagor: Mr Collins; Respondent/guarantor/mortgagor: Mr Wallis; Respondent/guarantor/mortgagor: Mrs Wallis; Borrower/company: Collins Wallis Properties Pty Ltd; Lender/appellant: St George Commercial Credit Corporation Ltd; Guarantor/trustee Company: Run-o-Waters Pastoral Co Pty Ltd; Guarantor/trustee Company: A B Wallis Pty Ltd; Company/guarantor: Collins Wallis Pty Ltd; Solicitor/cross Respondent: Mr Alidenes
- Jurisdiction
- Australia
- Judgment Date
- 20 December 1996
- Procedural Posture
- Civil Appeal / Court of Appeal Decision
- Outcome
- Appeal allowed in part; guarantees held unenforceable due to failure of condition precedent; mortgages enforceable; orders as to costs and further assessment of damages remitted.
- Legal Topics
- Enforceability of Guarantees, Mortgages, Condition Precedent, Solicitors' Duties, Fiduciary Duties, Equitable Compensation, Conflict of Interest
Case Brief
Summary, issues, holding and outcome
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Parties
Macedone Christie Willis Salari and Partners
Appellant/solicitor
Mrs Collins
Respondent/cross Claimant/guarantor/mortgagor
Mr Collins
Respondent/guarantor/mortgagor
Mr Wallis
Respondent/guarantor/mortgagor
Mrs Wallis
Respondent/guarantor/mortgagor
Collins Wallis Properties Pty Ltd
Borrower/company
St George Commercial Credit Corporation Ltd
Lender/appellant
Run-o-Waters Pastoral Co Pty Ltd
Guarantor/trustee Company
A B Wallis Pty Ltd
Guarantor/trustee Company
Collins Wallis Pty Ltd
Company/guarantor
Mr Alidenes
Solicitor/cross Respondent
Procedural Posture
Civil Appeal / Court of Appeal Decision
Legal Issues
- 1 Whether the guarantees and mortgages executed were enforceable or subject to a condition precedent.
- 2 Scope of a solicitor's duty to explain power of attorney and risks.
- 3 Applicability of equitable compensation for breach of duty of skill and care as distinct from breach of fiduciary duty.
Ratio Decidendi
The guarantees given were subject to a condition precedent that all proposed guarantors execute their respective guarantees. As this did not occur due to the lack of capacity of the trustee companies, the guarantees were not enforceable. However, the mortgages were enforceable as they were not subject to the same condition precedent. The solicitor's advice to Mrs Collins was adequate as to the risks of losing her home, but there was no breach of fiduciary duty and no entitlement to equitable compensation due solely to double employment absent evidence of disadvantage or disloyalty.
Court Disposition
Appeal allowed in part; guarantees held unenforceable due to failure of condition precedent; mortgages enforceable; orders as to costs and further assessment of damages remitted.
Orders
- In appeal No CA40351/94, appeal dismissed.
- In appeals No CA40352/94 and CA40353/94, appeal allowed; certain orders of Rolfe J set aside.
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