Valstar v Silversmith; Valstar v Van Veizen [2009] NSWCA 80
Material and prejudicial variations to the mortgage without the guarantors' consent—particularly those increasing the principal sum and risk—operate, under the Ankar principle, to discharge the respondents from their obligations as guarantors. The principal debtor clause in this mortgage was insufficiently broad to exclude the equitable discharge rule; the appeals must be dismissed.
- Jurisdiction
- Australia
- Judgment Date
- 20 April 2009
- Procedural Posture
- Appeal / Court of Appeal Post Judgment Appeal
- Outcome
- appeal dismissed
- Legal Topics
- ['discharge of Surety' 'principal Debtor Clause' 'mortgage Variation' 'novation' 'contract Variation']
Case Brief
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Procedural Posture
Appeal / Court of Appeal Post Judgment Appeal
Legal Issues
- 1 ['Whether guarantors are discharged from liability due to variations to the mortgage without their consent' 'Effect and scope of the principal debtor clause' 'Application of the equitable principle in Ankar concerning discharge of surety by material contract variation']
Ratio Decidendi
Material and prejudicial variations to the mortgage without the guarantors' consent—particularly those increasing the principal sum and risk—operate, under the Ankar principle, to discharge the respondents from their obligations as guarantors. The principal debtor clause in this mortgage was insufficiently broad to exclude the equitable discharge rule; the appeals must be dismissed.
Court Disposition
appeal dismissed
Orders
- ["Appellant to pay the Respondents' costs of the appeals"]
Full Case Text
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