SONNTAG v GRAZIANO [1994] NSWCA 291

SONNTAG v GRAZIANO [1994] NSWCA 291

Provision of the security was not a condition precedent to the existence of the loan agreement or guarantee but a stipulation precedent to performance. Mr Sonntag was aware of the absence of security and acquiesced, thus he cannot avoid liability on the guarantee due to non-provision of security.

Parties
Plaintiff: Paul Graziano; Borrower Company: Rohalo Pty Ltd; Guarantor/appellant: Lionel Russell Sonntag
Jurisdiction
Australia
Judgment Date
15 April 1994
Procedural Posture
Appeal / Judgment
Outcome
Appeal dismissed with costs.
Legal Topics
Loan Agreements, Director Liability, Security Provision, Guarantee Validity, Waiver of Conditions
Contract Law Guarantee Law Loan Agreements Director Liability Security Provision Guarantee Validity Waiver of Conditions

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Parties

Paul Graziano

Plaintiff

Rohalo Pty Ltd

Borrower Company

Lionel Russell Sonntag

Guarantor/appellant

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether provision of security was a condition precedent to loan agreement and/or guarantee
  2. 2 Whether director (guarantor) was released from liability due to failure to provide security
  3. 3 Whether actions of mutual solicitor affect guarantee liability

Ratio Decidendi

Provision of the security was not a condition precedent to the existence of the loan agreement or guarantee but a stipulation precedent to performance. Mr Sonntag was aware of the absence of security and acquiesced, thus he cannot avoid liability on the guarantee due to non-provision of security.

Court Disposition

Appeal dismissed with costs.

Orders

  • Appeal dismissed with costs.