Williams v Frayne [1937] HCA 16

Williams v Frayne [1937] HCA 16

Any inference of novation was excluded by express evidence of contrary intention. The guarantor was not released from liability, as (a) agreement to give time was made at his request and with his concurrence, and (b) any imperfection in the security (assignment without landlord’s consent or option not exercised) arose from the very terms and circumstances on which the guarantee was given, not from any subsequent default or neglect of the creditors. The absence of landlord's consent and option were not failures contrary to the contract, and do not discharge the surety.

Parties
Plaintiff: Walter Herbert Williams; Plaintiff: Clifford John Williams; Defendant: George Frayne; Defendant: Henrietta Ann Tyree; Respondent (as Executors of George Frayne, Deceased): Ballarat Trustees Executors and Agency Co. Ltd.; Respondent (as Executor of George Frayne, Deceased): Bessie Frayne
Jurisdiction
Australia
Procedural Posture
Appeal / Judgment on Appeal From the Supreme Court of Victoria
Outcome
Appeal dismissed
Legal Topics
Novation, Obligation of Creditor to Preserve Security, Assignment of Lease, Release of Surety
Guarantee and Indemnity Land Law Equity Novation Obligation of Creditor to Preserve Security Assignment of Lease Release of Surety

Case Brief

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Parties

Walter Herbert Williams

Plaintiff

Clifford John Williams

Plaintiff

George Frayne

Defendant

Henrietta Ann Tyree

Defendant

Ballarat Trustees Executors and Agency Co. Ltd.

Respondent (as Executors of George Frayne, Deceased)

Bessie Frayne

Respondent (as Executor of George Frayne, Deceased)

Procedural Posture

Appeal / Judgment on Appeal From the Supreme Court of Victoria

Legal Issues

  1. 1 Whether there was a novation discharging the principal debtor and guarantor
  2. 2 Whether the guarantor was released by creditor’s act or omission (giving time, failing to perfect or preserve security, failing to exercise option to renew lease)
  3. 3 Whether the security was impaired by the creditor’s conduct

Ratio Decidendi

Any inference of novation was excluded by express evidence of contrary intention. The guarantor was not released from liability, as (a) agreement to give time was made at his request and with his concurrence, and (b) any imperfection in the security (assignment without landlord’s consent or option not exercised) arose from the very terms and circumstances on which the guarantee was given, not from any subsequent default or neglect of the creditors. The absence of landlord's consent and option were not failures contrary to the contract, and do not discharge the surety.

Court Disposition

Appeal dismissed

Orders

  • Ballarat Trustees Executors and Agency Co. Ltd. and Bessie Frayne, as executors of George Frayne deceased, joined as respondents to the appeal, any liability limited to assets in the estate of George Frayne.
  • Appeal dismissed with costs.