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RDG
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Vinodh S Coomaraswamy
wrote:
An important decision on presumed undue
influence has today been handed down by the High Court of Australia.
The name of the case is Garcia v National Australia Bank Ltd [1998]
HCA 48 and, pending the full report, the full text of the judgment is
available at http://www.lawnet.com.au/
courts/hct/garcia.htm
The full text is also available at:
http://www.austlii.edu.au/au/cases/cth/high_ct/
1998/48.html
I don't think the case can be described as one of presumed
undue influence - the joint judgment (of Gaudron, McHugh, Gummow and Hayne
JJ) eschews any such analysis. They decline to adopt (or modify) Barclays
Bank plc v O'Brien and instead hold that it will be unconscionable for
a lender to enforce a third party security (in the absence of undue influence
or unconscionable conduct with the knowledge by the lender) if:
(a) in fact the surety did not understand the purport
and effect of the transaction;
(b) the transaction was voluntary (in the sense that
the surety obtained no gain from the contract the performance of which
was guaranteed);
(c) the lender is to be taken to have understood that,
as a wife, the surety may repose trust and confidence in her husband in
matters of business and therefore to have understood that the husband
may not fully and accurately explain the purport and effect of the transaction
to his wife; and yet
(d) the lender did not itself take steps to explain the
transaction to the wife or find out that a stranger had explained it to
her.
The decision is very significant - and more than a little
problematic.
Regards,
Simon Evans. <== Previous message Back to index Next message ==> |
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