Comanos v Citibank Ltd

The New South Wales Court of Appeal heard an appeal by Mr Comanos against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation of a guarantee provided by Mr Comanos in favour of Citibank Ltd. Mr Comanos sought to argue that the guarantee was discharged due to Citibank's conduct.

The primary legal issue before the Court of Appeal was whether Citibank had, by its actions, released Mr Comanos from his obligations under the guarantee. Specifically, the court had to determine if Citibank's conduct in dealing with the principal debtor amounted to a variation of the underlying loan agreement or a release of security, which would, in turn, discharge the guarantor.

The Court of Appeal found that the terms of the guarantee were clear and unambiguous, and that Mr Comanos had expressly agreed to remain liable notwithstanding any dealings between Citibank and the principal debtor. The court applied the established legal principle that a guarantor may contract out of their rights to be discharged by reason of variations to the principal contract or dealings with securities. The court held that the guarantee effectively preserved Citibank's rights against Mr Comanos even if its dealings with the principal debtor might otherwise have had that effect.

The appeal was dismissed.