Commonwealth Bank of Australia v Bobby Sailesh Anand

The matter before the court involved a dispute between the Commonwealth Bank of Australia and Bobby Sailesh Anand, a sole director and shareholder of a company that had received a loan from the bank. The bank had taken a charge over the company's assets as security for the loan, but this charge was unregistered. Upon the company's liquidation, the charge was found to be void as against the liquidator. The bank sought to enforce the guarantee provided by Anand for the loan, which contained an exemption clause regarding the registration of the charge.

The primary legal issues before the court were whether the failure to register the charge entitled Anand to discharge the guarantee and the effect of the exemption clause in the guarantee. The court needed to determine the enforceability of the guarantee and the extent to which the exemption clause could protect Anand from the consequences of the unregistered charge.

The court held that Anand was not entitled to discharge the guarantee due to the failure to register the charge. The exemption clause in the guarantee did not exempt Anand from the consequences of the unregistered charge. The clause was intended to protect Anand from personal liability if the bank failed to register the charge but did not absolve him of his obligations under the guarantee. The court emphasised that the guarantee was a separate contract from the charge, and the exemption clause did not affect the enforceability of the guarantee. Consequently, Anand remained liable to the bank for the outstanding loan amount.

The final orders of the court confirmed that Anand was liable to the Commonwealth Bank of Australia for the full amount of the loan, including interest and costs, and that the guarantee remained enforceable despite the unregistered charge.