Corban v Levett

In *Corban v Levett and Anor* [1996] NSWCA 120, the New South Wales Court of Appeal considered a dispute concerning the enforceability of a guarantee. The appellant, Mr. Corban, sought to recover moneys allegedly owed under a guarantee provided by the respondents, Mr. and Mrs. Levett, in relation to a loan made by Mr. Corban to a company. The central issue was whether the guarantee was valid and enforceable against the respondents.

The court was required to determine whether the guarantee was vitiated by duress, specifically economic duress, and whether the respondents had established a defence of undue influence or unconscionable conduct. Furthermore, the court had to consider whether the guarantee was supported by adequate consideration and if there had been any misrepresentation by Mr. Corban that might render the agreement voidable.

The Court of Appeal found that the respondents had not established economic duress. It was held that while the circumstances were undoubtedly stressful for the respondents, their decision to sign the guarantee was not the result of illegitimate pressure that deprived them of any real choice. The court applied the principles of duress, emphasizing that the pressure must be illegitimate and that the party claiming duress must have had no practical alternative but to agree. Regarding undue influence and unconscionable conduct, the court found no evidence of a special relationship or exploitation of a disadvantage. The court also concluded that there was sufficient consideration for the guarantee and no misrepresentation that would invalidate the agreement.

Ultimately, the Court of Appeal dismissed the appeal, upholding the primary judge's finding that the guarantee was valid and enforceable.