Davridge Pty Limited v Commonwealth Bank of Australia

Davridge Pty Limited (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the appellant's liability to the Commonwealth Bank of Australia (the respondent) under a guarantee.

The primary legal issue before the Court of Appeal was whether the appellant's liability under the guarantee had been discharged by the respondent's conduct. Specifically, the court had to determine if the respondent had, by its actions or omissions, released the appellant from its obligations as guarantor.

The Court of Appeal found that the respondent had not acted in a manner that would discharge the appellant's liability. The court applied established principles of guarantee law, holding that for a guarantor to be discharged due to the creditor's conduct, that conduct must be such as to prejudice the guarantor's rights or increase their liability without their consent. In this instance, the court concluded that the respondent's actions did not meet this threshold. The appeal was dismissed.