Gattellaro v Westpac Banking Corporation

This case involved an appeal by Mr and Mrs Gattellaro against Westpac Banking Corporation to the High Court of Australia. The dispute originated from Westpac's proceedings to enforce a mortgage over the Gattellaros' home, which secured an advance to re-finance a company in which they were interested. The Gattellaros sought to escape liability under the mortgage by invoking relief under the Contracts Review Act 1980 (NSW), arguing they had been unfairly induced into personal liability for the company's debts and had materially changed their position to their disadvantage. Westpac contended that the Gattellaros had not altered their position to their detriment, asserting that Mr Gattellaro had already executed an unlimited personal guarantee in November 1985 for the company's debts, and that Mrs Gattellaro was also intended to execute this guarantee. Westpac's difficulty lay in its inability to produce this guarantee document.

The High Court was required to determine several legal issues. Primarily, it had to consider whether the Court of Appeal was correct in taking judicial notice that institutions like Westpac use a standard form of guarantee and inferring that the appellants had signed such a document. A further significant issue arose concerning the consequence of a person named as a co-surety not being shown to have executed a guarantee. The Court also had to consider whether Westpac should be granted leave to amend its Notice of Contention to include a specific ground and whether outstanding issues should be determined by the intermediate appellate court or the High Court itself.

The High Court ultimately dismissed the appeal. It acknowledged that the Court of Appeal had erred in relying on the doctrine of judicial notice to infer the existence and terms of the guarantee. However, Westpac was granted leave to amend its Notice of Contention to include a ground that succeeded. This ground established that Mr Gattellaro was bound by the November 1985 guarantee, which obliged him to pay the company's debts to Westpac. Consequently, the 1977 mortgage, which secured all monies for which Mr Gattellaro might be liable, remained applicable. As the 1986 mortgage did not increase the Gattellaros' liability, their appeal was dismissed. The Court ordered that Westpac should not have the costs of the appeal in the High Court due to its delay in conceding the error regarding judicial notice.