Hemming v Malecki

In *Hemming and Anor v Malecki and Ors* [1997] NSWCA 144, the New South Wales Court of Appeal considered a dispute concerning the enforceability of a guarantee. The appellants, Hemming and Anor, sought to enforce a guarantee against the respondents, Malecki and Ors, in relation to a loan agreement.

The central legal issue before the Court of Appeal was whether the guarantee was valid and enforceable, notwithstanding certain alleged misrepresentations made by the creditor to the guarantors. Specifically, the court had to determine if the guarantors were discharged from their obligations under the guarantee due to the creditor's conduct.

The Court of Appeal held that the guarantors were not discharged from their obligations. The court applied the principle that a guarantor is only discharged from liability if the creditor has done something that amounts to a breach of a duty owed to the guarantor, or if the creditor has acted in a way that is inconsistent with the contract of guarantee. In this instance, the court found that the alleged misrepresentations did not amount to conduct that would vitiate the guarantee or discharge the guarantors from their liability. The appeal was dismissed.