Hicks v Edser

In *Hicks and Anor v Edser* [1996] NSWCA 246, the New South Wales Court of Appeal considered a dispute concerning the enforceability of a guarantee. The appellants, Mr. and Mrs. Hicks, sought to set aside a guarantee they had provided in favour of the respondent, Mr. Edser, in relation to a loan made by Mr. Edser to a company. The core of the dispute revolved around allegations of misrepresentation and non-disclosure by Mr. Edser concerning the financial position of the company and the nature of the guarantee.

The Court of Appeal was required to determine whether Mr. Edser had made any misrepresentations or failed to disclose material facts that would vitiate the guarantee. Specifically, the court had to assess whether the appellants were induced to enter into the guarantee as a result of any misleading conduct or omissions on the part of Mr. Edser, and if so, whether this rendered the guarantee unenforceable.

The court applied established principles of contract law relating to misrepresentation and the duty of disclosure in guarantee transactions. It considered the evidence presented by both parties regarding the discussions that took place before the guarantee was signed and the information that was provided or withheld. The court's reasoning focused on whether Mr. Edser owed a duty of disclosure to the guarantors, and if so, whether that duty had been breached. The court found that, on the facts, there was no misrepresentation or non-disclosure that would entitle the appellants to have the guarantee set aside.

Consequently, the Court of Appeal dismissed the appeal and upheld the enforceability of the guarantee.