Mytian v Williams

Mytian sought an order discharging Williams from liability under a guarantee given to the bank for a loan made to Mytian's principal debtor. The bank and Mytian had varied the terms of the loan agreement without the surety's consent. The Court of Appeal considered whether this unilateral variation discharged the surety from liability under the guarantee. This case concerned the legal ramifications of a creditor modifying the terms of a loan agreement with the principal debtor without the surety's consent. The court needed to determine whether such a variation, in the absence of consent, discharged the surety from their obligations under the guarantee.

The court held that the surety's obligations under the guarantee were not discharged by the unilateral variation of the loan agreement by the creditor. The surety's liability under the guarantee was fixed by the terms of the guarantee itself, which remained unchanged. The variation of the underlying loan agreement between the creditor and the principal debtor did not affect the surety's obligations. Therefore, the surety remained liable under the guarantee despite the creditor's unilateral variation of the loan agreement. The Court of Appeal quashed the order of the primary judge, which had discharged the surety from liability under the guarantee. The surety remained liable under the guarantee, and no orders were made discharging the surety from liability.