Rankin v Morgan

The appeal concerned a guarantee provided by the respondent, Mr. Morgan, in favour of the appellant, Rankin. The dispute arose when Rankin sought to enforce the guarantee after a loan provided to a company, for which Mr. Morgan was a director, was replaced by a different loan. Mr. Morgan contended that he was discharged from his obligations under the guarantee because the original loan had been replaced by a different loan, or alternatively, because there had been a material change in the borrower's obligations. The matter was heard in the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the guarantee had been discharged by operation of law due to the substitution of the original loan with a new loan, and whether the terms of the new loan constituted a material alteration to the borrower's obligations that would release the guarantor.

The Court of Appeal, in dismissing the appeal, found that the facts did not give rise to a question of principle regarding the discharge of a guarantor. The Court was satisfied that the circumstances did not support Mr. Morgan's contention that he was discharged from his guarantee. The appeal was dismissed with costs.