Sukkar v DAVIES

In *Sukkar v Davies and Ors* [1995] NSWCA 460, the New South Wales Court of Appeal considered a dispute concerning the enforceability of a guarantee. The appellant, Mr. Sukkar, sought to enforce a guarantee against the respondents, Mr. and Mrs. Davies, in relation to a loan provided by Mr. Sukkar to a company. The central issue was whether the guarantee, which was not signed by Mrs. Davies, was nonetheless binding upon her.

The Court was required to determine whether Mrs. Davies was bound by the guarantee despite her failure to sign it. This involved considering the principles of contract law, particularly regarding the formation of a binding agreement and the requirements for a guarantee to be enforceable. The Court also had to assess whether the conduct of Mrs. Davies, or the circumstances surrounding the purported guarantee, could give rise to an equitable estoppel that would prevent her from denying liability.

The Court of Appeal held that Mrs. Davies was not bound by the guarantee. It reasoned that a guarantee is a contract of indemnity and requires an offer and acceptance to be binding. In this instance, there was no evidence that Mrs. Davies had accepted the offer to guarantee the loan. Furthermore, the Court found that the elements of equitable estoppel were not made out. There was no clear representation or assumption by Mrs. Davies that she would be bound by the guarantee, nor was there any unconscionable conduct on her part that would justify imposing liability upon her.

Consequently, the Court dismissed the appeal, upholding the trial judge's finding that Mrs. Davies was not liable under the guarantee.