Court of Appeal reins back on extent of disclosure between creditor and prospective surety

The Court of Appeal has recently re-examined the law relating to the duty of disclosure in relation to guarantees. It concluded that the formulation of the extent of the duty of disclosure between a creditor and prospective surety remains as in Hamilton v Watson 8 ER 1339 (ie. there is no duty to disclose facts or matters that were not unusual features of the contractual relationship between the creditor and debtor).

The case also decided that conclusive evidence clauses should be strictly construed with any ambiguities resolved in favour of the guarantor.

Francis Tregear QC appeared on behalf of North Shore Ventures Ltd.