VIC Married Woman's Equity - Still Applicable under Property Law?
- Thread starter Le85
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Hi Le85,
Are you asking about the rule in Garcia v National Australian Bank, in relation to wives acting as a guarantee for their husband's business? My understanding is, the principles in that case are still somewhat applicable today.
That is, when a bank offers a guarantee to a wife for her husband's business, and (i) that loan/guarantee is not in itself in the interests of the wife (but it is in the interests of the husband or his business); and (ii) there is substantial risk that the husband may have placed undue influence on the wife to get there to sign the guarantee (e.g. stating that their relationship/marriage was at risk), then the bank is 'put on enquiry'. This triggers a bunch of requirements for the bank to complete, including speaking with the wife, ensuring the wife fully understands her risks and rights, and recommending the wife seek independent legal advice. It is applied less as a strict rule nowadays. It depends on the actual facts of a case and particular circumstances.
Is there a particular reason you ask this question?
Are you asking about the rule in Garcia v National Australian Bank, in relation to wives acting as a guarantee for their husband's business? My understanding is, the principles in that case are still somewhat applicable today.
That is, when a bank offers a guarantee to a wife for her husband's business, and (i) that loan/guarantee is not in itself in the interests of the wife (but it is in the interests of the husband or his business); and (ii) there is substantial risk that the husband may have placed undue influence on the wife to get there to sign the guarantee (e.g. stating that their relationship/marriage was at risk), then the bank is 'put on enquiry'. This triggers a bunch of requirements for the bank to complete, including speaking with the wife, ensuring the wife fully understands her risks and rights, and recommending the wife seek independent legal advice. It is applied less as a strict rule nowadays. It depends on the actual facts of a case and particular circumstances.
Is there a particular reason you ask this question?
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