CBA v Carver [2014] WASC 15

The company borrower went into liquidation and the bank sued the guarantors. The guarantors claimed estoppel as a defence on the basis that the bank led them to believe they would not be bankrupted. The guarantors also cross-claimed for misleading and deceptive conduct and sought an order restraining the bank from suing on the guarantee.


To found an estoppel, a representation must be clear and unambiguous and there must be reliance and detriment.

The court noted that that the guarantors did not plead anything said or done by the bank representing that it would not enforce the guarantee or that the guarantors did anything in reliance on the bank letter proposing forbearance on certain terms and conditions. The detriment they pleaded was no more than their liability under the guarantee and the consequences of its enforcement.

The court struck out the defence.

Misleading conduct claim

The court found no loss or damage and dismissed the claim. The court noted that if the bank was entitled to judgment on the guarantee, the judgment could not be characterised as loss or damage:

It is meaningless to speak of the guarantors’ liability as a contingent liability so that they incur some further loss or damage when judgment is awarded against them. If the Bank is entitled to judgment, on the case it has pleaded and which is substantially admitted, it is because the money owing under the guarantee is now due and payable. … Nothing further needs to happen for this to be an actual liability. The payment of $65,000 to the DOCA Administrators also cannot be characterised as loss or damage…Even if it were established that the conduct of the Bank gave rise to the reasonable expectation pleaded, the loss would not be by reason of those facts, but by reason of the already existing liabilities under the guarantee and the debt to the DOCA Administrators.

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