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21 U.N.S.W.L.J. 845 (1998)
Garcia v National Australia Bank Ltd: Resurrecting the Corpus of Yerkey v Jones

handle is hein.journals/swales21 and id is 865 raw text is: UNSW Law Journal

CASE NOTE*
GARCIA V NATIONAL AUSTRALIA BANK LTD:
RESURRECTING THE CORPUS OF YERKEY V JONES
I. INTRODUCTION
The principles applicable to married women as guarantors of their husband's
debts have been the subject of vigorous legal debate. With the High Court's
recent decision in Garcia v National Australia Bank Ltd,1 a great deal of that
debate must now be considered resolved. Yet at the same time, the case throws
open new and greater questions: are we witnessing the growth of an entirely new
category of unconscionability?
II. THE BIRTH AND DEATH OF YERKEY V JONES
A. The Birth
In Yerkey v Jones,2 Dixon J enunciated the general principle that:
... if a married woman's consent to become a surety for her husband's debt is
procured by the husband and without understanding its effect in essential respects
she executes an instrument of suretyship which the creditor accepts without dealing
directly with her personally, she has a prima-facie right to have it set aside.3
Justice Dixon's principle has been widely expressed as a special equity4
favouring married women. There are in fact two limbs to this special equity. To
succeed on the first limb, the wife must prove that her husband induced her to
enter into the guarantee through undue influence. The legal propriety of this first
limb is not in doubt. To succeed on the second limb (which is the subject matter
*   Sean Bogan BEc LLB(hons) (Macq). Legal Research Assistant to the Equity Division of the Supreme
Court of New South Wales.
1   (1998) 155 ALR 614.
2   (1939) 63 CLR 649.
3   Ibid at 683.
4   See for example CIBC Mortgages Plc v Pitt [1994] 1 AC 200 at 207; Barclays Bank Plc v O'Brien
[1994] 1 AC 170 at 194; Comnonwealth Bank of Australia v McGlynn (1995) ANZ Conv R 81 at 82-3.

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