Yerkey V Jones Case Study

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EXPLAIN IN YOUR OWN WORDS THE EQUITABLE PRINCIPLES EXPRESSED BY DIXON J IN YERKEY V JONES AND DISCUSS HOW THESE PRINCIPLES IMPACTED UPON THE HIGH COURT’S DECISION IN GARCIA V NATIONAL AUSTRALIA BANK.

In the case of Yerkey v Jones 1 (Yerkey v Jones), the judgment of Dixon J established a principle that operates in certain circumstances where a married woman provides a guarantee for her husband. While the principle has come under a significant amount of criticism in more recent times, it was reapplied in the case of Garcia v National Australia Bank. (Garcia v NAB).2

In the case of Yerkey v Jones, Estyn and Florence Jones entered an agreement to purchase a poultry farm located in Payncham from John and Mary Yerkey. The purchase price was to be paid in installments and it was a condition of the agreement that part of the purchase price was to be secured by a mortgage over a separate property at Wakerville owned by Mrs Jones – the agreement required Estyn Jones to give an undertaking that he would procure the execution of the mortgage by his wife.
Mr Jones “did not prosper in the new enterprise” and after 12 months of trying to run the poultry farm – the venture was abandoned and the property was placed in the hands of caretakers. Mr and Mrs Yerkey brought proceedings for the recovery of principal and interest under the second mortgage. Both Mr and Mrs Jones defended the action. Mr Jones was unsuccessful at first instance and while Mrs Jones was successful at first instance, she was ultimately denied relief in the High Court.

The importance of this decision is found in the Judgment of Dixon J, which articulates the existence of a special equity that protects a wife acting as a guarantor in relation to her husband’s debts. In ...

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...Table of Reference

A Books

• Phillip Clarke and Julie Clarke, Contract Law Commentaries, Cases and Perspectives, (Oxford University Press, 2nd ed, 2012) 432-3.

B Cases

• Garcia v National Australia Bank Ltd (1998) 194 CLR 395.

• Yerkey v Jones (1939) 63 CLR 649.

C Legislation

• Married Women’s Property Acts

D Other

• Wikimedia Foundation Inc, Married Women's Property Act 1882 (5 March 2014) Wikipedia .

• Australian Legal Information Institution, Garcia v National Australia Bank Ltd [1998] HCA 48; 6 CCL 81; 194 CLR 395; 155 ALR 614; 72 ALJR 1243 (6 August 1998) Austlii .

• The Legal Exchange, Extending the Garcia Principle (2 June 2012) The Legal Exchange .

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