New South Wales
Court of Appeal
CITATION: Carr and Purves v Thomas [2009] NSWCA 208 HEARING DATE(S): 22 April 2009
JUDGMENT DATE:
23 July 2009JUDGMENT OF: Beazley JA at 1; Ipp JA at 1; McColl JA at 1 DECISION: The following orders and directions are made in each matter:
(1) Grant leave to appeal;
(2) Appeal allowed;
(3) Set aside the orders made by the trial judge;
(4) Order that the notice of motion for summary dismissal of the cross-claim be dismissed;
(5) Order the respondent to pay the appellants’ costs at first instance and on appeal. The respondent is to have a certificate under the Suitors’ Fund Act 1951 in respect of the costs of the appeal, if otherwise entitled;
(6) Direct the appellants to file a notice of appeal and pay any applicable filing fee thereon.CATCHWORDS: EQUITY – deed – effect of release of one of several persons liable to the person granting the release in a deed – whether agreement was a covenant not to sue – whether it was a release of all obligations such that all parties were released from liability - EQUITY – deed – co-ordinate liability – covenant not to sue – whether the party with the benefit of the covenant could be made subject of a claim of contribution by others with co-ordinate liability to the “releasor”. CATEGORY: Principal judgment CASES CITED: Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342
Baxter v Obacelo Pty Ltd [2001] HCA 66; (2001) 205 CLR 635
Burke v Lfot Pty Ltd [2002] HCA 17; (2002) 209 CLR 282
Cluness v Official Trustee in Bankruptcy (Federal Court of Australia, Davies J, 17 April 1998, unreported)
Commercial Bank of Tasmania v Jones [1893] AC 313
Deanplan Ltd v Mahmoud & Anor (1993) Ch 151; [1992] 3 All ER 942
Dorgal Holdings Pty Ltd v Buckley (1996) 22 ACSR 164
Duck v Mayeu [1892] 2 QB 511
Herskope v Perpetual Trustee (WA) Ltd [2002] NSWCA 153
James v Surf Road Nominees Pty Ltd [2004] NSWCA 475
Jeans v Bruce [2004] NSWSC 539
Johnson v Davies [1999] Ch 117; [1998] 2 All ER 649
Murray-Oates v Jjadd Pty Ltd [1999] SASC 537; (1999) 76 SASR 38
National Australia Bank Limited v Pollak [2001] FCA 1408; (2001) 186 ALR 44
Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd [2000] NSWSC 1120
Pollak v National Australia Bank Limited [2002] FCAFC 55; [2002] FCA 237
Re EWA [1901] 2 KB 642
Resource Equities Limited v Leon Carr Resource Equities Limited v John Garrett [2008] NSWSC 977
Robinson v Tait [2002] 2 NZLR 30
Solly v Forbes (1820) 2 Brod & Bing 38; 129 ER 871
Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 186 CLR 574
Walker v Bowry [1924] HCA 28; (1924) 35 CLR 48PARTIES: Leon Phillip Carr (First Appellant)
Nigel Charles Purves (Second Appellant)
Richard John Thomas (Respondent)FILE…
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- AGLC
- Carr v Thomas [2009] NSWCA 208
- Case
- [2009] NSWCA 208
- Decision Date
CaseChat Overview and Summary
In *Carr v Thomas*, the dispute concerned the effect of a deed of release granted by the plaintiff to one of several parties who were jointly and severally liable to the plaintiff. The appeal was heard by Beazley JA, Ipp JA, and McColl JA in the Court of Appeal of New South Wales.
The central legal issues before the Court of Appeal were whether the deed constituted a covenant not to sue, and if so, whether it operated as a release of all obligations, thereby discharging the liability of all co-obligors. Further, the court considered whether a party with the benefit of such a covenant could be subjected to a claim for contribution by other co-obligors who remained liable to the original obligee.
The Court of Appeal reasoned that the deed, properly construed, was a covenant not to sue the released party, rather than a release of the underlying obligation. Applying established equitable principles, the court held that a covenant not to sue one of several co-obligors does not, in equity, release the others from their liability. Consequently, the released party could still be subject to a claim for contribution from the other co-obligors.
The Court of Appeal allowed the appeal, set aside the orders of the trial judge, and dismissed the notice of motion for summary dismissal of the cross-claim. The respondent was ordered to pay the appellants' costs at first instance and on appeal, with a certificate under the *Suitors' Fund Act 1951* granted to the respondent in respect of the costs of the appeal, if otherwise entitled.
The central legal issues before the Court of Appeal were whether the deed constituted a covenant not to sue, and if so, whether it operated as a release of all obligations, thereby discharging the liability of all co-obligors. Further, the court considered whether a party with the benefit of such a covenant could be subjected to a claim for contribution by other co-obligors who remained liable to the original obligee.
The Court of Appeal reasoned that the deed, properly construed, was a covenant not to sue the released party, rather than a release of the underlying obligation. Applying established equitable principles, the court held that a covenant not to sue one of several co-obligors does not, in equity, release the others from their liability. Consequently, the released party could still be subject to a claim for contribution from the other co-obligors.
The Court of Appeal allowed the appeal, set aside the orders of the trial judge, and dismissed the notice of motion for summary dismissal of the cross-claim. The respondent was ordered to pay the appellants' costs at first instance and on appeal, with a certificate under the *Suitors' Fund Act 1951* granted to the respondent in respect of the costs of the appeal, if otherwise entitled.
Orders
Orders of the court
The following orders and directions are made in each matter: (1) Grant leave to appeal; (2) Appeal allowed; (3) Set aside the orders made by the trial judge; (4) Order that the notice of motion for summary dismissal of the cross-claim be dismissed; (5) Order the respondent to pay the appellants' costs at first instance and on appeal. The respondent is to have a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal, if otherwise entitled; (6) Direct the appellants to file a notice of appeal and pay any applicable filing fee thereon.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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