Commonwealth Bank of Australia v Witherow

The Commonwealth Bank of Australia filed a claim against Mr. Witherow, who had guaranteed a debt owed by a company to the bank. Mr. Witherow, in turn, initiated a third-party proceeding against the accountant, alleging that the accountant's negligent advice regarding the guarantee had caused his loss. The case was heard in the Supreme Court of Victoria. The central issue was whether the third-party claim transformed the bank's claim into an apportionable claim under the Wrongs Act 1958 Part IVAA, thereby allowing for apportionment of liability between the guarantor and the accountant.

The court examined whether the third-party proceeding made the bank's claim an "apportionable claim" under the statute. It determined that the third-party claim did not elevate the bank's claim to an apportionable claim, and consequently, the guarantor and the third party were not considered "concurrent wrongdoers." The court held that the third-party proceeding did not impact the bank's right to seek full recovery from the guarantor, as the statute's provisions did not apply to this situation. The accountant's negligence did not shield the guarantor from his primary liability to the bank.

As a result, the court found in favour of the bank, ruling that the guarantor remained fully liable to the bank for the guaranteed debt. The third-party claim against the accountant was dismissed as it did not affect the bank's claim against the guarantor. The court's decision underscored the distinction between claims that are subject to apportionment under Part IVAA and those that are not, emphasising that the third-party claim did not alter the primary liability of the guarantor. The final orders confirmed that the guarantor was liable to pay the full amount of the debt to the bank, without any reduction due to the accountant's negligence.