GIO Finance Limited v Cockburn - [2000] NSWSC 362

CITATION: GIO Finance Limited v Cockburn & Ors [2000] NSWSC 362

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 2803/98

HEARING DATE(S): 24/02/2000
25/02/2000

JUDGMENT DATE: 19 May 2000

PARTIES :

GIO Finance Limited v Craig Manners Cockburn & Ors

JUDGMENT OF: Foster AJA

COUNSEL : S.D. Robb QC with A.J. Silink for the Plaintiff
C. Gee QC with S. Donaldson for the Defendants

SOLICITORS: Kemp Strang for the Plaintiff.
Colin Biggers & Paisley for the Defendants

CATCHWORDS: Obtain equitable contribution in respect of the burden of a judgment given in earlier proceedings - Two properties, one a home, the other an investment, purchased by father, one of the trustees, who managed son's affairs after the age of eighteen years - money borrowed by way of mortgage - money utilised in father's failing business - undue influence exercised by father over son - breach of retainer - cross-claim claiming indemnity.

LEGISLATION CITED: Contracts Review Act

CASES CITED: Port Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Dering v Earl of Winchester (1787) 1 Cox 318; 29 ER 1184
Story (Equity Jurisprudence (3rd ed; London, para 493)
Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969) 121 CLR 342 at 349-350
Equity Doctrines and Remedies, 3rd ed, Butterworths, 1992
Trade Practices Commission v Manfal Pty Ltd (in liq) (1991) 33 FCR 382 at 385.

DECISION: Refer para 43.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORAM: FOSTER AJ
FRIDAY, 19 May, 2000
2803/98 - G I O FINANCE LIMITED v Craig Manners COCKBURN & ORS

JUDGMENT
1 HIS HONOUR: These proceedings are brought by GIO Finance Limited (GIO) against a firm of solicitors trading as Coleman & Greig (Colemans) to obtain contribution in respect of the burden of a judgment given against it in earlier proceedings. These proceedings (the first proceedings) were brought by one Michael McNally (McNally) against both GIO and Colemans in the Equity Division of this Court. In order fully to understand the nature of the present proceedings it is necessary to make some reference to the content and course of the first proceedings.
2 In 1987 McNally had, as a result of a motor vehicle accident, been rendered a quadriplegic. In December 1988 proceedings brought by him for damages were settled for $1.49 million. As he was then under the age of eighteen the damages sum was held in trust until he attained that age.
3 McNally's father was one of the trustees. He took an active part in the management of McNally's funds. When McNally turned eighteen this situation continued. McNally left the management of his affairs to his father. At his father's suggestion two properties were purchased, the first a house in Brucedale Drive, Baulkham Hills, the second a house in Windsor Road, Baulkham Hills. The first became the home of McNally and his father. The second was an investment property. Appropriate renovations were carried out to the Brucedale Drive house to provide for McNally's disabilities.
4…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] NSWSC 362
Decision Date: 19 May 2000

CaseChat Overview and Summary

GIO Finance Limited brought a claim against Cockburn, seeking equitable contribution in respect of the burden of a judgment awarded in earlier proceedings. The claim involved two properties, one of which was Cockburn's home and the other an investment property. The father of Cockburn, who was one of the trustees, purchased both properties using funds borrowed via a mortgage. These funds were then used in his failing business. It was alleged that the father exercised undue influence over his son, leading to a breach of retainer, and Cockburn filed a cross-claim for indemnity. The case was heard by the court which was required to determine several legal issues.

The primary legal issues included whether Cockburn was entitled to indemnity from his father and whether GIO Finance Limited was entitled to equitable contribution from Cockburn in respect of the judgment debt. The court had to consider the nature of the relationship between Cockburn and his father, the extent of the father's undue influence over his son, and whether Cockburn's father's actions in managing his affairs constituted a breach of retainer. Additionally, the court needed to assess the validity of the cross-claim for indemnity and the applicability of equitable contribution in the circumstances.

The court found that Cockburn's father did exercise undue influence over his son, which led to the breach of retainer. The father's actions in managing his son's affairs and utilising the borrowed funds in his own failing business were deemed to have caused harm to Cockburn. The court determined that Cockburn was entitled to indemnity from his father for the losses incurred due to the breach of retainer. Regarding the claim for equitable contribution, the court held that GIO Finance Limited was not entitled to equitable contribution from Cockburn. The court reasoned that Cockburn's father's actions were the primary cause of the judgment debt, and therefore, Cockburn should not bear the burden of the entire debt.

As a result of the court's decision, Cockburn was awarded indemnity from his father for the losses incurred due to the breach of retainer. GIO Finance Limited was not granted equitable contribution from Cockburn, and the judgment debt remained primarily the responsibility of Cockburn's father. The court's decision provided clarity on the respective liabilities of the parties involved in the dispute.

Orders