Gresham Property Investments Limited v Global Consulting Services Pty Limited; Global Consulting Services Pty Limited v Gresham Property Investments Limited

Gresham Property Investments Limited and Global Consulting Services Pty Limited were involved in a dispute concerning guarantees and indemnities. The case was heard in the Federal Court of Australia. Gresham provided a loan to Global, which was secured by a guarantee from two co-guarantors. When Global defaulted on its loan, Gresham sought payment from the co-guarantors. However, the co-guarantors disputed their respective liabilities, leading to the current litigation.

The primary legal issues addressed by the court involved the rights of co-guarantors against each other, the general principle of equal contribution among co-guarantors, and exceptions to this principle. Specifically, the court had to determine whether an express agreement, a common intention, or the benefit obtained by one guarantor could alter the equal contribution principle. Additionally, the court examined whether the differing interests of the co-guarantors could affect the coordination of their liabilities and the extent to which one co-guarantor could claim priority under an inter-creditor deed.

The court held that the general principle of equal contribution among co-guarantors could be modified by an express agreement or a common intention to the contrary. The court found that the co-guarantors had an express agreement that deviated from the equal contribution principle. Furthermore, the court ruled that the differences in the co-guarantors' interests did not prevent their liabilities from being coordinate, and the co-guarantor who had obtained the whole benefit of the guarantee could not claim priority under the inter-creditor deed.

As a result, the court ordered the co-guarantors to pay their respective liabilities as per the express agreement. The court emphasised that the co-guarantors' differing interests did not impede the coordination of their liabilities, and the co-guarantor who had obtained the whole benefit of the guarantee could not claim priority under the inter-creditor deed. The final orders reflected these findings, directing the co-guarantors to adhere to the agreed-upon liabilities and not claim priority based on the benefit obtained.