CONTRACT – Joint and several claims – Judgment in default – Settlement between judgment creditor and one judgment debtor – Effect of settlement on remaining judgment debtors – Common law rule that release of one joint or joint and several debtor releases all – Whether rule applied to release of judgment debt – Whether rule abrogated by Wrongs Act 1958, s 24AA – Whether rule based on unity in underlying cause of action – Walker v Bowry (1924) 35 CLR 48 considered, Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 applied, Associated Retailers Ltd v Toys Unlimited Pty Ltd [2011] VSC 297 [183] disapproved – Wrongs Act 1958, ss 23A(1), 24AA.
PRACTICE AND PROCEDURE – Point of law raised on appeal – Whether exceptional circumstances allow point to be raised in interests of justice – Whether point could have been met with evidence at trial – Where no party at trial aware of current status of law – Coulton v Holcombe (1986) 162 CLR 1 applied.
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APPEARANCES:
Counsel
Solicitors
For the Applicant
Mr A G Uren QC with
Portfolio Law
Mr M Lapirow
For the First to Third Respondents
Mr E J Batrouney
Russell Kennedy Lawyers
For the Fourth Respondent
No appearance
McLEISH JA
HARGRAVE JA McDONALD AJA:
In 2016 the applicant agreed to accept a sum of money by way of settlement of a judgment debt. The judgment had been entered in default against four defendants in respect of unpaid loan obligations. An associate judge subsequently held that the applicant had, by this transaction, released the judgment debt and discharged the obligations not only of the paying debtor but also of the remaining judgment debtors.
The applicant seeks leave to appeal on the basis that the common law rule applied by the associate judge to reach that result has been abolished by statute or rules of court and that, in any event, the settlement transaction involved a promise not to sue, rather than any release, and so fell outside the common law rule. The first to third respondents, being the remaining judgment debtors, contest those claims and also contend that the applicant should not be allowed…
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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AGLC
Harplex Pty Ltd v Konstandellos [2018] VSCA 67
Case
[2018] VSCA 67
Decision Date
CaseChat Overview and Summary
Harplex Pty Ltd brought proceedings against Konstandellos and two other defendants seeking payment of a debt owed under a building contract. After judgment was entered in default against the defendants, Harplex settled with one of the defendants. Harplex then sought to enforce the judgment against the remaining defendants. The defendants argued that the settlement with one defendant released them from liability. The court had to determine whether the settlement released the remaining defendants from liability and whether the common law rule that a release of one joint or joint and several debtor releases all had been abrogated by statute. The court considered the nature of the settlement agreement and whether it amounted to a release or a covenant not to sue. The court also had to decide whether the point of law raised on appeal could be considered in the interests of justice, given that it was not previously raised at trial.
The court found that the settlement did not constitute a release of the remaining defendants. The settlement agreement did not explicitly state that it was a release, and the terms of the agreement did not establish that it was a release. The court considered that the onus was on Harplex to establish that the settlement was a release, and Harplex had failed to do so. The court also found that the common law rule had not been abrogated by statute, and the rule remained applicable. The court considered the authorities on the issue and found that the rule was based on the unity in the underlying cause of action. The court concluded that the rule had not been abrogated by s 24AA of the Wrongs Act 1958. The court also found that the point of law raised on appeal could be considered in the interests of justice, as it was a matter of significant public importance and no party had been aware of the current status of the law at the time of the trial.
The court held that the settlement with one defendant did not release the remaining defendants from liability. The court also held that the common law rule that a release of one joint or joint and several debtor releases all had not been abrogated by statute. The court found that the point of law raised on appeal could be considered in the interests of justice. The appeal was dismissed, and the judgment in default remained enforceable against the remaining defendants.