Macfarlan JA at [1]; Emmett JA at [2]; Leeming JA at [11]
Decision:
Appeal dismissed, with costs.
Catchwords:
EQUITY - contribution between co-sureties - co-surety discharged less of borrower's indebtedness than another and obtained covenant not to sue from Bank - whether liability no longer "co-ordinate" with other co-surety - whether other co-surety's payment conferred benefit on first surety - whether dismissal of Bank's proceedings meant no longer co-ordinate liabilities - whether Carr v Thomas [2009] NSWCA 208 clearly wrong - whether disentitling conduct
Raoul Colinvaux (ed), Carver’s Carriage by Sea, (13th ed, 1982) Vol 2 Digest of Justinian, 14.2, 46.1.17, 46.1.39 D Foskett,…
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
AGLC
Lavin v Toppi [2014] NSWCA 160
Case
[2014] NSWCA 160
Decision Date
CaseChat Overview and Summary
The dispute in *Lavin v Toppi* concerned a claim for contribution between co-sureties. The plaintiff, Mr. Lavin, sought to recover from the defendant, Mr. Toppi, a proportion of the amount Mr. Lavin had paid under a guarantee. The co-sureties had guaranteed the indebtedness of a company, and Mr. Lavin argued that Mr. Toppi, having paid less of the company's debt and obtained a covenant not to sue from the bank, was still liable to contribute to Mr. Lavin's payment. The matter was heard in the Court of Appeal of New South Wales.
The central legal issues before the Court of Appeal were whether Mr. Toppi's liability to the bank remained "co-ordinate" with Mr. Lavin's, despite Mr. Toppi having paid less of the borrower's indebtedness and having received a covenant not to sue from the bank. The court also had to consider whether Mr. Lavin's payment conferred a benefit on Mr. Toppi, whether the dismissal of the bank's proceedings against Mr. Toppi meant their liabilities were no longer co-ordinate, and whether the decision in *Carr v Thomas* [2009] NSWCA 208 was clearly wrong, or if Mr. Toppi had engaged in disentitling conduct.
The Court of Appeal held that the principles of contribution between co-sureties are engaged when one surety pays more than their proportionate share of the guaranteed debt. The court found that Mr. Toppi's liability remained co-ordinate with Mr. Lavin's, and that the covenant not to sue did not extinguish this co-ordinate liability for the purposes of contribution. The court affirmed that the dismissal of the bank's proceedings against Mr. Toppi did not alter the co-ordinate nature of their liabilities. The court also found that *Carr v Thomas* was not clearly wrong and that Mr. Toppi had not engaged in disentitling conduct.
The appeal was dismissed, with costs awarded to the respondent.