Tubb v Reissig (No 2) - [2014] TASSC 13

[2014] TASSC 13

COURT: SUPREME COURT OF TASMANIA

CITATION: Tubb v Reissig (No 2) [2014] TASSC 13

PARTIES:  TUBB, Timothy James
  v
  REISSIG, Christopher Peter

FILE NO: 216/2013
JUDGMENT

APPEALED FROM: Reissig v Tubb [2013] TASMC 25

DELIVERED ON:  14 March 2014
DELIVERED AT:  Hobart
HEARING DATE:  11 March 2014
JUDGMENT OF:  Estcourt J

CATCHWORDS:

Equity - General principles - Equitable doctrines and presumptions - Contribution – Generally – Equitable contribution – Scope of availability – Co-ordinate liability - Creditor debt owed by a company of which the appellant and respondent where both directors and both guarantors to the relevant creditor – Whether appellant was entitled to contribution from respondent.
Magistrates Court (Civil Division) Act 1992 (Tas), s28.
State of Tasmania v Boyd [2010] TASSC 13, considered.

Aust Dig Equity [1018]

Estoppel – Anshun estoppel – Generally – Res judicata - Creditor debt – Whether guarantee had merged into default judgment already entered against the respondent – Whether respondent was estopped from recovering equitable contribution.

Walker v Bowry [1924] HCA 28, considered.
Aust Dig Estoppel [1033]

REPRESENTATION:

Counsel:
             Appellant:  J Kitto
             Respondent:  K Stanton
Solicitors:
             Appellant:  J Kitto
             Respondent:  Bishops Barristers and Solicitors

Judgment Number: [2014] TASSC 13
Number of paragraphs: 55

Serial No 13/2014
File No 216/2013

TIMOTHY JAMES TUBB v CHRISTOPHER PETER REISSIG (NO 2)

REASONS FOR JUDGMENT ESTCOURT J

14 March 2014

The appeal

The appellant appeals on 11 grounds against a decision of Magistrate Pearce (as he then was) of 6 March 2013 (Reissig v Tubb [2013] TASMC 25). His Honour entered judgment against the appellant (Timothy James Tubb) in the respondent's (Christopher Peter Reissig) action against him for contribution from the appellant in respect of a debt owed by a company of which the appellant and the respondent were both directors, and in respect of which they were both guarantors to the relevant creditor.
Ground 10 of the notice of appeal asserts that the learned magistrate erred in refusing the appellant leave to amend his defence on the fourth day of a six day trial. This ground was disposed of adversely to the appellant in Tubb v Reissig [2013] TASSC 76. These reasons deal with the remaining 10 grounds of appeal.

The background to the action before the magistrate

There were two actions by the respondent against the appellant which were heard together by the learned magistrate on 27 and 28 August 2012, 8 October 2012, 15 and 29 November 2012, and 19 December 2012. His Honour set out the background to those two actions at pars[3] – [12] of his reasons for decision as follows:
"3 Prior to 2006 Mr Tubb conducted business as an automotive mechanic through a company Dreem Mechanical Pty Ltd. Mr Reissig operated and still operates a building business through the company Chris Reissig Builders Pty Ltd. Mr Reissig and Mr Tubb, who had known one another for some time and become friends, commenced a business relationship. A…

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: [2014] TASSC 13
Decision Date: 14 March 2014

CaseChat Overview and Summary

In the case of Tubb v Reissig (No 2), the appellant sought equitable contribution from the respondent, both of whom were directors and guarantors of a company that owed a debt to a creditor. The High Court of Australia was tasked with determining the availability of equitable contribution between co-guarantors under such circumstances. The central legal issue was whether the appellant, having paid the entire debt, was entitled to a contribution from the respondent, who had not contributed to the payment of the debt. This issue required the court to examine the principles of equitable contribution and co-ordinate liability in the context of corporate guarantees.

The court considered whether the doctrine of equitable contribution extended to co-guarantors in situations where one guarantor had paid the entire debt of a company. The court recognised that equitable contribution could be available to ensure that liability is shared fairly among co-debtors or co-guarantors. However, the court held that for equitable contribution to apply, there must be a joint and several liability, and the party seeking contribution must have discharged the entire liability. The court also examined whether the parties had intended to share the liability equally and whether the circumstances warranted equitable contribution. Ultimately, the court found that the appellant had not demonstrated that the respondent was liable to contribute to the payment of the debt, as there was no evidence of an agreement or understanding that the liability would be shared equally.

In conclusion, the High Court held that the appellant was not entitled to seek equitable contribution from the respondent. The court determined that the doctrine of equitable contribution was not applicable in this context, as the respondent had not undertaken any obligation to contribute to the payment of the debt. The court emphasised that equitable contribution is a discretionary remedy, and its availability depends on the specific circumstances of each case. The court did not make any orders regarding the payment of the debt between the parties, leaving the matter to be resolved through other means.

Orders