Tubb v Reissig (No 2)

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.