Wayland v Tonkin No. Scciv-01-1621

WAYLAND v TONKIN
[2002] SASC 366
Full Court: Doyle CJ, Perry and Debelle JJ

DOYLE CJ: This is an application for an extension of time within which to appeal against a decision of the District Court. The District Court made an order in favour of the respondent on a claim against the applicant and another defendant to a right of contribution under two deeds of guarantee and indemnity.
For convenience, I will refer to the applicant as “the first defendant”, to the respondent as “the plaintiff” and to the first and second defendants collectively as “the defendants”.
In the course of hearing the application the Court heard argument on the merits of the appeal.
The Court refused the application for an extension of time at the conclusion of the oral argument. What follows are my reasons for joining in that order.
Facts
The plaintiff and the defendants executed two deeds of guarantee and indemnity (“the Mutual deeds”) on 19 September 1991, in favour of Mutual Community Friendly Society of SA (“Mutual”) to secure two loans from Mutual to Wag 2 Pty Ltd (“Wag”), a finance company established by the plaintiff and the defendants.
The plaintiff and the defendants established Wag in 1988. The plaintiff and the defendants were directors and shareholders of Wag. The capital of the company was to be obtained by borrowing money upon mortgage security over property owned by the plaintiff’s family trust company, Barrymore Holdings Pty Ltd (“Barrymore”). In other words, the plaintiff would secure funding for Wag by granting mortgages over property owned by Barrymore.
By separate loan agreements in November 1989 and September 1991, Mutual advanced to Wag sums of, respectively, $442,500 and $600,000 upon mortgage security granted by Wag and upon the security of the joint and several deeds of guarantee and indemnity executed by the plaintiff and the defendants (that is, the Mutual deeds).
At about that time, Wag was experiencing financial difficulties.
In July 1992, in response to a demand by Mutual for further security in relation to the outstanding balance owed by Wag to Mutual, Barrymore granted a mortgage over land to Mutual. Barrymore also paid arrears owed by Wag to Mutual. In November 1995, the plaintiff and Barrymore granted to Mutual two further mortgages over land.
In April 1997, National Mutual Health Insurance Pty Ltd (“National Mutual”), the assignee of the rights of Mutual under the above agreements, issued to Wag, Barrymore, the plaintiff and the defendants a notice demanding payment of $781,453.70 for default in due observance of the terms and conditions of the loan agreements. The notice of demand recited the advances of $442,500 and $600,000 by Mutual to Wag, the four mortgages granted to Mutual to secure those advances, and the Mutual deeds, as well as the assignment of rights from Mutual to National Mutual.
The plaintiff and the defendants resolved between them that the plaintiff would negotiate a settlement with National Mutual on behalf of “the guarantors”, that is on behalf of the plaintiff and the defendants. The minutes of a meeting between the plaintiff and the defendants in April 1997 record that the defendants “were unable to contribute towards a settlement at this point in time but that they would each pay their one thirds share of the debt when funds become available”. Following negotiations between the plaintiff and the solicitors for National Mutual, the plaintiff reported to the defendants that his offer of $200,000 “on behalf of the guarantors” of Wag was rejected. The plaintiff and the defendants agreed that the plaintiff would make an offer of $235,000.
In May 1997, the plaintiff and the solicitors for National Mutual agreed that National Mutual would, in addition to entering into possession of mortgaged property, accept payment of $235,000 in settlement of Wag’s indebtedness to National Mutual, subject to execution of a deed of agreement and release reflecting the terms of the compromise.
The minutes of a meeting between the plaintiff and the defendants in October 1997 record that upon settlement of the National Mutual debt, liability would transfer to the plaintiff and the defendants as guarantors and that, recognising that the defendants could not currently make any contribution to the agreed payment, the plaintiff had agreed to make the payment of $235,000 while still holding the defendants responsible for their one third shares of the liability. The plaintiff paid the $235,000 to National Mutual’s solicitors in November 1997. The plaintiff’s claim to a right of contribution against the defendants as his co-guarantors and co-indemnifiers under the Mutual deeds arose in respect of that payment.
The Judge found that in negotiating the settlement the plaintiff acted “with the knowledge, acquiescence and consent” of the defendants.
National Mutual, Wag, the plaintiff and the defendants executed a deed of agreement and release on 24 November 1997 (“the Mutual release”). The Mutual release recited, among other things, the advances by Mutual to Wag, the mortgages granted to Mutual by Barrymore and the Mutual deeds. The recitals included the following, as summarised by the Judge (with the Judge’s brackets and emphasis):
“M. ‘[The plaintiff] has agreed to repay part of the monies advanced pursuant to his obligations under the First and Second Guarantees’ and Wag has agreed to the sale by Mutual of the land [the Gawler property].
N. [Mutual] has agreed on receipt of the payment by [the plaintiff] and the sale of the land to release the securities granted by [the plaintiff and Barrymore] referred to in the Recitals above and to release [Wag] from its obligations under the security instruments and to release [the plaintiff, the first defendant and the second defendant] from their obligations under the First and Second Guarantee upon the following terms and conditions.”
“First and Second Guarantees” there refers to the Mutual deeds.
In addition, the Mutual release contained the following clauses, as cited by the Judge (with the Judge’s brackets and emphasis):
“2.1 [The plaintiff] has agreed to pay to [Mutual] the sum of Two Hundred and Thirty Five Thousand Dollars ($235,000.00) on or before the 29^th day October 1997.
3. RELEASE
In consideration of the sale of the Land and the payment by [the plaintiff] [Mutual] hereby agrees to release acquit and forever discharge [Wag] and McCulloch, Wayland and Tonkin from all liability.”
McCulloch is the second defendant, Wayland is the first defendant and Tonkin is the plaintiff.
It was the first defendant’s evidence at trial that he understood clause 3 of the Mutual release to discharge not only the plaintiff and the defendants from all liability to National Mutual, but also to discharge the defendants from any liability they might have had to contribute to the plaintiff’s payment of $235,000 to National Mutual.
In June 1999 the plaintiff and the first defendant met to discuss the plaintiff’s right of contribution from the first defendant as a co-guarantor. The minutes of the meeting record that the plaintiff wanted to be satisfied that the defendants were going to pay him their one third shares of “the residual debt”, which I take to mean the balance of the amount the plaintiff had paid to National Mutual on behalf of Wag minus the amount recovered by Wag from its debtor Mill Holdings Pty Ltd (“Mill”), and applied in reduction of the claim. The first defendant explained his dissatisfaction with the compromise agreement with Mill. The substance of his complaint was that the compromise left the guarantors, in particular the defendants, in the position of having to cover Wag’s debt to National Mutual, when he had anticipated that Wag would recover sufficient money from Mill or others to cover the payment made to National Mutual.
At the meeting, the plaintiff advised that the second defendant was making payments to him by way of contribution. The first defendant told the plaintiff about his difficult financial position and about his plans to profit from a land subdivision project into which he had entered with a partner. The plaintiff indicated “that he would favourably consider waiting for settlement until the project started to generate net cash flow”. In subsequent communications with the plaintiff and the plaintiff’s solicitor, the first defendant claimed that the meeting had resulted in a “contract” between himself and the plaintiff by which the plaintiff had agreed that he would not seek to recover any payment from the first defendant until the completion of the land project.
There was evidence before the Judge to support the plaintiff’s contention that the first defendant understood that the defendants were liable to the plaintiff in respect of the payment to National Mutual, and that the defendants would have to discharge that liability to the extent that the plaintiff could not recover by way of money paid to Wag by Mill. On the other hand, the substance of the first defendant’s evidence about events after the execution of the Mutual release was that at no stage did he accept or acknowledge that he had any liability to contribute to the plaintiff’s discharge of Wag’s indebtedness. He claimed that when he referred to “his debt” to the plaintiff he meant “if proven”, and that he had talked about payment after the completion of the land project (referred to above) to delay or put off a claim by the plaintiff. Ultimately the Judge resolved that issue in favour of the plaintiff.
The Judge said (at [38]):
“Upon all of the evidence, I am satisfied that, in negotiating the settlement of Wag’s considerable and long-standing indebtedness to Mutual, and in providing $235,000 for payment to Mutual on 12 November 1997 (with a cheque drawn on the bank account of Barrymore, the trustee of his family trust) in partial discharge of that indebtedness, the plaintiff acted with the knowledge, acquiescence and consent of both the first and second defendants, who were his co-guarantors and co-indemnifiers in respect of that liability. I am also satisfied, notwithstanding the denials of the first defendant, that both of the defendants had previously acknowledged and accepted legal responsibility for their shares of that liability.”
The Judge’s ultimate findings are set out at [66] of his reasons. The Judge found (at point 8 of that para) that the plaintiff paid the $235,000 to National Mutual on behalf of himself and the defendants as joint and several co-sureties under the Mutual deeds, and that that amount was more than the plaintiff’s share of the amount then outstanding to National Mutual. Applying the principle that a right of contribution arose when one co-surety paid or provided more than his or her proper share of the principal debt, the Judge concluded (at [67]) that:
“the plaintiff is entitled to contribution from his co-sureties, the defendants, in respect of the $235,000 which he provided to Mutual on behalf of himself and the defendants twelve days before the Mutual release was executed … . His right of contribution arose on 12 November 1997, when he paid or provided more than his proper share of the amount then outstanding … . I do not consider that the Mutual release should be construed (notwithstanding its recitals and terms) as having any legal effect upon that payment which had previously been made. The effect of that payment, in my view, was to reduce by that amount (and from that date) the extent of the common obligation then shared by the plaintiff and his co-sureties.” (The emphasis is the Judge’s).
The Judge ordered that the defendants each pay a one third share of the $235,000, plus interest and costs. The Judge was advised that the plaintiff had reached an agreement with the second defendant.
In this Court, the first defendant applies for an extension of time in which to institute and set down the appeal against the Judge’s decision.
Application for an Extension of Time
The judgment in favour of the plaintiff was entered on 3 August 2001. By R 95.02 of the Supreme Court Rules, the first defendant had 14 days within which to appeal.
The notice of appeal was filed three months late, on 21 November 2001. The first defendant filed an affidavit seeking to explain his delay in instituting the appeal.
The first defendant explains that he was disillusioned or despairing in the aftermath of the lengthy and costly trial and as a result of the judgment against him. He expected that an appeal would be lengthy and prohibitively expensive. The inference is that by the time he decided to appeal, the time for instituting the appeal had expired. He did not seek advice as to the prospects of an appeal until November 2001, several months after the judgment was delivered.
The first defendant says that between August and November 2001 he instructed his solicitor to attempt to reach a compromise with the plaintiff. In about October 2001 he made an offer to compromise the judgment debt, which was not accepted. Only then did he appeal.
Counsel for the first defendant submitted that after the institution of the appeal it was not set down in time (by R 95.11, an appeal must be set down within six months of institution) because the parties could not agree the contents of the appeal books. The first defendant’s solicitor accepted responsibility for not applying within time for an extension of time within which to set down the appeal.
Counsel for the first defendant also submitted that the delay has not prejudiced the plaintiff and that the plaintiff remains at liberty to enforce the judgment. On the other hand it is said that enforcement of the judgment would have an adverse effect on the first defendant. In his affidavit the first defendant describes the effect that enforcement of the judgment is likely to have on his position as Chairman and Chief Executive Officer of a charitable organisation and on the organisation itself.
Finally it was submitted that the appeal has substantial merit and raises a question of general importance relating to contribution between co-sureties.
The first defendant’s explanation for his delay in instituting the appeal is unpersuasive. His assertion that he did not obtain advice about an appeal earlier than he did cannot be accepted at face value. He was in contact with, or able to contact, his solicitors because they were negotiating for a compromise with the plaintiff. It would be extraordinary if the issue of a possible appeal were not discussed. The trial and its result may have been a difficult experience. But the first defendant is an experienced businessman with knowledge and experience in negotiation and in dealing with lawyers. He was in a position to obtain advice about what an appeal would involve, and should have done so, particularly as on his own assertion he did not have the means to meet the judgment debt. The appropriate course would have been to institute the appeal and then commence or continue negotiations.
The first defendant has offered no adequate explanation for the delay in instituting the appeal, nor has he provided any good reason for granting an extension of time.
The possible consequences of enforcement of the judgment for the first defendant, or for the charitable organisation in which he is involved, do not provide a sufficient basis on which to grant an extension of time in the absence of an adequate explanation for the delay.
I am not satisfied that this is a proper case in which to grant an extension of time within which to appeal, having regard to the substantial delay in filing the purported Notice of Appeal, and in setting down the appeal once that had been done. (I pass over the question of whether that could be done before an extension of time was granted).
I consider in any event that there is no merit in the appeal, for reasons discussed later in this judgment. That is a further reason for refusing an extension of time.
I would refuse the application for an extension of time within which to appeal.
Grounds of Appeal
The central issue on the appeal, if an extension of time is granted, is whether the Mutual release extinguished any right of contribution which the plaintiff might have had against the defendants by virtue of the Mutual deeds and the plaintiff’s payment in discharge of Wag’s indebtedness to National Mutual.
The first ground of appeal raises that issue. The first defendant contends that the Judge should have held that the plaintiff’s right to contribution from the first defendant was extinguished by the terms of the Mutual release, which the first defendant describes as having “released and extinguished the principal debt.” The first defendant submits that the Mutual release extinguished any right of contribution because the release extinguished the principal debt (that is, the debt owed by Wag to National Mutual in respect of which the plaintiff and the defendants were co-sureties) and thereby also extinguished all obligations to repay the debt whether by way of guarantee, indemnity or contribution. The plaintiff did not reserve any right of contribution that might have been extinguished by the Mutual release, and so his claim failed.
The first defendant further contends that the Judge erred in holding that the plaintiff’s right to contribution arose when he made the $235,000 payment, and in holding that because that occurred prior to the execution of the Mutual release, the release had no effect on the plaintiff’s right to contribution. The first defendant submits that the compromise agreement between the plaintiff and National Mutual was subject from the outset to the execution of a release, and that any right of contribution had to be found in the Mutual release.
The second ground of appeal relates to the Judge’s finding that the plaintiff’s alternative claim based on misleading and deceptive conduct was made out. The substance of the claim was that in allowing the plaintiff to make the payment to National Mutual believing that he would have a right of contribution from the defendants, and in allowing him to execute the Mutual release, in circumstances where the defendants obtained the benefit of the Mutual release but did not contribute or intend to contribute to the payment, the defendants engaged in misleading and deceptive conduct contrary to s 56 of the Fair Trading Act 1987 (SA).
The first defendant contends that the Judge erred in finding that this alternative claim was made out, and in particular contends that the evidence did not support a finding that any allegedly misleading and deceptive conduct was relied upon by the plaintiff in executing the Mutual release.
The third ground of appeal is related to the second. It is that the Judge erred in granting to the plaintiff an extension of time, if it was necessary, to give effect to the alternative claim for misleading and deceptive conduct.
I do not propose to deal with the second and third grounds of appeal. It is not necessary to do so because I would refuse the application for an extension of time. The Court did not have the benefit of oral submissions on those grounds, the main issue, apart from the delay in instituting the appeal, being the right of contribution and whether it was extinguished.
Right to Contribution
The substance of the first ground of appeal is that the execution of the Mutual release, without any reservation of a right to contribution, extinguished any right to contribution that the plaintiff may have had as against the defendants. Mr Hayes QC, counsel for the first defendant, submitted that by releasing the debt and the guarantors of the debt, the Mutual release extinguished the debt and thereby also extinguished the obligations under the guarantee of the debt, including any obligations on the part of the co-guarantors to contribute to the payment made by the plaintiff in his capacity as one of the guarantors.
In answer to a question from the Bench, Mr Hayes submitted that that would also be the case if the plaintiff had simply paid the debt to National Mutual in full, that is, if there had been no compromise or release. He submitted that payment in full discharging the debt would leave the plaintiff without a right to contribution, if the plaintiff did not reserve such a right.

With respect, that submission cannot be correct. A right to contribution as between co-sureties arises when one of them pays or provides more than his or her share of the principal debt: Mahoney v McManus (1981) 180 CLR 370 at 376 Gibbs CJ. If the debt is discharged, all of the co-sureties are released from their common obligation to the creditor (see Mahoney v McManus at 380 Gibbs CJ). But the release of the co-sureties from their obligation to the creditor does not release the co-sureties who have not contributed from their obligation to contribute to the co-surety who has paid more than his or her share of the debt. In other words, it is the making of the payment by one of the co-sureties which gives rise to the right to contribution, and it is not to the point that the payment releases the co-sureties from their obligation to the creditor.
As I understand his submission, Mr Hayes submitted that the combination of part-payment of the debt (that is, payment of the agreed compromise amount) and execution of the release results in the debt being extinguished, as distinct from merely being discharged, with consequent extinguishment of other rights, including the right to contribution. There is no force in that submission.
A situation analogous to the present case arose in Walker v Bowry (1924) 35 CLR 48. Walker and Bowry were joint and several co-guarantors of sums advanced by a bank to a company. After the company went into liquidation, the bank sued Walker on the guarantee and recovered judgment against him for just over £2,865. In a compromise agreed between Walker and the bank, Walker paid to the bank £800 in full satisfaction and discharge of the judgment debt, and the bank executed a release in his favour in respect of the judgment debt and any claims under it. In other words, Walker made part-payment of the debt and was released from all liability in respect of the debt (see Isaacs ACJ at 54). Walker claimed £400 by way of contribution from Bowry.
The Court held that the debt on which Walker’s and Bowry’s guarantee operated was the judgment debt as fixed by the compromise agreement at £800; that Walker and Bowry, as co-guarantors, were jointly and severally liable for that debt; that Walker paid more than his share of the debt; that the discharge of the debt and the execution of the release released Bowry as well as Walker from the debt; and finally that Walker was entitled to contribution from Bowry in the amount of £400.
Starke J said (at 59):
“We therefore arrive at this result: that the Bank can never recover, against the persons who were sureties under the guarantee, more than the sum of £800 which it received from Walker. The liability of the sureties under the guarantee became fixed, so to speak, by releasing the judgment debt, in this sum of £800. And Walker, one of the sureties, has paid the whole of it. ‘One of several co-sureties paying the debt, or more than his proportion, is entitled … to contribution from the others in respect of the excess … the rule does not depend upon contract, but upon an equity arising out of the mere fact that the parties are sureties for the same principal debt, and in the same engagement with the creditor’ (Rowlatt’s Principal and Surety, p.216).”
There is a point of distinction between Walker v Bowry and the present case, in that the Mutual release expressly released the first defendant (and the second defendant) as well as the plaintiff. Nothing turns on the distinction, however, because the payment and release in Walker v Bowry just as effectively released Bowry from his obligations as co-guarantor of the debt as if he had been named in the release. In other words, both Bowry in that case and the first defendant in the present case were released from liability for the debt. Bowry had nevertheless to contribute to his co-guarantor’s payment of the debt.
Part-payment, or a compromise payment by a guarantor, of the debt and execution by the principal creditor of a release from liability under a guarantee of the debt does not extinguish the right of the paying guarantor to contribution, any more than does simple discharge of the debt by payment in full.
Mr Hayes submitted that a guarantor loses the right to claim indemnity from the principal debtor where the creditor releases the principal debtor from liability to pay the debt. Applied to the present case, the submission is that the Mutual release, in releasing the principal debtor Wag from the debt, extinguished the rights of the plaintiff and the defendants as guarantors, to claim indemnity from Wag in respect of any sum paid by them or one of them in satisfaction of the debt. Mr Hayes seeks to rely on the submission to relieve the first defendant of any liability to contribute to the payment made by the plaintiff to National Mutual, on the basis that the first defendant would be prejudiced by having to contribute in circumstances where he had been deprived of his right to claim indemnity from Wag.
I reject the submission. If accepted, the submission would mean that a guarantor who discharges a debt would have no right to claim indemnity from the principal debtor where the creditor accepts the guarantor’s payment and releases the principal debtor from the debt. It would mean that the Mutual release extinguished the plaintiff’s right to claim indemnity from Wag for his payment of $235,000 to discharge Wag’s debt to National Mutual. The authorities advanced in support of the submission do not support it. They support the proposition that the release of the principal debtor also releases the guarantor from any claim by the creditor, so that the creditor cannot then pursue the guarantor and the guarantor in turn claim an indemnity from the principal debtor. But the release of Wag, the plaintiff and the defendants from their liability to National Mutual did not extinguish the plaintiff’s and the defendants’ rights to claim indemnity from Wag, or their rights to claim contribution from one another, in respect of a payment made to National Mutual to discharge the debt.
The plaintiff’s right to contribution from the first defendant arose when he paid more than his share of the debt to National Mutual. The Mutual release did not extinguish that right. The first ground of appeal cannot be maintained. The challenge to the Judge’s decision lacks any substance.
Conclusion
For those reasons I joined in the order refusing the application for an extension of time within which to appeal.
It is not necessary to give reasons for the order as to costs that we made when refusing the extension of time.
PERRY J: In this matter, I concurred in the order dismissing the application for an extension of time within which to appeal.
I agree with the reasons now published by the Chief Justice for taking that course.
DEBELLE J: I agreed with the order that the application to extend time within which to appeal should be dismissed. The facts are recited in the reasons of the Chief Justice and need not be repeated. My reasons for dismissing the application are as follows.
The first defendant was some three months late in instituting this appeal. One of the matters which he must establish in order to secure an extension of time in which to appeal is that he has an arguable case: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196; Palata Investments Ltd v Burt and Sinfield Ltd [1985] 1 WLR 942 at 946; Jackamarra v Krakouer (1998) 195 CLR 516 at 519 – 520; McGregor-Dey v SA College of Advanced Education (unreported, Supreme Court of SA, Judgment No. S4406); Wacyk v Plane (unreported, Supreme Court of SA, Full Court, Judgment No. 38, 8 July 1987). In many cases, it might be difficult to determine whether an applicant for an extension of time within which to appeal has an arguable case: see the observations of Lord Denning MR in R v Secretary for the Home Department; ex parte Mehta [1975] 1 WLR 1087 at 1091. No such difficulty exists in this case.
The first defendant contended that the execution of the deed of release on 24 November 1997 (the Mutual deed of release) extinguished any right to contribution that the plaintiff might have had against himself and the other sureties. The submission must fail.
Where one of several guarantors pays the creditor the amount of the guaranteed debt and that guarantor pays more than his just proportion of the liability, the guarantor is entitled to contribution from his co-sureties: Mahoney v McManus (1981) 180 CLR 370 per Gibbs CJ at 376 – 377 and per Brennan J at 387 – 388. Although Gibbs CJ and Brennan J differed in their ultimate conclusion, they agreed on the relevant principles. It is the unequal contribution so enforced that establishes the right to contribution on the part of the party who has provided more than his just proportion: McLean v Discount and Finance Ltd (1939) 64 CLR 312 per Starke J at 347. The right of contribution is an equitable principle and the equity arises from the fact that the parties are co-sureties of the same principal debt or liability and is not founded upon contract: Dering v Earl of Winchelsea (1787) 1 Cox 318 (29 ER 1184) approved in McLean v Discount and Finance Ltd per Starke J at 341. See also Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 per Kitto J at 350 – 351 and Goff and Jones, The Law of Restitution (5^th ed) 399 – 409.
It is readily apparent that the second defendant has no prospect of success on his intended appeal. His application to extend the time within which to appeal must therefore be dismissed. However, the guarantor must establish that the payment was made in discharge of the liability of the sureties under the guarantee and not in discharge of the liability of the principal debtor, since there is no principle of law which requires a person to contribute to an outlay because he has obtained a material benefit from it: Mahoney v McManus per Gibbs CJ at 377 and per Brennan J at 387 – 388.
In this case, the terms of the recitals in the Mutual deed of release clearly state that the payment made by the plaintiff was made under the guarantee. It is clear that the payment to Mutual was not by way of a loan to the company Wag 2 Pty Ltd which in turn then paid Mutual. In this respect, I refer especially to recitals M and N in the deed. In consequence, the plaintiff was entitled to recover contribution from his co-sureties to equalise the burden as between himself and the other sureties. The fact that the plaintiff was able to negotiate a compromise which reduced the potential liability of the sureties only serves to reinforce the equity in his being able to seek contribution. That is the position at law and equity. That position was in no respect altered by the terms of the Mutual deed of release. Indeed, it was reinforced by the terms of that deed.
Mr Hayes QC, who appeared for the second defendant, placed particular reliance on the decision in Griffith v Wade (1966) 60 DLR (2d) 62. But that decision is plainly distinguishable. In that case, the debt to a bank had been discharged by payment from one of the sureties. Thereafter, the appellant entered into arrangements with all of the other sureties other than the respondent. These arrangements were held to deny the appellant any right to contribution from the respondent. It is the particular facts of that decision which distinguish it from this case where no arrangements have been made with other sureties. The decision in Hobart v Stone (1830) 10 Pick. 215, a decision of the Supreme Court of Massachusetts which was relied upon in Griffith v Wade, is also distinguishable. In that case, a father who was surety for his son’s indebtedness and had paid the indebtedness had by his will released his son from his liability to repay him. On the father’s death, the executors sued a co-surety for contribution. It was held that the release by the father of his son’s debt discharged the co-surety from the liability to contribute. In both cases, the surety who was seeking contribution had made an agreement either with the debtor or the co-sureties which affected the liability of a co-surety to contribute. Nothing of that kind has occurred in this case.

[2002] SASC 366

5 November 2002