Hearing:	17 November 2015
Court:	Ellen France P, Randerson and Stevens JJ
Counsel:	R J Hollyman and P M C Gibbs for First and Second Appellants in CA441/2014 and First and Second Respondents in CA608/2014 M J W Lenihan for First and Second Respondents in CA441/2014 and Appellant in CA608/2014
Judgment:	25 February 2016 at 3.00 pm

JUDGMENT OF THE COURT

CA441/2014:
AThe application for leave to raise a new point on appeal, relating to the counterclaim, is declined.
BThe application for leave to adduce further evidence in relation to the same point is declined.
CThe appellants must pay the respondent costs in the sum of $2,500 plus reasonable disbursements in relation to both applications.
DThe appeal is dismissed.
EThe cross-appeal is dismissed.
FOn the appeal and cross-appeal there is no order as to costs.
CA608/2014:
GThe appeal is dismissed.
HThe cross-appeal is dismissed.

On the appeal and cross-appeal there is no order as to costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Stevens J)

Table of Contents

Para No

Introduction [1]
Factual background [8]

Westpac bond facility and guarantee [11]
The 2009 loan facilities [16]

Counterclaim – background [25]

Events of December 2011 and January 2012 [29]
Distribution of the DigiTech settlement funds [31]

High Court findings as to liability [36]

The “no loss” agreement  [36]
Intention for unequal sharing  [37]
Is unequal sharing just?  [39]
Appropriate amount of contribution  [41]
Counterclaim  [45]

Quantum judgment [54]

Costs [62]

Issues on appeal  [64]
Application for leave to raise a new point  [65]
Contribution obligations  [72]
The Dobson-Reid mortgage agreement  [85]
Exclusion of contribution to interest  [88]
Clean hands  [93]
Calculation of judgment interest  [107]
Counterclaim  [110]
Costs  [124]
Costs on appeal  [134]
Result  [136]

Introduction

This appeal concerns a challenge to some of the findings made by the High Court in a dispute about the obligations of contribution between co-guarantors of a bank loan. The normal rule as to the right to contribution in equity is that co‑guarantors will share equally, but the ultimate determining factor as to liability between guarantors is what a just apportionment should be.[1] The dispute came before Moore J, who delivered two judgments dealing respectively with liability and quantum.[2]
[1]Trotter v Franklin [1991] 2 NZLR 92 (HC); Scholefield Goodman & Sons Ltd v Zyngier [1986] AC 562 (PC); and Laws of New Zealand Guarantees and Indemnities (online ed) at [157].
[2]Dobson v Milloy [2014] NZHC 1631 [High…

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.

Continue reading Milloy v Dobson

Details

AGLC: Milloy v Dobson [2016] NZCA 25
Case: [2016] NZCA 25
Decision Date: 25 February 2016 at 3.00 pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand was asked to consider two appeals and two cross-appeals concerning a loan guarantee between three business associates. The appeal concerned the equitable principle of contribution between co-guarantors, and the counterclaim was about the distribution of settlement funds. The Court dismissed both the appeals and cross-appeals and declined the application to raise a new point on appeal. The Court found that the guarantors agreed to share the liability of the loan guarantee unequally, and that this was just. The Court also found that the Milloy interests were not entitled to any of the settlement funds. The Court rejected the argument that the guarantor who sought to recover his share of the costs of the guarantee was barred from doing so on the basis of unclean hands. The Court also found that the costs orders of the High Court were correct.

Orders