Paola Toppi v Dolores Lavin [2013] NSWSC 1361

Paola Toppi v Dolores Lavin [2013] NSWSC 1361

Toppi, Cunningham, Lavin and DLM were co-sureties with coordinate liabilities under the guarantee for the same Bank debt. The Bank's deed with Lavin and DLM contained a covenant not to sue, not an extinguishing release that defeated contribution, and Carr v Thomas required that the right of contribution remained unaffected. The defendants did not establish any defence based on want of proof, the value of Lavin's cross-claim against the Bank, Basecove's security, absent co-sureties, or Bank legal costs. Because the Toppi side and Lavin side were equal participants in the venture, the proper contribution burden was 50% each, subject only to an adjustment reflecting Lavin and DLM's earlier...

Jurisdiction
Australia
Judgment Date
12 September 2013
Procedural Posture
Equity Proceedings for Equitable Contribution Between Co Sureties Under Guarantees / Principal Judgment After Hearing
Outcome
The plaintiffs' claim for equitable contribution succeeded, subject to an adjustment for the defendants' earlier payment; costs were reserved for further hearing.
Legal Topics
['equitable Contribution' 'co Sureties' 'covenant Not to Sue' 'release From Liability' 'coordinate Liabilities' 'discharge of Securities' 'joinder of Co Sureties' 'interest on Contribution' 'legal Costs Under Guarantee']
['equity' 'guarantees and Suretyship'] ['equitable Contribution' 'co Sureties' 'covenant Not to Sue' 'release From Liability' 'coordinate Liabilities' 'discharge of Securities' 'joinder of Co Sureties' 'interest on Contribution' 'legal Costs Under Guarantee']

Case Brief

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Procedural Posture

Equity Proceedings for Equitable Contribution Between Co Sureties Under Guarantees / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the plaintiffs and defendants were co-sureties with coordinate liabilities to the Bank for the debts of Luxe Studios and Luxe Productions.' "Whether the Bank's covenant not to sue Lavin and DLM under the deed of settlement operated as a release or otherwise defeated the plaintiffs' claim for contribution." "Whether the plaintiffs failed to do equity by reason of the discharge of Basecove's security or the treatment of Basecove's sale proceeds." 'Whether Basecove, FHI and Rock Bottom Music were co-sureties whose absence defeated or reduced the claim.' 'Whether Lavin and DLM were entitled to an adjustment because they paid $1.35M earlier than the plaintiffs paid $2.9M.' 'Whether the legal costs claimed by the Bank should be excluded or apportioned differently.']

Ratio Decidendi

Toppi, Cunningham, Lavin and DLM were co-sureties with coordinate liabilities under the guarantee for the same Bank debt. The Bank's deed with Lavin and DLM contained a covenant not to sue, not an extinguishing release that defeated contribution, and Carr v Thomas required that the right of contribution remained unaffected. The defendants did not establish any defence based on want of proof, the value of Lavin's cross-claim against the Bank, Basecove's security, absent co-sureties, or Bank legal costs. Because the Toppi side and Lavin side were equal participants in the venture, the proper contribution burden was 50% each, subject only to an adjustment reflecting Lavin and DLM's earlier...

Court Disposition

The plaintiffs' claim for equitable contribution succeeded, subject to an adjustment for the defendants' earlier payment; costs were reserved for further hearing.

Orders

  • ["The defendants are to pay equitable contribution to the plaintiffs in respect of monies paid by the plaintiffs to the Bank, being half the difference between $2.9M paid by the plaintiffs and $1.35M paid by the defendants, subject to an adjustment for the defendants' earlier payment." "Deduct from the $2.9M an...