Global Consulting Services Pty Ltd v Gresham Property Investments Ltd [2018] NSWCA 255

Global Consulting Services Pty Ltd v Gresham Property Investments Ltd [2018] NSWCA 255

As between PV, Pierora, and PVS5, there was an objectively established common intention that PV was the primary obligor on the CVS Mezz guarantee and Pierora and PVS5 were to be secondarily liable; thus, the sale proceeds should be distributed firstly from PV, and only then rateably from Pierora and PVS5. This displaces the equal contribution principle that would otherwise apply between co-guarantors.

Parties
Appellant: Global Consulting Services Pty Ltd; Appellant: RGN Pty Ltd; Respondent: Gresham Property Investments Ltd; Respondent: Pentridge Village Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation); Respondent: Pierora Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation); Respondent: PVS5 Holding Co Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation)
Jurisdiction
Australia
Judgment Date
06 November 2018
Procedural Posture
Appeal / Judgment on Appeal
Outcome
Appeal allowed
Legal Topics
Contribution, Guarantor Liabilities, Priority of Securities, Intercreditor Disputes, Common Intention Exception, Guarantee and Indemnity
Equity Commercial Law Banking and Finance Contribution Guarantor Liabilities Priority of Securities Intercreditor Disputes Common Intention Exception +1 more

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Parties

Global Consulting Services Pty Ltd

Appellant

RGN Pty Ltd

Appellant

Gresham Property Investments Ltd

Respondent

Pentridge Village Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation)

Respondent

Pierora Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation)

Respondent

PVS5 Holding Co Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation)

Respondent

Procedural Posture

Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether contribution lies between co-guarantors where one received all associated benefits;
  2. 2 Whether the common intention or agreement between guarantors displaced co-ordinate liability;
  3. 3 Whether Pierora Pty Ltd and PVS5 Holding Co Pty Ltd were secondary obligors compared to PV in relation to CVS Mezz debt;

Ratio Decidendi

As between PV, Pierora, and PVS5, there was an objectively established common intention that PV was the primary obligor on the CVS Mezz guarantee and Pierora and PVS5 were to be secondarily liable; thus, the sale proceeds should be distributed firstly from PV, and only then rateably from Pierora and PVS5. This displaces the equal contribution principle that would otherwise apply between co-guarantors.

Court Disposition

Appeal allowed

Orders

  • Set aside the orders made on 19 March 2018 and 11 April 2018.
  • Declare that in respect of their indebtedness under guarantees and securities given to CVS Mezz, PV was, as between PV and Pierora and PVS5, a primary obligor of CVS Mezz, and Pierora and PVS5 were secondary obligors.