HARPLEY NOMINEES PTY LTD & ANOR v JEANS & ANOR [2006] NSWCA 176

HARPLEY NOMINEES PTY LTD & ANOR v JEANS & ANOR [2006] NSWCA 176

Declaratory relief should not be granted to a co-guarantor who has no prospect of making payment, as the right to contribution is contingent on payment being imminent, and discretionary grounds preclude relief where payment is not possible due to insolvency.

Jurisdiction
Australia
Judgment Date
30 June 2006
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed
Legal Topics
['guarantor Contribution' 'indemnity' 'declaratory Relief' 'bankruptcy']
['equity'] ['guarantor Contribution' 'indemnity' 'declaratory Relief' 'bankruptcy']

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Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 ['Whether a co-guarantor may obtain declaratory relief for equitable contribution in circumstances where payment by the claimant is not imminent due to insolvency' 'Whether indemnity under clause 6.8 of the 1999 agreement extends to contribution liability' 'The appropriateness of granting discretionary relief in the absence of likelihood of payment']

Ratio Decidendi

Declaratory relief should not be granted to a co-guarantor who has no prospect of making payment, as the right to contribution is contingent on payment being imminent, and discretionary grounds preclude relief where payment is not possible due to insolvency.

Court Disposition

Appeal allowed

Orders

  • ['Set aside the declarations and orders made in the Equity Division on 13 August 2004 in proceedings no. 50104 of 2003' 'Order that the summons filed on behalf of John Anthony Jeans be dismissed with costs' 'Order that the cross-claim filed on behalf of John Richard Bruce be dismissed, with no order as to costs'...