Ogilvie v Ferry [2010] NSWSC 379

Ogilvie v Ferry [2010] NSWSC 379

The plaintiffs, being beneficial owners of Unit 36 subject to the mortgage, occupy the status of co-sureties with the guarantors for the principal debt. Given they derived no benefit from the borrowing, while the guarantors obtained the benefit, equity entitles the plaintiffs, if Unit 36 is sold, to be subrogated to the principal creditor's rights and to be wholly indemnified by the guarantors for any payment made to satisfy the mortgage. Contribution in such circumstances is not appropriate; full indemnity is equitable due to the allocation of benefit and burden.

Parties
Plaintiff: Robert Bonnar Ogilvie; Plaintiff: Sheelagh Donna Ogilvie; First Defendant: James Joseph Ferry; Second Defendant: Philip Harold Mudge; Third Defendant (discontinued): Andrew Bagg; Fourth Defendant: Gemshine Pty Limited (In Liq); Fifth Defendant: Bluemint Pty Limited; Sixth Defendant: Ferry Asset Holdings Pty Limited; Seventh Defendant: Salfa Pty Limited (In Liq) (Receiver and Manager appointed)
Jurisdiction
Australia
Judgment Date
30 April 2010
Procedural Posture
Equity / Judgment
Outcome
Plaintiffs entitled to be subrogated to principal creditor's rights in the event of sale of Unit 36 and indemnified by the guarantors as to 100 per cent of their liability. Mortgagor entitled to possession of the property.
Legal Topics
Guarantee and Indemnity, Subrogation, Contribution, Co Suretyship
Equity Guarantee and Indemnity Subrogation Contribution Co Suretyship

Case Brief

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Parties

Robert Bonnar Ogilvie

Plaintiff

Sheelagh Donna Ogilvie

Plaintiff

James Joseph Ferry

First Defendant

Philip Harold Mudge

Second Defendant

Andrew Bagg

Third Defendant (discontinued)

Gemshine Pty Limited (In Liq)

Fourth Defendant

Bluemint Pty Limited

Fifth Defendant

Ferry Asset Holdings Pty Limited

Sixth Defendant

Salfa Pty Limited (In Liq) (Receiver and Manager appointed)

Seventh Defendant

Procedural Posture

Equity / Judgment

Legal Issues

  1. 1 Whether the plaintiffs are entitled to be subrogated to the rights of the mortgagee upon sale of Unit 36
  2. 2 Whether the plaintiffs are entitled to be indemnified by the guarantors as to 100 per cent of their liability
  3. 3 Whether the plaintiffs should contribute equally with the guarantors or be wholly indemnified

Ratio Decidendi

The plaintiffs, being beneficial owners of Unit 36 subject to the mortgage, occupy the status of co-sureties with the guarantors for the principal debt. Given they derived no benefit from the borrowing, while the guarantors obtained the benefit, equity entitles the plaintiffs, if Unit 36 is sold, to be subrogated to the principal creditor's rights and to be wholly indemnified by the guarantors for any payment made to satisfy the mortgage. Contribution in such circumstances is not appropriate; full indemnity is equitable due to the allocation of benefit and burden.

Court Disposition

Plaintiffs entitled to be subrogated to principal creditor's rights in the event of sale of Unit 36 and indemnified by the guarantors as to 100 per cent of their liability. Mortgagor entitled to possession of the property.

Orders

  • Plaintiffs entitled, in case of sale of Unit 36 pursuant to the Mortgage, to be subrogated to the principal creditor's rights.
  • Plaintiffs entitled to be indemnified by the Guarantors as to 100 per cent of their liability.