Friend v Brooker [2009] HCA 21

HIGH COURT OF AUSTRALIA

FRENCH CJ,

GUMMOW, HAYNE, HEYDON AND BELL JJ

NICHOLAS MACARTHUR FRIEND APPELLANT

AND

FREDERICK CLARKSON BROOKER & ANOR RESPONDENTS

Friend v Brooker [2009] HCA 21

28 May 2009

S475/2008

ORDER

1. Appeal allowed.

2. First respondent to pay the costs of the appellant.

3. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales entered 25 June 2008 and, in lieu thereof, order that the appeal to that Court be dismissed with costs, including the costs of the application for recall of reasons.

On appeal from the Supreme Court of New South Wales

Representation

C R C Newlinds SC with H S Packer and B R Kremer for the appellant (instructed by Bull, Son & Schmidt)

B W Walker SC with M S White for the first respondent (instructed by Levitt Robinson Solicitors)

No appearance for the second respondent

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Friend v Brooker

Equity – Doctrine of contribution – "Co-ordinate liability" – Appellant and respondent company directors – Respondent personally borrowed money which was on-lent to the company – Company ceased trading – Respondent sought funds from appellant to repay personal loan – Whether fiduciary relationship existed between the two – Whether co-ordinate liability existed so as to require equitable contribution from appellant.

Words and phrases – "common design", "community of interest", "co-ordinate liability", "equitable contribution".

1. FRENCH CJ, GUMMOW, HAYNE AND BELL JJ. This appeal is brought by Mr Friend from the decision of the New South Wales Court of Appeal (Mason P and McColl JA; Basten JA dissenting[1]) which allowed an appeal by the first respondent (Mr Brooker) and set aside the orders of the primary judge (Nicholas J) dismissing a suit in the Equity Division of the Supreme Court of New South Wales[2]. The appeal should be allowed and the orders of the primary judge restored. 2. The appeal raises for consideration by this Court fundamental questions respecting the nature and scope of the equitable doctrine of contribution. These are precipitated by the decision of the Court of Appeal which proceeded from considerations first raised by the President in the course of argument and not advanced to the trial judge. 3. The matter is further complicated by the circumstance that in various respects findings of fact were made or assumed by the Court of Appeal and in this Court the appellant vigorously challenged the procedure adopted by the Court of Appeal, in going beyond the findings made by Nicholas J when disposing of the quite different case presented at trial. However, it will be possible to decide the appeal in favour of the appellant even assuming many of the factual findings and assumptions of which the appellant complains.