Hopper v D J Sincock Pty Ltd [2021] NSWCA 305

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Hopper v D J Sincock Pty Ltd [2021] NSWCA 305 Hearing dates: 29 September 2021 Date of orders: 13 December 2021 Decision date: 13 December 2021 Before: Brereton JA at [1]; McCallum JA at [57]; Simpson AJA at [58] Decision: (1) Allow the appeal and the cross-appeal; (2) Set aside the judgments and orders of the District Court given on 6 May 2021 and substitute: (a) judgment that the defendants (jointly and severally) pay the plaintiff $217,814, such judgment to take effect from 6 May 2021, the defendants being entitled and liable to contribution inter se in proportions 51% as to the first defendant, 39% as to the second defendant, and 10% as to the third defendant; (b) order that upon any defendant paying its share, the other defendants indemnify it against any further payment or liability under this judgment and, by payment to it or to the principal creditor or otherwise, exonerate it from liability beyond the extent of its own share; (c) reserve liberty to apply to the District Court in the event of any difficulty arising in the implementation of order (b); and (d) order that the second defendant pay the plaintiff's costs; and (3) Order that the respondent pay the appellant's costs. Catchwords: GUARANTEE AND INDEMNITY – Guarantor – Right to indemnity – Refinance agreement entered into by corporate agent of partnership comprised of three companies – Respective directors as guarantors – One partner seeking to leave the partnership – Corporate agent defaults – Settlement negotiated by one guarantor – No express right of indemnity of guarantors – Whether implied contractual right of indemnity inferable – Whether principal debtor requested guarantors to give guarantee – Whether request inferable from circumstances of case – Majority of directors of corporate agent and majority of partners in partnership aware guarantee would be provided and acquiesced to such a course – Commercial circumstances evinced request for guarantee so business could continue to operate – Guarantee given in same document that established debt obligation – Express request for guarantee by creditor irrelevant – Right to indemnity established – Appeal allowed GUARANTEE AND INDEMNITY – Indemnities – Construction – Whether right to indemnity excluded by inconsistent express or implied agreement or otherwise estopped – Assurances by one partner to departing partner regarding freedom from liability not made with knowledge or authority of third partner – Departing partner did not consider concluded agreement to have been reached – No inconsistent agreement – No estoppel PARTNERSHIPS AND JOINT VENTURES – Rights and duties between partners – Implied authority to bind other partners by representations – Representations of freedom from liability made to departing partner – Representations not made to third party – Representations not made in ordinary course of business of partnership – No authority GUARANTEE AND INDEMNITY – Guarantor – Rights against co-guarantors – Contribution before payment made – Partners liable to contribute in proportion to their interests in partnership – Declaratory relief granted Legislation Cited: District Court Act 1973 (NSW), ss 46(1), 134(1)(h) Partnership Act 1892 (NSW), ss 5(1), 15 Cases Cited: Anson v Anson [1953] 1 QB 636; 1 All ER 867 Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 Bank of England v Cutler [1908] 2 KB 208 Barber v De Prima (2018) 97 NSWLR 932; [2018] NSWSC 601 Batard v Hawes (1853) 2 El & Bl 287; 118 ER 775 Conaghan v Cahill (1932) 26 QJP 54 Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184 Falcke v Scottish Imperial Insurance Co (1886) 34 Ch D 234 Grego v D Club Pty Ltd [2011] WASC 55 Gujarat NRE India Pty Ltd v Wollongong Coal Ltd [2017] NSWSC 209 Israel v Foreshore Properties Pty Limited (in liq) (1980) 54 ALJR 421; 30 ALR 631 Kolavo v Pitsikas [2003] NSWCA 59 Macdonald v Whitfield (1883) 8 App Cas 733 McColls Wholesale Pty Ltd v State Bank of NSW [1984] 3 NSWLR 365 Morgan v Seymour (1637) 1 Rep Ch 120; 21 ER 525 Re A Debtor [1937] Ch 156; 1 All ER 1 Re Salisbury-Jones, Hammond v Salisbury-Jones [1938] 3 All ER 459; (1938) 82 Sol Jo 728 Re TVSN Ltd [2005] NSWSC 692 Rogers v ANZ Banking Group Ltd [1985] WAR 304 Seabird Corp Ltd v Sherlock (1990) 2 ACSR 111; 8 ACLC 510 Sisic v Krpo [2008] NSWSC 1086 Thomas v Nottingham Inc Football Club Ltd [1972] Ch 596; 1 All ER 1176 Weatherly v Mann (Court of Appeal (NSW), Moffitt AP, Hardie and Hutley JJA, 16 August 1973, unrep) Wollongong Coal Ltd v NRE Resources Pty Ltd (No 2) [2017] NSWSC 1552 Wolmershausen v Gullick [1893] 2 Ch 514 Woolmington v Bronze Lamp Restaurant Pty Ltd [1984] 2 NSWLR 242 Texts Cited: J O'Donovan and J Phillips, The Modern Contract of Guarantee (3rd ed, 1992, Law Book Co) Category: Principal judgment Parties: Garry Raymond Hopper (Appellant) D J Sincock Pty Ltd (Respondent/Cross-Appellant) LVM Holdings Pty Ltd (First Cross-Respondent) Dags Machinery Pty Ltd (Second Cross-Respondent) Representation: Counsel: S R Meehan (Appellant) M Einfeld QC w/ D K Smith (Respondent/Cross-Appellant)