Hopper v D J Sincock Pty Ltd

1. [1]

   BRERETON JA: Lachlan Valley Machinery Pty Ltd (“LVM”) carried on business selling new and used farming and agricultural machinery in central western New South Wales, as the undisclosed agent of the Sincock LVM Partnership (“the Partnership”), in which the partners were the respondent/cross-appellant D J Sincock Pty Limited (“DJS”) as to a 39% share, the first cross-respondent LVM Holdings Pty Ltd (“LVMH”) as to a 51% share, and the second cross-respondent Dags Machinery Pty Limited (“Dags”) as to a 10% share, each as trustee for a family trust associated with their respective beneficial owners and directors Mr David John Sincock, [1] the appellant Mr Garry Raymond Hopper, [2] and Mr Darryl Norman Henley, [3] who were also the three directors of LVM. Mr Hopper was based in Sydney; Mr Sincock was responsible for the service and parts department of the business; and Mr Henley was responsible for its day-to-day operations in Condobolin.

2. [2]

   Mr Hopper sued DJS, LVMH, and Dags, to recover a sum of $200,000 paid by him to De Lage Landen Pty Ltd (“DLL”), pursuant to a guarantee of liabilities of the Partnership under a “Bailment Agreement” whereby DLL financed the acquisition by LVM of machinery for marketing and sale. LVMH and Dags did not file defences, and default judgment was given against them. However, Mr Hopper’s claim against DJS was dismissed. [4] Mr Hopper appeals to this court.

Background

1. [3]

   In early 2016, Mr Sincock announced that he wished to leave the Partnership, and sought return of his investment of $195,000, plus the amount that he claimed to have paid as tax on unpaid dividends (said to amount to a further $200,000). However, the Partnership was by then in default of its obligations to CNH Industrial Capital Australia Pty Ltd (“CNH”) which, prior to 2016, provided finance for the Partnership’s acquisition of floor stock, and was seeking to refinance. DLL was prepared to provide finance, but only if Mr Sincock and DJS were parties to the arrangements.

2. [4]

   There ensued a number of conversations between Mr Sincock, Mr Hopper, and Mr Henley. First, in or around February or March 2016, all three met at Mr Henley’s home in Condobolin. According to Mr Sincock, whose version was accepted by the trial judge, he said: “I want to get out of the business. It’s too much stress for me and causing mental health issues.” Mr Hopper said: “We’re happy for you to get out.” Mr Sincock said: “All I want back is the money that I put in and the tax that I paid on the dividends that I never received.” Mr Hopper said: “We want that as well. Do you understand all the documents and guarantees that you’ve signed?” Mr Sincock said: “I want exclusions from all the documents and guarantees as well.” Mr Hopper replied: “Well that will take a little bit of organising.” [5]

3. [5]

   Next, shortly afterwards, there was a telephone conversation between Mr Sincock and Mr Henley, in which (again according to Mr Sincock, whose version was not contradicted) Mr Henley said: “We want you to sign a document for DLL.” Mr Sincock responded: “I’m not signing any more documents.” Mr Henley said: “We need to free up more money to have any chance of paying you back for what you’re owed. Can you sign a document for DLL to increase our credit limit? We can’t pay you out until we free up some money. We can’t free up any money until you sign the document.” Mr Sincock replied: “No, I’m not guaranteeing or signing anything else until I get paid out.” [6]

4. [6]

   A week or two later, there was another telephone conversation between Mr Henley and Mr Sincock, in which (again according to Mr Sincock, whose version was not contradicted), Mr Henley said: “We need you to sign the DLL document.” Mr Sincock said: “All I want is the money I put into it, $195,000 plus the $200,000 in tax I paid, for dividends I never received.” Mr Henley said: “We can’t pay it until we free up some money. We can’t free up money until you sign the document.” Mr Sincock responded: “OK well. OK, if that’s what it takes, I’ll do it but I don’t want to be liable for any of the debt.” Mr Henley said: “As soon as the money comes through, then we will talk to DLL and get them to take you off the document so it will be just me and Mr Hopper left on it.” Mr Sincock said: “That’s the only way I’ll sign it, if that will happen.” [7]

5. [7]

   The circumstances in which the Bailment Agreement came to be executed are somewhat opaque. It appears that Mr Hopper executed the document on 14 March 2016. By means which the evidence does not reveal, it was sent to Mr Sincock, who said that he took it – after it had been signed by his wife and co-director – to Lake Cargelligo on 21 March 2016, where he met Mr Henley and they had a conversation in which Mr Sincock reiterated that he would only sign the agreement “if I am paid out and completely free of the business and all the guarantees”, to which Mr Henley responded: “That’s what we want too.” Mr Henley said: “Everything will be alright. Mr Hopper and I are happy to run it and do it all on our own.” [8] When so reassured by Mr Henley, Mr Sincock signed it and handed it to Mr Henley. Mr Sincock gave evidence, which the judge accepted: [9]

6. [8]

   Later, he said: [10]

7. [9]

   When asked where this was to be found in the document, he added: [11]

8. [10]

   Mr Henley also appears to have signed the Bailment Agreement on 21 March 2016. The agreement was accepted and dated by and on behalf of DLL on 31 March 2016.

The Bailment Agreement

1. [11]

   In the Bailment Agreement, the “Bailee” was defined as LVM as agent for LVMH in its own capacity and as trustee for the Hopper Family Trust, DJS in its own capacity and as trustee for the Sincock Family Trust, and Dags in its own capacity and as trustee for the Henley Family Trust. The “Guarantor” was defined as including, jointly and severally, Mr Hopper, Mr Sincock, and Mr Henley. “Transaction” was defined as meaning “this agreement and each bailment”.

2. [12]

   Clause 6.2 (‘Security’) was as follows:

3. [13]

   Clause 9.2 (‘DLL’s Right to lodge a caveat’) provided:

4. [14]

   Clause 15 (‘Guarantee and Indemnity’) relevantly provided:

5. [15]

   The Bailment Agreement was executed by DJS by its directors Mr and Mrs Sincock. The execution page included provision for execution also by LVM, LVMH, and Dags. Each of Mr Hopper, Mr Sincock, and Mr Henley also signed separate “Certificate[s] from Guarantor”, in which each stated:

6. [16]

   The signatures of each of Mr Hopper, Mr Sincock, and Mr Henley as guarantors and on the “Certificate[s] from Guarantor” were purportedly witnessed by one Mr Brenton Paech. However, Mr Sincock says that Mr Paech was not present when he signed the documents, and there is no evidence to the contrary.

Subsequent events

1. [17]

   It seems that on 31 March 2016, Mr Jim Main, a solicitor acting for the Sincock interests, sent an email to Mr Damian Scroope, a solicitor acting for the Hopper interests. The contents of that email are not in evidence, but a subsequent email from Mr Main to Mr Scroope of 14 April 2016 was, relevantly, as follows:

2. [18]

   The email stated that Mr Sincock’s proposal in relation to an agreement for his exit from the Partnership included:

3. [19]

   There followed protracted correspondence and negotiations about the terms of Mr Sincock’s exit, including as to the release of personal guarantees. It is notable that nowhere in this correspondence is there to be found any assertion on behalf of Mr Sincock that a binding arrangement had already been reached.

4. [20]

   Some days after signing the Bailment Agreement at Lake Cargelligo, Mr Sincock asked Mr Henley about “his money”, to which Mr Henley replied: “We’re working on it”. Mr Sincock continued to raise the issue every couple of weeks, receiving substantially the same reply, until 2 June 2016, when Mr Hopper requested a meeting to “discuss your pending exit from Sincock LVM”. However, no such meeting eventuated. Mr Sincock resigned as a director of LVM on 8 June 2016 and thereafter had nothing to do with the business nor any contact with either Mr Hopper or Mr Henley, but DJS remained a partner in the Partnership. [12]

5. [21]

   On 21 September 2018, receivers and managers were appointed to LVM, and it went into voluntary liquidation on 11 December 2018. DLL demanded payment of the moneys outstanding under the Bailment Agreement, which, as at 2 April 2019, amounted to $808,874.86. Mr Hopper, without reference to Mr Sincock or Mr Henley, negotiated a settlement with DLL, and on 6 May 2019 executed an agreement by which he promised to pay DLL $200,000 in full settlement of DLL’s demand. On 7 June 2019, solicitors acting for Mr Hopper sent a letter of demand to DJS and Dags, asserting that they were jointly and severally liable, and demanding payment of $200,000. [13]

The judgment below

1. [22]

   Mr Hopper’s case at trial was confined to reliance upon a contractual term, said to be implied in the Bailment Agreement, to the effect that he was entitled to be indemnified by the three companies for any amount he was required to pay DLL as a guarantor under clause 15. There was no claim for restitution nor for contribution in equity. [14] DJS denied that there was any such implied term, and alternatively relied on a defence of promissory estoppel. The primary judge held that there was no implied term, essentially because it would have been inconsistent with Mr Sincock’s protestations that he would only sign the agreement if he would be paid out and able to leave the business without any ongoing liabilities. [15] Her Honour also indicated that, had it been necessary to decide it, the defence of promissory estoppel would also have been upheld. [16]

2. [23]

   At trial, the critical issue was whether Mr Hopper’s guarantee was given “at the request of” the principal debtor. Her Honour held that it was not, by reason that:

   1. (1)

      Mr Hopper did not say that Mr Sincock requested the guarantee. To the contrary, it was Mr Hopper and Mr Henley who approached Mr Sincock to sign the Bailment Agreement, which contained the guarantee; [17]

   2. (2)

      There was no evidence that Mr Sincock requested “that he provide a guarantee: rather the obverse. Mr Sincock was most reluctant to provide a guarantee and explicitly told Mr Henley that he would only provide the guarantee if he was assured that he would not be liable for the company’s debts or pursuant to the guarantee”; [18] and

   3. (3)

      The basis upon which Mr Sincock signed the Bailment Agreement was fundamentally different from the basis upon which Mr Hopper did so: Mr Hopper wanted finance for the business to continue, while Mr Sincock wanted funds to be available for him to leave the business, and although he was still a member of the Partnership he was not working for it when the Bailment Agreement was executed. [19]

3. [24]

   The appellant contends that (contrary to the primary judge’s conclusion) there was a request made by the principal debtor – which was not DJS but the Partnership – that Mr Hopper provide the guarantee (grounds 1 and 2), and alternatively that the guarantee was given with the knowledge of the principal debtor in circumstances sufficient to give rise to an implied indemnity (ground 3). The respondent contends that the appellant ought not be permitted to propound a case based on a request by the Partnership; that in any event there was no such request; that the supposed implied term was excluded by the circumstances; and alternatively that the judgment below should be upheld on the basis of equitable estoppel. The respondent also cross-appeals from the dismissal of its claim for contribution against the other defendants, should the appeal succeed.

The guarantor’s implied contractual right of indemnity

1. [25]

   It was at first instance and remains uncontroversial that, where a guarantor gives a guarantee at the valid request of the principal debtor, there is, in the absence of an express right of indemnity, an implied contract of indemnity, or an implied term in the contract of guarantee to similar effect. [20] There is no such express or implied contract of indemnity if the guarantee is furnished without the request or knowledge of the principal debtor. [21] In Batard v Hawes, Lord Campbell CJ said: [22]

2. [26]

   Thus, the mere fact that a guarantor gives a guarantee is not enough to establish a request. [23] However, a request may be inferred from the circumstances. [24] It suffices if the principal debtor knew that the surety intended to guarantee its debts and acquiesced in the provision of the guarantee for the benefit of the debtor; in such a case, the debtor company is taken to have requested the guarantee, and the guarantor will have an implied right of indemnity; and if the principal debtor be a company, it will be bound in that respect by the knowledge and acquiescence of the majority of its directors. [25]

3. [27]

   The appellant’s alternative contention is that knowledge (without request) suffices to create a contractual right of indemnity. In Re TVSN Ltd, Young CJ in Eq said: [26]

4. [28]

   In Weatherly v Mann, a husband signed a guarantee of a proposed overdraft on his wife’s account, limited so as not to exceed £2,800 and interest. The wife did not sign the document, and there was no evidence that she ever requested it or was aware of its existence. After the guarantee was called on, the husband sued the wife for “money paid by the plaintiff for the defendant at her request”. Moffitt AP held that in the face of a comprehensive deed of settlement in relation to their financial arrangements, there was no room for an implied promise to arise outside its terms. [27] Hardie JA also held that the matter was dealt with under the deed of settlement. [28] However, Hutley JA said: [29]

5. [29]

   While these two cases might lend some support to the proposition that knowledge, without request, could suffice, they do not do so in decisive terms. Moreover, it would be a curious result if a contractual indemnity could be implied in circumstances where the principal debtor did not in some way assent to it; consensus underpins contract. For that reason, I do not accept that mere knowledge suffices; to establish a contractual (as distinct from an equitable) basis for relief, [30] some element of concurrence is required. However, that element will readily be found where, at the time that the principal obligation is incurred, the principal obligor is aware that the guarantor has given or will give a guarantee.

Request by the principal debtor

1. [30]

   The principle to which reference has been made directs attention to whether there was a request by the “principal debtor”. The primary judge so stated the proposition. [31] Her Honour also noticed the proposition, referred to above, that if the majority of the directors of a debtor company knew that the surety intended to guarantee the company’s debts and acquiesced in the provision of the guarantee, a request may be inferred. [32] However, her Honour then focussed on whether there had been a request “by Mr Sincock”, although at one point this appears to have been confused with whether Mr Sincock was asked to provide a guarantee himself. [33] Mr Hopper’s claim is not one to recover contribution from DJS or Mr Sincock in respect of any guarantee either might have given; but to be indemnified by the principal debtors, including DJS, which prior to the refinance must have been correspondingly indebted to the previous financier CNH.

2. [31]

   Her Honour concluded that it was not established that any request, express or implied, was made by Mr Sincock to Mr Hopper for a guarantee. However, Mr Sincock was not the principal debtor; the principal debtor was the entity described in the bailment agreement as “Bailee”, being LVM as agent for the Partnership. It is clear that LVM, or at least the majority of its directors, and at least a majority of the partners in the Partnership, knew that Mr Hopper would provide a guarantee and acquiesced in his doing so for the benefit of the company and the Partnership. Indeed, the commercial circumstances bespoke a request that he do so. The bailment agreement was one of a suite of documents which provided for the secured finance of equipment to enable the Partnership to continue its business. [34] One of the other documents in the suite of documents was a “Dealer Agreement”, which included a provision as follows:

3. [32]

   Mr Sincock desired that the refinance proceed, so that the Partnership would be enabled to remain in business and to pay him out, allowing him to extricate himself and recoup his investment. [35] DLL would provide finance only upon personal guarantees from each of Mr Hopper, Mr Henley, and Mr Sincock. The directors of each of the three companies who executed the Bailment Agreement did so both in their capacity as directors, and separately in their personal capacity as guarantors. At the very least, each of the partners knew that each of the directors was giving a guarantee for the benefit of the Partnership business, and acquiesced in those guarantees being given. That is established by the form of the Bailment Agreement, including in particular the execution pages, from which it was manifest that Mr Hopper (as well as Mr Henley and Mr Sincock) had given, or would be giving, a guarantee. In the context that DLL was insisting on the joint and several personal guarantees of each of Mr Hopper, Mr Henley, and Mr Sincock, where refinance was essential to the survival of the business, and where it was also essential to Mr Sincock’s extrication from the business, it must be inferred that the Partnership requested that each of the guarantors give their respective guarantees. Moreover, Mr Sincock expressly acknowledged in cross-examination that when he executed the bailment agreement he knew that both Mr Henley and Mr Hopper were to be guarantors as well as himself, [36] that that was “part of the deal”, [37] and that the deal was critical for the survival of the Partnership’s business. [38] It is clear that Mr Sincock gave his personal guarantee at the request of the Partnership; it is inconceivable that Mr Hopper did not likewise act upon the request of the Partnership. The implication arises not merely from the Partnership’s need for a refinance, but from that need coupled with its intention to borrow, and the concurrence of the three partners – including DJS – in the borrowing, via the Bailment Agreement, with knowledge of the terms upon which finance would be provided, including that the guarantees were required. In those circumstances, the assent of the three companies – including DJS – to a Bailment Agreement which was conditional upon a guarantee from Mr Hopper, inescapably conveyed a request that Mr Hopper give the guarantee.

4. [33]

   The respondent submitted that there was no evidence of any request by the Partnership, and that all the evidence pointed to the guarantees being given at the request of DLL. That submission is misconceived. The relevant request is implied, not express, and thus the absence of evidence of a request is irrelevant. Moreover, it will almost invariably be the creditor that requires a guarantee, but such a circumstance says nothing as to whether for relevant purposes it is given at the request of the principal debtor. The fact that it is the creditor who requires or insists on a guarantee does not mean that the guarantee is not, for relevant purposes, given at the request of the principal debtor.

5. [34]

   The trial judge considered the case to be analogous to Sisic, in that while Mr Sincock knew that the DLL required guarantees from Mr Hopper, and that Mr Hopper had provided or would provide a guarantee, he signed the Bailment Agreement on the express assurance that if he did so, he would be paid out and completely free of the business and the guarantees he had given, and the mere fact that Mr Hopper entered into the guarantee was not enough to establish a request. [39] In Sisic, Ward J (as her Honour then was) declined to find an implied request, in circumstances where the relevant guarantee given by Mr Sisic to Westpac was in a separate document to which Mr Krpo was not a party. Her Honour said: [40]

6. [35]

   That distinguishes the present case, where the guarantee is contained in the same document. Otherwise, Sisic turned on whether there was an express request for Mr Sisic to enter into the guarantee, [41] a question which does not arise in the present case.

7. [36]

   The respondent objected that it was not open to the appellant to invoke on appeal a request by the Partnership (as distinct from by DJS) as principal debtor, as no such request was pleaded, nor the subject of any evidence from Mr Hopper, nor cross-examination of Mr Sincock. It is true that the Statement of Claim did not expressly plead any such request. Nor did it plead a request by DJS or Mr Sincock, or anyone else; it merely alleged the implied term. The defence explicitly contended that no express or implied request was ever made by DJS. The plaintiff’s “Schedule of Issues” embraced the defendants’ formulation, identifying as issues:

8. [37]

   At first instance, the parties did not engage with the distinction between the Partnership and the second defendant DJS in this respect, in the manner in which they now do. That, it seems to me, was because at trial the focus was understandably on DJS, in circumstances where only DJS disputed liability. However, in opening submissions, reference was made to an express or implied request “by the principal debtor” – although the distinction between DJS and the principal debtor was at times elided. [42] More particularly, in closing submissions, counsel for Mr Hopper said (emphasis added): [43]

9. [38]

   This submission did not provoke any objection that it did not reflect the case pleaded and conducted. To the contrary, towards the end of his submissions, Counsel for DJS said (emphasis added): [44]

10. [39]

    In my judgment, the case was not pleaded nor conducted in a manner which precludes Mr Hopper from contending, as was the fact, that the relevant principal debtor was the Partnership.

Inconsistent agreement and equitable estoppel

1. [40]

   The respondent submitted that implication of the right of indemnity was inconsistent with and excluded by the express assurance given to Mr Sincock that he would have no further involvement “including liability on a guarantee” and would execute the bailment agreement only “if I am paid out and completely free of the business and all the guarantees”, and alternatively that the doctrine of equitable estoppel precluded Mr Hopper from insisting on his legal right to recover from DJS indemnity in respect of the amount paid by him to DLL. The pleaded estoppel was as follows:

2. [41]

   The possibility that there might be circumstances in which a right of indemnity is excluded by express or implied agreement was adverted to by Pearson J in Anson. [45] After referring to the judgment of Simonds J in Re Salisbury-Jones, Hammond v Salisbury-Jones, which concluded relevantly: [46]

3. [42]

   Pearson J then continued: [47]

4. [43]

   There is no doubt that Mr Sincock wanted to exit the Partnership, and to be free of all guarantees. However, he also wanted to be paid out. That outcome was not achievable without a refinance to which DJS was a party. What was discussed between Mr Henley and Mr Sincock in their telephone conversation and subsequently at Lake Cargelligo involved that, in consideration of DJS and Mr Sincock executing the Bailment Agreement, including Mr Sincock’s guarantee, DJS would be “paid out and completely free of the business and all the guarantees”. Such an agreement, if concluded, would have been in effect one to dissolve the Partnership (so far as it concerned DJS) and to procure the release of DJS and Mr Sincock from their associated liabilities. Another way of looking at it is that while as between the three companies, their principals, and DLL, DLL could look to any of them; as between the partners, DJS and Mr Sincock were to be exonerated. Although Mr Sincock was not sued in respect of any guarantee binding him – rather, DJS was sued as one of the principal debtors – nonetheless, if there were such an agreement, then it would be inconsistent with and exclude the implied term, and/or by operation of the doctrine of equitable estoppel it would preclude Mr Hopper from insisting on his legal right to recover from DJS indemnity in respect of the amount paid by him to DLL.

5. [44]

   However, Mr Hopper was not present when the relevant representations were made. There was no direct evidence that he authorised Mr Henley to make them. Mr Sincock said, in cross-examination, that he had thought that Mr Hopper might have been present during the telephone conversations but could not be sure, although “Mr Henley could not do anything [without] Mr Hopper’s say so”. [48]

6. [45]

   The respondent relies on the words attributed by Mr Sincock to Mr Henley (“that’s exactly what we want too”) as some evidence of the latter’s authority to bind Mr Hopper, coupled with the absence of evidence to the contrary from Mr Hopper. However, Mr Hopper gave the following evidence, in his affidavit of 15 June 2020 (emphasis added):

7. [46]

   The annexed email of 14 April 2016 has been set out above. [49] In cross-examination, Mr Hopper gave this evidence: [50]

8. [47]

   Mr Hopper’s evidence that he was not present at nor privy to any of the relevant discussions was not challenged. Her Honour observed: [51]

9. [48]

   The words “was not there” appear to be her Honour’s paraphrasing of the statement in Mr Hopper’s affidavit, about which he was not cross-examined. In my view, the assertion that he was “not privy to or present at” (emphasis added) goes beyond a statement that he merely “was not there”.

10. [49]

    The use by Mr Henley of the plural “we” when speaking to Mr Sincock is incapable of establishing that he had Mr Hopper’s authority to make the representations attributed to him. Even if Mr Hopper had not given unchallenged evidence that he was neither privy to nor present at those conversations, there would have been no evidence of Mr Henley’s authority to bind him. The implied authority of one partner to bind the others by representations made to the third parties in the ordinary course of the business of the Partnership [52] would not authorise Mr Henley to bind Mr Hopper in a negotiation with their other partner for the acquisition of his interest in the Partnership, which is neither with a third party dealing with the firm, nor in the ordinary course of the Partnership’s business. Nor it is open to reason that Mr Henley was effectively “armed” by Mr Hopper to obtain Mr Sincock’s signature: while the evidence does not reveal just how Mr Sincock received the Bailment Agreement for execution, it is clear that he had received it (and his wife had signed it) before he drove to Lake Cargelligo to meet Mr Henley.

11. [50]

    Moreover, that Mr Sincock did not consider that he had reached a binding agreement with Mr Hopper is reflected in his solicitor’s correspondence of and subsequent to 14 April 2016, in which no assertion was made that a binding agreement, as distinct from a “proposed settlement”, had been reached. Absent a concluded agreement binding Mr Hopper, his implied contractual right of indemnity was not excluded; nor could an estoppel binding Mr Hopper arise. [53]

Conclusion on the appeal

1. [51]

   It follows that the appeal should be allowed. The judgment in favour of the second defendant should be set aside. In lieu of the separate judgments against the first defendant and the third defendant, there should be judgment that the defendants (jointly and severally) pay the plaintiff $217,814, to take effect from 6 May 2021. The respondent should pay the appellant’s costs of the appeal and of the proceedings at first instance.

The cross-appeal for contribution

1. [52]

   By cross-appeal, the respondent sought that, should the appeal succeed, the dismissal of its cross-claim be set aside and it have judgment on its cross-claim for contribution from LVMH and Dags. Counsel for the appellant accepted that should the appeal succeed, the cross-appellant would also be entitled to succeed. As it seems to me, the partners should bear the liability inter se proportionately to their interests in the Partnership, that is to say 51% as to LVMH, 10% as to Dags, and 39% as to DJS. [54]

2. [53]

   Judgment cannot be given for a sum of money by way of contribution, because it has not yet been paid. However, in equity, relief may be granted to one of several co-obligors against whom judgment has been entered. [55] In Wolmershausen, Wright J said that if the creditor had been a party to the proceedings, then, on the precedents of Morgan v Seymour [56] and Dering v Earl of Winchelsea, [57] the surety would have been entitled to a declaration of her right to contribution and to an order upon the solvent co-surety to pay his proportion to the principal creditor. [58] His Lordship referred to Macdonald v Whitfield, [59] in which the right to contribution of a surety who had not paid but had had judgment entered against him was recorded as “entitled and liable to equal contribution inter se”.

3. [54]

   As there will be a judgment against all the three partners jointly and severally, there is no need for an order for payment to the principal creditor. Nor can the plaintiff be prevented from enforcing his judgment against DJS alone. As Wright J said: [60]

4. [55]

   By analogy, the judgment should record that each judgment debtor is entitled and liable to contribution in the proportions to which I have referred, and order that upon each paying its share, the others indemnify it against any further payment or liability and, by payment to it or to the principal creditor or otherwise, exonerate it from liability beyond the extent of its own share. As in Wolmershausen (and as also in other such cases as Thomas v Nottingham Inc Football Club Ltd [61] ), liberty to apply should be reserved in case of any difficulty arising in the implementation of the orders.

5. [56]

   Although the jurisdiction in question here is that of the District Court, such orders, though equitable in character, may be made in that Court’s jurisdiction, pursuant to District Court Act 1973 (NSW) (“DCA”), s 134(1)(h), as on an “equitable claim or demand for recovery of money … whether liquidated or unliquidated … in an amount not exceeding the Court’s jurisdictional limit”, [62] and pursuant to DCA, s 46(1), which gives that Court “power to grant any injunction (whether interlocutory or otherwise) which the Supreme Court might have granted if the action were proceedings in the Supreme Court.”

6. [57]

   I therefore propose the following orders:

   1. (1)

      Allow the appeal and the cross-appeal;

   2. (2)

      Set aside the judgments and orders of the District Court given on 6 May 2021 and substitute:

   3. (3)

      Order that the respondent pay the appellant’s costs of the appeal.

7. [58]

   McCALLUM JA: I agree with Brereton JA.

8. [59]

   SIMPSON AJA: I agree with Brereton JA.