Harplex Pty Ltd v Konstandellos & Ors

(2018) 54 VR 174; [2018] VSCA 67

Victorian Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Joint and several liability
3. › Release of co-debtors
4. › Common law rule that release of one joint or joint and several debtor releases all
5. › Whether rule impliedly abolished by statute
6. › Whether rule applies to judgment debts
7. › Wrongs Act 1958 (Vic), s 24AA
1. Contract
2. › Construction
3. › Settlement agreements
4. › Whether settlement agreement constitutes release or covenant not to sue
5. › Onus of proof
6. › Construction in absence of documentary evidence
1. Practice and Procedure
2. › Appeal
3. › New point of law raised on appeal
4. › Whether exceptional circumstances exist
5. › Whether point could have been met with evidence at trial
6. › Interests of justice

Quick Take

In Victoria, the common law rule that a release of one joint or joint and several debtor releases all co-debtors has been impliedly abolished by s 24AA of the Wrongs Act 1958. A creditor who settles with one co-debtor does not thereby release the remaining co-debtors. The statement of the common law rule in Associated Retailers Ltd v Toys Unlimited Pty Ltd [2011] VSC 297 at [183] is no longer good law in Victoria. When construing a settlement agreement to determine whether it is a release or a covenant not to sue, the question is one of construction of the whole terms read in context, and the onus lies on the party asserting the release.