Global Consulting Services Pty Ltd v Gresham Property Investments Ltd

Court of Appeal (NSW)|2018-09-17|Before: Bathurst CJ, McColl JA, Leeming JA

ellant) RGN Pty Ltd (2nd Appellant) Gresham Property Investments Ltd (1st Respondent) Pentridge Village Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation) (2nd Respondent) Pierora Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (In Liquidation) (3rd Respondent) PVS5 Holding Co Pty Ltd (Receiver and Manager Appointed) (Controller Appointed) (4th Respondent) Representation: Counsel:

B W Walker SC and J P Tomlinson (Appellants) I R Pike SC and J R Anderson (1st Respondent)

SBA Law (Appellants) Baker McKenzie (1st Respondent) File Number(s): (2018/87296) Publication restriction: None Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity - Commercial List Citation: [2018] NSWSC 141 Date of Decision: 21 February 2018 Before: Ball J File Number(s): 2016/37916

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

BATHURST CJ: I agree with the orders proposed by Leeming JA and with his Honour's reasons.
McCOLL JA: I agree with Leeming JA's reasons and the orders his Honour proposes.
LEEMING JA: This appeal concerns a priority dispute between junior secured creditors who lent to fund a property development. There is a surplus of some $3 million from the net proceeds of sale after repayment of the two senior secured creditors. Certain features make the dispute relatively complex, including that (a) within the development, there were three separate parcels of land, owned by separate companies, and the subject of separate equitable mortgages, (b) all three land-owning companies were in receivership and the receivers sold the whole of the land in one line, (c) on the agreed apportionment of the sale price, the proceeds attributable to the sale of the largest parcel (some 90.9% of the whole) would wholly repay the two senior secured creditors, and (d) an intercreditor deed affected the rights of the parties and the companies in receivership.
Broadly speaking, the principal question is whether the whole of the proceeds of sale of the land should be used to repay the two senior secured creditors, or merely the proceeds attributable to the sale of the largest parcel. The parties have regarded the answer to that question as turning on whether the three guarantors (all now in receivership) over whose land security was given were under co-ordinate liabilities such that each was liable to make contribution in equity.

Factual background

Pentridge Village Pty Ltd (PV) owned real property comprising the former Pentridge Prison in Coburg Victoria (land). In around 2000, PV undertook the redevelopment of that property, employing West Homes Australia Pty Ltd as the builder. Initially, a facility to permit the redevelopment was provided by Capital Finance Australia Pty Ltd (CFAL), in the amount of $85 million. PV's loan was secured by a first ranking mortgage over the land.
There are three shareholders of PV: Piero One Pty Ltd (Piero), Tower & Tower Developments Pty Ltd and Brooklyn Timber Traders Pty Ltd. Piero was owned and controlled by members of the Chiavaroli family. Brooklyn Timber was controlled by members of the Costa family. Members of the Chiavaroli family had an interest in Tower & Tower as did members of the Costa and Ballan families, such that the economic ownership of PV was split as follows, as recorded by the primary judge at [2]: "• Chiavaroli family - 75 per cent • Costa family - 14 per cent • Ballan family - 7 per cent • Other investors - 4 per cent" Further, the builder, West Homes Australia, was owned and controlled by members of the Chiavaroli family.
The primary judge did not state with precision what was meant by "the Chiavaroli family", although to be fair that may have reflected the way submissions were advanced at first instance. A large issue in the appeal turns on the repeated reference by the primary judge to "the Chiavaroli family" as part of the legal analysis of whether there were co-ordinate liabilities, and I shall deal with it below. In this Court, Mr Pike SC who appeared for the only active respondent defended the reasons of the primary judge and treated the term as meaning Mr Peter Chiavaroli and his son Mr Leigh Chiavaroli (to use the anglicised forms of their names) and no one else. For the purpose of introducing the transactions which give rise to this litigation, it remains a helpful description.
To anticipate what follows, the three companies whose liabilities are said to be co-ordinate are PV (mentioned above, controlled by members of the Chiavaroli family, but as to which 25% of the economic interest was held by persons who were not members of the Chiavaroli family), Pierora Pty Ltd (Pierora) and PVS5 Holding Co Pty Ltd (PVS5). The information as to directors and shareholders of the latter companies stated below is taken from ASIC searches which were in evidence and which appear to have been treated as uncontroversial.
In around July 2006, PV sold three lots which had formed part of the project to Pierora for $250,000. Pierora is distinct from Piero. The directors of Pierora are Mr Peter Chiavaroli and Mr Damian Chiavaroli. The sole shareholder of Pierora is Randa Lee Investments Pty Ltd (which was the trustee of Mr Peter Chiavaroli's self-managed superannuation trust). Two of Randa Lee's four shares are owned by Mr Peter Chiavaroli, the other two by Ms Miranda Chiavaroli.
For present purposes, the financial difficulties encountered by PV in 2010 and 2011 may be passed over, save to note that they were a reason why, in November 2011, PVS5 was incorporated. The directors of that company were Messrs Peter and Leigh Chiavaroli, and its sole shareholder was Mr Leigh Chiavaroli. It acquired a lot known as "S5" (being the former women's prison) in the project for a purchase price of $1.4 million. Of that price, $400,000 was lent to PVS5 by RGN Pty Ltd (RGN), a company controlled by Mr Romano Nenna, who also provided financial advice to members of the Chiavaroli family. PVS5 granted a mortgage over lot S5 to RGN securing its obligation to repay the loan of $400,000.
In the first half of 2012, there were negotiations to refinance the main facility provided by CFAL to PV. The only active respondent to this appeal, Gresham Property Investments Ltd (Gresham), was engaged to assist in the refinancing. In addition to monthly fees, Gresham was entitled to an arrangement fee and a success fee, to which it will be necessary to return below.
In April 2012, CFAL sold the entirety of its Australian loan portfolio (including its loan to PV) to AET SPV Management Pty Ltd (AET), a consortium led by Morgan Stanley. AET subsequently agreed to assign PV's debt and associated securities to Daimleigh Capital Pty Ltd (Daimleigh) as trustee for the capital unit trust for a price of $16.1 million. Mr Peter Chiavaroli was Daimleigh's sole shareholder, and its two directors were Messrs Peter and Leigh Chiavaroli. Agreement was reached to assign the debt on 2 August 2012, and much of the evidence which is the subject of grounds 3 and 4 of this appeal was directed to the steps taken by members of the Chiavaroli family and Mr Nenna to obtain finance to (a) purchase PV's debt from AET and (b) continue to fund construction at the project. It is convenient to defer summarising those factual matters at this stage.
Ultimately, funding was provided to Daimleigh by three lenders: CVS Lane PV Pty Ltd (CVS Senior), CVS Lane PV Mezz Pty Ltd (CVS Mezz) and the first appellant Global Consulting Services Pty Ltd (GCS). Those lenders made loans of $15 million, $4 million and $2 million respectively.
Each loan was secured by a mortgage granted by PV over (what remained of) the land, having regard to the earlier sales to Pierora and PVS5. The mortgages were ranked as follows: first, CVS Senior, second, CVS Mezz and third, GCS.
The focus in this appeal is upon the security provided for the loan to Daimleigh by CVS Mezz, which was as follows: 1. CVS Mezz obtained guarantees from each of PV, Pierora and PVS5. 2. In addition to the mortgage from PV over (the remainder of) the land, ranking behind CVS Senior but ahead of GCS, CVS Mezz obtained mortgages from Pierora and PVS5 over the parts of the land which those companies had purchased from PV. 3. In the case of PVS5, CVS Mezz also obtained the benefit of an agreement from RGN to subordinate its existing mortgage (securing the repayment of its loan of $400,000 to PVS5) to the mortgage granted to CVS Mezz.
GCS obtained no mortgage over any land owned by PVS5. However, it did obtain a second ranking mortgage over the land owned by Pierora which it had acquired from PV.
Thus, CVS Mezz had the benefit of guarantees from each of PV, Pierora and PVS5, each of which was secured by a mortgage over land which continued to be, or had been, part of the Pentridge project, and which in each case enjoyed priority over mortgages granted by Pierora and PVS5 in favour of RGN and GCS.
In August 2012, a dispute arose concerning Gresham's entitlements to a success fee. The details of that dispute do not matter. It was resolved on the basis that Daimleigh agreed to pay Gresham the sum of $1.42 million plus GST. Gresham agreed to lend to Daimleigh that amount, and PV and two of its shareholders, Tower & Tower and Piero, agreed to guarantee its repayment. PV also agreed to mortgage a number of lots in the development as security for the loan, and gave a fixed charge over its remaining property.
Seemingly, the transaction effecting the legal assignment to Daimleigh of PV's debt settled on or about 28 August 2012. There are references in a settlement sheet to "July construction" and "Construction loan PV", both in the amount of $1,026,200 which may suggest that some of the funds lent by CVS Senior, CVS Mezz and GCS were used to fund the development on land owned by PV. There was unchallenged evidence that none of the funds advanced under the CVS Mezz facility was advanced to PVS5 or Pierora.
A diagram representing the position (identifying the property and loans, stating the guarantees but making no attempt to indicate the mortgages) after the completion of the assignment of the debt to Daimleigh follows.
In November 2012, the main facility was varied. The assignee, Daimleigh, extended the facility, waived certain breaches, and agreed, in its absolute discretion, to provide further funding to PV to enable it to complete the project.
The Intercreditor Deed (which had been entered into at the time of the refinancing by CVS Senior and CVS Mezz) was subsequently amended and restated to include Gresham as a party. The primary judge summarised its relevant provisions at [20]-[26] and addressed a submission which had been advanced by Gresham at first instance at [54]-[62]. His Honour concluded that: 1. the deed did not affect the rights of RGN (because Gresham had no security over land owned by PVS5, and RGN was not a party to it); and 2. as between Gresham and GCS, GCS was entitled to be paid any remaining amount attributable to the sale of Pierora's lots, but was not entitled to be paid any amount referable to the sale of PV's lots.
No party challenged any aspect of that part of the primary judge's reasons, and so the details of the deed and the reasoning by which those conclusions were reached need not be summarised further.
Ultimately, receivers were appointed to each of PV, Pierora and PVS5 (among others) on 17 July 2014. On 31 July 2015, all of the lots in the Pentridge project were sold in one line for $26.5 million. The amounts owing to each of CVS Senior and CVS Mezz have been repaid. The litigation has proceeded on the basis that there is a balance remaining of approximately $3 million, and the issue is whether Gresham is entitled to be paid that amount in priority to GCS and RGN.
The litigation has also proceeded on the basis that the sale price of $26.5m is to be allocated as follows: 90.9% to PV, around 6% to Pierora and around 3% to PVS5.

The issue and its resolution by the primary judge

Both before the primary judge and in this Court, the principal issue dividing the parties was whether, as between PV, Pierora and PVS5, all three were subject to co-ordinate liabilities in respect of their guarantee of the repayment of the CVS Mezz debt (being the finding of the primary judge and the submission of Gresham) or whether PV was the primary obligor, such that the debt owed to CVS Mezz should be repaid first from the proceeds of property owned by PV and only thereafter by the proceeds of sale of the property owned by Pierora and PVS5 (as GCS and RGN contended).
The issue arose in this way. GCS and RGN contended that as between PV, Pierora and PVS5, PV was the primary obligor in relation to the CVS Mezz debt and consequently that debt should be discharged first from the proceeds of the sale of property owned by PV. On the basis of the receivers' apportionment, approximately $24.1 million of the total sale price (some 90.9% of $26.5 million) was referable to the sale of property owned by PV. The total debt owed to CVS Senior and CV Mezz was approximately $23.5 million. The difference between $24.1 million and $23.5 million is some $600,000. GCS and RGN accepted that Gresham had priority in respect of that $600,000. However, the balance of the sale price was referable to land owned by Pierora and PVS5. GCS and RGN said that Gresham had no security over that land whereas GCS and RGN did.
Gresham disputed the premise of GCS' and RGN's submission that PV was the primary obligor. It contended that because PV, Pierora and PVS5 had all guaranteed Daimleigh's obligation to repay $4 million to CVS Mezz, each was equally liable to repay the CVS Mezz debt in equal shares.
The primary judge rejected the proposition that PV was the primary obligor, and acceded to the proposition that PV, Pierora and PVS5 were under a co-ordinate liability. That is the main issue in this appeal. It is convenient to explain the consequences, as stated by the primary judge, and which were not disputed on appeal, immediately.
First, the primary judge explained that RGN would receive nothing from the proceeds of sale, for the following reasons (at [54]): "Gresham has no security over the PVS5 property. The result is that, to the extent that any amount held by the receivers after payment to CVS Mezz of the amount owing to it is referable to the PVS5 property, RGN is entitled to that amount. However, that amount appears to be zero. Of the amount recovered by the receivers, $821,500 (3.1% of $26.5 million) related to property owned by PVS5. After allowing for the exercise of rights of contribution, one third of the amount owing to CVS Mezz must be borne by PVS5 and, to the extent that there is a shortfall, the amount of that shortfall must be borne equally by PV and Pierora. The $821,500 that was recovered appears to be less than the one third to which CVS Mezz is entitled."
Secondly, the position as between Gresham and GCS turned in part on the Intercreditor Deed. The primary judge reasoned as follows (at [63]): "Gresham is entitled to priority over GCS and RGN in respect of that part of the amount realised by the receivers that is not required to discharge the debts owed by CVS Senior and CVS Mezz and is referable to the sale of lots belonging to PV. It is not entitled to make a claim in respect of other amounts held by the receivers. In calculating the amount held by the receivers that is referable to the sale of lots belonging to PV, the amount payable to CVS Mezz should be borne equally by PV, Pierora and PVS5 and, to the extent that there is any shortfall in the amount realised from the sale of lots owned by PVS5, equally by PV and Pierora."
Declaratory relief reflecting those conclusions issued. The appeal materials do not appear to disclose how those conclusions work out in terms of the dollars to be received by Gresham (and, perhaps, GCS and RGN). That is not intended as any criticism; to the contrary, the procedure adopted, of granting declaratory relief in relation to the questions of priority, and leaving it to the receivers to determine the consequences, seems apt and efficient so as to avoid distraction by pecuniary minutiae. For present purposes, all that need be said is that the result reached by the primary judge is plainly less advantageous to GCS and RGN than the result which would obtain if PV were treated as a primary obligor such that Pierora and PVS5 were not liable each to repay one third of the CVS Mezz debt. Hence the appeal is as of right, involving the final determination of proceedings in the Commercial List with an amount in issue very substantially exceeding $100,000.

The grounds of this appeal

The four grounds of appeal all challenged the rejection by the primary judge that PV was the primary obligor. Those grounds comprise two halves. Grounds 1 and 2 maintained that there was error insofar as proper regard had not been given to the benefits received by each of PV, Pierora and PVS5. Grounds 3 and 4 challenged his Honour's rejection that there was an agreement or common intention as between PV, Pierora and PVS5 that PV be primarily liable.
By notice of contention, served late but to which no objection was pressed, Gresham maintained that insofar as grounds 3 and 4 sought findings of an agreement or common intention, they did so in a way which was outside the pleaded case and should not be permitted to be run on appeal.
Both sides addressed grounds 1 and 2 first, and grounds 3 and 4 second. As will be seen below, I am not sure that that is the most logical order to proceed. The primary judge addressed the issue of common intention which gave rise to grounds 3 and 4 first and the issue of benefit which gave rise to grounds 1 and 2 second. Nevertheless, I shall follow the order adopted by the parties.
The evidence before the primary judge was largely documentary, and there was no cross-examination. It was accepted that this Court was in no worse position than the primary judge to resolve the issues presented in this litigation. There was no dispute as to the factual matters summarised above.

Grounds 1 and 2 - absence of benefit to Pierora and PVS5

Mr Walker SC, who with Mr Tomlinson appeared for the appellants in this Court but not at first instance, submitted that although each of PV, Pierora and PVS5 had guaranteed Daimleigh's obligation to repay the $4 million loan to CVS Mezz, contribution was not available between them because one of them, PV, had obtained the whole benefit of the guarantee, whilst the others, Pierora and PVS5, had obtained nothing. They invoked a formulation of principle taken from the looseleaf service J O'Donovan and J Phillips, Modern Contract of Guarantee (4th ed, Lawbook Co, 2004), citing it thus: "Where one guarantor … enjoys all the benefits of the guarantee, he or she alone must bear its burden and the co-surety had a sound defence to an action for contribution" (submissions in chief, paragraph 26).
The position was likened to that considered by Bryson J in Official Trustee in Bankruptcy v Citibank Savings Ltd (1995) 38 NSWLR 116 (Citibank). There a loan to a company owned and controlled by Ralph and Rosa Panebianco was guaranteed both by them and also by Ralph's parents Innocenzo and Saveria Panebianco (who were the second defendants). Bryson J said at 119: "There clearly was a benefit for Ralph and Rosa Panebianco in the provision of credit to their company. The second defendants have a right at law to be indemnified against any liability arising under the guarantee, and the existence of this right negates the asserted right to contribution. On a whole view of the parties' rights at law, consideration of an equitable remedy on the basis that all are co-sureties cannot even begin."
The appellants said in writing that "in substance, Daimleigh was a mere conduit for [PV's] primary liability".
Gresham did not dispute the correctness of the legal principles enunciated, although it denied the characterisation of Daimleigh as a mere conduit. It said that Daimleigh was to be regarded as in substance the borrower and therefore the recipient of the funds. It disputed that there was any analogy with Citibank as follows: "In Citibank, the parents who sought to avoid the burden of contribution were, plainly, true strangers to the debts they stood as surety for. That circumstance is far removed from this case where, in effect, the one family controlled the borrower (Daimleigh), 75% of one surety (Pentridge) and 100% of the other sureties. That family stood to directly benefit if the Project succeeded, through their equity in Pentridge and the debt due to Daimleigh. The decision to interpose Daimleigh (a wholly owned Chiavaroli company) to take an assignment of the CFAL debt was a deliberate and conscious commercial decision by the Chiavaroli family and the offering of additional Chiavaroli family assets - in the form of PVS5 and Pierora - was fundamental to the monies being raised to enable the assignment to Daimleigh to occur. To depart from the principle of equity is equality in this case would work a fundamental injustice and be contrary to equity's fundamental principle of looking to substance and not form."
The parties' agreement as to principle means that this appeal is not the occasion to determine the limits of this exception to the availability of contribution in equity.

Gresham's alternative submission that no guarantor received any benefit

Gresham's primary submission, which reflected and defended the reasoning of the primary judge, was that each of Daimleigh, PV, Pierora and PVS5 should be seen as no more and no less than representing the "Chiavaroli family", such that all obtained benefit from the transaction. However, it also had an alternative submission, which is best dealt with immediately.
Gresham's alternative submission reflected the near certain commercial reality that PV would never be able to repay its indebtedness which had been assigned to Daimleigh. The submission was that there was no benefit to any of PV, Pierora and PVS5, that the refinancing was done so that Daimleigh might obtain a benefit and that there was therefore no reason to depart from the ordinary position that co-sureties were subject to co-ordinate liabilities as to which equity would order contribution.
This latter submission was put as follows: "BATHURST CJ: Do you say as a result of that, this is simply a case of three guarantors not getting any benefit out of the funding, and therefore the usual principles of co-ordinate liability applies? PIKE: Yes. Or put the other way, it can't be said that Pentridge Village got all of the benefit. In fact, the likelihood is that none of them would get the benefit if one is looking at it purely in terms of corporate veil."
It is not clear whether this point was run before the primary judge. But in any event, I would not accept it. One commercial purpose of the Daimleigh refinancing was to permit PV to continue construction on the project. The refinancing permitted a hugely indebted developer to meet its immediate liabilities, albeit at a fairly heavy price in terms of fees and interest rates. PV also obtained the benefit of a waiver of existing breaches of its financing facility and an extension of term. Those benefits were real. None of these benefits was obtained by Pierora and PVS5.
That is to say, when CVS Mezz obtained guarantees from PV, Pierora and PVS5, the position was that the latter two companies had already acquired their approximately 10% (in value) of the land formerly owned by PV. No suggestion was made that the refinancing would enable PV (or anyone else) to undertake work on the land now owned by Pierora and PVS5. On the other hand, PV owned the balance of the land, was likely to have had obligations to pay further construction costs, and was in default on its (very substantial) facility. Taking an assignment from AET removed the imminent threat to PV of the appointment of receivers, and the contemplated extension of the facility would permit construction to continue.
The contemporaneous documents suggest that the benefits to PV were appreciated at the time. As summarised in a paper headed "Pentridge Village Pty Ltd Board Meeting 18 July 2012 Financial Position & CFAL Loan Assignment", the benefits to PV were reflected in Daimleigh's letter of intention as follows: "• existing events of default under the facility will be waived; • The term of the facility will be extended by no less than 18 months; • Gerry's personal guarantee will be removed (but Peter's guarantee will have to stay); • Daimleigh will provide financing flexibility for Pentridge to complete current building work in progress (S13 Apartments etc); • Any other consequential amendments, that might have to be made to the facility as a result of these changes, will not be materially adverse to Pentridge Village." The first, second and fourth of those points were direct benefits to PV, and were the indirect consequence of Daimleigh being put in funds, inter alia by PVS Mezz, in order to acquire PV's debt from AET.
I do not accept Gresham's submission that the absence of any benefit to any of PV, PVS and Pierora is the reason why each is liable to make contribution.

The reasons of the primary judge

The primary judge dealt with the submission involving Citibank and based on PV receiving the benefit of the transaction and PVS5 and Pierora receiving none at [49]-[53]. Paragraph 49 summarised the submission advanced at trial, which was rejected at [50] as follows: "Here, the suggestion appears to be that the position of Pierora and PVS5 is analogous to the position of the parents and that of PV to those of the son and daughter-in-law in Citibank. However, that is not the case. It is plain that Pierora and PVS5 gave guarantees because they were Chiavaroli-controlled entities and the Chiavaroli family were the principal beneficiaries of the loan from CVS Mezz because of their majority interest in PV and their control of Daimleigh. Consequently, the third exception to the principle that co-guarantors are liable equally to repay the guaranteed debt has no application in this case."
In relation to that reasoning, the appellants submitted that there was no evidence as to why Pierora and PVS5 gave guarantees. It is tolerably clear from the description of the negotiations leading to this transaction that CVS Mezz insisted upon, and obtained, further security from companies associated with either or both of Messrs Peter and Leigh Chiavaroli. I see no basis for interfering with his Honour's inference. But while that inference may explain the transaction, it does not disentitle Pierora and PVS5 from falling within the exception to the availability of contribution where guarantors who are truly volunteers do not share co-ordinate liabilities with a co-guarantor who obtains the entire benefit of the transaction.
The primary judge then addressed, and again rejected, a further way in which this submission was advanced at [51]-[53]: "There is a suggestion in the submissions of GCS and RGN that the liabilities of PV on the one hand and Pierora and PVS5 on the other are not co-ordinate because those liabilities have different qualities. PV was carrying out the Project. The arrangements that were put in place enabled Daimleigh to borrow additional money for the purpose of on-lending it to PV. Pierora and PVS5 became involved because the lender sought additional security. Consequently, the interests of PV and of Pierora and PVS5 were quite different. In my opinion, a submission in those terms is inconsistent with the principles stated by the High Court in Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969) 121 CLR 342; [1969] HCA 55. That case concerned contribution between insurers, not guarantors. However, there is no suggestion that the general principles of contribution are different in the two types of cases. In that case, Kitto J stated the principle in these terms (at 352): 'What attracts the right of contribution between insurers, then, is not any similarity between the relevant insurance contracts as regards their general nature or purpose or the extent of the rights and obligations they create, but is simply the fact that each contract is a contract of indemnity and covers the identical loss that the identical insured has sustained. …' In the present case, the liabilities of PV, Pierora and PVS5 are co-ordinate because each is liable for precisely the same debt owing by Daimleigh to CVS Mezz. The fact that that liability might be governed by different terms or arose for different reasons does not alter the position."
I respectfully disagree. The premise of the principle that contribution does not lie between some co-obligors is that the parties are co-obligors. Invoking the general principle describing when contribution is available is no answer to a submission that Pierora and PVS5 fall within an exception to that general principle.
Gresham's submission focussed on the benefit to Daimleigh and the "Chiavaroli family". Mr Pike put it thus: "Daimleigh is to be equated with the Chiavaroli family. It is the Chiavaroli family that is asked to put in more security. It does that through the guarantees being provided by Pierora and PVS5, and when we come to the evidence, the evidence demonstrates that PVS5 is a company associated with Mr Leigh, or Mr Lino Chiavaroli, and Pierora is the father - Peter Chiavaroli is the superannuation funds. The family is asked to put in further security, it does it in order to get the money necessary to take the assignment, which of course was then necessary in order for the project to continue - and I don't think this is in dispute, if the project continued and was a success, it is Daimleigh or the Chiavaroli family that stood to gain the upside."
To my mind, the references to the "Chiavaroli family" are an unhelpful distraction. Equity does not lightly disregard the structure chosen by the participants to the transaction. It is clear that Messrs Peter and Leigh Chiavaroli and the companies which provided funds for the Pentridge Village project were content to establish moderately elaborate legal structures for the property development, including at least two trusts. The securities put in place reflected the moderately complicated structure which was established. There was no suggestion, let alone pleading or finding, of sham. The position is analogous to what was said in Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 at [88], by reference to the parties' decision in that case to cease operating a partnership and to commence conducting a business using a company: "The appellant submits that the equitable doctrine of contribution should not be extended to outflank the consequences of the selection by the parties of the corporate structure. We agree. That selection brought with it the attendant legal doctrines of corporate personality and limited personal liability."
If one thing is clear, it is that the natural persons who stood behind the highly indebted property developer PV were concerned to avail themselves of corporate personality and limited personal liability. Any other stance would have been wholly irrational.
There is a further difficulty with Gresham's invocation of the "Chiavaroli family". Having regard to the positions of Mr Damian Chiavaroli (as director) and Ms Miranda Chiavaroli (as ultimate co-owner) of Pierora, it is not established that the only persons involved were Messrs Peter and Leigh Chiavaroli.
Mr Pike stressed that "Citibank was indeed a case where his Honour Bryson J held that one does need, in this area, to pierce the corporate veil in circumstances where the son ... and his wife in Citibank were carrying on business through a corporate vehicle". I do not agree. The provision of funds to the company owned and controlled by the son and his wife was necessarily to their benefit as shareholders, but could not be to the benefit of the son's parents. I do accept, however, that Daimleigh is in a substantially different position vis-a-vis PV than is analogous with the facts of Citibank. I return to this below.
Mr Pike also invoked equity's regard for substance over form. However, equity also respects the legal structures that parties employ. The interconnected web of companies and trustees put in place is the opposite of a putative partnership involving the Chiavaroli family. The point was made by Gummow ACJ, Hayne, Crennan and Kiefel JJ in HIH Claims Support Ltd v Insurance Australia Ltd (2011) 244 CLR 72; [2011] HCA 31 at [47]: "The authorities show that no court has departed from the requirement that the equity to contribute depends on obligors bearing a common burden, the basis for co‑ordinate liabilities in respect of the one loss. A proposition upon which the appellant wishes to rely - namely, that equity looks to substance rather than form - has never been invoked successfully to achieve a departure from, or modification of, that requirement" (citation omitted).
Thus I respectfully disagree with the reasons given by the primary judge, and I do not accept much of the submissions advanced by Gresham on appeal.
However, it remains unclear to me that what I would regard as a possible extension of the principle in Citibank disentitled PV from seeking contribution from Pierora and PVS5. I am conscious of the facts that on any view it was Daimleigh which was the principal and immediate beneficiary of the refinancing, and that the relationship between PV and Daimleigh is quite different from that between Ralph and Rosa Panebianco and their company. Those considerations warrant further analysis, going beyond what was argued on the appeal.

The circumstances when a right of contribution may be lost

Equity intervenes to prevent the creditor's chosen means of enforcement from producing an unequal shouldering of co-ordinate liabilities. Contribution was famously said to have been "the result of general justice from the equality of burden and benefit": Dering v Earl of Winchelsea (1787) 1 Cox Eq Cas 318; 29 ER 1184. In Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 the joint judgment at [41] preferred the term "co-ordinate liability", rather than the older language of "common burden" or "common obligation", to describe the necessary condition for contribution to be available.
The last two decades have seen a line of decisions of the High Court of Australia restating the principles of contribution, including Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17, Friend v Brooker and HIH Claims Support Ltd v Insurance Australia Ltd. Burke v LFOT denied contribution between a misrepresenting vendor and the purchaser's negligent solicitor, both of whom had caused loss to the purchaser, on the basis that the liabilities of the vendor and the solicitor to the purchaser were not "of the same nature and to the same extent". Friend v Brooker denied contribution claimed by a director from a co-director who had made loans to their company, because although the men had a "common design", they had chosen to operate through a company rather than as partners, and so there was no co-ordinate liability. In HIH Claims Support v Insurance Australia a legislative scheme enacted after the insolvency of a major insurer was held not to give rise to co-ordinate liabilities. Although those claims for contribution all failed, the High Court confirmed what had earlier been said (in Mahoney v McManus (1981) 180 CLR 370 at 378; [1981] HCA 54) that the search for a common obligation "should not be defeated by too technical an approach": HIH Claims Support at [39]. Those cases have been directed to identifying the conditions when contribution is available.
The issue in the present appeal is quite different. Co-sureties are a paradigm case of co-ordinate liabilities. However, there are longstanding exceptions when that prima facie right to contribution is unavailable, although these have been given less attention in recent cases.
Two categories of exception are well-settled. First it is uncontroversial that parties can by agreement contract out of what would otherwise be a right to contribution; in such a case the liabilities are not, ex hypothesi, co-ordinate.
Secondly, it is also uncontroversial that the right of contribution will not be available if there is a contrary "common intention" falling short of a legally enforceable agreement. That formulation of the qualification to the availability of contribution is consistent with an avoidance of "too technical an approach", as well as being soundly based in authority. For example, in Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460 at 488; [1967] HCA 3, in determining the less well known appeals from the third party proceedings bought by Mr Coulls' executor, the High Court confirmed that there was no right of contribution despite Mr and Mrs Coulls being jointly liable to repay a debt secured by a mortgage over jointly owned property. Barwick CJ, with whom McTiernan J agreed, said at 480 that the borrowing of money upon the security of the jointly owned land could properly be said to be: "to provide the deceased with the purchase money for the property. It was not borrowed for them both but for him alone. The signature of the mortgage, including its personal covenant, was not intended by the parties to create any right of contribution or indemnity" (emphasis added). Taylor and Owen JJ said at 488 that: "no such right will arise where such a result would clearly be contrary to the intentions of the parties at the time when the joint obligation was undertaken" (footnote omitted). Windeyer J agreed in this respect with the reasons of the other members of the Court.
The references to the parties' "intentions" in those passages, and others (such as Muschinski v Dodds (1985) 160 CLR 583 at 597 and 617; [1985] HCA 78), are plainly not references to their subjective intentions, but rather to the intentions to be imputed to them having regard to the transaction in its context. As was said in a not dissimilar context in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 at [25]: "Although the word 'intention' is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened." If there were any doubt that a different view might be taken by equity, it was resolved by the reasoning in Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26, especially at [59]-[60] and [102]-[115].
Bearing in mind that understanding of "intention", it may be that the proposition derived from Citibank on which the appellants relied, as to a case where one co-obligor receives all the benefit and others receive none, is best regarded as no more than an instance of the more general proposition relating to the intention to be imputed to the parties, having regard to the substance of the transaction. If one co-obligor receives all the benefit, and the other none, then absent some other factor pointing to a different result, an intention that the first co-obligor ranked ahead of the second might readily be imputed. It is neither necessary nor appropriate to express a concluded view on that point, however, such an approach finds some support in the authorities and writings in this area. What follows does not purport to be exhaustive.
First, when dealing with Official Trustee in Bankruptcy v Citibank Savings Ltd, the authors of J McGhee (ed), Snell's Equity (33rd ed, Sweet & Maxwell, 2015) (M Conaglen and S Bridge) state (at pp 1027-8): "it appears that the right of contribution will not be applied if it is clear from the nature of the transaction or the relationship between the parties that one co-surety was to rank ahead of others". That formulation does not refer to benefit.
Secondly, the passage from the Australian edition of Modern Contract of Guarantee, parts of which were quoted in the appellants' submissions reproduced above, when viewed in context makes it plain that a more limited principle is endorsed. What is in fact said at [12.1890] of that work is this: "But it has been held that, where one guarantor enjoys the whole benefit of the guarantee through that guarantor's shareholding in a company from which the co-surety has withdrawn, the co-surety is not liable to contribute. Since the guarantor enjoys all the benefits of the guarantee, he or she alone must bear its burden and the co-surety had a sound defence to an action for contribution" (the passages omitted from the appellants' submissions have been emphasised).
Rather than a general proposition, the statement is confined to a narrower description of the reasoning in a case, and squarely based upon the benefit enjoyed by a guarantor/shareholder of the borrower.
Thirdly, the proposition from Citibank accepted by the parties to this appeal is given only qualified support by the same authors in the English edition of J O'Donovan and J Phillips, The Modern Contract of Guarantee (English Edition) (2nd ed, Sweet & Maxwell, 2010) p 815: "There is, however, no English authority for this proposition which would allow one guarantor to escape liability to contribute on the basis that he received no benefit from the guarantee even though the guarantor is jointly and severally liable according to its terms. On the other hand, the proposition is consistent with the equitable genesis of the right of contribution ..."
Fourthly, the proposition to which the parties agreed is of considerable antiquity. A note in E Willes, A Denning and C Harvey, Smith's Leading Cases (13th ed, Sweet & Maxwell, 1929) Vol 1 p 163 states that the right to contribution is more properly based on the principle that: "where two persons are under an obligation to the same performance, though by different instruments, if both share the benefit which forms the consideration, they must divide the burden; if one only gets the benefit he must bear the whole."
That passage was applied by a unanimous Supreme Court of Canada in Bater v Kare [1964] SCR 206 at 212. However, that formulation of principle teases out a potential ambiguity in the formulation adopted by the parties.
On the one hand, as between PV, Pierora and PVS5, it is plain that Pierora and PVS5 were true volunteers, such that the only one of the three receiving any benefit from the refinancing was PV. However, the benefit indirectly received by PV was quite different from the benefit indirectly received by the guarantors Ralph and Rosa Panebianco in Citibank. Ralph and Rosa Panebianco were not only co-sureties. They were also owners and directors of the borrower. They necessarily received, through their shareholding, the whole of the benefit of the loan which they together with Innocenzo and Saveria Panebianco guaranteed.
On the other hand, taking a broader perspective, the company principally receiving the benefit of the refinancing was Daimleigh. Daimleigh was receiving the funds and using the majority of them to acquire PV's debt to AET. True it is that some benefit was received by PV by the refinancing. However, very differently from the case of Ralph and Rosa Panebianco, it cannot be said that all of the benefit from the transaction may be regarded as being received by PV.
Were this point dispositive of the appeal, I would favour inviting further submissions on whether there is a separate exception where one co-obligor receives all the benefits from the transaction, and, if so, whether it is sufficient for that co-obligor to be the only guarantor to receive any benefit from the transaction. In light of the conclusions I have reached on the remaining grounds of appeal, it is not necessary to take that course.
Finally, I would not wish the foregoing to be read as endorsing the rather different statement of principle by Tipping J in Trotter v Franklin [1991] 2 NZLR 92. Faced with a similar problem as arises in the present case, his Honour said at 98: "As the right to contribution is founded in equity the ultimate question is what is a just apportionment between the co-sureties. Ordinarily the justice of the matter will require equality of sharing. Obviously, if the parties have expressly provided to the contrary then justice will require such contrary agreement to be enforced. It seems to me however that equity may well require unequal sharing if the Court can discern by clear implication either that this is what the parties must have intended or that such unequal sharing is necessary to do justice in the particular case." References to "the justice of the matter" and "necessary to do justice in the particular case" are unhelpful insofar as they suggest a discretionary power to withhold equitable relief on some basis other than principle. It is inconsistent with the High Court decisions holding that identifying co-ordinate liabilities, rather than some more abstract identification of "justice", is necessary. I would respectfully decline to regard Trotter v Franklin as reflecting the law in Australia, noting that a similar view was expressed in Hampton v Minns [2002] 1 WLR 1, [2001] EWHC 555 (Ch) at [66].

Grounds 3 and 4 - agreement or common intention

The primary judge stated that the appellants relied on two pieces of evidence to establish the agreement: a conversation deposed to by Mr Leigh Chiavaroli between him and Mr Costa on 10 August 2012, and a letter dated 13 August 2012 from Daimleigh to PV purporting to confirm an agreement between PV and Mr Peter Chiavaroli that Pierora's assets were only to be used if PV's assets were insufficient.
The primary judge did not refer to it, but there was in evidence a hand-written note, made by Mr Leigh Chiavaroli, which purported to record a conversation between Mr Leigh Chiavaroli and Mr Costa at 10:45am on 10 August 2012 and included: "He [Mr Costa] agreed … that there was equity in P/V & he understood that I had sold my home, mortgaged other family assets, and that P/V debt would be called on then 1st before dad's superfund assets."
Mr Leigh Chiavaroli's affidavit, to which the primary judge did refer, recounted a conversation consistent with his filenote.
The 13 August 2012 letter stated: "We confirm that the agreement reached between Pentridge Village and Peter Chiavaroli (on behalf of Pierora) that the Pierora Superfund assets are only to be relied upon should the equity in Pentridge Village value not be substantial to cover the debt."
The primary judge disposed of this aspect of the claim on the basis that his Honour was not satisfied that the evidence sustained the conclusion of agreement or common understanding. His Honour did so at [42]-[48], which paragraphs may be summarised as follows.
The primary judge considered that Mr Peter Chiavaroli's testimonial evidence needed to be treated with care, recording a conversation years after the event during intense negotiations renegotiating PV's finance. He accepted that it was inherently plausible that there had been a conversation between the two men to the effect that recourse be had first to PV's assets, and that Mr Costa had agreed to that. However, the primary judge considered that it was implausible that any such agreement would "operate immediately and independently" of the formal agreements to be entered into recording the loan and the terms of the security. He regarded the conversation as the men expressing their "then current thinking on the terms of the agreements as part of a negotiation".
The primary judge regarded the language of both the conversation and the letter as referring to something to be noted in the written agreements to be executed, rather than a presently binding agreement between the guarantors. His Honour went further to say that the assertion of an agreement was not sufficient to prove its existence and that "there is no evidence that PV replied to the letter or any other evidence that PV agreed to what was proposed in the letter". The primary judge did not accept that agreement was reached in the terms alleged in the letter, and added that if it was, then it was superseded by the terms of the facility agreement.
In relation to the alleged common intention, the primary judge recorded that reliance was placed upon (a) the Chiavaroli family's reluctance to provide security over their own assets and (b) the fact that money was on-lent to PV, being used to assist with project costs for construction.
The primary judge regarded the reluctance of Pierora and PVS5 to provide guarantees as irrelevant. I respectfully agree, and no contrary submission was made by the appellants. The substantive aspect of this part of the appeal was addressed in [48] of the primary judge's reasons as follows: "As to the other matters relied on, it is not correct to say that all of the CVS Mezz facility was used to fund further work on the Project. Part of it was used to fund the acquisition of the CFAL debt. In any event, it is difficult to see why objectively the guarantors must have had a common intention that the primary liability to repay the debt as between them was to be thrown on PV simply because the funds were to be used to complete the Project. A submission to that effect ignores the commercial realties. PV was a joint venture vehicle in which the Chiavaroli family had a majority interest. It required additional funds to complete the Project for which it had been established. The other persons with an interest in the joint venture were reluctant to incur further liabilities. As a result, the Chiavaroli family used an entity it controlled (Daimleigh) to acquire the existing debt and to raise additional capital to on-lend to PV to enable PV to complete the Project or at least advance it to a stage where further moneys could be borrowed. Ultimately, one of the new lenders (CVS Mezz) required Chiavaroli-controlled entities as well as PV to guarantee the loan that the lender agreed to make to Daimleigh (another Chiavaroli-controlled entity) and to provide security in respect of those guarantees. It is difficult to see why those facts point to, let alone establish, a common intention between PV and the Chiavaroli-controlled entitles (Pierora and PVS5) that PV should be primarily liable for a debt that Daimleigh could not repay. That is particularly so in circumstances where, because of the amount of the CFAL debt that had been acquired by Daimleigh and remained owing by PV, most if not all of the benefits of completing the Project would be realised by Daimleigh and not PV. It may be that, having regard to their respective interests, there was a commercial justification for an arrangement in which PV bore the primary liability. But that is a long way from saying that the relevant circumstances establish that that is what the parties must have intended."
Before dealing with the appellants' challenge to the process of fact finding, it is necessary to address the notice of contention.

The notice of contention

The respondents, by notice of contention, maintained that any agreement alleged to have been entered into by PV, Pierora and PVS5 "as advanced by the appellants at trial was not pleaded in [12(k)] of the Further Amended Commercial List Response". The contention as formulated overstates the position, and not merely because there are not "pleadings", strictly speaking, in proceedings in the Commercial List. Paragraph (k) alleged that: "In or about August 2012, Pentridge, Pierora and PVS5 entered into an agreement (Agreement)". Paragraph (l) went on to allege that: "The terms of the Agreement were: (i) Pentridge would be primarily liable for the repayment of the CVS Mezz Facility; (ii) Pierora and PVS5 would only be secondarily liable to the CVS Mezz Facility after Pentridge; and (iii) Pentridge would indemnify PVS5 and Pierora for any loss they suffered as a result of being guarantors of the CVS Mezz Facility." That is precisely the case addressed on the merits by the primary judge and the subject of grounds 3 and 4.
The force of the notice of contention lies in the particulars provided to paragraph 12(k) of the Commercial List Response. As particularised, it is said that: "The Agreement was made between representatives of Pentridge, Pierora and PVS5, between Peter Chiavaroli and Lino (Leigh) Chiavaroli. The Agreement was oral and was entered into in Melbourne, Victoria in the following circumstances ..." There followed sub-paragraphs none of which mentioned Mr Costa. The point sought to be raised on the notice of contention was that both the conversation of 10 August 2012 and the subsequent letter involved Mr Costa, while the further amended commercial list response as particularised confined itself to an agreement made between Mssrs Peter and Leigh Chiavaroli.
It is clear from the foregoing that the primary judge did not treat the issues for resolution as confined by the particulars. That of itself is an indication that the notice of contention seeks to impose an unduly narrow approach. As will be seen, that is borne out by an analysis of the course of the litigation.
In short (8 page) opening submissions dated 31 January 2018 (5 days before the commencement of the trial), GCS and RGN said: "Pentridge agreed with Pierora that as between themselves, Pierora's guarantee would only be called on if Pentridge's assets were insufficient to pay CVS and CVS Mezz. The agreement was (primarily) oral and evidenced in contemporaneous correspondence: CB 488."
The reference to "CB488" was to page 488 of the Court Book, which contained the paragraph of the 13 August 2012 letter.
True it is that at trial Gresham maintained (during the course of objections to evidence) that Gresham was conducting this case on the basis of the pleadings and in particular the alleged agreement in paragraph 12(k) of the response. The primary judge's response to that intervention was "That's slightly delphic, Mr Pike". Mr Pike did not elaborate. Senior counsel for GCS and RGN then turned immediately to the letter and read the paragraph from the 13 August 2012 letter. There was no further articulation of an objection to reliance being placed on that letter of the agreement to which it referred.
The notes of the conversation between Mr Leigh Chiavaroli and Mr Costa were tendered without objection. If the litigation were confined in the way maintained on the notice of contention, it is difficult to see how those notes could have been relevant.
In closing submissions, Gresham did not maintain that reliance on the 13 August letter was outside the case as particularised. To the contrary, its submissions dealt with the letter on its merits: "Thirdly, the letter from Daimleigh to Pentridge dated 13 August 2012 relied upon at CB1/488 does not evidence an agreement. It is nothing more than a statement, purportedly by Daimleigh (a stranger to the alleged 'Agreement'), to Pentridge that Pentridge has previously entered into an agreement with Pierora. There is no evidence as to who in particular the document was sent to or whether there was any response to it. In the absence of any evidence of the actual proper formation of the Agreement, the letter goes nowhere."
That submission was reiterated orally. Neither in Gresham's written nor in its oral submissions was this point expressed as an alternative to a primary submission that the judge should not rule on the point because it was outside the cases as pleaded and particularised. No such primary submission was put.
I conclude that this is a case where the parties are to be taken to have expanded the issues beyond that particularised: Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 287; [1990] HCA 11. The primary judge made no error in addressing this aspect of the case on its merits. Indeed, the only articulation by Gresham at trial was the protest during objections, which was regarded as "slightly delphic" at the time, was neither elaborated nor renewed, and was inconsistent with Gresham's subsequent engagement with the merits of the case.
Put differently, it would not have been procedurally fair, having regard to the written and oral opening, the failure to object to the tender of the filenote, the failure to make any written or oral closing submission as to the limits of the issues and the positive engagement by Gresham with the merits of this issue, for the primary judge to have decided these grounds on the basis of the "slightly delphic" statement made in the course of an objection as to the scope of the particulars.
The judgment should not be upheld on the basis of the notice of contention.

Resolution of grounds 3 and 4

The appellants criticised the reasoning of the primary judge reproduced at [86] above. First, as between putative co-guarantors, it was said that it would be entirely natural for them, as between themselves, to agree as to the ranking of their guarantees. This was of no moment to the lender, who retained the freedom to call upon any of them in the order of its choice. Secondly, the references to what was "plausible" was said to undervalue the unchallenged and uncontroverted testimonial evidence of Mr Chiavaroli, which was also recorded in his contemporaneous note. Thirdly, the contemporaneous note falsified the proposition relied upon by the primary judge that there was no "other evidence" that PV agreed to what was proposed in the letter.
I would accept the gravamen of those submissions. There is no reason to doubt that the conversation between Mr Leigh Chiavaroli as recorded in the 10 August 2012 filenote, and as reiterated in the 13 August letter, in fact occurred in those terms. The primary judge made the contrary finding of fact, based on what his Honour regarded as "commercial realities", but without regard to the evidence recorded in the filenote. To be fair, it does not seem that the primary judge was ever taken to it. No party directed this Court to where that had occurred, and having read the written and oral submissions, I cannot see that his Honour was ever taken to the document.
Further and in any event, and with respect to the primary judge, I do not see why a common intention that PV would be the primary obligor is difficult to discern in the circumstances of this case. It was an inherently plausible position for one of the two directors of Pierora and PVS5 to propose, and for Mr Costa (with a minority interest in CV) to agree to. It does not matter that, ultimately, CVS Mezz did not agree to that priority, save that Mr Chiavaroli's attempts to procure such agreement tend to bear out the accuracy of the conversation recorded in the filenote. For the purposes of contribution, all that matters was the common intention of the guarantors.
Again with respect to the primary judge, I see no reason to infer that the agreement reached as to the priority of the guarantors was merely their "current thinking" as part of a negotiation. There was no reason to delay, and every reason to put in place, the priority as between the guarantors, in advance of achieving a deal with the financiers. True it is that the agreed priority was less formally documented than the balance of the refinancing. But all that is required is a "common intention" which may fall short of a legally enforceable agreement.
Accordingly, I would uphold these grounds of appeal.

Orders

For those reasons, the appeal should be allowed, and the orders made at first instance set aside. It was not suggested that there was any difficulty with the declarations sought by the appellants, which should be made. Nor was it suggested that there was any reason for costs not to follow the event, both at first instance and in this Court.
Accordingly, I propose these orders:
Appeal allowed.
Set aside the orders made on 19 March 2018 and 11 April 2018, and in lieu thereof declare that: 1. in respect of their indebtedness under guarantees and securities given to CVS Mezz, PV was, as between PV and Pierora and PVS5, a primary obligor of CVS Mezz, and Pierora and PVS5 were secondary obligors. 2. CVS Mezz is to be paid in the following order: 1. first, from the net sale proceeds received by the receiver from the sale of lots attributable to PV; and 2. secondly, after exhaustion of the PV sale proceeds, rateably from net sale proceeds received by the receivers from the sale of lots attributable to Pierora and PVS5. 1. If the receivers hold a residue after payment to CVS Mezz, Pierora and PVS5 are to receive from the residue (rateably) up to the full amount referable to the sale by the receiver of lots attributable to them respectively in priority to PV.
Order that the first respondent Gresham pay the appellants' costs at first instance and of this appeal.

Amendments 07 November 2018 - [62] - "contribution by a director" changed to "contribution claimed by a director". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 November 2018

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