IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2013-470-569 [2015] NZHC 1315

BETWEEN	IAN RODNEY RENNER
Plaintiff	

AND	
CATHERINE MARY RENNER First Defendant

IAN LUKE DUSTIN Second Defendant	

Hearing:	25, 26 and 27 May 2015	

Counsel:	
C T Gudsell QC and C F Murphy for Plaintiff
W T Nabney and D P Weaver for First Defendant
Second Defendant in person	

Judgment:	
11 June 2015	

JUDGMENT OF BREWER J

This judgment was delivered by me on 11 June 2015 at 2:00 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:	Mackenzie Elvin (Tauranga) for Plaintiff
Lyon O’Neale Arnold (Tauranga) for First Defendant
(Copy to Second Defendant in person)

RENNER v RENNER [2015] NZHC 1315 [11 June 2015]

Introduction

[1]       Mr Renner, Mrs Renner and Mr Dustin were in a business venture together. The aim of the venture was to acquire, develop and sell for profit land at Te Puna, Tauranga   (“the   property”).      The   venture   did   not   prosper.      The   financier, FM Custodians  Ltd  (“FMC”),  called  up  its  loan.    It  also  called  on  Mr Renner, Mrs Renner and Mr Dustin to pay the money owed to it under the terms of a deed of guarantee and indemnity.   Pursuant to this deed, the parties jointly and severally guaranteed the venture’s debt to FMC.

[2]       At the beginning of the venture, Mr Renner and Mrs Renner were married. They had separated by the time they entered into the guarantee.

[3]       Mr Renner was the only one of the guarantors who could call on substantial assets to meet obligations under the guarantee.  He negotiated an outcome with FMC whereby he bought the property for $1,600,000 and paid a further $1,320,000 to FMC in full and final settlement of his obligations under the guarantee.

[4]       FMC subsequently gained summary judgment against the venture company, Mrs Renner and Mr Dustin for $465,817.  Mrs Renner eventually paid $380,000 in full and final settlement of her obligations under the guarantee.  Mr Dustin became bankrupt, but the bankruptcy was annulled six months later.  He has paid nothing. The venture company went into liquidation and paid nothing.

[5]       Mr Renner wants Mrs Renner and Mr Dustin (if he has the financial ability) to share equally with him the burden of paying out on the guarantee.  That means that Mrs Renner and Mr Dustin would have to reimburse him for their shares of the
$1,320,000 paid by him.

[6]       Mrs Renner and Mr Dustin do not think they should pay Mr Renner anything at all.  Their case is that Mr Renner deliberately arranged his settlement with FMC to reduce the sum paid for the property below market value so as to inflate the sum paid on his guarantee, the purpose being to maximise the contributions he can seek from Mrs Renner and Mr Dustin.

The law

[7]       Where a number of people have guaranteed, jointly and severally, a debt then the person owed the debt can take action under the guarantee against any or all of the guarantors as seems most expedient for recovering the debt.1    If this means that a guarantor ends up paying more than an equal share as between all the guarantors, then the overpaying guarantor can seek contribution from the other guarantors.2   He can do so in the way which is most expedient.  For example, if one co-guarantor has assets  but  the  others  do  not,  then  the  overpaying  guarantor  can  focus  on  the guarantor with the assets.3   The underlying principle is that, unless the parties have agreed otherwise, contributions by co-guarantors to the payment of their guaranteed sum should be equal.4   Contribution is founded firmly upon equitable principles.5

[8]       The law of equity does not, however, allow an overpaying guarantor to make an inequitable profit through seeking contributions from co-guarantors.6   In this case, the legal arrangement between Mr Renner and FMC is clear.   There has been a settlement  involving  Mr Renner  purchasing  the  property  for  $1,600,000  and discharging his obligations under the guarantee for $1,320,000.  But equity will not allow him to pursue Mrs Renner and Mr Dustin to reimburse him for the entirety of
their equal shares of the $1,320,000 if he has, without reasonable care, inflated that figure by purchasing the property at an undervalue.  Their liability to him will be
reduced to the extent that the property was sold undervalue.7   But if he has contrived

1	See, for example, Stimpson v Smith [1999] Ch 340 (EWCA) at 349 (per Peter Gibson LJ).
2	Trotter v Franklin [1991] 2 NZLR 92 (HC) at 97.
3           In circumstances where one of the co-guarantors is insolvent, the contribution of the other solvent co-guarantors may be increased proportionately to meet the common debt: Lowe v Dixon (1885) 16 QBD 455 at 458; De Sousa v Cooper (1992) 106 FLR 79 (NTSC) at 81.
4	Trotter v Franklin, above n 2, at 98.
5	At 97.
6	Re Arcedeckne, Atkins v Arcedeckne (1883) 24 Ch D 709; Steel v Dixon (1881) 17 Ch D 825.
7           See the line of authority requiring a guarantor who has satisfied the guarantee obligation to take reasonable care to preserve the value of any property that secured the debt that is handed over to him by the creditor
where the co-guarantors are also entitled to the benefit of that security. If the guarantor causes the property to reduce in value to the detriment of his co-guarantors, the liability of his co-guarantors for contribution will be reduced to the extent that they have been prejudiced by his actions: Greenwood v Francis [1899] 1
QB 312 (EWCA) at 323-324 (per Collins LJ); Monk v Smith (1893) 14 NSWLR (Eq) 311; Traders’
Finance Corporation Ltd v Marks [1932] NZLR 1176 (SC) at 1180. The authors of The Modern Contract of Guarantee (2nd English Ed, Sweet & Maxwell, London, 2010) at [12-209] identify that the nature of the
guarantor’s duties in relation to the security property should be similar to the nature of the creditor’s duty in
relation to securities the creditor holds for the principal debt. Accordingly, see also the line of authority which holds that where the creditor of a guaranteed debt fails to take reasonable care to obtain the proper
price for the security property when exercising a power of sale as mortgagee, the guarantor’s liability to the creditor can be reduced to the extent that the property was sold undervalue: Skipton Building Society v Stott [2001] QB 161 (EWCA) and Potomek Construction Ltd v Zurich Properties [2004] 1 All ER (Comm) 672.

to purchase the property at an undervalue, equity will deny him the right to contribution altogether.8

Issues

(a)	Did Mr Renner inflate the amount of his guarantee payment so as to gain greater contributions from Mrs Renner and Mr Dustin?

(b)	To what, if any, contributions from Mrs Renner and Mr Dustin is

Mr Renner entitled?

Did Mr Renner inflate the amount of his guarantee payment so as to gain greater contributions from Mrs Renner and Mr Dustin?

[9]       The  evidence  is  that  Mr Renner,  through  his  solicitors,  negotiated  the agreement resulting in him purchasing the property and discharging his guarantee. Initially, FMC wanted a settlement figure of $2,920,000 to be paid as the purchase price for the property.  Mr Renner’s lawyers made it clear that Mr Renner wanted to retain  the ability to  seek contribution  from  his co-guarantors.   Accordingly,  the settlement was to be structured around a payment for the property and a separate payment on the guarantee.

[10]     FMC commissioned two valuations of the property:

(a)	One of the valuations was by Mr Middleton.  It valued the property as a whole at $1,600,000 (plus GST, if any), with a forced sale value of
$1,350,000 (plus GST, if any).

(b)	The  second  valuation  was  by  a  Mr  Haden.	The  valuation  was
$3,110,000 (excluding GST), with a forced sale value of $1,555,000 (excluding GST).

8           See generally Burke & Anor v LFOT Pty Ltd & Ors [2002] 109 CLR 282 (HCA) at 293 (per Gaudron A-CJ and Hayne J) and at 336-337 (per Callinan J) in which the High Court of Australia  held  that  an  overpaying  guarantor  would  be  denied  contribution  if  he  acted fraudulently, negligently, or with wilful misconduct or gross negligence.

[11]     The reason for the difference between the valuations was that Mr Haden first valued the property as though it had been fully subdivided.  That was never going to happen.  The reason the business venture failed in the first place was the enormous resource management difficulties in gaining subdivision and related planning approvals. Therefore, it was the forced sale value which was relevant.

[12]     The main reason that Mrs Renner and Mr Dustin cry foul is that within a matter of months of settling the deal with FMC, Mr Renner subdivided the property into three lots and sold them at a considerable profit.  The settlement of the deal with FMC took place on 11 October 2011.  On 17 January 2012, Mr Renner sold one of the three lots for $275,000.  On 8 May 2012, Mr Renner sold an option to purchase the largest lot to Mr Donne for $175,000.  The sale price pursuant to the option was
$2,000,000.  On 6 November 2013, Mr Renner transferred the third lot (which had a house on it) to a trust established by him and his new partner, for $675,000.  The total value of the sales was, therefore, $3,125,000 plus GST.   On these figures, Mr Renner made a profit of $1,525,000.  If his guarantee payment is deducted, the overall profit is $215,000.9

The negotiation with FMC

[13]     FMC issued its letters of demand on 19 April 2011.   These were followed later that month by notices under the Property Law Act 2007.  FMC intended to sell the property as mortgagee.   The venture company had no ability to repay FMC. Neither did Mrs Renner nor Mr Dustin.  Meetings were held, and it was clear that only Mr Renner had a chance of negotiating a resolution of his position as guarantor because his Trust owned a commercial property with equity which could be made available.

[14]     All the guarantors wanted to avoid a forced sale.  Mrs Renner and Mr Dustin had authorised a real estate firm to market the property during 2010 and 2011, both as a whole and as proposed sections.  No sales resulted.  On 24 February 2011, the
same firm, funded by FMC, attempted to auction the part of the property comprising

9           These figures are subject to the caution that Mr Donne eventually settled his sale partly in cash and partly by transferring title to two pieces of land in a subdivision he developed. Mr Renner’s evidence is that he has been unsuccessful in finding buyers for them.

the two smaller lots.10   No bids were received. A forced sale was likely to result in a

low price which would directly affect the guarantors’ liability under their guarantee.

[15]     In May 2011, FMC commenced summary judgment proceedings in reliance on the guarantee against the parties. The amount claimed was $3,039,355.58.

[16]     On 12 July 2011, Mr Renner’s solicitor made a proposal to FMC.  The details do not matter since they bear little resemblance to the final agreement.   What is relevant is that the solicitors stipulated that Mr Renner’s “subrogation rights against co-guarantors [be] preserved …”.11   In his evidence, Mr Renner said it was important to him that if he had to use his personal assets, or assets owned by his Trust, to settle his  guarantee  then  he  needed  to  preserve  his  ability  to  seek  contribution  from
Mrs Renner and Mr Dustin.

[17]     Further correspondence occurred between the lawyers representing FMC and Mr Renner.   A meeting was held in Taupo on 23 July 2011.   On 29 July 2011, Mr Renner’s  lawyer  wrote  to  FMC  offering  to  settle  Mr Renner’s  obligation  as follows:12

3.         We confirm the following offer to settle this matter on our client’s behalf  is  $2.92  million.    Our  clients’ preferred  structuring  is  as follows:

(a)	Ian  Renner Trust purchases the Lochhead Road property.
The property will need to be purchased at a valuation to be acceptably determined by both parties. The valuation would
need to reflect the current value of the property and will be subject to the securing of suitable evidence to substantiate
that value for your purposes. We would expect the valuation to be in the vicinity of $1,300,000 - $1,600,000.

(b)	The balance of the outstanding amount to be satisfied by Ian
Renner.

4.         We believe this will enable the appropriate preservation of the rights of subrogation against the co-guarantors for you and our client.

10	The property, by this stage, had resource consent to subdivide what is known as the house block into two lots, one of which would contain the dwelling on the property. The lots had areas of
9290 m² and one hectare, leaving the bulk of the property, about 42 hectares, in the third lot.
11	ABD, second bundle, at 539.

5.         We appreciate that the settlement offer from our client is currently less than what is owing so accordingly the subrogation rights will need  to  be  addressed  in  conjunction  with  you.  It  would  be understood that your shortfall will be a priority to our client’s recoveries.

[18]     Mr Renner was not in a position to make these payments from his own assets. The letter went on to propose that, in essence, FMC would lend Mr Renner the money.  Consequently, the letter went on to set out how Mr Renner would repay the loan.  First, Mr Renner would complete the subdivision of the house block and then sell  the  two  lots.    The  anticipated  sale  price  was  stated  to  be  approximately
$900,000.  The sale price of the large block of land was anticipated to be $1 million. Contemporaneously, the commercial property owned by the Trust, which would be used to partly secure the loan, would be prepared for sale with a view to reducing debt as quickly as possible.

[19]     By  email  of  30  July  2011,  FMC  advised  Mr Renner’s  lawyer  that  the proposal was acceptable and that valuations would be commissioned.   The email finished:13

I see us confirming our deal contractually and then making an immediate claim against the other guarantors.  Is that how you see the deal going down?

[20]     On 16 August 2011, FMC’s solicitor sent Mr Renner’s solicitor an agreement for sale and purchase and a loan offer referring to a purchase price of $2,920,000 for the property.   This was not in accordance with the proposal sent by Mr Renner’s lawyer in his letter of 23 July 2011.  On 18 August 2011, Mr Renner’s solicitor (who was also the solicitor for Mr Renner’s Trust) pointed out the problem.  He said:14

The amount of $2,920,000 is the prepared settlement sum from Ian Renner Trust to purchase the Lochhead Road property and from Ian as guarantor to satisfy the shortfall.

Our correspondence of 29 July (copy attached) 3(a) and (b) expresses our client’s intention. Our client Trust is prepared to pay the currently assessed forced sale price. To do otherwise will eliminate any subrogation rights available to Ian Renner against co-guarantors. From the Ian Renner Trust point of view, it is unacceptable to pay more than a realistic price for Lochhead Road; such action would leave Trustees exposed.

[21]     Later in the letter the lawyer writes:15

We have raised the issue around the purchase price of Lochhead Road. Our understanding is that $2.92 million is in the vicinity of $1 million above the current forced sale value.

This is an important factor for our client but does not affect the outcome for your client.

[22]     On 19 August 2011, the lawyer for FMC advised Mr Renner’s lawyer:16

Our client is prepared to split the proposed settlement sum between the value of the Lochhead Road property, and the amount to be contributed by Ian Renner   as   guarantor.   Obviously   those   amounts   will   depend   on   the valuations.

[23]     The  two  valuations  commissioned  by  FMC  were  made  available  to Mr Renner’s lawyer on 1 September 2011.   They are to the effect set out in [10] above.

[24]     Mrs Renner was provided with copies of the valuations. There was a meeting between the parties and their lawyers on 20 September 2011 and a meeting between Mrs Renner, Mr Renner and their lawyers on 21 September 2011.   No agreement could be reached for a joint approach.   The amount of $1,600,000 as the price Mr Renner was prepared to pay for the property was raised at the meeting.

[25]     The next  day,  22  September 2011,  Mr Renner’s  lawyer sent  an  email  to FMC’s lawyer reporting on progress.   He addressed the need for the settlement figure to be split between a purchase price for the land ($1,600,000) and the balance to be met by Mr Renner personally.  Mr Renner’s lawyer went on to say:17

It was our concern that if the purchase price for the land is the settlement amount  Ian  would  lose  his  right  of  contribution  from co-guarantors,  he cannot afford to do that. We have since secured an opinion from Grant Illingworth QC and he confirms that view.

[26]     Eventually, agreement was reached on the basis of a purchase price for the property of $1,600,000 and a payment of $1,320,000 in full and final settlement of
Mr Renner’s obligations under the guarantee.

15	At 634.

Discussion

[27]     A co-guarantor, negotiating to settle his position under a guarantee, is entitled to do that without involving his co-guarantors.18   It is his own position he is seeking to settle.

[28]     I place some weight on the fact that the negotiations were carried out between solicitors.  My impression of Mr Renner when he gave evidence is that he is not, in this area, an experienced, decisive and incisive businessman.  His prior experience with property development had largely been with a 30 lot subdivision.  He gave me the impression of someone struggling to understand his situation and express it clearly.  He had, for example, difficulty reading the written brief with which he had been provided by his lawyers.   Clearly, it was not written within his accustomed vocabulary.    I conclude  that  in  this  matter  he was  following  the  advice  of  his solicitors.

[29]     So far as that is concerned, there is nothing in the correspondence to indicate that   Mr Renner’s   lawyers   and   FMC   were   acting   other   than   professionally. Mr Renner’s lawyers, as they should have done, protected Mr Renner’s interests by separating the price of the property from the payment under the guarantee.  The price of the property was negotiated by reference to two valuations obtained by FMC. The price of $1,600,000 was the market price assessed by one of the valuers and was a little higher than the forced sale price given in the second valuation.  I find that this was certainly a forced sale situation.

What was the market price of the property?

[30]     Mrs Renner and Mr Dustin contend that all that mattered to FMC was that it get $2,920,000 from Mr Renner.  How the payment was divided was of no moment to FMC. This enabled Mr Renner to deflate the portion of the payment which related to  the purchase  of the  property.   As  evidence  of this,  they called  Mr Harris,  a registered valuer, who valued the property at $2,135,000 as at the date of sale.  In doing so, he relied heavily on the sale of a neighbouring property purchased by
Mr Donne.

18	See Stimpson v Smith, above n 1, at 349 (per Peter Gibson LJ).

[31]     Mr Middleton gave evidence.  He is an experienced valuer and he described his valuation method.  It was entirely orthodox.  He looked for sales of comparable properties and used his experience and judgment to adjust the valuation in the light of the characteristics of the property.   He noted that the low lying land had been inundated by salt water following a breach of a stopbank.   He discounted further subdivision as an economically viable option and so compared the property with grazing  properties  that  had  a  water  frontage.     I  am  entirely  satisfied  that Mr Middleton produced a genuine valuation in accordance with accepted valuation principles.

[32]     Mr Harris made his valuation long after the sale, but as at the date of the sale. He  knew  that  shortly  after  the  sale  the  neighbouring  property  was  bought  by Mr Donne for a far higher per hectare price than was paid for the property by Mr Renner.    Mr Middleton,  of  course,  did  not  know  about  the  Donne  purchase because it had not been finalised at the time he made his valuation.  His evidence was that he would not have thought it directly comparable anyway because of the superior characteristics of the land bought by Mr Donne.  Mr Harris’s view was that Mr Middleton  should  have  inquired  with  agents  as  to  whether  any  sales  were pending, should have found out about Mr Donne’s offer and should have realised that it was relevant to the valuation of the property.

[33]     Mr Harris took a more unorthodox approach to this valuation.  He still looked at comparative sales in the area, but to him the value of the property lay not in its grazing capacity but in its location.  So the valuation was based on the potential it had for sale to a buyer, which turned out to be Mr Donne, who would value it for reasons unrelated to its ability to grow grass.  Those reasons included its proximity to the city, its views and its harbour frontage.

[34]     As  it  happened,  Mr Middleton’s  valuation  was  light.    Mr Donne,  having bought the neighbouring property, was prepared to pay $400,000 more for the property than Mr Middleton’s valuation, and to secure the right to buy at that sum with an option fee of $175,000.  I conclude that the market price of the property, as it turned out, was what Mr Donne was prepared to pay for it.

[35]     In my view, this does not affect the issue between the parties.  I am satisfied that Mr Middleton’s valuation was produced genuinely and competently,19  and was relied upon by FMC and Mr Renner genuinely and without ulterior motive.

[36]     However, that is not necessarily the end of it.   Mrs Renner and Mr Dustin claim that prior to entering into the settlement with FMC, Mr Renner had been introduced to Mr Donne.  They say Mr Renner knew that he would be able to on-sell the largest lot of land to Mr Donne and thus make a profit on the acquisition of the property from FMC.   Mrs Renner and Mr Dustin say that this is borne out by the valuation of Mr Harris who assessed the valuation of the property at the relevant time at $2,135,000.

[37]     Mrs Renner and Mr Dustin argue that at equity Mr Renner should not be able to both profit from his purchase of the property at a below market rate and seek contribution from his co-guarantors based on the below market rate acquisition.

[38]     I am satisfied that although Mr Renner had been introduced by a real estate agent to Mr Donne before agreeing the settlement with FMC, there was nothing concluded.  Mr Renner attended a single meeting with Mr Donne, arranged by the real estate agent.  Mr Renner’s recollections of the meeting are (typically) hazy.  The real estate agent is dead.   I conclude that this was no more than an exploratory meeting and nothing of legal significance was achieved.  At most, Mr Donne was showing some interest as a prospective purchaser.

[39]     I note that following the settlement of the deal with FMC, Mr Renner signed a further authority for the real estate agent to market the whole of the property.  It was advertised for sale by the agent.   At one point, Mr Renner approached the Regional Council to see if the Regional Council would buy the property.   When, eventually,  an  agreement  was  reached  with  Mr Donne,  it  seems  to  have  been negotiated by the real estate agent and Mr Renner simply went along with it.  It was
nothing more than an option.  The option price of $175,000 was paid in staggered

19         I am assisted in reaching this conclusion by Propell National Valuers (WA) Pty Ltd v Australian Executor Trustees Ltd [2012] FCAFC 31 at [77] in which the Full Court of the Federal Court of Australia held that when establishing whether a valuer has performed his or her task in a negligent manner, only comparative sales information up until the time of the valuation is relevant.

amounts and was calculated, I infer, to permit Mr Renner to pay the interest on the loan he had taken from FMC to finance the deal.   In other words, Mr Donne was buying time to see whether he wanted to go ahead with the purchase.  In the end, he did not.  Or, rather, he cancelled the option and proposed a new deal which would see Mr Renner taking his purchase price partly in cash and partly in land from a development venture of Mr Donne’s which was not prospering.  Mr Renner had little choice other than to agree, and still holds the pieces of land since he has been unable to sell them at anything approaching a satisfactory price.   The market is still depressed.

[40]     In my view, Mr Renner bought the property intending to sell the three lots separately and in the hope of making a profit, or at least minimising his loss.  He was entitled to do that.  A co-guarantor cannot unfairly structure a buyout of property subject to a guarantee so as to profit from his co-guarantors.20   But that is not what Mr Renner did.   He took control of a situation in which a forced sale could well result in a very significant loss to himself as well as his co-guarantors.  The deal with FMC was negotiated in a principled way between professionals.  The price of the property was reached by reference to two valuations obtained by FMC and without
any skewing to reflect Mr Renner’s wish to retain his right to claim contribution

from Mrs Renner and Mr Dustin.

[41]     There was no agreement with Mr Donne.  The agreement eventually reached with Mr Donne was an option to purchase.  Mr Donne could withdraw from it.  He did, in fact, withdraw from it and negotiated a new agreement which saw Mr Renner accepting two pieces of land as part of the purchase price.

[42]     Mr Renner took a risk in order to gain the control which he could use to minimise his loss.   It worked.   If it had not, and he had had to sell below the
$1,600,000 he paid for the property, he would not be able to add the shortfall to the claim he now makes against his co-guarantors.

[43]     I find that Mr Renner did not inflate the amount of his guarantee payment so as to gain greater contributions from Mrs Renner and Mr Dustin.

20	See, for example, Re Arcedeckne, Atkins v Arcedeckne, above n 6.

Contributions

[44]     Mr Renner paid $1,320,000 on his guarantee.  Mrs Renner paid $380,000 and

Mr Dustin paid nothing.  On an equal contribution basis each guarantor should pay

$1,320,000 plus $380,000, divided by three.  That equals $566,666.67 per guarantor. Since  Mr Renner  has  paid  more  than  his  share,  Mrs Renner  is  liable  to  pay Mr Renner $186,666.67.  Mr Dustin is liable to pay $566,666.67.

[45]     However, it might be that Mrs Renner and/or Mr Dustin cannot make their full payments.   If so, Mr Renner is entitled to recover from them unevenly but proportionately.  He can enforce contribution unevenly so as to recoup as much as he can, but not to the point where either Mrs Renner or Mr Dustin contributes more
than Mr Renner.21   For example, if Mr Dustin is insolvent then Mrs Renner could not

be required to pay more than half of the total of $1,700,000 paid on the guarantee. Her maximum liability to Mr Renner would be, therefore, $470,000 ($1,700,000 ÷ 2
= $850,000; minus $380,000 already paid).   If Mr Dustin were to make a partial payment then that would reduce Mrs Renner’s liability to Mr Renner accordingly.22

Decision

[46]     The plaintiff succeeds in his claim.  Mrs Renner is ordered to pay Mr Renner the sum of $186,666.67.  Mr Dustin is ordered to pay Mr Renner $566,666.67.

[47]     I make a declaration that Mrs Renner and Mr Dustin are jointly and severally, but  proportionately,  liable  to  share  with  Mr Renner  the  total  sum  paid  on  the
guarantee, namely $1,700,000.

21         The rule is that contribution depends on the number of solvent sureties at the time  when contribution is sought. So, if there are three sureties and one of them has paid the whole debt, and the second surety is solvent but the third surety is insolvent, the first surety can recover up to half of the whole debt from the second surety: Lowe v Dixon, above n 3; Peter v Rich (1830) 1
Ch Cas 19 at 34.
22         For example, if Mr Dustin were able to pay only $100,000, this would reduce Mr Renner’s payment on the guarantee to $1,220,000. As between Mr and Mrs Renner, the total paid on the guarantee would be $1,600,000.  A half share for each would be $800,000.  Mrs Renner would, therefore, have to pay Mr Renner $420,000.

[48]	The plaintiff is entitled to costs.  I award these on a 2B basis.  In the event of

disagreement among the parties they can be calculated by the Registrar.

Brewer J