Commonwealth Bank of Australia v White (No.2 of 2004)

[2004] VSC 268

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5660 of 1997

COMMONWEALTH BANK OF AUSTRALIA	Plaintiff
v
PETER EVERETT WHITE	Defendant
and
THE SOCIETY OF LLOYD’S	Third Party

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JUDGE:	Mandie J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 August 2004
DATE OF JUDGMENT:	6 August 2004
CASE MAY BE CITED AS:	Commonwealth Bank  v White (No.2 of 2004)
MEDIUM NEUTRAL CITATION:	[2004] VSC 268

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PRACTICE AND PROCEDURE – application for leave to serve Counterclaim – whether arguable claim for damages for breach of exclusive jurisdiction clause.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms M Loughnan	Ryrie Bridges
For the Defendant	Mr C N  Scerri, QC with Mr P H Solomon	Foster Hart
For the Third Party	Mr P Jopling, QC with Dr I J Hardingham, QC	Freehills

HIS HONOUR:

1. By Summons dated 28 July 2004 the third party (“Lloyd’s”) seeks leave to file and serve a Counterclaim against the defendant (“White”).

1. The proposed Counterclaim pleads that White was an underwriting member of Lloyd’s (“a Name”) from 1980 until 1992 and that in October 1986 he signed a general undertaking whereby he contracted with Lloyd’s, inter alia, as follows:

“Each party hereto irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute and/or controversy whatsoever in nature arising out of or relating to the Members’ membership of and/or underwriting of insurance business at Lloyd’s and that accordingly any suit, action or proceeding …arising out of or relating to such matter shall be brought in such courts…”

1. The proposed Counterclaim goes on to allege that the present third party proceeding has been issued and continued in breach of the above contractual provision and claims damages arising out of such breach, namely, “all costs and expenses of and incidental to Lloyd’s defence… insofar as such costs and expenses are not recovered by Lloyd’s from White on a normal taxation of costs.”

1. It was common ground that this Counterclaim would only arise if Lloyd’s was successful in its defence of the third party proceeding.  In other words the assumption is that Lloyd’s defeats the third party claim, obtains an order for party-party costs and then it wishes to contend that it is entitled to the balance of any costs incurred as being damages arising from the breach of the exclusive jurisdiction clause.

1. It was submitted on behalf of White that this was a hopeless Counterclaim because the Supreme Court had permitted White to proceed with his third party claim.  This submission does not appear to me to be a sound one but, at any rate, the contrary is certainly arguable.  By that I mean, it is at least arguable that if Lloyd’s succeeds in its defence to the third party proceeding it might have a claim for damages for breach of contract notwithstanding that, for a number of reasons, this Court refused to stay the third party proceeding on a number of occasions when Lloyd’s so applied.

1. Accordingly the third party will have leave to file and serve the proposed Counterclaim and I will hear the parties as to appropriate consequential directions.  I will also hear argument as to costs.