Franks v Equitiloan Securities Pty Ltd - [2010] NSWSC 693

CITATION: Franks v Equitiloan Securities Pty Ltd [2010] NSWSC 693

HEARING DATE(S): 24/06/10

JURISDICTION: Equity

JUDGMENT OF: Pembroke J

EX TEMPORE JUDGMENT DATE: 24 June 2010

DECISION: See judgment paragraph 24

CATCHWORDS: CONSTRUCTION - undertaking to court - context and surrounding circumstances

LEGISLATION CITED: Civil Procedure Act 2005

CATEGORY: Principal judgment

CASES CITED: Bryant & Anor v Keith Harris & Co Ltd & Ors (1980) 33 ALR 437
Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Franks v Equitiloan Securities Pty Ltd (No 2) [2008] NSWSC 456
Owston Nominees No 2 Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451
Reardon Smith Line Ltd v Hansen-Tangen (1976) 1 WLR 989

PARTIES: Phillip Maurice Franks - Plaintiff
Equitiloan Securities Pty Ltd - First Defendant
Equitiloan Limited - Second Defendant

FILE NUMBER(S): SC 2000/00037510

COUNSEL: M W Sneddon with C Alexander for the plaintiff
J Hogan-Doran with B Kaplan for the defendant

SOLICITORS: DTA Lawyers - Plaintiff
Tucker & Cowen - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

PEMBROKE J

THURSDAY 24 JUNE 2010

00/27510 - PHILLIP MAURICE FRANKS v EQUITILOAN SECURITIES PTY LIMITED

EX TEMPORE JUDGMENT - On amended notice of motion and costs

1 HIS HONOUR: This is an application brought pursuant to an amended notice of motion dated 18 June 2010. I will grant leave to amend the original notice of motion. That leave is neither opposed nor consented to by the respondent.

2 The applicant on the notice of motion is the plaintiff in the proceedings. The original notice of motion sought orders that the second defendant be found guilty of contempt for failure to comply with an undertaking given on 13 November 2000. The underlying dispute between the parties relates to the meaning and the content of that undertaking.

3 The amended notice of motion was not brought into existence until 18 June 2010. The original notice of motion was filed on 27 April 2010. I am prepared to make an order granting leave to file the amended notice of motion on the basis that, arguably, an issue as to the proper construction and meaning of an undertaking given to the Court comes within s 73(1)(a) of the Civil Procedure Act. I regard the argument as weak, but it is necessary for me in any event to consider the substance of the applicant’s submissions.

4 The terms of the undertaking given on 13 November 2000 were as follows:

1. Defendant pay Plaintiff’s costs up to and including 25 October 2000 and Plaintiff to pay costs thereafter.

2. Equitiloan Limited be joined as Second Defendant to the proceedings.

3. Note the undertaking given to the Court by the Second Defendant that, upon tender by the Plaintiff to the Defendants of the amount due under mortgage 5353835W and Floating Charge number 666712 (together “the Mortgage”) it will join with the First Defendant in doing all such things…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NSWSC 693
Decision Date: 24 June 2010

CaseChat Overview and Summary

The case of Franks v Equitiloan Securities Pty Ltd involved Franks, a mortgagee, and Equitiloan Securities Pty Ltd, a mortgagee's advocate. The dispute centred on whether the mortgagee was entitled to certain costs under the mortgagee's undertaking to the court, which had been entered into in the context of a foreclosure application. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was the interpretation of the mortgagee's undertaking, specifically whether it could be construed to cover the costs in question. The court needed to determine the scope and purpose of the undertaking and whether it included the costs claimed by the mortgagee.

The court examined the context and surrounding circumstances of the undertaking, including the nature of the foreclosure application and the specific terms of the agreement. The mortgagee argued that the undertaking was broad and intended to cover all costs associated with the foreclosure proceedings. In contrast, Equitiloan Securities Pty Ltd contended that the undertaking was limited and did not extend to the costs in dispute. The court found that the undertaking's language was not explicitly broad and that the context in which it was entered into did not support such an expansive interpretation. The court held that the mortgagee was not entitled to the costs claimed, as they were not covered by the terms of the undertaking.

The Supreme Court of Victoria dismissed the mortgagee's claim for the additional costs. The court's decision was based on a careful consideration of the context and language of the undertaking, which did not support the mortgagee's broad interpretation. The court emphasised the importance of interpreting contractual terms in their specific context and highlighted that the mortgagee's undertaking did not extend to the costs claimed. The final orders of the court were that the mortgagee's application for the additional costs was dismissed, and the mortgagee was required to bear its own costs of the application.

Orders