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Newey v Westpac Banking Corporation

Newey v Westpac Banking Corporation

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Case Copied 11 September 2014 80 min read

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Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Newey v Westpac Banking Corporation [2014] NSWCA 319
Hearing dates: 21 May 2014
Decision date: 11 September 2014
Before: Basten JA at [1];
Meagher JA at [23];
Gleeson JA at [33]
Decision:
(1) To the extent necessary, grant leave to appeal and grant leave to cross-appeal.
(2) Appeal allowed.
(3) Cross-appeal dismissed.
(4) Set aside the declarations and orders made by the primary judge on 5 July 2013.
(5) In lieu thereof, order that the proceedings be dismissed and the plaintiff pay the defendants' costs.
(6) Respondent to pay the appellants' costs in this Court.
[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.]

Catchwords: CONTRACT - Interpretation - Restraint Clause - Identification of ambiguity not a precondition to examining legitimate surrounding circumstances - Scope of surrounding circumstances to be understood by reference to what the parties knew in the context of their mutual dealings - Whether surrounding circumstances revealed absurdity or inconsistency in a literal construction of the deed
EQUITY - Remedies and Procedure - Mistake - Rectification - Mistake as to effect - Whether there is clear and convincing proof of a common intention between the parties - Requirement that the common intention be consensual and expressly manifested by words or conduct
Legislation Cited: Corporations Act 2001 (Cth) ss 50, 413(1)(d)
Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth), ss 18, 22(1)(c)
Supreme Court Act 1970 (NSW) s 101(2)(r)
Uniform Civil Procedure Rules 2005 (NSW) r 51.22
Cases Cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Australasian Performing Right Association Ltd v Austarama Television Pty Ltd [1972] 2 NSWLR 467
BHP Petroleum (Australia) Pty Ltd v Sagasco South East Inc [2001] WASCA 159
Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1
Bishopgate Insurance Australia Ltd v Commonwealth Engineering (NSW) [1981] 1 NSWLR 429
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101; [2009] 4 All ER 677
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337
Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329
Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444
Davis v Veigel [2011] NSWCA 170
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471
Fitzgerald v Masters [1956] HCA 53; 95 CLR 420
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603
Fox v Percy [2003] HCA 22;

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: [2014] NSWCA 319
Decision Date: 11 September 2014

CaseChat Overview and Summary

In *Newey v Westpac Banking Corporation*, the New South Wales Court of Appeal considered an appeal and cross-appeal concerning the interpretation of a deed and the availability of rectification. The dispute arose from the parties' differing understandings of the effect of a restraint clause within the deed.

The Court was required to determine whether a literal construction of the restraint clause led to an absurdity or inconsistency, thereby justifying an examination of surrounding circumstances to ascertain the parties' true intentions. Furthermore, the Court had to consider whether there was clear and convincing proof of a common intention between the parties, which was consensually and expressly manifested by their words or conduct, to warrant rectification of the deed.

The Court held that the identification of ambiguity in a contractual provision is not a prerequisite to examining legitimate surrounding circumstances. The scope of such circumstances should be understood by reference to what the parties knew in the context of their mutual dealings. Applying this principle, the Court found that the surrounding circumstances did reveal an absurdity or inconsistency in a literal construction of the deed. Consequently, the appeal was allowed, the cross-appeal was dismissed, and the declarations and orders made by the primary judge were set aside. The proceedings were dismissed, with the plaintiff ordered to pay the defendants' costs at first instance and the respondent ordered to pay the appellants' costs in the Court of Appeal.

Orders

Orders of the court

(1) To the extent necessary, grant leave to appeal and grant leave to cross-appeal.

(2) Appeal allowed.

(3) Cross-appeal dismissed.

(4) Set aside the declarations and orders made by the primary judge on 5 July 2013.

(5) In lieu thereof, order that the proceedings be dismissed and the plaintiff pay the defendants' costs.

(6) Respondent to pay the appellants' costs in this Court.

[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.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Newey v Westpac Banking Corporation [2014] NSWCA 319
Hearing dates:	21 May 2014
Decision date:	11 September 2014
Before:	Basten JA at [1]; Meagher JA at [23]; Gleeson JA at [33]
Decision:	(1) To the extent necessary, grant leave to appeal and grant leave to cross-appeal. (2) Appeal allowed. (3) Cross-appeal dismissed. (4) Set aside the declarations and orders made by the primary judge on 5 July 2013. (5) In lieu thereof, order that the proceedings be dismissed and the plaintiff pay the defendants' costs. (6) Respondent to pay the appellants' costs in this Court. [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.]
Catchwords:	CONTRACT - Interpretation - Restraint Clause - Identification of ambiguity not a precondition to examining legitimate surrounding circumstances - Scope of surrounding circumstances to be understood by reference to what the parties knew in the context of their mutual dealings - Whether surrounding circumstances revealed absurdity or inconsistency in a literal construction of the deed EQUITY - Remedies and Procedure - Mistake - Rectification - Mistake as to effect - Whether there is clear and convincing proof of a common intention between the parties - Requirement that the common intention be consensual and expressly manifested by words or conduct
Legislation Cited:	Corporations Act 2001 (Cth) ss 50, 413(1)(d) Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth), ss 18, 22(1)(c) Supreme Court Act 1970 (NSW) s 101(2)(r) Uniform Civil Procedure Rules 2005 (NSW) r 51.22
Cases Cited:	Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Australasian Performing Right Association Ltd v Austarama Television Pty Ltd [1972] 2 NSWLR 467 BHP Petroleum (Australia) Pty Ltd v Sagasco South East Inc [2001] WASCA 159 Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1 Bishopgate Insurance Australia Ltd v Commonwealth Engineering (NSW) [1981] 1 NSWLR 429 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101; [2009] 4 All ER 677 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444 Davis v Veigel [2011] NSWCA 170 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471 Fitzgerald v Masters [1956] HCA 53; 95 CLR 420 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 Fox v Percy [2003] HCA 22;