Ottoway Engineering Pty Ltd v Westpac Banking Corporation

FEDERAL COURT OF AUSTRALIA

Ottoway Engineering Pty Ltd v Westpac Banking Corporation [2016] FCA 635

File number:

SAD 90 of 2016

Judge:

BESANKO J

Date of judgment:

2 June 2016

Catchwords:

PRACTICE AND PROCEDURE – application for an interlocutory injunction to restrain the respondent from having recourse to a bank guarantee – whether bank guarantee should be construed as a performance bond by way of bank guarantee or as an ordinary commercial guarantee – construction of the bank guarantee – whether there is a serious question to be tried – whether balance of convenience favours granting injunction

Legislation:

Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010) (Cth) ss 18, 20

Corporations Act 2001 (Cth)

Cases cited:

Australian Broadcasting Commission v O’Neill (2006) 227 CLR 57

Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Others (2014) 251 CLR 640; [2014] HCA 7

Fabtech Australia Pty Ltd v Laing O’Rourke Australia Construction Pty Ltd [2015] FCA 1371

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd and Another [2015] HCA 37; (2015) 325 ALR 188

Samsung Electronics Company Ltd v Apple Inc and Another (2011) 217 FCR 238

Wood Hall Limited v The Pipeline Authority and Another (1979) 141 CLR 443

Date of hearing:

26 April 2016

Registry:

South Australia

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Category:

Catchwords

Number of paragraphs:

46

Counsel for the Applicant:

Mr R Whitington QC with Mr N Floreani

Solicitor for the Applicant:

Fenwick Elliott Grace

Counsel for the Respondent:

Mr M Hoffman QC

Solicitor for the Respondent:

HWL Ebsworth Lawyers

ORDERS

SAD 90 of 2016

BETWEEN:

OTTOWAY ENGINEERING PTY LTD (ACN 125 531 428)

Applicant

AND:

WESTPAC BANKING CORPORATION (ABN 33 007 457 141)

Respondent

JUDGE:	BESANKO J
DATE OF ORDER:	2 JUNE 2016

THE COURT ORDERS THAT:

1.Subject to the usual undertaking as to damages, the injunction made on 30 March 2016 (paragraph 1) be extended until trial or until further order.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BESANKO J:

Introduction

1. This is an application by Ottoway Engineering Pty Ltd (“Ottoway”) for an interlocutory injunction restraining the Westpac Banking Corporation (“Westpac”) until trial from taking any further steps to demand or obtain payment in respect of a bank guarantee given to Westpac by Ottoway’s banker, the National Australia Bank Limited (“National Bank”).  On 12 June 2015, the National Bank executed a bank guarantee in which Westpac was named as the beneficiary and Ottoway was named as the customer (“the Guarantee”).  The amount of the Guarantee is one million dollars.  On 29 March 2016, Mr Terry Lovelock, who is a senior account manager employed by Westpac, made a demand under the Guarantee on behalf of Westpac on the National Bank for the payment of $858,158.96 as at 29 March 2016 plus interest of $105.08 per day thereafter.  On 30 March 2016,…