Sam Management Services (Aust) Pty Ltd v Bank of Western Australia Ltd

Sam Management Services (Aust) Pty Ltd (the mortgagor) appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court of New South Wales. The dispute concerned a mortgage granted by the mortgagor to the Bank of Western Australia Ltd (the Bank) over several properties. The mortgage secured the totality of advances made by the Bank under various facilities, which expired at different times. The mortgagor contended that upon repayment of certain facilities, the Bank was obliged to release some of the secured properties.

The Court of Appeal was required to determine whether there was an implied term in the mortgage requiring the Bank to release some security when some facilities were repaid. It also had to consider whether the Bank's expressed unwillingness to release security was unreasonable or unfair, thereby constituting a breach of the Code of Banking Practice. The mortgagor sought a declaration of breach and an injunction.

The Court of Appeal held that there was no implied term requiring the Bank to release security in the circumstances. It reasoned that the mortgage document clearly provided that the security covered the totality of advances, and there was no basis to imply a term that would undermine this express provision. Furthermore, the Court found that the Bank's conduct did not breach the Code of Banking Practice, as its refusal to release security was consistent with the terms of the mortgage and did not amount to unreasonable or unfair conduct.

The appeal was dismissed with costs.