Westpac Banking Corporation v Clark; ex parte - [2015] QSC 353

SUPREME COURT OF QUEENSLAND

CITATION:

Westpac Banking Corporation v Clark & Ors; ex parte Gallop Reserve Pty Ltd [2015] QSC 353

PARTIES:

WESTPAC BANKING CORPORATION
ACN 33 007 457 141

(plaintiff)

v
STEPHEN ROSS CLARK

(first defendant/respondent)

MARK CRAIG KENWARD (also known as MARK CRAIG KEMPSON KENWARD)

(second defendant)

MASTER PROJECTS QLD PTY LTD
ACN 113 244 045

(third defendant)

GALLOP RESERVE PTY LTD
ACN 010 759 421

(applicant)

FILE NO/S:

BS No 13441 of 2010

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

11 December 2015

DELIVERED AT:

Brisbane

HEARING DATE:

7 December 2015

JUDGE:

Martin J

ORDER:

I grant leave to Gallop Reserve Pty Ltd to commence enforcement proceedings upon Gallop Reserve Pty Ltd discontinuing its action against Mr Clark.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the applicant seeks leave to enforce a judgment obtained by the plaintiff against the first defendant – where the applicant entered into a deed with the plaintiff and others – whether the deed assigns the plaintiff’s rights in the judgment to the applicant such that it can obtain leave to commence enforcement proceedings

Charrington & Co Ltd v Wooder [1914] AC 71
Fraser v The Irish Restaurant & Bar Company Pty Ltd [2008] QCA 270

Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429

COUNSEL:

MT de Waard for the applicant

NH Ferrett for the respondent

SOLICITORS:

Rostron Carlyle Solicitors for the applicant

Broadley Rees Hogan Lawyers for the respondent

The applicant in this matter is Gallop Reserve Pty Ltd (‘Gallop’). It seeks leave to enforce a judgment obtained by Westpac Banking Corporation (‘Westpac’) against Stephen Clark (the first defendant) in August 2011. It claims that it is able to do that pursuant to a deed of transfer between it, Westpac and some others.
Background
In December 2007 Westpac entered into an agreement whereby it lent a sum of money to Matton Developments Pty Ltd (‘Matton’). Mr Clark was a director of Matton and a guarantor of the obligations of Matton under the loan agreement.
Westpac sued Mr Clark on the guarantee and obtained default judgment, in August 2011, in the sum of $832,607.32.
On 10 April 2013 Westpac, Gallop and some other parties executed an instrument entitled “Deed of Transfer and Acknowledgement” (‘the Deed’). Gallop relies upon that deed in its application for leave to enforce the judgment.
The Deed
So far as is relevant, the Deed provides that Westpac:
“3.1.1 assigns to the Transferee all of Westpac’s full, absolute and entire legal and beneficial interest, right and title in and to the Westpac Debt, the Westpac Finance Documents and the Westpac Guarantees; and
3.1.2 transfers to the Transferee all of Westpac’s obligations and liabilities under the Westpac Finance Documents, the Westpac Guarantees or otherwise in connection with the Westpac Debt.”
The Deed defines “Westpac debt” to mean:
“… all present and future…

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: [2015] QSC 353
Decision Date: 11 December 2015

CaseChat Overview and Summary

In the matter of Westpac Banking Corporation v Clark; ex parte Gallop Reserve Pty Ltd, the applicant, Gallop Reserve Pty Ltd, sought leave to enforce a judgment obtained by Westpac Banking Corporation against the first defendant, Stephen Clark. The judgment, entered in August 2011, was in the sum of $832,607.32 and arose from a guarantee Mr Clark had provided for a loan to Matton Developments Pty Ltd. Gallop claims that it is entitled to enforce this judgment by virtue of a deed of transfer executed between it, Westpac, and others on 10 April 2013. This deed is central to the legal issues at hand.

The primary legal issue before the court was whether the deed of transfer assigned Westpac's rights in the judgment to Gallop, thereby permitting Gallop to commence enforcement proceedings against Mr Clark. The court was tasked with interpreting the terms of the deed, particularly clause 3.1.1, which assigns to the transferee all of Westpac’s legal and beneficial interest, rights, and titles in and to the Westpac debt, finance documents, and guarantees. The court had to determine whether the judgment, obtained by Westpac against Mr Clark, was encompassed within the term “Westpac debt” and thus assignable to Gallop. Additionally, the court had to consider Mr Clark's argument that the proceeding was an abuse of process and that the rights in the judgment had not been assigned to Gallop.

In its decision, the court found that the deed's language, particularly clause 3.1.1, was sufficiently broad to include the judgment in the assignment of Westpac’s rights to Gallop. The court reasoned that the nature of the transaction, the use of the phrase “in connection with”, and the declaration of intent in the deed's recitals indicated that the deed was intended to assign all rights related to the Westpac debt, including the judgment. The court also noted that while Gallop had initially pursued an action against Mr Clark based on the guarantee, it had since accepted that the cause of action had merged into the judgment obtained by Westpac. Therefore, there was no ongoing action that could be considered an abuse of process. Consequently, the court granted Gallop leave to commence enforcement proceedings, provided that Gallop discontinues its action against Mr Clark.

In conclusion, the court granted Gallop Reserve Pty Ltd leave to commence enforcement proceedings against Stephen Clark, subject to Gallop discontinuing its action against him. This decision hinged on the interpretation of the deed of transfer, which the court found to be sufficiently broad to include the judgment obtained by Westpac.

Orders

Orders of the court

I grant leave to Gallop Reserve Pty Ltd to commence enforcement proceedings upon Gallop Reserve Pty Ltd discontinuing its action against Mr Clark.

Background

Background to the litigation

The applicant in this matter is Gallop Reserve Pty Ltd (‘Gallop’). It seeks leave to enforce a judgment obtained by Westpac Banking Corporation (‘Westpac’) against Stephen Clark (the first defendant) in August 2011. It claims that it is able to do that pursuant to a deed of transfer between it, Westpac and some others.Background In December 2007 Westpac entered into an agreement whereby it lent a sum of money to Matton Developments Pty Ltd (‘Matton’). Mr Clark was a director of Matton and a guarantor of the obligations of Matton under the loan agreement. Westpac sued Mr Clark on the guarantee and obtained default judgment, in August 2011, in the sum of $832,607.32. On 10 April 2013 Westpac, Gallop and some other parties executed an instrument entitled “Deed of Transfer and Acknowledgement” (‘the Deed’). Gallop relies upon that deed in its application for leave to enforce the judgment.The Deed So far as is relevant, the Deed provides that Westpac:“3.1.1 assigns to the Transferee all of Westpac’s full, absolute and entire legal and beneficial interest, right and title in and to the Westpac Debt, the Westpac Finance Documents and the Westpac Guarantees; and3.1.2 transfers to the Transferee all of Westpac’s obligations and liabilities under the Westpac Finance Documents, the Westpac Guarantees or otherwise in connection with the Westpac Debt.” The Deed defines “Westpac debt” to mean:“… all present and future money owing by the Obligors to Westpac under or in connection with the Westpac Facility (including the outstanding principal plus all interest, fees, charges and expenses payable, costs for the preparation of this deed and a settlement costs);” “Westpac Facility” is defined to mean the Commercial Loan Agreement entered into between Westpac, Matton and others in December 2007. The “Westpac Guarantees” includes the guarantee given by Mr Clark.The new proceeding In a curious turn of events, Gallop commenced proceedings against Mr Clark in May 2015. It was curious in that Gallop relied upon the Deed as its basis to recover the money, that is, the same money in respect of which Westpac had obtained the default judgment referred to above. Gallop now accepts that the cause of action which existed when Westpac sued Mr Clark had merged into the judgment. No explanation was given for the commencement of this action in the light of the judgment obtained by Westpac. In his defence to the action commenced by Gallop, Mr Clark pleaded that the plaintiff’s rights in connection with the cause of action had merged in the default judgment obtained by Westpac. Further, he pleaded that the proceeding was an abuse of process because Westpac’s rights in the default judgment had not been assigned to Gallop.The issue The only issue to be decided is whether the Deed assigns Westpac’s rights in the judgment to Gallop such that it can obtain leave to commence enforcement proceedings. That issue will be determined by construing the terms of the Deed.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

While that form of assignment can be regarded as forming part of the context to be considered, it should be seen as a “shorthand” description of the transaction rather than an attempt to accurately capture all aspects of the assignment. Conclusion The nature of the transaction, the use of the phrase “in connection with”, and the declaration of intent in the recital referred to above – notwithstanding the absence of a reference to the judgment – lead to the conclusion that clause 3.1.1 is sufficiently wide to capture the judgment and, thus, assign to Gallop the benefit of that judgment. It was argued for Mr Clark that leave should not be granted while Gallop is pursuing the action against him based on the guarantee. As is noted above, Gallop has accepted that it cannot continue that action. There is no other reason to deny Gallop leave. I grant leave to Gallop to commence enforcement proceedings upon Gallop discontinuing its action against Mr Clark.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Westpac Banking Corporation v Clark & Ors; ex parte Gallop Reserve Pty Ltd [2015] QSC 353
PARTIES:	WESTPAC BANKING CORPORATION ACN 33 007 457 141 (plaintiff) v STEPHEN ROSS CLARK (first defendant/respondent) MARK CRAIG KENWARD (also known as MARK CRAIG KEMPSON KENWARD) (second defendant) MASTER PROJECTS QLD PTY LTD ACN 113 244 045 (third defendant) GALLOP RESERVE PTY LTD ACN 010 759 421 (applicant)
FILE NO/S:	BS No 13441 of 2010
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	11 December 2015
DELIVERED AT:	Brisbane
HEARING DATE:	7 December 2015
JUDGE:	Martin J
ORDER:	I grant leave to Gallop Reserve Pty Ltd to commence enforcement proceedings upon Gallop Reserve Pty Ltd discontinuing its action against Mr Clark.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – where the applicant seeks leave to enforce a judgment obtained by the plaintiff against the first defendant – where the applicant entered into a deed with the plaintiff and others – whether the deed assigns the plaintiff’s rights in the judgment to the applicant such that it can obtain leave to commence enforcement proceedings Charrington & Co Ltd v Wooder [1914] AC 71 Fraser v The Irish Restaurant & Bar Company Pty Ltd [2008] QCA 270 Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429
COUNSEL:	MT de Waard for the applicant NH Ferrett for the respondent
SOLICITORS:	Rostron Carlyle Solicitors for the applicant Broadley Rees Hogan Lawyers for the respondent