Westpac Banking Corporation v Heslop (No 2)

In the case of Westpac Banking Corporation v Heslop, the primary dispute involved a guarantee executed by the defendant in relation to loans provided to a company of which he held shares. The plaintiff, Westpac, sought payment from the defendant under the terms of the guarantee after the company fell into default. The defendant, in turn, filed a defence and counterclaim, alleging various breaches of codes of conduct by both Westpac and the receiver appointed by Westpac, which rendered the guarantee unenforceable. The court had to determine whether the alleged breaches by the plaintiffs were valid and, if so, whether they invalidated the guarantee.

The central legal issues before the court were whether Westpac had breached its obligations under various banking codes of practice and whether the receiver had breached her obligations under receivers' codes of professional practice. The court had to assess these allegations in light of the evidence presented and determine their impact, if any, on the enforceability of the guarantee. The court also had to consider the defendant's failure to give evidence, which could potentially affect the outcome of the case.

The court found that the defendant failed to provide any evidence of the alleged breaches by Westpac or the receiver. Despite the defendant's initial intention to testify, he ultimately chose not to do so, which the court inferred meant that his evidence would not have helped his case. Consequently, the court rejected the defence based on alleged breaches of the codes of conduct. Additionally, the court dismissed the defendant's counterclaim against the plaintiffs. The court held that the defendant's obligation under the guarantee was to ensure the company met its obligations to Westpac, and this obligation remained unaffected by any alleged breaches by the plaintiffs.

The court ordered that the defendant pay Westpac the sum of $329,034.48, along with the costs of the claim on the standard basis. The counterclaim against the plaintiffs was dismissed, and the defendant was ordered to pay the plaintiffs' costs of the counterclaim on the standard basis. The court did not find any basis for awarding costs on an indemnity basis, as the contractual agreements between the parties did not provide for such an award.