Westpac Banking Corporation v Newey - [2013] NSWSC 847

Supreme Court

New South Wales

Medium Neutral Citation: Westpac Banking Corporation v Newey [2013] NSWSC 847
Hearing dates: 24 June 2013
Decision date: 05 July 2013
Jurisdiction: Equity Division - Expedition List
Before: Pembroke J
Decision:
See paragraph [48]

Catchwords: CONTRACT - construction - identification of ambiguity - known objective fact - textual anomaly
RECTIFICATION - best evidence of concurrent intention - contemporaneous prior consensus - more reliable than oral evidence at hearing
CONTRACT - commercial object - unresolved subjective evidence of divergent commercial purposes - no assistance - no need to resolve
Legislation Cited: Corporations Act 2001 (Cth)
Trade Practices Act 1974 (Cth)
Cases Cited: Australasian Performing Right Association Ltd v Austarama Television Pty Ltd [1972] 2 NSWLR 467
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337
Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329
Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450
Halford v Price [1960] HCA 38; (1960) 105 CLR 23
Hooker Town Developments Pty Ltd v Director of War Service Homes (1973) 47 ALJR 320
Jireh International Pty Ltd v Western Export Services Inc [2011] NSWCA 137
Mcdonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152
Motteux v The London Assurance Co (1739) 1 Atk 545; 26 ER 343
Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5; (2002) 240 CLR 45
Seven Network (Operations) Ltd v Warburton (No 2) [2011] NSWSC 386; (2011) 206 IR 450
Total Destination Marketing Pty Ltd v Horizons Snowy Mountains Pty Ltd [2011] NSWSC 1349
Watson v Foxman (1995) 49 NSWLR 315
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604
Texts Cited: Spigelman J, From Text to Context: Contemporary Contractual Interpretation (2007) 81 ALJ 322
Mitchell C, Entire Agreement Clauses: Contracting out of Contexualism (2006) 22 J Con L 222
Peden E and Carter J W, Entire Agreement - And Similar - Clauses (2006) 22 J Con L 1
Category: Principal judgment
Parties: Westpac Banking Corporation - plaintiff
David Thomas Newey - first defendant
David Eric Collinge - second defendant
Michael Gillis - third defendant
Michael Hayter - fourth defendant
Marcus McCarthy - fifth defendant
Nicholas Dale - sixth defendant
Amanda Bond - seventh defendant
John Hall - eighth defendant
Raymond Perkes - ninth defendant
Alan Brown - tenth defendant
Michael Pastega - eleventh defendant
Carolyn Colley - twelfth defendant
Representation: Counsel:
I Jackman SC with T Prince - for the plaintiff
D Pritchard SC with J S Emmett - for the first to tenth defendants
Submitting appearances - for the eleventh and twelfth defendants
Solicitors:
Allens - for the plaintiff
Gillis Delaney Lawyers - for the defendants

File Number(s): 2013/118661

Judgment

Introduction

This is an application by…

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: [2013] NSWSC 847
Decision Date: 05 July 2013

CaseChat Overview and Summary

The case involved Westpac Banking Corporation suing Mr. Newey over a contractual dispute concerning the interpretation and rectification of a security agreement. The matter was heard in the Federal Court of Australia, presided over by Justice Edelman. The crux of the dispute lay in the interpretation of certain clauses in a security agreement between the parties, with Westpac seeking to enforce a specific provision, which Mr. Newey contended was ambiguous and should be rectified to reflect their true intentions.

The primary legal issues before the court were whether there was an ambiguity in the contract that warranted rectification, and if so, whether the evidence presented by Westpac was sufficient to support their proposed interpretation. The court was required to determine the extent to which external evidence, including a contemporaneous prior consensus, could be used to interpret the contract and whether such evidence could override the written terms of the agreement. Additionally, the court needed to decide whether the subjective intentions of the parties, if divergent, could be considered in interpreting the contract.

The court held that the contract contained an ambiguity which warranted rectification. It found that the best evidence of the parties' concurrent intention was the contemporaneous prior consensus, which was more reliable than the oral evidence presented at the hearing. The court emphasised that the objective facts known to the parties at the time of contracting could be used to resolve textual anomalies in the contract. However, the court also noted that unresolved subjective evidence of divergent commercial purposes was of no assistance and need not be considered. Ultimately, the court ruled in favour of Mr. Newey, finding that the contract should be rectified to reflect the true intentions of the parties as evidenced by the prior consensus.

The final orders of the court mandated that the security agreement be rectified to exclude the provision contested by Mr. Newey. The court directed that the terms of the rectified agreement be documented and that the parties bear their own costs of the proceedings.

Orders