RURAL BANK (A DIVISION OF BENDIGO AND ADELAIDE BANK LTD) -v- McCAGH [2022] WASC 339 | Case summary

Supreme Court of WA|2022-10-13|Before: Tottle J

For the reasons given above the plaintiff is entitled to judgment in respect of the amounts set out in the certificates signed by Mr Patton and is entitled to possession of the mortgaged land.
The following orders will be made:

Judgment be entered against the defendants in the amount of $10,210,959.83, together with interest calculated as follows:

(a) on the sum of $8,268,150.82 at the rate of the plaintiff's seasonal account secured basic rate less a margin of 4.5% per annum from 1 April 2021 until the date of payment;
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> (b) on the sum of $225,325.79 at the rate of the plaintiff's basic standard variable rate less a margin of 5.5% per annum from and including 9 February 2022; > > (c) on the sum of $420,608.14 at the rate of the plaintiff's basic standard variable rate less a margin of 5.5% per annum from and including 9 February 2022; > > (d) on the sum of $901,303.15 at the rate of the plaintiff's basic standard variable rate less a margin of 5.5% per annum from and including 9 February 2022; and > > (e) on the sum of $395,571.94 at the rate of the plaintiff's basic standard variable rate less a margin of 5.5% per annum from and including 9 February 2022.

An order that by 13 January 2023 the defendants give vacant possession of the Mortgage 1 Land being:

(a) Lot 1757 on Deposited Plan 246785, being the whole of Volume 1856 Folio 684;
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> (b) Lot 1391 on Deposited Plan 231869, being the whole of Volume 1856 Folio 683;
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> (c) Lot 1756 on Deposited Plan 247785, being the whole of Volume 1856 Folio 682;
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> (d) Lot 1015 on Deposited Plan 232622, being the whole of Volume 1856 Folio 681;
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> (e) Lot 934 on Deposited Plan 247687, being the whole of Volume 1856 Folio 680;
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> (f) Lot 1009 on Deposited Plan 231869, being the whole of Volume 1856 Folio 679;
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> (g) Lot 955 on Deposited Plan 246936, being the whole of Volume 1863 Folio 494;
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> (h) Lot 1859 on Deposited Plan 248681, being the whole of Volume 1003 Folio 646;
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> (i) Lot 1858 on Deposited Plan 248674, being the whole of Volume 1003 Folio 645;
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> (j) Lot 2133 on Deposited Plan 250913, being the whole of Volume 1206 Folio 284; and
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> (k) Lot 1804 on Deposited Plan 246934, being the whole of Volume 1206 Folio 283.

An order that by 13 January 2023 the first defendant give vacant possession of the Mortgage 2 Land, Mortgage 3 Land and Mortgage 4 Land being:

(a) Lots M464 and M465 on Plan 2946, being the whole of Volume 90 Folio 163A;
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> (b) Lot 6476 on Deposited Plan 254718, being the whole of Volume 1242 Folio 472;
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> (c) Lot 1746 on Deposited Plan 246933, being the whole of Volume 1702 Folio 36;
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> (d) Lot 1944 on Deposited Plan 231869, being part of Volume 1071 Folio 175;
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> (e) Lot 2326 on Deposited Plan 247784, being part of Volume 1071 Folio 175; and
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> (f) Lot 6858 on Deposited Plan 248669, being part of Volume 1071 Folio 175.

An order that the defendants pay the plaintiff's costs on a full indemnity basis to the extent those costs are not otherwise included in paragraph 1.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

The date 1 April 2021 in paragraph 212(1)(a) should read 9 February 2022.

[1] Exhibit 1.50, certificate of transfer dated 3 May 2019 issued under the Financial Sector (Transfer and Restructure Act 1999 (Cth).

[2] Defence and Counterclaim filed 15 November 2012 [5]; Amended Defence, Set-Off and Counterclaim filed 18 August 2014 [5]; Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [5].

[4] Orders of Registrar Whitbread dated 23 February 2017.

[5] Plaintiff's Outline of Submissions filed 12 September 2022.

[6] Affidavit of John Andrew Robertson sworn 2 April 2015, Attachment 'JR1', 3 - 4.

[7] Plaintiff's Outline of Submissions filed 12 September 2022, 9.

[8] Orders of Registrar Whitbread dated 7 May 2015.

[9] Eshelby v Federated European Bank Ltd [1932] 1 KB 254, 259, 262 (Swift J); Wigan v Edwards (1973) 47 ALJR 586, 596 (Mason J); Water Authority of Western Australia v AIL Holdings Pty Ltd [No 2] (1992) 10 WAR 233, 234 - 235 (Acting Master Hawkins).

[11] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [5].

[12] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [63].

[13] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [66] - [67.3].

[14] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [69] - [74].

[17] Orders of Registrar McDonald dated 27 August 2020.

[21] ts 18 August 2021, 134 - 136, 143 - 144.

[22] Affidavit of David McCagh sworn 3 August 2021.

[33] Exhibit 1.21, cl 1.1. The words 'terms and conditions' are omitted and the words 'accessing your account' are included in the definition in the Facility Terms contained in Exhibit 1.22, cl 1.1.

[34] Exhibit 1.21. Plaintiff's Substituted Statement of Claim filed 22 April 2021 [8(d)]; admitted by the Defendants in the Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [36].

[35] Exhibit 1.21. Plaintiff's Substituted Statement of Claim filed 22 April 2021 [8(e)]; admitted by the Defendants in the Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [36].

[40] Exhibit 1.25. Plaintiff's Substituted Statement of Claim filed 22 April 2021 [56], [60]; admitted by the Defendants in the Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [37], [39].

[41] Exhibit 1.26, cl 11.1 and cl 12.3.

[45] Exhibit 1.13. Plaintiff's Substituted Statement of Claim filed 22 April 2021 [46]; admitted by the Defendants in the Defendants' Re-Amended Defence, Set-Off and Counterclaim dated 3 July 2015 [28].

[54] When setting the facility limit of each facility, RBL specified the limit by reference to a specific dollar amount and added the phrase 'or such other amount as might be approved in writing by [RBL]'. To avoid unnecessary repetition this phrase will be omitted when making further references to the facility limits specified in letters of offer in respect of any of the facilities.

[67] Exhibit 1.18, cl 2, cl 5 and cl 6.

[71] Plaintiff's Substituted Statement of Claim filed 22 April 2021 [9].

[72] Plaintiff's Substituted Statement of Claim filed 22 April 2021 [10].

[73] Plaintiff's Outline of Submissions filed 12 September 2022 [12] - [13].

[74] Plaintiff's Outline of Submissions filed 12 September 2022 [12].

[75] Plaintiff's Outline for Trial filed 23 December 2021 [36] - [40].

[76] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015.

[77] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [29.1(f)].

[78] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [29.1(g)], [29.2(a)].

[79] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [29.1(h)], [29.2(b)] - [29.2(c)].

[80] Defendants' Re-Amended Defence, Set-Off and Counterclaim filed 3 July 2015 [29.1(i)], [29.2(d)].

[81] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012).

[82] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.09].

[83] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.10] and the cases cited therein.

[84] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.11] - 'id certum est quod certum reddi potest'.

[85] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.12] and the cases cited therein.

[86] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.13] and the cases cited therein.

[87] Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) [8.14] and the cases cited therein.

[88] Hempel v Robinson [1924] SAStRp 45; [1924] SASR 288, 292 (Murray CJ & Napier J).

[89] Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444.

[90] Sudbrook Trading Estate Ltd v Eggleton (484) (Lord Fraser of Tullybelton).

[91] Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130.

[92] Biotechnology Australia Pty Ltd v Pace (135 - 136) (Kirby P).

[93] Biotechnology Australia Pty Ltd v Pace (135 - 136) (Kirby P).

[94] Kabwand Pty Ltd v National Australia Bank Ltd [1989] FCA 131; (1989) ATPR 40-950.

[95] Kabwand Pty Ltd v National Australia Bank Ltd (50,379) (Lockhart, Hartigan & Hill JJ).

[96] Kabwand Pty Ltd v National Australia Bank Ltd (50,380) (Lockhart, Hartigan & Hill JJ).

[97] Kabwand Pty Ltd v National Australia Bank Ltd (50,380) (Lockhart, Hartigan & Hill JJ).

[98] Kabwand Pty Ltd v National Australia Bank Ltd (50,380) (Lockhart, Hartigan & Hill JJ).

[99] Kabwand Pty Ltd v National Australia Bank Ltd (50,381) (Lockhart, Hartigan & Hill JJ).

[100] Australia and New Zealand Banking Group Ltd v Fink [2013] NSWSC 1781.

[101] Australia and New Zealand Banking Group Ltd v Fink [23] (Adams J).

[102] Nikoloff v Perpetual Trustee Co Ltd [No 2] [2022] WASCA 16.

[103] Nikoloff v Perpetual Trustee Co Ltd [No 2] [35], [43] (Quinlan CJ, Mitchell & Vaughan JJA).

[104] Nikoloff v Perpetual Trustee Co Ltd [No 2] [32] - [35] (Quinlan CJ, Mitchell & Vaughan JJA).

[105] Financial Institutions Services Ltd v Negril Negril Holdings Ltd [2004] UKPC 40.

[106] Financial Institutions Services Ltd v Negril Negril Holdings Ltd [27] - [28].

Securities and Investments Commission Act 2001

Sector (Transfer and Restructure Act 1999

On the first issue, concerning [the enforceability of the provision for the payment of interest], their Lordships consider that the courts below were correct. They wish to emphasise, however, that they reached this conclusion on the particular (and unusual) facts of the case, and their decision certainly does not establish any general proposition that references to a bank's "usual rate of interest" or "usual terms" are insufficiently certain to amount to a contractual term (compare the observations of Lord Wright in G Scammell & Nephew Ltd v Ouston [1941] AC 251, 273). Whether such a provision fails for uncertainty must depend on the evidence placed before the court.

In this case the Bank was at the material times (between 1984 and 1987) a mere fledgling in the world of banking (indeed it was still not much more than a fledgling when it succumbed in the harsh financial conditions of the mid-1990s). It did not publish or display at its premises a rate of interest as its usual lending rate. It did not in terms inform the Companies (or, so far as the evidence went, any others of its customers) of the interest rates which it was charging (although a financially competent customer would have been able to obtain, from his bank statements, information enabling him to make a rough calculation). Mr Garcia (who followed the Solicitor-General on this point, and did so with considerable ability) explained that in practice the rate of interest charged to a customer depended on a number of factors (including the cost of funds, the personality of the customer, the security offered, and the size of the transaction). That was a realistic submission but it completely undermined the notion that the Bank had a single usual rate. The Bank was finally driven to the position that its "usual rate" was whatever rate it chose to charge from time to time, which cannot be the right answer.

RURAL BANK (A DIVISION OF BENDIGO AND ADELAIDE BANK LTD) -v- McCAGH [2022] WASC 339 (13 October 2022)

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