Cambridge Credit Corporation Ltd v Lombard Australia Ltd [1977] HCA 29

High Court of Australia Barwick C.J. Mason and Jacobs JJ. Cambridge Credit Corporation Ltd v Lombard Australia Ltd [1977] HCA 29

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The Court delivered the following written judgment:—

June 22 Barwick C.J., Mason and Jacobs JJ.

This is an appeal by Cambridge Credit Corporation Ltd. ("Cambridge") and Permanent Nominees Ltd. ("Permanent") against the dismissal by the Supreme Court of Queensland (Lucas J.) of an action which they brought against the respondent, Lombard Australia Ltd. ("Lombard"), and against a judgment for $1,405,029.30 recovered by Lombard on its counterclaim against Cambridge.

The principal controversy between the parties relates to the interpretation of a bill of mortgage dated 9th May 1974 ("the mortgage") executed by Cambridge in favour of Lombard and registered in the office of the Registrar of Titles. It is common ground that the mortgage was expressed to secure on certain land known as the Kingston Park Estate the repayment of an advance of $1,198,865 by Lombard or so much thereof as should be from time to time advanced, together with interest thereon. On 30th September 1974 Cambridge made default in payment of interest and Lombard, having called up the principal and interest then due, $172,990.87, when payment was not made, went into possession on 1st November 1974, and commenced to sell the land as mortgagee. It is conceded that Lombard was entitled to take this action.

What is in dispute is whether the mortgage also secures, as Lombard asserts and as Cambridge denies, the payment of liabilities, initially contingent in character, on the part of Cambridge to Lombard arising under guarantees given by Cambridge to Lombard before the execution of the mortgage in connexion with loans made by Lombard to two other companies on the security of lands other than the Kingston Park Estate. The two companies were joint venture companies in which Cambridge had a substantial interest. They had been formed in each case by Cambridge and the other joint venturer to engage in land development. Cambridge had given the guarantees to Lombard to induce Lombard to provide finance and thereby enable the joint venture land development to proceed.