SMITH v AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD and ORS [1996] NSWCA 482

SMITH v AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, SHELLER and POWELL JJA 4 March 1996, 21 November 1996

[1996] NSWCA 482

SUBROGATION — circumstances in which party subrogated to rights of holder of debenture charge.

MORTGAGES — "all moneys" clause — banker/customer mortgage — proper approach to construction — held: clause to be construed according to its language which in this case was — deliberately both very wide and also very particular, and not attacked as unfair.

BANKING and BANKERS — security instruments — mortgage — "all moneys" clause — proper approach to construction — held: according to terms.

WORDS and PHRASES — "all moneys". SUBROGATION — whether appellant came within doctrine.

MORTGAGES — "all moneys" clause — width of language of — proper approach to construction of — whether such clauses should be "read down" —

Held: (1) whether the appellant was subrogated to the debtor's Bank depended in part on construction of "all moneys" clause; (2) the approach to construction of such a clause is to give effect to its meaning as with any other legal instrument, according to its terms, understood in the context; (3) the words of the particular "all moneys" clause in question were very wide, very particular, deliberately so, were not claimed to be unfair and should be given the ordinary meaning which their wide language bore; (4) subrogation was applicable; (5) appeal allowed.

ORDERS

1. Appeal upheld.

2. The orders made by Young J in the Equity Division of the Supreme Court on 16 June 1995 be set aside.

3. Declare that

(i) Australia and New Zealand Banking Group Ltd (ACN 005 357 522) ("ANZ") was at relevant times a secured creditor of Yusen Daley Smith International Pty Ltd (In Liquidation) ("the company") under Registered Charge No 43368 over the undertaking and assets of the company for the whole of the amount of $1,325,000.00 paid out by ANZ on 6 October 1994 to Bank of Tokyo Australia Ltd for and on behalf of the company and all moneys, costs, charges, expenses and interest in or incidental thereto as are secured under the charge.