AIRBERG PTY LIMITED v NATIONAL MUTUAL ROYAL BANK LIMITED [1996] NSWCA 9

AIRBERG PTY LIMITED vy NATIONAL MUTUAL ROYAL BANK LIMITED

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

PRIESTLEY JA, HANDLEY JA and POWELL JA 6 February 1996

[1996] NSWCA 9

CONTRACTUAL ARRANGEMENTS BETWEEN BANK AND CLIENT — BILL ACCEPTANCE FACILITY — EARLY TERMINATION OF FIXED FACILITY — WHETHER PREPAYMENT/TERMINATION FEE PAYABLE.

Appellant entered into bill facility with bank in response to bank's letter which had enclosed contractual forms - forms completed by appellant - bill facilities made available to appellant for a period of two years - appellant claimed arrangement with the bank would cease within the period on payment of discharge figure of $385,000 - bank took the view that a sum of money in addition to $385,000 was payable - dispute whether part of one of the forms, Schedule of Loan Charges, headed "Prepayment/Termination Fee" was part of contractual arrangements between parties and operative parts of printed conditions 10 and 7 in another form had to be read as being eliminated. Held: The parts of the forms said to be inconsistent could be reconciled - impossible to conclude prepayment/termination fee connoted a contractual right to terminate and override the printed conditions 10 and 7 in the "Application for Bill Facility" - "termination fee" treated literally as dealing with the situation where the contract came to an end by agreement and not breach - appellant had no express right or option of early termination of fixed term facility - no question of such a fee could arise.

Priestley JA. The case that has come up from Brownie J is one which is, in essence, within an extremely narrow compass. We have taken longer to conclude the argument and reach our conclusion than I myself anticipated partly because Mr Weber has argued what, in the end in my mind, is an unpromising appeal from his point of view, with some noticeable skill and persistence. The point which the court has to decide arises from some documents which came into existence before the respondent bank — which I will simply refer to as 'the bank' — made available bill facilities — to use the jargon of banking — to the appellant.