Citibank Limited v Department of Public Works and Services [2001] NSWSC 1066

New South Wales Supreme Court

CITATION : Citibank Limited v Department of Public Works and Services [2001] NSWSC 1066 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 11739/01 HEARING DATE(S) : 8 November 2001 JUDGMENT DATE : 23 November 2001

PARTIES : Citibank Limited (Plaintiff) Department of Public Works and Services (Defendant) JUDGMENT OF : Newman AJ at 1

LOWER COURT Local Court JURISDICTION : LOWER COURT 12535/99 FILE NUMBER(S) : LOWER COURT Lulham LCM JUDICIAL OFFICER :

COUNSEL : P.T. Newton (Plaintiff) S.A. Kerr (Defendant) SOLICITORS : Heidtman & Co (Plaintiff) Corrs Chambers Westgarth (Defendant) CATCHWORDS : Payment by mistake - Right to recover - Claim by payer - Unjust enrichment - Restitution - Money had and received - Contractual duty - Negligence - Contributory negligence LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 Kleinwort, Sons & Co v Dunlop Rubber Co (1907) LT 263 CASES CITED : Australian & New Zealand Banking Group v Westpac Banking Corporation (1988) 164 CLR 662 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Astley v Austrust Ltd (1999) 197 CLR 1 DECISION : para 33

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

NEWMAN AJ

Friday, 23 November 2001

11739/01 - Citibank Limited v Department of Public Works & Services

JUDGMENT 1 HIS HONOUR: This is an appeal pursuant to s 69(2) of the Local Courts (Civil Claims) Act 1970 from Lulham LCM. 2 The right of appeal conferred by that section is restricted to error in point of law on the part of the local court. In the local court the plaintiff in this court was a defendant and the defendant in this court was a third party. The plaintiffs in the local court were a married couple, Mr and Mrs Lawry. They in turn had been made fourth and fifth parties respectively by the present plaintiff. 3 In the event his Worship found judgment for Mr and Mrs Lawry against the present plaintiff in the sum of $36,104.00 plus interest. He dismissed the proceedings brought by the present plaintiff against the present defendant as a third party. The present plaintiff does not seek to appeal against the judgment made in favour of Mr and Mrs Lawry. It seeks to appeal against the dismissal of the third party proceedings it brought against the present defendant. 4 The facts of the matter as found by his Worship were as follows. Mr and Mrs Lawry were customers of the plaintiff bank. On 22 February 1995 the bank approved an application by them for a mortgage power credit loan facility. Mr Lawry was a director of a building company known as Bourcon Pty Ltd ('Bourcon') and Mrs Lawry was at least an officer of that company. By agreement dated 26 September 1995 Bourcon agreed to build a school in the Campbelltown area for approximately $1.5 million. A term and condition of the contract was that Bourcon lodge a bank guarantee with the department for 5% of the contract price. 5 On 17 October 1995 the present plaintiff at the request of the Lawrys issued a banker's guarantee to the department in the amount of $72,208.55 as performance security of Bourcon on the contract it had with the department. 6 By letter dated 7 November 1996 the department advised the bank as follows:- 'The time has come for the principal under the contract to release part of the contractor's security. The principal will not require more than $36,104.55 of the amount of this unconditional undertaking and Citibank is released from so much of its undertaking as exceeds that amount.'