Coco v Westpac Banking Corporation [2010] NSWCA 305

Coco v Westpac Banking Corporation [2010] NSWCA 305

The definition of 'Fixed Income Portfolio Value' in the Asset Allocation Rules of the Agreement requires that the number of units invested in zero coupon bonds be multiplied by the market value per unit of such bonds, determined by dividing the total market value by the number of units sold to invest in them; arbitrary or literal constructions disconnected from actual value are rejected.

Parties
Appellant: Salvatore Coco; Respondent: Westpac Banking Corporation
Jurisdiction
Australia
Judgment Date
12 November 2010
Procedural Posture
Appeal / Judgment
Outcome
Appeal dismissed except as to the declaration. The earlier questions, answers, and declaration are set aside. Declaration reformulated as ordered. Appellant to pay respondent's costs.
Legal Topics
Commercial Agreement Construction, Structured Equity Investment, Asset Allocation, Interpretation of 'fixed Income Portfolio Value', Valuation of Zero Coupon Bonds
Contract Commercial Agreement Construction Structured Equity Investment Asset Allocation Interpretation of 'fixed Income Portfolio Value' Valuation of Zero Coupon Bonds

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Parties

Salvatore Coco

Appellant

Westpac Banking Corporation

Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 On the proper construction of the Asset Allocation Advisory Agreement, how is 'Fixed Income Portfolio Value' to be calculated, specifically in relation to zero coupon bonds?

Ratio Decidendi

The definition of 'Fixed Income Portfolio Value' in the Asset Allocation Rules of the Agreement requires that the number of units invested in zero coupon bonds be multiplied by the market value per unit of such bonds, determined by dividing the total market value by the number of units sold to invest in them; arbitrary or literal constructions disconnected from actual value are rejected.

Court Disposition

Appeal dismissed except as to the declaration. The earlier questions, answers, and declaration are set aside. Declaration reformulated as ordered. Appellant to pay respondent's costs.

Orders

  • Set aside the separate questions, the answers thereto and the declaration made by the Court on 14 May 2010.
  • Declare that: On the proper construction of the Westpac Guarantee Portfolio Service Asset Allocation Advisory Agreement between the appellant and the respondent, the definition of 'Fixed Income Portfolio Value' should be construed such that the number of Units invested in zero coupon bonds is multiplied by the...