Commonwealth Bank of Australia v Golby, Terrence & Anor [1998] FCA 229

Commonwealth Bank of Australia v Golby, Terrence & Anor [1998] FCA 229

The clearance paragraph, read in the context of the letter of approval and the objective circumstances known to the Bank, imposed obligations on all parties and required the Bank not to grant partial discharges of its mortgage over Abington Park where that would permit Mr Barry to receive proceeds of initial lot sales otherwise than in reduction of the joint advance. The Bank's contrary construction was not supported by the peremptory language of the paragraph, and the obligation continued while any part of the advance remained unpaid despite the twelve month repayment provision.

Jurisdiction
Australia
Judgment Date
18 March 1998
Procedural Posture
Contract Appeal Concerning Banker and Customer Obligations Under a Letter of Approval for a Bills Discount Facility / On Appeal From a Judge of the Federal Court of Australia
Outcome
Appeal dismissed with costs.
Legal Topics
['construction of Contract' 'banker and Customer' 'bills Discount Facility' 'mortgage Security' 'application of Proceeds of Sale']
['contract Law' 'banking and Finance'] ['construction of Contract' 'banker and Customer' 'bills Discount Facility' 'mortgage Security' 'application of Proceeds of Sale']

Case Brief

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Procedural Posture

Contract Appeal Concerning Banker and Customer Obligations Under a Letter of Approval for a Bills Discount Facility / On Appeal From a Judge of the Federal Court of Australia

Legal Issues

  1. 1 ["Whether the clearance paragraph in the Bank's letter of approval imposed an obligation on the Bank to ensure that funds received from initial sales of subdivided lots were applied to reduce the advance to the three borrowers." "Whether the Bank breached its contractual obligations by granting partial discharges and crediting the nett proceeds of sale of three lots to Mr Barry's personal account without the consent of the Golbys."]

Ratio Decidendi

The clearance paragraph, read in the context of the letter of approval and the objective circumstances known to the Bank, imposed obligations on all parties and required the Bank not to grant partial discharges of its mortgage over Abington Park where that would permit Mr Barry to receive proceeds of initial lot sales otherwise than in reduction of the joint advance. The Bank's contrary construction was not supported by the peremptory language of the paragraph, and the obligation continued while any part of the advance remained unpaid despite the twelve month repayment provision.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['The appeal be dismissed.' "The appellant pay the respondents' costs of the appeal."]