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

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

The appellant, having paid ANZ under an indemnity relating to YDSI’s liability, was subrogated to ANZ’s secured creditor rights under the 'all moneys' mortgage debenture, as the debenture’s very broad and particular language encompassed ANZ’s guarantee liability, and there was no reason (on the facts or construction) to read down those terms.

Parties
Appellant: Thomas Edwin Curtis Smith; First Respondent: Australia and New Zealand Banking Group Ltd; Second Respondent: Mr Binet (the liquidator); Third Respondent: Yusen Daley Smith International Pty Ltd (In Liquidation)
Jurisdiction
Australia
Judgment Date
21 November 1996
Procedural Posture
Appeal / Judgment (court of Appeal)
Outcome
Appeal upheld.
Legal Topics
Subrogation, Construction of 'all Moneys' Mortgage Clauses, Bank Securities, Secured Creditor Status in Liquidation
Equity Banking and Finance Insolvency Mortgages Subrogation Construction of 'all Moneys' Mortgage Clauses Bank Securities Secured Creditor Status in Liquidation

Case Brief

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Parties

Thomas Edwin Curtis Smith

Appellant

Australia and New Zealand Banking Group Ltd

First Respondent

Mr Binet (the liquidator)

Second Respondent

Yusen Daley Smith International Pty Ltd (In Liquidation)

Third Respondent

Procedural Posture

Appeal / Judgment (court of Appeal)

Legal Issues

  1. 1 Whether the appellant was subrogated to the rights of the ANZ under a mortgage debenture given by YDSI.
  2. 2 Proper construction of 'all moneys' mortgage clauses and their applicability to contingent liabilities.
  3. 3 Whether payment by the appellant on the guarantee was made on behalf of YDSI and thus entitled him to subrogation.

Ratio Decidendi

The appellant, having paid ANZ under an indemnity relating to YDSI’s liability, was subrogated to ANZ’s secured creditor rights under the 'all moneys' mortgage debenture, as the debenture’s very broad and particular language encompassed ANZ’s guarantee liability, and there was no reason (on the facts or construction) to read down those terms.

Court Disposition

Appeal upheld.

Orders

  • The appeal is upheld.
  • The orders made by Young J in the Equity Division of the Supreme Court on 16 June 1995 are set aside.