mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: United States Surgical Corp v Hospital Products International Pty Ltd (unreported, Supreme Court of New South Wales, McClelland J, 13 October 1981)
Outcome: cited
The difficulty in Hoy's submissions is that, in the present case, the issue of election is not raised by Allphones but by Hoy itself in section K of its Statement of Claim. Allphones, in paragraph 44 of its Further Amended Defence, simply denies the allegation. Similarly, the allegation of bad faith is an issue raised by Hoy and denied by Allphones. In any event, it seems to me that the allegation of fraud puts in issue the state of mind of Hoy and not that of Allphones, and consequently it cannot be unfair or inconsistent for Allphones to retain its privilege with respect to records relating to its own state of mind. As McClelland J said in United States Surgical Corp v Hospital Products International Pty Ltd at 7 (unreported, Supreme Court of New South Wales, McClelland J, 13 October 1981): '...before the privilege can be said to have been lost on this principle, one must at least be able to identify some element or feature of the claim made, or the evidence adduced, by the party otherwise entitled to the privilege , which would render reliance on the privilege unjust.' (Emphasis added.) 27 There is no unfairness, in my view, in maintaining the privilege claim by Allphones in these circumstances. It is not implicit in the denial of an allegation of bad faith that Allphones must in fairness make available otherwise privileged material relating to its state of mind simply because the other party has made the allegation. The position may be altered if Allphones were to positively assert and put in issue its state of mind by, for example, claiming that it had no reason to believe a certain matter existed or raising an issue of undue influence. But that is not this case. Such an allegation is the converse of this case, because Hoy, and not Allphones, has raised the issue.
Case: Anaconda Operations Pty Ltd v Fluor Daniel Pty Ltd [1999] VSCA 214
Outcome: referred to
I said in those reasons that it was arguably unconscionable within the meaning of s 51AA of the Trade Practices Act 1976 (Cth) ('the Act') for ONGC to threaten to call, or to call, on the performance guarantees, to take advantage of the Banks' propensity to pay, despite, arguably there being no right to call on the performance guarantees. Clough also says that, ONGC is in breach of an implied negative stipulation in the Construction Contract to the effect that it will not, except where Clough is in such breach, call on the performance guarantees or any of them. See Anaconda Operations Pty Ltd v Fluor Daniel Pty Ltd [1999] VSCA 214 at [8] .
Case: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18 ; (2003) 197 ALR 153
Outcome: referred to
Section 80(2) enables the Court, where, in its opinion, it is desirable to do so, to grant an interim injunction pending determination of an application under s 80(1): ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18 ; (2003) 197 ALR 153; ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301. This section confers a judicial discretion of the widest kind upon the Court: World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 185-187 per Bowen CJ.
Case: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2 ; (2000) 96 FCR 491
Outcome: referred to
This conclusion was reached although the contractor was, in calling up these guarantees, acting according to his strict legal entitlement: Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489. See also: ACCC v CG Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2 ; (2000) 96 FCR 491 at 498 adopted with approval in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 76 ALJR 1 Gummow and Hayne JJ.
Case: Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301
Outcome: cited
Clough continues to contend that it would be unconscionable for ONGC to exercise or purport to exercise its apparent legal rights. It points to several equitable norms falling within the "unwritten law" for the purposes of s 51AA of the Act: (a) There is equitable relief analogous to relief against forfeiture even absent waiver or estoppel, where the first party's breach has effectively contributed to the second party's breach, equity may regard it as unconscionable for the first party to exercise its legal rights arising from the second party's breach: Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406. See also Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315, [40], [58]. (b) Equity may restrain the exercise of legal right if it is sought to be used unconscionably in the sense of it being used unreasonably or arbitrarily: Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575. (c) Equity may relieve against one party's insistence upon rights in circumstances which make that harsh or oppressive. ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301. 14 Section 80(2) enables the Court, where, in its opinion, it is desirable to do so, to grant an interim injunction pending determination of an application under s 80(1): ACCC v CG Berbatis Holdings Pty Ltd [2003] HCA 18 ; (2003) 197 ALR 153; ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301. This section confers a judicial discretion of the widest kind upon the Court: World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 at 185-187 per Bowen CJ.
Case: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 76 ALJR 1
Outcome: referred to
This conclusion was reached although the contractor was, in calling up these guarantees, acting according to his strict legal entitlement: Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489. See also: ACCC v CG Berbatis Holdings Pty Ltd (No 2) [2000] FCA 2 ; (2000) 96 FCR 491 at 498 adopted with approval in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 76 ALJR 1 Gummow and Hayne JJ.
Case: Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45 ; (1978) 141 CLR 335
Outcome: cited
The Banks contend that even if ONGC has incorrectly drawn down on the performance guarantees there are remedies available between Clough and ONGC, for example, by suing the beneficiary for an account and payment of any overpayment under a performance bond: Cargill International SA v Bangladesh Sugar &amp; Food Corporation [1996] 2 Lloyd's LR 524 at 530. See also Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45 ; (1978) 141 CLR 335 at 351 and Wood Hall Ltd v Pipeline Authority [1979] HCA 21 ; (1979) 141 CLR 443 at 454. It points also to the fact that there is no suggestion that ONGC would be unable to repay any amount owing. Accordingly damages from ONGC, it is said, would be an adequate remedy.
Case: Bolivinter Oil SA v Chase Manhattan Bank NA [1984] 1 Lloyd's Rep 251
Outcome: cited
The Banks submit that the only traditional exception where a banker may be enjoined, is where the beneficiary is fraudulently attempting to draw down the letter of credit. That is because of the Court's special jurisdiction to prevent fraud, which is wider than the jurisdiction to prevent the beneficiary breaching the underlying contract with the applicant for a letter of credit: Bolivinter Oil SA v Chase Manhattan Bank NA [1984] 1 Lloyd's Rep 251 at 254, Deutsche Ruckversicherung AG v Wallbrook Insurance Co Ltd [1995] 1 WLR 1017 at 1029-1030, Ideas Plus at 496 [93]. There is no allegation of fraud here and so, the Banks submit, no injunction should be granted against them. The Banks nonetheless rightly, in my opinion, accept that another basis upon which the Banks might be enjoined is by reason of it being allegedly unconscionable, contrary to s 51AA of the Act, for ONGC to exercise its contractual rights in the underlying construction contract and draw upon the performance guarantees although any such restraint would be ancillary to Clough's claim against ONGC.
Case: Boral Formwork v Action Makers (2003) ATPR 41-953
Outcome: referred to
I remain satisfied that there is a serious issue to be tried as to whether ONGC has acted unconscionably in contravention of s 51AA of the Act in calling on or threatening to call on the performance guarantees despite there being no legal right, on its part, to do so. As Austin J said in Boral Formwork v Action Makers (2003) ATPR 41-953 at [14] when referring relevantly to s 51AA of the Act: "The principle of autonomy, applicable to a standby letter of credit, cannot override the Statute" . I am also satisfied that, upon the same factual matrix, there is a serious issue to be tried whether ONGC is in breach if the negative stipulation conditioning the right to call up the performance guarantees. 44 These findings warrant the continuation of the injunctive orders as against ONGC, and subject to consideration of the balance of convenience, ancillary injunctive orders as against the Banks. 45 In these circumstance it is not necessary for me presently to enter upon the question of the construction of the performance guarantees and in particular whether, as between the Banks and ONGC the obligation to pay under a call is conditioned by 'breach of contract' by Clough, and if so, just what is required to be done by way of notice, or proof, or otherwise, in order for that condition to be satisfied.
Case: Cargill International SA v Bangladesh Sugar &amp; Food Corporation [1996] 2 Lloyd's LR 524
Outcome: cited
The Banks contend that even if ONGC has incorrectly drawn down on the performance guarantees there are remedies available between Clough and ONGC, for example, by suing the beneficiary for an account and payment of any overpayment under a performance bond: Cargill International SA v Bangladesh Sugar &amp; Food Corporation [1996] 2 Lloyd's LR 524 at 530. See also Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45 ; (1978) 141 CLR 335 at 351 and Wood Hall Ltd v Pipeline Authority [1979] HCA 21 ; (1979) 141 CLR 443 at 454. It points also to the fact that there is no suggestion that ONGC would be unable to repay any amount owing. Accordingly damages from ONGC, it is said, would be an adequate remedy.
Case: Clough Engineering Ltd v Oil &amp; Natural Gas Corporation Ltd [2007] FCA 881
Outcome: referred to
The affidavit of Mr Malcolm Rutter sworn 15 June 2007 provides a very detailed account of the background to the Construction Contract and what has occurred since its execution. I have set out the relevant factual background as exposed in that affidavit in my reasons of 7 June 2007 when I, amongst other things, restrained ONGC from taking any further step to demand or to obtain payment or renewing or claiming to renew a demand for payment from any of the respondent Banks under the respective performance guarantees: Clough Engineering Ltd v Oil &amp; Natural Gas Corporation Ltd [2007] FCA 881 [8]-[23]. It is accordingly not necessary for me to repeat that background detail here. Mr Rutter has variously deposed in his affidavit to the effect that Clough is not in any way in default under the Construction Contract. The Banks do not, understandably, attempt to contradict this. ONGC has not appeared in this application. 7 It is fundamental to Clough's arguments that it is not relevantly in breach of the Construction Contract nor are there any other contractual bases such as to entitle ONGC to make a demand upon the Banks under the respective performance guarantees. It is contended alternatively that if it is in breach then ONGC has contributed to this in the sense that to the extent that Clough has not met any of its obligations, this has been directly caused by ONGC's failure to perform its obligations. In other words Clough's obligations are dependent upon ONGC's performance. 8 Clough says that it has, at all material times, been ready willing and able to comply with its obligations, subject to ONGC's timely performance of its inter-dependent obligations. Clough says that, otherwise, it has completed the work required of it. However, on the evidence of Mr Rutter, ONGC has been in breach of a number of its obligations, including failing to effect necessary well-completion at the deep water field, as well as meeting invoiced payments from Clough in the order of US$7 million.
Case: Deutsche Ruckversicherung AG v Wallbrook Insurance Co Ltd [1996] 1 WLR 1017
Outcome: cited
The Banks submit that the only traditional exception where a banker may be enjoined, is where the beneficiary is fraudulently attempting to draw down the letter of credit. That is because of the Court's special jurisdiction to prevent fraud, which is wider than the jurisdiction to prevent the beneficiary breaching the underlying contract with the applicant for a letter of credit: Bolivinter Oil SA v Chase Manhattan Bank NA [1984] 1 Lloyd's Rep 251 at 254, Deutsche Ruckversicherung AG v Wallbrook Insurance Co Ltd [1995] 1 WLR 1017 at 1029-1030, Ideas Plus at 496 [93]. There is no allegation of fraud here and so, the Banks submit, no injunction should be granted against them. The Banks nonetheless rightly, in my opinion, accept that another basis upon which the Banks might be enjoined is by reason of it being allegedly unconscionable, contrary to s 51AA of the Act, for ONGC to exercise its contractual rights in the underlying construction contract and draw upon the performance guarantees although any such restraint would be ancillary to Clough's claim against ONGC.
Case: Fletcher Construction Australia Limited v Varnsdorf Pty Ltd Australian Competition and Consumer Commission [1998] 3 VR 812
Outcome: referred to
In Ideas Plus Steytler P with whom McLure and Buss JJA agreed concluded that the National Australia Bank (NAB) was empowered to claim under a letter of credit granted by HSBC Bank of Australia Ltd (HSBC) so long as it had a bona fide belief that the conditions were satisfied. The certificate by the NAB issued to HSBC certifying in effect that the conditions of the letter of credit had been met was only a representation of such a bona fide belief and perhaps that there were reasonable grounds for such a belief. [55]-[57], [105] See also Fletcher Construction Australia Limited v Varnsdorf Pty Ltd [1998] 3 VR 812. Steytler P with whom McLure JA agreed held that the basis for the payment made by HSBC pursuant to its independent obligation by it to NAB under the letter of credit was the provision by NAB of a certificate in the required terms. It was, his Honour found, the presentation of that certificate, not the truth of the facts certified, which conditioned HSBC's obligation to pay.
Case: Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1985) 1 NSWLR 545
Outcome: referred to
Gibbs J, having regard to the proper construction of the performance guarantee, said that to hold that the Banks should not pay on receiving a demand, but should be bound to inquire into the rights of the Authority and the contractor under a contract to which the bank was not a party would be to depart from the ordinary meaning of the undertaking that the Bank is to pay on demand. (p 451) However, Stephen J observed that, if the construction contract itself had contained some qualification upon the Authority's power to make a demand under a performance guarantee, the position in relation to the grant of such an injunction might well have been different (p 459). Young J in Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1985) 1 NSWLR 545 at 550-551 made observations to like effect. 35 In Reed Construction Services Pty Ltd v Kheng Seng (Australia) Pty Ltd (1999) 15 BCL 158, 164 Austin J said: 'There are three principal exceptions. The first, noted in passing by Gibbs J in the Wood Hall case (at 451) and recognised as well by Young J in Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1986) 2 BCL 366, 370, is that the Court will enjoin the party in whose favour the bond has been given from acting fraudulently. The second exception, recently recognised by the Victorian Supreme Court in Olex Focas Pty Ltd v Skodaexport Co Ltd, [1997] ATPR (Digest) [46-163], is that the Court will intervene to restrain the party for whose benefit the bond was given from acting unconscionably for the purposes of s 51AA of the Trade Practices Act 1974 (Cth). There is a third exception, which is based on contract and is the most important for present purposes. A line of cases has recognised that whilst the Court will not restrain the issuer of the bond from acting on the unqualified promise to honour it, if the party in whose favour the bond has been given has made a contract promising not to call upon the bond, breach of that contractual promise may be enjoined on normal principles relating to the enforcement by injunction of negative stipulations in contracts.' [emphasis added]
Case: Hughes Bros Pty Ltd v Telede Pty Ltd (1989) 7 BCL 210
Outcome: referred to
His Honour canvassed a number of cases in which the proper construction of the language contained in the standby letter of credit, "... until the party becomes entitled to exercise a right under the contract ..." had been similarly discussed. Those authorities range from requiring no more than a claimed entitlement which is not specious or fanciful: Hughes Bros Pty Ltd v Telede Pty Ltd (1989) 7 BCL 210 to requiring that the holder of the security establish, whether by litigation or arbitration, an actual entitlement to payment of the moneys: Mitsui Kensetsu Corporation Australia Pty Ltd v State of South Australia (unreported Qld Supreme Court, 9 August 1990 per Byrne J).
Case: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248
Outcome: referred to
By s 80 of the Act the Court may grant an injunction in such terms as it determines to be appropriate, relevantly in this case, where, on the application of Clough it is satisfied that the Banks intend, unless restrained, to pay under the guarantees, and are thereby proposing to engage in conduct that constitutes or would constitute aiding or abetting ONGC to contravene s 51AA under Part IVA of the Act, or would, thereby, be directly or indirectly knowingly concerned in or party to the contravention. See ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 266 per Gummow J.
Case: Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406
Outcome: cited
Clough continues to contend that it would be unconscionable for ONGC to exercise or purport to exercise its apparent legal rights. It points to several equitable norms falling within the "unwritten law" for the purposes of s 51AA of the Act: (a) There is equitable relief analogous to relief against forfeiture even absent waiver or estoppel, where the first party's breach has effectively contributed to the second party's breach, equity may regard it as unconscionable for the first party to exercise its legal rights arising from the second party's breach: Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406. See also Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315, [40], [58]. (b) Equity may restrain the exercise of legal right if it is sought to be used unconscionably in the sense of it being used unreasonably or arbitrarily: Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575. (c) Equity may relieve against one party's insistence upon rights in circumstances which make that harsh or oppressive. ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301.
Case: Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537
Outcome: cited
However, the Court held that there were serious questions to be tried whether the parties were engaged in trade and commerce between Australia and a place outside Australia, for the purposes of s 6(2) of the Act, and whether the head-contractor had acted unconscionably, and in contravention of s 51AA of the Act, by making demand under the mobilisation guarantees, in the sense that it had insisted on strict legal rights in circumstances which made that harsh or oppressive or caused hardship. Accordingly, the sub-contractors were entitled to injunctions in respect of the mobilisation guarantees: ( Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537; Stern v McArthur [1988] HCA 51 ; (1988) 165 CLR 489 referred to). Batt J in so finding held that the effect of the Act, applying as it did to international trade and commerce, was to work a substantial inroad into the well-established common law autonomy of letters of credit and performance bonds and other bank guarantees. In that case the bank which operated in Victoria, had made a submitting appearance only.
Case: Mitsui Kensetsu Corporation Australia Pty Ltd v State of South Australia (unreported Qld Supreme Court, 9 August 1990
Outcome: referred to
His Honour canvassed a number of cases in which the proper construction of the language contained in the standby letter of credit, "... until the party becomes entitled to exercise a right under the contract ..." had been similarly discussed. Those authorities range from requiring no more than a claimed entitlement which is not specious or fanciful: Hughes Bros Pty Ltd v Telede Pty Ltd (1989) 7 BCL 210 to requiring that the holder of the security establish, whether by litigation or arbitration, an actual entitlement to payment of the moneys: Mitsui Kensetsu Corporation Australia Pty Ltd v State of South Australia (unreported Qld Supreme Court, 9 August 1990 per Byrne J).
Case: Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575
Outcome: cited
Clough continues to contend that it would be unconscionable for ONGC to exercise or purport to exercise its apparent legal rights. It points to several equitable norms falling within the "unwritten law" for the purposes of s 51AA of the Act: (a) There is equitable relief analogous to relief against forfeiture even absent waiver or estoppel, where the first party's breach has effectively contributed to the second party's breach, equity may regard it as unconscionable for the first party to exercise its legal rights arising from the second party's breach: Legione v Hateley [1983] HCA 11 ; (1983) 152 CLR 406. See also Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57 ; (2003) 217 CLR 315, [40], [58]. (b) Equity may restrain the exercise of legal right if it is sought to be used unconscionably in the sense of it being used unreasonably or arbitrarily: Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575. (c) Equity may relieve against one party's insistence upon rights in circumstances which make that harsh or oppressive. ACCC v Samton Holdings Pty Ltd [2002] FCA 62 ; (2002) 117 FCR 301.
Case: Reed Construction Services Pty Ltd v Kheng Seng (Australia) Pty Ltd (1999) 15 BCL 158
Outcome: applied
In Reed Construction Services Pty Ltd v Kheng Seng (Australia) Pty Ltd (1999) 15 BCL 158, 164 Austin J said: 'There are three principal exceptions. The first, noted in passing by Gibbs J in the Wood Hall case (at 451) and recognised as well by Young J in Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd (1986) 2 BCL 366, 370, is that the Court will enjoin the party in whose favour the bond has been given from acting fraudulently. The second exception, recently recognised by the Victorian Supreme Court in Olex Focas Pty Ltd v Skodaexport Co Ltd, [1997] ATPR (Digest) [46-163], is that the Court will intervene to restrain the party for whose benefit the bond was given from acting unconscionably for the purposes of s 51AA of the Trade Practices Act 1974 (Cth). There is a third exception, which is based on contract and is the most important for present purposes. A line of cases has recognised that whilst the Court will not restrain the issuer of the bond from acting on the unqualified promise to honour it, if the party in whose favour the bond has been given has made a contract promising not to call upon the bond, breach of that contractual promise may be enjoined on normal principles relating to the enforcement by injunction of negative stipulations in contracts.' [emphasis added]