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Prior History: Commonwealth Bank of Australia v. White, BC200108204 (Supreme Court of Victoria 2001); Commonwealth Bank of Australia v. White, BC200003407 (Supreme Court of Victoria 2000) noted at 2001 Annual Survey 212.

Note: As security for Applicant Peter White's obligation to Beneficiary in an insurance underwriting relationship, Applicant caused three LCs to be issued for UK£60,000, UK£45,000, and UK£63,000. The expiry and other drawing requirements to be included in the LC were provided to Issuer by Donna Underwriting Agencies Ltd., which was acting as Applicant's agent.

Pursuant to the terms of the LCs, Applicant notified Issuer that the LCs were to be terminated, which signified that Beneficiary had to draw on the LCs within four years of the notice of termination, which it then did and was paid.

When Applicant refused to reimburse the amount paid, Issuer sued Applicant for reimbursement and Applicant joined Beneficiary in the suit as a third party. Subsequently, Issuer applied to be severed in order to keep the suit by Applicant against Beneficiary separate. Issuer's application was refused by the Supreme Court of Victoria, Common Law Division, Warren, J.

Issuer appealed from that decision, arguing that Applicant has so substantially changed its claims against the Beneficiary since the ruling that the court should reconsider the severance request. Agreeing that the claim has been substantially amended to warrant review, Byrne, J., reviewed but dismissed Issuer's request.

The court noted that Issuer's and Applicant's claims were factually similar enough to be maintained in a single action, and that Applicant's third party claim to join Issuer was valid when made.

Finally, the court noted that the delay in trial was not entirely the fault of [Applicant], but the result of "interlocutory skirmishing between [Applicant] and [Beneficiary]" and not a large risk to the execution of a successful trial as the claim "is largely a documentary one so that the erosion by the passage of time of the memories of witnessed may not have the significance to [Issuer's] case that it might otherwise have."

[JEB/llh/ees]

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