"A LIMITED DISTRIBUTION IN_THE FEDERAL COMRT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY - ewe GENERAL DIVISION BETWEEN : RAYMOND WILLIAM BRUNKER Applicant AND: WESTPAC BANKING CORPORATION Respondent MINUTE OF ORDER IIDGE : FOX d. DATE OF _ ORDER: 11 SEPTEMBER 1984 WHERE MADE: SYDNEY. THE COURT ORDERS THAT: 1. The application be dismissed. ad The applicant pay the respondent's casts of application. al The applicant pav the respondent within 71 davs Amount of S$6n,171.48. 4, The exhibits be returned. Wote: Settlement and entrv of orders is dealt with in gr 3A of the Federal Court Rules. No.G36 of 1986 the LIMITED DISTRIBUTION I. THE FEDERAL COURT OF AUSTRALIA 3 NEW S0NTH WALES DISTRICT REGISTRY No. Gi6 of LOA } \ GENERAL DIVISTON \ BETWEEN : RAYMOND WILLTAM BRINKER Applicant AND: WESTPAC BANKING CORPORATION Respondent CORAM: FOX J. DATE: 11 SEPTEMBER 1984 REASONS FOR JUDGMENT (EX TEMPORE} FOX oT. In this ease Fhe applicant proceeds for alleaed misleading and deceptive conduct in reliance upon s.F2 of the Trade Practices Acr 1974. He saves rhar when siqonina «4 form of MuArantee «to the respondent hank he was rold Pr ocne cf ifs efficers that the anarantes was anlvy To cewer rhe coer of oat arbitration then takina place between the company of which he was a director and another party. The costs of the arbitration were likely to be high and there was apparently a considerable amount in issue. In fact. the form of quarantee as 1t appears in the document relates to the whole indebtedness of the company and makes no separate mention of the costs of the arbitration. The company had done business with the bank for some time, and had from time to time run into overdraft. The bank held security, but on the liquidation of the company after the quarantee was sianed it proved inadequate, leading to the bank taking action in the District Court under the quarantee against the present applicant. Those proceedings have been stood over and the parties have asked that if I find aqainst the applicant I should make an order for payment of an amount (being in fact larger than that sought in the District Court), so that further recourse to that Court will be unnecessary. The case for the applicant is that he went to the bank on 12 June 1981 to sian a form of quarantee. He asked for the Manager but was told he was out, and he saw another bank officer whom he 15 tunable to identifv by name, but of whom he had given a very aeneral description. He says that the officer said words Tt the effect that the applicant had come to sian a aquarante= rT¢ cover the costs of the arbitration and that he then sianed. He says that his sianature was not then witnessed but he did notice that the document had already been siaqned bv a co-director. This co-director was not called but I understand it to be aareed that I should draw no inference from that fact. Nevertheless, the fact that there was no evidence from him does not assist in the resolution of the case. The case for the respondent as well as refuting that of the applicant is that the document was sianed by both directors, probably at separate times, but in the presence of the manager, who witnessed the siaqnatures. Nothing was said about the quarantee being limited in operation. The manager explains that it was common practice, where loans were or might miaht be made to proprietary companies to obtain quarantees from the directors, as well as securitv over property, and he took the view that in the case of the applicant's company it was time that this was done. Some comment has been made as to why the manager should select this particular time to require the aquarantee,. but I think that that consideration does not reallv help in one direction or the other. A feature of the case is that the arquments are not necessarilv in conflict. The quarantee could be aiven effect although the occasion for entering into it was the arbitration hearina. The arbitration had in fact continued for some time; the costs were high and there was the risk of losing it. The applicant says that it was not simply the occasion. but was the purpose and being the purpose it should be understood that the conduct of the bank officer was deceptive. or misleading. I recoanise, of course, that misleading conduct can be unintentional. The applicant's evidence on the subject is weak, at least as he gave it oraily, and on cross-examination upon his affidavit. It seems to me unlikely that an experienced business man, as he was, would put his name to a quarantee which obviously did not contain the limitation upon which he relies, upon the fairly casual words of a bank officer, apparently junior to the manager and not primarily concerned with the transaction. Tt is not said bv the applicant that he was taken through the guarantee or that = anvone said to him words substantially to the effect that the aquarantee, although in qeneral terms, was to be regarded as limited. The bank officer, as I said. cannot now be identified. It seems to me quite possible that at some stage when the quarantee was being prepared Or aq@iven that some reference was made to the costs of the arbitration and the applicant mav have believed that it was the need to ensure that the costs would be met which made the guarantee necessarv. As I have alreadv said, this is a different matter. The conduct must have related to the ambit of the wy TuRrantee,. The document is not itself challenaed., apart, that 15s, from the claim under s.52 of the Act. The bank manader has civen ~Idence that 1t was sianed in his presence; 1t certainly bears his slanatures, and he was certainly the person in the bank responsible for having the aquarantee executed. Tt us not suaqgested that he proposed or authorised the limitation in question. Some criticism has been made of the evidence of the bank manager, particularly the fact that in his first affidavit he did not refer precisely to the fact that he had witnessed the siagnatures or deny that at the time of execution no statement such as that now relied upon was made. This I think is a sianificant matter and I must say that I was not entirelv satisfied with the evidence of the bank manager, or at least the wav he aave it. However, apart from other matters there is in ewidence part of the bank diary for the relevant dates and the diarv entrv for the 19th savs, and I quote: "pon execution Dv quarantors uJ,A.Hanna and K.W.Brunker) on 12.6.81, I fullv explained 'neu liabilitv which thev appeared to understand." As has been said, this is seemingly a self serving statement but it 2¢ hard to find in anv self serving character or anv other aspect of this statement, anvthing which assists the particular case now made by the applicant. The quarantee document stands unqualified and in mv view it would require some fairlv precise or cogent evidence before ene would accept that 1t was meant to be limited in the wav mentioned. In my opinion therefore the application fails and shouid be dismissed with costs. Now, this other matter of the District Court i1udgment or the amount of the iudgment. What 1s the amount of that now? You showed me a document. did vou, with the current amount in it? MR OAKES: It is annexed to the affidavit of Mr Ramsay of 11 September. HIS HONOUR: Yes, that is $66,171.68, 1s it? MR OAKES: Yes. HIS HONOUR: Well. I understand this to be correct: In accordance with the wishes of the parties. I will order the applicant to pav the respondent within 21 davs the amount of $66,171.68 by way of damages. LT suppose thev are really liquidated damaqdes. IT do not know whether s.82 extends to iiquidated damages but the order 15 a commmon law ane which devends an rne suppiemental Jurisidictzon of the Court, TE that 15 wnat von want me to do Twill do it. Ali yidhh. Te rhere anvthina 2lse? MR OAKES: No, vour Honour. HIS HONOUR: Will vou adjourn the Court please? MR OAKES: Excuse me, vour Honour, could we have the return of exhibits please? HIS HONOUR: Is there anv obiection? MR LIDDEN: No, your Honour. HIS HONOUR: Yes, the exhibits may be returned. as i a c poaasous ot vuay. Ce be. gal Gs. DLS 1.CEOud Leo. Justice For