JUDGMENT Now ue 22 snal wnt ne CATCHWORDS Consumer Protection - Trade Practices - Misleading or Deceptive Conduct - bank manager advising opal dealer in the field that a bank cheque was "as good as cash" - bank cheque was a forgery on a stolen bank cheque form - whether misleading or deceptive conduct - whether negligent misstatement --whether reliance upon the advice. Trade Practices Act 1974, ss.52, 82 Matter No. SG 54 of 1992 ATHANASIOS LYRITZIS and JANELLE RONDA LYRITZIS v WESTPAC BANKING CORPORATION VON DOUSSA J ADELAIDE RECEIVED ~7 NOV 1994 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY 4 NOVEMBER 1994 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIAN DISTRICT REGISTRY GENERAL DIVISION No. SG 54 of 1992 BETWEEN: ATHANASIOS LYRITZIS and JANELLE RONDA LYRITZIS Applicants AND: WESTPAC BANKING CORPORATION Respondent MINUTES OF ORDER JUDGE MAKING ORDER s VON DOUSSA J. WHERE MADE $ ADELAIDE DATE OF ORDER 3 4 NOVEMBER 1994 THE COURT ORDERS THAT: 1. Judgment for the applicants for $259,464.86. 2. Respondent to pay the applicants' costs to be taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIAN DISTRICT REGISTRY ) ) ) GENERAL DIVISION No. SG 54 of 1992 BETWEEN: ATHANASIOS LYRITZIS and JANELLE RONDA LYRITZIS Applicants AND: WESTPAC BANKING CORPORATION Respondent. REASONS FOR JUDGMENT Coram: von Doussa J. Place: Adelaide Date : 4 November 1994 This is a claim for $170,000 damages plus compound interest alleged to be the loss of the applicants, Mr and Mrs Lyritzis, resulting from misleading and deceptive conduct in trade or commerce, and negligent misstatement, by Robin Ernest Pearson who at material times was the manager of the Coober Pedy branch of the respondent Bank. The applicants carried on business from Coober Pedy in partnership as opal miners and opal dealers. They allege that in reliance upon oral advice given by Mr Pearson on or about Thursday 29 August 1991 Mr Lyritzis accepted four bank cheques purportedly drawn on the ANZ Bank, Dandenong Area Branch, Victoria, from an interstate buyer who was unknown to him in exchange for delivery of cut opals. The pleadings allege that shortly before completion of the transaction Mr Pearson told Mr lLyritzis that a bank cheque was "as good as cash" and acceptable to any bank as a good and valid order for payment, that he failed to advise him that there were circumstances in which a bank cheque could be dishonoured; and that in particular he failed to advise Mr Lyritzis that if a bank cheque had been fraudulently obtained and completed the bank on which it was purportedly drawn could properly refuse to honour it. One of the cheques, being for $170,000, was deposited into the applicants' current account with the respondent, but on presentation to the ANZ Bank for collection was dishonoured on the ground that the cheque was a forgery on a blank bank cheque form which had been stolen from the Dandenong Area Branch sometime before. The other three bank cheques received from the buyer for a total face value of $108,984.30 were cashed by third parties at the Hillcrest branch of the State Bank of South Australia which appears to have treated the cheques as being "as good as cash", so no claim is made in respect of them in this action, even though they were each later dishonoured by the ANZ Bank for the same reasons. Mr Pearson agrees that there was a meeting with Mr Lyritzis in Coober Pedy in the circumstances and at about the time alleged by Mr Lyritzis as the occasion when the advice was given, but he denies that he gave the advice alleged. The outcome of these proceedings turns on facts which fall into small compass: was the oral advice alleged given, or was it not? There are ancillary questions, but they are interwoven with this central question. A number of witnesses were called, and a statement from another who was too ill to attend Court was tendered to support aspects of the case of each side, but the only two people present when the advice was allegedly given were Mr Lyritzis and Mr Pearson. There were other discussions following the dishonour of the cheques either by telephone or in person between Mr and Mrs Lyritzis and Mr Pearson, and in respect of these discussions there is also a direct conflict over whether Mr Lyritzis complained that Mr Pearson had told him bank cheques were "as good as cash", that they were "guaranteed", and that they could be "cashed at any bank". The applicants assert that these things were said on 4 September 1991 when Mr Pearson telephoned Mr Lyritzis to inform him that the bank cheques could be fraudulent, and on later occasions. Mr Pearson says that complaints of this kind about his conduct were not made to him in any of their discussions, the last of which occurred in early October 1991. It would be easy to resolve the case if it were possible to simply prefer the evidence of Mr and Mrs Lyritzis to that of Mr Pearson or vice versa on demeanour and presentation in the witness box. However I am not prepared to decide the case on that basis as a number of general criticisms can be made of the evidence of each of these witnesses. Mr and Mrs Lyritzis gave generally coherent consistent and plausible evidence but a question must arise about their credibility from the apparent lack of consistency between their disclosures to the Commissioner of Tax and their trading activities as disclosed by their oral evidence, and from their apparent contempt of the taxation laws. Moreover, in the case of Mrs Lyritzis it was clear that at times her evidence was based rather on her recollection of statements which she and her husband made soon after the events happened than on any actual recollection. I suspect that parts of Mr Lyritzis' evidence was similarly based. Mrs Lyritzis was also inclined to speculate beyond her present knowledge and recollection. This is not to say that their evidence (and the accounts in the statements on which they relied) was erroneous, but the possibility of unreliability arises. It was not suggested by the respondent's case that significant inconsistency exists between their evidence and the statements made by them to their solicitors and to the police within a week or so of the discovery of the fraud; the respondent's case asserted that allegations consistent with their evidence made in those statements about the conduct of Mr Pearson were concocted in the short time between the happening of the events and the time when the statements were given. This was done, on the respondent's case, because Mr and Mrs Lyritzis were told shortly after the discovery of the fraud that they were unlikely to effect a recovery of their loss from the ANZ Bank, or other parties involved in the transaction. It was clear, as soon as the fraud was discovered, that the interstate buyer had disappeared with the opals. There are aspects of the evidence of Mr Pearson disclosed by his cross-examination that raise in my mind serious doubt about the reliability of his evidence. Without setting out in detail the substance of the cross-examination on these topics, it is sufficient to mention the main ones which cause this doubt: his recollection of the circumstances which caused him to remember the Johns Period Furniture case (Johns Period Furniture Pty Ltd v Commonwealth Savings Bank of Australia (1980) 24 SASR 224); the inconsistency between his account in evidence of the transaction described by Mr Lyritzis when the alleged oral advice was given and his report to his Regional Manager dated 29 August 1991 (exhibit R13); the creation of the file note dated 4 September 1991 (exhibit R14); the absence of any reference to possible action by the applicants against the respondent in the file note dated 3 October 1991 (exhibit R17); and his likely state of mind at the time about the status of bank cheques. In these circumstances it is necessary to look to the probabilities of the various events and conversations which have been the subject of evidence, and to the other evidence for guidance. Before turning to that evidence and the central events canvassed by the parties, it is convenient to summarise the broad sequence of background facts which are either admitted or not seriously disputed. Insofar as these facts are not admitted I find them to be the case, except where I have expressly noted unresolved disputes in the evidence. Coober Pedy is an outback mining town which has a number of unique features one of which is the flourishing cash economy. Almost all transactions between miners and dealers are conducted in cash. The applicants have been opal dealers for some 25 years and they almost invariably deal in cash, the exceptions being when they are dealing with trusted and well established friends. The respondent Bank is the only bank operating in the town, and it assists the dealers by making available large sums of cash when required. Mr Pearson became the manager of the Coober Pedy Branch of the Bank on about 30 October 1989 and met Mr Lyritzis on a number of occasions. The applicants conducted a current account at the Bank which had an overdraft limit of $118,000 supported by security. This account had been drawn beyond the limit from February 1991, and by the end of July 1991 the overdraft exceeded $170,000. The applicants had suffered a very large loss through a robbery in 1988 when trading stock and $97,000 cash was stolen in a safe from their home. The applicants had encountered trading difficulties since that time. A number of proposals had been made to Mr Pearson to reduce the overdraft to within limits in July 1991. On 9 July 1991 Mr Pearson reported to the Regional Manager that a further report regarding the implementation of these proposals would be made on 15 August 1991. There is no satisfactory evidence of any communication between this date and the events in question between Mr Pearson and Mr Lyritzis, even though Mr Pearson was under pressure from his Regional Manager to bring the overdraft into line. Turning to other participants in the events which happened, Ms Annie Braun at relevant times conducted a tour business known as Prospectors Opal Tours, and a shop known as Prospectors Opal Shop in Cooper Pedy. Her boyfriend with whom she was living at the time was an opal miner, Derek Hogg. Mr Hogg was a friend of Dimitrios (Jim) Theodorous who in turn had been a close friend of Mr Lyritzis for some 25 years. Mr Theodorous was from time to time employed as an opal cutter by Mr Lyritzis. Mr Lyritzis and Ms Braun were not acquaintances although each had seen the other from time to time in the township. In recent years Mrs Lyritzis has lived mainly in Adelaide to facilitate the schooling requirements of their children. Following the 1988 robbery Mr Lyritzis maintained an office in the Opal Inn in Coober Pedy where a large safe was housed for security and he spent most of his time travelling between Mintabie and Coober Pedy, with occasional visits to Adelaide. A few days before 24 August 1991 Ms Braun was telephoned at her shop by a male person who identified himself as James Kirkland. Mr Kirkland said he wished to purchase a large parcel of opal in the vicinity of $100,000 to $400,000. Ms Braun did not recognise the name, but thought she recognised the voice of the caller as a dealer who on two previous occasions some years apart had purchased large quantities of opals in Coober Pedy with her assistance. She had introduced the buyer to various miners and dealers. She told Mr Kirkland she would make enquiries. Within a few days she spoke again with him, informing him that she had arranged opal for inspection. Arrangements were made for him to arrive in Coober Pedy by aeroplane on Monday 26 August 1991. Between the two calls from Mr Kirkland, Ms Braun spoke with Mr Hogg, who in turn spoke with Mr Theodorous enquiring as to a possible source of opal sufficient to meet the needs of the buyer. Mr Theodorous spoke with Mr Lyritzis who said that he had sufficient and suitable opals. Mr Lyritzis had arrangements to attend Adelaide for an appointment with an eye specialist. On hearing of the quantity of opal sought by the buyer he cancelled those arrangements and stayed in Coober Pedy. A meeting occurred in the Opal Inn on Sunday 25 August 1991 where for some hours in Mr lLyritzis' office Ms Braun inspected boxes of cut opal as described in stock lists made available to her. Later that day she was also shown two pendants and told they were for sale for $70,000 to $80,000 each. Ms Braun informed Messrs Lyritzis, Hogg and Theodorous (who collectively she refers to as "the boys") that she had met Mr Kirkland in 1988 when she sold him some $750,000 worth of cut stones, and that he had later come back on another occasion and made further purchases. Mr Kirkland arrived as arranged at Coober Pedy airport on Monday 26 August 1991. He was met by Ms Braun. Ms Braun said in evidence that she realised immediately that he was not the buyer that she had dealt with on the previous occasions. She had not seen him before. However she did not report her mistake to the boys, and did not reveal the fact that Mr Kirkland was unknown to her until some days after the bank cheques were dishonoured. Ms Braun conveyed Mr Kirkland to Mr Theodorous' house. Mr Lyritzis took his opal stock to that address and in a viewing room adjoining Mr Theodorous' cutting area Ms Braun and Mr Kirkland spent some hours going through the opal. As stones were selected these were marked on the stock sheets. At the end of the selection process Ms Braun prepared an invoice for Mr Kirkland, and another copy for use by herself and Mr Lyritzis. On the second copy notations were made of commissions and other amounts payable to her, and also to Mr Hogg who was to supply one opal and Mr Theodorous who was to supply four smaller opals. The total invoice price payable by Mr Kirkland was $208,984.30. This was later increased by a further $70,000 when, as he was about to leave Coober Pedy, Mr Kirkland agreed to buy one of the pendants from Mr Lyritzis for that price. When the selections and calculation of price had been completed, the selected opals were reboxed, sealed in a separate package to await payment, and returned to Mr Lyritzis. The mode of payment was discussed between Mr Lyritzis and Mr Kirkland in the presence of Ms Braun and Mr Theodorous. Mr Lyritzis said the usual mode of payment "on the field" was cash. Mr Kirkland said he did not have the money with him, but would return in a few days, and he made some reference to the need to bring a bodyguard with him. Mr Kirkland stayed that night at Ms Braun's home and departed from Coober Pedy on Tuesday 27 August 1991. Coincidentally, an the weeks immediately preceding Kirkland's visit Mr Hogg and Ms Braun had been in discussion with Linden Motor Company Pty Ltd which carried on business as a motor vehicle dealer at 260 North East Road, Klemzig, South Australia concerning the purchase of a 26-28 seater bus which Ms Braun required for her tour business. A vehicle had been selected and tentative arrangements for its delivery made but difficulties were being encountered with finance. The commissions due to Ms Braun and the opal sold by Mr Hogg would provide sufficient money to cover the cost of the bus. On about 26 August 1991 Ms Braun telephoned the proprietor of Linden Motors with whom she was dealing, Mr Gordon Penner, and informed him that she and Mr Hogg "would try and pay for the whole purchase price in cash as they were owed some money for an opal transaction". On Wednesday 28 August 1991 and Thursday 29 August 1991 Mr Kirkland telephoned both Ms Braun and Mr Theodorous saying that he was unable to return to Coober Pedy with cash on 29 August 1991 as he had at first proposed, but would come later and wished to pay with bank cheques. I find that the first of these communications was with Ms Braun on Wednesday 28 August 1991. She informed Mr Kirkland that it was not her decision, that she would have to speak with the boys. Ms Braun then telephoned Mr Theodorous' home and spoke with Mr Hogg. He said he would contact Mr Lyritzis. That night Mr Theodorous made contact with Mr Lyritzis at the Greek Club. It was arranged that they would meet at Mr Theodorous' home the following day to discuss the matter. On Thursday 29 August 1991 there was a meeting late in the morning at Mr Theodorous' home between Messrs Lyritzis, Theodorous and Hogg. The question of payment by bank cheque was discussed. At this point the main area of contention between the parties commences, and the events of this day are in dispute. Mr Lyritzis says that none of them was keen on payment by any means other than cash. The decision was left to Mr Lyritzis as most of the opals were his. He says that he told the others he would talk to his bank manager and if he said "it is alright, okay", the transaction would proceed by bank cheque, otherwise "we just tell Annie to ring him up and forget about (it)". Mr Lyritzis then left the house, and drove to the vicinity of the bank in the main street of Coober Pedy intending to call on Mr Pearson. By chance he met Mr Pearson outside the bank and over a few minutes there was a discussion when the advice the subject of the proceedings was allegedly given. Mr Lyritzis has given evidence that he then returned to Mr Theodorous' house and informed Mr Theodorous that the bank Manager said "bank cheques are guaranteed, they are as good as cash, you can cash them at any bank." He said that the transactions could proceed on bank cheques. Shortly afterwards Ms Braun arrived at the house having been summonsed there by one of the men. Calculations were done to determine the denomination of bank cheques that would be required. There were to be four cheques as follows: Payee Amount A & J Lyritzis $170,000 D G Hogg 20,000 Prospector's Opal Shop 50,000 A Braun 38,984.30 The first of these cheques was intended to be paid into the Westpac bank to discharge the applicants' overdraft. The other cheques were not calculated to reflect moneys actually due to each of the payees, but, it would seem, as part of a scheme to "minimise" the tax that would otherwise be payable by the applicants if there were a frank recording, and later disclosure for tax purposes, of the proceeds due to them. Mr Kirkland rang a short time later, probably shortly after lunchtime, and was advised of the denominations required. There is no doubt that the four cheques later produced were prepared in accordance with the above particulars. It will be necessary to return to the evidence of the events of 29 August 1991 to resolve the issues between the parties. Evidence was given by Mr Pearson that sometime during this week Ms Braun ordered $50,000 cash for delivery on 30 August 1991 to enable her to cash a bank cheque to be received for a parcel of opal she had sold. It will be convenient to deal with that evidence in association with the events of 29 August 1991, along with other evidence that during the week she contacted Mr Penner to enquire about using bank cheques to pay for the bus. The four bank cheques that were later produced by Mr Kirkland bear the date 30 August 1991 (Friday). On Saturday 31 August 1991 Mr Kirkland arrived in Coober Pedy by aeroplane. The cheques were exchanged for the opals and Mr Kirkland departed the same day. He said he was leaving Australia immediately to take the opals to Los Angeles. When the bank cheques were handed to Mr Lyritzis both he and Ms Braun who was present checked that each cheque bore two signatures. To that extent they obviously had _ = some understanding about bank cheques, but their evidence generally indicates that their past experience with bank cheques was extremely limited and not such that they would not be likely to seek or to rely upon advice from Mr Pearson (assuming it was given). I reject the respondent's argument to that effect. On Sunday 1 September 1991 Messrs Lyritzis and Hogg travelled to Adelaide. Mr Theodorous travelled to Whyalla. They went via Andamooka to discuss the purchase of certain uncut opals. Mr Lyritzis had the four bank cheques with him. On Monday 2 September 1991 Messrs Lyritzis and Hogg attended Mr Penner at Linden Motors. There had been discussions between Mr Penner and either Mr Hogg or Ms Braun the preceding week when it had been arranged that they could negotiate bank cheques through Linden Motors account at the Hillcrest branch of the State Bank of South Australia to pay for the bus. On 2 September 1991 Mr Penner was shown the three bank cheques drawn to D G Hogg, Prospector's Opal Shop and A Braun. He was concerned about the implications of allowing those cheques for more than the price of the bus to be negotiated through his account for cash. He spoke by telephone with the manager of the Hallcrest branch, and endeavoured to speak with his accountant. He agreed to the course proposed, and they travelled to the Hillcrest Branch. Both in the telephone conversation, and later at the bank, Mr Penner's bank manager said to him that "bank cheques are as good as cash". Mr Penner is unable to say that this remark would have been overheard by either Mr Lyritzis or Mr Hogg. Mr Lyritzis denies that any such remark was made in his presence. At the Hillcrest branch the manager said that the bank had insufficient cash to negotiate all three cheques that day. The cheque for $50,000 payable to Prospector's Opal Shop was cashed. Messrs Lyritzis and Penner were invited to return the following day to cash the other two cheques which they did. All three cheques were negotiated through the Linden Motors account. On 2 September 1991 $50,000 cash was given by the bank to Mr Penner. As he left the premises he handed the money to Mr Lyritzis. After paying the balance due for the bus and a sum for repairs, Mr Lyritzis was left with $22,000. Messrs Lyritzis and Hogg then travelled to the Westlakes branch of the respondent bank. Mr Lyritzis deposited the bank cheque for $170,000 to be credited to the applicants' account at Coober Pedy. Before doing so there was some discussion with bank officers as to the fees that might be paid. It was confirmed that a "cash handling fee" would not be charged where a bank cheque was deposited into a customer's account. On Tuesday 3 September 1991 after cash for the remaining two bank cheques was collected from the Hillcrest Branch, Mr Hogg was given $28-30,000 to enable him to pay for rough opals which Mr Lyritzis had agreed to buy in Andamooka the preceding Sunday. Mr Hogg left Adelaide by bus to travel to Andamooka. On Wednesday 4 September 1991 Mr Lyritzis intended to take his wife and young child to the Adelaide Show. He was about to leave the house when a telephone call was received from Mr Pearson. That call advised that the ANZ Bank considered the four bank cheques were probably fraudulent but this was still being checked. What was said between Mr Pearson and Mr Lyritzis in that call and between Mr and Mrs Lyritzis and Mr Pearson on other calls later that day are contentious issues. In particular Mr Lyritzis says that he immediately said to Mr Pearson "What are you talking about fraud? You told me bank cheques are guaranteed, as good as cash, you can cash them at any bank". The allegation that this spontaneous complaint or any other complaint was made on 4 September 1991 or in the days that followed by Mr Lyritzis is denied by Mr Pearson. During the remainder of 4 September 1991 and on the following day there were undoubtedly a number of telephone conversations between Mr and Mrs Lyritzis and Mr Pearson, and there were also communications by Mr and Mrs Lyritzis with their solicitor Mr Ryan, and between Mr Ryan and Mr Pearson. There is some dispute about the sequence of these calls and their probative value in the determination of this case. I will return to them later. On learning that the cheques could be dishonoured Mrs Lyritzis telephoned Ms Braun and asked that she and Mr Hogg come to Adelaide which they did. They arrived late on 5 September 1991. On 6 September 1991 Mr Ryan spent some five hours dealing with the matter, first interviewing Mr and Mrs Lyritzis, then being present during a police interview of Ms Braun when she gave the story that she had previous dealings with James Kirkland and that James Kirkland was the man that in fact she thought she was speaking to when he first telephoned enquiring whether opals were available. Mr and Mrs lLyritzis were present during this interview. After the interview Ms Braun travelled to her mother's home in the Barossa Valley where she was later visited by the applicants who accused her of "setting up the deal". She then said she had not known the buyer. This prompted the accusation that her denial was a lie. The meeting was not a friendly one. The following day Ms Braun consulted a solicitor, and then gave another statement to the police correcting the earlier statement and saying that notwithstanding what she had said she did not know Mr Kirkland. She explained in her evidence that when the cheques were dishonoured she became very scared of her own position and in particular of Mr Hogg because she had not disclosed that she did not know the buyer. Out of fear, she at first maintained that Mr Kirkland was the person she had dealt with before. On 11 September 1991 Mr Lyritzis was interviewed at length by a police officer. Although that statement has not been tendered in evidence it is common ground that at that time Mr Lyritzis said that he had received the advice from Mr Pearson which he described in his evidence. The evidence of Mr Ryan also establishes that by 13 September 1991 Mr Ryan had prepared a synopsis of events which contained similar allegations, that synopsis being a reflection of information gathered from Mr and Mrs Lyritzis mainly on 6 September 1991, although Mr Ryan was inclined to think that the same allegation was made to him in the course of discussions as early as 4 September 1991. The evidence of these statements is not probative of the fact that Mr Pearson made the statements alleged against him, but they are admissible to disprove that the present allegations are recent inventions. However the possibility remains to be considered that those allegations were made up in the short interval of time between Mr and Mrs Lyritzis first being informed that the cheques were fraudulent, and when the allegations were made to Mr Ryan and to the police. On 23 September 1991 Mr and Mrs Lyritzis conferred with their solicitor and senior counsel who had been retained on their behalf. One of the topics of conversation was the Johns Period Furniture decision. In that case cheque forms of the Commonwealth Savings Bank had been stolen from a post office branch, and were later forged and used to pay for goods obtained from a trader. The bank had known of the theft of the cheques from 1 March 1979 but did not take steps to give any public warning of the theft before the cheques were given to the trader on 3 May 1979. The Full Court of the Supreme Court of South Australia held that the bank did not owe any duty to the trader to give any such warning, and that a claim for damages against the bank failed. Senior counsel gave tentative advice on the relevance of that decision, and on whether it could be distinguished on the facts. On 23 September 1991 a letter was written by the applicants' solicitors to Ms Braun claiming the applicants' loss from her on the ground that she had falsely represented that she knew the purchaser, a fact which the applicants had relied on in deciding to show him the opals, to sell him the opals, and to accept a bank cheque for their share. The final events of relevance occurred in the first week of October 1991 in Coober Pedy. Mrs Lyritzis had returned temporarily to the township and was helping establish a new Place of residence for Mr Lyritzis in Cameron Road. They had owned a vacant block of land in Cameron Road for some time and had recently moved a transportable home to that site from Mintabie. In this house was a very large bank safe - so large that it could not be removed from the house during transportation. On 3 October 1991 Mr Pearson called at Cameron Road to discuss the applicants' overdraft account. Mr and Mrs Lyritzis were present. Ways in which the applicants could bring the account back within limits were canvassed. Mr Pearson gave them the option either of selling assets to do so, or giving additional security by way of mortgage and charge over the Cameron Road land and transportable house. It would seem that they decided on the latter option shortly after the discussion, as security documents were signed on 7 October 1991, and the relevant Certificate of Title was given to the bank. Either on 3 or 7 October 1991 Mr Pearson inspected the house for the purposes of estimating its value. His evidence is that he saw no safe and he does not believe there was one in the house. In that respect I am satisfied that his recollection is mistaken and that there was a very large safe that he must have seen. Mr and Mrs Lyritzis allege that they complained again on that occasion to Mr Pearson that their predicament was due to his advice that bank cheques were as good as cash. They say that there was discussion about senior counsel's advice on the Johns Period Furniture case. They informed Mr Pearson that they hoped to succeed in a claim against the ANZ Bank and against Ms Braun. They deny that they said they were intending to sue the respondent Bank. On the contrary they were careful not to make that suggestion as they were dependent at the time on the Bank to maintain their overdraft facility. Mr Pearson on the other hand says that no complaint was made to him that he had given erroneous advice, but that the applicants said they intended to sue the ANZ Bank, Ms Braun, Mr Hogg and Westpac. It will be necessary to return to the evidence about this conversation. Against that chronology of events I turn to the evidence of the other witnesses. I accept Mr Ryan and Mr Theodorous as witnesses of the truth, and subject to reservations which they themselves expressed about uncertainties as to dates I accept their evidence. It should be noted however that most of Mr Ryan's evidence was directed to refuting suggestions of recent invention by Mr and Mrs Lyritzis, and as I have already noted, what they told him about earlier events is not evidence tending to establish the happening of those events. I accept Ms Braun as a witness who was trying truthfully to recount what had happened. I accept her explanation that she made an error of judgment in not telling the boys that the opal buyer was not the person she had dealt with previously; that when faced with the discovery of the fraud she became so scared that she initially told untruths to the police; and that because of her fear she now has only scant recollection of events that occurred over the next few days. There are differences between the evidence of Mr Theodorous and Ms Braun on matters of detail about the events leading up to the exchange of the bank cheques for the opals, but they are the sorts of differences that could be expected between reliable witnesses and I do not treat them as significant. I also accept the evidence of Mr Dansie so far as it goes. He was the relieving bank manager at the Westlakes branch of the respondent Bank when Mr Lyritzis deposited his cheque on 2 September 1991, but his evidence was of marginal relevance and his recollection of events virtually non-existent, which is understandable as he played no significant role at the time and was not asked to recollect the occasion until shortly before trial. A statement by Mr Penner was tendered by consent, but subject to a reservation by counsel for the applicants which appears at p.800 of the transcript. The agreed statement of the evidence which Mr Penner would have given had he been able to do so differs somewhat from notes that he made on the evening of 4 or 5 September 1991 which are annexed to the agreed statement, and where there is a difference I give greater weight to the notes made at the time. Mr Hogg was not called by either side and no explanation for his absence was offered by either side. Initially he was on friendly terms with Mr Lyritzis, but the evidence shows that soon after the discovery of the fraud his girlfriend was accused of "setting up the deal" and there is a suggestion that he too was to be sued at one stage. It cannot be inferred that he is in the applicants' camp or would be a cooperative witness if subpoenaed by _ them. At the commencement of the trial Mr Hogg was apparently in Adelaide, and a subpoena addressed to him had been issued by the respondent. In these circumstances I draw no inference against either side from the fact that Mr Hogg was not called. I return to the events of 29 August 1991 when Mr Lyritzis alleges that the impugned advice was given. In the statement of claim the conversation is alleged to have occurred on 28 August 1991 but this date was not repeated by Mr Lyritzis in his evidence. Uncertainty about the date was also voiced by Mr Pearson, although he acknowledged that a meeting occurred at about that time in the street outside the Bank office. I am satisfied that the meeting occurred on 29 August 1991. On that day Mr Pearson wrote to his Regional Manager reporting on the applicants' overdraft as follows: "Full review was to have been completed by now however taxation figures are yet to be done. He has stones with buyer at present and is hopeful of clearing debt within week..." The cross-examination of Mr Pearson satisfies me that this letter would have been written aimmediately following the meeting in the street, which was the only occasion about that time that the two had a conversation. I am not satisfied that there was a telephone call from Mr Lyritzis to Mr Pearson earlier in the week as Mr Pearson was inclined to suggest at one point in his evidence, a suggestion that he later withdrew. A report to the Regional Manager was two weeks overdue by 29 August 1991 and it is probable that Mr Pearson wrote as soon as he had something to report. Mr Lyritzis' evidence is that he drove to the bank from Mr Theodorous' house travelling in a northerly direction. As he approached the bank he observed Mr Pearson coming from the post office on the eastern side of the main street walking towards the Bank on the western side. He parked his vehicle on the western side of the road, alighted, and walked to Mr Pearson. The two conferred on the western side of the road. He said he had good news. He had done a deal and might be able to pay off his overdraft but he did not know yet what was going to happen as the customer wanted to pay with bank cheques. He asked whether he could accept bank cheques as guaranteed; "Are the bank cheques guaranteed, can I accept them or not?" Mr Pearson gave the answer "Bank cheques are guaranteed, they are as good as cash, you can cash them at any bank...Arthur, that is no problem". Mr Lyritzis said "Are you sure because I don't want any more problems after the other (the robbery), I don't want to go through any more problems" to which Mr Pearson replied that there would be no problem. Mr Pearson wished him good luck. Mr Lyritzis then returned to Mr Theodorous' house, a course which would take him in a southerly direction from the Bank. An aspect of this account of the conversation gained support from Mr Pearson's memo of 29 August 1991 to the effect that there was at that stage an uncompleted transaction and Mr Lyritzis was "hopeful of clearing debt within week". Mr Pearson on the other hand says that at about the time and date alleged he was walking from the bank to the post office when he observed Mr Lyritzis driving in a northerly direction. Mr Lyritzis waved, then executed a "U" turn so as to stop in front of the post office. The conversation occurred without Mr Lyritzis alighting and it was relatively brief. His evidence in chief is that Mr Lyritzis said he had sold a parcel of opal. He said he was getting payment by bank cheque and he would be clearing his debt with the bank. I said to him that it would be good to get the debt cleared. He said that he was on his way to either Mintabie or Adelaide, and he drove off. In his answers to interrogatories, when asked to recount the full conversation Mr Pearson made no mention of Mr Lyritzis saying he was travelling to Adelaide or Mintabie. Mr Pearson denied that he made the statements that a bank cheque or bank cheques were as good as cash, that they were guaranteed, or that they could be cashed at any bank, facts he said that he knew to be wrong. On this account, Mr Lyritzis did a "U" turn, and was then facing south, in the direction of Mr Theodorous' house. That was the direction in which he left. Had the encounter been an entirely chance one with Mr Lyritzis travelling in a northerly direction, it is surprising that he then left the scene travelling in the opposite direction. This is not a strong point but it is a factor in favour of the Lyritzis' version. I think it is improbable that Mr Lyritzis would have bothered to make a special journey merely to inform Mr Pearson that he hoped that he would be able to pay off the overdraft shortly, and improbable even that he would have bothered to stop in the main street to pass on this advice had he been in the course of a journey to another location, as I am satisfied there had been no communication between the two for more than six weeks, so that Mr Lyritzis was not likely to have treated the overdraft as a matter of pressing urgency. In his cross-examination Mr Pearson agreed that Mr Lyritzis may have said that he might be able to pay off his overdraft, indicating a less certain situation than that suggested by his evidence in chief. On the question of his then belief about bank cheques, the cross-examination of Mr Pearson recorded from pages 772 to 777 of the transcript is significant. He acknowledged that he understood the position to be as described in the Bank handbook at the time, namely that "it is normal commercial practice for bank cheques to be accepted as a safe and convenient alternative to cash" save that the member banks of the Australian Bankers Association had agreed to be bound by a set of uniform guidelines which permitted the dishonouring of bank cheques in the following situations: forged or counterfeit instruments bank cheques materially altered bank cheques reported lost or stolen failure of consideration for the issue of a bank cheque court order restraining payment He recognised that bank cheques were significantly different from personal cheques in that they were drawn on a bank, and subject to the bank cheque being cleared it was as good as cash. The following exchange between counsel and the witness then occurred: "If you had been asked about bank cheques you would not have thought in 1991 to say to somebody, well, a bank cheque is okay, but you have got to watch out to see if it is not forged or counterfeit, would you?---No. No. It would not have come to your mind to think about forgery or counterfeit?---No. It would not have come to your mind to say, well, you have got to check to see if it is a stolen, or lost cheque, would you?---No. It would not have even come to your mind?---No. It would not have come to your mind to say to someone, well, you have got a cheque, let us see if it has been materially altered or not?-~-No. It would not have come to your mind to say to somebody: you have got to check to see if there was good consideration for the issue of the cheque?---No. It would not have come to your mind to say to somebody who asked you about it: well, you have got to make sure that there is no court order about restraining the payment of it?---No. No. So, if somebody has asked you in 1991 about a bank cheque you would have said: look, a bank cheque, subject to it being cleared is as good as cash. You might not have used those terms, but that would have been in your mind, would not it, in 1991?--~Yes. So, if someone had asked you the question 1n 1991: can I accept a bank cheque? You probably would have said something to this effect, and said to you in Coober Pedy in the cash economy - 1s a bank cheque as good as - can I accept a bank cheque? In your mind, you would have said something along the lines: well, it has got to be cleared and that takes a few days, but subject to that, you can?---I could have done, yes. Yes. That would have been the state of your knowledge and mind in 1991, would not it?---Yes." In those circumstances, had Mr lLyritzis said to Mr Pearson that a buyer was wishing to pay him by bank cheque for opals which he would then use to pay off his overdraft, i.e. lodge at with Westpac to be cleared, I do not find it unbelievable (as the respondent contended) that Mr Pearson would have given advice to the effect that it was safe to accept the cheque which would be as good as cash to clear the overdraft. As I have indicated, I accept generally the evidence of Ms Braun and Mr Theodorous. I am satisfied that the question of the possible payment by bank cheques arose when Mr Kirkland telephoned Ms Braun on Wednesday 28 August 1991, and she said the matter would have to be referred to the boys. The evidence of Mr Theodorous confirms that of Mr Lyritzis, to the effect that the discussion about accepting bank cheques did not occur until about the middle of the day on Thursday 29 August 1991. It is at first sight a lattle surprising that they did not meet to discuss this important development earlier in the day, but no questions were asked about other commitments which may have occupied them beforehand, or about their lifestyles. There is some evidence that social pursuits continued well into the evening, and possibly business activities do not start as early in the morning in Coober Pedy as they do in the city. I do not find the hour of the meeting of particular significance. I accept Mr Theodorous' evidence that there was such a meeting when the question of bank cheques and Mr Kirkland's request was discussed. I reject the respondent's argument that the decision to accept bank cheques was made before the meeting between Mr Lyritzis and Mr Pearson. This argument has a number of threads to it. First, it is suggested that Ms Braun's evidence of her meeting with the boys to settle on the denomination of the cheques occurred earlier than Mr Theodorous' timing of Mr Lyritzis' departure from the house. I do not think it is possible to be so precise about time estimates given by the witnesses which were acknowledged by them to be rough estimates given well after the event. Of more importance are the descriptions of events at about that time which they each give, and those descriptions are supportive of Mr Lyritzis' account of events. Secondly, it is said that a file memo of Mr Pearson dated 4 September 1991 provides a reliable base for evidence given by him that Ms Braun rang him early in the week commencing 26 August 1991 ordering $50,000 to cash a bank cheque on Priday 30 August 1991. The day upon which the cash was required is said to be significant because Mr Pearson says he told Ms Braun that it would take about a week to clear a bank cheque. His note records: "PS. Anne Braun had phoned me about a week earlier to let me know that they had sold a parcel of opal and would want to get cash for a bank cheque. I told her that we would need to clear the cheques first and she would have to wait about a week. She was happy with that and asked that we order $50,000 for Friday 30/8. She phoned later in the week and cancelled the order." Ms Braun on the other hand said that she did not raise the question of obtaining cash for one or more of the bank cheques until she did her own banking on the afternoon of Thursday 29 August 1991, and then did so with a teller. It was on this occasion Ms Braun says that she was told there would be a cash handling fee which she understood to be in the region of 2 to 3% of the amount of cash received from the bank. She says however that she may have spoken with Mr Pearson when she rang on 2 or 3 September 1991 to say that she would not require the cash. On this topic I find that Ms Braun's evidence is clearly to be preferred to that of Mr Pearson. Notwithstanding Mr Pearson's initial evidence that the file note was prepared on 4 September 1991, it has been demonstrated that it could not have been prepared until 5 September 1991, and may not have been prepared until as late as 9 September 1991. Even if it were prepared on 5 September 1991 an enquiry "about a week earlier" would put the enquiry at about Thursday 29 August 1991. That 15 consistent with Ms Braun's evidence. Ms Braun has no recollection of being advised that bank cheques would take about a week to clear, but even if she were, I do not find it surprising that she should order the cash for the following day as she was aware that delays could occur in transporting significant sums of cash to Coober Pedy, and that there were at times considerable demands for it. Mr Penner's notes record that on Monday 26 August 1991 Ms Braun told him that they would try and pay for the whole purchase price in cash. It was not until the afternoon of 29 August 1991 that Mr Hogg and Ms Braun asked him whether they could negotiate bank cheques received by way of opal payments for the purchase of the bus, and that he started to make enquiries about fees that would be charged by his bank if the bank cheques were negotiated through his account. This also ties in with Ms Braun's evidence. I therefore reject the argument that the evidence about Ms Braun ordering cash establishes that the decision had been Made to accept bank cheques before Mr Pearson and Mr Lyritzis spoke in the street. Thirdly, the respondent argues that the evidence of Mr Lyritzis that he left Mr Theodorous' house for the purpose of seeing Mr Pearson should not be accepted. Mr Theodorous estimated that Mr Lyritzis was absent from the house for 20 to 30 minutes. This was obviously intended only as a rough estimate but the respondent contends that it indicates that there must have been some other purpose for the journey because it would not have taken so long to drive 800 metres or so to the Bank, have the discussion and return. I reject this argument. I have already referred to the directions of travel of Mr Lyritzis as observed by Mr Pearson. That is a minor point but consistent with Mr Lyritzis' evidence that there was only one purpose to the trip. I do not think it is possible to draw any conclusion of the kind contended for by the respondent about the time estimates. I think it is probable that the discussion including pleasantries extended over a significantly longer time than Mr Pearson estimated, even if it is the case that Mr Lyritzis did not alight from his vehicle (and on this point if it were necessary to make a finding I would prefer the evidence of Mr Lyritzis). The more important evidence is that of Mr Theodorous about the sequence of events. There was conversation between the men as to the purpose for Mr Lyritzis' departing from his home. Mr Lyritzis was away for an interval of time. Mr Theodorous' estimate is not inconsistent with the stated purpose. Upon his return, Ms Braun was summonsed and the denominations of the cheques were calculated - a step that those present at the house were not prepared to take before the journey occurred. Mr Theodorous' evidence as to the statements made by Mr lLyritzis when he returned about a conversation with Mr Pearson is not evidence tending to prove what Mr Pearson said, and it was not admitted into evidence for that purpose. The statement was however one by Mr Lyritzis consistent with the purpose of his trip, and in my opinion it is also admissible to disprove the respondent's case that there was an invention of this aspect of the evidence shortly after 4 September 1991. In my opinion the evidence of Mr fTheodorous adds significantly to the probability of the applicants' case. The respondent argues that it is improbable that Mr Lyritzis would attend the Bank on the off chance of seeing Mr Pearson rather than telephone him first to check that he would be there. With the benefit of hindsight this is a reasonable criticism, but on the other hand as the events were unfolding it is understandable that Mr Lyritzis may have thought it more desirable to speak to Mr Pearson directly, particularly as the bank was nearby. I do not find this criticism to be of significant weight. The respondent further argues that it is extraordinary that when Mr Kirkland said he could not bring cash, apparently because of difficulties in transporting it, that he was not told by Mr lLyritzis and the others to have the money transferred to Coober Pedy by telegraphic transfer. I do not accept this argument. First, I am not satisfied by the evidence that Mr Lyritzis understood the full operations of telegraphic transfer. But even if he did, if he received the advice which he said he received from Mr Pearson there would have been no need for him to have explored the possibility of a telegraphic transfer. Mr Kirkland wished to bring bank cheques. Mr Pearson's advice was sought. The answer received, on the applicants' case, was that payment by bank cheque would be as good as payment by cash. Having received that advice there would be no reason to consider other options. In another context an argument was raised by the respondent that Mr Lyritzis' concern about bank cheques had nothing to do with safety but with a desire to avoid leaving a paper trail that could have taxation audit implications. This was said to be relevant to the question of reliance. However the argument does not follow because bank cheques were in fact received. If the problem had been the one suggested it could be expected that other alternatives including telegraphic transfer by Mr Kirkland to an account in his own name at the Westpac bank would have been explored so that on completion the vendors received cash. I turn now to the events of 4 September 1991. Mr Lyritzis gave evidence that as soon as he was informed by Mr Pearson that the bank cheques could be frauds he complained that Mr Pearson had advised him that bank cheques were as good as cash, and that he repeated that complaint later in the day when Mr Pearson rang to tell him that it seemed that he "had done his dough" to which Mr Lyritzis replied "What do you mean I have done my dough...you told me bank cheques were as good as cash, you can cash them at any bank." (p.335) Mrs Lyritzis gave evidence that she overheard Mr Lyritzis make these remarks as she was standing next to him, and on the first occasion had answered the phone. Mr Pearson however denied the allegations. His evidence in chief was based upon the file summary sheet dated 4 September 1991, and in particular the following passage: "I phoned Arthur to advise what had transpired and he was quite devastated (after having safe stolen a few years earlier). He said that he thought a Bank cheque was as good as cash and payment was guaranteed by the bank. Advised him that it would depend on the _= full circumstances of the case but mentioned to him that their (sic) had been a previous case concerning' the Commonwealth Bank and Johns Period Furniture in which bank cheques had been stolen and the court had ruled in favour of the bank. I told him that the ANZ bank had yet to examine the situation and we were unable to say whether the cheques were genuine or not. Suggested that he contact his solicitor to follow up." I have already commented that this note was not typed on 4 September 1991. It is clear that there were numerous conversations that day involving Mr Pearson and he also at one point attended the shop of Ms Braun. Mr Pearson denied that there was any prospect of him having confused telephone conversations he had with Mr Ryan about Johns Period Furniture case. His cross-examination however showed that his reasons given in chief for recollecting that case could not be correct. I think the strong probability is that a measure of confusion has crept into Mr Pearson's notes. It is common ground that Mr Pearson was first telephoned by Mr Dansie who informed him of the possible dishonour of the cheques. He telephoned the ANZ Bank himself for further information, and then contacted Mr Lyritzis. I think it is highly unlikely that Johns Period Furniture case was mentioned at that stage. Mr Pearson's note, and evidence, is that in the first telephone conversation Mr Lyritzis mentioned bank cheques as being as good as cash. The issue between the parties is whether Mr Lyritzis merely said he held that belief, or whether he said he held that belief because of what he was told by Mr Pearson. If the later situation is correct, the accusation would have been a disturbing one for Mr Pearson. I think it is probable that the Johns Period Furniture case was mentioned by Mr Ryan to Mr Pearson in the course of discussions later in the morning and it was that reference which prompted Mr Pearson to obtain a copy of the decision by fax from the legal office of the Bank. I see force in the submission of counsel for the applicants that the probable reason why he made the request for the decision is that Mr Lyritzis had suggested that Mr Pearson had given erroneous advice, and he wished to consider the case to see if it offered any hope for Mr Lyritzis to make a recovery from the ANZ Bank. Mr Lyritzis himself was asking the question: how could the ANZ Bank refuse to honour the cheque? There also seems to have been discussion during the day between Mr Pearson and Mrs Lyritzis as to the prospect of them suing the ANZ Bank. However I cannot on the evidence find positively that this was the reason for Mr Pearson seeking a copy of the decision. The explanation may well be that he was trying to gauge the position of his branch that would be left with an overdrawn account if Mr Lyritzis did not recover on the cheque. I think it is improbable that Mr Lyritzis would have said as an immediate reaction that he thought bank cheques were as good as cash, and then have concocted in a short space of time a story that converted that statement to an accusation that Mr Pearson had told him that cheques were as good as cash. It is argued by the respondent that Mr Lyritzis probably overheard Mr Penner's discussion with the manager of the Hillcrest branch of the State Bank of South Australia, and adopted the words "as good as cash" from that source, and in turn used that information to concoct the evidence which the applicants now give. If those words were adopted from something overheard in conversations involving Mr Penner, that might explain the use of similar expressions to Mr Pearson on 4 September 1991, but it remains improbable that the applicants could concoct so quickly an elaborate story which incorporated statements actually used in the heat of the moment, but with subtle modification so as to completely alter the thrust of the conversation, and also to fit that part of the deception neatly into a wider picture incorporating the earlier conversation in the street on 29 August 1991. I am left with the impression that the paragraph quoted above from the summary sheet is an amalgamation of several discussions, and in the result gives a picture which hides the fact that Mr Lyritzis was blaming his state of belief that a bank cheque was as good as cash on a conversation that he had with Mr Pearson the preceding week. That Mr Pearson's file notes do not give an accurate portrayal of the underlying accusation that the applicants were making about Mr Pearson's advice gains further support, in my opinion, when the evidence of the conversation which occurred between them on 3 October 1991 is compared with Mr Pearson's file note relating to that conversation. The purpose of the visit is common ground. A point of contention at trial arose as to whether Mr Pearson said that with additional security the overdraft limit would be raised to $180,000, or whether, if it were provided, Mr Pearson would merely allow the overdraft which then stood at close to that figure to remain outstanding; by the end of the trial Mr Pearson had conceded that it would be not unreasonable for the applicants to have gained the impression that the extra security would increase the overdraft limit. There was a dispute whether or not Mr Lyritzis showed Mr Pearson cut opals or whether he merely told him that he had stock in hand to the value of $300,000. The value was certainly mentioned. Whether or not the opals were shown is related to the question whether there existed a safe in the house at the time. I have indicated my acceptance of the clear evidence that there was a large safe present about which Mr Pearson has apparently forgotten. There was also some dispute about the extent of conversation concerning the Johns Period Furniture case. On that I thought the evidence of Mrs Lyritzis had a strong ring of probability about it. But those are not matters of much significance. The important matter concerns another aspect of Mr Pearson's file note. I have already recounted that Mr and Mrs Lyritzis said they intended to sue the ANZ and Ms Braun but avoided any suggestion that they intended to sue Westpac (although by this time the basis of their claim against Westpac had been clearly articulated in instructions to solicitors and a statement to the police). They say they merely said to Mr Pearson that their predicament was dne to the advice that he had given about bank cheques being as good as cash. Mr Pearson in his file note records that Mr Lyritzis "Has engaged solicitor Chris Ryan and a QC and is suing ANZ and Anne Braun. The QC has told him that he has a good chance as fraud squad have stated the ANZ control of bank cheques was very slack...". In his evidence Mr Pearson now asserts that the applicants also said they intended to sue Westpac. No record is made of this statement in the file note which is surprising if the statement were made. Had that statement been made it is also surprising in the extreme that Mr Pearson would have made no enquiries as to the basis for the allegation (that being his evidence) unless he were already aware of a basis for action and chose not to highlight the point. I consider the probability is that the applicants did, as they say, make the general statement that their predicament was due to Mr Pearson's advice. At the time as the applicants were saying they intended to sue others, and not Westpac, Mr Pearson chose to make no reference in the file note to the complaint about his conduct. Now looking back on events that occurred three years ago it is understandable that he has the impression that on 3 October 1991 the conversation indicated to him that action against Westpac was one of the contemplated possibilities. When the matters I have canvassed in relation to the disputed events are weighed up I am left with a clear preference as a matter of probability for the evidence of the applicants. The respondent has emphasised certain disconformities between the pleadings (including the particulars) and the evidence of the applicants, and has criticised the inadequacy of their discovery of business records and certain scraps of paper which contained notes of conversations made on or about 4 September 1991. They have also stressed the failure to keep proper financial records, suggesting concealment of income. I have carefully considered these matters and weighed them having regard to the social, cultural and educational background of the applicants and the unique environment in which they normally conduct their day to day affairs. In the result I am not persuaded by those criticisms that I should disregard the probabilities and reject the applicants' claims as based on oral testimony which is suspect. Once it is accepted that Mr Pearson informed Mr Lyritzis, in answer to his enquiry whether it was safe to accept a bank cheque (or cheques, and I place no significance on whether the singular or plural was used) from the buyer, that a bank cheque was as good as cash, the conclusion must follow that the advice was misleading or deceptive. The advice fails to warn of the possibility that a bank cheque could be dishonoured on a number of grounds, including because the cheque was forged, counterfeited, lost or stolen. Acceptance of a bank chegue would leave the applicants at risk that payment might not be received. That was the very risk that people who lived in the environment and circumstances in which Mr Lyritzis and other participants in the cash economy of Coober Pedy endeavoured to avoid by dealing in cash. Mr Pearson and the respondent were well aware of that. The circumstances in which misleading or deceptive conduct, for the purposes of s.52 of frade Practices Act 1974, may be constituted by a factual matrix which includes silence as well as overt activity was considered by the Full Court of this Court in Demagogue Pty Ltd v Ramensky & Another (1992) 110 ALR 608. Black CJ at 609-610 observed: "The primary question was whether there had been conduct that was misleading or deceptive or likely to mislead or deceive. In this case, as 1n every case in which s.52 is relied upon, this was a question of fact that could only be determined - as the judge did determine it - having regard to all its relevant circumstances. Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of dasclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that 1s misleading or deceptive or that is likely to mislead or deceive. To speak of 'mere silence' or of a duty of disclosure can divert attention from that primary question. Although 'mere silence' is a convenient way of describing some fact situations, there is in truth no such thing as 'mere silence' because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed." See also Gummow J at p.618-619. In my opinion in the circumstances disclosed by Mr Lyritzis to Mr Pearson, the failure to qualify the statement that bank chegues are as good as cash with a further statement that a forged, counterfeited, lost or stolen bank cheque may be dishonoured was plainly misleading. The respondent contends that even if Mr Pearson made the statements in the street on 29 August 1991 alleged against him, it has not been shown that the statements were false because bank cheques are neither as good as cash, nor when delivered equivalent to cash. This argument relies on the technical differences between bank cheques and cash. The argument however overlooks the real gravamen of the applicants' complaint, namely that the statement when not coupled with the qualification as to the circumstances in which a bank cheque could be dishonoured constituted the conduct relied on as misleading or deceptive. The respondent also contends that even if the statement were made, the applicants' case does not prove that Mr Lyritzis relied upon the statement to decide to accept Mr Kirkland's offer of bank cheques. The respondent points to the evidence that Mr Lyritzis was overdrawn at the bank and in need of a substantial sale. It is argued that to get that sale he would have taken risks including the risk of accepting a bank cheque even if he had been advised of the qualification. That proposition is contrary to the evidence of Mr Lyritzis, to the evidence of Mr Theodorous, to the evidence about the way in which the Coober Pedy community operates, and, I think, to common sense. There can be no doubt about Mr Lyritzis' reliance upon the advice. This follows inevitably from the finding that he broke off his discussion about accepting bank cheques with Messrs Theodorous and Hogg to consult with the bank manager, and on his return, after receiving the advice, proceeded to implement the transaction. It 1s true that a letter of demand was forwarded to Ms Braun early in the piece alleging reliance by the applicants upon Ms Braun's introduction of Mr Kirkland as someone known to her, but even if there were any substance to that allegation, the fact remains that a substantial cause of the loss was Mr Lyritzis' reliance upon the advice from Mr Pearson. It must be remembered that the letter to Ms Braun was written at a time when the applicants had already made their allegations against the respondent, but were searching around for alternative avenues of recovery so as not to upset their banker. It is not disputed that if Mr Pearson gave the advice alleged, he did so in the course of trade or commerce, nor is it disputed that his conduct was on behalf of the respondent s0 as to deem the respondent to have engaged also in that conduct: s.84(2) of the frade Practices Act. In my opinion the applicants have made out their case under s.52 of the Trade Practices Act, and pursuant to s.82 are entitled to recover the sum of $170,000 together with interest. The applicants have continued to owe a substantial sum to the respondent in respect of which they have been charged compound interest at commercial rates. It is not disputed that compound interest at commercial rates is appropriate in respect of the entirety of the damages. The amount involved is agreed at $87,584.52 to 14 October 1994. My interpretation of the schedule of interest rates is that interest is presently accruing at the rate of $89.54. To the date of judgment the additional interest will be $1,880.34. The applicants' claim 1s also pressed in negligence. In My Opinion that claim should also succeed. The applicants were established customers of the respondent. When Mr Lyritzis informed Mr Pearson of the circumstances in which he was making the enquiry for advice, by choosing to respond to that request Mr Pearson came under a duty to exercise reasonable care and skill in doing so: San Sebastian Pty Ltd & Anor v The Minister Administering The Environmental Planning and Assessment Act 1979 and Anor (1986) 162 CLR 340 at 355, 372. I consider the failure to qualify the advice which he gave so as to warn about forged, counterfeit, lost or stolen cheques constituted a breach of that duty. In my opinion there should be judgment for the applicants for $259,464.86. I certify that this and the 42 preceding pages are a true copy of the Reasons for Judgment of Justice von Doussa Associate: Dated: 4 November 1994 Counsel for the applicants Solicitor for the applicants Counsel for the respondent Solicitor for the respondent Date of hearing Mr J R Sulan QC Reilly Basheer Downs & Humphries Mr P A McNamara Finlaysons 1-3 March, 1994, 13, 13, October, 17, 18, 11, 12, 20 & 24