Williams, Anthony Christopher & Ors v Commonwealth Bank of Australia & Ors [1995] FCA 850

CATCHWORDS TRADE PRACTICES -Breach of s 52 Trade Practices Act - Whether bank represented loan approval not subject to further valuations - whether bank represented it would provide further funds on rezoning of properties - whether silence amounted to representation - whether silence amounted to misleading conduct. CONTRACT - Breach of contract - whether contract subject to a condition precedent - whether contract subject to satisfactory valuations - whether bank contractually bound. TORT - negligence - whether duty to inform valuations not satisfactory - whether breach of duty of care. EQUITY - unconscionable conduct - whether unconscionable conduct arising from undue influence and duress - whether inequality of bargaining power - estoppel - whether estopped from alleging misrepresentation and unconscionable conduct. Trade Practices Act 1974 (Cth) Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 Louth v Diprose (1992) 175 CLR 621 Barton v Armstrong (1976) AC 104 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Jones v Dunkel (1959) 101 CLR 298 Robertson A, "The Circumstances in which Silence can Constitute Misleading or Deceptive Conduct" (1991) Queensland Law Society Journal, February. ANTHONY CHRISTOPHER WILLIAMS, EUNICE ELIZABETH KELLY, PRESEARTH PTY LTD & NOMMACK (No 198) PTY LTD v COMMONWEALTH BANK OF AUSTRALIA & Ors No NG 898 of 1992 Tamberlin J Sydney 20 October 1995

IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 898 of 1992 GENERAL DIVISION ) BETWEEN: ANTHONY CHRISTOPHER WILLIAMS First Applicant EUNICE ELIZABETH KELLY Second Applicant PRESEARTH PTY LTD (ACN 003 402 166) Third Applicant NOMMACK (NO 198) PTY LIMITED (ACN 003 107 659) Fourth Applicant AND: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) Respondent/Cross Claimant PRESEARTH PTY LIMITED First Cross Respondent NOMMACK (No 198) PTY LIMITED Second Cross Respondent ANTHONY CHRISTOPHER WILLIAMS Third Cross Respondent CORAM: TAMBERLIN J PLACE: SYDNEY DATED: 20 OCTOBER 1995 REASONS FOR JUDGMENT Nature of Proceedings The application claims damages, under the Trade Practices Act and for negligence in relation to a failure by the Commonwealth Bank of Australia (the "Bank") to advance a loan in the total amount of $3.4 million to the third and fourth applicants for the purpose of acquiring properties at 4-4A, 6-8 and 10-18 Gertrude Street, Arncliffe ("the properties") over the period from 16 June 1989 to about May 1990. There is also a claim for breach of contract. In addition, a further claim is made that the Bank acted in an unconscionable manner in relation to the obtaining of a letter from the applicants bearing date 16 June 1989, to the effect that loan funds were no longer required to purchase properties situated at 6-8 and 10 Gertrude Street, Arncliffe. The Parties Mr A C Williams Mr A C Williams, ("Williams") is the first applicant. He is also a director of the third applicant. He agreed in about August 1987 with Mr V W Kelly, ("Kelly"), a real estate agent, to commence a joint venture using the third and fourth applicants as the vehicles for the joint venture with the intent of purchasing, consolidating and selling the properties at a profit following development consent or redevelopment. Mrs E E Kelly Mrs E E Kelly ("Mrs Kelly") is the mother of Kelly. She has had considerable experience in relation to running a Real Estate Agency and associated book-keeping work. Over a period of about 23 years she and her husband developed a successful real estate business. Her husband died in January 1987. To enable the real estate venture proposed by the third and fourth applicants to proceed, Mrs Kelly advanced the sum of $170,000 to the joint venture on 20 March 1989. This was in respect of a deposit on the properties 12-18 Gertrude Street, Arncliffe. She also advanced moneys for the purchase of 4-4A Gertrude Street, on 31 March 1989 in the sum of $57,700 being the deposit on the property. Presearth Pty Ltd Presearth Pty Ltd ("Presearth") is the fourth applicant. It was a shelf company purchased by the first applicant, Williams, for the purpose of forming a joint venture company in relation to premises at Gertrude Street, and 4-8 Princes Highway, Arncliffe. Williams is a director and shareholder of this company and effectively controls it. Nommack (No 198) Pty Ltd Nommack (No 198) Pty Ltd was another shelf company which was purchased by Kelly for the purpose of forming the joint venture. He is a director and shareholder of that company and it is effectively controlled by him. These companies were selected for the venture in about August 1987. The Commonwealth Bank of Australia The Commonwealth Bank of Australia is the respondent. It is also a cross-claimant in the proceedings for moneys outstanding under securities granted by it to the first, third and fourth applicants.