David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48

High Court of Australia Mason C.J. Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48

ORDER Appeal allowed with costs. Set aside the order of the Full Court of the Federal Court in so far as it relates to the appellants' appeal on the cross-claim and in lieu thereof order that:

(i) the appeal to the Full Court on the cross-claim be allowed; and

(ii) the order of the trial judge made 14 June 1989 be set aside.

Remit the matter to the trial judge for determination, in accordance with the judgment of this Court, of the following issues:

(i) whether the appellants should be permitted to call evidence on the issue of mistake;

(ii) whether the appellants paid the additional amounts because of their mistaken belief that their contractual arrangements with the respondent required the payments;

(iii) whether the respondent changed its position on the faith of receipt of the payments by the appellants.

Cur. adv vult.

The following written judgments were delivered:—

1992, Oct. 7 Mason C.J., Deane, Toohey, Gaudron and McHugh JJ.

This appeal is brought by the appellants against a unanimous judgment of the Full Court of the Federal Court of Australia [1] . That judgment, in part, dismissed the appeal of the appellants against an order by the trial judge in favour of the respondent, the Commonwealth Bank of Australia ("the Bank"), on its original cross-claim. To understand fully the context in which that cross-claim arose and the basis of the appellants' case in this Court, it is necessary to examine in some detail not only the financial transactions between the appellants and the Bank, but also the history of the litigation.

1. (1990) 23 F.C.R. 1.

The facts and the proceedings

David Securities Pty Ltd ("David Securities") and A. T. Rahme Sons Pty Ltd ("A. T. Rahme") were family companies controlled at all material times by Antoine and Therese Rahme. The companies carried on business as builders and property developers. At various times, Mr. Rahme and the two companies had obtained finance from the Dee Why branch of the Bank, of which they had been customers for some years.