Axis Bank Limited v Gujarat NRE India Pty Ltd [2020] NSWSC 1711

Supreme Court New South Wales

Medium Neutral Citation: Axis Bank Limited v Gujarat NRE India Pty Ltd [2020] NSWSC 1711 Hearing dates: 10, 11, 12, 13, 14 August 2020 Decision date: 02 December 2020 Jurisdiction: Equity - Expedition List Before: Sackar J Decision: See [470]-[474] Catchwords: BANKING AND FINANCE – GUARANTEE AND INDEMNITY — Australian Securities and Investments Commission Act 2001 (Cth) s 12DA – Whether bank engaged in misleading and deceptive conduct by failing to draw guarantor's attention to the terms of the parties' facility agreement that differed from those set out in term sheets sanction letters, or by failing to advise that it required an unqualified, unconditional and irrevocable guarantee – Where terms of guarantee in facility agreement differed from those in terms sheets and sanction letters – Where both sides to negotiations were sophisticated and experienced and representative for the guarantor engaged in drafting of facility agreement – Where terms sheets and sanction letters made clear the facility agreement was to be the source of contractual obligation – Where true and complete copy of the facility agreement was provided to the guarantor for execution – Whether guarantor relied upon representations made by the bank – Where there was an urgent need for funds – Where guarantor's inattention to terms of guarantee the result of indifference – The bank's conduct was not misleading or deceptive BANKING AND FINANCE – GUARANTEE AND INDEMNITY — Australian Securities and Investments Commission Act 2001 (Cth) s 12CB – Whether the manner in which the bank obtained and set out to enforce an unqualified, unconditional and irrevocable guarantee constituted unconscionable conduct in all the circumstances – Where both sides to negotiations were sophisticated and experienced and representative for the guarantor engaged in drafting of facility agreement – Where guarantor's inattention to terms of guarantee the result of indifference – Where guarantor's decision not to engage lawyers considered to be a choice based on self-confidence – The bank's conduct unconscionable within the meaning of s 12CB ESTOPPEL — Estoppel by representation — Whether the bank is estopped from denying that the guarantee contained in the parties' facility agreement was qualified in the manner set out in term sheets and sanction letters —Estoppel not made out CONTRACTS — GUARANTEE AND INDEMNITY — Formation — Variation — Whether the parties' facility agreement was subsequently varied by way of the provision of a final sanction letter — No variation Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA(7)(k), 12BAB(1)(b), 12BAB(7)(b), 12CB, 12CC, 12DA, 12GF, 12GM, 12GF(1B) Australian Securities and Investments Commission Regulations 2001 (Cth) reg 2B(1)(h) Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law) s 18 Trade Practices Act 1974 (Cth) s 52 Cases Cited: ACCC v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 252 ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640 Amaya v Everest Property Holdings Pty Ltd (2010) 15 BPR 28,695 APS Satellite Pty Ltd (formerly known as "Skymesh" Pty Ltd") v Ipstar Australia Pty Ltd [2016] NSWSC 1898 Argy v Blunts & Lane Cove Real Estate Pty Limited (1990) 26 FCR 112 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51 Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 93 ALJR 743 Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 Byron Shire Council v Vaughan [2002] NSWCA 158 CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd (2005) ATPR 42-042 Commonwealth Bank of Australia v Thompson [2013] NSWSC 149 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Elitegold Ltd v Australia Fair Shopping Centres Pty Ltd (unreported, Federal Court of Australia, 28 October 1994, Hill J) Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 Fabcot Pty Ltd v Port Macquarie-Hastings Council [2011] NSWCA 167 Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 Gould v Vaggelas (1985) 157 CLR 215 GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23 Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440 Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 Kimberley NZI Finance Ltd v Torero Pty Ltd [1989] ATPR (Digest) 53,193 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 National Australia Bank Limited v Smith [2014] NSWSC 1605 Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd (2011) 248 FLR 193 Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446 Sidhu v Van Dyke (2014) 251 CLR 505 Sutton v A J Thompson Pty Ltd (in liq) [1987] ATPR 40-789 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 Thompson v Palmer (1933) 49 CLR 507 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Westpac Banking Corporation v Lee [2013] NSWCA 375 Winter Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97 Texts Cited: n/a Category: Principal judgment Parties: Axis Bank Ltd (plaintiff) Gujarat NRE India Pty Ltd (defendant) Representation: Counsel: C Withers SC, N Riordan (plaintiff) D Pritchard SC, A Macauley (defendant)