Gardiner v National Australia Bank Ltd; National Australia Bank Ltd v Gardiner [2023] NSWSC 45

Supreme Court New South Wales

Medium Neutral Citation: Gardiner v National Australia Bank Ltd; National Australia Bank Ltd v Gardiner [2023] NSWSC 45 Hearing dates: 18 - 20, 24 - 26 October 2022, last submissions 28 October 2022 Date of orders: 8 February 2023 Decision date: 08 February 2023 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Summons dismissed with costs; judgment for cross claimant in amount of $12,775,622, with orders for possession. Catchwords: BANKING – customer operates petrol stations – customer financially strained – customer referred to bank's specialist unit to 'turnaround' stressed business customers – specialist unit works with customer for two years – bank presses customer to sell investment properties and paydown debt – customer seeks to expand and obtain additional finance – bank prevails – customer ultimately wound up by ATO and deregistered – bank writes off $3m owed – proceedings commenced 10 years later by guarantors for $56m in damages – time-barred claim of deregistered company brought by others – claims under legislation which did not then exist – claims inconsistent with surviving contemporaneous records – claims devoid of evidence in key areas – bank prompted by claim to file cross-claim to enforce remaining security – bank entitled to judgment. NATIONAL CREDIT CODE – "carried over instrument" – Consumer Credit Code – mortgages – meaning of "related guarantee" – guarantee must be related to credit contract: see [88]-[93]. LIMITATION OF ACTIONS - time for commencement of proceedings – Limitation Act 1969 (NSW) – deceit and contract claims – confirmation under s54 – any confirmation was after expiry –fraudulent concealment under s55 – not established – claims time barred. CODE OF BANKING PRACTICE – 'small business' – customer was not a small business – alleged breach of obligation not imposed until after relevant events – breaches not established. CORPORATIONS – application for reinstatement –not "just" to resurrect a company when its claims time barred and without merit. Legislation Cited: Consumer Credit (New South Wales) Act 1995 (NSW), s 5 Contracts Review Act 1980 (NSW), ss 7(1), 16(a), 16(b) Evidence Act 1995 (NSW), s 63 Limitation Act 1969 (NSW), ss 54(1), 55(1)(b), 14(1), 14(1)(b) Australian Securities and Investments Commission Act 2001 (Cth), ss 12GF(2), 12GM(1) Australian Constitution, s 109 Corporations Act 2001 (Cth), s 601AD(2), 601AH(2), 601AH(3) Judiciary Act 1903 (Cth), s 79(1) National Consumer Credit Protection Act 2009 (Cth), sch 1 National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth) sch 1 item 3(1), s 4 Trade Practices Act 1974 (Cth), s 87 Consumer Credit (Queensland) Act 1994 (Qld) Code of Banking Practice cls 2.2, 25.1, 25.2, 28.9 Consumer Credit Code, ss 5, 6, 8(1), 8(2), 9 National Credit Code, ss 76, 80 Uniform Civil Procedure Rules 2005 (NSW), r 5.3 Cases Cited: Apand Pty Limited v The Kettle Chip Co (1994) 52 FCR 474 Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232; [2000] NSWSC 316 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 Australian Executor Trustees (SA) Ltd v Kerr (2021) 151 ACSR 204; [2021] NSWCA 5 Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 Ballard v Multiplex [2012] NSWSC 426 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 Carr v Miller [2018] NSWSC 1424 Chalker v Clark [2008] VSCA 92 Chappel v Hart (1998) 195 CLR 232; 156 ALR 517; [1998] HCA 55 Dinh v Commonwealth Bank of Australia [2021] WASCA 127 Doggett v Commonwealth Bank of Australia (2015) 47 VR 302 Dorfler v ANZ Banking Group Ltd (1991) 103 ALR 699 Eckford v Six Mile Creek Pty Ltd (No 2) [2019] FCA 1307 Fabre v Arenales (1992) 15 MVR 303; (1992) 27 NSWLR 437 Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 Gooley v NSW Rural Assistance Authority [2020] NSWCA 156 Gould v Johnson (1702) 2 Salk 422; 91 ER 367 Hudson v National Australia Bank Limited [2022] FCA 1222 In the matter of Austral Bronze Pty Limited (No 2) [2020] NSWSC 1633 Jones v Dunkel (1959) 101 CLR 298 at 320-321; [1959] HCA 8 Magill v Magill [2006] HCA 51; 226 CLR 551 Mayne Nickless Ltd v Multigroup Distribution Services Pty Ltd [2001] FCA 1620; (2001) 114 FCR 108 Morley v Australian Securities and Investments Commission [2010] NSWCA 331; (2010) 274 ALR 205 Neal v Ambulance Service (NSW) [2008] NSWCA 346 Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35; 309 ALR 249 Payne v Parker [1976] 1 NSWLR 191 Pilarinos v Australian Securities and Investments Commission (2006) 24 ACLC 775; [2006] VSC 301 Re European Metal Recyclers Pty Ltd (in liquidation) (deregistered) [2018] NSWSC 946 Reilly v Australia and New Zealand Banking Group Ltd (No 2) [2020] FCA 1502 Rizeq v Western Australia [2017] HCA 23; (2017) 262 CLR 1 Rosenberg v Percival (2001) 205 CLR 434; 178 ALR 577; [2001] HCA 18 Sent v Jet Corporation of Australia Pty Ltd (1986) 160 CLR 540 Shannon v Permanent Custodians Ltd [2020] WASCA 198 Sims v Commonwealth of Australia [2022] NSWCA 194 Stage Club Ltd v Millers Hotels Pty Ltd (1981) 150 CLR 535 Ta Lee Investment Pty Limited v Antonios (2019) 19 BPR 39153; [2019] NSWCA 24 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Watson v Foxman (1995) 49 NSWLR 315 Category: Principal judgment Parties: Bradford Gardiner (First Plaintiff/Cross-Defendant) Stacey Gardiner (Second Plaintiff/Cross-Defendant) Newport Resources (NSW) Pty Ltd as trustee of the Gardiner Family Trust (Third Plaintiff) National Australia Bank (Defendant/Cross-Claimant) Representation: Counsel: Mr PE King / Ms EJ Rusiti (Plaintiffs/Cross-Defendants) Mr JC Giles SC / Ms H Mann (Defendant/Cross-Claimant)