RAHME v COMMONWEALTH BANK OF AUSTRALIA [1991] NSWCA 230

RAHME v COMMONWEALTH BANK OF AUSTRALIA

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, MEAGHER JJA and Hope AJA 3 December 1991, 20 December 1991

[1991] NSWCA 230

"ANSHUN" TYPE PRECLUSION — customer of bank makes a claim for damages and other relief against bank (and others) suffered because of changes in exchange rate in connection with foreign currency borrowings through bank — claim brought in Federal Court alleging a number of causes of action — lengthy evidence given dealing with course of events between customer and bank — customer's claim dismissed — appeal to Full Federal Court dismissed — special leave to appeal to High Court granted limited to a point not relevant to present proceedings — customer then commences proceedings in Supreme Court for relief against bank in regard to securities given in connection with foreign currency borrowings — proceedings based on two causes of action not relied on as such in Federal Court proceedings — in Supreme Court at first instance customer held precluded from bringing claim because circumstances fall within rule in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 — on appeal, customer claims rule does not apply — facts and causes of action considered — held, appeal fails. ORDERS 1. Appeal dismissed. 2. Respondent's costs to be borne by appellants.

Priestley JA Background to appeal in 1990 Supreme Court Proceedings.

Events leading to 1988 Federal Court proceedings. Mr Rahme was a builder. He and his wife ("the appellants") worked together in a building business which they conducted, at least in part, through companies they controlled.

In 1984, the appellants needed finance for purposes of their business. They banked at the Dee Why branch of the Commonwealth Bank ("the Bank") and spoke there to the manager, Mr Craig, about raising finance. Mr Craig mentioned the possibility of getting a foreign loan at lower interest rates than then available for borrowing in Australia. Mr Rahme said his accountant was not familiar with foreign currency loans. Mr Craig mentioned the names of three accountants who he thought were knowledgeable in this area. Mr Rahme chose one who practised locally. This was Mr Morgan who was subsequently employed by the appellants in their dealings with the Bank in obtaining loans in foreign currency and the transactions that afterwards took place in dealing with the loans. There were two main loan transactions, one in 1984 and the other in 1985. The 1984 transaction was with one of the associated companies, the 1985 transaction with another. A guarantee which the appellants had given to the Bank in 1983, with a mortgage of land as supporting security, was agreed to be used as part of the security for the 1984 loan transaction. Another guarantee, with a mortgage of other land as supporting security, was given to the Bank by the appellants in 1985 as part of the security for the 1985 loan transaction.