Aneve Pty Ltd & Ors v. Bank of Western Australia Ltd [2004] NSWSC 640

New South Wales Supreme Court

CITATION : Aneve Pty Ltd & Ors v. Bank of Western Australia Ltd [2004] NSWSC 640 HEARING DATE(S) : 27 to 29 April and 4 May, 2004 JUDGMENT DATE : 20 July 2004 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Judgment for Defendant on Plaintiff's Statement of Claim; judgment for Defendant/ Cross Claimant on Cross Claim.

CATCHWORDS : TRADE PRACTICES - MISLEADING AND DECEPTIVE CONDUCT - Whether alleged misrepresentations made by Defendant to Plaintiffs - whether Plaintiffs relied upon anything said - issues solely of credit. LEGISLATION CITED : Trade Practices Act 1974 (Cth) - s.51AA, s.52, s.87 - Briginshaw v Briginshaw (1930) 60 CLR 336 CASES CITED : - Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 - Rhesa Shipping Co SA v Edmunds [1985] 2 All ER 712 - Timms v Commonwealth Bank of Australia [2004] NSWSC 76 Aneve Pty Limited - First Plaintiff PARTIES : Aniello Iannuzzi - Second Plaintiff Paraskevi Iannuzzi - Third Plaintiff Bank of Western Australia Limited - Defendant FILE NUMBER(S) : SC 1063/03 COUNSEL : B.M.J. Toomey QC, A.G. Diethelm - Plaintiffs B. McClintock SC, R. Brender - Defendant SOLICITORS : R.F. Bergagnin & Co - Plaintiffs Blake Dawson Waldron - Defendant

Introduction and issues

1 The Second Plaintiff, Dr Aniello Iannuzzi and the Third Plaintiff, his wife, Dr Paraskevi Iannuzzi, are the sole directors of the First Plaintiff ("Aneve"), which is a family trust company. To avoid confusion, I will adopt the course taken by Counsel for the parties and will refer hereafter to the Second Plaintiff as "Dr Iannuzzi" and to the Third Plaintiff as "Dr Tsironis", which is her maiden name. 2 By instrument dated 21 January 2002, Aneve guaranteed to the Defendant ("BankWest") repayment by Barrington Estates Ltd ("Barrington") of an advance of $1M ("the Guarantee and Indemnity"). The Guarantee and Indemnity was supported by a Performance Bond, originally dated 4 March 2002 but now replaced by another bond dated 28 January 2003, issued by St George Bank Limited ("St George") whereunder St George undertook to pay to BankWest upon demand a sum of up to $1M ("the Performance Bond"). The Performance Bond in turn was supported by an instrument dated 28 February 2002 whereby Drs Iannuzzi and Tsironis guaranteed to St George the repayment of all monies payable to it by Aneve ("the St George Guarantee"). The St George Guarantee was supported by securities over four pieces of real estate owned by Dr Iannuzzi, a company controlled by him and Dr Tsironis' parents ("the Securities"). I will refer to the Guarantee and Indemnity, the Performance Bond, the St George Guarantee and the Securities collectively as the "Transaction Documents". 3 The Plaintiffs allege that execution of the Transaction Documents was procured by conduct on the part of BankWest which was misleading or deceptive or unconscionable, in contravention of s.52 and s.51AA Trade Practices Act 1974 (Cth) (" TPA "). They seek declarations to that effect. Aneve seeks an order under s.87 TPA declaring the Guarantee and Indemnity to be void and to have been void ab initio. The Plaintiffs further seek an order that BankWest be permanently restrained from making any demand on St George under the Performance Bond. BankWest, by its Cross Claim, seeks a declaration that it is entitled to make demand under the Performance Bond and it seeks damages in accordance with the usual undertaking as to damages given to the Court by the Plaintiffs on 10 January 2003. 4 The case turns upon issues of credit. Drs Iannuzzi and Tsironis say that certain oral representations were made to them by Mr David Lennon, a director of BankWest, on two occasions in December 2001. The first occasion was a telephone conversation between Dr Iannuzzi and Mr Lennon on 22 December 2001, in which Mr Gary Blom, Managing Director of Barrington, also participated. The second occasion was a meeting between Mr Lennon and his wife and Drs Iannuzzi and Tsironis at the latters' holiday house at Blue Bay on 29 December 2001. 5 Drs Iannuzzi and Tsironis say that they relied upon the representations made by Mr Lennon in those meetings in deciding that Aneve would enter into the Guarantee and Indemnity. The Plaintiffs say that the representations were false, or misleading or deceptive, and in respect of those representations which are as to future matters, they say that there was no reasonable ground upon which the representations could have been made. In addition, they say that the making of the representations was unconscionable. 6 BankWest denies that: