ANZ Banking Group Limited v Ciavarella and 3 Ors

ANZ Banking Group Limited (the Bank) appealed a decision of the Supreme Court of New South Wales concerning an informal contractual agreement relating to mortgages held by the respondents, the Ciavarellas. The dispute centred on whether the Bank was bound by this informal agreement and whether it had breached that agreement by demanding repayment of the mortgaged sums.

The primary legal issues before the Court of Appeal were whether correspondence between the Bank and the mortgagors constituted a binding informal contractual agreement, whether the Bank's acceptance of this agreement was conditional, and if so, whether the Bank had breached the agreement by demanding repayment. A further issue was whether formal mortgages could be varied by such informal documentation.

The Court of Appeal, comprising Santow and Tobias JJA and Young CJ in Eq, found that the correspondence did indeed form a binding informal contractual agreement. The Court reasoned that the Bank's conduct indicated an unconditional acceptance of the terms proposed by the mortgagors, thereby creating a binding agreement that varied the terms of the formal mortgages. The Bank's subsequent demand for repayment was therefore a breach of this informal agreement.

The appeal was dismissed, and the Bank was ordered to pay the respondents' costs on the appeal.