Bernstrom v National Australia Bank Ltd

Bernstrom (the applicant) sought judicial review of a decision made by the National Australia Bank Ltd (the respondent) to refuse her application for a loan. The application was heard by Callinan J in chambers.

The primary legal issue before the court was whether the respondent's decision to refuse the loan was vitiated by a breach of the respondent's duty of care to the applicant. The applicant contended that the bank owed her a duty to advise her properly regarding the loan application and that this duty was breached by the bank's refusal.

Callinan J found that a bank's duty of care to a customer in relation to a loan application does not extend to advising the customer on the wisdom of the loan or the applicant's capacity to repay it. The court held that the bank's role is to assess the application based on its own commercial interests and risk assessment, not to act as a financial advisor to the applicant. The applicant's claim was therefore dismissed.