Brunker, R.W. v Westpac Banking Corporation

[1986] FCA 423

LIMITED D I S T R I B U T I O N

IN THE: FETJEPFLL COTTRT OF ?-rJSTR>LIA

BFlTwEElJ :

FAYMOIJI? WTLLIAM RRTTNKER

Applicant

m:

WESTPAC BANKING CORFORATION

Respondent

MINUTE OF ORDER

FOX J.

11 SEFTEMBEF 198fi

BFTWEEN :

RAYMOND WILLTI?M BWNIIER

App l i can t

C m : FOX J.

I?=: 11 SEPTEMBER 1986

2.

arbitration then takina place between the company of which he was

a director and another party'.

The costs of the arbitration were likely to be hiuh and

there was apparently a considerable amount in issue. In fact.

the €orm of uuarantee as It appears in the document relates to

the whole indebtedness of the company and makes no separate

mention of the costs of the arbitration.

The company had done business with the bank for some

time. and had from time to time run into overdraft. The bank

held security. but on the liquidation of the company after the

auarantee was sianed it proved inadequate, leading to the bank

taking action in the District Court under the Tuarantee aaainst

the present applicant. Those proceedinus have been stood over

and the parties have asked that if I find auainst the applicant I

should make an order for payment of an amount (beina in fact

laroer than that sought In the Dlstrict Court).	so chat further
recourse to that Court will be unnecessary.

The case for the appllcant is that he went to the bank

nn 12 June 1981 to slrrn a form of auarantee. He asked for th?

manaaer but was cold he vas 0117;. and he saw another bank nfflcer

r.7hom he 1 s \Inable to identifv by name, but cf wnom he had cllven 9

verv ueneral description. He says that the officer sald word5 T'T

the effect that the applicant had rome to sirrn a quarance? r .7

rover r;he costs of the arblcraclon and that he chen 5laned.

3 .

He says that hls sirnature was not then witnessed but he

dld notlce that the document had already been siuned bv a

co-director. This co-director was not called but I understand It

to be acrreed that I should draw no inference from that fact.

Weverthelrss, the fact that there was no	evidence from hlm does
not assist in the resolutlon of the case.

The case for the respondent as well as refutinu that of

the applicant is that the document was signed by both directors.

probably at separate times, but in the presence of the manaqer.

who witnessed the signatures. Nothing was said about the

guarantee beinq limited in operation. The manaqer explains that

it was common practice, where loans were or miqht miaht be made

to proprietary companies to obtain quarantees from the directors,

as well as securitv over property, and he took the view that in

the case	of	the applicant's company it was time that this was
done.

Some comment has been made as to why the manauer should

select this particular tlme to require the cruarantee. but I thlnk

that that consideration does not really	help in one direction Or
the other.

A feature of the case is that the aruummts are not

necessarilv In conflict. The uuarantee could be criven effect

althouuh the occaslon for entermu Into it was the arbltratlon

hearmu. The arbitratlon had In fact contlnued for some tlme:

4 .

the costs were hioh and there was the risk of loslno it.

The applicant says that it was not simply the occasion.

h u t was the purpose and beinu the purpose it should be understood

That the conduct of the bank officer was deceptive. or

mlsleadlnu. I recoun1se. of course, that misleading conduct can

be unlntentlonal.

The applicant's evidence on the subject is weak, at

least as he uave it orally. and on cross-examination upon his

affidavit. It seems to me unlikely that an experienced business

man. as he was, would put his name to a marantee which obviously

did not contain the limitation upon which he relies, upon the

fairly casual words of a bank officer, apparently junior to the

manaaer and not primarily concerned with the transaction.

It is not said by the applicant that he was taken

throuuh the quarantee or that anyone sald to him words

substantially to the effect that the rruarantee, althouoh I n

rreneral terms, was to be regarded as limited. The bank officer.

as I said. cannot now be identified. It seems to me quite

posslble that ar: some scaue when the auarantee was beinn prepared

or ulven that some reference was made to the r o s t s of the

arbitration and the applicant map have believed that	It was r.he
need to Snsure that the costs would be met which made the

nuarancee necessary. As I have already sald. thls is a different

matter. The conduct musr: have related to the amblt of the

.

RI.- document I s not itself challenued. apart. that 1s.

f r m the clalm under 5 . 5 2 of the Act. The bank manauer has rriven

-.--i,.i..-nc=. that 1: ;-as ;Icmed i n hls presence: It certalnl'y bears

hls slanatures. and he was certainly the person m the bank

t-osponslble f o r havlnq the rruarantse xecuted. It 1 s not

ruuuested that he proposed or authorlsed the limitation In

auestlon. Some criticism has been made of the evldence of the

bank manauer. partlcularly the fact that in his first affidavit

he did not refer precisely to the fact that he had witnessed the

sianatures or deny that at the tlme of execution no statement

such as that now relied upon was made. This I think 1 s a

significant matter and I must say that I was not entirely

satisfied with the evidence of the bank manaqer, or at least the

wav he nave it.

However. apart from oth?r matters there is in Pmdence

part of the bank dlary	for the relevant dates and the dlarv	.=ntrv
€or the 15th says. and	I quote:

"TJpon psecutinn bv quai-antors I ,T. 4. Hanna and

R.W.Srunkerl on 13.6.Rl. I fully explained t n c l ~

Llabillty 57hhi:h C ~ P V appeared to understand."

t

ca5e now made by the applicant.

The uuarantee document stands unqualified and ~n mv vie3

it zculd reaulre some falrlv precise or couent evidence before

one would acrept that I t was meant to be llmlted In the way

mentioned. In my opinion therefore	the application falls and
shouid be dismissed with costs.

Now, thls other matter of the District Court iudqment or

the amount of the ludqment. What 1 s the amount of that now? You

showed me a document. did vou. with the current amount in it?

MR OAKES:	It is annexed to the affidavit of Mr Ramsay of 11 September.
HIS HONOUR:	Yes. that is $66,171.68. 1s it?
M R OAXES:	Yes.
H I S HONOUR:	Well. I understand this to be correct: In
accordance wlth the wlshes of the parties. I will
Drder the applicant to pap the respondent within
21 days the amount of $66.171.68 bv way of
damaues. 1 suppose they are really liquidated
damau-es. 1 do not know whether 5.82 extends EO
ilnuldated damaues bur: the order 1 5 a rcmmmon law one which denends nn r ne suppiemental
lur~sldlctlcn of th? Court , If r k r vrr3t my!
y+Tanr: me to do 1 wlll ~ l c ~ It. Aii k-~crht. 15 j.her+
anvr;hlnrr cise3

t

7 .

MR O.UES: No. your Honour.

HIS HONOUR: W111 vou adlourn the Court please?

MR OAKES: Excuse me, your Honour, could we have the return

of exhibits please?

HIS t i O N O L i i : Is there any objectlon?

M R LIDDEN: No, your Honour.

HIS HONOUR: Yes. the exhibits may be returned.