Cunningham v Westpac Banking Corporation Limited

Link copied
Case Copied 41 min read

FEDERAL COURT OF AUSTRALIA

Cunningham v Westpac Banking Corporation Limited [2012] FCA 1088

Citation: Cunningham v Westpac Banking Corporation Limited [2012] FCA 1088
Parties: PAUL BRENTON CUNNINGHAM v WESTPAC BANKING CORPORATION LIMITED, JOHN RICHARD PARK, MARK FRANCIS XAVIER MENTHA, TRACEY LEE CUNNINGHAM, DINE-RITE PTY LTD, PCTC INVESTMENTS PTY LTD and BURANDA PROPERTIES PTY LIMITED (RECEIVERS & MANAGERS APPOINTED)
File number: QUD 657 of 2011
Judge: REEVES J
Date of judgment: 5 October 2012
Catchwords: TRADE PRACTICES – s 52 Trade Practices Act 1974 (Cth) – representations in letter between lawyers negotiating compromise of proceedings – claims the representations misleadingly described an agreement as a final agreement for sale and caused a litigant to enter into a settlement deed and consent to orders to end proceedings – characterisation of the representations as misleading or deceptive requires consideration of the contents of the letter as a whole against all of the relevant circumstances surrounding its preparation and despatch – objectively assessed representations not misleading or deceptive – applicant required to show greater benefits or lesser detriments would have been incurred had settlement deed not been entered into – applicant claiming personal loss as beneficiary of a trust – no evidence of loss or detriment
Held:  application dismissed
Legislation: Environmental Protection Act 1994 (Qld)
Trade Practices Act 1974 (Cth)
Cases cited: Buranda Properties Pty Ltd (Receivers and Managers Appointed) v Buranda Properties Pty Ltd as t’ee [2010] QSC 357
Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4
DJL v The Central Authority (2000) 201 CLR 226; [2000] HCA 17
I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Limited (2002) 210 CLR 109; [2002] HCA 41
Marks v GIO Australia Holdings (1998) 196 CLR 494
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Yevad Products Pty Ltd v Brookfield (2005) 147 FCR 282; [2005] FCAFC 263
Date of hearing: 9, 10 and 11 July 2012
Place: Brisbane
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 58
Counsel for the Applicant: Mr J Lee
Solicitor for the Applicant: Wright Law
Solicitor for the First, Second and Third Respondents: Mr D Savage SC with Mr E Goodwin
Solicitor for the First, Second and Third Respondents: King & Wood Mallesons
Counsel for the Fourth Respondent: The Fourth Respondent did not appear
Counsel for the Fifth Respondent: The Fifth Respondent did not appear
Counsel for the Sixth Respondent: The Sixth Respondent did not appear
Counsel for the Seventh Respondent: The Seventh Respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION

QUD 657 of 2011
BETWEEN:

PAUL BRENTON CUNNINGHAM
Applicant
AND:

WESTPAC BANKING CORPORATION LIMITED
First Respondent

JOHN RICHARD PARK
Second Respondent

MARK FRANCIS XAVIER MENTHA
Third Respondent

TRACEY LEE CUNNINGHAM
Fourth Respondent

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Cunningham v Westpac Banking Corporation Limited and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2012] FCA 1088
Decision Date

CaseChat Overview and Summary

The case of Cunningham v Westpac Banking Corporation Limited involved Mr. Cunningham, a beneficiary of the Cunningham Property Trust, and Westpac Banking Corporation Limited. The dispute centred on whether Westpac's representations in a letter between lawyers negotiating a compromise were misleading or deceptive, thus inducing Mr. Cunningham and Buranda to enter into a settlement deed and consent to orders ending the proceedings. The Federal Court of Australia was tasked with determining the nature of the representations and their impact on the parties.

The court needed to decide whether the representations were misleading or deceptive under Section 52 of the Trade Practices Act 1974. This required an objective assessment of the representations in the context of the letter's contents and the circumstances surrounding its preparation and dispatch. Additionally, the court had to consider whether Mr. Cunningham could claim personal loss as a beneficiary of the trust, and if so, whether there was evidence of such loss or detriment.

The court found that the representations were not misleading or deceptive when assessed objectively. Furthermore, Mr. Cunningham was required to demonstrate that greater benefits or lesser detriments would have resulted had the settlement deed not been entered into. The court held that Mr. Cunningham failed to show that Buranda would have achieved a better outcome if it had proceeded with the original proceedings, as there was no evidence of Buranda's prospects of success. Additionally, even if Buranda had suffered a detriment, Mr. Cunningham did not demonstrate that this would have affected him personally. Consequently, the court dismissed Mr. Cunningham's application.

ORDERS:
1. The originating application filed 20 December 2011 be dismissed.

Orders

Orders of the court

1. The originating application filed 20 December 2011 be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Assuming for the purposes of this issue (as Mr Lee has above) that Buranda and the Cunninghams were induced to enter into the settlement deed by Westpac’s misleading or deceptive conduct, there is any number of reasons why neither Mr Cunningham’s case as pleaded in para 17 (above), nor his counsel’s submission can be accepted on this damages issue. They include the following:(a)As the orders of Dowsett J have long since been entered and perfected, the circumstances in which those orders could be set aside, such that the Original Proceedings could “be restored to the list and recommenced”, are extremely limited: see DJL v The Central Authority (2000) 201 CLR 226; [2000] HCA 17 and Yevad Products Pty Ltd v Brookfield (2005) 147 FCR 282; [2005] FCAFC 263 at [22]–[33]. Nothing has been put before the Court which would demonstrate that this is one of those rare cases where those final orders of Dowsett J could be set aside. It is self-evident that unless those orders are set aside, Mr Cunningham cannot be put back in the position either he, or Buranda, was in before executing the settlement deed. Moreover, in that event, it will not avail Mr Cunningham to set aside the settlement deed.(b)In any event, even if the orders of Dowsett J were set aside, putting aside for the moment Mr Cunningham’s personal position (see at (c) below), to obtain the relief he seeks, Mr Cunningham would have to show that Buranda would have achieved a greater benefit or suffered a lesser detriment if it had not entered into the settlement deed: see Marks v GIO Australia Holdings (1998) 196 CLR 494 at [48] per McHugh, Hayne and Callinan JJ. To do that, Mr Cunningham would effectively have to show that Buranda would have achieved a better outcome if it had proceeded with the Original Proceedings. In practical terms, this means he would have to show that Buranda had reasonable prospects of succeeding in those proceedings. Given the state of the evidence in these proceedings, I consider he has no prospects of doing that. That is so because there is no evidence before this Court to establish what Buranda’s prospects of succeeding in those proceedings were. If anything, the evidence is contraindicative of success. The only part of Mr Cunningham’s evidence-in-chief that was specifically directed to this issue was the following:Did you consider that there was any risk of loss in the proceedings commenced by Buranda in the Federal Court?---YesThis rather curious response was not further explored by Mr Cunningham’s counsel. Nor did he call any other evidence on the issue. On the other hand, Westpac adduced evidence that Mr Cunningham was advised by Mr Stewart and Mr Lazarus that Buranda was very unlikely to succeed in the Original Proceedings. That appears in Mr Lazarus’ filenotes of the conferences held between Mr Cunningham and his legal team before, and during, the trial of the Original Proceedings. It follows from all this that Mr Cunningham has failed to adduce any evidence to show the requisite greater benefits or lesser detriments that would flow to Buranda by pursuing the Original Proceedings.(c)Finally, even if Mr Cunningham were able to succeed in showing that Buranda would have achieved greater benefits or suffered lesser detriments by not entering into the settlement deed and instead pursuing the Original Proceedings, even that would not be sufficient to achieve the relief he seeks. Since he is the only applicant in these proceedings, he would also have to show that the greater benefits or lesser detriments concerned affected him personally. To attempt to do that, he has relied upon his “entitlement to participate as beneficiary in the capital of the [Cunningham Property Trust]” as pleaded in para 17a of the third further amended statement of claim. However, on that aspect, Mr Cunningham has to confront a significant difficulty. That is, his entitlement to participate as a beneficiary in the capital of the Cunningham Property Trust is subject to the right of Buranda, as the trustee of the trust, to indemnity out of the trust estate for, among other things, the obligations it has incurred to Westpac: see Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4 at [47]–[49] per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ. On that issue, it is an agreed fact in these proceedings that Buranda remains in notional default under the BF Agreement and the Variation Agreement and, if the settlement deed were to be set aside and that default reactivated, the default interest rate under the BF Agreement and the Variation Agreement would result in a current liability for Buranda in excess of $42,000,000. As against this liability, there is no evidence before this Court as to the present value of the Woolloongabba Land, or of the prospects of selling it in the current market. However, it can be readily inferred that its present market value must be less than the sale price of $35,000,000 under the proposed, but unsuccessful, sale to Phoenix 8. If that is so, it would necessarily follow that there are insufficient assets in the Cunningham Property Trust to meet the trustee’s indemnity. In other words, even if Mr Cunningham were able to establish that Buranda had suffered a relevant detriment, he has failed to show that that detriment would have affected him personally.CONCLUSION

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.