D & G Mazzone & Sons Pty Ltd v State Bank of New South Wales Ltd

[1991] FCA 567

i ~"DGMENT NO. %--... 7 1%

Y '

FOR X / M I T E A D / ~ ~ ~ I B U T I O M -

IN THE FEDERAL COURT OF AUSTRALIA	)
1

NEW SOU	TH WALES DISTRICT REGISTRY	)	No. G130 of 1991
)

GENERAL DIVISION 1

BETWEEN:	D & G MAZZONE AND SONS PTY LIMITED AND DOMENIC AND GUISEPPINA MAZZONE
Applicants

AND	STATE BANK OF NEW SOUTH WALES LIMITED
First respondent
QIFT HOLDINGS PTY LIMITED tradina as L J HOOKER FORSTER
Second respondent

M A - : Beaumont J.

U:  13 September 1991

EX TEMPORE REASONS FOR JUDGMENT

(On the issue of liability)

By their amended statement of claim, the applicants, D & G Mazzone and Sons Pty Limited, Domenic and Guiseppina Mazzone, claim that, by reason of certain alleged conduct of (1) the first respondent, the State Bank of New South Wales Limited ( "the Bank" ) , and ( 2 ) the second respondent, Qift Holdings Pty Limited (trading as L J Hooker, Forster) ("the agents"), the applicants suffered certain loss and damage. The\ applicants claim that, in the case of the Bank, this is

or unconscionable conduct, and as a breach of contract. In the	case of the agents, the applicants claim the conduct to be
actionable under s.52 of the Trade Practices Act 1974 as misleading.
The parties have agreed that, at this stage, the issue of liability should be dealt with, including any issue of reliance, and that the trial of the issue of the measure of damages, if any, be deferred until later.
Although the claims pleaded arise out of the same set of circumstances, they are in fact and in law distinct, and it will be convenient now to describe them separately.
The claim leaded aaainst the Bank

actionable under the Fair Tradina Act 1987 (NSW) as misleading

The claim against the Bank is pleaded by the

applicants as follows:

On 21 March 1989, the applicants approached the Bank

with an application to borrow monies to enable them to

motel and residence. At this time, the Bank held security by	complete the purchase of a property at Forster, comprising a
way of mortgage over the properties of the second and third applicants, Mr. and Mrs. Mazzone, at Bass Hill and Forster to secure advances by the Bank to the first applicant, D. & G. Mazzone and Sons Pty. Limited, the family company of the second and third applicants. By reason of matters communicated by the applicants to Mr. Pryce, manager of the Bank's Chester Hill branch, the Bank knew that, if the applicants believed the transaction of purchase could be completed by them, they would borrow from the Bank funds to enable them to pay the deposit on the purchase and stamp duty on the contract; sell their existing business; and otherwise take irrevocable steps affecting their financial position. On 21 April 1989 the Bank represented to the applicants that it had approved a loan of $800,000 to the first applicant for the purchase of the motel. The representation was made when Mr. Pryce informed the second applicant, on behalf of the first applicant, that a cheque for $80,000, being a ten per centum deposit on a $800,000 purchase price for which a loan had been sought, could be drawn by the first applicant for the exchange of contracts for purchase, no other facility then being in existence that would support the drawing of the cheque in that sum. In the alternative, it is said that Mr. Pryce represented to the applicants that while formal approval of the loan to complete the purchase of the property would have to be obtained, such approval would be forthcoming and the
purchase and pay a deposit and pay stamp duties on the first applicant could and should exchange contracts for the
contract (which sums totalled $111,490, of which the sum of $75,681.17 was advanced to the first applicant by the Bank) and be secured under the existing mortgages. Acting in reliance on the representations of the Bank, the first applicant exchanged contracts; paid a deposit; paid stamp duty; and sold its business and otherwise irrevocably committed itself to the purchase, yet the Bank did not in fact advance monies to the first applicant to complete the contract so that contract was forfeited and the deposit lost and purchase cancelled. At the time the representations were made, the Bank did not intend to lend to the applicants the amount of the purchase price and, in fact, was undecided as to whether to do so or not. This was misleading and unconscionable conduct; it also constituted a breach of contract.
The claim vleaded aaainst the aaents

The claim against the agents is pleaded by the

applicants as follows:

In February 1989, the agents, acting as agent for Rynaseven Pty. Limited, offered for sale to the applicants the property at Forster, comprising a motel and residence, at a price of $800,000. In February 1989, the agents, through their agents Glen Longbottom and Adrian Longbottom,

represented to the applicants that unless they signed a
contract quickly they would lose the property to another

purchaser; that there were 10 other purchasers interested in the property; that there were other contracts out on the property and that unless they exchanged quickly, agreeing to pay the price of $800,000, the applicants would lose the opportunity to buy the property; that planning consent had been obtained for the construction of an additional 18 rooms on the premises; and that the property was a desirable property at the price at which it was offered. By these representations, it was further represented to the applicants that the agent had some reasonable basis for the representations. This was misleading. Acting in reliance on each of the representations, the second and third applicants caused the first applicant to exchange contracts without ensuring that its obligations under the contracts were conditional upon satisfactory finance being obtained and without making further enquiries by obtaining valuations or seeking to obtain trading figures; and further caused the first applicant to pay a deposit on the property, pay stamp duty on the contract and sell its business and otherwise irrevocably commit itself to the purchase.

The case souaht to be made bv the a~plicants aaainst both

res~ondents at the trial

The second applicant was the principal witness called by the applicants. In its essential respects, his evidence was as follows.

In February 1989, the second applicant, who lives in Sydney, spoke with Mr. Glen Longbottom, apparently a director of the agents, in Forster. The second applicant said that he wanted to buy a property. Mr. Longbottom said that he had a motel property "The Lakes Way" motel, for sale. It was to be put to auction. The second applicant, who already knew of the motel, offered $600,000. On his return to Sydney, the second applicant was telephoned by Mr. Adrian Longbottom, another director of the agents, who said that the vendor wanted $800,000. The second applicant said that this was "a little bit too much". Mr. Longbottom telephoned the second applicant again, saying that the vendor still wanted $800,000. Mr. Longbottom said that the motel was "a very good motel" and

that "the value is there, the price . . .$ 800,000 ... it's O.K."

Mr. Longbottom added that 10 other buyers were interested in the motel.

The second applicant then approached Mr. Pryce, the Bank's Chester Hill branch manager, and told him that he wished to borrow $800,000 to buy the motel. Mr. Pryce said: "It's O.K." and asked for the trading figures for the motel. At that stage, the Bank held security over the matrimonial home of the second and third applicants at Bass Hill. They also owned a holiday house at Forster and Mr. Pryce said that this would be required as security also.

The second applicant then telephoned Mr. Adrian Longbottom about the figures for the motel. Mr. Longbottom said that the motel was a good buy at $800,000, that there was good value there, and that the applicants should sign the contract quickly because they had another 10 buyers.

The second applicant had a second meeting with Mr. Pryce at which the second applicant asked Mr. Pryce to "make sure" that the finance was arranged and Mr. Pryce agreed with this. Mr. Pryce again asked for the trading figures for the motel.

The second and third applicants then went to Forster again and obtained some of the figures.

On their return, the second and third applicants met with Mr. Pryce and showed him the figures. Interest rates and repayments were discussed. Mr. Pryce said that the Bank's fee for the "cost of the paperwork" for the loan would be $6,000. The second applicant mentioned that he had a buyer for the applicants' concrete pumping business at a price of $270,000 and that, if he bought the motel, he proposed to sell his home at Bass Hill for around $400,000.

On 28 March 1989, the applicants sold their business
as proposed and the proceeds of sale were used to discharge

the Bank's overdraft, leaving a credit balance in the account

of approximately $37,000.

After this, the second applicant again spoke to Mr. Longbottom who said that the motel was "good because it will make money, a lot of money."

At about this time, the solicitor for the applicants informed the second applicant that a deposit of 10 per cent of the purchase price was needed. The second applicant approached Mr. Pryce and informed him that the applicants needed to sign a cheque for $80,000 for the deposit. Mr. Pryce said that this was "0.K." Subsequently, the second applicant telephoned Mr. Pryce and enquired whether it was in

order to draw a cheque for $80,000. Mr. Pryce agreed.

On 21 April 1989, the first applicant paid the deposit and contracts were exchanged for the sale of the motel. At this time, the second applicant believed that the Bank had agreed to lend $800,000.

Subsequently, the second applicant approached Mr. Pryce and explained that the applicants needed further funds to pay the stamp duty on the contract. Mr. Pryce said that he would "look after" the applicants.

At a meeting held around 10 May 1989, the second

applicant informed Mr. Pryce that settlement of the purchase

was scheduled for 26 May. Mr. Pryce said that the valuation	had not yet been done.
On 15 or 16 May, the second applicant telephoned Mr. Pryce and Mr. Pryce said that the valuation was still unavailable. On 18 May, Mr. Pryce telephoned the second applicant and said that he was sorry, but that he couldn't lend the finance.
The Bank's evidence

The material evidence of Mr. Pryce may be summarised

as follows.

At their first meeting in February or March 1989, the second applicant informed Mr. Pryce that he wanted to purchase a motel at Forster. He said that he was paying

$800,000 for the motel. Mr. Pryce said that the Bank would

need security over the motel and also over the matrimonial home and the holiday house at Forster. . Pryce pointed out that the applicants already owed the Bank in excess of

$200,000 and it would be better if the applicants could repay

all or most of this debt so that the amount to be borrowed was not in excess of the price to be paid for the motel. Mr. Pryce said that the Bank required to sight the trading figures for the motel to see if it was a viable proposition and to confirm that the business could pay for the loan. The second applicant said that he could sell the concrete pumping

business and had a prospective purchaser. Mr. Pryce said that	the figures on the motel were important and that the
applicants would need to get them to the Bank as soon as possible. The second applicant said that he would try to get the figures to the Bank. Mr. Pryce said that a formal application for loan would need to be sent to the Bank's regional office for approval.
In March 1989, at a meeting between Mr. Pryce and the second and third applicants, the second applicant said that he was still interested in the motel. Interest rates were discussed. Mr. Pryce said that the Bank would need trading figures and that the Bank needed to carry out
valuations. Mr. Pryce explained that a formal application for loan would have to be forwarded to the Bank's regional officer for approval as an advance of that size was beyond his delegation and he did not have the power to approve a loan of that size.
In April 1989, the second applicant provided Mr. Pryce with trading figures of a motel at Tuncurry. Mr. Pryce said that these figures might be useful in helping the applicants' case because it was a similar motel in terms of rating and size.

On 19 or 20 April, the second applicant informed Mr.

Pryce that "they are pushing me to go ahead. I need to write

a cheque out for the deposit ... of $80,000". Mr. Pryce asked for the trading figures and the second applicant produced a letter from his solicitors dated 18 April enclosing figures for the motel. Mr. Pryce said that it would take at least four weeks to make a submission to the regional office and to have the valuations carried out. The second applicant said

that "they are pushing me to exchange, I do not want to miss out". Mr. Pryce said that "it is your decision, if you go ahead and issue the cheque I will meet [it]. . .but this does not place any commitment on the Bank to approve the loan."

Mr. Pryce then prepared, and forwarded to the

regional office, an application for approval to proceed to
valuation.

On 10 May, the second applicant informed Mr. Pryce that he then had to pay the stamp duty of about $32,000. Mr. Pryce said that he did not have the results of the valuation and queried whether it was wise to proceed further at that time. The second applicant said that he did not wish to miss out. Mr. Pryce said that if "you issue the cheque it is your decision and I will meet it on presentation, but it will not influence a decision by my regional office on the loan until such time as I have received the valuation8 and resubmitted

your case to the regional office."

On 15 May, Mr. Pryce spoke with the valuer. Mr. Pryce then formed the view that there was insufficient security on the Bank's lending margins.

On 17 May, Mr. Pryce received the Bank's valuation of the motel and the holiday house. The report concluded that, without an updated valuation of the Bass Hill property, there was insufficient security to cover the proposed debt. On 18 May, Mr. Pryce spoke again with the valuer and afterwards telephoned the second applicant, informing the second applicant that he was sorry but that the application would not be approved by the regional office. The second applicant said that "it is a bit late to tell me now..."

The aaents' evidence

The relevant evidence of Mr. Adrian Longbottom is as In February 1989, the second applicant asked Mr. Longbottom for information about the motel, which was not then listed with any agent. Mr. Longbottom spoke to the vendor, who said she would sell for $800,000. Mr. Longbottom passed this on to the second applicant who made an offer of $650,000. The vendor rejected this, Mr. Longbottom informing the second applicant that the vendor would only sell for $800,000. The	follows.
purchase at that price. second applicant then said that he would go ahead with the
During the course of these discussions, Mr. Longbottom said to the second applicant that the motel was a "good buy" for the reasons that "it had good real estate value in just the bricks and mortar, it had position and ...p otential." He informed the second applicant that he "wasn't the only agent that had looked at the property in
terms of [the vendor] wanting to sell." He made no mention of other buyers. He did say that the motel was a "desirable property at the price at which it was offered." Mr. Longbottom informed the second applicant that, once the "instructions" issued, he would have to exchange contracts. He did mention to the second applicant that he was not the only agent involved, but he denied saying to the second applicant that unless he signed a contract quickly, he would lose the property to another purchaser.
onc cl us ions on the claim aaainst the Bank
It is apparent that whichever cause of action is relied on, the claim made against the Bank depends essentially on findings of fact being made in accordance with the evidence given in chief by the second applicant. However, I have come to the conclusion that, in its essentials, the case sought to be made on the evidence by the second applicant of his discussions with Mr Pryce is inherently unlikely to have
occurred in the way that his evidence suggests.
On the second applicant's own evidence, it is clear that the Bank at all times, through Mr Pryce and otherwise, required trading figures. It must have been obvious to all concerned, that these were required in the context of a valuation of the motel premises. It must equally have been obvious to all concerned that a loan in the order of $800,000, on any view a substantial borrowing, could only proceed if the Bank's valuer were of the opinion that the value of the motel was sufficient to justify a borrowing of that scale.
Once that is accepted, the version given by the second applicant that, from the outset, Mr Pryce indicated to him that the loan was, in substance, approved, and that all that remained were mere formalities, cannot be sustained.
It is true that the second applicant, whose native country is Italy, may not have a very good command of the English language. On the other hand, it is the fact that he has managed to carry on business in this country on his own account for many years. Moreover, it was clear to me, having heard his evidence, that the second applicant was able to grasp the essentials of any dialogue occurring in the course of his evidence. I see no reason to make any assumption to the contrary of this in respect of the course of his dealings with Mr Pryce. That is to say, in my opinion, the second
what Mr Pryce was seeking to communicate to him. For material applicant was quite capable of understanding the essence of
present purposes, this meant that the second applicant must have understood that Bank needed a satisfactory valuation before a loan of the size of $800,000 could proceed. It seems to me that this conclusion is the only one open on the facts. The contrary view, expressed in the evidence in chief of the second applicant, is, I think, inherently improbable.

I have, of course, seen Mr Pryce give his evidence.

He impressed me as a person whose evidence was, on the whole,

reliable. It is true that, in one respect, his evidence has been seriously challenged and I will come back to that in a moment. It is also true that it is very difficult to expect any witness, even one who is used to ordering his affairs in a careful way as Mr Pryce appears to be, to recall any evidence at this distance of time, if the issue turns - as it does here - on the terms and details of oral discussions. I would not expect either the second applicant or Mr Pryce to be able now to recall the exact detail of conversations which occurred early in 1989, about 2+ years ago. On the other hand, looking at the matter from Mr Pryce's point of view, this was a transaction which so far as the Bank was concerned, was governed by its own procedures which were relatively straightforward. The borrowing was a substantial one, and it was obvious that a valuation was required by Mr Pryce before he could commit himself. The property was in Forster. Mr

Pryce was in Sydney. Mr Pryce had never even seen the	property and there was no prospect that he would be able to do
so. Mr Pryce and the Bank, in this respect, were clearly dependent upon the expert opinion of a valuer.
It was in this context, as I have already said, that the trading figures were required. It is common ground, on the evidence of both Mr Pryce and the second applicant, that the Bank was calling for these trading figures. To my mind, they are the crucial factor in the equation. Once it is accepted, as I think it must be on the evidence of the second applicant, let alone the evidence of Mr Pryce, that the Bank was calling for these trading figures, the purpose of requiring those figures could only be explained in terms of the need for the Bank to obtain a valuation. We know, of course, that the reason why the transaction did not proceed was that very thing; that is to say, when the expert looked at the property he was of the view that, in his opinion, the security offered could not sustain a borrowing of this significant size.
I have said that in one respect, the evidence of Mr Pryce has been the subject of a serious challenge and there is much force in this challenge which is put eloquently by Mr Cotman. It arises in the context of correspondence between the Bank and the solicitors for the applicants. The solicitors wrote to Mr. Pryce by letter dated 27 April 1989.
The opening sentence of the letter is as follows:

"We act for the abovenamed and understand finance has been approved by your bank to assist our mutual client8 in their purchase. To enable you to prepare mortgage document we advise particulars of title as follows -"

Other matters are then dealt with. It will be seen that the solicitors were apparently under the impression, presumably from instructions received from their clients, that finance had been approved by the Bank. As I have already said, this version of events is inconsistent with the findings of the terms of the discussions which I have made. But in his evidence, Mr Pryce gave a version of a discussion which he alleges he had with Mr Zipkis, the applicants' solicitor, consequentially upon the receipt of this letter. Mr Cotman strongly challenged the credibility of Mr Pryce's evidence in this respect. I see the force of that challenge, but it is unnecessary for me to resolve that particular issue because, even if I were to accept the challenge thrown out by Mr Cotman in this regard, it would not follow that I would make a different finding in respect of the terms of the earlier discussion which took place between M r Pryce and the second applicant. As I have already said, my finding that Mr Pryce did not say anything which could reasonably be interpreted as an unequivocal commitment to lend the money, is based on the inherent improbability of such a commitment being given in the context of the common ground in the evidence of both the second applicant and Mr Pryce that, at all material times, the Bank was calling for trading figures, obviously in the context

of a need to have a valuation. It is on this ground that I	find that Mr Pryce made no commitment, at that stage, or at
any later stage, to lend the sum of $800,000.
I should mention another point that is strongly argued by Mr Cotman on behalf of the applicants. Mr Cotman submits that, because Mr Pryce agreed to grant what on any view was overdraft accommodation in respect of the funds required to meet, first of all, the deposit and later the stamp duty, it should be inferred that this conduct was
similar to the conduct alleged in respect of the principal sum of $800,000 itself. The matter is put in a number of ways. It is said to go to the credibility of Mr Pryce's evidence. It is in the nature of similar fact evidence, as I understand it, and it is said to provide an analogy. In short, it is said that, if it is accepted that Mr Pryce was prepared to authorise accommodation for approximately $80,000, it should be inferred that he was likely to be prepared to commit the Bank to the applicants for $800,000.

I cannot accept this analysis.

In exhibit 1, at page 33, in the submission made by

Mr Pryce in respect of the proposed borrowing of $800,000,

mention is made of the need for temporary accommodation to fund the deposit. Mr Pryce said that the applicant (i.e. the company) -

"is looking to us to initially finance a balance of

deposit plus balance due on settlement."

It is quite clear, therefore, that Mr Pryce was not seeking to withhold anything from his superiors in this connection. It is common ground that Mr Pryce had a delegated authority, to grant accommodation in the form of an advance, as one would expect, in limited amounts. In his case, the authority extended up to a limit of $200,000. This particular accommodation was in an amount in the order of $80,000, well within the limit of $200,000. It seems to me that this transaction, that is to say, the temporary accommodation to permit the funding of the payment of the deposit and the payment of the stamp duties, was a free-standing transaction within Mr Pryce's authority. It had its own existence, its own rationale and, of course, was secured by the mortgages already held by the Bank which extended to any advance made to the first applicant.

For those reasons, I am of the opinion that, with the exception of the alleged conversation with Mr Zipkis, the version of events given by Mr Pryce is substantially accurate and I so find.

Given that finding, it must follow, in my view, that
none of the causes of action alleged, whether under the

statute, or in contract, are made out. There was nothing

misleading said by Mr Pryce; there was nothing unconscionable	in what he did; and there was no contract in respect of the
sum of $800,000. Rather, there was an agreement to provide temporary accommodation in respect of the limited funds required for the deposit and the stamp duty. In fact, that particular agreement was performed and these funds were provided. There was a separate application for a much larger amount in the sum of $800,000 which proceeded on the footing that it was subject to an express understanding that a loan of $800,000 would only be made if a satisfactory valuation of the motel were forthcoming. In fact, no such valuation was forthcoming. The valuation given was to the contrary effect.
I should add that, at various points in the evidence of the second applicant, reference was made to statements alleged to have been made by Mr Pryce to the effect that at one point of time Mr Pryce said "it" was "okay", or that he would "look after" the applicants. According to the version given to the second applicant, this was interpreted as an absolute commitment by Mr Pryce, on behalf of the Bank, to advance the sum of $800,000. It seems to me that, when those remarks attributed to Mr Pryce are seen in context, they cannot justify such an interpretation. It would be inherently unlikely that a bank manager, without any special reason to do so, would make such an extraordinary commitment. If Mr Pryce, from time to time, said that he would "look after" the applicants or that the application was proceeding "okay" or
that sort of thing, it seems to me to be quite fanciful to suggest or to construe such everyday statements, which are
clearly referable to administrative processes, as constituting an agreement on behalf of the Bank to lend a sum as large as $800,000, given especially the fact that these statements were made orally.
For those reasons, I am of the opinion that the claim against the Bank, cannot succeed and it will be dismissed. Conclusions on the claim aaainst the aaents
Here also, the matter turns, in the first instance at least, on a conflict in the evidence between the version given on the one hand by the second applicant and that given by the evidence of Mr Longbottom. I have found it difficult to resolve that conflict. Neither of the witnesses gave their evidence in this area in a convincing fashion. I have, however, come to the conclusion that, even if the statements attributed to ltr Longbottom by the second applicant were made, they did not operate as a material inducement to the applicants to purchase the properties and to exchange the contracts.
It will be recalled from the recitation I have given of the evidence of the second applicant in this connection that the second applicant was already familiar with this property. He had, of course, his own holiday house in Forster, he seemed to know the area reasonably well, he knew the motel
and, on his own evidence, he wanted to buy a property. It
would appear that he had decided, even by February, that he wished to buy this property. In this regard, it is significant that Mr Longbottom, on the second applicant's version, told him that the property was to be put to auction. It was in this context that the second applicant offered, on his version, $600,000. Mr Longbottom's version has slightly different figures, I think his figure was $650,000, but
putting that difference aside, it seems to be common ground between these two witnesses that the second applicant initiated these negotiations and clearly must have done so on the footing that, provided the price was right, the second applicant wanted to buy.
That version of events was consistent with the evidence given by the second applicant. In this connection, I think it is particularly significant that, in his evidence in chief, the second applicant said that, early in the negotiations, he was informed by Mr Adrian Longbottom that the vendor wanted $800,000. The response to this by the second applicant was that this was "a little bit too much". This is very significant evidence in the present context. It shows that the second applicant was prepared to commit himself to that position before, on his own case, Mr Longbottom made the statements attributed to him about which there is now a good deal of controversy and about which I have not found it
necessary to make findings.
I am prepared to accept, for the purposes of the present argument, that Mr Longbottom made the statements attributed to him by the second applicant. The statements assumably made were, so far as relevant, in the first instance, that the motel was a very good motel; that the value was there and the price of $800,000, "it's okay" and
that there were ten other buyers interested. At a later stage, Mr. Longbottom is alleged to have said that there is "good value" in the property and that the applicant should sign quickly because they had another ten buyers. This seems to be essentially a repetition of the previous discussion.
I am prepared to assume those matters were said to the second applicant by Mr Longbottom, but, it seems to me, taking the evidence as a whole, that at a time before those statements were assumably made, the second applicant had decided to buy at around $800,000. This explains why, in the early discussion, when first told that the vendor wanted
$800,000, the response of the second applicant was simply that
this was "a little bit too much". In that context, it seems to me very hard for the applicants to make out a case that statements alleged to be made subsequently by Mr Longbottom had the effect of inducing the applicants to enter into the contract. It seems to me that, in truth, the applicants,
about $800,000. especially the second applicant, had already decided to buy at In those circumstances, even making the assumption I have made in favour of the applicants, I am of the view that the claim against the agents must fail also.
Result and orders on the issue of liabilitv
For those reasons, essentially ones of fact, I am of the view that the claims made by the applicants must fail. The orders I will make then are that the application is dismissed, with costs.

this and the preceding pages are a true copy of

the Reasons for Judgment herein of his

Honour Mr. Justice Beaumont.

Associate ,&h'& I

Counsel and Solicitors	N. Cotman with D. Robertson
for Applicants:	instructed by Schrader
& Associates
Counsel and Solicitors	P. Hallen instructed by
for First respondent:	State Bank
Counsel and Solicitors	P.T. Taylor instructed by
for Second respondent:	Baker & Borthwick

Date of hearing:	2 - 6 September 1991
Date Judgment delivered:	13 September 1991