Dawson v Westpac Banking Corporation - [1991] HCA 52

HIGH COURT OF AUSTRALIA

Mason C.J., Deane, Dawson, Toohey and McHugh JJ.

JOHN WILLIAM DAWSON AND ANOR v. WESTPAC BANKING CORPORATION

12 December 1991

Decisions

MASON C.J. The issue in this appeal is whether the New South Wales Court of Appeal was in error in departing from findings of fact made by Bryson J. at first instance. This Court, in granting special leave to appeal, limited the appeal to that issue, although the appellants sought to appeal on other grounds as well. To identify the relevant findings of fact and to explain their significance and that of the findings made by the Court of Appeal, it is necessary to relate the history of the litigation.

2. On 16 March 1983 the second appellant, Premium Tyre Service Pty. Limited ("PTS"), executed an equitable mortgage of land known as 312-314 (since renumbered 144-150) Princes Highway, Dapto, in favour of the respondent ("Westpac") as mortgagee to secure liabilities incurred and to be incurred by A.T.W.A. Trading Pty. Limited ("ATWA") to Westpac. PTS was and is the proprietor of the land for an estate in fee simple, the title being old system (or general law) title. The land was and is PTS' principal asset; without it, PTS would have no valuable asset with which to carry on business. Affixed to the mortgage are the common seals of PTS and ATWA. The common seal of each company was expressed to have been affixed, by authority of the board of directors previously given, in the presence of Mr Smith who is described, in each instance, as the "Secretary". Mr Smith's signature appears adjacent to each common seal. In addition, the signature of Mrs Smith as a director of PTS appears next to its common seal and the signature of Mr Grant as a director of ATWA appears adjacent to its common seal.

3. Mr Dawson, the first appellant, was at all material times the holder of forty-nine of the 100 issued shares in PTS. The remaining shares in its capital were held by Mr and Mrs Smith. In an action brought by the appellants in the Supreme Court, Mr Dawson claimed that these shares were held in trust for him. In the first stage of the action, Hodgson J. upheld this claim, removed Mr and Mrs Smith from office as directors of PTS and gave Mr Dawson control of the board of that company. Those aspects of the litigation are no longer in contention.

4. What is presently relevant is that, in the action, the appellants also claimed that the mortgage was executed without the authority of the board of directors of PTS in order to serve the interests of ATWA, a company owned and controlled by Mr Smith and his associates, in which Mr Dawson had no interest whatsoever, in circumstances where the giving of the mortgage did not advance any interest of PTS. The appellants contended that Westpac was not entitled to rely on the protection conferred by s.51A of the Conveyancing Act 1919…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1991] HCA 52
Decision Date: 12 December 1991

CaseChat Overview and Summary

The High Court of Australia considered an appeal by Dawson against a decision of the Federal Court of Australia concerning Westpac Banking Corporation. The dispute arose from Dawson's claim that Westpac had engaged in misleading or deceptive conduct in contravention of s 52 of the *Trade Practices Act 1974* (Cth) (now s 18 of the *Australian Consumer Law*). Dawson alleged that Westpac had made misrepresentations regarding the availability of finance for a property development project.

The central legal issue before the High Court was whether Westpac's conduct, specifically its statements and actions concerning the provision of finance, constituted misleading or deceptive conduct within the meaning of s 52 of the *Trade Practices Act 1974*. This required the Court to determine whether the representations made by Westpac were, in the circumstances, likely to mislead or deceive a reasonable person in the position of Dawson, and if so, whether such conduct caused Dawson loss.

The Court analysed the evidence to ascertain the precise nature of the representations made by Westpac and the context in which they were communicated. It applied the established principles for determining misleading or deceptive conduct, focusing on whether the overall impression created by Westpac's conduct was likely to mislead. The Court considered the subjective state of mind of Dawson but emphasised that the test was objective, assessing the likely effect on a reasonable person. The Court found that Westpac's conduct did not amount to misleading or deceptive conduct as alleged by Dawson.

Consequently, the High Court dismissed Dawson's appeal, upholding the decision of the Federal Court.

Orders