Dovade Pty Ltd v Westpac Banking Group

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Reported Decision: 46 NSWLR 168
150 FLR 336

New South Wales


Court of Appeal

CITATION: DOVADE PTY LTD & ORS v WESTPAC BANKING GROUP & ANOR [1999] NSWCA 113
FILE NUMBER(S): CA 40805/95
HEARING DATE(S): 8-10 December 1998
JUDGMENT DATE:
30 April 1999

PARTIES :
Dovade Pty Ltd & 14 Ors v Westpac Banking Group & Anor
JUDGMENT OF: Mason P; Sheller JA; Stein JA
LOWER COURT JURISDICTION: Supreme Court
LOWER COURT FILE NUMBER(S) : CD 50291/94
LOWER COURT JUDICIAL OFFICER: Rolfe J
COUNSEL: C J Stevens QC/A J McQuillen (Appellants)
TEF Hughes QC/JE Marshall (Respondents)
SOLICITORS: Central Law Solicitors and Attorneys (Appellants)
Clayton Utz (Respondents)
CATCHWORDS: MISREPRESENTATION; negligent advice; loan agreement; misleading and deceptive conduct; damage; s52 Trade Practices Act ; BREACH OF DUTY OF CARE; whether breach of fiduciary duty; claim for equitable damages; cross-claim; APPREHENSION OF BIAS; waiver; alleged failure to disclose; judge’s customer relationship with bank; wife’s shareholding; whether direct pecuniary interest in outcome of proceedings; scope of pecuniary interest disqualification
DECISION: Appeal dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
                                    CA 40805/95


                                    MASON P
                                    SHELLER JA
                                    STEIN JA

                                    Friday 30 April 1999
DOVADE PTY LTD & ORS v
WESTPAC BANKING CORPORATION & ANOR

The appeal is from proceedings heard and determined by Rolfe J in 1995. The respondents are related financial institutions. Bill Acceptance Corporation Ltd (“BACL”) is a merchant bank. It is a wholly owned subsidiary of Australian Guarantee Corporation Ltd, which is a wholly owned subsidiary of Westpac Banking Corporation (“Westpac”). The respondents sued Mr and Mrs Jury and several companies in the “Jury Group” for moneys lent or in relation to guarantees of loan agreements. Each of the defendants was found liable. The principal matter litigated at trial was a cross-claim propounded compendiously by each defendant against each of the plaintiffs. Judgments dismissing the cross-claim took effect on 21st November 1995.

In 1989, Mr Whitbread persuaded Mr Jury that the takeover of Trinity Properties Pty Ltd would be a good business opportunity. Mr Jury intended to sell most of Trinity’s real estate once the takeover had been effected in order to repay moneys borrowed through Dovade Pty Ltd, one of the Jury Group, for the acquisition. Loan monies were furnished by Westpac and BACL. Proceeds of the sale of the Trinity assets came only slowly. It was alleged that BACL had given financial advice to the defendants which promoted the takeover scheme by upholding its feasibility. The appellants claimed that the advice was negligent, as well as misleading and deceptive. Rolfe J found that the alleged representations were not made, that such statements as were made were neither representational nor advisory, that the appellants placed no reliance upon what they were told by any officer of BACL in deciding to enter the transaction, and that no damages were proved.

Some years prior to his judicial appointment, Rolfe J had acted as counsel in the preliminary stages of criminal proceedings involving Mr Whitbread. This involvement was known to…

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Details
Case
[1999] NSWCA 113
Decision Date

CaseChat Overview and Summary

Dovade Pty Ltd (the appellant) brought proceedings against Westpac Banking Group (the respondent) alleging, among other things, misleading and deceptive conduct and breach of a duty of care in relation to a loan agreement. The dispute concerned advice provided by the bank and the appellant's subsequent financial losses. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal included whether the respondent had engaged in misleading or deceptive conduct in contravention of section 52 of the *Trade Practices Act 1974* (Cth), whether the respondent had breached a duty of care owed to the appellant, and whether the appellant was entitled to equitable damages. A significant issue also raised was an apprehension of bias on the part of the primary judge, stemming from the judge's customer relationship with the respondent bank and his wife's shareholding in the bank, and whether this constituted a direct pecuniary interest that disqualified the judge from hearing the case, or if such an apprehension had been waived by the appellant.

The Court of Appeal dismissed the appeal. The judges found that the appellant had not established the necessary elements for its claims of misleading and deceptive conduct or breach of duty of care. Furthermore, the Court found no apprehended bias on the part of the primary judge that would warrant disqualification, concluding that any potential pecuniary interest was not of a nature that would lead a reasonable and informed observer to apprehend partiality, and that in any event, the appellant had waived any such objection.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs

Background

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