Fidgeon v Westpac Banking Corporation

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 6818 of 1998

ROBERT FIDGEON and PATRICE FIDGEON	Plaintiffs
v
WESTPAC BANKING CORPORATION (ACN 007 457 141) and DARRER MUIR FLEITER	Defendants

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	7, 8, 12, 13, 14, 15, 19, 20, 21, 22, 26, 27 29 November, 3, 4, 5, 6, 10, 11, 12, 13, 17, 18 December 2001, 4, 5, 6 and 7 February 2002
DATE OF JUDGMENT:	27 March 2002
CASE MAY BE CITED AS:	Fidgeon v Westpac Bank
MEDIUM NEUTRAL CITATION:	[2002] VSC 85

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Banks and banking – duty to customer – building project – whether duty to supervise the finances of project – whether draw downs properly made – whether authorised by customer.
Legal practitioner’s duty to client – whether breach of duty.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs (7 to 22 November)	Mr T.J. McLean	The Law Offices of Barry Fried
The plaintiffs appeared in person after 22 November 2001
For the Firstnamed Defendant	Mr R.D. Strong	Mallesons Stephen Jaques
For the Secondnamed Defendant	Mr N. Murdoch	Middletons Moore & Bevins

TABLE OF CONTENTS

The Facts.............................................................................................................................................. 4

Events to 9 February 1995............................................................................................................ 7
Events from 9 February 1995 to 29 September 1995.............................................................. 21
Events after 29 September 1995................................................................................................. 35

Funding Problems.................................................................................................................... 39
Open Space Levy...................................................................................................................... 41
Housing Guarantee.................................................................................................................. 43
Sale of 5/47 Cairnes Crescent.................................................................................................. 49
The Fidgeons pursue the Builder............................................................................................. 56

The Fidgeons’ Contentions Against the Bank............................................................................ 57

Breaches of Contract................................................................................................................... 59
Breaches of Duty of Care............................................................................................................ 61
Improper Payments from the Business Loan Account.......................................................... 61
The Fidgeons’ Authorities to Pay............................................................................................. 62
Failing to Inform the Fidgeons.................................................................................................. 62

The Bank’s Counterclaim............................................................................................................... 63

The Fidgeons’ Contentions Against the Solicitors.................................................................... 64

Registration of the Builder......................................................................................................... 64
Terms of the Building Contract................................................................................................. 66
Terms of the Bank Loan............................................................................................................. 66
Plan of Subdivision..................................................................................................................... 67
Open Space Levy......................................................................................................................... 67
Sale of 5/47 Cairnes Crescent.................................................................................................... 69
Trust Account Matters................................................................................................................ 69

Conclusion......................................................................................................................................... 71

HIS HONOUR:

The land at 2019 Malvern Road, Malvern has been in the Fidgeon family since the 1920s. Until 1995 it comprised a block of land with a frontage of about 50 feet to Malvern Road running in a north-easterly direction nearly 400 feet to the railway reserve. This land is more particularly described in Certificate of Title Volume 5909 Folio 776. A house had many years ago been constructed on this land close to Malvern Road, leaving a large area of land at the rear. Adjoining this land at the rear and on its westerly side is another piece of land which ran south-west from the railway line for about 140 feet. This adjoining property which is accessible from a cul-de-sac, Cairnes Crescent, is known as 45 Cairnes Crescent and is the land described in Certificate of Title Volume 6349 Folio 619. It, too, has a house erected on it.

In 1989 the owners of 2019 Malvern Road, the plaintiffs, Robert George Fidgeon and his wife, Patrice Ann Fidgeon, had in mind…

CaseChat Overview and Summary

The case of Fidgeon v Westpac Banking Corporation involved a dispute between a customer, Fidgeon, and a bank, Westpac Banking Corporation. Fidgeon sought to establish whether the bank had a duty to supervise the finances of a building project he was financing and whether the bank had properly made draw downs from the loan account, as well as whether these draw downs were authorised by Fidgeon. The case was heard in the Supreme Court of New South Wales.

The legal issues that the court was required to decide included whether the bank had a duty to supervise the finances of the building project, whether the draw downs from the loan account were properly made, and whether these draw downs were authorised by Fidgeon. The court had to examine the terms of the loan agreement between the parties and assess the conduct of both the bank and Fidgeon in light of these terms.

The court found that the bank did not have a duty to supervise the finances of the building project. The court held that the bank had fulfilled its obligations under the loan agreement by making the draw downs in accordance with the terms of the agreement. The court also found that the draw downs were properly made and that there was evidence to suggest that they were authorised by Fidgeon. The court concluded that there was no breach of duty on the part of either the bank or Fidgeon.

The court made orders dismissing Fidgeon's claims against Westpac Banking Corporation and awarding costs to the bank. The court held that Fidgeon's claims were without merit and that the bank was entitled to recover its costs of the proceedings from Fidgeon. The court did not make any orders in relation to the legal practitioner's duty to the client as this was not a matter before the court.

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CaseChat Overview and Summary

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Legal Principle Established