Henke v Commonwealth Bank of Australia

Henke v Commonwealth Bank of Australia concerned a dispute between the applicant, Mr Henke, and the respondent, the Commonwealth Bank of Australia. The case came before the High Court of Australia, with judgment delivered by Gummow and Kiefel JJ.

The central legal issue before the High Court was whether the Commonwealth Bank had breached its duty of care to Mr Henke by failing to advise him of the risks associated with a particular investment product, specifically a 'cash management trust'. Mr Henke alleged that the Bank had acted negligently in recommending this product without adequately informing him of its inherent risks, leading to financial losses.

The Court considered the scope of a bank's duty of care in providing financial advice. It examined the circumstances under which a bank might be found to have assumed a responsibility to advise a customer on the suitability of an investment, particularly where the customer is unsophisticated and relies on the bank's expertise. The Court applied principles of negligence, focusing on the foreseeability of harm and the reasonableness of the Bank's conduct in the context of the relationship between the parties and the nature of the financial product. The Court ultimately found that the Bank had not breached its duty of care, as the evidence did not establish that the Bank had assumed a responsibility to advise on the specific risks of the investment in the manner alleged by Mr Henke.

The High Court dismissed the appeal.