Ian Hamilton Fisher v Commonwealth Bank of Australia 1990 FCA 387

[1990] FCA 387

Re: IAN HAMILTON FISHER and JOAN ROSEMARY FISHER
And: COMMONWEALTH BANK OF AUSTRALIA
No. G766 of 1988
FED No. 387
Trade Practices Act

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Trade Practices Act - limitation of actions - when relevant cause of action accrues.

HEARING

SYDNEY

#DATE 1:8:1990

Counsel and solicitors for applicants: R.M. McDougall

Instructed by: Messrs Davies and Spicer

Counsel and solicitors for respondent: D.M.J. Bennett QC and J. Marshall

Instructed by: L.E. Taylor

ORDER

Costs of the separate question are reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

(On separate question whether the claims of the applicant under s.52 of the Trade Practices Act 1974 are statute-barred)

1. On 19 July 1990, I gave the following direction:
   

DIRECT that, pursuant to O.29 r.2(a), there be decided separately from any other question in the proceedings, the question whether the plea of the limitation periods stated in ss.82(2) and 87(1CA) of the Trade Practices Act 1974 pleaded in para 18 of the respondent's defence is a good plea.

1. The applicants have sued the respondent on several alleged causes of action. The factual context from which the litigation arises is described in my findings of fact published on 16 May 1990. By their second further amended statement of claim, ("the statement of claim") the applicants allege, inter alia, that the respondent engaged in certain conduct which is said to be contrary to s.52 of the Trade Practices Act 1974 ("the Act"). The applicants claim damages pursuant to s.82 of the Act and relief pursuant to s.87 of the Act.

2. By its defence, the respondent has pleaded, inter alia, the following:
   

"18. In answer to the whole of the Applicants' claim seeking relief under s.82 or s.87 of the Trade Practices Act the Respondent says:-

(a) any relief that relies upon a cause of action accruing prior to 25 March 1985 is barred by reason of the provisions of s.82(2) and s.87(1CA) of the Trade Practices Act;

(b) in relation to the Applicants' foreign currency loan, any cause of action which the Applicants may have, arose no later than either 12 or 13 March 1985 when the Applicants entered into an agreement with the Respondent to convert the amount to be advanced under the foreign currency loan into Australian dollars.

PARTICULARS

(i) Typed diary note of Mrs P H Skelton of 12 March 1985 being part Exhibit 20 at page 98 of Respondent's bundle;

(ii) Letter from Respondent to Applicants dated 13 March 1985 being Exhibit E."

1. (By s.82(2) of the Act, it is provided that an action under s.82(1) to recover loss or damage may be commenced at any time within three years after the date on which the cause of action accrued. Section 87(1CA) makes a similar provision.)

2. As has been said in the findings of fact, by letter to the applicants dated 12 February 1985, the respondent confirmed its approval of a foreign currency loan to the applicants (findings p 48); on or about 27 February 1985, the applicants executed certain mortgages in favour of the respondent (findings p 55); and on or about 12 March 1985, the loan agreement (which is dated 25 March 1985) was executed by the applicants (findings pp 53-4).

3. From the documentary evidence (Ex.20) it appears that on 12 March 1985, an officer of the respondent contacted the first applicant, informed him of a recent "drop" in the Swiss franc exchange rate and enquired whether the first applicant wished to accept that rate. It appears from the documents that this rate was accepted by the applicants and that, as a result, on 12 March 1985, the respondent and the applicants agreed that on 25 March 1985, the applicants would sell to the respondent Swiss francs (CHF) 2,997,000 for AUD 1,500.000, being an exchange rate of AUD 1 = CHF1.9980 (see Ex.97). This instruction was confirmed by a "drawdown notice" to the respondent signed by the applicants on or about 12 March 1985. The notice stated that, in accordance with cl.2 of the loan agreement, application was made for the drawdown of AUD$1,500,000 in Swiss francs on 25 March 1985.

4. By cl. 2(a) of the loan agreement, it was relevantly provided as follows:
   

"2. THE OVERSEAS LOAN

(a) The Borrower may from time to time . . . apply to drawdown Advances and it will by notice in writing delivered to the Bank not later than five Banking Days prior to the proposed drawdown of an Advance nominate the amount in Australian Dollars and the currency of the Advance, the date of the advance . . . Such notice shall not be withdrawn by the Borrower except with the Bank's written consent."

1. On 21 March 1985, the Singapore branch of the respondent confirmed to the applicants "our loan to you value 25 March 85 maturing 25 Sep 85" of principal CHF2,997,000 (see findings p 56). On 25 March 1985, drawdown took place when the purchase of the Cowra motel was completed.

2. The present proceedings were commenced on 25 March 1988.

3. In order to understand the respective contentions of the parties, further reference should be made to the material allegations in the statement of claim.
   The first group of allegations

4. The applicants first allege that the representations, express or implied, allegedly made (a) at the August 1984 Taree meeting with Mr Green, (b) at the December 1984 Forster meeting with Mr Isaacs and Mrs Skelton, and (c) at the January 1985 meeting with Mrs Skelton, were likely to mislead or deceive contrary to s.52 (paras 10,16).

5. Then it is said that in December 1984 or January 1985, relying upon these representations, the applicants applied to the respondent for a foreign currency facility for the financing of the purchase of the Nabiac Hotel (para 18). However, no claim is now made that any specific loss or damage flowed to the applicants by reason of the making of the application for a loan facility in December 1984 or January 1985. If such a claim had been made, it would appear to be out of time. But, since the claim is not pressed, it is not necessary to express a concluded view on the point.
   The second group of allegations

6. It is next alleged that in January 1985, Mr Isaacs made certain representations, express and implied, to the applicants as to the amount they should borrow (paras 19A, 19B); that the representations were likely to mislead or deceive, contrary to s.52 (para 19C); that in January or February 1985, the applicants amended their earlier application so as to apply for funds to finance the purchase of the motel at Cowra (para 20); and that by letter dated 12 February 1985, the respondent notified the applicants of its approval of their amended application (para 21).
   The third group of allegations

7. Then it is alleged that in February 1985, Mr Vanner made representations, express and implied, as to, inter alia, the expertise of the respondent in this area (paras 22,23).
   The material allegations of reliance

8. The material allegations of reliance, and related claims are pleaded as follows:
   (1) In reliance on the representations and conduct previously pleaded, on 25 March 1985, the applicants signed the loan agreement and the security documents (para 24). (2) On 25 March 1985, the facility was drawn down (para 25). (3) In reliance on the representations pleaded, the applicants "took no steps to monitor or otherwise manage their Swiss franc facility" (para 26). (4) By letter dated 26 July 1985, the respondent advised the applicants that the Australian dollar had depreciated against the Swiss franc causing a loss to the applicants of $290,000 (para 27).
   When does a cause of action accrue?

9. It is well established that where the incurring of damage is an essential element of a cause of action, the suffering of some damage (the other elements of the cause of action having already occurred) will, in general, start time running even although the damage continues to grow. The running of time is not suspended until all the damage which will be suffered has ceased to flow, nor does further damage constitute a fresh cause of action (see Jobbins v. Capel Court Corporation Ltd. (1989) 91 ALR 314 at p 317). It is well settled that, generally, a plaintiff's unawareness of the existence of his cause of action does not prevent it accruing; time runs during his ignorance (Jobbins, above at pp 317-8).

10. In Arcadi v. Colonial Mutual Life Assurance Society Ltd. (1984) 6 ATPR 40-473 at 45,454, Toohey J., speaking of s.52 of the Act, said that there may be several distinct losses, flowing from conduct in contravention of the Act and that the cause of action is not complete until those losses have occurred. In James v. Australia and New Zealand Banking Group Ltd. (1986) 64 ALR 347, at p 392, Toohey J. explained that this was not to say that a cause of action is kept alive so long as any loss or damage is being suffered, so that "(o)nce an applicant has suffered loss or damage relevant to his claim, time begins to run" (emphasis added) (see also Jobbins, above, at p 318). In Jobbins, the Court said (at pp 318-9):
    

"But there may be situations, arising under s.52 of the Trade Practices Act, where more is involved than simply the incurring of a further loss flowing from the same cause of action, and thus, in Toohey J.'s words, 'relevant to' the original claim. A claim under s.52, given the other circumstances which attract that section, involves (as any pleading of it demonstrates) three basic elements: (1) the misleading conduct; (2) the reliance of the injured party on that misleading conduct; and (3) damage suffered by the conduct (it will be suffered 'by' the conduct where the injured party acts in reliance on - or perhaps influenced by - a misrepresentation conveyed by that conduct). If, after the injured party has so acted and incurred some loss, being still deceived, he again acts on the faith of the misrepresentation so that there is a distinct and separate act of reliance, it cannot be said that further damage subsequently flowing from the second act of reliance merely exemplifies 'a fresh loss from the same basic wrong'. For an element of the wrong with which s.52 is concerned is the act of reliance induced by the misrepresentation, and the new damage flows from a new basic wrong constituted by the new occasion upon which the injured party was induced to act to his detriment by the misrepresentation. Any pleading of the claim would make this clear by alleging distinctly the further act done in reliance on the original inducement."

What is the relevant cause of action here?

1. It is thus necessary to identify the relevant cause of action pleaded, bearing in mind that, under the modern system of pleading, "the question is whether it would be open to the plaintiffs upon the pleadings to prove facts at the trial which would constitute a cause of action" (Mutual Life and Citizens' Assurance Co. Ltd. v. Evatt (1970) 122 CLR 628 at p 631).

2. For present purposes, the relevant cause of action appears to be that pleaded in para 26 of the statement of claim, that is to say-
   

"26. In reliance on the oral and implied representations referred to herein, the Applicants took no steps to monitor or otherwise manage their Swiss franc facility."

1. I say that this "appears" to be the relevant cause of action because the expert evidence has not been completed and counsel have not yet concluded their submissions on all matters. If this is the relevant cause of action, it would not have accrued, if it be established, until after the drawdown on 25 March 1985. That is to say, the complaint made is that, by reason of the respondent's conduct, the applicants took no steps, after 25 March 1985, being the date of drawdown, to monitor or manage their loan. This appears to be an allegation of loss or damage, perhaps put on a "loss of a chance" basis, in respect of events alleged to have occurred after 25 March 1985 and thus within the three year period.

2. It is true that it also appears that, on 12 March 1985, that is, outside the limitation period, two distinct contracts were made between the parties: (1) the "foreign exchange" or "forward" "deal" recorded in Ex. 97, folio 1, under which the applicants agreed to sell Swiss francs on 25 March 1985; (2) the loan agreement, which was to operate as from 25 March 1985. But it does not seem, at this stage at least, that any relevant cause of action is alleged in those respects. The case sought to be made out in para 26 of the statement of claim is different from a cause of action, for instance, that, by reason of the misleading conduct of the respondent, the applicants were induced to enter into a disadvantageous transaction (cf.Forster v. Outred and Co. (1982) 1 WLR 86; D.W. Moore and Co. Ltd. v. Ferrier (1988) 1 WLR 267).
   Conclusion

3. In my opinion, the allegations made in para 26 of the statement of claim are not, on their face, statute-barred. The argument on this separate question has proceeded on the assumption (wrongly, I think) that the applicant's relevant causes of action extended beyond para 26.and that the plea raised in para.18 of the defence answers causes of action extending beyond para 26. In the circumstances, it is not appropriate, at this stage, to make any orders consequential on my conclusion that, on its face, the claim in para 26 is not out of time.

4. The only order I will make at this stage is to reserve costs.