Manday Investments Pty Ltd v Commonwealth Bank of Australia (No 3)

The case of Manday Investments Pty Ltd v Commonwealth Bank of Australia (No 3) involved a dispute between the applicants, Manday Investments, and the respondents, the Commonwealth Bank of Australia and its valuers. The applicants sought damages for alleged misleading or deceptive conduct and breach of contract by the respondents due to reliance on allegedly inaccurate property valuations. The respondents applied for summary judgment under section 31A of the Federal Court Act 1976 (Cth) and rule 26.01 of the Federal Court Rules 2011.

The legal issues before the court included whether the applicants had a reasonable prospect of success in their claims of misleading or deceptive conduct and breach of contract, and whether the respondents’ reliance on allegedly inaccurate property valuations was a factor in the causation of the applicants’ loss. The court also considered the onus of proof when all relevant evidence was held by the other party. The court found that the applicants’ claim for breach of implied contractual term should be dismissed because the loan contract had expired and there was no automatic right of renewal.

The court reasoned that the respondents’ argument regarding causation could not be determined summarily, as the question of what the bank would have done had the property valuations been higher could only be determined at trial. However, the court found that the respondents’ reliance argument should succeed because there was no evidence that the applicants relied on the valuation at any time, they were not misled by the valuation, and their own actions in selling the property were the cause of the loss. The only aspect of the claim that was capable of going to trial was the part of the claim which relied upon interest and other charges immediately imposed by the Bank consequent upon receipt of the Valuation which was said to be misleading.

The court ordered that within ten days, the parties confer and file a minute to reflect the conclusions in the reasons for judgment published today. The respondents were awarded two-thirds of their costs.