McCann & Anor v Bank of Western Australia Ltd

McCann and another (the appellants) appealed to the Full Federal Court against a decision of a single judge of that court. The dispute concerned the appellants' claim against the Bank of Western Australia Ltd (the respondent) for damages arising from alleged breaches of contract and misleading or deceptive conduct in relation to a loan facility provided by the respondent to a company, Gascoyne Holdings Pty Ltd. The appellants, who were directors and shareholders of Gascoyne Holdings, alleged that the respondent had acted in breach of its contractual obligations and engaged in conduct that contravened the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) by misrepresenting the terms and conditions of the loan facility and by failing to act with due care and skill.

The Full Federal Court was required to determine whether the single judge had erred in finding that the respondent had not breached its contractual obligations to the appellants, nor engaged in misleading or deceptive conduct. Specifically, the court had to consider whether the respondent's conduct in relation to the loan facility amounted to a breach of an implied term of good faith and co-operation, and whether representations made by the respondent concerning the loan facility were misleading or deceptive under the *Trade Practices Act 1974* (Cth). The court also had to consider the proper construction of the loan agreement and the extent of the respondent's duties to the appellants.

The Full Federal Court, comprising Kirby and Hayne JJ, dismissed the appeal. Their Honours found that the terms of the loan agreement were clear and that the respondent had acted in accordance with those terms. The court held that there was no implied term of good faith and co-operation that imposed obligations on the respondent beyond those expressly stated in the loan agreement. Furthermore, the court concluded that the representations made by the respondent were not misleading or deceptive, as they accurately reflected the terms of the loan facility and the respondent's rights under it. The court applied principles of contractual interpretation and the established tests for misleading or deceptive conduct under the *Trade Practices Act 1974* (Cth).