McKinnon and Anor v Commonwealth Bank of Australia M115/2001

The applicants, McKinnon and Anor, brought proceedings against the Commonwealth Bank of Australia in the High Court of Australia. The dispute concerned the Bank's alleged breach of contract and misleading or deceptive conduct in relation to a loan facility provided to the applicants.

The central legal issues before the Court were whether the Bank had breached its contractual obligations by failing to act with reasonable care and skill in managing the loan facility, and whether its conduct in relation to the facility constituted misleading or deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth). Specifically, the Court had to consider the nature of the Bank's duty of care in managing the loan and the elements required to establish a contravention of section 52 of the *Trade Practices Act*.

The Court's reasoning focused on the contractual relationship between the parties and the application of the *Trade Practices Act*. It was held that the Bank's contractual obligations did not extend to a duty to manage the loan facility in a way that would prevent the applicants from suffering a loss, nor did it impose a duty to advise the applicants on the wisdom of their investment decisions. Regarding the misleading or deceptive conduct claim, the Court found that the Bank's conduct, viewed objectively, did not create a false or misleading impression about the nature or risks of the loan facility. The Court applied established principles regarding the scope of contractual duties and the interpretation of section 52 of the *Trade Practices Act*, emphasising that the Bank was not obliged to protect the applicants from the consequences of their own commercial decisions.

The High Court dismissed the applicants' appeal.