Menhaden Pty Ltd v Citibank NA

Re: MENHADEN PTY. LTD.
And: CITIBANK N.A. No. WA G25 of 1984
(1984) ATPR para 40 - 471 / 1 FCR 542 / 55 ALR 709
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.(1)

CATCHWORDS

Trade Practices - statement made by bank regarding financial capacity of customer - whether conduct in trade or commerce - no allegation that any member of the public, in the capacity of consumer, had been misled - whether reasonable cause of action disclosed - relevance of fact that information provided gratuitously - security for costs - matters to be taken into account

Trade Practices Act 1974 s.52

Federal Court of Australia Act 1976 s.56

Judiciary Act 1903 s.79

Companies Code (W.A.) s.533

Federal Court Rules 0.20 r.2, 0.29 r.2

Trade Practices - Statement by bank concerning financial capacity of customer - Whether in trade of commerce - Trade Practices Act 1974 (Cth), s. 52.

HEADNOTE

Held: (1) A bank which provides gratuitous advice concerning the availability of finance to one of its clients thereby engages in conduct in trade and commerce.

(2) Section 52 of the Trade Practices Act 1974 (Cth) is not confined in its operation to statements made to the public or an identifiable section of it.

HEARING

Perth, 1984, June 25; July 12. #DATE 12:7:1984

MOTION.

Notice of motion to dismiss an application as failing to disclose a reasonable cause of action and application for security for costs.

D. A. Ipp, for the applicant.

J. G. Fiocco, for the respondent.

Cur. adv. vult.

Solicitors for the applicant: Parker & Parker.

Solicitors for the respondent: Mackinlays Barristers & Solicitors.

G.F.V.

ORDER

1. The respondents' motion that the application

be dismissed for want of jurisdiction or for failing to disclose a cause of action be dismissed.

2. The applicant give security in the amount of

$12,000 for the costs of the respondent of and incidental to these proceedings, in a form to be agreed by the parties, in default of agreement, to be determined by the Court.

3. Further proceedings on the applicant's claim

against the respondent be stayed until security is provided.

4. Liberty be reserved to either party to apply

generally upon 7 days notice to the other party.

5. All question of costs be reserved.

Orders accordingly.

JUDGE1

This is a motion to dismiss the applicant's application as failing to disclose a reasonable cause of action. The motion seeks alternative relief (only if the proceeding is not dismissed) that the applicant provide security for costs. It is convenient to refer to the parties simply as Menhaden and Citibank.

2. When the hearing began, counsel for Citibank invited the Court to treat the motion as one for the determination of questions of law pursuant to O.29 r.2 of the Federal Court Rules. In the absence of a defence and a precise formulation of the questions to be determined, I declined to deal with the motion in this way. There are important differences between…