National Australia Bank Ltd v Cunningham, A.D

[1990] FCA 437

Re: NATIONAL AUSTRALIA BANK LTD
And: ALPHONSUS D. CUNNINGHAM; MARIE F. CUNNINGHAM; BRIAN CUNNINGHAM;
ANTOINETTE
CUNNINGHAM; DANIEL CLEMENT CUNNINGHAM; BRIDGET MARGARET CUNNINGHAM and
WESTPAC
BANKING CORPORATION
No. V G400 of 1989
FED No. 437
Trade Practices - Negligence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Jenkinson(2) and Ryan(3) JJ.

CATCHWORDS

Trade Practices - Enforcement and remedies - Actions for damages - Reliance on conduct constituting contravention - Nature and degree of required reliance.

Negligence - Essentials of action for negligence - Where Economic or financial loss - Careless advice, statements and non-disclosure - Reliance on negligent statement - Nature and degree of required reliance.

Trade Practices Act 1974 - s.52

Australian Steel and Mining corporation Pty. Ltd. v. Corben (1974) 2 NSWLR 202

Arnison v. Smith (1888) 41 Ch D 348

Barnes v. Hay (1988) 12 NSWLR 337

Drincqbier v. Wood (1899) 1 Ch 393

Carr v. Finance Corporation of Australia Ltd. (1981) 147 CLR 246

Field v. Shoalhaven Transport Pty. Ltd. (1970) 3 NSWR 96

Gould v. Vaggelas (1985) 157 CLR 215

Holmes v. Jones (1907) 4 CLR 1692

Peek v. Derry (1887) 37 Ch D 541

Smith v. Kay (1859) 7 HLC 750

White v. Brunton (1984) QB 570

HEARING

MELBOURNE

#DATE 21:8:1990

Counsel for the Appellant : Mr. G. Nettle

Solicitors for the Appellant : Mallesons Stephen Jaques

Counsel for the First, Second, : Mr. B.K.C. Thomson QC
Third, Fourth, Fifth and and Mr. C.B. Thomson Sixthnamed Respondent

Solicitor for the First, : P.D. Shacklock
Second, Third, Fourth, Fifth and Sixthnamed Respondent

ORDER

The applicants have leave to appeal from the declaratory order pronounced on 8 December 1989 by the Honourable Mr. Justice Sweeney.

The said appeal be dismissed.

The respondents' costs of the said appeal be paid by the appellant.

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

JUDGE1

Mr G. Nettle, counsel for National Australia Bank Limited ("National Australia Bank"), has submitted that the learned trial Judge did not consider the issue whether the firstnamed respondent, Mr A.D. Cunningham, entered into a certain contract as a result of the wrongful conduct which his Honour found to be established. Mr Nettle submitted that, nevertheless, a finding that the entry into that contract was casually related to the wrongful acts proved against National Australia Bank was implicit in his Honour's declaration that the firstnamed respondent "is entitled to damages against" the National Australia Bank.

1. In my opinion, his Honour's declaration should be read in the light of s.82(1) of the Trade Practices Act 1974 (Cth) which reads:-
   

"A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention."

In my opinion, the findings made by his Honour were that there was a breach by the National Australia Bank of s.52 of the Trade Practices Act and that negligent misstatements were made by employees of the National Australia Bank. His Honour's reasons dealt fully with those issues. His Honour left open the question of damages including the whole question whether any loss or damage had been suffered as a result of a contravention of the Act or as a result of that negligence.

1. On any view of the matter, the order made by his Honour was interlocutory. This is not a case such as White v. Brunton (1984) QB 570, which was referred to by Mr Nettle, in which a Judge had determined finally one discrete matter. In this present case, the application was brought principally under s.82 of the Trade Practices Act and sought damages. The declaration made by his Honour was therefore interlocutory in the proceedings before him. See Carr v. Finance Corporation of Australia Ltd (No. 1) (1981) 147 CLR 246 and Thomas Borthwick and Sons (Pacific Holdings) Ltd and Ors v. Trade Practices Commission (1988) 18 FCR 424.

2. As his Honour said little about the matters which Mr Nettle sought to raise before the Full Court, I prefer to say nothing of them. In my view, it is premature to consider them without the benefit of his Honour's reasons, which his Honour will enunciate when his Honour gives final judgment.

3. I would refuse the application for leave to appeal and, on that basis, would dismiss the appeal with costs.

JUDGE2

Appeal and application for leave to appeal from a declaratory order made by a single judge of the Court.

1. In the proceeding in which the declaration was made the applicants were the six respondents named Cunningham and the respondents were the appellant and Westpac Banking Corporation, the seventhnamed respondent in the appeal. The pleadings in that proceeding raised many issues, but the declaration impugned by this appeal is concerned with only a few of them. The declaration was that the firstnamed respondent Alphonsus D. Cunningham "is entitled to damages against" the appellant.

2. The first four of the first six respondents carried on at material times in partnership a business of farming potatoes and were customers of the branch of the bank conducted at Warragul by the appellant, which was at material times a corporation within the meaning of that expression in the Trade Practices Act 1974. Among the claims made in the proceeding in which the declaration was made were claims by the six respondents for damages for breaches by the appellant of s.52 of the Trade Practices Act 1974 and for damages for negligence of the appellant. One group of those claims was founded on words spoken, in a telephone conversation on 6 January 1987, in the course of his employment by a servant of the appellant to the secondnamed respondent, who was at material times the wife of the firstnamed respondent. While the trial of the proceeding was on foot Sweeney J. declared, at the request of counsel for the parties, his intention thereafter to limit the evidence to "liability" and give his decision thereon before hearing further evidence of damage. His Honour persevered in that intention and, in the result, made the impugned declaratory order and wholly dismissed the proceeding as against the other respondent Westpac Banking Corporation and deferred for further consideration all other questions arising in the proceeding. No order of the kind contemplated by O.29 R.2 was formally pronounced.

3. In his reasons for the declaration the learned trial judge stated certain findings which the parties accepted. These were that in early January 1987 "A. Cunningham . . . . had, in association with B. Cunningham, a potato crop in leased land, which was approaching maturity"; that shortly before 5 January 1987 an agent of a company then unknown to A. Cunningham, Hebdean Pty. Ltd. ("Hebdean"), made to A. Cunningham an oral proposal that Hebdean should contract in writing to buy the estimated yield of the crop, 1500 tonnes, at $260 per tonne, and suggested to A. Cunningham that Cunningham could get Hebdean "checked out" by making inquiry of Hebdean's bank, Westpac Banking Corporation, at a particular branch in Brisbane; that, by reason of circumstances which I need not for present purposes rehearse, A. Cunningham and the servants of National Australia Bank Ltd. at Warragul who became involved on that bank's behalf believed it to be important that A. Cunningham should be accurately informed, before making the proposed contract of sale, of Hebdean's financial capacity to perform such a contract; that at A. Cunningham's request his wife, the respondent Marie Cunningham, on 5 January 1987 by telephone told one of those servants of the proposed contract and that her husband regarded it as "critical" that he "get a credit check" on Hebdean from the specified branch of Westpac Banking Corporation before making such a contract and asked the servant to obtain the "credit check"; that on 6 January 1987 another of those servants by telephone told Marie Cunningham that the "credit check" had been obtained from the specified branch, that it was: "Hebdean conducts a satisfactory account, they meet all their commitments", and added that "that is as good a report as you would get"; that Marie Cunningham accurately communicated what the servant had told her to her husband; and that later that day A. Cunningham signed a contract with Hebdean to sell 1500 tonnes of potatoes to Hebdean for a price of $260 per tonne.

4. The learned trial judge, Sweeney J., held that the speaking of the words, "that is as good a report as you would get", constituted a contravention by the appellant of s.52 of the Trade Practices Act 1974, and constituted also breach of a duty owed by the appellant to A. Cunningham to exercise reasonable care in expressing, in the circumstances I have summarised, an opinion of the kind those words express. The first of those conclusions of his Honour was not impugned by Mr. Nettle of counsel for the appellant as a conclusion not open to his Honour on the evidence. It was his Honour's finding, or alternatively his failure to find, that there was a causal connection, between the speaking of the words and the making by Mr. A. Cunningham of the contract with Hebdean, of a kind which would in law justify an award of damages caused by the making of that contract, which was the principal subject of attack by Mr. Nettle.

5. One ground of that attack rested on the submission that, in a case in which damages are alleged to flow from the making of a contract, the person claiming damages must prove that he would not have entered into the contract if the contravention of s.52 had not occurred (in respect of the cause of action given by s.82 of the Trade Practices Act 1974) and, in respect of the cause of action in negligence, if the conduct constituting the breach of the duty of care had not occurred. There is some support for the proposition in Salmond and Winfield's Principles of the Law of Contract (2nd ed.) at pp 252-254:
   

"It is established, therefore, that although a misrepresentation must be an inducing cause of the contract it need not be the sole inducing cause, and need not even be in itself a sufficient inducing cause so as to be capable of operating by itself without the cumulative aid of others. Yet there still remains a further question. Although the representation may be only a part of the inducement to the contract, is it requisite that it should be a necessary or indispensable part of it in the sense that in the absence of that representation the contract would not have been entered into - the remaining inducements not being sufficient by themselves? Or is it, on the contrary, enough that the representation actually contributed its weight to the sum total of the influences operating in the mind of the contracting party, even though these other influences would have been sufficient by themselves? A cart may be drawn up a hill by four horses although three of them could have done it by themselves. The fourth horse is an inducing cause of the progress of the cart, for he contributes his pull to the result; but he is neither the sole cause, nor a sufficient cause, nor a necessary cause. If the load is so increased that it takes four horses to take it up the hill, the fourth horse becomes a necessary part of the inducement, for without him the cart would stand still. In the question which has been formulated the cart is the contract, and the fourth horse is the fraudulent or innocent misrepresentation of the other contracting party.

In Smith v. Kay (1859), 7 HLC 750, 775-6 the question is thus answered by Lord Wensleydale : 'I take it to be perfectly clear that, in order to set aside a deed on the ground of fraud, there must be moral fraud, and fraud causing the contract dolus dans causam contractui; not necessarily a fraud which is the sole cause of the contract, but a fraud without which the contract never would have been made . . . Fraud gives a cause of action if it leads to any sort of damage; it avoids contracts only when it is the ground of the contract, and where, unless it has been employed, the contract would never have been made.'

If this is still to be accepted as an authentic statement of the modern law on this point, misrepresentation has no effect if it is only the fourth horse and if the cart would have equally gone up the hill with the other three. The question, however, cannot be regarded as definitely decided, for it is difficult to reconcile the foregoing statement of Lord Wensleydale with certain later judicial utterances. It is not infrequently said or implied that a misrepresentation is operative if it formed a real and material part of the inducement, without any evidence that it was an essential and indispensable part, so that in its absence the contract would not have been entered into. Thus in Re London and Leeds Bank

(1887), 56 L.J.Ch 321, a decision of Stirling, J., the headnote of the report, which seems accurately to express the ratio decidendi, is as follows: 'Where a person seeks to rescind a contract to take shares on the ground of misrepresentation, it is not necessary that he should prove that if the misrepresentation had not been made he would not have taken the shares. It is sufficient if there is evidence to show that he was materially influenced by the misrepresentation.'

On principle, apart from authority, it would seem illogical to give a plaintiff damages for being led into a contract by fraud if he would have made the same contract in any event even if no such fraud has been practised on him. For in such a case the fraud has not been in truth the cause of any loss to him. But when the question relates not to damages but to the validity of the contract such a consideration is not in point. It would be quite logical to hold that a contract was invalid in every case in which misrepresentation, whether fraudulent or not, was actually operative as one of the inducing causes of it, even though not as an indispensable and essential cause. It is possible, therefore, that the law may develop a distinction in this respect between actionable and invalidating misrepresentation. In any case, even if the rule as formulated by Lord Wensleydale is accepted as of general application, its practical operation is restricted by rules as to presumption and proof. Where a representation is of such a nature that it will naturally and probably induce a contract, and a contract is thereupon actually entered into, it is commonly a proper presumption of fact that the representation was the inducing cause of the contract. In such a case it is not necessary for the plaintiff seeking rescission or damages to prove affirmatively that the representation was in truth the operative and essential cause of the contract. The burden of proving that it was not, and that the plaintiff would have made the contract in any event, may properly be left to be borne by the defendant. In most cases it will be impossible for the defendant to engage successfully in any such speculative inquiry as to what the plaintiff would or would not have done on the hypothetical assumption that the erroneous representation had never been made to him. In Smith v. Chadwick (1884), 9 App Cas 187, 195-6 it is said by Lord Blackburn : 'In an ordinary action of deceit the plaintiff alleges that false and fraudulent representations were made by the defendant to the plaintiff in order to induce him, the plaintiff, to act upon them. I think that if he did act upon these representations, he shows damage; if he did not, he shows none. And I think the plaintiff in such a case must not only allege but prove this damage . . . . I do not think it is necessary, in order to prove this, that the plaintiff always should be called as a witness to swear that he acted upon the inducement . . . . I think that if it is proved that the defendants with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is a fair inference of fact that he was induced to do so by the statement'. It must often be impossible for the plaintiff himself to answer definitely, especially after a lapse of time, the question whether he would or would not have entered into the contract if the particular representation had not been made to him; but it is easy to answer the question whether the representation was or was not one of the inducing causes of the contract."

The learned authors' reference to causation of damage for deceit and their suggested distinction upon the cause of action in question serve as a reminder that in this case the learned trial judge was not dealing with an allegation of fraud and that much of what has been said on the subject under consideration was said in cases where rescission for fraudulent misrepresentation was in question. In courts exercising equitable jurisdiction an attitude to fraud sometimes prevailed which finds cogent expression by Lord Chelmsford L.C. in Smith v. Kay (1859) 7 HLC 750 at 759; 11 ER 299 at 303:

"But can it be permitted to a party who has practised a deception with a view to a particular end, which has been attained by it, to speculate upon what might have been the result if there had been a full communication of the truth?"

However, there is now further authority for the proposition that in an action for damages for deceit it is sufficient to show that the plaintiff might have abstained from the course of action or inaction alleged to have been induced if the misrepresentation had not been made, but not necessary to show that he would have so abstained : Field v. Shoalhaven Transport Pty. Ltd. (1970) 3 NSWR 96 at 100, 103-104 (per Asprey J.A., Mason J.A. concurring); Australian Steel and Mining Corporation Pty. Ltd. v. Corben (1974) 2 NSWLR 202 at 206-209 (per Hutley J.A., Moffitt P. and Samuels J.A. concurring); Peek v. Derry (1887) 37 ChD 541 at 584-585 (per Sir James Hannen). The proposition is, in my opinion, a proposition having effect in respect of causation of damage, and it is, in my opinion, a proposition contradictory of what is called the "but for" test in that context. But it is in my opinion a proposition which policy strongly favours as a concomitant of the proposition, which is so entrenched as to be ineradicable, that the misrepresentation is actionable whether or not it is the only consideration influencing the mind of the plaintiff to the action or inaction which causes damage. The difficulties inherent in applying a "but for" test of causation in relation to human psychological processes are so great, and have been so often and for so long remarked by eminent judges in cases of misrepresentation, that the proposition should in my opinion be accepted, notwithstanding the departure from the normal legal analysis of causation. (See Barnes v. Hay (1988) 12 NSWLR 337; Spencer Bower and Turner on Actionable Misrepresentation (3rd ed) para. 120.)

1. It was submitted by Mr. Nettle that the omission of all express reference (except one to be considered separately) by the learned trial judge to the question whether any of the statements made to Mrs. Cunningham and transmitted by her to her husband on 6 January 1987 had contributed to cause him to make the contract that day, or to the question whether, if the words "that is as good a report as you would get" had not been spoken to him, he would not have made the contract, demonstrated that his Honour had failed to consider that latter question. Mr. Nettle established by reference to the transcript of his final submissions to the learned trial judge and to a copy of his written submissions to the learned judge that he had submitted -
   (i) that an affirmative answer to the latter question was essential if the appellant was to be held liable on either cause of action;
   (ii) that the onus of proof on that question was on Mr. Cunningham;
   (iii) that there was no evidence that the statements "affected" or "made any difference to" Mr. Cunningham's decision to make the contract; and
   (iv) that under cross-examination Mr. Cunningham had conceded that, if the words, "that is as good a report as you would get," had not been spoken on the occasion the statements were made, he may still have entered into the contract.

1. The cross-examination to which Mr. Nettle had referred his Honour is recorded thus:
   

"Now if you had not been told that it was as good a report as you could get, but had only been told that Hebdean honors its account obligations and meets its commitments, would you have entered into the contract? --- If I was told that they met their commitments and conducted a satisfactory account and it came from my bank I would have entered into the contract. Can I put that precisely to the factual context. If you had been told by Mr Donnellan that he Mr Donnellan had inquired of the Westpac and had been told by the Westpac that Westpac said Hebdean conducts a satisfactory account and meets its commitments, and if Mr Donnellan had said nothing more, would you have entered into the contract? --- That is not just the case, is it?

No, I understand that.

MR B. THOMSON: Your Honour, with the greatest of respect surely this must be a hypothetical question, with the greatest of respect. The situation on his evidence did not arise. HIS HONOUR: Yes. How do you put it, Mr Nettle? MR NETTLE: Reliance, your Honour. HIS HONOUR: Pardon?

MR NETTLE: Reliance.

HIS HONOUR: Yes, but are you asking him to say what he would have done if something different had happened?

MR NETTLE: Yes, indeed. It goes squarely to reliance and to the substance of the cause of action, your Honour.

HIS HONOUR: Yes. I think the question is admissible, the question as to what the answer is. MR NETTLE: Mr Cunningham, if Mr Donnellan had said to you no more than this: he had inquired of the Westpac and been told by the Westpac that Hebdean conducted a satisfactory account and met its commitments, would you or would you have not entered into the Hebdean contract? --- In the instance of entering into the contract I was going on a message that was relayed by my wife to myself with the terms: that is as good a report as you can get.

I understand that? --- Now if that report had not had: that is as good a report as you can get, I may have gone and phoned Barry Donnellan myself and asked him his opinion of it. You may have? --- I may have. But you may also have entered into the contract? --- I may have."

The first of those answers may have been intended by the witness to be directed to a communication by a servant of the appellant about Hebdean as a customer of the appellant, rather than a communication by a servant of the appellant about another bank's communication concerning Hebdean as a customer of that other bank. It would in my opinion have been unsafe to treat the answer as referring to a communication of the latter kind. I understood Mr. Nettle to place reliance not on the first, but on the last answer recorded.

1. I accept Mr. Nettle's submission that the reasons for judgment do not expressly pose for decision the question whether any of the statements to Mrs. Cunningham did, upon transmission to Mr. Cunningham, contribute to cause him to make the contract. But it is not correct that those reasons ignore the question. Immediately after stating his finding as to what statements a servant of Westpac Banking Corporation had made to a servant of the appellant and what a servant of the appellant had said to Mrs. Cunningham by telephone on 6 January 1987, and immediately before stating his conclusions that "I am satisfied that N.A.B., in trade or commerce, engaged in conduct that was misleading or deceptive, when its officer reported to M. Cunningham for A. Cunningham as he did on 6 January 1987", and "that at that time N.A.B. owed to A. Cunningham a duty of care, arising out of the relationship of banker and customer, and that it was guilty of negligence in failing to discharge that duty adequately, having regard especially to its knowledge of his financial circumstances and the critical importance to him of obtaining a reliable check on Hebdean's credit-worthiness before he entered into the contract with it", the learned trial judge observed:
   

"To a customer in the position of A. Cunningham, there could hardly have been a more re-assuring statement by a bank familiar with the critical importance to him of the report than the final one, 'that is as good a report as you would get'. In my opinion, it was not justified on the facts known to N.A.B. There were significant qualifications to the Westpac report and it did not contain an opinion that Hebdean was good for $320,000, which was the fundamental question N.A.B. put to Westpac. An affirmative answer to this question would clearly have been a much better report on any reasonable view."

Further, his Honour had previously recorded the evidence given by Mr. Cunningham that, on listening to his wife's report of what the appellant's servant had said to her by telephone, "on the basis of that" he had signed the contract. He had also recorded the evidence of Mr. Cunningham: "It was of the utmost importance I get a good credit check on" Hebdean. There was, contrary to the submission of Mr. Nettle to the learned trial judge, much evidence to justify an inference that the statement, "that is as good a report as you would get", contributed to cause Mr. Cunningham to make the contract. If the passage of cross-examination I have quoted be put out of account, the evidence in my opinion raised a very strong inference indeed that those words contributed to cause Mr. Cunningham to enter into the contract. This is not a case, as Gould v. Vaggelas (1985) 157 CLR 215 was, of deceit, but the passage in the judgment of Wilson J. in that case (157 CLR at 237-239), upon which Mr. Nettle relied as stating the onus of proof in respect of "inducement", may be adapted to state the position in this case : it was, as I think, a case of a kind where in the general experience of mankind the facts spoke for themselves, where a defendant had made a false statement to a plaintiff and the statement was of such a nature as would be likely to induce him to enter into a contract and the plaintiff did enter into that contract and nothing more appears, so that common sense would demand the conclusion that the false statement played at least some part in inducing the plaintiff to enter into the contract.

1. Mr. Nettle, however, submitted that what was most pertinent in this case was what followed in the judgment of Wilson J. (157 CLR at 238-239):
   

"However, it is open to the defendant to obstruct the drawing of that natural inference of fact by showing that there were other relevant circumstances. Examples commonly given of such circumstances are that the plaintiff not only actually knew the true facts but knew them to be the truth or that the plaintiff either by his words or conduct disavowed any reliance on the fraudulent representations. It is entirely accurate to speak of an onus resting on a defendant to draw attention to the presence of circumstances such as those I have described in order to show that the inference of the fact of inducement which would ordinarily be drawn from the fraudulent making of a false statement calculated to induce a person to enter into a contract followed by entry into that contract should not in all the circumstances be drawn. But it is no more than an evidentiary onus - an obligation to point to the existence of circumstances which tend to rebut the inference which would ordinarily be drawn from the primary facts. When all the facts are in, the fact-finding tribunal must determine whether or not it is satisfied on the balance of probabilities that the misrepresentations in question contributed to the plaintiff's entry into the contract. The onus to show that they did is a condition precedent to relief and rests at all times on the plaintiff."

Here, Mr. Nettle submitted, Mr. Cunningham should be taken to have disavowed, in the passage of his evidence which has been quoted, reliance on the statement "that is as good a report as you would get." And, he submitted, even if this Court were not convinced that the passage quoted must result in a conclusion that Mr. Cunningham had failed to prove an essential element of each of the two causes of action, the learned trial judge's failure to refer to the evidence in that passage, or expressly to the "inducement" element in each cause of action, demonstrated a failure to consider, or at the least a failure to consider according to the requirements of the law, that essential element of "inducement" or, as it is sometimes labelled, "reliance".

1. Mr. Nettle claimed support for that last submission - that any consideration given to the issue of "inducement" had not been in accordance with law - in a passage from the learned trial judge's reasons for judgment which followed his Honour's consideration of the claims by the applicants against Westpac Banking Corporation ("Westpac"), which in turn followed the conclusion of his Honour's consideration of the claims against the appellant. His Honour stated his findings, which are not challenged in this appeal, that the statement to Mrs. Cunningham on 6 January 1987 misreported what a servant of Westpac in the Brisbane branch office had said to the appellant's servants (both by omitting and by adding words), and that the statement "that is as good a report as you would get" was not justified by what had been said by any servant of Westpac. Then followed this passage in the reasons for judgment:
   

"It would be mere speculation to seek to say what A. Cunningham would have done, had the Westpac report been accurately communicated to him, without the misleading description of its 'being as good a report as you could get'. The question does not arise, because the necessary factual basis for it has not been established. Accordingly the application, so far as it relates to Westpac, is dismissed."

These observations show the learned trial judge to be unaware, according to Mr. Nettle's submission, that, if Mr. Cunningham would have entered into the contract after hearing an accurate report of what the Westpac servant had said, without any comment on what that servant had said, the action against the appellant should, as a matter of law, be dismissed. In my opinion the submission cannot be accepted. In the first place, the context in which the observations were made show that his Honour was adverting, not to any aspect of the case against the appellant, but to the case against Westpac. Second, it had been strenuously submitted to the learned trial judge by counsel for the applicants in the proceeding that the speaking of the words actually spoken by the Westpac servant constituted misleading conduct and negligence. The observations were almost certainly intended, in my opinion, as a convenient way of indicating that no occasion arose to express any conclusion about those submissions because the words spoken by the Westpac servant had not been transmitted to Mr. Cunningham. In my opinion the observations raise no inference that his Honour may have held any erroneous opinion about any question of law relevant to the decision of a claim against the appellant.

1. I return to a consideration of the submission that the omission from the reasons for judgment of express reference to "inducement" as an element of each cause of action or to the evidence of Mr. Cunningham under crossexamination which has been quoted indicates that his Honour failed to give consideration to that element in accordance with the requirements of the law.

2. It is trite to say that words spoken under cross-examination are not legally required to be understood as communicating exactly what those words would be understood to communicate if they were carefully drafted, in written answers to written questions, by a person known to be able and willing to give exact expression to his thought. It was in my opinion open to his Honour to have found, as I believe I would myself have found, that Mr. Cunningham intended by the last answer in the passage quoted to communicate merely his inability to say whether or not, in the stated circumstances, he would have entered into the contract. So understood, the testimony, if believed, affords nothing "to obstruct the drawing of" an inference from the rest of the evidence that he would not in the stated circumstances have entered into the contract. Even if the answer be understood as communicating Mr. Cunningham's belief that entry into the contract in the stated circumstances was an eventuality having some probability, that is not inconsistent with the existence, as having also some probability, of the contrary eventuality. But I have stated my opinion that the law requires Mr. Cunningham to show no more than that in the stated circumstances he might not have entered into the contract. If that be so, the answer affords no obstruction to the drawing of the inference that he might not in the stated circumstances have entered into the contract.

3. There are in my opinion clear indications in the reasons for judgment to justify the conclusion that the learned trial judge had well in mind the requirements of the law subsumed under the rubrics "inducement" and "reliance", an unsurprising conclusion about a lawyer who has worked under the enlightenment of Holmes v. Jones (1907) 4 CLR 1692 for more than 50 years. That the learned judge failed to animadvert on a piece of cross-examination of the kind which Lord Halsbury LC. (in Arnison v. Smith (1888) 41 ChD 348 at 369) and Byrne J. (in Drincqbier v. Wood (1899) 1 Ch 393 at 404) have denigrated does not disturb my confidence in that conclusion. Nor does his Honour's failure to mention a submission which the order he made necessarily denies, in the particular circumstances of this case. Counsel for all parties in the court below made submissions, orally and in writing, on many issues of fact and questions of law. Cursory examination of them strongly suggests that they would have been of great assistance to the learned trial judge. But in my opinion on the unchallenged findings of primary facts made and stated by his Honour the case for Mr. Cunningham on "inducement" and "reliance" was very strong and did not call for any further comment than his Honour made.

4. In relation to the cause of action in negligence Mr. Nettle advanced a further submission that the learned trial judge had failed to identify the duty which the appellant owed Mr. Cunningham, in the sense that he had failed to describe the particular subject in relation to which a duty to exercise reasonable care and skill had existed and had been broken.

5. The paragraph which is quoted from the reasons for judgment in paragraph 9 of these reasons, and which immediately preceded the learned trial judge's conclusion of breach of s.52 and of negligence (also quoted in paragraph 9) in my opinion includes a statement of the breach of the duty of care : saying the words "that is as good a report as you would get" when the facts known to the appellant's servants did not justify that characterization of the "report" to which those words referred. The subject in relation to which the duty existed is also in my opinion clearly indicated by the passages quoted in paragraph 9 of these reasons from the trial judge's reasons, when those passages are read in the context of the whole of the rest of his Honour's reasons for judgment. That subject was the procurement from Westpac and transmission to Mr. Cunningham of information relevant to a decision whether Hebdean's financial position was such that Mr. Cunningham might prudently enter into a contract with Hebdean in the normal performance of which Hebdean would owe large sums of money to Cunningham without Cunningham's holding security for payment of those sums. The content of the duty breached was to exercise the reasonable care and skill appropriate to a banker, in procuring and transmitting information of that kind, not to give to its customer Mr. Cunningham an erroneous understanding of the significance, for the purpose of reaching that decision, of the statements transmitted from Westpac to Cunningham through its servants. All that also appears clearly, in my opinion, from the reasons for judgment.

6. None of the grounds of appeal has been established, in my opinion. Yet I think the declaratory order made was inappropriate. Although the parties' counsel assumed that damage flowed from the making of the contract and although before his Honour decided to deal first, and separately, with "liability", some evidence relevant to damages had been given, the severance from his Honour's consideration of the subject of damages made it inappropriate, in my opinion, to declare that Mr. Cunningham is entitled to damages. A declaration might appropriately have been made that on 6 January 1987 the appellant engaged in conduct done in contravention of s.52 of the Trade Practices Act 1974 and thereby induced Mr. Cunningham to enter into the specified contract on that day. A similarly framed declaration might have been made in relation to negligence. It was in my opinion necessary to include in any declaratory order a reference to the date of occurrence of the breach of s.52 or of the occurrence of the negligence, because the statement of claim alleged, and his Honour expressly found, that after 6 January 1987 the appellant again breached s.52 and was again guilty of negligence. After these considerations had been drawn to the attention of the parties' counsel on the hearing of the appeal no application to amend the notice of appeal was made. The notice of appeal ignores these considerations. And, so far as appears, the declaratory order his Honour made was never entered. In all the circumstances I think that the appropriate order for this court to make, if leave to appeal is necessary and is granted, is to dismiss the appeal with costs.

7. Mr. Nettle cited White v. Brunton (1984) QB 570 to justify his submission that the declaratory order against which the appeal is brought is not an interlocutory order. I do not think that the reasoning in that case can stand with the decision of the High Court in Carr v. Finance Corporation of Australia Ltd. (1981) 147 CLR 246. In my opinion the order was interlocutory. But I would grant leave to appeal and dismiss the appeal with costs.

JUDGE3

I have had the advantage of reading, in draft, the reasons for judgment formulated by Jenkinson J. For the reasons which he has expressed, I too would grant leave to appeal and dismiss the appeal with costs.