Pollak v National Australia Bank S146/2002

The High Court of Australia heard an appeal in *Pollak v National Australia Bank* concerning a dispute between the appellant, Mr Pollak, and the respondent, National Australia Bank. The core of the disagreement related to the Bank's alleged breach of its duty of care to Mr Pollak in relation to a loan facility and the subsequent sale of security.

The central legal issues before the High Court were whether the Bank owed Mr Pollak a duty of care in relation to the provision of advice concerning the loan facility and its terms, and whether the Bank breached any such duty by failing to advise Mr Pollak of the risks associated with the facility, particularly in light of his financial circumstances and the nature of the investment. Further, the Court considered whether the Bank's conduct in relation to the sale of the secured property constituted a breach of duty.

The High Court, in its joint judgment, considered the nature of the relationship between a bank and its customer in the context of a loan transaction. Their Honours affirmed that while a bank owes a duty of care in its dealings with a customer, this duty is generally confined to the specific transaction and does not extend to providing comprehensive financial advice or assuming responsibility for the customer's investment decisions, unless a special relationship of reliance is established. The Court found that the evidence did not support the existence of such a special relationship in this instance, and therefore the Bank was not liable for failing to advise Mr Pollak on the risks of the investment or for the manner of the sale of the secured property.