Shellim v Commonwealth Bank of Australia

Shellim (the appellant) brought proceedings against the Commonwealth Bank of Australia (the respondent) in the Supreme Court of New South Wales. The dispute concerned the respondent's alleged breach of duty in its dealings with the appellant, particularly in relation to a loan facility and subsequent enforcement actions. The matter proceeded to the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the respondent owed the appellant a duty of care in its dealings, and if so, whether that duty had been breached. Specifically, the court considered whether the respondent had acted in breach of any such duty by failing to advise the appellant of alternative financing options or by its conduct in relation to the enforcement of security over the appellant's assets. The court also examined whether the respondent had acted in a manner that was unconscionable or in breach of implied terms of good faith in its contractual relationship with the appellant.

The Court of Appeal found that the respondent did not owe the appellant a duty of care in the circumstances of the case. The court held that the relationship between a bank and its customer, in the context of a commercial loan facility, did not ordinarily give rise to a duty of care beyond the contractual obligations. The court reasoned that the appellant was a sophisticated commercial party who had entered into the loan agreement with full knowledge of its terms and the potential consequences of default. The court further found no evidence of unconscionable conduct or breach of implied good faith. The appeal was dismissed.