Stern v National Australia Bank Ltd

Stern v National Australia Bank Ltd is a case involving the appellants, Mrs Stern and Dr Pollak, who sought damages for deceit against the National Australia Bank (the Bank). The appellants claimed that the Bank made false representations regarding the enforceability of a "due on sale" clause in a loan agreement secured by property in Van Nuys, Los Angeles. The primary judge dismissed the appellants' claims, finding that the alleged conversation with the Bank's representative, Mr Kirschbaum, did not occur. The Bank cross-appealed against the refusal to order that its costs be paid on an indemnity basis.

The legal issues before the court involved the existence and effect of the alleged conversation between Dr Pollak and Mr Kirschbaum and the enforceability of the "due on sale" clause in the mortgage agreement. The court had to determine whether the Bank made the representations claimed by the appellants and, if so, whether those representations constituted deceit. Additionally, the court had to assess the appropriateness of the costs order.

The court's reasoning focused on the lack of evidence supporting the existence of the alleged conversation. The primary judge highlighted the absence of any records or correspondence confirming the conversation, the implausibility of the Bank's representative advising that the assumption agreements would extinguish the appellants' liabilities, and the failure of the appellants to raise the conversation in subsequent dealings with the Bank and in court proceedings. The judge concluded that the conversation did not occur and dismissed the appeal. The cross-appeal regarding the costs order was also dismissed.

In conclusion, the court upheld the primary judge's decision, dismissing both the appeal and the cross-appeal with costs. The court found no merit in the appellants' claims of deceit and rejected the Bank's argument for an indemnity costs order.