Thannhauser, J. v Westpac Banking Corporation

[1989] FCA 421

IN THE FEDERAL COURT OF AUSTRALIA	)
QUEENSLAND DISTRICT REGISTRY	1 QLD G29 of 1989
GENERAL DIVISION	)

BETWEEN: JOHANNA THANNHAUSER

Applicant

AND: WESTPAC BANKING CORPORATION

Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	21 JULY 1989
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1.    paragraph 17 of the statement of claim be amended, so that the introduction reads:

"In the course of the said discussion, in March 1985, the respondent, through Mr Look, told the applicant ..."

2.    the costs of 18 July be costs in the proceedings;

3.    the costs of and incidental to today's hearing be taxed and paid by the respondent to the applicant.

NOTE :	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA	1
QUEENSLAND DISTRICT REGISTRY	1
GENERAL DIVISION	)

BETWEEN: JOHANNA THANNHAUSER

Applicant

AND: WESTPAC BANKING CORPORATION

Respondent

PINCUS J. 21 JULY 1989

EX TEMPORE REASONS FOR JUDGMENT

This matter came before me a few days ago on an application for directions, and on that occasion Mr Sheahan, for the respondent, said he wished to attack the statement of claim and the matter was adjourned to today for that purpose. Before coming to the details of the statement of claim, however, it is desirable to mention the history of the case briefly.

The application was instituted on 14 April 1989 and a directions hearing was conducted on 3 May at which the respondent's solicitor, M Kriewaldt, said a request for particulars would be delivered and he asked that that be done before the defence. He said that most of the allegations in the statement of claim should be particularised. After considerable discussion, I determined that a defence should be delivered by 17 May. It was, of course, necessarily implicit in that the

suggestion that particulars should be answered in advance of the
defence was rejected.

Then on 15 May the solicitors for the respondent wrote to the solicitors for the applicant, enclosing a request for particulars. The writing of that letter, in my opinion, should not have held up the filing of the defence. The letter of 15 May said, "We are not in a position to be able to have this defence settled prior to the provision of these particulars", which was exactly the proposition that had been rejected by me on 3 May.

However, it is correct, as Mr Sheahan has pointed out, that there was a lamentable delay of nearly two months in answering this letter, and, to some extent, that puts some fault on the other side. Nevertheless, it has to be said, and I think needs to be said, that the Court cannot function very well if its orders are simply ignored, as they were here.

The attack on the pleading today is based upon grounds of objection which were carefully drawn and have proved to be helpful. They will be marked "A" , initialled and dated and placed	with the papers. The general criticism made of the statement of	claim by Mr Sheahan is that it is hard to follow in some respects.
It is not neatly or carefully drawn and that is, in effect, conceded. I agree with the concession. I said in the course of argument, and I think it is worthwhile repeating, that I have adopted a policy of not striking pleadings out and insisting they be redrawn on that account, unless they are genuinely embarrassing
and unless a reasonably sympathetic reader of them would be incapable of ascertaining what is intended to be alleged.
It is unfortunate that pleadings are not more carefully drawn. One would expect in a case of this magnitude, that the statement of claim would be drawn with meticulous care, but it was not. However, I do not propose to strike it out on that account, and it is not seriously suggested that I do so.
I wish to take, not all of M r Sheahan's objections, but those of them which seem to have more substance and say what I think of them.
The first criticism which I intend to deal with is that it is complained that in para.7 there is no plea that the respondent knew or ought to have known the matters in para.6. To take one example, para.7 says that the respondent should have told the applicant of the risks inherent in borrowing foreign currency; it would have been neater if the pleading had contained an allegation that the bank knew of the risks. However, it seems to me to be reasonably answered by Mr Muir Q.C., for the applicant,
advanced. Without congratulating the applicant upon the gap in in saying that it. is obvious that is going to be the case
the pleading, I feel obliged to say that it does not seem to me to be one that needs to be filled and the point made on behalf of the respondent has not got any real substance.
In para.8 it is said that the respondent should have equipped Mr Look with training and skills to enable him to give
the advice which he gave to the applicant. The paragraph has caused me some difficulty. Mr Sheahan has made the point that if the advice was bad, it does not matter whether M Look was well-trained or not and if the advice was good, it, equally, does not matter. It is said by the counsel for the applicant that he is not obliged to confine the applicant's case to matters which are immediately causative as opposed to those which are more remotely causative. I do not, myself, see any logical answer to that. I would, however, be more inclined to do something about para.8 if it were true, as Mr Sheahan urges, that it is going to create difficulties in discovery and, more generally, in preparation, from the bank's point of view. Thinking about para.8 and looking at the very words it uses, it is hard to see that it is going to widen the scope of the inquiry greatly. It is particularly important to notice that all para.8(a) says is that Mr Look had not been equipped by any course of training. It does not seem to involve any inquiry into the bank's courses of training generally. One is only interested in quite a narrow subject and that is: was Mr Look trained in this specific area, namely, the advantages and disadvantages of borrowing foreign currency, or was he not? I cannot see that that involves a great
Although not enthusiastic about the presence of para.8, which deal of inquiry, and similar remarks may be made about (b). seems to me not likely significantly to advance the applicant's cause, I cannot see any justification for striking it out.
Paragraph 13 says that the respondent owed a duty to the applicant to advise her as to the most suitable currency or currencies in which the loans should be denominated from time to

time, and that the respondent did not do so. Mr Sheahan says no facts are pleaded to support the existence of the duty. I at first thought there was something in that, but on hearing Mr Muir,

I am persuaded there are sufficient facts; inconveniently, they

are scattered throughout the pleading, but I think there is enough to make the point sufficiently arguable for present purposes. The other point Mr Sheahan makes about para.13 is that there is nothing to show how a loss arose from it. There are merely general allegations of loss later in the pleading, for example at para.23.

I find some difficulty with this because I cannot, at the moment, see how the applicant can succeed on such an allegation other than by saying, e.g. "There should have been a swap to yen or English pounds because we know now that they moved the right way"; but that is retrospective thinking. I find it difficult to believe that the applicant can succeed on the basis that it was negligent to leave the loan in Swiss francs rather than move it to another currency, but I think I would be exceeding the function I have at this stage if I gave effect to that view.

I do not think it is right to say, as Mr Sheahan suggests, that

the causal link is obscure. The nature of the causal link alleged	is clear enough, namely that if you shifted into better currency,
you would not have lost the money. My doubt is whether, although it is the sort of case which seems, on the face of it, rather fanciful, one may properly say it is hopeless; I will not strike out para.13.

Paragraph 17 is defective in that, as emerged in the course of discussion, it should have read somewhat differently. I will amend it now. Paragraph 17 will be amended so that instead of "In the course of the said discussions", it will say, "In the course of the said discussion, in March 1985". The introduction to para.17 will read, in whole:

"In the course of the said discussion, in March 1985, the respondent, through Mr Look, told the applicant ..."

And that amendment cures that problem.

The other point that Mr Sheahan makes about para.17 is that it is not pleaded that the things said to the applicant were false, inaccurate, or assuming they were expressions of opinion, that they were not held or not reasonably held. Mr Muir says: "They are said to be wrong, clearly enough, later on, and the way in which they are wrong is obvious enough." For example, it is apparently going to be said that it was necessary and appropriate to hedge the loan. With some doubt about the matter, I decide that that is probably good enough and that the pleading can stand.

been left to guess about the point which Mr Sheahan raises. But	It would have been .better, of course, if the respondent had not
on looking at para.17, I suppose it is reasonably evident that, reading it with para.21, it is intended to involve a negation of the propositions in (a), (b) and (c) of para.17. So Mr Sheahan has only that limited success on para.17 in having the minor amendment made.
In relation to para.21, it is said by Mr Sheahan that it does not tie in neatly with para.lE(b), which says that the applicant should have been told that she could have repaid the loan. I am of the view that this is a most unpromising allegation. It seems to involve the proposition that the applicant did not know that she could repay the loan which looks a bit fanciful; I am tempted to strike it out as being frivolous. However, it is true, as Mr Muir implies, that it has to be a very clear case to justify a Court in doing that, even in relation to a pleading which seems to cry out for some pruning to reduce it to what are likely to be the real issues. I will not do anything about para.lE(b) or about its relationship with para.21.
Paragraph 20 is said to be embarrassing, in effect, because it alleges inconsistent matters. I cannot see that there is anything very significant in that complaint. It is evident enough that if the Court found that the applicant's failure to repay the loan was due to unlawful acts on the part of the respondent, the loss would be a certain figure, which no doubt would be easily calculable, and if the Court found under para.2O(b) that there should have been a change of the loan to
yen, I suppose the loss is easily calculable again.
The result is that the application fails except to the extent that I have amended para.17.
The order will be that the costs of 18 July will be, as Mr Sheahan urges, costs in the proceedings. Although I am by no means of the view that the application was frivolously brought, it
has, in substance, failed, and I feel obliged to order the costs of today against the bank. The order will be that the costs of and incidental to today's hearing be taxed and paid by the respondent to the applicant.

I c-rtify that this and the s.v.n	preceding pages
a r e a true copy of the reason.	f o r judgmmnt herain
of Hie Honour Hr Justic* Pincus