Van Rheeden, R.T. & Anor. v Westpac Savings Bank Ltd

[1993] FCA 225

Re: RICHARD THOMAS VAN RHEEDEN and ROBYN LESLEY VAN RHEEDEN
And: WESTPAC SAVINGS BANK LIMITED
No. G939 of 1992
FED No. 225
Number of pages - 8
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Wilcox(1) and Hill(1) JJ

CATCHWORDS

Trade Practices - misleading and deceptive conduct - appeal from decision as to the reliability of evidence given by a witness - whether documents were tendered for limited purposes - whether correct use made of documentary evidence.

Trade Practices Act 1974 (Cth) s.52

HEARING

SYDNEY, 22 February 1993

#DATE 21:4:1993

Counsel for the appellants: B.W. Rayment QC

P.K. Kintominas

Solicitors for the appellants:Benjamin and Khoury

Counsel for the respondent: B.W. Walker

Solicitors for the respondent:Corrs Chambers Westgarth

ORDER

The Court orders that:

1. The appeal be dismissed.

2. The appellants pay the costs of proceedings.

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

JUDGE1

DAVIES, WILCOX AND HILL JJ This is an appeal from a judgment of a single Judge of the Court, Gummow J. His Honour dismissed an application brought by Richard Thomas Van Rheeden and his wife, Robyn Lesley Van Rheeden, against the respondent, Westpac Savings Bank Limited, in which the allegation was made that an employee of Westpac, Mr R.G. Anderson, who was the manager of Westpac's Mona Vale Branch, so conducted himself as to mislead and deceive Mr and Mrs Van Rheeden in breach of s.52 of the Trade Practices Act 1974 (Cth). Reliance was also placed upon the common law principles of negligence. The trial Judge preferred the evidence of Mr Anderson to that of Mr and Mrs Van Rheeden and dismissed the claim. On the cross-claim brought by Westpac, his Honour ordered that a writ of possession be issued in respect of a property which was the matrimonial home of Mr and Mrs Van Rheeden.

1. The problems of Mr and Mrs Van Rheeden commenced in late 1987, when Mr Van Rheeden entered into contracts to purchase from a developer three units in a large development to be named "Leeward Tower", which was then under construction on the Gold Coast, Queensland. Deposits totalling $117,500 were paid by instalments, with settlement due early in April 1989.

2. By March 1989, Mr Van Rheeden was faced with raising finance to acquire the 3 units or with failure to complete. To remind Mr Van Rheeden of his obligations, the agent for the developer wrote a letter of 31 March 1989 which stated, inter alia:-
   

"History also shows that the developer has pursued non-performance in settlements through the Courts with total success for settlement, interest costs, and in many cases significant penalty damages."

1. Late in February or during March 1989, the position with regard to the Queensland units was discussed with Mr Anderson. Mr Anderson was not told, or was not clearly told, that Mr Van Rheeden had been seeking to sell the units for some time without success. Mr Anderson said to Mr Van Rheeden that he did not have to expose himself to breach of the contract in that Westpac could finance the purchase provided that the value was there. Mr Anderson gave to Mr Van Rheeden the names of two valuers on the Gold Coast. On 15 March 1989, one of those firms forwarded a valuation which indicated that the total value of the units was $1.28m. Mr Van Rheeden then sought finance from Mr Anderson. Westpac provided a loan of $1.26m, security being taken over the units and the matrimonial home.

2. On 10 March 1989, Mr Anderson visited Mr and Mrs Van Rheeden at their home. The trial Judge made the finding that:
   

"Mr Van Rheeden suggested that the property (the matrimonial home) itself would now be worth between $1.1m and $1.2m. This did not strike Mr Anderson as exorbitant."

Mr and Mrs Van Rheeden contended that Mr Anderson had volunteered the value of $1.1m to $1.2m and that this conduct was negligent, misleading and deceptive. However, as it is not uncommon for bank managers to make informal comments about value, as Mr Anderson believed that the matrimonial home was worth about $1.1m, and as this value was in line with other opinions expressed at about that time, this allegation provides little basis for a finding against Westpac.

1. The case of misrepresentation put by Mr and Mrs Van Rheeden does not emerge clearly from the evidence. Much emphasis was placed upon the fact that Mr Anderson had expressed to them his opinion that they would be foolish to incur a loss of their deposits when they had ample assets to obtain bank finance. Mr Anderson agreed that he had encouraged this application for finance. In retrospect, if it appears, although this is by no means obvious, that it may have been preferable for Mr and Mrs Van Rheeden not to complete the transactions and to accept the loss of their deposits and the risk of being sued, this fact alone would not show that Mr Anderson's opinion was not genuinely held or was negligently arrived at. We have difficulty in seeing that, even on their own version of the facts, Mr and Mrs Van Rheeden had a good cause of action against the bank.

2. However, his Honour, in dismissing the proceedings, did not accept the version of events deposed to by Mr and Mrs Van Rheeden. It is this circumstance that gives rise to the appeal.

3. The appellants argue that the trial Judge should not have found Mrs Van Rheeden to be an unreliable witness. The paragraph of his Honour's reasons which is under challenge read as follows:-
   

"I do not regard Mrs Van Rheeden as a reliable witness on any contentious issues. She is not at fault for this. Mrs Van Rheeden plainly was under severe emotional strain throughout her oral evidence. She described herself as having been panic stricken whilst giving evidence and as having had difficulty in hearing and understanding questions. She broke down on several occasions whilst in the witness box. Other evidence, the details of which should not be set out here, is that she has received medical treatment for a depressive condition since at least 1987. The present crisis in family financial affairs and the pressure of the trial has exacerbated her condition. She deeply fears the consequences of the loss of the Newport house and feels very strongly that a great wrong has been done by the Bank. The resulting animus against the Bank has distorted Mrs Van Rheeden's recollection, particularly of the events in the crucial period in early 1989."

1. Plainly, Mrs Van Rheeden had been under severe emotional strain throughout her oral evidence. As she said at the commencement of her re-examination in answer to her own counsel:-
   

"I became panic stricken ... and very often I couldn't - my brain simply wasn't functioning. I couldn't understand questions and it wasn't even that I couldn't understand them, sometimes I just couldn't hear them. And many times when I was taking that length of time, it was trying to recall what was actually said."

1. It was not in dispute that, over the relevant period, Mrs Van Rheeden had been receiving psychiatric treatment for a depressive or emotional condition, and that the financial problems which faced Mr and Mrs Van Rheeden had exacerbated that condition. Counsel for Mr and Mrs Van Rheeden in his opening mentioned Mrs Van Rheeden's psychiatric treatment and he abandoned as a separate head of damage a claim by Mrs Van Rheeden that the conduct of the Bank had affected her health. There are many references in the transcript to Mrs Van Rheeden's condition, and on more than one occasion she said, "I was very ill at that time". The precise nature of Mrs Van Rheeden's condition is not clear, although the first document amongst a bundle of documents produced on subpoena from a psychiatrist, Dr Richard Barnard, referred to "my depression". Dr Barnard's documents show that Mrs Van Rheeden was receiving treatment and medication for her condition over the period of Mr Anderson's involvement.

2. Moreover, as the trial Judge noted, Mrs Van Rheeden had an animus against Mr Anderson and Westpac. She said in the course of her evidence:-
   

"I didn't go into the considerations of how the document (the mortgage) came into being which was, as far as I'm concerned, by way of fraud; misleading, deceit. ...

I suggest that Mr Anderson was a very ambitious man and that he had money to put out and saw a way of putting it out and I'd say that he very much led us up the garden path to his own ends."

This must have seemed to the trial Judge to be an extraordinary allegation against Mr Anderson.

1. There was much other evidence which also supported the rejection of the evidence of Mrs Van Rheeden and, ultimately, his Honour's preference for Mr Anderson's evidence over that of both Mr and Mrs Van Rheeden. His Honour had before him the sequence of events and he preferred the facts as described in the evidence of Mr Anderson to those as described by Mr and Mrs Van Rheeden. Moreover, a letter of complaint written by Mrs Van Rheeden to Westpac on 8 November 1990 did not complain of the matters of which she gave evidence. On the contrary, she enclosed a copy of a letter which Mr Van Rheeden had written to Westpac on 15 August 1990 and said:-
   

"From the letter it is also evident our present predicament would not have ensued had Richard not relied upon Westpac's professional advice."

Mrs Van Rheeden's letter did not specify as a subject of complaint any statement which Mr Anderson had made in her presence.

1. Thus, there were many reasons for rejecting the evidence of Mrs Van Rheeden. Moreover, it was inevitable that the reasons which led the trial Judge to prefer Mr Anderson's evidence to that of Mr Van Rheeden would also have preferred him to reject the evidence of Mrs Van Rheeden.

2. Counsel for the appellants submitted that the trial Judge should not have relied on the notes of Dr Barnard which were in evidence because, it was argued, those notes were put in for a limited purpose and did not show that Mrs Van Rheeden was suffering from a medical condition which precluded her from giving reliable evidence.

3. The documents of Dr Barnard went into evidence in the circumstance that counsel for Westpac had put to Mrs Van Rheeden that she had never complained about Mr Anderson's conduct to the doctors from whom she had been receiving treatment. Mrs Van Rheeden replied that she had complained of this to her doctors. She was cross-examined as follows:-
   

"You see, what I suggest to you is that it was not until much later, some time either very late in 1990 or some time in 1991, that it occurred to you that it would be possible to blame the bank and in particular Mr Anderson for what by then had turned into a very grave financial emergency for your family. What do you say to that?---I say that Mr Anderson's advice most certainly misled us. But, that was a matter, is it not, about which you remained silent until at the very latest, very earliest I should say, very late 1990 or early 1991?-- No, that's not correct. You did not raise it with the bank, did you?---No, I was very ill. It was raised with several doctors. You did not raise it with Dr Barnard, did you?---Yes, I raised it with Dr Barnard and with Dr Henry Bernard."

Counsel for Westpac then tendered Dr Barnard's notes which disclosed no such complaint. There was no objection to the tender.

1. The tender was not made for the purpose of showing that Mrs Van Rheeden suffered from a medical condition which reflected upon her ability to give reliable evidence. Nevertheless, the notes were not received for any limited purpose and his Honour was bound to read them, if only cursorily. The notes did amplify the point, which was in any event made clear by many passages in the evidence and in counsel's opening, that Mrs Van Rheeden had been receiving psychiatric treatment over the relevant period and that the financial affairs resulting from the acquisition of the Gold Coast units had played some part in her condition. There was no error in the use made by the trial Judge of the notes, which it may be assumed, he would have looked at only briefly.

2. A second submission in the appeal was that his Honour used Dr Barnard's notes as an indication that Mrs Van Rheeden suffered from a medical problem which, of its very nature, precluded her from giving reliable evidence. However, his Honour's judgment did not deal with the matter in that way. The second sentence of the challenged paragraph reads: "She is not at fault for this." His Honour obviously wished to emphasise that he was not imputing to Mrs Van Rheeden a deliberate falsehood but rather that, due to her emotional state and to her animosity towards Westpac, he did not consider her evidence to be reliable. His Honour drew his conclusions from his observation of Mrs Van Rheeden in the witness box and from the evidence which she gave.

3. It was also submitted that the trial Judge misunderstood Dr Barnard's notes. It may be inferred from his Honour's reference to the date 1987, that his Honour had reference to a page in the documents produced by Dr Barnard which was a typed page headed "Dr Henry Bernard" and which set out dates of consultations and treatment. His Honour may well have looked at that document as it was legible, whereas the photocopies of Dr Barnard's handwritten notes were largely illegible. Counsel are agreed that, as the dates recorded on this typed page and the dates of Mrs Van Rheeden's consultations with Dr Barnard do not coincide, the page probably referred to Mr Van Rheeden's consultations with Dr Bernard, the subject of many of which were recorded as "Depression". It was submitted that his Honour was misled thereby as to the nature of Mrs Van Rheeden's condition and as to the period during which she suffered problems.

4. However, the point made is of no significance. The fact that the particular page related to Mr Van Rheeden adds nothing to the veracity of the evidence given by Mr and Mrs Van Rheeden.

5. No ground for upsetting the findings of the trial Judge has been established. The appeal must be dismissed with costs.