Whiting v Commonwealth Bank of Australia

The plaintiff, Mr. Whiting, brought proceedings against the Commonwealth Bank of Australia (the Bank) in the Supreme Court of New South Wales. Mr. Whiting alleged that the Bank had breached its duty of care to him as a customer by failing to adequately warn him of the risks associated with a particular investment product, namely a managed fund. The dispute ultimately proceeded to the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the Bank owed Mr. Whiting a duty to warn him of the risks inherent in the managed fund investment, and if so, whether that duty had been breached. This involved considering the nature of the relationship between a bank and its customer in the context of providing investment advice or facilitating investment, and the extent of the Bank's obligations in relation to disclosure of risks.

The Court of Appeal found that the Bank did not owe Mr. Whiting a duty to warn him of the risks associated with the managed fund. The Court reasoned that the Bank's role was primarily that of a facilitator, providing access to the investment product rather than offering specific financial advice. The terms of the agreement between Mr. Whiting and the Bank, and the nature of the product itself, indicated that the responsibility for understanding and accepting the investment risks lay with Mr. Whiting. The Court applied principles concerning the scope of a bank's duty of care, distinguishing between providing general banking services and offering bespoke financial advice, and concluded that the Bank had not assumed a duty to advise on the merits or risks of the investment.