Investec Bank v Naude [2014] NSWSC 165

Investec Bank v Naude [2014] NSWSC 165

Mr Naude failed to prove the alleged representations and his evidence was not accepted unless corroborated, objectively probable or against interest. The facility documents made clear that second tranche finance was not promised and was subject to the Bank's credit committee; Mr Naude understood and accepted that risk. The Bank's later negotiations, insistence on security and conditions, and refusal to advance further funds when conditions were not met were directed to legitimate commercial protection and were not unconscionable in all the circumstances. The Castleworld misleading conduct defence also failed because the alleged representation was not proved, was at most as to a future...

Jurisdiction
Australia
Judgment Date
21 February 2014
Procedural Posture
Proceedings to Enforce Guarantees of Loans Made by a Bank to Companies Controlled by the Defendant, With Defences and Cross Claim Alleging Misleading or Deceptive Conduct and Unconscionable Conduct. / Principal Judgment After Hearing
Outcome
Judgment for the plaintiff against the defendant for $10,382,342.21 with costs; judgment for the cross-defendant against the cross-claimant on the cross-claim with costs; costs to be assessed on the indemnity basis.
Legal Topics
['enforcement of Guarantees' 'misleading or Deceptive Conduct' 'statutory Unconscionable Conduct' 'asic Act Ss 12 CB and 12 Cc' 'jones V Dunkel Inference' 'credibility of Witnesses']
['banking and Finance' 'guarantee and Indemnity' 'equity' 'consumer Protection and Financial Services'] ['enforcement of Guarantees' 'misleading or Deceptive Conduct' 'statutory Unconscionable Conduct' 'asic Act Ss 12 CB and 12 Cc' 'jones V Dunkel Inference' 'credibility of Witnesses']

Case Brief

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Procedural Posture

Proceedings to Enforce Guarantees of Loans Made by a Bank to Companies Controlled by the Defendant, With Defences and Cross Claim Alleging Misleading or Deceptive Conduct and Unconscionable Conduct. / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the Bank was entitled to judgment against Mr Naude under guarantees of the second Powerstar facility and the Castleworld facility.' "Whether Mr Naude's acceptance of the second Powerstar guarantee was induced by misleading or deceptive conduct by the Bank." "Whether the Bank's conduct concerning the second Powerstar facility was unconscionable for the purposes of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth)." 'Whether Mr Naude was induced by misleading or deceptive conduct to cause Castleworld to complete the Bookara transaction and to enter his guarantee.' 'Whether any inference should be drawn from the failure to call Mr Hamer.']

Ratio Decidendi

Mr Naude failed to prove the alleged representations and his evidence was not accepted unless corroborated, objectively probable or against interest. The facility documents made clear that second tranche finance was not promised and was subject to the Bank's credit committee; Mr Naude understood and accepted that risk. The Bank's later negotiations, insistence on security and conditions, and refusal to advance further funds when conditions were not met were directed to legitimate commercial protection and were not unconscionable in all the circumstances. The Castleworld misleading conduct defence also failed because the alleged representation was not proved, was at most as to a future...

Court Disposition

Judgment for the plaintiff against the defendant for $10,382,342.21 with costs; judgment for the cross-defendant against the cross-claimant on the cross-claim with costs; costs to be assessed on the indemnity basis.

Orders

  • ['Direct entry of judgment for the plaintiff against the defendant in the sum of $10,382,342.21.' 'Direct entry of judgment for the cross defendant against the cross claimant on the cross claim.' "Order the defendant/cross claimant to pay the plaintiff's costs of the action and the cross claim." 'Direct that those...