Kojic v Commonwealth Bank of Australia [2016] FCA 368

Kojic v Commonwealth Bank of Australia [2016] FCA 368

The CBA was liable because, attributing to it the combined knowledge of Coombe and Barnden in what was in substance one settlement transaction, it knew that the Kojics were making the Kojic payment to obtain a meaningful half interest in the property, while the CBA mortgage securing the Blanusa interests' indebtedness would make that expectation ineffective and would improve the CBA's secured position at the Kojics' expense. It was contrary to good conscience for the CBA to participate in and benefit from the settlement in those circumstances. McDonald was liable because, in the circumstances, he owed the Kojics duties of reasonable care and skill and failed adequately to warn them of the...

Jurisdiction
Australia
Judgment Date
15 April 2016
Procedural Posture
Application Concerning Claims for Unconscionable Conduct, Misleading and Deceptive Conduct, Breach of Contract, Breach of Duty of Care, Breach of Fiduciary Duty and Trust Related Relief Arising From a Property Settlement and Bank Financing / Final Reasons for Judgment on Liability and Damages; Costs to Be Heard
Outcome
Judgment for the Kojics against the Commonwealth Bank of Australia for $636,796.47, and judgment for the Kojics against Duncan Robert McDonald for $159,199.12; the liabilities were not cumulative and costs were reserved for further hearing.
Legal Topics
['unconscionable Conduct' 'knowledge of a Corporation' 'aggregation of Knowledge of Bank Officers' 'mortgage Security' 'unsecured Loan' 'contributory Negligence' 'apportionment of Liability' 'measure of Damages' 'pre Judgment Interest']
['banking and Finance' 'consumer Law' 'equity' 'professional Negligence' 'conveyancing' 'damages'] ['unconscionable Conduct' 'knowledge of a Corporation' 'aggregation of Knowledge of Bank Officers' 'mortgage Security' 'unsecured Loan' 'contributory Negligence' 'apportionment of Liability' 'measure of Damages' 'pre Judgment Interest']

Case Brief

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Procedural Posture

Application Concerning Claims for Unconscionable Conduct, Misleading and Deceptive Conduct, Breach of Contract, Breach of Duty of Care, Breach of Fiduciary Duty and Trust Related Relief Arising From a Property Settlement and Bank Financing / Final Reasons for Judgment on Liability and Damages; Costs to Be Heard

Legal Issues

  1. 1 ['Whether the Commonwealth Bank of Australia had knowledge, through its officers, that the Kojic payment was being made in the belief that it would secure a half interest in the property when the CBA mortgage would in practical effect leave no residual equity for the Kojics.' 'Whether the knowledge of separate CBA officers dealing with different clients could be aggregated and attributed to the CBA in the circumstances of the settlement.' "Whether the CBA's participation in the settlement and acceptance of the benefit of the Kojic payment constituted unconscionable conduct under the Trade Practices Act 1974 (Cth) or equivalent ASIC Act provisions." 'Whether McDonald owed the Kojics contractual or tortious duties as conveyancer or adviser, and whether he breached those duties by failing adequately to warn them of the consequences of proceeding.' 'Whether damages should be reduced for contributory negligence or apportioned among the CBA, McDonald and Blanusa or SCS.' 'What measure of damages and pre-judgment interest should be awarded.']

Ratio Decidendi

The CBA was liable because, attributing to it the combined knowledge of Coombe and Barnden in what was in substance one settlement transaction, it knew that the Kojics were making the Kojic payment to obtain a meaningful half interest in the property, while the CBA mortgage securing the Blanusa interests' indebtedness would make that expectation ineffective and would improve the CBA's secured position at the Kojics' expense. It was contrary to good conscience for the CBA to participate in and benefit from the settlement in those circumstances. McDonald was liable because, in the circumstances, he owed the Kojics duties of reasonable care and skill and failed adequately to warn them of the...

Court Disposition

Judgment for the Kojics against the Commonwealth Bank of Australia for $636,796.47, and judgment for the Kojics against Duncan Robert McDonald for $159,199.12; the liabilities were not cumulative and costs were reserved for further hearing.

Orders

  • ['Judgment in favour of the Kojics against the CBA in the sum of $636,796.47.' 'Judgment in favour of the Kojics against McDonald for 25% of that amount, namely $159,199.12.' 'The liability of the CBA and McDonald is not cumulative.' 'The Court will hear the parties as to costs.']