ANZ Banking Group Ltd v PA Wright & Sons Pty Ltd [1999] NSWSC 628

Procedural Posture

Equity Division Commercial List Proceedings by a Bank to Recover Indebtedness, Obtain Possession Under Mortgages and Rectification, With Defendants' Cross Claim Alleging Misrepresentation, Negligent Advice, Breach of Fiduciary Duty, Estoppel, Unconscionable Conduct and Proposed Contract Amendments / Reasons for Judgment After Trial, Including Consideration of Applications to Amend the Cross Claim and Adduce or Rely on Further Evidence

Legal Issues

1. 1 ['Whether the long-standing banker/customer relationship between the bank and the Wright group gave rise to a fiduciary relationship or fiduciary obligations analogous to a joint venture.' "Whether statements made by bank officers, particularly at the 30 June 1988 meeting, amounted to actionable representations or advice that the bank would support the group's ten-year plan and require repayment only from surplus cashflow while adequate security remained." 'Whether the defendants relied on those alleged representations so as to found equitable estoppel, damages or equitable compensation.' 'Whether the bank acted unreasonably or in breach of an implied contractual term in exercising rights under the loan facilities and security documents, including by requiring debt reduction, asset sales and control of working capital.' 'Whether the defendants should be granted leave to further amend the cross-claim after the hearing to plead a contract claim based on an implied term of reasonableness.' "Whether the bank's conduct caused the loss of the Coles boxed beef supply arrangement or other expectation losses." 'Whether the bank was entitled to judgment for the debt and orders for possession, rectification and costs.']

Ratio Decidendi

The cross-claim failed because the evidence did not establish a fiduciary relationship, clear actionable representations, reliance sufficient for estoppel, causation of the alleged Coles or expectation losses, or any unreasonable exercise of contractual rights warranting relief. The 30 June 1988 meeting showed general bank support for the group's strategy, but not the clear and relied-upon commitment alleged. After the Coles arrangement failed and independent reports questioned viability without asset sales, the bank was entitled to require orderly debt reduction and control facilities. Any amendment to plead a contract claim would be futile. The bank was therefore entitled to judgment...

Court Disposition

Verdict and judgment for the plaintiff/cross-defendant; cross-claim dismissed; proposed contract amendment would be futile; defendants/cross-claimants to pay the plaintiff's costs.

Orders

• ['Verdict for the plaintiff in the sum of $31,911,666.40 together with interest thereon in an amount to be calculated by the parties.' 'Orders in terms of paragraphs 5, 5A, 6 and 7 of the Second Amended Summons, save that execution of the writ of possession is stayed pending final orders as to interest and costs.'...