Aneve Pty. Limited & Ors. v. Bank of Western Australia Limited [2005] NSWCA 441

Aneve Pty. Limited & Ors. v. Bank of Western Australia Limited [2005] NSWCA 441 - NSWCA 2005 case summary — Zoe

[52]

I hope this helps you! Aniello Inanuzzi 29 On 14 January 2002, Earl Slick's lawyer confirmed that Mr. Slick would not agree to provide further funding to Barrington. 30 On 15 January 2002, Mr. McGarry emailed the Dransfield report to Mr. Blom's solicitors, requesting that it be provided to Mr. Blom, and suggesting that it be provided to Dr. Iannuzzi. However, it appears that Dr. Iannuzzi and Dr. Tsironis did not receive a copy until August 2002. 31 By an instrument dated 21 January 2002, Aneve guaranteed to BankWest repayment by Barrington of an advance of $1 million. 32 On 28 February 2002, Drs. Iannuzzi and Tsironis guaranteed to St. George the repayment of all moneys payable to it by Aneve, supported by securities over four pieces of real estate owned by Drs. Iannuzzi and Tsironis, and Dr. Tsironis's parents. When executing this guarantee, Dr. Iannuzzi and Dr. Tsironis each made a statutory declaration that he or she had received independent legal advice regarding the transaction, and there was a certificate given by their accountant Mr. Bellos that he had given each of them financial advice in respect of the transaction. 33 St. George then issued a Performance Bond dated 4 March 2002 to support the guarantee and indemnity, under which it undertook to pay BankWest on demand a sum of up to $1 million. This was later replaced by another bond dated 28 January 2003 containing the same terms. 34 On 13 May 2002, Mr. Lennon suffered a major stroke, from which he has not recovered; and Mr. McGarry formally assumed all responsibility for the Barrington account at BankWest. 35 The sale of Barrington's assets did not proceed quickly. In May 2002, Mr. Slick demanded full repayment of money owing to him, and the directors invited BankWest to appoint a receiver. BankWest did so. Ultimately, the assets of Barrington were sold for about $22 million, with receiver's expenses amounting to about $4 million. BankWest did not therefore recover all money owing to it, and it sought to call on the St. George Performance Bond. That gave rise to these proceedings.

[97]

Decision 48 I do not read the word "falsely" in par.[141] of the primary judge's decision as conveying a finding that Dr. Tsironis deliberately swore something she knew to be untrue. In my opinion, the gravamen of the criticism being made of her was that she was prepared to make a statutory declaration that she knew would be relied on by St. George, without checking whether it was true or not. In my opinion, the primary judge was correct to regard that as reflecting adversely on her credit. In those circumstances, the circumstance that the advice which Mr. Belos could have given was financial advice rather than legal advice is not of material significance. I note in any event that there is in evidence a certificate given by Mr. Belos that he did give financial advice to Dr. Tsironis. That certificate carries evidentiary weight as a business record, and the appellants chose not to call Mr. Belos to give evidence. This certificate was also provided by the appellants to St. George, presumably with the knowledge that St. George would rely on it. In those circumstances, it would be a reasonable inference that Mr. Belos did give financial advice to Dr. Tsironis, contrary to her evidence. 49 I do not read the paragraphs referred to as saying that Dr. Tsironis conspired with her husband to commit perjury: they are directed to unreliability of evidence, and do not address the question as to the explanation for the unreliability. In assessing evidence of this kind in cases such as this, in my opinion it is important to have in mind the considerations which were set out with admirable clarity by McLelland CJ in Eq. in Watson v. Foxman (2000) 49 NSWLR 315 at 318-9: Where in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously describe as "misleading") within the meaning of s52 of the Trade Practices Act (or s42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the Court (1) what the alleged conduct was, and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions of self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

[101]

Decision 52 In my opinion, there is no inconsistency between the main judgment and the costs judgment. For reasons given later in relation to the submissions concerning Dr. Iannuzzi, it was in my opinion well open to the primary judge to make a finding in this case that he gave deliberately false evidence on the question of inducement. In the main judgment, the primary judge found to the effect that Dr. Iannuzzi gave deliberately false evidence and that Dr. Tsironis's evidence was unreliable; but this does not mean that the primary judge could make a determination as to what was said and what was not said in the conversations. Particularly was this so in the absence of any evidence of the conversations by Mr. Lennon and in the absence of any record of the conversation either by Mr. Lennon or anyone else. 53 There is some force in the submissions that, for all the appellants knew at the time they commenced the proceedings, Mr. Lennon could have made a memorandum of the conversation on 29 December 2001, and also that Mr. Lennon may have made some recovery from his stroke of May 2002 and Mrs. Lennon may have been able to give evidence of the conversation; so that the judge's view that it was apparent to the appellants that their version of events would be largely uncontradicted could be considered as somewhat overstating the position. 54 It was conceded before the primary judge that, by reason of a Calderbank letter, an order for indemnity costs against the appellants as from 11 December 2003 was justified. The hearing took place in April and May 2004, so that what was in issue was whether the appellants should be liable for indemnity costs up to 11 December 2003. It is not clear how significant those costs would be; but it is reasonable to assume that the greater amount of costs of the proceedings were incurred after 11 December 2003. 55 In my opinion, the order for indemnity costs against Dr. Iannuzzi was plainly justified, and the primary judge's statement concerning the appellants' expectation that they would not be contradicted could not be considered a material error. In the light of the primary judge's finding that Dr. Iannuzzi gave deliberately false evidence on the question of inducement and set out to mislead the Court on this issue, the order for indemnity costs was appropriate. 56 The situation is less clear in the case of Dr. Tsironis. The justification for indemnity costs in her case must lie in her preparedness to make a statutory declaration which she knew would be relied on by St. George Bank without checking to see whether or not it was true; and in her acting in accordance with the wishes of Dr. Iannuzzi, in effect leaving it to him to determine whether or not proceedings should be commenced and how they should be conducted. A decision whether to award costs on an indemnity basis is a discretionary decision, and on the whole I do not think a sufficient basis is made out for appellate intervention in that decision in the case of Dr. Tsironis.

At a glance

Court

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Before

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Judgment (114 paragraphs)

Cases Cited (7)