Garrett v Westpac Banking Corporation

REASONS FOR JUDGMENT 1 This application was made on 3 February 2007 accompanied by a statement of claim. The facts that the applicant relies upon are set out in paragraphs [2]-[6] below (using the persons' and entities' names as they appear in that document). 2 The applicant as trustee of the Andrew Garrett Trust No 3 holds an account at the Hutt Street Branch of the first respondent. 3 In October 2006, the applicant approached Robert Gray of Creditnet seeking funding of AUD$350m for the purchase of assets owned by Fosters Wine Estates. On 16 December 2006, Mr Gray confirmed that US$300m would be made available for the applicant's proposed bid for those assets. On 18 December 2006 Creditnet issued an International Sight Draft of US$350m in favour of Cullen Capital (the first Sight Draft), which was subsequently endorsed to the applicant as trustee of the Andrew Garrett Family Trust No 3. On 4 January 2007, the applicant received and deposited the first Sight Draft with the first respondent and instructed that it be sent to the second respondent (an employee of the first respondent) for his attention. 4 On 31 December 2006, the applicant agreed to hold on trust for Corporate Investments STID another International Sight Draft issued by Creditnet Bank in the amount of USD$11b (the second Sight Draft) drawn on the account of Dr Zvonko Berdik-Albert in favour of Gadens Lawyers. The second Sight Draft was intended for use in a bid for 100% of the issued capital in Qantas Ltd. On 2 January 2007, the applicant made an offer in writing to purchase 100% of the issued capital in Qantas Ltd. On 3 January 2007, the applicant deposited the second Sight Draft with the first respondent, by then endorsed to him by Gadens Lawyers. At that time, the applicant requested that the second Sight Draft be sent to the attention of the second respondent. 5 On 5 January 2007, the second respondent confirmed by telephone that he had received the first and second Sight Drafts and that he would investigate them. From 8 January 2007, the applicant had a number of communications with the second respondent, culminating in the second respondent suggesting on 11 January 2007 that he would return the first and second Sight Drafts to the applicant. During this time the second respondent had spoken about the first and second Sight Drafts with the third respondent (also an employee of the first respondent). 6 On 12 January 2007, Mr Gray (of Creditnet) told the applicant that he (Mr Gray) had been told that Dr Albert, on whose account the second Sight Draft had been drawn, had been told by the Office of Foreign Asset Control with the US Treasury that it (OFAC) had confirmed the two Sight Drafts to the first respondent and that the funds were available for collection. The applicant requested that the first respondent confirm that it had investigated the genuineness of the first and second Sight Drafts. The applicant received no response to that request. (Why Dr Albert may have received information about the first Sight Draft is not explained). Both Sight Drafts, on their face, set out the account held with OFAC from which funds could be drawn. 7 The applicant claims that the first respondent, by the second and third respondents, failed to investigate the genuineness of the first and second Sight Drafts, and failed to accept the first and second Sight Drafts. The first respondent is said to have offered to return the first and second Sight Drafts to the applicant, but the applicant refused to accept their return. 8 The applicant claims that the first respondent or the respondents breached the duty of care owed by a bank to its customer; acted unconscionably; breached a contract; breached the Bills of Exchange Act 1909 (Cth); breached the Banking Act 1959 (Cth); breached the general law of banking and financial institutions; and committed a breach of trust. He also claims that he "faces serious damages" as a result, but the relief claimed does not include a claim for damages. 9 The application seeks the following relief (apparently wrongly described as interlocutory relief), namely that a writ of Mandamus be issued commanding each of the respondents to deal with the first and second Sight Drafts in accordance with: "a. The Law of Contract, b. The Laws of Australia generally, c. Common Law, d. The Banking Act (C'th) (1959) and the duties of the paying bank. e. The Bills of Exchange Act (C'th) (1909) and in particular the obligations of "The Holder of the Bill in Due Course. f. The Duty of Care owed by a Bank to its Customer and g. Banking and Financial Institution Law generally." There is no other final relief claimed in the application, save for costs. 10 I directed that the applicant not serve the application before the first directions hearing, as it appeared to me that there were some real difficulties with the claim being maintainable in the terms in which it was first expressed. I thought it preferable to raise those concerns with the applicant before the proceedings were served to see if he wished to have an opportunity before serving them of addressing my concerns in any way. I pointed out some possible problems with the applicant's pleadings, particularly with the nature of the relief sought, at a directions hearing on 21 February 2007. At that time, I gave leave to the applicant to file such amended application and such amended statement of claim as he may have been advised by 21 March 2007. The applicant has not filed any amended application or amended statement of claim.