The Facility is opened - the relevant forms
53 It is common ground that Mr Holland opened the Facility in 1997 with the designated account number HOLLM12973-6.
54 There is a difference between the parties as to the date Mr Holland opened the Facility. Mr Holland pleads he did so on 28 May 1997, whereas the defendant pleads on or about 28 April 1997. In his affidavit, Exhibit D12, Mr Morrissey deposes at [15] that he took a screenshot of BT's electronic records which show Mr Holland opened the Facility on 28 April 1997. Given these events occurred some 25 years ago, I prefer documentary evidence over recollection and I find that Mr Holland opened the Facility on or about 28 April 1997.
55 There was an issue at trial as to the forms Mr Holland used when he opened the Facility.
56 Mr Holland deposed that to open the Facility, he completed forms which were contained in a bundle of documents obtained from BT including a document titled "How to Establish Your Loan". He obtained a bundle of documents from BT on two separate occasions. The first occasion was in August/September 1996 when he collected them from BT's Customer Service Office in Grenfell Street, Adelaide (Adelaide documents). He described the package as a green folder and identified two specific documents: a "BT Margin Loan" "flyer" and a document titled "How to Establish Your Loan" together with 11 other documents (fourth Holland affidavit [7]). Mr Holland did not complete the Adelaide documents.
57 In October 1996, the plaintiffs relocated to London, England. Mr Holland again received from BT the documents required to open a margin loan account which he received, in London, under cover of a letter dated 10 March 1997 (London documents). The package of documents he received at that time contained a "BT Margin Loan" brochure and what he described as "another complete application package in its green folder". He said the London documents were identical to the Adelaide documents. It is for the reasons I explain below that I do not accept the London documents were identical to the Adelaide documents.
58 Mr Holland annexed copies of the Adelaide documents to his fourth affidavit, Exhibit P4, as Annexures MWH-4 - MWH-9 inclusive. At the footer of some of the documents are figures in the form 5/95 and 5/96. Ultimately, after prevaricating somewhat, Mr Holland agreed it was likely that the figures referred to the month and year such that 5/96 meant May 1996. Mr Morrissey confirmed in his evidence that was the case.
59 Mr Holland deposed in [7] of his fourth affidavit, Exhibit P4, that a document described as a Loan Agreement with a footer 5/96 was included in the Adelaide documents. He annexed a copy to Exhibit P4 as Annexure MWH-8. In cross-examination he produced what he described as the original of that document save that it had his signature and other of his handwriting upon it. A copy of that document is annexed to the fifth Holland affidavit, Exhibit P5 at Annexure MWH-2. He agreed that the original Loan Agreement he produced was identical to the document at Annexure MWH-8 save for his hand writing and signature. He said that he did not send the "original" Loan Agreement to BT after he signed it because he had made an error in filling it out in the sense that he signed in the wrong place.
60 In the fifth Holland affidavit, Exhibit P5, Mr Holland deposed that the London documents were, save for the documents he signed and returned to BT, annexed as Annexure MWH-2 to that affidavit.
61 Mr Morrissey joined the Westpac Banking Group, which now includes BT, approximately 12 years ago and has worked in BT's margin lending, online share trading and equity-related businesses since that time. He has been in his current role as Head of Margin Lending and Online Products for approximately the last seven years. He has conducted and co-ordinated searches for documents relating to the Facility in BT's physical records as well as its electronic records. The records are not complete for the full duration of the Facility given that it commenced in 1997. He has reviewed the available records for the Facility located by the searches.
62 Mr Morrissey deposed that BT's records show that the Facility was opened in Mr Holland's name on about 28 April 1997. He has been unable to locate a copy of any document signed by Mr Holland for the purpose of opening the Facility.
63 Mr Morrissey deposed further that BT makes available documents to potential customers for the purposes of opening a margin lending facility but they are updated from time-to-time with many of the documents marked with their month of issue for example "5/96" was used in May 1996. Notwithstanding he did not work for BT or Westpac at the time, based on his knowledge of BT's records, in about 1996 and 1997 the documents provided to potential customers for a margin loan application comprised a sequentially numbered set of documents including a "Borrower Details Form", a "Risk Disclosure Statement" and a "Loan Agreement" as well as other documents. He continued that documents within the application bundle were updated occasionally with the most up-to-date version of each document being included in the bundle provided to margin loan applicants. He annexed to his affidavit at Annexure DMM-1 a bundle of BT margin loan application documents with various dates from in about 1995 and 1996.
64 Included within Annexure DMM-1 is a document titled "Borrower Details Form" with the footer 9/96. That document includes Section F in which the person completing the form is to identify either an advisor or a broker: Exhibit D12, Annexure DMM-1, p 21; Exhibit P13, p 295.
65 Section F is important. It comprises two sections, one to be completed by the advisor/broker or, in the absence of there being an advisor/broker, by the client.
66 Consistent with that statement, cl 18 of the "Risk Disclosure Statement", Annexure DMM-1, p 24 (Exhibit P13, p 298) states:
If you have completed details of an Adviser/Broker in the Borrower Details Form, that person may be entitled to receive commission from BTS during the term of the loan. BTS does not, in any circumstances, accept any responsibility for any statement, act or omission of your Adviser/Broker and the payment of any commission is not an endorsement of them by BTS.
67 The reference in cl 18 to an adviser/broker as "… may be entitled to receive commission" is consistent with the first option in Section F.
68 Section F of the "Borrower Details Form" and cl 18 of the "Risk Disclosure Statement" in Annexure DMM-1, pp 21 and 24 respectively, both have a reference date 9/96.
69 Mr Morrissey annexes at Annexure DMM-2, BT's "Loan Facility Standard Terms" used from in or about May 1997.
70 The first and second pages of Annexure DMM-2 appeared to be what may be described as a cover sheet and first page of a "flyer". The third page of Annexure DMM-2 contains details to be completed by the applicant with the following pages setting out what it described as "Standard Terms". Within those standard terms is cl 48 (Annexure DMM-2, p 83; Exhibit P13 p 357) which reads:
If on the application form you filled out when entering into this transaction (entitled "Borrower application form") you complete the details for a financial advisor or broker, that person, or a person connected to that financial advisor or broker, may be entitled to receive commission from BTS during the term of this agreement. Payment of any such commission is not an endorsement of that financial advisor or broker by BTS.
71 The italicised "broker" is defined in cl 52 of the document. Nothing turns on the definition.
72 There is no reference date in the footer of this document, however given Mr Morrissey's evidence that the documents he annexed at DMM-2 were in use as from May 1997 and I have found the Facility was opened on 28 April 1997, I find that this document was not provided to Mr Holland by BT in or about March 1997 as part of the London documents.
73 Mr Morrissey deposes that based on his review of BT's records and the application documents made available to customers by BT in or about August or September 1996 and March 1997 the documents sent to Mr Holland were most likely either the documents he annexes at DMM-1, alternatively the documents annexed to the fourth Holland affidavit, Exhibit P4 as Annexures MWH-4 - MWH-9 or a combination of them, however he cannot be certain about which version of the application documents BT provided to Mr Holland were used to open the Facility.
74 If Mr Holland had the Adelaide documents with him in London, there would be no need for him to request further copies, although I accept he may have been sent them gratuitously when in or about March 1997 he asked BT for updated indicative lending ratios for shares he might buy if using a loan from BT: Fourth Holland affidavit, Exhibit P4 [7].
75 Mr Holland did not accept that documents with a 9/96 footer were the ones he signed and sent back to BT from London in 1997. He said in cross-examination that he had never seen cl 18 of the "Risk Disclosure Statement" before and is adamant that the Adelaide documents did not have a footer 9/96.
76 I accept Mr Holland's evidence that the Adelaide documents did not have a footer 9/96. That is because it seems to me that if new versions of the documents were provided no earlier than September 1996, which seems most likely given the footer 9/96, Mr Holland did not receive documents with that footer when he collected them in August 1996 and in the event he collected them in September 1996 perhaps not at that time either given that is the month and year those versions began to be distributed by BT.
77 Mr Holland is adamant that he did not see a "Borrower Details Form" with Section F or a "Risk Disclosure Statement" with cl 18 when he completed the application for the Facility in or about March 1997. However, the London documents, in particular the documents with the footer 9/96 in Annexure DMM-1 including Section F of the "Borrower Details Form" and cl 18 of the "Risk Disclosure Statement", are likely to have been in circulation for some six months.
78 Mr Holland also said in cross-examination that he could not have completed Section F of the "Borrower Details Form" which had an option to complete indicating he did not have a stockbroker, because in fact, Mr Bennett was his stockbroker at the time he completed the "Borrower Details Form". However, I have found that the terms in which Mr Holland wrote his letter to BT dated 27 May 1997, Exhibit D12, Annexure DMM-3 to which I have referred above, are consistent with Mr Holland not having a stockbroker until on or about 27 May 1997, which was after the Facility was opened.
79 Further, Mr Holland is relying on his memory from some 25 years ago. The provisions relating to commission are inconsistent with the case the plaintiffs put at trial and the plaintiffs, in particular Mr Holland, have an interest in disclaiming the "Borrower Details Form" and the "Risk Disclosure Statement", such that it calls into question his dogmatic position in relation to the completion of the forms when he opened the Facility in April 1997.
80 Whereas Mr Holland disagreed that what documents he signed and sent back to the defendant are those Mr Morrissey has produced at Annexures DMM-1 and was certain that the documents he completed did not contain the commission clause to which I have referred, I do not accept that evidence and consider it is another example of Mr Holland reconstructing his evidence.
81 Whereas I am conscious that Mr Morrissey cannot be sure which documents Mr Holland received in March 1997, it is for the same reasons as I have set out above, in particular the time which has passed since Mr Holland completed the forms and his tendency to reconstruct his evidence, that I do not accept Mr Holland's evidence.
82 On balance, I accept Mr Morrissey's evidence that the London documents sent to Mr Holland contained at least to those documents he annexes at DMM-1 as the "Borrower Details Form" containing Section F and the "Risk Disclosure Statement" containing cl 18, both of which have a footer 9/96, as well the documents annexed to the fourth Holland affidavit, Exhibit P4 as annexures MWH-4 - MWH-9 or a combination of them. It seems to me that given some of the documents have footers with 5/95 and 5/96, as well as 9/96, it is more likely than not that the London documents in these annexures were a combination of documents with various footer dates, each representing the latest version of the document in question being distributed by BT.
83 Accordingly, I find that Mr Holland collected the Adelaide documents in or about August or September 1996. I find that those documents in DMM-1 which have footer dates of 5/95 and 5/96 were in the Adelaide documents. I do not accept that any of the Adelaide documents had the footer 9/96.
84 I find that the London documents comprised at least the documents listed below which form either Annexures to Mr Holland's fourth affidavit, Exhibit P4, or Annexure DMM-1 to Mr Morrissey's affidavit, Exhibit D12:
(a) A covering letter from BT to Mr Holland at an address in the United Kingdom dated 10 March 1997 - Annexure MWH-4;
(b) A BT Margin Loan brochure - Annexure MWH-6;
(c) A document titled "How to Establish Your Loan" - Annexure MWH-7, also part of DMM-1 pp 30, 31;
(d) A single document with sections titled: (Annexure DMM-1)
(i) "1. Borrower Details Form" with a footer 9/96 and containing Section F;
(ii) "2. Risk Disclosure Statement" with a footer 9/96 and containing clause 18;
(iii) "3. Power of Attorney" with a footer 5/95;
(iv) "4. Declaration of purpose for which credit is provided under the BT Margin Loan" with a footer 9/96;
(v) "5. Loan Agreement" with a footer 5/96. This document comprises eight pages. A single page of the document occurs earlier in annexure DMM-1 at p 28, however this appears to be a collating error;
(vi) "6. Deed of Mortgage" with a footer 5/95;
(vii) "7. Nominee Deed" with a footer 5/95;
(viii) "8. Chess Sponsorship Agreement" with a footer 5/96; and
(ix) "9. Sample of Accountant's Letter" with a footer 5/95.
85 I find that Mr Holland completed the "Borrower Details Form", "Risk Disclosure Statement", "Power of Attorney", "Loan Agreement" and "Declaration of Purpose" and returned them to BT shortly prior to 28 April 1997.
86 Mr Holland said he opened the Facility, without the involvement of Mr Bennett or anyone at Barton, whom I have found was Mr Holland's stockbroker as from on or about 27 May 1997. I accept that evidence.
87 I find that when completing the "Borrower Details Form", Mr Holland completed Section F as him having no stockbroker for the reasons I have set out above, in particular that as at April 1997, Mr Holland did not, in fact, have a stockbroker.
88 It follows that the terms of the contract for the Facility between BT and Mr Holland comprised a suite of documents constituted by at least the "Borrower Details Form", the "Risk Disclosure Statement", the "Power of Attorney", the "Declaration of Purpose" and the "Loan Agreement" as I have set out above. It is not clear to me whether the "Deed of Mortgage" was executed, however nothing turns on that.
89 There is no dispute between the parties that neither the Adelaide documents nor the London documents included a PDS in respect of the Facility.
90 In December 2003, Mr Bennett contacted Mr Holland and signed him up as a customer to his new brokerage firm, Centec. Subsequently, by letter dated 29 December 2003, Mr Holland advised BT that Mr Bennett was authorised to transact the Facility on Mr Holland's behalf: Exhibit MWH-11, p 105. BT confirmed the change in details for Mr Bennett by its letter to Mr Holland on 12 January 2004.
91 Notwithstanding there is no issue that Barton and Centec acted only as stockbrokers and not as financial advisors to Mr Holland, in cross-examination Mr Holland accepted that Mr Bennett, then with Centec, was listed on Mr Holland's Facility as Mr Holland's "advisor" as at 1 November 2010: Exhibit D8. Mr Holland took no steps to correct that notation.
92 BT charged and collected interest at its published rates, known as the "headline rate", monthly in arrears, in accordance with the terms of the Facility contract.
93 The Facility had a zero balance by 2 August 2021 (i.e. there were no monies owed to BT).