Plaintiff v Defendant

Plaintiff v Defendant - [2009] VSC 82 - VSC 2009 case summary — Zoe

[57]

29 In my view, it is probable that the relevant conversation between the two was a combination of each of their recollections. Mr Gillespie is probably right in saying that he would have said to Mr Kheir that a customer could be identified at a branch in Melbourne if that had been the express object of Mr Kheir's question. Mr Kheir probably asked about the process for conducting a remote (that is a non face to face application) without specifically enquiring about how to satisfy the requirement of identification. It is probable that the conversation between the two focused upon completion of the application form without specific reference to how the 100 point signatory identification form could possibly be completed as required by the information and statements on the form. One thing which is clear is that Mr Kheir did not say to Mr Gillespie, and gave no evidence that he did say, something to the effect of "but how do I satisfy the 100 point signatory identification form if I don't see him"? Nor did Mr Kheir say to Mr Gillespie something to the effect of "but how will the obligation imposed upon banks to satisfy the 100 point check be met"? There is no suggestion, and there is no foundation upon which I could find, that Mr Gillespie said that Mr Kheir was not obliged to comply with banking law obligations to identify a new customer by meeting the 100 point check. These omissions are, in my view, significant because Mr Kheir had previously worked with the Commonwealth Bank and by the time of the relevant transaction was both an experienced broker and was well aware of the obligation to obtain a 100 point identification of persons when opening bank accounts. It is, therefore, probable (and I find to be the case) that Mr Gillespie did not in his first conversation with Mr Kheir turn his mind to or express any view about how the requirement of identification in the Bank West forms could be satisfied other than by its completion according to its terms. Similarly it is improbable (and I find not to have been the case) that Mr Kheir was told that he need not have complied with the obligation to satisfy the 100 point signatory identification form.

[65]

35 Bank West contended that its claim was not an apportionable claim under any of the relevant provisions, namely, Trade Practices Act 1974 (Cth) s 87CB; Wrongs Act 1958 (Vic) s 24AF, Civil Liability Act 2002 (NSW), s 5AI, or Civil Liability Act 2002 (Western Australia). Bank West's claim against Aussie and AHL is not one for damages "made under s 82 of the Trade Practices Act 1974" within the meaning of "apportionable claim" in s 87CB. However, the apportionability of claims under the State legislation all depend fundamentally upon whether the claim is one "arising from a failure to take reasonable care". Bank West's claim against the third parties is not pleaded as such but the factual pre-condition to the operation of the relevant statutory regimes does not depend upon how a claim is pleaded but whether the statutory precondition exists, namely whether the claim arises from a failure to take reasonable care. In Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd[35] Middleton J said that the words "arising from a failure to take reasonable care" should be interpreted broadly.[36] In my view the State regimes providing for apportionment of liability between concurrent wrongdoers requires a broad interpretation of the condition upon which apportionment provision depends to enable courts to determine how the claim should be apportioned between those found responsible for the damage. The policy in the legislation is to ensure that those in fact who caused the actionable loss are required to bear the portion of the loss referable to their cause. That task ought not to be frustrated by arid disputes about pleadings. Support for that conclusion may be found by the circumstance that a "failure to take reasonable care" can arise as much from an obligation in tort as in contract. In this case Bank West's claim for indemnity based upon a failure to sight original documents (that is, a breach of contract) may aptly be described as a failure to take reasonable care for the purposes of the apportionment provisions. The views relied upon by Bank West from Commonwealth Bank of Australia v Witherow[37] and Gunston v Lawley[38] do not require a different conclusion. Bank West's action is in my view one "based on an alleged failure" by the third parties to take "reasonable care".[39]

[68]

38 The task in apportioning liability amongst concurrent wrongdoers is to be undertaken in a real and pragmatic sense to identify who is to blame for the loss and who should bear the liability.[40] The primary focus in that undertaking is to determine, as best as may be possible, the "causal potency" of the various factors which singularly or together went to bring about the loss caused. In my view the conduct of Mr Kheir was the primary cause of the loss as between him, Aussie and Bank West. He had contractual and statutory obligations to identify the person claiming to be Mr Solak. He was the person best placed to verify identity and, because of that fact, was the person upon whom the obligation was placed by contractual agreement and emphasised as such in the training provided to him by Aussie. He was not told by Mr Gillespie that identification was not necessary and did not make any attempt either to secure the original documents (which of course was unlikely given the nature of the documents) or to ask Mr Gillespie what should be done, not about the form to be conveyed by fax as a remote application, but rather about the documents relevant to identification of the person seeking the funds. He did not state on the form anything that might have put Bank West on notice that a vital element for completion of the transaction (namely, identification of the applicant) had not been completed by him. Page 13 of the 42 page fax he sent to Bank West referred to his conversation with Mr Gillespie but only to state that Mr Gillespie had "acknowledged suitability of product sought". Nothing was said anywhere in the information conveyed by Mr Kheir about the lack by him of sighting of identification documents. A person reading the "100 point signature identification form" on page 10 of the 42 page fax he sent to Bank West, might conclude that it had been defectively completed but that he had in fact sighted the documents. Had he not done so it was incumbent upon him to make that clear, not to complete any part of the form, and to indicate as the results of his check that verification had not been achieved.

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