Razdan v Westpac Banking Corporation

headnote [This headnote is not to be read as part of the judgment] In 2005 Anil Razdan (the appellant) entered into a margin lending facility (the Facility) with St George Bank Limited (the bank), which subsequently became an asset of the Westpac Banking Corporation. The appellant's Facility went into margin call in September 2008, during the Global Financial Crisis. The appellant managed his account through in-depth telephone conversations with bank employees. During the course of one of these conversations he was told that if the gearing ratio reached around 95% the bank would immediately sell his portfolio. On around 16 and 17 October 2008 the bank sold the appellant's portfolio. The proceeds of the sale were less than the amount outstanding on the loan. The appellant was unable to pay the shortfall and on 29 April 2010 Westpac commenced proceedings in the District Court to recover this amount. The appellant filed a cross-claim that raised issues of: misleading and deceptive conduct; estoppel; breach of an implied term of the Facility to act reasonably and in good faith; and unconscionable conduct. On 5 April 2013 Cogswell DCJ dismissed the Cross-Claim and entered a verdict and judgment for Westpac. The appellant appealed on the basis that the primary judge erred by failing to uphold his Cross-Claim in relation to: (i)Misleading or deceptive conduct; (ii)Estoppel; (iii)Breach of the implied term to act reasonably and in good faith; and (iv)Unconscionable conduct. The Court held, dismissing the appeal: In relation to (i) 1.Per McColl and Macfarlan JJA (Bergin CJ in Eq dissenting): The bank employee's statement (that if the gearing ratio reached around 95% the bank would immediately sell the appellant's portfolio) was not a representation for the purposes of s 51A of the Trade Practices Act 1974 (Cth), s 41 of the Fair Trading Act 1987 (NSW) and s 12BB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). This is because the bank's conduct, viewed objectively and as a whole, did not have a tendency to lead the appellant into error and a reasonable person in the position of the appellant would not have treated the statement as made with the intention of inducing him to take a particular action: [3] - [5], [23] - [34]. Australian Competition and Consumer Commission (ACCC) v TPG Internet Pty Ltd [2013] HCA 54; (2013) 88 ALJR 176 applied Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 considered Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 applied Gould v Vaggelas [1984] HCA 68; 157 CLR 215 cited Hawkins v The Queen [1994] HCA 47; 181 CLR 440 cited Henville v Walker [2001] HCA 52; 206 CLR 459 cited R v Connors (1990) 20 NSWLR 438 cited Sutton v A J Thompson Pty Ltd (in liq) (1987) 73 ALR 233 applied Willet v Thomas [2012] NSWCA 97 considered 2.It was essential for the appellant to establish a connection between the representation and his loss. There was no such link because the appellant did not rely on the bank employee's statement. His lack of reliance is demonstrated by three key circumstances. First, he stated under cross-examination that he "did not take seriously" anything that the bank employee in question said. Second, he did not mention the representation in his subsequent communications with the bank, even after it became clear that it was not accurate. Third, he originally pleaded the representation in a different form, which was altered after reviewing the transcripts of his conversations with the bank: [6] - [21], [22], [125] - [136]. Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 considered Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 considered De Bortoli Wines Pty Limited v HIH Insurance Limited (in liq) [2011] FCA 645; (2011) 200 FCR 253 considered Gould v Vaggelas [1984] HCA 68; 157 CLR 215 considered Hanave Pty Ltd v LFOT Pty Ltd (formerly Jagar Projects Pty Ltd) and Ors [1999] FCA 357; (1999) 43 IPR 545 considered Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 considered March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 considered Ricochet v Equity Trustees [1993] FCA 99; (1993) 41 FCR 229 considered Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 considered Smith v Chadwick (1884) 9 App Cas 187 considered Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 considered In relation to (ii) 3.For an estoppel to arise there must be the creation or encouragement of an assumption by the representor and reliance on that assumption to the detriment of the representee in circumstances where departure from the assumption would be unconscionable. For the reasons discussed in relation to the misleading or deceptive conduct issue, the appellant did not rely upon the representation: [1], [22], [137] - [140]. Austotel Pty Ltd v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 applied In relation to (iii) 4.On the assumption that a term of reasonableness and good faith is implied into the Facility, there was no evidence that the bank had breached it. On the contrary, it tried to help the appellant maintain his portfolio during the extraordinary circumstances of the Global Financial Crisis: [1], [22], [141] - [145]. In relation to (iv) 5.S 12CA of the ASIC Act picks up the equitable doctrine of unconscionability. The range of unconscionable conduct is wide and can include undue pressure, exploiting vulnerability, trickery or misleading conduct. The bank did not pressure, exploit, trick or mislead the appellant as it made it clear he was responsible for managing his own portfolio, encouraged him to seek advice and provided him with information. The appellant was not vulnerable, as he was an educated and experienced investor. Furthermore, he did not rely on the bank's representation and during the course of their discussions he would have understood that this representation was inaccurate: [1], [22], [146] - [151]. GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 191 ALR 342 applied Tonto Home Loans Australia Pty Limited v Tavares (2011) 15 BPR 29, 699; [2011] NSWCA 389 applied

Judgment 1MCCOLL JA: I agree with the orders proposed by Bergin CJ in Eq and, subject to what follows, with her Honour's reasons. 2As Bergin CJ in Eq has explained, the appellant's case was primarily advanced on the basis that Mr Mesaros' statement on 7 October 2008 that the Bank would cause a forced sale of his share portfolio if the gearing (or loan balance to security value ratio) reached 95% (the "95% representation") constituted misleading and deceptive conduct in contravention of s 42 of the Fair Trading Act 1987 (NSW) (the "FTA" as in force at the time of the relevant events) and/or s 52 of the Trade Practices Act 1974 (Cth) (the "TPA" as in force at the time of the relevant events) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the "ASIC Act") (hereafter the "Acts") because it was a representation as to a future matter which the respondent did not have reasonable grounds to make (see s 51A, TPA, s 41, FTA and s 12BB, ASIC Act). 3I agree with Macfarlan JA that, considered in context, the 95% representation did not constitute a representation for the purposes of s 51A of the TPA (and the like provisions in the FTA and ASIC Act). This question turned on whether the respondent's conduct, viewed objectively and as a whole, had a tendency to lead the appellant into error; the question whether it had that effect was "logically anterior to the question whether a person has suffered loss or damage thereby [although] there may be practical overlaps in [their] resolution": Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 (at [24] - [25]) per French CJ; see also (at [102]) per Gummow, Hayne, Heydon and Kiefel JJ where the plurality emphasised that the task of the court is to examine the relevant course of conduct as a whole, looking objectively at the alleged conduct in the light of the relevant surrounding facts and circumstances; Australian Competition and Consumer Commission (ACCC) v TPG Internet Pty Ltd [2013] HCA 54; (2013) 88 ALJR 176 (at [49]) per French CJ, Crennan, Bell and Keane JJ). 4Viewing the respondent's conduct in making the 95% representation as a whole for the purposes of the characterisation exercise means that the Court had to have regard to all its conduct in relation to that representation, including its making and any statement, action, silence or inaction in connection with it: Campbell v Backoffice Investments Pty Ltd (at [102]). 5Having listened to the recording of the conversation between Mr Mesaros and the appellant, I agree with Macfarlan JA's descriptions of it (at [32] - [33]). The statement did not appear to assume any prominence in a conversation which, like many the appellant had with Mr Mesaros around this time, canvassed a variety of scenarios about what the appellant could do to manage his loan having regard to the rapidly fluctuating share market and the various scenarios in which Risk might intervene. Looking at the statement, objectively, in the context of the many communications between the parties, it was not, in my view, a statement which had a tendency to lead the appellant into error. 6I would add the following observations about the reliance issue. 7Assuming the appellant made good the proposition that the respondent had engaged in misleading and deceptive conduct, it was incumbent upon him to establish that, in substance, he had suffered loss or damage "by" that conduct: s 68 FTA and s 82, TPA (as in force at the time of the alleged conduct) and s 12GF, ASIC Act (the "damages provisions"). 8The word "by" in the damages provisions expresses the notion of causation and is understood as reflecting the common law practical or common sense concept of causation as discussed in March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 except insofar as that is expressly or impliedly modified or supplemented by the provisions of the Act: Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 (at 525) per Mason CJ, Dawson, Gaudron and McHugh JJ; Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 (at 480) per Gaudron J, (at 489) per McHugh J (Gummow J agreeing). 9In Smith v Chadwick (1884) 9 App Cas 187 (at 196) Lord Blackburn said that if it was proved that a defendant "with a view to induce the plaintiff to enter into a contract made a statement to the plaintiff of a nature as would be likely to induce a person to enter into a contract" and the plaintiff did so, "it is a fair inference that he was induced to do so by the statement". In Gould v Vaggelas [1984] HCA 68; 157 CLR 215 (at 236), which concerned an action for damages for deceit, Wilson J (Gibbs CJ agreeing) recited Lord Blackburn's statement with approval in discussing the circumstances in which inducement (reliance) may be inferred. As his Honour made plain, such an inference is one of fact and may be rebutted by the facts of the case: Gould v Vaggelas (at 236) per Wilson J; see also (at 250) per Brennan J. 10Campbell v Backoffice Investments Pty Ltd was an appeal from a decision of this Court, Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359. In that case Giles JA concluded (at [48]), applying Wilson J's analysis in Gould v Vaggelas (at 236), that one of the plaintiffs, Mr Weeks, had relied upon representations concerning estimates of sales revenue and estimates of future profitability based on those figures. 11The plurality made three cautionary points (at [143]) about the use of Gould v Vaggelas analysis: "[143] Three points may be made about this proposition. First, it is a proposition expressed in relation to the law of deceit, not the operation of statutory provisions for the award of damages suffered by contravention of consumer protection provisions proscribing misleading or deceptive conduct. Secondly, the proposition carries within it a number of subsidiary questions, such as what is a 'material' representation, and when is a material representation 'calculated' to induce entry into a contract. Thirdly, because the proposition is directed to the drawing of inferences, consideration of its application must always attend closely to all of the evidence that is adduced that bears upon the question being examined. With considerations of these kinds in mind, Giles JA was right to point out that reliance is not a substitute in the context of the Fair Trading Act for the essential question of causation. Moreover, it is also right to observe, as Giles JA said, that '[i]t may be artificial to speak of reliance in determining what action or inaction would have occurred if the true position had been known.'" (Emphasis added) 12In the passage of his reasons in Campbell v BackOffice Investments Pty Ltd to which the plurality referred, Giles JA (with whose reasons on this issue Basten JA agreed) said: "44 Reliance can itself be a difficult concept, and is not a substitute for the essential question of causation. It may be artificial to speak of reliance in determining what action or inaction would have occurred if the true position had been known: see Smith v Maloney (2005) 92 SASR 498 at 514 - 5 and Colly Cotton Marketing Pty Ltd v Simmons [2006] NSWCA 134 at [161]. Of particular significance to the present case, causation may be found notwithstanding that any belief in a representation is qualified by doubt, and even when the representee seeks to protect itself against the possibility that the doubt is justified. If the representation still operates on the representee's action or inaction which occasions loss or damage, the loss or damage is suffered by the misleading or deceptive conduct, notwithstanding that the label of reliance may not appropriately describe what occurred." (Emphasis added) 13Recognising the cautionary statements by the High Court concerning the application of "common law analogues for the understanding of application of Acts such as the Fair Trading Act", Allsop P (with whom Basten and Young JJA agreed) has suggested that the test of causation for the purposes of the damages provision requires "a sufficient and direct link between the conduct and the consequences ... in order that the purpose and [fundamental and protective] policy of the legislation be vindicated": Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259 (at [71]). Adoption of a test so framed was not argued on appeal, but, even if it had been, in my view the outcome would not have differed. 14Taking into account the emphasis the High Court has placed on identifying a causal connection between the impugned conduct and the loss or damage, I am unable to discern that the making of the 95% representation caused the appellant's loss or damage or, to express the conclusion in terms of the damages provisions, that the appellant suffered loss or damage "by" that conduct. 15Like the issue of whether the respondent engaged in misleading or deceptive conduct, the question whether the appellant's loss was caused by the 95% representation must be determined objectively. Thus, it was unnecessary for him to give express evidence as to how the 95% representation influenced his action. Indeed, courts are cautious in accepting assertions of reliance in this context because they are regarded as essentially self-serving: Hanave Pty Ltd v LFOT Pty Ltd (formerly Jagar Projects Pty Ltd) and Ors [1999] FCA 357; (1999) 43 IPR 545 (at [50]) per Kiefel J (Wilcox J agreeing (at [11]). They are similar to statements as to what a person would have done if some impugned conduct had not occurred which have little probative value unless the "reliability of their evidence" is confirmed by "reference to objective factors": Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 (at [32] (fn (64)) per McHugh J; (at [93] Item 7) per Kirby J; Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 (at [24]) per McHugh J. Thus, in Ricochet v Equity Trustees [1993] FCA 99; (1993) 41 FCR 229 (at 235) the Full Federal Court (Lockhart, Gummow and French JJ) upheld the trial judge's finding of no reliance by the key people concerned, notwithstanding direct evidence as to reliance. However, a declaration of non-reliance by a person said to have been affected by the conduct is relevant to the question of causation: Campbell v Backoffice Investments Pty Ltd (at [29]) per French CJ. 16The same contextual factors involved in characterising conduct to assess its notional effects may play a role in determining causation: Campbell v Backoffice Investments Pty Ltd (at [24]) per French CJ. Further, the weight of the factual inference will vary with the circumstances in which the representation is made: De Bortoli Wines Pty Limited v HIH Insurance Limited (in liq) [2011] FCA 645; (2011) 200 FCR 253 (at [70]) per Stone J; app De Bortoli Wines Pty Ltd v HIH Insurance Ltd (in liq) [2012] FCAFC 28 (at [67]) per Jacobson, Siopis and Nicholas JJ. 17Determining causation involves a careful scrutiny of the facts: Campbell v Backoffice Investments Pty Ltd (at [143]) per the plurality. Further, although questions of causation are determined objectively, it may be necessary to consider subjective factors relating to a particular person's reaction to conduct found to be misleading or deceptive or likely to mislead or deceive. Thus a statement may be misleading or deceptive in the sense that it would have a tendency to lead anyone into error, but, if it is disbelieved by its addressee, it would not ordinarily be causative of any loss or damage flowing from the subsequent conduct of the addressee: Campbell v Backoffice Investments Pty Ltd (at [28]) per French CJ. A failure to complain about an alleged misrepresentation may go to the likelihood of reliance: Gould v Vaggelas (at 237) per Wilson J, quoting Connolly J at first instance). However, causation may be found, notwithstanding entry into a contract containing a contractual disclaimer of reliance: Campbell v Backoffice Investments Pty Ltd (at [31]) per French CJ; (at [130]) per Gummow, Hayne, Heydon and Kiefel JJ. 18Returning to the facts of this case, I am unable to conclude that the 95% representation had any operative effect on the appellant's conduct. It clearly assumed no particular significance in the appellant's mind at the time it was made. This is no doubt in part because of the desultory tone in which it was said as well as the fact that Mr Mesaros made it clear, as the appellant appreciated, that he could not advise the appellant. As French CJ explained in Campbell v Backoffice Investments Pty Ltd (at [24]), this is an area where the question whether a statement was misleading or deceptive overlaps with the question whether the conduct caused the appellant loss or damage. As the appellant well understood at the time the 95% representation was made, Risk had "total control" and Mr Mesaros had "nothing": (see Bergin CJ in Eq (at [132]). That the statement evinced little more than a "yup" from the appellant, reflected his evidence at trial that he "didn't take anything seriously that David Mesaros said to [him]" (see Bergin CJ in Eq (at [92]). 19As Bergin CJ in Eq has concluded (at [134] - [135]) and as the primary judge found (at [47]) the appellant did not mention the 95% representation again in the course of dealings with the respondent concerning his portfolio and his loan obligations in circumstances when it might be expected he would. Thus he did not raise it when, for example, on 15 October 2008 Mr Mesaros said Risk was going to force sell if the ratio "gets close to 100", nor after the Bank sold all his shares leading to a shortfall (as he was advised on 17 October 2008) of around $400,000. Had the 95% representation influenced the appellant's conduct in relation to managing his loan exposure, it might have been expected that he would have protested at that stage that, had the respondent done a forced sale at 95%, he would not have suffered the losses incurred when the sale ultimately proceeded. When seen in this context, the appellant's evidence at trial "that he did not liquidate his portfolio because the Bank told him that it would force sell his portfolio at 95%" (see Bergin CJ in Eq (at [130]) has the self-serving quality which deprives it of any cogency when viewed in the light of his conduct in October - November 2008. As a matter of common sense, one would expect the appellant to have complained about the respondent's failure to give effect to the 95% representation at the time he was first confronted with the extent of the shortfall when his share portfolio was liquidated. 20It is also cogent, in my view, as the respondent submitted, that the appellant did not apparently recall the 95% representation until he listened to the tape recordings of his communications with Mr Mesaros prior to the trial. It was this which appears to have prompted the third iteration of his cross-claim filed in the course of the trial, but the fact his recollection had to be prompted in this respect demonstrates how inherently improbable it is to conclude that he placed any weight upon it at the time it was made. 21In my view, the primary judge, who of course had the advantage of seeing the appellant give his evidence, did not err in concluding that the appellant failed to establish that the 95% representation caused him any loss or damage. 22MACFARLAN JA: I agree that the orders proposed by Bergin CJ in Eq should be made and, subject to the following observations, agree with her Honour's reasoning. 23Contrary to her Honour's assumption, I do not consider that, when considered in its context, the statement of Mr Mesaros relied upon by the appellant constituted a "representation" for the purposes of s 51A of the Trade Practices Act 1974 (Cth). 24One of the principles stated by Wilson J in a well-known passage in his judgment in Gould v Vaggelas [1984] HCA 68;157 CLR 215 at 236 was summarised by the Full Federal Court in Sutton v A J Thompson Pty Ltd (in liq) (1987) 73 ALR 233 at 240 as follows: "If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation". 25As pointed out by the Full Court, this and Wilson J's other principles were stated with reference to a common law action for deceit but are equally applicable to contraventions of statutory provisions concerned with misleading and deceptive conduct. The Full Court went on to say: "In this formulation, the possibility that a foolish person might be misled by some representation which no normal person would take seriously, is covered by the exclusion of representations which are not 'calculated to induce' entry into the contract - the test is objective, but must take into account the respective positions of the parties, including such matters as their knowledge of each other through previous dealings and their respective familiarity with the subject-matter of the contract." 26A similar point is made with respect to the common law in Spencer Bower, Turner and Handley, Actionable Misrepresentation, (4th ed 2000, Butterworths) at [117] where the authors state that an intention to induce, as well as actual inducement, is essential to render a misrepresentation actionable (see also Spencer Bower, The Law Relating to Estoppel by Representation, (4th ed 2004, LexisNexis UK) at V.3.3-V.3.5). 27Consistent with this approach is that of the High Court in Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 where the plurality concluded that the defendant vendors' agent "made no representation of any kind, beyond stating what information the vendor wished to communicate to the purchasers" (at [35]), and that it was necessary in determining whether the agent had engaged in misleading or deceptive conduct to consider the agent's conduct as a whole (at [39]) and "what a reasonable person in the position of the purchasers, taking into account what they knew, would make of the agent's behaviour ... " (at [50]). The Court pointed out that misleading and deceptive conduct does not necessarily have to involve a representation (at [32], [128] and [179]). However, as it usually does, the approach taken in that case is applicable to the present where, by reason of the language of s 51A of the Trade Practices Act, the conduct in question, to be actionable, must constitute "a representation". 28In a separate judgment in Butcher, McHugh J emphasised that the determination of whether conduct is misleading or deceptive is an objective question to be determined by reference to the defendant's conduct as a whole (at [109]). His Honour applied the principles stated in Gould v Vaggelas to which I have referred above and noted their adoption in Sutton v A J Thompson Pty Ltd. 29The approach taken in these authorities is consistent with the ordinary meaning of "represent" which is most relevant to the present context, namely, "to set forth clearly or earnestly with a view to influencing opinion or action or making protest" (Macquarie Dictionary meaning number 10). 30To like effect is the authority in the field of criminal law that the term "untrue representation" in a statutory provision concerned with the inducement of confessions involves, inter alia, a statement made with the object of procuring a confession (R v Connors (1990) 20 NSWLR 438 at 446 - 7; Hawkins v The Queen [1994] HCA 47; 181 CLR 440 at 446 - 7). 31The above observations are not intended to indicate that carelessness will preclude a representee claiming damages where there has been actual reliance upon a representation calculated to influence the representee's conduct (see for example Henville v Walker [2001] HCA 52; 206 CLR 459 at [165]). Thus a failure to check the accuracy of misleading representations does not deprive the representee of a remedy (Sutton v A J Thompson at [241]). An untrue statement will be actionable if a reasonable person in the position of the person to whom it was made would have regarded it as a serious statement intended to influence his or her behaviour and the latter has in fact relied on it, whether or not acting carelessly in doing so. 32In the present case, the statement relied upon, "[o]nce you get 95%, that's it, they're going to force sell", was made in the midst of one of a number of lengthy conversations between the appellant and Mr Mesaros. Reading the conversations as a whole, I would not conclude that a reasonable person in the position of the appellant would have treated the statement as made with the intention of inducing action on his or her part or, to use the language of Sutton v A J Thompson, as "calculated" (in an objective sense) to do so. The statement was made "en passant", as part of a lengthy to-ing and fro-ing between the appellant and Mr Mesaros. There was nothing in the conversations to suggest that, by this statement, Mr Mesaros was attempting to persuade the appellant to do something, or otherwise influence his actions in a presently relevant respect. 33This view, formed after examination of transcripts of the conversations, is confirmed by listening to the tape recordings of them. The relevant statement of Mr Mesaros assumed no prominence or force at all. Indeed, it sounded like an aside, made quickly and in a voice trailing away. 34As submitted by the respondent, "[t]here was clearly nothing promissory or cast-iron about the statement. It was a passing, spontaneous prediction made in the flow of one of many discussions" (written submissions [49]). As the respondent also submitted, the statement was "not made in the context of Mr Mesaros being asked as to when Risk would move to liquidate" (ibid at [50]) nor, I would add, by way of Mr Mesaros volunteering a serious statement upon which the appellant might be expected to rely as to when "Risk" would or might act. A contrast may be drawn with the statements in Willett v Thomas [2012] NSWCA 97 which the primary judge in that case described as "heavily interwoven with puffery, eagerness and undue optimism" but which were nevertheless held on appeal to have been actionable because, despite their generality, they were clearly intended to and did encourage the provision by those to whom they were made of funds for investment. 35The comments I have made are equally fatal to the other causes of action upon which Mr Razdan relied. As Mr Mesaros' statement would not have been regarded by a reasonable person in the appellant's position as intended to be relied upon, it did not amount to a representation which could found an estoppel and could not assist the appellant in obtaining a finding of breach of an implied term of reasonableness and good faith or a finding of unconscionable conduct. 36BERGIN CJ in EQ: The appellant, Anil Razdan, appeals from the judgment of the primary judge, his Honour Judge Cogswell SC of 5 April 2013 in the District Court of New South Wales (the Judgment). The primary judge entered a verdict and judgment for the respondent, Westpac Banking Corporation, for $586,662.43 and dismissed the appellant's Cross Claim. 37The respondent sued the appellant for the outstanding amounts owing under a margin lending facility (the Facility) into which the appellant had entered with St George Bank Limited (the Bank) in 2005. The Facility became Westpac's asset pursuant to s 22 of the Financial Sector (Business Transfer and Group Restructure) Act 1999 (Cth) with effect from 1 March 2010. 38The appellant's pleadings included a claim that an officer of the Bank had made misleading or deceptive representation to him upon which he claimed he relied, including that the Bank would cause a forced sale of his share portfolio if the gearing ratio (or loan balance to security value ratio) of 95% was reached. It was alleged that although the gearing ratio exceeded 95% after the representation was made, the Bank failed to immediately liquidate the appellant's share portfolio leaving him with an exposure to the Bank whereas, if the sale had occurred earlier the debt, or amount outstanding, would have been satisfied by the proceeds of sale. There were also claims of breach of an implied term of reasonableness and good faith, unconscionable conduct, estoppel and failure to mitigate. Background 39The Bank operated an electronic system known as the Margin Lending System (MLS). Pricing data and other information was automatically updated on the MLS as events such as changes in share values occurred, albeit with a delay of approximately 20 minutes (Blue 444). In practical terms the Bank calculated the market value of the shares by "simply" taking the value of the shares and multiplying that amount by the number of shares held by the borrower. The market value was reduced by the value of any sold call options on the account (Blue 446). 40The borrowing limit under margin lending facilities was the maximum amount the Bank was willing to lend a customer based on the amount of security provided. It was calculated by taking the market value of the particular security and multiplying that amount by what is known as the "gearing ratio" relevant to the security. In practical terms the gearing ratio was set according to the Bank's internal risk policy framework, reviewed on a regular basis. The gearing ratios were determined by assessing the fundamental performance of the particular security as well as "considering numerous quantitative and qualitative factors" (Blue 447). 41The Facility also operated on what was known as a "buffer" which allowed the loan value to move above the borrowing limit up to a maximum, generally within a 10% range, without triggering what is known as a "margin call". It provided borrowers with some flexibility in managing market volatility. The determination of whether a loan account went into margin call was arrived at automatically in the MLS, rather than manually, by reference to the amounts ascribed to the amount outstanding, the borrowing limit and the buffer (Blue 448-449). 42The Facility included the following provisions: 7. Margin Calls 7.1 Subject to clause 7.5, if the amount outstanding exceeds the sum of: (a) the borrowing limit; and (b) the buffer, at any time, you must take the action referred to in clause 7.2 by 2 pm [EST] on the next business day after the event occurs. 7.2 The action you must take if the amount outstanding exceeds the sum of the borrowing limit and the buffer is to: (a) repay some or all of the amount outstanding; (b) provide us with additional security interests which are acceptable to us; (c) arrange to, or give us irrevocable instructions to, sell, dispose of or redeem some or all of the mortgaged property [with the proceeds being used to reduce the amount outstanding or being deposited to the credit of the Cash Management Trust Account]; or (d) take any other steps we consider necessary so that the amount outstanding no longer exceeds the borrowing limit. 7.3 You are responsible for being in a position to receive any communications from us in relation to this clause and to act within the time limits specified in this clause. 7.4 As further and better security to us, you and each other security provider irrevocably authorise each attorney appointed in the power of attorney contained in the application form to take, in accordance with that power of attorney, any steps we consider necessary (including any of the steps listed in clause 7.2) to ensure the amount outstanding no longer exceeds the borrowing limit. This authority arises whether or not we try and advise you that you need to comply with clause 7.1. 7.5 If (a) the amount outstanding exceeds the sum of: (i) the borrowing limit; and (ii) the buffer, at any time during a trading day; and (b) during: (i) the trading day in which that event occurs the All Ordinaries Share Price Index on the trading platform operated by ASX the market value of any security comprising part or all of the mortgaged property falls by more than 5%; or (ii) the three trading days preceding that trading day the All Ordinaries Share Price Index on the trading platform operated by ASX or the market value of any security comprising part or all of the mortgaged property falls by more than 10%, as further and better security, you and each other security provider irrevocably authorise each attorney appointed in the power of attorney contained in the application form to take, in accordance with that power of attorney, any steps listed in clause 7.2 we consider necessary to ensure the amount outstanding no longer exceeds the borrowing limit. 7.6 We may vary the gearing ratio or the market value of a security, or the percentage taken into account in the buffer at any time in our absolute discretion, even if it makes clause 7.1 or clause 7.5 apply. 7.7 You and each other security provider acknowledge that: (a) you must monitor whether clause 7.1 applies at any time, and we have no responsibility to do so; (b) if at any time we choose not to notify you that you have an obligation under clause 7.1, or exercise our rights under clause 7.4 or clause 7.5 despite then being entitled to do so, that is not a waiver of our right to do so subsequently. 7.8 Our rights under this clause 7 (whether we exercise them or not) do not limit any of our other rights at law or under these terms and conditions. ... 36. Limitation of Liability 36.1 We need not do anything (including disclosing anything or giving advice, or doing anything we are entitled to do under this facility) except as expressly set out in this agreement. ... 36.5 Neither the nominee nor we are responsible for or liable in respect of: (a) any change or movement in the value of any security comprising part of the mortgaged property; and (b) any information, advice or opinion (including any information, advice or opinion relating to any security) provided by us or any other person on our behalf whether or not it is provided at your request or relied on by you or by others. 43The "Risk Disclosure Statement", signed by the appellant at the time of his application for the Facility, included the following: 2.Margin calls If the value of the overall security held by us drops below a certain proportion of the loan you will receive a margin call. You can not just "wait out" any downturns in the market. You will have a limited time to deal with any margin call by either repaying to us enough of your facility or giving us more securities on the relevant applicable acceptable securities list. If you fail to act within the time periods specified in the terms and conditions, then some of your securities may be sold so as to ensure the amount outstanding no longer exceeds your borrowing limit. We may at any time remove an investment from the acceptable securities list. This may reduce the borrowing limit. If we do so you may be required to provide other security or repay some of your loan to ensure the amount owing does not exceed the borrowing limit. 44If the Bank did not exercise its rights, powers or remedies under the Facility at any given time, it was entitled to exercise them later (cl 38.2). It is not in issue that the Bank was entitled to conduct a forced sale of the appellant's shares and that the Facility provided that the appellant was obliged to pay the outstanding amount under the Facility irrespective of the amount recovered from a forced sale. 45Between 2005 and 2008 the Facility went into margin call on a number of occasions. There were occasions when the appellant waited to see if the market moved in his favour to bring his loan back below the borrowing limit, obviating the need to sell shares. If this did not happen then the appellant would sell shares to effect that outcome. On other occasions the Bank conducted a "forced sale" (a sale of the shares by the Bank to the exclusion of the appellant's involvement). However things became very difficult in September and October 2008 with the impact of the Global Financial Crisis (GFC). 46There is no issue that the appellant's Facility went into margin call at the end of September 2008. At that time the amount outstanding was $4,543,970.77. The borrowing limit under the Facility was $3,728,659.94 and the buffer was $537,722.13. The buffer was determined by multiplying together the market value of the shares on 30 September 2008, being $5,377, 221.27 and the percentage of 10%. The Facility was therefore in margin call because the amount outstanding exceeded the sum of the borrowing limit and the buffer (Blue 449-450). 47On 30 September 2008 the amount needed to bring the account out of margin call was $815,310.83. That figure was calculated by subtracting the amount outstanding ($4,543,970.77) from the borrowing limit ($3,728,659.94) (Blue 449-450). 48On 3 October 2008 an officer of the Bank telephoned the appellant and informed him that he needed "$200,000 to cover the margin call". That communication apparently occurred after business hours on Friday evening 3 October 2008, the eve of a long weekend in New South Wales. 49From Tuesday 7 October 2008 to 18 October 2008 (and thereafter) there were numerous conversations (all of which were tape-recorded) between the appellant and an officer of the Bank, Mr David Mesaros, with whom the appellant was dealing in respect of the Facility. Although the content of the conversations is not in issue, the parties are at issue in respect of the characterisation of what was said in the conversations. It is therefore appropriate to refer in some detail to those conversations. 50The transcripts of the telephone conversations between the appellant and the officers of the Bank were of conversations between 3 September 2008 and 4 June 2009. The conversations on 3 September 2008 included the appellant checking his "wealth buffer position' and being informed that he was "negative $327,156" and he would "hit margin call" at "negative $608,000" (Blue 698-699). 51On 10 September 2008 the appellant telephoned the Bank and spoke to Mr Mesaros. He complained that the Bank had telephoned his brokers and advised them he was in margin call rather than ringing him directly. Mr Mesaros confirmed that the appellant's Facility was in margin call and that he would look after his account in future because he was the account manager (Blue 699). After further discussion the appellant and Mr Mesaros decided that they would see how the market panned out the following day (Blue 700). 52On 11 September 2009 the appellant spoke with another officer of the Bank and was advised that he was in margin call for "almost $700,000" and that his buffer was roughly $560,000. The officer informed the appellant that the market had "just dropped again" and he needed to clear the margin call by two o'clock that day. The appellant advised the Bank officer that "if the market just pulls me out, that's alright, otherwise I can sell you know". He said "Usually that's what happens, in a couple of days, the market just pulls me out of it" (Blue 702). The officer then advised the appellant that the Department of the Bank (Risk) had taken an interest "because of the size of the margin call" and that "we can give you until two o'clock tomorrow". There was then a discussion as to what action the appellant would take on the account and he asked whether the Bank was selling some stock. He asked "what else can I do at the moment?". He was advised that he could put cash into the account or he could transfer extra security. The appellant said that he would sell certain stock that would give "maybe at least $100,000" (Blue 703-704). There were other conversations in September and early October 2008 when the appellant checked the level of the margin call and whether there was the capacity for him to "protect a share price" (Blue 706-709). 53The conversation between a bank officer and the appellant on Friday evening, 3 October 2008, was not tape-recorded because it was apparently made from a mobile phone. Its terms were recorded in the Bank's records which included the bank officer advising the appellant that his loan was in margin call and that he needed to sell $200,000 worth of shares to cover it (Blue 90). 54On the following Tuesday after the long weekend, 7 October 2008, the appellant had a number of telephone conversations with Mr Mesaros. The first conversation was one in which Mr Mesaros telephoned the appellant and advised him that he had received an e-mail from Risk. He informed the appellant that he was trying to hold Risk off "as much as possible" but that it was asking if "we could put some more money in the account". Mr Mesaros advised the appellant that the buffer amount was "509" and that the appellant was "in there by $912,000" and they were "looking about $403,000 at the margin". The appellant asked Mr Mesaros how long he could hold Risk off because he would have to sell shares. He said "that's the only thing I can do, I mean, I can't put in the money". After further discussion about the Market, Mr Mesaros suggested that the appellant should "start selling some shares" and that he would speak to Risk and hold them off if the appellant started "reducing the exposure a little bit" (Blue 709-710). After further discussion about the utility of buying back options, Mr Mesaros informed the appellant "I can't advise you" (Blue 711). He also suggested that the appellant should speak to his adviser and ask where he could generate more income (Blue 712). The appellant informed Mr Mesaros that he could "put $150,000 today" and that it was "not a problem" (Blue 713). Mr Mesaros said that the appellant should "start looking at shares that you could possibly sell". The appellant said that although he did not want to sell, he could sell BHP shares because there were no options written in relation to those shares. He said, "I've been waiting, hoping for the market but, you know, the market has fallen too much" and it was "not helping me at all". Mr Mesaros said that he would "hold off today" but that if the appellant wanted to sell he should do so "by all means" (Blue 714). 55Mr Mesaros telephoned the appellant again on 7 October 2008 and the conversation included the following (the appellant is "AR" and Mr Mesaros is "DM) (Blue 717-718): DM: Tough call. You've got to find an equilibrium look it's very, very. You need to sit down. I wish I could help because I don't want to make the wrong decision and something might go wrong. You need to sit there and work it out. But there are some of the things available. Maybe sell the shares, or maybe write a call option a bit further out, two months maybe, I don't know, I can't comment. Speak to your adviser. Let them have a look at it. But they do get commission out of this. It's probably best that you speak to them. AR: Yep. DM: And see what they recommend and which way is the best way to go forward. ... DM: ... Yeah, just probably best to sell it off. The more I think about it. But look, don't let me comment. You have a think about it and you decide on that part because if, I can't really comment on this. ... 56After further discussion about whether the appellant could reduce the outstanding amount by selling options, Mr Mesaros informed him that "[a]t the moment you're in 92%" and the following conversation occurred (Blue 719): DM: You there? Sorry about that. Yeah, I've just done a quick calculation. Say, if you could sell about $200,000 worth. AR: $200,000 worth. DM: $200,000-$300,000, yeah. AR: OK. DM: I see its 70% geared but that's a start. As long as we could start from there and then we can work on a from (sic). See, actually, I've got $400,000. But we could work in increments. Say, $200,000 and then slowly $200,000 again. But ideally if we could get $400,000 as a whole package, then it'll reduce it down back up to under 90% or 95%. Yeah. 57The next conversation on 7 October 2008 was relied upon as the 95% representation. The recording of the particular part of the conversation was played during the hearing of the appeal. It was in the following terms (Blue 720-721): DM: Margin Lending. Oh, Anil? AR: Yeah, David. I just wanted to ask you, the market is turning around. Do you still want me to sell go ahead with the sales. DM: Yeah, no, it's turned around a bit. I'm just worried about the Dow Futures. It's still indicating, I'll just see what, it was pointing. Let's have a look. It's just, it's more of a sign of good faith. Just so Risk can see that we are trying to work towards getting this back into order. AR: That's right, yeah. DM: But the Dow Future. I'll just see how the Dow Futures looking at the moment, won't be a sec. AR: Because they trading about $30 now. DM: Yeah. The Dow's up a bit, 28 points. Just if we can, just as a sign of good faith at this moment, just have a look at what stock to sell and just sell, just if we can, see it's 91% geared. Yeah, no, cause if they see tomorrow nothing's come through, they'll start having not a whinge, they will, they'll be a bit more aggressive and just go in there and start selling themselves. AR: OK. DM: Yeah. Just if we can. Just as a sign of good faith, just put an order in there, get it executed, and then we'll take it from there. AR: Just something not a lot, is it? DM: Yeah. Just probably we still need, I'll just do a quick calculation. AR: Because my value must have improved now, isn't it? DM: It has, it has. I'm just getting your details on my screen. AR: You people must be very busy isn't it, I suppose most of the clients must be having the same thing. DM: Oh yeah, no, the majority of, everyone's in the same position at the moment, it's very, it's very, only a few that might be still fine in terms of having funds available, but a lot of people are in margin call at the moment. Have a look around because what's happening, the way you're positioned, the way your account stands at the moment, you're 91% into, your 91% geared. AR: Yep. DM OK. Once you get 95%, that's it, they're going to force sell. Your market value for your portfolio comes to $4.6 million. Your loan's $4.5 million. AR: Yep. 58During the balance of this conversation Mr Mesaros conducted what he referred to as "an assimilation" to see how the account looked on an hypothetical sale of BHP shares. He informed the appellant that "it" was pushing up to 97% (Blue 721-722). After further discussions about hypothetical sales of shares, Mr Mesaros said that the reason the gearing was pushed up to 97% was because, although the value of the shares may have been reduced, "the loan itself is not being reduced" because only a certain percentage (30%) had "come through" the system (Blue 723). 59On 8 October 2008 Mr Mesaros telephoned the appellant and informed him that the "market's had a bit of a shocker - overnight it looks like it's going to be another bad day today. We need something sold today. I need something sold" (Blue 727). Mr Mesaros said the sale should take place before 12 o'clock that day and that it would be best to work on $400,000 worth of shares. Mr Mesaros informed the appellant that he was worried that Risk "might suspend the account and sell them themselves." (Blue 728). The appellant had a further conversation with Mr Mesaros that day in which he discussed selling BHP Billiton Limited (BHP) or OZ Minerals Limited (OZL). The appellant decided he would sell OZL shares and telephoned the Bank later that day to advise that he had sold the OZL shares (Blue 727). 60On 9 October 2008 Mr Mesaros telephoned the appellant and asked him to send him the contract note in relation to the sale of the OZL shares (Blue 729). After discussion about the way in which the market was behaving and the fact that banks "worldwide" were "stepping up in the market and trying to halt the slide", Mr Mesaros said that the Bank would "hold off" for the time being (Blue 730-732). 61On 10 October 2008 Mr Mesaros telephoned the appellant and informed him that he had to sell some more shares that day and that if he could send him a quick email, he would try to hold off Risk as much as possible (Blue 733). Mr Mesaros suggested that the appellant should just try and sell another $200,000 worth of shares (Blue 734). 62On 15 October 2008 Mr Mesaros and the appellant had a further conversation which included the following (Blue 734): DM: I just got our Risk guys seeing what we can do to try and get this fixed. At the moment it's sort of fluctuating close to, where is it, I'll just get it up Anil, nearly 100, no. Where are we? 94% it's come off a little bit, but they're just worried if it gets close to 100, they're going to, I've just been told, if it gets close to 100, then they're going to force sell. AR: OK. 63Mr Mesaros said that if there was no "resolution" and the appellant could not come up with something the following morning, "they're just going to go in there and force sell" (Blue 737). 64On 16 October 2008 Mr Mesaros telephoned the appellant and said that everyone was in "panic mode". He said that he would find out what was happening in 10 or 15 minutes when the officer from Risk came into work (Blue 740-742). A short time later Mr Mesaros telephoned the appellant and informed him that Risk had "basically said they're going to force sell. They said don't sell anything. If you can't bring the cash or anything across at the moment or you can't do anything else, left with on (sic) option is it's going to go in and force sell it today". Mr Mesaros informed the appellant that the "way the market is at the moment" they were "going to force sell it today" and they were going to do so "at the opening". He informed the appellant there was nothing he could do and it was out of his hands. He apologised and said that Risk were "putting it together" as he spoke. The appellant said "Alright, no worries. Thank you." (Blue 743-744). 65During the period from 3 October 2008 to 14 October 2008 the appellant bought and sold a number of call options in Telstra, Woodside Petroleum Limited (WPL) and Oil Search Limited (OSH). That resulted in a credit to the Facility of option premiums in respect of Telstra of $1,396.16, WPL of $23,659.92 and OSH of $63,046.85 (Blue 451-452). 66On 9 October 2008 the appellant sold 122,124 OZL shares (settled on 13 October 2008) for an amount of $166,646.09. On 13 October 2008 the appellant sold 7,000 shares in BHP (settled on 15 October 2008) for an amount of $192,441.15 (Blue 451). 67On around 16 and 17 October 2008 the Bank sold all but a few of the appellant's shares for the amount of $3,866,115.45. On 19 December 2008 the Bank sold the remaining shares for the amount of $747.46. The proceeds of sale of the shares were less than the amount outstanding. The Proceedings 68The appellant was unable to pay the outstanding amount and Westpac commenced proceedings against the appellant for the outstanding balance. The pleadings 69Westpac filed the Statement of Claim in the District Court on 29 April 2010 seeking a verdict and judgment in the amount of $452,953.72, plus interest and costs. The appellant filed a Defence on 4 June 2010. After Westpac filed a Notice of Motion to strike out that Defence on 17 August 2010, the appellant filed a Defence and a Cross-Claim on 21 September 2010. 70The appellant's Cross-Claim was amended on 25 October 2011 (Amended Cross-Claim) and was further amended during the trial in March 2013 (Further Amended Cross-Claim). It is apparent that the appellant and/or his legal representatives did not review the transcripts of the taped conversations between the bank officers and the appellant prior to the filing of the Amended Cross-Claim in October 2011 71Westpac relied on the history of these amendments in support of its contention at trial and on appeal, that the appellant did not rely upon the representations made to him by the Bank. Misleading or deceptive conduct 72Prior to the filing of the Further Amended Cross-Claim, the appellant had claimed that the Bank had represented that once the gearing ratio of the Facility reached 90%, the Bank would "immediately" force sell his share portfolio (the 90% representation). He claimed that in reliance upon the 90% representation and on the instructions of the Bank, he had sold shares in his portfolio to the value of $192,441.15 to reduce the amount outstanding (Red 24 and 40). 73The appellant had originally pleaded only one representation (the 90% representation) and alleged it had been made on or about 3 October 2008 (Red 23). In the Amended Cross-Claim filed in October 2011 the appellant alleged that there were five representations made by the Bank on 3 October 2008, in reliance upon which he sold shares in his portfolio to the value of $192,441.15 (Red 38-40). 74It was alleged that on or about 3 October 2008 the Bank represented to the appellant that the Facility had been placed in margin call and an amount of $200,000 was required to be paid to "cover such call". This was referred to as the "First October Representation" (Red 38). It was also alleged that the Bank represented that the $200,000, if paid, would bring the Facility out of margin call. This was referred to as the "Second October Representation" (Red 38). It was also alleged that the Bank represented that if the $200,000 was paid, the appellant would have no legal obligation to take any further action under clause 7.2 of the Facility. This was referred to as the "Third October Representation" (Red 38). It was further alleged that the Bank represented that if it sold any shares, the sale would be of such quantity as might be necessary to discharge the margin call of $200,000 and no more. This was referred to as the "Fourth October Representation" (Red 38). It was further alleged that the Bank represented that if the value of the Facility reached around 90% of the value of shares in the appellant's portfolio the Bank would immediately sell the shares. This was referred to as the "Fifth October Representation" (Red 38). 75The appellant alleged that the First and Fourth October Representations were express and the balance were implied from the terms of the First and Fourth October Representations, having regard to the terms of the Facility, in particular clauses 7.1, 7.2, 7.4 and 7.5 (Red 38-39). The appellant also claimed that the Fifth October Representation was implied from the terms of the Risk Disclosure Statement that if the appellant did not act upon the margin call, the Bank could sell the shares to "ensure the amount outstanding no longer exceeds your borrowing limit"; and from the circumstance that the Bank had previously conducted a forced sale of the appellant's shares in circumstances in which the value of the shares exceeded the amount outstanding to the Bank under the Facility (Red 39). 76It was alleged that the October Representations were misleading and deceptive because: the Bank did not immediately sell the shares when the value of the Facility reached 90% of the value of the appellant's shares; at the time of the margin call an amount "vastly in excess of $200,000" was required to be paid to cover the call and return the Facility to its Borrowing Limit; an amount of $200,000, if paid, would not have brought the Facility back within its Borrowing Limit; and the Bank did not sell only such quantity of shares as might be necessary to discharge the margin call at $200,000 and no more (Red 39-40). It was alleged that the appellant was induced by the October Representations to sell shares to the value of $192,441.15 and not sell any further shares to meet the "margin call" on 3 October 2008 nor liquidate his share portfolio (Red 40). 77After the transcripts of the conversations were reviewed, the appellant amended his claim in a number of ways in the Further Amended Cross-Claim filed in March 2013. This included a change from the 90% representation to the 95% representation as well as the other representations, and to change the date of that representation, from 3 October 2008 to 7 October 2008 (Red 38). The appellant also amended his claim to allege that in reliance upon the 95% representation he sold shares in his portfolio to the value of approximately $358,000, and did not sell any further shares to meet the margin call of 3 October 2008 "and thereafter to 16 October 2008", and did not liquidate his share portfolio (Red 40). 78It was alleged that the October Representations were misleading and deceptive in contravention of s 42 of the Fair Trading Act 1987 (NSW) (FTA) and/or s 52 of the Trade Practices Act 1974 (Cth) (TPA) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) (Red 39). The Further Amended Cross-Claim included a statement that the appellant relied upon s 51A of the TPA, s 41 FTA and 12BB of the ASIC Act (Red 40). Breach of implied term 79All of the appellant's pleadings included a claim that the Bank was in breach of an implied term to act reasonably and in good faith. The original claim was that in breach of that implied term the Bank: had failed to monitor the value of the shares in the appellant's portfolio; had failed to liquidate the portfolio in circumstances where the market was rapidly falling; had failed to liquidate the portfolio when the value of the shares was greater than the amount outstanding under the Facility; and had liquidated the portfolio when the value of the shares was less than the amount outstanding under the Facility (Red 25). 80That claim was amended in October 2011 to expand the original claims to include claims that the Bank: had failed to determine that as at 3 October 2008 the gearing ratio had already reached 90% or greater of the value of the shares in the appellant's portfolio and that an act of default had occurred; had failed to disclose to the appellant that as at 3 October 2008 the gearing ratio had reached 90% or greater of the value of the shares; had failed on 3 October 2008 to immediately liquidate the portfolio; that it had failed to identify steps under clause 7 of the Facility for the purposes of reducing the amount outstanding to the borrowing limit or below; that it had delayed the taking steps to reduce the amount outstanding to the borrowing limit or below; that it had failed to accurately identify the amount required to reduce the amount outstanding to the borrowing limit or below and communicate it to the appellant in a sufficiently timely way to permit him to take the action required by clause 7.2 of the Facility; and that it had misstated the amount required to meet the margin call (Red 42). 81The claim was amended again in the Further Amended Cross-Claim filed in March 2013. The appellant abandoned the claim that the Bank had failed to properly monitor the value of the shares and to determine that the gearing ratio had reached 90% as at 3 October 2008 (Red 41). It included claims that the Bank had failed to disclose to the appellant in the period 3 October 2008 to 15 October 2008 that the value of the Facility reached 95% or greater of the value of the shares in his share portfolio; and failed to immediately liquidate the appellant's share portfolio when the value of the Facility reached 95% or greater of the value of the shares in his portfolio (Red 41). It was also alleged that the Bank led the appellant to believe in the period 7 to 15 October 2008 that the Bank would conduct a forced sale of the shares of the appellant's share portfolio when the value of the Facility reached 95% of the value of shares (Red 42). It was also alleged that the Bank misstated or failed to inform the appellant when the gearing ratio reached 95% or greater in the period 7 to 15 October 2008 (Red 42). Unconscionable conduct 82The first time a claim of unconscionable conduct was made was in the Amended Cross-Claim filed in October 2011 (Red 42). The appellant claimed that the Bank's conduct in making the margin call and selling the shares was unconscionable within the meaning of ss 12CA and 12CC of the ASIC Act (Red 42). It is apparent that the appellant intended to particularise the claim in reliance upon the particulars pleaded in respect of the alleged breach of the implied term to act reasonably and in good faith (Red 42). There was no amendment to this claim in the Further Amended Cross-Claim filed in March 2013. Estoppel 83The Estoppel claim was made in the Defence filed on 21 September 2010 and amended in the Amended Defence filed during the trial in March 2013 (Red 17). In the original pleading reliance was placed on the 90% representation. This was changed to the 95% representation in the amended pleading. The appellant alleged that he acted in reliance upon the 95% representation and expected that if the gearing ratio reached 95%, then the Bank would "immediately" sell his portfolio (Red 17). In the Amended Defence he claimed that on the basis of the representation he only sold shares to the value of approximately $358,000. He claimed that in selling those shares he suffered detriment in that the Bank did not immediately sell his portfolio when his gearing ratio reached 95%; it sold the shares in his portfolio when the amount outstanding under the Facility was in excess of the value of the shares; the appellant did not sell sufficient shares to meet the margin calls; and it "now seeks" to recover the shortfall from the appellant (Red 18). 84There was also a claim that the Bank had failed to mitigate its loss. However it is not necessary to refer to this matter because it is not the subject of this appeal. 85In its Defence to the Cross-Claim the Bank denied it had misled or deceived the appellant and alleged that the appellant had expressly acknowledged and agreed that: whatever happened to the market value of securities, he would still be legally obliged to pay the full amount borrowed from the Bank including all interest charges; he would have limited time to deal with a margin call and that in the event that he failed to act within time, the Bank would be at liberty to sell securities; and the Bank would not be liable for any change or movement in the value of any security comprising part of the mortgaged property or any loss, damage, cost, liability or expense suffered by the appellant as a result of the failure of any services provided by the Bank (Red 31; par 10(a)-(c)). The Trial 86The proceedings were heard on 5 to 8 March 2013. The Bank relied on two affidavits of Rodney Owen for the purpose of substantiating the relevant default and the amounts owing by the appellant under the Facility. The Bank tendered the telephone transcription records of the conversations between the appellant and Mr Mesaros and other officers of the Bank. (Black 153) 87The appellant relied upon his own affidavit sworn on 22 October 2012 and tendered various parts of the affidavits of the Bank's officers, Mr Mesaros and Mr Polyblank (Black 200-201). These were affidavits that the Bank had served on the appellant but did not read at trial. The appellant was the only witness who was cross-examined (Black 80-151). 88In cross-examination the appellant accepted that it was his responsibility to monitor his account (Black 91); he understood that he had an obligation to repay the money that he had borrowed (Black 88); and (Black 91) he kept an eye on his investment throughout the relevant period. He claimed that although internet access was available to customers, he did not have the use of an internet password. He monitored his Facility by contacting Mr Mesaros (Black 91). Although the appellant was provided with statements of the status of the Facility, he said that he did not check them because they were only of "historical value" (Black 92). 89The appellant's affidavit evidence was that on Friday evening, 3 October 2008, he received a telephone call from Mr Mesaros. In this conversation he was advised that his account was in margin call and that he needed to sell about $200,000 worth of shares to clear the margin call (Black 97). He gave evidence that he monitored the market over the weekend and then on Tuesday 7 October 2008 he had a series of conversations with Mr Mesaros in terms recorded in the transcripts referred to earlier (Black 97-100). The appellant accepted that at this time the market was "very volatile" and that it would take $403,000 just to bring the Facility back into the buffer. He also understood that it would take $912,000 to bring the Facility back to within the borrowing limit (Black 101). He gave the following evidence in cross-examination (Black 101): Q. Now, you then say, "How long can you hold it? I mean, because I'll have to sell. That's the only thing I can do. I mean, I can't put in the money." A. Correct. Q. You mean you don't have 912,000 in cash just sitting there. A. No. Q. But you say that you could sell some shares in your portfolio. A. Yes. Q. Now, the trouble with doing that is you may have to sell an amount in excess of $912,000 worth of shares in order to bring back the account within limits. A. Correct. Q. You understood that at the time? A. Yes. Q. Because the shares are geared so that reducing the share portfolio might reduce the amount outstanding, but at the same time your loan is not coming down by a comparable amount. A. Yes. 90The appellant accepted that on 7 October 2008 he knew that he was at least $912,000 above the borrowing limit and that Mr Mesaros said that they could work in "increments" with $200,000 and a further $200,000 (Black 109-110). He accepted that Mr Mesaros said that ideally $400,000 "as a whole package" would reduce the Facility back to under 90% or 95% (Black 110). 91His evidence in relation to the representation about the forced sale at 95% included the following (Black 112-113, 118): Q. "Once you get 95%, that's it, they're going to force sell." A. That's right, so that's the one. Q. "Your market value for your portfolio comes to 4.6 million, your loan is 4.5 million. A. Yes. Q. But he's not telling you, is he, that that's the only circumstance in which they'll do a forced sale? A. Well, that's what I understood. Q. Well, he just - A. If it goes to 95%, they are going to conduct a forced sale. Q. He told you that if nothing - just a few seconds before - A. Yes. Q. "If they see tomorrow nothing's come through -" A. Yes, so they could - Q. They'll start not having a whinge, they'll be a bit more aggressive and go in there and start selling themselves." A. So they can do it before 95. Q. I'm sorry? A. They can do it before 95. Q. Of course, and you understood that at the time. A. Yes. But 95 is the maximum, that's what he said. Q. Then he says "it's very heavily geared". A. Yes. ... Q. So I suggest to you that as you understood it he's again trying to help you by holding off risk. A. Yes. Q. You accept that? A. Yes. Q. The last thing you wanted was a forced sale on your whole portfolio. Correct? A. No. See, my intention was that on 7 October he told me I'm at 92% if you recall. Q. Yes. A. At 95%, I'll do a forced sell. So my down side is only 3%. Correct? Q. Yes. A. Upside is a lot. So at 95%, I mean, either I can let the bank do a forced sale, or do myself a forced sale at 92%. There is not much difference. 92The appellant accepted that Mr Mesaros informed him that if he could sell $400,000 worth of shares then Risk might "hold off" but that he understood that it was not certain that Risk would "hold off" (Black 121). He said that his understanding was that Risk had "total control" and Mr Mesaros had "nothing" (Black 121). His evidence included the following (Black 124 and 131): Q. You were hoping that between you and David Mesaros you could hold off risk? A. No, no. Risk has much, much more power than David Mesaros. David Mesaros is just a person who talks between risk and myself. Risk takes independent decisions. Q. So you didn't take anything seriously that David Mesaros said to you? A. No, because forced sale has happened before. ... Q. He's trying to help you isn't he, Mr Razdan? A. He has no power. I told you again, it's the risk management team that has power. He is just a communicator between the risk and myself. 93The appellant gave the following further evidence in respect of the forced sale of his portfolio (Black 127-128): Q. You don't make any complaint, do you, about the forced sell? A. Forced sell has happened before, they have complete right to do it. Like you said, they told me in the beginning, if it goes to 95%, a forced sale will happen, and I was prepared for that. Q. You don't make any complaint about the fact that St George has done something that you now say they promised not to do? Anything like that? A. No. Forced sell is part of their job. 94The appellant was cross-examined in relation to the conversation that occurred on 3 October 2008 in relation to selling about $200,000 worth of shares to clear the margin call as follows (Black 131-132): Q. You say that he said to you "You need to sell about 200,000 worth of shares to clear the margin call". A. Where is it on 536 page? Q. 537. Now, did you understand that to mean 200,000 to bring it back into buffer, or to bring it back to a point where the amount outstanding was no more than the borrowing limit? Which one? A. The way St George works is to put the loan back into the buffer. It can't be clearing the buffer because my buffer size is 500, 600,000. So it's put back into the buffer. Q. You understood that at the time? A. Correct. Q. So you understood at the time that there was no way that paying 200,000 could bring it back to a point at which the amount outstanding no longer exceeded the borrowing limit? A. Yes, but that - Q. Did you understand that on 3 October? A. Absolutely. 95The appellant accepted that at least from 7 October 2008 he understood that his account was in a "very bad position" (Black 134). He claimed, however that on 3 October 2008 his account was in "a good position" because he required only $200,000 worth of shares to be sold (Black 134). He claimed that he did not liquidate his portfolio because the Bank informed him that at 95% there would be a forced sale (Black 135). 96The appellant claimed that, had he been told by the Bank to sell his portfolio on 16 October 2008, he would have done so when the market opened. He claimed that the Bank did not conduct the forced sale until the evening of 16 October 2008, thereby placing his account in the negative (Black 147). The Judgment 97After recounting some of the history in relation to the appellant's loan application and the general nature of the Facility, the primary judge referred to the GFC and the forced sale of the appellant's share portfolio by the Bank (Red 48-50; [1]-[6]). The primary judge then referred to the appellant's contention that he "does not owe the bank anything" and his defences of misleading and deceptive conduct; unconscionable conduct; a breach of the implied term of the Facility; the estoppel claim; and the Bank's failure to mitigate the loss suffered (Red 50; [7]). 98The primary judge also referred to the context in which the parties operated with particular emphasis on the fact that they were not strangers to the "risky business" of margin lending and that the competing claims had to be assessed in the context of and with reference to the terms of the Facility. In particular, reference was made to the provisions of clause 38.4 of the Facility pursuant to which the Bank was not liable for any loss caused by the exercise or attempted exercise "or delay in exercising" a right or remedy under the Facility (Red 50-51; [9]-[11]). His Honour also referred to the provisions of the Risk Disclosure Statement that the appellant was not able to "just wait out" any downturns in the market once the Facility was in margin call (Red 52; [13]). 99The primary judge noted the parties were in agreement that the recorded telephone conversations between the appellant and Mr Mesaros were the "most accurate evidence" of the conversations between the appellant and the Bank (Red 53; [17]). One of the factual issues for resolution at trial was whether the telephone call occurred on 3 October 2008 after the close of business when the appellant was informed that he needed $200,000 "to cover the margin call". His Honour accepted that the conversation took place (Red 53-54; [19]-[21]). There was also an issue regarding the appellant's credibility. The primary judge concluded that the appellant's recollection was "unreliable" having regard to the adoption of allegations in the original cross-claim and the changes in the later amended pleadings (Red 55; [22]-[25]). His Honour found that the appellant was somewhat cavalier in entering into the Facility "where there was a lot of money involved in a high risk enterprise without bothering to read the fine print" (Red 56; [26]). However his Honour found that this did not impact or reflect upon the appellant's honesty (Red 56; [26]). 100The primary judge concluded that the appellant was "educated and sophisticated" and was "quite used to these sorts of financial dealings" (Red 57; [28]). (The appellant is an engineer by background and at the relevant time had worked as a computer operator for New South Wales Lotteries for the previous 10 years (Black 82)). He had been an investor in the stock market over the years and he used the Facility to purchase shares during the period 2005 to 2008. He was not a trader in shares but rather sought to accumulate a portfolio of shares (Black 83). He also operated margin lending facilities of an apparently similar nature with ANZ, JBWere and BT (Black 82-83)). 101The two important features of the appellant's case were identified by the primary judge as: (1) a claim that the Bank informed the appellant that he needed to provide less money to bring his account out of margin call than the facts showed was needed; and (2) a claim that the Bank informed the appellant that once the gearing ratio between the appellant's loan and the value of his portfolio reached 95% the Bank would sell his portfolio (Red 57-58; [29]-[30]). The primary judge referred to the appellant's claim that once he was informed the Bank would sell out his portfolio at 95% he "simply relied" on the Bank to do so and was shocked to find that there was any outstanding amount owing (Red 58; [30]). The primary judge's reasons included the following: 31. Both those aspects of his case - the assertion that $200,000 was needed instead of some eight or nine hundred thousand, and the assertion that the bank would sell out at 95 per cent - find a basis in the transcripts of the telephone calls. ... 32. One basis, of course, is in the diary note which I have already referred to. That says in terms that Mr Razdan needed "$200,000 to cover the margin call." The transcripts of the telephone calls support that figure of $200,000. Most of the conversation occurs on 7 October 2008. In one of the conversations on that day, Mr Mesaros says "I've just done a quick calculation. Say, if you could sell about $200,000 worth" (that appears at p 472 of the Court Book) At p 474 of the Court Book, the transcript records Mr Mesaros saying "Once you get 95%, that's it, they're going to force sell." The reference to 'they' is a reference to the Risk Department of the bank which made decisions about the bank's exposure. 33. So Mr Razdan says that if he had known that his exposure was much greater than $200,000, then he might have acted differently. In addition, he says that he relied upon the fact that he was told that the bank would sell out at 95 percent gearing ratio. Mr Svehla argues that these assertions and others, which are pleaded, comprised incorrect communications of the true margin position given by the bank to his client. 34. I need to make a finding about this claim of incorrect communications and reliance. First, Mr Svehla acknowledged in his address that the assertions made by the bank were correct "on a couple of occasions". Those acknowledgements occur over pp 184 to 185 of the transcript. Subject to those exceptions, Mr Svehla says that his client was given "an incorrect statement of the margin call position on the third, and largely thereafter, an incorrect statement of the position to the sixteenth, day-by-day." Mr Razdan's whole portfolio was sold by about the middle of October resulting in the loss. 35. However, I regard the occasions that Mr Svehla said were exceptional as being very important exceptions. They mean, in my opinion, that the bank representative did communicate the correct position so far as the outstanding amounts were concerned. Mr Mesaros phoned Mr Razdan on 7 October informing him that he had "just got an email from Risk". They were asking if Mr Razdan could put some more money into his account. Then Mr Mesaros went on to say that "[a]t the moment, the way it looks, the buffer amount is 509 you're in there by $912,000." Mr Razdan replied, "912 is a lot, is it?". Mr Mesaros replied in the affirmative and went on to say that the "difference there, what's the difference, 912 minus 509, we are looking at about $403,000 at the margin. 36. The conversation then proceeded about how to manage that exposure. The references to $200,000 were made in the context of the ongoing conversation about how to manage the exposure and also in their own particular context in the conversation. An example occurs at Court Book p 472, where Mr Mesaros says, "I just done a quick calculation. Say, if you could sell about $200,000 worth." Mr Razdan repeats that amount so that he understands the figure, but Mr Mesaros adds, "$200,000-$300,000 yeah." Again, Mr Razdan acknowledges that range given to him. Mr Mesaros says that "its 70% geared but that's a start." He says that " as long as we could start from there and then we can work on a from [sic]." He then adds, significantly, "actually, I've got $400,000. But we could work in increments. Say, $200,000 and then slowly $200,000 again. But ideally, if we could get $400,000 as a whole package, then it'll reduce it down back up to under 90% or 95%. Yeah." 37. It is very apparent to me, from those portions of the conversation which I have quoted, that Mr Mesaros made it clear to Mr Razdan that his overall exposure was in the region of $400,000, that the buffer was some $509,000 and the amount outstanding, some $912,000. Although he made reference to a $200,000 amount, it was in the context of managing the repayments. Indeed, he used the expression "increments" and more than once referred to the figure of $400,000 which he referred to as "a whole package" and that it should "ideally" be in that amount. 38. Hence I conclude that Mr Mesaros did communicate the correct and accurate position so far as Mr Razdan's exposure was concerned. It was Mr Razdan's obligation under the contract to monitor his investment and be aware of his obligations. If he was unsure about his financial position, then it was in his own interests to ask. Mr Razdan chose to conduct his dealings by telephone. He was entitled to do so. But that meant that what he was being told on the telephone became very important and it was very important for him to listen very carefully. In my view, the important parts of those telephone conversations were about how to manage the overall exposure. The correct information about the actual exposure set the scene, then much of the conversation was about management. 39. It is not the case, as Mr Svehla submitted, that Mr Razdan did not know his true position and was not being told by Mr Mesaros. It was the position that Mr Razdan chose to conduct his business with the bank mainly reliant upon the telephone calls which meant that there was a far more spontaneous exchange of information, which meant that pieces of information which were conveyed would set a context and then the conversation would proceed from there. 40. Those are the significant findings which I have now made and they largely determine the way in which I will decide this case. 102The primary judge then referred to the agreed statement of issues that had been provided to him by counsel for the respective parties and addressed each of those issues. The first was whether there was an implied term that Westpac would act reasonably and in good faith in exercising its powers and rights. After referring to the decisions in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 and Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 his Honour said (Red 64): 43. I am of the opinion that although I would be prepared to find that there was an implied term of reasonableness and good faith in the contract, the express terms of the contract take precedence and there is no evidence of any breach on Westpac's part of such an implied term. Indeed, the agreement provides that the bank is not to be held responsible for anything said even if it was said negligently. 103His Honour then went on to deal with the allegation of a failure to mitigate (Red 64; [44]) and then said (Red 64-66): 45. It is important, in my opinion, to regard the dealings between the parties over these few days in this context. The bank was acting in its own interests as well as in Mr Razdan's interest. It was in the interests of neither of them that the portfolio should be sold at a loss. The other important context was that both parties were operating over a short period of days when the market was operating in extraordinary circumstances. I do not regard, turning to the question of whether an estoppel has been made out, the assertions by Mr Razdan in his pleadings as forming the basis for any conduct which would estop Westpac from making the claims which it does. I do not find any clear and unambiguous representation which could be the basis of such an estoppel. 46. The remark about a 95 per cent sale was - as is said in the plaintiff's written submissions - "made in the context of lengthy conversations". As I have observed myself, the parties, particularly on 7 October 2008, were engaged in several lengthy conversations about the best way to manage the account in the extraordinary market circumstances. I have listened to the conversation which included the assertion about the 95 per cent. I do not regard it as the kind of assertion which would found an estoppel. Not only that, I do not think that Mr Razdan relied upon it. I say that because he acknowledged in cross-examination that he did not take seriously anything that Mr Mesaros said insofar as he understood that Mr Mesaros was subject to direction from the Risk Department of the Bank. 47. In addition, there was no assertion by Mr Razdan made during the course of any later telephone conversations or correspondence about that 95 per cent figure. Had Mr Razdan been relying upon the assertion to the extent that would be needed for him to succeed in this defence or claim, I expect that he would have made clear to bank representatives that he was at the time relying upon the bank selling out at 95 per cent and no greater. 48. Mr Razdan claims in his cross-claim that four representations were misleading and deceptive and provide a basis for relief under the then Trade Practices Act 1974 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). I do not regard any of the assertions when seen in context as misleading or deceptive. In addition, I do not think that Mr Razdan, for the reasons I have already said, relied upon or took seriously what Mr Mesaros said. He made his position very clear. For the same reasons I do not think that the bank engaged in any unconscionable conduct. 104The primary judge then dismissed the Cross-Claim and entered a verdict and judgment for the Bank (Red 66; [51]). The Appeal 105The appeal was heard on 6 February 2014 when Mr DA Smallbone, of counsel, appeared for the appellant and Mr J Stoljar SC, leading Mr J Hynes, of counsel, appeared for the Bank. Grounds of Appeal 106The appellant abandoned Grounds 1 to 6 and 18 and 19 of the Amended Notice of Appeal filed on 13 September 2013. The remaining Grounds of Appeal relate to the primary judge's finding in relation to: the 95% representation (Grounds 7 to 9); the estoppel claim (Grounds 10 and 11); the claim of breach of the implied term to act reasonably and in good faith (Grounds 12 to 15); and the unconscionable conduct claim (Grounds 16 and 17). 107In respect of the 95% representation, the appellant contends that the primary judge erred: in failing to find that the representation was misleading or deceptive (Ground 7); in finding that the appellant did not rely upon it (Ground 8); and in failing to find that the appellant relied upon it by refraining from selling shares in his portfolio (Ground 9). 108In respect of the estoppel claim, the appellant contends that the primary judge erred in: holding that there was not a sufficiently clear representation made by the Bank to ground an estoppel (Ground 10); and failing to hold there were representations made which gave rise to an estoppel (Ground 11). 109In respect of the claim of breach of the implied term of reasonableness and good faith, the appellant contends that the primary judge erred in: holding that the express terms of the Facility "took precedence" (Ground 12); in failing to hold that there was an implied term of reasonableness and good faith and that the express terms of the Facility did not take precedence nor displace the implied term (Ground 13); in finding there was no evidence of any breach by the Bank of the implied term of reasonableness and good faith (Ground 14); and in not finding that there was evidence of such a breach and that such a breach had occurred (Ground 15). 110In respect of the unconscionable conduct claim, the appellant contends that the primary judge erred in: failing to give reasons for concluding that the Bank had not engaged in unconscionable conduct (Ground 16); and in failing to hold that the Bank had engaged in unconscionable conduct (Ground 17). Ground 7 - misleading or deceptive representation 111The appellant's Further Amended Cross-Claim alleged that the Bank represented that if the gearing ratio "reached around 95%" the Bank "would immediately sell" the appellant's shares (Red 38). The statement relied upon at trial as the 95% Representation was made during the third telephone conversation between Mr Mesaros and the appellant on 7 October 2008. It was in the following terms: "Once you get 95%, that's it, they're going to force sell" (Blue 721). 112The primary judge's express finding was that the "four representations" were not misleading or deceptive (Red 65-66: [48]). No point was raised on appeal that this did not include the 95% Representation. The appellant did not complain that the primary judge did not make an express finding that the 95% Representation was not misleading or deceptive. Rather the complaint is that his Honour should have made a finding that it was misleading. 113The appellant's Further Amended Cross-Claim included an allegation that the October Representations (which included the 95% Representation) were misleading and deceptive. It included reliance upon s 51A of the TPA, s 41 of the FTA and/or s 12BB of the ASIC Act to claim that the 95% Representation was a representation as to a future matter (the future matter claim) (Red 40: par 4(d)). In final submissions at trial, the appellant's counsel referred to the future matter claim and submitted that a representation is taken to be misleading "unless the person who makes the representation adduces evidence to the contrary" (Black 216). Counsel also submitted at trial that if the primary judge accepted that the 95% Representation was a representation as to a future matter, then his Honour would need to consider all of the evidence and the Bank's failure to call evidence on this issue (Black 216). 114There is no reference in the primary judge's reasons to s 51A of the TPA, s 41 of the FTA or s 12BB of the ASIC Act, nor did his Honour make any findings in respect of the claim that the 95% Representation was a representation as to a future matter. 115The appellant contends that the 95% Representation was made with respect to a future matter and is taken to have been misleading if the Bank did not have reasonable grounds for making it. It was submitted that the onus was on the Bank to prove it had reasonable grounds for making the 95% Representation and it did not do so. It was submitted that in those circumstances the 95% Representation is taken to be misleading and the primary judge fell into error in failing to make such a finding (Orange 14-16: [33]-[39]). 116The Bank submitted that the 95% Representation must be considered in the context in which it was made. That is not in issue. The Bank submitted that viewed in context there was "clearly nothing promissory or cast-iron" about the 95% Representation and that it was a "passing, spontaneous prediction made in the flow of one of many discussions" (Orange 65: [49]). 117In Ting v Blanche (1993) 118 ALR 543 Hill J said at 553: Whatever may be the case where there is an express representation as to the maker's state of mind concerning a future matter, it is not, in my opinion, correct to treat a representation as to an event or conduct in the future, be that in the form of a prediction or otherwise, as not being a representation with respect to a future matter merely because it implies a representation as to the maker's present state of mind. 118Similarly in Willett v Thomas [2012] NSWCA 97 at [160] Macfarlan JA said that the fact that the relevant statements were of the maker's belief or opinion did not mean that the representations were not also with respect to future matters and that it depended on the words used and the context in which they were used. In that case an accountant had made statements about a particular investment including that the company was "in its global infancy as a business and 'was rocketing in the right direction'". Macfarlan JA concluded that this implied that the company was "likely to grow substantially in the future". 119Section 51A of the TPA provided relevantly as follows: 51A Interpretation (1)For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2)For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation. 120There are similar provisions in s 41 of the FTA. There are also similar provisions in s 12BB of the ASIC Act relating to representations in relation to "financial services" (s 12DA to s 12DN). The provisions of the ASIC Act refer only to evidence being adduced rather than a particular person having to adduce the evidence: s 12BB(2). The successor to s 51A of the TPA, s 4(2) of the Australian Consumer Law, also adopts the concept of evidence being adduced rather than "it", the representor, being required to adduce evidence. There has been debate in respect of which party must adduce the requisite evidence under s 51A of the TPA: Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [129]; Fubilan Catering Services Pty Ltd v Compass Group (Aust) Pty Ltd [2007] FCA 1205 at [545]; McGrath; in the matter of Pan Pharmaceuticals Ltd (in liq) v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230, [2008] FCAFC 2 at [190]; Australian Securities and Investments Commission v Cycclone Magnetic Engines Inc and Ors (2009) 71 ACSR 1, [2009] QSC 58 at [189] - [195]; Dib Group Pty Ltd v Ventouris Enterprises Pty Ltd (2011) 284 ALR 601, [2011] NSWCA 300. However in this instance it is not necessary to resolve the issues identified in the debate because the Bank adduced the evidence, the transcripts of the telephone conversations, on which it relies to submit that it had reasonable grounds for making the 95% Representation. 121The 95% Representation was a statement as to what Risk would do if the gearing ratio reached 95%. If the condition was satisfied, that is, if the ratio reached 95% at some time in the future, then it was said "that's it", Risk would force sell the appellant's portfolio. Even if the representation might be characterised as Mr Mesaros' opinion or belief, it is still a representation as to a future matter. That matter being what would happen to the appellant's share portfolio if the gearing ratio reached the stated level. 122The Bank relied upon the whole of the transcripts of the conversations with the appellant to submit that it is clear that pressure was being applied by Risk to have the Facility brought within appropriate limits. However there was no evidence of the nature of the communications between Mr Mesaros and Risk, other than the hearsay statements made by Mr Mesaros in the transcripts, that Risk was intending to force-sell the portfolio when the Facility reached a gearing ratio of 95%. The appellant submitted that it is clear there were no reasonable grounds for such a statement because the gearing ratio had been 95% and above immediately after the representation was made until the time that the forced sale took place on 16 October 2008. It was submitted that in those circumstances there was no evidence adduced by the Bank of any reasonable grounds for the making of the 95% Representation and it is deemed to be misleading. 123The Bank contended that there were two matters that demonstrated that Mr Mesaros had reasonable grounds for making the 95% Representation. The first matter was said to be the fact that the appellant's account was frequently in margin call in September 2008 and October 2008. The second matter was said to be that Mr Mesaros was desperately trying to assist the appellant to "hold off" Risk by coming up with strategies to bring down the gearing ratio (Orange 66: [53]). These two matters may support a finding that the Bank would have been justified in selling the appellant's portfolio of shares. However in my view they do not establish reasonable grounds for the making of a specific statement that Risk would act at a particular juncture (when the ratio reached 95%). I am satisfied that no evidence was adduced, by any party, to establish that the Bank had reasonable grounds for making the 95% Representation. 124I am satisfied that the 95% Representation was a representation as to a future matter and that in the circumstances it is taken to be misleading. Grounds 8 and 9 - Reliance 125The Bank submitted that, irrespective of the characterisation of the 95% Representation, the appellant wholly failed to demonstrate the requisite reliance upon it. 126The primary judge's conclusion that the appellant did not rely upon the 95% Representation was based in part on the appellant's acknowledgement in cross-examination that "he did not take seriously anything that Mr Mesaros said insofar as he understood that Mr Mesaros was subject to direction from the Risk Department of the bank" (Red 65 [46]). The primary judge's conclusion was also based on the fact that the appellant made no assertion during the course of later telephone conversations or correspondence with the Bank that he had relied on the 95% Representation. His Honour expressed the view that, had the appellant been relying upon the 95% Representation, it is to be expected that he would have made clear to the Bank that he was relying upon the Bank to sell his portfolio of shares at 95% (Red 65: [47]). 127The appellant's written submissions included the following (Orange 17): 44. Mr Razdan gave evidence in chief to the effect that he relied upon the 95% Representation: Razdan 22.10.12 [29], [32] (CB 538, 542); T71.38-50, 73.8-74.9. His evidence was to the effect that he had been told on 7 October 2008 that his investment was 92% geared and that the Bank would force sell at 95%. 128This reference to the appellant's affidavit of 22 October 2012 is a reference to paragraphs of his affidavit in which there was no mention of the 95% Representation (Blue 16-17 and 20-21). Those paragraphs related to the statement by the Bank officer on 3 October 2008 that the appellant needed to sell about $200,000 worth of shares to clear the margin call. There is no mention of the 95% Representation in the transcript references (Black 71 and 73-74). The evidence on those pages refers once again to the representation in relation to the $200,000 worth of shares being sold. 129However in paragraph 29 of his affidavit, the appellant claimed that if the Bank had advised him that his account was at 95.41% on 3 October 2008, he would have liquidated his portfolio on the opening the following business day. One of the problems with that claim is that there was no evidence before the primary judge that the appellant's Facility was geared at 95.41% on 3 October 2008. The Current Margin Call Report recorded that the ratio was at 88.76% on 2 October 2008, 95.42% on 6 October 2008, 91.78% on 7 October 2008 and from 8 October 2008 to 16 October always above 95% (Blue 529-531). The MLS was updated with a delay of approximately 20 minutes and it is not clear at what time of the day these Reports were generated. In any event, the affidavit evidence was not in relation to the 95% Representation or reliance upon it probably because the affidavit was prepared prior to the time that the appellant and/or his legal representatives reviewed the transcripts of the conversations. 130At the time his affidavit was made the appellant claimed that he relied upon a representation that was made on 3 October 2008 in respect of a forced sale when the gearing ratio reached 90%. It was only in his evidence-in-chief that he sought to change that affidavit evidence to introduce the 95% Representation and to change the date the representation was made from 3 October to 7 October 2008. The appellant accepted that the conversation that he had recorded in his affidavit was inaccurate in so far as it included material that was not in the transcribed conversations (Black 133). In cross-examination he said that he did not liquidate his portfolio because the Bank told him that it would force sell his portfolio at 95% (Black 135-136). However the primary judge did not accept that the appellant relied upon the 95% Representation. 131The appellant submitted that it was "a patent abuse of the fact finding process" for the primary judge to have relied upon the appellant's evidence that he did not take anything Mr Mesaros said seriously in rejecting his claim that he relied upon the 95% Representation. It was submitted that the appellant's evidence demonstrated that he was expecting a forced sale in "the event that his portfolio became too heavily geared" (Orange 17: [46]). 132The appellant gave evidence at trial that Risk was "well above" Mr Mesaros who was "just an account manager". He said that Risk had "total control" and Mr Mesaros "has nothing" (Black 121). He also gave evidence that Mr Mesaros had "no power" and that he was "just a communicator between the risk and myself" (Black 131). His evidence included the following (Black 124): Q. You were hoping that between you and David Mesaros you could hold off risk? A. No, no. Risk has much, much more power than David Mesaros. David Mesaros is just a person who talks between risk and myself. Risk takes independent decisions. Q. So you didn't take anything seriously that David Mesaros said to you? A. No, because forced sale has happened before. 133This was evidence the primary judge was entitled to take into account in deciding whether the appellant relied upon the 95% Representation. It was not considered in isolation. The primary judge also considered the detail of the conversations and the fact that the appellant did not mention the 95% Representations in subsequent conversations with the Bank. 134The appellant submitted that the fact that he did not mention the 95% Representation in subsequent communication with the Bank was not sufficient to displace his evidence, honestly given, that he relied upon it. That submission needs to be viewed in the light of the fact that on 15 October 2008 Mr Mesaros said that Risk was going to force sell if the ratio "gets close to 100". If the appellant had truly stayed his hand from selling the whole of his portfolio in reliance upon the 95% Representation, this was an exquisite opportunity to say to the Bank that it had an obligation to sell at 95% and not to wait until the ratio reached 100%. No such statement was made. It was the opportunity for the appellant to say to the Bank that he had held off selling his portfolio of shares because he thought the Bank would sell the shares at 95%. Nothing of this nature occurred. 135The appellant submitted that the conversations in which he expressed disbelief that there was a shortfall after the sale of his portfolio were consistent with his claim that he relied upon the 95% Representation (Orange 18:[47]). By the time the appellant expressed such surprise, Mr Mesaros had informed him that the Bank was going to sell if the ratio was close to 100%. A sale at this level might have engendered a belief that there would be no shortfall. The fact that the appellant said nothing about his claimed reliance on the 95% Representation, in particular when Mr Mesaros mentioned the forced sale at 100%, is a powerful indicator of the appellant's position at the time. The primary judge was entitled to take the appellant's lack of complaint into account. 136I am not satisfied that the primary judge erred in finding that the appellant did not rely upon the 95% Representation. Grounds 10 and 11 - Estoppel 137In dealing with the whole of the appellant's claim, the primary judge said that he did not regard "the assertions" in the pleadings "as forming the basis for any conduct which would estop Westpac from making the claims which it does". His Honour said that he did not find "any clear and unambiguous representation which could be the basis of such an estoppel" (Red 64-65: [45]). 138The primary judge concluded that the 95% Representation was not "the kind of assertion which would found an estoppel" (Red 65: [46]). His Honour based this finding on the fact that the statement was made "in the context of lengthy conversations". His Honour had listened to the conversation which included the 95% Representation. Although the primary judge did not describe the listening experience the irresistible conclusion is that his Honour reviewed the conversions in context to conclude that the 95% Representation was not "the kind of assertion which would found an estoppel". 139An estoppel "follows on findings of representation, causation, change of position and prejudice": KR Handley, Estoppel by Conduct and Election Thomson Sweet & Maxwell (2006) p 19 [1-027]. There must be the creation or encouragement of a particular assumption by the representor and reliance on that assumption to the detriment of the representee in circumstances where departure from the assumption would be unconscionable: Austotel Pty Ltd v Franklins Selfserve Pty Limited (1989) 16 NSWLR 582 at 610. 140It follows from the findings above in relation to reliance that even if the 95% Representation was clear and unambiguous, there was no reliance upon it. Grounds 12 to 15 - Breach of Implied Term of Reasonableness and Good Faith 141The appellant complained that the primary judge erred in holding that the express terms of the Facility "took precedence". It seems to me that what the primary judge intended to convey by that statement was that it was not permissible to imply a term of reasonableness and good faith that would be inconsistent with the express terms of the contract. His Honour said (Red 64: [43]): I am of the opinion that although I would be prepared to find that there was an implied term of reasonableness and good faith in the contract, the express terms of the contract take precedence and there is no evidence of any breach on Westpac's part of such an implied term. Indeed the agreement provides that the bank is not to be held responsible for anything said even if it was said negligently. 142The appellant made detailed submissions as to why the 95% Representation was not "information, advice or opinion" within the meaning of those terms in clause 36.5(b) of the contract. It was submitted that clause 38.4 does not exclude an implied term that the Bank would exercise rights and remedies reasonably and in good faith. 143The appellant accepted that the Bank had a right to sell his share portfolio. However he complained that the Bank informed him that it would sell his portfolio when the gearing ratio reached 95% and it did not do so. It is not only the Bank's failure to sell at 95%, but also that it did not sell prior to the point at which a shortfall would occur, that is claimed to be conduct lacking in reasonableness and good faith. 144The 9 days between 7 October 2008 and 16 October 2008 included events of an extraordinary nature affecting the financial markets of the world. It is clear that it was a crisis that put people into what Mr Mesaros described as "panic mode" (Blue 742). The discussion between Mr Mesaros and the appellant that included reference to banks "worldwide" trying to halt the slide, is indicative of the extraordinary circumstances under which the finance/banking sector was operating (Blue 732). There was overwhelming evidence that far from acting unreasonably or conducting itself with a lack of good faith, the Bank tried to assist the appellant to retain his portfolio of shares in the hope of the market turning around. However this did not occur and the forced sale took place on 16 October 2008. 145On the assumption that a term of reasonableness and good faith is implied into the Facility, there was no evidence that the Bank acted unreasonably or not in good faith. The trial judge did not err in finding that there was no breach of an implied term of good faith and reasonableness. Grounds 16 & 17 - Unconscionability 146It is neither possible nor desirable to provide a comprehensive definition of the term "unconscionable" but in general the range of conduct is wide and can include "undue pressure and taking advantage of vulnerability or lack of understanding, trickery or misleading conduct": Tonto Home Loans Australia Pty Limited v Tavares (2011) 15 BPR 29,699, [2011] NSWCA 389 per Allsop P (as his Honour then was) at [291]. The appellant claimed that the conduct of the Bank in telling him that his portfolio would be force-sold once it reached 95% gearing; not mentioning that his portfolio was already over 95% and on some days 100%, in the context of paying close attention to how heavily geared the appellant's portfolio was; and then force-selling the portfolio at a loss and suing him for the difference, should be regarded as unconscionable conduct. 147Although the appellant claimed that the Bank did not inform him that the gearing ratio had gone over 95%, it is clear that there were discussions from which the appellant would have understood that his gearing ratio was either 95% or above. For instance when Mr Mesaros informed him that the ratio was at "94% so it's come off a little bit", he must have understood that it had been at or above 95% (Blue 734). Similarly when Mr Mesaros informed the appellant that Risk would sell if the ratio got close to 100%. 148The primary judge's reasons for rejecting the allegation of unconscionability were expressed to be the "same reasons" as those applicable to his Honour's findings concerning misleading and deceptive conduct (Red 66 [48]). The Bank submitted that there was plainly no conduct on its part that could be regarded as "highly unethical" or attended by such "moral obloquy" as to amount to unconscionable conduct: Attorney General (NSW) v World Best Holdings Limited (2005) 63 NSWLR 557 at 583. 149The case as pleaded relied upon s 12CA and s 12CC of the ASIC Act. S12CA(1) prohibits a person in trade or commerce from engaging in conduct "in relation to financial services if the conduct is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories". Section 5 of the ASIC Act provided that "financial service" relevantly had the meaning given to it by s 12BAB of the ASIC Act. Pursuant to s 12BAB(1) a person provides a "financial service" if they provide financial product advice; deal in a financial product; or provide a service that is otherwise supplied in relation to a financial product. Having regard to the conclusion stated below, it is not necessary to decide whether at the relevant time a margin lending facility was a financial product within the meaning of the ASIC Act. Certainly it was defined as such from 2011 in Regulation 2BA of the ASIC regulations. 150In GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 191 ALR 342 Gyles J referred to the "much debated but unresolved questions" in respect of the "kind of unconscionability" which is referred to in 12CA of the ASIC Act: at 386 [114-115]. After analysis of the relevant cases, his Honour concluded that it is the "equitable doctrine which is picked up by the reference to the unwritten law in s 12CA of the ASIC Act, rather than other situations in which unconscientious conduct is relevant to the grant of equitable relief, such as equitable estoppel": at 389 [123]. His Honour concluded that it was implicit that the construction of s 12CA of the ASIC Act will be governed by the same considerations that determine the construction of s 51AA of the TPA: at 390 [126]. 151The evidence clearly established that the Bank, through Mr Mesaros, did everything possible to meet the appellant's wishes of saving his portfolio from liquidation. The Bank provided him with detailed and up-to-date information and suggested he seek independent advice. Under the terms of the Facility, it was the appellant's obligation to monitor his account and manage his level of risk. It is therefore clear that, far from pressuring, tricking or misleading the appellant, the Bank made it clear that he was responsible for managing his own portfolio, encouraged him to seek advice on the best way to do that and provided him with information on the fluctuating and volatile market at that time. Furthermore it is clear that the appellant was not vulnerable. His Honour found, that the appellant was educated and an experienced investor. In any event he did not rely on the statements made by the Bank. I am not satisfied that the primary judge's conclusion in relation to unconscionability was in error. 152The respondent indicated in its written submissions that it wished to be heard in respect of costs. It is appropriate in my view to make the costs order which would generally follow consequent upon the dismissal of the appeal, but to establish a short timetable for the exchange of written submissions concerning any application to vary that order, such application to be dealt with on the papers unless there is objection to that course. Conclusion 153The orders that I propose are: 1.Appeal dismissed. 2.The appellant to pay the respondent's costs of the appeal. 3. Any application to vary the costs order to be filed and served within 7 days supported by written submissions not to exceed 3 pages. 4. Any written submissions in response to the application to be filed and served within 7 days of receipt of the application and are not to exceed 3 pages. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 April 2014