Storm Financial Limited ABN 11 064 804 691 v Commonwealth Bank of Australia ABN 48 123 123 124

REASONS FOR JUDGMENT 1 In this action the applicant Storm Financial Limited ("Storm") a licensed financial adviser claims damages pursuant to the Corporations Act 2001 (Cth) in respect of contended contraventions of ss 1041E and 1041H on the part of the respondent, Commonwealth Bank of Australia ("the Bank") in sending a letter dated 8 December 2008, a further letter dated 9 December 2008 and other communications to clients of Storm which are said to contain false, misleading and/or deceptive statements. 2 Storm also claims by way of final relief an injunction restraining the Bank from making any further such statements in contravention of the Corporations Act and an injunction pursuant to ss 1324 and 1325 of the Corporations Act directing the Bank to publish to those persons to whom it made the statements, a notice correcting the contended false, misleading and deceptive content of the statements. By paras 4 and 5 of the application, Storm also seeks damages based on other causes of action. 3 The present application is concerned with a claim for interlocutory relief in these terms: 1. An injunction, until the trial of this proceeding or further order restraining the respondent whether by itself, its servants, agents or otherwise from making any of the following statements to any person, including especially, but not limited to the customers of the respondent and any member of the media: (a) that the applicant was the sole manager of its client's margin loan facilities with the respondent or Colonial Geared Investments [CGI]; (b) that the applicant gave instructions to the respondent or [CGI] on 4 December 2008 (or at any other time) that all margin loan accounts geared at greater than 90% should be redeemed; (c) that the applicant managed or manages a margin loan facility on behalf of any of the customers of the bank or [CGI]; (d) that the respondent or [CGI] provided to the applicant daily updates on the position of any of the margin loan facilities between the respondent [CGI] and its customers; (e) (whether because of such falsely stated circumstances or otherwise) that the applicant was solely responsible for the management of any such margin loans, or was responsible to notify the respondent's customers of a margin call, or to notify them that circumstances existed which entitled the respondent or [CGI] to make a margin call on such customers; (f) the clients of the applicant should retain other financial advisers including Commonwealth Securities Limited (known as Comm Sec); 3. A mandatory injunction, or an order pursuant to sections 1324 or 1325 of the Act requiring the respondent forthwith to write to each Recipient a letter on the letterhead of the respondent: (a) withdrawing and correcting the misstatements contained in such letters to the Recipients; and (b) notifying such Recipients that each such letter is written pursuant to an order of this Honourable Court; … 4 Storm also seeks an interlocutory order requiring the Bank to file and serve an affidavit setting out the name, postal address and telephone number of all of the applicant's customers to whom the Bank has published any letter to the effect or substantially to the effect of the letters of 8 and 9 December 2008 attached to the application. The applicant also seeks an interlocutory injunction restraining the Bank from informing recipients or any other person the Bank knows or has reason to believe is a client of the applicant, from withdrawing such person's instructions of business from the applicant and retaining another financial adviser. 5 It can be seen that the content of the mandatory injunction is directed to achieving by an interlocutory order what is sought by para 3 of the claim for final relief. In order to make such an order, the Court would require a high degree of satisfaction that the applicant would be entitled to that relief at trial by way of final relief. In terms of an interlocutory mandatory order where a higher risk of injustice might arise, it is not enough for the Court to be satisfied that the applicant has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [65] to [72] per Gummow and Hayne JJ. A higher state of assurance is necessary (Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 92 ALR 499 per Gummow J). 6 The application for all interlocutory orders was brought on and heard urgently yesterday afternoon. Judgment is to be given today. 7 The applicant has filed a range of affidavit material. The essential facts emerging from that material are these. 8 Storm is a financial adviser, has offices in 14 locations throughout Australia and approximately 14,500 clients. The essence of its business is the provision of financial advice to individual clients tailored to their individual circumstances. As part of that service, Storm has advised clients to consider taking up loans from Australian banks and other financial institutions to acquire securities. Typical securities are investments in unit trusts regulated by the Australian Securities and Investments Commission under applicable Financial Services legislation. Those loans, relevantly here, were margin loan facilities offered by particular financial institutions including the Bank through its business division described as Colonial Geared Investments ("CGI"). Storm recommended to approximately 3,000 of its clients investment in 10 Indexed Trusts or Indexed Funds through the use of margin loans. 9 A margin loan is understood in the financial services industry as a loan with a pre‑determined limit set by the lender of the proportion the loan balance, owing to a bank, might bear to the value of the securities purchased using the loan. That relationship is described as the relationship the loan bears to the value of the assets or the loan to value ratio or LVR. Storm has been dealing with CGI for over 10 years and in early 2007 Storm began discussions with the Bank to enter into an arrangement whereby the Bank would offer margin loan facilities to Storm's clients of up to 80% of the value of selected funds to be acquired, that is, loans with an 80% LVR. Those discussions resulted in a letter dated 18 May 2007 by which the Bank and Storm agreed to the terms for such investments for clients of Storm. By that letter, the Bank offered particular terms for margin lending facilities for clients of Storm at which an LVR ratio of 80% was established to enable Storm clients to invest in 10 identified Indexed Trusts and Indexed Funds subject to what was described as "expectations" set out in the letter. 10 Those expectations dealt with such matters as the nature of the investments for which loans might be used by clients; the weighting of investments in particular sectors of the economy (resources, technology); an obligation upon Storm to convey to its clients a particular differential LVR ratio that the Bank might apply to a particular fund which might require a "re‑balancing" of the clients' facilities with the Bank; and a commitment by the Bank to maintain the 80% LVR and a "10% buffer for existing business retained or newly written in respect of specific clients". The letter also contained these expectations: We [the Bank] would also require that Storm Financial and [CGI] meet monthly to ensure that the agreed approach, including observance of expectations is being maintained, and to facilitate any agreed changes which may be required in response to changing conditions. Naturally an extraordinary meeting can be called at any time by either party. Details of these meetings will be settled by both parties. We would further require that Storm Financial provide to CGI before these meetings, acceptable reporting that confirms observance of these particular expectations. We will include a periodic update on trends in market volatility compared with our methodology. Despite our allocation of a global LVR of 80% to your clients on the basis of our expectations being met, as set out above, nothing in this letter modifies or varies the obligation of any client borrower under clause 3.2 of the margin loan to pay us the amount owing under the margin loan if that client borrower is either in default or we send that client borrower a five day notice requiring payment of the amount owing. In the unlikely event of a margin call, CGI and Storm Financial will work in partnership to clear the margin call. Note however that CGI reserves its rights under its margin lending terms and conditions. [emphasis added] 11 In order for a client of Storm to take up the Bank's margin loan facility, the client must fill out an application form. The form contains a checklist for the adviser no doubt on the footing that the adviser's client is introduced to the Bank by the adviser and assists the client in completing the application form. The form sets out all the obvious details such as the borrower, the legal standing of the borrower, details of third party mortgagors and other such matters. Section 3 is to be completed by the client adviser and requires details of the adviser's name, that person's relationship with the Australian Financial Services' licensee and other formal things. That section contains this statement: Commonwealth Bank of Australia is authorised to take instruction(s) from the Client's Adviser on behalf of the Borrower(s). By completing this section, I acknowledge and confirm that: I have been appointed by the Borrower(s) as their Client Adviser; and I have identified the Borrower(s). 12 Part 9 of the application is a "Risk Disclosure Statement" and at section 2 of Part 9, risks in relation to margin calls are described in these terms: Margin calls If the margin loan equals or exceeds a certain percentage of the overall security value you will receive a margin call. You cannot just "wait out" any down turns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time period specified in the terms and conditions, then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value. We may at any time remove an investment from our list of securities. If you are holding this security on your margin loan then your base LSR, current LSR and margin call LSR will be affected. [the emphasis in this quote is the emphasis in the original document] 13 Part 1 of the terms and conditions document deals with lending provisions. Section 2 deals with interest. Section 3 deals with repayments and prepayments and Section 4 deals with margin calls. Clause 4 deals with a number of defined terms such as "current loan to security ratio", "margin call loan to security ratio" and "base loan to security ratio". Essentially the clause operates on this footing. The Bank establishes a ratio, as its base, which is the total amount lent as a percentage of the market value of the securities. The Bank then establishes another ratio, the margin call ratio, which is an uplift by 10% of the base ratio. This margin call loan to security ratio is used as a benchmark for comparison with any prevailing ratio from time to time struck between whatever the current balance of a customer's loan is as a proportion of the then market value of the securities. If at any time the current loan to security ratio is equal to or exceeds the margin call loan security ratio: … then you [the borrower] must act within the time period specified in Clause 4.2 to ensure that the current loan to security ratio does not exceed the base loan to security. You can do this by: giving us a security interest acceptable to us over additional securities acceptable to us, or by repaying part of your loan, or selling some or all of the secured property and applying the sale proceeds to your loan. 14 Under clause 4, the Bank is entitled to give a borrower a notice of a margin call in circumstances where the current ratio is equal to or exceeds the margin call ratio and on receipt of such a notice the borrower must act to restore the position. By clause 4.3, the borrower agrees that the Bank may provide notice of margin call to the borrower or to the borrower's client adviser either in writing, orally or by updating the Bank's website. Clause 4.3(b) provides that: It is your obligation to keep your or your Client Adviser's contact details up to date. 15 Clause 4.4 provides that the borrower is responsible for monitoring the borrower's portfolio and determining when the borrower's loan might be subject to a margin call. The borrower is required to be in a position to receive any communications from the Bank and to act within the time limits specified in clause 4 and to ensure that a margin call does not occur. By clause 4.5, if the borrower fails to meet a margin call, the Bank may but is not obliged to, sell any or all of the security supporting the borrower's loan and reduce the amount owing; sell more security than the minimum required to satisfy the margin call; sell the securities without first contacting the borrower, any "margin call contact, or agent you may have nominated"; and sell the securities in the order the Bank chooses. 16 Clause 5 deals with "administering your loan" and provides that the Bank will send the borrower an account statement every quarter, among other things. 17 Storm contends that the completion of the application document subject to the terms and conditions brought into existence an orthodox banker/customer relationship which called upon the borrower to discharge certain obligations and created rights and entitlements in the Bank to take a number of steps and, relevantly here, issue margin call notices under the terms and conditions and exercise any or all of the rights conferred by clause 4. Storm says that there is nothing in the arrangements reflected in the letter of 18 May 2007 between the Bank and Storm which casts an obligation upon Storm to manage the margin loan borrowing by any particular customer who applied for and took up a loan with the Bank. Moreover, there is nothing in the application document or the terms and conditions which recognise as between the banker and its customer, an obligation on the part of Storm to manage the margin loan on behalf of the Bank. Storm says that, objectively viewed, such an obligation if it was to subsist would be manifest and extant in the documents. 18 Storm says that it did not provide monitoring or management for its clients of margin loans, in the ordinary course. From time to time where a client failed to maintain a borrowing within the margin ratio, Storm became involved in discussions with the Bank and the client about that circumstance. Those examples of such engagement by Storm are said to be simply transactional examples of Storm playing a role of assisting the client in its dealing with the Bank and they do not reflect the orthodoxy of the systemic arrangement. Storm says that a reason for Storm having no role to play in the management of margin loan accounts was that it did not obtain any commission, described as a "trail commission" by reason of the client taking up a margin loan with the Bank which in turn led to the Bank being in a position to offer more favourable interest rates to clients of Storm since that additional cost was not involved. 19 Mr Emmanuel Cassimatis is a director of Storm. Mr Cassimatis, together with his wife, built up the business of Storm over 14 years. He says at para 22 of his affidavit filed 19 December 2008 that there was no agreement between Storm and the Bank that Storm as the client's adviser "would manage or monitor the performance of the units in the fund acquired with the proceeds of the margin loan for the purpose of monitoring whether a margin call was imminent or likely or indeed whether a margin call situation had occurred - that is, that the value of the security had dropped so that the amount of the debt under the margin loan was equal to or greater than 90% of the security". 20 Mr Cassimatis says (para 26) that the clients were responsible for identifying circumstances which would constitute a margin call. However, if a margin call did arise, the Bank would give notice to the client borrower. If the client borrower did not respond to the margin call, the Bank would take action to sell the underlying securities. The only role (para 27) which Storm had in the management or monitoring of margin loan facilities for customers of the Bank "was that CGI was entitled to give notice of a margin call to the customer by giving such notice to Storm". 21 Mr Cassimatis says these further things. In October 2008, the Bank supplied particular data to Storm by email in which it said that based upon a report run by the Bank that morning there were 640 margin calls for Storm and that the Bank had "been advised by Group Risk that all margin calls above 95% need to be resolved this week". Storm cooperated with the Bank to assist it in contacting clients and in making arrangements with them to attend to those margin calls. Mr Cassimatis says that Storm did so consistent with what Mr Cassimatis believed to be Storm's required cooperation under the agreement of 18 May 2007. Conditions deteriorated through until late November 2008 by which time it was clear that many of Storm's clients who had taken up margin loans with the Bank were in a situation where the amount of their loan exceeded the value of the securities and thus those borrowers were in a condition described as "negative equity". Mr Cassimatis says at para 32 that he understood that the Bank had sold the underlying securities of most but not all of those clients. 22 Mr Cassimatis says that the circumstances were serious; with regular monitoring, it would have been possible for the Bank to determine when a facility was approaching margin call or in a circumstance where a margin call ought to be made; his expectation was that if a facility was approaching a margin call situation the lender would immediately contact the client directly and give a written notice of margin call and if no response was obtained the Bank might promptly sell the underlying securities to prevent deterioration in market value and thus the transition into "negative equity". 23 By the end of November 2008, Mr Cassimatis says that clients of Storm who had taken up margin loans with the Bank faced a negative equity position of approximately $37 million. 24 These events led to a meeting on 1 December 2008 at the Sydney premises of the Bank. Mr and Mrs Cassimatis met with Messrs Grimshaw, Tait and Clothier of the Bank. Mr and Mrs Cassimatis complained that for a period of some weeks data supplied by the Bank had been inaccurate and unreliable. That data related to daily data sheets sent by the Bank to Storm which set out details of each client, the balance of the loan, the credit limit, the security value, the market value of the securities, the current loan to security ratio and the margin call to security ratio. The data was thus comprehensive and sent daily to Storm. Some of the statistics in the margin ratio column are incorrect. The daily variation in values is said due to rapidly changing market circumstances is said to be the explanation for those errors. 25 Mr Cassimatis says that in discussion with bank representatives concerning the dilemma of these negative equity positions, Mr Grimshaw said to Mr Tait that margin loans are designed not to get into a negative equity position and how did this happen. Mr Cassimatis suggests that this seemed to be an inquiry made by a bank officer of another bank officer. Mr Cassimatis says that no one from the Bank suggested that Storm had failed to manage the loans or that Storm had breached any obligation to manage margin calls or otherwise fail in managing the loan facilities. 26 Another meeting occurred on 4 December 2008 at the Bank's office. Mr Cassimatis attended with a view to seeking a solution to the problem which had arisen for clients basing margin calls and particularly those whose facilities had "gone into negative equity". Mr McCullough and Ms Richards, executives of Storm, attended the meeting. It lasted for three hours. 27 The Bank contends that at this meeting, Storm by its representatives gave instructions to the Bank to sell securities for clients who had failed to bring margin loans back into the relevant ratio. Mr Cassimatis says that he did not give any instructions to the Bank in respect of clients as a whole or in respect of any particular client to sell their securities. Mr Cassimatis says that he had no authority to do so and that had he formed a view that a particular client should sell securities the subject of a margin loan he would routinely give that advice either in writing or confirmed by writing and would not effect such a transaction without the "direct instructions of the particular client". He says that he did not give instructions during the course of the meeting or at all to take any such action or express any view that the Bank ought to sell or redeem securities in respect of "any or all margin loan accounts of Storm clients in general or any particular Storm clients or class of clients". 28 Mr Cassimatis thought that he might be able to assist in resolving the Bank's concern about the 640 or so accounts. Mr Cassimatis put a proposal to the Bank that Storm borrow from the Bank a sufficient sum to recover "the lost funds represented by this negative equity; that it [Storm] would then, by some means provide financial assistance to the relevant clients in the same amount so that they could recover the negative equity positions (without selling their own assets or otherwise devoting their own funds at the time) and, in the period of the ensuing year or two, work to recover such shortfall". Mr Cassimatis says that he intended that the Bank would regard this as a generous offer by Storm because Storm would take on the primary liability itself in a direct relationship with the Bank. 29 That proposal was put to the Bank on the evening of 4 December 2008 by Storm. In the course of explaining the background to the unfortunate set of circumstances being confronted, Storm said this: We are all in this situation, we clearly see it is both Storms' and the CBA responsibility and all parties may have done things differently in hindsight. However, no one wins from an attitude that is one‑sided. We ALL benefited from the client relationships, we ALL owe a duty of care to these clients, we ALL should participate in the recovery process and then we ALL will benefit again from those relationships when this crisis passes, as it inevitably will. 30 The proposal was rejected by the Bank and in doing so the Bank said this: You will appreciate that, although they are Storm's customers - in that you are their financial adviser and planner, recommending their investment strategy including borrowings to invest in certain products - they are also Colonial Margin Lending customers, in that, while we have not provided them advice we have provided lending facilities to them. 31 The letter advised that the Bank had commenced calling customers "to ensure that they are aware of the position of their individual margin loans and to discuss the options to satisfy their obligations". 32 On 8 and 9 December 2008, the Bank despatched letters to each of their customers who had taken up a margin loan which was either in negative equity or subject to a margin call. These are the letters about which complaint is made. As to the letter of 8 December 2008, the first matter of real complaint is the opening sentence written by Mr Clothier on behalf of the Bank when he says: I am writing to you regarding the margin loan facility that you have with Colonial Geared Investments, which has been managed by the Storm Financial Group [emphasis added]. 33 The second and third paragraphs of that letter set out market circumstances and the default position of the borrower. The letter sets out the balance payable by the particular borrower. The letter then says: Given the sharp decline in the value of your investments over a relatively short period of time, it was necessary to redeem your investments and convert them to cash to avoid further deterioration in the value of your portfolio. 34 The letter then says: Storm Financial is your financial adviser and has been the sole manager of your investments and your margin loan throughout this period. Colonial Geared Investments has been providing daily updates on your position to Storm Financial. Colonial Geared Investments wants you to be aware of your position in regard to the deteriorated position of your investments, and we will endeavour to assist you in clearing the outstanding amount. We have begun that process by calling you directly today. [emphasis added] 35 The letter then sets out options available to the borrower. The letter of 9 December 2008 also written by Mr Clothier commences with the same opening paragraph as the earlier letter which again contains reference to the margin loan facility "which has been managed by the Storm Financial Group". By the second paragraph, the Bank provides these recipients with a further explanation for the redemption (that is the sale of the securities) of the margin loans, in these terms: In a meeting with the principals of Storm Financial on Thursday, 4 December 2008 we received clear instructions that all margin loan accounts geared at greater than 90% should be redeemed to avoid the potential for negative equity on your account. Storm Financial are your financial adviser and they manage your margin loan according to the statement of advice they provided to you when you established your relationship with them. 36 Storm complains that the letter is misleading because no such instruction was given on 4 December 2008 and the initial statement of advice given by Storm to its clients as part of its adviser/client relationship does not contain an obligation upon Storm to manage margin loan accounts taken up by client borrowers with the Bank. 37 The letter then says that the Bank as the margin loan provider acts on instructions provided to it by Storm and advised the recipient that the Bank had commenced the redemption of all managed funds and the sale of all equities within the borrower's margin loan, on Friday, 5 December 2008. The letter tells the recipient that the Bank is currently awaiting receipt of these proceeds which will be deposited as cash into the borrower's margin loan. The letter concludes: Once these proceeds have been deposited with us, we will arrange for an up to date statement of your account to be sent to you. We are keen to ensure that you remain advised of your current position with regard to your margin loan. If you have any questions with regard to your account please contact [CGI]. 38 Storm complains that the letters are false and misleading because it has never been the sole manager of the borrower's margin loans; the statement that the Bank has been providing daily updates is misleading; and the letters contained two inferences which are misleading. The first is an inference that the Bank wanted clients to be aware of their position which suggests that Storm did not have such a desire and secondly, that the Bank's desire to assist the borrower in clearing the outstanding amount suggests that Storm did not have any such interest. Storm says the letter of 9 December 2008 is misleading because Storm was not required to and did not manage the Bank's margin loan facility with its customer. Secondly, no instruction was given on behalf of any client to the Bank to redeem margin loan accounts geared greater than 90%. Thirdly, the notion that the Bank acts on instructions provided to it by Storm is not correct or at least to the extent that it suggests that it was responsive to instructions in the management of the account, it is misleading. Fourthly, the statement that Storm assumed an obligation to manage a margin loan account with the Bank by reason of the statement of advice initially given to clients of Storm by Storm is simply wrong. Finally, the statement in the letter of 9 December 2008 concerning the instructions of 4 December 2008 and the redemption from 5 December 2008 resulting from those instructions, is simply incorrect. 39 In order to support the proposition that Storm had not assumed any management responsibility for margin loan accounts, Storm relied upon further evidence from Mr Paul Johnston by an affidavit sworn and filed 19 December 2008 and an affidavit from Mr David McCullough sworn and filed 18 December 2008. Mr Johnston says that he established "Colonial Margin Lending", a division of the Commonwealth Bank of Australia, in 1996. Margin lending facilities were offered to clients through financial advisers. Mr Johnston had responsibility for overseeing all operations, managed considerable staff and is completely familiar with margin loan facilities and especially the operations and business of the margin loan facilities offered by the respondent. Mr Johnston first met Mr and Mrs Cassimatis in the early 1990s. Mr Johnston says that margin loans were conducted on the basis that if the value of a client's loan to value ratio fell below a particular percentage the Bank had a right to make a margin call and sell the client's portfolio. If action was required on an account, for example, if a client wishes to redeem funds, Colonial did not act upon instructions from Storm but upon written authorisation direction from a customer. He understood that Storm was not authorised to give instructions to the Bank on marginal lending facilities its clients held with the Bank about written instruction. He says that this was the general practice in the industry. He says that it was his experience that once Storm referred a client to Colonial, Storm had little or nothing to do with the management or maintenance of the facility thereafter. In practice, the Bank regarded the facility as the customers' facility and the customer managed it. Colonial sent quarterly statements to its customers and gave customers access to its website so that a customer could determine the position of his or her loan at any time. The Bank was able to discount its rates to customers because Storm was not paid commissions for loans taken up. He says that he resigned from the Bank in June 2003 but for many years prior to that it was the Bank's practice to monitor the position of its margin loan customers and in the event that a margin call was looming, the Bank contacted either Storm or the client direct. He says the Bank's practice was to act on instructions only from those clients and not instructions from Storm without confirming that an individual client with a margin loan facility had provided those instructions. He says that the Bank did not regard Storm as a manager of a margin loan. He says that at no time during his tenure was Storm regarded by him or to the best of his knowledge by anyone else as the sole manager of Colonial's margin loans or the investments securing those loans. 40 Similarly, Mr McCullough who has been an employee of Storm for 10 years and who was for 25 years prior to that an employee in senior positions in retail banking at the Bank, says that whenever a loan exceeded the "buffer" relating to a margin ratio for a margin loan, the Bank would write to the client borrower and the Bank would require the client to do what was necessary to bring the loan back into the relevant ratio. Mr McCullough also speaks to the meeting of 4 December 2008. He says that the Bank made it clear that it wanted a solution to the margin lending where limits were exceeded. The Bank wanted to review each client's circumstances client by client. Mr McCullough says that one of the Bank representatives said that it was not the Bank's responsibility to make margin calls. Mr McCullough says that at no time during the meeting on 4 December 2008 did Mr Cassimatis or anyone on behalf of Storm say that all margin loan accounts geared at greater than 90% should be redeemed by the Bank. 41 The Bank does not accept that having regard to all of the affidavit material and responses by Mr Clothier and material filed by the Bank that Storm has demonstrated a sufficient likelihood of success to justify the preservation of the status quo. The applicant filed an affidavit by Ms Teneale Henderson which attaches a transcript of the meeting of 4 December 2008. Objections were made to the transcript but the affidavit was admitted for interlocutory purposes. The transcript on p 38 contains a statement by Mr Cassimatis in these terms: You know, we should have sold people out earlier, yeah, the agreements were have say that you guys should have sold them out at 90%. 42 There are other statements in the transcript such as at p 20 where Mr Cassimatis says "None of these should be in negative equity, should have, could have, would have but didn't. For various reasons or for whatever reasons they should have been sold out at 90% or earlier". The Bank says that the references in the transcript; the references in the loan application document by which the Bank is authorised to take instructions from the client's adviser (Storm), the transmission of daily data sheets which contain schedules of all relevant information and the proposal put by Storm in its letter of 4 December 2008, strongly suggest that the financial adviser had assumed the management role of the margin loan. The Bank says the representations which are complained of concerning management by Storm of margin loan accounts are true. Secondly, the Bank says that statements made at the meeting on 4 December 2008 conveyed the clear impression that Storm had instructed the Bank to redeem margin loan accounts in breach of the margin ratio. 43 For present purposes, I am satisfied by the weight of the applicant's material that had the financial adviser assumed a management responsibility for the margin loan transaction in each case and more particularly a "sole" responsibility for the management of the margin loan account through the period, the documents as between the Bank and Storm and in particular the letter of 18 May 2007 would have said so in clear and transparent terms. Secondly, the documents as between the financial adviser and the client would have reflected that position. Mr Cassimatis says it was not so as a matter of practice. Mr Johnston says it was not so in his experience although his experience concluded in 2003. Mr McCullough also gives evidence consistent with Mr Cassimatis. I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive. Of course, the ultimate position must be tested at trial where the evidence will be closely examined and findings reached on all aspects of the controversy. 44 Storm also relies upon a further letter written by the Bank on 17 December 2008 in which it says that Storm is "completely responsible for your financial position". In that letter, the Bank changed its position slightly from one of asserting sole management of the clients margin loan throughout the period to one where "Storm Financial is primarily responsible for your margin loan and we are disappointed if they have not kept you informed of your account position or any instance of margin call". Storm also complains that the letter goes on to offer defaulting borrowers the opportunity to meet with another financial planner for a one hour consultation to discuss the borrower's financial position. Storm says that it only complains about that as a statement which reinforces the notion that Storm as manager of the margin loan has failed to discharge its responsibilities. 45 The Bank has not offered any undertaking not to make any of the statements complained of. 46 Storm says that it has experienced many responses from clients in response to the Bank's letter of 8 and 9 December 2008. It says that its clients have been led to believe that Storm has failed to manage each of the margin loan accounts which in turn has led to a redemption in circumstances where losses greater than those which would otherwise have been incurred have now been incurred. 47 The Bank says that it has despatched all of the letters to the portfolio of margin loan borrowers in issue. There is now nothing to enjoin. Moreover, the question of the circumstances of the portfolio of borrowers/investors has become extremely controversial with very significant media publicity in relation to the circumstances of the investors with claims and counter‑claims by the Bank and Storm as to responsibility for the management of the margin loans and consequent redemption. The Bank says that the Court's intervention by way of a mandatory interlocutory order for correction prior to the determination of the final merits would lend the Court's authority to one version as against another. Further, in circumstances where borrowers are calling and engaging with the Bank and with Storm about aspects of the matter the Bank needs to be free to say what needs to be said, in its view, about the circumstances and context within which these events have emerged. 48 Storm contends that the misleading statements have caused it damage and loss of clients and that position has been reinforced by the references in the Bank's material to encouragement of clients to seek independent advice from other financial advisers. 49 It is fair to say looking at the material that the correspondence from the Bank is concerned to make it plain to its borrowers that the responsibility for the management of the margin loan accounts and thus the bank and customer relationship was entirely a matter for Storm and thus borrowers ought not to look to the Bank at all as to whether the margin loan accounts might have been managed and margin lending ratios managed more prudentially. The Bank's position on the application for interlocutory relief is that this has nothing to do with the Bank. It is entirely a matter for Storm. That seems unlikely as the letter of 18 May 2007 talked about working in partnership to clear margin calls and the Bank's letter of 17 December 2008 seems to acknowledge that the position is that Storm had primary responsibility for the loan. It seems unlikely as a matter of prudential bank management that the Commonwealth Bank of Australia would have displaced all responsibility for its loan portfolio with these borrowers and investors entirely to a third party, Storm. However, it should be noted that the protocol surrounding or at least reasons for the Bank sending daily data sheets to Storm containing all the relevant ratios and information is not explained by Storm in its material in support of the application. The much more likely inference is that both Storm and the Bank assumed a degree of responsibility for managing in a tripartite way the relationship between the Bank, the borrower/customer/investor and Storm as adviser overall. The boundaries of that relationship are the core matter in issue in these proceedings. 50 I am not satisfied that a mandatory interlocutory order ought to be made directing the Bank to correct the two matters that are the subject of primary criticism. Those are that Storm was responsible for and further had sole responsibility for managing the margin loan accounts and secondly, that Storm instructed the Bank on 4 December 2008 to redeem the relevant loans. I say that notwithstanding having considered Mr Clothier's affidavit of 23 December 2008 and the affidavits of Mr Arnaout, Mr Chard and Mr Phelps including other material relied upon by the Bank which ultimately puts in issue facts going to the central matters in controversy. For present purposes, I simply note that there is a contest between the parties on the facts and assess the question of whether relief should go having regard to the burden the applicant must discharge. Making a mandatory interlocutory order effectively is the grant of final relief. It seems to me inappropriate in the context of the current controversy to order corrective advertising on an interim basis. Further, in the context of disputes which might arise between the Bank and its borrowers about whether the Bank has properly invoked mechanisms for the redemption of the loans, the sale of securities and whether the Bank acted properly or improperly in terms of any authority it may have needed or may have obtained on behalf of borrowers in the meeting on 4 December 2008, an order restraining the Bank from making any representation in any relevant place or forum that the Bank acted with authority on 4 December 2008 (if that be necessary) would be likely to work injustice. Such an order would not be of any real utility in preserving the status quo. The letters to the borrowers have been despatched and although the Bank has written a further letter on 17 December 2008 it seems to me that an injunction restraining the Bank from representing that Storm had sole responsibility for managing the margin loan accounts, in the context of the controversy overall, is of little utility in terms of the status quo. 51 Further, I am not satisfied that the balance of convenience is served by granting the relief sought. 52 As to the question of an order that the Bank provide the respondent with a list of each borrower that received the letters, the Bank says that the applicant knows who the clients are in any event. What it may not know, however, is which clients got which letter. The Bank is an organisation with considerable resources and it ought to be able to tell the applicant by 6 January 2009 by the provision of a list electronically or otherwise of all recipients who received a letter in terms of or substantially in terms of the letter dated 8 December 2008 and similarly a letter in terms of or substantially in terms of the letter dated 9 December 2008. I do not propose to make an order in those terms. However, I propose to list the matter for directions on 9 January 2009 for review. 53 I suggested to the parties in the course of the hearing that one approach to the matter might be to separate the issues in the proceeding by hearing the issues in relation to contravention and whether injunctions ought to be made by way of final relief, in a trial commencing on or about 8 January 2009. For entirely understandable reasons the parties have had difficulty in accommodating that time frame. All issues in relation to the future conduct of the matter can be addressed on 9 January 2009. 54 I also suggested to the parties that there may be some utility in framing an order that a letter or notice be published to all those who received the letters of 8 and 9 December 2008 written on the letterhead of the Bank or perhaps a joint letterhead signed by both the applicant and the respondent but issued by order of the Court advising each recipient that contentions had been made in the letters as to particular matters and that objection had been taken to the accuracy of those matters with the result that a proceeding was presently before the Court to test and determine those matters. In that sense, the authority of the Court might be lent to a communication to all recipients making it clear that a particular controversy involving those matters was now before the Court. That seemed to be of some utility because it elevated claims and cross‑claims by correspondence from the parties directly or through media statements to one of a formal proceeding to be resolved by and before a Court. However, neither the respondent nor particularly the applicant thought there was any utility in such a communication and thus I have not pursued it. 55 Accordingly the interlocutory application ought to be dismissed. For present purposes, the costs of the interlocutory application are reserved. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.