Case: Commonwealth Bank of Australia v Finding [2001] 1 Qd R 168
Outcome: discussed
On a number of occasions the courts have considered claims in which bankers have been sought to be made into fiduciaries of their customers. Recently, in Commonwealth Bank of Australia v Finding [2001] 1 Qd R 168 the Court of Appeal of the Supreme Court of Queensland considered a case in which a bank was in the position of being a mortgagee exercising power of sale as well as being financier of the purchaser. The Court held that no fiduciary duty to the incoming purchaser arose in the bank on the facts in that case. In coming to that conclusion they referred to a number of authorities in this Court, the High Court and elsewhere. They pointed out that in other cases where a relationship of a fiduciary nature between banker and customer arose, the bank had assumed the role of financial adviser, or perhaps had brought parties together, and the customer had placed complete faith and confidence in the adviser, as one would expect in a fiduciary relationship. In a passage quoted with approval by the Court of Appeal in Finding [2001] 1 Qd R at 172, Hill J had said in Golby v Commonwealth Bank of Australia (1996) 72 FCR 134 at 136: 'It is not a critical feature of a banker/customer relationship that the banker undertakes or agrees to act for or on behalf of or in the interests of its customer in the exercise of some power or discretion affecting the interests of the customer in a legal or practical sense. Absent therefore some special feature, such as the giving of advice in Smith [42 FCR 390], there is no reason to erect a fiduciary relationship between bank and customer when that relationship is essentially one founded in contract.' 38 And as Davies and Pincus JJA with Derrington J pointed out in Finding [2001] 1 Qd R at 173-174 [13], there was no evidence in that case of reliance upon the advice of the bank in relation to the transaction, nor was there evidence of the customers holding any expectation that the bank would disclose the relevant information or that it had assumed the role of adviser to the customers. Here the proposed amendment does not make any allegation of reliance by ASS upon the advice given by either Messrs Burrowes or Bingham in relation to interest rates, timing of finance or the quality of the terms proposed by the bank. In those circumstances, the proposed pleading does not reveal a cause of action that I regard as fairly arguable. 39 I would also observe in passing that, unlike what had happened in the cases to which I have referred, much of what was pleaded as material which the bank ought to have disclosed suggested that, had disclosure been made, the proposition of dealing with Akyman would have appeared even better from ASS's point of view than it had on what ASS already knew. Although the bank had made its own internal estimates as to how profitable the business was likely to be, based on the sales projections which it had been given by Akyman, it is likely that much of that material had been already provided to ASS by the same source (Akyman) in one form or another, albeit it is possible that it may not have provided all of it. In any event, these observations do not affect the matter because, if there were a duty to disclose, the bank would have had to discharge its obligation to give a proper disclosure.