FEDERAL COURT OF AUSTRALIA

Westpac Banking Corp v “Stone Gemini” [1999] FCA 595

TRADE PRACTICES – whether misleading and deceptive conduct and misleading representations – knowingly concerned – Trade Practices Act 1974 (Cth) ss 52, 53, 75B

WESTPAC BANKING CORPORATION v

THE SHIP MV “STONE GEMINI”

NG 557 OF 1996

TAMBERLIN J

SYDNEY

7 MAY 1999

FURTHER REASONS FOR JUDGMENT

1                     In this matter I delivered reasons for judgment on 14 April 1999 but made no orders on that date and requested the parties to bring in Short Minutes.  This is presently being attended to.

2                     There is one further matter which I should specifically address and it is this.  Navalgalaxy Shipping Ltd (“Navalgalaxy”) by amended Cross-Claim filed on 9 October 1998 claims that Dr Wang was a party to or was knowingly concerned in misleading and deceptive conduct, on the part of Jindalee Trading Co Pty Ltd (“Jindalee”), within the meaning of s 75B of the Trade Practices Act 1974 (Cth).  It is further alleged that Dr Wang made misleading representations without having reasonable grounds for making them.

3                     As I indicated in paragraph 76 of my earlier reasons, the Letter of Indemnity from Jindalee gave rise to a binding agreement and did not independently or collaterally make any misleading representation at all.  The Letter in terms undertakes a contractual obligation to indemnify and I have found that there was an enforceable obligation and that Navalgalaxy is entitled to the benefit of this contractual right to an indemnity.  Accordingly, there has been no misrepresentation as to the nature or effect of the Letter.  It speaks for itself and is plainly contractual.  No question of the involvement of Dr Wang in misleading conduct therefore arises.  The Letter was requested by Navalgalaxy and was duly given by Jindalee.  Specifically, there was no representation by Dr Wang that Jindalee would have the necessary means to meet that obligation, nor is there any evidence that Dr Wang had any reason to believe that the obligation might not be met.  I note and accept the submission on behalf of Dr Wang on this point that she was not cross-examined to suggest that when the document was signed, that Jindalee did not intend to honour the promise, nor that Jindalee was then unable to honour the promise.  The allegation of knowing involvement is a serious one.  The evidence does not satisfy me that Dr Wang was aware of the essential matters which go to make up the contravention of s 52 or of the falsity of any representations.  Navalgalaxy has simply not demonstrated, on the balance of probability, that Dr Wang knew at the time the Letter of Indemnity was executed under the seal of Jindalee, that the company had no intention of honouring the promise or no reasonable ground for believing that it would be honoured. 

4                     There is one final matter.  I am not satisfied that in any way either Jindalee or Dr Wang were negligent in relation to the furnishing of the Letter of Indemnity to the vessel as requested.  The ship’s claim against Jindalee and Dr Wang in negligent misrepresentation must also fail.

Associate:

Dated:              7 May 1999