By Tony Johnson - 9 Jul 2019
Do you feel that the law always seems to favour the Banks
(the big guys) against the little guy? In Court, the Banks are
always well funded and have technical arguments readily available
to them. All, however, is not lost. The recent Court of Appeal
decision in Bushline Trustees struck a blow
for the little guy.
It was claimed that the Bank had misled its client as to the
possible down side of financial transactions they were proposing
and had also failed to comply with verbal undertakings they had
given as to funding being available.
In the Court of Appeal, the Bank did not focus on whether it had
misled or failed to comply with its undertakings. Instead, the Bank
sought to reply upon:
- Its "disclaimer clause" relating to statements made
during negotiations.
- Its "entire agreement clause" which it argued meant
that only the words in the written document could apply to the
contract.
Applying what is now the Contracts and Commercial Law Act,
subpart (3) (which deals with contractual remedies) the Court of
Appeal pointed out that an exclusion or disclaimer clause needs to
be "fair and reasonable" before it can be enforced.
In making its decision, the Court will have regard to all the
circumstances of the case. The Court indicated that it would
look at the true bargain between the parties.
Applying that test, the Court considered that it was not fair
and reasonable (given the specific circumstances) that the Bank
would be able to effectively say:
"Notwithstanding what we
promised we would do and what we represented to be true, you have
no claim against us even though we did not do what we said we would
and what we represented to you is false".
The decision is a heartening one for the little guy. Each case
will turn on its own fact but at least the Court has raised the
possibility that restrictive provisions such as
"disclaimers" and "entire agreement clauses" will
not be enforceable if in all the circumstances it would be unfair
and unreasonable.
The firm's commercial litigation
team can assist you in relation to issues such as those that
arose in Bushline Trustees or in any general commercial
law dispute.
Contact
Tony
Johnson