JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA 
IN CIVIL 

CITATION	:	BRIAN FLETCHER AS TRUSTEE OF THE BRIAN FLETCHER FAMILY TRUST -v- ST GEORGE BANK LTD [No 2] [2011] WASC 277 

CORAM	:	ALLANSON J 

HEARD	:	7-10 FEBRUARY, 2 MARCH 2011 

DELIVERED	:	10 OCTOBER 2011 

FILE NO/S	:	CIV 2186 of 2006 

BETWEEN	:	BRIAN FLETCHER AS TRUSTEE OF THE BRIAN FLETCHER FAMILY TRUST
Plaintiff
 
AND
 
ST GEORGE BANK LTD
First Defendant
 
JOHN HOOPER
Second Defendant 

Catchwords:
Banker and customer - Bank holding second mortgage - Whether duty of care to warn of impending sale of property by first mortgagee

Duty of care or estoppel arising from representations and assurances by officer of bank

Fiduciary duty - Whether fiduciary obligation to warn of impending sale 
Legislation:
Nil 
Result:
Plaintiff's claim dismissed 
Category:    B 

Representation:
Counsel:
Plaintiff	:	Mr B M Singh
First Defendant	:	Mr B Dharmananda & Mr A J Mason
Second Defendant	:	Mr P T Arns 
Solicitors:
Plaintiff	:	Chris Stokes & Associates
First Defendant	:	Gadens Lawyers
Second Defendant	:	Arns & Associates 

Case(s) referred to in judgment(s):

Aequitas Ltd v Sparad No 100 Pty Ltd (formerly Australian European Finance Corp Ltd) [2001] NSWSC 14; (2001) 19 ACLC 1006
Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191
Baiyai Pty Ltd v Guy [2009] NSWCA 65
Breen v Williams [1996] HCA 57; (1996) 186 CLR 71
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Commissioner of Taxation v SNF (Australia) Pty Ltd [2011] FCAFC 74
Commonwealth Bank of Australia v Smith [1991] FCA 375; (1991) 42 FCR 390
Daly v Sydney Stock Exchange Ltd [1986] HCA 25; (1986) 160 CLR 371
Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264
Finding v Commonwealth Bank of Australia [2001] 1 Qd R 168
Fletcher v Ould Pty Ltd [2001] WASC 181
Fletcher v Ould Pty Ltd [2003] WASC 226
Galaxidis v Galaxidis [2004] NSWCA 111
Golby v Commonwealth Bank of Australia [1996] FCA 1136; (1996) 72 FCR 134
Grundt v The Great Boulder Proprietary Gold Mines Limited [1937] HCA 58; (1937) 59 CLR 641
Hankinson as Executrix of the Estate of Gary William Same v Brookview Holdings Pty Ltd [2004] WASCA 279
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2001) 241 CLR 1
Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406
Low v Bouverie [1891] 3 Ch 82
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705
Pilmer v The Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165
Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466
Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157
Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387
Watson v Foxman (2000) 49 NSWLR 315
Western Australian Insurance Co Ltd v Dayton [1924] HCA 58; (1924) 35 CLR 355
Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295

1	ALLANSON J:  Mr Brian Fletcher, owned a piece of land in Bull Creek that was leased to a third party and used as a health club.  There were two mortgages over the land ‑ St George Bank Ltd was the second mortgagee but had priority under a deed between the two mortgagees.  It was also Mr Fletcher's banker.
2		In July 2001, the first mortgagee sold the land.  Mr Fletcher says that the bank owed him duties in law and equity to inform him about the sale in time to permit him to prevent it, and to not allow the sale to proceed.  In these proceedings he claims damages for breach of those duties.  
Background
3		Mr Fletcher, was the managing director and a shareholder of Baysilk Holdings Pty Ltd (Baysilk).  From 1995 until July 2001, Mr Fletcher was the registered proprietor of a piece of land at 77 Wheatley Drive, Bull Creek, and which I will refer to as the Bull Creek property.  Baysilk, as a lessee from Mr Fletcher, conducted the business of a health club on the Bull Creek property until 1 January 1997.  
4		In July 1995, Mr Fletcher granted a mortgage of the Bull Creek property to Ould Pty Ltd (Ould), a company associated with Mr John Hooper.  The mortgage was registered on 4 July 1995.
5		In August 1995, Baysilk entered into agreements with St George Bank Ltd (St George Bank), under which the bank provided three loan facilities.  The loan facilities were secured with a registered second mortgage over Mr Fletcher's estate and interest in the Bull Creek property, and a mortgage over another property Mr Fletcher owned in Waterman.
6		Subsequently, Mr Fletcher entered into a series of further agreements with St George Bank under which he held other loans.  These loans were also secured by the registered mortgage over the Bull Creek property, as well as security over properties at Waterman, City Beach, Churchlands and Craigie.  Payment on all of the loans held by Mr Fletcher and Baysilk were made from one account ‑ the Visa account ‑ on which he had an overdraft facility with a limit of $25,000.  The rent from the Bull Creek property was paid into this account and, in effect, financed all of Mr Fletcher's borrowings.
7		In 1995, Mr Fletcher, Ould and St George Bank executed a Deed of Postponement, under which Ould agreed that the mortgage to St George Bank would have priority and rank first in payment of all moneys owing by Mr Fletcher or Baysilk.
8		In 1997, Baysilk sold its health club business to Tonesports Pty Ltd (Tonesports).  Baysilk assigned the lease of the Bull Creek property to Tonesports for a term expiring on 1 February 2010, with options to renew.
9		On 4 July 2000, Ould demanded payment of $88,945.24 which it said was due and owing pursuant to its mortgage.  Ould subsequently listed the Bull Creek property for sale by public auction, purportedly in the exercise of its power of sale as mortgagee.  
10		Mr Fletcher asserted that the debt secured by the mortgage granted to Ould had been repaid.  On 28 November 2000, he commenced action in this court, seeking a declaration that no debt was owing to Ould and an injunction to restrain the proposed sale.  On 12 December 2000, Steytler J granted an injunction to restrain the auction which was due to proceed the following day.  Mr Fletcher was required to pay $75,000 into court by 31 January 2001 as a condition of the injunction.  He did not pay the money into court and the injunction lapsed. 
11		Ould continued with its plans to sell the Bull Creek property, appointing Mr Tony Delich of Knight Frank Real Estate as its agent.
12		In February 2001, Ould contracted to sell the Bull Creek property to Acropolis Developments Pty Ltd (Acropolis Developments) for $1.7 million.   The contract was subject to finance and other conditions.  That contract did not proceed.  Acropolis Developments made another offer and a contract was signed on 16 June 2001.  Settlement was on 20 July 2001.  Although it was Ould which sold as mortgagee, the whole of the funds realised on the sale were paid to St George Bank.
13		Following the sale Fletcher sought further finance from St George Bank to purchase another health club.  The bank refused.  
14		In 2003, judgment was given for Mr Fletcher and Baysilk against Ould, with the court declaring that all money secured by the mortgage to Ould had been repaid:  Fletcher v Ould Pty Ltd [2003] WASC 226.  St George Bank was not a party to those proceedings.
15		In 2006, Mr Fletcher began these proceedings against St George Bank and Mr Hooper.  
16		In 2008, Westpac Banking Corporation and St George Bank merged.  Consistently with those arrangements, I made an order changing the name of the defendant in this action.  It is convenient, however, in the body of these reasons to refer to the bank as St George Bank.  That is how the witnesses referred to it, and how it was named in the various documents. 
17		I was advised shortly before the first day of trial that the proceedings between Mr Fletcher and Mr Hooper had been resolved.
The claim
18		The plaintiff's claim is set out in an amended statement of claim (last amended on 22 June 2010).  At the core of his claim is the plea that in the months February to July 2001, Mr Gavin Basset, who was his relationship manager at St George Bank , made a number of undertakings to him on behalf of the bank.  These are set out in pars 26, 27 and 29 of the statement of claim in these terms:
26.	In or about February 2001
26.1	The plaintiff orally informed St George (by Gavin Basset) that the injunction had lapsed and that it was possible that Ould might again wrongfully attempt to sell the Bull Creek Property.  The plaintiff asked St George (through Basset) to ensure that the plaintiff would be informed if St George became aware of any further attempt by Ould to sell the Bull Creek Property, so that the plaintiff could then take steps to prevent the sale.  
26.2	Gavin Basset on behalf of St George assured the plaintiff that no sale of the Bull Creek Property could be made by Ould without the knowledge of St George, because St George held the title deed to the Bull Creek Property, and was the registered mortgagee in priority to the Ould mortgage; and he said that St George would tell the plaintiff of any proposal by Ould to sell the Bull Creek Property ('the First Undertaking').
27.	On several occasions thereafter, between February 2001 and July 2001, the plaintiff spoke by telephone to Gavin Basset, again said that he (the plaintiff) was concerned about a possible sale of the Bull Creek Property by Ould and asked Basset to assure him that, as Basset had previously stated, no sale could take place without St George knowing and that the plaintiff, in turn, would be told by St George if any sale was proposed by Ould.  On each such occasion Basset on behalf of St George gave the plaintiff that assurance, and said St George would immediately inform the plaintiff if it became aware of any proposal by Ould to sell the Bull Creek Property ('the Second Undertaking').
…
29	In or about May or June 2001 Bassett told the plaintiff that he had heard that a conditional offer of $1.74 million had been made to Ould for the Bull Creek Property.  The plaintiff asked Basset to assure him that if St George became aware that such an offer had been accepted, and had become unconditional, he would tell the plaintiff, so that the plaintiff could seek an injunction.  Basset undertook to the plaintiff that he would do so, and again assured the plaintiff that no sale could be completed without St George's knowledge and acquiescence ('the Third Undertaking').
19		In par 30 he pleads:
Each of the said undertakings gave rise to an assumption or expectation on the part of the plaintiff that no sale of the Bull Creek Property could be made or completed without St George knowing, and that St George would inform the plaintiff immediately upon becoming aware of any of the following:
(a)	that a contract for the sale of the Bull Creek Property by Ould had been signed;
(b)	that a sale of the Bull Creek Property by Ould had become unconditional;
(c)	that a settlement to complete the sale was proposed or arranged, and that St George Bank had been asked to attend settlement to collect the proceeds of sale in exchange for the discharge of the St George mortgage.
20		The plaintiff pleads (in par 31) that, by reason of these facts, he was in a position of vulnerability in relation to St George Bank; that St George Bank knew that he would rely upon the undertakings; and that if the undertakings were not performed, he would suffer damage.  In reliance on the assumption or expectation set out in par 30 of the statement of claim, he did not seek an injunction to restrain Ould from proceeding with or completing a sale of the Bull Creek property, or seek an expedited hearing of his proceedings in relation to the Ould mortgage.
21		In par 36 the plaintiff pleads:
By reason of the facts pleaded in paragraphs 20, 21, 24, 26 to 31 hereof, St George owed the plaintiff a duty to:
(a)	promptly inform the plaintiff of all steps taken by Ould and/or Hooper of which St George became aware, towards sale and settlement of the Bull Creek Property;
(b)	ensure that the plaintiff was given reasonable notice of any proposed settlement of a sale by Ould and/or Hooper of the Bull Creek Property; and 
(c)	refuse to attend on settlement of such a sale or to produce the duplicate certificate of title and a registrable discharge of the St George mortgage, until the plaintiff was able to take steps to prevent such sale.  
22		He further pleads that those facts give rise to a promissory estoppel against St George Bank.  
23		The plaintiff pleads breach of fiduciary duty as an alternative cause of action:
Alternatively, by reason of the facts pleaded in paragraphs 7 to 31 above and the relationship of banker/customer between the plaintiff and St George, St George owed the plaintiff a fiduciary duty promptly to inform the plaintiff of the matters pleaded in paragraph 33 and 34 hereof (par 37).
24		Paragraph 37 also set out facts upon which the plaintiff relies in support of the plea that the bank was under a fiduciary duty.  These include the several mortgages he held with St George Bank, and a declaration by St George Bank on each of three occasions when it offered facilities to the plaintiff or to Baysilk that the banker/customer relationship would be 'mutually beneficial'.  
25		Alternatively, the plaintiff pleads that by reason of those facts, St George Bank is estopped from denying that it owed a fiduciary duty to inform the plaintiff.
26		The plaintiff claims that by reason of the sale of the Bull Creek property, he has suffered loss and damage.  There are two alternative bases pleaded for assessing his loss.  First, it is the loss of the equity of redemption of the Bull Creek property, being the difference between the true value of the property at the date of trial and the net proceeds of the sale, together with the loss of rental income for the period from the sale up to trial.  Second, the plaintiff claims that the Bull Creek property was sold for less than its value in July 2001 to the extent of $435,000, and claims that sum with interest, together with the loss of rental income.
The defence
27		In its defence, St George Bank denies it gave the undertakings claimed and denies that they gave rise to the assumptions or expectations pleaded.  It denies the allegations in par 31 of the statement of claim, including that it knew that Mr Fletcher would rely on the undertakings and would suffer damage if they were not performed.  It denies that Mr Fletcher relied on assumptions and expectations raised by the bank in not seeking an injunction or an expedited hearing of its claim against Ould.  The bank denies that it had the obligations pleaded in par 36 of the statement of claim.  It denies any breach of fiduciary duty as alleged in par 37.  
28		In par 33, St George Bank pleads some of the events between 5 February 2001 and the settlement on 20 July 2001.  In particular, it pleads:
1.	that Mr Fletcher was aware of the conditional offer by Acropolis Developments to purchase the Bull Creek property by about February 2001;
2.	the terms of two letters from Mr Bassett to Mr Fletcher, dated 1 May 2001 and 21 May 2001 ‑ which are set out below at [38] and [39];
3.	on 7 June 2001, the bank sent default notices demanding payment of all money owing by Mr Fletcher under his securities;
4.	on 10 July 2001, Mr Drake‑Brockman on behalf of the bank told Mr Fletcher that it was his understanding that the property would be sold in a short time and that the bank did not want to do anything to prejudice that sale; 
5.	on 10 July 2001, Mr Fletcher informed the bank that he intended to apply for an injunction to stop the sale, but did not.
29		The bank relies on Mr Fletcher's failure to protect his own position by allowing the injunction granted by Steytler J to lapse.
The evidence
30		The plaintiff relied on the evidence of Mr Fletcher.  The defendant relied on the evidence of seven witnesses:
1.	Mr Bassett;
2. 	Mr Richard Drake‑Brockman, the State Manager of St George Bank during 2001;  
2.	Mr Graham Stanway, who was State Credit Manager at the relevant time and remains with St George Bank; 
3.	Ms Maxine Blount, the bank's solicitor at the time of these events;
4.	Mr Delich of Knight Frank Real Estate;
5.	Mr James Cowling of Tonesports; and
6.	Mr Con Poulios, of Acropolis Developments.
31		Each witness made a witness statement.  Ms Blount, Mr Delich, Mr Cowling, and Mr Poulios were not required for cross‑examination. 
32		Each party adduced expert evidence.  The plaintiff called Mr Scott Bellerby, and the defendant Mr Ross Hughes.  The witnesses are certified practising valuers, and both are well qualified.  They provided detailed reports and were cross‑examined.  I deal with issues of valuation separately at the end of these reasons.
The plaintiff's case
33		Mr Fletcher said in his witness statement that he spoke to Mr Bassett several times during the period when Ould was first attempting to sell the Bull Creek property by auction.  He told Mr Bassett about the injunction proceedings in the Supreme Court, and told him when the injunction lapsed.  He also told Mr Bassett that he would go back to the Supreme Court and seek another injunction if Ould attempted to again sell the property.
34		Mr Fletcher said that this was the first occasion on which Mr Bassett told him that no sale could take place without the bank's knowledge because the bank held the title, and that Mr Bassett 'would inform [Mr Fletcher] of any proposal if Hooper tried to sell'.  
35		Mr Fletcher said that between February and July 2001, he rang Mr Bassett at least once a fortnight.  He told Mr Basset that he was feeling 'vulnerable and worried' and asked Mr Bassett if he was in a position to tell him 'if anything takes place regarding the sale of Bull Creek'.  Mr Fletcher said that, on a number of occasions, Mr Bassett told him that nothing could happen to his account without Mr Bassett's knowledge and said, ' I assure you I will tell you if there is any activity regarding the sale of this building'.  
36		Mr Fletcher said that, in about May 2001, Mr Bassett told him that he had heard that an offer had been made for the property.  Mr Fletcher said he asked Mr Bassett to tell him if the offer 'becomes formal' so that he could take out an injunction, and Mr Bassett said 'of course I'll let you know'.
37		Mr Fletcher said he assumed that, if he was told about the sale, he would be able to get a contract showing the unconditional offer which he could then take to the court.  He did not want to apply for another injunction unless Mr Bassett told him the sale was unconditional because he did not want to have to pay money into court unless he absolutely had to.  He continued to rely on Mr Bassett's assurances that he would tell him if the contract with Acropolis Developments became unconditional, or that the bank was prepared to allow a sale to proceed.
38		On 1 May 2001, Mr Bassett wrote to Mr Fletcher regarding his overdraft facility which was then overdrawn by approximately $44,000.  The letter foreshadowed legal action for full recovery of all debts, but continued, 'St George Bank may consider withholding legal action should the sale of 77 Wheatley Drive Bull Creek become unconditional by 10 May 2001'.
39		On 21 May 2001, in a letter headed 'Re:  Sale of Bull Creek Property', Mr Bassett wrote to Fletcher in these terms:
We advise that the last update we received from the selling agent of 77 Wheatley Drive, Bull Creek was on Friday 11 May, 2001.
At that time we were advised that the offer thereon continues to be delayed from becoming unconditional as the purchaser endeavours to negotiate with the tenant of the property with regards to GST payable on the lease payments.  This negotiation has been going on for a period of 2 months without any headway being achieved.
Further, whilst the initial offer afforded 30 days for unconditional finance approval, which naturally expired 21 March, 2001, it is understood that finance approval has not yet been obtained, however, it has been advised that the vendor has agreed to an extension.
We will keep you informed as we are updated with the progress of this or any other offer on the property that may eventuate.
Should you have any queries, please do not hesitate to contact me.
40		At about this time, Mr Fletcher was in default in relation to payments on the Visa account.  He had substantially exceeded his overdraft limit.  From April to June 2001, direct debits in payment of his other accounts were regularly reversed.  The default in the Visa account was largely, if not entirely, caused by Tonesports failing to pay rent on the Bull Creek property on time.  
41		In May 2001, Mr Fletcher reached an agreement with Mr Bassett, and entered into an arrangement with St George Bank to reduce his level of debt by regular payments out of the rent from the Bull Creek property.  Despite that arrangement, St George Bank issued notices of default on 7 June 2001.  Mr Fletcher said that, after the notices were issued, he was speaking to Mr Bassett on a regular basis and continued to rely on his assurances.
42		On 18 June 2001, Mr Cowling of Tonesports sent an email to Mr Fletcher's agent, David Webster, about a meeting they were to have.  He wrote:
As an aside I have been advised by the mortgagee in possession's agent that there is now an unconditional contract of sale which is in the process of settling in the next 30/60 days … It may be worthwhile to find out the status of the sale prior to the meeting on Thursday so we can discuss what Brian's role will be if/when the sale is completed.
43		Mr Webster responded to Mr Cowling, copied to Mr Fletcher, on 18 June that Mr Fletcher had instructed him to say:
It is of no matter whether there is any sort of offer in train at the moment; until such time as it is concluded in a settlement, the lease is in existence [and] must be adhered to by all parties.
44		Mr Fletcher emailed Mr Bassett, forwarding the message from Mr Cowling, and wrote:  'Heard anything re below?'.  There is no evidence of any written reply.  Mr Fletcher could not remember if there was one.
45		Mr Fletcher did not mention the email from Mr Cowling in his witness statement.  He was asked about it in cross‑examination:
That is clear notice, is it not, to you, because that email is forwarded to you by Mr Webster on that same day, that there is an unconditional contract of sale?‑‑‑It's a notice from someone that I was in total conflict with, and therefore didn't realise [sic] at all on the communication.  I also didn't believe that he could know it before I did if there was such an offer.
Did you make any inquiry of anybody other than Mr Bassett about when you were told there was an unconditional contract of sale?‑‑‑No.  The only one I was communicating with in the bank on that basis was Mr Bassett.
I see.  Did you contact your solicitor Mr Wilson? ‑-‑No.
Did you seek his advice? ‑‑‑I can't recall.
46		Mr Fletcher did not follow up his email to Mr Bassett in writing, and had no recollection of speaking to Mr Bassett, although he said that he was sure that he would have spoken to him by telephone.  
47		On 19 June 2001, Mr Cowling advised Mr Webster by email that he had received a notice of assignment of rental from St George Bank.  Mr Cowling wrote:
Our advice is that this notice is binding on us and that we now no longer have a tenant relationship with Brian [Fletcher] or his appointed agents.  St George Bank are now our landlords.
48		Mr Webster forwarded the email to Mr Fletcher.  Mr Fletcher contacted Mr Bassett, who replied that St George Bank was receiving the rents but was not the landlord.
49		Later on 19 June 2001, Mr Bassett again wrote to Mr Fletcher by email.  He confirmed discussions earlier that day regarding an agreement made on 17 May 2001 under which Mr Fletcher was to reduce the amount by which he had exceeded his overdraft facility.  There is no reference in the email to the possible sale of the Bull Creek property, or to Mr Fletcher's query the day before.  
50		On Friday 6 July 2001, Knight Frank advised St George Bank that the contract for sale of the Bull Creek property was unconditional.  The executed contract shows that it was signed by both seller and buyer on 16 June 2001, with settlement to be 'within 30 days of acceptance date subject to clear title being available and also subject to condition 3.2 herein'.  Condition 3.2 allowed a further 30 days for withdrawal of a caveat or the contract would end.
51		On Monday 9 July 2001, the Master refused an application by Ould to dismiss the proceedings brought against it by Mr Fletcher:  Fletcher v Ould Pty Ltd [2001] WASC 181.  
52		On 10 July, Mr Drake‑Brockman, the state manager of St George Bank, advised Mr Fletcher that the bank proposed (subject to legal advice) to remove Mr Webster, and to appoint an independent agent to manage the property.  Later on the same day, by an email sent at 4.45 pm Mr Drake‑Brockman advised Mr Fletcher in these terms:
It is my understanding that the building will be sold within a short period.  The bank does not want anything to prejudice that sale.  We do not want to be involved with any dispute between you and Mr Cowling.  However we will do whatever is required to protect the interests of the bank.  I have referred the matter to our legal advisers and I have suggested it may be appropriate to replace Mr Webster with an independent party nominated by the bank or else an agent nominated by the intending purchaser.
In this case I understand that the tenant is conversing with the bank because we have directed him to do so with respect to all payments.  Should there be any arrears on any account including outgoings the Bank reserves the right to pay them from the proceeds of sale.
Mr Drake‑Brockman asked Mr Fletcher to address all future correspondence to the bank's lawyers.
53		Mr Fletcher replied to Mr Drake-Brockman by email at 9.40 pm.  He said nothing in this email about any assurances or undertakings given to him by Mr Bassett other than to state that 'Gavin has informed me that the bank is assuming there is no sale on foot'.  He did, however, question how effective property management could prejudice a potential sale, and asked, 'Why are you so keen that a sale takes place, knowing (or assuming you know) the circumstances?'.  In that email, Mr Fletcher said he had further evidence regarding the falsification of the mortgage by Hooper and that he intended to apply for an injunction to stop the sale.  
54		On 11 July 2001, Ms Blount of CBA Legal, then the bank's lawyers, confirmed Mr Drake‑Brockman's request that Mr Fletcher send any further communications to the bank's lawyers.  
55		On 12 July, Mr Fletcher replied to Ms Blount.  In the reply he complained about being told not to speak to the bank directly, and continued:
This is unprofessional, and quite frankly, in the light of Mr Drake Brockman stating he did not want anything to stop the sale of my building, knowing well that I have a legal procedure on foot to prevent the invalid forced sale, is beyond my comprehension.
To add insult to injury, he threatens to have an agent removed, who has clearly demonstrated his effectiveness in the fact that the first rent payment under his management has been paid on time for the first time in two years.
He has stated that this could somehow prevent the possible sale.  The agent is also bringing the tenant to task regarding their negligence in their maintainance obligation.  This has also been interpreted as somehow disadvantageous to the sale.
56		On 20 July 2001, the sale of the Bull Creek property proceeded to settlement.  Mr Fletcher learned of the settlement from Mr Cowling.  He attempted to ring Mr Bassett but was told he was on holiday.  
57		On 31 July, Mr Fletcher asked Mr Bassett if the bank would fund his purchase of another health club in Joondalup, although in evidence he said this was 'as much as anything to test the waters of what had just gone on'.  On 8 August, Mr Bassett told him that the proposal did not come within the bank's lending criteria.  
58		Mr Fletcher then sent an email to Mr Bassett containing a series of complaints against the bank.  In this email Mr Fletcher referred to the decision by St George Bank to reject his proposal to purchase the Joondalup Club and continued:
I just wanted to review the order of events that took place from the time that Hooper attempted to sell my property by auction in mid year, 2000.
From this, you will see why I proposed what I considered to be a 'constructive' solution by purchasing Joondalup, which you already have as a security, which would have restored my income, and improved your current position.
Order of events:
1.	Notice of auction.  I ask you what will you take as a minimum to release the security if an auction was forced by Hooper.  You informed me $1.7 m.
2.	I discussed with you bidding for it myself, but also sought an injunction to prevent the auction taking place.
3.	The auction was discontinued, even though I didn't complete the injunction.
4.	Early 01, you informed me of an offer of $1.740 000 by private treaty, and added it was not unconditional.  We both expressed surprise how close the offer was to the figure you told me the bank would accept.
	Even more so for me, since I have discovered the written sworn valuation you hold for a similar property, being the Joondalup Club, at $2.650 000.
5.	We had many discussions, after the auction ceased to proceed, where, each time you assured me that if the offer became unconditional, you would let me know straight away, because, as you know, I was in the process of seeking a court decision to have the Hooper mortgage discharged, and also was in a position to seek another injunction.
6.	In June you told me that as far as the bank was concerned, there was no longer an offer because of their continual procrastination, but still assured me, if one came in, you would inform me.
7.	During this time, Hooper placed an absolute caveat on my properties, and you informed me, because of this, you were not allowed legally, to increase my overdraft, which I had requested.  This was a surprise to me, but it was confirmed by your assistant, Andrew.  You told me last week that it was in fact policy, not legality.
In spite of this, you allowed my overdraft to increase to approximately $75,000, half of what it was last year, and charged me unauthorised o/d interest rates and charges for returning my periodical payments.
59		Later in the same email, Mr Fletcher wrote:
As you informed me, and my own experience indicated, the request for you to produce title (for settlement) would have been at least two weeks before intended settlement, which puts it to the beginning of July, at a time where you were not on leave.
In any event, there was no valid reason why Andrew would not have been instructed to inform me of this offer as you promised to do.
60		Mr Bassett responded that he did not intend to get into an argument about the various points, 'some of which are incorrect or lack clarity'.  He asked if Mr Fletcher sought reconsideration of his proposal, and Mr Fletcher replied that he did.  The bank again refused.
61		Mr Fletcher called no other witness as to the events leading up to the sale of the Bull Creek property. 
The defendant's case
62		The two bank witnesses who had contact with Mr Fletcher, Mr Bassett and Mr Drake‑Brockman, had very little recollection of their conversations with him.  
63		In his witness statement, Mr Bassett said that Mr Fletcher was one of a portfolio of 40 to 50 clients that he looked after as a relationship manager.  He spoke to him about once a month and met him five or six times a year.  Mr Bassett had no specific memory of the occasions he spoke to Mr Fletcher, although he could recall discussing Mr Fletcher's account being overdrawn.
64		Mr Bassett could remember Mr Fletcher mentioning the loan from Mr Hooper/Ould, and that Ould had registered a first mortgage over the Bull Creek property.  He also remembered that Mr Fletcher told him about a problem with Mr Hooper and the Ould mortgage.  
65		Mr Bassett had a 'vague recollection' of telling Mr Fletcher, at about the time of the proposed auction, that the bank would keep him informed of the sale of the Bull Creek property.  He did not, however, remember when that was said.  He could remember the letter of 21 May 2001, and also agreed that it was important to keep Mr Fletcher informed because, if the property did not sell, Mr Fletcher would be in default on his loans.
66		Mr Bassett was on leave between 5 and 16 July 2001 (when Mr Fletcher had his dealings with Mr Drake‑Brockman) and again on 20 July.
67		Mr Bassett had no better recollection when he gave his oral evidence.  He could recall being Mr Fletcher's relationship manager, and that he spoke to him on occasion.  In particular, he could recall that Mr Fletcher told him that Ould's claim was invalid because the debt to Ould had been paid, although he was not asked when that was said. 
68		In November 2001, Mr Bassett left the bank.  That, together with the passage of time, may account for his poor recollection.  At times he gave the impression that the task he was being asked to perform in recounting these events 10 years later was hopeless.
69		Mr Drake‑Brockman was the state manager of St George Bank in 2001.  His direct involvement in these events was limited, and he also had little memory of them.  He was able to identify documents but without actually remembering having sent or received them.  
70		In oral evidence, Mr Drake‑Brockman made clear the limited nature of his dealings with Mr Fletcher.  He exchanged some emails with Mr Fletcher in July 2001 but said:
I did not want to be involved in an argument with him about a lot of issues that I didn't think I had anything to contribute to.
71		Mr Drake‑Brockman left St George Bank in January 2002.
72		The last of the non‑expert witnesses called at trial was Mr Graham Stanway, who was the State Credit Manager of St George Bank between 1994 and August 2002.  He also did not deal directly with Mr Fletcher, but was aware of the state of his accounts.  By reference to bank documents, Mr Stanway could verify that the bank had not sought to independently verify Ould's claim that Mr Fletcher owed it money and did not question Ould's right to act under the mortgage.
73		Statements of evidence were received from Ms Blount, Mr Delich, Mr Cowling and Mr Poulios.  Ms Blount identified correspondence, including the emails referred to above, but did not add to what was set out in the documents.  Mr Cowling gave some background to his dealings with Mr Fletcher, but, in relation to the matters relevant to the claim, also confined his evidence to identification of correspondence.
74		Mr Delich, was engaged by Ould to market the Bull Creek property.  Later, Knight Frank became managing agents for Acropolis Developments.  Mr Delich produced a copy of records maintained while Knight Frank managed the Bull Creek property showing the annual net rental from 2001 to 2009. 
75		Mr Delich stated that there was a lack of interest in the property.  The market for health clubs was weak and they were an unpopular investment, especially 'old tired clubs with limited alternative use'.  He clearly put the Bull Creek property in that category.
76		Mr Delich gave evidence of the failure of the initial offer by Acropolis Developments, and the second offer on 16 June 2001.  He could recall (and had recorded in a file note) a telephone call from Mr Fletcher on 20 February 2001, in which Mr Fletcher told him that 'BC The Body Club was not travelling well and that he didn't care if the property was sold'.
77		Mr Poulios, a director and shareholder of Acropolis Developments, stated that when Acropolis Developments bought the property in 2001 the building was dated and, while it was functional, it needed work.  Between 2001 and the time of his statement (in September 2010) the company had spent approximately $250,000 on the property.
Findings of fact
78		The critical factual issue is whether Mr Bassett, on behalf of the bank, made promises or assurances that would reasonably give rise to the assumption or expectation claimed by Mr Fletcher.  
79		While they were made in a different context, the comments of McLelland CJ in Eq in Watson v Foxman (2000) 49 NSWLR 315, 318 ‑ 319, are pertinent.  The plaintiff needs to prove the words spoken with a degree of precision sufficient to enable the court to be satisfied that what was said would reasonably give rise to the assumption or expectation he claims.  This does not mean that he must prove the precise words spoken on each occasion.  But the court needs to be satisfied that it is more probable than not that words were spoken that would reasonably have that effect.  
80		Further, in determining whether Mr Bassett's statements would reasonably give rise to the pleaded assumption or expectation, I should also have regard to the circumstances in which the words were said and the whole of the course of conduct of the bank.  The question of fact is of the same kind as the question whether conduct is misleading or deceptive, and should not be decided by examining any particular statement or document or action in isolation:  compare Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592.
81		The task of finding facts is hampered by the poor recall of all of the witnesses. Counsel for Mr Fletcher repeatedly referred to the inability of the defendant's witnesses to deny the allegations in the statement of claim, due to their understandable inability to remember what was said 10 years ago.  The problem of recall was not limited to the defendant's witnesses.  Mr Fletcher also was giving evidence about conversations that took place 10 years ago, none of which were recorded.  He could not remember the precise words used by Mr Bassett on any occasion.   
82		I accept Mr Fletcher's evidence that on some occasion Mr Bassett said he would keep him informed about the sale of the property, and that Mr Bassett told him that the property could not be sold without the bank's knowledge.  Mr Bassett had some recollection of it, and it is consistent with the two letters sent in May 2001.  But I do not accept Mr Fletcher's evidence at trial that there was a 'continual conversation' since December 2000, in which he asked for and was given repeated assurances that Mr Bassett would inform him if any offer for the sale of the property became unconditional so that he could take action to prevent the sale.  
83		First, Mr Bassett did not believe that he would have given any indication that the bank would assist Mr Fletcher in attempting to stop the sale of the property, and said that the position of the bank would have to be protected.  In my opinion, it is unlikely that the bank would have agreed or undertaken to inform Mr Fletcher so that he could take action to prevent the sale.  The bank had not attempted to stop the earlier sale by auction in December 2000.  In May 2001, it foreshadowed action for full recovery of all debts, but was waiting for the sale.  In May 2001, it had also put his accounts on a watch list ‑ described by Mr Drake‑Brockman in this way:
Watch list is a serious matter and it happens if an account is considered to be in some sort of trouble from the bank's point of view and needs to be more closely managed or action taken to remove it from the watch list which generally involves either making a successful arrangement or selling properties in the end to get repayment.
While the bank later reached an agreement with Mr Fletcher for the progressive reduction of his level of debt, it also (on 7 June) served notices of default under each of his facilities.  On 14 June 2001, it served notice on Tonesports that Mr Fletcher was in default under his mortgage and directed payment of rent to the bank. 
84		Second, Mr Fletcher accepted he could not remember the words used, but said 'the whole essence' of the conversations in which Mr Bassett made the assurances was 'in the emails'.  The relevant emails were not identified.  There is no email in evidence between Mr Fletcher and Mr Bassett in the period December 2000 to the beginning of June 2001 ‑ a period that includes what Mr Fletcher described as a continuous conversation with Mr Bassett in which the assurances were given.  The only email that refers to any assurance or undertaking given by Mr Bassett is Mr Fletcher's email of 8 August 2001 ‑ after the sale of the property, and after the decision by St George Bank to decline finance for Mr Fletcher to purchase another health club in Joondalup.  It was apparent in Mr Fletcher's answers in cross‑examination, however, that he was referring to contemporaneous emails and not to this later document.
85		Third, the only documents in evidence which were made in the period between December 2000 and 18 June 2001, and which record communications between Mr Bassett and Mr Fletcher about the possible sale of the Bull Creek property, are the two letters of 1 May and 21 May 2001.  They do not support Mr Fletcher's claim.  I have set out their content above.  Those letters could not be reasonably read as a promise to advise Mr Fletcher to enable him to take action to stop the sale.  The second letter does state that the bank will keep Mr Fletcher informed of progress of any offer on the property.  But, read together, the letters show an expectation on the part of the bank that the property would be sold, and the effect of a sale on Mr Fletcher's indebtedness and the recovery action foreshadowed by the bank.  
86		Fourth, as Mr Fletcher knew, the bank had not attempted to stop the auction in December 2000.  More significantly, in the light of what the bank wrote in the two letters in May 2001, I do not believe that Mr Fletcher could then have reasonably held any assumption or expectation that St George Bank would assist him to prevent the sale.  This conclusion is reinforced by what then happened in June and July. 
87		On 18 June 2001, Mr Fletcher was told that there was an unconditional offer, and the sale was proceeding and would settle in 30 to 60 days.  He referred the email with that information to Mr Bassett with the inquiry, 'Heard anything re below?'.  Mr Bassett did not reply.  At trial, Mr Fletcher could not remember if he discussed the email with Mr Bassett, or, if he did, anything that was said.  There is no evidence that he tried to follow up his inquiry, or that Mr Bassett offered any assurances at this critical time.  Mr Fletcher and Mr Bassett did speak on 19 June 2001.  And Mr Bassett sent Mr Fletcher an email on 19 June, referring to discussions earlier that day, and confirming the arrangements for reduction of Mr Fletcher's level of debt.  That email is in an email chain that includes Mr Cowling's email of 18 June, but it does not refer, even incidentally, to the news about the sale, or to any discussion with Mr Fletcher about it.  
88		On 10 July 2001, Mr Drake‑Brockman not only advised Mr Fletcher that the property would be sold 'within a short period' (or at least in his understanding it would), but that the bank would do nothing to prejudice the sale.  Mr Drake‑Brockman also asked Mr Fletcher to address future correspondence to the bank's lawyers.  Even if Mr Fletcher had until then expected that the bank would keep him informed or would assist him to prevent a sale, that expectation could not reasonably have survived.  
89		Finally, I am not satisfied that Mr Fletcher in fact relied on the assurances he says were given.  Mr Fletcher says that he did, with the result that he did not know that he must act to prevent the sale until it was too late.  His statements in the witness box are, in one sense, the best evidence of his state of mind but they must be considered together with the other evidence.  As Handley AJA said in Baiyai Pty Ltd v Guy [2009] NSWCA 65 at [56]:
Inferences from the surrounding circumstances, other objective facts, and the probabilities may be a more reliable guide on questions of causation than ex post facto evidence from an interested party:  Seaton v Burnand [1900] AC 135, 140; Cackett v Keswick [1902] 2 Ch 456, 463 ‑ 464; Rosenberg v Percival [2001] HCA 18; 206 CLR 434, 443 ‑ 444.
90		The injunction obtained in December 2000 had lapsed when Mr Fletcher made no payment into court.  Mr Fletcher knew that payment into court was likely to be a condition of any further injunctive relief, and that he would need to sell other properties to raise any payment into court.  He had no way of knowing what notice Mr Bassett might have, or be able to give, of an impending sale.  In those circumstances, if he was to prevent the sale he needed to be in a position to make any payment that may be required.  All of his properties were mortgaged to St George Bank, and the Visa account was overdrawn, so he would have to make some arrangement with the bank.  He took no steps to make funds available. He had no satisfactory explanation about how or when he was going to raise the funds he would require.  In my opinion, Mr Fletcher's conduct is inconsistent with his claim of reliance.  If he was truly relying on Mr Bassett giving him notice, he would have at least attempted to make funds available.
91		The defendant also refers to evidence that in February 2001 Mr Fletcher told the selling agent, Mr Delich, that he did not care if the property was sold.  Mr Fletcher's explanation that he was trying to influence the agent's enthusiasm for the potential sale is incomprehensible.  Despite what he said in February, however, Mr Fletcher's later conduct shows he was not indifferent to the Bull Creek property being sold.  In particular, his emails to Mr Drake‑Brockman and Ms Blount in July 2001 demonstrate concern about the loss of the property.  
92		In the light of these findings I will now consider the pleaded causes of action. 
The causes of action
Breach of duty 
93		The plaintiff pleads that the bank owed him a duty to:
(a)	promptly inform him of all steps taken by Ould and/or Hooper of which St George Bank became aware, towards sale and settlement of the Bull Creek property;
(b)	ensure that the plaintiff was given reasonable notice of any proposed settlement of the sale by Ould and/or Hooper of the Bull Creek property; and 
(c)	refuse to attend on settlement of such a sale or to produce the duplicate certificate of title and a registrable discharge of the St George Bank mortgage, until the plaintiff was able to take steps to prevent such sale.  
94		The plaintiff pleads that the facts also give rise to a promissory estoppel against St George Bank.
95		It is difficult to identify the legal foundation of the duty alleged.  In final written submissions, the plaintiff relied on equitable estoppel as the source of obligations entitling him to relief.  In oral submissions counsel for the plaintiff said the facts give rise to claims in contract and tort.  
96		The claim in tort was specified as negligence 'in allowing the property to be wrongfully sold by Ould in circumstances where [St George Bank] had been put on notice that Ould was not entitled to sell it'.  The plaintiff asserted that the bank was under a duty that went beyond the obligation to give Mr Fletcher notice, and was a duty 'not to allow the sale'.  The duty was said to arise in a contractual relationship which imposed on the bank the express and implied duty not to act in any way prejudicial or detrimental to its customers.
97		One of the difficulties with this approach is that neither party had, in evidence or submissions, dealt in any detail with the terms of the contractual relationship.  For example, the document containing the Standard Terms of the St George Bank Commercial Banking Facilities was in evidence as part of the trial documents, and was referred to by Mr Fletcher in his witness statement.  No witness said anything about the content of that document, and neither party relied on it in submissions.  It includes at cl 10.2:
The Borrower agrees that … St George is not obliged to do anything (including, without limitation, disclose anything or give advice), except as expressly set out in the Facility Agreement.
I was referred to nothing in any Facility Agreement imposing an obligation relevant to the plaintiff's claim.
98		Second, the duty relied on is inconsistent with the bank's position as a lender and mortgagee.  The bank had served notices of default under each facility.  Although the bank had entered into an agreement with Mr Fletcher under which he was to reduce his overdraft, he was in default.  St George Bank was entitled to take action for recovery of the outstanding balance under each loan.
99		Third, if Ould was not entitled to sell the property, Mr Fletcher's remedy lay in the courts.  The bank had been told that Mr Fletcher disputed Ould's debt, but it had no actual knowledge.  I am not aware of any basis on which the law would impose a duty on the bank to prevent the sale, and counsel for the plaintiff referred me to no authority supporting the claim.
100		In my opinion, there was no general duty with the content relied on by the plaintiff.
101		The plaintiff's case includes a claim that St George Bank breached a more limited and specific duty of care to inform him to enable him to act to prevent the sale.  The plaintiff pleads that this duty arose out of the gratuitous undertakings given by Mr Bassett, where the bank knew that he was 'in a position of vulnerability' in relation to the bank, that he would rely on the undertakings, and that he would suffer damage if they were not performed.
102		Assuming that such a duty may arise, on the findings of fact I have made the claim must fail.  For the reasons given above, I am not satisfied that Mr Bassett gave undertakings on which Mr Fletcher could reasonably form the assumptions or expectations he pleads.   
103		The plaintiff's claim in tort faces another difficulty.  The immediate cause of Mr Fletcher's loss was the sale by Ould of the Bull Creek property.  To what extent can it be said that St George Bank caused the loss by not telling him immediately when it knew of the sale.
104		Mr Fletcher was told there was an unconditional contract on 18 June 2001.  There is no evidence that St George Bank then knew any more than he did.  The selling agents, Knight Frank, advised the bank of the unconditional contract on Friday, 6 July 2001.  In my opinion, one can only speculate about whether Mr Fletcher could have done anything to prevent the sale if the bank had promptly informed him then.  He had, to 6 July, taken no steps to have funds available in time to approach the court.  He gave no evidence of any alternative plan or source of funds. 
105		There is nothing before the court to show that Mr Fletcher's case against Mr Hooper and Ould was any stronger than his case in December 2000.  It is speculative whether, even with a payment into court, the court would have granted a further injunction in circumstances where the first injunction had been permitted to lapse.  Mr Fletcher said he had advice that justified confidence.  He did not produce that advice, and I do not share that confidence.  But even if the court had granted an injunction, he was not then in a position to make a payment into court.  I find that, even if the bank had notified Mr Fletcher on 6 July 2001, he would not have been able to prevent the sale.
106		Accordingly, however the breach of duty claim is formulated, it is not sustained on the facts.
Promissory estoppel
107		Paragraph 36 of the statement of claim concludes with the words, 'Further, those facts give rise to a promissory estoppel against St George'.  The claim in promissory estoppel was the main focus of the plaintiff's submissions.
108		The plaintiff relies on estoppel as a source of legal obligation.  He submits that promissory or equitable estoppel may extend to the enforcement of voluntary undertakings if Mr Fletcher acted to his detriment on the basis of an assumption that the undertakings would be performed, and if the bank played such a part in the adoption of that assumption that it would be unfair or unjust if the bank were now permitted to ignore that assumption:  Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, 404; Grundt v The Great Boulder Proprietary Gold Mines Limited [1937] HCA 58; (1937) 59 CLR 641, 675; Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 [40] ‑ [41].  Equitable estoppel may be the source of legal obligation, and a court may satisfy the equity by granting a remedy necessary to prevent the detriment that would otherwise result from the unconscionable conduct:  Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466, 472.
109		To found an estoppel, however, a representation must be clear and unambiguous in the sense that 'it must be such as will be reasonably understood in a particular sense by the person to whom it is addressed':  Low v Bouverie [1891] 3 Ch 82, 106; Western Australian Insurance Co Ltd v Dayton [1924] HCA 58; (1924) 35 CLR 355, 375;  Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406, 435 ‑ 436.  Tobias JA said in Galaxidis v Galaxidis [2004] NSWCA 111 [93]:
Much will depend upon the circumstances in which the representation is made and the context against which it is to be considered.  In its context, the representation is sufficiently clear and unambiguous if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely.
See also Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [195] ‑ [204].
110		On the findings I have made, the plaintiff has failed to prove that the bank made a representation that, in the circumstances, could have reasonably induced him to adopt the assumption or expectation on which he relies.  In particular, there is no evidence of anything said or done after 18 June 2001, when Mr Fletcher was told of the possible sale and forwarded Mr Cowling's email to Mr Bassett, that could have given Mr Fletcher any assurance that the bank would inform or otherwise assist him.  The facts do not support the remedy he seeks.
Breach of fiduciary duty
111		Paragraph 37 of the statement of claim pleads a fiduciary duty 'promptly to inform the plaintiff of the matters pleaded in paragraph 33 and 34 hereof'.
112		In his opening, counsel for the plaintiff accepted that there was no fiduciary duty, and sought to amend par 37 to plead an implied contractual duty instead.  When the proposed amendment was articulated, despite the earlier apparent concession, the contractual duty was proposed as an alternative to a fiduciary duty.  The amendment was not permitted, for reasons which I gave at the time.  
113		In closing, counsel for the plaintiff maintained the claim that the bank owed Mr Fletcher a fiduciary duty and had breached that duty by acting to his detriment.  In his pleaded case, the plaintiff refers to the undertakings he says that Mr Bassett gave, his reliance on St George Bank (through Mr Bassett) to perform those undertakings, and his 'position of vulnerability in relation to St George'.  In his final address, counsel referred in addition to the following: the banker and customer relationship involved the overdraft account (the Visa account) and four loan accounts; those accounts were held by two customers ‑ Mr Fletcher and a trust; four properties were securities for the loans, so the owners of those properties were sureties as well as borrowers; all the monthly payments came from the overdraft; there were no defaults on any of the loan accounts.  Counsel further suggested that St George Bank was a 'custodian' of the Bull Creek property 'which had been placed in [its] hands as security'.
114		Mr Fletcher also relied on letters sent to him in 1995, 1996 and 1998, in which the bank declared that the banker‑customer‑surety relationship would be mutually beneficial. 
115		The critical feature of a fiduciary relationship is 'that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense':  Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 96 ‑ 97; Pilmer v The Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165, 196 - 197 [70] ‑ [71].  From this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed:  Hospital Products (97); John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2001) 241 CLR 1 [87].
116		The relationship between Mr Fletcher and St George Bank does not fall into one of the generally accepted fiduciary relationships:  trustee‑beneficiary, agent‑principal, solicitor‑client, employee‑employer, director‑company, and partners inter se:  see Hospital Products (96).  The relationship between a banker and customer may be fiduciary in some circumstances.  In particular, where a bank holds itself out as an adviser on matters of investment, and undertakes a particular financial advisory role, it may create in the customer 'the expectation that nevertheless it will advise in the customer's interests as to the wisdom of a proposed investment', and may become a fiduciary:  Commonwealth Bank of Australia v Smith [1991] FCA 375; (1991) 42 FCR 390, 391.  See also Daly v Sydney Stock Exchange Ltd [1986] HCA 25; (1986) 160 CLR 371; Aequitas Ltd v Sparad No 100 Pty Ltd (formerly Australian European Finance Corp Ltd) [2001] NSWSC 14; (2001) 19 ACLC 1006, 1026 - 1027.  But absent some special feature, it is not part of the 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:  Golby v Commonwealth Bank of Australia [1996] FCA 1136; (1996) 72 FCR 134, 136; Finding v Commonwealth Bank of Australia [2001] 1 Qd R 168. 
117		Mr Fletcher's relationship with St George Bank was that between banker and customer.  The bank was not acting in a role, such as that of a financial adviser, where it had undertaken to act in Mr Fletcher's interests.  Even assuming that Mr Bassett gave the undertakings alleged, they were not undertakings to act on behalf of Mr Fletcher, or to exercise a power or discretion in his interests.  
118		The other factors relied on, considered individually or cumulatively, do not constitute an agreement or undertaking by the bank to act in the interests of Mr Fletcher, in the relevant sense.  The critical features of a fiduciary relationship are absent.
119		Finally, the 'duty to inform' relied on by Mr Fletcher is not consistent with the proscriptive nature of fiduciary duties:  Pilmer [74]; Breen v Williams [1996] HCA 57; (1996) 186 CLR 71, 113, 137 ‑ 138.
120		Where the pleaded facts and circumstances do not give rise to a fiduciary duty, the plea of estoppel relying on those same facts adds nothing.
The claim for damages
121		The plaintiff pleads that as a result of the breach of duty by St George Bank he suffered loss and damage.  He pleads two alternative bases for assessing loss.
122		The first pleaded alternative claims for loss of value of the equity of redemption due to the sale of the property, plus loss of rental income for the balance of the lease.  This plea required the court to find the true value of the Bull Creek property at the date of trial and then deduct specified amounts, including the net proceeds of sale.  The plaintiff, however, led no evidence of the value of the property at the time of trial.  He relied on an expert report dated 4 November 2009 which included an opinion as to the value of the property in July 2001 and in November 2006, but not later.  Neither expert witness expressed an opinion on the value of the property in 2011, and there was no evidence from which that value could be calculated.
123		That leaves the alternative which the plaintiff pleads as follows:
[T]he difference between the true value of the Bull Creek property and the price at which it was sold.
The sale of the Bull Creek property resulted in:
(i)	a realisation of only $1,700,000 when its true market value was $2,135,000, being the sum of $435,000;
(ii)	interest on the sum of $435,000 at 6% per annum from 21 July 2001 to judgment or payment;
(iii)	loss of rental income from the Bull Creek property, being $25,363.98 (as reviewed annually) monthly from July 2001 until the expiry date of the Lease (February 2010).
124		Should I be wrong as to liability, I set out my findings whether the plaintiff has proved the property was sold for less than its true market value.  That was the only factual issue relating to damages that was contested at trial.
The expert evidence
125		There was no challenge to the expertise of either Mr Bellerby or Mr Hughes and each of them demonstrated that, by reason of specialised training, study and experience, he is an expert.  
126		Both valuers agreed that use as a health club was the highest and best use of the Bull Creek property.  
127		In his expert report dated 19 August 2009, Mr Bellerby assessed its value by three methods.  Because at the date of valuation (July 2001) there was a long term lease in place, he gave primacy to the method of capitalisation of net income.  By that method, he arrived at a value of $2.135 million.  Mr Bellerby checked the value obtained by market capitalisation against the value assessed using two other methods ‑ direct comparison with other sales, and summation.  The two check methods each gave a value below $1.7 million.  
128		It was not disputed that the three approaches used by Mr Bellerby are all orthodox and in accordance with general valuation concepts and principles set out in the Australian Property Institute publication, Valuation Principles and Practice.  There were however two difficulties in Mr Bellerby's application of these methods.  
129		The first was the reliability of some of the data with which he worked.   Mr Bellerby had been provided a rent figure for the premises at July 2001.  That figure was not, however, proved by admissible evidence.  Second, it was inconsistent with evidence led by the defendant from Mr Delich, whose company managed the property from July 2001, as to the rental then received.  Third, it was inconsistent with the bank records showing amounts received from Tonesports during the period April to July 2001.  I am not satisfied that Mr Bellerby was working from a correct figure of the rent current at the time of the sale, and accordingly I am not satisfied that his calculation of the amount by which that rent exceeded market rent is accurate.  
130		There is, however, other evidence of what rent was actually received.  Further, as Mr Bellerby's calculation of market rental was not dependent upon the incorrect figure regarding rent for the Bull Creek property, it would be possible to assess the above market or 'profit rental' component, if his evidence is otherwise accepted.  That 'profit rental' component was, in fact, calculated by Mr Hughes on the basis of the proved rent figure.
131		The second difficulty was finding comparable properties.  Each of the methods used by the valuers is a different form of market comparison and requires identification of comparable properties.
132		The details relating to each of the sales relied on for comparison by both valuers was not proved by admissible evidence.  No objection was taken to the evidence or the admissibility of the opinion based on it.  Arguably, the issue of admissibility has been waived.  The evidence is relevant, and there are no considerations of public policy that require its rejection:  see Hankinson as Executrix of the Estate of Gary William Same v Brookview Holdings Pty Ltd [2004] WASCA 279 [44] (EM Heenan J).  On the use of evidence, including expert opinion, received without objection see Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; Commissioner of Taxation v SNF (Australia) Pty Ltd [2011] FCAFC 74 [25] ‑ [26].
133		Mr Bellerby referred to sales evidence in relation to seven compared properties.  Those properties were in five different suburbs (none of them in Bull Creek), the sales occurred over a five year period, only one of the seven properties sold was a health club, and one was vacant land.  The evidence showed sales which ranged from $115/m2 to $820/m2 for land. 
134		To make the comparison from such varied evidence, Mr Bellerby said factors 'such as, but not limited to' 15 factors (which he listed) are assessed and related back to the subject property.  His conclusion at page 44 is in these terms:
As at July 2001 our evidence reflected improved land rates of between $220/m2 and $1,000 /m2, while building rates were between $1,160 /m2 and $1,330 /m2.  For the purpose of this valuation we have adopted a value rate of between $575 /m2 to $675 /m2 based on improved land area and between $1,000 /m2 to $1,200 /m2 based on building area.
135		The report does not reveal which of the 15 listed factors (or others not listed) led to that conclusion, or how.  It is difficult to evaluate the conclusion when the process of reasoning is so opaque:  see Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 [71] ‑ [72]; Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705, 729 ‑ 745.
136		Mr Bellerby also identified 10 properties sold between September 2001 and November 2006, for which he calculated the passing yield (that is the return on the property, calculated by dividing the net income by the property price, and expressed as a percentage).  Again, the range of properties, the range of yields and the period in which the sales occurred was wide.  There were, however, two properties, both leased by Zest Health Club, formerly BC The Body Club, which provided the best comparison.  Both were described as having significantly superior purpose built improvements.  One was considered to be in a significantly superior location in Joondalup, and reflected a passing yield at September 2001 of 11.2%.  The other was at Bibra Lake and was considered to be an inferior location.  The passing yield was 11.06% in October 2001.  Other 'more mainstream' commercial property yields were around 8% to 10% towards the middle of 2001.
137		Finally, Mr Bellerby assessed market rent by considering rental evidence from a cross‑section of six properties, comprising three health clubs, two swimming schools, and an office warehouse tenanted by Rio Tinto.  Rents were in a range of $50/m2 to $160/m2, although only one property (one of the swimming schools) was below a $100/m2.  Three of the figures appear to be for rent at the time of the valuation (August 2009) ‑ if not, the report does not disclose when those figures were current.  Mr Bellerby concluded 'taking into consideration the various characteristics of the subject property, including its specialised nature and location' that he should adopt a fair market rental of $120 to $135/m2.  This gave a market rental for the Bull Creek property at between $188,000 and $212,000 a year.  For the purpose of his calculations he adopted $200,000.
138		The Bull Creek property and the health club on it were leased by Tonesports under a lease agreement which commenced 1 February 1995, for a term of 15 years.  The lease provided for annual rent reviews to the greater of the increase in consumer price index or market value and with a 'ratchet clause'; that is, on annual review, the  reviewed rent could not be less than the rent payable for the period immediately preceding the rent review date.  Both valuers agreed that the rent at 20 July 2001 was significantly above market.   
139		Because there was still a long term lease in place, with above market rent, Mr Bellerby placed greater reliance on the income capitalisation method.  The market rent capitalised at 13% gave a value of $1,538,462.  To this he added a component for the present value of the profit rent, capitalised at 15% for the 103 months remaining on the lease. 
140		Mr Bellerby concluded:
[We] are therefore of the opinion that the subject would reflect a capitalisation rate of between 12% and 14%, based on a market rental rate of between $120 /m2 to $135 /m2 pa net.  We have adopted the medium of these ranges accordingly and subsequently adopted a discount factor of 15% within our profit rental analysis.
141		Mr Hughes approached the assessment of value differently.  He based his assessment of value primarily on the sales evidence, with the income capitalisation method as a check.  Mr Hughes warned of the risk of distortion in the market capitalisation method as differences in the two variables (net rent and capitalisation rate) are magnified in the outcome.  For example, the difference in a 13% and a 14% capitalisation rate on $200,000 annual rent results in about $110,000 difference in value.  A difference in market rent is similarly amplified in calculating the property value by the capitalisation method.
142		Mr Hughes identified 12 sales of health club properties between 1997 and 2007 for comparison, and set out details relating to their sales and rental.  Because Mr Hughes confined his comparison to health club properties, there was little overlap with the properties identified by Mr Bellerby.  He included the Bull Creek property in his analysis.  I have reservations about the use to which that sale can be put, not only because it was a mortgagee sale, but because Ould had deferred priority to the St George Bank and would not receive any of the funds from the sale.  Ould was not a typical seller.  Otherwise, in my opinion, the properties chosen by Mr Hughes were a better comparison than those used by Mr Bellerby.
143		Mr Hughes identified five sales, other than the sale of the Bull Creek property, which occurred between January 1997 and October 2001, which in his view were the most appropriate comparison.  Those sales showed a rate per square metre between $608 and $1,344.  The sale in 1997 was not further considered as it was described as a dated sale.  Mr Hughes calculated the yield rates on the four remaining sales as 11.06%, 11.45%, 11.73% and 13.75%.
144		Mr Hughes also took into account the fact that the Bull Creek property had an inflated rental income stream.  He described the lease under which that rent was received as 'a doubtful lease covenant'.
145		Mr Hughes then arrived at a series of conclusions:
1.	The maximum added value from the above market rent would be the income for one year ($297,500) less an allowance for the contingent risk of vacancy and re-leasing costs ($100,000).  
2.	The 'indicated value' of the property after consideration of sales evidence 'based on the Mirrabooka and Midland sales in particular' is no greater than $880 per square metre.  
146		This resulted in a value, based on sales evidence, of $1,680,300.
147		In applying a check methodology of income capitalisation, Mr Hughes referred to the range of yield rates, the highest of which was 13.75%, and applied a rate of 15.5%.  The explanation for that that rate was that it 'takes into account all associated risks including lease covenant, inflated rental, and yields ranging from 11.06% to 13.75% derived from sales of superior properties'.  That capitalisation method produced a figure of about $1.92 million.  From that amount $200,000 was deducted for costs of repairs and refurbishment.  The 'check' valuation based on income capitalisation is $1.7 million.  The deduction for repairs and refurbishment is questionable.
148		In effect, Mr Hughes values the property in 2001 at the price for which it was sold. 
Conclusion on valuation evidence
149		The evidence demonstrates the difficulty of carrying out a retrospective valuation, compounded by the specialised nature of the property.  Both valuers agreed that use as a health club was the highest and best use of the property.  That limited the number of directly comparable properties, and, as I understood the evidence, called for a greater use of judgment in choosing the values for the relevant variables of market rent and yield.
150		The properties and transactions relied on by Mr Bellerby in determining the land value, passing yield and market rent for the Bull Creek property were, in my opinion, not truly comparable.  This required him to make many choices, based on his expertise and experience, but not explained other than as a judgment call by the valuer.  The most obvious example is the adoption of a rate for passing yield.  Mr Bellerby accepted that his judgment led him to a range of 12% to 14% ‑ which would translate into a significant variation in value.  I do not intend to be critical of Mr Bellerby.  I found him to be an honest and helpful witness, but restricted by the data available to work with.  I found the range of properties to which Mr Hughes referred more satisfactory as a comparison with the Bull Creek property.
151		In my opinion, it is possible to identify a range within which the market value of the Bull Creek property fell in 2001, but greater precision in determining a value is not supported by the evidence.  The sale price of $1.7 million falls within that range, although it may be towards the bottom of it.  In the light of the unchallenged evidence of Mr Delich that the market was weak and the property was old and tired, I am not satisfied that the plaintiff has proved that the property was sold for less than its then market value. 
Conclusion
152		For the above reasons, I would dismiss the plaintiff's claim.