Further submissions are to be made to evaluate what should be paid to Territory Sheet Metal (TSM) by the ANZ Bank. In his 507 page ruling, Mr Justice Olsson found that the defendant (ANZ) breached an implied term of contract between itself and TSM arising out of a cheque for $570,00 and another for $460,000,the latter being forgery , changed by Godwin from one for only $460. The judge ruled against the four plaintiffs in respect of their individual claims , except in certain aspects of the TSM claim.His Honour said the evidence indicated that what essentially had brought TSM “ to its knees” –in the context of its already difficult financial situation -was the impact of the public knowledge that Godwin had committed a serious fraud on the company .
This had generated a general fear by trade suppliers and potential customers that the company may not have be able to pay its debts and / or fulfil substantial orders, if placed with it. While it was true that TSM did “limp along for about three years “ after Godwin’s fraud became known, it was apparent from evidence that the company went into almost immediate financial decline. The judge went on to say it was “ truly remarkable “ that David Smith and his business partner , Edward Dean , were able to continue the business for as long as they did , probably as a consequence of them both obtaining night jobs so that they could “ survive” without drawing on TSM.
Mr Justice Olsson commented on evidence given by ANZ officers . Of Martin Bradley, an ANZ business manager , who had initial interaction with Smith , Dean and Godwin, the judge said he had only held that position for about a year at the time, with no experience handling matters of the complexity and magnitude of the TSM re-financing proposal when informed of it. It was clear he had little independent memory of the details of what occurred in l997, was unaware of what had happened to his diary for that year and had not made any contemporaneous notes. He testified that he maintained what he termed a work file , which seemed to have been little more than a collection of some miscellaneous documents that claimed had been passed to witness John Baylis, a key bank witness, when the TSM loans were formally approved. No such file, however, had been produced in court .
The judge said , in response to many questions and cross examination , the witness could not recall relevant details asked of him. Responses were no more than ex post facto rationalisation on his behalf. “In the event , I have approached his evidence with a distinct lack of confidence in its weight and have found it generally of limited assistance . I certainly could not safely rely on it as controverting any specific evidence of David Lennox Smith and or/ Edward Dean as to what took place and when .”
In respect of bank employee , Deane Barnett , His Honour said he was an intelligent and highly experienced person who held a variety of senior posts with the ANZ , including that of branch relationship manager. The judge gained the impression that his recollection of detailed events was somewhat superior to that of Bradley –although there were some facets of the narrative events of which he did not retain any, or a clear, memory. Although he regarded this witness as generally frank, objective and impressive, Mr Olsson admitted he had some difficulty in following the logic of certain of his conceptual approaches. In general, the accuracy of his factual evidence was accepted.
In the case of testimony by small business relieving manager , Darren Meers, His Honour said he had been unable to derive definitive assistance from what he had to say. Meers had professed no significant memory of the detail of any factual events pertinent to the case. He did recall going with witness Martin Bradley to the TSM premises.
Dealing with the evidence of Brian Peddler, in charge of ANZ Credit Centre for South Australia and the Territory , the judge found most of his evidence generally impressive , albeit that he came across as being slightly defensive at times. “I did not find his evidence concerning front line-banking procedures as impressive as that related to his apparent primary field of expertise.”
Chris Wellman, described as a confident, articulate and intelligent bank officer, professed no present memory of his involvement in the transactions relevant to the court hearing. However, he said perusal of certain documentation stimulated a limited degree of memory , although the judge was not convinced that it had done so. “The whole flavour of his evidence was such that it became clear that any seemingly positive evidence of what had occurred was little more than ex post facto rationalisation on his part.”
The judge said John Baylis, an employee of ANZ for 42 years and relationship manager and senior officer at the ANZ lending centre at Winnellie since l992, had presented something of an enigma. His professed memory seemingly improved as he went along and appeared to be based largely on documents that he perused . “I carefully observed him in the witness box and, at the end of the day, did not find him an impressive witness,” His Honour continued. ‘At times he professed a positive recollection of events that I do not consider that he truly had and, as I will later demonstrate , there are inconsistencies between his written statements and his oral evidence. Often, when pressed in cross examination , it was plain that he had no present detailed independent recollection of numerous events and circumstances.”
He found it odd that a statement by Godwin did not seem to have “rung any alarm bells "with Baylis.There were other problematic aspects of his evidence .”All in all , I have treated his evidence with great caution . I am not prepared to act on it , except where it is supported by other convincing evidence.”