Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd  EWCA Civ 386
Contract law – Banking and finance – Misrepresentation – Investment
B, the appellant, was a bank. P was a company that worked as an investment vehicle, operated by its shareholders and was the first respondent. The second respondent, X, was a shareholder and regularly invested on P’s behalf, after liaising with R who worked as part of the appellant bank. R informed X of an opportunity to which X invested $250,000. R did not mention that X would have no control if the investment product defaulted. X received the terms and conditions which explained the product and did not read them but signed the document and returned it to the company. The product defaulted and P lost the majority of the investment. The trial judge found in favour of P on the basis that R had misrepresented the investment and that X had been induced by this. The bank claimed that the misrepresentation of R, who worked for the bank, was forfeited as X did not read the terms and conditions. The bank claimed that the risk statement in the terms had prevented X from claiming misrepresentation.
The issue was whether R had misrepresented the investment product to X or, whether X should have considered the terms and conditions which would have provided more information with regards to the product. It was important to consider whether the signing of the terms and conditions and the risk analysis had signalled X’s understanding.
The court allowed the bank’s appeal. It was held that X was an experienced investor and R had not described the product clearly enough to him. However, if X had read the terms and conditions, he would have understood the nature of the investment product. The court found that as X had signed the risk disclosure, he signalled that he understood the product.