BANKING AND FINANCE — banker and customer — contract — power to close account immediately in certain circumstances, including “to protect our Legitimate Interests” — grammatical error in standard terms — whether bank had to establish that it was “necessary” to protect its Legitimate Interests — whether contract should be construed with least violence to text — concession that Bank added in good faith and rationally — whether exercise of power required opinion to be reasonably formed — bank officer not cross-examined on basis that he had acted unreasonably — primary judge found bank officer had acted reasonably — even if clause required opinion to be reasonably formed, power available — appeal dismissed
Quick Take
1Where a contractual clause contains a conceded drafting error, the court should promote a reading that does the least violence to the erroneous text while giving the clause work to do; in a clause listing conditions for exercise of a power, a grammatically defective paragraph should be read as imposing a condition consistent with the structure of the other paragraphs.
2Even if a contractual power of account closure requires the bank's opinion to be reasonably formed, a finding of reasonableness by the primary judge will not be disturbed on appeal where the allegation of unreasonableness was not squarely put to the relevant decision-maker in cross-examination (applying Bale v Mills and Western Sydney University v Thiab).
3A contractual requirement that account closure be needed to protect the bank's legitimate interests does not impose an obligation to exhaust all lesser steps before closing the account; multiple responses to a risk may each be reasonable.
