The Commonwealth Bank of Australia has won a victory in court overturning an earlier decision that it had acted unfairly towards its customers over a property development collapse during the GFC.
Marija Kojic and her husband Dragutin Kojic took the bank to court over claims it acted unconscionably by allowing them to invest in a property controlled by development group Southern Constructions Services in 2009.
![Justice Edelman has upheld an appeal by CBA saying the bank did not act unconscionably.](/web/20170103164047im_/http://www.smh.com.au/content/dam/images/g/q/j/h/5/w/image.related.articleLeadwide.620x349.gtkmws.png/1483418161196.jpg)
SCS collapsed in 2011 after the Kojics gave its director, close friend Smelisha Blanusa, a payment of $436,161. The payment was for a 50 per cent stake in the Adelaide property but the Kojics were never formally registered as owners.
The Kojics argued CBA knew that in making the payment, they would simply become an unsecured lender to the failing SCS business, rather than a registered owner of half the property.
Justice John Mansfield of the Federal Court of Australia ruled in April it was "contrary to good conscience" for CBA to accept the Kojics' payment when it knew that the money would not be used to secure a stake in the property.
But Justice James Edelman upheld an appeal by CBA, saying the bank did not act unconscionably and was not liable under the law.
"On any view the conduct of the Bank was not unconscionable," he said in the judgment.
Justice James Allsop, who also ruled on the appeal, said Ms Kojic was an "experienced property developer" who knew Mr Blanusa well.
"As far as the bank could see, professional property developers made a decision to invest in a development with a long-time business colleague," Justice Allsop said.
"If the bank had known that the money the Kojics were investing was being placed into a doomed and valueless investment ... a powerful case would be made for unconscionable conduct. The facts are not, however, that."
The Commonwealth Bank declined to comment.