An attempt to mediate appeared futile. Accordingly, the trial commenced at the prescribed date. As anticipated, Vollar took the stand as soon as his Counsel completed his opening address.
Under the rules of procedure then applicable in Western Australia, his Counsel took him through the facts of the case. It became clear that the business had failed and that Vollar had lost his investment and had made no earnings for months. In that regard, I felt considerable sympathy for him. Still, as the facts unfolded, I kept wondering why he had not taken professional advice before his injected his funds into the business. It was clear from the reference that, on occasions, the business exceeded the limits of its overdraft.
What was Vollar’s motivation in acquiring part of the business? Further, was he really entitled to put full reliance on the lukewarm reference. In reply to a question put by the Judge, he had conceded that he had not been a customer of our Bank, let alone of the branch involved. Did our bank really owe him a duty to investigate?
The Judge, a portly Gentleman in his mid-fifties, announced a 40 minutes recess. Obviously, he needed a tea break. As we mulled out of the stuffy court room, I took note of two policemen who were accompanying a middle-aged man waiting in the ante-room. His right hand was cuffed to one of the policemen’s left hand. A well dressed and groomed woman in her mid thirties was sitting beside the man. I sensed instinctively that they were the original owners of the business, Yuri and Rena Katz.
One of the legal assistants explained to me that the Katzs had been served subpoenas in case one of the parties decided to call either of them. Obviously, the wife had been deprived of her husband’s company while he languid in prison. Had she found solace in someone else’s arms out of sheer boredom or, perhaps, out of need? The legal assistant’s wry smile indicated that he was aware of my reflections.
“Where does Bruce Smith live?” I asked
“Some ten minutes walk from the business” the legal assistant replied. Then, without further questions on my part he added conspiratorially, “Vollar lives a few blocks further away. His wife often returns to Belgium to visit her family.”
“Is Bruce Smith, too, often on his own?”
“I don’t know. But I hear that he has a stormy marriage.”
When court resumed, Jack Wilson, rose to cross-examine. I had last seen him during his last year in Victoria University of Wellington. He had since grown into a man in his early middle age, self assured and, I sensed, cautious.
His first few questions related to Vollar’s career in Belgium. The Judge started to look bored, when Jack turned to the issue that concerned all of us.
“Mr. Vollar, as a Belgian real estate agent, did you find that purchasers rely on bank references?”
“Up to a point. Usually, they obtained valuations prepared by the personnel of their own bank.”
“What then was the purpose of a bank’s reference?”
“To gauge whether or not to proceed and to get some assessment of the standing of the counter party.”
“So, the bank reference would be a first step – nothing more?”
“True”, conceded Vollar with ill grace. He then added in haste: “But of course a Belgian would expect that a reference would be honest. I also believe that he is entitled to rely on a duty of care owed to him as a customer.”
Everyone present knew he had walked into a trap. Hastily, his own Counsel rose to point out that he had not called Vollar as an expert on Belgian banking law or practice. He had no objection to the exclusion of the second sentence from the record. Jack Wilson countered that the that he had no objection to the answer being accepted. He then turned back to Vollar, who was patently agitated, and asked pointedly:
“Mr. Vollar, were you at any time a customer of my clients. Did you have an account with them or any other dealings?”
“I thought they owed a duty of care to any member of the public.”
“That is a point to be argued by Counsel,” interceded the Judge. “Please answer the question put to you. Were you at any time the Defendants’ customer?”
“Not really, Your Honour.”
“Did you have any dealings with them except as regards this reference?” pressed Jack Wilson.
“No, I did not.”
Jack Wilson suppressed a grin. It was now established that Vollar had never been our Bank’s customer. Any point concerning the Bank’s duty to a member of the public was a point of law. Referring to it in the cross-examination would have been a gross error. Jack was too smart to make any legal point at this stage. Instead, he grilled Vollar on the contents of what he had been told.
“Mr. Vollar, did you read the reference carefully?”
“I did indeed.”
“It mentions that, occasionally, the business exceeded that limits of the overdraft granted to it.”
“I concluded from this that the business required a cash injection.”
“Did the reference revert to this point?”
“It did no. It was my own conclusion.”
“Based on your own assessment?”
“And on what Yuri Katz told me.”
“So, you knew Mr. and Mrs. Katz before you went ahead with the investment?”
“Actually, I had met them before I saw their advertisement in the papers. I had a talk with Mr. Katz next day.”
“You just went to the business for a chat?”
“Actually, I had known them for a quite sometime. I often had a snack at their counter.”
“Why then did you need a reference?”
“To make sure my assessment was correct. And the reference encouraged me.”
“Although you were told that the business had gone beyond the limits of their facilities?”
“The general tone of the reference was favourable.”
“But did the reference tell you the business was profitable?”
“My talks with the Katzs suggested it was.”
I looked at Jack anxiously. He was treading on thin ice. He had laid his foundation that Vollar had gone ahead with open eyes. What more was he hoping to establish at this stage?
Jack must have taken the same view. After a short reflection he adjusted his gown and turned to the final – perhaps even crucial – point.
“And, Mr. Vollar, this reference was given to you on the clear understanding that the Bank assumed no liability?”
“I disagree.”
“I put it to you that a disclaimer of liability had been read out to you!”
“It was not,” protested Vollar, “not according to my notes”!
“But you have not produced your notes, Mr. Vollar. The reference spelt out in your Statement of Claim is based on a sheet of paper produced by you!”
“It is the typed version composed from the notes I took when the clerk read me out the reference.”
“And you did not leave out anything?”
“I did not!”
“How then did you know the reference was composed by the branch manager?”
“The clerk told me so when she read out the reference.”
“Why then does her advice on this point not appear in your printed version of her communication?”
“I thought the point was mundane or standard,” answered a much deflated Vollar.
“So, you left it out!”
“I did. I saw no point in reproducing it.”
“And the same applies to any term except to the substance of what you were told, doesn’t it?!”
Vollar did not reply. Before his Counsel had the chance to raise an objection, Jack Wilson shrugged his shoulders, said he had no further questions and resumed his seat. Vollar’s Counsel tried to clear the record by asking whether Vollar would have referred in his notes to any disclaimer read out to him. Vollar assured the Judge he would have recorded it. The Judge looked at him narrowly. He then rose for the lunch break.