The court at first instance held that the bank and its employee had not made representations that induced the borrower to act on the basis that it had a $20 million credit facility available to it. The borrower appealed and the appeal was dismissed by consent.
The borrower then applied to have judgment set aside on the basis of fraud, namely that the bank employee had perjured himself and the borrower had fresh evidence of the bank employee confessing to particular items of false evidence. The court found that even if the borrower succeeded in showing that the bank employee had given false evidence, the court’s judgment was not based solely on this evidence and the alleged false evidence did not affect the result at trial for the following reasons:
- The borrower had failed on causation and loss. The borrower’s purchase of $2 million MFS shares was made because of the borrower’s view of the shares and not the availability of any facility which had yet to be established.
- The court believed the bank not the borrower and the borrower’s own evidence was that he was aware that he would not have a $20 million facility available until the appropriate loan documentation had been signed, and he knew this had not happened.
- The court found the borrower had been dishonest with the bank. He procured a false letter from his builder as to the purpose for which the facility money would be spent, which both undermined his credibility and his case. This showed that the borrower was aware that the $20 million credit facility was contingent upon using the funds for a particular purpose.
The court refused to set aside judgment.
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