The Court of Appeal has overturned a ruling that ANZ Bank New Zealand doesn't have to compensate a Taranaki farming family for the way it had represented the risk attached to interest rate swaps.
The High Court turned down a bid by Sharon and Stephen Coomey and their family trust - Bushline Trustees - for compensation over the way ANZ sold the swaps in 2008. Although the court found the bank had misrepresented the effect of combining floating rate loans with fixed rate swaps, no legal liability followed.
The Coomey's had claimed, on a variety of calculations, damages ranging between $76,000 and $6.3 million. The judge increased the costs awarded to the bank because they turned down two settlement offers.
But the Court of Appeal has sent the dispute back to the High Court to determine the damages payable by ANZ.
The appeal court found ANZ misrepresented the nature and effect of the swaps and failed to comply with its obligations in its margin and monitoring undertakings. It also differed from the High Court's in its view on whether it was fair and reasonable for the bank to rely on its disclaimer accuses.