Banque Brussels Lambert v Australian National Industries Ltd (1989) 21 NSWLR 502, Aust
In this case there was letter of comfort.
Spedley Securities wanted a loan facility from the bank. The bank wanted some kind of assurance from ANI which owned 45% of Spedley's parent company, Spedley Holdings. A letter of comfort was provided by ANI to the bank. ANI gave some quite precise undertakings, namely, that it would provide notice to the bank if it intended to sell its shareholding in Spedley and that, if this did happen, then the debt would become immediately payable.
The letter also said that ANI would ensure that Spedley could meet its financial obligations.
ANI sold its shareholding in Spedley without giving the bank notice and Spedley then went bankrupt.
BBL (the bank) then tried to enforce the letter of comfort. ANI argued that there were no promissory statements and no intention to create legal relations.
Rogers CJ decided that the letter used in this case did give rise to legal liability. Rogers CJ surveyed the somewhat uncertain legal position concerning letters of comfort, and held that the letter contained contractual promises.
He went on to consider whether the language in the letter was sufficiently promissory. If, for example, it was merely a statement of intention or of policy, then it could not be the basis of contractual obligation. He concluded that there were, indeed, promissory statements.
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