Commonwealth Bank cleared over $1.6m nut farm deal

THE Commonwealth Bank has been cleared of wrongdoing after being accused of misleading a man into buying a Dunoon macadamia farm that went broke.

Ian Robert Clapham bought the Clan Macadam farm for $1.625 million in 2005 after visiting the bank's business development manager Paul Chapman.

He also bought a second farm at Brooklet.

Clapham claimed Chapman, who had his own macadamia farm at Tregeagle, talked him into the "two-farm strategy" despite his reservations and made misleading statements about the soundness of the investment.

He said Chapman gave him bad advice about the likely future prices of macadamia nuts, which dropped sharply soon after the farms were bought.

The bank was awarded almost $1.4 million after the business went into receivership in 2009, but Clapham filed a separate cross-claim for damages that was later amended and became the current case.

NSW Supreme Court Justice Rowan Darke believed Clapham "played down" separate advice he got from Lismore accountant Graham Smith warning him about the industry's tendency to "have a price bust every five years".

"The impression was given that Mr Clapham was prone to exaggerate evidence which he thought would assist his case," Justice Darke found.

Justice Darke said Chapman was an impressive and genuine witness, despite his inability to recall exact conversations from 2005.

"I do not think that the CBA undertook the role of advisor as alleged," he said.

"Mr Chapman did not represent that he would provide expert advice and recommendations to Mr Clapham."

The case was dismissed with Clapham ordered to pay the bank's legal costs. -APN NEWSDESK


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