Westpac has been successful in a claim to recover a large shortfall on a margin loan facility, with the New South Wales Court of Appeal finding that it went to great lengths to help its customer save his portfolio.The judgment, which was handed down last month, illustrates the complexities that can arise when dealing with a client facing a margin call.In 2005 Anil Razdan entered into a margin loan facility with St George Bank. The facility went into margin call in September 2008 - at the height of the financial crisis - with a balance in excess of $4.5 million. Throughout September 2008 Razdan had a number of conversations with bank staff, who outlined his position and discussed his options, such as putting up some cash to reduce the loan, providing additional security or selling shares.Recordings of phone conversations between Razdan and the bank, included in evidence, show that the bank insisted that it was up to Razdan to decide how to resolve the margin call and that he should seek advice. On a number of occasions Razdan asked for more time, in the hope that the market would turn around.Razdan had been through this type of thing before; between 2005 and 2008 his facility went into margin call on a number of occasions and different strategies were employed at different times to deal with the calls. The court considered Razdan an "educated and experienced" investor.During the course of one of the September 2008 conversations Razdan was told that if the gearing ratio reached around 95 per cent the bank would immediately sell his portfolio.In mid-October the bank did sell his portfolio, when the gearing ratio was approaching 100 per cent. The proceeds of the sale were less than the amount outstanding on the loan, leaving a shortfall of around $400,000.Razdan was unable to pay the shortfall and in April 2010 Westpac (by then the owner of St George) commenced proceedings in the News South Wales District Court to recover the amount.Razdan filed a cross-claim that raised issues of misleading and deceptive conduct, breach of an implied term of the facility to act reasonably and in good faith, and unconscionable conduct. The core of his case was that the bank employee's statement about the bank selling at 95 per cent gearing constituted misleading and deceptive conduct.He said in evidence that he did not liquidate his portfolio because the bank told him that it would force sell at 95 per cent and protect his interest that way.In April 2013 the District Court ruled in favour of Westpac. Razdan appealed to the NSW Court of Appeal.The appeal judges found that the bank employee's statement that if the gearing ratio reached 95 per cent the bank would sell the portfolio was not a representation for the purposes of the Trade Practices Act, the Fair Trading Act or the ASIC Act.The court said the bank's conduct did not have the tendency to lead the appellant into error. It was essential for Razdan to establish