Cam & Bear Pty Ltd v McGoldrick

Case [2018] NSWCA 110

Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Cam & Bear Pty Ltd v McGoldrick [2018] NSWCA 110
Hearing dates: 16 March 2018
Decision date: 23 May 2018
Before: McColl AP at [1];
Macfarlan JA at [2];
White JA at [107]
Decision:

(1)   Note that the Court will in due course make orders allowing the appeal and entering judgment for the appellant.
(2)   Direct that the parties attempt to agree upon the amount of damages to be awarded to the appellant.
(3)   Direct that within 21 days of this judgment the parties file and serve draft orders that they submit should be made to give effect to the terms of this judgment.

Catchwords:

NEGLIGENCE – breach of duty by auditor of self-managed superannuation fund – negligence in failing to identify and report doubts as to recoverability of assets described in financial statements as cash – primary judge erred in failing to have regard to the breadth of the appellant’s case – breach of duty caused loss

 

NEGLIGENCE – contributory negligence – appellant lacked financial sophistication – respondent auditor engaged to prevent the kind of loss that occurred – appellant’s damages reduced by 10% for its contributory negligence

 

NEGLIGENCE – proportionate liability – claim against superannuation fund’s auditor – damages of appellant not reduced by reason of directors’ concurrent liability to the appellant – the same acts of the directors resulted in the appellant’s damages being reduced for its contributory negligence – to permit both reductions would result in a double deduction for the same acts

  NEGLIGENCE – proportionate liability – claim against superannuation fund’s auditor – company which compiled the fund’s financial statements not proved to be also liable to appellant – no evidence as to the basis on which the company was engaged
Legislation Cited: Australian Consumer Law (NSW), s 236
Australian Securities and Investment Commission Act 2001 (Cth), s 12GF
Civil Liability Act 2002 (NSW), ss 5D(3), 5R, 34, 35
Fair Trading Act 1987 (NSW), s 68
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5
Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 9
Cases Cited: Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6
Boral Bricks Pty Ltd v Cosmidis (No 2) (2014) 86 NSWLR 393; [2014] NSWCA 139
Daniels v Anderson (1995) 37 NSWLR 438
Duke Group Ltd (in liq) v Pilmer (No 2) (2000) 78 SASR 216; [2000] SASC 418
Joslyn v Berryman (2003) 214 CLR 552; [2003] HCA 34
Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367
Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492
Rogers v Whitaker (1992) 175 CLR 479; [1992] HCA 58
T & X Company Pty Ltd v Chivas [2014] NSWCA 235; (2014) 67 MVR 297
Wingecarribee Shire Council v Lehman Brothers Australia Ltd (ACN 066 797 760) (in liq) [2012] FCA 1028; (2012) 301 ALR 1
Texts Cited: D Villa, Annotated

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AGLC
Cam and Bear Pty Ltd v McGoldrick [2018] NSWCA 110
Case
[2018] NSWCA 110
Decision Date

CaseChat Overview and Summary

Cam & Bear Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning claims of negligence against an auditor of a self-managed superannuation fund. The dispute arose from the appellant's alleged losses due to the auditor's failure to identify and report doubts regarding the recoverability of assets described as cash in the fund's financial statements.

The Court of Appeal was required to determine whether the primary judge erred in their assessment of the appellant's case, specifically in relation to the breadth of the negligence claim against the auditor. Further issues included whether the auditor's breach of duty caused the appellant's loss, the extent to which the appellant's damages should be reduced for contributory negligence, and the application of proportionate liability principles in light of concurrent liability of directors. The Court also considered whether the company that compiled the financial statements bore any liability to the appellant.

The Court found that the primary judge had erred in failing to consider the full scope of the appellant's case regarding the auditor's breach of duty. It held that the auditor's negligence caused the appellant's loss, but reduced the appellant's damages by 10% for contributory negligence, noting the appellant's lack of financial sophistication and the auditor's role in preventing such losses. Crucially, the Court determined that the appellant's damages should not be further reduced due to the directors' concurrent liability, as this would result in a double deduction for the same conduct that led to the contributory negligence finding. The Court also found no evidence to establish the liability of the company that compiled the financial statements.

Consequently, the Court of Appeal allowed the appeal and ordered that judgment be entered for the appellant. The parties were directed to attempt to agree upon the quantum of damages, with draft orders to be submitted within 21 days.

Orders

Orders of the court

(1) Note that the Court will in due course make orders allowing the appeal and entering judgment for the appellant.

(2) Direct that the parties attempt to agree upon the amount of damages to be awarded to the appellant.

(3) Direct that within 21 days of this judgment the parties file and serve draft orders that they submit should be made to give effect to the terms of this judgment.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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