Carr t/as Forshaws Neill v Swart

[2008] HCASL 355

MALCOLM DOUGLAS CARR T/AS FORSHAWS NEILL
v
DANIEL FREDERICK VICTOR SWART & ORS
S639/2007
DANIEL FREDERICK SWART
v
LAWCOVER PTY LIMITED & ANOR
S4/2008
[2008] HCASL 355

1. In each of these applications, the applicant seeks special leave to appeal against orders of the Court of Appeal of the Supreme Court of New South Wales (Beazley, Hodgson and Basten JJA) dealing with two appeals against orders made in the Equity Division of the Supreme Court by Palmer J.  The circumstances which lie behind the present applications were described by Palmer J in the following terms:

   "1.Mr Malcolm Carr carries on a modest sole practice as a suburban solicitor.  In 1997 he came to believe that he could become rich very quickly by investing in highly lucrative international investment schemes which he had heard were being promoted in London.  He knew nothing about international investment schemes.

   2.In early 1998, Mr Carr went to London to look for opportunities to invest.  He soon fell into the hands of swindlers.  Within a matter of days, all his money was lost.  Unfortunately, so also was USD4 million of the money which other people had entrusted to him to go into these investment schemes under his management."

2. At first instance, Palmer J held that Mr Carr had breached an investment agreement he had made with Mr Swart, that the agreement was a contract for the provision of services within the policy of professional indemnity insurance issued by LawCover Pty Limited, and that Mr Carr's liability for the loss sustained by Mr Swart was covered by that policy.  On appeal, the Court of Appeal held that the primary judge was right to hold that Mr Carr had breached the investment agreement, but that the primary judge had erred in concluding that Mr Carr's liability for loss was covered by the LawCover insurance policy.  The Court of Appeal held that the liability was not incurred in connection with the business of practising as a solicitor.

3. In the first of the applications to this Court (S639/2007), Mr Carr seeks to argue that the Court of Appeal erred in not taking proper account of the fact that the investment agreement provided expressly that it was governed by the law of England and Wales.  We are not persuaded that the conclusion reached both at trial and on appeal that Mr Carr breached his contractual obligations to Mr Swart is attended by doubt.

4. Pursuant to r 41.10.5 we direct the Registrar to draw up, sign and seal an order dismissing the application.

5. In the second application to this Court (S4/2008), Mr Swart seeks to argue that Mr Carr's liability was incurred in connection with the practice which Mr Carr conducted and was covered by the LawCover policy of insurance.  An appeal to this Court on the grounds proposed by Mr Swart would enjoy insufficient prospects of success to warrant a grant of special leave.

6. Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs.

K.M. Hayne
12 June 2008 S.M. Crennan