CBRE (V) Pty Ltd v City Pacific Ltd (in liq)

The appeal concerned a dispute between CBRE (V) Pty Ltd (the valuer) and City Pacific Ltd (in liq) and its wholly owned subsidiary (the purchasers). The purchasers had entered into an option to acquire land based on a valuation provided by CBRE, which they alleged was negligent and misleading. The sale did not proceed, and the purchasers commenced proceedings against CBRE approximately eight years later. The primary judge found that the subsidiary's claims were statute-barred, but the parent company's claims were not, inferring an implicit loan from the parent to the subsidiary for the purchase funds.

The central legal issues before the Court of Appeal were whether the subsidiary's causes of action were statute-barred, and whether the parent company's claims for negligence and misleading and deceptive conduct were valid. This involved determining when the purchasers' causes of action accrued, particularly in light of the corporate relationship between the parent and subsidiary, and the circumstances under which an implicit loan and an obligation to repay could be inferred from contemporaneous documents. The court also considered the significance of disclaimers within the valuation report and the purchasers' failure to adduce evidence of reliance on the valuation, as well as whether the requisite causal link between the valuation and the payments made could be established.

The Court of Appeal allowed the appeal, finding that the purchasers' claims were statute-barred. The court reasoned that the trial judge erred in inferring an implicit loan from the parent to the subsidiary, concluding that the evidence did not support such an inference. The court found that the transaction was not one where a loan and an obligation to repay could be readily inferred, particularly given the contemporaneous documents which suggested the transaction was entered into for extraneous reasons and that flaws in the valuation may have been appreciated at the time. Furthermore, the court held that even if the claims were not statute-barred, causation had not been established, as the purchasers had failed to demonstrate a causal relationship between the valuation and the payments made. The judgment of the primary judge was set aside, and the proceedings were dismissed with costs.