CLT v Connon & Ors, Sullivan v Moody

In *CLT v Connon & Ors*, heard alongside *Sullivan v Moody*, the High Court of Australia considered appeals arising from separate proceedings. In *CLT v Connon & Ors*, the appellant, CLT, a company, sought to recover damages for economic loss allegedly suffered as a result of negligent advice provided by the respondents, a firm of solicitors. In *Sullivan v Moody*, the respondents, police officers, appealed against a decision of the Full Court of the Supreme Court of South Australia which had allowed an appeal by the appellant, Sullivan, who had sued for damages for psychiatric injury and economic loss allegedly caused by the negligent conduct of the police officers in their investigation of child abuse allegations.

The central legal issue before the High Court was whether a duty of care in negligence was owed by the respondents to the appellants in circumstances where the alleged loss was economic and arose from the performance of statutory duties or from the provision of professional advice in the context of investigations. Specifically, the Court had to determine whether the existing common law principles concerning the recovery of pure economic loss in negligence were to be extended to these factual scenarios, and whether the policy considerations underpinning such an extension were persuasive.

The High Court, comprising Kirby and Hayne JJ, ultimately held that no duty of care was owed by the respondents to the appellants in either case. Their Honours reasoned that the imposition of a duty of care in these circumstances would give rise to an unacceptable risk of indeterminate liability, contrary to established principles of negligence law. The Court affirmed that the law is reluctant to impose a duty to take care to avoid causing pure economic loss, particularly where the loss is not consequential upon physical injury. Furthermore, the Court considered that the nature of the functions performed by the police officers in *Sullivan v Moody* and the solicitors in *CLT v Connon & Ors* involved the exercise of statutory discretions and professional judgment, and that imposing a duty of care to avoid economic loss would unduly fetter the proper exercise of these functions and potentially lead to defensive practices.

The appeals were accordingly dismissed.