Daly v Sydney Stock Exchange Ltd

The High Court of Australia considered an appeal by the plaintiff, Mr. Daly, against the Sydney Stock Exchange Ltd. Mr. Daly sought to recover damages for losses he alleged were caused by the negligence of the Stock Exchange in its supervision of a member firm, Patrick & Co. The core of the dispute concerned whether the Stock Exchange owed a duty of care to individual investors like Mr. Daly, and if so, whether that duty had been breached.

The central legal question before the High Court was whether the Sydney Stock Exchange owed a duty of care to individual investors to ensure that its member firms conducted their business with due diligence and skill, and whether the Stock Exchange had breached such a duty by failing to adequately supervise Patrick & Co., which subsequently collapsed, causing financial loss to Mr. Daly.

The Court, by majority, held that the Sydney Stock Exchange did not owe a duty of care to individual investors in the circumstances of this case. The majority reasoned that the Stock Exchange's primary function was to regulate the market and its members for the benefit of the market as a whole, rather than to protect individual investors from the insolvency of member firms. While the Stock Exchange had a power to supervise its members, this power was not exercised for the direct benefit of individual investors in a way that would found a duty of care in negligence. The Court distinguished between the general public interest in a well-regulated market and a specific duty owed to individual investors.

The appeal was dismissed.