Allsop P at 1; Hodgson JA at 104; Handley AJA at 105
DECISION:
Appeal dismissed with costs.
CATCHWORDS:
LEGAL PRACTITIONERS – Solicitors – duty to clients – asserted breach of retainer– fiduciary duty – conflict of interest - retainer for refinancing mortgage documents – whether solicitor should decline to act when become aware of destination of funds - TORTS – NEGLIGENCE – duty of care – whether solicitor has duty of care to third persons not clients of the solicitor to undertake steps contrary to the interests of the solicitor’s client - MISLEADING AND DECEPTIVE CONDUCT - Fair Trading Act 1987 (NSW) – Solicitor distributing investments contracts under instructions of client – nature representations made in investment contract – s 42
First Appellant - Eddy David Second Appellant - Grace David First Respondent - Fred David Second Respondent - Suzie David Third Respondent - Pual Manuelpilla Dominic Fourth Respondent - Linda Joan Romano Fifth Respondent - Andy Isho
FILE NUMBER(S):
CA 40019/08
COUNSEL:
Appellants: D E Baran First - Fourth Respondents: R J H Darke SC, M C L Dicker Fifth Respopndent: G Curtin
SOLICITORS:
Appellants: Barclay Benson First - Fourth Respondents: Middleton Lawyers Fifth Respondent: Henry Davis York
LOWER COURT JURISDICTION:
Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):
SC 3844/02; 11832/03
LOWER COURTJUDICIAL OFFICER:
Patten AJ
40019/2008
ALLSOP P HODGSON JA HANDLEY AJA
12 February 2009
DAVID v DAVID
Headnote
The appellants retained the first to fourth respondents as solicitors to advise on refinancing of their existing borrowings to raise funds for an investment. The respondents were not retained to provide financial advice in relation to the investment and became aware of the proposed destinations of the funds part way through completing the retainer.
The firm of the first to fourth respondents also acted for the companies into which the funds raised by the refinancing transactions were to be invested in an investment…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading David v David
Sign in free to access the full text
Details
AGLC
David v David [2009] NSWCA 8
Case
[2009] NSWCA 8
Decision Date
CaseChat Overview and Summary
The proceeding concerned an appeal from a decision of the Supreme Court of New South Wales. The appellant, Mr David, alleged that the respondent solicitors had breached their retainer, their fiduciary duty, and engaged in misleading and deceptive conduct. The dispute arose from the solicitors' involvement in refinancing a mortgage for Mr David, where the destination of the funds raised by the refinancing became a point of contention.
The central legal issues before the Court of Appeal were whether the solicitors owed a duty of care to third parties not their clients, and whether they had breached their duties to their client, Mr David, by failing to decline to act upon becoming aware of the intended use of the refinancing funds. Furthermore, the court considered whether the solicitors had engaged in misleading or deceptive conduct under the *Fair Trading Act 1987* (NSW) by distributing investment contracts as instructed by their client.
The Court of Appeal affirmed the trial judge's findings. It held that solicitors do not owe a duty of care to third parties to act contrary to their client's instructions. The court reasoned that the solicitors' retainer was to act in accordance with their client's instructions regarding the refinancing of the mortgage. Their duty was to their client, and they were not obliged to investigate or act upon information concerning the ultimate destination of the funds in a manner that would be adverse to their client's interests, absent specific legal or ethical obligations to do so. The court also found no evidence of misleading or deceptive conduct by the solicitors in their distribution of the investment contracts.
The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.