New South Wales
Court of Appeal
CITATION: Dominic v Riz [2009] NSWCA 216 HEARING DATE(S): 4 May 2009
JUDGMENT DATE:
29 July 2009JUDGMENT OF: Allsop P at 1; Hodgson JA at 118; McColl JA at 119 DECISION: 1. Appeal allowed.
2. Set aside the orders made on 13 and 29 November 2007 against the appellants as third, fourth and fifth defendants and in lieu thereof order judgment for the third, fourth and fifth defendants with costs.
3. Respondents pay the appellants' costs of the appeal.
4. Direct any application by the respondents for a certificate under the Suitors Fund Act 1951 be made within 10 days by notice of motion accompanied by an affidavit. The Court will deal with the application, if made, on the papers.CATCHWORDS: TORTS – negligence – duty of care – solicitor retained to advise on mortgage and loan documents – loaned moneys to be applied to investment – solicitor not retained to advise on the underlying investment transaction – solicitor knew clients were aware of high risk of investment – solicitor advised clients to seek independent legal and financial advice – whether advice of solicitor that the clients should seek independent advice was adequate – whether solicitor could reasonably conclude that clients understood the advice – no breach of duty - TORTS – negligence – causation – no causation on the facts - LEGAL PRACTITIONERS – solicitors – conflict of duty and duty – no conflict in context where not advising on the underlying investment transaction LEGISLATION CITED: Contracts Review Act 1980
Civil Liability Act 2002 (NSW)CATEGORY: Principal judgment CASES CITED: Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30
Brickenden v London Loan & Savings Co of Canada [1934] 3 DLR 465
Citicorp Australia Ltd v O'Brien (1996) 40 NSWLR 398
Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144
Cumuck v Nitschke [2001] NSWCA 176
David v David [2009] NSWCA 8
Fox v Percy [2003] HCA 22; 214 CLR 118
Heydon v NRMA Ltd [2000] NSWCA 374; 51 NSWLR 1
Imbrahim v Pham [2007] NSWCA 215
Kowalczuk v Accom Finance [2008] NSWCA 343
O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262
Permanent Trustee Co of New South Wales Ltd v Bridgewater [1936] 3 All ER 501
Pilmer v Duke Group Limited (in Liquidation) [2001] HCA 31; 207 CLR 165
Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153; NSW ConvR 56-198
Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449
Stivactas v Michaletos (No 2) [1994] ANZ Conv R 252
Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642
White v Illawarra Mutual Building Society Limited [2002] NSWCA 164PARTIES: Paul Manuelpillai Dominic (1st Appellant)
Suzy David (2nd Appellant)
Fred David (3rd Appellant)
Omar Riz (1st Respondent)
Amal Riz (2nd Respondent)FILE NUMBER(S): CA 40843/2007 COUNSEL: R Darke SC, M Dicker (Appellants)
C Leggat SC, B Zipser (Respondents)SOLICITORS: Middletons (Appellants)
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- AGLC
- Dominic v Riz [2009] NSWCA 216
- Case
- [2009] NSWCA 216
- Decision Date
CaseChat Overview and Summary
Dominic v Riz concerned an appeal to the Court of Appeal of New South Wales regarding a claim in negligence against a solicitor. The plaintiffs had retained the solicitor to advise on mortgage and loan documents related to an investment. However, the solicitor was not retained to advise on the underlying investment transaction itself. The solicitor was aware that the clients understood the high risks associated with the investment and had advised them to seek independent legal and financial advice.
The central legal issues before the Court of Appeal were whether the solicitor had breached their duty of care to the plaintiffs. Specifically, the court had to determine if the solicitor's advice that the clients seek independent advice was adequate, and whether the solicitor could reasonably conclude that the clients understood this advice. Furthermore, the court considered whether any alleged breach of duty had caused the plaintiffs' loss.
The Court of Appeal found that the solicitor had not breached their duty of care. The court reasoned that the solicitor's retainer was limited to the loan and mortgage documents, and they were not engaged to advise on the merits of the underlying investment. The solicitor had taken reasonable steps by advising the plaintiffs to seek independent legal and financial advice regarding the investment, and there was no basis to conclude that the solicitor could not reasonably believe the plaintiffs understood this advice. Consequently, the court held that there was no causation established between any alleged breach and the plaintiffs' loss.
The appeal was allowed, and the previous orders against the appellants (the third, fourth, and fifth defendants) were set aside, with judgment entered in their favour. The respondents were ordered to pay the appellants' costs of the appeal.
The central legal issues before the Court of Appeal were whether the solicitor had breached their duty of care to the plaintiffs. Specifically, the court had to determine if the solicitor's advice that the clients seek independent advice was adequate, and whether the solicitor could reasonably conclude that the clients understood this advice. Furthermore, the court considered whether any alleged breach of duty had caused the plaintiffs' loss.
The Court of Appeal found that the solicitor had not breached their duty of care. The court reasoned that the solicitor's retainer was limited to the loan and mortgage documents, and they were not engaged to advise on the merits of the underlying investment. The solicitor had taken reasonable steps by advising the plaintiffs to seek independent legal and financial advice regarding the investment, and there was no basis to conclude that the solicitor could not reasonably believe the plaintiffs understood this advice. Consequently, the court held that there was no causation established between any alleged breach and the plaintiffs' loss.
The appeal was allowed, and the previous orders against the appellants (the third, fourth, and fifth defendants) were set aside, with judgment entered in their favour. The respondents were ordered to pay the appellants' costs of the appeal.
Orders
Orders of the court
1. Appeal allowed. 2. Set aside the orders made on 13 and 29 November 2007 against the appellants as third, fourth and fifth defendants and in lieu thereof order judgment for the third, fourth and fifth defendants with costs. 3. Respondents pay the appellants' costs of the appeal. 4. Direct any application by the respondents for a certificate under the Suitors Fund Act 1951 be made within 10 days by notice of motion accompanied by an affidavit. The Court will deal with the application, if made, on the papers.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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