HAP2 Pty Ltd v Bankier

Case [2020] QCA 152

SUPREME COURT OF QUEENSLAND

CITATION:

HAP2 Pty Ltd v Bankier [2020] QCA 152

PARTIES:

HAP2 PTY LTD
ACN 005 806 744
(appellant)
v
MICHELLE ANN BANKIER
(respondent)

FILE NOS:

Appeal No 5681 of 2019
Appeal No 8942 of 2019
SC No 2715 of 2016

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeals

ORIGINATING COURT:

Supreme Court at Brisbane – [2019] QSC 101 (Martin J); [2019] QSC 180 (Martin J); [2019] QSC 186 (Martin J); [2019] QSC 198 (Martin J)

DELIVERED ON:

21 July 2020

DELIVERED AT:

Brisbane

HEARING DATE:

11 November 2019

JUDGES:

Sofronoff P and Morrison and Philippides JJA

ORDERS:

1.   Appeal number 5681 of 2019 is dismissed.

2.   Appeal number 8942 of 2019 is allowed to the extent that the award of damages should be reduced by $36,075.25 and is otherwise dismissed.

3.   The appellant is to pay the respondent’s costs of both appeals.

CATCHWORDS:

TORTS – NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE – PROFESSIONAL ADVISERS – where the respondent was seriously injured in a car accident in 1997 when she was 16 years old – where the respondent was awarded almost $2 million in damages for her losses and injuries – where the respondent would only be able to work casually for the rest of her life due to her injuries, she has significant medical expenses, her condition would deteriorate over time, and where the damages would have to last her the rest of her life – where the respondent sought financial advice about investing the damages from the appellant – where the respondent was young and had limited financial experience –where the respondent had made significant withdrawals from her capital to fund her lifestyle and business enterprises – where the value of the respondent’s investment portfolio significantly decreased – where the trial judge concluded that the appellant had a duty to warn the respondent about the risks of depleting her damages award to an extent that the sum left would no longer serve her needs by overspending – where the trial judge found that the appellant had failed to give appropriate warnings to the respondent – where the appellant submits that the trial judge should have found that such a risk should have been obvious to the respondent – where the appellant submits that to find such a duty would wrongly involve characterising the retainer as one that involved more than “a portfolio review service” – whether the trial judge erred in finding that the appellant had a duty to warn the respondent about material risks

TORTS – NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE – PROFESSIONAL ADVISERS – where the respondent purchased a property at Palm Beach – where the appellant took out a loan to finance the property – where there were no file notes from the appellant about whether the purchase should be paid for from the respondent’s own capital or from a loan – where the trial judge found…

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AGLC
Hap2 Pty Ltd v Bankier [2020] QCA 152
Case
[2020] QCA 152
Decision Date

CaseChat Overview and Summary

HAP2 Pty Ltd v Bankier is a case involving a dispute between the respondent, Ms Bankier, and the appellant, HAP2 Pty Ltd, regarding financial advice provided by the appellant to the respondent. Ms Bankier, who was seriously injured in a car accident at the age of 16, received almost $2 million in damages. Due to her injuries, she would only be able to work casually for the rest of her life, with significant medical expenses and a deteriorating condition. She sought financial advice from the appellant regarding the investment of her damages. The trial judge found that the appellant had failed to provide appropriate warnings to the respondent about the risks of depleting her damages award to an extent that the sum left would no longer serve her needs by overspending.

The legal issues in this case primarily revolved around the duty of care owed by the appellant to the respondent in providing financial advice, specifically in relation to the risks associated with depleting her damages award, the purchase and funding of a property, and the viability of her photography business. The court also considered the limitation of actions, damages, and interest in relation to the case.

The court's reasoning in this case centred on the duty of care owed by the appellant to the respondent in providing financial advice. The court found that the appellant had a duty to warn the respondent about the risks associated with depleting her damages award, the purchase and funding of a property, and the viability of her photography business. The court also found that the appellant had breached this duty of care, leading to the respondent's economic loss. Regarding the limitation of actions, the court concluded that the appellant's argument had been abandoned and found no error in the trial judge's determination that the action was not statute barred. The court found no error in the trial judge's determination of the date of loss and the award of damages, but reduced the damages by $36,075.25. The court also found no error in the trial judge's determination of the applicable rate of interest.

ORDERS:
1. Appeal number 5681 of 2019 is dismissed.
2. Appeal number 8942 of 2019 is allowed to the extent that the award of damages should be reduced by $36,075.25 and is otherwise dismissed.
3. The appellant is to pay the respondent’s costs of both appeals.

Orders

Orders of the court

1. Appeal number 5681 of 2019 is dismissed.

2. Appeal number 8942 of 2019 is allowed to the extent that the award of damages should be reduced by $36,075.25 and is otherwise dismissed.

3. The appellant is to pay the respondent’s costs of both appeals.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Paragraphs 38 and 39 of the appellant’s outline of argument limit the appellant’s case on the adequacy of warnings to the issue of spending other than on interest payments due on the Palm Beach loan. The appellant does not argue that, if he was under such a duty, Mr Avery did not breach his duty, and Martin J found that he did.[44][44]Reasons of Martin J at [151].Inadequate reasons for conclusion about Palm Beach property The appellant contends that the learned judge’s reasons are inadequate because the respects in which the defendant was found to have failed to warn the plaintiff of the material risks of her potential investment in the Palm Beach property and the Burleigh Heads shop were not identified, or explained, by the learned primary judge at [151] of his Honour’s reasons. The appellant’s grounds of appeal also contend that the reasons do not reveal whether the content of paragraphs [141], [146], [149] and [151] of his Honour’s reasons constitute findings and, if they do, the reasons do not reveal the reasoning for those findings. It has been said that rationality is the hallmark of a judicial decision.[45] For that reason, unless a judge’s decision articulates the reasons for the decision, there is nothing to distinguish a reasoned decision based upon the applicable law and evidence from an arbitrary decision. Furthermore, reasons enable the parties to see the extent to which their arguments have been understood and accepted or rejected. In doing so, the reasons justify the parties’ acceptance of the decision founded upon them.[46][45]Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279 per McHugh JA.[46]Ibid. However, the extent of reasons that serve those purposes and, therefore, are adequate as a matter of law, will vary depending upon the circumstances of a particular case and upon the issue in relation to which the adequacy of reasons has been challenged. The duty of a judge to explain a conclusion has been likened to a party’s obligation to give particulars of the case. That obligation serves the requirement that an “opposite party shall always be fairly apprised of the nature of the case” that must be met and “shall be placed in possession of the broad outlines and constitutive facts which are said to raise… legal liability”.[47][47]Ibid, at 280, citing Isaacs J in R v Associated Northern Collieries (1910) 11 CLR 738 at 740. In this case, the large issue upon which the parties joined concerned the reduction of Ms Bankier’s capital sum to an extent that rendered it insufficient to fund her necessary expenses in the future, having regard to her inability to earn money by working for it. The whole case concerned the ways in which that sum had been depleted by the identified payments. The categories of payment were not large in number. They were constituted by withdrawals for expenditure associated with four purposes, which Martin J listed in paragraph [176] of his Honour’s reasons:(a)Spending beyond budget levels;(b)Making cash gifts;(c)Borrowing money; and(d)Expenditures in the Burleigh Heads business.

Ratio Decidendi

Legal Principle Established

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