Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd

The High Court of Australia considered an appeal by Hunt & Hunt Lawyers ("Hunt & Hunt") against a decision of the Court of Appeal of the Supreme Court of New South Wales. The dispute arose from a loan and mortgage transaction where fraudsters, Alessio Vella and Angelo Caradonna, induced Mitchell Morgan Nominees Pty Ltd and Mitchell Morgan Nominees (No. 2) Pty Ltd ("Mitchell Morgan") to advance monies. Hunt & Hunt, retained by Mitchell Morgan, had negligently drafted the loan and mortgage documents, which ultimately left Mitchell Morgan unable to recover the advanced monies. The central issue was whether Hunt & Hunt, as a negligent solicitor, was a "concurrent wrongdoer" with the fraudsters under Part 4 of the *Civil Liability Act 2002* (NSW), thereby limiting their liability.

The High Court was required to determine whether the economic loss suffered by Mitchell Morgan was caused or materially contributed to by the conduct of the fraudsters, Mr Caradonna and Mr Flammia, in a way that would render Hunt & Hunt a concurrent wrongdoer with them. Specifically, the Court had to consider the definition of "concurrent wrongdoer" within the context of the *Civil Liability Act 2002* (NSW) and whether the distinct nature of the losses caused by the fraudsters and the solicitors precluded them from being considered concurrent wrongdoers for the purpose of proportionate liability.

The High Court allowed the appeal, holding that Hunt & Hunt was not a concurrent wrongdoer with the fraudsters. The Court reasoned that the economic loss suffered by Mitchell Morgan from the fraudsters was the loss of the money advanced due to the forged loan agreement and mortgage. In contrast, the economic loss caused by Hunt & Hunt's negligence was the failure to secure that advance with a valid and enforceable mortgage. These were distinct losses, and the conduct of the fraudsters did not cause or materially contribute to the loss of security. Therefore, Part 4 of the *Civil Liability Act 2002* (NSW), which deals with proportionate liability for apportionable claims, did not apply to limit Hunt & Hunt's liability.

The High Court ordered that the appeal be allowed with costs, and the application for special leave be dismissed with costs. The orders of the Court of Appeal were set aside, and in lieu thereof, interest was to be allowed on the sum assessed as payable by Hunt & Hunt, the appeal by Mitchell Morgan from the orders made on the second cross-claim was otherwise dismissed, and Mitchell Morgan was to pay Hunt & Hunt's costs in the Court of Appeal. The parties were also directed to file a joint minute regarding further consequential orders, including the substitution of the correct judgment amount.