Leda Pty. Limited v Weerden

Leda Pty. Limited (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a claim for negligent advice against Mr. Weerden, an accountant and tax expert. The dispute arose from Leda's purchase of shares in a company that was a unitholder and trustee of a trust which had carry-forward tax losses and a capital profit on the sale of a hotel. Leda alleged that Mr. Weerden's advice led to its decision to purchase these shares.

The Court of Appeal was required to determine whether Mr. Weerden provided negligent advice to Leda. Specifically, the court had to consider how a letter from Mr. Weerden, sent despite Leda not undertaking the full due diligence he had initially advised was necessary for certain advice to be given, would reasonably have been understood by Leda. The court also had to assess whether the purchase of the shares was caused by any such negligent advice and whether Mr. Weerden was liable under section 68 of the Fair Trading Act 1987 (NSW).

The court reasoned that the letter in question, when read in its context, did not constitute negligent advice. It found that the letter did not give advice that was negligent in the circumstances, nor did it cause Leda to purchase the shares. The judges considered the nature of the advice given and the reasonable understanding of the recipient in light of the preceding communications and the limited due diligence undertaken.

The appeal was dismissed with costs, and the cross-appeal was also dismissed, with no order as to costs.