Mbakwe v Sarkis - [2009] NSWCA 330

New South Wales

Court of Appeal

CITATION: MBAKWE v SARKIS [2009] NSWCA 330

HEARING DATE(S): 10/08/2009

JUDGMENT DATE:
15 October 2009

JUDGMENT OF: Allsop P at 1; Ipp JA at 2; Handley AJA at 3

DECISION: Appeal dismissed with costs.

CATCHWORDS: TORTS - negligence - duty of care in utterance - defendant plaintiff's financial adviser - advice volunteered -duty of care existed. - MISREPRESENTATION - need not the sole cause of plaintiff's change of position - liability not excluded by other contributing causes. - MISREPRESENTATION – when representation continues.

CASES CITED: Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 ;96 ALR 354 at 363
Shaddock & Associates Pty Ltd v Parramatta City Council [No. 1] [1981] HCA 59, 150 CLR 225, 251, 255-6
San Sebastian Pty Ltd v The Minister [1986] HCA 68, 162 CLR 340, 355-6, 371-2
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8, 188 CLR 240, 249-50, 255, 261
Tepko Pty Ltd v Water Board [2001] HCA 19, 206 CLR 1, 16-7, 23
JEB Fasteners Ltd v Marks Bloom & Co [1983] 1 All ER 583 CA, 589
Gould v Vaggelas [1985] HCA 85, 157 CLR 215, 219, 236
Mutual Life and Citizens Assurance Co Ltd v Evatt [1968] HCA 74, 122 CLR 556, 571

PARTIES: Samuel Mbakwe - Appellant
Sam George Sarkis - Respondent

FILE NUMBER(S): CA 40007/2009

COUNSEL: Appellant: N Obrart
Respondent: M K Rollinson

SOLICITORS: Appellant: Keith Hurst & Associates
Respondent: Benjamin Khoury Solicitors

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 159/2007

LOWER COURT JUDICIAL OFFICER: Rolfe DCJ

LOWER COURT DATE OF DECISION: 11/09/2008

CA 40007/09

ALLSOP P
IPP JA
HANDLEY AJA
15 October 2009

Samuel MBAKWE v Sam George SARKIS

CATCHWORDS

NEGLIGENCE - duty of care in utterance - defendant plaintiff's financial adviser - advice volunteered -duty of care existed.

MISREPRESENTATION - need not the sole cause of plaintiff's change of position - liability not excluded by other contributing causes.
MISREPRESENTATION – when representation continues.

HEADNOTE

The plaintiff had a small but profitable business servicing x-ray film processing and similar equipment in hospitals. However he knew that he needed assistance from someone with financial skills and in late 1999 or early 2000 he appointed the defendant as his financial adviser on a monthly retainer. The plaintiff consulted the defendant about his business on a regular basis and sought his advice on particular matters. However the defendant also offered unsolicited advice which the plaintiff had accepted. In March 2002 the defendant drew to the plaintiff's attention an opportunity to make an unsecured loan to a property developer at what appeared to be a very attractive rate of interest and recommended the investment to him. The plaintiff acted on this advice on three occasions during that year and lent a total of $245,000 to the developer. In fact the borrower and his companies were hopelessly insolvent and the moneys invested were lost. The…

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 Mbakwe v Sarkis

Details

AGLC: Mbakwe v Sarkis [2009] NSWCA 330
Case: [2009] NSWCA 330
Decision Date: 15 October 2009

CaseChat Overview and Summary

The appeal concerned a claim in negligence brought by the plaintiff, Mr Sarkis, against the defendant, Mr Mbakwe, who had provided financial advice to the plaintiff. The central dispute revolved around whether Mr Mbakwe owed a duty of care to Mr Sarkis in relation to the financial advice he provided. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issue before the court was whether a duty of care could arise in circumstances where financial advice was volunteered by the defendant to the plaintiff, rather than being sought by the plaintiff. This required the court to consider the principles governing the establishment of a duty of care in negligence, particularly in the context of unsolicited advice and the relationship between the parties.

The Court of Appeal affirmed the existence of a duty of care. Applying established principles of negligence, the court found that Mr Mbakwe had voluntarily assumed responsibility for the advice he gave to Mr Sarkis. The court reasoned that when a person voluntarily assumes responsibility for the accuracy of advice given to another, and that other person relies on that advice to their detriment, a duty of care can arise, irrespective of whether the advice was formally sought. The court considered the circumstances in which such a duty is imposed, focusing on the reliance placed by the plaintiff on the defendant's expertise and the foreseeability of harm.

The appeal was dismissed, and Mr Mbakwe was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed with costs.

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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CITATION:	MBAKWE v SARKIS [2009] NSWCA 330
HEARING DATE(S):	10/08/2009
JUDGMENT DATE:	15 October 2009
JUDGMENT OF:	Allsop P at 1; Ipp JA at 2; Handley AJA at 3
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	TORTS - negligence - duty of care in utterance - defendant plaintiff's financial adviser - advice volunteered -duty of care existed. - MISREPRESENTATION - need not the sole cause of plaintiff's change of position - liability not excluded by other contributing causes. - MISREPRESENTATION – when representation continues.
CASES CITED:	Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179 ;96 ALR 354 at 363 Shaddock & Associates Pty Ltd v Parramatta City Council [No. 1] [1981] HCA 59, 150 CLR 225, 251, 255-6 San Sebastian Pty Ltd v The Minister [1986] HCA 68, 162 CLR 340, 355-6, 371-2 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8, 188 CLR 240, 249-50, 255, 261 Tepko Pty Ltd v Water Board [2001] HCA 19, 206 CLR 1, 16-7, 23 JEB Fasteners Ltd v Marks Bloom & Co [1983] 1 All ER 583 CA, 589 Gould v Vaggelas [1985] HCA 85, 157 CLR 215, 219, 236 Mutual Life and Citizens Assurance Co Ltd v Evatt [1968] HCA 74, 122 CLR 556, 571
PARTIES:	Samuel Mbakwe - Appellant Sam George Sarkis - Respondent
FILE NUMBER(S):	CA 40007/2009
COUNSEL:	Appellant: N Obrart Respondent: M K Rollinson
SOLICITORS:	Appellant: Keith Hurst & Associates Respondent: Benjamin Khoury Solicitors
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 159/2007
LOWER COURT JUDICIAL OFFICER:	Rolfe DCJ
LOWER COURT DATE OF DECISION:	11/09/2008