Mitchell Morgan Nominees Pty Ltd v Vella (No 2) - [2012] NSWCA 38

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Mitchell Morgan Nominees Pty Ltd & Anor v Vella & Ors (No 2) [2012] NSWCA 38
Hearing dates: On the papers
Decision date: 15 March 2012
Before: Macfarlan JA at [1]
Sackville AJA at [20]
Decision:
(1) Allow Mitchell Morgan's appeal in its proceedings against Hunt & Hunt.
(2) Set aside order 12 made on 3 July 2009 in the Supreme Court Equity Division proceedings numbered 4059 of 2006 and in lieu thereof enter judgment for Mitchell Morgan against Hunt & Hunt in the amount of $2,370,601.54.
(3) Set aside orders 13 and 15 made on 3 July 2009 in those Equity proceedings and in lieu thereof order Hunt & Hunt to pay Mitchell Morgan's costs of Mitchell Morgan's cross-claim against Hunt & Hunt.
(4) Order Hunt & Hunt to pay Mitchell Morgan's costs of the appeal proceedings between Mitchell Morgan and Hunt & Hunt.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
DAMAGES - torts - professional negligence - financial loss - interest component - appropriate date for quantification of damages
PROFESSIONS AND TRADES - solicitors - negligence - forged mortgage - loss of interest - scope of liability under s 5D Civil Liability Act 2002
Legislation Cited: Civil Liability Act 2002
Supreme Court Act 1970
Category: Consequential orders
Parties: Mitchell Morgan Nominees Pty Ltd (First and Second Appellants)
Hunt & Hunt Lawyers (Second Respondent)
Representation: Counsel:
B A Coles QC/S B Docker (Appellants Mitchell Morgan Nominees Pty Ltd)
J Stevenson SC/N Kabilafkas (Second Respondent)
Solicitors:
Mills Oakley (Appellants)
Mallesons Stephen Jaques (Second Respondent)

File Number(s): CA 2009/298381
Decision under appeal

Citation:

Vella v Mitchell Morgan Nominees Pty Ltd [2008] NSWSC 511

Vella v Australia and New Zealand Banking Group Ltd; Vella v Permanent Mortgages Pty Ltd; Mitchell Morgan Nominees Pty Ltd v Vella [2009] NSWSC 123
Vella v Australia & New Zealand Banking Group Ltd; Vella v Permanent Mortgages Pty Ltd; Vella v Mitchell Morgan Nominees Pty Ltd, 23 June 2009

Before:

Young CJ in Eq

File Number(s):

SC 3597/06, 4122/06, 4059/06

Judgment

MACFARLAN JA : Following the settlement of the issues between a number of parties to this appeal, judgment on the outstanding issues between the remaining parties (Mitchell Morgan Nominees Pty Ltd and Hunt & Hunt, solicitors) was delivered on 15 December 2011 ([2011] NSWCA 390). At the commencement of the hearing of the appeal, the Court as then constituted (Giles JA, Sackville AJA and myself) had referred certain issues relating to Hunt & Hunt's alleged liability to Mitchell Morgan to a bench of five judges comprising the three judges that I…

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.

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Details

Case: [2012] NSWCA 38
Decision Date: 15 March 2012

CaseChat Overview and Summary

In *Mitchell Morgan Nominees Pty Ltd v Vella (No 2)*, the New South Wales Court of Appeal considered an appeal by Mitchell Morgan Nominees Pty Ltd against Hunt & Hunt, a firm of solicitors, concerning damages awarded for professional negligence. The dispute arose from a forged mortgage transaction where Mitchell Morgan suffered financial loss.

The primary legal issue before the Court of Appeal was the appropriate date for the quantification of damages, specifically the interest component, in a claim for professional negligence against solicitors. This involved determining the scope of liability under section 5D of the *Civil Liability Act 2002* (NSW) for the loss of interest suffered by the plaintiff.

The Court of Appeal allowed Mitchell Morgan's appeal, finding that the trial judge had erred in the assessment of damages. The Court reasoned that the loss of interest should be calculated from the date the funds were advanced by Mitchell Morgan, as this was the point at which the negligence of Hunt & Hunt caused the financial detriment. The Court applied principles of causation and remoteness in assessing the damages, concluding that the loss of interest was a foreseeable consequence of the solicitors' negligence. Consequently, the Court set aside the previous orders and entered judgment for Mitchell Morgan against Hunt & Hunt for the sum of $2,370,601.54, along with orders for costs.

Orders

Orders of the court

(1) Allow Mitchell Morgan's appeal in its proceedings against Hunt & Hunt.

(2) Set aside order 12 made on 3 July 2009 in the Supreme Court Equity Division proceedings numbered 4059 of 2006 and in lieu thereof enter judgment for Mitchell Morgan against Hunt & Hunt in the amount of $2,370,601.54.

(3) Set aside orders 13 and 15 made on 3 July 2009 in those Equity proceedings and in lieu thereof order Hunt & Hunt to pay Mitchell Morgan's costs of Mitchell Morgan's cross-claim against Hunt & Hunt.

(4) Order Hunt & Hunt to pay Mitchell Morgan's costs of the appeal proceedings between Mitchell Morgan and Hunt & Hunt.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Mitchell Morgan Nominees Pty Ltd & Anor v Vella & Ors (No 2) [2012] NSWCA 38
Hearing dates:	On the papers
Decision date:	15 March 2012
Before:	Macfarlan JA at [1] Sackville AJA at [20]
Decision:	(1) Allow Mitchell Morgan's appeal in its proceedings against Hunt & Hunt. (2) Set aside order 12 made on 3 July 2009 in the Supreme Court Equity Division proceedings numbered 4059 of 2006 and in lieu thereof enter judgment for Mitchell Morgan against Hunt & Hunt in the amount of $2,370,601.54. (3) Set aside orders 13 and 15 made on 3 July 2009 in those Equity proceedings and in lieu thereof order Hunt & Hunt to pay Mitchell Morgan's costs of Mitchell Morgan's cross-claim against Hunt & Hunt. (4) Order Hunt & Hunt to pay Mitchell Morgan's costs of the appeal proceedings between Mitchell Morgan and Hunt & Hunt. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	DAMAGES - torts - professional negligence - financial loss - interest component - appropriate date for quantification of damages PROFESSIONS AND TRADES - solicitors - negligence - forged mortgage - loss of interest - scope of liability under s 5D Civil Liability Act 2002
Legislation Cited:	Civil Liability Act 2002 Supreme Court Act 1970
Category:	Consequential orders
Parties:	Mitchell Morgan Nominees Pty Ltd (First and Second Appellants) Hunt & Hunt Lawyers (Second Respondent)
Representation:	Counsel: B A Coles QC/S B Docker (Appellants Mitchell Morgan Nominees Pty Ltd) J Stevenson SC/N Kabilafkas (Second Respondent) Solicitors: Mills Oakley (Appellants) Mallesons Stephen Jaques (Second Respondent)
File Number(s):	CA 2009/298381
Decision under appeal	Citation: Vella v Mitchell Morgan Nominees Pty Ltd [2008] NSWSC 511 Vella v Australia and New Zealand Banking Group Ltd; Vella v Permanent Mortgages Pty Ltd; Mitchell Morgan Nominees Pty Ltd v Vella [2009] NSWSC 123 Vella v Australia & New Zealand Banking Group Ltd; Vella v Permanent Mortgages Pty Ltd; Vella v Mitchell Morgan Nominees Pty Ltd, 23 June 2009 Before: Young CJ in Eq File Number(s): SC 3597/06, 4122/06, 4059/06