Mutual Life & Citizens' Assurance Co Ltd v Evatt

The case of *Mutual Life & Citizens' Assurance Co Ltd v Evatt* concerned an appeal to the Privy Council from a decision of the High Court of Australia. The dispute arose from a claim by Mr Evatt against the Mutual Life & Citizens' Assurance Co Ltd (MLC) concerning advice provided by MLC's investment subsidiary, MLC Investments Ltd, regarding a proposed investment in a company called "The Australian Property Investment Company Limited" (APIC). Mr Evatt alleged that the advice given was negligent and that he suffered loss as a result.

The central legal issue before the Privy Council was whether MLC owed a duty of care to Mr Evatt in providing the investment advice. Specifically, the court had to determine whether the relationship between MLC and Mr Evatt was such that MLC was under a legal obligation to exercise reasonable skill and care in the advice it gave, or whether the advice was given in a purely social or informal context where no such duty would arise.

The Privy Council, in allowing the appeal, held that MLC did not owe a duty of care to Mr Evatt. Their Lordships reasoned that while MLC was in the business of providing investment advice, the advice given in this instance was not of a kind that would ordinarily attract a duty of care. The court distinguished this situation from cases where a professional person holds themselves out as possessing special skill and knowledge and is requested to exercise that skill for the assistance of another. In this instance, the advice was given by a subsidiary, and the relationship between MLC and Mr Evatt was not sufficiently proximate to establish a duty of care in negligence. The court applied the principles established in *Donoghue v Stevenson* and *Hedley Byrne & Co Ltd v Heller & Partners Ltd*, but found that the facts did not bring the case within the established categories of liability for negligent misstatement.

The Privy Council ordered that the appeal be allowed and the judgment of the High Court of Australia be set aside.