Notaras v Hugh

Notaras sued Hugh for professional negligence, claiming the latter had failed to apply for an injunction to prevent the sale of certain properties. The Federal Circuit Court of Australia was asked to consider several legal issues in this case. The first was whether Hugh was negligent in failing to apply for an injunction, given that the chance of success was not negligible. The second was whether the notices served under s57(2)(b) were invalid due to an error in the amount specified. The third issue was whether capitalised interest could be considered as "interest" for the purposes of the mortgage. The fourth was whether a clause in the mortgages satisfied the requirements of s58A and whether there was an available default not involving non-payment. The fifth issue was whether there was more than a negligible chance of obtaining an injunction on the ground of no effective power of sale or otherwise. Lastly, the court had to determine whether Notaras suffered a loss because no injunction was obtained.

The court found that while Hugh was not negligent in failing to apply for an injunction, as the chance of success was not more than negligible, Notaras had indeed suffered a loss because no injunction was obtained. The error as to the amount specified in the notices was not significant enough to invalidate them. Capitalised interest was not considered "interest" for the purposes of the mortgage, and the clause in the mortgages did not satisfy the requirements of s58A. There was no available default not involving non-payment. The court concluded that there was no more than a negligible chance of obtaining an injunction on the ground of no effective power of sale or otherwise. The court found in favour of Notaras and awarded damages.