Allsop P at [1] Macfarlan JA at [9] Sackville AJA at [119]
Decision:
(1) Appeal of Provident Capital allowed.
(2) Set aside orders 1 and 4 and declarations 2 and 3 made at first instance on 28 October 2011.
(3) Judgment for Provident Capital for possession of the land comprised in Certificate of Title Folio Identifier 1/444075 being land at Leichhardt in the State of New South Wales.
(4) Dismiss Mrs Papa's cross-claim against Provident Capital.
(5) Order Mrs Papa to pay Provident Capital's costs of its proceedings against her at first instance and of Mrs Papa's appeal.
(6) Appeal of Mrs Papa against Mr Caramanlis allowed.
(7) Set aside orders 5 and 6 made at first instance on 28 October 2011.
(8) Judgment in favour of Mrs Papa against Mr Caramanlis for damages in an amount to be determined.
(9) If Mrs Papa and Mr Caramanlis are able to agree as to the amount of the damages to be awarded against Mr Caramanlis, direct those parties to file a form of consent order with the Court within seven days of the date of this judgment.
(10) If those parties are unable to so agree, direct that within 14 days of the date of this judgment Mrs Papa lodge written submissions on that topic, that Mr Caramanlis lodge written submissions in response within a further seven days and that Mrs Papa lodge any reply within a further seven days.
(11) Order Mr Caramanlis to pay Mrs Papa's costs at first instance of Provident Capital's claim against her and her claim against Mr Caramanlis.
(12) Mrs Papa and Mr Caramanlis are to have certificates under the Suitors' Fund Act 1951, if qualified.
[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:
TORTS - negligence - professional persons - solicitors - independent legal advice regarding financier's loan and security documents - whether penumbral duty of care beyond retainer - whether failure to advise of reality of financial risks was a breach of duty - whether failure to advise client to seek independent financial advice was a breach of duty - causation - whether breach of duty caused loss - whether client would have sought independent financial advice if advised to do so
CONTRACTS - Contract Review Act s 7 - whether loan agreements unjust - whether loan introducer an agent of the lender -whether breach of lender's credit manual - significance of asset lending - relevance of requirement…
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
AGLC
Provident Capital Ltd v Papa [2013] NSWCA 36
Case
[2013] NSWCA 36
Decision Date
CaseChat Overview and Summary
The New South Wales Court of Appeal, comprising Allsop P, Macfarlan JA, and Sackville AJA, considered an appeal by Provident Capital Ltd against orders made at first instance concerning a loan and security agreement. The dispute involved Mrs Papa, who had borrowed money from Provident Capital and received legal advice from Mr Caramanlis regarding the loan and associated security documents. Mrs Papa alleged that Mr Caramanlis had breached his duty of care as a solicitor, and that the loan agreements were unjust under the Contract Review Act.
The Court was required to determine whether Mr Caramanlis owed Mrs Papa a duty of care that extended beyond the formal retainer, specifically whether he failed to advise her of the reality of the financial risks associated with the loan and whether he breached his duty by not advising her to seek independent financial advice. Additionally, the Court considered whether the loan agreements were unjust within the meaning of the Contract Review Act, and whether the loan introducer acted as an agent for Provident Capital. Causation was also a key issue, namely whether any breach of duty by Mr Caramanlis caused Mrs Papa's loss, and whether she would have sought independent financial advice had she been advised to do so.
The Court of Appeal allowed Provident Capital's appeal, setting aside the orders and declarations made at first instance. It found in favour of Provident Capital for possession of the land and dismissed Mrs Papa's cross-claim against the company. However, Mrs Papa's appeal against Mr Caramanlis was allowed, with the Court setting aside the orders made against her in his favour and entering judgment for Mrs Papa against Mr Caramanlis for damages to be determined. The Court ordered Mrs Papa to pay Provident Capital's costs of the proceedings at first instance and of her appeal, and ordered Mr Caramanlis to pay Mrs Papa's costs at first instance.
Orders
Orders of the court
(1) Appeal of Provident Capital allowed.
(2) Set aside orders 1 and 4 and declarations 2 and 3 made at first instance on 28 October 2011.
(3) Judgment for Provident Capital for possession of the land comprised in Certificate of Title Folio Identifier 1/444075 being land at Leichhardt in the State of New South Wales.
(4) Dismiss Mrs Papa's cross-claim against Provident Capital.
(5) Order Mrs Papa to pay Provident Capital's costs of its proceedings against her at first instance and of Mrs Papa's appeal.
(6) Appeal of Mrs Papa against Mr Caramanlis allowed.
(7) Set aside orders 5 and 6 made at first instance on 28 October 2011.
(8) Judgment in favour of Mrs Papa against Mr Caramanlis for damages in an amount to be determined.
(9) If Mrs Papa and Mr Caramanlis are able to agree as to the amount of the damages to be awarded against Mr Caramanlis, direct those parties to file a form of consent order with the Court within seven days of the date of this judgment.
(10) If those parties are unable to so agree, direct that within 14 days of the date of this judgment Mrs Papa lodge written submissions on that topic, that Mr Caramanlis lodge written submissions in response within a further seven days and that Mrs Papa lodge any reply within a further seven days.
(11) Order Mr Caramanlis to pay Mrs Papa's costs at first instance of Provident Capital's claim against her and her claim against Mr Caramanlis.
(12) Mrs Papa and Mr Caramanlis are to have certificates under the Suitors' Fund Act 1951, if qualified.
[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.]