Rahme v Benjamin & Khoury Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Rahme v Benjamin & Khoury Pty Ltd [2019] NSWCA 211
Hearing dates: 12 June 2019
Decision date: 30 August 2019
Before: Bathurst CJ at [1];
Macfarlan JA at [2];
McCallum JA at [142]
Decision:

(1) Allow the appeal in respect of the dismissal of Mrs Rahme’s claim against Benjamin & Khoury Pty Ltd.

 

(2) Dismiss the appeal in relation to the rejection of Mrs Rahme’s claim against Mr Dieb Khoury.

 

(3) Direct that the parties lodge and serve, according to the following timetable, draft Short Minutes of Order and, if necessary brief written submissions, concerning the orders to be made to give effect to these reasons for judgment:

 

(i) Mrs Rahme by 5.00pm on 6 September 2019;

 

(ii) Benjamin & Khoury Pty Ltd and Mr Khoury by 5.00pm on 13 September 2019; and

 (iii) Any reply by Mrs Rahme by 5.00pm on 18 September 2019.
Catchwords:

EQUITY – fiduciary duties – whether fiduciary duties owed by a solicitor during negotiations for and steps taken to establish a solicitor/client relationship – breach – whether client gave fully informed consent to enter into agreements with solicitor – whether advice “independent” and “meaningful”

CIVIL LIABILITY – Civil Liability Act 2002 – defences of contributory negligence and proportionate liability not available in answer to claim for breach of fiduciary duties – claim arising “from a failure to take reasonable care” requires absence of reasonable care to be an element of the cause of action
Legislation Cited: Australian Consumer Law (NSW)
Civil Liability Act 2002 (NSW), ss 5A, 5R-T
Civil Procedure Act 2005 (NSW)
Contracts Review Act 1980 (NSW), s 16
Fair Trading Act 1987 (NSW)
Law Reform (Miscellaneous Provisions) Act 1965 (NSW), ss 8, 9
Legal Profession Act 2004 (NSW), ss 302A, 322
Cases Cited: ACQ Pty Ltd v Cook (2008) 72 NSWLR 318; [2008] NSWCA 161
Barnes v Addy (1874) LR 9 Ch App 244
Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30
Bray v Ford [1896] AC 44 at 51
Cassegrain v Cassegrain [2016] NSWCA 71
Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36
Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398
Commonwealth Bank of Australia v Smith (1991) 42 FCR 390
Farah Constructions v Say-dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64
Law Society of New South Wales v Foreman (1994) 34 NSWLR 408
Life Association of Scotland v Siddal (1861) 3 De GF&J 58
Maguire v Makaronis (1997) 188 CLR 449; [1997] HCA 23
Monaghan Surveyors Pty Ltd v Stratford Glen-Avon Pty Ltd [2012] NSWCA 94
Norberg v Wynrib (1992) 2 SCR 226
Perpetual Company Ltd v Milanex Pty Ltd (in liquidation) [2011] NSWCA 367
Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No 2) [2013] NSWCA 58
Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165
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Details
Case
[2019] NSWCA 211
Decision Date

CaseChat Overview and Summary

The appeal concerned a claim brought by Mrs Rahme against Benjamin & Khoury Pty Ltd and Mr Dieb Khoury, a solicitor. Mrs Rahme alleged that the solicitor and his firm had breached their fiduciary duties owed to her during negotiations for and the establishment of a solicitor-client relationship. The core of the dispute revolved around whether Mrs Rahme had given fully informed consent to enter into agreements with the solicitor, and whether the advice provided was independent and meaningful.

The Court of Appeal was required to determine whether the primary judge erred in dismissing Mrs Rahme's claim against Benjamin & Khoury Pty Ltd. It also had to consider whether the primary judge correctly rejected Mrs Rahme's claim against Mr Dieb Khoury. A key legal issue was the applicability of defences under the *Civil Liability Act 2002* (NSW), specifically contributory negligence and proportionate liability, to a claim for breach of fiduciary duties. The court examined whether a claim arising "from a failure to take reasonable care" under the Act necessitates the absence of reasonable care being an element of the cause of action.

The Court of Appeal allowed the appeal in respect of the dismissal of Mrs Rahme’s claim against Benjamin & Khoury Pty Ltd, finding that the primary judge had erred in this regard. However, the appeal was dismissed concerning the rejection of Mrs Rahme’s claim against Mr Dieb Khoury. The court directed the parties to lodge draft Short Minutes of Order and, if necessary, brief written submissions regarding the orders to be made to give effect to the judgment, with specific timelines provided for each party.

Orders

Orders of the court

(1) Allow the appeal in respect of the dismissal of Mrs Rahme’s claim against Benjamin & Khoury Pty Ltd.

(2) Dismiss the appeal in relation to the rejection of Mrs Rahme’s claim against Mr Dieb Khoury.

(3) Direct that the parties lodge and serve, according to the following timetable, draft Short Minutes of Order and, if necessary brief written submissions, concerning the orders to be made to give effect to these reasons for judgment:

(i) Mrs Rahme by 5.00pm on 6 September 2019;

(ii) Benjamin & Khoury Pty Ltd and Mr Khoury by 5.00pm on 13 September 2019; and

(iii) Any reply by Mrs Rahme by 5.00pm on 18 September 2019.

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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