Riz v Perpetual Trustee Australia Ltd

The case involved Riz as the plaintiff and Perpetual Trustee Australia Ltd as the defendant. The dispute centred around a mortgage and loan contract, with Riz seeking to have the contract deemed unjust and seeking damages for professional negligence. The matter was heard in the Supreme Court of New South Wales. Riz argued that the loan was unjust as it was used for an improvident investment, and the lender was aware of the purpose but not the specific details or the risk. Additionally, Riz claimed that the lender's solicitor was negligent for not advising on the investment's risk despite being retained for advice on the mortgage and loan contract.

The primary legal issues the court had to decide were whether the mortgage and loan contract was unjust due to the improvident nature of the investment, and whether the lender's solicitor was liable for professional negligence. Specifically, the court had to consider whether the lender was aware of the particulars of the investment and whether it was unjust for them to fail to detect the false information provided by the borrowers' agent. Additionally, the court needed to determine whether the solicitor had or ought to have had knowledge of the extraordinary risk associated with the investment and if they were liable for failing to advise on it.

The court found that the lender was aware of the general purpose of the loan but not the specific details or the risk involved. The court held that it was not unjust for the lender to fail to detect the false information supplied to them, as they had considered and were satisfied that the loan was serviceable. The court also found that the solicitor was not liable for professional negligence as they were not retained to provide advice on the proposed investment, and the risk was not apparent or known to them. The court held that the suggestion that the solicitor should obtain independent legal and financial advice was sufficient.

The court dismissed the claims against both the lender and the solicitor. No orders were made in favour of the plaintiff.