Roberts v State Bank of New South Wales Ltd

Roberts (the appellant) brought proceedings against the State Bank of New South Wales Ltd (the respondent) in the Supreme Court of New South Wales. The dispute concerned the respondent's alleged breach of a duty of care owed to the appellant in relation to the provision of financial advice. The appellant sought damages for losses allegedly suffered as a result of relying on this advice. The matter proceeded to the High Court of Australia on appeal.

The central legal issue before the High Court was whether the respondent owed a duty of care to the appellant in providing financial advice, and if so, the scope of that duty and whether it had been breached. Specifically, the court had to consider whether the circumstances of the relationship between the appellant and the respondent gave rise to a duty to advise the appellant on the financial viability of a proposed investment, beyond merely facilitating a transaction.

The High Court, in allowing the appeal, held that the respondent did owe a duty of care to the appellant. Their Honours reasoned that the relationship between a bank and its customer, particularly when the bank undertakes to provide financial advice, can create a situation of vulnerability for the customer. In such circumstances, the bank may be required to exercise reasonable care and skill in the provision of that advice, including advising on the risks and viability of proposed investments. The court found that the respondent had failed to discharge this duty, leading to the appellant's losses.

The High Court ordered that the appeal be allowed, the judgment of the Full Federal Court be set aside, and the matter be remitted to the Supreme Court of New South Wales for determination of the quantum of damages.