Roworth and Roworth v Mamet

SUPREME COURT OF QUEENSLAND

CITATION:

Roworth & Roworth v Mamet & Anor [2010] QSC 283

PARTIES:

MICHAEL JOHN ROWORTH and SILVANA MARIA ROWORTH
(plaintiffs)
v
JACQUE MAMET
(first defendant)
and
WEALTH ACCELERATION GROUP PTY LTD ACN 104 760 894
(second defendant)

FILE NO/S:

BS4774/09

DIVISION:

Trial Division

PROCEEDING:

Trial

DELIVERED ON:

5 August 2010; 12 August 2010

DELIVERED AT:

Brisbane

HEARING DATE:

24 – 27 May 2010

JUDGE:

Douglas J

ORDER:

Judgment for the plaintiffs for $321,323.78.1.   

costs, to be assessed on the indemnity basis.rder that the defendants pay the plaintiffs’ costs of and incidental to the proceeding, including reserved O2.   

CATCHWORDS:

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE - GENERALLY – where the plaintiffs sought investment advice from the defendants – whether actual level of plaintiffs’ income was communicated to the defendants – whether advice  negligent

Uniform Civil Procedure Rules 1999 r 360

Alderslade v Hendon Laundry Ltd [1945] KB 189, cited
Canada Steamship Lines v The King [1952] AC 192, cited
Davis v Pearce Parking Station Pty Ltd (1954) 91 CLR 642, cited
Duffy v Hepron Pty Ltd [2007] QSC 106, considered
Perre v Apand Pty Ltd 91999) 198 CLR 180, cited
San Sebastian Pty Ltd v The Minister (1986) 162 CLR 340, cited

COUNSEL:

M R Bland for the plaintiffs

P L Hanlon for the defendants

SOLICITORS:

QBM Lawyers for the plaintiffs

Morgan Conley Solicitors for the defendants

Introduction

[1]      In July 2005 the plaintiff, Mr Roworth, met the first defendant, Mr Mamet. Mr Mamet held shares in the second defendant, Wealth Acceleration Group Pty Ltd.  WAG was a company that promoted itself as the developer of a financial program that would help its clients build wealth, regain financial control and create tax efficiencies. Mr Mamet promoted himself as a qualified financial adviser, real estate agent, auctioneer and property developer with over 25 years experience.

[2]      At that stage, the plaintiffs were a young couple with a small child. They were asset rich but cash poor. They owned their house which was unencumbered and worth about $1,000,000. They had no debts but Mr Roworth’s gross salary was only about $39,000 per annum and Mrs Roworth had recently been retrenched from a job with a firm of architects. Her gross annual salary there was about $42,500 until her retrenchment.  Both plaintiffs later consulted the defendants and sought advice from them about investments they might make. 

[3]      Their complaint against the defendants is that they advised them to negatively gear themselves to achieve tax benefits by buying three properties costing more than $1 million where the expenses incurred by them exceeded the income they received as rent from the properties to an extent that was unsustainable compared to the level of their income from other sources.  They say that, eventually, they had to sell the properties and have claimed damages for negligence arising out of the transactions they entered…