Simpson v Donnybrook Properties Pty Ltd

The appeal concerned a dispute arising from a loan agreement and related investment advice. The appellant, Mr. Simpson, was an accountant who had provided advice to the respondents, who were seeking to recover a loan and compensation for alleged breaches of fiduciary duty and breaches of the *Real Estate and Business Agents Act 1978* (WA). The primary judge had found Mr. Simpson personally liable to repay the loan and awarded equitable compensation.

The court was required to determine whether Mr. Simpson was personally liable for the loan, whether he owed fiduciary duties to the respondents as an investment advisor, and whether his actions constituted carrying on a business under the *Real Estate and Business Agents Act 1978* (WA) such that he was disentitled from receiving remuneration. The court also considered the application of limitation periods to the respondents' claims for equitable compensation and interest.

The Court of Appeal allowed the appeal, finding that the primary judge erred in inferring that Mr. Simpson had undertaken to act as an investment advisor to the respondents. The court held that the relationship was one of friendship and that Mr. Simpson's suggestions or advice related to a transaction in which he was involved, rather than a general undertaking of investment advice. Furthermore, the court found that the isolated transaction concerning two parcels of land did not amount to "carrying on a business" within the meaning of s 4 of the *Real Estate and Business Agents Act 1978* (WA), and therefore s 60 of that Act did not disentitle Mr. Simpson from receiving remuneration.

Consequently, the Court of Appeal set aside the orders made by the primary judge, dismissed the respondents' claim against Mr. Simpson, and dismissed the cross-appeal. The court ordered that the respondents pay Mr. Simpson's costs of the appeal and the cross-appeal.