Townsend v Roussety & Co (WA) Pty Ltd

The case of Townsend v Roussety & Co (WA) Pty Ltd involved the appellants, who were financial investors, suing the respondents, a firm of accountants, for professional negligence and breach of fiduciary duty. The dispute arose from the respondents' alleged failure to provide proper advice and warnings regarding the risks and inadequacies associated with a loan transaction involving the appellants and a third party, Wilkins. The Supreme Court of Western Australia was tasked with determining whether the respondents had a contractual obligation to provide the appellants with professional services, and if so, whether this obligation was breached.

The primary legal issues before the court were whether a contract of retainer existed between the appellants and the respondents, the terms of any such contract, and whether the respondents had breached their duties under the contract. The court also had to consider whether the respondents had engaged in misleading or deceptive conduct under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (WA), and whether such conduct was a cause of the appellants' loss. Furthermore, the court had to determine whether the respondents owed a duty of care to the appellants in tort and whether any such duty was breached.

The court held that a contract of retainer was implied from the conduct of the parties, as the respondents had accepted responsibility for preparing the loan documents and both parties had relied on the respondents for professional advice. The court found that the respondents had breached their contractual obligations by failing to warn the appellants of the significant risks and inadequacies in the loan transaction. The court also found that the respondents had engaged in misleading or deceptive conduct by providing "half-truths" without disclosing the full extent of the risks involved. This conduct was held to be a cause of the appellants' loss. Additionally, the court determined that the respondents owed a duty of care to the appellants in tort, which was breached, and that the respondents also breached fiduciary duties by not acting in the best interests of the appellants.

The court ordered the respondents to pay damages to the appellants for the losses suffered as a result of the breach of contract, misleading or deceptive conduct, and breach of duty of care and fiduciary duties. The exact amount of damages was to be determined at a subsequent hearing.