Wakim v McNally

The appeal in Wakim v McNally arose from proceedings in the Federal Court of Australia concerning the conduct of the Official Trustee in Bankruptcy and his legal representatives. The appellant, Mr Wakim, claimed that the respondents were negligent in their handling of the bankruptcy proceedings of Mr Nader, the bankrupt, and in their advice to the Official Trustee. The respondents included the Official Trustee in Bankruptcy, HIH Casualty & General Insurance Ltd, and the solicitors Lobban McNally & Harney. The primary judge had ruled in favour of the respondents, finding no negligence on their part. The legal issues before the court were whether the respondents owed a duty of care to Mr Wakim and if so, whether they breached that duty. The court considered the nature of the duty of care owed by the solicitors, particularly Mr McNally, who had extensive experience in bankruptcy law. The court found that Mr McNally had indeed owed a high standard of care due to his expertise. However, it concluded that Mr McNally had not breached this duty as he had exercised his own judgment and discussed the advice given by another solicitor, Mr Darvall, with a colleague to assess its appropriateness.

The court's reasoning focused on the standard of care expected from a solicitor with Mr McNally's level of expertise. It acknowledged that Mr McNally's deference to Mr Darvall's advice was influenced by Mr Darvall's renowned expertise in the field. The court found that Mr McNally had sufficiently exercised his own mind on the advice and thus did not breach his duty of care. However, the court found the appeal to be allowed, setting aside the orders made by the primary judge and relisting the appeal for consideration of the further relief to which the appellant may be entitled. The respondents' submissions regarding the nature of the duty of care were considered despite their failure to file a notice of contention, as no objection was raised to their taking this course.