Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq)

The case of Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) involves Wingecarribee Shire Council and other plaintiffs suing Lehman Brothers Australia Ltd for alleged breaches of contract, negligence, and misleading and deceptive conduct in relation to financial investments. The dispute was heard in the Federal Court of Australia.

The primary legal issues the court needed to decide were whether Lehman Brothers owed a duty of care to the plaintiffs, if it breached that duty, and if it engaged in misleading and deceptive conduct. Further, the court had to determine whether the disclaimers in the written contracts excluded liability for negligence, and if Lehman Brothers breached its fiduciary obligations to the plaintiffs. The court also needed to address the principles for measuring damages in these types of cases.

The court found that Lehman Brothers did owe a duty of care to the plaintiffs and breached that duty by not providing adequate advice and by recommending investments that were not suitable for the plaintiffs. The court held that the disclaimers in the written contracts did not exclude liability for negligence in the oral statements made by Lehman Brothers. Additionally, the court determined that Lehman Brothers breached its fiduciary obligations by not disclosing the fees it earned from the investments and by not warning the plaintiffs about the risks associated with the investments. The court found that Lehman Brothers engaged in misleading and deceptive conduct by making representations that were not consistent with the disclaimers in the written contracts.

The court concluded that the appropriate measure of damages in this case was the difference between the price paid for the securities and their true value, rather than the 'left in hand' test. The court also found that the plaintiffs were not contributorily negligent in this case.

The court made orders for the parties to prepare and exchange minutes of orders, submissions on any disagreements, and reply submissions. The proceedings were then stood over to allow for the making of orders based on the court's reasons.