ON 18 MARCH 1997, the High Court of Australia delivered Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) [1997] HCA 8; (1997) 188 CLR 241; (1997) 142 ALR 750; (1997) 71 ALJR 448 (18 March 1997) and Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159; (1997) 142 ALR 687; (1997) 71 ALJR 487 (18 March 1997).
Professional advisors will be liable for economic loss suffered by non-clients in cases where there has been a failure by the advisor to properly perform the duty (eg failing to ensure that audited accounts met accounting standards in Esanda; and failing to ensure that a will was validly signed in Van Erp).
ON 8 APRIL 1988, the High Court of Australia delivered Hawkins v Clayton [1988] HCA 15; (1988) 164 CLR 539 (8 April 1988).
A firm of solicitors was held to be negligent by failing to take reasonable steps to locate an executor (a non-client) following the death of a testatrix (a client whose will they prepared and retained for safe keeping) for some six years after the testatrix’s death. The solicitors were held to be liable to pay damages for the loss suffered by the executor (who was also a residuary beneficiary) in not being able to manage the estate during the period of delay.
The majority (Brennan, Deane and Gaudron JJ) held that the solicitors owed a tortious duty of care to the executor and that the action was not statute-barred.
SYDNEY SOLICITORS. ON 11 NOVEMBER 1968, the High Court of Australia delivered Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556 (11 November 1968).
The High Court of Australia first recognised liability for negligent misstatement.
Barwick CJ at 572 stated that there is a duty of care “whenever a person gives information or advice to another … upon a serious matter … and the relationship … arising out of the circumstances is such that on the one hand the speaker realizes or ought to realize that he is being trusted … to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to seek or accept and in either case to act upon that information and advice”.
SYDNEY LAWYERS. ON 11 NOVEMBER 1968, the High Court of Australia delivered Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556 (11 November 1968).
The High Court of Australia first recognised liability for negligent misstatement.
Barwick CJ at 572 stated that there is a duty of care “whenever a person gives information or advice to another … upon a serious matter … and the relationship … arising out of the circumstances is such that on the one hand the speaker realizes or ought to realize that he is being trusted … to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to seek or accept and in either case to act upon that information and advice”.
ON 11 NOVEMBER 1968, the High Court of Australia delivered Mutual Life & Citizens’ Assurance Co Ltd v Evatt [1968] HCA 74; (1968) 122 CLR 556 (11 November 1968).
The High Court of Australia first recognised liability for negligent misstatement.
Barwick CJ at 572 stated that there is a duty of care “whenever a person gives information or advice to another … upon a serious matter … and the relationship … arising out of the circumstances is such that on the one hand the speaker realizes or ought to realize that he is being trusted … to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to seek or accept and in either case to act upon that information and advice”.
A negligent, although honest representation, may give rise to an action for damages for financial loss even if there was no contract between the advisor and the advisee and no fiduciary relationship. The law will imply a duty of care when the advisee seeks information from the advisor who has a special skill and where the advisee trusts the advisor to exercise due care, and that the advisor knew or ought to have known that reliance was being placed upon his skill and judgment.
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