Henderson, R F & Ors v Amadio Pty Ltd & Ors (No. 1) [1995] FCA 1029

CATCHWORDS

TRADE PRACTICES - misleading and deceptive conduct - syndicate for purchase of office building with negatively geared vendor finance - representations as to value, as to increase in rent and capital value, as to ease of re-financing and as to sale of share with no further liabilities - whether representations false or made without reasonable grounds - whether reliance - whether representations made by accountants introducing investors to promoters - alleged representation by silence - whether disclosure of accountants' commission - whether vendor's estate agent's opinion of value held honestly or on reasonable grounds - whether accountants represented to clients good repute of promoters - whether contributory negligence a defence - whether estoppel, affirmation or election - whether damages limited to difference between price and market value at time of purchase - whether subsequent unexpected fall in market value recoverable - whether tax benefits to be taken into account - whether failure to mitigate loss by accepting refinancing proposal NEGLIGENCE - accountants retained to prepare cashflows for promoter of investment scheme - term of retainer that assumptions not be investigated - whether duty of care owed to purchasers NEGLIGENCE - promoters of investment scheme - statements as to value of building, increase in rent and capital value, ease of re-financing and sale of share with no further liabilities - whether duty of care - foreseeability and proximity

NEGLIGENCE - accountants - investment advice - introduction of clients to promoters of syndicate for purchase of office building with negatively geared vendor finance - non-disclosure of commission from promoter - whether adequate investigation - whether adequate advice as to risk NEGLIGENCE - solicitors - retainer - whether retained as conveyancing sub-contractors for promoters of syndicate for purchase of office building with negatively geared vendor finance - whether obligation to advise as to joint and several liability - whether obligation to advise as to lack of ratchet clause in lease NEGLIGENCE - estate agents acting for vendor - provision of valuation letter to promoters of syndicate - non-disclosure of role as vendor's agent - valuation - relevance of market history of property - whether opinion held honestly or on reasonable grounds - whether duty of care owed to purchasers - foreseeability and proximity REAL PROPERTY - valuation - evidence of market perceptions - application of rule in Spencer v Commonwealth - market performance of subject property CORPORATIONS - prescribed interest - syndicated for purchase of office building with negatively geared vendor finance - whether investment in partnership - financial or business undertaking or scheme - investment contract - invitation to public - offer to public - partnership exclusion - illegality - restitution - unjust enrichment EQUITY - Unconscionable conduct - vendor granting option to promoter of syndicate of purchasers - purchasers advised by solicitors and accountants - whether at special disadvantage EQUITY - restitution - sale of office building with mortgage back to vendor - breach of prescribed interest provisions - retention of benefits by purchasers - setting aside transactions - whether unjust enrichment CONTRIBUTION - liability for negligence and misleading and deceptive conduct - contribution under Wrongs Act - basis for assessing entitlement to contribution - causative potency and culpability DAMAGES - purchase of office building with negatively geared vendor finance - negligence and misleading and deceptive conduct of promoters, valuers, accountants and solicitors - whether damages limited to difference between price and market value at time of purchase - whether subsequent unexpected fall in market recoverable - whether tax benefits to be taken into account - whether failure to mitigate loss by accepting re-financing proposal INSURANCE - accountants' professional indemnity policy - advice to investors in property syndicate - non-disclosure of commissions - whether "conduct of professional business of chartered accountants - whether deliberate acts - whether investment in persons managed or controlled by insured - whether secret commission - whether corporate insured responsible - extension of policy to indemnify for acts of dishonesty by partners - whether contrary to public policy - retroactive date -excess WORDS AND PHRASES - "actual fraudulent or dishonest purpose and intent" - "active and deliberate fraud or dishonesty" - "operated or controlled" - "direct or indirect financial interest" - "retroactive date" ANZ Banking Group Ltd v Turnbull & Partners (1991) 106 ALR 115 ANZ Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 Armagas Ltd v Mundogas SA [1986] 1 AC 717 Arnotts & Ors Ltd v Trade Practices Commission (1990) 24 FCR 313 Attorney-General (NSW) v Australian Fixed Trusts Ltd [1974] 1 NSWLR 110 Australia and New Zealand Banking Group Ltd v Turnbull & Partners (1991) 106 ALR 115 Australian Softwood Forests Pty Ltd v Attorney-General (NSW) (1981) 148 CLR 121 Banco Exterior Internacional v Mann [1995] 1 All ER 936 Banfield v Wells-Eicke [1970] VR 481 Bank of New South Wales v Rogers (1941) 65 CLR 42 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 2 All ER 769 Barclays Bank Plc v O'Brien [1994] 1 AC 180 Barclay v Pearson [1893] 2 CH 154 Beresford v Royal Insurance Co Ltd [1938] AC 586 Blomley v Ryan (1956) 99 CLR 362 H L Bolton (Engineering) Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159 Briginshaw v Briginshaw (1938) 60 CLR 336 Browning v Morris (1778) 2 Cowp 790 Bryan v Maloney (1995) 128 ALR 163 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 Candler v Cane Christmas & Co [1951] 2 KB 164 Caparo Industries PLC v Dickman [1990] 2 AC 605 Carlton Cricket & Football Social Club v Joseph [1970] VR 487 C E Heath Underwriting & Insurance Pty Ltd v Campbell Wallis Moule [1992] 1 VR 386 CML v Producers and Citizens Co-operative (1931) 46 CLR 41 Commissioner of Taxation v Commonwealth Aluminium Corporation Ltd (1980) 143 CLR 646 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Commonwealth v Verwayen (1990) 170 CLR 394 Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 157 CLR 201 County Personnel (Employment Agency) Ltd v Pulver & Co [1987] 1 WLR 916 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226 Dare v Dobson (1959) 77 WN NSW 227 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Davis Acceptance Nominees Pty Ltd (unreported, 20 April 1994) Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Deposit & Investment Co Ltd v Kaye [1963] SR (NSW) 453 The Directors etc. of the Central Railway Company of Venezuela v Kisch (1867) 2 HLC 99 Duncan & Weller Pty Ltd v Mendelson [1989] VR 386 Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 Erikson v Carr (1946) 46 SR (NSW) 9 Fox v Everingham & Howard (1983) 76 FLR 170 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 Goldsbro v Walker [1993] 1 NZLR 394 Goold v Commonwealth (1993) 42 FCR 51 Gould v Vaggelas (1985) 157 CLR 215 Gray v Southouse [1949] 2 All ER 1019 Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547 Hawkins v Clayton (1988) 164 CLR 539 Haseldine v Hosken [1933] 1 KB 822 Hedley Byrne v Heller [1964] AC 465 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Hungerfords v Walker (1990) 171 CLR 125 Hurst v Vestcorp Ltd (1988) 12 NSWLR 394 Immer (No.145) Pty Ltd v Uniting Church (1993) 182 CLR 26 In re A Debtor [1927] 2 Ch 367 International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644