RYBAK v SENNEH PTY LTD [1996] NSWCA 460

RYBAK v SENNEH PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY and BEAZLEY JJA and BROWNIE AJA

10 September 1996, 18 October 1996

[1996] NSWCA 460

PROFESSIONS AND TRADES — TORTS — CONTRACT.

PROFESSIONS AND TRADES — lawyers — solicitor and developer — contractor employed by developer — damage caused to adjoining property — owner claims against developer — solicitor retained to defend claim — developer tells solicitor it had no insurance — developer later realises indemnity available under contractor's policy — claims to reimbursement from solicitor of costs paid to solicitor — claim made on basis solicitor should have advised client developer of indemnity under the contractor's policy.

TORTS — negligence — duties and liability to client — duty to advise — trial judge holds solicitor had the means of knowing of developer's insurance.

ON APPEAL — whether duty arose for solicitor to notify client of policy before actual knowledge of cover by contractor's policy.

CONTRACT. basis and scope of solicitor's duty — retainer.

Appeal from his Honour Judge Mahoney QC.

HELD:

1. On question of basis and scope of the solicitor's duty in the circumstances: the solicitor's obligations to the developers arose from both the contractual retainer and the general law by reason of the relationship between them over and above the contractual relationship: Hawkins v Clayton (1988) 164 CLR 539 applied; Cousins v Cousins, CA 18 December 1990, unreported, Kirby P, Priestley and Meagher JJA referred to.

2. On the facts found by the trial judge, no duty of care arose obliging the solicitor to notify his client of its position in regard to insurance cover: the contractual relations between the parties did not directly raise any such obligation nor did the general non-contractual relationship. In the circumstances the solicitor was not liable: Carradine Properties Ltd v DJ Freeman and Co (English Court of Appeal) (1982) 126 Sol Jnl 157 referred to.