GIOURTALIS & Anor v VAITSIS [2006] NSWCA 371

Reported Decision : (2006) Aust Torts Reports 81-870

New South Wales Court of Appeal

CITATION: GIOURTALIS & Anor v VAITSIS [2006] NSWCA 371

HEARING DATE(S): 6 July 2006

JUDGMENT DATE: 20 December 2006

JUDGMENT OF: Mason P at 1; Hodgson JA at 82; Ipp JA at 92

DECISION: Appeal allowed.

CATCHWORDS: Negligence - misleading and deceptive conduct - accountant's representations inducing plaintiff to lend money - causation - whether release of debt in favour of taking up worthless shares was the cause of loss (ND)

PARTIES: Angelos GIOURTALIS & Anor John VAITSIS

FILE NUMBER(S): CA 40966/05

COUNSEL: Appellants: J Gleeson SC/ S Golledge Respondent: C A Fairbairn (Solicitor)

SOLICITORS: Appellant: The Argyle Partnership, Sydney Respondent: Colin Daley Quinn, Kogarah

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 8231/02

LOWER COURT JUDICIAL OFFICER: Balla DCJ

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40966/05

MASON P HODGSON JA IPP JA

Wednesday 20 December 2006

GIOURTALIS & ANOR v VAITSIS JUDGMENT 1 MASON P: The respondent is a young man who lost a lot of money lent to persons associated with a business known as The Souvlaki Beachfront Bar ("the Bar") at Brighton Le Sands. It was owned at various times by one or both of Mr Angelos Klimis and Mr Angelos Gourmanis ("the Bar owners") until December 1999 when it was transferred to a company called AAANG Holdings Pty Limited ("AAANG") in which the respondent was given a fifty percent shareholding in circumstances referred to below. AAANG later transferred the business away and was subsequently wound up with no return to shareholders. 2 The first appellant ("the accountant") is an accountant and finance broker and the second appellant is the corporate vehicle through which he conducts his practice. In the District Court there was judgment against the two appellants jointly and severally in the sum of $417,753 and (additionally) against the second appellant in the sum of $12,572. There were various causes of action, but in essence the appellants were held to have given negligent advice in breach of their retainer and to have made misleading and deceptive statements in consequence of which the respondent lost his money. The respondent's principal claims against the Bar owners themselves were dismissed, because he had released them from liability by a Deed entered into in December 1999 on the advice of the appellants. 3 The Notice of Appeal and written submissions of the appellants raised a scattergun of factual and legal issues. Many were hopeless in light of the documentary evidence and even clearer adverse credibility findings by Balla DCJ. The submissions also raised interesting questions about the proper use of fiduciary principles in the particular context.