Kayteal Pty Ltd v John Joseph Dignan & ors [2011] NSWSC 197

Supreme Court New South Wales

Medium Neutral Citation: Kayteal Pty Ltd v John Joseph Dignan & ors [2011] NSWSC 197 Hearing dates: Monday 26, Tuesday 27 and Thursday 29 July 2010 Decision date: 24 March 2011 Before: Brereton J Decision: Solicitors breached duty of care to mortgagee to advise of matters discovered or discoverable from usual inquiries which cast doubt on reliability of valuation. Solicitors' proportionately liable for 12.5% of mortgagee's loss. Cross-claim of solicitors for indemnity against concurrent wrongdoer not sustainable. Catchwords: SOLICITORS - Professional negligence - mortgages - general principles - duty and breach - solicitor's duty to mortgagee usually framed by retainer - general duty to exercise reasonable care in obtaining a valid and enforceable security - duty does not extend to advising on valuation of security - obligation to pass on information obtained in course of investigating title that may cause mortgagee to doubt correctness of valuation or bona fides of mortgagor - solicitors did not owe duty to ascertain creditworthiness of mortgagor - solicitors discharged duty to obtain a legally efficacious mortgage -solicitors failed to advise client of matters known or which ought to have been known from usual inquiries which would have caused client to doubt reliability of valuation -reasonably prudent and competent solicitor should have appreciated and advised that contrary to assumption stated in valuation land was subject to flooding

SOLICITORS - Professional negligence - mortgages - loss and damage - measure of damage and loss is difference between actual position of mortgagee and hypothetical position but for negligence of solicitors - claim for economic loss from failure to take reasonable care - apportionable claim under Civil Liability Act - proportionate liability of defendants as concurrent wrongdoers - responsibility derived from comparing blameworthiness and causative potency of conduct of alleged concurrent wrongdoers being borrower, valuer, finance broker and solicitors - where borrower fraudulent and valuer grossly negligent - solicitors responsibility assessed at 12.5%.