Commonwealth Bank of Australian v Hamilton [2012] NSWSC 242

Supreme Court New South Wales

Medium Neutral Citation: Commonwealth Bank of Australian v Hamilton [2012] NSWSC 242 Hearing dates: 27 September 2010; 28 September 2010; 29 September 2010; 30 September 2010; 5 October 2010; 6 October 2010; 21 March 2011; 22 March 2011; 23 March 2011; 24 March 2011; 25 March 2011; 30 May 2011; 31 May 2011; 1 June 2011 Decision date: 14 March 2012 Before: Price J Decision: (1)Verdict and judgment for the first defendant (Jason Hamilton) against the plaintiff (the bank). (2)Verdict and judgment for the second defendant (Karen Hamilton) against the plaintiff (the bank). (3)Verdict and judgment for the plaintiff (the bank) against the third defendant (Peter Webb) in the sum of $497,056.00 (4)The cross-claims of the cross-claimants (Jason Hamilton and Karen Hamilton) against the cross-defendant (Peter Webb) are dismissed. (5)Verdict and judgment for the cross-defendant (LawCover) in the second-cross claim against the cross-claimant (Peter Webb). Catchwords: CONTRACTS - loan contracts and mortgages - fraud of investment consultant - loans approved on fraudulent financial information - forgery of signatures on loan documents and mortgage - loans approved on consideration in contracts of sale without external valuation - consideration reduced by deeds of variation - settlement moneys obtained by solicitor's direction to bank - surplus of settlement moneys transferred to fraudulent agent - whether borrowers liable to the bank - BREACH OF WARRANTY OF AUTHORITY - whether solicitor dishonest - whether warranty of authority breached - whether cause of action available to the bank - CAUSATION - whether Civil Liability Act applies - whether contributory negligence is a defence to breach of warranty of authority - whether proportionate liability applicable - damages Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth) Civil Liability Act 2002 s 5, s 5D, s 5E, s 34, s 34(1) Civil Procedure Act s 100 Contracts Review Act 1980 Conveyancing Act 1919 s 38 Fair Trading Act 1987 The Law Reform (Miscellaneous Provisions) Act 1965 s 8, s 9 Trade Practices Act 1974 (Cth) Cases Cited: Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Black v Smallwood (1966) 117 CLR 52 Beach Petroleum NL v Abbot Tout Russell Kennedy (1999) 48 NSWLR 1 Booksan Pty Ltd v Wehbe [2006] NSWCA 3 Boulas v Angelopolous 5 BPR NSW (SC) 11,477 Brownett v Newton (1941) 64 CLR 439 Caltex Oil (Australia) Pty Ltd v The Dredge Willemstead (1976) 136 CLR 529 Collen v Wright (1857) 8 EI BI 647; 120 ER 241 CSG Limited v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335 Essington Investments Pty Ltd & Ors v Regency Property Pty Ltd [2004] NSWCA 375 Fisher v Rummey [1911] Tas SR 104 Firbank's Executors v Humphrey's 18 QBD 54 Galea v Bagtrans Pty Ltd [2010] NSWCA 350 Heald v O'Connor [1971] 1 WLR 497; 2 All ER 1105 In re Evans, ex parte Jones [1911] Tas SR 122 In re Vince, Curator of Intestate Estates v Kile [1911] Tas SR 33 Jones v Dunkel [1959] HCA; (1959) 101 CLR 298 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 27 ALR 375 Lakeman v Mountstephen (1874) LR 7 HL 17 Lee v Irons [1958] VR 436 Leggo v Brown & Dureau Ltd (1923) 32 CLR 95 Mallesons Stephen Jaques v Trenorth Ltd [1999] 1 VR 727 Medlin v State Government Insurance Commission (1995) 182 CLR 1 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Nguyen v Taylor (1992) 27 NSWLR 48 Perpetual Trustees v Tsai [2004] NSWSC 75 Perpetual Trustees Victoria Limited v English & Anor [2010] NSWCA 32; (2010) 14 BPR 27, 339 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 Polkinghorne v Holland (1934) 51 CLR 143 Rogers v Resi-Statewide Corporation Limited and Others (No 2) (1991) 32 FCR 344 Starkey v Bank of England [1903] A.C 114 Strangas v Young (1975) 1 BPR 9123 Vukmirica v Betyounan [2008] NSWCA 6 Wynn Tresidder Management v Barkho [2009] NSWCA 149 Yonge v Toynbee [1910] 1 KB 215 Texts Cited: Carter, Contract Law in Australia, 5th ed, (2007) Bowstead & Reynolds On Agency (17th Ed) Dal Pont Law of Agency, 2nd ed, 2008 LexisNexis Butterworths Category: Principal judgment Parties: Commonwealth Bank of Australia Jason Hamilton Karen Hamilton Peter Webb Lawcover Insurance Pty Ltd Representation: Mr D A Smallbone & Ms L J Freiwald Mr K Ginges Mr D Lloyd Mr S R Donaldson SC & Mr G Ng Gadens Lawyers (Commonwealth Bank of Australia) A.Luong & Associates (Jason Hamilton, Karen Hamilton Tress Cox Lawyers (Peter Webb) Yeldham Price O'Brien Lusk (Lawcover Insurance Pty Limited) File Number(s): 2007/263396; 2007/263397