Polon v Dorian [2014] NSWSC 571

Supreme Court New South Wales

Medium Neutral Citation: Polon v Dorian [2014] NSWSC 571 Hearing dates: 25-28 March 2013; 2 April 2013; 3 May 2013 Decision date: 13 May 2014 Jurisdiction: Common Law Before: Hall J Decision: (1) Subject to the leave referred to in [912], I propose to enter judgment in favour of the plaintiff against the second and fourth defendants in accordance with these reasons for judgment. (2) The parties are to bring in Short Minutes of Order to give effect to this judgment and any agreed orders as to interest and costs. (3) The proceedings will be re-listed on Tuesday, 20 May 2014 at 2.00pm for the purpose of orders (1) and (2) above. Catchwords: COMMON LAW - negligence - negligent misstatement by solicitor - misleading and deceptive conduct - breach of s 42 of the Fair Trading Act 1987 (NSW) - representations made concerning operation of an investment scheme and alleged safeguards in place for investors' funds - representations made by proponents of the investment scheme and their solicitor - absence of a disclaimer - defendant solicitor in making representations was not a mere conduit - continuing duty to inform the plaintiff prior to investment of funds in the scheme - failure to exercise reasonable care - failure by defendant solicitor to verify the accuracy of the representations - representations induced the plaintiff to make the investments - plaintiff's reliance on representations was reasonable - defendant solicitor owed a duty of care to the plaintiff - defendant solicitor drafted the investment contracts on behalf of both parties, provided services and, in securing investors' funds used for bridging finance to third parties, drafted and completed mortgages and caveats - defendant solicitor was available to answer plaintiff's questions in relation to the investments - professional negligence - implied retainer existed between the plaintiff and the defendant solicitor - breach of fiduciary duty - defence of contributory negligence not established - proportionate liability in accordance with Part 4 of the Civil Liability Act 2002 (NSW) - principles and approach in application of the statutory proportionate liability regime - causes of action in negligence, breach of s 42 of the Fair Trading Act 1987 (NSW) and breach of fiduciary duty predicated on and arising from failure of solicitor to take reasonable care - claim based thereon apportionable claim - assessment of respective degrees of responsibility of concurrent wrongdoers - apportionment of liability between concurrent wrongdoers - damages pursuant to s 1324(10) of the Corporations Act 2001 (Cth) only available where an injunction is actually sought Legislation Cited: Civil Liability Act 2002 (NSW) Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth) Fair Trading Act 1987 (NSW) Cases Cited: Artistic Builders Pty Ltd v Elliot & Tuthill (Mortgages) Pty Limited [2002] NSWSC 16 Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6 Australian Energy Ltd v Lennard Oil NL [1986] 2 Qd R 216 Australian Securities and Investments Commission v Fuelbanc Australia Limited [2007] FCA 960 Australian Securities and Investments Commission v PFS Business Development Group Pty Ltd & Ors [2006] VSC 192 Australian Securities Investment Commission v Sydney Investment House Equities Pty Ltd (2008) 69 ACSR 1; [2008] NSWSC 1224 Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1 Blackmagic Design Pty Ltd v Overliese [2011] FCAFC 24; (2011) 191 FCR 1 Booksan Pty Ltd v Wehbe [2006] NSWCA 3; (2006) Aust Torts Rep 81-830 Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Limited [2008] NSWCA 233 Breen v Williams (1996) 186 CLR 71 Briginshaw v Briginshaw (1938) 60 CLR 335 Brownlie v Campbell (1880) 5 AC 925 Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 Commonwealth v Cornwell [2006] ACTCA 7 Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216 Dean v Allin & Watts (a firm) [2001] EWCA Civ 758 Dungowan Manly Pty Ltd v McLaughlin [2012] NSWCA 180 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 Executor Trustee Australia Ltd v Deloitte Haskins Sells (1996) 22 ACSR 270 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gardam v George Wills & Co Ltd (No 1) (1998) 82 ALR 415 GE Capital Australia v Davis [2002] NSWSC 1146 George v Webb [2011] NSWSC 1608 Ghunaim v Bart [2004] NSWCA 28 Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186 Google Inc v Australian Competition and Consumer Commission (2013) 294 ALR 404; [2013] HCA 1 Gran Gelato Ltd v Richcliffe (Group) Ltd [1992] 1 All ER 865 Groom v Crocker [1939] 1 KB 194 Hawkins v Clayton (1988) 164 CLR 539 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] 2 All ER 575 Hendriks v McGeoch [2008] NSWCA 53 Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 Hill v Van Erp (1997) 188 CLR 159 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343; (2008) 77 NSWLR 205 McCullagh v Lane Fox & Partners Ltd [1995] EWCA Civ 8 McDonald v Grech; Bank of Western Australia Limited v McDonald [2012] NSWSC 717 Meerkin & Apel v Rossett Pty Ltd (1998) 4 VR 54 Meredith v Commonwealth (No 2) [2013] ACTSC 221 Midland Bank Trust Co Ltd v Hett Stubbs & Kemp (a firm) [1979] Ch 384 Mitchell Morgan Nominees Pty Ltd v Vella [2011] NSWCA 390 Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 Nocton v Lord Ashburton [1914] AC 932 Origin Energy LPG Ltd v BestCare Foods Ltd [2012] NSWCA 407 Pegrum v Fatharly [1996] 14 WAR 92 Permanent Trustee Australia Ltd v Perpetual Trustee Co Ltd (1994) 15 ACSR 722 Perpetual Trustee Company Limited & Anor v Peter Ishak [2012] NSWSC 697 Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529 Porter v OAMPS Ltd (2005) 215 ALR 327 Pritchard v DJZ Constructions Pty Ltd (2012) 16 BPR 31,141; [2012] NSWCA 196 Rawlinson & Brown Pty Ltd v Witham (1995) Aust Tort Rep 81-341 at 62,412-3 Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187 Rennie Golledge Pty Ltd v Ballard (2012) 82 NSWLR 231; [2012] NSWCA 376 San Sebastian Pty Ltd v Minister Administering Environmental Planning Act (1986) 162 CLR 340 Shrimp v Landmark Operations Limited [2007] FCA 1468; (2007) 163 FCR 510 St George Bank Ltd v Quinerts Pty Limited [2009] VSCA 245; (2009) 25 VR 666 Stringer v Flehr & Walker (a firm) [2003] QSC 370 Tepko Pty Ltd v Water Board (2001) 206 CLR 1 Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505 Waterhouse v Waterhouse (1998) 46 NSWLR 449 Watkins t/as Watkins Tapsell v De Varda [2003] NSWCA 242 Watson v Ebsworth & Ebsworth (a firm) (2010) 278 ALR 487 Watson v Foxman (1995) 49 NSWLR 315 World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 Yorke v Lucas (1985) 158 CLR 661 Texts Cited: GE Dal Pont, Lawyers' Professional Responsibility (4th ed, 2010, Lawbook Co) Category: Principal judgment Parties: Hazel Beverley Polon (Plaintiff) David Dorian (First Defendant) Renae Fowler (Second Defendant) Tiernan & Associates Lawyers Pty Ltd (Fourth Defendant) Representation: Counsel: C J Birch SC, M Vincent (Plaintiff) No appearance (First Defendant) D Priestley (Second and Fourth Defendants) Solicitors: TressCox Lawyers (Plaintiff) No appearance (First Defendant) HWL Ebsworth Lawyers (Second and Fourth Defendants) File Number(s): 2010/361702