Dominic v Riz [2009] NSWCA 216

Dominic v Riz [2009] NSWCA 216

The appeal was allowed because Ms Jajoo was retained to advise on the loan and mortgage transaction, not the underlying KSE investment; she did not know the details of that investment, but knew the clients appreciated it was a big risk, and clearly advised them that they needed independent legal and financial advice. She was reasonably entitled to conclude that they understood that advice, and her duty did not require her to form or express a view on the fairness or providence of the underlying investment. In any event, the respondents did not prove on the balance of probabilities that stronger advice from her would have caused them to seek independent advice or not proceed. The fiduciary...

Jurisdiction
Australia
Judgment Date
29 July 2009
Procedural Posture
Appeal From Orders in a Professional Negligence and Breach of Fiduciary Duty Claim Against Solicitors / Court of Appeal Judgment
Outcome
Appeal allowed.
Legal Topics
["solicitor's Duty of Care" 'scope of Retainer' 'mortgage and Loan Advice' 'independent Legal and Financial Advice' 'causation' 'fiduciary Duty' 'conflict of Duty and Duty']
['torts' 'professional Negligence' 'legal Practitioners' 'equity'] ["solicitor's Duty of Care" 'scope of Retainer' 'mortgage and Loan Advice' 'independent Legal and Financial Advice' 'causation' 'fiduciary Duty' 'conflict of Duty and Duty']

Case Brief

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Procedural Posture

Appeal From Orders in a Professional Negligence and Breach of Fiduciary Duty Claim Against Solicitors / Court of Appeal Judgment

Legal Issues

  1. 1 ["Whether the solicitor's advice that the clients should seek independent legal and financial advice about the proposed investment was adequate in the circumstances." 'Whether the solicitor was reasonably entitled to believe that the clients understood the advice to seek independent legal and financial advice about the proposed investment.' 'Whether a solicitor retained by a borrower/mortgagor is required to give consideration to the purpose of the loan and the reasonableness or providence of the transaction, including the proposed application of loaned funds.' "Whether there was a causal connection between any alleged failure to provide adequate advice and the clients' investment in the high risk investment." 'Whether the solicitors breached fiduciary duties by reason of alleged conflicts arising from connections with Karl Suleman or his entities.']

Ratio Decidendi

The appeal was allowed because Ms Jajoo was retained to advise on the loan and mortgage transaction, not the underlying KSE investment; she did not know the details of that investment, but knew the clients appreciated it was a big risk, and clearly advised them that they needed independent legal and financial advice. She was reasonably entitled to conclude that they understood that advice, and her duty did not require her to form or express a view on the fairness or providence of the underlying investment. In any event, the respondents did not prove on the balance of probabilities that stronger advice from her would have caused them to seek independent advice or not proceed. The fiduciary...

Court Disposition

Appeal allowed.

Orders

  • ['Appeal allowed.' 'Set aside the orders made on 13 and 29 November 2007 against the appellants as third, fourth and fifth defendants and in lieu thereof order judgment for the third, fourth and fifth defendants with costs.' "Respondents pay the appellants' costs of the appeal." 'Direct any application by the...