Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25

Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25

Where an insurer enters into a mortgage insurance transaction in reliance on a negligent valuation, and but for the negligent valuation would not have insured, the valuer is liable for the whole of the loss suffered, including subsequent decline in the property value, unless loss would have occurred even if the...

Source-derived case information.

Jurisdiction
Australia
Procedural Posture
Appeal / High Court Judgment
Outcome
Appeal dismissed with costs
Legal Topics
['negligence' 'misstatement' 'valuation Liability' 'measure of Damages' 'causation' 'trade Practices' 'fair Trading']
['torts' 'contract' 'statutory Liability'] ['negligence' 'misstatement' 'valuation Liability' 'measure of Damages' 'causation' 'trade Practices' 'fair Trading']

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Procedural Posture

Appeal / High Court Judgment

Legal Issues

  1. 1 ['Is a negligent real estate valuer liable for the entirety of the lender insurer’s loss caused by market decline following negligent valuation?' "Does the scope of a valuer’s duty of care include loss caused by a subsequent fall in the property market, or is liability limited to 'the consequences of the valuation being wrong'?" 'How does causation and remoteness affect damages in tort, contract, and statutory claims based on negligent valuation?']

Ratio Decidendi

Where an insurer enters into a mortgage insurance transaction in reliance on a negligent valuation, and but for the negligent valuation would not have insured, the valuer is liable for the whole of the loss suffered, including subsequent decline in the property value, unless loss would have occurred even if the valuation were correct. The scope of liability is defined by the terms of engagement and parties' contemplation, not abstract legal limitation or remoteness. Accordingly, the appellants are liable for all of MGICA’s loss indemnified to Permanent Custodians.

Court Disposition

Appeal dismissed with costs

Orders

  • ['Appeal dismissed with costs']