Unit 11 Pty Ltd v Sharpe Partners Pty Ltd [2005] FCA 635

Unit 11 Pty Ltd v Sharpe Partners Pty Ltd [2005] FCA 635

The chain of causation alleged by the applicant is too speculative and conjectural, failing to establish that the auditors’ breach was a legal cause of the losses suffered. The breach may have provided the opportunity for loss but did not cause the loss in the required legal sense. Applying common sense and established legal principles, the causation claim is clearly untenable and must be struck out.

Jurisdiction
Australia
Judgment Date
20 May 2005
Procedural Posture
Summary Application to Strike Out / Strike Out Application, Judgment
Outcome
statement of claim against second respondent struck out; leave to re-plead only as to alleged misappropriation
Legal Topics
['auditor Negligence' 'duty of Care' 'causation' 'strike Out Applications']
['tort' 'commercial Law'] ['auditor Negligence' 'duty of Care' 'causation' 'strike Out Applications']

Case Brief

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Procedural Posture

Summary Application to Strike Out / Strike Out Application, Judgment

Legal Issues

  1. 1 ['Whether the breach of duty by auditors caused the loss suffered by the applicant in the required legal sense' 'Whether the claim of causation is so speculative and conjectural that it should be struck out']

Ratio Decidendi

The chain of causation alleged by the applicant is too speculative and conjectural, failing to establish that the auditors’ breach was a legal cause of the losses suffered. The breach may have provided the opportunity for loss but did not cause the loss in the required legal sense. Applying common sense and established legal principles, the causation claim is clearly untenable and must be struck out.

Court Disposition

statement of claim against second respondent struck out; leave to re-plead only as to alleged misappropriation

Orders

  • ['Third amended statement of claim against the second respondent struck out' 'Applicant granted leave to deliver within 14 days a further amended statement of claim against the second respondent only as regards an alleged misappropriation' "Applicant to pay second respondent's costs of and incidental to the strike...