Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors [2007] NSWSC 1153

Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors [2007] NSWSC 1153

The loan contract and mortgage were not unjust in the circumstances in which they were made; Perpetual did not engage in asset lending and properly assessed the loan for serviceability. However, the solicitors breached their professional duty by failing to bring home the apparent improvidence and high risk of the proposed investment to the borrowers; damages are payable for foreseeable loss resulting from such breach.

Jurisdiction
Australia
Judgment Date
18 October 2007
Procedural Posture
Civil / Final Judgment
Outcome
Plaintiffs' claims against first and second defendants dismissed; judgment for Perpetual Trustee Australia Ltd for outstanding loan balance and possession; judgment for damages against solicitors for breach of professional duty.
Legal Topics
['unjust Contracts' 'asset Lending' 'independent Legal Advice' 'fiduciary Duty' 'negligence' "solicitor's Duty" 'unconscionable Dealing']
['contracts' 'professional Negligence'] ['unjust Contracts' 'asset Lending' 'independent Legal Advice' 'fiduciary Duty' 'negligence' "solicitor's Duty" 'unconscionable Dealing']

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Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 ['Whether the loan contract and mortgage were unjust under the Contracts Review Act 1980' 'Whether Perpetual Trustee Australia Ltd engaged in unconscionable conduct' 'Whether the solicitors breached their professional duty to the borrowers by failing to warn of the risks of the proposed investment' 'Whether damages are payable by the solicitors for breach of duty']

Ratio Decidendi

The loan contract and mortgage were not unjust in the circumstances in which they were made; Perpetual did not engage in asset lending and properly assessed the loan for serviceability. However, the solicitors breached their professional duty by failing to bring home the apparent improvidence and high risk of the proposed investment to the borrowers; damages are payable for foreseeable loss resulting from such breach.

Court Disposition

Plaintiffs' claims against first and second defendants dismissed; judgment for Perpetual Trustee Australia Ltd for outstanding loan balance and possession; judgment for damages against solicitors for breach of professional duty.

Orders

  • ["Order that the plaintiffs' claims against the first and second defendants be dismissed." 'Judgment that the third, fourth and fifth defendants pay the plaintiffs damages calculated as specified.' 'Judgment that the plaintiffs/cross-defendants pay the first defendant/cross-claimant the outstanding balance of the...