Proportionate Liability

Smart v AAI [2015] NSWSC 392

A mortgage broker misappropriated his client’s funds which they had agreed to on-lend but never did and was found liable for breach of contract and false and misleading conduct. The court’s finding that the broker was liable in contract meant that the client’s loss was not at risk of being reduced by any proportionate liability …

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Hunt & Hunt v Mitchell Morgan Nominees [2013] HCA 10

This is the appeal from the NSW Court of Appeal decision Mitchell Morgan Nominees v Vella [2011] NSWCA 390. This is the first High Court case on the proportionate liability legislation. A fraudster forged a loan and mortgage, falsely witnessed by his lawyer cousin. The lender’s solicitors, Hunt & Hunt prepared the advance and negligently drafted …

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Perpetual v CTC [2013] NSWCA 58

The mortgage originator CTC was found liable to the funder for breaching its obligations of care under its mortgage origination deed. CTC had submitted a forged loan application and failed to verify the borrower. However owing to some confusion at trial, CTC’s claim that its liability was limited by the proportionate liability provisions under Part …

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Gippsreal Ltd v Hausfeld Johnson Pty Ltd [2012] FCA 956

A managed investment scheme loaned reliance on a rural NSW properties and suffered severe losses when the security proved to be worth much less than the valuations. The responsible entity of the scheme sued the valuer claiming misleading conduct and breach of contract. The valuer made a late application to plead that the officers (MD, …

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Perpetual Trustee Company Ltd v CTC Group [2012] NSWCA 252

CTC (as originator), submitted to Resimac (as manager), a forged application for a loan by Perpetual (as trustee) of $480,000. As required under the mortgage origination deed CTC verified the identity of the applicant, Mr David El-Bayeh. The loan was made and upon default proceedings were commenced for possession of the property. The trial judge …

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Valcorp Australia v Angas Securities [2012] FCAFC 22

The lender advanced $2.3m on a first mortgage on the basis of a $3.6m valuation. The lender ultimately the security for $1.7m. The first, second and third mortgagees all sued the valuer. The trial judge found the valuer was found guilty of misleading and deceptive conduct and negligent. The valuer had negligently treated another property …

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Pedulla v Fernando Panetta (No 2) [2011] NSWSC 1386

This case concerns costs awarded as part of compensation from the Torrens Assurance Fund. The history of the substantive proceedings are as follows. A brother fraudulently transferred his sister’s valuable northern beaches property to himself for $1, assisted by a fraudulent solicitor. The sister was in Italy with an order of nuns when this occurred. …

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Perpetual Trustee v Milanex [2011] NSWCA 367

A 74 year old man pensioner who spoke little English was hoodwinked into signing a mortgage. The money went to the fraudster and the court set aside the mortgage under the Contracts Review Act. The lender sued the mortgage broker alleging that the broker had verified the borrower’s identity and that the borrower was a …

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Kayteal v Dignan [2011] NSWSC 197

The lender relied on a valuation in entering into the mortgage. The valuation indicated the property was worth $1.2million when in fact it was only worth $52,000. The claim against the valuer settled. The lender then proceeded against the solicitor who acted for them on the advance. The solicitor had noticed inconsistencies between the property …

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Angas Securities v Valcorp Australia [2011] FCA 190

This is a case of a negligent valuation of a property provided as security for a loan, where there were three contributory lenders. The court held the valuation contravened s52 of the Trade Practices Act 1974 (Cth) and s56 of the Fair Trading Act 1987 (SA). This made it unnecessary to consider the claims in …

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