In Hunt & Hunt v Mitchell Morgan Nominees the High Court went a long way towards clarifying when a claim is ‘apportionable’ under the apportionment legislation which is typical throughout Australia. The test is whether the loss arises from a failure to take reasonable care.
That case was about solicitors who prepared security documents for a lender which advanced money, secured by real estate, to people who turned out to be fraudsters. The security documentation was deficient and so the security could not be enforced against the real estate. That was a loss arising from a failure to take reasonable care. The solicitors were liable, but the High Court agreed that the claim was apportionable against the fraudsters who were ‘concurrent wrongdoers’ because, in terms of the legislation, they had also caused the loss. The loss was the lender’s inability to recover the amount of the loan.
In a recent NSW Court of Appeal case, a woman successfully sued her husband’s solicitors who had acted in the sale of the jointly-owned marital home following the breakdown of the marriage. The solicitors had paid all of the proceeds of sale to the husband, whereas some belonged to the wife, and the husband had refused to hand over her share.
The Court decided that the claim against the solicitors was not apportionable against the husband because:
- the loss caused by the solicitors (loss of the entitlement which the wife had to the proceeds of sale as a joint owner of the property) was different to the husband’s failure to pay the wife in accordance with an order made in the Family Court. So the husband had not caused the same loss, which is a prerequisite for apportionment;
- in any case, the husband had not ‘caused’ the solicitors to fail in their duty to the wife;
- the husband owed no duty of care to his wife and so had no liability to her for damages. It is inherent in the notion of ‘concurrent wrongdoer’ that the plaintiff has, or had, a good ‑ albeit not necessarily recoverable ‑ cause of action sounding in damages against the alleged concurrent wrongdoer.
In our view the first ground arguably conflicts with the High Court decision. The High Court found that, in effect, the loss was loss of the money, however described.
The third point is an interesting gloss on the apportionment legislation, but appears to be consistent with previous decisions.
Trajkovski v Simpson.
Two aspects of the apportionment legislation ‑ arising from a failure to take reasonable care and caused the damage or loss that is the subject of the claim ‑ continue to be explored on a case-by-case basis.