{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Esanda finance corporation ltd v peat marxick

Info iconThis preview shows pages 12–15. Sign up to view the full content.

View Full Document Right Arrow Icon
Esanda Finance Corporation Ltd v Peat Marxick Hungerfords (1997 affirms San Sebastian ) (Only interlocutory decision) FACTS: Esanda (large Co) lent money to Excell (private company) based on auditor reports produced by the defendant. Accountants were wrong, Excell couldn’t repay. Brennan CJ: Defendant needs to know/ought to know all of: o Info would be communicated to the P (as individual of class). o Info communicated for a purpose that would be ‘likely to lead plaintiff to enter into the transaction’. o Likely that plaintiff would enter into transaction in reliance on the statement and reliance must be reasonable . The fact that auditors knew who would see the reports insufficient. Lowe Lippman Figdor & Franck v AGC Ltd (1992) FACTS: AGC lent money to a company called Weaving Mill. Weaving Mill hired Lowe Lippman accountants to audit themselves. After the audit AGC looked at the report to decide whether to whether to make further loans to WM. The report was wrong. They loaned more, WM went bust. LL knew of AGC’s interest. HELD: No DOC. Where there are no other telling circumstances, a DOC will only arise if the defendant intended the plaintiff to act on the statements given. The auditor’s intention was only to fulfil their contractual obligation with WM.
Background image of page 12

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Policy - Auditors already face possible penalties in civil and criminal jurisdictions if the audit badly. - Imposing more liability is unlikely to promote a higher standard of care as there is already pressure. - Insurance would become prohibitively huge due to indeterminate liability – auditors will go out of business/have to charge more/business less likely to get audited. - Increase the number of long and complex trials. Burden on legal system. Statute - Trade Practices Act can be used as well. - Section 80: Can sue. - Section 51: Statements for future can give rise to liability. - Section 52: Misleading and deceptive conduct/trade and commerce (any professional doing something for a reward). - Only 3 years to bring action cf. CL = 6 years. - Lower standard than reasonable person. PURE ECONOMIC LOSS BY NEGLIGENT ACT - Same issue as PEL by statement = concern of indeterminate liability. - Took longer to overcome than statement cases. - No longer an exclusive rule that you can’t claim for PEL by negligent act. There will not always be a duty - it depends on the circumstances of the case. No clear test but use salient features approach. 13
Background image of page 13
3 Groups: 1. Damage to another’s property for which the plaintiff would have derived a benefit (Tasman Bridge example/ Caltex / Perry ). 2. Failure of a professional person to perform an undertaking/service properly for a third party ( Hill v Van Erp ). 3. Acquisition of buildings or goods that are defective but don’t cause personal or physical harm. Damage to Another’s Property for Which the Plaintiff Would Have Derived a Benefit 14 Caltex Oil Pty Ltd v The Dredge ‘Willemstad’ (HC 1976) FACTS: AOL would receive materials from Caltex through a pipeline owned by AOL (materials remained AOL’s until they arrived at Caltex). Dredge negligently severed the pipeline.
Background image of page 14

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page12 / 45

Esanda Finance Corporation Ltd v Peat Marxick Hungerfords...

This preview shows document pages 12 - 15. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online