6
Professional and Management Liability Gazette
Issues
• Whether there had been
‘a substantial wrong or
miscarriage’
under r 51.53(1) of the
Uniform Civil
Procedure Rules 2005
(NSW).
• Whether HLB owed (or breached) a common law
duty of care to Mr Boorer.
• Whether Mr Boorer had suffered any loss.
Decision
At first instance
The trial judge dismissed both claims against HLB,
finding that there was no breach of a duty of care at
common law in respect of both strands of Mr Boorer’s
case. Her Honour also found that if there had been a
breach of duty in either respect, the breach caused no
loss.
In relation to the Form 484 issue, the trial judge found
that:
• there had been no breach of HLB’s duty of care
in the circumstances as HLB had followed Mr
Boorer’s instructions in lodging the Form 484;
• Mr Boorer would still have been disqualified for
one year as the AAT (who found in Mr Boorer’s
favour on the Form 484 issue) decided this was
the appropriate length of disqualification given
the nature of Mr Boorer’s other conduct. Mr
Boorer adduced no evidence to show that he was
denied income by reason of his effectively being
disqualified for an additional year due to ASIC’s
decision; and
• ASIC’s finding on the Form 484 issue would effect
the plaintiff’s reputation for honesty and integrity.
However, Mr Boorer had not demonstrated that he
had lost income as result.
On appeal
Mr Boorer appealed to the NSW Court of Appeal, who
unanimously upheld the trial judge’s decision. The
Court of Appeal refused Mr Boorer leave to contest the
trial judge’s findings on the insolvent trading point for
a procedural issue. Further, it unanimously upheld the
trial judge’s decision in relation to the Form 484 issue.
In relation to the trial judge’s finding that no damages
were proven to flow from HLB’s alleged breach,
Leeming JA found that:
• if Mr Boorer’s income were dependent upon his
being able to be a company director, the additional
year’s disqualification would matter. However, Mr
Boorer provided no evidence that he was denied
income by reason of his being disqualified for an
additional year;
• the fact of the disqualification, rather than its
length or the reasons for it, was critical to Mr
Boorer’s reputation and Mr Boorer would have
been disqualified whether or not the Form 484
was erroneously lodged; and
• no evidence was lead by Mr Boorer to contest the
trial judge’s finding that his work was not affected
by the disqualification.
Leeming JA went on to consider a number of other
matters the subject of the appeal and provided
some interesting commentary in relation to the trial
judge’s finding that there was no breach of duty in
the circumstances where Ms von-Lucken followed Mr
Boorer’s instructions.
In disagreeing with the trial judge’s conclusion,
Leeming JA observed that it was obvious that Ms
von-Lucken was in breach of the Act in lodging the
Form 484 knowing that written consents for two of the
directors and the secretary had not been obtained.
Leeming JA stated that:
• if Ms von-Lucken believed that Mr Boorer was
aware of the parts of theAct that would be breached
by lodging the Form 484 and he nevertheless
instructed her to do so, then while she would still
be in breach of the Act, she would not be liable to
him for breach of a duty at common law; and
• where, however, it was clear to Ms von-Lucken
that Mr Boorer was ignorant of the obligations
imposed under the Act, Leeming JA
‘would not
lightly accept’
that merely following Mr Boorer’s
instructions discharged her common law duty
of care to duty him. Indeed, one of the reasons
Techontap engaged HLB was to take reasonable
care to ensure compliance with the Act.
Despite the above comments, it was not necessary to
explore the breach of duty issue further given that no
loss was found to flow from it.
