Case: Ta Ho Ma Pty Ltd v Allen [1999] NSWCA 202 ; (1999) 47 NSWLR 1
Outcome: distinguished
support of the motions reliance was placed on the decision of the New South Wales Court of Appeal in Ta Ho Ma Pty Ltd v Allen [1999] NSWCA 202 ; (1999) 47 NSWLR 1. Senior counsel referred to what was said by Giles JA said at [17]: "So a valuer who puts out a negligent valuation does not incur an open ended liability to any and every financier who relies on it, even if it was reasonably foreseeable that the financer would rely on it. The particular financier may be outside the class of person to whom the valuer owes a duty to take care in making the statement in the valuation, in the same manner as Esanda was outside the class of persons to whom the auditors owed a duty of care on the case as pleaded in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1997] HCA 8 ; (1997) 188 CLR 241; the auditors owed a duty of care to the members of Excel, but not to Esanda." In Ta Ho Ma an owner of property obtained a valuation from the defendant. Some 81/2 months later the owner telephoned a solicitor (apparently not the owner's own solicitor) seeking a loan and advising of the valuation. The solicitor in turn contacted the plaintiff who advanced a loan on the basis of the defendant's valuation which by this time was 91/2 months old. The Court of Appeal held that the defendant owed no duty of care to the plaintiff because, having regard to the age of the valuation, there could be no expectation of reasonable reliance by the plaintiff: see per Handley JA at [12]-[14], per Giles JA at [18], [24], [28], per Sheppard AJA at [105]. The case is certainly not authority for any proposition that a valuer only owes a duty of care to the client who directly retains him or her. If that were the law, there would have been a short answer to the plaintiff's claim since the chain went from valuer defendant to owner to solicitor to lender plaintiff. On the facts, as Handley JA noted at [6], it was not a case where the valuer contemplated that a class of persons might rely on his valuation. Giles JA at [24] pointed out that where a valuer puts out a negligent valuation the class of persons to whom the duty of care "...will normally be confined, apart from any other considerations, to those persons whom the valuer knows or ought to know will reasonably rely on the valuation." (Emphasis in original) In other words, given expectation of reasonable reliance, there can be a duty owed by a valuer to a class of persons. The identification of that class will obviously depend on the circumstances. 23 Perre , a decision of the High Court handed down shortly after Ta Ho Ma, demonstrates the flexibility and pragmatism of the law of negligence in identifying the class of persons to whom a duty of care is owed in a particular case and the absence of any bright line rule: see per Gleeson CJ at [7]. It was held that the defendant, which brought infected seed potatoes on to a farm in South Australia, owed a duty of care to growers within 20 kilometres of the farm because such persons would be prevented by Western Australian law from exporting potatoes to that State. The plaintiffs "were members of a class whose members, whether numerous or not, were ascertainable by (the defendant)": per McHugh J at [50]. As I have said, it is arguable that in the present case there was an identifiable class constituted by clients of Boyds on whose behalf that firm was seeking the valuations in connection with some commercial dealing involving the specified properties. The disclaimers are not conclusive if, as a matter of fact, the valuers must be taken to have expected that such clients of Boyds would reasonably rely on the valuations. Otherwise, one might ask, what would be the point of obtaining the valuations? It was also argued that the allegations of reliance were "mere statements of conclusion". However reliance can be inferred from the representations contained in the valuations and the applicant's purchase of the properties: Gould v Vaggelas [1985] HCA 75 ; (1985) 157 CLR 215 at 230, Henderson v Amadio (No1) (1995) 62 FCR 1 at 166, Hanave Pty Ltd v LFOT Pty Ltd (1999) 43 IPR 545 at [45]. To the extent that such authorities deal with proof of reliance in the context of causation there is no logical ground why the reasoning should not apply where reliance is an element in the establishment of a duty of care. On behalf of Mantach it was submitted that the pleading "does not identify the qualities and standards by which it says that only 35.9 ha of Broadmoor was available for cropping". This seems to be a matter of evidence. In this context it would seem that pyrethrum is the kind of cropping referred to. The particulars of negligence are reasonably specific and do, contrary to the submissions on behalf of Mantach, identify the basis upon which it is alleged that the firm departed from the standard of care required of an expert in arriving at an opinion. In particular, it appears to be alleged that the valuers failed to independently check the cropping area and simply relied on the vendors. The motions will be dismissed with costs. Counsel for the applicant conceded that some formal amendments may be needed to the statement of claim. There will be leave to file and serve a further amended statement of claim within fourteen days. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey Associate: Dated: 17 August Counsel for the Applicant: M O'Farrell Solicitors for the Applicant: Ware &amp; Partners Counsel for the fourth Respondent: P Riordan SC Solicitors for the fourth Respondent: Phillips Fox Counsel for the fifth Respondent: I Faulkner SC and R W Pearce Solicitors for the fifth Respondent: Douglas &amp; Collins Date of Hearing: 8 August 2006 Date of Judgment: 17 August 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/1080.html