The Broker and the Thief in the Night: Proportionate Liability Redefined

Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10

In Brief

• The High Court has, by majority, allowed an appeal regarding the principles of proportionate liability, overturning a decision of the Court of Appeal of New South Wales and criticising a previous decision of the Victorian Court of Appeal.
• The majority held that in circumstances where a loan was obtained by fraud and the mortgage that secured that loan was negligently drafted so as to render it ineffective, both the mortgage drafters and the fraudulent parties will have caused the same damage. The mortgage drafter will, therefore, be entitled to reduce its liability in line with proportionate liability.