Hunt & Hunt v Mitchell Morgan Nominees: proportionate liability – Pt 4 Civil Liability Act 2002 (NSW)

What constitutes a concurrent wrongdoer for the purposes of the proportionate liability provisions under the Civil Liability Act 2002 (NSW). In Hunt & Hunt v Mitchell Morgan Nominees [2013] HCA 10 (Hunt & Hunt) the High Court, with a 3:2 majority, answered this controversial question.

Factual background

Mr Caradonna and Mr Vella entered into a business venture and opened a joint bank account in late 2005. Mr Vella along with Mr Caradonna, obtained four certificates of title from his solicitors.

Mr Caradonna, without the knowledge of Mr Vella, took those certificates and used them to fraudulently obtain money from Mitchell Nominees. In order to perpetrate the fraud, Mr Caradonna’s identity was certified by his cousin, a solicitor named Mr Flammia.

Hunt & Hunt were the solicitors of Mitchell Nominees who drafted the loan agreement. They failed to include a covenant to repay a stated amount.

The High Court overturned the Court of Appeal decision in Mitchell Morgan Nominees Pty Ltd & Anor v Vella & Ors [2011] NSWCA 390, restoring the primary judgment that the solicitors, Hunt & Hunt were concurrent wrongdoers.

The High Court approach

To determine whether Hunt & Hunt were concurrent wrongdoers, the Court undertook the following two-step analysis:

(a) What is the loss or damage that is subject of the claim?
(b) Was there anyone else, other than Hunt & Hunt, whose act/s or omission/s also contributed to the loss or damage?

The majority held that Hunt & Hunt were concurrent wrongdoers, along with the two fraudsters (Mr Caradonna and Mr Flammia) and attributed the loss and damage, in accordance with the level of their individual concurrent wrongdoing. Hunt & Hunt was held to be only 12.5% liable.

The first question – loss or damage the subject of the claim

In the context of economic loss for the purposes of Pt 4 of the Civil Liability Act, loss or damage is the harm suffered to a plaintiff’s economic interests. The initial step in identifying this is an identification of the interest infringed by the negligent act/s. In this case, Mitchell Morgan’s interest and therefore loss, was its inability to recover the funds it advanced.

The Court referred to St George Bank Limited v Quinerts Pty Ltd (2009) 25 VR 666 where it was held that for the purposes of concurrent wrongdoing, the damage or loss caused by one concurrent wrongdoer must be the same as that caused by the other concurrent wrongdoers. The majority formed the view that it is not possible for concurrent wrongdoers to cause damage that is any other than the same damage for the purposes of s 34 (2).

Notably, s 34 (2) states:

(2) …. a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

Therefore, for concurrent wrongdoing, damage is not confined to type, but rather it must be damage which is the subject of the plaintiff’s claim. If the plaintiff claims loss or damage against all of the alleged concurrent wrongdoers, then the damage is subject of the claim.

Further, the High Court, referring to St George, also held that for the purposes of the Civil Liability Act, there was no “requirement that one wrongdoer contribute to the wrongful actions of the other wrongdoer in order that they cause the same damage” as propounded in that case.

The second question – causation

The majority found at par [53] that “the question is whether each of them, separately, materially contributed to the loss or damage suffered”. The notion of material contribution only requires that the act or omission be ‘a cause’ to the loss or damage and not ‘the’ cause of the loss or damage.

The underlying theme of the judgment was that in determining cause, one must be aware of the harm suffered by Mitchell Morgan, being the inability to recover the funds.

The Court validated Hunt & Hunt’s submissions that the mortgage was ineffective for two reasons:

  1. The loan agreement was void for which cause rests with the fraudsters;
  2. The mortgage instrument was inappropriately drafted, for which cause rests with Hunt & Hunt.

Both of the above causes contributed to the inability of Mitchell Morgan to recover the funds it advanced, and for this reason both the fraudsters and Hunt & Hunt were held to be concurrent wrongdoers.

With reference to policy considerations, it was found that Mitchell Morgan should not recover from Hunt & Hunt any more than that for which Hunt & Hunt is responsible, as found by the primary judge.


The majority took a liberal approach when interpreting the Civil Liability Act’s proportionate liability regime. Essentially, Mitchell Morgan’s claim against Hunt & Hunt was based on a different cause of action from its claim against the fraudsters, but was simultaneously founded on Mitchell Morgan’s inability to recover the monies advanced. For this reason, Hunt & Hunt were concurrent wrongdoers.


Professionals are often insured against liability and for this reason are usually the sole targets of legal action, despite the contribution of the wrong of others.
Under the common law, the risk lies with the defendant where a plaintiff can sue and recover his or her loss from one wrongdoer, leaving that wrongdoer to seek contribution from other wrongdoers. Under Pt 4 of the Civil Liability Act, the liability of a concurrent wrongdoer is limited to the proportion of the loss or damage they caused and it is irrelevant whether a concurrent wrongdoer is insolvent, wound up, ceases to exist or has died. As a result, it is necessary that plaintiffs sue all wrongdoers to recover the total loss. The risk of a possible failure to recover the whole of the claim has shifted to the plaintiff.

In light of the minority judgment, the case fails to deliver the clarity required in this sphere of legal interpretation. The task of determining concurrent wrongdoers remains laborious.

However, the case does shed light on a possible new era of liberal interpretation in this area. It is somewhat promising for insurers, where the emphasis has long been on the narrow construction of Pt 4 as propounded in St George. The more liberal approach serves the underlying policy considerations of the provisions and although identification remains difficult, the outlook appears positive for insurers.

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