Gabriel v Little appeal

The Supreme Court held that, although BPE had been negligent in drafting a loan facility agreement, and that the claimant would not have made the loan but for that negligence (ie it was a "no transaction" case), they were not legally responsible for Mr Gabriel’s decision to make a loan. BPE’s duty was limited to providing certain information on one of many factors that Mr Gabriel would rely on in deciding whether to make the loan.

None of the loss which Mr Gabriel suffered fell within the limited scope of BPE’s duty. Instead, the loss arose from “commercial misjudgements” on the part of Mr Gabriel.

Key points:

• The Court reaffirmed the principles established in South Australia Asset Management Corpn v York Montague Ltd (SAAMCO), and clarified the distinction between the “advice” category and “information” category in no transaction cases.
• The Judgment serves significantly to confine the liability of solicitors for negligence in respect of cases falling within the “information” category.
• It is not clear from the judgment whether and if so how the so-called “SAAMCO Cap” might be applied in solicitors’ negligence cases where some, but not all, the claimed loss flows from a breach of the solicitors’ duty.

The Judgment can be found here.