This is a case of a negligent valuation of a property provided as security for a loan, where there were three contributory lenders.
The court held the valuation contravened s52 of the Trade Practices Act 1974 (Cth) and s56 of the Fair Trading Act 1987 (SA). This made it unnecessary to consider the claims in contract and tort and the effect of disclaimers.
The court found reliance because had the valuation been correct, no loan would have been made because the LVR would have been breached. The lender was held 25% contributory negligent (s82(1B)) for failing to make proper enquiries about the borrowers’ ability to service the loan.
The court rejected a failure to mitigate argument as it was based on the sale of the property being left in the owner’s hands where a reputable agent had been appointed. The court also rejected that the borrowers were concurrent wrongdoers in providing false information about their net asset position because there was no clear evidence that the information was false or that the applicant relied on that information to make the loan.
The court rejected a late amendment to the defence to argue that one of the lenders was a concurrent wrongdoer in relation to the other two because they relied on the first to carry out proper due diligence, citing Aon Risk Services Australia Limited v Australian National University  HCA 27.
The court also held that the valuer could be liable for the entire shortfall in the recovery of the loan, not just the difference between what was lent and what would have been lent on a correct valuation, on the basis that the report recommended the property as suitable security both at the time of the valuation and after (quoting a forced sale value), bringing it within the type of case considered by the High Court in Kenny and Good. If as a valuer you want to eliminate damages attributable to a fall in the market, then you need to remove any general recommendation as to the suitability of the security in the report and limit the time at which the valuation operates.
The applicants were held entitled to loss of opportunity damages in relation to the lost commercial opportunity, being the interest and fees it would have made had it been able to lend to other borrowers. The lack of evidence of a particular transaction foregone is not fatal on the authority of La Trobe v Hay.