Parker v Campos [2011] NSWSC 306

A lender sought possession of the borrowers’ home and a monetary judgment. The borrowers cross-claimed against their accountant for providing a false accountant’s letter relied upon to get the initial loan, which was then subsequently refinanced by the lender. The lender’s claim against the borrower was settled but the borrower succeeded in its claims against the accountant who did not defend the action and the damages to be awarded were the subject of this case.

Court’s findings
The court found that the borrowers had agreed to lend their daughter money secured by a mortgage of their home. The fraudulent broker arranged for an accountant to provide a false letter to a lender verifying the borrowers’ ability to service and repay the loan and then arranged a loan to the daughter and a loan to himself, both secured by a mortgage of the borrowers’ home. The court found the lender relied on the letter in advancing the monies and that the borrowers’ loss was caused by the accountant’s conduct. Neither the daughter nor the broker repaid their loans. The loans were then refinanced but the borrowers could not repay them.

Assessment of Damages
Damages under section 68(1) of the old Fair Trading Act 1987 were awarded against the accountant for the loss caused to the borrowers by his letter and comprised the value of the house, their removal costs to rental accommodation, their net housing cost increase taking account of their rental for each of the borrower’s life expectancy discounted at 3% to present value, loan refinance expenses, loan repayments made to the lender, and $10,000 each for distress, inconvenience and anxiety.

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