Simonius Vischer & Co v Holt & Thompson

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Citation: Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), p. 686-8 [27.150].

Contents

Background facts

  • The Plaintiff were a wool company. One of their departments was excessively buying wool without authority, losing $200,000 in the process.
  • The Plaintiff sued their auditors, the Defendant, who failed to alert the head office as to the operations of the department.
  • The Plaintiff also decided to hold on to their excessive contracts because they thought it would be the best way to minimise losses (based on market predictions). In fact, the market moved against them and they lost more money.

Argument

  • The Defendant argued that the Plaintiff should have closed all contracts once they realised their losing money. The attempt to mitigate by holding on to the contracts was not reasonable.

Legal issues

Judgment

  • "The learned judge found that the defendants had not proved that the plaintiffs' conduct was unreasonable. ...The plaintiffs had to determine how they could best reduce the losses which had then accrued by reason of their large excess of sold contracts...Their decision, his Honour found, was reasonably and bona fide made in an endeavour to restore their trading position at a time when they had not finally determined to sue the defendants, and were primarily concerned to secure their own situation."[1]
  • Agrees with the trial judge, conduct was reasonable.
  • "[O]nce the plaintiffs' conduct is found to have been reasonable, the defendants are bound to make good the loss thereby sustained."[2]

References

  1. [1979] 2 NSWLR 322, 355
  2. [1979] 2 NSWLR 322, 356
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