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‘Sorry business’: Former client of EY Law receives settlement
A former client of Ernst & Young has received a settlement following a decade-long dispute with the firm.
Naomi Neilson
The Supreme Court of Western Australia has granted Rosana Scolaro approval to distribute an undisclosed settlement sum that was reached with Ernst & Young (EY) during mediations, just over a decade after she asked the firm for legal advice on property deeds.
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It followed allegations EY and solicitor Graeme Cotterill breached the common law duty to exercise reasonable care and skill in providing legal services between May and December 2013.
Despite the settlement figure already being reached, Rosana’s niece, Diana Scolaro, objected on the grounds the figure was too low and a breach of fiduciary duty by EY “has not been properly considered”.
Master Craig Sanderson dismissed this objection and found it was “finally” time the matter “was brought to a conclusion”.
“The whole sorry business has extended over 10 years.
“To push these proceedings on even if only to obtain further advice would not objectively be in the interest of the parties.
“It is best the matter is now terminated, and the affairs of the two partnerships are concluded,” Master Sanderson said.
Master Sanderson also concluded he was not satisfied Rosana had failed to factor in an alleged breach of fiduciary duty and she had fully investigated and received sufficient advice for the claim.
The dispute began following the death of Rosana’s father and the distribution of his estate to his three children. When one of his sons died a year later, Diana became party to the estate.
In May 2013, Diana approached Mr Cotterill for legal advice held by her grandmother, and two deeds were drafted for two partnerships her grandparents had acquired and held on trust.
The deeds contained provisions where the grandmother resigned as a trustee, and Rosana was charged to take her place.
The Commissioner of State Revenue imposed a duty on each of the deeds on the grounds that each created a new trust and changed the arrangement and beneficial ownership that existed prior to the deeds.
Rosana objected, but this was rejected by the commissioner and by several courts, including the High Court of Australia.
In 2019, Rosana commenced action against EY by alleging it breached its common law duty, or breached an express or implied contractual duty, or engaged in misleading or deceptive conduct.
She said this arose concerning EY’s alleged failure to warn or properly advise her of the consequences of executing the deeds.
This was specifically related to the High Court’s finding that the deeds were dutiable instruments, despite advice from Mr Cotterill that the deeds were not dutiable.
Rosana’s counsel submitted there would be “some difficulty” in this.
“This is not one of those cases where the advice of Mr Cotterill was clearly and obviously wrong. Ultimately, the advice proved to be incorrect, but it took the High Court to determine that was the case,” Master Sanderson wrote in his recent judgment.
In determining whether to allow the settlement to be distributed, Master Sanderson also considered the professional relationship between Rosana and EY during the decade.
EY acted for Rosana at all times, including in the High Court, which Master Sanderson said “seemed odd”.
“After all, it was EY who gave advice to (Rosana) that the deeds would not be dutiable. It was that very issue which led to the protracted litigation,” Master Sanderson said.
