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Aviation company accuses lawyers, accountants of negligence

A regional aviation repair station has taken its former lawyers and accountants to court over allegations they were negligent when providing advice about a share transfer.

user iconNaomi Neilson 10 July 2024 Big Law
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Consolidated Aviation, a repair station, and Steven Murray accused BH Law, accounting firm Johnsons MME and its directors of breaching their professional obligations in respect of a share transfer.

Appearing before Federal Court’s registrar Alison Legge, counsel for the applicants, Benjamin Murphy, said the shares were transferred to Murray’s mother in January 2018 “on the mistaken belief she was holding them for him” while he handled a personal matter.

Murray did not learn it was “never his mother’s intention to ever transfer them back” until a falling out several years later.

 
 

Murphy said it was during the preceding Supreme Court matters that the “causes of action against the lawyer and accountant” allegedly became clear for Murray, triggering the Federal Court proceedings.

The case has so far been decided in chambers but first appeared before Legge on Tuesday (9 July) morning for an interlocutory application brought by Johnsons MME and director Lynette Barber.

BH Law and director Robert Meers did not participate.

The specific allegations against the accountants are of acting “negligently and without proper instructions”, but their counsel, Peter Turner, sought to strike out the duty of care claim, a tort claim, and an equitable claim for alleged breach of fiduciary duty.

As part of this, Turner attempted to persuade the registrar that the allegations of loss were suffered in January 2018, when the share transfer was made, and not when the family had a dispute later.

He then pointed to several case law where allowances were made for the limitation and barring of claims.

In response, Murphy said his client “didn’t appreciate the effect of what happened in January 2018 until December of 2021”.

Turner objected to this in reply.

“On a legal analysis, the legal effect of a re-transfer might have been best to improve the situation, if I can put it deliberately broadly, of [Consolidated Aviation],” Turner said.

“It might have gone, in a very loose sense, to compensation … but it doesn’t detract from the fact that the loss was suffered upon the immediate transfer, on the applicant’s case.”

When registrar Legge raised the possibility of allowing the applicants leave to replead their case, Turner said it would be “less efficient” for the hearing to be adjourned and for the court not to proceed to determine the interlocutory application.

“There’s no material that has been put before the court by the applicants to indicate what the cause of action would be,” he said.

“This is something my clients have spoken of in writing, and it remains the case, even with the advantage of my learned friend’s submissions … that it is not clear what the cause of action would be.”

Registrar Legge said she would make her decision in chambers, and the matter would likely return to Justice Catherine Button.