CPF Group Pty Ltd v Everest Index International Pty Ltd [2026] NSWSC 416

The case of CPF Group Pty Ltd v Everest Index International Pty Ltd [2026] NSWSC 416 arose out of a distressed refinance of a multi-million-dollar commercial loan secured over a prestige residential property in Vaucluse. The same solicitor acted for the borrowers, guarantors and lender in the transaction. Despite admitting breach of fiduciary duty, the solicitor successfully defended the proceeding through the claimants’ failure to prove causation and loss.

The Court’s decision (Wright J) provided useful analysis of the Brickenden[1] principle, and discussed the potential operation of the Professional Standards Scheme for solicitors in NSW facing claims for breach of fiduciary duty.

The plaintiff, CPF Group Pty Ltd (CPF) advanced funds to the first defendant, Everest International Pty Ltd (Everest) under a short-term deed of loan (CPF loan).

The CPF loan was secured by real property in Vaucluse Sydney (Vaucluse Property) owned by a retired married couple (the Parents) who had limited understanding of spoken or written English. The Parents and their son were guarantors under the CPF loan. The CPF loan was a refinance of an existing facility that was in serious default. By the time the CPF Loan settled, the incumbent mortgager had commenced proceedings for possession of the Vaucluse Property. The proceeds of the CPF loan staved off those proceedings, but had terms including a strict requirement for the prompt sale of the Vaucluse Property and increased interest rates if deadlines to sell were not met.

The Vaucluse Property was not sold within the required timeframe. CPF sought to enforce the loan and mortgage, ultimately claiming more than $21.6 million from the Parents, and orders for possession of the Vaucluse Property.

The Parents resisted enforcement and cross-claimed against CPF and the solicitor who acted on the transaction (the solicitor), alleging that he had breached his fiduciary duty by failing to disclose that he was also acting for CPF in the transaction. The Parents alleged but for those circumstances, they would not have entered into the CPF loan.

As against CPF, the Parents contended that the loan and mortgage were unconscionable and unjust, relying on factors including their age, language barriers and financial distress. It was also contended that the knowledge of the solicitor should be attributed to CPF for the purposes of establishing unconscionability and unjustness.

The solicitor admitted breach of fiduciary duty on the basis that he had acted for more than one party in the transaction and had not obtained informed consent – but denied loss and causation and defended the claims on that basis.

Brickenden Has Restricted Operation

The Parents relied on Brickenden to argue that the solicitor was barred from contesting causation. It was contended that, in accordance with the principles of Brickenden a wrongdoer who had benefited from a transaction involving a breach of fiduciary duty, could not contend that the claimant would have entered into the transaction regardless.

The Court rejected this, confining Brickenden to cases where the undisclosed information itself is material to consent (e.g. a personal financial interest). It noted that unlike in Brickenden, the solicitor did not have an interest in the loan or mortgage that was to be discharged following entry into the CPF loan.

It followed that in order for the Parents to succeed in their claim for equitable compensation, they needed to establish that their loss had actually been caused by the breach of fiduciary duty in accordance with ordinary principles of causation.

Causation Was Not Established

The factual question was whether the Parents would have acted differently had the conflict been disclosed. This depended on whether the Parents would not have entered into the CPF loan had they known of the solicitor’s conflict.

The Parents asserted that if they had known of the conflict, they would not have signed the CPF loan and mortgage documents and instead sought independent legal advice. The Court, however, found that “[i]t does not follow from this that they would not have entered into the CPF loan and mortgage after they received such independent legal advice”. The Court considered factors such as the favourable terms of the CPF loan, the lack of alternative finance and the Parents’ overriding objective to avoid a mortgagee sale of the Vaucluse Property. The Court found that even if the Parents had received independent legal advice, that advice would not have been materially different from that provided by the solicitor and the Parents would have entered into the CPF loan in any event.

Critically, the Parents’ loss arose from electing to delay the sale of the Vaucluse Property, not from entering the CPF loan.

Unconscionability and Unjust Contracts & Attribution of Knowledge

The Parents submitted that the CPF loan and mortgage were unconscionable and unjust because CPF obtained the benefit of security of the home of elderly retired persons who had no capacity to repay the loan, and who would have been better off if the existing security holder had simply exercised its security and taken possession. It was submitted that the solicitor was aware of this, and that the knowledge of the solicitor should be attributed to CPF for the purposes of considering unconscionability and unjustness. This was on the basis of general principles of agency and the provisions of s 12GH of the ASIC Act (or the corresponding provision in respect of the ACL).

The Court rejected the Parents’ claim that the CPF loan was unconscionable. It found that although the Parents were under financial pressure, they were reasonably experienced businesspeople who understood the essential terms and commercial risks of the refinance. CPF did not exploit any special disadvantage, and the strict terms of the CPF loan, including escalating interest and a requirement to sell the property, were commercially rational in the context of urgent refinancing. The Court emphasised that financial distress alone does not establish unconscionability. Given its finding that the loan was not unconscionable, the Court did not need to determine whether the solicitor’s knowledge was to be attributed to the lender.

Professional Standards Act and Coverage Implications

The Parents contended that the Law Society of New South Wales Professional Standards Scheme established under the Professional Standards Act 1994 (NSW) (the Scheme) did not apply. The contention was that the Parents’ claim arose out of a breach of trust which is a liability excluded through s5 of the Act.

The Court held that a breach of trust encompasses a breach of fiduciary duty, but not every breach of fiduciary duty involves a breach of trust. In this case the solicitor’s conceded breach of fiduciary duty did not involve a trust. Accordingly, the exclusion under s5 of the Act did not apply. Accordingly, had the solicitor had a liability, it would have been subject to the monetary cap through operation of the Scheme.

The Court found the CPF loan and mortgage were enforceable and entered judgment for CPF for $21.6 million, granted a writ of possession over the Vaucluse Property and, dismissed the Parents’ claims with costs.

This article was co-authored with contributions from Renay Kaloudis, Associate.