Day v Mead [1987] 2 NZLR 443

Facts: A solicitor (the defendant) invited his client (the plaintiff) to invest in companies he had a financial interest in. The solicitor did not disclose he was a director of the company in which the client invested. The company went into receivership and the client (the plaintiff) sued for bad investment advice. The solicitor breached fiduciary obligations and had several conflicts of interest. However, the client himself was not very prudent by putting his entire life savings in the company. 

Held (at trial): The award of damages was reduced by half on the basis the plaintiff did not seek to protect his own interests by engaging independent and competent financial advice. 

Held (NZCA): No reason why there shouldn’t be further development of equitable notions to incorporate CL notion of contributory negligence. The court reduced an award for equitable compensation by the plaintiff’s contribution to the damage which was suffered. 

Significance: New Zealand’s position on fusion demonstrates that equity has the capacity to evolve irrespective of the existence of the fused administration of common law (CL) and equity post the Judicature Act.

Note: This has been rejected by the High Court in Pilmer v The Duke Group.