{{Infobox court case , name=Esanda Finance Corporation Ltd v Peat Marwick Hungerfords , court= High Court of Australia , image=Coat of Arms of Australia.svg , date decided=18 March 1997 , full name= Esanda Finance Corporation Ltd v Peat Marwick Hungerfords , citations= (1997) 188 CLR 24

(1997) HCA

, judges= Gerard Brennan, Brennan CJ, Gaudron,

McHugh McHugh is a common surname of Irish language, Irish origin. It is an anglicisation of the original Irish ''Mac Aodha'', meaning literally "Son of Aodh". Aodh (given name), Aodh was a popular male given name in mediaeval Gaelic Ireland. It was tradi ...

, Dawson, Toohey and Gummow JJ , prior actions=''Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) (1994) 61 SASR 424'' , subsequent actions=none , opinions=(6:0) Appeal Dismissed with costs, there is no cause of action in negligence for breach of duty available to the appellants. ''Esanda Finance Corporation Ltd v Peat Marwick Hungerfords'' was a High Court of Australia case regarding the liability of auditors to third parties. It was decided on 18 March 1997. The appellant, Esanda, loaned money to a corporation in reliance on a report prepared by a finance company, Peat Marwick Hungerfords. When the borrower defaulted on the loan, Esanda turned to the

auditors An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...

to recover claiming it had acted on reliance of audited accounts which breached mandatory accounting standards in relation to preparing the accounts and but for this breach of duty by Peat Marwick Hungerford. Central to this argument was that Esanda had suffered a loss which would not have occurred if not for reliance on Excel's audited accounts, which were prepared with a breach of standards. The Court held that there was no cause of action successfully pleaded by the Appellant and that the appeal should be dismissed with costs. Although this order was unanimous, there were four different judgments emanating from the Court to explain why. This case is generally seen as authority for the proposition that auditors do not owe a

duty of care In tort law, a duty of care is a legal obligation that is imposed on an individual, requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be establi ...

to third parties. However, the case was decided using the multi-factorial approach with reasons against finding a duty being: that Esanda, as a corporation, was not vulnerable as it could have made its own enquiries regarding the financial position of the borrower; and that allowing the appeal may have given rise to indeterminate liability to the auditor.

See also