Baldock, Gregory Lionel and Baldock, Tamara Annabelle v MacKintosh, Patricia and MacKintosh, James, Trading as MacKintosh and Associates

[1998] TASSC 88

88/1998

PARTIES:  BALDOCK, Gregory Lionel
  BALDOCK, Tamara Annabelle

v
MACKINTOSH, Patricia, trading as
MACKINTOSH & ASSOCIATES
MACKINTOSH, James, trading as
MACKINTOSH & ASSOCIATES

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  51/1993
DELIVERED:  22 July 1998
HEARING DATE/S:  20 July 1998
JUDGMENT OF:  Cox CJ

CATCHWORDS:

REPRESENTATION:

Counsel:
           Plaintiffs:  R J Phillips
           Defendants:  C W Law
Solicitors:
           Plaintiffs:  Phillips Taglieri
           Defendants:  Page Seager

Judgment category classification:
Court Computer Code:  
Judgment ID Number:  88/1998
Number of pages:  2

Serial No 88/1998
File No 51/1993

GREGORY LIONEL BALDOCK and
TAMARA ANNABELLE BALDOCK
v
PATRICIA MACKINTOSH trading as
MACKINTOSH & ASSOCIATES
and JAMES MACKINTOSH trading as
MACKINTOSH & ASSOCIATES

REASONS FOR JUDGMENT  COX CJ

22 July 1998

This is an application to further amend the statement of claim in an action against the first and second named defendants trading as Mackintosh & Associates.  I shall refer to the statement of claim, amended as at 1 March 1996, as the statement of claim.  It alleged that the defendants were accountants and that the plaintiffs were cartage contractors carrying on business at Ulverstone.  Paragraph 2 alleged that by an oral agreement made on 6 December 1990 between the plaintiffs and the first defendant acting on behalf of the defendants, the plaintiffs agreed to retain and employ the latter as their accountants and the defendants accepted such retainer to provide advice in relation to the taxation consequences of the proposed sale by the plaintiffs of certain vehicles.  It was alleged that the defendants well knew that the plaintiffs required the advice for guidance in the conduct of their business and that it was a term of the agreement, or alternatively it was the duty of the defendants, to exercise all reasonable care and competence as accountants in providing the advice.  The defendants allegedly advised the plaintiffs that they would not incur any taxation liability, including capital gains tax, as a consequence of the proposed sale; but as a result of the sale the plaintiffs were assessed as liable for payment of tax in respect of the sale.  This liability was alleged to flow from the negligence of, and breach of agreement by, the defendants.

The proposed amendments recast the pleadings and involve the following variations to the statement of claim:

(a)      It is alleged that the defendants carried on practise both as accountants and as tax agents.

(b)It is alleged that the plaintiffs were individuals, but carried on business in partnership as cartage contractors.

(c)It is alleged that the defendants were accountants and tax agents to the partnership and to the plaintiffs.

(d)The retainer is pleaded as one to retain and employ the defendants for reward as their accountants and tax agents and to provide advice to the plaintiffs as individuals and as the partnership.

(e)The defendants well knew the plaintiffs required the advice sought for their information and guidance and the management and conduct of the business of the partnership and their own affairs.

(f)It was a term of the retainer and was the duty of the defendants in performance of it to exercise all reasonable care and competence as accountants and tax agents in providing the advice sought and to ensure that the advice given would be correct and understood by the plaintiffs.

(g)      The advice given was incorrect.

(h)      It was given in breach of the terms of a retainer and the duty of care alleged.

1. It was provided in the expectation that the plaintiffs would rely upon it.

(j)       In reliance on that advice, the plaintiffs contracted to sell the vehicles and sold them.

It is contended by the defendants that the cause of action in contract arose on 6 December 1990 when the allegedly incorrect advice was given and in tort when damage was suffered by the plaintiffs by the issue of an assessment of capital gains tax on 9 July 1992.  This application was made prior to the expiration of the statutory limitation in tort on 9 July 1992 but after the expiration of six years from the arising of the cause of action in contract.

In my opinion, no new cause of action is pleaded, nor is there any "quite different set of ideas, quite a different allegation of fact" (see Marshall v London Passenger Transport Board [1936] 3 All ER 83 at 88, per Lord Wright MR).

Although the plaintiffs have not hitherto specifically asserted that they carried on business as a partnership and that the defendants had contractual duties and the common law duty of care towards the partnership, both matters are implicit in the statement of claim of 1 March 1996.  That document asserted that the defendants having been engaged as accountants to advise on the tax implications of the proposed sale of assets in their business, failed in their duties to competently advise the plaintiffs of these implications.  The fact that they are now alleged to be not only accountants but also tax agents does not, in my view, involve a new departure.  In Dornan v J W Ellis & Co Ltd [1962] 1 QB 583, the plaintiff was injured when struck in the eye by a metal fragment of a drill which broke while being used by a fellow workman named Stewart. The initial claim was based on the employer's failure to provide suitable equipment and protective goggles, thereby failing to take care for the plaintiff's safety. His application to amend to rely on the negligence of the fellow worker in his use of the equipment was permitted by the Court of Appeal. Davies LJ at 593 - 594 said:

"The story that is now set up by the plaintiff is the same story as that set up all along, namely, that the plaintiff lost his eye from a piece of the drill which was being operated by Stewart.  And, as I think, what is now sought to be done is not to make out a new case of negligence, but to persist in the old story and invite the judge at the trial to approach it, to interpret it, from a different angle or aspect.  It is a different approach to the same main story of the accident."

In this case, it is the same story the plaintiffs set up as they set up all along.  The trial judge will be asked to interpret it from a slightly different angle, namely that the defendants were, in addition to being accountants, tax agents.

The same comment can, I think, be made of the other variations listed above.  None involves a new cause of action, a new departure or a new head of claim.  The amendments sought put more clearly and concisely the nature of the case against the defendants.  I can see no prejudice to the defendants in permitting the amendments sought.

Subject to the deletion of a claim for personal injury in par11, which the plaintiffs conceded was an inappropriate subject for inclusion, leave is granted to the plaintiffs to amend in accordance with the proposed statement of claim, the subject of the application.