Barkat v Bitel

[2008] NSWSC 43

CITATION:	Barkat v Bitel [2008] NSWSC 43 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	1 February 2008
JUDGMENT DATE :	7 February 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Michael Grove J
DECISION:	Leave to amend refused. Motion dismissed.
CATCHWORDS:	AMENDMENT - New claim for damages - Claim outside scope of measure - Futility to grant
CATEGORY:	Procedural and other rulings
PARTIES:	Mark BARKAT and Rubina BARKAT - Plaintiffs David Lee BITEL and Lawrence John GRAVES - Defendants
FILE NUMBER(S):	SC 2006/20083
COUNSEL:	In person (Plaintiff) N J Beaumont (Defendants)
SOLICITORS:	Middletons (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MICHAEL GROVE J

Thursday 7 February 2008

2006/20083 Mark BARKAT & ANOR v David Lee BITEL & ANOR

JUDGMENT

1 HIS HONOUR: There is before the Court a notice of motion filed on 28 November 2007 seeking leave to serve an amended statement of claim. The notice also seeks an order for expedited hearing but this has been ordered already, of course upon current pleadings. I have pointed out to the plaintiffs that I am not in a position to fix a hearing date.

2 The action was commenced by statement of claim filed on 16 March 2006 by solicitors acting for the plaintiffs. In short, the claim made was that the defendants, the members of a firm of solicitors, were retained in about February 2000 to act on the purchase of a property known as 92 Underwood Road, Homebush. It was alleged that the defendants were negligent or in breach of the retainer contract in failing to make adequate enquiries about the status of adjacent land as a public road which would enable access to the property. The plaintiffs proceeded to settlement and acquired title to the land which has conveniently been referred to as a “landlocked” block.

3 By notice dated 8 June 2007 the plaintiffs changed solicitors. On 3 August 2007 the new solicitors filed a notice of ceasing to act. Since then the plaintiffs have proceeded as litigants in person. They are husband and wife. At the hearing of the motion, the matter was conducted by the male plaintiff and I permitted him to be assisted by his two sons. Mrs Barkat was evidently present in Court but she did not seek actively to participate in the hearing.

4 The proposed amended statement of claim was lodged with papers in support of the motion. Counsel for the defendants provided a copy which has been appropriately marked so as to indicate material which is intended to be additional to or deleted from the original pleading. I have initialled that copy and it should remain on the file.

5 It is not necessary to descend into detail of the changes which the plaintiffs are seeking to make. There is a key to the essential change desired in the rewording of the claim for damages into what are now stated as “immediate loss and foreseeable loss”.

6 The proposed amendment recites an earlier retainer of the defendants in April 1998 in respect of the purchase of a property at Hillcrest Street, Homebush, the only apparent relevance of which seems to be that it was in the course of acting on that purchase that there were discussions about a proposal to purchase 90 Underwood Road, Homebush. This property is adjacent to No 92 which is the subject of the initial pleading.

7 The proposed pleading recites that the plaintiffs had attended an auction and purchased No 90 but they subsequently discovered a discrepancy between an advertised and actual frontage of the property. They sought advice about this from the defendants. It is noteworthy that in a letter from the defendants to the plaintiffs, which they have exhibited in these proceedings, there is a specification of the advice which was sought at that time (21 August 1998):

“ We refer to your attendances at out (sic) office on 10 & 19 August 1998 when you requested our advice in relation to action you may be able to take against the agent, Boulevarde First National, and/or the vendor, Strathfield Municipal Council, for misrepresentation of the width of the frontage of the property.”

8 The complaint now desired to be pleaded adds a recitation that matters concerning access were also discussed and a decision made to “try to purchase No 92 if the opportunity arises in the future and make the greater development”.

9 The purchase of No 92 did occur (as detailed in the original statement of claim) and the plaintiffs claim that as they cannot now pursue the “greater development” (building and selling townhouses at a profit) because No 92 is landlocked, the defendants should pay damages calculated to include the profits which might have been made if that development had been undertaken.

10 The defendants opposed the granting of leave to make the amendments. Counsel for the defendants tendered a written outline of submissions and I should acknowledge the compelling force of their content. Those submissions gather and record the relevant background with references to authorities and their comprehensiveness removes the need to recite at length what is therein set out. To say the least, there was marked contrast between the precision in those submissions and those of the plaintiffs in support of their new claims, which are being advanced after they have chosen to dispense with the assistance of legal advisers.

11 The principal obstacle to the plaintiffs’ position is an obvious failure to appreciate an issue concerning the availability of damages. The plaintiffs have presented calculations which project hypothetical losses of profits which might have been made if they had consummated the development which was contemplated. It appears that they have retained experts to make these calculations which are obviously capable of being made, but do not relevantly reflect what damages could be obtained if the plaintiffs were successful in their action. No apparent attempt has been made by the plaintiffs to ascertain the applicable measure of damage.

12 Assuming, but stressing that no finding is being made, that the defendants have breached a duty owed to the plaintiffs in giving advice about the landlock defect which manifested itself in No 92 and ultimately contributed to an inability to pursue the development scheme, the plaintiffs have presumably paid more for that property than its present worth, and the measure of damage is to be found essentially in any difference. This is because the defendants were advisers and not the providers of warranty and, in any event, they did not cause the defect of which complaint is now made.

13 It was not the defendants who caused the frontage of No 90 to be less than advertised, nor did they cause No 92 to be landlocked, nor did they cause the adjacent land not to be proclaimed as a public road.

14 This is what lawyers jargon describes as a “no transaction case”. There is nothing that the defendants could do to remove the defect and thus, if they had made the plaintiffs aware of the defect prior to their being bound by contract to purchase, the reasonable response would be not to enter into it.

15 I acknowledge that in the analysis of case law presented by the defendants, there were references to cases where the measure of damage was different but those cases were obviously distinguishable from the present. They were not the subject of reliance by the plaintiffs and it is unnecessary to undertake what would essentially be an academic discussion.

16 It is not to the point, as the plaintiffs have done, to assert that the defendants knew that they wanted to engage in development. As I have pointed out, the barrier to development was not created by any deficiency in advice, but in the circumstances which attached to the particular subject of purchase.

17 The proposed amendments are based upon misconceptions about available damages and for that reason should not be allowed. I add that there are powerful discretionary considerations militating against further expanding the scope of this action. The pleading of limitation in par 27 of the defence to the current statement of claim will be dealt with in due course but it is to be observed that some eight to nine years have elapsed since the events which are the subject of the proposed amendments, and a litigation of the facts surrounding those events obviously would be likely to extravagantly, and given the effluxion of time, unnecessarily, inflate the quantity of evidence, irrelevant to damages assessment, which would need to be gathered, in particular expert evidence.

18 The defendants, in the event that amendment was refused, sought a direction restraining the plaintiffs from adducing evidence from various experts which had been foreshadowed by them. There is no formal motion to that effect and I consider that any restriction upon evidence should be determined by a trial judge. I decline the defendants’ request.

19 Leave to amend is refused. The motion is dismissed and the plaintiffs are ordered to pay the defendants’ costs of the motion.

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18/02/2008 - In par 7 of the judgment the date should read 21 August 1998 and not 2 August 1998 - Paragraph(s) 7