Berrivale Orchards Ltd v Blakes

[1997] HCATrans 351

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B51 of 1996

B e t w e e n -

BERRIVALE ORCHARDS LIIMITED

Applicant

and

BLAKES (a firm)

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 5 DECEMBER 1997, AT 11.57 AM

Copyright in the High Court of Australia

MR P.A. KEANE, QC:   May it please the Court, I appear with my learned friend, MR A.M. DAUBNEY, of counsel for the applicant. (instructed by Nicholsons)

MR P.H. MORRISON, QC:   May it please the Court, I appear with my learned friend, MR L.F. KELLY, for the respondent. (instructed by Allen Allen & Hemsley)

MR KEANE:   Your Honour, this is a case where there are concurrent findings that the respondent solicitor’s negligence led to the loss of the benefit to a vendor of land of a contract of sale.  The application concerns the issues which arise in relation to the valuation of the lost chance.  The learned primary judge made findings as to the probabilities that the purchaser of the property from the applicant would have been able to obtain the necessary ministerial consent to the sale and that the purchaser would have been willing and able to complete the contract, the benefit of which, it was found, was lost to the applicant by the respondent’s negligence.

We have summarised those findings in the application book at page 130 in paragraph 12.  Your Honours, the learned primary judge erred in the arithmetic in applying her views as to the probabilities to arrive at the conclusion that the chance of consent being given and the purchaser being ready and able to complete, or willing and able to complete, was no greater than 55 per cent.

KIRBY J:   You accept the error of mathematics?

MR KEANE:   Yes, your Honour.

KIRBY J:   And once you accept that then the Court of Appeal was certainly authorised and arguably obliged either to send the matter back for a retrial or to substitute its own assessment of the damages doing the best it could within the framework of the judge’s findings that are based on any credibility factor.

MR KEANE:   Quite, your Honour, and it is that latter point ‑ ‑ ‑

KIRBY J:   That is what they did.

MR KEANE:   No, your Honour, with respect, they did not.

KIRBY J:   You have got complaints about how they did it but within the framework of principle they were authorised and required to reassess on the conceded error of the primary judge.

MR KEANE:   Your Honour, that was an error of mathematics.  Their Honours did not proceed to deal with the matter having regard to the findings which depended on assessment of witnesses.  That is the gravamen of our complaint.  The Court of Appeal recognised the mathematical error at page 115 at about line 25 ‑ ‑ ‑

KIRBY J:   But my recollection of the principle - I think it is stated in Warren v Coombes - is that once the Court of Appeal finds error, it is not then entitled simply to fix up the little error it finds, it then has its own independent obligation to reach its own conclusion on the issue in contest.  Is that not the correct principle, within the framework of credibility findings and if it ‑ ‑ ‑?

MR KEANE:   Your Honour, that is our point.  The relevant framework consists of credibility findings that were to the effect that there was a 70 per cent chance that ministerial consent would be obtained; there was a 50 per cent chance that ‑ ‑ ‑

GAUDRON J:   But surely that was an inference in itself.  I mean, it was not simply a credibility finding.  The apportionment of probability was really an inference from the whole of the evidence, was it not?

MR KEANE:   Well, no, your Honours.  It is, with respect, quite apparent from the reasoning of the learned primary judge that she ‑ ‑ ‑

GAUDRON J:   But you cannot find probabilities other than as inferences, can you?

KIRBY J:   Staring at a witness, you cannot say, “Oh, that is 70 per cent”.  I mean, really, we have not gone that far with Abalos, have we?

MR KEANE:   No, quite, your Honour, and we had not thought that in our application we had suggested that we were advancing such an argument.  Our contention is that if one looks at her Honour’s careful findings, which appear from pages 86 to 93 of the record, one sees that she reviews the evidence in relation to these matters and comes to a view in relation to each of the issues as to the likelihood that consent would be given, the likelihood that the purchaser would have been willing to complete, and the likelihood that the purchaser would have been able to complete, based upon her view of the willingness of the principle officer of the purchaser, who gave evidence, a Mr Johnson - based upon his willingness to complete and based upon the evidence that was given as to the likelihood that funds would have been raised and could have been raised.  Her Honour’s findings, in that regard, deal with the pros and cons and she comes to views which, plainly, in our respectful submission, depend upon her acceptance and the extent of her acceptance of Mr Johnson.  Indeed, in the reasons of the Court of Appeal ‑ ‑ ‑

GAUDRON J:   Let it be assumed that you are correct in that regard.  We are looking at no more than the misapplication of settled principle, are we not?

MR KEANE:   In our respectful submission, no, your Honours, because what the Court of Appeal did - and one can see this from the majority judgment with which Justice Davies agreed - if one looks at that judgment commencing at page 115 at about line 45 that their Honours refer to the circumstance that her Honour’s findings as to these various percentages of probability on each issue were said to be very favourable to our side ‑ ‑ ‑

KIRBY J:   They certainly were.

MR KEANE:   And in one case “unduly favourable”.  And then if one then goes over to page 117, their Honours say:

In our opinion, the transaction between Berrivale and Goldwood was little different in practical terms, from an option in favour of Goldwood, for which it had paid a $10,000.00 option “fee”.  Berrivale’s “commercial opportunity” apart from retention of the deposit, substantially, if no wholly, depended on Goldwood’s decision whether or not to proceed.  While the value of that “commercial opportunity” was not necessarily negligible, given her Honour’s findings with respect to Mr Johnson’s attitude, it was small;  in our opinion, it would be appropriate to allow no more than another $10,000.00 in damages.

KIRBY J:   Well, now, are not the crucial words there for you, and against you, “given her Honour’s findings”?  You see, that is the crunch.  They purport to be acting within the findings but saying that, “Accepting fully her Honour’s credibility findings, we think she has really gone over and been too generous.  And looking at all the evidence and drawing the inference and accepting the credibility finding, we think this is just too generous and unrealistic”.  That is what the Court of Appeal seems to have done.

MR KEANE:   Your Honour, with respect, their Honours have not set aside her findings, her findings which in each case as to likelihood of ministerial consent, likelihood or chance of ability to complete and chance of willingness to complete, their Honours have not sought to set aside those findings which plainly depend upon her view of the witnesses who gave evidence about the likelihood that those things would happen.  Rather, they have characterised them as very favourable or unduly favourable, without actually concluding that they were not open or were wrong and instead of simply applying those findings, which would have resulted in applying the mathematics to her Honour’s primary findings, would have led to a probability of 20 per cent. 

Their Honours having explicitly, purporting to have regard to those findings, come to a conclusion that the opportunity was really of the order of 1.4 per cent, because that is what $10,000 represents, 1.4 per cent being said to be a not necessarily negligible chance as against a 20 per cent chance which would have been obtained if they had acted in accordance with her Honour’s findings.

McHUGH J:   It was about 17½ per cent, was it not?

MR KEANE:   That is right, your Honour.

KIRBY J:   I can understand your complaint.  It seems to me that her Honour was too generous and the Court of Appeal too mean, but we are not here to fix up that.

MR KEANE:   Your Honour says her Honour was too generous.  Unless one can set aside the findings that her Honour made on the basis of the evidence that was given by the purchaser as to which willingness to co‑operate to ensure the provision of ministerial consent and the settlement of the contract ‑ ‑ ‑

KIRBY J:   This is stretching Abalos to the point of percentages and I just do not think that is really either what the case is or is desirable.  You cannot look at a witness and say that is a 70 per cent witness.  I mean, it is just unrealistic.  You accept the truthfulness of the witness and then you look and see whether, looking at all the evidence that the witness gave that is to be accepted, the inference is to be drawn as her Honour drew it.

MR KEANE:   In our respectful submission, the inference to be drawn is whether, having regard to the evidence of Mr Johnson, that his reputation and the reputation of his company was of such importance that they would not have put themselves in a position where they would have been sued and, therefore, that there was a substantial likelihood that they would have settled, notwithstanding that there may have been adverse effects for them in that they would have been buying something of lesser value than perhaps they could have got elsewhere.  That is a finding of probabilities based on one’s assessment of the witness, your Honours.

KIRBY J:   But what is the importance of this case?  I mean, you are really up here saying this is a breach of the credibility rules.  Well, that does not have to be said again by this Court.  It has been said over and over again.  Why is this important enough and the amount is relatively - I mean, it is important for your client, but it does not seem to be an important new issue of principle.

MR KEANE:   Your Honours, we have put it in our application squarely on the footing that it is a matter of concern in terms of the administration of justice and we summarise why we say that is so.  In our respectful submission, if we are right in what we have put to your Honours, that the Court of Appeal’s reasoning has not acted within the framework of her Honour’s findings, which are required to be respected because they are based on credit, but has, rather, disregarded them and has done so in a way which is internally inconsistent with its own reasons, the situation is this, that the court does not articulate its reasons - it does not articulate at all the reasons for disregarding the carefully reasoned judgment and the carefully reasoned findings of the learned primary judge.

In our respectful submission, it is a manifest departure from the proper course of the administration of justice in that findings have been ignored, not respected, although there has been some lip service paid to them - they have been ignored rather than overruled and the appellate court has substituted a view as to the proper assessment of the loss of a chance which is not based on reasoning which is apparent to anyone.  In our respectful submission, that is an undesirable result in terms of the due administration of justice.  Those are our submissions, if the Court please.

GAUDRON J:   Yes, thank you.  We do not need to hear from Mr Morrison in this case. 

The matter turns very much upon its own facts and is concerned only with the proper application of settled principle.  It is therefore not a matter which should attract the grant of special leave and special leave is refused.

MR MORRISON:   May it please the Court, we are instructed to ask for an order for costs.

MR KEANE:   We cannot oppose that, your Honours.

GAUDRON J:   It is refused with costs.

AT 12.11 PM THE MATTER WAS CONCLUDED