Bluth v Boyded Industries Pty Ltd

The appeal in *Bluth v Boyded Industries Pty Ltd* concerned a dispute where the appellant, a law firm, appealed a finding of negligence against it. The primary judge had found that the law firm breached its duty of care to its client by advising the lodgement of a caveat, which allegedly caused the client to lose the chance to exercise a right of rescission under a call option deed. The appeal focused on the assessment of credibility of a key witness, which informed the primary judge's determination of what the client would have done in two counterfactual circumstances.

The legal issues before the Court of Appeal were whether the primary judge erred in finding that the law firm breached its duty of care and, consequently, whether the client suffered actionable damage. Specifically, the court had to consider whether the lost opportunity to exercise the right of rescission had a non-negligible value, applying the principles established in *Sellars v Adelaide Petroleum NL*. This involved assessing whether the relevant parties had both the willingness and the ability to pay for the exercise of the option.

The Court of Appeal allowed the appeal, finding that the primary judge's assessment of credibility, which underpinned the finding of negligence, was flawed. The court noted that the evidentiary inconsistencies in the witness's affidavit and oral evidence at trial were significant. Crucially, the court determined that while there was evidence of a willingness to pay, there was insufficient evidence to establish an ability to pay on the part of the relevant parties. This lack of proven ability to pay meant that the lost opportunity did not have a quantifiable, non-negligible value.

Accordingly, the Court of Appeal set aside the orders of the primary judge and dismissed the amended statement of claim with costs. The cross-appeal was also dismissed, and the respondent was ordered to pay the appellant's costs of both the appeal and the cross-appeal.