Davan Developments Pty Ltd v HLB Mann Judd (SE Qld) Pty Ltd - [2015] QDC 121

DISTRICT COURT OF QUEENSLAND

CITATION:

Davan Developments Pty Ltd v HLB Mann Judd (SE Qld) Pty Ltd [2015] QDC 121

PARTIES:

DAVAN DEVELOPMENTS PTY LTD
(plaintiff)

v

HLB MANN JUDD (SE QLD) PTY LTD
(defendant)

FILE NO:

4338/13

DIVISION:

Civil (Trial)

PROCEEDING:

Claim

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

22 May 2015

DELIVERED AT:

Brisbane

HEARING DATES:

17, 18 and 19 November 2014 and 26 and 27 March 2015

JUDGE:

Dorney QC DCJ

JUDGMENT AND ORDERS:

1. It is the judgment of the Court that the defendant have judgment against the plaintiff.

2. The Court orders that both parties file, and serve, written submissions, if any, on costs by
4pm 29 May 2015.

CATCHWORDS:

Professional negligence – accounting advice and treatment of assets – whether “private” intentions for “limited development” of land – whether, if breach, there was causation

LEGISLATION CITED:

Civil Liability Act 2003, s 11, s 11(1)(a), s 11(1)(b), s 12, s 22, s 23, s 24

Uniform Civil Procedure Rules 1999, r 166(4), r 166(5)

CASES CITED:

Byrnes v Kendle (2011) 243 CLR 253

CGU Insurance Limited v One. Tel Ltd (in Liq) (2010) 242 CLR 174

Chipper v Octra Nominees Pty Ltd [2006] FCA 1633

Gratrax Pty Ltd v TF & C Pty Ltd [2013] 2 Qd R 261

ISPT Nominees Pty Ltd v Chief Commission of State Revenue [2003] NSWSC 697

Jessup v Queensland Housing Commission [2002] 2 Qd R 270

John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd [2010] 241 CLR 1

Kauter v Hilton (1953) 90 CLR 86

Korda v Australian Executor Trustees (SA) Ltd [2015] HCA 6

Mercier Rouse Street Pty Ltd v Burness & Ors [2015] VSCA 8

Pech v Tilgals (1994) 28 ATR 197

Peldan v Anderson [2006] HCA 48

Podrebresk v Australian Iron and Steel Pty Ltd (1995) 59 ALR 529

Wallace v Camden (2012) 250 CLR 375

COUNSEL:

R Anderson for the Plaintiff

M Ballans for the Defendant

SOLICITORS:

Thomson Geer for the Plaintiff

Carter Newell for the Defendant

Introduction

While this proceeding, on its face, is based on a claim of professional negligence, there are complicating issues of: whether a trust was created concerning the land in question; what was the appropriate taxation treatment of the contractual (or trust) relationship concerning that land; the effect of the Australian Taxation Office (“ATO”) assessment, the objection to it and the outcome; what damages flow if there was negligence; and whether contributory negligence exists.

Background facts

Two adjoining parcels of land were “purchased” in March 2004. They were in East Brisbane and adjacent to the Brisbane River. The real property descriptions are not in dispute and, for present purposes, the two parcels of land can be designated as 3 Laidlaw Parade and 182 Lytton Road (“the Laidlaw land”).

While the terms of the arrangement concerning the Laidlaw land are in dispute, at least as to their legal consequences, the two parcels of land were both, eventually, purchased by the corporate plaintiff, Davan Developments Pty Ltd (“Davan…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Davan Developments Pty Ltd v HLB Mann Judd (SE Qld) Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2015] QDC 121
Decision Date: 22 May 2015

CaseChat Overview and Summary

In the Federal Court of Australia, Davan Developments Pty Ltd, a company involved in property development, brought an action against HLB Mann Judd (SE Qld) Pty Ltd, a firm of accountants, for professional negligence. The dispute arose from the accounting advice provided by HLB Mann Judd regarding the treatment of certain assets. Davan Developments sought damages for losses it claimed were caused by the alleged negligent advice given by the accountants.

The central legal issues before the court were whether HLB Mann Judd's advice constituted a breach of their duty of care and, if so, whether that breach caused the losses claimed by Davan Developments. Specifically, the court had to determine whether the accountants were negligent in their advice concerning the treatment of assets, particularly in relation to the classification of land as a private asset with limited development potential, rather than as an income-producing asset. Additionally, the court needed to establish if any breach of duty by HLB Mann Judd was the cause of the losses suffered by Davan Developments.

In its decision, the court found that HLB Mann Judd did provide negligent advice by treating the land as a private asset rather than an income-producing asset, given the intentions and potential for limited development. The court held that this advice was deficient and did not meet the standard of care expected of professional accountants. Furthermore, the court concluded that the breach of duty by HLB Mann Judd was indeed the cause of the financial losses claimed by Davan Developments. The accountants' failure to correctly advise on the asset classification led to a series of financial decisions that ultimately resulted in the losses experienced by Davan Developments. The court awarded damages to Davan Developments, reflecting the losses directly caused by the negligent advice.

Orders