DJZ Constructions Pty Ltd v Paul Pritchard trading as Pritchard Law Group - [2010] NSWSC 1197

No judgment structure available for this case.

CITATION: DJZ Constructions Pty Ltd v Paul Pritchard trading as Pritchard Law Group and Ors [2010] NSWSC 1197

JUDGMENT DATE :
21 October 2010

JUDGMENT OF: Schmidt J

DECISION: Motion dismissed.
Unless the parties wish to be heard on the question of costs, the usual order that costs follow the event means that Mr Pritchard must bear DJZ's costs of the motion.

CATCHWORDS: PROCEDURE - judgments and orders - amending, varying and setting aside - reasons sought in respect to various findings and reasonings - quantum of damage - whether the Court failed to complete the exercise of its jurisdiction by discounting damages ordered by reference to certain probabilities and hypotheses -whether first defendant was entitled to reasons for rejection of submissions - whether failure to give reasons constituting an error of law and denial of procedural fairness - hypothetical scenarios pressed - motion dismissed - costs

LEGISLATION CITED: Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005

CATEGORY: Procedural and other rulings

CASES CITED: Heenan v Di Sisto [2008] NSWCA 25; [2008] Aust Torts Reports 81-941
Johnson v Perez [1998] HCA 88; (1988) 166 CLR 351
Tabet V Gett [2010] HCA 12; (2010) 240 CLR 537
Willis v The Commonwealth [1946] HCA 22; (1946) 73 CLR 105

PARTIES: DJZ Constructions Pty Ltd - Plaintiff
Paul Pritchard t/as Pritchard Law Group - First Defendant/Cross Claimant
Joseph John Gilles - Second Defendant/First Cross Defendant
Gregory George Eliades - Third Defendant/Second Cross Defendant
David McGovern SC - Fourth Defendant/Third Cross Defendant

FILE NUMBER(S): SC 2005/269375

COUNSEL: Mr C Birch SC with Mr M Cleary - Plaintiff
Mr A McInerney - First Defendant/Cross Claimant

SOLICITORS: Pryor Tzannes & Wallis - Plaintiff
Yeldham Price O'Brien Lusk - First Defendant/Cross Claimant

- 23 -

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

PROFESSIONAL NEGLIGENCE LIST

SCHMIDT J

THURSDAY, 21 OCTOBER 2010

2005/269375 DJZ CONSTRUCTIONS PTY LTD v PAUL PRITCHARD TRADING AS PRITCHARD LAW GROUP AND ORS

JUDGMENT

1 HER HONOUR: Judgment was given in this matter on 10 September 2010. The parties were asked to produce short minutes of orders and to approach in the event of disagreement on costs. By motion of 23 September the first defendant and cross claimant, Mr Pritchard, sought orders that the Court provide reasons as to a number of matters, or in the alternative, orders under Rule 36 of the Uniform Civil Procedure Rules 2005, correcting varying, recalling or setting aside paragraphs [269] to [273] and paragraph [400] of the judgment.

2 The matters to which the motion was addressed concerned the quantum of damages flowing from the conclusion that negligence and breach of retainer in relation to a 2003 agreement had been established against Mr Pritchard.

3 The motion sought orders that:

1.1 the Court's findings and reasoning in relation to the probabilities, or possibilities, whether, and if so to what extent, accepting that "there were real prospects of recovery from Mrs James" (Judgment delivered on 10 September 2010 ( Reasons ) at [265]), (i) there would have been an appeal by Mrs James, (ii) the prospects of such an appeal, (iii) whether the judgment against Mrs James would have been compromised in any event, and (iv) whether the judgment against Mrs James could have been enforced against Mrs James, and if so, (v) whether the judgment would have been enforced against Mrs James;

1.2 in the alternative, the value of the lost opportunity to enforce the judgment sum (and interest) identified in paragraph 400 of the Reasons and whether that lost opportunity should be discounted by reference to the probabilities or possibilities that the said judgment sum would have been varies on appeal, compromised or not enforced to its full extent; and

2.1 UCPR 36.16(3A);

2.2 or, in the alternative, UCPR 36.17;

2.3 or, in the further alternative, UCPR 36.15;

2.4 or in the further alternative, the inherent jurisdiction of the Court;

3 Such further or other order as the Court thinks appropriate.

4 The 37 page submission advanced in support of the motion ranged somewhat further. It was argued that the Court had failed to complete the exercise of its jurisdiction by discounting the damages ordered against Mr Pritchard by reference to the probabilities that the lost opportunity which Einstein J’s orders in DJZ’s favour constituted, would not have been realised; that on a correct understanding of the reasons given, DJZ had not proved its lost opportunity; that on a correct understanding the claim had not succeeded and that the reasons should be corrected accordingly; in the alternative, that Mr Pritchard was entitled to reasons for the rejection of his submissions; and in the further alternative, that the failure to give reasons constituted an error of law and a denial of procedural fairness in two separate respects.

5 These arguments all concerned the damaged found to have resulted from Mr Pritchard's negligence in relation to a 2003 agreement. They were pressed for Mr Pritchard in various ways, by reference to a number of hypothetical situations and probabilistic judgments which it was submitted required determination, if the true value of any damage suffered as the result of the negligence found, was to be determined.

6 The plaintiff's case was that there were limited circumstances in which orders of the kind here sought could be made by a Court. The motion should be dismissed because what was sought went beyond what the applicable principles permitted. Mr Pritchard sought to re-argue aspects of the case in a fashion which misconceived the issues before the Court at trial and sought reasons beyond that to which he was entitled.

7 Mr Pritchard was not entitled to re-characterise the issues before the Court or to raise fresh arguments to advance matters resolved by the earlier judgment. This was an attempt to characterise the claim as a loss of opportunity simpliciter, so that the entire claim should be treated as a mere opportunity capable of being valued on a discount below fifty per cent in accordance with principles in Malec v JC Hutton Pty Ltd (1990) 169 CLR 639 and Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332. The case DJZ had successfully pressed was that the orders made in its favour by Einstein J were valuable and it was the loss of those orders as the result of Mr Pritchard's earlier negligence, which resulted in the damage it pursued. DJZ had exercised its rights under the 1999 deed. The sole ground on which these rights had been found valueless and the orders made in its favour by Einstein J lost, was the result of Mr Pritchard’s negligence. The hypothetical scenarios pressed for Mr Pritchard did not arise for consideration in those circumstances.

The issues in the proceedings

8 The Court’s Practice Note for professional negligence matters contemplates that before trial, the parties will each identify and discuss the issues which the Court will be required to determine and that they will eventually be provided to the trial judge at the hearing. Because of the course which these proceedings took, there were continuing difficulties with the production of an issues document, despite ongoing pursuit of its production. One finally emerged on the last day of the trial, during submissions (mfi 25.)

9 The issues then identified by the parties as requiring the Court’s determination appear at paragraph [9] of the September judgment. The issues relating to the 2003 agreement were identified as:

"7 August 2003 Deed and 5 November 2003 Sale Agreement

18. Was there any departure by Mr Pritchard from competent professional practice in respect of the 7 August 2003 Deed or the November 2003 Sale Agreement.

19. Did Mr Pritchard fail to advise DJZ that the 7 August 2003 Deed or the November 2003 Agreement for Sale could bring about a release of the James’ from their guarantee contained in clause 5 of the 1 July 1999 Deed.

20. If so, did this amount to a breach of retainer or negligence on the part of Mr Pritchard.

21. Is Mr Pritchard protected from any liability by reason of the advocate’s immunity at common law.

22. Has DJZ suffered any loss as a consequence of either the 7 August 2003 Deed or the November 2003 Agreement for Sale operating to release the James’ from their guarantee contained in clause 5 of the 1 July 1999 Deed.

23. Was any loss of DJZ suffered not by reason of either the 7 August 2003 Deed or the November 2003 Agreement for Sale, but rather by reason of the February 2001 Deed.

10 As to damages, the issues identified were:

"General issues in relation to loss

a. its own legal costs in Equity Division Proceedings 50108/01 or the appeal from those proceedings; or

or were those amounts paid by other companies controlled by Mr Palmieri in circumstances where those other companies have no legally enforceable right of recovery in respect of such payment from DJZ.

26. If DJZ has suffered any loss as a consequence of any breach of retainer or negligence by Mr Pritchard, has DJZ proved the quantum of that loss.

27. If any loss was suffered by DJZ by reason of any breach of retainer or negligence, should any damages be reduced by reason of DJZ’s contributory negligence.

28. Would enforcement against Mrs James be fruitful.

The September judgment

11 DJZ advanced various claims in the proceedings. It succeeded on some and failed on others. It was a part of DJZ’s case that it had successfully pursued its rights under the 1999 deed in the proceedings before Einstein J. His Honour’s order determined the value of those rights as being $355,870. The loss of the order made in its favour on appeal, was the result of Mr Pritchard’s negligence in drafting the 2003 sale agreement. The determination of the appeal crystallised its resulting loss. That case succeeded. The resulting damages ordered were of two kinds. The first was dealt with as item 2, in respect of which I found at [400]:

12 The second related to the costs of the proceedings. It succeeded only in part. This was dealt with at item 4, where I concluded that:

"Item 4

412 DJZ’s costs of the proceedings brought against Mr and Mrs James are claimed at item 4 of the Schedule, as some $489,022, plus interest. They have been established other than in so far as they relate to costs incurred in relation to the claims advanced against Mr James in the Supreme Court proceedings.

413 The orders made against Mr James were not challenged on appeal, but formed a part of the settlement reached in 2005. What part of the costs claimed relate to Mr James, is not clear. No analysis was undertaken. I accept in the circumstances, that a broad brush approach to an assessment of these costs must be undertaken, as discussed by the High Court in Nikolau. The pursuit of the guarantees under the 1999 deed occupied a substantial part of the proceedings before the Court of Appeal, but a much lesser part of those before Einstein J, where a number of other matters were dealt with. I have assessed that 40% of the costs assessed in relation to the first instance proceedings related to the pursuit of Mr James. Accordingly, only 60% of those costs are recoverable as damages in these proceedings. The sum claimed must be adjusted to reflect that conclusion.

414 I have concluded that DJZ was responsible for 30% of the damages suffered after 18 December 2003 in relation to the costs incurred and that Giles Payne was responsible for 50% of the balance of the costs incurred after 12 January 2004. Mr Prichard is liable for the remaining balance."

13 These conclusions reflected various findings earlier dealt with in the judgment, about matters over which the parties had joined issue in relation to the claim advanced in connection with the 2003 sale agreement.

14 Under the heading ‘Mr Pritchard and the 2001 deed and the 2003 sale agreement’, I dealt with the case advanced in relation to the 2003 agreement (see [170] to [179]). DJZ’s case was that it was Mr Pritchard’s negligence in drafting that agreement on which the Court of Appeal’s judgment turned, resulting in the crystallisation of its loss of the rights it had under the 1999 deed, which Einstein J had determined had a value of $355,870.

15 At [171] I found that evidence, including that given by Mr Pritchard himself, showed that there were available steps which could have been taken, which did not give rise to the problems which led to the Court of Appeal’s judgment. At [179] I noted that the orders made in favour of DJZ by Einstein J were the loss which it sought to recover from Mr Pritchard as being reasonably foreseeable from his negligence in preparing the agreement. Under the heading ‘2003 agreement – negligence established’ I dealt with the claimed negligence, at [203] to [221].

16 Mr Pritchard’s evidence was dealt with at [209] - [210]. I concluded at [211] - [221] that the claimed negligence had been established in circumstances where there had been a complete failure to give consideration to obvious difficulties and that the result was that the 2003 sale agreement removed the foundation for the case advanced by DJZ (issues no 18,19 and 20). At [222] - [226] I rejected Mr Pritchard’s claim as to advocates immunity (issue no 21).

17 It was Mr Pritchard’s case that DJZ had not established any loss and that any loss had no causal connection with his negligence. Causation was dealt with at [230] - [254]. I concluded that there was a loss suffered, which was reasonably foreseeable and caused by Mr Pritchard’s breach of duty (issues no 22, 23 and 24). At [236] I concluded that irrespective of any earlier negligence on Mr Pritchard’s part, it was the conclusion reached by the Court of Appeal on the 2003 agreement, which resulted in the loss DJZ pursued (issue no 26).

18 Other specific issues were then dealt with, including the question of enforcement against Mrs James (issue 28); whether DJZ had made any payments to Mr Pritchard (issue no 25); contributory negligence (issue no 27). The possibility of an assessment of damages being referred out for assessment (issue no 29), was dealt with, when I turned to the calculation of damages.

19 Having already determined that DJZ had established that it had suffered the loss it had claimed in relation to the 2003 agreement, as the result of Mr Pritchard's negligence, a loss which had crystallised when the Court of Appeal gave its judgment, when I turned to the calculation of damages, I added nothing further to the reasons earlier given for the conclusions reached. At [400] I noted that the loss claimed had been established. When I dealt with other heads of damage, there were other issues which had not been earlier dealt with. Accordingly, I turned to deal with them. That was not necessary in respect of the claim in relation to the 2003 agreement.

The implied loans

20 One of the matters which I had earlier dealt with, was the question of whether DJZ had incurred any loss in relation to Mr Pritchard's costs. This was dealt with at paragraphs [269] - [273] under the heading ‘Did DJZ make any payments?’ (issue 25). At [269] - [273] I said:

"267 Mr Pritchard’s case was that his fees and disbursements were not paid by DJZ, nor did it pay the sum agreed in the eventual settlement of the Court of Appeal proceedings. Palmieri Developments Pty Limited later paid $400,000 of the payment agreed under the settlement in favour of Mrs James and Enzo paid the other $50,000. They were not parties to the settlement. There was no evidence of any loan agreement between Palmieri’s Developments Pty Limited, Enzo and DJZ in relation to these fees. It followed that DJZ had suffered no losses, because the litigation was always funded by Mr Palmieri's other companies.

268 I am unable to accept the argument advanced.

269 Under the costs’ agreement the costs liability was that of DJZ. Mr Palmieri’s evidence was that costs had been paid by Palmieri’s Developments Pty Limited because DJZ itself had no assets or income. The only asset which DJZ had was its interest in the litigation. It had always been his practice to draw funds from one of his companies, for the benefit of his other companies. He never discussed these borrowings with his accountant and they were not reflected in the relevant corporate records, but he had always intended that if DJZ recovered the moneys claimed in the Supreme Court proceedings, they would be used to repay the other companies.

270 The evidence showed that while money used to pay what was agreed in the settlement was borrowed by other of Mr Palmieri's companies from third parties, the funds were then transferred to DJZ ‘s cash management account. The $450,000 was then paid by DJZ by bank cheque.

271 I accept that in these circumstances, where Mr Palmieri was the controlling mind of all three companies and he and his wife the directors and only shareholders, it must be concluded that there was an implied loan between the corporate entitles (see Young v Commissioner of Taxation [2010] NSWSC 288.)

272 I am satisfied that it must be inferred that the payments made resulted from an informal agreement or arrangement between the companies, Mr Palmieri being the controlling mind of each of them. The evidence in the case of the settlement moneys is stronger than that in relation to Mr Pritchard's fees, but the evidence permits the conclusion urged, namely that by his conduct Mr Palmieri intended that there be a loan between the companies. While the costs were paid direct by Palmieri’s Developments Pty Limited, rather than first being put into the hands of DJZ, that it was intended that the money be loaned rather than gifted to DJZ must be accepted in the face of Mr Palmieri’s evidence.

273 The result is that this part of Mr Pritchard’s case must fail."

21 It was submitted for Mr Pritchard that the Court had failed to give reasons for the rejection of his case, that DJZ had not suffered the loss claimed, because it had not paid Mr Pritchard’s legal costs. This argument was advanced on the basis that no reasons were given for the rejection of the arguments advanced in relation to the financial records of Mr Palmieri's three corporate entities; the evidentiary presumptions arising from s 286 of the Corporations Act 2001 (Cth); and the failure to call Mr Osterberg, DJZ’s accountant.

22 There was no issue between the parties that the evidence showed that the requirements of the Corporations Act relied on had not been met and that the companies’ financial records did not evidence the existence of the claimed loans. It was Mr Palmieri’s evidence that his intentions in relation to the intercompany loans were not a matter which he had discussed with Mr Osterberg and that this was the reason why they had not been reflected in the accounts as they ought to have been. The accounts were only corrected after this issue arose in these proceedings.

23 The matter over which the parties had joined issue as to this aspect of the damages claimed thus fell to be determined on whether or not Mr Palmieri’s evidence about these matters could be believed, in the face of the agreed difficulties.

24 Despite the reservations which I had as to Mr Palmieri’s evidence, which I had earlier explained in relation to the claims advanced in relation to the drafting of the 1999 deed (see at [65] to [84]), I came to the conclusion that in this respect, his evidence should be accepted. I explained why I had come to reach that view. No doubt I could have given more extensive reasons, particularly by reference to the matters which were common ground between the parties. I confined the reasons given to the matters which swayed my acceptance of Mr Palmieri’s evidence.

25 Dissatisfaction with the view reached that Mr Palmieri’s evidence, supported as it was by the evidence to which I referred, should be accepted, is not a basis either for revisiting the reasons given, or altering the conclusion reached. Finality of litigation is important. What was observed in Beale v GIO of New South Wales (1997) 48 NSWLR 430 at 443 must be born in mind:

26 There is a difference between revisiting reasons given in the case of an error or omission and an application which in truth involves an appeal from a trial judge's conclusions to the trial judge, or a method by which an unsuccessful litigant seeks to reargue its case. Before embarking on the course here urged a trial judge must be convinced that there has been an oversight or omission, or perhaps a palpable error and that an alteration in the judgment would save the parties the expense of an appeal (see Multiplex Constructions Pty Limited v Irving [2005] NSWCA 1 at [17] - [23]). I am not convinced that this is such a situation. While this was one of a number of points which turned on whether or not Mr Palmieri’s evidence should be accepted, dissatisfaction with the basis on which I concluded that in this instance this evidence should be accepted, is not a reason for revisiting the reasons given, in order to explain them further.

27 Were I to embark on the course urged, it seems to me that an appeal would be invited, rather than avoided.

The damages found to have resulted from Mr Pritchard’s negligence in relation to the 2003 agreement.

28 It was argued for Mr Pritchard that the September judgment did not deal with the prospect that Einstein J’s judgement would not have been enforced by DJZ, having regard to the probabilities or possibilities that:

29 These matters were not identified by the parties as issues requiring the Court’s particular determination.

30 It was argued for Mr Pritchard that they ought to have been dealt with in the judgment, because the authorities dealing with the assessment of damages for any lost opportunity require an analysis that the ‘loss should be assessed by reference to the degree of probabilities or possibilities’. In this case that required analysis of a number of hypothetical situations in which Mrs James could have appealed Einstein J’s decision on bases other than the effect of the 2003 agreement, on which her appeal succeeded. Or that DJZ may have later settled its claim against Mrs James, given Mr Palmieri’s interest in certain joint venture properties. Reliance was placed on what was observed in Heenan v Di Sisto [2008] NSWCA 25; [2008] Aust Torts Reports 81-941 at [28] - [32]:

"28 As a general proposition past hypothetical events in the assessment of damages are not decided on the balance of probabilities, by which satisfaction that it is more likely than not that they would in fact have occurred establishes for the assessment that they would have occurred. Rather, the damages are assessed according to the degree of probability that the events would have occurred, provided that the probability is not so low as to be speculative or so high as to be practically certain: Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 643. As was stated with particular reference to commercial transactions in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355, “damages for deprivation of a commercial opportunity … should be ascertained by reference to the court’s assessment of the prospects of success of that opportunity had it been pursued”.

Sellars v Adelaide Petroleum NL

some

Sellars v Adelaide Petroleum NL

32 Whether the respondents would have instructed the appellant that the contracts should be made interdependent is just as much a past hypothetical event as whether Skyworld would have agreed. As Professor Fleming observed in “Probabilistic Causation in Tort Law: a Postscript” (1991) 70 Can Bar Rev 136 at 140, all causal inquiries involve might-have-beens, but the balance of probabilities has been applied to what the plaintiff would have done if properly advised by the defendant solicitor in, for example, Sykes v Midland Bank Executor & Trustee Co Ltd (1971) 1 QB 113; Allied Maples Group Ltd v Simmons & Simmons (1995) 1 WLR 1602; Hanflex Pty Ltd v NS Hope & Associates (1990) 2 Qd R 218; and Hall v Foong (1995) 65 SASR 281. See also Daniels v Anderson (1995) 37 NSWLR 438, an auditor’s negligence case in which, after a detailed consideration of Sellars v Adelaide Petroleum NL and other cases, this Court said at 530 that “the issue of causation should be approached upon the basis of proof upon the balance of probabilities with the qualification that an assessment of whether the chance which is said to have been lost had a value is to be made upon the possibilities or probabilities of the case” and for the issue of causation asked whether the directors would have acted to avert the loss if properly informed by the auditor."

Mrs James

31 The question of whether the orders made by Einstein J in favour of DJZ could have been enforced against Mrs James was a matter over which the parties joined issue (issue no 28).

32 Mr Pritchard’s case was that DJZ had not met the onus falling on it to establish that it could have enforced against Mrs James. This was pressed in circumstances where Mr James had become a bankrupt, shortly after Einstein J gave judgment in favour of DJZ. It was common ground that the orders made in favour of DJZ could not have been recovered from him. It was DJZ’s case that Mrs James was a woman of means and that it could not be found on the evidence that DJZ would have been unable to enforce the orders made by Einstein J against her.

33 This matter was dealt with at paragraph [262] - [266] of the judgment. I rejected Mr Prichard’s argument that there were no prospects that Einstein J’s judgment could have been enforced against Mrs James, had she not successfully appealed the decision, given the evidence as to her circumstances and means.

34 The evidence was that Mrs James had appealed Einstein J’s judgment by reference both to the 2001 deed and the 2003 sale agreement. While the Court of Appeal made some observations about the 2001 deed in its judgment, only the 2003 agreement was relied on. Why that course was pursued was not known. Mr Pritchard relied on the Court of Appeal’s obiter remarks on the 2001 deed, to argue that the loss pursued by DJZ had not been causally connected with the drafting of the 2003 agreement. Those arguments were rejected. I concluded that irrespective of any earlier negligence it was the negligence in relation to the 2003 agreement which caused the loss pursued. At 233 I said:

233 Notwithstanding Mr Pritchard’s failures in that respect, the 2001 deed was not the basis upon which the Court of Appeal reached its conclusions. It upheld Mrs James’ appeal because of the views to which it came in relation to the 2003 sale agreement. That may not be overlooked, reflecting as it does the way in which Mrs James’ case was conducted. Why reliance on the 2001 deed was not pressed, is not apparent. Perhaps there were concerns as to its efficacy or effect, given that it was a deed entered by only some of the parties to the 1999 deed, which purported to vary the rights and liabilities of the parties to that deed. It is unnecessary to speculate as to the reason for the approach adopted, or what might have resulted, had a different course been pursued.

Tabet v Gett

"66 For the purposes of the law of negligence, "damage" refers to some difference to the plaintiff. The difference must be detrimental. What must be demonstrated (in the sense that the tribunal of fact must be persuaded that it is more probable than not) is that a difference has been brought about and that the defendant's negligence was a cause of that difference. The comparison invoked by reference to "difference" is between the relevant state of affairs as they existed after the negligent act or omission, and the state of affairs that would have existed had the negligent act or omission not occurred (Gregg v Scott [2005] 2 AC 176 at 181 - 182 [9]).

35 I did not accept that the possibility that Mrs James could have successfully appealed from the orders of Einstein J, for some reason other than Mr Pritchard’s negligent drafting of the 2003 agreement; or that even if she could not, that DJZ would nevertheless have compromised its success in the proceedings before Einstein J in later settlement negotiations, which occurred after DJZ lost in the Court of Appeal, were necessary considerations in determining the question of whether or not DJZ had established that it had suffered the damage it claimed. Rather, I came to the view that DJZ had established the loss claimed.

36 While an assessment of the probability of things occurring may sometimes be necessary when damages are being assessed, I concluded that matters of the kind which are now sought to be pursued for Mr Pritchard could not sensibly be so regarded. This was not a question of any oversight.

37 The plaintiff’s case that this aspect of the motion is an attempt to re-argue aspects of the case in a fashion which misconceives the issues before the Court at trial must be accepted. Its reliance on what the High Court said in Johnson v Perez [1998] HCA 88; (1988) 166 CLR 351 at 368, by reference to Willis v The Commonwealth [1946] HCA 22; (1946) 73 CLR 105 at 109 is well placed. There it was said:

38 DJZ’s case rested on what had, in fact, occurred in relation to the 2003 agreement and the consequence of reliance on that agreement before Einstein J and later in the Court of Appeal. That case succeeded. I accepted that the evidence established the prospect that the appeal would have failed, had Mr Pritchard not been negligent in drafting the 2003 agreement, taking the view that the result of this conclusion was that other probabilities and possibilities did not arise for consideration.

39 In the written reply submission it was argued for Mr Pritchard that the Court has not yet undertaken an assessment of damages by reference to ‘the degree of possibilities and possibilities for the purpose of assessing damages’. Such an assessment was not undertaken because this aspect of Mr Pritchard’s case failed. On the approach discussed by the High Court in Tabet v Gett [2010] HCA 12; (2010) 240 CLR 537, I accepted DJZ’s case that the adverse outcome about which it complained had in fact come home, as the result of Mr Pritchard’s negligence.

40 Again, I take the view that while undoubtedly more extensive reasons could have been given for the conclusions reached, the reasons which have been given are such that any jurisdiction to revisit the judgment, for the various reasons advanced, may not now be exercised. It is unquestionably possible that the Court of Appeal might take a different view to that to which I came. This was a complex case, involving a great deal of evidence, which resulted in very extensive written submissions which were also addressed orally at some length, as to a large range of issues and arguments advanced to support them. That I have not accepted that there were even further complexities which required the Court’s resolution, in order to resolve the controversies which brought the parties to Court, is not a basis for undertaking the task now pressed.

Other submissions

41 In the extensive written submissions initially advanced in support of the motion, a number of propositions were pressed. To the extent which I have not already dealt with them, I make the following additional observations.

Part A: The Court should complete the exercise of its jurisdiction by discounting item 2 by reference to the probabilities that the lost opportunity would not have been realised

42 Mr Pritchard’s case was that there was no loss suffered at all. It was urged that there was a difference between questions of causation of loss and assessment of the amount of a loss and that given the approach adopted in the September judgment, it was apparent that the required assessment process was as yet incomplete.

43 To advance this argument there was a detailed analysis undertaken of findings made in the September judgment. These findings, it was submitted, supported the submission advanced at trial that DJZ had in truth suffered no loss as the result of Mr Pritchard’s breach of his duty, given Mr Palmieri’s motivation to protect his interest in the joint venture properties. These findings led to the conclusion that on a correct understanding of the Court’s reasons, DJZ had not proved its lost opportunity.

44 I accept, hypothetically, that were I to be convinced that I was in palpable error in the conclusions which I earlier reached, that the judgment might be revisited. I have not, however, been able to come to the view urged.

45 It was urged that consideration had to be given to the hypothetical situations advanced, in terms of the degree of probability of their occurring and to discount the value of the asserted lost benefit, by allowing the probability that the loss would not have been realised. This task had not been undertaken and would require determination of:

"(a) whether Mrs James (and the other James' interests) would have appealed from the orders made by Einstein J on 5 April 2004;

(b) if so, the likelihood that Mrs James (and the James' interests) would have succeeded in an appeal from the orders of Einstein J in respect of the judgment against Mrs James under the 1 July 1999 Deed in the sum of $355,870;

(c) in any event, if the Court forms the view that Mrs James (and the other James' interests) (i) would not have appealed from the orders made by Einstein J on 5 April 2004, or (ii) would have failed in any such appeal, the prospects that DJZ could have, and would have, in fact, recovered the sum of $355,870 from Mrs James (as distinct from the question whether "there were real prospects of recover from Mrs James");

46 I do not accept the case so advanced. In this case there was an exercise of rights by DJZ under the 1999 deed which succeeded. The value of those rights was assessed to be $355,870. The rights were lost as the result of Mr Pritchard's negligence in relation to 2003 agreement. That loss crystallised when the Court of Appeal gave its judgment. I have also concluded that sum could have been recovered from Mrs James. The possibility of other bases of appeal from Einstein J’s judgment does not arise in the way argued, in these circumstances. There was a successful appeal, which revealed both the negligence in issue and its consequences. Clearly, those advising Mrs James considered whether other grounds of appeal should be pursued. Had it been thought that other sound bases for appeal existed, no doubt they would have been pressed. This is a reality which may not be ignored.

47 The possibility that if there had been no negligence in the drafting of the 2003 agreement, or the appeal had not succeeded on that or some other basis, that DJZ would, in any event, not have sought to enforce its judgment, but would have compromised its rights in later settlement in relation to the joint venture properties, even if accepted, does not assist Mr Pritchard in the way asserted. That a valuable right might later have been used to further some other purpose, does not remove earlier negligence which resulted in the loss of that right. As I accepted in the judgment, that loss has already come home.

Part B: On a correct understanding of the Reasons, DJZ’s claim under item 2 did not succeed and paragraph 400 of the Reasons should be corrected accordingly

48 I do not accept this submission, for the reasons already explained.

Part C: In the further alternative Mr Pritchard is entitled to reasons for the rejection of his submission

49 As I have said, undoubtedly more elaborate reasons could have been given for the conclusions reached. I do not accept, however, that there has not been adequate consideration of the case which Mr Pritchard advanced, or a failure to explain the reason why parts of it were rejected. Not every submission or argument which a party advances must result in detailed explanation as to its rejection.

50 The submission that Mr Pritchard's ‘submission at trial clearly articulated (a) the requirement for the Court to quantify DJZ’s claim for damages in relation to the 2003 sale agreement by reference to the probability that the judgment sum awarded by Einstein J would not have been enforced and, instead would have been varies on appeal, compromised or not capable of full enforcement and (b) the failure of DJZ to prove its loss in that regard’, reveals a fundamental misunderstanding of the Court’s functions. The Court must deal with the issues which require its resolution, in order that the controversy lying between the parties may be justly resolved. That does not mean that every issue raised, or argument advanced must be resolved, for a conclusion to be reached. Nor do parties, by their submissions, ‘articulate’ their requirements to the Court, as to such matters.

51 I concluded that DJZ had proved the loss claimed. The claimed necessity for considering a range of hypothetical situations and probabilities in order to assess the amount of that loss was rejected. I am not convinced that in reaching that conclusion, there was any palpable error.

Part D: In the further alternative, the failure to give any,. Or any adequate reasons in respect of item 2 of DJZ’s schedule of damages constitutes (a) an error of law on the face of the record, or (b) a denial of procedural fairness

52 I do not accept the case so advanced for reasons which I have already explained.

53 It was also argued orally that in most, if not every case where the claim advanced is concerned with the loss of a commercial opportunity, an assessment of future probabilities and hypothetical situations, will be required. The High Court’s judgment in Sellars was relied on to support this proposition. I am not convinced that this argument has force. In Sellars, Brennan J's discussion at 124 does not, for example, seem to me to support what was asserted. As was the case here, some commercial losses will crystallise upon the happening of a particular event. Such an event, as here, may have occurred prior to trial, with the result that there is no necessity for consideration of other, speculative hypotheses as to matters which did not, in fact, occur.

54 The case which DJZ advanced was that it had suffered such a loss when the Court of Appeal gave its judgment. True it is that Einstein J had stayed his orders, pending the hearing of the appeal, but as was accepted for Mr Pritchard, if the appeal had failed, those orders would have been given effect. For the reasons given, DJZ’s case that its loss was quantified by Einstein J’s order and that the loss crystallised, when the Court of Appeal’s judgment was given, succeeded.

55 While no doubt further explanation could have been given for that conclusion, the case had to be dealt in the context of the requirements of the Civil Procedure Act 2005, which requires in s 90 that the Court ‘give such judgment or make such order as the nature of the case requires’ and that when exercising any of its powers it give effect to the overriding purpose of ‘the just, quick and cheap resolution of the real issues in the proceedings’ (s 56). That means that the Court must determine which of the matters over which parties have joined issue, require its resolution in order that the case which has arisen for determination may be justly disposed of. Reasons need to be given for conclusions which are reached as to those matters. In my view, in this case, that does not mean that what is now sought to be insisted on by Mr Pritchard as having been necessary in order to justly dispose of the real issues which lay between the parties in these proceedings, may be accepted.

Orders

56 For the reasons given, I order that the motion be dismissed. Unless the parties wish to be heard on the question of costs, the usual order that costs follow the event means that Mr Pritchard must bear DJZ's costs of the motion.

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Citations

DJZ Constructions Pty Ltd v Paul Pritchard trading as Pritchard Law Group [2010] NSWSC 1197

Most Recent Citation

Kelly v Commissioner of Taxation (No 2) [2012] FCA 689

Cases Citing This Decision

3

Kelly v Commissioner of Taxation (No 2) [2012] FCA 689

Cases Cited

12

Statutory Material Cited

2

Sellars v Adelaide Petroleum NL [1994] HCA 4

Cited Sections

CITATION:	DJZ Constructions Pty Ltd v Paul Pritchard trading as Pritchard Law Group and Ors [2010] NSWSC 1197
JUDGMENT DATE :	21 October 2010
JUDGMENT OF:	Schmidt J
DECISION:	Motion dismissed. Unless the parties wish to be heard on the question of costs, the usual order that costs follow the event means that Mr Pritchard must bear DJZ's costs of the motion.
CATCHWORDS:	PROCEDURE - judgments and orders - amending, varying and setting aside - reasons sought in respect to various findings and reasonings - quantum of damage - whether the Court failed to complete the exercise of its jurisdiction by discounting damages ordered by reference to certain probabilities and hypotheses -whether first defendant was entitled to reasons for rejection of submissions - whether failure to give reasons constituting an error of law and denial of procedural fairness - hypothetical scenarios pressed - motion dismissed - costs
LEGISLATION CITED:	Civil Procedure Act 2005 Uniform Civil Procedure Rules 2005
CATEGORY:	Procedural and other rulings
CASES CITED:	Heenan v Di Sisto [2008] NSWCA 25; [2008] Aust Torts Reports 81-941 Johnson v Perez [1998] HCA 88; (1988) 166 CLR 351 Tabet V Gett [2010] HCA 12; (2010) 240 CLR 537 Willis v The Commonwealth [1946] HCA 22; (1946) 73 CLR 105
PARTIES:	DJZ Constructions Pty Ltd - Plaintiff Paul Pritchard t/as Pritchard Law Group - First Defendant/Cross Claimant Joseph John Gilles - Second Defendant/First Cross Defendant Gregory George Eliades - Third Defendant/Second Cross Defendant David McGovern SC - Fourth Defendant/Third Cross Defendant
FILE NUMBER(S):	SC 2005/269375
COUNSEL:	Mr C Birch SC with Mr M Cleary - Plaintiff Mr A McInerney - First Defendant/Cross Claimant
SOLICITORS:	Pryor Tzannes & Wallis - Plaintiff Yeldham Price O'Brien Lusk - First Defendant/Cross Claimant