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Edmund James Bateman v Face Accountants Pty Limited

Edmund James Bateman v Face Accountants Pty Limited

Case [2010] NSWSC 1355 1 December 2010

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CITATION: Edmund James Bateman v Face Accountants Pty Limited [2010] NSWSC 1355
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 8, 9, 10, 15 & 16 November 2010

JUDGMENT DATE :
1 December 2010

JUDGMENT OF: Hammerschlag J

DECISION: Plaintiff's claim dismissed

CATCHWORDS: DAMAGES – NEGLIGENCE – misleading or deceptive conduct – Trade Practices Act 1974 (Cth) – Fair Trading Act 1987 (NSW) – causation – whether by the defendants’ conduct the plaintiff suffered loss or damage – the plaintiff sought specialist tax advice from the defendants concerning the exercise by him of options to acquire shares in a public company for which he worked – they did not advise him that upon exercise he would incur a significant tax liability – when the liability became known to him he believed he could not sell the shares because he held confidential information about the company – defendants accepted liability for such loss and damage as was caused by their conduct – plaintiff promoted two alternative scenarios as to what he would have done in place of what he in fact did – whether loss should be assessed on the basis that the plaintiff lost a commercial opportunity – HELD – held that the case was not one of the loss of a commercial opportunity – that the plaintiff needed to establish either the first scenario or the second scenario to the requisite standard and that one or the other was more likely than what he in fact did – he failed to establish either to the requisite standard – he also failed to establish that he could not sell the shares or that he reasonably believed he could not – he also failed to establish the quantum of any loss resulting from the second scenario

LEGISLATION CITED: Income Tax Assessment Act 1936 (Cth)
Trade Practices Act 1974 (Cth)
Fair Trading Act 1987 (NSW)
Corporations Act 2001(Cth)

CATEGORY: Principal judgment

CASES CITED: Tabet v Gett (2010) 240 CLR 537
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Sellars v Adelaide Petroleum NL (1992) 179 CLR 332 at 349-350
The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638
Daniels v Anderson (1995) 37 NSWLR 438
Rosenberg v Percival (2001) 205 CLR 434
Jones v Dunkel (1959) 101 CLR 298
Troulis v Vamvoukakis [1998] NSWCA 237

PARTIES: Edmund James Bateman - Plaintiff
Face Accountants Pty Limited - First Defendant
Michelle Pearce - Second Defendant

FILE NUMBER(S): SC 2009/298655

COUNSEL: R.R.I. Harper SC [Plaintiff]
M.J. Windsor SC with D.A. Lloyd [Defendants]

SOLICITORS: Massey Bailey Solicitors & Consultants [Plaintiff]
Kennedys (Australia) Ltd [Defendants]

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THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

HAMMMERSCHLAG J

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.

Continue reading Edmund James Bateman v Face Accountants Pty Limited

Details

AGLC: Edmund James Bateman v Face Accountants Pty Limited [2010] NSWSC 1355
Case: [2010] NSWSC 1355
Decision Date: 1 December 2010

CaseChat Overview and Summary

In the matter of Edmund James Bateman versus Face Accountants Pty Limited, the dispute before the court centred on the claim of the plaintiff, Bateman, for damages arising from the defendants' alleged negligence and misleading or deceptive conduct. The defendants, Face Accountants, had provided the plaintiff with specialist tax advice concerning the exercise of options to acquire shares in a public company for which he was employed. The plaintiff alleged that the defendants failed to inform him of the significant tax liability that would result from exercising these options. Upon discovering this liability, the plaintiff claimed that he could not sell the shares due to holding confidential information about the company. The case was heard in the Federal Court of Australia.

The central legal issues the court was required to determine were whether the defendants' conduct led to the plaintiff suffering loss or damage and, if so, the appropriate assessment of such loss. The plaintiff advanced two alternative scenarios suggesting what he might have done if he had been properly advised by the defendants. The court needed to ascertain whether the plaintiff could substantiate either scenario as more likely than what he actually did, thereby establishing causation and the extent of any resulting loss.

The court found that the plaintiff had not successfully established either of the proposed alternative scenarios to the necessary standard. Moreover, the plaintiff could not demonstrate that he was unable to sell the shares or that he reasonably believed he could not. Consequently, the court ruled that the plaintiff failed to prove the causation and quantum of the loss he claimed. As a result, the plaintiff's claim for damages was dismissed.

No final orders were made as the plaintiff's claim for damages was dismissed outright, and the court found that the plaintiff could not establish the requisite causation and quantum of loss.

Orders