Fox v Everingham

Case [1983] FCA 277

Re: GEORGE FREDERICK FOX
And: PAUL ANTHONY EDWARD EVERINGHAM and PETER GEORGE HOWARD (1983) 76 FLR 170
No. NT G 28 of 1982
Solicitors - Practice - Interest

COURT

IN THE FEDERAL COURT OF AUSTRALIA


NORTHERN TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Woodward(1), Muirhead(1) and Sheppard(1) JJ.
CATCHWORDS

Solicitors - breach of contract and negligence - solicitors acting for both parties on contract for sale of land upon which vendor would erect house - purchasers enter into possession of substantially completed house before completion of contract - house then destroyed by cyclone - house not insured either by vendor or purchasers - obligations to advise purchasers on salient points of contract, including need to insure - consideration of that obligation in light of particular provisions of contract - quantification of purchasers' loss.

Interest - claim for interest made in writ and statement of claim - legislation applicable in Northern Territory prior to Northern Territory Supreme Court Act 1979 - interest not recoverable - Supreme Court Act 1979, s.84; Northern Territory Supreme Court Act 1961, s.35; Supreme Court Act 1935 (S.A.), s.30C; Civil Procedure Act 1833 (3 & 4 Will.IV. c.42) s.28.

Practice - Northern Territory - Claim for interest - No provision in respect of claim - Procedural matter - Application of procedure of Supreme Court of South Australia - Procedure at commencement of Act only - Imperial statute applicable - No right to interest - Northern Territory Supreme Court Act 1961 (repealed), s. 35 - Supreme Court Act 1935 (S.A.) s. 30C - Civil Procedure Act 1833 (Imp.), s. 28.

Interest - From arising of cause of action to judgment - No statutory provision in Northern Territory - Practice and procedure of Supreme Court of South Australia applicable - Relevant procedure governed by Imperial statute, Civil Procedure Act 1833 - No right to interest - Northen Territory Supreme Court Act 1961 (repealed), s. 35 - Supreme Court Act 1935 (S.A.), s. 30C - Civil Procedure Act 1833 (Imp.), s. 28.

Legal Practitioners - Solicitor and client - Solicitor's retainer - Acting for more than one party - Vendor and purchaser.

Legal Practitioners - Solicitor and client - Duty and client - Negligence acting for both purchaser and vendor - Duty to protect purchaser under terms of contract - Duty to advise purchaser of rights and obligations under contract - Purchaser entering into possession of incomplete property - Failure to insure - Property destroyed by cyclone.

HEADNOTE

Held: (1) Until the enactment of s. 84 of the Supreme Court Act 1979 (N.T.) there was no local statute empowering the award of interest before judgment on any sum and that section did not apply to the proceedings.

(2) The Northern Territory Supreme Court Act 1961 (now repealed), s. 35, provided that where there was no local provision in relation to a matter of practice and procedure the matter should be governed as nearly as might be by the relevant practice and procedure of the Supreme Court of South Australia.

(3) The provisions…

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Details
AGLC
Fox, George Frederick v Everingham, Paul Anthony & Anor [1983] FCA 277 ((1983) 76 FLR 170)
Case
[1983] FCA 277
Decision Date

CaseChat Overview and Summary

Fox v Everingham involved a dispute between the parties over the conduct of their solicitors in a property transaction. The plaintiffs, Mr and Mrs Fox, were the purchasers of a property, and the defendants, Mr and Mrs Everingham, were the vendors. The Foxs alleged that their solicitors, who were also acting for the Everinghams, failed to properly advise them on the risks associated with taking possession of the property prior to the completion of the contract and the need to insure the property against unforeseen events such as natural disasters. The property was substantially completed, but not yet formally transferred, when a cyclone destroyed it. Neither party had insured the property against such events. The case was heard in the Supreme Court of Queensland, and the Foxs sought damages for the loss of their investment in the property.

The primary legal issues before the court were whether the solicitors breached their contractual and professional obligations to the Foxs by failing to advise them to insure the property and whether such a breach resulted in the quantifiable loss claimed by the Foxs. The court considered the particular provisions of the contract of sale and the obligations of the solicitors under the relevant laws and professional conduct rules. The court had to determine whether the solicitors' failure to advise on insurance was a breach of contract or a negligent act, and if so, whether this breach caused the Foxs' loss.

The court found that the solicitors did breach their duty to the Foxs by not advising them adequately on the salient points of the contract, including the need to insure the property. The court held that the solicitors' failure to advise on insurance was both a breach of contract and a negligent act. The court also found that this breach caused the Foxs' loss, as they would have insured the property had they been properly advised, thereby mitigating or avoiding the loss entirely. The court set aside the judgment in favour of the Everinghams and ordered that judgment be entered for the Foxs, remitting the matter to the Supreme Court for the assessment of the Foxs' damages. The court also ordered the Everinghams to pay the Foxs' costs of the appeal and the proceedings to date in the Supreme Court, with the costs of the further proceedings to be in the discretion of that Court.

The final orders of the court were that the appeal be allowed, the judgment in favour of the Everinghams be set aside, judgment be entered for the Foxs, the action be remitted to the Supreme Court for the assessment of the Foxs' damages, the Everinghams pay the Foxs' costs of the appeal and the proceedings to date in the Supreme Court, and the costs of the further proceedings be in the discretion of that Court. The court granted liberty to any party to apply on seven days' notice.

Orders

Orders of the court

1. That the appeal be allowed.

2. That the judgment entered by the Supreme Court in favour of the respondents be set aside.

3. That in lieu thereof judgment be entered for the appellant.

4. That the action be remitted to the Supreme Court for the assessment of the appellant's damages.

5. That the respondents pay the appellant's costs of the appeal and of the proceedings to date in the Supreme Court. The costs of the further proceedings in the Supreme Court are to be in the discretion of that Court.

6. That there be liberty to any party to apply on seven days' notice.

Orders accordingly.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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