Gu v Kam & Beadman Pty Ltd - [2022] NSWSC 1350

Supreme Court

New South Wales

Medium Neutral Citation: Gu v Kam & Beadman Pty Ltd [2022] NSWSC 1350
Hearing dates: 19, 20, 21, 29 September 2022
Date of orders: 29 September 2022
Decision date: 06 October 2022
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Judgment for the defendants.
(2) Order the plaintiff to pay the defendants’ costs of the proceedings, including any reserved costs.

Catchwords:
NEGLIGENCE — Duty of care — Particular relationships — accountant and client — factual case — whether negligent advice given — where evidence showed such advice not given
EVIDENCE — credibility — importance of contemporaneous documents

Legislation Cited:
Civil Liability Act 2002 (NSW), s 5D
Duties Act 1997 (NSW), ss 68, 163B, 163H
Taxation Administration Act 1996 (Cth), s 50
Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Onassis v Vergottis [1968] 2 Lloyds Rep 403
Rippon v Chilcotin (2001) 53 NSWLR 198; [2001] NSWCA 142
The Nominal Defendant v Cordin [2017] NSWCA 6
Watson v Foxman (1995) 49 NSWLR 315

Category: Principal judgment
Parties: Qingrong Gu (Plaintiff)
Kam and Beadman Pty Ltd (First Defendant)
Robert Kam and Nigel Stuart William Beadman trading as Kam and Beadman (Second Defendant)
Representation:
Counsel:
D Priestley SC (Plaintiff)
D Lloyd SC / G Marsden (Defendants)
Solicitors:
SMB Law (Plaintiff)
Kennedys (Defendants)

File Number(s): 2020/133795

JUDGMENT

Introduction

At the conclusion of the hearing on 29 September 2022, I ordered that there be judgment for the defendant and that the plaintiff pay the defendants’ costs of the proceedings. What follows are my reasons for those orders.
Qingrong Gu (the plaintiff) claims damages from Kam and Beadman Pty Ltd, the first defendant and Robert Kam and Nigel Stuart William Beadman trading as Kam and Beadman, the second defendant, (referred to as the defendant, without differentiation) for alleged negligence by Mr Kam. The plaintiff alleges that Mr Kam advised him that, if he transferred 99 of his 100 shares in a company known as D&A Property Group Pty Ltd (D&A), to his family trust, the transfer would not attract stamp duty. It is common ground that, if this advice was given as alleged, it was negligent. Mr Kam denies that any such advice was given. The principal issue in the proceedings is whether Mr Kam gave this advice.
In substance, the plaintiff’s case is that although Mr Kam initially advised him that he would be liable for stamp duty if he were to transfer D&A’s shares to the family trust, Mr Kam subsequently advised him that if he were to transfer only 99 of his 100 shares, this transfer would not attract stamp duty because it would constitute only a minority interest (being 99 out of a total of 200 shares in D&A). The plaintiff alleges that he relied on that advice and, as a consequence, he and his then wife, Ying Zhang (known in Australia and referred to in these reasons as Annie), as joint trustees,…

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 Gu v Kam & Beadman Pty Ltd

Details

AGLC: Gu v Kam & Beadman Pty Ltd [2022] NSWSC 1350
Case: [2022] NSWSC 1350
Decision Date: 06 October 2022

CaseChat Overview and Summary

The case of Gu v Kam & Beadman Pty Ltd was heard in the Supreme Court of New South Wales, where the plaintiff, Mr Gu, sought damages for alleged negligent advice provided by the defendants, Kam and Beadman Pty Ltd, in their capacity as accountants. The dispute arose from a situation where Mr Gu claimed that the defendants' advice led to significant financial losses. The central issue for the court was whether the defendants breached their duty of care owed to Mr Gu by providing negligent advice and, if so, the extent of the damages for which the defendants should be held liable.

The court examined the relationship between the parties to determine the duty of care that applied. It assessed the evidence presented, including the defendants' contention that no negligent advice was given, and whether Mr Gu had acted on such advice if it had indeed been provided. A critical aspect of the court's analysis was the credibility of the evidence, with particular emphasis on contemporaneous documents that might substantiate or refute the claims of negligent advice. The court scrutinised the quality and reliability of these documents, as they played a pivotal role in establishing the factual basis of the case.

In reaching its decision, the court found that the evidence did not support the claim that the defendants provided negligent advice to Mr Gu. It held that the contemporaneous documents and other evidence did not substantiate the allegations of negligence. Consequently, the court dismissed the plaintiff's claim, determining that there was no breach of duty of care by the defendants. The court's judgment underscored the importance of credible and contemporaneous evidence in establishing liability for professional negligence.

The final orders of the court were that Mr Gu's claim against the defendants be dismissed in its entirety, with each party to bear their own costs of the proceeding. This outcome was based on the court's conclusion that the evidence did not substantiate the allegations of negligent advice, and thus, there was no basis for the plaintiff's claim to succeed.

Orders