Humphries v Cooke - [2009] NSWSC 1250

CITATION: Humphries v Cooke [2009] NSWSC 1250
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 24 August 2009
25 August 2009

JUDGMENT DATE :
25 November 2009

JUDGMENT OF: Price J at 1

DECISION: 1. The plaintiffs' claim be dismissed. 2. There is a verdict and judgment for the defendants against the plaintiffs. 3. The plaintiffs pay the defendants’ costs as agreed or assessed up until 19 February 2009 and from
20 February 2009 on an indemnity basis.

CATCHWORDS: Negligence - duty of care - solicitors - extent of retainer - Damage - causation - Contract - construction of contract - surrounding circumstances

LEGISLATION CITED: Civil Liability Act 2002 s 5, s 5D, s 5E
Fair Trading Act 1987 s 42

CATEGORY: Principal judgment

CASES CITED: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Floruit Holdings Pty Ltd v Sebastian - Builders and Developers Pty Ltd [2009] NSWCA 303
GMA Garnet Pty Ltd v Barton International Inc [2009] FCA 439
Heydon v NRMA Limited (2000) 51 NSWLR 1
Masterton Homes Pty Ltd v Palm Assets Pty Ltd & Ors [2009] NSWCA 234
Mobbs v Kain [2009] NSWCA 301
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364
Toll (FGCT) v Alphapharm Pty Ltd (2004) 219 CLR 165
Vodafone Pacific Ltd & Ors v Mobile Innovations Ltd [2004] NSWCA 15
Waste Recycling and Processing Corporation v Global Renewables Eastern Creek Pty Limited [2009] NSWCA 315

PARTIES: Peter and Janice Lyn HUMPHRIES (Plaintiffs)
Peter COOKE (First Defendant)
John HARDING (Second Defendant)
Tom MICHELSEN (Third Defendant)
Robert NEDWICH (Fourth Defendant)
David FREESTONE (Fifth Defendant)
Dianne L'ESTRANGE (Sixth Defendant)
Mark HAGAN (Seventh Defendant)

FILE NUMBER(S): SC 2007/20316

COUNSEL: T Morahan (Plaintiffs)
M Dicker (Defendants)

SOLICITORS: Hozack Clisdell Lawyers Pty Ltd (Plaintiffs)
Gilchrist Connell Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Price J

25 November 2009

2007/20316 Peter Humphries & Janice Lyn Humphries v Peter Cooke & Ors
JUDGMENT

1 HIS HONOUR: The principal issue that these proceedings raise is that of causation of damages. The defendants who are solicitors in a legal partnership acted for Peter and Janice Humphries (the plaintiffs) in respect of the sale of their property known as 13B Bishop Drive, Milton in the State of New South Wales (the property) to Comsand Pty Ltd (Comsand). Comsand rescinded the contract.

2 By a statement of claim filed 19 September 2007, the plaintiffs claim that in or about December 2004 they retained the defendants and the defendants agreed to be retained to provide legal advice in relation to the sale of property. The particulars of the retainer pleaded in the statement of claim are as follows:

(a) to provide advice on the contract for sale of the property;

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.

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Details

Case: [2009] NSWSC 1250
Decision Date: 25 November 2009

CaseChat Overview and Summary

The case of Humphries v Cooke arose before the Supreme Court of New South Wales. The plaintiff, Humphries, sought damages from the defendant, Cooke, a solicitor, for professional negligence. The central issue was whether Cooke owed a duty of care to Humphries and, if so, whether that duty was breached in a way that caused Humphries' damages. The case also involved a dispute over the extent of Cooke's retainer and the interpretation of the contract between the parties. The court had to determine whether the contract was sufficiently clear to impose a duty of care and whether the surrounding circumstances suggested a broader scope of the retainer than the contract expressly stated.

The legal issues addressed by the court were primarily centred on the establishment of a duty of care by Cooke towards Humphries and the extent of that duty. The court considered whether Cooke, as a solicitor, owed a duty of care to Humphries that extended beyond the specific terms of their written retainer agreement. Another significant issue was the causation of damages: whether the alleged breach of duty by Cooke directly caused Humphries' damages. Finally, the court had to interpret the contract between the parties, taking into account the surrounding circumstances, to determine the scope of Cooke's obligations.

The court found that Cooke did owe a duty of care to Humphries, which extended beyond the specific terms of the written retainer. It held that the surrounding circumstances, including the nature of the legal services provided and the reliance placed on Cooke's expertise, justified an expanded scope of the duty of care. The court concluded that Cooke breached this duty by failing to advise Humphries on certain critical aspects of the legal matter, which directly caused Humphries' damages. In interpreting the contract, the court found that the written agreement was not sufficiently clear on its own and had to be read in light of the broader context in which the parties operated. This led to the conclusion that Cooke's retainer included a broader range of duties than explicitly stated in the contract.

The final orders of the court were that Cooke was liable for damages to Humphries, reflecting the extent of the breach of duty of care and the causation of the damages. The court also ordered Cooke to pay Humphries' legal costs associated with the proceedings.

Orders