J Redman Investments Pty Limited v Malcolm Nelson Johns

The case of J Redman Investments Pty Limited v Malcolm Nelson Johns involved a claim by the plaintiff, a property investor, against the defendant, a solicitor, for professional negligence. The plaintiff alleged that the defendant failed to advise them of the risk of an unregistered second mortgage being placed on their property, did not register the mortgage or lodge a caveat, and thereby caused financial loss to the plaintiff. The dispute was heard in the Supreme Court of New South Wales. The plaintiff sought damages for the defendant’s alleged negligence, which included the costs of obtaining a priority mortgage and interest, as well as legal costs. The defendant, on the other hand, argued that the plaintiff had not mitigated their losses adequately and that the losses were overstated due to the high interest rate applied. The defendant also contended that he was not liable for the entire amount claimed, and that an offer of compromise should be considered in assessing costs.

The primary legal issues before the court were the date of accrual of the cause of action, the extent of the plaintiff's losses, and the defendant's liability for those losses. The court had to determine whether the plaintiff's claim was statute-barred, given the delay in bringing the action. It also needed to assess whether the plaintiff had taken reasonable steps to mitigate their losses and whether the losses claimed were reasonably foreseeable and directly caused by the defendant's negligence. The court further had to consider the defendant's proportionate liability, if any, and the appropriate assessment of costs, including the impact of the defendant's offer of compromise.

The court found that the plaintiff's cause of action had accrued when they became aware, or ought to have become aware, of the unregistered second mortgage and the defendant's failure to act. It was held that the plaintiff's claim was not statute-barred, as they had exercised reasonable diligence in discovering the cause of action. The court assessed the plaintiff's losses, taking into account the interest rate applied, and determined that the plaintiff had mitigated their losses as far as was reasonable. It was found that the defendant was liable for the full amount of the losses claimed, and the court rejected the defendant's arguments regarding proportionate liability. The court also ordered that the defendant pay the plaintiff's costs on a party and party basis up to a certain date, and on an indemnity basis thereafter, reflecting the defendant's failure to make a satisfactory offer of compromise.

The court delivered a verdict in favour of the plaintiff, awarding damages in the sum of $62,572.19, plus interest. The court also ordered that the defendant pay the plaintiff's costs up to and including a specified date on a party and party basis, and on an indemnity basis thereafter. The proceedings were adjourned to a later date to address issues of interest and further costs. The exhibits were returned to the parties as per the court's order.