Jackson v Abram - [2015] SASCFC 175

Supreme Court of South Australia
(Full Court: Civil)
JACKSON & ANOR v ABRAM & ANOR
[2015] SASCFC 175
Judgment of The Full Court
(The Honourable Justice Peek, The Honourable Justice Stanley and The Honourable Justice Lovell)
4 December 2015
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES
TORTS - NEGLIGENCE - ESSENTIALS OF ACTION FOR NEGLIGENCE - WHERE ECONOMIC OR FINANCIAL LOSS - CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE - PARTICULAR PERSONS AND SITUATIONS - PROFESSIONAL ADVISERS
PROCEDURE - COSTS - APPEALS AS TO COSTS - WRONG EXERCISE OF DISCRETION
Appeal from a judgment in which a Judge of the District Court awarded Mr Jackson damages against Mr Abram in the sum of $288,240. At trial the appellants alleged that they had suffered losses in the vicinity of $3.9 million as a result of negligent advice and breaches of statutory duty. The appellants engaged the respondents to perform accounting and taxation services. The case for the appellants was that, in reliance on advice given by the respondents, they had invested in a number of agricultural managed investment schemes. These schemes were promoted and managed by the Great Southern Group (“Great Southern”). All of these schemes ultimately failed. The judge dismissed the claim by the second appellant. The judge dismissed most of Mr Jackson’s claims. However, the judge found that Mr Abram had negligently failed to advise Mr Jackson of the need to diversify his investments so that he did not have such a large capital sum invested exclusively in managed agricultural investments generally and Great Southern schemes particularly.
Whether the trial judge erred in finding that Mr Abram had given a Financial Services Guide (FSG) to Mr Jackson in November 2004; in dismissing the appellants’ claim in relation to the 2005 plantations project; in finding that Mr Abram was not liable for the full value of the appellants’ loss in relation to the 2006 cattle project; in finding that Mr Abram was not liable for the full value of the appellants’ loss in relation to the 2007 cattle project; in dismissing the appellants’ claim in relation to the 2008 wine grape project; in failing to find Mr Abram was negligent in not following mandatory requirements set out in the Great Southern Authorised Representative Compliance Manual and the Corporations Act 2001 (Cth); in finding that the award of damages had to be reduced by the amount of the taxation deductions enjoyed from the relevant investments; in failing to award punitive or exemplary damages; and in the exercise of his discretion by awarding costs against the appellants.
Held per Stanley J (Peek J and Lovell J agreeing) allowing the appeal:
1. The judge’s finding that Mr Abram gave Mr Jackson a copy of the FSG has not been shown to be contrary to incontrovertible fact or uncontested testimony. It is not a finding with which I would interfere. This ground must fail (at [37] and [39]).
2. The judge found that the advice to invest the sum of $15,000 in the plantations project in the 2005 tax year was appropriate. There is no basis to interfere with that finding (at [42]).
3. The judge erred in not finding that Mr Abram was liable in damages to Mr Jackson for a loss from his investment in the 2006 cattle project in the sum of $119,000. This ground succeeds. The amount lost by Mr Jackson due to the negligence of Mr Abram must be increased by $39,000 to $119,000 (at [56] and [57]).
4. The judge erred in not finding Mr Abram liable for the loss of the entire $140,000 invested by Mr Jackson in the 2007 cattle project. This ground succeeds. The amount lost by Mr Jackson due to the negligence of Mr Abram must be increased by $60,000 to $140,000 (at [61] and [64]).
5. Mr Abram did not make any recommendation to Mr Jackson to invest in the 2008 Grape Wine Income Project. No error on the part of the judge has been demonstrated (at [73] and [74]).
6. The judge found that Mr Abram did give Mr Jackson a FSG and in most cases produced statements of advice or a record of advice which was signed by Mr Jackson. There is no basis for this Court to interfere with those findings. In any event, even if I formed the view that Mr Abram had not followed mandatory requirements laid down in the Great Southern Authorised Representative Compliance Manual and the Corporations Act 2001 (Cth), those factors were not causative of Mr Jackson’s loss. This ground must fail (at [77] and [78]).
7. The judge found that Mr Jackson had the benefit of taxation deductions in respect of the investments and those benefits should be brought to account in assessing damages. There was no error in the approach taken by the judge. Notwithstanding this, it is necessary to recalculate the damages award because the judge erred in calculating the amount lost by Mr Jackson due to the negligence of Mr Abram (at [92]).
8. Even if it could have been proved that Mr Abram had been involved in providing negligent financial advice to other persons, that does not establish that he acted consciously in contumelious disregard of Mr Jackson’s rights. The complaint that the judge erred in failing to award punitive or exemplary damages must fail (at [103] and [104]).
9. The appeal in relation to costs must be allowed. First, it must be allowed because the effect of these reasons is to increase the judgment sum to which Mr Jackson is entitled. This requires the discretion in relation to awarding costs to be exercised afresh. Second, in any event, the judge’s discretion miscarried (at [111]).
10. Appeal allowed. Judgment and the order for costs set aside. Judgment entered for Mr Jackson against Mr Abram in the sum of $412,242. Mr Abram is to pay Mr Jackson’s costs of and incidental to the trial on a party/party basis (at [122]).
Corporations Act 2001 (Cth) 471B, 911A, Chapter 7 Part 7.7, 953B, 953B(2), 911A(2), 1041H; District Court Supplementary Rules 2014 (SA) r 208; Supreme Court Supplementary Rules 2014 (SA) r 217; District Court Rules 2006 (sA) r 187, r 188, referred to.
Jackson & Anor v Abram & Anor [2014] SADC 118; Jackson & Anor v Abram & Anor Reasons of Judge Clayton, 24 September 2014; Fox v Percy (2003) 214 CLR 118; Hedley Byrne & Co Ltd v Heller & Partners [1964] AC 465; Mbakwe v Sarkis [2009] NSWCA 330; Mutual Life and Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556; Mutual Life and Citizens’ Assurance Co Ltd v Evatt [1971] AC 793; Shaddock & Associates Pty Ltd v Parramatta City Council (No. 1) (1981) 150 CLR 225; San Sebastian Pty Ltd v The Minister Administering the Environmental Planning and Assessment Act 1979 (NSW) (1986) 162 CLR 340; Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1995-1997) 188 CLR 241; Tomasetti v Brailey [2012] NSWCA 399; Gould v Vaggelas (1985) 157 CLR 215; House v King (1936) 55 CLR 499; Duncan and Weller Pty Ltd v Mendelson & Ors [1989] VR 386; Associated Confectionary (Australia) Ltd v Mineral and Chemical Traders Pty Ltd (1991) 25 NSWLR 349; Normington v Frost & Anor (1982) 104 LSJS 180; Flavel v Mason (No 2) (1994) 178 LSJS 340, considered.

JACKSON & ANOR v ABRAM & ANOR
[2015] SASCFC 175
Full Court: Peek, Stanley and Lovell JJ

PEEK J: I agree with the orders proposed by Stanley J and with his reasons.
STANLEY J:
Introduction
This is an appeal from a judgment in which a Judge of the District Court awarded Mr Jackson damages against Mr Abram in the sum of $288,240. At trial the appellants alleged that they had suffered losses in the vicinity of $3.9 million as a result of negligent advice and breaches of statutory duty. The appellants engaged the respondents to perform accounting and taxation services. The respondents carried out accounting tasks including the incorporation of the second appellant, the establishment of a trust and a self managed superannuation fund, and the preparation of taxation returns for the appellants.
The case for the appellants was that, in reliance on advice given by the respondents, they had invested in a number of agricultural managed investment schemes. These schemes were promoted and managed by the Great Southern Group (“Great Southern”). They were the:
·2005 plantations project – $15,000
·2006 cattle project – $140,000
·2007 cattle project – $140,000
·2007 olive project and options – $48,000
·2008 wine grape project – $102,200
·Project Transform
All of these schemes ultimately failed. The judge dismissed the claim by the second appellant. The judge dismissed most of Mr Jackson’s claims in relation to the respondents’ advice to invest in these schemes. However, the judge found that Mr Abram had negligently failed to advise Mr Jackson of the need to diversify his investments so that he did not have such a large capital sum invested exclusively in managed agricultural investments generally and Great Southern schemes particularly. The judge found that Mr Abram was negligent in three ways. First, because he failed to warn Mr Jackson of the risk of having such a large proportion of his investment in Great Southern. Secondly, because he failed to advise Mr Jackson to spread the risk. Thirdly, because he actively encouraged Mr Jackson to place further investments with Great Southern after Mr Jackson had expressed concern about “putting all his eggs in one basket”.
Mr Jackson also appeals from the orders awarding costs of the trial. The judge ordered that Mr Abram was to pay Mr Jackson’s costs until 4 July 2013 and Mr Jackson was to pay Mr Abram’s costs from 4 July 2013 until 24 September 2014. The basis of this order was the appellants’ failure to accept a filed offer from the respondents of 19 June 2013 to consent to judgment in the sum of $257,000 plus interest and costs.
Mr Jackson is a systems engineering contractor. The second appellant is the trustee of the G & P Jackson Family Trust. Mr Abram is an accountant and financial advisor. Mr Abram also was an authorised representative of Great Southern. The second respondent is the accounting firm conducted by Mr Abram. It is now in liquidation. It was in liquidation at the time of the trial. There was a stay of the proceedings against it pursuant to s 471B of the Corporations Act 2001 (Cth) (“the Act”). The liquidator took no part in the action. The appellants proceeded against Mr Abram only.
At trial Mr Jackson and Mr Abram gave evidence. Events covering the period from October 2004 until the liquidation of Great Southern in 2009 were canvassed. The trial judge formed an adverse view of Mr Jackson’s credit and reliability. He found that generally Mr Jackson’s evidence demonstrated evasiveness and a lack of candour which made it difficult to accept any of his evidence.[1] On the other hand, he also found that, at all material times, Mr Abram had a conflict of interest in advising the appellants by reason of his interest in deriving a commission from investments in Great Southern which he sold to them.
[1] [2014] SADC 118 at [49] – [50] and [87].
On appeal, as at trial, Mr Jackson appeared in person and by leave of the Court for the second appellant. The appellants filed extensive written submissions of more than 110 pages. Many of these submissions extend beyond the grounds of appeal. To the extent they do so, I have disregarded them.
Factual background
Mr Jackson worked in the defence industry. He was an employee initially but eventually became an independent contractor. In order to provide contract services he sought advice on incorporation.
In about November 2004, Mr Jackson approached Mr Abram at his business premises in Salisbury. Consequently, the second appellant, Arian Systems Pty Ltd (“Arian”), was incorporated. Mr Jackson and his wife were appointed directors of Arian.
In addition to the incorporation of Arian, Mr Abram assisted Mr Jackson with his tax affairs and with the establishment of both the G & P Jackson Family Trust[2] and the G & P Jackson Retirement Fund. The G & P Jackson Retirement Fund was a self-managed superannuation fund for Mr Jackson and his wife. Around the time Arian was established, Mr Abram told Mr Jackson about the tax-deductible agricultural investment schemes in Great Southern. Mr Abram was an authorised representative of Great Southern and had an Australian Financial Services Licence. He was paid commission and marketing fees by Great Southern. Mr Abram was required to disclose to a potential investor the fact that he received such remuneration from Great Southern. The judge found that Mr Abram had disclosed to Mr Jackson that he was a representative of Great Southern and that he received payment by way of commissions.
[2] This was linked to the company for the purpose of income distribution. See Transcript 357.
Mr Jackson gave evidence that he only sought accounting services from Mr Abram in relation to Arian and superannuation. Mr Jackson denied ever seeking financial or investment advice from Mr Abram. It was common ground at the trial that Mr Abram introduced Mr Jackson to the investment opportunities in Great Southern. Eventually Mr Jackson agreed he was interested in reducing his tax liability, which was one of the reasons he chose to invest in Great Southern. Ultimately, Mr Jackson agreed to become an investor in a number of Great Southern investment schemes.
Plantations 2005 project[3]
[3] This is the only investment project in the name of Arian. See Transcript 925.
In about May 2005, Mr Jackson went to see Mr Abram at his office for the purpose of tax and accounting advice.[4] Mr Jackson informed Mr Abram that he was planning to invest about $120,000 into his superannuation.[5] Mr Abram informed Mr Jackson of the Plantations 2005 project. This involved investment in tree farming over a 10-year period. Mr Abram represented that this project was 100 per cent tax-deductible and that the expected return after 10 years would be double the initial investment.[6] Mr Jackson agreed to Arian investing $15,000 in the project and on 20 December 2005 he was issued with five plantation woodlots in the south region of the Tiwi Islands. The balance of $105,000 was paid into the G & P Jackson Retirement Fund.
[4]    Transcript 48.
[5]    Transcript 52.
[6]    Transcript 721.16-18.
2006 Beef Cattle project
In about May 2006, Mr Jackson went to see Mr Abram at his office in relation to accounting for Arian.[7] At this time Mr Abram introduced the 2006 Beef Cattle project to Mr Jackson. As the name suggests, this was an investment in beef cattle herds for the purpose of carrying on the business of commercially breeding and producing beef cattle predominantly for domestic consumption. Mr Abram advised that Mr Jackson could expect returns amounting to 146 per cent of his investment over the six years of the project.
[7] Transcript 297 and 298.
On about 14 May 2006, Mr Jackson telephoned Mr Abram to discuss his intention to invest $60,000 in the 2006 Beef Cattle project and $80,000 in superannuation. The judge found Mr Abram advised him to invest the whole $140,000 in the project. He did so. On 27 July 2006, Mr Jackson was issued with 28 droves of cattle.
2007 Beef Cattle project
On 23 October 2006, Mr Jackson was invited by Mr Abram to attend a function for cattle investors at the Hilton Hotel in Adelaide.[8] The judge found that the 2007 Beef Cattle project was first raised by Mr Abram at this function. Mr Abram discussed with Mr Jackson the expected returns and advised him to invest the same amount he had in the 2006 Beef Cattle project. On 24 October 2006, Mr Jackson sent an email to Mr Abram to “confirm the details of our discussion”[9] and to inform Mr Abram of his intention to invest in the project.
[8] Transcript 84.
[9] Exhibit P7; CB 407.
On about 26 October 2006,[10] Mr Jackson attended Mr Abram’s office[11] to execute the documentation. On 8 August 2007, Mr Jackson was issued with 28 droves of cattle. The amount paid for the investment was $140,000.[12]
[10] Transcript 162.
[11] Transcript 161 - 162.
[12] Excluding GST of 10%.
2007 Diversified Olives Income Project and Options
On 6 June 2007, Mr Jackson contacted Mr Abram by email seeking advice about reducing his tax liability for the 2006-2007 financial year. Mr Jackson expressed an interest investing in grapes, olives or walnuts but felt “overexposed with having all [his] eggs in Great Southern.”[13] Mr Abram responded by email recommending both the Great Southern Olive Project and Almond Project. Mr Jackson informed Mr Abram that he was interested in investing in the Olive Project and asked for the paperwork to be organised.
[13] Transcript 563-564.
On 8 June 2007, Mr Jackson attended Mr Abram’s office to execute the documents required. Mr Abram was not present at the time. However, a staff member spoke to Mr Jackson and organised for him to sign the required documentation. The staff member also gave Mr Jackson a Prospectus.[14]
[14] Transcript 106.
On 8 August 2007, Mr Jackson was issued with eight olive grove lots over a total area of 0.8 hectares in Western Australia. The amount paid for this investment was $46,000.[15] In broad terms, the investment involved the growth and sale of olives for the production of organic extra virgin olive oil. Investors were expected to receive annual harvest proceeds.
[15] Excluding GST of 10%.
On 31 October 2007, Mr Jackson was also issued with eight options in the Great Southern Olives Company Limited, the issue price being $250 per option. Mr Jackson, as an option holder, was notified that at the completion of the project, he was entitled to subscribe for 250 fully paid ordinary shares in the company for each option held, at no additional cost. Mr Jackson paid $2,000 for this investment.
2008 Wine Grape Income Project
On 28 February 2008, Mr Jackson contacted Mr Abram to inform him that he wanted to invest online in some investment projects himself.[16] The judge found that the following day he received a letter from Mr Abram dated 28 February 2008[17] in relation to the 2007-2008 tax planning period. The letter, which I will refer to in more detail later in these reasons, enclosed summaries of two products which were said to offer outstanding tax advantages and expected returns. They were the 2008 Wine Grape Income Project and the 2008 Diversified Olives Income Project. The letter suggested Mr Jackson contact Mr Abram so his situation could be reviewed and appropriate recommendations and referrals made.
[16] Transcript 585 and 587.
[17] Transcript 872, 905 and 927.
Mr Jackson invested $111,000 in the 2008 Wine Grape Income Project. The application was made on 15 May 2008.[18] The investment was made by Mr Jackson through National Finance Solutions and not through Mr Abram or the second appellant. It was made without seeking any advice from Mr Abram. However, according to Mr Jackson, he was induced to invest in the Wine Grape project over other non Great Southern projects because Mr Abram had told him that Great Southern was one of the largest and most stable agriculture businesses in Australia.[19]
[18] Transcript 491.
[19] Transcript 591.
On 29 July 2008, Mr Jackson was issued with 37 vine lots over a total area of 3.7 hectares. The project involved the commercial growing, harvesting and selling of wine grapes for use in the production of high quality bottled wine.
Project Transform
In August 2008, Project Transform was announced.[20] The essence of the scheme was the compulsory exchange of an interest in the 2006 and 2007 Beef Cattle projects for shares in Great Southern Ltd. On 4 February 2009, Mr Jackson was allocated 322,336 shares. As a result he lost his interest in the cattle projects. At that time the shares had a value of $49,962. Had he chosen to do so he could have sold the shares. He did not do so. When Great Southern was placed in liquidation the shares became worthless. The judge dismissed the appellants’ claim that Mr Abram was negligent in failing to advise the sale of the shares and in advising Mr Jackson in September 2008 that he would “continue to receive around 10 per cent yield tax free for as long as he held the shares and then he could realise the capital gains when the share market recovers”. The grounds of appeal do not complain about this finding. This is unsurprising given the shares were compensation for Mr Jackson’s loss of the investments in the beef cattle projects for which he sought compensation separately. As the judge held, if he was to have received compensation for both the beef cattle projects and the loss of the value of the shares that would amount to double compensation.
[20] See Exhibit D158; CB 1068.
Great Southern

Eventually all the investment schemes failed and Great Southern was placed in liquidation on 19 November 2009.
Grounds of appeal
The appellants’ notice of appeal sets out 14 grounds. These grounds can be distilled to complaints that the trial judge erred in:
1Finding that Mr Abram had given a Financial Services Guide to Mr Jackson in November 2004;
2Dismissing the appellants’ claim in relation to the Plantations 2005 project;
3Finding that Mr Abram was not liable to the appellants for the full value of the appellants’ loss in relation to the 2006 cattle project;
4Finding that Mr Abram was not liable to the appellants for the full value of the appellants’ loss in relation to the 2007 cattle project;
5Dismissing the appellants’ claim in relation to the 2008 wine grape project;
6Failing to find Mr Abram was negligent in not following mandatory requirements set out in the Great Southern Authorised Representative Compliance Manual and the Act;
7Finding that the award of damages had to be reduced by the amount of the taxation deductions enjoyed from the relevant investments;
8Failing to award punitive or exemplary damages; and
9The exercise of his discretion by awarding costs against the appellants.
Approach on appeal
The principles applicable to the approach to be taken by an appellate court on an appeal by way of rehearing in reviewing findings of fact are well settled. The position is definitively stated by the High Court in Fox v Percy.[21] Gleeson CJ, Gummow and Kirby JJ said:[22]
[21] [2003] HCA 22, (2003) 214 CLR 118.
[22] [2003] HCA 22 at [23], [25] - [29], [41], (2003) 214 CLR 118 at 125 – 128, 131 – 132.
On the one hand, the appellate court is obliged to “give the judgment which in its opinion ought to have been given in the first instance”. On the other, it must, of necessity, observe the “natural limitations” that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
…
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge’s reasons. Appellate courts are not excused from the task of “weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect”. In Warren v Coombes, the majority of this Court reiterated the rule that:
“[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.”
As this Court there said, that approach was “not only sound in law, but beneficial in . . . operation”.
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal. The cases mentioned remain the instruction of this Court to appellate decision-making throughout Australia. However, that instruction did not, and could not, derogate from the obligation of courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.
Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being “incontrovertible”, an appellate conclusion may be reached that the decision at trial is “glaringly improbable” or “contrary to compelling inferences” in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must “not shrink from giving effect to” its own conclusion.
…
... [T]he appellant had to rely before this Court on the advantages that the primary judge enjoyed in seeing the parties, and Mr Murdoch, give their evidence and in preferring the evidence of the appellant and Mr Murdoch to that of the respondent. The Court of Appeal was bound to make due allowance (as it did) for such advantages. The trial judge sat through four days of trial before giving his decision. He did so at a time when the impression made by the witnesses was still clearly in his mind. The Court of Appeal was bound to afford respect to the endeavour of the judge to give the correct and lawful conclusion to the puzzle presented to him. Clearly, the Court of Appeal was right to reject the respondent’s belated suggestion of bias, which should not, in our view, have been made. No doubt, the Court of Appeal also took into account the unexpressed considerations that went into the judge’s conclusion. No judicial reasons can ever state all of the pertinent factors; nor can they express every feature of the evidence that causes a decision-maker to prefer one factual conclusion over another.
(Citations omitted).
The issues raised by the parties on appeal involve questions of law, findings of fact and inferences to be drawn from the facts as found by the judge. This Court is in as good a position as the judge to determine those issues that involve questions of law and inferences to be drawn from facts as found by the judge. I have undertaken my own review of the evidence and formed my own view in relation to those issues, recognising the advantage available to the trial judge in his assessment of the credibility and reliability of the witnesses. Accordingly, I have approached the exercise of the appellate function conscious of that advantage and giving due respect to the judge’s assessment of the evidence of each of the witnesses, including, in particular, Mr Jackson. I have reviewed the evidence to determine whether any finding the subject of challenge is inconsistent with uncontested testimony or incontrovertible facts, glaringly improbable or contrary to compelling inferences, and whether there is a basis or reason to disturb the judge’s findings in this respect.
The duty of a financial adviser
The judge found that Mr Abram owed the appellants a duty of care.[23] There is no error in this finding. The nature of the relationship between Mr Jackson and Mr Abram gave rise to a common law duty of care on the part of Mr Abram to Mr Jackson in the provision of taxation, accounting and investment advice. A duty of care arises in circumstances in which advice is sought from a professional possessing some special skill or judgment where the professional knows or ought to know that reliance has been placed upon the advice by the person seeking it.[24]
[23] [2014] SADC 118 at [346].
[24] Hedley Byrne & Co Ltd v Heller & Partners [1964] AC 465 at 503.
The nature of the duty was discussed in Mbakwe v Sarkis[25] where Handley AJA, with whom Allsop P and Ipp JA agreed, said:[26]
… The classic statement in Australia of the circumstances which will give rise to a duty of care in the giving of information and advice is that of Barwick CJ in Mutual Life and Citizens Assurance Co Ltd v Evatt [1968] HCA 74, 122 CLR 556, 571:
“… the circumstances must be such as to have caused the speaker or be calculated to cause a reasonable person in the position of the speaker to realise that he is being trusted by the recipient of the information or advice to give information which the recipient believes the speaker to possess or to which the recipient believes the speaker to have access or to give advice, about a matter upon or in respect of which the recipient believes the speaker to possess a capacity or opportunity for judgment, in either case the subject matter of the information or advice being of a serious or business nature. It seems to me that it is this element of trust which the one has of the other which is at the heart of the relevant relationship. I should think that in general this element will arise out of an unequal position of the parties which the recipient reasonably believes to exist. The recipient will believe that the speaker has superior information, either in hand or at hand with respect to the subject matter or that the speaker has greater capacity or opportunity for judgment than the recipient … the speaker must realise or the circumstances be such that he ought to have realised that the recipient intends to act upon the information or advice … in connection with some matter of business or serious consequence … Further it seems to me that the circumstances must be such that it is reasonable … for the recipient to seek, or to accept, and to rely upon the utterance of the speaker.”
[25] [2009] NSWCA 330.
[26] [2009] NSWCA 330 at [25].
Although the majority judgment in Mutual Life and Citizens Assurance Co Ltd v Evatt[27] was reversed on appeal to the Privy Council,[28] the statement of principle by Barwick CJ has subsequently been accepted by the High Court as authoritative.[29]
[27] [1968] HCA 74, (1968) 122 CLR 556.
[28] Mutual Life and Citizens’ Assurance Co Ltd v Evatt [1971] AC 793.
[29] Shaddock & Associates Pty Ltd v Parramatta City Council (No. 1) [1981] HCA 59, (1981) 150 CLR 225; San Sebastian Pty Ltd & Ors v The Minister Administering the Environmental Planning and Assessment Act 1979 (NSW) [1986] HCA 68, (1986) 162 CLR 340; Esanda Finance Corporation Ltd v Peat Marwick Hungerfords [1995 – 97] HCA 8, (1995 – 97) 188 CLR 241 at 249 – 250, 255 and 261.
In Tomasetti v Brailey[30] the New South Wales Court of Appeal said the test to be applied in the case of the duty owed by a financial adviser to his or her client is whether a prudent adviser could reasonably have taken the view that an investment is suitable for the client.
[30] [2012] NSWCA 399, (2012) 91 ATR 531.
Against the background of these principles I turn to consider the grounds of appeal.
Finding that Mr Abram had given a Financial Services Guide to Mr Jackson in November 2004
Mr Jackson submits the judge erred in finding that Mr Abram gave a copy of the Financial Services Guide (“FSG”) to Mr Jackson in around November 2004.[31]
[31] [2014] SADC 118 at [51].
Mr Jackson submits, in effect, that this finding was contrary to the objective evidence that Mr Abram was not appointed as an authorised representative of Great Southern until 28 February 2005 and was glaringly improbable given Mr Abram’s failure to comply with the mandatory requirement in the Authorised Representative Compliance Manual to maintain a record of the date an FSG was provided to a particular client and the version number provided.[32]
[32] CB 783.
Exhibit P77[33] is the authorisation certifying the appointment of Mr Abram as an authorised representative of Great Southern. It is dated 28 February 2005. That is cogent evidence that the judge erred in finding that Mr Abram gave a copy of the FSG to Mr Jackson in around November 2004. However, it does not preclude the judge’s finding that Mr Abram gave Mr Jackson a copy of the FSG. It merely suggests that this occurred later than November 2004 and probably sometime after 28 February 2005. The judge’s finding that Mr Abram gave Mr Jackson a copy of the FSG was based on his respective assessment of the credit and reliability of each of them. I remind myself of the advantage the judge enjoyed as the finder of fact in hearing and seeing each of them give evidence. That finding has not been shown to be contrary to incontrovertible fact or uncontested testimony. It is not a finding that is glaringly improbable or contrary to compelling inference. The absence of a written record of the provision of the FSG to Mr Jackson is but one matter the judge had to weigh in deciding this question. Ultimately, I am satisfied that the inference is compelling, as the judge found, that there was no reason for Mr Abram not to give Mr Jackson a FSG in 2005. It is also consistent with the judge’s reasoning[34] that there were other documents signed by Mr Jackson which detail the fact that Mr Abram was a representative of Great Southern and was entitled to the receipt of commission on sales.[35] It is not a finding with which I would interfere. The significance of the finding is that the provision of the FSG to Mr Jackson disclosed to him that Mr Abram was a representative of Great Southern and was eligible for a commission of five per cent and a marketing rate of five per cent on the sale of Great Southern products. Accordingly, there is no basis for the submission by the appellants that they would not have invested in the Great Southern products recommended by Mr Abram if they had known he was entitled to payment of commission on those sales. The judge found this was known by Mr Jackson.
[33] CB 748.
[34] [2014] SADC 118 at [53].
[35] Exhibit P82; CB 766-767.
In any event, I am satisfied that there was no error in the judge’s conclusion that the undoubted conflict of interest on the part of Mr Abram, on the one hand, in acting as the appellants’ accountant and financial adviser and, on the other hand in acting as a commissioned representative of Great Southern, was not causative of any loss suffered by the appellants. The loss suffered by the appellants resulted from the collapse of Great Southern which went into liquidation in 2009 not from the fact that Mr Abram had a conflict in advising the appellants to invest in the Great Southern schemes.[36]
[36] [2014] SADC 118 at [187].
In my view this ground must fail.
Dismissing the appellants’ claim in relation to the 2005 plantations project
In May 2005, the second appellant invested $15,000 in the Great Southern Plantations 2005 project. It did so on the recommendation of Mr Abram. At that time, Mr Jackson had invested most of his funds into cash in the self managed superannuation fund established for him by Mr Abram. This sum ultimately was lost. In addition, the appellants claimed the loss of a further $15,000 representing the promised return in 10 years time.
The judge found that Mr Abram owed a duty of care to the appellants at common law but there was no breach of that duty in connection with the advice given to invest in the Great Southern Plantations 2005 project.[37]
[37] [2014] SADC 118 at [178].
The basis of the judge’s finding is that in May 2005 the sum of $15,000 invested in the project represented a relatively small proportion of the $120,000 in funds which Mr Jackson proposed to invest in superannuation in that year. The amount which was invested in cash in superannuation in that year was the maximum the appellants could invest in that year and it made sense for the surplus to be invested in some other tax effective way. [38] Accordingly, there was no reason for Mr Abram to advise the appellants against investing the sum of $15,000 in the plantations project at that time, or in particular, to advise that it was desirable to invest that sum elsewhere to diversify the appellants’ risk. The investment attracted a tax deduction in the 2005 financial year. Interest on funds borrowed to finance the investment was tax deductible in that same year. The judge found that the advice to invest the sum of $15,000 in the plantations project in the 2005 tax year was appropriate.[39] In my view, there is no basis to interfere with that finding. I reject the submission of Mr Jackson that the judge erred in concluding that the maximum contribution that could be made to the self managed superannuation fund was in the vicinity of $96,000, and accordingly it made sense for the surplus to be invested in some other tax effective way. Mr Jackson submits that the judge failed to have regard to the fact that the limit was twice that because of the potential for contributions to be made to the fund on behalf of his wife. There is no evidence to support this proposition.
[38] [2014] SADC 118 at [183].
[39] [2014] SADC 118 at [184].
As the judge found, there was no evidence that the liquidation of Great Southern was foreseeable at the time that the second appellant entered into the transaction in May 2005. The judge accepted Mr Abram’s evidence that at no time from May 2005 until Great Southern was placed into administration did he become aware of any significant financial problems being suffered by Great Southern.[40] That finding is supported by the evidence that Mr Abram lost his own investment in the plantations project when the company went into administration.[41]
[40] [2014] SADC 118 at [171].
[41] [2014] SADC 118 at [171]-[172].
Mr Jackson submits that the judge erred because he failed to find that Mr Abram had provided financial product advice without the cover of an Australian Financial Services Licence. The appellants submit that Mr Abram provided personal financial product advice to them without being qualified to do so. They submit this contravened s 911A of the Act.
I reject this submission. I do so for two reasons.
First, while the judge found that the advice given by the respondents to the appellants to invest in Great Southern constituted the provision of financial product advice, any breach of Chapter 7 Part 7.7 of the Act did not result in an entitlement to an award of damages. This is because any entitlement to damages arose pursuant to s 953B of the Act. Section 953B(2) conditioned the recovery of any loss suffered by a client to circumstances where the loss or damage has been suffered because the client was not given a disclosure document or statement or the disclosure document or statement was defective.

The judge found that the appellants did not suffer loss or damage because of the failure to give them a disclosure document or statement or because the disclosure document or statement was defective.[42] The appellants suffered loss because Great Southern became insolvent.
[42] [2014] SADC 118 at [325].
Second, in any event, I consider there was no breach of Chapter 7 Part 7.7 of the Act. Section 911A(2) provides that a person is exempt from the requirement to hold an Australian Financial Services Licence for a financial service they provide if they provide the services as a representative of a second person who holds an Australian Financial Services Licence. As the judge found, the appellants were an authorised agent of Great Southern. Great Southern held an Australian Financial Services Licence.
In my view, this ground must fail.
Finding that Mr Abram was not liable to the appellants for the full value of the appellants’ loss in relation to the 2006 cattle project
Mr Jackson invested a total of $140,000 in the Great Southern 2006 Beef Cattle project. He did so on the advice of Mr Abram. The judge found that Mr Jackson contacted Mr Abram and said he had decided to invest $140,000 in superannuation in the 2006 financial year. The judge found Mr Jackson proposed to invest $60,000 in the Great Southern 2006 Beef Cattle project and the remaining $80,000 in superannuation in term deposits. The judge found Mr Abram persuaded Mr Jackson to invest the whole $140,000 in the Beef Cattle project. He found this advice was negligent. Mr Abram owed a duty of care to advise Mr Jackson of the risk associated with placing all his investment in the one investment vehicle. The judge found instructions given by Great Southern to Mr Abram acknowledged the desirability of diversifying investments to reduce portfolio risk. The judge considered this a matter of commonsense. He considered Mr Abram should have allowed Mr Jackson to make the proposed investment of $80,000 in a term deposit in the self managed superannuation fund. He should not have advised investment of the full $140,000 in the 2006 Beef Cattle project. Accordingly, the judge found the negligent advice of Mr Abram resulted in a loss of $80,000 that Mr Jackson had planned to invest in a cash term deposit.[43] He made an award of damages in that amount.
[43] [2014] SADC 118 at [364], [366], [369]-[370].
Central to the judge’s finding is the premise that Mr Jackson had decided to invest $60,000 in the cattle project before he was persuaded by Mr Abram to invest the additional sum of $80,000 in that project. The judge said:[44]
I start with the investment in the Great Southern 2006 Beef Cattle project. Mr Jackson gave evidence that he contacted Mr Abram and said that he had decided to invest $140,000 in superannuation in that financial year. He proposed to invest $60,000 in the cattle project and the remaining $80,000 in superannuation in term deposits. Mr Abram persuaded him to invest the whole $140,000 in the beef cattle project. Accordingly of the investment that Mr Jackson made in the year ended 2006 the sum of $80,000 was diverted from a cash deposit into the beef cattle project on the recommendation of Mr Abram.
[44] [2014] SADC 118 at [369].
Mr Jackson submits that the judge erred in finding that it was his intention from the outset to invest $60,000 in the 2006 cattle project. He submits that his initial decision to invest $60,000 was the result of Mr Abram’s negligent advice. Accordingly, he submits that the judge should have found that Mr Abram was liable to him in damages for the whole $140,000 invested in the 2006 cattle project.
I partly accept this submission. In my view there is a flaw in the analysis undertaken by the judge in finding that it was the initial intention of Mr Jackson to invest $60,000 in the 2006 cattle project. At the very least this finding discloses a misunderstanding of the evidence of Mr Jackson. The only evidence on this topic is that there were two discussions between Mr Jackson and Mr Abram in relation to this matter. The first discussion occurred in Mr Abram’s office where he “hawked” the project to Mr Jackson and advised him that he could expect returns over the six years of the project amounting to 146 per cent of the investment. Subsequently, on 14 May 2006, there was a telephone discussion between them. Mr Jackson gave evidence that he was trying to figure out what to do in terms of superannuation and whether to invest in this project. He said that prior to telephoning Mr Abram he had it in his mind to invest $60,000 in the project and to put $80,000 into superannuation term deposits. At this point Mr Abram advised that Mr Jackson would be better off from a tax viewpoint to put the whole $140,000 into the cattle project.[45] Mr Jackson acted on this advice.
[45] Transcript 75.29-76.19.
In my view it is apparent that the proposal to invest at all in the 2006 cattle project originated with Mr Abram. But for Mr Abram “hawking” the project to Mr Jackson he would not have formed the original plan to invest $60,000 in the project.
The question is whether that makes Mr Abram liable for the loss of the entire $140,000 invested by Mr Jackson in the 2006 cattle project. This is a question of causation. The basis of the finding that Mr Abram was liable to Mr Jackson is that he should have warned of the risk of having such a large proportion of his investment funds in the one investment and that he should have advised diversifying his investments to spread the risk. In these circumstances, I am satisfied that it was not negligent of Mr Abram to have advised some investment in the 2006 cattle project. The investment of even a significant proportion of the available funds of $140,000 at this time was not negligent. At this stage Mr Jackson did not have a large investment in Great Southern projects. Advising further investment in Great Southern was not negligent per se. However, I consider that the advice to invest as much as $60,000, let alone $140,000, was negligent. In my view that was too great a proportion of the available investment funds to be sunk into the one investment. I consider that a competent and prudent financial adviser, whose interests were not conflicted, would not reasonably have advised Mr Jackson to invest any more than $21,000 in the one investment.
By 29 January 2008 Great Southern was instructing Mr Abram that, having regard to the desirability of diversifying investments to reduce portfolio risk, it was not recommended that any investor invest more than 15 per cent of total wealth in agribusiness products and more than five per cent in any one product.[46] Importantly, this advice suggests that it would have been imprudent to recommend investing more than five per cent of total wealth, as opposed to the funds to be invested in the 2006 financial year, in the 2006 cattle project. While this instruction was not received by Mr Abram until January 2008, which is nearly 20 months after he advised Mr Jackson to invest in the 2006 cattle project, nonetheless, I consider the instruction was as sound in May 2006 as it was in January 2008. By May 2006 Mr Jackson’s total wealth was $426,515. Before the investment of $140,000 in the 2006 cattle project the appellants had invested just over seven per cent of total wealth in agribusiness. An investment of $21,000 in May 2006 would have represented about five per cent of Mr Jackson’s total wealth. It would have resulted in the appellants investing less than 15 per cent of total wealth in agribusiness. I do not consider Mr Abram would have been negligent had he advised investing $21,000 in the 2006 cattle project. I reject the submission that there was no negligence in Mr Abram advising investment in the project because the investment afforded Mr Jackson access to significant tax deductions. Those deductions could have been obtained by Mr Jackson through other investments. In my view, there is no reason to think that Mr Jackson would not have followed Mr Abram’s advice if he had recommended the investment of $21,000 only in the 2006 cattle project. The evidence establishes he consistently invested in accordance with the advice of Mr Abram. It follows that the judge erred in not finding that Mr Abram was liable in damages to Mr Jackson for a loss from his investment in the 2006 cattle project in the sum of $119,000.
[46] Exhibit P32; CB 616-618.
In my view, this ground succeeds. The amount lost by Mr Jackson due to the negligence of Mr Abram must be increased by $39,000 to $119,000.
Finding that Mr Abram was not liable to the appellants for the full value of the appellants’ loss in relation to the 2007 cattle project
Mr Jackson invested a further $140,000 in the 2007 Beef Cattle project. He did so after attending a function, at the invitation of Mr Abram, arranged by Great Southern, on 23 October 2006. There was some discussion at the function between Mr Abram and Mr Jackson in relation to investing in the 2007 cattle project.
The next day Mr Jackson sent an email to Mr Abram in the following terms:
This e-mail is just to confirm the details of our discussions on the 23 October 06. I would like you to prepare the paperwork for me to invest in the 2007 Beef Cattle Project in the sum of $140,000 plus GST.
Prepare the paperwork basically the same as for the 2006 Project i.e.:
– Use the ABN of Silver Bullet software so that the GST can be claimed back on it.
– Have the instalments direct debited from the “Arian Systems Pty Ltd ATF the G and P Jackson family trust” Adelaide Bank account.
If you think there is time to send me the paperwork by mail, then do so. However, if you consider there is a need to expedite the paperwork to be sure to get in the 2007 scheme, let me know and I can arrange to swing by your office to sign the paperwork when it is prepared.
The judge found that Mr Abram was negligent in advising Mr Jackson to invest in the 2007 Beef Cattle project. He found:[47]
So far as the 2007 beef cattle project is concerned Mr Jackson did not require much encouragement following the function at The Hilton Hotel on 23 October 2006 before he applied for the investment in the 2007 Beef Cattle Project by his email at 9.33am the following morning. Nevertheless Mr Jackson made the decision following Mr Abram’s recommendation. Mr Abram should have advised him to spread the risk. By 23 October 2006 the plaintiffs already had a significant investment in Great Southern. In my opinion a reasonably competent and careful adviser should have recommended to Mr Jackson that he spread the investments at least in the same way that Mr Jackson had proposed to spread the 2006 investment. On that basis the negligent advice of Mr Abram resulted in the loss of a further $80,000 in the 2007 Beef Cattle Project.
[47] [2014] SADC 118 at [371].
Mr Jackson submits that the judge erred in not finding Mr Abram liable for the loss of the entire $140,000 invested by him in the 2007 Beef Cattle project.
I agree.
In my view, the judge should have found that, at that time, it was negligent to advise Mr Jackson to invest any more in agribusiness investments, let alone in Great Southern. By this time the appellants had invested a little over 36 per cent of their total wealth in agribusiness investments with Great Southern. Any further investment, let alone an investment of $140,000 in Great Southern, represented an unreasonable and imprudent concentration of risk. While circumstances had changed since May 2006, the judge seems to have taken the same approach to the issue of causation of loss as he took in relation to the 2006 Beef Cattle project. For the reasons explained above, not only was the judge in error in relation to the 2006 cattle project, but by October 2006 when Mr Abram was recommending to Mr Jackson that he invest a further $140,000 in the Great Southern 2007 Beef Cattle project, a prudent financial adviser would reasonably have taken the view that this investment was not suitable for Mr Jackson. While it is the case that a prudent financial advisor should have advised Mr Jackson to spread the risk, by that time spreading the risk precluded any further investment in agribusiness in general, and Great Southern in particular.
In my view, this ground succeeds. The amount lost by Mr Jackson due to the negligence of Mr Abram must be increased by $60,000 to $140,000.
Dismissing the appellants’ claim in relation to the 2008 Wine Grape Income Project
On 28 February 2008 Mr Abram forwarded a letter to all of his clients including Mr Jackson. The letter was on the letterhead of Great Southern Securities Pty Ltd and was signed by Mr Abram as an authorised representative of Great Southern. The letter was in the following terms:[48]
[48] Exhibit P34; CB 629.
Dear Garry,
TAX TIME IS COMING…
It is now March and we are rapidly approaching the end of the tax planning season.
As a result of Australian Taxation Office (ATO) announcements and changes in the tax law in recent years, both forestry and non-forestry managed investment scheme (MIS) investments are accepted by the ATO until at least the 2007/8 financial year, and may open significant opportunities for tax planning.
The structure of these schemes, which provide outstanding tax advantages and expected returns, increase our ability to offer a range of tax planning options. Plus MIS investments are often accompanied by a range of security features, including ATO Product Rulings, and provide an opportunity to diversify a portfolio into agriculture.
Please find enclosed summaries for two of these products. Both of these projects, the:
Great Southern 2008 Wine Grape Income Project
Great Southern 2008 Diversified Olives Income Project
will be available until the 15^th June 2008. However, due to a limit on their total size, both projects, in particular the Wine Grape project could close well before this date.
If, this year you have:
·       had an increase in income;
·       received a bonus or other abnormal income;
·       received capital gains from a property or share sale;
·       a need for tax deductible savings;
·       had to pay a surcharge on Medicare;
·       lost the Family Tax Benefit;
Or just want to save some tax, then we would ask that you contact us at our earliest convenience so we can review your situation and make appropriate recommendations and referrals.
We look forward to hearing from you soon.
Yours faithfully.
Mr Jackson invested $111,000 in the Great Southern 2008 Wine Grape Income Project. He did so without making any contact with Mr Abram in relation to this project or in response to the invitation contained in the letter of 28 February 2008 from Mr Abram. Instead he applied through a firm, National Financial Solutions. The application is dated 15 May 2008.
On 29 July 2008 Mr Jackson received a refund of $15,340 from National Financial Solutions, being a rebate on the commission on the $111,000 which he had invested in the Great Southern 2008 Wine Grape Income Project and a separate investment with another organisation called ‘Rewards’. By making the investment in the 2008 Great Southern Wine Grape Income Project through National Financial Solutions, Mr Jackson avoided paying commission to Mr Abram.
The judge dismissed Mr Jackson’s claim for the $111,000, lost as a result of the investment in the 2008 Great Southern Wine Grape Income Project, on the basis that there was no breach of any duty of care and, in any event, Mr Jackson failed to prove that there was any loss caused as a result of reliance by Mr Jackson on any advice by Mr Abram in relation to investing in this project. He said:[49]
The investment in the 2008 Winegrape Project was not made through the defendants as an authorised representative of Great Southern but was made through another organisation. The investment was not made until four months after Mr Abram' s letter of 28 February 2008. Mr Jackson had conducted his own research into the project and in that financial year, as a result of his own research, he also made an investment in Rewards Group Tropical Fruit Project, which was not connected to Mr Abram or Great Southern.
Mr Jackson did not contact Mr Abram pursuant to the invitation in the letter of 28 February 2008. I accept the defendants’ submission that Mr Abram did not influence Mr Jackson's decision to invest in the 2008 Winegrape Project.
I find that the defendants were not in breach of any duty of care to the plaintiffs’ [sic] in respect of the Great Southern 2008 Winegrape Income Project. I also find that Mr Jackson did not rely on the advice of the defendants when he made the 2008 Winegrape Income Project Investment and that the circular letter of 28 February 2008 was not the cause of the plaintiffs loss.
[49] [2014] SADC 118 at [360] – [362].
Mr Jackson submits that the judge erred in finding that he did not rely upon the advice of Mr Abram to invest in the 2008 Wine Grape Income Project and that this advice was causative of his loss.
I do not accept this submission.
For a plaintiff to succeed in a claim for a negligent misstatement it is necessary for the plaintiff to prove that he or she acted in reliance upon the negligent advice. If the person does not rely upon the negligent advice, he or she has no case. If the person would have proceeded with the contract even without the advice, the loss is not the result of the advice.[50] If a material representation is made which is calculated to induce the person to enter into a contract and that person in fact enters into the contract, there arises a fair inference of fact that he or she was induced to do so by the advice. Like any inference of fact, it is rebuttable. But the representation contained in the advice need not be the sole inducement to act in reliance upon it. It is sufficient so long as it plays a real and substantial part, even if only a minor part, in contributing to inducing the person to act.[51]
[50] Tomasetti v Brailey [2012] NSWCA 399 at [59].
[51] Gould v Vaggelas [1985] HCA 75, (1983 – 1985) 157 CLR 215 at 236; Mbakwe v Sarkis [2009] NSWCA 330 at [24].
The only advice upon which Mr Jackson seeks to rely is the letter of 28 February 2008. The letter says that “forestry and non-forestry managed investment scheme investments … may open significant opportunities for tax planning”. The letter then enclosed summaries of two of these projects including the Great Southern 2008 Wine Grape Income Project. The letter continues:
If, this year you … just want to save some tax, then we would ask that you contact us at your earliest convenience so we can review your situation and make appropriate recommendations and referrals.
Mr Abram did not make any recommendation to Mr Jackson to invest in the 2008 Grape Wine Income Project. More particularly, he did not advise him to invest $111,000 in that project. That was a decision taken by Mr Jackson some 10 weeks later without reference to Mr Abram, notwithstanding the invitation contained in the letter for him to contact Mr Abram and have his situation reviewed for the purpose of making appropriate recommendations and referrals. In my view, the letter does not constitute advice to Mr Jackson to invest in the 2008 Wine Grape Income Project. At its highest it is merely an invitation to treat. I do not consider there is any proper basis upon which to interfere with the judge’s finding. Even if, contrary to my view, the letter of 28 February 2008 constituted investment advice, I do not consider the evidence establishes that it played a real and substantial part in inducing Mr Jackson to invest in the 2008 wine grape project. For the purposes of reliance and causation it is not enough that the letter merely introduced Mr Jackson to the existence of this investment opportunity. The letter had to induce him to invest. In my view it has not been proved that it did. There is evidence from which it could be inferred Mr Jackson would have invested in the project in any event. The evidence shows that he undertook his own research and made other investments unconnected with Great Southern and Mr Abram. The amount invested had nothing to do with Mr Abram. It was not the product of any advice he gave. Mr Jackson has failed to discharge the onus of proving the letter was causative of his loss of $111,000 in the 2008 Wine Grape Income Project. No error on the part of the judge has been demonstrated.

In my view, this ground must fail.
Failing to find Mr Abram was negligent in not following mandatory requirements set out in the Great Southern Authorised Representative Compliance Manual and the Act
This ground can be disposed of shortly.
Mr Jackson complains that the judge erred in failing to find Mr Abram negligent for not following mandatory requirements set out in the Great Southern Authorised Representative Compliance Manual and the Act. This ground of appeal lacks particularity. It appears to be in the nature of an omnibus submission intended to encapsulate the specific complaints relating to failure to comply with requirements in the Compliance Manual and provisions of the Act referred to earlier.
This submission is without merit for three reasons. First, the judge found that Mr Abram did give Mr Jackson a FSG at the commencement of the Great Southern dealings and that in most cases Mr Abram produced statements of advice or a record of advice which was signed by Mr Jackson. This is the basis for the claim that Mr Abram engaged in false and misleading conduct contrary to s 1041H of the Act, made false and misleading representations contrary to s 769C of the Act and contravened Chapter 7 Part 7.7 Division II of the Act in failing to provide the appellants with a FSG or a statement of advice for each investment. The judge’s finding was based on his assessment of the credit and reliability of each of Mr Jackson and Mr Abram. There is no basis for this Court to interfere with those findings. The findings have not been shown to be contrary to incontrovertible fact or uncontested testimony. They are not glaringly improbable or contrary to compelling inference. Second, in any event, even if I formed the view that Mr Abram had not followed mandatory requirements laid down in the Great Southern Authorised Representative Compliance Manual and the Act, those factors were not causative of Mr Jackson’s loss. As I have discussed earlier, Mr Jackson’s loss resulted from the insolvency of Great Southern. To the extent that Mr Abram is liable to Mr Jackson, it is as a result of negligent advice relied upon by Mr Jackson to invest in financial products. The liability of Mr Abram arose at common law. It did not result from any breach of the Act for the reasons explained above. Third, to the extent that it is alleged the failure to follow mandatory requirements laid down in the Great Southern Authorised Representative Compliance Manual constituted negligence on Mr Abram’s part, Mr Jackson has suffered no greater loss than already sounds in the award of damages for the 2006 and 2007 Beef Cattle projects.
In my view, this ground must fail.
Finding that the award of damages had to be reduced by the amount of the taxation deductions enjoyed from the relevant investments
The judge found that Mr Jackson had the benefit of taxation deductions in respect of the investments in Great Southern and those benefits should be brought to account in assessing damages.
The judge rejected Mr Jackson’s submission that the tax benefit he derived from the investment in Great Southern should not be deducted. He found that Mr Jackson would have been required to pay income tax on the $208,000 if he had not invested that amount in Great Southern. Instead he obtained a deduction. He rejected the submission that the investment was actually made by the second appellant, Arian, as this submission was at odds with the fact that the deduction was claimed in Mr Jackson’s personal taxation return. He accepted that it was Mr Jackson who had received the taxation benefit.
Mr Jackson submits that the judge erred in reducing the award of damages by the amount of the taxation deductions enjoyed from the relevant investments. It is not easy to understand Mr Jackson’s submission. As I understand the argument, it is that the judge should not have reduced the award of damages for the taxation deductions that were undoubtedly received, because, while there was a taxation benefit in the year that the investments were made, if those projects had been realised, 10 years later, tax would ultimately have been paid on the returns for the 10 years from the date of the investment.
In my view, there was no error in the approach taken by the judge. First, as the investment was lost with the collapse of Great Southern in 2009, that did not occur. Second, the judge awarded damages for the capital loss suffered by Mr Jackson as a result of investing in the 2006 and 2007 Beef Cattle projects and the 2007 olive project. The judge awarded damages in order to restore Mr Jackson to the position he would have been in had he not invested in those projects. The judge calculated damages to compensate Mr Jackson by way of a return of capital from these investments rather than an award that represented lost income. Accordingly, the damages award is not taxable. It follows that in calculating those damages, the judge was correct to bring to account in calculating the loss suffered by Mr Jackson, the benefit he received by way of a taxation deduction from making those investments, otherwise he would have received a windfall benefit. However, the judge reasoned that in order to calculate the true loss suffered by Mr Jackson, which was to sound in damages, he had to set off against the deduction received, any deduction that Mr Jackson would have received had he invested the money in cash in superannuation instead of Great Southern. Accordingly, the judge had to undertake an assessment by calculating the difference between the two positions, the actual and the assumed.
The judge relied upon evidence from two accounting experts, Ms Cusack and Ms Wicker. Reports from both experts were received in evidence. In his supplementary reasons of 24 September 2014 the judge calculated the adjustment to the damages award to allow for the tax deduction that would have been derived if Mr Jackson had invested $208,000 in cash in superannuation rather than in the 2006 Beef Cattle project, the 2007 Beef Cattle project and the 2007 olive project. The report of Ms Wicker addressed the position on the assumption that Mr Jackson, rather than investing in the Great Southern projects, contributed that $208,000 to his superannuation fund. The judge accepted Ms Wicker’s opinion that in that case he would have derived a tax benefit. She calculated that benefit as being $42,349. On the basis of this evidence, the judge found the overall tax benefit received by Mr Jackson which had to be deducted was $35,827. The figure of $35,827 was calculated by setting off the figure of $42,349 against the figure of $78,176. It is necessary to explain the derivation of these figures.
I start with the figure of $78,176. Ms Cusack calculated, inter alia, Mr Jackson’s taxable income for the years 05/06 and 06/07 on the assumption that he had not invested in the Great Southern projects in order to determine the net tax benefit resulting from his investment in those projects. She did not consider whether any tax deductions would have applied if the money had been invested in cash term deposits in Mr Jackson’s superannuation fund instead of the Great Southern projects. She did this to determine the difference between the actual tax paid by Mr Jackson and the tax that would have been payable had he not invested in the projects. She calculated he received a tax benefit in both years.
Ms Cusack was of the opinion that the tax benefit received in the 05/06 year was $50,353, as without the deduction from the 2006 cattle project, Mr Jackson would have had to pay $61,673 in tax. However, as a result of the deduction to which he became entitled by investing in that project, he paid tax of $11,320. In relation to the 06/07 year, Ms Cusack was of the opinion that the tax benefit received was $72,561, as without the deduction from the 2007 cattle project and the olive project, Mr Jackson would have had to pay $74,079 in tax. However, as a result of the deductions to which he became entitled by investing in those projects, he paid tax of $1,518.
The judge, in reliance upon Ms Cusack’s opinion, undertook a calculation to establish the extent of the tax benefit received by dividing the amount to be invested in superannuation by the total amount invested in the Great Southern projects and multiplying this by the tax benefit received when the project investments were deducted. These calculations resulted in the sum of $78,176. Those calculations were:
2005/06: $80,000 ¸ $140,000 x $50,353 = $28,773.
2006/07: $128,000 ¸ $188,000 x $72,561 = $49,403.
$28,773 + $49,403 = $78,176.
This is the derivation of the figure of $78,176.[52]
[52] [2014] SADC 118 at [379].
I turn to the derivation of the figure of $42,349.
Ms Wicker, in her report, calculated the amount of tax savings that would have been realised by Mr Jackson from contributing the sums invested in the 2006 and 2007 Beef Cattle projects and the 2007 olive project in cash deposits in his superannuation fund. She was of the opinion that there would have been a net tax saving of $18,150 in the 05/06 year and a net tax saving of $24,199 in the 06/07 year. The aggregate of these sums is $42,349. These calculations were set out in appendix 6 to Ms Wickers report. I annex that document to these reasons.[53]
[53] Appendix 6 to Wicker report of 5 September 2014.
This is the derivation of the figure of $42,349.
In assessing damages, the judge set off the loss in the Beef Cattle projects in 2006 and 2007 and the olives project in 2007, namely, $208,000, against the difference in the benefit of tax deductions, namely, $35,827. That produced the figure of $172,173. From this figure he deducted $3,140 which was a proportion of the return that had been received by Mr Jackson in relation to the 2006 cattle project. That resulted in an award of damages of $169,033.
Notwithstanding that there was no error of principle in the approach adopted by the judge, it is necessary to recalculate the damages award because the judge erred in calculating the amount lost by Mr Jackson due to the negligence of Mr Abram. As I have explained, Mr Jackson lost an additional $39,000 in the 05/06 financial year as a result of investing in the 2006 Beef Cattle project and a further $60,000 in the 06/07 financial year from investing in the 2007 Beef Cattle project.
The recalculation required involves a complex arithmetic adjustment, reconstructing the expert opinions in accordance with the approach taken by the judge.
I commence with the judge’s calculation of the tax benefit derived from investment in the Great Southern projects. I replicate that calculation by utilising the figures representing the losses suffered by Mr Jackson due to the negligence of Mr Abram explained above.
2005/06: $119,000 ¸ $140,000 x $50,353 = $42,800.
2006/07: $188,000 ¸ $188,000 x $72,561 = $72,561.
$42,800 + $72,561 = $115,361.
Next I must revise the calculation undertaken by Ms Wicker to identify the tax benefit that would have been derived from contributing the sum lost by Mr Jackson, as a result of the negligence of Mr Abram, in cash deposits in Mr Jackson’s superannuation fund. I do so by adjusting Ms Wicker’s calculation as set out in p 2 of Appendix 6. It is unnecessary to adjust the calculation on p 1. The adjusted calculation is as follows:

Key FY2006 Key FY2007 TOTALS

Tax payable on Taxable Income with Reduced Great Southern Investments A 39,524 K 47,917 87,440

Less: Tax payable on Taxable Income with Reduced Great Southern Investments and Additional Superannuation Contributions B (12,186) L (9,227) (21,412)

Tax savings from additional amounts invested in the G&P Jackson Retirement Fund: C Net of A & B 27,338 M Net of K & L 38,690 66,028

Less: Additional tax payable in Fund at 15% D 15% x J (13,575) N 15% x T (15,383) (28,958)

Net tax savings from additional amounts invested in the G&P Jackson Retirement Fund: E Net of C & D 13,763 O Net of M & N 23,307 37,070

Calculation of Tax Deduction for Superannuation Contributions

Deduction is lesser of:
- $5,000 + 75% of contribution above $5,000
- and age based limit

Age based limit (> 50 years of age) F 100,587 P 105,113

Less: Already contributed in year as per Income Tax Return - (2,562)

Therefore maximum additional deduction available 100,587 107,675

Assumed additional Contributions as per my instructions 119,000 188,000 307,000

Add: Already contributed in year as per Income Tax Return - 2,562

Total assumed contributed in year 119,000 130,562 190,562

Maximum deduction based on $5,000 + 75% of contribution above $5,000

First $5,000 5,000 5,000

75% of contribution above $5,000 85,500 139,171

Calculated deduction available G 90,500 Q 144,171

Actual deduction available H Lesser of F & G Lesser of P &Q

This amount is taxable to the fund at 15% 90,500 R 105,113

Less: Amount already contributed in the year as per Income Tax Return I Net of H & I - S Net of R & S (2,562)

Additional deduction available J 90,500 102,551

The critical figure derived from this revision of Ms Wicker’s calculation is the amount of $37,070, being the aggregation of the sums of $13,763 for the 05/06 year and $23,307 for the 06/07 year, representing the net tax savings from the additional amounts invested in the G & P Jackson Retirement Fund.
Consistent with the approach taken by the judge, this figure is to be deducted from the figure of $115,361. This produces a figure of $78,291. This figure in turn is to be deducted from the revised loss figure of $307,000. This produces a figure of $228,709. From this is to be deducted $3,140 being the proportion of the return that was received by Mr Jackson from his investment in the 2006 cattle project. This results in an award of damages of $225,569. Interest must be added to this sum. I will return to this topic.
In summary, while I reject Mr Jackson’s submission on this ground, the award of damages to which he is entitled must increase from $169,033 to $225,569.
Failing to award punitive or exemplary damages
The judge found the evidence did not establish an entitlement on the part of Mr Jackson to punitive or exemplary damages.
The judge identified the legal principles applicable to an award of exemplary or punitive damages as follows:[54]
[54] [2014] SADC 118 at [414]-[416].
There are cases in which the court will award exemplary or punitive damages. The purpose of such damages is to punish and deter the defendant and other potential tortfeasors. In Uren v John Fairfax & Sons Pty Ltd[55] Owen J said at 158 that the Court may award damages:
[55] (1966) 117 CLR 118.
...over and above those required to compensate the plaintiff for the injury suffered by him if it forms the opinion… that the defendants conduct in committing the wrong was so reprehensible as to require that he should not only compensate the plaintiff for what he has suffered but should be punished for what he has done in order to discourage him and others from acting in such a fashion.
The power to make an award of exemplary damages was also acknowledged in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 where Brennan J said at 471 that an award of exemplary damages:
Is intended to punish the defendant for conduct showing a conscious and contumelious regard for the plaintiff's rights and to deter him from committing like conduct again.
Such damages are available in an action based on negligence but the plaintiff must establish that "the defendant can be seen to have acted consciously in contumelious disregard of the rights of the plaintiff." Gray v Motor Accident Commission (1998) 196 CLR 1.
(Footnote in original)
There is no error in the judge’s explication of the relevant legal principles.
The judge rejected the claim for punitive or exemplary damages on the basis that, while Mr Abram had a conflict of interest and was negligent, the evidence did not establish that he acted consciously in contumelious disregard of the rights of Mr Jackson.
Mr Jackson submits that the judge erred in this conclusion. He submits that he should have found to the contrary on the basis of his conduct in relation to other matters unrelated to Mr Jackson. In my view this submission fails on two bases. First, on the basis that there was no evidence before the judge of the conduct of Mr Abram in relation to these other matters. Second, in any event, Mr Jackson had to prove that Mr Abram had acted consciously in contumelious disregard of its rights. Even if it could have been proved that he had been involved in providing negligent financial advice to other persons, at or about the same time, that does not establish that he acted consciously in contumelious disregard of the rights of Mr Jackson.
In my view this ground must fail.
Pre-judgment interest
The judge awarded pre-judgment interest in a lump sum of $95,000.[56] That sum was calculated on the loss of $80,000 in the 05/06 financial year[57] and the sum of $128,000 in the 06/07 financial year.[58] The judge adopted an interest rate of six per cent in calculating the lump sum. 14DCSR 208 provides that the appropriate rate for the calculation of pre-judgment interest is a matter for determination by the judge in each case. As a guide, the rule suggests the cash rate set by the Reserve Bank of Australia (“RBA”) plus four per cent. Allowing for the periods since those losses occurred until judgment was entered on 24 September 2014, an average interest rate of six per cent appears low but there is no ground of appeal challenging the interest rate adopted by the judge. For the reasons set out above, I have concluded that the judge should have calculated pre-judgment interest on a loss of $119,000 in the 05/06 financial year and the sum of $188,000 in the 06/07 financial year. That is to say an additional $39,000 in the 05/06 financial year and an additional $60,000 in the 06/07 financial year. As a result, utilising an interest rate of six per cent, Mr Jackson is entitled to an additional $45,000 by way of pre-judgment interest.
[56] [2014] SADC 118 at [387].
[57] This is the loss the judge found Mr Jackson suffered from his investment in the 2006 beef cattle project.
[58] This is the loss the judge found Mr Jackson suffered from his investment in the 2007 beef cattle project in the amount of $80,000 and the loss suffered in the 2007 olive project in the amount of $48,000.
The judge awarded an additional $24,207 to gross up the award of pre-judgment interest of $95,000 to allow for taxation.[59] That figure must also be adjusted for the increase in the loss suffered by Mr Jackson for which Mr Abram is liable. Again, adopting the same methodology as the judge, I would allow an additional sum of $11,466.
[59] Jackson & Anor v Abram & Anor, reasons of Judge Clayton, 24 September 2014.
Damages and interest
In accordance with these reasons, Mr Jackson has an entitlement to damages and interest as follows:

Damages:

$225,569

Original award of pre-judgment interest:

$95,000

Additional award of pre-judgment interest:

$45,000

Original gross-up of pre-judgment interest:

$24,207

Additional gross-up of pre-judgment interest:

$11,466

TOTAL:

$401,242

Post-judgment interest

For these reasons, Mr Jackson also is entitled to an award of post-judgment interest in respect of the increased amount to which I have found him to be entitled. That increased amount is the difference between $401,242 and $288,240, namely, $113,002. Utilising 14SR 217, post–judgment interest is to be calculated by reference to the cash rate set by the RBA plus six per cent. Post-judgment interest is to be calculated for the period since 24 September 2014. On that basis, Mr Jackson is entitled to an award of $11,000 by way of post-judgment interest.
The exercise of his discretion by awarding costs against the appellants

The judge ordered that Mr Jackson was to pay the costs of Mr Abram on a party/party basis from 4 July 2013 until 24 September 2014. He did so on the basis that Mr Jackson failed to better a filed offer of 19 June 2013 for $257,000 plus interest and legal costs and disbursements to be agreed or adjudicated. The judge accepted evidence that the filed offer was equivalent to an offer of $427,000 plus costs and disbursements. The evidence consisted of a calculation of the interest payable on the offer of $257,000. Accordingly, the judgment given at trial in the sum of $288,240 did not better the filed offer. The judge’s order relied on 6DCR 187 and 188.
Mr Jackson appeals from the costs order made against him. He submits that the judge erred in making an award of costs against him on a number of grounds. An award of costs is a discretionary judgment. Review of the exercise of that discretion is subject to the principles in House v King.[60]
[60] [1936] HCA 40, (1936) 55 CLR 499 at 504 – 505.
In my view, the appeal in relation to costs must be allowed. First, it must be allowed because the effect of these reasons is to increase the judgment sum to which Mr Jackson is entitled to $412,242.00. This requires the discretion in relation to awarding costs to be exercised afresh.
Second, in any event, I consider the exercise of the judge’s discretion to have miscarried.
6DCR 187 relevantly provides:
187—Offers of settlement
(1) A party may, before the relevant date, file an offer of settlement in the Court (a formal offer of settlement).
(2) The relevant date is—
(a)     the date falling 21 calendar days before the first, or any subsequent, date fixed for the trial to commence; or
(b)     if the offer relates only to costs and is made in proceedings relating only to the adjudication upon costs, the date falling 4 clear business days before the date appointed for the adjudication.
(3) The offer must—
(a)     be in an approved form; and
(b)     if the offer relates to some, but not all, of the claims involved in the proceedings—state to which claims it relates; and
(c)     state whether the offer relates to costs and, if so, the amount of the offer so far as it relates to costs; and
(d)     if the offer relates both to principal relief and costs—state whether the party to whom the offer is made may accept the offer of principal without also accepting the offer as to costs,
and a copy of the offer must be served on all other parties to the action.
…
An order was made by the judge pursuant to 6DCR 188(6) which provides:
188—Consequences of filing offer of settlement in Court
…
(6) If a formal offer of settlement so far as it relates to principal relief is not accepted by the party to whom the offer is made and the Court determines the relevant action or claim on terms (as to principal relief) that are no more favourable to the party than the terms of the offer, then, subject to the Court's order to the contrary—
(a) the party to whom the offer was made is not to be entitled to costs referable to the period falling after the relevant date; and
(b) the party that made the offer—
(i) if a defendant—is entitled to costs referable to the period falling after the relevant date; and
(ii) if a plaintiff—is entitled to the whole of the party's costs of action on a solicitor/client basis and the defendant is not entitled to any costs not otherwise ordered.
(6A) If, after the relevant date, a party accepts a formal offer of settlement insofar as it relates to principal relief, the Court may, on the application of any other party, make such order with respect to costs as it considers appropriate.
In my view, the filed offer of 19 June 2013 was not a valid offer within the meaning of 6DCR 187(3). An offer in the form filed, namely, for a sum plus interest, is not capable of acceptance pursuant to 6DCR 188(3) which provides:
(3)     The acceptance of a formal offer of settlement—
(a)     must be in an approved form; and
(b)     takes effect on the filing of the acceptance in the Court.
The approved form for the purpose of 6DCR 188(3) is Form 37. It provides that the party accepts pursuant to r 188 the offer made and seeks judgment by consent in terms of that offer. The relevant aspect of the offer made was $257,000 plus interest. It is not an offer in respect of which a judgment could be entered in those terms. The amount of the judgment would be uncertain. The corollary of that is that the offeror could not know the amount it had to pay and the offeree could not know the amount it is entitled to receive pursuant to the offer.
This construction is consistent with the authorities relevant to the operation of rules of court governing the making and acceptance of filed offers.
In Duncan and Weller Pty Ltd v Mendelson & Ors[61] Kaye J, with whom Southwell and Hampel JJ agreed, held that a filed offer pursuant to the relevant Victorian rules of court, if accepted, would constitute a binding contract between the parties. Like any contract, to be binding its terms are required to be reasonably certain.[62] To similar effect is the judgment of the Supreme Court of New South Wales in Associated Confectionery (Australia) Ltd v Mineral and Chemical Traders Pty Ltd[63] where Giles J held that a filed offer of a specific sum inclusive of costs could not be treated as an offer of compromise to which effect could be given because it was not possible to determine whether or not the result of the proceedings were more favourable or less favourable than the offer as it was not known how much the specific sum was or should be attributed to costs.[64]
[61] [1989] VR 386.
[62] [1989] VR 386 at 400.
[63] (1991) 25 NSWLR 349.
[64] (1991) 25 NSWLR 349 at 351.
In Normington v Frost & Anor[65] a notice which offered in addition to a specific sum “amounts paid on behalf of the defendants to date relating to the plaintiff’s hospitalisation” was held by a Judge of this Court to be contrary to the then equivalent of 6SCR 187 and 188. Likewise, in Flavel v Mason (No. 2)[66] a Judge of the District Court held that a filed offer for a specific sum which was made subject to a condition that the offer was expressed to be plus outstanding special damages was also a nullity.
[65] (1982) 104 LSJS 180.
[66] (1994) 178 LSJS 340.
For these reasons, I am satisfied that the filed offer of 19 June 2013 was a nullity.
In the alternative, Mr Abram submits that the costs order made against Mr Jackson by the judge is supportable by reason of the separate Calderbank offer made in a letter from Mr Abram’s solicitors also dated 19 June 2013. That was an offer to settle in the sum of $380,000 inclusive of costs and interest. I reject this submission for two reasons. First, the offer is for an amount less than the judgment to which I have found Mr Jackson is entitled. Second, in any event, it was impossible to know whether Mr Jackson had bettered the offer on the original judgment sum because the court could not know how much costs were or how much should be attributed to costs.
Conclusion
I would allow the appeal. I would set aside the judgment and the order for costs. I would enter judgment for Mr Jackson against Mr Abram in the sum of $412,242. I would order Mr Abram to pay Mr Jackson’s costs of and incidental to the trial on a party/party basis. I would hear the parties as to the costs of the appeal.
LOVELL J: I agree with the orders proposed by Stanley J and with his reasons.

Key	FY2006	Key	FY2007	TOTALS
Tax payable on Taxable Income with Reduced Great Southern Investments	A	39,524	K	47,917	87,440
Less: Tax payable on Taxable Income with Reduced Great Southern Investments and Additional Superannuation Contributions	B	(12,186)	L	(9,227)	(21,412)
Tax savings from additional amounts invested in the G&P Jackson Retirement Fund:	C	Net of A & B	27,338	M	Net of K & L	38,690	66,028
Less: Additional tax payable in Fund at 15%	D	15% x J	(13,575)	N	15% x T	(15,383)	(28,958)
Net tax savings from additional amounts invested in the G&P Jackson Retirement Fund:	E	Net of C & D	13,763	O	Net of M & N	23,307	37,070
Calculation of Tax Deduction for Superannuation Contributions
Deduction is lesser of: - $5,000 + 75% of contribution above $5,000 - and age based limit
Age based limit (> 50 years of age)	F	100,587	P	105,113
Less: Already contributed in year as per Income Tax Return	-	(2,562)
Therefore maximum additional deduction available	100,587	107,675
Assumed additional Contributions as per my instructions	119,000	188,000	307,000
Add: Already contributed in year as per Income Tax Return	-	2,562
Total assumed contributed in year	119,000	130,562	190,562
Maximum deduction based on $5,000 + 75% of contribution above $5,000
First $5,000	5,000	5,000
75% of contribution above $5,000	85,500	139,171
Calculated deduction available	G	90,500	Q	144,171
Actual deduction available	H	Lesser of F & G	Lesser of P &Q
This amount is taxable to the fund at 15%	90,500	R	105,113
Less: Amount already contributed in the year as per Income Tax Return	I	Net of H & I	-	S	Net of R & S	(2,562)
Additional deduction available	J	90,500	102,551

Damages:	$225,569
Original award of pre-judgment interest:	$95,000
Additional award of pre-judgment interest:	$45,000
Original gross-up of pre-judgment interest:	$24,207
Additional gross-up of pre-judgment interest:	$11,466
TOTAL:	$401,242