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Livingstone v Mitchell

Livingstone v Mitchell

Case [2007] NSWSC 1477 18 December 2007

Negligence

Causation

Contributory Negligence

Failure to Mitigate

Admissibility of Evidence

Civil Litigation & Procedure

Tort Law

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CITATION: Livingstone v Mitchell [2007] NSWSC 1477

HEARING DATE(S): 19/11/07-23/11/07, 29/11/07, 17/12/07

JUDGMENT DATE :
18 December 2007

JURISDICTION: Common Law

JUDGMENT OF: Walmsley AJ

DECISION: Judgment in favour of the plaintiffs for $10,000 and interest from 9 November 2001.; Costs reserved.

CATCHWORDS: LEGAL PROFESSION – negligence – conveyancing transaction – where defendants retained by plaintiffs on conveyancing transaction – where plaintiffs purchaser of land – where owner-builder work undertaken on land prior to sale – where contract for sale required certificate of insurance for owner-builder work to be attached – where certificate of insurance for owner-builder work not attached to contract – where plaintiffs had a right to rescind contract due to absence of certificate of insurance for owner-builder work – where defendants failed to ensure that contract for sale had certificate of insurance for owner-builder work attached – where defendants failed to advise plaintiffs of right to rescind contract – where owner-builder work on land defective – where plaintiffs obtained pre-purchase inspection report – where defendants admitted breach of duty - TORTS – negligence – causation – purchase of land – whether plaintiffs would have proceeded with purchase had they known of right to rescind contract – where plaintiffs purchased property to redevelop and sell in short term – where vendors in straitened financial circumstances - TORTS – negligence – damages – measure of damages – solicitor negligence in conveyancing transaction – whether plaintiffs able to recover cost of rectifying defects in owner-builder works – whether measure of damages amount that would have been recoverable under insurance policy for owner-builder work – whether damages limited to diminution of value of land – whether measure of damages amount by which plaintiff could have negotiated reduction in purchase price for absence of certificate of insurance for owner-builder work - TORTS – negligence – contributory negligence – whether plaintiffs ought to have obtained more detailed pre-purchase inspection report - TORTS – negligence – failure to mitigate – where plaintiff failed to sell property upon discovering defects – where plaintiff failed to sue vendors – where vendors unable to be located - EVIDENCE – admissibility – torts – negligence – causation – where factual causation dependant on what plaintiff would have done if properly advised – inadmissibility of statements by plaintiffs regarding what they would have done if properly advised – whether evidence by non-plaintiff as to what he would have done but for the defendant’s negligence admissible – Civil Liability Act 2005, s 5D(3)(b)

LEGISLATION CITED: Civil Liability Act 2002
Fair Trading Act 1987
Home Building Act 1989

CASES CITED: Brooker v Friend [2006] NSWCA 385
Butler v Egg and Egg Pulp Marketing Board (1966) 114 CLR 185
Carter v T G Baynes & Sons [1998] EGCS 109
Chamberlain v Ormsby t/as Ormsby Flower [2005] NSWCA 454
Dalton v Dama Pty Ltd (1984) BCLRS 143
Elbourne v Gibbs [2006] NSWCA 127
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553
Feletti v Kontoulas [2000] NSWCA 59
Festa Holdings Pty Ltd v…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Livingstone v Mitchell

Details

AGLC: Livingstone v Mitchell [2007] NSWSC 1477
Case: [2007] NSWSC 1477
Decision Date: 18 December 2007

CaseChat Overview and Summary

The dispute in Livingstone v Mitchell involved the plaintiffs, who engaged the defendants as their solicitors for a conveyancing transaction. The plaintiffs purchased a property with the intention to redevelop and sell it in the short term. The property had owner-builder work that was defective, and there was a failure in the conveyance process as a certificate of insurance for the owner-builder work was not attached to the contract for sale. This omission provided the plaintiffs with the right to rescind the contract, a fact the defendants failed to advise them of. The defendants admitted to breaching their duty of care.

The central legal issues the court needed to address included whether the plaintiffs would have rescinded the contract had they known of their right, the measure of damages for the solicitor's negligence, and whether the plaintiffs could recover the cost of rectifying the defects in the owner-builder work. Additionally, the court had to consider whether the plaintiffs were contributorily negligent by not obtaining a more detailed pre-purchase inspection report and whether they failed to mitigate their losses by not selling the property upon discovering the defects.

The court ruled that the plaintiffs' evidence regarding what they would have done if properly advised was inadmissible as it was speculative. However, the court allowed evidence from a non-plaintiff regarding what he would have done but for the defendant's negligence. The court found that the plaintiffs could recover the cost of rectifying the defects in the owner-builder work. The measure of damages was determined to be the amount that would have been recoverable under the insurance policy for the owner-builder work, not limited to the diminution in the value of the land. The court also held that the plaintiffs were contributorily negligent and failed to mitigate their losses, which reduced the damages awarded.

The final orders of the court included a determination that the defendants were liable for the cost of rectifying the defects in the owner-builder work, subject to a reduction for contributory negligence and failure to mitigate. The court also clarified the measure of damages and the admissibility of certain evidence in relation to the plaintiffs' potential actions had they been properly advised.

Orders