Lucantonio v Kleinert

[2011] NSWSC 753

Supreme Court

New South Wales

Medium Neutral Citation:	Lucantonio v Kleinert & ors [2011] NSWSC 753
Hearing dates:	3 to 14, 20 August, 18 September, 13 & 23 October, 4 December 2009
Decision date:	20 July 2011
Jurisdiction:	Common Law
Before:	Brereton J
Decision:	Plaintiff fails to establish liability of first, second and third defendants in negligence.
Catchwords:	NEGLIGENCE - Architect - whether negligently advised that building could not be constructed in compliance with plans in DA with which property purchased by plaintiff - where advice only established to be incorrect after iterative development of plans in context of subsequent litigation and as a result of incorporation of apparently innovative design - architect did not depart from standards of practice of reasonably competent and prudent architects - no breach of duty of care. MISLEADING AND DECEPTIVE CONDUCT - Architect's advice said to be misleading - whether opinion that building could not be constructed in compliance with plans in DA - professional opinion recognisable as such not misleading by reason of proving incorrect so long as genuinely held and a basis for it exists - opinion genuinely held - opinion not without grounds - only established to be incorrect after iterative development of plans in context of subsequent litigation as a result of incorporation of apparently innovative design - not unreasonable that architect did not discern this at time opinion proffered - no misleading and deceptive conduct. BARRISTERS - Professional negligence - where barrister said to have breached duty of care by advising institution and subsequently not advising discontinuance of proceedings for specific performance with compensation in circumstances that purchaser had architect's advice that building could not be constructed in compliance with plans in DA with which property purchased and various conditions of contract limited purchaser's rights in that respect - where proceedings continued after judge on application to extend operation of caveat holds no serious question to be tried on basis of one condition - arguable case to contrary on that condition - where claim for specific performance with compensation very weak but proceedings included well arguable claims for misleading and deceptive conduct and for return of deposit - barrister did not in relevant respects depart from standard expected of a barrister of reasonable competence and prudence - no breach of duty of care - in any event, properly advised plaintiff would have continued proceedings to claim damages under Fair Trading Act - causation could not have been established. SOLICITORS - Professional negligence - whether breached duty of care by advising institution and subsequently not advising discontinuance of proceedings for specific performance and compensation - solicitor receives advice from barrister that claim is arguable - not glaringly wrong - solicitor entitled to rely on advice - no breach of duty of care. SOLICITORS - Professional negligence - solicitor for purchaser receives notice to complete from vendor - reasonably competent and prudent solicitor in such circumstances obliged to discuss courses of action and their advantages and disadvantages with client to enable client to make informed decision - solicitor fails to give advice in timely manner - breach of duty established - causation - properly advised plaintiff would have been presented with options to complete purchase and sue for damages, or refuse to complete and bring actions for misleading and deceptive conduct under Fair Trading Act, s 42 and for return of deposit under Conveyancing Act s 55(2A) - former option less legally risky, latter more commercially attractive to plaintiff - contemporaneous statements and surrounding circumstances evince that particular plaintiff, properly advised, would still have taken more commercial option - causation not established.
Legislation Cited:	(NSW) Civil Liability Act 2002, s 5D (NSW) Conveyancing Act 1919, s 55(2A) (NSW) Environmental Planning and Assessment Act 1979, s 96 (NSW) Fair Trading Act 1987, s 42
Cases Cited:	Batey v Gifford (1997) 42 NSWLR 710 Beard v Drummoyne Municipal Council (1969) 71 SR (NSW) 250 Boland v Yates (1999) 74 ALJR 209 Cook v S [1966] 1 All ER 248 Dainford Ltd v Lam (1985) 3 NSWLR 255 Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 Heenan v Di Sisto (2008) 13 BPR 25 Heydon v NRMA Ltd (2000) 51 NSWLR 1 James v ANZ Banking Group Ltd (1986) 64 ALR 347 Jenmain Builders Ltd v Steed & Steed [2000] Lloyd's Rep PN 549 Lucantonio v Ciofuli [2002] NSWSC 509 Lucantonio v Ciofuli [2003] NSWSC 1058 Lucantonio v Concord Council [2001] NSWLEC 52 Lucantonio v Kleinert [2009] NSWSC 853 Makita v Sprowles (2001) 52 NSWLR 705 Notaras v Sly & Weigall [2005] NSWCA 275 Saif Ali v Sydney Mitchell & Co (a firm) and Ors [1980] AC 198 Tambel v Field (1982) 2 BPR 9593 Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426 Yates Property Corporation v Boland (1998) 85 FCR 84
Category:	Principal judgment
Parties:	Dean Lucantonio atf The Lucantonio Family Trust (first plaintiff) Dino Lucantonio (second plaintiff) Jaime Kleinert (first defendant) Otto Stichter (second defendant) Darryl Leslie Warren (third defendant)
Representation:	Counsel: Mr G Laughton SC w Ms D Christofis (plaintiffs) Mr R Darke SC (first defendant) Mr G Curtin (second defendant) Mr M Ashhurst SC (third defendant) Solicitors: Gells Lawyers (plaintiffs) Kennedys (first defendant) DLA Phillips Fox (second defendant) McCabe Terrill Lawyers (third defendant)
File Number(s):	2004/176817

Judgment

1. HIS HONOUR: The plaintiff Dean Lucantonio, as the present trustee of the Lucantonio Family Trust, claims damages in respect of losses said to have been occasioned by the failure of a proposed acquisition of land for development, and of subsequent legal proceedings arising out of that attempted acquisition, alleging that those losses were caused or contributed to by the professional negligence respectively of the first defendant Mr Kleinert as the architectural consultant retained in respect of the proposed development, the second defendant Mr Stichter as the solicitor who acted for the purchaser on the contract and in the subsequent litigation, and the third defendant Mr Warren as the barrister retained for the purchaser in that litigation. There are cross-claims between the defendants for contribution.

Apology

1. The present proceedings arise out of a property transaction entered into in late 2001, and litigation which ensued in 2002 and concluded in 2003. They were instituted in 2004, and came to trial before me five years later in 2009, when the evidence was heard over a period of 10 days between 30 July and 14 August. After an exchange of written submissions, oral submissions were heard on 20 August. Further written submissions were completed by 26 August. However, on 9 September 2009, Mr Lucantonio filed an application for leave to reopen the plaintiff's case, by tendering further evidence. That application was heard on 13 October 2009, and granted upon terms that relevant witnesses be recalled. The further evidence was heard on 4 December, and further written submissions in respect of it closed on 10 December 2009. The delay since then, of about eighteen months, has been mine, largely attributable to the intervention of other hearings, and then the increasing need with the passage of time since the trial to refamiliarise myself with the detail of some aspects of the evidence and argument. For that, I apologise.

Background

1. On 3 November 2001, Mr Lucantonio and his wife Paulette Lucantonio, as then trustees of their family trust, purchased at auction from Lucia Ciofuli ("the vendor") a commercial property situate at and known as XX Majors Bay Road, Concord, for a price of $2,200,000, and paid the deposit of $220,000. The contract provided that completion was to take place on 16 January 2002. The City of Canada Bay Council had given development approval for a commercial redevelopment of the property, involving the demolition of the existing building, and the erection of a building comprising retail shops, commercial units and 21 underground car parking spaces, on two levels.

1. The printed terms of the contract, which was in the form of the 2000 edition of the Law Society/Real Estate Institute proforma, included the following:

6 Error or misdescription

6.1 The purchaser can (but only before completion) claim compensation for an error or misdescription in this contract (as to the Property, the title or anything else and whether substantial or not).

6.2 This clause applies even if the purchaser did not take notice of or rely on anything in this contract containing or giving rise to the error or misdescription.

6.3 However, this clause does not apply to the extent the purchaser knows the true position.

7 Claims by purchaser

The purchaser can make a claim (including a claim under clause 6) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion -

7.1 the vendor can rescind if in the case of claims that are not claims for delay -

7.1.1 the total amount claimed exceeds 5% of the price;

7.1.2 the vendor serves notice of intention to rescind; and

7.1.3 the purchaser does not serve notice waiving the claims within 14 days after that service; and

7.2 if the vendor does not rescind, the parties must complete and if this contract is completed -

7.2.1 the lesser of the total amount claimed and 10% of the price must be paid out of the price to, and held by, the deposit holder until the claims are finalised or lapse...

1. However, clause 7.1.1 was struck out, so that the vendor would be entitled to rescind even if the claim for compensation was for less than 5% of the price. In addition to the printed standard conditions, the contract contained a number of special conditions. Relevantly, special condition 31 provided:

31. The Purchaser acknowledges that he does not rely in this Contract upon any warranty or representation made except as are expressly provided herein but has relied entirely upon his inspection of the property and his own enquiries relating thereto.

1. Special Condition 40 was as follows:

40. The purchaser acknowledges that annexed to the contract is a Notice of Determination of a Development Application dated 4 September, 2001 in respect of the property issued by the City of Canada Bay Council and accompanying documents. The Purchaser agrees that they shall not raise any objection, requisition, claim for compensation or be entitled to delay completion because of the said Notice or accompanying documents.

1. Beneath this had been added, in handwriting, as a result of negotiations before the auction, the following:

40 - The Vendor, by virtue of completion assigns to the Purchaser all copyright in the said development consent and will upon completion deliver to the purchaser all original plans, drawings and consents in relation thereto. This clause will not merge upon completion.

1. Conformably with special condition 40, annexed to the contract was a copy of the City of Canada Bay Council's Notice of Determination made on 4 September 2001, in respect of the development application. In it, the Council had granted development consent for renovations and alterations to provide 17 commercial/retail units with basement parking, subject to certain conditions. Condition 1 required that the development take place and operate generally in accordance with the consent and certain specified accompanying sheets, noting that any minor modification to the approved plans would require the lodgement and assessment of an application to modify consent under (NSW) Environmental Planning and Assessment Act 1979, s 96, and that major modifications would require the lodgement and consideration of a new development application. Conditions 3, 4, 5 and 7 pointed to the need to comply with the Building Code of Australia 1996, and to obtain a construction certificate. Conditions 37, 38, 40 and 41 related to off-street parking, and stipulated that no fewer than 21 car parking spaces be provided in accordance with the approved plans for the parking of resident and visitor vehicles on the site.

1. The attachment included the plans for the proposed development for which approval had been given ("the development approval plans"). They provided for 21 car parking spaces, on two levels. Though said to be to scale, the plans were not very detailed, and did not depict the dimensions of the car spaces, passageways and ramps in the basement levels; in order to obtain a construction certificate (and build the development) it would be necessary to produce architectural plans and specifications, complying with the Building Code of Australia and relevant Australian standards, as well as with the development approval and its conditions.

1. The development approval was fundamental to the Lucantonios' commercial decision to purchase the property. Mr Lucantonio is a builder, who also has experience as a property developer, and lives in the locality of the property. He had become aware that the property was for sale about the beginning of October 2001, when he saw an advertisement in a local newspaper. The advertisement included photographs of the building and the surrounding Concord shopping centre, and prominently stated "DEVELOPMENT OPPORTUNITY" in block letters, and a lso, "D.A. approved for the conversion of the existing building to five shops, 12 professional suites and 21 basement car spaces". Mr Lucantonio also saw a sign, displayed above the awning of the building, stating:

AUCTION

D.A. APPROVED

5 x shops

12 x professional

suites

Basement parking for

21 cars

1. Mr Lucantonio's evidence, which in this respect I accept without hesitation, was that he and his wife decided to purchase the property with the intention of developing it in accordance with the approve d development application, and that without the development approval they would not have done so. Mr Lucantonio had had some unfavourable experiences in dealings with the Council, and was strongly disinclined to acquire properties without development approval, because of the associated risks and delays; indeed, his experiences had been such that he had resolved never again to buy a development site with a view to obtaining development approval after acquisition. He was aware that any modification of the plans would involve an application to the Council, which in his experience could be difficult and involve significant delay and costs, and which he considered fraught because of his poor history with the Council. It was also his view, and obvious enough, that without the development approval, the property would not have been worth the price he agreed to pay.

1. Generally, Mr Lucantonio seemed careful and relatively precise in his oral evidence. On occasion, however, he seemed over-enthusiastic to emphasise a point he was seeking to make favourable to his case, and in particular to inculpate Mr Stichter. His evidence was not without occasional inconsistency; in particular, his recollection of some matters was at variance with his evidence before Bryson J. He has no contemporaneous diary or other notes of his relevant conversations with Mr Stichter and Mr Warren. But a major attack on his credit miscarried when, following the re-opening of his case, it was demonstrated that he, and his parents as guarantors, had indeed executed the requisite finance documents for the National Australia Bank by 7 January 2002. Generally, I am inclined to prefer his version to that of Mr Stichter, but as will appear below, I neither wholly accept nor wholly reject his evidence; the above considerations have informed my judgment on particular factual issues to which I shall in due course come.

1. Mr Stichter, who had a lengthy professional relationship with Mr Lucantonio, acted for the Lucantonios on the purchase. Unsurprisingly, eight years after the relevant events, Mr Stichter demonstrated poor recollection of many of the events. There were significant discrepancies between his two affidavits, and his evidence fluctuated as he sought to rationalise the inconsistencies. There was a stark contrast between his general (and understandable) lack of precision and certainty, with his claimed specific clarity on some crucial matters. This was not assisted by his lack of contemporaneous notes. I readily accept that the failure to keep file notes of conversations, as a matter of practice, is not of itself negligent, nor probative of negligence, nor of itself is it adverse to his credit. But it deprives him of corroboration, or material to refresh his recollection, when it was much needed. In the circumstances, precise recollection of the crucial conversations is unlikely, and it is natural, and not dishonest, for a witness in those circumstances to endeavour to reconstruct them; but such reconstruction can be unreliable, as it is prone to favour the interests of the witness. The above considerations have informed my overall assessment of his evidence, including those aspects of it, referred to below, where I have, on the probabilities, preferred another version to his.

1. Mr Warren appeared generally to be a careful and satisfactory witness. However, his affidavit version of his 5 February telephone conference with Mr Lucantonio differs in significant respects, in a manner favourable to him, from his contemporaneous file note: one is the way in which the discussion about compensation under the contract is described, and the other is that there is no reference in the file note to any statement by Mr Lucantonio to the effect that he could not get a loan if the DA was "no good". The difference in the former respect is so marked that I cannot find his subsequent recollection reliable, and I prefer his file note as likely to be the more accurate version.

1. Following exchange of contracts, the Lucantonios promptly arranged finance for $3,867,000, in order to be able to fund the development as well as the purchase. Mr Stichter issued standard requisitions on title on 8 November 2001; they raised no question about the development approval, and were answered on 12 November 2001.

1. On 13 November 2001, the Lucantonios engaged Mr Kleinert to undertake the necessary work, including preparation of drawings, to obtain a construction certificate, so that they could proceed expeditiously with the development project. Mr Lucantonio met Mr Kleinert on site, and gave him a set of plans photocopied from the contract, on A4 sized paper. Subsequently, Mr Lucantonio sent him a further set of plans on A1 sized paper. Mr Lucantonio told Mr Kleinert that he wanted to have a construction certificate by Christmas, and that he could not afford to have the matter sitting in Council for six months with the overheads he was paying and his history with the Council.

1. On 21 November 2001, Mr Kleinert, having inspected the property, telephoned Mr Lucantonio and told him:

It's just not going to work. We don't have enough space to get the thing to comply. By the time we take out walls etc, there's just not enough space.

1. Mr Kleinert sent a letter on 21 November 2001 confirming this advice. In it, Mr Kleinert wrote that there had been errors and items omitted from the development approval drawings. He listed a number of concerns, in particular that 21 compliant car parking spaces could not be fitted on the two basement levels proposed. He expressed the view that the requisite layout changes to accommodate them would necessitate an additional basement level of parking, with obvious increased building costs (later estimates were to vary between an additional $200,000 and $500,000), and a new development application, or at the least an amendment under Environmental Planning and Assessment Act, s 96.

1. Mr Lucantonio forwarded Mr Kleinert's letter to Mr Stichter the same day, and consulted him on 22 November 2001, when they discussed Mr Kleinert's advice that it was impossible to obtain the relevant number of car park spaces, and the need for a new development application, or s 96 amendment. Mr Lucantonio made clear that he really wanted the property, but could not go back to Council for significant amendments; he said that he could not afford the time and the money to go back to Council for a new approval. Mr Stichter said that the vendor may give compensation by way of a reduced price, and referred to standard condition 7. He advised Mr Lucantonio to the effect that, if Mr Kleinert was correct, the Lucantonios would (or may) have rights against the vendor; and that while he had not yet looked into it, off the top of his head it seemed that there were a couple of options, the first being to settle the purchase and claim damages later; the second being to seek a declaration as to whether he was entitled to terminate the contract; and a third possibility being to institute proceedings for specific performance, on the basis that the vendor was conveying something substantially different from what he had contracted to buy, and for damages for misleading and deceptive conduct under the (NSW) Fair Trading Act 1987, s 42. Mr Stichter admittedly harboured some doubts as to whether proceedings for specific performance with compensation could succeed, in the face of special condition 40; and it was this, coupled with the thought that one could not contract out of rights under the Fair Trading Act , that prompted consideration of that Act as providing a relevant remedy.

1. Following this conference, Mr Stichter the same day wrote to the vendor's solicitor (initially without prejudice), referring to the problems asserted by Mr Kleinert, and requiring that the vendor bear the cost of obtaining amended plans and of applying for variation of the Council's consent - and also the additional building, engineering, architectural and geotechnical costs, estimated at that time to be in the vicinity of $200,000 - and that if the Council were to refuse to amend the development approval, the purchasers be entitled to rescind the contract. The vendor's solicitor responded by letter dated 27 November 2001, to the effect that the property had been sold with copies of the development consent and approved drawings available for inspection prior to the auction, and also that the vendor was not convinced by the architect's assertions; in addition, the vendor relied on special condition 40, concluding that the matter was "not negotiable", and that settlement was required on 16 January 2002.

1. On 3 December, Mr Stichter sent Mr Warren by facsimile a copy of relevant parts of the contract and a copy of Mr Stichter's letter of 22 November, and asked him to telephone. Mr Warren joined, by telephone, a conference between Mr Stichter and Mr Lucantonio that day, in the course of which Mr Stichter explained the nature of the problem, and that Mr Lucantonio wanted to keep the property, but at a reduced price. Mr Warren told them that he had been involved in a matter [ Dainford Ltd v Lam (1985) 3 NSWLR 255] in which specific performance with compensation had been ordered, and that that may be an available remedy. Mr Stichter drew attention to special condition 40, and Mr Warren provided some reasons as to why it might not preclude such a claim. According to Mr Lucantonio, Mr Warren said that if the building could not be built as approved, he should sue for specific performance, as the vendor was "not giving us what they have contracted to", and "a vendor has to give us what we have contracted to buy". He also proposed a claim for misleading and deceptive conduct under the Fair Trading Act , because one cannot contract out of obligations under that Act. Mr Stichter also referred to not being able to contract out of the Fair Trading Act .

1. I do not accept that (as Mr Stichter asserted) at this conference Mr Stichter recommended that settlement was the safest course, nor that Mr Lucantonio replied to the effect that he would not have enough finance to complete. On this, I prefer Mr Lucantonio's version, for two reasons in addition to the general unreliability of Mr Stichter's recollection: the question of whether or not to complete had not yet arisen in any immediate way, and it is unlikely that Mr Lucantonio, who already had a finance approval and was pursuing another, would have asserted at that stage that he would not be able to raise the funds to settle. Rather, I accept that (as Mr Lucantonio claims) he asked Mr Stichter, "What shall I tell the bank?" (as while he did not believe that there was any short term need to contact the bank, he was concerned that problems with the development approval could affect the bank's approach in the longer term if they were not resolved), and Mr Stichter advised against telling the bank at that stage; while he did not give and was not asked to give reasons for that advice, it was reasonable enough in circumstances where he was still negotiating with the vendor.

1. I infer that instructions to commence proceedings along the lines discussed must have been given by Mr Lucantonio in the course of this telephone conference, and that such instructions reflected advice that that was an appropriate course of action in the circumstances. The theory of the claim for specific performance with compensation was that the vendor was said to be obliged to convey a property with an efficacious (or "buildable") development approval, or otherwise to allow compensation for the additional cost that would be incurred; such a remedy, if obtained, would give the Lucantonios exactly the outcome they preferred. The theory of the claim for damages under the Fair Trading Act was that the Lucantonios had purchased the property in reliance upon representations to the effect that there was a development approval for a development that was feasible. Although in cross-examination Mr Stichter claimed that, before instituting proceedings, he received from Mr Warren and conveyed to Mr Lucantonio advice to the effect that, if Mr Kleinert were correct, the prospects of success were good, that is denied by Mr Warren, not corroborated by Mr Lucantonio, nor by any contemporaneous record, and did not appear in either of Mr Stichter's affidavits, emerging only in the course of his cross-examination; I am on balance unpersuaded that any such advice was given at that stage. Mr Lucantonio does not assert that he was given any particular advice as to their prospects of success at that stage, and in my view the advice he was given conveyed no more than that it was legally and tactically appropriate to institute such proceedings, in which a remedy that if obtained would deliver exactly the result he sought could be claimed. Mr Lucantonio also understood that Mr Kleinert's advice was fundamental to Mr Warren's advice and to Mr Stichter's advice, and that the proposed proceedings were based on that advice.

1. On 6 December, Mr Warren drafted the summons and affidavit, and prepared his fee agreement, and on 10 December, he forwarded the draft summons and affidavit to Mr Stichter. The draft summons claimed specific performance of the contract, in addition or in substitution damages, and also damages for misleading and deceptive conduct under the Fair Trading Act .

1. At the request of Mr Lucantonio, Mr Kleinert obtained the views of Mr Ross Nettle, a consultant in transportation and traffic planning, who provided a report dated 13 December 2001, to the effect that the plans with the development approval did not truly depict the existing structural elements, with the consequence that there were significant non-compliances relating to the parking spaces, and that it would not in reality be possible to achieve 21 parking spaces and satisfy Council's code and consent conditions. The effect of this was to confirm to Mr Lucantonio that there would have to be a redesign, and that the Council would have to be asked to modify the development approval so as to allow for an extra level of basement car parking, with further excavation, to obtain 21 spaces - which would incur the delays and holding costs associated with an application to Council, and also involve substantial additional construction costs.

1. The proceedings were instituted on 21 December. In accordance with Mr Warren's draft, the summons claimed specific performance, in addition or in substitution damages, and also damages for misleading and deceptive conduct under the Fair Trading Act ("the Equity proceedings"). Following some difficulties in effecting service, Mr Stichter obtained an order for substituted service, which was complied with on 31 January 2002 and deemed to be effective on 7 February 2002.

1. The Lucantonios did not complete the contract on 16 January, the date appointed by the contract for completion, and on 17 January the vendor's solicitor gave notice to complete, appointing 2 pm on 6 February 2002 as the time for completion. Mr Stichter responded on 18 January 2002, denying that the vendor was entitled to issue a notice to complete, and disputing that the vendor was ready and willing to transfer the property in accordance with the contract.

1. According to Mr Stichter, on 17 January 2002 he advised Mr Lucantonio that he was required to complete the purchase on 6 February, and that if he did not the vendor would be entitled to terminate; Mr Lucantonio responded that he would have difficulties getting finance approved, and that he did not want to settle without a reduction in the purchase price. According to Mr Lucantonio, during this period he constantly tried to telephone Mr Stichter, who was apparently too busy to see him or take his calls. However, Mr Lucantonio accepted that he received and read a copy of the notice to complete. I accept that on or about 17 February, Mr Stichter conveyed to Mr Lucantonio, and Mr Lucantonio understood, the effect of the notice to complete, and that Mr Lucantonio said that he did not want to settle without a reduction in the purchase price; I do not accept that Mr Lucantonio said that he would have difficulties getting finance approved (as he already had finance approval and by 7 January all requisite documents for that purpose had been executed), nor (as Mr Stichter asserts) that he then told Mr Lucantonio that the safest option would be to complete the purchase: such a statement does not sit at all with the statement that Mr Stichter attributes to Mr Lucantonio about difficulties in securing finance (even though I do not accept that Mr Lucantonio made such a statement, the inconsistency tells against the accuracy of Mr Stichter's recollection); it is also inconsistent with the absence of any reference to completion as an option in his 1 February facsimile to Mr Warren, referred to below.

1. The vendor's solicitor sent settlement figures to Mr Stichter on 31 January 2002, providing for payment in full of the balance of purchase money, with no provision for compensation, under cover of a letter which stated that if the purchasers did not complete on the due date nominated by the notice to complete, then the vendor would terminate the contract.

1. On Friday 1 February 2002, Mr Stichter sent a facsimile to Mr Warren, as follows:

1. Following difficulties in locating the Defendant for service, we obtained an order for substituted service upon the solicitor for Ciofuli and Ciofuli's brother.

2. Under the terms of that order, service is deemed effected 7 days after the service of both such persons.

3. Service upon both was effected yesterday, 31.01.2002.

4. The Notice to Complete issued upon our client expires on 06/02/02.

5. Enclosed is a copy of a fax dated 31.01.2002 from Ciofuli's solicitor.

6. Dean wants to buy the property but would like compensation by reason of the matters the subject of his Supreme Court proceedings.

7. However because of those matters needing to be disclosed to his incoming mortgagee, he will have difficulties with finance.

8. The approval he had for finance has now lapsed.

9. Would you please call me to discuss appropriate action relative to the solicitor's fax and in relation to the matter generally.

10. The options I see:

a. Seek urgent injunction to restrain the threatened termination.

b. Seek urgent orders that the Notice to Complete is invalid.

c. Dispute the termination post-termination and caveat the title.

1. Thus, as well as informing him of the date of expiry of the notice to complete, this facsimile informed Mr Warren that Mr Lucantonio's finance had lapsed (in this respect, incorrectly in substance, as he had a new approval from National Australia Bank), and that because of the problems with the development approval which Mr Lucantonio would have to disclose to his mortgagee, there would be difficulties with alternative finance. Mr Stichter proffered as the available options (1) applying for an injunction restraining the termination, (2) applying for a declaration that the notice to complete was invalid, or (3) disputing the termination after the event and lodging a caveat. Notably, the prospect of completing the purchase and claiming damages after the event was not raised by him.

1. In his second affidavit - but not in his first - Mr Stichter claimed that he advised Mr Warren of the notice to complete on or about the date he received it. Mr Warren denies this; there is no record of any such communication; and Mr Stichter's above facsimile to Mr Warren of 1 February 2002, informing him of the date of expiry of the notice to complete and seeking advice in respect of it, tells more in favour of Mr Warren's denial than Mr Stichter's assertion. On balance, I am unpersuaded that Mr Warren was told of the notice prior to the facsimile of 1 February; in any event, he was not asked to advice in respect of it prior to that date.

1. Mr Stichter says that he had a telephone conversation with Mr Warren on 1 February 2002. While he had previously asserted that he had attended a meeting that day at Mr Warren's chambers, with Mr Lucantonio and Mr Lucantonio's mother, at which the notice to complete was discussed, he ultimately agreed with Mr Lucantonio's version that there was a conference at about this time in Mr Stichter's office, which Mr Warren joined by telephone, explaining that he had confused the chambers meeting with another occasion.

1. Mr Lucantonio says that at this telephone conference, Mr Stichter said to ignore the notice to complete as the vendor was not providing what it had contracted to sell; Mr Warren said that the vendor had no right to issue a notice to complete, based on the fact that the purchaser was seeking specific performance of the contract, and that termination by the vendor would be a repudiation, entitling the purchaser to elect to terminate and claim damages; and Mr Stichter repeated his earlier advice not to tell the bank. Neither Mr Warren nor Mr Stichter agrees with Mr Lucantonio's version. According to Mr Stichter, he said to Mr Lucantonio:

You'll have trouble with the bank if you disclose the problem with the DA.

1. Mr Stichter says that Mr Warren gave advice to the effect that, if the vendor were to terminate, Mr Lucantonio could dispute the termination on the basis that the development approval was invalid, and/or treat the termination as a repudiation and recover the deposit. Mr Warren agrees that he had a telephone conversation with Mr Stichter to that effect, but says that it was on Monday 4 February 2002; he denies any oral communication on 1 February 2002, maintaining that he was engaged that day with personal medical appointments and court appearances, did not read Mr Stichter's facsimile until Monday 4 February 2002 (or possibly over the weekend), and did not give any advice in response to it until 4 February 2002.

1. Mr Stichter's recollection of these events is plainly unreliable. Mr Warren offers some rational basis for his assertion that it was on 4 and not 1 February, namely his other commitments on 1 February. Mr Lucantonio says that it was on 3 February, but that was a Sunday and is less likely than Mr Warren's version; as to the content, the inherent improbability that two lawyers gave advice in such absolute terms as he asserts is increased by the inconsistency of such advice with the terms of Mr Stichter's above facsimile of 1 February, his subsequent advice of 5 February referred to below, and also Mr Warren's advice of 5 February (as recorded in his contemporaneous file note). It may well be that one or both of the lawyers said that if the vendor terminated, it could and should be argued that the notice to complete was invalid, but I do not accept that either gave unqualified advice to the effect that it could safely be ignored. Such advice would be quite inconsistent with the approach of all participants between 1 and 5 February, which - far from ignoring the notice to complete - involved addressing which of several potential courses of action should be adopted in response to it, and (on 4 February) seeking to negotiate with the vendor. Insofar as they gave advice on these matters, I find that it was to the effect that these were positions and arguments that could be adopted on behalf of the Lucantonios in certain events; not that they were the best or safest or an assured course of action. It is far more likely that the advice was to the effect asserted by Mr Stichter and Mr Warren, that if the vendor were to terminate, Mr Lucantonio could dispute the termination on the basis that the development approval was invalid. I find that Mr Warren gave advice to that effect in a telephone conference on Monday 4 February 2002. It is significant that, on Mr Stichter's version, the suggestion that there would be trouble with the Bank if the problems with the DA were disclosed was raised by him, and not by Mr Lucantonio.

1. On 4 February 2002, Mr Stichter wrote, without prejudice, to the vendor's solicitor, noting that the Lucantonios disputed the validity of the notice to complete, but making an offer to complete the sale pending determination of the Lucantonios' claim for damages, if time for completion were extended to 13 February, and the sum of $300,000 were withheld from the purchase money and retained in Mr Stichter's trust account pending the Court's determination. This letter was drafted by Mr Stichter (proposing an extended completion date of 20 February) and settled by Mr Warren (altering that date to 13 February), and I infer reflected instructions received that day, probably in the conference to which I have referred; so much accords with para 12 of Mr Stichter's 5 February facsimile, referred to below.

1. Also on 4 February, Mr Stichter had a without prejudice telephone conversation with the vendor's solicitor, proposing (I infer in accordance with his instructions, as his note of the conversation suggests) that the deposit and accrued interest be returned to the Lucantonios and that each party "walks away". In his note, Mr Stichter observed that there were therefore two options: (1) to settle, retaining $300,000 in trust pending determination; and (2) to recover the deposit and interest, and each party walks away. Settlement with payment to the vendor of the full balance purchase money was not one of them.

1. The vendor's solicitor rejected both the 4 February offers by facsimile letter of 5 February 2002; in another facsimile letter he also provided cheque directions for settlement, confirming the time and place for settlement at 2.00 pm on 6 February. Mr Stichter forwarded these facsimiles to Mr Warren that day.

1. On 5 February, Mr Warren had a telephone conversation with Mr Lucantonio, of which he made a detailed file note, as follows:

5 February, 2002

Lengthy telephone conference - Mr Lucantonio concerning the various options that he has and discussing the case generally.

I indicate the consequences of failing to complete in accordance with a valid Notice to Complete and also point out that if the Notice to Complete is invalid then the termination is no more than a repudiation i.e. the contract still remains on foot.

If the termination is valid then the purchaser will lose the deposit and, subject to the price of the property, may be liable for damages.

One need only look at the argument to see the problem in the vendor's case in that if the property is now only worth $1.5 million, it is worth that figure not because the property market has dropped but because the purchaser could not build the property for which purported development consent has been issued. Therefore the property is worth less because there will need to be further work done on it.

If the termination is invalid and the contract is on foot then the purchaser can seek specific performance and damages.

Mr. Lucantonio asks whether if he settles it would be possible then to sue the vendor for damages. I indicate that in my view it would providing one reserved one's position as to this so that there is no merger on completion.

The difficulty that may flow from such a course is that if the funds are disbursed it may be difficult to recover the damages from the vendor.

The third alternative is to continue to seek specific performance with compensation i.e. maintain the current position.

Mr. Lucantonio asks what his chances are.

I state that in my opinion his chances are good but I cannot give any assurance as there are too many vagaries in litigation.

He will speak to Otto Stichter who may then call me.

We also discussed the question of claiming compensation under the contract but on looking at the contract it appears that Clause 7.1.1 has been deleted and therefore one cannot claim compensation under the contract.

1. Thus, according to Mr Warren, it was Mr Lucantonio who raised the question of completing the purchase and pursuing a claim for damages, and expressed no surprise when Mr Warren confirmed that it was an option; in this respect I accept Mr Warren's version. However, I do not accept that (as asserted by Mr Warren but denied by Mr Lucantonio) Mr Lucantonio said that he could not get the loan if the DA was no good: no such statement is reflected in Mr Warren's file note, and it would be inconsistent with the then status of the Lucantonios' finance application with National Australia Bank.

1. There is an issue as to whether, on or about 5 February, Mr Warren gave advice to the effect, "You can forget about the notice to complete". Mr Warren's file note of his conversation with Mr Lucantonio on 5 February - and according to Mr Warren's fee records there was only one - is entirely inconsistent with his giving such advice. In addition to inherent improbability, the reasons advanced above for rejecting the contention that a similar statement was made by either of the lawyers on 4 February, also supports rejection of the proposition that it was made on 5 February.

1. On 5 February 2002, at 6.05 pm, Mr Lucantonio sent a facsimile to Mr Stichter:

I will not be phonable until after [illegible].

I ask the following:

1) If our stand is that they do not have a right to terminate: Can we (preferable for me!! Is it risky?)

A) Seek to have their termination made invalid,

Then, B) Continue with our initial claim.

2) If there is no way to achieve our initial objective then bail out. But:

A) What's the difference between

1. Us terminating now & haggling over deposit

2. Waiting for them to terminate, seek to have that nullified & terminate claims & haggle over the deposit.

B) If we terminate now they may realize that we're not bluffing.

1. This facsimile contained no hint that completing the purchase was an available course, although Mr Lucantonio had raised and discussed that option with Mr Warren. References to the "initial objective" appear to be to the objective of completing the purchase at a reduced price, or having $300,000 withheld pending determination of the Lucantonios' claim.

1. Mr Stichter replied later that evening, recording his understanding of the history of the matter - including his recent instructions to settle and retain $300,000 in trust "because it is less risky or if the vendor will not do that, end the contract and recover the deposit". Mr Stichter advised that the safest course was to settle and argue damages later, but that they would probably need an extension of a day or so to do that. This is a central communication, both because it is the closest that there is to a contemporaneous record of the events on Mr Stichter's part, and because it lies at heart of the complaints against Mr Stichter:

Dear Dean,

1. You bought property X with a development consent.

2. Subsequently you found out that the plans submitted for the consent do not work and that the consent cannot be implemented as is.

3. The Council is not liable because they rely on the plans being accurate and they condition the consent as to further certifications being needed.

4. We then say to the Vendor "Give us compensation because the development consent you represented as valid and effective can't work".

5. They then say "No, you bought it with a clause that you have satisfied yourself" etc.

6. We reply "Your misrepresentation relative to the development consent was misleading and deceptive conduct under the Fair Trading Act, for which we can get compensation. That claim is not affected by the clauses in the contract because that Act says it can't be contracted out of".

7. They say "We don't recognise your claim as being valid".

8. They issue a Notice to Complete.

9. I ask you: do you want the property and get damages, or do you want out of the contract?

You reply you don't want to lose the property but it is not worth the price if the development consent does not work.

10. Because you want to keep the property, we institute proceedings for: a) Specific Performance - that they perform the contract with a proper development consent, and/or b) damages.

11. They say: we rely on our Notice to Complete and if you don't settle, we will terminate the contract, keep the deposit etc.

12. You then say: because it is less risky, I think I would rather settle and get them to keep $300,000 in trust or, if they won't agree to that, end the contract and get my deposit back.

13. They say no to both proposals.

14. The safest course for you now is to settle and argue the damages issue later.

That way the worst you stand to lose is a costs order, you stand to gain damages, interest and costs.

15. To settle, we would probably need an extension of time, a day or so.

16. Do they have a right to terminate?

We say no, they say yes.

The issue is not clear cut.

17. According to Mr. Warren (with whom I agree), if they purport to terminate, we say to them: "You had no right to terminate because of the invalid development consent. However, we are treating your purported termination as a repudiation of the contract, entitling us to get our deposit back".

18. We then amend our Court pleadings to obtain return of the deposit by reason of the repudiation instead of specific performance and damages.

19. The issue is: what do you want?

Keep property and claim damages?

End the contract and seek the deposit?

1. It is of note that, in this sole contemporary record of Mr Stichter, inability to raise finance was not mentioned by him as an issue.

1. Mr Lucantonio responded at 10.46 pm with a facsimile containing his analysis of the options:

Claim from us

Vendor cannot deliver goods purchased therefore there is no right on their part to terminate contract.

They say

Too bad. Time for settlement is up, settle or we'll terminate contract & keep deposit.

Options

(1) Wait for settlement time to expire. They will issue notice of termination, we obtain ex parte injunction that notice of termination is invalid & respond by terminating contract because they forfeited & haggle over deposit.

Risk: Lose altogether 220K + 45K costs

Best: Lose costs 45K gain 220K

(2) Terminate contract, because they cannot provide goods sold.

Risk: Lose altogether 220K + 45K costs

Best: Lose costs 45K gain 220K

*Option 1 & 2 same risk same gain therefore approach on best legal basis

But (3) If Darren Warren is sure that we can succeed in having their termination notice forfeited because it is they that cannot fulfil contract, why not

(A) Wait till they issue notice to terminate then obtain ex parte injunction to stop their termination & proceed with current claim against them.

Risk: Lose 220K + 45K costs

Best: We can get damages and proceed from there.

Otto from where I stand, if we have a chance to get our deposit back from options 1 or 2 because of their terminating of contract is not legal, then the chance is the same for establishing our claim that is already under way. Therefore the best option for me is (3) from a financial point of view.

If we can establish our grounds for the injunction for 1 & 2 (option) it is the same case for No 3.

My risk is less for option (3) and that is what I would like if there is nothing I have missed.

1. None of Mr Lucantonio's proffered options then included completing the purchase, or seeking an extension of a day or two to do so. Although Mr Lucantonio now says that that is because by 5 February 2002 there was (so far as he was aware) insufficient time to obtain finance, there is no reference to that being a relevant factor in his contemporary analysis of the options. [The evidence adduced on the re-opening of the case establishes that he had a finance approval, and that with notice to the bank, funds could have be arranged in a relatively short time - indeed shorter than he could reasonably have expected: but while funds could have been arranged by the Bank within hours, it would not have been known to Mr Lucantonio, nor Mr Stichter, that they could be arranged in less than a couple of days].

1. The vendor's solicitor attended at the time and place nominated for settlement in the notice to complete, together with a representative of the discharging mortgagee. He telephoned Mr Stichter from the settlement room, who said that he would not be attending the settlement, and his client would be relying on the Equity proceedings. On 7 February 2002, the vendor's solicitor gave notice of termination of the contract, for breach of an essential term, namely the purchasers' failure to complete the sale on or before 6 February 2002 in accordance with the notice to complete. The vendor's solicitor wrote again to Mr Stichter on 8 February 2002, notifying that the vendor intended to re-sell the property, and asserting an entitlement under clause 9 of the contract to retain the deposit and also to hold the Lucantonios liable for any deficiency on re-sale. Mr Stichter replied on the same day, denying the validity of the notice to complete and purported termination, disputing the vendor's entitlement to re-sell, and saying that the Lucantonios were lodging a caveat on the title. On 8 February, Mr Stichter, on behalf of the Lucantonios, lodged a caveat claiming an interest as purchasers under the contract.

1. On 10 April 2002, the vendor resold the property, again for $2,200,000, and on 16 April issued a lapsing notice in respect of the Lucantonios' caveat. The Lucantonios applied for an order extending its operation, which was refused by Austin J on 7 June 2002 [ Lucantonio v Ciofuli [2002] NSWSC 509]. Mr Warren appeared for the Lucantonios, instructed by Mr Stichter. His Honour concluded that, while accepting that there was an arguable case that the redevelopment could not be constructed in accordance with the development approval plans, there was no serious question to be tried that the Lucantonios were not obliged to complete on the completion date, essentially by reason of the operation of standard condition 7 of the contract, which precluded any claim for compensation, including a claim for specific performance with compensation, in the absence of the vendor having first been given the opportunity to rescind afforded by that clause. His Honour would also have declined to extend the caveat on balance of convenience considerations.

1. On 13 June 2002, Mr Warren advised (albeit without reasons) that he considered Austin J's judgment (so far as it considered standard condition 7) to be wrong, but that the Court of Appeal would not likely differ from his Honour's conclusion as to the balance of convenience. On 25 October 2002, the Equity proceedings were amended to add a claim for return of the deposit, and damages. Thereafter, they continued as a claim for damages for breach of contract and contravention of the Fair Trading Act , and (primarily) for return of the deposit pursuant to (NSW) Conveyancing Act 1919, s 55(2A). They were heard by Bryson J over three days from 17 to 19 September 2003, when judgment was reserved. Again, Mr Warren, instructed by Mr Stichter, appeared for the Lucantonios.

1. On 21 November 2003, his Honour gave judgment dismissing the proceedings, with costs, primarily on the basis that there was no misleading and deceptive conduct because 21 car spaces could be constructed substantially in accordance with the development approval plans, albeit with difficulty; and also that neither the development approval nor its efficacy comprised part of the subject matter of the contract [ Lucantonio v Ciofuli [2003] NSWSC 1058]. His Honour concluded (at [63]-[64], [74]) that there was no insuperable impediment to construction of the redevelopment substantially in accordance with the development approval plans, although it would be difficult and expensive and some minor modification of the development approval plans might be required; (at [75]) that the Lucantonios' contention that it would not be possible to carry out development in accordance with the conditions of the development approval did not raise any question about the title to the property: the land was not sold on terms which made the development approval or its effectiveness part of the thing sold, no warranty about it was given, and the references to it in the contract were made in provisions which shielded the vendor from responsibility; and (at [80]) that the Lucantonios had therefore not established that the vendor was in any way in breach of any contractual obligation, nor that they were entitled to any equitable relief, or relief under the Fair Trading Act : the advertisements were literally true, and while the reference to the development approval in the context of offering the property for sale carried some implication that the development was feasible, it was found to be feasible; thus there was no engagement in misleading or deceptive conduct, and in any event the Lucantonios acted on Mr Lucantonio's own inquiries and judgment, and not on the slight indications relating to the feasibility of development conveyed by references to the development approval in the advertising material. Finally (at [89]-[90]), discretionary considerations did not favour relief against forfeiture of the deposit under s 55(2A).

1. Mr Lucantonio now claims that, by relying on the advice of Mr Kleinert, Mr Stichter and Mr Warren, the trust lost the deposit and the possibility of substantial profits from the redevelopment, and incurred the costs of the abortive acquisition and of the unsuccessful litigation.

The claim against the architect

1. As against Mr Kleinert, Mr Lucantonio claims damages for professional negligence, and for misleading and deceptive conduct in contravention of Fair Trading Act , s 42.

1. The relevant advice and representations the subject of these complaints were contained in the telephone conversation of 21 November 2001 and the confirmatory letter of the same date. That advice was to the effect that there had been errors and omissions in the development approval drawings which would make it impossible to attain the requisite number of car spaces, and in particular that (a) an extra car space was required, to comply with Condition 37; (b) the overall internal width of the building was less than that shown on the car park plans forming part of the development approval, because the existing external walls were 500 mm thick while the development approval drawings showed less, and the plans did not show any zone for piling inside the external wall, which would be required to underpin the existing structure; (c) no disabled car parking space was provided; and (d) the development approval drawings did not show or allow for kerbs on the car park ramps, transitions at the top and bottom of the ramps within the car park, and columns between the car spaces. Mr Kleinert expressed the view that the layout changes required to accommodate these errors and omissions would necessitate another basement level of parking, with associated increased building costs, and a new development application or, at least, an s 96 amendment application.

1. As has been observed, at the request of Mr Lucantonio, Mr Kleinert obtained a second opinion, from Mr Ross Nettle, a consultant in transportation and traffic planning, which substantially confirmed Mr Kleinert's advice, including that the development approval plans did not truly depict the existing structural elements, that there were significant non-compliances relating to the parking spaces, and that it would not in reality be possible to achieve 21 parking spaces and satisfy Council's code and consent conditions. In particular, he identified as difficulties with the plans for the car park in the development approval that (a) columns intruded into the car parking bays; (b) parallel parking bays were only 2.1m, not 2.4m wide; (c) no kerbs were shown on the ramps; (d) vehicles using the loading dock could not turn around within the building; and (e) the clear internal width of the building was less than that shown on the drawings.

1. The practical impact of this advice was that it appeared to Mr Lucantonio that the development would have to be redesigned, including an extra (part) level of basement car parking to obtain 21 spaces, which would involve further excavation, and substantial cost; that this would also necessitate an application to Council at least to modify the development approval; and that the additional cost, especially when coupled with the need for a further application to Council, rendered the project uncommercial at the price which he had agreed to pay for the property.

1. The causative impact of Mr Kleinert's advice on the Lucantonios' subsequent action was the requirement for the additional basement level. Although Mr Kleinert's advice touched on a number of issues pertaining to car spaces, disabled spaces, ramp transitions and column clearances, the gravamen of it - and of its significance to the Lucantonios - was that the requisite number of car spaces could not be accommodated without an additional (part) basement level, which would involve additional excavation, a new development application, or at least a s 96 application, and substantial additional costs - which in Mr Lucantonio's view made the development uneconomical. Accordingly, even if Mr Kleinert's advice were misleading and/or negligent in other respects, it was only materially so if it affected the conclusion that an additional basement level, with its concomitant additional costs and delays, would be required.

1. The negligence alleged against Mr Kleinert is that he failed to: (1) check with precision the dimensions required for 21 car spaces; (2) discern and advise that an existing car space could be adapted for use as a disabled car space; (3) advise that there was an available structural shoring method that if used could accommodate the requisite car parking spaces within the dimensions of the site; (4) discern and advise that it was possible to have suitable clearances for support columns; (5) discern and advise that the road and ramp kerbs could be installed and that allowances could be made for the ramp transition; (6) check the figures and dimensions including that the building could not be constructed in accordance with the plans provided; (7) make proper enquiry as to acceptable and approved methods of shoring; and (8) disclose that the loading dock could be used as designed.

1. Mr Kleinert's opinion involved an interpretation of development approval condition 37 as requiring that each car space be a minimum of 2.5m x 5.5m. The expert architects who gave evidence - Mr Poiner, Mr Byrnes and Dr Cooke - unanimously agreed that this was a reasonable view on the part of an architect in his position. The architectural experts unanimously agreed that it was reasonable for an architect in Mr Kleinert's position to give the advice he gave as to the absence of a disabled car space. All three experts also agreed that it was reasonable for an architect in his position to interpret the development approval conditions as requiring a disabled parking space in addition to the 21 allocated spaces referred to in condition 37 - although Dr Cooke (for Mr Lucantonio) originally did not, and proposed as an available alternative that the disabled space could double as one of the 21 allocated spaces on a "pro tem" basis, he accepted in cross-examination that Mr Kleinert's opinion was "a reasonable interpretation". The expert architects unanimously agreed that it was not possible to construct the car parking in accordance with development approval drawings while complying with the development approval conditions, and that it was therefore reasonable for Mr Kleinert to give advice to that effect, and that it was not possible to satisfy the terms of the development approval without further amendment. Thus, far from it being established that Mr Kleinert's views in these respects were not open to a reasonably prudent architect in his circumstances, the evidence shows that they were.

1. Mr Kleinert's conclusion that the development approval plans allowed insufficient space to fit the requisite number of car parking spaces involved a number of assumptions as to allowances and tolerances in respect of underpinning piling and shoring in the basement area, upon which he had sought and obtained advice from a structural engineer Mr Simpson, the correctness of which advice he assumed. There was evidence to the effect that these allowances could be reduced in various ways, the result of which would be to gain more space in the basement levels, so as to better to accommodate the requisite number of car parking spaces. The plaintiff contended that Mr Kleinert was wrong to rely conclusively on Mr Simpson's advice, as his views were preliminary only, in the absence of geotechnical data and more detailed knowledge of the footings, which did not become available until after January 2002 - and which demonstrated, in particular, that the initial assumption that the footings were 500cm in width was incorrect, to the extent that they were generally 350 (or 360 to 380) cm (except for the piers, which were indeed 500cm). On the basis that geotechnical information was not yet available, it is said that Mr Kleinert's opinion should at least have been qualified. However, the expert architects unanimously agreed that it was reasonable for an architect in Mr Kleinert's position to obtain and rely on advice from a qualified engineer retained for the project as to the allowances that should be made for underpinning in the basement area. Moreover, Mr Lucantonio had said that he wanted a construction certificate before Christmas, which meant that Mr Kleinert did not have the luxury of awaiting further information not yet available. Nor did the contractual completion date of 16 January allow the luxury of time for further information. In any event, while reduction in the assumed width of the footings would have meant that some more space would be available in the basement area than Mr Kleinert had assumed, it still allowed insufficient space to accommodate the requisite number of compliant spaces without an additional level, unless the appropriate allowance for piling and shoring could be further reduced.

1. In the preparation for and hearing before Bryson J, and subsequently before me, technical engineering evidence addressed the feasibility of constructing the development in accordance with the development approval plans, including through further reduction of the necessary allowances for piling and shoring, so as to gain more space in the basement levels. While the evidence before me was not identical to that before his Honour, its general effect was the same, and his Honour's lucid analysis [ Lucantonio v Ciofuli NSWSC [1058], [41]-[74]], which I gratefully adopt in respect of substantially the same evidence before me, relieves me of any necessity to undertake my own, in circumstances where the issue before me is less technical: whereas his Honour was concerned with whether, as a matter of fact, the development approval plans were "buildable", I am concerned only with whether it was negligent for an architect to opine that they were not.

1. Relevantly - as appears both from Bryson J's analysis, and from the evidence before me - although various iterations of the ongoing planning process, in the context of the litigation between purchasers and vendor, progressively produced results which potentially reduced the scale of the problem, such that the extent by which it was not possible to fit 21 car parking spaces in a compliant construction in accordance with the development approval plans was diminished, the problem was not shown to be surmountable in a manner which would avoid the necessity for a further basement level until the emergence, in the course of Mr Bonser's oral evidence before Bryson J, of the idea of driving the piles on an inclination of 2 degrees, so as to win more space in the basement levels.

1. Bryson J concluded (at [62]-[63]), and on the evidence before me I respectfully agree, that adopting the design ultimately proposed by Mr Bonser, a compliant construction without resort to an additional basement level was achievable, albeit only by retaining a highly skilled contractor with specialised machinery, maintaining an unusually high standard of work, and accepting a completed surface without shotcrete finish which would not be aesthetically pleasing. In his Honour's words, "Obviously working to these standards will involve unusual pains and trouble, and high expense, but I do not think that the purchasers are in a position to claim that it is not feasible to carry out the work because it would involve unusual pains and trouble and high expense. Their complaint is only good if the development simply cannot be carried out, not if it can be carried out but at unusual expense and difficulty". [His Honour's conclusion is reinforced by the circumstance that, by 2006, the property had been redeveloped, and the basement parking was substantially in accordance with the development approval plans, but to achieve this not only had seven parking spaces been rotated 90 degrees; their dimensions had been reduced (to a width of 2.1, as distinct from 2.5, metres)].

1. Integral to his Honour's conclusion, and to the feasibility of construction in accordance with the development approval plans, was adoption of Mr Bonser's method of shoring, involving the concept of inclining the piles at an angle of 2 degrees; without that innovation, even if it be accepted that each other disputed assumption or opinion of Mr Kleinert were erroneous, so that the shortage of space in the basement was not so great as he had assumed, nonetheless it remained impossible to comply with the car space and other requirements without an additional basement level. So much was ultimately accepted by Mr Laughton SC, for Mr Lucantonio [T575.50-576.14].

1. It follows that causative negligence on the part of Mr Kleinert can be established, only if he ought to have appreciated that some such solution as Mr Bonser's 2 degree inclination could be employed, so as to gain extra space in the proposed basement and render an additional level unnecessary. It matters not whether he should have recognised other possibilities which, while reducing the extent of the non-compliance, would not have averted the need for an additional basement level, because the gravamen of his advice would not have been affected. Put another way, if Mr Kleinert's advice (to the effect that an additional basement level would be required) remained justifiable for one reason, it matters not that numerous other reasons that originally supported or contributed to it might be removed.

1. If the solution of driving piles on a 2 degree inclination from the vertical were a conventional one for such problems, and generally known to architects, then it may well have been negligent for Mr Kleinert to fail to discern and consider it. However, I could not find it was so in the absence of evidence to that effect, and there is none. The second opinion, obtained at Mr Lucantonio's request from Mr Nettle, confirmed Mr Kleinert's views; there was unanimous agreement from the experts that Mr Kleinert was entitled to rely on the advice of the structural engineer Mr Simpson; Mr Simpson did not advert to any such solution as was ultimately proposed by Mr Bonser; Mr Bonser's first report (provided to the vendor on 15 May 2002) proposed no such solution; even after the viability of his then plans were questioned by Mr Simpson's report, for the Lucantonios, in the course of preparation for the hearing before Bryson J, he produced a second report of 26 August 2003 which did not contain the 2 degree inclination solution; and that concept emerged only when he came to give oral evidence in the proceedings before Bryson J, by reference to a design sheet dated 17 September 2003. In other words, the solution emerged only after the development of a number of plans, the pointing out of problems in them, and their progressive adaptation - in what appears to be an innovative way - to overcome those problems, in the crucible of hotly contested litigation, over a period of more than 18 months. Even so, it was a solution achievable only with "unusual pains and trouble, and high expense". That none of the various consultants adverted to it earlier in this context bespeaks a conclusion that it was not one that a reasonably competent and prudent architect in Mr Kleinert's position should have discerned in late 2001. True it is that in his supplementary reports, Dr Cooke (alone of the experts) opined that Mr Kleinert should have considered the parking configuration ultimately adopted for the building now erected on the property, but that configuration did not of itself resolve the issue without other innovations - including, in particular, gaining adequate basement space from the revised shoring system. I conclude that it has not been shown that Mr Kleinert departed in any material way from the standards of practice of reasonably competent and prudent architects in the circumstances.

1. As to the Fair Trading Act claim, the alleged misrepresentations contained in Mr Kleinert's advice were: (1) that the building could not be constructed in accordance with the development approval; (2) that the Council would not issue a construction certificate; (3) that there had been no allowance for disabled car spaces required by the development approval and that such spaces could not be accommodated within the plan; (4) that to comply with the requirements of the development approval it would be necessary to excavate a further half level; (5) that a further application would have to be made to the Council for a new development approval, or at least a s 96 amendment application; and (6) that the loading dock shown on the development approval plans could not be used as designed, because vehicles could not reverse out of it.

1. Bryson J's analysis of the engineering evidence - which I respectfully adopt - demonstrates that Mr Kleinert's opinion was incorrect, in that compliant construction in accordance with the development approval plans was not impossible, and therefore an additional basement level and the associated expense and difficulties was not unavoidable: albeit only with unusual pains and trouble, and high expense, and adopting Mr Bonser's innovative inclined piling. However, Mr Kleinert's opinion was just that - a professional opinion, plainly recognisable as such. A statement of an opinion ordinarily conveys that the maker held the opinion when the statement was made, and that there was a basis for it [ James v ANZ Banking Group Ltd (1986) 64 ALR 347]. An expression of opinion identifiable as such conveys no more than that the opinion is held, and perhaps that there is a basis for it; if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing [ Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82].

1. It was not suggested that Mr Kleinert did not hold the opinions contained in his advice of 21 November. And far from it being established that there was no basis for such opinions, the expert evidence demonstrates that they were opinions which in the circumstances could reasonably be held by an architect in his position, having regard to the development approval plans, the development approval conditions, and other applicable regulatory instruments such as RTA guidelines and BCA provisions. In particular, the three expert architects unanimously agreed that it was not possible to construct the car parking in accordance with the development approval drawings while complying with the development approval conditions; that it was reasonable for an architect in Mr Kleinert's position to interpret development approval condition 37 as requiring that each car space be a minimum of 2.5m x 5.5m; that it was reasonable for an architect in his position to interpret the development approval conditions as requiring a disabled parking space in addition to the 21 allocated spaces referred to in condition 37 and to give the advice he gave concerning the absence of a disabled car space; and that it was not possible to satisfy the terms of the development approval without further amendment.

1. Accordingly, I do not accept that Mr Kleinert's advice was misleading in the relevant sense. In particular, as to the critical matter, while his opinion that compliant construction in accordance with the development approval plans was impossible was ultimately proved to be incorrect, it was an opinion, recognisable as such, which he genuinely held, and which was not without grounds: as is clear from Bryson J's conclusion referred to above, it was incorrect only because an alternative solution which itself would involve "unusual pains and trouble, and high expense" was ultimately discovered; and as appears from my above conclusions, it was not unreasonable for Mr Kleinert, in the circumstances with which he was confronted, to fail to discern that solution.

1. Conclusion . It follows that neither negligence, nor misleading and deceptive conduct in trade or commerce, is established against Mr Kleinert, so the claims against him fail. Had either succeeded, however, I would not have hesitated to conclude that Mr Kleinert's advice was a contributing cause to the Lucantonios' decisions to institute the Equity proceedings and not to complete the purchase, so as to make him causally responsible for losses flowing from those decisions: while there were also other causes, his advice was a fundamental integer in each.

The claim against the barrister

1. Because it involves many issues that are common to the claim against the solicitor, it is convenient next to address the claim in respect of the barrister, Mr Warren, against whom Mr Lucantonio claims damages for professional negligence. The particularised allegations are that he: (1) failed to advise that the Lucantonios did not have the right to terminate the contract on the basis that the development approval was ineffective; (2) advised the Lucantonios to commence proceedings against the vendor for specific performance and other remedies; (3) advised the Lucantonios to continue the Equity proceedings after Austin J's judgment, in which his Honour held that there was no serious question to be tried upon the contention that the contract was not validly terminated by the vendor and therefore declined to extend the caveat; (4) failed to advise the Lucantonios to seek an urgent interlocutory injunction to restrain the vendor from selling the property; and (5) failed to give advice, in sufficient time to enable the Lucantonios to do so, to settle the purchase and then sue for damages.

1. Advising commencement of the Equity proceedings . The fundamental complaint against Mr Warren, which is relevant also to the claim against Mr Stichter, is that he advised the institution of the Equity proceedings. Mr Lucantonio's complaint is that Mr Warren advised a course of action of seeking specific performance with compensation or, in the alternative, damages. As previously summarised, the relevant advice given by Mr Warren prior to the institution of proceedings was to the effect that specific performance with compensation may be an available remedy, and also that damages could be sought for misleading and deceptive conduct. I accept that he advised, at least implicitly, that it would be appropriate to institute such proceedings. Later, on 5 February, he gave advice to the effect that, in his opinion the Lucantonios' prospects of success were good, although adding that he could give no assurances because of the vagaries of litigation.

1. Some points are worthy of note at the outset: first , that Mr Lucantonio's preferred outcome was to proceed with the purchase at a reduced price (he wanted to retain the land but was unwilling to pay the full purchase price given the problems with the development approval); secondly , that Mr Warren's advice prior to institution of proceedings did not extend beyond that it would be appropriate to institute the proceedings, and that specific performance with compensation may be an available remedy; thirdly , that such a remedy if obtained would produce just the result that the Lucantonios desired; fourthly , that institution of the proceedings was not of itself a high-risk strategy, since it was not incompatible with completion and was not repudiatory; fifthly , that the claim for specific performance with compensation was only a part of the claim, and was coupled with one for damages under the Fair Trading Act ; and sixthly , that specific performance with compensation was a possible remedy in the circumstances - at least, subject to the particular terms of the contract [as agreed by the expert conveyancing solicitors who gave evidence - Mr Moses and Mr Tzannes - and consistent with Dainford Ltd v Lam (1985) 3 NSWLR 255, 266E].

1. At the heart of Mr Lucantonio's complaint is the proposition that the Equity proceedings could not succeed, and that a competent and prudent barrister should have known that, and advised against their institution. This involves that a reasonably prudent and competent barrister must have appreciated that standard condition 7, special condition 31 and/or special condition 40 had the effect of barring any claim for specific performance with compensation.

1. Austin J's decision that the claim was not maintainable was founded on standard condition 7. As Mr Ashhurst SC, on behalf of Mr Warren, argued, standard condition 7 did not expressly preclude the equitable remedy of a claim for specific performance with compensation. In Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426, Fitzgerald J (at 446-7) said:

Equity influenced the effect of such [limitation] clauses, not by altering their construction (although that is how it would often appear from the language of some of the decisions) but by its control, despite what they provide, of the grant or refusal of equitable relief...

Further, if a purchaser sought specific performance despite the existence of a clause expressed to exclude a right of compensation, he was not entitled to performance with compensation... although a compensation clause did not derogate from the purchaser's equitable right to specific performance with compensation for deficiencies in the property not falling within the strict terms of the clause: Beard v Drummoyne Municipal Council supra.

1. Mr Ashhurst argued that Austin J did not find that the defects complained of by the purchaser fell within the strict terms of standard condition 7: his Honour's reasoning was that any "claim", including a claim for specific performance with compensation, must fall within the condition, but that overlooked the distinction between the rights of a party to contractual compensation and the equitable rights of the same party to insist on transfer of the subject matter of the contract.

1. It is more than arguable that a claim that the vendor specifically perform the contract is not a claim for compensation under the contract, but one that the vendor transfer what it promised to transfer [ Dainford v Lam , 265A-B; Tiplady v Gold Coast Carlton Pty Ltd , 446-7]. Standard condition 7 does not expressly state that it extends to equitable claims for specific performance. Its terms are not capable of application to a claim for specific performance simpliciter, as there would be no "amount claimed". It would at least arguably not apply to a claim for specific performance that included an alternative claim for damages in lieu of specific performance. In my view, it is at least arguable that standard condition 7 is concerned with and limited to claims for contractual compensation of the type described in it. Bryson J did not rely on standard condition 7. I do not accept that any reasonably competent and prudent barrister would have apprehended that it rendered a claim for specific performance, with or without compensation, manifestly untenable.

1. As to special condition 31, Mr Ashhurst argued that it was not a clause that expressly precluded any implied terms from arising in the contract - let alone any implied term as to the efficacy of the development approval, as it referred only to the "property", which would have to be construed as being limited to the existing property - but no more than an "anti-reliance" provision by which the purchaser acknowledged that it did not rely upon any implied warranty or representation, with limited evidentiary relevance to a Fair Trading Act claim, but not otherwise. I accept that such provisions are to be construed strictly; and the circumstance that special condition 31 refers to (extra-contractual) representations, as well as to warranties, assists Mr Ashhurst's argument; I agree that it is at least arguable that special condition 31 does not exclude implied terms, but operates only as an evidentiary anti-reliance provision.

1. Mr Ashhurst next submitted that the handwritten portion of special condition 40 made clear that the development approval was part of the subject matter of the contract, for which reference was made to Dainford v Lam , 263G-264D and Batey v Gifford (1997) 42 NSWLR 710, 715E-F. I do not accept this argument: while the clause required delivery of the development approval plans and assignment of copyright in them, it did not make a "buildable development approval" part of the subject matter; all it required was the assignment of property in the plans, for whatever they were. It was further submitted that the typewritten portion of special condition 40 should be strictly construed, such that it prohibited only the raising of any objection or claim for compensation "because of" the [existence] of the development approval; and that as the problems with the car parking spaces did not constitute a complaint about the existence of the development approval, but one about its viability, it was not caught. But while I accept that such clauses are to be strictly construed, they must also be given sensible meaning. It is impossible to conceive a complaint about the existence of the development approval; its existence was intended and desired by both parties. The clause must have been directed at potential complaints about its adequacy or efficacy. In my view, consistent with Bryson J's ultimate conclusion, special condition 40 caught the Lucantonios' claim.

1. Mr Laughton SC, for Mr Lucantonio, goes further, contending that they should never have been given the choice, but should have been told that they needed to complete the purchase and, if they incurred a loss, subsequently claim damages under the Fair Trading Act . However, that contention overlooks that it is for clients, not lawyers, to make commercial decisions; that Mr Lucantonio was not an unsophisticated client; that he had a strong preference to acquire the property, but only on a basis that made allowance for the problems with the development approval; that equity provided a remedy which could possibly deliver the precise outcome he preferred; and that even if the prospects of success for that remedy were slight, there was, on the evidence then available, a well arguable claim under the Fair Trading Act . It also overlooks the risk, pointed out by Mr Warren, that if left to a remedy in damages after completing the purchase, there was no assurance that the vendor would retain funds sufficient to meet the claim; and the risk, apparent to the Lucantonios, that they might end up with a property worth less than the price.

1. Properly advised, what would the Lucantonios have done?

1. If they were to complete the purchase, they would have to borrow and pay over the balance purchase moneys (which exceeded what Mr Lucantonio now thought the property was worth), incur interest on those funds, pursue a s 96 amendment application (if not a new development application), and incur substantial additional construction costs, as well as holding costs in the meantime. As a result of his past experiences, Mr Lucantonio was strongly disinclined to acquiring properties without development approval, because of the associated risks and delays, and averse to being the named applicant in any application to the Council, believing that any application to Council from him would not be well received. Nor did he want to be in the position of having purchased a building that would then require substantial additional unanticipated expenditure to rectify the problems that had arisen with the development approval plans - so substantial as to make the project "uneconomical". Nor did he wish to hold the property for 6 months while the Council considered any s 96 amendment application, let alone a new development application.

1. On the other hand, if they did not complete and the vendor purported to terminate, there were - assuming the correctness of Mr Kleinert's advice - apparently at least reasonable prospects of recovering the deposit pursuant to s 55(2A) (an outcome which the Lucantonios had been prepared to accept on 4 February 2002), and/or damages for contravention of the Fair Trading Act .

1. While, from a legal perspective, it may have been safest to complete, in that the alternative of not completing risked that the vendor might terminate and forfeit the deposit, leaving any chance of a successful outcome to the vagaries of litigation, the risk in completing was commercial - that (by reason of the problems with the development approval) the purchaser might acquire a property worth significantly less than he had assumed and was prepared to pay (and in addition that the vendor might dissipate the proceeds so as not to be able to satisfy a judgment). In the simplest terms, it was the difference between whether, in the interim, he had to part with the balance purchase price of $2 million, in circumstances where he did not believe that the property was worth it, and whether the vendor would have the benefit of that sum. It is noteworthy that the additional construction costs and the diminution in value of the property in contemplation as a consequence of the problems with the development approval equalled or exceeded the amount of the deposit at risk - the early estimates of $200,000 in additional building costs were followed by later estimates of $500,000; the amount of provision for compensation proposed (in the 4 February negotiations) to be retained in trust from the purchase price was $300,000; Mr Warren's 5 February file note contemplates that the property might now be worth only $1.5 million ($700,000 less than the price). On the other hand, in the event of not completing, the risk of losing the deposit was mitigated by the availability of remedies under the Fair Trading Act and s 55(2A). If the property were worth less than about $2,000,000, then commercially the Lucantonios would seem to have been better off to forfeit the deposit than to pay over the balance purchase price to complete.

1. Underlying the message in Mr Lucantonio's 6.05 pm 5 February facsimile to Mr Stichter is a disinclination to complete by paying over the full balance purchase price: Mr Lucantonio's desire to acquire the property was not so great as to justify, in his mind, parting with the whole of the balance purchase price. The statements attributed to him in paragraphs 9 and 12 of Mr Stichter's 5 February facsimile evince the same intention: that in paragraph 9 shows that while he would like to keep the property, it was no longer worth the price; and in paragraph 12 - to the effect that "because it was less risky" he would prefer to settle with $300,000 retained in trust - indicates an appreciation that completing the purchase was the safer course, so long as some provision could be made to secure his prospective claim in respect of additional cost/diminished value; the alternative of rescinding and recovering the deposit indicates an appreciation that there were commercial risks associated with paying over the whole price in the circumstances. Even when admittedly told, on 5 February 2002, that the safest option was to "settle and argue the damages issue later", Mr Lucantonio does not appear to have given that course serious consideration. Although it might be said that there was (in his mind) insufficient time to pursue it, as (so far as he reasonably knew) funds could not be arranged with the Bank in the few hours remaining until 2.00 pm on 6 February, it is particularly striking that he did not adopt Mr Stichter's suggestion that a short extension of a day or two could be sought to permit them to complete - a course which one would have expected him to explore if he were at all inclined to the "safest" course. Given his position that he always believed that he would be able to reach a settlement with the vendor - even until 7 June 2002 - the contention that a favourable answer could not realistically be anticipated, as the vendor had already rejected a proposal to defer settlement for a week, and allow $300,000 of the purchase money to be retained in Mr Stichter's trust account until the issues were resolved, does not carry persuasion. Even though settlement with a subsequent claim for damages was an option of which he was fully aware - he had asked Mr Warren about it earlier on 5 February, as well as its being mentioned as the "safest" course by Mr Stichter - his review of the options did not include it at all.

1. In my view, the reason why Mr Lucantonio did not pursue that option was that his perspective was not only legal but also commercial. Although he was keen to acquire the property, in the light of the difficulties with the development approval he was not prepared to complete without a reduction in the purchase price, or at least retention of sufficient of the purchase money to cover his claim, because otherwise the problems with the development approval would have a serious impact on the economic viability of the acquisition, and he believed the property was no longer worth the price. He knew that completion was an option, but appreciated that it might involve paying much more than $200,000 in excess of the property's worth; he also knew that failure to complete might result in the vendor terminating, and forfeiting the deposit of $220,000. He was significantly influenced by what he perceived to be the substantial commercial risk associated with purchasing other than at a discounted price, in circumstances where he believed that the property was now worth significantly less than he had contracted to pay for it. Moreover, he believed that he would be able to settle his differences with the vendor - a view to which he adhered even up until 7 June 2002.

1. In my view, properly advised, the Lucantonios would nonetheless not have completed the purchase by the payment of the undiscounted purchase price, but would have assumed the risks of not completing, and embarked on the consequential litigation, on the basis that this was the more commercial approach, and in the belief that they would in due course reach a compromise with the vendor - notwithstanding that completion of the purchase may have involved less legal risk.

1. Accordingly, breach of duty on the part of Mr Stichter is established in respect of this particular, but causation is not.

1. Conclusion . Mr Stichter failed to give timely advice to the Lucantonios as to the courses open to them in the light of the notice to complete, and their respective advantages, disadvantages and risks. But properly advised, the Lucantonios would still not have completed the purchase by the payment of the undiscounted purchase price, and would have assumed the risks of not completing, and embarked on the consequential litigation. The other particulars of negligence alleged against Mr Stichter are not established.

Damages

1. The assessment of damages does not therefore arise, and in any event it was agreed at the trial that, due to issues pertaining to the availability of certain expert witnesses, the quantification of damages would be determined subsequently if necessary, although the principles were argued at the trial.

1. In the circumstances, it suffices to record at this stage that if Mr Lucantonio had succeeded against Mr Warren and/or Mr Stichter on the complaints concerning advice in respect of the notice to complete, and it were concluded that properly advised they would have completed the purchase and pursued proceedings under the Fair Trading Act against the vendor, then their damages would comprise (1) the forfeited deposit, and (2) the costs incurred in and occasioned by the proceedings before Austin J (but not the general costs of the Equity proceedings including the hearing before Bryson J, which would have been incurred in any event, in pursuit of the Fair Trading Act claim).

1. Had Mr Lucantonio succeeded against Mr Kleinert, their damages would also have included the general costs of the Equity proceedings, including the hearing before Bryson J, which would not have been commenced or continued but for his advice.

1. Although, in principle, the loss of the purchase bargain, represented by any excess of true market value over purchase price would be an element of Mr Lucantonio's damages, the evidence of resale at the same price suggests that there was no differential. I do not accept that such damages would include, as an additional component, the lost opportunity of making profits from the development of the property: the profit potential of the property is an element to be taken into account in fixing its market value [ Jenmain Builders Ltd v Steed & Steed [2000] Lloyd's Rep PN 549 (CA), [32]-[35] (Chadwick LJ, Beldam LJ agreeing].

Conclusion

1. My conclusions may be summarised as follows.

1. Causative negligence on the part of Mr Kleinert can be established, only if he ought to have appreciated that some such solution as Mr Bonser's 2 degrees inclination of the piling could be employed, to gain extra space in the proposed basement and render an additional basement level unnecessary. That none of the various consultants adverted to such a solution earlier than the hearing before Bryson J in September 2003 bespeaks a conclusion that it was not one that a reasonably competent and prudent architect in Mr Kleinert's position should have discerned in late 2001. It has not been established that Mr Kleinert departed in any material way from the standards of practice of reasonably competent and prudent architects in the circumstances.

1. Nor do I accept that Mr Kleinert's advice was misleading in the relevant sense. In particular, his opinion that compliant construction in accordance with the development approval plans was impossible, while ultimately proved to be incorrect, was an opinion, recognisable as such, which he genuinely held, and which was not without grounds: it was incorrect only because an alternative solution which itself would involve "unusual pains and trouble, and high expense" was ultimately discovered; and it was not unreasonable for Mr Kleinert, in the circumstances with which he was confronted, to fail to discern that solution.

1. Accordingly, Mr Lucantonio fails on liability against Mr Kleinert, although had he succeeded on breach of duty, causation would have been established.

1. Although, in my view, the proposition that a "buildable development approval" was part of the subject matter of the contract was very weak, and thus the claim for specific performance with compensation very frail, Austin J allowed that the alternative "strict" construction advanced by Mr Warren was arguable, and where judicial opinions differ, it would be holding counsel to too exacting a standard to impose, as the arbiter of professional standards, one judge's contrary opinion. Moreover, the institution of the Equity proceedings must be viewed in the context that they included a manifestly arguable claim under the Fair Trading Act ; that specific performance with compensation was a remedy which, if gained, provided the Lucantonios with precisely the result they preferred; that two experienced conveyancing solicitors considered that it was a potential remedy in the circumstances; and that Mr Warren's advice was then in effect no more than that it would be appropriate to institute the proceedings and that specific performance with compensation may be an available remedy. In that context, I do not accept that no reasonably competent and prudent barrister would have advised, to the extent that Mr Warren did so, the institution of the proceedings. Mr Warren's later advice on 5 February 2002 that he thought Mr Lucantonio's prospects were good, was qualified with the caveat that he could give no assurances because there were too many vagaries, and is not itself the subject of a particularised allegation of negligence. In the context of the viable Fair Trading Act claim, and the potential amendment adding the s 55(2A) claim - the frailty of the contractual claim did not deprive the Equity proceedings as a whole of reasonable prospects of success.

1. As Mr Warren did not advise that the Lucantonios could terminate the contract, and as the Lucantonios did not purport to terminate the contract, the complaint that he failed to give advice that the Lucantonios were not entitled to terminate the contract on the basis of the problems with the development approval, goes nowhere.

1. As the caveat lodged by Mr Stichter on behalf of the Lucantonios protected their position and had the same effect, pending the interlocutory hearing, as any injunction, and an application for an injunction would have suffered the same fate as the caveat met at the interlocutory hearing before Austin J, it was not incumbent on Mr Warren to advise an application for an injunction to restrain the vendor from reselling the property.

1. As, when Mr Warren was informed (only a couple of days before it was due to expire) of the pendency of the notice to complete, he was also instructed that Mr Lucantonio's finance had lapsed, and that there would be difficulties with alternative finance because of the problems with the development approval, and Mr Stichter did not raise with Mr Warren, as one of the potential courses of action, completion of the purchase, he was not obliged to advise that the Lucantonios should complete the purchase.

1. Given that there remained, at least until Mr Bonser's inclined piling proposal emerged, an arguable case for substantial damages under the Fair Trading Act , and an arguable case for return of the deposit under Conveyancing Act s 55(2A), I do not accept that a reasonably competent and prudent barrister must have advised discontinuance of the proceedings (with the concomitant costs consequences) after Austin J's judgment; and in that context, such a barrister could well also have persisted in the contractual case, which did not significantly expand the scope of the continuing proceedings beyond that which they would have had if confined to the Fair Trading Act and s 55(2A) claims, as an additional if weak string to the bow.

1. It follows that I am not satisfied that Mr Warren departed in any material respect alleged from the standard expected of a barrister of reasonable competence and prudence, which relieves me of the need to resolve the question of advocate's immunity. For reasons given in connection with the claims against Mr Stichter, Mr Lucantonio would in any event have failed to establish causation against Mr Warren.

1. As the Lucantonios were not advised that they could rescind the contract, and did not purport to do so, the complaint that Mr Stichter failed to advise them that that they were not entitled to rescind the contract on the basis of the problems with the development approval, goes nowhere.

1. Even if Mr Warren were negligently wrong in the advice he gave that led to the institution of the Equity proceedings - in particular that it was appropriate to institute the proceedings, and that specific performance with compensation may be an available remedy, as well as damages for misleading and deceptive conduct - there was nothing to alert Mr Stichter to that, and Mr Stichter was entitled to rely on his advice. Further, instituting the Equity proceedings was of itself a relatively low risk course, and even if the prospects of success on the claim for specific performance with compensation were but slight, if successful it would have produced exactly the result that Mr Lucantonio desired; the claim under the Fair Trading Act had apparently good prospects, if Mr Kleinert were correct (which there was then no reason to doubt); and if the contract were in due course terminated, the proceedings could be amended, as they were, to claim return of the deposit. Mr Stichter is not guilty of negligence in respect of advice given in connection with the institution of the Equity proceedings.

1. As to the complaint that Mr Stichter was negligent in advising the Lucantonios to continue the Equity proceedings after the decision of Austin J, there remained, at least until Mr Bonser's critical evidence emerged, an arguable case for substantial damages under the Fair Trading Act , and for return of the deposit under Conveyancing Act s 55(2A); in that context, it was not unreasonable to persist with the contractual case, however frail, as it did not significantly expand the scope of the continuing proceedings beyond that which they would have had if confined to the Fair Trading Act and s 55(2A) claims, and there was some basis for doubting Austin J's conclusion on standard condition 7, while his Honour's observations about special condition 40 gave some cause for optimism. Moreover, Mr Warren had advised that Austin J had erred in respect of standard condition 7, on which Mr Stichter was entitled to rely. Further, advice that the contractual claim had very poor prospects would have had no practical impact on the course that was followed: the Lucantonios would have continued the proceedings substantially as they did, in order to obtain a refund of their deposit, and/or damages under the Fair Trading Act , while retaining the contractual argument as an additional, if weak, string to their bow. Accordingly, neither breach of duty nor causation is established in this respect.

1. Upon receipt of notice to complete, a reasonably competent and prudent solicitor in Mr Stichter's position was obliged to discuss with the client the possible courses of action, and their respective advantages and disadvantages, and the risks and opportunities associated with each, so as to enable the client to make an informed determination on a strategy, in sufficient time for it to be adopted. In substance the complaint as to the timeliness of Mr Stichter's advice in this respect is established, in that he failed to give timely advice to Mr Lucantonio of the courses open to him in the light of the notice to complete, and their respective advantages, disadvantages and risks. The advice that completing the purchase was the safest option came manifestly too late to be acted upon.

1. Properly advised, the Lucantonios would have been informed, in ample time to make and implement their decision, that they could either: (1) complete the purchase for the full price, with the problems associated with the development approval, and pursue proceedings for damages for misleading and deceptive conduct after completion; or (2) refuse to complete and, in the likely event of termination by the vendor and forfeiture of the deposit, bring proceedings for recovery of the deposit under s 55(2A) and for damages for misleading and deceptive conduct; of these, the first involved the least legal risk, as they would be performing their legal obligations under the contract, but they might end up with a property worth less than the price; whereas the second risked loss of the deposit and potential exposure to damages if their position proved to be incorrect.

1. However, so advised, the Lucantonios would nonetheless not have completed the purchase by the payment of the undiscounted purchase price, but would still have assumed the risks of not completing, and embarked on the consequential litigation, on the basis that this was the more commercial approach, and in the belief that they would in due course reach a compromise with the vendor - notwithstanding that completion of the purchase may have involved less legal risk.

1. Accordingly, in respect of the complaint pertaining to Mr Stichter's advice in respect of the notice to complete, breach of duty is established, but causation is not.

1. It follows that Mr Lucantonio fails on liability against each defendant.

1. On the plaintiff's claims, I give judgment for the defendants, with costs. The cross-claims for contribution therefore do not arise. I order that the first, second and third cross-claims be dismissed with costs, such costs to form part of the costs recoverable by the relevant defendant/cross-claimant from the plaintiff.

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Decision last updated: 20 July 2011