Mal Owen Consulting Pty Ltd v Ashcroft

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Court of Appeal


Supreme Court


New South Wales

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Medium Neutral Citation: Mal Owen Consulting Pty Ltd v Ashcroft [2018] NSWCA 135
Hearing dates: 23 April 2018
Decision date: 20 June 2018
Before: Basten JA at [1];
Macfarlan JA at [47];
Barrett AJA at [90]
Decision:

(1)   Allow the appeal and set aside the orders made in the District Court on 29 June 2017.

 

(2)   Order that the respondent pay the appellant an amount of $100,000.

 (3)   Order that the respondent pay the appellant’s costs of the proceedings in the District Court and of the appeal.
Catchwords:

CONTRACT – breach - solicitor’s retainer – failure to pursue proceedings against third party – loss of commercial opportunity of recovery – proceedings later successful – no recovery due to third party’s bankruptcy – whether solicitor’s breach caused loss of valuable opportunity – whether plaintiff entitled to damages – assessing damages for loss of valuable opportunity

 

CONTRACTS – breach of contract – whether elements of cause of action for breach of contract modified by Civil Liability Act 2002 (NSW) s 5D, s 5E

WORDS AND PHRASES – “harm” – Civil Liability Act 2002 (NSW), s 5
Legislation Cited: Bankruptcy Act 1966 (Cth), ss 81, 255
Civil Liability Act 2002 (NSW), ss 3A, 5, 5A, 5D, 5E; Pt 1A, Pt 2
Trade Practices Act 1974 (Cth), s 82
Cases Cited: Allied Maples Group Ltd v Simmons & Simmons (a firm) [1995] 1 WLR 1602
Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1
Badenach v Calvert (2016) 257 CLR 440; [2016] HCA 18
Chaplin v Hicks [1911] 2 KB 786
Colonial Mutual Life Assurance Society Ltd v Donnelly (1998) 82 FCR 418; [1998] FCA 364
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Gett v Tabet [2009] NSWCA 76; 254 ALR 504
Johnson v Perez (1988) 166 CLR 351; [1988] HCA 64
Kitchen v Royal Air Force Association [1958] 1 WLR 563
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11
La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd (2011) 190 FCR 299; [2011] FCAFC 4
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1998] HCA 20
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; [1951] HCA 79
Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2017] QCA 254
Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4
Tabet v Gett (2010) 240 CLR 537; [2010] HCA 12
Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19
Texts Cited:

Review of the Law of Negligence – Final Report (September 2002)

  J Edelman, “Loss of a Chance” (2013) 21 Torts LJ 1
Category:Principal judgment
Parties: Mal Owen Consulting Pty Ltd (Appellant)
Peter Ashcroft (Respondent)
Representation:

Counsel:
J Sleight…

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Details
Case
[2018] NSWCA 135
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute between Mal Owen Consulting Pty Ltd (the appellant) and Ashcroft (the respondent), a solicitor. The appellant alleged that the respondent breached his retainer by failing to pursue proceedings against a third party, which resulted in the appellant losing a commercial opportunity to recover funds. Although the appellant was later successful in its claim against the third party, the third party's bankruptcy meant no recovery was possible. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the respondent's alleged breach of contract caused the appellant to lose a valuable commercial opportunity, and if so, whether the appellant was entitled to damages for that loss. The court also considered whether the elements of the cause of action for breach of contract were modified by sections 5D and 5E of the *Civil Liability Act 2002* (NSW), particularly in relation to the concept of "harm" as defined in section 5 of that Act.

The Court of Appeal reasoned that the respondent's failure to pursue the third party constituted a breach of contract. Crucially, the court found that the appellant had established that the lost opportunity to recover from the third party was a valuable one, and that the respondent's breach had caused this loss. The court applied principles of causation in contract law, considering the loss of a commercial opportunity as a compensable head of damage. The court determined that the provisions of the *Civil Liability Act 2002* (NSW) did not preclude the appellant from recovering damages for this loss.

The Court of Appeal allowed the appeal, setting aside the orders of the District Court. The court ordered that the respondent pay the appellant $100,000 and the appellant's costs of both the District Court proceedings and the appeal.

Orders

Orders of the court

(1) Allow the appeal and set aside the orders made in the District Court on 29 June 2017.

(2) Order that the respondent pay the appellant an amount of $100,000.

(3) Order that the respondent pay the appellant’s costs of the proceedings in the District Court and of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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