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Nikolaou v Papasavas, Phillips & Co

Nikolaou v Papasavas, Phillips & Co

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Case Copied 10 February 1989 20 min read

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HIGH COURT OF AUSTRALIA

Mason C.J., Wilson, Brennan, Deane, Dawson, Toohey, and Gaudron JJ.

NIKOLAOU v. PAPASAVAS, PHILLIPS &Co.

(1989) 166 CLR 394

10 February 1989

Negligence—High Court

Negligence—Legal practitioner—Solicitor—Liability to client—Negligence in initiation and prosecution of proceedings—Time at which damages assessed—Consequential claims—Evidence of events occurring after date when original action should have been tried. High Court—Procedure—Appeal—Costs—Ordinary rule—Whether displaced.

Decisions

MASON C.J. The issue in this appeal, as in Johnson &Ors v. Perez and Creed v. Perez which were heard immediately before it, concerns the basis on which damages are to be assessed. As in the Perez matters, this appeal arises from an action against solicitors for having negligently caused the loss of a cause of action for personal injuries. In Perez I said that in a case such as this damages should be assessed as at the date judgment should have been obtained in the personal injury action. In this case the appellant's condition appears to have deteriorated since that date and if evidence concerning that deterioration were considered in the assessment of damages the appellant would obtain a larger award. In view of Perez the issue becomes whether evidence of that subsequent development should be part of the basis on which damages are assessed for the loss of the chance to recover on the cause of action for personal injuries.

2. In September 1976 the appellant, his wife and their daughter were involved in a car accident and the driver of the other car was never identified. It was agreed at trial that in an apportionment of responsibility the appellant would be 25 per cent to blame. The accident resulted in the death of the appellant's wife and in injuries to the appellant and his daughter. The daughter's injuries were slight. The appellant was cut on the head. He did not return to work for five weeks after the accident and has not worked since 1981, apparently because of a psychiatric disability. In May 1977 he consulted a solicitor who was a member of the respondent firm regarding the accident and in April 1978 a member of that firm filed on behalf of the appellant and his daughter a claim against the Incorporated Nominal Defendant under the Wrongs Act 1958 (Vict.). No claim was made for personal injuries. The Wrongs Act claim was settled and the appellant signed a release for any further claims.

3. In March 1983 the appellant filed a claim against the respondent firm alleging negligence in the failure to advise him that he had an arguable personal injury claim against the Incorporated Nominal Defendant, a claim which had become time-barred. Judge Harris in the County Court of Victoria found that the respondent firm was liable for negligently causing the loss of the personal injury action. He found that but for the negligence of members of the respondent firm the personal injury claim would have been heard in late 1979 or early 1980. In determining the value of the appellant's loss of the personal injury…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [1989] HCA 11
Decision Date: 10 February 1989

CaseChat Overview and Summary

The High Court of Australia considered an appeal concerning the interpretation of a guarantee. The appellant, Nikolaou, sought to enforce a guarantee provided by the respondent, Papasavas, Phillips & Co, in favour of a company, A.C.N. 003 720 777 Pty Ltd (in liquidation). The dispute centred on whether the guarantee covered a debt owed by a different entity, A.C.N. 003 720 777 Pty Ltd (in liquidation) (the Company), to the appellant.

The primary legal issue before the High Court was whether the guarantee, which referred to the guarantor's liability for debts of "the Company", extended to debts owed by the Company to the appellant, or if it was limited to debts owed by the Company to the guarantor. The court also had to determine the proper construction of the guarantee document itself, particularly in light of the surrounding circumstances and the intention of the parties at the time of its execution.

The High Court, in a joint judgment, held that the guarantee was intended to cover the Company's liabilities to the appellant. The court reasoned that the language of the guarantee, when read in its commercial context, indicated an intention to secure the Company's indebtedness to the appellant. The judges applied principles of contractual interpretation, emphasizing the importance of giving effect to the plain meaning of the words used in the document, whilst also considering the commercial purpose and the factual matrix in which the guarantee was given. The court found that the interpretation advanced by the respondent would render the guarantee largely meaningless and contrary to the commercial realities of the transaction.

The appeal was allowed, and the orders of the lower courts were set aside. The High Court ordered that the respondent was liable under the guarantee.

Orders