Ott v Dichiera - [2005] SADC 51

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
OTT v DICHIERA
Judgment of Her Honour Judge Cole
25 May 2005
DAMAGES
Assessment of Damages - action in negligence, breach of contract and breach of Fair Trading Act 1987 against accountant.
Fair Trading Act 1987, referred to.
Brown v Southport Motors (1982) ATPR 40-306; Marks v GIO Australia [1998] HCA 69; 158 ALR 333, considered.

OTT v DICHIERA
[2005] SADC 51
Judge Cole
Civil

This is an assessment of damages. A judgment by default was entered against the defendant on 8 March 2004. The defendant did not appear and took no part in the hearing before me.
The defendant was engaged in 1997 to act as the accountant for the plaintiff, his wife and a number of entities controlled by the plaintiff. The plaintiff acted as agent for all of those entities and for Mrs Ott. The entities were Williams Mining & Industrial Sales Pty Ltd, BES Unit Trust, Building Equipment Services Pty Ltd (former name Wels Pty Ltd) and Ott Unit Trust.
In relation to the 1996/97, 1997/98, 1998/99, 1999/2000, 2000/2001 and 2001/2002 financial years, the defendant led the plaintiff to believe that he had undertaken all necessary work in relation to the plaintiff, Mrs Ott and the entities controlled by Mr Ott to meet the requirements of the taxation system together with ordinary business accounting requirements. However, Mr Ott discovered shortly prior to November 2002 that the audit of the Ott Superannuation Fund had not been undertaken. This discovery led to a discussion between Mr and Mrs Ott and the defendant, in the course of which other deficiencies in the work entrusted to the defendant became apparent.
In November 2002, Mr Ott engaged Mr Bulmer, an accountant, to undertake the work necessary to bring the accounting and taxation requirements of Mr and Mrs Ott and the abovenamed entities up to date. That work was undertaken.
The plaintiff issued proceedings against the defendant.
The plaintiff alleged that the defendant had breached his contract to provide financial services in that various financial statements, tax returns, business activity statements and the like had either not been prepared or lodged, or had been prepared incorrectly for the financial years set out above.
The plaintiff further alleged that the defendant had engaged in conduct that was misleading or deceptive or likely to mislead or deceive in breach of s 56 of the Fair Trading Act 1987, in that, to summarise, the defendant had represented himself as capable of providing accounting and taxation services when he was not so capable. The plaintiff had relied on the representations and was induced to enter into a contract for financial services, to his detriment.
The plaintiff further alleged that the defendant had been negligent in failing to complete and lodge the accounts and returns he was engaged to complete and lodge.
At the hearing of the assessment for damages, Mr and Mrs Ott gave oral evidence, and affidavits of theirs were tendered. Mr Bulmer also gave…

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: [2005] SADC 51
Decision Date: 25 May 2005

CaseChat Overview and Summary

In the District Court of South Australia, Ott brought an action against Dichiera seeking damages for negligence, breach of contract, and breach of the Fair Trading Act 1987. Dichiera was engaged as an accountant for Ott, his wife, and several entities controlled by Ott. The plaintiff alleged that Dichiera failed to prepare and lodge various financial statements, tax returns, and business activity statements correctly for multiple financial years. Additionally, it was claimed that Dichiera engaged in misleading or deceptive conduct by representing himself as capable of providing accounting and taxation services when he was not. The plaintiff also alleged that Dichiera was negligent in failing to complete and lodge the accounts and returns he was engaged to complete and lodge.

The court was required to determine the appropriate measure of damages for the breach of contract, the tort of negligence, and the breach of the Fair Trading Act 1987. The measure of damages in contract is the cost of making good the breach, while the tortious measure of damages is the amount needed to put the plaintiff into the position he would have been in had the breach of duty not occurred. The measure of damages for a breach of the Fair Trading Act is conceptually wider than the tortious measure, but in this case, all of the damages sought fit within either the contract or the tortious measure.

The court found that the costs incurred by the plaintiff to remedy the situation caused by Dichiera's actions were the most appropriate measure of damages. This included the fees paid to Mr. Bulmer for undertaking the remedial work required, the penalty tax and penalties paid to the ATO, and the audit fees for the Ott Superannuation Fund. Additionally, the court awarded damages for the time spent by Mr. and Mrs. Ott in sorting through the documents and preparing them for Mr. Bulmer. The total damages awarded were $41,180.05.

The court will hear the parties as to interest and costs.

Orders