Polyxeni Kambouris (also known as Jenny Kambouris) v Con Kiatos
[2017] VSCA 133
•14 June 2017
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0119
| POLYXENI KAMBOURIS (also known as JENNY KAMBOURIS) | Applicant |
| v | |
| CON KIATOS | Respondent |
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| JUDGES: | MAXWELL P, BEACH and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 18 May 2017 |
| DATE OF JUDGMENT: | 14 June 2017 |
| MEDIUM NEUTRAL CITATION: | [2017] VSCA 133 |
| JUDGMENT APPEALED FROM: | [2015] VSC 174 (Lansdowne AsJ) |
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PRACTICE AND PROCEDURE – Claim of negligence and breach of retainer against solicitor – Trial ‘on liability alone’ conducted before judge – Judge found negligence and breach of retainer claims made out – Plaintiff not in position to provide full particulars of loss and damage before trial judge – Damages trial conducted before associate judge – Whether judge determined causation – Whether trial before associate judge therefore limited to quantification of loss.
PRACTICE AND PROCEDURE – Statement of claim said to identify alternative causation cases – Outline of evidence filed by applicant supported ‘no transaction case’ alone – Whether judge erred in requiring applicant to ‘elect’ between causation cases – Applicant bound by case that she chose to run – Application for leave to appeal refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr S J Minahan | AMC Law & Associates |
| For the Respondent | Ms W A Harris QC with Mr N P De Young | Minter Ellison |
MAXWELL P
BEACH JA
McLEISH JA:
In 2013, a judge in the Trial Division accepted the applicant’s claims that the respondent, a solicitor, had breached his retainer and duty of care by incorrectly advising her as to certain matters before she executed guarantees in favour of a bank.[1] The judge referred the assessment of damages to an associate judge. In 2015, an associate judge held that the applicant was entitled to nominal damages only, in the amount of $100.[2]
[1]Kambouris v Tahmazis [2013] VSC 271.
[2]Kambouris v Tahmazis [No 2] [2015] VSC 174 (‘Reasons’).
The applicant now seeks leave to appeal against the decision of the associate judge. She asserts that the associate judge determined issues of causation which the judge had already decided in her favour, alternatively that she was prevented from pursuing part of her case on causation before the associate judge.[3] For the reasons that follow, there is no substance in these claims and leave to appeal must be refused.
[3]The applicant abandoned a wider attack on the associate judge’s findings as to causation shortly before the hearing of the application for leave to appeal.
Factual background
The applicant’s husband, Theo Kambouris, was an experienced builder. In 2001, he commenced a property development joint venture with the respondent and Bill Floros. The joint venture was undertaken successively through two entities, BTC Developments Pty Ltd (‘BTC’) and then Betac Investments Pty Ltd (‘Betac’).
BTC had a business cheque account with the National Australia Bank (‘NAB’) from at least July 2002, and a mortgage account from at least May 2004.
The applicant and Mr Kambouris controlled a company, T & P Kambouris Nominees Pty Ltd (‘Kambouris Nominees’), which acted as trustee for a family trust. Kambouris Nominees had a loan account with NAB. The applicant and Mr Kambouris jointly and severally guaranteed Kambouris Nominees’ obligations to NAB. NAB also held mortgages over three properties: one in Loch Sport, initially owned by Kambouris Nominees and later transferred to the applicant (subject to the mortgage), and two units in Springvale, owned at all relevant times by the applicant and Mr Kambouris.
In April 2005, BTC obtained funds from NAB, by way of mortgage account and business cheque account, with a basic facility limit of up to $684,000. By guarantee and indemnity dated 20 April 2005, the applicant, Mr Kambouris, Mr Floros and Betac (together, ‘the BTC guarantors’) jointly and severally guaranteed the obligations of BTC to NAB, including those arising from the mortgage and business cheque accounts, up to $684,000.
In June 2005, BTC obtained further lines of credit from NAB totalling $894,000, constituted by an overdraft with a limit of $400,000, a bank guarantee facility with a limit of $260,000 and a mortgage facility of $234,000. The BTC guarantors signed a further guarantee and indemnity in respect of the liabilities of BTC to NAB in the increased sum of $894,000.
The applicant gave evidence in the liability trial before Judd J that she first met the respondent some time in 2005 and he subsequently acted as her solicitor in respect of relevant transactions. In July 2005, the applicant, Mr Kambouris and the respondent discussed Mr Floros and Anna Papakostas (the respondent’s wife) each providing an indemnity and a mortgage over their respective properties in respect of the applicant’s exposure in relation to the BTC debt and the mortgages.
Mr Floros, the applicant and BTC signed an agreement dated 4 July 2005, by which Mr Floros charged a property in East Bentleigh in the applicant’s favour.
A similar agreement was prepared for Ms Papakostas to sign, in respect of a property at Loch Sport. The respondent forwarded a draft agreement to Mr Kambouris on 4 July 2005 and instructed Ella Gorenstein, a solicitor, to lodge a caveat over Ms Papakostas’s Loch Sport property. However, Ms Papakostas never executed the indemnity agreement nor any mortgage. The applicant’s evidence implied that she became aware of this fact in late 2007.
From late 2005, BTC began to experience financial difficulties. By mid-2006, existing building contracts were transferred from BTC to Betac. In the meantime, the BTC guarantors signed further guarantees and indemnities in NAB’s favour, in respect of BTC, in the following amounts and on the following dates:
(a) 6 October 2005 — up to $930,000;
(b) 11 October 2005 — up to $947,000; and
(c) 7 May 2006 — up to $947,000.
As part of the transfer of the joint venture business, the joint venturers sought to refinance through Betac. In November 2006, NAB extended funding to Betac up to $852,500, guaranteed jointly and severally by the applicant, Mr Kambouris and their son. The majority of the funds were used to pay out BTC’s facilities, leaving approximately $200,000 remaining.
Further guarantees and indemnities in respect of Betac’s liabilities to NAB were given by the applicant, Mr Kambouris and their son, in the following amounts and on the following dates:
(d) 10 April 2007 — $1.26 million, after further lines of credit were obtained by Betac;
(e) 22 May 2007 — $1.25 million;
(f) 19 and 20 September 2007 — $1,677,517;
(g) 18 and 19 February 2008 — $1,677,517.
Betac was placed into liquidation in December 2008. This triggered demands on the guarantors in respect of Betac’s NAB facilities.
NAB sold the applicant’s and Mr Kambouris’s two Springvale units and one of Betac’s properties at Oakleigh. The property at Loch Sport, owned by Kambouris Nominees, was transferred to a company owned by the applicant’s children, for a stated consideration of $580,000. In June 2012, the applicant and NAB executed a settlement agreement under which she would pay $450,000, and transfer her property at Loch Sport, in full and final satisfaction of her exposure to NAB pursuant to the indebtedness of Betac and Kambouris Nominees.
The proceeding below
The proceeding was initially brought against the respondent, Ms Gorenstein and Theo Tahmazis (as the personal representative of Mr Floros). The proceeding was settled in respect of Ms Gorenstein and the estate of Mr Floros. Before the trial judge, the respondent withdrew his defence. The trial on liability then proceeded on an undefended basis.
On 18 March 2013, the judge ordered that the trial be ‘on liability alone’. The order noted in ‘Other Matters’ that the applicant had informed the Court that she was ‘not yet in a position to provide full particulars of loss and damage’.
The third further amended statement of claim, dated 20 March 2013, made five allegations in respect of the respondent:
(h) that, in July 2005, he breached his duty of care, as the applicant’s solicitor, by instructing Ms Gorenstein to lodge a caveat on Ms Papakostas’s property when he knew that Ms Papakostas had not signed the indemnity agreement;
(i) that, in October 2006, he breached his duty of care and retainer by representing to the applicant, in a telephone call, that the agreement with Ms Papakostas, and the agreement and mortgage with Mr Floros, would secure the full amount that each of Ms Papakostas and Mr Floros had agreed to contribute to the applicant if all amounts owing under the BTC facilities were not repaid;
(j) that, in November 2006, he breached his duty of care and retainer by making the same representation when he signed a solicitor’s certificate in respect of the refinancing;
(k) that, in May 2007, he breached his duty of care and retainer by making a similar representation in respect of the further borrowings made by Betac in May 2007 when he signed a solicitor’s certificate in respect of those further borrowings; and
(l) that, in May 2007, he breached his retainer by failing to instruct counsel to draw documents to protect the applicant and Mr Kambouris in respect of the agreement with Ms Papakostas and the agreement and mortgage with Mr Floros.
According to the associate judge, the judge found against the respondent in respect of allegations (b)–(d) above but did not make findings of breach in respect of the other two allegations.[4] Moreover, the judge’s findings of breach were confined to the advice with respect to the applicant’s position vis-à-vis Ms Papakostas.[5] That position was not challenged before us.
[4]Ibid [45].
[5]Ibid [47].
The judge concluded his reasons as follows:
When the bank ultimately called in the security, the plaintiff was unable to call upon the security she believed had been provided by Ms Papakostas. In my opinion, the plaintiff has suffered loss and damage by reason of the breach by Mr Kiatos, in failing to advise her in October 2006 and May 2007, when she was called upon to provide additional security to the bank, that she was not protected by an indemnity agreement executed by Ms Papakostas that would support the caveat, and a mortgage granted by Ms Papakostas over the Loch Sport property.
Accordingly, the plaintiff is entitled to judgment against the second defendant, Con Kiatos, with damages to be assessed.[6]
[6]Kambouris v Tahmazis [2013] VSC 271 [20]–[21] (Judd J).
The applicant had pleaded causation in the following way:
49.Acting on the faith and truth of the Kiatos Representations and induced thereby the plaintiff did or refrained from doing the following things.
(a)the plaintiff would not have—
(i)agreed to provide the New NAB Guarantee and security over the Plaintiff’s Properties as security for the Betac Facilities.
(ii)signed the New NAB Guarantee; further or in the alternative,
(iii)made the NAB payment;
(iv)made ‘further borrowings’ referred to; [or]
(b)the plaintiff would have sought and obtained from Floros a variation to the Floros Agreement and the Floros Mortgage so that they provided for Floros to indemnify the plaintiff in respect of her obligations to the NAB under the NAB Mortgages and the New NAB Guarantee in respect of the Betac Facilities and to charge the Floros Property with that liability; [and]
(c)the plaintiff would have insisted upon due execution of the Papakostas Agreement and/or the provision of proper security over the Papakostas property. The plaintiff would then have sought and obtained from Anna Papakostas a variation to the Papakostas Agreement so that it provided for Anna Papakostas to indemnify the plaintiff in respect of her obligations to the NAB under the NAB Mortgages and the New NAB Guarantee in respect of the Betac Facilities and to charge the Papakostas Property with that liability.
After the settlement of the claim against Mr Floros, sub-para (b) was no longer relevant.
Loss and damage was pleaded, without any particulars. It was said that full particulars would be provided after the taking of accounts and the making of enquiries sought in the statement of claim.
On 3 February 2015, the applicant filed a signed outline of evidence. It said, in relevant part:
I have been asked what would have occurred if I were told by Mr Kiatos in November 2006 that [the] Papakostas agreement and the Papakostas mortgage had not been signed and that in the event of Betac taking over the debts of BTC there was a risk that Mr Floros would later allege that the security documents Mr Floros had signed securing his house against my liability to the NAB for the BTC loan, were ineffective.
The answer to that question is simple. In those circumstances I would have firstly sought legal advice about what had happened. However, if the legal advice confirmed what I had been told and that neither Mr Floros nor Anna Papakostas had provided security to me for the NAB bank account, then I would not have signed any further security documentation with the bank in the form provided to me. … I would have approached the Bank to give me breathing room to permit me to sell [properties owned by BTC or Betac] and to commence proceedings to enforce Mr Floros’ mortgage. I believe that if those properties were sold and the mortgage were enforced that BTC’s bank debts would have been paid out.
…
As I was not told that there were any problems with the security documentation by Mr Kiatos in either late 2006 or May 2007, as His Honour has found to be the case I signed the security documentation and permitted the affairs of Betac to be carried on by my husband, Mr Floros and Mr Kiatos.
If I were told in May 2007 that Floros and Papakostas were not providing security for my NAB guarantee I would have taken similar steps to those outlined above.
The trial before the associate judge commenced on 4 February 2015. An amended updated list of the applicant’s damages was filed on 9 February 2015. This document was not relevantly different to earlier material filed by the applicant. Among other things, it claimed the current value of the properties in Springvale and Loch Sport which NAB had sold as mortgagee. The document stated that, ‘[h]ad Kiatos not acted wrongly those properties would not have had to have been sold as the Floros and Papakostas mortgages would have covered any liability to [NAB]’.
At the beginning of the trial before the associate judge, counsel for the respondent objected to the filing of the applicant’s witness statement, unless there was an application to amend the particulars of loss. It was submitted that the filing of the statement was out of time and that it advanced a case different from that in the list of damages. In short, it was submitted that the outline of evidence advanced a case corresponding to that in para 49(a) of the pleading (a ‘no transaction’ case), whereas the list of damages had advanced a different case, based on para 49(c) (a ‘different transaction’ case).
In the course of discussion, the associate judge asked counsel for the applicant (not counsel appearing before us) whether he sought to rely on paras 49(b)–(c) at all. Counsel indicated, with some equivocation, that he did not seek to rely on those paragraphs ‘on [his] current instructions’. However, counsel said shortly afterwards:
Well the evidence is going to be as we’ve set out in the statements that we’ve provided that basically what would have happened is what would happen in (a) and that we would have said no we’re not going on with it and that’s the way we would have dealt with it.
Counsel none the less submitted at that stage that he had not made an ‘election’ between para 49(a) and para 49(c).
The associate judge declined to permit the outline of evidence to be relied upon, on the basis that it extended to questions of loss arising from the insufficiency of the documentation signed by Mr Floros, as to which the judge had made no finding of breach. She noted that other aspects of the document may not have that problem. The associate judge considered that the list of damages was ambiguous and was therefore not necessarily inconsistent with the outline of evidence. In her ruling, she indicated that this ambiguity needed to be removed by the applicant ultimately making an election as to how she claimed that her loss had been caused.
Subsequently, counsel for the applicant made a further application for leave to call evidence from the applicant, relying on the same outline of evidence but omitting references to the Floros security. The associate judge granted the application. The effect was that the applicant would be giving evidence that, had she known that Ms Papakostas had not executed the mortgage and indemnity, she would not have signed the relevant guarantees. When later pressed by the associate judge in the course of his opening, counsel confirmed that the applicant’s case was the ‘no transaction’ case in para 49(a) and not the ‘different transaction’ case in paras 49(b)–(c).
Subsequently, counsel for the applicant confirmed that the list of damages was to be read consistently with para 49(a) of the pleading, not paras 49(b)–(c). The trial proceeded and the applicant duly gave evidence consistent with her outline of evidence, save for its reliance on the position regarding Mr Floros.
The applicant claimed by way of loss the current value of the Springvale and Loch Sport properties sold by NAB, the legal costs incurred in defending NAB recovery proceedings, and repayment of $100,000 (together with interest) that she contended that she paid to BTC when its liabilities were discharged in November 2006. The applicant conceded that the settlement sums she received from Ms Gorenstein and Mr Floros’s estate needed to be deducted from her claim.
The respondent’s principal contention before the associate judge was that his negligence and breach of retainer had not caused any loss to the applicant. The applicant ultimately responded, among other things, that the question of causation had already been determined by the trial judge. Thus, a threshold question was whether causation had already been determined by the trial judge.
The associate judge found that it had not. She observed that the applicant had opened her case before the associate judge on the basis that causation was in issue, and that evidence was marshalled on this basis. The applicant could not resile from that approach.[7] Further, the judge could not have determined causation because such a determination could only be made if the loss said to have been occasioned had been identified.[8] Alternatively, the trial judge’s statement that the applicant ‘ha[d] suffered loss and damage by reason of the breach’[9] could be interpreted as meaning that the applicant suffered ‘an increased exposure, the measure of which would have been at its highest the equity in the Papakostas property’.[10] But if so, that loss depended on the ‘different transaction’ case, which the applicant had elected not to pursue.
[7]Ibid [59]–[63].
[8]Ibid [64].
[9]Kambouris v Tahmazis [2013] VSC 271 [20].
[10]Reasons [66].
Next, the associate judge determined, contrary to the applicant’s contentions, that the Wrongs Act 1958, rather than the common law, applied to the assessment of causation.[11] After outlining the law in respect of factual causation and scope of liability under s 51 of the Wrongs Act,[12] the associate judge turned to apply that law to the facts. In light of the limited scope of the issues sought to be raised by way of appeal, her conclusions can be briefly stated.
[11]Ibid [69]–[76].
[12]Ibid [77]–[91]. Section 51 of the Wrongs Act 1958 relevantly provides:
General principles
(1)A determination that negligence caused particular harm comprises the following elements—
(a)that the negligence was a necessary condition of the occurrence of the harm (factual causation); and
(b)that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).
As to factual causation, the associate judge found that the applicant failed to establish that she would not have signed the Betac guarantees in November 2006 and May 2007 if she had known at that time that the Papakostas agreement and mortgage were not in place.
She observed that the first BTC guarantee was executed before the idea of obtaining security from Ms Papakostas had been discussed.[13] Several subsequent guarantees were executed without the applicant having much knowledge of the circumstances or her exposure; moreover, the February 2008 Betac guarantee was signed after the applicant knew that Ms Papakostas had not executed any indemnity or mortgage.[14]
[13]Ibid [130]–[139].
[14]Ibid [140]–[148].
The associate judge also found that ‘it was the habitual practice of the plaintiff to give further guarantees when requested to do so by Mr Kambouris, although on occasion she would seek reassurance as to her position’.[15] She found that, even if the applicant had known earlier that no security from Ms Papakostas was in place, she would have proceeded to sign the various guarantees because of the objective reasons to proceed and Mr Kambouris’s desire to do so.[16]
[15]Ibid [156]; see generally at [149]–[157].
[16]Ibid [158]–[189].
In respect of the costs of defending the NAB recovery proceedings and the $100,000 the applicant allegedly paid to BTC, the associate judge found that the applicant had suffered no loss.[17]
[17]Ibid [190]–[195].
The associate judge considered scope of liability on the assumption that her conclusions in respect of factual causation were incorrect. She found that the respondent’s scope of liability under s 51(1)(b) of the Wrongs Act 1958 should not extend to cover the claimed losses, for several reasons:
(m) the applicant’s assets were already exposed prior to the respondent’s first breach; she signed the first BTC guarantee before there was even discussion of seeking security from Ms Papakostas,[18] and signed several more guarantees before October 2006;
[18]Ibid [221].
(n) the first guarantee given after the first breach, in respect of Betac and up to the sum of $852,500, actually represented a substantial reduction in liability from the previous guarantee, which was for $947,000;[19]
[19]Ibid [223].
(o) the applicant was in a better position after the breach, because Betac was in a better financial position after the restructure than BTC had been before it;[20]
[20]Ibid [224].
(p) although the May 2007 guarantee, given on the third occasion of breach, constituted an increase of $400,000 on the November 2006 guarantee, Betac had purchased a property shortly before the execution of the guarantee and purchased another shortly after, so that its increased indebtedness was accompanied by an increased asset pool;[21]
(q) the applicant entered into the February 2008 guarantee after having knowledge of the respondent’s breaches, rather than allowing BTC to go into liquidation or trying to persuade NAB to realise its security against properties other than hers. She could have done much the same thing immediately after apprehending that Ms Papakostas had not provided any security;[22]
(r) the loss that ‘most directly ar[ose]’[23] from the breaches was the loss of the amount that the security from Ms Papakostas would have provided to the applicant. The value of Ms Papakostas’s Loch Sport property, on expert evidence, could not have exceeded $125,000. But the applicant did not seek damages for that loss, instead claiming for the loss of her own properties.[24]
[21]Ibid [225]–[226].
[22]Ibid [227]–[230].
[23]Ibid [237].
[24]Ibid [233]–[239].
The associate judge awarded the applicant nominal damages of $100.[25]
[25]Ibid [258].
The application for leave to appeal
The proposed grounds of appeal foreshadowed a challenge to the associate judge’s finding that factual causation was not established. That challenge was abandoned before the hearing, such that the remaining grounds of appeal address three matters:
(s) whether the associate judge erred in determining that the trial judge had not already decided the issue of causation;
(t) whether the associate judge erred in finding that the applicant had not shown that it was appropriate for the respondent’s liability to extend to the harm alleged; and
(u) whether the associate judge erred in requiring the applicant to ‘elect’ between the ‘alternative’ causation cases alleged at para 49 of the third further amended statement of claim.
The applicant’s arguments in relation to the second of the above issues (‘scope of liability’) included that the matters taken into account by the associate judge bore properly on factual causation, rather than scope of liability. However, at the hearing, counsel for the applicant accepted that, since the associate judge’s finding as to factual causation was not challenged, the issue of scope of liability did not arise in any event. He indicated that he would press the second issue if the respondent were to argue that the associate judge’s findings as to scope of liability would defeat the applicant’s alternative causation argument (which would itself arise for determination only if the third issue were to be decided in favour of the applicant). Since the respondent did not make that submission, the applicant did not pursue the matter and it is unnecessary to say anything further in relation to the second issue.
Prior determination of causation
The applicant contended that the trial judge had determined causation in the liability trial. She relied on the following passages in the judge’s reasons:[26]
In my opinion, the evidence compels the conclusion that Mr Kiatos assumed the role of solicitor for the plaintiff in his role as a joint venture partner with her husband and Mr Floros. That was part of what Mr Kiatos brought to the joint venture. His sensitivity about his compromised position led him to engage Ms Gorenstein to undertake certain tasks, but that did not relieve him of his overall duty to the plaintiff when providing legal advice and assistance. Mr Kiatos knew that the agreement had not been executed, but failed to inform the plaintiff. I accept that the plaintiff gave her security to the bank in the belief that she was supported by an indemnity agreement and mortgage given by each of Mr Floros and Ms Papakostas.
…
When the bank ultimately called in the security, the plaintiff was unable to call upon the security she believed had been provided by Ms Papakostas. In my opinion, the plaintiff has suffered loss and damage by reason of the breach by Mr Kiatos, in failing to advise her in October 2006 and May 2007, when she was called upon to provide additional security to the bank, that she was not protected by an indemnity agreement executed by Ms Papakostas that would support the caveat, and a mortgage granted by Ms Papakostas over the Loch Sport property.
[26]Kambouris v Tahmazis [2013] VSC 271 [15] [20] (emphasis added). The emphases are reproduced from the applicant’s written case.
The associate judge gave three reasons for rejecting the applicant’s submission: the applicant had conceded before her that causation had not been decided by the judge and was in issue before her; no loss had been identified by the trial judge, such that it was logically impossible for him to have determined causation; and his reasons were to be read as concluding only that the applicant had been exposed to potential loss and damage by the respondent’s breach of duty and retainer.
The applicant denied that her counsel had conceded the point and said that, in any event, the liability judgment was res judicata and a concession could not override the trial judge’s findings. Loss had been identified (albeit in a form that lacked particularity), namely the loss pleaded in para 49 of the third further amended statement of claim. The associate judge’s interpretation of the judge’s statement that ‘the plaintiff has suffered loss and damage by reason of the breach’[27] was simply not open.
[27]Ibid [20].
The respondent submitted that causation had not been determined by the trial judge. No evidence was adduced as to causation before the trial judge, and there was no particularisation of the loss. It was submitted that causation cannot be determined without first identifying what loss is claimed. The respondent observed that, before the trial judge, senior counsel for the applicant had submitted that causation would be left for the damages trial. The applicant ought not to be allowed to resile from this concession.[28] Moreover, the applicant had conducted the damages trial on the basis that causation was in issue. The outline of evidence that the applicant filed reflected only the ‘no transaction’ case pleaded at para 49(a) of the third further amended statement of claim and her opening submissions, both written and oral, raised the question of causation. It would be at odds with the way in which the applicant conducted the damages trial for her to be permitted to contend that causation had been determined previously.
[28]See Coulton v Holcombe (1986) 162 CLR 1, 7 (Gibbs CJ, Wilson, Brennan and Dawson JJ); Water Board v Moustakas (1988) 180 CLR 491, 497 (Mason CJ, Wilson, Brennan and Dawson JJ); Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, 461 [51] (Gleeson CJ, McHugh and Gummow JJ).
In resolving this ground it is not necessary to resort to the principle, invoked by the respondent, that new arguments are usually not permitted to be raised for the first time on appeal. That is because the applicant’s argument is without merit.
It is not plausible, when account is taken of the manner in which the matter was conducted before the judge, to interpret his statement that ‘the plaintiff has suffered loss and damage by reason of the breach’[29] by the respondent as amounting to a finding as to causation. As senior counsel for the respondent pointed out, the judge made no reference to s 51 of the Wrongs Act 1958 or its requirements. He did not purport to apply that provision. Nor could he have done so, in the absence of any particularisation of the loss alleged to have been suffered. Section 51 by its own terms depends upon identifying the ‘particular harm’ said to have been caused. There was no way that the judge could have undertaken this exercise because, as the orders for a separate hearing on liability noted, the applicant was not in a position to provide particulars of her loss. Read in context, the judge’s observation can mean no more than that there was a basis for inquiring further into the loss and damage suffered by the applicant by reason of the breaches of the respondent.
[29]Kambouris v Tahmazis [2013] VSC 271 [20].
The requirement to ‘elect’ between the ‘alternative’ causation cases
The applicant contended that there was no factual inconsistency between the ’alternative’ causation cases pleaded at para 49(a) and paras 49(b)–(c) respectively. She submitted that she ought to have been allowed to contend that, had she known that the Papakostas security was not in place, she would have required it to be put in place while at the same time saying that if that did not happen, she would not have proceeded further.
It followed that the associate judge ought not to have put the applicant to an election. By reason of this error, little evidence was led as to the value of Ms Papakostas’s Loch Sport property, and none was led as to the value of her indemnity. Therefore, the matter should be remitted to the Trial Division for further hearing on this aspect of causation.
The respondent submitted that the applicant’s counsel rightly accepted before the associate judge that para 49(a) and paras 49(b)–(c) were alternatives and abandoned the ‘different transaction’ case embodied in the latter paragraphs. It was not a matter of ‘election’. The applicant had simply been required, in the ordinary way, to identify the case she was putting. The respondent submitted that a party who abandons an argument may not seek to resile from that position on appeal.[30]
[30]See Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231, 241 (Barwick CJ); O’Sullivan v Watson (1986) 7 NSWLR 693, 699 (Mahoney JA); Thorne v Doug Wade Consultants Pty Ltd [1985] VR 433.
As with the previous ground, recourse to the respondent’s argument that a case abandoned at trial may not be revived on appeal is unnecessary. The applicant’s argument is again devoid of merit.
It was abundantly clear from the outline of evidence of the applicant, filed immediately before the trial, that her evidence would be that, had the breaches not occurred, she would not have signed the guarantees in question. That evidence reflected the first of the two alternatives in para 49 of her pleading. It provided no support at all for the second alternative. When pressed in relation to the meaning of the list of damages, counsel confirmed that the applicant’s case was the ‘no transaction’ case in para 49(a) and not the ‘different transaction’ case in para 49(c). Although the associate judge described the exchanges as involving her requiring the applicant to make an ‘election’ between the alternative cases,[31] in truth the applicant was only being asked to clarify her case. She did so by reference to an outline of evidence that advanced the ‘no transaction’ case alone, and she then ran and lost that case.
[31]Reasons [50].
It is not necessary to decide whether the ‘alternatives’ in para 49 were really mutually exclusive. That is because counsel did not seek, for example, to lead evidence that the applicant would have first tried to have Ms Papakostas execute the mortgage and indemnity and only if that failed would she have refused to sign the documents. In the circumstances, the applicant is bound by the case that she ran, consistently with her own outline of evidence.
Conclusion
The application for leave to appeal must be refused.
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