Rebenta Pty Ltd v Wise - [2007] NSWSC 1332

CITATION: Rebenta Pty Ltd v Wise [2007] NSWSC 1332

HEARING DATE(S): 19-30 March 2007; 2-11 April 2007; 27-30 August 2007

JUDGMENT DATE :
30 November 2007

JUDGMENT OF: James J

DECISION: Verdict for the defendant

CATCHWORDS: PROFESSIONAL NEGLIGENCE - solicitors - retainer - construction of commercial contracts - rectification of contract - estoppel by convention - election between inconsistent rights - negligence - causation of damage - damage for loss of opportunity

LEGISLATION CITED: Environmental Planning and Assessment Act

CASES CITED: Amalgamated Investment & Property Co Ltd v Texas Commercial International Bank Ltd (in liq) [1982] QB 84
Con-Stan Industries of Australia Pty Limited v Norwich Winterthur Insurance (Aust) Ltd (1985-1986) 160 CLR 226
Gwynvill Properties Pty Ltd v Commissioner for Main Roads (1983) 50 LGRA 322
Moratic Pty Ltd v Gordon [2007] NSWSC 5
Ryledar v Euphoric [2007] NSWCA 65
Sargent v ASL Developments Ltd (1974) 131 CLR 634
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
The Indian Grace (No 2) [1998] AC 878
Westpac v Tanzone (2000) NSWCA 77

PARTIES: Rebenta Pty Ltd v Peter Wise

FILE NUMBER(S): SC 20349/98

COUNSEL: JC Kelly SC (Plaintiff)
LS Foster SC / DR Pritchard (Defendant)

SOLICITORS: Cohen & Krass (Plaintiff)
Mallesons Stephen Jaques (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

JAMES J

FRIDAY 30 NOVEMBER 2007

20349/98 REBENTA PTY LTD v PETER WISE
JUDGMENT

1 HIS HONOUR: These proceedings were brought by the plaintiff Rebenta Pty Ltd against the defendant Peter Wise claiming damages for alleged professional negligence by the defendant in acting as solicitor for the plaintiff in 1996. The plaintiff was the owner of a property at 107 MacPherson Street, Bronte on which a building known as the Bronte Inn was erected (“the Bronte Inn” or “the property”). On 18 December 1995 the plaintiff entered into an agreement described as a Project Management Agreement with a company named Dramwren Pty Limited, which later changed its name to Ocean View Apartments Pty Ltd (“Dramwren” or “Ocean View”) for the redevelopment of the property. In these proceedings the plaintiff alleged that by reason of the defendant’s negligence the plaintiff lost the opportunity of terminating the Project Management Agreement and of itself developing the property and thereby it suffered loss.

2 A very large amount of evidence was admitted in the proceedings. The common tender bundle of documents comprised 12 lever arch folders, some of which contained so many documents that they were divided into two separate folders. The plaintiff’s separate tender bundle and the defendant’s separate tender bundle each comprised two lever arch folders. Many witnesses, both lay and expert, gave oral evidence at the hearing. It is obviously impossible for me to refer in this judgment to all of the evidence which might have some relevance to one of more of the numerous issues which were raised. I propose first to set out a chronology of events and matters which were not disputed or which, in my opinion, were clearly established by…

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

AGLC: Rebenta Pty Ltd v Wise [2007] NSWSC 1332
Case: [2007] NSWSC 1332
Decision Date: 30 November 2007

CaseChat Overview and Summary

The respondents, Rebenta, engaged the appellants, Wise, to prepare a commercial lease. The lease was intended to be a bare lease with a break option. However, the lease prepared by Wise did not include the break option. Rebenta entered into the lease believing it contained the break option. Wise was subsequently sued by the landlord for breach of the lease. Wise sought indemnity from Rebenta for the costs incurred in defending the landlord's claim. Rebenta brought an action against Wise for professional negligence. The primary judge found that Wise was negligent in failing to prepare a lease with a break option and that this negligence caused Rebenta to suffer damages in the form of lost opportunity costs.

The central legal issue was whether Wise was liable for professional negligence. The court had to determine whether Wise owed a duty of care to Rebenta in the preparation of the lease, whether this duty was breached, and whether the breach caused the loss of opportunity to Rebenta. Additionally, the court needed to consider whether Rebenta could be estopped from denying the terms of the lease due to the conduct of Wise. The court also had to decide whether Rebenta could recover the costs of defending the landlord's claim as damages for the loss of opportunity.

The court held that Wise owed a duty of care to Rebenta in the preparation of the lease, and this duty was breached when the break option was omitted. The court found that this breach caused Rebenta to suffer a loss of opportunity, as it could have entered into a more favourable lease had it been properly prepared. The court rejected the argument that Rebenta was estopped from denying the terms of the lease, as there was no clear and unequivocal representation by Wise that the lease would include a break option. The court also found that Rebenta could not recover the costs of defending the landlord's claim as damages for the loss of opportunity, as these costs were not a direct result of Wise's negligence.

The appeal was dismissed. The court ordered that Rebenta pay Wise costs of the appeal on an indemnity basis.

Orders