Rebenta Pty Ltd v Wise

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.