Robert Bax & Associates v Cavenham Pty Ltd

Robert Bax & Associates took on the role of solicitors for Cavenham Pty Ltd, a company that loaned approximately $2.2 million to a Gold Coast nightclub in four separate transactions. The company was informed by the solicitors that a first mortgage would be registered over the lot purchased with the funds from the first loan. However, this did not occur, and the company believed the loan agreement amounted to security. After the first loan transaction was complete, the company's bank manager retained the appellant to act for the company. When the nightclub business was placed into receivership, the appellant argued that the retainer was of a limited clerical type, but the primary judge found that the appellant was obliged to proactively act in the company's interests, which included advising the company about the need for legal protection against contingencies that may arise. The primary judge found that the appellant breached the retainer, and the company sought to appeal the decision. The appeal centred on the extent of the appellant's duties and whether the primary judge's findings were correct on all the evidence. The company also challenged the admissibility of a letter dated 18 March 2004 that was admitted as evidence at trial. The company argued that the letter was hearsay and not admissible as proof of the retainer, but this argument was unsuccessful.

The appeal was also concerned with the essential elements of an action for negligence, including the duty of care, reasonable foreseeability of damage, and the relationship of proximity. The primary judge found that the appellant's breach caused the company's loss in respect of all the loans. On appeal, it was not shown that the primary judge had erred. An application to amend the notice of appeal was made, but it was refused. The court found that the respondent's conduct was not so unreasonable that the claimed losses could not be regarded as flowing from Mr Bax's conduct, and the application to amend ought not be allowed. The appeal was dismissed with costs.