Sensis Pty Ltd v McMaster-Fay - [2005] NSWCA 163

NEW SOUTH WALES COURT OF APPEAL

CITATION: Sensis Pty Ltd v McMaster-Fay [2005] NSWCA 163

FILE NUMBER(S):
40129/03

HEARING DATE(S): 12 October 2004

JUDGMENT DATE: 17/05/2005

PARTIES:
Sensis Pty Limited
Roger McMaster-Fay

JUDGMENT OF: Tobias JA McColl JA McClellan AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 462/01

LOWER COURT JUDICIAL OFFICER: Delaney DCJ

COUNSEL:
A: M R Elliott
R: J S Drummond

SOLICITORS:
A: Mallesons Stephen Jaques, Sydney
R: Bateman Batters, Penrith

CATCHWORDS:
DAMAGES - Assessment of damages - Damages for loss of a chance or opportunity - Doctor contracted to have his details listed in Yellow Pages - Details not listed in breach of contract and in breach of implied warranty in contract pursuant to Trade Practices Act 1974 s 74 - Claimed damages for loss of opportunity to increase growth of practice - Whether doctor had lost "an opportunity of real value" as a consequence of the breach - Assessment of the value of a lost opportunity

LEGISLATION CITED:
Trade Practices Act 1974

DECISION:
(1) Appeal allowed
(2) Set aside the verdict and orders of Delaney DCJ entered and made on 24 October 2003 and in lieu thereof enter judgment for the appellant
(3) Order that the respondent pay the appellant's costs of the proceedings in the District Court and of the summons for leave to appeal and the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41029/03
DC 462/01
TOBIAS JA
McCOLL JA
McCLELLAN A-JA
Tuesday 17 May 2005

SENSIS PTY LIMITED v ROGER McMASTER-FAY

Judgment

THE COURT: By summons filed on 19 February 2004, Sensis Pty Limited (the appellant) sought this Court's leave to appeal from the decision of Delaney DCJ of 24 October 2003 whereby his Honour entered a verdict in favour of Dr McMaster-Fay (the respondent) in the sum of $25,000 as damages for breach of contract on the one hand and of the warranty implied in that contract by s 74 of the Trade Practices Act 1974 (the Act) on the other.
At the commencement of the trial before the primary judge the appellant admitted that it had breached its contract with the respondent and the implied warranty under s 74 with the consequence that the only issue litigated was the assessment of the damages, if any, to which the respondent was entitled as a consequence of those breaches.
The appeal itself was heard concurrently with the application for leave. At the conclusion of argument the Court granted leave to appeal upon condition that a notice of appeal was filed within seven days. It did so on the basis that the appellant had advanced cogent arguments which demonstrated not only that the primary judge was arguably wrong but that he was manifestly wrong: cf Carolan v AMF Bowling Pty Limited t/as Bennetts Green Bowl, (Supreme Court of New South Wales Court of…

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] NSWCA 163
Decision Date: 17 May 2005

CaseChat Overview and Summary

This case involved an appeal by Sensis Pty Ltd, the publisher of the Yellow Pages, against a District Court decision that awarded damages to Dr. Roger McMaster-Fay. Dr. McMaster-Fay had contracted with Sensis for advertising listings in the 2000 and 2001 Penrith and Sydney Yellow Pages directories. He alleged that Sensis breached their agreement and an implied warranty under the Trade Practices Act 1974 by failing to include certain advertised listings, which he claimed resulted in a loss of opportunity to grow his practice and increase his income.

The central legal issues before the Court of Appeal were whether Dr. McMaster-Fay had proven that he sustained any loss as a result of Sensis's breaches, and if so, how the value of any lost opportunity should be assessed. Specifically, the court had to determine if the primary judge had a sound basis for awarding $25,000 in damages for the loss of an opportunity to increase the growth of his practice.

The Court of Appeal found that the primary judge had no proper basis for concluding that Dr. McMaster-Fay lost the opportunity to increase the growth of his patient base or that such a loss was caused by Sensis's breaches. Furthermore, the court held that there was no articulated or understandable basis for the assessment of the value of this alleged loss at $25,000, describing it as a figure "plucked from the air" and no more than a guess. The court applied the principle that the value of a lost chance must be ascertained by reference to probabilities or possibilities, and that such an assessment requires a reasoned basis, which was absent in the primary judge's decision.

Consequently, the Court of Appeal allowed the appeal, set aside the District Court's verdict and orders, and entered judgment for the appellant, Sensis Pty Ltd. Dr. McMaster-Fay was ordered to pay Sensis's costs in the District Court and on appeal.

Orders

Orders of the court

(1) Appeal allowed

(2) Set aside the verdict and orders of Delaney DCJ entered and made on 24 October 2003 and in lieu thereof enter judgment for the appellant

(3) Order that the respondent pay the appellant's costs of the proceedings in the District Court and of the summons for leave to appeal and the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified

Background

Background to the litigation

The appeal itself was heard concurrently with the application for leave. At the conclusion of argument the Court granted leave to appeal upon condition that a notice of appeal was filed within seven days. It did so on the basis that the appellant had advanced cogent arguments which demonstrated not only that the primary judge was arguably wrong but that he was manifestly wrong: cf Carolan v AMF Bowling Pty Limited t/as Bennetts Green Bowl, (Supreme Court of New South Wales Court of Appeal, Kirby P, Sheller and Cole JJA, 16 November 1995 unreported). In these circumstances, if the Court accepts the appellant's submissions, it would be unjust to leave his Honour's decision uncorrected. The factual background At all material times the appellant was the publisher of the Yellow Pages telephone directory and, in particular, the Penrith Yellow Pages directory. From 1983 to the end of 1997 the respondent carried on practice as an obstetrician and gynaecologist under the name "Dr Roger Fay" from the same premises in Emu Plains. Throughout that period he also retained the same telephone number. At the end of 1997 the respondent ceased to practise obstetrics. Thereafter he continued his practice from the same premises and with the same telephone number solely as a gynaecologist. In 1999 he decided to change his name by adding to it his mother's maiden name so as to be known as "Dr Roger McMaster-Fay". In October 1999 the appellant and respondent entered into a written agreement whereby in consideration of the payment by the respondent of $1,656, the appellant would provide advertising listing in the 2000 Penrith Yellow Pages and the 2000 Sydney Yellow Pages. These entries were to be a box display advertisement, a line item entry under "F" for "Fay" and a line item entry under "M" for "McMaster-Fay". A similar agreement was entered into in October 2000 for the 2001 year. In the 2000 Penrith Yellow Pages published in February 2000,(a) the line item entry under "F" for "Fay" did not appear;(b) the line item entry under "M" for "McMaster-Fay" did not appear; but(c) the box display advertisement did appear. In the 2001 Penrith Yellow Pages published in February 2001,(a) the line item entry under “F” for “Fay” did not appear;(b) the line item entry under “M” for “McMaster-Fay” did appear; and(c) the box display advertisement also appeared. A line item entry under “F” for “Fay” appeared in the White Pages telephone directory for each of the years 2000 and 2001. In addition the respondent’s telephone number could be obtained from Directory Assistance during those years.The proceedings before the primary judge Before the primary judge the appellant argued that the respondent had not proved that he had sustained any loss as a result of the appellant's breaches. On the other hand, the respondent claimed damages for the loss of the opportunity to increase the growth of his practice and thereby increase his income as well as for actual loss of income allegedly sustained.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The foregoing notwithstanding, the value of the lost chance is required to be ascertained by reference to the degree of probabilities or possibilities. The primary judge has, in our opinion, offered no sound basis upon which he could have assessed the value of that loss in the sum of $25,000. As the appellant submits, nowhere in his Honour's judgment is there a reasoned assessment of the value of the lost opportunity which his Honour found. It is apparent that the figure of $25,000 was plucked from the air and was no more than a guess. Even on the basis of possibility rather than probability, that assessment cannot stand.Conclusion In our opinion, it is plain that the primary judge had no proper basis for finding that the respondent lost the opportunity or chance of increasing the rate of growth of his new initial patients or that any such loss was caused by the appellant's breaches. Furthermore, no basis existed, nor was one articulated in an understandable manner, which could support the finding that the value of that loss was $25,000. We therefore make the following- orders:(1) Appeal allowed.(2)Set aside the verdict and orders of Delaney DCJ entered and made on 24 October 2003 and in lieu thereof enter judgment for the appellant.(3)Order that the respondent pay the appellant's costs of the proceedings in the District Court and of the summons for leave to appeal and the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified.**********

Ratio Decidendi

Legal Principle Established

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