Simply Irresistible Pty Ltd v Couper
[2012] VSCA 128
•22 June 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2011 0030
| SIMPLY IRRESISTIBLE PTY LTD (ACN 007 139 451) | Appellant |
| v | |
| SAMUEL B COUPER & ORS | Respondents |
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| JUDGES | BUCHANAN, NEAVE JJA and HOLLINGWORTH AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 6 March 2012 |
| DATE OF JUDGMENT | 22 June 2012 |
| MEDIUM NEUTRAL CITATION | [2012] VSCA 128 |
| JUDGMENT APPEALED FROM | Simply Irresistible Pty Ltd v Couper [2010] VSC 601 (Kyrou J) |
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LEGAL PRACTITIONERS – Solicitor – Breach of retainer – Negligence – Proceeding by former client against solicitor – Alleged failure to advise adequately about exercise of option to purchase land – Breach of retainer and negligence established – Nominal damages awarded – Whether trial judge erred in finding that breach did not cause loss – Whether trial judge erred in assessment of damages – Appeal dismissed.
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| APPEARANCES: | COUNSEL | SOLICITORS |
| For the Appellant | Mr D L Bailey | Nevett Ford |
| For the Respondents | Mr P J Booth | Obst Legal |
BUCHANAN JA:
I agree with Neave JA.
NEAVE JA:
This appeal arises out of trial division proceedings in which Simply Irresistible Pty Ltd (‘Simply’) sought damages from its former solicitors, Riordan & Partners (‘Riordans’),[1] for loss suffered as a result of an alleged breach of retainer and/or common law duty of care.
[1]The respondents were the Riordans’ partners.
Simply claimed that Riordans did not exercise due care and skill in failing to advise it to exercise an option to re-purchase an apartment located at Unit 20, 50 Bourke Street, Melbourne (‘the Apartment’) from Millennium Markets Pty Ltd (‘Millennium’).
The trial judge accepted that Riordans had breached its retainer and duty of care (‘tort duty’), but held that the breaches did not cause it any loss, because Simply’s directors had independently decided they would not exercise the option and would not have done so even if Riordans had given them appropriate advice. The judge awarded nominal damages of $1.00 for Riordans’ breach of retainer.
Although there were twelve grounds of appeal, the main issue in the appeal is whether his Honour correctly found that Riordans’ breach did not cause Simply any loss.
Background
By way of overview, Patricia Maher and her sons, Justice Maher and Dominus Maher (together, ‘the Mahers’) owned a number of commercial and residential properties either personally or through corporate entities, including Simply (collectively, ‘the Maher Group’).
Patricia Maher and Justice Maher were directors of Simply and other Maher Group companies, including Eighty-Sixth Eternity Pty Ltd and Bundoora All‑Weather Market Pty Ltd.
In early 1999, the Mahers agreed to sell a number of properties to Millennium (‘Security Properties’) in order to repay debts owed to Westpac Banking Corporation. The properties included the Apartment, in which Patricia Maher had lived under licence from Simply since 1990, and land upon which a trash and treasure market known as the Bundoora All-Weather Market (‘BAWM’) was conducted (‘Market Land’).
Although Patricia Maher was reluctant to include the Apartment in the sale to Millennium, she agreed that this should occur only to ‘secure’ representations made by the Mahers that the Market Land could be used for specified purposes (that is, factory retailing outlets, a fruit and produce market and a trash and treasure market).
This arrangement was given effect to by an agreement entered into by Simply and Millennium (and others[2]) on 16 March 1999 (‘Agreement’).
[2]The other parties to the Agreement were BAWM, Eighty-Sixth Eternity Pty Ltd, Justice Maher, Mr Herszberg and Mr Gordon.
Clause 3 of the Agreement provided for the cancellation of the contract of sale of the Apartment and the re-transfer of the Apartment to Simply for nil consideration if, by the settlement date, a condition relating to the proposed uses of the Market Land was satisfied (‘Proposed Uses condition’). Its terms were as follows:
3. Cancellation of Apartment Contract
At Simply’s request, and despite the fact that the Apartment Contract has been exchanged just before, or simultaneously with, exchange of parts of this Deed, Simply and the Purchaser hereby agree that, provided that the Market Land can be used for the Proposed Uses without breaching the provisions of the planning scheme that affects the Market Land (including without limitation the Whittlesea Planning scheme) by the due date for settlement thereunder (whether because of a rezoning of the Market Land and/or by the grant of planning permits on terms reasonably acceptable to the Purchaser) with effect as and from the time that settlement occurs … the Apartment Contract is hereby cancelled and they hereby acknowledge that neither of them will, as from the time that the cancellation takes effect, have any rights under it save and except that the deposit paid or payable by the Purchaser under its terms must forthwith be refunded to the Purchaser.
Clause 1.8 of the Agreement defined ‘Proposed Uses’ as follows:
Proposed Uses means the use of the Market Land for the following:
1.8.1 including without limitation factory retailing outlets;
1.8.2 a fruit and produce market; and
1.8.3 a trash and treasure market;
with the ability to grant leases (or at the Purchaser’s option licences) for tenancies.
In the course of negotiations, the definition of Proposed Uses had been amended by the Mahers with the intention of ensuring it was consistent with the then current uses of the Market Land.[3]
[3]Simply Irresistible v Couper [2010] VSC 601 (‘Reasons’) [339].
Alternatively, if the Proposed Uses condition was not satisfied prior to the settlement date, an option was granted under clause 7 of the Agreement allowing Simply to purchase the Apartment for $210,000 within two years after the settlement date (‘Option’). The terms of the Option were as follows:
7 Option to purchase the Apartment
7.1 Grant of Option
Subject to the Purchaser completing its purchase of the Apartment under the Apartment Contract, and in consideration of the [sum] of $1.00 (the ‘Option Fee’) now paid by Simply to the Purchaser (the receipt of which the Purchaser hereby acknowledges) the Purchaser irrevocably grants to … Simply an option (the ‘Option’) to purchase the Apartment from the Purchaser for the Apartment Purchase Price, and upon and subject to terms and conditions contained in … a contract of sale (‘Sale Contract’) to be prepared by the Purchaser’s solicitors … The Sale Contract shall provide that the Apartment Purchase Price is to be paid as to a 10% deposit on exercise of the Option and as to the balance 60 days thereafter.
7.2 Exercise of Option
The Option can be exercised at any time on any day during the period of time (the Option Period) commencing on the date of this Deed and ending at 5 pm on the second anniversary of the date on which the Purchaser becomes entitled to possession of the Apartment … under the Apartment Contract (the Expiration Time) by Simply delivering to the Purchaser:
7.2.1. written notice to that effect executed by or on behalf of … Simply (… the Exercise Notice); and
7.2.2. a cheque payable to the Purchaser’s solicitors named in the Sale Contract for the deposit …
…
7.7 No caveat
7.7.1Simply (for itself and its nominee) undertakes to the Purchaser that Simply must not lodge, cause or allow to be lodged at the Land Titles Office a caveat in respect of its interest in the Apartment created by this Clause 7 or otherwise until after registration of a mortgage over the titles to the Apartment given by the Purchaser in favour of its banker or financier to secure (amongst other things) funds provided for the purchase of the Apartment by the Purchaser.
7.7.2 Simply (for itself and its nominee) undertakes to the Purchaser that, if (after Simply or its nominee have lodged or caused or allowed to be lodged at the Land Title Office a caveat in respect of its interest in the Apartment created by this Clause 7 or otherwise) the Purchaser requests Simply (or its nominee) to consent to lodgment or registration of a mortgage over the titles to the Apartment, Simply will procure that the appropriate consent, acceptable to the Land Titles Office and the mortgagee, is given to the Purchaser within 3 days after a written request is made for it.
7.8 Consequences of caveat
If Simply (or its nominee) breaches Clause 7.7, then the Option lapses on the date that the caveat is lodged at the Land Titles Office or (in the case of a request under Clause 7.7.2) at 9 am on the day that is the fourth day after the request is given to Simply.
The apartment purchase price was defined in clause 1.2 of the Agreement as follows:
‘Apartment Purchase Price’ means:
1.2.1.if by the Expiration Time, the Market Land cannot be lawfully used for the Proposed Uses, $210,000.00; or
1.2.2.if by the Expiration Time, the Market Land can be lawfully used for the Proposed Uses, the lesser of:
1.2.2.1.$210,000.00; or
1.2.2.2.the sum of:
1.2.2.2.1.$10,000.00; plus
1.2.2.2.2.all monies spent, and expenses incurred, by the Purchaser for Consultants (including expenses and disbursements charged by the Consultants) in relation to the matters referred to in Clauses 6.1.1 and 6.1.2 hereof;
Simply did not exercise the Option within the required time. Thus it lapsed on 9 July 2001, depriving Simply of the opportunity to re-purchase the Apartment for, at most, $210,000. At the time of the judgment below, the Apartment had been valued at $925,000.[4]
[4]The trial judge held that after allowing appropriate deductions, Simply’s loss would have amounted to $575,000, if its claim had succeeded. This finding was challenged by ground of appeal 12.
Events prior to engagement of Riordans on 19 March 2001
In considering whether the appellant’s claim was made out, his Honour had to take account of the events which occurred before Riordans began to act for the Mahers and after Riordans were retained by Simply. The relevant facts are set out in paragraphs [35] to [132] of his reasons, and it is unnecessary to recapitulate them in detail.
The Maher Group engaged Mr Issac Brott as their solicitor in January 1999. Mr Brott introduced the Mahers to Myer Herszberg and Moishe Gordon, the directors of Millennium.[5]
[5]Reasons [12].
Shortly after the execution of the Agreement on 16 March 1999, a dispute arose between the Mahers and Millennium as to whether the Proposed Uses condition had been satisfied.
As discussed at paragraph [13] above, Justice Maher had amended the definition of ‘Proposed Uses’ to reflect the manner in which the Market Land was being used at the time.[6]
[6]Ibid [280].
Between 16 March (the date of the Agreement) and 9 July 1999 (the date of settlement), Justice Maher obtained advice confirming his view that the Proposed Uses condition would be satisfied by the uses of the land which Millennium contemplated. His Honour described his evidence to that effect as follows:
Justice Maher said that the amended definition of ‘Proposed Uses’ was acceptable to him and the Maher Group because it reflected the manner in which the Market Land was being used at the time that the Agreement was executed. He was confident that, at that time, the Market Land was being used as factory retailing outlets, a fruit and produce market, and a trash and treasure market, and that such uses were in accordance with the Council permits. Accordingly, he was confident that the Proposed Uses condition was satisfied when the Agreement was signed, and that, in accordance with c1 3 of the Agreement, the contract of sale of the Apartment would be cancelled and the Apartment would be re-transferred to Simply.
Justice Maher said that, between 16 March 1999 and 19 March 2004, he never had a shadow of doubt that the Proposed Uses could be satisfied.
Justice Maher said that, between March and July 1999, he obtained advice over the telephone from Mr Kamenev[7] about the dispute between the Maher Group and Millennium regarding the Proposed Uses condition. Mr Kamenev’s advice was consistent with his own view about what could be done under the existing permits for the Market Land. On 21 March 1999, he spoke to Mark Bernhardt, a former officer of the Council, who confirmed that the Proposed Uses could be, and were, satisfied.
Justice Maher said that, at about the time the Agreement was signed, he and Mr Brott spoke to Graeme Peake of counsel about the Proposed Uses. Mr Brott spoke to Mr Peake again and subsequently informed Justice Maher that Mr Peake had said that the Proposed Uses were met.
Justice Maher said that, prior to the meeting with Mr Curtain on 9 May 2001, Margaret Blackney - who had been a planning officer at the Council in 1999 - had told him that the Proposed Uses had been satisfied.
Surprisingly, Justice Maher said that, on 9 May 2001, he informed Mr Curtain that the Proposed Uses could not be achieved because the Maher Group had not obtained a new permit.[8]
[7]Alex Kamenev was an external town planning adviser used by the Maher Group: ibid [278].
[8]Ibid [280]-[285].
On 28 March 1999, Justice Maher had written to the City of Whittlesea (‘Council’) on BAWM letterhead advising it of proposed renovations to properties on the Market Land and seeking confirmation that this was permitted by the existing planning permit. The Council advised him that BAWM was required to lodge a plan setting out proposed changes.[9]
[9]Ibid [38].
On 30 April 1999, BAWM lodged amended plans and an application for a planning permit. The Council advised in early May 1999 that the application could not be processed until an application fee of $280 was paid. Justice Maher asked the Millennium Group to pay the fee, but Mr Gordon refused to do so.[10] As a consequence, the application was never processed.
[10]Ibid [39].
Prior to settlement, Mr Brott wrote to Graeme Efron of Efron & Associates (who was acting for the Millennium Group in relation to the Agreement) on two occasions asserting that Proposed Uses condition had been ‘satisfied in full’. Mr Efron had replied to his first letter indicating that there was insufficient evidence to that effect.[11]
[11]Ibid [40].
On 8 July 1999, a new Whittlesea Planning Scheme came into operation, which had the effect of including a ‘trash and treasure market’ in the definition of ‘Market’ and changing the zoning of the Market Land from ‘Reserved Light Industrial Zone’ to ‘Industrial Zone’.[12]
[12]Ibid [41].
When settlement occurred on 9 July 1999, Mr Brott again wrote to Mr Efron asserting that the Proposed Uses condition had been satisfied and that Millennium had wrongly refused to cancel the contract of sale relating to the Apartment. He later sent another letter to Mr Herszberg making similar assertions.[13]
[13]Ibid [40].
On 2 September 1999, Mr Brott lodged a caveat in his own name claiming a fee simple interest in the Apartment, on the instructions of Justice Maher. Eighty Sixth Eternity Pty Ltd was later substituted as caveator.[14]
[14]Ibid [43], [45].
In his reasons, the trial judge said that:
According to the evidence of Patricia Maher, prior to lodging the caveat, Mr Brott warned her that the lodgement of the caveat would cause the Option to lapse. She said that Mr Brott did not want to lodge the caveat, but that she insisted that he do so. Justice Maher’s evidence was that Mr Brott never advised him that the lodgement of the caveat would cause the Option to lapse.[15]
[15]Ibid [46].
Subsequently, the Maher Group obtained advice from a number of different people related to the effect of the Proposed Uses condition. In mid October 1999, Patricia Maher engaged Kim Whitby of McKean & Park to provide independent advice regarding Mr Brott’s handling of the dispute with Millennium.[16] According to Mr Whitby’s file note of 21 October 1999, at a conference with Patricia Maher, she said that she wanted him to brief counsel to ascertain whether or not she could take action against Millennium and ‘the likelihood of success’. She said she wanted a second opinion on that issue.
[16]Ibid [47].
On 25 October 1999, Mr Brott wrote to Patricia Maher advising that he was ‘of the view that the purchasers have acted improperly and, further, that you would certainly be successful in litigation’.[17]
[17]Ibid [49]
On 9 November 1999, the Mahers attended a conference with Mr Whitby and Nick Jones of counsel. During that meeting, both Mr Whitby and Mr Jones advised that they considered on the balance of probabilities that any court would find that the Proposed Uses condition had been met and the Apartment should have been reconveyed to the Mahers.[18]
[18]Ibid [50].
Mr Jones suggested that the Mahers should seek clarification from the Council that the Proposed Uses were permitted, and on 10 November 1999, settled a letter drafted by Justice Maher on behalf of BAWM to the Council.[19]
[19]Ibid [50]-[51].
On 23 November 1999, the Council responded by a letter addressed to Justice Maher. The contents of that letter were described by the trial judge as follows:
(a) The permit for the Market Land authorised the use ‘Trash and Treasure Market’, which was defined as ‘land where vendors of goods temporarily occupy an area or stall for a fee.’
(b) Under the new Whittlesea Planning Scheme, which was approved on 8 July 1999, the Market Land was zoned ‘Industrial 1’, but ‘the permit allows a Trash and Treasure market only and all goods sold must conform to this primary use.’
(c) Retail sales of trash and treasure items are allowed from the market stalls.
(d)The endorsed plan for the Market Land limits the areas where fruit and produce can be sold. In general terms, fruit and produce are food items, rather than trash and treasure items.
(e) The term ‘wholesale’ means the sale of goods and materials to be sold by retail. This generally implies that goods are sold in quantities which exceed what could be stored in a temporary stall. Although the wholesale of trash and treasure items is not prevented, it was not anticipated as being possible from the stalls shown on the approved plan.[20]
[20]Ibid [52].
On the basis of the Council’s response, on 26 November 1999, Mr Whitby told Justice Maher that the Proposed Uses condition had been satisfied.[21] On 30 November 1999, Mr Whitby confirmed this advice in a letter to Patricia Maher writing, stating that:
We…believe that provided no permanent structure is erected inside the trash and treasure market then all of the purposes outlined can be met. It is our view therefore that the refusal of purchasers to return your property [to] you is a breach of contract and that you should be in a position to take legal proceedings successfully against them.
We would however suggest that the independent opinion of a Town and Country Planning expert be obtained. It will be necessary in the future that such expert advice be given to the Court in the event that you proceed with proceedings. The Court will have to be satisfied that under the normal course of events the Plaintiffs would have been able to use the premises for the use which you agreed could be done. Therefore expert advice should be obtained and you should be prepared to call the Planning Officers from the relevant Council to establish that they would have no objection to the uses as anticipated by the contract.
Under the circumstances we believe our Retainer is complete as you really wished a second opinion as to whether or not you should proceed with this matter.[22]
[21]Ibid [53].
[22]Ibid [54].
In the same letter, Mr Whitby advised Mrs Maher to ask Mr Brott to take proceedings to enforce the contract or seek damages for breach. Mr Brott later received instructions to do so.
Justice Maher gave evidence that in May 2000, he had told Mr Brott that he was concerned that time was running out for the exercise of the Option, but was advised by Mr Brott that the Mahers did not need to pay to get back the Apartment.[23]
[23]Ibid [57].
Some time in 2000, Mr Herszberg and Mr Gordon had a falling out. Mr Herszberg (and his associated companies) retained the Market Land, while Mr Gordon (and his associated companies) retained all the other Security Properties. Millennium, which came to be controlled by Mr Gordon, continued to own the Apartment.[24]
[24]Ibid [60].
On 30 June 2000, Mr Brott briefed Daryl Dealehr of counsel, who advised in conference that the Mahers had a good case for specific performance of clause 3 of the Agreement, and prepared a draft statement of claim.[25] However, no action was ever commenced.
[25]Ibid [61].
Mr Brott continued to advise the Mahers that they could take proceedings against Millennium.
In February 2001, the Mahers terminated Mr Brott’s retainer and engaged Bernard Balmer of Balmer & Associates Pty Ltd.[26]
[26]Ibid [65].
Patricia Maher attended a conference with Laurence Maher of counsel, who provided a short memorandum saying that it would be desirable to obtain expert planning advice. He said that:
Accordingly my impression is that Mrs Maher could easily spend $5,000‑$6,000 on an investigation of the liability issue without any assurance that would lead to advice that she had a good arguable case.[27]
[27]Ibid [66].
On around 9 May 2001, Margaret Blackney, who had been a planning officer at the Council in 1999, told Justice Maher that the Proposed Uses Conditions had been satisfied.[28]
[28]Ibid [284].
Patricia Maher approached Riordans to act for the Mahers in March 2001.
As I have said, his Honour held that Riordans had breached its retainer and tort duty, by failing to advise Simply on the comparative advantages and disadvantages of taking proceedings to enforce clause 3 of the Agreement or exercising the Option under clause 7 of the Agreement. Since the question for resolution is whether that breach was the cause of any loss, it is only necessary to consider the evidence relating to the Simply’s failure to exercise the Option in clause 7.
Before turning to that issue, I briefly refer to two other matters. First, on 21 December 2001, Riordans commenced proceedings on behalf of the Mahers, Simply, Eternity, BAWM and Pamah Pty Ltd against Mr Brott, Millennium, Mr Herszberg and Mr Gordon (‘the earlier proceeding’). The principal claim in the proceeding was against Mr Brott ― it was alleged that Mr Brott had breached his retainer, and his duty of care in relation to the execution of the Agreement and the sale of the Apartment. It was further alleged that Mr Brott had breached his fiduciary duty by accepting a procurement fee from Mr Herszberg.[29]
[29]Ibid [105]-[107].
A claim was made against Millennium for knowing participation in Mr Brott’s breach of fiduciary duty. It was also alleged that Millennium had demanded the transfer of the Apartment in circumstances amounting to economic duress, unconscionable dealing and a breach of s 51AA of the Trade Practices Act 1974 (Cth).[30]
[30]Ibid [107].
The Mahers (and other plaintiffs) sought (inter alia) an order setting aside the transfer of the Apartment from Simply to Millennium and an order requiring Mr Brott to repay the procurement fee. Millennium initiated a counterclaim against Patricia Maher for possession of the Apartment.[31]
[31]Ibid [108].
On 8 August 2002, Mr Gordon offered to settle the proceedings by giving Patricia Maher a life tenancy in the Apartment, but she declined to settle ‘for less than the ownership of the Apartment’.[32]
[32]Ibid [111].
On 12 March 2003, a mediation was held in relation to the earlier proceeding, and various counter offers were made by Patricia and Justice Maher and by representatives of Millennium and Mr Brott’s professional indemnity insurer. An offer was made on behalf of Mr Brott’s insurer to pay the plaintiffs $150,000 in relation to their claims against him (except the claim relating to the procurement fee[33]), and Millennium offered to sell the Apartment to the plaintiffs for $400,000.
[33]Mr Brott was uninsured with respect to this aspect of the claim against him.
The trial judge in the current proceedings held that the combined effect of the above offers made on behalf of Mr Brott and Millennium was that Simply would be given an opportunity to purchase the Apartment for an outlay of $250,000.[34] However, these offers were rejected by the Mahers.
[34]Reasons [113].
The Mahers made a counter-offer that Millennium transfer the Apartment to them for nil consideration and that it pay to them $190,000. Millennium rejected this counter-offer.[35]
[35]Ibid [115].
Millennium then offered Patricia Maher a life tenancy in the Apartment for the sum of $100,000. The offer of $150,000 from Mr Brott’s insurer also remained open.[36] At the end of the mediation, it was made clear to the Mahers that the initial joint offer remained open for acceptance.[37] Mrs Maher also declined subsequent offers made by Millennium.
[36]Ibid [116].
[37]Ibid [117].
On 20 May 2004, Osborn J handed down judgment upholding the fee claim against Mr Brott and ordering that (among other things) Mrs Maher deliver possession of the Apartment to Millennium.[38] His Honour held that the existing permits held for the Market Land did not permit the Proposed Uses to be conducted lawfully on 9 July 2010.[39]
[38]Maher v Millennium Markets [2004] VSC 174.
[39]Reasons [123].
Mr Brott appealed to this Court against the orders made against him and the plaintiffs in the earlier proceeding cross-appealed against Osborn J’s judgment, so far as it related to orders made in favour of Millennium. That cross-appeal was discontinued on 5 October 2004. However, on 11 November 2004, all outstanding claims between the Maher Group and Millennium were settled by deed. The deed of settlement provided that:
(a)the plaintiffs in the [earlier] proceeding agreed to pay to Mr Gordon the amount of $150,000 and to assign to him the amount of $170,000 out of the judgment for $192,290 that they were awarded as against Mr Brott;
(b)Millennium agreed to grant to Patricia Maher a licence to occupy the Apartment rent free until 11 November 2014 or the date that she ceases to reside there or the date of her death, whichever occurs first; and
(c)the parties agreed to mutually release each other of all liabilities, including all orders made in the prior proceeding.[40]
[40]Ibid [131].
On 8 December 2004, Mr Brott’s appeal to the Court of Appeal was dismissed with costs, and special leave to appeal to the High Court was refused.
The Maher Group terminated Riordans retainer on 9 August 2004. The proceedings against Riordans to which this appeal relates were initiated on 5 July 2007 by a generally endorsed writ, which was served in July 2008 and a statement of claim was filed and served in August 2008.
The trial judge’s reasons on causation
The trial judge found that neither Patricia nor Justice Maher were witnesses of truth. In the case of Patricia Maher, there were glaring inconsistencies between the evidence she gave in the earlier proceeding ― in which it was in the interest of the Maher Group to blame Mr Brott and the other defendants for their loss ― and in the current proceeding, in which she blamed Riordans for the failure to recover the Apartment. His Honour said that he:
would not accept her evidence on any material issue unless it was supported by contemporaneous records or other objective evidence.[41]
[41]Ibid [144]
His Honour took a similar view of Justice Maher’s evidence.
By contrast, his Honour found that Mr Curtain of Riordans was ‘a refreshingly honest witness who gave evidence to the best of his recollection irrespective of any consideration of whether it would assist Riordans’ case’.[42]
[42]Ibid [153].
As I have said, his Honour held that Riordans’ breach of its retainer and tort duty did not cause any loss suffered by Simply. His reasons for that conclusion were as follows.
First, until well after the date that the Option expired, Patricia and Justice Maher held an ‘unshakeable view’ that the Proposed Uses condition had been satisfied and that Simply was, accordingly, entitled to the re-transfer of the Apartment for nil consideration under clause 3 of the Agreement.[43]
[43]Ibid [303]. This conclusion is reinforced by the fact that the Mahers refused to brief counsel with planning expertise to confirm their opinion: [307].
Patricia Maher, who acknowledged she had considerable experience in buying and selling land, gave evidence that she was convinced that the Proposed Uses condition was satisfied when the Agreement was signed. She also said that both she and Justice were of the view that the new Whittlesea Planning Scheme which came into effect on 8 July 1999 ensured that the actual uses of the Market Land conformed with the Proposed Uses.
Justice Maher also had experience in buying and selling land and was confident when the Agreement was signed that the Proposed Uses condition was satisfied. That view was reinforced by advice which the Mahers received from Alex Kamenev, Mark Bernhardt, Graham Peake of counsel, Margaret Blackney, Issac Brott, Nick Jones, Kim Whitby and Daryl Dealehr.[44]
[44]Ibid [303].
Because of their ‘unshakeable belief’ that the Proposed Uses condition had been satisfied, both Patricia and Justice Maher had refused to brief counsel with planning expertise, although they had been advised to do so by Mr Whitby on 30 November and by Mr Laurence Maher on 1 March 2001. On 13 June 2001, Patricia Maher had refused the request of Mr Curtain of Riordans to do so.
Secondly, Patricia Maher was ‘convinced’ that Millennium would ‘give back’ the Apartment for nil consideration. Patricia Maher told Mr Curtain this on three occasions while Riordans was acting for the Mahers and instructed him to write letters to Millennium, Mr Efron and Richard Szental (who acted for Mr Herszberg) to that effect.[45]
[45]Ibid [309].
Thirdly, Patricia and Justice Maher knew that the Option was available to be exercised.[46] However, they believed that the most cost effective way to recover the Apartment was to institute proceedings to enforce clause 3 if, contrary to their expectation, Millennium refused to re-transfer it.[47] In September 1999, the Mahers instructed Mr Brott to lodge a caveat over the title to the Apartment, despite Patricia Maher having been advised that this would cause the Option to lapse. This readiness to forgo the Option was consistent with the conclusion that the Mahers regarded the Apartment as rightfully theirs and had no intention of paying anything to re-acquire it.[48]
[46]Ibid [302].
[47]Ibid [304].
[48]Ibid [340].
Fourthly, the Maher Group’s strategy for re-acquiring the Apartment was settled before they engaged Riordans, from whom they sought advice about the merits of commencing proceedings against Millennium.[49] Mr Curtain of Riordans mentioned the Option on two occasions[50] and, on his own initiative, gave written advice on 19 June 2001 about the difficulties with the Mahers’ view that the Proposed Uses had been satisfied. Patricia and Justice Maher ‘brushed aside’ and ‘ignored’ this advice because it was contrary to their ‘firmly held views’.[51]
[49]Ibid [315(d)].
[50]Ibid [301].
[51]Ibid [306], [315(e)].
Fifthly, the trial judge accepted Mr Curtain’s evidence that the Mahers had never sought advice on the Option.[52] He rejected Patricia and Justice Maher’s evidence[53] that, as the date for the Option approached they had sought advice from Mr Curtain as to whether they should exercise it. His Honour pointed out that Justice Maher’s evidence that he had told Mr Curtain that the Proposed Uses condition could not be achieved because the Maher Group had not obtained a planning permit was inconsistent with his evidence acknowledging that, in June 2001, he was not interested in Mr Curtain’s advice about the Proposed Uses because he had plenty of advice from other people that the condition was satisfied.[54] The judge considered that Justice’s evidence of what he had told Mr Curtain was a recent invention designed to shore up the case against Riordans.
[52]Ibid [315(f)].
[53]Ibid [275] and [289].
[54]Ibid [305].
Finally, the judge took account of events which occurred after the date for exercise of the Option had expired. These events included the fact that:
·when Patricia Maher phoned Mr Curtain on 23 July 2001 about another matter, she did not raise any issues about the Option or his failure to advise about exercising it;
·within 5 weeks of the Option expiring, Patricia Maher told Mr Curtain on two occasions that she was not prepared to pay $250,000 or $210,000 to purchase the Apartment. On two other occasions, she told him that she wanted to acquire it without any payment;
·when the mediation of the earlier proceeding occurred, the Mahers had been advised of the difficulties in attempting to enforce clause 3 of the Agreement. The fact that they rejected the various offers made to them in the context of settlement negotiations supported the view that they would not have exercised the Option which required them to pay $210,000 to acquire the Apartment.
His Honour concluded that:
The simple fact of the matter is that Patricia and Justice Maher made a commercial decision not to spend $210,000 to re-acquire the Apartment pursuant to the Option based on their own assessment of the prospects of ‘getting back’ the Apartment without paying anything for it. Riordans played no part in that assessment. The Mahers were not relying on Mr Curtain for any advice about the exercise of the Option because they had decided not to exercise it long before they engaged him. They were also not relying on Mr Curtain for advice about whether the Proposed Uses condition was satisfied. Indeed, when he volunteered such advice, they brushed it aside. If Mr Curtain had provided advice to the Maher Group… they would not have altered their chosen course.[55]
[55]Ibid [357].
Accordingly, the breaches did not cause any loss to Simply because ‘Simply had no intention of exercising its rights under the Option and … its position would not have changed if Riordans had not breached their retainer and tort duty’.[56]
[56]Ibid [347].
On the basis that a party in breach of a contract is liable to pay at least nominal damages, even if the breach has not caused any loss, Simply was awarded nominal damages of $1 for Riordans’ breach of their retainer.[57]
[57]Ibid [402]-[403].
Grounds of appeal
The grounds of appeal were unnecessarily lengthy and confusing. They were as follows.
1. The learned trial judge erred in giving too much weight to the influence of earlier advice received by the Appellant prior to the engagement by the Appellant of the Respondents as its solicitors about its legal rights under the Agreement dated 16 March 1999 (‘the Agreement’).
2. The learned trial judge erred in not giving greater regard to the need for solicitors advising the Appellant to take account of the three ways in which the Agreement enabled ownership of the Apartment to be acquired by the Appellant.
3. The learned trial judge erred in not considering that an experienced litigation solicitor would have not only advised the Appellant on the courses of action available to the Appellant to acquire ownership of the Apartment under the Agreement, including by exercise of the option under the Agreement (‘the Option’), but also about the potential costs of litigation as opposed to the cost of exercising the Option in terms that the Appellant could have made a fully informed decision as to which course of action it should adopt.
4. The learned trial judge erred in not giving more weight to the need for an experienced solicitor to advise as to the possibility that the Appellant could both exercise the Option and also pursue litigation to recover damages from Millennium…
5. The learned trial judge erred in placing as much weight as he did on conduct after 9 July 2001 (the date for exercise of the Option) by the Appellant and its directors Mrs Patricia Maher and Mr Justice Maher as informing the Court as to what the Appellant would have done had it received legal advice prior to 9 July 2011 in accordance with the Respondents’ duty to advise as articulated by his Honour at paragraph [234] of his Honour’s reasons for decision dated 17 December 2010.
6. The learned trial judge erred in considering conduct after 27 September 2001 (the date of written advice from Mr Peter Riordan of counsel) with respect to the non reliance of the Appellant on the advice of the Respondents received prior to 9 July 2001 since Mr Riordan clearly advised the Appellant that the Option was not available to be exercised by the Appellant.
7. The learned trial judge erred in inferring that the Appellant would not have accepted the advice of the Respondents received prior to 9 July 2001 at all even if the advice had been given in accordance with the scope of their retainer and their duty to advise.
8. The learned trial judge erred in not correctly applying the principles of assessment of damages for loss of opportunity and should have valued the loss of opportunity incurred by the breach of retainer found by his Honour.
9. The learned trial judge erred in not valuing the likelihood that the appellants may have exercised the Option had it had received appropriate legal advice in accordance with the Retainer.
10. The learned trial judge erred in not valuing the loss of opportunity on the balance of probabilities instead of wholly dismissing it.
11. The learned trial judge erred in assessing the damages in the nominal amount of $1.00 for the Respondents’ breach of their retainer with the appellant.
12. The learned trial judge erred in notionally assessing the damages at $575,070.00 where he found that the Respondents had breached their retainer with, and their duty to advise, the appellant, by not including in the assessment further amounts totalling $330,375.54.
In essence, these grounds raise only two issues. The first is whether his Honour wrongly found that Simply would not have acted differently even if it had been advised by Riordans of the costs and benefits of exercising the Option. The second is whether, assuming that the judge’s causation finding was incorrect, he erred in assessing the amount of damages payable for breach of the tort duty and breach of the retainer.
Was the judge’s causation finding correct?
Grounds 1 to 4 and 7 to 11
Under cover of grounds 1 to 4, Simply contends that the judge gave too much weight to the influence of the advice which it received before it sought advice from Riordans. Simply submits that it did not receive appropriate advice about the benefits of exercising the Option from either Mr Brott or Mr Whitby. The advice given by Mr Brott ‘lacked sufficient depth and rigour’ to enable Simply to evaluate the course it should take and Mr Whitby’s retainer was limited to advising Simply whether it should continue its engagement of Mr Brott, and did not extend to a ‘detailed analysis’ of options available to it under the Agreement.
Having regard to the nature of that earlier advice (and the inadequacy of Mr Brott’s advice), Riordans should have carefully explained the courses of action available to Simply, which included taking proceedings to enforce clause 3, which would involve litigation costs, or exercising the Option to re-purchase the flat for $210,000. Simply alleges that it was Riordans’ failure to do so which had caused its loss.
The appellant further contends that his Honour’s conclusion that the Mahers did not seek Riordans’ advice regarding the Option is ‘contrary to the reason for the Mahers terminating Brott’s retainer. It was clear that the Mahers no longer trusted Brott once they knew of his personal relationship with one of the potential defendants (Herszberg) and that he was not prepared to sue Herszberg’.
In response, the respondents contend that the inadequacy of earlier advice by Mr Brott and/or Mr Whitby was not a matter pleaded or argued at trial (but was only raised during Simply’s counsel’s final address) and the appellant should not be able to rely on an allegation that Simply had previously received inadequate advice from Mr Brott, or advice not directed to the exercise of the Option from Mr Whitby, in support of its appeal.
Ground 7 complains that the judge incorrectly inferred that, even if Riordans had advised the Mahers about the risks of attempting to enforce clause 3 and the benefits of exercising the Option, they would not have done the latter. In support of that ground, Simply complains that the trial judge ‘avoided dealing with the question of what would the Mahers have done had they received correct advice’.
In support of grounds 8 and 10, the appellant contends that having found that Riordans’ advice breached the retainer, the trial judge should have addressed the question of causation in two stages. The judge should have asked himself whether Simply had the opportunity to exercise the Option and should then have considered whether, if properly advised, it would have exercised that Option. The evidence raised a strong inference that it would be ‘the commercially sensible decision to exercise such the Option’ and it would require strong evidence to displace that inference. In support of ground 9, the appellant contends that his Honour should have considered what a prudent client would have done if it had received appropriate advice about the merits of attempting to enforce clause 3 to the exclusion of exercising its right to exercise the Option.
Finally, under cover of ground 11, the appellant argues that having found that Riordans breached its retainer, the judge should have awarded damages for the loss of opportunity to exercise the Option.
Conclusion on grounds 1 to 4 and 7 to 11
Grounds of appeal 1, 2 and 4 and the appellant’s related submissions complain of the ‘lack of weight’ which the judge gave to certain matters. This is a peculiar way of challenging the trial judge’s causation finding. The question of ‘weight’ may be relevant to the question whether Riordans breached its retainer and/or tort duty. But that is not the issue which arises in this appeal.
Where multiple factors contribute to a loss suffered by a plaintiff, the question whether the loss was caused by a defendant’s negligence is a mixed issue of fact and law. Such is the case, for example, where a plaintiff lends money on the security of property based on a negligent over-valuation, but the value of the land is further reduced by the acts of a third party.[58]
[58]See for example Henville v Walker (2001) 206 CLR 459 (property purchased on basis of negligent advice as to value, but further loss caused by architects undervaluation of building costs); Hay Property Consultants Pty Ltd v Victorian Securities Corporation Ltd [2010] VSCA 247.
This is not such a case. The question which the trial judge had to resolve was one of fact. It was whether Simply would have exercised the Option if it had been properly advised by Riordans. As Hayne J said in Chappel v Hart:[59]
the resolution of the question of causation will often be asserted without lengthy articulation of reasons. Since it is a question of fact resolved as a matter of commonsense and experience, the conclusion is often reached intuitively.[60]
[59](1998) 195 CLR 232.
[60]Ibid 290, [148].
Simply bore the onus of establishing that it would have exercised the Option but for Riordans’ negligent advice.[61] The question for resolution by this Court is whether it was open on the evidence for his Honour to reach the conclusion that he did.
[61]In the case of medical negligence, once a plaintiff establishes a breach of a duty to warn of the risk of injury, the evidentiary onus shifts to the appellant to identify evidence showing a lack of causal connection between the breach of duty and the harm suffered: see Chappel v Hart (1998) 195 CLR 232, 247-8, [34] (McHugh J) followed in Hookey v Paterno [2009] VSCA 48 [121] (Nettle and Redlich JJA), [336] (Neave JA); Zaltron v Raptis [2001] SASC 209, [79]-[87]. There is no authority on whether this principle applies to negligent advice and, in any case, it was not relied upon by the appellant.
Contrary to the allegation in grounds of appeal 8 and 10, the trial judge applied the correct test in deciding whether the Riordans’ breach of retainer caused the loss suffered by Simply. The judge was entitled to take account of objective circumstances in reaching a conclusion on that issue, including the fact that it would have been a commercially sensible decision for Simply to exercise the Option in return for the payment of $210,000 and that a prudent client who had received appropriate advice might well have decided to do so.
However, ultimately the question of causation cannot be resolved by applying an objective test as to what a prudent client would have done if properly advised. Rather, it turns on the judge’s conclusion as to the subjective state of mind of the Mahers.[62] Simply had to satisfy the trial judge that it would have exercised the Option by paying $210,000 to recover the Apartment, if it had received more comprehensive advice. It did not do so.
[62]Gore v Montague Mining Pty Ltd [2000] FCA 1214, [38].
The fact that Simply had previously received advice from other solicitors or town planners which supported Justice Maher’s view that the Proposed Uses condition had been satisfied was a relevant factor in deciding whether Simply had discharged the onus of proving it would have acted differently if it had received appropriate advice. But the judge also had to take account of Mr Curtain’s evidence and file notes about the matters on which the Mahers sought advice, the Mahers’ response to his suggestion that they might consider exercising the Option and the credibility of the Mahers’ evidence that if they had been advised of the advantages of exercising the Option, whilst at the same time seeking to enforce clause 3 of the Agreement, they would have done so.
Even if his Honour had accepted that, by the time they gave their evidence, the Mahers believed that Simply would have exercised the Option if Riordans had advised differently, it would have been open to his Honour to conclude that their evidence to this effect was affected by hindsight bias.[63] As Selway J remarked in Deloitte Touche Tohmatsu v Cridlands Pty Ltd:[64]
It is not evidence of what occurred; it is ‘counter factual’ evidence of what would have occurred if something that did not happen (in this case, advice that if the sale contract was terminated the deposit was repayable) had happened. As Lindgren J remarked in Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd(No 32),[65] ‘the self-serving nature of the evidence and the ‘benefit of hindsight’ factor must be taken into account.’ His Honour drew attention to the need to look to the surrounding circumstances in order to determine what weight should be given to the relevant evidence. In this regard I also note the comments of the High Court in Rosenberg v Percival.[66]
[63]For discussion of this issue in the context of causation following a failure to warn of the risks of undergoing a medical procedure, see Chappel v Hart (1998) 195 CLR 232, 272 (Kirby J).
[64](2003) 134 FCR 474, 514-5, [161].
[65](1996) 136 ALR 627, 630.
[66](2001) 205 CLR 434.
In any case, his Honour did not regard the Mahers as credible witnesses. Appellate courts have consistently recognised the advantages which a trial judge has in making findings of fact, particularly when the credibility of the parties is in issue at the trial, although this does not relieve an appellate court from considering whether those findings were correct. In Fox v Percy,[67] Gleeson CJ, Gummow and Kirby JJ said that:
In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge’s conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.[68]
[67](2003) 214 CLR 118, 128.
[68]Reasons [28].
The evidence on which the trial judge relied in support of his conclusion is set out above and it is unnecessary to repeat it. His Honour rejected the Mahers’ evidence that as the closing date for the exercise of the Option approached, they had sought advice from Mr Curtain as to whether Simply should exercise it. That evidence was inconsistent with the evidence which Mrs Maher gave in the earlier proceedings and with the conduct of the Mahers prior to the expiry of the Option.
In light of the evidence as a whole, his Honour’s finding was well open to him. It was neither ‘glaringly improbable ‘ nor contrary to compelling inferences.
Accordingly, grounds 1 to 4 and 7 to 10 must fail.
Because the appellant did not establish that its loss was caused by breach of retainer or breach of Riordans’ tort duty, it was entitled only to nominal damages for breach of contract.[69] Thus, ground 11 also fails.
[69]Chappel v Hart (1998)195 CLR 232, 290, [149] (Hayne J).
Grounds 5 and 6
In support of these grounds of appeal, Simply argued that in considering whether Riordans’ breach had caused its loss, the trial judge ‘gave too much weight’ to events which occurred after the Option had expired, including the conduct of the Mahers after 9 July 2000 and the advice of Peter Riordan on 27 September 2001 that they had lost the benefit of the Option because Mr Brott had lodged a caveat, in breach of clause 7.7.2 of the Agreement.
As a matter of logic, events occurring after Simply failed to exercise the Option might not, standing alone, be sufficient evidence of the Mahers’ state of mind prior to the date of its expiry. His Honour recognised that this was the case when he said that:
Reliance on a party’s conduct after an event for the purpose of determining its state of mind prior to that event will often be fraught with danger. One needs to avoid speculation and conjecture. While bearing these considerations in mind, in my opinion, in the circumstances of this case, the events that occurred after 9 July 2001 are informative of Simply’s intentions prior to that date.[70]
[70]Reasons [348].
It was not an error for his Honour to rely on events occurring after the Option came to an end as evidence from which Simply’s state of mind prior to the expiry of the Option could be inferred. His Honour referred to subsequent events for the purpose of evaluating the credibility of the Mahers’ evidence that Simply would have exercised the Option if Riordans had not breached its retainer and its tort duty.
In my view, he was entitled to do so. The Mahers’ failure to complain to Riordans immediately after the Option expired supports the inference that the Mahers’ claim that Simply had not exercised their Option because of Riordans failure to advise on this issue was a response to their realisation that they could not succeed in enforcing clause 3 of the Agreement against Millennium.
Peter Riordan was briefed on 27 September 2001 to provide advice about commencing proceedings against Millennium. He advised the Mahers that experts might disagree on whether the Proposed Uses condition had been fulfilled and whether the Market Land could be leased. He also advised them that the filing of the caveat by Mr Brott had resulted in the loss of opportunity to exercise the Option to buy the Apartment for $210,000. They had received similar advice from Mr Brott that the caveat had this effect prior to the expiry of the Option.[71]
[71]Ibid [46]. See also Maher v Millennium Markets [2004] VSC 174, [255]-[257] where Osborn J held that the caveat was lodged in accordance with the express instructions of Patricia Maher. His Honour was not satisfied that Mr Brott had failed to warn the Mahers that lodging of the caveat might result in loss of the benefit of the Option.
His Honour referred to Mr Riordan’s advice for two purposes. The first purpose was to assess the claim that Riordans had breached its retainer and tort duty. His Honour rejected Patricia and Justice Maher’s evidence that Mr Curtain had advised them that the lodging of the caveat had caused the Option to lapse. This was relevant in assessing whether Mr Curtain had, as the Mahers alleged, told them that ‘You must litigate because Brott’s caveat has negated the [Option] clause’.[72] His Honour said that the Mahers may have been confused because both Mr Brott and Mr Peter Riordan SC gave them advice to that effect.[73]
[72]Reasons [181].
[73]Ibid [212].
The second purpose was relevant to the issue of causation. In that context, his Honour observed that despite Mr Riordan’s advice, the Mahers had refused to settle their claim against Millennium. This was consistent with the Mahers having a firm belief of the likely success of Simply’s claim under clause 3. It therefore supports his Honour’s finding that the Mahers (particularly Patricia Maher) were so convinced that Simply’s clause 3 claim would succeed that they made a commercial decision not to pay $210,000 in order to exercise the Option.
As his Honour correctly observed:
It follows that, at the time of the mediation on 12 March 2003, Simply was aware not only of the risks of seeking relief under cl 3 of the Agreement, but also of the delays and the costs associated with litigation. By the time of the mediation, Simply was fully aware of the matters upon which Mr Curtain had failed to advise in June 2001. As discussed at [113] and [114] above, at the mediation, Simply rejected the First Joint Mediation Offer, which effectively gave it the opportunity to purchase the Apartment for a net outlay of $250,000. The fact that Simply rejected the First Joint Mediation Offer and made a counter-offer which involved a re-transfer of the Apartment for nil consideration supports my conclusion that, prior to 9 July 2001, Simply would not have paid any amount close to $210,000 for the Apartment, even if Mr Curtain had provided advice along the lines set out at [234] above.[74]
My conclusion is also supported by the fact that the Maher Group did not accept the $1 Plus Assignment Offer. It will be recalled from [118] above that, on 30 September 2003, Mr Gordon offered to return the Apartment for $1 provided that the Maher Group agreed that the Millennium Group could take over the Maher Group’s claims against Mr Brott and retain part of any amount that was recovered from him. Given that the Apartment was then worth approximately $650,000,[75] on 30 September 2003, the Maher Group let pass an opportunity to re-acquire for $1 a substantial asset that was also Patricia Maher’s long-standing home together with a share in the proceeds of the litigation against Mr Brott, the future costs of which would be borne partly by the Millennium Group. Although the $1 Plus Assignment Offer was not sufficiently certain to be capable of creating a binding contract upon its acceptance, the Maher Group did not act on the offer by seeking Riordans’ assistance in negotiating a binding settlement that included a transfer of the Apartment to Simply for $1.[76]
[74]Footnote 111 to this passages stated that: ‘As appears from [384] below, I have concluded that Simply’s rejection of the First Joint Mediation Offer did not constitute a failure to mitigate any loss it allegedly suffered as a result of Riordans’ breaches of their retainer arid tort duty. That is a different issue, however, from the issue of whether any inferences about Simply’s state of mind at an earlier time can be drawn from the rejection of the offer.’
[75]Patricia and Justice Maher gave evidence that, in July 2001, the Apartment was worth $650,000.
[76]Reasons [352] and [353].
These grounds of appeal also fail.
Grounds 12
My conclusion on the causation issue makes it strictly unnecessary to deal with ground 12, which complains of his Honour’s notional assessment of damages at $575,070. I will therefore discuss ground 12 only briefly.
His Honour’s assessment of damages was based on the following calculation:
(a) $925,000, representing the current value of the Apartment; less
(b) $210,000, representing the purchase price of the Apartment under the Option clause of the Agreement; less
(c) $130,000, representing borrowing costs on the amount of $210,000 for the period from 9 July 2001 until the date of judgment; less
(d) $9,930, representing conveyancing costs.
The appellant submits that if it is accepted that Riordans’ breach of retainer caused Simply’s loss, it should also be entitled to an award of damages for the costs incurred unnecessarily in the earlier proceedings. In its Amended Particulars of Loss and Damage, Simply claimed that if Riordans had advised it of its right to exercise the Option, it would not have incurred the various costs in relation to the earlier proceeding and Mr Brott’s subsequent appeal.[77]
[77]Plaintiff’s Amended Particulars of Loss and Damage.
The respondents submit that this claim was not pressed in final addresses. They also rely on the trial judge’s finding that:
the evidence overwhelmingly indicates that, if Simply had exercised the Option, it would also have instituted the [earlier] proceeding. The events that occurred following the commencement of the prior proceeding ― including the incurring of various costs ― were caused by the commencement of that proceeding and by the decisions that the Maher Group made in relation to that proceeding, and not by any antecedent breach of duty by Riordans.[78]
[78]Reasons [419].
Simply’s Amended Statement of Claim did not clearly allege that the advice by Riordans to institute the earlier proceeding was negligent and/or in breach of its retainer. The particulars to paragraph 32 which alleges that Riordans’ advice was ‘insufficient or incomplete or otherwise failed to properly advise’ focus mainly on the advice relating to the exercise of the Option.[79] However, (iii) of the particulars alleged that the advice given by Riordans:
did not deal sufficiently with the costs and risks of litigation against Millennium Markets and Brott as against or in addition to other alternatives including the exercise of the option.
[79]See Particulars of breach (i),(ii), (iv)to (viii).
I doubt whether the ‘amended particulars of loss or damage’, insofar as they relate to the incurring of costs in relation to the earlier proceeding and appeal, can be regarded as particulars of the loss caused by the breaches alleged in paragraph 32.
However, even if the Amended Statement of Claim was sufficiently broadly expressed to permit recovery for the loss claimed, there is no basis for overturning his Honour’s findings as to the extent of the loss suffered.
His Honour found that prior to July 2009, the Maher Group had decided that they should take steps to enforce clause 3 because they believed that the Proposed Uses condition had been satisfied and that the Mahers ‘were not interested in Mr Curtain’s advice in so far as it questioned their own firmly-held views about the Proposed Uses condition’.[80]
[80]Reasons [315].
That finding was based on his Honour’s acceptance of Mr Curtain’s evidence about the conversations he had with Patricia Maher before the Option expired. The evidence strongly supports the view that the Mahers believed they would succeed in enforcing clause 3, so that they could recover the Apartment for nil consideration. The Mahers commenced the earlier proceeding on 21 December 2001, although Peter Riordan had provided a memorandum of advice dated 27 September 2001 saying that experts might disagree about whether ‘factory retail outlets’ could be operated from the market stalls and whether leases could be granted of the Market Area. They also rejected the various settlement offers put to them during and after the attempt to mediate the earlier proceedings.
I therefore consider that his Honour correctly held that even if Simply suffered any loss as a result of Riordans’ breach, damages should be assessed at $575,070.
Accordingly, ground 12 fails.
It follows that the appeal should be dismissed.
HOLLINGWORTH AJA:
I agree with Neave JA.
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