Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd

The case of Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd involved a dispute between the plaintiff, Tasmanian Sandstone Quarries Pty Ltd (TSQ), and its former solicitor, the fourth defendant. TSQ sued the solicitor for failing to advise or arrange for a pre-settlement inspection of the business assets that TSQ had contracted to purchase. TSQ did not seek an assessment of the damages on the judgment it had obtained by default against the first defendant. TSQ settled its claims against the second and third defendants prior to trial. The court was required to determine several legal issues, including whether the consent judgment against the second and third defendants prevented TSQ from recovering damages against the fourth defendant. Additionally, the court had to decide the manner in which account should be taken of the settlement monies received by TSQ from the second and third defendants. The court also needed to ascertain whether the amendments to TSQ's statement of claim relating to the alleged breach of the common law duty of care should take effect from the date upon which TSQ instituted proceedings. Furthermore, the court had to determine whether the fourth defendant's omission to advise TSQ to arrange a pre-settlement inspection amounted to a breach of the contractual or common law duty of care. The court also had to decide whether the fourth defendant breached its duty by not arranging its own inspection of the assets before settlement. The court had to assess whether TSQ had suffered compensable loss or, alternatively, loss of a commercial opportunity, as a result of the breaches it alleged against the fourth defendant and, if so, the quantum of damages which should be awarded. The court also had to determine whether, had the fourth defendant provided the advice which TSQ claims, TSQ would not have suffered the losses alleged. Finally, the court had to determine whether TSQ had proved its claims of damage to and costs of repair of certain property and whether TSQ contributed to its own loss.

The court found that TSQ's settlement with the second and third defendants was not in full satisfaction of its overall claim of loss. Therefore, TSQ was not precluded from pursuing its claim against the fourth defendant. The court held that the amendments to TSQ's statement of claim should take effect from the date upon which it instituted proceedings. The court found that the amended claim was not statute barred. The court held that a contractual relationship existed between TSQ and the fourth defendant. The court found that the fourth defendant's omission to advise TSQ to arrange its own pre-settlement inspection did not amount to a breach of contract or a breach of its common law duty of care towards TSQ. The court discussed the principles relating to the damages recoverable from a solicitor who gives negligent advice in relation to the purchase of property. The court held that TSQ's claim against the fourth defendant was dismissed. The court found that TSQ would have acted on advice to carry out a pre-settlement inspection, but the prospects of such an inspection being permitted by the administrators and Mr and Mrs Wood were less than 50 percent. The court assessed the probability of such an inspection being permitted at 40 percent. The court found that even a cursory inspection, if it had been permitted, would have detected at least sufficient damage to put Mr Calabrese and Legalcom on notice. However, the court accepted Mr Calabrese's evidence that once aware of the damage, he would not have proceeded to settlement. In that event, TSQ would never have been in the position to earn the profits which it now claims. The court concluded that TSQ was not entitled to any damages for loss of profits on the basis of a lost commercial opportunity. The most that TSQ could recover under a loss of opportunity claim was the $20,000 deposit which it had paid. The court found that contributory negligence was not available as a defence to the claim for damages for breach of contract. The court also found that, in case it should be found that TSQ was not party to any contract with Legalcom, the defence of contributory negligence in relation to TSQ's common law claim was not available.