Two Lands Services Pty Limited v Cave

The case of Two Lands Services Pty Limited v Cave involves a dispute over the calculation of profits obtained by a company, Two Lands, in relation to its role in originating mortgages. The court was tasked with determining whether the methodology and calculations used by the company to arrive at the profits were acceptable. The matter was heard in the Supreme Court of New South Wales. The central legal issues revolved around the appropriateness of the expert evidence presented by Two Lands, specifically regarding the commission earned in respect of mortgage origination, and whether the calculation of profits met the necessary standard of a reasonable approximation.

The court examined the approach taken by Two Lands in determining the profits, focusing on the methodology and calculations used. It noted that the account for profits remedy is inherently complex and that mathematical exactness is not required; instead, a reasonable approximation suffices. The court scrutinised the evidence provided by the expert witness to ensure it was reliable and adhered to the principles of fairness. It assessed whether the calculations were based on sound principles and whether they provided a reasonable approximation of the profits earned by Two Lands.

In its reasoning, the court concluded that the expert evidence presented by Two Lands was generally reliable and adhered to the principles of fairness. It found that the calculations provided a reasonable approximation of the profits, despite some discrepancies in the methodology. The court emphasised that while mathematical exactness is not necessary, the calculations must be based on sound principles and provide a reasonable estimate. Ultimately, the court determined that the profits claimed by Two Lands were adequately substantiated by the expert evidence.

As a result of the court's decision, the final orders were made in favour of Two Lands, with the court confirming the appropriateness of the profits claimed. The case underscores the importance of providing reliable and fair expert evidence when calculating profits in complex financial disputes.