Winnote Pty Ltd v Page - [2006] NSWCA 287

New South Wales

Court of Appeal

CITATION: WINNOTE PTY LTD & Anor v PAGE & Ors [2006] NSWCA 287
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 25/07/06, 26/07/06, 27/07/06, 28/07/06, 31/07/06

JUDGMENT DATE:
31 October 2006

JUDGMENT OF: Mason P at 1; Tobias JA at 340; Basten JA at 341

DECISION: 1. Appeal dismissed; 2. Respondents’ costs to be paid by the appellants Mr Roach and Winnote Pty Ltd; 3. Cross appeal dismissed with no order as to costs; 4. Liberty to apply within 7 days as regards the costs of the cross-appeal. If that liberty is exercised, the moving party or parties should, within a further 14 days, file and serve written submissions in support of the proposed orders and the other party or parties should file and serve submissions in response within a further 14 days.

CATCHWORDS: LIMITATION OF ACTIONS––Professional negligence––When time begins to run–Acquisition of lease from landholder to mine peat when mining lease required from Crown––Wasted expenditure in acquiring lease from landholder––Not discovered until five years later––Proceedings not commenced until seven years later––Damage accrues at time of lease from lessor––Limitation Act 1969 (NSW), s 14. - CONTRACTS––Breach––Retainer––Solicitor’s negligent advice––Misfeasance––No continuing duty to give correct advice––Breach final and complete when negligent advice given.

LEGISLATION CITED: Limitation Act 1969 (NSW), s 14
Mineral Resources Development Act 1990 (Vic), s 42
Mines Act 1958 (Vic), ss 25, 35, 291, 304, 306, 514
Soil Conservation and Land Utilisation Act 1958 (Vic), s 17A
Trade Practices Act 1974 (Cth)

CASES CITED: Argyropoulos v Layton [2002] NSWCA 183
Astley v Austrust Ltd (1999) 197 CLR 1
Bell v Peter Browne & Co [1990[ 2 QB 495
Brown v Dunn (1893) 6 R 67 (HL)
Bryan v Maloney (1995) 182 CLR 609
Cartledge v E Jopling & Sons Ltd [1963] AC 758
Christopoulos v Angelos (1996) 41 NSWLR 700
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Conquer v Boot [1928] 2 KB 336
Deputy Commissioner of Taxation v Zimmerlie [1988] 2 Qd R 500
D W Moore & Co Ltd v Ferrier [1988] 1 WLR 267
Ex parte Colonial Petroleum Oil Pty Ltd (1944) 44 SR(NSW) 306
Froster v Outred & Co [1982] 1 WLR 86
Gillespie v Elliott [1987] 2 Qd R 509
Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547
Hammond v Minister for Works (1992) 8 WAR 505
Hawkins v Clayton (1986) 5 NSWLR 109
Hawkins v Clayton (1988) 164 CLR 539
Heydon v NRMA Ltd (2000) 51 NSWLR 1
Honeywood as executrix of the Estate of the late Neville Honeywood v Munnings [2006] NSWCA 215
Larkin v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221
Law Society v Sephton & Co (a firm) [2006] UKHL 22; [2006] 2 WLR 1091
Lee v Brand [2003] NSWCA 198
Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543
McDonald v Deputy Federal Commission of Land Tax (NSW) (1915) 20 CLR 231
Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] Ch 384
Minister for Environmental Planning v San Sebastian Pty Ltd [1983] 2 NSWLR 268
MMAL Rentals Pty Ltd v Bruning [2004] 63 NSWLR 167
Mount Albert Borough Council v Johnson [1979] 2 NZLR 234
Moylan v The Nutrasweet Company [2000] NSWCA 337
Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394
Onerati v Phillips Constructions Pty Ltd (1989) 16 NSWLR 730
Potts v Miller (1940) 64 CLR 282
Registrar-General v Cleaver (1996) 41 NSWLR 713
Roach & Ors v Page & Ors (No 37) [2004] NSWSC 1048
Scarcella v Lettice (2000) 51 NSWLR 302
Segal v Fleming [2002] NSWCA 262
Sheldon v McBeath (1993) Aust Torts Rep 81-209
Spencer v The Commonwealth (1907) 5 CLR 418
State Rail Authority of New South Wales v Brown [2006] NSWCA 220
Turner v Minister of Public Instruction (1956) 95 CLR 245 at 268
Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642
Ward v Lewis (1896) 22 VLR 410
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Wardman v Hatfield [2003] NSWCA 283
Wilson v Rigg [2002] NSWCA 246
Winnote Pty Ltd v Page & Ors [2005] NSWCA 362

PARTIES: Winnote Pty Limited (in Liq) - First Appellant
Walter Edward Roach - Second Appellant
Brian John Downey Page & Ors t/as Freehill Hollingdale & Page - First Respondent
Brian David Kewley & Ors t/as Freehill Hollingdale & Page - Second Respondent

FILE NUMBER(S): CA 41095/04

COUNSEL: S. Gageler SC/A. Bell - Appellants
S. Finch SC/M.J. Darke - Respondents

SOLICITORS: Maurice Blackburn Cashman - Appellants
Allens Arthur Robinson - Respondents

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): 20950/97

LOWER COURT JUDICIAL OFFICER: Sperling J

LOWER COURT DATE OF DECISION: 30 September 2005

LOWER COURT MEDIUM NEUTRAL CITATION: Roach & Ors v Page & Ors (No. 37) [2004] NSWSC 1048

test

CA 41095/04
SC 20950/97

MASON P
TOBIAS JA
BASTEN JA
31 October 2006

WINNOTE PTY LTD & Anor v PAGE & Ors

In 1987-88 W sought to obtain the right to exploit a deposit of peat on land owned by S. W sought advice from its solicitors, P. P advised that W should obtain a lease of the land from S, which it did. The advice was negligent because peat was a mineral and W required a mining lease from the Crown in order to exploit the deposit. W incurred expenses associated with the acquisition and use of the lease including legal costs, and rent and royalties paid to S for the peat.

In 1993, G acquired a mining licence providing exclusive access to the peat deposit. W commenced proceedings in late 1995 against its solicitors, submitting that its claim in tort was not statute-barred because loss was not suffered until 1993, when G acquired the mining licence. W submitted whatever loss was suffered by way of reliance expenditure was merely contingent but not actual. At every stage prior to G’s intervention in 1993, W had an unimpeded right to mine peat on terms acceptable to itself and S. Alternatively, W submitted that loss was not suffered until its retainer with the firm ended in late 1989 because its solicitors had a continuing duty to give the correct advice up to that point, producing, in effect, a continuing breach that was final only in late 1989, rendering the proceedings commenced in late 1995 within time.

Before the trial judge, W was unsuccessful because it failed to prove that, even if it had obtained a mining lease, the deposit the subject of the lease had commercial value. Accordingly, the trial judge held that it had suffered not loss through the negligence of the solicitors.

The two substantive issues on appeal were whether:

(i) W’s claim was statute barred, and

(ii) W’s claim failed because it had suffered no loss resulting from the negligence of its solicitors.

in relation to issue (i) (by Mason P, Tobias JA agreeing, Basten JA not deciding):

(1) W suffered demonstrable actual damage in 1988, the time of transacting with S because it had through negligence ended up with a package of rights less valuable than it was entitled to expect (at [44]-[49]).

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; Law Society v Sephton & Co (a firm) [2006] UKHL 22; [2006] 2 WLR 1091, distinguished.

(2) W’s loss was not merely contingent as might be expected in non-transactional cases where the plaintiff does not acquire property or a chose in action and suffer immediate loss (at [44]-[45]; [47]-[49]).

Gillespie v Elliott [1987] 2 Qd R 509; Forster v Outred & Co [1982] 1 WLR 86; Bell v Peter Browne & Co [1990] 2 QB 495; Scarcella v Lettice (2000) 51 NSWLR 302, applied.

Ward v Lewis (1896) 22 VLR 410; Minister for Environmental Planning v San Sebastian Pty Ltd [1983] 2 NSWLR 268 at 290-291, 315-316; Deputy Commissioner of Taxation v Zimmerlie [1988] 2 Qd R 500; Segal v Fleming [2002] NSWCA 262 at [27], Christopoulos v Angelos (1996) 41 NSWLR 700; Registrar General v Cleaver (1996) 41 NSWLR 713, referred to.

(3) W’s measurable loss consisted in a near worthless lease, the professional costs associated with its drafting and legal costs associated with its procurement, the payment of royalties to a merely ostensible owner – and at higher rates than would have been payable to the true owner of the peat, the Crown – and rental. W also exposed itself to a claim in conversion by the Crown. None of these wasted expenditures produced any proven commensurable value (at [59]-[62]).

(4) Merely because a substantial loss occurs at a later point of time does not establish that there was no damage stemming from the same breach occurring at an earlier date being damage that occurred outside the limitation period, thereby barring the whole claim. The same principle obtains in cases of pure economic loss as in personal injury, namely, time commences to run from the first measurable occurrence of damage (at [63]-[66]).

Conquer v Boot [1928] 2 KB 336 at 341, 344, considered.
Onerati v Phillips Constructions Pty Ltd (1989) 16 NSWLR 730 at 746-747; Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 at 559; Honeywood v Munnings [2006] NSWCA 215; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 531-532; Segal v Fleming [2002] NSWCA 262 at [26]; Scarcella v Lettice (2000) 51 NSWLR 302, referred to.

Mount Albert Borough Council v Johnson [1979] 2 NZLR 234, questioned.

(5) The claim in tort was statute-barred (at [67]).

(6) The contractual duty to act could not rise beyond doing what was instructed to be done and anything incidental. It was never part of the retainer that the solicitors would procure the right to mine peat (at [77]).

Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 53 [147], referred to.

(7) The solicitors’ failure to revisit and correct the advice they gave was a failure to remedy the existing breach, not the commission of a further breach. To identify a relevant continuing duty, it must still be an aspect of the retainer at the supposed time of breach, as in a simple non-feasance.

Larkin v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 236; Hammond v Minister for Works (1992) 8 WAR 505 at 516; Midland Bank Trust Co Ltd v Hett Stubbs Kemp [1979] Ch 384, applied.

HELD

, in relation to issue (ii) (by Mason P, Tobias and Basten JJA agreeing):

(8) The trial judge had not erred in holding that W’s failure, due to the negligence of its solicitors, to obtain a mining lease over the peat deposit resulted in no loss, because the deposit had no value. His Honour had been asked to perform this exercise as at 1993. No dispositive error of fact or law was committed in the detailed reasons that had led to the conclusion that the peat deposit had a negative or nil value as at 1993.

Per Basten JA (in relation to (i)):

1. An inflexible approach based on the creation of a legal obligation is not the law in Australia. If it were, entering into a guarantee as a result of negligent advice would start the clock running for limitation purposes, which was held by the High Court to not be the case: at [344].

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, applied; Forster v Outred & Co [1982] 1 WLR 86; D W Moore & Co Ltd v Ferrier [1988] 1 WLR 267, distinguished.

2. Negligence causing a claimant to enter into a transaction which it would not have otherwise entered may not immediately, or indeed ever, cause measurable loss unless there is an immediate diminution in value of a particular asset. Where a legal interest is sought but not obtained relevant loss may be suffered only when the interest is no longer, in practical terms, available: at [348], [355], [364].

Law Society v Sephton & Co [2006] 2 WLR 1091; Segal v Fleming [2002] NSWCA 262; Lee v Brand [2003] NSWCA 198; Wardman v Hatfield [2003] NSWCA 283, applied ; Forster v Outred & Co [1982] 1 WLR 86; Bell v Peter Browne & Co [1990] 2 QB 495; Scarcella v Lettice (2000) 51 NSWLR 302, distinguished.

3. The distinction to be drawn between a case of ‘simple non-feasance’, being the failure to take appropriate steps to give effect to one’s instruction, and a case where the practitioner is specifically asked to advise and then take appropriate steps based on the advice requires careful attention. Cases concerning actual loss resulting from a failure to issue timely proceedings have held that a continuing retainer can involve a continuing duty, with further breaches, after the limitation period expires and where no steps are taken to make an application for an extension of time: at [359]–[360].

Argyropoulos v Layton [2002] NSWCA 183; Wilson v Rigg [2002] NSWCA 246, considered.

4. Ignorance that a cause of action has accrued does not, absent statutory suspension, prevent time running. However where a claim is made for pure economic loss, knowledge of that defect may be relevant to the occurrence of actual loss: [361]–[362].

Cartledge v E. Jopling & Sons Ltd [1963] AC 758; Bryan v Maloney (1995) 182 CLR 609; Segal v Fleming [2002] NSWCA 262, considered.

Appeal dismissed.

CA 41095/04
SC 20950/97

MASON P
TOBIAS JA
BASTEN JA
31 October 2006

WINNOTE PTY LTD & Anor v PAGE & Ors

JUDGMENT

1 MASON P: The appellants are Mr Roach and Winnote Pty Ltd (in liq). Whilst Winnote was initially owned and controlled equally by Mr Roach and Mr Luscombe, its shares were acquired by Mr Roach alone in March 1993, and it subsequently went into liquidation.

2 The first respondents are the partners at the relevant time of Freehill Hollingdale & Page, solicitors, Sydney (hereafter FS). The second respondents are the partners at the relevant time of Freehill Hollingdale & Page, solicitors, Melbourne (hereafter FM).

3 The appellants challenge the verdict for the defendants entered against them by Sperling J (Roach & Ors v Page & Ors (No 37) [2004] NSWSC 1048). (References to paragraphs in this judgment are stated as J1, J2 etc.) Most of the primary findings are not in dispute.

4 At the commencement of the hearing senior counsel for the appellants abandoned the grounds of appeal relating to of Mr Roach’s personal claim. It was accepted that Winnote alone may pursue the claims litigated at trial.

Overview of facts relevant to breach

5 The appeal concerns a deposit of peat at Swan Marsh, Victoria. In 1988, peat was being extracted by Revili Pty Ltd, under a deed of licence with the landowner, Mr Sadler. Revili was controlled by Mr Luscombe.

6 In 1988 Mr Luscombe and Mr Roach agreed to form a joint venture to exploit the resource. A written agreement dated 21 July 1988 provided that a company would be formed to take over the existing “lease”. Winnote was acquired and its shares were allotted to Roach and Luscombe equally.

7 Mr Roach had retained FS to advise and draft the appropriate documentation. After obtaining advice from FM concerning Victorian law and passing it on to Mr Roach in August 1988, FS was instructed to prepare a real property lease (RPL) between Mr Sadler as lessor and Winnote as lessee as the means of securing the right to exploit the peat deposit.

8 The RPL was executed on 7 November 1988. Its function is summarised in Recital F as being to permit Winnote "to extract, wash, process and carry away such peat on the terms and conditions contained herein...". Salient features of the RPL (summarised at J101) include the grant of an exclusive right to extract peat from an area not exceeding 80 ha within the demised property; an obligation to pay the lessor a royalty at the rate of $4 per cubic metre of peat extracted, with a minimum of $10,000 per year; and retention of farming and grazing rights by the lessor other than over a stipulated "storage area" and that part of the "work area" from which the lessee is extracting peat from time to time. The “lease” was for a term of five years from 30 June 1988 with a rolling option to renew exercisable a maximum of seven times. In truth, the RPL was a profit à prendre, a licence to enter the land and remove peat from it.

9 The RPL was not registered in circumstances discussed below. This did not affect its validity, nor is non-registration part of any cause of action in the proceedings.

10 Sperling J held that, if Mr Roach had been given the correct legal advice, he would have dealt directly with the Crown and obtained both a mining lease and an exploration licence under the Mines Act 1958 (Vic) (J297-304). This would have secured effective exclusivity to peat located in the area described as the hambone, approximately ninety per cent of which was within Mr Sadler’s land. The putative mining lease and exploration licence would have contained terms (including minimum employment and annual expenditure requirements) substantially identical to those later undertaken by Mr Groves (J302-4).

11 The Mines Act 1958 allowed mining on private land pursuant to a “mining lease”. The consent of the landowner was not required as a condition for the grant. However, by ss304 and 306 compensation was payable to the owner for deprivation of possession of the surface of the land and any damage to the surface or to improvements. Rights under the mining lease were conditional upon the lease holder having paid or tendered compensation to the owner, or having entered into an agreement with the owner as to such compensation and as to payment. Failing such agreement, the compensation could be determined by an independent authority, as provided for in the Act. A royalty was payable to the Crown (at the rate of 2.75 per cent of the value sold, in the case of peat).

12 Section 291 permitted a substance to be declared the property of the Crown and peat had been thus proclaimed in 1982. This information was unknown to Messrs Sadler, Luscombe and Roach until 1993. The failure of both FS and FM to bring it to the attention of Winnote in August 1988 was the negligent omission found against the solicitors that is unchallenged in the appeal.

13 The Mines Act also provided for exploration licences that allowed a person to occupy and explore land with a view to studying the feasibility of establishing a mine. The licence was for an initial term of five years, with extensions (as decided by the Minister) up to a cumulative extension of two years (ie a total maximum of seven years). The licence was effectively exclusive (see s514(16)(d) of the Mines Act 1958 and s25(1)(b)).

14 Between 1988 and 1993 Winnote extracted peat from the site, paying contractual royalties to Mr Sadler pursuant to the RPL. The business was never profitable.

15 In 1992 Winnote decided to seek a buyer for the business. Mr Groves came on the scene and Messrs Roach and Luscombe were willing to sell Winnote’s rights under the RPL for a nominal consideration, subject to Groves’ acquiring a stockpile of already mined peat for $40,000. Instead of that occurring, Mr Groves undercut Winnote's interest in the peat deposit by obtaining his own mining licence (ML 4667) in May 1993 (J188-220). ("Mining licence" (ML) was the new terminology for what was previously called a mining lease. The Mineral Resources Development Act 1990 (Vic) had substantially reenacted the Mines Act so far is presently relevant: see J196.) Having thus obtained "ownership" of the heart of the deposit Mr Groves was able to exclude Winnote. Mr Groves subsequently obtained an exploration licence over a larger area of surrounding land.

16 Winnote alleges that the events of 1993 frustrated an otherwise viable venture. Sperling J found otherwise, holding that nothing of value was lost in 1993.

The pleaded claim and findings as to breach

17 Proceedings for damages were commenced by Mr Roach, Winnote and another company controlled by Mr Roach. The claim by the latter company was not pressed at trial and Mr Roach’s claim was abandoned on appeal.

18 At trial the plaintiffs contended that, if they had been correctly advised in 1988, Mr Roach and/or Winnote would then have applied for and been granted a mining lease. Instead, they proceeded down the false RPL path, abandoning it in 1993 when the inutility of that legal title became apparent.

19 The relevant retainer was alleged to have commenced in about August 1988. It was pleaded against FS in the following terms:

6A. The retainer … continued up until at least June 1990 during which time [FS] continued to act as solicitors for the Plaintiffs in relation to the subject matter of the retainer ….

7. It was an express term [that FS] would advise the Plaintiffs whether any, and if so what kind of, lease licence or permit was necessary under the laws of the State of Victoria to enable peat to be extracted from the Land.

8. It was an implied term [that FS] would exercise all due care skill and diligence in acting as solicitors for the Plaintiffs and, in particular, in providing the advice referred to in paragraph 7 hereof.

20 FS was allegedly liable in contract and tort, but only for the consequence of failing to perform the retainer with reasonable care and skill. The solicitors never warranted a particular outcome.

21 FM’s alleged duty of care lay only in tort.

22 The solicitors were alleged to have failed to advise the plaintiffs that the owner of the land (Mr Sadler) had no title in the peat on the land, no right to license any party to extract it, and no right to obtain any royalty for it (Third Further Amended Statement of Claim, par 9F(viii)(b)). These breaches were established and they occurred prior to entry into the RPL. They show why any claim in contract was statute-barred well before 1995 unless the appellants can point to pleaded breaches of a continuing duty said to have taken place in late 1989 or 1990.

23 The pleaded detrimental reliance was that (par 10):

… the plaintiffs set up and established a peat extraction operation on the land and incurred great expense in so doing.

24 Sperling J held that FS and FM each owed a duty of care to Winnote to exercise care to a standard consistent with the special expertise which each firm of solicitors professed to have (J61). The duty had been breached by FM in August 1988 when Mr Eager of that firm, in both oral advice and a letter sent to FS subsequently forwarded to Mr Roach, failed to advise that peat was covered by the Victorian mining legislation (J66-8, 79, 90, 93). FS was found not to have breached its tortious duty of care, effectively because it was reasonable to rely on FM (J91-3). The judge also held that, if it were that FS was under some contractual duty, a matter unnecessary to resolve, any cause of action in contract was statute-barred by the date when the proceedings were commenced (J92-3). Winnote does not pursue a contract claim against FM (CA Tr p139).

25 The solicitors could not have breached any relevant duty (even a continuing duty) after their retainer came to an end. Indeed, Sperling J’s findings of breach focus exclusively on 1988. This is consistent with the way the claims were pleaded and is borne out in the judgment by:

• the characterisation of the breach as the giving of incorrect advice about the Victorian mining legislation (J93);

• the statement that Winnote’s contractual cause of action was statute-barred when the proceedings were commenced (J92);

• the judge’s consideration of the reliance damages case for expenditure incurred during 1988-1993 (J496); and

in 1988

26 The last point is made explicit in the heading immediately before J275 (“Winnote would have obtained an exploration licence and a mining lease in 1988”) and the statement in J303 that it was reasonable to assume that whatever motivated Mr Groves in 1993 “would have operated from Winnote’s standpoint in 1988, with the same results”. Further proof may be found in J305 (emphasis added):

Whether Winnote

would have continued to hold

an exploration licence in 1993 is uncertain. There would have been the condition for annual expenditure. In view of the financial constraints on the Roach companies in the

early 1990s

, there would have been strong reasons for avoiding expenditure of that kind. The minister could vary or suspend that requirement. Whether he would have done so in response to the adverse economic conditions of the

early 1990s

I do not know. It is also possible that,

five years on from 1988

, no further exploration operations would have been warranted and Mr Roach and Mr Luscombe would, by then, have let the exploration licence go without further renewal, resting content with the mining lease

they would have had

, as others appear to have done subsequently.

27 There was no evidence from Mr Roach nor any finding by the trial judge as to what Winnote would have done after 1988 as regards taking up a mining lease and/or an exploration licence had the true situation been brought to Mr Roach’s attention after 1988. Winnote asks this Court to find that Winnote would have sought a mining lease/licence at any time up to May 1993 when Mr Groves beat Winnote to the punch. The inference becomes harder to draw in 1992 as dissatisfaction with the commerciality of the deposit became apparent.

28 Evidence on the issue points in opposite directions. On the one hand, Mr Roach was asserting against Mr Sadler that the RPL was to be renewed as late as June 1993 (J216). On the other hand, there were findings that Mr Roach was eager to sell the deposit by September 1992 (J171). Mr Roach was definitely willing to sell “the deposit” to Mr Groves for a small consideration by early 1993. The conditions of a mining licence and exploration licence were onerous and potentially expensive. Mr Roach’s evidence that he would have sat on a mining lease acquired in 1988 and ridden out the economic storm in 1992-3 was not accepted by Sperling J (J249).

29 It is unnecessary for me to resolve this unanswered question, which would only become relevant if the Court accepted the continuing duty argument discussed below in the limitation context.

30 Notwithstanding the criticality of 1988 on the judge’s findings and the essentiality of the period after 15 November 1989 on the limitation issue (below), it became common ground at trial that the exercise of valuing what Winnote lost in consequence of the solicitors’ negligence had to take place as at 1993 as regards the claim for expectation damages. Sperling J held that “it is not a loss of a chance case. It is a valuation case” (J315). Winnote’s challenge to this finding (Ground 23) was abandoned. His Honour proceeded, at the invitation of the parties, to consider the value of what was lost as at 1993.

31 Factually, the year 1993 was chosen because Mr Groves’ acquisition of ML 4667 in May 1993 gave him control of the central part of the deposit. When Mr Roach learnt of this, he effectively allowed the RPL to lapse on 30 June 1993 (J215-220).

32 The events in 1993 brought home the full implications of the solicitors’ negligence, without providing a clear explanation why that date was legally relevant or chosen for the valuation enquiry.

Limitation issues

33 The proceedings were commenced on 15 November 1995. Limitation defences were pleaded and it is common ground that the applicable statute is the Limitation Act 1969 (NSW). The limitation period in contract and tort is six years (s14) and there is no relevant power to extend time. If the causes of action now pressed did not accrue after 15 November 1989 then all claims are statute-barred.

34 In addressing limitation issues it will be assumed that Winnote is correct in its submission that both FS and FM were negligent. I do not understand Winnote to argue that there was any material difference between the firms in the scope of the assumed responsibility underlying FS’s contractual duty or both firms’ tortious duty or in the nature of the conduct representing breach.

35 As indicated, the only breach found by Sperling J was the negligent advice given in 1988. On this basis, any contractual claim was statute-barred (as the judge held, at J92). On appeal, Winnote submits that there were further breaches of a continuing contractual duty in 1989-90.

36 Whether or not the tort claim was barred depends in the first analysis upon what torts were pleaded and proved. In negligence, where damage is of the gist, the defendant bears the onus of proving (in relation to the torts relied upon by the plaintiff) that actual and measurable loss occurred outside the statutory period (Segal v Fleming [2002] NSWCA 262 at [27]). The judge found it unnecessary to decide this question given his conclusion that the plaintiffs failed to establish the loss it claimed (J506-7). A notice of contention presents the matter afresh in this Court.

37 Two distinct limitations issues are presented. Neither was addressed in the reasons of the primary judge. The first did not have to be addressed in light of the findings that no damage occurred in 1993, the date chosen by the parties for exclusive attention as regards the claim for expectation loss damages. The second was overlooked, in large part because of the paucity of evidence directed to it.

(i) Assuming tortious breach in 1988 when was measurable damage first suffered?

38 Winnote submits that its claim in tort was not statute-barred because, even if the breach occurred in 1988, damage was not suffered until 1993.

39 At trial, Winnote had claimed (in the alternative) reliance damages with respect to lost expenditure commencing in 1988 (J496). This claim failed for reasons that are no longer relevant (J501). Winnote appealed, but abandoned the relevant grounds of appeal at the commencement of the hearing. This may have happened because Winnote’s legal advisers perceived that a reliance damages claim could cause trouble for the limitation case without yielding the substantial award said to proceed from the alternative and primary claim for expectation damages. But this is neither here nor there. What is important is that Winnote’s tergiversation meant that, on appeal, the respondents assumed the labouring oar in seeking to prove that tort-related damage first occurred before November 1989. Of course, a defendant bears that onus in any event (Segal at [27]).

40 A plaintiff cannot sue for damages in negligence until the cause of action accrues. But once it accrues, time commences to run. Absent a special statutory provision, it does not matter that the plaintiff was ignorant of the true position (Scarcella v Lettice (2000) 51 NSWLR 302 at 306). According to Cartledge v E Jopling & Sons Ltd [1963] AC 758, which established the latter proposition, damage in this context means damage that is “beyond what can be regarded as negligible” (at 772 per Lord Reid). In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, Mason CJ, Dawson J, Gaudron J and McHugh J spoke (at 531) of “measurable” damage. See also Hawkins v Clayton (1988) 164 CLR 539 at 561, 587-8, 599-601.

41 Winnote’s claim is for economic loss. “With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough” (Wardley at 527 per Mason CJ, Dawson J and McHugh J). Recently Lord Mance expressed the point in these terms (Law Society v Sephton & Co(a firm) [2006] UKHL 22; [2006] 2 WLR 1091 (Sephton) at [60]):

Any cause of action … for negligence accrued when the [plaintiff] first suffered any ‘actual’ damage of a relevant and measurable kind bearing in mind the measure of damage applicable to the wrong in question.

42 In this Court Winnote contends, in effect, that the disadvantage it suffered in 1988 by failing to acquire a proper mining tenement was merely contingent. Actual damage first occurred in 1993 when Mr Groves’ intervention prevented the enjoyment of the deposit. Prior to then, so the argument now goes, Winnote was able to enjoy an unimpeded right to remove peat on terms acceptable to itself and Mr Sadler.

43 This argument lies uncomfortably with the submission made many times in a non-limitation context that the negligence caused Winnote to acquire a “lemon”, namely the RPL.

44 In my view, Winnote’s argument should be rejected. This is not a contingent loss case of the type discussed in Wardley and Sephton. On the contrary, there was clearly demonstrable “actual” damage suffered in 1988. Time then commenced to run in tortious negligence and it expired before proceedings were launched in 1995.

45 In Sephton, Lord Mance said (at [67]):

There is considerable case-law concerning situations where a person's legal position has, through negligence, been altered to his immediate, measurable economic disadvantage, and it has been held that a cause of action accrued although the beneficiary neither knew nor had any reason to know about its existence. In

Forster v Outred & Co

[1982] 1 WLR 86 a mother, in reliance on negligently given advice, executed a mortgage over her home to secure her son's borrowings, thereby immediately diminishing her home's value. In

D W Moore & Co Ltd v Ferrier

[1988] 1 WLR 267 due to solicitors' negligent advice, the claimant company took on Mr Ferrier under contractual agreements which failed to prevent him, if he left, from establishing his own competing business. The claimant's "rights under the two agreements were demonstrably less valuable than they would have been had adequate restrictive covenants been included" (per Neill LJ at p.278G). "Instead of receiving a potentially valuable chose in action they received one that was valueless" (per Bingham LJ at p.279H). In

Baker v Ollard & Bentley

(unreported), 12th May 1982 (cited in

D W Moore & Co Ltd v Ferrier

[1988] 1 WLR 267), the claimant due to solicitors' negligence acquired a less valuable interest in a house held on trust for sale, rather than a separate and saleable interest in its first floor. In

Bell v Peter Browne & Co

[1990] 2 QB 495, after a marriage breakdown, a solicitor's negligence led to the husband putting the matrimonial home into his wife's name, without any accompanying document being prepared or any caution lodged to protect the one-sixth interest which the wife had agreed that the husband should have on any sale of the house. His resulting equitable interest was "clearly less valuable" than an interest secured by a charge or protected by a deed of trust (per Beldam LJ at p. 510F); further, even though his equitable interest could have been protected at any time until the wife sold the home, that would have involved at least some costs recoverable in damages from the defendant (per Nicholls LJ at p. 503G).

46 In the same case, Lord Walker of Gestingthorpe referred (at [45]) to cases such as Forster v Outred & Co and Bell v Peter Browne & Co as:

… cases where the client had through the negligence of his professional adviser ended up with a package of rights less valuable than he was entitled to expect – damaged or defective goods, to pursue the metaphor, rather than the undamaged and serviceable goods which he should have got.

Lord Walker described these as “transaction” cases (at [46]).

47 In Wardley, several of the earlier English decisions, including Forster were discussed and distinguished by the High Court. The Court emphasised (528-9) that Forster was explicable as an actual loss case because the execution of the mortgage had an immediate effect on the value of the plaintiff’s equity of redemption. (Cf Segal at [23].) The value of that equity was reduced because the mortgage executed on the negligent advice of the solicitors and designed to secure the debts of the plaintiff’s son had an immediate negative impact on the value of the equity of redemption of the plaintiff’s property. Later (at 531) the Court indicated that Forster and D W Moore & Co were illustrations of decisions in which the plaintiff sustained “measurable loss at an earlier time, quite apart from the contingent loss which threatened at a later date”. Nothing indicated any concern about the correctness of those decisions, properly understood (see esp 529, 531-2).

48 Wardley involved a plaintiff that granted an indemnity to National Australia Bank Ltd against a facility given by the Bank to Rothwells Ltd. The plaintiff had been induced to act by the misleading and deceptive conduct of the defendant, the State of Western Australia. One issue to be determined was the time when Wardley’s cause of action under the Trade Practices Act1974 (Cth) accrued. It was held that the indemnifier suffered no loss until the contingency of Rothwells not satisfying its liability to the Bank was fulfilled. The Court distinguished the line of English cases “in which the plaintiff acquires property (or a chose in action)” (at 533) and suffers actual loss in the circumstances. See also at 530-1.

49 Australian cases have approached the “transaction” cases in similar fashion to the English line.

50 In Gillespie v Elliott [1987] 2 Qd R 509 a solicitor acted in the purchase of a hotel business. The contract of purchase, entered into in 1975, specified the terms of a lease and sub-lease which were to be acquired. There were options for extension at a rental “to be agreed by mutual consent”. In 1977 the plaintiff reached agreement “in principle” for the sale of the business and leases, but the potential purchaser refused to proceed because the options were unenforceable. A claim for negligence that was filed in 1983 alleged that the loss of the value of the agreement “in principle” as the damage stemming from the negligence. (The situation was therefore was on all fours with that contended for by Winnote in the present case.) The Full Court of the Supreme Court of Queensland held that the claim was statute-barred. The plaintiff’s submission that damage was not suffered until they went to sell the business was rejected. Actual damage was held to have occurred in 1975 “even though the quantum may depend on future events and, in some cases, upon an assessment of the likelihood of those events occurring” (per Macrossan J at 519). As Carter J put it (at 520):

As a result of [the] breach the appellants had acquired property significantly less valuable than that which they had expected to receive. The loss thereby caused was quantifiable and … the quantum of that loss was the difference between the value of the lease and sub-lease with enforceable options for renewal and the lease and sub-lease which they, in fact, got.

Forster

Baker

51 See also Ward v Lewis (1896) 22 VLR 410; Minister for Environmental Planning v San Sebastian Pty Ltd [1983] 2 NSWLR 268 at 290-1, 315-16, Deputy Commissioner of Taxation v Zimmerlie [1988] 2 Qd R 500, Segal.

52 In Scarcella, a solicitor retained to act on a land purchase negligently failed to detect that there was a defect in title with a right of way thought to benefit the land. The purchase occurred in 1982, but it was not until 1994 that the plaintiffs discovered the problem, when adjoining owners pointed out that they could not subdivide because title searches revealed that there was in truth no right of way. This Court held that the claim in negligence was statute-barred because damage had accrued on acquisition of the property. There was a discoverable defect in title the effect of which was that the true value of the property in 1982 was $62,000 and not the $66,000 that the plaintiffs had paid. It was held that actual damage sufficient to complete the cause of action in negligence had been suffered in 1982, even though the plaintiffs were then unaware of it.

53 Handley JA said (at 307[23]):

There is no reason for thinking that the plaintiffs could have ever sold this property and avoided economic loss. The defect in their title would have been discovered, either by their solicitors in preparing the contract of sale, or by the solicitors for the purchaser, and in that event they would have faced claims for compensation or rescission.

54 (I pause to observe that this is exactly the situation in which Winnote found itself from 1988 onwards, demonstrated (as it turned out) by what happened with Mr Groves. This point is developed more fully elsewhere in these reasons.)

55 Handley JA continued (at 308[24]):

The general principle is that time runs from when the cause of action is complete, whether or not this is discovered or discoverable. The exceptions for latent defects in buildings, latent defects in title, and prospective and contingent losses are only apparent exceptions to this general rule. They depend in each case on a finding that the particular form of economic loss had not been suffered when the plaintiff became committed to the risk, but only later when the risk actually accrued.

56 His Honour had earlier referred to several cases involving latent defects in buildings; to Christopoulos v Angelos (1996) 41 NSWLR 700 and Registrar-General v Cleaver (1996) 41 NSWLR 713 as cases involving latent defects in title; and to Wardley as a case involving prospective and contingent losses.

57 Giles JA said (at 310[42]):

The incomplete right of way was apparent upon search and would become known to any (non-negligent) purchaser, including a purchaser from the plaintiffs. So the $62,000 was the true value of the property in 1982, and the plaintiffs were immediately worse off by $4,000. Their economic loss was suffered in 1982 when they paid too much for the property. It was not prospective, suffered only when they were denied access to the rear of the property. As explained by Handley JA,

Christopoulos v Angelos

and

Registrar-General v Cleaver

were quite different in that the title discrepancies were not ordinarily discoverable on search and until their discovery the market values of the properties were and remained their values without the title discrepancies.

58 The third member of the court, Powell JA, was firmly of the opinion that the plaintiffs in Scarcella sustained damage in 1982. He was unable to agree with his colleagues as to the basis underlying Christopoulos v Angelos and Registrar-General v Cleaver. Powell JA considered those cases to have been wrongly decided.

59 Of course, a defendant wishing to show that the negligently induced “transaction” caused immediate actual loss of a measurable kind has to establish that proposition. But sometimes this can be “self-evident” (Wardley at 528 per Mason CJ, Dawson J, Gaudron J, McHugh J) or “clear beyond argument” (Moore & Co at 279 per Bingham LJ. See also per Neill LJ at 277.).

60 The present is such a case, in my opinion. From the outset, Winnote got significantly less than it should have, in consequence of the solicitors’ 1988 negligence. The “goods were damaged” to use Lord Walker’s terms. This is demonstrable when one compares the rights secured under the RPL with the rights that ought to have been secured under mining tenements from the outset. The former instrument was legally worthless as later events demonstrated. As Mr Gageler SC put it during argument in this Court, the rights secured by the RPL “were of a dramatically inferior kind” (CA Tr p24).

61 Entry into the RPL and onto the land also prejudiced Winnote from the outset. There was measurable damage, albeit that the assessment exercise would have been a difficult one had Winnote got the matter to court in 1989-90. In October 1988 Winnote paid FS $3,650 for professional costs in drafting the RPL. Further substantial costs were paid in August 1989 for legal services provided by FS and FM in relation to obtaining the lease (J105-6). On 21-22 August 1989 Winnote paid Mr Sadler $7519 on account of royalties and $5305 on account of his costs (Blue 14/3403, 3417. Orange 533), these being obligations imposed by the RPL. The royalties were paid for peat that was not Mr Sadler’s to sell. In truth, Winnote had exposed itself to a claim in conversion by the true owner of the peat, ie the Crown in right of Victoria. All of these were items of wasted expenditure that did not produce any proven commensurable value (see Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 81-2, 107).

62 If it matters, the royalties paid to Mr Sadler were also at higher rates than those payable to the Crown: the RPL royalty rate was $4 per m³, subject to annual escalation and a minimum annual amount of $10,000 compared to the statutory rate under the Mines Act of 2.75 per cent of the value of peat sold.

63 These observations as to measurable loss in 1988-89 do not preclude the Court from endorsing the trial judge’s finding that the peat deposit is worthless in 1993 if that finding is properly made (see below). Winnote chose to pitch its primary claim (and in this Court, its exclusive claim) as one for expectation damages to be calculated on the basis of an expectation dashed in 1993. This may or may not be a correct temporal reference point for calculation of loss stemming (in the eye of the law) from a breach of duty that occurred in 1988. But it was the reference point adopted at trial and is the sole reference point pressed on appeal.

64 The question whether a single cause of action has commenced to run in consequence of particular damage having occurred may arise in several contexts. It may be important for res judicata (see, for example Honeywood as executrix of the Estate of the late Neville Honeywood v Munnings [2006] NSWCA 215), for determining whether a jurisdictional limit could be avoided by the plaintiff bringing two actions in a court of limited jurisdiction (see, for example Conquer v Boot [1928] 2 KB 336 at 341, Sankey LJ) or in a limitation context, like the present case. A plaintiff who can demonstrate separate causes of action arising out of separate incidents of damage, is free to select those accruing within the limitation period. But in determining the true situation, the law looks at the substance of the matter and not the formal framework that may have been artificially erected by the plaintiff in an endeavour to gain a juridical advantage (see Onerati v Phillips Constructions Pty Ltd (1989) 16 NSWLR 730 at 746-7, Giles J; Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 559, Clarke JA with whom Priestley JA agreed; Honeywood).

65 In Conquer, Talbot J at 344 distinguished between two situations. The first was “one contract and one promise to be performed at one time, although no doubt the defendant may have failed to perform in one or many respects”. The second was the situation where there may be “many promises in one contract, the breach of each of which is the separate cause of action”. His Lordship pointed out that in the latter situation the period of limitation would be different for each breach. But in cases where there was but one promise, separate or successive breaches would not prevent time from running from the date of the first breach. A plaintiff could not choose to ignore the limitation consequences of the earlier breach and its damages by confining its claim to the later breach (and damages) occurring within the limitation period. As Talbot J put it (at 344-5):

Here there is but one promise, to complete the bungalow; and the question whether or not it has been performed is to be decided by the state in which the bungalow was when it was handed over by the defendant to the plaintiff as complete. From that moment the Statute of Limitations began to run as to the whole. The plaintiff could not alter the fact that he was recovering damages for the breach of this single promise by failing to specify in his action all the particulars of the breach and all the damages to which he was entitled.

Onerati

Honeywood

Wardley

66 Merely because a substantial loss occurs (ex hypothesi) at a later point of time does not establish that there was no damage stemming from the same breach occurring at an earlier date being damage that occurred outside of the limitation period, thereby barring the whole claim (Wardley at 531, Segal at [26]). In this area of economic loss, the same principle applies as for personal injury, namely time commences to run from the first measurable occurrence of damage (Scarcella). It is unnecessary to consider the correctness of decisions such as Mount Albert Borough Council v Johnson [1979] 2 NZLR 234 (invoked by Winnote) which suggest that successive actions will lie for each successive and distinct accrual of damage where negligent work causes a building to subside and crack. The Australian and English “transaction” cases to which I have referred do not recognise any such principle in the present area of discourse.

67 In the present case, measurable damage was suffered before November 1989. Any tort claim referable to a breach in 1988 was statute-barred.

(ii) Was a continuing duty breached in 1989-90?

68 Winnote submits, in the alternative, that a continuing contractual and/or tortious duty was breached in 1989-90, within the limitation period. The breach was a continuing failure to give correct advice about the status of peat under the Mines Act. This occurred while the solicitors were still acting for Winnote, pressing Mr Sadler to register the RPL.

69 The express terms of the pleaded retainer of FS are set out above.

70 At the opening of the trial on 19 August 2003 the plaintiffs were given leave to file a Third Further Amended Statement of Claim that pleaded (in pars 11 and 17) that FS and FM breached their continuing duty in failing at any time to provide, during the course of their retainer (my emphasis), advice concerning the matters set out in par 9F(i)-(xi) (FS) and par 15C(i)-(xi) (FM). In substance, the allegation was that advice should have been given that peat was a “mineral” for the purposes of the Mines Act 1958 (Vic); that Mr Sadler had no title to the peat on the land, no right to licence any party to extract it, and no right to obtain any royalty for it; and that a mining tenement rather than a lease or licence from the landowner was the proper method of securing the right to extract peat.

71 This focus upon a negligent advice allegation is understandable. Advice as to whether peat was a mineral was specifically sought (J47) and given (J63-89) in July-August 1988. Consequent upon that advice, the solicitors were asked to prepare the RPL to give effect to already partially negotiated arrangements with Mr Sadler. This led to extensive negotiations with the lessor’s solicitor leading to agreement as to the terms of the RPL that was executed on 7 November 1988.

72 The 1989-90 troubles over registration of the RPL stemmed from this standpoint, one that both client and solicitor had adopted in August 1988.

73 The presently critical questions are whether there was a continuing duty to give such advice after 1988 and/or whether failure to do so after 1988 was an additional act of negligence (ie a further breach).

74 Despite the late amendment to plead post 1988 breaches, there was no amendment to the existing allegations of reliance pleaded against the two firms (in pars 10 and 16). Those two paragraphs were similar in effect, the pleading against FS alleging:

Acting in reliance upon such advice (including the lack of any advice as to the matters referred to in paragraph 9F above) and believing the advice to be correct and that it was not necessary to obtain a lease to extract the peat from the Land pursuant to the Mines Act 1958 (Vic), the Plaintiffs set up and established a peat extraction operation on the Land and incurred great expense in so doing.

75 I have already drawn attention to the absence of evidence or findings as to what Winnote would have done after 1988 as regards applying for mining tenements had it received accurate information about the status of peat.

76 The statement of claim pleaded that the retainer agreement(s) were formed in about August 1988. FS admitted that the agreement stipulated expressly that FS would advise and act in connection with the obtaining of a lease over the land and that FS would advise whether any, and if so what kind of, lease licence or permit was necessary under the laws of Victoria to enable peat to be extracted. FS further admitted that it was an implied term of that retainer agreement that FS would exercise reasonable care in the performance of their duties under it (see also Astley v Austrust Ltd (1999) 197 CLR 1 at 22-3).

77 The conceded contractual duty to “act” could not rise beyond doing what was instructed to be done, including of course anything reasonably incidental to the tasks undertaken to be performed in the course of the retainer. It was never part of the retainer that the solicitors would procure the right to mine the peat. In the final analysis, that power lay with Mr Sadler (it was thought), although in reality with the Minister (Mines Act 1968, s35). The solicitors’ role required the exercise of due care, but it was never one that contemplated the solicitor achieving a particular outcome or filing a particular document.

78 The plaintiffs submitted at first instance that the solicitors were under a continuing duty to provide the correct advice until the retainer was terminated. Sperling J said that that approach was not pressed, adding “and properly so” (J94). It is common ground in this Court that his Honour was mistaken in thinking the point was abandoned. The plaintiffs kept it alive in their final submissions although, as will emerge, they had directed precious little evidence toward the topic during the trial.

79 In Larkin v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 Dixon J said (at 236):

If a covenantor undertakes that he will do a definite act and omits to do it within the time allowed for the purpose, he has broken his covenant finally and his continued failure to do the act is nothing but a failure to remedy his past breach and not the commission of any further breach of his covenant. His duty is not considered as persisting and, so to speak, being forever renewed until he actually does that which he promised. On the other hand, if his covenant is to maintain a state or condition of affairs, as, for instance, maintaining a building in repair, keeping the insurance of a life on foot, or affording a particular kind of lateral or vertical support to a tenement, then a further breach arises in every successive moment of time during which the state or condition is not as promised, during which, to pursue the examples, the building is out of repair, the life uninsured, or the particular support unprovided.

The distinction may be difficult of application in a given case, but it must regarded as one depending upon the meaning of the covenant.

Hawkins v Clayton

80 In Hammond v Minister for Works (1992) 8 WAR 505 Ipp J (with whom Rowland and Owen JJ agreed) concluded a lengthy review of the continuing duty cases with this summary (at 516):

In none of the authorities to which we were referred, and which I have read in my own researches, has it been held that a breach of an obligation to perform a single act, by a date capable of determination, results in a fresh cause of action each day there is non-performance. Once the obligation is to be completely discharged by a single act, the failure to perform gives rise to only one cause of action, although that failure to perform may continue indefinitely and the obligation may even be capable of being specifically enforced.

81 At the trial, the plaintiffs put the continuing duty argument as follows in a Précis of Some Submissions in Reply dated 10 February 2004:

33. The defendants also submitted that there was no continuing duty and that on or about 23 August 1988 they performed the obligation or duty to exercise reasonable care in advising as to whether peat was a mineral once for all. That cannot be right, since the obligation or duty was to exercise reasonable care in advising and assisting the relevant plaintiff to obtain and secure the right to mine peat. The pleaded case, in paragraph 6 of the Further Amended Statement of Claim, was that the defendants, or the first defendants, were instructed or retained in connection with the obtaining of a lease over the land and the “… obtaining of all necessary leases, licences and permits from the Victorian government or any relevant governmental authority, agency or department to enable peat to be extracted from the land and to secure the plaintiffs right to do so”.

34. That retainer or obligation was not discharged once for all by the furnishing of wrong advice on 23 August 1988. Thereafter the defendants proffered the real property lease as, when registered, discharging the performance of the duty. That lease was never registered and the defendants were continually engaged until either 1990 or 1991 in seeking to obtain its registration and continuing to advise the plaintiffs in respect of it. Indeed, in his letter to Mr Roach of 28 August 1990, Mr Hutchinson asserted, wrongly that the caveats were “… still protecting your interests”.

82 The portion of par 6 of the Further Amended Statement of Claim referred to in par 33 of this extract was not admitted on the pleadings by FS. Nevertheless, the trial judge found that the 1988 retainer was in effect as broad as the plaintiffs pleaded it was (see J47-54). In particular, the content of the retainer was found to be that FS would provide the following services (J54):

(a) advice as to the Victorian legislation applicable to the extraction of peat;

(b) preparation of documentation to secure Winnote’s interest in the deposit; and

(c) preparation of a shareholders’ agreement and a confidentiality agreement to regulate the relationship between Mr Roach and Mr Luscombe in relation to the joint venture.

83 These were obligations to do definite acts within a reasonable time. The acts were done before the end of 1988 (albeit negligently as regards (a) and (b)).

84 In a situation like the present, the contractual and tortious duties of care were both co-existent and co-terminous. The scope and duration of each depended essentially upon the task for which the solicitors were engaged and which the solicitors embarked upon. There may be cases where some duty to inform or advise outlives the duration of the contractual retainer, but that possibility need not detain us here. Questions of duty, breach and damages in professional negligence claims depend closely upon the scope of the retainer. In both contract and tort, “the duty is to apply the relevant degree of skill and exercise reasonable care to carrying out the task” (Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 53[147] per Malcolm AJA). In not following Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642, in light of later decisions, McPherson AJA stated (Heydon at 118[118]):

… It is no longer possible to say there is a ‘penumbral’ duty in tort requiring a solicitor to advise on matters going beyond the limits of his or her retainer.

Hawkins

85 The critical point argued for by Winnote is that so long as the solicitors were engaged to represent Winnote’s interests referable to the peat deposit transaction (ie until December 1990) their duty to advise how best to secure the ongoing right to mine the peat itself continued and was breached continually. Accordingly, there were breaches after 15 November 1989 which meant that there was no limitation problem for the contract claim or for the tort claim that now focussed exclusively on loss said to have occurred in 1993.

86 The RPL was executed on 7 November 1988 in reliance upon the negligent advice given in August that year. Thereafter Winnote embarked upon mining activities reliant upon its rights under the RPL until Mr Groves’ conduct removed the scales from Mr Roach’s eyes in early 1993.

87 In August 1988 the solicitors had advised Winnote that the RPL should be registered, and they thereafter assumed responsibility in this regard. However, the power to procure registration lay directly with the lessor who (or whose mortgagee) presumably retained the duplicate certificate of title. The RPL contained a clause obliging the lessor to register. Winnote had to pay stamp duty and for a time there was delay at the office of the Victorian Comptroller of Stamps.

88 In February 1989 the solicitors lodged a caveat which itself had to be amended in June 1989 (Blue 13/3349). The case has been fought on the assumption that the RPL was registrable even though its terms disclose a profit à prendre and not a lease. On this assumption (to which the parties ought in fairness to be held), the solicitors’ files were kept open throughout 1989 and 1990.

89 In about February 1989, Mr Sadler’s solicitor disclosed that his client’s land (of which the area covered by the RPL formed was part) had been subdivided (Blue 2314). The lessor sought Winnote’s permission to amend the description of the land area described in the RPL to accord with the lot numbers of his new plan of subdivision, apparently on the basis that the Titles Office would no longer recognise parcels described by reference to their Crown allotment numbers (Blue 3243). FS contacted Mr Roach and sought his instructions. A facsimile dated 6 April 1989 advised Mr Roach (Blue 3244):

Although the newly described Lots appear to coincide with the Crown allotment described in the Lease Agreement, we are unable without conducting further searches to confirm that the area and description of the new described Lots are identical to the Crown allotments. If you are happy with the newly described Lots please advise the writer who will then instruct the landlord’s solicitor to proceed with the registration of the Lease.

90 It would appear that Mr Roach did not give instructions on this matter and this prompted a follow-up communication from FS on 21 June 1989 (Blue 3330). FS was at the same time communicating concern about the legal costs that remained unpaid.

91 Winnote does not suggest that its contractual rights under the RPL were prejudiced by the registration of the plan of subdivision, beyond complaint that Winnote became exposed to the potential of dealing with multiple landlords (14). This inevitable incident of the RPL was a detriment contrasted with the situation that would have prevailed under a mining tenement. If the problem generated measurable damage it would be another instance of damage first occurring outside the limitation period.

92 The delay in obtaining registration became a matter of considerable agitation to Mr Roach and he hounded FS about it, sometimes blaming them (as distinct from the lessor) for the past and continuing holdups. Thus, for example, he faxed FS on 31 May 1990 as follows (Blue 13/3475):

RE: SADLER & WINNOTE P/L LEASE

We have not received a copy of the above lease (although prepared in 1988).

It appears the lease has never been registered.

It also appears no search was done on the property when the lease was prepared and “old” titles appear on the document.

A new subdivision has recently been granted (approved).

It is urgent that this matter be resolved.

93 On 14 June 1990 FS faxed Mr Roach confirming his instructions to carry out a title search on the leased property (Blue 14/3493). The fax summarised various matters still to be attended to by Mr Roach in order to finalise the transaction. These included:

You have yet to instruct whether the amendments to the title description of the property as suggested by [the lessor’s solicitors] are acceptable.

94 The title conferred under the RPL was never at risk. Caveats were in place and Winnote was in visible occupation of the relevant part of Mr Sadler’s land. Winnote was able to enter into negotiations with Mr Groves with a view to assigning the RPL. There were dealings between Sadler and Winnote in 1992-93 in which each party purported to enforce rights under the RPL including, in Winnote’s case, a belated attempt to exercise the option to renew.

95 There is a live issue as to whether these lease registration problems bore upon Winnote’s capacity to exploit the deposit and/or Mr Roach’s decision to abandon production and sell the deposit to Mr Groves. But what is presently important is that both client and solicitors conducted themselves throughout 1989 and 1990 on the basis that the retainer would only be fully performed when registration of the RPL was procured. It was a dispute over costs that caused the final rupture in December 1990.

96 To show that the file remained open with RPL registration work yet to be performed does not resolve the limitation issue in favour of Winnote. A closer analysis is required.

97 Winnote relies on a passage in the judgment of Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] Ch 384 at 438:

The defendants here never treated themselves as functi officio in relation to the option. They kept the document on Geoffrey’s behalf in their strongroom. They opened a file relating to the matter. They were consulted about it at intervals over the next 6½ years. In my judgment the obligation to register which they assumed when they were first consulted continued to bind them. It was an obligation to protect the interest from third parties by registration and without their client’s knowledge they failed to perform it until it ceased to be effectively capable of performance on August 17, 1967. It seems to me that it was then that the contract was broken once and for all.

98 In my view, this passage does not assist Winnote on the limitation point. The negligence in Midland Bank consisted of the solicitor’s omission to register an option to purchase as a land charge. It was a case of simple nonfeasance (Bell at 507). Non-registration meant that the option was defeated by the sale of the land to a third party. Registration of the option was part and parcel of the proper handling of the conveyancing transaction actually embarked upon. The duty assumed by the solicitor did not involve the giving of advice.

99 Oliver J emphasised that the breach was in the nature of simple non-feasance. In this sense, it involved failure to attend to a continuing duty. His Lordship contrasted the situation of negligent advice, pointing out that such a breach generally occurs once and for all. The following passage (at 435) makes this plain:

It is, I think, important in this case to note that it is not a case of the giving of wrong and negligent advice – where the breach of contract necessarily occurs at a fixed point in time – but of simple non-feasance. If one were to seek to write out in longhand the obligations which Mr Stubbs senior assumed when he engaged to act in the matter of the grant of the option, they were (1) to draw and have completed a proper and enforceable option agreement which would bind the parties; (2) to take such steps as were necessary and practicable to ensure that it was binding on the land into whosoever hands it might come before any third party acquired a legal estate; and (3) to carry out work with the care and skill which a normally competent practitioner would bring to it.

So far as the client is concerned, it is a matter of total indifference to him at what date the solicitor chooses to fulfil his contractual obligation under (2) above so long as it is effectively fulfilled. No doubt a normally careful practitioner would fulfil that obligation as soon as is reasonably practicable. In an appropriate case he might give a priority notice. But if he fails to do so and an effective registration can still be and is effected, his client can have no complaint except the purely technical one that he has been a bit careless and might have done it sooner. He has, no doubt, exhibited a failure to show the normal competence and care for his client’s affairs by carelessly allowing a period to elapse during which a third party might have, but has not in fact, acquired an interest. But such a failure cannot, I should have thought, affect, much less discharge, the primary obligation to effect registration timeously, which continues until it is performed or becomes impossible of performance or until the client elects to treat the continued non-performance as a repudiation of the contract.

Suppose that Mr Stubbs had woken up to the fact that he had failed to register the option in, say, May 1961 and had then registered it. And suppose that, four years later, Geoffrey had caused a search to be made and had discovered that the charge had not been registered until two months after the date of the option? Could Geoffrey have successfully sued the firm for breach of contract on alleging those facts? Mr Gatehouse says yes. There would he says have been a technical cause of action for breach of the duty to exercise reasonable care and skill which would have entitled Geoffrey to nominal damages. I think that the action would have been struck out as an abuse of the process of the court.

100 In the present case non-registration of the RPL was not the negligence sued upon. On the contrary, the gravamen of Winnote’s complaint is that matters took a wrong turn in August 1988 when, in consequence of negligent advice, Winnote and Freehills proceeded down the RPL track instead of the mining tenement track. The negligence established relates to the advice then given.

101 The respondents submit that any failure to revisit and correct that advice in and after 1989 was a failure to remedy the existing breach, not the commission of a further breach. I agree. The solicitors did not have a legal duty to disclose their own negligence of which they were ignorant (Wood v Jones (1889) 61 LT 551). No such duty was alleged, in any event.

102 There is another passage in Midland Bank, relied on by the respondents. Oliver J said (at 402-3):

Now no doubt the duties owed by a solicitor to his client are high, in the sense that he holds himself out as practising a highly skilled and exacting profession, but I think that the court must beware of imposing on solicitors, or on professional men in other spheres, duties which go beyond the scope of what they are requested and undertake to do. It may be that a particularly meticulous and conscientious practitioner would, in his client's general interests, take it on himself to pursue a line of enquiry beyond the strict limits comprehended by his instructions. But that is not the test. The test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession, and cases such as

Duchess of Argyll v Beuselinch

[1972] 2 Lloyd's Rep 172,

Griffiths v Evans

[1953] 2 All ER 1364, [1953] 1 WLR 1424 and

Hall v Meyrick

[1957] 2 All ER 722, [1957] 2 QB 455 demonstrate that the duty is directly related to the confines of the retainer. It is not seriously arguable that a solicitor who or whose firm has acted negligently comes under a continuing duty to take care to remind himself of the negligence of which, ex hypothesi, he is unaware (see, for example, Kekewich J in

Wood v Jones

(1889) 61 LT 551 at 552) but counsel for the plaintiffs suggests that in this case, because the exercise of the option was crucial to the scheme which Geoffrey was proposing in June 1967, it then became Mr Kenneth Stubbs's duty to consider and check on the registration of the option. But that was not what he was asked to do. The instructions were given in the context of an agreement between father and son who were on friendly terms and against the background that Mr Stubbs's firm had, for years, acted as solicitors for both parties and would expect to know if Walter was contemplating any sale of his property. Mr Kenneth Stubbs told me, and I accept, that he had heard of no family discord and Geoffrey's own evidence, in the affidavit to which I have made previous reference, was that he had not quarreled with his father. Furthermore, only in the previous year, Walter had, to Mr Kenneth Stubbs's knowledge, concurred with Geoffrey in the arrangements over Poplar and Walk Farms, all of which pointed to the existence of harmonious family relationships.

103 Three matters can be derived from the passages quoted from Midland Bank.

104 First, to identify a relevant continuing duty, it must still be an aspect of the retainer at the supposed time of breach. Thus, it was always part of the solicitor’s duty in Midland to register the option, but it was not part of his assumed retainer to keep asking himself whether he had earlier been negligent with a view to informing the client if he discovered that he had.

105 Secondly, the question whether an omission is negligent has to be determined at the time when it is said to have occurred and by reference to the context at that time.

106 Thirdly, there is a categorical difference between the giving of negligent advice, which occurs when and whenever it is provided, and the continued failure to perform a step in a transaction embarked upon on instructions.

107 Cases involving negligence by a solicitor who fails to commence proceedings within time do not assist Winnote. A solicitor who is instructed to commence proceedings and armed with sufficient information to do so commits a breach of the retainer each day after there has been a reasonable time to act on the instructions. Assuming the client had a viable cause of action, there is measurable damage when it becomes statute-barred and time commences to run in favour of the solicitor from that date, as regards negligent failure to carry out the instructions (see Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394 at 403-4).

108 Winnote has failed to show either that the retainer embarked upon in 1988 had relevant work to do in the now critical late 1989 and 1990 time period or that it was negligent at that later time for the solicitors to have then failed to give the correct advice. The omitted advice, according to the pleadings, is the same advice as that which should have been given in 1988.

109 During oral submissions, Winnote’s counsel suggested that the retainer incorporated some kind of obligation to correct or keep under review any advice given about a lease, licence or permit needed to extract peat. But no such obligation was pleaded, nor was there evidence directed to this aspect of a solicitor’s duties, generally or in the particular case. A retainer that required matters to be kept under constant review in such a way would have costs implications for the client. After the advice of 23 August 1988 had been given, attention turned to the practical matters of drafting the RPL, its execution, stamping and registration, lodgement of caveats pending registration and so on. FS was never instructed to review its earlier advice or to carry out fresh or later investigation as to the status of peat under the Victorian legislation.

110 Winnote’s submissions on breach of a continuing duty elide its need to establish both that the duty to exercise care in giving the omitted advice continued after 15 November 1989 and that it was breached after that date. There are no findings on either matter. As indicated, Sperling J thought that the continuing duty issue was not pressed; and his findings as to breach were confined to 1988.

111 Accordingly, there was no relevant continuing duty and no fresh or continuing breach of such a duty. This is sufficient to dispose of the continuing duty submissions. In the circumstances, I merely record that the respondents have submitted that there is a further hurdle in the way. We were referred to the statement by Glass JA in Hawkins (at 124) that:

Assuming a continuing duty of care, a fresh cause of action will only arise if a fresh breach causes loss going beyond the loss resulting from the barred cause of action.

Sheldon v McBeath

112 All claims were statute-barred. For that reason alone the appeal should be dismissed.

Sperling J’s conclusions on the valuation case and the valuation issues on appeal

113 Subject to the limitation issue, to succeed in a claim for expectation damages Winnote has to prove on the balance of probabilities that its expectation of a certain outcome, as a result of performance of the contract, had a likelihood of attainment rather than being mere expectation (Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80 per Mason CJ and Dawson J. See also per Deane J at 118).

114 As indicated, the question posed for and addressed by the trial judge was whether the Colac peat deposit that was effectively lost to Mr Groves in 1993 had any, and if so, what value as at that date. The parties joined issue on the question as to the value of an exclusive right to exploit the deposit as from 1993, this being the object that Winnote effectively and completely lost that year (see J317-319, 334). This was held to be equivalent to the loss of a mining lease over the deposit as from 1993 (J321-2). I have already indicated why I have difficulty accepting that 1993 was the correct year to do the valuation exercise.

115 At first instance, Winnote’s expectation damages valuation case had three alternative arms each of which was relied upon to show that something of real value was lost in 1993: first Winnote relied upon the discounted cash-flow (DCF) method of valuing; secondly, it pointed to an actual sale of the very asset in question in 2002 (the Whinners transaction); and, thirdly, it pointed to evidence focussing on two particular sale lines during the period 1993 to date (the alternative valuation exercise).

116 The plaintiffs failed to establish any value (J505). The judge’s reasoning can be summarised in five propositions:

1. Winnote’s discounted cash flow (DCF) valuation exercise was rejected because there was no history of profitable trading nor any basis for assuming a turnaround (J375, 427);

2. The respondents’ DCF evidence establishing a negative value was accepted (J456);

3. Winnote’s alternative valuation exercise did not establish that the deposit had any commercial value (J495);

4. The Whinners transaction of 2002 did not satisfy the judge that the deposit had a value in 1993 (J446); and

117 In this Court, Winnote no longer presses 1 and relies but lightly on 3. The principal lines of attack (and defence by the respondents) were directed at the judge’s conclusions in 2, 4 and 5.

118 It remains necessary to examine 1 because it formed a major plank in the plaintiffs’ case at trial and because Mr Bryant’s alternative DCF exercise adopted the methodology of the plaintiffs’ valuers, applying it to alternative data which the trial judge accepted. In other words, the reasons for rejecting Winnote’s DCF valuation were largely the reasons for accepting Mr Bryant.

119 The valuation issues must be examined in the context of the dealings with the peat deposit over the years 1988 to 2003.

Dealings with the peat deposit: 1988-2003

120 The peat basin at Swan Marsh near Colac covers an area of approximately 6.5km² roughly in the shape of a hambone. In 2000 consulting geologists estimated the resource to contain 13.3 million m³ of peat.

121 As Sperling J remarked (J335):

Peat was a marketable product in Australia in 1993 and thereafter. But it is not self-evident that a marketable substance which is in the ground has a value. There are many deposits of marketable substances which have no value because the substance cannot be extracted and sold at a profit.

122 The black peat at Colac was suitable for growing mushrooms as well as for general horticultural purposes. It became common ground at trial that the potential geographical market was in Victoria, New South Wales and South Australia as well as overseas. The main competition in the three Australian states was from overseas peat.

299 A particular complaint in this regard was directed at the terseness of reasoning touching the Whinners transaction that was promoted to the front rank of Winnote’s case in this Court. As indicated, I have examined with added care the factual material lying behind the judge’s conclusions on this topic. In my view, they are not attended by any substantial error.

300 The respondents support the trial judge, submitting that the professed concerns based on non-registration were feigned or exaggerated; and that they did not impact on Mr Roach’s informed perception that the deposit was near worthless in 1993.

301 There was a hard-fought issue at trial as to the reasons moving Mr Roach to become agreeable to sell to Mr Groves on the terms discussed. It became common ground, certainly by the appeal stage, that the issue is relevant only so far as it reinforces or undermines the inference that Mr Roach perceived that the deposit had the sale value being negotiated.

302 Winnote submits, in brief, that Mr Roach was willing to sell well below what he thought the deposit to be worth because of problems stemming from non-registration of the RPL and the threats of forfeiture emanating from the lessor in the context of the non-existent s17A permit. It is further submitted that to focus on the RPL as representing the deposit is fallacious because, had negligence been absent, Winnote would have had a mining lease which would not have carried the RPL’s $10,000 pa minimum royalty payment and would have been easier to retain during and beyond the difficult days of the recession of the early 1990s.

303 The submissions based upon the hypothetical burden of the $10,000pa provision in the RPL do not lie easily with Mr Roach’s initial concerns expressed to FS in 1988 about the RPL then under consideration confining him to a “backyard operation” (Blue 11/2619).

304 Issues of credibility were significant. Mr Roach swore that, if he had held an exploration licence and a mining lease instead of the RPL, he would not have agreed to sell out to Mr Groves for $40,000 or at all in late 1992/93. He said that he would have continued to hold the mining tenements until such time as he regarded the economic climate right for the full exploitation of the peat resource. The climate was not appropriate in 1992/93 (Blue 72, 114, Black 344). This evidence was bolstered by reference to the fact that the RPL contained the $10,000 minimum royalty obligation, something that would have been absent under a mining tenement. The trial judge was aware of these matters (see J223).

305 Mr Roach also swore that he concluded it was no longer feasible to continue to plough his own money into the project because the RPL was unregistered. He adopted the strategy of entering into something of a “holding pattern” (Blue 71).

306 He also stated that the representations made in the s17A application form “deliberately underplayed the viability of the Deposit, on advice, as I did not wish to be put in a position by the Department that would require an expensive Environmental Impact Statement which may have cost in the order of $500,000 as I still did not have control of the Peat Deposit” (Blue 79).

307 In my view, it was well open to the judge to reject this testimony of Mr Roach whose evidence on the topic was vigorously challenged in cross-examination, as well as by reference to the inconsistent contemporaneous documents. (The detailed transcript references are set out in a Schedule provided by the respondents in the appeal.)

308 Mr Roach’s evidence given many years after the event did not explain his large expenditure on research and development in the early years (when the RPL was also unregistered). The evidence was also at odds with statements Mr Roach made at the time to the effect that he regarded the caveat as protecting Winnote’s legal title under the RPL. There were long periods during which Mr Roach did not respond to letters asking for information needed by the lawyers to hasten the registration process. The “holding pattern” assertion did not fit with his (unsuccessful) endeavours in the early 1990s at the time to create a stockpile of peat and extend Winnote’s market penetration.

309 Mr Roach’s attempts to falsify his own statements to the Department of Conservation were themselves unconvincing and discrediting (Black 1/294-298). For a time he sought to distinguish between his and Winnote’s view, before conceding that each considered the site was not commercial. He asserted that non-registration of the RPL had impeded taking the project to a venture capitalist, then conceded that his own company was the venture capitalist in contemplation (Black 297).

310 Mr Roach identified his lawyer, Mr Galante, as the person who advised him to deliberately underplay the viability of the deposit. It was put to him that this was a lie (Black 474). Mr Galante was not called.

311 Sperling J made specific adverse credibility findings against Mr Roach on two matters, one of which reflected badly on his professed capacity to recall, the other reflecting on inconsistencies in his evidence and on his commercial morality (J240-1, 276-9). And his Honour expressly rejected Mr Roach’s testimony as to the impact of the non-registration concerns on his true reasons for being eager to sell the deposit (J227). In my view, it was well open for the judge to do so, in light of the matters conceded in cross-examination, the lapse of years between the events in question and the date of trial, and the contemporaneous documents. One may be prepared to accept Mr Roach’s assertion that a registered RPL would have been necessary before a bank or venture capitalist bought into the venture. But it is a different thing altogether to say that a registered RPL would have had value. In pressing the case that it did, Mr Roach and Winnote at times came close to the fallacy that the judge was accused of committing, namely overlooking that what Winnote claims to have lost were the mining tenements it would have acquired (in 1988) had negligence not occurred.

312 The Groves negotiations did not culminate in a sale and their evidentiary status as a direct indicator of precise value is problematic, as the trial judge recognised (J452). Winnote submits that evidence of an offer is not evidence of value (McDonald v Deputy Federal Commission of Land Tax (NSW) (1915) 20 CLR 231). The respondents deny any such principle (see MMAL Rentals Pty Ltd v Bruning [2004] 63 NSWLR 167 at 182[84]-[99]). This legal controversy need not detain us, because the Groves negotiations are, in my view, available to be used as admissions against Winnote. These negotiations were the conduct and statements of Winnote and of the company’s two shareholders and directors, Messrs Roach and Luscombe (Black 422, 425). It was the conduct of people under a degree of pressure due to financial stringencies (as the judge recognised), but it was the conduct of informed participants, based upon knowledge acquired over the previous five years.

313 More to the point, it is wrong to focus on the Groves negotiations in isolation. It is, I believe, important to observe that the proposed sale to Groves was the culmination of a process that came to a head in late 1992. Mr Roach formed the view that the deposit was uncommercial, largely because Colac peat had difficulty competing with imported peat. Considerable expenditure on research and development had only confirmed this prognosis. In September 1992 Mr Roach wrote in his diary “organise sale of peat bog”. He was willing to surrender the RPL. He knew that, if the venture continued, the cost of complying with s17A would become significant over time. In the hypothetical calculus, he must be taken to have known that, if he had held tenements under the Mines Act, he would have been obliged to incur considerable expenditure in meeting the minimum expenditure and employment conditions they entailed.

314 As indicated, Winnote’s peat mining business was not profitable in the years 1988-1993. This, despite Mr Roach and his company Roach Industries putting considerable money into the venture for research and development, including market development.

315 By November 1992, Mr Roach had it firmly in mind to dispose of Winnote’s interest in the peat deposit one way or another. His view was that the venture was uncommercial. He had been unable to compete successfully with the imported peats. He advertised without success in The Age for a joint venture partner and distributor for some time before November 1992 (Black 2/333).

316 It was not until well into 1993 that Mr Roach perceived that Winnote’s interests under the RPL had failed to secure the arrangement he had negotiated with Revili and Mr Sadler to acquire long-term rights over the deposit in 1988. In other words, his actions were not the product of any subjective perception based on the inadequacies of the RPL compared to mining tenements.

317 Given his perception that the right to mine on terms agreeable to Mr Sadler was embodied in the RPL, Mr Roach was anxious to secure registration of the RPL, to prevent its forfeiture, and prepared (unless sale eventuated beforehand) to exercise the right of renewal that would extend the RPL beyond 30 June 1993. He also knew that his rights under the RPL were protected by Winnote being in occupation and by the caveats that were in place.

318 The trial judge summarised the position at the beginning of 1993 (J184):

To summarise, as best as can be discerned the peat mining business ran at a loss in four of the five years ended 30 June 1989 to 1993, including the last three of those years. In the last of those three years the loss exceeded $100,000. As at January 1993, the business had run continuously at a loss for some two and a half years at least, and there was no immediate prospect of improvement.

319 His Honour found in effect that Mr Roach was eager to sell out (J188).

320 I am therefore unable to find error in the conclusion that the events of 1992-93 were a significant pointer to the absence of value in the lost deposit (as at 1993).

321 Winnote’s challenge to the conclusion that nothing of value was lost therefore fails.

Remaining issues

322 The primary judge found breach against FM, but not FS. As to FS he held that Mr Cottee properly sought advice from FM on the question whether peat had been brought within the ambit of the Victorian legislation by proclamation. Mr Cottee was advised orally by Mr Eager (FM) that the Victorian Mining legislation did not apply (J70-79). His Honour concluded that, in view of that advice and Mr Eager’s standing, Mr Cottee was entitled to treat FM’s earlier letter of 23 August 1988 as being unreliable in so far as it expressed a doubt in that regard (J91).

323 Winnote submits that this point was neither pleaded nor contended for at trial. Nor was it raised by the judge during oral address.

324 Winnote is wrong on the pleading point, because breach of duty was specifically denied, but otherwise correct about the matter not having been debated. The parties agree that the possibility of distinguishing between the two firms on the issue of breach was not ventilated at trial.

325 FS nevertheless supports the reasoning of Sperling J.

326 I see difficulties with the finding that FS was not in breach, although it is unnecessary to resolve them in light of the earlier conclusions. FS had held itself out to Mr Roach as having general expertise in mining law and as able to accept the retainer. Mr Cottee adverted in his mind to the question whether or not the peat deposit fell under any of the Victorian mining legislation. Mr Eager’s letter of 23 August 1988 expressed no “concluded opinion” on the critical matter, while discussing the “practice” of the Victorian mines department. There is much to be said for the submission that the solicitor who was dealing with the client pursuant to FS’s contractual retainer ought to have taken the matter further before proceeding down the RPL track. As Sperling J observed, the advice in the letter from FM was far from definite (J67).

327 I also record that Winnote further submits that FS was vicariously liable in any event for the negligence of its agent, FM (see Ex parte Colonial Petroleum Oil Pty Ltd (1944) 44 SR(NSW) 306 at 308). FS contends that this basis of liability was never pleaded. This prompted a late proposed amendment, without admission that it was required (CA Tr p376). The amendment was opposed.

328 In the upshot, it is unnecessary to resolve these issues just as it has been unnecessary to address all of the respondents’ arguments in the appeal.

329 The respondents submitted that costs should be awarded against both appellants if the appeal is generally dismissed.

330 Three broad reasons are advanced. I agree with them, subject to the comments added below.

331 The first is the overlapping nature of the grounds of appeal which mean that almost all of the appeal was brought substantially for the benefit of both appellants. Mr Roach acquired all of the shares in Winnote on 5 March 1993 (J209). Grounds 1-6 of the Notice of Appeal refer expressly to both appellants. Ground 7 only concerns Winnote and ground 8 is concerned only with Mr Roach. However, ground 8 is to the effect that the trial judge erred in holding that Mr Roach suffered no loss or damage. This brought into play, so far as Mr Roach was concerned, most of the other grounds of appeal, which (save for those concerning reliance damages) addressed the value of the opportunity to exploit the deposit or the value of the deposit itself.

332 Massive written submissions were exchanged prior to the hearing of the appeal. It was only on the first day of the appeal that the Court and the respondents were informed that the grounds of appeal relating to Mr Roach were not to be pressed.

333 Secondly, regardless of the fact that Mr Roach’s grounds of appeal were ultimately not pressed, he stood to benefit indirectly if Winnote’s appeal was successful. This had been common ground on the respondents’ application for security for costs referred to below. It is true, as the appellants submit, that any benefit that Mr Roach might have received would depend upon the costs of the liquidation and the nature and extent of other claims. But it is difficult to imagine that Winnote’s liquidation would not have produced a most substantial return to Mr Roach, as the sole shareholder, had damages been awarded in the range of what was claimed.

334 Thirdly, the respondents’ application for security for costs against Winnote was refused for the sole reason that it was highly likely that costs would be awarded against both appellants if the appeal failed (see Winnote Pty Ltd v Page & Ors [2005] NSWCA 362, 62 NSWLR 244 at [43]). The relevant part of my reasons for judgment on that application was as follows:

41 The grounds of appeal and submissions filed in their support indicate that the overwhelming thrust of the appellants’ argument will be directed at matters that are either common to each appellant or supportive only of the case of the corporate appellant. This said, Mr Roach’s continuing role as a co-appellant who has an indirect interest in Winnote succeeding strongly suggests that, if the appeal fails, costs will be ordered against the appellants jointly, as occurred below.

42 It is undoubtedly the case that both Mr Roach and the funder have significant financial interests in the outcome of the appeal. It is also true that each in a sense shelters behind the impecunious Winnote without expressly volunteering to underwrite the costs of the appeal. These matters clearly engage the power to order security and firmly predispose in favour of granting it.

43 Nevertheless, an order for security should not be made unless it is called for. The continuing presence of Mr Roach (apparently a man of substantial means) shows that it is not called for, so long as it remains highly likely that costs would be awarded against both appellants if the appeal fails.

335 It is not that these reasons created a presumptive right in favour or the respondents to obtain the costs order they now seek. Nor is it relevant that security was not sought against Mr Roach personally. But what is relevant is that the security for costs application was disposed of in circumstances that entitled the respondents to perceive that the appellants were proceeding in tandem, and effectively for their mutual benefit. This reasonable perception continued up to and during the hearing itself.

336 It is therefore appropriate to order costs against each appellant.

337 There was a cross-appeal filed defensively and advanced tentatively. In the circumstances it is unnecessary for it to be addressed and it should be dismissed. I am presently of the view that there should be no order as to costs, because the cross-appeal occupied a minuscule part of the written and oral submissions in the appeal. I note that the appellants contend in a recent submission that it is premature to make submissions in relation to this issue. I do not agree, but would reserve liberty to apply within 7 days on this matter. The appellants should appreciate that they may be at risk as regards costs wasted due to this costs matter not being dealt with finally in the submissions to date.

338 I therefore propose the following orders:

1. Appeal dismissed.

2. Respondents’ costs to be paid by the appellants Mr Roach and Winnote Pty Ltd.

3. Cross appeal dismissed with no order as to costs.

339 There is an outstanding Summons for leave to appeal filed by the solicitors in relation to a costs issue (CA 40075 of 2005). It should be listed for directions on a date not less than 28 days from the pronouncement of the above orders in the main appeal.

340 TOBIAS JA: I agree with Mason P.

341 BASTEN JA: I agree with the orders proposed by the President, on the basis that no material error was established in relation to the conclusion reached by the trial judge that nothing of value had been lost as a result of the negligence of the Respondents. However, I would not join in the reasons relating to the limitation issues at [33]-[111] and the conclusion that the appeal should be dismissed because all claims were statute barred: at [112].

342 For the purposes of the Limitation Act, to be maintainable in these proceedings the relevant cause of action had to accrue after 15 November 1989. If it did not, the conclusion reached by the President must be correct. At the heart of this aspect of the Appellants’ case were two propositions. The first was that relevant measurable damage, as opposed to contingent or prospective loss, did not occur until 1993, when Mr Groves obtained a mining lease over the peat deposit, thus precluding the acquisition by the Appellants of the appropriate mining tenement, giving title to the deposit. Secondly, they contend that, even if there had been measurable damage prior to November 1989, the Respondents were under a continuing duty, breach of which continued until 1993.

343 The Respondents contend that any cause of action for their negligence must have arisen in 1988, when the Appellants obtained a real property lease which was worthless in legal terms and was derisively characterised by counsel as a “lemon”, or, in the metaphor adopted in English authority, “damaged goods”.

344 Metaphors can be misleading because they may conceal significant distinctions: see Law Society v Sephton & Co [2006] 2 WLR 1091 at [51] (Lord Walker of Gestingthorpe). Some of the cases relied upon by the Respondents and discussed by the President are distinguishable. Thus, where the negligence gives rise to a contractual relationship, legal interests are created in two parties, which cannot be varied except by consent. Examples may include entering into a mortgage, as in Forster v Outred & Co [1982] 1 WLR 86 and entering into a contract of employment without restrictive covenants: see D W Moore & Co Ltd v Ferrier [1988] 1 WLR 267. However, an inflexible approach based on the creation of a legal obligation is not the law in Australia. If it were, entering into a guarantee as a result of negligent advice would start the clock running for limitation purposes. In Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, the High Court held that that was not the case. Of the English cases, the joint judgment of Mason CJ, Dawson, Gaudron and McHugh JJ, stated at 532:

“If, contrary to the view we have just expressed, the English decisions properly understood support the proposition that where, as a result of the defendant’s negligent misrepresentation, the plaintiff enters into a contract which exposes him or her to a contingent loss or liability, the plaintiff first suffers loss or damage on entry into the contract, we do not agree with them. In our opinion, in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred.”

345 At [45] above the President sets out a passage from the opinion of Lord Mance in Law Society v Sephton & Co [2006] 2 WLR 1091 at [67] which commences:

“There is considerable case-law concerning situations where a person's legal position has, through negligence, been altered to his immediate, measurable economic disadvantage, and it has been held that a cause of action accrued although the beneficiary neither knew nor had any reason to know about its existence.”

346 In Sephton at [69] Lord Mance stated:

“A similar line of authority establishes that the cause of action against a solicitor whose negligence deprives his client of a claim which the solicitor was engaged to pursue accrues when the claim becomes time barred or liable to be struck out for want of prosecution (thereby obviously eliminating or reducing the value of any claim) … .”

347 Lord Mance continued at [70]:

“In all these cases except

[1982] 1 WLR 86 the defendant failed to preserve or procure for the claimant an asset (including a particular chose in action) which could and should have been preserved or protected by proper performance of the defendant’s duty in relation to the transaction affecting the claimant’s legal position. In

the claimant’s case was that, but for the defendant’s negligence, she would never have entered into the transaction at all. But in that case, by doing so, she clearly depreciated the value of her house in a measurable way. However, while a defendant’s failure to preserve or protect a particular asset by proper performance of his duty in relation to a particular transaction may readily be seen to have caused measurable loss, negligence causing a claimant to enter into a transaction which he would not otherwise have entered may not immediately, or indeed ever, cause measurable loss to any particular asset.”

348 A similar point was made by Lord Hoffmann at [21]; the underlying rationale appears to have been that the alternative benefit was no longer, in practical terms, available. All of their Lordships appear to have accepted the approach adopted in Wardley that Forster turned on the fact that the registration of the mortgage immediately lowered the value of the specific property affected: at [17]-[18] (Lord Hoffmann); at [49] (Lord Walker of Gestingthorpe; at [33] (Lord Scott of Foscote); at [36] (Lord Rodger of Earlsferry); at [74]-[75] (Lord Mance).

349 Sephton was, in a sense, an easier case than Wardley. It involved a claim by the Law Society against an accountant who had been negligent in auditing trust account records of a solicitor and who had thus failed to identify defalcations as they occurred. The liability of the Law Society to the solicitor’s clients arose under a statutory scheme, their Lordships holding that no measurable loss was suffered until a claim was made under the scheme.

350 Bell v Peter Browne& Co [1990] 2 QB 495 post-dated Wardley. On separation from his wife, Mr Bell agreed to transfer to her his interest in the matrimonial home, in return for a one-sixth share of the net proceeds of sale, when the house was sold. His solicitor failed to protect his interest, either by obtaining his wife’s signature on a declaration of trust, or by lodging a caveat over the title: p 502D (Nicholls LJ). The transfer took place in 1978, his former wife selling the house, without accounting to him for any part of the proceeds, in 1986. By the time he learned of the sale, she had spent the proceeds: p 505B. The first failure of duty identified by Nicholls LJ was the solicitor’s failure to obtain the wife’s signature on a declaration of trust with respect to the husband’s interest: p 502D. Damage was sustained in relation to that breach when the transfer of the husband’s interest was executed and delivered. The second breach of duty arose from the failure to lodge a caveat on the title, a breach which was remediable until the sale of the house. Damage was held to have accrued, consistently with Forster v Outred & Co, at the time the solicitors allowed Mr Bell to transfer his share of the property, without protecting his residual interest. Accordingly, the case was treated in Sephton as one falling within the same principle as Forster v Outred & Co: at [22] (Lord Hoffmann); [45] (Lord Walker) and [67] (Lord Mance).

351 A clearer case, with a similar result, in this Court was Scarcella v Lettice (2000) 51 NSWLR 302. That was a case in which two clients purchased a property, with the assistance of a solicitor, but failed to obtain the benefits which they sought. The property was divided by an escarpment so that access to the rear section of the property required a right of way from a public road over neighbouring land. Despite the existence of a marked carriageway, there was no right of way over the adjoining land to the rear section of the property, and the negligence of the solicitors failed to identify that defect. Once the purchase had been completed, it was a defect which was not capable of being remedied. It followed that, although the purchasers may have been unaware of the fact, they suffered a loss upon completion of the purchase.

352 Scarcella may in turn be distinguished from the later decision of this Court in Segal v Fleming [2002] NSWCA 262. In that case, Mr Fleming and his sister owned lots 1 and 2, 82 Wolseley Road, Point Piper. Lot 1 had a thin strip of land running down the side of lot 2, which was a means of access from Wolseley Road to lot 1. In 1976, a right of way in favour of lot 2 was created over that slip of land. In 1983, Mr Fleming (and his sister) purchased lot 2. In September 1986, Mr Fleming told his solicitor (Segal) to extinguish the 1976 right of way over the thin strip of lot 1 adjoining lot 2. In October 1986 Mr Fleming (and his sister) sold lot 2 to a Mr Toltz. The contract of sale acknowledged that the right of way in favour of lot 2 was to be extinguished. In April 1994, Mr Toltz inquired of Fleming as to the extinguishment of the right of way, which he said had not been removed from the title. In September 1994 Mr Toltz entered into an agreement for sale of the land to Mr Smouha and Ms Ho. In July 1996 Mr Smouha and Ms Ho commenced proceedings seeking a declaration that they were entitled to the 1976 right of way over the strip of lot 1 which adjoined their block.

353 In Segal Hodgson JA held that although the solicitor had failed to act as instructed in September 1986, so long as Mr Toltz owned lot 2 the error could have been rectified and the loss, up until September 1994, was only contingent or prospective: at [33] and [34]. Accordingly the proceedings, commenced in June 2000 against the solicitor, Mr Segal, were within time. The effect of the failure to remove the right of way was not to diminish the value of the property retained by Mr Fleming and his sister, but to deny a beneficial increase in value. So long as that beneficial increase could be obtained, the loss of the benefit remained contingent.

354 That analysis was confirmed in Lee v Brand [2003] NSWCA 198 (Hodgson JA at [71], Sheller and Tobias JJA agreeing). It was applied in Wardman v Hatfield [2003] NSWCA 283 at [12] (Tobias JA, Meagher JA and Foster AJA agreeing).

355 By similar reasoning in the present case, it is arguable that, so long as the mining tenement was available, the Appellants did not suffer a loss through the failure of the solicitors to obtain it. That conclusion was resisted by the Respondents on the basis that, despite the availability of the mining tenement until 1993, the Appellants had suffered a loss in 1989 when they obtained a real property lease.

356 With respect to this argument, the mere entering into an agreement providing benefits less valuable than those which should have been obtained, absent negligence, does not demonstrate financial loss: see Wardley, 175 CLR at 530-531. The joint judgment noted the remarks of Dixon J in Potts v Miller (1940) 64 CLR 282 at 297 that the measure of damages in deceit consisted of “the loss or expenditure incurred by the plaintiff in consequence of the inducement upon which he relied, diminished by any corresponding advantage in money or money’s worth obtained by him on the other side”. The joint judgment continued (p 530):

“It is that amount that, in such a case, represents ‘the prejudice or disadvantage’ the plaintiff ‘has suffered in consequence of his altering his position under the inducement of the fraudulent misrepresentations made by the defendant’ (

(1952) 87 CLR 647 at p 650), subject to any consequential damage. Putting aside the incurring of expenditure, these statements might be thought to indicate that a plaintiff does not sustain loss until that loss is ascertained or, at least, is capable of ascertainment.”

357 In the present case, the Appellants incurred expenditure of two kinds. The first were the legal costs involved in the preparation and execution of the real property lease. However, they should not be treated separately: were it otherwise, the guarantor in Wardley could not have succeeded. The reason for that approach is that legal costs should be seen as part of the second category of financial expenditure, namely the whole of the expenditure which resulted from the execution and carrying into effect of the real property lease. The expenditure on exploitation of the peat deposit was expenditure which would have been incurred in any event, had the mining tenement been obtained. If the mining tenement had proved to be of value, it was not demonstrated that this expenditure was “wasted” and the exposure to a claim in conversion by the State of Victoria, referred to by the President at [61] above, was a matter for speculation. Had such a claim been brought, Winnote might have been able to recoup payments from the lessor: at the very least, no actual loss has been demonstrated, despite the position as to the exploitation of the peat having become known to the Victorian Government, through the application for a licence under the Soil Conservation and Land Utilization Act 1958 (Vic), s 17A, in 1993. It is difficult to see this potential loss as falling into a different category from the trust account defalcations in Sephton, which were held not to constitute loss incurred by the Law Society, at least until a claim was made on the statutory fund by the third party clients of the solicitor.

358 In this case, the limitation argument may be tested by the hypothesis that, after 1993, Winnote proved that the loss of the mining tenement involved actual financial loss to it. Actual financial loss could only be assessed by taking account of expenditure as well as revenue. Relevant expenditure would have included that incurred before 1993 which, accordingly, could not be dismissed as “wasted expenditure”.

Breach of continuing duty

359 The alternative basis upon which the Appellants sought to avoid the limitation defence was that the Respondents continued to breach their duty to take reasonable care in the provision of advice concerning the appropriate means for obtaining access to the peat throughout the period of the retainer, which continued after November 1989. Because it is not necessary to determine this issue, I do not join in the analysis of the President at [68]-[112]. It may be correct that there is a distinction to be drawn between a case of “simple non-feasance”, being the failure to take appropriate steps to give effect to one’s instructions, and a case where the practitioner is specifically asked to advise and then take appropriate steps based on that advice: see, eg, Bell v Peter Browne & Co [1990] 2 QB 507D (Beldam LJ). However, the formulation of the distinction, and its operation in particular circumstances, may require careful attention, although the distinction is drawn from the long-standing judgment of Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] Ch 384 at 435, set out at [99] above.

360 Further, it will be necessary to address in this context the distinction which appears to arise from cases in this Court concerning the occurrence of actual loss resulting from a failure to issue timely proceedings. Thus, it was held in Argyropoulos v Layton [2002] NSWCA 183 that a continuing retainer (to take, for example, legal proceedings) can involve a continuing duty, with further breaches, after the limitation period expires and where no steps are taken to make an application for an extension of time: see Argyropoulos at [6] (Handley JA), [12]-[13] (Hodgson JA) and [64] (Santow JA) (with whom Hodgson JA also agreed). The Court adopted a similar approach in Wilson v Rigg [2002] NSWCA 246 at [47]-[54] (Giles JA, Santow JA and Foster AJA agreeing). Although Giles JA expressly distinguished the question of continuing duty – at [56] – it is clear that these issues are closely related. Further, a similar approach underlies the decision in Segal v Fleming. The Court rejected an argument based on the negligent failure of the solicitor to include an appropriate clause in the sale agreement to Mr Tolz, which had occurred in August 1989, outside the limitation period. That failure bore some similarity to the failure to commence proceedings in time, because it was followed by an existing but diminishing possibility of remedy thereafter: Segal at [32] and [33].

361 Ignorance that a cause of action has accrued does not, absent statutory suspension, prevent time running: see Cartledge v E. Jopling & Sons Ltd [1963] AC 758, a personal injury case and Forster v Outred & Co in relation to professional negligence. However, where a claim is made for pure economic loss, knowledge of the defect may be relevant to the occurrence of actual loss. Thus, where a defect in title is unknown, a property will retain its market value until the existence of the defect is disclosed.

362 This approach is consistent with that adopted in Bryan v Maloney (1995) 182 CLR 609. In 1979 Mr Bryan built a house in Hobart for a Mrs Manion. The footings were inadequate and the house was thus defective. Mrs Manion sold it to the Quittendens who in turn sold it to Ms Maloney in 1986. Cracks began to appear in the walls some six months after the last purchase. In the joint judgment, Mason CJ, Deane and Gaudron JJ held that there was a duty owed by the builder to the purchaser and that the loss suffered was “the economic loss sustained by the owner of a house by reason of diminution in value when the inadequacy of the footings first became manifest …”: p 626.

363 In Segal, it was assumed that the value of Mr Fleming’s interest in lot 1 was diminished by the right of way in favour of lot 2. Mr Tolz knew about the right of way when he purchased lot 2 in 1986. Presumably the value of lot 2 reflected the absence of a right of way over lot 1. Mr Tolz sold the land in 1994, apparently on the basis that a right of way continued to exist. However, the economic loss relied upon in Segal was assessed by reference to the value of lot 1, which remained with Mr Fleming and his sister.

364 Whether Forster v Outred & Co is ultimately reconcilable with this line of authority and whether the existing state of the case law provides a coherent development of principle are matters which are not without their difficulties. It is obviously desirable that the law operates consistently, so that like situations are determined according to a single principle. However, it is necessary to resist the temptation of elegance and simplicity if important distinctions are thereby obscured. There will often be a significant difference between a case where a solicitor has failed to obtain a specific benefit for a client, and one where the client has been allowed to subject himself or herself to a legal obligation which, absent negligence, might have been avoided. The present case involved an attempted acquisition of a benefit which was not realised. However, the benefit remained available, so that the breach was capable of being remedied for some time after it occurred. In this sense it bore a similarity (but no more) to cases in which an interest in property was retained or obtained, but without the interest being noted on the register. Because it is not necessary to determine these matters of principle in this case, I would refrain from doing so.

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31/10/2006 - test - Paragraph(s) est

26/10/2007 - Typographical errors - Paragraph(s) 341, 359, 364

05/12/2012 - Correcting citation reference - Paragraph(s) 344

CITATION:	WINNOTE PTY LTD & Anor v PAGE & Ors [2006] NSWCA 287 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	25/07/06, 26/07/06, 27/07/06, 28/07/06, 31/07/06
JUDGMENT DATE:	31 October 2006
JUDGMENT OF:	Mason P at 1; Tobias JA at 340; Basten JA at 341
DECISION:	1. Appeal dismissed; 2. Respondents’ costs to be paid by the appellants Mr Roach and Winnote Pty Ltd; 3. Cross appeal dismissed with no order as to costs; 4. Liberty to apply within 7 days as regards the costs of the cross-appeal. If that liberty is exercised, the moving party or parties should, within a further 14 days, file and serve written submissions in support of the proposed orders and the other party or parties should file and serve submissions in response within a further 14 days.
CATCHWORDS:	LIMITATION OF ACTIONS––Professional negligence––When time begins to run–Acquisition of lease from landholder to mine peat when mining lease required from Crown––Wasted expenditure in acquiring lease from landholder––Not discovered until five years later––Proceedings not commenced until seven years later––Damage accrues at time of lease from lessor––Limitation Act 1969 (NSW), s 14. - CONTRACTS––Breach––Retainer––Solicitor’s negligent advice––Misfeasance––No continuing duty to give correct advice––Breach final and complete when negligent advice given.
LEGISLATION CITED:	Limitation Act 1969 (NSW), s 14 Mineral Resources Development Act 1990 (Vic), s 42 Mines Act 1958 (Vic), ss 25, 35, 291, 304, 306, 514 Soil Conservation and Land Utilisation Act 1958 (Vic), s 17A Trade Practices Act 1974 (Cth)
CASES CITED:	Argyropoulos v Layton [2002] NSWCA 183 Astley v Austrust Ltd (1999) 197 CLR 1 Bell v Peter Browne & Co [1990[ 2 QB 495 Brown v Dunn (1893) 6 R 67 (HL) Bryan v Maloney (1995) 182 CLR 609 Cartledge v E Jopling & Sons Ltd [1963] AC 758 Christopoulos v Angelos (1996) 41 NSWLR 700 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Conquer v Boot [1928] 2 KB 336 Deputy Commissioner of Taxation v Zimmerlie [1988] 2 Qd R 500 D W Moore & Co Ltd v Ferrier [1988] 1 WLR 267 Ex parte Colonial Petroleum Oil Pty Ltd (1944) 44 SR(NSW) 306 Froster v Outred & Co [1982] 1 WLR 86 Gillespie v Elliott [1987] 2 Qd R 509 Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547 Hammond v Minister for Works (1992) 8 WAR 505 Hawkins v Clayton (1986) 5 NSWLR 109 Hawkins v Clayton (1988) 164 CLR 539 Heydon v NRMA Ltd (2000) 51 NSWLR 1 Honeywood as executrix of the Estate of the late Neville Honeywood v Munnings [2006] NSWCA 215 Larkin v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 Law Society v Sephton & Co (a firm) [2006] UKHL 22; [2006] 2 WLR 1091 Lee v Brand [2003] NSWCA 198 Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 McDonald v Deputy Federal Commission of Land Tax (NSW) (1915) 20 CLR 231 Midland Bank Trust Co Ltd v Hett, Stubbs and Kemp [1979] Ch 384 Minister for Environmental Planning v San Sebastian Pty Ltd [1983] 2 NSWLR 268 MMAL Rentals Pty Ltd v Bruning [2004] 63 NSWLR 167 Mount Albert Borough Council v Johnson [1979] 2 NZLR 234 Moylan v The Nutrasweet Company [2000] NSWCA 337 Nikolaou v Papasavas, Phillips & Co (1989) 166 CLR 394 Onerati v Phillips Constructions Pty Ltd (1989) 16 NSWLR 730 Potts v Miller (1940) 64 CLR 282 Registrar-General v Cleaver (1996) 41 NSWLR 713 Roach & Ors v Page & Ors (No 37) [2004] NSWSC 1048 Scarcella v Lettice (2000) 51 NSWLR 302 Segal v Fleming [2002] NSWCA 262 Sheldon v McBeath (1993) Aust Torts Rep 81-209 Spencer v The Commonwealth (1907) 5 CLR 418 State Rail Authority of New South Wales v Brown [2006] NSWCA 220 Turner v Minister of Public Instruction (1956) 95 CLR 245 at 268 Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 Ward v Lewis (1896) 22 VLR 410 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Wardman v Hatfield [2003] NSWCA 283 Wilson v Rigg [2002] NSWCA 246 Winnote Pty Ltd v Page & Ors [2005] NSWCA 362
PARTIES:	Winnote Pty Limited (in Liq) - First Appellant Walter Edward Roach - Second Appellant Brian John Downey Page & Ors t/as Freehill Hollingdale & Page - First Respondent Brian David Kewley & Ors t/as Freehill Hollingdale & Page - Second Respondent
FILE NUMBER(S):	CA 41095/04
COUNSEL:	S. Gageler SC/A. Bell - Appellants S. Finch SC/M.J. Darke - Respondents
SOLICITORS:	Maurice Blackburn Cashman - Appellants Allens Arthur Robinson - Respondents
LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	20950/97
LOWER COURT JUDICIAL OFFICER:	Sperling J
LOWER COURT DATE OF DECISION:	30 September 2005
LOWER COURT MEDIUM NEUTRAL CITATION:	Roach & Ors v Page & Ors (No. 37) [2004] NSWSC 1048