(3) In the alternative to grounds one and two, that the primary judge erred in not discounting the damages to allow for potential different terms governing the residence by Mr and Mrs Edwards at another retirement village.
11 The appeal was heard earlier this morning when Mr R Darke SC with Mr M Dicker appeared for the appellants and Mr M R Aldridge SC with Mr J C Thompson appeared for the respondents.
12 Mr Darke's basal submissions are quite simple; he submits the ordinary measure of damages in cases of solicitors' negligence is that the plaintiff is entitled to that amount of money which would put the plaintiff in the same position as if the wrong had not been committed. There is no doubt about the accuracy of that proposition.
13 He then says that the onus is on the plaintiff to prove his or her damage. There is no difficulty with that.
14 However, he says in the instant case the evidence which was accepted by her Honour was that it had become impossible for Mr and Mrs Edwards to continue to live in their Hornsby home and that they had to move to a retirement village. This being so, there were only two options open to them; moving to Woolcott Village or moving to some other village, which is called in the submissions the "alternative village"
15 He submits that the court needs to determine whether Mr and Mrs Edwards were in a worse financial position, having proceeded with the Woolcott Village, than they would have been had they entered into an arrangement with the alternative village.
16 To make such a determination the court would need evidence as to the terms of the alternative village transaction which Mr and Mrs Edwards would have entered into if properly advised. No such evidence, not even of what would have to be paid by way of entry fees and other fees to alternative villages was produced. Thus it was not possible for the primary judge to determine the quantum of the loss and the claim in tort must fail.
17 The appellants' counsel say, however, that the respondents might be entitled to nominal damages in contract and, if this is all they recover, they should pay the appellants' costs here and below. Alternatively, if the principal argument was not favoured by the court then any conjecture as to the proper damages should be discounted by fifty percent for uncertainties.
18 The respondents seek to uphold the verdict. Their basal submissions are also simple, namely that Mr and Mrs Edwards would not have entered into the transaction had they been properly advised. They did enter into it and they lost their entire investment when they left the village plus interest and that is what the judge awarded. They say it is completely irrelevant that there might have been some alternative transaction and the matters which Mr Darke raised are really just completely irrelevant.
19 The discussion that the court had with Mr Darke I think throws up the difficulties there are with his propositions. My impressions from those submissions were that there was a very real difference (if those submissions are right) between the case where the plaintiff raises absolutely no evidence as to what he or she might have done were it not for entry into the impugned transaction and a case where there is that evidence. He puts that the case is quite different if there is some evidence, or some evidence which is accepted by the trial judge, that there is an alternative transaction. In such a case, according to the submissions, one must evaluate the alternative transaction and if one does not give any evidence of it then the opponent will be held only to be liable for nil or nominal damages.
20 There are very great practical difficulties why that submission is correct. For instance, what happens if the evidence of the other option only emerges in cross-examination? Again, in the present case, both Mr and Mrs Edwards had died before the time of trial. Evidence was given by Mrs Gorry as to matters which the judge accepted but, generally speaking, there is difficulty under s 5D of the Civil Liability Act 2002 of accepting evidence as to what the plaintiff might have done or not done were it not for the transaction.
21 It seems to me that the alternative transaction argument is not one which we should embrace. The argument was put to the learned judge at Black Book page 120. The starting question was put by Mr Fagan SC who then appeared for the solicitors as "What would they [the respondents] have done instead?" and then he gave the same sort of argument Mr Darke presented to us. The judge, at Black Book 122, was concerned and she said to Mr Thompson, who then appeared for the respondents, "You have not said anything, Mr Thompson, about the alternative …" and Mr Thompson said "That's because it is irrelevant". (They are my summary, not his words).
22 The Full Court of Victoria in Doundoulakis v Antony Sdrinis & Co [1989] VR 781 dealt with questions of damages in solicitors' negligence cases in a way which is very helpful to the solution of the present case. The court on that occasion was constituted by McGarvie, Marks and Ormiston JJ and thus was a very strong court. The leading judgment was given by Ormiston J. At pages 786 to 787 his Honour referred to the consideration of the problem in other cases which he had cited and then said:
"In summary it may be said that those cases have held that where a defective contract, conveyance or other transaction has been entered into as a result of a solicitor's negligence, then damage will be held to have occurred at the time the transaction was entered into if the client's rights were 'demonstrably less valuable' than they would have been if the solicitor had acted correctly, notwithstanding that no immediate financial loss was suffered."
23 Here, the loss was suffered by Mr and Mrs Edwards at the time when they entered into this transaction where their property rights - if one can call them that - were demonstrably less valuable than they otherwise would have been. The loss was not able to be assessed until they vacated, but that is quite immaterial. The prima facie damages are that loss.
24 Now, it is usually the fact had the plaintiff not invested in the contract under review he or she would have done something else with the money. That is quite irrelevant. It is a matter of personal autonomy what a person does with his or her money and, if a transaction cannot be entered into because of someone's fault and you lose the money you would have invested on the races, that loss is completely irrelevant.
25 Now, I think Mr Darke does not cavil with that scenario, but he says the difference here is because there was evidence accepted by the judge in paragraph 63 of the judgment that the only other way in which Mr and Mrs Edwards would have used the funds, had the transaction not gone ahead, was in another retirement village. I do not myself see that makes a difference but if it does then why does not one as a tribunal of fact assume that the sort of transaction they would enter into would be fairly close to identical to the one they did enter into.
26 The evidence before her Honour was that rights enabling residence in retirement villages could be purchased for a contribution of somewhere between $100,000 and $400,000 depending upon the style of village and the amount of care etc. However, we know from the fact that the Edwards were only able to pay $252,000 of the $272,000 that there were only very limited funds available to Mr and Mrs Edwards. Thus, it seems to me that it is more likely than not that the sort of alternative investment that would have been made would have been close to the present and, accordingly, the loss is as it would otherwise have been.
27 As to discount, Mr Darke said there was so much uncertainty that the tribunal of fact should have applied some discount rate. I can't see that there was sufficient uncertainty to justify any discount. Accordingly, in my view the appeal should be dismissed.
28 Now, I have problems myself with cases where solicitors have been found negligent and where there is an appeal on technical grounds and this may be a case where there should be dismissal of the appeal with indemnity costs, but I will hear counsel.
29 TOBIAS JA: I agree.
30 MACFARLAN JA: I agree also.