Bartier Perry Pty Ltd v Paltos

atch v Archer (1774) 1 Cowper 63; (1774) 98 ER 969 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; [1977] UKPCHCA 1 Bridge v Deacons [1984] AC 705 Burchell v Wilde [1900] 1 Ch 551 Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24 Carazi Pty Ltd v Blow Dry Bar Franchising Pty Ltd (in liq) (No 2) [2015] NSWSC 108 Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 Commissioner of Taxation (Cth) v Murry (1998) 193 CLR 605; [1998] HCA 42 Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 Commonwealth v Amman Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Council of The City of Botany Bay v Michos [2013] NSWCA 244 Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 E K Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 Fitch v Dewes [1921] 2 AC 158 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Geraghty v Minter (1979) 142 CLR 177; [1979] HCA 42 Great Wall Resources v O'Sullivan [2009] NSWCA 119 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 Johnson v Perez (1988) 166 CLR 351; [1988] HCA 64 Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4 Liverpool City Council v Irwin [1977] AC 239 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12 McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 Mellersh v Keen (No 2) (1860) 28 Beav 453 Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1991) 33 FCR 1; [1991] FCA 758 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3 Old v McInnes and Hodgkinson [2011] NSWCA 410 Page v McKensey [1995] NSWCA 351 Page v McKensey (Supreme Court (NSW), Windeyer J, 17 December 1993, unrep) Paltos v Bartier Perry Pty Ltd [2020] NSWSC 705 Paltos v Bartier Perry Pty Ltd (No 2) [2020] NSWSC 1706 Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; [1981] HCA 3 Polkinghorne v Holland (1934) 51 CLR 143; [1934] HCA 28 Potts v Miller (1940) 64 CLR 282; [1940] HCA 43 Rabelais Pty Ltd v Cameron (1995) 95 ATC 4552 Re David and Matthews [1899] 1 Ch 378 Ruthol Pty Ltd v Tricon (Australia) Pty Ltd [2005] NSWCA 443 Ryder v Frohlich [2004] NSWCA 472 Ryder v Frohlich [2006] NSWSC 833 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 Smith v Everett (1859) 27 Beav 446 Sobell v Boston [1975] 2 All ER 282 SRSC v Beaumont [2004] NSWSC 164 Thames Cruises Ltd v George Wheeler Launches Ltd [2003] EWHC 3093 Todorovic v Waller (1981) 150 CLR 402; [1981] HCA 72 Trego v Hunt [1895] 1 Ch 462 Turner v TR Nominees Pty Ltd (1995) 31 ATR 578 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; [1998] HCA 38 Walton v Illawarra [2011] NSWSC 1188; (2012) 28 BCL 202 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 Wilson v Williams (1892) 29 L R Ir 176 Texts Cited: R I Banks, Lindley & Banks on Partnership (20th ed, 2020, Thomson Reuters) Category: Principal judgment Parties: Bartier Perry Pty Ltd (Appellant) Dennis Paltos (Respondent) Representation: Counsel: J Emmett SC with H Grace (Appellant) I R Coleman SC with C D Freeman (Respondent)

Solicitors: YPOL Lawyers (Appellant) Polczynski Robinson (Respondent) File Number(s): 2020/361939 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2020] NSWSC 705; [2020] NSWSC 1706 Date of Decision: 9 June 2020; 1 December 2020 Before: Rothman J File Number(s): 2017/301216

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] In 2010, Mr Paltos established a family law practice in partnership with Mr Milevski (the Partnership) by the execution of a Heads of Agreement, a Deed of Agreement of Partnership Terms and a Put and Call Option Agreement. In December 2015, Mr Paltos suffered two strokes and was unable to work for an extended period. There arose a dispute about the Partnership. In February 2016, Mr Paltos formally retained Bartier Perry Pty Ltd (Bartier Perry) to advise him "with regard to [his] Partnership in Paltos Milevski and in relation to the demands being made by [his] partner". Sometime prior to 18 April 2016, Bartier Perry advised Mr Paltos that Mr Milevski could terminate the Partnership and suggested that Mr Paltos offer to sell 20% of the Partnership to Mr Milevski or dissolve the Partnership himself. Mr Milevski commenced proceedings and, on 21 April 2016, the Supreme Court made orders by consent for the dissolution of the Partnership and appointment of Receivers. An account was ordered but those proceedings have yet to be heard. Mr Paltos filed separate proceedings against Mr Milevski and the Receivers appointed to the Partnership (the Partnership Proceedings). The Partnership Proceedings have also not been heard. In the Partnership Proceedings, Mr Paltos is seeking payment of significant sums "on account of goodwill" of the Partnership and payment "on account of work in progress". On 5 October 2017, Mr Paltos commenced proceedings against Bartier Perry seeking damages for breach of contract, negligence, and for misleading and deceptive conduct for its alleged failure properly to advise Mr Paltos about his rights to exercise a put option granted by the Put and Call Option Agreement. Mr Paltos successfully opposed the motion by Bartier Perry for those proceedings to be heard at the same time and by the same judge as the Partnership Proceedings. The Partnership Proceedings have been adjourned repeatedly on Mr Paltos' application pending determination of his claim against Bartier Perry. The put option was relevantly exercisable by a partner who was suffering "total and permanent disablement" within the meaning of the Put and Call Option Agreement. The primary judge held that Bartier Perry was liable to pay Mr Paltos damages of $1,411,707. It was common ground at the trial, however, that a deduction would need to be made from that amount for any amounts comprising "any calculation on account of goodwill" of the Partnership and any payment "on account of work in progress" of the Partnership at the date of its dissolution achieved in the Partnership Proceedings. This was because, on the hypothesis that Mr Paltos had exercised the put option, neither goodwill of the Partnership nor work in progress of the Partnership would have been payable to Mr Paltos. The primary judge, however, did not make a deduction of the amount payable to Mr Paltos on account of goodwill of the Partnership and any payment on account of work in progress. Instead, the primary judge accepted an undertaking from Mr Paltos to "repay" to Bartier Perry amounts representing the goodwill of the Partnership and work in progress as at the date of dissolution, if those amounts were subsequently obtained by Mr Paltos in the Partnership Proceedings. The principal issues on appeal concerned whether the primary judge erred:

The Court (Payne JA, White and McCallum JJA agreeing) held, allowing the appeal in part:

1. The advice given by Bartier Perry to Mr Paltos that the Put and Call Option Agreement did not apply to him "yet" or "at this time" was not sufficient to discharge its obligation to provide competent legal advice. A reasonably competent solicitor in the position of Bartier Perry would have advised Mr Paltos that if he remained unable to work in the Partnership after six months he could exercise the put option to require Mr Milevski to purchase his 70% interest in the Partnership: [67], [76]-[77], [80], [83]-[86] (Payne JA); [261] (White JA); [262] (McCallum JA).
2. The advice given by Bartier Perry to Mr Paltos was misleading and deceptive, in that it was a dangerously incomplete statement of his legal rights and was apt to mislead him about the nature of those rights: [88], [90]-[92] (Payne JA); [261] (White JA); [262] (McCallum JA).
3. On the proper construction of the Put and Call Option Agreement, the put option survived the dissolution of the Partnership. It was unnecessary to imply a term to that effect in law or fact: [97]-[100] (Payne JA); [261] (White JA); [262] (McCallum JA).
4. The primary judge was correct to find that, had Bartier Perry advised Mr Paltos between 13 and 19 April that if he continued to be incapable of carrying out his usual duties as a partner until 23 June he could have exercised the put option, Mr Paltos would likely have exercised the put option: [113], [119] (Payne JA); [261] (White JA); [262] (McCallum JA). Civil Liability Act 2002 (NSW) s 5D; Australian Consumer Law s 18, applied.
5. The primary judge was correct to reject Bartier Perry's construction of the calculation of the "Purchase Price" for the purposes of the Put and Call Option Agreement: [137] (Payne JA); [261] (White JA); [262] (McCallum JA).
6. The primary judge erred in accepting the undertaking rather than making a final award of damages. The qualifications to the general principle that common law damages are to be assessed on a lump sum basis once and for all did not apply in this case. Given the length of time since the dissolution of the Partnership and the fact that Mr Paltos had successfully opposed hearing this matter together with the Partnership Proceedings, this Court should determine damages rather than order a re-trial: [147], [158], [165] (Payne JA); [261] (White JA); [262] (McCallum JA).

Judgment

1. PAYNE JA: Mr Paltos, the respondent, was admitted as a solicitor in 1979 and specialised in family law. In 2010, he commenced to practise in partnership with Peter Milevski in a practice styled "Paltos Milevski Family Lawyers" (the Partnership). When the Partnership was established three documents were executed, namely, a Heads of Agreement, a Deed of Agreement of Partnership Terms and a Put and Call Option Agreement.
2. On 23 December 2015, Mr Paltos suffered two strokes and was hospitalised. Mr Paltos was unable to return to work in any capacity for a period of time after he suffered the strokes.
3. On 15 February 2016, Mr Milevski wrote to Mr Paltos signalling a dispute about the Partnership. The next day, 16 February 2016, the appellant, Bartier Perry Pty Ltd (Bartier Perry), was retained to act for Mr Paltos. On 29 February 2016, a formal retainer was executed, which described the services to be provided by Bartier Perry as including "advising [Mr Paltos] with regard to [his] Partnership in Paltos Milevski and in relation to the demands being made by [his] partner". In discharge of that retainer, Mr Paltos dealt principally with Mr McCaffery from Bartier Perry and, less frequently, with a Mr Creais.
4. Sometime prior to 18 April 2016, Bartier Perry advised Mr Paltos that Mr Milevski could terminate the Partnership and suggested that Mr Paltos offer to sell 20% of the Partnership to Mr Milevski or dissolve the Partnership himself.
5. On 18 April 2016, Mr Milevski commenced proceedings in the Supreme Court against Mr Paltos, seeking dissolution of the Partnership. On about the same date, Bartier Perry ceased to act for Mr Paltos.
6. On 21 April 2016, the Supreme Court made orders by consent including orders that the Partnership be dissolved and Receivers appointed. The claim for an account sought in those proceedings was adjourned and has yet to be heard in the Equity Division (the Account Proceedings). In separate proceedings, which are to be determined before the claim for an account is resolved, Mr Milevski seeks payment of $461,476.30 said to be owing by Mr Paltos. Those proceedings will be heard together with Mr Paltos' cross-claim in which he is seeking from Mr Milevski, among other things, an amount representing 70% of the value of the Partnership assets as at 21 April 2016, by reason of Mr Milevski having allegedly taken over the Partnership from the Receivers without paying for the goodwill of the Partnership (the Partnership Proceedings). Damages from the Receivers by reason of their conduct of the receivership are also apparently to be sought.1 Multiple hearing dates have been vacated and the proceedings were last before the court in June 2021. Despite opposing the application by Bartier Perry to have the present matter heard at the same time as the Partnership Proceedings because at that time Mr Paltos asserted there were no overlapping issues, it appears that Mr Paltos has successfully had those proceedings adjourned on the basis that the outcome of his case against Bartier Perry is material to the outcome of those proceedings. On 30 June 2021, a judge in the Partnership Proceedings made the following orders: "1. I make the orders in the Short Minutes of Order initialled by me and dated today. SHORT MINUTES OF ORDER 1. The proceeding including the Receivers' Notice of Motion filed 9 August 2019 scheduled for mention at 9.30am on 2 July 2021 be vacated. 2. The proceeding including the Receivers' Notice of Motion filed 9 August 2019 be stood over for mention at 9.30am on 2 September 2021. 3. Costs be reserved. 4. Liberty to apply on 3 days' notice. THE COURT NOTES THAT: The solicitors for the Defendant will notify the Plaintiff and the Receivers if final orders in Supreme Court of New South Wales, Court of Appeal Proceeding No 2020/00361939 are pronounced and will seek to relist the matter for mention at an earlier date if practicable."

The first judgment

1. The principal facts found by the primary judge may be summarised thus: 1. on 23 December 2015, Mr Paltos suffered two strokes and was hospitalised. He had not returned to work as at 21 April 2016; 2. on 15 February 2016, Mr Milevski wrote to Mr Paltos regarding the Partnership and, the next day, 16 February 2016, Bartier Perry commenced acting for Mr Paltos; 3. Bartier Perry was aware that Mr Paltos had suffered strokes when they were engaged on 16 February 2016. Bartier Perry was aware throughout the time they were retained that Mr Paltos continued to suffer many symptoms as a consequence of those strokes; 4. sometime prior to 18 April 2016, Bartier Perry advised Mr Paltos that Mr Milevski could terminate the Partnership and suggested that Mr Paltos try to sell 20% of the Partnership to Mr Milevski or dissolve the Partnership himself; 5. on 18 April 2016, Mr Milevski commenced proceedings in the Supreme Court against Mr Paltos, seeking dissolution of the Partnership. On about the same date Bartier Perry ceased to act for Mr Paltos. On 21 April 2016, the Court made orders, by consent, that the Partnership be dissolved and Receivers appointed. It is Mr Paltos' case in the Partnership Proceedings that shortly thereafter Mr Milevski took over the assets of the Partnership without paying the Receivers for the goodwill of the Partnership; 6. at all relevant times during Bartier Perry's retainer Mr Paltos was, in fact, unable to carry out any duties in the Partnership and if this remained the case in June 2016 he would be totally and permanently disabled within the meaning of the Put and Call Option Agreement; 7. Bartier Perry owed Mr Paltos a duty of care and were retained to advise him of his rights under the Put and Call Option Agreement; 8. Bartier Perry breached its retainer and duty of care and engaged in misleading and deceptive conduct by failing properly to advise Mr Paltos about his right to serve a put option notice on Mr Milevski and thereby enliven his rights under the Put and Call Option Agreement; and 9. on or about 21 April 2016, pursuant to orders of the Court the Partnership was dissolved.
2. The document at the heart of Mr Paltos' case was the Put and Call Option Agreement. The essence of that case was simple. Mr Paltos alleged that, acting competently, Bartier Perry should have advised him that if he remained unable to work in the Partnership for a period of six months he would at that time, but for a limited period only, be able to exercise the put option granted by the Put and Call Option Agreement. Competent advice would have been that exercise of the put option may be financially advantageous to Mr Paltos and that he should seek accounting advice about that question. Acting competently, Bartier Perry should have advised Mr Paltos that the put option arguably survived the dissolution of the Partnership.

The second judgment

1. On 1 December 2020, the primary judge delivered judgment in Paltos v Bartier Perry Pty Ltd (No 2) [2020] NSWSC 1706 (the second judgment).
2. As to the undertaking issue, the primary judge said: "[44] The issues of subrogation and the repayment undertaking, suggested by the Court in the First Judgment, relate to, in the latter case, any amount received by way of goodwill in the Partnership Proceedings. In relation to the subrogation, it relates to what otherwise might be payable under the provisions of clause 5.2 of the Put and Call Option Agreement. [45] A difficulty in terms of the minute, foreshadowed in the First Judgment and adumbrated by the Court in the course of the hearing on the minute of the order, is that the amount allowed for goodwill in the Partnership Proceedings, together with the repayment of any guarantees or amounts underpinning a guarantee paid by the plaintiff, will be offset by the debts owed on account of overdrawing and other matters. In those circumstances, if the overdrawing and other debts are a greater amount than the Court in the Partnership Proceedings values the goodwill of the Partnership, no amount would be awarded to the plaintiff as a result of the Partnership Proceedings. [46] On the other hand, if the amount of overdrawing is deducted from that which is payable pursuant to any damages assessed on the basis of the realisation of the Put and Call Option Agreement and its exercise, then the plaintiff will be paid that amount twice. [47] None of the foregoing relates to the value of the option once exercised in so far as it deals with the value of the Partnership for the purpose of the exercise of that option. Last, the Court's attempt to overcome the plaintiff receiving the goodwill or credit for the goodwill as well as the value calculated under clause 5.1 of the Put and Call Option Agreement, and the attempt to ensure that the defendant is not prejudiced by being required to offset the amount of damages payable by the plaintiff for the amount of overdrawing, led the Court to suggest the undertaking and the subrogation that is identified in the First Judgment. [48] Nor does the foregoing affect the reasonableness of the offer of $1.4 million and whether that results in a true compromise. That amount excludes any recompense for the return of the guarantee, which on the above analysis was appropriate. But the comparison between the offer and the judgment needs to include both costs and interest. Once interest, even up to the date of offer, is included, the offer is significantly better for the defendant. [49] Ultimately, the Court could have, more easily, awarded the judgment of $1.4 million, which had been shown to be owed and required an undertaking to repay any amount attributed to the goodwill of the Partnership in the Partnership Proceedings. The difficulty, contemplated by the Court, with that approach would have been that it may have been open to the plaintiff to settle the Partnership Proceedings (or arrange with Mr Milevski for them to be run) on the basis that the Court would determine goodwill at a very low figure and a consequential lower figure for the debt from overdrawing and otherwise. ,,, [52] The difficulty then arises that, if the Court, in these proceedings, ordered subrogation of the rights of the plaintiff in the Partnership Proceedings, or required an undertaking in or to that effect, the defendant in these proceedings could conduct the Partnership Proceedings in a manner that sought unreasonably to agitate matters that were consistent with its interests, but not those of the plaintiff. [53] If the defendant, on subrogation, was indemnified of its cost by the plaintiff in these proceedings, they could run issues and points that were, at best, only arguable. Further, the converse applies. The defendant could settle or run the Partnership Proceedings on an arrangement that the 'value' of the partnership would be optimised and the debts to the partnership increased accordingly. … [95] Lastly, the undertaking as to the repayment will not refer to amounts received by Mr Paltos from the Partnership Proceedings. It will refer to the payment to Bartier Perry of the amount, if any, assessed as the proportionate goodwill of the Partnership, and, if there be none assessed, the proportionate value, if any, of work in progress utilised to the advantage or benefit of Mr Paltos in assessing what, if any, amounts he is, as a consequence of the Partnership Proceedings, to pay or to receive."

Grounds of appeal

1. Bartier Perry advanced six grounds of appeal. It contended that the primary judge erred: 1. in finding that Bartier Perry breached its duty of care and retainer (ground 1); 2. in finding that Bartier Perry engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ground 2); 3. in finding that the Put and Call Option Agreement contained an implied term to the effect that "if the Put Option is exercised, and has not lapsed, requiring the Ongoing Owner to purchase the interest in the Partnership, that obligation is not capable of being defeated by the dissolution of the Partnership or any other step that would disentitle the Exiting Owner, who has the right to exercise the put option, from benefiting from the terms of the Put and Call Option Agreement" (ground 3); 4. in holding that any breach of Bartier Perry's duty of care or retainer, or any misleading or deceptive conduct, was causative of the loss for which Mr Paltos sought damages (ground 4); 5. in finding that Mr Paltos suffered loss and damage and in the quantification of the damages found (ground 5); and 6. in proposing that the Court accept the undertaking referred to in the second judgment at [96] instead of assessing damages once and for all as a lump sum on the basis of the evidence before the Court (ground 6).

Application to lead fresh evidence

1. Bartier Perry sought to adduce evidence on the appeal which was submitted to be fresh evidence arising after the hearings by the primary judge. The evidence was contained in the affidavit of Timothy Randolph Price sworn on 19 March 2021 and its exhibit marked "TRP-1" comprising: 1. Law Society of New South Wales "find a lawyer" details for Mr Paltos dated 11 March 2021; 2. a copy of a historical company extract for "Paltos Family Lawyers Pty Limited" dated 11 March 2021; 3. Paltos Family Lawyers LinkedIn homepage screenshots dated 10 March 2021 which state the following: "… We are a boutique firm specialising in divorce, family law and de facto marriage cases. … Dennis … has worked in the legal profession for almost 40 years as a litigation lawyer. … To get in contact with Dennis so that we can assist you please email us … or call us …"; 1. Paltos Family Lawyers Facebook page screenshots of posts dated 10 February (apparently in 2021) to a similar effect; 2. Waleys & Waleys [2020] FCCA 841 (delivered on 27 April 2020), which records the following at [59]: "Also a part of exhibit A7 is a print of an email from the Father addressed his then-solicitor, Mr N, who appeared for him at Court on [25 September 2017]. That email includes the following: • I just called Paltos …"; and 1. Jamison & Jamison [2018] FCCA 2528 (delivered on 16 August 2018), which records that Paltos Family Lawyers were the solicitors for the applicant in those proceedings.
2. Bartier Perry submitted that the Facebook and Linkedin posts confirm that Mr Paltos has returned to practise as the principal solicitor at Paltos Family Lawyers and, at the very least, establish that Mr Paltos considers himself cognitively capable of working as a solicitor and has retained his commitment to returning to practice. It was submitted that the judgments in Waleys and Jamison also establish that Mr Paltos returned to practice and did some legal work in the business named "Paltos Family Lawyers". It was submitted that the judgments, when viewed in light of the more recent social media posts, underscore Mr Paltos' ongoing and unwavering commitment to return to practice.
3. Where the evidence relates to matters occurring after the trial, there is no requirement to show special grounds to justify its reception: Supreme Court Act 1970 (NSW), s 75A(9) ("subsection (8) [which requires special grounds] does not apply to evidence concerning matters occurring after the trial or hearing"). Nevertheless, in exercising the statutory power to admit fresh evidence regard must be had to the nature of the proceedings and the general public interest in the finality of litigation: Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 296; Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 at [28]-[30]; Council of The City of Botany Bay v Michos [2013] NSWCA 244 at [33].

Application of the Civil Liability Act and the Competition and Consumer Act

1. Despite the provisions of the Civil Liability Act 2002 (NSW) and the Competition and Consumer Act being central to the resolution of the present case, a striking feature of these proceedings is the absence of any real references to those legislative provisions by the parties before the primary judge or in this Court.
2. The consequences are that, for the purposes of the appeal, virtually all of Bartier Perry's complaints are concerned with the construction of the Put and Call Option Agreement and findings of fact made by the primary judge. The exception is ground 6, which complains about a matter of principle in the ascertainment of Mr Paltos' damages. Even in that case, however, the provisions of the Civil Liability Act and the Competition and Consumer Act were barely addressed.

Ground 1 of the appeal - breach of duty of care and breach of retainer

1. Ground 1 of the appeal involves four separate, but overlapping, challenges to the primary judge's findings of fact about Mr McCaffery's advice to Mr Paltos about the Put and Call Option Agreement. Bartier Perry submitted that on a correct understanding of the facts it had discharged its obligation properly to advise Mr Paltos about the manner and circumstances of exercise of the put option granted by the Put and Call Option Agreement.
2. I have concluded that this ground must fail. This is because, on the assumption most favourable to Bartier Perry about what Mr McCaffery on behalf of Bartier Perry told Mr Paltos about the manner and circumstances of exercise of the put option, Mr Paltos was nevertheless entitled to succeed in his case that Bartier Perry breached its retainer and the concurrent duty of care.
3. Before descending into the detail of Bartier Perry's complaints about factual findings, it is first necessary to address submissions made on behalf of Mr Paltos which asserted that in order to succeed on this ground Bartier Perry was required to demonstrate that factual findings made by the primary judge must be shown not to have been "open": "COLEMAN: Our submission is that not only were the findings reasonably open, but that they were abundantly underpinned by not less than 25 contemporaneous file notes and/or emails of the defendant in the Court below - and I'll take your Honours to it - the cross-examination of the solicitor who was advising the respondent at the relevant time. We submit other than this Court in effect sidestepping the requirement that an appellant demonstrate that a finding of fact wasn't reasonably open, whether one has regard to some of the more colourful formulations of the test that emerged from the authorities or not, if one takes the more bland proposition not reasonably open, we submit on none of these issues can it be shown that the findings of his Honour are vulnerable."
4. As was made clear during oral address, that submission cannot be accepted. In a case such as the present, where s 75A of the Supreme Court Act applies, the Court is conducting a rehearing. A judgment of this Court is required both on the facts and the law. In relation to demeanour-based credit findings, as explained in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [22]-[28], appellate restraint is required. Nevertheless, as the High Court went on to explain in Fox v Percy: "[29] … Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process."

Ground 1(a)

1. The primary judge made the following finding about Mr McCaffery's advice to Mr Paltos: "[310] On 23 February 2016, as noted earlier in these reasons, the defendant, through Mr McCaffrey, noted the plaintiff's present incapacity which, in the view of the defendant, was 'likely to continue partially for indefinite period' and noted or asked whether there was 'permanent disablement of the plaintiff for the purposes of the [Put and Call Option Agreement]'. It then refers, albeit in abbreviations, to the six-month period; the option period; and then the 30 days. It cannot be the situation, given the content of that note, that Mr McCaffrey (and necessarily the defendant) did not read and seek to construe the Put and Call Option Agreement. What the defendant did not do was formally construe the Put and Call Option Agreement and it did not advise the plaintiff of any such construction."
2. Bartier Perry submitted that the primary judge erred in finding that Mr McCaffery did not "formally construe" the Put and Call Option Agreement or advise Mr Paltos about his construction of that agreement. It was submitted that his Honour's finding was contrary to Mr McCaffery's evidence, admissions made by Mr Paltos in cross-examination, the objective evidence and other findings in his Honour's judgment.
3. Bartier Perry submitted that the Court should find that in late February 2016, Mr McCaffery construed the Put and Call Option Agreement and correctly advised Mr Paltos that the put option did not assist him at that time because before it could be exercised there was a six-month requirement in relation to his disability.
4. It may be that by finding that Mr McCaffery did not "formally construe" the Put and Call Option Agreement, all that his Honour was saying was that Bartier Perry did not construe the Put and Call Option Agreement in the strict sense of not accurately interpreting and finding its correct meaning. As I will explain, that finding was correct. If, however, the finding made by the primary judge that Mr McCaffery did not "formally construe" the Put and Call Option Agreement intended to convey that Bartier Perry did not look at the Option Agreement at all, this was an overstatement of the position. As I will explain, however, I do not think that even if the finding should be understood as intended to convey that Bartier Perry did not look at the Option Agreement at all it affects his Honour's overall conclusion that Bartier Perry failed to give Mr Paltos competent advice about his rights under the Put and Call Option Agreement. That is, I accept that Mr McCaffery read the Put and Call Option Agreement and sought to understand its terms, sufficient to warrant the description that he "construed" it, at least in that limited sense. I also accept that it is likely that Mr McCaffery said to Mr Paltos that the Put and Call Option Agreement did not apply to him "yet" or "at this time". In context, the oral advice by Mr McCaffery was likely to have included some reference to the time dimension of the exercise of the option. Mr McCaffery's advice was not, however, in the circumstances and having regard to the terms of Bartier Perry's retainer, sufficient to discharge its obligation to provide competent legal advice to Mr Paltos about his rights against Mr Milevski as regards the Partnership. I will return to this subject shortly.

Ground 1(b)

1. Bartier Perry next submitted that the primary judge erred in finding that by 14 April 2016 Mr Paltos was prepared to give up the whole of his interest in the Partnership. It was submitted that, at that time, Mr Paltos retained a "strong and passionate desire" to return to work and believed that desire "would be fulfilled or might be fulfilled" in the future. It was submitted that even though Mr Paltos was willing to transfer his interest in the Partnership to Mr Milevski, he was not prepared to do so in a way that would prevent him from being able to work again, which (so the written argument asserted) would have occurred if he tried to invoke his rights under the Put and Call Option Agreement.
2. Whilst I accept that on 13-14 April 2016 Mr Paltos continued to harbour a desire to return to work as a solicitor when he was able to do so, the primary judge's finding that by 13 April Mr Paltos was prepared to give up, by which the primary judge meant transfer, the whole of his interest in the Partnership, was plainly correct.
3. The contemporaneous documents and unchallenged findings of the primary judge make clear that on 14 April 2016 Mr Paltos had agreed in principle to the transfer of his interests in the Partnership to Mr Milevski, "by whatever mechanism", and that his current condition prohibited him from getting back to work as soon as he had expected: "[179] On 14 April 2016, Mr McCaffrey wrote to Mr Harris referring to Mr Paltos' deteriorating health condition over the past 24 hours, which was preventing Mr McCaffrey from obtaining detailed instructions, particularly upon the 32 items that had been sent to Mr McCaffrey. [180] Nevertheless, Mr McCaffrey restates that Mr Paltos was agreeable in principle to the transfer of his interests to Mr Milevski, by whatever mechanism, and that his current condition prohibited him from getting back to work as soon as he had expected. Mr McCaffrey also questioned the extreme haste with which Mr Milevski apparently wanted the matter resolved. Fifteen minutes later, Mr McCaffrey confirms with Mr Paltos the terms of his email to Mr Harris and suggests that the other side would see the claim of deteriorating health as a pretext for delay. [181] On 15 April 2016, Mr Howell emailed Mr Paltos, with a copy to Mr McCaffrey, raising the possibility of appointing a financial guardian because of Mr Paltos' health. [182] There can be little doubt that the contemporaneous notes and correspondence corroborates the view of Dr Lianos, Dr Breen and Dr Miller. Mr Paltos' executive functioning was significantly impaired. He was visibly and obviously impaired." (Footnote omitted.)

Ground 1(c)

1. The primary judge drew the following conclusions: "[316] Regardless of whether or not one takes the view expressed by the Court as to the construction of TPD, or as to the construction of total and permanent disablement, at least as at 14 April 2016, and in my view, on the basis of the evidence in this case, well before that time, Mr McCaffrey was and, if not should have been, aware that there was at least an arguable, if not overwhelming, view that the plaintiff was totally and permanently disabled within the meaning of the Put and Call Option Agreement. … [320] But the plaintiff's lack of insight into his capacity must have been obvious and, on the evidence before the Court, was obvious. Further, whether or not the plaintiff had insight and whether or not Mr McCaffrey was entitled or required to go behind the plaintiff's statements as to his not wanting to give up the Partnership, as at 13 April 2016, at the latest, Mr McCaffrey and the defendant were aware that Mr Paltos was willing to give up his entire interest in the Partnership and was suffering a total and permanent disablement, or was aware of the facts that, if the defendant's mind considered those facts, would inevitably, or more likely than not, lead to that conclusion."
2. Bartier Perry submitted that the primary judge erred in finding that by at least 14 April 2016 Mr McCaffery was aware, or should have been aware, that Mr Paltos was totally and permanently disabled within the meaning of the Put and Call Option Agreement. There were said to be three problems with his Honour's finding: 1. first, as at 14 April 2016, Mr Paltos could not have been totally and permanently disabled within the meaning of the Put and Call Option Agreement because he had only suffered his stroke four months earlier, whereas the definition of "TPD" required that he be unable to carry out his usual working activities in his usual occupation for a period of six consecutive months. At most, he may have been totally and permanently disabled in two months' time; 2. secondly, the medical evidence from the time does not support his Honour's finding; and 3. thirdly, in February Mr McCaffery believed it was possible that Mr Paltos would be able to return to work.
3. Bartier Perry invited the Court to find that Mr McCaffery believed that there was a real prospect that Mr Paltos "may not" be totally and permanently disabled for the purposes of the Put and Call Option Agreement when the Option Exercise Period notionally would have commenced on 23 June 2016. It was said that, in light of the medical evidence available at the time, it was not unreasonable for him to hold this belief.

Ground 1(d)

1. Bartier Perry submitted that the primary judge erred in finding that Bartier Perry's duty required it to provide further advice to Mr Paltos about the Put and Call Option Agreement on or about 14 April 2016 or at any time between that date and the termination of Bartier Perry's retainer.
2. It was submitted that the appropriate time for giving advice about the potential to exercise the put option after the dissolution of the Partnership would have been closer to 23 June 2016 when the prospect of Mr Paltos recovering within the six-month period prescribed by the definition of "TPD" could be known with greater certainty (at which stage Bartier Perry's retainer had already been terminated).
3. This complaint should be rejected. The finding by the primary judge that, acting competently, Bartier Perry should have provided advice to Mr Paltos about the manner and timing of the exercise of the put option was correct. As I will explain, the primary judge did not err in finding that Bartier Perry should have so advised Mr Paltos at least after 13 April 2016 when his medical condition had significantly deteriorated and he had agreed to transfer his share in the Partnership.

Conclusion on ground 1

1. As noted at the outset, this ground complains about four overlapping factual findings made by the primary judge in support of an overall submission that the primary judge erred in concluding that Bartier Perry breached its duty of care and retainer.
2. Bartier Perry is entitled, to an extent, to succeed in relation to some of those factual findings: 1. if the finding that Mr McCaffery did not "formally construe" the Put and Call Option Agreement meant that Bartier Perry did not read the Agreement at all, this was an overstatement of the position; and 2. the finding that as at 14 April 2016, Mr Paltos was totally and permanently disabled within the meaning of the Put and Call Option Agreement was not correct.
3. Sub-grounds 1(a) and (c) should be allowed to that limited extent. That does not lead to ground 1 being upheld. That is because, on the assumption most favourable to Bartier Perry about what Mr McCaffery on behalf of Bartier Perry told Mr Paltos about the manner and circumstances of the exercise of the put option, Mr Paltos was nevertheless entitled to succeed in his case that Bartier Perry breached its retainer and the concurrent duty of care.
4. Whilst I find that it is likely that Mr McCaffery said to Mr Paltos during the currency of the retainer that the Put and Call Option Agreement did not apply to him "yet" or "at this time", this was insufficient to constitute reasonably competent advice. The primary judge was correct to conclude that Bartier Perry, via Mr McCaffery, ought to have advised Mr Paltos between 13 April and 18 or 19 April that if he continued until 23 June 2016 to be incapable of carrying out his usual duties in the Partnership, he could exercise his option to require Mr Milevski to purchase his 70% interest in the Partnership in accordance with the formula in Schedule C to the Put and Call Option Agreement.
5. The conclusion drawn by the primary judge that Bartier Perry breached its retainer and concurrent duty of care by failing to give this advice was amply supported. There was a limited suite of documents here in issue. Bartier Perry had them all. Bartier Perry's retainer plainly encompassed providing advice to Mr Paltos about the appropriate and possible means available to him to transfer his interest in the Partnership to Mr Milevski on the best terms possible, whether immediately, upon termination of the Partnership, or after its dissolution. By 13 April 2016, this was the only matter of substance that Bartier Perry was retained to advise about. On or after 13 April 2016, a reasonably competent solicitor in the position of Mr McCaffery would have understood that, if Mr Paltos remained unable to perform his usual duties in the Partnership in June 2016, the put option under the Put and Call Option Agreement was an obvious and potential method available to Mr Paltos to transfer his interest in the Partnership for value. Acting competently, advice to that effect should have been given.

Ground 2 - misleading or deceptive conduct

1. Bartier Perry submitted that for the reasons advanced in support of ground 1, its conduct was not misleading or deceptive. It was submitted that: 1. as at 13-15 April 2016 there was nothing in the Put and Call Option Agreement that Mr Paltos could utilise to his advantage in the dispute with Mr Milevski; and 2. if the Put and Call Option Agreement contained the implied term extracted at [24] above, it was not engaged at that time and, if the put option survived the dissolution of the Partnership, it would have been premature to advise Mr Paltos that he could exercise the put option after the dissolution of the Partnership because at that time it was still unclear whether Mr Paltos would be unable to carry out his usual working activities in his usual occupation when the option became exercisable in 2 months' time on 23 June. It was submitted that any advice would have to be responsive to Mr Paltos' health and priorities in or around June 2016.
2. For essentially the same reasons as in relation to ground 1, the different formulations of advice said to have been given by Mr McCaffery to Mr Paltos do not matter in this case. On the version of Mr McCaffery's advice most favourable to Bartier Perry, I am satisfied that the advice given to Mr Paltos was misleading and deceptive.
3. Mr Paltos sought damages under s 236 of the Australian Consumer Law. While the measure of damages under s 82 of the Trade Practices Act 1974 (Cth) (which is relevantly in similar terms to s 236) is not necessarily the same as for negligence (see Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3), Mr Paltos formulated his claim under this provision in the same manner as he did for breach of retainer and duty. However, it should be noted that the test for causation that inures in the word "by" found in s 82 adopts the common law "common-sense concept" discussed in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12: see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55 at 525 per Mason CJ, Dawson, Gaudron and McHugh JJ. The test of causation in s 5D of the Civil Liability Act is not necessarily the same: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420; [2009] HCA 48 at [43]-[44]. Nevertheless, in this case it was not suggested that there was any material difference in the application of the provisions.

Ground 3 - whether the implied term found by the primary judge existed

1. It will be recalled that, at least on a contingent basis, the primary judge found that the Put and Call Option Agreement contained an implied term to the following effect: "if the Put Option is exercised, and has not lapsed, requiring the Ongoing Owner to purchase the interest in the Partnership, that obligation is not capable of being defeated by the dissolution of the Partnership or any other step that would disentitle the Exiting Owner, who has the right to exercise the put option, from benefiting from the terms of the Put and Call Option Agreement."
2. Bartier Perry submitted that the implied term did not satisfy any of the conditions necessary to ground a term implied in law or in fact. In particular, Bartier Perry submitted that it was not necessary to give business efficacy to the Put and Call Option Agreement because: 1. if, as the primary judge found, the put option would have been exercisable after the dissolution of the Partnership, the implied term would be redundant; and 2. if, contrary to his Honour's finding, the implied term was engaged before the put option was exercisable, it would not have been fair or equitable because it would have pre-emptively forced Mr Milevski to remain in the Partnership and deal with the significant financial liabilities that Mr Paltos had created in circumstances where it was not yet clear whether Mr Paltos would have the right to rely on the put option in the future.
3. The latter submission may be put to one side immediately. The primary judge did not find that the put option was exercisable "pre-emptively" before June 2016. There was no notice of contention filed by Mr Paltos addressing this topic.
4. I have concluded that ground 3 proceeded on an essentially false basis. As Bartier Perry submitted, the primary judge found that on the correct construction of the Put and Call Option Agreement, the put option survived the dissolution of the Partnership. That construction of the Put and Call Option Agreement was not challenged on the appeal.
5. The primary judge found that, properly advised, Mr Paltos could and would have exercised the put option in June 2016. In those circumstances there was no basis to conclude that the implied term should be implied in law or in fact as a term of the Put and Call Option Agreement. Shortly put, it was unnecessary on the proper construction of the Put and Call Option Agreement for such a term to be implied.

Ground 4 - causation

1. Grounds 4(a) and 4(b) concern causation. Bartier Perry's complaints are essentially about findings of fact. It was submitted that the primary judge erred in finding that Mr Paltos had proven that he would have either sought to rely on the implied term to prevent the dissolution of the Partnership or attempted to exercise the put option after the Partnership had been dissolved if he had been correctly advised in relation to his rights under the Put and Call Option Agreement. This was because of the risks and disadvantages of seeking to exercise the option, which were submitted to be repugnant to Mr Paltos' priorities at the time. In oral submissions these risks and disadvantages were collectively referred to as "speed bumps".
2. The case regarding the implied term and the dissolution of the Partnership may be set to one side. As I have found, the implied term was unnecessary in circumstances where the put option survived the dissolution of the Partnership. The alternative causation case raises no additional issues more favourable to Bartier Perry.
3. Bartier Perry submitted that on the assumption that prudent advice was as I have found (at [86] above), the hypothetical prudent solicitor would also have advised Mr Paltos: 1. of the risks associated with exercising the put option after the dissolution of the Partnership, including that Mr Milevski would seek to resist any attempt by Mr Paltos to rely upon it, which would likely result in expensive, contested litigation; and 2. that he would be unable to return to work in the Partnership if he exercised the put option. Bartier Perry argued that, as at April 2016, Mr Paltos was not prepared to take any step that would have involved betting against his recovery or which would have precluded him from being able to return to practice, such as admitting that he was totally and permanently disabled.
4. Bartier Perry submitted that the primary judge proceeded on the basis that, if Mr Paltos had been properly advised, he could have either consented to Receivers being appointed or exercised his rights under the Put and Call Option Agreement and potentially received more money than if the Partnership were simply wound up. Bartier Perry characterised this as a false dichotomy for the following reasons: 1. first, attempting to exercise his rights would have entailed considerable down-side risk for Mr Paltos from a financial and health perspective, and the primary judge's analysis made no allowance for the risks in assessing what Mr Paltos would have done; 2. secondly, exercising the put option would have been inconsistent with his personal, professional and health priorities (namely, to recover so that he could return to work) and it would have been commercially rational for Mr Paltos to consent to the appointment of the Receivers because that would have been far less risky and costly; and 3. thirdly, even if it was "essentially monetary issues that were driving … Mr Paltos", that does not mean that he would have sought to exercise his rights under the Put and Call Option Agreement. It was submitted that there was no guarantee that he would get more money if he were able to exercise the put option and even if consenting to the appointment of Receivers meant that he may have got less money in the short term, it preserved his ability to return to practice and retain his clients in the event his health improved, which could have left him financially better off in the long term.

Ground 5 - calculation of loss and damage under cl 5.1 of the Put and Call Option Agreement

1. Bartier Perry submitted that the primary judge erroneously found that Mr Paltos would have been entitled to be paid $1,411,707 under cl 5.1 of the Put and Call Option Agreement after accepting the calculations prepared by Mr Paltos' accounting expert witness, Mr Duggan.
2. It was submitted that Mr Duggan incorrectly used the formula in Schedule C to the Put and Call Option Agreement when calculating the "Purchase Price" for the purposes of cl 5.1. It was said that the formula in Schedule C determines the "Market Value of Business Interests" and the formula in the definition of the term "Purchase Price" in cl 1.1 of the Put and Call Option Agreement should have been used instead. It was said that if Mr Duggan had calculated the value of the Purchase Price in accordance with the correct formula he would have arrived at a figure of $988,194.
3. Ground 5 may be disposed of shortly.
4. It will be recalled from [17] above that "Market Value" in the Put and Call Option Agreement is defined thus: "'Market Value' means the amount calculated in accordance with Schedule C and where there is a dispute as to the application of this formula then the Market Value is the value of the Business Interests as determined by an accountant appointed by the President of the Institute of Chartered Accountants for New South Wales and: a) they are to be instructed to value the Business Interests using the formula set out in Schedule C; b) no discount or uplift is to be applied merely because: i) the number of Business Interests being transferred is a minority holding or is a majority holding or is neither a minority holding nor a majority holding; or ii) the Business Interests being transferred are not being transferred with all of the other Business Interests; and c) their decision is that of an expert not an arbitrator and their valuation is binding on the parties".
5. "Business Interests" in the Put and Call Option Agreement are defined thus: "'Business Interests' means the form of a particular Owner or Incoming Partner's equity interest in the Business Entity including any associated entities".
6. "Purchase Price" in the Put and Call Option Agreement is defined thus: "'Purchase Price' means in relation to Business Interests that are transferred in accordance with this Deed, the amount calculated in accordance with the following formula: [A% x B] - C Where A = the percentage that the Business Interests held by the Exiting Owner bears to the total of all business interests of that class; B = the Market Value of all Business Interests; C = the amount of the sum insured received by the Related Insurance Owner of the Insurance Policy (if any) in respect of the Owner or Incoming Partner who suffered the Trigger Event, provided that, if the application of this formula equals zero or a negative number then the Purchase Price is $100".

Ground 6 - damages

1. It will be recalled that the primary judge did not assess Mr Paltos' damages on a lump sum basis once and for all but rather awarded Mr Paltos $1.41 million in damages and required Mr Paltos to give the following undertaking: "The plaintiff, Dennis Paltos, undertakes to pay to the defendant, Bartier Perry Pty Ltd, any amount received or allowed to him in proceedings brought by Peter Milevski, being proceedings 2016/118930 and 2017/246841, confined to amounts received or allowed by or to the said Dennis Paltos in any calculation on account of goodwill, if any, of the Paltos/Milevski Partnership or on account of work in progress, if any, in the said partnership at the date of its dissolution."
2. That is, Mr Paltos was required to undertake to repay Bartier Perry amounts comprising "any calculation on account of goodwill" of the Partnership and any payment "on account of work in progress" of the Partnership at the date of its dissolution achieved in the Partnership Proceedings. This was because, on the hypothesis that Mr Paltos had exercised the put option, neither goodwill of the Partnership nor work in progress of the Partnership would have been payable to Mr Paltos. Thus, any amounts received in relation to those claims must be deducted from the amount of $1.41 million that the primary judge awarded to Mr Paltos.
3. It was thus common ground before the primary judge that in the Partnership Proceedings against Mr Milevski, which have as yet not been heard, Mr Paltos is seeking payments of amounts on account of goodwill and work in progress of the Partnership as at the date of its dissolution which, if recovered, must properly be deducted from the damages payable to Mr Paltos by Bartier Perry.
4. In Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; [1981] HCA 3 at 643 Stephen J said: "The common law, to which the plaintiff has necessarily had recourse, knows only lump sum damages, paid once and for all".
5. In Todorovic v Waller (1981) 150 CLR 402; [1981] HCA 72 at 412, Gibbs CJ and Wilson J said: "Certain fundamental principles are so well established that it is unnecessary to cite authorities in support of them [including that] damages for one cause of action must be recovered once and forever, and (in the absence of any statutory exception) must be awarded as a lump sum".

Notice of cross-appeal

1. Regrettably, determining the subject matter of the cross-appeal and the relief sought by the cross-appellant proved an elusive task.
2. The amended notice of cross-appeal filed on 6 April 2021, the first day of the appeal hearing, sought the following relief: "1. [Cross] Appeal allowed. 2. The cross-respondent [Bartier Perry] indemnify the cross-appellant [Mr Paltos] from and against all actions, claims, demands, notices, losses, damages, costs or expenses for which the cross-appellant may become liable in respect of the partnership styled Paltos Milevski Family Lawyers and which arise after 21 April 2016 (including any guarantees and the like that may have been provided by any such person, but only to the extent to which such guarantee has not been called upon or otherwise exercised prior to 21 April 2016). 3. The cross-respondent pay the cross-appellant's costs."
3. The findings of the primary judge on this topic were set out at [91]-[93] of the second judgment: "[91] The plaintiff also seeks, pursuant to the terms of clause 5.2 of the Put and Call Option Agreement, an indemnity from and against all actions, claims, demands, notices, losses, damages, costs or expenses for which the plaintiff may become liable in respect of the Partnership. In the terms sought, such an indemnity would indemnify the plaintiff against any orders made against the plaintiff in the Partnership Proceedings. The terms of clause 5.2(a) of the Put and Call Option Agreement require the partner to indemnify the outgoing partner in those respects. [92] But the objectively determined construction of clause 5.2(a) is not to indemnify the Exiting Owner (Mr Paltos) for past losses and the like. It is to indemnify for future claims or losses. As proposed, the draft Short Minutes would require the defendant to indemnify Mr Paltos against the claim by Mr Milevski. [93] Given the dissolution of the Partnership in April 2016, before the indemnity would otherwise have operated, the plaintiff's damage as a result of not possessing the indemnity would relate only to claims made after July 2016 relating to issues that arose prior to 2016. There is no evidence of any such issue and the plaintiff has failed to show damage, in this respect, arising as a result of the defendant's negligence or a need for an order of this kind."
4. The terms of cl 5.2(a) of the Put and Call Option Agreement are set out above at [18]. The only substantive relief sought by the cross-appeal tracks carefully the terms of cl 5.2(a).

Costs of the appeal

1. Section 98 of the Civil Procedure Act confers on the Court a wide discretion with respect to costs. Under r 42.1 of the UCPR, the general rule is that the Court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA). Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22.
2. The relevant principles for the determination of costs on an issue-by-issue basis were stated in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA): "• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). • In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal. • If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. • Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). • A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. • Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272."

Conclusion and orders

1. For the foregoing reasons I propose the following orders: 1. Bartier Perry's motion dated 19 March 2021 seeking to lead fresh evidence is dismissed; 2. Appeal allowed; 3. Set aside orders 2 and 5 made by Rothman J on 1 December 2020 (including the undertaking offered as a condition of making order 2) and in lieu thereof order: 1. Bartier Perry to pay damages to Mr Paltos in the amount of $942,777; 2. Bartier Perry to pay Mr Paltos' costs of the proceedings on the ordinary basis; 1. No order as to costs of the appeal with the intention that the parties pay their own costs of the appeal; 2. Cross-appeal dismissed; 3. Cross-appellant to pay the costs of the cross-respondent of the cross-appeal.
2. WHITE JA: I agree with Payne JA.
3. McCALLUM JA: I agree with Payne JA.

Endnotes

1. Damages are sought in an amended cross-claim that has not apparently been filed. A notice of motion seeking leave to file the amended cross-claim was filed, but it does not appear to have been determined.
2. See s 118-37, Income Tax Assessment Act 1997 (Cth).
3. Letter of Mr Davis of BCR Advisory to Mr Milevski dated 6 April 2017.
4. Letter of Mr Davis of BCR Advisory of 2 December 2016 to Mr Milevski: "the clients of the Partnership chose to transfer their files to you". The Wiese report to the Receivers refers (at para 3.2.5) to "details on files transferred to Milevski Family Lawyers" (attached as Appendix E "Fees on Files Transferred").
5. Ms Conoulty refers to particulars in this statement at Annexure 12 in Appendix D of her report, neither of which is included in the appeal book.
6. Twycross v Grant (1877) 2 CPD 469 at 545, per Cockburn CJ; Cackett v Keswick [1902] 2 Ch 456 at 468, per Farwell J; Potts v Miller (1940) 64 CLR 282 at 289, per Starke J; Toteff v Antonas (1952) 87 CLR 647 at 650, per Dixon J; Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291, per Brennan, Deane, Dawson, Gaudron and McHugh JJ.
7. Broome v Speak [1903] 1 Ch 586 at 605, per Buckley J; Ted Brown Quarries Pt Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 at 31, per Gibbs J.
8. Potts v Miller (1940) 64 CLR 282 at 299, per Dixon J.
9. Potts v Miller (1940) 64 CLR 282 at 300, per Dixon J.
10. McAllister v Richmond Brewing Co (NSW) Pty Ltd (1942) 42 SR (NSW) 187 at 192, per Jordan CJ.
11. Cackett v Keswick [1902] 2 Ch 456 at 468, per Farwell J.
12. Gould v Vaggelas (1985) 157 CLR 215 at 255, per Brennan J.
13. Stevens v Hoare (1904) 20 TLR 407 at 409, per Joyce J.
14. Davidson v Tulloch (1860) 3 Macq 783 at 790, per Lord Campbell LC; quoted in Arkwright v Newbold (1881) 17 Ch D 301 at 312, per Fry J.
15. Peek v Derry (1887) 37 Ch D 541 at 591 per Cotton LJ, 594 per Sir James Hannen, 594 per Lopes LJ.
16. Potts v Miller (1940) 64 CLR 282 at 299, per Dixon J; see also Peek v Derry (1887) 37 Ch D 541 at 591-592, per Cotton LJ.
17. Peek v Derry (1887) 37 Ch D 541 at 594, per Sir James Hannen.