Cooper v Winter - [2013] NSWCA 261 - NSWCA 2013 case summary — Zoe

NSWNSWCA

Cooper v Winter

[2013] NSWCA 261

Court of Appeal (NSW)|2013-03-22|Before: McColl JA, Barrett JA, Ward JA, Santow J, Adamson J, Coll JA

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Source facts

Court

Court of Appeal (NSW)

Decision date

2013-03-22

Before

McColl JA, Barrett JA, Ward JA, Santow J, Adamson J

Catchwords

(1958) 98 CLR 367 Beach Petroleum NL v Kennedy [1999] NSWCA 408
(2003) 214 CLR 118 Holborow v Rudder [2002] WASC 265 Kallinicos v Hunt [2005] NSWSC 1181
(2005) 64 NSWLR 561 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

Source

Original judgment source is linked above.

Catchwords

(1958) 98 CLR 367 Beach Petroleum NL v Kennedy [1999] NSWCA 408(2003) 214 CLR 118 Holborow v Rudder [2002] WASC 265 Kallinicos v Hunt [2005] NSWSC 1181(2005) 64 NSWLR 561 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

Judgment (30 paragraphs)

[1]

Judgment 1McCOLL JA: I agree with Ward JA's reasons and the orders her Honour proposes. 2BARRETT JA: I have had the advantage of reading in draft the comprehensive judgment prepared by Ward JA. I am of the opinion that, for the reasons her Honour states, the appeal should be dismissed with costs. 3WARD JA: This is an appeal from the dismissal by Adamson J of claims brought in the Common Law Division by Mr Peter Cooper against the partners of a firm of solicitors for alleged breaches of duty of care and fiduciary duty arising out of the conduct of one of the partners of that firm, Mr Ronald Winter. For ease of reference, below is an index to these reasons. INDEX Background [4] Mr Cooper's claims [8] Findings at first instance [17] Appeal Grounds [22] Alleged retainer/duty of care Grounds 1-2 - alleged failure adequately to consider the evidence as to whether there was a retainer which applied to the Bells Line of Road property; finding that there was no such retainer [25] January 2002 conversation [30] June 2002 conversation [32] "Objective circumstances" [36] 19 September 2003 letter [40] October 1997 agreement [45] 2002/2004 documents [48] Conclusion as to the complaint as to the failure to have regard to the "further objective circumstances" [68] "Apparent logic of events" [71] Course of conduct [80] Ground 3 - finding that, in the absence of the alleged retainer, there was no duty of care in respect of the Bells Line of Road property [86] Fiduciary Duty Ground 4 - failure to find that there was a fiduciary obligation owed by the respondents to Mr Cooper in respect of the Bells Line of Road property [92] Findings in relation to Blamathon shares Ground 5 - finding that Mrs Lockrey was the beneficial owner in the shares in Blamathon [103] Ground 6 - finding (at [65]) that Mrs Lockrey's instructions that she held her shares in Blamathon on trust for him and Mrs Cooper were incorrectly recorded by Mr Winter in the letter dated 19 September 2003 Ground 7 - finding (at [95]) that it would be inconceivable that Mr Cooper would have placed trust in Mrs Lockrey to hold her Blamathon shares in trust for him [116] Finding as to the capacity in which instructions were given by Mr Cooper Ground 8 - finding (at [5]) that Mr Cooper only gave Mr Winter instructions as a director or employee of Blamathon (other than for the matters outlined at [3]) [120] Alleged breaches of duty/causation/loss Ground 9 - failing to find on the evidence that the respondents breached the alleged duties of care and fiduciary duty owed to Mr Cooper Ground 10 - finding that if there had been any breach by the respondents, such breach had not caused any damage to him Breaches of Duty [124] Causation [137] Loss [143] Ground 11 - failing adequately to consider the evidence and arguments bearing upon the issues of retainer, duty of care, fiduciary duty, breach of duty, causation and damage, and to give adequate reasons for decision on those issues [153] Conclusion [157]

[2]

Background 4The factual background to the dispute is set out in the primary judge's reasons (Cooper v Winter [2012] NSWSC 161). Briefly, in the early 1990's, Mr Cooper, who is a builder, and his then wife, Mrs Kim Cooper, were together involved in the development of a property that they owned at Ross Street, North Windsor. They had financial difficulties arising out of tax liabilities in relation to the development. In 1997, before the completion of the development, they sold the Ross Street property to Blamathon Pty Ltd, a company owned and controlled by Mrs Cooper's mother, Mrs Kath Lockrey. Neither Mrs Lockrey nor Blamathon was a party to the proceedings. 5In August 1999, Mr and Mrs Cooper went into voluntary bankruptcy. Mr Cooper continued to work in relation to the Ross Street development but did so, from the time of his bankruptcy, for Blamathon. Towards the end of his bankruptcy, Mr Cooper identified another property for sale that he considered suitable for development - the Bells Line of Road property. That property was acquired by Blamathon in 2002. Although the subject of a development approval in September 2003, the Bells Line of Road property was not developed by Blamathon. It was sold in 2004. 6During the period from at least 2002, Mr and Mrs Cooper had marital difficulties, leading to their separation in late 2002 and divorce in 2004. In the period from 2002, various arrangements were contemplated, and in some cases documents were signed, in relation to the cessation of Mrs Lockrey's then ownership or control of Blamathon and for the making by Mrs Lockrey of provision for the two children of Mr and Mrs Cooper's marriage. Not all of those arrangements, if indeed any, came to fruition. 7In relation to Blamathon, Mr Cooper was noted on ASIC's records as having been appointed as a director of Blamathon in October 2002. He was removed as a director a month later. He was again appointed as a director in June 2003 and again removed in September 2004. At no time was Mr Cooper registered as the owner of any shares in the company. At all relevant times, the legal ownership of the majority of the shares was held by Mrs Lockrey. For much of the time from its incorporation, Mrs Lockrey was the sole director of Blamathon. The ASIC extracts disclosing the Blamathon shareholdings and directorships were at Blue 540.

[3]

Mr Cooper's claims 8Mr and Mrs Cooper first sought advice from Mr Winter in relation to their then taxation liabilities. In his first statement (Blue 1I), Mr Cooper puts this as occurring in 1996, which is consistent with the rendering by Mr Winter of a memorandum of fees dated 10 October 1997 to Mr and Mrs Cooper for two hours time for "providing general advice with respect to financial position" (Blue 68). No account was given by Mr Cooper of any earlier advice sought from, or given by, Mr Winter. The assumptions that Mr Cooper's expert witness was instructed to make included that Mr Cooper first retained the professional services of Mr Winter in about 1996 (Assumption 11, Blue 19). 9Mr Cooper, however, alleged that from about the winter of 1994 Mr Winter acted as his solicitor on an oral and implied retainer to advise and act for him as to his commercial business interests and his personal legal affairs (Red 17U). 10Mr Cooper alleged that under that retainer Mr Winter had acted as his solicitor in 2002 in giving advice as to the proposed acquisition by Mr Cooper of the Bells Line of Road property (Red 18U). At that time, Mr Cooper was an undischarged bankrupt (at Blue 74G is a copy of the debtors' petition). The advice that Mr Cooper says he was given, in essence, was for the property to be acquired in Blamathon's name; that Blamathon would hold the property in trust for him; and that, when Mr Cooper was discharged from bankruptcy, Blamathon would transfer the legal title to the property to him (Blue 3T-4K). In Mr Cooper's words, he was told that when he was discharged from bankruptcy it would "all come back" to him, though Mr Cooper was inconsistent in his evidence as to what precisely was to come back to him (Black 39J; 43I; cf Black 44G-N). Mr Cooper claimed that, in giving that advice, Mr Winter breached a duty of care owed to him either under the alleged retainer or otherwise arising from the circumstances in which that advice was sought (Red 18-20). 11The particulars of negligence (set out at [9B] of the Amended Statement of Claim) (Red 19-20), included Mr Winter not advising Mr Cooper that if Blamathon purchased the property it would hold and control the property and Mr Winter's failure to advise as to the need for, and to prepare or cause to be executed, a trust instrument to identify Mr Cooper as the beneficial owner of the Bells Line of Road property. The same particulars were relied upon as giving rise to the breach of an implied duty of care arising from the alleged retainer (at [10A]) (Red 20), though it was also there alleged that Mr Winter gave an "undertaking" that the property would be transferred to Mr Cooper upon his discharge from bankruptcy. 12Mr Cooper also alleged that Mr Winter had breached a fiduciary duty, arising out of the solicitor/client relationship, owed to him (Red 21-22). The alleged breach of fiduciary duty was particularised by reference to Mr Winter's acceptance of appointment as a director of Blamathon in 2003 and by him acting against Mr Cooper's interests and voting in 2004 to remove Mr Cooper as a director of Blamathon ([12A] of the Amended Statement of Claim) (Red 21). 13The particulars of negligence/breach of retainer alleged against Mr Winter (at [9B(b)] and at [10A]) included that Mr Winter had advised Mr Cooper that Blamathon would hold the Bells Line of Road property in trust for him and had advised, and/or undertaken, that, upon Mr Cooper's discharge from bankruptcy, Blamathon would transfer the legal title to the property to him. There was no allegation in the pleading that Blamathon in fact held the legal title to the property in trust for Mr Cooper at any particular time. Nor was there any allegation in the pleading that Mrs Lockrey held the shares in Blamathon in trust for Mr Cooper at any time. 14Counsel appearing for Mr Cooper on the appeal, Mr Boyd, summarised Mr Cooper's "common law" case at trial as being that he was told that he could put the Bells Line of Road property, when he purchased it, in the name of Blamathon Pty Limited because that would be "safe" for him and that "[i]t will all come back to you"; that Mr Cooper had relied upon that advice and proceeded with the purchase in the name of Blamathon; and that, as it turned out, there was no trust instrument in place (AT 3.11-15). Hence, his damages claim was for the loss of the benefit of that property in the form of the proceeds of sale or the loss of the opportunity to develop that property (AT 3.24-28). 15The fiduciary duty claim also related to the loss of the ability to share in the profits from the sale or development of the property. That claim was based on an alleged duty arising out of the dealings between the parties and the nature of their ongoing relationship (AT 3.30-35). 16Insofar as the grounds of appeal, to which I will refer shortly, challenge findings made by the primary judge as to the beneficial ownership of the shares in Blamathon, Mr Boyd appeared to accept (at AT 33.40) that the finding that Ms Lockrey was the beneficial owner of the shares in Blamathon probably made no difference to the common law breach of duty claim - there referring to the common law cause of action he had identified as being that Mr Cooper had been given advice and had acted upon it against his own interest by leaving the situation as it was on the advice of Mr Winter "without ensuring, as he would have done had he been properly advised, that there was a trust in place".

[4]

Findings at first instance 17The primary judge (at [107]) (Red 60) accepted Mr Winter's evidence that he had been retained to act as Mr Cooper's solicitor on three discrete matters in 1997, 1998 and 2002, respectively, as noted at [3] of her Honour's reasons. Her Honour found that Mr Winter's retainers were limited to those discrete matters and that none of the conversations that were not referable to any of those discrete matters was sufficient to give rise to a broader retainer or, relevant to the breach of fiduciary duty claim, gave rise to any conflict that Mr Winter was obliged to avoid ([107]) (Red 60). Her Honour found that the allegations of breach of duty of care and breach of fiduciary duty had not been made out ([108]) (Red 61). Her Honour further found that there was nothing negligent or misleading about anything Mr Winter had said to Mr Cooper and hence that Mr Winter was not in breach of any duty of care in respect of advice given to Mr Cooper outside the scope of the three discrete retainers ([111]) (Red 61). 18As to causation, her Honour considered that, even if Mr Winter had given the advice that Mr Cooper said he had given him in relation to the Bells Line of Road property, it was difficult to see how this could have caused any loss ([115]) (Red 62). Her Honour found (at [116]) (Red 63) that Mr Cooper would have had no prospect of acquiring the Bells Line of Road property on his own account at the relevant time and (at [117]) (Red 63) that the prospects of Mrs Lockrey being persuaded to create a fixed, rather than a discretionary, trust of her shares in Blamathon in Mr Cooper's favour were non-existent. 19Her Honour considered that even if a notation in a document on which Mr Cooper relied, a letter dated 19 September 2003 from Mr Winter, as to Mrs Lockrey holding the Blamathon shares on trust for Mr and Mrs Cooper, had truly represented Mrs Lockrey's instructions, there was insufficient certainty about the terms of any such trust for this to have been sufficient to create a trust in favour of Mr Cooper in respect of the Blamathon shares ([118]) (Red 63). 20Even had there been a finding for Mr Cooper on liability, her Honour found that there was no substantial evidence of loss ([119]) (Red 64). At [121] (Red 64), her Honour identified a fundamental flaw in the damages claim, namely that damages would have been measured on a reliance basis and that the evidence did not establish that Mr Cooper would have been able to purchase the Bells Line of Road property in his own name. At [122] (Red 64), her Honour noted that there was no evidence of various matters in relation to the development of that property that Mr Cooper claimed would have proceeded had he purchased the property. 21Her Honour dismissed Mr Cooper's claim in its entirety (Red 65).

[5]

Appeal grounds 22As Mr Boyd made clear in the course of submissions, the challenges by Mr Cooper on this appeal are principally challenges to her Honour's factual findings as to the content of two critical conversations in 2002, on which Mr Cooper relies for the allegations based on the existence of a retainer in relation to the Bells Line of Road property acquisition, and as to her Honour's conclusion that there was no fiduciary obligation owed to Mr Cooper as alleged (AT 2.17-44). In relation to the disputed conversations, Mr Boyd (at AT 2.18) based the common law claim squarely on the second of those conversations, occurring in June 2002. 23By Notice of Appeal filed on 6 June 2012 (Red 75-80), it is contended that her Honour erred in the following respects: 1 in failing adequately to consider the evidence as to whether there was a retainer between Mr Cooper and the respondents which applied to the Bells Line of Road property. 2 in finding that there was no retainer between Mr Cooper and the respondents which applied to the Bells Line of Road property. 3 in failing to find that in the absence of a retainer, the respondents owed a duty of care in respect of the Bells Line of Road property. 4 in failing to find that there was a fiduciary obligation owed by the respondents to Mr Cooper in respect of the Bells Line of Road property. 5 in finding that Mrs Lockrey was the beneficial owner of the shares in Blamathon. 6 in finding (at [65]) that Mrs Lockrey's instructions that she held her shares in Blamathon on trust for him and Mrs Cooper were incorrectly recorded by Mr Winter in the letter dated 19 September 2003 in circumstances where: (a) there was an admission made by Mrs Lockrey in cross-examination that she held the shares in trust at that time; (b) Mr Winter's evidence was that Mrs Lockrey's instructions were that she held the shares in trust at that time, (c) Mr Winter did not give evidence that these instructions were incorrectly recorded, and gave evidence that these instructions were correctly recorded; (d) there was no evidence supporting her Honour's finding. 7 in finding (at [95]) that it would be inconceivable that he would have placed trust in Mrs Lockrey to hold her Blamathon shares in trust for Mr Cooper in circumstances where: (a) Mr Cooper's evidence was that he had been given that assurance by Mr Winter; (b) Mrs Lockrey had signed the letter dated 19 September 2003; (c) Mrs Lockrey's evidence was that it was her intention at that time to hold the Blamathon shares in trust, but that she subsequently changed her mind and informed Mr Winter of that; (d) Mr Winter's evidence was that Mrs Lockrey's instructions were that she held the shares in trust at that time. 8 in finding (at [5]) that Mr Cooper only gave Mr Winter instructions as a director or employee of Blamathon (other than for the matters outlined at [3] in her Honour's reasons) in circumstances where Mr Winter produced no documents in relation to advice he gave Mr Cooper, for which Mr Winter could not provide an explanation to the Court. 9 in failing to find on the evidence that the respondents breached: (a) their duty to Mr Cooper under their retainer by him; (b) their duty of care to Mr Cooper; (c) their fiduciary duty to Mr Cooper. 10 in finding that if there had been any breach by the respondents, such breach had not caused any damage to Mr Cooper. 11 in failing adequately to consider the evidence and arguments bearing upon the issues of retainer, duty of care, fiduciary duty, breach of duty, causation and damage, and to give adequate reasons for decision on those issues. 24For the reasons set out below, I consider that the appeal should be dismissed with costs.

[6]

Grounds 1-2 - alleged failure adequately to consider the evidence as to whether there was a retainer which applied to the Bells Line of Road property; finding that there was no such retainer 25The alleged retainer pleaded in paragraphs [3], [3A] and [4] of the Amended Statement of Claim (Red 17-18) was, in substance, an ongoing general retainer in existence at all relevant times from the winter of 1994. It was alleged to be "oral in entirety and further ... implied from the defendant's conduct toward the plaintiff and by conduct of the plaintiff's affairs by the defendant after being retained by the plaintiff in 1994" ([3A]). 26The respondents denied the alleged retainer. It was not disputed by Mr Winter that he had acted for Mr and Mrs Cooper in relation to particular matters over the period from 1996: giving them advice as to their financial position at some time after his initial meeting with Mr Cooper in 1994 (Blue 27C); drafting a sale agreement between Mrs Lockrey and them in relation to the sale of the Ross Street property in 1997 (Blue 27R-T) and communicating with the Australian Taxation Office in 1998 (Blue 28G-29H). Mr Winter or his firm had prepared the couple's wills in September 2002 for which an invoice was rendered on 4 September 2002 (Blue 167). What was, however, disputed was the existence of an ongoing retainer over the period from 1994, as pleaded, and, relevantly, any retainer to provide advice in relation to the Bells Line of Road acquisition. 27Her Honour accepted (at [107]) (Red 60) Mr Winter's evidence that he had been retained on particular discrete matters. Those matters did not include the acquisition of the Bells Line of Road property. On appeal, Mr Boyd did not point to anything in the evidence of the initial instructions given to Mr Winter in about 1996, or the earlier meeting of the two in 1994, as evidencing a general or ongoing retainer that had been in place from 1994 onwards nor anything to suggest that the retainer in 1996 went beyond the advice then sought as to the couple's taxation liabilities arising out of or related to the Ross Street development. Rather, Mr Boyd focussed on the two disputed conversations, and the subsequent drafting by Mr Winter of various documents in the period from 2002 to 2004, as being more consistent with Mr Cooper's case based on the alleged retainer than her Honour's finding that there was no such retainer (AT 2.27-30). 28The critical conversations were those that Mr Cooper said occurred in January 2002 and June 2002, respectively. Both were prior to the purchase by Blamathon of the Bells Line of Road property. The January 2002 conversation was before Mr Cooper had even identified the Bells Line of Road property as being for sale and/or a potential development opportunity. 29Her Honour's consideration of, and factual findings in respect to, the January and June 2002 conversations may be found at [84]-[104] of her Honour's reasons (Red 53-60). Her Honour preferred Mr Winter's version of both conversations ([89]) (Red 54) principally because her Honour considered that Mr Winter's version was consistent with the objective circumstances summarised in [91] (Red 55) and with the documentary evidence, including the various draft documents to which her Honour had earlier referred in her reasons and which her Honour considered reflected various attempts by Mrs Lockrey to resolve the disputes between Blamathon, Mr Cooper and Mrs Cooper and to extricate herself from Blamathon.

[8]

June 2002 conversation 32The second disputed conversation was in June 2002. Mr Cooper said he had a telephone conversation relating to the Bells Line of Road property in which he informed Mr Winter that he wanted to "move on the transaction quickly"; asked Mr Winter how he should proceed and whether he should incorporate a new company structure to acquire the property; and reminded Mr Winter that he was a bankrupt but that he would be discharged from bankruptcy in a couple of months (Blue 4K-5J). 33According to Mr Cooper, in that conversation Mr Winter advised him to proceed with the purchase in the name of Blamathon as it would be easier to borrow funds needed to develop the property through that company structure (Blue 4W). Mr Cooper said that he asked Mr Winter if there would be any difficulty in him obtaining the benefit from the property, in circumstances where it was purchased in the name of Blamathon, and that Mr Winter said: there would be no problem as Kath owns Blamathon and Blamathon would hold the property in trust and would have to sign it back to you. ... We'll just put it all in Blamathon's name and then when you're discharged from Bankruptcy, it will all come back to you. (Blue 5F-J) 34Mr Cooper said that Mr Winter also asked him to approach Blamathon's accountant, Mr Godwin, to get the paperwork started "for the transfer of the shares back to [him]" (Blue 5I-J). Mr Cooper went further, in his oral evidence-in-chief, saying that when he expressed a worry about his mother-in-law and his wife, Mr Winter had said: "[i]t will come back to you. Trust me. I am in control" (Black 32I-K). 35Mr Winter's version of the June 2002 conversation (at [36] of his affidavit) was that Mr Cooper told him that there was a property at Bells Line of Road that he "wouldn't mind buying"; that Mr Winter said to Mr Cooper: "I don't see how you can do that, you are a bankrupt"; that Mr Cooper asked if he could form another company to buy it (to which Mr Winter said he gave the same response); and that Mr Cooper then suggested that Mrs Lockrey might buy it. According to Mr Winter, he responded to the effect that that was fine, as long as Mrs Lockrey was happy to do that and she instructed him to do it (Blue 29W).

[9]

"Objective circumstances" 36The first complaint by Mr Cooper as to her Honour's acceptance of Mr Winter's version of both these conversations is that her Honour's summary (at [91]) (Red 55) of the objective circumstances failed to have regard to particular matters that it is contended are more consistent with Mr Cooper's version of the conversations. 37The objective circumstances listed by her Honour at [91] (Red 55) were as follows: (1) At the time the Ross Street Property was sold to Blamathon in late 1997, the plaintiff and Ms Cooper were in financial difficulties which ultimately led to their bankruptcy. (2) The purchase price of the Ross Street Property, $250,000, was commensurate with its market value. (3) Ms Lockrey was either unwilling or unable to assist the plaintiff and Ms Cooper to prevent their bankruptcies in August 1999. (4) By early 2002 the plaintiff and Ms Cooper were having matrimonial difficulties which continued for some years, although until 2004 they continued to participate in the developments undertaken by Blamathon. (5) Ms Lockrey was in a position to assist her daughter and had shown herself to be prepared to do so by causing Blamathon to buy the Ross Street Property for market value so as to pay out the mortgagee and derive such benefit as could be had from Stage 2 of the development. (6) The terms of the Ross Street Agreement did not confer an interest in the Ross Street Property on either the plaintiff or Ms Cooper. (7) Ms Lockrey was concerned to protect and provide for her grandchildren ... (8) Ms Lockrey, through Blamathon, was prepared to develop Stage 2 of the Ross Street Property and the Bells Property, but only on the basis that her financial interests and those of Blamathon were protected. (9) Ms Lockrey was prepared to employ the plaintiff's services in the development of properties. (10) Ms Lockrey contemplated various legal structures over time that would permit her to extricate herself from Blamathon and the development of the Ross Street and Bells Properties but none of these came to fruition. (11) Mr Winter principally acted for Ms Lockrey and Blamathon but he also acted for the plaintiff and Ms Cooper in that he: (a) gave them financial advice about the effects of bankruptcy in 1996; (b) acted for them in 1997 in respect of the agreement to transfer the Ross Street Property; (c) made some communications with the ATO on their behalf in 1998; and (d) drafted their wills in 2002. 38The matters to which it is contended her Honour failed to have regard in this context are: (i) the 19 September 2003 letter prepared by Mr Winter on instructions from Mrs Lockrey and signed "agreed" by Mrs Lockrey, stating that the shares she held in Blamathon were held in trust for Mr and Mrs Cooper (Blue 346); (ii) the benefit Mr and Mrs Cooper retained in the Ross Street property development as evidenced in the 10 October 1997 agreement (Blue 59); (iii) the discretionary trust deed prepared by Mr Winter and signed by Mrs Lockrey in his presence (Blue 129-160); the deeds of indemnity (Blue 186-188, 197-199, 220-222); the 2003 deed (Blue 248-250); and the deed of arrangement (Blue 433-437). 39Mr Boyd submits that these are contemporary documents reflecting what was in the contemplation of the parties at that time (Orange 30I) and providing evidence of the course of dealings and the ongoing relations between the parties (AT 2.41-44). Other than the October 1997 agreement (Blue 59), the particular documents to which Mr Boyd refers were all documents prepared, and in some cases signed, after the critical conversations. As explained below, the significance placed on a number of the documents by Mr Boyd was, broadly, that they made reference to a trust, even though the trust to which reference was there made was not a trust of the Bells Line of Road property, in the case of the 19 September 2003 letter and the discretionary trust deed, or that they made reference to Mr Cooper taking over Mrs Lockrey's obligations, with or without reference to Blamathon, in the case of the deeds of indemnity, 2003 Deed and draft deed of arrangement.

[10]

19 September 2003 letter 40The 19 September 2003 letter (Blue 346) was sent by Mr Winter to Mrs Lockrey following a meeting on 15 September 2003 of the three directors of Blamathon at that time: Mr and Mrs Cooper and Mr Winter. The letter was headed "Blamathon Pty Limited Affairs". In it, Mr Winter referred to a recent telephone conversation relating to "settlement". The letter stated: We confirm that settlement is to proceed on the following basis: 1. That on settlement you are paid the sum of $100,000.00; 2. That you are paid the further sum of $60,000.00 within eight weeks of settlement taking place; 3. That within eight weeks of settlement you are reimbursed for the expenses which you have outlaid on behalf of Kim and Peter pursuant to your email dated 15.9.03; 4. That you have transferred to you Lot 21 Tollgate Crescent, Windsor, at no cost to yourself. We note that the above is in satisfaction of any claim which you may have against Blamathon Pty Ltd. We further note that the shares which you hold in Blamathon Pty Limited are held in trust for Kim and Peter Cooper. 41The letter was signed by both Mrs Lockrey and Mr Cooper. Mrs Lockrey's signature appeared directly beneath the words, apparently in her handwriting, "agreed by K.M.Lockrey". The letter did not make clear on its face whether it was written by Mr Winter in the capacity for which Mr Cooper contends, namely as Mr Cooper's solicitor or pursuant to an ongoing or general retainer by Mr Cooper, or whether, as Mr Winter contends, Mr Winter was then acting on Ms Lockrey's instructions. 42What Mr Boyd places reliance on in this letter, as being consistent with Mr Cooper's version of the disputed conversations and as part of a course of dealing from which an ongoing solicitor/client retainer or fiduciary duty should be inferred, is the statement at the conclusion of the letter noting that Mrs Lockrey held her shares on trust for Mr and Mrs Cooper. Mr Boyd points to the evidence of Mr Winter and Ms Lockrey in cross-examination as to this letter, to which I will refer later when considering Grounds 6 and 7 of the Amended Notice of Appeal, when challenging her Honour's findings at [65] (Red 49). 43Even assuming that the signature by Mrs Lockrey under the words "[a]greed by" at the foot of the letter amounted to an acknowledgment, or admission, by her that the Blamathon shares were then held by her on trust for Mr and Mrs Cooper, that statement does not provide support for the assertion by Mr Cooper that back in January 2002 he had sought advice from Mr Winter as to things to be "sorted out" or "signed back" to him. There had been no suggestion at that stage of any transfer of Blamathon shares to him. Nor is it consistent with what Mr Cooper contends Mr Winter had advised him in June 2002, namely that the Bells Line of Road property would be held on trust for him. It does not provide a basis for concluding that her Honour's finding that Mr Winter's version of the conversation was more reliable ([107]). 44Insofar as the submission is that her Honour failed to have regard to the letter when considering the claimed retainer, it was clearly a document to which her Honour gave consideration (from [59]-[68]) (Red 48-49) and which her Honour must have had in mind when approaching the findings as to the disputed conversations.

[11]

October 1997 agreement 45The second document to which it was said the primary judge failed to have regard when taking into account the "objective circumstances" was the October 1997 deed drafted by Mr Winter and signed by each of Mrs Lockrey and Mr and Mrs Cooper (Blue 59). The recitals to that deed recorded, incorrectly as it quickly transpired, that Mrs Lockrey had purchased the Ross Street property. No such purchase had been effected at that time. Therefore, at most, the deed could have been seen as an agreement to purchase the property. The deed went on to make provision for the payment in the future of "additional consideration" to Mr and Mrs Cooper out of the proceeds of sale of the subdivided lots the subject of that development. Nothing in the deed purported to give Mr and Mrs Cooper any interest in the property following its transfer. 46Mr Winter was cross-examined as to the acknowledgment in clause 5 of the deed that each of the parties had been given the opportunity to seek legal advice and explained that he had offered that opportunity to all the parties because he was uncomfortable that they all wanted him to prepare the deed and all wanted to sign it in front of him (Black 101I-L). In his affidavit (Blue 27M-S), Mr Winter deposed that he had advised Mrs Lockrey to obtain independent legal advice in relation to the transfer of the property and that he acted for Mr and Mrs Cooper. However, beyond documenting the October 1997 agreement, Mr Winter does not appear to have acted further in relation to the transaction. The purchase was in fact made in the name of Blamathon. Mr Winter did not act on that purchase (Black 106E;Q). 47Mr Cooper's evidence (Blue 2F-M) as to the context in which Mr Winter had advised Mrs Lockrey to obtain independent advice was that there had been a discussion about the transfer of title to the Ross Street property to Mrs Lockrey in trust for his wife and him. That, however, is not consistent with the October 1997 agreement, which made no reference to the Ross Street property, or for that matter the shares in Blamathon, being held in trust by Mrs Lockrey for Mr and Mrs Cooper. Such an arrangement would arguably have been inconsistent with the payment of market value for the acquisition of their interest in the property, such payment being one of the matters expressly noted by her Honour as part of the objective circumstances (at [91]) (Red 55). The transfer form signed by Mr and Mrs Cooper to effect the transfer of the property to Blamathon did not disclose that it was acquiring the property as trustee (Blue 69).

[12]

2002/2004 documents 48As to the third of the matters to which it is said that her Honour failed to have regard when considering the "objective circumstances" relevant to which version of the disputed conversations should be accepted, reference is made to various documents drafted by Mr Winter or his firm in the period from 2002 onwards. 49The first of those documents, chronologically, was a Discretionary Trust Deed apparently prepared and executed at some stage around the time that contracts for the purchase by Blamathon of the Bells Line of Road property were exchanged in August 2002 (Blue 129-160). The timing of this document is placed around August 2002 following the sending of a letter by Mr Winter to Blamathon's accountant on 21 August 2002 (Blue 92). 50In the first paragraph of that letter, Mr Winter recorded that he had been instructed by Mrs Lockrey, Mr Cooper and Mrs Cooper to transfer the Blamathon shares to Mrs Cooper: as to 50 shares, to be held for one of Mr and Mrs Cooper's children and as to the other 50 shares to be held for their other child. 51In the second and third paragraphs, Mr Winter recorded that he had been instructed to draft a discretionary trust deed in which the specific beneficiaries were the Cooper children and the further general beneficiaries were Mr and Mrs Cooper and that, after the transfer of the shares, Blamathon intended to change its name to Minoan. 52The significance placed by Mr Boyd on the above was, first, that the letter of 21 August 2002 showed that Mr Winter had been instructed not only by Mrs Lockrey but also by Mr and Mrs Cooper that there was to be a transfer of shares in Blamathon to Mrs Cooper to be held on a discretionary trust and, second, that a discretionary trust was in fact established. Although the discretionary trust established by the deed was one of which Mrs Cooper was not the trustee and the trust property did not expressly include the Blamathon shares or the Bells Line of Road property, this document was relied upon by Mr Boyd as being "consistent with discussions about trusts" (AT 7.18). 53As to the source of the instructions recorded in the 21 August 2002 letter, there is room for debate as to who provided the instructions in the second and third paragraphs. Moreover, it by no means follows that the person or persons providing the instructions recorded in the various paragraphs of the letter was someone by whom Mr Winter was retained as a solicitor. Read strictly, the letter records no more than the receipt of instructions as to various matters. A solicitor may be instructed or may receive instructions, in a loose sense, from persons other than that solicitor's client. So, for example, a solicitor acting for one party to a particular transaction, say, here, Mrs Lockrey, might seek information as to particular matters in relation to that transaction from persons other than his or her client. 54In the present instance, any instructions for the transfer of the shares in Blamathon to a trustee to be held on trust could only have come from Mrs Lockrey, as the holder of those shares. However, the steps contemplated in that letter also included the appointment of Mrs Cooper as trustee, for which appointment, presumably, her consent would have been sought. Hence, "instructions" on that aspect of the matter would logically come from Mrs Cooper, without Mrs Cooper necessarily having a solicitor/client relationship with Mr Winter. Read in that way, the reference to instructions from Mr and Mrs Cooper in the first paragraph of the letter is not of itself inconsistent with a finding that the transaction in relation to the acquisition of the Bells Line of Road property, and the later proposal in relation to a transfer of Blamathon shares to Mrs Cooper to hold those shares on trust for the children, was not one in respect of which Mr Winter was retained by or acting for Mr Cooper. 55The undated Discretionary Trust Deed signed by both Mrs Lockrey and Mrs Cooper created a discretionary trust with the classes of beneficiaries referred to in Mr Winter's 21 August 2002 letter. However, all that was recorded as having been settled on the trustee, a non-existent entity named Minoan Pty Ltd, was a relatively small sum of money. There was no reference in the Deed to any transfer of Blamathon shares to be held on trust by the trustee under the terms of that Deed. 56Mr Boyd contended (at AT 6.34/50) that the undated discretionary trust deed was consistent with Mr Cooper having been told that Blamathon held the shares in trust for him. However, Blamathon was not the owner of the shares; Mrs Lockrey was the owner. Moreover, the June 2002 conversation was relied upon in the pleading as amounting to the giving of advice that the Bells Line of Road property, not the shares in Blamathon, was to be held in trust for Mr Cooper. 57The second set of documents referred to in this context are three deeds of indemnity that were prepared in about October 2002 by Mr Winter in which provision was made for Mrs Lockrey to be indemnified by each of Blamathon, Mr Cooper and Mrs Cooper, respectively, in respect of personal guarantees said to have been given by Mrs Lockrey relating to obligations incurred by the party granting the indemnity (Blue 186-188; Blue 197-199; Blue 220-222). 58Mr Cooper signed the deed of indemnity in which he was named as a party and that deed was dated 14 October 2002. It was not countersigned by Mrs Lockrey. Mr Winter's evidence was that the deeds of indemnity were never "actioned" (Blue 118H). Mrs Lockrey said that this was because she found out that Mr Cooper had changed her company's name without her knowledge (Blue 165H). It is not clear whether this is a reference to the use of the name Minoan. However, 14 October 2002 is the date on which Mrs Lockrey signed a document resigning as a director of Blamathon (Blue 194-195), which she later claimed was done under duress (Blue 15N-P). Mr Cooper relied on Mrs Lockrey's resignation in order to become registered as a director of Blamathon in November 2002 (Blue 218-219) just prior to completion of the sale of the Bells Line of Road property to Blamathon (Blue 230-232). 59The deed of indemnity signed by Mr Cooper is relied upon by Mr Boyd as being consistent with Mr Cooper taking on the obligations of Mrs Lockrey as director and shareholder of Blamathon (AT 8.24), though it does not make express provision for this. The deed of indemnity between Blamathon and Mrs Lockrey, said by Mr Boyd to be not going directly to the point, is again relied upon as consistent with the case put by Mr Cooper at trial (AT 9.6), though it is not clear that it is linked in any way to obligations in relation to the Bell's Line of Road property. 60While the deeds of indemnity are consistent with an intention by Mrs Lockrey at that time that she would withdraw from the control and/or management of Blamathon, they do not lead to a conclusion that Mrs Lockrey then held the shares or property of Blamathon on trust for Mr Cooper or had agreed to do so. They do not lead to the conclusion that there was at this stage anything binding Mrs Lockrey to such a course of action. Further, the entry into such deeds of indemnity does not require the conclusion that, at whatever time Mrs Lockrey gave guarantees for the benefit of Blamathon to which the deeds refer, she was doing so because Mr Cooper held an equitable interest in the shares or property of Blamathon. 61The third of the documentary material relied upon by Mr Boyd for this submission is a deed, again prepared by Mr Winter, signed by each of Mrs Lockrey, Mrs Cooper and Mr Cooper at an unidentified time in 2003 (referred to as the 2003 Deed) (Blue 248-250). 62The 2003 Deed recorded that Mrs Lockrey was signing in her own right and as director of Blamathon. The 2003 Deed recited, among other things, that Mrs Lockrey was the sole director of Blamathon; that Blamathon was "the Trustee of the Cooper Family Trust and holds real estate and other property in its capacity as Trustee under the Cooper Family Trust"; and that Mrs Lockrey was desirous of retiring as a director and appointing, in her stead, Mr and Mrs Cooper and Mr Winter as directors of the company. The real estate and other property referred to in the recitals were not identified. 63The 2003 Deed made provision for Blamathon, immediately upon execution, to apply for finance in order to refinance its existing financial obligations so as to ensure that all guarantees previously given by Mrs Lockrey were extinguished, withdrawn and/or paid out in full (Clause 1) and that, upon receipt of a satisfactory written loan approval that had the effect of discharging any personal guarantees previously given by her, Mrs Lockrey would forthwith cause a meeting of Blamathon to be held at which Mr Winter and Mr and Mrs Cooper would be elected as directors and she would then resign as a director (Clause 2). 64Steps were taken in June 2003 consistent with the implementation of certain of the provisions of the 2003 Deed. An application was made in June 2003 on behalf of Blamathon to a finance broker for a loan to refinance an existing AMP Finance facility as well as to repay a loan to Mrs Lockrey, stated to be in the amount of $200,000, and to provide surplus monies "for future investment" (Blue 283-294), under cover of a letter that referred to Mr and Mrs Cooper "now" being in control of Blamathon "by paying out" Mrs Lockrey. There is no suggestion that Mrs Lockrey was privy to the making of that application. Resolutions were passed at a meeting of Blamathon on 17 June 2003 (Blue 232) to the effect that each of Mr and Mrs Cooper and Mr Winter be appointed as directors; that Mr Winter be appointed chairman; that Mrs Lockrey's resignation be accepted; and that the company accept a loan set out in the letter of offer from the finance broker through whom the finance application had been made. Mr and Mrs Cooper then signed a letter of offer for the refinancing of the Blamathon facility on 3 July 2003, in their capacity as directors (Blue 232Q). All of this is consistent with an intention on the part of Mrs Lockrey at that stage to cease her involvement with or control of Blamathon, though not necessarily consistent with any arrangement of the type that Mr Cooper said he had been advised would be put in place in January or June 2002. 65Finally, reliance is placed by Mr Boyd on the preparation by Mr Winter, at some time around or after 1 September 2004, of a draft Deed of Arrangement in which the named parties were Blamathon, Mrs Lockrey and each of Mr and Mrs Cooper (Blue 433-437). 66The draft deed recited that Mr and Mrs Cooper had, up until 1 September 2004, been employed by Blamathon to carry out the objects of the corporation and that Mrs Lockrey had decided to forego any benefit that might be available to her as a shareholder of Blamathon and to transfer or deal with her shares in Blamathon in accordance with the directions of Mr Cooper, provided that there was full compliance with the provisions of the deed. The draft deed provided that Mr and Mrs Cooper were to accept the financial provision set out for them in the deed in final satisfaction of any claims. 67There is no suggestion that this deed was ever signed. It was relied upon by Mr Boyd as indicating that Mr Winter had received instructions from all of the parties thereto. There is, however, nothing on the face of the document to suggest that this was necessarily the case. It is equally consistent with Mr Boyd receiving instructions from Mrs Lockrey as to a proposed means of resolving what Mr Winter referred to as "these family situations" (Black 120L).

[13]

Conclusion as to the complaint as to the alleged failure to have regard to the "further objective circumstances" 68It is not clear, on Mr Cooper's version of the January 2002 conversation, what it was that was to be "sorted out" or "signed back over". Nor is it clear what Mr Cooper says he was then told was held in trust. What is clear is that these cannot have been references to the Bells Line of Road property, since Mr Cooper did not become aware that it was for sale until about early June 2002 (Blue 4K). There is also no basis for thinking that this was a reference to the shares in Blamathon, since there is no account of any discussion by that stage as to a transfer of the shares of the company or a trust in relation to those shares. 69The only property dealing that had taken place by January 2002, to which the first disputed conversation as recounted by Mr Cooper could logically have related, was the acquisition by Blamathon of the Ross Street property. The only documentation relating to this was the signed October 1997 agreement. While it is possible that, as at January 2002, what Mr Cooper might have considered needed to be "sorted out" was his, and his wife's, entitlement under the October 1997 agreement to payment of the "additional consideration", this would not support the conclusion that there was a retainer in relation to the acquisition of the yet-to-be-identified Bells Line of Road property or an ongoing generalisation. Moreover, there had been nothing to that point to suggest that the payment of "additional consideration", once the subdivided lots in the Ross Street development were sold, was to be effected by something to be "signed over". 70The submission that her Honour failed adequately to consider the "benefit" retained by Mr and Mrs Cooper in the Ross Street property under the October 1997 agreement suffers from the problem that they retained no interest in the property at all under that agreement. At most they had a contractual right to payment of moneys, assuming the agreement had not been superseded by the later arrangements in which Mr Winter had played no part and by which Blamathon, and not Mrs Lockrey, had actually acquired that property. 71As to the import of the 19 September 2003 letter, relied upon as supporting Mr Cooper's version of either the January or June 2002 conversation, in its terms the letter records a proposed or purported "settlement" of matters between the various parties. The fact that this might be achieved in particular ways does not support a conclusion that this was confirming an existing arrangement, as opposed to a new arrangement in order to resolve matters. 72The acknowledgement in the letter that the Blamathon shares were held in trust for Mr and Mrs Cooper does not accord with Mr Cooper's account that Mr Winter had said in 2002 that the property would be held on trust for him. It is certainly conceivable that a claim by Mr Cooper to the property could have been met by transferring to him the Blamathon shares. However, the 19 September 2003 letter is equally consistent with it being part of an attempt prospectively to resolve matters, without involving a recognition or acknowledgment that this was what had been initially proposed in June 2002. Even if there was at that time a trust in respect of the Blamathon shares as referred to in the letter, that is not consistent with Mr Cooper's account of either of the disputed conversations. Nor does it make more likely that Mr Winter was acting in relation to the Bells Line of Road property over the relevant period under a retainer on behalf of Mr Cooper. 73As to the documents referred to at 13(iii) of Mr Boyd's submissions (Orange 29W-30G), it cannot fairly be said that her Honour had failed to have regard to those documents. Her Honour expressly referred (at [89]) (Red 55) to the consistency of Mr Winter's version with "documentary evidence, including the various draft documents referred to above", by which her Honour must have been referring at the least to the 2003 Deed that Mr Winter thought was "another document that was never actioned" (Black 120U) and the unsigned draft deed of arrangement. Her Honour considered that the documentary evidence reflected Mrs Lockrey's endeavours to resolve the disputes between Blamathon, Mr Cooper and Mrs Cooper, and to extricate herself from Blamathon ([89]) (Red 55). The documents clearly permit such a description. They do not in my opinion warrant the conclusion that they are more consistent with Mr Cooper's version of the January and June 2002 conversations, and hence his claim as to the existence of an ongoing retainer, than Mr Winter's version of those conversations. 74Moreover, the alleged consistency Mr Boyd contends there is between these documents and Mr Cooper's version of the conversations, or the alleged ongoing retainer, goes no further in some instances than that there was a reference in those documents to a trust, i.e., that they are consistent with a trust being contemplated by the parties. The various document are not, however, consistent with what Mr Cooper contended in his pleading, namely that the Bells Line of Road property was to be held in trust for him by Blamathon. Nor are they consistent with any contention that Mr Winter advised Mr Cooper that the shares in Blamathon would be held in trust for him or that Mrs Lockrey ever agreed to hold her shares in trust for Mr Cooper alone. There is, for example, a clear inconsistency between a transfer of the Blamathon shares to be held in trust by Mrs Cooper as trustee for the benefit of the children, as contemplated in the 2003 Deed and referred to in the 19 September 2003 letter, and a trust of the shares in Blamathon in favour of Mr Cooper alone. The discretionary trust deed contemplates a quite different arrangement yet again. Mr Cooper's understanding, as at July 2002, was that the Blamathon shares were to be "changed into a trust" for his children and that Mrs Cooper was to become the "director/trustee of the company" (Blue 87-J). 75There is an obvious difference between a proposal for the transfer of the Blamathon shares to Mrs Cooper to be held in trust for his children with the setting up of a discretionary trust in respect of which Mr Cooper was named as an additional member of the class of general beneficiaries. This may explain the confusion on the part of Mr Cooper as to what it was that he contended was held in trust for him and by whom (e.g. at Black 44). 76By the time her Honour came to consider the findings in respect of the disputed conversations, her Honour had considered in detail the narrative of events. Her Honour had regard to the 21 August letter, for example, at [38] (Red 43), implicitly accepting Mr Winter's evidence that the suggestion in that letter that he was also acting for Mr Cooper and Mrs Cooper was a mistake. Her Honour had regard to the discretionary trust deed at [39] (Red 43), accepting that it established that the creation of a discretionary trust for Mrs Lockrey's grandchildren was in contemplation at some time and inferring that it had been in contemplation at least from 2002. The 19 September letter was considered from [59] - [66] of her Honour's reasons. 77Overall, a consideration of the "further objective circumstances" to which Mr Boyd has referred, does not point to error in her Honour's findings as to the disputed conversations, nor as to her Honour's findings that there was no retainer as alleged by Mr Cooper.

[15]

Course of conduct 80Insofar as reliance was placed by Mr Cooper on a retainer to be implied from a course of conduct, Mr Boyd's submission is that the relationship between Mr Cooper and Mr Winter was "consistent" throughout the whole of the period from 1996 to 2004 and that nothing changed in that relationship except the "intervention" or "intercession of Blamathon (AT 5.35-45; 18.44-46; Orange 32E-S; 36D-N). Mr Boyd points to the fact that over this period there were occasions on which Mr Cooper provided instructions to Mr Winter. He submits that this Court should draw inferences from the documents referred to above that Mr Winter continued to act for Mr Cooper or for all parties over the period through to 2004 (AT 11.23). 81Mr Winter's evidence was that he had regular dealings with Mr Cooper "as a director of" Blamathon (Black 126Y-127A), an answer that is not inconsistent with Mr Cooper's position that he continued to work on the Ross Street development on behalf of Blamathon during his bankruptcy. Therefore, there was a logical explanation, that it was open to her Honour to accept, that the provision of instructions from time to time by Mr Cooper in relation to Blamathon's affairs was not indicative of a solicitor/client retainer between Mr Winter and Mr Cooper in an individual capacity. Apart from the periods in which Mr Cooper was a director of Blamathon, namely from June 2003 to September 2004 and, assuming he had earlier been validly appointed following Mrs Lockrey's resignation letter, from October 2002 to November 2002, Mr Cooper was only in a position to give instructions on behalf of Blamathon with Mrs Lockrey's authority as the majority shareholder, not in his own right. The giving of those instructions is consistent with Mr Winter having formed a solicitor/client relationship with Blamathon and/or Mrs Lockrey, from the time of the acquisition of the Bells Line of Road property by Blamathon, and simply obtaining direction or instructions from Mr Cooper on various matters while in the course of acting for Blamathon. 82Reliance is also placed by Mr Boyd on the fact that Mr Winter acted not simply for Blamathon during the period through to 2004 but also for individuals such as Mr Cooper's mother in respect of a mortgage to Blamathon (Orange 32P-Q). Mr Winter admitted that in June 2001 he had acted for Mr Cooper's mother on a mortgage transaction but deposed that this was on instructions from Mrs Lockrey (Blue 29Q), which detracts from the force of Mr Boyd's submission. In any event, the fact that Mr Winter acted for Mr Cooper's mother on an individual transaction does not make it more likely that he held a general retainer for Mr Cooper over the period. 83Mr Winter's dealings with Mr Cooper from the time of Mr Cooper's bankruptcy in 1999, other than the one instance relating to the drafting of his and Mrs Cooper's wills, are consistent with Mr Winter's account of events: namely, that Mr Winter was retained by Blamathon, on instructions from Mrs Lockrey, to act on the purchase of the Bells Line of Road property once the possibility of its purchase by Blamathon had been suggested to her by Mr Cooper (Blue 29U-30P; 31S-33D; 33M-34P) and that thereafter he acted for Blamathon from time to time on instructions from Mrs Lockrey (Blue 27H-J); and that, at a later stage, Mr Winter acted on the instructions of Mrs Lockrey in drafting various agreements to reflect her changing instructions as the major shareholder of Blamathon or, in the family context, as to how she sought to resolve issues arising out of the breakdown of the relationship between Mr and Mrs Cooper, such as the drafting of the proposed deed of arrangement (Blue 30X-31R; Black 120U-W). 84The fact that a client instructs solicitors on successive matters does not mean that there is a general or ongoing retainer in place. Ordinarily, one might expect that a general retainer of the kind that the solicitor was committing himself or herself to accept instructions on matters, whether of a specific or general nature, from a particular client - and hence not in a position to accept a retainer from a client whose interests would conflict with the former client, would be recorded in writing; if not, at least the subject of an oral agreement. Here, there was nothing in the relevant conversations to support the assertion of a general retainer. The mere fact that Mr Winter had dealings with Mr Cooper over the period does not point to error in her Honour's findings as to the non-existence of the claimed retainer. 85The primary judge clearly had regard to the course of events and documents to which Mr Boyd draws attention in his submissions on appeal. Her Honour did not err in concluding that Mr Winter's retainer in relation to the acquisition of the Bells Line of Road property was not a retainer in respect of which Mr Cooper was his client. Grounds 1 and 2 therefore fail.

[16]

Ground 3 - finding that, in the absence of the alleged retainer, there was no duty of care in respect of the Bells Line of Road property 86Ground 3 alleges error by her Honour in finding that, in the absence of a retainer, there was no duty of care owed to Mr Cooper in respect of the Bells Line of Road property. Mr Boyd relied on Watkins T/as Watkins Tapsell v De Varda [2003] NSWCA 242 for the proposition that the absence of a retainer does not of itself preclude a duty of care from arising on the part of solicitor towards someone the solicitor knows is relying on the solicitor to proceed in accordance with his or her interests. 87For Mr Cooper, it was submitted that he was relying at all times upon Mr Winter (Orange 34H). The particulars of negligence assert breaches of duty of care in failing to provide warnings and protections in relation to the acquisition by Blamathon of legal title to the Bells Line of Road property, including the failure to advise of the need for, or to cause to be executed, a trust instrument identifying Mr Cooper as the beneficial owner of that property ([9B(f); Red 19). On Mr Cooper's case, therefore, Mr Winter had a duty either to ensure that Mr Cooper obtained a beneficial interest in the Bells Line of Road property or to advise him as to the dangers of acceding to a trust arrangement for the purchase of the property by Blamathon. That case depended on Mr Cooper's version of the June 2002 conversation being accepted. It was not. Her Honour did not err in that conclusion. 88Her Honour noted (at [106]) (Red 60) that ordinarily there is no continuing duty of care once a solicitor/client retainer comes to an end. Her Honour nevertheless accepted (at [111]) (Red 61) that Mr Winter owed a duty not to mislead Mr Cooper or give him negligent advice in circumstances where Mr Winter should have realised that Mr Cooper would trust in his special competence to give that advice; it would be reasonable for Mr Cooper to accept and rely on that advice and it was reasonably foreseeable that Mr Cooper would suffer loss should the advice be unsound ([110]) (Red 61). 89Her Honour proceeded to consider whether any advice given in the relevant conversations as negligent or misleading. In so doing, her Honour proceeded on the implicit assumption, contrary to the challenge made in ground 3 of the Notice of Appeal, that there was a duty of care outside the scope of the individual retainers that had been established. Her Honour found that there was nothing negligent or misleading in the advice that Mr Cooper was given - namely, that he was not in a position to purchase the property himself, or to incorporate a company to do so, while he was still a bankrupt. No error has been shown in that conclusion. 90A duty of care limited to the duty not to give negligent or misleading advice would not, in the circumstances, extend to the giving of advice as to matters such as the ways in which Mr Cooper might later be able to acquire the property in his own name. Nor would it extend to advising as to the "dangers" of acquiring only an equitable interest in the property if, as her Honour held, Mr Winter's version of the conversation was accepted, since no trust arrangement had then been discussed. On either version of the June 2002 conversation, Mr Cooper was contemplating seeking Mrs Lockrey's agreement for Blamathon to purchase the property. Blamathon did so at what was accepted to be market value. It was not the duty of Mr Winter to advise Mr Cooper as to what steps could be taken for him after his bankruptcy to participate in the profits of whatever development opportunity the property represented. 91There was no error by her Honour in finding that there was no breach of any duty of care that had arisen, outside the scope of the earlier retainers, in the giving of advice in the course of the disputed conversations. Ground 3 therefore fails.

[17]

Ground 4 - failure to find that there was a fiduciary obligation owed by the respondents to Mr Cooper in respect of the Bells Line of Road property 92As to Ground 4, the basis on which a fiduciary obligation was alleged to have arisen was by reference to the alleged solicitor/client retainer. 93It is submitted for Mr Cooper that her Honour limited her consideration of whether or not a fiduciary relationship existed to the discrete matters set out at [3] of her Honour's reasons and ignored the particular circumstances of the case, namely the "consistency" of the relationship between Mr Cooper and Mr Winter throughout the whole of the period from 1996 to 2004 (Orange 32J). The consistency of that relationship would be relevant to the existence of a fiduciary relationship only if it gave rise to a solicitor/client relationship outside the discrete retainers, or otherwise gave rise to a fiduciary duty. 94The consequence of her Honour's findings as to Mr Winter's retainer (at [107]) (Red 60) are that there was no subsisting general retainer at the time of the June 2002 conversation and that no retainer in respect of the Bells Line of Road property came into existence as a result of or after that June 2002 conversation. Nothing in the evidence of the ongoing relationship after that time, to which I have referred above, points to an error in her Honour's finding that there was no fiduciary duty owed by Mr Winter to Mr Cooper. 95Mr Boyd referred to Beach Petroleum NL v Kennedy [1999] NSWCA 408; (1999) 48 NSWLR 1 for the proposition that whether or not a fiduciary duty remains after the conclusion of a solicitor's retainer depends upon what the solicitor undertook, or was deemed to have undertaken, in the particular circumstances and on the instructions the solicitor received from the client. In Beach Petroleum (at [195]), the Court noted that the existence and scope of such a duty may be derived from a course of dealing and that a role that was limited when originally assumed, might, by reason of conduct in the performance of the role, be expanded so as to extend the duty. 96The subsistence of duties after termination of a solicitor's retainer was considered by Brereton J in Kallinicos v Hunt [2005] NSWSC 1181; (2005) 64 NSWLR 561 in the context of an application for the Court to restrain solicitors from acting in a particular case. At [63] his Honour referred to what was said in Holborow v Rudder [2002] WASC 265, as to the broad scope of the power to restrain a solicitor from acting in a matter (being said to be a matter of public policy to respect the solicitor's duty of loyalty to his or her former client). At [76], his Honour concluded that, after termination of the solicitor/client retainer, there is no continuing equitable or contractual duty of loyalty to a client and that the court's jurisdiction to restrain a solicitor from acting is not based on any conflict of duty or interest, but on the protection of the confidences of the former client unless there is no real risk of disclosure. 97There is nothing novel in the proposition that a solicitor, after termination or conclusion of a retainer, has an ongoing duty to preserve the confidentiality of confidential information disclosed by a former client and would be in a position of conflict if his or her duty to do so conflicted with a duty to another client on another matter. Here, however, it is difficult to see that any potential conflict of this kind arose. 98What is relied upon by Mr Boyd in this regard is the claim that Mr Cooper provided confidential information to Mr Winter as to his matrimonial difficulties and as to the proposed acquisition and development of the Bells Line of Road property (Orange 34K-M). 99The existence of marital problems, even if this amounted to confidential information at the relevant time and even if imparted in circumstances giving rise to an obligation of confidence, which is doubtful in the circumstances of the present case, is not a matter that can readily be seen as something that Mr Winter would have had a duty, when acting for Blamathon, to reveal. It seems irrelevant to any issue relating to the Bells Line of Road acquisition. Hence, it is by no means clear that there would have been any sensible possibility of a conflict of duty in this regard. 100Similarly, information, of the general kind Mr Cooper said was given to Mr Winter, as to the development prospects of the Bells Line of Road property, even if confidential, leads nowhere even on Mr Cooper's version of events. Mr Cooper cannot have wished the potential for development of the property to have been kept from Blamathon. Rather, he wanted Blamathon to buy the property and to carry out its development. He also had no difficulty with Mr Winter acting for Blamathon on the sale of the property, since it was he who introduced Mr Winter to Mrs Lockrey for that purpose. 101The giving by Mr Cooper of general information of the above kind would not impose any fiduciary duty on Mr Winter not to act for Blamathon on the acquisition of the Bells Line of Road property. Absent a subsisting solicitor/client retainer, I see no basis for a finding that Mr Winter owed a duty of confidentiality to Mr Cooper such as might have precluded him acting for Blamathon or Mrs Lockrey in relation to the Bells Line of Road property acquisition. 102Her Honour did not err in finding that there was no fiduciary duty owed to Mr Cooper as alleged in the pleading. Nor did Mr Cooper establish the basis for a finding that there was a fiduciary duty arising outside of the earlier discrete solicitor/client retainers. Ground 4 therefore fails.

[19]

Ground 6 - finding (at [65]) that Mrs Lockrey's instructions that she held her shares in Blamathon on trust for him and Mrs Cooper were incorrectly recorded by Mr Winter in the letter dated 19 September 2003 103The relevant finding by her Honour was at [118] (Red 63), in the context of her Honour's consideration of the issue of causation, was that even if the notation on the 19 September 203 letter truly represented Mrs Lockrey's instructions, this would not have been sufficient to create a trust of her shares in Blamathon in favour of Mr Cooper. Her Honour based this conclusion on the fact that thee was insufficient certainty as to the terms of any trust, including whether it was to be an express or discretionary trust. Challenge is made to this finding, and to the finding at [65] that Mr Winter had incorrectly recorded, in the 19 September 2003 letter, Mrs Lockrey's instructions. 104Reliance is placed by Mr Boyd on the evidence given by Mrs Lockrey in cross-examination, said to amount to an admission, that she held the shares in trust at that time (Black 166-168); Mr Winter's evidence in cross-examination that he believed that Mrs Lockrey's instructions were as set out in the last sentence of the letter (Black 111Q); and that Mr Winter did not give evidence that these instructions were incorrectly recorded by him and instead gave evidence that these instructions were correctly recorded (Black 110-111). It is submitted that there was no evidence supporting her Honour's finding (at [65]) (Red 48) as to the evidence given by Mrs Lockrey being a product of her fading memory or trust in Mr Winter. 105In cross-examination, Mr Winter accepted (at Black 110L-N) that what was in the 19 September 2003 letter was "as instructed by Mrs Lockrey" and confirmed (at Black 111P-R) that he wrote the letter on instructions from her. At Black 111Q, Mr Winter, in response to a question whether the last sentence of that letter was written on instructions from Mrs Lockrey, said "I believe those were her instructions at the time". There was then a further exchange (Black 111S-T): Q. And, so at least from September 2003, it was your belief on instructions from Mrs Lockrey that she held the shares in Blamathon in trust for Kevin Peter Cooper? A. At that instance in time, yes. September 2003. 106There appears to be a distinction between Mr Winter's answer at Black 111Q, where he seems to be speaking of a present belief as to what his instructions were back in September 2003, which might or might not in hindsight have been correct, and the answer at Black 111T, which is clearly giving evidence as to the belief he held as at September 2003. The distinction is of relevance in that it is only the first of those answers that would be inconsistent with a conclusion that Mr Winter accepted he had incorrectly recorded the instructions in the letter. However, the conclusion reached by her Honour went not to that issue but to whether, whatever Mr Winter considered then or now to be the position, he had in fact incorrectly recorded Mrs Lockrey's instructions. He could have done so, for example, under a mistaken belief as to what they had been. 107Further, the question at Black 111S misstates the content of the 19 September 2003 letter in that it refers only to a trust of the shares for Mr Cooper, whereas the letter itself refers to a trust for Mr and Mrs Cooper. Therefore, if what Mr Winter was there accepting was he had held a belief in September 2003 that Mrs Lockrey held the shares in Blamathon in trust solely for Mr Cooper, then that belief is one that would have been clearly inconsistent with the last sentence of the letter. Mr Winter, at Black 131H, explained that this was his expression of what he understood to be Mrs Lockrey's instructions but that he had since then found that he was incorrect in that assumption. Her Honour implicitly accepted that evidence in the finding at [65] (Red 49). 108As to Mrs Lockrey's evidence, from a review of the transcript she clearly had difficulty remembering various matters in relation to the documents that had been prepared and events surrounding them (e.g. at Black 166R-X). Her acceptance of the proposition that the shares were held in trust was solely based on the fact that her signature was on the 19 September 2003 letter "so it must happened". Mrs Lockrey did not, however, remember this; nor did she remember later changing her mind about whether or not the shares were held in trust. She did not understand the question put to her as to the purpose of the notation on the 19 September 2003 letter (Black 167S). Put in the context of those answers, Mrs Lockrey's acceptance at Black 167U of the proposition that it was her understanding that she did hold the shares in trust for Mr and Mrs Cooper seems to have been based solely on the fact that it had been pointed out to her that she had signed the document. Relevantly, Mrs Lockrey then went on (at Black 168B-K) to say the shares were held in trust but that "[t]hey would have been held in trust for Kim and the children" which detracts from the force of her earlier evidence. 109There were certainly documents prepared over the period from 2002 to 2004 that disclosed or suggested an intention by, or a proposal that, Mrs Lockrey transfer the Blamathon shares to Mrs Cooper to hold as trustee for the Cooper children. To the extent that Mr Cooper acknowledged this, and raised no objection thereto, it would be inconsistent with the maintenance of any claim that he was entitled to the whole of the beneficial interest in the shares. No such claim was asserted in the pleading in any event. 110At its highest, the 19 September 2003 letter might be taken as an admission by Mrs Lockrey as to the existence of a trust in respect of the Blamathon shares in favour of Mr and Mrs Cooper. It says nothing as to the time at which any such trust had come into existence and it is inconsistent with Mr Cooper having the sole beneficial interest in the shares. The finding by her Honour, in effect, that the statement in this letter would have been too uncertain to amount to a valid declaration of trust ([118]) (Red 63) has not been shown to be in error. If the statement in the 19 September 2003 letter went no further than a statement of intention that this be the case, much as the recital in the October 1997 agreement that Mrs Lockrey had purchased the Ross Street property seems to have been, then there could be little confidence that Mrs Lockrey would actually have created such a trust given the evidence as to her habitual changes in instructions (Black 111W; 118K). 111Whether Mr Cooper might have had a claim, as against Mrs Lockrey or the subsequent holder of the legal interest in the shares, to a beneficial interest in the shares, based on estoppel or otherwise, did not arise in the proceedings before her Honour. Mr Boyd, in effect, conceded in oral submissions that the finding challenged in Ground 5 probably made no difference to Mr Cooper's claim. I am not persuaded that there was error in the finding as to the beneficial interest in the Blamathon shares. 112Insofar as criticism is made of the acceptance by her Honour (at [65]) of Mr Winter's evidence that the 19 September 2003 letter incorrectly recorded his instructions, while I accept that the signing of the letter by Mrs Lockrey suggests that Mrs Lockrey did agree at the time with what was recorded in the letter, this leaves open the question as to what was meant by that statement in the letter. Her evidence, as referred to above, is not inconsistent with a finding that the letter had in fact incorrectly recorded the position. 113As to the characterisation by her Honour (at [65]) of Mrs Lockrey's evidence, namely as a reflection of her "fading memory", her Honour had the advantage that this Court did not have of observing Mrs Lockrey in the witness box and the manner in which questions were answered by her, an advantage not to be overlooked. It is by no means surprising that her Honour may have formed the view that Mrs Lockrey's recollection, in 2012, of a letter signed in 2003 might not be accurate. A review of the transcript of Mrs Lockrey's answers in the witness box (e.g. Black 162A-F; 163X-164B; 166A-E) shows a number of instances where Mrs Lockrey's was unable to recall things. As already noted, her acceptance of the proposition that the shares were held in trust seems to have rested on being shown the letter with her signature on it; not on any actual recollection (Black 166U cf Black 168B-D). This provides sufficient basis for the conclusion as to Mrs Lockrey's memory. 114As to the reference to the "trust" placed in Mr Winter, as Mr Curtin submits, there is a basis in the evidence before her Honour on which such trust could well have been inferred, namely, Mrs Lockrey's preparedness to appoint Mr Winter as the chairman (and subsequently a director) of her company and to nominate him as appointor under the Discretionary Trust Deed. 115Ground 6 is not made out.

[20]

Ground 7 - finding (at [95]) that it would be inconceivable that Mr Cooper would have placed trust in Mrs Lockrey to hold her Blamathon shares in trust for him 116Her Honour concluded (at [95]) (Red 57) that it would be inconceivable in January 2002 that Mr Cooper would have placed trust in Ms Lockrey to hold her Blamathon shares in trust for him so that he could have the full benefit of the Bells Line of Road development, by reference to the fact that on Mr Cooper's version of events Mrs Lockrey had already reneged on the earlier October 1997 agreement. Mr Boyd submits that this conclusion is inconsistent with the terms of the 19 September 2003 letter. 117Mr Cooper admitted (Black 37C; 37H) that as at late January 2002 he had formed the opinion that Mrs Lockrey could not be trusted by him to hold property on trust for him. He accepted (at Black 37J) that in his eyes Mrs Lockrey had proved herself untrustworthy about keeping her side of agreements with him and (at Black 37A) that she had basically reneged on the Ross Street property deal. 118The fact that Mr Cooper later signed the 19 September 2003 agreement recording certain instructions, among other things, in relation to the Blamathon shares is not inconsistent with her Honour's observation at [95] (Red 57). An obvious difference is that Mr Cooper on the later occasion was at least given a document purporting to record the "settlement". What her Honour was assessing at [95] was the credibility of Mr Cooper's version of the January 2002 conversation in circumstances where it required one to assume that Mr Cooper would have been prepared to place trust in someone who had already, on his version of events, shown that she might not be able to be trusted not to change her mind. The evidence given by Mr Cooper supports her Honour's conclusion. The subsequent letter of 19 September 2003 was after discussion of a potential settlement of the affairs between the parties. It does not detract from the force of the observation made by her Honour at [95] (Red 57). 119Ground 7 is not made out.

[22]

Ground 8 - finding (at [5]) that Mr Cooper only gave Mr Winter instructions as a director or employee of Blamathon (other than for the matters outlined at [3]) 120In relation to this issue, Mr Boyd places reliance on the non-production by Mr Winter of any documents recording the meetings or conversations in question or any advice given to Mr Cooper. Mr Winter was cross-examined as to whether there was a reason for the non-production of notes of any conference in relation to the October 1997 agreement (Black 125D), the discretionary trust deed (Black 125H), the deeds of indemnity (Black 125M), the 2003 Deed (Black 125Q) and the draft deed of arrangement (Black 126A). Mr Winter's evidence was, in general, that he sometimes was "too busy" to take notes (Black 125E; 125J). He made it clear that he had not been able to discover any such notes (Black 125T), even though it was ordinarily his practice to take notes of conferences such as the October 1997 conference (Black 125B). 121It was not suggested that there had been any deliberate concealment or destruction of records by Mr Winter such as might have given rise to a presumption that the contents of that evidence would have been entirely against him on this issue in accordance with the maxim omnia praesumuntur contra spoliatorem (Allen v Tobias [1958] HCA 13; (1958) 98 CLR 367; The Ophelia [1916] 2 AC 206). 122The fact that Mr Winter may have been "too busy" to take notes or may not have retained records of the matters on which he had received instructions from Mr Cooper on behalf of Blamathon does not make it more likely that he received any such instructions from him otherwise than in the capacity as employee or director of the company. Nor does it permit the drawing of an inference that Mr Winter was acting for all the parties, and not just Blamathon and Mrs Lockrey, as Mr Boyd submitted. Little can be made from the fact that no notes were produced in relation to the 2003 documents by Mr Winter. 123Her Honour's finding that Mr Cooper gave instructions to Mr Winter on the relevant matters only as a director or employee of Blamathon was open to be made having regard to the role Mr Cooper had admittedly played, during his bankruptcy, in relation to Blamathon (see [6A], [7] of the Amended Statement of Claim (Red 18); and assumption 22 of the assumptions that Mr Cooper's expert witness was instructed to assume (Blue 3K-O). This ground therefore fails.

[25]

Breaches of Duty 124It is contended by Mr Boyd that her Honour incorrectly rejected the expert evidence of Mr John Mann, a solicitor and Law Society accredited specialist in property law, wills and estate law and a member of the Law Society Professional Conduct Committee. Mr Mann prepared a report dated 6 May 2011 that was tendered and relied upon by Mr Cooper (Blue 12). Mr Mann's evidence was not challenged in cross-examination. Her Honour observed (at [8]) (Red 35) that his opinion stood or fell on whether the factual assumptions on which it was based were established. 125Mr Boyd's submission rests on the propositions that "most" of the assumptions relied upon by Mr Mann were established and that the only assumptions underpinning Mr Mann's report that were not made out were the assumptions based upon the conversations in January and June 2002 (Orange 33L; 33U). I disagree with both propositions. 126The assumptions Mr Mann was instructed to make were provided to him by Mr Cooper's solicitors and attached to his report (Blue 18-23). He concluded, based on those assumptions, (at [15]) (Blue 15G-Q) that there were clear conflict situations between Mrs Lockrey, Mrs Cooper, Mr Cooper, Blamathon and Mr Winter: including the conflict by Ron Winter in becoming a director of the company Blamathon and voting against the interests of a client at director's meetings. Further, Mr Winter drew documents and acted for all parties who had an interest in the document in circumstances where the document purports to deal with clear conflicts between the clients. In these circumstances, a reasonably competent solicitor would advise the clients that he would have to cease acting for all clients and advise them to seek independent advice. 127By way of example, Mr Mann referred to Mr Winter placing himself in a conflict situation when he dealt with the two Deeds of Indemnity between Mrs Lockrey and each of Mr Cooper and Blamathon and the 2003 Deed. Mr Mann went on to say: He also placed himself in a conflict situation when he accepted a position of director of Blamathon [on 17 June 2003]. In my view there is also a clear conflict situation created by voting against the interests of the plaintiff at the meeting [on 9 September 2004]. 128The conflicts thus identified by Mr Mann were: (i) a conflict between Mr Winter's personal interests and those of his firm, on the one hand, and his duty to Mr Cooper as a client, on the other hand, in accepting the position of director of Blamathon; (ii) a conflict between Mr Winter's personal interests, said by Mr Boyd in this context to be that of remaining as a director of the company, or his duty to Blamathon, on the one hand, and his duty to Mr Cooper as a client, on the other hand, in acting and/or voting against Mr Cooper's interests at directors' meetings on the two occasions on which resolutions to remove Mr Cooper as a director were passed; and (iii) a conflict between Mr Winter's duties to the other parties named in the particular documents identified by Mr Mann, for each of whom Mr Cooper contends Mr Winter was acting, on the one hand, and his duty to Mr Cooper as a client, on the other hand, in circumstances where it is said that all parties had an interest in the document and the document purported to deal with clear conflicts between the clients. 129Although at the start of [15] of his report Mr Mann identifies the first of the conflicts as becoming a director and voting against the interests of the client, the last two sentences of that paragraph express the opinion that Mr Winter was placed in a position of conflict simply in accepting the directorship in the first place. Mr Mann then identifies a further conflict in voting against the interests of Mr Cooper at directors' or shareholders' meetings. 130The documents referred to as examples of the conflict identified in (iii) above were the respective deeds of indemnity to which each of Mr Cooper and Blamathon was a party (Blue 197, Blue 242) and the 2003 Deed. None of those documents related directly to the Bells Line of Road acquisition nor did they relate directly or indirectly to the holding of that property in trust for Mr Cooper. Rather, the documents there identified by Mr Mann related to the provision of an indemnity to Mrs Lockrey in respect of liabilities she might incur under guarantees she had given, in respect of which she would have had rights of subrogation that would in general terms have provided her with the same or similar protection as the indemnity in any event, and the control of Blamathon, the shares of which and property held by it were, on Mr Cooper's case, already held on trust for him. 131Mr Mann concluded that Mr Winter had placed himself in a conflict situation by providing advice to Mr Cooper in June 2002 in relation to Blamathon where he clearly acted for both that company and Mr Cooper ([16]) (Blue 15Q-S) and that a lawyer exercising reasonable skill and care would have advised "all the clients" that their interests were in conflict with each other and that neither the lawyer nor the firm could continue to act for any of the clients ([17]) (Blue 15T-W). 132Mr Mann's conclusions (at [15]-[17] of his report) proceed on the implicit assumption that Mr Cooper was a client of Mr Winter at the relevant times, hence the opinion expressed at [17] that a lawyer exercising reasonable care and skill would have advised "all the clients [in the context, including Mr Cooper in that group] that their interests were in conflict with each other" (Blue 15T). The times identified by Mr Mann (at [15]) were November 2002, when Mr Winter chaired the meeting of Blamathon at which the resolution was passed to remove Mr Cooper as a director of the company; in June 2003, when Mr Winter himself became a director of Blamathon; in September 2004, when Mr Winter voted to remove Mr Cooper as a director, the latter having been reinstated in the interim; and in October 2002 and 2003, respectively, when Mr Winter drafted the indemnity documents and 2003 Deed referred to earlier. All of that conduct occurred after the acquisition by Blamathon of the Bells Line of Road property. Moreover, the appointment of Mr Winter as a director in September 2004 was with Mr Cooper's express consent, by reference to the 2003 Deed. 133The assumptions that Mr Mann was instructed to adopt (Blue 18-23) required him to assume that Mr Cooper had given particular instructions to Mr Winter at a January 2002 meeting (assumption [30]); that Mr Winter had advised Mr Cooper that "it would only take two weeks to change the ownership records over and that Kathleen Lockrey had to sign Blamathon's assets over to [Mr Cooper] as she held them in trust (assumption [31]); and that in mid June 2002, Mr Cooper sought advice from Mr Winter as to the most appropriate legal structure to effect the purchase of the Bells Line of Road property (assumption [35]). 134Therefore, whether as part of a subsisting solicitor/client retainer or a discrete retainer in January and/or June 2002, the assumptions on which Mr Mann based his opinion included that there was a solicitor/client relationship arising out of the relevant conversations. Once the critical assumption of such a relationship or retainer was not made out, the opinions expressed by Mr Mann as to breach of duty of care and breach of fiduciary duty cannot be sustained. With no disrespect to Mr Mann, her Honour properly rejected his evidence on that basis (at [109]) (Red 61). Mr Mann's opinions as to what a solicitor should do when acting for more than one party to a transaction have no relevance where the finding of her Honour was that Mr Winter was not acting for Mr Cooper in the relevant transactions. The primary judge was not bound to accept expert evidence, whether challenged or not (Davie v Lord Provost Magistrates and Councillors of the City of Edinburgh (1953) SC 34 at 39-40; as adopted by this Court in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 per Heydon JA, as his Honour then was, at [59] and Easter v Griffith (Supreme Court of New South Wales, Santow J, 17 June 1993, unreported) at p 41). 135Assumption [35], which is summarised above and which Mr Boyd conceded had not been established, was not the only of the assumptions not made out on her Honour's findings. For example, assumptions [37] and [38], which respectively related to advice given to Mr Winter to approach Blamathon's accountant for paperwork to transfer the Blamathon shares and to the giving of instructions by Mr Cooper to act on the purchase of the property and to proceed with the paperwork to have the shares transferred "back" to him, were not made out on her Honour's findings. 136Mr Boyd submitted that Mr Mann's opinion on the conflict situations was not reliant upon those findings. I disagree. Mr Mann's opinion, relevantly, was predicated on the solicitor/client relationship remaining or there being a subsisting fiduciary duty at end of that relationship. Once there was a finding that no such relationship or duty subsisted at the relevant time, as was the import of the finding by her Honour at [107] (Red 60), no weight can be placed on Mr Mann's opinion in the circumstances of the present case.

[26]

Causation 137Her Honour found that no negligent or misleading advice was given to Mr Cooper in the January/June 2002 conversations ([111]) (Red 61). There was no error in that finding. Mr Cooper was not in a position as an undischarged bankrupt to acquire the property in his own name or to adopt a role as director of any newly formed company to do so in his place. It was not incumbent on Mr Winter in the June 2002 conversation to postulate the scenario that Mr Cooper might later, on discharge of bankruptcy, have been able to do acquire the property. Such a possibility is implicit in the statement that he could not do so as a bankrupt and Mr Cooper's own evidence was that he wanted to move on the transaction quickly, i.e., before he was discharged from bankruptcy. 138Even if there had been a solicitor/client relationship, and fiduciary duties flowing therefrom, owed to Mr Cooper at the relevant time, and hence a duty to avoid conflicts of the kind identified by Mr Mann, there was no error in the conclusion that Mr Cooper did not establish that he had suffered the damage he claimed as a result of a breach of that duty. 139No loss has been shown to be suffered from the conduct in drafting deeds of indemnity to which Mr Cooper and Blamathon were respectively a party. Mr Cooper would have been subject to a claim by Mrs Lockrey in any event had she been called upon to honour a guarantee of obligations owed by him, as the deed of indemnity contemplates. Any complaint as to Mr Winter's position in drafting the deed between Mrs Lockrey and Blamathon is not one in which Mr Cooper has any relevant interest. 140As to Mr Winter's acceptance of a position as director of the company, Mr Cooper expressly consented to this. There was disclosure in the 2003 Deed as to the basis on which Mr Winter was to be entitled to charge professional fees for so doing. The 2003 Deed makes unsustainable the allegation that Mr Winter, simply by accepting appointment as a director of Blamathon and he, and his firm, having an interest in charging fees for so doing, was in breach of a fiduciary duty to Mr Cooper, even assuming such a duty was owed. 141As to the two occasions on which Mr Cooper was removed as a director, on the first occasion it is difficult to see what Mr Winter can be said to have done to facilitate this other than to fulfil the function of chairing the meeting. There is nothing to demonstrate that, had Mr Winter not chaired the meeting, Mr Cooper would not have been removed as a director. There is no suggestion that Mr Winter voted, or was entitled to vote, at the meeting. Nor is it obvious that Mr Winter stood to benefit in any way from this change in directorship. As to the second occasion, in September 2004, it is by no means clear that this involved any conflict of interest at all, given that Mr Cooper had consented to the appointment and might therefore be said to have recognised that Mr Winter would have an obligation to act in that role in accordance with the best interests of the company even if those interests conflicted with Mr Cooper's own interests. Mrs Lockrey made clear in her evidence that she wanted to remove Mr Cooper as a director in September 2004. She said that Mr Cooper was not doing his job properly and that "...I took the company back over again" (Black 170F). Mr Winter ceased to act as a director in November 2004, consistent with this being Mrs Lockrey's decision, as majority shareholder, to regain control of the company in circumstances where Mr and Mrs Cooper could not agree as to the course the company should follow. 142As to the drafting of the other document identified by Mr Mann (the 2003 Deed), this had nothing to do with the claims by Mr Cooper, allegedly arising out of the January and June 2002 conversations, to an interest in the Bells Line of Road property.

[27]

Loss 143I agree with the primary judge that it is difficult to see that any damage has flowed from the alleged breach of fiduciary duty in drafting the various documents or in accepting appointment and voting as a director of the company. As noted earlier, Mr Boyd confirmed in oral argument on the appeal (at AT 3.30-33) that the damages sought for breach of fiduciary duty related to the loss of the benefit of the Bells Line of Road property or the opportunity to profit from the proceeds of sale. 144Mr Cooper consented to the sale of the Bells Line of Road property well before he was removed as a director of the company. It is by no means clear what profit, if any, there was from that sale after discharge of the finance facility but Mr Cooper's removal as a director was not shown to have affected his ability to enforce any claim to the Blamathon shares, and through them to any ultimate share of the profits of the sale. 145It is submitted by Mr Boyd that her Honour ignored the obligation of Mr Winter to cease to act for all parties once a conflict situation arose (Orange 34N; AT 17.19-25). It is submitted that, had Mr Winter done so, this would have led to the consequence that Mr Cooper would have received independent legal advice "at an early stage" with the opportunity of putting in place an instrument that would have protected his rights (Orange 34P). It is contended that, instead, Mr Cooper relied upon various documents drawn by Mr Winter which were "not followed through" (Orange 34Q; AT 3.13-15). Reliance is placed by Mr Boyd on the recognition by McColl JA in McCrohon v Harith [2010] NSWCA 67 at [97], that where a breach of contract deprives a party to the contract of a chance, the loss of that chance is compensable, notwithstanding that, on the balance of probabilities, it is more likely than not that the plaintiff would not have turned the chance into reality (her Honour there citing Sellars (at 349) per Mason CJ, Dawson, Toohey and Gaudron JJ). 146Mr Curtin, in response, submits that there was no case put before her Honour to the effect that Mr Cooper would have sought independent advice and no evidence as to what any such advice would have been (Red 47C-E). 147The submission that Mr Cooper lost the opportunity to obtain independent advice because of a failure on the part of Mr Winter to advise him to do so requires focus on the stage at which Mr Mann identified the relevant conflicts as arising. 148Mr Boyd's submission is that, had Mr Cooper been properly advised, then there would have been an effective instrument to protect his "interests" and that Mr Cooper was therefore deprived of a chance to acquire the shares of Blamathon and to obtain a benefit from the development of the Bells Line of Road property or from the sale of the Bells Line of Road property. However, there is no basis for concluding that had Mr Cooper obtained independent advice at any of the times identified by Mr Mann, those being October 2002 when the deeds of indemnity were prepared and some time in 2003 when the 2003 Deed was drafted, the result would have been that a validly constituted trust over the Bells Line of Road property would have been established. At that stage, the parties were contemplating arrangements by which Mrs Lockrey would relinquish control of Blamathon. There is no basis for an assumption that Mrs Lockrey would instead have caused Blamathon to declare a trust in relation to the property. Nor is there any basis for assuming that the intervention of another solicitor would have led to Mrs Lockrey taking steps properly to declare a trust over the Blamathon shares solely in Mr Cooper's favour, since her position seems relatively consistently to have been that the Cooper children were to be the beneficiaries of any trust of the shares. 149The highest Mr Cooper's case reaches is that at one point, September 2003, Mrs Lockrey signed a letter in terms agreeing with the proposition that her shares in Blamathon were held in trust for Mr and Mrs Cooper. Mr Curtin points to the unchallenged factual findings that Mrs Lockrey would not have declared such a trust (referring to the judgment at [95] and [117] - [118]) (Red 57; 63; Orange 47P-R). 150As to her Honour's finding that no loss was caused because Mr Cooper could not have acquired the Bells Line of Road property anyway, Mr Boyd referred to the approval of the refinancing application made on behalf of Blamathon and scheduled for settlement on 19 September 2003, as support for the proposition that Mr Cooper would have been able to acquire the property after his discharge from bankruptcy (Blue 283-297; 307-314). However, the applicant for that refinance was Blamathon. Mr and Mrs Cooper were identified as guarantors. The security for the loan was identified as the Bells Line of Road property and two properties at Windsor. Mr Boyd submitted that the latter two properties were ones in which Mr and Mrs Cooper lived and in which Mr Cooper had an interest pursuant to the October 1997 agreement (Orange 34V). However, Mr Cooper obtained no interest in any of the properties the subject of the Ross Street development under the 1997 agreement and it is not clear how Mr Cooper, as a then bankrupt, would have been in a position to offer as security any properties in which he might previously have had an interest. Mr Cooper's statement of affairs in his bankruptcy did not disclose any interest in the named properties (see ITSA report Blue 76-81). 151As at August 2002, Mr Cooper was an undischarged bankrupt. There is nothing from which to presume that Mr Cooper could, on or shortly after discharge of bankruptcy, have purchased the Bells Line of Road property in his own name, with only that property as security. In the absence of a legal or equitable interest established in the other properties put forward as security for the Blamathon refinance, it could not be assumed that Mr Cooper would have had the ability in 2002 to put those forward as security for a borrowing in his own name. Any suggestion that Mr Cooper might have been prepared to wait until a later date to acquire the property is inconsistent with his statement to Mr Winter that he wanted to move quickly on the transaction. 152Having regard to the above, her Honour did not err in the findings made as to breach of duty, causation and loss. Grounds 9-10 have not been established.

[28]

Ground 11 - failing adequately to consider the evidence and arguments bearing upon the issues of retainer, duty of care, fiduciary duty, breach of duty, causation and damage, and to give adequate reasons for decision on those issues 153Mr Boyd did not identify any particular findings in respect of which her Honour's consideration of the evidence was said to be inadequate or where her Honour's reasons were said to be inadequate, other than insofar as the earlier grounds of appeal made reference to particular findings. In essence, the complaint seems to have been that her Honour did not accept Mr Cooper's case as to the existence of the retainer and breach of the duties that it is said would have flowed from such a retainer. 154Much weight was placed by Mr Boyd on the reference in the 19 September 2003 letter to a trust in favour of Mr and Mrs Cooper in respect of the shares which Mrs Lockrey held in Blamathon. Such a statement is inconsistent with the existence of a then existing trust in favour of Mr Cooper as the sole beneficiary of those shares of the kind Mr Cooper contended had, or was to have, arisen out of the conversations or events in 2002 relating to the purchase of the Bells Line of Road property. On one version of the case put for Mr Cooper at the hearing, the beneficial interest in the Blamathon shares already reposed in him as at September 2003. If so, it would not have been open to Mrs Lockrey unilaterally at that time to vary the trust pursuant to which she held those shares. 155As to the complaint based on the adequacy of reasons, in Mifsud v Campbell (1991) 21 NSWLR 725, Samuels JA said (at p 728): ... It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case. Accordingly, a failure to refer to some of the evidence does not necessarily, whenever it occurs, indicate that the judge has failed to discharge the duty which rests upon him or her. 156In the present case, her Honour set out in detail the factual background to the dispute, the relevant issues and applicable law, and her reasons for the decisions reached. Her Honour's view as to the reliability of Mr Cooper's evidence, and her preference for the evidence of Mr Winter in relation to the January and June 2002 conversations, were explained by reference to inconsistencies in the various versions of Mr Cooper's evidence and inconsistencies with contemporaneous documents ([96]) (Red 58). No error has been shown in that regard. I am not persuaded that her Honour erred as contended in Ground 11.

Cooper v Winter

At a glance

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Judgment (30 paragraphs)

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Cases Cited (15)

Cited By (10)