Darvall McCutcheon (a firm) v HK Frost Holdings P/L

2. I have had the advantage of reading in draft form the reasons for judgment which Chernov, J.A. proposes to hand down in this matter. I agree in those reasons and in the orders which he proposes. Having also had the benefit of reading in advance the reasons for judgment which Callaway, J.A. proposes to give, I agree that I would not ordinarily place such emphasis on the identity of the judge who was likely to hear the case if it had been remitted, but I agree the present case is unusual in the sense described by Chernov, J.A.

7. I have had the considerable advantage of reading in draft the reasons for judgment prepared by Chernov, J.A. I agree in them and in the disposition of the appeal that his Honour proposes. The precise form of the orders may require consideration in the light of the Federal Courts (State Jurisdiction) Act 1999.

10. There are, however, two caveats that I would enter. First, in the circumstances of this case it was appropriate to take account of the high probability that the matter would have been remitted to O'Bryan, J. In other cases that might not be so. In particular I doubt that it would be right to award damages for the lost benefit of idiosyncratic views, even with a discount for the concomitant prospects of a successful appeal. Secondly, had the matter been res integra, I might have approached the question of the Bank's costs[1] on a different basis. Had there been no negligence, there would have been an order with respect to the costs of two hearings at first instance, as opposed to apportioning the costs of the only hearing that took place. The appellant's negligence also saved the respondent from incurring that proportion of the costs of the second hearing that could not have been recovered from the Bank.

16. This is an appeal against the decision of Finn, J. of the Federal Court of Australia made on 16 June 1999 whereby his Honour ordered that the appellant (which is the respondent's former firm of solicitors) pay the respondent $91,060 damages for breach of its retainer and negligence in relation to the conduct of the respondent's case against the ANZ Bank Group Ltd. ("the Bank") in 1988.

19. In order to understand more readily the issues that are involved in this application and the competing arguments of the parties, it is necessary to give a brief account of the somewhat complex and lengthy events that led to the matter coming to this Court. Much of this summary, which is set out below, is taken from his Honour's succinct but full description of the circumstances leading to the litigation before him.

23. In early 1986, the respondent's beneficial owner and effective mind, Herbert Keith Frost ("Mr. Frost"), who had worked in the printing industry, conceived an idea to commemorate Australia's bicentenary in 1988. As his Honour said, the project was a composite of two parts. The first part involved the creation of a permanent collection of twelve paintings by Australian artists depicting historical Australian events of bicentennial interest. The collection was to be known as "the Australian Bicentennial Art Collection." It would be exhibited at various places in Australia during the bicentenary celebrations and thereafter the paintings would be donated to the Australian National Gallery. This aspect of the project was to be sponsored by a major Australian company which would derive commercial benefits from its relationship with the collection. The second and complementary part of the project was the printing of specially designed commemorative calendars, each to be known as the "Bicentennial Commemorative Calendar", that reproduced the paintings of the collection. It was part of the scheme that Mr. Frost, through the respondent, would procure the printing of the calendars and sell them to the sponsoring company which would on-sell them to its customers and/or to the public generally, thereby making the project self-funding so far as the company was concerned. At the same time, the respondent would make a profit from the production of the calendars and from their sale to the company. It was also proposed that the art collection would be endorsed by the Australian Bicentennial Authority ("the ABA").

26. In February 1986 Mr. Frost put his proposal to the Bank in Adelaide with a view to it sponsoring the project. After some negotiations the Bank's board approved the project on 17 March 1986, but on the condition that certain aspects of it were varied. Part of the change that was required by the Bank was that four of the paintings would come from its collection and that, at the conclusion of the bicentennial celebrations, the Bank would retain its four paintings and the commissioned artwork would be donated to the respective State and Territory art galleries and not to the Australian National Gallery. The changes were apparently acceptable to the respondent, because Mr. Frost proceeded, with the Bank's knowledge, to develop the calendar concept, its format and costings and continued with its application for ABA endorsement. In August 1986 the Bank advised Mr. Frost that it no longer desired to go ahead with his proposal. In the same month, without reference to Mr. Frost, it announced the creation of the "ANZ Bicentennial Collection" which would consist of eight commissioned paintings and four others from its own collection. It is plain, however, that the Bank must have been planning to produce its own bicentennial art collection well before August 1986 while, to its knowledge, the respondent was working hard to make the project a success. In its letter dated 7 August 1986, the Bank informed Mr. Frost of its intention to withdraw from the project, and said, inter alia, that it did not wish to go ahead with the calendar, because it had been advised that it was not viable "for us". It is convenient to mention at this point that, as Finn, J. noted, no evidence was called by the Bank at any of the relevant proceedings to support the claim that the calendar was not a viable proposition for it. Moreover, there was no suggestion at that time from the Bank that the calendar aspect of the project was not viable for another, similar, institution which might replace the Bank as the proposed sponsor. After the Bank's withdrawal from the project, the respondent attempted to induce others to support what was then necessarily a variant of the original concept that emphasised the calendar. Not surprisingly, given the Bank's launch of its own bicentennial art collection, those endeavours came to nothing.

30. On 5 June 1987 the appellant, as solicitor for the respondent, filed a proceeding in the Supreme Court of Victoria against the Bank. In that action, the respondent claimed damages for breach of contract and breach of confidence. The plaintiff particularised the damages in respect of the breach of contract claim - being the profits it alleged that it had lost by reason of the Bank's wrongful repudiation of the contract - but it provided no such information in respect of the breach of confidence allegation. Later, however, at or shortly before the commencement of the trial, the respondent provided a new set of particulars of damages which it claimed were referable to the damages claimed in both causes of action. Such damages, amounting to a little over $190,000, were computed on the basis of the profits that the respondent claimed it would have made from the sale of the calendars to the Bank.

33. The matter went to trial before O'Bryan, J. and the respondent's counsel**,** Dr. Jessup Q.C., led evidence in support of both claims. So far as is relevant, the Bank led evidence only on the damages issue, more specifically, in respect of the respondent's costings which related to the production of the calendars. At the close of the evidence, Mr. Strahan, senior counsel for the Bank, addressed first and did so in respect of both claims. In respect of the breach of confidence claim, Mr. Strahan conceded that the idea was imparted to the Bank in confidence, but argued that the concept of a corporate art collection of itself was not in any way novel or unique, but was "common place" and thus, was not capable of being protected by equity. Moreover, he contended that the Bank did not relevantly misuse the information because its collection was based not on the respondent's initial idea, but on the changes that were introduced by the Bank. Mr. Strahan also submitted that there was no basis on which the court could award any damages to the respondent because of its failure to particularise them and to lead any evidence pertaining to the losses flowing from the breach of confidence.

36. Dr. Jessup then made his final submissions, dealing first with the breach of contract claim. When he turned to the breach of confidence action, O'Bryan, J. said that he doubted whether he would need to deal with the "alternative claim" and that the claim for damages for breach of contract absorbed everything in the "alternative claim". Dr. Jessup responded:

"It is only if that were unsuccessful that we would be seeking damages for breach of confidential information... Shall I sit down your Honour?"

42. O'Bryan, J. found against the Bank on the breach of contract claim. As to the breach of confidence claim, his Honour concluded his reasons for judgment with the following observations:

"I find it unnecessary to deal with the breach of confidence claim beyond saying I am disposed to hold that the concept communicated to the defendant, in February, in confidence, was sufficiently developed to be capable of being the subject of protection in court. In my opinion, the defendant did use the plaintiff's concept for a Bicentennial art collection for its own commercial gain and in doing so deprived the plaintiff of the chance of profit which would have been produced from the second element of the concept. The defendant did not deal fairly with the plaintiff inasmuch as it took and used the plaintiff's ideas without its authority or recompense."

It is relevant to note that during discussions with Mr. Strahan in the course of his final submissions, his Honour had observed that any damages for breach of confidence may be less than any damages for breach of contract.

47. The learned judge pronounced judgment for the plaintiff in the sum of $91,060. As Finn, J. noted in his reasons, the judgment in favour of the respondent was not made in consequence of a determination of the breach of confidence claim.

51. The Bank appealed from that judgment to the Full Court. In its amended notice of appeal, it challenged the findings of O'Bryan, J. as to the existence of a contract between it and the respondent and that it had breached such contract. In addition, under cover of ground 7, the Bank asserted that his Honour's views in relation to the breach of confidence claim, albeit expressed tentatively, were wrong. It further asserted under cover of that ground that, in any event, the respondent had abandoned that claim.

54. On the advice of Dr. Jessup, the respondent filed a notice of cross-appeal (which was not pursued at the hearing) against the sum awarded by way of damages. Dr. Jessup later became unavailable to conduct the appeal and Mr. Hayne Q.C. (as his Honour then was) with Mr. Vickery were retained by the respondent. Mr. Hayne entered into settlement discussions with Mr. Finkelstein Q.C. (as his Honour then was) who was briefed by the Bank on the appeal, but nothing came of those negotiations (to which I will again refer later). In due course, Mr. Hayne had to return his brief and several days before the hearing, Mr. Bongiorno Q.C. (as his Honour then was) was briefed to appear for the respondent. He also led Mr. Vickery.

57. The Bank's appeal was heard by the Full Court[2] on 20 and 24 October 1988. As was (and is) customary, no transcript was made of counsel's arguments on the appeal, but there was put in evidence before Finn, J. a copy of Mr. Finkelstein's outline of submissions. So far as is relevant, although the written submissions made reference to ground 7, there was no argument put in relation to the breach of confidence claim.

60. Although I will deal with the matter more fully later, it is appropriate at this stage to mention that on the day after the completion of the Full Court hearing, Mr. Bongiorno and Mr. Vickery sent a memorandum to Mr. Resch (who has since died, but who was then a member of the appellant firm and was, in effect, the respondent's solicitor in relation to the litigation) as to what were the respondent's remaining rights, if any, against the Bank and what steps it might take to obtain a settlement. The memorandum was written on the basis that the Bank would succeed in the appeal and in it counsel advised that the respondent might have a claim against the Bank in quantum meruit.

63. The assumption of the respondent's counsel as to the outcome of the appeal turned out to be justified because, on 7 November 1988, the Full Court allowed the appeal, set aside the judgment of O'Bryan, J. and ordered that there be judgment for the Bank with costs. The Full Court concluded that the parties had not reached agreement upon the essential terms relating to the calendar and, therefore, no contract for the sale of goods had been entered into. Upon judgment being handed down, Mr. Vickery, who had been briefed for the respondent, sought and obtained from their Honours an indemnity certificate pursuant to s.13 of the Appeal Costs Act 1964. But, as Finn, J. found, on handing down the judgment, no reference was made by counsel or by the Full Court to the breach of confidence claim which, as I have said, had not been canvassed on the appeal, nor had any attempt been made on the giving of the judgment to have that unresolved claim remitted to the judge for further consideration.

66. The judgment of the Full Court was eventually entered on 24 July 1989. Thus, as Finn, J. observed in his reasons, the effect of the orders of the Full Court was that the respondent's breach of confidence claim ceased to exist, as it had merged in the judgment in favour of the Bank.

70. Mr. Frost was dissatisfied with the outcome of the appeal and in the way it had been conducted by counsel. Shortly after the decision of the Full Court, he entered into negotiations with the Bank with the view to settling the matter and conferred with Dr. Jessup about the possibility of seeking special leave to appeal to the High Court, but nothing came of these initiatives.

73. In early 1990 the Bank proceeded with the taxation of its costs. In about May 1990, Mr. Frost consulted Mr. Goldberg, a solicitor in Adelaide, about the respondent's rights against the Bank, including the undetermined breach of confidence claim. He was advised that the Full Court should have been asked to remit this claim to O'Bryan, J. and that it might be too late to prosecute it. Armed with that advice, Mr. Frost effectively sought advice from Mr. Resch as to whether he agreed that the breach of confidence claim should have been referred back to O'Bryan, J. at the time of the handing down of the reasons for judgment by the Full Court and, if so, whether an order should be obtained staying the execution of the costs order in the Bank's favour and either applying to have the claim remitted to O'Bryan, J. or issuing a fresh proceeding against the Bank for breach of confidence and quantum meruit. On 18 May 1990, Mr. Resch wrote a letter to Mr. Bongiorno relating to Mr. Frost's proposal which he copied to Mr. Vickery. It was clear to Mr. Resch that if the Bank proceeded to enforce the order for costs, the respondent would have to go into liquidation.

76. Finn, J. concluded that it was unlikely that Mr. Bongiorno ever received the letter, but Mr. Resch's file note of 23 May 1990 indicated that he spoke about the matter to Mr. Vickery. It is sufficient to note that, in substance, Mr. Vickery advised that, in light of the Full Court judgment, the respondent's breach of confidence claim was no longer extant. Finn, J. found that, on 28 May 1990, Mr. Resch advised Mr. Frost of Mr. Vickery's opinion and admitted to him that the respondent had a claim in negligence against his firm for the loss of breach of confidence claim and that he should seek independent advice about the respondent's rights against the appellant.

79. On 29 May 1990, the Bank's bill of costs was taxed out at $49,820 (in respect of the trial and the appeal). Of that sum, $26,768.29 was attributable to its costs of the trial.

82. On 31 May 1990, Mr. Goldberg advised Mr. Frost that Mr. Resch had told him of his advice of 28 May. In the result, a new firm of Melbourne solicitors - McKean and Park - was engaged by the respondent (through Mr. Goldberg) and advice was sought from Mr. Hansen Q.C. (as his Honour then was) on a number of issues. So far as is relevant for immediate purposes, Mr. Hansen advised that further facts were needed before advice could be given as to whether the respondent had a claim of negligence against the appellant.

85. On 20 December 1990, a petition to wind up the respondent was presented by the Bank, based on its failure to satisfy a notice of demand for its taxed costs. On 16 January 1991, the respondent commenced a proceeding in the County Court of Victoria for a quantum meruit claim of $52,227. On 13 May 1991 a judge of the Supreme Court of South Australia ordered that the respondent be wound up and on 17 October 1991 a judge of the County Court ordered that the respondent's quantum meruit action be stayed, primarily on Anshun grounds. Mr. Resch died in 1993.

89. On 4 November 1994, the respondent instituted the present proceeding in the Supreme Court of Victoria claiming damages from the appellant for negligence and breach of retainer in respect of the loss of the breach of confidence claim. The action was commenced three days before the expiration of six years from the day on which the Full Court had pronounced its decision in the Bank appeal. In the circumstances, the respondent relied upon such acts of alleged negligence and breach of retainer by the appellant as occurred on or after 4 November 1988. It was asserted, in essence, that the solicitors' breaches of retainer and duty consisted of their failure to take any steps to seek an order from the Full Court to remit the breach of confidence claim to O'Bryan, J. or to another trial judge or to have the claim determined by the Full Court itself. The respondent claimed that its loss from such breaches was the loss of the opportunity of successfully pursuing its breach of confidence claim against the Bank. More specifically, the damages claimed by the respondent were:

(a) the sum of $128,576 (which was the amount awarded to the respondent by O'Bryan, J. for loss of profits pursuant to the breach of contract claim);

(b) a sum reflecting the respondent's liability for the Bank's costs at trial in so far as they related to the breach of confidence claim;

(c) one half of the amount it paid to the appellant for its fees that were charged by it to the respondent in respect of the Bank litigation that were attributable to the breach of confidence claim (which, it was claimed, were wasted);

(d) other expenses incurred by the respondent after the Bank litigation by way of "salvage" attempts and resisting the winding up proceeding.

The solicitors denied any wrongdoing as was alleged by the respondent and contended that, in acting as they did in respect of the breach of confidence claim, they relied, as they were entitled to do, on the advice of counsel.

Transfer to Federal Court

95. The proceeding was transferred from the Supreme Court of Victoria to the Federal Court of Australia on 19 May 1998 pursuant to the provisions of the Jurisdiction of Courts (Cross-vesting) Act 1987, primarily because it was anticipated that the respondent's former counsel would be called as witnesses. In order to avoid any possible embarrassment in that regard, the matter was transferred to the Federal Court and, eventually, came on for hearing before Finn, J. As events turned out, of the counsel who acted for the respondent in relation to the Bank litigation, only Messrs. Bongiorno and Vickery gave evidence in this proceeding.

99. So far as is relevant for present purposes, Finn, J. found that the appellant never advised the respondent that it was, or might have been, open to it to apply to the Full Court for an order remitting the breach of confidence claim to the trial judge and that, had such advice been given, the respondent would have instructed the appellant to apply for such an order. These findings were not challenged before us. His Honour further found that, in failing to make such an application, the appellant was negligent and had breached its retainer. In particular, Finn, J. considered that, between the judgment of O'Bryan, J. and the entry of the Full Court judgment, the solicitor did not address his or counsel's mind to the breach of confidence action and, as I have said, gave no advice to Mr. Frost in relation to it. His Honour further considered that, had an application been made to the Full Court after it handed down its reasons for judgment (but before the judgment was entered) for orders that the breach of confidence claim and the question of costs be remitted to the trial judge, on the balance of probabilities the Full Court would have made such orders. In the circumstances, however, the breach of confidence cause of action merged in the judgment of the Full Court (which, as I have said, was in favour of the Bank) and was thus lost to the respondent. Consequently, Finn, J. held that, as a result of the appellant's negligence and the breach of the retainer after 4 November 1998, the respondent lost an opportunity (or chance) which was of real value to pursue the breach of confidence claim. His Honour assessed the value of that loss of opportunity and associated damages at $91,060.

103. At the outset of the hearing of the appeal, the Court raised with both counsel the question whether the appeal had been validly instituted given, inter alia, the High Court decision in Re Wakim; ex parte McNally[3], the provisions of the Federal Courts (State Jurisdiction) Act 1999 (Vic.) ("the Act") and subsequent authorities on this issue. It was accepted by counsel that, having regard to Residual Assco v. Spalvins[4] and Re Macks[5] and the operation of ss.6 and 7 of the Act, the appeal was properly before this Court. They said that both parties wished this Court to hear the appeal. In the circumstances, we proceeded to hear argument.

107. A plaintiff, who claims damages on the basis that the defendant's negligence or breach of retainer caused it to lose a valuable opportunity to undertake a particular course of action, must establish, on the balance of probabilities, that the defendant's negligence caused the loss of that opportunity and that the opportunity was real as distinct from being fanciful (or, put another way, that the opportunity had some value, not being a negligible value). Once the plaintiff establishes these matters to the required standard, the value or extent of that loss is to be ascertained by reference to the degrees of probabilities and possibilities - see Sellars v. Adelaide Petroleum NL[6]; Price Higgins & Fidge v. Drysdale[7].

110. In the context of this case, therefore, the respondent was required to establish before Finn, J.:

(a) that the appellant was negligent or breached its retainer in allowing the breach of confidence claim to be lost (and that but for the appellant's negligence the application would have been pursued);

(b) that the Full Court would probably have remitted the claim to a trial judge;

(c) that the opportunity had some value;

(d) what was the value of the loss of the opportunity by reference to degrees of probabilities and possibilities.

Appellant's negligence

116. The appellant challenges his Honour's findings that it was negligent and breached its retainer, but in my view, assuming the breach of confidence claim had value, the appellant was clearly negligent and breached its retainer in the manner in which it allowed the claim to be lost to the respondent. The wrongful conduct of the appellant resulted in the respondent being deprived of the opportunity to have the breach of confidence claim (and the question of trial costs) remitted to a trial judge - probably O'Bryan, J. - for determination. It was accepted that the respondent was not advised by the appellant that it could apply to the Full Court to have the claim remitted to the trial judge. It is also obvious that, had such advice been tendered, the respondent would have given instructions to proceed with such an application. As his Honour concluded, the breach of confidence cause of action was not present to the respective minds of counsel and the solicitors at the relevant time. So far as counsel were concerned, they did not turn their minds to the breach of confidence claim principally because they were not asked to do so by the appellant and, in the case of Mr. Bongiorno and Mr. Vickery, because they also believed that it had been abandoned. It is clear that the appellant did not, but should have, adverted to the breach of confidence claim before the Full Court's judgment was entered. Indeed, the appellant held itself out as a firm which was competent in the relevant areas of the law, including trial and appellate work and, as his Honour said, should have taken all reasonable steps to preserve to the appellant the opportunity to prosecute its undetermined claim. Failure to do so amounted to negligence and breach of retainer on its part. In the circumstances, it is not surprising that, as his Honour found, Mr. Resch admitted to Mr. Frost on 28 May 1990 that the firm was negligent in this respect. Although this finding was challenged, for the reasons I give later, his Honour was well entitled to make the finding that he did.

119. Mr. Robson Q.C., who appeared before us with Mr. Currao for the appellant, relied on authorities such as Francis v. Francis & Dickerson[8] and Davy-Chiesman v. Davy-Chiesman[9] to contend that, since the solicitors acted as they did in reasonable reliance on counsel's advice in circumstances where counsel had been properly instructed, they could not be held to have been negligent or in breach of their retainer by failing to seek to have the matter remitted by the Full Court. In particular, Mr. Robson relied on the following passage from the judgment of Kirby, J. in Boland v. Yates Property Corp. Pty. Ltd.[10] in which his Honour said[11]:

"The proper analysis of the duty of care owed by a solicitor, other than in respect of in-court advocacy, is to be found not in any immunity secured by analogy, inference or suggested necessity from the immunity enjoyed by a barrister-advocate retained by the solicitor. It rests instead upon general principles governing the liability of a solicitor, operating in a divided legal profession, where he or she has retained a barrister to provide advice and, if it proves necessary, for the barrister to conduct any proceedings in court that may ensue. In such a case the solicitor will, in general, be entitled to act in accordance with instructions given by the client on the basis of the barrister's advice, so long as the solicitor has taken care to retain a barrister of competence with the skill necessary to advise and represent the client in the field of legal practice in question and has properly and competently instructed the barrister to the best of the solicitor's care, skill and ability. Ordinarily in a divided legal profession it is responsible conduct for a solicitor (particularly if he or she has no disclosed specialist experience in a field of legal practice) to rely upon a competent barrister's advice. Doing so makes proper use of the specialised Bar. However, the solicitor must not accept the barrister's advice blindly. He or she retains a legal duty to the client, separate independent and personal, both by reason of the general law of negligence and the contract of retainer. The solicitor must exercise independent judgment to the extent that it is reasonable to demand this having regard to the solicitor's reputed knowledge and experience, the complexity of the case and the skill and experience of the barrister who has been retained. If the solicitor reasonably considers that the barrister's advice is obviously wrong, it is the solicitor's duty to reject that advice and to advise the client independently, including as to the wisdom of retaining a fresh barrister. In a divided profession, the immunity enjoyed by an advocate does not automatically extend to a non-advocate solicitor. The answer which such a solicitor, who has retained a barrister may give to a client's later allegation of negligence is not that the solicitor is immune from suit. It is that, although liable to suit, the solicitor is not negligent because reliance on the advice of the barrister was proper and reasonable in the circumstances and no occasion arose for that advice to be rejected."

123. But it seems clear on the evidence that none of the counsel briefed by the appellant advised that the undetermined claim should not be prosecuted. It was common ground that no such advice was given in terms. Mr. Robson's argument was that such advice was implicit in what counsel said and what they did not say in their several advices. Mr. Robson said that the appellant sought advice from counsel as to the respondent's rights against the Bank in the context where it was assumed that the appeal by the Bank against the decision of O'Bryan, J. would succeed or when that fact became known. Since no counsel advised that the breach of confidence claim should be pursued, said Mr. Robson, the necessary inference was that counsel were of the view, and inferentially advised, that the breach of confidence claim had no prospect of success and was not worth pursuing. It was in that context, it was said, that the solicitors took no steps to obtain a remitter of the breach of confidence claim and, in the circumstances, they could not be properly regarded as having wrongly failed to pursue the claim.

126. More particularly, Mr. Robson pointed to the fact that, after the Full Court decision, Dr. Jessup advised concerning the respondent's rights against the Bank, yet he did not suggest that the undetermined claim should be pursued. But the evidence shows that Dr. Jessup was consulted about the prospect of obtaining special leave to appeal to the High Court against the judgment of the Full Court (which related wholly to the respondent's contractual claim) and not about the breach of confidence claim. There is no suggestion in the material that Dr. Jessup was asked to give advice on the breach of confidence claim. Moreover, as Mr. Porter, who appeared for the respondent, pointed out, Mr. Frost was cross-examined before Finn, J. on the bill of costs that showed that advice was obtained by the respondent from Dr. Jessup, but he was not asked what that advice was and it was not put to him that the advice was not to pursue the breach of confidence claim or that any advice was given by Dr. Jessup about that claim.

129. Mr. Robson next turned to Mr. Hayne's advice. It will be recalled that he was briefed on the Bank appeal when Dr. Jessup became unavailable. Although Mr. Hayne later became unavailable, he did participate in settlement negotiations with Mr. Finkelstein. It seems from Mr. Foster's letter of complaint to Mr. Resch dated 28 March 1999 about counsel's conduct of the case that, although Mr. Foster had rejected the Bank's offer of settlement of $105,000, Mr. Hayne was instructed to seek to establish whether the Bank was prepared to offer any amount above $105,000 and "to come back with a recommendation, especially if he was still of the opinion that the [Bank] could be successful in their appeal". Mr. Robson said that it was apparent from this letter and from the solicitor's note of the conference with Mr. Hayne on 7 August 1988 that Mr. Hayne advised the respondent on the merits of the case. It followed, said counsel, that Mr. Hayne must have considered the strength of the breach of confidence claim, and by not mentioning it, impliedly advised that the claim should not be pursued.

132. In my view, however, there is no evidence that Mr. Hayne was asked to advise, or that he advised, about the breach of confidence claim. He was retained in the appeal and the advice that was sought from him was about the merits of the appeal as such and the strength of the claim contained within what at that stage was a successful cause of action. The following circumstances confirm this position. When Mr. Frost was cross-examined about the above conference he was not asked whether any, and if so what, advice was given at the conference concerning the breach of confidence claim. Nor was it put to him that Mr. Hayne so advised. Moreover, Mr. Vickery, who was junior counsel first to Mr. Hayne and then Mr. Bongiorno, in clarifying his witness statement before Finn, J. said that he did not recall a discussion at the Hayne conference about the breach of confidence claim. Furthermore, the diary note of the conference makes no mention in terms of the breach of confidence claim having been discussed. As I understand it, it was not suggested before Finn, J., nor was it put before us, that the entry in the diary note, "[therefore] doubt about the subject matter" pertains to the breach of confidence claim. Hence, it is plain that no relevant advice was sought or received by the solicitors from Mr. Hayne.

135. Mr. Robson also pointed to the advice that was provided by Mr. Bongiorno (and Mr. Vickery) to the solicitors as giving rise to the inference that they were advised that the breach of confidence claim should not be pursued. The material, however, does not establish that either counsel impliedly advised on that issue. It is clear that after the Full Court hearing, advice was sought from the two counsel as to the Bank's prospects of success on the appeal and what remaining remedies were available to the respondent if the Bank were to succeed. The latter advice in particular was sought for the purpose of putting pressure on the Bank to settle the case. Counsel advised first in conference with Mr. Resch and later confirmed that advice in writing by a memorandum dated 25 October 1988. Their advice was to the effect that the respondent might have a valid quantum meruit claim against the Bank in respect of work done by it on the project until 7 August 1986 when the project was finally abandoned. They went on to advise that a without prejudice letter should be written by the solicitors to the Bank's solicitors offering to accept the Bank's earlier offer of $105,000 in consideration of, inter alia, the respondent releasing the Bank from its potential quantum meruit claim of over $50,000. It is apparent from the memorandum that counsel did not rate highly the prospect of settling the litigation, but they thought that the sending of such a letter was "worth a try". It will be recalled that counsel believed that the undetermined claim had been abandoned. In the circumstances, there is no basis for contending, as the appellant has done before us, that Mr. Bongiorno and Mr. Vickery in those circumstances advised inferentially on the question of the respondent's rights in relation to its breach of confidence claim.

138. Thus, it is plain that none of the counsel mentioned advised in terms or inferentially as to the respondent's right to pursue the breach of confidence claim. It was more likely that, as Finn, J. concluded, the subject was not addressed by them for the reasons given earlier, that, in the circumstances which his Honour described, they were not asked to deal with that claim and that the matter had passed from the solicitors' mind.

141. But even if counsel had advised Mr. Resch that the breach of confidence claim should not be resurrected, as Kirby, P. has made plain in Boland, his obligation as a solicitor for the respondent who instructed counsel was to turn his mind to such advice and examine it to ensure that it was sound and where, as here, no reasons were given for such implicit advice, such reasons should have been sought and considered by him. There is no evidence, however, that the matter was so dealt with by the solicitor. The fact that Mr. Resch died in 1993 meant that the court did not have his version of the events. But his file was before Finn, J. and there is nothing in it or in any other material before the court to suggest that the resurrection of the breach of confidence claim was the subject of advice by the appellant. As Finn, J. observed, it might be easy to understand how the breach of confidence claim was absent from the mind of the appellant at the relevant time, but that does not mean it was not negligent in failing to take any steps to preserve the undetermined claim.

144. In the circumstances, Finn, J. was plainly right in concluding that the appellant was negligent and breached its retainer after 4 November 1988 by reason of which the respondent lost the opportunity to pursue its breach of confidence claim, unless the matters to which I now turn show that there was no realistic chance of the confidence claim being successfully pursued. I have already mentioned that it was accepted by the appellant that, had the respondent been relevantly advised, it would have instructed the appellant to make the appropriate application to the Full Court.

148. As previously stated Finn, J. found, correctly in my view, that the Full Court would probably have remitted the claim (and the question of costs of the trial) to a trial judge, more particularly, to O'Bryan, J. for determination. Mr. Robson, however, contended that his Honour erred in this conclusion. He submitted that the Full Court would not have remitted the matter because it would have concluded that:

(a) The respondent had abandoned the breach of confidence claim at trial or at the appeal stage.

(b) Any application for remitter should have been made during the hearing of the appeal and it was too late to do so after reasons for judgment have been handed down.

(c) The cause of action had no reasonable prospect of success because:

(i) the concept put forward by the respondent to the Bank was not one which was sufficiently developed or had the required degree of "novelty" to be protected by equity;

(ii) the idea had no value because there was no evidence that it could have been sold to another party;

(iii) the Bank did not use the art collection aspect of the idea in breach of confidence;

(iv) there was no evidence that the respondent suffered damage by reason of the Bank's breach.

I now turn to examine briefly each of the above claims.

Abandonment

154. I note in passing that the allegation that the breach of confidence claim had been abandoned was not pleaded and was not mentioned in the notice of contention. Be that as it may, Mr. Robson submitted that the respondent abandoned the claim at the conclusion of the hearing before O'Bryan, J. In support of this argument he pointed to the respondent's failure at the trial to give any particulars and to lead evidence of any loss and damage that was said to flow from the alleged breach, and this, notwithstanding the Bank's criticism of this aspect of the respondent's breach of confidence case. This showed, so it was said by Mr. Robson, that those representing the respondent did not intend to pursue the breach of confidence claim before O'Bryan, J. Further, the fact that Dr. Jessup was content not to address on this issue in his final submissions confirmed that the cause of action was effectively abandoned by his client.

157. It is plain that the parties and his Honour regarded the breach of confidence cause of action as an alternative claim. That is how Mr. Strahan characterised it in his final submissions and Dr. Jessup also treated it on that basis. For example, Dr. Jessup told O'Bryan, J. that it would be only if the breach of contract claim was unsuccessful, that the breach of confidence claim would have to be pressed. That his Honour also regarded the breach of confidence action as an alternative claim is made apparent by what he said about it to counsel during addresses and in his reasons for judgment in the passages referred to earlier. It is therefore clearly evident that the breach of confidence cause of action had not been abandoned immediately prior to it merging in the judgment of O'Bryan, J.

160. Mr. Robson next contended that the claim in question was abandoned at the appellate stage and submitted that this conclusion is demonstrated by the following matters. First, in its amended notice of appeal challenging the correctness of what O'Bryan, J. had said in relation to the breach of confidence claim, the Bank asserted, inter alia, that the claim had been abandoned by the respondent. Notwithstanding this assertion, the respondent did not seek to refute it in its notice of cross-appeal, which was settled by Dr. Jessup, or otherwise. On the contrary, it was said, the respondent's outline of submissions filed on the day before the appeal was heard, responded to this ground by stating that "as nothing turns on this ground, no argument is addressed in respect of it." Mr. Robson said that the respondent's abandonment of the cause of action at that stage was also demonstrated by its failure on the appeal to contend that his Honour erred in failing to determine the breach of confidence claim, or alternatively, that his Honour's decision in favour of the respondent could be upheld on the basis of his effective finding that the Bank had breached its duty of confidence.

163. In my view, however, these matters do not establish that the respondent abandoned the claim at the appellate stage. The respondent could not sensibly have responded in its notice of cross-appeal to the Bank's claim that the breach of confidence cause of action had been abandoned. Equally, there was not much that could relevantly have been said on this point in the respondent's outline of submissions since the Bank's outline did not contain and could not have contained an argument on that point. Similarly, it was unrealistic to expect the respondent to cross-appeal or otherwise claim on appeal, on the basis, that his Honour erred in failing to determine the breach of confidence claim or that the decision should be upheld on the basis of what his Honour said about the claim. There was no finding made by his Honour on this issue which would have enabled either party to challenge or support it at the appellate stage and for the same reason, his Honour's decision in favour of the respondent could not be upheld on the basis of what his Honour said about the claim.

166. Mr. Robson also argued that the respondent's abandonment of the claim at appeal was demonstrated by the advice received by the respondent from Messrs. Bongiorno and Vickery to the effect that, if the appeal were lost, the remaining claim which the respondent might be able to pursue against the Bank was one for quantum meruit. Mr. Robson argued that the necessary inference from that advice was that counsel were of the view that the breach of confidence claim had been abandoned. In the event, the only claim that was sought to be pursued by the respondent after the Full Court delivered its judgment was the quantum meruit claim, thereby confirming, so it was claimed by Mr. Robson, its abandonment of the breach of confidence cause of action. But, for the reasons I have given, the breach of confidence claim was not pursued (but the quantum meruit claim was) because of the appellant's negligence. Furthermore, counsel were not asked to advise, and did not advise, on that issue so that the fact that it was not referred to in Mr. Bongiorno's advice does not support Mr. Robson's claim that the respondent had abandoned that cause of action. It is true that Mr. Bongiorno said in his evidence before Finn, J. that he assumed that the breach of confidence claim had been abandoned at trial, but it was not suggested that he was so instructed and, as Finn, J. said, Mr. Bongiorno had an imperfect understanding of what transpired on this issue at the trial and that his recollection of these events was affected by the passage of ten years or so since his involvement in the case. They may have held such a belief, but their beliefs do not permit an inference to be drawn of actual abandonment, which must depend on the party's own actions, including those of its authorised agents, but not of its unstated beliefs.

169. For these reasons, it was, in my view, well open to his Honour to find that the Full Court would probably have rejected the submission that the breach of confidence cause of action was abandoned by the respondent.

Application had to be made during hearing of appeal

173. Mr. Robson next submitted that the Supreme Court Act 1986, the Rules of the Supreme Court and authorities such as Port of Melbourne v. Anshun Pty. Ltd.[12] require that all claims by one person against another be litigated in one proceeding and that, ordinarily, parties are not permitted to bring separate claims against the one person in several proceedings. Thus, said Mr. Robson, if the respondent wished to pursue its breach of confidence claim, it had to raise the matter in the course of the appeal hearing (and not thereafter) albeit on the basis that the court would consider it only if it upheld the appeal on the breach of contract point. If it were otherwise, Mr. Robson submitted, the respondent would be able to have "two bites at the cherry" meaning, as I understood him, one before O'Bryan, J. at the original trial and another after the appeal.

176. But it seems clear enough that no "double dipping" as contended for by the appellant would be involved merely because the remitter application would be made after the Full Court handed down its decision on the breach of contract appeal. In reality, the respondent prosecuted the breach of confidence claim before O'Bryan, J. as an alternative to the breach of contract cause of action, but because of the circumstances already described, the matter was never determined by the court on its merits. Subject to reasons which would justify the Full Court exercising its discretion against remitting the matter to the trial judge and subject to it being satisfied that it had a reasonable case, the respondent was, on the face of things, entitled, as Finn, J. considered, to have the claim remitted by the court, given that the breach of contract claim failed.

179. In any event, it is obvious that the Full Court would not have considered a remitter application during the course of the hearing of the appeal which was concerned with a breach of contract claim. The most that the respondent could have done during the hearing of the appeal was to foreshadow that it would make a remitter application if the Bank succeeded in its appeal. It is true that this would have given the Full Court and the Bank advance notice of the respondent's intention, but it is difficult to see how failure to have given such advance notice would have deprived the respondent of seeking a remitter after the Full Court decided the appeal. Obviously, the appropriate time to have made such an application, from the point of view of the Bank and the Full Court, would have been as soon as practicable after the publication of the Full Court's reasons for judgment. But the fact that such an application was not made immediately after those reasons were published, did not preclude the respondent from making it at any time before entry of judgment, subject to other discretionary considerations.

182. Consequently, the appellant's argument that the Full Court would have refused the remitter application because it was not raised during the hearing of the appeal must be rejected.

186. In analysing this ground it should be borne in mind that, as Mr. Porter pointed out, the Full Court hearing the remitter application would have embarked only on a relatively limited inquiry into the merits of the breach of confidence claim; it would not have conducted a mini-trial of the cause of action and would have been concerned, at most, only with whether the applicant had a reasonably arguable case.

189. Finn, J. concluded that the factors relied on by Mr. Robson to demonstrate the weakness of the respondent's claim, to which I refer below, amounted to contingencies only which reduced the value of the opportunity to prosecute the claim but did not destroy it and, on the balance of probabilities, would not have caused the Full Court to reject the remitter application. As I have already mentioned, his Honour found that, on the balance of probabilities, the Full Court would have remitted the breach of confidence claim to a trial judge, and more particularly, to O'Bryan, J., and that at such a hearing the respondent had a real prospect of succeeding in establishing its claim. On the evidence, and for reasons given below, it is my view that it was open to his Honour to make such findings.

192. I turn now to consider briefly the appellant's reasons for its contention that the Full Court would have considered that the breach of confidence claim had no reasonable prospect of success.

196. In essence, Mr. Robson contended that the respondent's idea was not sufficiently novel or developed so as to constitute a subject matter in respect of which equity would give relief. There are two, seemingly alternative, bases on which equity grants, in appropriate circumstances, remedies for breach of confidential information where the subject of the confidence is an idea (which is of a confidence and which was communicated in confidence). One is that equity acts to protect the plaintiff's right to have the confidence respected, more particularly, to have the information kept confidential and not misused - see for example, Boardman v. Phipps[13]; Talbot v. General Television Corporation Pty Ltd.[14]; Moorgate Tobacco Co. Ltd. v. Philip Morris Ltd. (No.2)[15]; Smith Kline & French Laboratories (Aust) Limited & Ors. v. Secretary, Department of Community Services and Health[16]; F. Gurry "Breach of Confidence"[17]. The other basis is that equity regards information as akin to property and grants or withholds relief accordingly - see for example, Talbot[18]; Fraser v. Thames Television Ltd.[19].

199. In Deta Nominees v. Viscount Plastic Products[20] Fullagar, J. suggested[21] that the two versions to which reference has been made were but subdivisions of an equitable cause of action for breach of confidence. Which of the two bases becomes the foundation for the relief claimed will depend on the circumstances of the case. His Honour said:

"Here, in equity, there are two sub-divisions, and both are compendiously called cases of confidence or `breach of confidence': (a) Cases where equity will intervene to protect what it regards as the property of a person. (b) Cases where the analogy of property is not available, but where the circumstances are such that the conscience of a recipient or possessor of information is so affected as to make it `unconscionable' on his part to publish or use the information; here equity will intervene on a basis analogous to the truly contractual situation in which the common law intervenes."

203. It is not necessary, however, to resolve this matter because it was common ground between the parties, below and before us, that relief was sought by the respondent on the basis that the item in question was akin to property and the respondent was, in the circumstances, entitled to relief on that basis.

206. The primary focus of the appellant's submission on this issue was, as I have mentioned, that the respondent's idea was not sufficiently developed and did not have the necessary quality of "uniqueness" or "novelty" to be capable of being protected by equity. I have already mentioned that Mr. Strahan submitted to O'Bryan, J. (and Mr. Robson adopted the submission) that the concept of a corporate sponsored art collection was common place and not in any way unique.

209. It is apparent that one of the difficulties that faced the respondent in this claim was that there seemed to be little by way of novelty about the art collection aspect of the idea, there being nothing unique in the concept of a corporate sponsored art collection. Moreover, the event which it was to celebrate, namely, the Australian bicentenary, was also a well known public event. It seems unlikely, for example, that an idea of sponsoring an art collection that reflected themes of the Sydney Olympic Games or the Centenary of Federation could, without more, be regarded as "novel". But what was proposed by the respondent could not be equated with a mere art collection based on such themes. Counsel pointed out that the concept as developed by the respondent went well beyond a mere corporate sponsored collection of Australian art which depicted themes that were suitable for the bicentenary celebration. The idea was a composite one, as described earlier, involving the commissioning of particular categories of Australian artists to produce artwork that highlighted Australian life that would be historically connected with the bicentenary. Importantly, said Mr. Porter, it was an essential part of the idea that specially designed calendars would be produced for sale to the public. Such calendars had unique features which had been developed by the respondent. Furthermore, the mere fact that some changes were made to the proposal at the behest of the Bank was not relevant because, as Mr. Porter pointed out, the idea was capable of being implemented in its original form.

212. In my view it was open to Finn, J. to conclude that, on the evidence before him, the idea was sufficiently developed and had sufficient uniqueness about it to be capable of being protected by equity in appropriate circumstances. Finn, J. did not err in concluding, in effect, that the Full Court would probably have been satisfied that it was reasonably arguable that the respondent's idea had sufficient uniqueness about it and was sufficiently developed and articulated to be capable of being protected by equity.

216. Mr. Robson submitted that another reason why the respondent's breach of confidence claim had no prospect of success was that there was no evidence that the idea had any value. On the contrary, it was said, the only evidence on the point showed that it had no value. In that regard, Mr. Robson pointed to the evidence of the respondent's unsuccessful attempt to sell the concept after August 1986.

219. In my view, however, the mere fact that the respondent did not call evidence to establish that others would have purchased the concept if the Bank had not launched its bicentennial art collection with much public fanfare is not determinative of the matter. First, there is real doubt as to what would have been the value of such evidence given that it would have been given in a hypothetical context. Secondly, the Bank's interest in the concept indicated that it had some value. The Bank was sufficiently interested in the concept to negotiate with the respondent for a period of almost six months before rejecting his proposal while simultaneously and covertly taking a material part of the idea, namely, the promotion of a bicentennial art collection and using it to plan, and then launch, its own bicentennial art collection. Moreover, the Bank did not call evidence to establish that the concept was not viable for it as was contended for in its letter of 7 August 1986 to which I have referred. The Bank's dealings with the respondent and the appropriation of a material part of his idea for its own use were inconsistent with such a claim. In any event, the evidence given by Mr. Frost in cross-examination in relation to the quantum meruit claim showed the substantial amount of work carried out by him to complete the concept thereby giving some indication that it had value. The fact that the respondent was unsuccessful in its attempts to sell the proposal to other parties after the Bank launched its project is not relevant to this issue because, once the Bank went ahead with its own art collection project, the underlying basis of the respondent's proposal and its capacity to promote and sell it as a whole was destroyed.

223. It was contended for the appellant that it was plain that the Bank did not misappropriate the respondent's concept, because the art collection which was promoted by the Bank was materially different from that which was proposed by the respondent in February 1988. It was emphasised by counsel that the "ANZ Bicentennial Collection" of August 1986 followed the form of the collection that was contained in the amended proposal that was developed by it rather than the one that was part of the respondent's proposal of February 1986.

226. The principal difference between the original and the amended proposals, however, was that four of the paintings were to come from the Bank's collection and the commissioned artwork would go back to the respective State and Territory galleries rather than to the Australian National Gallery in Canberra. But the concept of a bicentennial art collection and the manner in which it was to be accumulated and how it was to be associated with the bicentennial celebrations were an important part of the respondent's original proposal. Furthermore, it was that concept that was taken up by the Bank for its own use under a title that was essentially the same as that originally proposed by the respondent. Moreover, the paintings that were collected by the Bank were similar in nature to those proposed by the respondent. They depicted Australian life through art for the purpose of celebrating the Australian bicentenary and were promoted as the Bank's bicentenary collection. Thus, it was open to Finn, J. to find that, on the evidence, the respondent had a reasonable prospect of establishing that the Bank misappropriated a significant aspect of the respondent's concept. Obviously, the Bank's use of this information was to the detriment of the respondent because, once that took place, the substratum of the concept was effectively destroyed - it was unlikely that another institution would sponsor a bicentennial art collection with or without the calendar.

230. It was further claimed for the appellant that the Full Court would not have concluded that the respondent had a reasonable prospect of establishing on the remitter that it suffered any damages by reason of the Bank's alleged wrongdoing. Mr. Robson pointed out that there was no evidence before O'Bryan, J. as to what were the respondent's damages arising from the alleged breach of confidence by the Bank and that there was no evidence before Finn, J. as to whether any, and, if so what, evidence would be led on this issue on a remitter.

233. But, as Lush, J. demonstrated in Talbot[22], there is no single standard method by which damages or compensation for breach of confidence are to be calculated. That may occur in a number of ways depending on the circumstances of the particular case. Thus, in an appropriate situation the compensation may be based on the loss of profit the plaintiff would have derived but for the defendant's breach (Dowson & Mason Ltd. v. Potter[23], Dean, The Law of Trade Secrets[24]). In other cases, compensation may be properly determined by reference to a fair fee that would be payable by a user of the confidential information calculated on the basis of an arm's length transaction between the parties - Interfirm Comparison (Australia) Ltd. v. Law Society of New South Wales[25]. The aim in every case is to put the plaintiff, so far as monetary compensation can do so, in the position it would have been but for the breach of confidence by the defendant. See Stuckey-Clarke - "'Damages' for Breach of Purely Equitable Rights: The Breach of Confidence Example" in Finn (ed.), Essays on Damages, 1992, Dean - The Law of Trade Secrets[26], McDermott - Equitable Damages[27].

236. On a remitter, it would have been open to the court to allow further evidence to be called on this issue and to assess damages in any of the ways referred to earlier. But even if, for some reason, further evidence could not be called by the appellant on this issue, the fact that this would make the court's task of assessing damages more difficult would not relieve it of the duty to assess them (as best it could) - see Talbot[28]. There was an evidentiary basis, slender though it may have been, on which damages could have been assessed absent new evidence at the remitter hearing. The material before O'Bryan, J. going to establish damages for breach of contract could have formed a basis for the calculation of damages for breach of confidence, although, obviously, the amount of such damages would be different from and less than those awarded by O'Bryan, J. at the Bank trial. There was also the appellant's proposed evidence in relation to its unsuccessful quantum meruit claim which, for reasons which are not relevant, was canvassed before O'Bryan, J. That, too, may have formed the foundation for the assessment of damages for breach of confidence.

240. Thus, the reasons put forward by the appellant as to why the Full Court would not have remitted the undetermined claim for resolution at trial level should be rejected. Clearly it was open to Finn, J. to find on the evidence that the Full Court probably would have made the necessary order to remit the breach of confidence claim and the question of trial costs for resolution at trial level.

244. For that reason alone, it was correct for his Honour to conclude that the opportunity to prosecute the claim had some value. But as I have previously mentioned, Finn, J. was also satisfied that, on remitter, the respondent had a reasonable prospect of establishing its claim and, in my opinion, this conclusion too was open to his Honour on the evidence.

247. It is important to note that Finn, J. considered that the claim (and the question of trial costs) would have been remitted to O'Bryan, J. as distinct from another trial judge. This assumption or conclusion was criticised by Mr. Robson, but in my view, it was likely that the Full Court would have sent the matter back to his Honour. There were obvious practical reasons why that should have been done and there were no countervailing discretionary reasons that were put forward by the appellant as to why the Full Court would have considered that such a course would be inappropriate.

250. In considering the respondent's proposal of succeeding on remitter before O'Bryan, J., Finn, J. considered, correctly I think, that he did not have to embark upon a hypothetical trial of the issue as may occur where the trial judge has to consider, say, the plaintiff's prospect of success in a case where, due to the defendant's negligence, there has been a failure to issue proceedings within the limitation period - see Instant Nominees Pty. Ltd. v. Redman[29]. His Honour had before him the whole of the transcript of the proceedings before O'Bryan, J. which showed, as his Honour observed, a full canvassing of the breach of confidence claim except that Dr. Jessup made no final submission on the issue. This included the alleged deficiency relating to the breach of confidence claim and, in particular, the deficiencies in the particulars and evidence as to the damages that were said to flow from the breach. Having reviewed the evidence that was before O'Bryan, J., Finn, J. concluded that, had the matter been remitted to his Honour, he would have adhered to his tentatively expressed view that the Bank had been guilty of breach of confidence. Thus, Finn, J. said, although the respondent's claim "might be considered by some to be somewhat adventurous", he was satisfied that a judge in the position of O'Bryan, J. could find - and that his Honour would have found - an actual breach of a duty of confidence by the Bank.

254. His Honour considered what level of compensation O'Bryan, J. might have awarded for the Bank's wrongdoing to be "far more problematic". It was the assessment of the value of the lost opportunity (which was to be undertaken having regard to the degrees of probabilities and possibilities) that occasioned his Honour the greatest difficulty. It should be emphasised in relation to this issue that, as Mr. Porter said, given the particular circumstances of this case, what the respondent lost by reason of the solicitors' negligence was a chance to have the claim determined by O'Bryan, J. according to law and it was that chance that had to be valued. No doubt on the remitter, O'Bryan, J. would have entertained further submissions and possibly further evidence from the parties, although it has not been suggested by Mr. Robson what submissions of substance the Bank might have made on the remitter hearing additional to those that were made to O'Bryan, J. at the Bank trial or what additional evidence it may have sought to lead at such a hearing. It seems that his Honour would have determined the breach of confidence claim substantially on the material that was before him at the trial with the addition of any submissions of the respondent which were not put at the earlier proceeding.

257. His Honour acknowledged that the assessment that he was called to make, namely, what was the prospect of a claim that would have been tried some ten years earlier and what submissions would have been made to the trial judge and whether he would have accepted any and if so which of them must be, to a large degree, a matter of some conjecture. His Honour was satisfied that the respondent's right to argue the breach of confidence claim was valuable and that, if pursued, would have resulted in a substantial award of damages having regard to the material that was before O'Bryan, J. on that issue and to the fact that further evidence might have been led on the breach of confidence claim by the respondent. In the circumstances, his Honour considered that a reasonable distillation of the contingencies relating to the prosecution of the claim and to which reference has already been made should result in an award of damages of $55,000. This would reflect, his Honour said, a small discount for the contingency that, on re-argument, no breach of confidence would have been found on the facts and a further discount, in the order of 50 per cent, to take account of the contingencies relating to the assessment of damages.

260. The appellant submitted that his Honour's assessment of the value of the lost opportunity was mere speculation because, as I have already mentioned, it was the appellant's case that there was no evidence on which O'Bryan, J. could have awarded damages for the Bank's wrongful breach of confidence. For reasons I have given, however, it would have been open to O'Bryan, J. to arrive at an amount which properly reflected the respondent's relevant damages.

264. In making this assessment, his Honour considered that the prospect of the Bank appealing against the decision of O'Bryan, J. on the breach of confidence finding was not "... of any particular moment" because, in his Honour's view, the Bank would have wanted the matter finalised since "[it's] moral position was decidedly weak." In my view, however, his Honour should have treated the prospect of an appeal by the Bank as a contingency and discounted the damages accordingly.

267. Mr. Porter argued, however, that his Honour did take the likelihood of the Bank appealing into account in assessing the value of the respondent's loss of opportunity. Counsel said that what his Honour did was set off that contingency which was in favour of the appellant against another contingency that was in favour of the respondent. The latter consisted of the appellant's contention that the cause of the respondent's loss was its refusal to accept the Bank's offer of settlement of $105,000. Thus, Mr. Porter said, his Honour cancelled out two contingencies, one favouring the appellant and the other favouring the respondent and, therefore, there was an appropriate consideration given by his Honour to the Bank's prospect of appealing any decision made on the remitter in favour of the respondent. In my view, however, the respondent's refusal to accept the Bank's offer does not fall into the same category of contingencies as does the prospect of the Bank's appeal. There is nothing in the material that I have seen that indicates that the Bank considered that it was on questionable moral grounds. Its appeal on the contract question suggests that it would have had no hesitation in appealing any decision adverse to it on the remitter if it thought it had reasonable prospects of success. Given that there clearly was a prospect that the Bank might have appealed, and having regard to all the circumstances of the case, I am of the opinion that the award of damages of $55,000[30] should be reduced to $50,000.

271. Before turning to deal with the other two heads of damages that were awarded by his Honour, I mention for completeness two matters that were argued by Mr. Robson but which I have not yet examined. One concerns the allegation that his Honour erred in finding that the Full Court would have remitted the breach of confidence claim "as a matter of course" and the other is that his Honour erred in finding that Mr. Resch had effectively admitted liability to Mr. Foster.

274. What his Honour actually said, after concluding that the respondent was entitled to have its claim determined, was:

"Save in exceptional circumstances (e.g., possibly where the claim itself was an obvious abuse of process), a Full Court on setting aside judgment in such circumstances would as of course remit the matter to the trial judge to have the outstanding cause of action decided...".

In my view, his Honour was stating, in general terms, what an appellate court was likely to do in circumstances such as here, where the judgment below was set aside and an application was made to remit to the trial judge the remaining cause of action that was heard but was not determined below. In my opinion, what his Honour said is unexceptionable.

280. It was contended on behalf of the appellant that, in concluding that Mr. Resch made an admission of liability to Mr. Frost, his Honour failed "properly" to take into account the failure by Mr. Frost to say during his cross-examination that such an admission was made by Mr. Resch. It was said by Mr. Robson that his Honour had undue regard to what Mr. Frost said on this issue in his witness statement - he failed to have sufficient regard to his evidence and to Mr. Resch's file note of his relevant conversation with Mr. Frost which did not record the alleged admission. In my view, however, it was open to Finn, J. to conclude on all the evidence, particularly after having the benefit of seeing and hearing Mr. Frost in the witness box, that Mr. Resch admitted to him that the solicitors were negligent in not having sought to remit the breach of confidence claim to a trial judge for determination. It was not put to the witness that what he said in the witness box was wrong. Moreover, given that the solicitors were negligent, there was every reason for Mr. Resch, an experienced practitioner who obviously had the best interests of his client in his mind, to tell him just that and that he should seek independent advice as to what course he should follow.

284. The second head of damages awarded by his Honour was for the costs that the respondent would or might not have had to pay to the Bank had the case been remitted to the trial judge namely, the Bank's costs relating to the breach of confidence claim. It was successfully contended by the respondent before Finn, J. that, had the breach of confidence claim been remitted by the Full Court, it would have also remitted to the trial judge the question of the costs of the trial which was concerned with both the breach of contract and the breach of confidence claims. Given that Finn, J. found that the respondent would probably have succeeded on the remitter, he considered that it was likely that there would have been an apportionment of the costs of the trial between the breach of contract claim (on which the Bank succeeded) and the breach of confidence claim (on which, it is to be assumed for present purposes, that the respondent would have succeeded) on a 60:40 basis. That translated to $16,060 (being sixty per cent of $26,768.29 which was the amount of the costs taxed that were attributable to the trial) which his Honour awarded to the respondent by way of damages as arising from the appellant's breach of retainer and negligence.

287. The appellant complained before us that his Honour should have discounted the above sum by a further 50 per cent to reflect the chance that the claim may not have been remitted or would not have succeeded even if it had been remitted. In my view, however, such an approach involves double counting. The discount for the likelihood of not remitting and of failing on a remitter hearing has already been applied by his Honour in the valuation of the loss of opportunity. But once it has been found, as it has been by Finn, J., correctly in my view, that the breach of confidence claim would have been remitted and that the respondent would have succeeded on a remitter, the quantification of the apportionment of the trial costs does not admit of further discounting.

290. In my opinion, however, his Honour should have applied a discount to take account of the likelihood that the Full Court may have granted the remitter application on the basis that the breach of confidence claim should have been fully pursued at the trial before O'Bryan, J. and that, therefore, the respondent should pay the Bank costs of the remitter hearing. In any event, even absent such a consideration, on a remitter hearing the respondent would have to pay some costs, if only its own solicitor and client costs relating to that hearing. As I have said, a discount for that contingency should have been allowed and, as I read his Honour's judgment, that was not done. In round terms, I estimate that these costs would have amounted to $4,000. Consequently, the respondent's entitlement to the notional recoupment of the costs it had to pay to the Bank should have been $12,060.

294. The respondent, in the end, paid the appellant $47,230.77, being a proportion of the fees that had been rendered to him for the appellant's professional services in relation to the Bank trial and appeal and related matters. The respondent's case before Finn, J. was that, in the circumstances, so much of the fees paid by it as are properly attributable to the breach of confidence claim, should be effectively repaid in the form of damages. It was contended that 50 per cent of the fee paid related to the breach of confidence claim. His Honour accepted, rightly I think, that "to some significant degree" the costs incurred by the respondent in its litigation against the Bank, were wasted. But as his Honour said: "It is a matter of no little guesswork" what the amount should be. He considered that a sum in the order of $20,000 would properly reflect a broad apportionment of the fees to the breach of confidence claim. Mr. Robson submitted, however, that in arriving at that amount, his Honour erred in not discounting it for the risk of the respondent failing in the remitter application and in any remitter hearing. But for the reasons I have given in respect of his Honour's award of damages relating to the Bank's costs, the taking into account of those contingencies in relation to the appellant's fees would amount to an impermissible double counting. Hence, this complaint should be rejected.

298. To reiterate, for the reasons given[31], the damages of $91,060 awarded by his Honour should be reduced by $5,000 and $4,000 to reflect respectively the contingency of the Bank appealing against any decision given against it on the breach of confidence claim and the contingency of the respondent having to pay the Bank's costs, or at least its own solicitor client costs, on the remitter application. This would reduce the total amount of damages to $82,060. Consequently, the appeal should be allowed for the purpose of setting aside his Honour's judgment for $91,060 and ordering in lieu thereof judgment for the respondent in the sum of $82,060. For completeness, I note that the appellant's grounds relating to interest and costs were not pressed during the appeal.

[3] [1999] HCA 27; (1999) 198 C.L.R. 511.

[4] [2000] HCA 33; (2000) 202 C.L.R. 629.

[5] [2000] HCA 62; (2000) 204 C.L.R. 158.

[6] [1994] HCA 4; (1994) 179 C.L.R. 332 at 355 per Mason, C.J., Dawson, Toohey and Gaudron, JJ. and at 364-5 per Brennan, J.

[7] [1996] VicRp 22; [1996] 1 V.R. 346 at 354 per Winneke, P. (with whom Ormiston and Charles, JJ.A. agreed).

[9] [1984] Fam 48 at 63-64 per May, L.J. (with whom Sir John Donaldson, M.R. agreed at 69).

[10] [1999] HCA 64; (1999) 74 A.L.J.R. 209 at 239 to 240.

[12] [1981] HCA 45; (1981) 147 C.L.R. 589.

[13] [1966] UKHL 2; [1967] 2 A.C. 46 at 127 per Lord Upjohn.

[14] [1980] VicRp 26; [1980] V.R. 224 at 250 per Young, C.J..

[15] [1984] HCA 73; (1984) 156 C.L.R. 414 at 437-438 per Deane, J.

[16] [1989] FCA 384; (1990) 22 F.C.R. 73.

[17] P.D. Finn, Essays in Equity, 1985, p. 110.

[19] [1984] 1 Q.B. 44 at 65-66 per Hirst, J.

[20] [1979] VicRp 17; [1979] V.R. 167.

[23] [1986] 1 W.L.R. 1419.

[29] [1987] W.A.R. 215 at 226-227 per Burt, C.J.

[31] See paras.[76] and [82] above.