Down to Earth Spring Water Pty Limited & Ors v Nikolaidis [2005] NSWSC 272 | Case summary

JUDGMENT 1 Master: On 17 October 1990, the first plaintiff commenced the carrying on of a business of producing and selling natural spring water to the domestic market. This was regarded as a new market. Its prospects of success were untested. 2 The second plaintiff held shares in the first plaintiff. The third plaintiff was the owner of premises at 117-119 Silverwater Road, Silverwater (the premises). The premises were rented from December 1990 and then used for the carrying on of the business. 3 The directors of the first plaintiff were John Preston (Preston), Jason Paris (Paris), Gary Robert Smith (Smith) and Adam Denver Loel (Loel). Preston was also a director of the second and third plaintiffs. He was also involved in a number of other companies (including Preston Engineering Pty Limited and Preston International Pty Limited.). 4 Smith and Paris had earlier been involved in a mineral water business (the water was obtained from a property known as Linton Park). However, the business was directed to the commercial market. The other directors had not been involved previously in such a business. 5 The defendants were the partners of a legal practice known as M D Nikolaidis & Co. 6 Initially, the first plaintiff supplied water to customers in certain inner-Sydney suburbs. It operated from other premises and it was intended that it have a capital of around $360k. Despite the brief trading history, it was decided to expand and supply water to customers in Sydney generally. The proposed expansion required finance. It was decided to conduct the business from larger premises. It was estimated that an injection of $900k was required. There were to be directors' loans in the sum of $200k. A budget of projected sales was prepared (the budget). 7 Approaches were made to financial institutions (including the State Bank of New South Wales (the Bank)). An accountant for Preston and his companies, Ian Greenwood (Greenwood) acted as its agent. He dropped out of negotiations with the Bank from about 10 January 1991. 8 His role was to negotiate the financial arrangements. It was a function with which he was familiar (in particular he was an experienced negotiator for finance with banks). 9 I shall now mention certain of what followed the approach to the Bank. What is mentioned is not intended to be an exhaustive narrative. 10 Discussions, meetings and correspondence were had with bank officers. The bank officers included Messrs Savins (Savins), Nott (Nott) and Chandler (Chandler). Approval had to come from the Regional Lending Manager. This was known, inter alia, to Greenwood. He was fully aware that Savins did not have authority to approve a loan. 11 At a meeting on 23 November 1990, Greenwood, Preston, Smith and Savins were present. It was held at the premises. Savins was a relatively inexperienced business banking officer. At the time, he was about 22 years of age. Greenwood was the main spokesperson. A submission to possible financiers (which included the budget) prepared by Greenwood was given to Savins. What was said at this meeting was alleged to give rise to representations relied on by the plaintiffs (inter alia, that the Bank would give priority to any application by the first plaintiff for a loan and if the loan were approved, the funds thereafter would be made available to the first plaintiff within two or three weeks). 12 The Bank provided a letter of tender on 26 November 1990. It set forth the credit proposal had in mind by the Bank. It was a credit proposal for the first plaintiff. It was forwarded under a covering letter that said:- … the details described in the tender are indicative only and intended merely as a guide. The tender should in no way be construed as a loan approval. 13 It was decided by the directors to proceed with an application to the Bank. The amount sought was $1m (there is evidence of an agreement between directors that an amount in the sum of $100k was to be repaid to Preston therefrom). An application fee was negotiated (on 28 November 1990) and paid to the Bank. 14 Savins started working on a submission. It was completed by 4 December 1990 and signed off by Notts. Documents were then provided to the Bank (including an external valuation made in 1989). An internal application was made to Chandler supported by a detailed submission prepared by Savins. 15 On 3 December 1990, Greenwood made a request for the leasing of two trucks. Chandler approved the lease finance. 16 On 5 December 1990, there was a telephone discussion had by Greenwood and Savins. Greenwood was informed that the submission had been completed and given to Chandler. About the same time there was a further conversation, during which Greenwood was asked by Savins, "When do you want to settle this?". He responded, "By 31 December 1990". Savins then said, "Ok, we'll aim for then". 17 A memorandum from Chandler on 10 December 1990 saw a deferral of the application. He took the view that the proposal was inter alia "highly speculative". He wanted further information (including a "sanitised" cash flow). This was relayed to the plaintiffs by Savins. 18 There was an urgent need for working capital (to pay creditors). There was discussion concerned with what was to be regarded as a short term solution. It was not to be a partial draw down. 19 Nott and Savins went to see Chandler concerning the granting of a short term overdraft (in the sum of $200k) pending the question of the approval of the $1m loan. The short term overdraft (to be secured by mortgage over the premises) was approved on or about 11 December 1990. 20 The "sanitised" cash flows were received by the Bank on 12 December 1990. Greenwood was making daily telephone calls to Savins. An interest cap facility was put in place on 14 December 1990 (expressed to commence on 31 December 1990). On or about 17 December 1990, the $7k fee for that facility was paid. Savins passed on the further information that had been required by Chandler. On 18 December 1990, Chandler approved the application to proceed to valuation. Greenwood was then so advised (on about 19 December 1990). Chandler also approved a further short term loan of $55k. 21 Steps were then taken to obtain a valuation (about 19 December 1990). There was delay in obtaining the valuation. This seems to be due to workload and delay on the part of the plaintiffs in finding a lease that was required for sighting by the Bank. The Bank's valuer gave a valuation lower than the external valuation earlier provided by the plaintiffs. This led the Bank to reduce the amount of the advance to $930k. This information was conveyed by Savins to Greenwood. The latter was instructed by the directors to accept the reduced advance. 22 Changes were made to the proposed arrangements. The moneys were to be advanced in tranches and linked to performance criteria. The second plaintiff became the proposed borrower instead of the first plaintiff (on or about 19 January 1990). The aim of this change was to give Preston greater control. The proposal to change the borrower had been first raised on 5 December 1990. At the instigation of Savins, the proposed change was put aside pending approval (he did not want to upset the submission). It was thought by him that it would not be a problem. It was later raised in an addendum prepared by Savins. Debate on the change commenced on 19 December 1990. The Bank sought legal advice. There was an impasse until early January 1991 (inter alia because the Bank wanted a guarantee which Preston was not prepared to give). When a solution to the impasse was reached, Savins told Greenwood that the Bank was prepared to go ahead with a change of borrower (without the guarantee). At that time, Greenwood was aware that there had been no approval. 23 In early January 1991, the Bank's regional lending manager (Chandler) went on annual leave. This led Savins, on or about 7 January 1991, to approach Mr Reberger (the regional manager who was senior to Chandler). He approved Savin's submissions. A letter of offer to the second plaintiff was signed on 11 January 1991 and returned to the Bank. At that time, Greenwood was aware that settlement of the loan was conditional upon a satisfactory valuation and execution of loan documentation. 24 The Bank then needed to be satisfied that $70k could be shaved off the budget and that the reduced advance would provide sufficient funds. This was subsequently done (see, inter alia, letter from Greenwood dated 4 February 1991 (Exhibit D, p1821)). 25 On 4 February 1991, Savins ceased to be involved in the matter. He moved to another branch and the file was transferred to other officers. 26 During February 1991, discussion was had concerning provisions in the proposed documentation. Certain provisions were unacceptable to the plaintiffs (including, inter alia, the terms of a fixed and floating charge and guarantee terms). Both the plaintiffs and the Bank were then receiving legal advice concerning the documentation. Some compromise was made. A consensus was ultimately reached in the latter part of March 1991. There was a signing of agreement on 27 March 1991. 27 Finance was provided by the Bank during a period commencing in December 1990 and ending on 12 April 1991. There were leasing arrangements in respect of two trucks ($40k). Short term overdrafts were provided on 11 December 1990 (in the sum of $200k for working capital to be used to acquire bottles and other equipment), on 19 December 1990 (in the sum of $55k, to be used to pay for the bottling plant) and on 10 January 1991 (in the sum of $50k for further working capital). Further accommodation was provided on 8 February 1991 ($100k) and on 12 February 1991 ($100k). The final advance in the sum of $325k was made on 12 April 1991. 28 From the finance advanced, two amounts (each in the sum of $50k) were paid to Preston Engineering Pty Limited (the first on or about 20 December 1990 and the second on 11 February 1991). These were made in repayment of Preston's loan account (a loan which had not been made by Preston as at 23 November 1990). Also, on 14 January 1991, the sum of $80k was paid out of advanced funds to the second plaintiff and placed on deposit for 14 days. It was then returned to the first plaintiff. 29 From about October 1990 (when a deposit was paid on the bottling plant), liabilities had been incurred for the purpose of enabling the meeting of the performance criteria postulated in the budget (inter alia, in respect of acquisition of a bottling plant, vehicles, bottles and other equipment as well as sales and installation staff). 30 Subsequent to the acceptance of the loan offer, the business came to be trading at a loss. By April 1991, the business had become technically insolvent. Its financial position deteriorated thereafter. Later, there was to be default under the financial arrangements made with the Bank and then the first plaintiff went into receivership. 31 During 1991, instructions were given to the defendants to bring a claim for damages (the damages claim) against the Bank. The claim had two aspects. It was founded on both breach of contract (the breach of contract claim) and contravention of provisions of the Fair Trading Act 1987 (the Act). Misleading and deceptive conduct in contravention of s42 of the Act was alleged (the representations claim). 32 In August 1991, the damages claim was commenced in the Federal Court. It was later transferred to this Court. The Bank brought a cross-claim seeking to recover, inter alia, the advanced moneys. 33 During the history of the damages claim, there were changes in the representation had by the plaintiffs. Originally, Mr Coles QC had been briefed. He was replaced by Mr Palmer QC (as he then was). He held the brief from the commencement of the hearing until 2 April 1992. Mr Palmer became unavailable after 2 April 1992. Mr Grieve QC was then briefed. 34 The proceedings came before Brownie J. The hearing commenced on 30 March 1992. It was adjourned to 31 March 1992. The proceedings continued thereafter before Brownie J until 2 April 1992 35 On 2 April 1992, Brownie J delivered an interlocutory judgment and then adjourned the proceedings to 9 June 1992 (which followed a long weekend). In that judgment, he observed that the breaches of the directions of the Court by the plaintiffs had been many and repeated ("Indeed they are in quite egregious breach" [p2]). He further observed [at p1]:- As the case was prepared for hearing it seemed clear enough that the plaintiffs had no answer to the cross claim, except to the extent that there was an equitable set off arising from the plaintiffs' claim against the defendant. The quantification of that claim by the plaintiffs depended upon a report of Mr Greenwood. When the hearing commenced on Monday last the plaintiffs abandoned Mr Greenwood's opinion and it was foreshadowed that they would rely instead upon the report of Mr Vella, then still to be supplied, and perhaps on a separate report of Dr Mukherjee. 36 The defendant had qualified Mr Lombe (Lombe) as an expert. He had prepared a series of reports which, inter alia, dealt with the Greenwood opinion in considerable detail. 37 On 1 April 1992, Mr Vella (Vella) supplied a report and a supplementary report. On 7 June 1992, he provided a further report. On 10 June 1992, he swore an affidavit. A further amended statement of claim was prepared. 38 Lombe was given the further report. He made notes in relation to it which were made available to the Bank. This material was later the subject of an affidavit. 39 The briefing of Mr Grieve saw a fresh approach being taken to the damages claim. Prior thereto, Mr Palmer had been of the view that although it was arguable, the prospects of success were not strong. 40 By 5 June 1992, counsel for the plaintiff had come to the firm view that the damages claim would fail by reason of, inter alia, illegality (he was concerned about potential serious consequences, including criminal prosecution). This view was conveyed to Mr Nikolaidis in conference. For other reasons, counsel had also earlier expressed an adverse opinion as to the prospects of success of the breach of contract claim (as it was then pleaded). It was thought that even if loan funds had been provided by 31 January 1991, the first plaintiff would still have become insolvent. It was also thought that for it to have any prospects of success it was necessary to establish that a contractual obligation to make the loan had arisen by early December 1990. 41 A further conference was arranged to take place during the long weekend. At this conference, Mr Grieve gave advice to his clients. One view expressed was that deposits paid by customers could not be applied as working capital and that the business plan was predicated on such a use (which Mr Grieve regarded as being in breach of trust). This led him to the view that the plaintiffs could not maintain their damages claim because the loan contract was tainted with illegality. He advised settlement. Handwritten instructions were prepared. What had been prepared left to the directors the task of nominating the amount to be offered to compromise the proceedings. The instructions were completed and signed by the directors. They instructed the legal advisors to offer "nil" to compromise the proceedings. There was no express instruction to discontinue the damages claim. 42 I digress to say that the conference or conferences were to throw up the issue of whether or not during the same the plaintiffs had instructed their legal representatives to discontinue the damages claim. 43 On 9 June 1992, Mr Grieve informed Brownie J that he had been instructed to discontinue the damages claim. His Honour by consent gave judgment for the bank on the damages claim. The plaintiffs were then allowed to amend their defence to the cross-claim so as to rely on the illegality. Brownie J then adjourned the further hearing until 11 June 1992. 44 His Honour then heard the cross-claim (on 11 and 15 June 1992). 45 On 11 June 1992, the plaintiffs sought to file in court the affidavit sworn by Vella on 10 June 1992. Brownie J refused leave to file the affidavit at that stage. 46 On 12 June 1992, Brownie J rejected an application to further amend the defence to the cross-claim. On 10 September 1992, judgment was delivered on the cross-claim (inter alia, the defence of illegality was rejected and the Bank obtained judgment). 47 On 10 July 1992, the Bank appointed Receivers and Managers of the property of the first plaintiff. 48 On 11 September 1992, Brownie J dealt with, inter alia, a question of stay of execution. In the judgment delivered on that day he observed [pp2-4]:- The cross-claimant also points to the history of what might for brevity be called the main litigation. The cross-defendants repeatedly breached the orders of the court relating to the orderly preparation of the matter for trial, sought and obtained an adjournment after some four days of hearing, and then when the matter was re-listed, simply abandoned their claim against the defendant. Until then the only defence which had been suggested in respect of the cross-claim was the plaintiff's claim against the defendant, that being relied upon by way of equitable set-off. In the end the cross-defendants took only the two defences that I referred to in my reasons for judgment yesterday. … … … I should perhaps say something of the history of the matter. The plaintiffs obtained an injunction against the defendant restraining the defendant from enforcing its security upon terms that the plaintiffs in effect did what they could to obtain an expedited hearing. The plaintiffs' claim as it was originally formulated was based entirely so far as the quantification of claim was concerned, upon the affidavit of a Mr Greenwood. At the commencement of the hearing I was told that that affidavit would not be read, and that the plaintiffs would only rely upon the evidence of one other witness or perhaps two other witnesses. In the event the trial miscarried and it had to be adjourned. The case was then prepared for trial again and then the plaintiffs simply abandoned their claim. During the course of the first trial, that is to say the trial that was aborted, I was given a very large quantity of paper to read. I must say that having read that paper, whilst in some ways it was a surprise that the plaintiffs abandoned their claim when they did, it was a decision that seemed fundamentally proper because of the clear impression that I had, having read the small mountain of paper I was given to read, was that the plaintiffs' claim was devoid of factual merit. 49 On 7 October 1992, the plaintiffs filed a notice of appeal against the judgment on the cross-claim. The proceedings were resolved between the parties by deed of settlement made on 15 July 1993. 50 I should digress to observe that during the course of the litigation (within a period commencing February 1992 and ending June 1992), the first plaintiff entered into documentation (being directions for payment, a deed and contracts for the sale of goods - Exhibit 2). The documentation purported to dispose of the absolute title and ownership of the fixed assets of the first plaintiff. The purchaser was Preston International Pty Limited. No moneys were paid to the first plaintiff by way of purchase price for the assets. However, directions were given to Preston International Pty Limited for the payment of various sums of money (being costs of the litigation). 51 One of the purposes of this documentation was to ensure that the Bank would not be able to satisfy any judgment for money and costs against the assets of the first plaintiff and that the assets could be later transferred back to the first plaintiff after the damages claim had been concluded (so that it would then be able to resume business). 52 On 17 November 1997, the plaintiffs brought these proceedings against the defendant. The plaintiffs claimed damages on the basis of alleged breach of retainer and breach of duty. The plaintiffs now proceed on an amended statement of claim filed on 9 November 2001. 53 On 22 October 1999 an order was made pursuant to Pt 31 r 2 of the Supreme Court Rules 1970 (the Rules) as follows: That the issues of whether the defendant was retained by the plaintiffs and, if so, whether the defendant breached that retainer be determined by the court in an early separate trial. 54 These issues came before Bell J on 29 January 2002 (and occupied nine hearing days). They were heard in a context in which it not said by the defendants that there was any express verbal instruction to discontinue. Mr Nikolaidis was held to have proceeded on a mistaken assumption that the handwritten instructions gave rise to an implication to that effect. 55 Her Honour handed down her reserved judgment on 3 May 2002. Her judgment contains the following [para 151]:- Pursuant to Pt 31 r 2 of the SCR in answer to the separate question I am satisfied that the plaintiffs have established the following: (i) that the defendant was retained to act for the plaintiffs with respect to their damages claim (ii) that the defendant breached the retainer by instructing counsel to discontinue the damages claim without instructions from the plaintiffs (iii) that the defendant's conduct in instructing counsel to discontinue the damages claim without instructions from the plaintiffs constituted a breach of the duty of care owed by the defendant to the plaintiffs at common law. 56 The hearing of the balance of the proceedings commenced before me on 14 March 2005. It concluded on 30 March 2005. 57 At this stage, I should briefly refer in general terms to the thrust of the case as presented in opening by Mr Alexis SC (who now appears as counsel for the plaintiffs). The provision of the finance was said to be critical to the expansion of the first plaintiff. In opening, use was made of a schedule. It was looked to for the purposes of demonstrating:- … that from about the last week of December 1990 throughout the entire period until the loan was ultimately settled this business was starved of a capital injection which was required by the budget to enable the plaintiff to meet its projected target for accounts. If the bank had advanced the money in accordance with the budget which Mr Sotherns' [sic] addendum plainly recognised the funds provided for under the heading budget should have been provided. Down to Earth therefore would not have operated with a deficit of funds. And as I say that deficit was not ameliorated until 12 April, and Master this is a critical period, this is when the demand for this product was during its absolute peek during the summer months. This is when Down to Earth was proposing to expand in business so that after the passing of the summer demand the business would become self funding which is the central proposition of the budget which I explained to the Court some time ago. Now, what was the effect of all that? Well as the directors say in their evidence they were unable to buy stock. They were unable to place orders for stock so as to service the accounts that had been procured. They had to retrench sales staff which had been employed and whom importantly had been trained. The business was starved of cash at a critical time, and therefore the plaintiff Down to Earth was unable to meet the budget it had provided to the Bank which was, of course, fundamental to the whole proposition of the loan in the first place. [Tr 14.3.05 p 25] 58 The evidence (both oral and documentary) is voluminous. Largely, the written material consists of many bundles of documentation (Exhibits A-G). Without intending to be exhaustive, I shall mention certain of what is contained therein. There are pleadings and proposed pleadings. There are affidavits that were either used or prepared for use in the damages claim (the plaintiffs appear to have prepared three batches of affidavits). There are experts' reports. There are bank records, correspondence and a variety of other documents. There is transcript and judgments delivered in the damages claim. There is part of an affidavit sworn by McDougall QC (as he then was), who was Senior Counsel for the Bank in the damages claim. There is other miscellaneous material. 59 Both sides gave notice for deponents to attend for cross-examination. The deponents relied on by the plaintiffs were available. The defendants placed evidence before the Court showing steps taken to have the deponents relied on by the Bank made available. The effect of that evidence was that when this part of the case was opened only Lombe and Mr Gregorace (Gregorace), the area manager of Barclay's Bank, were available. 60 Counsel for the defendants initially informed the Court that he did not require any of the plaintiffs opponents for cross-examination. Submissions were made at the time which outlined the reasons for that then intended course. 61 When the hearing resumed on the following day, the position of the defendants had changed. Counsel for the defendants then proceeded to cross-examine all of the directors of the first plaintiff, as well as Greenwood and Vella. 62 The cross-examination of Paris and Loel was brief. Both of them had little direct contact with the Bank. Their understanding of what was happening with the Bank largely depended on what they had been told by others. 63 Both Smith and Preston were subjected to lengthy cross-examination. Both presented as having an unreliable recollection of the events that happened so long ago. Both presented as unimpressive witnesses. 64 Initially, Smith gave the impression of being a reasonable witness who was doing his best to recall the events of the distant past and was prepared to make some concessions. As cross-examination continued, a different impression emerged. His capacity to make concessions seemed to diminish and he resorted to volunteering material which may have been thought to advance the case of the plaintiffs. 65 Preston is an experienced business man and an experienced litigator. He has given evidence many times before. He presented as a very careful witness, who often asked for questions to be repeated. He had a tendency to be unresponsive and to give answers that shed little light on the subject matter of the question. He gave evidence that was erroneous. One instance concerned evidence as to matters initially presented as being crucial to the plaintiff's case (a conversation deposed to as having taken place on 8 or 9 December 1990 (which was exposed as being a weekend) with Savins). He gave other evidence that conflicted with what had been said by other witnesses. His evidence conflicted with correspondence that he had written. His correspondence contained allegations that had to have been known to be untrue. 66 Like the other directors, Preston did not take notes of the conversations deposed to in the affidavits. He also said that he could remember the contents of conversations that happened 15 years ago. 67 I digress to say that during the hearing of the cross-claim by Brownie J, Preston was cross-examined. In his judgment, his Honour made the following observations:- The evidence of Mr Preston stands alone, contrary to all the other evidence in the case; and Mr Preston did not fare at all well in cross-examination. [10 September 1992, p12] 68 It should be observed, that his Honour was then dealing only with evidence given in respect to the cross-claim on the question of "the interest rate agreed upon". This was not a question of relevance to the present proceedings. Be that as it may, his Honour would have had these views in mind when assessing evidence given by Preston in the damages claim. 69 Greenwood gave evidence of, inter alia, detailed conversations of which he had not taken any notes. It may seem surprising that even in 1991 and 1992 he could have had such detailed recollection. Bell J observed that "Mr Greenwood's recollection of more than one matter was faulty. He accepted as much". She did not take this to be the product of a deliberate attempt to mislead. 70 Vella had been qualified at short notice to give expert opinion in an endeavour to support the plaintiff's damages claim. What he did was founded on false assumption. At best, it could be said that his material had but limited probative value. It has been conceded that his evidence as to loss was unsupportable. 71 One of the problems with his initial report was that it was prepared on a basis that was not the subject of the case being presented by the plaintiff. It erroneously proceeded on the basis that agreement had been reached with the Bank in early December 1990 and that such agreement was to be completed by 31 December 1990. His examination proceeded on the basis that there had been breach of the terms of that agreement. 72 One of the problems with his further report was that it proceeded on an entirely different basis. He had received a change of instructions (he was asked to proceed on the basis that funding should have been commenced in December 1990). 73 Lombe was cross-examined on behalf of the plaintiffs. He had played a number of roles. Initially, he had been engaged to investigate the financial position of the first plaintiff. He was then engaged by the solicitors for the Bank to provide expert material for use in the trial of the damages claim. Later, he became one of the receivers when the first plaintiff went into receivership. 74 He was an impressive witness. He was not seriously challenged in cross-examination. It has not been said that his evidence should not be accepted. 75 As a result of his investigation, he came to the conclusion that the first plaintiff was insolvent by April 1991 and that its financial position got worse thereafter. 76 He came to the view that his investigation and other involvement was being frustrated by the first plaintiff. In particular, he was of the view that material that was regarded as being detrimental was being concealed from him and his staff. 77 Generally speaking, he was of the view that the failure of the business was due to management inefficiency and an overly-ambitious budget. 78 He considered that the management lacked financial acumen and was unable to undertake the delicate adjustment that was required in the circumstances. In his view, these problems led to the first plaintiff not being reactive to the circumstances with which it was confronted. 79 The Court was told that the plaintiffs had elected not to cross-examine McDougall J, Williams, Wright, or Hall. 80 Savins and Gregorace were cross-examined. During the course of the hearing, Savins was located in New Zealand. The defendants were unsuccessful in their attempts to serve a subpoena on Chandler. 81 Largely, the evidence of Savins is not the subject of any criticism by the plaintiffs. Indeed, the plaintiffs have looked to it for support of their case. They see it as providing, inter alia, corroboration of evidence given by Greenwood. 82 For reasons already mentioned, there is no real need to address any question of conflict between the respective evidence of Greenwood and Savins. Whilst the respective versions of the conversations given by Greenwood and Savins have similarity, differences remain. It would suffice to proceed on the assumption that the Greenwood version had been accepted. However, for completeness, it can be added that where there is conflict, Savins is to be preferred. 83 The evidence of Gregorace lost significance in the light of the submissions that were made. 84 It is not surprising that Savins now has but limited recollection of what took place so long ago. Largely, he relied on documentation to refresh his recollection. He was generous in the concessions that he made. Where he had no recollection of a matter, he was generally prepared to make a concession as to what may have been said. However, there were instances in which he firmly stood his ground. 85 His evidence requires careful evaluation. It may be that if he had given evidence on these matters in 1992 (when his recollection could have been expected to be relatively fresh), what he may have said might have been somewhat different and less favourable to the plaintiffs. But for the discontinuance, it may be that he would have sworn a further affidavit (by reason of the June 1992 batch of affidavits). 86 He did disagree with evidence given by Preston. What he said on those matters (which was firmly expressed) was preferable to the conflicting evidence given by Preston. Indeed, he presented as an honest and reliable witness. 87 I now turn to what has been regarded as the law applicable to the exercise to be performed by the Court. 88 The Court has been referred to a number of decided cases (Kitchen v Royal Air Force Association [1958] 1 WLR 563; Johnson v Perez (1988) 166 CLR 351; Phillips v Bisley (BC9700720, unreported, NSWCA 18.3.97); Felleti v Kontoulas [2000] NSWCA 59 and Sellars v Adelaide Petroleum NL (1994) 179 CLR 332). Largely, the parties were not in disagreement as to what had been established by these cases. However, the parties and the Court were confronted with circumstances that do not seem to be the subject of past litigation. 89 The authorities demonstrate that what the court should do is place itself in the position of the judicial officer conducting the notional trial. It has been said that it may be that there has to be a trial within a trial (Johnson p 371). Largely, that took place in this case. 90 The authorities further demonstrate that evidence of events occurring since the discontinuance may be relevant in a number of ways (see Johnson pp 368-369). 91 Whether the plaintiffs' present claim is looked at as being founded in contract or tort may be of little significance (save for an entitlement to nominal damages for breach of contract). It was not a matter that excited submission. 92 The breach found by Bell J took place at a time when the plaintiffs and the Bank were involved in a trial before Brownie J. The proceedings were discontinued when they were part heard. Damages are claimed in respect of that breach. It was common ground that the time of the discontinuance was the relevant time for the crystallisation of loss and that damages are to be assessed at that time (Johnson at pp 366-368). 93 In this case, what the plaintiffs claim to have lost was the opportunity to continue with the trial and either recover a judgment or reach a compromise. What is in dispute constitutes a multitude of issues. They fall into two categories. The first category to be dealt with by the court may be described as concerning causation. The second category (which is dependant on the causation findings) concerns any assessment of damages that may be required. The court has taken the approach that the causation issues should be first determined. 94 The circumstances of this case present a unique situation. The Court does not have to treat the evidence before it as being purely notional. There was an actual trial on foot. It had proceeded to a fifth day of hearing. It was the discontinuance that deprived the plaintiffs of the opportunity of either a full trial before Brownie J or the reaching of a compromise at a later stage in the proceedings. It seems to be common ground that the concept of a notional trial is only relevant to what may have happened but for the discontinuance. 95 Also, it seems to be common ground that the task now before the Court is to do the best that it can to determine whether or not the causes of action that would have been propounded by the plaintiffs in the notional trial that may have continued before Brownie J would have yielded a judgment or a settlement (and if so, how much would have been received). 96 It has been observed that in some cases, it will be clear that the plaintiffs/clients must succeed. In other cases, it will be clear that they cannot succeed. There will be a remaining category of cases where the position is less certain. In those cases, the task is to assess whether there has been a loss of some right of value and an assessment is made as to degree of probability. It is in this category that the plaintiffs say that the damages claim fails. 97 The plaintiffs bear the onus of satisfying the court that there has been loss and of its value. The balance of probabilities test only applies to events that have occurred. In respect of such events, damages are assessed on an all or nothing approach. 98 I should mention that, at the commencement of the hearing, there was some disagreement as to the approach to be taken by this Court in dealing with the notional trial. The plaintiffs then espoused the view that what the Court had to do was to take what has been described as a broad brush approach. By the time counsel for the plaintiffs came to make his submissions, this approach appeared to have been abandoned. Presumably, this was because of the nature of the notional trial that had by then taken place. 99 Before approaching the task set for this Court, it needs to be observed that what may have happened but for the discontinuance in 1992 is beset with what could be described as imponderables. They are numerous. 100 There are imponderables as to, inter alia, who may have appeared for the plaintiffs, what the pleadings may have been, what further evidence may have been tendered by the parties, as to what part thereof may have been admitted and what case may have been the subject of final submissions. Whatever may have been received by Brownie J could have been expected to throw up issues of fact. There would be issues inter alia as to the alleged contract and as to the alleged representations (involving conflicting versions of conversations). Findings of fact had to be made (involving questions of the credibility and reliability of witnesses) when the memories of the witnesses could have been expected to be still relatively fresh. The trial judge then had to make his assessment of the facts as found and apply the then relevant legal principles. 101 I shall first look at the questions of what may have been the pleadings relied on in the notional trial and what case may have been presented therein on behalf of the plaintiffs. 102 The presentation of the plaintiffs' case in both what happened before Brownie J and in the notional trial underwent a number of reformulations. The defendants have stressed the shifting nature of the case. 103 The first formulation of the damages claim appeared in the original statement of claim which was filed on 15 August 1991. Then there were two reformulations before Brownie J (each of which took place shortly before a fixed hearing date). An amended statement of claim was filed on 30 March 1992 (which was the first hearing day). What it propounded was inconsistent with its predecessor (inter alia the alleged representations are significantly different). There is inconsistency between the pleaded contract and the alleged representation. Then there was the further amended statement of claim which had been prepared shortly before 9 June 1992. 104 Although there has been no further amendment to the pleadings, the presentation of the case itself during the trial within a trial has seen further reformulation. I have already referred to what was said during the opening of the case. What had been said then appeared to have been abandoned by the time submissions came to be made. 105 I shall now look at what was ultimately argued on behalf of the plaintiffs in the submissions made in these proceedings. It was said by counsel to be a case that may not have been expressed with absolute clarity in the pleadings. What had been opened may be described as a starved-of-funds claim (it had a presentation of liabilities not being incurred because of the failure of the Bank to provide funds in accordance with representations). What was put in submissions was a claim for loss based upon the incurring of liabilities (it had a presentation that liabilities would not have been incurred if it had been known that funds were not to be advanced in accordance with representations). 106 Whilst the claim for breach of contract was not actually abandoned, it could not be said that it was really pressed. The focus of the submissions became the representations claim. A hopeless duty to inform case was not pursued. 107 It should be noted that this presentation was a substantial departure from the stance taken in 1992. During the actual trial before Brownie J, the concentration was on the breach of contract claim. It was the only aspect of the claim in respect of which the plaintiffs had given particulars. The reason for the concentration seems to be that it was seen as a very large claim. It had been hoped that the evidence of either Greenwood or Vella would have supported a large claim for loss of profits (Vella had it in the order of $4.9m). It would seem that the representations claim may have been seen as being small in the scheme of things and was given at least lesser importance. Mr Grieve appears to have regarded it as being limited and not embracing any claim for loss of profit. 108 In the course of what has taken place before me, the weaknesses of the breach of contract claim were cruelly exposed. It was conceded that significant damage had been done to it, that it suffered a number of evidentiary difficulties and that on the balance of probabilities it may have failed. Upon the making of some of those concessions, counsel for the plaintiffs moved to what was said to be the related topic of the loss of a valuable settlement opportunity (which was said to have both claims in mind). 109 In reality, apart from the question of the loss of settlement opportunity, all that the plaintiffs were then left with was a not very large representations claim (the quantification of which had been gutted by a further concession concerning the recovery of expectation loss). It is a claim that could have been pursued in the District Court. 110 The plaintiffs have proceeded on the basis that the amended statement of claim (and not the proposed further amended statement of claim which had been prepared shortly prior to the discontinuance) would have continued to be relied on in the notional part of the trial. 111 In both documents, the allegations concerning the representation claim were significantly the same. It was conceded that the breach of contract allegations made in the further amended statement of claim "sought to change the contractual landscape quite dramatically" (it pleaded a contract made on 28 November 1990 which was varied and novated on or about 8 December 1990) and could not be supported by the evidence. This pleading was referred to as becoming completely academic. 112 No application to rely on the further amended statement of claim had been made before Brownie J. No evidence was led concerning intention to rely on it. Indeed, Preston, during cross-examination described it as "a surprise document" and he said that "I don't think we ever saw this document". In the circumstances, it seemed likely that the document may have been prepared by counsel without instructions from the plaintiffs. 113 Before proceeding further, I should observe that what was put in submissions on behalf of the plaintiffs in the notional trial would probably not have been the case propounded in 1992. The history of the damages claim suggests that the course it took rather depended on who held the brief at the relevant time. 114 The pleadings were amended after the briefing of Mr Palmer. Mr Grieve held the brief on 9 June 1992. He had taken a different approach to his predecessor. The defendants have posed the question of whether he would have continued in the case thereafter. Whilst it may come as a matter of surprise, he did continue to appear in the actual trial after the discontinuance and defend the cross-claim (there was no change in legal representation). If he had continued to appear in the notional trial, it does not seem possible that he would have presented a case such as that which was either initially or ultimately put in submissions by Mr Alexis. It appears that Mr Grieve saw problems (in addition to those concerned with illegality) with that part of the damages claim that was founded on breach of contract. Following his retention, the plaintiffs prepared further affidavits (sworn in June 1992) and the proposed further amended statement of claim. It seems that he had in mind mounting a case of the nature propounded in those documents. Mr Grieve seems to have had little regard for the representations claim. No particulars of that claim had by then been provided. If he had remained in the matter, what his instructions may have been is another imponderable. If Mr Grieve had not continued in the case, it is a further imponderable as to who may have succeeded him at that time and what advice may have been given to the plaintiffs by the successor. The arrival of Mr Alexis upon the scene did not come to pass until many years later. 115 If the case ultimately put by Mr Alexis had been sought to be argued in 1992, it could be expected that there may have been objection to its presentation and that the trial judge may not have allowed such a case to be propounded. It may be added that at the time of the discontinuance there was a real prospect that any attempt to rely on material from Vella may have been rejected. If that had happened, what the plaintiffs may have done in these circumstances is another imponderable. One possibility is that the damages claim may have collapsed (whether or not the Vella material was admitted) and then been dismissed. 116 Before moving on to other matters, I should observe that Brownie J is still sitting in an acting capacity and may have been available to hear this matter. The prospect of approaching him to do so was not embraced by the parties. 117 I shall now look at the damages claim, making the assumption that the case ultimately put by Mr Alexis may have been run during 1992. 118 The thrust of the representations claim (which was said to be a s42 claim) was largely directed to the conversations had between Greenwood and Savins. The plaintiffs look to what they say was said by Savins and allege that he has been the maker of the representations which they say gave rise to misleading or deceptive conduct. It is contended that this was founded on admissions made by him in the witness box. The plaintiffs relied on s41 of the Act. They said that Savins did not have reasonable grounds for making the representations and that the onus was on him to establish that he had reasonable grounds. 119 It is not necessary to fully set out the details of the various representations pleaded in the amended statement of claim. Certain of them have already been mentioned. Certain of them either lacked or lost significance or were abandoned. Certain of them were contradictory. Certain of them were predicated on loan approval. 120 In reality, what was left to be pressed were representations that the money would be available by Christmas or by the end of December 1990. Whilst it could be thought that the latter might be regarded as having superseded the former, it is convenient to move on to other problems besetting the representations claim. 121 It can be observed that there is discrepancy between what has been pleaded and what was adduced in evidence. However, this is merely one of the many problems that do not need to be explored. It suffices to concentrate inter alia on the evidence and its deficiencies. 122 In the initial submissions, what was relied upon was said to fall within a period up to 10 January 1991 (when the letter of offer was made). The view was presented that the acceptance of the letter of offer brought about the state of affairs where the parties had entered into a contract (subject to, inter alia, a valuation). 123 During submissions in reply, counsel for the plaintiffs said:- I then seek to criticise my friend's approach: they have sought to dress it up in a technical analytical approach and they ignore the fact that misleading and deceptive conduct needs to be in a context and not a continuing context and importantly in this case the fundamental misleading conduct occurred during a very narrow window after 4 December when Mr Savins prepared his submission and the time of the drawing down of the overdraft facility on 13 December. That is the critical time. That was the time when the representations, which Mr Savins accepts, were made - that the entire transaction would be settled by Christmas. [Tr 30.3.05 p 442] 124 The claim for loss based upon the incurring of liabilities was said to be disclosed by the bank statements. The bank statements show that until 13 December 1990, the first plaintiff was trading within its credit limitations (it operated its ANZ account in credit). On 13 December 1990, it commenced to use the facility opened with the Bank. It is said that between that date and 10 January 1991, the first plaintiff expended about $250k in incurring liabilities (being about $300k less the $50k repayment of Preston's shareholder loan). 125 This sum of $250k is said to be the loss suffered. In further explanation of why this was so, counsel for the plaintiff said:- So when [one] seeks to identify whether any benefit was received which would normally, in the assessment of damages, be brought to account the evidence establishes that there was no benefit because of the company's technical insolvency. [Tr 29.3.05 p 416] 126 As earlier mentioned, there was also an abandonment of a major part of what had been claimed as damages. Counsel for the plaintiff conceded that:- The evidence does not enable me to put a submission that the plaintiffs would be entitled to an expectation loss because, as I say, there is an absence of and would have been an absence of evidence that a suitable banker was able to fund the expenditure of this business. With what the High Court said in Gates in mind, I demonstrate the reliance loss that would have been available to the plaintiffs in 1992 was. Our submission is that the expenditure which was defrayed on overdraft from 13 December to 10 January would not have been incurred but for the misleading conduct of Mr Savins and we rely upon the evidence of each of the directors that I took the court through prior to lunch. That follows because if it was not for the provision of that overdraft facility Down To Earth would have no means with which to incur those liabilities and no means to try and achieve its performance criteria. The short result would have been that the expansion pursuant to the budget would not have occurred simply because it could not have occurred. [Tr 29.3.05 p 414] 127 It is said that the representations claim had a high prospect of success and was quantifiable in the order of $250k. It is further said that because of the way in which the notional trial was conducted (there had been a detailed hearing), there was "not a lot of room for the role of estimating the value of probability and possibility" [Tr 29.3.05 p416]. 128 In assessing the evidence, what is of particular significance is the tenor of what is said to be the communication that took place between Greenwood and Savins and the context in which it took place. It leads inevitably to a conclusion that the evidence would have failed to establish that representations as alleged were in fact made. 129 Until 10 January 1991, the parties were engaged in the processes involved in the seeking of approval for a loan. The plaintiffs knew that approval was a prerequisite to the advancing of funds by the Bank. It was a period during which circumstances kept changing. Financial accommodation was being provided from time to time to meet what were being presented as pressing needs. As time passed, earlier conversation was overtaken by what subsequently happened. 130 Save for the initial meeting, largely what was understood by the other directors at various times depended on what was relayed to them by Greenwood. 131 Greenwood was an experienced chartered accountant. He was experienced in dealing with banks. He was familiar with what had to be done to effect the lending process. He had the conduct of the negotiations with the Bank. 132 Savins was a young and inexperienced bank officer. He was eager and enthusiastic in the cause of promptly bringing about this loan and perhaps a new source of business for the Bank. Whilst he did not know with any certainty what might be approved by the Bank, he had an optimistic approach to the obtaining of approval. He had been told by Greenwood that the plaintiffs wanted to settle the loan by 31 December 1990. That was the aim both had in mind. He was doing his best to bring that about, but the matter of approval was out of his control. 133 Savins was feeling "sick in the stomach" by the end of December 1990 (settlement by 31 December 1990 had been missed). He was of the understanding that the funds were required for the viability of the business. 134 There was a frank and cordial relationship between Greenwood and Savins. During December 1990, the contact was almost on a daily basis. Savins was keeping Greenwood fully informed. Greenwood was well aware that Savins was not in a position to give approval or make decisions. The decisions had to be made by the regional lending manager ("upstairs"). In effect, Savins could be described as acting as a go-between. Greenwood was stressing urgency and on his evidence Savins was presenting as pushing hard to achieve the aim of settlement by 31 December 1990. 135 In an affidavit sworn on 24 March 1992, Greenwood deposed to the following:- 5. From around 5th December, 1990 on each working day I had a conversation with Savins up until the week before Christmas in words to the following effect:- Greenwood: "Have you got an answer? Are we still going to settle this before Christmas?" Savins: "No, I don't have an answer. It is still with the regional lending manager. I am pushing it through and will try and get it through before Christmas." 6. From approximately the week before Christmas up until the end of December, 1990 I had a conversation with Savins on each working day in words to the following effect:- Greenwood: "When are we going to get an answer? We have got to settle this loan - the company is bleeding. We can't meet any performance criteria without the money." Savins: "I am trying my best. At least we should be able to get it done by the 31st December." 136 The paragraphs illustrate the tenor of what passed between them. Savins was not making promises. What is attributed to Savins can be categorised as being no more than an expression of his expectation of what may happen and Greenwood did not appear to see it as being otherwise. Greenwood was pressing Savins to get action from "upstairs". He knew that approval and the time of settlement would be determined by Savins' superiors. 137 The conversations cannot be isolated from what else was happening in relation to the application. The approval to proceed to valuation did not come to pass until 18 December 1990. The conversations between Greenwood and Savins took place in a context where there were contemporaneous matters relevant to approval and settlement (inter alia, the change of borrower, the valuation and the execution of documentation). 138 Although the settlement date for which Greenwood and Savins were aiming had passed, the plaintiffs persisted with their application (the parties continued to seek a resolution of the impasse concerning the change of borrower) and accepted the loan offer made on 10 January. 139 For present purposes, to the extent that they were ultimately pressed, the representations allegedly made by Savins to Preston can be dealt with on a separate basis. In submissions, they were said not to be fundamental to the representations claim and the plaintiffs seem to have adopted the position of relying on Greenwood's evidence. 140 This part of the case could have been effectively disposed of on credibility considerations. The evidence of Savins was firm on these matters. Leaving aside the first meeting, he did not have a conversation with Preston until 18 December 1990. What was presented as being said by Preston in respect of each of the alleged representations was also improbable for a number of reasons. On these bases alone, it would not have been found to have been made out. 141 The representations claim was doomed to failure at this threshold stage. But that was merely one of the obstacles that confronted its prospects of success. 142 Even if it be assumed that what was said by Savins could be regarded as representation in the relevant sense, it is certain that the plaintiffs would have failed to establish reliance. It would not have been found that there was reliance on what was allegedly said by Savins. 143 Whether or not reliance was established, it is certain that the plaintiffs would have failed to establish any loss attributable to the alleged representations. 144 In presenting submissions on this part of the case, counsel for the plaintiffs failed to embark on any detailed analysis which related, inter alia, any particular representation to any part of the alleged loss. The alleged loss was presented in the most broad brush fashion. Counsel did no more than identify withdrawals from the first plaintiff's account with the Bank. No attempt was made to relate any particular withdrawal to the incurring of any particular liability. Further, it was not demonstrated that the incurring of any particular liability brought about loss. 145 It is certain that the plaintiffs would have failed to establish that Savins was engaged in misleading or deceptive conduct. Whilst Savins did make concessions during cross-examination, such evidence did not advance the case for the plaintiffs. It should also be said that during his cross-examination it was never put to Savins that what he had said was misleading or deceptive. 146 Accordingly, it is clear that if such a representations claim was run in 1992, it was hopeless and certain to fail. 147 It seemed to be accepted that the breach of contract claim was confronted by insuperable problems and was largely abandoned. The Court had to be satisfied that the written agreement made on 11 January 1991 contained an implied term to lend the funds by 31 January 1991 and that there was breach of that term. The contract that arose from the acceptance of the letter of offer was subject to the terms and conditions contained in the letter of offer. There were matters that had to be attended to before settlement could take place. There was a requirement of monthly audited accounts. It was dependent on the due execution of the requisite documentation. There had to be a satisfactory valuation. 148 The implication of the alleged implied term would be an impossible task. Proof of breach fell into the same category. 149 The valuation was not obtained until 4 February 1991. It saw the reduction of the loan to $930k. Audited reports were not provided in accordance with the terms and conditions. The documentation was not executed until 27 March 1991. 150 Leaving those matters aside, there were other problems. There were the delays arising from the change of borrower and the debate as to documentation. 151 What was brought about by the change of borrower created a further problem (one of privity of contract). The alleged loss is presented as having been suffered by the first plaintiff (whereas the second plaintiff is the relevant contracting party). 152 In addition to these problems, it was accepted that the plaintiffs had evidentiary problems in establishing causation (it depended on the unsupportable evidence from Vella). It was certain to fail also on this issue. 153 For a variety of reasons, the breach of contract claim was doomed to failure. 154 The first plaintiff also says that, leaving aside what has been earlier said, the discontinuance saw them lose a valuable settlement opportunity. 155 However it was formulated, the plaintiffs' case had obvious problems. This was highlighted by the many reformulations and the evidentiary deficiencies (including problems with experts). The Bank took a firm stance on the matter of compromise. The attitude of its counsel to the plaintiffs' case was not likely to encourage settlement. The plaintiffs displayed no willingness to compromise. 156 The contention advanced by the plaintiffs was confronted by evidentiary problems. Firstly, there is the deficiency in the evidence offered by the plaintiffs themselves. Secondly, there is the powerful evidence relied on by the defendants. 157 A bank officer (Mr Thomas) had told Preston at an early stage that the Bank would not negotiate at all. There is the evidence of McDougall J to the effect that it was his view that the damages claim was "at best very weak" (it may be that he largely had in mind the breach of contract claim). 158 There is evidence from Mr Wright (the solicitor acting for the Bank) that between February 1992 and June 1992 the Bank took the position that it was not prepared to compromise its claim or give any value to the damages claim. He further said that he did not receive any intimation from the Bank that it may be willing to accept less than the full amount of its claim together with costs until 16 February 1993. 159 The evidence before Bell J (including the instruction to offer $nil) reveals that, at the time of the discontinuance, the plaintiffs were not then prepared to make an offer of settlement (see paragraph 29 of Bell J's judgment). This stance was taken in the context of the firm advice then being given by Mr Grieve and the earlier advice given by Mr Palmer (see paragraphs 65 and 143 of that judgment). There is no evidence of the making of any offer prior to the discontinuance. There is no evidence to suggest that any offer was likely to have been made during a notional trial. 160 The evidence shows that the parties had taken entrenched positions and the possibility of compromise whilst the nominal trial was on foot can be described as unrealistic or illusory. The loss of any opportunity in those circumstances was valueless. 161 It seems that movement from those entrenched positions did not take place until after the bringing of the appeal and relatively shortly prior to the execution of the deed of settlement. Accordingly, the discontinuance could not be said to have deprived the plaintiffs of a valuable opportunity to compromise the damages claim. 162 Before leaving this question, I should briefly refer to one other matter that was raised during argument. 163 It concerned the deed of settlement, effected on 15 July 1993. It followed the bringing of a notice of appeal against the decision of Brownie J on the Bank's claim (which was filed on 7 October 1992). Largely, the grounds of appeal threw up questions concerning the matters of illegality. 164 The deed of settlement has minimal (if any) bearing on the question of potential compromise of the damages claim during the notional trial. It came to be at a time when the Bank was still to get the benefits from its remedies and after other circumstances had intruded upon the matter (see, inter alia, the recitals). The other circumstances appear to have been the significant factors in bringing about the settlement. 165 I shall mention some of those circumstances. It was being asserted that a lease existed over the security (in favour of Preston International Pty Limited) and that there was an entitlement to relief by way of damages and other orders against the Bank and the Receivers. It was being asserted that the mortgage was affected by a breach of trust (proceedings were on foot in the Equity Division). In substance, the Bank was being faced with new challenges to its position. 166 Defamation proceedings had been commenced by the Receivers against Preston. He was being faced with fresh problems. 167 A part of the claim for damages propounded by the plaintiffs in these proceedings was an allegation of loss of opportunity of obtaining a costs order in their favour during the notional trial. Although, in the light of what has been earlier said concerning the damages claim and its prospects of success during the notional trial, it is probably unnecessary to address this question. Further, the history of the actual trial presented a picture of plaintiffs in a state of unreadiness to proceed and of the Bank appearing to be well-prepared and ready to proceed. In such circumstances, there was no real prospect of obtaining an order for costs. However, for completeness, I should make some brief additional observations concerning it. 168 The case that was opened on behalf of the plaintiffs was that they had incurred and paid legal costs and disbursements up to 5 June 1992. During the cross-examination of Preston, it was said that the plaintiffs were not seeking to recover "on a dollar for dollar basis" the amount of costs and disbursements. 169 A major problem confronting this part of the damages claim (in addition to what has already been said) was the lack of satisfactory evidence adduced to support it. Largely, it relied on unsatisfactory documentation (Exhibit E) and unsatisfactory evidence from Preston. Exhibit E is a bundle of documents comprising copy memoranda of fees and other invoices. The documents contain material that relates to matters other than the damages claim. There is duplication. Certain of the material was directed to an entity other than any of the plaintiffs. It appeared that Preston had not looked at his records. 170 Leaving aside the problems thrown up by this material (and I have only mentioned some of them), there was the lack of evidence of payment by any of the plaintiffs of the costs disclosed in the documentation. If any payment was in fact made, it would seem that it was made by either Preston or Preston International Pty Limited, (the latter making payments as part of an assets stripping scheme to ensure that the first plaintiff would not have assets against which the Bank could satisfy any judgment obtained against the plaintiffs). 171 Whilst these matters of themselves would have defeated any such head of damages, as already said, there were no real prospects of the plaintiffs obtaining an order for costs against the Bank in the notional trial. 172 Save for the question of any nominal damages payable in respect of breach of contract, the plaintiffs have failed to discharge the onus of proof borne by them in these proceedings. This question of nominal damages is a matter upon which counsel have not addressed. 173 Counsel may wish to address on that matter as well as on questions of costs. 174 I will hear any submissions which the parties may wish to make on those questions. If no further submissions are to be made, the parties are to bring in short minutes. The matter may be re-listed by arrangement with my Associate. The exhibits may be returned. **********

Down to Earth Spring Water Pty Limited & Ors v Nikolaidis

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Cases Cited (3)