DAMAGES – ASSESSMENT OF DAMAGES IN TORT – PROPERTY LOSS –
HEADS OF LOSS – POTENTIAL EVENTS AND LOSS OF CHANCE
OR OPPORTUNITY –
GENERALLY – where the plaintiff owned land which she proposed to subdivide
Source
Original judgment source is linked above.
Catchwords
DAMAGES – ASSESSMENT OF DAMAGES IN TORT – PROPERTY LOSS –HEADS OF LOSS – POTENTIAL EVENTS AND LOSS OF CHANCEOR OPPORTUNITY –GENERALLY – where the plaintiff owned land which she proposed to subdivideand sell for a profit –where the third defendant was a qualified townplanner – where the plaintiff relied upon the third defendant’sadvicethat the land could be successfully subdivided – where theplaintiff applied for a development approval to subdivide the land– wherethe development approval was granted – where the plaintiff incurred costsin lodging the development applicationand undertaking works on the land incompliance with the development approval conditions – where thedevelopment approval wassubsequently revoked on the basis that the proposedsubdivision was inconsistent with government regulations – where theplaintiffclaims that the third defendant’s advice was negligent –
where default judgment has been entered against the third defendant
–
where the plaintiff claims from the third defendant damages for direct losses
incurred in relation to making the development
application and complying with
the conditions of the development approval – where the plaintiff further
claims from the third
defendant damages for a loss of opportunity to profit from
an alternate business venture – where the first defendant is deregistered
and the proceeding not progressed against it – where the plaintiff and the
second defendant reached a settlement – where
the Court is asked to assess
damages against the third defendant – whether damages for direct losses
should be awarded and
in what amount – whether damages for loss of
opportunity should be awarded and in what amount – whether the award of
damages should be adjusted to account for taxation – whether the
settlement payment from the second defendant should be deducted
from any award
of damages against the third defendant
Civil Liability Act 2003 (Qld),
s. 11
Uniform Civil Procedure Rules 1999 (Qld), r. 509(1)
Chapman v
Hearse [1961] HCA 46
(1961) 106 CLR 112, followed
Haines v Bendall [1991] HCA 15
(1991) 172
CLR 60, applied
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638,
applied
Robert v Collier’s Bulk Liquid Transport Pty Ltd [1959] VicRp 48
[1959]
VR 280, cited
Sellars v Adelaide Petroleum NL
Poseidon Limited v Adelaide Petroleum
NL (1994) 179 CLR 332, applied
Judgment (53 paragraphs)
[1]
DAMAGES - ASSESSMENT OF DAMAGES IN TORT - PROPERTY LOSS - HEADS OF LOSS - POTENTIAL EVENTS AND LOSS OF CHANCE OR OPPORTUNITY - GENERALLY - where the plaintiff owned land which she proposed to subdivide and sell for a profit - where the third defendant was a qualified town planner - where the plaintiff relied upon the third defendant's advice that the land could be successfully subdivided - where the plaintiff applied for a development approval to subdivide the land - where the development approval was granted - where the plaintiff incurred costs in lodging the development application and undertaking works on the land in compliance with the development approval conditions - where the development approval was subsequently revoked on the basis that the proposed subdivision was inconsistent with government regulations - where the plaintiff claims that the third defendant's advice was negligent - where default judgment has been entered against the third defendant - where the plaintiff claims from the third defendant damages for direct losses incurred in relation to making the development application and complying with the conditions of the development approval - where the plaintiff further claims from the third defendant damages for a loss of opportunity to profit from an alternate business venture - where the first defendant is deregistered and the proceeding not progressed against it - where the plaintiff and the second defendant reached a settlement - where the Court is asked to assess damages against the third defendant - whether damages for direct losses should be awarded and in what amount - whether damages for loss of opportunity should be awarded and in what amount - whether the award of damages should be adjusted to account for taxation - whether the settlement payment from the second defendant should be deducted from any award of damages against the third defendant
Sellars v Adelaide Petroleum NL; Poseidon Limited v Adelaide Petroleum NL(1994) 179 CLR 332, applied
[9]
[1] This decision concerns an assessment of damages in a proceeding commenced by claim in April 2020 against three defendants. At the time the proceeding came on for hearing of the assessment of damages in June 2025:
[10]
(a) the first defendant, a company, had been deregistered and the proceeding against it had ceased;
(b) a settlement had been reached between the plaintiff and the second defendant with a settlement sum paid;
(c) default judgment had been entered in favour of the plaintiff against the third defendant in January 2021, that judgment being conditional on damages being assessed.
[11]
[2] For the reasons that follow, judgment is entered for the plaintiff against the third defendant for damages assessed in the amount of $306,854.20, plus interest and costs.
[12]
[3] The plaintiff owned land in the Gold Coast Local Government area. In 2016, she engaged the first defendant, a town planning firm, to give her town planning advice in relation to a proposed subdivision of the land into two lots. She intended to sell one or both of the subdivided lots for profit.
[4] The third defendant was a qualified town planner who was authorised to, and did, deal with the plaintiff on behalf of the first defendant. In December 2016, the third defendant advised the plaintiff that, "I have had a look over your property and you can certainly subdivide into two lots",[1] and that "a proposal for a two lot subdivision looks consistent with the Gold Coast Council City Plan".[2]
[5] Acting on that advice, the plaintiff made a development application in February 2017 to the second defendant (the relevant local authority) for approval to subdivide the land.
[6] In July 2017, the second defendant issued a decision notice approving the proposed subdivision of the land, subject to certain conditions requiring work to be undertaken on the land. The plaintiff undertook work on the land in compliance with the development approval conditions.
[7] In April 2019, the second defendant advised the plaintiff that the decision notice issued was invalid. The subdivision was contrary to certain regulatory provisions and consequently the second defendant was required to refuse the development application under the Sustainable Planning Act2009 (Qld).
[8] As a result, the plaintiff could not and did not proceed further with the proposed subdivision of the land.
[9] On 15 August 2019, the plaintiff sold the land for $800,000.
[10] In April 2020, by way of claim, the plaintiff commenced the proceeding against the defendants. Of the three defendants, only the second defendant has filed a notice of intention to defend and defence.
[11] On 15 January 2021, the plaintiff filed a request for default judgment against the third defendant. Default judgment was entered against the third defendant on 20 January 2021 with damages to be assessed.
[13]
(a) $693,674.32 as against the first and third defendants;
(b) $678,169.03 as against the second defendant.
[14]
[13] The losses claimed against the first and third defendants and the losses claimed against the second defendant were identical, save for $15,505.29 in costs that the plaintiff had incurred preparing the development application, which had been incurred prior to the second defendant approving that application (and so did not form part of the damages claimed against the second defendant). This $15,505.29 accounts for the difference in damages sought in [12(a)] and [12(b)] above.
[14] On 10 March 2023, the plaintiff reached a settlement with the second defendant for $191,428.77 plus costs.
[15] The assessment of damages in respect of the default judgment against the third defendant was listed for hearing on 9 June 2025.
[16] Consistent with r. 509(1) of the Uniform Civil Procedure Rules 1999 (Qld), orders had been made by the Court directing the parties to file and serve material ahead of that hearing. In accordance with those orders, the plaintiff filed and served her material. The third defendant did not respond, provide any material of his own, or otherwise indicate any intention to participate in the proceeding. He was appropriately served with notice of the hearing. He was called at the commencement of the hearing and did not appear. Accordingly, the hearing proceeded in the absence of the third defendant.
[15]
[17] The plaintiff claims in damages against the third defendant two categories of losses:
[16]
(a) the costs incurred in obtaining the development approval and carrying out conditions of the development approval, pleaded as $102,524.32 but by final submissions revised to $98,243.65;
(b) the lost profits that would have been made by the plaintiff on another business opportunity had she been properly advised that the land could not be subdivided, pleaded as $591,150.00 but by final submissions revised to $505,761.66.
[17]
[18] On an assessment of damages, loss must be proven, and the plaintiff correctly accepts that the causative link between the loss suffered and the liability for which there was judgment must be established.[4] The principle which governs an assessment of damages that are compensatory in nature in tort (as is the case here) is that "the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if ... the tort had not been committed".[5]
[18]
[19] This category of loss concerns actual costs incurred by the plaintiff in obtaining the development approval and undertaking the works required to comply with conditions of the development approval.
[20] Details of the costs incurred and works undertaken are set out in an affidavit sworn by the plaintiff on 2 May 2025. The claimed total is $98,243.65. All of the costs and works had been incurred and undertaken by early 2019, prior to the second defendant withdrawing the development approval.[6]
[21] I accept that in accordance with the statement of claim and the plaintiff's affidavit that such costs and works were properly and reasonably associated with making the development application, complying with council information requests necessary to obtain development approval and complying with conditions of the development approval. I accept that had the third defendant not mistakenly advised the plaintiff that the land could be subdivided, those costs would not have been incurred except that insofar as the invoice for the first defendant's professional fees dated 19 December 2016 is concerned, I infer that some amount would have been payable for the proper advice. To account for that, doing the best I can, I deduct $1,100 from the total.
[22] I am also not prepared to allow damages in respect of the two claims for amounts in respect of which there is no invoice produced and the plaintiff claims she paid cash - $1,470 for a fencing contractor; $2,000 for an arborist. No further information of substance is provided. The incurring of such costs has not been proved to my satisfaction on the balance of probabilities.
[23] The plaintiff gave oral evidence that she had not at any stage claimed any GST credits in respect of the costs of any of the works.[7] I act on that evidence.
[24] The plaintiff claimed in the pleading $102,524.32 in respect of this category of loss. However, in oral submissions, the plaintiff conceded that only $98,243.65 had been incurred (as per the plaintiff's affidavit) and that revised amount was claimed.[8] I am prepared to allow an adjusted amount of $93,673.65 for the reasons identified above.[9]
[25] I will award damages against the third defendant for the plaintiff's direct losses of $93,673.65.
[19]
[26] This category of claimed loss concerns profits that the plaintiff says she would have made had the third defendant's tort not been committed. The plaintiff says that, if she had not been incorrectly advised that the subdivision of the land was possible, she would not have proceeded with the subdivision. Instead, she would have listed the land for sale and used the net proceeds, along with borrowings, to purchase a management rights business. She says that, between July 2017 when the development approval was issued and April 2019 when it was withdrawn, such management rights business would have produced a profit of $505,761.66.[10]
[27] The damages claimed under this category are damages for a loss of chance: the plaintiff seeks to be compensated for "deprivation of a commercial opportunity".[11] The court is being asked to assess damages in respect of events that might have occurred, as opposed to events that have in fact occurred.
[28] The plaintiff submitted, and I accept, that:
[20]
(a) the plaintiff need not show that the precise type of loss sustained was reasonably foreseeable, but rather that loss or damage of the same general character as that which was reasonably foreseeable followed as a consequence of the third defendant's negligent conduct;[12]
(b) section 11 of the Civil Liability Act 2003 (Qld) does not alter this position; that section concerns the question of factual causation and does not displace the common law methodology in respect of causation.
[21]
[29] As a starting point, as a matter of causation, I am satisfied on the balance of probabilities that the plaintiff has proven that she has sustained some loss or damage that was caused by the third defendant's negligent advice - namely that she sustained the loss of a commercial opportunity that was of more than a negligible value.[13] The third defendant did not need to foresee the precise type of loss claimed, but it was reasonably foreseeable that, had the plaintiff not been advised that the proposed subdivision was feasible, she may have realised the land to pursue alternative profit-making endeavours.
[30] The inquiry then turns to the assessment of that loss of chance. To that end, it was said in Malec v JC Hutton Pty Ltd(1990) 169 CLR 638 (emphasis added):
[22]
"When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. ... The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place."[14]
[23]
[31] This approach was adopted again in Sellars v Adelaide Petroleum NL; Poseidon Limited v Adelaide Petroleum NL(1994) 179 CLR 332:
[24]
"we consider that acceptance of the principle enunciated in Malec requires that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s. 52(1) [of the Trade Practices Act 1974 (Cth)], should be ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued."[15]
[25]
[32] The plaintiff submitted that the loss of chance should be assessed at 100%, relying on evidence that, in summary:
[26]
(a) based on the net sale proceeds from the land, along with borrowings, the plaintiff would have been looking to purchase a management rights business in the amount of approximately $2.4m;
(b) there were management rights businesses in the plaintiff's price range readily available for purchase at the time of the negligent conduct (around 30 - 40 businesses for sale in the relevant coast area in that price range at that time, including in respect of new developments);
(c) there was no indication that any particular risk factors would have impacted the value/profits of the business to be purchased; rather, the value/profits of the business were expected to be driven by the ability of the individual managing;
(d) the plaintiff had previously purchased like management rights businesses in which she had turned a profit; it was her usual way of making a living; what she had done her entire working life.
[27]
[33] The plaintiff gave oral evidence that she was personally aware of appropriate businesses being sold and available for purchase in or around December 2016 when the tort was committed. She attested that:
[28]
"this is what I do for a living ... and have done my whole life - my whole professional life. ... I'm on brokers' email lists, so I get these emails weekly from 67 different management rights specialists. My whole family are in the industry. It's what we do. ... We have our finger on the pulse of what's happening in the industry all the time."[16]
[29]
[34] She further attested that every time she looked at brokers' websites there would consistently be about 30 to 40 businesses for sale in her price range of between $2 and 2.5 million, and that "if [you] had a specific amount to spend ... it's fairly predictable what your return will be".[17]
[35] I accept that the plaintiff was familiar with the industry and that there were management rights businesses in the plaintiff's price range available for purchase at the time of the negligent conduct.
[36] As to risk factors which may have impacted the value/profit of such a business, the plaintiff relies on an expert report that provides:
[30]
Business value fluctuation between July 2017 and August 2019
[31]
There are a number of factors that may affect the value of a business over a period of time. Including:
[32]
Management risk
Economic impacts
Opportunity for business improvement
[33]
It is not possible to reliably establish any expected impact that management risk or opportunity for business improvement may have had on a management rights business the applicant may have purchased in July 2017 and held through to August 2019. Ability of the individual will be expected to drive these factors.
[34]
There is no indication that economic factors will have impacted on the business valuation during the period in question. It is noted though that as interest rates have dropped, then so too have ROI expectations. This equates to the potential that if profitability of a business is maintained when ROI expectations drop, business valuations rise.
[35]
[37] I generally accept the expert report.
[38] The plaintiff submits, and I accept, that the ordinary risk factors of management risk and opportunity for business improvement are driven by individual ability, and that upon a retrospective analysis there were no economic factors which would have decreased the business valuation.
[39] Finally, as to the plaintiff's expertise and skill in running a management rights business, there is evidence that:
[36]
(a) the plaintiff's parents and sister all owned management rights businesses and the plaintiff grew up in that environment, including working in her parents' management rights businesses;
(b) the plaintiff purchased her first management rights business in 2006 for about $300,000, which turned a net profit of $32,000 per annum until she sold it in October 2014;
(c) the plaintiff purchased a second management rights business in June 2010 for about $600,000, which turned a net profit of $250,000 per annum until she sold it in November 2011;
(d) the plaintiff purchased a third management rights business in March 2015 for about $2,860,000, which turned a net profit of $470,000 per annum until she sold it in April 2016.
[37]
[40] I accept from the above that the plaintiff is a skilled businesswoman who was familiar with this industry and had been successfully investing in similar businesses for a significant period of time.
[41] Whilst the plaintiff submitted that it was "practically certain" that the plaintiff would have made the profit claimed on a management rights business had she not been negligently advised, and so the loss of chance damages ought be assessed at 100%, I am not prepared to accede to that submission.
[42] It is expectable and sensible that, had the plaintiff been told that the proposed subdivision could not go ahead, she would have turned to a business opportunity with which she was already familiar and purchased a management rights business. There were management rights businesses available for purchase at the time and there is no indication that the plaintiff would not have been able to purchase one given an appropriate period of time. She had been successful in previous endeavours investing in similar businesses and there were no obvious economic factors that would have impacted the business valuation/profits over the relevant period.
[43] Further whilst I have regard to the plaintiff's submission that "it is difficult to envisage what further evidence could be put before [the Court] in terms of the probability of the taking up of a chance and the turning of a profit from it"[18] the Court must do the best it can to assess the prospects of success of an opportunity, and it is bearing in mind the following matters that I reduce the loss of chance from 100%:
[38]
(a) the precise date the net proceeds of sale would become available, the amount of net proceeds and the amount of borrowings by the plaintiff could obtain is not known with absolute certainty;
(b) not all management rights businesses available at the time would have had identical returns or the same opportunities for profit/improvement;
(c) it may have taken some time for the plaintiff to secure an appropriate management rights business;
(d) the vicissitudes of any business cannot be predicted with accuracy;
(e) the plaintiff would likely have had to dedicate more of her personal time to the business than she did to the proposed subdivision of the land (which time would have a value and is not otherwise accounted for).
[39]
[44] I assess the loss of chance at 80%. That reduces the claim from $505,761.66 in damages to $404,609.32.
[45] The awarding of damages compensating loss of income gives rise to tax considerations. The plaintiff submits that the award of damages where it is compensation for profit is taxable in the hands of the plaintiff. I am satisfied that, because this category of damages represents lost income, it will be taxable in the hands of the plaintiff and no deduction need be made in this judgment to account for tax.[19]
[40]
[46] The plaintiff submitted that the settlement sum received by the plaintiff from the second defendant should only be deducted against the assessed damages payable by the third defendant if she succeeds on both categories of damages, on the basis that there is no indication that or how the settlement sum is attributed to either category of claim against the second defendant. In the plaintiff's submission, bearing in mind that the settlement sum (being $191,428.77) exceeds the amount of the claim for direct losses against the second defendant (being $87,019.03), the settlement sum is evidently for the whole of the claim against the second defendant and need not be brought to account unless the whole of the claim against the third defendant is also awarded. The plaintiff's counsel further submitted that he could not ask the Court to reduce the damages awarded proportionately to what was claimed in each category of loss against the second defendant as there was no authority for that proposition.
[47] As I have decided in favour of the plaintiff in respect of both categories of loss, it is not necessary for me to resolve this question. It is appropriate to deduct the entirety of the settlement sum from the damages assessed to avoid double recovery.
[48] However, had it been necessary for me to determine the issue, in the absence of any further indication as to how the settlement sum was intended to be attributed in respect of the two categories of loss, I would not have accepted the plaintiff's submission. I would have considered it appropriate that the entire settlement sum paid by the second defendant be deducted from whatever amount of total damages was awarded to the plaintiff against the third defendant. The settlement sum compromised the entire action against the second defendant. The plaintiff has already received that benefit in respect of all of its claims against the second defendant, which are the same claims against the third defendant (there is simply an extra $15,505.29 claimed from the third defendant in direct losses). I do not accept that, had the plaintiff only succeeded against the third defendant in some part of its claim, the compensation she had already received from the second defendant need not be accounted for in full. In my view, the most sensible way to avoid double recovery is simply to ensure that the benefit she had already received is not awarded again by deducting it from the total award, without speculating as to how the settlement sum paid by the second defendant should be attributed between the categories of loss claimed.
[41]
[49] The third defendant is to pay to the plaintiff damages assessed in the sum of $306,854.20 comprising:
[42]
(a) direct losses of $93,673.65;
(b) plus loss of chance damages of $404,609.32,
(c) less the settlement sum received in respect of same losses from second defendant of $191,428.77.
[43]
[50] Interest is payable on the damages at the court rates from the commencement of the proceeding. The third defendant is to pay the plaintiff's costs of the proceeding on the standard basis.
[44]
[1] Affidavit of Tanya Du Plessis filed 2 May 2025 (CDI 65), ex. TDP-2, p. 39 (Du Plessis Affidavit).
[3] The amended claim dated 3 December 2025 was unchanged from an earlier version of the pleading, which claimed some $1.1 million from all three defendants as joint tortfeasors, $225k from the first and third defendants, and alternatively $1.4 million from the first defendant. This is inconsistent with the prayer for relief and is likely an oversight. The submissions before me proceeded on the basis of what was claimed in the amended statement of claim rather than the amended claim: see plaintiff's written submissions at [7].
[9] $98,243.65 less $1,100 less $1,470 less $2,000.
[50]
[10] The amount originally claimed in the amended statement of claim was $591,150, based on an assumption that the sale of the land would generate $900,000 and the plaintiff would invest that $900,000 (along with borrowings) into a management rights business. Account is then taken of an annual return on investment, less the costs of borrowing to give a loss over the period July 2017 to August 2019. The reduced figure of $505,761.66 reflects an updated expert report that indicated, inter alia, that the sale price of the property would only have been $770,000.
[51]
[11]Sellars v Adelaide Petroleum NL; Poseidon Limited v Adelaide Petroleum NL(1994) 179 CLR 332 at 355 per the plurality.
[12] In an amended statement of claim[3] dated 3 December 2021, the plaintiff alleged, inter alia, that the first and third defendants were negligent by incorrectly advising the plaintiff the land could be subdivided. The plaintiff sought damages against the defendants as follows: