Fussell v Hanrahan t/as Dignan & Hanrahan Solicitors

Background

1. The property was a large industrial site, but Mr Lockrey lived in a house on part of the land. He was elderly and wished to remain living in the house until he died. Accordingly, the arrangement was that he would have a life estate over the house with the remainder to the first plaintiff on his death.
2. The problem in relation to the proposed life estate was that the life estate was effectively over part of the land only. Section 23F(2) of the Conveyancing Act 1919 (NSW) provided that the Register General could refuse to register a transaction over part of the land unless the part of the land was shown on a current plan or was part of a proposed plan of subdivision. The part of the land containing the house was neither.
3. The contract provided for the intended life estate to Mr Lockrey in special condition 49 as follows: Life Estate 49.1 The purchaser has agreed that in consideration of the vendor entering into this contract that he will on completion grant a life estate ("Life Estate") to the vendor for the home built on top of the six garages on the property in the terms set out in the deed of life estate, a copy of which is annexed and marked "A". 49.2 After the date of this contract the vendor's solicitor shall provide the purchaser's solicitor with the deed creating the Life Estate completed as at the date of this contract in duplicate to be signed by the purchaser and returned to the vendor's solicitor to be signed by the vendor and held in escrow pending stamping of that document and completion. 49.3 Prior to completion the vendor will if he deems necessary obtain at his expense a survey plan of the home built on the property. 49.4 The vendor prior to completion shall obtain a valuation of the Life Estate. 49.5 The purchaser's solicitor shall prepare a transfer substantially in the form annexed and marked "B" and the vendor and purchaser shall ensure that a joint application is made to the Office of State Revenue for the purpose of stamping this contract and marking the transfer, which application will Include the valuation referred to in clause 42.5. The purchaser shall pay the stamp duty payable in respect of the purchase price and the vendor shall pay the stamp duty in relation to the Life Estate. 49.6 The purchaser cannot make any objection, requisition or claim, or delay completion of or rescind or terminate this contract because of any matter in respect of the Life Estate or in respect of any matter referred to in this clause 49. This clause 49 shall not merge on completion. 49.7 The parties agree to comply with any requisitions made by the Land and Property Management Authority and Office of State Revenue in respect of the transactions evidenced by this contract. (emphasis added)
4. The document identified as "A" in cl 49.1 was a "Deed of Life Estate" ("the Deed") which was entered into on 25 July 2012. The Deed recited the entry into the contract and provided: Fussell agrees that in consideration of Lockrey entering into the Contract and for no further consideration then (sic) the Purchase Price grants to Lockrey a life estate in the House.
5. "House" was defined in the Deed as meaning: The house constructed on top of the six garages on the Property as of the date of the Contract together with all the inclusions contained in the House.
6. The form of the transfer referred to as "B" in cl 49.5 had as the title reference "F 33553" (the folio identifier for the whole of the land) and identified the Transferee as "JAMES BOYD LOCKREY with respect to the Life Estate and BERNARD JAMES FUSSELL with respect to the remainder of the Estate".
7. The effect of that form of transfer was that the whole of the land was transferred to Mr Lockrey for life with the remainder to Mr Fussell on Mr Lockrey's death. Not only was that not intended by the arrangement between the two men, it was inconsistent with the terms of the contract and the Deed, and it later gave rise to finance problems when St George Bank was not prepared to lend money to Mr Fussell to assist in the purchase of the property.
8. The principal issue which has given rise to the proceedings relates to a special condition in the contract which relevantly provides: Death or Insolvency etc 33. Without in any manner negating limiting or restricting the rights or remedies which would have been available to the parties at law or in equity had this special condition not been included, should either party prior to completion: 33.1 being a natural person be declared bankrupt, then 33.1.1 in the case of the vendor, the purchaser may rescind this contract by notice in writing forwarded to the solicitor for the vendor and this contract shall be at an end and the provisions of clause 19 shall apply; or 33.1.2 in the case of the purchaser, the purchaser shall be deemed not to have complied with this contract in an essential respect; 33.2 die or become mentally ill, then in the case of the vendor or the purchaser either party may rescind this contract by notice in writing forwarded to the solicitor for the other party and this contract shall be at an end and the provisions of clause 19 shall apply; 33.3 …
9. The contract did not settle on 10 May 2017 as it provided, and on 12 May 2017 Mr Lockrey died. Thereafter, on 18 May 2017, Mr Lockrey's solicitor, Carolyn Deigan, who was also his executor, sent a notice purportedly rescinding the contract pursuant to clause 33.2. Ms Deigan did not obtain probate of Mr Lockrey's will until 21 September 2017. Subsequently, she sent a further notice of rescission on 16 October 2017.
10. Mr Fussell commenced proceedings against Mr Lockrey's executor on 17 October 2017 seeking specific performance of the contract. In those proceedings it was contended on behalf of Mr Fussell that, where one party to a contract dies, it was only the other party who had the right to rescind the contract. That argument was upheld at first instance and specific performance was ordered: Fussell v Deigan [2018] NSWSC 1419; (2018) 19 BPR 38,755. The executor appealed, and the Court of Appeal on 10 December 2019 upheld the appeal, holding that, at least by 16 October 2017, the vendor had effectively rescinded the contract on the basis that under clause 33.2 the right to rescind was given to either party: Carolyn Deigan as executrix for the estate of the late James Boyd Lockrey v Barnard (sic) James Fussell [2019] NSWCA 299;(2019) 19 BPR 39, 853.
11. In the meantime, the plaintiffs, represented at that time by the third defendant, Steven Brown, commenced these proceedings on 2 May 2018, seeking damages against the first and second defendants, Bruce Hanrahan and David Duncombe trading as Dignan and Hanrahan Solicitors. Mr Hanrahan had acted for the plaintiffs in relation to the various agreements with Mr Lockrey from late March or early April 2012 until about April 2016. On 24 July 2020, when the plaintiffs retained their present solicitors, an amended statement of claim was filed adding some further particulars of breach and negligence against those defendants.
12. On 8 July 2021, a further amended statement of claim ("FASOC") was filed joining Steven Brown as the third defendant. Mr Brown had been retained by the plaintiffs in 2016 in lieu of the first and second defendants, and had acted for the plaintiffs up to the time of Mr Lockrey's death and thereafter in the specific performance proceedings, and in instituting the present proceedings against the first and second defendants.
13. The plaintiffs' case against Mr Hanrahan in essence is that he breached his duty of care by: (a) failing to advise Mr Fussell, adequately or at all, of the presence and effect of clause 33.2; and (b) failing to advise Mr Fussell, adequately or at all, that it was not possible to grant Mr Lockrey a life tenancy over part only of the property by virtue of s 23F of the Conveyancing Act.
14. The claim against Mr Brown was that he breached his duty of care to Mr Fussell and Blue Star by failing to advice Mr Fussell of the presence and effect of clause 33.2 until after Mr Lockrey's death, and by failing to arrange settlement of the contract prior to Mr Lockrey's death.
15. The losses said to have been caused by Mr Hanrahan's breaches were the loss of the opportunity to have had cl 33.2 of the contract deleted or amended so that it did not give the vendor the right to rescind if the vendor died, and the loss of the opportunity to have the contract without the problem relating to the life estate. In relation to Mr Brown, the loss was said to be the loss of opportunity to achieve an early settlement before Mr Lockrey died.
16. Although the FASOC sought damages, equitable compensation and an account of profits for breaches of fiduciary duty, the plaintiffs accepted at the outset that there was not sufficient or appropriate evidence to found the equitable claims. However, the plaintiffs submitted that Mr Brown had a conflict of interest (which had formed the basis of the claim for breach of fiduciary duty) in continuing to act for the plaintiffs in the litigation against Mr Hanrahan, and that conflict of interest was relevant to an assessment of Mr Brown's credibility.
17. Part of the arrangement reflected in the contract was that Mr Fussell's company, Blue Star was to have a six year lease of the property. Blue Star entered into that lease but, as a result of Mr Lockrey's death, it lost the right to remain as the lessee beyond the six year period. It claims for losses expended during the time it was in occupation on the basis that the expenditure was wasted when it could no longer remain as the lessee.
18. As the case developed it became clear that the two significant factual issues to be decided were, first, whether Mr Fussell had been advised by Mr Hanrahan and Mr Brown about cl 33.2 of the contract (particularly Mr Hanrahan, because by the time Mr Brown was retained the contract had been entered into) and, secondly, whether Mr Fussell had the funds to complete the purchase before Mr Lockrey died, and particularly, in the months leading up to Mr Lockrey's death.

The plaintiffs' case

1. The plaintiffs pleaded (para 26 of the FASOC) that if they had received the appropriate advice concerning cl 33: (a) the plaintiffs would and could have negotiated with the vendor to remove and/or amend clause 33 of the Contract of Sale to make it clear that the Contract of Sale would continue at the election of the plaintiffs even in the event that the vendor died before settlement; (b) further or in the alternative, the plaintiffs, or one or more of them, would have arranged their affairs so as to settle the Contract of Sale prior to the death of the vendor; (c) alternatively, the plaintiffs would not have entered into the Contract, Lease and Life Estate and would have instead purchased a similar or alternative property in or around mid-2012.
2. They also pleaded (para 33) that if they had received the correct advice in relation to the life estate, they: (a) would and could have negotiated with the vendor to amend the Life Estate, if necessary to enable a transfer to be prepared and registered that would not have the effect of granting the vendor a life estate over the entire Property; (b) further or in the alternative, the plaintiffs, or one or more of them, would have arranged their affairs so as to be able to settle the Contract of Sale without obtaining a mortgage secured over the Property; (c) alternatively, the plaintiffs would not have entered into the Contract, Lease and Life Estate and would have instead purchased a similar or alternative property in or around mid-2012.
3. The plaintiffs allege that Mr Hanrahan breached his duty of care to them by: (a) failing to exercise reasonable skill and care in the advice he gave and/or did not give to Mr Fussell in relation to clause 33.2; (b) failing to exercise reasonable skill and care by failing to advise Mr Fussell to instruct him to negotiate with the vendor's solicitor to have clause 33.2 removed or amended so that it did not entitle the vendor to rescind if the vendor died before completion; (c) failing to exercise reasonable skill and care in relation to the advice he gave and/or did not give to Mr Hanrahan in relation to the life estate; (d) failing to exercise reasonable skill and care by failing to advise Mr Fussell to instruct him to negotiate with the vendor's solicitor to make changes in relation to the provisions relating to the life estate; and (e) failing to exercise reasonable skill and care in relation to the preparation of the form of transfer relating to the life estate.

Clause 33.2

1. Mr Fussell first retained Mr Hanrahan, probably in late March 2012. At the first meeting between them, Mr Fussell told Mr Hanrahan that he had reached an understanding with Mr Lockrey about the purchase of the land and that there would be a delayed settlement for five years. At that time the contract had not yet been prepared.
2. On 4 May 2012 Mr Hanrahan received an email attaching the front page and special conditions of the contract, and the draft commercial lease for the property. On 7 May 2012 Mr Hanrahan received a copy of the whole of the draft contract and a draft of the commercial lease by mail.
3. Later on 7 May 2012, Mr Fussell had a conference with Mr Hanrahan where the contract and the lease were discussed.
4. Mr Fussell's evidence in chief about the advice he received at that conference concerning cl 33.2 was this: 49. My notes in relation to this meeting are at page 98 and 99 of the Exhibit. I made these notes in 2017 at the request of Mr Brown. In particular, it includes a note of the following questions and answers: Me: "If Jim dies does it affect the sale?" Hanrahan: "No, it doesn't matter. The sale can still go ahead." Me: "Are you sure there is nothing that cancels the sale?" Hanrahan: "There is nothing in there." 50. I set out hereafter the question on the paper, the question I asked and the reply from Mr Hanrahan. … (b) If Jim dies, does it affect the sale? Hanrahan: "No, it doesn't matter. The sale can still go ahead." Fussell: "Are you sure there is nothing that cancels the sale?" Hanrahan: "There is nothing in there." … 52. I was not given a copy of the Contract by Mr Hanrahan nor did I read through it or any of the other documents by myself at that time. Mr Hanrahan did provide me with a copy of the Lease because I had to get my son to sign it.
5. On 16 May 2017 Mr Fussell went to see Mr Brown in his office for the purpose of fixing a settlement date after Mr Fussell had been told that Mr Lockrey had died. Mr Fussell gave evidence that Mr Brown said to him: When you said Mr Lockrey had died, I pulled out the contract to check something. I did not realise there is a clause in the contract titled "Rescission". If he dies or indeed you die, the other party can cancel the contract. We have a problem.
6. Mr Fussell said to Mr Brown that he "certainly did not know that". Mr Fussell also said in his affidavit: 127 The conversation I had with Mr Brown on 16 May 2017 was the first time he raised the existence of, or a potential or actual problem in relation to, cl 33.2 of the contract. 128 At no time until this conversation on 16 May 2017 was I aware that the contract contained cl 33.2.

Witnesses

1. The important events in these proceedings took place in 2012 and 2016 to 2017, that is, from 7 to 12 years ago. In that regard, it is important to bear in mind what has been said in relation to human memory in the context of recall during litigation.
2. In Campbell v Campbell [2015] NSWSC 784 Sackar J said: [73] In Watson v Foxman (1995) 49 NSWLR 315 and 319, McLelland CJ in Eq made the following remarks: …human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. [74] I made the following observations in Craig v Silverbrook [2013] NSWSC 1687 at [140]-[142]: [140] Whilst a trial judge is entitled to make observations relating to the demeanour of certain witnesses, it is a notoriously crude and inaccurate methodology. Its defects have been exposed on numerous occasions. [141 In that regard, I am of course mindful of the comments of Gleeson CJ, Gummow and Kirby JJ in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 (at [30]-[31]) when they remarked (citations omitted): [30] It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Societe d'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants Marine Insurance Co (The "Palitana"): "... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour." [31] Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility… [142] In the recent decision of McGraddie v McGraddie and another [2013] UKSC 58; [2013] 1 WLR 2477, the UK Supreme Court emphasised that, especially in cases where a trial judge is faced with a stark choice between irreconcilable accounts, the credibility of the parties' testimony, and the trial judge's assessment of the character of witnesses and the manner in which the witnesses give evidence, is of primary importance. Those observations are particularly relevant to the present case. Similar observations have been made in Australian authorities (Fox v Percy at [23]; Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 at [41] per McHugh J and see generally comments in Ritchie's Uniform Civil Procedure NSW at SCA s 75A.20). [75] In Camden v McKenzie [2008] 1 Qd R 39 at [34] Keane JA (as he then was) made the observation that "the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation." This remark was cited with approval by Leeming JA (with whom Barrett JA and Tobias AJA agreed) in New South Wales v Hunt (2014) 86 NSWLR 226 at [56]. [76] Hallen J recently set out the relevant principles in Evans and Braddock [2015] NSWSC 249 at [70]-[77]. After referring to Watson v Foxman, his Honour said: [71] In that case, his Honour was talking of a cause of action founded on s 52 of the Trade Practices Act 1974 (Cth) or s 42 of the Fair Trading Act 1987 (NSW): see the discussion by McDougall J in Harbour Port Consulting v NSW Maritime [2011] NSWSC 813, at [10]-[18]. However, as McLelland CJ in Eq also pointed out, the views apply to all types of litigation. [72] I also remember what was said by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56, at [48]: "When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2)." [73] The credibility of a witness and his, or her, veracity may also be tested by reference to the objective facts proved independently of the evidence given, in particular by reference to the documents in the case, by paying particular regard to his, or her, motives, and to the overall probabilities: Armagas Ltd v Mundogas S.A. (The "Ocean Frost") [1985] 1 Lloyd's Rep 1, per Robert Goff LJ, at 57. Also see, In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547, per Black J, at [7]. [74] A court, in cases involving events which occurred long before the litigation, usually prefers to rely upon contemporaneous, or near contemporaneous, documents, which will often provide valuable and, usually, more revealing, information than what may be flawed attempts at recollection of those facts by persons with an interest in the outcome of the litigation: Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200, per Jagot J, at [1247]. Greater weight is usually accorded to such documents, as often they provide a safer repository of reliable fact, particularly when it is clear that they have been prepared by a person with no reason to misstate those facts in the documents and where there is no suggestion that the documents are other than genuine: Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160, per Kenneth Martin J, at [157]. [75] … [76] The circumstances of this case, make what was written by Tamberlin J in Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Federal Court of Australia, Tamberlin J, 29 June 1995, unrep), at 122 - 123 (in a passage cited with approval by the High Court when it upheld his Honour's decision: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599, at [15]) appropriate to remember: "[Given the lapse of time] between the events and conversations raised in evidence and the hearing of the evidence before me, the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence. In circumstances where the events took place so long ago, it must be an exceptional witness whose undocumented testimony can be unreservedly relied on. The witnesses in this case unfortunately did not come within that exceptional class. The discussions referred to in evidence were capable of bearing quite opposed meanings depending on subtle differences of nuance and emphasis, and a proper appreciation of the significance of those matters must necessarily be considerably diminished over such a long period of time." [77] Finally, I should mention an article by the former the Chief Judge at Common Law, P McClellan entitled "Who Is Telling the Truth? Psychology, Common Sense and the Law" (2006) 80 ALJ 655, in which he wrote, at 665, quoting a passage from the "Guidelines Relating to Recovered Memories" (2000) of the Australian Psychological Society: "Memory is a constructive and reconstructive process. What is remembered about an event is shaped by how that event was experienced, by conditions prevailing during attempts to remember, and by events occurring between the experience and the attempted remembering. Memories can be altered, deleted and created by events that occur during and after the time of encoding, during the period of storage, and during any attempts at retrieval."

Mr Fussell

1. I found Mr Fussell to be a most unreliable witness, and in some respects he was dishonest by his own admission to having sworn to evidence which was untrue. On a number of occasions he denied propositions that were put to him, but when confronted with the fact that he had asserted the proposition in his affidavit evidence, he agreed that it was so. The strong impression I had was that Mr Fussell had reconstructed events, perhaps mostly unconsciously, to support his underlying position, that he did not know about cl 33.2 until after Mr Lockrey's death at a time when settlement of the contract ceased to be available to him.
2. A matter that took on some significance for Mr Fussell's reliability, but which was otherwise not of any crucial importance, was the date on which he met with Mr Hanrahan to discuss the contract. In his affidavit of 15 September 2022 Mr Fussell insisted the meeting was on the afternoon of Friday, 4 May 2012. He maintained that the meeting took place on that day in his oral evidence when being cross-examined. The evidence overwhelmingly pointed to the meeting having occurred on Monday, 7 May 2012.
3. For a start, although Mr Hanrahan had received an attachment to an email on the afternoon of 4 May 2012 containing the front page of the contract, the special conditions, and the draft commercial lease, the whole of the contract did not arrive at Mr Hanrahan's office until 7 May 2012. Further, in his affidavit in support of his claim for specific performance, Mr Fussell gave evidence that the meeting took place on 7 May 2012 and that that was the first time he had met Mr Hanrahan (although the affidavit says "8 May" it seemed to be accepted that that was a typographical error - despite Mr Fussell saying 8 May was correct, he did not suggest there was a meeting on Tuesday 8 May).
4. In the pleading of the statement of claim, the plaintiffs had asserted there was only a telephone call to Mr Hanrahan on 4 May, and that the in-person meeting took place on 7 May. Mr Fussell first tried to blame Mr Brown for that pleading, which he said was an error (although he accepted that he, Mr Fussell, swore it as being true) but, ultimately, he also accepted that his present solicitors maintained that pleading in the present iteration of the statement of claim, which he also swore was true.
5. Related to that was Mr Fussell's evidence in the present proceedings that he had three meetings with Mr Hanrahan concerning the contract. Two of those were said to be on 4 May and 7 May.

Mr Hanrahan

1. I thought Mr Hanrahan was a straightforward and impressive witness. His evidence was largely, but not completely, supported by contemporaneous file notes and letters, and he remained largely unshaken in cross-examination.
2. A significant matter which causes me to prefer the evidence of Mr Hanrahan over Mr Fussell in relation to the conference on 7 May 2012 (even ignoring the problems in Mr Fussell's evidence that I have detailed above) is that in Mr Fussell's principal affidavit he claims that the conference on 7 May proceeded on the basis of his asking questions of Mr Hanrahan and Mr Hanrahan providing answers. Those answers were set out in a document prepared by Mr Fussell in 2017 after Mr Lockrey had died and, on Mr Fussell's evidence (although denied by Mr Brown) at Mr Brown's suggestion. The evidence Mr Fussell gives derived from that document was not contemporaneous evidence.
3. Mr Fussell said that the meeting took place with Mr Hanrahan looking through the contract and the lease, and then Mr Fussell asked the questions and obtained the answers which appear in his 2017 document. Mr Fussell also said that he was not given a copy of the contract by Mr Hanrahan, nor did he read through it or any other documents at the conference.
4. After Mr Hanrahan swore and served his affidavit detailing his recollection of the conference, which largely relied on his contemporaneous file note of that day, Mr Fussell's account of the conference changed, and he acknowledged that Mr Hanrahan had in fact gone through the special conditions including giving a summary of the clauses. Mr Fussell said that Mr Hanrahan discussed some, but not all, of the special conditions that were noted in Mr Hanrahan's file note.
5. Mr Hanrahan's diary note appears to be in two parts. The first of it, with words largely written in upper case letters, consists of a very brief summary of the contract, the life estate and the lease. Mr Hanrahan said that he wrote that section of the note before the conference started. The second part of the diary note commencing "Discuss the special conditions…" is written in ordinary script and says (inter alia) "issues which were raised included the following" and that was followed by specific references to particular special conditions. Mr Hanrahan said that he wrote that section during the conference or shortly thereafter.

Mr Brown

1. In my opinion, Mr Brown was an impressive witness who appeared to have a good memory of the events. His evidence was supported by contemporaneous documents. Contemporaneous documents were important for resolving a dispute between Mr Fussell and Mr Brown about events at the beginning of May 2017 where Mr Fussell denied a phone call with, and a subsequent email from, Mr Brown, but which the contemporaneous material in Mr Brown's file clearly supported Mr Brown's evidence about those contacts.
2. I accept Mr Brown's evidence that at a meeting on either 9 or 29 August 2016 with Mr Fussell he went through the special conditions in the contract with him and when they were discussing cl 33.2 he said to Mr Fussell: I note that you have agreed to a clause in the Contract that allows either party to rescind in the event that either party dies before completion of the Contract.
3. Mr Brown was challenged about that evidence, and it was put to him, on the basis of what Mr Fussell had said in his evidence, that the first time there was any discussion between Mr Brown and Mr Fussell about cl 33.2 was after Mr Lockrey had died. Part of that challenge was based on an entry Mr Brown made in his electronic record for 15 May 2017 where he noted, "consider issue of vendor dying prior to completion. Clause 33.2 arguably vendor's estate might seek to rescind contract?".
4. Mr Brown said in his evidence: [113] After I was informed that Mr Lockrey had passed away, I reviewed the Contract again to remind myself of Mr Lockrey's rights to rescind under the Contract. I had previously reviewed and considered clause 33.2 and was aware of it. I had previously raised it with Mr Fussell as referred to in paragraph 78 above. However, upon finding out that Mr Lockrey had passed I wanted to look at it again so that I could provide updated advice to Mr Fussell. … [116] On 16 May 2017 Mr Fussell and I had a conference where we exchanged words to the following effect: Me: I have looked at the Contract again just to remind myself of the detail of it. You know how we discussed that clause in the Contract which would allow it to be rescinded if a party died. I think you have said before you didn't know about it before you entered the Contract. Your previous lawyer, you said, did not raise it with you. Mr Lockrey's estate has the right to end the Contract because Mr Lockrey died before the Contract completed. Mr Fussell: What does that mean for the Contract?

Ms Deigan

1. Ms Carolyn Deigan was the principal of CLS Legal, Mr Lockrey's solicitors.
2. Ms Deigan's evidence was only of importance for two matters which were in dispute, and also for providing the historical context in which the contract under consideration came into being. Ms Deigan gave evidence of having acted for Mr Lockrey on the sale of the Camellia property from the time she was retained in October 2009 up to Mr Lockrey's death in May 2017.
3. Paragraphs [11]-[51] of her affidavit relate to prior attempts by Mr Lockrey to sell the land to other potential purchasers. Objection was taken to those paragraphs on the basis of relevance. It was ultimately agreed that the paragraphs should be admitted subject to relevance and that I would determine their relevance in this judgment.
4. In my opinion, the paragraphs objected to should be received into evidence. They provide an explanation for the form of the transfer that was in issue in the proceedings. They also throw light on the issue of whether Mr Lockrey would have agreed to changes in the contract, particularly with regard to the life estate, but also in relation to cl 33.
5. The two disputed issues in respect of which Ms Deigan's evidence was relevant were, first, the assertion by Mr Fussell that he sat in on a conference Ms Deigan had with Mr Lockrey when Mr Lockrey was providing instructions to her about the agreement he and Mr Fussell had reached. The second disputed area concerned advice Ms Deigan said she would have given to Mr Lockrey if particular matters had been raised with her on behalf of Mr Fussell.
6. In assessing the reliability of Ms Deigan's evidence, I take into account that she has no interest in the outcome of the present proceedings. Certainly, as with any solicitor challenged about the way they behaved in the course of a transaction, she had her own reputation to protect. However, I consider that she was a wholly disinterested witness, that her evidence was given truthfully to the best of her recollection, and that her evidence should be accepted.
7. In particular, I accept her evidence that Mr Fussell did not remain present when Mr Lockrey was giving instruction to her about the contract. As most solicitors know, and as all solicitors should know, it would be quite inappropriate for both parties to the contract to be present at a conference with one of the party's solicitors, when the terms of the contract are being discussed. This was the more so when Mr Fussell was the third of a number of purchasers who had entered into negotiations with Mr Lockrey, and through Ms Deigan as his solicitor, to purchase the land.

Retainer

1. The plaintiffs alleged that Mr Hanrahan agreed to act for both Mr Fussell and Blue Star. Mr Hanrahan agrees that he acted for Mr Fussell but did not admit that he was retained by Blue Star - he did not deny it. There was no evidence that Mr Hanrahan sent a formal retainer letter providing the disclosures required by the Legal Profession Uniform Law (NSW) No 16a of 2014. His only letter concerning his retainer was a letter of 2 April 2012 addressed to Mr Fussell confirming instructions to act on his behalf in reaction to the purchase of the property. That was, no doubt, because at the preliminary meeting in late March or early April there was no mention of Blue Star or a lease.
2. However, by 4 May 2012 Mr Hanrahan knew that the arrangement involved a lease to Blue Star, and that it was linked to the purchase contract - see cls 37.7 and 51. He advised on the lease at the meeting on 7 May 2012.
3. Mr Hanrahan accepted an implied retainer to act for Blue Star, and he owed it a duty of care. There is nothing pleaded, nor any evidence, suggesting any duty on Mr Hanrahan's behalf to Blue Star beyond ensuring that advice was given on the lease and that it was entered into as both Mr Fussell and Blue Star intended. Mr Hanrahan was never told, for example, that Blue Star was spending money on the property on the basis that a new lease would be entered into after the 6 year period (the Lease did not provide an option for renewal). There was no evidence of Mr Fussell's or Blue Star's intentions beyond the 6 year period, and there is no basis for implying any obligation on Mr Hanrahan's part to enquire.
4. In Macindoe v Parbery (1994) 6 BPR 13,483, Young AJA (with whom Priestley JA agreed) discussed a number of cases involving purchases (albeit, generally of businesses) that contained an unusual provision or provisions, and said (at P.13,493): Accordingly, there is no lack of authority for the proposition that the retainer of a solicitor for the purchaser on the purchase of a business ordinarily extends beyond mere documentation and includes the duty to warn the purchaser of anything that is unusual and anything that may affect the purchaser obtaining the benefit of the contract which he or she discloses to the solicitor is sought to be obtained.
5. In the same case, Kirby P said (at P. 13,484): With Young AJA I would reject the argument for the solicitor that his obligation extended no further than to prepare the documents for the sale of the business and to explain to the clients the legal effect of the various clauses of the documents. In modern circumstances, a solicitor's duty of care to a client such as the appellant is not so confined. One of the reasons for the expansion of the solicitor's duty of care is the acceptance, in Australia at least, that a solicitor is liable to a client not only in contract…but also in the tort of negligence. See Hawkins v Clayton (1998) 164 CLR 539 at 574 and discussion in Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 (CA at 652). However, this extension of the solicitor's duty of care to the client - beyond the strict confines of the contract of retainer narrowly construed - still has its boundaries. The solicitor is not (at least ordinarily), by reason of a retainer, converted into a general investment advisor for the client. Nor is the solicitor deemed by the law to be imbued with perfect foresight. He or she is not required to foresee every conceivable business risk and to alert the client against them. Certainly, the solicitor's duty goes beyond the obligation to explain the usual perils. It will embrace, as well, the duty to explain unusual risks which are reasonably foreseeable and which the client should weigh.

Clause 33.2

1. Mr Hanrahan accepted that he owed Mr Fussell a duty to advise him of the presence and effect of cl 33. In my opinion, Mr Hanrahan discharged that duty because he informed Mr Fussell of that clause and that either party could cancel the contract if either party died. Mr Fussell also claims that Mr Hanrahan breached his duty of care by failing to recommend appropriate changes to the contract. There is no evidence that Mr Hanrahan made such recommendations, nor that he made any approach to Mr Lockrey's solicitors to modify or delete cl 33.2.
2. In the present case, although cl 33 might have been a clause usually found in contracts in New South Wales, the situation was an unusual one to Mr Hanrahan's knowledge. First, the contract had a five year settlement date. Secondly, he also knew that Mr Fussell had told him in an email of 2 May 2012 that "the vendor is not in good health". Mr Hanrahan's evidence was that he did not know Mr Lockrey's state of health but he had no reason to doubt what Mr Fussell told him in that regard.
3. I accept Mr Rosier's evidence, although I do not consider that evidence in this regard was really necessary, that in those circumstances Mr Hanrahan ought to have advised Mr Fussell to provide him with instructions to approach the vendor's solicitor in an endeavour to renegotiate cl 33.
4. Mr Hanrahan pointed to some evidence given by Mr Fussell to submit that, because of what Mr Fussell knew, there was no obligation on Mr Hanrahan to provide that advice and seek those instructions.
5. Counsel for Mr Hanrahan had been cross-examining Mr Fussell on the statement in his affidavit that if he had known that either party could cancel the contract in the event that a party died "that would have been very alarming to me". The following evidence was then given: Q. Is his Honour to understand that if those words had been said to you - and I understand you deny they were said - but is his Honour to understand that if those words were said to you, you would have instructed Mr Hanrahan to seek for the clause to be removed from the contract? A. Absolutely. Q. You didn't need Mr Hanrahan to specifically tell you that's what you should do, did you? A. I don't know what you mean. Q. Well, it would have been obvious to you if Mr Hanrahan had said that if either party dies either party can cancel the contract, the risk would have been obvious to you, wouldn't it? A. Yes. Q. And you would have told him to seek to have that clause removed, on your case? A. That's right, yes. Q. You wouldn't have needed Mr Hanrahan to also say to you, I recommend to you that you seek the removal of that contract (as said), because that would have been obvious to you, is that right? A. The term, are you saying? Q. Yes. A. You said "the contract". Q. The provision in the contract, the clause. A. Right. Q. Clause 33. A. Exactly right, because as I've said I've specifically asked that question. Q. Well the fact is you didn't give instructions to Mr Hanrahan to seek for the clause to be removed, did you? A. Because I knew nothing about the clause.

Life Estate

1. The extent of Mr Hanrahan's evidence concerning the life estate was this. He made reference to cl 49 in the draft contract forwarded to him, noting that it referred to a Deed of Life Estate granting Mr Lockrey the right to continue to live in his home on the property. Mr Fussell pointed out that it should be in relation to "the home built on top of the six garages on the property", and Mr Hanrahan said he would speak with the vendor's solicitors to get that amended. Mr Fussell said he was aware that Mr Lockrey would have a life estate and he had no problem with it. Mr Hanrahan said that he noted that on his file the words "joint application for assessment of transfer" (a reference to cl 49.5 for the vendor and purchaser to ensure that a joint application was made to the OSR for the purpose of stamping the contract and marking the transfer) as a reminder to himself to put that in place.
2. He later contacted Ms Boustani at CLS Legal, telling her that cl 49.1 needed to be amended to make clear it was the house on top of the six garages on the property. He also said it might be necessary to obtain a valuation of the life estate for stamp duty purposes.
3. Subsequently, on 2 July 2012, Mr Hanrahan signed the transfer in the form required pursuant to cl 49 and forwarded it to Mr Lockrey's solicitors.
4. Mr Hanrahan said nothing in his evidence about noticing that the transfer did not give effect to the agreement contained in cl 49 or in the Deed, nor that he advised Mr Fussell that if the contract settled with transfer in the form it was, Mr Fussell would not be receiving the property on settlement except in remainder. That is to say, he did not advise Mr Fussell that Mr Lockrey would receive a life estate over the whole of the property.
5. As I mentioned earlier, senior counsel for Mr Fussell did not cross examine Mr Hanrahan about what he did or failed to do in relation to the life estate. Although I indicated that this course raised a prima facie issue about procedural fairness to Mr Hanrahan if I was minded to make adverse findings in this regard, it seems to me that Mr Hanrahan made a forensic choice in relation to the evidence that he put forward, in the knowledge that the plaintiffs were asserting in the FASOC that Mr Hanrahan had breached his duty of care by not advising the plaintiffs about the effect of the transfer in the circumstances. That forensic choice means that there is no procedural unfairness to Mr Hanrahan in making findings against him in relation to the life estate issue.

Causation

1. If I am wrong in my determination that Mr Hanrahan advised Mr Fussell about cl 33.2 and its effect, it is necessary to consider whether that breach on his part was causative of any loss. The principles governing the determination of causation are set out in s 5D of the Civil Liability Act 2002 (NSW) (the "CLA"). The determination of factual causation under s 5D(1)(a) is a statutory statement of the "but for" test of causation: the plaintiff would not have suffered the particular harm but for the defendant's negligence: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420; [2009] HCA 8 at [55]; Strong v Woolworths Ltd (2012) 246 CLR 182; [2012] HCA 5 at 18.
2. Even if it is accepted that Mr Fussell would have given instructions to Mr Hanrahan (whether at the suggestion of Mr Hanrahan or not) to negotiate to alter or delete cl 33.2, the evidence strongly suggests that no such agreement would have been reached with Mr Lockrey in that regard.
3. Prior to the negotiations with Mr Fussell, Mr Lockrey had negotiated with two other intending purchasers of the property. The first of those were Mr and Mrs Calleja. The second was Mr Wang. In both cases, the form of the contract submitted to them by Ms Deigan contained a clause saying: 33. If either party dies or becomes mentally ill or being a company becomes an externally administered body corporate within the meaning of the Corporations Law, or the purchaser being a person is made bankrupt, the vendor may rescind this contract by notice to the purchaser. (emphasis added)
4. How the contract with Mr Fussell came to a position of mutuality on the right to rescind was not made clear. There was only this evidence from Ms Deigan: [62] Prior to Mr Lockrey exchanging the Fussell Contract, I had a conversation with Ms Boustani in words to the following effect: Me: Rita, can you check the special conditions and make sure we leave in that clause about being able to get out of the sale if Jim dies? RB: Ok, will do.
5. Those earlier contracts and what Ms Deigan said to Ms Boustani tend only to show the importance of cl 33.2 to protect Mr Lockrey's position.
6. Ms Deigan also gave this evidence: [71] If Mr Hanrahan had requested that clause 33 of the special conditions of the Fussell Contract be deleted, my advice to Mr Lockrey would have been not to delete the clause. This clause or a clause in similar terms is in all my precedent contracts.

Claim against Mr Brown

1. Mr Brown admitted a retainer to act for Mr Fussell in relation to the sale of the property and completion of the contract of sale. He admitted also a retainer with Blue Star in relation to unpaid rent under the lease.
2. The particulars of breach of Mr Brown's retainer did not differentiate between Mr Fussell and Blue Star. The breaches all concerned cl 33.2 and the life estate and included claims, now seemingly abandoned, that Mr Brown failed to warn and advise the plaintiffs about the inconsistency between the transfer and the agreement identified in the Deed and cl 49 of the contract.
3. However, when pleading matters of causation, the plaintiffs alleged that Mr Brown's negligence caused economic loss to Blue Star "as a result of the loss of opportunity to enjoy occupation of the Property beyond the period of the lease and related losses". There was no pleading of a duty of care, nor any breaches, in relation to Blue Star's occupation of the property after the lease expired. Nor did Mr Fussell give any evidence of having discussed with Mr Brown Blue Star's intentions after the expiry of the lease, nor that money was being expended by Blue Star for the purpose of Blue Star's occupation of the premises beyond the 6 year lease term. Mr Brown accepted, however, that he knew Blue Star intended to stay in occupation of the premises after the lease expired.
4. The extent of Mr Brown's duty to Blue Star concerned unpaid rent under the lease. The evidence disclosed that Mr Brown advised Mr Fussell, and thereby Blue Star, that in order to settle the contract prior to 10 May 2017 the arrears of rent would need to be paid up to date. There are no breaches pleaded concerning the lease.

Clause 33.2 and the life estate

1. Although Mr Fussell claimed that he first found out about the provisions of cl 33.2 in May 2017 after Mr Lockrey died, I have found that Mr Hanrahan advised him about cl 33.2 before he entered into the contract with Mr Lockrey.
2. If I am wrong in my determination that Mr Hanrahan advised Mr Fussell of cl 33.2, it needs to be determined whether Mr Fussell knew, in any event, about cl 33.2 at any time prior to Mr Lockrey's death.
3. Mr Fussell gave evidence that he had bought a lot of property with a delayed settlement. He then gave this evidence: Q. And you would have read the contract of sale no doubt in each case? A. I probably used a solicitor. Q. But you would have read the contract as well no doubt? A. There's reading and reading, yes. Q. Well you read this contract in 2012, the Hanrahan - well, the contract with Mr Lockrey, didn't you? A. Later. I didn't have a copy of the contract. Q. You didn't? Pardon me? A. I didn't have a copy of the contract until later. Q. When is later? A. Some months after exchange. Q. So you did get a copy after exchange, did you? A. Yes. Q. All right. And you read it, didn't you? A. Well there's reading and reading. Like if I read the newspaper, I can't say what was on page 47, but I -
4. In the specific performance proceedings he gave this evidence: Q. Have you ever read the contract? A. Yes, I have. Q. When was the first time you read the contract? A. I asked Mr Hanrahan for a copy of the contract at a later date and he - Q. When was that? A. I think a few months after we had exchanged contracts. Q. So you asked him to provide you with a copy? A. Yes. Q. You did? A. Yes. Q. You read through it? A. Yes. Q. You read all of it? A. Yes. Q. You read clause 33? A. Quite possibly. Q. You tell me, you did or didn't? A. Yes, I read the entire contract. Q. You saw that that contract dealt with people dying? A. It's possible. Q. That didn't cause you any concern? A. Well, I'd been to the solicitor, he gave me legal advice, I assumed that he was correct.
5. In the present proceedings he was asked about having a copy of the special conditions in the contract and reading the contract. He gave this evidence: Q. You were given a copy of the special conditions for the contract in the meeting with Mr Hanrahan on 7 May, weren't you? A. No. Q. In any event, you don't deny do you that by the end of 2012 you had a copy of the contract? A. I did. Q. Including the special conditions? A. I did. Q. Yes. So you say that you got a copy from Mr Hanrahan, did you? A. Yes. Q. And you read through the contract? A. Not immediately, no. Q. No, I'm not asking you about immediately. You read through it when you got a copy? A. No. Q. Well, you read through all of it didn't you? A. I have read through all of it. Q. Well, let me take you please in MFI 1, that's the narrow folder I gave you before? A. Yes. HIS HONOUR: Q. It's the folder with the specific performance proceedings documents in it. HARDING: Q. Do you have that folder? A. I do, yes. Q. Turn to tab 6, please, commencing at page 82. And picking it up at about letter U do you see you were asked a question whether you read the contract and you said "no". Do you see that question at letter U, you didn't read it at all? A. Yes. Q. You said "no". A. Yes. Q. And then you were asked, "Have you ever read the contract?" and you said, "Yes, I have". A. Yes. Q. You were asked, "When was the first time?" and you said, "I asked Mr Hanrahan for a copy of the contract at a later date". A. Yes. Q. And then you were asked, "When was that?" And you said, "I think a few months after we had exchanged contracts". Do you see that? A. That's correct. Q. So you asked him to provide you with a copy, you were asked and you said, yes. A. Yes. Q. Yes. And you agreed that you read through it? A. Right. Q. Do you see that at letter G-- A. I do see it. Q. --on page 83? A. Yep. Q. And you read all of it and you agreed with that at letter H? A. In a fashion, yes, I would have read through it. Q. "In a fashion"? You just said you read through all of it, you agreed to that, didn't you? A. I'm not - well-- Q. You don't say "in a fashion". A. It's like with an insurance contract, I don't read every line. Q. You were asked then specifically at letter I whether you read clause 33 and you answered "Quite possibly". A. Quite possibly, that's correct. Q. Well, then you were asked, "You tell me, you did or didn't?" And then you said, "Yes, I read the entire contract". A. Right. Q. So do you agree now that at least by the end of 2012 you had been provided with a copy of the contract and read the entirety of it, including clause 33? A. Which I'd already been advised on. Q. That didn't answer my question. A. Okay. I read-- Q. You read the contract-- A. Right. Q. --during 2012, including clause 33, didn't you? A. Yes. Q. You saw that the contract dealt with people dying? A. That's simplifying the clause. Q. Did you or didn't you see when you read the contract that it dealt with people dying? A. That I'd already had legal advice on. HIS HONOUR: Q. That wasn't an answer to the barrister's question. A. Right. I did read it, yes. HARDING: Q. In 2012. A. Right.

Did Mr Fussell have the funds to settle?

1. On 19 July 2016 Mr Fussell sent an email to Mr Brown which said: I have the finance sorted and I am ready to settle on this property. At your convenience give me a call and we can work out the next step.
2. Mr Fussell said that on or about 25 July 2016 he spoke with Lisa Badri, an employee at the Parramatta branch of St George Bank ("the Bank"). She told him the Bank had a problem settling the mortgage because Mr Lockrey had a life estate over the entire property.
3. Although Mr Fussell claims that he then rang Mr Brown to tell him about the problem, there is no entry in Mr Brown's electronic record of a phone call with Mr Fussell at that time. The electronic record and Mr Brown's affidavit, suggests that Mr Brown became aware of the problem by reason of an email exchange between Ms Badri at the Bank and Mr Brown's employee, Mr Sujono. Ms Badri had asked for the transfer to be amended. Mr Brown replied to Ms Badri's email saying: Our client is only purchasing an interest in remainder. The amendment you seek would not produce this.
4. That email was copied to Mr Fussell and he forwarded an email to Mr Brown on 28 August saying (inter alia): Steven, I am looking at the last email that was sent to St George Bank. I don't believe the statements you have made reflect how I want this to be handled. I have already sorted a few issues relating to this finance. What has been said will set off alarm bells to the bank and they may very well withdraw their offer of finance.
5. Mr Brown said that after he received Mr Fussell's email he had a telephone conversation with Ms Pierce at CLS Legal. Later that day, Mr Brown received a letter from CLS Legal which said the following (inter alia): We note the following moneys are currently outstanding from your client: 1. $500,000 payable lo our client on or about exchange for certain additional items that our client sold to your client; 2. The rent due and payable under the lease; and 3. The price of the demountable home payable under clause 48.2 on completion. … We note that the life estate is an essential term of the contract. In reference to your comments regarding stamp duty on the life estate, this has already been contemplated by clause 49.5. Our client would be willing to agree to an early completion.
6. It seems likely from the terms of that letter that Mr Brown must have referred to the life estate issue that Ms Badri had raised.

Did Mr Brown breach his duty of care?

1. Effectively, only two complaints are made about Mr Brown. The first is that he failed to advise Mr Fussell of the presence of cl 33.2 until after Mr Lockrey had died. Secondly, he failed to arrange settlement of the contract prior to Mr Lockrey's death.
2. For the reasons already given, not only did Mr Brown inform Mr Fussell of cl 33.2 before Mr Lockrey's death, but Mr Fussell was well aware of cl 33.2 because he had been advised about it by Mr Hanrahan and, even if that is not correct, he was aware of it by the time he came to see Mr Brown because he had read the clause after Mr Hanrahan sent him copies of the special conditions. It was because he was aware of the clause that he sought to settle the contract early when he first came to see Mr Brown. He told Mr Brown he was worried that Mr Lockrey might die. That concern reinforces the view I have that Mr Fussell was well aware of cl 33.2 when he retained Mr Brown to act for him.
3. Nor did Mr Brown breach his duty of care by failing to arrange settlement of the contract prior to Mr Lockrey's death. The evidence discloses clearly that in August and September 2016 Mr Fussell did not then have the funds to complete the settlement because the Bank was not prepared to lend him the money that he needed to top up what he had to pay the purchase price. That was because of the issue with the life estate.
4. But quite apart from that issue, the evidence discloses that Mr Lockrey was only to prepared to settle at that time if Mr Fussell paid an extra $1.5 million being $1 million for the life estate and the further $500,000.00 which the vendor's solicitor was claiming Mr Fussell owed as payment in connection with various items he was acquiring in addition to the property. That latter amount was said to have been paid prior to exchange. Mr Fussell made it clear to Mr Brown, and it was conveyed to Ms Deigan, that Mr Fussell was not prepared to pay the extra amounts demanded for early settlement.
5. In the conversation on 1 May 2017, Mr Fussell said he was arranging funds to complete the purchase. Mr Brown told him to let him know when he was ready and Mr Brown would contact the solicitors to arrange settlement. That was followed by Mr Brown sending an email which stressed that he needed to know when Mr Fussell had the funds to complete. The email asked Mr Fussell to get back to him so that they could arrange settlement.

Damages

1. Judges at first instance are encouraged, where they find judgment for a defendant to embark, nevertheless, on a hypothetical calculation of damages, in the event that they are found to be in error on liability. That is often a relatively straightforward exercise where the claim is one for personal injury or medical negligence. It is not so straightforward in commercial cases or cases such as the present, because so much depends on discrete fact finding. One of the particular difficulties in the present case is that the damages claimed are for loss of a chance to achieve certain things. My findings, particularly in relation to whether Mr Lockrey would have agreed to changes in the contract, make it difficult to proceed on a different hypothetical.
2. Nevertheless, what follows is put forward on the assumptions that both Mr Hanrahan and Mr Brown breached their duties of care to both Mr Fussell and Blue Star, and that those breaches caused the losses claimed by both plaintiffs.

Mr Fussell

1. The plaintiffs submitted that the loss of chance was in the order of 80%. Mr Brown submitted that, if the Court finds that Mr Fussell suffered a loss of opportunity to settle early or by 10 May 2017, the value of the loss is to be assessed on the probabilities that an early settlement would have occurred. Mr Brown submitted that the probabilities of that occurring were nil or very low because Mr Fussell had rejected an offer to settle early for the payment of an extra $1.5 million. Mr Brown submitted also that the loss of opportunity should be subject to a substantial reduction on the basis that Mr Fussell did not have the funds to settle by or about 10 May 2017 before Mr Fussell's death. For present purposes, I must assume that Mr Fussell did have the funds to complete on or about 10 May 2017 and that settlement would have been achieved.
2. In relation to Mr Fussell, his loss is confined to the value of the land. Valuations of the land were obtained at various dates. Ultimately, agreement was reached as to the value of the land at various dates. The dates and values are as follows: 1. May 2017 Mr Lockrey's death $5,250,000 2. Oct 2017 Probate - contract validly rescinded $5,550,000 3. Dec 2019 Decision of Court of Appeal $5,815,000 4. Nov 2022 $11,050,000
3. The plaintiffs submitted that the appropriate date was December 2019 when the Court of Appeal gave judgment, alternatively, October 2017 when the notice of rescission was served. Mr Brown submitted that the appropriate date was May 2017 when the cause of action accrued. Mr Hanrahn submitted that the appropriate date was the date the contract was entered into, when Mr Fussell did not get the package of rights he had contracted for. That is to say, he obtained a contract saddled by cl 33.2 and the life estate issues. Mr Hanrahan relied in that regard on what was said in D'Agostino v Anderson [2012] NSWCA 443 at [11]. D'Agostino was one of many cases to like effect that relied on what was said in Forster v Outred [1982] 1 WLR 86; [1982] 2 All ER 753 and subsequently in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55.
4. In my opinion, entry into the contract containing cl 33.2 amounted to no more than sustaining "a detriment in a general sense" (Wardley at 527). The joint judgment in Wardley went on to say (at 527): In UBAF Ltd v European American Banking Corporation, Ackner LJ said: "The mere fact that the innocent but negligent misrepresentations caused the plaintiffs to enter into a contract which they otherwise would not have entered into, does not inevitably mean that they had suffered damage by merely entering into the contract." That is because it was not self-evident that the value of the chose in action which the plaintiff acquired, the right to repayment of a loan, was worth less than the amount paid to the borrower at the time of entry into the loan agreement. Evidence was required to establish that fact, if it were a fact. (citations omitted)

Blue Star

1. The claim on behalf of Blue Star against both Mr Hanrahan and Mr Brown is for all of the amounts paid as rent, insurance, rates, and other property expenses (hereafter referred to as the "property expenses") for the six years of the lease, together with Mr Fussell's legal costs in the specific performance proceedings, and the costs Mr Fussell was ordered to pay Mr Lockrey with respect to those proceedings.
2. Since the property expenses are said to fall within the description of reliance damages, the assumption must be, although this was not made clear in the plaintiffs' submissions, that these expenses were expended because Blue Star would be conducting its business at the property after the six year lease expired.
3. There are a number of problems in relation to Blue Star's claim. First, before Blue Star was incorporated, Blue Star Enterprises (a partnership between Mr Bernard Fussell and one or more of his sons) moved onto the property, paying rent to Mr Lockrey of $1000 per week with no lease in place between them. Blue Star Enterprises continued to conduct its business from the property, at least up until April 2016, as Mr Fussell admitted. Further the business conducted on the property by Blue Star Enterprises was "very similar" to the business conducted by Blue Star. Blue Star Enterprises owned all of the plant, vehicles and equipment. Blue Star Enterprises owned the only EFTPOS terminal on the property. Blue Star Enterprises made some of the rent payments under the lease that Blue Star entered into with Mr Lockrey. Indeed, in the specific performance proceedings it was only Blue Star Enterprises that was pleaded as conducting business from the property. Blue Star was said to be only the lessee under the lease.
4. Despite that intermingling of the affairs and businesses of Blue Star and Blue Star Enterprises, the plaintiffs' approach was to tender in Exhibit BJF-2 and Exhibit E bundles of documents containing rent receipts, bank statements and other financial documents, some of which, in any event, made clear that it was Blue Star Enterprises which had borne the liability. Initially, schedules in the Court Book at pp 1659ff, and subsequently MFI 9 were relied on as proof of Blue Star's loss. Objection was taken to those documents, and I ruled that they could only be regarded as submissions.
5. The plaintiffs' written submissions identified totals of categories of expenses which cannot be accepted at face value as demonstrating what Blue Star had incurred, by reason of Blue Star Enterprise's involvement, as mentioned above.

Conclusion

1. I make the following orders: 1. Judgment for the first and second defendants. 2. Judgment for the third defendant. 3. The plaintiffs are to pay the defendants' costs.

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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 November 2024