GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE... [2011] WASCA 107 | Case summary

GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE... [2011] WASCA 107 | Case summary | Zoe

[134]

50 The sixth and final preliminary observation is this. There is no challenge to the judge's findings that the case was not put in the court below ([327(b)], [332]), and nor was it contended in this appeal, that at some point in time prior to Mr Witcombe's death, during the course of the respondent solicitors' retainer, it had become apparent that he had only a short time to live, and could not hope to finalise his claim during that period. A claim of that kind would likely have raised for consideration issues not dissimilar to those which arose in the English case of Pearson v Sanders Witherspoon [1999] EWCA Civ 3032; [2000] Lloyd's Rep PN 151; [2000] PNLR 110. In that case, solicitors were retained by a client in 1988 to bring proceedings against a defendant company. The defendant company was in some financial difficulty in 1989, although it survived the setback and undertook a successful rights issue in 1990. There was delay in the prosecution of the action. In 1992, the client changed solicitors and instructed a second firm of solicitors. Eventually, the plaintiff's claim went to trial in 1996, by which time the defendant was insolvent and had no assets. The client sued both firms of solicitors for failing to bring the proceedings timeously so as to allow him to obtain judgment before the defendant's liquidation and to recover, thereby, substantial damages. The trial judge dismissed the claim against the second firm of solicitors, but held that the first firm of solicitors were liable on the basis that from the inception of the retainer, there was a foreseeable, in the sense of not just a fanciful, risk that the defendant might go into liquidation, and awarded substantial damages against the first firm of solicitors accordingly, with only a modest discount for the contingency that the defendant company may have lacked the ability to pay a judgment debt. In overturning the trial judge's decision against the first firm of solicitors, the Court of Appeal held that whilst the solicitors were in breach of duty, their liability for the consequences resulting from the defendant company's insolvency could only fairly be assessed from the time it became apparent, in August 1991, that the defendant was in serious financial difficulty. At that point, the solicitors should have pressed for the matter to be brought to trial swiftly. The failure to do so was the relevant causative breach. That course, had it been taken, would likely have resulted in judgment at a date in June 1993, prior to the defendant's liquidation, but only shortly before (six months or less) its receivership. The assessment of the chances of recovering the fruits of judgment were to be viewed in that light, and the chances of recovery then were only 50/50.

[189]

In cross-examination it was put to Mr O'Sullivan [the insurer's solicitor] that there was a general policy that it was preferable for disabled people to live in the community rather than in institutional care. Mr O'Sullivan did not agree in terms with that proposition. He said that there needs to be a balance between the needs of a plaintiff and the interests of a defendant, that it was a question of reasonableness, and that each case needed to be considered on its merits (ts 445). I take Mr O'Sullivan's answer as reflecting the approach that he would have taken in 2001 and 2002.

In the course of cross-examination it was put to Mr O'Sullivan that a difference between $110,000 per annum for institutional care and $143,000 for home care was 'a readily bridgeable gap if the parties were seeking to compromise' (ts 447). Mr O'Sullivan did not in terms express agreement (or disagreement) with that proposition. He said that the significance of a difference like that would be influenced by Mr Witcombe's life expectancy, as well as the cost of home modification.

Mr O'Sullivan was taken through most of the heads of damage claimed by Mr Witcombe and invited to identify those where he thought issues were likely to have arisen (ts 461). The major area that would have required at least consideration, discussion and further evidence was the question of future care, including whether Mr Witcombe should be cared for at home, the cost of home modification, and future medical needs. Other matters requiring further consideration and discussion included the claim for gratuitous services and the claim for a vehicle (ts 461).

It was put to Mr O'Sullivan that in Mr Witcombe's case it was more likely than not that a compromise would have been reached (ts 462). Mr O'Sullivan's response was 'I don't think I can answer that'. He referred to the fact that statistically most cases settle and in that sense it was more likely than not, but, he said, in this particular matter there was still further evidence to come forward and issues of capacity, life expectancy and future care outstanding (ts 462).

[256]

What, then, is the proper measure of damages in the present case? I was referred by Mr Bell to the well-known rule in Hadley v Baxendale as expounded in the more recent decision of Victoria Laundry (Windsor) Ld v Newman Industries Ld, Coulson & Co Ld (Third Parties), which established that damages for breach of contract should be such as would naturally be expected to flow from the breach, or such as may reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it. It seems to me impossible in this case to apply that latter test having regard to the nature of the breach of contract. Therefore, I have to consider what are the damages which may naturally be expected to flow from the breach.

It is perfectly true that if Michael [the son] had continued to live damages would have been nominal. Are they, however, to be limited to the damages which he could have recovered in his own lifetime, as Mr Bell submitted? Not in my judgment. It is contrary to common sense to suppose that damages in a case such as this must only be nominal merely because, had the mistake been discovered in the lifetime of the deceased, it could have been rectified. The true method of approaching the problem, in my judgment, is this: if the mistake was discovered in Michael's lifetime it was his duty, of course, to mitigate damages, and, indeed, reduce them to a nominal sum by executing a disentailing deed if he so desired; but it may well be that the mistake is not discovered until after his death. If the mistake is not discovered till after his death, Michael has been deprived of the opportunity of increasing his estate by executing a disentailing assurance relating to the settled property, and, therefore, upon his death, his estate may be diminished by that amount.

...

In my judgment ... I am not bound to hold that damages in this case are only nominal merely because the deceased could only have recovered nominal damages in his lifetime.

...

What, then, is the true measure of damages? The relevant facts upon that question seem to be these: it was certainly more than a remote possibility that Michael would be killed while on active service, and, therefore, damages might naturally be expected to flow from the failure to give proper advice. Mr Bell submitted that, even upon the footing that he was wrong upon his first point, viz, that the personal representative could not claim greater damages than the deceased could have claimed in his own lifetime, even so damages are nominal. I reject that argument. In the circumstances of this case, there was a serious possibility that the failure to give him correct advice would lead to his estate losing the whole of the settled property.

GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE -v- TALBOT AND OLIVIER [2011] WASCA 107 (29 April 2011)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (269 paragraphs)

GLENYS JUNE WITCOMBE as Executrix of the Estate of KEITH MALCOLM WITCOMBE -v- TALBOT AND OLIVIER [2011] WASCA 107 (29 April 2011)

The effect of the respondent solicitors' negligence

Legislation Cited (3)

Cases Cited (25)