LIABILITY OF PAS
20 Before considering the submissions of the parties, it is appropriate to record certain evidence concerning the relationship between PAS and the Chungs.
21 There was no written agreement between them for the management of these premises, but there was such an agreement in relation to adjoining premises which the Chungs had purchased earlier. Clause 13 of that agreement provided as follows:
The Agent is authorised to arrange repairs and maintenance to be done in accordance with the Principal's obligations to repair (if any) or as otherwise instructed or to engage skilled tradesmen to effect repairs and maintenance, provided that expenditure in excess of $N.A. for any one item shall not be incurred without the prior approval of the Principal except where it is the Agent's opinion that because of an emergency, repairs are necessary for the protection of the premises or the supply of essential services to tenants.
22 Mr. Chung gave evidence that he left repairs and maintenance to the Managing Agent, who would be expected to attend to them, and that he would be aware of them only if there had been deductions for repairs in the rental statements. However, he did concede that if the cost was "too big" the agent would notify him and he would normally approve the work.
23 Mr. Nickolas gave evidence that, whilst in relation to minor matters tradespersons would be engaged by the agent to do work, in the case of major matters he would have consulted the Chungs.
24 The primary judge made no particular finding about these matters.
25 Mr. Donaldson SC for PAS submitted that the primary judge did not determine what the duty of the agent was, and accordingly made no proper determination as to whether there had been any breach of that duty; and furthermore made no proper determination as to whether any damage to Mr. Ghabash flowed from any such breach of duty. He submitted that the agent's duty could conceivably be either to exercise some authority to effect repairs, or alternatively to report complaints to the owner. As regards the former possibility, Mr. Donaldson submitted that it was not shown that relevant repairs in this case were within the scope of what the agent could do of its own initiative; and as regards the latter duty, there was no finding that the agent did not report complaints to the owner. Furthermore, causation of loss was not shown in relation to any breach of the duty to report: if the agent had reported complaints, it would have been doing no more than telling Mr. Chung what he knew already.
26 Mr. Kennedy SC for Mr. Ghabash relied principally on the submission that Mr. Nickolas had, in breach of duty of care, failed to pass on complaints to Mr. Chung. Both Mr. Nickolas and Mr. Chung gave evidence that no such complaints were passed on, and the primary judge accepted Mr. Ghabash's evidence that he had made complaints to Mr. Nickolas on a number of occasions. Mr. Nickolas' failure to pass on the complaints guaranteed that nothing would be done. Mr. Kennedy submitted that Mr. Chung's evidence was that if he had been told about the problem, he would have done something about it. Although the primary judge did not expressly find that Mr. Nickolas did not pass the complaints on or that, if he had done so, Mr. Chung would have attended to them, the Court of Appeal can and should make those findings. At the very least, there should be a new trial.
27 In my opinion, in circumstances where the required repairs were on the face of them quite major repairs and it was not shown what their cost would be, it was not shown that the problem was one which, according to the arrangement existing between PAS and the Chungs, the necessary repairs could or should have been undertaken by PAS on its own initiative. Accordingly, even if there could be liability of an agent in those circumstances, as to which I express no view, no such liability was shown here.
28 Accordingly, PAS's liability would require findings, firstly, that PAS failed to pass on complaints made to it, and secondly, that if these complaints had been passed on, the necessary repairs would have been done.
29 In my opinion, the first finding was certainly not made by the primary judge, nor in my opinion does it follow from the findings that he did make. Mr. Ghabash gave evidence that in 1995 Mr. Nickolas told him he would pass on his complaints (for example, in March or April 1995) and that Mr. Nickolas told him in about August 1995 that the owner was not willing to spend money. The primary judge did not specifically accept this evidence, but his preference of the evidence of Mr. Ghabash over that of Mr. Nickolas implies that he did. The primary judge rejected evidence both of Mr. Nickolas and Mr. Chung, given in 2003 about events that occurred around eight years earlier. In my opinion, that gives no sound basis for finding that, contrary to what Mr. Nickolas said at the time, he did not report complaints to Mr. Chung as (on the primary judge's view of the evidence before him) he then said he would, and did not have the instructions from Mr. Chung about not spending money that Mr. Nickolas then said he had.
30 In my opinion, the primary judge's finding that Mr. Nickolas and Mr. Chung were wrong in 2003 in what they said happened in 1995 does not of itself justify a finding that Mr. Nickolas did not at the time in 1995 do what he said he would do or that he subsequently reported dishonestly concerning the owner's intentions. In my opinion, there is no sound basis for this Court to make a finding that the complaints were not reported to Mr. Chung; nor in my opinion should the matter be sent back to the primary judge. It is true that, in the submissions to the primary judge, Counsel for PAS concentrated on the factual issues between Mr. Ghabash and Mr. Nickolas and did not specifically address the nature of PAS's duty of care and what was required to prove breach of duty and causation of loss; but in my opinion, that did not absolve Mr. Ghabash from the necessity of establishing what PAS's duty was, that there was a breach of such duty and that this caused loss; nor did it in my opinion absolve the judge from the necessity of addressing those fundamental questions.
31 As regards the second matter, the primary judge did not find that Mr. Ghabash was caused loss by reason of Mr. Nickolas' failure to report matters to Mr. Chung. In my opinion, such a finding does not follow from the conclusions that the primary judge made. That is, even if there were a finding that Mr. Nickolas did not report complaints to Mr. Chung, that does not affect the primary judge's finding that Mr. Chung himself already knew enough that he should, as a reasonable lessor, have attended to the problem. I do not think the findings of the primary judge are such that this Court should find that causation was established in this way, nor do I think the matter should be sent back to the primary judge.
32 It could be submitted in the alternative that Mr. Ghabash lost a chance that, if his complaints had been reported, this may have changed Mr. Chung's attitude. I do not think this is the kind of commercial chance for which compensation is available on the principles discussed in Sellars v. Adelaide Petroleum NL (1994) 179 CLR 332.