Plaintiff v Defendant

ESTOPPEL - Promissory estoppel - Whether the defendant was estopped from denying the sale and purchase of the assets of a legal practice of which he was appointed a receiver - Whether defendant's conduct induced in the plaintiff a reasonable belief that an agreement had been reached - Held that conduct of defendant contributed to plaintiff's assumption that they would be the purchaser, but there was no material detriment suffered by the plaintiff in reliance upon his mistaken assumption - Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 and Pipikos v Trayans [2018] HCA 39; (2018) 265 CLR 522 referred to - Held that it was not unconscionable for the defendant to resile from giving effect to the plaintiff's mistaken assumption - Held that there was no estoppel by convention as both parties did not act upon a mutually held assumption as to a matter of fact or legal effect.

LEGAL PRACTITIONERS - Receiver - Whether the defendant was immune from any liability to the plaintiff by reason of s 366 of the Legal Profession Uniform Law Act 2014 (Vic) ('Uniform Law') - Whether the defendant's breach or repudiation of an agreement directly involved, or was merely incidental to, the exercise of his powers and functions under the Uniform Law - Rowson v Alpass (2017) 53 VR 196 and Board of Fire Commissioners (NSW) v Ardouin [1961] HCA 71; (1961) 109 CLR 105, referred to - Held that the defendant's conduct falls outside the scope of the immunity provision.

CAUSATION - Whether the plaintiff suffered a loss of opportunity by reason of the defendant's alleged repudiation or breach of an agreement - Plaintiff's standing to sue on the alleged repudiation or breach of contract - Whether, on the balance of probabilities, the purchaser of the assets of a legal practice would have been able to obtain a practising certificate with trust authorisation - Held that if an enforceable agreement had been made, the plaintiff failed to establish that he suffered loss as a result of the defendant's repudiation of the agreement - Held that the plaintiff was not ready, willing and able to perform his obligations under the agreement.

LOSS AND DAMAGE - Quantification of loss and damage claim - Reliability of expert opinion as to the value of the lost opportunity - Held that it would have been possible to assign a value to the opportunity lost by the plaintiff as a consequence of the alleged repudiation of an agreement based upon evidence of plaintiff and expert opinion - Keys Consulting Pty Ltd v Cat Enterprises Pty Ltd [2019] VSCA 136 referred to - Held that if an actionable estoppel was found in favour of the plaintiff, equitable compensation would be limited to costs thrown away by the plaintiff incurred by reason of his mistaken assumption.

1 The legal practice known as 'Hardy's' was established in 1983 following a series of amalgamations, and had developed a significant presence in Dandenong,[1] with a substantial criminal, family law, conveyancing and wills and probate practice. However, the firm was shattered by an investigation into its affairs by the Legal Services Board ('LSB') in the early 2010s which revealed a number of trust account defalcations and other irregularities, which were ultimately sheeted home to its managing partner, the late Mr Robert Hession.[2]

2 On 15 February 2016, this Court appointed the defendant, Mr Alan Alpass, as the receiver of Hardy's pursuant to s 341 of the Legal Profession Uniform Law 2014 (sch 1 to the Legal Profession Uniform Law Application Act 2014 (Vic) ('Uniform Law').[3] Mr Alpass is a legal practitioner. He was admitted to practice in 1975, and owns and manages a substantial suburban legal practice, Alpass & Associates, based in Kilsyth. By the time Mr Alpass was appointed as receiver, the family law practice of Hardy's had been taken over by a former partner, leaving Mr Alpass with 35 active files, a collection of archived files, sundry office furniture and equipment, and approximately 6,000 deed packets ('deeds').

3 The main task facing Mr Alpass as receiver was the sale of assets of Hardy's ('Hardy's business'). To that end, Mr Alpass placed an advertisement in the April 2016 edition of the Law Institute Journal ('LIJ ad').[4]

4 In addition to receiving two rather derisory offers for the Hardy's business early in the piece, between July and September 2016 Mr Alpass was in serious discussions with two prospective purchasers, including the plaintiff, Mr Mark Rowson, a businessman and occasional paralegal, who was also an associate of a now deceased solicitor, Mr Darroll Nelson.

5 Mr Rowson had a personal connection with Hardy's. His late father was the managing partner of Hardy's for many years until about 1995, when he had a falling out with Mr Hession. After that he ran his own legal practice, with the occasional assistance of Mr Rowson, until his death in 2015.

6 Mr Rowson is not a lawyer. Now in his mid 50s, he has owned and operated a number of businesses over the years, and is now a self-employed information technology consultant. He presents as an intelligent, enterprising and resourceful man. Unfortunately, he has not always utilised his skills wisely, having been incarcerated twice over the past two decades, once in connection with an elaborate tax fraud scheme, to which he pleaded guilty, and more recently, after being found guilty of theft and obtaining a financial advantage by deception over the course of 2013 and 2014, to which he pleaded not guilty. He served approximately four years in prison between 2018 and 2022 for the latter offences, with his sentence extended for a further two months after pleading guilty to a charge of attempting to pervert the course of justice. This charge related to his falsification of a character reference for a friend facing a sentencing hearing in the County Court in 2015.

7 Returning now to the events connected with the issues in this proceeding, the approach to Mr Alpass by Messrs Rowson and Nelson was made in the context of discussions they had in the period after the death of Mr Rowson's late father. Mr Rowson first met Mr Nelson, who was a friend and professional associate of his father, in about 1987. After losing touch with Mr Nelson for a period of time, from about 2013 Mr Rowson regularly had lunch with Mr Nelson and his father. By that time, Mr Nelson was approaching his 80s, and his legal practice had dwindled away, no doubt not assisted by periods when his practising certificate had been suspended or surrendered for disciplinary reasons.

8 Mr Rowson and Mr Nelson discussed buying a small legal practice with an extensive deeds collection, with a plan to utilise the deeds for marketing and practice development purposes. Mr Rowson had access to some funds after his father's death, with a portion of his father's estate (somewhere between $160,000 and $200,000) ultimately paid into a trust fund managed by his brother, Gavin Rowson ('trust'). Mr Rowson planned to utilise his administrative and information technology skills to become, in effect, the practice manager, and they hoped that the new legal practice generate sufficient work to enable them to hire an employee solicitor with skills and experience in the wills and probate field.

9 What transpired during the discussions between Mr Rowson and Mr Nelson on the one hand and Mr Alpass on the other hand is discussed in some detail later in these reasons. However, to put it neutrally, their bid to purchase the Hardy's business for $25,000 was unsuccessful. On 12 September 2016, Mr Alpass wrote to Mr Rowson and Mr Nelson telling them that the Hardy's business had been sold. This letter was sent a few days after Mr Alpass executed a contract of sale selling the Hardy's business to Ms Jan Knight, another legal practitioner, for $20,000.

10 After receiving this letter, Mr Rowson and Mr Nelson engaged a solicitor. On 15 September 2016, their solicitor, Mr Christopher Dale, wrote to Mr Alpass asserting that there was a binding agreement between the parties for the sale and purchase of the Hardy's business, and demanded that Mr Alpass put the settlement of the sale to the other purchaser on hold. Mr Alpass refused, and, following further correspondence between Mr Dale and Mr Alpass, this proceeding was issued on 3 October 2016.

11 Subsequent events have affected the progress of the proceeding to trial, and are also relevant to the issues in the proceeding, in particular, Mr Rowson's claim for loss and damage ('loss and damage claim'). Mr Nelson died on or about 15 August 2017, of an illness contracted during a hospital stay for treatment of a fractured spine after a fall. In 2018, Mr Rowson was tried and found guilty of three charges of obtaining a financial advantage by deception and 23 counts of theft, and was sentenced on 5 December 2018, with a non-parole period of approximately four years. He was first incarcerated in relation to these charges on 15 March 2018, but was released on bail later in 2018 to undergo medical treatment for a serious cardiac condition. He was released from prison in late 2022.

12 As noted earlier in these reasons, this proceeding was commenced shortly after the relevant events, on 3 October 2016, with both Mr Rowson and Mr Nelson as plaintiffs. However, some of the subsequent events outlined above, along with an absence of legal representation for a significant period of time, caused substantial delays in bringing the proceeding to trial. The trial of the proceeding was first set down to commence on 30 June 2020, but Mr Rowson's ongoing incarceration, lack of legal representation, and complications associated with COVID-19 pandemic restrictions meant that the trial did not commence until more than three years later.

13 The pleadings in this proceeding were summarised by Derham AsJ in reasons published with respect to a strike out application bought by Mr Alpass in early 2017. The following summary is adapted from the reasons delivered on 7 July 2017 ('strike-out reasons').[5]

14 Mr Rowson and Mr Nelson ('plaintiffs') pleaded that in June 2016, Mr Alpass sought expressions of interest for the purchase of the Hardy's business. On 20 July 2016, Mr Rowson contacted Mr Alpass, expressing such an interest. The following day, the plaintiffs and Mr Alpass had a meeting at which, the plaintiffs alleged, an oral agreement was entered into for the purchase of the Hardy's business for $25,000, ('agreement'). It was also agreed between the parties that Mr Alpass would prepare a contract to give effect to the agreement.

15 The plaintiffs alleged that Mr Alpass breached the agreement by not preparing the contract and endeavouring to subsequently impose a further term, being that Mr Nelson obtain a practising certificate with authority to hold trust money ('extended practising certificate'). The plaintiffs alleged that Mr Nelson initiated the process to obtain an extended practising certificate, which was made known to Mr Alpass. However, on 12 September 2016, Mr Alpass purported to repudiate the alleged agreement, by informing the plaintiffs that the Hardy's business had been sold.

16 The plaintiffs contended that based on the agreement and Mr Alpass' conduct, they registered a new incorporated firm, HNR Lawyers Pty Ltd ('HNR'),[6] relinquished the lease for their existing premises on 18 August 2016, sought new, larger premises, and commenced negotiations for and agreed to lease new premises for a period of four years.

17 Accordingly, the plaintiffs alleged that they have suffered loss and damage, said to be 'the net present value of the future potential earnings of the [Hardy's business] and the replacement value of the fixed and floating assets of the [Hardy's business]'. The plaintiffs further asserted that they were ready, willing, and able to perform the agreement by paying the purchase price. In their prayer for relief, the plaintiffs sought a declaration that there was a valid agreement to purchase the Hardy's business, a declaration that the plaintiffs hold an equitable interest in the Hardy's business, an order that Mr Alpass be estopped from unilaterally terminating the agreement, an order for specific performance of the agreement, and alternatively, damages.

18 In his defence, Mr Alpass denied the agreement. He contended that an offer to purchase the Hardy's business was made, broadly on the terms of the agreement (with some additions), by telephone on 21 July 2016 ('offer'). Later that day, the offer was repeated by email ('21 July email') and Mr Alpass said that the offer was neither accepted nor rejected.

19 Mr Alpass agreed that a meeting took place on 21 July 2016 with the offer made the next day, but denied that the meeting occurred as the plaintiffs alleged. Mr Alpass said that during the meeting, the plaintiffs told him that they wanted to inspect the files of the Hardy's business with a view to making an offer to purchase them. Mr Alpass provided them with a list of the files, and allowed the plaintiffs to inspect them at a storage facility.

20 Mr Alpass admitted that in the course of a telephone conversation between him and Mr Rowson on 25 July 2016:

(a) he advised Mr Rowson that it was a prerequisite of the sale that the purchaser have an extended practising certificate;

(b) Mr Rowson advised him that he did not, and could not obtain a practising certificate, accordingly the purchase would need to be in the name of Mr Nelson; and

(c) Mr Alpass said that Mr Nelson, whilst holding a practising certificate, did not have an extended practising certificate, and accordingly could not be the purchaser of the Hardy's business.

21 Mr Alpass also admitted to various conversations in which he was advised that Mr Nelson was seeking an extended practising certificate. Mr Alpass declined a subsequent offer by Mr Rowson to provide a deposit for the purchase of the Hardy's business, and said he would sell the Hardy's business to any third party and would only accept a deposit once a purchaser could enter into a binding contract of sale, which neither plaintiff could.

22 Mr Alpass also said that pursuant to s 366 of the Uniform Law ('immunity provision'), he is immune from liability in respect of any act or omission done by him in good faith in the exercise or purported exercise of his functions under Chapter 6 of the Uniform Law, which he said includes the sale of the Hardy's business.

23 Mr Alpass' strike out application was based upon his contention that by reason of the immunity conferred upon him by the immunity provision, the claims made by Mr Rowson and Mr Nelson were untenable in the absence of any pleaded allegation that in repudiating the alleged agreement, Mr Alpass acted otherwise than in good faith. The strike-out application was unsuccessful, for reasons which will be the subject of further discussion later in these reasons.

24 Following Mr Nelson's death, Mr Rowson applied for and was granted leave to proceed in the absence of a person to represent Mr Nelson's estate. Mr Nelson was ultimately removed as a party to the proceeding. On 10 May 2018, Mr Rowson filed an amended statement of claim, which is the current version of the pleading.

25 The amended statement of claim did not substantially alter the claims pleaded in the original statement of claim, but provided further detail regarding the terms of the agreement and the subsequent communications between the plaintiffs and Mr Alpass. The amended statement of claim pleaded that the parties entered into an oral agreement at a meeting commencing at about 10.45am on 21 July 2016, during a telephone call between Mr Rowson and Mr Alpass commencing at 3.08pm on 21 July 2016, and the agreement was confirmed in the 21 July email, which was sent by Mr Rowson at 3.23pm that day.

26 The plaintiffs pleaded that the terms of the agreement were as follows:

(a) the plaintiffs would buy from Mr Alpass and Mr Alpass would sell to the plaintiffs the Hardy's business for $25,000;

(b) the sale of the Hardy's business was unconditional and not subject to finance;

(c) Mr Alpass would continue to manage the client files and be paid for the work in progress on the files on handover;

(d) the plaintiffs would incorporate a new legal practice to be the nominee/formal purchaser of the Hardy's business; and

(e) Mr Alpass would prepare a formal contract incorporating the terms above and to include 'or nominee' in the named purchaser.

27 The plaintiffs pleaded that they were at all times ready, willing and able to perform the agreement by paying the purchase price of $25,000 at a time, place and date convenient to the parties.

28 The plaintiffs pleaded that on 25 July 2016, during a telephone conversation between Mr Rowson and Mr Alpass, the agreement was varied to include a term that Mr Nelson would obtain an extended practising certificate and that the formal contract would be in the name of Mr Nelson or nominee.

29 The plaintiffs alleged that Mr Alpass breached the agreement by not preparing the formal contract, and repudiated the agreement by informing the plaintiffs on 12 September 2016 that the Hardy's business had been sold to another party. The plaintiffs pleaded that, as a consequence, the plaintiffs have suffered loss and damage:

In their various proportions, as to the shareholding in the Proposed Incorporated Firm being 2/3 to [Mr Rowson] and 1/3 to [Mr Nelson];

The Net Present Value of the future potential earnings of Hardy's and the goodwill associated with a prompt and orderly transition had the agreement been honoured, full particulars of which will be provided before trial.

30 In his defence to the amended statement of claim filed on 31 May 2018, Mr Alpass repeated the matters referred to in paragraphs 18 to 22 of these reasons. In addition to what was pleaded in his original defence regarding what transpired at the meeting on 21 July 2016, Mr Alpass said as follows:

He says further that he did not and was not able to enter an agreement to sell the assets of Hardys to either of [Mr Rowson or Mr Nelson] because:

(i) Hardys' files included files with money held in trust:

(ii) on the sale of Hardys, a principal of any law practice purchasing Hardys was required to hold an Australian practising certificate authorising the receipt of trust money, alternatively, the law practice purchasing Hardys was required to otherwise be authorised to receive trust money under the Uniform Rules, pursuant to s 150 of the Uniform Law:

(iii) at all relevant times.

(A) [Mr Rowson] did not have a practicing certificate of any type:

(B) [Mr Nelson] did not have a practicing certificate with authorisation to accept trust money and so was not able to receive trust money, pursuant to ss 150(a) and 153 of the Uniform Law: and

(C) HNR Lawyers was not authorised to receive trust money under the Uniform Rules.

31 Further, in response to the plaintiffs' allegation that they were at all material times ready, willing and able to perform the agreement by paying the purchase price, Mr Alpass said as follows:

He denies paragraph 14B and says further that:

(a) [Mr Nelson] died on or about 15 August 2017:

(b) until the filing of the amended statement of claim dated 10 May 2018, the plaintiffs sought specific performance of the alleged agreement:

(c) on 2 August 2013, the Victorian Civil and Administrative Tribunal found [Mr Nelson] guilty of nine counts of professional misconduct in relation to failing to adequately supervise an employee, accepting trust funds when not entitled to do so and for failing to provide information to the Commissioner in 2009 and cancelled [Mr Nelson's] practicing certificate for eight months. The Tribunal ordered that any future practising certificate to be issued to [Mr Nelson] was to be on the condition that he employ a bookkeeper approved by the Commissioner or make other financial arrangements approved by the Commissioner.

32 In his reply filed on 18 July 2018, Mr Rowson alleged, in summary, as follows:

(a) at the time that the parties entered into the agreement, Mr Alpass did not inform the plaintiffs that Hardy's held trust money and/or that they or the intended purchaser of the Hardy's business would be required to hold an extended practising certificate, and it was not made a condition of the agreement;

(b) on 25 July 2016 the agreement was varied to include a term to the effect that Mr Nelson would obtain an extended practising certificate, which he took steps to do;

(c) in response to Mr Alpass' contention that he neither accepted or rejected the offer, Mr Rowson said as follows:

...the Plaintiff's were induced to believe that [Mr Alpass] had accepted the terms of the offer and the Plaintiffs in pursuance of that belief, which [Mr Alpass] was well aware of, undertook steps in pursuance of that agreement, and [Mr Alapss is] thereby estopped from denying that there was a concluded agreement;

(d) Mr Nelson's death was no bar to the performance of the plaintiffs' obligations under the agreement, because had it not been for Mr Alpass' repudiation of the agreement, the agreement could have been performed by 15 August 2017; and

(e) Mr Rowson stated as follows in relation to the defence based upon the immunity provision:

[Mr Rowson] denies paragraph 21 and states that [Mr Alpass] in breaching and repudiating the Agreement (as pleaded in paragraphs 14A and 15 of the Amended Statement of Claim dated 10 May 2018), was not exercising his functions and powers under sections 343(1)(b) and 347(2) and or under sections 343(3), 336(1)(f), 336(1)(g) and 347((2) of the Uniform Law.

Further or in the alternative, [Mr Rowson] denies paragraph 21 and states that [Mr Alpass], in breaching and repudiating the Agreement (as pleaded in paragraphs 14A and 15 of the Amended Statement of Claim dated 10 May 2018), is not immune from liability under section 366 the Legal Profession Uniform Law Act 2014 (Vic) ("The Uniform Law") as such conduct was not a lawful exercise of his functions and powers under sections 343(1)(b) and 347(2) and or under sections 343(3), 336(1)(f), 336(1)(g) and 347((2) of the Uniform Law.

33 The discovery process was completed over the course of 2018. On 11 February 2019, by which time Mr Rowson was in prison, Mr Rowson dismissed his solicitor, and he represented himself until about June 2021.

34 On 6 August 2019, Derham AsJ dismissed an application by Mr Rowson to join Mr Gordon Cooper, an employee of the LSB's external interventions division and the LSB as defendants to the proceeding, and to file a further amended statement of claim. Mr Rowson sought to allege that Mr Cooper persuaded Mr Alpass to breach the agreement, thus rendering Mr Cooper and LSB liable for damages in tort.

35 His Honour also refused to grant leave for Mr Rowson to make a further application to amend his statement of claim or to join additional parties, given the delays in progressing the proceeding to date, but did not completely shut him out from doing so. As matters transpired, no further application was made by Mr Rowson for the joinder of any additional defendants or to further amend the statement of claim.

36 On 13 July 2020 the trial date was vacated, and was subsequently refixed for 26 October 2020. On 28 October 2020, I granted Mr Rowson's request for an adjournment, and refixed the trial for 17 November 2020. On 19 November 2020, I vacated the trial date, and ordered that the proceeding be stayed until Mr Rowson paid Mr Alpass' costs thrown away by reason of the adjournment (fixed at $15,000), and filed a notice indicating that the proceeding was ready to proceed to trial.

37 Following Mr Rowson's compliance with the conditions for lifting the stay, on 26 February 2021 I refixed the trial for 21 June 2021. On 16 June 2021, shortly after solicitors came onto the record for Mr Rowson, that trial date was also vacated after Mr Rowson sought time to file and serve an expert report with respect to the loss and damage claim, which I later directed be filed and served by 27 September 2021. On 5 October 2021, I listed the proceeding for trial on 27 April 2022.

38 On 13 April 2022, the trial date was vacated again by another judicial officer, after Mr Rowson foreshadowed making an application for further discovery. On 10 June 2022, consent orders were filed requiring Mr Alpass to make discovery of documents relevant to the loss and damage claim. On 26 August 2022, Mr Rowson was directed to issue any subpoenas by 9 September 2022, and to file and serve any additional witness outlines and expert reports by 11 November 2022. Further pre-trial directions were made on 11 November 2022, and the proceeding was fixed for trial on 6 March 2023.

39 However, 6 March 2023 was the first return date of objections to subpoenas issued on behalf of Mr Rowson and directed at the Law Institute of Victoria ('LIV'), the Victorian Legal Services Commissioner, and the LSB ('subpoenaed parties'). On that day, Mr Rowson provided amended subpoenas which subsequently reduced the scope of the documents sought by the subpoenas. I found that the amended subpoenas sought documents which were relevant to the loss and damage claim. Ultimately, I permitted the expert witness engaged by Mr Rowson, Mr Andrew Senia, to inspect a subset of the documents ultimately produced by the subpoenaed parties ('subpoenaed documents') upon the provision of appropriate confidentiality undertakings. The trial date was refixed for 2 August 2023, and the trial commenced upon that date after Mr Rowson retained Mr Dale and senior and junior counsel and filed and served Mr Senia's report ('Senia report').

40 In summary, the issues in this proceeding are as follows:

(a) whether a binding oral agreement for the sale and purchase of the Hardy's business was made on 21 July 2016;

(b) if no to (a), whether Mr Alpass was nevertheless estopped from denying the existence of such an agreement;

(c) further, if yes to (a) or (b), whether Mr Alpass is immune from any liability to Mr Rowson by reason of the immunity provision;

(d) if yes to (a) and/or (b), and no to (c) whether Mr Rowson has suffered any loss and damage by reason of Mr Alpass' repudiation or breach of the agreement; and

(e) if yes to (d), the quantification of the loss and damage claim.

41 Originally, orders were made for the witnesses to give their evidence in chief by way of witness statement. However, at the trial of the proceeding, all agreed that the witnesses should give their evidence in chief orally. However, the original witness statements were included in the court book, and were referred to by counsel for both parties during their cross-examination of Mr Rowson and Mr Alpass.

42 Mr Alpass' solicitors also prepared an agreed court book, which was accepted into evidence, subject to submissions regarding the admissibility of particular documents. By way of example, Mr Rowson submitted that a number of court judgments and sentencing remarks were not admissible as evidence of the truth of the facts referred to in those documents by reason of the terms of s 91 of the Evidence Act 2008 (Vic) ('Evidence Act'). A number of original documents reproduced in the court book were tendered into evidence separately, including original file notes, along with a small number of documents produced during the course of the trial.

43 Also in evidence was what was described as a 'confidential courtbook'. The confidential courtbook contained some of the subpoenaed documents and other documents discovered by Mr Alpass. The documents in the confidential courtbook were confidential because they referred to individual clients of Hardy's.

44 Mr Rowson gave evidence himself, and called his brother, Mr Gavin Rowson to give evidence. He called Mr Andrew Senia, a solicitor and business consultant, to give evidence with respect to the Senia report. During the course of the trial, I admitted into evidence the Senia report over the objection of Mr Alpass. The issues surrounding the admissibility and reliability of Mr Senia's evidence and the Senia report will be the subject of further consideration in the section of these reasons concerning the loss and damage claim. Mr Alpass gave evidence on his own behalf, and called no other witnesses.

45 During the course of the trial and in the course of the parties making their final submissions, a number of evidentiary issues arose in addition to the dispute regarding the admissibility of Mr Senia's report. The following issues emerged from the evidence and the submissions of the parties:

(a) the assessment of the demeanour of the witnesses and the relevance of that assessment to the credibility of their evidence;

(b) the attack on the credibility of Mr Rowson based upon his prior convictions for dishonesty offences;

(c) whether any limitation should be imposed upon the use of a text message exchange between Mr Rowson and Gavin Rowson on 21 July 2016 ('text message exchange');

(d) the admissibility of the documents recording the judgments and sentencing remarks with respect to Mr Rowson, and the operation of the rule in Browne v Dunn,[7] given the asserted failure to provide Mr Rowson with the opportunity to respond to Mr Alpass' assertions regarding the impact of his criminal history upon the credibility of his evidence;

(e) the attack on the reliability of Mr Alpass' evidence, based upon his reliance upon his file notes;

(f) related to (e) above, whether the file notes accurately and fulsomely record the communications referenced in them;

(g) whether a Jones v Dunkel[8] inference should be drawn from Mr Alpass' failure to call Mr Gordon Cooper of the LSB and staff employed by his firm to give evidence; and

(h) the admissibility of the judgments with respect to Mr Nelson's disciplinary proceedings.

46 All of the issues above go to the resolution of the primary issue in this proceeding, being whether a binding oral agreement was made on 21 July 2016, save for the question of the admissibility of judgments concerning Mr Nelson's disciplinary record, which is only relevant to causation and the loss and damage claim.

47 There was a limited number of critical communications between the parties over a period of less than three months. There was considerable, albeit not complete agreement between Mr Rowson and Mr Alpass about what was discussed and what was said during these conversations, and Mr Alpass was able to produce file notes with respect to all of the interactions between him and Mr Rowson, although the question of whether these file notes accurately and fulsomely record what was said in the critical conversations is in dispute.

48 Accordingly, in this section of these reasons, I will refer to the critical conversations and events in chronological order, highlighting any differences in the parties' versions of events where necessary.

49 Mr Alpass is appointed as the receiver of Hardy's.[9] His main responsibilities as receiver were to conduct the necessary legal work for the remaining clients of Hardy's, and to sell the assets of the Hardy's business.

50 Mr Alpass gave evidence that he considered that the following matters needed to be taken into account when evaluating a prospective purchaser of a legal practice in his capacity as receiver:

(a) the fact that the clients of the legal practice were likely to be quite traumatised by the events which precipitated the appointment of a receiver meant that it was important to sell the practice to a legal practitioner who could deal with people on a reasonably good basis;

(b) the purchaser had to be appropriately qualified, and hold an extended practising certificate; and

(c) the price had to be right, as he was dealing with people's assets.[10]

51 Mr Alpass received an offer to purchase the Hardy's business for $2.00.[11]

52 Mr Alpass received an offer to purchase the Hardy's business for $100.[12]

53 Ms Jacqueline Lewis, a legal practitioner, made an offer to purchase the Hardy's business for $10,000. This offer followed a meeting between Mr Alpass and Ms Lewis on 4 July 2016 where they discussed the Hardy's business.[13]

54 Ms Lewis increased her offer to $20,000, subject to finance and further due diligence. Mr Alpass' file note recorded that he told Ms Lewis that while he would encourage the clients of the Hardy's business to transfer their files to her, he could provide no guarantee that the files would be transferred to her.[14]

Further to our telephone conversation on 11 July 2016, we note that we have now reached provisional agreement to the effect that you will purchase what remains of the Hardys law practice, including:-

1. Current files;

2. Deed Packets and Securities;

3. Archived files;

4. Remaining open but dormant files

for the sum of $20,000.00.

We will prepare contracts when you confirm you have organised your finance.

The Deed of Sale will include a clause to the general effect that the Receiver will write to each client with a file actively engaged, advising of the sale of the business.

You will recall that under the LPUL Rules (Rule 6), fourteen (14) days clear notice must be given to each of the clients regarding the sale and transfer of files and within that time the client has the right to refuse the transfer of their file and to collect their documents. Obviously, we will need to comply with those rules.

In addition, there is a possibility of a number of Fidelity Fund Applications.

If you wish to have a further inspection of the abovementioned client files on a confidential basis, then you are welcome to call into our office by appointment.

We look forward to your confirmation that you are ready to proceed, so that we can prepare the draft Deed of Sale for your perusal.[15]

56 Mr Rowson telephoned Mr Alpass expressing interest in purchasing the Hardy's business. He gave evidence that he asked Mr Alpass whether it was still for sale, and what assets were for sale.[16] He said that he told Mr Alpass that his late father had been a partner of Hardy's. Mr Alpass told Mr Rowson that there were some active files and approximately 6,000 deeds,[17] and that there were some trust account deficiencies which were under investigation.

57 Mr Alpass gave evidence that during this telephone call, Mr Rowson told him that he was an associate of Mr Nelson. Mr Alpass said that he told Mr Rowson that the family law practice was 'gone', and told him the number of active files, the number of deeds (being 6,000), and that there was some furniture available. He said that he was happy for Mr Rowson to inspect the assets of the Hardy's business. He did not recall there being any discussion about price, but he gave evidence that he may have said that he had already received an offer of $20,000 for the Hardy's business.[18]

58 Mr Alpass' file note of this telephone call was largely consistent with his recollection.[19]

59 Mr Rowson said that Mr Alpass made no mention of price during this telephone call, and Mr Alpass did not say that the Hardy's business was under offer, but that no contracts had yet been exchanged. He said that Mr Alpass never said that 'family law has gone'.[20]

60 Later that day, Mr Rowson telephoned Mr Alpass again to arrange for him and Mr Nelson to inspect the assets of the Hardy's business the following morning. Mr Alpass' file note of this call records a discussion about the deeds, with Mr Rowson telling Mr Alpass that he did not need to see the deeds as his father was familiar with a lot of the clients.[21]

61 Mr Rowson and Mr Nelson attend Mr Alpass' firm's premises in Kilsyth at around 10.40am. Mr Alpass took them to his office. Mr Rowson said that at first, Mr Alpass and Mr Nelson talked about prestige cars. Mr Rowson then asked Mr Alpass to provide further details of the deeds and the files, and to explain what had happened to the Hardy's business, and Mr Alpass did so. They then talked about Mr Rowson's father's history with Hardy's.

62 After spending about 10 minutes in Mr Alpass' office, Mr Alpass took them to an adjacent office where the active files were kept. After providing an oral confidentiality undertaking, Mr Rowson and Mr Nelson inspected the files. Mr Rowson said that most of the files concerned probate matters.

63 Mr Rowson said that after he and Mr Nelson inspected the files, they returned to Mr Alpass' office and had a further discussion. Mr Rowson said he told Mr Alpass that they liked what they saw, and discussed the value of the work-in-progress, which Mr Alpass said was approximately $100,000.

64 Mr Alpass' evidence and his file note of this meeting largely accord with Mr Rowson's version of events regarding this meeting, albeit with less detail. The file note records a notation 'will cost up files to c/o day', which I assume refers to a handover date.

65 Mr Alpass then arranged for his practice manager, Ms Jill Crawford, to take Mr Rowson and Mr Nelson to a nearby storage facility, where the deeds, archived files, and office furniture and equipment were stored. Mr Rowson said that they inspected three of the four sheds, and surveyed a sample of the deeds, many of which seemed to be wills. Mr Rowson said that he and Mr Nelson exchanged words to the effect that 'this is good, this is exactly what we're looking for'.[22] They then travelled back to the office with Ms Crawford. According to a file note made by Ms Crawford at 12.07pm, they spent approximately 40 minutes out of the office travelling to and from the storage facility and inspecting the assets of the Hardy's business at the storage facility.[23]

66 The parties are in dispute about what happened after Mr Rowson and Mr Nelson returned from their inspection of the storage facility. Mr Rowson said that he spoke briefly with Mr Nelson in the reception area, and they agreed that Mr Rowson would conduct the negotiations with Mr Alpass. He said that they returned to Mr Alpass' office, and during this meeting ('disputed meeting') told Mr Alpass that they were very interested in purchasing the Hardy's business. Mr Rowson gave evidence that, in response to a question from him as to whether Mr Alpass had received any previous offers, Mr Alpass told them that he had an offer of $20,000, subject to finance.

67 Mr Rowson said that he looked at Mr Nelson, then said that they would pay $25,000, not subject to finance, with settlement within 14 days, to which Mr Alpass responded after leaning back his chair and thinking about it for while, 'well, seeing as it's not subject to finance, I accept your offer'.[24]

68 Mr Rowson said he then asked Mr Alpass what was to be done now, to which Mr Alpass responded that they should work out the details. They discussed what was to be done with the work in progress, which Mr Rowson said they could not take on immediately. They discussed Mr Alpass working on the files until the handover date, when the files would be costed. After settlement, Mr Rowson and Mr Nelson would bill the clients and reimburse Mr Alpass for his work. Mr Alpass told them that he estimated that approximately $100,000 in fees remained unbilled.[25]

69 Mr Rowson said that he told Mr Alpass that he and Mr Nelson had discussed setting up a corporate entity to be the purchaser. He asked Mr Alpass about who would be responsible for drawing up the contract of sale, and Mr Alpass said that he would do that. Mr Rowson then told Mr Alpass that they did not yet know the name of the legal entity that would be the purchaser of the Hardy's business.[26]

70 Mr Rowson said that Mr Alpass then asked whether they planned to open an office in Dandenong. Mr Rowson said that they probably would. Mr Rowson then said he would provide Mr Alpass with the name of the corporate entity which would purchase the Hardy's business when they returned to the office.[27]

71 Mr Rowson gave evidence that the men then chatted about life and legal affairs, then, after they all stood up to leave, they shook hands on the deal. Mr Alpass then took them from his office to the carpark through a courtyard and saw them off.[28]

72 Mr Rowson gave evidence that at no time during the disputed meeting did Mr Alpass place any conditions on the sale or ask either of them about the status of their practising certificates, or whether they had trust account credentials. Mr Alpass did not say that the sale was subject to approval by LSB.[29]

73 Mr Alpass' version of what happened after Mr Rowson and Mr Nelson returned from the storage facility was quite different from Mr Rowson's version of events. Mr Alpass said that he had a brief conversation with Mr Rowson in the hallway outside his office after they returned from the storage facility. Mr Alpass saw Mr Nelson wandering around the carpark looking confused and trying to enter the wrong car. Mr Rowson said that he would get back to him the following day. Mr Alpass denied that he met with Mr Rowson and Mr Nelson again in his office, denied that Mr Rowson made an offer to purchase the Hardy's business on that occasion, and denied that he had accepted any offer made by them to purchase the Hardy's business.[30]

74 There is no record of any offer or agreement in Mr Alpass' file note. The following note was made at the bottom of the page, under a dash which Mr Alpass said signified an end to the first meeting in his office before Mr Rowson and Mr Nelson left to visit the storage facility:

Jill then took them to inspect the Deeds etc at the storage facility. Mark tgb[31] tomorrow. Mentioned have an offer of $20G.[32]

75 Later that day, Mr Rowson had the text message exchange with his brother Gavin. At 1.41pm, Mr Rowson wrote:

Gav call me soon as you can, we just bought Hardy's back! I'm going to need 25k from cherb.[33]

77 Gavin Rowson did not recall in great detail the time or contents of the discussion he had in the telephone call referred to in the text message exchange. He recalls Mr Rowson telling him what he was purchasing, saying it was the files of the Hardy's business. Gavin Rowson gave the following evidence regarding this conversation:

When did you have this discussion? --- Ah, I assume - I assume at the end of - on the same day or within days of that conversation or that text message.

Is that your recollection?---Yes.

All right. And what was discussed with Mr - with your brother, Mark? --- Um, he'd purchased or he was put an offer in to buy the trust or the Hardy's, and he was going to run the files with his - um, Darroll Nelson, I believe.

Yes.

And what did he say about buying it? --- Ah, he was excited because it was dad's old business that, ah, I think, Rob Hession had owned. And then I'm not sure what happened to Rob. I think he'd been disbarred and that went to a - - -

How many discussions did you have with your brother about the purchase of - - -?---I think probably half a dozen or a dozen.

...

So, Mr Rowson, what was discussed with your brother in those conversations? --- Ah, I asked him, I suppose, what he was purchasing, and that - and how valuable he thought it was, um - - -

What did he say? --- I can't recall, but he said there was over a thousand files, I think, or something. Over 1,200 files. I don't recall, honestly. Um, but it seemed like a good purchase to me.[34]

78 Gavin Rowson gave evidence that he asked Mr Rowson a few questions about the proposed purchase, because he was the person who would be providing the money.[35]

79 Gavin Rowson was also asked about discussions he had with his brother about the Hardy's business being sold to someone else. He gave the following evidence:

And what did he say about that?---Ah, he was a bit annoyed. A bit pissed off.

...

What was the manner of his tone when he spoke to you about that? --- Ah, my brother - my brother was annoyed that it - they'd put an offer in and thought they had a signed and sealed deal, and it was pulled out from under them, I suppose. So he was a bit annoyed.[36]

80 Gavin Rowson also gave evidence that as at 9 August 2016, the balance in the account held on trust for Mr Rowson was $41,461, based upon a text message exchange between him and Mr Rowson on that day.[37] Gavin Rowson was not cross-examined about his version of events.

81 Returning now to the chronology of events, later on 21 July 2016, Mr Rowson telephoned Mr Alpass. Mr Alpass said that it was during this telephone call that Mr Rowson offered to purchase the Hardy's business for $25,000, unconditionally, with settlement in 14 days. Mr Alpass said that Mr Rowson offered to pay a deposit, and pay the costs of the storage facility until everything was sorted. Mr Rowson asked if Mr Alpass would be prepared to complete work on any open files if they were close to completion, saying that the deeds were more important to him and Mr Nelson than the files. Mr Alpass said that he did not accept or reject this offer, and said that he asked Mr Rowson to send him an email confirming the terms of the offer. This evidence was confirmed by Mr Alpass after being taken to his file note.[38]

82 Mr Rowson agreed that he telephoned Mr Alpass later that day, but that the purpose of the call was to tell Mr Alpass that he could not acquire a shelf company straight away, and to ask him whether the contract of sale could be in the name of Mark Rowson or nominee. He said Mr Alpass asked him to put in writing the terms of the agreement they had made and his offer with respect to the work in progress.[39] He said that, not being legally trained, it did not occur to him to use the word 'agreement' in the 21 July email.[40] He gave evidence that the purpose of the 21 July email was to provide Mr Alpass with the information he needed to draw up the contract of sale.[41]

83 Mr Rowson said that he asked Mr Alpass how much the storage facility was costing him, and said that they would be happy to pay for that. He asked Mr Alpass if they could have 14 days for settlement, because he was not sure whether he could lay his hands on $25,000 straight away. Mr Alpass said that was not a problem.

84 At 3.23pm that day, Mr Rowson sent the 21 July email from Mr Nelson's email account. The 21 July email stated as follows:

Alan,

Thank you for your time today. We confirm our offer of $25,000.00.

We intend to set up a new incorporated practice but for now the contract can be in the name Mark Rowson &/or Nominee.

If you could please provide banking details I will organise payment of 10% with the balance to be paid on settlement on the first Monday after a fortnight.

I also confirm the arrangements re: the open files, being that Alpass & Associates should manage the files until a mutually agreed date as it will take some time for us to complete the transition, and Alpass will bill any files that are completed on handover.

Yours faithfully,

Mark Rowson[42]

85 Mr Rowson agreed that he received no response to the 21 July email from Mr Alpass. Mr Alpass gave evidence that he did not respond to the 21 July email because he needed to speak to the LSB about the qualifications and appropriateness of the prospective purchasers. He did not have access to the records of the qualifications and practising certificate status of legal practitioners, but LSB did.[43]

86 Mr Rowson telephoned Mr Alpass. He said that the purpose of this call was to chase up the contract of sale. Mr Alpass asked him straight away whether he held a practising certificate, and he answered no. Mr Rowson said that it seemed to him as if Mr Alpass knew that already. Mr Rowson said that he explained that he had a prior conviction for a tax offence and would not be eligible to hold a practising certificate, and asked if Mr Alpass would be more comfortable with the contract being in Mr Nelson's name. Mr Alpass then asked him if Mr Nelson could accept trust funds, saying that there were funds in trust. Mr Rowson told him that Mr Nelson had a practising certificate, but that he was not authorised to hold trust moneys. He told Mr Alpass that Mr Nelson was already in the process of getting an extended practising certificate, and suggested that the settlement date be extended until the date when Mr Nelson obtained an extended practising certificate.[44]

87 Mr Rowson gave evidence that at no time during this telephone call did Mr Alpass tell him that the absence of any authorisation to hold trust moneys was a deal breaker, or that Mr Alpass was sitting on the offer and still considering it, or that he needed to investigate their credentials before responding to any offer.[45]

88 Mr Rowson's evidence regarding what was said during this telephone call was consistent with Mr Alpass' evidence, and with what was recorded in Mr Alpass' file note.[46] Mr Alpass' recollection of this conversation was prompted by reviewing this file note.

89 Also on 25 July 2016, Mr Alpass called Ms Lewis. Ms Lewis said, among other things, that she wanted to have another look at the deeds, and she also told him that she had completed her supervision period. Mr Alpass said that he told her that her employer, Ms Jan Knight, would need to be the purchaser, because the purchaser would need an extended practising certificate. Mr Alpass gave this evidence after being taken to the file note of this conversation.[47]

90 Mr Alpass gave evidence that later that day, he telephoned Mr Gordon Cooper, who was an officer within the external interventions division of the LSB.[48] After discussing unrelated matters, Mr Alpass said he discussed the two prospective purchasers of the Hardy's business with Mr Cooper. Mr Alpass' file note records the following discussion:

Darroll Nelson to buy the practice? No, he has disciplinary proceedings re prac, m'ment. Go w. the lady Jacqueline Lewis. Nelson has offered more. Ok to walk from $5000. Is JL ok? He checking her out - she has an employee p. cert. She is subject to supervising legal practice + may not be able to buy.[49]

91 Mr Alpass gave evidence that he had an independent recollection of his conversation with Mr Cooper. He recalls Mr Cooper saying unfavourable things about both Mr Nelson and Ms Lewis, and telling him that Mr Nelson had a number of disciplinary issues, which Mr Alpass did not know about prior to that, although he said that he knew that Mr Nelson had a 'reputation'.[50] He recalls Mr Cooper saying words to the effect that the decision regarding the sale of the Hardy's business was up to him (Mr Alpass), but Mr Cooper was quite forceful in saying that he did not want Mr Nelson to purchase the practice.[51] He wanted a good lawyer to take over the practice, and Ms Knight, Ms Lewis' employer, would be okay. He recalled Mr Cooper saying 'go with the lady'.[52]

92 Mr Alpass agreed that Mr Cooper's opinion about who should purchase the Hardy's business would influence his decision in that regard if Mr Cooper provided good reasons to support his opinion. He agreed that he was not obliged to seek approval for a potential purchaser from the LSB, but said that he would be a fool not to do so. He said that the reference in the file note to the words 'Ok to walk from $5,000' was a reference to Mr Cooper saying that it would be okay for Mr Alpass to walk away from the higher offer. He gave evidence that the reference in his file note to the words 'Darroll Nelson to buy practice' was not a statement to the effect that Mr Nelson had bought the Hardy's business: rather, he asked Mr Cooper a question as to whether Mr Nelson could buy the Hardy's business.[53]

93 Mr Rowson telephoned Mr Alpass' office asking Mr Alpass to call him back regarding the paperwork for the contract for the purchase of Hardy's. Mr Alpass did not return Mr Rowson's call.[54]

94 Mr Alpass telephoned Ms Lewis and told her that it would be okay for Ms Knight to purchase the Hardy's business because she had an extended practising certificate. Ms Lewis told him that she thought that her supervision period was over, but Mr Alpass said that he told Ms Lewis that she would need to have an extended practising certificate to be able to purchase the Hardy's business, and that she should contact the LSB to ascertain what her position was.[55]

95 Mr Rowson telephoned Mr Alpass and left a message asking him to call him back, telling Mr Alpass' receptionist that 'we have a little hiccup'. He then called Mr Rowson back and left a message saying he was returning his call about the 'little hiccup'.[56]

96 Mr Alpass gave evidence that when Mr Rowson called him back, Mr Rowson told him that 'Mr Nelson was having issues getting his certificate upgraded to trust, that he had to sit exams and there were problems'.[57] He then was taken to his file note, which records that Mr Rowson told him that Mr Nelson had completed an ethics course and that the extended practising certificate should come through soon. Mr Alpass' file note records the following outburst:

I don't want to waste my time drawing contracts when I have another offer unless he can give me a firm commitment as to when everything will be ready (full cert with trust).[58]

97 Mr Alpass said that he does not usually speak to people that way (and I agree that is consistent with his presentation and demeanour in the witness box), but he was becoming irritated and frustrated with the delay.[59]

98 Mr Rowson agreed that he and Mr Alpass discussed the status of Mr Nelson's practising certificate during this telephone conversation, but denied that Mr Alpass said the words recorded in the file note reproduced above, and denied that Mr Alpass was quite firm with him during this conversation.[60]

99 Mr Rowson called Mr Alpass' office and left the following message:

He has been organising application for variation of Mr Nelson's Practising Certificate.

Anticipates it will take about 2 weeks to go through. He will be seeking that it be expedited.[61]

100 The amended statement of claim and Mr Rowson's witness statement refers to him relinquishing an existing lease that day, but he made no mention of that date in his oral evidence.

101 Mr Alpass' personal assistant sent Ms Knight a letter, which enclosed a draft agreement for the sale of the Hardy's business for $20,000. The letter stated as follows:

Further to recent communications, we now enclose a draft Agreement for the sale of the assets of the legal practice.

Pursuant to the Agreement, the Receiver is required to provide each client with a file actively engaged or opened, with a letter advising of the transfer of the file and trust funds pursuant to Rule 6 of the LPUL. To enable sufficient time for client responses, we have nominated the time for the letter as the 24 August 2016. So that this can be done, please facilitate an exchange prior to that date.

Please note that we have left clause 7(b) blank as to your trust account details. Kindly complete prior to exchange. Please note that we will forward the schedule of files to you shortly.

Together with the executed Agreement, please provide us with a cheque for the deposit in the sum of $5,000.00 payable to Alpass & Associates.

Should you have any queries, please telephone the writer.[63]

102 While the letter reproduced above refers to 'recent communications' regarding the sale of the Hardy's business to Ms Knight, there was no file note in the court book evidencing any such communications between 29 July 2016 (when Mr Alpass called Ms Lewis) and this letter. However, as a matter of logic, there must have been at least one communication between Mr Alpass and either Ms Lewis or Ms Knight in that period for Mr Alpass to know that Ms Knight had agreed to purchase the Hardy's business in substitution for Ms Lewis, and that funding for the purchase had been arranged.[64]

Further to recent communications, we enclose a list of files currently current. This list can be annexed to the Contract as Schedule A.

There will be a large number of other files handed over to you at settlement which are either currently dormant or concluded and not closed.

We intend to write to all of the clients listed in Schedule A prior to settlement.[65]

104 Mr Rowson telephoned Mr Alpass. Mr Rowson said that he made the call to update Mr Alpass on their progress in obtaining Mr Nelson's extended practising certificate. Mr Rowson said that he offered to pay the full purchase price into Mr Alpass' trust account if that would make Mr Alpass feel more comfortable while they waited for the extended practising certificate, but Mr Alpass told him that there was no need, given that a contract could not yet be exchanged.[66] In his witness statement, Mr Rowson also said that Mr Alpass also told him that if he and Mr Nelson could not complete the agreement within a reasonable timeframe, then Mr Alpass would consider selling the Hardy's business to someone else.[67] When giving evidence at trial Mr Rowson first denied that Mr Alpass made that statement,[68] but accepted that he must have done so when taken to his witness statement.[69]

105 Mr Alpass' version of events regarding this telephone call was different than the version of events put forward by Mr Rowson. Mr Alpass confirmed the contents of his file note, which recorded Mr Rowson telling Mr Alpass that the LSB and the LIV were dragging their feet: he had returned Mr Nelson's trust account examination two weeks ago but he had been told that it had not yet been checked. Mr Rowson told Mr Alpass that he and Mr Nelson were about to get a new office, and offered to put money into his trust account. Mr Alpass said that he declined, and said words to the effect that 'we will sell to anyone and will only take money if we can enter into contracts - which they can't'.[70] Mr Alpass said that Mr Rowson said nothing in response to this statement.[71]

106 HNR was incorporated by Mr Rowson.[72]

We refer to the above matter and enclose Agreement for Sale and Purchase duly signed together with our cheque for $5,000.00 being the deposit payable.

We await receipt of a duly executed copy Agreement signed by you to complete exchange.

Meantime, we note from our telephone discussion today that the settlement date is likely to be extended beyond 16 September 2016 to 30 September 2016. Please confirm same by return.[73]

Thank you for your letter dated 2 September 2016.

We enclose the Agreement for Sale and Purchase of Business duly executed by the Receiver to complete exchange.

Please note that we have amended the contract settlement date to Friday, 14 October 2016 so that we have time to notify all of the relevant clients.

If this revised date causes any problems, please contact the writer.

Please also advise us of the particulars of your trust account so that we can complete paragraph 7(b) of the Contract.[74]

109 Mr Alpass wrote to Mr Rowson at Mr Nelson's email address, as follows:

Further to recent communications, we advise that the assets of Hardys law practice have now been sold.[75]

110 Mr Rowson gave evidence that it was not until this day that he and Mr Nelson saw the letter referred to above. They telephoned Mr Alpass immediately. Mr Rowson gave evidence that he was furious, and asked him if Anthony Swords or Mick Gatto had anything to do with it, because those men had recently broken into Mr Nelson's office and stolen computers and files. He said that he did not think he said anything to Mr Alpass during this telephone call regarding the nature of the agreement they believed they had with him.[76]

111 Mr Alpass largely agreed with Mr Rowson's evidence about what was said during this telephone call. He said it was a 'bizarre' call, but that it was conducted on reasonably friendly terms. He understood the reference to Mr Swords and Mr Gatto to somehow imply that he (Mr Alpass) had been 'got at'.[77] He said that Mr Rowson did most of the talking, but Mr Nelson was in the background, listening via speaker phone. Mr Alpass said that towards the end of the call Mr Nelson asked him a few times if he (Mr Alpass) could 'flick him a few files'. Mr Alpass refused, and said that he told Mr Rowson and Mr Nelson that he could not tell them who purchased the Hardy's business or for how much.[78] Mr Rowson's evidence and Mr Alpass' evidence about this telephone call is largely consistent with Mr Alpass' file note.[79]

112 Mr Rowson gave evidence that after their telephone call with Mr Alpass, Mr Nelson suggested that they consult Mr Dale. Mr Dale sent the following email to Mr Alpass after taking instructions from Mr Rowson and Mr Nelson. Mr Rowson said that the instructions provided to Mr Dale came from both him and Mr Nelson:[80]

We act for Darroll Nelson and HNR Lawyers Pty Ltd.

We note that you were appointed receiver of the law practice Hardys by Order of the Supreme Court

We are instructed that you negotiated with Darroll Nelson and our client agent Mark Rowson for the sale of the law practice Hardys to a nominee purchaser which was a company to be incorporated.

An agreement for the sale of the law practice Hardys was reached on the basis that the sale price was $25,000 with a deposit to be paid. This sale was not conditional. Consequent upon agreement for the sale HNR Lawyers Pty Ltd was incorporated to be the nominee purchaser.

Subsequently you said you wanted to ensure that prior to settlement our client needed to hold a practising certificate entitling it to receive and hold trust money. Our client has been in the course of effecting that.

We are instructed that this agreement was partly in writing and partly oral and was constituted by email dated 21 July 2016, discussions between Messrs Nelson and Rowson and you at your office and by telephone.

Contrary to your agreement to sell the law practice Hardys to our client, we are instructed that by letter dated 12 September 2016 you wrote to our client's agent, Mr Rowson, care of Mr Nelson, informing our client that the assets the law practice Hardys have now been sold. This occurred without any further communication with our client.

Can you please explain why you ignored the prior sale of the law practice Hardys to our client in purporting to sell it to another party in disregard of the prior sale. Can you please disclose the particulars of that other sale (such as the purchaser, consideration payable and terms of the sale), whether it is conditional and whether it has settled. We request that you take no further action in relation to the other sale until your response to this request.

In addition, if the subsequent sale is conditional and can be terminated, we require your undertaking by 5.00pm tomorrow, 16 September 2016, that you terminate that sale as soon as practicable and that you complete the sale to our client, failing which we shall issue proceedings seeking amongst other remedies, injunctive relief.

Given the issues raised in this email, we would appreciate your prompt response to this correspondence.[81]

113 In this email, Mr Dale said that the alleged agreement was partly oral and partly in writing, which is inconsistent with what was pleaded in the amended statement of claim. However, little turns on this inconsistency, given that this email was sent only the day after Mr Rowson and Mr Nelson spoke with Mr Alpass, such that Mr Dale had only limited time to take instructions and review any relevant documents.

114 Mr Dale sent a further email to Mr Alpass requesting a response to his email above.[82]

115 After some missed calls, Mr Alpass spoke on the telephone with Mr Dale. Mr Alpass said that, like a prudent solicitor, Mr Dale said little, and mainly listened to him speak. Mr Alpass' file note stated as follows:

No contract exists

Your client is misinformed + has given incorrect instructions.

He seemed reasonable.

I will give as much detail as is poss.

I have very good file notes. Response this arvo. Out of state Thurs, Fri, Sat + Sunday.[83]

116 After this telephone call, Mr Alpass sent the following letter to Mr Dale:

We refer to your email dated 15 September 2016. We deny that any agreement has been reached with your client as alleged.

We note that your client claims that an email dated 21 July 2016 is evidence of agreement. We note that email made an offer which was not accepted. The offer was on behalf of Mark Rowson and/or nominee and mentioned that "we intend to set up a new incorporated practice".

On 25 July 2016 Mr Rowson telephoned and stated that he did not hold a practising certificate, that he is a para-legal and that he is not a fit and proper person because of a conviction a long time ago regarding a tax offence. He also indicated that Mr Nelson could purchase but that he had a practising certificate without trust. The writer indicated that it was not possible for a sale to be effected to a person without a trust authorised practising certificate.

On 29 July 2016 two further telephone calls were received from Mr Rowson. Mr Rowson initially left a message "We have a little hiccup". In the second call he again confirmed that Mr Nelson did not hold a trust practising certificate but that he had done an ethics course and would have the trust certificate "soon". The writer told Mr Rowson that he did not wish to waste his time drawing contracts when we had another offer, unless Mr Nelson could give a firm time commitment as to when everything would be ready. Mr Rowson indicated that he would respond on the following Monday.

On the following Wednesday (3 August 2016), Mr Rowson telephoned and said that the practicing certificate variation would take about two weeks. On 29 August 2016, Mr Rowson rang again and indicated that the Legal Services Board were, in his words, 'dragging their feet'. The writer clearly stated to Mr Rowson, when he then offered to put money in the writer's trust account, that the offer was declined and that he would sell to anyone in the meantime and would only take funds if everybody was in a position to enter contracts, which your client certainly was not.

When contracts were eventually exchanged with another purchaser, a courtesy email was sent to your client stating that the assets of Hardys law practice has been sold. We otherwise refer your client to Section 362 of the LPUL (2014) concerning confidentiality.

In the event that your client still maintains that there was an agreement, kindly provide full particulars.

In the event that your client fails to provide the particulars requested and institutes proceedings, then we are instructed to strongly defend same and to produce this letter on the question of costs which will be sought from your client.[84]

117 In his evidence, Mr Alpass agreed that he prepared this letter following a review of his file notes. He accepted that this letter made no mention of the meeting between him and Mr Rowson and Mr Nelson at his office on the morning of 21 July 2016.[85]

118 There was further correspondence exchanged between the parties between 21 September 2016 and 3 October 2016,[86] mainly regarding Mr Alpass' refusal to disclose the identity of the purchaser of the Hardy's business and the amount paid by the purchaser for the Hardy's business.

119 Mr Rowson and Mr Nelson issued this proceeding.

Was an agreement made for the sale and purchase of the Hardy's business?

120 The primary issue in the proceeding is whether an oral agreement was reached between Mr Alpass and Mr Rowson for the sale and purchase of the Hardy's business on the terms pleaded in the amended statement of claim, or at all. There is no dispute about the relevant legal principles: that is, whether, viewed objectively, an intention to enter into a binding agreement can be ascertained from the words and conduct of the parties. Where the parties differ is as to what words were said at critical junctures, in particular, what was said at the disputed meeting. There is a direct conflict of evidence between Mr Rowson and Mr Alpass on that issue, such that it is necessary to determine whether Mr Rowson's evidence is credible, and whether Mr Alpass' evidence is reliable. There is some dispute about the relevance of post-contractual conduct to the issue of whether a contract came into existence.

121 Mr Rowson observed that the critical issue in this proceeding was whether Mr Alpass merely had Mr Rowson 'on the hook' to purchase the Hardy's business, or whether he had already reeled him in. Mr Rowson submitted that his evidence regarding the critical conversations should be accepted, noting that the key question is 'what a reasonable person would have thought in all of the circumstances as to whether there was a concluded bargain'.[87] Mr Rowson submitted that acceptance of an offer does not need to be express, it can be implied,[88] and evidence of the post-contractual conduct of the parties may be admissible to prove the existence of a contract.[89]

122 Mr Rowson submitted that the oral agreement between the parties fell within the first category of agreements referred to by the High Court in Masters v Cameron,[90] being where:

... the parties have reached finality in arranging all of the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.[91]

123 Mr Rowson also relied upon the doctrine of part performance in support of his contention that the oral contract between the parties is enforceable. However, I do not consider that the doctrine of part performance has any application to Mr Rowson's claims in this proceeding. Either a binding agreement was made or it was not. However, I agree that the conduct relied upon by Mr Rowson in support of his contention that there were acts of part performance may be conduct relevant to the question of whether a contract had in fact been formed.

124 Mr Rowson observed that most of the factual matters relevant to the question of whether an agreement had been reached were not in dispute. And, where the facts are in dispute, those disputes should be resolved in Mr Rowson's favour. In particular:

(a) Mr Rowson had a vivid and detailed recollection of the key events, which was confirmed rather than shaken by cross-examination. The authorities suggest that the credibility of a witness is enhanced when that witness has a vivid recollection of the relevant events; [92]

(b) Mr Rowson's forthright demeanour and his answers to questions, including questions about his criminal history, confirmed him to be an honest and credible witness;

(c) Mr Rowson's evidence about what happened during the disputed meeting was supported by the evidence of Gavin Rowson, who was an honest and credible witness. Gavin Rowson's unchallenged evidence confirmed the authenticity of the text message exchange, and confirmed that Mr Rowson had access to sufficient funds to purchase the Hardy's business at the relevant time; and

(d) Mr Alpass' failure to put to Mr Rowson that his evidence should not be believed by reason of his prior conviction for dishonesty offences breached the rule in Browne v Dunn,[93] such that Mr Alpass should not be permitted to rely upon those past convictions and sentencing remarks to impugn Mr Rowson's credit. Mr Rowson submitted that the approach taken in cross-examination was an example of counsel being 'willing to wound, and yet afraid to strike'.[94]

125 Mr Rowson submitted that Mr Alpass' evidence was unreliable, and therefore should be treated with caution. In particular:

(a) Mr Alpass has almost no independent recollection of the relevant events (contrary to what he said in his witness statement), often saying during the course of giving his evidence that he relied heavily upon his file notes;

(b) his demeanour was unremarkable, save that he was 'often quiet, and looking downwards at key and contentious points in his evidence', was sometimes evasive, and 'seized opportunities to advocate for his case when responding to questions in cross-examination';

(c) he made no reference to the disputed meeting in his witness statement, despite agreeing in the witness box that the disputed meeting did occur;

(d) his answers under cross-examination were often inconsistent with other answers given by him; and

(e) Mr Rowson submitted as follows:

However, notwithstanding the above matters, the plaintiff does not ask the Court to find that Mr Alpass was dishonest or not a credible witness. Rather, the plaintiff simply submits that Mr Alpass was not a reliable witness and little weight ought to be given to his evidence, having regard to his clear lack of independent recollection, and total reliance on his notes - which reliance is misplaced...

126 Mr Rowson submitted that the reliability of Mr Alpass' evidence was undermined by his heavy reliance upon the file notes, as the file notes were not a fulsome record of everything that was said during the meetings or conversations referenced in the file notes. Mr Rowson submitted further as follows:

The file notes themselves raise numerous unanswered questions, including:

(a) why was the most critical of the file notes mis-dated, not just with the wrong date, but also the wrong year (and a future year at that). One can understand writing the wrong year in the early months of a new calendar year, but not in July, let alone for a year which is yet to arrive;

(b) why was the most critical part of the file notes - that of the Second Meeting on 21 July 2016, not accompanied by the usual time notation in a circle which appears for all other attendances in the court book - leaving open the possibility that a further page or pages exist;

(c) why were the file notes altered after the fact, by a solicitor, let alone one who was aware that there was now litigation on foot for which those file notes would play an important part;

(d) why were the hole punches in the court book different to those in the original tendered exhibits; and

(e) why were there staple marks and torn corners on the original tendered exhibits?

127 Mr Rowson does not contend that there has been any impropriety in the handling of the file notes, but submitted that:

...the file notes cannot be treated as reliable and irrefutable evidence of the conversations to which they refer and/or that they are a complete record of the material discussions, which Mr Alpass frankly conceded that they were not. At best, they can be referenced as a useful aid as to the chronology and broad content of the relevant discussions, but not evidence that what was recorded in them was said (let alone: what was not recorded in them was not said).

128 Mr Rowson made the following further submissions with respect to the evidentiary issues arising in this proceeding:

(a) the judgments and sentencing remarks concerning Mr Rowson's criminal history are inadmissible to prove the facts in issue in those proceedings. They cannot be relied upon to support a contention that Mr Rowson could never have obtained a practising certificate, because that is not a fact in issue in this proceeding, and the evidence does not fall within the exceptions to the admission of credibility evidence in the Evidence Act;

(b) in any event, this is a case about the reliability of recollection, not the credibility of witnesses;

(c) there should be no limitation upon the use of the text message exchange. It is both a contemporaneous record and satisfactory corroboration of the contention that an agreement had been reached for the sale and purchase of the Hardy's business at the disputed meeting;

(d) a Jones v Dunkel[95] inference should be drawn from Mr Alpass' failure to call Mr Cooper to give evidence of the critical conversation between Mr Alpass and Mr Cooper on 25 July 2016, where Mr Cooper told Mr Alpass not to sell the Hardy's business to Mr Nelson; and

(e) similar inferences should also be drawn from Mr Alpass' failure to call anyone from LSB to support a submission to the effect that Mr Nelson would not have been able to obtain an extended practising certificate,[96] or any staff from Alpass & Associates to give evidence regarding Mr Rowson's telephone messages, the inspection at the storage facility on 21 July 2016, the amounts held in trust for clients of the Hardy's business and the terms upon which those funds were held, the accuracy or otherwise of the deeds register, and the apparent physical alterations to Mr Alpass' file notes.

129 Mr Rowson submitted that the evidence makes it clear that during the disputed meeting, an oral agreement for the sale and purchase of the Hardy's business was made after Mr Alpass expressly accepted Mr Rowson's offer. Mr Alpass' file note of the disputed meeting was not a fulsome record of what was said, while Mr Rowson's recollection of the disputed meeting was vivid. Further, Mr Rowson's statement that 'we bought back Hardy's!' in the text message exchange, which took place not long after Mr Nelson and Mr Rowson left Mr Alpass' office, was unequivocal, and was inconsistent with the contention that Mr Rowson had made an offer which had neither been accepted or rejected by Mr Alpass.

130 Mr Rowson submitted that, notwithstanding the use of the word 'offer' in the 21 July email (which was explained by Mr Rowson in his evidence), the 21 July email was consistent with an agreement having been reached. The email referred to the identity of the purchaser of the Hardy's business, and requested Mr Alpass' banking details for the payment of the deposit. The email did not include words such as 'we await your response' or 'we look forward to hearing from you', which is what one would expect to see if the email recorded what was only an offer, rather than being a record of an agreement which had already been made.

131 Mr Rowson submitted that Mr Alpass' evidence that he neither accepted or rejected Mr Rowson's offer during the disputed meeting was implausible. It is inconsistent with ordinary human experience that Mr Alpass would make no response at all to such an offer. Mr Rowson's offer was significantly better than any other offer Mr Alpass had received in terms of price and its lack of conditionality, in circumstances where Mr Alpass had been trying to sell the Hardy's business for several months, and the offer was from someone with a historical connection to Hardy's. Mr Alpass had clear and unlimited authority to sell the Hardy's business, and only sought to resile from the agreement after his discussion with Mr Cooper on 25 July 2016.

132 Mr Rowson submitted that Mr Alpass' file note of his discussion with Mr Cooper was the first sign of any concern he had about Mr Rowson and/or Mr Nelson purchasing the Hardy's business. The reference in the file note to 'Darroll Nelson to buy practice' must be read as a reference to him having already sold the Hardy's business to Mr Nelson. The file note was not consistent with there being two competing offers. It was more consistent with an agreement having been reached and Mr Alpass trying to work out what to do once Mr Cooper raised concerns about Mr Nelson's disciplinary history.

133 Mr Rowson submitted that the evidence about his attempts to chase up the contract of sale was consistent with a concluded agreement having already been reached, and all that needed to be done was to draw up a contract to reflect what had already been agreed. Gavin Rowson's evidence about Mr Rowson's annoyance at having 'the deal pulled out from under him' was also consistent with there having been a concluded agreement.

134 Mr Rowson submitted that the evidence given by Mr Alpass regarding his negotiation strategy, where he agreed that he wanted to keep Mr Rowson and Mr Nelson 'on the hook' until Ms Knight entered into a written agreement, demonstrated Mr Alpass' attitude with respect to the sanctity or otherwise of an oral agreement. If Mr Alpass truly had concerns about the appropriateness of Mr Rowson or Mr Nelson as purchasers of the Hardy's business, then surely he would have rejected the offer outright?

135 Mr Rowson submitted, in the alternative, that even if I was not satisfied that Mr Alpass had expressly accepted Mr Rowson's offer, his acceptance can be implied from his conduct and the circumstances, including his failure to disabuse Mr Rowson of any 'misunderstandings' he may have had, which would have been evident to Mr Alpass from Mr Rowson's efforts to chase the contract of sale, and from the updates Mr Rowson was providing Mr Alpass with regarding the status of Mr Nelson's application for an extended practising certificate. There was no evidence that Mr Alpass told Mr Rowson or Mr Nelson that there were things he needed to check before the sale could proceed.

136 Mr Rowson also relied upon the following acts of 'part performance' (perhaps better characterised as relevant post-contractual conduct), including Mr Rowson and Mr Nelson:

(a) taking steps to obtain the funds for the purchase, and seeking to make payment to Mr Alpass for same;

(b) taking steps to obtain Trust Authority for Mr Nelson (which process they were not permitted to complete, after Mr Alpass sold the Assets to someone else);

(c) incorporating a company, and naming it 'HNR Lawyers Pty Ltd', the 'HNR' standing for 'Hardys Nelson Rowson'; and

(d) relinquishing their existing lease, and taking steps to obtain a larger premises to accommodate the new business.

137 In response, Mr Alpass submitted, uncontroversially, that the Court will apply an objective test when determining whether an agreement has come into existence - that is, what would a reasonable person infer or deduce from observing the exchange between the parties?[97] While an agreement can be inferred from the conduct of the parties, silence cannot generally amount to acceptance of an offer.[98]

138 Mr Alpass' submissions referred to the following passage of the decision in White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd[99] regarding the difficulties facing a plaintiff bearing the burden of establishing the existence of an oral agreement:

...Where a party seeks to rely upon spoken words as evidence of a contract, without reliable contemporaneous records or satisfactory corroboration, a party may face serious difficulties of proof... The conversation must be proved to the reasonable satisfaction of the court such that the court must feel an actual persuasion that the words were actually said and were intended by the parties to be legally binding.[100]

139 Mr Alpass submitted that neither the evidence or the objective surrounding circumstances support a finding that a binding agreement was made on 21 July 2016. In particular:

(a) neither of the file notes made by Mr Alpass on 21 July 2016 refer to an agreement being reached (and the file note of the telephone conversation in the afternoon refers only to an offer having been made);

(b) the 21 July email refers to an 'offer', and Mr Rowson's explanation for using that term in this email was not credible. Further, the 21 July email does not include all terms necessary to give effect to the sale and purchase of the Hardy's business;

(c) Mr Alpass' evidence that he neither accepted or rejected the offer put by Mr Rowson should be preferred, because that evidence is supported by contemporaneous documentary evidence, and Mr Rowson is a person of poor credit by reason of his convictions for dishonesty offences in 2007, 2018 and 2022;

(d) Mr Alpass submitted as follows:

... the objective surrounding circumstances also weigh against a finding that a binding agreement was made on 21 July 2016 (or at any time) because:

(a) Neither Mr Nelson nor Mr Rowson had authority to receive trust money and Hardys had substantial trust money that needed to be dealt with in some way pursuant to the transaction. It is not so simple as 'handing it back' to clients. There are many circumstances where trust money cannot be easily returned to the client.

(b) Mr Alpass was advanced in negotiations and had reached a 'provisional agreement' with another party (Ms Lewis/Ms Knight) at the time Mr Rowson made his offer.

(c) A prudent, reasonable and responsible lawyer acting as a receiver of a law practice (which the evidence indicates Mr Alpass was) would not enter into a binding oral agreement to sell the assets of that law practice, particularly in circumstances where it would involve transferring active files, dealing with the trust money held by the law practice, and the deeds held by the law practice on behalf of others.

(e) the subsequent conduct of the parties is either not relevant or admissible, or tends against a finding that there was a binding agreement between the parties. In particular, Mr Alpass referred to the following matters:

(a) Mr Alpass never responded to the [21 July email].

(b) Mr Alpass did not receive or accept any money from Mr Rowson and/or Mr Nelson in respect to purchasing Hardys or draw up (or exchange) any written contract of sale.

(c) Mr Alpass and Mr Rowson had several conversations in which the requirement that a practising certificate enabling Mr Nelson to receive trust monies was discussed. In those conversations, it ought be accepted that, Mr Alpass said to Mr Rowson:

1. 'I don't want to waste my time drawing contracts when I have another offer. When he can give me a final commitment as to when they will be ready (full cert with trust)' (CB 87). The use of the words 'firm commitment', in context, indicates that such a commitment had not yet been given which is consistent with there not being a binding agreement to purchase at that time.

(d) Mr Rowson did not allege that there was an agreement during the phone conversation on 14 September 2016.

140 Mr Alpass submitted that Mr Rowson's objection to the admission of evidence regarding Mr Rowson's criminal history should not be upheld, given that no objection was taken to Mr Rowson being extensively cross-examined on that history. Mr Alpass submitted that when someone has been convicted of serious dishonesty offences, including the falsification of documents, that is clearly relevant to their credibility as a witness. Mr Alpass submitted that Mr Rowson had engaged in 'serious and egregious misconduct [which] demonstrates [that] Mr Rowson had manifested a continuing attitude of disobedience to the law.'

141 Mr Alpass rejected the submission that there had been a breach of the rule in Browne v Dunn,[101] saying that Mr Rowson was clearly on notice that his credit was in issue by reason of his convictions for dishonesty offences.

142 Mr Alpass rejected Mr Rowson's submissions regarding the reliability of his evidence and the accuracy of his file notes, submitting as follows:

(a) Mr Alpass did have an independent recollection of key events and conversations. He clearly recalled telling Mr Rowson that he was wasting his time, being told about the delays in the processing of Mr Nelson's application for an extended practising certificate, and the 'strange and bizarre' conversation he had with Mr Rowson and Mr Nelson on 14 September 2016;

(b) Mr Alpass' evidence that he did not recall certain matters and relied heavily upon his file notes was given in response to a very specific line of questioning, and, in any event, the relevant conversations took place seven years ago;

(c) in relying upon the file notes, Mr Alpass is using the file notes for the very purpose for which they were created;

(d) the submission that 'the file notes raise numerous unanswered questions' goes nowhere given that Mr Rowson does not ask the Court to infer any impropriety in the production or handling of file notes, and given that no suggestion that there was any impropriety was put to Mr Alpass; and

(e) the brevity of the file note of the disputed meeting is consistent with Mr Alpass' evidence that the disputed meeting was very brief. It was not put to him that there were further pages of the file note which have not been produced.

143 In his written submissions in reply, Mr Rowson made the following submissions in response to Mr Alpass' submissions in support of his contention that no binding oral agreement had been reached at the disputed meeting:

(a) in response to Mr Alpass' submission that the contemporaneous documentary evidence is inconsistent with a finding that a binding agreement had been reached on 21 July 2016, Mr Rowson submitted that the file notes were not reliable evidence of what was said and what was not said, and the 21 July email 'contains various indicia of an agreement having been reached';

(b) in response to Mr Alpass' submission that Mr Rowson is a person of poor credit and his evidence should not be accepted as truthful, Mr Rowson submitted that he gave vivid and detailed evidence, and that ...'[t]he attacks on Mr Rowson's credit are improper, were not put and should be rejected';

(c) in response to Mr Alpass' submission that the objective surrounding circumstances do not support a finding that a binding agreement had been reached, Mr Rowson submitted that the issue of the need for the purchaser of the Hardy's business to have an extended practising certificate was clearly an afterthought for Mr Alpass on 25 July 2016, and did not undermine a conclusion that a binding agreement had already been reached;

(d) in response to Mr Alpass' submissions regarding the subsequent conduct of the parties, Mr Rowson submitted that:

(i) Mr Alpass' failure to respond to the 21 July email was hardly probative, and neither was Mr Alpass' refusal to accept a deposit or draw contracts in August 2016, which was after Mr Alpass' discussion with Mr Cooper;

(ii) in contrast, Mr Rowson's conduct is seeking to pay money and in chasing contracts was probative; and

(iii) Mr Alpass' submission that acts of past performance and communications with third parties are irrelevant are contrary to authority and should be rejected.

144 In relation to the use which can be made of Mr Alpass' file notes, Mr Rowson submitted as follows:

The defendant's position appears to be that Mr Alpass' file notes somehow provides a panacea for the case put against him. It does not. The file notes were not fulsome, Mr Alpass did not record every discussion, he had no real independent recollection, the key file note is inconsistent with a contemporaneous message from Mr Rowson to his brother immediately following the meeting on 21 July 2016 and importantly, Mr Alpass' narrative is contrary to ordinary human experience and the way the events are likely to have unfolded.

145 Accordingly, as can be seen from the summary of the parties' submissions above, the critical issue in this proceeding is whether, at the disputed meeting, Mr Rowson made an offer to purchase the Hardy's business which was accepted by Mr Alpass. Only one version of events can be correct.

146 When assessing the credibility and reliability of the key protagonists in this proceeding, I have had regard to the observations of Lyons J in Logos,[102] as follows (omitting footnotes):

As is evident from what I have said above, most of the facts relevant to the determination of this proceeding took place approximately six years ago. Indeed, the content of conversations held in 2016 (particularly in late February 2016) were the subject of detailed cross-examination. It is difficult to recall with any precision what someone said, what someone heard or what someone believed all that time ago. Common experience tells us that the more significant the issue is to a person, the more likely it is that he or she will recall the event, even after a long period of time. However, it is important to acknowledge that, in such circumstances, a person's recollection may be coloured by feelings, by emotion and by personal interest.

...

As I have noted in previous judgments, judges are not given special powers to discern whether a particular witness is not telling the truth. Consistent with practice and common sense, I consider the surest test to determine credibility and reliability in any criminal or civil case is to assess:

the inherent consistency of the witness' account; the consistency of that account with those of other witnesses; the consistency of that account with undisputed facts; the 'credit' of the witness (based upon matters which include, for example, demeanour); any relevant infirmities of the witness; and, importantly, the inherent probability or improbability of the evidence in question.[103]

147 Turning now to the evidentiary issues enumerated in paragraph 45 of these reasons, it is important to appreciate that, as observed by Mr Rowson in his submissions, there were relatively few instances where there was a direct conflict of evidence between Mr Rowson and Mr Alpass, and, some of those conflicts are not particularly relevant to the determination of the issues in this proceeding. In fact, there are only two questions of particular significance: one general, and one specific, the first being the reliability of Mr Alpass' file notes, and the second being the resolution of the conflict in the evidence about the disputed meeting, including the different accounts of where it occurred, who was present, and what was said.

148 Mr Rowson, was, in many respects, an impressive witness. He gave evidence in a forthright and confident manner. He was careful to distinguish in his evidence between instances where he denied that he or Mr Alpass said something, and instances where he could not recall something being said. There was nothing about his demeanour which suggested that he was not telling the truth at all times.

149 Mr Rowson also has a prodigious memory. By way of illustration, he was able to provide a detailed description of Mr Alpass' office layout and contents more than seven years after what I assume was his only visit to the premises. He was able to give a detailed history of Hardy's in his oral evidence and in his instructions to Mr Senia, despite the fact that he would have been a teenager when Hardy's was established in 1983. He gave a very detailed account of what took place during the visit by him and Mr Nelson to the storage facility on 21 July 2016.

150 The elephant in the room of course is that Mr Rowson has been convicted of a number of dishonesty offences, many of which involved gaining a financial advantage at the expense of others, or the community generally. The question is whether, in circumstances where his evidence regarding the disputed meeting directly conflicts with the evidence of Mr Alpass, a solicitor of many decades standing who enjoys the trust of the profession's regulators, his evidence should be automatically disbelieved.

151 In my view, the answer to that question is 'not necessarily'. Effectively, Mr Alpass is asking me to conclude that, because Mr Rowson has a tendency to engage in dishonest conduct, and as it is to his financial advantage to lie in the witness box in this proceeding, I must necessarily conclude that his evidence is false.

152 Mr Rowson submitted that while he does not run away from his past, the sentencing remarks of judges sought to be relied upon by Mr Alpass in this proceeding are of limited utility to the fact finding exercise in this proceeding. First, they are inadmissible for establishing the truth of the facts referred to in those documents, and secondly, counsel for Mr Alpass failed to comply with the rule in Browne v Dunn[104] by failing to expressly put to Mr Rowson that his criminal record means that it is more likely than not that he was lying while giving his evidence in this proceeding. Mr Rowson was not provided with an opportunity to explain why, notwithstanding his past, his evidence should be believed.

153 I tend to agree, with some qualifications. As indicated during the course of the trial, Mr Rowson's criminal history is no more and no less than a relevant background fact. I have endeavoured to evaluate the evidence given by Mr Rowson and Mr Alpass on its merits, having regard to the objective facts and circumstances, the contemporaneous documents, and in the light of ordinary human experience. While Mr Rowson's past conduct might lead me to more readily accept that Mr Rowson's evidence was not truthful, it would not override an alternative conclusion if the preponderance of the other evidence supported Mr Rowson's version of events.

154 While I accept that Mr Rowson was on notice that his credibility would be front and centre in this proceeding, given the inclusion of the sentencing remarks in the courtbook, I do think that it was necessary to provide Mr Rowson with an opportunity to respond to the proposition that his evidence could not be believed by reason of his criminal convictions and the nature of the offences for which he was convicted. However, given my approach to the evidence outlined above, the failure to strictly comply with the rule in Browne v Dunn[105] has no real practical consequences. If I were to find that Mr Rowson gave untruthful evidence, his track record might provide an explanation as to why that might have been the case, and explain why Mr Rowson's evidence was given in such a forthright and open manner (notwithstanding the falsity of that evidence) but his criminal history has not, of itself, caused me to conclude that he must have given false evidence.

155 As discussed above, Mr Rowson did give evidence in a forthright and convincing manner, and he clearly has a very good memory. However, there were some inconsistencies in his evidence which gave me some cause to doubt the credibility and reliability of his evidence overall. Taken individually, they concerned relatively minor issues, but overall, the inconsistencies did add up.

156 By way of example, Mr Rowson gave evidence that at the time he made the offer to purchase the Hardy's business, he was prepared to pay up to $250,000 for the Hardy's business, because he had sufficient funds in trust left to him by his late father. However, Gavin Rowson gave evidence that approximately $160,000 to $200,000 was paid into the trust over time, and that as at 9 August 2016, only $41,461 was held in trust. While this was not a critical issue in the proceeding, given that Mr Rowson did have access to sufficient funds to purchase the Hardy's business, it does support a conclusion that Mr Rowson has a tendency to exaggerate, at the very least.

157 There was an interesting slip during the course of Mr Rowson giving evidence under cross-examination about his discussion with Mr Alpass on 25 July 2016 regarding the need for the purchaser of the Hardy's business to hold an extended practising certificate. Mr Rowson said as follows:

And why did I agree to [the extended practising certificate condition]? Again, as I said, we were already planning on getting a trust extension for Darroll, and, um - ah, I figured that it's - for convenience' sake, ah, or for the - ensuring that the deal does not go south, or other problems with it, um, I would accept that - that as a condition. Um, and, um, we would get the trust certificate, or the trust extension certificate.[106]

158 While the evidence above is not conclusive of the matter, Mr Rowson's evidence that the deal could 'go south' (that is, not proceed) if there were impediments to the transfer of the trust funds to the purchaser of the Hardy's business could be viewed as an implicit acknowledgment on Mr Rowson's part that there was not, as at 25 July 2016, a binding agreement on foot.

159 Further, Mr Rowson's explanation as to why he used the word 'offer' in the 21 July email was unconvincing. And, while Mr Rowson was generally very careful to distinguish between occasions where he denied saying something (or being told something) and occasions he said he did not recall something being said, he maintained his denial that Mr Alpass told him that he would sell the Hardy's business to someone else if Mr Nelson did not obtain an extended practising certificate soon until he was confronted with his description of the relevant telephone call in his witness outline. Again, that denial suggests a tendency to tailor his evidence to support his case.

160 That said, the relatively minor inconsistencies in Mr Rowson's evidence would not be, of themselves, fatal to Mr Rowson's case, particularly given the passage of time since the relevant events. Indeed, Mr Rowson's story has remained remarkably consistent over time, since the date Mr Dale sent Mr Alpass a letter of demand in September 2016. He has tenaciously pursued his claims in this proceeding in the face of many obstacles, including Mr Nelson's death, changes in and absence of legal representation, incarceration, the making of adverse costs orders, and the staunch opposition of the LIV and the LSB to producing the subpoenaed documents.

161 Turning now to the reliability or otherwise of Mr Alpass' evidence, Mr Alpass' evidence was said to be unreliable because he lacked an independent recollection of almost all of the key events and communications, and accordingly was heavily reliant upon his file notes, but the file notes themselves were unreliable, because they were incomplete records of the communications they purported to record, and there were some unexplained issues with the integrity of the file notes.

162 However, I have no particular concerns regarding the reliability of Mr Alpass' evidence. Contrary to Mr Rowson's submissions, Mr Alpass did have some independent recollection of many of the key conversations and events, albeit I accept that this independent recollection was on occasion prompted by reviewing the file notes. As for his demeanour, I accept that he gave his evidence quietly and cautiously, but that presentation seems to reflect his personality rather than being suggestive of anything more concerning. Further, my experience with legal practitioners giving evidence is that they do tend to be quite measured and cautious, which is understandable, given their status as officers of the Court.

163 As for the file notes, I largely agree with Mr Alpass' assertion in his conversation with Mr Dale in September 2016 to the effect that he had very good file notes. It is apparent from Mr Alpass' evidence and the contents of the file notes themselves that, while the file notes are clearly not complete records of the conversations they record, the file notes do contain the key 'takeaways' from those conversations, and repeat some of the key words and phrases used by the participants. And, while I accept that there are some unexplained issues arising from the physical appearance of the file notes, and the odd dating of the file note recording the meetings on 21 July 2016, it was not put to Mr Alpass that the contents of the file notes had been doctored or fabricated, or even that they were not contemporaneous records of the conversations and meetings concerned. Indeed, Mr Rowson made the point that he did not submit that Mr Alpass was a dishonest witness, such that the submission that there were 'unexplained issues' with the file notes did not really go anywhere.

164 Accordingly, I accept that the file notes were accurate. The question remains is whether they were complete.

165 I accept that the file notes in evidence (and, to the extent that I can reconcile the contents of the courtbook with Mr Alpass' affidavit of documents, the file notes discovered by Mr Alpass) do not contain a complete record of every conversation, or even every critical conversation regarding the sale of the Hardy's business. The most glaring gap is the absence of any file notes of any conversations between Mr Alpass and either of Ms Lewis or Ms Knight after 29 July 2016. While it is possible that there was no further conversation after 29 July 2016 and before Mr Alpass sent a letter to Ms Knight with a draft contract of sale on 19 August 2016, that seems highly unlikely.[107]

166 However, while there may be missing file notes, in the sense that there were likely to have been conversations relevant to the issues in this proceeding which were not recorded by the file notes in evidence, Mr Rowson did not give evidence of any conversations or communications he had with Mr Alpass which were not recorded by a file note, a record of a telephone message, or an email: that is, there are no missing file notes recording communications between Mr Rowson and Mr Alpass. Accordingly, the issue that remains is whether I can be satisfied that the file notes omitted or erroneously recorded material parts of critical conversations.

167 Turning now to the question of whether an adverse inference can be drawn from Mr Alpass' failure to call either Mr Cooper of the LSB and/or other staff of Alpass & Associates, Mr Rowson's submissions regarding the latter can be dealt with quite promptly. First, even if the records of telephone messages and file notes of Mr Alpass' staff members could not be properly characterised as business records, which I doubt, there was no dispute between the parties about the content of any of the messages left by Mr Rowson for Mr Alpass, or what happened when Mr Rowson and Mr Nelson went to inspect the assets of the Hardy's business at the storage facility.

168 Secondly, while I accept that it is possible that Mr Alpass' staff could give evidence about what trust funds were held by Mr Alpass, I can see how Mr Alpass would not have considered it necessary to call them to do so. I am not aware of any requests having been made by Mr Rowson prior to trial seeking discovery of documents which would evidence the funds held in trust in connection with the Hardy's business, or upon what terms or undertakings the trust funds were held. In any event, there were a number of documents in the confidential courtbook which evidenced trust account balances held by Mr Alpass on behalf of clients of the Hardy's business.

169 Further, Mr Rowson has pleaded that the agreement was varied to incorporate a term that Mr Nelson would obtain an extended practising certificate, and Mr Rowson gave evidence that he was assisting Mr Nelson to take steps to do so. The suggestion that there was an issue as to whether Mr Alpass in fact held trust funds for the clients of the Hardy's business, or that there was no need for Mr Nelson to obtain an extended practising certificate because the assets of the Hardy's business could be sold without transferring the trust funds to the purchaser, did not arise from the pleadings, and only really emerged during the running of the trial.

170 Accordingly, no adverse inference could be drawn from Mr Alpass' failure to call any of his staff concerning the trust funds held by him on behalf of the clients of the Hardy's business, or any other issue.

171 Mr Rowson submitted that a Jones v Dunkel[108] inference should be drawn from Mr Alpass' failure to call Mr Cooper to give evidence. First, there is no evidence that Mr Cooper was not available to give evidence at the trial. Secondly, some portions of the file note could be interpreted in different ways (such as the notation 'Darroll Nelson to buy the practice?')[109] and Mr Cooper would be in a position to shed light on a critical issue, being whether Mr Alpass considered Mr Nelson to be merely a prospective purchaser of the Hardy's business, or whether Mr Alpass told him or said words to indicate that he had in fact already sold the Hardy's business to Mr Nelson.

172 In response, Mr Alpass submitted that it was open to Mr Rowson to call Mr Cooper himself, given that Mr Cooper is employed by the LSB, and as such could not be said to be in Mr Alpass's camp. In any event, Mr Alpass submitted, an adverse inference could not be drawn as a consequence of Mr Alpass' failure to call evidence which would merely corroborate evidence which had already been given. Mr Alpass gave evidence about what was said during his telephone conversation with Mr Cooper, and his evidence was corroborated by his file note. Mr Alpass submitted that Mr Rowson had failed to articulate how his failure to call Mr Cooper could lead me to more readily reach a conclusion that a binding agreement had been reached on 21 July 2016.

173 Accordingly, the position with respect to Mr Cooper is not straightforward. Mr Cooper could have given evidence which fleshed out the information in the file note of the discussion he had with Mr Alpass on 25 July 2016. That evidence may have confirmed or undermined Mr Alpass' evidence that, in his own mind at least, he had not sold the Hardy's business to Mr Rowson and/or Mr Nelson, and he had not conducted himself in such a way as to lead them to believe that he would sell the Hardy's business to them. And, as indicated earlier in these reasons, evidence of post-contractual conduct is relevant to the question of whether in fact a contract had been formed. The question is whether an adverse inference should be drawn from Mr Alpass' failure to call Mr Cooper as a witness.

174 With some misgivings, I do not draw any adverse inference from Mr Alpass' failure to call Mr Cooper to give evidence. I accept that, practically speaking, Mr Cooper could be considered to be in Mr Alpass's camp. He was an officer of the division of the LSB responsible for external interventions into legal practices, and may well have been directly involved in facilitating Mr Alpass' appointment as receiver.

175 I also accept that it would have been open to Mr Rowson to subpoena Mr Cooper to give evidence, but I also appreciate, as a practical matter, it may have been difficult for him to do so, particularly given that in the months leading up to trial, Mr Rowson was in a dispute with the LSB regarding the subpoenaed documents, in which the LSB adopted quite an adversarial approach to Mr Rowson's subpoena.

176 However, given that I accept, as a general proposition, that the file notes accurately record the critical matters discussed in the conversations they record, and, given that Mr Alpass has an independent recollection of the conversation between him and Mr Cooper, I do not consider that calling Mr Cooper to give evidence would have added so much to the body of evidence in this proceeding so as to justify drawing an adverse inference from Mr Alpass' failure to do so. To explain further, I accept the proposition advanced by Mr Rowson that it was Mr Alpass' knowledge of Mr Cooper's concerns which soured Mr Alpass on Mr Nelson and Mr Rowson as potential purchasers of the Hardy's business, and, after that time Mr Alpass was really only stringing them along until the sale to Ms Lewis and/or Ms Knight proceeded. That of itself does not shed much light on the critical question of whether an agreement had already been made prior to 25 July 2016, unless I was to entertain making a finding that Mr Alpass had given false evidence regarding what was said during the disputed meeting, rather than a finding that he could not recall what was said during the disputed meeting. After all, this conversation took place only four days after the disputed meeting.

177 Turning now to the text message exchange, Mr Alpass submitted that the text message exchange could only be admitted into evidence for the purpose of evidencing Mr Rowson's state of mind, which would be relevant only for the purpose of his promissory estoppel claim (and arguably is not even relevant to that issue). Mr Alpass submitted that the use of the text message exchange should be so limited pursuant to s 136 of the Evidence Act.

178 I consider that there should be no limitation on the use to which the text message exchange can be deployed. Evidence of post-contractual conduct is relevant to the question of whether a contract was actually formed.[110] It is by no means determinative, but a statement by Mr Rowson to the effect that he had purchased the Hardy's business, within an hour or so of the disputed meeting, supports Mr Rowson's contention that during the disputed meeting, Mr Alpass said words that led Mr Rowson to form the view that Mr Alpass had agreed to sell the Hardy's business to him and Mr Nelson. I do not accept Mr Alpass' contention that evidence of post-contractual conduct is admissible only if it is evidence of communications between the parties to the alleged contract.

179 I agree with Mr Rowson's submissions that such a limitation is not supported by the authorities and I see no barrier in principle to the reception of such evidence. However, there is some support in the authorities for the proposition that evidence of post-contractual conduct is only admissible if it is evidence of conduct which is known to both parties.[111] However, no such limitation is referred to in the decision of the Court of Appeal in Danbol Pty Ltd v Swiss Re International SE,[112] ('Danbol') where the Court stated, unequivocally, that 'it is well established that post formation conduct may be admissible to prove the existence of a contract'.[113]

180 I accept that Mr Alpass could not possibly have known of the text message exchange. However, not only was the text message exchange relevant to Mr Rowson's state of mind, which is relevant to his promissory estoppel claim, it is also relevant to the question of whether Mr Rowson and Mr Nelson were ready, willing and able to complete the purchase of the Hardy's business, which is squarely an issue arising from the pleadings. In any event, for reasons discussed later in this section of these reasons, the text message exchange cuts both ways, in that it provides some support for Mr Alpass' contention that no offer was made, and that no binding oral agreement was reached at the disputed meeting.

181 Turning now to the primary issue in this proceeding, I am not satisfied that an oral agreement was reached between Mr Rowson and Mr Nelson on the one hand, and Mr Alpass on the other hand. I accept Mr Alpass' version of what occurred during the disputed meeting, and accordingly, I accept that no offer was made by Mr Rowson (or accepted by Mr Alpass) during the disputed meeting.

182 I consider that my conclusion regarding what occurred and what was said was consistent with Mr Alpass' independent recollection of the relevant events, the file notes (which I accept to be a reliable record of the events and the conversations they record), the text message exchange, and, the logic of ordinary human experience.

183 I accept that, on its face, the evidence given by Mr Rowson as to what occurred at the disputed meeting was compelling, given his demeanour and the quality of his recollection. I consider that there are aspects of the communications between the parties and some conduct on the part of Mr Rowson in particular which was consistent with an agreement having been made. However, those communications and that conduct was not so unambiguous as to provide me with the degree of satisfaction required to undermine my conclusions regarding what did and did not occur during the disputed meeting. The position may have been different had Mr Rowson contended that the offer he made during his telephone call with Mr Alpass on the afternoon of 21 July 2016 had been accepted by Mr Alpass, given that the file note clearly records an offer having being made by Mr Rowson, but that was not Mr Rowson's case.

184 Ultimately, Mr Rowson's attacks upon the reliability of Mr Alpass' evidence were unsuccessful. I accept that Mr Alpass had a reasonably good recollection of the disputed meeting, albeit prompted by his review of his file note. Mr Rowson's submissions hinted at a case theory to the effect that Mr Alpass knew that he had agreed to sell the Hardy's business to Mr Rowson and Mr Nelson, but he got cold feet after speaking to Mr Cooper, and realised he had to resile from the agreement. The necessary implication of such a proposition is that Mr Alpass' evidence was not merely unreliable, it was in fact deliberately untrue. However, such a proposition was not put to Mr Alpass, and it would have needed to have been put to him.

185 While there are shades of some post hoc rationalisation associated with Mr Alpass' evidence regarding the matters he would need to take into account when selling the Hardy's business (see paragraph 50 of these reasons) they do, as a matter of logic, seem to be reasonable matters for someone in Mr Alpass' position to take into account. The need to evaluate those matters is inconsistent with Mr Alpass making what would have been, in effect, a snap decision to accept a verbal offer to purchase the Hardy's business.

186 That said, I do agree with Mr Rowson's submission to the effect that the question of whether a prospective purchaser of the Hardy's business held an extended practising certificate seemed to have been somewhat of an after-thought on Mr Alpass' part. It was not raised by Mr Alpass during his discussions with Mr Rowson and Mr Nelson at the first meeting on 21 July 2016, about which there was relatively little controversy about what was said. Further, Mr Alpass was quite prepared to enter into a provisional agreement with Ms Lewis prior to his dealings with Mr Rowson and Mr Nelson without any apparent investigation of the status of her practising certificate. Indeed, the draft agreement sent by Mr Alpass to Ms Lewis on 13 July 2016 made no reference to any requirement that in order to purchase the Hardy's business she must hold an extended practising certificate.

187 However, Mr Alpass' evidence about what occurred at the disputed meeting was inherently plausible. Mr Rowson and Mr Nelson had met with Mr Alpass earlier that day. Mr Rowson and Mr Nelson had undertaken an inspection of the deeds, and they liked what they saw. However, they had limited opportunity to discuss the matter on the trip back to Mr Alpass' office, because they were in the company of one of Mr Alpass' staff members. And, importantly, as was apparent from the evidence of both Mr Rowson and Gavin Rowson and the text message exchange, Mr Rowson and Mr Nelson were in no position to make an offer until after Mr Rowson had spoken to Gavin Rowson, because Gavin Rowson controlled the trust, from which the purchase price was to be paid. There was no evidence to suggest that Gavin Rowson would automatically accede to any request by Mr Rowson for funds from the trust. Indeed, Gavin Rowson's evidence was to the contrary: he wanted to know what was being purchased with the funds before agreeing to provide the funds.[114]

188 Mr Rowson gave evidence that he was an experienced businessman, and had entered into commercial agreements over the course of the years.[115] He clearly knew the difference between an offer which was subject to finance and an unconditional offer, and would have appreciated that an unconditional offer would have been more attractive to Mr Alpass than a conditional offer. However, given Mr Rowson's evidence that the source of the funds for the purchase was the trust, it seems to me that he could not make an unconditional offer without the consent of Gavin Rowson. Indeed, that may well explain why Mr Rowson said that he had just 'bought Hardy's back' in the text message exchange, to make it appear to Gavin Rowson that he needed the money, because an agreement had already been reached. Significantly, Gavin Rowson did not appear to know whether Mr Rowson had actually purchased the Hardy's business or had merely made an offer: he referred to both possibilities in his evidence.[116]

189 Contrary to Mr Rowson's submissions, Mr Alpass' recollection about what occurred during the disputed meeting was quite good. He recalled speaking to Mr Rowson in the corridor outside his office, and observing Mr Nelson wandering around the car-park looking confused. He had a plausible explanation as to why he did not mention what occurred during the disputed meeting, in particular his observations regarding Mr Nelson's conduct and presentation, in his witness statement. That Mr Rowson said that he would get back to him tomorrow also seemed quite plausible, as was his evidence that he mentioned that he already had an offer of $20,000.

190 Mr Alpass' evidence was consistent with his brief file note of the disputed meeting. Once again, I am satisfied that the file notes are generally reliable, record the key elements of what was said during the relevant communication, reflecting the usual practice of a prudent, experienced solicitor.

191 Importantly, I find it very difficult to fathom why Mr Alpass would not have recorded an agreement, if it was made, or an offer, if it was made in a file note. I accept his evidence that, like all good solicitors, he makes file notes of all communications of substance. In the part of the file note under the dash delineating the end of the first meeting that day (about which there is not much dispute), Mr Alpass' file note referred to Ms Crawford taking Mr Rowson and Mr Nelson to the storage facility to inspect the deeds and other assets. It seems to me to be remarkable that Mr Alpass would refer to what is a relatively mundane matter in his file note, but then fail to record that an agreement or an offer had been made, or the terms of any such agreement or offer. There was no reason for him not to do so: Mr Alpass' evidence that his file notes are made contemporaneously with the relevant interaction was not seriously challenged. On Mr Rowson's own case, Mr Alpass did not have any concerns about the qualifications of Mr Rowson and/or Mr Nelson to purchase the Hardy's business until 25 July 2016. In summary, the absence of any file note recording the making of the alleged agreement, or even an offer, is close to conclusive proof that the agreement or offer was not made.

192 Similarly, there is no reason to doubt the veracity of the file note of the telephone conversation between Mr Rowson and Mr Alpass later that day, which records an offer being made by Mr Rowson and the terms of that offer. The terms of the offer recorded in the file note were consistent with the terms referred to in the 21 July email, in which Mr Rowson confirmed the offer. If, as Mr Rowson had contended, an offer had been made and accepted during the disputed meeting, why were those terms not recorded in the file note of the disputed meeting, and why were they repeated during the subsequent telephone conversation and email?

193 Indeed, the file notes, the text message exchange and the 21 July email are consistent with what seems to me to be the most logical sequence of events. Mr Rowson and Mr Nelson met with Mr Alpass and discussed the Hardy's business, and potential transition arrangements. Mr Alpass knew Mr Nelson was a solicitor, having 'crossed swords' with him in the past, and quite reasonably assumed that Mr Rowson was a solicitor too, given that Mr Rowson had told him that he worked with Mr Nelson.

194 Mr Rowson and Mr Nelson then inspected the active files, and the deeds and other assets at the storage facility, and were happy with what they saw. Mr Rowson exchanged pleasantries with Mr Alpass on his return, and said that he would get back to Mr Alpass the following day, presumably with an offer (or to tell Mr Alpass that they would not be making an offer). By no later than that time (but possibly earlier), they knew that there was another offer to purchase the Hardy's business for $20,000, and they probably knew that it was subject to finance.

195 After Mr Rowson and Mr Nelson left Mr Alpass' premises, Mr Rowson contacted Gavin Rowson. As noted earlier, he needed to do so before making an unconditional offer for a sum in excess of $20,000, because Gavin Rowson controlled the purse strings. After receiving confirmation that he could make an offer, he telephoned Mr Alpass and made an offer, and he followed up his verbal offer with the 21 July email, as requested by Mr Alpass.

196 The evidence shows that a few days after Mr Alpass received confirmation of Mr Rowson's offer, Mr Alpass took time to evaluate the competing offers he had received. He made enquiries of both prospective purchasers regarding the status of their practising certificates. He then spoke with Mr Cooper about both prospective purchasers, and sought Mr Cooper's views on the matter, which Mr Cooper provided in somewhat forthright terms.

197 The above sequence of events is entirely logical and plausible and consistent with ordinary human experience regarding commercial matters - and is entirely consistent with Mr Alpass' evidence and the file notes.

198 While there was certainly conduct on the part of Mr Rowson which was consistent with an agreement having been reached on 21 July 2016, the same could not be said for Mr Alpass. Once one accepts the veracity of Mr Alpass's file notes, all of his conduct was consistent with him having responded neutrally to Mr Rowson's offer. He drew up no contract of sale (noting that he would not have been in a position to settle in 14 days, because of the requirement to write to the Hardy's clients about whether they consented to the transfer of the files to the purchaser of the Hardy's business). He did not write to any of Hardy's clients to that effect. He continued dealing with Ms Lewis, and presumably, later, with Ms Knight. He spoke with Mr Cooper, and asked him whether he should sell the Hardy's business to Mr Nelson. He told Mr Rowson that he did not want to waste his time drawing up contracts, and that he would sell the Hardy's business to someone else if Mr Nelson could not obtain an extended practising certificate. None of this conduct is consistent with him having said to Mr Rowson and/or Mr Nelson, during the disputed meeting or otherwise, the words 'I accept your offer'.

199 The dealings between Mr Alpass and Mr Rowson and Mr Nelson are to be contrasted with Mr Alpass' dealings with Ms Lewis, and then Ms Knight. Mr Alpass' file note records an agreement on price being reached with Ms Lewis on 11 July 2016.[117] Two days later, on 13 July 2016, Mr Alpass sent Ms Lewis a detailed letter referring to the 'provisional agreement',[118] which, among other things:

(a) specified the assets of the Hardy's business to be purchased by Ms Lewis;

(b) enumerated the active client files, and stated that the Deed of Sale would include a clause to the effect that Mr Alpass would write to each of the clients with active files advising them of the sale of the Hardy's business; and

(c) concluded as follows:

We look forward to your confirmation that you are ready to proceed, so that we can prepare the draft Deed of Sale for your perusal.

200 The written communications between Mr Alpass and Ms Knight regarding the sale and purchase of the Hardy's business exhibit a similar degree of formality and deliberation. The written contract of sale ultimately executed by Mr Alpass and Ms Knight, while not lengthy, was carefully crafted and comprehensive. Indeed, the records of the dealings between Mr Alpass and Ms Lewis and Ms Knight reflect what one might expect from a prudent solicitor (and receiver) conducting the sale of a legal practice.

201 In contrast, Mr Alpass' dealings with Mr Rowson and Mr Nelson are more consistent with an offer having been made, but not accepted or rejected, than an offer having been made and accepted by Mr Alpass. Mr Alpass did not respond to the 21 July email. One would expect that, if he had indeed accepted the offer, he would have done so, or sent a letter in similar terms to that sent by him to Ms Lewis on 11 July 2016. If he had done so, there might then be some scope for debate about whether any agreement was immediately enforceable by reason of the principles enunciated in Masters v Cameron,[119] but, in the current case, the evidence does not enliven such a debate.

202 Accordingly, I do not accept Mr Rowson's evidence regarding what was said during the disputed meeting. I also reject his evidence that the only purpose of the subsequent telephone call was to tell Mr Alpass about which entity would be the purchaser of the Hardy's business, and reject his explanation for why he used the word 'offer' in the subsequent email, which of itself was unconvincing.

203 Further, I do not accept Mr Rowson's characterisation of Mr Alpass' evidence to the effect that he neither accepted or rejected the offer to be correct.

204 Mr Rowson submitted that for Mr Alpass to say the words 'I neither accept or reject your offer' would be inconsistent with ordinary human experience. I agree, as far as that goes. However, when one closely reviews Mr Alpass' evidence, he does not say that he said those words to Mr Rowson: rather he gave evidence as to what he did, or, more accurately, what he did not do. He did not give evidence that he said to Mr Rowson and Mr Nelson the words 'I neither accept or reject your offer'.

205 Mr Rowson relied heavily upon what he said was post-contractual conduct to support his claim that the parties had entered into a binding oral agreement at the disputed meeting, including the text message exchange, his attempts to chase up the 'paperwork' for the contract, his offer to pay a deposit, and the conduct in relinquishing a lease and taking steps to find new premises and to incorporate HNR.

206 I agree that this evidence does lend support to Mr Rowson's claim. However, I also accept it is more likely than not that Mr Rowson genuinely believed that either he had reached an agreement with Mr Alpass to purchase the Hardy's business, or at the very least that the prospects of Mr Alpass accepting his offer were very strong, because it was better than the other offer that he knew Mr Alpass had received.

207 The possible reasons for this belief, and whether Mr Alpass' conduct induced that belief, will be discussed further in the following section of these reasons. However, I do not accept that this belief arose out of anything that Mr Alpass said at the disputed meeting. As there was no agreement, there was no repudiation or breach, and Mr Rowson's claim for breach of contract fails.

208 For completeness, Mr Rowson's primary case, which he strongly pressed, was that Mr Alpass had expressly accepted the offer made by him and Mr Nelson at the disputed meeting. However, while this submission is probably more relevant to Mr Rowson's promissory estoppel claim, there was a hint in Mr Rowson's submissions that, if I was not satisfied that Mr Alpass spoke the words attributed to him by Mr Rowson at the disputed meeting, his conduct in not accepting or rejecting Mr Rowson's offer, and in failing to disabuse Mr Rowson of his mistaken assumption that the parties had reached a binding agreement, I should find that Mr Alpass' conduct evidenced his acceptance of Mr Rowson's offer.

209 However, to the extent that such a submission is pressed, it must be rejected. The discussion of the Court of Appeal in Danbol[120] makes it clear that:

(a) as a general rule, silence cannot constitute acceptance;[121]

(b) while acceptance may be inferred from conduct, the 'conduct relied upon must be objectively capable of constituting and conveying acceptance in the eyes of a reasonable person in the position of the offeror';[122]

(c) in order to bind a party to an agreement by reason of its conduct, the party asserting the existence of an agreement 'must point to conduct that positively and unambiguously demonstrates an agreement';[123]

(d) in the absence of a clearly identified offer and acceptance of that offer, it will be difficult to identify the necessary mutual assent;[124] and

(e) the Court stated as follows:

In assessing the adequacy of the conduct or communication which is said to amount to acceptance, and thereby sustain a contract, it is important not to lose sight of the critical inquiry: what would a reasonable person in the position of the offeror make of an alleged acceptance? To find a contract in that context, the court must be satisfied that the offeror would conclude that the offeree had positively bound itself to the contract. It may be easier to find such an expression in verbal communications.

In every case it will be necessary to show that the conduct was responsive to the offer, and that the offeree has signalled an acceptance of a binding obligation. Where the offeree's conduct would leave a reasonable person in the positon [sic] of the offeror unclear or uncertain as to its meaning then the court will be left unpersuaded as to the existence of the contract. That remains true whether the conduct takes the form of acts, communication or silence.

In the absence of an express acceptance, the existence of a contract will depend on what inferences can be drawn from the conduct or communications. The fact that conduct is consistent with the existence of a contract may mean no more than that one available inference supports the existence of a contract. Depending on what other inferences might arise, the fact that conduct is consistent with there being a contract in place is unlikely to be enough, on its own, to establish the existence of a contract.[125]

210 If one accepts that Mr Alpass did not expressly accept Mr Rowson's offer during the disputed meeting or at all, as I do, then the conduct of Mr Alpass in his dealings with Mr Rowson after the offer was made might have led an objective observer to form the view that Mr Alpass was to some extent stringing Mr Rowson along. However, I consider that an objective observer could not possibly form the view that Mr Alpass had bound himself to sell the Hardy's business to Mr Rowson and Mr Nelson, particularly in the absence of any written response to the 21 July email, and the subsequent discussions between Mr Rowson and Mr Alpass regarding the status of Mr Nelson's practising certificate. The question of whether that conduct could give rise to an estoppel in Mr Rowson's favour will be considered in the following section of these reasons.

Is Mr Alpass estopped from denying the existence of an agreement?

211 In his written outline of opening submissions, Mr Rowson referred to the principles underpinning the doctrines of promissory estoppel and estoppel by convention, as follows (omitting footnotes):

Promissory estoppel may operate where one party adopts an assumption as a result of the conduct of another, alters their position in reliance on that assumption and would suffer detriment if the other party acted inconsistently with the assumption. The promise, representation or assurance relied upon may be express or implied and may include silence, in appropriate circumstances.

A separate species of estoppel known as 'conventional estoppel' operates on a similar basis to promissory estoppel but has no 'inducement' element, although both parties must have acted on the basis of the assumption and known or intended that the other would as well. This doctrine was described by the NSW Court of Appeal in Ryledar Pty Ltd t/as Volume Plus v Euphoric Pty Ltd as follows:

[E]stoppel by convention is a form of estoppel founded upon an assumed state of affairs by the parties whether as to a matter of fact or a matter of legal effect which both will be estopped from denying: Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14; (1986) 160 CLR 226 at 244-245. That assumed state of affairs takes as a given the terms of the contract as known to and understood by the parties but from which the parties have departed for the purpose of their furtherance of their relationship under the contract.

212 Mr Rowson relied upon Mr Alpass' evidence to the effect that he 'neither accepted or rejected the offer' made by Mr Rowson to purchase the Hardy's business,[126] and his evidence that he wanted to keep Mr Rowson and Mr Nelson 'on the hook'[127] to support his submission that, even if I could not be satisfied that an agreement was formed on 21 July 2016, Mr Alpass induced Mr Rowson and Mr Nelson to believe that he had accepted their offer. That belief was evidenced by:

(a) the text message exchange, which was soon after the disputed meeting;

(b) Mr Rowson's telephone call to Mr Alpass later on 21 July 2016, and the 21 July email, where Mr Rowson provided Mr Alpass with the details of the purchaser entity, requested Mr Alpass to provide his banking details in order to pay the deposit, and requested that Mr Alpass confirm the arrangements they had agreed regarding the open files;

(c) Mr Rowson's call to Mr Alpass on 28 July 2016 to chase 'the paperwork' for the purchase of the Hardy's business;

(d) Mr Rowson taking steps to obtain funding to make the purchase, and offering to pay those funds into Mr Alpass' trust account;

(e) Mr Rowson and Mr Nelson taking steps to obtain an extended practising certificate;

(f) Mr Rowson taking steps to incorporate HNR; and

(g) Mr Rowson and Mr Nelson relinquishing their lease for their existing premises, and taking steps to obtain larger premises.

213 Mr Rowson also relied upon the conduct enumerated above to support his contention that he and Mr Nelson altered their position in reliance upon the assumption that an agreement had been reached with Mr Alpass for the sale and purchase of the Hardy's business.

214 Mr Rowson submitted that the text message exchange was particularly relevant to the estoppel claim. The text message exchange evidenced Mr Rowson's assumption that the Hardy's business had been sold to him and Mr Nelson, and that assumption must have been induced by something said by Mr Alpass. Further, by arranging for funds to be withdrawn from the trust, Mr Rowson acted in reliance upon the assumption induced by Mr Alpass' conduct.

215 Mr Rowson submitted that, if it were to be held that there was no binding agreement reached between Mr Rowson and Mr Alpass, the current case is on all fours with the facts and circumstances which were the subject of the decision of the High Court in Waltons Stores (Interstate) Ltd v Maher[128] ('Waltons Stores'). In Waltons Stores,[129] the plaintiffs successfully claimed equitable damages in lieu of specific performance when the defendant was found to have induced in the claimant a reasonable belief that a lease would be executed. Acting in reliance upon that belief, the claimants demolished a building on their property, and commenced construction of a new building designed to meet the defendant's specifications.

216 Mr Rowson observed that Waltons Stores[130] also supports the proposition that, in an appropriate case, silence may amount to conduct which may be held to have induced a mistaken assumption in another. Here, Mr Alpass gave evidence that he did not consider that it was his responsibility to disabuse Mr Rowson of any mistaken assumption held by Mr Rowson, and admitted that he was keeping his cards close to his chest while negotiating with both sets of potential purchasers.

217 Mr Rowson submitted that Mr Alpass' silence in the face of Mr Rowson's attempts to chase up the contract of sale and pay the deposit, and Mr Rowson's updates upon their efforts to establish the purchasing entity and obtain new office space amounted to an inducement on Mr Alpass' part, as was of course his statement at the disputed meeting that 'I accept your offer'. Mr Rowson's evidence regarding this activity evidences his belief that he and Mr Nelson had purchased the Hardy's business, and it was not put to him that his belief was not reasonable.

218 In response, Mr Alpass submitted that Mr Alpass' conduct, viewed objectively, did not give rise to any reasonable assumption on Mr Rowson's part that there was a binding agreement. In particular:

(a) Mr Alpass did not respond to the offer in the 21 July email;

(b) Mr Alpass never provided the bank details requested by Mr Rowson in the 21 July email;

(c) on 28 July 2016 Mr Alpass disabused Mr Rowson of any mistaken assumption he may have had, saying that he did not want to waste his time drawing up contracts if Mr Nelson and Mr Rowson were unable to make a commitment to complete the purchase of the Hardy's business;

(d) Mr Alpass failed to respond to Mr Rowson's message of 3 August 2016; and

(e) on 29 August 2016 Mr Alpass declined Mr Rowson's offer to put money in his trust account, and told him that he would sell the Hardy's business to anyone.

219 Mr Alpass submitted further that the evidence did not establish that Mr Rowson took any steps in reliance upon any mistaken assumption, or that any such steps were to his detriment. There was no evidence to support the allegation that Mr Rowson and Mr Nelson relinquished a lease of any office premises, or became bound by a subsequent lease in reliance upon any mistaken assumption they held about whether an agreement had been reached for the purchase of the Hardy's business. Merely incorporating a new company cannot amount to material detriment capable of giving rise to an estoppel.

220 Finally, Mr Alpass submitted that '[no] estoppel by convention arises on the pleadings or the evidence in this proceeding'.

221 Mr Rowson's claim founded on promissory estoppel is not necessarily based upon an alternative factual scenario than that put forward by Mr Rowson in his evidence. Rather, it seems to be founded on the premise that Mr Rowson's evidence about what occurred at the disputed meeting is accepted, but I was to hold that the oral agreement fell within the third category referred to in Masters v Cameron:[131] that is, the parties intended to postpone the creation of contractual relations until a formal contract was drawn up and executed. I do not understand Mr Rowson to be putting forward an alternative version of events.

222 I agree that if I had accepted Mr Rowson's evidence as to what took place during the disputed meeting, then this case would be analogous with the facts in Waltons Stores.[132] But that is not the finding that I have made. The question remains whether Mr Alpass otherwise conducted himself in such a way as to induce in Mr Rowson the (reasonable) belief that Mr Alpass had committed himself to selling the Hardy's business to them.

223 I consider that Mr Alpass may well have done so. I accept that Mr Rowson conducted himself in a way consistent with holding a genuine belief that, subject to Mr Nelson obtaining an extended practising certificate, he and Mr Nelson (or HNR) would acquire the Hardy's business. It is possible that he held this belief merely by reason of his knowledge that their offer was more commercially attractive than the other offer Mr Alpass had received, and therefore he believed that the offer was bound to be accepted, but that belief, without more, would not have been reasonably held. The question is whether Mr Alpass had said something during the telephone call on 21 July 2016 to encourage that belief, or whether his failure to expressly reject the offer made during that call induced Mr Rowson to believe that the offer had been accepted.

224 Possibly. Mr Alpass' own evidence was to the effect that he was keeping Mr Rowson and Mr Nelson in play until he had exchanged contracts with Ms Knight, and keeping his cards close to his chest, notwithstanding his conversation with Mr Cooper on 25 July 2016.

225 The question is whether Mr Alpass' failure to disabuse Mr Rowson of any mistaken assumption amounted to conduct that could estop Mr Alpass from denying the existence of a binding agreement. In any view, while the position is finely balanced, there was such conduct, at least during the period between 25 July 2016, when Mr Rowson left a message chasing up the contract of sale, and he and Mr Alpass discussed the need for Mr Nelson to obtain an extended practising certificate before purchasing the Hardy's business, and 29 July 2016, when Mr Alpass told Mr Rowson that he was not going to waste time drawing up contracts if Mr Rowson and Mr Nelson could not guarantee that Mr Nelson could obtain an extended practising certificate. I consider that Mr Alpass, having received a telephone message the day before to the effect that Mr Rowson was chasing the contract of sale, would have, or should have appreciated that Mr Rowson assumed that he was the preferred purchaser of the Hardy's business. And, even after 29 July 2016, Mr Alpass would have, or should have appreciated that Mr Rowson believed that the only barrier to completing the purchase was Mr Nelson's failure to obtain an extended practising certificate.

226 The authorities make it clear that, depending on the facts of the particular case, silence, or more specifically, a failure to disabuse another as to a mistaken assumption or expectation may give rise to an estoppel. As stated by Brennan J in Waltons Stores:[133]

Silence will support an equitable estoppel only if it would be inequitable thereafter to assert a legal relationship different from the one which, to the knowledge of the silent party, the other party assumed or expected: see Ramsden v. Dyson (39); Svenson v. Payne (40); Willmott v. Barber (41 ). What would make it inequitable to depart from such an assumption or expectation? Knowledge that the assumption or expectation could be fulfilled only by a transfer of the property of the person who stays silent, or by a diminution of his rights or an increase in his obligations. A person who knows or intends that the other should conduct his affairs on such an assumption or expectation has two options: to warn the other that he denies the correctness of the assumption or expectation when he knows that the other may suffer detriment by so conducting his affairs should the assumption or expectation go unfulfilled, or to act so as to avoid any detriment which the other may suffer in reliance on the assumption or expectation. It is unconscionable to refrain from making the denial and then to leave the other to bear whatever detriment is occasioned by non-fulfilment of the assumption or expectation.[134]

227 In the current case, I accept that it is more likely that not that Mr Rowson genuinely held the belief that, subject to Mr Nelson obtaining an extended practising certificate, the purchase of the Hardy's business would proceed. And, with some hesitation, I accept that belief was reasonable, even though I am not satisfied that Mr Alpass said the words 'I accept your offer' at the disputed meeting, or on any other occasion. However, it is apparent from the undisputed evidence that a commercially attractive offer had been made, transition arrangements had been discussed in some detail (including for the costing of client files on the settlement date), and the only apparent barrier to the sale proceeding was that Mr Nelson did not yet hold an extended practising certificate.

228 The question remains as to whether, in the words of Brennan J in Waltons Stores,[135] Mr Alpass warned Mr Rowson that he and Mr Nelson were not necessarily going to be the purchasers of the Hardy's business, and that he reserved the right to sell the Hardy's business to any appropriately qualified purchaser at any time. Mr Alpass submitted that he disabused Mr Rowson of any mistaken assumption he may have had on 29 July 2016, when Mr Alpass told Mr Rowson that he was not going to waste time drawing up contracts if he and Mr Nelson could not make a commitment to purchase the Hardy's business, and on 29 August 2016, when Mr Alpass told Mr Rowson that he would sell the Hardy's business to anyone.

229 That evidence is certainly relevant to the question of whether a binding agreement had been reached on 21 July 2016, as it is post-contractual conduct inconsistent with the formation of a binding agreement. But, for the purposes of Mr Rowson's claim in estoppel, that evidence is consistent with Mr Rowson holding a belief that, provided that Mr Nelson could obtain an extended practising certificate, they would be able to purchase the Hardy's business, because the statements made by Mr Alpass on both occasions were made in the context of discussions between Mr Rowson and Mr Alpass about the status of Mr Nelson's practising certificate, or the delays encountered by Mr Nelson in obtaining an extended practising certificate. Mr Alpass' own evidence was to the effect that he did not want to lose Mr Rowson and Mr Nelson as prospective purchasers until the sale to Ms Knight and/or Ms Lewis was concluded, notwithstanding the advice he had received from Mr Cooper that he should not sell the Hardy's business to Mr Nelson.

230 However, even upon the view of the evidence most generous to Mr Rowson (and subject to the discussion later in these reasons regarding the detrimental reliance issue), there would have to be a time after which any conduct by Mr Alpass inconsistent with Mr Rowson's mistaken assumption (such as selling the Hardy's business to someone else) would not amount to unconscionable conduct. In my view, that time was on or about 17 August 2016, some two weeks after Mr Rowson left a message for Mr Alpass that he expected to receive Mr Nelson's extended practising certificate within about two weeks. That date came and went without Mr Alpass receiving any further communication from Mr Rowson, and on 19 August 2016, Mr Alpass sent the draft contract of sale to Ms Knight.

231 However, even if Mr Alpass engaged in conduct which induced Mr Rowson to believe that he and Mr Nelson would acquire the Hardy's business (which I accept he had), Mr Rowson's claim based upon promissory estoppel fails, because Mr Rowson has not established that he suffered any detriment (material or otherwise) as a consequence of any mistaken belief he held.

232 Mr Rowson relied upon certain conduct on his part which was said to amount to relevant detriment: organising the withdrawal of funds from the trust, relinquishing leased premises and searching for new premises, taking steps to obtain an extended practising certificate for Mr Nelson, and incorporating HNR. However, the evidence falls short of establishing that Mr Rowson suffered any material detriment as a consequence of taking these steps, save for wasting some time and any fee paid for the incorporation of HNR. The funds intended for the purchase of the Hardy's business remained in the trust. While Mr Rowson gave evidence that he had located new office premises, there was no evidence that he had signed a lease or spent any money associated with any new premises. Mr Rowson gave evidence that he and Mr Nelson had discussed obtaining an extended practising certificate prior to first meeting Mr Alpass and had taken steps to make the necessary application, which was why they were happy to vary the agreement during Mr Rowson's discussion with Mr Alpass on 25 July 2016, so they did not change their position in that regard in reliance upon any assumption that they would be purchasing the Hardy's business.

233 It is clear from the authorities that Mr Alpass' failure to fulfil any mistaken assumption engendered in Mr Rowson by his words or conduct cannot amount to relevant detriment. In this regard, Australian jurisprudence has diverged from the position in England and Wales, where in cases of equitable estoppel detriment need not be proved as a separate element of the cause of action.[136]

234 In Waltons Stores,[137] Brennan J referred to the divergence between the law in Australia and the position in England and Wales, stating as follows:

If the object of the principle of equitable estoppel in its application to promises were regarded as their enforcement rather than the prevention of detriment flowing from reliance on promises, the courts would be constrained to limit the application of the principles of equitable estoppel in order to avoid the investing of a non­contractual promise with the legal effect of a contractual promise. In Ajayi v. R. T. Briscoe (Nigeria) Ltd. (36), the Privy Council sought to qualify the enforceability of a non-contractual promise in this way:

The principle, which has been described as quasi estoppel and perhaps more aptly as promissory estoppel, is that when one party to a contract in the absence of fresh consideration agrees not to enforce his rights an equity will be raised in favour of the other party. This equity is, however, subject to the qualifications (1) that the other party has altered his position, (2) that the promisor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, (3) the promise only becomes final and irrevocable if the promisee cannot resume his position.

The qualifications proposed bring the principle closer to a principle the object of which is to avoid detriment occasioned by non-fulfilment of the promise. But the better solution of the problem is reached by identifying the unconscionable conduct which gives rise to the equity as the leaving of another to suffer detriment occasioned by the conduct of the party against whom the equity is raised. Then the object of the principle can be seen to be the avoidance of that detriment and the satisfaction of the equity calls for the enforcement of a promise only as a means of avoiding the detriment and only to the extent necessary to achieve that object. So regarded, equitable estoppel does not elevate non-contractual promises to the level of contractual promises and the doctrine of consideration is not blown away by a side-wind. Equitable estoppel complements the tortious remedies of damages for negligent mis­statement or fraud and enhances the remedies available to a party who acts or abstains from acting in reliance on what another induces him to believe.[138]

235 That detriment occasioned by a party's reliance upon a non-contractual promise should not be conflated with the benefit the promisee expects to derive from the performance of the promise was confirmed by the decisions of the High Court in Sidhu v Van Dyke ('Sidhu'),[139] Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd,[140] and Pipikos v Trayans.[141] In Sidhu,[142] the Court affirmed the principle that the fundamental purpose of all forms of equitable estoppel under Australian law is to protect 'against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted.'[143]

236 In Pipikos v Trayans,[144] the majority of the High Court said that:

[E]quitable intervention by way of equitable estoppel to prevent a defendant resiling from a promise that is not enforceable at law is justified, not by the existence of an unperformed or partially performed promise, but by a concern that the plaintiff should not be left to suffer a detriment by the defendant's so resiling.[145]

237 Accordingly, Mr Alpass's failure to make good Mr Rowson's expectation that Mr Alpass would tell the Hardy's business to him and/or Mr Nelson cannot amount to relevant detriment, as that would merely facilitate the enforcement of an otherwise unenforceable promise. In the absence of any evidence of any material detriment suffered by Mr Rowson, it was not unconscionable for Mr Alpass to resile from giving effect to any mistaken assumption on the part of Mr Rowson and Mr Nelson induced by his failure to disabuse them of their mistaken assumption.

238 Finally, for completeness, I agree with Mr Alpass' submissions to the effect that neither the pleadings or the facts of this case give rise to any cause of action based upon estoppel by convention. An estoppel by convention only arises where both parties have acted upon a mutually held assumption as to a matter of fact or a matter of legal effect. No such element of mutuality exists on the facts of the current case.

Is Mr Alpass immune from any liability by reason of s 366 of the Uniform Law?

He says further that pursuant to section 366 of Uniform Law, he is immune from liability in respect of any act or omission by done by him in good faith and in the exercise or purported exercise of his functions under Chapter 6 of that legislation including the sale of the assets of Hardys.

He says further that, if any liability were to otherwise extend to the plaintiffs in relation to the allegations made in the statement of claim (which he expressly denies) he is immune from liability pursuant to section 366 of the Uniform Law in circumstances where:

(a) pursuant to his appointment as receiver of Hardys (as referred to in paragraph 4(b) above), he was an external intervener and a protected person as defined in sections 6, 366 and 341 of the Uniform Law:

(b) in selling and managing the sale of the assets of Hardys, he was exercising his functions and powers as an external intervener pursuant to sections 343(1)(b) and 347(2) (as external intervener), and, or alternatively, as a manager pursuant to sections 343(3), 336(1)(f), 336(1)(g) and 347(2) of the Uniform Law; and

(c) in selling and managing the sale of Hardys, including in his dealings with the plaintiffs, he was at all times acting in good faith.

240 As mentioned earlier in these reasons, on 7 July 2017, Derham AsJ dismissed an application by Mr Alpass to strike out the original statement of claim relying upon the immunity provision.[146] In the strike-out reasons, his Honour held that, while it was not necessary for him to finally determine whether or not the alleged breach of the agreement by Mr Alpass fell within the scope of the immunity provision, his view was that the claim as pleaded in the statement of claim, which did not include an allegation that Mr Alpass acted other than in good faith, was not manifestly untenable.

241 His Honour summarised the relevant statutory scheme as follows:

Section 366 of the Uniform Law provides:

366 Protection from liability

(1) No liability attaches to a protected person in respect of any act or omission by an external intervener done in good faith and in the exercise or purported exercise of the intervener's functions under this Chapter.

(2) Without limitation, no liability (including liability in defamation) is incurred by a protected person in respect of anything done or omitted to be done in good faith for the purpose of disclosing information as permitted by this Law or the Uniform Rules.

(3) A protected person is the designated local regulatory authority, an external intervener or a person acting at the direction of the designated local regulator.

An external intervener is defined as 'a supervisor, manager or receiver under Chapter 6'. A receiver is appointed on the application of the Victorian Legal Services Board as the 'designated local regulatory authority' by the Supreme Court as the 'designated tribunal'. A 'function' includes 'a power, authority or duty, and without limitation includes jurisdiction in relation to a court'. The functions to which s 366 may apply are those under Chapter 6.[147]

242 Derham AsJ noted the absence of any authority on the question, but formed the view that: '...the specific functions [Mr Alpass] seeks to rely on in this case are both subject to a requirement that they be exercised lawfully.'[148]

243 The specific functions relied upon by Mr Alpass were:

(a) his carrying on of the legal practice of the Hardy's business, as authorised by the order made by Cavanough J on 15 February 2016; and

(b) his winding up and terminating the affairs of the legal practice, including the sale of the Hardy's business, pursuant to ss 343(1)(b) and 336(1)(g) of the Uniform Law.

244 After reviewing a number of the authorities relevant to the statutory immunities conferred upon regulators and other statutory agencies,[149] his Honour said as follows:

From these authorities, the following propositions can be stated:

(a) the application and scope of an 'immunity' clause will always be dependent upon its precise terms and statutory context;

(b) an immunity or limitation provision should be strictly construed, or [not] given an interpretation that goes further than a 'jealous interpretation would allow', because it derogates from the ordinary rights of individuals. The principles of statutory construction may require general words giving immunity for any action against the defendant to be read down so that they do not apply to functions of an ordinary character done pursuant to agreements with the consent of private citizens;

(c) a Court is required to look to the precise conduct or omission sought to be impugned and said to have caused the injury or damage complained of, rather than the general statutory function or power, pursuant to which the authority carries on its relevant undertaking; and

(d) such immunities may not apply to conduct which is already lawful absent the conferral of an authorisation or function by the statute in question.[150]

245 His Honour then went on to make the following points:

(a) the acts and omissions of Mr Alpass in selling the assets of the Hardy's business are prima facie within the scope of the immunity provision;

(b) section 336(1)(f) not only authorised Mr Alpass to enter into an agreement, but also to perform the agreement. He said:

...the power to carry the agreement into effect...must be carried through lawfully and of necessity in accordance with the ordinary legal principles applicable to such agreements;[151]

(c) there is 'at least a respectable argument' that the breach or repudiation of the agreement to sell assets of the Hardy's business is not a lawful exercise of the receiver's power and therefore not within scope of the immunity provision; and

(d) His Honour stated as follows:

However, if I wrong in my interpretation of the functions relied upon by the defendant, and they are not subject to the requirement that they be exercised lawfully in order to fall within the immunity provision, there remains a real prospect that s 366 of the Uniform Law may not apply to the conduct (breach and repudiation of the agreement) alleged against the defendant. That is because, to bend an analogy, the performance or non-performance of the function (power) to sell the Firm's Assets by the alleged agreement is governed by the ordinary laws relating to contracts and their enforcement, just as in Ardouin the driving of a fire brigade vehicle on public road was governed by the road rules and the law of negligence. Once the defendant, as the appointed receiver, is authorised to enter into, execute and perform an agreement to sell the Firm's Assets, the performance of that agreement must be in accordance with the law of contract. Put another way, and adapting the words of Dixon CJ in Ardouin, when s 366 speaks of any act or omission done in good faith and in the exercise or purported exercise of the receiver's powers, it appears to be referring primarily to the exercise of powers which of their nature involve interferences with persons or property.

The power to sell the Firm's Assets has that effect (involving interference with persons or property) in relation to the Firm's proprietors, and perhaps to a limited degree its clients, but once the power to sell is exercised, the power to complete the process, to perform the alleged agreement, is not of that character at all. Only the wrongful performance of the alleged agreement has the potential to interfere with persons or property, but even then, not in the sense relevant to the interpretation of the immunity provision. That is because the performance of the agreement involves no invasion of the buyer's rights pursuant to statutory authority. The manner of performance of the alleged agreement (in accordance with the law of contract) is incidental to the exercise of the power to enter into, execute and perform the agreement to sell, in the sense in which Kitto J used the term 'incidental' in Ardouin, and is therefore likely to be outside the immunity created by the section.[152]

246 Accordingly, his Honour held that it was not necessary for the plaintiffs to have pleaded that Mr Alpass, if found to have breached and/or repudiated the agreement, acted otherwise than in good faith.

247 At trial, Mr Rowson submitted that the findings of Derham AsJ in the strike-out reasons have not been disturbed on appeal or challenged in any subsequent decision and ought to be followed.

248 Mr Alpass submitted that I should not follow the statement of Derham AsJ to the effect that:

There is at least a respectable argument that the wrongful breach and repudiation of the alleged agreement is not a lawful exercise of the power to perform an agreement to sell the Firm's Assets and therefore not within the immunity as an 'exercise or purported exercise of the intervener's functions'.[153]

249 Mr Alpass submitted as follows in relation to the statement above:

First, it was not a definitive statement as to the application of section 366 and was an analysis of a potential application of the provision in the context of a strike out application. Second, that reasoning ought not be applied:

(a) the interpretation that the provision only applies where there is a 'lawful' exercise or purported exercise of the power would deprive the provision any application in respect of a civil wrong (in response to which it is designed to operate); and

(b) it should be considered that a receiver's consideration as to whether they want to sell, or have or have not contracted to sell, and whether they should continue negotiations with a person who wishes to purchase are the exercise of the receiver's power.

250 In the strike-out reasons, Derham AsJ found that it was at least arguable that the immunity provision did not apply to Mr Alpass' conduct because:

(a) the power to enter into an agreement for the sale and assets of the Hardy's business necessarily involves the performance of the agreement, which must be carried through lawfully, that is, in accordance with the ordinary legal principles applicable to such agreements ('first contention');[154] and/or

(b) the performance or non-performance of the power to sell the assets of the Hardy's business is governed by the ordinary laws relating to the contracts and their enforcement, because the manner of performance of the agreement is 'incidental to the exercise of the power to enter into, execute and perform the agreement'[155] ('second contention').

251 I tend to agree with Mr Alpass' submission that, if the first contention is correct, the immunity provision would have little work to do, as it would be deprived of any practical application to any civil wrong. While I am not convinced that Derham AsJ's analysis of the first contention is wrong, the following discussion focuses on the second contention and its application to the conduct which is the subject of Mr Rowson's claim in this proceeding.

252 After reviewing the authorities referred to by Derham AsJ in the strike-out reasons,[156] along with the decision of the High Court in Hudson v Venderheld,[157] I consider that as the particular conduct sought to be impugned in this proceeding (being the breach or repudiation of an agreement) did not involve any interference with persons or property which, save for his appointment as receiver with the powers conferred by the Uniform Law, Mr Alpass would not have been authorised to do, and as such, the conduct complained of was merely incidental to the power conferred upon Mr Alpass to wind up the affairs of the Hardy's legal practice.

253 In Board of Fire Commissioners (NSW) v Ardouin[158] ('Ardouin'), the High Court held that an immunity conferred by the Fire Brigades Act 1909 - 1956 (NSW) did not render the appellant immune from liability for damages caused by the negligent driving of a firetruck. Dixon CJ stated as follows:

Section 46, however, was relied upon as meaning that, provided there was good faith, no liability could be imposed on the Board or an officer of the Board by the mere fact that the duty of due care was not exercised and the plaintiff on his motor cycle sustained injury in consequence ... When s. 46 speaks of the bona fide exercise of the Board's powers it appears to me to be referring primarily to the exercise of powers which of their nature will involve interferences with persons or property . ... But it may be said generally that once a power is found which depends upon the statute and involves detriment or disadvantage to others, either necessarily or in consequence of its improper or faulty exercise, it appears to me that s. 46 is capable of applying: it is not, however, expressed in terms which make it applicable to the doing of things in the course of performing the functions of the Board, which are of an ordinary character involving no invasion of private rights and requiring no special authority ...[159]

254 In his reasons, Kitto J observed that as the relevant immunity provision operated to derogate from the rights of individuals, it should not 'be carried any further than a jealous interpretation will allow'.[160]

... the question in the present case is whether damage caused by the driving of one of the Board's motor vehicles on a public street on the way to a fire is damage caused by an act which, in the absence of negligence, would have been within, as distinguished from being incidental to, the exercise of some power conferred by a provision other than s. 46. The answer offered ... is that ss. 19 and 28 create duties, and therefore powers, and the Board is exercising these powers whenever one of its vehicles is being driven in an endeavour 'by all practicable means' (s. 19) and 'with all speed' (s. 28) to get to a fire for the purpose which the sections mention. There is no difficulty in finding in the creation of a duty an implied grant of power... But the implication, arising as it does from necessity, must be limited by; the extent of the need. There can be no implication of a grant of power to do, in the performance of the duty, what is in any case lawful. To drive a vehicle on a public street, for the purpose of dealing with a fire or for any other purpose, needs no grant of power. For that reason, neither s 19 nor s 28 can be said to confer a power to drive on a public street; and accordingly damage caused by an officer of the Board in driving on a public street is not damage caused in the exercise of a power conferred by either of those sections. It is caused in the exercise of the right of way which anyone may exercise in virtue of the public character of the highway.[161]

256 The reasoning in Ardouin[162] has been followed and applied as follows:

(a) in Australian National Airlines Commission v Newman,[163] the High Court held that the two year limitation period imposed by the Australian National Airlines Act 1945 (Cth) did not apply to a claim brought by an employee who slipped on a greasy flight services kitchen floor, because the conduct complained of was not the carrying out of a flight services kitchen (which was authorised by the Act) but 'the failure to provide a safe means of access to a place of work, the failure to maintain the floor in good order and condition and the failure to properly maintain it';[164]

(b) in Hudson v Venderheld,[165] the High Court rejected an argument that an immunity provision in the Local Government Act 1919 (NSW) said to apply to 'anything done under this Act' rendered a local government authority immune from a claim for damages arising from the negligent driving of a council truck by a council employee. The majority stated as follows:

In driving along a public highway the defendant was doing something which the law - apart altogether from the Local Government Act - gave him a right to do. It is true that he was acting on the instructions of an officer of the council and in the course of his employment, but that does not mean that what he was doing was being 'done under the Local Government Act;[166]

(c) in Suatu Holdings Pty Ltd v Australian Postal Corporation[167] ('Suatu'), Gummow J held that a provision in the Postal Services Act 1975 (Cth) which rendered the Australian Postal Corporation ('APC') immune from suit with respect to delays and defaults in the delivery of postal items and money did not prevent the APC from being sued for breach of contract. His Honour stated as follows:

The issue presented thus was not one of the fettering of a discretion reposed by statute in the respondent which affected the performance of contracts. It was whether s 104(1) imposed an absolute bar upon the making of contracts, proceedings for breach of which would fall within the terms of s 104(1) on their proper construction, or at any rate upon the bringing of such proceedings. My view, as I have indicated, is that the Parliament has not given wide contractual powers to the Commission on the one hand, and imposed with the other a bar of this nature which would so diminish not only the scope for the Commission to present itself to outsiders as an institution with which they might safely enter into contractual relations, but also the value of the rights of those persons if they did enter into certain categories of contract with the Commission.;[168] and

(d) in Puntoriero v Water Administration Ministerial Corporation,[169] ('Puntoriero') the High Court held that a provision of the Water Administration Act 1986 (NSW) rendering a water supply authority immune from suit in the exercise of its powers to, among other things, use works to impound or control water, or to release water from any such works, did not preclude a customer bringing an action in negligence with respect to the supply of contaminated water. Gleeson CJ and Gummow J stated as follows:

A power to join in forming a company, partnership, trust or joint venture necessarily carries with it the authority, for example, to perform the terms of the joint venture, partnership or trust. Section 7(2)(d) of the Administration Act, to which reference has been made earlier in these reasons, confirms this concomitant. Likewise, the power in s 11(4)(b) to enter into contracts involves purported observance and performance of such engagements .... Conduct which, it transpires, amounts to breach of contract, partnership or trust may inflict loss or damage on others which, in the literal sense of s 19(1), is suffered as a consequence of the exercise of a function of the Corporation. Such conduct would not be stigmatised as ultra vires the Corporation. However, to confer an immunity in respect of such loss or damage, which would not have been suffered if the engagement had been performed in accordance with its terms, would be to stultify the objects of the Act. To read s 19(1) in that fashion would create a significant deterrent to the entry by others into commercial relations with the Corporation.[170]

257 Their Honours also said, by reference to the fact that the claimants were compelled to take water from the water supply authority, as follows:

These considerations support a jealous construction of s 19(1) to limit what otherwise would be the rights of plaintiffs and to immunise the Corporation from action only in respect of those positive acts in the exercise of functions 'which of their nature will involve interference with persons or property'. The supply of water by the Corporation to the appellants was not the exercise of a function 'which of its nature involved such an interference.[171]

258 Having regard to the application of the principles in Ardouin[172] shown above, the question in the current case is whether Mr Alpass' conduct in breaching or repudiating the agreement involved the direct exercise of his powers and functions under the Uniform Law which involved interference with persons or property which would only be lawful if authorised by the Uniform Law, or whether that conduct was merely incidental to the exercise of his functions and powers under the Uniform Law.

259 To illustrate the distinction between the circumstances where the immunity provision may or may not apply based upon the principles in Ardouin[173] and the subsequent authorities referred to in paragraph 256 of these reasons, it was a function of Mr Alpass as receiver to call in and sell the assets of the Hardy's business, which was an interference with the proprietary rights of the owners of the Hardy's business. Accordingly, Mr Alpass would, for example, be immune from any claim by the owners of the Hardy's business that he had sold the assets of the business at an undervalue, provided that he had acted in good faith. In selling the assets of a business belonging to another, he is doing something that he would not otherwise be permitted to do. That conduct, at least vis a vis the owners of the Hardy's business, is not merely incidental to the exercise of his functions under the Uniform Law.

260 The position is to be contrasted with the position of Mr Alpass vis a vis the clients of the Hardy's business. Mr Alpass was authorised to carry on the legal practice of the Hardy's business pending the sale of the Hardy's business. However, it would be remarkable if the scope of the immunity provision is to be construed so broadly such that Mr Alpass, in carrying out legal work for the clients of the Hardy's business, would be immune from suit brought by a client in respect of allegations that he had performed that legal work negligently. As observed by Derham AsJ in the strike-out reasons,[174] it is the impugned conduct which is the focus of the inquiry, not the general statutory function or power purported to be exercised.

261 The conduct said to have been engaged in by Mr Alpass in this proceeding, that is, breaching or repudiating an agreement for the sale and purchase of the Hardy's business, seems to me to fall somewhere between the two extremes outlined above. But, on balance, I consider that Mr Alpass' conduct falls outside the scope of the immunity provision, in that it was merely incidental to the exercise of his power to call in and sell the assets of the Hardy's business. In entering into an agreement for the sale and purchase of the Hardy's business, Mr Alpass engaged in conduct which was incidental to his function of winding up the affairs of the Hardy's legal practice, which was a power conferred upon him by the Uniform Law. Breaching or repudiating any such agreement was a further step removed from the exercise of the function or power protected by the immunity provision.

262 I am fortified in my view regarding the (non) application of the immunity provision to the conduct sought to be impugned by Mr Rowson in this proceeding by noting that I have little doubt that, had events developed in a different way, Mr Rowson would not have been impeded by the immunity provision from seeking injunctive relief to restrain the sale of the Hardy's business to Ms Knight by the immunity provision. Further, the comments by Gummow J in Suatu[175] and Puntoriero[176] (where his Honour was joined by Gleeson CJ) to the effect that the 'jealous construction' of statutory immunity provisions operates to avoid creating a deterrent to the entry of commercial relations with the relevant authorities by diminishing the rights of parties that did so, also provide support for the conclusion that I have reached about the application of the immunity provision to the claims in this proceeding.

263 Accordingly, the immunity provision does not apply to any breach or repudiation of the agreement by Mr Alpass.

264 I have found that no agreement was reached between Mr Rowson and Mr Alpass for the sale and purchase of the Hardy's business, and that any conduct on the part of Mr Alpass which may have induced Mr Rowson to believe there was such an agreement did not cause Mr Rowson to incur any material detriment. However, in the event that I am found to be wrong in relation to any or all of these findings, and given the time and attention given to these issues at trial, I shall consider what, if any, loss and damage accrued to Mr Rowson by reason of any breach or repudiation by Mr Alpass. I shall consider the question of any equitable compensation payable to Mr Rowson should Mr Alpass have been found to have been estopped from denying the existence of an agreement as a separate question, as different issues arise.

265 Given the way in which Mr Rowson puts the loss and damage claim, being that he lost the opportunity to generate revenue from the assets of the Hardy's business, there is a significant overlap between the issues and the evidence regarding both causation of loss and quantification of loss, save for the question of whether Mr Rowson is the proper plaintiff to bring a claim against Mr Alpass in this proceeding ('standing issue'). The standing issue is really only a question relevant to causation.

266 Prior to turning to the parties' evidence and submissions regarding causation and the loss and damage claim, the following summary of the relevant principles in Mr Alpass' closing submissions are not in dispute (omitting footnotes):

Mr Rowson bears the onus of establishing that any breach of the alleged agreement has caused loss. The question of whether loss was caused by breach, or repudiation, is a question of common sense.

The recovery of damages for the loss of an opportunity and the principles which inform the assessment of the value of the lost opportunity have been essayed on numerous occasions by the Courts. A claimant must first prove on the balance of probabilities that the defendant's conduct has caused the loss of a commercial opportunity of some value which is 'not in the realms of the merely theoretical or negligible'. Once this is established the Court then assesses the value or extent of the loss. The task of assessment of the value or extent of the loss is measured by reference to the degree of its probability.

267 Further, in Keys Consulting Pty Ltd v Cat Enterprises Pty Ltd[177] ('Keys Consulting'), the Court of Appeal stated as follows (omitting footnotes):

In claims for damages, the plaintiff must prove both the fact of loss and the amount of that loss before he or she can recover substantial damages. If a plaintiff fails to prove either of those elements, he or she may recover nominal damages only where the claim is in contract, or the action fails altogether, where it lies in tort.

However, it is well established that a mere difficulty in quantifying damages does not necessarily defeat the plaintiff's entitlement to a remedy against the wrongdoer. In appropriate circumstances, where some sort of actual loss has been established, the court must estimate the damages as best it can. Addressing a claim for damages for breach of contract, Street CJ in Howe v Teefy said:

The question in every case is: has there been any assessable loss resulting from the breach of contract complained of? There may be cases where it would be impossible to say that any assessable loss had resulted from a breach of contract, but, short of that, if a plaintiff has been deprived of something which has a monetary value, a jury is not relieved from the duty of assessing the loss merely because the calculation is a difficult one or because the circumstances do not admit of the damages being assessed with certainty.[178]

while difficulty in quantifying damages may permit a court to estimate them as best it can, that principle will not avail a plaintiff who has simply failed to produce evidence which it could have produced, and failure to do so in that situation will ordinarily mean that it has failed to prove its case on damages;[179]

269 The following issues arise with respect to causation and the loss and damage claim:

(a) the standing issue;

(b) whether Mr Rowson and Mr Nelson could have completed the purchase of the Hardy's business;

(c) whether Mr Rowson (or HNR) would have been able to take advantage of the opportunity to earn income from the deeds;

(d) the reliability or otherwise of the opinion of Mr Senia regarding the likely income potential of the deeds, including the validity of his methodology, the extent to which his assumptions and opinions are supported by evidence, and the reliability of his calculations; and

(e) the discount which should be applied to any value assigned to the loss of opportunity to reflect the possibility that the full value of the lost opportunity would not be realised.

270 Each of the lay witnesses gave evidence relevant to the questions of causation and loss and damage.

271 Gavin Rowson gave uncontested evidence that as at 9 August 2016, the trust held funds of $41,461. I can infer from his evidence that he would have made those funds available to Mr Rowson to complete the purchase of the Hardy's business. It seems that $160,000 to $200,000 was ultimately available to Mr Rowson through the trust, but not necessarily during the relevant period. This does cast some doubt on Mr Rowson's evidence that he was prepared to pay up to $250,000 for the Hardy's business, such that $25,000 was a good price.[180] However, not much turns upon that issue, save perhaps for the impact upon the credibility of Mr Rowson's evidence generally.

272 Mr Rowson gave evidence that he has been self-employed since the age of 17. He has operated businesses in the cleaning, seafood trading, hospitality, import-export and information technology sectors. Since the 1980s, he has undertaken the development of software for the legal industry. He built the practice management software for his father's legal practices, including Hardy's when his father was managing partner. He has also been employed by his father as a paralegal from time to time.[181] He is familiar with probate work.

273 In his witness statement, Mr Rowson went into considerably more detail regarding his commercial experience and his information technology skills, including his experience in developing software for legal practices.[182] In his witness statement, Mr Rowson said that he has provided specialised software development and information technology support for the following sectors:

(a) the legal industry, particularly for small legal practices, to enable legal practitioners to run a practice 'during a limited number of hours but still to maintain all the professional and administrative tasks required by a legal practice';

(b) school based out of school hours programs;

(c) telecommunications;

(d) logistics;

(e) finance;

(f) road safety; and

(g) medical research.

274 Mr Rowson gave evidence that in the months leading up to his first contact with Mr Alpass, he had discussions with Mr Nelson about purchasing a legal practice. Mr Nelson's own practice had dwindled over the years as his client base had aged, he had not engaged in any marketing, and he could no longer afford to employ someone to assist him.[183]

275 Mr Rowson's evidence was that his knowledge of Mr Nelson's disciplinary history at the relevant time was relatively limited. He said that he only came reacquainted with Mr Nelson in 2013. During the course of having lunch with his father and Mr Nelson (which must have been sometime between 2013 and 2015) Mr Nelson told him that his practising certificate had been cancelled. He did not find out until some time later that Mr Nelson's practising certificate had been cancelled because he had directed his clients to deposit funds into his TAB account.[184] Mr Rowson did not specify when he became aware of this: that is, whether it was before or during the time of his dealings with Mr Alpass, after that period but before Mr Nelson's death in 2017, or after Mr Alpass made reference to this issue in his defence in May 2018.[185] Mr Nelson did not tell him about any of the other disciplinary issues put to Mr Rowson in cross-examination.

276 Mr Rowson planned to use the funds in the trust to purchase a legal practice. The plan was to purchase a practice which could employ a solicitor specialising in the wills and probate jurisdiction, and could generate a reasonable income for him and Mr Nelson. Mr Rowson thought he could assist the new legal practice, given his information technology and practice management skills. Prior to seeing the LIJ ad, he and Mr Nelson had investigated purchasing a number of legal practices, but they were all too expensive.[186]

277 The main focus of his interest in the Hardy's business was the deeds. When he inspected the deeds at the storage facility on 21 July 2016, he saw that 80 per cent of the deeds he sampled were wills, which was promising, because they were 'mature',[187] and had the potential to generate probate work.

278 Mr Rowson gave evidence that he told Mr Alpass that he and Mr Nelson had discussed establishing a corporate entity to purchase a legal practice. Indeed, on 31 August 2016, Mr Rowson incorporated HNR. Mr Rowson and Mr Nelson were both directors of HNR, and its principal place of business was a unit in an office building at 1 Queens Road, Melbourne.[188] All of the shares in HNR were held by Noswor No 2 Pty Ltd, a company which Mr Rowson was the sole director and shareholder, and was said by Mr Rowson to be the trustee of his family trust.[189] Mr Rowson pleaded that his intention was that Mr Nelson would hold a one-third share of the new legal practice, but he did not give evidence to that effect.

279 Mr Rowson gave evidence that prior to his telephone conversation on 25 July 2016 with Mr Alpass regarding the status of Mr Nelson's practising certificate, he and Mr Nelson had discussed Mr Nelson obtaining an extended practising certificate. At the time, he had obtained the relevant documentation from the LIV, but Mr Nelson had not yet done the examination.[190] The completed examination was included in the 'paperwork' submitted to the LIV referred to in his telephone message of 28 July 2016.[191] At the time, he expected that it would take about two weeks for the application for an extended practising certificate to be processed, but there were unexplained delays at the LIV's end, as recorded in Mr Alpass' file notes.

280 Mr Rowson was not asked, and did not volunteer, whether Mr Nelson obtained an extended practising certificate before his death.

281 Mr Rowson gave evidence that during August 2016, he and Mr Nelson were looking for office premises to lease, but did not find anything until quite late in the piece, being office premises of 400 square metres in Bowen Crescent, in the St Kilda Road office precinct.[192] He was not asked, and did not volunteer whether he and/or Mr Nelson and/or HNR ever executed a lease for these premises.

282 Mr Rowson gave evidence about the instructions he provided to Mr Senia regarding his plans had the purchase of the Hardy's business proceeded. He said that he and Mr Nelson would have opened the office in Bowen Crescent, and possibly a satellite office in Dandenong. They would have written to all of the clients who had deeds. They would have employed a wills and probate specialist, who Mr Nelson would supervise, and Mr Rowson would be responsible for developing practice management software and business processes.[193]

283 Mr Rowson gave evidence that prior to Mr Nelson's somewhat unexpected death in August 2017, Mr Nelson was quite fit for his age. Mr Rowson said that at the time he was in discussions with Mr Alpass regarding the Hardy's business, he had not discussed a succession plan with Mr Nelson, but they would have had those discussions had they purchased the Hardy's business.[194]

284 Mr Rowson gave evidence that the charge out rate of $450 per hour he provided to Mr Senia was based upon a discussion he had with the personal assistant of the solicitor who took over the family law practice of Hardy's once it went into external administration, when he called her to inform her of his plans to serve a subpoena on the practice.[195]

285 Mr Alpass also gave evidence relevant to causation and the loss and damage claim. He gave evidence that he did not believe that there was a great deal of value in a suburban legal practice. Mr Alpass gave evidence that he included a reference to the deeds in the LIJ ad, because the deeds may have been attractive to potential purchasers.[196] He accepted that there may well have been around 6,000 deeds in the storage facility.[197]

286 Mr Alpass confirmed his evidence that the purchaser of the Hardy's business would need to hold an extended practising certificate, given that at the time he was the receiver, there were funds held in trust. He gave evidence that it would be impractical for the Hardy's business to divest itself of trust funds simply by returning the funds to the clients, as sometimes funds would be held on trust for specific purposes or be subject to particular undertakings. For example, the proceeds of sale of a property could be held on trust pending the resolution of a dispute about who was entitled to those funds, and funds held on such terms could not be returned to clients.[198] However, he accepted that he made no reference to this requirement in the LIJ ad or in his initial discussions with Mr Rowson and Mr Nelson.[199]

287 Mr Alpass agreed that he had no specific knowledge about Mr Nelson's disciplinary history prior to speaking with Mr Cooper on 25 July 2016, save that he understood that Mr Nelson had a 'reputation'.[200] He gave evidence that having observed Mr Nelson at the meeting at his office on 21 July 2016, he had formed the view that Mr Nelson was 'almost beyond practice'.[201]

288 In his submissions, Mr Rowson referred to the summary of the relevant principles concerning causation and the assessment of loss of opportunity damages by Chen J of the New South Wales Supreme Court in Boyded Industries Pty Ltd v Bluth,[202] ('Boyded') which in turn referred to the following statement of the High Court in Sellars v Adelaide Petroleum NL[203] ('Sellars'):

On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.[204]

289 Mr Rowson also relied upon Boyded[205] in support of the following propositions:

(a) the fact that quantum of damages is difficult to address does not mean that the plaintiff is entitled to only a nominal sum, as the Court must do the best it can to estimate damages; and

(b) the task of calculating damages based upon the evaluation of the likelihood of occurrence of hypothetical events does not lend itself to precise calculation, but is rather 'a matter of informed estimation'.[206]

The evidence establishes that Mr Rowson and Mr Nelson had the means to pay for the Assets and to operate a legal practice that serviced former Hardys clients. Mr Rowson gave evidence of the steps he and Mr Nelson had taken, and the further steps they would have taken, had they taken possession of the Assets and commenced servicing the clients. They would have, and did in fact, incorporate a company for the purposes of legal practice and sought new leased premises to conduct the legal practice. They would have employed a wills and probate specialist to undertake the work (and there is no reason why, in the hypothetical counterfactual, such a solicitor could not have held the Trust Authority, if Mr Nelson's were further delayed ...

In other words, Mr Rowson has established that he and Mr Nelson lost a valuable opportunity by reason of Mr Alpass selling the Assets to another person, and there has been no admissible evidence led to demonstrate that, as a matter of causation, that opportunity is not likely to have come to fruition.

291 Mr Rowson submitted that there was unchallenged and unrebutted evidence of the attempts taken by him to obtain an extended practising certificate for Mr Nelson. The allegation made by Mr Alpass to the effect that Mr Nelson was incompetent is 'offensive, unparticularised, and should be rejected', and Mr Alpass should not be permitted to rely upon Mr Nelson's death and Mr Rowson's incarceration to support his assertion that he and Mr Nelson would not have been able to take advantage of the opportunity they lost by reason of Mr Alpass' conduct. In any event, Mr Senia's evidence was that the income from the deeds should be able to have been realised within a 12 to 18 month period.

292 Mr Rowson submitted that the judgments concerning Mr Nelson's disciplinary issues and their consequences are inadmissible by reason of s 91 of the Evidence Act, and these were matters that Mr Rowson could not give particularly helpful evidence about. Mr Alpass did not call Mr Cooper or any other officer of the LSB to give evidence about the likelihood of Mr Nelson being able to obtain an extended practising certificate.

293 Mr Rowson submitted that I do not have to be satisfied that Mr Nelson would have been able to obtain an extended practising certificate: rather, the risk that he would not have been able to do so is a matter to be taken into account in the quantification of the value of the lost opportunity to purchase the Hardy's business.

294 As for the standing issue, Mr Rowson submitted that Mr Rowson has pleaded, and his evidence has affirmed, that he was a party to the agreement, and suffered loss and damage as a consequence of its breach and repudiation. He said that Mr Alpass' submission regarding the standing issue misunderstands the immediately binding nature of the agreement reached at the disputed meeting on 21 July 2016. It is quite common for parties to agree that the written contract formalising an earlier oral agreement would identify a different contracting party or nominee: that such an option was canvassed in the current case does not preclude Mr Rowson from suing on the agreement.

295 Mr Alpass submitted that, 'as a matter of factual causation... and common sense the alleged repudiation/breach did not cause the loss claimed' by Mr Rowson. In particular:

(a) the evidence does not establish that Mr Rowson and Mr Nelson could have performed their side of the bargain and completed the purchase of the Hardy's business, as there was no probative evidence to establish that Mr Nelson would have ever obtained an extended practising certificate; and

(b) the evidence does not establish that Mr Rowson would have been able to take advantage of any opportunity to earn income from the deeds, as Mr Rowson could not carry out the legal work required, Mr Nelson was an elderly practitioner with a dwindling practice and was not likely to be carrying out substantial legal work prior to his death, and Mr Rowson was incarcerated from March 2018.

296 Mr Alpass also submitted that Mr Rowson is not the proper plaintiff to advance a case that there was a binding oral agreement for the sale and purchase of the Hardy's business, or that Mr Alpass was estopped from denying the existence of such an agreement. Rather, the case advanced by Mr Rowson is that the Hardy's business was to be either sold to Mr Nelson and/or HNR, not Mr Rowson. Accordingly, not only was Mr Rowson not the contracting party, he did not suffer any loss, as any lost opportunity to earn income from the assets of the Hardy's business can only be the opportunity lost by the ultimate purchaser of the Hardy's business.

297 Accordingly, Mr Alpass submitted that Mr Rowson:

...has not established on the balance of probabilities that:

(a) he, through an entity, would have been able to complete the alleged agreement and take a transfer of [the Hardy's business]; and

(b) by Mr Alpass' alleged conduct, he has lost any opportunity that was some value to him - it is an 'opportunity' that was in the realms of the merely 'theoretical'...

298 Mr Alpass submitted that I should not have regard to certain documents in the confidential court book referred to by Mr Rowson in his submissions,[207] on the basis that those documents had not been put to Mr Alpass.

299 Mr Alpass submitted that Mr Rowson had failed to establish, on the balance of probabilities, that Mr Alpass' conduct caused him loss and damage. He referred to the decision of the Court of Appeal in Keys Consulting[208] as supporting the proposition that the Court's engagement in informed guesswork applies only to the second stage of the two step process identified in Sellars:[209] that is, when determining the value of an opportunity which has been found to have been lost, not when determining whether there was any loss of opportunity at all.

300 Turning first to the standing issue, I accept that if I had found that a binding agreement had been reached during the disputed meeting, Mr Rowson would have been entitled to sue on the agreement, as he was a party to the agreement, and it is not necessary for a party suing for an alleged repudiation or breach of contract to establish that they had suffered loss and damage. By way of illustration, if events had progressed differently, Mr Rowson would have had standing to seek specific performance of the agreement.[210] However, it goes without saying that, in order to recover damages for breach of contract, the party claiming damages must establish that they had suffered loss and damage, not some other party.

301 Mr Rowson's unchallenged evidence was that he planned to, and actually did incorporate HNR for the purpose of purchasing and operating the new legal practice. Contrary to what was pleaded in the amended statement of claim, a company associated with Mr Rowson was the sole shareholder of HNR.[211] It is not entirely clear from the evidence whether the shareholding in HNR would have changed had the purchase of the Hardy's business proceeded, although the thrust of Mr Rowson's evidence was that both Mr Nelson and Mr Rowson expected to work in and derive income from HNR.

302 However, while that much can be assumed from the evidence and Mr Rowson's submissions, that is not what has been expressly pleaded in the statement of claim. Also, apart from the lack of clarity and the inconsistent allegations in the statement of claim regarding the proportions in which Mr Rowson and Mr Nelson were to share in the profits generated using the assets of the Hardy's business, it is clear from the evidence that the ultimate purchaser of the Hardy's business would be HNR. While Mr Rowson asserts that he was a party to the alleged agreement, he accepts that he was never going to be the ultimate purchaser of the Hardy's business: properly so, as he could not be.

303 HNR is not a plaintiff in this proceeding. No leave has been obtained or even sought by Mr Rowson to bring what is essentially a derivative proceeding on behalf of HNR, and I doubt that any such leave would have been granted under s 237 of the Corporations Act 2001 (Cth), given the prerequisites required to be satisfied under that provision. I suspect that the claim was brought in the way it was in order to ward off an inevitable application for security for costs had HNR been the plaintiff in this proceeding. However, the consequences of adopting that course of action is that Mr Rowson cannot establish that he, personally, has suffered any loss. He, indirectly, was merely a shareholder in the entity that suffered any loss caused by Mr Alpass' conduct.

304 For completeness, the evidence does not establish that the current case falls within one of the recognised limited exceptions to the privity doctrine.[212] For example, there was no contention (and it was not pleaded) that Mr Rowson held his claim against Mr Alpass on trust for HNR.

305 However, in the event that I am found to be wrong regarding the standing issue, I will proceed to consider the remaining issues concerning causation and the loss and damage claim.

306 An issue critical to the question of both causation and the quantification of loss is the question of the likelihood that Mr Nelson would have, within a relatively short period of time after Mr Rowson's last discussion with Mr Alpass about the issue on 29 August 2016, obtained an extended practising certificate.

307 To explain further, in order to establish that Mr Rowson suffered a loss of opportunity by reason of Mr Alpass' alleged repudiation or breach, Mr Rowson needs to establish, on the balance of probabilities, that Mr Nelson would have obtained an extended practising certificate. That is because that Mr Rowson has pleaded that the agreement for the sale and purchase of the Hardy's business was varied to include a term that Mr Nelson would obtain an extended practising certificate, and that the contract of sale would be in the name of Mr Nelson or nominee. Accordingly, until Mr Nelson obtained an extended practising certificate, he and Mr Rowson were not ready, willing or able to perform their side of the bargain, and Mr Rowson's claim would fail.

308 Accordingly, Mr Rowson's submission to the effect that it was not necessary for him to establish that Mr Nelson would have been able to obtain an extended practising certificate, because the risk that he could not have done so was merely a matter to be factored into any discount applied to the ascertained value of the income stream from the deeds, should be rejected. Rather, that Mr Nelson would have been able to obtain an extended practising certificate within a reasonable period of time is a necessary element of Mr Rowson's cause of action, not just a factor relevant to the quantification of any loss and damage.

309 However, I accept that the status of Mr Nelson's practising certificate is also relevant to the question of quantification of loss and damage, as the risk that Mr Nelson would not have been able to obtain an extended practising certificate would need to be taken into account (which, even in a scenario where Mr Rowson establishes on the balance of probabilities that Mr Nelson would have obtained an extended practising certificate, could be as high as 49.9 per cent) when determining the appropriate figure to discount any sum arrived at as being the value of the lost opportunity.

310 Turning first to the evidentiary issues arising from the parties' submissions concerning the question of whether Mr Nelson would have obtained an extended practising certificate, I draw no adverse inference from Mr Alpass' failure to call Mr Cooper to give evidence about the likelihood of Mr Nelson obtaining an extended practising certificate. While I accept that it is at least arguable that Mr Cooper could be considered to be in Mr Alpass' 'camp', however, it is not readily apparent that Mr Cooper would have been able to give probative evidence on this issue. He worked in the external intervention division of the LSB, and there was no evidence to suggest that he would have any more than a reasonably well informed, but not necessarily precise understanding of what issues would be taken into account when assessing an application for an extended practising certificate. Further, Mr Rowson gave evidence that he lodged the documents in support of Mr Nelson's application with the LIV, not the LSB. And finally, I accept that, given that the question of whether Mr Nelson would be able to obtain an extended practising certificate goes to causation of loss and damage, the onus was on Mr Rowson to call evidence in support of his claim, not upon Mr Alpass to call evidence in rebuttal.

311 However, I accept Mr Rowson's submission that the judgments recording certain matters regarding Mr Nelson's disciplinary history are not admissible as evidence of the facts referred to in those judgments by reason of s 91 of the Evidence Act. Mr Nelson of course was not available to give evidence about these matters. However, it would have been open to Mr Alpass to serve notices to admit in relation to some of the factual matters referred to in those judgments, or to call officers of the LSB who had taken action against Mr Nelson. Mr Rowson was only able to give limited evidence about what he knew about Mr Nelson's disciplinary history, as was Mr Alpass.

312 However, I am not satisfied on the balance of probabilities that Mr Nelson would have obtained an extended practising certificate, for the following reasons:

(a) despite Mr Rowson having submitted Mr Nelson's application and the supporting material on or about 28 or 29 July 2016, and having been told that it would take about two weeks to be processed, Mr Nelson had not received an extended practising certificate by 12 September 2016, and in the original statement of claim filed on 3 October 2016, no mention was made of Mr Nelson having obtained an extended practising certificate, such that I can infer that he had not obtained an extended practising certificate by that time. Mr Rowson ultimately conceded that Mr Alpass had told him on 29 August 2016 that if Mr Nelson did not obtain an extended practising certificate soon, he would sell the Hardy's business to someone else;

(b) Mr Rowson did not give evidence that Mr Nelson obtained an extended practising certificate at any time prior to his death. One would have expected him to give that evidence had Mr Nelson obtained an extended practising certificate. It was an important part of the claim, going directly to the question of causation of loss, and Mr Rowson and Mr Nelson were co-plaintiffs in this proceeding until Mr Nelson's death;

(c) Mr Rowson called no evidence from anyone from the LIV to support his contention that Mr Nelson would have obtained, or would likely have been able to obtain an extended practising certificate; and

(d) while I have determined that the judgments concerning Mr Nelson's disciplinary history are inadmissible, Mr Rowson gave evidence that he knew that Mr Nelson had lost his practising certificate because he had mishandled client funds by directing that funds be paid into his TAB account. Common sense suggests that such a disciplinary infringement would be at least an impediment to obtaining a practising certificate that permitted unsupervised handling of trust moneys, and Mr Rowson did not adduce any evidence to support a conclusion that this impediment could be or had been overcome. As indicated above, Mr Alpass was not under any obligation to call someone to give evidence that Mr Nelson would not have obtained an extended practising certificate.

313 Accordingly, Mr Rowson has not discharged the burden upon him to establish that, even if an enforceable agreement had been made, Mr Alpass' alleged repudiation of that agreement caused Mr Rowson to suffer any loss. He has not established that he and Mr Nelson would have been ready, willing and able to perform their side of the bargain within a reasonable period of time, or at all.

314 For completeness, I would add in relation to the other causation issues, I accept Mr Rowson's evidence that, had he and Mr Nelson been able to purchase the Hardy's business, they would have done the things that Mr Rowson said they would do. That is, they would have leased suitable premises, employed a wills and probate specialist, and taken appropriate steps to generate income from the deeds. All of these steps were well within Mr Rowson's evident capabilities. As discussed further later in these reasons, I accept Mr Senia's evidence that having possession of the deeds of a legal practice offers a legal practitioner the opportunity to generate further legal work, and, in any event, Mr Alpass conceded that the deeds would have value to some legal practitioners. Accordingly, if I am wrong about the question of whether there was a binding agreement for the sale and purchase of the Hardy's business, if I am wrong about the standing issue and if I am wrong regarding the question of whether Mr Rowson and Mr Nelson would have been able to perform their part of the agreement, as varied, then I accept that Mr Rowson has lost an opportunity of some value. Accordingly, I will proceed to do the best I can to place a value upon that opportunity.

The Senia report and the quantification of the loss and damage claim

315 Mr Senia gave evidence by audio-visual link, provisionally at first, in part in response to Mr Alpass' challenge to the admissibility of his evidence and his report. Prior to turning to Mr Senia's oral evidence in more detail, I will summarise the contents of the Senia report below.

316 Under the heading 'Expertise', Mr Senia said as follows:

I have practiced Law for 50 years and hold a full Practicing Certificate.

I have owned and managed legal businesses since 1978 and am a Director of several companies.

I hold degrees in Law and Jurisprudence. I am a fellow of the Australian Institute of Company Directors and hold a FAICD Diploma.

I am an Honorary Member of the Law Institute of Victoria.

I enjoy an excellent reputation and have held many leadership roles including head of the Financial Planners Geelong, President of Tourism and Vice President of the Chamber of Commerce. In addition, I am a speaker at Legal Conferences.

During my career I have been involved in legal amalgamations and the sale and purchase of legal businesses. I have analysed data and given opinions of the likely value of the Deeds Lawyers held in safe keeping for clients.

As to the worth of a Legal Practice as a business there are various formulas used by different Brokers depending on various factors. The strongroom is often undervalued.

Although I have the expertise to give an opinion of the likely value of the Hardys strongroom at the relevant time, I do not give an opinion as to the value of the Business itself. That is separate matter.[213]

317 Mr Senia summarised his conclusions as follows:

As a result of the Court Order made on the 24th of March 2023, I was requested to give my opinion of the likely value of Hardys on the 21/07/2016. I valued income potential from documents I was told were in the strongroom.

The Plaintiff provided extensive material which I considered and examined. On the 29th March 2023 I travelled to the Supreme Court in Melbourne where I examined three boxes held in storage.

On the 29th March 2023 I made enquires with the Supreme Court as the deed packets were not there.

Although I have made inquiries not all relevant material has been produced or discovered. Because of this my report is based on the available material.

Based on the information that has been discovered and including handwritten notes written by the Defendant there was a minimum of 6000 deed packets held by Hardys on behalf of clients at the relevant time. This report calculates the value of the strongroom at this minimum.

Having regard to a number of factors involved on putting a monetary value on the deeds, the likely income potential value of the strongroom at the relevant time, was $2,172,000.[214]

318 Mr Senia opined that, based upon his instructions about the number of deed packets, the average number of documents per deed packet, and the distribution of the documents in the deed packets (that is, wills, powers of attorney, certificates of title, probate documents, and contracts and leases) he formed the view that over 80 percent of the deeds would have the capacity to generate new business and repeat work. His assumptions about the contents of the deed packets were confirmed by an inspection of the subpoenaed documents. Mr Senia said that his inspection of the subpoenaed documents confirmed his instructions that Hardy's charge-out rate was $450 per hour at the relevant time.

319 Mr Senia calculated the revenue to be derived from new work, on average, as follows:

(a) wills: $1,350;

(b) powers of attorney: $695;

(c) conveyancing: $1,800;

(d) probate files: $12,600.[215]

320 Under the heading 'The Likely Value of Hardys Deeds At The Relevant Time', Mr Senia stated as follows:

6000 deed packets present a significant opportunity to increase a legal practice's revenue. It is likely that a client will use the firm which holds their documents for new legal work. Some documents such as a Will or Power of Attorney are often changed or amended whereas conveyancing is needed less frequently. Probate work is also frequent especially if the legal firm holds the subject Will.

At the relevant time Hardys were practicing in areas which were likely to give repeat work. However, when a legal firm contacts past clients so that their documents can be updated they would find:-

A. Not all clients want updating.

B. Because of the passage of time, some may be deceased.

C. Others simply cannot be found.

1. Some do require documents updated but have entered into relationships with other Legal Practitioners and will use them.
2. The clients affairs are now managed by someone else because of illness or incapacity.[216]

321 Under the heading 'Strongroom Marketing', Mr Senia said as follows:

Of all the clients a legal firm attempts to contact experience reveals that it would be approximately 20% that would be found and request new work.

In addition, the client may refer others such as family, friends, associate workers who have a need for legal work to be done for them. This, although added value, has not been calculated. It is an extra benefit.

This is new work with existing or new clients.

Accordingly, it is safe to assume that a properly organised and properly executed marketing plan has the potential to bring to the firm 20% of the gross income value of the strongroom.[217]

322 Under the heading 'The Dollar Value', Mr Senia's report concluded as follows:

Many Legal Practitioners have underestimated the dollar value of their strongroom or have not been in a position to utilise this asset of a Legal Practice.

Of the Deed packets held by Hardys some 80% held will have the potential to attract new work (4,800). However, because of the factors listed above only some 20% of these will realize into actual new work (960).

Whether each Deed is realised into new work depends on the experience and the skill of the operator and a good marketing plan.

The average hours spent by a Legal practitioner in a matter was 8.38. When the charge out rate of that practitioner is $450/hour the firm is likely to gross $3,771 per deed packet. After deducting a wage for operators working on the strongroom and relevant overheads the Legal practice should net 60% or $2,262.60 per deed packet.

960 deed packets which are likely to produce repeat or new work makes the likely income potential value of Hardys strongroom on the 15/12/2016 to be $2,172,000.

This accords with my 50 years of experience both as a Principal and manager of legal firms and having conducted strongroom marketing myself.[218]

323 On 1 August 2023 Mr Senia prepared an annexure to his report with further details regarding his expertise, which was tendered into evidence at trial.[219] In this annexure, Mr Senia stated, in summary as follows:

(a) he commenced at the practice of strongroom marketing in 1978, and has found it to be a successful form of marketing;

(b) he has valued the deeds of his own practice many times over the past 50 years, and the strongrooms of five other legal practices (including the deeds of the Hardy's business); and

(c) he enumerated other positions he has held in addition to those listed in the part of the Senia report extracted at paragraph 316 of these reasons.

324 Attached to Mr Senia's annexure were the following documents:

(a) minutes of a meeting within his firm on 26 February 2019, titled 'Strongroom Marketing Meeting'; and

(b) sample letters sent to clients in 2003 and 2016 as part of strongroom marketing campaigns.

325 Given the challenge to the admissibility of the opinion set out in the Senia report, Mr Senia was questioned extensively about his experience and expertise as well as regarding the contents of his report.

326 Mr Senia gave evidence that he has recently retired from full time legal practice after a 50 year career. He has practiced in his own firm in Geelong since 1978, although he had a partner for some of that period. He is also a director of several companies, and has held leadership roles with Financial Planners Geelong, the Geelong Chamber of Commerce, and Geelong-Otway Tourism.[220] He has been involved in the sale and purchase and amalgamation of legal businesses. His experience in what he describes as strongroom marketing includes during the 1980s when he merged his practice with his former partner, valuing the business of a friend, and he has continually valued his own practice.[221]

327 Mr Senia does not consider himself to be an expert in valuing the goodwill of a legal business. He said that is the province of business brokers. He does consider himself to be an expert in strongroom marketing.[222]

328 Mr Senia said that a strongroom marketing program aligns the commercial interests of a law practice with its obligations to take care of its clients, the needs of whom change overtime. A solicitor should offer a client a 30 minute free consultation from time to time. If their client's needs have changed, they may provide further instructions, and may also refer family and friends.[223]

329 Mr Senia said that when valuing a strongroom, it is necessary to look at the type of documents held in the strongroom. Documents such as a will or a power of attorney will generate more business than a long expired contract. Further, valuing a strongroom also needs to take into account that it will not be possible to find all clients, not all clients will come in to meet with the solicitor, and not all consultations will result in further instructions. In his opinion, only 20 per cent of deeds will generate new work, and the value will also vary according to the type of deeds, the marketing skills of the solicitors concerned and the logistical support available.[224]

330 Mr Senia gave evidence that in arriving at the value of $2,172,000 for the income potential of the Hardy's deed packets, he had already taken into account the fact that overheads consume about 50 to 60 per cent of a law firm's revenue.[225]

331 Mr Senia was asked about how he arrived at his assumption that 20 per cent of deed packets would generate new work, and said that his figure was based upon his own experience.[226] He accepted that his report did not include any data to support this estimate, but said that he has such data in his possession.

332 In re-examination, Mr Senia was asked about his inspection of the subpoenaed documents, and confirmed his evidence that the bulk of the documents in the deed packets were wills and powers of attorney, and the invoices rendered by Hardy's amongst the subpoenaed documents verified the average charge out rate of $450 per hour. He said that the figure of 8.38 hours per new file was based upon his experience. Mr Senia gave evidence that the estimated income of $2,172,000 could be realised over a period of six months by a full time solicitor with a full time secretary, but perhaps a year to 18 months would be required if they were only engaged in strongroom marketing on a part time basis.[227]

333 Following the conclusion of Mr Senia's evidence, I admitted Mr Senia's report into evidence. In my ruling, I said as follows:

I accept that the valuation of any income stream which might be generated from a strongroom is an area of specialised knowledge. The question is whether Mr Senia has, by reason of his experience as a principal solicitor who has undertaken this exercise on a number of occasions with respect to his own practice and a small handful of occasions for others, can be considered to be capable of giving evidence based on any specialised knowledge.

Not without some concerns, I conclude that Mr Senia has the relevant experience, having been a principal of a law practice serving individual and corporate clients over a 50-year period, and having engaged in the practice of strongroom marketing in his own practice. That the value of the strongroom may not be the appropriate measure of loss and damage, and the fact that there may be scope for criticism of the quality of instructions and the data available to him is somewhat beside the point, at least for present purposes.

The relatively limited extent of his experience and the fact that it was experience which has been acquired in work carried out for himself and business acquaintances might cause me to treat his evidence with some caution, but that of itself does not cause me to conclude that he does not have the requisite specialist knowledge. As for the question of whether his evidence is wholly or substantially based on that knowledge, I do not accept the defendant's submission that the quality of reasoning in Mr Senia's report does not allow me to evaluate whether his opinion is based on his knowledge and experience.

Setting aside the reliability of his instructions and some gaps in the data upon which his instructions are based, he does explain the basis upon which a law firm's deeds can be used to generate future business, which is an explanation an experienced law firm principal is qualified to give. He explains the distinction between the potential categories of deeds in terms of their income­generating capacity and the qualitative factors which might affect the ability of a law firm to generate income from the deeds.

Again, they are matters which are informed by his experience as a legal practitioner and a principal. While it is not entirely clear from the report and Mr Senia's oral evidence whether his estimate of the hours and remuneration generated by new work based on the contents of the strongroom is based upon his instructions or based upon his experience, I accept that he would have the necessary expertise to provide an opinion of the nature proffered by him regarding those matters, given his experience.

334 The matters considered when determining whether the Senia report should be admitted into evidence are also relevant to the reliability of Mr Senia's opinion, and accordingly, the weight to be given to his opinion when considering the loss and damage claim.

335 Mr Rowson submitted that the Senia report has been admitted and tendered into evidence, and observed that Mr Alpass has not adduced any expert evidence in rebuttal. Accordingly, the attacks upon Mr Senia's methodology needs to be considered in the context of there having been no alternative methodology put forward by Mr Alpass. To the extent that Mr Alpass' criticisms of the Senia report are valid, then that merely affects the weight to be given to Mr Senia's opinion.

336 Mr Rowson submitted that, in any event, the Senia report sets out the factors used to value the deeds, and explained the methodology behind Mr Senia's opinion. Mr Senia has inspected the subpoenaed documents, which has confirmed the nature of the deeds and the appropriate charge out rate. The average number of hours of work generated by each new set of instructions was based upon Mr Senia's own experience.

337 Mr Rowson noted that Mr Senia opined upon the potential value of the deeds alone, and therefore did not take into account the value of the current files, the archived files, or the goodwill of the Hardy's business, which could not be said to have a nil value. Even if one applies a substantial discount to the figure arrived at by Mr Senia, Mr Rowson would still be entitled to substantial damages for loss of opportunity.

338 Mr Alpass submitted for similar reasons advanced in support of his contention that the Senia report should not be admitted into evidence, that:

The opinion expressed by Mr Senia is fundamentally flawed, grossly overstates the income earning potential of the deeds and should not be accepted.

339 Mr Alpass submitted that the value of the income stream generated by the deeds could only be established by evidence adduced from a properly instructed expert. Mr Senia's attempts to support his opinion and methodology lacked credibility. The Senia report was:

fundamentally flawed in its reasoning, the calculation adopted, and [there was a] lack of evidence supporting the key assumptions.

340 Mr Alpass' submissions broke down Mr Senia's methodology and calculation of the sum of $2,172,000 into six separate steps, as follows:

First, assuming that there are 6000 deeds available (Step 1);

Second, opining that of the 6000 deeds held, 80% have the potential to attract new work (Step 2);

Third, opining that from that 80%, because of various risk factors, only 20% will realise new work (Step 3);

Fourth, assuming an average of 8.38 hours is spent by a legal practitioner in a matter (treated the same as a 'deed') (Step 4);

Fifth, that the relevant charge out rate of the practitioner is $450 per hour (Step 5);

Sixth, assuming/opining that after taking away 'overheads' for the legal firm, the legal practice should 'net' 60% (Step 6).

341 Mr Alpass submitted that the assumptions or opinions formed by Mr Senia at each of the six steps lacked any evidentiary foundation, and/or were not independently verified by any data or documents. Further, Mr Alpass submitted that Mr Senia has failed to properly account for the risks inherent in Mr Rowson's ability to earn any income from the deeds.

342 Mr Alpass submitted that the following matters also adversely affected the reliability of Mr Senia's opinion:

(a) the Senia report and Mr Senia's evidence confused the concepts of value, income and revenue, and there was a disconnect between the question he was asked to answer and the opinion he expressed;

(b) Mr Senia did not consider any other possible methodologies to value the deed packets or justify why his methodology is to be preferred;

(c) as noted above, Mr Senia failed to consider the matters which may have impacted Mr Rowson's ability to earn income from the deeds;

(d) Mr Senia failed to consider over what period of time the income could be earned, which would be relevant to the value of the Hardy's business, and is also relevant given Mr Nelson's death in 2017 and Mr Rowson's incarceration in 2018; and

(e) Mr Senia's opinion that a full time 'operator' working with the assistance of a secretary would be able to undertake the work within six months was 'impossible and wildly wrong' given that combined with Mr Senia's other assumptions, that would require the legal practitioner to work approximately 65 billable hours per business day.

343 Accordingly, when considering the quantification of the loss and damage claim, it is necessary to address the following issues:

(a) whether Mr Senia's opinion as to the value of the lost opportunity should be accepted;

(b) if no to (a), has Mr Rowson adduced sufficient evidence to enable me, doing the best I can, to assign a value to that loss of opportunity;

(c) if yes to (b), what discount should be applied to reflect the actual and potential vicissitudes which would have or might have impaired Mr Rowson's ability to recover part or all of the likely revenue from the deeds; and

(d) if I found that there was no oral agreement, but held that Mr Alpass was estopped from denying the existence of an oral agreement, the appropriate basis for calculating any equitable compensation.

344 Turning now to the Senia report and Mr Senia's opinion regarding the value of the income stream which might be generated by the deeds, I accept that many of the criticisms of the Senia report advanced by Mr Alpass are legitimate, and Mr Senia was not a particularly impressive witness. It was not that he was a partisan witness, in the sense that his evidence was tailored to support Mr Rowson's case, but rather he was so enthusiastic about his methodology that he made quite extravagant claims about the income which could be generated from the deeds by Mr Rowson and Mr Nelson. However, the Senia report and Mr Senia's evidence are not without some value, and the real question is what use I can make of that evidence (combined with Mr Rowson's evidence) in order to assign a value to the lost opportunity. After all, it is all the evidence I have.

345 Mr Alpass submitted that neither Mr Rowson or Mr Senia adduced any evidence to support the methodology utilised by Mr Senia to value the deeds. I accept that Mr Senia's approach seems somewhat unorthodox, and contrary to the usual principles of business valuation. Usually, one might expect evidence of the value of the Hardy's business to involve a discounted cash flow analysis, based upon projected net income, perhaps informed by evidence of what revenue the actual purchaser of the Hardy's business, Ms Knight,[228] was able to generate from the assets of the Hardy's business, to arrive at a value of the Hardy's business, to which an appropriate discount for various risks could be applied, based upon informed guesswork.

346 However, the fact that Mr Rowson has chosen to advance an unorthodox approach to the loss and damage claim is not fatal to his claim. Rather, his approach has simply placed some limits around his claim. To explain further, the revenue based approach inherent in Mr Senia's methodology (along with the known facts, being Mr Nelson's death and Mr Rowson's incarceration) means that I cannot place any value on any income or net profit which could be generated from the deeds beyond a 12 month, or at most, an 18 month time horizon. Or, put another way, the discount that would need to be applied to any income or profit generated after that time would have to approach 100 percent. This is because, on orthodox valuation principles, some form of discounted cash flow analysis would have to be undertaken of revenue or profit generated beyond a relatively short time frame, and I have no evidence as to what an appropriate discount rate would be.

347 That said, I have no particular difficulty with the proposition underpinning Mr Senia's methodology, that is, that an appropriately qualified and resourced legal practitioner with a modicum of marketing skills could have generated new business from the deeds. Such a proposition seems to be intuitively correct.

348 I also do not accept, without qualification, Mr Alpass' submission that the assumptions made by Mr Senia during the course of forming his opinion are unsupported by evidence. I accept there is scope for debate about the quality and reliability of that evidence, but I do not accept that there was no evidence at all.

349 Using the six step framework referred to in Mr Alpass' written submissions, I make the following observations upon the assumptions made and evidence relied upon by Mr Senia:

(a) assuming there were 6000 deeds available: Mr Alpass' own evidence supports Mr Rowson's contention that there were approximately 6000 deeds;[229]

(b) of the 6000 deeds, 80 per cent have the potential to attract new work: this was said to have been based upon Mr Senia's own experience, his inspection of the subpoenaed documents, and Mr Rowson's own sampling of the deed packets at the storage facility. Mr Rowson gave evidence that most of the deeds he inspected at the storage facility were wills and powers of attorney, which Mr Senia agreed were more likely to generate new work than other types of deeds. Again, that proposition seems to me to be intuitively correct;

(c) of the 4800 deeds which might generate new work, only 20 per cent will generate new work: while this seems a somewhat arbitrary figure, it is said to be based upon Mr Senia's experience, and it does not seem to be an unduly optimistic figure;

(d) an average of 8.38 hours is spent by a legal practitioner on a matter: again that seems to me to be a somewhat arbitrary figure, but it is an estimate based upon the experience of a very experienced legal practitioner, who has been a principal of a legal practice for many decades. Such an estimate does not seem to be an excessive amount of time for a solicitor to take instructions and review and draw documents. Further, the estimates Mr Senia provided at paragraph 319 of these reasons do not appear to be excessive;

(e) the relevant charge out rate of $450 per hour. Both Mr Senia and Mr Rowson gave evidence that this was the average charge out rate of the Hardy's business, although Mr Rowson's evidence no doubt offends the hearsay rule;

(f) after accounting for overheads, a legal practice should net 60 per cent of any revenue generated by the deeds: while Mr Senia has, for the reasons discussed above, the requisite experience to opine on such matters, his evidence in this regard was rather confusing. Accordingly, I propose to work on the basis that about 50 per cent of the revenue of a legal practice would be consumed by overheads.

350 Accordingly, I do not accept that the assumptions made in the Senia report lack evidentiary support. In any event, any risk of that one or more of the assumptions above are unduly optimistic can be taken into account when applying a discount to the value of the net revenue generated by the deeds.

351 However, I do not accept Mr Senia's opinion that the potential net revenue capable of being generated by Mr Rowson and Mr Nelson (or HNR) is $2,172,000. This estimate is completely untethered from Mr Rowson's evidence as to what he and Mr Nelson planned to do had they purchased the Hardy's business.

352 Mr Rowson gave evidence that he and Mr Nelson planned to incorporate HNR, lease premises of about 400 square metres, employ a wills and probate specialist, and write to all of the clients who had deeds in the storage facility. However, Mr Senia's opinion is that net revenue of $2,172,000 could be generated by a 12 to 18 month period by a single legal practitioner with a full time secretary. That is clearly a ludicrous proposition, as highlighted by the calculations in Mr Alpass' submissions.

353 However, I am prepared to accept that Mr Rowson and Mr Nelson would do what Mr Rowson said they would do, and make the following further assumptions:

(a) a full time employee solicitor would do six billable hours per day over a 48 week year;[230]

(b) Mr Nelson (in his capacity as supervising legal practitioner) and Mr Rowson (in his capacity as a paralegal) would each generate half of the amount of income generated by the employee legal practitioner, Mr Rowson would only be able to do tasks capable of being done by a paralegal, and would also need to spend time on practice management and marketing, and, notwithstanding Mr Rowson's evidence about Mr Nelson's state of health, Mr Nelson was of advanced years, well beyond the normal retirement age.

354 Adding those assumptions to the assumptions made by Mr Senia, then my estimate of the net revenue capable of being generated from the deeds by HNR, as opposed to an established legal firm with a number of partners and employed solicitors, would be $648,000 over a 12 month period. For the reasons already discussed, a longer time horizon is not appropriate, given the absence of any evidence whatsoever about appropriate discount rate to apply to any net revenue generated beyond that time.

(a) 5 days x 48 weeks = 240 business days;

(b) 240 days x 6 hours = 1440 billable hours;

(c) 1440 billable hours x $450 = $648,000;

(d) $648,000 + $324,000 + $324,000 = $1,296,000; and

(e) Net income = 50% of $1,296,000 = $648,000.

356 Using the formula above, the net revenue for an 18 month period would be $972,000. As explained above, the maximum time horizon capable of being supported by the evidence is 18 months.

357 However, I consider that the 12 month time horizon is the more appropriate time horizon to adopt, given the evidence about what actually happened. The evidence shows that the sale of the Hardy's business to Ms Knight was not settled until around two months after Mr Alpass sent Ms Knight the draft contract of sale for execution. Presumably a similar period of time would have elapsed had the Hardy's business been sold to HNR, given, among other things, the need to write to all of the clients to ask them whether they wanted to have their files transferred to the purchaser of the Hardy's business.

358 However, as noted earlier in these reasons, there was no evidence that, as at 14 September 2016, being the day Mr Rowson and Mr Nelson last spoke to Mr Alpass, Mr Nelson had obtained an extended practising certificate. Even if he had obtained an extended practising certificate the following day (which I doubt he did, given there being no reference to him having done so in either the original statement of claim or the evidence), the earliest that settlement could have taken place was mid November 2016.

359 Further, while steps could have been taken to recruit an employee solicitor during the period prior to settlement, a new legal practice was not going to start generating income from the deeds (as opposed to existing files) from day one. Mr Rowson gave evidence that they would have to write to all of the clients, and presumably it would have taken some time for clients to call in for consultations and to provide instructions to undertake new work. Realistically, very limited income could be generated until early 2017, particularly given Mr Rowson's evidence that he and Mr Alpass discussed a proposal that Mr Alpass retain and complete the current client files which were close to completion. Mr Nelson died in August 2017, and Mr Rowson was incarcerated from March 2018. While Mr Rowson was not in prison for the whole of 2018, he was released from prison on bail to obtain treatment for serious health issues, such that I can infer that he was largely unable to work or was unfit for work from March 2018 onwards. Accordingly, by March 2018, that is, approximately 12 months after one might expect HNR to be generating any significant income from the deeds, neither Mr Nelson or Mr Rowson could work in the new legal practice.

360 The evidence of what actually happened not only informs the choice of the timeframe for which the loss of income should be calculated, but also the appropriate percentage by which that figure should be discounted to take into account the risks which may have materialised, and the risks which did in fact materialise. These risks include:

(a) the risk that Mr Nelson could not obtain an extended practising certificate, combined with the risk that Mr Rowson could not locate a legal practitioner with an extended practising certificate to take his place (which would be, in any event, contrary to Mr Rowson's evidence about the discussions between him and Mr Nelson regarding the purpose of them purchasing a legal practice);

(b) even if Mr Nelson did obtain an extended practising certificate, the risk that, after Mr Nelson's death, Mr Rowson would not be able to locate a legal practitioner with an extended practising certificate to replace him soon after his death. If he had not been able to do so quite promptly, one might expect some form of external intervention to be put in place;

(c) given that I have found that HNR would not have sufficient resources to undertake the work Mr Senia has opined could be generated by the deeds, at least within a 12 month timeframe, the discount to be applied to take into account possible flaws in Mr Senia's assumptions can be modest, given the significant difference between $648,000 and $2,172,000;

(d) however, a discount needs to be applied to reflect the risk that the assumptions that I have made are too generous, in particular, the assumption that both Mr Nelson (or any replacement) and Mr Rowson could each generate half the revenue generated by an employee solicitor, or that a solicitor could undertake six billable hours per business day.

361 Taking all of the above matters into account, and especially noting my finding that Mr Rowson has not established that it is more probable than not that Mr Nelson would be able to obtain an extended practising certificate, I consider that the sum of $648,000 should be discounted by 60 percent, two thirds of which is attributable to the risk that Mr Nelson could not obtain an extended practising certificate and that HNR would not be able to engage an appropriately qualified solicitor to be the principal of the new legal practice in his place, and one third of which is attributable to the matters to in paragraphs 360 (c) and (d) above. Accordingly, if I had found Mr Alpass to have wrongfully repudiated the agreement, the value of the net income capable of being generated by the deeds is $259,200.

362 However, Mr Rowson has pleaded that he and Mr Nelson would have both been shareholders in HNR, with him (or an entity controlled by him) holding two-thirds of the shares. However, there was no evidence given by Mr Rowson to that effect, save for there being reference in Mr Rowson's witness statement to he and Mr Nelson both being shareholders in HNR, in unspecified proportions. The historical company search of HNR showed that the sole shareholder of HNR was a company which was a trustee of a family trust controlled by Mr Rowson. While this evidence only compounds the difficulties for Mr Rowson associated with the standing issue, I accept that, if those difficulties could somehow be overcome, there is no evidentiary basis for notionally apportioning that figure between Mr Rowson and Mr Nelson.

363 However, if I am found to be wrong about the value I have assigned to the lost opportunity to purchase the Hardy's business or whether there was sufficient evidence adduced to be able to assign any value at all,[231] then perhaps the simplest way of valuing the Hardy's business would be to assign a value to the Hardy's business commensurate with what Mr Rowson offered to pay for it, that is, $25,000.

364 As for any equitable compensation payable by Mr Alpass if he had been found to have been estopped from denying that an agreement had been breached, there is a debate in the authorities as to whether the statements of the High Court in Guimelli v Giumelli[232] or Sidhu[233] to the effect that the requirement that the Court is limited to relief which is the minimum equity required to do justice between the parties ('minimum equity principle') does not apply to cases of proprietary estoppel, that is, where the legal owner of real property is estopped from denying the interest of a claimant in land by reason of representations or conduct which engendered an expectation as to that interest in land.

365 In Taylor v Taylor,[234] which, like the current case, involved a claim of promissory estoppel, not proprietary estoppel, Beach JA noted that there was some academic and judicial debate about whether the minimum equity principle has survived the High Court decisions referred to above. His Honour referred to the decision of Ward CJ in Eq in Zugic v Vesuvius Australia Pty Ltd, [235] where her Honour stated as follows:

A not wholly unresolved point is whether the concept of the "minimum equity" has been discarded in the context of promissory estoppel (as well as in the context of proprietary estoppel). Be that as it may, in Sidhu v Van Dyke, the High Court explicitly framed the question of remedy (there, as noted, a case of proprietary estoppel) by reference to the "requirements of good conscience" (at [83]). That is not, of course, an appeal to idiosyncratic notions of fairness. The concept of good conscience is given content incrementally, by close attention to the facts and reasoning of the cases. The current holistic approach to relief for an equitable estoppel is in my view well encapsulated in the following passage from the judgment of Allsop P (Giles JA agreeing), as his Honour then was, in Delaforce at 485:

Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character.

What is made clear by cases such as Giumelli and Sidhu v Van Dyke is not only that any prima facie entitlement is to be framed by reference to the assumed or expected state of affairs but also that, in assessing the relief to be granted, proportionality of the remedy to the prejudice or detriment is a relevant consideration (and as recognised in Delaforce at [4], this consideration is sometimes of considerable importance). In Rodda v Ian Rodda Pty Ltd [2015] SASC 95 (see also Rodda v Ian Rodda Pty Ltd (No 2) [2015] SASC 128, again a proprietary estoppel case) , Nicholson J said at [305]:

Whilst it is not the case that the court should search for the "minimum equity" to do justice in the circumstances and it is not a case of assessing or measuring or weighing the detriment minutely in order to convert it into some equivalent of cash or kind, there must be a sufficient proportionality of any interest or remedy ultimately granted when compared with the prejudice or detriment suffered by the plaintiffs and the overall justice of the case.[236]

366 The above extract of her Honour's reasons also refers to the role the principle of proportionality plays in fashioning the appropriate relief in equity. In the proceeding before her Honour, a case of promissory estoppel said to arise out of representations made regarding entry into a contract of lease, her Honour decided that questions of practicality and proportionality precluded her from giving effect to any expectation arising from the alleged representation, and said that had the asserted estoppel been made out, then she would have merely awarded the costs and expenses thrown away by the party asserting the estoppel: that is, she would have in effect reversed the detriment.

367 In the current case, I have found that Mr Rowson incurred no material detriment acting upon any assumption induced by Mr Alpass' words or conduct. Even if I am wrong about that, any material detriment would have been of a very modest dimension indeed. Had Mr Rowson's claim had been made out, I would have adopted a similar approach to her Honour. The principle of proportionality would tell against making an award of equitable compensation calculated in accordance with the value of the lost opportunity.

368 For completeness, I would add that, had Mr Rowson established that Mr Alpass was estopped from denying the existence of an agreement, but that the modest detriment incurred by him did not warrant making an award of equitable compensation based upon the value of the lost opportunity to acquire the Hardy's business, then the standing issue would not have impeded any recovery by Mr Rowson of any sum to recompense him for the detriment he incurred. In Salehi v Salehi[237] ('Salehi'), I observed that there was nothing in the authorities to the effect that a claimant relying upon the principles of proprietary estoppel could not compel enforcement of an expectation that another party would obtain an interest in the relevant property.[238] Given the observations in the judicial and academic commentary to there being some convergence in the principles applicable to claims of proprietary estoppel and promissory estoppel in Australian law,[239] there seems to be no reason in principle why my observations in Salehi[240] would not apply equally to Mr Rowson's claim in promissory estoppel, although further consideration would need to be given to the question of whether the standing issue would impede recovery by Mr Rowson of any equitable compensation based upon the value of the lost opportunity. However, given my findings to the effect that Mr Rowson has not suffered any material detriment by reason of Mr Alpass' conduct, or, if I am wrong about that, has incurred only a very modest detriment, this is not the occasion to explore this issue further.

369 Accordingly, my findings regarding the issues in this proceeding can be summarised as follows:

(a) I am not satisfied that a binding agreement for the sale and purchase of the Hardy's business had been reached between Mr Rowson and Mr Alpass at the disputed meeting, or at all;

(b) similarly, while Mr Alpass' failure to expressly reject the offer made by Mr Rowson and Mr Nelson may have induced Mr Rowson to believe that Mr Alpass would sell the Hardy's business to them or their nominee, Mr Rowson incurred no material detriment in reliance upon his mistaken assumption, such that Mr Alpass could not be estopped from denying the existence of a binding agreement;

(c) I accept that, had I found that Mr Alpass had repudiated the alleged agreement, or was estopped from denying the existence of the alleged agreement, then Mr Alpass would not have been immune from liability by reason of the immunity provision;

(d) however, even if I am wrong about the existence of a binding agreement for the sale and purchase of the Hardy's business, Mr Alpass' conduct in repudiating the agreement did not cause Mr Rowson loss and damage. First, while Mr Rowson was a party to the agreement, and had standing to enforce the agreement, he did not suffer any loss and damage by reason of Mr Alpass' conduct. Secondly, I am not satisfied on the balance of probabilities that Mr Rowson and Mr Nelson were ready, willing and able to perform the agreement, as I am not satisfied on the balance of probabilities that Mr Nelson would have obtained an extended practising certificate within a reasonable period of time, or at all;

(e) however, if I am wrong on the question of whether there was a binding agreement and the issues concerning causation of loss and damage, then I would have found it possible to assign a value to the opportunity lost by Mr Rowson as a consequence of Mr Alpass' repudiation of the agreement, being $259,200; and

(f) if I had held there was an actionable estoppel in favour of Mr Rowson, the standing issue would be of less consequence, but the principle of proportionality would dictate that any equitable compensation be limited to any costs thrown away by Mr Rowson as a consequence of his mistaken assumption.

370 Accordingly, the proceeding will be dismissed. I shall hear further from the parties on the question of costs.

[1] Hardy's was said by Mr Rowson to be the second largest legal practice in Dandenong, after McPherson & Kelley. Its predecessor firms had been established in the 1950s and 1960s.

[2] Mr Hession was removed by this Court from the roll of legal practitioners on or about ! March 2018.

[5] (2017) 53 VR 196 [6]-[14].

[6] 'HNR' being an acronym for 'Hardy's Nelson Rowson'.

[8] [1959] HCA 8; (1959) 101 CLR 298.

[10] T249 L3-27. Mr Alpass gave evidence that other issues which would need to be dealt with in any contract of sale would be the question of any GST payable on the purchase, and the need for the receiver or the LSB to recover any files to conduct further investigations (T249 L23-26).

[17] At one point (T35 L10) Mr Rowson gave evidence that he was told there were 8000 'clients', but in the end, the figure of 6000 deeds seems to have broad acceptance.

[31] Mr Alpass' abbreviation for 'to get back to me'.

[33] Exhibit A. 'CHERB' is an acronym for the name of the trust of which Mr Rowson is a beneficiary.

[48] The file note suggests that Mr Cooper telephoned Mr Alpass, but Mr Alpass gave evidence that he believed that he initiated this conversation.

[62] I note that this date is two weeks and two days after 3 August 2016.

[64] In Mr Alpass' witness statement, he referred to having had discussions with Ms Knight about the sale and purchase of the Hardy's business.

[87] Referring to the decision in White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd [2023] NSWSC 817 [205].

[88] Brogden v Metropolitan Railway Co (1877) 2 App Cas 666, 686.

[89] Danbol Pty Ltd v Swiss Re International SE [2020] VSCA 274.

[90] [1954] HCA 72; (1954) 91 CLR 353.

[92] See the observations of Lyons J in Citius Pty Ltd v Logos Australia Group Pty Ltd [2022] VSC 656 ('Logos') at [32].

[94] Referring to the decision of Wells J in Reid v Kerr (1974) 9 SASR 367, 374.

[95] [1959] HCA 8; (1959) 101 CLR 298.

[96] This submission really only goes to the question of causation, and will be considered later in these reasons.

[97] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 [38]-[41].

[98] Felthouse v Bindley (1862) 142 ER 1037.

[99] [2023] NSWSC 817.

[102] [2022] VSC 656.

[108] [1959] HCA 8; (1959) 101 CLR 298.

[110] Danbol Pty Ltd v Swiss Re International SE [2020] VSCA 274 [120] ('Danbol').

[111] Tipperary Developments Pty Ltd v Western Australia [2009] WASCA 126; (2009) 38 WAR 488 [120].

[112] [2020] VSCA 274.

[119] [1954] HCA 72; (1954) 91 CLR 353.

[120] [2020] VSCA 274.

[123] Ibid [80], referring to the decision of Sundberg J in Adnunat Pty Ltd Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 [39].

[128] (1988) 164 CLR 387.

[131] [1954] HCA 72; (1954) 91 CLR 353.

[132] (1988) 164 CLR 387.

[133] (1988) 164 CLR 387.

[136] See JD Heydon, MJ Leeming and Dr PG Turner, Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (Lexis Nexis Butterworths, 5th edition, 2014) [17-055].

[137] (1988) 164 CLR 387.

[139] [2014] HCA 19; (2014) 251 CLR 505 ('Sidhu').

[140] [2016] HCA 26; (2016) 260 CLR 1.

[141] [2018] HCA 39; (2018) 265 CLR 522.

[142] [2014] HCA 19; (2014) 251 CLR 505.

[144] [2018] HCA 39; (2018) 265 CLR 522.

[146] (2017) 53 VR 196.

[149] Board of Fire Commissioners (NSW) v Ardouin [1961] HCA 71; (1961) 109 CLR 105 ('Ardouin'); Australian National Airlines Commission v Newman [1987] HCA 9; (1987) 162 CLR 466; Suatu Holdings Pty Ltd v Australian Postal Corporation (1989) 86 ALR 532 ('Suatu'); Puntoriero v Water Administration Ministerial Corporation [1999] HCA 45; (1999) 199 CLR 575 ('Puntoriero').

[156] See the authorities referred to at nn 149.

[157] [1968] HCA 17; (1968) 118 CLR 171.

[158] [1961] HCA 71; (1961) 109 CLR 105.

[163] [1987] HCA 9; (1987) 162 CLR 466.

[165] [1968] HCA 17; (1968) 118 CLR 171.

[167] (1989) 86 ALR 532 ('Suatu').

[169] [1999] HCA 45; (1999) 199 CLR 575.

[172] [1961] HCA 71; (1961) 109 CLR 105.

[174] (2017) 53 VR 196 [69].

[175] (1989) 86 ALR 532.

[176] [1999] HCA 45; (1999) 199 CLR 575.

[177] [2019] VSCA 136 ('Keys Consulting').

[182] I do not understand this evidence to be controversial.

[187] T44 L18-21. I understand the reference to the wills being 'mature' as being a positive attribute because they could generate further work by needing to be updated, or because their makers may soon pass away, generating potential probate work.

[188] CB145. It is not entirely clear who was the lessee of these premises. Mr Rowson in his evidence referred to the Queens Road office as 'their' office, which I take to be a reference to him and Mr Nelson. However, all of the documents in the court book with Mr Nelson's letterhead suggest that Mr Nelson practised from an address in Brighton, and at one point Mr Rowson gave evidence that they would need to keep using the storage facility for a while, because they did not have an office.

[197] T263 L25-27; T313 L15-16; T326 L4.

[202] [2023] NSWSC 915 ('Boyded').

[203] (1994) 179 CLR 332 ('Sellars').

[205] [2023] NSWSC 915.

[206] Sellars 368. See also Fightvision Pty Ltd v Onisforou [1999] NSWCA 323.

[207] These documents are four letters sent by Mr Alpass to Ms Knight advising of transfers of trust account balances totalling about $41,000 to Ms Knight's trust account on 26 October 2016, some 12 days after the settlement of the sale of the Hardy's business.

[208] [2019] VSCA 136.

[209] (1994) 179 CLR 332.

[210] See the discussion in JD Heydon, Heydon on Contract (Thomson Reuters, 2019) at [12.1 80] and the authorities referred to at nn 95.

[211] In the amended statement of claim, the plaintiffs alleged that Mr Nelson would be the principal of the incorporated legal practice, and Mr Nelson and Mr Rowson (or entities associated with them) would be equal shareholders in HNR. Further, they alleged that the plaintiffs have suffered loss and damage in their various proportions as to the shareholding in HNR, being 2/3 to Mr Rowson and 1/3 to Mr Nelson. However, Mr Rowson gave no evidence as to what proportions the shareholdings in HNR would be held as between him and Mr Nelson.

[212] See, for example, Trident General Insurance Co Ltd v McNiece Bros Pty Ltd [1988] HCA 44; (1988) 165 CLR 107.

[228] Who I understand to be still engaged in legal practice, at least within recent years.

[229] See transcript references at nn 197. Mr Alpass also made reference to there being 6000 deeds in his witness statement.

[230] While there is no direct evidence as to how many billable hours might be worked by an employed solicitor, six hours seems to me to be a reasonably conservative estimate.

[231] See Keys Consulting [2019] VSCA 136 [70].

[232] (1999) 196 CLR 101.

[233] [2014] HCA 19; (2014) 251 CLR 505.

[234] [2021] VSCA 352.

[235] [2020] NSWSC 106.

[237] [2023] VSC 535 ('Salehi').

[239] See, for example, the discussion by Allison Silink in 'Rationalising Australian Equitable Estoppel in the 21st Century: Doctrinal Coherence or Fragmentation' in J Eldridge and T Pilkington (eds), Australian Contract Law in the 21st Century (The Federation Press, 2024).

[240] [2023] VSC 535.