Ross v Cook

Civil Liability Act 2002 Fair Trading Act 1987 LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 Limitation Act 1969 Trade Practices Act 1974 (Cth)

Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 Bell v Peter Browne & Co [1990] 22B 495 Forster v Outred [1982] 1 WLR 86 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 CASES CITED : Kenny & Good Pty Limited v MGICA (1999) 199 CLR 413 Key Nominees Pty Ltd v Ace Insurance Ltd [2008] NSWDC 62 New South Wales Aboriginal Land Council v Ace Global Markets Limited & Ors [2005] NSWSC 39 Reinhold v New South Wales Lotteries Corporation (No. 2) [2008] NSWSC 187 Wardley Australia Ltd v Western Australia [1992] 175 CLR 514 Winnote Pty Ltd v Page (2006) 68 NSWLR 531

PARTIES : Marie Ross (Plaintiff) Michael Cook & Clydoc Pty Ltd (Defendants)

COUNSEL : M Daley (Plaintiff) R A Cavanagh (Defendants)

SOLICITORS : Duncan Scott (Plaintiff) Gilchrist Connell (Defendants)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 The Plaintiff lent the sum of $1,701,279 to a company called J & A Property Group Pty Ltd to assist that company in the purchase of a property at 253 Old South Head Road, Bondi and the Plaintiff obtained a mortgage over the property to secure the loan. The Plaintiff alleges that the loan was made in reliance on a valuation carried out by the First Defendant who was employed as a valuer by Clydoc Pty Ltd, the Second Defendant, which company carried on the business of a property valuer under the name of PRD Nationwide Valuations. The Defendants valued the property at $2,950,000. 2 The Plaintiff alleges that the valuation was negligently carried and that s 42 of the Fair Trading Act 1987 (NSW) and s 52 of the Trade Practices Act 1974 were thereby breached. 3 In their defences, the Defendants have relied (inter alia) on the proportionate liability provisions in Part 4 of the Civil Liability Act 2002 and have identified the other parties who, it is alleged, are also liable in respect of the matters pleaded in the Statement of Claim. 4 The proportionate liability provisions found in the Civil Liability Act, although they commenced on 1 December 2004, operate in respect of claims where the liability arose before 26 July 2004 (see Civil Liability Regulation 2003 cl 3; and for explanation of "claim" in Part 4 see Reinhold v New South Wales Lotteries Corporation (No. 2) [2008] NSWSC 187 at [22]). 5 On 24 April 2009 R S Hulme J made Orders pursuant to an Amended Notice of Motion filed by the Defendants for the determination of the following separate question: "Did each cause of action set out in the Statement of Claim against the First and Second Defendants accrue subsequent to 26 July 2004?" 6 If the causes of action accrued prior to 26 July 2004 then it would be necessary for the old procedure to be adopted whereby cross claims were filed against persons alleged to be joint or several tortfeasors. If the causes of action accrued on or after 26 July 2004 the procedure set out in the Civil Liability Act relating to concurrent wrongdoers can be employed. 7 It was this separate question that came before me for determination. Although the defences do not refer to the equivalent proportionate liability provisions in Part VIA of the Trade Practices Act the parties accepted that those provisions operated in a similar way and from the same date. Accordingly, for all of the causes of action contained in the Statement of Claim, 26 July 2004 was the relevant date. 8 The hearing of the separate question proceeded on an Amended Agreed Statement of Facts. Those facts were agreed for the purpose of the separate question hearing only and were as follows: "(1) The Second Defendant is in Liquidation. As at 28 April 2004, the Second Defendant carried on business as a valuer of commercial and residential properties. (2) The First Defendant is a former director and employee of the Second Defendant. He was both a director and employee of the Second Defendant as at 28 April 2004. (3) On 28 April 2004, the Defendants prepared for mortgage purposes a market valuation report in respect of a property at 253 Old South Head Road, Bondi (" the Property ") which assessed the market value of the Property at 28 April 2005 in the sum of $2.95 million. (4) On or about 18 May 2004, the Plaintiff, relying on the Defendants' market valuation, lent the sum of $1.4 million, alternatively $1.5 million, to J & A Property Group Pty Ltd (" JAP ") to fund JAP's purchase of the Property and in furtherance of that loan entered into the following agreements: (a) a Loan Contract dated 18 May 2004. Annexed hereto and marked " A " is a copy of the Loan Contract; and (b) a Deed of Guarantee dated 18 May 2004. The guarantor was Joe Abboud. Annexed hereto and marked " B " is a copy of the Deed of Guarantee. (5) The Plaintiff obtained a mortgage over the Property. A copy of the mortgage AA709228P is annexed hereto and marked " C ". (6) The loan was a bridging loan for a period of 1 month between 18 May 2004 and 18 June 2004, with an option to extend the loan for 1 month. (7) The loan was due to repaid in full on or about 18 June 2004, if the option was not exercised. JAP made no repayment on the loan. (8) On 1 December 2004, Mr G S Cremer of Australian Real Estate Services (a Registered Valuer) prepared a market valuation report dated 1 December 2004 in which he assessed the market value of the Property at that date at $1.65 million. (9) The Plaintiff obtained possession of the Property by order of the NSW Supreme Court on or about 6 December 2004. (10) The Plaintiff first sought to sell the Property as mortgagee in possession by auction in December 2004. Bids were made in relation to the Property, however, the Property was ultimately passed in at auction. (11) On 10 October 2005, Mr Michael Wright of Aspect Valuations Services Pty Ltd (a Registered Valuer) prepared a market valuation report assessing the market value of the Property as at 10 October 2005 in the sum of $1.25 million. (12) The Plaintiff sold the Property in or about September 2008 for the sum of $1.085 million." 9 It is not necessary to examine the terms of the annexures being the Loan Contract, the Deed of Guarantee (except for one matter which will be mentioned later) and the Mortgage. 10 In addition, the Plaintiff tendered a copy of the valuation referred to in Agreed Fact (11) above. That this would be tendered at the hearing of the separate question was expressly adverted to in the Orders made by R S Hulme J on 24 April 2009. That valuation annexed a letter dated 25 October 2005 by that valuer, Michael Wright, containing a valuation of the property on a retrospective basis as at 28 April 2004 at $1,250,000 with the market value range said to be $1,150,000 to $1,300,000. 11 The issue between the parties really turned on the question of whether the appropriate High Court authority applicable to the Agreed Facts was Kenny & Good Pty Limited v MGICA (1999) 199 CLR 413 (relied upon by the defendants) or HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 (relied upon by the Plaintiff). 12 In Kenny & Good v MGICA the claim was one by a mortgage insurer, exercising its rights of subrogation to the rights of the mortgagee, against the valuer who prepared the valuation for the mortgagee. 13 Although the issue of when the cause of action arose was argued and dealt with by Lindgren J at first instance adverse to the valuer from a Limitation Act 1969 point of view (see at (1996) 140 ALR 313) (and there was no appeal from the determination of that issue), the same question arose in a different way in the High Court because of the valuer's attempt to rely on the decision of the House of Lords in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191. The matter is explained in the judgment of Gaudron J at [12]: "Were the Banque Bruxelles approach to be adopted in this case, damages would be limited to $1.5 million or $1.6 million, that being the difference between the valuation and the true value of the property. This notwithstanding, one possibility that emerged in argument in this Court was that the whole of the loss was to be treated as caused by market forces because the trial judge found that "[i]f the security had been realised immediately following the making of the advance ... the property would have been sold for ... $4 million or ... slightly less." [(1996) 140 ALR 313-365] (omissions in the original) 14 It was in that context that Gaudron J went on to discuss when the cause of action in tort was complete as follows: "[13] So far as concerns the claim in negligence, the notion that the entire loss sustained in this case is to be treated as caused by market forces assumes that the tort was complete when the loan was made. There is some basis in logic for that view because, as soon as the mortgage was taken by Permanent Custodians, it was less valuable than it would have been if the value of the property had been as stated. On that basis, however, the damages should be the difference in the value of the mortgage, not the loss that would arise in the event of a hypothetical sale on the day that the advance was made, which, in essence, is what is involved in the notion that, in this case, the entire loss is referable to market forces.

[14] Where economic loss is said to have resulted from a transaction entered into in reliance upon negligent advice or information, the approach of this Court has not been confined to looking at the immediate situation brought about by entry into the transaction. That is because, as was pointed out in Wardley Australia Ltd v Western Australia , "[w]ith economic loss, as with other forms of damage, there has to be some actual damage" and not simply "[p]rospective loss". And where a transaction involves benefits and burdens, "no loss is suffered until it is reasonably ascertainable that, by bearing the burdens, the plaintiff is 'worse off than if he had not entered into the transaction'."

[15] It was pointed out in Wardley that "[t]he kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected." Wardley was concerned with an action for damages for breach of s 52 of the Act. However, there is no reason in principle why the position should be any different in tort.

[16] The interest that a mortgage lender seeks to protect by obtaining a valuation of the proposed security is not simply an interest in having a margin of security over and above the mortgage debt. Rather, it is that, in the event of default, it should be able to recoup, by sale of the property, the amount owing under the mortgage. And that is also the interest of a mortgage insurer. It is the risk that recoupment might not be possible that calls the valuer's duty of care into existence. And it is the interest in recoupment that is infringed by breach of that duty. Moreover, the time that loss occurs (and hence the time when the tort is complete) is when recoupment is rendered impossible. In the case of a mortgage transaction, that will occur when it is reasonably ascertainable that sale will result in a loss. At the earliest it will be when default occurs and, at the latest, when the property is sold.

[17] Once the interest which calls the valuer's duty of care into existence is identified as the interest of the mortgage lender in recouping what is due under the mortgage in the event of default, it is simply a matter of common sense to treat the loss arising from inability to recoup as flowing from breach of that duty, except to the extent that that inability is, in law, referable to the lender's own actions or some supervening event. At least that is so where, but for the negligent valuation, there would have been no mortgage transaction at all." (citations omitted) 15 The only other judge in Kenny & Good to have discussed the matter in these terms was Gummow J. He relevantly said this: "[82] … The interest of MGICA was that, in the event of default, the mortgagee would have the capacity to recover the amount secured by realising its security and without calling upon the insurance. To the extent that MGICA recouped to the mortgagee the moneys secured by the mortgage, it would have an interest in the security by way of subrogation.

[84] … Whatever may have been the situation upon the facts of the various appeals in Banque Bruxelles , the cause of action of MGICA in negligence accrued when the damage to its interest (as indicated above) was sustained. This was, at the earliest, when the mortgagor defaulted, and certainly when the property was sold.

[85] Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Ltd v Western Australia considered the economic loss arising from conduct which contravened s 52 of the Trade Practices Act. Their Honours said: "The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected."

[86] They went on to distinguish the detriment suffered by a person when first entering into an agreement relying on the negligent misrepresentation and the legal concept of "loss or damage" which may manifest at a later time. These propositions apply with equal force to the tort of negligence and to this case.

[87] The above characterisation of MGICA's interest accords with both MGICA's commercial expectations and the nature of the risk being met by the valuation. MGICA's risk was not fixed at the time of the valuation. Rather, it varied during the life of the mortgage insurance. …

[89] MGICA's risk of non-payment "crystallised" at the moment of realisation, when the relationship between the market value of the property and the moneys secured became fixed in the relevant sense. MGICA sustained an economic loss arising from the fall in the property market as a result of the valuation because the value of the property had been negligently overstated in circumstances where MGICA would not have entered into the transaction but for the valuation. The "loss" which is recoverable was sustained at the time of default and not at the time of entering into the transaction." (citations omitted) 16 Putting aside the issue of the date of default for the moment, Kenny & Good appears to establish that, in terms of a mortgagee or a mortgagee's insurer, the cause of action is not complete at the time a loan is made but only at a later time, in general terms, when the loss is ascertainable. 17 This decision may be contrasted with that in HTW Valuers. In that case the plaintiff sought advice from HTW Valuers about a shopping arcade it was interested in purchasing. As a result of the advice given by the valuer, the plaintiff entered a contract to buy the Plaza for $485,000. The letter of valuation made reference to a closely situated shopping centre and the vacancies that existed in shops in that centre. The valuer was ultimately found to be negligent in not having qualified his advice by cautioning the Plaintiff that the effect of the other shopping centre on the arcade being purchased was uncertain. 18 When the trial judge came to assess the damages he said this: "The negligence or breach of contract or misleading conduct was in failing to flag the possible negative impact of the Beach Road shopping centre. In such a case no loss is suffered until it is reasonably ascertainable that the purchaser is in fact worse off as a consequence of the negligence or other breach." 19 He then said in a footnote: "This is apparent from Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 527 and was restated by each member of the court in Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413 by way of distinguishing the standard measure of damages in valuation cases from those where the purpose of the valuation was to achieve a particular result. While factually Kenny & Good differs from the present case the principle is the same." 20 The issue in the High Court was when damage was first suffered, the Court of Appeal having largely agreed with the reasoning of the Trial Judge that the appropriate time to assess the damages was after the other shopping centre had been operating for a year, with the result that the value of the subject property had been assessed at that time at only $130,000. The Plaintiff, therefore, received damages for the difference between the contract price of $485,000 and the valuation of $130,000 together with some incidental damages. 21 In the High Court, the Defendant criticised the courts below in not having found that loss was first suffered at the time of entry into the contract whereas the Plaintiff submitted that the courts below had correctly approached the assessment of damages. 22 The High Court said in this regard: "[28] The plaintiff's endeavour to support the reasoning of the courts below must fail, because the first criticism of that reasoning made by the defendant is unquestionably correct and sufficient to undermine it entirely. If the plaintiff had learned the day after entering the contract to buy the Plaza, or the day after completing that contract, that the defendant's conduct had been misleading in the sense ultimately found by the trial judge, it could have started proceedings then and there. There was unchallenged evidence from Mr Dodds that on either of those dates the plaintiff was in fact worse off as a result of the defendant's breach, since the market value was less than the price. It was not necessary to wait for nearly two years to ascertain that some loss had been suffered. The plaintiff could have found out at once that it had bought something which was worth less than that which it had agreed to pay and did pay. It could have recovered at least the difference between the price paid for, and the market value of, the Plaza. The limitation period would have begun to run. [29] It is incorrect to treat this case as being like Wardley Australia Ltd v Western Australia , on which the trial judge relied. That case held that a risk of loss is not itself a category of loss, and that if a plaintiff enters a contract exposing it only to a contingent loss or liability, the plaintiff "sustains no actual damage until the contingency is fulfilled and the loss becomes actual". The plaintiff was not exposed to a contingent loss; it had suffered an actual loss.

[30] Nor is the present case one like Murphy v Overton Investments Pty Ltd . There the applicants had been induced to enter into a lease and incur an obligation to pay charges for outgoings. Whether the charges would rise above the level stated before the applicants entered the lease was contingent in the sense that it was not inevitable: the contingency could never eventuate unless the respondent exercised its discretion to increase the charges. There was thus a contingency hidden by the respondent's conduct which might or might not come to pass. But in this case the risk of the catastrophic effect on rent levels of the Plaza after March 1999, to which the defendant had not alerted the plaintiff, had already had an impact on the value of the Plaza by April 1997. That, on the evidence, was not the case in Murphy v Overton Investments Pty Ltd . The impact of the Beach Road Shopping Centre, unlike the contingency in Murphy v Overton Investments Pty Ltd , was not hidden and did not rest on any discretionary decision by anyone.

[32] On the other hand, the difficulties with damages assessment in the present case cause it to bear some resemblance to cases where a wrong results in the immediate loss of a chance or commercial opportunity which had some value, although the process of measuring the worth of that chance or opportunity depends on estimating the significance of events which are, or may be, yet to come.

[33] There is no doubt, then, that from the moment it contracted to buy the Plaza, the plaintiff suffered a loss, and to that extent the defendant's criticisms of the reasoning below are correct. …" (citations omitted) 23 In New South Wales Aboriginal Land Council v Ace Global Markets Limited & Ors [2005] NSWSC 39 Wood CJ at CL was dealing with an application pursuant to s 6 Law Reform (Miscellaneous Provisions) Act 1946. The issue was when the "event" occurred which triggered the right of the insured to claim an indemnity and gave rise to the "charge" referred to in s 6. That involved determining when loss was first suffered. The case concerned a claim against a valuer by a mortgagee who had advanced moneys for the purchase of the land that had been valued. 24 Wood CJ at CL first discussed what Gaudron and Gummow JJ said in Kenny & Good including the passages which I have set out above. He also set out the passage from Wardley at 175 CLR 514, 532-533. His Honour then noted that the Plaintiff in the case before him relied on the observations of Gaudron J in Kenny & Good and the majority judgment in Wardley in support of the proposition that the cause of action against the valuer giving rise to the entitlement to an indemnity accrued when the sale of the mortgage property was completed. 25 He noted that the Defendants relied on the High Court's decision in HTW Valuers v Astonland to support the submission that the relevant event crystallised when the loan was made. His Honour then went on to say: "[103] I am not persuaded that Astonland is determinative of the present case. What was there said was obviously relevant for a case involving a contract for the purchase of land or some other property at an overvalue where, from the outset it was possible to ascertain that a loss had been suffered.

[104] In the case of a loan transaction, while it might be possible to say that, from the outset, the security was less valuable than expected, it does not inevitably follow that the transaction will result in a loss. Particularly is that the case where the loan is not repayable until a later date, or where the valuation of the property taken as security was made both on an "as is" and on an "on completion" basis, (each of which was the situation here) since there is always the possibility of later events or market forces resulting in some increase in its worth. Indeed, had the Westlakes Project not proceeded, the value of the mortgaged property could have been substantially higher." 26 In Key Nominees Pty Ltd v Ace Insurance Ltd [2008] NSWDC 62 Johnstone DCJ had a similar issue to determine. The claim was one made by a mortgagee in respect of a valuation of land resulting in a loan by the mortgagee secured by mortgage over the land. The claim was a s 6 claim and the issue was when the cause of action accrued. The valuation was dated 18 May 2004 and the loan was made shortly thereafter. The valuer overvalued the land by some $300,000 with the result that the mortgagee lent well above its seventy per cent lending ratio. The borrower subsequently defaulted and property was sold at public auction pursuant to the mortgagee's power of sale on 30 September 2005. The amount recovered was insufficient to meet the principal amount of the loan and the accruals of interest. 27 It was not disputed that no loss was suffered at the time the Plaintiff entered into the mortgage and advanced the loan in reliance on the overvaluation, and it was agreed that any loss remained contingent until actual loss eventuated. However, the Defendant submitted that the contingent loss became actual when the borrower defaulted because it was the default that gave rise to the right to exercise the power of sale and the loss. The Plaintiff submitted that actual loss occurred only upon sale because it was only at that time that there could be any certainty of a shortfall. 28 Johnstone DCJ said: "[18] I disagree with both propositions. In my view the correct principle is that stated by Gaudron J in Kenny & Good Pty Ltd v MGICA (1992) Ltd and what she is there doing is explaining the Wardley principle and its application, so as to determine when, in the case of a mortgage transaction, the contingent loss becomes actual, because recoupment is rendered impossible. That occurs when it has become reasonably ascertainable, by objective evidence, that sale will result in a loss. Default is not the contingency, because even where default has occurred, unless it is reasonably ascertainable that sale will result in a loss, the loss remains prospective. That a sale would result in a shortfall is a question of fact. It is not required, as a matter of law, for an actual sale to occur, as was made clear in NSW Aboriginal Land Council v Ace Global Markets Ltd . So long as there is evidence that a sale would produce a shortfall, the contingency is fulfilled and the prospective loss becomes actual. It may be, for example, that a sale will assist in the quantification of the ultimate loss, but it is not the sale that is the contingency that gives rise to actual loss." 29 The Plaintiff in the present case submitted that, to the extent that there was any tension between HTW on the one hand and Wardley on the other, the HTW line of authority was binding because the High Court in HTW considered Wardley and explained the effect of that decision. 30 The Plaintiff next submitted that there was no real distinction between a purchase (as in HTW) and a mortgage (as in Kenny & Good). This is because the lender is getting something of less value than it thought it was. The Plaintiff pointed to the fact that if the lender wanted to assign the security it would have something of a lesser value than it ought to have had and that it would have had if there had been no negligent valuation. 31 I do not agree with these submissions. When properly analysed, the decisions in HTW Valuers on the one hand and Kenny & Good and Wardley on the other hand sit comfortably together based on the principles discussed, particularly in Wardley but also in Kenny & Good. What was emphasised in those two cases was the need to enquire what the interest was that was infringed by the negligent act. In relation to a mortgage, as Gaudron J makes clear at [16] in Kenny & Good, the interest that a mortgagee seeks to protect by obtaining a valuation is that it should be able to recoup by the sale of the property the amount owing under the mortgage, and it is the interest in recoupment that is infringed by breach of the duty. That is why the relevant enquiry is the time when recoupment is rendered impossible. That may be as early as default but it may be at a much later time because the default is merely a hiccup along the way. 32 It is not correct to concentrate on the default by the borrower because it is not that default that the valuer is protecting against in providing his or her valuation. 33 On the other hand, where a purchaser pays too much money for a property as the result of a negligent valuation, the loss occurs at the entry into the purchase. That is because the interest to be protected is the purchaser's interest in paying the market value for the property. 34 A purchaser is in the position of the plaintiff in Forster v Outred [1982] 1 WLR 86 where the fact that damage was first suffered was said by the High Court in Wardley to be explicable by reference to the immediate effect of the execution of the mortgage on the value of the plaintiff's equity of redemption (see at 175 CLR 514 at 529). A purchaser is also in the same position as the plaintiff in Winnote Pty Ltd v Page (2006) 68 NSWLR 531, as per the discussion by Mason P at [40] to [66], adopting the description of the English Court of Appeal in Bell v Peter Browne & Co [1990] 22B 495 of "cases where the client had through the negligence of his professional advisor ended up with a package of rights less valuable than he was entitled to expect". 35 The Plaintiff next submitted that even if loss did not occur on the making of the loan it occurred at the date of default. This was because the default showed an indication that the agreement for loan was not to be honoured and, by implication, it could be inferred that the personal covenants available to the mortgagee would be worthless. In this regard the Plaintiff pointed to part of the passage in the judgment of Wood CJ in NSW Aboriginal Land Council where he said that in a case where a loan was not repayable until a later date it could not be said that from the outset the security was less valuable than expected (see at [104]). The Plaintiff pointed to the fact in the present case that the loan was a bridging one for a period of one month only and was, without the exercise of the option to extend for one month, repayable on 18 June 2004. In this regard the Plaintiff also pointed to the remarks of both Gaudron and Gummow JJ in Kenny & Good that suggest that default may be a relevant time for the ascertainment of loss (see Gaudron J at [16] and Gummow J at [84]). 36 It is important to bear in mind two things when considering these submissions. The first is that the general principle remains that loss is established in a case such as the present (the loan of funds in reliance on a valuation) when recoupment becomes impossible and that involves the balancing of benefits and burdens which include matters such as rights under personal covenants, rights under guarantees and the ability to realise the sale of the land for an amount that will, when taken with the other matters, bring about the position that the lender recovers its full entitlement. Secondly, as Johnstone DCJ makes clear in Key Nominees, the issue is one of fact that involves an enquiry into when recoupment is impossible and that is when it becomes reasonably ascertainable by objective evidence that sale will result in a loss. 37 In the present case the Agreed Facts on which the separate question is decided do not point to any objective evidence to say that it was reasonably ascertainable at the date of default that recoupment was impossible. There was then available no evidence about the value of the land at that date. There was no evidence of the inability of the borrower to repay the money, only that it had failed to do so. 38 The only matter the Plaintiff can point to is that reliance on the Deed of Guarantee by the lender was likely to prove futile. This is because, by some error of drafting and execution, the Guarantee is said to be between the borrower and two lenders being Apollo Fruit Supply Pty Ltd and Joan Marshall. It appears that Joan Marshall was at one stage intended as one of the lenders because her name appears in a number of places on the Loan Contract crossed out with the name of Marie Ross (the Plaintiff) written in with initials alongside it. Probably by oversight, this did not happen in relation to the Deed of Guarantee. Unrectified, it would appear that the Plaintiff could not enforce the Guarantee against the borrower. 39 Nevertheless, the evidence goes no higher than that to support the submission that by the date of default the loss was objectively ascertainable. 40 The Plaintiff further submitted that the retrospective valuation by Mr Wright that valued the property as at April 2004 at $1,250,000 was objective evidence to show that, at least by the date of default, it was reasonably ascertainable that recoupment would be impossible. 41 In my opinion, the retrospective valuation does not make it objectively ascertainable that loss was suffered at the earlier time at which the valuation purports to speak. A valuation is an expression of opinion, albeit informed opinion, but standing alone is insufficient to amount to objective evidence that makes it reasonably ascertainable that a loss will result. Certainly, a further valuation, when combined with other evidence such as a continuing default by the borrower, or some other objective matter, may be sufficient. Indeed, that is how I understand Wood CJ's conclusion in NSW Aboriginal Land Council, that by the date the further valuation was obtained in that case it was reasonably ascertainable that a loss would be suffered (see at [106]-[109]). That case provides no support for the proposition that a retrospective valuation provides objective evidence of ascertainable loss at the date it purportedly values the land. 42 In my opinion, the mere act of default on 18 June 2004, even coupled with the later opinion of Mr Wright that at the date of the advance (May 2004) the land was worth less than the advance, did not make it objectively ascertainable that loss would result by the date of default. There was no evidence to suggest, for example, that the personal covenants were by that date worthless or worth so little that a loss would inevitably flow to the lender. There was not, as at that date, any further valuation evidence pointing to a loss on resale at that time. The first time such evidence was available was in December 2004 when Mr Cremer valued the property at $1.65 million. 43 I have not been asked to make a finding as to the date on which it could be said the Plaintiff suffered actual loss. The question to be determined is whether the cause of action accrued subsequent to 26 July 2004 or, put another way, whether it could be said that actual loss had been sustained on or before 26 July 2004. The evidence available does not permit me to say that the cause of action accrued on or before 26 July 2004 and, accordingly, I answer the question asked in the affirmative, that is to say, each cause of action set out in the Statement of Claim against the First and Second Defendants accrued subsequent to 26 July 2004.

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