Sensis Pty Ltd v McMaster-Fay

Court of Appeal (NSW)|2004-10-12|Before: Tobias JA, McColl JA, Kirby P, Coll JA

CITATION: Sensis Pty Ltd v McMaster-Fay [2005] NSWCA 163

JUDGMENT OF: Tobias JA; McColl JA; McClellan AJA

DECISION: (1) Appeal allowed; (2) Set aside the verdict and orders of Delaney DCJ entered and made on 24 October 2003 and in lieu thereof enter judgment for the appellant; (3) Order that the respondent pay the appellant's costs of the proceedings in the District Court and of the summons for leave to appeal and the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified

CATCHWORDS: DAMAGES - Assessment of damages - Damages for loss of a chance or opportunity - Doctor contracted to have his details listed in Yellow Pages - Details not listed in breach of contract and in breach of implied warranty in contract pursuant to Trade Practices Act 1974 s 74 - Claimed damages for loss of opportunity to increase growth of practice - Whether doctor had lost "an opportunity of real value" as a consequence of the breach - Assessment of the value of a lost opportunity

Carolan v AMF Bowling Pty Limited t/as Bennetts Green Bowl (Unreported, Supreme Court of New South Wales, Court of Appeal, Kirby P, Sheller and Cole JJA, 16 November 1995) Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 CASES CITED: Malec v J C Hutton Pty Limited (1990) 169 CLR 638 Daniels v Anderson (1995) 37 NSWLR 438

Sensis Pty Limited PARTIES: Roger McMaster-Fay

A: M R Elliott COUNSEL: R: J S Drummond

A: Mallesons Stephen Jaques, Sydney SOLICITORS: R: Bateman Batters, Penrith

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41029/03 DC 462/01

TOBIAS JA McCOLL JA McCLELLAN A-JA

Tuesday 17 May 2005 SENSIS PTY LIMITED v ROGER McMASTER-FAY Judgment 1 THE COURT: By summons filed on 19 February 2004, Sensis Pty Limited (the appellant) sought this Court's leave to appeal from the decision of Delaney DCJ of 24 October 2003 whereby his Honour entered a verdict in favour of Dr McMaster-Fay (the respondent) in the sum of $25,000 as damages for breach of contract on the one hand and of the warranty implied in that contract by s 74 of the Trade Practices Act 1974 (the Act) on the other. 2 At the commencement of the trial before the primary judge the appellant admitted that it had breached its contract with the respondent and the implied warranty under s 74 with the consequence that the only issue litigated was the assessment of the damages, if any, to which the respondent was entitled as a consequence of those breaches. 3 The appeal itself was heard concurrently with the application for leave. At the conclusion of argument the Court granted leave to appeal upon condition that a notice of appeal was filed within seven days. It did so on the basis that the appellant had advanced cogent arguments which demonstrated not only that the primary judge was arguably wrong but that he was manifestly wrong: cf Carolan v AMF Bowling Pty Limited t/as Bennetts Green Bowl, (Supreme Court of New South Wales Court of Appeal, Kirby P, Sheller and Cole JJA, 16 November 1995 unreported). In these circumstances, if the Court accepts the appellant's submissions, it would be unjust to leave his Honour's decision uncorrected.

The factual background 4 At all material times the appellant was the publisher of the Yellow Pages telephone directory and, in particular, the Penrith Yellow Pages directory. From 1983 to the end of 1997 the respondent carried on practice as an obstetrician and gynaecologist under the name "Dr Roger Fay" from the same premises in Emu Plains. Throughout that period he also retained the same telephone number. 5 At the end of 1997 the respondent ceased to practise obstetrics. Thereafter he continued his practice from the same premises and with the same telephone number solely as a gynaecologist. In 1999 he decided to change his name by adding to it his mother's maiden name so as to be known as "Dr Roger McMaster-Fay". 6 In October 1999 the appellant and respondent entered into a written agreement whereby in consideration of the payment by the respondent of $1,656, the appellant would provide advertising listing in the 2000 Penrith Yellow Pages and the 2000 Sydney Yellow Pages. These entries were to be a box display advertisement, a line item entry under "F" for "Fay" and a line item entry under "M" for "McMaster-Fay". A similar agreement was entered into in October 2000 for the 2001 year. 7 In the 2000 Penrith Yellow Pages published in February 2000, (a) the line item entry under "F" for "Fay" did not appear; (b) the line item entry under "M" for "McMaster-Fay" did not appear; but (c) the box display advertisement did appear.

8 In the 2001 Penrith Yellow Pages published in February 2001,

(a) the line item entry under "F" for "Fay" did not appear; (b) the line item entry under "M" for "McMaster-Fay" did appear; and (c) the box display advertisement also appeared. 9 A line item entry under "F" for "Fay" appeared in the White Pages telephone directory for each of the years 2000 and 2001. In addition the respondent's telephone number could be obtained from Directory Assistance during those years.

The proceedings before the primary judge 10 Before the primary judge the appellant argued that the respondent had not proved that he had sustained any loss as a result of the appellant's breaches. On the other hand, the respondent claimed damages for the loss of the opportunity to increase the growth of his practice and thereby increase his income as well as for actual loss of income allegedly sustained. 11 The respondent gave evidence that all his patients had to be referred to him by a general practitioner in order for them to be able to recover his fees from Medicare. He distinguished between new initial patients who had not seen him before and old initial patients who had but were to see him for further treatment. He claimed that before February 2000 he was seeing between 10 and 15 new initial patients per week but that after the 2000 Yellow Pages was published in that month, the number of such patients dropped to two or three per week although by February 2001 that number had increased to eight per week and by mid-2001 had returned to their pre-February 2000 level. The number of patients seen by the respondent and the variations from 1999 to 2001 was part of the information given to a firm of accountants, Howarth & Associates. Mr Watt of that firm prepared a report dated 3 October 2002. Accepting the respondent's evidence, it was submitted that on the basis of the Howarth report the respondent's practice either declined or stagnated during the 2000 calendar year and did not regain growth until mid-2001. 12 The respondent also relied upon a survey of his patients which he had conducted from 1 December 2001 to 28 February 2002 to demonstrate the number of patients who used the Yellow Pages for the purpose of contacting him. The primary judge accepted the respondent's submission that the survey established that "some proportion" of his patients obtained details of his address and telephone number by consulting the Yellow Pages. 13 Before the primary judge the appellant submitted that the evidence established that the respondent saw more patients and generated more income after February 2000 compared to prior to that time; that there was no causal connection between patient numbers and the appellant's breaches; and, further, that there was no evidence that the respondent's income would have been any different than it in fact was, even if the omitted line item entries had appeared. The appellant further submitted that if, as the respondent suggested, all his patients were referred to him by a general practitioner, then there was no evidence that the referring general practitioners were unaware of his change of name so that any patients who were referred to him, but who were unable to find his address and telephone number in the Yellow Pages, could have checked with their referring general practitioner or Directory Assistance. 14 Although the respondent gave evidence that there was a drastic drop in the number of patients seen by him in 2000 which reached its lowest point in or about March/April 2000 thus leaving a hole in his practice which was not filled, he ultimately agreed that from 1999 to 2001 the annual income of his practice rose significantly and improved from year to year. As a result of that evidence the primary judge found (at [16]) that the respondent could not establish any specific financial loss resulting from the appellant's breaches. Accordingly, damages could only be assessed on the basis of a loss of a chance or opportunity. 15 The respondent was cross-examined with respect to his assertion that his practice declined after February 2000 (that being the basis upon which the Howarth report had been prepared). As a consequence of that cross-examination, the primary judge concluded (at [18]) that the respondent was incorrect in his recollection that his practice had declined due to the failure of the appellant to provide the contracted line item entries in the 2000 and 2001 Yellow Pages. He therefore rejected the Howarth report as based upon unsubstantiated statistics. Furthermore, his Honour (at [21]) rejected the assumption made by Mr Watt in the Howarth report as to the likelihood of the numbers of persons not being able to locate the respondent because of the absence of the relevant entries in the Yellow Pages although he did accept that "some persons" might not have been able to locate the respondent by that means. That finding, his Honour said, was consistent with the respondent's survey to which reference has already been made. 16 His Honour also rejected (at [21]) as "inherently improbable and unrealistic" the assumption made by Mr Watt that all of those patients of the respondent who did not find his details in the Yellow Pages had no knowledge of any alternative method of obtaining those details. However, his Honour also held (at [30]) that it was a reasonable assumption that an unspecified number of patients may not have been able to obtain those details despite the fact that there were alternative means of doing so. 17 The primary judge accepted (at [24]) that there was no reduction in the number of patients the respondent saw during the period in question and that there was no identifiable reduction leading to a loss of income. In addition, his Honour accepted that the respondent had not proved any causal connection between any alleged specific changes in patient numbers and the breaches relied upon. In particular, his Honour noted the evidence of the respondent that from March/April 2000 to mid-2001 the number of patients he saw rose dramatically notwithstanding the omission of the subject line item entries. 18 The appellant tendered a report by a Mr Brown of MSM Loss Management dated November 2002. Mr Brown, who was a certified practising accountant, reviewed the taxation returns of the respondent and his company and concluded that there was a basis for an assessment of the respondent's loss in the sum of $10,985. Mr Brown considered that there was lost revenue in 2000, 2001 and 2002 and concluded that this was caused by the failure of the appellant to provide the omitted line item entries. The primary judge accepted (at [26]) Mr Brown's evidence that the respondent had suffered a loss of opportunity to obtain income during the period when the relevant entries were omitted although he was not prepared to accept that the calculations made by Mr Brown based on specific figures should be the basis for the determination of the respondent's damages. 19 In conclusion, the primary judge found (at [27]) that on the balance of probabilities the respondent had lost the opportunity to obtain income from patients who could not locate him because of the omissions from the Yellow Pages. He considered that the relevant principles to be applied were those articulated in the joint judgment of Mason CJ, Dawson, Toohey and Gaudron JJ in Sellars v Adelaide Petroleum NL (1992) 179 CLR 332 where at 349, omitting citations, their Honours said: "In the realm of contract law, the loss of a chance to win a prize in a competition resulting from breach of the contract to provide the chance is compensable, notwithstanding that, on the balance of probabilities, it is more likely than not that the plaintiff will not win the competition. As the contract contained a promise to provide the chance, the breach of the contract resulted in the loss of the chance and that loss was for relevant purposes an actual loss … And where there has been an actual loss of some sort, the common law does not permit difficulties of estimating a loss in money to defeat an award of damages. The damages will then be ascertained by reference to the degree of probabilities, or possibilities, inherent in the plaintiff's succeeding had the plaintiff been given the chance which the contract promised." 20 The primary judge then continued in these terms: "28. In my opinion the damages should not be nominal. The plaintiff has lost a commercial advantage by not having his full details available through the Yellow Pages. The defendant's own evidence supported that a commercial advantage would be obtained to a customer by such an advertisement. It follows that the failure to provide such an advertisement deprived the plaintiff of that advantage for which he is entitled to be compensated. 29. Although it is difficult to ascertain the precise degree of loss, some indication of the possible loss suffered can be obtained from the income of the company during the years 1999, 2000, 2001 and 2002. In my opinion it would not be unreasonable as a percentage of the overall income during that period to allow the plaintiff as a loss of opportunity for income a figure of $25,000. This, to my mind, would be a fair assessment on the information available as to such loss."

The appellant's submissions 21 The appellant submitted that the respondent had not proven, on the balance of probabilities, that he had suffered the loss of those patients who could not locate him in the 2000 and 2001 Yellow Pages because of its breaches. It submitted that the primary judge's conclusion that some patients may not have been able to obtain the respondent's telephone or locational details because of the absence of the correct line item entries in the Yellow Pages (notwithstanding the existence of alternative means of obtaining those details) was fundamentally flawed. 22 It submitted that the fallacy in the primary judge's conclusion that the respondent lost an opportunity to acquire new initial patients as a consequence of the appellant's breaches could be demonstrated as follows: (a) The respondent's patients increased in the period 2000-2001, the years the relevant entries did not appear; (b) The respondent's case at trial did not proceed on the basis that potential patients "shopped around" for a gynaecologist in the Yellow Pages without knowing whom they wished to consult; on the contrary, his case was that all patients were referred to him by a general practitioner who had recommended the respondent to that practitioner's patient; (c) The respondent's case, therefore, was that the Yellow Pages was a means by which new initial patients could obtain the respondent's telephone and locational details after they became aware of his existence through their referring practitioner; (d) As the primary judge considered that there would be a number of patients who would have used the Yellow Pages for the purpose of obtaining the respondent's telephone and locational details and that it was the loss of those patients who were unable to find such details in respect of which the respondent was entitled to be compensated, he must have made the following assumptions: (i) that patients who had been referred to the respondent by their general practitioner but who were unable to find his correct address and/or telephone number in the offending directory, did not refer back to that practitioner for the purpose of obtaining those details; (ii) rather, those patients must have returned to their general practitioner, informed him or her that they were unable to ascertain the whereabouts of the respondent, requested referral to another gynaecologist rather than ascertaining the contact details for the respondent from that practitioner (the latter not volunteering to provide those details), in circumstances where those patients had already demonstrated a preference to use the respondent by accepting the initial referral to him by their general practitioner;

(e) The chance that potential patients were lost in that manner was speculative ( Malec v J C Hutton Pty Limited (1990) 169 CLR 638 at 643) or negligible ( Sellars at 335). 23 Furthermore, it was submitted that the respondent's survey upon which the primary judge relied for his finding that a number of his patients did have regard to the Yellow Pages for the purpose of obtaining his telephone and locational details showed that fewer than 20% of all patients used the Yellow Pages in the relevant period as a means of obtaining those details. Further, the vast majority of that 20% expressly indicated that they had also located the respondent by other means. 24 The appellant further submitted that even if the primary judge was correct in finding that the respondent had lost an opportunity of real value, he did not give real consideration to the value of that lost opportunity. In particular, he determined the loss of $25,000 by doing no more than taking an unstated percentage of the overall income earned by the respondent's company during the calendar years 1999, 2000, 2001 and 2002. 25 It was thus submitted that the primary judge had provided no reasons as to how he arrived at the figure of $25,000 or how he had based it upon the respondent's company's earnings over the years in question. In particular, his Honour failed to explain how the company's income during the relevant years provided some "indication of the possible loss suffered". 26 If it was to be concluded that the respondent suffered a loss of income due to the lost opportunity of obtaining new initial patients through the Yellow Pages, it was necessary, so it was submitted, for some guidance to be obtained from the possible number of patients lost. However, in the present case, patient numbers rose over the relevant period. 27 Accordingly, it was submitted that the primary judge arrived at the figure of $25,000 without any properly identified or sound basis, the absence of which was highlighted by the fact that there was no lost opportunity of any real value as patient numbers increased rather than reduced or stagnated.

The respondent's submissions 28 The respondent submitted that for two years a prospective patient attempting to locate him under the name "Dr Roger Fay" would not have been successful unless she was aware that he was using the name "Dr Roger McMaster-Fay", a name he had not previously employed in the Penrith area. He thus submitted that his practice not only suffered an initial decline in new patients but also stagnated and did not return to its pre-February 2000 level until mid-2001. We interpolate that this recovery needs to be considered against the fact that from mid-2001 until February 2002 the line item entry under "F" for "Fay" was still missing from the Yellow Pages although the line item entry under "M" for "McMaster-Fay" appeared. 29 In support of his case that his practice failed to continue to grow at the same rate as prior to the publication of the 2000 Yellow Pages, the respondent relied upon the gross receipts for the calendar years ending 31 December which showed: Year Fees Change 1998 $278,606 1999 $330,471 +19% 2000 $322,006 -3% 2001 $462,422 +44% 2002 $550,721 +19%

30 The respondent further submitted that his loss was to be determined by reference to the lost opportunity to treat new initial patients. Both parties relied upon a table which broke down those patients by quarterly periods: INITIAL PATIENTS Year Quarters 1st 2nd 3rd 4th 1998 1 104 2 99 3 117 4 96 1999 5 102 6 111 7 104 8 104 2000 9 110 10 102 11 133 12 107 2001 13 141 14 166 15 186 16 156 2002 17 162 18 188 19 176 20 156 31 Those figures demonstrated the following: Year New Initial Patients Change 1998 416 1999 421 +1.2% 2000 452 +7.4% 2001 649 +43.5% 2002 682 +5%

32 The respondent submitted that although the overall number of new initial patients rose, nevertheless in the case of the most common procedure performed on new patients, namely, laparoscopic hysterectomies, the number of patients upon which that procedure was performed fell during the calendar year 2000, the figures being: 1999 53 2000 42 2001 58 2002 (to 22.11.02) 54

33 However, it is appropriate to interpolate at this point that these figures differ from another document prepared by Mr Watt, the respondent's expert, summarising his earnings by reference to Medicare item numbers. Item number 35753 related to laparoscopic hysterectomies whereas item number 35638 related to another procedure which the respondent asserted was a significant income producer. The figures were as follows: Item No Date No of Services $ 35638 1-Jan-98 to 31-Dec-98 49 48,378.55 35753 1-Jan-98 to 31-Dec-98 27 38,800.00 35638 1-Jan-99 to 31-Dec-99 37 38,623.00 35753 1-Jan-99 to 31 Dec-99 51 72,097.75 35638 1-Jan-00 to 31-Dec-00 52 52,047.45 35753 1-Jan-00 to 31-Dec-00 39 56,330.00 35638 1-Jan-01 to 31-Dec-01 38 40,685.50 35753 1-Jan-01 to 31-Dec-01 57 80,072.10 35638 1-Jan-02 to 31-Dec-02 25 28,750.00 35753 1-Jan-02 to 31-Dec-02 20 29,300.00

34 The above figures show, with respect to laparoscopic hysterectomies, that there was a significant increase in the number of procedures undertaken between calendar year 1998 and 1999; a drop in calendar year 2000; a large increase in calendar year 2001 and then, inexplicably, a significant drop off in calendar year 2002 (when the correct entries appeared in the Yellow Pages). The other procedure decreased in terms of the number of services from 1998 to 1999 but then significantly increased in 2000, decreased in 2001 and then further decreased in 2002. It is thus clear that, at least from these figures, it would be impossible to draw any inference to support a causal connection between the number of services for these two procedures provided in 2000 and 2001 and the appellant's breaches. 35 It was thus submitted by the appellant that the above figures demonstrated that the demand for particular services varied quite dramatically from year to year regardless of the entry that had appeared in the Yellow Pages. In particular, it was submitted that shifts in the respondent's patient numbers were capable of cogent explanation unrelated to the appellant's breaches. The most obvious explanation for the drop in the calendar year 2000, as well as 2002, in respect of laparoscopic hysterectomies was that fewer women were in need of those procedures during those years. Service providers, so it was submitted, must know that demand for procedures of a particular type may rise and fall naturally across a period due to circumstances beyond their control and which would have nothing to do with whether or not their contact details were mistakenly omitted from the Yellow Pages. 36 Nevertheless the respondent submitted that the primary judge was correct to identify the issue as being "the loss of opportunity" to obtain a commercial advantage as a "compensable loss" which was to be determined by reference to the probability or possibility of that loss occurring. He further submitted that the primary judge was entitled to take into account the gross receipts of the respondent's practice for the financial years 1999 to 2002 in order to arrive at an award of damages in the sum of $25,000.

Did the primary judge err? 37 In order for the respondent to succeed in his case that he had lost an opportunity to acquire new initial patients by reason of the appellant's breaches, the primary judge had to be satisfied, on the balance of probabilities, that he had in fact lost "an opportunity of real value". In Sellars at 355 Mason CJ, Dawson, Toohey, and Gaudron JJ said: "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." (emphasis in original) 38 Brennan J (as he then was) said (at 367 - 8): "Unless it can be predicated of an hypothesis in favour of causation of a loss that is more probable than competing hypotheses denying causation, it cannot be said that the plaintiff has satisfied the court that the conduct of the defendant caused the loss. Where a loss is alleged to be a lost opportunity to acquire a benefit, a plaintiff who bears the onus of proving that a loss was caused by the conduct of the defendant discharges that onus by establishing a chain of causation that continues up to the point when there is a substantial prospect of acquiring the benefit sought by the plaintiff. Up to that point, the plaintiff must establish both the historical facts and any necessary hypothesis on the balance of probabilities. A constant standard of proof applies to the finding that a loss has been suffered and to the finding that the loss was caused by the defendant's conduct, whether those findings depend on evidence of historical facts or on evidence giving rise to competing hypotheses. In any event, the standard is proof on the balance of probabilities." 39 Accordingly, it was first necessary for the respondent to establish on the balance of probabilities that he sustained "some loss" by demonstrating that the appellant's breaches caused the loss of a commercial opportunity which had "some" value which was not negligible. The first issue, therefore, was whether those breaches, on the balance of probabilities, caused the loss of a commercial opportunity of the respondent being the opportunity to increase the rate of growth (and, therefore, the number) of new initial patients. 40 The basis upon which the primary judge answered (at [30]) the above question in favour of the respondent was that he considered it reasonable to assume that some proportion of potential new initial patients would wish to obtain the respondent's telephone and locational details by reference to the Yellow Pages but were unable to do so as a consequence of the appellant's breaches and despite the fact that there were alternative means available to enable them to do so. 41 As we have already observed, the respondent based his case largely upon a loss in the rate of growth of new initial patients. In view of the primary judge's finding that he had not proven any actual loss in growth of such patients, it followed that the respondent's alternative case was that he had lost the chance of obtaining an increase in the rate of growth of new initial patients. 42 In our opinion, the various permutations and combinations of patients and procedures over the relevant years which we have extracted above, do not assist, and apparently did not assist the primary judge, in concluding that on the balance of probabilities such a chance was lost. Thus, for instance, quarterly figures for the two years preceding the breaches and those in the year 2000 are arguably consistent with the exception of the third quarter of the year 2000 when 133 new initial patients were seen. The point, however, is that the figure for the third quarter, which involved an increase over the previous two and a half years, sits right in the middle of the period when it might have been expected that the respondent would have sustained his greatest loss. Again, the figures for calendar year 2001 show a significant increase over the previous three years, again at a time when the appellant was in breach of its obligations. 43 It is no doubt, because of the inconsistencies in the figures and the inability to draw any inference from them, that the primary judge adopted the approach he did, namely, that based on the respondent's survey a number of his patients (albeit a small number) did have regard to the Yellow Pages for the purpose of obtaining details of his address and telephone number. 44 The primary judge's approach therefore assumed that if some patients had regard to the Yellow Pages to obtain the respondent's relevant details, then at least some new initial patients (who had not seen the respondent before) would also have referred to the Yellow Pages for the purpose of ascertaining those details but had been unable to do so. Consequently they did not become patients of the respondent. However, it must also follow that those patients must have gone to another specialist which brings us to the appellant's submission referred to in [22(d)] above. 45 The question therefore arises as to whether, on the balance of probabilities, it was open to the primary judge to find that:

(a) notwithstanding that the potential new initial patient had been specifically referred to the respondent by that patient's general practitioner;

(b) that patient had not been provided by the referring general practitioner with the respondent's address and telephone number but had been left to her own means of obtaining those details;

(c) having been unsuccessful in finding those details in the Yellow Pages, the patient had returned to her referring general practitioner; who

(d) having neglected to provide the respondent's details to the patient notwithstanding that she must have told the general practitioner that she could not find the respondent's details;

(e) thereupon referred the patient to another gynaecologist. 46 The primary judge did not, however, address the question of what that potential patient would do once she found that she could not locate the respondent in the directory. Did she simply forget about the problem that caused her to visit her referring general practitioner in the first place? That seems somewhat unrealistic. Did she telephone her general practitioner and ask for the respondent's details? That would be a logical and common sense reaction for she would then have been informed of them. Understandably, no case was made that any referring general practitioner was unaware of those details during 2000-2001. 47 Alternatively, would the patient have visited her general practitioner and asked to be referred to another gynaecologist? Having been referred by that practitioner to the respondent, the former would have wanted to know the reason for the change. If told that the respondent could not be found in the Yellow Pages, again logic and common sense mandates the conclusion that the patient would then have been put right. 48 The primary judge did not address these issues and he was in error in not doing so. If he had, he would have had to define the lost opportunity alleged by the respondent as the loss of the chance of obtaining new initial patients who had been referred to him by their general practitioners but who were unable to ascertain his telephone number or address from the Yellow Pages and as a consequence had abandoned any idea of seeing the respondent in favour of being referred to some other gynaecologist. To coin a phrase from a quite different legal context, we find such a proposition both far-fetched and fanciful. It is nothing short of speculation. 49 As we have said, the primary judge did not consider any of the issues raised in the preceding paragraphs. He simply made a basic assumption that some proportion of new initial patients as lost to the respondent because they were unable to obtain his details from the Yellow Pages. 50 What his Honour seems to have ignored is the evidence of the respondent himself that all his patients came to him by referral from their general practitioner. As we have observed in [46] above, it was not suggested that those general practitioners were unaware of the respondent's address and telephone number which remained a constant from 1983 until the time of trial. It was not a case of the respondent having moved address or changed telephone numbers. In any event, there was no finding by the primary judge to the effect that the respondent's lost opportunity was in any way related to the inability of general practitioners to ascertain his address and telephone number from the Yellow Pages. On the contrary, the respondent's case and his Honour's findings related to the patients and not to their referring practitioners. 51 As we have noted, the patient figures evidenced in the respondent's records do not support the proposition for which he contended. The figures reveal that the respondent improved his position both in terms of new initial patient numbers as well as growth in those numbers in 2000 and 2001 over the two previous years. As the appellant submits, the respondent might say that he could have done even better had there been no omissions in the Yellow Pages. However, the respondent's patient figures for 2002 when the omissions in the Yellow Pages had been corrected, which reveal that his practice in that year was no better than in 2000 and significantly worse than in 2001, puts the lie to such a contention. We would therefore accept the appellant's submission that any suggestion that the respondent had lost a chance to do "even better" than he did in 2000 and 2001 had the appellant's breaches not occurred, is without substance. The evidence suggests otherwise. No doubt it was for these reasons that the primary judge did not purport to rely on the patient figures when coming to his conclusion that the respondent had sustained a lost opportunity. 52 The simple fact is that when one considers the patient figures over the whole period from 1998 to 2002 (inclusive), the conclusion is inevitable that those figures provide no support for a causal link between the movement in patient numbers in the years 2000 and 2001 and the omission of the relevant line item entries from the Yellow Pages published during that period. 53 The respondent's case on the appeal, there being no notice of contention filed, was confined to upholding the primary judge's decision for the reasons that he gave. In our opinion those reasons failed to disclose any basis upon which his Honour could have been satisfied on the balance of probabilities that the respondent suffered the loss of a chance as a consequence of the appellant's breaches. Logic and common sense, given the manner in which the respondent conducted the case, simply do not support the finding made. His patient survey, which forms the only basis for the primary judge's conclusion, falls well short of supporting a finding, which was implicit in his Honour's conclusion, that a prospective new initial patient who did not find the respondent's details in the Yellow Pages, would have abandoned her general practitioner's referral to the respondent and would have gone elsewhere. 54 Accordingly, in our view the evidence is not such as could possibly justify a finding on the balance of probabilities that the respondent had lost the chance of increasing the rate of growth of his new initial patients during the relevant period which was caused by the failure of the appellant to include the relevant line item entries in the 2000 and 2001 Penrith Yellow Pages. 55 In Daniels v Anderson (1995) 37 NSWLR 438 at 530-1, Clarke and Sheller JJA (with whom Powell JA agreed on this issue) after analysing in detail the relevant High Court authorities concerning the loss of a chance, concluded: "Accordingly, the issue of causation should be approached upon the basis of proof upon the balance of probabilities with the qualification that an assessment of whether the chance which is said to have been lost had a value is to be made upon the possibilities or probabilities of the case. For this reason it is appropriate to consider initially the question of whether a chance was lost as a consequence of the breaches of duty and in the event that an affirmative answer is given to that question to defer consideration of the value issue which should be dealt with in determining whether, and if so what damages are payable." 56 It follows that the first question to be asked is whether the respondent lost a chance as a consequence of the appellant's breaches. For the reasons we have given, in our opinion the answer to that question is in the negative. No causal link has been established. On that ground alone the primary judge's decision must be set aside. 57 The foregoing notwithstanding, the value of the lost chance is required to be ascertained by reference to the degree of probabilities or possibilities. The primary judge has, in our opinion, offered no sound basis upon which he could have assessed the value of that loss in the sum of $25,000. As the appellant submits, nowhere in his Honour's judgment is there a reasoned assessment of the value of the lost opportunity which his Honour found. It is apparent that the figure of $25,000 was plucked from the air and was no more than a guess. Even on the basis of possibility rather than probability, that assessment cannot stand.

Conclusion 58 In our opinion, it is plain that the primary judge had no proper basis for finding that the respondent lost the opportunity or chance of increasing the rate of growth of his new initial patients or that any such loss was caused by the appellant's breaches. Furthermore, no basis existed, nor was one articulated in an understandable manner, which could support the finding that the value of that loss was $25,000. 59 We therefore make the following- orders:

(2) Set aside the verdict and orders of Delaney DCJ entered and made on 24 October 2003 and in lieu thereof enter judgment for the appellant.

(3) Order that the respondent pay the appellant's costs of the proceedings in the District Court and of the summons for leave to appeal and the appeal but to have with respect to the latter a certificate under the Suitor's Fund Act 1951, if otherwise qualified. **********

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At a glance

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Before

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Judgment (32 paragraphs)

Parties

Cases Cited (4)

Cited By (3)