Shoal Bay Beach Constructions No. 1 Pty Ltd v Mark Hickey & the persons listed in Schedule A to the Notice of Appeal trading as Sparke Helmore

Court of Appeal (NSW)|2022-06-21|Before: Gleeson JA, Leeming JA, White JA, Adamson J

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] In or around February 2014, Shoal Bay Beach No 1 Pty Ltd, a property developer engaged in the construction of a residential development in Shoal Bay ("the Developer"), retained law firm Sparke Helmore to advise and assist it in the sale of off-the-plan units in the development. The respondents/cross-appellants were partners of Sparke Helmore. Following the Developer's winding up in insolvency on 8 June 2018, the appellant/cross-respondent obtained an assignment of the Developer's right to sue Sparke Helmore for what was alleged to be professional negligence and/or breach of contract. In the course of selling the units, the Developer entered into two contracts: one for the sale of lot 52 in the development to a Mr and Mrs Forbes, executed on 6 August 2015; the other for the sale of lot 50 in the development to another Mrs Forbes, executed on 7 August 2015. As was standard in the contracts for sale used by the Developer, clause 42.2 entitled either the vendor or the purchaser to rescind the contract by written notice if certain conditions precedent to completion were not satisfied by the "Registration Date" (being, ordinarily, twelve months from the "Contract Date"). Clause 43 of the contract enabled the Developer to extend the Registration Date upon giving one month's notice to an affected purchaser, if any such extension was for a reason enumerated in the clause. On a number of occasions, Sparke Helmore had advised the Developer that, should it wish to exercise its rights under clause 43 of the contract, it would be required to give affected purchasers at least one month's written notice. Sparke Helmore provided numerous schedules setting out the Registration Dates for the contracts. Following a series of construction delays, the Developer was not in a position to complete by the Registration Date for either lot 52 or lot 50 (being, respectively, 6 August 2016 and 7 August 2016). Nor had the Developer, as required by clause 43 of the contracts, given the purchaser(s) of either lot adequate notice of any proposed extension to the Registration Date. Each purchaser subsequently rescinded the relevant contract for sale. At trial, it was contended by the appellant that that was due to negligence on the part of Sparke Helmore, such negligence consisting of a failure to alert the Developer to the impending deadlines for the exercise of its rights under clause 43 or to seek instructions before the dates for giving notices of extension arrived. The cross-respondent filed a notice of contention claiming that the primary judge should have found that Sparke Helmore had been instructed to seek instructions weekly from the Developer and separately had been instructed to negotiate an extension of time with all purchasers. The primary judge found that Sparke Helmore had been negligent, and had breached a term implied in its retainer to exercise due care and skill, in failing to alert the Developer to the imminent expiry of the period within which the Registration Dates could be extended. The primary judge awarded the appellant $258,598.40 in damages, such award having been reduced to reflect her Honour's finding that the Developer had been contributorily negligent (assessed at 30%) in the events leading to the rescission of the sale contracts. The primary judge also declined to award costs, in circumstances where the quantum of damages received fell well within the jurisdictional limits of the District Court of New South Wales. On the appellant's appeal, the issues before the Court were: (i) Whether the primary judge had erred in reducing the appellant's award of damages on the basis that the Developer had been contributorily negligent; (ii) Whether the primary judge had erred in declining to award interest on the appellant's award of damages at rates of between 11.95% and 12.95% per annum, to reflect the Developer's inability to apply the proceeds of sale from lots 52 and 50 to certain loans which it had taken out to fund the development; and (iii) Whether the primary judge had erred in declining to make an order as to the costs of the proceedings. On the respondents' cross-appeal, the issues before the Court were: (iv) Whether, as the appellant/cross-respondent contended, the primary judge's decision should be upheld on the ground that Sparke Helmore had been instructed to contact the Developer weekly to seek instructions and to negotiate an extension of time with all purchasers; (v) Whether the primary judge had erred in finding that Sparke Helmore, by failing to advise the Developer of the impending lapse of its rights under clause 43, was negligent, in circumstances where it was said that the breach alleged fell outside of the scope of the retainer and amounted merely to a failure to reiterate advice previously imparted to a client; (vi) Whether the primary judge had erred in not finding that, even if Sparke Helmore had repeated its prior advice to the Developer, it would not have prevented the relevant purchasers from rescinding their contracts; and (vii) Whether, on the assumption that Sparke Helmore had breached its duty of care and/or contractual obligations, the primary judge had erred in assessing the appellant's contributory negligence at only 30%. The Court (White JA, Gleeson and Leeming JJA agreeing), dismissing the appeal with costs and allowing the cross-appeal, held: As to issue (iv) (1) It was not open to the appellant to rely on its notice of contention on the cross-appeal as the issues raised by it had not been pleaded, the parties made forensic decisions not to call witnesses, and the course of the trial might have been different had those issues been pleaded: [2] (Gleeson JA), [7] (Leeming JA); [70]-[71] (White JA). As to issue (v) (2) The primary judge's conclusion that Sparke Helmore had breached its duty to advise and to exercise due care and skill was erroneous as the client had been repeatedly advised of the impending Registration Dates and the time limits within which the right to extend Registration Dates subsisted. While Sparke Helmore had been expressly instructed to negotiate and advise on the extension of contracts the Registration Dates of which fell in June and July 2016, the evidence did not support a finding that it was obliged to go beyond the Developer's express instructions, so as to negotiate and advise on all pending contracts for the sale of units: [1] (Gleeson JA), [3]-[5] (Leeming JA), [75]-[81] (White JA). Groom v Crocker [1939] 1 KB 194; Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a Firm) [1979] Ch 384; Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374, discussed. (3) In any event, the repeated provision of advice to the Developer, which, through Mr Mirels, confirmed its understanding of the operation of clause 43 on its right to extend a contract's Registration Date was inconsistent with the primary judge's conclusion that Sparke Helmore ought to have reiterated its advice closer to the Registration Dates for lots 52 and 50. A solicitor is not generally obliged to repeat advice previously given to a client, or to advise on what a client already knows: [1] (Gleeson JA), [3] (Leeming JA), [84]-[90] (White JA). Yager v Fishman & Co and Teff & Teff [1944] 1 All ER 552; Fitzwood Pty Ltd, Unique Goal Pty Ltd (in liq) [2001] FCA 1628; (2001) 188 ALR 566; Capebay Holdings Pty Ltd v Sands [2002] WASC 287; Scottsdale Homes Pty Ltd v Gemkip Pty Ltd [2008] QSC 326; Nigam v Harm (No 2) [2011] WASCA 221, cited. R J Jackson QC & J L Powell (General Editors), Jackson & Powell on Professional Negligence (3rd ed, 1992, Sweet & Maxwell) par [4-106], approved. As to issue (vi) per White JA (4) The primary judge did not err in finding that, had notices attempting to extend the Registration Dates been served in time, there was no real possibility that the purchasers of lots 52 and 50 would seek to rescind their contracts on alternative bases, or to object to the validity of the notices: [92]-[94] (White JA). As to issue (i) and (vii) per White JA; Gleeson and Leeming JJA not deciding (6) On the assumption that Sparke Helmore were liable in negligence in not repeating its advice or seeking instructions, the primary judge erred in assessing the Developer's contributory negligence at 30%. Instead, the proper assessment of contributory negligence on the evidence before the Court rests at 80%: [95]-[96] (White JA). (5) Given the Court's findings as to the respondent's liability on the cross-appeal, it is unnecessary to express views on the finding of contributory negligence made by the primary judge: [2] (Gleeson JA), [7] (Leeming JA). As to issues (ii) and (iii) (7) Given the success of the cross-appeal, other grounds of appeal advanced by the appellant do not require consideration.

Judgment

GLEESON JA: I agree with the orders proposed by White JA for the reasons his Honour gives.
Given that the cross-appeal by Sparke Helmore has been upheld, the appeal by the Developer challenging, among others, the finding of contributory negligence does not arise. I refrain from expressing a view on this contingent issue because it depends on the making of factual findings which are inconsistent with the outcome of the cross-appeal, including, the finding sought by the Developer in its notice of contention on the cross-appeal that the Developer had instructed Sparke Helmore to contact the Developer weekly to ascertain which contracts should be extended by agreement or notice. For the reasons given by White JA at [70]-[71], that contention should be rejected because the Developer's "weekly" instruction case on appeal, had not been pleaded or run at trial.
LEEMING JA: I agree with White JA that the cross-appeal should be allowed on the basis that there was no breach of duty for the reasons his Honour gives. I also agree with White JA for the reasons he gives it is not open to the appellant to seek to raise an alternative case on appeal. Because this Court has reached a different conclusion from the primary judge on the issue of breach, I provide the following (which presupposes familiarity with the White JA's reasons for judgment) by way of elaboration.
The appellants placed weight upon the instructions said to have been given on 22 March 2016. The direct evidence of this is a file note taken by Ms Murray and her unchallenged recollection of what was said, which White JA has reproduced. A fair reading does not convey any instruction to seek to negotiate or alternatively extend any contracts with sunset dates expiring after July 2016. The records of that telephone conversation must be construed in light of (a) the fact that Sparke Helmore had repeatedly explained that in order to exercise the contractual right of extension, notice had to be given a month before the completion date, and (b) the flurry of activity on 26 and 29 February - only three weeks earlier - in relation to the first two contracts to reach expiry. The only business conducted by the cross-respondent was the development and sale of this building. There is no reason to doubt that the development and sale of the building was a large component of the daily activities of the people involved, Messrs Mastronardo and Gazzard and Mirels.
In the absence of any instruction, it was submitted that it was necessary for Sparke Helmore in order to discharge its duty to act with reasonable care and diligence to contact its client - again - reiterating that the August contracts needed to be renegotiated or extended contractually.
Sparke Helmore submitted that the breach found by the primary judge at [183] (which White JA has reproduced) was outside the pleadings, and that this was a matter of some significance, having regard to the decision made on the second day of the hearing not to call Ms Murray. But assuming it was open, this Court was in the same position as the primary judge in determining the question of breach, a question which had been litigated without adducing any expert evidence. As White JA explains in detail, I do not think breach was made out. I would add that the decision whether to renegotiate the contracts was not black and white. It was a matter of business judgment, turning upon the true value of the bundle of rights represented by the contracts entered into "off the plan", and the perceived value in the marketplace, which itself would be impacted in the event that there was unilateral extension pursuant to the contractual rights. The fact that one contract (No 40) sold to the Arlottas was in fact resold at a profit, as her Honour noted at [175], illustrates that the issue was one of business judgment. It was not negligent for Sparke Helmore not to remind the client of the need to make that decision.
The conclusion that the cross-appeal must be allowed entails that the appeal against the damages awarded must be dismissed. It is unnecessary to consider the challenges to other matters, including contributory negligence which necessarily turns on findings contrary to the view taken in this Court as to breach. I agree with the orders proposed by White JA.
WHITE JA: This is an appeal and cross-appeal from orders of the Common Law Division (Adamson J) of 26 November 2021 in which judgment was given in favour of the appellant against the respondents in the sum of $285,598.40. Those orders followed the publication of her Honour's reasons for so deciding on 19 November 2021 (Shoal Bay Beach Constructions No. 1 Pty Ltd v Mark Hickey and the persons listed in Schedule A to this Statement of Claim trading as at all material times Sparke Helmore (No 5) [2021] NSWSC 1499).
At the relevant time, the respondents were partners in a firm of solicitors trading under the name of Sparke Helmore. They were retained by a property developer, Shoal Bay Beach No.1 Pty Ltd, ("the Developer"), to provide legal services in connection with the construction and sale of units on land owned by the Developer in Shoal Bay. The Developer was wound up in insolvency by order of the Federal Court on 8 June 2018. On 13 March 2019, its liquidator assigned to the appellant the Developer's interest in any claims available to the Developer, including any claim against Sparke Helmore.
The Developer had entered into numerous contracts for the sale of units off the plan. The appellant's claim arose from the rescission of two of those contracts by the purchasers of units called lots 50 and 52. The contract for the sale of lot 52 was entered into by the Developer as vendor and a Mr and Mrs Forbes as purchasers on 6 August 2015. A contract for the sale of lot 50 was entered into between the Developer as vendor and a Mrs Madeleine Forbes (Mr Forbes' mother) as purchaser on 7 August 2015. Each contract provided either party with a right of rescission if conditions precedent to completion had not been satisfied before the "Registration Date". The Registration Date was 12 months from the Contract Date.
However, in certain circumstances, the Developer had the right to extend the Registration Date, provided it gave notice at least one month prior to the Registration Date (cl 43, see below at [21]). The appellant alleged that Sparke Helmore failed to advise the Developer that its right to extend the Registration Date was only exercisable a "minimum of one month prior to the Registration Date", and that the purchasers could elect to rescind their contracts if the right were not exercised within this period. It alleged that Sparke Helmore failed to advise and seek instructions on those matters and, as a result, the purchasers, as they were entitled to do, rescinded the contracts. The appellant claimed that, in so failing to advise and seek instructions from the Developer on those matters, Sparke Helmore had breached its duty of care and its contractual duty to exercise reasonable care and skill. The primary judge upheld this claim, holding that Sparke Helmore ought to have sought instructions from the Developer prior to 6 July 2016 about its intentions with respect to the contracts to ascertain whether they should send extension of time notices to the purchasers' solicitors (at [183]). Her Honour found that the Developer was contributorily negligent and reduced the damages that would otherwise have been awarded by 30% (at [195]).
The appellant appeals against the reduction of damages on account of the finding of contributory negligence, which it says was erroneous. It also appeals against the judge's assessment of damages in not awarding, as a component of damages, interest that it incurred at rates of not less than 11.95% and 12.95% per annum (applicable to different periods) on borrowings which would have been reduced had the sale of lots 50 and 52 proceeded to completion.
Because the amount of the judgment fell well within the jurisdictional limits of the District Court, the primary judge made no order as to the costs of the proceedings (Shoal Bay Beach Constructions No. 1 Pty Ltd v Mark Hickey and the persons listed in Schedule A to this Statement of Claim trading as at all material times Sparke Helmore (No 6) [2021] NSWSC 1597). The appellant appeals from her Honour's order that there be no order as to costs of the proceedings.
The respondents cross-appeal from the finding of negligence and breach of contract. They contend that their retainer was limited to undertaking work pursuant to express instructions from the Developer from time to time, and that the acts and omissions alleged to constitute a breach of their retainer fell outside the scope of the retainer. They also contend that the appellant's claim should properly be characterised as a failure to remind a client of advice previously given and that they were under no such duty to reiterate it. They contend that on numerous occasions they advised the Developer as to when the Developer was required to give notice extending the Registration Date if it wished to do so and of the consequences of not doing so. They challenge the primary judge's findings that the relevant consultant acting for the Developer at the time, a Mr Mirels, did not understand the effect of the relevant contractual provisions.
The respondents also contend that, had the Developer given an extension notice within time, the notice that would have been given probably would have been challenged by the purchasers, and would not have prevented rescission of the contracts. They contend that the primary judge erred in not discounting any award of damages on account of the contingency that service of the extension of time notice would not have prevented the rescission of contracts.
The respondents also contend that, even if they were negligent, the primary judge ought to have reduced the appellant's damages by more than 30% on account of the Developer's contributory negligence.
Logically, the issues raised on the cross-appeal should be considered first. For the reasons which follow, I would allow the cross-appeal and conclude that the appellant has not shown that Sparke Helmore was negligent in performance of its retainer for the purchase contracts for lots 50 and 52.

The purchase contracts

The contract for the purchase of lot 52 was made on 6 August 2015. The purchase price was $800,000. The completion date was, relevantly, the later of 14 days after the vendor notified the purchasers that all conditions precedent in cl 42.1 had been satisfied, or 14 days after the vendor had served the purchasers with an occupation certificate in relation to the Property (cl 48.1).
The conditions precedent to completion included, relevantly, the registration of the required "Strata Documents" to complete the sale of the property to the purchasers on or before the Registration Date. The Strata Documents meant the strata plan, the by-laws and any necessary s 88B instrument.
Clause 42.2 and 42.3 provided: "42.2 Subject to clause 43, if any of the conditions precedent contained in clause 42.1 are not satisfied on or before the Registration Date, either party may rescind this Contract by written notice to the other party and neither will have any claim against the other except for any antecedent breaches. 42.3 Where the Purchaser rescinds this Contract pursuant to clause 42.2, the Purchaser must serve the Vendor a valid written notice of rescission not later than seven (7) days after the Registration Date or Extended Registration Date, as the case may be, time of the essence. If the Purchaser does not rescind within that time then the right of rescission lapses immediately."
Clause 43 provided: "43 Extension of time for registration 43.1 A minimum of 1 month prior to the Registration Date, and despite any other clause in this Contract, the Vendor may extend the Registration Date by each day the Vendor or the Builder has been delayed by reason of: a. inclement weather or conditions resulting from inclement weather; b. any civil commotion, combination of workmen strikes or lockouts affecting the progress of the Development or affecting the manufacture or supply of materials for the construction of the Property; c. any matter or thing beyond the control of the Vendor including but not limited to a delay in supply to the Vendor or the Builder or a delay experienced by the Vendor in dealing with its consultants or a delay in obtaining any necessary consents, certificates, licences, not limited to any Consents of any kind from Council or other authority or Government Agency or registering the Strata Documents; d. a delay in any Consent required for construction of the Development by Council or other Government Agency; or e. anything else beyond the-Vendor's control. 43.2 A certificate by the Builder in relation to extensions of time under this clause 43 is final, conclusive and binding on the parties. 43.3 Extensions of time under this clause 43 cannot be claimed whereby the Registration Date is extended beyond the Extended Registration Date."
The "Registration Date" was 12 months from the Contract date. The "Extended Registration Date" meant 18 months from the Contract date.
The contract for the purchase of lot 50 was in relevantly identical terms, save that it was entered into on 7 August 2015 and was for a price of $725,000. The Registration Date for lot 52 was 6 August 2016 and for lot 50 was 7 August 2016.

The Retainer

Prior to its retainer, Sparke Helmore submitted a fee proposal in which it said it was "…committed to working closely in partnership with Shoal Bay to provide timely, cost effective, commercially oriented and accessible services…[which] integrated services…are commercially focussed and client-specific". In terms of the actual work to be done, the relevant part of the fee proposal was described as "Acting on Conveyances for Residential Apartments". For this a fee of $1,200 per conveyance was proposed.
There is no challenge to the primary judge's description of Sparke Helmore's retainer. Her Honour said: "[21] In about February 2014, the developer retained the defendant to act as its solicitors for the Shoal Bay development. In its fee proposal, the defendants' firm represented that it "has the requisite technical and commercial skills in the area of strata developments and is considered the leading firm in the [H]unter [r]egion in the provision of legal services in this area." The defendant represented that Mr Hickey would be the partner responsible for the work and that he would be assisted by Andrew Ferguson, Senior Associate. Helen Murray, Special Counsel, took over the day-to-day conduct of the matter from Mr Ferguson in December 2015 and Nicole Faulkner, a paralegal, also performed work on the matter. [22] The defendants' retainer included the following aspects of the development: (1) the acquisition of the property by the developer; (2) the preparation of a master contract for the sale of the units on the property; (3) the preparation of instruments pursuant to s 88B of the Conveyancing Act 1919 (NSW), if required, and the preparation of by-laws for the purposes of the strata scheme for the development, if required; (4) the preparation of individual contracts for the sale of apartments "off the plan" as registered strata lots; (5) the sale of the strata lots to the purchasers; and (6) other matters relating to the development, including the registration of documents. [23] The defendants communicated with the developer orally and by email. On occasion, they copied Mr Mastronardo into the emails but generally they communicated directly with the persons engaged by the developer who are referred to above. In about April 2014, the defendants were instructed to prepare a standard contract for the sale of the lots. They obtained the developer's instructions on matters such as the wording of the contracts from Mr Suttor and Mr Robinson, without reverting to Mr Mastronardo."

The Developer

Mr Adrian Mastronardo was in full control of the Developer. He made all the key decisions. The primary judge found that he was an experienced property developer. The primary judge accepted his evidence that his way of operating was to appoint people who were "very good" at what they did and that he relied on them to do their job. He did not read documents but managed the operation of the Developer by making sure he had the right people in the right place (at [10]). The experts whom Mr Mastronardo engaged included a Mr Geoff Gazzard and a Mr Ian Mirels. Mr Gazzard was an experienced chief financial officer and chief executive officer of a development company called Veritas. Mr Mirels had been a general manager of Veritas until he became chief financial officer of the Johnson Property Group. He reported directly to Mr Mastronardo, who expected him to liaise with Sparke Helmore. The primary judge found that, as far as Mr Mastronardo was concerned, Mr Mirels was the "key player in the contracts". Mr Mastronardo described Mr Mirels' role as being the "manager of the builder, the agent and the sales" (at [14]).
The experts retained by Mr Mastronardo to manage the development were experienced in the property industry. Mr Mirels and Mr Gazzard were chartered accountants and presumably not unintelligent.

Sparke Helmore's advice to the Developer on cl 43

Sparke Helmore had provided advice to a Mr Ben Suttor, another person engaged by Mr Mastronardo, whom the judge said was very experienced in building construction development, when it provided drafts of the standard contracts for sale. At that time, Sparke Helmore summarised the effects of special conditions in cl 43. However, Mr Suttor was not involved later in the administration of the contracts. More relevantly, on 15 December 2014, Mr Mirels sought advice from a senior associate of Sparke Helmore, Mr Andrew Ferguson, in relation to the operation of cl 43. Mr Ferguson had provided a Sales Schedule to Mr Mirels specifying which units were subject to a contract for sale, the dates upon which contracts had been issued, and comments as to what deposits had been paid and any amendments to the standard contracts. The schedule included a column headed "Sunset Date (6 month extension is also available in addition)". Mr Mirels asked Mr Ferguson: "Andrew are those sunset dates with allowable extension? Or are they drop dead dates that buyers can rescind?"
Mr Ferguson replied on the same day, saying that the dates did not include a six month extension. Mr Mirels asked whether "…we automatically get this extension or only under certain circumstances?". Mr Ferguson replied: "Refer to special condition 43 of the Contract regarding extensions. The extension must be notified a minimum of 1 month prior to the Registration Date and the reasons you can delay are set out in 43.1 a to 43.1 e."

Communications between Sparke Helmore and the Developer over extensions of registration dates

On 17 March 2015, Mr Ferguson sent an email to Mr Mirels in which he confirmed Mr Mirels' responses to questions that Mr Ferguson had raised. These included the following: "Question: Will an extension to the dates be needed or is the construction timing OK? Answer: Not yet. Completion expected December 2015. 6 month extension for delays is noted. Noted you need to exercise right to extend one moth (sic) prior to sunset date."
The primary judge, understandably, but incorrectly, interpreted this correspondence as being a question asked by Mr Mirels of Mr Ferguson rather than vice versa (at [30]). (Neither Mr Ferguson nor Mr Mirels gave evidence).
By 23 February 2016, Ms Helen Murray of Sparke Helmore had taken over the conduct of the file. On that day she sent an email to Mr Mirels attaching an updated sale schedule showing the "Sunset Date" relevant to all exchanged contracts. The "Sunset Date" was the same as the "Registration Date". In her email, she stated: "If the vendor wishes to extend the Registration Date in the contracts, special condition 43 applies. This clause requires that a minimum of 1 month prior to the Registration Date (i.e. the Sunset Date) the vendor can extend the Registration Date for any of the following: inclement weather or conditions resulting from Inclement weather; any civil commotion, combination of workmen strikes or lockouts affecting the progress of the Development or affecting the manufacture or supply of materials for the construction of the Property; any matter or thing beyond the control of the Vendor including but not limited to a delay in supply to the Vendor or the Builder or a delay experienced by the Vendor in dealing with its consultants or a delay in obtaining any necessary consents, certificates, licences, not limited to any Consents of any kind from Council or other authority or Government Agency or registering the Strata Documents; a delay in any Consent required for construction of the Development by Council or other Government Agency; or anything else beyond the Vendor's control. The notice must include a certificate by the Builder outlining the reason the extension to the Registration Date is required. From a review of the Sunset Dates, you will need to Issue extension notices to the following purchasers and notices need to be sent 1 month before the dates below..." (Emphasis in original)
There followed a reference to apartment numbers, the names of purchasers, and the "Current Registration Date (Sunset Date)" for contracts whose Registration Date fell in April 2016.
The earliest of the contracts had a Registration Date of 1 April 2016 so that any notice of extension of time would need to have been given by 29 February 2016.
Mr Mirels responded to Ms Murray's email of 23 February 2016 by asking her to call him. It appears from Sparke Helmore's invoice that she had a telephone call with Mr Mirels on the subject of "EOT notice" that day. That evening, Mr Mirels sent an email to Mr Mastronardo copied to Ms Murray in which he said: "Adrian If we can get builder to sign off on delays as per below items in Helens email (inclement weather, strike and then a very broad term or whatever etc) then we can exercise option in contract for sale to extend sunset date. It gets tricky because for example Ian Gordon advised the roof re-design which caused delay according to builder has not been accepted by us as an acceptable delay for LDs so it's not that straight forward. I have asked Greg to please provide a list of delays that doesn't prejudice you with Builtform. I will then send to Helen to draft letter and put purchasers on notice. According to Helen you only get extension for time proven and not an automatic extension for 6 months (Helen by copy please confirm). Helen please can you talk through with Adrian as he might have some ideas."
The background to this was that Mr Mastronardo had terminated the services of the builder originally engaged and was yet to appoint a new builder. Mr Mirels was concerned that a notice claiming an extension of time on the basis of delays beyond the vendor's control could affect its dispute with the builder.
On 25 February 2016, Mr Mirels asked Ms Murray to finalise a letter that he would send to the superintendent (a Mr Todd Corbett) to sign. He advised that "We won't be able to get current builder to sign, however hopefully we will have a new builder on site soon and will ask them for sign off for the upcoming expiring contracts for sale". On the same day, Mr Hastie, a costs consultant and project manager (but not the builder), sent an email to Ms Murray suggesting that delay periods could be justified on the basis of inclement weather, plus one month due to supply delays and two months due to design changes. Later that night, Ms Murray forwarded a draft notice saying: "Someone connected with building needs to add up the actual delay days and insert them into the document. I have plucked the suggested reasons for delay from Greg Hastie's email but they can of course be changed. Days of delay can be up to six months, 182 days."
She provided a draft notice of extension of time as follows: "Notice of Extension of Time Pursuant to clause 43 of the Contract and as the Builder appointed from time to time by the vendor we certify the following delays which permit the vendor to extend the Registration Date as follows: (a) Inclement weather or conditions resulting from inclement weather 85 days; (b) A delay in supply to the vendor or the Builder 30 days; and (c) Matters beyond the vendor's control relating to design and construction changes 61 days. Total days extension 176 days. Date: Building Superintendent Todd Corbett - RPS"
On 29 February 2016, Mr Corbett advised Mr Hastie, Mr Mirels and Ms Murray that, in his opinion, the works had been delayed by 85 days due to inclement weather and by: "Circa 61 days due to matters beyond the vendor's control relating to design and construction changes (eg: Level 5 etc) Or circa 146 days total noting I'm not in receipt of an EOT claim from the Building Contractor for the circa 61 days due to matters beyond the vendor's control relating to design and construction changes (eg: Level 5 etc)."
On 29 February 2016, Mr Corbett, in his capacity as superintendent and Technical Director Quantity Surveying, signed a letter with no addressee stating: "As requested we certify 85 days Extension of Time has been granted for inclement weather or conditions resulting from inclement weather on the abovementioned Development. We trust this information is sufficient for your purposes, however should you require any further details or clarification, please do not hesitate to contact the writer."
A file note prepared by Ms Murray, dated 29 February 2016, reads as follows: "- for anything which is immediate - - do notices to 1st weeks only. Wants to wait for new builder to be appointed then re-asses [sic] position. - ring each week + see if they should be extended!"
By its Notice of Contention, the appellant relies upon the last part of the file note "ring each week + see if they should be extended!". The appellant submits that this was a continuing instruction to Sparke Helmore that not only required it in February and March 2016 to see if notices of extension should be given in respect of contracts whose registration dates were imminent, but also extended to July 2016 in relation to the contracts for the purchase of lots 50 and 52. Neither Mr Mirels nor Ms Murray gave evidence. The respondents submit that that instruction related only to the contracts that had previously been identified with Registration Dates in April in circumstances where there was no current builder and there had been difficulties in obtaining a form of certification.
The appellant did not plead that Sparke Helmore was in breach of its duty of care in not following any instruction given to it. Rather, its pleaded complaint was that Sparke Helmore was in breach of its duty by failing to proffer advice or seek instructions.
On 18 March 2016, Sparke Helmore provided Mr Mirels with an updated sales schedule setting out the Sunset Dates for the contracts. These included lots 52 and 50 showing Sunset Dates of 6 August and 7 August 2016 and noting that "six month extension is also available in addition".
Ms Murray deposed: "31. On or around 22 March 2016 I had a telephone conversation with Mastronardo and Gazzard. I do not recall the time the telephone conversation with Mastronardo and Gazzard took place ... The file note records the following: '22/3/16 Adrian/Geoff Gazzard June-July - get an EOT - $100,000 more - In the next 7 davs no builder on site completion May/June currently ref. [illegible] 31 Dec October answer asap variation of contract benefit of the escalation of price' My file note records information (in a summary form) of what I was told during the phone call by Mastronardo and/or Gazzard. Whilst I no longer have a specific recollection of whether it was Mastronardo or Gazzard speaking on each topic, my recollection of what I was told during the telephone call with the assistance of my file note is that I was told words to the effect: 'Rather than issue extension of time notices under the contracts, we want to negotiate an extension for an agreed period of time with each of the purchasers' 'We will start by negotiating with the contracts that are due for completion in June and July 2016. The purchasers will probably agree because the units are worth $100,000 and they would want the benefit of the increase in value' 'We need to negotiate at the extensions in the next 7 days' 'There is no builder on site at present but we think we can complete in May or June 2016' 'We are currently refinancing' 'We want the extensions to be until 31 December. No, they should be until 31 October' 'Can you draft letters inviting the agreed extension and request answers as soon as possible.'"
On 22 March 2016, Mr Gazzard sent an email to Ms Murray copied to Nicole Faulkner and Mr Mastronardo on the subject of "Extension of sunset date". He wrote: "Hi Helen As discussed please find attached. I have highlighted all contracts to expire before the end of July. If you could please prepare the letter to send to these buyers requesting them to extend the sunset date until the end of October using the wording re non escalation as discussed with Adrian."
Lots 50 and 52 had a Sunset Date in August 2016 not July 2016. Mr Gazzard did not ask Ms Murray to prepare a letter to send to the purchasers of those lots requesting an extension of the Registration Date for their contracts.
On 24 March 2016, Sparke Helmore sent letters to purchasers of units whose Registration Dates fell in June or July 2016 advising that they were instructed that the vendor would not achieve completion of the project by the Registration Date, and whilst the vendor was able to make an extension of time claim pursuant to cl 43 of the Contract, it preferred to vary the Registration Date to a new Registration Date of 31 October 2016. Sparke Helmore sought the purchasers' instructions.
On 29 March 2016, Ms Murray sent an email to Mr Gazzard attaching a copy of the special conditions of contract and quoting cl 42.3. She advised that if the purchaser did not rescind under that clause within 7 days after the expiry of the Registration Date, then the purchaser's right to rescind lapsed.
On 13 April 2016, Ms Faulkner, a paralegal employed by Sparke Helmore, sent an email to Mr Gazzard attaching an up-to-date list "regarding extension letters". The list recorded that agreement to extensions up to 31 October 2016 had been reached with six of the nine purchasers with Sunset Dates in 2016 but there were three purchasers whose responses were still awaited. These were for units 204 (Gough), 309 (Potter) and 406 (Walenjude Pty Ltd).
On 4 May 2016, Ms Faulkner advised Mr Mirels that she had spoken with the solicitors for the three purchasers who had not yet responded. She attached a list of the purchasers to whom extension letters had been sent, noting that in the case of two purchasers, the solicitor was expecting confirmation. The attached list shows that the solicitors for two of the purchasers were expecting confirmation of the request for extension and, in the case of the third solicitor, was "obtaining response from client".
On 4 May 2016, Mr Mirels wrote to Ms Faulkner thanking her for the update and asking: "What's the legal position with respect to the 2 that haven't elected to extend? Are they locked in or are they still able to get out of the contract?"
The primary judge observed (at [96]) that the evidence did not reveal Ms Faulkner's response to that question. In fact it did. On 1 June 2016, she sent a revised list to Mr Mirels which listed all of the contracts for sale, not only those with Registration Dates in June or July 2016. Relevantly, the list showed that, in the case of the three purchasers who had not responded by 4 May 2016, the Sunset Date had been extended to 31 October 2016, evidently by agreement.
On 31 May 2016, the real estate agent acting on the sales of units sent an advice to the purchasers, including the Forbes, that he had received from Mr Mastronardo, who had written: "As we are nearing completion of construction I am pleased to advise that our new builder is progressing really well and we are expecting construction completion to be end of June or early July. Please take this opportunity to let family and friends know that there are only 11 units left and they can still secure a unit now at the current prices. On completion there will be another price increase."
On 31 May 2016, Ms Faulkner provided an updated schedule of contracts which again recorded the Sunset Dates for Lots 52 and 50.
Ms Murray went on annual leave from 6 June to 7 July 2016. The appellant submitted that, while she was away, Sparke Helmore dropped the ball.
None of Mr Mirels, Mr Gazzard, Ms Murray, or Ms Faulkner gave evidence. So far as the documentary record reveals, no instructions were given to Sparke Helmore to issue letters to the Forbes requesting an extension of the Registration Dates for lots 50 and 52, or to prepare notices under cl 43 for the Developer to extend the Registration Dates. Nor was evidence adduced as to whether the dispute with the previous builder would or might have been prejudiced by the service of any such notice that would attribute the delay in completion to inclement weather or other delays beyond the vendor's control. Sparke Helmore did not seek instructions on these matters.
6 and 7 July 2016 came and went without the Developer serving a notice under cl 43.
On 14 July 2016, Mr Gazzard sent an email to Ms Faulkner copied to Ms Murray, Mr Mastronardo, and Mr Mirels saying: "We are expecting to obtain OC within 4 weeks. Registration will be after that (l am told up to 4 weeks). Can you please check the sunset dates on the attached spreadsheet and advise if they are correct? I note some are expiring in August/September if they are in fact correct - please check. What does this mean if they are correct? Please treat as urgent."
The attached spreadsheet included lots 52 and 50, and showed Sunset Dates of 6 August and 7 August 2016.
On 15 July 2016, Ms Murray sent an email to Mr Gazzard recommending that the "same Extension of Time Notices served earlier are now served on those purchasers with July, August and September Registration Dates".
On the same day Mr Gazzard advised Ms Murray that he had spoken with Mr Mastronardo and asked that she issue the notices.
On 16 July 2016, Sparke Helmore served notices on the solicitors for the purchasers of lots 50 and 52, attaching a notice signed by Mr Maruzza of Fortis Development Construction Co certifying delays to the project of 146 days.
The notices were not served within the time prescribed by cl 43. That objection was taken by the purchasers. The purchasers duly rescinded.

Communications with the purchasers over delayed completion

On 29 March 2016, Mr Schmarr, the real estate agent acting for Mr Mastronardo, advised Mr Forbes that the projected construction completion date would be 30 June 2016, and that the builder was being replaced. Mr Forbes said that this sounded like bad news and asked a number of questions about the new builder, including whether the certification process would carry over from the previous builder and how the builder's insurance cover would work. He also complained that he had already made arrangements for the removal of goods from storage with a view to moving in.
On 30 March 2016, Mr Mastronardo wrote to Mr Schmarr saying: "I see the problem with updates. I think in future we don't tell them nothing they have contracts exchange [sic] and we just stick to the contract, if they expire then we can resell them for more i guess."
This email was copied to Mr Mirels.

Claim not pressed

At trial, the appellant maintained a claim that Sparke Helmore was liable for costs it incurred and for which it was held to be liable in litigating the purchasers' claims that they had validly rescinded the contracts. The primary judge rejected that claim and there is no appeal from that finding.
The primary judge accurately summarised the appellant's principal claim as being that Sparke Helmore failed to alert the developer as to the time by which valid Extension of Time Notices for lots 50 and 52 had to be served to extend the Registration Dates validly, failing which the purchasers would have a right to rescind (at [160(1)]).

Notice of Contention

On appeal, the appellant contended that the primary judge should have found that, on or about 29 February 2016, Sparke Helmore was instructed to contact the Developer weekly to ascertain which contracts with Registration Dates in 2016 should be extended by agreement or notice, that they failed to do so, but had they done so, they would have been instructed to extend the Registration Dates in respect of lots 50 and 52 before 6 July 2016. It also contended that the primary judge should have found that, on 22 March 2016, Ms Murray was instructed to negotiate an extension for an agreed period of time with "each of the purchasers", meaning, according to the appellant, with all purchasers including purchasers of lots 50 and 52, but failed to do so. (It did not rely on Mr Mirels' instructions to Mr Ferguson of 17 March 2015 that "you need to extend one month prior to sunset date" (see [30] above).)
The primary judge did not deal with these contentions. This was because no such case had been pleaded. At trial, the parties took forensic decisions as to the calling of witnesses. This led to Ms Murray's affidavit (which had been served) not being read by Sparke Helmore, but parts of it being tendered by the appellant. Had the case contended for on appeal, that Sparke Helmore had disobeyed instructions, been pleaded, or even raised in opening submissions, the course of the trial might have been very different. It is not open to the appellant to raise this alternative case on appeal.

Primary Judge's reasoning

The primary judge concluded: "[183] I am satisfied that the defendants were in breach of their retainer and negligent by not alerting the developer to the imminent deadline (6 and 7 July 2016) for the service of notices for the contracts for Lots 50 and 52. It was not a question of a solicitor being required to remind a client of something which had already been imparted. The terms of the contract were not straightforward to non-lawyers; those associated with the developer had already demonstrated that they did not understand how cll 42 and 43 worked; and the updated schedule highlighted the Sunset Date but not the date by which notice of extension was required to be given. Reasonable care required the defendants to seek instructions from the developer prior to 6 July 2016 about its intentions with respect to the contracts to ascertain whether the defendants ought send extension of time notices to the purchasers' solicitors."
In reaching this conclusion the primary judge found that, leading up to early July 2016: "[168]… (1) in March or April 2016, the developer had managed to engage a new builder, Fortis, which was expected to complete the construction work for the development of the property; (2) in early 2016, the developer had been able to refinance the project and wanted to keep all contracts on foot; (3) there had been a number of slippages in the date predicted for Practical Completion which had been estimated, variously, to occur in December 2015 (in an email dated 17 March 2015); "January/February 2016" (in the update to purchasers sent on 27 October 2015); "a lot later than expected" (in an email dated 18 February 2016); May or June 2016 (communicated orally to the defendants on 22 March 2016); and by 31 October 2016, which was the date which had been agreed with purchasers whose contracts had Registration Dates in June and July 2016; (4) on 29 February 2016, the developer who was hoping that the new builder would certify a longer period of delay (of up to 176 days) instructed the defendants to send Mr Corbett's notice (which certified a delay in works of 61 days) only "for anything which is immediate" and to "ring each week" to see if contracts should be extended; (5) on 16 March 2016, Mr Maruzza, who subsequently became the builder, certified a delay of 146 days; (6) the developer had instructed the defendants to serve extension notices for contracts with Sunset Dates in April and May 2016; (7) on 22 March 2016, the developer had instructed the defendants to negotiate extensions (as opposed to sending Extension of Time notices) of the Registration Date to 31 October 2016 for contracts for the sale of Lots 4, 9, 15, 19, 30, 32, 33, 39 and 43, which had Sunset Dates in June and July 2016 and had been extremely anxious to ascertain from the defendants, on a daily basis, which purchasers in that category had agreed to such extensions; (8) on 4 May 2016, Mr Mirels wanted to know (and asked the defendants to tell him) what the legal position was with the (then) two purchasers with contracts with Sunset Dates in May and June 2016 who had not yet agreed to the extension of time (which would have put the defendants on notice that Mr Mirels did not fully appreciate the import of cll 42 and 43 of the contracts for sale); and (9) if notice to extend the Registration Date was not given by 6 July 2016 (for Lot 52) and 7 July 2016 (for Lot 50), the purchasers would have an automatic entitlement to rescind the contracts within seven days of 6 August 2016 (for Lot 52) and 7 August 2016 (for Lot 50), and that, if the right was exercised, the defendants would be obliged to return the deposit."
The primary judge also found that Mr Mirels was the main contact point for Sparke Helmore concerning the contracts and: "[170] It is plain from Mr Mirels' email of 15 December 2014 (extracted above), that he did not appreciate the effect of cll 42 and 43 in that he did not know whether the developer was entitled to an extension irrespective of the circumstances. Mr Ferguson referred him to cl 43, which he summarised and attached to the email. Mr Mirels asked him on 17 March 2015 whether an extension to the dates would be needed (a matter of which Mr Mirels, if he had appreciated the import of the clauses, would have been in a better position to answer)."

Consideration

The primary judge's finding at [170] informed the primary judge's conclusion that Mr Mirels did not understand how cll 42 and 43 worked (although that was not the only basis for that conclusion). As Sparke Helmore submits, the primary judge misread the email of 17 March 2015. Contrary to the judge's finding at [30], it was Mr Ferguson of Sparke Helmore who asked Mr Mirels whether an extension to dates would be needed. It was Mr Mirels who responded by saying that an extension to the dates was not yet needed, that completion was expected in December 2015, and that the "six month extension for delays is noted. Noted you need to exercise right to extend one [month] prior to Sunset Date". It was Mr Mirels who "noted you need to exercise right to extend one [month] prior to Sunset Date".
The primary judge also found (at [174]) that "for all contracts with Sunset Dates in 2016, the Developer had given instructions to the defendants to try to extend the Registration Date by agreement, or to extend it by notice".
Contrary to this finding, the primary judge had earlier found (at [104]): "[104] No instructions were given to the defendants prior to 6 July 2016 to give notice to the purchasers to extend the Registration Date for Lot 52 or prior to 7 July 2016 to give notice to the purchaser to extend the Registration Date for Lot 50…"
These findings both relate to Ms Murray's deposition of her conversation on 22 March 2016 with Mr Mastronardo or Mr Gazzard or both of them (see [45] above). As none of the parties to that conversation gave evidence, this Court is in as good a position as the primary judge in determining what instructions were given. Ms Murray's evidence was that the only instructions given were that Sparke Helmore should draft letters inviting agreement to an extension of time for completion of the contracts to 31 October 2016 to those purchasers whose contracts were due for completion in June and July 2016. Either Mr Mastronardo or Mr Gazzard also said that they wanted to negotiate an extension for an agreed period with each of the purchasers, but their only instructions to Sparke Helmore were to prepare letters for purchasers whose contracts were due to complete in June or July 2016.
The primary judge was correct in her finding at [104] that no instructions were given to Sparke Helmore prior to 6 July 2016 to give notice to the purchasers to extend the Registration Dates for lots 50 or 52 prior to 6 or 7 July 2016, but incorrect in her contrary finding at [174] that instructions had been given to Sparke Helmore to try to extend the Registration Date by agreement or otherwise by notice for all contracts with Sunset Dates in 2016. But the question remained whether, in exercising due care and skill, Sparke Helmore ought to have sought instructions in relation to contracts for the sale of lots 50 and 52 where, if notice of extension of time were to be given, notice would have had to be given before 6 or 7 July 2016.
In Groom v Crocker [1939] 1 KB 194, Scott LJ said (at 222) of the implied terms in a solicitor's retainer: "The retainer when given puts into operation the normal terms of the contractual relationship, including in particular the duty of the solicitor to protect the client's interest and carry out his instructions in the matters in which the retainer relates, by all proper means. It is an incident of that duty that the solicitor should consult with his client in all questions of doubt which do not fall within the express or implied discretion left him, and should keep the client informed to such an extent as may be reasonably necessary according to the same criteria."
In Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a Firm) [1979] Ch 384, Oliver J said (at 402-3) that the extent of a solicitor's duties depends upon the terms and limits of his or her retainer and any duty of care to be implied must be related to what he or she is instructed to do. His Lordship warned against a court imposing upon solicitors, or other professionals, duties which went beyond the scope of what they were requested and undertook to do, and that the test was not whether a "…particularly meticulous and conscientious practitioner would, in his client's general interests, take it upon himself to pursue a line of inquiry beyond the strict limits comprehended by his instructions" (at 403). Similar observations were made by McPherson AJA in Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374 at [364].
The appellant pleaded: "26. Following 6 August 2015 in respect of the Lot 52 Contract, and 7 August 2015 in respect of the Lot 50 Contract, and at all material times thereafter, Sparke knew each of the following: (a) that under clause 42 of each of the Contracts, the Purchasers had the right to rescind the Contract if the Stata Documents (as defined in clause 31 of each of the Contracts) were not registered on or before the Registration Date; (b) that the Registration Date under the Lot 52 Contract was 6 August 2016; (c) that the Registration Date under the Lot 50 Contract was 7 August 2016; (d) that the Developer had the right to extend the Registration Date under each of the Contracts, exercisable 'a minimum of 1 month prior to the Registration Date'; (e) that as at 5 July 2016 in respect of the Lot 52 Contract, and as at 6 July 2016 in respect of the Lot 50 Contract, the Strata Documents (as defined in clause 31 of each of the Contracts); (i) had not been registered at the LPI; (ii) were not ready to be lodged for registration at the LPI by Sparke; and (f) that in the absence of the Developer exercising its right to extend the Registration Date pursuant to clause 43 of each of the Contracts on or prior to 5 July 2016 in respect of the Lot 52 Contract, and on or prior to 6 July 2016 in respect of the Lot 50 Contract, the Purchasers could elect to rescind their Contract. 27. Sparke had a duty to advise and seek instructions from the Developer of each of the matters pleaded in paragraph 26 above within time to allow the Developer to validly exercise its rights to extend the Registration date in respect of each of the Contracts."
Sparke Helmore had advised the Developer of each of the matters alleged in para 26(a)-(d), and of the purchaser's right to rescind if the Developer had not exercised its right to extend the Registration Date pursuant to cl 43 as alleged in para 26(f). The Developer was aware of the matters pleaded in para 26(e).
Sparke Helmore relied upon what has been called a "general rule" that a solicitor is not negligent in failing to remind a client of advice already given or to advise the client of what the client already knows (Yager v Fishman & Co and Teff & Teff [1944] 1 All ER 552 at 558; Scottsdale Homes Pty Ltd v Gemkip Pty Ltd [2008] QSC 326 at [93]-[101]; Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) [2001] FCA 1628 at [175]; (2001) 188 ALR 566; Capebay Holdings Pty Ltd v Sands [2002] WASC 287 at [7], [97]-[98]; Nigam v Harm (No 2) [2011] WASCA 221 at [139]-[142]).
The position is as expressed in R J Jackson QC & J L Powell (General Editors), Jackson & Powell on Professional Negligence (3rd ed, 1992, Sweet & Maxwell) at par [4-106]: "As a general rule there is no duty on a solicitor to remind a client of advice once it has been given. In West London Observer v Parsons [1] the defendant solicitors acted for lessees. The lease could be renewed if the lessees gave notice on March 25, 1953 and were not, on that date, in breach of covenant. The defendants explained the provisions for renewal both in a letter dated October 1950 and during an interview in April 1951. It was held that the defendants were not negligent in failing to repeat that advice in or shortly before March 1953."
The primary judge rejected Sparke Helmore's reliance on these authorities on the basis that Sparke Helmore was aware that Mr Mirels, who was acting for the Developer, did not appreciate the effect of cll 42 and 43 of the contracts for sale, notwithstanding the advice which he had been given (at [169]-[170], [176]).
Whatever his lack of understanding before receiving Mr Ferguson's email of 15 December 2014 (see [29] above), Mr Mirels could have been in no doubt after receiving that email that a notice of extension would have to be given at least one month prior to the Registration Date. That advice was reiterated on 23 February 2016 (see [32] above). In so far as the primary judge relied upon Mr Ferguson's email of 17 March 2015, her Honour erred in attributing the questions posed to Mr Mirels rather than to Mr Ferguson. Her Honour's error is understandable as, when Mr Mastronardo was asked questions about the email correspondence in cross-examination, counsel for Sparke Helmore also attributed the questions to Mr Mirels. This was an evident mistake because Mr Ferguson's shorter email of 17 March 2015 stated that he was "confirming Mr Mirels' responses to the questions below".
Sparke Helmore was not negligent in failing to remind the Developer of the advice previously given or, what amounts to the same thing, in not seeking instructions prior to 6 and 7 July 2016. On 22 March 2016, Mr Gazzard had instructed Ms Murray to seek to negotiate an extension of the Sunset Date for those contracts with a Registration Date in June and July only (see at [46] above). This instruction was given after Sparke Helmore had provided a schedule on 21 March 2016 of contracts with upcoming Registration Dates. On 1 June 2016, Sparke Helmore provided a similar schedule of the forthcoming Registration Dates. As deposed to by Ms Murray (at [45]), Sparke Helmore was aware of Mr Mastronardo's and/or Mr Gazzard's expressed wish on 22 March 2016 to negotiate an extension for an agreed period of time with "each of the purchasers" and that they would "start by negotiating with the contracts that are due for completion in June and July 2016". Although Sparke Helmore was engaged to negotiate such extensions for contracts due for completion in June and July 2016, there was no reason that the Developer could not itself negotiate extensions. Sparke Helmore was not asked to do so. It was reasonable for Sparke Helmore to proceed on the basis that if the Developer wanted it to negotiate extensions, or to serve a notice of extension, they would be instructed to do so.
The appellant did not rely on the statement in Sparke Helmore's fee proposal that it was "…committed to working closely in partnership with Shoal Bay to provide…commercially orientated and accessible services". The fact that Sparke Helmore promoted itself on the basis that its services were easily accessible, as they had been during the course of the transaction, would support the reasonableness of its expectation that, if its services were sought, instructions would be given.
For these reasons, I would uphold the cross-appeal. It follows that the appeal should be dismissed.

Other Issues

I would add the following in relation to the other issues that were argued.
Sparke Helmore submitted that it should not be concluded that, if it had sought instructions, it would have been instructed to give a notice of extension of time before 6 or 7 July 2016. It submitted that the only Extension of Time Notice that had been prepared had been signed by Mr Maruzza as Managing Director of Fortis Development and Construction Co, which was not the builder at the time he signed the notice.
The notice signed by Mr Maruzza was undated. Fortis was appointed as the builder some time around April 2016. Although a notice issued by the Builder would be conclusive of the matters stated in it, it was not essential to the giving of a notice of extension. The notice of extension issued on 18 July 2016 was rejected by the purchasers of lots 50 and 52 on the basis that it was provided too late, but no objection was otherwise taken to it. When Ms Murray suggested (on 15 July 2016) that Extension of Time Notices be served on purchasers whose completion dates were in July, August and September, the Developer readily agreed.
I would conclude that if Sparke Helmore had sought instructions prior to 6 July 2016, the Developer would have instructed Sparke Helmore to serve notices of extension of time and that the validity of those notices would not have been challenged. The primary judge was not satisfied that there was any real possibility that, had the notices been sent in time, the purchasers would otherwise have objected to the notices or rescinded on an alternative basis (at [201]). I agree with her Honour's conclusion.
If I am wrong in my conclusion that Sparke Helmore was not in breach of its retainer in not repeating its advice or seeking instructions, I would uphold its challenge to the primary judge's finding that the damages for which it is liable should be reduced by one third on account of the Developer's contributory negligence. I would assess the Developer's contributory negligence at 80% rather than 30%. The appellant's challenge to the finding of contributory negligence was based upon its contention that Sparke Helmore was obliged to telephone the Developer weekly to ascertain which contracts should be extended. The appellant relied upon the primary judge's finding at [174] that the Developer had instructed Sparke Helmore to seek to extend the Registration Date of all contracts or otherwise extend the Registration Date by notice. The appellant submitted that, having given that instruction, it was not contributorily negligent in failing to give any further instruction.
However, for the reasons above, I reject the submission that such an instruction was given.
The appellant's challenge to the primary judge's findings on the assessment of damages raises complex questions of fact. The grounds of appeal are that the primary judge erred in failing to find that the funds for lots 50 and 52, had those contracts been completed, would have been applied to reduce the Developer's indebtedness to one or other or both of two lenders called Balanced Securities Ltd and Optima Funding Pty Ltd. The primary judge ordered prejudgment interest at court rates rather than the higher rates applicable under the developer's loans from those lenders. But the appellant could not identify what loss it had established if this ground of appeal were to succeed. It submitted that judgment should be given for it in a sum to be calculated.
The Developer entered into loan agreements with Balanced Securities and Optima Funding on 30 March and 12 August 2015 and a further facility agreement with Optima on 7 July 2017. The interest rates were at 11.95% per annum (Balanced Securities) and 19.75% and 18.95% (Optima) with default rates of 19.95% (Balanced Securities) and 29.75% and 28.95% (Optima). The loan from Balanced Securities was for $13,000,000 and the two facilities provided by Optima were for $1,000,000 and $1,100,000.
These loans were extended. But the facilities were not solely related to the Shoal Bay development. Sparke Helmore submitted that the loan from Balance Securities was reduced to nil in February 2017, being a date relatively contemporaneously with the date on which the contracts for the sale of lots 50 and 52 would have been due for settlement. It pointed to various unexplained matters in relation to the loans provided by Balanced Securities and Optima.
It is unnecessary to decide these matters to dispose of the appeal.
On these findings, the appellant's challenge to the primary judge's costs order does not arise.

Conclusion

For these reasons I propose the following orders: 1. Appeal dismissed with costs. 2. Cross-appeal allowed with costs. 3. Set aside the orders of the court below of 26 November 2021 and 9 December 2021. 4. In lieu thereof, order that the proceedings be dismissed with costs.

Amendments 22 February 2023 - Minor amendment on coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 February 2023

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