Consideration
331I turn now to the application of the principles established by the authorities that have been examined, to determine whether, on the facts that I have found, Mr Chand's loss was caused by the Bank's breach of contract in circumstances that make the Bank legally responsible to compensate Mr Chand for his loss, and whether Mr Chand has failed to take steps reasonably available to him to mitigate the loss that he has suffered.
332The first question to be addressed is whether legal responsibility for causing his own loss should be attributed to Mr Chand because he made a free, deliberate and informed decision to stay in the market, and not to leave it by making a new redemption request of the Bank.
333What is required in this context for a finding that Mr Chand's conduct was relevantly free?
334In one sense Mr Chand was not free, because an effect of the Bank's breach was to subject Mr Chand involuntarily to the need to renew his consideration of the propitious time to redeem his investments. If a person at a party on a riverbank is forcefully thrown into the river, the person does not really have a free choice. If the person tries to swim back to the bank, and drowns, the person will not freely have decided to take that course. On the other hand, if the person decides to swim to the other side of the river, because the party happening there appears more attractive, the person's choice may be free notwithstanding that the person was not given a choice to decide whether or not to swim at all. The fact that the Bank's breach did not give Mr Chand any alternative but to make a new decision, does not of itself exclude a finding that Mr Chand's conduct was free.
335Freedom in this context must require that Mr Chand not be constrained by circumstances to take the course that has caused a prospective loss to become real. It must be entirely a matter within Mr Chand's own choice whether he takes the course that avoids the loss, or the course that causes it.
336There must not only be freedom of choice, but freedom of opportunity. There must be a ready means available for Mr Chand to avoid the loss by some clear action that will lead to a relatively immediate avoidance of the loss, without subjecting Mr Chand to any significant risk or cost that might impinge upon the reality of his freedom of choice.
337In the present case it is clear that Mr Chand had that opportunity, because he could renew his redemption request to the Bank at any time of his choosing. Although his first redemption request miscarried, he could have ensured that any new request was implemented by informing the Bank that it had not complied with his first request.
338Freedom in this sense probably requires that Mr Chand had the opportunity to avoid the loss in its entirety. If Mr Chand only had the opportunity to avoid part of the prospective loss becoming real, it is hard to say that he truly had a free choice. Given the nature of the market, a virtual loss on one day may turn into a potential profit the next. If Mr Chand's actions are considered on a day when redemption would realise a loss, it is hard to say that Mr Chand has a free choice to avoid the balance of his potential loss occurring if he has in mind that if he waits until the next day his virtual loss may disappear. As the reality of the law in practice is hardly ever black and white, it may be that Mr Chand's freedom will exist where the amount of any loss crystallised by a decision to redeem is relatively insignificant.
339In the present case in the period between 25 September 2007 and 13 December 2007 there were many days on which Mr Chand could have redeemed his investments in a way that would have avoided his loss entirely. There were a number of periods in which, to a reasonable degree, recent market values satisfied Mr Chand's objective of redeeming in a rising, or at least buoyant, market. Plainly Mr Chand was not called upon to consider making a new redemption request until he learned that the Bank had not implemented his request. I have found that Mr Chand realised that the Bank had not paid the $1 million into his account a couple of weeks or so after 25 September 2009. The redemption value of Mr Chand's investments remained above $1,034,636.81 until 7 November 2007. I have not accepted Mr Chand's claim that he did not address himself to the possibility that the Bank would not actually implement his redemption request until about 5 November 2007. It has not been possible to decide the precise date when Mr Chand realised that the Bank had not implemented his request. It is likely that, at least for some weeks after he did so, his redemption value was more than it was on 25 September 2009. Mr Chand could not reasonably be expected to have acted immediately to renew his redemption request. However, in the period between, say, 9 October 2007 and 11 November 2007, the redemption value was above or only slightly below the 25 September 2009 figure. In the period between 30 November 2007 and 5 December 2007 Mr Chand's portfolio value was above $1 million, though slightly less than the value at 25 September 2007. The value had risen from an amount of $913,664.49 on 22 November 2007. As, by this time, Mr Chand was clearly monitoring the market again, he must have been aware that market values were trending upwards towards the value that would enable him to redeem without making a loss. Then in the period between 6 and 13 December 2007 his redemption value exceeded the value that would avoid a loss, or virtually so. Those circumstances satisfied the requirements given by Mr Chand for a propitious redemption of his investments.
340While it is not possible to form a definite view as to when Mr Chand was able to determine that he could redeem his investments in a way that would avoid his making a loss, I find that there was sufficient opportunity to do so before mid-December 2012. In that sense I find that Mr Chand was free in making a choice as to whether or not to redeem his investments.
341It is clear that Mr Chand made a deliberate choice. That follows from the evidence contained in Mr Chand's solicitor's letter of 12 February 2009. Mr Chand considered three alternatives. One of them was to quickly renew his redemption request. Another was to stay in the market to see whether prices would rise to October 2007 levels, which would permit Mr Chand to redeem his investments at a time that might yield him a return up to $150,000 more than he would have received if the Bank had acted on his redemption request. Mr Chand deliberately decided to stay in the market in the hope of achieving a better result. That is the natural explanation for the fact that Mr Chand did not redeem his investments in the early part of December 2007, if not earlier.
342Mr Chand also made a deliberate choice at some stage to stay in the market in order to receive the distribution that he expected would be paid in mid-December 2007.
343The next question is whether Mr Chand acted knowingly. It is possible that Mr Chand did not follow the markets closely in the period after 25 September 2007, while he was waiting in the expectation that the Bank would implement his request. It is probable that, when Mr Chand started to become concerned about the delay of the Bank in paying the $1 million into his account, Mr Chand at least renewed his observation of market prices, even if he did not renew his intense examination of the market until a later time. Mr Chand became aware of the higher prices that had existed in the market in October 2007 by no later than at, or soon after, his call to the call centre. At a time that cannot now be identified, he renewed his intense observation of the market in order to decide the likelihood that values would rebound to October 2007 levels, and to be able to choose a new exit point. I am satisfied that Mr Chand had the necessary knowledge of the amount of his redemption value in the period up to mid-December 2007. It may be that Mr Chand became distracted to some extent in the period leading up to Christmas by reason of his employment duties, but I have not accepted that Mr Chand entirely lost sight of changes in his redemption value, or that he entirely missed the opportunity to redeem without loss in early December 2007. Mr Chand did not give direct evidence that he missed that opportunity through ignorance.
344A question may arise as to whether the requirement for knowledge on Mr Chand's part extends beyond knowledge on a day-to-day basis of opportunities to redeem his investments in a way that would avoid his loss entirely, to include some level of knowledge or suspicion of the seriousness of the consequences that might follow from delay on his part. Was it necessary that Mr Chand appreciate that doom was in the offing? As I have noted, it appears from Mr Chand's conduct that he did not fear an imminent collapse in the value of his investments.
345That level of knowledge is in my view not required. Mr Chand's own evidence established that he made his 25 September 2007 redemption request because his understanding of the market caused him to notice circumstances that led him to believe that it was no longer prudent for him to continue his exposure to the high-risk investments that he had chosen. It is significant that Mr Chand knew that his investments were all high-risk, and that he had ignored positive advice from Mr Molesworth to choose different investments if he wanted to invest on a short-time basis. At some time before 25 September 2007 Mr Chand formed an actual appreciation of danger, and that appreciation did not leave him until it became too late.
346These are important considerations because the knowledge that is relevant must be knowledge of the risk that must be avoided. In a different market, perhaps involving experience of consistent increases in value and benign economic circumstances, some different conclusion might be drawn, at least in relation to the urgency of the need for Mr Chand to take an available opportunity to avoid his potential loss becoming real.
347I add that it might be assumed that Mr Chand's loss was some entirely unexpected consequence of the occurrence of the Global Financial Crisis, and that that event was the real economic cause of Mr Chand's loss. The evidence does not justify that assumption, and the issue was not explored. It is not clear whether Mr Chand's experience was common amongst investors, or whether, even though the GFC may have been the trigger of the decline in the value of Mr Chand's investments, the calamity that ensued was a realisation of the significant risks inherent in the investments that Mr Chand had chosen, coupled with the risk that flowed from his exposure to the margin loan agreement.
348Mr Chand's conduct in deciding not to redeem his investments when he could have entirely avoided the loss that he eventually suffered, and to stay in the market in the hope of gaining a better outcome than if the Bank had implemented his redemption request was therefore free, deliberate and knowing in the sense required by Allianz Australia Ltd v Waterbrook. That proposition assumes that I am correct in concluding that the principle enunciated in that case extends beyond the plaintiff embracing an actual, known loss, to the situation where the plaintiff deliberately abandons an opportunity to avoid a prospective loss and adopts a course that maintains the risk.
349Lest there be a further requirement for considering the normative question that was addressed in Wallace v Kam, than the straightforward application of the free, deliberate and knowing test, I would add the following observations. In the present case the promise that the Bank breached was not an obligation that required the Bank to achieve any particular economic result for Mr Chand, and in particular it did not impose on the Bank a positive obligation to ensure that Mr Chand did not suffer loss. The Bank's obligation was ministerial, and it required the Bank to comply with any redemption request irrespective of the reason that Mr Chand had for delivering it. Mr Chand could have had reasons ranging from personal whim to a desire to avoid the consequences of an imminent collapse in the market. That does not mean that the obligation was insignificant, as it was the instrument that permitted Mr Chand to regulate his risk. As I have noted above, the reason why the Bank did not implement the request is not known. It is also not known whether any officers of the Bank consciously appreciated that the Bank had received the redemption request. However, the circumstances should have caused Mr Chand to appreciate, once he knew that the Bank had not implemented his request, that the request may have gone astray, and that the Bank did not know that it was in breach. Whatever the reality was, that was the most probable position. After Mr Chand's call to the call centre, Mr Chand knew that his redemption request was not on the Bank's computer system. It follows that Mr Chand knew that there was a real likelihood that the Bank was not in a position to protect itself from its own breach. A feature of the right to deliver a redemption request to the Bank is that such a request could be delivered at any time, without any relevant cost or inconvenience, and could be delivered repeatedly. The practice adopted by Mr Chand of investing in high-risk investments on a margin loan basis meant that changes in market values on a day-to-day basis could have serious negative consequences to Mr Chand's investment position. A combination of these features, being the ease of renewing a redemption request, and the danger in delaying the making of such a request, is that reasonable and informed commercial people would only expect the Bank to remain liable for the consequences of its breach for a relatively short time after Mr Chand became aware that his investments had not been redeemed. Put another way, a party in the position of the Bank would not reasonably expect to continue to be on risk from its breach for a significant period after the breach became known to Mr Chand, provided Mr Chand had a proper and reasonable opportunity to correct the situation. It was Mr Chand alone who had the practical capacity to achieve that result. Mr Chand could not reasonably have expected the Bank to remain at risk of the consequences of its breach for any significant period, if Mr Chand decided deliberately to stay in the market. In these circumstances the decision that Mr Chand made, in a relatively straightforward way, relieved the Bank of continuing exposure for the consequences of its breach, and effectively reset the original arrangement as between Mr Chand and the Bank, which required Mr Chand to take responsibility for his own decision as to when to leave the market.
350I find that the Bank has established its case that Mr Chand's own actions were the operative cause of his loss, for which he alone should be held responsible.
351I will now consider, alternatively, whether Mr Chand's failure to avoid the loss that he suffered, after the Bank's breach of contract gave rise to that prospective loss, was sufficiently unreasonable, as between himself and the Bank, that Mr Chand "cannot really be said to have incurred [that] loss", to use the words of Heydon JA in Sherson & Associates v Bailey that have been set out above.
352If the principle considered in Allianz Australia Ltd v Waterbrook does not apply unless the plaintiff has freely, deliberately and knowingly embraced an existing, known loss, then the only basis available to the Bank to escape responsibility for Mr Chand's loss because Mr Chand's own conduct justifies that result will be the application of the principles concerning the consequences of the unreasonableness of Mr Chand's conduct.
353However, if I am correct in the findings that I have made above concerning what may be described as the voluntariness of Mr Chand's embracing the continuation of his risk of loss are correct, it would seem to follow directly that Mr Chand's conduct would not pass any applicable test of reasonableness.
354How is the court to determine whether, as between Mr Chand and the Bank, Mr Chand has acted so unreasonably that the Bank should not be held accountable for the consequences in fact of its breach of contract? This is a particular form of normative question. It is necessary to derive the criteria for answering the question from legal principle (Travel Compensation Fund at [29]), and it will be necessary to identify and articulate "an evaluative judgment by reference to 'the purposes and policy of the relevant part of the law'" (Wallace v Kam at [23]).
355It is necessary to start with an "identification of the nature of the risk against which [Mr Chand] sought protection and of the loss [Mr Chand] suffered, considered in the light of the kind of wrongful conduct in which [the Bank] engaged" (Travel Compensation Fund at [35]).
356The source of the Bank's obligation is the contract into which Mr Chand and the Bank entered.
357As already noted, the term of the contract that the Bank breached was not a promise by the Bank to avert the loss that has occurred. It was a promise to implement effectively an instruction by Mr Chand that would allow him to redeem his investments, and extinguish his margin loan obligations, at a time of his own choosing.
358The requirements of reasonable conduct, as between the parties, after the breach of the contract by one of them, should arise from a determination of the objective expectations of reasonable persons in the position of the parties, having regard to their mutual knowledge of the circumstances of each party, in the context of all of the relevant events known, or which ought to have been known, by the parties. The principal objective expectation of the parties to contracts is that the contractual obligations of the parties will faithfully be performed. It is a reality, however, that contractual obligations are not always performed, for reasons ranging from the culpable to the inadvertent, or unavoidable. Parties to contracts will have reasonable objective expectations as to how each party should respond to particular breaches by the other, even if, at the inception of the contract, those expectations are suppressed by optimistic expectations of performance.
359Fundamental objective expectations of parties to contracts extend beyond the expectation of performance, to the expectation that each party will act reasonably to fulfil the other parties' expectation of benefit, that each party will act positively, but only to a reasonable extent, to avoid loss following a breach by one of them, and that even the innocent party will have regard to the interests of the party in default to minimise its own loss for the benefit of both itself, and the defaulting party.
360The requirements of reasonable conduct by an innocent party to a breach of contract by the party in default must flow from an analysis of the terms of the contract, in the context of the circumstances of the breach. This analysis may require (a) the identification of the term breached; (b) the identification of all possible consequences of the breach; (c) consideration of the risk of serious consequences occurring; (d) consideration of the possible severity of those consequences; (e) an ascertainment of the knowledge of the existence of the breach by each party; (f) an analysis of the respective capacities of the parties to take available actions to avert the risk or minimise the consequences; and (f) consideration of the extent to which each party knows that it has the capacity to avert or minimise the consequences, because of an absence of knowledge or means on the part of the other parties to do so. Perhaps other considerations may arise in cases that involve different facts than the present.
361In the present case the term breached required the Bank to carry out ministerial steps that would effect the redemption of Mr Chand's investments, the repayment of his margin loan, and the payment of the balance into his bank account. As the redemption process was Mr Chand's only instrument for terminating his risk to the market, and his consequential risk under his margin loan agreement, any breach of the term had potentially serious consequences.
362If Mr Chand had suffered a loss by reason of a fall in the value of his investments between the time of the breach and the time when Mr Chand became aware of the breach, it is clear that the Bank would have been legally responsible for the consequences. For one thing, the reasonableness or otherwise of Mr Chand's own conduct would not come into consideration, because he would not have had an opportunity to renew his redemption request.
363However, as noted above, a feature of the redemption process is that it is simply and reliably repeatable.
364Further, as it is in the nature of markets that prices fluctuate up and down, it follows that a breach of the obligation to redeem may not necessarily lead to any loss being incurred. There is a clear risk of loss. However, depending upon the circumstances of the market, at least in the short term, there was a possibility that Mr Chand's position would be improved by an opportunity to select a later date to renew his redemption request, just as there was a possibility that he would suffer loss.
365The ease with which Mr Chand could renew his redemption request, after he learned of the Bank's failure to implement his initial request, justifies a conclusion that reasonable persons in the position of Mr Chand and the Bank would expect him to exercise his discretion as to whether, and if so when and in what circumstances, he should renew his redemption request.
366That conclusion is supported by the consideration that the existence of the risk of the market remained constant, and the nature of the risk fluctuated and required monitoring on a continuous basis.
367It was clear as between Mr Chand and the Bank that only Mr Chand was in a position to monitor his investments, and to react to changes in market risk, and market opportunities. The Bank did not provide that service to Mr Chand.
368Further, the right to renew his redemption request was in the discretion of Mr Chand alone. Even if the Bank had discovered the redemption request a short time after 25 September 2007, it would not have been entitled under the contract simply to execute the request without obtaining prior confirmation from Mr Chand. The PDS set out timing requirements for the process of redemption, and did not authorise the Bank to initiate the process at a time not contemplated by the redemption request. If the Bank had learned of its breach, all that it could have done was to bring the breach to the attention of Mr Chand, to seek further instructions, and to hope that Mr Chand would either co-operate in a process of redeeming his investments in a way that avoided loss, or kept it to a minimum, or alternatively that Mr Chand decided to stay in the market and release the Bank from the consequences of its breach.
369In these circumstances the opportunity for Mr Chand's salvation lay entirely in his own hands.
370On any view the Bank could not in these circumstances be on risk indefinitely for legal responsibility for the consequences in fact of its breach of contract, irrespective of what those consequences might be. It seems clear that Mr Chand could not simply stay his hand so that, if market values increased he could redeem at a time of his choice and enjoy the improved return, but look to the Bank to make up any shortfall if market values ultimately fell. Mr Chand could not, by inaction, effectively make the Bank his insurer against the risk of a fall in market value occurring. The essential question must be, not if, but when and in what circumstances, would Mr Chand's conduct have the effect that Mr Chand had, so to speak, reset the arrangement between himself and the Bank so that he had re-assumed the risks that he originally knowingly accepted in making his investments.
371The initial decision that Mr Chand was required to make was whether he would seek to hold the Bank responsible for its breach, and consequently seek to achieve the result that he would have enjoyed if the Bank had acted on his redemption request, or whether he was content with the outcome of the failure of his initial redemption request, so that he would stay in the market and choose a later time for redemption. Because of the continuing, unpredictable nature of the risk, reasonable parties would expect the party in the position of Mr Chand to address the issue positively and make a decision over a reasonably short time. The duration of the reasonable decision-making period would depend upon the circumstances, but once Mr Chand acclimatised himself to the fact that he continued involuntarily to be exposed to the market, and after he had an opportunity to reacquaint himself with developments in the market since he submitted his redemption request, he would be expected to make an election.
372In the present case it may not be necessary to consider the consequences of Mr Chand's failure to advise the Bank of its breach, or to consider whether Mr Chand took too long in making his election as to whether to hold the Bank of the consequences of its breach, or to voluntarily stay in the market at his own risk. The evidence shows that Mr Chand made a deliberate decision to stay in the market for the purpose of attempting to secure the same result as he would have enjoyed if he had submitted his redemption request on a date in October 2007, rather than on 25 September 2007. Mr Chand positively elected to stay on risk.
373If my conclusion is correct that Mr Chand could not reasonably elect intentionally to stay on risk, when he had a sufficient opportunity to avoid any loss caused by the Bank's breach, but still hold the Bank accountable for the ultimate consequences of its breach, without even telling it of its position, then it follows that Mr Chand's conduct was unreasonable, and as he has caused his own loss when he could equally have caused that lost to be avoided, his conduct satisfies a test of unreasonableness that absolves the Bank from liability for the consequences of its breach.
374The Court of Appeal held in Sherson & Associates v Bailey that the plaintiffs did not act unreasonably in failing to reinforce the roof supports before the roof collapsed, even though they had been warned that additional bracing was required. Although each case depends upon its own facts, it is necessary to consider whether, by parity of reasoning, Mr Chand's inaction in the present case should be excused. In that case the court held that the expert reports did not suggest that there was a need for urgency in carrying out the steps recommended. The evidence did not establish that the plaintiffs recognised that there was a possibility that the building would collapse. It was open to the plaintiff to assume that, if they kept an eye on the building to observe the progress of any cracking, the remedial work could be postponed until the severity of the problem became clear. Fitzgerald JA stressed that the response that was reasonably required of the plaintiffs was related to the risk which they confronted, and that the expert opinions that the plaintiffs had obtained did not clearly indicate that there was a serious risk that the building would collapse, or that remedial work was urgent.
375Furthermore, in that case the plaintiffs would have been required to obtain expert advice that directly dealt with the remediation work that was necessary to prevent the building suffering substantial damage as a result of the defendants' defaults. While the issue of the cost of obtaining the necessary advice and carrying out the remediation was not specifically addressed, it seems clear that the cost would probably have been significant, so that it was reasonable for the plaintiffs to defer incurring that cost, except in response to the appearance of signs of structural deterioration that warranted the expenditure.
376The circumstances of the present case are in my view materially different. Until mid-December 2007 Mr Chand's loss was entirely prospective. Mr Chand believed that it was no longer prudent for him to remain in the market, given changed market circumstances, the high-risk nature of his investments, and that his own position was highly geared, as were some of his investments. Mr Chand's own case was that he was attempting to exit the market. I have found, however, that, contrary to Mr Chand's case that he was trying to secure the same result as he would have enjoyed if the Bank had implemented his redemption request, he was in fact waiting to see if he could do better. Mr Chand had a simple means to redeem his investments at any time. Importantly, he was able to issue a new redemption request without incurring any cost, or subjecting himself to any risk. He had no basis for believing that, if he ignored an opportunity to redeem without loss, and the market suffered a significant fall, he would have any subsequent opportunity to recover his position. Finally, it is also important that, on the findings I have made, Mr Chand decided to stay in the market with knowledge of the risks that were involved.
377I therefore find that Mr Chand's conduct during the period up to mid-December 2007 was the cause of his loss in a manner that requires that he, rather than the Bank, be legally responsible for that outcome.
378In considering the issue of the reasonableness of Mr Chand's conduct I have not ignored the element of doubt, which I have considered above, concerning whether Mr Chand's redemption request simply went astray after it was received by the Bank, or whether some officer of the Bank became aware of the request, decided that it was not an instruction that should be acted upon by the Bank, but neglected to contact Mr Chand to obtain further instructions. In principle the reasonableness of the Bank's conduct should be weighed in the balance when determining responsibility for the realisation of Mr Chand's loss. As I have said above, the positive evidence and the probabilities weigh in favour of the conclusion that Mr Chand's redemption request simply went astray. There is some ground for concern, however, that arises because the Bank made claims that the redemption request could not be implemented because it did not contain an instruction to pay out Mr Chand's redemption request. The Bank actually pleaded that fact, but did not pursue it. It cannot be known whether the point was a retrospective rationalisation, of which the Bank subsequently thought better. I have asked myself the question: what if an officer of the Bank did become aware of the receipt of the redemption request, and decided not to act upon it, or contact Mr Chand - would that make any difference, and if so what difference?
379After the Bank committed its breach, it could not have changed its mind and simply redeemed Mr Chand's investments outside the timeframe contemplated by the redemption request, without obtaining a further instruction from Mr Chand. The most the Bank could have done was to contact Mr Chand to advise him that it had not implemented his request, and ask him what Mr Chand wanted the Bank to do. It is a matter for speculation what then would have happened. Mr Chand may have instructed the Bank to redeem, and depending upon the timing, that may have yielded a better or worse result than as at 25 September 2007. Mr Chand may have instructed the Bank not to act upon the redemption request. Mr Chand did not make anything of this issue in his case, or in his final submissions. In particular, he did not put a positive case that the Bank was aware on or soon after 25 September 2007 that it had received his redemption request. He did not try to establish what he would have done, had he received advice from the Bank at any particular time that it had failed to act upon his request. Given my view that the probabilities support the conclusion that the redemption request went astray, and the necessarily speculative enquiry as to what might have happened if my view is incorrect, I have concluded that it is not appropriate for me to attempt to weigh the possibility that the Bank knew that it had received the redemption request in the balance in considering the reasonableness of Mr Chand's conduct.
380It is appropriate that I return to make a number of observations about the issues of burden of proof, and the standard of reasonable conduct that is required of the plaintiff in the context of proof of causation and mitigation of loss.
381I have found that Mr Chand's conduct in failing to renew his redemption request on an appropriate date in the period between the time that he became aware that the Bank had not implemented his redemption request and about 13 December 2007 relieved the bank from legal responsibility for the loss suffered by Mr Chand after that time. If that conclusion is wrong, then the significance of Mr Chand's conduct after mid-December 2007 becomes relevant.
382In the period up to mid-December 2007 Mr Chand's loss was for all practical purposes prospective. As I have said, at times there were virtual gains, and at other times virtual losses, compared to the position at 25 September 2007. It is perhaps fortuitous that the most propitious time for Mr Chand to renew his redemption request, if he did so after the October high values ended in the first week of November, was the week ending 13 December 2007. After that time his equity loss was progressively realised, albeit somewhat erratically as the value of his investments fluctuated significantly, though with an underlying downward trend. The first additional interest charge was made in December 2007, and subsequent charges followed. Mr Chand made margin call payments in April and July 2008, and they were also lost. On the particular facts of this case it is a reasonable and practical approach to view Mr Chand's conduct in the period up to mid-December 2007 from the perspective of his ability to act reasonably to avoid the whole of his prospective loss becoming realised. Once, however, the value of his investments fell substantially after mid-December 2007, his position changed fundamentally. It might not have immediately been obvious, but from that time Mr Chand was in a loss-making position. At least from the low point of redemption value of $218,967.52 on 22 January 2008, it must have appeared to Mr Chand to be a matter of complete uncertainty as to whether he would ever be able to substantially recover his equity loss and consequential losses. The only choice available to Mr Chand was to cut his losses, and the fluctuations in values, and the impenetrability of future events, put Mr Chand in an entirely different position than he was in up to mid-December 2007.
383I do not see that I have had to rely upon the burden of proof in forming my view that it was Mr Chand's conduct that was the legally responsible cause for his prospective losses becoming real. It is true that Mr Chand failed to prove crucial aspects of his case. I have not accepted that Mr Chand did not appreciate that the Bank was not going to implement his redemption request until early November 2007. I have not accepted that he believed the Bank did not effectively receive his request. In fact Mr Chand had evidence that it did. I have not accepted that Mr Chand looked for an exit point from the market at the same redemption value as at 25 September 2007. Rather, he took his chances on the market recovering to October 2007 values. I have not accepted that no exit point occurred that satisfied Mr Chand's criteria. There was such an exit point between 30 November and 13 December 2007. Those conclusions do not, however, mean that Mr Chand failed to carry the burden of proving that the Bank continued to be responsible for his realised loss, as a result of some inadequacy of the evidence put forward by Mr Chand. The whole of the evidence sufficiently proved the facts necessary to make a positive decision on the issue of whose conduct was truly responsible for the loss becoming realised.
384In fact, even if it be the case that Mr Chand had the burden of proof, I have proceeded on the basis that, as the Bank's conduct caused Mr Chand's loss in fact, I should not find that Mr Chand's conduct absolved the Bank from those consequences, unless I was comfortably persuaded that the whole of the evidence justified a finding to that effect.
385It is my view that in the period up to mid-December 2007 the standard of reasonable conduct expected of Mr Chand should be the same whether the conduct is considered as going to the causation of the realisation of his loss, or the mitigation of his prospective loss. As appears to have been the case in both Medlin and Knott Investments, there is no reason to conclude that Mr Chand had to achieve different standards of reasonable conduct in relation to the avoidance of loss for the purposes of causation and the mitigation of loss. Indeed, the statement of principle by Heydon JA in Sherson & Associates v Bailey at [77] is put as a matter of general principle, as if it was sufficient to say: "A plaintiff cannot be said to have really incurred any loss which might have been avoided by his taking such steps as a reasonably prudent man in his position would have taken to avoid further loss to himself", without being too troubled about whether this is a statement going to causation or mitigation, or both.
386If, in the context of determining legal responsibility for loss that has resulted from the conduct of both Mr Chand and the Bank, "any question of reasonableness should be framed in terms of what is reasonable as between the plaintiff and the defendant", as stated by the plurality in Medlin at p 13, and if the reasonable steps required of Mr Chand to mitigate his loss required Mr Chand to act in the interests of the Bank as well as his own interests, as was acknowledged in the St Vincent's Hospital case, it is difficult to see how the standard of conduct required on the part of the plaintiff could, as a general rule, differ as between causation and mitigation.
387I have set out above the statement of the principles that govern mitigation that was given in the St Vincent's Hospital case. I accept that the courts usually impose a standard of reasonable conduct upon the plaintiff that is not high, because the wrongdoing of the defendant has put the plaintiff involuntarily in the position where the plaintiff must act to reduce loss, which is likely to be "a position of embarrassment" so that the plaintiff should not be expected to embrace significant risk in the interests of attempting to diminish the defendant's liability. However, the reference to the significance of the embarrassing position into which the defendant's breach may thrust the plaintiff should not be taken to be a statement of invariable principle, which applies without reference to the nature of the breach, its consequences and the relative capacities of the plaintiff and the defendant to avoid loss occurring, or to minimise it, on the particular facts of the case. As a matter of common experience the defendant's wrongful act may put the plaintiff in a position of serious disadvantage, where the steps available to the plaintiff to attempt to avoid or reduce the loss that will flow from the breach are themselves risky, time-consuming or expensive. However, that may not always be the case. The standard of the conduct required of the plaintiff to take reasonable steps to avoid or reduce loss may in some cases be much higher than is usually expected, because of special features of the case such as the ease and reliability of the steps available to the plaintiff to avoid or reduce the loss.
388In my opinion it is appropriate to divide the period between Mr Chand's discovery that the Bank had not acted on his instruction and mid-2008, by which time the whole of Mr Chand's loss had effectively been realised, into two separate sub-periods. Between the time Mr Chand realised that the Bank had not implemented his redemption request, and mid-December 2007, Mr Chand's loss was in substance prospective. That is the first period. Following the relatively dramatic fall in the portfolio value in mid-December 2007, Mr Chand's world, so to speak, changed significantly. He was thrust by circumstances into a loss-making position. That is the second period.
389In the first period the Bank's breach did not in fact cause Mr Chand to experience disadvantage and embarrassment, save to the limited extent that involuntarily he remained at risk of changes in the market, and in respect of his liability under the margin loan agreement. Mr Chand therefore was exposed to the need to reconsider making a redemption request, so that he might suffer loss if he failed to do so at a propitious time. However, as noted, Mr Chand was in a position of strength in that he was able by a simple means to renew his redemption request at a time of his own choosing, and he could have done so on occasions that would have avoided his loss. As it happens, the best time for him to leave the market would have been between when he learned that his request had not been acted upon and about 7 November 2007, or between 6 and 13 December 2007, which was at the end of the first period. In the first period, as a practical matter, Mr Chand had the opportunity to avoid his prospective loss becoming actual. The standard of conduct required of him to achieve that result is the same, in my view, whether the question is approached from the perspective of Mr Chand's conduct causing the loss, or failing to mitigate a prospective loss.
390After mid-December 2007, however, it is appropriate to regard Mr Chand as having suffered a loss, and as having been thrust more clearly into the position of disadvantage and embarrassment that generally causes the courts to be solicitous towards plaintiffs in relation to the standard of reasonable care that is imposed upon plaintiffs in respect of the mitigation of loss.
391The standard of the obligation upon Mr Chand to mitigate his loss during the second period is substantially less than it was during the first period to avoid his prospective loss becoming actual loss. It is probably more natural to consider Mr Chand's conduct during the second period as being more a matter of mitigation, than causation.
392That proposition may not be true in relation to the payment by Mr Chand of the two margin calls, as those payments actually increased Mr Chand's loss. There may be scope for debate about whether, by making the payments, Mr Chand caused his loss to increase, or whether the payments should be regarded as a reasonable attempt by Mr Chand to mitigate his loss, which unfortunately was unsuccessful.
393I have considered the reasonableness of Mr Chand's conduct after the end of 2007 above, in the context of the subsequent variations in the portfolio value of his investments and the circumstances in which he responded to margin calls. I have already explained why I find that the Bank has not established that Mr Chand unreasonably failed to act to mitigate his loss, as it materialised during 2008, and afterwards.
394As Mr Chand's claim has failed, the contributory negligence defence that the Bank pleaded in par 65 of its further amended defence does not arise. However, as I have held that Mr Chand's loss arose from a breach by the Bank of a contractual term that did not amount to "a breach of a contractual duty of care that is concurrent and co-extensive with a duty of care in tort" for the purposes of the definition of "wrong" in s 8 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 9 of that Act would not have applied, and the principle in Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6 would have operated to defeat a contributory negligence defence.
395Had it been necessary to do so, I would have held that the Bank's defence in par 57 of its further amended defence, based upon the terms of clause 37 of the margin loan agreement failed. The Bank did not place positive reliance upon this defence in its final submissions. It is difficult to see in the context of this case how any limitation terms in the margin loan agreement could absolve the Bank for liability for failure to perform its obligations under the contract that was formed when Mr Chand accepted the terms of the PDS. The Bank's submissions did not explain how clauses 37.1 and 37.4 applied. It does not appear from an examination of those provisions how they could do so.