CATCH CORDS Sclicitors - breach of contract and negligence - | solicitors acting for both parties on contract for sale o2 land upon wnich vendor would erect house - vurcnasers enter into possession of suostantially corpleted nouse before completion of contract - house taen cestroyed by cyclone - house not insured eltner ty vendor or purcnesers obligations to advise purchesers on salient points of contract, incluaing neec to insure ~- consideration of obligation in light of particular srovisions of contract - quantification of scurcnesers' loss. interest ~ claim for interest made in wr2zt anc statement of claim - legislation appliceble in Northern Territory prior to Northern Territory Supreme Court éct 1979 - interest not recoveracle - Supreme Court -ct 1979, s.24; Nortnern Terr:tory Supreme Court Act 1962, s.35; Supreme Court #.ct 1935 (S.A.), s.30C; Civil Procedure Act 1833 (3&4 a12 iV, ¢.42) 5.28. ECRGS FREDZRICK FCX v. PsUL ANTHONY Bo...tb EVERINGYSM n@_ PETER _GECRGE 'iGus4RD QQ rs) No. NT G 28 oF 1982 Coram: woodward, Muirneadc and uw a oO Re} '3 o 'y ion a a ty Oe helen , (4e3 Darwin IN THE FEDERAL COURT OF AUSTX-L1A NORIAZRN TEARITURY SISTRICT RECISTRY ) No. nT G 28 of 1982 GENER-L Divislov On Appeel from the Supreme Court of the Nortnern Territory of australia BET.EEN GeCRGE FasweRICK FOX "ppeliant AN: PaUL ANTHONY ED.-RD ZVERINGHAM and PSTCR GoonGe HCrakD Rescondents ORDER JUDGES MAKING ORDER: wWoodward, Muirnead and Shrenpara JJ. tye Oc tober 19S oy DATE OCF ORDER iGSRE MaDE Darwin THE CCURI CRDERS : 1. That the appeal be aliowec. 2. That the judgment erterea by the Supreme Court in favour oF tne respondents pe set aside. 3. That in lieu thereof gucgment ie entered for tne appellant. 4, That tne action be rerizted to the Suprene Court for the assessment ot the acveilant's damages. De That tne respondents pay tne apveliant's costs of the appeal and of tne rroceedings te date in tne Supreme Court. The costs of tne furtner proceea- ings in the Supreme Court are to be in the discreticn of tnat Court. Tnat there be liberty to any party to ancly on seven Gays' notice. IN THE Foeosr-i, CCURT OF -UsTR+LIA TRY Ca KCRTEERIT TEXALTORY DISTRICT RECT 9) +3 Q@ N @ fe) my kb '0 fee N GENSR+L LIVISION Or. Appeal from the Suprere Court of the Nortnern Territorv of Australia GEORGE FRoDURICK FCA Appellant 'AND PAUL ANTHONY EDW4sRD RVZRINGHAM and PETHn CeOrnGs dQ.ARD Respondents CORAM: Woodward, Muirhead and Shepparc JJ DATE: REASONS FOR JUDGMENT Court of tne Northern Territory (C'tLeary J.) in which en action crought oy the avoellant against tne resvondents was dismissed. The action was against tnree defendants, tne two respondéents, who were at the relevent time solicitors, anc a company, Jin Beam Investments Pty. Limited. The company aid not defend tne prceceedines and his Honour enterec judgment for the #rpeliant = it in the sum of 410,0UC, The cause oF action agéinst 1t was for breach of @ contract te sell lend upon which the como i] ny was to duila a neuse. The cause of action against the respondents was for breach of obligations they were saic to owe the appellant as their client. The company was 2lso their client. The agreement ebove mentioned wes entered into petween 1t and the appellant ard his wire, Clarice Fox, on 28 November, 1974. It provided that the company vould construct a residence upon certain land and ¢ -1l' the land, upon whicn would ce the completed residence, to tne Foxes. Mrs. Fox died before the action was hearc, Pursuent to Order 19 Xule 50 of the Rules of the Supreme Court, his Honcur pvroceeaed with tne case without recuiring the eppointment cf any person to represent her estate. Tne Foxes had evinced anterest in the land in tne early months of 1974. Mr. .Fox haa discussions witn a Mr. Simonetti of Jim Beam Investments Pty. Limited. The Foxes accompanied him to tne responcents' office. They were introduced to Mr. #veringham. According to tne appellant, Mr. Simonetti told Mr. Everingnam that they (tne Foxes) were prospective buyers "of the vroperty". The appellant asked ir. everingnem 1f he would revreser~ his 'wife and nimsel? in the purchase of "this house". Mr. Zverz:ngham said he would. Certair. particulars, including the Foxes' full names and their address were taken. The conversation then enced. For reasons whicn need not te mentioned tne vtransaction did not then proceed, But in October 1974 the Foxes decided to go ehead, bfter seeing his bank the appellant went to the resporndents'. office. Be took with him a chegue for "about [10,CCO" wnaich ne described as "a deposit cnecue". He saw a person he descriced as a secretery. She gave him e contract to look at, He discussec 1%s terms vwitn Mr. Sinonetti. AS a result of that discussion scme changes were made. The contract was then signed by the Foxes. the common seal of Jim Beem Investments Fry. Limited was placee on it tut there :5 no evicerce to tnis effect. Tne Foxes! signatures were witnessed cy tre secretary who had given the contract to tne anveilant. The Foxes did not see either of tne resnondents at the time the contract was signea nor dic they see tnem thereafter, at no time diag either of tne respondents explain to the Foxes eny of the terms of tie contract or give them any advice ebour tnsir ricatvs ard oblig- ations tnereunaer. The evicerce wnich nas been referred to 1s the oniy evidence of the retainer of the responcents «es the Foxes' solicitors. Neitner Wr. Simonetti nor either of the respondents gave eviderce. and tnere was no attemot made to icentify or cell the verson cescribec as a secretary ir Mr. Fox's evidence. This absence oF evidence 1s no doubt due to the fact tnat there 1s no issue acout tne retsiner. It was pleacea an peragraons 3 ard 6 of tre amended stetement of ciaim as follows: "3. During early i974 the plaintizfs reteined and employed the Solicitor Lefendents as tneir solicitor to advise them ard act upcn tneir behalf in tke purcnase by then from tke third defendent of a house whick wes in tne course of being ou1lt by the third defendent (ane which 15 hereinefter cailed 'the vroperty').'! "6, In ocr about ezrly lLovercer i974 tne vlairntif agein retainec ana employed tne solicitor defends as their solicitor to advise and act on their behalf in tne purchase of the proverty from tne third defendant." fs nts In their aefence tne responcents eadnittec the trutn cf those parazraphs. Tne contract recited tke ownership cf the Land by Jim Beam Investments Pty. Limitec, the selection by tre Foxes of plans anc svec:ficatiors of a house, the 2frsemert of the company to erect 2 nouse in accorderce "1th the plans and specifications anc tne agreement of the Foxes to pay to the company tne sum of 132,500 for tne land "and tne completed dweiiing house to be erected" by tne company. Clause 1 of the contract crovined that the company woula sell te the Foxes all tne company's rignt, title ana interest in ard to the said land and dwelling nouse for the sum of $32,50C. By clause 3 tne company wes forthwitn after the execution of tne contrect to commence tne construction, By clause 4 the sum of $32,500 was to be payactle as to tae sum of 72C,COU on the signing thereof to the trust account of the respon- dents, wno were to vay it to the company, es to the furtaer sum of $10,550 on the conpany siving possession of tne proverty tc the roxes anc es to tne balance on the date of actual completion of tre house, It 1s to be observed that, notwitnstending the arpellart's evidence, tne cortract contains no reference to a depos:* and thet the initial payment was to se 120,000, not ,;10,C0U vrich 1s the sum which was paid. By clause 5 completicn of tne contract was to tane place within 13 weexs of notification oF completion of erection of the nouse by tne company to the Foxes. clause also obliged the company, uron payment of the purchase price, to aeliver tc the Foxes a duly executed transfer of tne company's rignt, title and interest 1n the land. Cleuse 6 was in the following terms: i—J (a) Vacant possession cf tre lend nerein agreed to be sold snall be given and taken upon completion of the contract. (vc) Untii completion tne vendor (or in the event thet possession of tre property herein agreed "to ce sold or any part tnereof 1s given to tne purchaser prior to completion, then the purchaser) will: (2) Keep the vroperty herein agreed tc ce sold in good repair having "regard TO the condition thereof as at tne cate hereof; (11) Keep the property nsrein epgreed to te sold insurec to its Suli insurecie value in the names of tne vendor and the purchaser including cover against storn and terpest ana treakege of glass and produce tne policy to tne otner party upon demand; (i211) Ocserve ard comply «itn the nrovi-ions of any Crown Leese in respect of the saic land and wita any laws for the tine being in force governing tins use of the saza land." The clause should te considered alone with clause 27 wnicn provided: "The vendor shell et eli times curirg the progress of tne work keep the buildings in tre course of erection insured in the full velue thereot fron loss or damage by fire, storm, tempest ana eartnquake and shall «nen so requestec procuce to the purcaaser all policies and receipts for premiums." By clause 25 the company uncertcok end agreed to complete the erecticn of the house sithin 18 weeks of the date of tne contract subject to certain contingencies whicn would entitle the company to an extension of time. Clause 29 provided that until the contract snould be conpleted tne compary would te and .oulic remain respon- Sible in every resvect for all loss, ingury and damege to tne premises and to tre Foxes or the cccuplers of any adjoining land or buildings. Clause 32 (wnich should be considered elong vita clause 6) orovidec that 2f the roxes entered into possession without the company's consent they snouid be deemed to have accerted tne work as complete and satisfactory, Their entry into possession was to constitute a waiver of claims waiich they mignt otnerwise nave haa against tne company for faulty worknan- snip and for other cefaults. It 1s unnecessary to refer to any other vrovision ef the contract. Altnougn tne evidence :s not Clear, it vould seen that the building must have been commencec well terore the date of tne contract. That inference must be drawn pecause tne house was in a state of substantial completion a few days before Cnristmas 1974, taree cr four weeks after tne ccntract wes signed. The ct work which was outstanding at that time was the installation of kitcnen cupboarcs, the insteliletion of a light in the laundry, che replacemert of certain - damaged fibro sheets in the eaves, the installation of towel racks and the erection of the fence. it wes agreed between tne comperny ard the Foxes tnrat tne Foxes could move into tne unconpletea siouse wnicn tne compeny would eventually finisn. The Foxes mcvea in accoraingly. On Christmas morning 1974 tne nouse wes aestroyed by cyclone Tracey. "The Foxes found teirrporary accomnod- ation and eventuelly went tc live in Canterra, Neither tne company nor the Foxes were insurec & no evidence tt) Is ageinst tne loss of tne builaings, Tner ne conpany or cl that tne rescondents ever aavisec e2ther the Foxes to take cut insurance, 1} 3 ' e nd tS ¥ L ve On i May, 1975, the respondents wrote to tne Foxes as follows: " re: Furchase from Jim Eeam Investments pty. Lta. we rerer to previous correspondence in relation to this matter. As you know our client Jim Eeem Investments Pty. Ltd. nad no insurance over the property the subgect of tne contract at tre time of tne cyclone. Pursuant to the contract you were liable to take out insurance cover on tne dwelling from the date of possession. Accordingly it would appear that you will be iiable to our client in damages for your railure to insure should you not complete the contract. We would therefore appreciete your urgent advices as to whether or not you intend to complete the contract. " It 1s to de ocserved that tne lecter is written as if the respondents actec only for the company ana nov for the Foxes, Tnere 28 no exolanetion in the evidence of now this came about. The company then purporteu to terminete the contract and resold the property. It did not pursue any action azeinst the Foxes but executec a waiver of its rights in order to ootain cerpensation frem tie covernmentai agency charged with vroviaing compensa*ior. tc victims of the cyclone. The Foxes also nace an apsiicetion fcr ccm- pensation cut were told thet, because of the waiver, it fv was considered tnst they had ro cleim for unznsured loss or damage to property causec by tne cyclone. ty The retainer given by the Foxes to the respondents obliged the responcents to act gensrally in the Foxes! interests in end ebout their entering into tne contract and their taking of title to the vroperty pursuant thereto. At the least that obligation required tae respondents, e1tner themselves or by an employee guaiif- 1ed to do SO, to go thraugh the contract with the Fores and explain the salient points of it to *tnem,. In tais way tneir principel rignts and cbligations under it would be explainec ¢5 would the general course the matter magent pe exvected to teke. The respondents were also under an obligations to explain to the Foxes provisions of the contract which were 1n an unusual form ana vkich might to be. In this respect we refer to Sykes v. liicland Ban Executor and Trustee Co. Limitee (1°71) 1 u.B. 113 where the Court found a solicitor negligent tecause he aad failed to draw his client's attention to ea clause in an underlease which pronib:ted the use cf the premises for otner than specified purposes witnout the consent of tne lessor. We refer eiso to Attard v. Samson (1966) 110 Sol. J. 249, The responcents were elise under an ocligaticon «nich Pp & —_ me, required tnem to give attention, cefore tne contract was Signed by the Foxes, to tne ~uestion of wnetner it, from their point of view, contained adequate provisicns to protect tnem against a variety of contingencies which might reasonably have ceer foreseen as likely to arise 1f things aic not go as expected. It does not appear whether the contract was drefted in the respon- cents' office, but 1t was proffered by them on behel? of tne company. The Foxes were entitled to rely on the ro respondents to see tc it tnat the contréct was édeouate to protect their interests. In cases such as the present a solicitor is paid not only for what he in fact coes, but also for the respons- 1biiity he assumes in trying to protect clients from financiel loss 17 things go wrone. It 1s easy enough to act for people if things go es tnev are expected to. But 1% 1s because tne unexpected will sometimes nappen that solicitors ere htly para the tees which they (ay ri command, The corollary of this provosi they co not measure up to the standard shich is resurrec of tner, they are liable for breach of tne osligetion which they owe to clrents. The stendéerd resurred of them 1S not an acsolute one. In Simmons v. Pennington LL. & Son (1955) 1 All 2.R. 240, Hodson L.c. (as he was) approved wnat had teen seid by Herman J. (as ne was) at first instance. Hodson L.J. said (p.245): "It 1s sarc that Harman J. misdirected nimseif on the matter, but I cannot accept thet. 'what ne said was: 'I do not think I need Ceal eat any great lengta with the question of a solicitor's liability for negligerce. It 1s tne same as anybocy else's liability. Having regard to the degree of skill neld out to the public by solicitors, does the concuct of the sol2citor fall short of tne stendard which tne public has been lead to exvect of tne sclicitor?' I tnink that that airection was rignt and consis- tent with authority." See also Nocton v. asncurton (Lord) (1914) -.c. 932 at p.956. If ever a contract needed cereful attention and explanation, it 1s this one, Tne 'y e are mery aspects of 1) a" e 'y it whicn coula be merntionea; we te only three, each of wnaicn hes a direct or inairect releverce to the present problem. The first is whether the + x so be conditiorel upon tne hn ie}i] i) contrect was intended being completed in accordance with tne visrs and specifications, If it were, tre Fores would not tecome v D fh tne owners in equity of ania upon the exchange of contracts; cr. Davioyca Estates Pty. Lim:zted v. National —_— Insurance Co. cf New Zealiend Linited (1965) 66 £.R.(N.5..i.) 381. t is net necessery to determine tnis zuestion. 12. It 1S enougn to say that there 1S sometning to be seid for the view that the contract wes conditional fo a only and sometning to be said for tne opposite view, (eo) aw t the house wes alrost > is¥] Assume, as was the se, t completed anc the compeny for anv one of a number of reasons wes uneble to conplete it. The land by that time woulc have vecore very muck more valuable because of the imorove™ert acaed ta it. "were tre Foxes intended to be entatlec to it, notwithstendinge that the contract had not been completed or was tne position one uncer whicn they were relegatec to a ck D> ik personal acticn against company? Cn the ore nand they may nct have «ished to taxe cver an incomplete house; on tne otner 1t was intended by tne contrect that tney should by that time seve paid et leest »20,0CO - almost two-thirds of the entire purchese price. The question 18 a airficult one ana ought desirably to have been rescivec br en express prevision in the contract. That the contract itself is not particulariy favourecle to the roxes in tnis sort cf eventuality is revealec by clause 26, It proviaes that 1f tne company se wound up cr enter into an arrangement for the benefit of its creditors or beccme 13. unable to or refuse or neglect to carry out wae work, then the Foxes rey terminate tre contract. The clause concludes, "upon the service of such notice (of termination), all liability of the vendor to complete this contract snell cease". But what of the entitlement to tne Jend, and whet remedies (if any) were tne Foxes intended to heve, particul- arly if the reason for non-compl¢stion we.'e th d i) financial failure of the cempany?. More directly in poant are tne two clauses eerlisr quotea concerning insurance. Clause 6(c) o2 which 1t will be necessary to say more later, obliges tne company (or the Foxes 1f they have taken possession), unter alia, to «seep tae property insured "to its full insurable value in the nemes of tne vendor an? the purcnaser", Thus the clause seems tc cast upon tne Foxes tne obligation to insure if they take possession. But cleuse 27 cbhliges tne comrary at aii times suring the progress cf the work to keep tne buildings in tne course of erection insurea in tne fuli value thereol, There 1S no eviaence cnr the point, cut @ verson not versed in the law mignt well trink tnat there was no 14, need to insure, if he went into possession, because clause 27 wculd oblige the vendor to insure. The fact thet clause 27 may be overridden by clause 6 or that an insurence policy taken out by the vendor might not benefit the vurcheser may be thougnt to be matters which would not readily occur to a layman. Finally there is the question of the teking of possession itself, Cleuse 6, like cleuse 4, enviseges tnat possessirn may be taken prior to completzon of the contract. But clause 22 rekes arn amportent provision 1f possession is teken without consent. Its operation 1s such as tc ering about a waiver of all claims wnich the Foxes might otherwise have nad 1n relation particularly to faulty workmanship. A sclicitor, retained as were tne ressondents, nac @ prime cbiigetion <vo empnasise to tne Foxes "tne dangers that micht erise if they went into possession bosh from tne voint of view of their obligation to insure anc fron the point of view orf tneir possisle waiver of claim @inst we ta oO ry company. Tne Foxes should neve ceen told wnen they Signed tne contract tnat they sould be rost unwise to enter into possession, even with the compary's consert, a witaout first consulting their solicitor so thet they could be protected properly against any acverse cornseguences of tneir doing so. It 1s plain erougn tnat the respondents failed in discharging these cbligations. In the absence of evidence the inference 1S open, anc ought to be drawn, tnat no thought was given to the question of whether the contract preverly protectec tne Foxes, Fairly pleinly it aic nov. More to the point, Aavirg regard to tne 1ssues raised by the dings in this 'J oO m case, no person in tne r ts' office took the D svonder r Foxes tnrough tne contract for the purpose cf explain- ing 1t to tnem and drawing their attentior to vroblems chat miagnt arise in particular circumstances. ry) tw It 1s convenient to de at this point with one of the principal reasons why tne learned primary judge found against the appeilant. It was a1s view tnat tne Foxes, althougn tney enterea into possession of the premises a few aays before Cnristmas 1$74, ¢1d not take possessicn in terns of clause 6(tb) of tne contract. His Honour said; " 'Possessicn of the property! in clause 6(9) must, I think, mean 'vacant possession', for 'yossession' in a contract prima facie means that: Smith v. Chadwick (1882) 2C Ch.D. 27, 58. But, in any event, 'possession' as here used clearly refers beck to 'vecant possession! in cleuse 6(a). Can it be said tnen tnat the acts of the piaintiffs in moving some of their pelongings into tne house and then moving in tnemselves (at the suggestion of the vendor) amounted, 1n law, to vacant 'possessicn oz tne property .... agreed to be sold or any vart thereof (bezng) given' to them. As I have said, I do not tnink so. Tne 'property .... agreed to be sold! was the land and the conpleted cwelling house to be erected on it. Tne purchasers nad the right under tne contract to be given vacant possession of that property, and tnaet, I think, comprised 'the right to actual unimpeded pnysical enjoyment' of at: cf Cumberland Consolidatec Holdings Ltd. v. Irelend (1S46) ".E. 262 at 271. At the time tne purcnasers moved into the awell- ing 1t was not completed, and inceec work cortinued on it up to the time that it was destroyec. I do not think it wes in the contemplation cf either the vendor ocr the purchasers at the time tnaat what was being glven was 'vacant possession', shat the vendor nad to give at thet time wes scmething less tnan that, ana indeec tne vendor continued to work on the dwelling sc tnat 1n due course 1t would be able to give vacant possessicn. The most that tne vourchasers cen be said to have teen given was pernaps some kind of permissive occupancy." His Honour hed earlier concludea thet tke aouse, curing its ccnstruction, wes at the contany's risk, Since, in nis view, the Foxes were not in possession within tne meening of clause 6, tney were not uncer any oclivation aa to insure, There was therefore no obligetion upon the mA, 17. . respondents wnich reauired tnem to aavise the Foxes that they should insure because tneir taking of possession had placed the risk on their shoulders instead of tnose of tne conpany. In passing 1t should be said tnat tnere is no evidence that the responcerts were ever told by tre company or tne Foxes tnat the Foxes were about to go antec possession or had gene into possession. The breech of obligation upon which tne apvellant must rely, 1f he 15 to succeed, must te sriown to have occurred, tnerefore, at or about the time tnet the contract was enterea into. In our opinion tne conclusion of his Honour thet the Foxes did not go into possession within the meaning of clause 6 of the contract 1s not correct. 4S tne passage cited from his gudgment shows, it was his view that possession in cleuse €(t) was the seme es 'vacant possession! in clause 6(a). ve ce not egree «ita that View. It 1s clear tnet vacant pessessicn was not to 18. be given until completion of the contract. So whet wes being dealt with in clause 6(b) was the situation prior to completion of tne contract. The words, "Until comreletion" plainly refer to the completion of the contract. Thus wnere, 1n varenthesis, the opening words of the clause refer to tine giving of "possession of the property ,... or any part tnereof" taey ere speaking of &@ possession snort of the vacant possession referred to in clause 6(a). In our opinion clause 6(b) contemplated thet the Foxes might, prior to the completion of tne contract, enter into possession of the whole or part of tne property. In that event the Foxes were to assume responsibility for repair (altnough whet tre significance of the pnrase "as at tne date nereof" 1s we Go not know); they were then obliged to keep the vroperty insurea and they were tc observe ard comply with the trovisions of eny aopliceble Crown Lease and witn any laws governing tne use of the lana. The Foxes did go into possession snen the cuilcing was almost complete. Their possession wés not exclusive because tne company continued ts be entitled to come on ra) to the property for the curpose of completins the buila- > ang and the fence. But the possession wnich the Foxes had was possession for the purposes of clause 6(t). It followec that wnen they entered into possession in the way that tney did they became obliged to insure tne property. The insurance was tc te for tne Id in tne names full insuradle value of the preperty a4 o* the company and themselves. That tney feilec in tnis obligation 1s ccmmron ground, It was indeec 1n respect of this matter that the resvondents themselves in their letter of 1 May, 1975, earlzer quoted, alleged on tenel? of that tne Foxes were in breacn oF the contract. Tae letter said that the Foxes would be lisble to tne company in damages for their feilure to insure snould they ret complete the contract. It should te sain at tnis soint that it lies 111 in tne mouths of tne respondents, naving on benalf of tne company made tnat ellegetion, now te argue, as they did cefore the learnei1 primary juage anc tefore us, tnat the Foxes were und=r no ocliigation 'to insure because tney were not in vossession. at rey te, as counsel for the respondents suggested in argzunent, that at the time the letter of 1 Mai, 1975, was wrivten, ad a) the respondents were no longer tne FPores' solicitors. It may have been tnet the full amplicaetions of wnat was being said dic not manifest themselves to the respondents in the turmoil which must héeve existed in the aftermath of the cyclone, But this is svecu- lation, It 1s something upon wnich one would have preferrea to nave some evidence. However, counse! for the responaents stressed that the letter and its implications were not matters AW) in 1ssue in the case. Th ' 2~ is sometaing witn wnich d we tend to agree. But 1t snouic be said thet tais case again highlights how dafficult it 1s for tne one solicitor to represent adequately coth parties to ry corveyancing transecticn. Wernings eacout the vroolems whicn arise continue to be sounded. In Goody v. Baring (1956) 2 41] &.R.11, Denckwerts J. (as ne was) said (p.i2) that 1t seemed to him practically impossible for a solicitor to do his duty to eacn client proverly wren he tries to act fcr toth a verdor ere e curcheser. He referrec to what Scrutton L.d. ad saia in Mocdy v. Cox & Ysst (1917) 2 ch.71 at p.ol. Later Denckwerts o., after referring to what Hodson L.J. ac said in Nm a Simmons v. Pennington & Son (supra), said thet it was plain tnat the standerc of sxill and care required of a solicitor who acts for both parties on a sale ana purchase 1s ét least as greet as that which woula be reguirea of e¢ solicitor who ect (0) for a purchaser (or, we would ada, a vendor) alone. In support of his case the appellant called tuo Darwin solicitors, Messrs. Pariss anc O'Neil, to give evidence of proper practice in the circumstances of this case. There was some <iscussion during tne argu- ment as to whether this eviderce was necessary or wnetner the Court could act without any suck evidence or could take a view of tne relevant standard independently of any sucn evicence, Plainly the Court "ay do so. It ! 1s one field where it 1s not essential thet exvert evidence be called. In Gcody v. Baring (supra) no c expert evidence was called for the slain Cn behalf d a Fy Fy a of the deferdant three solicitors vere cel included the defencant nimseiZ venckwer ct H Su. d2d@ not accept the evidence of any arc found regligence establisnea. Counsel there contended thet tne Court was oound to accent the evidence of tne solicitors <n the cuestion of the 22. proper practice. He submitted tnat tne Court was not at liberty to Crew on its Own conveyancing experience. That submission was rejected. In Neagle v. Power (1967) 5.2.5.R.373 Bray Cid. referred to a complaint by counsel tnat there was no evidence of tne practice of lend tbroxers or of the standard of care normally exercised in that occupeticn. His Honour continued (p.276): "Suck evidence has not beer throught necessary in the case of acticns against solicitors, The Court presumadly knows for itself what tne ordinary reasonably prudent ana care*tul solicztor ought to know and to do." Bray C.J. expressed similar views 1n Jennings v. Zilehi-Kiss (1672) 2 5.2.2.2. 493 at p.513, In our opinion vthe uncontested eviaernce plainly establishes a breacn by the respondents of their ocligaticns to the Foxes. The creach occurred when they failed to advise tne Foxes of tnezr salient rights anc obligations under the contract at tne time 17 was signed. They were provably elso 2n breach of their ct obl:gations in not seeing to it treat the Foxes were better protected thar they were unaer tne contract; clause 26 earlier referrec to provides er evample of 23. a this. But tne caSe against tné responaents 1s oased on their failure to explazn, and advise the roxes about, the important provisions of tne contract into which they dic enter. Upon the casis of wnat we have earlier saia it was the clear obligation of the resson- dents to emphasise to the Foxes the changes in tneir rights and obligations whick would come acout 12 tney went into possession beftore completion of t contract. He) Dp y Relevantly they shouid have been advised that if tney did so they must tnemselves taxe out a policy of insur- ance. The respondents not knowing that the Foxes did go into pessession some three weeks or so after the contract was signed, a question arises as to whetner any damege is shown to have resulted from tne oreach. Tnls 18 @ twofole question. Tne first part of it con- cerns the question of waetner, hed tne roxes been properly advised, tney would nave rememcered to insure tne property some three weeks later. of ccurse, 12 they had had stressed to them the desirability of coming back tc tne respondents 12 any question of gorng into possession had arzsen, 1% weuls prebabiy, neve Tcliovwed tnat they would have dcne so, put, in any event, the 24, appellant gave evidence that 2f he had been told tnat if he were to go into possession ne had to insure, he would have aone so. His Honour appears to heve acceoted tne general purport of the apvellant's evicence. It follows in cur opinion thet tne breach of obligation whick has been established did lead to the failure of the Foxes to insure. The second part of the guestion is whether, if tne Fores nad insurea, the insurance would neve been availatle to incemnify tnem for their loss of the sum of %10,0CC wnich haa been paid as well as tneiar liabrlity tc tne company. It was concluded by his Honour and submitted to us by counsel for the respondents that, altaoughn the Foxes had an insurable interest, tney did is) not nave sucn an interest in tne property as to enable chem to recover the $1G,00U which they hed pala. In this regard 1t snoula be mentioned tnet nis Honour tnought that tne appellant's submissicns were based on a misunderstanding of the principles cf insurance law as applicacle to policies for the protection of work in the course of construction, He sala that sucn policies were commonly known as "builder's r2zsk" policies or "course of construction" policies, Under such a policy, IN UI . so his Honcur said, the loss that woula have been principally recoverable would have been the vendor's i) loss, the purchasers' interest being at best limited one. H2s Honour added, "Tne most tnat the purchasers coulc nave hoped te receive under tne policy woula nave been sore surplus over the venacr's loss fer xhich tne vendor mzent rave nad to account to them, and tnere 15 no evidence vefore me thet there would have bveen any such surplus to whick tney would have veen entitleda...." We would respectfully point out that insurence of the kind contemplatec cy nis conour was not the insurance contemplated by the contrect. The insurance whicn 1t contenpleted was an insurance oy whicn tae property was covered "to its full insurat'.e value in the names of the vendor and the vurcnaser",. Thus the intention was that, in tne event of the aamage or As earlier inaicated, there may heave teen @ cuestz unitially as to wnat interest in the croperty the Foxes were intended tc heve pending tne completion of tne house. It may nave been that tney were not intended to nave any interest in the property, legal or equitatle, until its completion anda the period provided fer in clause 5 commenced to run, But in our opinion the position became certain upon tne Foxes taking vossession of the property. The house was then in a substantially completed state. Tneir entry into possession manifested an intention te accept it pursuant to the contract. The company, by egreeing to their entry into possession, intended taat they should. Thus, althcugh the contract may nave Deen con em 1tional up to that point of time, 1t tnereafter became uncon- eitionel. Tnenceforwerd, 1f not before, the Foxes acauireé an equitatle interest in tae property which tney were entitied to insure. If they zad aone so Pi 4 tneir loss occasioned cy the cyclone (waick may well jo neve exceeded $10,000) would have beer recoveracle under tne policy. That tnis was the cormon intention of tne perties is confirmea, 1n our opinion, by tne terms of clause 6(b) of tne contr ft oO co ra ~ oO rn [e] 'd u ry fo ct (00) gr 1 Lb in tne event that the Fores took possession tnereuncer, to transfer the obligation, not only to insure, but also to keep the property in repair. We make it clear that the entry by the Fcxes into possession dic not operate to waive any cleins they may nave haa against the company, for example, for faulty workmer nip. There would neve Seen no welver because t. ey entered anto possession with tne company's consent; see clause 32, But such claims as tney may have had woula not have permittec them to rescind the contract. Tneir taking cf possessicn con we ary. What we nave saic 3s enouzh to entitle tke arpellant to succeed, But tnere are some otner matters waich we snoulc mention. The case was put against the respondents in three elternative ways, witn one cf wh2ca we neve dealt. another elternative was 'tnat, notwitn- stending tne vrovisions of the contract in relation to H nsurance and the risk being .1ith the company, at least until vossess:0n was given, a prudaert solicitor :ould nevertheless neve agvised tne Fores .o insure their interest. That is not a susmissicn vith .nicn we need D N : Ceal, although we mention tnat cne oF the practitioners called tnought tnat sucn a course would have been desirable,as we do ourselves, Nevertheless we do not need *o araw é@ conclusion on whether failure on the part of the respondents tc advise it emounted to breacn of their obligations to tne Foxes. Tne third «lternative wes besed upon the failure of the responaents to see to 1t thet the company itseif hed taken out insurarce or at leest to M a advise the roxes thet they shoulc be satisfied them- selves thet this naa ceen done, we think tnere 1s substantial Yorce in this submission but 1Ts conseg- uences Tey net be or importance because of the cnange which came about wien tne Foxes entered into possession. It was ther tne purchasers' obligation to insure. OF tais tney were ignorant. Their ignorance was cue to fey) the resvonaenvs' breaec D of obligation, that, in our iy) opinion, is the kernel of tne case, Tnoen we shouid mention tret we nave not 341a anytning of tre dete1ll of the eviternce of Meesrs, Parisn ard O'Ne11l concerning rrever practices in 4 case of tnis kind. It 18 erougn to say tnat, gernerelly speaking, it 1S in accordance with our own views of wnat the ressonaents' obligetions were. Finally we snould say something cf tne cleim made by tne appellant for interest. is Honour did i) m io) a not ceal finaily witn tais claim cut r rved literty to apoly in relation to it. Beceuse fis decision was adverse to the anpellant there was no coint in tne appellant pursu2zng it at that stege. Strictly tne matter 1s not celore us cecause 1t as not been ceeit with by the learned primery juaze, but we think 1% useful to eapress our views upen it. Until tne enactment of s.84 of tre sunrere Court Act 197¢ there was no local statute empowering the award of interest before judgment upon any sum, That section has ro application to the present proceedings. Section 35 of tne Nortnern Terrivorv Sutreme Cour Ht Act 1961 (now repealed) crovided tnet wnere no provision t lon to a matter of prectice ana crocedaure of tne ct ner oO Supreme Court was containes in tne act or in any i] noul: @) oO i) law in force in tne Territory taet retter governed, eas nearly ¢«S mizht be, cy the tzce and "SS r mM fay procedure of the Supreme Court of South Austreélis in similar matters. In Moller v. Roy (1975) ll a.L.R. 398, Frranki J. (sitting as an adcitions2 judge of tne Supreme Court of the Northern Territory) was asked to use that section to apply the provisiors of s.30C of the Suoreme Court act 1935 (S.2.). Tnat es section nac come into force in Soutn #ustrelia in 1972. His doncur hela thet he coule not apply 1t to the proceecings tefore him because the provisions of s.35 of the Northern Territory Supreme Court act were not ambuletory and operated only to pick up the oractice and procedure of the Supreme Court of Soutn sustrelia as 1t was in 1961 wnen the Northern Territcry Supreme Court Act was vassed, Prior to tne enactment of s.20C of the Surreme Court act 1935 (S.4.), the Suprene Court of South a Austrelia considered tnrat s.28 of ths Imoerial Act, 3&4 f212.1V, ¢.42 (the Civ te bh u "S ° fe) D fon co ie) cf H fea) NI kN ww applied in Scutn Australia; see, for examcle, v. Vinnell (1972) 3 S.2.5.8.157 at p.163 ant Sager v. Morten ard Morrison (1°73) 5 3.2.0.8.143 et p.163 31. The award of interest oursuent to a statutory power sucn as 1s conferred cy the Civil Procedure Act 1s a matter relating to procecure; see Ruby v. Narsh (1975) 132 C.L.R. 642 per Gibbs J. (es he wes) et p.656 and Simonius Vischer v. Holt & Tnompson (1979) 2N.S5S.4.L.R. 322 per Moffitt P. at pp.33€-7. Accord- ingly the Civil Procedure act was in force in the Nortnern Territory at the time tne Foxes' ecticr was comienced. But 1t does not, in our ovinzion, overete so as to entitle the apveilanct to cléim interest. The provisions of s.28 of tne act are es follows: "That upon all debts or sums certain, payable at a certain time or otherwise, tne gury on the trial of any issue, or on any i1n3u1sition of damages, may, 1f tney srall think fit, allow anterest to tne creaitor at a rate not exceeding tne current rate oF interest fror the time when sucn depts or sums certezn were vcayacle, 1f such debts or sums be payable by virtue of scme written instrument at a certain time, cr if vayable other- wise, chen from the time when demand of payment snall have been nade in writing, so es such aerand shall give notice te tne cebdtor thet interest will be claimed fren tne date of sich demand until the term of payment; providec thet anterest shell be payable an all ceéses in whnica it 1s now payable by law," It 1s to be observed thet tne section nes t.o limcs. Tne first applies to aetts or sums certain peyeble et a Qi fo ° certain time where sucn Geots or sums are payable by virtue cf some written instrument at a cervein time; see London, Chatnam_ and Dover hallway Co. v. South Eastern Railway Co. (1893) -.C. 429 at p.434 and Meine and New Brunswick Electricel Fower Comvany Limitea v. Hart (1929) A.C. 631. Tne moneys cleimed by the eppellant in this case do not fall «witnin this limb of the secticn if for no other reason tnen taat they are not payable at a time certé2n,. The otner limb of tre section relates to aects or sums certain payable otherwise than at a certain time. So far as such moneys are concerned interest will only be recoverable from tne time wnen aemand of payment snali nave been made in writing. ~ wes saic that a demana for interest nac here oeen mace in the writ, the statement of cleim ard the amenced statement of claim, But 1t was long ago keld tnét for there to be a aemand under the section, 2t must heve teen mace prior to tne comrencement of the proceedings; see Ns Tne Raymney Railway Company v. Tne Rayrmey iron Comrcany, a ——-— Limitea (1890) 25 ¢.EB.3. 146 =t p.151 ana Genvrain v. Beck (1925) 41 T.L.R. 629. AN AN It follows tnat the Supreme Court has no power to award the interest which the appellant cleims. For the reasons we héve given tne appeal will te allowed and the gucgment for the respondents entered by the Supreme Court set eside, In lieu 1] co thereof judgment shoulc be entered for tne espelile put there remains a question as to the amount of that judgment. The oniy loss estebdlished by tie acpelient 1s the sum of #10,00C paid on account of tne moneys cl oOie] ct due uncer the contrect. Tnere was a faint at emend this claim during the nearing cefore us but it wes not vroceeded 1th. Tne aprellant nas guagrent for ¥10,0CC against tne company. It was sail? by counsel for tne arpellanz tnet tne guigrernt wes valueless, cut counséi for tne respondents ocgectel to the statement ceing made because tnere was no evicence of tne truth of it. The stetemernt was witndrawn. Although the eppellant nes estabizshed his case against the respondents, ke 1s only entitlea to recover against them wnet in fect he nas lest as the result of Y their preaches of otlig 2tion, Tf the Juarvent tgzeinst tne company 1s not velueless, then Sol ff give credit to tne respondents for any sum wnicn has been recoverea or will te plainly recoverabiy from it. But 1f tne jucgment is valueless, or if only part of the moneys due thereunder can te recovered, then tne appellant should have jucgment against the respondents for the whole sun of $10,0C0U or sucn part of it as w1il not te recovered uncer his jguc-ment against tne company. We should, perhavs, acd that there is no reeson why tne appellant shouid not recover jucgment both against the company ana the respondents. This 1s not a case where the respondents end the company were sued in tne alternative, nor @ cese "where tne respondents anc tne company are jointly liable. Tne metters we et ee oo) i) is] nave mentionec go not cto try or gudgmer.t, cut to the ascertainment of the anpellant's loss as a result of tne respondents' breaches of obligation. If the appellant recovers his ioss from the corrany, his ~ the respondents will (Gg) damages under the oudgnert egain eo te nominal only. + Since tre position is not Known TO us, Lt wi l be necessary for the matter tc be remi ted te the surrere Court for the assessment o> tre eppellant's Caméges. a vl Because o* the long aistory of tne retter era the Gesirability of tnere not being incurrea further costs, we would nove that the perties mirht reach agreement on what 1s to be done, The orcers which we maxe are as follows: 1. Tnat the appeal be allowed. 2. Tnat the Jucgment entered by tne Supreme Court an favour of the respondents ce set aside. 3. That in lieu thereof jucgment ce entered for the eopelient. 4, That the action be remitted to tne Suvreme Court for the assessment of tne appvellant's aamages. 5. Tnat the resoondents pay tne eppellart's costs of Pa) 1 the acpeal and of the proceeaings to dete ir the Supreme Court, Tne costs of the further vroceeaings in the Supreme Court are tc te in the discretion of that Court, Wr We reserve licerty to any party to apply on seven days' notice. , ' ' ' yore 35 recy Teg . bs azote cr roe flor : than oO © ute * aemert IPE A Oe she +>\ > a\v nag s\ ae + Ag orists Typ Oe tober , 148%