Kossaifi v ACN 111 804 383 Pty Ltd [2020] NSWSC 853

Supreme Court New South Wales

Medium Neutral Citation: Kossaifi v ACN 111 804 383 Pty Ltd [2020] NSWSC 853 Hearing dates: 24–28 February 2020, 2–3 March 2020 Date of orders: 03 July 2020 Decision date: 03 July 2020 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) Judgment for the defendants. (2) The plaintiffs to pay the defendants' costs. (3) Grant liberty to the parties to apply on three days' notice should the parties seek any alternative costs order. Catchwords: NEGLIGENCE — professional negligence — claim against solicitors by former clients in tort and contract — relationship breakdown between company directors and shareholders — advice as to appropriate process to divide company assets between shareholders — external administration — scope of duty of care owed by solicitor to client in the circumstances — Civil Liability Act 2002 (NSW) s 5O not pleaded in defence — liability assessed under Civil Liability Act s 5B NEGLIGENCE — causation — loss of opportunity to take alternative course resulting in different financial outcome — whether defendant's alleged breaches of duty caused plaintiff's loss — extent of plaintiff's reliance on defendant for advice — whether plaintiff would have accepted and acted upon further advice from defendant contrary to course adopted by plaintiff and other shareholders Legislation Cited: Civil Liability Act 2002 (NSW), Pts 1A, 4, ss 5B, 5D, 5E, 5O Corporations Act 2001 (Cth) Pts 5.3A, 5.5, ss 232, 233, 234, 435A, 435C, 436A, 436E, 437A, 438A, 439A, 443D, 444B, 446A, 447A, 449E, 461, 462, 463E, 513B, Sch 2 Professional Standards Act 1994 (NSW) Cases Cited: Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Correa v Whittingham (2013) 278 FLR 310; [2013] NSWCA 263 David v David [2009] NSWCA 8 Deputy Commissioner of Taxation v Portinex Pty Ltd (2000) 156 FLR 453; [2000] NSWSC 99 Fexuto Pty Limited v Bosnjak Holdings Pty Limited & Ors [2001] NSWCA 97; (2001) 37 ACSR 672 Fink v Fink (1946) 74 CLR 127; [1946] HCA 54 GEC Alsthom Australia Ltd v City of Sunshine (Federal Court of Australia, Ryan J, 20 February 1996, unrep) Groom v Crocker [1939] 1 K.B. 194 Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15 In the matter of Antqip Hire Pty Limited (subject to deed of company arrangement) (in liquidation) [2020] NSWSC 487 In the matter of Joe & Joe Developments Pty Ltd (subject to a Deed of Company Arrangement) [2014] NSWSC 1444 In the matter of Lime Gourmet Pizza Bar (Charlestown) Pty Ltd (formerly under administration) [2015] NSWSC 244 In the matter of Warwick Keneally as administrator of Australian Blue Mountain International Cultural & Tourist Group Pty Ltd (admin apptd) [2015] NSWSC 937 Kazar v Duus (1998) 88 FCR 218; [1998] FCA 1378 Leary v Federal Commissioner of Taxation (1980) 47 FLR 414; [1980] FCA 112 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384 Port Macquarie Hastings Council v Mooney [2014] NSWCA 156; (2014) 201 LGERA 314 Regional Power Corporation v Pacific Hydro Group Two Pty Ltd (No 2) (2013) 46 WAR 281; [2013] WASC 356 Sellars v Adelaide Petroleum NL; Poseidon Ltd v Adelaide Petroleum NL (1994) 179 CLR 322; [1994] HCA 4 Sparks v Hobson; Gray v Hobson [2018] NSWCA 29; 361 ALR 115 Uniting Church in Australia Property Trust (NSW) v Miller; Miller v Lithgow City Council (2015) 91 NSWLR 752; [2015] NSWCA 320 Wagner v International Health Promotions Pty Ltd (1994) 15 ACSR 419 Wallace v Kam [2012] NSWCA 82; [2012] Aust Torts Reports 82-101 Category: Principal judgment Parties: Joseph Kossaifi (First Plaintiff) Dolly Kossaifi (Second Plaintiff) ACN 111 804 383 Pty Ltd (First Defendant) Farshad Amirbeaggi (Second Defendant) Representation: Counsel: N J Adams SC (with J Horowitz) (First and Second Plaintiffs) I R Pike SC (with F T Roughley) (First and Second Defendants)