New South Wales Supreme Court CITATION : Pierpoint v Pittis [1999] NSWSC 857 CURRENT JURISDICTION : Common Law Division FILE NUMBER(S) : 11347 of 1999 HEARING DATE(S) : 23/08/1999 JUDGMENT DATE : 30 August 1999 PARTIES : Joan Pierpoint (appellant) Elizabeth Pittis (respondent) JUDGMENT OF : Hidden J at 1 LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 2965/99 LOWER COURT JUDICIAL OFFICER : J. A. Bailey, Magistrate COUNSEL : M. Dicker (appellant) V. Hartstein (respondent) SOLICITORS : Connery & Partners (appellant) Catherine McKimm & Associates (respondent) CATCHWORDS : Appeal from magistrate - civil claim - negligent failure to advise - causation - burden of proof - powers of court on appeal - s69 Local Courts (Civil Claims) Act - Pt 5 of Justices Act. ACTS CITED : Local Courts (Civil Claims) Act, 1970 Justices Act, 1902 McKellar v Blake (Court of Appeal unreported, 30 October 1998) Warren v Coombes (1979) 142 CLR 531 CASES CITED : Mifsud v Campbell (1990) 21 NSWLR 725 Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907 Abalos v Aust Postal Commission (1990-91) 171 CLR 167 Devries v Aust Nat Railways Commission (1992-93) 177 CLR 472 DECISION : Judgment set aside - remitted to magistrate to be dealt with according to law THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HIDDEN J Monday, 30 August 1999 No 11347 of 1999 Joan Pierpoint v Elizabeth Pittis Reasons for judgment 1 HIS HONOUR: The appellant, Joan Pierpoint, appeals against the decision of a magistrate in proceedings which were commenced in the Local Court at Port Macquarie and completed at the Downing Centre, Sydney. The appellant was the defendant to an action brought by the respondent, Elizabeth Pittis, which resulted in judgment being entered for the respondent for $14,500 plus costs. 2 The appellant is a solicitor. At the relevant time she had an office at Port Macquarie, where she employed another solicitor, Mr Timothy Fox. In June 1996 the respondent retained her for the purpose of the purchase of a property at Port Macquarie, and it was Mr Fox who had the carriage of the matter. After contracts were exchanged it was discovered that the house had structural problems requiring repair. The respondent did not proceed with the purchase and forfeited the deposit which had been paid on exchange of contracts. She sued the appellant for the amount of that deposit and associated expenses. 3 The basis of the action with which this appeal is concerned is the allegation that the appellant, through Mr Fox, was negligent in failing to advise the respondent to obtain a building report before contracts were exchanged. There was an issue of fact whether any such advice had been given. His Worship found that it had not and that it should have been. No complaint is made about that in the appeal. The difficulty arises in relation to the question of causation, that is, whether the respondent would have obtained a building report even if she had been advised to do so. 4 She was cross-examined about this at the hearing before the magistrate. She agreed that she had been on a tight budget and that any additional expenditure would have placed her in difficulty. Nevertheless, she insisted that she would have found the fee for a building report if she had been advised to obtain one. Her evidence was that she had acted upon any advice she received in relation to the purchase of the property: for example, the recommendation of an estate agent that she obtain a pest report. 5 In his reasons for judgment, his Worship dealt with this aspect of the matter as follows: …another matter which is to be considered is whether or not the Plaintiff would have obtained a report even if Mr Fox had advised her to do so. The defence submits that from the evidence of the Plaintiff she indicated that she didn't want to proceed with the purchase of the property because her budget was such that she could not afford to expend money on repairs. The defence makes reference to evidence given by the plaintiff in which she was asked: Q: In fact because you budgeted down to the last dollar, it would have been extremely difficult if you'd incurred any additional expenditure, wouldn't it? A: Yes The defence submitted that it should be found that Ms Pittis would not have followed the advice of Mr Fox in relation to obtaining a Building Report because of her finances, and hence causation has not been established. In reply to that submission Counsel for the Plaintiff submitted that the Plaintiff always did what she was told to do in relation to the purchase of this property. When the Plaintiff was told to obtain a Pest Report she made arrangements for a Pest report to be obtained. After the exchange when Mr Fox (sic) advised her to obtain a structural report she made arrangements for one to be obtained. It is unknown as to whether or not the Plaintiff would have taken action to obtain a Building Report, to say one way or the other would be mere speculation. Having failed to advise the Plaintiff to obtain a structural report, the Defendant cannot rely upon speculation as to whether or not the Plaintiff would have heeded that advice to submit to the court that causation has not been established. (The emphasis is mine. In the last sentence I have corrected an obvious typographical error where the word "Plaintiff" appears but "Defendant" was intended.) 6 Implicit in the italicised passage is the assumption that the appellant bore the burden of establishing that the respondent would not have heeded advice to obtain a building report, if it had been given. This was to misapprehend the burden of proof in relation to causation, and it is common ground in the appeal that his Worship fell into error in that respect. In an action for damages arising from the negligent omission to provide advice, it is for the plaintiff to prove that he or she "would have taken action to obtain the benefit or avoid the risk" embraced by that advice: Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907, per Stuart-Smith LJ at 915: see also McKellar v Blake (Court of Appeal, unreported 30 October 1998). This leads to the only question which I have been asked to determine in this appeal: what relief, if any, should be afforded to the appellant? 7 Counsel for the appellant, Mr Dicker, submitted that I should allow the appeal and enter judgment for the appellant. He argued that the italicised passage from the magistrate's reasons demonstrates that, if his Worship had applied the burden of proof correctly, he would have found that the respondent had failed to establish that she would have obtained a building report if advised to do so. That being so, causation would not have been proved and the respondent's claim must have failed. 8 He relied upon McKellar v Blake (supra), in which the Court of Appeal set aside a judgment for a plaintiff in the District Court and substituted judgment for the defendant in circumstances similar to the present case. That was a case in which it was alleged that the defendant, a medical practitioner, had failed adequately to warn the plaintiff about the risks of a surgical procedure. The trial judge found that, because of the inadequacy of the warning, the plaintiff was unable to make an informed decision about whether to undergo the surgery. His Honour found that "if she had been fully informed of the facts her decision might have been different", and that this was sufficient to entitle her to a verdict. 9 It was common ground in that appeal that his Honour had erred, the true test being whether the plaintiff would not have undergone the surgery if an adequate warning had been given. That had been the effect of her evidence, and in his judgment his Honour referred to that evidence without expressing any finding about it. Nevertheless, in the view of the Court of Appeal, it was implicit in his Honour's reasons that he did not accept it. Accordingly, the Court concluded that the proper course was to substitute judgment for the defendant, rather than ordering a new trial. 10 The first submission of counsel for the present respondent, Ms Hartstein, was that the italicised passage from his Worship's reasons, correctly understood, was not a finding of fact. It was no more than an encapsulation, admittedly based upon a misapprehension as to the law, of an argument on behalf of the respondent in reply to the appellant's submission that she would not have been prepared to meet the expense of a building report. 11 In any event, the argument continued, the only finding reasonably open to his Worship was that the respondent would have obtained a report if she had been advised to do so. That was her evidence, and it was consistent with the fact that she had complied with other advice about steps to be taken in connection with the property. In his reasons his Worship made no observation expressly adverse to the respondent's credibility. Indeed, on the question of whether she had been advised to obtain a report, his Worship preferred her evidence to that of Mr Fox, about which he expressed "some grave reservations". It was submitted that I should conclude that the respondent had discharged her burden of proof on the issue of causation and that, accordingly, this appeal should be dismissed. 12 I am satisfied that the relevant part of his Worship's reasons is a finding of fact, not merely the summary of a submission. The passage from the reasons quoted above is all his Worship had to say on this issue. It is clear, then, that the last two sentences were intended to express his conclusion. 13 What is more troubling is whether it is open to me to set aside that finding and, recognising the burden of proof born by the respondent, arrive at my own view on the issue. Mr Dicker submitted that I could not do so. He argued that this is not a case such as Warren v Coombes (1979) 142 CLR 531, where an appellate court is as well placed as the trial court to draw inferences from established facts. Rather, it is an appeal in which I should not disturb a finding of fact by the court of trial, recognising that court's advantage in having seen and heard the witnesses: Abalos v Australian Postal Commission (1990-91) 171 CLR 167, per McHugh J at 178; Devries v Australian National Railways Commission (1992-93) 177 CLR 472, per Brennan, Gaudron and McHugh JJ at 479. 14 I think that Mr Dicker's submission is sound. In any event, there is another reason why I could not take the course urged on behalf of the respondent. The observations of the High Court about the powers of appellate courts referred to in the previous paragraph were concerned with appeals by way of re-hearing. The present appeal is not. It is brought pursuant to s69 of the Local Courts (Civil Claims) Act 1970, which incorporates the provisions of Pt 5 of the Justices Act 1902 as far as they are applicable. Section 69(2) permits an appeal to this Court only on a question of law. The somewhat more expansive right of appeal conferred by s104 of the Justices Act would appear to be confined to convictions or orders under that Act, and to have no application to civil claims. 15 It does not follow, however, that the appellant is entitled to the orders which she seeks. With respect, I am concerned about the adequacy of his Worship's reasons on the issue of causation. He referred to the respondent's evidence about her budgetary restraints, but not to her evidence that she would still have obtained a building report if she had been advised to do so. In this respect, this case is distinct from McKeller v Blake. This was the critical evidence, and it was essential that his Worship determine whether or not he accepted it. I am not persuaded that the italicised passage from his judgment conveys that he did not. The fact is that he did not give the matter proper consideration, no doubt, as a result of his misapprehension about where the burden of proof lay. Accordingly, his Worship's reasons are deficient because of their failure appropriately to deal with an essential issue of fact: cf Mifsud v Campbell (1990) 21 NSWLR 725, per Samuels JA at 728. 16 It would seem that the powers of this Court in an appeal such as this are those set out in s109 of the Justices Act (while acknowledging that that section also appears to be directed to convictions or orders under that Act). Among them is the power to remit the matter to the magistrate who heard it and, in the circumstances of this case, I see no alternative but to do so. I am mindful of the relatively modest amount of the judgment and of the fact that this is not a course favoured by either party. Nevertheless, it is the course which justice requires: cf McKeller v Blake, per Sheppard AJA at p8. 17 The judgment in the Local Court is set aside and the matter is remitted to the learned magistrate to be determined according to law. 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