Reported Decision: (2007) Aust Torts Reports 81-899 New South Wales Court of Appeal CITATION: Christie v Purves & 2 Ors [2007] NSWCA 182 HEARING DATE(S): 17/07/07, 20/07/07 JUDGMENT OF: Beazley JA at 65 & 67; Ipp JA at 1; Campbell JA at 66 EX TEMPORE JUDGMENT DATE: 20 July 2007 DECISION: Appeal dismissed with costs. CATCHWORDS: LIMITATION OF ACTIONS – period of limitation – action in tort for pure economic loss – (i) loss of an entitlement to a stream of income – (ii) loss of a potential entitlement to income tax reduction – (iii) infringement of an interest in keeping one's professional affairs and business records in proper form – appellant alleged that the first respondent (a) gave him negligent taxation advice - and (b) engaged in misleading or deceptive conduct, as a result of which the appellant suffered damage – whether the appellant's actions in negligence and misleading or deceptive conduct were statute barred by s 14 of the Limitation Act 1969 (NSW) and s 68 of the Fair Trading Act 1987 (NSW) – general principles relating to limitation of actions in negligence and misleading or deceptive conduct for pure economic loss – time commences when the cause of action accrues – cause of action accrues when the plaintiff first suffers any actual, measurable damage (although, time may run before the damage is discovered, or could, on reasonable inquiry, have been discovered, by the party allegedly wronged) – cause of action accrues even if some of the plaintiff's damages are prospective – as regards the appellant's claim for loss of income, loss was suffered immediately upon his appointment as a judge of the District Court of New South Wales on 8 September 1993 – as regards the appellant's claim arising from his failure to obtain reductions in the income tax payable to him during each of the financial years 1991, 1992 and 1993, loss was suffered at the end of each of those years – as regards the appellant's claim based on the confusion and disorder in his taxation records, loss was suffered when an independent review of those records was required by another accountant. D Fair Trading Act 1987 (NSW), ss 42, 68 Income Tax Assessment Act 1936 (Cth), s 17 LEGISLATION CITED: Limitation Act 1969 (NSW), s 14 Limitation Act 1985 (ACT), s 11 Trade Practices Act 1974 (Cth), s 82 Cartledge v E Jopling & Sons Limited [1963] AC 758 Cheney & Wilson v Duncan (2001) 34 MVR 28 Commonwealth v Cornwell (2007) 234 ALR 148 Darley Main Colliery Company v Mitchell (1886) 11 App Cas 127 Hawkins v Clayton (1988) 164 CLR 539 CASES CITED: Law Society v Sephton & Co (a firm) [2006] 2 WLR 1091 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 Perre v Apand Pty Limited (1999) 198 CLR 180 Rosenberg v Percival (2001) 205 CLR 434 Scarcella v Lettice (2000) 51 NSWLR 302 Wardley Australia Limited v Western Australia (1992) 175 CLR 514 Winnote Pty Ltd v Page [2006] NSWCA 287 Terence Joseph Christie (Appellant) PARTIES: Nigel Charles Purves (First Respondent) Peter Frederick Freeman (Second Respondent) Anthony Chiriloo (Third Respondent) FILE NUMBER(S): CA 40305/06 S T White SC/S R Meehan (Appellant) COUNSEL: No Appearance (First Respondent) G Curtin (Second & Third Respondents) SOLICITORS: Harris Freidman Hyde Page (Appellant) Henry Davis York (Second & Third Respondents) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 2100/03 LOWER COURT JUDICIAL OFFICER: Hungerford ADCJ LOWER COURT DATE OF DECISION: 08/05/06 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40305/06 DC 2100/03 BEAZLEY JA IPP JA CAMPBELL JA Friday 20 July 2007 TERENCE JOSEPH CHRISTIE v NIGEL CHARLES PURVES & 2 ORS Judgment 1 IPP JA: Mr Christie's claims 2 This appeal concerns a claim in negligence, alternatively under the misleading or deceptive conduct provisions (ss 42 and 68) of the Fair Trading Act 1987 (NSW), for pure economic loss. The appellant, Mr Christie, was the plaintiff below, and the respondents (who were members of a firm of accountants and tax agents) were the defendants. 3 Mr Christie contends that Mr Purves, the first respondent, acting as a partner of the respondents' firm, negligently prepared various tax returns on his behalf and gave him negligent advice as a result of which he suffered damage. The misleading or deceptive conduct claim is based on Mr Purves' work for, and advice to, Mr Christie. 4 The damages Mr Christie alleged he suffered fall into three categories. The first is loss of income. At the time of the alleged negligence and misleading or deceptive conduct, Mr Christie was a member of the New South Wales Bar and held the rank of Queen's Counsel. On 8 September 1993, he was appointed a judge of the District Court of New South Wales and remained a judge of that court for ten years until he retired. He contends that, in 1993, he was induced by Mr Purves' negligent conduct and advice, alternatively, misleading or deceptive conduct, to cease practising as a barrister and to become a judge. He contends that, in consequence, he suffered a loss of income (that is, in comparison with what he would have earned had he remained a barrister) over that ten-year period. 5 The second category of damages Mr Christie claims arises from his failure, in relation to each of the financial years 1991, 1992 and 1993, to obtain reductions in the income tax payable by him. He alleges that he would have obtained such reductions but for Mr Purves' negligent or misleading or deceptive conduct. 6 The third category is the cost to Mr Christie of retaining another accountant to investigate the muddled state of his affairs brought about by Mr Purves' negligence or misleading or deceptive conduct. The issues on appeal 7 The trial judge, Hungerford ADCJ, dismissed Mr Christie's action. His Honour held that Mr Christie's claims were statute barred by s 14 of the Limitation Act 1969 (NSW) and s 68 of the Fair Trading Act. He also held, in regard to the loss of income claim, that Mr Christie had not proved that Mr Purves' negligence or misleading or deceptive conduct had caused him to accept judicial appointment. On appeal, Mr Christie challenges these findings. 8 Section 14 of the Limitation Act relevantly provided: "(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims: … (b) a cause of action founded on tort …" 9 Section 68 of the Fair Trading Act relevantly provided: "(1) A person who suffers loss or damage by conduct of another person that is in contravention of a provision of Part … 5 (section 43 excepted) … may recover the amount of the loss or damage by action against the other person … … (2) An action under subsection (1) may be commenced at any time within three years after the date on which the cause of action accrued." Section 42 of the Act falls within Pt 5. 10 Mr Christie commenced his proceedings on 15 May 2003. It is common ground that, as the judge put it, "if the cause of action in negligence accrued prior to 15 May 1997 and if the claim under the Fair Trading Act accrued prior to 15 May 2000 then they were statute barred." Thus, the limitation of action issues are whether the causes of action in negligence accrued prior to 15 May 1997 and those under the Fair Trading Act accrued prior to 15 May 2000. 11 The cause of action in respect of the loss of income claim is based on Mr Purves' negligence in the preparation of the income tax returns from 1989 to 1993, his advice to Mr Christie prior to the latter's appointment as a judge of the District Court, and his failure, before then, to inform Mr Christie that his taxable income had been understated and he had paid too little tax. The trial judge held that the cause of action in relation to this claim first accrued on 8 September 1993. 12 The cause of action in relation to the liability Mr Christie incurred in respect of the costs of reviewing Mr Christie's financial affairs (that is, the claim quantified by reference to Mr Mercer's fees) also rests on Mr Purves' negligence in the preparation of the income tax returns from 1989 to 1993. 13 As Mr Purves' negligence in the preparation of the income tax returns from 1989 to 1993 is the basis, at least partly, of the loss of income claim and is also the basis of the claim for the costs of reviewing Mr Christie's financial affairs, I am prima facie of the view that these two "claims", in reality, form one cause of action. The two allegedly separate claims seem to me to be separate heads of damage arising out of the one cause of action. 14 No party contended, however, that the characterisation of these two claims was in any way material, and the case was argued on the basis that they constituted separate causes of action. I accept that the true characterisation of these two claims makes no difference to the result of the appeal, and I shall treat them in the same way as the parties did. 15 The cause of action in respect of the failure to obtain tax deductions is based on the failure by Mr Purves to do whatever was reasonably necessary to enable Mr Christie to reduce his taxable income by making appropriate superannuation contributions in the financial years 1991, 1992 and 1993. His Honour held that this claim accrued "on 1 July after … 30 June in the year concerned" for each of the years 1991, 1992 and 1993. He explained that this was because " [the claims for deductions from income brought about by superannuation contributions] had to be [made], but were not, in respect of contributions actually made in the financial year in which they were claimed". Moreover, through Mr Purves' negligence, Mr Christie was wrongly described in the tax returns as an employee of Bretfind Pty Limited ("Bretfind") for superannuation purposes (which meant that, in any event, he was not entitled to the benefit of income tax concessions available to self-employed persons for superannuation contributions). 16 His Honour held that the cause of action in regard to the costs of reviewing Mr Christie's financial affairs (quantified by reference to Mr Mercer's fees) "accrued when the primary action in negligence first accrued on 8 September 1993". His Honour said: "This is because the loss or damage occasioned by Mr Mercer's fees was merely a growth or increase in any loss suffered by [Mr Christie] from that date." The facts 17 The respondents were partners in the accounting firm of Wilkie Teape & Company. In January 1982, on the advice of Mr Purves, Bretfind was incorporated as the trustee of the T J Christie Family Trust and the T J Christie Family Superannuation Benefits Fund was established. The Family Trust was a "service trust" that provided Mr Christie with services and equipment for his practice as a barrister in consideration for the payment by him of management fees. 18 From 1 July 1989 until 1996, Wilkie Teape prepared Mr Christie's tax returns and the tax returns for the Family Trust and the Superannuation Benefits Fund. In addition, from time to time, Mr Purves gave tax advice to Mr Christie. As the judge found: "Wilkie Teape through [Mr Purves] at all relevant times conducted and managed the whole of [Mr Christie's] taxation and superannuation affairs and [Mr Christie] so relied on him to do so." 19 In late 1992 or early 1993, an inquiry was made of Mr Christie as to whether he would accept an appointment to the District Court bench. He responded: "Not at the moment but in due course I could be interested." About two weeks later, the then Chief Judge of the District Court made a similar inquiry of Mr Christie who reiterated his earlier position. In mid-1993 another approach was made to Mr Christie, but once more he declined. Shortly thereafter, he was again asked whether he would accept an appointment and he again gave a negative reply. 20 In late August 1993, a further approach was made to Mr Christie. This time he considered the proposition seriously. He asked Mr Purves for his advice. Mr Purves informed him: "It will certainly take you a good while to put in for superannuation the sort of money you will receive from a judicial pension." Mr Purves did not mention any inaccuracies in Mr Christie's taxation returns for the four financial years from 1989 to 1992 or any potential liability, arising out of those inaccuracies, on the part of Mr Christie to pay additional income tax. 21 On 8 September 1993, Mr Christie accepted the appointment and was sworn in as a judge of the District Court. 22 Mr Christie's taxable income as recorded in the initial tax returns lodged by Mr Purves for each of the four financial years 1989 to 1992 was $229,664, $296,429, $377,749 and $491,748, respectively. 23 Mr Christie said that he was influenced by various factors to accept the appointment. He said that although the judicial salary of $137,771 was significantly below the income he was then earning as a barrister, he believed he was financially secure and had little debt. Apart from the family home at Mosman, which secured a bank overdraft, Mr Christie owned (with his wife) unencumbered holiday properties at Boomerang Beach and Thredbo. He had an amount of $190,000 invested in superannuation. He expected that, after he was appointed as a judge, he would receive more than $500,000 as fees for work he had performed as a barrister in 1992 and 1993. He was then aged almost 51 years and he knew he would qualify for a judicial pension after ten years' service. He was concerned that his continued rejection of offers of appointment might result in no further offers being made to him. Finally, he had no dependant children. 24 In mid-1995, Mr Christie became concerned as to the way in which Mr Purves had disposed of payments Mr Christie had intended be made for superannuation purposes. A dispute arose about this, which led to the relationship between Mr Christie and Wilkie Teape terminating. In October 1996, Mr Christie retained Mr Mercer, a chartered accountant with another firm, as his accountant and taxation advisor. Mr Christie asked Mr Mercer to examine his tax returns and affairs for the previous six financial years from 1989 to 1994, including those of his wife, Bretfind, and the Superannuation Benefits Fund. 25 Mr Mercer requested copies of Mr Christie's income tax returns from the Australian Taxation Office ("the ATO"). There is a letter in the evidence from the ATO to Mr Mercer dated 18 December 1996 enclosing copies of Mr Christie's tax returns from 1989 to 1995 as well as most of the tax returns that, apparently, had been requested. In the "first month or so of looking at the returns", Mr Mercer formed the opinion that over the years in question Mr Christie's taxable income had been understated by an aggregate amount in the order of $1.3 million. Mr Mercer said that he formed this view in 1996. He must have arrived at this conclusion towards the end of December 1996. 26 In 1996 (presumably towards the end of the year), Mr Mercer indicated to Mr Christie that "there were separate problems, major problems" with the tax returns. 27 Mr Mercer was uncertain as to precisely when he mentioned to Mr Christie the figure of $1.3 million as being the amount by which his taxable income had been understated. It was put to him that he indicated to Mr Christie on or before October 1997 that the size of his problem was in the order of "a million, 1.3" and he agreed to this proposition. 28 Following his review, Mr Mercer concluded that for the relevant period Mr Christie's assessable income was understated by $1,301,281 resulting in an additional tax liability of $660,037.59. The position found for each year was: - Financial Year Additional Income Assessed Additional Tax Payable Ended 30 June $ $ 1989 52,548 26,405.37 1990 146,036 71,922.73 1991 246,798 119,080.03 1992 105,792 51,044.64 1993 479,316 231,269.97 1994 270,791 160,314.85 Total: $1,301,281 $660,037.59 29 As Hungerford ADCJ pointed out: "Thus, for the four financial years 1989 to 1992, prior to the first plaintiff accepting in late-August 1993 the judicial appointment to commence on 8 September 1993, the additional tax payable was $268,452.77. The additional tax payable for the financial year 1993, the original return for which was lodged on 15 December 1993, was $231,269.97 and that for the financial year 1994 was $160,314.89. Therefore, the additional tax payable for the first four years plus that for the financial year ended 30 June 1993 immediately before the appointment (but which return was not completed and lodged until just over three months after the appointment) was $499,722.74. The original tax return for the financial year ended 30 June 1994 was lodged on 15 April 1995 and which attracted on amendment additional tax payable of $160,314.89." 30 On 12 May 1997, Mr Christie wrote to the ATO and advised, in detail, of the errors in his tax returns from 30 June 1989 to 30 June 1995 that Mr Mercer had discovered. 31 There were many errors in the tax returns. It is unnecessary to set out all of them. They included overstatements in the management fees charged to Mr Christie by the Family Trust, erroneous claims for expenses involving certain motor vehicle expenses, and various arithmetic errors. In addition, superannuation contributions were not paid, although they were deducted as expenses. Moreover, as I have mentioned, Mr Christie was wrongly described as an employee of Bretfind for superannuation purposes. 32 Mr Mercer calculated Mr Christie's loss of income resulting from his judicial appointment. At this stage, it is sufficient to say that, over the years, it was substantial. 33 Mr Mercer calculated the loss that Mr Christie suffered in consequence of Mr Purves' errors in relation to the deductions for superannuation contributions and the incorrect characterisation of Mr Christie as an employee of Bretfind. He said that, had Mr Christie made the maximum superannuation contributions allowed for a self-employed person, his income tax would have been reduced for each of the three financial years 1991 to 1993 in the respective amounts of $39,574, $57,680, and $71,926. The total amounts to $169,180, which represents Mr Christie's claim under this head. 34 When Mr Christie retained Mr Mercer in October 1996 they did not discuss the fees Mr Mercer would charge (although Mr Mercer said that it was always understood that fees would be charged for the review – a matter that Mr Christie accepted). Eventually, Mr Mercer charged $29,363 for his services. The general rules relating to the limitation of actions in negligence actions for economic loss 35 A plaintiff cannot sue for damages in negligence until the cause of action accrues. But once it accrues, time commences to run. In Commonwealth v Cornwell (2007) 234 ALR 148, Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ said (at 150, [5] to [6]): "[T]o show the existence of a completely constituted cause of action in negligence, a plaintiff must be able to show duty, breach, and damage caused by the breach; accordingly, in the ordinary case, it is at the time when that damage is sustained that the cause of action 'first accrues' for the purposes of a provision such as s 11 of the Limitation Act 1985 (ACT) [the equivalent of s 14 of the Limitation Act 1969 (NSW)]. In Hawkins v Clayton [(1988) 164 CLR 539], which turned upon a provision of the New South Wales legislation [s 14 of the Limitation Act 1969 (NSW)] relevantly indistinguishable from the territory legislation, this court refused to place a particular gloss upon the statutory text. The court rejected the proposition that, at least in the case of claims in negligence for economic loss, time does not run until the plaintiff discovers, or could on reasonable inquiry have discovered, that damage has been sustained." 36 These remarks confirm, authoritatively, that, for the purposes of calculating limitation periods under the Limitation Act in the case of claims in negligence for economic loss, time may run (absent a special statutory provision) before the plaintiff discovers, or could on reasonable inquiry have discovered, that damage has been sustained. 37 Thus, in the present case, time ran even during the period when Mr Christie was ignorant of the fact that he was suffering or could suffer loss. 38 In Cartledge v E Jopling & Sons Limited [1963] AC 758, the House of Lords held that the plaintiffs' cause of action arising out of negligent exposure to noxious dust over a period of years resulting in a lung disease arose as soon as the breach of duty by the defendant caused personal injuries to the plaintiffs beyond what could be regarded as negligible (even if that injury was unknown to, and could not be discovered by, the sufferer). Any further damage occurring after the date the cause of action originally accrued was part of the same cause of action. 39 In Commonwealth v Cornwell, Callinan J (at 162, [57] to [58]) pointed out that some contingencies take a lifetime to play out, but courts do not wait a lifetime. They assess damages once and for all on the basis of the probabilities as to which cogent evidence is called (see also Darley Main Colliery Company v Mitchell (1886) 11 App Cas 127). His Honour was in dissent in Cornwell in that he regarded the contingencies that the majority held had prevented the appellant's cause of action accruing as being capable of resolution, and in his Honour's view the appellant's loss was ascertainable. Nevertheless, nothing said by the majority is inconsistent with the well-established general principles Callinan J expressed in the passages cited. 40 The general rule can be stated as follows. For economic loss (as with other forms of damage) to be sustained, there has to be some actual, measurable damage that is beyond what can be regarded as negligible. While prospective loss, alone, is not enough, a cause of action of negligence will accrue when the plaintiff first suffers any actual damage of the kind described. The cause of action will then be regarded as having accrued, even if some of the plaintiff's damages are prospective. The plaintiff may then claim for the actual damages that have been incurred and should quantify and claim for the prospective damages (such as, for example, future loss of profits). This, for example, is what occurred in Perre v Apand Pty Limited (1999) 198 CLR 180. These propositions are well-established and are manifest from Commonwealth v Cornwell (at 152 to 153, [16] to [18]), Wardley Australia Limited v Western Australia (1992) 175 CLR 514 (at 530 to 531), Hawkins v Clayton (1988) 164 CLR 539 (at 561 and 588), Winnote Pty Ltd v Page [2006] NSWCA 287 (at [40] to [41]), Cheney & Wilson v Duncan (2001) 34 MVR 28 (at 32, [24] to [26]), Scarcella v Lettice (2000) 51 NSWLR 302 (at 306), Law Society v Sephton & Co (a firm) [2006] 2 WLR 1091 (at 1108, [60]), Cartledge v E Jopling & Sons Ltd (at 772). 41 The principles applicable when the claim is for damages for misleading or deceptive conduct under the Fair Trading Act (or the Trade Practices Act 1974 (Cth)) are the same. In Wardley, the High Court, after recognising and discussing the differences between common law damages for negligence and damages under s 82 of the Trade Practices Act, accepted that the general principles governing when time begins to run do not differ in respect of those causes of action. Senior counsel for Mr Christie did not suggest otherwise. The interests infringed 42 The desirability, in cases of negligence where pure economic loss is claimed, of ascertaining the interest said to be infringed (in order to determine when time begins to run under a limitation statute) was first mentioned by Gaudron J in Hawkins v Clayton (at 601). Her Honour said: "The various and complex economic relationships which are a feature of present day economic organisation suggest that loss may manifest itself in various forms, and it is for this reason that there may be occasions where it is necessary to identify precisely the interest which has been infringed." Her Honour observed (at 602): "It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability." 43 In Wardley, the majority approved Gaudron J's observations as to the need, in some cases, to determine the interest infringed. Their Honours stated (at 527): "The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected." 44 In regard to "the nature of the interest infringed" their Honours cited Cane, Tort Law and Economic Interests (1991) at pages 16 to 17. Professor Cane in that work identified four different types of economic loss or damage that might flow from interference with, or invasion of, economic interests. He said that the first consisted "in reduction of (the value of) existing assets". The second consisted "in the interruption of a stream of income which the plaintiff expected would continue uninterrupted". The third consisted in the failure to realise or obtain some increase in one's assets that was expected to materialise in the future. The fourth type of loss Professor Cane described as "only loosely so-called" because "it consists in an accretion to the assets of the defendant". 45 In Cornwell, the majority said (at 153, [18]) when discussing the respondent's interest that had been infringed: "Here, the economic loss which the respondent sustained was alleged to be the lesser benefit which he obtained on his retirement, this being worth less than it would have been had he not relied upon the negligent advice given to him in 1965. But to speak simply of a 'retirement benefit' and its value is to obscure the nature of the economic loss involved. This does not turn upon proprietary or other rights or obligations created and governed by the general law, such as the indemnity granted by the respondent in Wardley , or the continuing financial obligations undertaken by the lessees in Murphy v Overton Investments Pty Ltd [(2004) 216 CLR 388]. What the respondent stood to enjoy upon 'retirement' was an 'entitlement' conferred by federal statute law. This 'entitlement' was his 'interest' in the sense used in the above passage from Wardley ." 46 Mr Christie's interest in regard to his claim for loss of income comes closest to the second category. It could be described as the loss of a stream of income (the loss being caused by his alteration of position brought about by negligent advice). Following Cornwell, it could also be described as Mr Christie's "entitlement" to continue receiving an income of the order he was receiving as a silk at the Bar (which was reduced by reason of Mr Purves' negligence). On both bases, that interest was infringed upon Mr Christie being appointed a judge of the District Court. On his judicial appointment, he was no longer able to earn the income he had received as a barrister, and he lost his entitlement to that income. 47 It is difficult to place within Professor Cane's four categories Mr Christie's claim for loss caused by his failure to obtain a reduction in his taxable income by making superannuation payments, but the relevant interest may be characterised as an interest in reducing his income tax liabilities or in his potential entitlement to income tax reduction. This interest was infringed when Mr Christie, in each relevant tax year, failed to make the appropriate superannuation contributions. 48 Mr Christie's loss represented by the expenses he incurred in restoring his financial records to appropriate order (confusion and disorder having been caused by Mr Purves' negligent conduct in not preparing his tax returns with due care) may be characterised as an infringement of his interest in keeping his professional affairs and business records in proper form. This interest was infringed when Mr Purves acted in such a way as to bring Mr Christie's records into confusion and disorder. The suffering of actual damage of a relevant and measurable kind 49 As regards Mr Christie's claim for loss of income, he began to suffer loss immediately upon his appointment as a judge on 8 September 1993. According to Mr Olde, an expert witness called on behalf of Mr Christie, Mr Christie suffered a loss of at least $171,844 in the 1994 financial year by accepting a judicial appointment. According to Mr Olde, by the end of the 1995 financial year, Mr Christie had suffered a loss of at least $378,000. That is, on Mr Christie's case, as at 30 June 1995, by reason of Mr Purves' negligence or misleading or deceptive conduct, he had suffered an actual loss to that extent. 50 In other words, by June 1994 Mr Christie had suffered actual damage of a relevant and measurable kind that was certainly not negligible. Thus, by that date his cause of action both in negligence and under the Fair Trading Act for damages constituted by loss of income had accrued. It follows that, as Mr Christie commenced his proceedings on 15 May 2003, his claims in respect of the loss of income causes of action are time-barred. 51 I turn now to Mr Christie's claim arising from his failure, during each of the financial years 1991, 1992 and 1993, to obtain reductions in the income tax payable by him. 52 Section 17 of the Income Tax Assessment Act 1936 (Cth) at the relevant time provided: "Subject to this Act, income tax at the rates declared by the Parliament is levied, and shall be paid, for the financial year that commenced on 1 July 1965 and for each succeeding financial year, upon the taxable income derived during the year of income by any person, whether a resident or a non-resident." 53 Section 17, therefore, imposed an obligation on Mr Christie to pay income tax at the appropriate rates for each financial year. It was common ground that the income tax for each financial year only became payable on receipt by Mr Christie of the ATO's assessment of the taxation payable by him. On 11 December 2001, Mr Christie received amended notices of assessment for the years in which erroneous tax returns had been submitted. His income tax became due and payable as at that date. 54 For Mr Christie to have reduced his income tax for the financial years 1991, 1992 and 1993 by making appropriate contributions to superannuation, the contributions would have had to have been made in the years in question (and he would have had to have shown in each of those years that he was entitled to the benefit of income tax concessions available to self-employed persons for superannuation contributions). 55 If no such superannuation contribution was duly made in the financial year concerned, the opportunity for reducing the taxpayer's taxable income for that financial year was lost, irretrievably, at the end of that financial year. 56 Thus, at the end of each of the 1991, 1992 and 1993 financial years, Mr Christie, by not making the requisite contributions in each such year (and in being incorrectly described as an employee of Bretfind in the tax returns for those years), irretrievably lost his entitlement to have his taxable income (and the income tax payable by him) reduced for the year in question. The fact that the income tax only became due on receipt of the income tax assessment was immaterial to the question of when his loss occurred. 57 Therefore, the damages Mr Christie sustained by Mr Purves' negligence, in respect of the failure to make the requisite superannuation contributions in due form, were incurred at the end of each of the tax years in which those contributions should have been made. 58 It follows that, as Mr Christie commenced his proceedings on 15 May 2003, his claims in respect of the loss he sustained by reason of his failure properly to make those contributions are time-barred. 59 Finally, as regards the claim based on the confusion and disorder in Mr Christie's tax records, that loss was incurred no later than the time by which Mr Purves had brought those records into such a state that, reasonably, an independent review of those records was required by another accountant. At that date, the state of Mr Christie's affairs required him to incur the expense of putting them into good order. It was at that date that his loss was incurred. His loss was not incurred when Mr Mercer eventually sent him an invoice for his fees for his work in putting his tax records in order. 60 Mr Mercer was instructed to carry out a review in October 1996. Time then began to run. As Mr Christie commenced his proceedings on 15 May 2003, his claim for the loss represented by Mr Mercer's fees is time- barred. Causation 61 In view of the conclusion to which I have come in regard to the limitation defence, it is not strictly necessary for me to deal with causation. I should say, however, that no error in principle was identified in regard to the trial judge's reasoning on this issue. The argument in essence was that his Honour attached too much weight to the non-economic factors that he took into account when deciding that, even had Mr Christie known the true amount of his tax liabilities, he would have accepted his judicial appointment in September 1993. 62 I am satisfied that, although his Honour did not expressly say so, he took into account his assessment of Mr Christie's personality and character in concluding that Mr Christie would still have taken the appointment: cf Rosenberg v Percival (2001) 205 CLR 434. 63 While there is force in the argument Mr Christie advanced in this respect, the trial judge had an advantage over this Court in making the assessment that he did and I am not persuaded that he erred. Conclusion 64 I propose that the appeal be dismissed with costs. 65 BEAZLEY JA: I agree. 66 CAMPBELL JA: I agree. 67 BEAZLEY JA: The orders of the Court are those proposed by Ipp JA. I thank counsel for their assistance. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.