New South Wales Supreme Court CITATION : S W & M Brittain Pty Limited & Ors v Forsters [2009] NSWSC 609 HEARING DATE(S) : 04/05/09, 05/05/09, 06/05/09, 07/05/09, 08/05/09 JUDGMENT DATE : 1 July 2009 JURISDICTION : Common Law JUDGMENT OF : Michael Grove J DECISION : Judgment for the defendant. CATCHWORDS : NEGLIGENCE - Solicitor retained for lease of shop - Failure of business in new development - Credibility - No special point of principle CATEGORY : Principal judgment S W & N Brittain Pty Limited - First Plaintiff PARTIES : Stephen Wayne Brittain - Second Plaintiff Maria Brittain - Third Plaintiff John Reginald Forster - Defendant FILE NUMBER(S) : SC 2007/20180 COUNSEL : N Cotman SC - Plaintiffs P Taylor SC with J Watson - Defendant SOLICITORS : NOT Lawyers - Plaintiffs Yeldham Price O'Brien Lusk - Defendant IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MICHAEL GROVE J Wednesday 1 July 2009 2007/20180 S W & M BRITTAIN PTY LIMITED & ORS v FORSTERS, SOLICITORS JUDGMENT 1 HIS HONOUR: The three plaintiffs are husband and wife and a corporate vehicle through which they relevantly operated a retail delicatessen/fruit market (the shop) in the World Square Centre which was part of a development on a site formerly in the substantial occupation of the now defunct Anthony Hordern Department Store. The World Square Centre occupies an entire block in the southern quarter of Sydney CBD. The shop was part of a retail complex being established within the development which was new, both in the literal sense, and in the absence of the existence of any previous businesses. 2 The defendant is a solicitor who was retained by the plaintiffs in connection with securing the lease of the premises in which the shop was to operate from the lessor (Multiplex). There are disagreements about the precise date of the retainer, the extent of the defendant's obligations and instructions pursuant to the retainer and allegations of breach giving rise to this action claiming damages. 3 As will appear, the outcome will not depend critically upon the entire resolution of numerous contradictions between the parties which vary markedly in their scale of importance. Where it is appropriate, I will record my findings. When a dispute such as this has arisen and there is a substantial volume of documentation about which conversations and activity have been centred there is inevitably created a fertile field for counsel to plough as cross examination proceeds. This is not to criticize counsel nor the conduct of their respective cases but to observe that determination of this case essentially requires a finding as to which of the two witnesses who were cross examined was credible. It does not require an elaboration in respect of all the aspects and incidents which were the subject of detailed investigation as most of these were not necessarily significant in themselves but gave rise to claims of support or destruction of credibility. 4 The evidence included substantial affidavits and a large volume of exhibited material. There was oral evidence by way of cross examination of Stephen Brittain and of the defendant. Unless there is a reason to discriminate between the plaintiffs, which I will if necessary indicate, a reference to the plaintiff will be to Stephen Brittain. Fundamentally the contest turns on oral exchanges between him and the defendant. 5 I am satisfied that the defendant's pleading that he was retained on or about 10 August 2004 to finalise the terms of the lease of the shop is correct. There has been a long history of the defendant acting as a solicitor for the plaintiff in many matters including the lease of other shops. I accept that the plaintiff informed the defendant that he was contemplating setting up a shop in the World Square but I do not accept the assertion that there was a retainer in early July. I will later refer to a social occasion at about that time. As is recorded in a letter from the defendant to the letting agents dated 10 August 2004, the letter of offer from Multiplex to the plaintiffs bears date 26 July 2004 and I consider it unlikely that the defendant would have been retained prior to any offer having been made. The terms of the defendant's letter to the agents are consistent with his being retained once the offer was made and not beforehand. It is convenient to note that in connection with a proposal concerning commencement the defendant wrote: "In support of this proposal our clients business will be largely dependant upon traffic flow from Coles and other retail tenants". 6 It is obvious that the content of this statement must have emanated from the plaintiff. That content might be contrasted with later assertions by the plaintiff about claimed representations that there would be "funnelling" of customers into his shop as distinct from a traffic flow from other retailers. 7 Although the plaintiff now claims a dependency upon the defendant for advice on a very broad range of issues, it is noticeable that at the time (August), the plaintiff retained the relevant plan and was himself conducting relevant negotiations about the areas to be occupied by the shop. 8 It is important to observe that the plaintiff is no novice retailer. At the time he was conducting and is continuing to conduct a retail delicatessen at the Westfield Complex at Chatswood. Over the years he has, on some occasions in partnership, conducted other retail businesses including the sale of fruit and vegetables. Not all of these ventures were successful and I consider it to be of particular significance that one of these at Darling Harbour involved disputation concerning, inter alia, pre lease representations whereby the plaintiff must have learned (if he did not already appreciate) how crucial it was to have accurately recorded a specification of any representation upon which he was relying in order to enter a retail lease agreement. 9 It is also of more than passing interest to note the relative modesty of the account for fees rendered by the defendant which charged for eight hours of work. The plaintiff did not complain that whatever the defendant was retained to do it could not have been fulfilled in that period of time and the span is entirely consistent with the defendant's assertion that his retainer was to finalise the terms of the lease. He acted as a solicitor and not as a general business adviser. 10 On 18 October 2004 a conversation between the plaintiff and the defendant occurred and was confirmed by a letter written by the defendant on that date. I accept the accuracy of the content of that letter which reveals that the defendant had received four documents from the solicitors for Multiplex, namely a disclosure statement, an agreement for lease, a lease and the fit-out guide. I am satisfied that the plaintiff was well familiar with these forms of documentation including the disclosure statement and I reject any contention that it was a reasonable requirement for the defendant to elaborate beyond what was contained in the letter. It is confirmatory of the defendant's candour that he there disclosed that he had not completely read the retail fit-out guide but the express advice and cautions in the eleven numbered paragraphs on page 2 of that letter fulfilled his duty to advise the plaintiff. 11 It would scarcely be the role of a solicitor to attend to the detail of shop fit-out but the final caution in the letter from the defendant to the plaintiff is pertinent: "We suggest that you speak to the fit-out representative from Multiplex before signing the lease to familiarise yourself further with the entire fit-out process, which seems incredibly complex." 12 At one point the plaintiff asserted that the defendant had been in possession of a copy of the fit-out guide at an earlier point of time. I reject that contention and I accept that it was received for the first and only time by the defendant in accordance with what is stated in the letter of 18 October 2004 namely that it was one of the documents sent by the lessor's solicitors. I regard it as consistent with the time charged by the defendant for the performance of his professional services that he was not expected to be involved in the detail of fitting out the shop in accordance with the requirements of the lessor. An analysis of the fit-out guide would I expect have considerably extended eight hours as the time spent. 13 The plaintiff occupied the premises for the purpose of fit-out in May 2005 and commenced trading in July 2005. It was ceased in November 2005. It was common ground that the business was a failure, one description of the project being that it was a disaster. The first basis of the plaintiff's claim for damages from the defendant in respect of the venture is set out in paragraph 5 of the statement of claim: "5. As part of his instructions on behalf of the First Plaintiff and Third Plaintiff, the Second Plaintiff informed the Defendant that Multiplex through its servants and agents had made representations verbally and in writing that at the time of commencement of the lease: (a) there would be unimpeded access to the centre by road and monorail; (b) the location of the premises would act as a 'funnel' for shoppers; (c) there would be a diverse customer base being commercial, residential and tourist; (d) the premises were located within 7 minutes walk of 16, 828 residents, 35,000 workers, 30% of the CBD workforce; (e) there would be high frequency purchases by shoppers; (f) there would be extensive ongoing marketing campaigns; and (g) weekly sales would likely exceed $100,000. PARTICULARS The instructions were given by the Second Plaintiff on behalf of the First and Third Plaintiffs to John Forster, at the offices of the Defendant, on or around July/August/September 2004." 14 Despite the vagueness as to point of time in the particulars just quoted, the plaintiff's affidavit of 11 June 2008 expressly deposed: "On the Saturday night the Defendant and his girlfriend 'Fiona' arrived at our house. I prepared some pre-dinner drinks and the Third Plaintiff prepared some hors d'oevres. I then got out the brochure provided to me by Multiplex to show to the Defendant. I showed him the brochure and we had a conversation in words to the following effect: Me: "The premises are situated in a new building and have not been previously occupied. The premises need a new fitout and this will be very expensive. Multiplex has told us that:" (there followed the alleged representations set out in pars (a) to (g) as set out in the extract from the pleading above. 15 The plaintiff's affidavit continued: "We are relying on all of these matters in deciding whether to proceed with the Agreement for Lease. We need your advice on what to do." The Defendant: "Let me congratulate you. I always knew you had another big move still left in you. What about we keep the rest of the evening social and not talk about business. I've bought shares in Multiplex. The lease is not as bad as Westfield but give them time, they'll get there. You'll have to make an appointment to sign everything and anything we need to talk about, we can talk about then." The Defendant then pointed to a part of the brochure and said: "See this. It is a general disclaimer. It means that you have to rely on your own enquiries. Of course, Blind Freddy can see that this brochure will influence you. The disclaimer does not mean very much. I still have not had time to go through the Agreement for Lease and the proposed Lease property yet but I will do." 16 I do not accept this evidence of the plaintiff. It is necessary however to make reference to the circumstances in which the defendant came to attend at the plaintiff's home. (Even though the particulars refer to the defendant's office). 17 Given their long association, it is not surprising that there was some informality in the dealings between the plaintiff and the defendant, however an invitation to dinner was not part of any pattern of engaging in a mixture of business and social occasion. Not only is there dispute about what happened at the dinner, there is disagreement about when it took place. The defendant contended that it occurred in July and the plaintiff that it was in early September. I record that I rejected a belated attempt to put a diary into evidence which, as I understood, was not asserted to record the event but would by reconstruction from other recorded events, lend some support to the plaintiff's contention as to date. However, the important issue is what, if anything, of relevance happened at the dinner party. 18 It was common ground that at the dinner party the plaintiff produced the glossy brochure of which Exhibit A is a copy. The plaintiff claimed that his instructions to the defendant conveyed the content of and his reliance upon representations made by the lessor's agent Mr Leahy. One of these, as pleaded, asserted that there had been a representation "(b) the location of the premises would act as a 'funnel' for shoppers." When being cross examined the plaintiff was emphatic about this and made repeated reference to the "funnel". 19 The introduction of a notion of a funnel appears in the brochure which proclaimed on a separate page: " THINK OF A FUNNEL IN AN ACCESS SENSE THAT'S JUST HOW WORLD SQUARE OPERATES, WITH ITS ENTIRE CITY BLOCK LOCATION, WORLD SQUARE IS A CENTRAL HUB FOR PUBLIC TRANSPORT AND PARKING, THE ENTERTAINMENT PRECINCTS AND CHINATOWN." 20 Opposite this proclamation is a somewhat sophisticated version of what might be called a mud map showing arrowhead pointers converging on the World Square site as a "central hub". As I have noted, the site is in the southern quarter rather than the centre of the CBD but it is the expression of a "funnel" which attracted attention. I find that it is probable that what appears in the brochure about World Square operating as a funnel, that is bringing people to the site has (assuming the absence of deliberate prevarication) transcended into the plaintiff's mind as a contention that the location of his particular shop would act as a funnel of customers to it rather than what the brochure indicates, that (hopefully) people will be funnelled into the World Square site generally. 21 There are other reasons for my rejection of the credibility of what the plaintiff alleges took place at the dinner party. 22 Although the offer to the plaintiff by Multiplex bore date in late July, his initial affidavit evidence was that he had discussed the project including the disclosure statement some time before the dinner. The evidence of course is complicated by the dispute as to when the dinner took place. I have already noted when the solicitors for Multiplex supplied relevant documents to the defendant and I am satisfied that he was in possession of no relevant documents before the dinner party and what he saw there was the brochure. 23 There is some confirmation of the general nature of anything relating to the proposed shop being discussed at the dinner party in the affidavit of Ms Fiona Johnson. 24 I add that the defendant's evidence, which I accept, that in his thirty four years as a solicitor he has never conducted a conference at a dinner party nor would he contemplate so doing is compatible with the level of formality exhibited in his correspondence with the plaintiff despite their long years of association. 25 The first foundation of the plaintiff's case was the claim that Mr Leahy had made the representations set out in pars 5 (a) to (g) of the statement of claim and that the plaintiff had instructed the defendant that in reliance upon them he was entering the agreement. 26 Each alleged representation bears analysis. Some concessions were made in the course of cross examination but it suffices for present purposes to analyse the content without dilating at length upon the content of cross examination. 27 With reference to par (a) it was only a matter of simple observation that access to the World Square was available by road and by monorail. It is not clear what might be thought to be added to the concept by describing access as "unimpeded". In the circumstances it would have been ludicrous for Mr Leahy to have solemnly incanted what was plain for anyone to see. I am not satisfied that he made such a representation in those or any like terms, hence no question of reliance could arise nor am I satisfied that the plaintiff informed the defendant to that effect. 28 I have earlier commented upon the claim (par (b)) that the location of the premises (that is, the shop) would act as a funnel for shoppers. The plaintiff had visited the site on multiple occasions both before and during the fit-out process where the location of entrances, exits, passages and lifts was a matter for available observation. A considerable time at the hearing was spent exploring the plaintiff's assertions concerning the delivery of lift passengers from the upper floors. In various parts of the complex there were residences, offices and a hotel. It would obviously be a matter for individual decision for each lift passenger whether to get out at any particular floor and I do not accept that Mr Leahy would have made any representation so ridiculous as to warrant that lift passengers would be delivered to the vicinity of a particular shop and I do not accept that the plaintiff said any such thing to the defendant. 29 Par (c) is a prime example of what I find to be the plaintiff's willingness to make exaggerated assertion which he perceives to be in his own interest. The World Square development did establish buildings for the occupation of commercial and residential tenants. There was also a hotel and it would not be doubted that some of the guests would be tourists. It was not at the hearing suggested that it was untrue that there was a "diverse customer base being commercial, residential and tourist" and I do not accept that the plaintiff instructed the defendant that he was relying upon a representation to that effect in order to decide whether to enter the lease. Of course the content of the brochure included reference to four office buildings, 900 odd apartments and a hotel of 250 rooms, and that was accurate. This provided a base but whether the people involved would shop at the plaintiff's establishment would be appreciated to be entirely a matter for them. 30 The next claimed representation (d) was apparently derived from the brochure although if the reference to 16,828 residents as distinct from 16,800 residents (mentioned in the brochure) is not a typing error, the difference is insignificant. Once again, what the plaintiff seeks to rely upon as an unfulfilled representation about which he gave instructions to the defendant is really a proposition which is defeated by the simple and obvious circumstance that what was said in the brochure was true. 31 That there would be high frequency purchases by shoppers was attributed to Mr Leahy as an oral representation made by him to the plaintiff. Mr Leahy did not give evidence but I would consider it highly unlikely that a man working as a letting agent for a major commercial undertaking would purport to predict frequency of purchase without, to say the least, personal knowledge of the quality of the goods on sale and the prices that the shopkeeper was intending to charge. As I shall indicate when dealing with par (g) the evidence of the plaintiff himself makes it plain that the frequency of purchases, gauged by takings, was a matter of his own estimate and not a matter about which he was relying upon anything emanating from Mr Leahy. Indeed, as the plaintiff acknowledged, he adjusted what he anticipated to be the takings in his negotiations with Mr Leahy in order to benefit himself in the setting of rent. 32 So far as the alleged representation (f) is concerned it suffices to observe that the conduct of marketing campaigns was a matter dealt with contractually. The plaintiff was well aware of what was taking place and was sufficiently astute in protecting his own position to exclude himself from contribution to the opening promotional advertising for the Centre. 33 I turn finally on these allegation in (g) which asserts that it was represented to the plaintiff that the weekly sales would likely exceed $100,000. As the evidence showed, it is plain that this figure emanated from the plaintiff. Although pleaded, it may be observed that in his first affidavit the plaintiff did not assert a representation by Mr Leahy to this effect. 34 He did testify that he handed to Mr Leahy a sheet showing a need for a turnover of that amount and he did so in order to advantage himself in the negotiations concerning rental. He conceded that he actually believed that takings of $70,000 would enable profitable operation. At no time did Mr Leahy represent likely takings of $100,000 or any other sum. 35 Senior counsel for the defendant submitted that the circumstances surrounding this allegation showed a capacity of the plaintiff to perceive events in his own self interest. I agree with that submission. 36 The whole of the pleaded representations and the various reasons for rejecting them culminate in a finding which I make that the plaintiff was not a credible witness. Apart from those reasons, I formed a strong impression that the plaintiff sought to assign blame for the failure of the shop to anything external to himself and avoided contemplation that the public as potential customers were simply not attracted to the shop. I also observed a similar display of attitude when the plaintiff was questioned about the failed Darling Harbour venture. It is not necessary to enter upon detail about this but again the stance of the plaintiff was that it was someone else's fault that success eluded that venture. 37 The statement of claim continues to plead further instructions to the defendant said to have been given in his office in July/August/September 2004. It was alleged that he was instructed that the building was new. This was perfectly obvious and, rather than in an office, at the dinner party the production of the brochure would have shown that this was a new development. 38 It was said that the defendant was instructed that the fit-out would be expensive. Apparently it was, but it is somewhat unclear what it is asserted should have been done by the solicitor in response to being informed by his client that the client was spending a lot of money other than to urge care. That advice is common sense rather than legal advice. 39 It was said to have been instructed in August/September that the plaintiff (and Mrs Brittain) were agreeing to act as guarantors on the lease by reason of the representations. Other than what appeared in the brochure which I assume would have been read by her, it does not appear that Mrs Brittain was the recipient of any direct representations. It is convenient to note that Mrs Brittain deposed that she would not have undertaken the guarantee if she had been told that she might lose her home which was being offered as security. I do not accept that Mrs Brittain could have genuinely harboured a belief that the giving of security over property was something of a charade in the sense that default would not lead to the security being called upon. It is significant to note that the defendant's evidence that he was not privy to the plaintiffs' finances was not challenged. 40 There is a further claim that the defendant failed to advise the plaintiff of the effect of the disclosure statement. At the end of the hearing, I gained the impression that less confidence was reposed in the plaintiff's case based upon the particularised representations and greater focus was sought to be directed to the assertion of a failure by the defendant to advise about what should be included in the lease agreement and to advise in respect of the content of the disclosure statement. 41 To this point I have substantially dealt with what I have considered to be deficiencies in the plaintiff's case. I should deal with the evidence of the defendant. In contrast with the plaintiff I did not form an adverse view as to the defendant's credibility. The correspondence and the activity which he described himself as taking demonstrated an orderly and appropriate application to the professional task for which he agreed he had been retained. My opinion as to his credibility was fortified by his explanations about the notations on particular documents which were generally consistent with his descriptions of the tender of advice to the plaintiff. I do not ignore the cross examination upon particular notations but parsing and analysing what were obviously written as aids to conference did not persuade me that the defendant was not discharging his duty as he testified. 42 The transcript shows that the only two people who gave oral evidence were extensively questioned on detail in relation to a large number of exhibited documents. Nevertheless the thrust of cross examination was to the issue of credibility and the outcome of this case can turn upon my conclusion in that regard. No point would be served by elaborate discussion of the detail of collateral attacks. For the reasons which I have indicated, I have found that the defendant was a credible witness and the plaintiff was not. 43 There was a somewhat faint reference to the existence of an independent duty of the defendant towards Mrs Brittain and, of course, that existed. The evidence shows however that she in effect acted in concert with her husband and I am not satisfied that any breach of duty by the defendant towards her has been shown. 44 It inevitably follows upon my findings as to credibility that the action must fail and accordingly I direct entry of judgment for the defendant. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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