Fiuggi Holdings Pty Ltd v Lamrocks Legal Pty Ltd trading as Lamrocks Solicitors and Attorneys; Actively Zoned Pty Ltd v Lamrocks Legal Pty Ltd trading as Lamrocks Solicitors and Attorneys [2012] NSWSC 1388

Supreme Court New South Wales

Medium Neutral Citation: Fiuggi Holdings Pty Ltd v Lamrocks Legal Pty Ltd trading as Lamrocks Solicitors and Attorneys; Actively Zoned Pty Ltd v Lamrocks Legal Pty Ltd trading as Lamrocks Solicitors and Attorneys [2012] NSWSC 1388 Hearing dates: 19 - 24 September 2012 Decision date: 30 October 2012 Jurisdiction: Common Law Before: Rein J Decision: Judgment for the plaintiffs plus interest and costs. Catchwords: EQUITY - general principles - fiduciary obligations - where law firm entered into put and call options with respect to real property to be developed by client - where put and call options were wholly favourable to the law firm - where lawyer knew that client intended to fund purchase and development of second property with law firm's prospective purchase of first property - where there was a failure to advise client that it should obtain independent advice - law firm breached its fiduciary duty to client

DAMAGES - measure of damages for breach of fiduciary duty - where defendant failed to execute contract to purchase real property under put and call options - amount plaintiff would have achieved had it entered into a contract with another party - discount for contingencies or vicissitudes - global financial crisis and its effect on completion of hypothetical contract

DAMAGES - measure of damages - claim for rent and capital gain lost as a consequence of forced sale - where damages already awarded for sale of property at a loss - where no evidence of market value of property after the forced sale - inadequate submissions and evidence for award of such damages

DAMAGES - measure of damages - causation - costs of audit and report required by the bank - where requirement arose because of bank's concern as to plaintiff's ability to service its debts - where plaintiff's financial burden was consequential upon defendant's default - cost should be borne by defendant Legislation Cited: Competition and Consumer Act 2010 (Cth) Practice Note SC Gen 16 Cases Cited: Burger King Corp v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558 Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473 Glenmont Investments Pty Ltd v O'Loughlin (No 2) [2001] SASC 88; (2001) 79 SASR 288 GM & AM Pearce & Co Pty Ltd v Australian Tallow Producers [2005] VSCA 113 Hartle v Laceys [1999] 1 Lloyd's Rep PN 315 Orchard Holdings Pty Ltd v Paxhill Pty Ltd as Trustee for Paxhill Trust trading as Property People [2012] WASC 271 Rosser v Marine Ministerial Holding Corp (formerly Maritime Services Board of NSW) [1999] NSWCA 72 Stockl v Rigura Pty Ltd [2004] NSWCA 73 Texts Cited: N C Seddon, R A Bigwood and M P Ellinghaus, Cheshire & Fifoot's Law of Contract, 10th Aust ed (2012), LexisNexis Butterworths M Spencer, J Picton and H McGregor, McGregor on Damages, 18th ed (2009), Sweet & Maxwell/Thomson Reuters Category: Principal judgment Parties: Fiuggi Holdings Pty Ltd (Plaintiff in 2008 proceedings) Actively Zoned Pty Ltd v Lamrocks Legal Pty Ltd (Plaintiff in 2010 proceedings) Lamrocks Legal Pty Ltd trading as Lamrocks Solicitors and Attorneys (Defendant) Representation: Counsel: A Black; D Priestly (Plaintiff in 2008 proceedings) I Roberts SC; P Khandhar (Plaintiff in 2010 proceedings) R Darke SC; M S White (Defendant) Solicitors: Burston Cole & Mulock (Plaintiffs) Yeldham Price O'Brien Lusk (Defendant) File Number(s): SC 2008/289662; SC 2010/276435