Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Lucantonio v Stichter [2014] NSWCA 5 Hearing dates: 4 March 2013 Decision date: 06 February 2014 Before: McColl JA at [1], Basten JA at [96], Barrett JA at [145] Decision: (1) Appeal dismissed with costs. (2) Cross-appeal dismissed. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: TORTS - professional negligence - causation - where appellant retained respondent solicitor on purchase of commercial property - where appellant paid deposit on property to vendor - where appellant was subsequently advised that proposed redevelopment of property could not proceed without further council approval and increased building costs - where appellant unsuccessfully sought to postpone settlement and negotiate reduced price or compensation with vendor - where appellant failed to complete contract following service of a notice to complete and vendor terminated contract - where respondent negligently failed to prove timely advice to the appellant following service of the notice to complete that completion of the contract was the "safest option" - whether respondent's negligence caused the appellant's loss - whether appellant would have completed the contract even if the respondent had provided him timely advice Legislation Cited: Civil Liability Act 2002 Conveyancing Act 1919 Environmental Planning and Assessment Act 1979 Fair Trading Act 1987 Cases Cited: Adeels Palace Pty Ltd v Mourbarak [2009] HCA 48; (2009) 239 CLR 420 Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 Kocis v SE Dickens Pty Ltd [1998] 3 VR 408 Lesandu Blacktown Pty Ltd v Gonzalez [2013] NSWCA 8 Lucantonio v Ciofuli [2002] NSWSC 509 Lucantonio v Ciofuli [2003] NSWSC 1058 Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 Wallace v Kam [2013] HCA 19; (2013) 87 ALJR 648 Category: Principal judgment Parties: Dean Lucantonio - Appellant Otto Stichter - Respondent Representation: Counsel: G Laughton SC - Appellant G Curtin SC - Respondent Solicitors: Gells Lawyers - Appellant DLA Piper Australia - Respondent File Number(s): CA 2004/176817 Publication restriction: No Decision under appeal Citation: Lucantonio v Kleinert [2011] NSWSC 753 Date of Decision: 2011-07-20 00:00:00 Before: Brereton J File Number(s): SC 2004/176817 Judgment 1McCOLL JA: In 2001 Mr Dean Lucantonio, the appellant, and his wife Paulette Lucantonio, as trustees of the Lucantonio Family Trust, entered into a contract to purchase a commercial property at [XX] Majors Bay Road, Concord (the "property") from Lucia Ciofuli (the "vendor"). The purchase price was $2,200,000. They paid a deposit of $220,000 on exchange. The appellant wished to redevelop the property in accordance with plans annexed to the contract for which the local council had given development approval. He retained Mr Otto Stichter, the respondent, to act as the solicitor on the purchase. 2Prior to settlement, Mr Kleinert, an architectural consultant retained in respect of the proposed development, advised the appellant that the redevelopment could not proceed on the basis of the number of car-parking spaces shown in the approved plans and that much more extensive (and expensive) work would be required to construct them. The appellant sought to postpone settlement and negotiate an altered price with the vendor. The vendor issued a notice to complete the contract with which the appellant did not comply. The vendor terminated the contract. The appellant was unsuccessful in legal proceedings seeking to challenge the termination and to recover the deposit (the "Equity proceedings"). 3The appellant and Dino Lucantonio, as the current trustees of the Lucantonio Family Trust (the "Trust"), commenced proceedings against, inter alia, the respondent, alleging that his professional negligence in acting on their behalf on the attempted acquisition had caused or materially contributed to the trust losing the deposit and the possibility of substantial profits from the redevelopment, and incurring the costs of the abortive acquisition and of the unsuccessful litigation. Mr Kleinert and Mr Warren, the barrister retained for the Equity proceedings were also defendants in the proceedings, against whom the same claims of loss were made, albeit in respect to the capacities in which each had been retained by the Trust. 4The primary judge found that the respondent was negligent in failing to provide timely advice to the appellant regarding the notice to complete. However, his Honour dismissed the claim on the basis that, even if so advised, the appellant and his wife would not have completed the purchase by the payment of the undiscounted purchase price, so that they failed to establish that the respondent's negligence caused or materially contributed to their loss. His Honour also dismissed the claims against Mr Kleinert and Mr Warren on the basis that neither had breached the duty of care owed to the Trust: Lucantonio v Kleinert [2011] NSWSC 753. 5The appellant only appeals against the primary judge's decision to dismiss the claim against the respondent. The only issue which arises on appeal is his Honour's conclusion on the causation issue. The respondent filed a notice of cross-appeal contesting the finding that he had been negligent. However, the parties advised the Court at the outset of the hearing that the cross-appeal should be dismissed by consent. 6For the reasons that follow, I am of the view that the primary judge's finding on causation should not be disturbed and that the appeal should be dismissed. 7Although the appellant and his wife on behalf of the Trust were the purchasers under the contract for sale, the proceedings have been conducted on the basis that the causation issue turns on what, properly advised, the appellant would have done. Statement of the case 8The background to the case can be extracted from the primary judgment, with pertinent observations the primary judge made included at the relevant chronological juncture. 9The respondent had had a lengthy professional relationship with the appellant: primary judgment (at [13]). 10The contract for sale relevantly provided (primary judgment (at [4] - [7])): "6 Error or misdescription 6.1 The purchaser can (but only before completion) claim compensation for an error or misdescription in this contract (as to the Property, the title or anything else and whether substantial or not). ... 7 Claims by purchaser The purchaser can make a claim (including a claim under clause 6) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion  7.1 the vendor can rescind if in the case of claims that are not claims for delay  ... 7.1.2 the vendor serves notice of intention to rescind; and 7.1.3 the purchaser does not serve notice waiving the claims within 14 days after that service; and 7.2 If the vendor does not rescind, the parties must complete and if this contract is completed  7.2.1 the lesser of the total amount claimed and 10% of the price must be paid out of the price to, and held by, the deposit holder until the claims are finalised or lapse ..." ... Special Condition 40 40. The purchaser acknowledges that annexed to the contract is a Notice of Determination of a Development Application ... [and] [t]he Purchaser agrees that they shall not raise any objection, requisition, claim for compensation or be entitled to delay completion because of the said Notice or accompanying documents." 11The Lucantonios paid a deposit of $220,000. The scheduled completion date under the contract was 16 January 2002: primary judgment (at [3]). 12The City of Canada Bay Council ("the Council") had given development approval for a commercial redevelopment of the property, involving the demolition of the existing building and the erection of a building comprising retail shops, commercial units and 21 underground car parking spaces on two levels: primary judgment (at [3]). The Council's Notice of Determination in respect of the development application and approved plans for the proposed development were annexed to the contract: primary judgment (at [8] - [9]). 13Pursuant to Condition 1 of the Notice of Determination, any minor modification of the approved plan would require an application to modify consent under the Environmental Planning and Assessment Act 1979 ("EPA Act") and major modifications would require a new development application. Conditions 3, 4, 5 and 7 pointed to the need to comply with the Building Code of Australia 1996 and to obtain a construction certificate. Conditions 37, 38, 40 and 41 related to off-street parking, and stipulated that no fewer than 21 car parking spaces be provided in accordance with the approved plans for the parking of resident and visitor vehicles on the site: primary judgment (at [8]). 14The primary judge (at [10]) described the development approval as "fundamental to the Lucantonios' commercial decision to purchase the property". As his Honour explained (at [11]), the appellant "is a builder, who also has experience as a property developer, and lives in the locality of the property", whose evidence was: "[T]hat he and his wife decided to purchase the property with the intention of developing it in accordance with the approved development application, and that without the development approval they would not have done so. Mr Lucantonio had had some unfavourable experiences in dealings with the Council, and was strongly disinclined to acquire properties without development approval, because of the associated risks and delays; indeed, his experiences had been such that he had resolved never again to buy a development site with a view to obtaining development approval after acquisition. He was aware that any modification of the plans would involve an application to the Council, which in his experience could be difficult and involve significant delay and costs, and which he considered fraught because of his poor history with the Council. It was also his view, and obvious enough, that without the development approval, the property would not have been worth the price he agreed to pay." 15Following exchange of contracts, the Lucantonios arranged finance of $3,867,000 to fund the purchase as well as the development. Mr Stichter issued "standard requisitions on title on 8 November 2001, [which] raised no question about the development approval, and were answered on 12 November 2001": primary judgment (at [15]). 16The Lucantonios engaged Mr Kleinert, an architectural consultant, to undertake the necessary work so that they could obtain a construction certificate and proceed expeditiously with the development. The appellant explained to Mr Kleinert that "he could not afford to have the matter sitting in Council for six months with the overheads he was paying and his history with the Council": primary judgment (at [16]). 17After inspecting the property, Mr Kleinert spoke, and wrote, to the appellant on 21 November 2001 advising that there had been errors and omissions from the development approval drawings annexed to the contract, that there was insufficient space to fit 21 compliant car parking spaces and that to fit that number of car parking spaces would require an additional basement level of parking, increased building costs and a new development application, or at the least an amendment under s 96 of the EPA Act: primary judgment (at [18]). 18The appellant sent Mr Kleinert's letter to the respondent and consulted him on 22 November 2001. He told the respondent that he "really wanted the property but could not go back to Council for significant amendments; [and] could not afford the time and the money to go back to Council for a new approval": primary judgment (at [19]). 19The respondent then advised the appellant of the following options (primary judgment (at [19])): (1)seek compensation from the vendor by way of a reduced price pursuant to standard condition 7 of the contract; (2)settle the purchase and claim damages later; (3)seek a declaration as to whether he was entitled to terminate the contract; or (4)institute proceedings for specific performance and for damages for misleading and deceptive conduct under s 42 of the Fair Trading Act 1987, on the basis the vendor was conveying something substantially different from what the appellant had contracted to buy. 20On 22 November 2001, the respondent wrote to the vendor's solicitor on a without prejudice basis referring to the problems Mr Kleinert had identified. The letter required the vendors to bear the cost of obtaining amended plans and applying for variation of the Council's consent, as well as additional building professionals' costs, while preserving the appellant's right to rescind the contract if the Council refused to amend the development approval. The vendor's solicitor responded on 27 November 2001 stating that the property had been sold with the approved development application available for inspection, that the vendor was not convinced by Mr Kleinert's "assertions", contending that special condition 40 precluded the appellant's claim and that settlement was required on 16 January 2002: primary judgment (at [20]). 21On 3 December 2001, the appellant, the respondent and Mr Warren conducted a telephone conference in which the respondent "explained the nature of the problem, and that Mr Lucantonio wanted to keep the property, but at a reduced price". Mr Warren and the respondent both discussed possible courses of action. The appellant asked the respondent what he should tell the bank. The respondent advised against telling the bank at that stage, which advice the primary judge observed, was "reasonable enough in circumstances where he was still negotiating with the vendor": primary judgment (at [21] - [22]). 22The appellant obtained a second opinion concerning the feasibility of the car parking places in the approved plans. On 13 December 2001 Mr Ross Nettle, a consultant in transportation and traffic planning, advised "that the plans with the development approval did not truly depict the existing structural elements, with the consequence that there were significant non-compliances relating to the parking spaces, and that it would not in reality be possible to achieve 21 parking spaces and satisfy Council's code and consent conditions". The primary judge concluded that Mr Nettle's advice confirmed the appellant's view "that there would have to be a redesign, and that the Council would have to be asked to modify the development approval so as to allow for an extra level of basement car parking, with further excavation, to obtain 21 spaces - which would incur the delays and holding costs associated with an application to Council, and also involve substantial additional construction costs": primary judgement (at [25]). 23On 21 December 2001, the Lucantonios initiated the Equity proceedings against the vendor, claiming specific performance, in addition or in substitution damages, and also damages for misleading and deceptive conduct under the Fair Trading Act 1987: primary judgment (at [26]). 24The Lucantonios did not complete the contract on 16 January 2002. On 17 January, the vendor's solicitor gave a notice to complete, appointing 2 pm on 6 February 2002 as the date for completion. The respondent responded on 18 January, denying the vendor's entitlement to issue the notice to complete and disputing that the vendor was ready and willing to transfer the property in accordance with the contract: primary judgment (at [27]). 25The primary judge found (at [28]) that on or about 17 January (the judgment refers to "February" but, it is common ground, should have said "January"), the respondent conveyed to the appellant, and the appellant understood the effect of, the notice to complete, the appellant said that he did not want to settle without a reduction in the purchase price and, at that time, the appellant had finance approval and by 7 January 2002 all requisite documents for that purpose had been executed. 26The vendor's solicitor sent settlement figures to the respondent on 31 January 2002 in a letter which also advised that the vendor would terminate the contract on 6 February if it was not completed: primary judgment (at [29]). 27On 1 February 2002, the respondent sent a facsimile to Mr Warren which advised of progress in relation to the Equity proceedings, enclosed the vendor's solicitor's 31 January letter and relevantly stated (primary judgment (at [30] - [31])): "6. Dean wants to buy the property but would like compensation by reason of the matters the subject of his Supreme Court proceedings. 7. However because of those matters needing to be disclosed to his incoming mortgagee, he will have difficulties with finance. 8. The approval he had for finance has now lapsed. 9. Would you please call me to discuss appropriate action relative to the solicitor's fax and in relation to the matter generally. 10. The options I see: a. Seek urgent injunction to restrain the threatened termination. b. Seek urgent orders that the Notice to Complete is invalid. c. Dispute the termination post-termination and caveat the title." 28The primary judge observed (at [31]) that the statement that the appellant's finance had lapsed was incorrect as he had a new approval from the National Australia Bank. He also observed that the respondent did not raise "the prospect of completing the purchase and claiming damages after the event". 29A telephone conference took place, on the primary judge's findings (at [36]), on 4 February 2002 between the appellant, the respondent and Mr Warren. There was conflicting evidence about what was said during the conference, about which the primary judge found: "It may well be that one or both of the lawyers said that if the vendor terminated, it could and should be argued that the notice to complete was invalid, but I do not accept that either gave unqualified advice to the effect that it could safely be ignored. Such advice would be quite inconsistent with the approach of all participants between 1 and 5 February, [which] ... involved addressing which of several potential courses of action should be adopted in response to [the notice to complete], and (on 4 February) seeking to negotiate with the vendor. Insofar as they [i.e. the respondent and Mr Warren] gave advice on these matters, I find that it was to the effect that these were positions and arguments that could be adopted on behalf of the Lucantonios in certain events; not that they were the best or safest or an assured course of action. It is far more likely that the advice was to the effect asserted by Mr Stichter and Mr Warren, that if the vendor were to terminate, Mr Lucantonio could dispute the termination on the basis that the development approval was invalid. I find that Mr Warren gave advice to that effect in a telephone conference on Monday 4 February 2002. It is significant that, on Mr Stichter's version, the suggestion that there would be trouble with the Bank if the problems with the DA were disclosed was raised by him, and not by Mr Lucantonio." 30On 4 February 2002, the respondent sent a without prejudice letter to the vendor's solicitor disputing the validity of the notice to complete, but offering to complete the sale, provided that time for completion was extended to 13 February and the sum of $300,000 was withheld from the purchase money and retained in the respondent's trust account pending determination of the appellant's claim for damages: primary judgment (at [37]). On the same day the respondent spoke to the vendor's solicitor, again on a without prejudice basis, and proposed that the appellant recover the deposit and accrued interest and each party walk away from the transaction: primary judgment (at [38]). The vendor rejected both offers by facsimile letter dated 5 February 2002: primary judgment (at [38] - [39]). 31On 5 February 2002, the day before the settlement date in the Notice to Complete, Mr Warren had a telephone conversation with the appellant, about which he made a detailed file note, as follows (primary judgment (at [40]): "5 February, 2002 Lengthy telephone conference - Mr Lucantonio concerning the various options that he has and discussing the case generally. I indicate the consequences of failing to complete in accordance with a valid Notice to Complete and also point out that if the Notice to Complete is invalid then the termination is no more than a repudiation i.e. the contract still remains on foot. If the termination is valid then the purchaser will lose the deposit and, subject to the price of the property, may be liable for damages. One need only look at the argument to see the problem in the vendor's case in that if the property is now only worth $1.5 million, it is worth that figure not because the property market has dropped but because the purchaser could not build the property for which purported development consent has been issued. Therefore the property is worth less because there will need to be further work done on it. If the termination is invalid and the contract is on foot then the purchaser can seek specific performance and damages. Mr. Lucantonio asks whether if he settles it would be possible then to sue the vendor for damages. I indicate that in my view it would providing one reserved one's position as to this so that there is no merger on completion. The difficulty that may flow from such a course is that if the funds are disbursed it may be difficult to recover the damages from the vendor. The third alternative is to continue to seek specific performance with compensation i.e. maintain the current position. Mr. Lucantonio asks what his chances are. I state that in my opinion his chances are good but I cannot give any assurance as there are too many vagaries in litigation. He will speak to Otto Stichter who may then call me. We also discussed the question of claiming compensation under the contract but on looking at the contract it appears that Clause 7.1.1 has been deleted and therefore one cannot claim compensation under the contract." 32The primary judge made the following observations and findings about this conference (at [41]): "Thus, according to Mr Warren, it was Mr Lucantonio who raised the question of completing the purchase and pursuing a claim for damages, and expressed no surprise when Mr Warren confirmed that it was an option; in this respect I accept Mr Warren's version. However, I do not accept that (as asserted by Mr Warren but denied by Mr Lucantonio) Mr Lucantonio said that he could not get the loan if the DA was no good: no such statement is reflected in Mr Warren's file note, and it would be inconsistent with the then status of the Lucantonios' finance application with National Australia Bank." 33Also on 5 February 2002, the appellant and the respondent exchanged three significant communications. 34The appellant sent a hand written facsimile to the respondent at 6.05 pm which, as transcribed in the primary judgment (at [43]), stated: "I will not be phonable [sic, as in original] until after [illegible]. I ask the following: 1) If our stand is that they do not have a right to terminate: Can we (preferable for me!! Is it risky?) A) Seek to have their termination made invalid, Then, B) Continue with our initial claim. 2) If there is no way to achieve our initial objective then bail out. But: A) What's the difference between 1. Us terminating now & haggling over deposit 2. Waiting for them to terminate, seek to have that nullified & terminate claims & haggle over the deposit. B) If we terminate now they may realize that we're not bluffing." 35The primary judge observed (at [44]) that: "This facsimile contained no hint that completing the purchase was an available course, although Mr Lucantonio had raised and discussed that option with Mr Warren. References to the 'initial objective' appear to be to the objective of completing the purchase at a reduced price, or having $300,000 withheld pending determination of the Lucantonios' claim." 36The respondent replied to the 6.05 pm facsimile later that evening with a facsimile to the appellant recording his understanding of the history of the matter. The primary judge noted (at [45]) that "[t]his is a central communication, both because it is the closest that there is to a contemporaneous record of the events on Mr Stichter's part, and because it lies at the heart of the complaints against Mr Stichter." The facsimile stated (primary judgment (at [45])): "Dear Dean, 1. You bought property X with a development consent. 2. Subsequently you found out that the plans submitted for the consent do not work and that the consent cannot be implemented as is. 3. The Council is not liable because they rely on the plans being accurate and they condition the consent as to further certifications being needed. 4. We then say to the Vendor 'Give us compensation because the development consent you represented as valid and effective can't work'. 5. They then say 'No, you bought it with a clause that you have satisfied yourself' etc. 6. We reply 'Your misrepresentation relative to the development consent was misleading and deceptive conduct under the Fair Trading Act, for which we can get compensation. That claim is not affected by the clauses in the contract because that Act says it can't be contracted out of'. 7. They say 'We don't recognise your claim as being valid'. 8. They issue a Notice to Complete. 9. I ask you: do you want the property and get damages, or do you want out of the contract? You reply you don't want to lose the property but it is not worth the price if the development consent does not work. 10. Because you want to keep the property, we institute proceedings for: a) Specific Performance  that they perform the contract with a proper development consent, and/or b) damages. 11. They say: we rely on our Notice to Complete and if you don't settle, we will terminate the contract, keep the deposit etc. 12. You then say: because it is less risky, I think I would rather settle and get them to keep $300,000 in trust or, if they won't agree to that, end the contract and get my deposit back. 13. They say no to both proposals. 14. The safest course for you now is to settle and argue the damages issue later. That way the worst you stand to lose is a costs order, you stand to gain damages, interest and costs. 15. To settle, we would probably need an extension of time, a day or so. 16. Do they have a right to terminate? We say no, they say yes. The issue is not clear cut. 17. According to Mr. Warren (with whom I agree), if they purport to terminate, we say to them: 'You had no right to terminate because of the invalid development consent. However, we are treating your purported termination as a repudiation of the contract, entitling us to get our deposit back. 18. We then amend our Court pleadings to obtain return of the deposit by reason of the repudiation instead of specific performance and damages. 19. The issue is: what do you want? Keep property and claim damages? End the contract and seek the deposit?" 37The primary judge noted (at [46]) that "in this sole contemporary record of Mr Stichter, inability to raise finance was not mentioned by him as an issue". 38The appellant responded at 10.46 pm with a facsimile containing his analysis of the options (primary judgment (at [47]): "Claim from us Vendor cannot deliver goods purchased therefore there is no right on their part to terminate contract. They say Too bad. Time for settlement is up, settle or we'll terminate contract & keep deposit. Options (1) Wait for settlement time to expire. They will issue notice of termination, we obtain ex parte injunction that notice of termination is invalid & respond by terminating contract because they forfeited & haggle over deposit. Risk: Lose altogether 220K + 45K costs Best: Lose costs 45K gain 220K (2) Terminate contract, because they cannot provide goods sold. Risk: Lose altogether 220K + 45K costs Best: Lose costs 45K gain 220K *Option 1 & 2 same risk same gain therefore approach on best legal basis. But (3) If Darren Warren is sure that we can succeed in having their termination notice forfeited because it is they that cannot fulfil contract, why not (A) Wait till they issue notice to terminate then obtain ex parte injunction to stop their termination & proceed with current claim against them. Risk: Lose 220K + 45K costs Best: We can get damages and proceed from there. Otto from where I stand, if we have a chance to get our deposit back from options 1 or 2 because of their terminating of contract is not legal, then the chance is the same for establishing our claim that is already under way. Therefore the best option for me is (3) from a financial point of view. If we can establish our grounds for the injunction for 1 & 2 (option) it is the same case for No. 3. My risk is less for option (3) and that is what I would like if there is nothing I have missed." 39The primary judge observed (at [48]) that none of the appellant's options included completing the purchase or seeking an extension of a day or two to do so. 40The Lucantonios did not complete the purchase on the settlement date, 6 February 2002. 41On 7 February 2002, the vendor's solicitor gave notice of termination of the contract for breach of an essential term, namely the purchaser's failure to complete the sale on or before 6 February 2002 in accordance with the notice to complete: primary judgment (at [49]). 42On 8 February 2002, the vendor's solicitor wrote to the respondent notifying the vendor's intention to re-sell the property and asserting an entitlement to retain the deposit. The respondent replied on the same day disputing the validity of the notice to complete, the purported termination and the vendor's entitlement to re-sell. The respondent lodged a caveat on behalf of the Lucantonios claiming an interest as purchasers under the contract: primary judgment (at [49]). 43On 10 April 2002, the vendor resold the property for $2,200,000. The vendor issued a lapsing notice in respect of the Lucantonios' caveat on 16 April 2002. The appellant was unsuccessful in proceedings seeking an order extending the operation of the caveat: Lucantonio v Ciofuli [2002] NSWSC 509 (Austin J). 44On 25 October 2002, the Equity proceedings (see [23] above) were amended to add a claim for the return of the deposit and damages. Bryson J dismissed those proceedings with costs: Lucantonio v Ciofuli [2003] NSWSC 1058. His Honour found that there was no misleading and deceptive conduct because 21 car spaces could be constructed substantially in accordance with the development approval plans, albeit (at [89]) "with difficulties and with needs to obtain further approvals from Council which are not insurmountable, and are not out of the order of difficulties commonly encountered in development projects, although they will involve time, care and expense". He also concluded that, as a matter of discretion, he should not grant relief against forfeiture of the deposit under s 55(2A) of the Conveyancing Act 1919. Assessment of witnesses 45The primary judge said (at [12]) that "[g]enerally, Mr Lucantonio seemed careful and relatively precise in his oral evidence", that "[o]n occasion, however, he seemed over-enthusiastic to emphasise a point he was seeking to make favourable to his case, and in particular to inculpate Mr Stichter". He observed that the appellant's "evidence was not without occasional inconsistency; in particular, his recollection of some matters was at variance with his evidence before Bryson J" and that he had "no contemporaneous diary or other notes of his relevant conversations with Mr Stichter and Mr Warren". Generally, his Honour was "inclined to prefer [the appellant's] version to that of Mr Stichter", but neither wholly accepted nor wholly rejected it. 46The primary judge observed (at [13]) that "[u]nsurprisingly, eight years after the relevant events, Mr Stichter demonstrated poor recollection of many of the events". He added: "There were significant discrepancies between his two affidavits, and his evidence fluctuated as he sought to rationalise the inconsistencies. There was a stark contrast between his general (and understandable) lack of precision and certainty, with his claimed specific clarity on some crucial matters. This was not assisted by his lack of contemporaneous notes. I readily accept that the failure to keep file notes of conversations, as a matter of practice, is not of itself negligent, nor probative of negligence, nor of itself is it adverse to his credit. But it deprives him of corroboration, or material to refresh his recollection, when it was much needed. In the circumstances, precise recollection of the crucial conversations is unlikely, and it is natural, and not dishonest, for a witness in those circumstances to endeavour to reconstruct them; but such reconstruction can be unreliable, as it is prone to favour the interests of the witness. The above considerations have informed my overall assessment of his evidence, including those aspects of it, referred to below, where I have, on the probabilities, preferred another version to his." Disposition at trial 47As I have said, the appellant's claim was "that, by relying on the advice of Mr Kleinert, Mr Stichter and Mr Warren, the trust lost the deposit and the possibility of substantial profits from the redevelopment, and incurred the costs of the abortive acquisition and of the unsuccessful litigation": primary judgment (at [53]). 48The primary judge observed (at [73]) that the claim in respect of the barrister involved many issues that were common to the claim against the solicitor. In this context, it is relevant to note that his Honour found (at [75]) in his reasons dealing with the case against the barrister "that Mr Lucantonio's preferred outcome was to proceed with the purchase at a reduced price (he wanted to retain the land but was unwilling to pay the full purchase price given the problems with the development approval)". 49In dealing with the particular of the barrister's negligence that he failed "to give timely advice to complete the purchase and sue for damages", the primary judge said (at [96]): "... Mr Lucantonio raised the possibility of completing the purchase and pursuing a claim for damages in his telephone conversation with Mr Warren of 5 February, whereupon Mr Warren confirmed that it was an option, though also drawing attention to the risk that the vendor might not preserve sufficient assets to satisfy a judgment. That advice was not incorrect. It is easy with the benefit of hindsight to think that it somewhat undersold the advantages of completing the purchase and the disadvantages of the alternative courses; but that hindsight is informed by the knowledge that the Fair Trading Act and s 55(2A) claims ultimately failed fundamentally because an innovative method of construction for the shoring was subsequently discovered; and it also overlooks Mr Lucantonio's reluctance to part with the whole balance purchase price in circumstances when he considered that the property was, by reason of the development approval issues, not worth it. Mr Warren, when asked by Mr Lucantonio on 5 February, confirmed that completion and a subsequent claim for damages was an available option ..." (Emphasis added) 50As I have said, the primary judge concluded (at [105] that he was "not satisfied that Mr Warren departed in any material respect alleged from the standard expected of a barrister of reasonable competence and prudence". He added that, had his view been to the contrary, he would have held the appellant's case also failed against the barrister on the causation question for the same reasons the case against the respondent failed on this issue. 51The primary judge then dealt with the claim against the respondent. His Honour dismissed the claim that the respondent negligently advised the appellant regarding the institution and continuation of the Equity proceedings: primary judgment (at [106] - [119]). There is no appeal from this ruling. It is relevant, however, to recount the primary judge's statement (at [118]) in relation to this allegation: "Moreover, advice that the contractual claim had very poor prospects would have had no practical impact on the course that was followed. Even if Mr Stichter ought to have advised, after Austin J's judgment, that the contractual claim was most unlikely to succeed, such advice would have been inappropriate in respect of the Fair Trading Act and s 55(2A) claims. The Lucantonios would have persisted in any event with the Fair Trading Act and s 55(2A) claims, and in that context would not have discontinued the contractual claim. Mr Lucantonio was well aware that the outcome of the Equity proceedings was not assured. Mr Warren had told him as much at the outset. He knew the risks of litigation from his earlier Land and Environment Court proceedings [Lucantonio v Concord Council [2001] NSWLEC 52]. Mr Stichter had advised him, in writing on 5 February, that 'The issue is not clear cut', and Mr Lucantonio conceded that he understood this to mean that there was a possibility of losing the case. Mr Lucantonio's handwritten facsimiles of 5 February 2002 bespeak an appreciation of 'risk - including of losing the deposit, which was the Lucantonios' main risk in the circumstances. Austin J's judgment must have brought home to him in the clearest possible way that he might lose the case. On the other hand, discontinuance would have involved paying the vendor's costs. Even if advised that the contractual case was very weak, the Lucantonios would have continued the proceedings substantially as they did, in order to obtain a refund of their deposit and/or damages under the Fair Trading Act, and retained the contractual argument as an additional, if weak, string to their bow." (Emphasis added) 52With regard to the notice to complete, the appellant alleged that the respondent's failure to advise, until 5 February 2002, that the "safest" course was to settle the purchase, was negligent as it did not provide sufficient time for them to organise finance: primary judgment (at [120]). 53The primary judge described (at [121]) the respondent's duty upon receipt of the notice to complete in the following terms: "Upon receipt of the notice to complete, a reasonably competent and prudent solicitor in Mr Stichter's position was obliged to discuss with the client the possible courses of action in the context of the notice to complete, and their respective advantages and disadvantages, and the risks and opportunities associated with each, so as to enable the client to make an informed determination on a strategy, in sufficient time for it to be adopted. The 'crisis' of 5 February was plainly foreseeable. It must have been plain to Mr Stichter, from the moment he received the notice to complete, that a decision would have to be made as to what course the Lucantonios would take in response to the notice. It must have been equally obvious that such a decision would have to be made sufficiently in advance to enable the requisite pre-conditions - such as availability of finance, if completing the purchase were a consideration - could be satisfied. Prima facie, 5 February was much too late for that to be done. Even with a relatively sophisticated client such as Mr Lucantonio, a solicitor cannot sit back in these circumstances and await an approach from the client: having been retained, the solicitor must position the client to deal with the looming crisis. A solicitor acting prudently would have taken steps to ensure that the client was positioned to make the relevant decision at least several days earlier, to permit finance to be arranged, if required, for 6 February." (Emphasis added) 54The primary judge did not accept the respondent's evidence that he had advised the appellant that completing the purchase was the "safest" option on several occasions in the past, referring (at [123]) to the "demonstrable unreliability of [his] unaided recollection of conversations so long ago". His Honour found (at [124] - [125]) that even though the appellant "knew, and had always known" that completing the purchase and suing for damages was an available option, the respondent first advised the appellant that completing the purchase was the "safest" option on 5 February 2002, which was "manifestly too late". 55Therefore, his Honour found (at [125]) that the respondent breached his duty by failing to give timely advice to the respondent of the courses open to him in light of the notice to complete, and their respective advantages, disadvantages and risks. The advice that completing the purchase was the safest option came too late to be acted upon. 56The primary judge then turned to the causation issue which he framed as follows (at [126]): "Assuming - as I have concluded - that the Lucantonios ought to have been, but were not, given timely advice about the courses open in response to the notice to complete, and their respective advantages, disadvantages and risks, would a different course have ensued? Mr Lucantonio's case on causation is that, had Mr Stichter advised them that completion was the 'safest' option even a few days earlier, they would have taken that option and settled the conveyance prior to expiry of the notice to complete. In the light of the evidence adduced as a result of the re-opening, I accept that the Lucantonios could have funded the balance purchase price if they were minded to complete, upon a couple of days notice; indeed funds could probably have been arranged within hours, but as the Bank did not make that facility widely known, neither the Lucantonios nor Mr Stichter could reasonably have been expected to know of it." (Emphasis added) 57The primary judge recognised (at [127]) that the issue of causation was governed by s 5D of the Civil Liability Act 2002 and was to be determined subjectively, in the light of all relevant circumstances: s 5D(3)(a). Accordingly it was necessary to determine what the appellant would have done if properly advised, inherent in which question was "determining what in the circumstances would have amounted to 'proper advice'". 58The primary judge found (at [129]) that proper advice to the Lucantonios would have been given in ample time to make and implement their decision, that they could either: (5)complete the purchase for the full price, with the problems associated with the development approval, and bring proceedings for damages for misleading and deceptive conduct after completion; or (6)refuse to complete, and in the event of termination by the vendor and forfeiture of the deposit, bring proceedings for recovery of the deposit and damages for misleading and deceptive conduct. 59His Honour added (at [129]) that: "Of these options, the first involved the least legal risk, as they would be performing their legal obligations under the contract, but they might end up with a property worth significantly less than the price they were paying for it, and their ability to recover moneys from the vendor if their claim succeeded could not be assured; whereas the second risked loss of the deposit and potential exposure to damages if their position proved to be incorrect." 60His Honour rejected (at [130]) a submission for the Lucantonios that they should never have been given the choice, but should have been told that they needed to complete the purchase and, if they incurred a loss, subsequently claim damages under the Fair Trading Act, saying: "... However, that contention overlooks that it is for clients, not lawyers, to make commercial decisions; that Mr Lucantonio was not an unsophisticated client; that he had a strong preference to acquire the property, but only on a basis that made allowance for the problems with the development approval; that equity provided a remedy which could possibly deliver the precise outcome he preferred; and that even if the prospects of success for that remedy were slight, there was, on the evidence then available, a well arguable claim under the Fair Trading Act. It also overlooks the risk, pointed out by Mr Warren, that if left to a remedy in damages after completing the purchase, there was no assurance that the vendor would retain funds sufficient to meet the claim; and the risk, apparent to the Lucantonios, that they might end up with a property worth less than the price." 61His Honour then turned (at [131] ff) to the question of what, properly advised, the Lucantonios would have done. His reasons for concluding they would not have completed the purchase even if properly advised were: "132 If they were to complete the purchase, they would have to borrow and pay over the balance purchase moneys (which exceeded what Mr Lucantonio now thought the property was worth), incur interest on those funds, pursue a s 96 amendment application (if not a new development application), and incur substantial additional construction costs, as well as holding costs in the meantime. As a result of his past experiences, Mr Lucantonio was strongly disinclined to acquiring properties without development approval, because of the associated risks and delays, and averse to being the named applicant in any application to the Council, believing that any application to Council from him would not be well received. Nor did he want to be in the position of having purchased a building that would then require substantial additional unanticipated expenditure to rectify the problems that had arisen with the development approval plans - so substantial as to make the project 'uneconomical'. Nor did he wish to hold the property for 6 months while the Council considered any s 96 amendment application, let alone a new development application. 133 On the other hand, if they did not complete and the vendor purported to terminate, there were - assuming the correctness of Mr Kleinert's advice - apparently at least reasonable prospects of recovering the deposit pursuant to s 55(2A) (an outcome which the Lucantonios had been prepared to accept on 4 February 2002), and/or damages for contravention of the Fair Trading Act. 134 While, from a legal perspective, it may have been safest to complete, in that the alternative of not completing risked that the vendor might terminate and forfeit the deposit, leaving any chance of a successful outcome to the vagaries of litigation, the risk in completing was commercial - that (by reason of the problems with the development approval) the purchaser might acquire a property worth significantly less than he had assumed and was prepared to pay (and in addition that the vendor might dissipate the proceeds so as not to be able to satisfy a judgment). In the simplest terms, it was the difference between whether, in the interim, he had to part with the balance purchase price of $2 million, in circumstances where he did not believe that the property was worth it, and whether the vendor would have the benefit of that sum. It is noteworthy that the additional construction costs and the diminution in value of the property in contemplation as a consequence of the problems with the development approval equalled or exceeded the amount of the deposit at risk - the early estimates of $200,000 in additional building costs were followed by later estimates of $500,000; the amount of provision for compensation proposed (in the 4 February negotiations) to be retained in trust from the purchase price was $300,000; Mr Warren's 5 February file note contemplates that the property might now be worth only $1.5 million ($700,000 less than the price). On the other hand, in the event of not completing, the risk of losing the deposit was mitigated by the availability of remedies under the Fair Trading Act and s 55(2A). If the property were worth less than about $2,000,000, then commercially the Lucantonios would seem to have been better off to forfeit the deposit than to pay over the balance purchase price to complete. 135 Underlying the message in Mr Lucantonio's 6.05 pm 5 February facsimile to Mr Stichter is a disinclination to complete by paying over the full balance purchase price: Mr Lucantonio's desire to acquire the property was not so great as to justify, in his mind, parting with the whole of the balance purchase price. The statements attributed to him in paragraphs 9 and 12 of Mr Stichter's 5 February facsimile evince the same intention: that in paragraph 9 shows that while he would like to keep the property, it was no longer worth the price; and in paragraph 12 - to the effect that 'because it was less risky' he would prefer to settle with $300,000 retained in trust - indicates an appreciation that completing the purchase was the safer course, so long as some provision could be made to secure his prospective claim in respect of additional cost/diminished value; the alternative of rescinding and recovering the deposit indicates an appreciation that there were commercial risks associated with paying over the whole price in the circumstances. Even when admittedly told, on 5 February 2002, that the safest option was to 'settle and argue the damages issue later', Mr Lucantonio does not appear to have given that course serious consideration. Although it might be said that there was (in his mind) insufficient time to pursue it, as (so far as he reasonably knew) funds could not be arranged with the Bank in the few hours remaining until 2.00 pm on 6 February, it is particularly striking that he did not adopt Mr Stichter's suggestion that a short extension of a day or two could be sought to permit them to complete - a course which one would have expected him to explore if he were at all inclined to the 'safest' course. Given his position that he always believed that he would be able to reach a settlement with the vendor - even until 7 June 2002 - the contention that a favourable answer could not realistically be anticipated, as the vendor had already rejected a proposal to defer settlement for a week, and allow $300,000 of the purchase money to be retained in Mr Stichter's trust account until the issues were resolved, does not carry persuasion. Even though settlement with a subsequent claim for damages was an option of which he was fully aware - he had asked Mr Warren about it earlier on 5 February, as well as its being mentioned as the 'safest' course by Mr Stichter - his review of the options did not include it at all. 136 In my view, the reason why Mr Lucantonio did not pursue that option was that his perspective was not only legal but also commercial. Although he was keen to acquire the property, in the light of the difficulties with the development approval he was not prepared to complete without a reduction in the purchase price, or at least retention of sufficient of the purchase money to cover his claim, because otherwise the problems with the development approval would have a serious impact on the economic viability of the acquisition, and he believed the property was no longer worth the price. He knew that completion was an option, but appreciated that it might involve paying much more than $200,000 in excess of the property's worth; he also knew that failure to complete might result in the vendor terminating, and forfeiting the deposit of $220,000. He was significantly influenced by what he perceived to be the substantial commercial risk associated with purchasing other than at a discounted price, in circumstances where he believed that the property was now worth significantly less than he had contracted to pay for it. Moreover, he believed that he would be able to settle his differences with the vendor - a view to which he adhered even up until 7 June 2002. 137 In my view, properly advised, the Lucantonios would nonetheless not have completed the purchase by the payment of the undiscounted purchase price, but would have assumed the risks of not completing, and embarked on the consequential litigation, on the basis that this was the more commercial approach, and in the belief that they would in due course reach a compromise with the vendor - notwithstanding that completion of the purchase may have involved less legal risk." (Emphasis added) 62Accordingly, the primary judge found (at [138]) that breach of duty was established, but causation was not. This was because (at [139]), "properly advised, the Lucantonios would still not have completed the purchase by the payment of the undiscounted purchase price, and would have assumed the risks of not completing, and embarked on the consequential litigation." 63The primary judge summarised his conclusions (at [144] ff). That summary relevantly included the following: "158 Properly advised, the Lucantonios would have been informed, in ample time to make and implement their decision, that they could either: (1) complete the purchase for the full price, with the problems associated with the development approval, and pursue proceedings for damages for misleading and deceptive conduct after completion; or (2) refuse to complete and, in the likely event of termination by the vendor and forfeiture of the deposit, bring proceedings for recovery of the deposit under s 55(2A) and for damages for misleading and deceptive conduct; of these, the first involved the least legal risk, as they would be performing their legal obligations under the contract, but they might end up with a property worth less than the price; whereas the second risked loss of the deposit and potential exposure to damages if their position proved to be incorrect. 159. However, so advised, the Lucantonios would nonetheless not have completed the purchase by the payment of the undiscounted purchase price, but would still have assumed the risks of not completing, and embarked on the consequential litigation, on the basis that this was the more commercial approach, and in the belief that they would in due course reach a compromise with the vendor - notwithstanding that completion of the purchase may have involved less legal risk." Issues on appeal 64The critical issue on appeal is whether the primary judge erred in finding that causation was not established. Appellant's Submissions 65Mr G Laughton of Senior Counsel, who appeared for the appellant at trial and on appeal, submitted that the primary judge erred in determining the issue of causation by reference to the circumstances prevailing on 5 February 2002, rather than those prevailing prior to and about the time the notice to complete was received on 17 January 2002. He argued that by focussing erroneously on the circumstances prevailing on the later date, his Honour failed to have regard to all relevant subjective circumstances as required by s 5D(3) of the Civil Liability Act 2002. He contended that, to the extent the primary judge's findings turned on credit, they were erroneous having regard to objective material or incontrovertible facts. 66Mr Laughton submitted that the trial judge failed to consider the following factors which were relevant to the decision about what, properly advised, the Lucantonios would have done: (1)The Lucantonios had at all other times accepted and acted on legal advice, including commencing and running to verdict the matters heard by Austin J and Bryson J; (2)The appellant gave evidence that having received legal advice in December 2001 he wanted to complete the contract; (3)Mr Kleinert gave the appellant some confidence that the variation for the development approval was likely to succeed; (4)Despite (1) above, Mr Laughton's submissions also accepted that if given proper advice, the appellant's decision would have been made on commercial grounds. The appellant had done a feasibility study prior to buying the property. He argued that, based on that study, the project remained commercially viable and was expected to generate a profit, even if settlement occurred in January or February 2002, meaning that "settlement was the safest commercial and legal course" even if a reduced profit was obtained; (5)The appellant understood he could afford to settle the purchase; he was aware that guarantees with the bank and mortgages were in place and it was his experience that the bank would advance funds to settle the purchase of the property and that development funding was a separate issue; (6)A "consistent theme throughout the evidence" was that the appellant was keen to settle the purchase and continue with the development; the appellant could not be confident a compromise with the vendor was possible (cf primary judgment at [159]); (7)In support of [66](4), Mr Laughton drew attention to internal NAB documents prepared prior to the bank approving finance discussing the feasibility of the development and suggesting that "based on the completion values completed by [property funding unit] the project return on cost is 27 percent. That estimate appeared in a passage which included the following: "Based on the on completion values attributed by PFU, the project return on cost is 27% which is significantly less than that based on the client's on completion values. Client's return on cost is in excess of 67% and this suggests that selling prices are overstated or costs understated or a combination of both. Adopting PFU's values, the LSR on cost including other facilities and securities is 66% (B/V 91%) improving on completion to 59% (B/V 82%). If client's on completion estimates are correct the final LSR is closer to 52% (B/V 72%). Having regard to the above, PFU consider a valuation on an As Is and On Completion basis is critical to the final approval of the proposal. Acquisition costs of $2.319M include the purchase price of $2.2M net of GST. Property was purchased at auction and property was sold subject to DA. Valuer will need to confirm value As Is at or about $2.2M" In the conclusion to the internal memorandum, the author wrote that a condition precedent to acquisition funding was: "Valuation of the development site is to be undertaken by a valuer acceptable to PFU under instructions from the Bank confirming the 'as is' and 'on completion' valuations analysing construction costs, project feasibility and demand. The Valuation report is to specifically consider the impact of the G.S.T. and is to be to the satisfaction of the Bank." (8) The appellant knew that a condition of seeking specific performance was that he be ready to complete the contract in accordance with its terms. 67Thirdly, Mr Laughton submitted that the primary judge erred (at [134]) in comparing the deposit with the potential increased cost of the works. Rather, he argued, the relevant comparison was between the deposit and the potential profit and that the project remained profitable despite the increased costs of the works. 68Fourthly, Mr Laughton submitted that the primary judge's reasoning was infected by his reference (at [134]) to the February communications, in particular Mr Warren's 5 February file note contemplating that the property "might now be worth only $1.5 million". He contended that Mr Warren's estimate was merely an example and that the primary judge wrongly attributed this view of the property's reduced value to the appellant. 69Fifthly, Mr Laughton submitted that the primary judge had a "restricted forensic advantage" in determining the question of what the Lucantonios might have done, considering the delay of eighteen months between final written submissions and the judgment, and his Honour's recognition (at [2]) of "the increasing need with the passage of time since the trial to refamiliarise [himself] with the detail of some aspects of the evidence and argument." 70Finally, Mr Laughton submitted that the primary judge did not take into account the following matters which demonstrated that the risk of not settling would not be worthwhile to a successful property developer such as the appellant: (1)The Lucantonios would potentially lose their deposit, or have to sue the vendor to recover it, if they did not complete the contract; (2)The Lucantonios would lose the benefit of a potentially profitable investment; (3)The Lucantonios would become liable to damages if the property were sold for less than the contract price; and (4)The time and funds committed to the project by the appellant would be lost. Respondent's Submissions 71Mr G Curtin of Senior Counsel, who appeared for the respondent at trial and on appeal, submitted that the primary judge correctly concluded that commercial considerations were the dominant motives for the appellant's response to the notice to complete. 72Next, Mr Curtin argued that the primary judge's assessment of what the appellant would have done, while properly based on contemporaneous statements and surrounding circumstances, also "involved a strong demeanour element" as was apparent from his Honour's descriptions of the appellant as: (1)"over-enthusiastic to emphasise a point he was seeking to make favourable to his case, and in particular to inculpate Mr Stichter" (primary judgment (at [12])); (2)"strongly disinclined" to acquire properties without development approval (primary judgment (at [132])); and (3)"significantly influenced by what he perceived to be the substantial commercial risk associated with purchasing other than at a discounted price (primary judgment (at [136])) 73Mr Curtin referred to a number of contemporaneous statements which he submitted supported the primary judge's conclusion that the appellant did not want to complete without some form of guaranteed compensation: (1)the appellant told Mr Kleinert on 21 November 2001 that he could not afford to hold the property for six months while waiting for development approval from the Council, in light of the overhead (holding) charges; (2)the appellant told the respondent on 22 November 2001 that whilst he really wanted the property he could not go back to council with his history; (3)in the verified statement of claim, the appellant pleaded that the extra cost of developing the site to accommodate 21 car parking places as suggested by Mr Kleinert, "made the project uneconomical and unavailable [sic, unviable]" at the contract price; (4)the appellant gave evidence that he had had a series of unfavourable experiences seeking development approval and had "vehemently decided never to repeat that process"; and (5)subsequent to his unsatisfactory experience with development applications, the appellant had bought six properties for strata development, none of which required development approval; (6)the appellant believed that officers of the relevant Council personally disliked him. 74Thirdly, Mr Curtin submitted that even though the appellant had a preference to acquire the property, the primary judge correctly found that this was only on the basis that allowance was made for the perceived problems with the development approval and in circumstances where he obtained an appropriate remedy. 75Fourthly, Mr Curtin submitted that the appellant knew that any award of damages might have been pyrrhic in that there was no assurance the vendor would retain funds to meet the award. Furthermore, he argued that the profitability of the purchase was speculative as it depended upon unknown factors such as how long it would take Council to consider the variation application. 76Finally, Mr Curtin noted that the appellant believed, on 5 February 2002, that the property was not worth the purchase price if the existing development approval did not permit the development he contemplated. Consideration 77In my view, the primary judge did not err in finding that causation was not established between the respondent's negligence and the losses the appellant suffered. 78Although there was no controversy about the legal principles the primary judge applied, it is useful to state briefly the legal parameters of the causation inquiry. 79In order to establish that any breach of duty on the respondent's part caused the appellant harm, the appellant had to establish that that negligence was a necessary condition of the occurrence of that harm, an exercise the Act labels "factual causation": s 5D(1)(a), Civil Liability Act 2002. That required the appellant establishing that the respondent's negligence was a condition that must be present for the occurrence of the harm: Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 (at [18], [20]) per French CJ, Gummow, Crennan and Bell JJ; (at [44]) per Heydon J. 80Such determination "is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E" (Wallace v Kam [2013] HCA 19; (2013) 87 ALJR 648 (at [14])) and is approached by applying common sense to those facts: Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 (at [43]; [56]) per French CJ, Hayne and Kiefel JJ. It "involves nothing more or less than the application of a 'but for' test of causation": Wallace v Kam (at [16]); Adeels Palace Pty Ltd v Mourbarak [2009] HCA 48; (2009) 239 CLR 420 (at [45], [55]). "Proof of the causal link between an omission and an occurrence requires consideration of the probable course of events had the omission not occurred": Strong v Woolworths Ltd (at [32]) per French CJ, Gummow, Crennan and Bell JJ. 81The inquiry into causation is retrospective, seeking to identify what happened and why: Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 (at [124]) per Hayne J; Lesandu Blacktown Pty Ltd v Gonzalez [2013] NSWCA 8 (at [28]) per Basten JA (Davies J agreeing). It focuses on the particular conduct or omission which is found to constitute the defendant's breach of duty: Kocis v SE Dickens Pty Ltd [1998] 3 VR 408 (at 419) per Phillips JA (Ormiston JA generally agreeing). 82The question whether the appellant would have completed the purchase for the contract price had the respondent provided timely advice on or about 17 January 2002 has to be determined subjectively in light of all the relevant circumstances: s 5D(3)(a), Civil Liability Act; Wallace v Kam (at [17]). 83In my view, the primary judge did not place undue emphasis on the correspondence of 5 February 2002. In particular, I do not accept the appellant's submission that his Honour determined the issue of causation by reference to circumstances that existed at that date. The 5 February correspondence was clearly an important point of reference for the primary judge both to the extent it recorded matters of history concerning the transaction, as well as affording an insight into the appellant's attempts to evaluate the competing considerations and the advice he was receiving about them. There was no submission that the advice the appellant received in and around 5 February would have differed if it had been given "at least several days earlier": cf primary judgment (at [121]). It is also worth noting, as the appellant acknowledged in cross-examination (and in any event is self-evident from the documents) that nothing in the appellant's response to the "safest option" facsimile suggested this advice came as a surprise to him or that it gave him too little time to consider his position. However the primary judge accepted (at [125]) that the safest option advice came too late to be acted upon. 84A reading of the appellant's evidence demonstrates a number of matters. First, following difficulties with obtaining development approval from local government authorities and prior to exchanging contracts to purchase the property, he had decided he would never buy a property which required such approval to be obtained after completion. Secondly, he believed relevant officers of the local government authority in which the property was located had developed a fundamental antipathy towards him such that he would be unable to obtain development approval for a property in that area or not, at least, without a substantial wait. Thirdly, the "only reason' he bought the subject property was because it had development approval and he would never have bought it if he had known the development approval would not work. Fourthly, in his view the property was not worth the contract price without development approval. Fifthly, once the problem with the development approval was identified, he perceived the Equity Proceedings as a means of requiring the vendor to deal with the council to obtain a "buildable DA", in part because that would overcome the difficulties he thought he would face if the application came from him. Alternatively, those proceedings could be the vehicle for the vendor compensating him for having to go to the council to seek development approval. Sixthly, he was prepared to settle if he could get compensation for the additional cost of complying with the Development Consent. Seventhly, he knew the work Mr Kleinert proposed to deal with the problem and create the 21 parking spaces the council required would involve significant cost and even getting development approval to carry out those proposals could take 12 months. Eighthly, the appellant told Mr Kleinert the project was less viable if he had to hold the property for 6 months, indeed he could not afford to hold the property for that period. Nevertheless, he had some confidence a s 96 EPA Act application (to obtain amended development approval) was likely to succeed, even if submitted in his name, because the changes were internal and were intended to address the council requirement for 21 car parking spaces. Ninthly, the appellant always believed the extra costs of construction based on Mr Kleinert's advice as to how to achieve 21 car parking spaces when added to the purchase price made the project uneconomical. 85The appellant also believed that not having a "buildable development approval" could cause problems with financing the project. He was proposing to borrow the cost of acquiring the property ($2.2 million) as well as the construction costs ($1.2 million) from the bank. He knew the bank required him to have a construction certificate before it would advance the construction funds, but that, on the basis of Mr Kleinert's advice he would not be able to get that without an amended development approval. He never told the bank of the additional construction costs likely to result from Mr Kleinert's advice. He knew the bank may not give funding based on that advice and may have withdrawn its offer of funding if told. 86Insofar as settling was concerned, the appellant was prepared to settle if he could get compensation for the difficulties with building the car parking spaces. Secondly, he believed settlement was a risky option as if he did so and sued the vendor for damages for the "unbuildable development approval", the vendor may not be able to meet any such award. Thirdly, the appellant knew when the notice to complete was received that settling was an option, however the advice that it was the "safest option" given on 5 February was new information. Fourthly, the appellant knew that settling meant him submitting the application to amend the development approval in respect of which he anticipated problems and that absent "valid advice" it was more risky not to settle and pursue specific performance. Fifthly, the appellant was not prepared to settle without compensation or a reduction in the purchase price to reflect the extra costs of construction. Finally, the appellant was always optimistic, until he lost the caveat proceedings in June 2002, that he would resolve the dispute with the vendor. 87This evidence is reflected in the primary judge's synthesis of his reasons (at [132] - [137]) for concluding the respondent's omission was not causative of the appellant's loss. The references in those reasons (at [135]) to the appellant's disinclination to complete by paying the full purchase price did not demonstrate an unwarranted focus on the "crisis" of 5 February brought on by the tardy advice about the "safest option". Rather, the facsimile of that date was a convenient point of reference to the belief the appellant had held since Mr Kleinert informed him that the development approval attached to the contract was unbuildable. 88It may well be that the appellant had "always acted on legal advice", as Mr Laughton submitted, but the appellant had legal advice of more than one option, the other (pursuing the Equity proceedings) holding out more promise in his view for achieving the outcome he desired in all the circumstances of not bearing the cost of the additional construction. As the primary judge inferred, this was the better commercial course from the appellant's point of view. It was reflected in his statement in cross examination to which Mr Laughton referred, that having received the legal advice he was given in December 2001 he wanted to complete the contract, a statement which was qualified, however, by him hoping to receive compensation in respect of the car park difficulties if he was not able to achieve his other objective of getting the vendor to convey the property with a buildable development approval. 89Mr Laughton's reliance on the pre-purchase feasibility study is also misplaced in my view. The study was based on projected construction costs of $1.2 million, a figure which was clearly going to increase significantly if the approach Mr Kleinert advised was necessary to deal with the car parking space issue had to be followed. The expectation that there would be a profit if the conveyance settled when it was supposed to was similarly premised on the pre-purchase knowledge, not the subsequent discovery and its attendant financial implications. As paragraph 16 of the further amended statement of claim, which the appellant verified, pleaded "the extra cost [of developing the site to accommodate 21 car parking places] and in attempting to obtain further development approval including the delays associated therewith, when added to the purchase price, made the project uneconomical and unavailable [sic, unviable]" at the contract price. The appellant accepted in cross-examination that that statement had always been his position. 90It is not to point to refer to the bank's internal documents discussing the feasibility of the project. Those documents were prepared without the bank knowing of the car parking problem and, in any event, so far as the evidence reveals were not documents to which the appellant was privy. Absent knowledge of the bank's estimate of the project return (which it might be noted cast doubt on whether the appellant's feasibility study was realistic) it was not a subjective consideration the primary judge was required to take into account in determining the causation issue: cf s 5D(3)(a), Civil Liability Act. 91I do not accept, as Mr Laughton contends, that the primary judge did not take into account relevant matters: see [70] above. His Honour expressly adverted to the consequences of not completing, including forfeiting the deposit, in his causation reasons (at [129] and [132] - [136]). All of the matters to which Mr Laughton referred were part of the commercial and legal circumstances to which his Honour plainly had regard in reaching his conclusion. 92Finally, in my view, there is little in the evidence which supports Mr Laughton's underlying contention that had the appellant been told in or around 17 January about the "safest option" he would have decided to settle. While that advice would have given him more time to consider his position, it would not have altered the basic position that, commercially, he did not want to settle the purchase without receiving some form of compensation from the vendor or a buildable development approval. He had held that view since advised of the problem in December 2001 and, too, as I have said, the view that without one of those "remedies", the project was unviable. In my view, the subjective considerations point strongly to the conclusion the primary judge reached. 93It is unnecessary to consider Mr Laughton's submission about the restricted forensic advantage the primary judge had which was presumably advanced to dissuade the Court from deferring to the primary judge's conclusions in respect of any demeanour based findings. The appellant's views about the matters influencing his consideration of the viability of pursuing the purchase emerge forcefully from the evidence. The conclusions the primary judge reached were, in my view, manifestly open to him. Orders 94As I said, the Court was advised that the cross-appeal should be dismissed by consent. Mr Laughton suggested that costs would follow the event, to which there was no demur on Mr Curtin's part, no doubt because Mr Laughton added that the cross appeal was "only ever filed". I infer from the later remark that no costs were incurred. In such circumstances I would not make any order for the costs of the cross-appeal. 95I propose the following orders: (1)Appeal dismissed with costs. (2)Cross-appeal dismissed. 96BASTEN JA: On 3 November 2001 the appellant (Mr Dean Lucantonio) purchased at auction a commercial property situated on Majors Bay Road, Concord. The purchase price was $2.2 million and a deposit of $220,000 was paid. 97A development approval granted by the local Council permitted the replacement of existing buildings with a new building comprising retail shops and commercial units. It was a condition of the consent that 21 underground car parking spaces be provided, on two levels. 98Following exchange of contracts, the appellant arranged bank finance in an amount sufficient to cover the cost of the purchase and the proposed development. He also engaged an architect to prepare the necessary drawings to obtain a construction certificate and allow for the project to proceed expeditiously following settlement. The sale contract provided for settlement to take place on 18 January 2002. 99On 21 November 2001, the architect (Mr Kleinert) advised the appellant that there was inadequate space to construct the development in accordance with the approved plans and, in particular, that 21 parking spaces could not be fitted in the proposed two level basement. 100On 7 February 2002, the vendors' solicitor gave notice of termination of the sale contract for failure by the appellant to complete. Proceedings brought by the appellant in the Equity Division to recover the deposit and damages for breach of contract by the vendors were unsuccessful. The appellant then commenced proceedings in the Common Law Division seeking damages from the architect, his solicitor and a barrister (Mr Warren) briefed by the solicitor. On 19 July 2011 those proceedings were dismissed by Brereton J: Lucantonio v Kleinert [2011] NSWSC 753. An appeal was lodged with respect to the claim in negligence against the solicitor, Mr Otto Stichter. Dismissal of the claims against the architect and the barrister was not challenged. 101For the reasons set out below, the appeal should be dismissed with costs. Issues on appeal 102The present appeal concerns the adequacy of the legal advice given by Mr Stichter to the appellant between 21 November 2001 (when the appellant sent the architect's letter to Mr Stichter) and 7 February 2002 (when the vendors terminated the sale contract). Before identifying the events in question and the manner in which they were dealt with by the trial judge, it is convenient to note the limited scope of the appeal. 103When settlement did not occur in accordance with the contract, on 16 January 2002, the vendors' solicitor gave a notice to complete, requiring completion by 6 February 2002. The critical findings of the trial judge with respect to the events between 16 January and 7 February 2002 were succinctly stated in the following paragraphs: "157 Upon receipt of notice to complete, a reasonably competent and prudent solicitor in Mr Stichter's position was obliged to discuss with the client the possible courses of action, and their respective advantages and disadvantages, and the risks and opportunities associated with each, so as to enable the client to make an informed determination on a strategy, in sufficient time for it to be adopted. In substance the complaint as to the timeliness of Mr Stichter's advice in this respect is established, in that he failed to give timely advice to Mr Lucantonio of the courses open to him in the light of the notice to complete, and their respective advantages, disadvantages and risks. The advice that completing the purchase was the safest option came manifestly too late to be acted upon. 158 Properly advised, the Lucantonios would have been informed, in ample time to make and implement their decision, that they could either: (1) complete the purchase for the full price, with the problems associated with the development approval, and pursue proceedings for damages for misleading and deceptive conduct after completion; or (2) refuse to complete and, in the likely event of termination by the vendor and forfeiture of the deposit, bring proceedings for recovery of the deposit under s 55(2A) and for damages for misleading and deceptive conduct; of these, the first involved the least legal risk, as they would be performing their legal obligations under the contract, but they might end up with a property worth less than the price; whereas the second risked loss of the deposit and potential exposure to damages if their position proved to be incorrect. 159 However, so advised, the Lucantonios would nonetheless not have completed the purchase by the payment of the undiscounted purchase price, but would still have assumed the risks of not completing, and embarked on the consequential litigation, on the basis that this was the more commercial approach, and in the belief that they would in due course reach a compromise with the vendor - notwithstanding that completion of the purchase may have involved less legal risk." 104The grounds of appeal challenged the finding that, properly advised, the appellant would not have completed the purchase by payment of the undiscounted purchase price on 6 February 2002. The grounds alleged that the trial judge, having accepted Mr Lucantonio as a reliable witness, should have accepted his evidence that he would have completed the contract, if given timely advice that that was the safest course. It was further alleged that the trial judge erred in taking into account "correspondence in February 2002 concerning the settlement of the contract" and failing to take into account the conduct of the appellant in December 2001 through to mid-January 2002 concerning settlement. 105The solicitor filed a cross-appeal challenging the finding of breach of duty, but it was not pursued. The finding as to breach therefore stands and it is not necessary to address the evidence or reasoning relevant to that finding. Background to appeal 106Because the appellant placed reliance upon the events preceding the receipt of the notice to complete, it is necessary to refer to the steps taken (and not taken) prior to 16 January 2002. 107During that period, the appellant commenced proceedings against the vendors, seeking specific performance of the contract. The trial judge identified the nature of the proceedings in the following terms at [23]: "The theory of the claim for specific performance with compensation was that the vendor was said to be obliged to convey a property with an efficacious (or 'buildable') development approval, or otherwise to allow compensation for the additional cost that would be incurred; such a remedy, if obtained, would give the Lucantonios exactly the outcome they preferred. The theory of the claim for damages under the Fair Trading Act [1987 (NSW)] was that the Lucantonios had purchased the property in reliance upon representations to the effect that there was a development approval for a development that was feasible." 108At trial, the negligence claim against the solicitor included advising the appellant to commence such proceedings and advising him to continue the proceedings after an interlocutory application to extend a caveat lodged on the vendors' title failed, on 7 June 2002. The trial judge rejected those allegations and the appeal made no challenge to the dismissal of the claim of negligence with respect to the Equity proceedings. However, as pointed out by the trial judge, "[i]t was not implicit in commencing the Equity proceedings that completion would not take place": at [107]. (a) the first period - 21 November 2001 to 15 January 2002 109There was no doubt that Mr Kleinert's advice placed the appellant in a predicament. The existence of the development consent made the property attractive to the appellant because it avoided the expense and potential delays in obtaining development approval from the Council: at [11]. Even an amendment to the existing consent (for example to allow a further basement level for additional parking spaces) could have involved delay and would certainly have involved increased building costs, possibly in excess of $200,000: at [18] and [19]. 110Neither was the legal situation straightforward. The standard conditions in the contract for sale included cll 6 and 7, which relevantly provided: "6 Error or misdescription 6.1 The purchaser can (but only before completion) claim compensation for an error or misdescription in this contract (as to the property, the title or anything else and whether substantial or not). ... 7 Claims by purchaser The purchaser can make a claim (including a claim under clause 6) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion - 7.1 The vendor can rescind if in the case of claims that are not claims for delay - ... 7.1.2 the vendor serves notice of intention to rescind; and 7.1.3 the purchaser does not serve notice waiving the claims within 14 days after that service; and 7.2 if the vendor does not rescind, the parties must complete and if this contract is completed - 7.2.1 the lesser of the total amount claimed and 10% of the price must be paid out of the price to, and held by, the depositholder until the claims are finalised or lapse...." 111The contract also contained two relevant special conditions, namely cll 31 and 40, in the following terms: "31 The Purchaser acknowledges that he does not rely in the Contract upon any warranty or representation made except as are expressly provided herein but has relied entirely upon his inspection of the property and his own enquiries relating thereto. ... 40 The Purchaser acknowledges that annexed to the contract is Notice of Determination of a Development Application dated 4 September, 2001 in respect of the property issued by the City of Canada Bay Council and accompanying documents. The Purchaser agrees that they shall not raise any objection, requisition, claim for compensation or be entitled to delay completion because of the said Notice or accompanying documents." 112Immediately he received Mr Kleinert's opinion on 21 November 2001 the appellant sought advice from Mr Stichter. The trial judge summarised the substance of the discussion between the appellant and the solicitor in conference on 22 November 2001 in terms which may be accepted as findings of fact and not merely a summary of the evidence, at [19]. "Mr Lucantonio made clear that he really wanted the property, but could not go back to Council for significant amendments; he said that he could not afford the time and the money to go back to Council for a new approval. Mr Stichter said that the vendor may give compensation by way of a reduced price, and referred to standard condition 7. He advised Mr Lucantonio to the effect that, if Mr Kleinert was correct, the Lucantonios would (or may) have rights against the vendor; and that while he had not yet looked into it, off the top of his head it seemed that there were a couple of options, the first being to settle the purchase and claim damages later; the second being to seek a declaration as to whether he was entitled to terminate the contract; and a third possibility being to institute proceedings for specific performance, on the basis that the vendor was conveying something substantially different from what he had contracted to buy, and for damages for misleading and deceptive conduct under the ... Fair Trading Act 1987, s 42. Mr Stichter admittedly harboured some doubts as to whether proceedings for specific performance with compensation could succeed, in the face of special condition 40; and it was this, coupled with the thought that one could not contract out of rights under the Fair Trading Act, that prompted consideration of that Act as providing a relevant remedy." 113On the same day, Mr Stichter wrote to the vendors' solicitor, identifying the problem raised by Mr Kleinert and requiring that the vendors bear the cost of an amended consent and additional development costs, estimated at $200,000. On 27 November 2001 the vendors' solicitor replied, rejecting the complaint and, in any event, relying upon special condition 40. 114On 3 December 2001, the appellant and Mr Stichter again conferred, including by telephone with the barrister, Mr Warren. Proceedings were to be commenced against the vendors. On 6 December Mr Warren drafted a summons and affidavit in support, which were forwarded to Mr Stichter on 10 December. The appellant obtained a further advice as to the structural problems with respect to the 21 parking spaces which, by report dated 13 December, confirmed Mr Kleinert's advice: at [25]. Proceedings were instituted on 21 December, although the solicitor was unable to effect service immediately and had to obtain an order for substituted service, which did not take place until 31 January 2002 and was only effective on 7 February 2002. 115The appellant completed arrangements with the National Australia Bank to finance the purchase and development. By letter dated 2 January 2002 the bank offered a bill facility in an amount of $3.4 million. The securities involved mortgages over the Majors Bay Road property, another property held by the appellant and his wife in Lilyfield and guarantees and indemnities from members of the Lucantonio Family Trust, supported by mortgages over properties owned by the beneficiaries. However, the final steps necessary to draw down the necessary amount for settlement of the purchase on 16 January 2002 were not taken. (b) the events of 5 February 2002 116The second set of events took place in early February 2002, triggered by a letter from the vendors' solicitor enclosing settlement figures for 6 February 2002, together with a warning that if the purchasers did not complete the vendors would terminate the contract. On the day following receipt of the letter, 1 February 2002, Mr Stichter sent a facsimile to the barrister noting the difficulties with service of the proceedings, noting that the notice to complete expired on 6 February 2002 and enclosing a copy of the facsimile with the settlement figures. The document concluded with the following propositions: "6. Dean wants to buy the property but would like compensation by reason of the matters the subject of his Supreme Court proceedings. 7. However because of those matters needing to be disclosed to his incoming mortgagee, he will have difficulties with finance. 8. The approval he had for finance has now lapsed. 9. Would you please call me to discuss appropriate action relative to the solicitor's fax and in relation to the matter generally. 10. The options I see: a) Seek urgent injunction to restrain the threatened termination. b) Seek urgent orders that the Notice to Complete is invalid. c) Dispute the termination post-termination and caveat the title. 117On 4 February 2002 Mr Stichter wrote to the vendors' solicitor referring to the "purported" notice to complete, the validity of which was in dispute. The letter continued: "We are instructed to advise that our client is willing to complete pending the determination of our client's entitlement to damages, upon the following conditions:- 1. The time for completion be extended to 20 February 2002; 2. An amount of $300,000.00 from the purchase monies is held by us in our trust account pending the Court's final determination and paid and disbursed acoding [sic] to such determination; and 3. The said $300,000.00 is to be invested, enitledment [sic] to interest to follow the entitlement to the principal. Would you please advise." 118On the same day, Mr Stichter recorded in a file note a telephone conversation with the solicitor for the vendors: "'Without Prej'. DL willing to get dep plus interest earned and each party walks away. He to seek instns. Says if accepted, would like to formalise with Deed of Release." 119The file note also identified that there were two options: (a) "settle, $300K in trust to determination"; (b) "dep + interest, each walks away". 120On 5 February 2002, the appellant had a conversation with Mr Warren, as to which Mr Warren's file note recorded: "I indicate the consequences of failing to complete in accordance with a valid Notice to Complete and also point out that if the Notice to Complete is invalid the termination is no more than a repudiation i.e. the contract still remains on foot. If the termination is valid then the purchaser will lose the deposit and, subject to the price of the property, may be liable for damages. ... If the termination is invalid and the contract is on foot then the purchaser can seek specific performance and damages. Mr. Lucantonio asks whether if he settles it would be possible then to sue the vendor for damages. I indicate that in my view it would .... The difficulty that may flow from such a course is that if the funds are disbursed it may be difficult to recover the damages from the vendor. The third alternative is to continue to seek specific performance with compensation i.e. maintain the current position. Mr. Lucantonio asks what his changes are. I state that in my opinion his chances are good but I cannot give any assurance as there are too many vagaries in litigation." 121At 6.05pm that day, the appellant sent a handwritten facsimile to Mr Stichter. It commenced by stating that he would not be available on the phone until after a time which is illegible in the facsimile. He then set out a number of courses of action and sought advice. 122Mr Stichter responded by a facsimile to the appellant setting out in a number of brief handwritten paragraphs the history of the matter and ending with a request for instructions. Paragraph 8 referred to the issue of the notice to complete; the memorandum continued: "9. I ask you: do you want the property and get damages, or do you want out of the contract? You reply you don't want to lose the property but it is not worth the price if the development consent does not work. 10. Because you want to keep the property, we institute proceedings for: a) Specific Performance - that they perform the contract with a proper development consent, and/or b) damages. 11. They say: we rely on our Notice to Complete and if you don't settle, we will terminate the contract, keep the deposit etc. 12. You then say: Because it is less risky, I think I would rather settle and get them to keep $300,000 in trust or, if they won't agree to that, end the contract and get my deposit back. 13. They say no to both proposals. 14. The safest course for you now is to settle and argue the damages issue later. That way the worst you stand to lose is a costs order, you stand to gain damages, interest and costs. 15. To settle, we would probably need an extension of time, a day or so. 16. Do they have a right to terminate? We say no, they say yes. The issue is not clear cut. 17. According to Mr Warren (with whom I agree), if they purport to terminate, we say to them: 'You had no right to terminate because of the invalid development consent. However, we are treating your purported termination as a repudiation of the contract, entitling us to get our deposit back.' 18. We then amend our Court pleadings to obtain return of the deposit by reason of the repudiation instead of specific Performance and damages. 19. The issue is: what do you want?  Keep property and claim damages?  End the contract and seek the deposit? 123The appellant responded at 10.46pm, in a facsimile setting out an analysis of the options and his preferred position: the handwritten document is transcribed by the trial judge at [47]. As the trial judge noted at [48]: "None of Mr Lucantonio's proffered options then included completing the purchase, or seeking an extension of a day or two to do so. Although Mr Lucantonio now says that that is because by 5 February 2002 there was (so far as he was aware) insufficient time to obtain finance, there is no reference to that being a relevant factor in his contemporary analysis of the options." Findings of trial judge 124The trial judge accepted (a) that Mr Stichter had sent the appellant a copy of the notice to complete when it was received, (b) that the appellant understood that he was required to complete the purchase by 6 February 2002 and (c) that if he did not, the vendors would be entitled to terminate. The trial judge also accepted that the appellant had said that he did not wish to settle without a reduction in the purchase price: at [28] and [122]. In the latter paragraph the trial judge continued: "Mr Lucantonio had received, and read, the notice to complete, and he understood the consequences of not complying with it, which were spelt out in it, and also by Mr Warren in their telephone conversation on 5 February, in which Mr Warren advised that if he failed to comply with the notice to complete and the notice was valid, then he would lose the deposit and may be liable for damages. In that telephone conversation - prior to Mr Lucantonio's receipt of Mr Stichter's 5 February facsimile - Mr Warren also responded to Mr Lucantonio's inquiry about settling and claiming damages subsequently by confirming that, in his opinion, it was an option, and Mr Lucantonio not only raised the issue, but also expressed no surprise at the response. Mr Lucantonio's response to Mr Stichter's 5 February facsimile, setting out his own analysis of the options, contains no hint of surprise that he was now being advised that the safest option was to complete." 125The trial judge then assessed what the appellant would have done had he been given timely advice. No criticism has been raised as to the statement of the proper approach to that matter, which is lucidly set out at [126]-[128] and need not be repeated. At [129] the trial judge stated: "Proper advice to the Lucantonios in the circumstances would have been, in ample time to make and implement their decision, that they could either: (1) complete the purchase for the full price, with the problems associated with the development approval, and bring proceedings for damages for misleading and deceptive conduct after completion; or (2) refuse to complete and, in the event of termination by the vendor and forfeiture of the deposit, bring proceedings for recovery of the deposit under s 55(2A) and for damages for misleading and deceptive conduct. Of these options, the first involved the least legal risk, as they would be performing their legal obligations under the contract, but they might end up with a property worth significantly less than the price they were paying for it, and their ability to recover moneys from the vendor if their claim succeeded could not be assured; whereas the second risked loss of the deposit and potential exposure to damages if their position proved to be incorrect." 126At [134] the trial judge noted that: "While, from a legal perspective, it may have been safest to complete, in that the alternative of not completing risked that the vendor might terminate and forfeit the deposit, leaving any chance of a successful outcome to the vagaries of litigation, the risk in completing was commercial - that (by reason of the problems with the development approval) the purchaser might acquire a property worth significantly less than he had assumed and was prepared to pay (and in addition that the vendor might dissipate the proceeds so as not to be able to satisfy a judgment)." 127At [135], he continued: "Underlying the message in Mr Lucantonio's 6.05 pm 5 February facsimile to Mr Stichter is a disinclination to complete by paying over the full balance purchase price: Mr Lucantonio's desire to acquire the property was not so great as to justify, in his mind, parting with the whole of the balance purchase price. ... Even when admittedly told, on 5 February 2002, that the safest option was to 'settle and argue the damages issue later', Mr Lucantonio does not appear to have given that course serious consideration. Although it might be said that there was (in his mind) insufficient time to pursue it, as (so far as he reasonably knew) funds could not be arranged with the Bank in the few hours remaining until 2.00 pm on 6 February, it is particularly striking that he did not adopt Mr Stichter's suggestion that a short extension of a day or two could be sought to permit them to complete - a course which one would have expected him to explore if he were at all inclined to the 'safest' course. ... Even though settlement with a subsequent claim for damages was an option of which he was fully aware - he had asked Mr Warren about it earlier on 5 February, as well as its being mentioned as the 'safest' course by Mr Stichter - his review of the options did not include it at all." 128The trial judge concluded that the appellant made a commercial decision with knowledge of the legal options, having been advised by counsel that the vagaries of litigation precluded any firm conclusion as to the likelihood of success. The appellant was a sophisticated developer with some experience of litigation. Challenges on appeal 129The first basis of challenge relied on the suggestion that the trial judge had disregarded steps taken by he appellant in late 2001 which demonstrated a willingness to settle, if given timely advice. The events during this period were said by the appellant to support a finding that he would, if advised to do so, have completed the purchase, if not on 16 January 2002 then on the date provided in the notice to complete, namely 6 February 2002. 130However, to the extent that the appellant's state of mind was revealed by the events prior to 17 January 2002, it was significant that the appellant had not taken significant steps preparatory to settling the purchase. The appellant agreed in cross-examination that he had not advised the Bank of the information provided by Mr Kleinert prior to 17 January: Tcpt, 05/08/09, p 143. He also agreed that, prior to settlement, he "would have felt obligated to" tell the Bank about the Kleinert information: Tcpt, p 145(20-25). Not having discussed the information with the Bank, he did not know what its attitude would have been: Tcpt, p 144. Further, although he believed that Mr Stichter had been communicating with the Bank, he did not instruct him to proceed with preparation of necessary security documents: Tcpt, p 147(40). 131Contrary to the submissions for the appellant, the events of that period were largely neutral. It was true that the appellant put in place the contractual documentation (including signing the necessary guarantees and possibly the mortgages on 7 January 2002) to enable settlement to take place. However, at no stage did he give instructions that settlement should take place. It was by no means clear that the trial judge disregarded the events which occurred during that period (all of which he addressed in the course of his reasons) in his analysis of what the appellant would have done if properly advised; in any event, those events should not have led him to a different conclusion. 132The appellant also submitted that, as the evidence demonstrated, he had a history of accepting legal advice. Thus, in December 2001 he had commenced proceedings in the Equity Division when advised that such a course was legally warranted. There were, however, difficulties in giving weight to this submission. First, the precise motivation for those instructions was not explored in evidence. There was no reason to conclude that the decision to commence the Equity proceedings was not the result of commercial and legal considerations being aligned. The material set out above supports the conclusion that the decision not to complete the contract was an entirely rational assessment of commercial risks, albeit risks associated with litigation. Whether or not the trial judge gave weight to the history of accepting legal advice (and the Court was not taken to any submissions at trial in support thereof) this Court would not give it significant weight. 133The second limb to the appeal was that, having concluded that the solicitor's advice came too late for the appellant to consider it properly and make a decision based upon it, the trial judge nevertheless placed significant reliance upon the actual response of the appellant. The appellant contended that limited weight should have been given to his response to the options placed before him on 5 February 2002 because he had no time to digest the advice, being faced with a crisis created by the negligence of his solicitor. Although the funds could have been made available the next day, as the evidence demonstrated, neither the appellant nor Mr Stichter were aware of that fact, as was accepted by the trial judge. The proper course, it was submitted, was to determine what would probably have been done had the appellant been properly advised in late January, when there was time to reach a considered decision. 134In theory the appellant's submission was valid; in practical terms, it failed to accord adequate weight to the evidential difficulties confronting the appellant on such an issue. Thus, the appellant could not himself have given evidence as to what he would have done had he been given proper advice in a timely fashion: Civil Liability Act 2002 (NSW), s 5D(3). The course which the appellant would have taken (as to which he bore the burden of proof) had to be assessed by reference to the admissible evidence bearing upon the issue. While appropriate allowance should properly be made for the difficulties created for the appellant by the solicitor's negligence in giving the advice belatedly, the appellant's response to the advice when given was nevertheless relevant and significant. This was not a case where proper advice was not given: it was a case where proper advice was given, but belatedly. 135The superficial attraction of these submissions also dissipates on closer inquiry as to the facts. First, as appears from the history of events set out above, the options being considered on 5 February were not novel: they were all matters which had been raised before. The only novelty was the recording by Mr Stichter of completion as being the "safest" option. While the discussion of options came very late in the day, the possibility of completion (and the need to complete) by 6 February to avoid termination by the vendors had been known to the appellant for some time. 136Secondly, the trial judge was correct in taking account of the absence of any protest by the appellant at the suggestion that he should complete the purchase, beyond his complaint that Mr Stichter had failed to return telephone calls over the preceding days, a complaint which went to breach rather than causation. 137Thirdly, the suggestion that he dismissed the possibility of completion because he assumed that finance would not be available from the Bank and further assumed that the vendors would not allow "a couple of days" to permit finance to be obtained was speculative. In cross-examination, the appellant had accepted that he would not have settled the transaction with finance from the Bank without informing it of the Kleinert information: Tcpt, p 151(5), confirming that that was true as at 5 February 2002. The cross-examination continued, at 151(20)-152(10) : "Q. You did not ask Mr Stichter to see if he could arrange for a settlement with the National Australia Bank, did you? A. With respect, he mentioned it in the letter before. Q. Well, you didn't ask him to arrange to take steps to arrange for settlement with the National Australia Bank, did you? A. No, I did not. Q. You didn't ask Mr Stichter to see if the vendor would agree to a couple more days of extension so that a settlement could take place, did you? A. No, I did not. ... Q. You didn't make any attempt in 2002 to tell National Australia Bank about the Kleinert advice, did you? A. What date was that. Q. February 2002? A. Well, that was on 5. It was quarter to 11 at night. I couldn't. Q. And you had no intention, whatever else happened, of settling this transaction without telling the National Australia Bank about the Kleinert advice, did you? A. I believe that I would have wanted to have told them about the issues with the DA. Q. But you weren't going to settle without first telling them? A. That's correct?" 138As counsel for the appellant conceded in the course of oral argument, not only did the appellant not express surprise at the advice he was being given on 5 February, but he took no steps the following morning, either to inquire of the Bank as to the possibility of obtaining finance expeditiously, or to instruct Mr Stichter to pursue the possibility of a short delay with the solicitor for the vendors. 139Finally, the appellant sought to make a case based on an objective assessment of the profitability of the proposed development, even accepting the additional costs which might be incurred because of the problems with the accommodation of the necessary parking spaces. It was not suggested that the appellant had himself made such a calculation, but rather that the timeframe within which advice was given and a decision required had precluded a considered approach to the problem. Thus, counsel took the Court to an internal Bank document involving a feasibility assessment, no doubt based on figures provided by the appellant, but investigated and accepted by the Bank's officers. Thus, although the appellant had apparently submitted a return on costs in excess of 67%, the property finance unit at the Bank worked from a return on cost of 27%. Counsel submitted that even an increased cost of $340,000, would only be 10% of the project cost and hence would leave a respectable margin even on the Bank's conservative calculation. 140The submission did not suggest that the trial had been run on that basis. Indeed, as counsel for the respondent noted, the appellant's own pleading had stated that the "extra cost involved in excavating a further level and in attempting to obtain further development approval including the delays associated therewith, when added to the purchase price, made the project uneconomical and unavailable if the property had to be purchased at the price stipulated in the Contract for Sale": Third Further Amended Statement of Claim, par 16. More significantly, if there had been substance in the point raised on appeal, it would have been a response expected from the appellant immediately the problem was raised by Mr Kleinert in November 2001. There was no such response. Finally, in the absence of any discussion of the issue at trial, little can be made of the estimates of profit margin. The widely disparate estimates of the appellant (67%) and the Bank (27%) do not allow for a retrospective assessment of commercial feasibility by the Court, which was not raised contemporaneously by the appellant himself. Conclusions (a) the appeal 141This was a case in which the trial judge found that accurate legal advice as to the preferred option, in respect of a commercially fraught development, was given, but only belatedly. The further finding that the appellant would not have acted differently from the course in fact adopted had the advice been given in a timely fashion was well supported on the evidence. The specific complaints as to the use made by the trial judge of particular aspects of the evidence lacked substance. The appeal should be dismissed with costs. (b) the cross-appeal 142The cross-appeal was abandoned, but there remained an issue as to costs. The notice of cross-appeal was filed on 20 December 2011, seeking to uphold the judgment below on the basis that the trial judge erred in finding a breach of the solicitor's duty of care to his client. Two grounds were relied upon. However, success on either ground would only have resulted in the order below being affirmed, without variation. Accordingly no cross-appeal was required; each ground should have been dealt with in a notice of contention: Uniform Civil Procedure Rules 2005 (NSW), r 51.40. 143Where a notice of contention has been filed and pursued on appeal, but the respondent is otherwise successful in resisting the appeal, the Court will not normally limit the recovery of costs by the respondent from the appellant. In this case, the cross-appeal was not only unnecessary, but was not the subject of any supporting submissions and was in practical terms abandoned at an early stage. The respondent should not be able to recover any costs incurred in relation to the cross-appeal, but neither should it pay costs (assuming that the respondent incurred any with respect to the cross-appeal). Accordingly, the cross-appeal should be dismissed with no order as to costs. 144The Court should make the following orders: (1) Dismiss the appeal from the judgment of Brereton J in the Common Law Division delivered on 19 July 2011. (2) Order the appellant to pay the respondent's costs of the appeal. (3) Dismiss the cross-appeal. 145BARRETT JA: For the reasons stated by McColl JA and Basten JA, the primary judge correctly concluded that, although the respondent solicitor was negligent, his negligence was not causative of the loss in respect of which the appellant sued for damages. I agree, therefore, that the appeal should be dismissed with costs. 146As to the cross-appeal, the fact that it was abandoned at an early stage and played no real part in the litigation is sufficient to warrant the conclusion that it should simply be dismissed with no order as to costs. ********** 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. Decision last updated: 06 February 2014