Campbell & Campbell v Hyland & Ors [1993] QSC 394

o._ q[\ ~ c ~ 2:>/.3 '9 "f- ~'- ~ ·tl'if State ReJJorting Bureau ~· ~· '.fl«• TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the \\Titten authority of the Director, State Reporting Bureau.) SUPREME COURT OF QUEENSLAND ~IVIL JURISDICTION JWHITE J No 1478 of 1985 WILLIAM DAWSEY CAMPBELL and KERRY ANN CAMPBELL (formerly trading under the firm name and style of W D CAMPBELL & COMPANY) and GEOFFREY LEON HYLAND and LAWRENCE MICHAEL WARNICK (formerly trading under the firm name or style of HYLAND & CO) and LAWRENCE MICHAEL WARNICK and IAIN CAMPBELL MARSHALL and LIONEL CEDRIC JULIAN LESS and GEOFFREY LEON HYLAND (formerly trading under the firm name or style of LEES HYLAND & MARSHALL) and WILLIAM FREDERICK APLIN BRISBANE .. DATE 27/10/93 .. JUDGMENT 1 Plaintiffs First Defendants Second Defendants Third Defendant 4t1: Floor, The L.aw Courts,. Geor>!e Street, Brisbane, 0. 4000 Televhone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 40 -- .281093 dfc (White J) HER HONOUR: In this action I have found that the plaintiffs have made out their action in negligence against each of the first, second and third defendants. In relation to the question of quantum, with respect to the first head of damage, that is failure to plead a damages claim, as will be seen from the reasons which I publish, it will be necessary to have some of those figures calculated on the basis of facts which I have found, and they will need to come back to me for final decision and they will be straightforward enough, I imagine, for the experts who are going to do them, but were not straightforward in the slightest for me, and having battled with them for some time, have come to the conclusion that that is the sensible course. I find that the first and second defendants were negligent in failing to warn the plaintiffs that damages would be unlikely to be recovered from Robertson and that those damages should not be relied upon to finance any further ventures. The quantum of those damages I estimate at $350,000. I do not award damages for the personal injury claim by Mr and Mrs Campbell and I order that the costs paid away by Mr Campbell to the solicitors should be recovered in the sum of $9,579.24 the figures for which were provided to me by the solicitors for the plaintiff subsequent to the hearing, I understand with the consent of the solicitors for the first, second and third defendants. I will hear submissions as to costs in due course. 10 2 30 40 50 2 60 JUDGMENT _..---, y;/ I) . e____.l--( ----~ / . / \ ~ ~9 -- 2 of 40 -- IN THE SUPREME COURT OF QUEENSLAND No. 1478 of 1985 Brisbane Before Justice White [Re Campbell & Or v Hyland & Ors] BETWEEN: AND: WILLIAM DAWSEY CAMPBELL and KERRY ANN CAMPBELL formerly trading under the firm name and sty~e of W.D. CAMPBELL & COMPANY GEOFFREY LEON HYLAND AND LAWRENCE MICHAEL WARNICK (formerly trading under ·the firm name or style of HYLAND & CO) Plaintiffs First Defendants LAWRENCE MICHAEL WARNICK and lAIN CAMPBELL MARSHALL and LIONEL CEDRIC JULIAN LESS and GEOFFREY LEON HYLAND (formerly trading under the firm name or style of LEES HYLAND & MARSHALL) Second Defendants WILLIAM FREDERICK APLIN Third Defendant REASONS FOR JUDGMENT - WHITE J. Judgment delivered 26/10/1993 CATCHWORDS: Counsel: Solicitors: Hearing Date(s): Professional negligence Barrister Solicitor - Failure to claim damages for breach of contract - "Collectibili ty" of damages - Quantum of damages - Failure to warn - Causation of damage - Personal injury for anxiety and distress - Contribution. Mr K Fleming Q.C. and Mr L Bowden for the plaintiff Mr R Chesterman Q.C and Mr J McKenria for the first and second defendants Mr M Walters solicitor for third defendant Gadens Ridgeway for the plaintiff Feez Ruthning for the first and second defendants Walters & Co for the third defendant 20 July 1992 - 30 July 1992 · -- 3 of 40 -- IN THE SUPREME COURT OF QUEENSLAND No. 1478 of 1985 Brisbane Before Justice White [Re Campbell & Or v Hyland & Ors] BETWEEN: AND: AND: AND: WILLIAM DAWSEY CAMPBELL and KERRY ANN CAMPBELL formerly trading under the firm name and style of W.D. CAMPBELL & COMPANY GEOFFREY LEON HYLAND AND LAWRENCE MICHAEL WARNICK (formerly trading under the firm name or style of HYLAND & CO) Plaintiffs First Defendants LAWRENCE MICHAEL WARNICK and IAIN CAMPBELL MARSHALL and LIONEL CEDRIC JULIAN LESS and GEOFFREY LEON HYLAND (formerly trading under the firm name or style of LEES HYLAND & .. MARSHALL) Second Defendants WILLIAM FREDERICK APLIN Third Defendant REASONS FOR JUDGMENT - WHITE J. Judgment delivered 26/10/1993 The plaintiffs seek to recover damages from the first and second defendants as solicitors for breach of their retainer and breach of a duty of care owed to them. They also seek to recover damages from the third defendant as barrister for breach of the duty of care which he owed to them. -- 4 of 40 -- 2 The first and second defendants and the third defendants seek contribution inter se in the event that the plaintiff is successful. The male plaintiff at all times acted on behalf of Kerry Ann Campbell, his wife, and for their firm W D Campbell and Company. The original action about the conduct of which complaint is made was brought in the firm name. Mr and Mrs Campbell were the controllers of the trustee company of a unit trust. I shall refer to Mr Campbell as representing these interests. The first and second defendants at all times adted through Geoffrey Hyland, a solicitor. The matters giving rise to the plaintiffs' action are not without complexity and the question of the quantum of damages is of some difficulty. In brief, the plaintiffs claim that failure by the defendants to make a claim for damages for breach of a certain oral agreement entered into between Mr Campbell and one Robertson in litigation between them, has lost for them the chance of recovering those damages. The plaintiffs further claim that a failure by Mr Hyland to warn them that they may not be awarded or recover any damages subsequent to a judgment on the agreement in their favour was a further breach of the retainer which caused monetary loss. Finally, the plaintiffs claim damages for mental distress and anguish associated with the above losses. The Robertson Agreement In about 1972 the plaintiff and his wife purchased some cattle for tax minimisation purposes and agisted them on Mr Campbell's father's property near Boulia. The cattle were moved -- 5 of 40 -- 3 to a property near Julia Creek owned by one Magoffin and they remained there for about five years until that property was substantially burnt out in 1977. Although the plaintiff was brought up on a rural property, after leaving school he worked as a clerk and then as an agent for National Mutual. Reginald Robertson agreed to Mr Campbell's request that the cattle could be moved on to his property "Roundoak" about 12 kms from Cloncurry. Mr Campbell had known Robertson for many years and was on socially friendly terms with him and his wife and family. Mr Robertson maintained that the agreement was merely for agistment, whilst Mr Campbell said it was more complex. Findings as to the terms of that oral agreement were made by Kneipp J. on 4 December 1981 to which I shall refer subsequently. Mr Campbell left the district shortly after his cattle were placed on "Roundoak" and there was little contact with Robertson. There was no reporting to Mr Campbell as agreed which was necessary at the very least for taxation purposes. In about 1978 Mr Campbell contracted encephalitis and became ill and incapacitated for work and that illness was to affect his health for a number of years. In March 1979 Mr Campbell' s bank in Cloncurry wrote to inform him that Robertson had sold a few cattle from time to time depositing just over $1,000 in the account set up for this purpose by Mr Campbell and that there were few left to sell. (ex. 3) Mr Campbell was advised by the third defendant, whom he knew from school days, to contact Mr Geoffrey Hyland, a solicitor. He consulted with Mr Hyland on 10 May 1979, possibly in relation to Magoffin's earlier carelessness in relation to his herd of -- 6 of 40 -- 4 cattle and Magoffin's claim on Campbell for agistment fees~ but particularly with respect to Robertson's failure to account for the cattle and the worrying letter from the bank. Mr Hyland wrote a standard letter before action to Mr Robertson. At about that time Mr Campbell went to New Zealand on a lengthy holiday (having won some $240,000 in a lottery in March 1979). Some communications occurred with Robertson but nothing detailing the numbers of cattle and proceeds of sale at all satisfactorily and another before action letter was sent on 4 July 1980 to Robertson. On 7 July 1980 the third defendant was briefed to draw a writ for a declaration that the agreement between the plaintiff and the defendant had been terminated, for the appointment of a receiver to take an account and make enquiries and for the re- delivery by the defendant to the plaintiff of all cattle, the property of the plaintiff. He was also instructed to draw the necessary papers for summary judgment and to settle the draft affidavits. F.G.C. and the Purchase of Horses Mr Campbell was interested in breeding horses and whilst on holiday in New Zealand had looked into that business. On his return he had set up a trust, the F.G.C. Unit Trust, with F.G.C. Breeding Pty Ltd as the trustee and had advanced some $80,000 to it for the purchase of 11 horses in or about April 1979. In about March 1978 he purchased a home in Brisbane for about $68,000 and after winning the lottery he spent a further $40,000 on it in improvements. ··~ -- 7 of 40 -- 5 Mr Campbell set up the breeding programme because the medical advice which he received suggested that it would be two years before he could expect to recover from the effects of encephalitis and he needed a hobby. Thereafter he expected that it would provide him with an income. He believed that he had enough money to see him through the first two years before the mares could go to stallion - a period when he would have to absorb the costs. He added that he expected to get some cash flow from the cattle placed with Robertson on "Roundoak". In about 1981 that there was some pressure upon him to acquire land of his own to develop the breeding programme. Mr Campbell, although famil~ar with rural pursuits and with horses, says that he equipped himself for his venture by appropriate reading. From about 1980 Mr Campbell became very friendly with Mr Hyland when they discovered a mutual interest in racing, and with their wives they would attend the races together when Mr Campbell had a horse racing. Mr Campbell believed that Mr Hyland knew about his horse breeding plans for the future. Mr Hyland had seen little of him until the third defendant approached Mr Hyland to assist Mr Campbell with his superannuation claims against National Mutual in April 1980. I accept Mr Hyland when he says that their common interests in horse racing were not identified until mid-1980 and that he was not interested in horse breeding. It is significant that another legal firm set up the F.G.C. Trust in 1979 and I think it likely that Mr Hyland knew less detail of Mr Campbell's plans than Mr Campbell believed he knew. On the other hand, Mr Hyland when giving evidence appeared to have little independent -- 8 of 40 -- 6 recollection of events during this period and relied heavily on diary notes. My conclusion was that Mr Hyland knew more about Mr Campbell' s plans in 1980 - 1981 then he was prepared to concede. The Robertson Litigation The first and second defendants admit that in breach of their retainer they failed to ensure that the writ of summons in the action against Robertson was endorsed with a claim for damages and failed, prior to the hearing of the action, to apply to amend the claim to include a claim for damages (ex. 1). The third defendant makes no such admission. Part of the problem seems to have been an initial perception by Mr Hyland that Mr Campbell and Mr Robertson were partners in the cattle enterprise. This may well have been the origin of Mr Campbell' s understanding that the litigation would be a two stage affair - the dissolution of the partnership and the taking of accounts. Even after the third defendant had advised that the relationship was contractual and drafted and settled pleadings to reflect that, Mr Campbell retained the notion that two steps were involved in the litigation process. In the light of what occurred it was not unreasonable for him to continue to think that way and certainly the action as pleaded called for some further step if Mr Campbell were to recover anything at all from Mr Robertson. Even though I accept that Mr Campbell was predominantly concerned to recover his cattle prior to the trial, the information available to him and his legal advisers was that there were, in fact, very few cattle identified as "his" left on "Roundoak". -- 9 of 40 -- 7 It was suggested by the third defendant that Mr Campbell had given specific instructions to him that he did not wish to claim damages from Mr Robertson because the Robertson family would suffer. Mr Campbell's tender feelings were because the third defendant understood Mr Campbell to convey that he had had a romantic relationship with Mrs Robertson and did not wish to impose hardship upon her. Mr Campbell denied either ever saying anything to the third defendant from which this could be concluded or indeed any such relationship in fact. I accept Mr Campbell's evidence. An opd feature of the third defendant's explanation was that he never discussed it at all with Mr Hyland, his instructing solicitor, and said that he thought that Mr Hyland must have known all about the reason why no damages were to be claimed. This does not sit well in light of Mr Hyland's memorandum to him as counsel dated 2 June 1981 requesting him to advise whether an amendment should be made to include a claim for damages in view of the fact that there were then thought to be very few cattle on "Roundoak". The third defendant ignored that request in his advice of 16 June 1981 in response, but made a somewhat delphic suggestion in the light of the pleadings that it would be necessary to have evidence of the value of the stock at all times during the period. Even as late as the eve of the trial in Mt Isa the question of damages was raised by Mr Hyland but the third defendant said that he believed Mr Campbell to be sending him covert signals that that was not to be. I do not accept his explanation as to why the claim was never endorsed to seek damages. In the events which had occurred it was clearly the appropriate course. If the -- 10 of 40 -- 8 third defendant did have this belief that Mr Campbell did not wish to recover anything beyond his cattle from Robertson he could have advised that there was no need to execute. I conclude that it was negligent of the third defendant to fail to include a claim for damages in the pleadings settled by him initially. It was further negligence when he failed to advise an amendment to that effect on 16 June 1981 or at any time prior to or during the trial. At the beginning of October 1980 there were drought conditions on "Roundoak" and Mr Robertson indicated that he was mustering the cattle and would put them in a yard with access to water, but he would not be responsible for pumping that water. This followed an earlier request by Mr Robertson to Mr Campbell to remove his cattle from "Roundoak" but Campbell, who said that he was not advised to do so by Mr Hyland but to let the litigation run, left them there. There had been some unsuccessful attempts to settle the dispute over the previous weeks. In light of Mr Robertson's intimations Mr Campbell brought an urgent ex parte application for injunction and on 9 October 1980 Connolly J ordered that the defendant be restrained from yarding the cattle so as to cut them off from water. On 19 November 1980, upon the plaintiff providing the sum of $500 for the cost of watering the stock, Dunn J ordered, by consent, that the injunction remain in force until February 1981 when it was expected that the trial of the action could be heard in Mt Isa. The plaintiff was ordered to pay two-thirds of the defendant's -- 11 of 40 -- 9 costs of an appearance on 17 November. No explanation as to that costs' order was provided to Mr Campbell. The trial did not proceed in that sittings but was heard before Kneipp J at Mt Isa on 26 November- 1981. His Honour's orders and reasons given on 4 December 1981 ought to have alerted Mr Campbell's legal advisers that all was not well, perhaps it did, but I conclude that no hint of this was given to Mr. Campbell. His Honour declared that there was an oral agreement with express terms as contended for in the statement of claim (with the exception of (c) and (d), that Robertson breached the agreement and that the plaintiff had lawfully terminated the agreement. Those terms were: 11 (a) the plaintiff would supply to the defendant 126 head of cattle; (b) the defendant would- grass the said cattle and their progeny on his property; (c) (d) (e) the defendant would brand and muster the said cattle and make sales from time to time in accordance with proper procedure; (f) the defendant would report to the plaintiff once, at least, in each year as to the numbers of cattle and particulars of sale; (g) the proceeds of any such sales of cattle would be divided equally between the plaintiff and the defendant; (h) that the profit sharing -agreement made between the plaintiff and the defendant should continue for the space of ten (10) years; (i) at the expiration of the agreement the plaintiff and the defendant would divide the cattle then remaining equally between them. 11 Sub-paragraphs (c) and (d) were pleaded respectively as follows: -- 12 of 40 -- 10 "(c) The defendant would take all necessary and proper action to ensure that the said cattle and their progeny were husbanded, grazed, watered and properly cared for; (d) The defendant would adequately fence his said property whereupon the said cattle were grazed." His Honour observed of these sub-paragraphs: "Sub-paragraph (c) alleges that it was a term of the agreement that the defendant would take all necessary and proper action to ensure that the cattle and their progeny were husbanded, watered and properly cared for. It was not pleaded that any of the terms set out in paragraph 2 [of the statement of claim] were express terms: they were merely pleaded as terms; and sub-paragraph (c), although not express would no doubt be implied. Sub-paragraph (d) alleges that it was a term of the agreement that the defendant would adequately fence the property on which the cattle would graze. There is no evidence of any express agreement about this, and whether or not the term would be implied may be·doubtful. It was not pursued in argument, as I recollect it, before me." His Honour noted that there was no full argument as to what relief should be granted in the event that the findings were in favour of the plaintiff. The costs were reserved. His Honour adjourned for further consideration all other claims including a counterclaim for agistment brought by Robertson. Both Mr Hyland and the third defendant realised that damages ought to have been claimed and evidence led after the judgmentwas handed down. It was recognised that compromise with Robertson was the best solution and offers were made but the parties were far apart. The advice which Mr Campbell was receiving from them continued however to be optimistic although he was then pressed for payment of outstanding fees in relation to the trial. In due course a summons was heard in chambers in Brisbane at the end of 1982 seeking to amend the statement of claim in the -- 13 of 40 -- 1 1 action to claim damages for breach of contract. That application was transferred to Townsville by order of the court and on the 31 May 1983 Kneipp J, in the exercise of his discretion, refused leave to amend with costs against the plaintiff. The plaintiff was then advised that the only recourse was to sue in a fresh action and that that cause of action would expire in 1986. Again there was no suggestion that Campbell would be other than successful in any fresh action. In August 1983 the plaintiff discontinued his professional relationship with Mr Hyland and the third defendant. The Campbell's Financial Affairs Piecing together the evidence because over such a long period of time even with the assistance of documents, the recollections of the witnesses were far from precise, it seems that by about the end of 1980 the Campbells had had the $240,000 won in the lottery, some $75,000 or so recovered from National Mutual (it seems that the second sum of $9,000 was substantially retained by Hyland for the payment of fees) and the discharge of the mortgage of $40,000-by the fund~over their house property. By the second half of 1981 Mr Campbell said that his horse breeding programme was eating heavily into his funds. He had had an operation early in 1981 and had not worked for some years and was not likely to be engaged in outside employment in the immediate future because of his poor health. By the end of 1981 and into early 1982 the mares were four year olds and were at stud in Sydney and Victoria. The five sent to Victoria did not foal the first year. Mr Campbell had acquired interests in two stallions but they were unsuccessful. Mr Campbell's plan was to -- 14 of 40 -- 12 bring the progeny back to a property which he would by then have purchased. By the end of 1982 he was in the position where, he says, he had to buy a property or abandon his whole breeding programme. In November 1982 Mr Campbell's company F.G.C. Breeding Pty Ltd, contracted to buy a property, "Nyletta Downs••, near Warwick for $135,000. He said that he consulted Mr Hyland about it. It seems that the contract was entered into the day prior to Mr Hyland opening a conveyancing file but I accept Mr Campbell's evidence that he discussed the purchase of a property with Mr Hyland. There were, I find, contacts between them not recorded in diary notes, and as I have found, Mr Hyland's present recollection is extremely sketchy. I do not accept that he warned Mr Campbell not to rely upon damages from Robertson to purchase a property. Earlier in the year when Mr Campbell was looking to buy a property and needed to obtain finance Mr Hyland wrote to the manager of the Commonwealth Banking Company of Sydney (to become the National Australia Bank) at the request of Mr Campbell. That letter assumes some importance in the plaintiff's contention in this action that Mr Hyland ought to have warned him that he may not have recovered any or any satisfactory damages from Mr Robertson after the first trial and before the purchase of a property. The letter dated 26 August 1982 is as follows: "We act for the Plaintiff in this matter and enclose:- l. Copy of the Judgment of the 4th December 1981 delivered by Mr. Justice Kneipp. 2. Copy of a Memorandum dated 7th April 1982 from Mr. E. F. Aplin, Barrister, to our firm. -- 15 of 40 -- 13 3. Copy of our client's calculation of the cattle to which he would be entitled. The summary figures should be divided in half because the Defendant would be entitled to one half of the cattle. 4. Copy of our memorandum of the 17th June 1982 to Mr. Aplin. We have not yet received the amended Statement of Claim from Mr. Aplin. Our client has requested that we give our opinion as to the amount that the Court would award against the Defendant. We refer you to the fifth paragraph of the memorandum dated 7th April 1982 from Mr. Aplin to our firm. You will note his comment 'It would then be a question of argument as to the appropriate method of calculation of damages.' The central issue is whether the damages should be calculated as at the date of breach of the Contract which is sometime on or before 4th July 1980, at the date of Trial or for the full period of 10 years being the term of the Agreement. Damages for breach of Contract must either flow from the breach or be in the contemplation of the parties at the time the Contract was made. Our client's evidence as to damages would be that he and the Defendant discussed the number of cattle that would be available at the end of the 10 year agreement. From the enclosed Schedule you will see that there would have been 1,204 cattle and in addition a total of 694 would have been sold, making a total of 1,898 head of which our client's entitlement would have been 949 either in kind or in cash. If this evidence is accepted, we are of the opinion that the quantum of damages is to be based on 949 head. If this evidence is not accepted we are of the opinion that the quantum of damages would be based on one half of the cattle as at 4th July 1980 plus one half of the proceeds of cattle sold. You will see from the attached Schedule that there should have been 250.00 cattle as at 4th July 1980 and by that date an additional 39 should have been sold. On this basis, our client would have been entitled to approximately 145 head of cattle. In this matter no Order has been made for costs to the present time. Our opinion is that the Defendant denied there was an agreement between our client and the Defendant relating to the cattle and it was necessary for our client to go to Court to establish · this. In that respect, the costs to date should be awarded to our client. In relation to future costs, -- 16 of 40 -- 14 we believe that these also should be awarded to our client, unless of course the Defendant paid an amount of money _into Court and the amount of the Judgment in favour of our client was less than the amount of money paid into Court in which event the Defendant would pay our client's costs to the date of payment into Court and thereafter our client would be responsible for the Defendant's costs. No payment into Court has been made to date. You will readily appreciate that in all matters of litigation the expressions contained in this letter are our firm's opinion and of course we cannot be held responsible for them as such." It might be described as a cautiously optimistic letter. Mr L. Gold of the bank who handled Mr Campbell' s application for finance said that that letter was influential in causing the bank to lend. Mr Hyland's then firm was becoming anxious about outstanding fees of around $5, 000 at this time but I do not conclude that that was the purpose of the letter as was suggested by Mr Hyland. The bank was prepared to lend $55,000 plus $5,000 working capital and the vendors were prepared to finance $30,000 to be repaid on 10 June 1983. The Campbells provided the balance of the purchase price from the net proceeds of the sale of their home at Carina. As at the end of June 1983 the records of the F.G.C. Unit Trust show that it owned the horses and the shares in two stallions and there were losses of $250,000. The money from the bank and from the vendor was in effect bridgirg finance and after the refusal of Kneipp J to allow the amendment claiming damages to the statement of claim in May 1983 since Mr Campbell was unable to service the loans, "Nyletta Downs" was sold in May 1984 for $150,000. In the period between purchase and sale Mr Campbell had expended funds improving "Nyletta Downs". As well as a place to keep his horses he was using it to fatten lambs and had done up a cottage on the -- 17 of 40 -- 15 property in which his mother was to live. Mr Campbell had sought to re-finance assiduously but without success after May 1983. He was devastated at having to sell the property which was to have been the culmination of his horse breeding plans. After the sale of "Nyletta Downs" no funds were left after paying the lenders and other creditors. Mr Campbell hoped that he might realise some funds from an action against Mr Hyland and so endeavoured to make whatever ad hoc arrangements that he could for the management of the horses. He entered into an arrangement with a Mr Quast to look after the mares and to breed from them. From three yearlings including bonuses $100,000 was made and after expenses the F.G.C. Trust received some $22,000. Three mares remain from the original purchase but have not been put to stud because of lack of funds. They are nearing the end of their breeding life in any event. Mr Campbell says that he is now without funds and has only about $20,000 worth of paintings purchased with his original lottery win and three mares. Mr Campbell accepted that by the end of 1982 the $400,000 or so of which he had come into possession between March 1979 and 1981 had all gone and that $250,000 of that sum had been used on the horses. He believed that had he received $30,000 in December 1981 that would have been sufficient to make the breeding programme viable. offer to settle In December 1981 he instructed Mr Hyland to the Robertson action on the basis that Mr Robertson would pay Mr Campbell 250 head of cattle over five years, that is, 50 head per year, which would not have realised -- 18 of 40 -- 16 $30,000. Mr Campbell contended that on the strength of such an agreement he could have borrowed the necessary funds. He blames his present financial predicament on the decision to buy "Nyletta Downs" at the end of 1982 and he· bought that property, he says, relying on assurances from Mr Hyland that he had won the action against Robertson and that it was simply a question of time before he would receive a favourable judgment which would give him an award of damages. At that time, he says, it was necessary for him to buy a property or cease involvement in the horse breeding programme. The cost of keeping the horses in agistment over the past years was considerable. At the time when he purchased "Nyletta Downs" the tax office had disallowed the horse breeding losses because it was not persuaded that it was a genuine business. Accordingly, the purchase of "Nyletta Downs" was an attempt to dissuade the tax office from this view. Mr Campbell' s initial purchase of cattle had been for tax purposes on the advice of his accountants in the 1970s. Liability (a) The first action; (b) Failure to warn The particulars of breach pleaded against the first and second defendants are: " (a) the First and/ or Second defendants by the said Hyland failed to instruct the Third Defendant to endorse the said writ of summons with a claim for damages; (b) the First and/or Second Defendants by the said Hyland failed to ensure that the said Writ of Summons was in fact endorsed with a claim for damages; (c) the First and/or Second Defendants by the said Hyland failed at any time prior to the hearing of the action before the Honourable Mr Justice Kneipp to cause an application to be made for leave to amend the statement of claim so as to include a claim for damages for breach of contract; -- 19 of 40 -- 17 (d) the First and/or Second defendants by the said Hyland failed to cause proper evidence to be adduced before the Honourable Mr Justice Kneipp on the Twenty-sixth and Twenty-seventh days of November 1981 as to the losses suffered by the Plaintiffs as a result of the breach by Robertson; (e) the First and/or Second defendants by the said Hyland delayed for some seventeen ( 1 7) months in making application to the Honourable Mr Justice Kneipp to have the writ of summons and statement of claim amended so as to raise a claim for damages; (f) at all times advised the Plaintiff that the action would succeed; and (g) at all times advised the Plaintiff that that action would be conducted in two phases and that damages would be obtained in the Second phase of the action; (h) that at any time between the fourth day of December 1981 and the Thirty-first day of May 1983 he failed to warn of the real possibility that damages may not be awarded and/or recovered in the action; (i) the particulars of the circumstance relied upon by the Plaintiffs in relation to the failure by the First and/or Second Defendants to warn of the real possibility that damages may not be awarded and/ or recovered in the action as set out in sub-paragraph (h) hereof are as follows: ( i} The retainer of the First and/ or Second Defendants was to act on behalf of the Plaintiffs in connection with the matters referred to in paragraphs 2 to 7 hereof, that is, in relation to the recovery of the money or action for the breach of the agreement referred to therein; (ii} The matters set out in sub-paragraphs (a), (b), (c) and (d) of paragraph 9 hereof; (iii} The action referred to in paragraph 14 hereof had been heard and had not resulted in a judgment of any consequence at that point in time; (iv} There was a legal difficulty, if not an impossibility, in pursuing a claim for damages in the said action; (v) There was a requirement during the said period to have a Judge exercise his discretion in relation to the matter of amendment of the pleadings in the said action; -- 20 of 40 -- 18 (vi) In that period, the judgment of Mr Justice Kneipp was entered and perfected; (vii) Hyland knew that the Plaintiffs intended to rely upon the proceeds of judgment for the purpose of pursuing their business interests and in that respect: (A) Hyland knew of the Plaintiffs' intentions because there had been full discussion with ·him of all of the Plaintiffs' affairs; (B) Hyland had acted in the course of 1982 in at least three transactions on behalf of the Plaintiffs in which there were attempts to purchase a property, the third one being successful, namely the purchase of Nyletta Downs; (viii) It was an incident of the retainer referred to in sub-paragraph (i) hereof to give such appropriate advice; (ix) In the premises, Hyland failed to give the appropriate advice, namely that alleged in sub- paragraph (h) hereof." The particulars of breach pleaded against the third defendant are:- " (a) when settling the said Writ of Summons failed to advise the said First and/or Second defendants and/or the Plaintiffs it was necessary or desirable to include in the Plaintiffs' claim a claim for damages for breach of contract; (b) failed at any time up to or during the said trial to advise the said First and/or Second defendants and/or the Plaintiffs that it was necessary or desirable to include in the Plaintiffs' claim a claim for damages; (c) when asked to advise on evidence in June 1981, and as to whether it was desirable to amend the statement of claim to include a claim for damages,· the third defendant either ignored those instructions, or, in the alternative, impliedly advised that it was unnecessary; (d) failed to advise that evidence should be adduced at the trial as to the Plaintiffs' damages; (e) at all times advised the Plaintiffs that the action would succeed; and (f) at all material times advised the Plaintiffs that the action would be conducted in two phases and that the -- 21 of 40 -- 19 damages would be obtained in the second phase of the action." The first and second defendants have admitted (b) and (c). I find that the plaintiffs have made out (a); (d) discussed below; (e) whilst Kneipp J's reasons for refusing leave to amend in May 1983 did not refer to the delay it cannot be concluded that had the application been brought promptly with appropriate offers to pay costs thrown away that it would have failed and I find that it was negligent on the civil balance to delay; (f) whilst I accept that prior to the hearing there would have been some expressions of caution because the agreement was oral and therefore issues of credit were involved after Kneipp J's judgment in December 1981 until his second judgment in May 1983 Mr Hyland conveyed very strong optimism to Mr Campbell about his prospects of success; (g) I accept that communications between Mr Hyland and Mr Campbell until May 1983 were to the effect that the litigation was in two parts the declaration and the damages; (h) I accept Mr Campbell' s evidence that Mr Hyland failed to warn Mr Campbell that damages may not be awarded in the action after December 1981 or may not be recovered. Whilst searches were carried out with respect to Robertson's worth no advice was given to Mr Campbell of difficulties associated with recovering against an individual whose assets are all partnership assets. I accept that Mr Hyland knew sufficient of Mr Campbell's business interests and plans and understood he was relying upon the proceeds of a successful damages judgment to carry out those plans including the purchase of a rural property. Mr W Tutt, a solicitor with considerable litigation experience, was of the view that he would advise a client that it would be unwise to -- 22 of 40 -- 20 rely upon the prospect of recovering damages if the client intended to pledge his credit with respect to th_ose damages in any subsequent conveyancing transaction. I accept that opinion. Mr Campbell was entirely unfamiliar with matters of law and legal process and relied upon Mr Hyland (and the third defendant earlier) for advice in the conduct of the action and its likely consequences. Because of the defendant's breach of duty in respect of the first action, of which they were very conscious, I find that they were more strenuous in assuring him that he would be successful in ultimately recovering damages that was consistent with their duty of care. I find that no warning was given. As found above, I do not accept the third defendant's version of his dealings with Mr Campbell over the question of damages. I find the particulars of negligence made out. Mitigation of Loss - Res Judicata/Estoppel It is contended for the defendants that Mr Campbell ought to have brought a new action for damages based on the declarations by Kneipp J on 27 November, 1981 in order to mitigate the damage. Mr Campbell obtained counsels' opinions in 1987 after the expiration of the limitation period that he would have been unlikely to have been successful and they can be of little use in establishing his reasonableness. There is nothing to suggest that Mr Campbell ought to have brought an action after the action was statute-barred. Mr Robertson would certainly have been advised to take the point and would have done so. I conclude that a court seised of the second action would have found that Mr Campbell was splitting his case as it was -- 23 of 40 -- 21 dependent upon the contract the subject of the first action and it matters not if the matter be characterised as res judicata or estoppel, Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 C.L.R. 589. The Lost Chance What the plaintiffs lost was the chance to have their action against Robertson litigated competently and it is accepted by the parties that that chance is to be assessed by reference to the facts and circumstances and the law at the notional trial date, Johnson v. Perez (1988) 166 C.L.R. 351. In this case there was a trial date and certain findings were made and accordingly in assessing the chance this Court can proceed upon the basis that the notional trial date was 18 November 1981 and that the notional court would have found, as did Kneipp J, that there was a contract between Robertson and Campbell; that the express terms of the agreement were those as found by his Honour; that Robertson was in breach of the express terms of the agreement; and that accordingly the plaintiff was entitled to terminate the contract. The notional court, had the action been brought competently, would have gone on to find, in the light of appropriate evidence the quantum of damages. When valuing the chance to recover money in a notional action the probable inability of the person against whom the right of action has been lost should be taken into account in assessing damages to be awarded to the plaintiff in an action against his lawyers for professional negligence, Perry v. Zaitman [1984] V.R. 31 4; and Trewhellar v. Trukeel Pty Ltd No 2348 of 1985 per \ Thomas J of 5 June 1986. -- 24 of 40 -- 22 Value of "Roundoak" and Robertson's Worth At the end of August 1976, Robertson and his wife and Robertson's brother and his wife were in partnership carrying on the business of graziers and retail butchers in Cloncurry. The partnership was dissolved from 1 September 1976 and each husband and wife constituted separate partnerships. The assets were dealt with and are set out in an agreement dated 5 May 1978. The partnership assets were said to have been valued by a registered valuer, J.G.B. Johnson of Cloncurry. The shop premises and plant of the butcher shop were sold for $8, 050. The plant and equipment at "Roundoak" were sold for $1,940. The brother's and his wife's interest in "Roundoak" were sold to Robertson for $24,345. The values assigned to the property and assets were declared by the parties to represent the true market value of the properties. At least by 1980 the butchery business and the grazing business conducted on "Roundoak" were operated by Robertson and his wife in partnership. The 1982 tax return for the partnership lists "Roundoak" at a value of $57,419.06. "Roundoak" was inspected by a Commissioner of the Department of Lands in late 1982 and who valued the improvements on the land at $55,130. The unimproved value of the land was $5,650 (exs. 31 and 38). Of assistance is a very detailed description of the condition of the property in ex. 38. The improvements were said to be old and not being maintained although the boundary fences with neighbouring properties were in a satisfactory condition. The stock were said to be in very good order at the time of inspection considering the dry conditions at the time. The -- 25 of 40 -- 23 general comment was that the property was not being managed to its full potential and improvements were not receiving full maintenance. Mr Lindsay Allan, a veterinarian, was on the property in 1980 and had a similar opinion. Mr Matson, a valuer called by the first and second defendants, estimated the value of "Roundoak'' in 1982 at $70,000 and Mr Eales, a valuer called by the plaintiffs, estimated its value as at 1 January 1982 at $160,000 and $185,000 as at 30 June 1983. I preferred the evidence of Mr Matson. He was a persuasive witness and thorough in his research relating to the property and comparable sales. His figure is consistent with the valuation of the Land Commissioner who examined the property in October 1982 bearing in mind the conservative nature of such valuations. The butchery business was valued at $7,774 in the 1982 tax returns. The value of cattle and horses and a share in a stallion on hand was about $30,000. Motor vehicles are shown at $3,800. At the end of 1981 the partnership assets amounted very approximately to $110,000. The tax return shows liabilities of around $58,000 principally consisting of bank loans. After 1983 the partnership tax returns show a steadily declining financial situation. At the trial Robertson's evidence was that in 1988 he was offered some $420, 000 for "Roundoak'' by a mining company interested in gold deposits on the property and he was minded to sell the property but was looking for more money. There were some other interests looking at buying the river flats for market gardens. -- 26 of 40 -- 24 The "Collectibility" of a Judgment Sum The case for the plaintiff is that Mr Campbell might well have delayed executing on a judgment until well into the future when, as has apparently occurred, the value of "Roundoak" had increased. The evidence is conflicting in this regard. Mr Campbell was making offers to settle after November 1981 (when he thought that he had been successful in the litigation) which entailed a projected period of five years over which 250 head of cattle could be delivered but, of course, this was in a situation where he had no damages judgment as he should have had. On the other hand, it is his case that at that stage it was essential to his plans to have an injection of capital of at least $30,000 if his horse breeding programme was to be at all viable. Mr Campbell struck me as a very decent sort of man who expressed concern about turning Mrs Robertson and her children off the property at the time. They were people he had known socially for years and he had, according to his evidence, many friends and relations on properties in the district. However, Mr Campbell also said in evidence very firmly that he would have executed against Robertson if it was necessary to achieve the sums of money that he needed for his plans. The real difficulty was that any judgment would have been against Robertson personally and by then his assets were held in partnership with his wife. If Mrs Robertson did not co-operate in a sale of cattle or of "Roundoak" or further borrowings from the bank then no execution could have been levied against the assets of the partnership without considerable difficulty. It may have been necessary to threaten bankruptcy proceedings -- 27 of 40 -- 25 against Mr Robertson in order to cause some settlement of the judgment sum to occur. My impression of Mr Robertson was that he was extremely stubborn and given his attitude to the agreement he was unlikely to have been co-operative over the collectibility of the judgment. On the other hand, it seems unlikely that he would have stood by and allowed bankruptcy proceedings and a sale of "Roundoak" by his trustee to have occurred. I have concluded as best I can on an evaluation of their respective personalities as they presented in this trial in the witness box that some compromise with Robertson would have been reached short of selling "Roundoak" but only after a protracted struggle. That would suggest to me that by that stage there would have been no plan to let the judgment carry over into the future in the hope of exacting more from Robertson over the following years. Because it is the loss of the chance which is to be valued the expected difficulty in recovery is a contingency which requires discounting the amount of damages which might have been recovered, Trewheelar v. Trukeel Pty. Ltd., supra, p.23. Quantum of the Notional Judgment In order to assess the measure of damages which the notional court might have awarded, there must be an estimation of the herd size and its value at the relevant time assuming that Robertson had duly performed the contract as found. The notional court would have found an implied term to care for the cattle, I find, and the level of care would have been what the facts known to the parties could support and the agreement as found implied. Campbell had left his cattle with Magoffin .. for some years. Magoffin apparently had no cattle of his own and was a school -- 28 of 40 -- 26 teacher. At least one other person agisted his cattle on Magoffin's property. The herd left by Campbell had increased because of "mickeys", that is, the herd's own bulls and the attraction which the cows had for the nearby research station bull. Mr Campbell said he considered that he had ~a similar arrangement with Robertson as he had had with Magoffin. Mr Campbell on his visit to "Roundoak 11 at that time did not inspect the property but only knew of ~what he saw on the drive out from Cloncurry although he had visited it previously. He knew Robertson to be the butcher in town and there was no evidence that anyone else worked on "Roundoak" with the cattle. There could have been no expectation by Mr Campbell that the care which Robertson would give the cattle would have approached that of a well run large commercial cattle property. However, the express terms found by Kneipp J. suggested the implied term (c) of care and Robertson's self interest in maintaining the herd because he was to receive one-half of the value of the herd at the end of the 10 year period and one-half of any sales along the way would ensure a competent grazier. In the absence of any more express intimation by Mr Campbell to Mr Robertson of what was required by way of care for the cattle, I conclude that the term to be implied was that care would be taken of the cattle of such a standard that they were provided with adequate feed for the seasons and capacity of Robertson, water and sufficient boundary fencing to stop straying, Codelfa Construction Pty. Limited v. State Rail Authority of N.S.W., (1982) 149 C.L.R. 337. Mr Campbell agreed that there was no reference to replacement bulls in the herd to maintain the appropriate reproduction rate -- 29 of 40 -- 27 of the herd. By the end of 1982, it was conceded that it would have been necessary to think about replacement bulls in order to maintain the quality of the herd. Campbell relied upon Robertson's own self interest to buy bulls for the herd and, as the expert evidence reveals, it is a proper husbanding activity. I conclude that there should be implied in the agreement to husband the provision of replacement bulls. The damages would have been assessed at the date of the notional trial which would have been in November 1981. Measure of Damages The damages awarded at the notional trial would have been the amount which would have put the plaintiff in the position that it would have been in had the contract been performed. The contract contended for by Mr Campbell in the trial before Kneipp J, was that he was entitled only to half the value of the herd together with the proceeds of sales from time to time. However, that must seen in light of the agreement as found by Kneipp J that it was for a period of 10 years, at the end of which time a valuable herd would have been built up. The half value to Robertson of the herd would be payment to him for agistment and the care which had been given to the herd plus, it was no doubt expected, a comfortable profit. I adcept the argument of the plaintiffs that Robertson could not have immediately earned a right to one-half of the herd after promising to perform a 10 year contract and then almost immediately breaching that agreement. An accepted approach for identifying the measure of damage is the cost of purchasing substituted performance of the -- 30 of 40 -- 28 contract. In this case that ~ould mean the sum of money which would have entitled the plaintiff to buy a replacement herd and purchase substitute performance. The plaintiffs, to the knowledge of the defendants, were not able to afford substitute performance of the contract, Burns v. M.A.N. (Automotive) Pty Ltd (1986) 161 C.L.R. 653. In that circumstance the plaintiffs contend that they should recover the value of the herd, annual profits and expectation losses as calculated by Mr Norbert Calabro, an accountant, based upon the expert evidence of Mr Allan as to herd numbers and, Mr Erbacher as to the prices of the cattle. Size of Herd In the notional trial evidence would have been~led as to the number and composition of the herd which should have been on "Roundoak" as at November 1981, on the assumption that Mr Robertson had performed the contract as -found. In order to establish this, the starting number of the herd which was delivered to Mr Robertson needed to be ascertained. It was the plaintiff's case at the 1981 trial that there were 126 head of cattle which Mr Campbell had counted on the trucks at night less the two escaped cows and two deaths. He now says that he was mistaken because Mr Robertson' s evidence at the trial before Kneipp J was that there were 23 calves together with the Tuberculin Report (calves were not required to be tested) of 114 beasts and meant that there were 137 head of cattle. If the notional trial had been conducted competently with damages in mind, once Mr Robertson had given his evidence as to the number of calves, the plaintiff, properly advised, would have sought to \~ I - -- 31 of 40 -- 29 amend to 137 as the start up size of the herd. Leave would almost certainly have been granted. The plaintiff would have called an expert familiar with herd growth in the area armed with that figure. Mr Lindsay Allan has given that evidence in this trial on behalf of the plaintiff. Mr Dodt's evidence at the trial before Kneipp J was based on insufficient information. Mr Allan's evidence was criticised by the defendants as presuming that he was dealing with a large, well run commercial property. The defendants' expert was Mr Thomas Moir. Mr Moir assumed a run down property, poor management and overstocking. Mr Allan visited the property and knew what kind of an enterprise was under consideration and that criticism is not well founded. He had extensive knowledge of the district and a very wide general experience. He did not fail to take account of seasonal vagaries particularly the 1980 drought as was suggested by the defendants. I found him a persuasive witness and I accept his evidence over that of Mr Moir in this regard. Mr Allan's further analysis is set out in ex. 28 which I accept. Mr Allan has assumed the replacement of bulls during 1980 and annually thereafter. I find that the herd projection as estimated by Mr Allan is consistent with the terms of the agreement as would have been found by the notional court. That projection gives a herd of 875 cattle as at 30 November 1987 (the end of the ten year period) which I accept. Mr Allan did not consider himself qualified to fix a price or value to the cattle. That has been done on behalf of the plaintiff by Mr J Erbacher of Primae Australia. He has had experience since 1959 in the livestock selling business -- 32 of 40 -- I 30 throughout Queensland. Mr Moir, now retired, has had a life time of experience in the cattle industry. The real point of departure between Mr Erbacher and Mr Moir was the weight of cattle turned off from "Roundoak" during the relevant period. The assumption made by Mr Erbacher was a turn off weight of 550 kilograms whilst Mr Moir assumed 400 to 450 kilograms. Mr Allan was disposed to agree with Mr Moir' s turn off weights. The appropriate market to apply for prices was uncertain, Mr Moir indicating that the selling price at Cloncurry was appropriate while Mr Erbacher considered the purchase price in Brisbane and Toowoomba when reaching his values. There were uncertainties in the evidence of both experts as was to be expected with assumptions of the kind which had to be made here. In the end I accept the figures of Mr Moir as to value at 425 kgms and these should be applied to Mr Alien's projected herd figures, which I accept. These are complex figures and I will ask the plaintiff to have them recalculated. Consequential Losses It was the plaintiff's case that had Mr Campbell any spare money that he would have invested it. That proposition is rejected by the defendants. The plaintiff's case is based upon the reasoning in Hungerfords v. Walker (1989) 171 C.L.R. 125. It was suggested that if those moneys were obtained then Mr Campbell would have used it to retire debt or to invest. Mr Calabro has calculated the compound interest that would have been earned by sums of money had they been obtained. One of the difficulties about this aspect of the plaintiff's claim is that it assumes that Mr Campbell was a cautious investor when the -- 33 of 40 -- 31 evidence suggests otherwise. He had, of course, been in ill health over a number of years and was compelled to use the moneys which he had obtained from his settlement with National Mutual and from the lottery win in living expenses. He was apparently generous to his relations and indulged his family in an expensive holiday and in a good standard of living. As the defendants submitted, this in no way is to criticise Mr Campbell but merely to draw attention to the fact that he was not a cautious investor. He used a large part of the moneys which he acquired for the purchase of horses and their up-keep and for the improvement of the family home. He had invested money only twice in interest bearing deposits over short periods. One was an investment of about six months of $80,000 and the second was for a period of three or six months for $50,000. Mr Calabro's calculations have been performed on the basis that the plaintiff, having received $109,066 by way of judgment in the notional trial, would have invested this safely for 10 years re-investing the interest earned so that by May 1992 the plaintiffs would have been in receipt of $394,026. The evidence does not support this approach. Although I found Mr Campbell a witness who was straightforward and- truthful, I thought him somewhat obsessional about certain ideas, which is consistent with the evidence of Dr Jenkins, psychiatrist, and I would expect that the money would have been used on ventures that interested him. The alternative consequential loss advanced by the plaintiffs was that the opportunity was lost to invest those moneys in the F.G.C. Breeding programme and this led to the loss of loan funds -- 34 of 40 -- 32 of $217,847. Mr Campbell said in evidence that $30,000 would have been sufficient to save F.G.C. Breeding. However, there seems to be no doubt that greater sums would have been required. The figures which Mr Campbell was advancing himself to the National Australia Bank when seeking a loan for the purchase of "Nyletta Downs" was between $40,000 and $60,000 as coming from the Robertson action. The provision of $30,000 from the action would not have paid out the short term finance that had been advanced by the bank and the vendor for the purchase of "Nyletta Downs". It certainly would not have made the breeding programme profitable. It appears therefore that the failure to recover damages in the trial before Kneipp J, in my view, was not causative of that loss. The second category of consequential loss identified by the plaintiffs flowing from the breach of the duty to claim damages, namely, that the horses would have been sold and the residential property be retained depended upon information being received by Mr Campbell at the end of 1981 that the receipt of damages was unlikely or that it would be delayed. Mr Campbell said that he and his wife would have retained their residential property at - -·- Carina; they would have sold the mares and shares in the breeding stallion; they would not have purchased "Nyletta Downs" and no further moneys would have been advanced to the trust by the plaintiffs after the end of 1981. This depends upon Mr Hyland having sufficient information at the time when the breach occurred or at any time up to the end of 1981 that Mr Campbell was relying upon a certain award of damages of at least $30,000 from Robertson to be received in the immediate future otherwise -- 35 of 40 -- 33 the horse breeding programme would have been abandoned. That is in my view, too remote a consequence of the breach of failing to seek damages. Interest I conclude from the above that the appropriate award of interest on the damages which would have been awarded by the notional court reduced to reflect the difficulty of collecting them should be at 12 percent per annum over the whole period. There has been identified no prejudice to the defendants occasioned by the delay in this matter coming to judgment. Quantum - Failure to Warn I have concluded that the first and second defendants breached their duty to Mr Campbell when Mr Hyland failed to warn of the very significant difficulties which lay in the path of recovery. The failure to warn must be seen, as I have said, in the context of the serious incompetence over the Robertson action. I have had some difficulty over the question whether, if warned, Mr Campbell would have heeded that advice and recognised that funding from Robertson was to be discounted in his plan. He was a determined man, but I find that he would have recognised the folly of proceeding had he received the warning fully and frankly as was Mr Hyland's obligation once having-got Mr Campbell into this situation over the Robertson action. I accept the defendants' submissions that had Mr Campbell got a damages award from Mr Robertson of say about $50,000 or so from a properly run trial, the breeding program based on a rural -- 36 of 40 -- 34 property would have been likely to fail in any event. The success of horse breeding, the evidence revealed, involves both luck and experience and Mr Campbell had no great experience in this area and not, it seems, a great deal of luck. A lifetime associated with horses in the country and reading books would not seem, on the evidence, sufficient to establish oneself with the experience and necessary expertise. Mr Campbell does not seem to have had a great deal of luck in his choice of stallions and his mares did not foal early on. Mr Garth Hughes, an auctioneer of stock and horses, made some projections about the sires and mares selected by Mr Campbell. His approach seemed to be flawed in as much as he took a much higher profile for the progeny of the mares and took prices which were paid for exceptional yearlings sold at important sales. The best horse owned by Mr Campbell was Akbar Tabita and the evidence shows that the sale of progeny from that horse was about $11,000 over ten years. I do accept however Mr Hughes's valuation of the band of mares and shares in the stallion as at 31 December 1981 at $37,500. Mr Calabro's evidence was that even with the kind of income which on Mr Hughes's projection would be received the breeding trust might well not have been viable. I conclude that it needed a relatively high income of the kind projected by Mr Hughes even to be viable and I find that it was unlikely to have received such an income. That is not in my view the test, however. What Mr Campbell lost as a result of the failure by Mr Hyland to warn him was the opportunity to sell up his interest in his horses, retain his home and seek some remunerative occupation as an insurance agent -- 37 of 40 -- 35 which he indicated was something that he was contemplating returning to. His wife was working during these periods. Mr Calabro has dealt with this possibility in Scenario B (exhibit 30 p.13 et seq) and I accept the calculations set out there with an amendment in para. 6.52 of $30,670. The total losses estimated to 31 May 1992 as a consequence of the failure to warn is $428,807 and that is an accountancy exercise which~--- , ll.AI- t;~ ~ ...... ~ ~ 6 ~ #) J~..-.-.....;. have accepted. In my view that ought to be discounted for the " contingency that Mr Campbell may well have engaged in other enterprises in that time which would hav~ been productive of loss . ~~ 0 _;~--.r and accordingly I would assess that loss at $350,000. "\ Personal Injury Claim The defendants submit that there can be no recovery for psychological suffering arising out of the negligent conduct of barristers or solicitors in a commercial context. In Heywood v. Wellers (1976) 1 Q.B. 446 the very retainer was to seek an order from the court which would give the client peace of mind and in that circumstance damages for psychological stress were allowed. In Hayes v. James and Charles Dodd (a firm) [199012 All E.R. 815 the Court of Appeal held that damages for anguish and vexation arising out of the client lawyer relationship were not recoverable unless the object of the relationship was to provide peace of mind or freedom from distress and were not recoverable out of the breach of a purely commercial contract (the observations of the court extend to tort). The court did express some concern in that case that the matter had not been fully argued by counsel but were not disposed to embark upon a new area of law in the absence of full argument. I conclude that the -- 38 of 40 -- 36 plaintiffs may not recover such a head of damage. If I am incorrect in that matter then it seems to me that the_ appropriate award for Mr Campbell relying upon the evidence of Dr Jenkins that he requires a mild sedative to aid his sleep, the amount of $5,000 is appropriate. Although Mrs Campbell has been much distressed by the long saga of this litigation and its effect upon her family there was no evidence that her health physical or psychological had been impaired in any way as a consequence of the breaches. There is no basis for any finding in her favour. Contribution Claim against the Third Defendant I have concluded that the third defendant failed in his duty to Mr Campbell when he did not draft a claim for damages. Mr Walters expressly did not seek to submit that there was any immunity from suit in favour of the third defendant. The third defendant ignored concerns raised by Mr Hyland in his memorandum of 7 June 1981 with respect of the question of damages. I can see no basis foi holding one more responsible for the damage than the other and accordingly I find that they are equally liable. Costs of Robertson Trial The costs paid away by Mr Campbell to Mr Hyland should be recovered. They are in the amount of $9,579.24 and are allowed. Conclusion In conclusion I find that the first, second and third defendants are liable to the plaintiffs in negligence for breach -- 39 of 40 -- 37 of the duty of care which was owed by them in relation to the failure to seek damages in the Robertson action. The quantum of those damages as I have set out in my reasons are to be calculated on the basis of the facts which I have found, but will need to come back to me for final decision. I find that the first and second defendants were negligent in failing to warn the plaintiffs that damages would be unlikely to be recovered from Robertson and that those damages should not be relied upon to finance any further ventures. The quantum of those damages is $350,000. I will hear submissions as to costs. -- 40 of 40 --