Professional Liability Guide

CHAPTER 1 – DUTIES

The High Court has most recently said, in Badenach v Calvert, 109 that in a lost opportunity case, the onus of proving causation of loss is not discharged by finding there was a more-than negligible chance that the outcome would have been favourable or even by finding a substantial chance of such an outcome. In such a case, the onus is only discharged where a plaintiff can prove that it was more probable than not that they would have received a valuable opportunity.

In respect of the second limb of the legislative causation test (legal causation), it was said in Wallace v Kam :

‘Satisfaction of legal causation [scope of liability] requires an affirmative answer to the further, normative question … is it appropriate for the scope of the negligent medical practitioner’s liability to extend to the physical injury in fact sustained by the patient?’ 110 Establishing causation in a lost opportunity case by demonstrating that there was a more than-negligible chance that the outcome would have been favourable was considered by the Queensland Court of Appeal in Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd. 111 In that case, the Court of Appeal considered whether a plaintiff could recover damages for the loss of a commercial opportunity that was more likely to make a loss than a profit. The Brisbane Broncos Leagues Club (respondent) agreed to grant Principal Properties (appellant) an option to purchase land. The option was for purchase within three years at $1 million and was contingent on Principal Properties obtaining a development permit for the planned construction of apartments. The trial judge found that the Brisbane Broncos Leagues Club failed to perform its obligations by failing to give consent to the proposed development application. As a result, Principal Properties was entitled to terminate the Call Option Deed. This finding was not challenged on appeal. The appellant’s claim was for damages for loss of contract. The appellant claimed to have suffered a compensable loss from being deprived of the valuable commercial opportunity to acquire land, develop it and sell the apartments. Principal Properties relied on a feasibility report that estimated the proposed development would result in a net profit of $5,379,402. The trial judge identified four contingencies that Principal Properties would have had to overcome for the development to be successful. The judge also disagreed with the valuation that the expert had given the apartments. After allowing for these adjustments, the trial judge held that it was more probable than not that the appellant would have lost money from the development and, therefore, the opportunity was valueless. Consequently, there was no compensable loss of opportunity and only nominal damages could be awarded. The Court of Appeal disagreed. It instead reaffirmed the High Court decision of Sellars v Adelaide Petroleum NL 112 when stating that an opportunity was not valueless as a matter of law because it was more probable than not that it would result in a loss. McMurdo JA stated: ‘[m]any investments are pursued with an appreciation that, more likely than not, they will not be profitable after money is spent in pursuing them. They are pursued because the magnitude of the potential profit, considered against the relatively small amount of the potential loss, makes the risk, sometimes a high risk, of that loss one which is worth taking.’ 113

109 (2016) 257 CLR 440 per French CJ, Kiefel and Keane JJ, 56–57. 110 Wallace v Kam (2013) 250 CLR 375, 385.

111 [2018] 2 Qd R 584. 112 (1994) 179 CLR 332. 113 Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2018] 2 Qd R 584 [24].

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