Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

McMurdo JA went on to say that where a commercial opportunity had no chance of being profitable, it would be an opportunity of no value, and its loss would not be compensable. Their Honours held that the trial judge’s findings about the chances of Principal Properties overcoming the four contingencies showed that there was a ‘more than a negligible chance’ that Principal Properties would have made a profit from the development. On that basis, the Court of Appeal held that Principal Properties could demonstrate on the balance of probabilities that the Brisbane Broncos Leagues Club’s breach of contract had caused it some, not negligible, loss. The appeal was consequently allowed. The Broncos Leagues Club was ordered to pay Principal Properties $250,000 in damages together with interest of $62,307.37. The plurality in Strong v Woolworths Ltd noted that once factual causation is established the scope of liability consideration will ordinarily present little difficulty. This is because it would not usually be in contention that it is appropriate for a defendant’s liability to extend to the harm a plaintiff suffered. 114 It is only where a risk of harm materialises beyond a defendant’s duty to warn or advise that the scope of the liability limb of the statutory causation test will not be satisfied. A useful example, often repeated, is that of a mountaineer whose doctor negligently advises him that his knee is fit for the climb. He makes the climb, which he would not done if he had received proper advice about his knee, and then is injured in an avalanche. 115 The factual causation test would be satisfied in this scenario, given that the mountaineer would not have made the climb but for the negligent advice. However, the scope of the liability test would not be, as the risk of harm from an avalanche would be beyond a doctor’s duty to exercise reasonable care and skill. Statute Professionals are likely to be subjected to various statutory obligations in providing advice or services to clients (and third parties). The two most common are those prohibiting misleading or deceptive conduct and false and misleading representations. These two obligations are by no means mutually exclusive and will often be advanced as alternative causes of action for the same conduct (and perhaps in addition to claims in contract and tort). In fact, this is probably now a prudent course for any plaintiff in light of the High Court’s reasoning in Selig v Wealthsure Pty Ltd . 116 The ruling permits a plaintiff to recover 100% of a loss where both apportionable and non-apportionable claims 117 are established arising from the same loss, notwithstanding it was contributed to by the wrongful conduct of others. Misleading or deceptive conduct Section 18 of the ACL 118 prohibits misleading or deceptive conduct. The section takes its format from its predecessor, section 52 of the TPA, and provides that ‘a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive’. Comparable provisions are found in section 12DA of the ASIC Act (in relation to financial services) and section 1041H of the Corporations Act 2001 (Cth) (in relation to financial products and services). Scope of duty has been addressed above.

There is an intentional overlap in the various provisions, and authorities arising from section 52 of the TPA are still relevant today in the context of the current legislation.

114 Strong v Woolworths Ltd (2012) 246 CLR 182, 190. 115 Wallace v Kam (2013) 250 CLR 375, 385. 116 (2015) 255 CLR 661. 117 For a full discussion of proportionate liability and apportionable claims, see chapter 3. 118 For the application of the ACL, ASIC Act and TPA, see under the heading Implied terms above.

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