Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

The Court also suggested that that approach is equally applicable to an alternative transaction that made a profit, describing the approach of including the gains or losses that occur after the transaction as the ‘net gains or losses approach’. In Jamieson , the Court was satisfied that the bank ‘ demonstrated with a reasonable degree of persuasion ’ that the plaintiff would have sought an alternative investment of a similar character to past investments he had made and that the alternative investment would have made a loss. 317 That loss was factored into the assessment of damages. More recently, however, that approach has been considered ‘ plainly wrong ’. In Wyzenbeek v Australasian Marine Imports Pty Ltd (in liq) , 318 the Full Court of the Federal Court considered that Applegarth J’s approach in Jamieson failed to examine what the wrongdoer did that caused the plaintiff to suffer damage. The Full Court considered it embarked on an irrelevant inquiry into the question posed by section 82 of the TPA – namely, whether the plaintiff proved that they suffered loss or damage by the wrongdoer’s contravention of section 52 of the TPA. On that basis, Wyzenbeek reinforced the approach of the High Court in Sellars v Adelaide Petroleum NL 319 in finding it is sufficient for the plaintiff to prove that the wrongdoer’s conduct is a cause of the loss claimed. 320 Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG 321 provides another example of the perils of asserting alternative-transaction damages. The plaintiff, BHP, commenced an action to recover damages from having been induced by misrepresentation to install a defective liner in concrete storage tanks at one of its mines. At trial, 322 the plaintiff was unsuccessful because, despite the trial judge finding that the defendants had engaged in misleading and deceptive conduct, they were in no worse a position than had that conduct not occurred because a supervening event (a fire) resulted in the plaintiff having to replace the liner in any event. 323 As regards damages, the trial judge observed that the plaintiff had not proved it had suffered any loss because it could not prove what possible alternative transaction it would have entered into had it not been misled. 324 The plaintiff was unsuccessful on appeal, not because it could not prove precisely what it would have done but for the defendant’s misleading and deceptive conduct, but because it could not prove that it would have been worse off from having relied on the representation. 325 In reaching that conclusion, the Court was of the view that past authorities required it to enquire as to whether the alternative option open to the plaintiff would have been of greater benefit or less detriment. 326 While the Victorian Court of Appeal agreed with the trial judge that the plaintiff failed to prove its loss, it disagreed with his Honour’s reasoning. In the view of the appellate judges, when presented with alternative transactions, it was up to the trial judge to exclude any unlikely alternatives by estimating the likelihood that each hypothetical past situation would have occurred. If the trial judge had done so, the Court of Appeal considered that he would have been in a position to consider what loss the plaintiff would have suffered had it engaged in the only alternative transaction reasonably open to it as compared with the actual transaction. 327 317 Ibid 548. 318 (2019) 272 FCR 373. 319 (1994) 179 CLR 332. 320 (2019) 272 FCR 373 [94]. 321 [2014] VSCA 338. 322 BHP Billiton (Olympic Dam) Corporation Pty Ltd v Steuler Industriewerke GmbH (No 2) [2011] VSC 659. 323 Ibid [49]–[50]. 324 Ibid [37]. 325 Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 [611].

326 Ibid [606]. 327 Ibid [603].

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