Professional Liability Guide

CHAPTER 4 – QUANTUM

In circumstances where the plaintiff could not prove that it was worse off for having relied on the misrepresentation, the Court was not willing to infer that it had suffered prejudice or disadvantage despite being misled. 328

Which assessment is appropriate? When determining which method of assessment is appropriate, it is necessary to consider what the plaintiff alleges would have happened in the absence of the relevant act or omission. If the plaintiff alleges they would not have altered their position at all but for the impugned conduct, or at the very least, not have entered into the subject transaction, a no-transaction assessment is appropriate. If, however, the plaintiff alleges they would have entered into some other transaction (whether the same transaction on different terms or a wholly separate transaction), an alternative transaction assessment is required. 329 Although it is somewhat incongruous for a plaintiff to say they would not have entered into a trans action and, in the alternative, entered into a different transaction had they known of the impugned conduct, no-transaction and alternative-transaction damages are sometimes pleaded as alternatives. In practice, determining loss suffered in a no-transaction case, if made out, is often easier than in an alternative-transaction case. In BHP Billiton (Olympic Dam) Corporation Pty Ltd v Steuler Industriewerke GmbH (No 2) , 330 Habersberger J noted: ‘In a no transaction case, the comparison is rather easier for the plaintiff to establish because the alternative course of action is simply that the plaintiff would not have entered into the transaction at all, but for the representation. However, in the alternative transaction case, the plaintiff will need to have evidence of what it could and would have done had the contravention not occurred, in order to prove that it has suffered loss in consequence of the contravention.’ 331 Alternative-transaction cases offer the plaintiff the chance to seek damages for the alternative, and possibly more profitable, transaction. However, the chance of higher damages is not without risk to a plaintiff because the evidence may reveal the plaintiff’s position under the alternative transaction to be the same as (or possibly even worse off than) their actual position (as was the case in BHP ). In Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd , 332 the plaintiff alleged it was induced by a misrepresentation to purchase a machine for more than its market value. The plaintiff claimed damages for the difference between the purchase price and the actual value of the machine (which would have been available on both the no-transaction and alternative transaction basis) and for the loss of profit they would have earned had they purchased an alternative machine (only available on the alternative-transaction basis). Despite the misrepresentation, the plaintiff failed to establish a difference between the purchase price and the value. They were, however, successful in establishing that, had they purchased the other machine (i.e. entered the alternative transaction), they would have made a greater profit. Damages were, therefore, only awarded for the loss of profit. 333 328 Ibid [611]. 329 See Westpac Banking Corporation v Jamieson & Ors [2016] 1 Qd R 495; Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 at [731]. 330 [2011] VSC 659; affirmed on appeal in Protec Pacific Pty Ltd v Steuler Services GmbH & Co KH [2014] VSCA 338.

331 [2011] VSC 659 [34]. 332 [2014] NSWCA 158.

333 Lovick and Son Developments Pty Ltd and Anor v Doppstadt Australia Pty Ltd and Anor (No 2) [2012] NSWSC 1579 [44]. The damages amount was reduced slightly on appeal. See Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158.

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