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Island Link Pty Ltd v Thynne & Macartney[2004] QSC 460

Island Link Pty Ltd v Thynne & Macartney[2004] QSC 460

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Island Link Pty Ltd v Thynne & Macartney [2004] QSC 460

PARTIES:

ISLAND LINK PTY LTD

(plaintiff)

v

THYNNE & MACARTNEY (A PARTNERSHIP)

(defendant) 

FILE NO:

S9122 of 2001

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

24 December 2004

DELIVERED AT:

Brisbane

HEARING DATE:

12, 13, 14, 15, 16, 19, 20, 21 & 22 July 2004

JUDGE:

Douglas J

ORDER:

Action dismissed.  Judgment for the defendant with costs including reserved costs if any.

CATCHWORDS:

TORTS – Negligence – Essentials of Action for Negligence – Where Economic or Financial Loss – Careless Acts or Omissions – Solicitor – Whether a failure to provide advice regarding remedies under the Judicial Review Act 1991 Qld) amounted to negligence

Judicial Review Act 1991 (Qld), ss 20(2)(h), 23, 24 & 30(1)

Abebe v Commonwealth (1999) 197 CLR 510, referred to

Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64, referred to

Dickson v Creevey [2002] QCA 195 at [12]-[13], applied

Gore v Montague Mining Pty Ltd [2001] ANZ ConvR 8, [2000] FCA 1214, applied

Hawkins v Clayton (1988) 164 CLR 539, referred to

Heydon v NRMA Limited (2000) 51 NSWLR 1, referred to

K. C. Park-Safe (Brisbane) Pty Ltd v Cairns City Council [1997] 1 Qd R 497, referred to

Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384, referred to

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, applied

 Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323, referred to

Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, applied

State of Queensland v Litz [1993] 1 Qd R 343, considered

Sykes v Midland Bank Executor & Trustee Co. Ltd [1971] 1 QB 113, applied

 

COUNSEL:

C E K Hampson QC with him N J Thompson for the plaintiff

D J S Jackson QC with him R P S Jackson for the defendant

 

SOLICITORS:

Butts & Barkley for the plaintiff
Brian Bartley & Associates for the defendant

  1. DOUGLAS J:  Until 9 July 1997 Island Link Pty Ltd conducted a passenger ferry service between Victoria Point and Coochiemudlo Island in Moreton Bay.  On that day the Redland Shire Council decided that it would not renew Island Link’s permit to operate a timetabled passenger ferry service from its jetties and landing places at Victoria Point and Coochiemudlo Island.  In this action Island Link is suing Thynne & Macartney, a firm of solicitors, in negligence and for breach of their retainer for their failure to advise it of its rights to seek judicial review of the Council’s decision.  As will become clear it is my view that the action cannot succeed. 
  1. Island Link had a permit from the Council to operate two passenger ferries named “Doug Morton” and “Matthew Flinders II” for the period from 1 July 1996 to 30 June 1997 and had applied for a further permit for the next financial year. A competitor, Coochiemudlo Island Ferry Service (“CIFS”), had also applied for a permit to operate that service for the period from 1 July 1997 to 30 June 1998 and was granted it on 9 July 1997. That result had seemed inevitable to Mr Poulton, a director of Island Link, since the Council’s engineering services committee had decided on 2 July 1997 that the permit to operate granted to Island Link should exclude its passenger ferry service “on the basis that the application by Coochiemudlo Island Ferry Service offered these services at a reduction in fares of approximately 30% and [because of] the support from Coochiemudlo Island residents for the services proposed by Coochiemudlo Island Ferry Service”.
  1. By a letter of 4 July 1997, therefore, Mr Poulton on behalf of Island Link had applied for a permit to operate a charter service to use both the Victoria Point and Coochiemudlo Island jetties, not for a timetabled ferry service as it then provided, but one designed to offer charter trips to various venues around the Bay to keep the company staff and vessels employed. He had also been seeking informal legal advice from a friend, Mr Harvey Greenfield, who was admitted as a barrister but did not practise. Mr Greenfield suggested that he consult Mr Frank Turner at Thynne & Macartney. Mr Turner had about 25 years experience in litigation, particularly in maritime law but that experience did not extend into the field of administrative law.
  1. Mr Poulton and Mrs Pendergast from Island Link had a preliminary conference with Mr Turner on 7 July 1997. Mr Greenfield had already forwarded some documents to Mr Turner and Mr Poulton supplemented them at the conference with more files relevant to his dispute with the Council. Mr Turner’s note at the conference suggest that it lasted for about one and a half hours. His notes of the meeting covered eight handwritten pages which include one passage of great significance to this action. In recording the instructions or information he received from Mr Poulton he said:-

“Does not want to resume operation because goodwill has been destroyed – wants to sue RSC.”

  1. The context in which that statement was made will become apparent later. The word “not” was underlined by Mr Turner at the time because Mr Poulton had emphasised that point and Mr Turner regarded it as of great significance; T528/34-36. After the conference Mr Turner compiled a draft statement which he sent to Mr Poulton with a letter dated 25 July 1997. The letter said

“We enclose a draft statement by you.  The statement contains some blanks which it will be necessary for you to complete.  The purpose of the statement is for the use of your legal advisers only and the document should be as detailed and complete as possible.

Would you please peruse the statement carefully and make any alternations (sic) or additions you consider necessary.  When satisfied with the document, please date and sign it where indicated on the last page and initial each preceding page.

When you have completed and signed the statement, would you please return it to us, together with the trust account authority which was enclosed with our shorter letter of 8 July and a cheque for $2,000.00 on account of costs and outlays.

We understand that you require advice on the following:

  1. Is it necessary that you have a permit from the Redland Shire Council to use the jetties at Victoria Point and Coochiemudlo Island, or are you able to use them for the purpose of running a commercial passenger ferry service, without a permit;
  1. Does Island Link Pty. Ltd./Victoria Point Water Bus Co. have a cause of action against the Redland Shire Council for the failure of the council to grant the company a Permit to Operate a passenger ferry service between Victoria Point and Coochiemudlo Island for the year commencing 1 July, 1997.
  1. What other remedies does the company have?

Because exercising any remedy you might have against the Redland Shire Council will almost certainly involve the institution of legal proceedings, we consider it would be appropriate to brief Counsel to advise, either by written advice or in conference with you and ourselves If you are agreeable to this course of action, it will be necessary for us to prepare a brief for counsel and to undertake preliminary research.  We propose briefing an experienced member of the middle bar for this purpose.  May we have your instructions as to whether it will be in order to brief counsel.”

  1. Mr Turner was not then contemplating the possibility of proceedings under the Judicial Review Act 1991.  Surprisingly, he was not familiar with litigation under that Act and was not aware that the normal time limit for challenging a decision was only 28 days.  By the time he sent the letter 16 days had passed since the Council’s decision of 9 July 1997. 
  1. Curiously, however, nobody from Island Link ever contacted him, or his firm, again. This was in spite of his sending a reminder letter to Mr Poulton dated 23 September 1997, a further letter of 12 November 1997 submitting a memorandum of costs and outlays and further requests by telephone for payment.
  1. Eventually a response did come, not from Island Link, but from its new solicitors. That letter was dated 21 July 1999 and asserted that Mr Turner had advised Mr Poulton and Mrs Pendergast that Island Link had “little or no rights and if it did have any rights it had little or no prospects of success”. It also asserted that no advice was provided by Mr Turner about the rights and remedies provided by the Judicial Review Act and that no mention was made by Mr Turner of any time limits prescribed by that Act or of the power to extend those time limits.  The failure of Island Link to respond to the draft statement and letter from Mr Turner sent on 25 July 1997 was explained on the basis that Mr Poulton and Mrs Pendergast had been advised by Mr Turner that Island Link had no cause of action available to it, there was no urgency expressed in the letter, no potential cause of action was identified “and the letter implies that preliminary research had not even commenced”. 
  1. It appears from the letter that Island Link’s contention was that, had it been advised by Mr Turner to apply for a statutory order of review under the Judicial Review Act, it would have succeeded in retaining its permit to operate the fast ferry passenger service between Victoria Point and Coochiemudlo Island.  The letter also asserts that Island Link did not do anything in relation to the loss of its permit to operate until late 1998.  By that time it had retained its new solicitors, Rowell Gill & Brown, and was, no doubt, advised by them that they were too late to commence proceedings for a statutory review order.  As a consequence, the new solicitors asserted that Thynne & Macartney were liable in damages to Island Link for professional negligence. 

The issues

  1. It is necessary to examine the history of Island Link’s business before embarking on an analysis of the legal effect, if any, of the consultation with Mr Turner. In examining the legal issues it will be necessary to concentrate on the nature of instructions given to Mr Turner, what obligation to advise was undertaken by him, what were the prospects of success, if any, of an application to review the Council’s decision, whether the plaintiff has established on the balance of probabilities that it would have taken proceedings if properly advised, whether the value of the business lost to Island Link has been satisfactorily proved and what was the value of the loss of any chance of success in such proceedings.
  1. As will become clear I am not satisfied that Mr Turner acted in breach of his retainer or negligently, nor that the plaintiff would have taken proceedings if properly advised about its rights under the Judicial Review Act by Mr Turner.  Nor am I satisfied that such proceedings, if brought, would have succeeded to the extent necessary to salvage Island Link’s business.  Nor am I satisfied that it was a business worth salvaging such that its loss should lead to any damages award against the defendant. 

History of the business

  1. Island Link’s ferry business between Coochiemudlo Island and Victoria Point began in 1986 when it commenced to operate a landing barge for vehicles between those two points. It was also entitled to use another jetty at Macleay Island. It did not commence to operate its fast passenger ferry service until after the Council sought expressions of interest for such a service by a notice published on 15 June 1993. The first permit issued pursuant to a Council resolution of 28 July 1993, was attached to a letter dated 30 July 1993 and was in force until 30 June 1994.
  1. Before the expressions of interest had been sought, Island Link had bought a smaller fast ferry, the “Doug Morton”, and, in June 1994, agreed to buy a larger vessel, the “Matthew Flinders II”. That purchase was a significant expense, more than $140,000.00. Because of the limited length of its permit to operate, one year, Island Link’s bank was initially reluctant to advance the money. It did so after the Council wrote the letter dated 30 July 1993 to Island Link addressing the issue of improved tenure for operators and saying that it “may result in a tender and contract arrangement for a period of, say, three to five years commencing in July 1994”. That prediction was optimistic and wrong. By July 1997 no such regime was in place. It was not until the year 2000 that contracts began to be issued by the Department of Transport for tenure for a five year term for operators of such services.
  1. It is clear, therefore, that the plaintiff knew, from mid 1993, that it had limited tenure for its permit to operate and that its position could only be made more secure by the introduction of contracts with the Department of Transport or, perhaps, by a change to the by-laws regulating the Council’s issuing of permits. The by-law that was effective only allowed a permit to remain in force “until the thirtieth day of June next ensuring [sic] the issue thereof”.
  1. The permit that issued by the letter dated 30 July 1993 was to a consortium of Island Link, using the name “Victoria Point Bus Co.”, and Coochiemudlo Island Water Taxi Service, operated by a Mr and Mrs Park. The consortium wished to receive permits to operate without the Council seeking expressions of interest from other parties, something which the Council told them was inappropriate. In the application it was pointed out that the purchase of new vessels would be delayed until the issue of the short period of time covered by the proposed permits was resolved. The consortium had been asked to submit a proposal based on their expressions of interest to provide a 24 hour service under a combined arrangement.
  1. The consortium did not continue beyond the introduction of the Matthew Flinders II into Island Link’s service. The plaintiff had been given a permit to operate for the period from 1 July 1996 to 30 June 1997 attached to a letter from the council dated 24 July 1996. From November 1996, another group called Moreton Bay 24 Hour Water Taxi Service was also permitted to provide a 24 hour water taxi service to all Council controlled jetties with the only exclusion being that they not pick up passengers within five minutes on either side of the plaintiff’s timetabled service. Another operator, Island Ferries Pty Ltd had also been given approval from November 1996 to operate a charter service between Coochiemudlo Island and Cleveland.
  1. In early 1997 a controversy began to develop about the plaintiff’s plans to raise its fares. They had been $1.00 each way between Cleveland and the island for adults and half that price for children. In other words a round trip was $2.00 for an adult. If 10 tickets were bought at the one time a discount applied so that the price was $18.00. The proposal was to increase the round trip fare to $2.50 for adults, $1.30 for children and $1.00 for bicycles. There had been no charge for bicycles previously. The discounted rate for ten one way tickets was to rise to $22.00 according to a notice dated 28 April 1997 the plaintiff gave to its customers but the proposal eventually was that it rise initially to $20.00 and later to $22.00 from 1 August 1997.
  1. The proposal was discussed with the Council in February 1997 and initially met with approval from the relevant Council employee, Mr Robertson. According to Mr Poulton, however, there was resistance from a Councillor Burns and anxiety on the part of him and the Mayor, Mr Santagiuliana, about the amount of the proposed increases. Councillor Burns was not called to give evidence by either party and Mr Santagiuliana is now dead. According to Mr Poulton, at a meeting on 30 April 1997, Councillor Burns wanted the rises to occur after the next Council elections which were then imminent and the mayor suggested that the ten ticket price be stepped up in the manner referred to above. Mr Poulton agreed to that but said that Councillor Burns nevertheless threatened, without explanation, to run him and his company out of the Shire. The next day Councillor Burns wrote him a letter urging him not to increase fares until the matter had been discussed at a full Council meeting and pointing out that his permit did not allow fare increases without the approval of the Chief Executive Officer.
  1. The Council received numerous letters in relation to the fare increase and ferry issue generally. Very many of the letters received by the Council were against the fare increase and supported the application from CIFS to operate its service to which I shall refer shortly.
  1. Upon the plaintiff announcing its price rise on 28 April 1997, there was a significant adverse reaction from Coochiemudlo Island residents. By letter dated 5 May 1997, the plaintiff wrote to the Mayor setting out its concerns. In particular, it addressed previous competition that the Council had allowed and the lack of any tenure. The plaintiff referred to assurances that it would receive some type of security of tenure either through changes to Council by-laws or through a Department of Transport service contract. That is the only sort of assurance to which reference was made. It is clear that the plaintiff recognised its precarious position as, in that letter, it referred to the fact that it had “no security of tenure”.
  1. On 10 May 1997, a meeting was held on Coochiemudlo Island by a group of concerned residents. It was attended by approximately 120 residents (40 or 50 families or 27% of eligible ratepayers) and also by Cr Burns and Mr Poulton. Three motions were unanimously carried. The motions were that the Council consider applications for the ferry service from persons other than the plaintiff, but not excluding the plaintiff, that proposals not be limited to a fast ferry service and that the issue of a permit be conditional upon price approval.
  1. On 12 May 1997, the plaintiff wrote to all Councillors referring to the furore caused by the fare increase, referring again to the lack of security of tenure as the justification for that increase, as well as to the other matters set out in the letter to the Mayor dated 5 May 1997. On 14 May 1997, the Council in general meeting, declined to receive the motions from the meeting of 10 May 1997. It did, however, accept the Engineering Services Committee’s recommendation not to endorse any agreement reached on 30 April between, among others, the Mayor and the plaintiff. It appears that Mr Poulton was given the opportunity to address that meeting about matters of concern to the plaintiff. From 20 May 1997, Moreton Bay 24 Hour Water Taxi Service (with the Council’s approval) reduced its fares to $2.00 per passenger, the equivalent of the plaintiff’s fare prior to 1 May 1997.
  1. On 28 May 1997, the Council in general meeting, rescinded its decision at the general meeting of 14 May 1997 not to receive and discuss the three motions passed by the residents of Coochiemudlo Island on 10 May 1997. The Council resolved to receive the motions not limiting proposals to a fast ferry service and in relation to approval of fares and that they be presented to the Engineering Services Committee for further discussion. It was also resolved that the Council would advertise for applications for permits for the year ending June 1998, that the fare increase of the plaintiff not be approved and that it be presented to the Council when a written application was provided by the plaintiff.
  1. During May and June of 1997, the issue in relation to the fares and the ferry service to Coochiemudlo Island can safely be said to have become controversial. Mr Poulton described it as a battle, as did the local newspaper. As Mr Jackson QC submitted, a large and vocal contingent from the Island lobbied the Council to open the route to competition in the hope that the resulting fares might be lower.
  1. On 3 June 1997 the Council advertised calling for applications for permits to operate. The plaintiff was aware of the advertisement. It knew from, at the latest early June 1997, that the Council was considering both fast and slow ferries for the service. Mr Poulton said it was obvious that the Council was considering slow ferries as well; T58/35-37. On 16 June 1997, the plaintiff applied for a permit to operate a timetabled passenger ferry service. The application included a reasoned argument by the plaintiff as to why a “slow” passenger ferry service should not be accepted.
  1. By a document dated 17 June 1997 CIFS applied to operate a timetabled passenger service between Victoria Point and the island using more traditional slower ferries supplemented by a faster water taxi service. CIFS was an amalgamation of two previous ferry operators in the Redland Shire including the Moreton Bay 24 Hour Water Taxi Service. The CIFS application had attached to it approximately 119 letters of support for its proposed service.
  1. On 2 July 1997, the Council’s Engineering Services Committee resolved to recommend that a permit to operate be granted to the plaintiff, excluding the timetabled passenger service, because the application by CIFS offered that service at a reduction in fares of approximately 30% and because of support from the Coochiemudlo Island residents for the services provided by CIFS.  That figure of 30% was not precisely accurate but CIFS’s proposed fares were cheaper. 
  1. As a consequence of the Engineering Services Committee resolution, the plaintiff applied for a permit to operate a charter service on 4 July 1997.  One might infer from that application that it had then accepted as inevitable that the Council itself would endorse the resolution of its Engineering Services Committee, as occurred on 9 July 1997. 

Profitability of the plaintiff’s business

  1. It is also significant that the plaintiff’s business was not profitable. At 30 June 1997, quite apart from anything to do with the failure of the plaintiff to obtain a permit to operate the timetabled passenger ferry service from July 1997, the plaintiff had incurred recurring and significant trading losses over the previous two years. These totalled over $440,083.00; ex. 107, p. 10. The sales for the passenger ferry service for the 1996-1997 year to the end of January were substantially less than for the 1995-1996 year. The pattern continued to the end of 1997, as the monthly sales for those months in ex. 91 show. The total for the sales of the passenger vessels was $460,463.52 for the 1995-1996 year whereas it was $436,556.85 for the 1996-1997 year.
  1. The only suggested bases for any projected increase in receipts from the passenger ferry service, either as at April 1997 when Mr Poulton prepared exs 88 and 89, or later, was the suggestion of additional income to be earned from charter services or additional services, growth in tourism or general population growth. As to the latter two, the sales from 1996 to 1997 decreased. As to charter services, in fact ex. 93 shows that from the cessation of regular timetabled passenger services on or about 9 July 1997, the Matthew Flinders II generated only three charter trips totalling less than $1,300.00. Neither that nor the evidence of Mr Poulton as to the attempts to conduct charter trips provides any basis for an assumption of increased income.
  1. The logical conclusion that flows from this evidence is that, when Mr Poulton went to see Mr Turner, he knew that he had lost the political battle to renew his company’s ferry licence, he knew that his commercial opposition had the apparent support of many more of the island population than the plaintiff and he knew that his business was running at a loss and its income was decreasing. It is in that context that one needs to analyse what he said to Mr Turner.

The nature of the instructions given to Mr Turner

  1. Mr Turner’s notes of the meeting start by dealing with Island Link’s history as a ferry operator including its negotiations with the Council about the possibility of increasing its fares. The instruction that Island Link did not want to resume operations because its goodwill had been destroyed appears about half way through the notes. Towards the end there is a note asking about the possibility of suing Councillor Burns directly and then a reference to Island Link’s application for a charter licence. The last note asks whether there is a requirement to have a permit to use the jetty and who owns the jetty, the Redland Shire Council or the Department of Transport.
  1. Mr Poulton also informed Mr Turner that he thought that, even if the plaintiff was able to operate a passenger ferry service to Coochiemudlo Island without a Council permit, the market was too small for two operators, which is why he had decided to apply for a permit to operate charter services. That appears from the draft statement that Mr Turner prepared; ex. 2 p. 326. That statement also recorded Mr Poulton’s belief that two of the councillors had indirect business connections, apparently with CIFS, but no evidence was led to establish such a link. It contains a further passage that was intended by Mr Turner to reflect the attitude that Island Link did not intend to resume operations; T539-541. It reads:

“Furthermore the ill feeling which has been aroused by the publicity surrounding the fare increase has caused Island Link such damage that I doubt we could profitably resume the service, even if we were the only operator.”

  1. It was suggested by Mr Thompson for Island Link that the use of the word “doubt” weakened the view that Island Link did not want to resume operations. Mr Turner disagreed with the view that there was an inconsistency between the two documents but said in any event that his handwritten diary note was a more accurate statement of what was said to him; T540/10-14. Mr Poulton also agreed that he had told Mr Turner that he did not want to resume operations because the plaintiff’s goodwill had been destroyed; T339/20-44 and T340/12-13.
  1. Mr Turner was not informed of many of the factual issues now relied on as establishing grounds for judicial review particularly in para. 38 of the statement of claim. For example he was not told anything about the use of gangways for passenger access to any vessels, the lack of wheelchair access for CIFS’s vessels, whether their vessels’ drafts were too deep for the jetty and likely to damage the seabed, whether a significant sum would need to be spent to modify the jetty for CIFS, whether the CIFS vessels’ journey time of 20 minutes could only be performed in good conditions or that they might roll badly in poorer conditions. Nor was he told of the plaintiff’s efforts to increase tourist visits to the island, of CIFS’s level of experience or of the effect on the level of the plaintiff’s staffing by the making of the decision. The plaintiff did not receive formal notice of the grounds for the Council’s decision not to grant a further permit to it but it was told that the level of fares and the type of service to be offered was to be considered. Mr Turner was not told of the lack of formal notice. If he had been more alert to the possibility of seeking judicial review of the decision not to renew the permit he may have pursued these issues but his instructions did not suggest that was the relief his client wanted.
  1. The allegation in para. 52 of the statement of claim that Mr Turner advised the plaintiff on 7 July 1997 that there was nothing that could be done about the Council’s decision to refuse to renew the permit to operate the fast ferry service and its decision to grant a permit to operate to CIFS was not established to my satisfaction. As Mr Jackson QC submitted, it is inconsistent with Mr Turner’s file note, the fact that he sought to be put in funds on 8 July 1997, Mr Poulton’s failure to make any complaint after receiving the client care letter dated 8 July 1997, Mr Turner drawing a draft statement of Mr Poulton and the suggestion of Mr Turner that because “any remedy” the plaintiff might have against Redland Shire Council would almost certainly involve litigation, that counsel be briefed to advise.
  1. Mr Turner admitted that he was pessimistic about Island Link’s prospects and may have said to them that he could not think of anything at that time because he was having difficulty framing a claim for damages either in contract or tort, at least in his own mind (T550/33-551/23) but I believe him when he said he did not give much advice at all, because he wanted more evidence and was very much at an exploratory stage then; T532/33-37.
  1. The explanation offered by Mr Poulton for not providing further instructions to Mr Turner was unsatisfactory. He said that the main reason was that at no point had it been accepted by Mr Turner that there was any urgency; T81/10-11. His new solicitors’ fuller explanation in their letter of 21 July 1999 that Mr Poulton and Mrs Pendergast had been advised by Mr Turner that Island Link had no cause of action available to it, there was no urgency expressed in the letter, no potential cause of action was identified “and the letter implies that preliminary research had not even commenced” does not take the matter much further.
  1. Neither Mr Turner’s contemporaneous notes nor his letter of 25 July 1997 record any advice. The letter is inconsistent with advice having been given. It is intended to be provided, possibly by counsel. If there was such urgency why did Mr Poulton not follow up Mr Turner vigorously and respond to the letter he sent? If dissatisfied with his attitude why not seek advice elsewhere? He had been consulting Mr Greenfield and referred to taking advice from him when he addressed the Council on 9 July in defence of his application; ex. 60 and T340/50-T341/11. His claimed urgent need for assistance is belied by his own behaviour in not responding to Mr Turner.  It is much more likely that the true explanation for his conduct was that he had convinced himself that there was no point in seeking to retrieve any right to operate the passenger ferry, that he should try to operate a charter service and not spend the money needed to pursue any legal remedy.

What obligation to advise was undertaken by Mr Turner?

  1. Mr Turner defined the task he had been asked to undertake in the questions he posed in his letter of 8 July 1997, namely:

“1.Is it necessary that you have a permit from the Redland Shire Council to use the jetties at Victoria Point and Coochiemudlo Island, or are you able to use them for the purpose of running a commercial passenger ferry service, without a permit;

  1. Does Island Link Pty. Ltd./Victoria Point Water Bus Co. have a cause of action against the Redland Shire Council for the failure of the council to grant the company a Permit to Operate a passenger ferry service between Victoria Point and Coochiemudlo Island for the year commencing 1 July, 1997.
  1. What other remedies does the company have?”
  1. The reference to a cause of action in question 2 probably suggests that a remedy in damages is being sought, but question 3 is comprehensive enough to require advice about the possibility of a remedy under the Judicial Review Act.  This also seems to follow from the form of question 1 which asks for an examination of the possibility of running a commercial passenger ferry service without a permit.   The instruction that Island Link did not want to resume operations does not sit easily with that first question.  It contemplates a continuing commercial passenger ferry service without the need for a permit.   It may have been meant to refer to the possibility of running a charter service without a permit but is not expressed in that language.  I am satisfied, however, that the instruction was given that Island Link did not want to resume a commercial passenger ferry service. 
  1. Mr Turner’s ignorance of the Judicial Review Act remedies encourages the conclusion that his failure to advise about their availability was negligent conduct in breach of his retainer.  Normally, in a situation like this, it would be part of his duty to his client to inquire about the facts relevant to possible judicial review of the decision to enable him to advise his client properly of the options he had.  He may have been in a position to pursue those issues further had the occasion arisen for him to provide further advice or to obtain counsel’s advice.  As I have already pointed out, however, his attempt to seek further instructions after sending Mr Poulton a draft statement received no response. 
  1. If he had known of these remedies, however, would one expect him to mention them in the context where he has been instructed in terms that preclude their utility? The only point of a remedy by judicial review would be the possible resumption of Island Link’s previous operations. His client had emphasised to him that it did not want to resume operations. Should the ramifications of that decision have been explored at least to alert the plaintiff to the possible existence of judicial review remedies? In my view such advice should have been canvassed at least to the extent of presenting the possibility of review under the Act as one of the options to explore. Such advice would not go beyond the limits of the instructions defined by the questions posed in Mr Turner’s letter. The questions in the letter written by Mr Turner suggest that such possibilities should have been explored. I would expect a reasonably competent practitioner to pursue such a line of inquiry in a case like this one; see the discussion in Hawkins v Clayton (1988) 164 CLR 539, 544 citing Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384, 402-403 and see also Heydon v NRMA Limited (2000) 51 NSWLR 1, 118-119 at [364]-[365] per McPherson A-JA.
  1. In that context it may be concluded that Mr Turner, at the only conference he had with Island Link’s representatives, did not pursue all the inquiries he should have pursued and was not as alert as he should have been to the legal remedies available under the Judicial Review Act.  But it was not the case that he chose to limit his advice.  He was starting a process that contemplated the taking of further instructions and the possible briefing of counsel to advise about what steps could be taken.  He had also been told that the plaintiff did not want to resume its ferry service but wished to operate as a charterer.  That limited the urgency of the case.  While I agree, therefore, that he did not make all the inquiries of Island Link’s representatives that he could have made at that time, his ability to pursue his obligation to advise the company was then frustrated by its refusal to provide him with further instructions.  It is difficult to conclude in those circumstances that his conduct to that stage involved negligence or a breach of his retainer and I would not take that step.  

What were the prospects of success of an application to review the Council’s decision?

  1. Paragraph 54 of the statement of claim alleges that had the plaintiff made an application to judicially review the decisions, it would have been successful and that orders in relation to each of those decisions would have been made under s. 30(1)(a) or (b) of the Judicial Review Act. Paragraph 38 of that pleading raised the factual issues that the plaintiff said it would have relied on for such an application.  They may be summarised as follows:
  1. the safety of operations, conducted to and from Coochiemudlo Island, would have been reduced by the substitution of CIFS’s ferry service;
  1. CIFS did not have wheelchair access;
  1. CIFS’s vessels’ drafts made it necessary to dredge grass seabeds in Moreton Bay;
  1. works were required to be carried out to the jetty to accommodate CIFS’s vessels;
  1. CIFS’s vessels were slower;
  1. the Council had already approved the plaintiff’s fares (but purportedly resolved against renewing the plaintiff’s permit because CIFS’s fares were lower);
  1. the plaintiff had spent money in reliance on the Council’s assurances as to its right to continue operations;
  1. the Council’s policy was to promote a fast ferry service which the plaintiff provided but CIFS did not;
  1. passenger comfort on the plaintiff’s vessels was superior;
  1. the plaintiff had greater experience;

(k)the plaintiff was likely to be adversely affected commercially and people employed by it would lose their jobs if its permit was not renewed (or if a permit was granted to CIFS);

(l)the Council’s manager had recommended not to accept CIFS’s application and to accept the plaintiff’s application for renewal.

  1. The legal issues raised by such an application might have been stated to be that the making of the decisions was an improper exercise of the power conferred by the enactment under which it was purportedly made, that there was no evidence or other material to justify the making of the decisions and that a breach of the rules of natural justice occurred in relation to the making of the decisions.
  1. The relevant power of the Council derives from Chapter 18 cl. 5 of its by-laws which provides that a person shall not operate any ferry service from any jetty or landing place under the control of the Council except pursuant to a permit issued under the by-laws. The permit may be approved subject to reasonable and relevant conditions and cl. 5(iv) goes on to provide that:

“Without derogating from the provisions of paragraph (iii) in relation to the exercise of discretion, the factors to be taken into account may include:-

  1. The nature and extent of existing services to or from the jetty; 
  1. The need for additional services; 
  1. The frequency of services required in order to meet the convenience of the public; 
  1. Hours of operation and timetables required in order to meet such convenience; 
  1. Fare structures; 
  1. Economics of the proposed service and any similar services.”
  1. As the source of the Council’s power to issue a permit came from its by-laws its decision was made under an enactment. It gave Island Link a number of opportunities to be heard which it used to address some of the issues mentioned in para. 38 of the Statement of Claim. Island Link was not told the full details of CIFS’s proposal but knew that it was to be based on the use of slower ferries at cheaper rates than it proposed. This involved a change of policy by the Council about the use of faster ferries but Island Link knew of that change. I am satisfied that a court would have found that the Council accorded procedural fairness to the plaintiff.
  1. Nor would the “no evidence” ground of review have succeeded. Either at common law or under the no evidence ground of the JR Act in s 20(2)(h), a decision can be set aside if there was no possible basis for it in the evidence. The operation of s 20(2)(h) is further restricted by the provisions of s 24. To succeed on this ground the plaintiff would need to show that, for example, the resolution of the safety concerns raised by it in para. 38 of the Statement of Claim was a precondition to the exercise of the power to grant the permit. It has not done that.
  1. The plaintiff’s argument about these issues focussed more on whether the Council’s decision was so unreasonable that no Council should have made it, or to use administrative lawyers’ shorthand, Wednesbury unreasonableness.   The definition of an improper exercise of power in s. 23 of the Act is also relevant to those issues.  It refers particularly, in this context, to taking an irrelevant consideration into account in the exercise of a power, failing to take a relevant consideration into account, an exercise of a power for a purpose other than a purpose for which the power is conferred or in bad faith and an exercise of a power that is so unreasonable that no reasonable person could so exercise the power. 
  1. Before a failure to take a factor into account will support this ground of judicial review it must be a factor that the decision maker was bound to take into account; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, 39.4.  The considerations which the decision maker is bound to take into account should be found by construction of the statute conferring the discretion or empowering the making of the decision; see also Abebe v Commonwealth (1999) 197 CLR 510, 579 at [195] and Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323, 347-348 at [73].  The factors relevant to the exercise of discretion in the present case are set out in cl. 5 of Chapter 18 set out above.  Other matters may be relevant to the decision but that clause sets out what the Council was bound to take into account. 
  1. The position in the case of the alleged safety concerns raised in paras 38(a) and 38(b) of the statement of claim, dealing with comfort and access including the use of gangways and wheelchair access, the allegation as to environmental damage in para. 38(c) and the allegation as to the extent of the additional expense to the State of Queensland in para. 38(d) is weakened significantly because those concerns were not raised at the relevant time, either by the plaintiff or anyone else, except as to the suggested greater passenger comfort of the plaintiff’s vessels. There is no basis in cl. 5 of the by-law for the conclusion that the Council had to inquire into those facts before it could exercise the power to grant the permit. Nor was Island Link then in a better position in respect to wheelchair access to its passenger ferries than CIFS; T362/28-46. Neither of them used gangways and there was no persuasive evidence that CIFS could not meet those concerns had they been raised.
  1. The defendant’s submissions about the balance of the allegations in para. 38 of the statement of claim were contained in their written submissions, in terms with which I agree, as follows:
  1. As to the relative speed of the plaintiff’s vessels and the competitor’s vessels which is raised by sub-paragraph 38(e), it is impossible to accept that the fact that the plaintiff’s vessels were faster was not something considered by the Council.  Perhaps the plaintiff says that the extent of the difference was something which was understated.  But that is not to say that the consideration itself was not taken into account.  It was not necessary for the Council to say expressly that it had considered the plaintiff’s contention in this respect. It is unnecessary, therefore, to even consider whether the Council was obliged to consider the difference.

 

  1. As to the allegation that the Council had approved the plaintiff’s existing fare structure as alleged in sub-paragraph 38(f), it is also impossible to accept that the Council did not consider the plaintiff’s complaint that the Council had done so.  By the date of the decision it was clear, however, that the Council had resolved not to approve that increase at that stage.  In any event, whether or not the increase had been approved, the question was whether the plaintiff’s service, which was more expensive, should be preferred to the competitor’s service which was cheaper.  The Council was not bound to reach a decision favourable to the plaintiff because it had previously approved the plaintiff’s fare increase, in the light of the competitive lower fare offer of the competitor.

 

  1. As to the fact of the Council’s representations, as alleged in paragraph 38(g) of the statement of claim, there are three points.  First, the representations and the alleged reliance upon them did not occur as alleged.  Secondly, even if they did, the Council was not aware of them at the time of making the decision beyond the statements in the plaintiff’s letter dated 12 May 1997 to all Councillors and there was no duty to inquire further into the matter.  Thirdly, and most importantly, even if the Council had been aware of those matters it would not have been proper to take them into account.  The same applies to the alleged reasonable expectation of renewal alleged in sub-paragraph 38(m).

 

  1. The matters alleged in sub-paragraph 38(h) fall into two classes.  First, that the plaintiff, allegedly in reliance on the representations, made expenditure in connection with its business.  Secondly, that there had been competitive attempts on a number of occasions including that by the competitor who was awarded the passenger ferry service permit to operate in 1997.  None of those was a matter that the Council was bound to take into account or that it can be shown that the Council did or did not consider.

 

  1. Sub-paragraph 38(i) is misconceived.  There was no basis, as at 9 July or 2 July 1997 on which the Council could have known that the plaintiff at that time believed the decision was to be made on the basis of the policy (as to a fast service) adopted in 1993.  The plaintiff had sought an assurance as to that in June and none had been forthcoming.  The plaintiff knew when it made application for the 1997-1998 permit that the competitive proposal was not for a fast service and that there were proponents of that alternative.  That conclusion is inescapable when regard is had to the plaintiff’s application.  In any event, the plaintiff’s belief or whether the Council had misled the plaintiff was not a relevant consideration that the Council was required to ascertain or take into account.

 

  1. As to paragraph 38(j) of the statement of claim, the Council was not required to ascertain or consider whether the plaintiff’s vessels were more comfortable than the competitor’s offering.  In any case, the plaintiff made this assertion in its letter of 16 June 1997 and there is no reason to believe that the Council did not take it into account.  If that factor had been raised specifically at the meetings, the Council could have taken it into account.  It was not raised by the plaintiff on 9 July 1997.

 

  1. As to sub-paragraphs 38(k) and (l) of the statement of claim, the success of the plaintiff’s service in the respects alleged was taken into account at least to the extent that the report to the committee by Mr Robertson referred to the quality of the plaintiff’s service.  The Council was not required to inquire further to take those matters into account although it was permitted to take into account the nature of the existing service provided by the plaintiff.

 

  1. As to sub-paragraph 38(n), the Council was not required to ascertain or consider the number of people in the plaintiff’s employ who would be affected.  In any event, the plaintiff mentioned that there were ten employees when he addressed the Council on 14 May 1997 prior to the decision being made, and the assertion that 13 people depended on the fast ferry service is false.

 

  1. Sub-paragraph 38(o) is a plainly erroneous allegation.  The Council was aware that it had in the committee stage rejected the recommendation of Mr Robertson.  It was not required to otherwise to take it into account.”
  1. In my view, therefore, an application for judicial review of the Council’s decision would have failed.
  1. The plaintiff also alleges in para. 44A of the statement of claim that it could have obtained a stay of the decisions of the Council under s. 29 of the Act. There is no likelihood on the evidence that the plaintiff would have been able to survive if it did not have the benefit of an order on an interlocutory basis that enabled it to continue to conduct the passenger ferry service on an exclusive basis. That scenario was not considered by the plaintiff’s witnesses, including its expert witness in respect of the value of its business. Hence the allegation in para. 44A.
  1. Section 29 confers the power to suspend the operation of a decision or to order a stay of any proceeding under the decision, but provides that the making of an application for an order of review does not otherwise affect the operation of the decision. The final relief which the plaintiff alleges could have been granted on judicial review is relief based on one of the grounds pleaded in the statement of claim. That relief was to set aside the decisions of the Council on the two applications for permits to operate and to refer them back to the Council; see para. 54 of the statement of claim. The consequence of a decision to set aside would have been that the Council would have had to make the decisions anew.
  1. The defendant submitted that s. 29 cannot authorise a stay which would have the effect of granting greater relief than is claimed to have been available by way of final relief. That is a logical approach. Further, if there were the prospect of an order being made, especially one affecting CIFS’s interests, there would have been every likelihood that an undertaking as to damages would have been sought that Island Link would have been unlikely to have been able to provide on the evidence of its financial position at that time; see, for example, K. C. Park-Safe (Brisbane) Pty Ltd v Cairns City Council [1997] 1 Qd R 497, 506 ll. 34-42.
  1. Mr Thompson also relied on the implication of a licence to continue operating until Island Link had a proper hearing of its application for a new permit arising from statements to such an effect by McPherson SPJ in State of Queensland v Litz [1993] 1 Qd R 343, 351.  It is unlikely that such an implication would be capable of operating to suspend the permit given to CIFS, at least without a worthwhile undertaking as to damages.  Consequently, in my view, there was no likelihood that the plaintiff would have obtained immediate interlocutory relief entitling it to exclusive rights pending a final hearing of its application. 
  1. Mr Thompson submitted that the Court could have expedited its hearing of the matter and stayed the grant of a permit to CIFS. He also argued that the institution of such proceedings might have encouraged the Council to act reasonably to lead to some interim arrangement being arrived at between the parties. This was contrary to the stance adopted by the Council when the plaintiff brought judicial review proceedings in 1998 in respect of the Council’s refusal to renew the plaintiff’s barge service permit in favour of another company, Yenod Pty Ltd. It resisted that application which the plaintiff eventually discontinued. It also ignores the rights that CIFS had obtained. The Court may have been able to expedite the hearing but the need to assemble the relevant evidence by both sides and the likely length of the hearing would have had the probable result that a trial could not have been held for several months after July 1997 and probably not before the beginning of 1998.

Would the plaintiff have taken proceedings if properly advised?

  1. Mr Jackson QC’s argument on this issue in para. [58] of his written submissions was persuasive. The submission proceeded on the correct basis that it was for the plaintiff to show on the balance of probabilities that it would have sought judicial review. His argument was that, any competent advice as to judicial review would have been to the effect that:
  1. judicial review would not succeed simply because the Council had made a decision that might be thought by many reasonable people to be wrong;
  1. judicial review was not simply making the decision again on the merits;
  1. the outcome of successful judicial review would only be that the decision would have to be made again by the Council;
  1. the Council would be perfectly entitled to take into account on any new decision that the opposition was going to charge less and had the support of many island residents;
  2. the judge might decide that the plaintiff had been given an adequate opportunity to say whatever it wanted in support of its application and against the CIFS application;
  3. if the judge so decided he would also decide that there was no breach of natural justice and that the plaintiff would lose that ground;
  4. the judge might have decided that the law did not require the Council to inquire into whether CIFS’s vessels complied at the time of the decision with any particular provision of the standard as to a gangway;
  5. the judge might decide that if the plaintiff  had not raised the gangway at the time it would lose that ground;
  6. if the plaintiff succeeded on the ground that the gangway had to be taken into account, CIFS might fix the problem before the Council made a fresh decision and the Council could take that into account when it made the decision again;
  7. the judge might well decide that the speed and the comfort of the plaintiff’s vessels in comparison were things of which the Council probably had been aware and would not lead to a successful judicial review decision;
  8. the judge might decide that the Council was not required to take the relative draft of the vessels into account;
  9. the judge might decide that the Council was not required to ascertain whether CIFS’s vessel would lead to some changes to the new jetty under construction by the State;
  10. whether or not the Council had reneged on the informal approval that the plaintiff was given at the end of April for a fare rise the judge might find that the Council was entitled to reconsider the fares as a relevant matter;
  11. the judge might decide that the loss of employment was not something the Council was required to take into account or that the plaintiff had raised it sufficiently in its submissions to Council;
  12. it would be a difficult case;
  13. it would take an uncertain time but it was several months at least;
  14. the plaintiff would be unlikely to obtain a useful interim order, because it was not staying the decision but making the decision in its favour that the plaintiff needed;
  15. it would be costly to run the case and involve as much hearing time as this case shorn of the loss issues.
  1. Those submissions reflect the cross-examination, particularly at T143-151, and a realistic view of the likely outcome of any judicial review application. If that advice had been given to the plaintiff by Mr Turner it would undoubtedly have been proper advice. Given Mr Poulton’s already expressed wish not to resume operations and his lack of any response to Mr Turner’s request for further instructions, it would have had the effect of confirming him in his view that there was no point in trying to pursue the issuing of a new permit. The plaintiff would also have needed to meet the competition it would have faced at least from the water taxi service and to survive for a significant period while pursuing its remedy at a time when it was financially stretched and would not have had the revenue from the operation of its passenger service that terminated on 9 July.
  1. When I say it was then financially stretched I am referring to the evidence that the plaintiff had made a cash flow “loss” for the year ended 30 June 1997 of $109,000.00.  In March 1997 the plaintiff had reviewed its financial position with the assistance of its accountants and had determined that it could not continue in business at the existing levels of patronage, prices and expenses.  It had no capital reserves of any kind and its business was highly geared with a substantial interest commitment to the bank and another lender of $75,000.00 per annum.  Mr Poulton said that he could have borrowed $100,000 from his son but I have no confidence that he would have used that money to pursue a judicial review application at that time; in that context see the cross-examination at T149-151. 
  1. Mr Poulton said that he had also been told by Mr Greenfield that the plaintiff had no remedy; T188/5-6.  That was no doubt qualified in the sense that Mr Greenfield was not a practising barrister and did not claim knowledge of the relevant law in the area.  Mr Greenfield himself said that he did not give Mr Poulton any commercial or legal advice (T390/53-391/2), but he was someone whom Mr Poulton could have consulted about other available solicitors had he seriously wished to pursue the matter and was dissatisfied with Mr Turner’s alleged lack of urgency in dealing with his problems. 
  1. I do not believe that it was at all likely that the plaintiff would have instituted proceedings for judicial review had it been properly advised in the terms set out above. Accordingly I disbelieve Mr Poulton’s evidence that he would have given instructions to institute such proceedings. Nor do I believe that he then wanted to do anything to keep that part of Island Link’s business operating. What he told Mr Turner was too conclusive and emphatic to admit of another conclusion. In those circumstances the plaintiff has failed to establish, on the balance of probabilities, that any conduct of Mr Turner caused the claimed loss; Sykes v Midland Bank Executor & Trustee Co. Ltd [1971] 1 QB 113, 125E, 129E, 132E-F; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, 351-353; Gore v Montague Mining Pty Ltd [2001] ANZ ConvR 8, [2000] FCA 1214 at [34]-[51]; Dickson v Creevey [2002] QCA 195 at [12]-[13].

What was the value of the business lost to Island Link?

  1. I have already referred to some of the evidence on this issue. The evidence of value came from Mr Donaldson, a chartered accountant who had been the plaintiff’s accountant for many years. His former firm was owed money by the plaintiff, something that was not referred to in his report but was conceded by him in cross-examination. The success of this action would be the only likely source of funds to pay that debt to his former firm. One of its employees had assisted in the reports’ preparation. In those circumstances they cannot be treated as independent experts’ reports.
  1. His reports were made the subject of a critique by Mr Thynne, another chartered accountant who, in spite of his name, was independent of the defendant. Mr Thynne did not express an opinion of the value of the business because he did not have access to enough information to allow him to do so but his critique of Mr Donaldson’s approach was comprehensive.
  1. The plaintiff had been operating at a loss. It had plans to reduce its unprofitable services, increase its fares, economise on fuel and reduce costs by reducing staff and employing casual labour, introduce day trips for pensioners to Stradbroke Island and advertise with a view of generating profits of $150,000.00 in the 1998 financial year. Mr Donaldson’s approach to valuing the plaintiff’s business was to value it as at 30 June 1997 by adopting a discounted cash flow method based on hypothetical assumptions leading to a hypothetical sale at 31 December 2004 for a capital sum that was discounted for present receipt to which he added hypothetical net cash flows after tax from operations for the years from 1 July 1997 to 31 December 2004. The value arrived at was $4 million. The process was flawed, however, not only because of the shaky assumptions that were adopted but because it required a hypothetical purchaser to, in effect, pay for all the increased value of the business on the assumption that all the hypothetical improvements would be implemented successfully and succeed in turning a loss making concern into a highly profitable one. The uncertainties attending such a proposition assume a degree of charity and naivety in the hypothetical purchaser foreign to my experience.
  1. The dubious assumptions were many. Mr Poulton had discussed a “strategic plan” with Mr Donaldson on which Mr Donaldson relied without testing it properly. It was only reduced to writing in the form of two documents that became exs 88 and 89 that evidence a budgeted profit and loss for the period to 31 December 1998. In ex. 88 Mr Poulton simply increased the passenger ferry income from the historical 1996 figure by a factor of 25% to arrive at a predicted figure of $573,296.00. He did this in April 1997. In fact the sales for the passenger ferry for the 1996-1997 year to the end of January were substantially less than for the 1995-1996 year.
  1. He also projected additional income to be earned from charter services or additional services that were either speculative or hypothetical and not supported by his own experience in that market or any reliable evidence of tourist growth. Nor were they offset against the likely expense of advertising to try to build tourism to the island and the associated area. They would also have required the purchase of another expensive ferry whose operating expenses, apart from the cost of leasing, were not taken into account.
  1. Other assumptions were made by Mr Donaldson in respect of the expenses associated with the hypothetical operations of the business that were unwarranted, particularly in respect of fuel economy, possible reductions in staff expenses and interest payments. He conceded that the business was under capitalised to the extent that it needed an injection of working capital of about $400,000.00 to $500,000.00.
  1. He assumed that the plaintiff would be entitled to renewals of its permit to operate and then would benefit from two successive five year contracts with the Department of Transport without having to contend with competition. This was an assumption that was contrary to the evidence and the experience of Yenod Pty Ltd. As referred to earlier, it applied unsuccessfully in 1998 to run what had been the plaintiff’s barge service. The plaintiff in fact applied under the Judicial Review Act to review that Council decision to award the permit to another company in 1998 and discontinued that application in 2001. 
  1. He also made assumptions about the plaintiff’s ability to increase fares for its hypothetical services that were contrary to the evidence and experience of their regulation by the Council. In conclusion, Mr Jackson QC submitted that:

“[T]he financial forecasts represent an unrealistic scenario.  They provide no proper basis for an assessment of value utilising a discounted cash flow method.  In particular:

  1. the historical trading performance summarised in Appendix 1 of Mr Thynne’s report: (Exhibit 107, pages 8-10) supports the conclusion that the projections cannot be accepted;
  2. the level of business debt coupled with the period of uncertainty which must have attended any hypothetical challenge to the Council’s decisions by way of judicial review leads to the likely, and almost inescapable, view that the plaintiff would not have survived that period because of working capital shortage coupled with accumulated and continuing loss during that period;
  3. the amounts received on sale of the assets of the business as set out in Mr Thynne’s report in Appendix 2.8: (Exhibit 107, page 18) support that the business could not have been worth what the plaintiff contends it was worth;
  4. the fundamental assumption of the plaintiff that it could and would have been entitled to obtain continuing permits to operate and contracts from the Department of Transport is simply not proved.  In particular, at 30 June 1997 no prospective purchaser would have been prepared to make that assumption on the information then available.  As Mr Donaldson conceded, in an inverse way, without that assumption no purchaser would buy the business;
  5. any assumption as to ceasing an unprofitable barge service was not supported by the evidence;
  6. any assumption as to ceasing an unprofitable ferry service seems to be confined to a decreased frequency of service, a matter which itself would have raised potential opposition from islanders or the Council;
  7. there is no basis for the assumed increase in price of all ferry services either on the trading until 1997 or in the facts as known in relation to other operators who have conducted the relevant service since that date;
  8. the detailed analysis of Mr Thynne of the forecast as to sales contained in Appendix 4 is supported by the evidence that there was no proper basis for those forecasts: (Exhibit 107, pages 28-31);
  9. similarly, the analysis of Mr Donaldson’s forecast as to the cost of goods sold by Mr Thynne shows that there is no proper basis for many of the expense savings which have been assumed: (Exhibit 107, page 31-37).”
  1. Again, I agree with those submissions and am not satisfied that the plaintiff has proved the value of its business in July 1997. If it had a value it was very little.

What was the value of the loss of any chance of success in such proceedings?

  1. My conclusion is that the hypothetical proceedings would not have succeeded and the value of the business sought to be salvaged by such proceedings has not been proved satisfactorily. Because of my findings about causation the plaintiff has shown no commercial value in its alleged lost chance to institute judicial review proceedings. Had I been satisfied on the balance of probabilities that Mr Turner's conduct was negligent, that he should have advised the plaintiff immediately about the possibility of seeking judicial review of the Council's decision and that the plaintiff would have accepted that advice and instituted proceedings, the poor prospects of success of such an application and the absence of reliable evidence that the plaintiff would have profited from a renewal of its permit or have prevented a loss or increased the value of its business would have left me in the position simply of speculating about any loss it may have suffered. Had I been placed in that situation I would have had no alternative other than to assess damages in a nominal sum such as $10; see, e.g., Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64, 125-126.

Conclusion

  1. I am not satisfied that Mr Turner acted negligently or in breach of his retainer, nor that the plaintiff would have commenced proceedings under the Judicial Review Act had it been advised about any rights it had under that Act.  If it had brought such an application it would probably have lost it.  It has not established to my satisfaction what the value of its business was at the relevant time.  My assessment of the value of any chance it lost to institute such proceedings is that it was worthless.  In those circumstances I shall dismiss the action and give judgment for the defendant with costs including reserved costs if any. 
Close

Editorial Notes

  • Published Case Name:

    Island Link Pty Ltd v Thynne & Macartney

  • Shortened Case Name:

    Island Link Pty Ltd v Thynne & Macartney

  • MNC:

    [2004] QSC 460

  • Court:

    QSC

  • Judge(s):

    Douglas J

  • Date:

    24 Dec 2004

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Abebe v Commonwealth (1999) 197 CLR 510
2 citations
Jump To
Cite 1 - (1999) 197 CLR 510
Cite 2 - (1999) 197 CLR 510
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
2 citations
Jump To
Cite 1 - (1991) 174 CLR 64
Cite 2 - (1991) 174 CLR 64
Dickson v Creevey [2002] QCA 195
2 citations
Jump To
Cite 1 - [2002] QCA 195
Cite 2 - [2002] QCA 195
Gore v Montague Mining Pty Ltd [2001] ANZ ConvR 8
2 citations
Jump To
Cite 1 - [2001] ANZ ConvR 8
Cite 2 - [2001] ANZ ConvR 8
Gore v Montague Mining Pty Ltd [2000] FCA 1214
2 citations
Jump To
Cite 1 - [2000] FCA 1214
Cite 2 - [2000] FCA 1214
Hawkins v Clayton (1988) 164 CLR 539
2 citations
Jump To
Cite 1 - (1988) 164 CLR 539
Cite 2 - (1988) 164 CLR 539
Heydon v NRMA Ltd (2000) 51 NSWLR 1
1 citation
Jump To
Cite 1 - (2000) 51 NSWLR 1
KC Park Safe (Brisbane) Pty Ltd v Cairns City Council [1997] 1 Qd R 497
2 citations
Jump To
Cite 1 - [1997] 1 Qd R 497
Cite 2 - [1997] 1 Qd R 497
Midland Bank Trust Co Ltd v Hett Stubbs & Kemp (1979) Ch 384
2 citations
Jump To
Cite 1 - (1979) Ch 384
Cite 2 - (1979) Ch 384
Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24
2 citations
Jump To
Cite 1 - (1986) 162 CLR 24
Cite 2 - (1986) 162 CLR 24
Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323
2 citations
Jump To
Cite 1 - (2001) 206 CLR 323
Cite 2 - (2001) 206 CLR 323
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332
2 citations
Jump To
Cite 1 - (1994) 179 CLR 332
Cite 2 - (1994) 179 CLR 332
State of Queensland v Litz[1993] 1 Qd R 343; [1991] QSCFC 84
2 citations
Jump To
Cite 1 - [1993] 1 Qd R 343
Cite 2 - [1993] 1 Qd R 343
Sykes v Midland Bank Executor & Trustee Co Ltd (1971) 1 QB 113
2 citations
Jump To
Cite 1 - (1971) 1 QB 113
Cite 2 - (1971) 1 QB 113

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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