Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158

Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158

Bartier Perry breached its retainer and duty of care by failing to advise Mr Paltos of his right to exercise a put option upon disability, which survived the Partnership's dissolution. This omission constituted both negligence and misleading conduct under s 18 of the Australian Consumer Law. The correct damages methodology, following Malec v Hutton, required deduction for the value of goodwill and work in progress Mr Paltos would receive in the Partnership Proceedings, discounted by probabilities. The correct calculation yielded $942,777. The undertaking approach by the primary judge was incorrect; damages should be assessed once and for all as a lump sum.

Parties
Appellant: Bartier Perry Pty Ltd; Respondent: Dennis Paltos
Jurisdiction
Australia
Judgment Date
03 August 2021
Procedural Posture
Appeal / Judgment on Appeal From Supreme Court of New South Wales, Common Law Division ([2020] NSWSC 705; [2020] NSWSC 1706)
Outcome
Appeal allowed in part; cross-appeal dismissed.
Legal Topics
Solicitor's Duty of Care, Misleading or Deceptive Conduct, Put and Call Option Agreement, Implied Contractual Terms, Damages Assessment, Calculation of Purchase Price, Goodwill Valuation in Partnerships
Negligence Professional Liability Contract Law Consumer Law Civil Procedure Solicitor's Duty of Care Misleading or Deceptive Conduct Put and Call Option Agreement +4 more

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Parties

Bartier Perry Pty Ltd

Appellant

Dennis Paltos

Respondent

Procedural Posture

Appeal / Judgment on Appeal From Supreme Court of New South Wales, Common Law Division ([2020] NSWSC 705; [2020] NSWSC 1706)

Legal Issues

  1. 1 Did Bartier Perry breach its duty of care and retainer in advising Mr Paltos on his rights under the Put and Call Option Agreement?
  2. 2 Did Bartier Perry engage in misleading or deceptive conduct under s 18 of the Australian Consumer Law?
  3. 3 Was there an implied term in the Put and Call Option Agreement that could not be defeated by dissolution of the Partnership?

Ratio Decidendi

Bartier Perry breached its retainer and duty of care by failing to advise Mr Paltos of his right to exercise a put option upon disability, which survived the Partnership's dissolution. This omission constituted both negligence and misleading conduct under s 18 of the Australian Consumer Law. The correct damages methodology, following Malec v Hutton, required deduction for the value of goodwill and work in progress Mr Paltos would receive in the Partnership Proceedings, discounted by probabilities. The correct calculation yielded $942,777. The undertaking approach by the primary judge was incorrect; damages should be assessed once and for all as a lump sum.

Court Disposition

Appeal allowed in part; cross-appeal dismissed.

Orders

  • Bartier Perry's motion to lead fresh evidence dismissed.
  • Orders 2 and 5 of Rothman J set aside; Bartier Perry to pay damages to Mr Paltos of $942,777.