IVAN WILLIAM GEORGE BENTON V MILLER & POULGRAIN (A FIRM) CA CA118/03

IVAN WILLIAM GEORGE BENTON V MILLER & POULGRAIN (A FIRM) CA CA118/03 15 June 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA118/03BETWEEN IVAN WILLIAM GEORGE BENTON Appellant AND MILLER & POULGRAIN (A FIRM) Respondent Hearing: 25 March 2004 Coram: Glazebrook J Hammond J William Young J Appearances: W J Scotter and J B Forret for Appellant M O Robertson and A C M Redican for Respondent Judgment: 15 June 2004JUDGMENTS OF THE COURT Judgments Para No Glazebrook and William Young JJ [1] Hammond J [89] GLAZEBROOK AND WILLIAM YOUNG JJ (DELIVERED BY WILLIAM YOUNG J) Introduction[1] The appellant, Mr Ivan Benton, entered into property transactions with his then wife, Mrs Gwenda Benton, in 1985. Miller and Poulgrain acted as solicitors for both parties. It is common ground now that Miller and Poulgrain were negligent vis-à-vis Mr Benton. But Mr Benton's subsequent claim for damages against Millerand Poulgrain failed in the District Court because the Judge was not satisfied that Mr Benton suffered any loss. Mr Benton's appeal to the High Court against that decision was successful, albeit that the damages awarded ($37,800) were much less than he sought. Mr Benton and Miller and Poulgrain are both dissatisfied with the High Court judgment and they have obtained leave to appeal and cross-appeal respectively to this Court.The background facts[2] Mr and Mrs Benton married on 3 January 1976. Both had been married before and each had children from their first marriages. [3] At the time of the marriage, Mr Benton owned a property in Mt Albert, Auckland and Mrs Benton owned a section in Pauanui that she had acquired in 1975, not long before the marriage and at a time at which Mr and Mrs Benton were living together. Mr and Mrs Benton lived in the Mt Albert house and built a house on the Pauanui property. [4] On 26 July 1977, Mrs Benton transferred a 29% share in the Pauanui property to Mr Benton; this to recognise the contributions that he had made to that property. She retained a 71% interest in the Pauanui property. [5] When Mr Benton retired in 1983 the couple moved to Pauanui for a trial period to determine whether they should live there permanently. Mr Benton leased the Mt Albert property to Mrs Benton's son, Mr Stephen Smith, and his wife. [6] Mr and Mrs Benton decided that they would reside permanently in Pauanui. Exactly when this decision was made is not altogether clear but it was probably in 1983 or 1984. The house on the property was, at this time, just a bach and not suitable as a long term residence. Mr and Mrs Benton considered the possibility of buying another property in Pauanui but in the end decided to stay on in the existing property and to extend the house. Associated with this decision were the inter-related property transactions which have given rise to this litigation. Pursuant to these transactions, Mr Benton acquired Mrs Benton's remaining 71% interest inthe Pauanui property for $49,700 (based on an agreed total value for the property of $70,000) and Mr Benton sold the Mt Albert property to the Smiths for $70,000 (which was its then market value). To facilitate this latter transaction, Mrs Benton lent the Smiths the $49,700 she received from Mr Benton, as well as further money from her own resources. This advance was secured by way of mortgage over the Mt Albert property. [7] Mr Jim Poulgrain of Miller and Poulgrain acted for Mr and Mrs Benton on these transactions. Mr Poulgrain was first instructed in February 1985 and he simply implemented the instructions he received. This occurred in May 1985. He did not discuss with Mr and Mrs Benton the provisions of the Matrimonial Property Act and the implications of the transactions for each of Mr and Mrs Benton if they were later to separate. [8] After the property transactions to which we have referred, Mr and Mrs Benton continued to live in the Pauanui house until April 1995 when they separated. While they were living together, Mr Benton used $36,000 (which included what was left of the proceeds of the sale of the Mt Albert property after his payment to Mrs Benton of $49,700) to extend the Pauanui house and Mrs Benton contributed $5,000 to $10,000 towards carpet and some furnishings. Mr Benton took responsibility for their day-to-day living costs which he met from his national superannuation. Mrs Benton spent "her" money (including repayments she received from the Smiths in relation to the loan secured over the Mt Albert property) largely as she wished, including going on golfing holidays overseas without Mr Benton. So by 1995 (when Mr and Mrs Benton separated), this money had been dissipated and was thus not available for sharing under the Matrimonial Property Act. [9] In 1996 Mrs Benton brought proceedings in the Family Court at Waihi seeking, among other things, a one half interest in the Pauanui property pursuant to the Matrimonial Property Act. Mr Benton contested the application on the basis that the Pauanui property became his separate property in 1985 as a result of him paying Mrs Benton $49,700. However, it is perfectly clear that the Pauanui property was the matrimonial home at the time of separation. Accordingly Mrs Benton had a 50%interest in the property under the Matrimonial Property Act 1976 notwithstanding the earlier transfer of title to Mr Benton. [10] Mr Benton eventually recognised the indefensibility of his position. So in July 1998 he compromised the matrimonial property dispute on terms which required him to pay $90,000 to Mrs Benton if he was to retain the Pauanui property. The assumed value of the property at that time was $180,000. In accordance with this compromise he paid $90,000 to Mrs Benton in December 1998.The District Court proceedings[11] Taking the view that he was out of pocket by reason of the negligence of Mr Poulgrain, Mr Benton then commenced proceedings against Miller and Poulgrain. He sought damages of $90,000. [12] In para 11 of the statement of claim Mr Benton pleaded:IN about July 1998 the plaintiff settled the matrimonial property proceeding and agreed to pay Gwenda the sum of $90,000.00 upon the basis that the property was then worth $180,000.00 and upon the further basis that, notwithstanding the agreement, conveyance and payment mentioned in para 4 above, the property was a matrimonial home to be shared equally between the plaintiff and Gwenda.Para 12 of the statement of claim alleged a duty of care on the part of Miller and Poulgrain to give Mr Benton appropriate advice as the Matrimonial Property Act. Paras 13 and 14 then went on:THE plaintiff relied on the defendant to protect his interests and, in particular, to ensure that, as a matter of law, the property became his separate property and to advise him on the matters mentioned in para 12 hereof. THE defendant failed to advise the plaintiff on the relevant law and, as a result, the plaintiff has suffered a loss in the sum of $90,000.00 as mentioned in para 11 hereof.Essentially Mr Benton claimed that if appropriate advice had been given he and Mrs Benton would have entered into an agreement under s21 of the Matrimonial Property Act declaring the Pauanui property to be his separate property.[13] By their statement of defence Miller and Poulgrain denied negligence but admitted that no advice had been given as to the Matrimonial Property Act implications of the 1985 property transactions. Miller and Poulgrain also pleaded the Limitation Act, on the basis, as expressed:The plaintiff's claim is statute barred in that the alleged breach of duty arose in or about February 1985.The statement of defence raised a defence of contributory negligence (associated with the contentions that Mr Benton did not specifically seek advice as to the Matrimonial Property Act and did not refer to his alleged intentions that the Pauanui property become his separate property). It was also contended that Mrs Benton would not have signed a s21 agreement under which the Pauanui property became Mr Benton's separate property. [14] These proceedings came before Judge Wolff in the District Court at Hamilton. [15] As the quantum of the claim and the structure of the statement of claim indicate, the primary basis upon which Mr Benton's claim was presented was that if Mr Poulgrain had given appropriate advice, the result would have been an agreement under s21 of the Matrimonial Property Act under which the Pauanui property would have been declared to be Mr Benton's separate property. [16] When Mr Benton was cross-examined, his uncertainties as to whether Mrs Benton would have signed a 21 agreement became apparent:Q. You know that Mr Scotter [counsel for Mr Benton] says that you will argue that Mrs Benton would have signed a matrimonial property agreement, that's what you say? A. I can't speak for her, no, I don't know whether she would have or not, but I should think that she would. OBJECTION: MR SCOTTER CROSS-EXAMINATION CONTINUES BY MR EVERARD Q. What I'm saying is I understand your case to be that you believe that there should have been a matrimonial property agreement protecting your 100 percent share of the Pauanui property?A. That's what I am saying. He should have advised me that was necessary. Q. Right? A. Otherwise the Matrimonial Act would come into force and the property would not belong to me. Q. Right. And in your counsel's opening he says it will be argued for Mr Benton that in all the circumstances Mrs Benton would have signed a matrimonial property agreement. Now do you mean in respect of the Pauanui property? A. I'm not quite sure what you're talking about. Q. Do you have a copy of the opening statement? A. This one, yes. Q. If you go to paragraph 32? A. Sorry? Q. If you have a look at paragraph 32? A. Paragraph? Q. 32? A. 33. Q. Pardon, 32? A. 32. I can't answer to that. I don't know whether she would have signed it or. I should have imagined she would have. If you'd been aware of the Matrimonial Act. Q. Are you saying she would have? A. I, I can't say whether she would have or not. Whether she would or whether she wouldn't. Um, if it was never put to her, how can I answer it. THE COURT: But your first answer indicated that you think she probably wouldn't have? A. Well I would strongly suspect she wouldn't have, no. CROSS-EXAMINATION CONTINUES BY MR EVERARD Q. I'm sorry was that would. I'm having difficulty hearing the witness? A. I would strongly suspect that she would not have signed an agreement relinquishing her ownership of the property.Q. Well, do you understand what Mr Poulgrain's argument is in this case. Namely that even if he had said to you look there needs to be a matrimonial property agreement between you and your wife, for you to get a 100 percent share of the Pauanui property, Mrs Benton wouldn't have signed that agreement anyway? A. Well, I don't know, but I wouldn't think she would have, no. I don't know.It will be noted that the concessions made by Mr Benton followed the intervention of the Judge and his incorrect assertion that Mr Benton had initially indicated that Mrs Benton probably would not have signed a s21 agreement. [17] Mr Benton also maintained that, properly advised, he would not have proceeded with the property transactions if there had not been a s21 agreement:If, in 1985, I had been advised that, following the conveyancing transactions, [Mrs Benton] might still have an interest in Pauanui I definitely would not have proceeded with the purchase of [Mrs Benton's] share, I would not have sold my Mount Albert property and I would have protested the use by [Mrs Benton], particularly on overseas trips, of "her" money.As will become apparent, in the course of the hearing counsel for Mr Benton was able to enlarge the scope of the claim so as to argue that, in the absence of a s21 agreement, Mr Benton would not have entered into the 1985 property transactions and that in this respect, he had suffered a loss for which he could recover damages from Miller and Poulgrain associated with the detriment to him arising out of those property transactions. [18] Solicitors were called to give evidence as to the advice that they might have given to Mr and Mrs Benton in 1985 if they had been referred for independent advice prior to the property transactions being entered into. This evidence is of limited assistance because the advice which the solicitors would have given would have depended upon the status (as then perceived by them) of the Mt Albert and Pauanui properties under the Matrimonial Property Act, a point which we discuss later in this judgment. The status of these two properties in 1985 depended upon an independent question of fact, whether Mr and Mrs Benton had made the Pauanui house their matrimonial home by the time they consulted Mr Poulgrain. This was a question of fact which lay outside the competence and knowledge of the solicitors who gave evidence before Judge Wolff.[19] Mrs Benton did not give evidence although she was at the Court when the case was heard. An affidavit from Mrs Benton which had been prepared for the matrimonial property proceedings was in evidence but this was, as we understand it, simply to show the context in which the 1998 settlement was reached. It could not be regarded as being a contradiction of the evidence given by Mr Benton to Judge Wolff. [20] In the course of the hearing, Miller and Poulgrain conceded that Mr Poulgrain had not met the standard of a reasonably competent solicitor; this because he had not inquired sufficiently deeply into the background to the two transactions and accordingly he had not given appropriate matrimonial property advice. So Mr Benton was able to establish negligence. As well, contributory negligence arguments do not appear to have been pursued. [21] The limitation defence also was not pursued. The claim as initially structured focused on a loss which crystallised either in 1995 (when the marriage of Mr and Mrs Benton broke up) or in 1998 (when the $90,000 payment was made). So structured, the claim was perhaps not susceptible to a limitation defence. In the course of the trial counsel for Mr Benton added a claim that Mr Benton suffered a loss in 1985 (namely the detriment associated with entering into the property transactions). From the material we have, counsel for Miller and Poulgrain did not seek to respond to this line of argument with a Limitation Act defence. Presumably this was for reasonable discoverability reasons. [22] Mr Benton's claim failed as the Judge held that Mr Benton had not established that Mr Poulgrain's negligence had caused him a quantifiable loss:[19] In view of the concessions at the hearing, the first issue for this Court to decide is: Did the solicitor's negligence cause any loss to Mr Benton? [20] The Defendant contends that the onus of proof is on the Plaintiff to establish that if he had been properly advised of his rights under the Matrimonial Property Act, he and his wife would have entered into a Matrimonial Property Agreement pursuant to which his wife would have no further claim on the Pauanui property. [22] I hold that if the Plaintiff can show any loss caused by the negligence, he can recover it. He does not need to prove that his wife would have signed the agreement but, whatever the circumstances, he still needs to prove a loss arising out of the circumstances prevailing. Any negligent action will be actionable only if the defendant thereby causes the plaintiff loss. This is a more general proposition than that contended for by the Defendant. [23] In the course of evidence, the Plaintiff volunteered that he did not know whether she would have signed the agreement – indeed, he strongly suspected that she would not have done so. Where Mr Benton is not sure whether his wife would have signed the agreement, the Court cannot safely draw that conclusion. [24] Had the couple been advised of their matrimonial property rights and an agreement been contemplated, each would have had to have independent legal advice. The independent legal advice to Mrs Benton undoubtedly would have been that she should not give up her rights in the matrimonial home. It seems unlikely that she would have signed a Matrimonial Property Agreement [under s21] that would have produced a result of giving up ownership of the Pauanui property and abandoning any interest in a matrimonial home. [25] Conversely, properly advised, Mr Benton may not have decided to sign a Matrimonial Property Agreement either. The entire transaction in 1985 may have taken a completely different course. [26] Mr Benton did not establish that his wife would have signed the Matrimonial Property Agreement. It follows that it has not been made out that as a direct consequence of the solicitor's failure to advise, he has had the additional cost of $90,000. [27] What is clear is that, as a result of failure by the solicitors to adequately counsel and advise Mr Benton, he has been placed in a position that is at odds to the position that he now says he wanted to achieve in 1985. It is not necessary for me to investigate or analyse whether his present view is coloured by hindsight or if it is an accurate reflection of his contemporaneous expectation. [28] Plaintiff's Counsel, during the course of closing submissions, amended his argument to contend for a judgment of at least $49,500 (i.e. the purchase price of the balance of Mrs Benton's share). Like the argument in favour of the $90,000 this too is simplistic, unsupported by evidence and speculative. [30] The Defence referred to a decision of the New Zealand Court of Appeal in Korving v Dell (Court of Appeal 14 May 1996). At first blush, the facts there seem broadly similar to the present. The Defendant's solicitor had not completed or advised as to a Matrimonial Property Agreement and thus an apparent settlement of matrimonial property was ineffective. In the absence of a Matrimonial Property Agreement, the Plaintiff had to disgorge more money to his wife to settle matrimonial property issues at a later stage.[31] Counsel did not provide me with a copy of [the] decision of Morris J in the High Court, but I have obtained that and read it with some care. When the detail is considered, that case is substantially different from the present. There His Honour was left to determine what the Plaintiff's position would have been had the wife signed the settlement agreement that had been envisaged. Evidence was available from which he was able to conclude that she would have done so. He was therefore able to conclude that the husband had lost a negotiating position as a result of the defendant's negligence. He fixed the value of that loss as $12,500. In addition he awarded general damages of $1000 for what can loosely be described as stress. [32] Morris J, in reaching his assessment, applied the Court of Appeal decision in Morrison Morpeth v Hanrahan (Court of Appeal 81/93 17 December 1993 Mackay J). In Morpeth the Appellant had been held liable to the Respondents in damages for professional negligence. The negligence consisted of an incorrect drafting of a caveat, which was rejected by the Land Transfer Office. The caveat, even if it had been properly drawn and registered, would have been unsustainable. Hammond J had held that the Plaintiff had lost the possibility of negotiating a settlement with the other parties and as a result suffered loss. The Court of Appeal endorsed this approach and in the course of its judgment adopted an observation of Lord Evershed MR in Kitchen v Royal Airforce Association [1958] 1 WLR 563 at 547The question is, has the Plaintiff lost some right of value, some choice in action of reality and substance?[33] In Korving, the Court of Appeal affirmed Morris J's findings on quantum. His approach of fixing damages based on the loss of bargaining position was not criticised. His finding of general damages were held to be adequate, but the Court of Appeal did comment -We would only comment that in this area of general damages the Court should not be overly concerned with consequences of minimal significance. Litigants should not be encouraged to seek such remedy unless those consequences are of significance.[34] Significantly, in Korving the loss of bargaining power existed because a number of items of property were in dispute. In this case Mr Benton's evidence indicates that no other property had questioned status. It follows that there was nothing to bargain about except the status of Pauanui. If he had been able to prove that his wife would have signed a matrimonial property agreement in 1985 recording Pauanui as his separate property his claim may have been established, though his actual loss would still need to be quantified. [35] The corollary here, where he cannot prove she would have signed up to the arrangement and no property other than Pauanui was in dispute, there is no negotiation advantage lost. [36] In the present claim, there is no prayer for general damages, although there is the standard prayer for "such other relief as to the Court seems just". The Plaintiff's closing submissions focussed on damages for a loss of a chance. I was referred both to the Tort text by Todd at para.25.3.1and to notes from a Law Society seminar conducted in March of 1997 dealing with this issue. As the Todd text observes –Cases involving a loss of chance with a provable value must be distinguished from those where the loss is entirely speculative. While a Court will not shy away from assessing quantum, even though it may be a very difficult exercise, the Plaintiff is required to establish on the balance of probabilities that he or she would have suffered some loss which is more than minimal. If the Plaintiff is unable to cross this threshold, he or she is not entitled to compensation. In cases of breach of contract, he or she is not entitled to compensation. In cases of breach of contract or torts actionable per se, there must be an award of nominal damages. This would, however, be inappropriate in torts where damage is a prerequisite liability.The present case is not a tort actionable per se. [37] The closing paragraph in the seminar materials to which I have referred reads as follows –The factual situation in all these cases is to be distinguished from that in Sykes v Midland Bank Executor and Trustee Company Limited [1972] All ER 471 where solicitors negligently failed to advise the Plaintiffs on the consequences of certain leasing proposals. The Plaintiffs could not discharge the onus of proving that they would not have gone on and made the lease commitments they did, even if given further advice. That was therefore a case in which they failed to establish that they would pursue the chance.[38] The present case is also one where the Plaintiff is required to prove that a loss flowed from the negligent advice. [39] I am being asked to consider what might have been the effect on a couple, at that point happily married, and arranging their retirement future if they had received proper advice. This is impossibly speculative as not only do I have to return to 1985 with little contemporary material to assist me, but I must allow for the fact of a complete change in domestic circumstances since. [40] All I can say with any certainty is that no doubt both Mr and Mrs Benton have been put through an unnecessary matrimonial property dispute in 1995. I cannot say what the effect of proper advice might have been. One possibility is that it could have produced a matrimonial dispute much earlier than it did. There are several other possibilities, some of which might have placed Mr Benton in a worse position than he found himself in 1998. [42] Mr Benton has failed to establish to the required standard that the Defendant's negligence has caused him a quantifiable loss. This Court, in the absence of evidence, is left to speculate.The appeal to the High Court[23] Mr Benton appealed to the High Court and in the judgment now under challenge Heath J allowed the appeal and entered judgment in favour of Mr Benton in the sum of $37,800 together with interest and costs. [24] Heath J referred to the following passage from the speech of Lord Hoffman in South Australia Asset Management v York Montague Ltd [1997] AC 191 at 214:I think that one can to some extent generalise the principle upon which this response depends. It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them. The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong. (Lord Hoffmann's emphasis)[25] In accordance with what he saw as the approach of Lord Hoffman, Heath J began by defining the scope of Mr Poulgrain's duty and the extent to which it was breached. He saw the duty as extending to the provision of advice to Mr and Mrs Benton that any agreement into which they entered would need to comply with s21 of the Matrimonial Property Act, that the Court has the discretion to set aside such an agreement even if the formalities in s21 are complied with and that they should not proceed further without obtaining independent legal advice as contemplated by s21.[26] It will be recalled that Judge Wolff addressed the case primarily by reference to the line of argument that if appropriate advice had been taken, Mrs Benton would have signed a s21 agreement under which the Pauanui property would have been declared to be Mr Benton's separate property. Heath J preferred to take a different approach based largely, at least as he saw it, on the speech of Lord Hoffman inSouth Australia Asset Management Corporation v York Montague Ltd.[68] With respect, I disagree with the approach to the question of causation adopted by the learned District Court Judge. Applying the principle encapsulated in the citation from Lord Hoffmann's speech in South Australia Asset Management (see para [53] above) the solicitors are responsible for the consequences of their failure to advise Mr Benton correctly. Only losses which would have occurred even if the advice had been correct which are not claimable. [69] The approach which I have adopted makes it unnecessary to consider whether Mrs Benton would or would not have signed an agreement under s21 of the Act classifying the Pauanui property as the separate property of Mr Benton. The question in this case is the extent of the loss which is to be attributed to the solicitors' failure to advise competently. The question is whether Mrs Benton would or would not, after receiving independent and competent legal advice, have signed a s21 agreement is beside the point in a factual inquiry of that kind. [70] With respect to the learned District Court Judge it is my view that he erred in focusing on what the effect of proper advice might have been (para [40] of his judgment) rather than considering whether Mr Benton would have proceeded with the transaction to acquire 71% of the Pauanui property if negligent advice had not been given.[27] He concluded that if Mr Benton been advised correctly by Mr Poulgrain he would not have proceeded with the acquisition of Mrs Benton's share in the Pauanui property. He took the view that Mr Benton had suffered a loss associated with this acquisition and that he was entitled to damages accordingly. [28] Heath J thought that it was unnecessary to determine the status of the Pauanui house:[74] My approach also makes it unnecessary to consider whether the Mt Albert property was or was not the matrimonial home at the time when Mr and Mrs Benton saw Mr Poulgrain in February 1985. The need for advice as to the effect and implications of the Act arises from the reality that Mr and Mrs Benton would occupy only the Pauanui property upon acquisition of Mrs Benton's 71% interest in Pauanui by Mr Benton and the sale of the Mt Albert property to Mr and Mrs Smith. After thatcontemporaneous transaction the Pauanui property was the only property which could have had the status of matrimonial home under the Act.[29] He also thought the losses associated with the sale of the Mt Albert house was irrelevant:[76] Mr Benton's claim for $90,000 is premised on recovery, not only to compensate for the acquisition of the 71% interest in the Pauanui property but also for retention of the Mt Albert property. Such an approach inevitably carries elements of double counting. Although the Mt Albert property was sold, Mr Benton had the use of funds from that property and was able to use those funds as he saw fit. In part, they were used for matrimonial purposes. Mr Benton derived benefits from the increase in value of the Pauanui property as a result. In my view, he is not entitled to damages to compensate him for his decision to sell the Mt Albert property.[30] The key passages in Heath J's judgment as to quantum are as follows:[77] Mr Benton paid to Mrs Benton the sum of $49,700 in 1985. In effect, that payment of $49,700 effectively acquired an additional 21% interest (ie it increased his beneficial entitlement from 29% to 50%) in the Pauanui property. [78] The Pauanui property increased in value from $70,000 in 1985 to $180,000 in 1996. That increase in value arose from two main factors. The first was the use of proceeds of sale of the Mt Albert property by Mr Benton. The second was the effect of market forces. Generally, such increases in value ought to be shared between spouses equally. But, to permit that in whole, in this case, ignores the fact that Mr Benton intended to acquire the whole of the Pauanui property in 1985 through purchasing Mrs Benton's 71% interest. Accordingly, he must, in my view, be compensated by the solicitors for the difference in value between the 21% interest in 1985 and 1996. The value of the 21% interest in 1985 was $14,700. The 21% interest was worth $37,800 in 1996. The difference between those two sums is $23,100. [79] The total loss of Mr Benton must therefore be assessed by adding the value of the 21% interest in 1985 to the increase in value of that interest which he also lost. By adding the sums of [$14,700] and $23,100 the total loss equals $37,800.[31] Judgment was entered in favour of Mr Benton in the sum of $37,800 plus interest and costs.Application for leave to appeal and cross-appeal[32] Mr Benton then applied for leave to appeal to this Court.[33] In a judgment delivered on 26 May 2003, Chambers J, granted leave for Mr Benton to appeal and for Miller and Poulgrain to cross-appeal. [34] Because there is dispute as to the permissible scope of the cross-appeal we set out the relevant passage of the judgment of Chambers J:[9] Mr Benton claims that Heath J's approach to damages was incorrect. He seeks leave to appeal to the Court of Appeal. The solicitors oppose the application. If, however, I grant it, then they seek leave to cross- appeal on the same issue. Mr Scotter, for Mr Benton, advised that he would not oppose such cross-application.[35] The dispute as to the scope of the cross-appeal arises because Miller and Poulgrain have sought to advance argument not merely as to quantification of damages but also as to causation. Mr Benton objects to this on the basis that it was clear (though not explicit) that Chambers J intended to limit the leave granted to appeal and cross-appeal to the question of Heath J's approach to damages. So Mr Benton contends that that Miller and Poulgrain should not be permitted to widen the scope of argument to encompass causation issues. [36] On the approach which we prefer, this issue does not arise for decision. But given the close interconnection between questions of causation and damages we are not inclined to take a restrictive view of the scope of the arguments which are available to Miller and Poulgrain.Argument for Mr Benton[37] Mr Scotter, for Mr Benton, submitted that by 1985 Mr Benton was already entitled to a 50% share of the Pauanui property because it was the matrimonial home. So he said that Heath J's calculations failed to address the fact that Mr Benton spent $49,700 on what was plainly the erroneous premise that he only had a 21% interest in the property. He also made the point that Heath J's focus on the value of a 21% interest in the property (the difference between the 71% interest which Mr Benton thought he was acquiring and the 50% interest he at all times owned, ie both before and after the transactions) was illogical.[38] Mr Scotter also complained that the damages awarded by Heath J do not reflect the loss of Mr Benton's chance to enter into an arrangement that would have given effect to Mr and Mrs Benton's intentions at the time. He said that this was a "classic" loss of a chance case. Mr Benton lost a "real" or "substantial" chance to preserve Pauanui as his separate property; this being the result he had in mind when he instructed Mr Poulgrain on the two conveyancing transactions. Alternatively, Mr Benton lost the chance to preserve what Mr Scotter claimed to have been the 1985 status quo – Mt Albert as his separate property plus a 50% interest in Pauanui as the matrimonial home. [39] Mr Scotter argued that Mrs Benton almost certainly would have signed a s21 agreement declaring the Pauanui property to be the separate property of Mr Benton. To suggest that she would not have done so is to contend that her intentions in 1985 were fraudulent. Mr Scotter said that she could not have intended to sell out her interest in Pauanui, use the proceeds for her own benefit and the benefit of her children, and still expect to receive a 50% interest in the Pauanui property in the event of separation.Argument for Miller and Poulgrain[40] Mr Robertson, for Miller and Poulgrain, also challenged the approach of Heath J. His essential point was that Mr Benton had not proved any loss because no evidence was called as to which of many scenarios might have occurred if Mr Poulgrain had given Mr Benton appropriate advice in 1985. [41] To establish the loss claimed of $90,000, Mr Benton needed to show that Mrs Benton, properly advised, would have signed an agreement classifying the Pauanui property as Mr Benton's separate property. But Judge Wolff had concluded that this was not established on the evidence. He rejected the argument that Mr Benton could, in the alternative, rely on loss of a chance principles. He said that what was involved here was squarely a causation issue rather than simply a matter of calculating damages.[42] Generally Mr Robertson very much relied on the argument that the Mt Albert property remained, as at 1985, the matrimonial home and that the Pauanui property was Mrs Benton's separate property. He claimed that, on these assumptions, there was no detriment to Mr Benton in entering into the transactions.General principles[43] There are two key areas of uncertainty. The first relates to the actual Matrimonial Property Act entitlements of Mr and Mrs Benton in 1985 and the second to the way in which the events would have panned out had Mr and Mrs Benton received appropriate advice from Mr Poulgrain. [44] Uncertainty can be addressed by in two ways; either on what is often described as an "all or nothing basis" by reference to the balance of probabilities standard of proof, or, alternatively, on a proportionate (or loss of a chance) basis according to the Judge's assessment of the probabilities. The law as to when Judges should take all or nothing or a loss of a chance approaches to causation and damages is, to say the least, difficult. The cases are not easy to reconcile. Where reconciliation is attempted the distinctions drawn are often artificial. The whole topic is discussed usefully in David Hamer's article "'Chance Would Be A Fine Thing': Proof Of Causation And Quantum In An Unpredictable World" [1999] Melbourne University Law Review 557. The relevant New Zealand cases are collected in Ben Smith, "Loss Of A Chance" (1999) 29 Victoria University of Wellington Law Review 225. The point is also discussed in Todd, Law of Torts(3rd ed, 2001) at 996. [45] The true status in 1985 of the Mt Albert and Pauanui properties (which we will discuss shortly in a little more detail) is uncertain but, to use a phrase often deployed in this context, their status is a matter of historical fact and can and must be determined in accordance with the balance of probabilities standard of proof. Loss of a chance principles have no role to play in this part of the exercise. Authorities which support this approach are Davies v Taylor [1974] AC 207 especially at 212-213 per Lord Reid, Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 639 per Brennan and Dawson JJ and 642-643 per Deane, Gaudron and McHugh JJ[46] In contra-distinction, what would have happened if Mr Poulgrain had given appropriate advice to Mr and Mrs Benton is not a matter of historical fact (given that such advice was not given). Rather it involves counter-factual analysis – that is the asking and answering of the hypothetical question. [47] In cases which turn on how a plaintiff would have acted in the absence of a breach of duty, the all or nothing approach is usually (although not always, seeDavies v Taylor, supra) applicable. So if the plaintiff shows that it is more likely than not that he or she would have acted in a particular way, the Court acts on the assumption that this is the way the plaintiff would have acted. If this is not established as being more likely than not, then the Court acts on the basis that the plaintiff would not have acted in that particular way. This approach can be justified in various ways depending on the context. For instance: 1. A plaintiff who cannot show that he or she would have acted differently if the defendant had not been negligent might therefore not be able to establish relevant reliance on the defendant. Authority for this approach can be found in Sykes v Midland Bank Executors Co Ltd [1971] 1 QB 113 and to some extent in the judgments delivered in Gates v The City Mutual Life Assurance Society Ltd (1986) 160 CLR 1. 2. A plaintiff who cannot show that he or she would have acted differently in the absence of a breach of duty by the defendant has failed to show that the defendant has caused any loss, see for instance the judgment of Brennan J inNorwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd (1984) 157 CLR 149 at 171-172 and Sellars v Adelaide Petroleum NL (1994) 179 CLR 332. These rationales are applicable in cases where the plaintiff has not established on the balance of probabilities that he would have acted differently in the absence of the defendant's breach of duty. They are not of such obvious cogency in cases in which the plaintiff has shown, but only by a narrow margin, that he or she would have acted differently but then seeks full damages on an all or nothing basis. There is no doubt, however, that the all or nothing approach is usually applied in both situations,see for instance the example given by Sir John Donaldson MR in Hotson v East Berkshire Health Authority [1987] 1 AC 750 at 762:Take the case of a solicitor who fails to advise his client that the property which he is about to purchase is subject to a right of way. If the client had been told, he would or would not have gone ahead with the transaction. That would have been his choice, not the choice of fate. Ascertaining what his choice would have been is possible whereas the prospects for a cure of a particular patient are sometimes not. The damages recoverable by the solicitor's client would therefore be all or nothing depending on whether he could prove, on the balance of probabilities that he would have abandoned the transaction.[48] The approach we propose to take is that adopted in a broadly similar context in Allied Maples Group Ltd v Simmons and Simmons [1995] 4 All ER 907. There Stuart-Smith LJ explained the law in these terms (at 914):In these circumstances, where the plaintiffs' loss depends upon the actions of an independent third party, it is necessary to consider as a matter of law what it is necessary to establish as a matter of causation, and where causation ends and quantification of damage begins. (1) What has to be proved to establish a causal link between the negligence of the defendants and the loss sustained by the plaintiffs depends in the first instance on whether the negligence consists in some positive act or misfeasance, or an omission or non-feasance. In the former case, the question of causation is one of historical fact. The court has to determine on the balance of probability whether the defendant's act, for example the careless driving, caused the plaintiff's loss consisting of his broken leg. Once established on the balance of probability, that fact is taken as true and the plaintiff recovers his damage in full. There is no discount because the judge considers that the balance is only just tipped in favour of the plaintiff; and the plaintiff gets nothing if he fails to establish that it is more likely than not that the accident resulted in the injury. [] (2) If the defendant's negligence consists of an omission, for example to provide proper equipment, or to give proper instructions or advice, causation depends, not upon a question of historical fact, but on the answer to the hypothetical question, what would the plaintiff have done if the equipment had been provided or the instruction or advice given. This can only be a matter of inference to be determined from all the circumstances. Although the question is a hypothetical one, it is well established that the plaintiff must prove on the balance of probability that he would have taken action to obtain the benefit or avoid the risk. But again, if he does establish that, there is no discount because the balance is only just tipped in his favour. [](3) In many cases the plaintiff's loss depends on the hypothetical action of a third party, either in addition to action by the plaintiff, as in this case, or independently of it. In such a case does the plaintiff have to prove on the balance of probability, as Mr Jackson submits, that the third party would have acted so as to confer the benefit or avoid the risk to the plaintiff, or can the plaintiff succeed provided he shows that he had a substantial chance rather than a speculative one, the evaluation of the substantial chance being a question of quantification of damages? Although there is not a great deal of authority, and none in the Court of Appeal, relating to solicitors failing to give advice which is directly in point, I have no doubt that Mr Jackson's submission is wrong and the second alternative is correct.[49] Applying this approach to the case at hand, uncertainties as to how Mr Benton would have acted had proper advice been given are to be dealt with on an all or nothing basis and decided on the balance of probabilities while uncertainties as to Mrs Benton's conduct fall to be determined on loss of a chance principles. [50] In making a loss of chance assessment, broad judgments are called for. At one end of the spectrum, very low probabilities are unlikely to be reflected in an award of damages. So if the chance of avoiding an adverse event is as low as say one in ten, a Court will probably reject the claim rather than fix damages at ten percent of the cost to the plaintiff associated with those adverse events. At the other end of the spectrum that approach is sometimes, but not always, adopted. So a 90 percent chance of avoiding an adverse event may result either in complete recovery of all losses associated with that adverse event (on the theory that the chance of not avoiding those losses was sufficiently speculative to be able to be ignored) or alternatively a discount of ten percent for contingencies. [51] When assessing damages, there are limits to the hypothesising which is appropriate. If Mrs Benton had refused to sign a s21 agreement, this may have precipitated a breakdown in the marriage and there are countless possible permutations as to what might then have happened. We see no utility in exploring those possibilities. If the case falls to be determined on the basis that Mr Benton disadvantaged himself in terms of matrimonial property entitlements in 1985, the time for that assessment is in 1985 and, for the purposes of this assessment, it is sufficient to compare Mr Benton's entitlements as they were in 1985 prior to the property transactions with his position as a result of those transactions (includingclosely connected down-stream consequences such as dissipation by Mrs Benton of the funds she received which she and Mr Benton regarded as hers to spend). [52] At this point we can start to draw the threads together: 1. To establish any entitlement to damages associated with the payment of $90,000 Mr Benton had to prove on the balance of probabilities that if properly advised as to the Matrimonial Property Act he would have been prepared to enter into transactions along the lines actually entered into (but with the Pauanui house property declared to be his separate property). 2. To establish any entitlement to damages on the alternative basis advanced at trial (detriment associated with the 1985 transaction), Mr Benton had to prove on the balance of probabilities that he would not have entered into the 1985 transactions unless they were accompanied by a s21 agreement. 3. Assuming Mr Benton could surmount the evidential hurdles just specified then: (i) If he could establish to a high degree of probability that Mrs Benton would have signed a s21 agreement he would be entitled to damages of $90,000 less perhaps a discount reflecting the risk that a Court might not have upheld such an agreement. (ii) If he could not establish this to a high degree of probability but could show that there was a reasonable likelihood of Mrs Benton signing such an agreement, then loss of a chance principles would require an award of damages proportionate to the likelihood of a s21 agreement having been signed, less perhaps an adjustment for the possibility that the agreement might not have been upheld. So if there was an even chance that Mrs Benton would have signed such an agreement, loss of a chance principles produce an award of $45,000 (less perhaps a discount for the risk of the agreement being set aside), with interestfrom the date of the settlement of matrimonial property dispute. This, however, is subject to the point made in para [53] below. (iii) Mr Benton was also entitled to an assessment of the extent to which he would have been better off if the 1985 property transactions had not been entered into. This depends on the entitlements of Mr and Mrs Benton under the Matrimonial Property Act as at 1985, which, for reasons indicated requires judicial assessment of actual entitlements as opposed to a loss of a chance principles. The application of the all or nothing approach to the second issue is plainly warranted by Sir John Donaldson's example in Hotson and the passage we have cited from Allied Maples. The first issue, however, has a more hypothetical feel and we recognise that there might be scope for argument that loss of a chance principles are appropriate. As we have noted in para [47] above, the all or nothing approach in this situation is not universally taken. On the peculiar facts of this case, however, there would be no difference in eventual result if loss of a chance principles were applied to the first issue. For this reason we see no need to explore this issue in any more detail and will proceed on the basis indicated, ie that the first issue falls to be determined on an all or nothing basis. [53] There is one unusual feature to the case. Here damages might be calculated either on the hypothesis that a s21 agreement would or may have been entered into or on the detriment suffered by Mr Benton in entering into imprudent property transactions. So, if adjustment is made for the possibility that Mrs Benton might not have signed the s21 agreement, that adjustment must also factor in the loss suffered by Mr Benton by reason of entering into the property transactions.Why we differ from the approach taken in the District Court[54] We see a number of problems with the approach taken by Judge Wolff. [55] Although there are comments in the judgment which might be thought to indicate a view as to the 1985 entitlements of Mr and Mrs Benton under theMatrimonial Property Act, there was no analysis. So, the reality is that there were no findings on these issues. [56] These entitlements were at least relevant to whether Mrs Benton would have signed a s21 agreement in 1985 if the parties were properly advised. It was not possible for the solicitors who gave evidence before Judge Wolff to be confident as to those entitlements. But if the issue had been raised in 1985, it would have been reasonably clear which of the Mt Albert or Pauanui properties was the matrimonial home. So the pre-existing entitlements under the Matrimonial Property Act were the logical starting point for any assessment as to how Mrs Benton would have responded to correct advice. Further, to the extent to which the Judge based his conclusions on Mr Benton's concessions in evidence, we think that there may well have been some unfairness, in part because Mr Benton's concessions started in response to an unfortunate statement from the bench and, perhaps more importantly, because Mr Benton could not sensibly speak for Mrs Benton, a point which he himself made several times. [57] The Judge seems to have regarded "speculative" as a synonym for "uncertain" whereas, in the context of loss of a chance principles, a possibility is only able to be ignored as "speculative" if it is at the unlikely end of the probability spectrum. We cannot see how the likelihood of Mrs Benton signing a s21 agreement could be seen as being so speculative as not to warrant even a low award of damages on a loss of a chance basis. [58] As well there was no analysis by Judge Wolff whether Mr Benton suffered any detriment when he entered into the agreement. Had the Judge analysed the pre- existing entitlements of the parties he would have seen, we think, that there was a significant detriment.Why we differ from the approach taken in the High Court[59] The speech of Lord Hoffman in the South Australian Management case on which Heath J relied is addressed to the liability of valuers for damages associated with negligent valuations in a context of falling property values. This is wellremoved from the issues in this case. So we do not regard what Lord Hoffmann said as rendering irrelevant the possibility or probability of Mrs Benton having been prepared, in 1985, to sign a s21 agreement if correct advice had been given. [60] We also think that Heath J was wrong in his detriment assessment in that he did not start with the parties' entitlements under the Act as they were prior to the property transactions. That seems to us to be the sensible starting point. It follows that we agree with Mr Scotter that there was no particular logic in assessing damages by reference to s 21% interest in the Pauanui. Heath J approached the case on the basis that Mr Benton thought he was buying a 71% interest in the Pauanui house but only acquired a 50% interest and that his loss could thus be calculated by reference to 21% of the value of the house. However, on the assumption that Mr Benton already had (by 1985) a 50% interest in the Pauanui house, the entire payment he made to Mrs Benton ($49,700) was unnecessary. [61] Heath J's award of $37,800 represents a 21% interest in the value of the Pauanui house ($180,000) as at 1998. Given this, the arithmetical exercises carried out in paras [78] and [79] of his judgment are unnecessarily complex.Limitation issues[62] We have recorded that Miller and Poulgrain did not pursue the pleaded limitation defence. No limitation issue was raised in the High Court or before us. Accordingly we propose to leave the possibility of a limitation argument on one side. [63] We make this comment not because we wish to suggest that we think that a limitation defence was open: it is just that we do not wish to be thought to have overlooked the question.Mr and Mrs Benton's matrimonial property entitlements in 1985[64] As already indicated, neither Judge Wolff nor Heath J made definitive findings as to the 1985 matrimonial property status of the key items of property in issue in this case, the Mt Albert house and the Pauanui house.[65] Against that background we have to reach our own conclusions or return the case to the District Court for rehearing; an option which has no attraction for us given the costs implications. [66] The Mount Albert property was owned by Mr Benton prior to marriage. It was therefore his separate property unless it could still be regarded as the matrimonial home. At the time that Mr and Mrs Benton consulted Mr Poulgrain, they had not lived in the Mt Albert house for some two years. Initially the move to Pauanui was on a trial basis, and perhaps the Mt Albert house may have retained its matrimonial home status for some time. It is, however, difficult to see that this status would have persisted as long as the two years during which the Smiths lived in it under a tenancy arrangement and Mr and Mrs Benton were living in the Pauanui house. It is important to recognise that Mrs Benton did not give evidence and thus the only evidence as to when the "trial" ended and the move to Pauanui became permanent was that of Mr Benton. His evidence suggests that the decision to live permanently in Pauanui was made in either 1983 or 1984. Although the Pauanui house (which had started life as a bach) was not ideal for long term residence and Mr and Mrs Benton did consider the possibility of buying another property, it is difficult to see how the Mt Albert house could have retain its matrimonial home status once Mr and Mrs Benton had decided that they would remain in Pauanui. Further, by the time Mr and Mrs Benton visited Mr Poulgrain in February 1985, the decision to make the Pauanui property their home must, presumably, have been made. [67] On that basis, we are satisfied, on the balance of probabilities that the Mt Albert house was Mr Benton's separate property. [68] Mrs Benton acquired the Pauanui house before marriage. It was thus, prima facie, her separate property. But it was acquired just before marriage and may perhaps have been acquired for the common use and benefit of Mr and Mrs Benton, in which case it would have been matrimonial property from the outset. Mr Benton plainly spent time and money on the property and this would have, in any event, given him a claim to a half share in any increase in its value. Further, and most importantly, given that by the time the Bentons saw Mr Poulgrain, they had beenliving in the Pauanui home for two years, it would appear to have attained matrimonial home status. [69] We are satisfied, again on the balance of probabilities, that in 1985 the Pauanui house was matrimonial property as the matrimonial home of Mr and Mrs Benton.Would proper advice have resulted in a s21 agreement declaring the Pauanui house Mr Benton's separate property?[70] It seems to us to be highly likely, although far from certain, that the result of proper advice from Mr Poulgrain would have been the execution of s21 agreement declaring the Pauanui property the separate property of Mr Benton. [71] This issue depends in part on whether Mr Benton, if properly advised, would have been prepared to go along with transactions along the lines of those actually entered into but with the Pauanui property declared to be his separate property. In accordance with what we have earlier indicated we will deal with this question on an all or nothing basis, in line with the authorities already discussed. [72] Judge Wolff was uncertain as to how Mr Benton would have responded to proper advice (see para [25] of his judgment) but made no finding either way. On the approach favoured by Heath J no finding was necessary. [73] Interestingly Mr Benton never said explicitly in his evidence that he would have entered into such a transaction. However, given the nature of his case, and the drift of his evidence as a whole, particularly as to the extent to which he and Mrs Benton kept their affairs separate, such a contention might be thought to be implicit in his evidence. He was not challenged on this point in cross-examination. We recognise that on our analysis of the matrimonial property entitlements of the parties, such a transaction would have been slightly disadvantageous to Mr Benton as compared to his pre-existing situation. But, on the other hand, it would have been in accord with the way in which Mr and Mrs Benton thought about property issues. Further, withdrawing from what was proposed would perhaps have riskedprecipitating a crisis in the marriage. On that basis, we are satisfied on the balance of probabilities that Mr Benton, if properly advised, would have been prepared to enter into a transaction along the lines of what occurred but with the Pauanui property declared to be his separate property. [74] Uncertainties as to how Mrs Benton would have behaved are to be dealt with on loss of a chance principles. [75] Such an agreement would have left Mrs Benton no worse off than our assessment of her entitlements, as at 1985, under the Matrimonial Property Act. If, as we have held, the Mt Albert property was the separate property of Mr Benton and the Pauanui property was matrimonial property, she would have been receiving in effect $49,700 for her 50% interest in the Pauanui home. This interest was worth $35,000. More than that, the transaction facilitated the purchase by the Smiths of the house they were living in. So on purely economic and pragmatic grounds, a s21 agreement as postulated by Mr Benton would appear to have been sensible. Perhaps as importantly such an agreement would also appear to have been consistent with the actual expectations of Mr and Mrs Benton as to how their financial affairs were to be regulated. [76] The reservations by Judge Wolff whether such an agreement would have resulted were based in part on what he took to be the concession by Mr Benton that such an agreement may not have been entered into. For reasons already indicated, however, the concessions on this point by Mr Benton started off unhappily with a question from the Judge which was based on a false premise. Further, while we accept that Mr Benton's opinion as to what Mr Benton may have done may be of some relevance, it is not a controlling consideration, particularly in a context in which Mrs Benton would have been acting on legal advice. As is apparent from what we have said already, we are also troubled by the fact that the Judge did not make a formal assessment of the matrimonial property status of the two properties. [77] Against that background we think it is far more likely than not that a s21 agreement declaring the Pauanui house to have been Mr Benton's separate property would have been entered into if Mr Poulgrain had given appropriate advice. Wethink it unlikely that such an agreement would have been subsequently set aside. If the case fell to be determined solely by reference to loss of a chance principles we would allow one quarter for the contingencies that Mrs Benton might not have signed a s21 agreement and that such an agreement, if entered into, might have been set aside. This would produce a damages figure of $67,500 as at December 1998.Was Mr Benton worse off by reason of entering into the 1985 transactions?[78] Mr Benton's unchallenged evidence was that, properly advised, he would not have entered into the 1985 transactions without a s21 agreement. Heath J found accordingly and we agree with that conclusion. [79] It is apparent from what we have said that Mr Benton was worse off by reason of entering into these transactions. [80] On the basis of our findings that the Mt Albert house was his separate property and the Pauanui house was matrimonial property, his relevant entitlements in 1985 were as follows: Mt Albert house $70,000 Pauanui house (half share) $35,000 Total $105,000 In contradistinction Mrs Benton's entitlement (representing a half interest in the Pauanui house) was $35,000. [81] The loss suffered by Mr Benton is perhaps most easily seen as the correlative of the advantages derived by Mrs Benton. Under the deal as struck, Mrs Benton maintained a 50% interest in the Pauanui house ($35,000), the value of which was soon to be enhanced as Mr Benton spent the balance of the money he received from the sale of the Mt Albert house (some $21,500) along with other money on the property. She also received $49,700. Although matrimonial property, she treated this money as hers to spend and, prior to separation, dissipated the relevant funds(after the loan to the Smiths was repaid). On this basis she received around $95,000 as opposed to an entitlement to $35,000 and Mr Benton was correspondingly $60,000 (approximately) worse off. [82] At trial the argument of Mr Benton on the detriment approach (which was an alternative to the primary claim for $90,000) was that he should receive an award of $49,700 being what he unnecessarily paid for the outstanding interest in the Pauanui house. As will become apparent, the result of this case is the same whether the relevant figure is treated as $49,700 or $60,000 and we are content to deal with the case using the $49,700 figure which was put forward on behalf of Mr Benton. So if the case fell to be determined on a detriment basis, we would fix damages, as at May 1985, of $49,700. In saying this, we note that this money started off as Mr Benton's separate property (being the proceeds of the sale of the Mt Albert house which we regard as his separate property) and was then, in effect, dissipated by Mrs Benton and in this way slipped out of the matrimonial property net. So accordingly the appropriate figure is $49,700 and not half of that figure.An appropriate approach to damages[83] Loss of a chance principles produce a damages figure of $67,500, assessed as at 1998. A detriment approach produces a $49,700 assessment as at 1985. With interest at any rate likely to be awarded under the Judicature Act from 1985, this detriment assessment would produce a total figure, as at 1998, which would exceed the $90,000 which Mr Benton paid to Mrs Benton in December of that year. The extent of that excess would depend, of course, upon the rate of interest applied. At the full 11% annual rate then permitted under the Judicature Act, the detriment assessment (including interest) would be in the order of $120,000 as at December 1998. If 7.5% per annum was chosen as the interest rate the detriment assessment (including interest) would be around $100,000. [84] There are various ways of approaching quantification of the final award. Perhaps the simplest is to use the detriment assessment (which produces the larger 1998 figure) as the primary approach but to treat the $90,000 payment made in December 2000 as capping the award. If the transactions implemented byMr Poulgrain had resulted in the Pauanui home being Mr Benton's separate property, Mr Benton would have had no grounds for complaint even though he may have been better off (particularly allowing for the time value of money) if he had never entered into the 1985 transactions. [85] Assessing damages is not a precise science. We recognise that we could have carried out more refined exercises (perhaps building in taxation considerations or tracking over time the comparative benefits to Mr Benton of an award of $49,700 (on a detriment basis) with simple interest from 1985 as against an awards of $67,500 (on a loss of a chance basis) with simple interest from 1998 and $90,000 (on our composite approach) with interest from 1998. But there comes a point when analysis must stop. In making our decision it is appropriate for us recognise that all uncertainties in this case are, ultimately, the result of the negligence of Miller and Poulgrain. [86] In the circumstances we think that justice is fairly done with an award to Mr Benton of damages of $90,000 together with interest from December 1998.Disposition[87] Hammond J has reached the same result as us although by a different route. [88] Accordingly, the appeal is allowed and the cross-appeal dismissed. There is judgment for Mr Benton in the sum of $90,000 together with interest at the rate of 7.5% per annum from 1 December 1998 down to the date of this judgment. In this Court Mr Benton is entitled to costs of $6,000 together with disbursements (including the reasonable travelling and accommodation expenses of counsel) to be fixed by the Registrar. If any issue arises as to costs in the High Court and District Count, the parties may revert to the High Court.HAMMOND J[89] The measure and calculation of damages in solicitor's negligence cases is notoriously difficult. A leading authority on the law of damages has said, "solicitorscan be negligent in a variety of ways as the cases on damages show; indeed cases against solicitors are becoming legend, thereby making it difficult to deal with them in an organised fashion and to categorise them satisfactorily." (McGregor, Damages, 17th ed, para 29-007). [90] In this instance I agree with Glazebrook J and William Young J that this appeal should be allowed; that the appellants should have an award of $90,000 damages, together with interest at the rate of 7.5% per annum from 1 December 1998 down to the date of judgment; and that the cross appeal should be dismissed. However, I arrive at that conclusion by a somewhat different route from them. The burden of this short judgment is to set out my reasoning. [91] I need not address the facts, which are outlined in William Young J's judgment. There is however one preliminary matter on which I do wish to add a comment, which I think is of importance in negligence actions generally, and which is important in this case. That is the relationship between the pleadings and damages in a negligence case. [92] I begin with the appropriate approach to a negligence action. In Wilson & Horton Ltd v The Attorney-General [1997] 2 NZLR 513, a five Judge Court of this Court said:On the established view, negligence has three elements: a duty to take reasonable care owed at the time of the act of negligence by the defendant to the plaintiff; a breach of that duty by the defendant; and resultant damage which is both causally connected with the defendant's breach and not (in law) too remote. Nevertheless, as Lord Pearson observed in Home Office v Dorset Yacht Co. Ltd. [1970] AC 1004 at p.1052, whilst the traditional tripartite approach is often convenient for purposes of exposition " it is only an analysis and should not eliminate consideration of the tort of negligence as a whole" (per Hammond J at 519).[93] In this case, para 12 of Mr Benton's statement of claim provided:The defendant owed a duty of care to the plaintiff to advise him on the relevant law, particularly: a. As to the provisions of the Matrimonial Property Act 1976 and, in particular, s21.b. That in the absence of an agreement under s21 of the Act the agreement between the plaintiff and Gwenda would not be binding on Gwenda. c. That notwithstanding the conveyance in favour of the plaintiff and the payment by the plaintiff to Gwenda, the property would continue to be the matrimonial home of the parties and a property in which, as a matter of law, Gwenda would continue to be entitled to a 50% interest.[94] In the District Court, Judge Wolff said:[15] At the hearing, the experts were agreed and Counsel for the solicitors effectively conceded that by not inquiring more deeply into the background and giving the necessary matrimonial property advice, the solicitors standard of conduct had slipped below that required of a reasonably competent solicitor. [16] In case the effective concession that the solicitors actions were a breach of duty was not a complete admission, I record that I have no hesitation in finding the solicitors did breach their duty to Mr Benton when they failed to make enquiry and to give that important and necessary advice. (Emphasis added.)[95] In the High Court, Heath J rightly recognised that the cause of action arises only when a plaintiff has suffered loss in respect of which a duty was owed. The Judge therefore, correctly, set about on the evidence available to him, determining the breach or breaches of duty. After traversing the relevant facts he held:[62] Given that the information available to Mr Poulgrain necessarily raised concerns with regard to the need for documentation under s21 of the Act I am of the view that Mr Poulgrain was negligent; [a] in failing to advise Mr and Mrs Benton that their interests may diverge and that any agreement into which they entered would need to comply with s21 of the Act; and [b] in failing to advise them about the discretion of the Court to set aside such an agreement (even if the formalities required by s21 had been followed); and [c] in failing to advise them that they should not proceed further without obtaining independent advice as contemplated by s21. As a matter of law, Mr Poulgrain was not required to advise Mr Benton on the advantages or disadvantages of signing a s21 agreement. While he could have proffered gratuitous advice to assist the parties in identifying issues on which they could each seek independent advice he would, in my view, have been foolish to go further.[96] Importantly in my view, Heath J also found that: "Mr Benton was seeking reassurance that he would become the owner of the Pauanui property in the sense that there would be no further claims made by Mrs Benton upon it" (para [56]). There is no challenge to that factual finding. [97] Against that background, I turn now to the law, which is well enough established. Before a plaintiff is entitled to any damages, it follows from what I have already said, that there must have been a breach of whatever duty was established; that the loss flowed therefrom; and that the loss was foreseeable. It is elementary that all of this must be proved by a plaintiff to ground the action (Wilsher v Essex Area Health Authority [1988] AC 1074 (HL)). There must be a causal connection between the breach of duty established, and the loss alleged (which will not be able to be made out, for example, if the loss would have occurred in any event). This is quite independently of any question of causation. [98] The importance of this link was emphasised in South Australia Assess Management Corporation v York Montague Limited [1997] AC 191 (HL). There it was pointed out that the central questions to determine are, first, against what kind of loss did the defendant assume responsibility to safeguard the plaintiff? And second, was the loss as claimed by the plaintiff within the scope of that assumed responsibility? [99] This means that in a solicitor's negligence case, those principles in turn require a consideration of the terms of the relevant retainer. There is an important distinction to be drawn between a duty to provide information, and a duty to give advice. If it is the former, then liability is limited to those losses properly attributable to the information being inaccurate. On the other hand, if the duty was to advise, liability is much wider and extends to all the foreseeable consequences of reliance upon the advice. [100] Turning to the measure of damages, the fundamental principle of any remedy of compensatory damages – whether in contract or in tort – is to put the person whose rights had been found to have been vindicated in the same position, so far as money can do so, as if those rights had been observed. (Livingstone v RawyardsCoal Company [1880] 5 App. Cas. 25 at 39 per Lord Blackburn.) This so called "indemnity" rule is then usually further refined as follows: the object becomes, in tort, to put the plaintiff in the position that person would have been in had the tort not been committed (Liesbosch, Dredger v S S Edison [1933] AC 449); in contract, the object is to put the plaintiff in the position that person would have been in had the contract been performed according to its terms. [101] Hence, in an age in which liability for negligence by a solicitor may be found in either contract or tort, what a Court has to do is to put the plaintiff, so far as money can do it, in the same position he or she would have been in had the relevant term or duty of care been discharged, either by compensating for benefits of which the client has been deprived or the non-pecuniary losses suffered, or the expenses or liabilities that have been incurred as a result. The assessment will normally be as at the date of breach. [102] To return to the facts of this case, it seems to me incontrovertible but that this was an "advice" case. The client did not go to the solicitor just for information. The client went to the solicitor for advice on a conveyancing transaction in which he expected to get – and the solicitor was well aware of this, on Heath J's finding – freehold title to a particular property. In fact there was a very distinct blot on Mr Benton's acquisition and ownership of this land, about which his solicitor did not tell him. There is no contest between the parties that Mr Poulgrain ought to have told Mr Benton that, absent a s21 agreement under the Matrimonial Property Act, this blot on his ownership could be disastrous. To get rid of this encumbrance, Mr Benton had no alternative but to pay out $90,000. The situation is little different from a case in which a solicitor attends to a conveyancing transaction, and then there is found to have been an encumbrance (say, for instance, an easement) on a title which the solicitors did not advise a client about, and which then has to be "bought out". [103] But then it is said, oh yes, but there is the possibility that Mrs Benton would not have been prepared to enter into a s21 agreement. And that, apparently, converts this case (for damages purposes) into a loss of chance case. It is correct that a great many solicitor's negligence cases, as to damages, turn on "what if" questions. Thatis one reason why they are so contentious, and so frequently go an appeal. However, I take the view (and this is my point of departure from the judgment of my colleagues) that it is more in accord with fundamental principle, and with the facts of this instance, to say simply that there was a direct form of loss which flowed from the failure of the solicitor to, in any wise, give the relevant advice. At the relevant time, there was a present, if inchoate claim, by Mrs Benton. And but for the failure to give the advice, this loss would not have arisen. The measure of damages is simply what it cost to remove the blot from the clean title which Mr Benton thought he was getting. That sum was $90,000. And Mr Benton should have interest on that sum, since he has stood out of that money since the date that he paid it over.Solicitors: Harkness Henry & Co, Hamilton for Appellant Schieff Angland, Auckland for Respondent