SUPREME COURT OF QUEENSLAND CITATION: Interchase Corporation Limited v ACN 010 087 573 P/L & Ors [2000] QSC 013 PARTIES: INTERCHASE CORPORATION LIMITED (Plaintiff) v ACN 010 087 573 PTY LTD (First Defendant) and MICHAEL GEORGE TIDBOLD (Second Defendant) and GROSVENOR HILL (QUEENSLAND) PTY LTD LIMITED [FORMERLY KNOWN AS HILLIER PARKER (QUEENSLAND) PTY LTD] (Third Defendant) and BRIAN MOFFAT WAGHORN (Fourth Defendant) FILE NO: 520 of 1994 DIVISION: Trial Division DELIVERED ON: 8 February 2000 DELIVERED AT: Brisbane HEARING 27-30 April; 4-7, 10-14, 17-20, 24-28, 31 May; 1-4 June; DATES: 9-13, 16-20 August; 14-16 September 1999. JUDGE: White J ORDERS: Indicative orders are 1. Judgment for the plaintiff against the first defendant in the sum of $12.994 million plus an interest component to be calculated and interest from 30 June 1993 to judgment at 6 per cent per annum. 2. Judgment for the plaintiff against the third defendant in the sum of $12.031 million plus an interest component to be calculated and interest from 30 June 1993 to judgment at 6 per cent per annum. 3. The plaintiff’s action against the fourth defendant be dismissed. 4. The third and fourth defendants’ cross-claim against the first and second defendants be dismissed. 2 CATCHWORDS: Average of two valuations to fix price – duty of care to non-retaining party – standard of care of valuers – breach – causation of loss – damages – assessment of chance – personal liability of employee valuer – contributory negligence – Limitation of Actions Act 1974 – joint or several tortfeasors – interest. Corporations (Investigations and Management) Act 1989 Limitation of Actions Act 1974 Trade Practices Act 1974 ANZ Executors and Trustee Company Limited v Quintex Australia Limited [1991] 2 Qd R 360 Ausminco Mining Equipment Suppliers Pty Ltd v Liwood Pty Ltd Butterworths Judgments BC 9707431 of 19 December 1997 Arenson v Arenson [1977] AC 405 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd (1995) 2 All ER 769 Bryan v Maloney (1994-1995) 182 CLR 609 Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529 Calzaturificio Zenith Pty Ltd (in liquidation) v NSW Leather and Trading Pty Ltd [1970] VR 605 Corisand Investment Ltd v Druce & Co [1978] EGLR 86 Duke Group (in liq) v Pilmer (1999) 31 ACSR 213 Edgeworth Construction Ltd v NDL Lea & Associates Ltd [1993] 3 SCR 206 Gardiner v Henderson & Lahey [1988] 1 Qd R 125 Haseldine v CA Daw & Son Ltd (1941) 2 KB 343 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 Hill v Van Erp (1995-1997) 188 CLR 159 Holt v Cox (1997) 15 ACLC 645 Jenkins v Betham (1855) 15 CB 168 Legal & General Life of Australia Ltd v A Hudson Pty Ltd [1985] 1 NSWLR 314 Lewisham Investment Partnership Ltd v Morgan [1997] 2 EGLR 150 Leigh and Sillivan Ltd v Aliakmon Shipping Co Ltd [1986 1 AC 785 Lion Nathan Ltd v C-C Bottlers Ltd [1996] 1 WLR 1438 Mansini v Martin (CA No 10560 of 1997 unreported decision of 7 August 1998) Meth v Moore (1982) 44 ALR 409 Mount Banking Corporation v Brian Cooper & Co (1992) 2 EGLR 142 Perre v Apand Pty Ltd (1999) 73 ALJR 1190 3 Phelps v Hillingdon London Borough Council [1999] 1 WLR 500 Piening v Wanless (1968) CLR 498 (on appeal from Wanless v Piening (1967) 68 SR (NSW) 249) Rogers v Whittaker (1992) 175 CLR 479 Sandell v Porter (1966) 115 CLR 66 Serisier Investments Pty Ltd v English [1989] 1 Qd R 678 Singer & Frielander Ltd v John D Wood & Co [1977] 2 EGLR 84 South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191 Subaida v Hargreaves [1993] 2 EGLR 170 Sutcliffe v Thackrah (1974) AC 727 Voli v Inglewood Shire Council (1963) 110 CLR 75 White v Jones [1995] 2 AC 207 Williams v Natural Life Ltd [1998] 1 WLR 830 COUNSEL: Mr DJS Jackson QC, with him Mr J McKenna and Mr K Barlow, for the plaintiff Mr J McKenna appeared as required for the first defendant in the course of the trial during which time he did not appear for the plaintiff Mr CEK Hampson QC, with him Mr D Fraser QC and Mr T Quinn, for the third and fourth defendants SOLICITORS: Allen Allen & Hemsley for the plaintiff Ebsworth & Ebsworth for the third and fourth defendants Allen Allen & Hemsley for the first and second defendants in the cross-claim by the third and fourth defendants TABLE OF CONTENTS Overview of the action......................................................................................................4 The parties, associated corporations and entities and some concepts .................................6 The issues and some preliminary matters..........................................................................8 The Development Agreement .........................................................................................13 Relevant terms of the Development Agreement ..............................................................14 The claim against Hillier Parker and Mr Waghorn ..........................................................18 Background events .........................................................................................................19 Hillier Parker’s early involvement ..................................................................................20 Mr Richardson’s first valuation report: 16 October 1986 ...............................................24 Mr Richardson’s second valuation report: 10 June 1987 ................................................26 The Myer Centre Adelaide..............................................................................................27 Mr Richardson’s work on The Myer Centre Adelaide.....................................................28 Mr Waghorn...................................................................................................................29 Mr Waghorn’s work on The Myer Centre Adelaide ........................................................30 Mr Waghorn’s Myer Centre Brisbane valuation letter 20 November 1987 ......................32 4 Mr Waghorn’s completion of The Myer Centre Adelaide valuation ................................38 The Myer Centre Brisbane valuation...............................................................................46 The letters of retainer......................................................................................................56 Mr Waghorn’s work on the completion valuation ...........................................................61 The Hillier Parker letter of valuation of 17 May 1988.....................................................69 The Colliers letter of valuation of 18 May 1988..............................................................70 The response to the letters of valuation ...........................................................................70 Preparation of valuation reports......................................................................................71 The valuation reports......................................................................................................73 Were the letters/reports Completion Date Valuations? ....................................................74 Disclaimer ......................................................................................................................78 Duty of care....................................................................................................................78 Personal liability of Mr Waghorn....................................................................................80 Standard of care..............................................................................................................80 Breach – Mr Waghorn’s method of valuation .................................................................87 Other valuations ...........................................................................................................108 The “correct” valuation of The Myer Centre.................................................................115 Contributory negligence ...............................................................................................118 Damages – no loss........................................................................................................119 Damages - recoverability ..............................................................................................119 Scheme of arrangement ................................................................................................148 Limitation of Actions Act 1974......................................................................................152 Recovery against the separate defendants .....................................................................153 Interest .........................................................................................................................153 Orders ..........................................................................................................................154 WHITE J: Overview of the action [1] By 7 May 1987 the plaintiff (“Interchase”), incorporated in September 1986 as Banway Pty Limited (subsequently Banway Limited), was the registered proprietor of land of about 1.275 hectares bounded by the Queen Street Mall to the west and Albert and Elizabeth Streets to the north and east respectively in the central business district of Brisbane (“CBD”). The land was being developed as a large retail shopping complex containing a multi-level Myer Store as anchor tenant, specialty stores on three levels, an underground multi-level car park, a bus tunnel and interchange, cinemas, taverns and