In the recent case of McLennan v Clapham & Ors [2019] ACTSC 1, the Supreme Court of the Australian Capital Territory considers a claim alleging solicitor’s negligence in the context of a residential conveyance, and the approach the court will take in assessing the damages.
Background
On 16 June 2009, the plaintiffs purchased a Crown lease for a property in the suburb of Griffith (Griffith property) for $1,375,000. The firm of solicitors who acted for the plaintiffs on the purchase (Solicitors) were the defendants to the proceeding.
The plaintiffs’ complaint against the solicitors centred around the fact that the Griffith property had been insulated with loose-fill asbestos material, which the ACT Government had purported to remove by the time the plaintiffs purchased the Griffith property. The plaintiffs alleged the Solicitors failed to properly advise them about the risks and consequences associated with buying such a property, and if they had received such advice, they would not have purchased it.
In May 2014, the plaintiffs confirmed the continued presence of loose-fill asbestos in the Griffith property by obtaining an environmental survey. In light of the asbestos contamination, the ACT Government repurchased the lease from the plaintiffs on 30 June 2015 for $1.876 million. The house was subsequently demolished, and the plaintiffs had the first right to repurchase the land. They did so on 15 November 2015 for the price of $1.21 million.
The plaintiffs then built a new house on the site of the Griffith property, living in rental accommodation throughout the period when the demolition of the existing house and the construction of a new one occurred. The plaintiffs spent approximately $1.386 million building the new house and as at August 2017, the new premises were valued at around $2.45 million.
Claim against the Solicitors
The plaintiffs brought a professional negligence claim against the Solicitors. Relevantly, they alleged the Solicitors breached their duty of care to the plaintiffs by failing to advise them prior to the execution of the contract of sale:
- of the full terms of the contract of sale and the documents contained therein; and
- that asbestos had been present in the Griffith property in the form of loose-fill asbestos.
The plaintiffs collectively claimed approximately $1.83 million in damages, which they alleged were caused by the professional negligence of the Solicitors. Those damages included:
- a claim for the costs of relocating when the plaintiffs moved out in October 2014 as well as rental and holding costs;
- the costs of building a new house on the site of the Griffith property once it had been demolished;
- $150,000 for the disappointment and distress the plaintiffs allegedly suffered; and
- $800,000 in lost income for the first plaintiff, who alleges that she took time away from other employment to deal with the asbestos contamination and oversee the construction of the new house.
