A Fingal-based forestry operator's $6.5 million damages claim against Hobart law firm Page Seager has been dismissed in the Supreme Court.
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Fingal Pastoral Pty Ltd claimed it was given impugned legal advice about forestry agreements entered into by FPPL with Gunns Plantations and Wesley Vale Engineering in 2009 to establish plantations on FPPL's property at Mathinna Road in Fingal.
The agreements, dated January 12 and 13, 2009, granted the companies the right to establish, maintain and harvest a eucalypt plantation on the land for a term of 15 years for the payment of an annual fee of $400 per hectare, adjustable annually for CPI.
Four years later, on September 25, 2012, Gunns Plantations and Wesley Vale Engineering appointed voluntary administrators and both went into liquidation in 2013.
Forestry rights agreements with Wesley Vale Engineering and Gunns Plantations were terminated in July 2014 and March 2016, respectfully.
As a result, FPPL removed young trees from 382.3 hectares and resolved to retain the remaining plantation trees on the balance 1300.1 hectares which will be grown to maturity to be harvested in 2025.
FPPL intends to remove the stumps of the harvested trees and return the land to pasture for grazing.
FPPL claimed that, if it had not been for legal advice provided by Page Seager partner David Shelley in 2008, it would not have entered into the forestry rights agreements.
It claimed an entitlement to damages exceeding $6.5 million, representing the difference, calculated at present value, between the position the company will be in after all the trees are harvested and the property is returned to grazing and the position it would be in had the agreements not been entered into.
The claim was dismissed by Justice Robert Pearce on Thursday who said he was not satisfied the causes of actions pleaded by FPPL were made out.
"Mr Shelley was not retained, and had no duty, to give general advice about the risk associated with the liquidation of the companies. It was not part of his retainer or duty to identify and advise about 'all possible risks'," Justice Pearce said.
Justice Pearce said emails by FPPL's managing director Richard Talbot to Mr Shelly made it clear FPPL's risk, in the event of liquidation, of disclaimer and bad debt was understood.
"In the course of his evidence, Mr Talbot asserted no knowledge of what happens if a company 'goes bust', even though when he used that term in the course of his correspondence," Justice Pearce said.
"The extent of his claimed ignorance of the effect of liquidation did not ring true."
Justice Pearce ordered the claim be dismissed and said there would a judgement for the defendant.