McCullough Robertson negligence claim stumbles as court demands more from plaintiff's pleadings
A Queensland court struck out parts of a professional negligence claim against law firm McCullough Robertson, ruling the pleaded losses lacked the necessary supporting detail.
In PQ Management Pty Ltd & Ors v McCullough Robertson [2026] QSC 149, delivered 24 June 2026, the Supreme Court of Queensland struck out seven paragraphs of the claim brought by PQ Management Pty Ltd (PQM) and its two directors, Donald Ison and Gregory Eldridge. The court permitted the plaintiffs to file a revised version.
PQM sued McCullough Robertson for negligence, breach of retainer, and breach of fiduciary duty arising from advice the firm gave during a shareholder dispute with Leviston involving Treated Waste Agencies Pty Ltd (TWA). PQM held 142,102 shares in TWA, and Leviston held the remaining 60,901 shares, under a 2017 agreement that gave PQM the right to buy Leviston's shares at a price tied to the company's earnings. McCullough Robertson prepared the documents PQM used to try to exercise that buying right in March 2020.
Leviston disputed the attempt and later won in the Federal Court, where a judge ruled that PQM had not validly exercised its right to buy the shares, found that the share transfer PQM carried out was invalid, and identified a breach of rules under the Corporations Act that protect shareholders from unfair treatment.
PQM claimed that McCullough Robertson's alleged negligence cost it the opportunity to buy Leviston's shares more cheaply, exposed it to the costs of the Federal Court case, and led to an order requiring it to pay some of Leviston's legal costs. McCullough Robertson applied to strike out these loss claims, arguing they failed to identify an actual purchase price, failed to specify the proportion of the opportunity PQM claimed to have lost, and failed to explain how the firm's alleged failures led to the claimed losses.
The court agreed, finding that PQM's claim set out several conflicting figures for what it said it would have paid for Leviston's shares – including a range of $169,000 to $240,000 in one part of the claim, a separate figure of less than $479,020 in another, and a figure of $280,000 elsewhere – without ever specifying what price Leviston would actually have accepted, or what share of the lost opportunity PQM was claiming.
The court also found the claim did not explain what the plaintiffs would have done had they received different advice, or how Leviston would likely have responded, and said this gap made that part of the claim deficient. It noted that Leviston's $480,000 settlement offer covered several disputes beyond the shares, undermining PQM's assumption that Leviston would have sold the shares for a specific price.
The court distinguished between the standard a court applies when deciding causation at trial and what a party must set out at the claim stage, saying a plaintiff must set out the specific facts connecting an alleged failure to the loss claimed, not simply assert that the failure caused the loss.
The court struck out the affected paragraphs, granted the plaintiffs leave to file a revised claim, and ordered them to pay McCullough Robertson's costs of the application.
