tax losses on my dead investemet, page-17

This is an example of No Transaction:
basically would you have bought shares if you knew the company was trading insolvent. Or would you have invested in something else. If you knew Forge was trading whilst insovent you would not have invested.

Verbose but I trust it will giving meaning. It if accepted will allow for more losses to be claimed.

Example:
Adelaide Bank v DTS
http://www.landers.com.au/Publications/Insurance/Publicationdetail/tabid/332/ArticleID/243/Default.aspx

In assessing damages, the Court considered whether or not each loan would have been advanced, but for the negligent valuation. It then assessed damages for each category of case depending on whether there would have been "no transaction" or a "different transaction". It concluded that in four of the five cases, had the bank offered the lesser sum, the borrower would probably have gone elsewhere for funds. In these "no transaction" cases, the Court awarded damages based on all losses sustained in making the loans.

In assessing damages, the Court considered whether or not each loan would have been advanced, but for the negligent valuation. It then assessed damages for each category of case depending on whether there would have been "no transaction" or a "different transaction". It concluded that in four of the five cases, had the bank offered the lesser sum, the borrower would probably have gone elsewhere for funds. In these "no transaction" cases, the Court awarded damages based on all losses sustained in making the loans.

The Court was satisfied, however, that one of the loans would have proceeded although a lesser sum would have been on offer. There was no evidence of the borrower’s purpose, but the Court considered it relevant that the property had no existing mortgage and the borrower initially only drew down about 80% of the loan and the balance two months later. It inferred that had the full amount of the ‘notional loan’ been available, the borrower would have been prepared to take what was on offer.

In calculating damages in the “different transaction” case it appears the court compared the bank’s position, having advanced funds based upon the negligent valuation, with the position it would have been in, assuming the “different transaction” occurred.

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This is another example of the approach taken by a court in calculating damages in valuer negligence cases, based on whether there would have been "no transaction" or a "different transaction". The manner in which the Court determined whether each loan fell within the “no transaction” or the “different transaction” category is the interesting part of the judgment.

It is of assistance to valuers and their insurers that, even in the absence of any evidence from the valuer in this case, the Court assiduously went about the task of assessing whether the damages claimed were reasonable, based upon the “no transaction” case contended for by the bank, or whether the “different transaction” case was more appropriate.

The Court appears to have endorsed the view that two valuers, acting reasonably and carefully, can differ by 10% in their valuations, referring to an earlier decision of the NSW Court of Appeal, Adwell Holdings Pty Ltd v Mark Smith[1] which approved a general rule of thumb for determining negligence in valuation cases, known as the “Bracket Test”. A plaintiff may still prove, however, that the valuation was negligent despite it falling within the 10% range.

It is not clear from the judgment just what role Roberts played in the valuation process, but as demonstrated by the dismissal of the claim against him, a valuer, or someone involved in the valuation process, will not necessarily owe a duty of care to anyone who relies on their valuation. The principles relating to the recovery of pure economic loss are applicable and something more than mere foreseeability of the potential for loss to someone if the valuation is performed negligently is required.