Attwells v White

Supreme Court of NSW|2021-11-26|Before: Lonergan J

) I Griscti (Second Defendant)

Solicitors: L.C. Muriniti & Associates (Plaintiff) Gilchrist Connell Solicitors (First Defendant) Mills Oakley Lawyers (Second Defendant) File Number(s): 2017/382284 Publication restriction: Nil

Judgment

On 18 December 2017 a statement of claim was filed in the District Court of NSW by Noel Attwells ("Noel"), claiming damages against Mr White, a solicitor, and Mr Kelly SC, a barrister, for alleged negligent advice. The advice, given between February 2011 and December 2015 in the case of Mr White, and May 2011 and July 2014 in the case of Mr Kelly, was to the effect that there were reasonable prospects of recovering damages from Jackson Lalic Lawyers ("JLL"), because of the negligent conduct of that firm in prior proceedings.
For the reasons that follow, I have determined the case against Mr White and Mr Kelly fails because first, neither of them breached their duty of care to Noel, (nor to the predecessor plaintiffs, Gregory Attwells and Dr Lord), second, there were no "misrepresentations" as alleged or at all, and third, nothing the defendants did or failed to do caused the loss alleged. The claims made in the statement of claim all fail and there will be verdicts for the defendants.

Factual background

The factual and procedural background is necessary to set out in some detail to understand the issues contested in this Court. I have taken this factual background from the affidavit evidence, and where challenged or met with contradictory evidence, I have made my finding of the evidence I accept or prefer in relation to any such issue.

Debt to ANZ

Noel's brother, Gregory Attwells ("Gregory") and Gregory's then partner Dr Barbara Lord ("Dr Lord") owned properties in Forbes New South Wales. Gregory was also director and shareholder of Willbidgee Beef Pty Ltd ("Willbidgee") and Feedlot Systems Australia Pty Ltd ("Feedlot"). Willbidgee had acquired water rights and Feedlot was developing a patent relating to the feeding of beef stock.
Gregory and Dr Lord, together with Willbidgee, mortgaged the Forbes properties and water license to the ANZ Bank in 2006. Gregory and Dr Lord entered into a guarantee limited to $1.5 million plus some identified further amounts payable under that guarantee.
In 2008 ANZ and receivers Marsden and Kirk commenced proceedings to recover the money loaned to Gregory, Dr Lord and Willbidgee, and also to obtain possession of the properties, the water licence and other equipment.
In April 2010, JLL were engaged as solicitors for Gregory, Dr Lord and the relevant companies. Robert Harper SC was engaged as Senior Counsel on an unspecified date to appear at the hearing listed on 15 June 2010.

The professionally disgraceful events of 15 June 2010

At the start of the hearing on 15 June 2010, counsel for ANZ tendered a certificate of indebtedness under the personal guarantees in the sum of $1,856,122.28. This figure included the full amount of the guarantee together with interest and enforcement costs.
In his affidavit of 13 April 2013 Gregory sets out that day's events as follows: "15 June 2010 - Before the Court [14] I was present in Court at 10am on 15 June 2010 when the Proceedings were called on for hearing before the Honourable Justice Rein. A Mr Newton appeared for the Receivers and ANZ. Mr Faris Shehabi (Mr Shehabi) announced the appearance of Mr Roger Harper SC (Mr Harper) for myself, Jane and Wilbidgee. [15] I had been introduced to Mr Shehabi by Mr Peter Jackson of Jackson Lalic on or about 15 April 2010. At that time Mr Jackson said to me words to the effect, "May I introduce Faris Shehabi? Faris is employed by us and will be assisting me in the conduct of your matter". [16] I first met Mr Harper at 8am on Monday 15 June 2010 when Mr Shehabi took Jane and I to a conference in counsel's chambers. That conference lasted about an hour. [17] A short while after the Proceedings were called on for hearing, Justice Rein said to Mr Shehabi words to the effect: "I have received nothing from you Mr Shehabi. There was an order made for the provision of submissions that hasn't been complied with." Mr Shehabi replied: "Unfortunately I can't be of assistance." His Honour replied "Yes you can, you can tell me why you haven't done it. Why should you be heard in this matter? You haven't complied with orders made by the Court." Mr Shehabi replied: "I have no submissions to make." Mr Shehabi then sat down. [19] …. [20] Approximately 15 to 20 minutes after he sat down, Mr Shehabi turned around and handed me a handwritten note. The note contained words to the effect, "l cannot run this case myself and I don't want to be responsible for what has happened here this morning." I do not have a copy of that note. [20] During the course of the hearing before Justice Rein on 15 June 2010, Mr Newton tendered a number of documents, including a certificate of indebtedness in the sum of $1,856,122.28, which became Exhibit C in the Proceedings (the Certificate). …. [24] Mr Harper arrived at Court at approximately 11:45am on 15 June 2010. [25] Later that morning, the Court granted us a short adjournment. [26] During the short adjournment, Mr Harper took Jane and I to a room outside the Court and said words to the effect, "I am going to try to settle this matter. What will you accept" I said, "$1,750,000,00 and six months to pay. The equipment list also needs to be corrected." The equipment list to which I referred was a list of equipment to be delivered up to the Receivers. I had discussed the topic of errors in the list prepared by the Receivers with Mr Shehabi on previous occasions and with he and Mr Harper at our conference at 8am on 15 June 2010. [27] After our conversation with Mr Harper in the room outside the Court, Mr Harper left the room for about 10 minutes. He then returned and said to Jane and me, "I can get you the $1,750,000.00, inclusive of costs, but cannot get you the six months." l replied, "Things are not easy in the finance world at the moment. I need time to get it sorted." Mr Harper then said, "Okay, leave it with me, I will be back." [28] Mr Harper then left the room again. Upon his return he said: "I have improved it a bit, but I cannot get you six months. What if I can get it to the end of November 2010?" Jane and I both replied "Okay." He left the room and returned shortly after. [29] When Mr Harper returned he said, "I have got you $1,750,000 and until 19 November to pay. Is that OK?" Jane and I both replied, "OK, if that is the best we can do". I thought that the $1,750,000 was better than the $1,856 million which had been talked about in Court and the date he mentioned in November should allow us time to borrow the $1,750 million and bring our problems with the ANZ to an end. Mr Harper left the room again. By then, it was after lunch time. [30] At about 2.30pm, we all went back into Court and Mr Harper said to Justice Rein words to the effect, "We have reached a settlement. We now need to reduce it to writing." As I understood what was said, Justice Rein said the parties could come back the next morning for orders to be made to give effect to what had been agreed. [31] Mr Shehabi was present during each of the above conversations and when we all went back into Court at 2.30pm. [32] There was no mention of a judgment against Jane and me for $3.3 million at any stage. I believed, as a result of what Mr Harper had said to me in the presence of Mr Shehabi, that we had settled for $1,750,000, all up, and Jane and I had until 19 November 2010 to arrange finance and pay that amount. When we came out of Court shortly after 2.30pm, Mr Harper spoke to Mr Shehabi and then left by himself. I did not see him at any time later in the day. 15 June 2010 - at the offices of Jackson Lalic [33] After 2:30pm on 15 June 2010 Jane and I headed back to Jackson Lalic's offices in Clarence Street. It was raining. We went by taxi. Mr Shehabi walked. At some point when we were in the cab, Mr Shehabi telephoned me on my mobile and said words to the effect, "There is no point you coming to the office straight away. We have to prepare a document to record the settlement. Why don't you have some lunch and come back in a few hours time. It should be ready by then". [34] At approximately 5:00pm on 15th June 2010 Jane and I went to Jackson Lalic's offices. We were then asked by Mr Shehabi to come back in an hour or so. We returned at approximately 6:30pm. Mr Shehabi sat Jane and me in an office and said words to the effect, "We are waiting for the final version of the draft orders to come through from Kemp Strang." I said "Why is it taking so long?" He said, "They had to make some changes to the document." Mr Shehabi did not give Jane or me a copy of the document he was talking about, nor did we discuss any aspect of the settlement at that time. [35] Some time after 7:00pm Mr Shehabi brought some papers into the room where Jane and I were sitting. By this time Jane and I were cold, somewhat distressed and very tired. I had been up since 5:00am that day, checking documents before attending the conference with Mr Harper at 8am. It had been a stressful day and it was now past 7:00pm. [36] When Mr Shehabi handed a copies of the document to each of Jane and I he said words to the effect, "Have a look through these, they include a list of the equipment." He did not go through the documents with us. Nor did he offer an explanation of what the documents said. When I was looking at my copy, Jane said words to the effect, "This list of equipment is not right." I looked at it and said, "Yes, the list is wrong. Some of the equipment on the list does not belong to the Company." Mr Shehabi said, "We have been through this before. It is not negotiable." I saw the figure of $3,399,347 on the first page and said, 'What is this. $3.3 million? We agreed to settle for $1.75 million?" Mr Shehabi words to the effect, "Yes, you are settling for $1.75 million. Kemp Strang is not going to move on the document. It is final. Nonnegotiable. It has to be signed to hand up in Court tomorrow morning." l said, "But what if it is wrong?" He said, "That does not make any difference. If you default in payment of the $1.75 million by 19 November 2010, it will not make any difference to anything. If you pay the $1,750,000.00 it all goes away. You have to sign the document. We have to hand it up in Court tomorrow to give effect to the settlement". I said, "I see, if that is how it is, we have to sign. This has been a dreadful day." Jane and I then signed the document …"
Dr Lord prepared a typewritten document dated 8 December 2010 which was provided to Mr White in December 2010 shortly after her initial discussions with him: "…. In June 2010 in correspondence of 8.6.2010 in the week immediately prior to the listed court case ANZ v Attwells and Ors, an offer was made by the ANZ bank via Marsden for a payment of $1.75 million by the 30.9.2010 to be made by us to settle the debt due to the ANZ. This offer was refused as the time period to settle was too short, the Charge had converted to a fixed charge, and the Schedule to the proposed consent orders (the list of charged property) was still incorrect. The matter was listed for hearing in the Supreme Court for 3 days commencing 15 June 2010. On 15.6.2010 the matter went to court at 10am (my first ever experience of court). Neither greg nor I had met with Robert Harper until 9am on the morning of the court case in his rooms. During the morning of the case Robert Harper, appointed to represent us did not arrive at court until well after proceedings had started and Kaunitz for ANZ had presented most of his case. After a short period of appearance by Harper court was adjourned for a break. During this break negotiations were started between the ANZ legal team and Harper for ourselves over a figure and time for settlement. After a lengthy time of interactions, a figure $1.75 million, and time for settlement - until 19.11.10, were verbally agreed upon. We now needed to make up a document of agreement. The Judge was advised after the lunch adjournment that a settlement had been reached and an agreement would be made up through the afternoon to be presented signed in the morning, the second day of the case, for orders to be made. The barrister did not offer to help in making up this document though I found out months later that he had been employed at a set daily rate which we would be charged for; including the second day for his short appearance. It was not till late in the afternoon that we were informed by Jackson Lalic, our solicitors that a document for agreement had been forwarded by Kemp Strang, solicitors for the ANZ. This document was to turn out to be the same content (apart from a settlement date) as that forwarded and rejected on 8.6.10. Over the next hours changes were made to addresses and some privacy component to the 'to be completed' agreement. I made vigorous mention that once again the Scheduled property was incorrect in so many ways and the charge was fixed. There was no appreciation by our attending solicitor who did nothing to correct the errors but who employed an attitude that we needed to get the document completed that evening. He said it would not become a problem as we aimed to payout the bank by 19.11.10, and the agreement needed to be signed to present to the Judge, who had been informed of the out of court settlement on the first day, in the morning when the barrister would appear again briefly to be present for the Orders. The consent orders were different to the settlement reached earlier in the day in that there were now terms attached. It was my understanding at court that $1.75 was the agreed settlement figure and it had to be paid by 19 November 2010. Now in the proposed written consent orders there were added penalty clauses and still the attachments of the list of equipment under the charge were completely incorrect. The attitude from our lawyers seemed to be something to the effect of we have told the court the matter is settled, this is what Kemp Strang want, so you have to sign it. It seemed irrelevant that the terms were not as initially agreed and that the list of equipment attached to the charge was completely incorrect. …. The agreement made up later that day was tendered by Kemp Strang, ANZ solicitors, and was amended only superficially. There was no concern shown to the incorrectness of the Schedule list. It was assumed by us that we would be able to fulfil the payment by 19.11.10 by property sale or investment, but we also had deep concern at the implications if that payment was not made. There appeared no genuine dedication to our cause, to protect our future, but a concern to get the matter completed, signed up and to court for Orders …." (emphasis added)
Dr Lord outlined in her 2 December 2020 affidavit and her short oral evidence at trial that her recollection of events was not as good as it was in 2010. She was not cross-examined on any of the assertions in her 2010 account. I accept her account as reliable and contemporaneous.
In her affidavit of 14 May 2013 Dr Lord provided additional closer focus on the events of the evening of 15 June 2010: "[15] At about 7:30pm Faris Shehabi handed to us a document entitled "Consent Orders". The document comprised a typed agreement and attachments. Attached to the document was a list of equipment. This is the document that mainly attracted my attention because it was wrong in many respects. It was, as far as I understood, a copy of the equipment list prepared by the receivers and previously sent by ANZ's lawyers to our lawyers but rejected by Greg. I said to Greg in front of Faris Shehabi: "This is not right. It includes equipment that is owned by me personally and other equipment which is under lease". Greg replied "Yes, that's right. I have amended this list previously and ANZ have been advised. It needs to be fixed". [16] Faris Shehabi took little interest in our comments and replied "We need to get this document signed and back to Kemp Strang (ANZ's lawyers) tonight so it can be handed up tomorrow morning. In any event it won't become a problem if you pay the $1.75 million by 19 November. Kemp Strang will not agree to any changes".
Both Gregory and Dr Lord in their respective 2013 affidavits deposed to the fact that they were not given the option of either consenting to judgment for the lesser amount of $1.856 million, (being the extent of their guarantee), or continuing to fight the case in search of a better outcome, or to seek further advice from their counsel Mr Harper.
I interpolate here that there was never any evidence at all by Mr Shehabi filed in these proceedings, (nor as I understand it, in the case against JLL), nor was there any explanation given as to why there was no affidavit or any evidence from him or Mr Harper in these proceedings. The accounts of Gregory and Dr Lord as to what happened on 15 and 16 June 2010 thus remain effectively uncontested. Obviously Gregory could not be cross-examined given that he died in 2014, but Dr Lord was available, gave evidence and was not challenged. Indeed she was not cross-examined at all by the solicitor for the plaintiff Mr Newell, appearing as solicitor advocate, and her statement was tendered in the plaintiff's case as an annexure to the affidavit of Noel Attwells of 12 May 2020.
The Consent Orders were made by Rein J on 16 June 2010. The effect of this was that at the conclusion of the ANZ proceedings, Gregory and Dr Lord had a judgment against them personally for an amount of $3,399,347.67, notwithstanding that ANZ had acknowledged to the Court the day before that this personal liability was in fact limited to $1.856 million.
Despite attempts to secure funding, Gregory and Dr Lord were unable to pay the $1.750 million by 19 November 2010.

Gregory and Dr Lord legal advice sought about what to do

In late November 2010 Gregory and Dr Lord made contact with Mr White, solicitor.
On 7 December 2010 Gregory and Dr Lord had a conference with Mr White at his office. Gregory provided the Consent Orders, transcript, pleadings and affidavits in the ANZ proceedings, plus valuations for the relevant properties. Amongst other things, Mr White said to Gregory "Didn't anyone raise the issue of the limit to the guarantee of about $1.75 million with you?" to which Gregory answered "No".
On 10 December 2010, Gregory and Mr White attended a conference with Mark Speakman SC. Mr Speakman advised in conference that having regard to the Consent Orders, JLL may be liable in negligence, that the proceedings against JLL would have reasonable prospects of success and that if such proceedings were commenced, it may cause ANZ not to take any recovery action.
An application was made to set aside the Consent Orders. This was heard and dismissed by Pembroke J in February 2011 on the basis that the Consent Orders comprised a present debt, not a penalty: Attwells v Marsden [2011] NSWSC 38.
An appeal was filed but abandoned on 1 May 2011 (shortly before the hearing), apparently due to the inability to pay for counsel, so the correctness or otherwise of the decision of Pembroke J was not further explored, but Mr Kelly when retained, considered the decision and took the view that it was correct.
In early May 2011, Mr Kelly was contacted by Mr White to see if he was available to advise on an urgent basis given Mr Speakman was no longer available.
On 18 May 2011, a brief to advise was sent to Mr Kelly seeking advice on whether to commence proceedings against JLL. Mr Kelly had at that time been a barrister for 34 years, 18 of those as Senior Counsel.
On 24 May 2011, Mr Kelly and Mr White conferred about the JLL proceedings. Mr White said that Mr Kelly advised him that JLL appeared to have been negligent in preparing the brief to Mr Harper, the preparations for the hearing, their advice to Gregory and Dr Lord before and after the hearing, and their settlement advice. Mr Kelly also advised that damages could include the costs paid by Gregory and Dr Lord, as well as the difference between the limit of their guarantees and the final judgment sum. Mr White recollects that Mr Kelly also said there is a possible claim against Mr Harper but that he did not "have sufficient information at this stage to conclusively advise about that".
Mr Kelly described the advice he gave in this conference slightly differently, but to similar effect, in his affidavit sworn 5 August 2020: "[17] During the course of the First Conference, Mr White and I had a wide-ranging discussion about the facts referred to in the Brief, as well as the Demands and the Judgment. During that discussion, our attention turned to the reasons for judgment of Justice Pembroke in Attwells v Marsden [2011] NSWSC 38, …. In that conversation, I said words to the effect, "I think Pembroke J is undoubtedly correct when he says Order 1 (in the Judgment) created an immediate and enforceable debt. What value did the clients get out of the opportunity to refinance at $1.75 million?" Mr White said words to the effect, "None. They say the $3.3 million judgment debt spoiled their chances." I also said words to the effect, "What has happened to the properties and the water rights? Mr White said words to the effect, "The properties are on the market, but I don't think they have been sold." [18] Later in the First Conference, Mr White and I spoke about the sequence of events which took place on 15 June 2010. In that context, I said words to the effect, ''On the facts we have been given, I think breach of retainer and negligence are relatively straight forward. The performance of Jackson Lalic on the day was a professional disgrace. The interesting questions are reliance and damages. Putting aside wasted costs and the problem with the equipment list, the question is whether you have any prospect of recovering the difference between the judgment debt of $3.3 million and the amount the bank certified to be payable under the guarantees. I think that the entry of judgment for an amount over and above the amount proved to be owing has to be taken into account in any loss analysis. What it does is create a real and enforceable debt, which did not previously exist. Comparing before and after, the clients ended up owing about $1.5 million more at the end of the day than they did at the beginning. Did they get anything of value in return for incurring an additional $-1.5 million debt?" Mr White said words to the effect, "Our instructions they did not. The clients say refinance was impossible". [19] On the question of reliance. I said words to the effect, "What would they have done had the solicitor or senior counsel advised them that they could have refused to settle on the terms presented by the bank? Would they have preferred judgment against them for the $1.8 million rather than the $3.3 million plus a chance to get out from under for $1.75 million by refinancing? Mr White said words to the effect, "The clients are adamant. They say they would never have consented to judgment against themselves for $3.3 million, if they had known they could have gone back to court and had judgment entered against them for the amount claimed. What Greg is really angry about is being fitted up with the whole of the company debt when the liability under his personal guarantee was capped. Offers along those lines had been made a few weeks before the hearing and they were rejected."
Mr Kelly and Mr White agreed that rather than provide a detailed opinion, Mr Kelly would draft a statement of claim and provide a brief note on prospects of success as a more cost-effective approach.
Between 24 and 27 May 2011, Mr White and Mr Kelly exchanged correspondence discussing quantification of damages, the contents of the draft statement of claim and evidence.
On 26 May 2011, Mr Kelly sent an email to Mr White attaching a written Opinion and draft statement of claim. The Opinion stated: "I refer to my brief in the above matter and to our recent conference. Without reciting the facts and materials briefed, I attach a draft statement of claim which, in my opinion, is supported by the evidence which has been made available to me. In my opinion, Mr Attwells and Dr Lord have a sound claim for damages against JLL based on the evidence that I have seen. If a detailed analysis of the issues and the evidence is required, I would be happy to oblige."
On 30 May 2011 Gregory and Dr Lord instructed Mr White to commence proceedings against JLL.
On 3 June 2011 Mr White sent Gregory and Dr Lord a conditional costs agreement with a covering letter, noting their instructions to proceed with the claim following senior counsel's advice.
The conditional costs agreement was signed by Gregory and Dr Lord on 28 June 2011. It stated that Mr White will only charge professional fees and charges upon the successful outcome of the matter. "Successful outcome" was defined in the agreement: "The successful outcome of the matter as agreed with you is: 1. an award or judgment in your favour; 2. a settlement in your favour with or without an order for costs, or; 3. an arbitration or mediation in your favour."
On 6 June 2011 Mr White filed the statement of claim in the proceedings against JLL which was verified by Gregory and Dr Lord. Relevantly, it pleaded that JLL was retained in April 2010 and that JLL did not exercise reasonable skill, care and diligence in and about discharging the retainer. The particulars of negligence and damage are set out as follows: "[13] In breach of the implied term of the retainer and in breach of duty, the defendant was negligent in the above giving the advice. Particulars of Negligence a. Advising the plaintiffs to consent to a judgment against themselves, in favour of the ANZ bank, in the sum of $3,399,347.67, when the plaintiffs did not have a liability to the ANZ bank for $3,399,347.67 or anything like that sum. b. Advising the plaintiffs to consent to a judgment against themselves, in favour of the ANZ bank, in the sum of $3,399,347.67, when the claims against them in the proceedings, even if wholly upheld against them, would not result in the plaintiffs having a liability to the ANZ bank for $3,399,347.67 or anything like that sum. c. Advising the plaintiffs that, if they defaulted in payment of the sum of $1,750,000 by 19 November 2010, it would not make any difference if the judgment in favour of the bank was for $3,399,347.67. d. Failing to advise the plaintiffs that the effect of the Consent Orders was that, if the plaintiffs defaulted in payment of the sum of $1,750,000 by 19 November 2010, there would be a judgment against them for $1,543,225.39 more than the guaranteed amount of $1,856,122.28. e. Failing to advise the plaintiffs that, if they defaulted in payment of the sum of $1,750,000 by19 November 2010, and the securities were sold by the ANZ bank for a sum in excess of $1,750,000 the ANZ bank would, as a practical matter, be entitled to any excess up to $1,543,225.39 and the plaintiffs would be at risk of being bankrupted for any shortfall against the judgment of $3,399,347.67. f. Failing to advise the plaintiffs that the value of the claim against them was not $3,399,347.67 but was limited to judgment in favour of the ANZ bank in the guaranteed sum of $1,856,122.28 plus costs plus the value, if any, of the claim for wrongful detention of the goods made the subject of the proceedings. g. Failing to advise the plaintiffs that no legally binding settlement came into existence unless and until terms of settlement had been signed and, instead of consenting to judgment against them in the sum of $3,399,347.67 and agreeing to the other orders contained in the Consent Order, there were other alternatives they could pursue including making a counter-offer of judgment against them in relation to the guaranteed sum of $1,856,122.28 in lieu of $3,399,347.67 and, failing agreement by the ANZ bank, resuming the hearing. h. Failing to advise the plaintiffs of the advantages and disadvantages of the alternatives that were available to them instead of signing the Consent Order, including making a counter offer and resuming the hearing. i. Failing to seek the advice of Senior Counsel on the alternatives that were available to the plaintiffs in the event that the ANZ bank insisted upon judgment against the plaintiffs in the sum of $3,399,347.67. j. Failing to advise the plaintiffs that they should refuse to consent to a judgment against themselves for an amount which they did not owe. k. Failing to advise the plaintiffs that they should refuse to consent to orders on conditions over which they did not have control. l. Failing to advise the plaintiffs that the way the Consent Orders worked, namely, to impose a judgment of $3,399,347.67 upon them in the event that they were unable to refinance or sell the securities before 19 November 2010, was draconian and punitive. m. Causing the plaintiffs to incur a liability they did not owe. n. Causing the plaintiffs to be harmed in their credit standing and repute by the entry of a judgment against them-in the sum of $3,399,347.67. o. Failing to advise the plaintiffs not to sign the Consent Orders. [14] The breach of the implied term and the breach of duty caused the plaintiffs to suffer loss and damage: Particulars of Loss and Damage a. Liability incurred to the ANZ bank: $3,399,347.67 i. Less guaranteed sum: $1,856,122.28 ii. Less value of damages claim: Nil iii. Less ANZ costs: to be advised iv. Subtotal (ex costs): $1,543,225.39 b. Costs of defending the proceedings: to be assessed."
On 29 or 30 June 2011, there was a conference attended by Mr White, Mr Kelly and Gregory. Mr Kelly recounts his recollection as follows: "[28] To the best of my recollection, after Mr White introduced me to Mr Greg Attwells during the Second Conference, he said words to the effect, "We have dropped in to up-date you on the properties. Nothing has been sold as yet. I can also give you a copy of the market appraisal I mentioned when we last spoke." Mr White then showed me a copy of a letter dated 16 March 2011 from Landmark Forbes, a copy of which is at pages 47 to 48 of JK-1, and said words to the effect, "Landmark puts Wilbidgee at $1.8 to $2 million and Moora Moora at $405,000 to $450,000. On those figures, refinance of $1.75 million is a practical impossibility. There is not enough equity." Greg Attwells said words to the effect, "The $3.3 million debt killed off any chance we had." He also said words to the effect, "We rejected offers of $3.3 million before we went to court. Now we are stuck with an extra $1.5 million debt we never owed.''
Mr White gave a similar account of this conference in his affidavit of 11 September 2020 confirming the conference date was 29 June 2011.

JLL's lawyers plead advocate's immunity

On 4 October 2011, JLL filed a Defence to the statement of claim denying liability, denying that any loss was suffered and contending that the claim could not succeed because advocate's immunity applied.
Shortly after the Defence was filed, Mr Kelly discussed the advocate's immunity issue with Mr White. Mr Kelly noted the scope of the immunity particularly in respect of settlement negotiations was open to question, and the issue was to be further explored by the NSW Court of Appeal given the outcome of Woodland v Donnellan [2011] NSWSC 777, a case in which Mr Kelly was briefed by Lawcover to advise on prospects of success of an appeal.
On 1 November 2011 Dr Lord had a sequestration order made against her.
On 22 November 2011 Mr White told Gregory in a letter that "senior counsel's view all along has been that the prospects of success in the principal claim are very good". Mr White said that JLL are insured by Lawcover and counsel's view was that the matter "should be referred to mediation which would limit costs payable by you" and "he believes the insurer will want this matter settled".
In a file note dated 14 December 2011, Mr White recorded that he spoke to Gregory regarding assigning his rights in the claim to Noel. Gregory advised that he had been speaking to a trustee who advised him that he will get a better deal that way and that assignment is the only way Noel can recover what he has paid out.
On 19 December 2011, Gregory went into voluntary bankruptcy. Gregory told Mr White of this on 22 December 2011.
On 30 January 2012 there was a teleconference between Mr White and Gregory in which Gregory said he had instructed Mr White to speak to Mr Kelly regarding assignment of his rights in the claim against JLL to his brother Noel.
On 8 February 2012 Mr White spoke to Gregory's trustee in bankruptcy and on 28 February 2012 the trustee agreed to the assignment of the rights in the claim to Noel.
On 5 March 2012, Gregory's trustee in bankruptcy executed a Deed of Assignment and reliance whereby Gregory's rights in connection with the JLL proceedings were assigned to Noel.
Mr White's file note of 16 March 2012 stated that he had a telephone conversation with Noel suggesting to Noel that he should have separate legal advice in response to which Noel said: "No - Greg has explained it (to us)". Noel also asked that documents not be sent to his home because he did not want his wife to see them.
Mr White says that the Deed of Acknowledgement was prepared by him but settled by Mr Kelly. Mr Kelly said in his affidavit that the Deed was prepared without his involvement, and that he gave no advice or took any part in settling the terms of the Deed of Assignment, but that he did give advice to Mr White about the need for the Deed to clarify the scope of that assignment for the purposes of pleading the amended statement of claim. In my view nothing turns on this difference in recollection.
On 13 April 2012, Mr White provided an updated brief to Mr Kelly and requested that he appear at the next directions hearing on 25 April 2012 to deal with the bankruptcy assignment issues.
On 18 April 2012, Mr Kelly sent an email to Mr White that the statement of claim needed to be amended to plead the bankruptcy of Gregory, the assignment to Noel, and the entitlement of Noel to maintain the proceedings, and that Noel needs to be named as a party.
On 19 April 2012, Mr Kelly sent an email to Mr White enclosing an amended statement of claim. This iteration also removed Dr Lord as a party.
On 23 April 2012, leave was given by the Court to file the amended statement of claim.
On 28 April 2012, Noel executed the Deed of Assignment.
On 16 July 2012, Noel verified the amended statement of claim. Mr White stated that he explained the amendments to Noel, including telling Noel about the advocate's immunity defence raised by JLL.
On 16 August 2012 the amended statement of claim verified by both Noel and Gregory, and removing Dr Lord as a party, was filed.
The Defence to the amended statement of claim filed on 31 October 2012 denied negligence, denied causation and maintained the allegations of contributory negligence and failure to mitigate loss as well as pleading advocate's immunity from suit.
On 18 December 2012 in its judgment in Donnellan v Woodland [2012] NSWCA 433 ("Donnellan"), the Court of Appeal upheld an appeal on the basis that advocate's immunity provided the appellant with a complete defence in the circumstances of that particular case. Mr Kelly advised Mr White of this result when next he spoke with him, but advised that it was distinguishable from the plaintiffs' circumstances.
On 15 and 17 April 2013 there were very long conferences with Mr Kelly focused on preparation of affidavit evidence. Mr White says that Mr Kelly advised in conference attended by Gregory, Noel and Mr White that the Consent Orders and judgment created a "real and enforceable liability for an extra $1.5 million" that "you did not owe", and the loss is "the judgment of $3.3 million when liability was capped and certified at $1.85 million", and that the "loss doesn't come from the bankruptcy - it comes from the judgment - they (JLL) misconceive this. The real issues are contributory negligence and advocate's immunity".

"Once the $3.3 million kicked in - our credit rating was fucked"

Mr Kelly's recollection of those conferences was that there was focus on obtaining instructions for Gregory's affidavit and settling that affidavit, but that other issues were discussed: "[44] During the course of the Third Conference, a number of topics were discussed by reference to the evidence in the proceedings and the issues raised in the Defence to the Amended Statement of Claim, including reliance, loss, advocate's immunity, failure to mitigate, contributory negligence and apportionment. [45] On the question of reliance and loss, I said words to the effect, "The defence misconceives the nature of the loss. The loss was occasioned by you and Dr Lord consenting to judgment for $3.3 million, when the liability you had was capped and certified at $1.8 million. It has nothing to do with your bankruptcy or your capacity to pay. The loss had already occurred by the time you went bankrupt. The judgment created a real and enforceable liability for an extra $1.5 million which you did not owe. If you had been properly advised, you would have at Ieast been alerted to the opportunity to go back to court and agree to judgment for the $1.8 million claimed rather than consent to the $3.3 million the bank was insisting upon. That was a 100% certain opportunity, if you wished to take it up, because you were before the court, the bank had already tendered evidence to prove you owed the $1.8 million figure and all you had to do was say to the court that you did not oppose judgment for the amount claimed. Instead, you ended up with a judgment debt against you for about $1.5 million more than you owed at the beginning of the day - and you got nothing of value in return." [46] On the topic of advocate's immunity, I said words to the effect, "The decision of the Court of Appeal in Donnellan v Woodland was handed down in December last year. The appeal was allowed. That means the defence of advocate's immunity succeeded, so the solicitor who was said to have been negligent when advising on settlement was held to be immune from suit." Mr White said words to the effect, "How does that affect our case?" I said words to the effect, "It strengthens the defence of Jackson Lalic but I think the two cases are distinguishable. In Donnellan, the solicitor gave an over optimistic assessment of prospects of success and went on to lose the case and expose his client to indemnity costs. In this case, Jackson Lalic gave advice which effectively changed the position of Greg and Dr Lord from that of guarantors with a capped liability to judgment debtors with a liability for the whole of the company debt. I think we have a better chance to show our settlement was outside the scope of the immunity than Donnellan v Woodland but there will be a real argument about it. The scope of the immunity is a hard fought issue at the moment." [47] When the topic of mitigation was discussed, Mr Greg Attwells said words to the effect, "How can they say we should have borrowed the $1.75 million? We tried. Once the $3.3 million kicked in that was the end for us. Our credit rating was fucked." [48] When the topics of contributory negligence and apportionment were raised, Mr Greg Attwells said words to the effect, 'What is that about?" I said words to the effect, "Jackson Lalic is saying you and Dr Lord were careless in looking after your own interests, so you should bear part of the loss. In effect, you agreed to judgment at $3.3 million because you preferred to run the risk that you would be able to refinance $1.75 million. You took that chance, rather than consent to judgment for the amount claimed. They are saying you should not have agreed if you could not borrow the $1.75 million. It was your fault, or partly your fault, so you have to bear part of the loss." Greg Attwells said words to the effect, "But were relying on our solicitor to protect our interests, he did not tell us we had a choice. We were told we had settled for $1.75 million on 19 November. Then we were told $3.3 million and that figure was non-negotiable." I said words to the effect, "They will put to you that you did know, because it is a matter of common sense. The judge will then have to decide if you would have gone ahead, despite what you say now." Greg Attwells said words to the effect, "We would not have gone ahead if we had known we had a choice. There is no way I would have agreed to a judgment against me for $3.3 million if I had known I could have only $1.8 million. We rejected offers along those lines a couple of weeks before the court case. I have never owed $3.3 million to anyone." [49] Towards the end of that part of our conversation, I said words to the effect, "We need to get an affidavit from Dr Lord to corroborate Greg's evidence". Mr White said words to the effect, "Jane lives in Wagga but I will get an affidavit from her." [50] I also said words to the effect, "We should consider making an offer of compromise." Mr White said words to the effect, "I agree''. We then spoke about whether and if so in what sum an Offer of Compromise should be made. ln that context, I said words to the effect, "On your evidence, I think you have a sound claim, but the matter is ripe for compromise. The advocate's immunity defence produces an all or nothing outcome. It is not like contributory negligence where the court can apportion the loss." Other conversation on that topic, is set out in paragraphs [67], [89] and [90] below. At the end of the Third Conference, the question of how much to offer was left open for further consideration; Mr Attwells' affidavit was sworn; and a number of other procedural matters were attended to by Mr White, including having Mr Greg Attwells sign a list of documents for discovery."
Mr Kelly denied saying: "Your main case is very strong and you have a very strong chance of winning", as alleged in Noel Attwells' affidavit of 12 May 2020. I accept Mr Kelly's evidence in that regard, over Noel's evidence. Mr Kelly's written advice at the time of filing the statement of claim in May 2011 deployed the terminology "a sound claim for damages". I observed Mr Kelly to be an appropriately conservative senior practitioner who chooses his words with care and with a propensity for understatement.

Separate question?

Once the affidavit evidence was filed, Mr White wrote to Sparke Helmore stating that he would request the Court to make orders that JLL file its evidence by June 2013. Instead, JLL filed their motion for separate question on advocate's immunity. Obviously this diverted the proceedings down a particular path with submissions and preparation focussing on that issue, rather than a path that would require JLL to expose, or decide that they could not expose, the ugly truth of their appalling incompetence and failures on that day.
On 10 July 2013 Schmidt J acceded to that application.
On 22 November 2013, Sparke Helmore, acting for JLL, sent a Calderbank letter containing JLL's arguments as to why Noel and Gregory should settle the proceedings for a walk away, each bearing its or their own costs. It comprised 4 pages of argument based on a one dimensional counter-factual scenario concluding that the plaintiffs suffered no loss, because of the collapse of their financial situation, that by November 2013, had become a reality.
This letter was sent in the context of two things: the settlement conference scheduled for 28 November 2013 and the judgment of Harrison J of 14 October 2013: Attwells v Jackson Lalic Lawyers Pty Ltd [2013] NSWSC 1510.
Harrison J refused the application by JLL to decide, as a separate question, whether Noel and Gregory's claim was defeated by advocate's immunity. His Honour was of the view that there was insufficient material information before him which would have a direct bearing on the parameters of application of that immunity to allow him to make the necessary determination. Sparke Helmore had filed a Notice of Intention to Appeal that decision on 13 November 2013.
Sparke Helmore's letter was a particular style of selective outlining of only some of the issues designed to bully a more vulnerable opponent into settlement. The selective analysis was clearly directed to undermining the plaintiffs' confidence in their case, despite the fact that JLL had just lost its notice of motion, and still had not filed any evidence from Mr Shehabi acknowledging or attempting to defend his woeful conduct on 15 June 2010 and JLL's complete failure to properly advise Gregory and Dr Lord on that day.
Whilst the Court of Appeal concluded in Jackson Lalic Lawyers Pty Limited v Attwells [2014] NSWCA 335, that advocate's immunity applied to defeat the plaintiffs' claim and that Harrison J should have concluded accordingly, the majority of the High Court, comprising French CJ, Kiefel, Bell, Gageler and Keane JJ applied a more nuanced and less doctrinal approach to reach the opposite result: Attwells v Jackson Lalic Lawyers Pty Limited (2016) 259 CLR 1; [2016] HCA 16: "[5] The abolition of the immunity would require this Court to overrule its decisions in D'Orta and Giannarelli. For the reasons which follow, the appellants' argument in this regard should be rejected. On the other hand, the appellants' argument as to the scope of the immunity should be accepted. The authoritative test for the application of the immunity stated in D'Orta and Giannarelli is not satisfied where the work of the advocate leads to an agreement between parties to litigation to settle their dispute. No doubt an advice to cease litigating which leads to a settlement is connected in a general sense to the litigation which is compromised by the agreement. But the intimate connection required to attract the immunity is a functional connection between the advocate's work and the judge's decision. As Mason CJ said in Giannarelli, the required connection is between the work in question and the manner in which the case is conducted in court. Both D'Orta and Giannarelli were concerned with claims which impugned a judicial determination to which the allegedly negligent work of the advocate contributed. As will be seen from a closer consideration of the reasoning in D'Orta, the public policy, protective of finality, which justifies the immunity at the same time limits its scope so that its protection can only be invoked where the advocate's work has contributed to the judicial determination of the litigation. [6] In short, in order to attract the immunity, advice given out of court must affect the conduct of the case in court and the resolution of the case by that court. The immunity does not extend to preclude the possibility of a successful claim against a lawyer in respect of negligent advice which contributes to the making of a voluntary agreement between the parties merely because litigation is on foot at the time the agreement is made. That conclusion is not altered by the circumstance that, in the present case, the parties' agreement was embodied in consent orders." (emphasis added) …. [62] In the present case, the consent order and associated notation by the Court reflected an agreement of the parties for the payment of money in circumstances where no exercise of judicial power determined the terms of the agreement or gave it effect as resolving the dispute. The consent order may have facilitated the enforcement of the compromise, but it was the agreement of the parties that settled its terms."
The series of decisions in this case underscores the developing landscape of the common law in respect of advocate's immunity in those years, particularly regarding the application of the immunity to "out of court" settlement of proceedings. This does not mean that claims should not be filed and fought that potentially raise those issues for resolution. On the contrary, difficult and different factual scenarios can make and change the common law. It would be fundamentally wrong to fail to pursue or fail to advise to pursue professional negligence claims that raise difficult or contentious issues. However counsel are not oracles. The test is reasonable prospects of success.
Nor is it appropriate or acceptable to crumble and capitulate because the other side outlines an argument in opposition to the case pleaded, particularly if it is a letter in the style deployed by Sparke Helmore, that ignores relevant facts and misinterprets the law.
Returning to Sparke Helmore's November 2013 letter, it was not a persuasive analysis of damage issues, nor did Mr Kelly find it to be so, concluding that it was misconceived and so there was little point attending a settlement conference in the circumstances. Mr White sent a polite email on 25 November 2013 stating that neither he, nor his clients, nor his counsel accepted the overview, conclusions, or assumptions about loss set out in the letter, and that the defendant's current stance indicated that there was no point incurring the expense and legal fees in participating in a conference, but that the plaintiffs' team would use the time to formulate an offer of compromise, an entirely appropriate response and one consistent with s 56 of the Uniform Civil Procedure Act 2005 (NSW) and the overriding purpose rule.
On 28 November 2013 a conference was held with Gregory, Noel and Mr White where settlement was discussed. Mr Kelly deposed to that conference involving a discussion of JLL's offer, the arguments set out in Sparke Helmore's letter, discussion of an offer of compromise, and JLL's application for leave to appeal Harrison J's decision to the Court of Appeal. In that conference Mr Kelly advised Noel and Gregory to make an offer of compromise of $350,000.00 plus costs and instructions were given to Mr White to do so. To the extent that Noel states in his affidavit that he does not recollect the Sparke Helmore offer and its arguments being discussed, I prefer the evidence of Mr White and Mr Kelly that the letter and its contents were discussed. To the extent Noel says other higher figures were discussed to offer, I prefer the evidence of Mr White and Mr Kelly that no such other amounts were discussed.
On 2 December 2013 an offer of compromise in the sum of $350,000.00 plus costs was forwarded to Sparke Helmore.
Mr Kelly prepared submissions and appeared in response to JLL's appeal of Harrison J's decision on 23 July 2014. This was his last retained involvement in the proceedings.
On 10 October 2014 the Court of Appeal's judgment was delivered, granting JLL leave to appeal, and dismissing the plaintiffs' proceedings with costs on the basis of the determination as a separate question, that advocate's immunity from suit applied to defeat the claim.
About this time Mr Kelly was informed by Mr White that Gregory had died and letters of Administration in his estate would be, or had been, granted to Noel.
Two days after the Court of Appeal judgment, Leo Muriniti of L.C. Muriniti & Associates ("LCM") contacted Mr White to discuss applying for special leave to appeal to the High Court, stating that he had a similar advocate's immunity case. Mr Muriniti described in his affidavit sworn 30 September 2021, that he and Mr Newell were "on the lookout" for suitable cases, and that they had identified the Attwells decision as a suitable vehicle to take to the High Court for the purposes of testing the ambit of advocate's immunity.
On 22 October 2014, Noel, his wife, Kim and Mr White attended a conference with Mr Newell of LCM's office. Mr Newell conducted work as a solicitor as well as solicitor advocate. There was discussion about the potential for a High Court appeal. Noel instructed Mr White to proceed.
On 24 October 2014, Mr Muriniti sent an urgent letter to Mr White attaching a contingency costs agreement. The agreement confirms retainer on a conditional fee basis "to act as your agents to prepare and conduct a High Court appeal from the decision of the NSW Court of Appeal in Attwells v JLL and all matters incidental thereto". The plan was that LCM would work as Mr White's agent, but Mr White would remain the solicitor on the record.
On 26 March 2015, an application for special leave to appeal to the High Court was filed. Mr Muriniti's bill of costs says this was done by him and Mr White attending the Registrar together,
Mr Newell appeared on the special leave application instructed by Mr Muriniti. Special leave was granted that day, 7 August 2015.
On 26 June 2015 Sparke Helmore sent a further Calderbank letter which made a "walk away" offer on the basis that the plaintiffs withdraw their special leave application, each party bear its own costs. At that stage, given the unsuccessful outcome in the Court of Appeal for the plaintiffs, I understand this offer entailed the forgiving of a significant amount of incurred costs due to JLL of about $230,000.00. Noel confirmed in his evidence that there was a discussion of this offer which involved his wife Kim and Mr Newell at which Mr Newell advised him to reject the offer and to counter-offer $350,000.00 plus costs (which was a repeat of the very same offer advised by Mr Kelly and Mr White and made in November 2013).
On 2 November 2015 Mr White had Noel sign a further deed and costs agreement. This was the day before the day listed for the hearing of the appeal in the High Court. Noel says they met for only minutes at a café but Mr White says the meeting took over an hour and that the agreement and the need for it was explained.
The appeal was listed to be heard in the High Court on 3 November 2015 but was vacated and ultimately heard on 8 March 2016. There was a team of four counsel led by Mr Reynolds SC. The solicitor on the record as instructing was L.C. Muriniti and Associates.
On 15 December 2015 Mr White's practising certificate was suspended.
In February 2016, Mr Muriniti discussed with Noel the fact that Mr White's practising certificate was suspended and therefore he should retain LCM directly and the new fee agreement dated 15 February 2016 was signed. (Noel had the date in his affidavit incorrectly as February 2015). I will return to the circumstances of this later in the judgment.
The judgment of the High Court was published on 4 May 2016, a majority of five deciding the issue in favour of the appellants with orders as follows: "1. Appeal Allowed. 2. Set aside orders 3, 4 and 5 of the Court of Appeal of the Supreme Court of New South Wales made on 1 October 2014 and in their place order that: (a) the appeal be allowed; (b) the orders of Harrison J made on 17 October 2013 be set aside, and in their place order that the separate question of whether the plaintiff's claim is defeated entirely, because the defendant is immune from suit, be answered: "No". 3. Set aside the orders of the Supreme Court of New South Wales made on 28 October 2014. 4. The respondent pay the appellant's costs of the proceedings on the separate question in the courts below and of the appeal to this Court. 5. The Law Society of New South Wales pay the costs of the appellants and the respondent occasioned by its intervention in the proceedings."
The acknowledgement during argument by Mr Reynolds that there was a "matter of opacity on the issues of negligence and causation in the appellant's claim", was not a comment that should be interpreted as some kind of concession that the negligence case against JLL was weak. It arises from the manner in which the arguments were framed in the High Court on the separate question issue. The agreed facts created some apparent tension in interpretation, but were provided as the factual basis for the question of whether the scope of the immunity extends to "negligent advice which leads to the settlement of a case by agreement between the parties".
The majority stated the issues for its determination this way: "[25] …. The consent orders and associated agreement appear, on their face, to have created a new charter of rights between the parties. The liability which the guarantors assumed under that new charter was distinctly not their liability under the guarantee. If the guarantors met their liability under the guarantee within the extended time for which the settlement agreement provided, they would be released from all liability to the bank. In return for extra time to pay their true debt, the guarantors agreed to consent to a judgment for the total indebtedness of the company with a collateral agreement that the judgment would not be enforced should the amount they owed under the guarantee be paid within that extended time. [26] That having been said, the appeal to this Court is concerned solely with whether the advocate's immunity is, as the respondent contends, a separate and complete answer to the appellants' claim. This Court has not been invited to hold that the weakness of the appellants' claim on the issues of negligence and causation of loss is so clear that there is no utility in deciding the issue presented for determination. The decision of the Court of Appeal, while it stands, precludes any investigation of the strengths and weaknesses of the appellants' claim. The issue as to the effect of the immunity was raised by the respondent, and, the issue having been decided by the Court of Appeal in the respondent's favour as a complete answer to the appellants' claim, should be decided by this Court."
That was not an evaluative comment about the strength or otherwise of the negligence case against JLL. It was simply drawing attention to the fact that JLL had not raised, as a separate issue, that the claim on the issues of negligence and causation are hopeless and for that reason there was no utility in deciding the issue presented for determination. Given that JLL were represented by very able and experienced junior and senior counsel, there was no doubt a good reason why that point was not taken.
When Sparke Helmore and Moray and Agnew, (the later subsequently acting for Mr Harper for a brief period), copied each other's Calderbank letters in November 2016 stating that [26] of the judgment of the majority in the High Court reveals an opinion that the High Court considered the plaintiff's negligence case against JLL to be weak, they took out of context the Court's observations at [25] and [26]. That interpretation is wrong, and illustrative of the style of advocacy deployed by Sparke Helmore in their Calderbank letters.
On 10 June 2016, Sparke Helmore wrote to LCM noting that no action had been taken to "advance the underlying proceedings" in the Supreme Court, (although the ink was barely dry on the High Court's judgment), and raising the issue that in their view, Mr Harper should be considered to be a concurrent wrongdoer and so should be added to the proceedings as a defendant given the approaching expiration of the limitation period.
The letter also indicated an intention by JLL to plead negligence on the part of Mr Harper in its Defence as a causally relevant basis for reduction of any liability of JLL to the plaintiffs under s 35 of the Civil Liability Act. There is no evidence before me that that amendment to the Defence was ever made.
A "standard costs agreement" dated 14 June 2016 addressed to Noel Attwells was annexed to Mr Muriniti's affidavit of 30 September 2021. The copy is not signed, but presumably it evidences LCM were in fact retained to act, given the large bill of costs sent to Noel in May 2020 described the work Mr Muriniti (and Mr Newell) had done after 14 June 2016. It described the "work I have been instructed to do" as: "Investigate whether continuing with the Supreme Court proceedings that had been remitted back from the High Court is appropriate and whether there are damages that can be identified and if appropriate and damages are identified, to prosecute the proceedings in the Supreme Court or if it not appropriate to continue with the Supreme Court proceedings because no damage were identified, to negotiate a settlement of the proceedings on the best possible terms."
One blindingly obvious step for LCM to take in response to the 10 June 2016 letter would be to approach the Court for orders requiring the defendant to file and serve its evidence, particularly as it had not done so and was asserting Mr Harper was negligent. Another was to ask Sparke Helmore to provide its proposed Defence, or to explain why the claim Mr Harper was negligent. I cannot understand why none of these steps were taken at that time. The fact that LCM may not have "the file" is not to the point. A simple request that the defendant provide its evidence or draft Defence were basic steps to take. The failure to take any of them at this time, was incompetent.
Instead, four days later, on 14 June 2016, LCM filed an amended statement of claim adding Mr Harper as a defendant. That amended statement of claim makes no changes to the allegations of negligence pleaded by Mr Kelly; indeed, it adopts them as true. It simply adds Mr Harper as a responsible tortfeasor without any real explanation why. There are two other telling features of this step taken by LCM. First, an affidavit verifying the document was signed by Mr Muriniti which stated: "Based on instructions provided to me by the plaintiff I believe the allegations of fact in the statement of claim are true". Second, there is a certification signed by Mr Muriniti under the Legal Profession Act 2004 (NSW) that "there are reasonable grounds for believing, on the basis of provable facts and a reasonably arguable view of the law, that the claim for damages in these proceedings has reasonable prospects of success", referencing Clause 4 of Schedule 2 to the Legal Profession Uniform Law Application Act 2014 (NSW). Presumably at that stage Mr Muriniti had taken sufficient instructions and formed a professional opinion that allowed him to swear to those matters. The irony that in this Court Mr Newell, an employee of Mr Muriniti, was putting the opposite to Mr Kelly and Mr White is hard to ignore.
The amended statement of claim was served on Sparke Helmore with a letter inviting a settlement conference "given the admissions made by your client". Mr Muriniti does not specify in the letter what those admissions were, or when they were made.
On 5 October 2016 Sparke Helmore sent an email letter to Mr Muriniti outlining why in their opinion Gregory can no longer be a plaintiff in the proceedings given his death and the absence of any extant claim given Noel's position as Administrator of the Estate.
On 12 October 2016 Mr Muriniti advised Sparke Helmore that he was having trouble getting the "whole file" from Mr White and that given Sparke Helmore formed a view that it was appropriate to join Mr Harper, could they please provide documents to assist in explaining their basis for taking that position. This assertion is against the background of having been the solicitor on the record since the beginning of 2016 in the appeal proceedings and June 2016 specifically regarding the Supreme Court proceedings, and the bill of costs appended to Mr Muriniti's affidavit revealing on a number of occasions in preparation for the High Court appeal being provided with "boxes" of material by Mr White.
On 13 October 2016 Sparke Helmore emailed that they were content to provide their client's List of Documents and an opportunity for LCM to inspect those documents or obtain a copy. An email on the same day in response by Mr Muriniti gave an undertaking to pay for copying, but there is no correspondence, file note, or anything else in evidence that indicates whether those documents were obtained that way or not, other than an assertion in a letter of 1 November 2016 by Mr Muriniti that he had "resort(ed) to photocopying the Court file and to obtain copies of materials which were the subject of prior discovery from Sparke Helmore" and that "having examined those materials …. we are concerned that there is no evidence that the late Gregory Attwells and his partner suffered any loss in reality". He then goes on to parrot the Sparke Helmore analysis.
Sparke Helmore's response to Mr Muriniti's request for an explanation about Mr Harper was hopelessly inadequate and required follow up by Mr Muriniti, given that there was still no affidavit evidence filed by JLL and no draft Defence produced setting out the negligence JLL asserted on the part of Mr Harper.
Within the List of Documents of JLL were a number of file notes and letters created on or around 15 June 2010, including by Mr Shehabi, as well as correspondence from Mr Harper. Obviously these documents would be relevant to issues of breach of duty but there is nothing in the affidavit by Mr Muriniti explaining what these documents revealed, what was done with these, and what advice Noel was given about them.
There is a file note by Mr Muriniti's assistant, Dance Petroski, dated 28 October 2016 about a telephone conversation with Mr White. The file note reveals that Mr White was trying to help on the question of joining Mr Harper (which I accept Noel had approached him directly about), and that both he and Mr Kelly were prepared to help.
A letter from Mr White to Mr Muriniti dated 31 October 2016 enclosed an email from Mr Kelly dated 27 October 2016. Mr Kelly's email stated, amongst other things: "…As discussed, I would be happy to confer on the question of apportionment and damages, if briefed. As to the former, we had no basis to bring a claim against Roger Harper when originally instructed - we were instructed that the junior solicitor gave the impugned advice about the terms of settlement late on the rainy afternoon when the terms came through from the bank; by then Harper had come and gone. If the solicitor knows something that we do not (eg a communication with Harper advising on the terms), they may well be entitled to name him as a joint tortfeasor and if they do and they are successful, our damages against JLL will be apportioned down. Ordinarily, a plaintiff will join a named tortfeasor unless there is some good reason to think the apportionment claim will fail. Is there? I do not know. I have been out of the picture too long and I have not been asked to advise. As to the latter, the claimed damage, if I recall correctly, is the difference between the judgment debt on the one hand and the lesser judgment which could have been obtained if the solicitor had said, go back to court tomorrow and tell the judge you accept liability for the amount referred to in opening and proved by the bank's certificate - the correct analysis of damage is loss of opportunity; relevantly, that is loss of opportunity to have the court enter judgment for the much lower sum which the plaintiff had opened and proven by the bank's certificate. That would have been a 100% certainty because it does not involve any agreement with the bank. But I have not seen the documents for years, so all of that would need to be double checked. …"
The responses from Mr Muriniti dated 1 and 3 November 2011 were extraordinary pieces of correspondence. Rather than welcoming assistance from a person qualified and experienced to give it, (particularly Mr Kelly SC), the letters comprised argumentative and aggressive assertions, replete with irrelevancies and ill-informed observations regarding the effect of the legal principles associated with proving loss in negligence claims against legal practitioners. Mr Muriniti also accused Mr White of approaching "his" client Noel "without authority".
Mr Muriniti, and Mr Newell - assuming he too was working on the matter - seem to have completely missed the point that once the separate question argument was over in May 2016, it was their job to marshall and discuss evidence on loss. The "standard costs agreement" of 14 June 2016 said that is what LCM was retained to do. There is no evidence that they did anything constructive. If they did not know how to do that, or how to frame the arguments to present loss properly and provide the Court with cogent evidence and arguments as to loss in response to the arguments posited by JLL, they should retain counsel who knew how it should be done. Mr White's suggestion in his email that Mr Newell "may be out of his depth" reflected the reality of the situation. To suggest, as Mr Muriniti does in his letter of 7 November 2016 to Mr White, that the reference to the measure of loss as "lost opportunity" (or "opportunity loss" as Mr Muriniti incorrectly terms it) as "the most threadbare position the writer has encountered in a very long time" demonstrates his total lack of understanding of the relevant principles applicable to loss and damage in legal professional negligence cases.
On 4 November 2016 Mr Muriniti wrote to Sparke Helmore complaining that he had no file and blaming Mr White.
On 4 November 2016 Mr White wrote to Mr Muriniti explaining that Noel had actually contacted him because he was upset about advice LCM had given him about needing to settle the case, and that he had not sought to speak to Noel.
On 7 November 2016, Mr Muriniti wrote to Mr White stating that he had been requesting the file for "several months" and demanding that Mr White articulate why there was a case in damages available to Noel, despite the fact that first, Mr Muriniti himself had verified the amended statement of claim just a few months before, stating that the facts asserted were true and there was such a case available at law, second, Mr Muriniti had done nothing, it seems, to seek advice from counsel experienced in the professional negligence area, third, he had done nothing to make JLL show its evidentiary hand on breach, and fourth, he had completely ignored Mr Kelly's outline of lost opportunity damages and his offer to assist if retained.
On 8 November 2016, Mr White replied to Mr Muriniti again, attempting to assist.
On 9 November 2016 Sparke Helmore sent another missive to LCM which included the manipulative and inaccurate presentation of [26] of the majority judgment in the High Court in Attwells v JLL as indicating that the High Court had concluded that the case in negligence was weak, and repeating the submissions made back in 2013 about the plaintiff being unable to prove loss.
I interpolate here that if the damage claimed by Gregory and Dr Lord and later, Noel was framed in terms of Gregory and Dr Lord's "damage" being loss of their properties and/or being made bankrupt and/or the associated financial disaster, the arguments raised by Sparke Helmore would have at least been salient, but loss was never claimed on that basis. It was only ever claimed as damages (that is, a sum of money to be determined but pitched at the difference between the judgment sum and the guarantee sum) for the lost opportunity of avoiding the $3.339 million judgment against Gregory and Dr Lord in circumstances where the guarantee was limited to $1.850 million and where the bank had acknowledged on the court record that was so, plus costs, with, potentially, a claim to be later fleshed out for loss of reputation.
On 11 November 2016 a similar Calderbank letter was sent to Mr Muriniti from Moray and Agnew on behalf of Mr Harper.
On 14 November 2016 Mr Muriniti wrote to Moray and Agnew asking for time.
On 15 November 2016 Mr Muriniti wrote to Mr White demanding advice as to how the damages case was to be proved and threatening to sue him unless he forgoes his costs.
On 16 November 2016 Mr White wrote to Mr Muriniti stating that he had found a box which he would provide. On 17 and 18 November 2016, Mr White provided update emails including that he was going through "mountains of emails" to try and find items that would assist.
On 18 November 2016 Mr Muriniti wrote to Sparke Helmore and Moray and Agnew proposing settlement, indicating that he agreed with their analysis of the loss and damage issues.
On 27 November 2016, Moray and Agnew enclosed consent orders to facilitate settlement and on 23 November 2016 a draft deed was forwarded by Sparke Helmore. It seems that by late November 2016 deeds of settlement and releases against both defendants were signed and executed relying on the advice of Mr Muriniti and/or Mr Newell and no one else.

Relevant events between the settlement of proceedings and this trial

On 12 April 2017, LCM was advised of the High Court's taxation assessment for party/party costs in the sum of $196,150.64. In his affidavit of 30 September 2021 Mr Muriniti stated that this left Noel with a debt for the balance of the fees payable by him of $350,612.00. Noel gave evidence that he has never been asked to pay this, although he was made broadly aware of it probably in September 2021.
There is a bill of costs appended to Mr Muriniti's 30 September 2021 affidavit dated 21 September 2017 headed "Bill of costs for professional work undertaken to negotiate a resolution of Supreme Court proceedings post High Court decision". Although it is addressed to Noel there is no evidence that it was ever "sent" and it has not been required to be paid.
The last entry contained in that bill is dated 22 February 2019: "Email to Guy Reynolds. Have commenced proceedings v G. White and John Kelly SC. Those proceedings currently on foot. Part of the claim in those proceedings is a claim for all legal costs including costs of the High Court proceedings on an indemnity basis".
On 7 August 2017 Mr White filed a statement of claim in the District Court seeking his costs pursuant to the Deed and costs agreement dated 2 November 2015.
Noel told Mr Muriniti about this in a phone call on around 5 August 2017 (according to Mr Muriniti's bill of costs for this proceeding) but it seems he took no steps to defend the proceedings in the short term and on 17 October 2017 Mr White signed the default judgment against Noel in the sum of a little over $353,000.00.
On 18 December 2017 a notice of motion was filed by Mr Muriniti on behalf of Noel to set aside the default judgment.
On the same day a statement of claim was filed naming Mr White and Mr Kelly as defendants in these professional negligence proceedings.
The application to set aside the default judgment was ultimately heard by Balla J on 19 March 2019. By then a Defence and statement of cross-claim had been prepared and were deployed to have the default judgment set aside, raising issues about the validity of Mr White's costs agreement and Deed.
Both proceedings were transferred to the Supreme Court by order of McCallum J (as the Chief Justice of the A.C.T then was) on 19 April 2019.
Gleeson JA heard the applications in June 2019 by Noel to confirm service on Mr White and Mr Kelly and there was leave granted to amend the statement of claim against Mr White and Mr Kelly. Orders were made by Gleeson JA in September 2019 to effect those matters.
During 2020 there were various applications heard in this Court in the Fees proceedings including an issue as to whether the Fees proceedings had in fact settled. Adamson J (as her Honour then was) granted leave to Mr White to discontinue his statement of claim in the Fees proceedings.
Remaining extant for (adjourned) hearing before me in March 2022 were the proceedings on the cross-claim in the Fees proceedings which I will deal with in a separate judgment.

The professional negligence hearing

On 24 December 2020, Adamson J fixed the 24 November 2021 hearing date with a 5 day estimate. The plaintiff had been ordered to file and serve all of his evidence by 12 May 2020. He did not comply.
There was no mention of any intention to rely on a costs assessor's expert opinion until 1 October 2021, when a letter was sent notifying the defendants of an intention to rely on evidence of a Ms Davitt. Her affidavit and reports were served on the defendants' solicitors on 15 October 2021 and 1 November 2021.
On 29 October 2021 the plaintiff filed a notice of motion seeking orders allowing him to rely on Ms Davitt's reports, and that the hearing be split, with issues relating to quantum to be referred to a referee.
That application was listed for hearing before me on 12 November 2021. On that day I refused the application to split the trial and make a referral to a referee: Attwells v White (No. 3) [2021] NSWSC 1569. The question of leave to rely on Ms Davitt's material was postponed to be argued at trial on the question of admissibility.
That argument was heard on day three of the trial shortly after 10:00am. The timing is significant because Ms Davitt's evidence was the last component of the plaintiff's case. By this stage Noel, Mr Muriniti and Dr Lord's evidence had been tendered and cross-examination was completed. I reserved my decision on the basis that I would give my ruling later in the day.
In this context, Ms Horvath, senior counsel for Mr White, raised the question of whether Mr Newell had in fact closed his case, before she called Mr White. There was some prevarication about that on the part of Mr Newell leading to the following exchange: "NEWELL: Subject to Chris Dabit I don't have any other witnesses to call, your Honour. HER HONOUR: Ms Horvath, is that a sufficient "closing" or not? HORVATH: I would like to know that my learned friend has closed his case, other than Ms Dabit; I want to know if there's documents or anything else that my friend is seeking to HER HONOUR: Yes, I think that has to be put on the record, Mr Newell. Mr Newell, you'll have to put on the record with precision that your case is closed other than in respect of the affidavit and/or evidence of Ms Dabit. NEWELL: I do do that, I do confirm that, your Honour. HER HONOUR: I think you need to articulate it on the record rather than me telling you. NEWELL: I follow that, your Honour, yes. HER HONOUR: No, Mr Newell, there's a requirement that you formally state on the record your position in respect of your client's case, rather than adopt what I've just said. Could you do that? NEWELL: I'm sorry. Your Honour, that is my evidence, I close my case subject to the evidence of Chris Davit." [1]
Later that day I ruled the Davitt material was not admissible and would not be received into evidence.
Before Court on the morning of day 5 of the trial, Friday 26 November 2021, a judgment was emailed to the parties setting out my reasons: Attwells v White (No. 2) [2021] NSWSC 1520.
At 10:00am Mr Newell flagged that he had instructions to apply for an adjournment of the trial in order to obtain an "amended report" of Ms Davitt. I heard the application an hour or two later on completion of Mr Kelly's cross-examination. Mr Newell sought leave to file in Court a notice of motion and affidavit sworn by Mr Muriniti on 24 November 2021, seeking orders that the trial be adjourned and directions made for service of a further report by Ms Davitt.
Both defendants made persuasive submissions as to why I should refuse the application. Having further considered the situation in the lunch break, I concluded that there was a fundamental difficulty with the application, which was that no report or evidence of Ms Davitt was available to consider, and so all the matters that would be brought to bear on the decision as to whether leave should be given could not be applied as no "report" existed. I offered two alternatives: I would dismiss the notice of motion and give reasons on the record for doing so, or the plaintiff could withdraw the motion and file it when there was material available to allow proper consideration of the issues.
Mr Newell took instructions and decided to formally withdraw the motion. There was no position reserved. Evidence being complete, discussion was then held as to an appropriate date for oral submissions for the trial and for exchange of written submissions.
No report or material from Ms Davitt ever arrived.
In the context of a complete failure to provide any written submissions due 17 January 2022 because of the ill-health of Mr Newell, the plaintiff filed a notice of motion on 8 February 2022, seeking leave to rely on costing expert reports of a Ms Sharon Drew.
No prior notice of the fact that this report was being sought (apparently since December 2021) was provided to the solicitors or counsel for the defendants.
The defendants had filed and served their written submissions on 10 December 2021 in accordance with the Court's orders. Despite corresponding about the absence of those submissions, nothing at all was said by Mr Muriniti about his retaining of Ms Drew.
The Court was told nothing at all, until 14 February 2022 which was the date for resumption of the hearing in the Fees proceedings.
The Court was informed that day and accepted that due to Mr Newell's ill-health he had not been able to prepare submissions and was not well enough to appear that day in the Fees proceedings. The Fees proceedings were adjourned to 31 March 2022 for hearing.
An extension of time was given to Mr Newell to prepare his written submissions in the Professional Negligence matter.
The plaintiff's notice of motion was listed for hearing on 25 February 2022 and was heard on that day.
On 9 March 2022, my ruling was indicated by email to the parties confirming that the plaintiff's application to reopen was refused, the notice of motion dismissed and leave to rely on the affidavit and further expert material of Ms Drew was refused.
At the directions hearing on 10 March 2022 that position was confirmed on the record, and a date was set for oral submissions in the Professional Negligence proceedings of 29 March 2022.

Reasons for refusing leave to the plaintiff to re-open the proceedings to rely upon the opinion of Ms Drew

The evidence relied upon in support of the application to reopen comprised an affidavit of Mr Muriniti sworn 8 February 2022 and a volume of material that comprised the two reports of Ms Drew.

(i) Plaintiff's submissions

Mr Newell submitted that the justice of the case demanded the orders sought be made. He relied upon the principles in Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 and s 56 of the Civil Procedure Act 2005 (NSW) to the effect that one of the real issues in dispute in the proceeding was the "costs as damages" aspect of the claim and if the Court did not allow the plaintiff to put forward evidence that supports that part of the plaintiff's claim, it would not be acting in the interests of justice. He submitted the Court had "left open" the option to call further evidence.
Mr Newell submitted that if the plaintiff was "shut out" from leave to call this evidence, proving as it does, the reasonableness of the costs part of his claim, then the claim could be dismissed. It would at the least cause serious prejudice to the plaintiff.
Mr Newell submitted that Mr Muriniti had made an "innocent mistake" in failing to obtain evidence of this nature.
Mr Newell submitted that the balance of convenience applies. There is no prejudice to the defendants. There would be no "great delay". By that Mr Newell stated that he meant that there would not be much additional real-time in-court.
In summary, this material goes to a real issue in dispute, and the plaintiff should be allowed to litigate it, the issue being the reasonableness of costs claimed in respect of work undertaken as a consequence of Noel's reliance on the inadequate advice of Mr Kelly and Mr White.
Mr Newell submitted that nobody cross-examined Mr Muriniti regarding the reasonableness of his costs, and so the defendants could not now claim they were prejudiced.

(ii) First defendant's submissions

Ms Horvath submitted that Mr Newell had closed his case, subject only to "the evidence of Ms Davitt", and not subject to "evidence of an expert" on a particular issue or question in circumstances where issue had been taken about the admissibility of Ms Davitt's evidence (weeks before the trial) and the plaintiff's case was closed.
Second, the notice of motion filed on the last day of the hearing was formally withdrawn and there was no conditionality associated with that withdrawal.
Third, there is a significant question mark over the relevance of the material in Ms Drew's report. The questions asked of her do not sufficiently address the "costs as damages" aspects of the plaintiff's claim. The responses provided are insufficiently detailed to assist the Court. For example, comments regarding the 11 September 2017 costs agreement are irrelevant because this is not part of pleaded case.
Fourth, assumptions are made in the report by Ms Drew about what Noel would have done in certain circumstances, but because this report was not on the table there was no cross-examination of Noel about that.
Fifth, there are other matters that would require cross-examination of Mr Muriniti on the issue of whether his fees are fair and reasonable, and of Ms Drew regarding assumptions she has made to that end.
In respect of the second report, the questions posed for that report are problematic and assume that conclusions reached by Ms Davitt in her first report are correct.
There is an assumption made that the prevailing legislation is the Legal Profession Act as opposed to the Uniform Law. There are problems with the assumption. It requires a clarifying pleading. It is something that would need to be the subject of recalling Mr White as well as Mr Muriniti to examine those assumptions. There may also be a Jones v Dunkel inference available if Mr Newell does not give evidence on the question of reasonableness of his fees.
Ms Horvath concluded that prejudice to the defendants would be significant. The introduction of the reports would require up to 3 days of in-court time, putting aside preparation and other considerations, such as whether and when the defendants would retain an expert report in response.
The prejudice cannot be met by costs because there is a significant question mark over Noel's ability to pay costs.
A forensic decision was made not to cross-examine Mr Muriniti about the reasonableness or otherwise of his costs based on the evidence that was on the table when the case commenced, and to change that position now would require a change in approach.
In terms of the exercise of discretion to allow the plaintiff to reopen his case, there was a lack of candour on the part of the lawyers in corresponding with the defendants but failing to mention, between early December 2021 and 8 February 2022, that these reports were being sought.
There is public interest in finality of litigation given it concerns events of 12 years ago and the proceedings were commenced over five years ago.

(iii) Second defendant's submissions

Mr Griscsti adopted all of Ms Horvath's submissions and added another relevance issue, pointing out that Ms Drew's report addressed the claim made by particular 54(h) of the amended statement of claim, but the Court had been provided with no submissions as to how or why that claim could be pressed when the part of the Fees proceedings that raised that issue has been discontinued some years ago.
Second, there is no causal connection with any such damage established on the evidence and so the report in respect of that aspect has no utility at all.
Mr Griscsti also complained about the potential for significant consequences to his client in terms of costs and further hearing time. He agreed that the leave sought could add up to three days of in-court evidence and would cause delays. There was no proper explanation for what had taken place. The explanation provided by Mr Muriniti in his affidavit was not sufficient.

(iv) Plaintiff's response

In response Mr Newell submitted that he was of the opinion these matters would take only one day. Even if it would take three days, they were three days that should always have comprised part of the trial. He suggested that Noel in fact owned property (although there was no evidence of that before the Court) and that costs thrown away, even if ordered, would "not be much".

Decision regarding leave to re-open

Whenever any power is exercised under the Civil Procedure Act or the Rules of the Court, it must consider the overriding purpose of the Act and Rules, to facilitate the just, quick and cheap resolution of the real issues in the proceedings.
This does not mean, as Mr Newell implicitly submitted, that s 56 is authority for the proposition that every issue a legal representative considers ought to be ventilated, or any evidence that should be led can be led or ventilated at any time, and at any cost, no matter how late, or how unfair to the other parties.
Section 56(3) provides specifically that a party to civil proceedings is under a duty to assist the court to further the overriding purpose and to that effect, participate in the processes of the court and to comply with directions and orders of the court.
The plaintiff and his lawyers have had years to prepare his case. To do so inadequately, and then to at the last minute when the Court will not countenance badly prepared inadmissible expert evidence, seek to derail and delay proceedings that are basically completed, in order to try a new approach and introduce evidence that should have been obtained and served years before, is an approach that should not be accepted.
Section 57 of the Civil Procedure Act provides for objects of case management: 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects - (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).
Whilst no one factor should be considered to be more important than the others, and the just determination of proceedings is crucial, I must also consider efficient disposal of the business of the Court as well as judicial and administrative resources, the timely disposal of the proceedings and the costs implications for the parties in the decision I make.
As set out in s 58 of the Civil Procedure Act, when considering what the dictates of justice are in a particular case, I must have regard to the provisions of ss 56 and 57 and may also have regard to the factors set out in s 58(2)(b): 58 Court to follow dictates of justice …. (2) For the purpose of determining what are the dictates of justice in a particular case, the court - …. (b) may have regard to the following matters to the extent to which it considers them relevant - (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
These are proceedings of some complexity factually, but the issue of admissibility of an expert report is basic and the principles that apply are clear. Also Ms Davitt's reports were obtained very late only weeks before the trial and Ms Drew engaged even later and inexcusably so.
I am persuaded by the submissions made by Ms Horvath and Mr Griscsti. The dictates of justice militate against granting the orders sought by the plaintiff. Proceedings had by the time of the notice of motion been on foot for over five years. The question of how the plaintiff was to prove his loss was there from the beginning.
I do not accept that it was a "mistake" by Mr Muriniti not to organise appropriate evidence. Even if it was, the delays in obtaining it are just not adequately explained. In my opinion he and Mr Newell decided to take the punt on the woefully inadequate and inadmissible expert reports of Ms Davitt and only when that failed, tried to have the proceedings adjourned. When that too failed, the evidence having closed, Mr Muriniti surreptitiously set about obtaining further evidentiary material, rather than ensuring compliance with the Court's orders for written submissions.
Nor am I persuaded that the reports of Ms Drew do much, if anything, to support or augment the claims of loss that are made. Large parts of the reports are irrelevant. There is focus on questions that are not germane to any issue I have to decide, or that provides any valid basis for the loss(es) claimed.
It is unfair to the defendants, who have acted entirely in accordance with the Court's orders and directions, to now be faced with more delay and a forensic "undoing" of the cases they have put in response to the plaintiff's case as it was presented without any admissible costs expert support.
I am of the view also that the prejudice to the defendants cannot be adequately dealt with by a costs order. Putting aside the question of whether the costs can or will be paid (and there is no evidence before me that they can and Mr Muriniti deposed to his client being impecunious) - the inconvenience to the defendants is of a high order, and the cost and inconvenience to the Court is also of a high order. The application is refused with costs.

The case pleaded against Mr White and Mr Kelly SC in tort and misleading and deceptive conduct

The amended statement of claim filed on 11 October 2019 pleaded against Mr White a retainer commencing in December 2010, an implied term of which was to exercise reasonable care, skill and diligence in and about the discharge of the retainer.
A similar duty of care was pleaded against Mr Kelly, noting his retainer commenced in May 2011 and that he assumed a duty to Gregory and Dr Lord to exercise reasonable skill, care and diligence in and about advising them and Mr White in respect of the prospects of success in a claim against JLL.
The breaches were asserted to entail failures to properly advise at key times when "mandated advice" ought to have been given.
The first occasion is identified as before commencing proceedings: "[28] By reason of the duties at paragraphs 19 and 20, it was incumbent upon the First Defendant, and by reason of the duty pleaded at paragraph 24 it was incumbent upon the Second Defendant to advise Gregory and Lord that: (a) There were no reasonable prospects of proving negligence against Jackson Lalic in view of the matters pleaded at paragraph 15 above; and (b) There were no reasonable prospects of proving that there was any causal connection between any alleged negligence of Jackson Lalic and Gregory and Lord's adherence to the Consent Orders; and (c) Even if negligence and causation could be established, the recovery of damages by Gregory and Lord was dependent on proof of actual financial detriment suffered, or shown on the balance of probabilities would be suffered, by Gregory and/or Lord by reason of their adherence to the Consent Orders; and (d) That in the known circumstances such detriment, if any, was dependent on showing a financial impact of the alleged negligence in the circumstances leading to the apprehended bankruptcy; and (e) That the lack of any such detriment is ascertainable from the basic facts set out in paragraph 22; and (f) That prima facie there were no damages likely to be recoverable as a consequence of Jackson Lalic's alleged negligence even if such negligence could be proved ("the Mandated Advice")."
The second occasion was at the time of filing the amended statement of claim in April 2012 adding Noel as a plaintiff: "[48] In the premises of the First Defendant's duties pleaded at paragraphs 46 and 47 and of the Second Defendant's duty pleaded at 41, it was incumbent upon the First Defendant to advise the Plaintiff, and incumbent upon the Second Defendant to advise the First Defendant and/or the Plaintiff (prior to him becoming a Plaintiff in the Jackson Lalic Proceedings) that: (a) There were no or no reasonable prospects of proving negligence against Jackson Lalic; and (b) There were no or no reasonable prospects of proving that the alleged negligence of Jackson Lalic caused Gregory and Lord to adhere to the Consent Orders; and (c) There were no or no reasonable prospects that any damages were occasioned to Gregory and/or Lord by reason that they adhered to the Consent Orders; and (d) There were no or no reasonable prospects of resisting Jackson Lalic's contention that the claim against that firm was answered by The Immunity without adopting the argument that (on the High Court Authority of D'Orta Ekenaike v Victoria Legal Aid), the Immunity did not apply in the case of a consent judgment but would only apply in respect of alleged negligent acts or omissions which lead to a final judgment on the merits ("The Required Advice")."
The third occasion for "mandated advice" and the content of it is pleaded in par [49] of the amended statement of claim as the time of the conferences on 15 and 17 April 2013 and further, that at the conferences on 17 April 2013, September 2013 and November 2013, particular "misrepresentations" were made: "[49] In breach of the duties pleaded at paragraphs 41, 46 and 47, the First and Second Defendants failed or omitted at any time to give the Plaintiff the Required Advice, and, contrary to their said duties, provided and systematically continued to provide to the Plaintiff advice which was negligent in that: (a) The Plaintiff repeats the matters pleaded at paragraphs 36, 40 and 43; and (b) At a conference on 17 April 2013 ("the April Conference") attended by the First Defendant, the Second Defendant, the Plaintiff and Gregory, the Second Defendant represented that the Jackson Lalic Damages were the Statement of Claim Damages. Particulars (i) Express statement by the Second Defendant that the Statement of Claim Damages were the damages recoverable in the Jackson Lalic Proceedings; (ii) Statement to the effect that insofar as the position of Jackson Lalic was that Gregory's bankruptcy militated against the recovery of damages such position was misconceived as the damages flowed from the Consent Orders and not from the bankruptcy; (iii) In the premises of (i) and (ii) an implied statement that the Plaintiff could disregard the fact of the bankruptcy and the circumstances which led to the bankruptcy for the purpose of considering what damages could be expected by him to be recovered from Jackson Lalic; (iv) The Plaintiff relies upon the terms of the Amended Statement of Claim - paragraph [14] - and the silence by the Second Defendant as to any qualification of those terms. (c) At a conference on 13 September 2013 ("the September Conference") attended by the First Defendant, the Second Defendant, the Plaintiff and Gregory the Second Defendant represented that the Jackson Lalic Damages were the Statement of Claim Damages. Particulars The Plaintiff repeats particulars (1) and (4) under sub-paragraph 49(b). (d) At a conference on 28 November 2013 ("the November Conference") attended by the First Defendant, the Second Defendant, the Plaintiff and Gregory, the Second Defendant represented that the Jackson Lalic Damages were the Statement of Claim Damages. Particulars The Plaintiff repeats particulars (1) and (4) under sub-paragraph 49(b). (e) The First Defendant acquiesced in, did not correct and thereupon adopted the representations made by the Second Defendant at the April, September and November Conferences whereby the First Defendant conveyed to the Plaintiff that such advice of the Second Defendant was correct and could be relied upon."
The misleading and deceptive conduct allegation has its origin in the same subject matter, that being that representations were made that both defendants had the requisite skill and ability to advise, and that the failure to give the "mandated advice" and making the "impugned misrepresentations" constituted misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law: "[52] The Careful Opinion Representations were each and all: (a) Continuing representations; (b) Made in trade or commerce; and (c) Constituted misleading and deceptive conduct in contravention of section 18 of the Australian Consumer Law (NSW) ("the ACL") as implemented by section 28 Fair Trading Act 1987 (NSW). Particulars of Falsity (i) The First and Second Defendants, from the time that they were under a professional duty to advise in relation to the merits of a claim against Jackson Lalic Lawyers, had repeatedly failed or omitted to exercise proper care skill and consideration in relation to advising Gregory, Lord and the Plaintiff in that matter and the Plaintiff repeats the matters pleaded at paragraphs 21, 26, 27, 28, 29, 36, 40, 43 and 49 above. (ii) Insofar as the Careful Opinion Representations were a representation of opinion there were no reasonable grounds for those opinions. [53] In reliance upon or because of: (a) The advice pleaded at paragraphs 36, 40, 43 and the Careful Opinion Representations pleaded at paragraph 50, the Plaintiff became a plaintiff in the Jackson Lalic Proceedings and thereupon took responsibility for the consequences of those proceedings and would not have done so but for the said advice and representations; and (b) In reliance upon or because of the advice pleaded at paragraphs 36, 40, 43 and 49 and the Careful Opinion Representations pleaded at paragraphs 49 and 50, the Plaintiff continued thereafter to prosecute the Jackson Lalic Proceedings; and (c) In reliance upon or because of the advice pleaded at paragraphs 36, 40, 43 and 49, and the Careful Opinion Representations pleaded at paragraphs 50 and 51, the Plaintiff, on or about 2 November 2015, was induced to execute a costs agreement and Deed ("the Costs Agreement and Deed") with the First Defendant and would not have executed the Costs Agreement and Deed but for the said advice and representations."
The claim of loss and damage is said to be the same for the alleged contraventions of the Competition and Consumer Act 2010 (Cth), Sch 2 Australian Consumer Law (NSW) and the breaches of duty and is set out in par [54]: "[54] In consequence of the breaches of duty pleaded at paragraph 49 and of the contraventions of the ACL pleaded at paragraphs 50 and 51, the Plaintiff has suffered loss and damage and has been put to expense. Particulars of damages (a) All monies paid by the Plaintiff to the First and Second Defendants in respect of the Jackson Lalic Proceedings in the Supreme Court following the assignment of the rights of the Jackson Lalic Lawyers Proceedings to the Plaintiff. (b) The difference between the costs recovered on a party/party basis from Jackson Lalic Lawyers and the liability for legal costs which the Plaintiff has to L.C. Muriniti & Associates, Solicitors ("LCM") being an amount of approximately $350,000.00. (c) Interest on the approximately $350,000.00 being the sum referred to in subparagraph (b). (d) Costs of and incidental to the taxation of costs in the High Court on a party/party basis. (e) The liability which the Plaintiff has to LCM Solicitors for all work undertaken by LCM Solicitors to settle the Jackson Lalic Proceedings once the Plaintiff discovered that no damages could be proved against Jackson Lalic Lawyers. (f) Monies loaned to Gregory to finance the Jackson Lalic proceedings which monies the Plaintiff would not have loaned but for the negligent assurances given by the First and Second Defendants to Gregory and to the Plaintiff that the Jackson Lalic Proceedings had good prospects of success. (g) All monies paid by the Plaintiff to the First Defendant following the assignment of the Jackson Lalic proceedings to him and the termination of the First Defendant's retainer. (h) The costs and expenses incurred by the Plaintiff in setting aside or seeking to set aside the Costs Agreement and Deed by way of mitigation of damage caused by the Plaintiff's reliance upon the advice and representations of the First and Second Defendants. (i) The costs to the Plaintiff of discharging any obligations by reason of the Costs Agreement and Deed. (j) Such further and other costs and damages as well be provided at a reasonable time prior to the hearing of the proceedings."
During addresses, Mr Newell conceded that he could not, and did not press the losses described in (i) and (j) and conceded that there was no evidence of (f).
In par [20] of the amended statement of claim, in a pleading against Mr White, there appears to be a faint attempt to widen Mr White's duty of care with the words: " to advise in relation to vital interests arising out of their dealings with the ANZ", but I interpret that pleading as raising nothing of substance that can support any wider duty of care than that imposed at law and as pleaded in par [18] of the amended statement of claim.
In his Defence to that paragraph, Mr White pleaded that he was retained to seek the opinion of a senior counsel, namely Mark Speakman SC, regarding Supreme Court of NSW proceedings 2008/00279905, corresponding Consent Orders, and what Gregory and Dr Lord described as the "unconscionable behaviour of the ANZ", that Mr Speakman's advice was that there seemed to be a prima facie case against JLL for professional negligence, and that based on Mr Speakman's advice, he was prepared to commence proceedings against JLL. Breach of duty of care is denied, causation is disputed and in answer to the whole of the amended statement of claim, it is pleaded that Noel entered into a deed of settlement which had the effect of dismissing the proceedings and bearing his own costs of those proceedings. There are also allegations of failure to mitigate in taking no steps to enforce all of the costs orders awarded to him after the High Court proceedings. It was also asserted that liability is limited by the Law Society of NSW scheme, and that Mr White is immune from suit by reason of the operation of advocate's immunity.
In the Defence filed for Mr Kelly, breach of duty is denied. It is asserted that JLL was negligent (the particulars in the initiating statement of claim in the proceedings against JLL are reproduced at 7(d) of the Defence to the amended statement of claim as follows): "7. As to paragraph 14, the second defendant says: …. (d) In breach of retainer breach of duty, JLL was negligent in and about advising Gregory Attwells and Dr Lord by: (1) Advising Gregory Attwells and Dr Lord to consent to a judgment against themselves, in favour of the ANZ bank, in the sum of $3,399,347.67, when Gregory Attwells and Dr Lord did not have a liability to the ANZ bank for $3,399,347.67 or anything like that sum. (2) Advising Gregory Attwells and Dr Lord to consent to a judgment against themselves; and in favour of the ANZ bank, in the sum of $3,399,341.67, when the claims against them in the proceedings, even if wholly upheld against them, would not result in Gregory Attwells and having a liability to the ANZ Bank for bank for $3,399,347.67 or anything like that sum. (3) Advising Gregory Attwells and Dr Lord that if they defaulted in payment of the sum of $1,750,000 by 19 November 2010, it would not make any difference if the judgment in their favour of the bank was for $3,399,347.67. (4) Failing to advise Gregory Attwells and Dr Lord that the effect of the Consent Orders was that if Gregory Attwells and Dr Lord defaulted in payment of the sum of $1,750,000 by 19 November 2010, there would be judgment against them for $1,543,225.39 more than the guaranteed amount of $1,856,122.28. (5) Failing to advise Gregory Attwells and Dr Lord that if Gregory Attwells and Dr Lord defaulted in payment of the sum of $1,750,000 by 19 November 2010, and the securities were sold by the ANZ bank for a sum in excess of $1,150,000 the ANZ bank would, as a practical matter, be entitled to any excess up to $1,543,225.39 and Gregory Attwells and Dr Lord would be at risk of being bankrupted for any shortfall against the judgment of $3,399,347.67. (6) Failing to advise Gregory Attwells and Dr Lord that the value of the claim against them was not $3,399,347.67 but was limited to judgment in favour of the ANZ bank in the guaranteed sum of $1,856,122.28 plus costs plus the value, if any, of the claim for wrongful detention of the goods made the subject of the proceedings. (7) Failing to advise Gregory Attwells and Dr Lord that no legally binding settlement came into existence unless and until terms of settlement had been signed and, instead of consenting to judgment against them in the sum of $3,399,347.67 and agreeing to the other orders contained in the Consent Order, there were other alternatives they could pursue including making a counter offer of judgment against them in relation to the guaranteed sum of $1,856,122.28 in lieu of $3,399,347.67 and, failing agreement by the ANZ bank, resuming the hearing. (8) Failing to advise Gregory Attwells and Dr Lord of the advantages and disadvantages of the alternatives that were available to them instead of signing the Consent Order, including making a counter offer and resuming the hearing. (9) Failing to seek the advice of Senior Counsel on the alternatives that were available to Gregory Attwells and Dr Lord in the event that the ANZ bank insisted on judgment against Gregory Attwells and Dr Lord in the sum of $3,399,347.67. (10) Failing to advise Gregory Attwells and Dr Lord that they should refuse to consent to judgment against themselves for an amount which they did not owe. (11) Failing to advise Gregory Attwells and Dr Lord that they should refuse to consent to orders on conditions over which they did not have control. (12) Failing to advise Gregory Attwells and Dr Lord that the way that the Consent Orders worked, namely, was to impose a judgment of $3,399,347.67 upon them in the event that they were unable to refinance or sell the securities before 19 November 2010, was draconian arid punitive. (13) Causing Gregory Attwells and Dr Lord to incur a liability they did not owe. (14) Causing Gregory Attwells and Dr Lord to be harmed in their credit standing and repute by entry of a judgment against them in the sum of $3,399,347.67. (15) Failing to advise Gregory Attwells and Dr Lord not to sign the Consent Orders. …. and that if competently advised, Gregory and Dr Lord would not have signed the Consent Orders. It is pleaded that at all relevant times that Mr Kelly held and gave an opinion, his opinion was (a) correct, and/or (b) open to be held and was genuinely held by him and/or (c) was formed and expressed without any breach of retainer, breach of duty, negligence or misleading or deceptive conduct on his part.
Mr Kelly also pleaded advocate's immunity and that the cause of the loss was the plaintiff entering into the 2016 deed of settlement and that by his doing this, Noel abandoned his entitlement to damages against JLL and caused his own loss. There is also a pleading that Noel failed to mitigate his loss by failing to enforce all of the High Court costs orders.

The evidence and my assessment of the credibility of the deponents

The evidence for the plaintiff comprised three affidavits of Noel Attwells, two sworn 12 May 2020, (the shorter affidavit being directed to damages), and one sworn 26 November 2020, also largely directed to the "costs as damages" part of the claim.
Also read and relied upon were three affidavits of Leonardo Carlo Muriniti sworn 30 September 2021, 11 October 2021 and 23 November 2021, and an affidavit of Barbara Jane Lord affirmed 2 December 2020.
Mr Newell also "tendered" paragraphs [17], [18], [19] and [21] of Mr White's affidavit of 6 August 2020 as "admissions", but these all relate to the fees proceedings and their relevance to the Professional Negligence proceedings remains opaque.
The first defendant relied on Mr White's affidavit of 11 September 2020 and the second defendant, Mr Kelly's affidavit sworn 5 August 2020.

Noel Attwells

I assessed Noel Attwells as a decent and honourable person who had, in attempting to assist his ill and financially troubled brother in his time of need, been brought into litigation he did not fully understand. I do not suggest that was in any way a result of conduct of the first or second defendant. I consider Noel's perception of what he was being told was shaped by what he wanted to hear - that is, what the good news might be if all goes well, not what the risks were or how the legal issues were still to be fleshed out and fought.
I believe Noel cannot genuinely recollect what was said to him by Gregory about the claim and its strength as opposed to what was in fact said to him by Mr White and/or Mr Kelly in conference. In any circumstance where there is a direct conflict of recollection between Noel and Mr White or Noel and Mr Kelly, I prefer the evidence of Mr White and/or Mr Kelly.

Leo Muriniti

Mr Muriniti was the next witness called for the plaintiff. I assessed Mr Muriniti to be evasive and disingenuous, giving answers he believed would further the case he was seeking to maintain, rather than giving honest recollections.
I consider the fact that he thought it appropriate to speak to Noel and "suggest to him a recollection" on the first day of hearing about the date a fee agreement was signed by Noel as a different year than he had put in his affidavit, surprising and concerning.
Mr Muriniti's explanation when questioned about this, that he did not consider there to be a problem with one material witness "reminding" another about some evidence that they did not recall, is extremely troubling. It demonstrates a lack of understanding of the basic ethical conduct required of a solicitor. Mr Muriniti proffered this answer to that question: "… either he remembered or he didn't. I expected him to truthfully tell me if he remembered. I wasn't making a suggestion to him, if he couldn't remember that would be the end of the matter."
To make matters worse, the conversation related to the date of a fee agreement where Mr Muriniti stood to profit because he had asked Noel to backdate the fee agreement by some months (or, as I have concluded, by a year and some months). The fees to be charged by Mr Muriniti and Mr Newell under this new agreement were significantly higher than the rates in the initial agreement.
The other change Mr Muriniti told Noel to make to the fee agreement was also a material one: to remove words in the fee agreement confining "success" to the recovery of damages, against the background of the separate question aspects of the case, where effectively between Mr Muriniti's engagement in October 2014 and the High Court's decision in May 2016, damages were not a possible result of the legal issues being fought, confined as they were to advocate's immunity and whether that immunity could totally defeat the claim.
There were multiple versions of the same signed fee agreement, some dated February 2015 and some dated February 2016. I found Mr Muriniti's explanation for this situation confusing, concerning and unsatisfactory.
Mr Muriniti would not agree that backdating the fee agreement to October 2014 (which to give context, was the time the work on special leave to appeal and the appeal would have begun), was in effect having Noel "take on a huge potential new exposure". This was Mr Muriniti's answer: "I don't know that I can agree to that; I just don't know. I never - I didn't see it that way; I saw it merely as Mr Attwells needing representation since Mr White was no longer on the scene and I was prepared to assist him by representing him, but I had my terms for that. The alternative was he didn't have a solicitor; he'd have to go somewhere else."
I find this answer disingenuous. The October 2014 fee schedule was $500 per hour with $600 an hour for weekends and $800 an hour for public holidays. The February 2016 "back-dating" increased the October 2014 agreement fees by more than 20%, retrospectively.
The costs disclosure sent by Mr Muriniti to Mr White on 1 February 2016 listed charge-out rates of $500 per hour with $600 for weekends and $800 for public holidays. I do not know why a more expensive hourly rate should apply for weekend or public holiday work. It is an odious practice and should cease.
The back-dated agreement, which I have concluded was in fact signed in February 2016 (given Mr Muriniti claimed this was done in the context of Mr White being suspended from practice which undoubtedly occurred in December 2015) set out an hourly rate of $600 per hour with a weekend rate of $900 per hour and $1200 on public holidays.
Mr Muriniti was unable to give any account of what was discussed with Noel about the effect of this change of rates, nor could he confirm whether he told Noel that even if successful in the High Court, at least one third of the fees were unlikely to be covered by any costs order.
The flavour of self-interest in Mr Muriniti's conduct in regard to his own firm's costs, is difficult to ignore.
There is a claim for interest in 54(c) of the amended statement of claim, although bills were only "sent" to Noel on the date his affidavits were sworn being 20 May 2020. Mr Muriniti conceded in cross-examination that there has never been any request that the costs be paid, and they have never in fact been paid. Mr Muriniti conceded, in the face of that history, that the claim for interest on costs was not maintainable.
Regretfully I have concluded that I cannot accept Mr Muriniti as a truthful witness. This has consequences for the acceptance or otherwise of any assertion by him in documents, or any factual assertions, or any assertions regarding or contained in the bills of costs that underpin the "costs as damages" claim, although that head of damages has other, even more fundamental problems to which I will come.

Mr White

Mr White impressed me as truthful. The questioning he was subjected to by Mr Newell was circular and unfocussed. Many irrelevant propositions were put to him. On many occasions propositions were put to him that were inconsistent with the evidence led and tendered by the plaintiff. On other occasions evidence just given by Mr White was misquoted back to him as a lead-in to a question. There was a repeated attempt to suggest to Mr White that he should have refused to accept Gregory and Dr Lord's account of what they understood and what they were told and not told on 15 June 2010 by Mr Shehabi and Mr Harper. This was repeated sufficiently often to amount to badgering, requiring the Court to intervene. I accept Mr White relied on Mr Kelly's advice and expertise. It was appropriate to do so in a specialised area of practice such as this.

Mr Kelly's credibility and basis for the advice he gave

Mr Kelly presented as an impressive and highly credible senior counsel who demonstrated in his evidence a careful, considered and conservative approach.
His approach to the negligence case against JLL, as revealed in his affidavit evidence, was thorough, methodical, sensible and cogent. His oral evidence was dignified, helpful and courteous in the face of poorly constructed, repetitive, obtuse and on occasion, insulting, questioning by Mr Newell.
Mr Kelly's answers and affidavit evidence demonstrated an appropriate consideration was given to the issues and that the advice given was proper and correct, based on the instructions he had been given.
His approach to the issues, the pleadings, and the conferences with his clients, in particular the methodology in taking instructions and settling the critical affidavit by Gregory, was unassailably ethical and appropriate: "The way the conversation between myself and Mr Greg Attwells went when we got to that topic going through the affidavit, and I should make it clear, I had a draft affidavit provided to me, and I was going through it, in the company of Gary White, and Greg Attwells' brother, Noel, who was present, when I got to that part of the conversation I was asking him what was said. He was giving me the answer. Where he gave me his answer in first person form I wrote it down. When he strayed from first person form, as people often do, I directed him to go back to it and tell me what was said; I wrote it down. There was no general chat of the variety that you seem to be suggesting." [2] …. "I was getting from him a narrative and evidence to prove the sequence of events, the facts which led to his signing of the consent. So, in that sense, no, I didn't look into other wider questions of his understanding of the terms or legal effect of the instrument". [3] …. "As I took him through the evidence, received detailed instructions in relation to each component of the conversation, I was listening to what he said, writing down what he said, to the extent that he spoke with conviction. The question of my doubting his truthfulness or integrity did not arise because I was there taking detailed instructions from a person who was, to my impression, plainly telling me the truth." [4] …. "Q I put it to you there was no prospect of a court accepting that Mr Attwells would have foregone the opportunity in the consent orders to refinance his properties by 19 November? A. I reject that. It's not a matter for me. I'm performing the role of giving advice on prospects, settling a statement of claim, and then further down the track performing the other tasks that I have indicated. I do not judge matters; nor do I tailor claims or evidence so as to fit anticipated outcomes. I ‑ I settle claim ‑ claims on the basis of instructions and the evidence which is made available to me; and I settle evidence on the basis of what the deponent tells me is true. I do not pass judgment on anyone or anything." [5]
Mr Kelly's approach to the potential assessment of damage was available based on his instructions and a reasonable interpretation of the law on loss of opportunity caused by JLL's negligence.
Mr Kelly's answers in cross-examination demonstrate a sound grip on the matters of fact and law relevant to assessing whether the claim had reasonable prospects of success: "Q. Was evidence of the circumstances that would have attended Mr Greg Attwells, if he accepted the $1.8 million liability, relevant to the claim? A. You're asking me for an opinion on that question? Q. Whether that evidence is relevant to the claim? A. No. Because the loss was made by Mr Attwells and Dr Lord. Mr Attwells moving from a position in which the rights he had before the impugned advice was given ‑ those rights relevant to his indebtedness to the ANZ Bank included a cap. After the event, no cap. One sees a change in ‑ in the substantive rights that the person had before and after; and one, in this case, has the advantage of being able to give a value to those rights, a value to the shift in position. The value of the debt with cap was proven by exhibit C, a certificate from the bank that the $1.8 million figure accurate to the nearest cent. The value of the liability after is the $3.3 odd million figure, equally proven. And we have in this case the additional advantage of a judgment of another court; namely the judgment of Justice Pembroke, who made various findings, including findings of extant liability for the $3.3 million figure. It doesn't matter ‑ that is the mechanism for loss. The negligence was in steam‑rollering the client, and not giving the client the benefit of an opportunity to even consider his alternatives, once there was a critical shift away from an orally agreed but obviously not legally binding settlement of 1.75 million about lunchtime, to the 3.3 million after the sun had gone down. The principles which apply, and which were at the forefront of my mind when I expressed my opinion on reasonable prospects, included several decisions of the Court of Appeal which tell us what it is that a solicitor or other legal practitioner must do at the point of advising a client about settlement. There's that Studer v Boettcher case back in the year 2000, which makes it crystal clear that the legal practitioner has to assist the client for the client to make the client's own decision, by ‑ on an informed and free choice basis. And what Mr Shehabi did was to deny these people any opportunity, however humble, to consider alternatives, by telling them that they had to sign because this had to be handed up tomorrow. It's the plainest breach of that duty, with the plainest and direct cause and effect, by moving a position ‑ the position of a person from owing 1.8 million to owing 3.3 million. The mere fact that these people were poor, for whatever reason, makes no difference to anything, in my view; because there isn't one law for the rich and one ‑ one law for the poor. [6] and regarding the approach to loss: "Q. How do you say that Potts v Miller would have assisted Mr Greg Attwells to recover damages? A. Well, the - the rule in Potts v Miller is well - is well known, it - it - it tells you that in any case of misrepresentation, innocent or - or - or fraudulent, and equally, for any other reliance based claim, which would include a case for negligent advice, the - the prima facie measure of damages is - is the - the difference between the price paid or payable and the value of the thing received. In this case, the price payable is the additional 1.5 million and the question thus becomes: was any real value received? On my instructions, no real value was received because the - the opportunity to refinance at the $1.75 million figure was utterly valueless. Amongst other things, there was a judgment on the face of the court record for 3.3 million which - which trashed the - the credit standing, but before you even get to such things, the bottom line is I was instructed that they got nothing of value. If there is an opportunity there which is to be - which may be said to have a value, and the value is proved to the satisfaction of the Court, then that, of course, would come off the value of the price paid or payable. In this case, the price is payable because it's a - it's a judgment of the Court. Not just any court, it's a judgment of the - of the Supreme Court and it's a judgment which was then made the subject of an application to set it aside, which failed. So, one has the judgment of Justice Pembroke, finding that it is an actual bet. And we know, of course, from other authority, including Murphy v Overton Investments, to which a reference has been given, that one does suffer loss where a legal - the content of a legal obligation is expanded. In this case, there was a legal - annexed legal obligation capped at 1.8 million, which was expanded to 3.3." [7]
Mr Newell proposed, (repeatedly), that Mr Kelly should have refused to believe what Gregory told him. Mr Kelly's response was measured and correct: "Q. I'm putting to you that on the basis of that evidence you should have considered that it was highly unlikely that a court would be satisfied that Mr Attwells did not know about the option to return to court and accept a judgment of 1.8 million? A. I reject that. This evidence isn't even about his state of knowledge; this evidence is about Mr Shehabi not advising in relation to a number of matters. Q. Yes, but I suggest to you for the alleged omissions to advise to have any significance in a negligence claim, the Court would have to be satisfied that Mr Greg Attwells was not fully aware of the option to go back to court and incur a liability of 1.8 million. A. The Court would definitely have to have regard when assessing the balance of probabilities to a number of things, including Mr Attwells' intellectual capacity; emotional state; state of knowledge; state of general distress and anxiety; the appalling position he found himself in along with Dr Lord at the end of this day, where from beginning to end he was subjected to one of the most disgracefully incompetent performances that one might ever imagine in one's wildest nightmare might happen to a person faced with a claim against them for millions of dollars by the second‑ or third‑biggest bank in the country." [8]
Mr Kelly's approach to Sparke Helmore's letter in November 2013 was reasonable and appropriate: "Q. You held the opinion that this Sparke Helmore's letter reflected the fact that Sparke Helmore had misconceived Mr Attwells' claim? A. No, you've got that wrong. What happened was I think it was about 12 November 2013; Sparke Helmore delivered a walkaway‑style offer. There was an appointment for a settlement conference. Between the walkaway offer and the settlement conference, this letter arrives and its purpose is obviously to put to Mr Attwells in the firmest, most aggressive terms that Sparke Helmore could muster, all the reasons that they thought were really good reasons why his claim would fail. At the head of the list was this assertion about advocate's immunity. Following that, there are other matters. This is part of a bargaining process in which the weaker party ‑ Mr Attwells ‑ is sought to be pressured into ‑ into settlement. I regarded the letter as worthy of going straight into the bin; because letters like this ‑ some solicitors write letters like this thinking that a settlement conference is an occasion for intimidation, to see if you can frighten off the other party. Mr Attwells was not ‑ was not for frightening. The analysis was wrong ‑ indeed, spectacularly wrong ‑ because we all know the ultimate outcome of the advocate's immunity point. I suggested that rather than waste time and precious costs, because Greg Attwells in particular was in financial difficulty, our time would be better spent composing a ‑ an offer of compromise, and that's precisely what we did. On 28 November, which was I think the appointed day for the settlement conference." [9]

Principles

The claims against the defendants based on negligence and breach of duty of care are determined through the operation of ss 5B, 5D and 5E of the Civil Liability Act: 5B General principles (1) A person is not negligent in failing to take precautions against a risk of harm unless - (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) - (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm. …. 5D General principles (1) A determination that negligence caused particular harm comprises the following elements - (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. (3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent - (a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and (b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest. (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. 5E Onus of proof In proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.
Section 5B essentially deals with the issue of breach of duty which is determined by reference to the common law: Adeels Palace Pty Limited v Moubarek (2009) 239 CLR 420; [2009] HCA 48 at [13], [23] and [26].
The risk of harm the defendants needed to address was put in these terms by Ms Horvath: "unless the proceedings had reasonable prospects of success, a person might commence or join in proceedings and thereby suffer economic loss in the form of payment of legal expenses to their solicitor."
This seems to me to be an appropriate formulation of the risk of harm.
Both defendants maintained the position that the action commenced first by Gregory and Dr Lord and later assigned to Noel, had reasonable prospects of success. Mr White's position was also that he was entitled to and did rely on the advice of Mr Kelly as a specialist senior counsel experienced in that area of practice.
JLL had owed a duty of care to Gregory and Dr Lord to exercise reasonable skill and diligence in the discharge of its retainer. Risk of harm in that case was sustaining loss by way of unfavourable settlement in the event that they did not receive proper advice. That is what occurred.
The breaches of duty of retainer are pleaded in Mr Kelly's Defence at par 7(d) (reproduced at [195] of this judgment) to the effect that JLL, through Mr Shehabi, advised Gregory and Dr Lord that they had no alternative but to sign the bank's Consent Orders, failed to advise them of other options such as attempting further negotiations, proceeding with the hearing or consenting to a judgment in accordance with the capped liability of the guarantee or seeking advice from counsel who had been briefed on their behalf.
The obligation of a legal practitioner advising in connection with a settlement is to assist the client to make an informed and free choice between compromise and litigation Donnellan at [96] to [97] per Beazley JA (as her Excellency then was) with whom Basten JA, Barrett JA, Hoeben CJ at CL and Sackville AJA agreed, stressing the importance of the particular circumstances of the case in assessing whether the conduct in relation to settlement negotiations where negligent. (emphasis added)
In assessing whether Mr Kelly breached his duty of care, a barrister is obliged to exercise due care, skill and diligence, bringing to the task the competence and skill reasonably expected of a barrister practicing in that area of expertise. There is only one standard: Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374 at [146] and [362].
This duty extends to doing what is reasonable in the circumstances: Rosenberg v Percival (2001) 205 CLR 434; [2001] HCA 18 at [68] and [219].
In the same territory is the observation by Callinan J in Boland v Yates Property Corporation Pty Limited (1999) 199 CLR 270; [1999] HCA 64 at [310]: "[310] In the last 20 years it is possible to point to many changes in legal thinking in and as a result of decisions of this Court. There are also a number of decisions of this Court on important matters in which different Justices have taken diametrically opposed views. All of this is to highlight the increased difficulty which lawyers face in making decisions as to the way in which to conduct some complex cases and to advise their clients."

Submissions of the plaintiff on breach of duty and causation

A fundamental premise in the plaintiff's case, Mr Newell submitted, is that it was implausible to suggest that there was "a need to explain anything" to Gregory and Dr Lord on the evening of 15 June 2010. He submitted that any suggestion to the contrary would not be accepted by any court. They had been informed by the prior negotiations that ANZ required the full debt to be paid, so there should have been "no surprise" when the Consent Orders included that as a term. It is clear that Gregory would do anything to keep the properties. Therefore, a court could not accept that they did not understand the effect of the settlement for the debt $3.39 million. They chose to accept that situation because it gave them some months to obtain finance to keep the properties.
Mr Newell submitted that if Gregory and Dr Lord could not pay the $1.75 million, it did not matter that the debt was $3.39 million, and that in any event, Gregory had been in business for years and well understood his obligations and the effect of the debt and the guarantee.
It was submitted that bankruptcy was inevitable and Mr Kelly should have known that it was, and by December 2011 he knew that it was a reality.
The extraordinary submission was made that Mr Shehabi "had nothing to tell Gregory and Dr Lord that they both did not already know".
It was also submitted, without any evidentiary basis whatsoever, that the terms of settlement proposed by the Consent Orders "would have been thrashed out" with counsel, and that at the conference with Mr Harper on the morning of 15 June 2010 Mr Harper "discussed the general question of settlement and the logic of the existing negotiations position and that the litigation of the cross-claim could not have been a paramount feature in those discussions".
Given that there was not one word of evidence from Mr Harper or Mr Shehabi to that effect, and nothing in the evidence of Gregory or Dr Lord addressed what was said at that morning conference or in discussions between counsel, these submissions are made without any basis and must be rejected.
Mr Newell made some submissions about minor inconsistencies between Gregory's 2013 affidavit, (prepared with the assistance of senior counsel), when compared with the more basic collection of thoughts contained in the December 2010 statement that was made without any legal assistance or advice but was prepared for the purposes of outlining to Mr White what happened. There is no valid comparison and I put this submission aside.
Elaborate (and pointless) argument was advanced in the written submissions as to what Mr Shehabi "would have" advised Gregory and Dr Lord. The issue is what he in fact advised them and there was no evidence put before the Court setting out what Mr Shehabi says occurred. The only accounts of what occurred are Gregory's and Dr Lord's.
In terms of s 5B of the Civil Liability Act, Mr Newell articulated the "risk of harm" against which steps should have been taken as that the persons concerned: "will commit to proceedings and continue with proceedings and be exposed to the risk of an adverse costs order". He submitted that the steps that the defendants should have taken to address that risk are that advice should have been given to Gregory and Dr Lord - and later, Noel - that there were no reasonable prospects of success, and it is then up to them if they wished to proceed.
In respect of s 5D of the Civil Liability Act, Mr Newell submitted that there was no causal relationship between what Mr Shehabi did or failed to do because what subsequently happened was inevitable, given Gregory and Dr Lord's financial situation. The $1.75 million settlement, with the potential it held to extinguish all liability for the $3.339 million debt, was "extremely advantageous", and if they secured finance, it was a "lifeline" that Gregory and Dr Lord wanted to take. Gregory wanted above everything else to keep the properties rather than settling for the guarantee amount of $1.85 million in a judgment that would be enforced immediately. Given no apparent ability to immediately refinance and pay off the debt, he would have lost the properties and any court would reject any contention that he would have decided to do anything other than taken the lifeline.
The reason Gregory and Dr Lord had no prospect of recovery of damages, despite acknowledging that damages for tort or breach of contract are assessed as at the date of breach, was that it was "obvious by December 2011" that Gregory was bankrupt and that he would suffer "no detrimental consequences" by reason of becoming liable $3.39 million rather than $1.85 million. Mr Newell submitted that the authorities indicate that a court will consider at the date of trial all the circumstances which inform the question of whether an actual loss has been suffered. He argued that "common sense" dictates that Gregory (and Dr Lord) did not suffer any recoverable loss, because there was no impact in any way of adverse economic consequences that were not already pre-ordained.
The argument of Mr Kelly that Potts v Miller (1940) 64 CLR 282; [1940] HCA 43 was a basis to address calculation of loss was said by Mr Newell to be misconceived because "common sense" would dictate that Gregory's subsequent economic position upon becoming bankrupt is what determined whether Gregory and Dr Lord suffered any loss.
In terms of the loss claimed in the form of costs incurred in the High Court, Mr Newell submitted that the correct analysis is that this loss was suffered because the defendants put Gregory and Dr Lord, and then Noel, in the position of making it necessary to appeal to the High Court because they relied on the advice of the defendants to believe that in going to the High Court, they had the potential to recover a $1.5 million claim.
Mr Newell rejected the assertion made to Mr Muriniti in cross-examination that he, (Mr Newell), gave advice as to whether the proceedings should be settled in July 2015. He said that advice was only directed to whether the High Court appeal should proceed, not whether the proceedings should be settled overall.
Mr Newell submitted that the costs agreements that form the basis of the costs as damages claim can, contrary to what was submitted by the defendants, form the basis of assessable loss. He submitted that removal of the redundant and inapplicable words from the costs agreement regarding the High Court proceedings was with Noel's consent. The change simply removed the inapposite wording "... this means that we only get paid the in the litigation in the event of a negotiated settlement between yourselves and the defendants".
It was also submitted that even if the success clause was not properly deleted, (which is not admitted), there is still a liability for Noel to pay the disbursements which were not part of the conditional provisions of the costs agreement.
Further, the appeal to the High Court was never a matter that could result in an award of damages and so it must be interpreted that the costs agreement had a mistake in it and did not reflect the intention of the contracting parties.

Submissions of the first defendant on breach of duty and causation

Ms Horvath submitted that there is a problem with the allegation that Mr White owed Noel a duty of care before he executed the deeds of assignment in March and April 2012. There is no claim corresponding to this period set out in the schedule of damages, and in any event no duty of care arises.
First, Noel has not established the existence of either a retainer or a duty which would satisfy the test in Caltex Refineries (Qld) Pty Limited v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258, and second, Noel agreed in cross-examination that he did not obtain any advice from Mr White about the JLL proceedings or the deeds prior to March 2012, but rather he was encouraged to become a plaintiff by Gregory telling him about the proceedings and that Mr White was acting.
It is accepted that a duty to exercise reasonable care, skill and diligence in advising Noel as to the prospects of success of the JLL proceedings was owed from July 2012. However, the action is not appropriately framed in Civil Liability Act terms and the relevant risk for the purposes of s 5B is not identified. This fundamental step is so important its absence can make the claim liable to be dismissed for that reason alone: Avopiling Pty Ltd v Boevski (2018) 98 NSWLR 171; [2018] NSWCA 146 at [41] to [43] Payne JA, McColl and White JJA agreeing, and United Church in Australia Property Trust NSW v Miller (2015) 91 NSWLR 752; [2015] NSWCA 320 at [100] to [101].
"Reasonable prospects" is a term found in s 345 of the Legal Profession Act. The question is addressed by reference to provable facts (in contradistinction to proven facts) and a reasonably arguable view of the law. It is not a high or inflexible bar: Newell; Muriniti v De Costi (2018) 97 NSWLR 398; [2018] NSWCA 49 at [57] per Beazley P, Gleeson and White JJA agreeing. The authorities identify that a case does not have reasonable prospects when it is so lacking in merit or substance as to be not fairly arguable: De Giorgio v Dunn (No 2) (2005) 62 NSWLR 284; [2005] NSWSC 3 at [28] per Barrett J.
Directing attention to the formulation of risk of harm proposed by Ms Horvath and set out a par [228] above, the issue is whether the pleaded claim in the JLL proceedings had no, or no reasonable prospect of success. At the time Mr White gave advice, the proceedings did in fact have reasonable prospects of success. Second, in all the circumstances, which includes the conditional fee agreement adopted by Noel and the way these agreements are construed by the courts, the risk of harm was not foreseeable.
The allegations made under the Australian Consumer Law cannot be established because there were reasonable prospects of success, and that opinion was arrived at through the application of proper care, skill and consideration. At the time the representations were made Mr White (and Mr Kelly) had a reasonable basis for making the representations. The representations were not misleading or deceptive. There is also issue taken as to whether any reliance on the representations caused the damage alleged.
Turning to the evidence Mr White, knowledge of the provable facts are based on detailed oral and written instructions about what happened on 15 June 2010. Gregory told Mr White he felt pressured into signing the Consent Orders. He provided the documents that corroborated his account of events and showed that the judgment he and Dr Lord had consented to was for a figure materially higher than the amount of the guarantee. A meticulously settled affidavit of Gregory was deployed in the proceedings and instructions given for that affidavit were consistent with the previous instructions.
Significantly, JLL never served any evidence pointing to a contrary version of events and so there is little doubt that this was more than sufficient to establish that Mr White was in possession of provable facts. Suggestions put in cross-examination and submissions that Gregory knew and understood everything he needed to, were incorrect.
Mr White obtained clear instructions from Gregory and Dr Lord as to the counterfactual that if had they known they had options, they would have taken those options, but they were not provided with any options and instead were dragooned into signing the Consent Orders.
There was no proper basis to query the accuracy of Gregory's version of events. The instructions were unequivocal and consistent.
In terms of the law, Mr White engaged senior counsel with expertise in professional negligence, first Mr Speakman, and then Mr Kelly. They both provided advice orally and in writing and Mr Kelly settled the pleading and advised on damages. They both propounded a view that the proceedings had reasonable prospects of success. Mr White relied on their advice and followed their recommendations.
Mr Kelly's evidence, which was not seriously challenged in cross-examination and was generally accepted by Noel in his cross-examination, was that Mr Kelly told Gregory and Dr Lord at the April 2013 conferences that the loss was occasioned by them consenting to judgment for $3.339 million when the liability had been capped and certified at $1.85 million and that "it had nothing to do with your bankruptcy or your capacity to pay. Loss had already been incurred by the time you went bankrupt. The judgment created a real and enforceable liability for an extra $1.5 million which you did not owe."
In the April 2013 conferences, Gregory told Mr Kelly and Mr White that they would not have gone ahead with settlement if they had a choice: "Once the $3.3 million kicked in, that was the end for us. Our credit rating was fucked".
Mr Kelly's explanation in his evidence in chief and in cross-examination indicated how damages were to be calculated. He explained the misapprehension in JLL's position on this issue. The loss crystallised on the day the Consent Orders were signed and entered, and he told his clients and Mr White that during the April 2013 conferences.
It is evident from Gregory's evidence, corroborated by Dr Lord, that being told they had to sign the document and it had to be handed up in court the following day, meant that they were deprived of legal advice on the legal effect, as distinct from the practical or quantitative effect, of the orders, that was an immediate verdict and judgment in the sum of $3.39 million with an opportunity to pay a lesser amount. Any alternatives, for example rejecting the offer, consenting to the $1.85 million certified, defending the proceedings or getting Mr Harper to advise about the advantages or disadvantages of any other options were not offered. This meant they could not make an informed decision about the settlement proposed by the Consent Orders.
Once the Consent Orders were entered against them in that sum of almost $3.4 million, they were immediately worse off, because it created a real and enforceable debt against them for $1.5 million more than would have been the case had JLL not breached its duty.
The arguments posited by JLL about what occurred afterwards in terms of loss of the properties and bankruptcy were dismissed by Mr Kelly, noting that the loss does not come from the bankruptcy, (18 months after the events); it comes from the judgment. Mr Kelly maintained that position during cross-examination.
In terms of causation and reliance, the Court is required to address the two-stage causation question in s 5D of the Civil Liability Act being factual causation that the alleged negligence of Mr White was a necessary condition of the occurrence of the harm, and second, scope of liability.
Factual causation requires Noel to establish that but for Mr White's negligence, Noel would not have suffered loss: Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19. That in turn requires consideration of what would have happened had the breach of duty not occurred. Scope of liability requires consideration of whether it is appropriate for the scope of Mr White's liability to extend to the harm so caused. Section 5E makes it clear that Noel bears the onus of proof of any fact relevant to causation. He has not met that onus.
There is also a gap in the case put by Noel on the s 18 Australian Consumer Law claim because no relevant relief for that alleged contravention has been pleaded and no causation is pleaded. To the extent that s 236 of the Australian Consumer Law might apply, Noel is required to show that each head of damage claimed was suffered because of the (mis)representations pleaded.
The relevant causal connection is to be determined by reference to common sense and experience and having regard to policy and value judgments: Travel Compensation Fund v Tambree (2005) 224 CLR 627; [2005] HCA 69 at [28] to [29] per Gleeson CJ, Gummow, Kirby, Hayne and Callinan JJ. Where, as in this case, reliance and multiple causes are in issue, it may be necessary to consider whether the representation was a material contribution.
First, Ms Horvath submitted, Noel elected to become a plaintiff in the proceedings based on conversations with Gregory, not conversations with Mr White. This was established in cross-examination of Noel. Second, by October 2014 after the loss of the Court of Appeal, Noel relied upon the advice supplied by Mr Muriniti and Mr Newell to seek special leave and pursue the appeal. Noel agreed in cross-examination that it was only after the loss in the Court of Appeal and the meeting with Mr Newell that he decided that the case had merit and should be taken to the High Court. Noel then instructed Mr White to retain Mr Muriniti to run that appeal.
By this stage Mr Kelly had advised against making an application for special leave to appeal and Mr White had agreed with this advice.
Also relevant was that in July 2015, about a month before the application for special leave was heard, and prior to the expense being incurred of retaining four counsel in the High Court appeal, JLL made an offer to settle proceedings on a walk away basis. Despite Mr Muriniti maintaining that his firm had not given advice on this offer because they were only retained on the appeal and not the underlying litigation, Noel's evidence was that there was a conference with Noel and his wife and Mr Newell where Mr Newell discussed the offer and he relied on that advice because he trusted them and by then he had ceased to regard Mr White as his solicitor. Amongst other things, at that conference Mr Newell told Noel that the High Court proceedings had a "good chance" and that the proceedings could "possibly be worth $1.5 to $1.7 million". Noel's evidence about this conference included that his wife was upset and had wanted the litigation to stop. Any loss caused by the decision to refuse JLL's offer was advice given by LCM not Mr White.
Ms Horvath also argued that on proper construction of the various (and somewhat confusing) costs agreements that form the basis of the claims in damages, there are significant hurdles that have not been overcome and as a result, loss cannot be established. I will return to this point later as these particular loss and causation points are maintained by both defendants.
Finally, on the issue of proportionate liability, to the extent the claim in negligence and contravention of s 18 of the Australian Consumer Law are apportionable claims, s 34 of the Civil Liability Act applies, providing for circumstances where there is "a single apportionable claim in respect of the same loss or damage, even if the claim for loss or damage is based on more than one cause of action whether or not the same or a different kind".
Mr White has pleaded and particularised that Mr Kelly is a concurrent wrongdoer for the purposes of s 34(2) of the Civil Liability Act. Ms Horvath submitted that should the Court conclude that there is any liability on the part of Mr White, Mr Kelly should bear the majority of the liability up to 90% having regard to the fact that he was engaged specifically for the purpose of guarding against the loss of potential wrongdoing and the Court can infer that Mr White would not have acted otherwise than in accordance with Mr Kelly's recommendations and advice, and because of the potency of the conduct of Mr Kelly, given that he drafted the pleadings and settled the evidence as well as giving advice on prospects and quantification of damages. Mr White relied on this advice and relayed it to Gregory, Dr Lord and Noel. Mr White relied on Mr Kelly's overall guidance and strategic advice. If Mr Kelly decided the claim ceased to have reasonable prospects, it is more probable than not that Mr White would have followed his advice.

Submissions of the second defendant on breach of duty and causation

Mr Gricsti submitted that it is uncontroversial and admitted by Mr Kelly that he owed a duty to exercise reasonable care and skill in the discharge of his retainer. Mr Gricsti submitted that Mr Kelly did so in respect of all tasks undertaken by him during the period he was retained. He was briefed to settle the amended statement of claim to give effect to the assignment to Noel, advising and conferring with Gregory and drafting and settling his long affidavit, advising in relation to possible settlement offers and appearing before Justice Harrison and the Court of Appeal on the advocates immunity issue. Mr Kelly described his retainer this way: "Q. At the conference on 15 and 17 April 2013, you understood your task to be restricted to settling a draft affidavit. What did you understand your general brief was? A. My general brief was to act for Greg Attwells and Dr Lord in bringing proceedings against Jackson Lalic Lawyers for breach of retainer, and professional negligence. The scope of my first task was to form a view on prospects and settle the statement of claim. Further down the track a second task was added, after it transpired that both Greg Attwells and Dr Lord were bankrupted, either by the Bank of Queensland in the case of Dr Lord, or by filing his own petition in the case of Mr Greg Attwells, the task I was given changed to giving advice about the adequacy of, or rather need for a deed of acknowledgement, and then appearing if necessary when some section 60 questions were anticipated. In that process my task also became to draft an amendment to the statement of claim removing Dr Lord as a plaintiff and adding Mr Noel Attwells as a plaintiff because he took an assignment of some of the rights of his brother through his brother's trustee in bankruptcy. After that, as time moved on, the next task I was given was the task of settling the evidence. That is to say, the lay evidence of Greg Attwells. That happened on the occasion in April 2013, and then further down in time the task also included advice in relation to the settlement negotiations and the conduct more particularly of the resolution, possibly by a separate question, of the advocate's immunity issue. Further down the line in turn my brief included appearing on the hearing of the separate determination question before Harrison J, and appearing in the Court of Appeal. After the Court of Appeal hearing was concluded I was not called upon to perform any other function, although I did have a - I did have a telephone conversation with Mr White on or shortly after the date on which the Court of Appeal handed down its judgement. And I saw my function from beginning to end to apply reasonable skill, care, and diligence to the discharge of all of those tasks, meeting and fulfilling the standards applicable to my role in the profession." [10]
Mr Kelly's last significant involvement was to appear in the Court of Appeal on 23 July 2014. There was a discussion had about the result on or after 1 October 2014, Mr Kelly advising against appeal.
The focus of instructions provided to Mr Kelly were contained in the affidavit of Gregory dated 17 April 2013. The evidence provided by Mr Kelly about that process indicates that Mr Kelly's process was a thorough and diligent one.
There was a sound basis for the view that JLL was negligent. Instructions were obtained from Gregory about what the judgment sum meant in terms of being unable to obtain finance once the $3.3 million debt "kicked in".
The proceedings had reasonable prospects of success. The breaches were obvious as stated in Mr Kelly's evidence (reproduced at [223] of this judgment). The basis for assessment of loss was set out in the affidavit evidence and was further explained in cross-examination (as set out at [223] and [225] of this judgment).
Having regard to the applicable principles, there was no breach of duty of care by Mr Kelly. His advice was based on High Court authority and his view of the law was reasonably held. His affidavit and oral evidence demonstrated that his advice was both careful and his belief in its correctness honestly held.
Mr Kelly had no reason to doubt the instructions provided by Gregory for the reasons set out in his evidence (contained in pars [221] and [224] of this judgment). The failures by JLL caused loss at the time the judgment was entered, as the judgment was for a figure substantially greater than they were otherwise liable for and on Gregory's instructions the prospects of obtaining finance to pay $1.75 million were diminished by reason of the judgment.
Mr Gricsti submitted that it was never put precisely to Mr Kelly what advice he ought to have provided at various stages throughout the matter. It was not put to Mr Kelly that Gregory's affidavit was negligently settled. It was not put to Mr Kelly that he should have advised Gregory or Noel not to commence or continue the JLL proceedings.
Mr Kelly rejected the assertion put to him that it was highly unlikely a Court would accept Gregory's evidence that he did not know about the option to return to court and accept the judgment of $1.85 million on the guarantee. Mr Kelly's evidence was that he conferred with Gregory over a period of approximately seven hours, and formed the view that he was telling the truth.
Mr Kelly explained why he considered the analysis in the Sparke Helmore 12 November 2013 letter was wrong. It was not put to him that any part of that letter relating to loss or otherwise was correct nor that Mr Kelly's opinion that the analysis in the letter was wrong, was incorrect.
Mr Gricsti noted that Mr Newell was essentially invited to put to Mr Kelly any proposition identifying why it was contended that there was no loss but this did not occur, including a question from the Court: "Is there a proposition or a consideration or a relevant matter that you have identified, Mr Newell, that you wish to put to Mr Kelly as something he failed to consider?".
In respect of s 5B Civil Liability Act criteria, the relevant precautions required were the exercise reasonable care and skill in advising and otherwise acting on behalf of the plaintiff and the evidence comfortably establishes that those precautions were taken. The action in negligence fails.
In respect of the Australian Consumer Law claim, to the extent that there was in fact the representations claimed, they were not misleading or deceptive because the proceedings did have reasonable prospects of success and that view was arrived at through the application of proper care, skill and consideration and accordingly this claim also fails.
In respect of causation, the claim is in respect of, effectively, four separate components described as "wasted costs" identified in the plaintiff's Schedule of Damages.
First there is a factual causation issue because the decision made to proceed with the Special Leave application was based on advice from Mr Newell and not anything said by Mr Kelly.
Second, the offer made in mid-2015 was discussed with Mr Newell and Mr White and the offer was rejected and an offer of $350,000.00 plus costs made in response. The evidence of Noel indicated that he was being guided by LCM about that offer, who at that point were the solicitors he trusted.
Given those facts, it is not appropriate that any act or omission of Mr Kelly be considered as having caused the alleged wasted costs after the judgment of the Court of Appeal.
All the costs incurred in the High Court were incurred as a consequence of the involvement of LCM. It simply would not be appropriate for the scope of any liability of Mr Kelly to extend to the loss claimed.
The same causation principles apply to the Australian Consumer Law claim, incorporating the common law principles discussed by the High Court in March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506; [1991] HCA 12.

The Schedule of Damages - a problematic basis for loss

Both Ms Horvath and Mr Griscti made submissions about the problems with the Schedule of Damages.
The Schedule of Damages confirmed by Mr Newell to be the basis of the claim for loss identified a figure of $681,971.00 comprising four distinct amounts: costs incurred by Noel in the JLL proceedings in the sum of $68,400.00, High Court costs in the sum of $350,612.00, invoice 874 being costs post High Court to settle JLL proceedings of $60,000.00, and invoice 873, costs in the Fees proceedings said to be $207,926.00.
Each of these claims is problematic.
"The High Court costs" and invoices 874 and 873 are said to be payable to LCM. It is disputed that there is a liability to pay such costs by reference to any costs agreement entered into by Noel.
The cost for the JLL proceedings include amounts paid from a source other than Noel (a sum of $17,000.00), as well as amounts which, on Mr White's evidence, are duplicated (a sum of $5780). In addition, Mr White's affidavit of 6 August 2020 stated that Mr White paid to the plaintiff the sum of $38,296.75 in relation to these costs, but no credit appears to have been provided for that amount.
The High Court costs are said to be the difference between the total claim for costs which was in excess of $540,000.00, and the costs certified on taxation of $196,150.00. The taxation recovery represents an amount of only approximately 35% of the costs claimed. Mr Gricsti submitted that the disparity between the costs claimed and the taxed amount is cause for concern. There is no evidence to support the position that the costs were reasonably incurred.
Invoice 874 arises from Noel's entry into a costs agreement with LCM in June 2016. There is no evidence available to support a conclusion that incurring $60,000 in costs in order for Noel to accept a walk away offer was in any way reasonable or proportionate. It is not appropriate for the scope of any liability of the defendants to extend to these costs.
The claim for invoice 873 is pleaded by reference to the costs incurred "in setting aside or seeking to set aside" the costs agreement and Deed with Mr White stated to be "by way of mitigation of damages". However no loss is demonstrated. To the extent that Noel had an entitlement in those proceedings (the Fees proceedings) to recover costs from Mr White, there has not yet been any attempt enforcement.
Claims for interest are inappropriate and problematic because the invoices were not rendered until September 2021. There has been no request for payment. The same applies to the High Court costs that appear to have been billed for the first time only September 2021.
Submissions were also made by Mr Griscti about advocate's immunity however I do not need to deal with those because the immunity only arises if the Court finds that either of the defendants were negligent or breached s 18 of the Australian Consumer Law. I make no such findings. As stated at the outset of the judgment, the claims against both defendants, in negligence and the Australian Consumer Law, all fail.

Decision

As s 5B provides, a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable, was not insignificant and in the circumstances, a reasonable person in the person's position would have taken those precautions.
The relevant risk of harm was not pleaded, but was stated by Mr Newell in submissions to be "that persons concerned will commit to proceedings and continue with proceedings and be exposed to the risk of an adverse costs order".
Ms Horvath suggested the risk of harm should be framed as: "unless the proceedings had reasonable prospects of success, a person might commence or join in proceedings and thereby suffer economic loss in the form of payment of legal expenses to their solicitor."
Adopting this as a suitable formulation of the risk of harm I have concluded that the risk was foreseeable, was not insignificant and in the circumstances, the defendants were required to take precautions to guard against that risk of harm. The precautions comprised deploying due care, skill and diligence of a standard reasonably expected of a solicitor and barrister, advising on prospects of success and commencing and maintaining the proceedings until completion and/or termination of their retainers.
I have taken s 5B(2) considerations into account when reaching that view. It is clear harm would occur if care was not taken, and the harm could be serious in terms of financial outcome, and it is an intrinsic part of a solicitor and barrister's duty of care to be mindful of those matters.
Neither Mr White nor Mr Kelly breached their duty of care to Noel (nor, in my opinion, to Gregory or Dr Lord) at any time in their retainers.
Mr White took appropriate instructions and quickly retained suitable senior counsel. He relied on advice of senior counsel as was proper.
Mr Kelly was diligent, thorough, careful and ethical in his analysis of the issues, approach to the preparation of the initiating and amended statements of claim and the important proofing of Gregory in April 2013. The proceedings had reasonable prospects of success and the pleading in the statement of claim sets out clearly and with precision why that is so.
I find Mr White to have been a credible witness who was diligent and took advice from Mr Kelly and acted on it, except when the special leave application was diverted to LCM, who then took over the running of relevant matters.
I find Mr Kelly to be impressive, reliable, highly credible, competent and considered in his evidence and in the attention that he applied to the claim he was retained to prepare and conduct. He was correct in his assessment of the conduct of JLL and to stand behind the pleading of negligence that he drafted.
The conduct of JLL on 15 June 2010 was in my opinion negligent and appallingly so. On the unchallenged evidence of Gregory and Dr Lord, what occurred that day was a professional disgrace. In my opinion, every allegation of negligence framed by Mr Kelly in the statement of claim has substance.
It was correct, as Mr Kelly stated, to examine the date of loss as the date the Consent Orders were entered. That was when Gregory and Dr Lord lost the opportunity to settle on more favourable terms, including one that was available immediately on the Court record of a debt of $1.5 million less than was entered against them.
Gregory and Dr Lord's account that they would not have entered into orders that had the effect of an immediate present debt of $3.39 million when they did not have to, should in the absence of any evidence to the contrary, be accepted. I accept that what Mr Shehabi said to them that evening, made them believe they had no choice. In my view a Court was likely to accept that evidence.
I reject the submission of Mr Newell that "they knew everything they needed to know already" and that there was "nothing" Mr Shehabi needed to tell them. Putting aside the fact that this is the man who passed Gregory a note in court, when the case had started and Mr Harper had not turned up, stating that he "did not want to be responsible for anything that happened in court", he had an obligation to be mindful of the legal effect of the Consent Orders and explain that to his clients and there is no evidence he did that. His explanation was wrong at law - "it makes no difference", and his failure to provide options and seek assistance and advice from Mr Harper, was shockingly incompetent.
At the point when JLL should have been filing their evidence, JLL applied instead to divert the case down the separate question path.
Investigation and the collating of evidence and argument on loss and damage was "parked" whilst the separate question arguments were dealt with. In light of that shape being imposed on the litigation by the notice of motion filed by JLL, different matters needed to be addressed. Given this situation, appropriate steps were taken at the appropriate times to prepare the matter.
Unfortunately, when the matter came back to the Supreme Court in June 2016 after the High Court appeal, LCM were quick to sign Noel up to a fee agreement, but the evidence reveals none of the basic requirements of inter-partes professional negligence litigation preparation was resumed, such as orders for evidence, mediation, preparation of damages evidence or briefing counsel. Instead, in a sad mirroring of the events of 15 June 2010, Noel was pressed into settling his by this time even stronger case, the advocate's immunity defence having been killed off, for a walk away position, with no signs of any substantive preparation being carried out by LCM or any advice sought from counsel experienced in the area as to how to pursue the claim properly and to prepare and structure the loss part of the claim.
What caused the "loss" being the four categories of legal fees claimed was not any negligent act or omission of the defendants, because first there were none.
The case falls at the first hurdle.
For the same reasons, the s 18 of the Australian Consumer Law case fails as well. There was no misrepresentation because the case had reasonable prospects of success, and there was no obligation to give the strained and irrelevant advice pleaded in the amended statement of claim.
Even if I am wrong about my conclusions on breach of duty and s 18, the case fails on causation, because the plaintiff has not established that any act of the defendants was a necessary condition of the occurrence of the harm.
Nor is it appropriate for the scope of Mr Kelly or Mr White's liability to extend to the harm allegedly caused, the author of which was either LCM, or LCM acting on instructions apparently given by Noel.
The "harm" claimed has been transmogrified into the Schedule of Damages, the other irrelevant or unmaintainable aspects of par 54(h) of the amended statement of claim having been abandoned. I accept the submissions of both Ms Horvath and Mr Gricsti that there are fatal problems with each part of this schedule.
With the "JLL proceedings fees" a claim of $63,433.00 (plus pre-judgment interest) allegedly paid by Noel for those proceedings is made. Putting aside whether these amounts are actually being claimed in the Fees proceedings, the figure includes $17,000.00 in payments not made by Noel, there are some double entries involving $5,780.00 and there has been no credit given for the $38,296.00 paid to Noel under the costs orders, so there is no loss, even if Noel could establish the two limbs of causation under s 5D, which he cannot.
The "High Court costs" face two significant challenges. First there is no legal liability to pay those costs established on the evidence. What agreement it is claimed gives rise to the "legal liability" to pay is unclear and there is a genuine question mark over whether any of the costs agreements are "triggered", given no "successful outcome" as defined ever eventuated. I also have disquiet over Mr Muriniti's evidence about the way the October 2014 agreement was manipulated and backdated at his request.
Second, nothing Mr White or Mr Kelly did or failed to do caused those costs to be incurred and, in the circumstances, where Mr Muriniti and Mr Newell had the running of the High Court hearing, later including briefing four barristers, causation is unclear and it is not appropriate that the scope of their liability, even if there was any, should extend to these costs.
Third, the claim for interest cannot be maintained as the costs have not been paid. The claim for interest should not have been made in those circumstances.
Tax Invoice no 874 is alleged to be costs associated with settling the JLL proceedings. First and obviously, this has nothing to do with Mr White or Mr Kelly, but relates to Mr Muriniti having Noel sign a new fee agreement in June 2016. It is not appropriate for the scope of the defendants' liability to extent to these costs.
To the extent that Mr Newell argued that these costs were "caused" by the fact that Mr Kelly and Mr White advised commencement and continuation of the proceedings before their retainers were terminated, I reject that submission for two reasons. First, LCM re-certified the statement of claim by amending it and adding Mr Harper as a defendant in June 2016 just a few days after the fee agreement commenced. Second, LCM via Mr Newell had advised Noel not to accept the walk away in July 2015 and representations were made to him by Mr Newell about the value of the case. I accept the evidence of Noel about that and reject Mr Muriniti's suggestion that no advice would have been given about the "main proceedings".
Further, Noel failed to mitigate his loss. He elected to settle the JLL proceedings on disappointing terms. There was never a decision on the merits. LCM never even pressed JLL to reveal their evidentiary hand on breach.
The claim for interest cannot be sustained. Noel was first "billed" in September 2021. Frankly that "billing" seems to have comprised him being shown the bill, not having been sent it and asked to pay it.
Finally, tax invoice 873 is for costs in the Fees proceedings that are still on foot. There are unpursued costs orders in those proceedings, and it is inappropriate to be attempting to claim those fees in these proceedings and is likely to lead to impermissible double recovery where there has been no effort made to separate out those costs that are not the subject of a costs order in his favour in those proceedings.
The plaintiff's case fails. There was no breach of duty of care, no misrepresentation, and no causally relevant loss. In any event the loss asserted is not proved and is not maintainable.

Orders

I make the following orders: 1. The notice of motion filed by the plaintiff on 9 February 2022 is dismissed with costs. 2. Verdict for the first and second defendants. 3. The plaintiff is to pay the defendants' costs of the proceedings. 4. Any alternative costs order to be sought is to be the subject of affidavit evidence and written submissions to be filed and served on or before 28 April 2023. 5. Submissions and affidavits in response to any alternative costs order are to be filed and served on or before 19 May 2023. 6. The proceedings are listed for directions at 9:00am on Tuesday 23 May 2023.

Endnotes

Tcpt, 24 November 2021, p 176(49) - p 177(25)
Tcpt, 25 November 2021, p 299(14)-(23)
Tcpt, 25 November 2021, p 299(45)-(48)
Tcpt, 25 November 2021, p 303(44)-(49)
Tcpt, 26 November 2021, p 324(41)-(50)
Tcpt, 26 November 2021, p 325(23) - p 326(11)
Tcpt, 26 November 2021, p 339(27) - p 340(2)
Tcpt, 26 November 2021, p 333(21)-(40)
Tcpt, 26 November 2021, p 335(9)-(30)
Tcpt, 25 November 2021, p 306(28) - p 307(9)

Amendments 04 April 2023 - Par [204]: removed the words "and Mr Muriniti had put in his affidavit". 05 April 2023 - Par [1]: corrected the dated "August 2012" to "July 2014". 08 May 2023 - Par 2; line 3: inserted "Attwells" after "Gregory" Par 10; line 2: removed comma after "Mr White" Par 11; line 2: removed comma after "events" Par 58; line 3: corrected "2011" to 2013" Par 67; line 11: corrected "Rules" to "Act" Par 78; line 8: inserted "and" after "offer" and removed comma Par 87; line 3: removed "at" after "that" Par 122; line 4: editing error - should be "issues about the validity of Mr White's costs agreement and deed". Par 149; line 5: editing error - should be "costs as damages" Par 160; line 2: editing error - should be "in her first report" Par 285: inserted brackets and full stop Par 287: inserted brackets and in line 4 corrected "they were" instead of "it was" Par 290; line 1: inserted "he" after the word "why" Par 326; line 3: inserted hyphen in "inter-partes" and in lines 7 and 8 removed brackets Par 329; line 1: inserted "the" after the comma Par 330; line 1: corrected "am" instead of "was". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 May 2023

Legal Profession Act 2004(NSW)

Uniform Civil Procedure Act 2005(NSW)

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (33 paragraphs)

Parties

Legislation Cited (8)

Cases Cited (36)