Attwells v White

) 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

1. 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.
2. 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

1. 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

1. 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.
2. 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.
3. 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.
4. 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

1. 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.
2. 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 …"

Gregory and Dr Lord legal advice sought about what to do

1. In late November 2010 Gregory and Dr Lord made contact with Mr White, solicitor.
2. 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".
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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".

JLL's lawyers plead advocate's immunity

1. 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.
2. 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.
3. On 1 November 2011 Dr Lord had a sequestration order made against her.
4. 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".
5. 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.
6. On 19 December 2011, Gregory went into voluntary bankruptcy. Gregory told Mr White of this on 22 December 2011.
7. 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.
8. 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.
9. 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.
10. 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.

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

1. 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."

Separate question?

1. 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.
2. On 10 July 2013 Schmidt J acceded to that application.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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."

Relevant events between the settlement of proceedings and this trial

1. 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.
2. 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.
3. 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".
4. 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.
5. 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.
6. On 18 December 2017 a notice of motion was filed by Mr Muriniti on behalf of Noel to set aside the default judgment.
7. On the same day a statement of claim was filed naming Mr White and Mr Kelly as defendants in these professional negligence proceedings.
8. 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.
9. 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.

The professional negligence hearing

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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]

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

1. 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

1. 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.
2. 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.
3. Mr Newell submitted that Mr Muriniti had made an "innocent mistake" in failing to obtain evidence of this nature.
4. 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.
5. 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.
6. 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

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. The prejudice cannot be met by costs because there is a significant question mark over Noel's ability to pay costs.

(iii) Second defendant's submissions

1. 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.
2. 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.
3. 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

1. 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

1. 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.
2. 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.
3. 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.
4. 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.
5. 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).
6. 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.

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

1. 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.
2. 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.
3. The breaches were asserted to entail failures to properly advise at key times when "mandated advice" ought to have been given.
4. 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")."
5. 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 evidence and my assessment of the credibility of the deponents

1. 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.
2. 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.
3. 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.
4. 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

1. 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.
2. 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

1. 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.
2. 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.
3. 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."
4. 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.
5. 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.
6. 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.
7. 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."

Mr White

1. 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

1. Mr Kelly presented as an impressive and highly credible senior counsel who demonstrated in his evidence a careful, considered and conservative approach.
2. 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.
3. 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.
4. 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]

Principles

1. 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.

Submissions of the plaintiff on breach of duty and causation

1. 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.
2. 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.
3. 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.
4. The extraordinary submission was made that Mr Shehabi "had nothing to tell Gregory and Dr Lord that they both did not already know".
5. 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".
6. 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.
7. 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.

Submissions of the first defendant on breach of duty and causation

1. 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.
2. 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.
3. 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].
4. "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.
5. 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.

Submissions of the second defendant on breach of duty and causation

1. 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]

The Schedule of Damages - a problematic basis for loss

1. Both Ms Horvath and Mr Griscti made submissions about the problems with the Schedule of Damages.
2. 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.
3. Each of these claims is problematic.
4. "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.
5. 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.
6. 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.
7. 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.
8. 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.

Decision

1. 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.
2. 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".
3. 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."
4. 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.
5. 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.
6. 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.
7. Mr White took appropriate instructions and quickly retained suitable senior counsel. He relied on advice of senior counsel as was proper.
8. 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.
9. 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.

Orders

1. 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

1. Tcpt, 24 November 2021, p 176(49) - p 177(25)
2. Tcpt, 25 November 2021, p 299(14)-(23)
3. Tcpt, 25 November 2021, p 299(45)-(48)
4. Tcpt, 25 November 2021, p 303(44)-(49)
5. Tcpt, 26 November 2021, p 324(41)-(50)
6. Tcpt, 26 November 2021, p 325(23) - p 326(11)
7. Tcpt, 26 November 2021, p 339(27) - p 340(2)
8. Tcpt, 26 November 2021, p 333(21)-(40)
9. Tcpt, 26 November 2021, p 335(9)-(30)
10. 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