Borgese v Cater & Blumer Pty Ltd t/as Cater & Blumer [2017] NSWSC 79 | Case summary

Supreme Court of NSW|2017-02-13|Before: Adams J, Ms J, Young CJ

Solicitors: Margiotta Solicitors & Attorneys (Plaintiff) Meridian Lawyers (Defendant) File Number(s): 2012/138861

Judgment

Domenico Borgese ("the plaintiff") was born into a family of orchardists. His parents Carmelo and Giuseppe Borgese and his five sisters all lived on the family farm outside Leeton and his parents also owned and worked a smaller farm nearby. The plaintiff left school at an early age and worked on the farms. In 1976, when the plaintiff was twenty years old, he signed a deed of partnership formalising this arrangement. His parents signed their wills on the same day. All three documents were prepared and witnessed by Mr Ian Maguire, a solicitor at the law firm of Maguire & Martin Solicitors in Leeton. That practice was incorporated into the practice of the defendant in 2000.
The plaintiff asserts that it was the intention of both of his parents that he would ultimately inherit the family farm, that his sisters would inherit the smaller farm and that he would have an option to buy the smaller farm from his sisters. That did not ultimately occur for reasons that are set out in this judgment. The plaintiff's disappointment in not inheriting the family farm as he had anticipated is at the heart of these proceedings.
The plaintiff's mother died in 1978 and his father died in 2003. In 2006 the plaintiff brought proceedings in the Equity Division of this Court under the Family Provision Act 1982 (NSW) ("the Equity Division proceedings"). Under the terms of his father's will he was to receive one sixth of the estate. Following his successful claim before Young CJ in Eq, he received half of his father's estate: Borgese v Papasidero [2006] NSWSC 407.
Six years to the day from the decision of Young CJ in Eq on 2 May 2006, the plaintiff commenced the present proceedings against the defendant for professional negligence said to have occurred on a number of occasions, commencing in 1976.
The statement of claim filed on 1 May 2012 claims that Mr Maguire was negligent when he prepared the wills and partnership deed in 1976. Damages to the plaintiff are said to have arisen in 1981 when the small farm was sold, in 1999 when the partnership was dissolved, and in 2006 when the defendant acted for Giuseppe Borgese's estate in the Equity Division proceedings.
Since these proceedings were commenced in 2012 they have suffered from continual delay. The details of that delay are addressed below at [41]-[47].
On 3 June 2016 the defendant filed a notice of motion seeking an order pursuant to r 12.7(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") that the proceedings be dismissed on the basis of want of due despatch. That motion came before Harrison J for hearing on 31 August 2016. On 9 September 2016 his Honour dismissed the motion: Borgese v Cater & Blumer Pty Ltd t/as Cater & Blumer [2016] NSWSC 1252. In so doing, his Honour expressed the opinion, inter alia, that the cause of action pleaded could not succeed. His Honour noted that there was no motion for summary dismissal under r 13.4(1)(b) of the UCPR before him.
Further directions hearings were conducted before Harrison J on 19 September, 4 and 31 October and 14 and 25 November 2016. On 25 November 2016 the matter was listed for a five-day hearing commencing on 13 February 2017.
At the commencement of the hearing before me on 13 February 2017 the plaintiff sought leave to file a further amended statement of claim ("FASOC"). The proposed changes are significant and are discussed further below. The defendant opposes the application. It is common ground that, should leave not be granted, most of the plaintiff's claim would not be pressed.
Ms Merkel of counsel appeared on behalf of the plaintiff and Mr Faulkner of senior counsel appeared on behalf of the defendant. It was agreed by the parties that the tender bundles provided to my chambers for the hearing of the matter were formally before me on the application. In addition, the plaintiff relied upon an affidavit of his solicitor Anthony Steven Margiotta, sworn 6 February 2017, annexing recent correspondence between him and the defendant's solicitor, the earlier affidavit of Mr Margiotta sworn 31 August 2016, which was before Harrison J, and a number of discovered documents pertaining to the plaintiff's family law proceedings in 2001. The defendant relied upon the affidavit sworn by Catherine Monica Osborne on 3 June 2016 and exhibits thereto, which were before Harrison J.
Before turning to consider the respective arguments concerning whether leave should be granted to the plaintiff to file a FASOC in this matter, it is necessary to have some regard to the factual background of the matter as well as the procedural history thus far.

Factual background

The plaintiff was born to Carmela and Giuseppe Borgese on 31 July 1955.
In July 1966 Carmela and Giuseppe Borgese purchased Irrigation Farm Purchase No. 1143 ("the family farm") and Non-Irrigable Purchase No. 118 ("the smaller farm"). The plaintiff commenced working on the family farm after leaving school when he was 14 years and eight months old.
In 1976 Carmela and Giuseppe Borgese retained Mr Maguire with respect to the preparation of their wills and a partnership agreement to be entered into with the plaintiff. Two pages of solicitors' note were created on 15 June 1976 in relation to this and are before me. The quality of the photocopies is poor. Counsel for the plaintiff included a typed version of the notes in her written submissions, which appeared to be accepted by senior counsel for the defendant in his submissions. The first page appears to be concerned with the partnership deed and is headed "W Pship only" It reads: "Borgese, Giuseppe Farm 1143, Yanco, Carmela, Borgese Domenico Farm 1143 Yanco, (21 in July 1976), *l/3 of profits/pay 3rd expenses, (acc{ounta)t John Callaghan, *from 1/7/76 any partner may sign cheques, Bank of NSW, Griffith branch simply G C & D Borgese".
The second page is headed "Wills" and is in these terms: " A. Executors survivor+Domenico + d(augh)t(e)r Benilda Papsidero; Survivor to take all then personal possessions 6 ways, Farm 1143 to son Domenico & implements; F(arm) 118 among 5 d(augh)t(e)rs; 3 D all residue of estate including any partnership assets; 4 Duties rateably 5 mtg on lands div.acc. to values 6 D to have r(igh)t to purchase assets at probate value within 12 months power to carry on farming."
The wills of both Carmela and Giuseppe Borgese and the partnership agreement with the plaintiff were all drafted by Mr Maguire and executed on 21 June 1976 in his presence.
The will of the plaintiff's mother dated 21 June 1976 is before me. For convenience, I propose to summarise it in the same way as Harrison J at [68] of his Honour's judgment: "I GIVE DEVISE AND BEQUEATH the whole of my property … unto my said husband PROVIDED THAT he shall survive me for three (3) calendar months AND if my husband should predecease me or fail to survive me then I GIVE DEVISE AND BEQUEATH all my property … unto my Trustee upon the trusts and subject to the declarations and powers following … (AND I DIRECT the reservation from sale of my Irrigation Farm Purchase 1143 and Non-Irrigable Purchase 118 … unless necessary for purposes of administration of my estate … AND I FURTHER DECLARE that my son DOMENICO BORGESE shall have the right to purchase any of the assets of my estate not being part of my personal possessions at the probate valuation thereof for cash payable in full by the first anniversary of my death subject to him giving notice of his exercise of option … within six (6) months after my death…"
Similarly, the will of the plaintiff's father dated 21 June 1976 was summarised by Harrison J at [70] to be in corresponding terms: "I GIVE DEVISE AND BEQUEATH the whole of my property … unto my said wife PROVIDED THAT she shall survive me for three (3) calendar months AND if my wife should predecease me or fail to survive me then I GIVE DEVISE AND BEQUEATH all my property … unto my Trustee upon the trusts and subject to the declarations and powers following … (AND I DIRECT the reservation from sale of my Irrigation Farm Purchase 1143 and Non-Irrigable Purchase 118 … unless necessary for purposes of administration of my estate … AND I FURTHER DECLARE that my son DOMENICO BORGESE shall have the right to purchase any of the assets of my estate not being part of my personal possessions at the probate valuation thereof for cash payable in full by the first anniversary of my death subject to him giving notice of his exercise of option … within six (6) months after my death…"
The purpose of the partnership deed dated 21 June 1976 was to carry out the business of orchadists on the family farm. It provided, among other things, for the procedure on retirement, death or expulsion from the partnership, succession procedure on death of a partner without a testamentary disposition, salary entitlements and the entitlements to draw from and the distribution of net profits as well partners' accountabilities, duties and obligations.
The plaintiff contends that his mother's will was read to him by Mr Maguire and that he understood that he was to inherit the family farm. He relies upon that, as well as the fact that, a few weeks after the execution of the wills, his mother said to him outside their home on the family farm: "Domenic, the house block will be yours and the other block on the far side goes to your sisters."
It is the plaintiff's case that from that date he expected that he would inherit the family farm and have an option to purchase the smaller farm from his sisters.
Following the death of Carmela Borgese in 1978, Giuseppe Borgese inherited her estate absolutely. He sold the smaller farm in October 1981. The plaintiff was not happy with this development and objected to it to Mr Maguire who acted on the sale of the property. The plaintiff asserts that he was informed by Mr Maguire that he could not stop the sale, who said: "Your father can do whatever he likes with the property. The Partnership Agreement has no validity. There is nothing you can do about it."
The plaintiff continued to work with his father on the farms and when the smaller farm was sold he worked on the remaining farm. He married in 1981.
In 1985 Giuseppe Borgese entered into a partnership with the plaintiff and the plaintiff's wife.
The plaintiff undertook other activities in addition to working on the family farm. He leased his own farm, on which he grew a crop of carrots that was not fruitful, purchased and then sold another farm and briefly operated a fruit shop business with his sister and brother-in-law at Wodonga.
In 1989 Giuseppe Borgese made another will leaving everything to the plaintiff. Mr Maguire drafted this will.
The plaintiff asserts that in or about 1998 whilst on the family farm his father said to him: "Domenic, you can manage the property and the property will be yours."
On 19 January 1999 there was a serious altercation between the plaintiff and his father on the family farm that resulted in the plaintiff being restrained from entering the farm thereafter. Apprehended violence orders ("AVOs") were taken out. Those AVOs were removed by consent on 4 February 1999.
Giuseppe Borgese approached Mr Maguire and instructed him to dissolve the partnership. The plaintiff's proposed evidence is that he tried to reach agreement with his father but could not. He blames Mr Maguire for this, suggesting that he escalated the problem in some way. With Mr Maguire acting for him, Giuseppe Borgese rescinded the partnership. He also executed a new will on 18 February 1999 with a codicil executed on 25 August 1999. At that time the plaintiff's father was 79 years of age and the partnership had been in existence for 23 years.
In late 1999 the plaintiff moved away from Leeton after separating from his wife. In 2000 family law proceedings were commenced. The plaintiff was represented by the defendant in those proceedings until August 2001.
Giuseppe Borgese died in 2003. At that time, the plaintiff was residing in Melbourne and was estranged from the family. He did not attend his father's funeral.
In 2004 the plaintiff brought the Equity Division proceedings. Mr Maguire acted for the executrix in those proceedings. During the proceedings, the plaintiff annexed to his affidavit legal advice he had received with respect to the proceedings from Mackenzie & Vardanega Lawyers on 13 April 2004. Although he was initially legally represented in those proceedings, by the time the matter came on the hearing he was unrepresented.
Mr Maguire retired from legal practice in January 2005. He handed over the carriage of the Equity Division proceedings to another solicitor working at the defendant.
In September 2005, the defendant caused the family law file to be transferred from the Family Court to the Supreme Court in connection with the family provision claim brought by the plaintiff.
The transcript of the proceedings before Young CJ at Eq is included in the material before me. It shows that the size of the estate was relatively small given that there were a number of beneficiaries including Giuseppe Borgese's grandchildren (three of whom were the plaintiff's children). The value of the family farm was estimated at $300 000 at that time, with some other assets.
Young CJ in Eq delivered his judgment on 2 May 2006. In his judgment, his Honour accepted, at [5], that there was some support for the plaintiff's proposition that "there was a contract between his father and his mother that they would make mutual wills so that the farm property would pass to the survivor, then the present farm to the plaintiff and, finally, the other land owned by the family to his five sisters."
His Honour ordered that the plaintiff receive half of his father's estate.
In the judgment Young CJ in Eq observed that the property would have to be sold and that on the basis of the information before him no family member would be in a position to buy it.
The plaintiff asserted that in June 2006 his solicitors were given only three days' notice of the proposed sale of the family farm with a date for auction set on 24 June 2006. The plaintiff contacted the defendant and said: "I don't want the farm to be sold. I will take action if the farm is sold. Any documents relating to the property or the partnership belong to me".
On 25 August 2006 the farm was sold to the plaintiff's sister Lucinda.

Procedural history

The procedural history of the matter up until September 2016 is set out by Harrison J in his judgment at [34]-[49]. For ease of reference and consistent with the overriding principles in the Civil Procedure Act 2005 (NSW) ("CPA"), it is sufficient if I extract the chronology of the delay up until that time as set out by his Honour. I have read the affidavit material that was before Harrison J and am satisfied that his Honour's summary fairly sets out the procedural history
Prior to 2014 the procedural history of the matter was as follows.
The plaintiff commenced the current proceedings by filing the statement of claim on 1 May 2012, with the affidavit verifying the claim provided on 17 May 2012. The defendant filed an appearance on 2 July 2012 and sought further and better particulars on 4 July 2012 and again on 6 August 2012. The plaintiff provided a response on 9 October 2012 as well as some clarification on 12 October 2012. Two directions hearings, on 6 August 2012 and 22 October 2012, were held with respect to the provision of further and better particulars and the filing of a defence respectively.
Following the defendant's filing of its defence on 8 November 2012, further directions hearings with respect to the discovery of documents were held on 12 and 19 November 2012 and then on 11 February, 25 March, 15 April, 6 and 27 May, 13 and 27 June and 11 July 2013.
At the next directions hearing on 25 July 2013 the proceedings were stayed until the plaintiff served a verified list of documents, with a costs order made against the plaintiff in the sum of $300.
There was an unsuccessful attempt at mediation on 12 August 2013. This was followed by the filing of the verified list of documents by the plaintiff on 20 August 2013.
His Honour's summary of the procedural history since 2014 as set out at [34] - [49] of his judgment is as follows: "34. The defendant's current solicitor became involved in these proceedings in early 2014. On 3 February 2014, she served a notice of change of solicitor on Mr Margiotta. She did not hear from him. On 3 June 2014, she wrote to Mr Margiotta requesting that he relist the proceedings in order to obtain a new timetable for the progress of the matter. That letter also warned that the defendant would seek instructions to take steps to dismiss the proceedings for want of due despatch if Mr Margiotta did not respond. 35. Mr Margiotta wrote to the Court on 27 June 2014 requesting that the matter be relisted for directions. That occurred on 6 August 2014. Thereafter, between 28 October 2014 and 16 March 2015, the defendant's solicitor sent no less than five more letters warning Mr Margiotta that the defendant would seek immediate instructions to dismiss the proceedings should further timetable breaches occur. 36. The proceedings were relisted for directions at the defendant's request on 24 March 2015. After an informal but unsuccessful settlement conference on 29 July 2015, the proceedings were adjourned by consent to 19 August 2015 for directions. The matter was in fact called up for review by Garling J on 25 August 2015. His Honour relevantly made the following orders at that time: 1. On or before 4.00pm on 30 October 2015 the plaintiff is to serve: (a) All statements of non-expert evidence under UCPR 31.4; (b) All experts' reports from experts on whose opinions the plaintiff wished to rely under UCPR 31.7. 2. Grant leave to the plaintiff to file and serve a notice of motion seeking leave to administer interrogatories by 4.00pm on 16 September 2015. 3. On or before 4.00pm on 5 February 2016 the defendant is to serve: (a) All statements of non-expert evidence under UCPR 31.4; (b) All experts' reports from experts on whose opinions the defendant wished to rely under UCPR 31.7. 4. The directions hearing on 17 September 2015 is vacated. 5. The matter is listed for directions on 11 February 2016 to discuss issues including the length of the hearing, the issues in the case and further pre-trial directions required. 37. The plaintiff breached the timetable ordered by Garling J. He neither filed nor served a notice of motion seeking interrogatories and did not serve any lay or expert evidence. Thereafter between 6 October 2015 and 17 November 2015, the parties exchanged correspondence. That correspondence dealt in part with the plaintiff's timetable defaults. 38. By letter dated 6 November 2015, Mr Margiotta indicated that he required "an extension of time to serve lay and expert evidence … and to file a notice of motion seeking interrogatories." He advised that he would "take steps to have the matter listed for further directions before the Registrar on … 18 November 2015." On the same day the defendant replied in the following terms: "Do you intend to have the matter listed for further directions before the Registrar on 18 November 2015? As you know, this matter was last before Garling J due to the ongoing breaches of the Court's timetables. In light of the reasons for the judicial call up and the fact that your client has, again, breached the timetable, we consider it is more appropriate that the matter be relisted before Garling J for further case management." 39. On 17 November 2015, the defendant wrote to Mr Margiotta asking to be told "as a matter of urgency" whether the proceedings had been re-listed before Garling J. Mr Margiotta relisted the matter before Garling J on 4 December 2015 but in his Honour's absence the matter came before the Registrar on that day instead. On 25 November 2015, the defendant wrote to Mr Margiotta putting him on notice that the defendant intended to seek to have the proceedings dismissed if the plaintiff was in breach of the next Court timetable. 40. Registrar Bradford referred the matter to Adamson J on 4 December 2015 and her Honour made the following orders: 1. Vacate the orders made by Garling J on 25 August 2015. 2. Subject to order (4) below, extend the time for the plaintiff to serve the following documents to on or before 4.00pm on 15 February 2016; (a) All statements of non-expert witnesses upon whose evidence the plaintiff wishes to rely in accordance with UCPR 31.4; (b) All experts reports upon whose evidence the plaintiff wishes to rely in accordance with UCPR 31.7; 3. Subject to order (4) below, no statements of non-expert witnesses or expert reports may be relied upon by the plaintiff unless they are served on the defendant's solicitor on or before 15 February 2016 without the leave of the Court. 4. Direct the plaintiff to serve the report of his psychiatrist on or before 28 February 2016. 5. The matter is relisted before Garling J for further directions on 4 March 2016. 6. The plaintiff to pay the defendant's costs of today. 7. Liberty to apply on three days' notice. 41. The plaintiff breached the timetable ordered by Adamson J. The plaintiff did not serve any lay or expert evidence by 15 February 2016 or any psychiatrist's report by 28 February 2016. 42. By letter dated 16 February 2016 the defendant informed Mr Margiotta that it intended to file a notice of motion to dismiss the proceedings pursuant to UCPR 12.7(1) in the event that the plaintiff failed to serve any evidence by 1 April 2016 or obtain leave from the Court to rely on the evidence served as required under Adamson J's orders made on 4 December 2015. 43. The plaintiff did not serve any lay or expert evidence, or any report from his psychiatrist, before the matter came before me on 1 April 2016 in the professional negligence list. On that day I made the following orders: 1. The plaintiff is to serve all or any evidentiary statements upon which he proposes to rely by 27 May 2016 on the condition that no further evidentiary statements will be permitted thereafter without leave of the Court. 2. The defendant, if so advised, to file and serve any motion for interlocutory or final relief with supporting affidavits by no later than 3 June 2016. 3. Reserve costs. 4. Grant liberty to apply on three days' notice. 44. I then listed the matter before me for further directions on 2 September 2016. However, the plaintiff breached the timetable again by failing to serve any evidentiary statements by 27 May 2016. Mr Margiotta advised of his inability "to finalise statements in support of the plaintiff's claim" by letter dated 27 May 2016. The defendant then wrote to Mr Margiotta on 30 May 2016 as follows: "We assume that your email means that your client is still proposing to serve statements and/or expert reports at some stage but they have not yet been completed rather than deciding to rely on a documentary case at trial. We would be grateful if you could please clarify your client's position by return mail." 45. Mr Margiotta did not reply to that letter. 46. The defendant's present motion was filed on 3 June 2016. The first listing of that motion was on 17 June 2016 before the Registrar when the plaintiff was directed to file his evidence in response to Ms Osborne's affidavit by 22 July 2016. The motion was listed for hearing on 31 August 2016 when it came before me. However, before that occurred, Mr Margiotta wrote to the defendant on 21 July 2016 in these terms: "We refer to the orders made by Registrar Bradford on 17 June 2016. You are aware that we have had many difficulties with our client in respect of this matter. We are presently finalising the plaintiff's evidence in this matter and have a further conference with counsel arranged for … 25 July 2016. We cannot comply with the order to file and serve any affidavit evidence (in response to the defendant's motion) by 22 July 2016. We hereby request a further 21 days to file our affidavit evidence in response to your motion and seek your consent to this additional period." 47. The defendant replied to that letter on 25 July 2016 as follows: "I note that your client has, yet again, failed to comply with the Court's orders. My client is prepared to consent to your request for a 21 days extension of time in which to serve evidence in response to my affidavit in support of my client's motion to dismiss the proceedings but only on the basis that giving such consent does not jeopardise the hearing date of the motion. My client intends to press for the motion to be heard on 31 August 2016 irrespective of whether or not your client has served any evidence in relation to the motion." 48. Mr Margiotta wrote to the defendant on 12 August 2016 in the following terms: "We write to advise that our client Mr Domenico Borgese will be swearing an affidavit in this matter in Melbourne on Monday next. A draft of his affidavit without annexures is enclosed herewith for your attention. We also enclose herewith a letter serving medical reports without annexures. The original of this letter with the reports will be provided to you early next week . Further, in relation to the defendant's application to strike out the plaintiff's statement of claim [sic] we have been unable to finalise our affidavits and seek some additional time to serve our affidavits." 49. On 29 August 2016, the plaintiff filed a notice of motion seeking leave to administer interrogatories."

The amended statement of claim before Harrison J

The amended statement of claim considered by Harrison J (which is the relevant pleading should leave to amend be refused) relies upon an allegation that the plaintiff's parents executed mutual wills in the presence of Mr Maguire on 21 June 1976. The claim is one of negligence, the particulars of which are pleaded as follows: "PARTICULARS OF NEGLIGENCE AGAINST THE DEFENDANTS 1. Failing to advise the plaintiff that the plaintiff's parents made mutual wills on 21 June 1976 2. Failing to provide the plaintiff with a copy of the Will of the late Carmela Borgese. 3. Failing to provide the plaintiff with a copy of the Will of the late Giuseppe Borgese. 4. Failing to advise the plaintiff that pursuant to the Mutual Wills of his parents dated 21 June 1976 he would received [sic] farm known as Irrigation Farm Purchase 1143 and all farming plant and machinery. 5. Failing to advise the late Giuseppe Borgese that after his wife's death on 21 February 1978 that he held on trust for the plaintiff the farm known as Irrigation Farm Purchase 1143 and all farming plant and machinery pursuant to the Mutual Wills of the plaintiff's parents dated 21 June 1976. 6. Failing to advise the late Giuseppe Borgese that after this [sic] wife's death on 21 February 1978 that he held on trust for his five (5) daughters the farm known a [sic] Non Irrigable Purchase 188 pursuant to the Mutual Wills of the plaintiff's parents dated 1976. 7. Failing to advise the plaintiff that pursuant to the Mutual Wills of his parents dated 21 June 1976 the plaintiff had the right to purchase any of the assets of their estate not being part of their personal possessions at the probate valuation thereof for cash payable in full by the first anniversary of his mother's death and his father's death subject to the plaintiff giving notice of his exercise of option to make any such purchase to his co-Trustee within six (6) months after his mother's death and within six (6) months after his father's death. 8. Failing to advise the late Giuseppe Borgese that he could not sell farm known as Non Irrigable purchase No. 118 Yanco No. 1 Irrigation Area to Francis Rupert Smith and Margaret Edith Smith. 9. Allowing the late Giuseppe Borgese to sell farm known as Non Irrigable Purchase No. 118 Yanco No. 1 Irrigation Area to Francis Rupert Smith and Margaret Edith to the detriment of the plaintiff. 10. Failing to advise Ms Benilda Papasidero that after the death of her mother the late Carmela Borgese, that her parents had signed Mutual Wills on 21 June 1976 and that Mr Giuseppe Borgese could no longer revoke his Will dated 21 June 1976 as he held on trust for the beneficiaries as follows: (i) The farm known as Irrigation Farm Purchase 1143 for the plaintiff; (ii) Non-Irrigable Purchase 118 for his daughters subject to the right of the plaintiff to purchase any of the assets of the Estate. 11. Failing to cease to act for the Estate of the late Giuseppe Borgese after the plaintiff commenced proceedings in the Supreme Court of New South Wales in Matter No. 383 of 2004 as the second defendant had a conflict of interest having acted for the plaintiff's deceased father Giuseppe Borgese, the plaintiff's deceased mother Carmela Borgese and the plaintiff in the preparation of a Partnership Agreement and subsequent partnership Agreements and disputes involving the plaintiff's father and the plaintiff's wife and the plaintiff's father and the plaintiff in Family Law proceedings against the plaintiff's wife Maria Leonarda Borgese. 12. Failing to advise the executrix of the Estate of the late Giuseppe Borgese, the plaintiff's sister Benilda Papasidero that she could not transfer property situated and known as Lots 149 and 374 in Deposited Plan 751694 at Yanco, Local Government Area Leeton to her sister Luciano Borgese in contravention of the Orders of His Honour Mr Justice Young dated 2 May 2006. 13. Failing to advise the plaintiff that if Benilda Papasidero proceeded with either sale he had the right to estop such sale or sales. 14. Failing to ensure that property situated and known as Lots 149 and 374 in Deposited Plan 751694 at Yanco, Local Government Area Leeton was sold to a purchaser not related to the Borgese family at proper market value and not at Probate valuation. 15. Failing to list as an asset of the Estate of the late Giuseppe Borgese in the Application for Probate of Giuseppe Borgese, one hundred and forty-four (144) shares of Class A and the corresponding Members Base Allocation in Murrumbidgee Irrigation Limited (ACN 084 943 037) a company incorporated in New South Wales. These shares related to the transfer of 144 megalitres of water from Murrumbidgee Irrigation and were the property of Benilda Papasidero as executrix of the Estate of the late Giuseppe Borgese. These shares were classified as Class A 3 (high security) and were valued at $1,500.00 per megalitre for each share. The total value of the shares was $216,000.00. The sale of these shares has not been accounted for in the Estate of the late Giuseppe Borgese. 16. Failing to account for the sale of one hundred and forty four shares of Class A and the corresponding Members Base Allocation in Murrumbidgee Irrigation Limited (ACN 084 943 037) a company incorporated in New South Wales. These shares related to the transfer of 144 megalitres of water from Murrumbidgee Irrigation and were the property of Benilda Papasidero as executrix of the Estate of the late Giuseppe Borgese. These shares were classified as Class A 3 (high security) and were valued at $1,500.00 per megalitre for each share. The total value of the shares was $216,000.00 and their subsequent sale has wrongfully not been accounted for in the Estate of the late Giuseppe Borgese."
Justice Harrison concluded that that the delay was not so great as to require dismissal pursuant to r 12.7(1) of the UCPR. In reaching that conclusion he made the following observations at [84]-[87]: 84. The plaintiff's disappointments that have been generated by his unfulfilled expectation that he would one day acquire Farm 1143 in accordance with what he contends were promises to that effect from his parents, in consideration for which or in reliance upon which he altered his position to his detriment, do not generate a cause of action against the defendant in these proceedings. I pass over the questions of whether they generate a cause of action against anyone at all, and whether such cause of action is now barred by effluxion of time or otherwise fatally compromised by the plaintiff's election to pursue alternative avenues for relief. It is clear, however, that his concerns do not coincide with the existence of a cause of action against the defendant or that it was the result of the defendant's negligence. The amended statement of claim does not come close to adumbrating any claim against the defendant suggesting that the plaintiff's parents made wills on the advice of the defendant that did not give effect to their intentions at the time. The plaintiff's affidavit and the surrounding circumstances upon which he relies do not support or suggest the existence of a possible claim by him against the defendant as a disappointed beneficiary and no such claim is pleaded. 85. I have earlier referred to the fact that the plaintiff's prospects of success will be taken to be a relevant factor. If it appears that the prospects are minimal, the discretion to dismiss the proceedings is more likely to be exercised in favour of the defendant. Conversely, where the plaintiff's case is strong, absent irremediable prejudice to the defendant, it is less likely that justice will be done by striking the action out. In the present case, I am confident that the plaintiff cannot succeed against the defendant upon the cause of action currently pleaded. I am also troubled by the fact that the delays in this case are not so egregious that the defendant's application must succeed. 86. The defendant has identified some prejudice. One significant witness has died and the memories of others may be expected to be less than perfect. By the same token, the case will in large part depend upon documents that speak for themselves or which might be expected usefully to rejuvenate failing memories. I also need to take account of the fact that the defendant, for reasons best known to it, has declined to seek to have the proceedings dismissed summarily pursuant to UCPR 13.4(1)(b). The defendant has not by this application foreclosed the possibility that it might do so in the future. 87. In my opinion, this is not a case where the delays have been such that the proceedings should be dismissed. However, if no other application is made by the defendant, it seems to me that the proceedings should be listed for final hearing as soon as possible. I have a perception that both parties are in a position to go to trial on short notice. I will no doubt be told otherwise if I have misapprehended the true position, although the plaintiff is in no position to seek further time and the defendant has indicated that it does not want it. The plaintiff's desire to interrogate the defendant should be reconsidered in the light of my earlier remarks about it. [emphasis added]
Although I am not bound to accept his Honour's conclusions, they are relevant to the exercise of the Court's discretion whether the plaintiff should be permitted to change its case at this late stage of the proceedings. In that regard it is important to note that after his Honour delivered this judgment on 9 September 2016 he made certain directions and then stood the matter over for further directions before him on five occasions as set out above at [8]. At no time during those directions hearings was it suggested that the plaintiff would seek leave to amend its pleadings prior to the hearing.

The further amended statement of claim

By letter dated 15 December 2016 the plaintiff's solicitor served a proposed FASOC on the defendant's solicitor.
By letter dated 16 December 2016 the defendant's solicitor informed the plaintiff's solicitor that it did not consent to the proposed amendments. The letter advised that, "If you insist on seeking leave to file the FASC then we suggest you do so on the first day of trial on 13 February 2017."
By letter dated 30 January 2017 the plaintiff's solicitor served another FASOC on the defendant's solicitor that was described as being a pleading which "…further develops the proposed amendments which were communicated to you in December."
By email and letter dated 3 February 2017 the defendant's solicitor informed the plaintiff's solicitor that it did not consent to the proposed amendments
At 9:35am before court on 13 February 2017 my chambers received by way of email from the plaintiff's solicitor a copy of the affidavit of Mr Margiotta sworn 6 February 2017 and a third version of the FASOC. It is this third version that I will consider for the purposes of this application.
The FASOC differs significantly from that which was before Harrison J. The cause of action now brought is based on a breach of a fiduciary duty rather than negligence. It is thus founded on equitable principles rather than on common law principles. Although it is not necessary to set out the new proposed FASOC in full, it is necessary to refer to it in some detail in order to consider the application. Ms Merkel spent some considerable time going through the FASOC in support of her submission that the plaintiff now has an arguable case.
For the first time it is now alleged that in 1976 Mr Maguire acted for all parties on a contract of partnership, which was the consideration for a testamentary contract between the plaintiff and his parents. As such he acted under a deemed retainer for the plaintiff by reason of which he thereafter owed fiduciary duties to all parties. It is now contended that when the solicitor acted for the plaintiff's father in 1981 and 2006 he did so in breach of the overriding fiduciary duty of undivided loyalty.
It is further alleged for the first time that Carmela and Giuseppe Borgese instructed Mr Maguire to draw mutual wills and that Mr Maguire owed duties to give effect to those instructions in accordance with his retainer, his duty of care and his fiduciary duty, including the duty of loyalty. In not drafting mutual wills, he breached his duty to the plaintiff.
It is further alleged for the first time that not only was there a fiduciary duty on the part of the solicitor to the plaintiff, both of the plaintiff's parents were also subject to a fiduciary duty in relation to the farm properties. That is, in order to give business efficacy to the transaction as a whole it is alleged that it was an implied term of the contract between the parties that Carmela and Giuseppe Borgese would retain ownership of both the properties mentioned in their wills. There was a corresponding fiduciary duty to do so.
It is further pleaded for the first time that Giuseppe Borgese was under a contractual duty to do everything necessary to give effect to the testamentary contract and not to make gifts or dispositions that would defeat the purpose of the mutual wills made during his wife's lifetime. It is further pleaded for the first time that Mr Maguire was aware of the facts and circumstances which placed Giuseppe Borgese under this duty.
It is further pleaded for the first time that on or about 31 October 1981 Mr Martin acted for the plaintiff. It is to be noted that that assertion is in direct contrast to a response to a request for particulars provided by the plaintiff previously. In seeking to make that assertion the previous concession is withdrawn on behalf of the plaintiff. It is now further alleged that in acting on the sale Mr Maguire was in breach of his fiduciary duty to the late Carmela Borgese and the plaintiff.
It is further alleged for the first time that, in breach of his fiduciary duty to the late Carmela Borgese and the plaintiff, Mr Maguire and/or his partners acted for the estate of the late Giuseppe Borgese in defence of the Equity Division proceedings. It is asserted that Mr Maguire had a duty to disclose that there was a testamentary contract and to resolve conflicts of duty by declining to act for the executrix of Giuseppe Borgese's estate. During submissions in support of the proposed amendment it was also submitted that, when the defendant was retained by the plaintiff in 2001 in family law proceedings, it became aware of the plaintiff's financial circumstances, which precluded the defendant from later representing the estate of the plaintiff's father in the Equity Division proceedings. It is contended that in 2004 Mr Maguire swore an affidavit in the Equity Division proceedings in which he did not disclose the full circumstances of the transaction on which he acted in 1976 and described the Wills as "joint wills".
It is further asserted for the first time that Mr Maguire was in breach of his fiduciary duties to both the plaintiff and Carmela when in 1999 he informed the plaintiff through his solicitor that he had no rights under Carmela's will because Carmela had left Giuseppe "the whole of her estate absolutely and unconditionally".
It is now pleaded that Mr Maguire knew that the plaintiff was a person in a position of special disadvantage. This assertion is based upon the fact that the plaintiff was a young adult with limited literacy. It was submitted that the transaction was likely to set the course of the plaintiff's life in the long term and exposed him to the risk of liability for partnership expenses without certainty of profit or salary. On this basis he should have received independent legal advice prior to signing the partnership deed.
Paragraphs 26A and 26AA of the FASOC are new and are in these terms: "26A in the premises Ian Stewart Denise Maguire solicitor was in breach of his duties to Giuseppe, Carmela and the plaintiff when he: a) Drew the wills of Giuseppe and Carmela (if they were mirror wills and not mutual wills); b) Failed to inform Carmela during her lifetime that he had failed to properly document the effect of her instructions to ensure that the plaintiff should receive the big farm on the death of the survivor of her Giuseppe; c) In the alternative failed to inform all the parties that a testamentary contract had been made in 1976; d) Failed to advise Giuseppe of his obligations pursuant to the testamentary contract; e) Acted in the interests of Giuseppe and contrary to the interests of the plaintiff when Giuseppe was acting in breach of the testamentary contract; f) Acted for Giuseppe in the dissolution of the partnership and in drawing later wills in a manner contrary to the testamentary contract and contrary to the instructions and wishes of Carmela; g) Acted for Giuseppe's estate against the interests of the plaintiff; h) Failed to do everything in his power to ensure that the full facts and circumstances of the wills drawn in 1976, the partnership agreement and the instructions from Giuseppe and Carmela were placed before the courts in the proceedings heard by Young C J in Equity. 26AA As a result of the negligence and breach of fiduciary duty of the defendants the plaintiff: a) Did not receive the property situated at Lots 149 and 374 in Deposited Plan 751694 at Yanco, Local Government Area Leeton (i/e/Farm 1143) following the death of the late Giuseppe; b) Was deprived of a share of the income that could be generated by the farm known as Non - Irrigable Purchase 118 from 1981; c) Was excluded from the partnership with his father from 1999; d) Was unable to obtain remuneration by his own efforts from 1999 to the date of the proceedings; e) Will be unable to obtain remuneration by his own efforts from the date of hearing until retirement; f) Was denied sufficient provision in the proceedings determined by his Honour Justice Young Chief Justice in Equity g) Has suffered disappointment and loss of enjoyment of life and serious detriment to his mental wellbeing.
The particulars of negligence set out above at [48] are now described as particulars of negligence/breach of duty against the defendants and are amended to reflect the above changes to the plaintiff's case.
The new claim relies upon assertions that had Mr Maguire not acted for the plaintiff's father in 1981 when he sold the small farm it is probable that the plaintiff would now own a profitable farm made up of both the family farm and a small farm. It is further asserted that had Mr Maguire not acted for the plaintiff's father on the termination of that partnership agreement it is "probable" that the partnership would have continued.

Submissions of the plaintiff

Ms Merkel first addressed the question of delay in the making of this application. She relied upon the Practice Note SC CL 7, Professional Negligence List and submitted that amendments to regularise proceedings are permitted up to two weeks prior to the hearing of an appeal. She conceded that the current amendments could not be described in those terms.
Ms Merkel next relied up the decision of Schmidt J in DJZ Constructions Pty Ltd v Paul Pritchard t/as Pritchard Law Group (No 2) [2009] NSWSC 215 in support of a submission that there is precedent for leave being given to make significant changes on the first day of a hearing.
The delay since September 2016 was explained as being the need for the plaintiff's solicitor to obtain counsel, which did not occur until December 2016.
Ms Merkel relied upon the observations of Harrison J extracted at [49] above and described them as an invitation to the plaintiff to amend its pleadings. She submitted: "First of all I do submit, your Honour, that in seeing the as pleaded the plaintiff could not succeed. And putting that together with the fact that his Honour allowed it to continue his Honour implicitly recognised that if a case was going to appear before a Supreme Court justice someone was going to have to re-plead it."
As for the delay in seeking to amend the pleadings, Ms Merkel explained that the defendant was first put on notice in December 2016 and that there is not a significant difference between the first version of the FASOC provided to the defendant in December and the third version upon which the plaintiff now relies. She submitted that there was time for the defendants to reply to it before the hearing. She denied that there was any incurable prejudice to the defendant caused by the late amendment.
It was conceded by Ms Merkel that the question of delay was relevant on two bases. First, with respect to case management principles and second with respect to prejudice. She submitted that the case ought not to be dealt with primarily on case management principles. Rather, she focussed her submissions on addressing how the plaintiff now has an arguable case and establishing that no significant prejudice has been demonstrated.
Ms Merkel addressed the question of delay by submitting that the Limitation Act 1969 (NSW) defences currently pleaded by the defendant would not apply to the proposed FASOC as it is based on equitable principles. Although the defendant could rely upon laches, that is a matter for the defendant to plead and not a matter which goes to whether the plaintiff has an arguable case.
Ms Merkel focussed her submissions on going through the FASOC in some detail to explain the plaintiff's reformulated case. First, she submitted that there is an arguable case that the wills signed by Giuseppe and Carmela Borgese on 21 June 1976 were mutual wills. Although the text of those documents does not make reference to their having been made in consideration of the other testator not revoking his or her will, Ms Merkel relied on them being in identical terms as evidence from which it is possible to infer that there was a contract. The case pleaded in the FASOC is that there was a tripartite contract between plaintiff and his parents, in performance of which Carmela and Giuseppe Borgese would make mutual wills that each of Carmela and Giuseppe Borgese and the plaintiff would enter into a partnership agreement. The plaintiff relies heavily on the assertion made by his mother to the effect that "you will get the big farm" as being promissory in nature.
Ms Merkel relied upon the decision in Birmingham v Renfrew (1937) 57 CLR 666 in support of her submission that the plaintiff has an arguable case that the wills were mutual wills. Ms Merkel submitted that Giuseppe Borgese was subject to fiduciary duties vis-à-vis his son, the plaintiff, with respect to his dealings with the property that was the subject of his will. This was because Giuseppe Borgese held the property on a constructive trust for the benefit of the plaintiff, who, under the will that Giuseppe Borgese had agreed not to revoke, was to take the family farm upon his death.
As for reliance upon an argument that the defendant owed an ongoing duty to the plaintiff after the retainer was finished, Ms Merkel submitted that there is some authority for the proposition that a solicitor's duty of loyalty, as an aspect of the broader fiduciary duty, may continue indefinitely notwithstanding that the solicitor is not possessed of confidential information. She relied upon the obiter comments of Brooking JA in Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 ("Spincode").
In support of her contention that Mr Maguire breached his fiduciary duty to the plaintiff by acting against him in later proceedings, Ms Merkel drew on the hypothetical example of a solicitor who had acted for both parties to a conveyance, following completion of which there was a dispute about boundaries. It would be unsatisfactory, she submitted, for the solicitor to act for one party in that dispute against the other, notwithstanding that he or she did not possess any particular confidential information. In such a case, the transaction would not be "finite", because there would continue to be agitation with respect to it. In this case, as Mr Maguire was "the architect of the transaction", he continued to owe fiduciary duties to the plaintiff during the life of the partnership.
The plaintiff's case is that there should have been separate representation offered to the plaintiff in 1976 when he signed the partnership deed. A better view of this case, it was submitted, is that it is a case about estate planning. Once that is accepted then there was a deemed retainer between the plaintiff and Mr Maguire. It was submitted that there is evidence to support this being a fiduciary duty case, because Mr Maguire had a duty to behave in a responsible way in circumstances where the plaintiff was not being remunerated for his work nor set up on his own farm. It is to be inferred that no independent advice was given to the plaintiff. A solicitor acting on a contract should be mindful of the fact that he or she is acting for each party separately.
As for the relevance of the Equity Division proceedings, Ms Merkel submitted that this was not a case where the plaintiff elected to proceed in one way to the exclusion of his other rights. By bringing the Equity Division proceedings, the plaintiff mitigated his loss. He did not affirm the will by bringing those proceedings. Rather, the transcript of the proceedings before Young CJ in Eq confirms that he raised the issue of mutual wills in those proceedings.
As for the question of conflict of interest, it was submitted that there was clearly a conflict when the defendant acted for the plaintiff in the family law proceedings in 2001. The defendant should have declined to act in the Equity Division proceedings because it received financial information from the plaintiff in the family law proceedings. There was a clear and discrete conflict of interest when the defendant then acted for the estate in the Equity Division proceedings. In so doing it impeded the plaintiff's case. Ms Merkel tendered documents provided as part of discovery, being certain financial documents from the family law proceedings. She stated that she had only recently seen these documents and as such will have to amend the most recent statement of claim to plead actual knowledge on the part of the firm in relation to the plaintiff's financial circumstances.
On the question of costs thrown away should leave to amend be granted to the plaintiff to proceed on the further amended statement of claim, Ms Merkel did not have instructions that the plaintiff would undertake to pay the defendant's costs thrown away should the matter not proceed this week. She submitted that the court has powers to make costs orders without establishing what capacity a person has to pay the costs and that a plaintiff should not be precluded from arguing a case because of concerns about his or her ability to pay costs.

The defendant's submissions

Mr Faulkner opposed the application on two grounds: the question of prejudice and the question of futility. He relied upon the observations of Jordan CJ in Horton v Jones (No 2) (1939) 39 SR (NSW) 305; (1939) 56 WN (NSW) 161 at 310, where his Honour observed that amendments introducing a new ground to a claim should be permitted: "…Unless the proposed amendment is so obviously futile that it would be struck out if it appeared in an original pleading, or unless it is one that it would be impossible to allow upon any terms without causing substantial injustice to another party to the proceedings. The question whether an amendment would cause substantial injustice must, of course, depend upon the circumstances of the particular case"
The most significant aspect of the prejudice to the defendant is the fact that Mr Maguire died in August 2015. He is no longer available to provide instructions as to what happened in 1976. A second aspect of the prejudice to the defendant is the lateness of the application, in that if leave be granted to file the further amended statement of claim, the hearing could not proceed this week as further investigations would need to be undertaken.
As to the new case, Mr Faulkner pointed out that the existing claim relies upon 17 particulars of negligence all based upon common law principles, except particular 11. The new case was described by him as being "radically" different in that a number of matters are now raised for the first time and are all based on equitable principles.
Mr Faulkner relied upon s 54A of the Conveyencing Act 1919 (NSW) in support of his submission that, to the extent that it is contended that there was a contract in 1973-1976 for the disposition of land, then it would need to be in be in writing. If such a contract existed, which is not accepted, it would not have been enforceable. This means that Giuseppe Borgese was free to revoke his will without being in breach of an enforceable contract.
Mr Faulkner averted to the numerous matters that would need to be investigated. The claim now pleads that Mr Maguire knew certain matters about the plaintiff, such as his literacy level and other personal circumstances. Such matters are impossible to investigate at this late stage. Nor can the new allegation that Mr Maguire was retained by the plaintiff be investigated at this stage. As for the allegation that Mr Maguire failed to explain to the plaintiff that he needed independent legal advice, it is impossible now to ascertain what advice the plaintiff was given. Mr Faulkner observed that it may well have been the practice of Mr Maguire to always suggest that separate representation be obtained.
Furthermore, Mr Faulkner submitted that the defendant will need to amend its defence to answer these fresh allegations, which will address the issue of laches as well. The question why these proceedings were not commenced in 2004 needs to be investigated, as the plaintiff must come to these proceedings with clean hands.
A further matter for investigation is whether the dissolution of the partnership was entirely the fault of the Giuseppe Borgese.
Mr Faulkner noted that, up until today, there was a concession on the part of the plaintiff that Mr Martin did not have a retainer in 1981. The plaintiff now wishes to withdraw that admission. This is a further matter which needs to be investigated.
As for the new cause of action alleging that Mr Maguire failed to implement his instructions properly, it was submitted that this would be a breach of his duty to act with reasonable care and is clearly a common law cause of action. There is a clear limitation period issue with a cause of action in negligence or contract.
As for the claim in relation to confidential information, although it is to be accepted that a solicitor cannot act against a current client, or a former client where the solicitor holds confidential information, it was submitted that the plaintiff still has to establish what his loss was. How would the plaintiff have done better in the family provision proceedings if the defendant had not acted for the estate? The high point of the plaintiff's argument is that that file note would have gone into evidence. How could it be said this would have changed anything? The file does not say anything about non-revocation.
It was submitted that there is a clear prejudice to the defence and an inability to deal with the case today. The case has been defended on the basis of what was pleaded in the current amended statement of claim. There has been no explanation for the delay beyond what occurred between September and December 2016.
There is no explanation for the plaintiff's case continually changing, most recently from one of breach of fiduciary duty, to a breach of the duty of loyalty, to a breach of duty of confidentiality. The last of these was raised in court for the first time during the hearing of the application for leave. Mr Faulkner posed the question rhetorically of whether, had changes been foreshadowed to Harrison J, his Honour may have reached a different conclusion in the decision before him. It was submitted that the case is expanding continually and some of it is futile.
Mr Faulkner addressed on the question of the relevant law pertaining to when a solicitor's duty to a client ceases. He submitted that there is clear authority in New South Wales (and in the United Kingdom) to the effect that a solicitor's duty of loyalty ends with the termination of the retainer, except in the case of confidential information. He relied upon the decisions of Brereton J in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 and that of the Court of Appeal in Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146.
The question of costs is relevant to delay. Mr Faulkner submitted that unless the defendant's costs thrown away are paid the prejudice cannot be cured. A costs order in itself is inadequate without an order that they be paid by a certain time.
The defendant's primary submission is that leave ought to be refused in that to grant leave would be futile. In the alternative it was submitted that if the Court were not satisfied that the proceedings as amended would be futile, then the strength of the case is relevant when weighing up the prejudice to each of the parties respectively.

Consideration

The power of the Court to amend a pleading is to be found in s 64 of the CPA. That section provides: "64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate."
The power to amend a document in the proceedings is clearly a discretionary one. It is to be exercised both in accordance with ss 56 - 61 of the CPA as well as the fundamental principles concerning case management discussed by the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) in Aon Risk Services Australia Ltd v The Australian National University (2009) 239 CLR 175; [2009] HCA 27 ("Aon").
The overriding purpose of civil litigation in New South Wales to "facilitate the just, quick and cheap resolution of the real issues in the proceedings" is set out in s 56 of the CPA. Section 57 of the CPA provides for mandatory considerations of case management when furthering the overriding purpose of civil litigation. They are: 1. the just determination of the proceedings; 2. the efficient disposal of the business of the Court; 3. the efficient use of available judicial and administrative resources; and 4. the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties.
It is to be noted that regard to the requirements of ss 56 and 57 is "statutorily compulsory", as Allsop ACJ (as his Honour then was) put it in Hans Pet Construction Pty Limited v Cassar [2009] NSWCA 230 at [38].
Section 58 of the CPA requires the court to seek to act in accordance with the interests of justice. It is to be accepted that the overriding purpose of the CPA will on occasion lead to potential for a decision to result in some degree of apparent injustice.
The principles enunciated by the plurality in the High Court decision in Aon are well known. It is pertinent to consider some of them here, given the timing of the application and the delay in the proceedings thus far. First, the plurality observed at [94]: "Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants."
At [95] their Honours went on observe that: "What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question".
Their Honours further observed in that same paragraph that: "To say that case management principles should only be applied "in extreme circumstances" to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others".
At [98] their Honours observed: "Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs."
(The reference to r 21 is a reference to r 21 of the Court Procedures Rules 2006 (ACT), which is in similar terms to s 56 of the CPA).
At [102] their Honours went on to observe: "….It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment."
At [103] their Honours observed: "Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules."
Finally, their Honours observed at [112]: "A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate."
It is clear that the desirability of avoiding delay is a mandatory consideration under the CPA and, as confirmed by the High Court in Aon, not a matter of only limited importance.
If the plaintiff's application to amend is unsuccessful, then it has been conceded by the plaintiff's counsel that only that aspect of the claim concerning the defendant's conflict of interest in the Equity Division proceedings remains. Although Ms Merkel urged me to resolve the question on the basis that the plaintiff has an arguable case and that no significant prejudice has been established on the part of the defendant, those are not the only considerations. I am required to have regard to the CPA and case management principles as well as all of the circumstances of the application including its lateness, the procedural history of the matter, the explanation for the delay, the likelihood that any prejudice to the defendant could be cured by a costs order, the prejudice caused by the effluxion of time since 1976 in any event, the prejudice caused to other litigants and to what extent the proposed changes alter the nature of the case.
I have had regard to all of these considerations and am satisfied that leave to file the FASOC should be refused. I have not refused leave on the basis that to do so would be futile. Rather, I have had regard to the strength of the plaintiff's case as being relevant to the respective prejudice to each party. All of the matters to which I have had regard can be dealt with under three heads as follows.

The prejudice to the defendant

I have weighed the prejudice to the defendant should leave to amend be granted against the prejudice to the plaintiff should leave be refused. The prejudice to the plaintiff encompasses consideration of the strength of the plaintiff's case as reformulated. I have considered that issue below at [132] - [154]. Turning to the question of prejudice caused to the defendant by this late application, I am satisfied it is significant for a number of reasons.
First, these proceedings were commenced in 2012. At that time Mr Maguire was still alive. A defence was filed that year. Mr Maguire died three years later in 2015. The defendant is now denied the opportunity to obtain instructions from Mr Maguire concerning what he knew about the matters now alleged to have given rise to the testamentary contract between the plaintiff, Giuseppe Borgese and Carmela Borgese. This includes conversations between Carmela Borgese and the plaintiff, conversations between Giuseppe Borgese and the plaintiff, and the plaintiff's circumstances in 1976. Further questions that the defendant would need to ask Mr Maguire, but is no longer able to, include: what was he instructed to prepare in 1976? For whom did he act on 21 June 1976? What advice did he give on 21 June 1976, for example as to separate representation? What did he know about what happened in 1985 when the new partnership was made?
In addition to these matters, it is a common feature of litigation that when instructions are received they can often give rise to other questions and investigations not previously foreseen. In this way, it could not be said that those questions are the only questions that would arise from the new course the proceedings could take.
Second, the proceedings suffer from significant delay in any event. They concern events that occurred in 1976. Even prior to the death of Mr Maguire, the defendant was in a position where it was defending allegations concerning events that occurred nearly 40 years ago. This late application to amend must be viewed in the context of the history of the matter generally.
Third, the case now pleaded is significantly different from that which the defendant has been seeking to meet since 2012. The proceedings have been defended on the basis that the defendant has a good defence that most if not all of the claim is statute-barred. By bringing these proceedings in equity, the plaintiff would deny the defendant the full force of that defence.
It is to be accepted that the defendant could rely upon the equitable doctrine of laches to defend the plaintiff's claim of breach of fiduciary duty. Laches is something more than the passing of time or mere delay. Justices Basten, Ward and Payne restated the relevant principles in the recent case of Crossman v Sheahan [2016] NSWCA 200 at [385]-[386]: "The authors of Meagher, Gummow & Lehane's Equity Doctrine and Remedies explain at [38-005] that: 'Laches is an equitable defence to an equitable claim. It is no answer to a claim at law. In its primary sense, laches requires a defendant to establish that a plaintiff has so delayed the institution or prosecution of an equitable claim that the defendant has altered his position in reasonable reliance upon the plaintiff's acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb. Mere delay, of itself, is not sufficient to establish the defence.' In Orr v Ford (at 341) Deane J expressed the principle as being whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable "to place him if the remedy were afterwards to be asserted". See also I Spry, Equitable Remedies (6th ed, 2001, LBC) at 435. To establish a laches defence the defendant must demonstrate both unreasonable delay and prejudice to the defendant. As Doyle CJ observed in Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 at [156]: 'In connection with the defence of laches, two main issues arise. Has there been unreasonable delay by the plaintiff? Or putting it more broadly, what explanation is there for the time that has elapsed since the occurrence of the events giving rise to the claim, and since the liquidator was aware of the circumstances giving rise to the claim? Second, the impact of the passage of time on the defendants.'
No explanation was advanced on behalf of the plaintiff for the delay in bringing this claim.
Fourth, an adjournment will be required should leave be granted. The defendants have identified a number of matters that would need further investigation should leave be granted to file the FASOC. Those would include investigating whether Mr Martin was retained in 1981 and what happened in 1985 when the new partnership was made. Further, the circumstances as to why proceedings in reliance upon the existence of a testamentary contract were not brought until 2017 need to be investigated. This would be relevant to the defence of laches, discussed above. Enquiries also need to be made as to what information was available in the Equity Division proceedings from 2004 - 2006. Such enquiries would include ascertaining the significance of the documents from the plaintiff's family law file relied upon for the first time in court during this application to show a conflict of interest in the defendant acting for the executrix in the Equity Division proceedings.
Fifth, although some prejudice could be cured if the plaintiff were to agree to pay the costs thrown away caused by the necessary adjournment should the amendment be permitted, no undertaking to do so by a certain date was forthcoming from the plaintiff. Ms Merkel's submission was that the plaintiff should not be penalised because he was not a position to agree to such an order. So much can be accepted but the fact remains that the absence of such an offer is still one of a number of relevant matters to be taken into account on the question of whether any prejudice to the defendant can be cured.
Sixth, the defendant had already filed a notice of motion last year due to the delay in progressing these proceedings caused by the plaintiff up until that time. Although it is to be accepted that Harrison J was not of the view in September 2016 that the delay was such that the proceedings ought to be dismissed, one of the relevant factors that his Honour took into account was that the matter was ready to proceed at that time. It is apparent from his Honour's judgement that a consideration relevant to his Honour's decision was the fact that the matter was ready to proceed shortly thereafter.
Seventh, I do not accept the submission made by Ms Merkel that Harrison J was inviting the plaintiff to further amend the pleadings. Such an inference is inconsistent with his Honour's observation that the matter should be listed for hearing at an early date. Even if such an inference could be gleaned from his Honours judgment, which I do not accept, any expectation that the pleadings would significantly change must have ceased by 25 November 2016, at which time the matter was said to be ready for hearing and was given a hearing date. It is common ground that at none of the five directions hearings that followed his Honour's judgment was it suggested that leave would be sought for the pleadings to be significantly altered before the hearing.
It is further to be noted that despite Harrison J expressly contemplating in his judgment at [86] that an application may be brought by the defendant following his decision, there was no such contemplation of a further application being made by the plaintiff. That is understandable given the history of the matter up until that time.
I accept that the proposed amendment does not rely upon new evidence being filed on behalf of the plaintiff and that an adjournment is not sought by the plaintiff to obtain and file new evidence. Despite this, the defendant still needs to make further investigations concerning the new allegations.
Finally, contrary to the plaintiff's submission, the question of prejudice to the defendant caused by this late application is not reduced simply because notice was given of the proposed change in the last week of term last year. In any event, the proposed pleading has been again changed since then: namely, particulars of the breach of fiduciary duty are pleaded, a breach of the duty of confidentiality is pleaded and loss is claimed for the first time.

Case management principles

In addition to the prejudice to the defendant that the amendment would cause, I have also had regard to the conduct of the proceedings since commencement in 2012.
It is of some note that there has been no adequate explanation for the delay in bringing the action as pleaded in the FASOC so late. There was an explanation from the Bar table that the delay since September 2016 was due to counsel who appeared for the plaintiff on the application before Harrison J ceasing to act and the delay in securing new counsel. I accept that explanation for that short time period but it does not explain why proceedings as now pleaded were not commenced back in 2012 (or even earlier). The absence of any such explanation was relied upon by senior counsel for the defendant in opposing the late amendment. I have had regard to the explanation for the delay in the conduct of the proceedings summarised in the decision of Harrison J at [50], being the difficulty in obtaining instructions from the plaintiff who apparently suffers from depression. That explanation does not in any way explain why a decision would be made so late in the proceedings to change the current claim in a number of significant respects.
Ms Merkel relied upon the decision of Schmidt J in DJZ Constructions Pty Ltd v Paul Pritchard t/as Pritchard Law Group (No 2) [2009] NSWSC 215 in support of a submission that it would not be unprecedented to permit such an amendment on the first day of the hearing. That case concerned an application to amend a defence. The defendant had served an amended defence on the plaintiff that went beyond answering the amendments made in the plaintiff's further amended statement of claim. That defence claimed, among other things, that senior counsel for the plaintiff and his instructing solicitor had advised the plaintiff at the same time that the defendant was acting for it and had given similar advice to that given by the defendant. Consequently both practitioners withdrew. Her Honour found, in the unusual circumstances of that case, that justice demanded that leave to file the amended defence be granted. If there were any basis to the defence, the possibility of a conflict ought to have been known to the plaintiff. That case turned on a very different factual background from that of present case and does not assist the plaintiff.
There are further difficulties in this matter quite apart from the late application to file a FASOC. Despite orders by Harrison J (and two earlier guillotine orders) concerning the service of the plaintiff's evidence, no evidence on the question of damages (or compensation) was served until after the matter was listed for hearing. The defendant objects to that material and there is a real question as to whether the plaintiff should be permitted to rely on it. Although a further adjournment would be needed in any event, should the amendment be permitted this is yet another matter that would cause further delay in the proceedings.

Prejudice to the plaintiff should leave be refused

The final matter to which I have had regard in concluding that leave to amend the pleadings should be refused in this matter is the strength of the case as reformulated. I have weighed this as against the prejudice to the defendant. Considerable time was spent by the plaintiff's counsel addressing why the FASOC discloses an arguable case. It seems to me that it is not necessary to make any positive finding as to whether the plaintiff's case is an arguable one in order to determine this application for leave. Rather, I have given consideration to the reformulated case and, on a preliminary basis, it seems to me that there remain a number of significant hurdles for the plaintiff even if I were to grant leave to file the FASOC. These difficulties include the following.
First, reliance upon the wills being mutual wills is not disavowed in the FASOC. On the contrary, it is now asserted that the mutual wills were entered into in consideration of an oral testamentary contract between the plaintiff and his parents that came into effect sometime between 1973 and 1976. Putting to one side the discrete allegation that the defendant should not have acted for the estate of the plaintiff's father in the Equity Division proceedings in 2004-2006, the proposed new claim rises or falls on the plaintiff being able to establish that the 1976 wills were "mutual wills" and that they and the partnership deed constituted consideration of a tripartite testamentary contract for the transfer of real property in the early 1970s.
I am not bound by the obiter observation of Harrison J that the wills drawn in 1976 were not mutual wills. Although it is not necessary for me to make any final determination on that issue, for my part I too have some doubts as to whether the available evidence can support such a finding.
In support of its case that the wills are in fact "mutual wills", the plaintiff relies upon the solicitors' file note, the terms of the wills and the partnership deed, the invoice dated 7 July 1976 which described the wills as "mutual wills", the fact that the farms were owned by Carmela and Giuseppe Borgese as tenants in common and that in the chronology filed in the Equity Division proceedings in 2006, the wills were described as mutual wills. In addition, the plaintiff relies upon the statement of his mother after the wills were executed that "the big farm will be yours" as well as the fact that the plaintiff worked on the farms thereafter without a specified wage or salary.
Ms Merkel relied upon the decision of the High Court in Birmingham v Renfrew in support of her submission that there was an arguable case that the 1976 wills were mutual wills. In that decision the High Court considered whether Australian law recognises contractual agreements not to revoke a will that are enforceable at the suit of the beneficiary. The Court declined to interfere with the finding of the trial judge that husband and wife had made an agreement that neither would revoke his or her will while the other still lived, and that each would be bound not revoke his or her will after death, neither will having been revoked. Dixon J stated (at 683) that: "It has long been established that a contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement and dies leaving his will unrevoked so that the other takes property under its dispositions. It operates to impose upon the survivor an obligation regarded as specifically enforceable…the doctrines of equity attach the obligation to the property. The effect is, I think, that the survivor becomes a constructive trustee and the terms of the trust are those of the will which he undertook would be his last will."
It is on the constructive trust, rather than on the contract, that a disappointed beneficiary would be entitled to sue in equity: Birmingham v Renfrew at 675 per Latham CJ at 690 per Dixon J. Although the facts were not in issue in that case, Latham CJ observed at 674 that a plaintiff seeking to establish the existence of such an agreement "assume[s] a heavy burden of proof", noting that while most husbands and wives make wills "by agreement" they do not thereby bind themselves to an obligation not to revoke their wills.
Applying those principles to the present case it is difficult to glean any "agreement" by which both Giuseppe and Carmela Borgese agreed to bind themselves to an obligation that they would not revoke their respective wills; there is nothing on the face of the documents that evidences such an agreement. Although the assertion in the plaintiff's affidavit that his mother said words to him consistent with her intention that the plaintiff would inherit the family farm, there is no corresponding conversation with the plaintiff's father at the time of the wills to which the plaintiff deposes.
The material before me falls short of direct evidence that the plaintiff's father was constrained from selling the properties at any time after 1976. The wills don't preclude it. The partnership deed does not preclude it. There is no reference to the wills in the partnership deed.
Second, the new case pleaded is that there was a testamentary contract entered into some time from 1973 -1976. That contract is said to be implied in reliance upon the same evidence establishing that the 1976 wills were mutual wills. As to how the plaintiff can establish that such an implied contract existed in this case I note the observations by Basten JA in Hendricks v McGeoch [2008] NSWCA 53 at [39] that: " .. Whether a contract exists between particular parties is a matter to be inferred from an objective assessment of the circumstances, including the communications between the parties. A promise may be stated expressly or may be inferred from conduct; the same may apply to an acceptance of an offer. Whilst terms may be implied which are not expressly or inferentially agreed upon, it makes little sense to say that a contract is "implied". It is sufficient to ask whether the existence of a contract has been established on the evidence: see generally, Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 534-535 (McHugh JA, Samuels JA agreeing)."
The plaintiff's case is thus not only that a contract existed between the plaintiff's mother and father not to revoke their wills, there was also a further testamentary contract as between the plaintiff and both of his parents that they would make mutual wills in favour of the plaintiff and that he would receive the farms in return for working on them. This latter implied contract relies upon communications by the plaintiff's mother and the surrounding circumstances of the wills and partnership agreement. There is scant evidence before me from which it could be inferred that the plaintiff's father intended to be a party to such a contract at that time. The relevant principles were described by Handley JA in Delaforce v Simpson-Cook [2010) NSWCA 84 at [31]-[33], a decision relied upon by the plaintiff.
The plaintiff's father later did write a will in 1989 bequeathing the farm to the plaintiff. That fact is consistent with the plaintiff having worked on the farm for some time by then and Giuseppe Borgese deciding to bequeath the farm to him at that time. It is to be noted that the will was again subsequently changed after the relationship between father and son broke down in 1999.
It seems to me that in order for the plaintiff to establish that a testamentary contract was entered into in 1976 there would need to be evidence that all three parties agreed that what they were entering into was a contract of that nature. This is a further difficulty in the plaintiff's reformulated case.
Third, as senior counsel for the defendant pointed out, even if the existence of a testamentary contract could be established, which was certainly not conceded, it was not an enforceable contract because it was not in writing. In this way, the plaintiff could not have brought proceedings against his father in any event. As part of its submission concerning futility, the defendant relied upon the decision in Horton v Jones (1935) 53 CLR 475; [1935] HCA 7 and 54C of the Conveyancing Act, otherwise known as the Statute of Frauds, which requires contracts for the disposition of land to be in writing. This was relied upon by the defendant as part of its submission regarding futility.
Fourth, if the evidence relied upon by the plaintiff does not establish that there was a testamentary contract entered into in 1976 then the argument that there was an implied retainer for Mr Maguire to be acting for the plaintiff is significantly weakened. If there was no testamentary contract being entered into then it could not be said that Mr Maguire was subject to an implied retainer to act for the plaintiff.
There are cases in which a solicitor who has not entered into an express retainer may nonetheless assume a duty of care to a person. The plaintiff relied upon the decision of Hall J in Polon v Dorian [2014] NSWSC 571 where at [679] - [722] examples of situations in which such a retainer will be implied are set out. Despite this, the evidence to suggest that such a retainer could be inferred in the present matter is somewhat obscure. In the absence of evidence that Mr Maguire acted for the plaintiff on an implied retainer (because the wills and partnership deed were consideration of an oral testamentary contract for the transfer of land) the suggestion is that Mr Maguire should have realised that the plaintiff was vulnerable and required separate representation. There is no evidence before me to suggest that Mr Maguire knew about any particular weaknesses the plaintiff had. He was a twenty-year-old man who had been working for some time.
Fifth, to the extent that the new case asserts that Mr Maguire was professionally negligent in not putting into effect the wishes of Mrs Borgese in 1976 then that is a cause of action in professional negligence rather than any breach of fiduciary duty. Accordingly, that aspect of the new claim is considerably out of time. I accept that such questions are relevant to the defence of the proceedings rather than the strength of the plaintiff's case but it is appropriate that I have regard to this issue when determining whether leave should be granted to make this late change to the claim. I note that Ms Merkel did not concede that that aspect of the claim was one in negligence preferring to argue that the solicitor had a fiduciary duty to implement his clients' wishes.
Sixth, Ms Merkel submitted that there is authority for the proposition that Mr Maguire owed an ongoing duty to the plaintiff after 1976 in relation to the partnership deed even after his implied retainer had ceased. Ms Merkel relied upon the obiter comments of Brooking JA in Spincode in support of this submission
Spincode concerned an appeal to the Victorian Court of Appeal from an injunction to restrain a firm of solicitors from acting for it in proceedings to have another company, Look Software Pty Ltd ("Look Software"), wound up. The plaintiff ("Spincode") and each of the three defendants were shareholders in Look Software. The solicitors for Spincode had had a long association with Look Software, acting for it in all legal matters that had arisen since its incorporation. Those matters included the shareholder disputes that culminated in winding up proceedings.
Justice Brooking found, at [24]-[25], that the decision of the primary judge to grant an injunction on the basis that the firm possessed confidential information, that the appellant had failed to show that there was no real risk of the misuse of the confidential information, and that the respondents had shown a real and sensible possibility of that misuse, was correct. His Honour went on to consider from [26], obiter, when a solicitor might permissibly "change sides", interrogating the principle that it is possession of confidential information that will cause the court to restrain a solicitor from acting against a former client. In particular, his Honour noted that in the early leading decision of Lord Eldon in Cholmondeley (Earl) v Clinton (Lord) (1815) 19 Ves. Jun. 261; 34 E.R. 515 nothing is said about confidential information. Further, there is an inherent jurisdiction in the court to restrain solicitors from acting against former clients in appropriate cases. The other two judges did not find it necessary to consider the question.
In response to this submission Mr Faulkner relied upon the decision of Brereton J in Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181 and that of the Court of Appeal in Maxwell-Smith v S & E Hall Pty Ltd [2014] NSWCA 146. In Kallinicos v Hunt Brereton J set out the relevant principles at [76] which include the following: "Once the retainer is at an end, however, the court's jurisdiction is not based on any conflict of duty or interest, but on the protection of the confidences of the former client (unless there is no real risk of disclosure) [Prince Jefri]. After termination of the retainer, there is no continuing (equitable or contractual) duty of loyalty to provide a basis for the court's intervention, such duty having come to an end with the retainer [Prince Jefri; Belan v Casey; Photocure; British American Tobacco; Asia Pacific Telecommunications; contra Spincode; McVeigh; Sent]. However, the court always has inherent jurisdiction to restrain solicitors from acting in a particular case, as an incident of its inherent jurisdiction over its officers and to control its process in aid of the administration of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode; Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt]. Prince Jefri does not address this jurisdiction at all. Belan v Casey and British American Tobacco are not to be read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to acknowledge its continued existence. The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting, in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice [Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications]."
The Court of Appeal (Beazley P, McColl and Barrett JJA) noted in Maxwell-Smith v S & E Hall Pty Ltd at [24] that in Cooper v Winter [2013] NSWCA 261 it had endorsed the conclusion of Brereton J in Kallinicos v Hunt that: "…after the solicitor-client retainer has come to an end, there is no continuing equitable or contractual duty of loyalty on the part of the solicitor to the former client and that the court's jurisdiction to restrain a solicitor from acting is based not on any conflict of duty or interest but on the protection of the confidences of the former client or, as applicable, the protection of the integrity of the judicial process and the due administration of justice."
Ms Merkel submitted that it was putting it too high to submit that the Court of Appeal has held that there can never be an ongoing duty to a former client except in relation to the possession of confidential information. Out of fairness, Ms Merkel also drew my attention before court this morning to the decision of the Court of Appeal in Marshall v Prescott [2015] NSWCA 110.
In light of these authorities, that aspect of the plaintiff's case reliant upon the defendant owing an ongoing duty to the plaintiff after the implied retainer ceased would appear to be difficult to sustain.
There are other difficulties with the case, of which I will simply refer to two.
First, the plaintiff could have raised these issues at the time that he challenged his entitlement to his father's estate in the Equity Division proceedings. Justice Harrison observed that in doing so he had "approbated" the will: at [29]. That part of the claim seeking to establish that the plaintiff would have received a different outcome before Young CJ at Eq had the defendant not been acting for the executrix is reliant upon a finding that his Honour's decision was wrong. This would seem to raise issues concerning principles of finality.
Second, there appear to be significant problems with the plaintiff's case with respect to establishing a sufficient connection between the alleged breach of fiduciary duty and the plaintiff's loss. The plaintiff's case is that, had the defendant not acted for his father on the sale of the small farm and the dissolution of the partnership, it is probable that the plaintiff would now own both farms. It is unclear to me at this preliminary stage how this could be established.
I have had regard to all of the arguments advanced by counsel for the plaintiff regarding the reformulated case. I do not propose to make any findings as to whether it is arguable. I merely observe that it is not without some significant difficulties.

Conclusion

I have concluded that leave to file the FASOC should be refused for the reasons set out above.
Counsel for the plaintiff conceded that the result of refusal of leave to file the FASOC is that the plaintiff's case, save for that aspect based upon the defendant acting for the executrix in the Equity Division proceedings, will not proceed.
Late yesterday my chambers received correspondence from the solicitor for the plaintiff, with the concurrence of the solicitor for the defendant, to the effect that whether or not leave is granted to file the FASOC, the plaintiff proposes to make application to further amend that part of the pleading concerning the allegation that the defendant acted in breach of a duty of confidentiality when it acted for the executrix in the Equity Division proceedings. That claim is not currently in those terms. That amendment is opposed by the defendant. I will deal with that further application when it is formally made.

ORDERS

I make the following orders: 1. Leave for the plaintiff to file a further amended statement of claim is refused. 2. The plaintiff is to pay the defendant's costs of this motion.

Amendments 16 February 2017 - Paragraph [119] amended to add pinpoint reference. 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: 16 February 2017

Conveyencing Act 1919(NSW)

Family Provision Act 1982(NSW)

Professional Negligence List Uniform Civil Procedure Rules 2005(NSW)

Borgese v Cater & Blumer Pty Ltd t/as Cater & Blumer

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