Cairncross v Anderson t/as ERA Legal

Judgment Introduction

1. By way of a notice of motion filed on 2 September 2015, Mr Daren Anderson (trading as ERA Legal), the defendant in the substantive proceedings, applied to have struck out a claim brought by way of an amended statement of claim filed on 29 June 2015 by Ms Tiffany Cairncross, the plaintiff. That relief is founded upon the proposition that the claim of the plaintiff is doomed to failure, as a result of the advocate's immunity against suit (the immunity).
2. For reasons that appear below, I consider that the most appropriate course is for this motion to stand over part-heard before me for further hearing, pending the final determination of the litigation in Jackson Lalic Lawyers Pty Limited v Attwells [2014] NSWCA 335; Attwells & Anor v Jackson Lalic Lawyers Pty Limited [2015] HCATrans 176; and Attwells & Anor v Jackson Lalic Lawyers Pty Limited [2016] HCATrans 48 (Attwells). Background
3. The background may be shortly stated. For the purposes of the motion, there was no dispute before me that Ms Cairncross took part in a scheme (I do not use that term pejoratively) whereby she would invest with Great Southern Managers Australia Limited (GSMAL), and borrow funds from ABL Nominees Pty Limited (ABL) in order to do so. One can infer that there may have been a tax advantage that was hoped to be gained thereby. Regrettably, the investment did not succeed, and GSMAL was placed into voluntary administration. It was nevertheless asserted by Bendigo and Adelaide Bank Ltd (BABL) (the assignee from ABL of the debt of Ms Cairncross arising from the loan) that Ms Cairncross was liable to repay the borrowed funds to BABL.
4. The plaintiff asserts that, thereafter, ERA Legal provided certain advice to her; appeared for her in proceedings in this Court; and played a role in a class action that commenced and was ultimately settled in the Supreme Court of Victoria: as to the latter, see Clarke (as trustee of the Clarke Family Trust) & Ors v Great Southern Finance Pty Limited (Receivers and Managers Appointed) (in liquidation) & Ors [2014] VSC 516.
5. The claim of Ms Cairncross is that ERA Legal acted negligently in a number of ways. In short, it is said that negligent advice was given that she should not maintain repayments in respect of the loan, with the consequence that an "acceleration event" occurred that markedly disadvantaged her; that ERA Legal failed to identify that the loan was originally from ABL and not from a separate entity named Great Southern Finance Pty Limited (GSF), with the consequence that it was more difficult for Ms Cairncross to have her loan set aside; that negligent advice was given regarding the prospects of, and preconditions for, having the loan set aside; that there was a failure to advise Ms Cairncross of her eligibility to lodge a claim with either the Financial Ombudsman Service or ABL directly; and that there was a failure to advise Ms Cairncross that she had a claim available to her under s 73 of the Trade Practices Act 1974 (Cth) (since repealed).
6. The position of ERA Legal before me was that all of the asserted failings occurred either in the conduct of litigation or in the course of preparation for litigation. Accordingly, it was said, those asserted failings are not amenable to suit by Ms Cairncross, in accordance with the principles elucidated in cases such as Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 at [559], [579] and D'Orta-Ekenaike v Victoria Legal Aid and Another [2005] HCA 12; (2005) 223 CLR 1 at [25].
7. The position of Ms Cairncross before me was that, taking the assertions in her originating process at their highest (in accordance with the well-settled approach to a strike out application), and considering the state of the law about the immunity as at the date of the hearing of the motion, it would be impossible for me to be affirmatively satisfied that her claim is doomed to failure. In particular, it was submitted that I could not be satisfied that the immunity has the effect that no part of the claim has any possibility of success. Accordingly, it was submitted that I should dismiss the motion. The threshold question
8. Shortly before the hearing, my Associate, at my request, invited the attention of each counsel to the transcript of the hearing of the application for special leave in Attwells that was crowned with success, and, again at my request, invited submissions about whether the motion should proceed at all while that appeal was pending.
9. At the hearing, each party submitted that the motion should indeed proceed: ERA Legal firmly, and Ms Cairncross as part of a suite of options said to be available to my discretion. In the event, I was content to hear the motion in its entirety, whilst making it clear to both parties that the mere fact that I had adopted that course was no indication that I was satisfied that the threshold question of whether the motion should be determined at this stage should be answered in the affirmative. Submissions about the threshold question
10. ERA Legal submitted that it cannot be the case that a portion of the machinery of justice simply grinds to a halt every time special leave is granted by the High Court with regard to a topic to do with that part of the machinery.
11. It also submitted that it is incumbent upon me to determine the motion on the law as it stood as at the date of the hearing, and not on the basis of how the law could be, or how I think it could be, at some future date.
12. It was accepted on behalf of ERA Legal that, in a sense, every strike out application is a prospective exercise, in that the judicial officer hearing it must determine whether, if there were a full trial at some stage in the future, the claim of the plaintiff would be doomed to failure, either as a matter of legal principle or as a result of inadequacy of evidence. But it was emphasised that that prospective exercise must be undertaken on the assumption that the law will remain unchanged.
13. In the same vein, it was said for Ms Cairncross that the motion should be heard on its merits as the law stood at the date of the hearing. The point was made that Ms Cairncross, having commenced proceedings five months before the hearing of the motion, had already had the prosecution of her litigation delayed by the pendency of the motion. It was said that she seeks to move her claim forward, she asserts that her claim is not nullifed by the immunity, and she wishes to have the benefit of a defence from ERA Legal promptly.
14. Having said that, in oral submissions it was accepted on her behalf that, in the circumstances that have arisen, there is reposed in me a discretion as to the most appropriate way forward.
15. Before the hearing, I was invited to consider City of Sydney Council v Satara [2007] NSWCA 148 with regard to the threshold question. After the hearing closed, the parties helpfully provided me with the authorities of Stillman v Rusbourne [2015] NSWCA 410 (handed down on 16 December 2015, some weeks after the hearing), and Rogers v Roche [2015] QCA 222 (handed down on 9 November 2015, a week or so before it). Determination of the threshold question
16. I accept that a legal question must generally be determined on the basis of the incremental development of the common law up until the date upon which the question is to be answered.
17. I also accept that it cannot be the case that matters should be automatically postponed, perhaps for many months or even years, simply because a legal principle has been called into question or doubted in some court or other within the Australian curial hierarchy.
18. Finally, I also appreciate that I should be slow to adopt a course from which both parties to litigation, represented by learned counsel, have sought to dissuade me.
19. Nevertheless, I consider that the most appropriate disposition of the motion at this stage is to adjourn the hearing of it part-heard before me (there is no question, of course, of the proceedings needing to be commenced again before another judge, with resultant waste of resources and court time). I say that for the following reasons.
20. First, a reading of the transcript of the special leave hearing establishes that (to use a phrase that I used in discussion with the parties at the hearing) there is a "reasonable circumstantial case" that the High Court will undertake a "root and branch" reconsideration of the immunity.
21. Secondly, the parties respectfully predicted that the hearing of the appeal in the High Court would take place in March 2016, and that one might expect a judgment some months after that. Indeed, as at today the hearing in that Court has concluded, and one may respectfully expect a judgment shortly.
22. In other words, I think it quite possible that the fundamental legal principles that underpinned the motion placed before me could be subject of significant revision by the ultimate court of this nation within three months or so, and within six months of the hearing of the motion.
23. Thirdly, I do not consider that it is just, quick and cheap to determine a motion founded on those very principles in those circumstances unless there are compelling reasons for doing so. To give but one example of a countervailing consideration that one can bring to mind, if the motion of ERA Legal failed and thereafter the law developed in its favour, to my mind there would be nothing to stop an identical motion being brought again.
24. Fourthly, I accept that standing the matter over part-heard will occasion inconvenience to both parties. And I accept the submission made on behalf of Ms Cairncross that she is keen to have the litigation advance as quickly as possible. No doubt ERA Legal is keen to have this litigation conclude as quickly as possible as well. But having said that, in the context of proceedings that commenced less than twelve months ago, I do not consider it inherently unduly onerous for the matter to be delayed for a matter of six months or thereabouts from the date of the hearing of the motion.
25. Fifthly, at the hearing, counsel for ERA Legal did not disavow the following possibility. The motion proceeds, is determined on the state of the current law, and ERA Legal is successful in having the statement of claim of the plaintiff struck out. Thereafter, the common law develops in such a way that the immunity that founded the strike out is circumscribed or abolished. Thereafter, the plaintiff lodges a second statement of claim. That claim is doomed to failure, however, because of it being statute barred by s 14 of the Limitation Act 1969 (NSW) (see motion transcript (MT) at 6.19).
26. I appreciate that senior counsel for Ms Cairncross was prepared to "take his chances" with regard to that possibility. And I accept that, even if it were to arise, there could be arguments made to forestall it. But I regard that possible course of events as so inimical to the interests of justice that reasonably practical steps should be taken to deny it even a remote chance of coming to fruition.
27. Sixthly, turning to the authorities on the threshold question with which I was provided, they are indeed to the effect that the mere fact that there is a pending appeal before a superior court about a matter of principle does not mean that every other piece of litigation to do with the topic must be placed in abeyance. I accept that the wheels of justice do not grind to a halt merely because one suspects that a doctrine will be under the consideration of the High Court of Australia.
28. On the other hand, every exercise of discretion to adjourn a matter must turn largely on its own facts: so much is established by the comprehensive review of the authorities to be found in the judgment of McColl JA (with whom Beazley JA (as her Honour then was) and Tobias JA agreed) in City of Sydney Council v Satara.
29. That was an appeal from a decision at first instance to vacate a hearing date in order to await the outcome of a pending special leave application to the High Court. Although the appeal was dismissed as a matter of form, it was upheld as a matter of substance, and the matter was ordered to proceed shortly after the hearing of the appeal.
30. But the result in that appeal can be distinguished from this case, on the basis that in this case special leave had been granted at the time of the hearing of the motion, the appeal has now been argued, and judgment is expected shortly. And it is noteworthy that in that case McColl JA said at [38] that: "the authorities indicate each case must turn on its own facts. The position may (but not necessarily) have been different if special leave had been granted and the hearing of the appeal expedited". In short, I do not read that judgment as requiring that the motion be determined now.
31. The more recent Queensland Court of Appeal decision of Rogers v Roche was an application for leave to appeal against orders made at first instance striking out part of the statement of claim of the appellant; giving judgment for the respondents in respect of the most substantial claim (the claim for damages for breach of retainer, negligence and breach of fiduciary duty); making costs orders in favour of the respondents; removing the third respondent from the proceedings; and giving procedural directions. The application for leave to appeal was heard before a single judge.
32. To my mind, to the extent that it suggest that I should determine the motion now, that case is also distinguishable. It was an application for leave to appeal, and only passing reference was made to the threshold question: the focus of the judgment of Fraser JA is elsewhere. As well as that, it was an appeal from a decision to dismiss proceedings made in the past. This case is an application for summary judgment, which calls for a prospective judgment by me that a claim will be doomed to failure if I permit a full hearing in the future. Finally, there was no suggestion of a Limitation Act question arising in that matter.
33. In short, I do not consider that the decision in Rogers v Roche commands that this motion must be determined before the High Court delivers judgment.
34. I turn finally to consider the judgment of Simpson JA (with whom Gleeson JA agreed, Basten JA dissenting with regard to the substantive judgment and not addressing the threshold question) in Stillman v Rusbourne. That was an appeal against a dismissal of a claim at first instance on the basis that the immunity meant that defeat of the claim was inevitable. The New South Wales Court of Appeal determined the appeal on the basis of the law as it then stood. Simpson JA considered the position with regard to the pendency of Attwells. In dismissing the appeal, her Honour said at [73]: One troubling feature is that the High Court has granted special leave to the respondent in Jackson Lalic to appeal: Attwells & Anor v Jackson Lalic Lawyers Pty Ltd [2015] HCATrans 176 (7 August 2015). That, however, is not a relevant circumstance upon which to base a departure from the authority of Jackson Lalic and previously decided cases. It is understood that a date was fixed for the hearing of the appeal in Jackson Lalic, but, unfortunately, had to be vacated. For the present, Giannarelli, D'Orta-Ekenaike and, most recently, Jackson Lalic, state the law to be applied by this Court.
35. In this case, however, there are some countervailing considerations.
36. First, I am being asked to determine prospectively whether a claim is legally and evidentially doomed to failure in the future; I am not being asked to sit in judgment on a first instance decision made in the past, as was the Court of Appeal.
37. Secondly, I reemphasise the possibility of a limitation issue arising if things unfold in the way I have discussed.
38. Thirdly, unlike decisions of the New South Wales Court of Appeal, my determination of the motion will not be an authoritative statement of the law of this State; that lesser status of my interlocutory decision argues against an urgent need for its delivery.
39. I do not consider that the decision in Stillman v Rusbourne requires that I determine the motion immediately.
40. In short, I do not accept that the combined authority of Stillman v Rusbourne, City of Sydney Council v Satara and Rogers v Roche commands that I must proceed to determine the motion in the circumstances that pertain here.
41. In summary, a combination of circumstances leads me to the view that the preferable course is for the determination of this motion to await the authoritative determination of the High Court of the legal principles that form the centrepiece of this interlocutory dispute. I propose to exercise my discretion to permit that to occur by adjourning the matter, pursuant to s 66 of the Civil Procedure Act 2005 (NSW). Logistical aspects
42. As I have said, there is no question of the preparation and presentation of evidence, the comprehensive written and oral submissions of counsel, and the court time already expended, being wasted by the motion being determined by another judge of this Court. The proceedings must be part-heard before me.
43. Secondly, no later than one week after the delivery of the judgment of the High Court of Australia in Attwells, my Associate will contact each counsel in order to set a date mutually convenient to them and me for a further hearing to conclude the matter (its length will depend on the degree to which the law has developed, if at all).
44. Thirdly, once that date is set, I invite concise written submissions from counsel for ERA Legal to be filed and served no later than 7 days before that date, and written submissions in response from senior counsel for the plaintiff no later than 3 days before the hearing.
45. Fourthly and finally, if there are steps preparatory to the substantive hearing of the matter that can, in the opinion of both parties, be taken whilst this motion is pending, that should occur. As against that possibility, I shall list the matter again before the Common Law Registrar one week from today. Costs
46. In light of the fact that the matter is part-heard before me and there has been no determination of the merits of the motion, no order is appropriate other than that costs be reserved. Orders
47. I make the following orders: 1. The hearing of the notice of motion of 2 September 2015 is adjourned part-heard before me. 2. The costs of the motion incurred to date are reserved. 3. The matter is listed for directions at 9 AM before the Common Law Registrar on 24 March 2016.

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