Coshott v Barry

Ljiljana Coshott (First Appellant) PARTIES: Robert Gilbert Coshott (Second Appellant) Stephen Michael Barry ( Respondent)

COUNSEL: R G Coshott (Appellants) S A Kerr/P Kulevski (Respondent)

SOLICITORS: N/A (Appellants) Yeldham Price O'Brien Lusk (Respondent)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT DATE OF DECISION: 11 October 2007

LOWER COURT MEDIUM NEUTRAL CITATION: [2007] NSWSC 1094

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40766/07

BEAZLEY JA IPP JA CAMPBELL JA

Ljiljana COSHOTT and Another v Stephen Michael BARRY Judgment

The appellants' seven claims against Mr Barry 1 BEAZLEY JA: I agree with Ipp JA. 2 IPP JA: Until 26 August 2003, when his retainer was terminated, Mr Barry (the respondent) acted as solicitor for Mr and Mrs Coshott (the appellants) in various litigious matters. 3 After the retainer was terminated, the appellants brought seven claims against Mr Barry. Six of the claims were for damages for professional negligence and one was a claim based on promissory estoppel. 4 The professional negligence claims arose out of four actions brought by the appellants against various different parties. Mr Barry acted as the appellants' solicitor in these actions. The appellants alleged that Mr Barry had been negligent in conducting that litigation and, in consequence, they had suffered damages.

5 The claim based on promissory estoppel concerns legal costs claimed by Mr Barry from the appellants. The appellants contended that Mr Barry was estopped from charging them otherwise than in accordance with a representation he allegedly made to them. 6 The parties identified the appellants' seven claims against Mr Barry by reference to the appellants' respective opponents in each of the four actions. The first action involved various claims by the appellants against Citibank Limited and gave rise to a claim by the appellants against Mr Barry referred to as the "Citibank Claim". The second action involved a claim by the appellants against Principal Strategic Options (PSO) and gave rise to a claim against Mr Barry referred to as the "PSO Claim". The third action involved claims by the appellants against Mr Vardas, a solicitor. This action gave rise to three claims against Mr Barry referred to as "Vardas 1", "Vardas 2" and "Vardas 3", respectively. The fourth action involved a claim by the appellants against the Commonwealth Bank of Australia and gave rise to a claim against Mr Barry referred to as the "Commonwealth Claim". The claim based on promissory estoppel was referred to as the "Thomas Claim".

The trial and the grounds of appeal 7 At trial the appellants did not adduce any oral or affidavit evidence. They tendered certain "costing reports" prepared by Mr Barry and a few other documents. Mr Barry tendered some 20 documents. This comprised the sole evidence before the trial judge, James J. His Honour explained: "[The costing reports] contained extremely detailed records of work which the defendant had done as solicitor for the plaintiffs, including short summaries of telephone conversations, letters, faxes, and conferences. Copies of the costing reports were sent by the defendant to the plaintiffs with invoices which the defendant periodically rendered to the plaintiffs for his professional fees and disbursements. I admitted the costing reports as admissions by

the defendant of what work he had done for the plaintiffs. The costing reports were so detailed that it could reasonably be inferred, from the absence from any record of it in a costing report, that something had not happened in the conduct of a matter by the defendant. Apart from the plaintiffs' tender bundle, a few other documents were tendered by Mr Coshott and admitted into evidence. I admitted into evidence 20 documents tendered by counsel for the defendant. Apart from facts proved by documentary evidence, some allegations made in the amended statement of claim were established on the pleadings by being admitted in the amended defence. Having regard to the state of the evidence, I had to endeavour to gain an understanding of the course of events giving rise to the five claims against the defendant by piecing together entries in the defendant's costing reports and other documentary exhibits. There was no evidence of a number of allegations made by the plaintiffs in the amended statement of claim and there was no direct evidence from Mr Coshott about his state of mind, when his state of mind was relevant, for example, as to whether he had relied on advice which he alleged the defendant had given or on a representation which he alleged the defendant had made or as to whether he would have taken certain advice, if it has been given by the defendant." 8 James J dismissed each of the appellants' seven claims. 9 At trial and on appeal Mr Coshott represented himself and his wife, Mrs Coshott. James J observed: "Mr Coshott was formerly a solicitor and practised as a solicitor for many years. He is an experienced litigant, having been a party in many court cases, in some of which he has acted and appeared for himself." 10 During the course of hearing on appeal, Mr Coshott said that he could not point to an appealable error by James J in regard to the Commonwealth Claim. He said that he did not maintain the argument and did not press the appeal that in regard to that claim. In effect, the appellants abandoned the appeal in relation to the Commonwealth Claim. 11 The appellants' notice of appeal contained 15 grounds of appeal. Two of those grounds (grounds 13 and 14) related solely to the Commonwealth Claim. The appellants' abandonment of the Commonwealth Claim meant that thirteen grounds remained extant. The notice of appeal did not identify to which claims each particular ground of appeal related. During the course of oral argument, however, Mr Coshott identified which grounds related to which ground of appeal. He also raised additional points not covered by the grounds of appeal.

The trial judge's findings and the grounds of appeal 12 Citibank was the mortgagee of the appellants' home. It exercised a power of sale under the mortgage and this led to it holding at least part of the proceeds of the sale. The appellants' instructed Mr Barry to bring proceedings against Citibank claiming various forms of relief. 13 Until 26 August 2003, when his retainer was terminated, Mr Barry acted as the appellants' solicitor in the Citibank proceedings. After that date, the appellants were represented by other lawyers (and by counsel different to counsel that Mr Barry had instructed). 14 The trial commenced on 29 September 2003. During the evening of 29 September, the case was settled. When the matter was called the next day, counsel informed the judge (Einstein J) of the settlement. Orders were made in accordance with short minutes. These included orders dismissing the amended statement of claim with no order as to costs. The Court noted an agreement that included the following clause: "The Defendant will pay to the Plaintiffs the sum of $12,500 out of the $60,000 retained by the Defendant from the proceeds of sale of the [appellants' home] and the balance of which the Plaintiffs acknowledge the defendant is entitled to retain on account of the costs of these proceedings … without prejudice and without admission." 15 At trial, the appellants claimed that Mr Barry had been negligent in failing to advise them that the relief claimed in the Citibank proceedings should be limited to an order for the taking of accounts in common form as between mortgagee and mortgagor. The appellants contended that, in settling the Citibank proceedings, they reasonably conceded liability for Citibank's legal costs. They argued that, had Mr Barry advised them that the proceedings should be limited to an order of the taking of accounts in common form, they would have accepted that advice and would not have been required to pay any costs as part for the settlement. 16 Paragraph 8.2 of the relevant statement of claim (the amended statement of claim) alleged: "Contrary to the retainer and to Mr and Mrs Coshott's instructions, Barry commenced proceedings seeking unavailable and inappropriate relief." This case was not made out at trial as there was a mass of evidence that Mr Coshott instructed Mr Barry to seek the relief reflected in the statement of claim as originally filed and later amended. The contention that Mr Barry failed to advise the appellants that they were entitled as of right to the taking of accounts in common form was, however, raised during the trial and noted by James J as being an argument advanced by Mr Coshott. 17 James J, in rejecting the Citibank Claim, found (either expressly or impliedly) that:

(a) Mr Barry was not negligent in failing to advise the appellants that they were entitled as of right to the taking of accounts in common form;

(b) The making of the claim for damages had no causative effect;

(c) Mr Coshott, and not Mr Barry, decided what claims should be made by the appellants in their statement of claim as originally formulated and as amended;

(d) The appellants had not proved that, had Mr Barry advised them that the relief in the Citibank proceedings should be limited to an order for the taking of accounts in common form, they would have taken that advice, and;

(e) The Citibank claim brought by the appellants against Mr Barry failed "by reason of advocate's immunity". 18 The grounds of appeal relating to the Citibank claim are four in number, namely, James J erred:

(a) In deciding the issues of reliance and instructions on the basis that Mr Coshott was Mr Barry's only client.

(b) In finding that the appellants had not established that they had suffered any loss by reason of Mr Barry's breach of retainer or duty of care.

(c) In rejecting the expert evidence of Ian Bryden;

(d) In holding that Mr Barry was entitled to the defence of advocate's immunity. 19 There was no challenge in the notice of appeal to James J's finding that it was Mr Coshott who decided what claims should be included in the original statement of claim and in the amended statement of claim. 20 There was also no challenge to the finding that, if Mr Barry had advised the appellants that the Citibank proceedings should be limited to an order for the taking of accounts in common form, Mr Coshott would not have taken that advice. 21 Mr Coshott, however, raised these matters in oral argument and I will deal with them.

The control exercised by Mr Coshott over the Citibank proceedings 22 On 31 May 2001, Mr Coshott wrote to Mr Barry confirming that he and his wife wished "to get the balance of our monies being held by Citibank" and "to resolve a number of other matters/grievances we have with Citibank". Mr Coshott noted that Mr Barry's preliminary view was to commence proceedings seeking the taking of accounts and stated, "I believe, if possible, we should seek to air the other matters in the same [proceedings], unless tactically or legally it may be unwise to do so." 23 On 10 September 2001, Mr Coshott wrote to Mr Barry saying that it was "essential" that the Citibank proceedings should include "all claims". The claims, according to Mr Coshott, should have comprised a claim in connection with a guarantee, a claim for monies held by Citibank in trust and otherwise, a claim in respect of overcharging on costs, a claim for costs incurred after settlement, a claim for interest, and claims for "overcharging of removalist fees; locksmiths; executive sales commission, etc". 24 Mr Coshott concluded his letter of 10 September 2001 by stating "I will call when I can bring in copies to make an appointment to go through Citibank S/C to ensure all claims included …". 25 According to a tendered note from Mr Barry, on 25 September 2001 he attended a meeting with Mr Coshott and counsel concerning the claims to be made against Citibank. On 12 November 2001, Mr Coshott instructed Mr Barry as to certain claims that should be made against Citibank.

26 On 4 December 2001, Mr Barry forwarded to Mr Coshott a copy of the draft statement of claim prepared by counsel. A tendered note by Mr Barry recorded that on 7 December 2001 Mr Coshott telephoned Mr Barry and advised that he was critical of the statement of claim. On the same day Mr Coshott wrote to Mr Barry. The letter included the following statement: "I have perused [counsel's] draft S/C. It is deficient in many respects. … I have drafted a Statement of Claim which covers all of the claims against Citibank which I wish to raise at this time. Herewith 9 pages. I have not completed the formal parts at the end of the document." 27 Mr Coshott's draft statement of claim referred to equitable obligations, common law duties of care and statutory duties allegedly owed by Citibank. It also contained a paragraph alleging the basis for the claim for damages against Citibank. It went far beyond a claim for the taking of accounts in common form. 28 On 8 January 2002, Mr Coshott swore an affidavit verifying the statement of claim. Thereafter an amended statement of claim was filed which was, as James J pointed out, in most respects similar to the original statement of claim. It claimed a broad range of relief. 29 Thereafter there were conferences between Mr Barry, senior counsel and Mr Coshott concerning the Citibank claim. It is manifest from the documents that Mr Coshott was directing the proceedings. 30 On 11 November 2002 Mr Coshott wrote to Mr Barry stating, "we must ensure that [a particular judge] does not hear this claim or any contested motion". 31 Mr Coshott continued to give detailed instructions to Mr Barry concerning the conduct of the claim, including amending the statement of claim. 32 As I have mentioned, James J found that Mr Coshott assumed control of the conduct of the proceedings. In a further finding, his Honour said that, in the absence of any direct evidence from Mr Coshott, he was not satisfied that, if Mr Barry had advised the appellants that the relief claimed in the Citibank proceedings should be limited to an order for the taking of accounts in common form, Mr Coshott would have taken that advice. The finding that James J made as to the control that Mr Coshott exercised over the proceedings plainly contributed to his Honour's finding that he was not persuaded that Mr Coshott would have accepted advice from Mr Barry as to the limitation of the relief that should be sought. 33 Mr Coshott submitted, that in drawing attention to the appellants' failure to testify, James J had failed to take account of s 5D of the Civil Liability Act 2002 which provides: "If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent: (a) … (b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest." 34 I do not accept that James J did not have regard to s 5D of the Civil Liability Act. His Honour did not draw any inference against Mr Coshott merely because Mr Coshott failed to testify as to what he would have done had Mr Barry advised him that the appellants were entitled as of right to a taking of accounts in common form. His Honour's remarks in my view were intended to mean no more than that, in the absence of testimony from Mr Coshott of surrounding circumstances (other than those that

appeared from the tendered documents) from which inferences could be drawn to support his contention in this regard, there was inadequate evidence to support a finding that Mr Coshott would have taken the advice in question. 35 In my opinion, the evidence strongly supports James J's findings that it was Mr Coshott, and not Mr Barry, who decided what claims should be included in the original statement of claim and the amended statement of claim and that Mr Coshott would not have taken advice from Mr Barry that the relief claimed should be limited to the taking of accounts in common form. 36 I am not persuaded that his Honour erred in making these findings.

The abandonment of the claims based on wilful default 37 I have mentioned that that the Citibank action commenced on 29 September 2003. The appellants' new solicitors had briefed Mr Meek of counsel. Mr Meek informed Einstein J: "Your Honour, the pleadings in the matter set out a particular case. The nature of that has, on my instructions, changed so as to limit effectively what is put in dispute by [the appellants]." 38 Mr Meek handed up to his Honour a written outline of submissions "to try to encapsulate what is basically in dispute". After reading this document, Einstein J noted that the claim for damages previously made was not being pressed. His Honour observed that an order for the taking of accounts was still being maintained and enquired whether that was "an order for taking of accounts on a particular basis". Mr Meek replied, "[y]es, your Honour. The basis is a mortgagee accounting to the mortgagor for proceeds of the sale of the mortgage property in circumstances where there is a surplus". His Honour asked, "[I]s it claimed to have an account taken on the basis of a wilful default or not?" Mr Meek replied that wilful default was not being pressed. 39 Thereafter, senior counsel for Citibank pointed out that it was arguable that the taking of accounts otherwise than on a wilful default basis was something a mortgagor was entitled to as of right "and, if that is all he had ever asked for, perhaps we would not even be here". 40 Einstein J thereupon stated that the amended statement of claim should be redrafted. Senior counsel for Citibank applied for an order for costs. Einstein J gave an indication that he might order the appellants to pay Citibank's costs "occasioned by the altered landscape". His Honour adjourned the proceedings until the following day. That evening, as I have stated, the case was settled. 41 Mr Coshott submitted that the claim for damages as formulated in the amended statement of claim was the cause of the prima facie attitude adopted by Einstein J in relation to costs thrown away. 42 Mr Coshott referred to Commonwealth Bank of Australia v Hadfield [2001] NSWCA 440; (2001) 53 NSWLR 614 where Beazley JA (at [40], 621) described as "orthodox legal doctrine" the proposition that a proceeding by a mortgagor against a mortgagee in respect of the latter's exercise of its right of sale is a claim in equity for an account. 43 Accepting that to be so, it was not the nomenclature used in the amended statement of claim (that is, the description of certain claims as claims for damages) that caused the appellants to be in jeopardy of having to pay wasted costs to Citibank. Rather, it was the substantive allegations that supported that claim and the claim for the taking of accounts on the basis of wilful default. Mr Coshott had instructed Mr Barry to make these substantive allegations. 44 The claims that Mr Coshott instructed Mr Barry to make were more extensive than the taking of accounts in common form. Moreover, the substantive allegations supporting these more extensive claims were not relevant to a claim for the taking of accounts in common form. Success in regard to these more extensive claims depended on proof of wilful default. The substantive allegations to which I have referred (including those relating to the claim for damages), if proved, were capable of establishing wilful default. 45 In Carantinos v Magafas [2008] NSWCA 304 Campbell JA referred to the difference between taking accounts in common form and accounting on the basis of wilful default in the following terms (at [131]-[133]): "Meagher Gummow and Lehane's Equity Doctrines and Remedies, 4th ed (2002), Butterworths LexisNexis, par [25-035] explains that accounting on the basis of wilful default: '…means that the defendant must account not only for all receipts and payments actually made by him but also for all moneys which he would have received if he had managed the property prudently.' …

The different bases for taking accounts has also been explained by Giles JA (with whom Sheller and Beazley JJA agreed) in Meehan v Glazier Holdings Pty Ltd [2002] NSWCA 22; (2002) 54 NSWLR 146 at [13]-[14]. Giles JA said that under an order for taking accounts in common form: "…the accounting party accounts only for what has actually been received and disposed of. The other party to the accounting can challenge the accounting party's account by asserting that more was received (in the old terminology, surcharging) or by asserting that less was disposed of (in the old terminology, falsifying).

There is an alternative basis for taking accounts. An order may be made for taking accounts on the basis of wilful default (sometimes the words are wilful neglect and default). Under such an order the accounting party must account not only for what has actually been received, but also for what should have been received: that is, for what would have been received if the relevant duties of the accounting party had been properly discharged. Thus in Partington v Reynolds (1858) 4 Drew 253 at 256; 62 ER 98 at 99 it was said that on this basis an executor or administrator must account "not only for what he has received, but also for what he might, without his wilful neglect or default have received, although he has not received it.'" 46 Senior counsel for Citibank did not indicate to Einstein J that there was any difficulty with the claim for damages. Senior counsel's concern was that the appellants had pleaded allegations supporting a claim for an accounting on a wilful default basis (and these allegations included those made in connection with the damages claim) and had only abandoned those allegations on the morning of 29 September 2003. He submitted that the abandonment of those allegations should give rise to an order for costs against the appellants. 47 Crucially, on 29 September 2003, when Mr Meek informed Einstein J that the appellants were not claiming the taking of accounts on a wilful default basis, he withdrew the substantive allegations of wilful default (irrespective of whether they gave rise to a claim for damages or a claim for a taking of accounts). 48 No evidence was led to explain why the appellants decided not to press the taking of accounts for wilful default. Mr Meek informed his Honour that "the nature" of his instructions "on this particular matter" had changed. But no evidence was given as to why those instructions had changed. In particular, there was no evidence that the substantive allegations that were now being withdrawn had been made because of any negligence on the part of Mr Barry. There could have been many reasons for the change in Mr Meek's instructions that had nothing to do with Mr Barry's conduct. For example, the appellants may have learned that witnesses were not adhering to their proofs, or witnesses could not be found, or discovered documents cast an unexpected light on the appellants' case. 49 Even after Mr Meek informed Einstein J that the appellants were not pressing a claim for wilful default, a further amended statement of claim was prepared incorporating what were, in substance, allegations of wilful default. 50 The evidence compels the inference that, during Mr Barry's retainer (and even thereafter) the appellants were determined to make claims far more extensive than a claim for the taking of accounts in common form. As I have noted, Mr Coshott had expressly (and firmly) instructed Mr Barry to make such claims and the pleaded allegations that supported them. Prima facie, there was nothing untoward in the making of these allegations and claims. Their withdrawal, however, meant that unnecessary costs had been incurred for which the appellants were likely to be held liable. The prior existence of the claim for damages was irrelevant to this consequence (although the substantive allegations supporting the claim contributed to it). 51 Accordingly, it cannot be inferred that the act of Mr Barry causing (if that be the case) the statement of claim and the amended statement of claim to incorporate a prayer claiming damages was a negligent act that led to the appellants sustaining loss.

Did the trial judge regard Mr Coshott as Mr Barry's sole client (and not Mrs Coshott)? 52 Mr Coshott submitted that James J erred "in deciding the issues of reliance and instructions on the basis that Robert Coshott was the only client of the defendant." This argument was based on the proposition that Mr Barry was duty bound not only to give advice to Mr Coshott but also to Mrs Coshott. 53 The judge dealt with this aspect of the matter in finding (at [5]): "I am satisfied that in these proceedings, as well as in the matters giving rise to the claims which were brought in these proceedings, Mrs Coshott, although nominally a party, took no active part and relied entirely on her husband . "

54 In my view his Honour did not err in making this finding. Mrs Coshott played no part in the proceedings relating to any of the appellants' claims against Mr Barry. She left the conduct of the case entirely to Mr Coshott. There is no evidence that she sought advice from Mr Barry or even that she asked to be advised of what was happening. The evidence gives rise to the inference that Mrs Coshott was kept informed by Mr Coshott of what was occurring and she was content for the case to be dealt with on this basis and for Mr Coshott to represent her in whatever dealings were necessary with Mr Barry. 55 Mr Coshott drew attention to two notes made by Mr Barry. Both were made at an early stage in the retainer. The first records that Mr Barry asked Mr Coshott to arrange for Mrs Coshott to telephone him to confirm that he was to act on her behalf. The second records that Mr Barry met Mrs Coshott for 15 minutes and discussed her financial resources, the nature of the claim and the risks of litigation. In my opinion, this evidence does not rebut the inference (that arises from the control exercised by Mr Coshott over the proceedings and the absence of any evidence of material participation by Mrs Coshott in what transpired) that Mr Coshott was Mrs Coshott's agent for the purposes of conducting the proceedings. 56 In my opinion, his Honour correctly inferred that Mr Coshott was Mrs Coshott's agent and represented her in all matters involving the conduct of the proceedings.

Mr Bryden's evidence 57 James J held that the evidence of Mr Bryden, a solicitor, was inadmissible as he did not have the required expertise to give the expert evidence in respect of which he was called. Mr Coshott submitted that his Honour erred in this respect. 58 Mr Coshott said that the evidence he wished to adduce from Mr Bryden was that Commonwealth Bank of Australia v Hadfield had the effect that the only relief open to a mortgagor wishing to make a claim against a mortgagee in respect of the duties of a mortgagee was the taking of accounts in common form. 59 That evidence was plainly wrong. It is always open to a mortgagor to claim the taking of accounts on the basis of wilful default - if wilful default can be proved. Thus, his Honour's decision not to allow the evidence of Mr Bryden, even if incorrect (and I am not persuaded that it was incorrect) had no effect on the result of the trial. 60 This ground therefore fails.

Advocate's immunity 61 James J also rejected the Citibank Claim "by reason of advocate's immunity". His Honour said, "[d]etermining what claims for relief should be included in the pleading was work done out of court which led to a decision effecting the conduct of the case in court." 62 In my opinion, this finding by his Honour went too far. Mr Coshott's case was that Mr Barry breached his duty to advise virtually from the inception of the retainer. Such an alleged failure would be too far removed from the actual conduct of the trial to be covered by the doctrine of advocate's immunity. I do not think that, when the retainer commenced, a failure to advise as alleged could be regarded, properly, as leading to a decision affecting the conduct of the case in court (Giannarelli v Wraith [1988] HCA 52; (1988) 165 CLR 543 at 560 per Mason CJ). The period from the time the retainer commenced to the trial itself was too long for the requisite connection to the conduct of the case in court to be established.

Conclusion in regard to the Citibank Claim 63 In summary, the Citibank Claim fails as James J did not err in finding:

(a) Mr Barry was not negligent in failing to advise the appellants that they were entitled as of right to the taking of accounts in common form;

(b) Mr Coshott controlled the claims and allegations that the appellants made in their pleadings;

(c) The making of the claim for damages had no causative effect;

(d) Mr Coshott was Mrs Coshott's agent for the purposes of conducting the proceedings.

The PSO Claim 64 The PSO Claim involved an action by Mr Coshott against PSO to enforce an undertaking as to damages that PSO had given. 65 The appellants needed an expert witness to support their claim for damages. Mr Coshott recommended Mr Terry Davis. Mr Barry duly retained Mr Davis and received a report from him. 66 Mr Coshott's action against PSO was heard in the Federal Court before Branson J. At the hearing PSO objected to Mr Davis's report and Branson J upheld that objection. 67 As against Mr Barry, the appellants' contended that he had been negligent in not advising them that Mr Davis could not give admissible evidence and they were entitled to recover from Mr Barry the costs thrown away in retaining Mr Davis. 68 James J held that senior counsel for the appellants had read Mr Davis's report for the hearing and he did not consider it to be inadmissible. This, implicitly, militated against a finding of negligence on the part of Mr Barry. His Honour said, further: "Mr Davis's evidence was ultimately held inadmissible, not on the grounds of any lack of qualifications as a real estate valuer but on the ground, which was far from being an obvious ground, that such evidence as Mr Davis could give would not be wholly based on Mr Davis's specialised knowledge." 69 It is implicit in these comments by his Honour that he found that Mr Barry was not negligent as alleged. Further, his Honour said that, in the absence of any evidence from Mr Coshott, he was not satisfied that, if Mr Barry had advised that Mr Davis could not give admissible evidence, Mr Coshott would have taken the advice. His Honour concluded that, in any event, "[W]ork done in deciding what witnesses should be called and what evidence should be sought to be adduced from them is conduct to which advocate's immunity clearly attaches."

On these three bases his Honour rejected the PSO claim. 70 The only grounds in the notice of appeal that could possibly relate to the PSO Claim are the following:

(a) James J erred in deciding the matter on the basis that Mr Barry's only client was Mr Coshott and that he did not owe any duty to Mrs Coshott, and;

(b) James J erred in finding that the appellants had not established that they had suffered any loss by reason of Mr Barry's breach of retainer or duty of care.

Ground (b) arguably relates to the finding that Mr Coshott would not have accepted advice by Mr Barry that Mr Davis's evidence was not admissible. 71 Branson J, in holding that Mr Davis's evidence was inadmissible said: "The methodology utilised by Mr Davis … involved his taking 'cognisance' of certain published data, assembling anecdotal evidence of the opinions of a number of valuers and real estate agents and taking into account the sales of a number of properties in a 'typical' street in the Suburbs as a means as testing the statistical data. I am not satisfied on the balance of probabilities (see s 142 of the Evidence Act ) that the evidence sought to be adduced by the tender of Mr Davis's report … [constitutes] opinions that are wholly or substantially based on Mr Davis's specialised knowledge as required by s 79 of the Evidence Act ." 72 The "published data" to which her Honour referred included, principally, published statistical reports described as "the Residex reports". Her Honour appears to have rejected the evidence based on these reports on the ground that "Mr Davis professes no expertise in statistics". 73 I agree with James J's comments that Mr Davis's evidence was held to be inadmissible on a "far from … obvious ground". Further, the absence of negligence on Mr Barry's part is reinforced by the fact that senior counsel must be taken not to have queried the admissibility of Mr Davis's report. 74 As I have indicated, the implied finding by James J that Mr Barry was not negligent was not challenged in the notice of appeal. It was, however, dealt with by Mr Coshott in oral argument. For the reasons I have expressed I do not accept his argument. 75 For the reasons I have given in dealing with the Citibank Claim I would reject the ground of appeal based upon the proposition that James J dealt with the matter on the basis that Mr Coshott was Mr Barry's only client. 76 Having regard to the degree of control exercised by Mr Coshott over the proceedings, and to the fact that senior counsel did not query the admissibility of Mr Davis's report, I consider that James J was correct in finding that, had Mr Barry advised that Mr Davis's evidence was not admissible, Mr Coshott would have not accepted that advice. For the reasons given in connection with the Citibank Claim I do not consider that his Honour ignored s 5D of the Civil Liability Act when making this finding. 77 The question whether the defence of advocate's immunity applies to the PSO claim is open to question. Mr Coshott contended that Mr Barry breached his duty in regard to the admissibility of Mr Davis's evidence as from the time Mr Davis provided his report; hence, the breach occurred too long before the trial to be regarded as involving a decision affecting the conduct of the case in court. There are difficulties in determining this question, as it is not clear when Mr Barry was first duty-bound to consider the admissibility of the report. It may well be that James J correctly decided that Mr Barry's conduct in regard to Mr Davis's report involved "[w]ork done in deciding what witnesses should be called and what evidence should be sought to be adduced from them" (as his Honour put it). In view of the other conclusions to which I have come in regard to the PSO Claim, it is not necessary to decide this issue. 78 In the circumstances I would dismiss the appeal in relation to the PSO Claim.

The Thomas Claim 79 The Thomas Claim concerns a dispute between Mr Coshott and Mr Thomas, who was the purchaser of the appellants' house. The dispute concerned the ownership of a chandelier in the house. The appellants instructed Mr Barry to commence proceedings against Mr Thomas to recover the chandelier. The matter was settled on the basis that Mr Thomas would pay the appellants $50,000 and each party would pay their own costs. 80 In the amended statement of claim against Mr Barry, the appellants alleged: "In the course of settlement negotiations on 31st July, 2003, Barry advised Mr Coshott that his unpaid costs and disbursements, excluding Mr Leahy SC's fees, the unpaid witness fees of Rodney Hyman and Mr Herbertson, would not exceed $10,000. It was on this basis that the plaintiffs settled for $50,000." 81 Mr Barry denied this allegation in his defence. He pleaded: "[H]e advised Mr Coshott on 31 July 2003 that the unbilled work in progress … up to 30 July 2006 was approximately $11,000, plus disbursements." 82 There was no evidence establishing the appellants' pleaded allegation of the representation allegedly made by Mr Barry. As James J said, "[T]he only advice given by the defendant which has been proved or admitted is that admitted in … the amended defence." 83 In other words, James J dealt with the matter on the basis that Mr Barry had represented to Mr Coshott that as at 30 July 2006 the unbilled fees owing to him amounted to approximately $11,000 plus disbursements. 84 James J found that the appellants' claim based on estoppel failed on three grounds, namely:

(a) Mr Barry did not depart in a material way from the representation he had made;

(b) His Honour was not satisfied that Mr Coshott relied on the representation when settling the proceedings against Mr Thomas.

(c) The representation was not clear and unambiguous, and it should have been: Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406. 85 The only ground of appeal that relates to the Thomas Claim is that James J erred in holding that the representation was not clear and unambiguous. 86 Although there was no ground of appeal that related to the truth of the representation, Mr Coshott orally argued that James J erred in not finding the representation to be false. 87 The amount ultimately billed by Mr Barry was $22,598. The apparent over-estimate is therefore $11,598. 88 The evidence shows, however, that work amounting to $2108.34 was done on 31 July 2003. Additional work was done thereafter amounting to $1555. Disbursements amounted to $3573.65. The aggregate of these three amounts is $7236.99. When GST is added, the sum of $7966.69 is arrived at. Thus, as at 30 July 2003, Mr Barry's unbilled work, including disbursements amounted to $14,039.31. As I have noted, Mr Barry advised Mr Coshott on 31 July 2003 that the amount in question was approximately $11,000. The question is whether, in the particular circumstances, $14,039.31 is beyond the represented amount of "approximately $11,000". 89 Mr Barry's representation as at 30 July 2003 must be seen in the context that he was estimating the costs that had been incurred up to a stage shortly before the hearing - by then, senior counsel had been retained and had done work on the matter, experts were involved and work had been done by Mr Barry himself. Prima facie, one would expect the estimate of fees incurred at that stage to be inexact. James J found that Mr Barry did not depart in a material way from the representation he had made. In all the circumstances, I am not persuaded that his Honour erred in this regard. 90 Apart from the fact that there was no ground of appeal directed to the issue of reliance, I am not persuaded that his Honour erred in finding that the appellants did not establish that Mr Coshott relied on Mr Barry's representation in settling the Thomas Claim. There was no cogent evidence in support of the allegation of reliance on the representation found. Indeed, the appellants pleaded a different representation in their statement of claim. 91 I would accept that the representation that Mr Barry admitted was sufficiently clear to found an estoppel, but for the reasons I have given the Thomas Claim fails, nevertheless.

The Vardas 1 Claim 92 Mr Vardas was a solicitor who acted for the appellants. The Vardas 1 Claim was based on the proposition that Mr Barry, having been retained by the appellants to act for them in proceedings for the payment of monies that they brought against Mr Vardas, failed to prosecute their action with reasonable diligence. 93 The damages the appellants claimed against Mr Barry in respect of the Vardas 1 Claim were said to be their potential loss of the opportunity to claim interest on the monies Mr Vardas owed them. The action against Mr Vardas was settled and no judgment was delivered. 94 James J found that the appellants had failed to establish that Mr Barry had not acted with reasonable diligence. His Honour went on to point out: "[T]he compensatory purpose of the discretion to award interest means that any delay in bringing or prosecuting proceedings will not usually provide a basis for refusing to award interest (see Ritchie's Uniform Civil Procedure NSW at 2704 (s 100.35)). In the

present case, much of any delay was due to the intransigence of the solicitor for Mr Vardas's indemnity insurer and the number of objections made to the proposed amended statement of claim, all of which were ultimately dismissed by Bergin J." 95 James J was not satisfied that the appellants had established that they suffered any loss by reason of the breach. This was a second basis for dismissing the Vardas 1 Claim. His Honour explained: "Under the principles stated by the High Court in Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 the onus is on a plaintiff to establish on the balance of probabilities that the plaintiff has sustained some loss or damage by reason of the defendant's breach, before the value of the loss or damage is ascertained by reference to probabilities or possibilities. See per Mason CJ, Dawson J, Toohey J and Gaudron J at 355 and Brennan J at 368." 96 His Honour found that the appellants had not proved that they had suffered some loss or damage as Sellars v Adelaide Petroleum NL required. 97 There are two grounds of appeal that relate to the Vardas 1 Claim. The first is that James J erred: "[I]n holding that conduct of the Vargas proceedings after termination of the defendant's retainer were [sic] relevant to the question of whether the defendant had exercised reasonable diligence and competence during his retainer." 98 The second ground of appeal is that James J erred in finding that the appellants had not established that they had suffered any loss by reason of Mr Barry's breach of retainer or duty of care. 99 As regards the first of these grounds, the appellants complain that James J took into account the fact that much of any delay that may have occurred was due to the intransigence of parties other than Mr Barry and this related, at least partly, to matters that took place after Mr Barry's retainer had been terminated. 100 In my view, however, his Honour was entitled to have regard to those matters in assessing whether there was any possibility of a court refusing to award interest to the appellants. A court faced with the question of awarding interest could well hold that Mr Barry was not responsible for much of the delay, and the delay that was due to him was relatively insignificant. Such findings would reinforce the usual approach that James J identified, namely, delay in prosecuting a claim would not ordinarily provide a basis for refusing to award interest. Accordingly, I would not uphold the first of the relevant grounds of appeal. 101 I turn now to the second of the relevant grounds of appeal. In Sellars Mason CJ, Dawson, Toohey and Gaudron JJ emphasised (at 533) that a plaintiff claiming damages for the loss of a commercial opportunity "must prove on the balance of probabilities that he or she has sustained some loss or damage." Their Honours explained that in certain cases a plaintiff might show that some loss or damage was sustained "by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities." 102 Mr Coshott rightly acknowledged in oral argument that the Vardas 1 Claim rested on the proposition that he had suffered a potential loss. He said, "A loss was not actually suffered". The possibility that interest might not be awarded to the appellants in the proceedings against Mr Vardas was remote in the extreme. The appellants have not shown that their potential loss of interest had some value beyond a negligible value. 103 Accordingly, the appeal in regard to the Vardas 1 Claim fails.

The Vardas 2 Claim 104 This claim was based on the allegation that Mr Barry had not carried out instructions given to him by Mr Coshott to make a claim on behalf of the appellants against the fidelity fund administered by the Law Society for dishonest defaults by Mr Vardas of which Mr Barry had become aware. 105 James J said that Mr Coshott had not directed him to any evidence of any instruction to Mr Barry that the latter should lodge a claim on the fidelity fund on the appellants' behalf. Accordingly, he found that the appellants had not established that Mr Barry had failed to comply with their instructions in regard to the fidelity fund. Therefore, the claim failed. 106 During argument on appeal, the Court invited Mr Coshott to identify the evidence on which he relied for his argument that the appellants had given Mr Barry the requisite instructions. Mr Coshott did refer to some parts of the documents that were tendered but this material did not prove this necessary element of the Vardas 2 Claim. 107 In the circumstances the appeal in respect of the Vardas 2 Claim must be dismissed.

The Vardas 3 Claim 108 The Vardas 3 Claim was based on the allegation that Mr Barry had been negligent in carrying out instructions to recover debts for legal costs owing to the appellants by persons who had been clients of Mr Coshott's practice as a solicitor. 109 As was the case with the Vardas 2 Claim, the appellants had difficulty in proving that Mr Barry had been instructed to pursue the collection of debts. James J said, In his submissions Mr Coshott pointed to a couple of entries in the defendant's costing reports but these entries are insufficient by themselves to establish the disputed allegation in the statement of claim. Hence, the allegation that the defendant was instructed by Mr Coshott to pursue the collection of debts was neither admitted on the pleadings nor proved and on this ground Vardas Claim 3 fails. 110 Before this Court, Mr Coshott pointed to certain entries in Mr Barry's costing reports in an attempt to show that the necessary instructions had been given. Those entries, however, do not establish the existence of those instructions. 111 Accordingly, James J did not err in the finding he made in this regard and the appeal in regard to the Vardas 3 Claim must be dismissed.

Conclusion 112 Accordingly, the appeal must be dismissed with costs. 113 CAMPBELL JA: I agree with Ipp JA. **********

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