60 Although the defendants acted for the plaintiffs at the time the third proceedings were commenced, Mr Vaughan decided to run the proceedings himself. He notified the defendants of that decision on 26 November 2002. Prior to that time, on 27 August 2002, the Council had put on a notice of motion to strike out the third proceedings. The motion was ultimately listed for hearing on 5 December 2002 but was adjourned until March 2003. Upon the receipt of advice from Maddocks Lawyers and senior counsel retained by them, the third proceedings were discontinued on 19 March 2003. The Council would not agree, however, to the third proceedings being discontinued without its costs being paid by the plaintiffs.
61 The plaintiffs contended that the third proceedings were a futility from the outset and that any costs incurred by them in prosecuting the third proceedings were always expended for no good purpose. They argued that the third proceedings did not ever have any reasonable prospects of success and that the defendants should have advised them of that fact at the outset but failed to do so. A letter dated 31 July 2002 from Mr McEwen to the defendants dealt obliquely with the prospects of success of the third proceedings, although it is fair to say the letter did not express a clear or concluded view about them. It seems reasonably clear from the terms of the letter, however, that the Council had raised an issue challenging the jurisdiction of the Supreme Court in the third proceedings, suggesting that the Land and Environment Court was exclusively entitled to deal with the matters that they ventilated. There is no evidence that the defendants gave the plaintiffs advice about this.
Mr Pagotto
62 Antonio Pagotto is one of the named defendants. He died after the commencement of these proceedings. Mr Davies of Senior Counsel, who appears for the plaintiffs, adverted quite properly to the caution with which one must approach evidence given by or behalf of a party to proceedings in circumstances where a relevant contradictor is unavailable to give evidence by reason of death or incapacity. Mr Davies conceded that Mr Vaughan's evidence had to be considered and assessed having regard to the fact that many of the conversations to which Mr Vaughan referred in his evidence, and upon which the plaintiffs relied, were conversations with Mr Pagotto.
63 I have had regard to these principles in assessing the evidence given by Mr Vaughan. However, sight should not be lost of the fact that the conversations between him and Mr Pagotto that are relied upon all occurred in the context of the relationship of solicitor and client and that it was Mr Pagotto's custom, in accordance with normal practice, to make and to retain file or diary notes of them. Mr Ronzani of counsel, who appeared for the defendants, was not able to draw my attention to the existence of a file or diary note in which Mr Vaughan's recollection of a particular conversation contrasted starkly with, or was contradicted by, a written record of the same conversation made by Mr Pagotto.
64 Furthermore, the plaintiffs' case was to some considerable extent based upon written material passing between them and the defendants. As will already be apparent, that written material is significant both from the point of view of what it demonstrates to have been the advice that was given to the plaintiffs by the defendants, as well as from the point of view of what it demonstrates to have been the advice that was not given to the plaintiffs by the defendants.
Consideration
65 In relation to the first proceedings the defendants did not argue that they had given the plaintiffs the specific advice about the condition precedent that the plaintiffs argued they should have been given. This was unsurprising in the circumstances. The evidence reveals, and I find as a fact, that the defendants did not inform the plaintiffs, or either of them, at any time prior to Commissioner Hoffman's decision on 15 March 2002, that the making of the arrangements to which cl 45 refers was exclusively the province of the Council or that the nature of the clause is as a condition precedent to the granting of consent: see, for example, Codlea v Byron Shire Council [1999] NSWCA 399 at [36]-[43]; 105 LGERA 370. No such advice was given to the plaintiffs in writing and the evidence does not suggest that it was given to them in any other way.
66 Instead, the defendants defended the plaintiffs' claim that they had been negligent in respect of the first proceedings upon two bases. First, that Mr Vaughan knew the true legal position without being told of it by the defendants and accordingly the plaintiffs either suffered no loss as a result of the defendants' failure properly to advise them of the true legal position or alternatively in those circumstances contributed to the loss and damage that they suffered by reason of their own negligence. Secondly, and alternatively, that even if Mr Vaughan did not know the true legal position as the plaintiffs alleged, he was so determined to prosecute the first proceedings to their conclusion for tactical or strategic reasons, that the plaintiffs would not have acted differently in the circumstances even if the defendants had given them the advice with which the plaintiffs complained they had not been provided.
67 With respect to the first proposition there is no evidence that satisfies me that Mr Vaughan knew or appreciated that the making of prior adequate arrangements for the provision of sewerage services to the property was a condition precedent to the Council's granting of consent to the carrying out of development on the property. Mr Vaughan gave evidence in chief that he did not know it.
68 He was also cross-examined about it in the context of his email, referred to earlier, that he sent to the defendants on 6 February 2002. Some of that cross-examination is as follows:
"Q. I suggest that the whole purpose of this email to the solicitor was to make it very clear to him, one, you appreciated you could lose on 11 March 2002, correct?
A. I felt very confident about the case.