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[2011] NSWCA 124
Court of Appeal (NSW)
2011-03-02
Allsop P, Giles JA
Original judgment source is linked above.
Judgment 1ALLSOP P: I have read the reasons to be published of Giles JA. I agree with them and with the orders proposed by his Honour. The only additional comments that I would make concern the use, in the proceedings between Mr Rogers and Ms McLennan, of Pt 29.9 of the Uniform Civil Procedure Rules 2005 (NSW) . 2First, I do not think the application should have succeeded. It is unnecessary to traverse in detail the material that was before Phegan DCJ. It is sufficient to say that there was material in the affidavits in chief to obtain some form of order under the Property (Relationships) Act 1984 (NSW) for the charging of Ms McLennan's property to reflect the benefit conferred on her by Mr Day's efforts. The order might not have been as precise or as fulsome as one based on wider evidence, but there was material that could support an exercise of power. I agree, however, that the exercise of due care by counsel required the affidavit material to be better organised and to have greater detail and specificity. 3Secondly, and more importantly, it is appropriate to say something about the use made by counsel for Ms McLennan of Pt 29.9. What I am about to say is not a personal criticism of counsel. He no doubt was attempting to further the forensic interests of his client. However, the Civil Procedure Act 2005 (NSW) (and of particular relevance here, ss 56 and 59) requires (and require) clients and counsel to consider more than short term forensic interests. No doubt Pt 29.9 finds its place in the mechanisms and tools available to counsel to further their clients' interests conformably with the overriding purpose of the Civil Procedure Act . Examples of its proper and efficient use need not be given. Its deployment here, in circumstances where there was a significant argument that an application under it would be defeated by simply tendering in chief what had been placed in an affidavit in reply (wrongly, because it was always something to be addressed in chief), was only ever really likely to delay the inevitable and increase costs. That is precisely what happened. The aim of short term forensic gain at such costs is not accordance with the Civil Procedure Act . 4GILES JA : The appellant, Mr David Day, was a barrister practising at the Orange bar. He was retained on behalf of the respondent, Mr Keith Rogers, for the purposes of a claim brought by the respondent under the Property (Relationships) Act 1984 ("the Act"). In proceedings in the District Court the trial judge, Rolfe DCJ, held that the appellant was liable to the respondent for negligence in the course of his retainer. The respondent obtained judgment against the appellant for $32,440, as costs wasted when the proceedings claiming under the Act were dismissed on an interlocutory application and further proceedings had to be brought. 5Leave to appeal was required because the judgment was for less than $100,000: District Court Act 1973, s 127(2)(c)(i). The appellant no longer denied that he had been negligent in his representation of the respondent, but complained that the trial judge had erred in failing to hold that he was entitled to advocate's immunity. Leave was granted to appeal on grounds going to the nature of the appellant's breach of his duty of care and whether he was entitled to advocate's immunity. At the hearing of the appeal the leave was extended, without opposition, to include a ground that the appellant's breach of his duty of care as found by the trial judge did not cause the respondent's loss. 6At the heart of appeal was the appellant's contention that his negligence did not lie in failure to advise from the beginning in relation to the respondent's proceedings claiming under the Act, as found by the trial judge, but in later preparation of affidavits for use at the hearing of those proceedings, and that his negligence fell within advocate's immunity as explained in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1. The appellant further contended that his negligence should not be regarded as causative of the respondent's loss at all. 7For the reasons which follow the first contention should be accepted, although the second should not. The appeal should be allowed, and the judgment against the appellant should be set aside and replaced by judgment for the appellant.
The respondent's relationship with Ms McLennan 8The respondent's claim under the Act arose from a relationship with Ms Jacquelin McLennan. The relationship began in about March 2000. Ms McLennan moved into the respondent's home in Woodward Street, Orange. The relationship came to an end in October 2002, although it was briefly revived during 2003. 9Ms McLennan had been defrauded by Mr Leonardo Casella, with whom she had been in a previous relationship. He had used her cheque book without authority to make payments for his own benefit. Ms McLennan's bank, National Australia Bank Ltd ("the NAB"), was claiming from her a substantial indebtedness run up in her name. It was threatening to move on her two properties mortgaged as security for her indebtedness, one in Edward Street, Orange and the other a farm at Carcoar. 10The respondent provided significant assistance to Ms McLennan in investigating the fraud and in responding to the NAB's claim: as the trial judge put it, "essentially on the basis that much of the large indebtedness in her name was brought about by unauthorised drawings made by Mr Casella on Ms McLennan's NAB account". Ms McLennan not only denied liability to the NAB for Mr Casella's unauthorised payments, but claimed millions of dollars against the NAB for lost profits, loss of reputation and other matters. 11It is not necessary to describe the respondent's assistance in any detail. He engaged a solicitor experienced in banker/customer disputes, and paid the solicitor about $7,000 from his own funds. He paid other expenses incurred by Ms McLennan of about $2,500. He identified and collated fraudulent payments, in this and other respects using computer skills which Ms McLennan did not have. He wrote to the NAB on her behalf, and engaged in discussions with the NAB officer appointed to deal with the dispute. He resigned from his employment in November 2000, and the trial judge found that he did so "primarily to pursue Ms McLennan's claim for her". 12According to the respondent, and apparently accepted by the trial judge, Ms McLennan agreed to pay him $3,000 per month as her "consultant" in relation to her claim against the NAB. Since she had no money, this was to be paid once a settlement had been reached with the NAB. 13In about July 2001 the respondent sold his house in Woodward Street and moved with Ms McLennan into her house in Edward Street. He used the proceeds of sale after discharge of the mortgage to pay for joint food and living expenses. According to the respondent, he paid about $40,000 for these purposes. 14Shortly before October 2002 a settlement was reached with the NAB. A deed of release was executed. Ms McLennan was released from all debts and claims in relation to "the Financial Accommodation", as defined being a fixed rate short-term loan, a fixed rate owner occupied home loan, a business secured instalment loan and a lease of goods agreement. She was released from all liability in relation to the mortgages of her properties and the properties themselves. The mortgages over the Edward Street property and the Carcoar farm were discharged. Proceedings for possession brought by the NAB were dismissed. 15The deed of release did not identify the total NAB debt, or the individual debts from which Ms McLennan was released. The total NAB debt must have been no less than, and probably was considerably more than, the amount of which she had been defrauded. In addition, the Edward Street property and the Carcoar farm were now mortgage free. 16The respondent asked Ms McLennan to pay him for his services as consultant. She refused. The trial judge observed that it would seem that, by this time, their relationship had deteriorated and Ms McLennan "took a different view about what the plaintiff had contributed to it".
The respondent is advised to bring a claim under the Act 17In earlier 2003 the respondent consulted Mr John Carpenter of Baldock, Stacy & Niven Solicitors. At Mr Carpenter's request, he provided a letter dated 9 January 2003 in which he gave an account of what had happened. He wrote that he "hope[d] that something can be done in respect to obtaining what is owing to me". From the letter, he meant the $3,000 per month, the money he had paid to the solicitor, other expenses he had paid including for travel and accommodation, and some payments he had made for telephone, electricity and gas for the Edward Street property. 18The respondent saw Mr Carpenter again on 2 April 2003. On 8 April 2003 Mr Carpenter sent him a letter of advice, the effect of which was sufficiently summarised by the trial judge at para 19- "(a) Rather than basing a claim against Ms McLennan in contract, the plaintiff's claim may be better presented 'as a straight de facto relationships property claim based on contribution'. (b) The plaintiff had made a significant financial contribution to the relationship in the form of payments to Ms McLennan's solicitor and time and effort in pursuing the claim against NAB. (c) It may be unnecessary to prove an agreement with Ms McLennan that she would ultimately pay the plaintiff $3,000 per month. (d) Ms McLennan's settlement with the NAB 'resulted in a benefit to her of approximately $580,000'. (e) The solicitor's preliminary view was that the plaintiff's contribution to the relationship could be worth up to 20% of that result or a sum of about $120,000. (f) It would be much easier to prove the claim based on contribution than to prove the claim in contract. (g) If the plaintiff's contributions were assessed by a court as a contribution to the $580,000 result in Ms McLennan's hands, then the plaintiff's potential return would be greater than otherwise would be the case on a purely contractual basis. (h) The claim would need to be brought in the District Court of New South Wales." 19By a de facto relationships property claim Mr Carpenter meant a claim under the Act, which had previously been named the De Facto Relationships Act 1984 . It relevantly provided by s 20 - " 20. Application for adjustment (1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship ... ". 20The source of the figure of $580,000 as the appropriate benefit to Ms McLennan from the settlement with the NAB is not clear. The deed of release did not specify any amounts. The respondent had said in his letter of 9 January 2003 that "the final settlement was that the debt with the bank of $550,000.00 would be written off and her deed would be returned to her". 21The respondent did not immediately bring a claim against Ms McLennan, as there was the brief resumption of the relationship. In October 2003 he instructed Mr Carpenter to proceed. The appellant was then retained on the respondent's behalf.
A preliminary explanation 22At this point a preliminary explanation of the appellant's negligence as found by the trial judge is appropriate, so that what follows can be better understood. 23After the appellant was retained -
The claim under the Act is brought 27Mr Carpenter delivered a brief dated 20 November 2003 to the appellant. The brief included the respondent's letter of 9 January 2003 and a summary of the amounts paid by the respondent. The observations included - "We believe our client has a potential claim under the Defacto Relationships Act based on the contribution of his skill to the ultimately successful negotiations with the bank which effectively increased her net worth by nearly $600,000.00. During the relationship he contributed some $50,000.00 of his money to various joint living expenses and for specific expenses related to the bank's claim and apparently a great deal of his personal time and effort in drafting the various letters that are included in this brief and doing detailed and lengthy investigations into the transactions on the accounts with the National Australia Bank. If our client can prove such contributions then we believe that he should be entitled to a percentage of the amount by which the assets [of] Jacquelin McLennan increased during their relationship by reason of the successful negotiations with the bank. Even if our client were to receive an award of say 20% of this amount that would result in a payment to him of approximately $140,000.00 which he would see as a fair result for the contribution he made during the relationship. Would counsel please advise as to whether you agree that our client has a significant claim by reason of his contribution. If there are further details you need please advise or alternatively we could arrange a further conference with the client. Ultimately, if you believe that he has a significant chance of a successful claim we will ask you to draft the necessary application." 28It was necessary that the appellant disclose his estimated costs, see Legal Profession Act 1987 (since repealed), Pt 11 Div 2. He sent to Mr Carpenter a Fees Disclosure Statement under cover of a letter dated 24 November 2003. The letter explained that the Fees Disclosure Statement was "intended to cover further work if I am retained on hearing", and as well as estimating fees for advising and drafting the application it described fees for conferences, preparation, applications and a hearing. The description of "The Work to be undertaken" in the Fees Disclosure Statement, on which the respondent placed some reliance, must be read in that light - " The Work to be undertaken Read the Brief/papers, advise as requested, settle documents as requested, examine further material and documents briefed to me, confer with the clients and witnesses as required, confer with my instructing solicitors as required, prepare matter for hearing if required, prepare any necessary legal arguments (including research) and appear on any hearing of the matter including any interlocutory hearing as may be the case ('the work')." 29The appellant, Mr Carpenter and the respondent met in conference on 3 December 2003. The trial judge found that at the conference the appellant "made it clear to [the respondent] that his claim against Ms McLennan was best brought under the Act", although he was not satisfied that the appellant "actually [sic: ? accurately] or properly conveyed to" the respondent his view that the work done by the respondent arose out of his personal relationship with Ms McLennan rather than the formation of any agreement that was intended to be legally binding. 30Mr Carpenter's notes of the conference included - "Day - thinks we should rely on De Facto claim rather than contract/salary. Even though she is claiming his salary from the National Australia Bank no way of showing if they accepted that claim as part of her settlement. Keith would need to prove a contract with her - conversation and confirmed by letters to National Australia Bank. Overall contribution by Keith more significant than salary claim." 31In his consideration of the claim against the partners of Baldock Stacy & Niven, the trial judge said that Mr Carpenter gave no evidence that the appellant explained to the respondent "why an alternative claim in contract could weaken the claim under the Act". 32Immediately after the conference the appellant sent Mr Carpenter a letter dated 3 December 2003, referring to the conference and saying - "Before I am able to advise and draft any Statement of Claim, I require the following:-
Work on the affidavit evidence 38The appellant's letter to Mr Carpenter accompanying the draft statement of claim included - "You client should start writing out in long form his affidavit setting out the history of the relationship, his financial position before, during and after and what he did by way of the financial and non-financial contributions to XXX Edward Street, NAB and the farm. Ask him to do this on computer. It need not be filed at this time, but it should be started. It can be refined in conference and I can settle the refined version. Electronic formats would enhance and expedite this process." 39Presumably pursuant to this request, the respondent prepared a two page document headed "My Statement". It was e-mailed to the appellant on 28 April 2004. To a large extent it repeated, in different words and sometimes with differences in detail, what had been in the respondent's letter of 9 January 2003. In some respects there was further information, but the statement did not purport fully to set out the respondent's assets (or liabilities) before and after the relationship, or Ms McLennan's assets (or liabilities). Rather, it showed the respondent's understanding of his claim and how it was to be put in ending - "Moneys I have paid and not been paid back and wages $3,306.00 Solicitor $2,999.00 Computer $ 775.00 Trip for mediation $2,500.00 Phone and internet $1,193.00 Electricity $ 70.00 Gas $69,000.00 Wages $79,843.00 Total owing It would seem that there is two ways of taking this to court. One is a claim for the above amount which may be difficult to prove, or to claim a percentage of the debt as an income that was made during the relationship. I believe it to be about $626,236.34 this is taken from letters to the bank on the 28/5/02 & 29/5/02 all the letters should be able to be clarified as genuine by Linda Johnson of Malisons Stevens & Jacques the NAB solicitors or Geof Rose of the NAB asset structuring department on XXXX it may need a court order due to confidentiality." 40On 19 May 2004 Ms McLennan wrote to Mr Carpenter saying that she had "obtained preliminary legal advice" and asking for "initial particulars" of the statement of claim. A lawyer's hand is evident in the letter, including in the excess in the request for particulars. Amongst other things, Ms McLennan asked for the values of the assets in each of paras 7, 8, 9 and 10 of the statement of claim. She did not ask about the amount of the debt referred to in para 5, although she did ask for an item by item specification of what the respondent had done and "the fair commercial cost and value" of each item of work. 41On 21 May 2004 Mr Carpenter sent Ms McLennan's letter to the appellant, saying that he had asked the respondent "to provide us with a response to the letter" and that he would send a copy when received. 42The respondent provided a response to Ms McLennan's letter by a letter to Mr Carpenter dated 21 May 2004. It was sent to the appellant by Mr Carpenter on 26 May 2004. The response dealt mainly with particulars of para 3 of the statement of claim, and not with values of assets. So far as appears from the evidence, there was never a reply to the request for particulars; nor was there insistence that the particulars be provided. 43The appellant wrote to Mr Carpenter by a letter dated 17 June 2004. He referred to the e-mailed "My Statement", and said - "I have commenced drafting the affidavit; however the material provided is insufficient in respect of the nature of the 'relationship' other than some brief observations as to life at the Woodward Street house and very briefly at XXX Edward Street. The material does not disclose much more than living in the same houses and working on the NAB claim together. Please ask your client for instructions as to the incidents of consortium vitae , that is, sharing a bed, taking meals together, sharing domestic chores, or who did what at Woodward Street, Edward Street and the farm, and being seen in public as a couple during the relationship. Please also ask him for a main point chronology (a 'time line' as they are now being called). This will ensure the affidavit 'reads' easily. Let me have these as soon as they are to hand. I consider the affidavit will need to be settled in conference when I have completed the draft and provided it to you for your client's instructions." 44Mr Carpenter responded by a letter dated 21 July 2004 enclosing "further information received from our client which appears to be adequate apart from the fact that he has not supplied us with the requested time line". Mr Carpenter said that he "should be able to put that together once we have a first draft of his Affidavit". The enclosure appears to have been a four page letter from the respondent dated 3 July 2004 and an additional two page undated document. It is not necessary to go to the detail of the information the respondent provided. 45On 6 August 2004, before the appellant had completed a draft of the respondent's affidavit, Ms McLennan filed her defence and a cross-claim. 46The defence amounted to a denial that the respondent had made financial or non-financial contributions to acquisition or retention of Ms McLennan's property, with specific denial of exertions whereby the NAB debt was waived and securities were released. It set out Ms McLennan's before and after assets and liabilities, without values save for a debt of $80,000 to St George Bank. As part of this, it said that the NAB had "waived the alleged debts and discharged all mortgages secured on the two (2) properties", but did not give an amount for the waived debts. 47Ms McLennan cross-claimed under the Act for a property adjustment of $50,000 in her favour. The cross-claim was largely founded on allegations that the respondent had promised to pay rent for occupancy of the Edward Street property by his father and children and that Ms McLennan had made financial and non-financial contribution towards the respondent's Woodward Street property. 48By letter dated 10 August 2004 Mr Carpenter sent the defence and cross-claim to the appellant, asking that he "prepare a draft Affidavit in response". 49On 12 August 2004 Mr Carpenter sent to the appellant a draft affidavit of the respondent, asking that he review it "and make any amendments you deem appropriate". The draft affidavit was not in evidence, nor is it clear why Mr Carpenter undertook its preparation. 50A teleconference had been appointed by the District Court for 30 August 2004. On 13 August 2004 the appellant wrote to Mr Carpenter concerning that teleconference, also saying - "With respect to the draft affidavit from your client, I have prepared an affidavit from the prior material, saved in my computer. I will read that against the further draft from your client enclosed with your letter. I will also read all the material against the allegations in the Defence and Cross Claim. ... I reiterate my earlier advice with respect to detailed instructions (written note form) from your client with respect to the Defence and Cross Claim. A Defence to Cross Claim will need to be settled and a conference will be necessary." 51Either at the teleconference or shortly thereafter, directions were given requiring the appellant's affidavits by 15 October 2004 and Ms McLennan's affidavits by 12 November 2004. 52On 29 September 2004 Mr Carpenter provided to the appellant his notes of going through the defence and cross-claim with the respondent. The notes were not in evidence. He said that he proposed "to do a first draft of an Affidavit by Keith and Ron [the respondent's father] and simply have you settle them". 53Mr Carpenter provided the draft affidavits to the appellant on 13 October 2004. He said in the covering e-mail, "If you do not get time to settle the draft I am not too concerned. I am reasonably happy with it in its present form ... ". The draft affidavits were not in evidence. 54It appears that the appellant settled the drafts. His fee note had an entry for October 2004, "Settle affidavit in light of defence and cross-claim - 3 hours". The affidavits were sworn on 14 October 2004 and filed on that day or the next day. 55The respondent's affidavit dealt with what he had done in relation to the NAB debt and in work on the Edward Street property and the Carcoar farm, with various payments he had made, and with some other matters. It annexed the deed of release, but did not give amount(s) for the NAB debt. It did not put values on the Edward Street property or the Carcoar farm. His father's affidavit was essentially confirmatory. 56Ms McLennan's affidavit was sworn on 23 December 2004 and filed on that day. It included her assets and liabilities at the commencement of the relationship, including the Edward Street property and the Carcoar farm, and placed values on the assets (for the two properties, "E$500,000" and "E$350,000"). It did not give the amount(s) of the NAB debt, although it referred to a "draw down facility up to $150,000" from which Mr Casella had withdrawn money. 57On 5 January 2005 a copy of Ms McLennan's affidavit was sent to the appellant. The accompanying letter said that Mr Carpenter had asked the respondent "to provide us with notes as to anything which he wishes to reply to by way of further affidavit", and asked that the appellant telephone him to discuss the affidavit "and could you turn your mind to whether there is any aspect of the matter we should particularly focus on in the affidavit in reply". 58On 6 January 2005 the appellant sent an e-mail to Mr Carpenter noting some matters on which the respondent should give instructions in reply. On 11 January 2005 the respondent sent an e-mail to Mr Carpenter and the appellant with fairly detailed information as to those matters. They were largely matters of detail, and did not include asset values or amount(s) of the NAB debt. 59The appellant prepared a draft affidavit in reply, which he sent to Mr Carpenter on 1 February 2005. The covering e-mail said that "some of Keith's material is best kept for cross-examination". 60The affidavit sworn by the respondent on 21 February 2005 was in many respects different from the draft. The evidence does not disclose why. The draft affidavit did not deal with asset values or amount(s) of the NAB debt. The sworn affidavit, however, included - "67. (7-15) Exhibited to me at the time of swearing of this Affidavit and marked 1 - 172 is a series of letters and other documents reproduced by me from the discs and files kept on my computer during the period of my relationship with the Defendant. I had a significant input into the preparation of all of those documents. Letters or 'position papers' were either dictated by the Defendant to me and typed by me or I would prepare a draft of the letter, show it to the Defendant and we would then alter it as required." 61This was scarcely evidence in reply. The 172 pages included evolving claims by Ms McLennan upon the NAB. In February 2001 the "fraudulently removed monies" were put at $239,785.90, although other figures were given. In a June 2001 "position paper" apparently for a mediation it was said that the NAB claimed that Ms McLennan owed it $416,308 against which she off-set a credit balance of $41,042.80. A September 2001 letter to the NAB referred to a NAB claim of $550,000, and appears to have acknowledged a true indebtedness after allowing for fraudulent payments of $295,827.70. One May 2002 letter appears to have acknowledged an estimated true indebtedness of $265,085.69, and referred to $718,914.31 as "monies owed to bank"; another May 2002 letter referred to the NAB claiming $626,236.34.
The dismissal of the respondent's proceedings under the Act 62The proceedings were first listed in the May 2005 sittings of the District Court at Orange, but were not reached and were stood over to the August sittings. There were settlement discussions, to no avail. 63The proceedings came on for hearing before Phegan DCJ on 19 August 2005. The appellant appeared for the respondent. Mr D R Campbell SC appeared for Ms McLennan. His Honour had read the affidavits. 64At an early point Mr Campbell identified the affidavits of the respondent and his father as the respondent's case in chief. The appellant did not say to the contrary. Mr Campbell said that "at this stage your Honour I am not going into evidence at the moment. I just want to see what happens". Perhaps this should have alerted the appellant to what thereafter occurred. 65The two affidavits were read, with some parts not pressed after objection. The appellant made reference to the respondent's affidavit in reply, but Mr Campbell said that he objected to it being read and the appellant said no more about it. 66The respondent and his father were both cross-examined by Mr Campbell. The appellant announced, "Your Honour that is the plaintiff's case subject to any reply after Miss McLennan has given evidence". 67Mr Campbell then applied for an order that the proceedings be dismissed pursuant to Pt 29 r 9 of the Uniform Civil Procedure Rules . The rule provides - " 29.9 Dismissal of proceedings on defendant's application (1) A defendant in proceedings in which the plaintiff is the beginning party may apply to the court for an order: (a) for the dismissal of the proceedings, or (b) for the dismissal of the proceedings to the extent to which they concern any cause of action relevant to the plaintiff's claim for relief against that defendant, on the ground that, on the evidence given, a judgment for the plaintiff could not be supported. (2) Such an application may be made at any time after the conclusion of the evidence for the plaintiff in his or her case in chief. (3) The plaintiff may argue, or decline to argue, the question raised by the application. (4) The court may not make an order under this rule unless the plaintiff argues the question raised by the application and the defendant satisfies the court that, on the evidence given, a judgment for the plaintiff could not be supported. (5) If the plaintiff declines to argue the question raised by the application, or if the defendant fails to satisfy the court that, on the evidence given, a judgment for the plaintiff could not be supported, the defendant: (a) may adduce evidence or further evidence, or (b) may make an application under rule 29.10. (6) If fewer than all defendants apply to the court under subrule (1), the court must not deal with any such application before the conclusion of the evidence given for all parties." 68Under r 29.10, referred to in r 29.9(5)(b), a defendant may apply for an order dismissing proceedings on the ground that the evidence given could not support a judgment for the plaintiff, but if the application fails the defendant can not without leave adduce evidence or further evidence. 69After some confusion in identifying the rule Mr Campbell said, with obvious reference to r 29.9(3) - "CAMPBELL: ... Well your Honour I make an application under Rule 29.9 for an argument to be had as to whether or not the plaintiff's claim should at this stage be dismissed and I suppose it all moves over to what Mr Day wishes to say about my application at this stage, your Honour." 70The transcript continues - "HIS HONOUR: Alright well Mr Day. DAY: The mere existence of the legislative power for my friend to make the application leaves me standing here hanging out your Honour I don't know what the basis of his application is. CAMPBELL: Well Mr Day can either agree to enter into an argument about my motion or he can decline to argue the motion and according to which option he takes it may or may not have consequences to the proceedings.. DAY: I'll argue the motion your Honour but ... [sic]". 71By arguing the application, the appellant opened the door to an order for the dismissal of the proceedings on the ground that the evidence given could not support a judgment for the respondent, without Ms McLennan having to elect whether to go into evidence or to apply under r 29.10. If Ms McLennan applied under r 29.10, she would be shut out from adducing evidence if the application was unsuccessful; it would have been a hard decision for Mr Campbell. It is plain that the appellant had anticipated being able to cross-examine Ms McLennan and to read the respondent's affidavit in reply. He exposed the respondent to dismissal of the proceedings without being able to rely on cross-examination or the affidavit in reply to assist in making out the respondent's case. 72Argument proceeded on the application. Mr Campbell submitted that an order adjusting the property interests of parties to a relationship as it seemed just and equitable could not be made unless there was "full disclosure and valuations of all of that property prior to, during and following the conclusion of the relationship", and that there was "no evidence to enable that process to be commenced let alone concluded". He referred in particular to the reasons of Davies AJA in Jones v Grech [2001] NSWCA 208; (2001) 27 Fam LR 711. He asked rhetorically how a court could equitably adjust interests in property "when they don't even know what they are, they don't even know how much they are", giving as examples the value of the Edward Street property and the Carcoar farm and the amount of the mortgages. He said that - " ... there has to be some evidence whether it be by verified valuation evidence whether it be by assertion in an affidavit, whether it [be] by an agreed list, whatever it is because otherwise it is impossible for the Court to commence to undertake the task that's entrusted to it of adjusting the interest with respect of the property of the parties. Because the Court must know what that property is both before the relationship, during the relationship, after the relationship and at the time of the hearing. And if you haven't got it either by agreement or by proof, the application must fail." 73Phegan DCJ called on the appellant. The thrust of his submissions was that there was no need for an inventory of the parties' property and the values of the property, because the case "is about what is the value of the contribution made to the defendant's position". He said that the respondent claimed a sum of money reflecting his contribution to the acquisition, conservation and preservation of Ms McLennan's assets, and that that could be determined on the evidence as it stood. He referred to the decision of Barrett J in Vitali v Stachnik [2001] NSWSC 408. He said also that, although it had not been read, Ms McLennan's affidavit had set out approximate values of the Edward Street property, the Carcoar farm and other assets. He did not refer to the respondent's affidavit in reply. 74At this point his Honour was against the application, saying to Mr Campbell that he was "yet to be persuaded that there's anything in any of the authorities that you cited to me that says as a matter of mandatory requirement the case has to be presented in the form which you suggested". 75Mr Campbell returned to his task, in substance repeating his earlier submissions. It is not easy to see what new matter brought it about, but his Honour's position changed. He said that he was "on balance at this stage persuaded that the evidence in support of the claim is simply not sufficient to provide me with a proper foundation", although he did not think that more information beyond the "broad background of the relevant asset positions of the parties" which he already had would "change the key decision that I'm going to have to make and that is was there any value in the contribution and how is it to be computed ... ". 76When Mr Campbell had finished his submissions, his Honour said to the appellant - "HIS HONOUR: Well Mr Day I've expressed the matter I think as clearly as I can, I am very reluctantly of the view that the case presented by the plaintiff does not provide an adequate foundation in terms of the necessary financial information of the asset position of both parties on which I can make an appropriate judgment. I do it reluctantly because well I can't repeat usefully what I've already said. My sense is that there is enough for me to dispose of the matter appropriate[ly] but - Well dispose of the matter I won't say appropriately because the difficulties - I can't dispose of it appropriately because of the absence of the evidence which ought to be the foundation of the plaintiff's case. ... It really is a case where the information on the asset position of the parties is lean in the extreme and I have to say that on the face of it I find - I'm inclined to find the application well founded. I don't having said that I certainly would not want to exclude you from putting any further submissions you wish but it's - my sentiments are against the application but it seems to me that the law is very much in favour of it." 77The appellant in turn made further submissions. Phegan DCJ said, as something of an aside, that the respondent "might've been well advised from the outset to bring an action in quasi-contract or restitution or whatever the terminology might be, and have concentrated on just that from the start", and that was inconclusively debated. The appellant's submissions otherwise did not go materially beyond his earlier submissions. 78At one point the appellant referred to Ms McLennan's cross-claim as something which "has in part driven the proceedings". Mr Campbell said that if the respondent's "primary claim" was dismissed "I can't run a cross-claim", and his Honour said in concurrence that "if the principal action is dismissed the cross-claim falls away, it becomes irrelevant, doesn't survive in some independent status, the whole thing goes". This was wrong, although the appellant did not correct it, but Mr Campbell then made clear that he would not press the cross-claim if he succeeded in his application. 79His Honour ultimately disposed of the proceedings - "But Mr Day I have to say reluctantly and my reluctance has been quite undisguised this is a case in which the foundations for the orders which are appropriate under s 20 of the Act simply cannot be properly and responsibly made even though I have made the point that this is an unusual case and one which does not as some cases do turn exclusively on arguments about asset position and relative valuations, that this is not a case which requires a careful comparison of those matters but it is an application under the Property Relations Act and as such it does require as I understand the authorities particularly Jones v Grech as a general rule requires the presentation of an asset picture of both parties accompanied by valuations and the evidence in this case falls far short of that. And in those circumstances the application or the proceedings have been for reasons which I've already canvassed and don't propose to repeat largely misconceived and that there might've been a more appropriate way of addressing the most substantial matter in dispute between the parties. In those circumstances therefore I dismiss the plaintiff's claim and I further note that in the circumstances the cross claim is not pressed and I accordingly dismiss the cross claim." 80After further submissions, his Honour ordered that the respondent pay Ms McLennan's costs of the proceedings. The costs were subsequently agreed at $35,000.
Further proceedings are brought and settled 81Section 91 of the Civil Procedure Act 2005 permits fresh proceedings on a cause of action following the dismissal of proceedings, unless there has been a determination on the merits. However, the respondent became out of time to bring proceedings against Ms McLennan under the Act without leave of the court. 82At some time in 2006 the respondent brought further proceedings against Ms McLennan, on a claim in contract or for a quantum meruit and a fresh claim under the Act. He applied for leave to bring the proceedings so far as under the Act. The application was heard by Phegan DCJ on 8 March 2007, and was successful; however, the respondent was ordered to pay Ms McLennan's costs of the application. The costs were subsequently agreed at $5,000. 83The respondent and Ms McLennan subsequently reached a settlement, recorded in a deed of release dated 2 October 2007. Ms McLennan paid the respondent $35,000 after set-off of the costs totalling $40,000, and each party paid his or her costs of the further proceedings.
The respondent's claim against the appellant 84The respondent brought proceedings in early 2008, suing Mr Carpenter and the other partners of Baldock Stacy & Niven and the appellant. As subsequently amended, the respondent claimed to recover a loss of "unnecessary legal fees in the sum of $57,246.00", damages for "psychological/psychiatric injury diagnosed as adjustment disorder with mixed features of anxiety and depression", and damages for inconvenience, vexation and stress. 85As against the appellant, the respondent alleged breach of a duty of care "to exercise a reasonable level of professional care and skill of a competent barrister and to take all reasonable steps to advise on and prosecute the plaintiff's rights". The breach of duty was particularised, perhaps unhelpfully because not distinguishing between the solicitors and the appellant and also because in some respects uninformative - "a. Bringing a claim on a cause of action which was misconceived and thereby incurring unnecessary legal fees. b. Failing to advise on evidence to support the claim either for lost wages or property adjustment. c. Failing to prepare and adduce evidence at the hearing in support of the claim either for lost wages or property adjustment. d. Failing to exercise due care and skill. e. Failing to appropriately advise the plaintiff of his rights in relation to his claims for lost wages and property adjustment. f. Failing to advise and prosecute a claim for lost wages. g. Failing to take action and undertake appropriate enquiries." 86The appellant admitted in his defence that he owed a duty "to exercise a reasonable level of skill and care", but not further. He denied the allegation of breach of duty. 87To move forward to the result, at the trial the respondent claimed wasted costs totalling $55,791, being the $40,000 which had been payable to Ms McLennan plus costs and disbursements of $4,237 paid to Baldock Stacy & Niven and costs and disbursements of $11,554 paid to solicitor and counsel subsequently retained. No fees had been paid to the appellant. The trial judge reduced the $55,791 by $1,000, representing his assessment of the benefit the respondent had obtained from Mr Carpenter's work on his behalf. His Honour was not satisfied that the respondent suffered from a recognised psychiatric injury, or that he was entitled to damages for vexation and distress. With interest on the $54,791, he arrived at damages of $64,880. 88The trial judge apportioned the damages equally between the appellant and the solicitors pursuant to s 35 of the Civil Liability Act 2002, hence the judgment against the appellant for $32,440. He gave judgment against the solicitors for the other $32,440. 89The solicitors did not appeal. It may be noted that the respondent did not bring a defensive cross-appeal in relation to the apportionment, joining the solicitors, against the possibility that the appellant's appeal was allowed and he lost the judgment against the appellant.
The trial judge's reasons 90I have indicated the trial judge's findings as to the conference on 3 December 2003. 91His Honour was satisfied that the appellant drafted the statement of claim, and referred to the absence of any "precise amount of the NAB debt" and of values attributed to the Edward Street property and the Carcoar farm. He inferred that the appellant and Mr Carpenter "failed to deal with" Ms McLennan's request for particulars. He was satisfied that "the final form of the [respondent's] affidavit" was drafted by the appellant, and said - "42. ... whilst the affidavit was prepared in some detail with regard to the actual tasks carried out by the plaintiff in regard to Ms McLennan's claim against the NAB, there is no evidence in the affidavit whatsoever of the amount of the NAB debt, nor is there any evidence of the value of the property of Ms McLennan, particularly the Edwards Street Orange residence and the farm at Carcoar. 43. Furthermore, no other affidavit evidence going to these matters was prepared." 92His Honour's statement in para 43 may need qualification, to the extent that the respondent's reply affidavit included material going to the amount of the NAB debt which could have been tendered against Ms McLennan. 93The trial judge said in para 44 that in his e-mail of 6 January 2005 in relation to responding to Ms McLennan's affidavit, the appellant did not "advise the plaintiff ... of the need to prove the NAB debt or the value of Ms McLennan's farm and residence at Orange". That is correct, but in circumstances that are not clear, the affidavit in reply annexed the material going to the amount of the NAB debt. 94In relation to dismissal of the proceedings by Phegan DCJ, his Honour did not accept the appellant's submission that lack of evidence regarding the NAB debt played no part. He said at para 59 that it could be seen from the transcript of the proceedings before Phegan DCJ that - " ... a great deal was made of the fact that there was no evidence of the amount secured under the mortgages over the properties owned by Ms McLennan and clearly this had an impact in terms of the lack of evidence going to the value of those properties." 95Nor did the trial judge accept the appellant's submission that Phegan DCJ had been in error in granting Ms McLennan's application. He said at para 61 that it was "unnecessary to investigate the correctness of [Phegan DCJ's] decision", because Mr Campbell "would not have been able to contemplate even making such an application but for the acts of negligence of the defendants prior to commencement of the proceedings and well in advance of the hearing". 96Specifically as to the appellant as distinct from the solicitors, the trial judge referred to his initial instructions in the brief dated 20 November 2003, and to the conference on 3 December 2003 and the letter of that date sent by the appellant. He said - "71. The clear inference which I draw is that the Barrister had accepted as an extension of his brief a retainer to advise the plaintiff concerning his rights and prospects of pursuing a claim under the Act. Noticeably, however, although the Barrister advised that the documents identified as 1, 2 and 3 in his letter were required, he made no mention of any documents relating to the NAB debt or which might establish and go towards providing the value or worth of Ms McLennan's farm and residence in Orange. In addition, the Barrister conceded in cross-examination (eg T134-135) that he had been briefed to advise on evidence. The effect of his answers in cross-examination was that he had turned his mind to the evidence that needed to be marshalled to substantiate the plaintiff's cause of action. I am satisfied that this was before proceedings were commenced." 97In the course of going through the subsequent events his Honour said -
The appellant's negligence 104At least on appeal, it was not part of the respondent's case that the appellant was negligent in advising that the respondent was justified in bringing a claim under the Act, or in advising that his claim to recover what he considered was due to him was appropriately brought as a claim under the Act rather than as a claim in contract or quasi-contract. Nor was the appellant found to have been negligent in these respects. 105The trial judge found negligence in advising as stated in the subparagraphs of para 96. With respect, the negligence was expressed too widely. 106Whether or not the appellant failed to advise the respondent about "his rights under the Act" or "how to prosecute a claim under the Act" (para 96(a) and (b)) (and it seems clear that the respondent was given a broad understanding of these matters), unless the failure came down to failure in relation to having necessary evidence (para 96(c) and (d)) it played no part in the dismissal of the proceedings by Phegan DCJ. The respondent accepted in the course of submissions on appeal that attention should be focussed on the appellant's alleged failure to identify what evidence was required and to marshall that evidence. 107The proceedings were dismissed because the appellant did not have in the respondent's case in chief before Phegan DCJ evidence of the parties' assets and their values; particularly the values of the Edward Street property and the Carcoar farm and the amount of the mortgages (more appropriately, the amount of the NAB debt). Evidence of these matters, or at least the parties' properties and their values was seen by Phegan DCJ as required in an application under the Act. The make-up of the NAB debt does not seem to have been relevant to Phegan DCJ's decision - Ms McLennan's property position was increased by the total amount of the released debt, with consequential discharge of the mortgages, and it did not matter how much of the debt was Mr Casella's unauthorised transactions and, how much was genuine financial accommodation. Whether Phegan DCJ was correct is another matter; the trial judge appears to have accepted that he was in what he said in paras 89 and 90, although the trial judge had declined at para 61 to "investigate the correctness of [Phegan DCJ's] decision". 108The appellant's negligence in these respects is not correctly described as failure to advise "from the beginning" about what evidence was required and marshalling that evidence. 109At the time he advised that the respondent was justified in bringing a claim under the Act, it was sufficient that the appellant had instructions that the settlement with the NAB had benefited Ms McLennan in an approximate amount of $580,000 and by discharge of the mortgages of the two properties. The time for attention to evidence was when the appellant drafted and ultimately settled the respondent's affidavit in chief, after commencement of the proceedings and after Ms McLennan's defence and cross-claim had been filed so that it was known what was in issue in the proceedings; that is, in October 2004. To the extent that evidence was necessary which could not be given by the respondent, it would then have been appropriate to advise Mr Carpenter that it should be obtained, on affidavit from others or in due course by subpoena for the hearing. 110The trial judge's finding of negligence "from the beginning" was influenced by what he appears to have seen as acceptance by the appellant that he had been briefed to advise on evidence in November - December 2003, see para 71, and that his retainer to advise about how to prosecute the claim included advising on the evidence required to substantiate it, see para 93. The appellant's evidence to which his Honour referred, however, was not time specific, and in my opinion does not support a finding that he was retained to advise on what evidence was required and to marshall the evidence earlier than October 2004. 111The respondent relied on appeal on the work to be undertaken described in the appellant's Fees Disclosure Statement in November 2003, and on the respondent asking in his letter of 7 March 2004 whether his affidavit would be enough to stand up in court. The respondent was referring to an affidavit to be prepared in the future, as in fact occurred in October 2004. The Fees Disclosure Statement and the respondent's letter of 7 March 2004 described work to be undertaken in the future. The documents do not support a finding that the appellant was retained to advise on evidence at the time the communications took place. 112The time for attention by the appellant to the evidence continued from October 2004. It included when the appellant was preparing for the not reached hearing in May 2005 and the hearing in August 2005. There was continuing negligence by the appellant, but not prior to October 2004. 113The trial judge's criticism of some aspects of the appellant's evidence included that, contrary to his evidence, the appellant knew that he had been asked to give advice as to what was required to pursue the respondent's claim. That and other criticisms may not hold good when the time for attention by the appellant to the evidence is appreciated. So far as the trial judge found that the appellant had given deliberately false evidence, I doubt that the finding was justified.
The appellant's negligence was within advocate's immunity 114The appellant did not have available evidence of the parties' assets and their values at the hearing, because the case he was mounting on the respondent's behalf was that there should be a property adjustment in the respondent's favour by reason of the increase in Ms McLennan's property position by the amount of the released NAB debt. He considered that the values of the Edward Street property and the Carcoar farm, and of Ms McLennan's other property and the respondent's property, were of no particular significance. Even if this was a justifiable approach, the appellant was still negligent. For the intended case, at the least the appellant should have had evidence of the amount of the NAB debt. Other than in the respondent's affidavit in reply, he did not, and the evidence in the reply affidavit in any event was not satisfactory. 115The appellant set the respondent's claim under the Act on its defective course when he drafted or settled the respondent's affidavits in or about October 2004. He maintained his approach to the claim thereafter. Had there not been the application pursuant to r 29.9, the appellant might have brought out the amount of the NAB debt as part of a cross-examination of Ms McLennan directed to the respondent's contribution to the settlement with the NAB; perhaps the affidavit in reply would have provided some evidence of the amount of the NAB debt. This is speculative, and it is not clear what the appellant might have sought to make of the other matters pleaded in the statement of claim such as work on the Edward Street property and in the operation of the Carcoar farm - it appears that they were seen as very much subsidiary to the course on which the appellant had decided. For present purposes, the point is that drafting and settling the affidavits involved the appellant deciding that he was going to conduct the respondent's case at the hearing on that affidavit evidence and, unless later reconsidered, only that affidavit evidence. 116In my opinion, this was work done out of court leading to a decision affecting the conduct of the case in court. The work and decision were combined; there was a decision out of court, maintained as a decision at the hearing, upon how the case should be conducted in court. The appellant's work was within the test restated in D'Orta-Ekenaike v Victoria Legal Aid at [86], and within the alternative restated test of work intimately connected with work in court. The appellant in due course conducted the case in accordance with the decision he had made, relying on the affidavit evidence. His conduct of the case met at an early point with the application under r 29.9, but it was nonetheless conduct of the case in accordance with that decision. 117Calling what the appellant did failure to advise upon what evidence was required and marshalling the evidence does not change its character. The negligent conduct alleged in D'Orta-Ekenaike v Victoria Legal Aid was advice to enter a plea of guilty at committal. It was acted upon, and the guilty plea was led against the plaintiff in a subsequent trial. The advice "was work which an advocate did out of court but was work which led to a decision which affected the conduct of the case at the subsequent trial": D'Orta-Ekenaike v Victoria Legal Aid at [88]. Indeed, the effect was on a subsequent trial; it was more remote than an effect on the committal in relation to which the advice was given. 118The evidence adduced is central to the conduct of a case in court, and a decision on what evidence to lead or not lead is a decision affecting the conduct of the case in court. It does not matter that the decision is made prior to the hearing - such decisions should be made prior to the hearing, and the immunity is not confined to a decision made by the lawyer on his or her feet in court. Keefe v Marks (1989) 16 NSWLR 713 illustrates advocate's immunity in relation to negligence at the early stage of drafting a statement of claim, continued to the hearing. The barrister was briefed to act as counsel for a plaintiff in a personal injuries case but did not, at any relevant time either prior to the hearing or at the hearing, direct his mind to the desirability of making a claim for interest. In consequence the plaintiff was not awarded interest at the trial. Gleeson CJ, with whom Meagher JA agreed, said at 719-720 - "The barrister's alleged negligence involved a continuing course of conduct, or inaction, which extended up until the conclusion of the hearing before Master Greenwood and manifested itself in a failure to make a claim for interest, and to apply for any necessary amendment to the pleadings in order to enable that claim to be pursued. ... The substance of the allegation against the opponent is that he was negligent in the way in which he conducted Mr Tehfe's action, and the principle of immunity which applies in such a case cannot be circumvented by drawing fine distinctions between the preparation and the conduct of the case, or between the opponent's failure to advert to the matter of interest while he was in his Chambers and his failure to do so while he was in Court." 119Gleeson CJ had described at 718 some normal pre-trial consideration and preparation, of which McHugh J in D'Orta-Ekenaike v Victoria Legal Aid at [155] said - " [155] In Keefe v Marks , Gleeson CJ referred to other examples of out-of-court work that would be intimately connected with the conduct of the cause: ' ... interviewing the plaintiff and any other potential witnesses, giving advice and making decisions about what witnesses to call and not to call, working up any necessary legal arguments, giving consideration to the adequacy of the pleadings and, if appropriate, causing any necessary steps to be undertaken to have the pleadings amended.'" 120The trial judge referred at paras 99 and 100 to Philip Walton v Efato Pty Ltd [2008] NSWCA 86, Coshott v Barry [2009] NSWCA 34 and Dancor Pty Ltd v Pagotto [2008] NSWSC 112. 121In Philip Walton v Efato Pty Ltd there was a deficiency in evidence of solvency. Tobias JA, with whom Beazley JA and I agreed, doubted that advocate's immunity applied, because it was difficult to identify a decision affecting the conduct of the case in court to which failure to obtain the evidence led. It was not necessary to come to a conclusion. The respondent in the present case submitted that the appellant's negligence did not involve a decision affecting the conduct of the case, because the evidence of the parties' property and the amount of the NAB debt had not been identified or marshalled and the appellant was not in a position to make a decision. 122This indirectly suggested that a negligent omission could not come within advocate's immunity. That is not correct: see Attard v James Legal Pty Ltd [2010] NSWCA 311 at [9] - "It is clear that the immunity can extend to a negligent omission: for example, Rees v Sinclair (1974) 1 NZLR 180 (at 187); Giannarelli v Wraith itself; and Keefe v Marks (1989) 16 NSWLR 713. There is express reference in D'Orta-Ekenaike v Victoria Legal Aid at [87] to the acts or omissions to which immunity attaches." 123In any event, the submission should not be accepted. The appellant made a decision to conduct the respondent's case at the hearing on the affidavit evidence, which he had drafted or settled in and after October 2004. That decision directly affected the conduct of the respondent's case at the hearing in the District Court. 124Neither the appellant nor the respondent referred to the judgment of Rothman J in Wilson v Carter [2005] NSWSC 1351, in which his Honour said at [55] - " [55] The drafting of affidavits, the determination of the contents of those affidavits and the advices relating thereto, indeed all the tactical decisions associated with the preparation for and presentation of the extension application were, in the circumstances of this case, "intimately connected" with conduct of the case in court and affected the hearing. It is difficult to imagine out-of-court work more connected with the conduct of the case in court than the determination of the witnesses to be called and the evidence to be adduced from them. To the extent that these allegations concern out-of-court work, they are fundamentally directed to such matters or to preliminary steps leading only to such matters." 125This passage was set out by Tobias JA in Philip Walton v Efato Pty Ltd at [81]. His Honour said of it - " [82] The difficulty with this statement is that on its face it would appear to apply to a situation where, months before the hearing of the case in court an affidavit is drafted, sworn and filed which is defective in form but which defect is not ascertained before the affidavit is read when the offending paragraphs are rejected. No doubt it might be said that there was a continuing breach of duty constituted by the failure to appreciate in time the defective form of the affidavit. And yet it seems unrealistic to assert that the negligent preparation of that affidavit was intimately connected with the ultimate conduct of the case in court." 126These observations of Tobias JA are not applicable to the present case. The appellant's negligence in the present case was not drafting a formally defective affidavit or failing to recognise the defect. His negligence was in forming an incorrect view as to the evidence that should be adduced on the respondent's behalf at trial. That view directly affected the conduct of the case in court. 127Coshott v Barry was a case of failure to advise on what claims to bring. In Symonds v Vass [2009] NSWCA 139 at [127] Ipp JA said that "the observations made by Tobias JA in Walton and the finding I made in Coshott should be understood as confined to the specific facts in those cases and are not to be understood as laying down any principle of broader application". The trial judge may have overlooked this in describing the judgments as very persuasive. Be that as it may, the present case is not one of failure to advise on what claims to bring. 128Dancer Pty Ltd v Pagotto was a case of failure to advise on the prospects of the proceedings. That is not this case, and it should be repeated that it was not part of the respondent's case on appeal that the appellant was negligent in advising that his claim to recover what he considered was due to him should be brought as a claim under the Act. The appellant's negligence was when, the claim having been brought, he decided that the case should be conducted on an evidentiary basis which was seen as wanting by Phegan DCJ. 129The respondent submitted that the rationale for advocate's immunity, the finality principle as explained in D'Orta-Ekenaike v Victoria Legal Aid , was absent in the present case. He submitted that the controversy was not quelled and there was no finality which litigation of his claim against the appellant would offend, because the respondent had been free to bring fresh proceedings under the Act (and had done so, albeit with leave because he became out of time). 130This submission also should not be accepted. The proceedings brought against Ms McLennan for which the appellant was retained were resolved by dismissal, resulting in an order for costs against the appellant. Those proceedings, and the controversy constituted by the application made pursuant to r 29.9, were finalised. 131In D'Orta-Ekenaike v Victoria Legal Aid the plurality referred at [70] to the inability wholly to remedy within the original litigation the consequences of the advocate's negligence. As to the consequence of wasted costs, their Honours said that the costs order against the client could not be set aside and the costs incurred could not be recovered from the opposite party. They observed that as to all consequences the client would say that, but for the advocate's negligence, there would have been a different result. After referring to the consequences in other cases, their Honours said - " [83] There remains for separate consideration the last of the three kinds of consequence identified earlier as consequences of which a client may wish to complain: wasted costs. Again, at first sight it might be thought that seeking to recover wasted costs would not cut across any principle of finality. But it is necessary to recall that the general rule is that costs follow the event. To challenge the costs order, therefore, will often (even, usually) involve a direct or indirect challenge to the outcome on which the disposition of costs depended. For the reasons given earlier, that should not be permitted lest a dispute about wasted costs become the vehicle for a dispute about the outcome of the litigation in which it is said that the costs were wasted." 132Litigation of the respondent's claim against the appellant does in fact call in question the correctness of Phegan DCJ's disposal of the proceedings by granting the application for dismissal under r 29.9, see below, although at the instance of the appellant rather than the respondent. As I endeavoured to explain in Attard v James Legal Pty Ltd at [15]-[30], the rationale explained in D'Orta-Ekenaike v Victoria Legal Aid does not require a challenge to finality of a judicial act in the particular case, but the dispute about wasted costs has become the vehicle for a dispute about the outcome of the proceedings heard by Phegan DCJ.
Causation 133Causation is governed by the general principles in s 5D of the Civil Liability Act, relevantly - " 5D General principles (1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm ( factual causation ), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( scope of liability ). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. ... (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party." 134The appellant accepted that his negligence was a necessary condition of the occurrence of the harm to the respondent, so that factual causation was established. He contested whether the scope of his liability should extend to the wasted costs claimed by the respondent. 135Other than by what he said about the part played by lack of evidence in the dismissal of the proceedings by Phegan DCJ and it being unnecessary to investigate the correctness of his Honour's decision, the trial judge did not directly consider causation or scope of liability. It seems that the submissions before his Honour did not advert to s 5D of the Civil Liability Act . 136The appellant submitted that it was not appropriate for the scope of his liability to extend to the wasted costs occasioned by the dismissal pursuant to r 29.9. The submission was put at two levels. 137The first level was that the appellant's conduct of the proceedings at the hearing before Phegan DCJ must also be considered, and that what he there failed to do but for which he was not sued, was also causative. The respondent did not allege negligence on the appellant's part at the hearing before Phegan DCJ, no doubt considering that any such negligence would have fallen within advocate's immunity. 138It is evident that the appellant was taken by surprise by the application for dismissal pursuant to r 29.9, despite Mr Campbell foreshadowing that he may not go into evidence. The appellant was clearly enough not familiar with r 29.9. 139The appellant relied on three matters in his conduct of the proceedings at the hearing. The first was that he unwisely (at the least) said that he would argue the application; as earlier noted, he thereby exposed the respondent to dismissal of the proceedings without being able to rely on cross-examination or the affidavit in reply to assist in making out the respondent's case. The second was that, when Phegan DCJ indicated that he was minded to grant the application, he failed to apply to re-open the respondent's case to tender the part of Ms McLennan's affidavit in which she gave her assets and liabilities with values on the Edward Street property and the Carcoar farm and to read the affidavit in reply so far as it contained evidence of the amount of the NAB debt; nor did he make a call upon Ms McLennan for documents going to those matters; nor, at the last, did he apply for an adjournment. The third was that, although he referred to the cross-claim, he failed to correct Phegan DCJ's incorrect view that it necessarily fell with the respondent's claim, or to submit that the proceedings should not be dismissed under r 29.9 until Ms McLennan's case in chief on the cross-claim had been closed. In this respect the appellant referred to a later decision of Rothman J, Khan v Hadid [2007] NSWSC 314, giving a purposive construction to r 29.10 whereby one cross-claimant could not apply for dismissal until all other defendants had given evidence. 140There is considerable speculation in what would have occurred if the appellant had acted in any of these ways. However, Phegan DCJ was reluctant to grant the application, and the appellant submitted to the effect that his Honour may have permitted re-opening and been persuaded that there was sufficient information as to Ms McLennan's property, and as to the increase in its value to her to the extent of the released NAB debt, to consider the claim under the Act in the manner the appellant was putting it forward. It was submitted to the effect that the appellant, although in extremis, did not attempt any of these measures. 141The second level was that Phegan DCJ had been in error in granting the application pursuant to r 29.9, and that his Honour's error rather than the appellant's negligence should be regarded as the cause of the wasted costs. 142It was submitted, with reference to Khan v Hadid , that his Honour was in error in entertaining Ms McLennan's application for dismissal before she had closed her case on the cross-claim - in substance, without requiring Mr Campbell to elect not to proceed with the cross-claim even if he failed in the application. The principal submission was that his Honour had wrongly accepted that an "asset picture of both parties accompanied by valuations" had to be presented. The appellant submitted that Jones v Grech had not stood for any such need, and that Davies AJA had expressly referred at [29]-[30] to a "general" position. He referred in particular to Manns v Kennedy [2007] NSWCA 217, in which it was said at [78] that the judge had to do the best he could with "scrappy and incomplete" evidence of asset values, and to Paino v Paino [2008] NSWCA 276; [2008] 40 Fam LR 96, in which there was a deficiency in valuation evidence but it was said at [70]-[76] that the court should do its best to determine a value for obviously valuable properties. Although these cases were after the hearing before Phegan DCJ, it was said that they were against the need his Honour had seen for presentation of an asset picture of both parties accompanied by valuations. 143Phegan DCJ may have been persuaded to an over-strict view of the presentation of both parties' asset positions, although the general position to which Davies AJA referred in Jones v Grech was stated baldly in Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360 at [21] in the terms that the first step in the exercise of jurisdiction under the Act is the identification and valuation of the property of the parties; see also the description in Kardos v Sarbett [2006] NSWCA 11 at [29] of three main steps the first of which is the identification and valuation of the property of the parties. 144However, it is not surprising that the appellant did not satisfy his Honour that he could come to a value of the contribution made by the respondent to Ms McLennan's asset position, when the key to the value was the released NAB debt and (apart from through the respondent's affidavit in reply) there was no evidence of the amount of the NAB debt. Vitali v Stachnik to which the appellant referred his Honour was a case of the plaintiff's efforts increasing the value of the defendant's business, but there was comprehensive evidence of the parties' assets and liabilities and of the increase in the value of the defendant's business. The failure to apply to re-open becomes a link between the two levels at which the appellant put his submissions as to scope of liability. 145It must be asked whether it is "appropriate" for the scope of the appellant's liability to extend to the wasted costs consequent on the dismissal (s 5D(1)(b)), with consideration of whether and why responsibility for the harm should be imposed on the appellant (s 5D(4)). The starting-point is that the appellant's negligence brought the occasion for Ms McLennan's application pursuant to r 29.9. 146It is not necessary to express a view on Khan v Hadid or on an analogous construction of r 29.9 where the applicant for dismissal has a cross-claim against the plaintiff, or to attempt to forecast what might have occurred if the appellant had acted otherwise than he did in his conduct of the proceedings at the hearing. Speculation on whether the dismissal might have been averted if the appellant had acted otherwise than he did in opposing the application is not a sound basis for finding a break in causation, and does not in my view materially weigh against imposing responsibility on him. His negligence brought the situation about, and failure so to act as to avert the dismissal, whether or not negligence in itself, should not work to his advantage. 147As to error on the part of Phegan DCJ, a barrister or solicitor should prepare and conduct proceedings so as to guard against the judge falling into error. Even if Phegan DCJ was persuaded to an over-strict view of the presentation of both parties' asset positions, by his negligence the appellant enabled Mr Campbell to exercise the persuasion. The appellant submitted that it was not appropriate that he should be found to have caused the respondent's harm, if the judge had contributed to the harm but it was not open to the appellant to claim for contribution or reduction for proportionate liability. That is no reason to relieve the appellant from his responsibility for the harm. 148In my opinion, but for advocate's immunity it would have been appropriate for the scope of the appellant's liability to extend to the wasted costs.
Orders 149The trial judge's reasons did not include an order for costs. If an order was made in favour of the respondent it should be set aside, and it should be ordered that the respondent pay the appellant's costs. Leave to appeal was granted on condition that the appellant "be liable for the costs of the application for leave and of the appeal of both sides irrespective of the result of the appeal". 150I propose the orders -
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Day
Rogers
(2005) 64 NSWLR 360
(2005) 223 CLR 1
(2001) 27 Fam LR 711
(1989) 16 NSWLR 713