HANCOCK v ARNOLD; DODD v ARNOLD [2008] NSWCA 254 | Case summary

(m) On 26 October 1995 Mr Honeyman arranged a conference with the plaintiff and a loss assessor engaged by the insurer. 13 The events which followed require more detailed consideration. Although a claim had been raised under the Motor Accidents Act and was being investigated by the insurer, no firm decision had been taken to proceed with the claim by way of litigation. As noted above, the plaintiff had recently received a substantial cheque by way of compensation under the Workers Compensation Act and the limitation period for proceedings under the Motor Accidents Act was more than two years in the future. Nevertheless, his Honour held with respect to the solicitor's retainer to advise, there was an implied requirement that the advice was to be given within a reasonable time and that November 1995 "was more than a reasonable time": at [255]. 14 On 27 October 1995 Mr Honeyman prepared observations for the barrister, noting that the compensation matter had been settled, that the plaintiff had advised that his class 3B driver licence would have allowed him to earn between $900 and $1,200 per week gross and asking if counsel "could consider the figures with a view to advising in conference whether he sees it as of value to continue with the motor accidents claim and generally advising our client in regard to quantum". On the same day Mr Honeyman sent the plaintiff a memorandum of fees for work not encompassed by the compensation claim. The bill was for $3,650. That amount included $2,000 on account for further reports which might be sought for the motor accident claim. 15 On 13 November 1995 the barrister gave advice in conference. Mr Honeyman's note of the conference recorded the need to obtain details "as to the availability of work as a driver and rate of pay"; that the plaintiff had suggested two named employers who might provide group certificates of comparable employees with names blocked out, from June 1994 to June 1995, and counsel's advice that the plaintiff would be precluded from social security benefits for a period of approximately five years if he successfully pursued a common law damages claim: at [65]. 16 On 20 December 1995 the solicitors sent a letter to the plaintiff noting earlier discussions in relation to the payment of their bill, and the fact that it was still outstanding. The letter referred to the conference on 13 November, in the following terms: "We confirm that whilst we have commenced proceedings on the Common Law claim, we are not totally confident yet that the net amount and the benefits to be derived from the claim, if it continues, would outweigh what is already occurring. As advised to you in conference, any success in the Common Law proceedings would involve a redemption or pay back of the Workers Compensation amount. It would also preclude you from obtaining Social Security for a substantial period, probably for 5 years or so. Any Common Law claim settlement would also require that any future ongoing medical costs would be borne by you personally. However, we had indicated that the claim is certainly worth considering further and for that purpose we intend to obtain comparable wage earnings from the two other employers, Eastcoast and W & D, noted by you. We recall that you were to provide to us details of their addresses and phone numbers so that we could pursue this and we would be much obliged if you could please follow this up and advise Nichole of this office as soon as possible. Separately, you might recall on the 9th November we forwarded to you a copy of a letter from Leanne Reynolds, the investigator that initially commenced an interview with you in the writer's presence at this office. You will recall the purpose of the interview was to obtain more details of the accident so Leanne could report back to her own insurers, that being the insurers in relation the prospective Common Law claim. The insurer is entitled to seek reasonable answers under the Motor Accidents Act in regard to matters pertaining to the claim and we do recommend that you provide answers, as best as possible, to the questions provided to you. We appreciate that there are some matters to be attended to by you and it would be difficult to address these from time to time. Notwithstanding that, it would really assist us, and in turn help you, if you could attend to these matters fairly shortly. In summary these are therefore: 1. If not already attended to, please make payment of our costs; 2. The addresses and phone numbers of the Companies referred to above; 3. Replies to the letter provided to you with ours of the 9th November last." 17 A further brief letter of 12 January 1996 asked the plaintiff to telephone Mr Honeyman. On 15 February 1996 Mr Honeyman spoke to Ms Reynolds (the insurance assessor) by telephone and indicated to her "the difficulty I had". On Monday, 19 February 1996, Mr Honeyman made a note of the following telephone conversation with the plaintiff: "Finally with some success on 15 February 1996 he confirmed he was still living at William Street, Richmond but that he had received no mail whatever from us. I expressed surprise at this and asked how I could guarantee some mail might be forwarded so that it would be received and we agreed that I would send it to his mother's address …. I asked that he keep a note that if nothing had arrived by next Wednesday, 21 February, he was to telephone me so that we can make yet further arrangements." 18 On 19 February 1996, Mr Honeyman wrote to the plaintiff in the following terms, care of his mother's address: "Further to the writer's telephone call with you on the 15th instant, we now enclose further copies of our letters dated 27 October (with account), 9 November (with enclosure), 20 December 1995 and 12 January 1996; previously forwarded to you apparently not received at William Street, Richmond. You might please confirm whether for future correspondence, we should continue to write to you care of your mother. We would particularly be obliged if you could consider all the correspondence now attached carefully and let us have some answers as might be required. It particularly concerns us that we have been formerly unable to commence proceedings in regard to the possible Common Law claim until we receive the information requested in our attached letters. Given the period which has since intervened, we would also be much obliged if you could arrange by return to let us have payment of our outstanding account." 19 On 26 February 1996 the insurer wrote seeking an immediate response to the request for particulars sought in the letter of 5 August 1995. The particulars sought were as follows: "1. A photograph of your client duly authorised on the back. 2. A copy of your clients drivers licence, passport or citizenship papers for identification purposes. 3. Tax returns for the past three years. 4. Names and addresses of all treating practitioners that have been seen by your client. 5. Any out-of-pocket expenses for our consideration. 6. Details of any employers for the past three years. 7. Details of any previous personal injury claims of any type. 8. Details of income from any other source such as Workers Compensation, Social Security, etc". 20 On 28 February, the solicitors wrote to the plaintiff again emphasising the urgency of the outstanding matters. On 5 March, there was telephone contact with the plaintiff and a note of him saying that "he only got the paperwork yesterday". The plaintiff promised to ring on the following day to make an appointment to attend the solicitors and go through the paperwork. 21 On 7 March 1996 the plaintiff attended with his partner, Jenny Buck, and conferred with Mr Honeyman for an hour. The file note stated that Mr Honeyman explained some of the options again as the plaintiff appeared to have "a vague recollection of matters previously discussed in conference with Counsel". The file note also described two further concerns identified by Mr Honeyman in the following terms: "I had fears about his handling the monies paid to him when he gave me explanations as to what had happened to him over the last 5 or 6 months. He said he had basically gone feral and gone off the air. He did not offer any further explanation so I did not seek it, although I get the view that he may have been mixing with a group of people who had befriended him as a result of his obtaining the money. He said he had lent a substantial amount of the money to 'friends' but I shouldn't worry about that because he had 'got it down in writing and it was all legal'. That concerned me a great deal but he appeared not to wish to discuss that any further. He indicated that he had been to Queensland for some time, had brought [sic] a Stingray Corvette car for $28,000, it had blown up on the way back from Queensland and he had it towed to Sydney. He spent about $8,000 getting the motor repaired and also brought [sic] a number of other things. It concerned me and I expressed my concern that if we did commence common law proceedings and he did receive further money then it was quite likely the same situation would arise again. Whereas at least from the workers compensation proceedings he is in effect protected from himself because he is on the system which would pay expenses and compensation as it falls due. If common law claim is successful and he received a further lump sum I have fears that it might disappear quite quickly." 22 The conference on 7 March appeared not to have included identification of the particulars sought by the insurer. On 11 March 1996 the solicitors wrote to the plaintiff in the following terms, referring to the conference on 7 March and continuing: "We note you have not yet completed the questionnaire from the representative of the insurer and note that you said you would attend to it on or before the 13th March 1996. We note you were also to check with the RTA to establish whether it has a record of the letter apparently forwarded to you, but subsequently mislaid, which confirmed that you could proceed to a 3B Truck Licence. We note from your instructions that you had a permit to be a concrete pump operator. We note that you also have a copy of our account of the 27th October 1995 and have indicated also that you will arrange payment by the 13th inst. As indicated, we have carried out quite a deal of work over an extensive period now without any payment at all. It will be necessary for us to carry out substantial further work shortly in relation to the possibility of a Common Law claim and confirm we are unable to do so without receiving funds for the work previously carried out. We note that if proceedings are to be considered, then it will be necessary to formally commence those this month. Proceedings would otherwise be out of time. The Court Rules prevent us from commencing proceedings until we have undertaken all steps to co-operate with the insurer in relation to answering particulars. We take it you appreciate the importance of the present situation and look forward to hearing from you in each of these matters noted hereunder by return: 1. R.T.A letter; 2. Return of answers to questionnaire; 3. Payment of our costs to date." 23 The letter of 11 March 1996 was sent some 22 months after the accident. It was not correct to say that proceedings would be out of time if not commenced in that month. However, it appears that Mr Honeyman was seeking to instil a sense of urgency in the plaintiff, possibly anticipating objection from the insurer if the particulars were not provided as a matter of urgency. 24 On 20 March, Ms Buck sent a handwritten response to the 79 questions formulated by the insurance assessor. Not all questions were answered. On 25 March 1996 the solicitors wrote again to the plaintiff noting the questions which remained unanswered and that payment of their account had been outstanding for five months. Despite protestations in relation to carrying out further work without payment, a draft statement of claim with particulars was enclosed. The difficulty Mr Honeyman had encountered in seeking to contact the plaintiff by telephone was duly recorded. 25 On 15 April Mr Honeyman supplied the insurer's assessor with the answers provided in the facsimile from Ms Buck, indicating that about 12 questions were yet to be answered. 26 On 26 April, Mr Honeyman spoke with Ms Buck by telephone. Although she and the plaintiff had separated "at around Christmas" 1995, they were still in contact. She had noticed one of the solicitors' letters in his car unopened about two weeks after he had picked it up. Mr Honeyman told her that he was ready to send a letter terminating the retainer, but agreed to delay on the understanding that Ms Buck would seek to speak to the plaintiff in the coming week or so. 27 On 10 May the solicitors wrote to the plaintiff stating that unless they heard from him "to the contrary within 10 days from today, we intend to formally terminate instructions". A further updated account was included in the amount of $6,439. Some of the account included work which was anticipated but had not been undertaken. 28 On 18 June 1996 a further lengthy letter was sent to the plaintiff, care of his mother's address. It read in part: "We refer to ours of 10 May 1996 and note that we have not received any reply or response at all. Knowing somewhat your own background, the writer can only take the view that your total lack of response or co-operation is no doubt directed entirely or almost entirely to the shocking trauma that has occurred. I can only draw the conclusion that in some way you are withdrawing from anything to do with the accident and may for reasons particularly good to yourself wish not to discuss or think about it. It may be that I can assist you in that regard, either by some personal discussion or if you prefer, referring you to some more adequate counselling to at least help in dealing with what you must be suffering. If I can be of any assistance whatever in helping in that way, please without hesitation telephone me at your convenience. Jason, it is however necessary that I also complete some formal requirements. Based on our not receiving any reply whatever, I take the formal view that we are not to continue in any way with the claim and I wish to record that with you now formally. I have already spelt out on a number of occasions both by telephone and correspondence that any claim you have contemplated in relation to Common Law Proceedings has been jeopardised and being out of time may now not be in a position to be brought. We have discussed also on a number of occasions the matter pertaining to outstanding fees to this firm. The writer took it upon himself to subsidise those fees and under the circumstances of his background, both with you and your family, to deviate from our usual practice that is to deduct fees at the time of receipt of settlement monies. The other purpose in deviating from that usual course was for the writer to go out of his way to assist you in arranging urgent providing of money to you, the delay of which in relation to clearance of cheque in your view would jeopardise plans you had at that particular time. The writer does feel particularly let down by your non-response to our continuous request for payment, part of which now extends back for a period of approximately 9 months." 29 On 20 June Mr Honeyman spoke again to Ms Buck. She said that she had passed on to the plaintiff the last message from Mr Honeyman but had not seen him for some time. She believed he may have gone to Queensland, but had no contact number or address. The letter of 18 June was returned to the solicitors. Plaintiff's evidence - causation 30 In order to determine whether any negligence of the lawyers caused the plaintiff to take a negative view of his prospects with respect to a damages claim, it was necessary for his Honour to determine what advice would probably have been given, absent the identified negligence. That question will become hypothetical, once it is accepted (as indicated below) that the conduct of the lawyers did not reveal negligence. Lest those conclusions be thought erroneous, it is appropriate to identify the evidence given by the plaintiff as to whether, on the basis of assumed advice, he would have actively pursued the motor accident claim. 31 The evidence led from the plaintiff focused on an actuarial report prepared in March 2000 by Carroll Humphreys Ranson for Woodward, lawyers of Coolangatta, from whom the plaintiff had sought advice with respect to a suggestion from the workers' compensation insurer that he obtain a lump sum by way of redemption of his compensation entitlements. It is not necessary to identify the basis of the calculations adopted by the actuaries, but sufficient to note the summary of conclusions reached in quantifying future losses as at 23 March 2000 to which the plaintiff was taken in his evidence: Future loss of income $385,399 Loss of superannuation $32,489 Future cost of medical treatment $450,345 Total $868,233

32 The plaintiff was shown the document in cross-examination and questioned about his response to it in a context which commenced with reference to the letter from his former solicitors of 20 December 1995 set out at [16] above. The examination in chief proceeded as follows (Tcpt, 30/05/05, pp 22-24): "Q. What, if any, attitude did you take to being told in the letter that the solicitor was not totally confident that the net amount of benefits to be derived from the common law claim would outweigh what was already occurring? A. I was not too happy about that, risking my workers comp payments for it. I was undecided what to do. They were no help. Q. Sorry? A. He did not help me. I was undecided because he was undecided. Q. Did you do anything when you got that letter, or not? A. No. Q. Did you get some further correspondence from the solicitor later? A. Yes. Q. Did you at all times deal with that, or not? A. Not at all times. Q. Why not? A. I had lost interest, not lost interest, I was disheartened, I guess. He was not helping me. He seemed to be writing letters for no reason. Q. Did you get some letters advising you time was running out to sue for motor accident? A. Yes. Q. What attitude did you take when you got those letters? A. Still the same attitude. I did not know what to do. I was not keen on chasing the motor vehicle accident. It seemed too risky at the time. Q. Why were you not too keen to chase the motor vehicle accident at the time? A. Because I could not afford to lose my medicals. … Q. Some time later was there an approach made for you to consider taking a lump sum by the workers compensation insurer? A. Yes. Q. In place of your workers compensation benefits? A. Yes. … Q. So you went to local solicitors who organised a report? A. Yes. … Q. Did they tell you what was in the report, or give you a copy of the report, or show you the report? A. They did not show me the report as much as showed me a figure. … Q. What is your recollection of that figure? I am not asking you to tell us what the figure is in the document? A. How much I remember the figure to be? Q. Yes, approximately? A. Around $860, 870, 880 - in the eight hundreds anyway. Q. If Mr Honeyman had given you advice to the effect that your motor accident claim might be worth of that order, but you would lose your compensation rights, what would your attitude have been? A. I would have got him to proceed. I would have been very happy with that price." 33 This evidence was not entirely satisfactory, in a number of respects, some of which will be considered below. One was that the plaintiff neither told Woodward of the fact that he had already made a claim under the Motor Accidents Act for damages, nor did he take any steps to pursue such a claim after being shown the figure at which the actuaries had arrived as the amount of his entitlements: Tcpt, 30/05/05. pp 67-68. Further, no reference was made to the fact that the total arrived at by the actuaries included a sum of over $450,000 for future medical treatment, being more than triple the figure his Honour calculated as reasonable in November 1995: at [338]. Once that figure was removed, the amount calculated was below the higher figure proffered in conference by Mr Dodd. Breach of contract - solicitors (a) particulars of breach 34 As the trial judge explained in relation to the first conference with counsel of October 1994, there was agreement that the lawyers would focus first on obtaining a lump sum payment under the Workers Compensation Act, "get things started for a claim under the Motor Accidents Act, and then decide whether to pursue the Motor Accidents Act claim": at [91]. That approach was adopted at least until mid-September 1995, when the compensation claim was settled. Thereafter, Mr Honeyman acted with reasonable diligence in arranging a second conference with counsel on 13 November 1995. After that conference, it is apparent that the plaintiff lost interest in pursuing his claim for damages. 35 In order to succeed in negligence against the lawyers, the plaintiff had to establish that they had been negligent up to 13 November 1995 and that it was their negligence which had caused him to lose interest in his claim. His case would have been stronger if he could establish not merely that they failed to pursue his interests expeditiously, but that he received positively negligent advice which dissuaded him from taking further steps. If they had merely been dilatory, he would have needed to justify his failure to take his business elsewhere. In other words, unless he could establish that he was positively discouraged from continuing with the damages claim, due to negligent advice, there were significant causation problems in demonstrating that the absence of firm advice led him to abandon his claim and thus the opportunity for a beneficial judgment (or settlement). 36 The particulars of negligence relied upon by the plaintiff were summarised by the trial judge at [269]: "(i) The Plaintiff was not given any advice as to liability or the prospects of success in a Common Law action; (ii) The Plaintiff was not given any evaluation of his Common Law case. (I take this complaint to refer to an amount of likely damages); (iii) The Plaintiff was given no advice as [to] the Griffiths v Kerkemeyer component of damages; (iv) The Plaintiff was given no advice as to the Fox v Wood component of damages; (v) The Plaintiff was given no advice as to past or future superannuation; (vi) The Plaintiff was given either no advice or [no] specific figure for future out-of-pocket expenses; (vii) The only capital sum(s) of which the Plaintiff was advised, viz those for future economic loss, were given to him when he was in a state of agitation; and (viii) Mr Honeyman failed to obtain a report from the supplier of the Plaintiff's prosthesis which would have established the Plaintiff's past, present and ongoing needs and the costs thereof." 37 The trial judge rejected particulars (i) and (vii) as not made out. He accepted that (iii) and (iv) were factually correct, but that the amounts were immaterial and could thus be disregarded. 38 The statement that the plaintiff was not given "any evaluation" of his likely damages - particular (ii) - although said to be made good, was not entirely consistent with the proposition that he was given a range of possible recovery for future economic loss, which was also stated to be the only significant head of damages available to him. Particular (v), concerning a component for lost superannuation, was directly related to economic loss. At that time superannuation entitlements were calculated at 5% of gross earnings, although the legislation provided that, over the next six years, the proportion would increase to 9%. His Honour was satisfied that no advice was given in relation to that item. However, the significance of the calculation, held by his Honour to be material, needed to be considered in the light of the uncertainty as to potential future economic loss, to which it related: at [271]. 39 Particulars (vi) and (viii) were related. The complaint made with respect to the costs of replacing the prosthesis was that Mr Honeyman failed to check the actual costs from the manufacturers, Appliance & Limb Centre (International) Pty Limited ("the Appliance & Limb Centre"). On 5 December 2003, that organisation provided a report in relation to supplies to the plaintiff which indicated that on 30 November 1994 he received a prosthesis at a cost of $6,345.95 and on 26 May 1995 a further prosthesis at a cost $12,171.20. (There were additional minor expenses involved with the latter.) However, as with economic loss, the critical question was not the actual amount which was likely to be awarded, but the likelihood that such an amount would provide more advantageously than would a continuation of the ability to recover under the workers' compensation scheme. The plaintiff needed to prove that, had the solicitors taken reasonable steps to assess those matters, they would have advised that there was a significant benefit to the plaintiff in seeking to recover damages at common law. As will be seen below, the evidence did not establish the factual premise for that conclusion. 40 In relation to future economic loss, his Honour accepted that counsel provided calculations at the second conference suggesting that he would receive an amount of approximately $234,000 on the basis of his rate of pay at the time of the accident, namely $450 per week, taking account of a residual earning capacity and 15% reduction for vicissitudes: at [120]. Counsel also made a calculation on the basis that he might have achieved gross earnings of $900-$1,200 per week with his class 3B truck licence. On that basis, and using the same assumptions, counsel advised that an amount of $429,000 would be recoverable for future economic loss, the net figure used equating with a gross figure of approximately $1,100 per week: at [121]. Counsel also noted that his current rate of compensation was $364 after tax per week: at [123]. 41 According to the plaintiff's evidence in chief, he was left with the impression that he would be no better off pursuing a damages claim and that he would be positively better off if he stayed with his compensation entitlements: Tcpt, 30/05/05, p 16. As this view seems to have been based on a calculation that he would have to repay compensation of approximately $160,000 out of the amount for future economic loss, it seems likely, as his Honour held, that his description of his understanding was derived from the conference in November 1995, although he said that it arose during the conference in October 1994 (Tcpt, p 15(55)): [92]. 42 His Honour's reasoning with respect to the liability of the solicitors was based on the premise that Mr Honeyman had been dilatory in failing to obtain proper evidence to support the calculation based on the higher figures. However, there was nothing in the plaintiff's evidence which suggested that uncertainty as to his ability to prove an earning capacity of approximately $1,100 per week gross affected his state of mind at the end of the conference. 43 No doubt it was correct to say that inquiries in that respect could have been made prior to the conference on 13 November 1995. However, it does not follow that it was negligent not to obtain that information by that date. Further, it was necessary to find that if the additional inquiries had been made, they would have resulted in affirmation of the figures put forward by the plaintiff. However, his Honour said at [323]: Except for a little from Mrs Constable, no evidence was called before me as to what the response of Mr or Mrs Constable, Darryl Day, W & D Mobile or East Coast Concrete Pumping or any other such person would have been to any of the enquiries that should have been made by Mr Honeyman. Almost the only evidence which bears on the topic is some evidence of Mrs Constable to the effect that in the financial year ending 30 June 1999 the average weekly earnings paid by Constable Brothers to a pump operator were, she thought, approximately $1,000, together with superannuation in accordance with the Commonwealth legislation. Mrs Constable said that obtaining his full crane operator's ticket would, but obtaining his 3B driving licence would not, have resulted in an increase in pay from what the Plaintiff was receiving pre-accident. Mr Constable's evidence leads me to the view that obtaining the crane operator's ticket would have been within a matter [of] days after the accident although there is not evidence that any increase in pay would have been immediate." 44 His Honour then noted that the award rates for mobile concrete pump operators appeared to be "much less than" the figure advanced by Mrs Constable. His Honour adopted her figure and, applying a discount to obtain the relevant figures for the year ended 30 June 1995, concluded that the appropriate amounts were $885 per week gross and $634 net. Those were the figures which his Honour concluded Mr Honeyman would have discovered had he made inquiries at the appropriate time: at [326]. (b) limiting the time for advice 45 As noted above, the contract between the plaintiff and the solicitors involved an oral agreement, Mr Honeyman being an acquaintance of the plaintiff's father. Although it was put to Mr Honeyman in cross-examination that he was dilatory in obtaining basic information from the plaintiff which would have been relevant to a common law damages claim, there was no suggestion that there was any contractual obligation to advise within a particular time. Rather, the focus of his instructions, was to proceed expeditiously with the compensation claim and then to consider the damages claim. In fact some necessary steps were taken in relation to the damages claim before the compensation matter was settled. Those steps included the lodging of a claim under the Motor Accidents Act with the third party insurer and arranging at least one conference between the investigator appointed by the insurer and the plaintiff. 46 Arguably there was an implied term in the contract between the solicitors and the plaintiff, requiring the solicitors to take all reasonable steps to ensure that the plaintiff was properly advised as to his rights in a timely fashion, so that he was not deprived of compensation or damages for loss for an unreasonable period and, more precisely, to ensure that necessary steps were taken to institute proceedings within the limitation period prescribed by law: see, eg, Winnote Pty Ltd v Page [2006] NSWCA 287; 68 NSWLR 531 at [83]-[84] (Mason P); Schmidt v Townsends [2000] SASC 363 at [25] (Gray J). 47 The bases upon which such a term may be implied in a retainer are those which operate generally with respect to contracts and the term must therefore comply with the principles established in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283 and reiterated in numerous authorities, including Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337 at 347 (Mason J). The requirements, including that the term be (a) necessary to give business efficacy to the contract, (b) so obvious that 'it goes without saying' and (c) capable of clear expression, may more readily be satisfied by a term expressed at a high level of generality, than one expressed with greater precision. With respect to performance within a reasonable time, Lord Watson explained the operation of the term in Hick v Raymond & Reid [1893] AC 22 at 32-33: "The rule is of general application, and is not confined to contracts for the carriage of goods by sea. In the case of other contracts the condition of reasonable time has been frequently interpreted; and has invariably been held to mean that the party upon whom it is incumbent duly fulfils his obligation, notwithstanding protracted delay, so long as such delay is attributable to causes beyond his control, and he has neither acted negligently nor unreasonably." 48 If, in the present case, the term to be implied in the contract was that final advice be given in relation to whether or not to proceed by way of a damages claim by November 1995, there might have been doubt as to whether such a term was reasonably necessary for business efficacy or, in the relevant sense a term which "goes without saying". While such a precise term would not be implied, in relation to the more imprecise term it is a matter for the Court to determine what constitutes a "reasonable time" - see Hick at 29 (Lord Hershell LC). The fact that a term with the suggested specific limitation would not be implied suggests that it would not be appropriate so to identify a "reasonable time" for the purposes of the more general term. 49 In identifying November 1995, as the date by which definitive advice should have been given, his Honour appears to have been assessing reasonableness objectively, as might be appropriate in respect of a claim in negligence. However, the relationship between the plaintiff and his solicitors was, at least in part, based in contract. The terms of the relationship were open to negotiation and agreement between the parties: see Astley v Austrust Ltd [1999] HCA 6; 197 CLR 1 at [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). It is of significance that at no stage did the plaintiff suggest that definitive advice was required by November 1995, nor did the solicitors expressly agree to provide advice by that time. It is clear that the plaintiff understood, following the conference of 13 November 1995, that further investigations were required. He did not then complain to the solicitors that they were at fault in not having undertaken the investigations earlier. No evidence was led from the plaintiff of any expectation as to when definitive advice would be supplied with respect to the damages claim: cf Tcpt, 30/05/05, pp 14-16. In cross-examination the plaintiff gave the following evidence in relation to the advice given in November 1995 (Tcpt, 31/05/05, pp 144-145): "Q. Well, did you understand that he [Mr Dodd] was trying to make an assessment about whether it was appropriate for you to bring a motor accidents claim? A. Yes. Q. You were aware … that he needed information from you to assist in that task? A. Yes. Q. He needed information from other people besides yourself? A. Yes. Q. You understood that Mr Honeyman and yourself were to provide him with that additional information? A. Yes. Q. And you understood at the end of the conference - that is, the second conference - that further information had yet to be obtained? A. Yes." 50 There was similar cross-examination, on the following day (Tcpt, 01/06/05, p 157): "Q. I want to put it to you that during the second conference or by the conclusion of the second conference you knew that further steps had to be taken to prepare the case? A. Yes. Q. That those further steps needed to be undertaken to determine whether it was appropriate for you to stay with your workers compensation entitlements? A. Yes. Q. Or commence a motor accidents claim? A. Yes. Q. And you were aware at the second conference that in order for that to happen, further inquiries were to be undertaken? A. Yes." 51 There were no questions in re-examination in relation to this evidence. It follows that the plaintiff had, correctly according to the understanding of the lawyers, identified that no firm advice had been tendered to him with respect to pursuit of the damages claim or staying within the workers' compensation system. He also understood that further information was required to be obtained for that advice to given. He did not suggest that he wished to withdraw his instructions, nor did he withdraw his instructions. Nor did he say anything at that conference, as indicated in the evidence, to express any level of disquiet with the time taken to pursue a damages claim or to decide whether to pursue one. That may have been because he had received a significant lump sum payment by way of compensation only two months earlier. 52 A solicitor's retainer in relation to possible litigation is rarely immutably fixed at the date on which it commences. It is desirable that the prospective client be given a rough timetable as to the steps which may be required and when they are expected to occur; it is necessary by law for the solicitor to provide a letter setting out the basis on which the client will be charged and an estimate of the likely costs. In relation to litigation, it is common, if not usual, for time and costs estimates to change over the course of the retainer. In the absence of any indication to the contrary, it may reasonably be inferred that explicable delays, known to the client, may result in variation of any anticipated timetable, assuming that such a timetable formed a limiting term of the original contract. In the present case there appears to have been discussion as to how long it would take for the compensation claim to be resolved, but no discussion as to how long the damages claim would take. The only evidence in relation to that matter was to be found in the letters from the solicitors, following the conference in November 1995, pressing the plaintiff to take steps required of him in relation to pursuit of the claim under the Motor Accidents Act. 53 Although there may have been implied time limits in the retainer, in accordance with ordinary principles in relation to the implication of contractual terms, it was not necessary to imply a term that definitive advice be given with respect to the damages claim by November 1995. Nor, in the absence of such a contractual term, was it correct to impose a legal obligation in those terms, breach of which would constitute negligence. It follows that his Honour was in error in concluding that there was liability on the part of the solicitors in not giving, or arranging for counsel to give, definitive advice by November or December 1995. (c) causation 54 For reasons already given, the plaintiff's evidence provided no adequate basis for concluding that, absent the elements of the legal advice said to involve negligence, the plaintiff would have actively pursued the steps required of him with respect to the damages claim. A full assessment of whether non-negligent advice would have resulted in a different approach on the part of the plaintiff required reference to objective evidence as to what he did or did not do in the course of 1995 and 1996 and to his explanations for his conduct. 55 The trial judge summarised this material at [181]-[188]. However, it is not entirely clear whether all of the plaintiff's evidence, or, if not, which parts, were accepted when it came to discussing causation. It seems likely that his Honour did accept his statements in large part, because he considered it "not … unreasonable" effectively to abandon pursuit of the damages claim after the November 1995 conference: at [314]-[318]. Implicitly, his Honour accepted the causal link between the conference and his conduct, as the plaintiff stated in his evidence. 56 As indicated above at [32], the plaintiff gave two reasons for not actively pursuing his claim after receipt of the letter of 20 December 1995. One was that he was undecided and was not sure whether he should risk losing the benefits available under the workers' compensation scheme by pursuing a damages claim. The second was that he felt that Mr Honeyman "was not helping" and "seemed to be writing letters for no reason": Tcpt, 30/05/05, p 22. The former reason is understandable: the latter does not fit well with other available material. That material included evidence referred to in part above indicating that Mr Honeyman had diligently pursued the compensation settlement in the face of demands by the plaintiff that he needed access to funds urgently; had sought to facilitate the immediate use of the funds for purchase of a vehicle, by providing authorities to car yards and had released the funds without assessing any liability of the plaintiff for legal costs. 57 The evidence of the plaintiff's conduct thereafter was not inconsistent with Ms Buck's colloquial statement that he had "gone feral". His explanation for not paying the solicitors' fees was that he "couldn't see where his bill was coming from": Tcpt, 30/05/05, p 66. That was not consistent with his promises to pay without objection to the fact or the amount of the bill. Similarly, his comment that he would pay Mr Honeyman "[w]hen he started doing his job" (Tcpt, 31/05/05, p 114) was also inconsistent with his understanding that Mr Honeyman was asking for information from him. 58 These, and similar, inconsistencies, were not addressed in his Honour's reasons and need not be resolved here. It is sufficient to say that there was a body of evidence supporting the view that the plaintiff did not seek to pursue his damages claim for reasons other than the imputed inactivity on the part of Mr Honeyman. 59 However, his Honour took some care in identifying the calculation which, in his view, should have been done in November 1995 in order to determine the response of the plaintiff if advised in conference of the appropriate quantum of a likely award of damages. As noted above, he assumed that the advice as to the higher earnings of a crane operator would have been obtained and would have indicated a figure of $634 net per week for the year ended 30 June 1995. His Honour then calculated the capital value of earning capacity on the basis of that figure and the two possible assessments of residual earning capacity adopted by Mr Dodd, namely $150 and $200. (He did not make a calculation based upon his own assessment of residual earning capacity of $100 per week.) Nevertheless, based on Mr Dodd's assessment, and including an amount for superannuation and for past economic loss, as well as future prosthetic replacements, his Honour identified a range of between $553,258 and $510,754. Those amounts included an assessment of future out-of-pocket expenses, in each case, of $127,751. He concluded that, with the relevant information, Mr Dodd would have estimated likely damages as within that range: at [341]. 60 After referring to the plaintiff's response to the proposal that he would have proceeded if advised that the "price" was $868,233, his Honour continued at [348], in the following terms: My inclination is to think that probably the extra $100,000 or so involved in an assessment of the order of $510,000 to $553,000 rather than the figure of $429,000 would have induced the Plaintiff to pursue the Common Law route, particularly if that assessment was indicated as fairly firm as the product of corroborative information as to the availability of a higher income had the accident not occurred. The Plaintiff's delay in deciding against the Common Law route when the assessment included a top figure of $429,000 argues in that direction." 61 Standing alone, this reasoning would be unpersuasive for two reasons. First, the higher figure in his Honour's range included an amount on account of future prostheses which, when removed, left $425,507 as the appropriate figure for past economic loss, future economic loss and lost superannuation benefits. This figure was lower than the top of Mr Dodd's range for future economic loss. The differential of $100,000 to which his Honour referred would thus be removed, unless it be assumed that the different bases of the calculation were not to be included in the hypothetical advice, which is an untenable assumption. 62 Secondly, there was no evidence which supported his Honour's "inclination" as to the plaintiff's response and it was not possible to arrive at any firm conclusion as to what the response might have been, if, in particular, the basis for the variations in the figures had been explained. His Honour was conscious of the missing element and noted that it was not only the change in the "final figure" which should be taken into account. He stated at [349]: "The figures of $510,000 to $553,000 include a calculated capital sum representing the value of the prostheses etc at the rate they were costing at that time. It strikes me as likely that if advice on the basis of the information Mr Dodd should have had available to him in November 1995 was being given the Plaintiff would have been made aware of the fact of calculation, that the basis of it included the actual cost of prostheses replacement, and of the fact that the figures of $510,000 or $553,000 or whatever amount was finally awarded included or would include not only an allowance for future prostheses and medical expenses but an allowance based upon the upon the actual up-to-date cost of replacement of the prostheses." 63 Pausing at that point in the reasoning, it should have been noted, but was not, that this advice would have indicated that the hypothetical award differed from the top of the range identified by Mr Dodd only by the amount of the prosthesis replacement figure. The first conclusion tentatively drawn would have been entirely nullified by that aspect of the further advice. 64 His Honour continued: "There is no doubt that possible inability to fund these replacements was a major concern the Plaintiff had and, for one reason or another, this was not addressed and the advice which should, and I think would, have been given would have been calculated to allay concerns arising from replacement costs well in excess of the $2,866 on which the $89,973 was based. Such advice would probably also have avoided the Plaintiff's belief that the sums at which Mr Dodd arrived on the basis of future lost earnings were what the Plaintiff would receive 'full stop' and the cost of future prostheses had to be met out of these." 65 His Honour then concluded at [350]: "These further matters strengthen my view that, had Mr Honeyman's omissions not occurred, the Plaintiff would have instituted Common Law proceedings." 66 With respect, it might have been thought that more would have been required to allay the plaintiff's concerns. The necessary questions were: (a) what advice would have allayed his concerns and induced him to proceed? and (b) was it negligent not to give such advice? The figure which the plaintiff had in mind for replacements of the prosthesis (although wrongly calculated without reference to present capital value) was only some $38,000 below the figure which his Honour said should have been included. Secondly, his Honour had already rejected as inaccurate the plaintiff's belief that he had been told that future lost earnings were all that he would receive in a damages claim. Nor had his Honour previously concluded that the plaintiff's error in that respect had been induced by negligence on the part of Mr Dodd or Mr Honeyman. Thirdly, for reasons already given, there was no evidence that, even if he had firm figures in relation to the cost of prosthesis replacement, Mr Dodd would or should have given advice "calculated to allay concerns arising from replacement costs". 67 It was not necessary that the plaintiff give evidence as to what he would have done in hypothetical circumstances, accurately defined in accordance with the findings of the trial judge and, indeed, evidence of the kind referred to above might appropriately be discounted as carrying limited weight: see Rosenberg v Percival [2001] HCA 18; 205 CLR 434 at [15]-[17] (Gleeson CJ), [44]-[45] (McHugh J), [86]-[87] (Gummow J), [157]-[158] (Kirby J) and [221] (Callinan J); applied in Chamberlain v Ormsby t/as Ormsby Flower [2005] NSWCA 454 at [137]. Rather, the trial judge was required to draw the reasonable inference in the circumstances from all of the material available to him. On the assumption that the lawyers were required to give definitive advice by November or December 1995, there was, nevertheless, insufficient evidence to demonstrate that the advice they gave was negligent and, more clearly, an absence of probative material from which to infer that, properly advised, the plaintiff would have taken a different course thereafter from that which he did take. The case against the solicitors should have failed for this additional reason. Breach of duty - barrister 68 At trial, the plaintiff did not sue the barrister: it was the solicitors who brought the barrister, Mr Dodd, in by a cross-claim. Accordingly, if the solicitors are not liable to the plaintiff in negligence, no occasion arises to consider any liability of the barrister. Although the solicitors should succeed on liability, it is desirable to address the closely related issues regarding the liability of Mr Dodd. 69 The trial judge accepted that Mr Dodd was not in a position to give final advice as to the pursuit of a common law claim at the conference on 13 November 1995 because of the absence of information which he reasonably regarded as necessary for such advice and for which absence he was not responsible: [297]. His Honour proceeded, stating that the barrister "could have given advice on the basis of instructions or assumptions": at [297]. What precisely was meant by "advice" in this context is unclear, but it appears to have referred to firm advice as to whether or not to proceed with the claim. It was not in dispute that Mr Dodd did give advice in two respects. First, he advised that the principal benefit from a damages claim would be the recovery of future economic loss in an amount considerably in excess of that available by way of compensation. Secondly, on the assumption (based on the plaintiff's instructions) that he could have earned approximately $1,100 gross per week from a time shortly after the accident, he provided an estimate of quantum with respect to that item. 70 The finding of negligence with respect to Mr Dodd was based on the proposition that there were three other steps which he should have taken at the conference on 13 November 1995, but did not. (a) failure to address superannuation 71 His first failure was to omit reference, in the calculation of figures for future economic loss, of any allowance on account of superannuation: [298], [302(i)] and [351]. Mr Dodd agreed that he had not given the plaintiff any advice in respect of the quantum of superannuation entitlements, because, he said, the calculation was dependent upon the appropriate assessment of economic loss: Tcpt, 06/06/05, pp 443-444. That was not an entirely satisfactory response: the plaintiff could readily have been told that the calculation based on loss of earning capacity would be increased by an amount of a little under 9% on account of superannuation. On the other hand, a factor of 9% was not significant given the degree of imprecision in the calculation. Unless there was an obligation for Mr Dodd to provide a definitive evaluation on 13 November 1995, there was no lack of reasonable skill and care in failing to advise about superannuation at that time. Assuming that it was negligent of Mr Dodd not to give that advice at that time, there was a real question as to the extent to which such an omission caused the plaintiff to abandon his pursuit of the damages claim. (b) assumption as to residual earning capacity 72 The second matter identified as negligence was the making of an assumption as to the plaintiff's residual earning capacity. At the time of the conference in November 1995, Mr Dodd had available to him two brief medical reports, one from the treating orthopaedic surgeon, Dr Wong, and one from an orthopaedic surgeon to whom he was referred by the insurer, Dr Robert Elliott. Dr Wong noted in his report of 16 August 1994, having seen the plaintiff on that date: "I certified him fit for light duties from 17th August 1994. As he was only interested in outdoor work, I advised him to see the Rehabilitation Physician for vocational guidance." 73 In a second report of 26 October 1994, Dr Wong said that he had seen him again on 18 October and he had made no complaints. He had been "having rehabilitation at the amputation clinic", a course which Dr Wong recommended he continue. Dr Wong stated that he would like to see him again, but noted that he was moving to Queensland to live. He concluded with the following opinion: "His condition was stabilising. I had advised him to consider a different career path from his old one." 74 On 27 March 1995, Dr Elliott prepared a report which noted that there was "extensive scarring over the medial aspect of the stump and these scars are very tender to palpation". Dr Elliott expressed the opinion that "rehabilitation will be difficult as he is not keen on any form of office employment". 75 The question which concerned the trial judge was whether, realistically, the plaintiff had any residual earning capacity following the accident. Mr Dodd had three sources of information available to him. One was his experience of cases involving claims by amputees; a second was the information available from the medical reports referred to above; the third was the plaintiff himself. Towards the end of Mr Dodd's evidence, the trial judge asked him a number of questions which included the following (Tcpt, 06/06/05, p 470): "Q. Did you direct attention in conference to the topic of how well or badly he was coping with his artificial leg? A. Oh, it was discussed, but I can't recall the detail. I've obviously not made a note of it. He certainly raised regarding the problems of it having to be replaced. When it got wet it warped, which meant he couldn't walk [properly] and therefore it had to get replaced each time. So he had that problem that he conveyed to me. As regard the interaction between the socket and his stump, I can't recall one way or the other. Q. But would not that topic of the interaction between the stump and the artificial leg [have] been significant in terms of his future earning capacity, or his residual earning capacity, put another way? A. Not particularly, in my mind, because anyone with an artificial limb is always thinking about sit-down jobs in any event. That is, you can't say, 'Well, you have got an artificial leg, therefore you can walk around, you would be able to do a job that involves walking around', because it's always the case that people have problems with their stump and interaction with the socket. But in terms of sitting down-type jobs, or working in factories or driving a truck, depending on which foot you are using for what, then as to whether you are having one problem or the other, as far as your stump is concerned, usually doesn't make much of a difference. But we're talking about something that is, if I can put it, down the track. That is, we weren't making any firm decisions at this stage as opposed to a firm decision to get the information as to which way to go." 76 In his judgment, his Honour noted at [299]: "Although the evidence is sketchy, I incline to the view also that Mr Dodd did not enquire of the Plaintiff as to how he coped with his prosthesis and merely proceeded on the basis that it is always the case that people have problems with their stumps - in effect, that none are worse than others. The Plaintiff's situation in this regard was clearly relevant to any assessment of his residual earning capacity and accordingly Mr Dodd should have made enquiry and not simply assumed." 77 By referring to the evidence as "sketchy" his Honour was presumably identifying the fact that Mr Dodd had not been able to remember the detail of the discussion. There is no doubt that there was discussion of the problems with the plaintiff's artificial leg, at least in respect of it warping when wet. There was medical evidence that he had problems with his prosthesis, particularly in Dr Elliott's report, as set out above. His Honour noted that those reports were available to Mr Dodd at the time of the conference. After referring to them, his Honour continued at [300]: "The Plaintiff had not worked since the accident. It is these circumstances which lead me to the view that the Mr Dodd should have addressed the situation of the Plaintiff's leg insofar as it may have borne on his future earning capacity. Had he done so, I think it improbable that he could have come up with a residual earning capacity as high as he did. … Furthermore, the basis for the figures Mr Dodd used seems to have lain not in any matter relevant to the determination [as] to the Plaintiff's residual earning capacity but rather in either the income figures he was using or in assumptions about 'anyone with an artificial limb' …." 78 The inference drawn is that Mr Dodd either disregarded or underestimated the employment problems faced by the plaintiff as an amputee. However, that was not the whole of the evidence which he had given in that regard. In cross-examination by counsel for the plaintiff the following exchange had taken place (Tcpt, 06/06/05, p 459): "Q. You had Dr Wong's view here that he had a residual capacity for work; is that right? A. Yes. Q. Did you have any other medical material? A. I may have had Dr Elliott's report or it may have only been referred to in the correspondence. I can't recall one way or the other. Q. You've told us that Dr Wong thought he was fit for light duties but from 17 August 1994, do you remember that? A. I don't know how he expressed whether he just said fit for light duties or fit for retraining, I'm not sure of the expression used but it was to the effect that he had a residual earning capacity. Q. The following sentence started, "As he is only interested in outdoor work, I invited him to see a rehabilitation physician for vocational guidance." You wouldn't have suggested that he was assessed as having a residual capacity before that exercise was taken out, would you? A. Yes, I would, that he had a residual capacity. At the first conference he told me - Q. Thank you? A. - he intended to go to Queensland to buy and run a pub." 79 The matter was touched on again in the context of possible needs for future domestic care (Tcpt, 06/06/05, p 466): "Q. And you had no medical opinion as to prognosis, I take it? A. Well, the prognosis, sorry, was unfortunately abundantly clear. He had his leg amputated, and that was going to remain indefinitely. If you have got that sort of problem, then it is common to have persisting problems with the stump." 80 It was not put to Mr Dodd that his understanding of the problems faced by the plaintiff differed from the indications found in the medical material. Nor was there any finding that in fact the plaintiff's situation was materially worse than experience with other amputees might have suggested. 81 Further, it is largely a matter of speculation as to what weight Mr Dodd would have placed upon information conveyed by the plaintiff in conference as to his condition, for the purpose of assessing residual earning capacity. It is likely that any firm assessment would have required reports from a rehabilitation specialist and an expert in vocational guidance. If there had been indoor work available to the plaintiff, it would have been necessary to consider whether it was reasonable for him to reject that option. None of these matters was explored with Mr Dodd in cross-examination. 82 Having upheld the plaintiff's claims in negligence, the trial judge undertook the task of assessing the award of damages which would probably have been made, if that exercise had been undertaken in February 2000: at [353] ff. He assessed the plaintiff's potential earning capacity on the basis of a gross income of $1,030 per week and net earnings of $634 per week: at [356]. That figure was deduced from evidence given by Mrs Constable, the prospective defendant, that a crane operator would, in 1994-5 have been paid a gross weekly wage of $885 with net weekly earnings of $634. Allowing for changes in average weekly earnings over the years, his Honour concluded that the equivalent gross weekly wage in 1999-2000 was $1,030: at [327]. (On the same basis, he assessed net weekly earnings in the year at $710.69, somewhat more than the figure which he ultimately adopted at [356].) 83 He turned to the question of residual earning capacity at [358], stating: "The Plaintiff's residual earning capacity is a more difficult question. On behalf of the Defendants and Cross-Defendant it was submitted that this was substantial and not less than $350 per week. I do not agree." 84 After discussing the significant problems he faced with respect to his prosthesis, his Honour continued (at [366]): "In the Plaintiff's situation, any assessment of an earning potential is fraught with uncertainty. Certainly no finding as to a particular course of remunerative employment could be made on the balance of probabilities. Quite apart from what he can do, there is the issue of whether opportunities to use that ability will arise or can be found - a matter upon which there is little evidence. However, equally it seems to me that a finding that the Plaintiff, except as a matter of choice, will probably never earn anything is not justified. However, I am persuaded that such earning capacity as he has left is low, whatever his efforts, and unlikely to be productive of much income. He has not persuaded me that his residual capacity is less than $100 per week but I would not assess it as higher." 85 In 2004 the appellants obtained a report from a vocational psychologist, Mr Trevor Hawkins at the Vocational Capacity Centre. Mr Hawkins' conclusion was as follows: "In summary, however the current cognitive assessment has indicated that Mr Arnold has considerable potential to work and has had this potential since the time of his injury. He could have been engaging in a range of employment over that time, however he has chosen to not actively participate in the labour market. There are indeed physical, and to some extent, possible psychological repercussions from his significant accident in 1994, however on presentation it is difficult to see why he has not been able to participate in the labour market for such a protracted time. Whilst his presentation is not that of a person who has significant levels of physical and psychological disability to such an extent that they would rule him out of any participation in the labour market whatsoever, expert opinion should be sought in relation to these issues. From a purely vocational and cognitive perspective however, Mr Arnold is deemed to be significantly employable." 86 In his assessment of loss as at February 2000, the trial judge stated that he did not "accept much of what Mr Hawkins said": at [367]. His Honour's explanation of his concerns at [368] has not been challenged; however, they do not lead to the conclusion that an opinion similar to that formed by Mr Hawkins could not reasonably have been held by a barrister as a result of inquiries made in conference with the plaintiff. 87 The difficulty which faced his Honour in making such an assessment on the basis of full evidence at trial (namely that it was "fraught with uncertainty"), should have been taken into account in considering whether the barrister was negligent in expressing a view in conference, on the basis of less information, that the residual earning capacity was between $150 and $200 per week. Further, his Honour should have reassessed whether the differential between the figure at which he arrived, on the basis of significantly more evidence than was available to Mr Dodd in 1995, demonstrated that Mr Dodd's assessment was, in all the circumstances, a result of failing to take reasonable care in that assessment. 88 The next step was to calculate the differential between the figure at which his Honour arrived and the figures adopted by Mr Dodd in order to determine the significance of the variation. Using Mr Dodd's lower figure for residual earning capacity of $150 and a base net weekly income of $634, the differential is a fraction under 10% or about $40,000. In fact, as will be seen, while the higher end of Mr Dodd's range was based on net earnings of $750 per week, the trial judge worked from net weekly earnings of $634 per week. As a result, the higher range assessed by his Honour, based on a residual earning capacity of $150 per week, but including an allowance for superannuation and an amount for past economic loss, came out at almost exactly the same sum as did Mr Dodd's higher calculation of future economic loss. Once it is accepted that Mr Dodd was not responsible for the deficiency in the information available to him, these relatively minor variations in possible outcomes, which had been expressed on a tentative basis without purporting to give final advice, cannot constitute negligence on the part of the barrister. Further, the variations were not demonstrated to be material, in the sense that the plaintiff established that he would act differently had the advice varied in the sense now identified. (c) failure to address future expenses 89 The third matter with respect to which his Honour found the barrister to be negligent was a failure to make clear to the plaintiff that a successful damages claim would include "an allowance for future out-of-pocke[t] expenses which would reflect the cost of prosthesis replacement whatever that cost should be shown at the time of trial to be": at [302 (iii)]. 90 The likely future cost in respect of replacement prostheses was a matter of dispute during 1995. On 30 January 1995 the plaintiff had himself rung the Department of Veterans' Affairs to seek an estimate of future costs for prostheses. On 2 February, the Department sent him an estimate in an amount of $89,973.38. A file note prepared by Mr Honeyman on 15 March 1995 referred to a conference with the plaintiff on 13 March and a telephone call to him on 15 March. During the latter the plaintiff had pointed out that the costings were incorrect because the Department had made a calculation based on its discount rate of $2,866.85 per replacement, whereas, the plaintiff asserted, once his compensation claim was completed, the cost would revert to the general amount of about $15,000. On the basis that 24 replacements would be required, the amount was potentially $300,000. 91 Each of these figures was calculated by a simple arithmetical calculation, multiplying the number of items required by their current cost. No allowance was made for what was required to be a capitalisation of the cost of future expenses. In any event, it does not appear to have been the figures which were the subject of concern. 92 In the course of his cross-examination, the plaintiff agreed that he understood a new prosthesis could cost $9,000: Tcpt, 01/06/05, p 155. He was also asked the following questions (at p 156): "Q. You recall saying to [Mr Dodd] … that you didn't want to get a situation where you were on your own in the future but rather that this prosthesis costs $9,000 and you'll need to get it replaced. You remember saying that? A. Yes. Q. And that he said, 'Well, if you stay with the workers compensation you will get replacement prostheses until you drop dead? A. Yes." 93 The conversation was also recounted by Mr Dodd (Tcpt, 06/06/05, p 440): "A. … I told Mr Arnold further regarding medical expenses that he had been paid all those to date and they would have to go back to the workers comp insurer. And regarding future expenses he would get an allowance for those in the motor accidents claim, and once that claim came to an end then he would be on his own. Q. Did he say something in response to that? A. Yes. Q. What did he say, Mr Dodd? A. He said, 'That's no good. If my prosthesis' - I'm not sure if he used the word prosthesis - 'if my leg gets wet it warps and needs to be replaced and cost $9,000 a time.' I didn't note that, I specifically recall it. HIS HONOUR: Q. Was there anything else said in the conference that you can recall? A. I said that, yes, regarding medical expenses that if he stayed in the workers compensation system he would be entitled to have those met when they occurred until he dropped dead. WINDSOR: Q. Did he say anything further about the cost of those items? … WITNESS: Yes, I went on to say after that interchange that one option was to proceed with his motor accidents claim, to bring his rights to an end and get an allowance for any future medical expenses, and another option was to stay in the workers compensation system and get his medical expenses met from time to time as they arose." 94 In respect of the first statement set out above, his Honour considered it was misleading because it suggested that the plaintiff would not receive, as a component of damages, an allowance for past medical expenses which he would have to refund: at [281]. The statement was silent on that point, but his Honour apparently drew the inference that a reference to an allowance with respect to future expenses implied there would be none in respect of past expenses. His Honour thought it "inconceivable" that Mr Dodd would not have addressed the likely damages by reference to the various parts which would constitute an award: at [282]. His Honour continued: "Furthermore, had the Plaintiff pursued his claim, he would so obviously have been entitled to damages under the headings of future economic loss and future out-of-pocket expenses, that it is inconceivable that Mr Dodd could have consciously told the Plaintiff that the amount calculated by reference to lost income or earning capacity was 'what (he) would have got full stop' or anything along those lines.": see also at [286]. 95 In rejecting Mr Dodd's evidence as to omitting reference to an allowance for past out-of-pocket expenses, but also rejecting the plaintiff's assertion that he was told he would get nothing but lost income, his Honour accepted that Mr Dodd made reference to an allowance for future out-of-pocket expenses. On the other hand, his Honour accepted that the figures for future economic loss were what the plaintiff thought were his sole entitlements, after the November 1995 conference: at [288]. His Honour continued: "His actions or inertia thereafter are strongly suggestive of a belief that the claim was not worth pursuing. The absence of mention of any sum to cover future out-of-pocket expenses, particularly the cost of prosthetic replacements, the scant attention that topic seems to have received in the conference and the Plaintiff's obvious concern in the conference as to how those costs were to be met certainly explain how this belief could have come about. Particularly is this so when nowhere in the evidence of Mr Honeyman or Mr Dodd is there any statement to the effect that either responded to the Plaintiff's concern by saying words to the effect, not merely that there would be an allowance for future out-of-pocket expenses but one large enough to cover the reasonable costs of replacement, even if that cost was $9,000 a time. Except by general reference to an allowance for future out-of-pocket expenses, which the Plaintiff's concern at the time suggested he did not fully understand, neither Mr Dodd nor Mr Honeyman responded to that concern except by repeating the advice the Plaintiff had either not understood and/or which concerned him." 96 His Honour's conclusion appears in the following paragraph, [289], in similar terms: "Whilst the probabilities do favour the evidence of Mr Dodd and Mr Honeyman that the Plaintiff was also told that there would be an allowance in any verdict for future medicals or out-of-pocket expenses and I find this occurred, I am satisfied that they did not advise the Plaintiff that that allowance would be of sufficient size to cover the reasonable costs of replacement, whatever that cost should, at the time of advice or trial, be shown to be." 97 The actual cost was largely beside the point: the real issue, as his Honour recognised in the passage set out above, was whether the allowance would be sufficient to cover the reasonable costs of replacement, as estimated at the date of the advice or trial. However, advice given in the terms suggested might also be thought to be inadequate and potentially misleading. An important question for the plaintiff would have been the risk that future technological developments might result in improved prostheses, but at a higher price than might have been allowed for in the prospective award of damages. 98 This was an issue expressly addressed in the course of Mr Dodd's evidence. The trial judge noted a possibility that, in the course of the conference "only negatives were stressed, but there was relatively little attention given to the positives": Tcpt, 06/06/05, p 468. Mr Dodd did not agree with that proposition and summarised the situation in the following terms: "In terms of doing the economic loss figures, I did as best I could with what I got told, and did the figures and the advice was, well, if we can substantiate the $400,000 figure … it was an obvious way to go about doing a motor accidents claim. But he was otherwise still a 23-year-old man with a lifetime ahead and the medical expenses for the future became a big thing to contemplate. 99 per cent of such cases, where you have got common law rights and workers compensation rights, 99 per cent of those you do a common law claim, just without thinking. There are some like these where you have got a young man with a life-long disability and a life-long need for medical treatment. He already has significant lump sums, roughly [comparable?] to his non-economic loss component …. Yes, he gets it in an amount of $500,000. He's then off social security for a five-year period, and depending on how he uses that $500,000, depends on how he lives the rest of his life. Option B is he's already got $160,000 that he can utilise to get himself into a business or do something with. He's got his life-long entitlements to workers compensation benefits … and he's got an entitlement to future medical expenses which can include quantum leaps in medical technology, that you might not factor in today. So, eventually that's a call for the client and I've got some clients … I advise, 'Look, you'll get more money in a common law claim.' In Mr Arnold's case, he said, 'Would I get more money as at' - the answer would be yes. No doubt he'd get more money in a motor accidents claim, but you still have to do the calculation to get his instructions as to which way he wants to go. I have clients who, despite my advice, say, 'No, I want to keep the medical expense rights'." 99 This was also a matter which gave rise to difficulty in the assessment later carried out by his Honour at the hypothetical trial date in February 2000. The report from the Appliance & Limb Centre indicated that on 8 June 2000 a replacement prosthesis had been supplied at a cost of $44,742: see [372]. The sum sought by the plaintiff in respect of future prosthetic expenses was $729,572, although his Honour noted that that figure had been calculated as at 2006: see [2007] NSWSC 659 at [33]. These figures are not referred to here to indicate that no such assurance as his Honour anticipated could helpfully be given, but rather to show that an assessment needed to be made of the accuracy of any statement other than that an allowance for future prosthetic expenses would be included in an award, but that it was a matter of judgment as to whether such an allowance would be sufficient to cover the expenses actually incurred over the following 40 years. If, as his Honour found, the solicitors were negligent in failing to make the inquiry of Appliance & Limb Centre, it appears that had such an inquiry been made it would have revealed a surprising jump of almost 100% in the cost of a prosthesis from November 1994 to May 1995. Absent some clear explanation as to the cause of the increasing cost, it would not have been possible to reassure the plaintiff that any allowance he received in a damages award could reasonably be expected to cover the actual cost of each prothesis in the future. 100 The point which Mr Dodd explained in his evidence was that there was one head of damages which would clearly provide an improved result over continued receipt of compensation payments, namely an award for future economic loss. However, to be sure that the extra payment was sufficient to off-set other risks of abandoning the compensation system, it would clearly be necessary to establish with some confidence that the calculation would not be based on the actual earnings of the plaintiff at the date of the accident, but on the enhanced earnings which he anticipated being able to obtain when he received the additional qualification. That Mr Dodd was acting reasonably in treating the plaintiff's figures with a degree of scepticism was borne out by the failure to prove such comparable figures at the trial. The gross weekly figure his Honour accepted was $885, below the range proffered by the plaintiff in conference. 101 In relation to the potential damages for the cost of replacement prostheses, the critical question, as noted above, was not the dollar figure which would be allowed by the Court, but the likelihood that the amount allowed would be adequate, over the next 40 years, to cover the possible costs of replacing the prosthesis on a regular basis. Because the issue for the plaintiff was whether to remain with his entitlements under the workers' compensation scheme, or to obtain common law damages, that was the critical question to be answered with respect to future out-of-pocket expenses. The assurance which his Honour held ought to have been given by Mr Dodd in conference, was not put to Mr Dodd in cross-examination. Nor was he asked whether, if he had given such an assurance, he would have qualified it by reference to the risk that the allowance could prove inadequate, nor as to how any such qualification might have been worded. Without that material, which should in turn have been put to the plaintiff, the likely response of the plaintiff would have been a matter for speculation. 102 Putting to one side, as irrelevant for the present purpose, the actual cost which would have been allowed for future replacements of the prosthesis, there is no doubt that the plaintiff left the conference in November 1995 believing that there was a real risk that, if he obtained an award of damages, he would be better off in terms of lost income, but might not be better off once the possible costs in relation to his prosthesis were taken into account. There was no evidence called at trial to demonstrate that he has been materially disadvantaged by taking that view, let alone that it was unreasonable for the barrister to leave him in that frame of mind. Accordingly, the finding of negligence in that respect against the barrister was in error. (d) liability of barrister - conclusion 103 Assuming that, contrary to the conclusion reached above, the solicitors were liable in breach of contract or tort for their failure to obtain sufficient information to permit definitive advice to be given in November or December 1995, a separate question would remain with respect to the liability of the barrister, Mr Dodd. As the trial judge said at [297]: "It is clear that Mr Dodd regarded the information available to him as inadequate on which to base any final or comprehensive advice. There was nothing unreasonable so far as Mr Dodd was concerned in taking that view. He was not responsible for the absence of the information he regarded as necessary." 104 His Honour's finding as to the liability of Mr Dodd was not dependent on a failure to give definitive advice, but a failure to discuss the three matters referred to above. For reasons already given, first the failure to refer to an increase in the amount for future economic loss on account of superannuation, given the level of uncertainty as to the actual figures, was neither negligent nor material in the context; secondly, the failure to make inquires of the plaintiff, so as better to assess his residual earning capacity, did not demonstrate negligence and, in any event, would not have led to a materially different calculation from that undertaken by his Honour; thirdly, absent further information, it was not appropriate for Mr Dodd to advise that an allowance for future out-of-pocket expenses would be sufficient. That he gave some advice was accepted by his Honour. Accordingly, there was no negligence on the part of the barrister. Other issues 105 Both the solicitors and the barrister, in addition to challenging the findings as to liability, challenged findings with respect to apportionment and to the assessment of loss. In circumstances where the Court is satisfied that the plaintiff did not establish liability, it is not appropriate to consider questions of apportionment on the basis of hypothetical liabilities. It is unnecessary to deal with the challenge with respect to the assessment of damages. Orders 106 The appropriate orders are as follows:

HANCOCK v ARNOLD; DODD v ARNOLD

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