The plaintiff commenced proceedings with the filing of a statement of claim on 24 June 2022. The plaintiff is a lawyer.The defendant is a firm of solicitors. The defendant was retained by the plaintiff to pursue a breach of employment claim against a former employer of the plaintiff (Kott Gunning Lawyers).
Hastwell v Harmers Workplace Lawyers [2023] NSWSC 654 | Case summary | Zoe
The plaintiff and defendant signed a costs agreement on 27 November 2014. The current proceedings allege that the defendant breached this agreement and was also negligent in pursuing the plaintiff's claim against the former employer. Allegations of breach of statutory duty, breach of fiduciary duty and assertions of victimisation and obstruction are also made. Ultimately, the plaintiff seeks declarations and damages from the defendant.
The defendant filed a Defence on 1 August 2022 admitting the retainer but denying the allegations of breach in negligence. Contributory negligence is alleged and apportionment under the Civil Liability Act 2002 (the CLA) is sought.
On 22 November 2022 Campbell J dismissed a notice of motion that had been filed by the plaintiff (on 4 November 2022) seeking a referral for pro-bono legal assistance (Hastwell v Harmers Workplace Lawyers [2022] NSWSC 1620). I note this motion was dealt with together with a motion in separate proceedings against a Dr Parmegiani.
On 13 December 2022 the Registrar made directions concerning evidence and any further motion by the plaintiff to amend his statement of claim. These orders were extended on 24 February 2023.
There are two notices of motion before me. The first was filed by the defendant on 6 October 2022. It seeks orders effectively amounting to the striking out of the statement of claim.
The second was filed by the plaintiff on 17 March 2023. The motion seeks leave to file an amended statement of claim. A draft pleading is annexed to the motion.
The following affidavits have been filed:
1. An affidavit of the plaintiff sworn on 15 March 2023.
2. An affidavit of Ms Julia Hewitt dated 6 October 2022 (on behalf of the defendant).
The filing of the notice of motion by the plaintiff on 17 March 2023 is an implicit acknowledgement that the original statement of claim is deficient. The defendant says the proposed pleading is also deficient. The plaintiff says it is not.
The question before me is whether I should allow the proposed amended statement of claim to be filed or whether I should give the plaintiff another chance to correct his pleadings.
The proposed statement of claim follows this pattern:
1. It begins with a description of the parties and the relationship between them. It says that the defendant owed a fiduciary duty of care to the plaintiff and also a duty arising from the solicitor/client relationship. In addition reference is made to a Costs Agreement which is said to give rise to specific and implied obligations resting on the defendant.
2. Then from [11] the pleading lists the duties said to arise from the relationship between the parties. Reference is also made to s 5B of the CLA, presumably to indicate that this section applies to the establishment of a breach of duty of care.
3. Paragraphs 14 and 15 list the alleged breaches of duty including particulars of the asserted failure to "give proper and correct advice".
4. Paragraph 17 asserts the defendant has acted in breach of s 5O of the CLA.
5. Paragraphs 18 and 19 list the measures that a reasonable person or lawyer would have taken.
6. Paragraph 20 says that the plaintiff has suffered loss and damage as a result of the breach of duty by the defendant. Particulars of the loss and damage are then given. They include a wide range of consequences said to flow from the breaches of duty.
7. Paragraphs 21 and 22 are essentially formulaic, presumably intended to 'tick boxes' on the way to recovering damages.
8. The balance of the pleading seeks damages under the Competition and Consumer Act 2010 (Cth), sch 2 Australian Consumer Law s 60. The particulars are essentially a repeat of those already given.
The relevant principles for liability of a solicitor to a client are set out in Badenach v Calvert [2016] HCA 18; 257 CLR 440 at [57]:
"Subject to statutory or contractual exclusion, modification or expansion, the duty of care which a solicitor owes to a client is a comprehensive duty which arises in contract by force of the retainer and in tort by virtue of entering into the performance of the retainer. The duty is to exercise that degree of care and skill to be expected of a member of the profession having expertise appropriate to the undertaking of the function specified in the retainer. Performance of that duty might well require the solicitor not only to undertake the precise function specified in the retainer but to provide the client with advice on appurtenant legal risks. Whether or not performance of that duty might require the solicitor to take some further action for the protection of the client's interests beyond the function specified in the retainer is a question on which differences of view have emerged. That question was not addressed in argument, and need not be determined in this appeal (Citations omitted)."
The CLA provides a degree of statutory "modification or expansion", in particular, relevant to this case, through s 5B. One of the defendant's complaints is that the proposed pleading ignores the requirements of this section.
For example it is said that there is "no articulation of any relevant risk(s) of harm, as behoved by s 5B of the CLA, so as to tie any act or omission to loss or damage said to have been suffered".
Section 5B states:
(1) A person is not negligent in failing to take precautions against a risk of harm unless -
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things) -
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
The plaintiff's response to the criticisms of the defendant are that they are "hyperbolic", demand a "perfect" pleading and overall reflect a "nonsensical, unjust unwarranted and costly approach".
The exchange of pleasantries emanating from the opposing written submissions are probably an exaggeration of the respective merits and failings of the proposed pleading.
In Dare v Pulham (1982) 148 CLR 658, at [6], the High Court said:
"Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) (1916) 22 CLR 490, at p 517 ; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v. Cameron (1936) 54 CLR 572, at pp 576-577 ; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court."
In State Government Insurance Commission v Sharpe (1996) 126 FLR 341, 344, Millhouse J in the Full Court of the Supreme Court of South Australia, said:
"Pleadings in an action are to define the issues between the parties. Sometimes …the pleadings may not do so at all or only imperfectly. As a rule…depending on the course of the hearing, that may not matter because the issues become quite plain as the hearing proceeds and no party is put at a disadvantage…The day has well passed when decisions are based on the state of the pleadings, irrespective of the facts or justice."
The new pleading is far from perfect, but it is a lot better than the original and it does tell the defendant the nature, detail and extent of the case asserted against the defendant. The background facts are set out, the relationship between the parties is described, the obligations arising from the relationship are articulated, the asserted breaches of the relevant duties are stipulated, and the losses alleged to consequently arise are listed.
The proposed pleading will enable the defendant, perhaps with the benefit of some answers to a request for further and better particulars, to respond to the allegations.
I think it would be a waste of time and costs to require the plaintiff to try and achieve the precision seemingly demanded by the defendant.
Notwithstanding the above conclusion, there are some specific matters I would like to address separately:
1. A limitation argument.
2. Provision of detail.
3. Particulars of the risk of harm.
4. Section 5O of the CLA.
The limitation arguments arise in respect of the apparent claims for personal injury. The particulars of loss and damage in [20] of the new pleading assert "Exacerbation and aggravation of anxiety and depression".
The applicable limitation period for a personal injury claim is three years after the cause of action was "discoverable" (Division 6 of the Limitation Act 1969). The 12 year 'long stop' provision is not relevant here.
The defendant says the cause of action was discoverable by 29 March 2017 when the plaintiff wrote to the Office of the Legal Services Commissioner complaining about a delay on the part of the defendant, stating:
"That delay has significantly prolonged the life of this claim not to mention it has prolonged the discrimination and harassment, which has added to my stress and anxiety."
Assuming the stress and anxiety referred to in the letter is the same condition as that referred to in the statement of claim, then, submitted the defendant, the cause of action was discoverable by March 2017 and has since expired.
The plaintiff responded that the claim was not for personal injury. Rather it was a claim in the nature of that discussed by the High Court in Moore v Scenic Tours [2020] HCA 17; (2020) 268 CLR 326 (Moore). The defendant submitted that, to the contrary, the claim for damages for "disappointment and distress" referred to in Moore was a product of the type of contract involved in that case.
"Disappointment at a breach of a promise to provide recreation, relaxation and peace of mind is not an "impairment" of the mind or a "deterioration" or "injurious lessening or weakening" of the mind34. Frustration and indignation as a reaction to a breach of contract under which the promisor undertook for reward to provide a pleasurable and relaxing holiday is, of itself, a normal, rational reaction of an unimpaired mind. In this regard, Mr Moore's claim for damages for his disappointment and distress resulting from Scenic's breach of contract can be seen as no more a claim relating to personal injury than would be a claim for damages for the indignation occasioned by false imprisonment or defamation." (at [41])
In my view the damages claimed by this plaintiff are of a different nature to those claimed in Moore. This is highlighted by the claim for "depression". This is a recognisable psychiatric injury. I think it amounts to a claim for personal injury. However, the claim for depression also creates an escape for the plaintiff's pleading. The letter to the Legal Services Commissioner refers only to stress and anxiety. If there is a claim for the distinct mental state of depression, then the letter provides no clue as to the date of discoverability. Accordingly, I think the defendant's limitation point can be taken no further than the assertion of anxiety. My orders will include the deletion of the claim for anxiety only.
The defendant submitted that some of the paragraphs in the proposed pleading were simple assertions, giving no clue as to their background or foundation. This was evident, submitted the defendant, in paragraphs 15, 18 and 19. There is no doubt that the plaintiff has made something of an ambit claim. However, each assertion will need to be proved. As I have already said, I think it would be counter-productive to require a global re-pleading. I think the defendant should be entitled to seek further and better particulars of the assertions and that those particulars should be answered comprehensively, not for example by a glib "That is a matter for evidence". My orders will make allowance for any request by the defendant for further and better particulars.
Paragraph 16 of the proposed pleading purports to give particulars of the risk of harm said to have been foreseeable by the defendant. The defendant says the particulars are not risks of harm and, in any event, should have been pleaded at the beginning of the document to mirror the structure of s 5B of the CLA. The defendant is correct on both counts, although the placing of the paragraph is of much lesser significance.
I do not think the particulars in [16] describe a risk of harm. They are much more akin to allegations of breaches of duty. I think proper particulars should be given. While it would be better if the paragraph was in a different place, I will not make an order to that effect.
Turning to s 5O of the CLA, the allegation of breach in [17] of the proposed pleading is misconceived. Section 5O is a defensive measure rather than a required step to proving negligence. The onus will be on the defendant to establish its applicability. The allegation should be removed from the statement of claim.
In relation to costs the defendant has succeeded in having the original statement of claim struck out and has had success, if not totally, with the proposed pleading. I think the plaintiff should pay the defendant's costs of both notices of motion with one proviso. I do not think it fair and just for the defendant to claim the costs of preparing the earlier Defence, an action which it took prior to filing its motion to strike out the original statement of claim.
I was informed that there had been certain offers made which could affect my decision on costs. Accordingly, I informed the parties that I would hear them on costs after providing these reasons.
I make the following orders:
1. The plaintiff has leave to file an amended statement of claim in the form provided to the Court on 14 June 2023, except that:
1. The plaintiff is to remove any claim for anxiety, as distinct from depression.
2. The plaintiff is to remove any assertion of a breach of s 5O of the Civil Liability Act 2002 (NSW).
3. The plaintiff is to re-draft subparagraphs (a) to (f) of paragraph 16 of the proposed pleading so as to provide appropriate particulars of the risk of harm.
4. In re-drafting the particulars referred to in (c), the plaintiff has leave to insert the paragraph at a different place in the amended pleading.
1. The plaintiff is to file the amended statement of claim within 7 days of these orders.
2. The defendant is to make any request for further and better particulars within 28 days of these orders.
3. The plaintiff is to respond to the request within 28 days of receipt of the request.
4. The defendant is to file a defence within 28 days of receipt of further and better particulars from the plaintiff.
5. Both parties have leave to restore the matter in respect of the adequacy of the particulars provided by the plaintiff on 48 hours' notice.
6. Subject to further order, the plaintiff is to pay the defendant's costs of both Notices of Motion except that those costs are not to include any costs associated with the preparation of the Defence filed on 1 August 2022.
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Decision last updated: 15 June 2023