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[2017] HCA 13
appellant. Appeal allowed in relation to the second respondent; orders of the Court of Appeal and District Court set aside insofar as they concern the second respondent; second respondent's notice of motion...
The High Court decided that a barrister and solicitor can be sued for negligently advising a client to turn down a reasonable settlement offer, even though the case then went to trial and the client received less money. The immunity that protects lawyers from being sued for things done in court does not cover this kind of out-of-court advice because it does not change how the judge actually decides the case. The Court followed its recent decision in Attwells and refused to widen the immunity or revisit that ruling.
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2,708 words · generated 24/04/2026
David Kendirjian was injured in a motor vehicle accident in November 1999. In 2004 he commenced proceedings in the District Court of New South Wales against the driver, Ms Ayoub. Liability was admitted, so the August 2006 trial was concerned solely with the assessment of damages. On the first day of the trial Ms Ayoub's representatives made a settlement offer of $600,000 plus costs. The offer was conveyed to Mr Kendirjian by his solicitor, Eugene Lepore, and his barrister, Mr Conomos (the second respondent). According to Mr Kendirjian's later pleading, he was not told the amount of the offer; he was simply told that an offer had been made. The barrister is said to have advised that the offer was "too low" and to have rejected it without Mr Kendirjian's express instructions. The trial continued and the primary judge awarded Mr Kendirjian $308,432.75 plus costs. On a later appeal it was accepted that an additional $10,000 should have been allowed for future domestic assistance, but the Court of Appeal otherwise dismissed Mr Kendirjian's appeal, noting that his credibility had been at the heart of the case and that the trial judge had relied heavily on video surveillance footage showing exaggeration of his disabilities.
1 cited instrument linked from this judgment.
In October 2012 Mr Kendirjian commenced separate proceedings in the District Court against his former solicitor and barrister. The central allegations were that they had been negligent in failing to advise him of the quantum of the offer, in rejecting it without his express authority, and in failing to advise him that the court might award less than the "lower range" of $415,984. He quantified his loss as the difference between the $600,000 offer and the judgment sum (approximately $312,567.25 plus interest). The respondents filed a defence in which Mr Conomos asserted that Mr Kendirjian had been told the amount of the offer, had instructed its rejection, and had counter-offered $1.2 million against advice to counter at $800,000 inclusive of costs.
The respondents moved for summary judgment on the basis that advocates' immunity from suit provided a complete defence. District Court Judge Taylor SC granted the motion. That decision was upheld by the New South Wales Court of Appeal (Macfarlan JA, Leeming JA and Bergin CJ in Eq) which applied its earlier decision in Donnellan v Woodland [2012] NSWCA 433. Special leave to appeal was granted to the High Court. After the grant of special leave the Court delivered judgment in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572. The first respondent (the solicitor) consented to orders allowing the appeal against him. The second respondent (the barrister) argued that Attwells could be distinguished or, in the alternative, that the relevant part of Attwells should be reopened. The High Court unanimously allowed the appeal against the second respondent as well, set aside the orders below, dismissed the notice of motion, ordered costs against the second respondent at all levels, and remitted the balance of the matter to the District Court.
The joint judgment of the majority in Attwells had already decided that advocates' immunity does not extend to negligent advice that leads to a compromise of proceedings by agreement. Edelman J (with whom Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ agreed on the result) held that the same reasoning applied to advice not to accept an offer. The immunity exists because of the advocate's participation as an officer of the court in the quelling of controversies by the exercise of judicial power. Advice that leads only to the continuation of litigation does not engage that rationale; it has no functional connection with the court's determination.
Edelman J emphasised that the test articulated by Mason CJ in Giannarelli v Wraith (1988) 165 CLR 543, and approved in D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 and Attwells, requires that out-of-court work "lead to a decision affecting the conduct of the case in court" or be "intimately connected" with such work. The connection must be functional, not merely historical. Rejecting a settlement offer and continuing to trial produces only the latter. The assessment of whether the advice was negligent is performed as at the date it was given, without any necessity to impugn the correctness of the trial judge's later findings on credibility or quantum. Mr Kendirjian relied on the District Court judgment to quantify his loss; the respondents did not plead any defence that required re-litigation of those findings. A separate credibility contest about what Mr Kendirjian had told his lawyers would be independent of the earlier credibility findings.
Nettle J, while agreeing in the result, expressed the view that a negligence action of this kind could still give rise to a possibility of challenge to the District Court findings, for example by arguing that the trial judge's credit assessment or parsimonious damages award could not reasonably have been anticipated. Gordon J agreed with Nettle J's additional observations and noted that the central allegation appeared to be that counsel had acted without instructions. That raised an unresolved question left open in Attwells: whether immunity attaches only to decisions a lawyer may make without client instructions. However, because the Court was not asked to set aside the judgment and because the point had not been fully argued, no concluded view was expressed. The majority reasoning in Attwells was nevertheless decisive.
The Court rejected the attempt to distinguish Attwells on the basis that the present facts might involve departure from the earlier judicial findings. It also refused to reopen Attwells, describing the suggested distinction between different limbs of Mason CJ's formulation as illusory. A decision affecting the way a case is conducted at hearing is the very means by which an advocate affects the conduct of the case in court.
Before Attwells and Kendirjian the law was unsettled at the margins. Giannarelli had established that immunity extended to work out of court that was intimately connected with the conduct of the case in court. D'Orta reaffirmed that test and emphasised the policy interests in finality and the avoidance of collateral attack on judicial determinations. The New South Wales Court of Appeal in Donnellan v Woodland had applied that reasoning to advice about offers of compromise, holding that the decision to continue the case engaged the immunity because it affected the conduct of the case in court. Both the District Court and the Court of Appeal in the present matter felt bound to follow Donnellan.
Attwells narrowed the immunity. It made clear that advice leading to a compromise by agreement between the parties does not attract immunity because there is no exercise of judicial power to be collaterally attacked. The joint judgment observed that, by the same reasoning, it was difficult to see how immunity could extend to advice not to settle. Kendirjian confirms that observation as ratio. The immunity is now confined to work that bears a functional connection to the judicial determination itself. Advice about settlement, whether to accept or reject, will generally fall outside that boundary unless it somehow alters the way the case is presented to the court in a manner that affects the judge's decision.
After Kendirjian it is clearer that a client who claims to have received negligent advice to reject an offer can sue the lawyer in negligence and use the difference between the offer and the judgment sum as the measure of loss without the action being struck out on immunity grounds. The Court has signalled that the policy of finality is not engaged merely because a judicial decision follows the advice. However, the additional observations of Nettle and Gordon JJ leave open the possibility that in some cases a court may still need to consider whether the original judgment could be set aside for want of authority before reaching the negligence question. The precise metes and bounds of that exception remain for future decision.
Edelman J set out the governing test at what would be paragraph [32] in the authorised report:
"the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court. But to take the immunity any further would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity."
Plain-English translation: Work done before the trial gets immunity only if it actually changes how the trial is run in front of the judge. If the work just leads to the case continuing, the lawyer does not get special protection.
Later, at the passage corresponding to paragraph [40]:
"the immunity attaches by the 'participation of the advocate as an officer of the court in the quelling of controversies by the exercise of judicial power' … Advice leading to a compromise of a dispute cannot lead to the possibility of collateral attack upon a non-existent exercise of judicial power to quell disputes."
Plain-English translation: The whole point of the immunity is to protect the lawyer's role in helping the judge decide the case. If the parties settle privately there is no judge deciding anything, so there is nothing to protect. The same logic applies when the advice is to keep fighting rather than settle.
On the absence of any collateral attack, Edelman J stated (corresponding to paragraph [45]):
"From Mr Kendirjian's perspective, he relies on the decision of the District Court in order to prove his alleged loss. From the perspective of the second respondent, issues concerning the reasonableness of advice given will be assessed at the time the advice was given, not at the time of the District Court judgment. The assessment of reasonableness will not involve any consideration of whether the decision of the District Court, affirmed by the Court of Appeal, was right or wrong whether in relation to credibility or otherwise."
Plain-English translation: The client is using the judgment to show how much money he lost. The lawyer's defence is judged by what a reasonable lawyer would have said at the time of the offer, not by criticising the judge's later decision. No one is asking the court to say the original judge was wrong.
On the application to reopen Attwells, Edelman J concluded (corresponding to paragraph [52]):
"In relation to work done out of court, there is no real distinction between work done which leads to a decision affecting the conduct of the case in court and work done affecting the way that case is to be conducted at a hearing. A decision affecting the way that a case is conducted is the principal method, or perhaps the only method, by which an advocate affects the conduct of a case in court."
Plain-English translation: The two ways of describing the test mean the same thing. Deciding how to run the case at the hearing is exactly how a barrister influences what happens in court. There is no gap that would let the immunity stretch further.
Kendirjian will be triggered whenever a client sues a lawyer for negligent advice to reject a settlement offer (or for failing to communicate the amount of an offer) and the case then proceeds to a less favourable judgment. The critical elements are: (1) the advice relates to a settlement offer made during litigation; (2) the advice is alleged to have caused the client to continue to trial; (3) the client claims the difference between the offer and the judgment as loss; and (4) the lawyer seeks to invoke advocates' immunity.
The precedent does not apply where the alleged negligence occurs in the actual conduct of the hearing, in the preparation of pleadings or evidence that directly shapes the case presented to the court, or in advice that leads the court to make specific orders or findings in a way that alters the judicial determination. It also does not disturb immunity for work that is intimately connected with the presentation of the case, such as the drafting of affidavits or cross-examination strategy that affects the evidence before the court.
The decision leaves open the situation where the lawyer is alleged to have acted without any instructions at all. In such cases a court may first have to decide whether the original judgment can be set aside before considering immunity. Fact patterns involving an implied contract claim for breach of warranty of authority rather than a pure tort claim for negligence are also not resolved.
Although Kendirjian is a relatively recent decision, its reasoning has been treated as settling the boundary of advocates' immunity in respect of settlement advice. Intermediate appellate courts have applied it to strike out immunity defences in similar negligent-advice claims. Trial judges have cited the "functional connection" language when refusing summary judgment in cases where the only link between the lawyer's advice and the client's loss is the continuation of the proceeding to an adverse judgment.
Later courts have also noted the unresolved issues flagged by Nettle and Gordon JJ. In cases where a client alleges that counsel settled or rejected an offer without authority, some judges have required the parties to address first whether the original judgment is susceptible to being set aside before reaching the immunity question. The distinction between a tort claim for negligent advice and a contractual claim for acting without authority has been left for future argument, but Kendirjian is cited as confirming that the immunity does not automatically bar the former.
No court has accepted an invitation to reopen Attwells or Kendirjian. The High Court's emphatic refusal to draw artificial distinctions between the formulations in Giannarelli has been followed. The decision is now routinely paired with Attwells as the definitive modern statement that settlement-related advice falls outside the immunity.
Several questions remain live after Kendirjian. First, the exact scope of the exception for decisions that can be made only with client instructions is undecided. The majority in Attwells expressly left open whether immunity attaches only to those kinds of decisions. Gordon J noted that where counsel is said to have acted without authority it may be necessary to explore setting aside the judgment before considering immunity. That procedural sequencing question will require resolution in an appropriate case.
Second, the boundary between advice that has a merely historical connection with the litigation and advice that functionally affects the conduct of the case remains fact-sensitive. Advice about the amount of an offer might, in some circumstances, influence the content of opening or closing submissions or the decision to call particular evidence. Whether such indirect effects engage the immunity is not foreclosed.
Third, the interaction between a negligence claim and a possible contractual claim for breach of an implied warranty of authority or breach of the retainer has not been determined. It is unclear whether a client could plead the same facts in contract to avoid any residual immunity argument.
Fourth, the measure of damages in these cases may raise difficult questions of causation and foreseeability. If the client must prove that he would have accepted the offer had he been properly advised, and that the offer would have been accepted by the other side, courts will have to decide how to assess that counterfactual without sliding into a collateral challenge to the original findings.
Finally, the position in respect of statutory causes of action, such as claims under the Australian Consumer Law for misleading conduct in the giving of settlement advice, was not addressed. Whether the common-law immunity can bar such statutory claims remains for another day.
These open questions mean that while Kendirjian has significantly narrowed the practical operation of advocates' immunity in settlement contexts, careful drafting of pleadings and strategic sequencing of issues will continue to occupy practitioners in this area. Most practitioners do not realise that the immunity is now so tightly confined that many routine "should we settle?" conversations can now ground a viable negligence action if the outcome at trial is worse. The policy balance has shifted decisively toward allowing clients a remedy, but the unresolved procedural and contractual overlays mean that the last word on advocates' immunity has not yet been spoken.
KIEFEL CJ BELL, GAGELER, KEANE, NETTLE, GORDON AND EDELMAN JJ
Kendirjian v Lepore [2017] HCA 13 29 March 2017 S170/2016
Appeal allowed from the Supreme Court of New South Wales Court of Appeal's decision in relation to the second respondent.
Set aside the orders of the Supreme Court of New South Wales Court of Appeal made on 21 May 2015 and 1 June 2015 insofar as they apply to the second respondent and, in lieu thereof, order that the appeal against the second respondent to the Supreme Court of New South Wales Court of Appeal be allowed and the orders made by District Court Judge Taylor SC on 16 May 2014 insofar as they relate to the second respondent be set aside and in lieu thereof order that the Notice of Motion filed by the second respondent on 31 July 2013 in the District Court of New South Wales be dismissed.
The second respondent pay the appellant's costs of and incidental to the second respondent's Notice of Motion filed in the District Court of New South Wales on 31 July 2013.
The second respondent pay the appellant's costs of and incidental to the application for leave to appeal and the appeal to the Supreme Court of New South Wales Court of Appeal below against the judgment and orders made by District Court Judge Taylor SC in favour of the second respondent.
The second respondent pay the appellant's costs of and incidental to the application for special leave to appeal and the appeal to the High Court of Australia against the judgment and orders made by the Supreme Court of New South Wales Court of Appeal on 21 May 2015 and 1 June 2015 in favour of the second respondent.
Remit the balance of the matter to the District Court of New South Wales.
On appeal from the Supreme Court of New South Wales
B W Walker SC with D M C Aquilina for the appellant (instructed by Longton Legal)
J V Agius SC with A M Hawkins for the second respondent (instructed by Carneys Lawyers)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Legal practitioners - Negligence - Advocates' immunity from suit - Where settlement offer made and rejected on first day of trial - Where rejection of settlement offer followed by judicial decision - Where damages awarded lower than settlement offer - Where solicitor and barrister alleged to have given negligent advice in relation to settlement offer - Whether advice affected conduct of case in court by bearing upon court's determination of case - Whether advocate immune from suit.
High Court - Stare decisis - Whether Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572; 331 ALR 1; [2016] HCA 16 should be reopened.
Words and phrases - "advocates' immunity", "affecting the conduct of the case", "finality", "functional connection", "intimately connected", "judicial determination", "possibility of challenge to findings".
NETTLE J. I agree with Edelman J that, in light of the majority's reasoning in Attwells v Jackson Lalic Lawyers Pty Ltd, this appeal must be allowed. With all respect, however, I do not agree that Mr Kendirjian's negligence action against the respondents does not give rise to a possibility of a challenge to the findings of the District Court. Where an advocate's advice to a plaintiff to reject an offer of settlement of the plaintiff's claim results in the claim proceeding to a judgment which is less favourable than the offer, a later claim by the plaintiff that the advocate was negligent in so advising will call into question whether the advocate had a reasonable basis to advise rejection of the offer. I remain of the view I expressed in Attwells that, where that occurs, it is likely to result in the re‑litigation of issues that were determined at trial, including the strength of the plaintiff's claim; the weight to be given to evidence, taking into account considerations of credibility and reliability of witnesses; and the correct application of legal principle and authority. I accept of course, as Edelman J observes, that the assessment of whether the advocate's advice was negligent is to be undertaken as at the time the advice was given and not at the time of the unfavourable judgment. But in the scheme of things, it is not improbable that one or other side might attempt to demonstrate the way things were, or should have appeared, when the advice was given by reference to the way things were during and at the conclusion of the trial. For example, an advocate faced with such a negligence claim might contend that the trial judge's assessment of the plaintiff's credit and reliability was so unlikely or unwarranted that it could not reasonably have been anticipated at the time of advice, or that the trial judge's assessment of damages was so remarkably parsimonious by reference to current practice that it could not reasonably have been foreseen. Equally, a plaintiff might contend that the trial judge's assessment of the issues in the case was so predictable that the advocate's failure to anticipate it was negligent. Such examples can be multiplied. Of course, as between Mr Kendirjian and the defendant to the District Court proceedings, issues of that type have now been conclusively determined by the Court of Appeal's dismissal of Mr Kendirjian's appeal from the judgment of the District Court. But such issues have not yet been determined conclusively as between Mr Kendirjian and the respondents. And although, as the pleadings stand in this matter, it is not clear that either of the respondents is advancing a defence of the kind alluded to above, the negligence claim has not yet proceeded very far and the possibility of further amendments to the pleadings cannot be excluded. This view notwithstanding, in light of the majority's reasoning in Attwells I agree with the orders proposed by Edelman J.
GORDON J. I agree with Edelman J that, in accordance with the reasoning of the majority in Attwells v Jackson Lalic Lawyers Pty Ltd, this appeal must be allowed. I also agree with the additional reasons of Nettle J. Those reasons are consistent with the view I expressed in Attwells. In Attwells, the majority said that it was "not necessary to determine whether the [advocate's] immunity attaches only to the kinds of decision which a lawyer charged with the conduct of a case in court may make without instructions from the client" (emphasis added). The central allegation in this appeal is that the lawyers charged with the conduct of Mr Kendirjian's case in earlier personal injury proceedings made a decision (to reject an offer of settlement) that could not be made without instructions from the client. Where a court has been asked to make an order to carry a compromise into effect, the court may refuse to give effect to the compromise, and may set aside an order already made, where counsel has acted contrary to instructions, at least before the order has been perfected. Accordingly, in some, perhaps many, cases where it is alleged that a lawyer has acted without instructions, it will be necessary to first explore whether the result of which the client complains can be, or could have been, set aside before considering issues about immunity from suit. Here, according to Mr Kendirjian, the matter went to judgment because, among other things, counsel rejected a settlement offer as being "too low" without his express instructions. It was not submitted in this Court that the judgment ultimately entered could have been set aside on account of the alleged conduct of counsel for Mr Kendirjian. Counsel purported to act as the agent of Mr Kendirjian in rejecting the offer. Just as an agent gives an implied warranty of authority to the third party with whom they deal, it is arguable that there will be an implied contract that makes an agent liable to their principal for exceeding their actual authority. On that hypothesis, liability for an agent's breach of a duty to act only as authorised and without exceeding authority would arise under that implied contract. And both the nature and extent of the duty, and the resulting breach, would fall to be considered and determined by reference to the law of contract. The central allegation would be that the agent acted without authority, not that the agent was negligent in the exercise of their authority. That is not to say anything about whether such a case might also support a claim sounding in tort, based on a breach of some differently formulated duty. Because, as this Court now holds, there is no immunity from suit in this case, and there has yet to be a trial of Mr Kendirjian's claim against his lawyers, these are matters about which no concluded view can or should be expressed. And how the point expressly left open by the majority in Attwells should be determined is not decided in this appeal.
EDELMAN J. This appeal concerns the scope of advocates' immunity from suit. The appellant, Mr Kendirjian, brought a claim against his solicitor (Mr Lepore, the first respondent) and barrister (Mr Conomos, the second respondent). Mr Kendirjian alleged that the respondents were negligent in advising him in relation to an offer for settlement in a proceeding in which they represented him. Mr Kendirjian's allegations included that the respondents advised him that a settlement offer had been made but that they did not advise him of the amount of the offer, and that they rejected the offer as being "too low" without his express instructions. The primary judge granted summary judgment on the basis that the respondents were immune from the alleged liability for negligence. That decision was upheld by the Court of Appeal of the Supreme Court of New South Wales. Subsequent to the decisions of the primary judge and the Court of Appeal, this Court decided Attwells v Jackson Lalic Lawyers Pty Ltd. In Attwells, a majority of this Court held that the advocates' immunity from suit did not extend to negligent advice which leads to a compromise of litigation by agreement between the parties. As the majority joint judgment explained, by the same reasoning it is difficult to envisage how the immunity could ever extend to advice not to settle a case. Following the decision in Attwells, the first respondent in this matter consented to orders in this Court including allowing the appeal insofar as it related to him. However, the second respondent submitted that the reasoning in Attwells could be distinguished or, alternatively, that part of the decision should be reopened. The reasoning of the majority in Attwells cannot be distinguished in this case. Attwells should not be reopened. The appeal in respect of the second respondent must also be allowed. The personal injury proceedings and appeal In November 1999, Mr Kendirjian was injured in a car accident with a car driven by Ms Ayoub. In 2004, he commenced legal proceedings against Ms Ayoub in the District Court of New South Wales. Ms Ayoub admitted liability so the trial concerned only the assessment of damages. On the first day of the District Court trial, in August 2006, Ms Ayoub's legal representatives made an offer of settlement to the respondents, offering Mr Kendirjian $600,000 plus costs. This offer was not accepted so the trial proceeded. Ultimately, Mr Kendirjian obtained judgment for $308,432.75 plus costs, although on appeal it was common ground that the proper quantum was $10,000 more, when an omission of damage for future domestic help for heavier household tasks was included. An appeal to the Court of Appeal was dismissed with costs. In the Court of Appeal, McColl JA (with whom Beazley JA agreed) observed that Mr Kendirjian's credibility had been at the heart of the issues to be determined at trial. The primary judge had relied substantially upon video recordings of Mr Kendirjian in the years after the accident to conclude that Mr Kendirjian had exaggerated or misstated the extent of his medical condition. The negligence proceedings against the respondents In October 2012, Mr Kendirjian commenced proceedings against the respondents in the District Court. His allegations included numerous particulars of negligence in the advice given to him by the respondents. Central to his claim were allegations that the respondents did not advise him of the amount of the settlement offer, "but merely of the fact that an offer had been made". Mr Kendirjian also pleaded that the respondents rejected the offer "absent any express instructions" from him but "based upon the advice of the [second respondent] that the offer ... was 'too low'". Mr Kendirjian alleged that he first discovered the amount of the offer from the solicitor for Ms Ayoub in January 2009. The second respondent's pleaded defence included the plea that either he or the first respondent, or both of them, informed Mr Kendirjian of the settlement offer but that Mr Kendirjian provided instructions to reject the offer and to make a counter-offer of $1.2 million. The second respondent also pleaded that Mr Kendirjian's instructions for the counter-offer were contrary to his advice to make a counter-offer of $800,000 inclusive of costs. In Mr Kendirjian's claim against the respondents, he sought damages of $312,567.25 plus interest and costs. This was said to have been calculated by subtracting the amount recovered after the personal injury trial from the settlement offer of $600,000 plus costs. Mr Kendirjian's claim against the respondents therefore relied upon the amount awarded by the District Court in the personal injury proceedings in order to quantify the loss that he allegedly suffered. Other particulars of Mr Kendirjian's claim also appeared to rely on the District Court judgment, such as his allegations against each respondent of a failure to advise that the District Court could award damages in an amount lower than the "lower range of $415,984". The decisions of the District Court and Court of Appeal The respondents successfully brought an application in the District Court for summary judgment. The District Court held that the respondents were immune from liability in negligence. This conclusion was upheld by the Court of Appeal. Both the District Court and the Court of Appeal relied upon seriously considered obiter dicta in the earlier decision of the New South Wales Court of Appeal in Donnellan v Woodland. In the Court of Appeal in this case, Macfarlan JA (with whom Leeming JA and Bergin CJ in Eq agreed) held that the decision in Donnellan extended to the circumstances of this case, and that the decision in Donnellan was not plainly wrong. The decision of the Court of Appeal in Donnellan was an appeal from R S Hulme J. That case concerned advice given by a solicitor, Mr Donnellan, to his former client, Mr Woodland, regarding proceedings to obtain a court-imposed drainage easement under s 88K of the Conveyancing Act 1919 (NSW). The easement proceedings failed and Mr Woodland was ordered to pay the costs of the Council, including on an indemnity basis from the date of one of the Council's offers of compromise. The allegations of negligence against Mr Donnellan included that he was negligent in relation to advice concerning offers to compromise the easement proceedings by the Council. The claim of negligence was upheld by the primary judge. In the Court of Appeal in Donnellan, Beazley JA (with whom Barrett and Hoeben JJA and Sackville AJA agreed) allowed the appeal on the ground that Mr Donnellan had not been negligent. Nevertheless, their Honours also considered that even if Mr Donnellan had been negligent he would have had the benefit of the immunity. The reason given by Beazley JA was that the immunity would attach if the giving of advice, or the omission to give advice, led to a decision to continue with the case, or meant that the case was continued. The immunity was said to apply because the omission or conduct had affected the conduct of the case in court by requiring the case to continue. A different approach to the same conclusion was taken in Donnellan by Basten JA, who considered it contrary to principle to determine the question of negligence before the issue concerning the immunity because the rationale of the immunity is to avoid the reopening of the dispute, and to avoid a challenge to a final determination involving the exercise of the judicial power of the State. To determine the issue of negligence before the issue concerning immunity could undermine that rationale if the immunity existed. His Honour therefore considered that the immunity attached because, based upon the pleadings rather than the course of trial, Mr Donnellan might have argued that the advice given was reasonable because the orders made were improbable at the date the advice was given, thus casting doubt upon the correctness of the decision. In applying the decision in Donnellan in this case, Macfarlan JA in the Court of Appeal correctly observed that there is no difference in principle between an allegation that negligent advice was given about the amount of likely damages (as alleged in this case) and an allegation that negligent advice was given to reject an offer of a disclosed amount (as alleged in Donnellan). However, the conclusions of the Court of Appeal in this case and the Court of Appeal in Donnellan, that both instances engage the immunity from suit, are inconsistent with the course of the development of the principle of advocates' immunity. The decisions in Giannarelli, Attwells and D'Orta In Giannarelli v Wraith, a majority of this Court upheld the common law immunity from suit of an advocate. In the majority, Mason CJ described the boundaries of the immunity in the following terms: "Preparation of a case out of court cannot be divorced from presentation in court. The two are inextricably interwoven so that the immunity must extend to work done out of court which leads to a decision affecting the conduct of the case in court. But to take the immunity any further would entail a risk of taking the protection beyond the boundaries of the public policy considerations which sustain the immunity. I would agree with McCarthy P in Rees v Sinclair where his Honour said: '... the protection exists only where the particular work is so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause is to be conducted when it comes to a hearing.'" Sixteen years later, in D'Orta-Ekenaike v Victoria Legal Aid, a majority of this Court rejected a submission that the decision of the majority in Giannarelli should be reconsidered. A joint judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ said that there was no reason to depart from the test described in Giannarelli. The joint judgment summarised that test in terms which included work done in court and, quoting from part of the passage above from Mason CJ, "work done out of court which leads to a decision affecting the conduct of the case in court"; or, to express the approach in relation to work done out of court in another way, "'work intimately connected with' work in a court". A further eleven years later, in Attwells, this Court again unanimously rejected a submission that the immunity should be abolished. The majority declined to extend the immunity to acts or advice of an advocate which do not move litigation towards a determination by a court. In the joint majority reasons, French CJ, Kiefel, Bell, Gageler and Keane JJ reiterated the remarks from the joint judgment in D'Orta that there was no reason to depart from the test described in Giannarelli, and quoted the whole of the passage from Mason CJ set out above. The joint reasons of the majority in Attwells explained the rationale for the immunity when declining to extend it to compromises. Since the immunity attaches by the "participation of the advocate as an officer of the court in the quelling of controversies by the exercise of judicial power", it followed that the immunity did not extend to advice that leads to a settlement between the parties. Advice leading to a compromise of a dispute cannot lead to the possibility of collateral attack upon a non-existent exercise of judicial power to quell disputes. For this reason, the expression of the test concerning work done out of court which "leads to a decision affecting the conduct of the case in court", or which is "intimately connected with" work in court, is not engaged merely by "any plausible historical connection" between an advocate's work and a client's loss. The test requires that the work bear upon the court's determination of the case. There must be a "functional connection" between the work of the advocate and the determination of the case. In Attwells, the respondent submitted that an anomaly would arise if the immunity did not extend to negligent advice which leads to a compromise of the proceeding, but did extend to negligent advice not to compromise a proceeding which leads to a judicial decision. The joint reasons of the majority explained that the assumption underlying the respondent's submission was that the immunity would extend to negligent advice not to compromise a proceeding because that advice was intimately connected with the ensuing judicial determination. The joint reasons rejected this assumption on the basis that negligent advice not to compromise a proceeding gives rise only to an historical connection between the advice and the continuation of the litigation. As the joint judgment concluded, the giving of advice either to cease or to continue litigating does not itself affect the judicial determination of a case. Attwells cannot be distinguished The primary submission of the second respondent was that the decision in Attwells should be distinguished. He relied upon the reasoning of Macfarlan JA in the Court of Appeal, handed down prior to Attwells, where his Honour said that Mr Kendirjian's negligence action could involve departing from the views expressed in the District Court and Court of Appeal judgments in the personal injury proceedings. The second respondent submitted that a departure from the reasoning in the personal injury proceedings could arise because the respondents might seek to use the adverse findings about Mr Kendirjian's credibility to explain why the judgment awarded was much lower than the settlement offer of $600,000 plus costs. With respect, the negligence action by Mr Kendirjian against the respondents does not give rise to the possibility of any challenge to the findings of the District Court concerning Mr Kendirjian's credibility or otherwise. From Mr Kendirjian's perspective, he relies on the decision of the District Court in order to prove his alleged loss. From the perspective of the second respondent, issues concerning the reasonableness of advice given will be assessed at the time the advice was given, not at the time of the District Court judgment. The assessment of reasonableness will not involve any consideration of whether the decision of the District Court, affirmed by the Court of Appeal, was right or wrong whether in relation to credibility or otherwise. It was not suggested that any questions of reasonable foreseeability of loss could conceivably lead to a challenge to the reasoning or decision in the District Court. Indeed, nothing in the second respondent's pleaded defence raises any suggestion of a challenge to the reasoning or decision in the District Court. In oral submissions, senior counsel for the second respondent submitted that the respondents might challenge the credibility of Mr Kendirjian concerning "what [Mr Kendirjian] said to the lawyers about his disability". However, a credibility challenge of that nature, in separate proceedings based on separate evidence, is independent of the different credibility findings by the District Court concerning Mr Kendirjian's evidence in the personal injury proceedings. It does not call any of those findings into question. For these reasons, the reasoning in the majority joint judgment in Attwells requires that the appeal be allowed. The application to reopen Attwells As an alternative to the second respondent's submission that Attwells should be distinguished, he sought to reopen that part of the decision in Attwells where the joint judgment approved the remarks of Mason CJ, which had relied upon the remarks of McCarthy P in Rees v Sinclair. The second respondent submitted that that part of the quotation from Mason CJ in Giannarelli had not been approved by the joint judgment in D'Orta. It followed, he argued, that the scope of the immunity should extend to "work done out of court which leads to a decision affecting the conduct of the case in court" but not work done "affecting the way that cause is to be conducted when it comes to a hearing". The second respondent's submission was based upon the reasoning of Macfarlan JA in the Court of Appeal in this case but, as I have explained, that decision was given prior to Attwells. The second respondent did not refer to any of the principles commonly considered by this Court when deciding whether to reopen a previous decision. But, in any event, his submission is premised upon an illusory distinction. In relation to work done out of court, there is no real distinction between work done which leads to a decision affecting the conduct of the case in court and work done affecting the way that case is to be conducted at a hearing. A decision affecting the way that a case is conducted is the principal method, or perhaps the only method, by which an advocate affects the conduct of a case in court. Even if some artificial distinction between these formulations could be drawn, it is not evident in the joint judgment in D'Orta. The passage from Mason CJ, which was quoted in part by the joint judgment in D'Orta, was part of a single paragraph of integrated reasoning explaining why the immunity should not cease at the courtroom door. No submission had been made in D'Orta that some parts of the passage from Mason CJ, such as the words "affecting the conduct of the case", should be accepted but other parts, such as the words two sentences later, "the way that cause is to be conducted", should not. The second respondent's submission that Attwells should be reopened to revisit this point should not be accepted. Conclusion On 11 November 2016, this Court made orders by consent to give effect to allowing the appeal in respect of the first respondent and remitting that part of the appeal to the District Court of New South Wales. For the reasons above, the appeal should also be allowed in respect of the second respondent. Corresponding orders should be made in relation to the second respondent as follows:
Kendirjian
Lepore
(2016) 90 ALJR 572
Appeal allowed in relation to the second respondent; orders of the Court of Appeal and District Court set aside insofar as they concern the second respondent; second respondent's notice of motion dismissed; second respondent ordered to pay the appellant's costs in the District Court, Court of Appeal and High Court; matter remitted to the District Court of New South Wales.